1978-06-08

ROUTINE PROCEEDINGS


Mr. Janies A. McGrath (St. John's East):: Mr. Speaker, 1 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The year 1979 has been designated by the United Nations as the International Year of the Child, a fact which has been virtually ignored by this government whereas 70 other countries have set up commissions for this very purpose. This marks the twentieth anniversary of the declaration of the rights of children by the United Nations, to which Canada was a signatory. I, therefore, move, seconded by the hon. member for Edmonton-Strathcona (Mr. Roche):
That this House directs the Minister of National Health and Welfare to make a statement in this House before the adjournment on Canada's intentions with respect to the International Year of the Child and what plans, if any, the government has under way to participate with the provinces in recognizing and implementing the principles embodied in the United Nations' declaration.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FITNESS AND AMATEUR SPORT
[Stage Direction]
ANNUAL SOFTBALL GAME BETWEEN MPs AND PRESS GALLERY-MOTION UNDER S.O. 43
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I wish to move a motion which I consider very urgent. I think all members of the House, including Your Honour, will agree with it. I am sure Your Honour will be pleased to learn that last evening, in the annual ballgame between members of parliament and the press gallery, your team clobbered the fourth estate by a score of ten to six.


Some hon. Members:: Hear, hear!


Lorne Edmund Nystrom: This happened despite the fact that the press gallery had been in vigorous training since early spring and members of parliament had not played in over a year. In view of our very high esteem for members of the press gallery and our concern about the example that they must set for all of Canada, I move, seconded by the hon. member for Selkirk (Mr. Whiteway) and the hon. member for Kenora-Rainy River (Mr. Reid):
That this House instruct the Minister of State (Fitness and Amateur Sport) to summon immediately all her top advisers from across the land for the purpose of devising a foolproof emergency program with the very difficult, but not impossible, objective of upgrading the fitness of the average 30-year old press gallery member to that of the average 60-year old member of parliament.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The hon. member for Leeds.


FEDERAL-PROVINCIAL RELATIONS QUEBEC GRANT TO ALLEGED COMMUNIST-FRONT ORGANIZATION-MOTION UNDER S.O. 43
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise on a matter of urgency. If all hon. members will listen carefully, I think they will agree that this motion deserves the support of both sides of the House. It is in relation to a grant in the amount of $51,000 being given by the province of Quebec under the authority of Claude Morin, provincial minister of intergovernmental affairs, to an organization calling itself The Preparatory Committee of Canada for the Eleventh World Festival of Youth and Students, Box 99, Station V, Toronto. The festival is to be held in Havana, Cuba, July 28 to August 5, and the agenda proclaims in newsletter No. 5 the slogan "Anti-imperialist solidarity, peace and friendship" and announces youth delegates will be told methods of carrying out profound "political transformations" in their home countries. I, therefore, move, seconded by the hon. member for Hastings (Mr. Ellis):
That this House registers its disapproval of such a reprehensible grant by the government of Quebec to an apparent communist-front organization, and strongly urges the Quebec government to cancel immediately any portion of the grant not yet paid and, finally, requests the Premier of Quebec to order an end to any Quebec support-


Mr. Rodriguez:: No.


Thomas Charles Cossitt: If the hon. member for Nickel Belt (Mr. Rodriguez) would stop saying "No", I might be able to finish this motion. I know where his sympathies lie.
-for organizations which would seek to bring or advocate separation in Canada by means other than the democratic process.
80045 -24 Vi

June 8, 1978


Mr. Speaker:: The presentation of such a motion for discussion, pursuant to Standing Order 43, can be done only with the unanimous consent of the Elouse. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXPORT DEVELOPMENT CORPORATION
John R. Rodriguez: Mr. Speaker, I rise under the provisions of Standing Order 43 to ask for the consent of the House to deal with a matter of urgent and pressing necessity.


Thomas Charles Cossitt: No.


John R. Rodriguez: Mr. Speaker, 1 wish the hon. member for Leeds (Mr. Cossitt) would stop saying "No". We know where his sympathies lie.
In view of the fact that the Export Development Corporation presently uses three criteria when deciding whether to extend financial support to foreign ventures, they being the credit worthiness of the applicant, the viability of the project, and the likelihood that the project would go ahead anyway, and in view of the fact that the use of these three criteria as the only criteria has encouraged the export of jobs from Canada at a time when we need jobs most, I move, seconded by the hon. member for Brant (Mr. Blackburn):
That this House instruct the minister responsible for the Export Development Corporation to instruct the corporation to add to its criteria two other points, namely, that the corporation will take into account the adverse effect of such a loan or guarantee on the competitive position of our industry and on employment in Canada.


Mr. Speaker:: The presentation of such a motion for debate would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


LABOUR CONDITIONS
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
In view of the fact that radio CJYQ 930 Limited of St. John's, Newfoundland, a company beneficially owned by the

Secretary of State for External Affairs (Mr. Jamieson), and the operator of five AM radio stations in Newfoundland, was ordered by the Labour Relations Board of Canada on January 6, 1978, to bargain collectively with Local 94 of the National Association of Broadcast Employees and Technicians, and in view of the fact that CJYQ 930 Limited refuses to meet with the union representing their employees, despite the order of the Labour Relations Board, and persists in ignoring the collective bargaining agreement still in effect by paying less money than the contract calls for and by insisting on the working of longer hours, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the Minister of Labour grant immediately to Local 94 of the National Association of Broadcast Employees and Technicians the permission they have requested under section 148 of the Labour Code so that they can file a complaint with the Canada Labour Relations Board, and that the minister advise the company and his colleague that it is the policy of the government that the provisions of the labour relations law be adhered to and that genuine collective bargaining should be entered into between employer and employees without constant attempts to avoid bargaining by the employer.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, I would like to put my question to the Minister of Finance. In view of the statement made in the National Assembly this morning by the Quebec minister of finance, that in his view the federal government had two options open to it with respect to the matters covered by clause 30 of Bill C-56, would the Minister of Finance indicate if it is the government's intention to accept option No. 2, to use the terminology of the Quebec minister of finance, option No. 2 being making provision for an aggregate payment of $100 to Quebec City for all taxpayers in Quebec?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I have received a letter from Mr. Parizeau in which he accepts the formula which I put into the bill in clause 30(b), so of course we can proceed with it. About the second proposal he has made, I am still looking into it, and if it is better I will be ready to accept it. But at this moment I would prefer clause 30B. I will be in a position to table the ways and means motion later today.


Sinclair McKnight Stevens: My next question to the Minister of Finance is for greater clarification. When the minister refers to option A,
June 8, 1978

or alternative A, is he referring to the $85 payment to the residents of Quebec, leaving Quebec to their own means as to how they may recover that revenue, or is he referring to the $100 aggregate payment for which he is making provision under subclause (1) of clause 30 of Bill C-56, the provision which he has made for the other eight provinces?


Joseph Jacques Jean Chrétien: Mr. Speaker, the first formula in Mr. Pari-zeau's letter is exactly what we are proposing in our legislation, namely to pay directly to the government $40 million for the part of the cuts they made, and which complies with the formula offered to the other provinces. For the remaining $186 million we proposed, and Mr. Parizeau seems to find our proposal acceptable, to make a rebate of $85 to the taxpayers of 1977 so that the money could be given as soon as possible to those who paid taxes last year.


Sinclair McKnight Stevens: Would the minister indicate to the House why he is so reluctant to proceed under option No. 2 which would seem to put Quebec in a much more similar position to that of the other eight provinces, ensuring that there is not a payment to individual residents of Quebec, to which there has been constitutional objection and which would, presumably, anticipate a working agreement with Quebec on how the $100 can be handled between the federal treasury and the treasury in Quebec City?


Joseph Jacques Jean Chrétien: Mr. Speaker, perhaps the hon. member is a bit confused about the second proposition of Mr. Parizeau. He is not asking for the $100, as I proposed last week. He is asking me to send him the $40 million, as proposed in the other formula, rather than the $85 being in the mail right away. But he does not mind if it is in the taxpayers' returns for 1978, which means the beginning of 1979, then he could make some arrangement. In his letter he said that he will have to raise his taxes. That is exactly what I said at the beginning. In his jurisdiction, he can do whatever he wants. In my jurisdiction, I can do what I want. He has just recognized that in his letter.


Some hon. Members:: Hear, hear!


SALES TAX-INQUIRY WHETHER SAME TREATMENT WILL BE ACCORDED QUEBEC AS OTHER PROVINCES
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, I should also like to put a question to the Minister of Finance.
To assure the House today that the province of Quebec will be dealt with on the same footing as the other provinces with regard to the sales tax, can he tell the House whether he has accepted the first or the second option, to the effect that the money of the federal government will be paid to the Quebec government and not to the taxpayers of that province, so that
Oral Questions
we can be absolutely sure that we have almost exactly the same policy for Quebec as the other provinces?


Joseph Jacques Jean Chrétien: Mr. Speaker, I say to the hon. member that if he reads Mr. Parizeau's letter carefully, he will see that the latter recognizes that the federal government has the right to send money to the Quebec taxpayers, which is the principle we have always fought for. He does not ask us to send a cheque to the Quebec government, as the hon. member is asking us right now; Mr. Parizeau is asking us, very simply, if we wait until 1978, to make certain administrative arrangements with him to facilitate matters.


MANNER IN WHICH $100 PAYMENT TO QUEBECKERS WILL BE EFFECTED
Mr. Roch La Salle (Joliette):: Mr. Speaker, I want to ask a supplementary question.
1 would like to ask the Minister of Finance-he explained the first proposal clearly-whether he is willing to accept the second proposal as well? According to Mr. Parizeau's letter, it seems that he would also agree to the alternative of $100 in 1978. Is the Minister of Finance also prepared to make that $100 transfer in 1978 whose means of implementation are now being discussed with the Quebec government?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am sorry but in his second proposal Mr. Parizeau is not asking for the $100 I offered last week. He wants us to send him, because he has agreed in part to my plan in the budget for the $40 million, and it is on the $85 that he wants us to make arrangements for 1978. He does not talk about the $100. That is why in my opinion it now seems easier in the present circumstances to accept, as Mr. Parizeau is willing to accept, the proposal I submitted to the House when 1 introduced Bill C-56.


Roch La Salle: Mr. Speaker, I merely want to ask the Minister of Finance whether he believes that the Quebec minister of finance would accept the formula which the Minister of Finance considered last week, that is $100 in 1978? Can the minister maintain that the Quebec government would reject that formula?


Joseph Jacques Jean Chrétien: Mr. Speaker, in the letter he sent me he rejects my proposal of last week because he wants me to send him immediately the $40 million which I intend to refund one
way-


An hon. Member:: The choice.


Joseph Jacques Jean Chrétien: No, it is not a choice, he wants the $40 million immediately; as to the $85, if 1 send it only next spring, he wants some administrative arrangements.

June 8, 1978
Oral Questions


PIPELINES
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is directed to the Deputy Prime Minister and President of Privy Council as the designated minister for the northern gas pipeline. Press reports quote the Minister of Industry, Trade and Commerce as having told the Alberta chamber of commerce that he favours the export of gas to the United States during the initial stages of the Alaska gas pipeline and that any swap arrangement would involve paying the going price. He is quoted as having said:
We'll have to buy it back at the going price at the time, if we elect to buy it back.
I want, therefore, to ask the President of the Privy Council whether the Minister of Industry, Trade and Commerce was enunciating government policy in respect of the export of gas to the United States during the initial period of the construction of the northern pipeline.


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, in reply to the hon. gentleman, as he knows, before any such export can be undertaken there would have to be hearings not only by the National Energy Board but also by the Alberta authorities, and none of these events has taken place up to the present time. I would conclude, therefore, that the situation is still quite speculative on that point.


Thomas Clement (Tommy) Douglas: Mr. Speaker, surely the minister is better informed than that. In view of the fact that the Federal Energy Regulatory Commission of the United States has given conditional approval to an agreement by which the Canadian company's subsidiary is selling gas to the American company which is to own the American portion of the line, is the minister telling the House that he knows nothing about the fact that this approval has been given and that this application has been made to the FERC?
I ask the minister whether any consultation has been held with him, his officials or the government, in any shape or form, regarding this conditional approval which has been sought and given in respect of the export of gas with the provision of the possibility of a swap arrangement.


Allan Joseph MacEachen: Mr. Speaker, no consultations have been held with me or, to my knowledge, with the commissioner of the northern pipeline or any of his officials. I was referring to what would be required in Canada in order to provide for export of the type mentioned. I was not in any way disputing the hon. member's comments about what was happening in the United States.


Thomas Clement (Tommy) Douglas: Mr. Speaker, in view of the fact that the National Energy Board is a
[Mr. Chretien.)
regulatory body whose sole function is to recommend to the government the amount of gas or oil which can safely be exported, and that the final decision lies with the cabinet both as to the amount of gas or oil to be exported and the terms under which it will be exported, I ask the minister whether the government has worked out a policy. In view of the fact the two companies which are to build the pipeline have already applied for and received permission to import gas into the United States, what is the government's policy in respect of price? Are these companies to be allowed to sell Alberta gas to the United States partner, and then Canada will buy that gas back from Alaska at a price which will be $1 or $2 per thousand cubic feet higher? Surely the minister has worked out a policy and surely this House has the right to know what that policy is.


Allan Joseph MacEachen: Mr. Speaker, I believe it might be more appropriate for the hon. member to address his questions to the Minister of Energy, Mines and Resources, who has the National Energy Board under his authority. It seems to me the hon. gentleman is premature in putting his questions, when applications have not come forward to the National Energy Board nor, to my knowledge, have applications been submitted to the Alberta board in order to undertake these arrangements. The hon. member is asking about a policy that in the first instance has to be developed by the regulatory authorities.


FISHERIES
Mr. Eudore Allard (Rimouski):: In the absence of the Minister of Fisheries and the Environment, my question is directed to his parliamentary secretary.
Considering that redfish fishermen from the iles-de-la-Madeleine will not go to sea until the government gives them a guarantee of 2 cents for their take, is the government aware of the problem and what decision will it take to solve that dispute between the fishermen and the government?


Mr. Hugh A. Anderson (Parliamentary Secretary to Minister of Fisheries and the Environment):: Mr. Speaker, 1 will take notice of the hon. member's question. I am not aware of the subject that he has raised.


June 8, 1978


PRESENCE IN GALLERY OF DIRECTOR-GENERAL OF UNIVERSAL POSTAL UNION
Mr. Speaker:: Before continuing with the question period, may I call to the attention of all hon. members the presence in our gallery of a distinguished visitor who is on an official visit, the Director-General of the Universal Postal Union, Mr. Mohamed Ibrahim Sobhi.


Some hon. Members:: Hear, hear!


EXTERNAL AFFAIRS
John Carnell Crosbie: Mr. Speaker, my question is for the Prime Minister. Last Friday, Canada declared that the 1978 interim reciprocal fishing agreement between Canada and the United States would not be implemented by Canada.
Is the Prime Minister aware that the government of the province of Newfoundland, where 90 per cent of its fish exports go to the U.S. and where 20 per cent of the work force are either fishermen or engaged in the fish processing industry-the province most dependent on fishing, economically- was not given any notice by anybody in the Canadian government that this action was going to be taken, neither the minister of fisheries, the premier nor any official? They received no notice. They were not consulted, nor were they asked for their opinion. Will the Prime Minister see that such conduct, which endangers the whole fabric of federal-provincial relations in this country, will not occur again?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, if I may answer the question of the hon. member, he may be formally correct in saying that there were no direct contacts with the government of Newfoundland on this particular action, but it was for a very obvious reason: Newfoundland fishermen and the Newfoundland fishing industry were not directly involved in the boundary question on either the Georges Bank or the west coast.
However, in terms of keeping the Newfoundland government advised, I can assure the hon. member that on all of the discussions concerning our relations with the United States and also, incidentally-and perhaps of more importance to the hon. member-on the matter involving the boundary question of St. Pierre and Miquelon there has been a whole series of meetings with the Newfoundland government and it is my intention to have still more, probably within the next few days.


John Carnell Crosbie: Mr. Speaker, is the Secretary of State for External Affairs aware that the Premier of Newfoundland and the minister of fisheries of Newfoundland have confirmed that they were not informed nor consulted on this step which will affect Newfoundland if the United States takes any retaliatory
Oral Questions
action? It will certainly affect Newfoundland in its fish exports to the U.S.
Is he also aware that the U.S. treasury department is soon going to rule on whether countervailing duties are going to be imposed on $200 million worth of fish imported into the U.S. from Canada because of Canadian assistance programs and, as a matter of fact, is the minister aware that there is a very strong possibility that tomorrow the United States is going to rule that there will be a countervailing duty on cod blocks exported from Newfoundland? This being the case, and the fact that this action coincides with the minister's action, does the minister agree that the Newfoundland government must be consulted on a program such as this, and a joint program of action developed? Is the minister aware of that-


Mr. Speaker:: Order.


John Carnell Crosbie: -and will steps be taken to prevent this kind of thing?


Donald Campbell Jamieson: Mr. Speaker, of course I am aware of it. I want to admonish the hon. member, as I have done in the House in the past, to please-if he does not have any concern for the government, he should for his fellow Newfoundland fishermen-keep as much distance as he possibly can between the boundary issue and the question of tariffs.
I have made efforts, with the support of hon. members on the opposite side, to avoid the necessity of bringing these two issues into some conjunction so that there appears to be a connection between them. It is of the utmost importance that it not be seen that this boundary dispute in any way reflects on any tariff issues which may be between Canada and the United States. I again express my appreciation for the fact that in public discussion in the committee meeting of two nights ago, this issue was not raised; and I understand why it was not raised.
In so far as Newfoundland and consultations are concerned, on the narrow point about the boundary, the hon. member is correct; I did not talk to the Premier of Newfoundland about that particular point. I did not do so for the very reason I am speaking about now, namely, that I did not want to tie the boundary question and the tariff question, and Premier Moores has had no direct interest in the boundary question.
I said to the hon. member in the House a few days ago, when he raised this matter, that I was aware that there was a different issue, which has been long-standing for several months, on the question of tariffs. I am in the process this day of having discussions and negotiations about this situation. I spoke with the Secretary of State of the United States at 6.15 last evening and made it clear to, him that there was no relationship between the two questions, and 1 had confirmation from him that he would do his best to separate the two. If the hon. member is really concerned about Newfoundland and the Newfoundland fishermen as much as I am, he will stop trying to make this connection.

June 8, 1978
Oral Questions


John Carnell Crosbie: Mr. Speaker, a final supplementary question. Does the minister realize that what he has just said illustrates how important this is to Newfoundland? While he may keep it separate in his mind, the United States does not have to. Other people who will be affected by his actions should be consulted. Is the minister saying that there are going to be no countervailing duties imposed on fish products from Newfoundland as a result of his discussions with the Secretary of State for the United States? Is that his statement?


Donald Campbell Jamieson: Mr. Speaker, I could give the hon. member that absolute assurance as of this moment if he would be prepared to support me in trying to avoid a reduction of two cents per pound to Newfoundland inshore fishermen for the rest of this fishing season. That is what is at issue. I can meet the United States clear across the board and get many plaudits from the United States and ensure that there is no connection. The need for me to do that, however, is very much circumscribed by the fact that I am conscious that we have said we will pay the inshore fishermen of Newfoundland a two-cent subsidy for the remainder of the fishing season.
The thing 1 am trying to negotiate is that if I assure the United States government that the subsidy will be ended by the end of this year and will not continue, will they then refrain from taking countervailing action? I cannot be sure that they will do that, of course. I would be a fool and 1 would also be unfair to the Newfoundland fishermen if 1 were to say at this time to the United States that I will stop the two-cent payment to Newfoundland fishermen. If the hon. member wants me to do that, let him say so now and we can get the whole matter resolved within 24 hours.


Some hon. Members:: Hear, hear!


ADMINISTRATION OF JUSTICE
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I should like to ask a question of the Minister of Justice. I understand the minister is prepared to give some indication to the House of his intentions with regard to documents in the Peter Treu case, what he will file, how, and why. I will give him that opportunity by requesting him to do so.


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I undertook to the hon. member the other day to table what I could. I am ready and able to table, later, the undertakings on bail and the statement af the judge on sentencing. While a political opponent, 1 thinx the hon. member would not want me either cited for contempt of court or charged under the Official Secrets Act. I am, of course, prevented from tabling the reasons for judgment, but I have instructed counsel to apply to the court for an order varying the order, and I hope

the judgment can be tabled in this House because I think it would be helpful.


Gerald William Baldwin: Mr. Speaker, the Minister of Justice tempts me with his observation about the Official Secrets Act. I should like to ask a supplementary question. Having in mind the comprehensive nature of this act, the fact that the minister, after two years of thorough and complete investigation by the authorities, laid two charges of the nature he did, that the act is wide enough that obviously many members of this House, including front benchers, members on this side and members of the press gallery have probably been in breach of the act from time to time, and having in mind that one year after the trial of Dr. Treu commenced he was awarded a contract by the NATO service centre-NATO being an organization of which Canada is still a member, unless the Prime Minister fixed that when he was away recently-and Dr. Treu is engaged in carrying out a contract for NATO at the present time, will the minister not agree that, under all these conditions, the interests of justice would be served if he instructed his counsel to agree to quash the existing conviction and sentence and agree to a new trial being held in the open, with full right reserved to the Crown to seek certain documents which may be sensitive and that certain evidence be kept out of the public eye?


Stanley Ronald Basford: Mr. Speaker, I am afraid I cannot accede to the hon. member's request. The case is under appeal at the present time. I think, obviously, that Dr. Treu should be permitted to pursue that process. At the commencement of the trial, both counsel in the case agreed to the necessity of the trial being in secret. I do not have a transcript of the proceedings, but I am informed that in a recent statement, counsel for Dr. Treu acknowledged at a seminar that while secret trials were unusual in our jurisprudence, this was the kind of case that required the evidence being taken in secret.
1 would remind the hon. member that, difficult as it may be, the evidence in this case involved the NATO communications system. That is a military secret of the highest order, and there is no way, in the interests of NATO and of Canada, that it can be made public.


Gerald William Baldwin: A final supplementary question, Mr. Speaker. 1 understand that NATO is of a very sensitive military nature and that Dr. Treu is still working on a communications system which is in that sensitive area. This is one of the reasons that persuades me to ask this final question: Will the minister agree to facilitate the appearance of Dr. Treu before a committee of this House on matters external to the trial, keeping to one side the narrow issues of the trial, so that he might be able to give this House details of the harassment and the extent to which the facts of this case, outside of the trial itself, should be made public?


Stanley Ronald Basford: No, Mr. Speaker; first, of course, for the obvious technical reason that I am not in charge of committees of the House. Second, I have had no representations from his counsel to that effect, nor has my counsel had any such
June 8, 1978

representations. I think my proper course of action is to allow Dr. Treu to do whatever he wants to do to make his views known, through counsel, to me.


EXTERNAL AFFAIRS
Mr. Louis Duclos (Montmorency):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs.
Can the minister tell the House, based on the latest reports from our embassy in Lima, what the situation is in Peru regarding the presidential election, and could he also advise us as to the fate of Mr. Hugo Blanco who was to be a candidate in the election but who, according to some sources, was arrested and secretly transported to Argentina along with six other Peruvian citizens?


Donald Campbell Jamieson: Mr. Speaker, on the first part of the question, I think it is common knowledge that there has been some delay in the election to which the hon. member refers, but I believe a new date has been set for either June 18 or 19 of this year. 1 am not exactly sure of the date.
We are also aware of the fact that the gentleman to whom he referred has apparently disappeared, but no word has come to us indicating what happened to him. We are continuing to make inquiries on a humanitarian basis.


TRANSPORT
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, 1 have a question for the Minister of Transport of which I have given him notice. 1 have been informed that Transport Canada intends to go ahead with the construction of a 30,000 square foot metal warehouse on the foreshore of the entrance to Victoria harbour. The Department of Public Works promised verbally on several occasions that the coast guard buildings would be built in conformity with local design requirements, but their present plans are not. Can the minister explain this unresponsiveness to the city's design plans, and does he intend to do anything about it?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, 1 am informed that the coast guard construction has the necessary building permit and also meets the city's zoning requirements. I am also informed that the high quality metal panels which are being used have high modifications included for such things as windows for the sake of appearance. I think,
Oral Questions
having regard to the combination of interests, including the amount of money which can and should be spent on a building of this type, a good balance has been achieved.


Allan Bruce McKinnon: Mr. Speaker, the city of Victoria and other levels of government have chipped in and have spent millions of dollars on the beautification of Victoria harbour. They have turned down tens of millions of dollars of commercial development which did not fit in with their design plans for the harbour. The federal government, of all people, should not go in and despoil the beauty of that harbour.


Some hon. Members:: Hear, hear!


Allan Bruce McKinnon: 1 would ask the minister if he would reconsider this decision, possibly appoint an independent architect to give him advice, or take the advice of the provincial government, the city of Victoria or the design panel committee-


An hon. Member:: Anybody.


Allan Bruce McKinnon: -or delay construction until after the next election, if we ever get it.


Otto Emil Lang: Mr. Speaker, I am afraid the hon. member has omitted any reference to the fact that in this case a building permit from the city was sought and obtained.


An hon. Member:: So what?


Otto Emil Lang: i do not know whether the hon. member is suggesting that this coastguard operation should in fact have gone somewhere else. That may be a point. A decision like this could have been made. But there is obviously a limit to the amount that can be spent on a building which is essentially designed to warehouse a certain amount of materials and equipment.


HEALTH AND WELFARE
Mr. P. B. Rvnard (Simcoe North):: Mr. Speaker, I would like to address a question to the Minister of National Health and Welfare. In view of the loss of almost 4,000 doctors from Canada during the years 1967 to 1977, and with increasing losses now, what plans does the minister have to rectify this situation? Can she assure the public that there will be enough graduates coming along, not to guarantee the quality of care, because you cannot guarantee the quality of care when the top men are lost, but to guarantee that there will by physicians available to look after the increasing number of geriatric patients in the next ten years?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, on the general problem of emigration

June 8, 1978
Oral Questions
of physicians and specialists, the real statistics for 1977 estimate that 600, not 1,500, departed. The latter figure is often referred to and has already been used once by the hon. gentleman. I can assure him that a sufficient number of young graduates will replace those physicians emigrating abroad- who are not all Canadians, by the way.
As to the problem of geriatrics which the hon. member touched upon in the last part of his question, we all know that there are not enough specialists in that particular field and that this subject will be touched upon at a special conference in the fall.


Philip Bernard Rynard: Mr. Speaker, in view of the fact that the bloc system runs for a period of five years, how can the minister be assured, when that program can be interrupted at any time within five years, that the quality of care and availability of doctors will be present in each and every province?


Monique Bégin: Mr. Speaker, I am not sure 1 understood the question properly, but there is no problem since there will not be any disruption in any of the elements which are the components of the health delivery system in Canada. There will be no disruption in the training of new physicians and specialists and there will be no disruption in the development of the health care of the country, except for improvements, and I do not call that disruption. In most of the provinces these improvements are moving toward more ambulatory care. The hon. gentleman has been a proponent of this, and there are no cuts in budgets by any of the provincial governments, to my knowledge. The system is functioning very well and improving within existing budgets.


ADMINISTRATION OF JUSTICE
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I have a question for the Minister of Justice with respect to the wage dispute between the 25 women members of the Ottawa Steel Plate Examiners Union and the British American Bank Note Company. On Thursday, May 25, 1 asked the minister, as reported at page 5718 of Hansard:
In view of the fact that section 19 of the Canadian Human Rights Act empowers the government to include a directive in federal contracts with respect to the anti-discrimination sections of the act, may I ask the minister if the government will test the validity of section 19 of the act by giving a directive to the British American Bank Note Company to pay attention to those anti-discrimination provisions?
Two days ago the hon. member for Oshawa-Whitby asked whether there was yet an answer to the question, and the minister said, "No, not yet." I hope he has it today.


Stanley Ronald Basford: Mr. Speaker, it is provided in section 19 that the governor in council will make regulations under that act before it can be applied. When the Human Rights Commission was first established, it was envisaged that they would examine the use of section 19 and

propose recommendations to me or the governor in council as to the type of regulations that should be passed. The Human Rights Commission, as I understand it, is doing that with regard to the general situation. It is aware of the particular case the hon. member raises, and has it under advisement.
However, there are some difficulties in using this as a test case. First, it would require retrospective application of the legislation, which does not commend itself to me, initially, as a good test case. Second, the arbitrator, as 1 read the arbitration award, clearly found that there was no discrimination in this particular contract. In any event, before section 19 can be applied, we need recommendations or reports from the Human Rights Commission which has the matter under advisement.


Stanley Howard Knowles: Mr. Speaker does the government not have some sensitivity over the fact that it is doing business with a company that is in violation of its own Human Rights Act?


Stanley Ronald Basford: Mr. Speaker, as I read the arbitrator's award, that is not the case.


AIRPORTS
Mr. D. M. Collenette (York East):: Mr. Speaker, my question is for the Minister of Transport. It concerns a report in Wednesday's Globe and Mail quoting a London Sunday Times article that the West German government has rated Toronto international airport one of the least secure airports in the world.
I would ask the minister if this report is true, and if not, could he, through his colleague the Secretary of State for External Affairs, ask for an apology from the West German government, since accusations of this sort most certainly undermine the confidence of millions of Canadians and tourists who travel through the Toronto airport?


Otto Emil Lang: Mr. Speaker, I can assure the hon. member that the allegation of lack of safety at Toronto airport is completely untrue. It appears that at one time, for a very brief period, the Toronto airport did appear on a list which was prepared by the German authorities. But almost immediately, when it came to the attention of Lufthansa, they informed the German authorities that in their view-and Lufthansa is knowledgeable about the matter, as they use the Toronto airport facilities-the Toronto international airport security standards were absolutely adequate and the Toronto airport was immediately removed from the list.
I should say, as well, in terms of the German government, that I appreciated an immediate call from the German ambassador here to explain the situation. He has also contacted the Department of External Affairs and I consider the matter closed.
June 8, 1978


EXTERNAL AFFAIRS
Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Secretary of State for External Affairs. It relates to the hunger strike of Chilean friends and relatives of disappeared persons and prisoners which was terminated yesterday at noon, of which perhaps the minister is aware. As a result of an official commitment which was made by the hierarchy of the Roman Catholic Episcopal Conference in Chile to press government authorities on the fate, after the disappearance, of persons and prisoners and, perhaps more important, the apparent assurance of the minister of the interior to clarify the situation case by case in, and I quote, "a short period of time" and in view of the previous commitment of about a year ago from President Pinochet to provide the same information-a commitment made to the United Nations-I wonder what action the minister is prepared to take on behalf of the Canadian government, as well as through the offices of either the Secretary General of the United Nations, Mr. Waldheim, or the Human Rights Commission, to ensure that in fact we do get to the bottom of the disappearance of 2,500 persons and prisoners, which is a very serious situation to those who are deeply involved in this great human agony.


Donald Campbell Jamieson: Mr. Speaker, I am aware of this matter and I share the obvious concern of the hon. member and of all members in this issue. We have taken a number of steps already and we have done a certain amount of monitoring of the situation to the best of our ability. The response has not been adequate. However, we see some evidence that progress has been made on President Pinochet's commitment, but not enough and not rapidly enough. I am afraid the most I can do for the hon. member is to say that I will take his proposals under advisement.
We can certainly make representations to the Chilean government along the lines suggested, and 1 will look into the possibility of action through the Secretary General of the United Nations and in other ways.


FINANCIAL ASSISTANCE BY CROWN AGENCIES IN SEARCH FOR OIL AND GAS IN PAKISTAN
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, 1 wish to direct a question to the Secretary of State for External Affairs. This week, the government announced that Petro-Canada and C1DA will combine to spend $70 million to search for oil and gas in Pakistan. Since the rationale of Petro-Canada is to increase Canada's proven oil and gas reserves, and since the stated policy of C1DA is to give priority to meeting the basic needs of people in the poorest countries, what are the circumstances which have led to this strange
Oral Questions
policy by which two government agencies are now doing what private industry could do much better?


Donald Campbell Jamieson: I am not sure whether I can give a total response within the constraints of the question period. The hon. member has referred to the mandates of these organizations. I think he would agree that although Petro-Canada has an important role to play within Canada, it is not inhibited or prohibited from acting elsewhere in the world. Similarly, while CIDA has an obvious preoccupation with one particular stream of foreign assistance, namely, to the poor people of the world, part of its mandate is to look on the development side.
The hon. member asked me to explain the rationale behind this project. As I advised the hon. member earlier, I have seen the documentation and the reason for it. 1 think it deserves a good deal of support both as a worth-while form of assistance to Pakistan and also as containing a substantial component, as 1 understand it, of Canadian equipment, material and technical assistance which certainly add to its benefit. If the hon. member is interested, I am sure we could provide him with a written background paper outlining the history of the project and the reason the decision was made to proceed.


Douglas Roche: I appreciate the minister's response. However, since this is an abrupt change in Canadian policy with regard to foreign aid, I should like this document to be made available not only to myself but to the Standing Committee on External Affairs, so that the committee might study the appropriateness of this project and the aid-effectiveness of the plan the minister has mentioned.


Donald Campbell Jamieson: I believe the hon. member is on the steering committee, and it is a matter for the committee itself to decide how and when it will proceed. I will do my best, but I want to say that I am not at all in agreement with the hon. member's preamble in which he suggested there has been a dramatic change in policy. I think this project is consistent with one aspect of Cl DA's role. The hon. member might wish to consult the chairman of the committee in the first instance. I am in a position to give him a great deal more information than I can give him orally today.


AGRICULTURE
Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I wish to direct a question to the Minister of Agriculture pertaining to the statement from Washington that President Carter will today announce a 15 per cent increase in U.S. beef import levels. In view of the fact that Canadian cattle producers are only now beginning to recoup a small part of the $400 million they have lost in equity in the last four years, will the minister assure our cattle producers that he will not be increasing Canadian beef quotas which have been set for all of 1978 following reasonable debate and agreement?

June 8, 1978
Oral Questions


Hon. E. F. Whelan (Minister of Agriculture):: The hon. member should be told the amount of quota the United States is increasing would mean we would have about 11 million more pounds which would go to the United States, but at this time this year we have shipped only 32.9 million pounds to the United States and last year we shipped 44.8 million pounds, so I do not think the change will affect us much.
Regarding any decision the government makes concerning the quota restrictions we have just put into effect, what we would do was clearly outlined in the news release at that time and 1 do not think we have any intention to change that, but to say there is no discussion about what the United States is doing, or on the whole beef situation in the world, would be wrong because there is discussion.


Herbert Thomas (Bert) Hargrave: 1 would remind the minister that he made a very firm commitment to stick by this quota for 1978. However, in view of the statement made yesterday by the Minister of Consumer and Corporate Affairs that there is a shortage of beef, which is certainly not true, and that he will be discussing some initiatives with his colleagues, I ask the minister if he will explain some of the facts of life about beef production in Canada to his colleague, the Minister of Consumer Affairs, and what it means to survive in an industry which has not had a price increase in four years and which has been operating at less than the cost of production.


Mr. Speaker:: Order, please. The hon. member is now making a representation.


AIRPORTS
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, on May 15 1 directed a question to the Minister of Transport asking whether he could provide any positive evidence which would prove or demonstrate that there have been four violations involving vehicles on airport runways since the incident at Cranbrook on February 11. Does the minister have that information available?


Otto Emil Lang: Mr. Speaker, I do not have that report at this point.


Robert Hylton Brisco: In light of the fact that on April 20 a Pacific World Airlines aircraft was forced to go round again on a final approach because of a vehicle on the runway at Cranbrook airport, two months after the accident which brought about the fatal crash, is the minister now prepared-in light of this evidence passed to me by PWA-to order an immediate inquiry into the effectiveness of the ground-to-ground and ground-to-air facilities at this airport; or does he intend to wait until there is another accident?


Otto Emil Lang: The hon. member is being unfair. He knows full well that the whole question of these communications is pres-
[Mr. Hargrave.)
ently under investigation both as to the specific incident which occurred and at airports around the country. The inquiry is not related to one airport.


CANADIAN CULTURE
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is for the Secretary of State. Is the minister aware of the confusion and almost complete lack of accountability demonstrated by his officials at the standing committee yesterday, who want to increase the cost of the Discovery Train from $750,000 to $2,250,000 a year?


Hon. John Roberts (Secretary of State):: I would certainly not accept the hypothesis assumed by the hon. member at the beginning of his question as to confusion among my officials in their presentation yesterday. It is true the original estimates of the cost of the Discovery Train are below the cost we expect to be incurred. We are looking at various ways of making up the shortage.


Benno Friesen: If the Secretary of State had been in the committee yesterday, he would have seen that confusion. Since Treasury Board has approved only $750,000 per year for operating costs, I should like to ask him whether, in light of the government's so-called austerity program, he feels there is justification for tripling the cost of this operation.


John (Moody) Roberts: The hon. member knows it is not the custom of the Secretary of State to attend committee meetings when officials of the agencies are appearing, unless there is some special request for him to do so. He also knows 1 shall be meeting with the committee in 30 minutes. If he is asking me whether I know of the financial implications of this project, the answer is yes. If he is asking me whether I am considering ways of dealing with the problem, the answer is also yes.


Mr. Speaker:: I have notices from two hon. members regarding questions of privilege relating to documents tabled last evening, and ! intend to rule on the question of privilege raised by the hon. member for Peace River (Mr. Baldwin). However, it being Thursday, there is the usual question about the business of the House, and I wonder if hon. members might agree that we take that now and then proceed to these questions of privilege. If so, I will recognize the hon. member for Grenville-Carleton (Mr. Baker) on a point of order.


Some hon. Members:: Agreed.
June 8, 1978


BUSINESS OF THE HOUSE
Mr. Baker (Grenville-Carleton):: Mr. Speaker, on a point of order I wonder if the minister will tell us whether it is still his intention to give priority to Bill C-56 in terms of government business, and whether there is any change in the list of legislation he announced a couple of weeks ago.
While the minister is answering, 1 wonder if he would be prepared to designate Wednesday, June 14, and Thursday, June 15, as allotted days.


Allan Joseph MacEachen: Mr. Speaker, there is no change in the legislation which is now before the House. That will be continued, and there is no change in the list of legislation which I mentioned to my colleagues and to the House of Commons. When we finish the debate on the present bill, that will probably be a good time to review the situation with a view to concluding our business by the end of June. I, of course, designate next Wednesday and Thursday as allotted days.


Walter David Baker: Mr. Speaker. I wonder if 1 could use this matter of House business to indicate that the motion for the allotted day tomorrow is as follows:
That this House notes with concern the secret trial of Alexander Peter Treu and the harassment of the Toronto Sun and its editor, Peter Worthington, under the provisions of the Official Secrets Act, and urges the establishment of a special committee of this House to recommend such changes in the act as will limit its scope to matters directly related to national security and defence.
That motion will be in the name of the hon. member for Peace River (Mr. Baldwin).


Stanley Howard Knowles: Mr. Speaker, with respect to House business, since the Deputy Prime Minister (Mr. MacEachen) made reference to an intention about which we have known for some time, namely, to try to bring this part of the session to a conclusion on June 30, can he tell the House whether the government has any plans respecting the two holidays, June 24 and July 1, both of which this year fall on a Saturday? Every year when these two days come along certain questions are asked. Does the government have any plans about sittings of the House with respect to those two days? 1 do not mean we should sit on those days, but are there to be compensatory days off?


Allan Joseph MacEachen: No, Mr. Speaker. I am surprised that the hon. member would even suggest to his colleagues in this House that we should not sit on the greatest possible number of days. It is not our intention to make compensation for holidays which fall on Saturdays. Therefore, it will not be our intention to change or to eliminate the sitting on Monday, June 26. It is not my expectation that the House will be sitting on July 3, but if it should happen by some misadventure that we do sit in July, it would not be my intention to compensate for the July 1 holiday.
Privilege-Mr. Baldwin


Mr. Lambert (Bellechasse):: Mr. Speaker, can the government House leader tell us if the French-speaking staff of the House of Commons, who usually have a holiday on June 24, will have the day off later on or at a date set by the government that will cause the least disturbance, since this year that holiday falls on a Saturday?


Allan Joseph MacEachen: Mr. Speaker, 1 am happy to turn this question over to the rightful authority.


PRIVILEGE
Mr. Speaker:: Order, please. The hon. member for Peace River (Mr. Baldwin) has raised a question of privilege concerning the remarks of Judge Mayrand respecting some interventions by the hon. member for Peace River in this House and their reference to the trial of Peter Treu.
Since that question of privilege has concerned the right of a member of the House of Commons to speak in this House in criticism of proceedings in our courts, it has provoked a good deal of discussion. That discussion was contributed to at great length by a number of hon. members who had done some study on the matter. They made very useful contributions, and rather than attempting to refer to those individual contributions in terms of particular arguments to which 1 will be referring, I simply want to recognize the very useful contributions which have been made, and to say that they have been of great help to us in researching the matter.
The hon. members to whom 1 refer are the hon. member for Grenville-Carleton (Mr. Baker), the hon. member for Peace River (Mr. Baldwin), the Minister of Justice (Mr. Basford), the right hon. member for Prince Albert (Mr. Diefenbaker), the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn), the hon. member for Winnipeg North Centre (Mr. Knowles), the hon. member for Central Nova (Mr. MacKay), the hon. member for Timiskaming (Mr. Peters), the Parliamentary Secretary to the President of Privy Council (Mr. Pinard), the hon. member for Halifax (Mr. Stanfield), and the Parliamentary Secretary to the Minister of Justice (Mr. Young).
The arguments in favour of finding this language by Judge Mayrand to constitute a question of privilege relate primarily to three areas, that is, that these remarks themselves were made for the purpose of intimidating a member and could really not have had any other purpose; that the remarks, coming as they did from a judge speaking, for example, of not being able to tolerate the remarks of a member of parliament certainly have more weight than those of perhaps an editorial writer or any other citizen; and, finally, that the remarks of the judge were obviously based on a misunderstanding of what the hon. member for Peace River in fact had said in the House

June8, 1978
Privilege-Mr. Baldwin
because the remarks of the judge indicated that the hon. member should be attempting to change the law and not criticize the courts and, in fact, on every reference that is exactly what the hon. member had been doing. The argument therefore became that they constitute a misrepresentation of the efforts of the hon. member and of the proceedings of the House.
On the other hand, those arguments which would prevail against a finding of privilege are that the courts, like parliament, enjoy privileges that ought to be left to them without interference from us; that the judge was doing nothing more than defending his court in the circumstances; that he did not in any way deny the privileges of members; that in no way have the judge's comments intimidated any member; that they do not constitute an instrument of the court as they easily could have done; and that, finally, the issue is really one of a difference of opinion regarding the interpretation of language.
Regarding the precedents relating to the use of language as a matter of intimidation, I think we have to isolate it to that because rarely-in fact, never-in the precedents which were cited by any of the hon. members who contributed to the discussion, or in our research, could we find a precedent in which language which implied a threat but did not state it had been found to be a matter of privilege. 1 think that is quite significant.
On one occasion referred to in Erskine May's nineteenth edition at page 150 a letter to a member threatening him with a trial at some future date if he continued a line of questioning was held to be privilege, but that obviously specifically stated a threat of prosecution.
The one Canadian precedent which was of some use was the recent case involving the hon. member for Leeds (Mr. Cossitt) and his complaint against the then president of the Canadian Broadcasting Corporation that the language of the president of the corporation had been intended or calculated to intimidate or influence the hon. member. At that time the ruling said, in part:
-I must indicate that as a general proposition nothing that anyone says about the conduct or performance, the speech or contribution of any hon. member could in general terms be taken as interference with his right to speak or to operate as a member of the House of Commons. I do not see . . . that his privileges as a member of the House of Commons, his right to appear here and to participate fully as an active member of the House, his right to speak and express his opinions, have in any way been interfered with.
In interpreting the judge's remarks, it seemed to me that, without any dispute about the translation from French into English, there is one statement that would represent the epitome of the arguments in favour of finding privilege, that is, the circumstances in which the judge said:
In the name of respect for judicial independence, we cannot tolerate the remarks of Mr. Gerald Baldwin, MP who was wondering whether the law had not been well understood or had been wrongfully applied by the judges.
It seems to me that this statement can be interpreted as being offensive to the privileges of the House, for several reasons. First, it is extraordinary for a judge to become
[Mr. Speaker.)
involved in any kind of public commentary. 1 think that all of us, whether lawyers or otherwise, are aware of the fact that only in the most extraordinary circumstances does a judge ever speak out to the public with respect to proceedings in his court. There are several reasons for that respecting the independence and the dignity of the judiciary, but, in addition, there is the obvious reason that a judge has several remedies available to him, the least of which is to make public statements and to get into a public dispute, which has always been unseemly for those who preside over the courts and never seems to be productive. Certainly it does not seem to have been very productive in these circumstances.
Those who argue that it could have been found as a privilege would want to urge also that such remarks by a judge-and not even the trial judge-cannot be looked upon simply as an outburst of temper since they were uttered by a judge acting in the capacity of acting chief judge of the court and, therefore, had special weight and significance, but ought to be taken as more than simply a passing warning in respect of the conduct of the hon. member, ought to be taken as a threat and an intimidation of the hon. member.
Those who argue that it should be taken as a privilege say the judge could have used less offensive words. If he simply wanted to disagree with the hon. member for Peace River he could have easily said that or, if he rejected his proposition, that could have been said as well. Instead, he said "we cannot tolerate", which is much stronger language than necessary simply to disagree.
Finally, one other reason-I think the hon. member for Halifax put it very well-was that, never mind the specific language, the general tone of the remarks should be considered. Why would a judge bother to do that, except for one purpose, that is, to tell the hon. member that he should desist in his criticism of the courts or in his criticism of the proceedings in this particular case, because it was offensive.
On the other hand, a more generous interpretation is equally available, it seems to me. It is perfectly possible to interpret the judge's language as being nothing more than a defence of his court. His court has been criticized, and I think he has said that his court has been criticized unfairly. He might have said, "We are instructed by the law to carry out the trials in this way, therefore we really cannot accept or tolerate this kind of criticism. It is not our fault, we simply obey the law. Therefore, if you want to change it, change the law, do not tell us that the courts are being badly run." That is a reasonable interpretation of the judge's remarks, just as reasonable as the one I have stated previously.
Again I repeat the argument. It is argued that the judge could have used different language. It is equally applicable to both interpretations, for just as it was possible to say it in the other interpretation, in this interpretation it is also possible to say that if the judge had wanted to cite the hon. member for contempt of court, he knew how to do it; if he had wanted to threaten him with a citation for contempt, he knew how to do that too and therefore by avoiding that language he gives
June 8, 1978

weight to the interpretation that he was not trying to threaten or intimidate the hon. member.
Elowever, I am also concerned about a few other consequences of finding privilege here. While I say that they do not render it impossible to find privilege, 1 do say they render it very risky to find privilege. I stress that depending on what interpretation we follow-because we are dealing here with the interpretation of language and not with agreed circumstances of fact-it is possible to go either way. But 1 do bear in mind that the threat, if it is here, is an implied threat, not a stated threat, and the first risk would be, therefore, to extend the precedents from those cases in which a threat by language was clearly stated into that area where it was not clearly stated but implied. I think that would be dangerous. I do not say it is not possible but I think it would be dangerous, unless absolutely necessary in protection of our freedoms.
Second, in this case and in other cases we have vigorously defended the right of the hon. member for Peace River, and of all other hon. members, to speak freely in this House, to be free to speak critically of our institutions, and we will always defend that right. 1 want to stress here, in case 1 leave it in any doubt, and I want to reaffirm here, as 1 know all hon. members do regardless of their position on this argument, the right of the hon. member for Peace River to speak freely in the House at all times and to be free to speak critically of these kinds of proceedings.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The risk that might be encountered on the other side of the argument is that if we are to defend so vigorously the right of any hon. member to stand in the House and criticize any proceedings where we see the danger of injustice, or the appearance of injustice even, then 1 would not want, unless absolutely necessary to defend those rights, to circumscribe or restrict the freedom of the judge in these circumstances to defend his court against that criticism.
For us to defend to the death our right to speak freely here, and yet be terribly tender about the freedom of those who speak back to us, would be unseemly and unfortunate for the House of Commons, and again 1 say it is risky. But it could be necessary to defend our freedom of speech and, if it were, 1 think we could move to it. However, I want to recognize the risk.
Finally, I think parliament must always be on guard to defend our own privileges and our right to criticize the courts or any other institution. However, there is a danger here of the appearance of putting the courts of the land under parliament's scrutiny. That can be done if it is necessary to protect our freedoms, and we will do it if it is necessary to protect our freedom, but I say that in this particular circumstance, unless it is absolutely necessary to do so, I think it would be risky for the House of Commons to move in that direction.
Therefore, while I think that the judge, in the circumstances, might have either misunderstood or misinterpreted the actions of the hon. member for Peace River, also in the circumstances I think the House should not use its power
Privilege-Mr. Dinsdale
under privilege in this case where the judge's remarks are open to more than one interpretation and, in any case, contain an implied threat as opposed to a specific one.
1 do want to stress again that this kind of intervention by a judge in public was an extraordinary intervention, and I do not think the judge would have to do much more than he did to offend the privileges of the House. I think it is a very dangerous situation, and I hope it will be noted. Again I say I want to reaffirm the right of any hon. member to criticize whatever injustice he may see, and 1 am sure we will always follow that course.
Finally, I want to return to an observation which I made at the beginning. The hon. member has moved the motion that this matter be referred to the Standing Committee on Rights and Immunities. That committee is continuing its study and has endeavoured to hold a meeting recently on this and other matters. Its original mandate is to examine, at the initiative of the hon. member for Peace River, the whole question of rights and immunities of members, and to report to the House. Subsequently, the House agreed to an additional reference, although not in specific terms, on the subject matter of the Official Secrets Act raised, in its relation with rights and immunities, by the hon. member for Yukon (Mr. Nielsen). It seems to me that the combination of those references would not only permit that committee, but in fact direct it, to examine the Treu trial, and the Official Secrets Act, and its application thereto, and indeed to examine the whole sequence of events on which so many members have contributed their arguments. I am quite certain that this committee, in carrying on its work, with the assistance of the hon. member for Peace River, will do a very detailed analysis of these events and, I hope, will present a meaningful report to the House in due course.


MR. DINSDALE-DELAY IN TABLING POST OFFICE ANNUAL REPORT
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I have given you notice of my intention to raise a question of privilege with respect to the delayed tabling of the report of the Canada Post Office for the fiscal year ended March 31, 1977. I have decided to raise it as a question of privilege because it seems to be part of a pattern that has developed with respect to the actions of the Postmaster General (Mr. Lamontagne).
You will recall, sir, that a short time ago we were discussing in the House the question of the illegal raising of postal rates by circumventing the requirements of the Post Office Act and proceeding by means of order in council under the Financial Administrative Act, this in spite of the fact that section 10 of the Post Office Act quite clearly directs that there will be no rate increases other than by amendments to the Post Office Act, and furthermore, the endorsation of the Standing Committee on Regulations and Other Statutory Instruments which unanimously condemned the actions of the Postmaster General.

June 8, 1978
Privilege-Mr. Dinsdale
With respect to the present complaint, that is, of ignoring the requirements of Section 80(1) and (2) of the Post Office Act in the tabling of the annual report, to put the matter into perspective perhaps I should read to the House parts of the section that are relevant.
Section 80(1) reads as follows:
The Postmaster General shall submit annually to the Governor General a report of the Canada Post Office for the preceding fiscal year, containing a statement of the gross revenue collected, the amounts paid by the Postmaster General from revenue, the amounts paid into the Consolidated Revenue Fund, the amounts paid from moneys voted by parliament. . .
Section 80(2) reads as follows:
The report referred to in subsection (1), if completed when parliament is in session, shall be laid before parliament forthwith, and if not so completed, within ten days after the commencement of the next ensuing session of parliament...
On May 12 1 raised this question in the House of Commons. As the Postmaster General was not present in the chamber, 1 directed my question to the Deputy Prime Minister and President of the Privy Council (Mr. MacEachen), and he indicated that he would look into the matter.
On May 17 the report was tabled in mimeographed form, but it was not circulated among members as is the well-established practice in respect of annual reports provided under statutory provisions.
1 raised this question because we were hoping to have the estimates of the Post Office Department referred to the Standing Committee on Transport and Communications. These estimates were required for the purpose of background preparation in respect of those hearings.
The delaying of the tabling to May 17 obviously was in contravention of the requirements of the Post Office Act. 1 attempted to get a copy of the report. Finally the estimates were referred to the Standing Committee on Transport and Communications yesterday, at which point I was still endeavouring to obtain a copy. Finally I received a copy in the French language which did not assist in preparing for a thorough examination by the committee.
There seems to be a pattern in this regard, which is the reason 1 raise this issue. There is an attempt on the part of the Postmaster General to avoid a thorough discussion of postal affairs in the House. If there is one department which needs a thorough examination, surely it is the Post Office Department.
Yesterday the Postmaster General and 1 arrived together in the committee for the consideration of the estimates. We were there at the starting hour. He made his statement, and as is the tried and true practice from time immemorial, 1 anticipated, as the official spokesman on postal affairs for the opposition, that I would have the right of responding to the leadoff statement of the Postmaster General. The chairman of the committee decided against accepting that practice, and a procedural discussion ensued.
I realize this is not prescribed in the procedures and regulations, but in the 27 years 1 have been here, the courtesy, practice, and unwritten tradition of this House have been to

permit the official spokesman of the opposition to reply to the statement of a minister. A pattern seems to be developing to deny members of the House an opportunity for thorough discussion regarding the introduction of amendments to the Post Office Act, and that pattern also is carrying over into consideration at committee stage. Those of us who have had considerable experience in the examination of estimates in the committee of the whole remember that we had the privilege of examining at length the spending plans of various government departments. Also we know how restricted we are under the present procedures of allocation of time and closure which have been placed upon parliament in the past ten years.


Mr. Alexander:: Plus a Liberal majority.


Walter Gilbert Dinsdale: Yes. During that time expenditures have grown astronomically. The Post Office Department is no exception, as indicated by the current deficit of over half a billion.
I should like to mention one other item. Your Honour will recall that a few weeks ago a decision was reached by the Postmaster General and the government to establish an internal committee to examine the advisability of transforming the Post Office Department into a Crown corporation. This internal committee is to be made up representatives from the Post Office Department, Treasury Board, and the Department of Labour. An announcement of that importance should have provided an opportunity for response from the opposition. To avoid such a response, the announcement was made outside the House of Commons in a special press conference.
All of these circumstances build up to what 1 think is a justifiable question of privilege. If Your Honour rules that a specific question of privilege has been established in the remarks I have made this afternoon, I intend to move a motion which will ask that both the issue of the postal rate increase and the issue of the delayed tabling of the Post Office Department report be referred to the Standing Committee on Privileges and Elections.


Some hon. Members:: Hear, hear!


Mr. Pinard :: Mr. Speaker, in view of the fact that the Postmaster General, for an excellent reason, cannot be in the House to reply. I would respectfully ask you to reserve his right and defer the debate on that question of privilege until his return to the House tomorrow or early next week.


Mr. Speaker:: Order, please. Certainly that would be the normal course. I am sure the Postmaster General (Mr. Lamontagne) would want to respond. Perhaps we are into an argument concerning a breach of the law. 1 am not so sure whether that results in a breach of our privileges. In any case, 1 should like to examine carefully the arguments of the hon. member, because he extended the matter beyond a mere breach of the law and into a pattern of conduct at which I want to look, in any event, I should like to hear the interven-
June 8, 1978

tion of the Postmaster General on the subject before deciding. As we usually do, I think it would be appropriate to wait for that.


MR. ANDRE-RESEARCH AND DEVELOPMENT-MINISTER'S STATEMENT
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, I will not take too much of the time of the House. My question of privilege arises out of a statement made by the Minister of State for Science and Technology (Mr. Buchanan) on June 1. The reason for the delay is that I was not aware of the difficulty until Monday of this week. It took until this morning to find the date necessary to be sure of the position. Basically it relates to the provision of misleading information to the House.
The statement by the Minister of State for Science and Technology was the presentation of a new science initiatives policy by the government, with appropriate fancy coloured brochures, background documentation, speech, press releases and so on. The minister made a statement in the House and tabled two supporting documents. One was entitled "Research and Development in Canada-Discussion Paper", and the other was entitled "Measures to Strengthen and Encourage Research and Development in Canada".
The first and the main point of the minister's statement was a declaration that the Canadian government was establishing a target of 1.5 per cent of gross domestic product for research and development expenditures by 1983. That is an important distinction. The figure 1.5 per cent does not have meaning in itself. It must be compared with other figures, or the historical performance of other countries, and so on. To give that target meaning the minister included in the document he tabled, a table indicating the historical performance in Canada in respect of research and development expenditures as a percentage of gross national product, from 1963 to 1977.
To give meaning to this target the table is presented as a percentage of gross national product, yet the target itself is a percentage of gross domestic product. The figure in relation to domestic product is a figure historically smaller than in respect of gross national product. Therefore the minister has somehow engaged in flim-flam by saying this is our target, measured in so many oranges, and in comparison we produced so many apples in the past.
That is not my main point, Mr. Speaker. The sources of these data are referenced as the Bank of Canada Review and Statistics Canada Catalogue 13-003. It took me some time to find Statistics Canada catalogue 13-003. I finally traced it down and looked up the data, only to find that it is quite different from the data in this table. The effect of this difference is to make this target, about which the minister talked- the prime new initiative-look like a much greater change than in fact is the reality. If you use the data referenced by the minister, you will see it is gross domestic product, from the Bank of Canada. We are talking about data from the Bank of
Privilege-Mr. Andre
Canada and Statistics Canada, and 1 think that is beyond question in terms of its validity. In any event, you find that in effect this new target, instead of representing an increase from .9 per cent to 1.5 per cent, in the form of new ventures, is in fact a return to the 1971 levels of effort. That is a significant year in that it was the year the Ministry of Science and Technology was established, mainly because Canada's efforts were so puny in this field. It would appear to be, prima facie, that this was a deliberate attempt to make this policy initiative appear much greater and much more grand, if you like, than in fact is the reality.
It has been a long established practice in this House that the words of a minister are to be taken as fact. I think there is no difference whether the words of the minister are oral or in the written form; we accept them as factual. It is demonstrable that the data presented by the minister are not fact and are not accurate. Using his own references it can be shown that the information is wrong and creates quite a different impression, and distorts the information before the House.
If we are in a position as members of having to permit or allow ministers to present misleading and inaccurate data, then I think our opportunities to participate and contribute in a meaningful way are infringed upon. I would maintain that this represnts a question of privilege, and that-


Mr. Speaker:: Order, please. I have tried to allow the hon. member as much latitude as I thought he would need to develop his argument fully, and to make sure that I understood it completely.
I will examine the hon. member's representations. I will reserve judgment at the present time, but my very clear impression is that he has a disagreement in respect of the interpretation of statistics presented by the Minister. Presumably the minister will argue that he puts an entirely different interpretation on the figures. I am sure there have been many occasions, and the hon. member will recognize this, when there have been accusations of total disagreement in respect of the accuracy of figures and statistics. If every time that argument were made, by an hon. member on one or the other side of the House, it resolved itself into a question of privilege, the extension of privilege would be far greater than most of us believe it to be in terms of the classic definition. However, I will examine the hon. member's argument to see whether there is the appearance of a question of privilege and, if so, I will rule on it as soon as I possibly can.


Harvie Andre: Mr. Speaker, I do not want to prolong the argument, but your reaction to my remarks causes me to consider that possibly I did not express my concerns accurately.
This does not involve a matter of disagreement over numbers. We agree that Statistics Canada and the Bank of Canada are the authoritative sources of this data. The minister claimed that this was what he was presenting but, in fact, did not do so. If that is not a misleading of the House then, my goodness, I cannot think of anything that could possibly be misleading. He has claimed those two statistics as the authority for his sugges-

June 8, 1978
Point of Order-Mr. D. W. Munro
tions, and the statistics produced by those two organizations are beyond question in terms of their validity.


Mr. Speaker:: Order, please. 1 assured the hon. member I would look at his arguments. I will hear what the minister's intervention is when he is in the House, and then decide what is the resolution of this problem.


POINT OF ORDER
[Stage Direction]
MR. MUNRO (ESQUtMALT-SAANICH)-REFERENCE TO STANDING COMMITTEE ON FISHERIES AND FORESTRY
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I rise on a point of order, and I am sorry the government House leader is not present.
On June 5, Monday of this week, a special reference was given to the Standing Committee on Fisheries and Forestry in order to prolong its hearings, specifically for Tuesday and Thursday of this week. I do not think 1 need to go into the background of that fully. The reasoning for it is fairly clear to those who participated in the meetings.
There was a halt in meetings late last month because of the delicacy of negotiations then in course. Rather than having an in-camera session, or an open meeting when questions that might interfere with those negotiations could be asked, it was decided by the steering committee that we should not meet. It was agreed then that one extra meeting would be held in respect of fisheries. The meeting at which that decision was taken was on May 30.
On June 2 there was a very dramatic development, as you will recall, when United States fishermen were excluded from Canadian fishing zones, except in that area in dispute.
Following upon that, it seemed evident that the committee ought to meet to examine this situation more fully and obtain answers from ministers in respect of policy questions. Two meetings were organized, and it was expected that the Minister of Fisheries and the Environment (Mr. LeBlanc) would be present. For very good reasons the minister could not be there. He is in New Brunswick attending the funeral of a former member of the other place. That is understandable.
What 1 am suggesting is that we are trying to get from the House leader a further reference. In view of the fact that June 19 is the date when new negotiations are to resume, I would like to see this as an open reference to last for as long as this House is sitting this session, in order that the committee might meet and examine the situation as it develops even while the negotiations continue. We could then ask questions, not to embarrass anybody, but in order that we understand as well as possible what is going on, and for the edification of not just members in this House but of the Canadian public as well.
I would hope, therefore, that it would be possible to convince the government House leader to make a further reference to the Committee on Fisheries and Forestry in order that it might

meet on a number of occasions between now and the termination of this session.


Yvon Pinard: Mr. Speaker, a motion has already been tabled by the Deputy Prime Minister (Mr. MacEachen) under which the committees can sit and consider the estimates after May 31 until the third day preceding the last allotted day which has not yet been determined but which will probably be before June 30. As for the request of the hon. member who would like to discuss a matter other than the estimates and to sit as long as possible in June, we will consider its merits.



ROUTINE PROCEEDINGS


[Stage Direction]
Fourth report of Standing Committee on Finance, Trade and Economic Affairs-Mr. Kaplan.

Lincoln MacCauley Alexander: Mr. Speaker, I have a point of order which relates to the Minister of Labour (Mr. Munro). 1 did give him notice, but he is not here. However, 1 think it is important that we clear this matter up. In a brochure congratulating the winner of the winner of the Miss Polonia contest of Grimbsy, Ontario, in and around the third week of May, there is a message allegedly coming from the minister's department. You will notice I did not say the minister himself because I know that the minister would not do a thing like this, but I think it is necessary for him to know, and he does know, what perhaps his staff have done inadvertently. The message says:
Congratulations to Miss Polonia from John Munro, P.C., M.P. Minister of Labour and-
Here is the offensive clause, sir:
-minister responsible for multiculturalism.
We all know that the minister has one particular job, and not two. Therefore, having brought that to the minister's attention prior to my standing today, and again at this moment, I hope he will admonish his staff in order to see that this sort of inadvertence is not carried on any further.
June 8, 1978


PRIVILEGE
Mr. W. C. Scott (Victoria-Haliburton):: I rise on a question of privilege, Mr. Speaker. My question of privilege deals with the matter of not being able to get a question on in over three weeks. I rise on this motion with the deepest regret to you, sir, and with the greatest hesitancy, but for three weeks 1 have repeatedly tried to get a question on, and I have not been recognized. The question is not parochial, it is several questions of broad significance.
1 raise this matter not only on a question of privilege in respect to the proceedings, but 1 ask for guidance as to the proper procedure in getting a question on. In my 13 years in the House of Commons 1 have tried to show the greatest respect for this institution. 1 believe that probably my people are desirous-not only my people, but as I said this is of broad scope-of having me ask this question in their interests. Again,
I say, sir, I not only raise this question of privilege, but 1 ask also for guidance from the Chair.


WAYS AND MEANS
Joseph Jacques Jean Chrétien: Mr. Speaker, in accordance with your ruling of May 19, 1 am tabling a notice of the ways and means motion, and I ask you to designate the necessary order of the day for its consideration.


Sinclair McKnight Stevens: Mr. Speaker, in relation to the Minister of Finance (Mr. Chretien) and the tabling of the documents, I was wondering if he could clarify if the notice of the ways and means motion that he just tabled is exactly the same as the original motion, with the exception of paragraph 13, which I note has had some change to it.


Joseph Jacques Jean Chrétien: 1 will refer to my information as I have not checked every phrase, but, yes.


ADMINISTRATION OF JUSTICE
Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, pursuant to Standing Order 41(2), and the undertaking of the Minister of Justice (Mr. Basford) to this House given on May 15, and comments earlier this day, to table as much as he could relating to the trial of Mr. Peter Treu, I am now tabling on his behalf the following: first, all documents relating to Mr. Treu's bail dated March 16, 1976, and as modified March 31, 1976; second, all documents relating to Mr. Treu's bail proceeding in the Court of Appeal of Quebec dated May 4, 1978; third, an official transcript of the
Report of Commodity Tax Revenue Group remarks of Judge Trudel on sentencing Mr. Treu, dated May 16, 1978.
I would add, Mr. Speaker, that I am tabling the remarks at sentence in French only as we have no authority to produce an official translation of such court documents.


NORTHWEST TERRITORIES ACT
Mr. Wally Firth (Northwest Territories) moved: for leave to introduce Bill C-460, to amend the Northwest Territories Act (legislative assembly).


Some hon. Members:: Explain.


Walter (Wally) Firth: Mr. Speaker, the purpose of this bill is to change the name of the Council of the Northwest Territories to that of the Legislative Assembly of the Northwest Territories.


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

Joseph Jacques Jean Chrétien: Mr. Speaker, 1 would like to make a motion to the effect that the report of the Commodity Tax Review Group be referred to the Standing Committee on Finance, Trade and Economic Affairs.


Mr. Speaker:: I am not aware of the notice of motion and, therefore, the minister will need the consent of the House to introduce this motion at this time that the report of the Commodity Tax Review Group be referred to the Standing Committee on Finance, Trade and Economic Affairs.


Walter David Baker: We are prepared to consent, sir.


Mr. Speaker:: Does the minister have consent for the introduction of the motion?


Some hon. Members:: Agreed.


Mr. Speaker:: It is moved by Mr. Chretien, seconded by Mr. Horner:
That the report of the Commodity Tax Review Group be referred to the Standing Committee on Finance, Trade and Economic Affairs.


[Stage Direction]
Motion agreed to.
[Stage Direction]
June 8, 1978
Order Paper Questions
[ Translation]

[Stage Direction]
2.	Not available in annual totals: the figures displayed below represent the amounts outstanding at the dates specified:
(Questions answered orally are indicated by an asterisk.)
Yvon Pinard: Mr. Speaker, the following questions will be answered today: 709, 1,251, 1,436, 1,476, 1,477 (corrected), 1,503 and 1,588.


Mr. Howie: 1.	Since January 1, 1977, were investigations conducted to determine whether or not radio signals from the U.S.S.R. have any effect on weather systems and, if so, were conclusions arrived at?
2.	Did such signals interfere with radio signals by the Canadian Armed Forces or Marine Services?


Yvon Pinard: I am informed by the Departments of Fisheries and the Environment, National Defence and Transport as follows: No. See reply to question No. 1,251 answered this day.


Mr. Robinson: Is the government prepared to examine the claim of Dr. Andrew Michtowski that a Russian radio team is affecting Canadian weather patterns?


Mr. Mike Landers (Parliamentary Secretary to Minister of State (Environment)):: An examination of this claim by the atmospheric environment service revealed that there were no scientifically credible factual observations to substantiate such a claim. If such observations do exist, and are made available to the atmospheric environment service, a reappraisal will of course be undertaken.
Supplementary
Public Service	Retirements
Superannuation Act Benefits Act

1970-1974 November, 1975 March, 1976 March, 1977 December, 1977
Not available
73,360.68	4,112.51
65,276.67	3,153.73
49,002.84	2,592.50
1,404,068.74	207,332.28
Combined

75,473.19
68,430.40
51,595.34
1,611,401.02
3.	Not available as requested. The department calculates the total number of pension overpayments recovered. However, this total is not broken down to show different totals for different types of situations related to overpayments like the one which originated this question.
4.	Thirteen per cent of all overpayments are liquidated by cash remittance.
5.	Eighty seven per cent of all overpayments are being liquidated by monthly deductions from public service pensions.


Mr. Mitges: 1.	(a) Who was in charge of the Canadian delegation to the Belgrade meeting of the Conference on Security and Co-operation in Europe held between October 7, 1977 and March 9, 1978 and what are his/her credentials (b) how many persons were part of the Canadian delegation on a (i) permanent (ii) part-time basis (c) how many persons from the Canadian delegation were recruited from (i) the Department of External Affairs (ii) other government departments or agencies?
2.	What was the total cost to the government of maintaining the delegation in Belgrade for the duration of the conference?
3.	On what occasions did ministers attend the conference and, in each case, who was the minister and what travelling and other expenses did he/she incur?
4.	What directives, if any, were issued to the Canadian delegation by the Department of External Affairs in relation to the official visitations to the Belgrade conference by members of parliament and senators?


Mr. Forrestall: 1.	For each year since 1970, how many overpayment cases have been due to the failure to reduce a pensioner's benefits received under the Public Service Superannuation Act and/or the Supplementary Retirement Benefits Act, when a pensioner became entitled to disability benefits from the Canada/Quebec Pension Plan?
2.	What was the total amount of overpayments for each year since 1970?
3.	How much of the overpayments have been recovered to date?
4.	How many pensioners have been able and willing to liquidate their total overpayment by means of a single cheque or money order?
5.	How many pensioners have or are liquidating their overpayment by monthly deductions from their annuity cheques?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: 1.	Not available in annual totals: the figures displayed below represent the cases at the dates specified: 1970-1974, not available; November, 1975, 626; March, 1976, 760; March, 1977, 1,110; December, 1977, 2,693.


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: 1. (a) The head of the Canadian delegation to the Belgrade meeting of the CSCE was Mr. W. T. Delworth, Canadian ambassador to Hungary. Mr. Delworth has been actively associated with CSCE questions since September, 1974 when he was appointed head of the Canadian delegation at the Geneva phase of the CSCE that drafted the final act which was eventually signed in Helsinki on August 1, 1975. (b) (i) Six officials assisted by six administrative support personnel; (ii) Twenty-one. (c) (i) Twelve-The Department of External Affairs. Two-Office of the Minister of State for Multiculturalism. One-The Department of National Defence. Eighteen parliamentary observers from the Senate and the House of Commons.
2.	The total cost of maintaining the delegation in Belgrade, including those participating on a part-time basis, is not available yet because all invoices have not been received but it is estimated at $260,000.
JuneB, 1978

3.	The Hon. Norman Cafik, Minister of State for Multicul-turalism was the only Canadian minister to go to Belgrade. His travel and other expenses associated with his attendance and paid out of the budget of the Department of External Affairs amounted to $1,539.
4.	Notifications of the attendance of senators and members of parliament were sent to the Canadian delegation as the names of those participating were made known to the Department of External Affairs. The delegation's instructions indicated that parliamentarians were to attend the meeting as "observers on the Canadian delegation".


[Stage Direction]
Question No. 1,477-Mr. McKenzie: (Corrected)
1.	Is Mr. Ian Howard working in the office of the Minister of State (Fitness and Amateur Sport) and, if so (a) since what date (b) what is the title of his position (c) what is his classification in the Public Service (d) what was his salary range on joining the Minister and what range is he in now?
2.	Has Mr. Howard worked "overtime" since he joined the Minister and, if so, has he been remunerated, at what rate and what total amount as of March 1, 1978?
3.	What travel expenses of Mr. Howard's have been paid by the government up to March 1, 1978, exclusive of any travel he may have done in the company of the Minister?
Hon. Iona Campagnolo (Minister of State (Fitness and Amateur Sport)):: 1. Yes. (a) September 19, 1977. (b) Executive assistant, (c) On leave of absence from a position at the level of program manager 5. (d) (i) Salary range in previous position $22,695 to $25,473; (ii) Salary in present position not to exceed $29,450.
2.	Yes, with no remuneration.
3.	$2,568.22 since September 19, 1977. However, during the period of the assignment, Mr. Howard has received, in addition to this sum, $2,480 to cover accommodation and $1,402 in per diem allowances to compensate him for expenses incurred due to his absence from his home in Vancouver.


Mr. Patterson: What amount was spent by the Department of Indian Affairs and Northern Development in the Constituency of Fraser Valley East in each year since 1970?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: 1977-78,	$3,054,990;	1976-77,
$3,045,226; 1975-76, $2,190,270. Expenditures for previous years are not easily identifiable as departmental records are not maintained by constituency. The time required to provide this information would be considerable.


Mr. Lambert (Bellechasse): For the fiscal year (a) 1968-69 (b) 1977-78, what was the total amount paid by the government in family allowances?
Point of Order-Mr. Jones


Monique Bégin: Family allowances paid in; (a) 1968-69 totalled $56,186,052; and (b) 1977-78 totalled $2,122,524,000 (subject to final adjustment). Please note the 1968-69 figures do not include expenditures under the Youth Allowances or Family Assistance Programs, both of which were incorporated into family allowances in the 1974 amendments. The amounts paid in 1968-69 under both programs were: Youth Allowances, $52,457,272. Family Assistance, $3,467,605.


Yvon Pinard: Mr. Speaker, if question No. 1,215 could be made an order for return, that return would be tabled immediately.


Mr. Speaker:: The question enumerated by the parliamentary secretary has been answered. Does the House agree that question No. 1,215 be made an order for return?


Some hon. Members:: Agreed.


Mr. Alexander: For each department, what was the total expenditure for photocopying during the last year for which figures are available and, in each case, how much was for (a) purchasing equipment (b) rental of equipment (c) photocopying supplies?
Return tabled.


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


Some hon. Members:: Agreed.



POINT OF ORDER


Mr. Leonard C. Jones (Moncton):: Mr. Speaker, on several occasions I have brought to the attention of this House and to the Parliamentary Secretary to the President of Privy Council (Mr. Pinard) that question No. 145, which was listed in this House on October 19, 1977, and had previously been on the order paper in July, 1977, has not as yet been answered. Some months ago 1 was told I would get an answer within a few

June 8, 1978
Income Tax Act
days. Those few days have grown into five months, and it is getting pregnant with difficulties.


Yvon Pinard: Mr. Speaker, we have already provided answers for six of the 13 questions indicated by an asterisk. We are currently looking into the remaining seven and we shall try to provide answers for them as soon as possible.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
On the order:
June 7, 1978-House in Committee of the Whole on Bill C-56, an act to amend the statute law relating to income tax and to authorize payments related to provincial sales tax reductions.
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I wish at this moment, since it is the first opportunity following the vote of last night, to raise a point of order with regard to the holding of the vote. It is my contention, sir, that Standing Order 60, subparagraph (1), as indicated in your ruling on May 19-to which I have referred on two previous occasions, in 1974 and 1975-requires that a bill shall be brought in in conformity with the ways and means motion. Briefly put, you found on May 19 that the bill did not conform with paragraph (13) of the ways and means motion, and you indicated at that time that the government would have to bring in a ways and means motion to correct the situation.
I want to have the citation of May gone into in detail to see whether it is now correct. I raise the point at this time because I may wish to take this matter up a little later-as this is the first opportunity to do so after the vote.
It is my view, Mr. Speaker, that it is not possible for this House to vote on the principle of a bill which, by prior ruling, has been found not to conform with the requirements of our rules, and that it is distinguishable from the precedents upon which you apparently based yourself.
First of all, in 1974, when I first raised the point, the matter was found not to be of essence to the bill-it was a matter of degree-and therefore it did not matter. However, in July, 1975, you did find that that was of the essence.

Subject to correction-and 1 am having this checked-I would point out that this particular case with which we are now dealing may have been distinguishable from the case upon which your judgment the other day was based.


Mr. Speaker:: Order, please. I will permit the hon. member to go on, but it seems to me he is faced with two basic difficulties that he will have to address. The first basic difficulty is that I, of course, do not agree with his contention that the ruling might have been in error. But even if it were, nothing can be done to change it now. The second difficulty is that- even if the ruling was in error and something could be done to change it, and the vote was not to have been taken-the vote has already been taken. Therefore, before I can hear the hon. member he will have to indicate to me in the first place how he gets around those two basic points.


Marcel Joseph Aimé Lambert: Very simply, Mr. Speaker. The vote last night was under guillotine by Standing Order 75C.


Joseph Jacques Jean Chrétien: It is a rule.


Marcel Joseph Aimé Lambert: That is right; it was a time allocation. 1 had to wait until the vote was taken in order to demonstrate the difference. My submission is that we are moving down the wrong path.
I will agree that if after second reading there is to be an amendment to the ways and means motion, and the point has been raised as a point of order during the committee hearings, the government may then bring in a ways and means motion to conform to a ruling of the Chair. But this point was raised prior to second reading, and Your Honour ruled that the bill was not in conformity. It seems to me very, very difficult in logic to understand how we can be asked to vote on a bill which the Chair has found not to conform with our requirements.
If by chance it might be said that these provisions are the subject matter of the ways and means motion filed just a few moments ago, that is another reason I am raising this at this point. The government was waiting to see whether it was going to rely upon the amendment it has put in or upon another one, and whether it might have to scrap the second one. These provisions in clause 30 relating to the pay-out of income tax to selected Quebec income tax payers go against the principle of the bill. Someone will ask if it is the principle of the bill. The bill is going to amend the Income Tax Act.
I refer the Chair back to its own ruling at the time we amended the Criminal Code with regard to capital punishment. On that occasion we were amending the Criminal Code in a number of material aspects. When one of my colleagues went to amend the clauses on capital punishment at committee stage, however, the proposed amendments were ruled out of order in that they were against the principle of the bill.
I wonder what the position would have been if the ways and means motion which was tabled just a few moments ago had been in variation of the bill that was voted upon at second
June 8, 1978

reading last night? It may be that Your Honour will find me out of court at this time, but I am rising in protest at what I think is unfortunately an error in judgment and-


Yvon Pinard: You are making one now.


Mr. Speaker:: Order, please. The hon. member is identifying that he is directly appealing, as it were, or re-arguing a ruling that the Chair has made. He has made that quite clear. He made it in the argument when I made the ruling to start with, and I disagreed with the position he took at that time. I made it clear that the solution to the problem was optional in the Chair. There had been occasions in the past, according to precedent, in which the Chair had ordered that the matter be corrected by an amended ways and means resolution up to the time that the clause was taken into consideration. That is one of several ways to solve the problem.
In even the short time that I have been in the Chair, in similar circumstances with other bills, other ways and means resolutions, and other differences, I have ordered that the progress of the bill be stopped. In some cases the matter was amended by way of an amendment to the bill to conform with the existing ways and means resolution.
There are several solutions. On the basis of a clear precedent I chose one; whether I would choose another one in different circumstances remains to be seen. In this particular case I chose an option for the correction of the irregularity on the basis of a precedent that I cited at the time. Whether the hon. member agrees with that or calls it an error in judgment, which he just did, is of no consequence at the moment. The ruling has been made and the House is stuck with it. 1 happen to think it is a correct ruling and the hon. member does not, but that is academic. The House is stuck with the ruling and has proceeded on the basis of it until now. Whatever consequences might have taken place are hypothetical.
In any case, if the second reading vote was in any way out of order, as may have taken place with countless motions in the past, they may have been out of order, but once they are passed and the vote taken, there is nothing the House can do about it. The House has voted and has on its records that it now proceeds according to that vote to consideration by committee of the whole of this bill. There is no power in the Chair at this stage to turn that around on the basis of rethinking a decision it has taken previously.
With respect, the hon. member has not got around the two basic points that I gave him, the first being that he cannot change a ruling even if he disagrees with it, and the second, that we cannot do anything to reverse the result of the vote because the vote has already been taken. I do not know how we can go any further on it.


Marcel Joseph Aimé Lambert: I am reserving the opportunity, on third reading debate, of referring to this matter again. I am doing it now at the first opportunity following the vote because it is still my contention that we are on the wrong path with this particular bill. We operated differently under different circumstances, and the two instances do not jive.
Income Tax Act
While I accept Mr. Speaker's ruling, no one says that I must agree with it. I do not think Mr. Speaker says that I have to agree with it.


Mr. Speaker:: Order, please. I do not expect the hon. member to agree with it, but I just ask him to respect it.
Pursuant to Standing Order 54 I do now leave the chair for the House to go into committee of the whole.

The House in committee of the whole on Bill C-56, to amend the statute law relating to income tax and to authorize payments related to provincial sales tax reductions-Mr. Chretien-Mr. Laniel in the Chair.


The Chairman:: The committee is now on clause 1. Shall clause 1 carry?

On clause 1.


Sinclair McKnight Stevens: Mr. Chairman, as we know, there are 59 clauses in Bill C-56 to which the committee will undoubtedly want to give some attention. 1 think the two clauses of most interest, however, are clauses 30 and 59. I think it would facilitate the deliberations of this committee if, in the few moments I have available at this time, I could put some questions to the minister with respect to the current position of relations between the federal government and the government of Quebec on the income tax-sales tax rebate scheme. This has been of great concern to this House for almost two months now. With that in mind, Mr. Chairman, the Minister of Finance-


Gérald Laniel: Order, please. I might try to satisfy the hon. member by saying to him that it has been the general practice, when considering clause 1 of the bill in committee of the whole, to allow members to express opinions or ask questions of a general nature. Of course the hon. member wants to direct his attention to one particular clause. I understand it is a fundamental clause as to the general policy and I think I will be ready to accept his intervention in that way.


Sinclair McKnight Stevens: Mr. Chairman, as I was saying, the Minister of Finance very kindly gave us a copy of a letter which he has received from the minister of finance of the province of Quebec. As the letter is quite relevant to the consideration of Bill C-56 by this committee, I wonder if the minister would be willing to table that letter so that the entire committee of the House may have the letter for their consideration?


Joseph Jacques Jean Chrétien: Mr. Chairman, I was pleased to hand out copies to some opposition members a while ago, so that they may examine them, and I am also pleased to table the French version only which I have just received. I do not have the English version. I did not have time to have it translated. With leave of the House, I should like to table the letter of the

June 8, 1978
Income Tax Act
Quebec Minister of Finance, Mr. Parizeau, dated June 7, 1978.


Gérald Laniel: Order, please. To table the document, the House should not be in committee of the whole and the Speaker should be in the Chair. So the hon. minister might perhaps do so on another occasion. In any case, in the meantime he can still circulate the letter among hon. members, unless he proposes to have it appended to today's Hansard with the unanimous consent.


Some hon. Members:: Agreed.


Joseph Jacques Jean Chrétien: Mr. Speaker, 1 have a few more copies, so I can give them to a few hon. members, but I have not enough copies for everybody.


Stanley Howard Knowles: Mr. Chairman, I was about to suggest what you suggested to the minister namely, that he ask consent for this letter to be debated and appended to today's Hansard. That way we will have it in both languages, and everybody will have it.


Gérald Laniel: Hon. members have heard the proposition that the letter referred to by the minister, written by the minister of finance of the province of Quebec to the federal Minister of Finance, be appended to today's Hansard. Is this agreed?


Some hon. Members:: Agreed.
[Editor's note: For letter above referred to, see Appendix.]


Sinclair McKnight Stevens: Thank you, Mr. Chairman. I thank hon. members for their consideration in allowing this letter to be appended to today's Hansard.
Would the minister indicate if he has prepared or sent a reply to the minister of finance of the province of Quebec in respect of the June 7 letter we have just appended to Hansardl


Joseph Jacques Jean Chrétien: Mr. Speaker, 1 rise on a point of order and I also want to reply to the hon. member. First of all, 1 have just received the letter, barely a few hours ago. 1 am willing to answer the question but 1 do think the question of the hon. member is out of order, in that the letter deals not with clause 1 of the bill but with clause 30. Therefore, we can discuss its contents when we reach that clause.


Yvon Pinard: Mr. Speaker, 1 also rise on a point of order.


Gérald Laniel: The Parliamentary Secretary to the President of the Privy Council, on a point of order.


Yvon Pinard: A while ago, I thought that on a very special question you allowed an hon. member to put a question in order to obtain the letter explaining clause 30. But I want to point out, Mr. Chairman, that in fact you called clause 1

which we are to discuss, and that clause 30 will be considered in due course. We have spent 11 days on second reading and the hon. members can think only of clause 30.


Gérald Laniel: Order. 1 should like to point out to the hon. member that I gave a ruling, that 1 gave it in good faith for the orderly working of the committee, perhaps precisely to speed up progress on the bill. The hon. member indicated to the Chair that he had specific questions to put to the Minister of Finance to clear up certain points and that those questions might possibly speed up study of the bill if they were cleared up. It is not up to me to decide whether replies meet with the satisfaction of the hon. member. 1 allowed him to put his questions, and it is up to him to decide. If the Minister of Finance does not want to answer, that is up to him. As for me, I know that under our rules of procedure, we generally allow a general debate on clause 1 in committee of the whole. We do not restrict ourselves to clause 1 of the bill. It is in that spirit that, in order to speed up somewhat consideration of the bill, I allowed the hon. member for York-Simcoe (Mr. Stevens) to put his question, and my ruling has been made on that matter. The hon. member for York-Simcoe.


Sinclair McKnight Stevens: Mr. Chairman, I was simply trying to identify which letter it is that we will be referring to during the committee of the whole, and secondly, if in fact there had been any formal reply sent by the minister. I can well understand, if the Minister of Finance has only had a few hours to deal with the letter, that he would not yet have sent a reply.
I feel it would be helpful if the minister could give us an outline of what the general reply will be with respect to the proposals put forth by Mr. Parizeau concerning Bill C-56. I would emphasize that the letter we are referring to does not refer to specific clauses of Bill C-56; it refers to the entire bill. I think it is quite in order that we raise various questions pertinent to the current status of negotiations between the province of Quebec and the federal government relating to the provincial sales tax-income tax adjustment provisions.
First of all, did I understand the minister correctly during question period today when he mentioned that the $40 million that Mr. Parizeau refers to in the original paragraph of his letter is in fact an amount that the government is going to pay to Quebec, and will pay without too much delay?


Joseph Jacques Jean Chrétien: Mr. Chairman, we are getting into an improper situation. To accommodate the committee earlier, I answered a few questions, but now we are going into the substantive argument about Clause 30. Mr. Chairman said that I need not reply. I will deal with all of the aspects of clause 30 when we come to clause 30. Presently we are discussing clause 1 which deals with employment at special work sites or remote locations. I am ready to answer all of those questions. I will say to the hon. member for the last time, and I have said it over and over again, that under the scheme I proposed the night of the budget Quebec qualified for about $40 million.
June 8, 1978

In my communication I think he asked for four items and those four items, according to the calculations made by my officials, amount to about $40 million. We say we shall pay that to them. We said that at the time, and he wants us, now, to pay it. But all that is subject, as usual, to verification by my officials of the accuracy of the cost of those items for the six months, because exactly what we are doing is verifying the tax with the other provinces which have cut sales taxes across the board according to our plan. For clarification, it is two thirds of a three point cut on four items for six months, and we are willing to pay about $40 million.


Sinclair McKnight Stevens: I am sure the minister will agree that on clause 1 it is traditional that the specific wording of the clause is not the substance of what is really before the committee. The clause is a conventional starting point for a more rambling question or, for that matter, speeches with respect to the bill.
[ Translation]


Yvon Pinard: Mr. Chairman, what the hon. member suggests is true generally speaking. Clause 1 of a bill usually gives the title of the bill. What we have here in clause 1 is a very specific measure dealing with employment at a special work site or a remote location covering two pages and not the title of the bill. So the hon. member is not being consequent when he says that he can argue in a general way on the bill as a whole because clause 1 is of a general nature when in this case it is of a strictly limited and specific nature. So for that reason he cannot do what can usually be done with other bills.
Mr. Chairman, if the hon. member wants to stick to what is in clause 1 1 think that then we will be in order and we will be able to make progress in a logical and normal way.


Gérald Laniel: Order. I must point out to the hon. parliamentary secretary that he should listen not only to what the hon. member for York-Simcoe (Mr. Stevens) has to say but also what the Chair has to say. The Chair has already said- and that is my ruling-that as a general practice and in this committee of the whole whatever the subject of clause 1 may be, whether it be the title or a particular subject matter, the practice has been to give more latitude to the debate while at the same time trying to prevent hon. members from dealing with specific clauses but allowing them also to discuss the bill in a general way. It is precisely under clause 1 that hon. members take the floor to express their opinion in a general manner on two or three clauses of the bill without addressing specific questions to the minister or to those who can answer questions. So my decision stands. I shall continue to follow the practice which has always prevailed in committee of the whole and if I can lay my hands on some precedents which confirm what I have just said, I intend to leave hon. members a certain leeway as it has always been done regarding the first clause of a bill and not restrict them, as the hon. member seems to want, to dealing with the issue of "employment at special work site
Income Tax Act
or remote location". Of course that does not prevent them from speaking about that clause in particular but then they can also express a general opinion on the bill.


Sinclair McKnight Stevens: Mr. Chairman, 1 think it is most regrettable, closure having been used last night to force a vote on the second reading of this bill, that we in the opposition should be met with 15 minutes of running interference or filibuster, whatever you like to call it-


Some hon. Members:: Oh!


Sinclair McKnight Stevens: -on the part of government supporters when we are simply putting a few questions to the minister to clarify the position of the government with regard to this bill. Our difficulties today have been doubled because, as a result of the failure yesterday to table copies of the ways and means motion, we cannot reach clause 30 today in any event.


An hon. Member:: What about unanimous consent?


Sinclair McKnight Stevens: It is the fault of the government that we cannot reach clause 30. So if we are not able to speak in general terms on clause 1 we are prevented, really, from asking any questions with regard to the most relevant portion of the bill, namely, the provincial sales tax arrangement, until next week. In order to clarify the current position of the government may 1 ask whether it is the intention of the government to continue with the plan to pay $85 or some such amount to the taxpayers of Quebec as outlined by the minister the other night?


Joseph Jacques Jean Chrétien: Mr. Chairman, it does not matter in any case because when we reach clause 30, I will determine exactly the clauses or provisions of this bill. As 1 have said on several occasions, we do intend to clarify once again the policy of the government. Since the government of Quebec is entitled to these $40 million we will let them have it. As for the rest, they have left on the table some $186 million and we have decided not to penalize the people of Quebec, which means that we can immediately reduce by $85 the income tax of Quebeckers. Mr. Parizeau came up yesterday with a change to that decision by saying that if I decide to wait until next spring, and in this respect he still leaves me the choice, it could cause him some difficulties. He is leaving that to me. I have not yet studied whether his second proposal contained something worthwhile. I have just received the letter where he acknowledges, Mr. Chairman, that my proposed $85 rebate to those who have paid income tax in 1977 is quite acceptable to him. This means that the bill such as it stands now is quite agreeable to the government of Quebec. For some two months the opposition has been telling me to accept what is agreeable to the government of Quebec so I do not see why they are asking me questions about it. Of course I will pay back to the Quebec taxpayers what is owed to them, if Mr. Parizeau made a mistake in his budget by including figures which he had no
6196

June 8, 1978
Income Tax Act
right to include, that is his problem and he will have to find a solution to that by himself.
[ English |


Sinclair McKnight Stevens: As I understand the minister, he is saying the proposal to pay the $85 as originally put forward by the government was entirely acceptable to the minister of finance of Quebec. 1 think the hon. gentleman is reading a lot into the wording of the letter. As I read it, Mr. Parizeau feels he cannot stop the federal government from proceeding with Bill C-56, but that if this course is followed he would have no alternative but to tax back in its entirety whatever the aggregate amount might be-$85 times the number of taxpayers in Quebec. Is that the case? Has the minister received any assurance from the Quebec minister of finance that his proposal, now, is acceptable by Quebec, or is it not the case that the Quebec minister is simply indicating that there is no alternative?


Joseph Jacques Jean Chrétien: I have explained the situation as well as I can. 1 cannot add anything to what 1 have said. Clause 30(b) was my proposition, and the letter from Mr. Parizeau said it would be a solution to the problem.


Sinclair McKnight Stevens: 1 emphasize that the $85 proposal is a direct payment by the federal government to the residents of Quebec, and if the federal government intends to go ahead with that proposal, would the Minister of Finance indicate if he is then out of hand turning down the alternative proposal Mr. Parizeau has made with respect to having a 1978 pay-out scheme which, through an administrative arrangement, would be much more comparable to the arrangement the federal government has with the other provinces which, presumably, are willing to participate in the plan?


Joseph Jacques Jean Chrétien: Mr. Chairman, I am not making any payments. I am reducing the amount of tax paid by the Quebec taxpayer in 1977 up to $85, so that the people can qualify for a return on their taxes. It is exactly the same mechanism whether we use 1978 or 1977 tax lists. There is absolutely no difference. The reason there is a difference regarding the other provinces is that the other provinces do not collect their taxes. 1 reduced by $100 the income tax in Ontario, for example, two months ago. The same day, or a day later, Ontario raised its income tax by $100. I collect it, so there is no problem.
Since 1954 under Duplessis Quebec has collected its own taxes. I am reducing, as I am doing in Ontario and elsewhere, the difference of $85, and if Mr. Parizeau needs that amount of money or more, he will have to raise his taxes. There is no problem there. It is a problem for him, but it is not a problem for me. I am reducing the income tax of the Quebec taxpayer by $85, and I am making a cash payment of $40 million for the amount Quebec has contributed to the scheme by selecting four items for six months. 1 am paying two thirds. The cash payment is not just for Quebec.
As I said in the question period, there is provision for cash payments as adjustments in all the provinces. In fact it will be

something like $19 million for B.C. because the $100 was not sufficient for B.C. I have to compensate B.C. more. In the case of Ontario $100 was too much, so Ontario has to pay back a certain amount of money to the federal government. There is a cash adjustment, and the $40 million for Quebec is part of that.


Sinclair McKnight Stevens: Mr. Chairman, I think it is important that we get the two options clearly in mind. The first option to which the minister has referred is the payment to the residents of Quebec of $85. As I read Mr. Parizeau's letter, Mr. Parizeau says he cannot do anything about that. If the federal government wishes to pay that $85, that is its right. Mr. Parizeau wants it clearly understood, however, that he will use whatever means he has at his disposal to tax it back. I want to know the current position of the Minister of Finance with regard to the second option, which is an alternative proposal on the part of Mr. Parizeau. In effect, Mr. Parizeau is asking that Quebec be put in a situation similar to that of the other provinces. He is saying that for the 1978-79 fiscal year the tax of Quebec taxpayers should be reduced by $100, or $85, per person. As an administrative matter Mr. Parizeau wants to have that picked up between Ottawa and Quebec city so that Quebec will be in a position similar to that of the province of Ontario, the province of Manitoba, or any of the other provinces. Is the Minister of Finance as of this afternoon turning that proposal down?


Joseph Jacques Jean Chrétien: Mr. Chairman, I have been very generous with my time. These questions should all relate to clause 30, and I will reply when we are dealing with Clause 30. Your Honour said earlier that I was not obliged to reply. We have been on questions which should be asked on clause 30, for 25 minutes. That is not the purpose of committee work. We should be dealing with this bill clause by clause. 1 have been extremely generous. I replied to questions in the House this afternoon.
It is obvious that hon. members opposite just want to drag the debate out. They do not want to deal with the nitty-gritty of this scheme. Hon. members of this House have the right to know what we have done for farmers with regard to capital gains, what we have done with regard to RRSPs and what we have done for retired people. We are proposing something to make things easier for them. Hon. members opposite do not want to talk about those new provisions. We are now on clause 1 and, according to Your Honour's directive, it is up to me to decide if I want to reply. I want to deal with clause 1 as soon as possible. Hon members opposite can talk ad nauseam, but 1 will not reply.


Sinclair McKnight Stevens: Mr. Chairman, the minister has a very short wick.


Joseph Jacques Jean Chrétien: Mr. Chairman, I rise on a question of privilege. When we reach clause 30, there will be no problem, but prior to getting to clause 30 I want to deal with clauses 1 to 29.


Mr. Hnatyshyn:: Thanks, Your Excellency. You sit too close to Trudeau. You are starting to act like him.
June 8, 1978


Sinclair McKnight Stevens: Mr. Chairman, the minister seems to be acting like an emperor today, but 1 remind him that it is this committee which decides what questions can properly be put. Granted, he has the option to refuse to answer questions regardless of what they are, but in no way does he have the right in a high-falutin' way to tell us that we can talk ad nauseam about various questions but that he will not answer.


Joseph Jacques Jean Chrétien: Mr. Chairman told me that.


Sinclair McKnight Stevens: Mr. Chairman, the minister is burying his head in the sand. The most pertinent part of Bill C-56 is the question of the provincial sales tax. The appropriate place to deal with it-as we do with every standing committee-in this committee of the whole is on clause 1. That is the point at which we should be dealing with general questions. When we are dealing with this bill clause by clause, this very same minister will be standing up on his hind legs and telling us that we can deal only with technical things. He will do that when we are dealing with clause 30. He will tell us that we have no right to ask general questions.


Ramon John Hnatyshyn: He will impose closure. That is the way he will operate.


Sinclair McKnight Stevens: The minister is under a lot of pressure. He is very nervous today.


Joseph Jacques Jean Chrétien: You are backing a loser.


Sinclair McKnight Stevens: The minister has a few members sitting behind him who are very uncomfortable with some of the answers he has been giving with respect to the present situation regarding the provincial sales tax in Quebec, so I do not doubt that he would like questions to cease. However, let me put one further question.
Mr. Parizeau has raised the suggestion that because of the delay which may ensue regarding the federal payment in relation to the provincial sales tax reduction, debt in Quebec might be incurred which would result in interest having to be paid. Mr. Parizeau would like to be reimbursed for that interest. It is estimated that it might amount to $8 million or $9 million. Would the minister indicate whether the federal government is willing to reimburse Quebec for that?


Joseph Jacques Jean Chrétien: Mr. Chairman, I will be able to reply when we are on clause 30.


Ramon John Hnatyshyn: Take the Fifth Amendment, Jean. It would be a lot easier.


Sinclair McKnight Stevens: Perhaps the minister could indicate why he has appeared to be so ready to cooperate with respect to questions of a general nature touching on the provincial sales tax. At our request he even tabled a letter from Mr. Parizeau. Why did the minister appear to be so ready initially, and why is he now simply saying that he will not deal any further with the provincial sales tax matter until we reach clause 30?
Income Tax Act


Gérald Laniel: Order, please. I hesitate to intervene at this time. 1 maintain my ruling, and I hope that whatever answers are given, or whatever questions are asked, hon. members will not be prevented from expressing their opinions. The path being followed by the hon. member for York-Simcoe is to address himself to specifics. That has been allowed by me for one general purpose, to facilitate the work of the committee. I know the hon. member is the spokesman for the official opposition on this question.
This matter has been the crux of the debate on second reading, and it preoccupies all members of the House. 1 wanted to allow the hon. member to go beyond what has been permitted because this is supposed to be a general debate and it is not meant to be a specific debate on a clause. But because the new ways and means motion is in front of the committee only now, and also because of the letter of the Quebec minister of finance, 1 have allowed all these questions. It has been left up to the Minister of Finance to decide whether or not to answer them. It is within his rights to decide whether or not he wishes to answer them at this time, because there will be a further opportunity to answer them when we reach clause 30. I cannot quarrel with his decision. 1 can only hope that hon. members will not spend the time asking these questions when we are on clause 1, when they can do so when we reach Clause 30. This does not prevent hon. members from asking questions on general policy. It will be up to the minister to decide whether he wishes to answer them.


Lorne Edmund Nystrom: Mr. Chairman, I will be very brief.


Sinclair McKnight Stevens: Mr. Chairman, I rise on a point of order. Again it is to try to facilitate-


Some hon. Members:: Oh, oh!


An hon. Member:: Smile, you're on camera.


Sinclair McKnight Stevens: Mr. Chairman, it is truly remarkable when one has to sit on this side and watch the kangaroos opposite in action. My point of order was simply this: if the minister is so anxious that we get to clause 30-and he seems well disposed to tell us anything we want to know once we reach clause 30- would he consider standing clauses 1 to 29 inclusive and letting us consider clause 30 right now, and perhaps he will feel more relaxed to give us some information which we would obviously like to have?


Joseph Jacques Jean Chrétien: If the hon. member is willing to pass the 29 clauses right away, I will go on to clause 30.


Sinclair McKnight Stevens: I proposed that we stand them.


Gérald Laniel: Order, please. Either solution is impossible until we accept the new ways and means motion.


Joseph Jacques Jean Chrétien: We can do that with the unanimous consent of the committee.
80045 - 25%

June 8, 1978
Income Tax Act


Stanley Howard Knowles: That can only be done in the House, not in committee.


Lorne Edmund Nystrom: Mr. Chairman, I think I will try again. 1 want to say a few words on clause 1, which is the general clause, and my remarks pertain also to the sales tax. I have had a chance to look over the letter sent to the minister by Mr. Parizeau and 1 do not think it was fair of the Minister of Finance to have said that there has been agreement. My interpretation of what Mr. Parizeau said was: "What is the use, the federal government has the power to give $85 to the citizens of Quebec, I cannot do anything about it. 1 will have to tax back that $85." He said in his letter:

Following our exchange of correspondence and our discussions, it seems clear that our governments disagree about the formula for the sales tax reduction in Quebec and that it would be useless to seek a formula other than the one which was approved by the Quebec government and supported unanimously by the National Assembly.

What he is saying here is that it is futile to go on looking for a solution or to go on looking for an agreement between the two governments. The position of the government is very clear, and it is obvious that the two governments are not in agreement. It is obvious, says Mr. Parizeau, that he has the support of the National Assembly in Quebec.

And all parties at the Quebec National Assembly, the Liberal party, Mr. Ryan, the Union Nationale, the Parti Quebecois and all the others at the National Assembly.

Therefore, it is really futile to go on looking for a solution. That is what Mr. Parizeau is saying. I think the Minister of Finance is trying to pull wool over the eyes of the people of Canada when he says there is a solution. Perhaps he can explain in more detail just what the change is, and to what Mr. Parizeau is agreeing.
1 think this is one of the strangest debates we have ever had in this country. As has been said before by members of my party, members of the Conservative party, and members of the Social Credit party, it is clear that the actions of the Minister of Finance are a real infringement upon provincial rights and provincial authority. The federal government makes a special arrangement with Saskatchewan whereby the sales tax in that province is reduced by 2 per cent for nine months. There is also an arrangement with British Columbia and with the Atlantic provinces, as well as with Alberta with which there is an agreement not to do anything because they do not have a sales tax. So other provisions were put in the budget for the province of Alberta than for the remaining provinces.
Why is there all the concern about Quebec's way of reducing their sales tax'? They are trying to give the benefits of that federal money to their people in a fair and equitable way. Why cannot Quebec do that in the way they want? The sales tax is under their jurisdiction If the minister cannot get agreement from the province, he should not force something on them,
[Mr. Chretien.)
particularly since it is within their jurisdiction. The minister is flexible with Saskatchewan, British Columbia, and the Atlantic provinces; why can he not be flexible with the province of Quebec?
1 am very suspicious that the Minister of Finance is trying to set up a classical confrontation between French and English Canada, and that is very unfortunate. I am concerned about national unity, and 1 wish some of the Liberal members were as concerned as some of us are. If there is constant fighting, that will not help the situation in the country. An hon. member opposite is saying that I am playing with the separatists in Quebec. If I am, then what about Claude Ryan and what about all the members of the Liberal party in the National Assembly in Quebec? What about the four, five, or more Liberal backbenchers in the House, such as the hon. member for Maisonneuve-Rosemont and a few others, who are critical of what the Minister of Finance is doing? Is the minister also accusing the premiers of the western provinces of taking that position?
The Saskatchewan minister of finance has said that the sales tax is under provincial authority and he would like to have the money from the federal government and to spend it as the province sees fit. If everybody is a separatist, then God help this country. If everybody but the Liberal party is a separatist, God help us. I think that is one way to tear this country apart.
I believe that the disagreement can be settled very simply. It seems to me that when the Minister of Finance was offering something to the provinces that is under their authority and power under our constitution, he should not have brought in a plan unless he had the agreement of all the provinces. 11 does not matter what he proposes so long as he has the agreement of the provinces. He did not have that agreement with Quebec, therefore he should have waited for a while and brought in a plan to which all the provinces could have agreed, or he could have exercised the same flexibility with Quebec as he had with the other provinces.


Gérald Laniel: Order, please. The hon. member for Fabeilc is asking the permission of the hon. member to ask him a question.


Maurice Dupras: I would like to know if the hon. member claims that the Minister of Finance should have postponed his budget until the Quebec minister of finance had made up his mind. Is that what he is saying?


Lorne Edmund Nystrom: Mr. Chairman, the minister should have discussed this proposal with the ministers of finance at their conference in January. 1 understand there were detailed discussions at that time. If he did not discuss it at that time, it should have been discussed at the first ministers' conference in February. Why did he wait until the last minute before starting to discuss this proposal with the ministers of finance across the country?


Maurice Dupras: That is not correct.


Lorne Edmund Nystrom: Many, many ministers of finance have claimed that they were not given much time to consider the proposal. Apparently the Minister of Finance had a telephone conversation, for example, with one of the provincial ministers of finance and said, "Look, 1 have a budget coming up in two weeks. 1 have a proposal for you. Do you accept it or not?" He was like the big godfather standing up with a bit of federal money.
The province of Quebec wanted to make a special arrangement with the federal government, similar to the arrangements which were made with Saskatchewan, Alberta, British Columbia, and the Atlantic provinces. I come to the same conclusion which I arrived at a few minutes ago. Why did the minister not wait until an agreement had been reached with all provinces? If such an agreement could not be reached, why could the minister not be flexible? Why did he turn down the offer of Mr. Parizeau?


Maurice Dupras: Mr. Parizeau waited until two days after the budget was tabled.


Lorne Edmund Nystrom: Mr. Parizeau waited 48 hours before taking a position. So what? He was taking a position on something which is under his jurisdiction and his authority. Sales tax comes under the provincial laws of this country.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Boulanger:: Mr. Chairman, I would like to go back for a moment to the ruling you made a moment ago. It is easy to see now that the members of the official opposition, like the others, do not have the slightest desire to discuss the bill clause by clause. They want to do today what they did not have time to do yesterday or the day before, or two months ago. The soundness of your ruling is easy to see, and I accept it, but at the same time it is clear that they are taking advantage of the opportunity given by this ruling-I do not want to make the situation more complicated-but we could discuss this ruling at great length. They take advantage of a ruling you made precisely to take unfair advantage of it, simply to engage in a filibuster, and this shows that the members of the opposition are not serious, but just a bunch of actors.


Gérald Laniel: I would like to point out to the hon. member that what he is raising is a point of debate. He is entitled to his opinion. The Chair is not here to pass judgment on speeches, but to apply the rules. I said earlier that, under our practice, there is a general debate on clause 1, and I have here a ruling made by chairman Batten of the committee of the whole on February 15, 1968. He had this to say then:

The usual procedure, of course, is to have the general debate on clause 1, assuming that clause 1 is not just a short title. However, if it is the wish of the committee to have a general debate on the bill under clause 4, there is no reason at all why that should not be done. If the general debate is to be on clauses 4 and
Income Tax Act
5, or either of these clauses, I would ask members of the committee to confine their remarks in connection with clauses 1, 2 and 3 to those actual clauses.
If my interpretation is correct, the government House leader at the time, Mr. Sharp, intervened in this procedure and addressed himself to the Chairman. He is reported as saying the following:
Mr. Chairman, it seems to me that clauses 1, 2 and 3 are of a purely technical character and if there are to be remarks of a general nature such as has been suggested by the hon. member for Edmonton West they could quite appropriately be made on clauses 4 and 5. The first three clauses are merely technical in character.
This means that it is a question of interpretation by the Chair. If clause 1 is just a short title, or if it is a specific clause and the first clause to be considered, it is a clause on which there can be general debate in committee, and all latitude should be given to hon. members to use the time of the committee to express their feelings or points of view.


Lorne Edmund Nystrom: Mr. Chairman, once again it has been necessary for Your Honour to tell government members what the rules are. There can be a general discussion on clause 1. My intention was to talk about two or three matters, but so far I have dealt only with the sales tax provision.
The government has indicated that Mr. Parizeau made up his mind two days after the budget came down. So what? Sales tax is totally under provincial jurisdiction and authority. If Mr. Parizeau did not want to make up his mind, so what?


Mr. Lachance:: It is mixed jurisdiction.


Lorne Edmund Nystrom: I hear a Liberal backbencher indicating that sales tax comes under a mixed jurisdiction. That is not correct. Even the Minister of Finance would not say that.


Claude-André Lachance: 1 challenge you on that.


Lorne Edmund Nystrom: The hon. member can challenge me if he so desires. He has the right to rise in the House and make a speech or a statement concerning how the retail sales tax can suddenly become an area of mixed jurisdiction. 1 am sure even the Minister of Finance would be embarrassed by that comment on the part of one of his backbenchers.
At any rate, Mr. Parizeau had the right to do what he did. This is an area which falls under provincial jurisdiction. He decided to use the money which was coming to Quebec in a manner that would help the people of Quebec the most. He chose to eliminate taxes on five sectors altogether. So what? That is his right. He can spend that money in the manner he sees fit.
The government of Saskatchewan decided to implement a 2 per cent reduction over nine months, rather than a 3 per cent reduction over six months. They had various global Saskatchewan reasons for doing so. The federal government bought that proposition, as well as the proposition of the province of British Columbia. Why did the government not accept Quebec's proposition? Because its proposition came two days after the budget was tabled does not matter.

June 8, 1978
Income Tax Act
1 have to come to the same conclusion which I reached a few moments ago, even though that conclusion resulted in government members becoming excited. 1 am suspicious that the government was attempting to set up a high school confrontation between French and English Canada. Such a confrontation makes it difficult to keep Canada together. Hon. members oposite know my sympathies for keeping this country together. 1 feel very strongly about that. I do not think that can be accomplished by allowing a constant confrontation.
If the minister is willing to come in with a budget proposal without the agreement of one province beforehand, that in itself is dangerous. If that province is a province which has a government advocating independence, it is even more dangerous. The minister is aware of that. I suspect one reason for him not withdrawing the proviso in his budget was that he wanted a confrontation and fight on this issue. That is very, very unfortunate, as well as being very damaging to the future of Canada.


Claude-André Lachance: On a point of order, Mr. Speaker.


Gérald Laniel: Order. The hon. member for Lafontaine-Rosemont on a point of order.


Claude-André Lachance: 1 do not want to start a debate on this matter, Mr. Chairman, but I think that a while ago the hon. member unwillingly no doubt, 1 repeat unwillingly, said things which are not consistent with the facts. 1 simply want, for the record-


Lorne Edmund Nystrom: That is not a point of order.


Claude-André Lachance: Of course it is. This member has misled the House. I must put the record straight. He indicated that sales tax is under provincial jurisdiction. If the hon. member reads sections 92(2) of the constitution, he will see that the federal parliament has the power to impose taxation on any subject whatsoever. Thus, it is a mixed jurisdiction.


Gérald Laniel: I am aware that the hon. member for Nanaimo-Cowichan-The Islands is seeking the floor, but I am sure I can deal with this point of order without his assistance. Surely this is an argument and an expression of opinion. The hon. member for Lafontaine-Rosemont can contradict the argument of the hon. member for Yorkton-Melville when he seeks the floor in due time, unless he wants to prevent a grave misrepresentation or wants to correct a wrong quotation, which can be done under the guise of a point of order. When there is a difference of interpretation in respect of the bill, the avenue which is open to the hon. member is to seek the floor and make his point at that time.


Lorne Edmund Nystrom: Mr. Chairman, I hope the hon. member for Lafontaine-Rosemont will give the committee the pleasure of getting up and explaining his point of view of how the retail

sales tax area can be shared by the federal and provincial governments. It seems to me that if he pushes that line he will really have a fight with the provinces, not just the province of Quebec but with every single one in this country.
There is a federal sales tax, but it is indirect and at the level of manufacturers and wholesalers. It is not a direct and overt sales tax as we have on retail goods imposed by the provinces. This is an area totally within provincial authority by practice in this country, and has been for as long as I can remember.


An hon. Member:: But only by practice.


Lorne Edmund Nystrom: 1 am saying that it is by practice. Maybe some of the brilliant constitutional lawyers in this place, like the hon. member for Crowfoot and some of the others from that side of the House, will devise a plan to provide the Minister of Finance with a means of levying a retail sales tax in addition to the present sales tax by the provinces. Perhaps that is a question the minister should answer. Is this in the back of his mind? Was the hon. member for Lafontaine-Rosemont speaking of government policy, and was he giving us a signal of what is to come in the future, namely, that the federal government is considering getting into the retail sales tax area? I hope the minister will answer that question in a minute or two because this is damned important. I know the minister of finance for Saskatchewan would want me to ask that of the federal minister since we have now had one of the backbenchers and a minister of the Crown suggesting that the federal government could get into the retail sales tax field. Is the Minister of Finance considering this?


Gérald Laniel: Shall clause 1 carry?


Some hon. Members:: No.


Lorne Edmund Nystrom: Perhaps the minister would answer my question. Is the federal government giving consideration now, as has been indicated by one of his own backbenchers and one of his colleagues in the cabinet, namely, the hon. member for Crowfoot, to getting into the retail sales tax business in competition with the provinces? One of the members of the hon. minister's party has said that the federal government does have some authority in this regard and could get into the retail sales tax business. The Minister of Industry, Trade and Commerce said, if I understood him correctly, that according to the constitution the federal government could do this, and that it is only as a matter of practice that it has not done so to this point. Is the federal government now considering levying a retail sales tax in Canada in direct competition with the provinces?


Joseph Jacques Jean Chrétien: No. I think the hon. member was just trying to be smart in that regard. Just this afternoon at 3:30, with unanimous consent, we made a reference of the problem to members of the committee, that is, what we should do with the federal tax that exists at the manufacturing level. This is a matter that will be contemplated by members of the committee and people across the land.
June 8, 1978

Some people suggest that we should change the federal tax to a type of tax that would apply at the last level of the transaction rather than at the middle stage. This is completely possible. We have a manufacturing tax today, but some suggest that when we reduce that tax the manufacturer very often does not pass the benefit on to the consumer. When we reduced this tax some time ago some corporations were accused of putting the savings in their own pockets rather than passing them on to the consumer.
Constitutionally this could be done. 1 do not say that we will be doing that, but the House will be studying this problem very soon. That is a tax system being used in many countries in Europe. It is a value added tax. We are exploring new schemes and methods. The most conservative suggestions made in this House very surprisingly always come from members in the NDP.


Lorne Edmund Nystrom: I should like to ask the minister a question in that regard, Mr. Chairman.


Gérald Laniel: Order. The hon. member's time has not expired. If he wants to pursue the matter he has another few minutes available.


Lorne Edmund Nystrom: Mr. Chairman, 1 think I have about two minutes so I would like to ask the minister a supplementary question. Is it fair to say that the proposal to levy a federal sales tax at the retail level is now under active consideration?


Joseph Jacques Jean Chrétien: Mr. Chairman, 1 would say no.


Claude-André Lachance: Mr. Chairman, following the comments made by the previous speaker, 1 would simply like to add a few remarks on this bill. You will recall, Mr. Chairman, that 1 spoke during the debate on second reading and that 1 then expressed my view on the bill now before us. I believe, Mr. Chairman, that when studying a bill of a fiscal nature it is important to keep in mind the very basis of the financial system, the power granted to various jurisdictions to levy taxes. Mr. Chairman, the hon. member who spoke before me made an intervention on the subject of Bill C-56. He had the inalienable right to do so. However, 1 am left with the impression that he does not really understand the basis of the Canadian financial system.
I would simply remind the House, Mr. Chairman, that in a federal system such as ours, made up of several levels of jurisdiction, the Canadian constitution and more precisely the British North America Act of 1867 have provided for a redistribution of the fiscal burden and the power of levying taxes. In this respect, Mr. Chairman, the federal government has to power to levy public money through any means or tax system provided for in clause 91(3) of the British North America Act.
Mr. Chairman, the provinces have the power of direct taxation within provincial limits in order to raise revenues on
Adjournment Motion
provincial items as stipulated in clause 92(2). Mr. Chairman, 1 never meant to say that the federal government should get involved in direct taxation within the provincial sales taxes jurisdiction but simply that it has a general responsibility as far as tax is concerned and more particularly that it has the power to levy taxes in any field and in any way it wants. The provinces, Mr. Chairman, are restricted in the way they raise taxes and I would simply remind the hon. member, who is generally serious but who played the fool a while ago, that if he read the British North America Act over, he would realize that restrictions included in the constitution are not imposed on the federal government but indeed on provincial authorities.
In that sense, the Minister of Finance has made a proposal to the provinces which aims at reducing the sales tax. He did not want to interfere in the business of the provinces by levying his own direct tax, but simply provided for a means to give back to the provinces the missing money. However, it is obvious that the provinces have been used to have jurisdiction in that fiscal field, a jurisdiction which they were entitled to under section 92(2), but as far as I know, Mr. Chairman, tradition has never invalidated the constitution and 1 would need proof to the contrary to believe it has. In this regard, I think the federal government had-and still has-the possibility of imposing whatever tax it wanted and by whatever means it wished, and in this regard, the sales tax-


Gérald Laniel: Order. It being five o'clock, it is my duty to rise, report progress and request leave to resume consideration of the bill later today.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Turner):: 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 Winnipeg South Centre (Mr. McKenzie)-Capital Punishment-Reinstatement of death penalty for terrorists; the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn)-Conflict of Interest-Effect of guidelines on former ministers and deputy ministers.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions, private bills, public bills.

June 8, 1978
Post Office


Yvon Pinard: Mr. Speaker, I think there is unanimous consent to proceed to consideration of notice of motion No. 52 in the name of the hon. member for Brandon-Souris (Mr. Dinsdale) and that preceding notices of motions be allowed to stand.


The Acting Speaker (Mr. Turner):: Is it agreed by unanimous consent that we allow item No. 2 to stand and retain its place on the order paper?


Some hon. Members:: Agreed.


PRIVATE MEMBERS' MOTIONS FOR PAPERS
Walter Gilbert Dinsdale: That an order of the House do issue for a copy of the Post Office Department, Climate Analysis Report carried out by Hay Associates Limited of Toronto, Ontario, in October 1975.
He said: Mr. Speaker, this is one of a series of motions which I have placed on the order paper in an effort to open up the Post Office Department to the scrutiny of this House and to the public, because 1 feel that it is the responsibility of every member of parliament to endeavour to the best of his ability to come to grips with what is a growing malaise in the Post Office Department. I am not going to debate at length this particular motion this afternoon because I have brought this issue repeatedly before the House of Commons.
Motion No. 52 is particularly germane to the situation because it calls for the tabling of the climatic report that was prepared by the Hay consultant group, which was hired by the Treasury Board to do an in-depth examination of the problems besetting Canada's postal service. The Hay group produced a series of reports, including the one which we have requested for tabling. This one is particularly pertinent because it deals with the climate of the Post Office Department, that intangible psychological aspect of labour-management relations. It is in this area that the successive postmasters general have had the responsibility for administering the Post Office in the past ten years-although there have been repeated changes, seven in the short space of ten years-dealing with labour-management relationships which have continued to deteriorate ever since the process of automation and mechanization was announced back in 1970.
Unfortunately, instead of an improvement in this fundamental area of concern, there has been continuing breakdown of the climate of trust and atmosphere of good morale that is essential if the Post Office is to pull itself out of the doldrums
[The Acting Speaker (Mr. Turner).]
and to operate as an efficient, reliable service, which is what Canada must have in the interests of unity and economic well-being of the country.
We know what has happened over the years. The successive strikes have constantly disrupted the delivery of mail, usually at the busiest times of the year-pre-Christmas strikes, both legal and illegal-and they have had a damaging effect on the business community. Strikes of this kind are always followed by a rash of bankruptcy declarations, and it has been of particular concern to the Canadian Independent Business Federation which is made up of small business groups in Canada. It has resulted in this association, under its leader, John Bulloch, making repeated attempts, by consultation with the government, by consultation with the opposition, and by attempts to arouse public response, to improve the efficiency of the Post Office Department.
I see no reason for the government to restrict a report of this kind which comments on the prevailing atmosphere and is a detailed discussion in terms of modern industrial relations. The Hay people are very skilled in this area. This report offers advice which, if available to the members of parliament and the people of Canada, would provide some of the answers for the long overdue solutions that would have to be put into play if we are going to solve the problems of the Post Office.
We now have a new Postmaster General, and he has made statements in his speeches which indicate that he realizes that this is the essence of the problem. You can transform the Post Office Department into a Crown corporation, you can reorganize management, you can do all the technical and administrative changes, but until you improve the climate, the working atmosphere of the Post Office, you are not going to resolve the malaise.
The Postmaster General made a speech on April 28 at the opening of the new post office building in Port Stanley. There are a few quotations which indicate that he has been reading the Hay report, and I wish that he would allow others to have access to the report. The reports do come to us because, obviously, when you have problems of the proportions of those prevailing in the Post Office, leaks occur, and we do get these reports regardless. What I am advocating here, however, is that he make it available to the people of Canada so they can understand the essence of the problem.
Here is one of the quotations, Mr. Speaker:
The post office is not only a place of business, but also a meeting place, a place where people like to go. And in this kind of office you get the best of service, personal service.
That is the ideal picture of what the post office should be, a place where there are cordial, good relations, in this instance with the public. He goes on:
These days, when everything seems to be big and impersonal, your post office is still a very personal place.
If the Postmaster General can convince the members of the Canadian Union of Postal Workers that it is a very personal and friendly place, then he will have his problems solved. Turning it into a Crown corporation will not solve the problem
June 8, 1978

if you do not solve industrial relations in the Post Office work place.
Here is another significant paragraph which indicates that the Postmaster General has read the report:
Mail is a vital factor in almost everyone's life. Every day thousands of people write countless letters, and unless the Post Office delivers them, day after day, the economy slows to a crawl, friends and relatives lose touch with one another or, as almost everyone notices in times of labour conflict, everything comes to a shuddering stop.
That is very dramatic language, and it describes the situation that exists in the Post Office at the present time to perfection.


Gerald William Baldwin: In the country.


Walter Gilbert Dinsdale: Yes, in the country as well.
Obviously, the Postmaster General has read the report, and all we are asking is that it be released so the public can see at least that the officials in the Post Office Department are endeavouring to come to grips with the difficulties.
Let me indicate that there is no improvement in the situation. On the three major fronts of postal affairs where the Post Office interfaces with the people who are most involved with the whole mail delivery process, the Post Office management is in trouble. First of all, there is the public, which is in constant cry protesting the deterioration in service.
The Toronto Star has assigned one of its chief investigative reporters to conduct an in-depth study of the deteriorating climate in the work place of the Post Office. The reporter, Sidney Katz, has an outstanding reputation in this regard, and I should like to quote from his report in the Toronto Star of May 27, 1978, as follows:
A three-week Star investigation suggests the union often has good reason for its militancy. The union lists these gripes:
Insensitive and boorish supervisors; mistreatment of probationers; ridiculously long delays in getting paid; failure to consult the union about technological change; unreasonable delays in handling grievances;-
There is a backlog of thousands of grievances, and I will put on the record in a moment an item from Ottawa Citizen of May 25, under the heading "Postal Grievances Costly". The Toronto Star article continues:
-managerial incompetence; the improper use of casual and part-time help; unreasonable censorship of notices the union wants to post on the plant bulletin boards; working conditions which are unsatisfactory because of noise, monotony and night work.
You can add to that list disciplinary procedures like this one. It's prescribed by an official Post Office managerial document as a cure for major problems and it's called the 'hot stove' approach.
The manual says it is a concept to help supervisors deal with the basic dilemma of discipline. 'Like touching a hot stove, the person (the offender) will have an experience which is 1, immediate; 2, consistent; and 3. impersonal, it
says.
Joanne Leader, 22, is one of the 3,000 federal employees who work inside the mammoth, super-mechanized gateway postal facility in Mississauga.
She protested to the Star, 'The public has no idea of the abuse we have to put up with from management. We have to fight like crazy for rights that other employees take for granted. We're ordinary human beings who want to be treated fairly and with respect.'
Post Office
This points out the continuing problem with the union and with labour. A pile up of grievances must be avoided as they are costly.
The article in the Ottawa Citizen of May 25 begins as follows:
An ever increasing number of grievances referred to adjudicators from the area in the Post Office has helped lead to a major increase in the cost of adjudicators, J. H. Brown, chairman of the Public Service Staff Relations Board (PSSRB) said today.
Something has to be done, Mr. Speaker. 1 am sure if we had access to the climate report of the Hay group we woud be able to offer some helpful suggestions to the Postmaster General as he endeavours to come to grips with these problems. According to the speech he made at Port Sydney he is obviously trying to come to grips with them.
Not only is the Post Office suffering from low morale on the labour front but the public is also beginning to act. A letter came across my desk this afternoon which is similar to many that come to my office every day. It is addressed to the Postmaster General, and reads as follows:
Dear Mr. Lamontagne:
1 am returning the brochure 'The way to better postal service' received with my family allowance cheque. This brochure is an insult as well as a waste of money. You are implying that I and the rest of the Canadian public are responsible for the deplorable state of the Canadian postal system. Most Canadians are co-operating and trying their utmost to get the mail through. Your meagre suggestions would not improve the situation at all. The problems with the postal service are internal and until you and your colleagues have enough courage to do the job for which you were elected the postal union will continue to make the Canadian public suffer under this farce you call 'postal service'.
The letter was dated May 19 and signed by a Mrs. Vera E. Gillespie. This sort of public reaction is reflected in the press, so the Postmaster General must be aware of it.
Finally, Mr. Speaker, Post Office customers are at breaking point and, of course, if you lose your customers there is no use staying in business. The Periodical Press Association of Canada is taking the Postmaster General and his department to court because of the illegal method of raising rates, and particularly because of the failure to consult and inform customers that this increase was in prospect. Major users of the Post Office such as Readers Digest are just as concerned with the lack of efficiency, increasing costs and declining services. These protests come across my desk. They indicate the dilemma when the efficiency of an organization depends upon three groups-the public, the inside workers, and the customers. They all lay their complaints on doorstep of the Postmaster General.
We have a major dilemma, Mr. Speaker, and I do not think it will be solved by the tactics the Postmaster General has used so far. He has announced yet another internal study on the advisability of converting the Post Office into a Crown corporation. 1 imagine this will be a secret document and that members of this House will not have access to it. We will probably not be able to consider the recommendations in open debate in this House. The report is scheduled for July 13.
6204

June 8, 1978
Post Office
The Postmaster General avoided discussion on the proposition by announcing the establishment of the internal committee study outside the House of Commons, in company with the Minister of Labour (Mr. Munro). I ask him in this motion, and in the other motions I have put forward, to take the Parliament of Canada into his confidence. Elected members have responsibility for grappling with problems as they arise in areas of public concern. I am sure you will agree, Mr. Speaker, that the Post Office is one of the greatest areas of concern at the moment. 1 hope we can have this report and the others we asked for so that we may have intelligent dialogue on the matter.


John R. Rodriguez: Mr. Speaker, 1 want to take the opportunity to participate in the debate on this motion. It is rather interesting to hear the Conservative critic for the Post Office mention the "hot stove" technique. He dealt with the problems within the Post Office, and there is no doubt that those problems are interpersonal. They are the interpersonal relationships between management and the employees. The government has embarked upon the wrong approach to the problems.
I draw to Your Honour's attention the Ritchie report on the Post Office. If we think the conditions presently tolerated by the government have exacerbated relationships in the Post Office between management and employees, can you imagine what would happen if the Ritchie report were implemented? That was the Conservative report on the Post Office. For example, it says no strikes in the Post Office. That is like carrying a match around where ammunition is stored. Imagine that! Will that help industrial relations within the Post Office? Secondly, one proposal was to the effect that the Post Office should sell off some of its operations. I presume they mean sell off the more profitable operations and let the taxpayers pick up the more costly operations in the Post Office.
After all the study done by the official opposition on the Post Office I do not think it will in any way come to grips with the problem. There is certainly no doubt whatsoever that the Post Office should operate as a service. It is not in the business of making a profit. It is in the business of providing service to Canadians at the best possible price at the most reasonable cost to the taxpayers of this country.
We have heard from the workers in the Post Office, and we have heard from the consumers who use and get service from the Post Office that the relationships within the Post Office are very bad. The Postmaster General (Mr. Lamontagne) has travelled across this country making speeches. I think he has been very abrasive in the statements which he has made with respect to the CUPW, with respect to conditions in the Post Office, and in trying to tag CUPW as the bete noire for the problems in the Post Office.
This motion calls for the production of a study done by Hay Associates. It is Part II of Canada Post 75. I have just had a copy of that report delivered to me in a brown envelope. I can understand why the Postmaster General has been so secretive

about this report, because in effect it places the blame and responsibility for the mess in the Post Office firmly and squarely on the shoulders of this government and, the revolving door approach to Postmasters General in that office over the last five or six years.
I would like to quote from the Hay report. Under the title "Organizational Clarity-Factor I", it says:
The group score on this factor (33rd percentile) indicates that your managers are uncertain about the aims, objectives, and future directions of Canada Post.
The reference to "your managers" is to postmasters general. This section goes on further to say:
A look at the individual items shows that while there tends to be some formal planning, it is incomplete. The goals are unclear and provide little useful context for the everyday functioning of the organization. Even when goals do exist, there seldom are well defined plans to achieve them. The limits of authority for managers are ill-defined and downward communications are poor.
After studying the Post Office management and inter-relationships within the Post Office, under the heading "DecisionMaking Style" Hay and Associates said this:
While this is the factor on which the group had the highest score (37th percentile) it can by no means be considered very positive. Although planning is seen as being oriented somewhat toward the long term, decision-making tends to be based on a short range view and is delayed. Moreover, decisions are commonly based on inadequate information.
On the question of "Organizational Integration-Factor III," this is what the report had to say:
The fact that the group scores at only the 33rd percentile on this factor says that here is little interunit co-operation and a lack of understanding between units of each other's goals or difficulties. In addition, there is a lack of awareness of the inter-relationships among units and communications are generally poor. Even lateral communications, which are seen as the most positive aspect of integration, are barely adequate.
Under the heading "Management Style-Factor IV" the report says this:
This is the second lowest factor, and the fact that the score is at only the 27th percentile is a strong indication that your managers are extremely frustrated and feel they do not have sufficient say in how end results are achieved. More specifically, they feel that open discussion of conflicts, constructive criticism and innovation are not encouraged. Nor are managers encouraged to take reasonable risks in order to increase the organization's effectiveness. There is little freedom for them to take independent action in the performance of their jobs and, most significantly, support from higher levels of management is almost, totally lacking.
Under "Factor VI: Organizational Vitality" the report says:
Canada Post is viewed by its managers as being a conservative organization: unresponsive to changes in its environment; conservative-
Small "c" of course.
-in its decision-making; and having cautious goals. Consistent with this is the perception that Canada Post does offer considerable job security-little ever happens to alter the status quo.
The low score on this factor (32nd percentile) may be a reflection of other basic problems in the climate. The fact that on earlier dimensions the managers indicated that they have little freedom to act, that they find the decision-making processes to be less than adequate, and that they are unclear about the organization's plans and goals, probably all contribute to their perception that Canada Post lacks vitality.
On the question of "Compensation" which is "Factor VII", the report says this:
This is the factor which is perceived most negatively by your managers (21st percentile). None of the items could in any way be considered positive.
June 8, 1978

Both the internal relationship among salaries in Canada Post and the external competitiveness of salaries are perceived to be poor. Moreover, there is little perceived relationship between compensation and performance, which is consistent with Factor V where your managers indicated that there is little demand for performance anyway.
Most noteworthy is your managers' extremely negative view of the competitiveness of benefits in Canada Post.
The question which senior management must answer in order to be able to interpret the items in this factor is whether the perceptions reflect real inequities, or whether, in fact, the perceptions themselves are erroneous.
Now we come to "Human Resource Development" which is "Factor VIII". In this regard the report says:
This factor represents a specific instance of a more general problem in Canada Post, the perceived lack of planning in this case for the human resources of the organization. Although there is some searching within the organization for management talent when a vacancy exists, there is almost negligible emphasis on developing this talent: the jobs present virtually no challenge; there are few opportunities for individual growth and development; and there are relatively few opportunities for promotion. Consequently, Canada Post is unsuccessful in developing people from within for larger jobs, and there are very few people available within the organization who are competent to move into larger jobs.
I can understand why the minister has been so defensive and secretive about exchanging that report and making that report public so that members of this House, who have concern about the performance of the Post Office, could have the information. It has been the practice of the minister and his predecessors to pick out, say, CUPW or the more militant union leaders and point to them as the cause of the problem in the Post Office. Mr. Speaker, that is a neat trick whose purpose is to divert attention from what really needs to be done in the department. The minister and his officials have been sitting on these reports though their conclusions would greatly assist our discussions about ways in which conditions in the Post Office could be improved.
I receive regularly from the office of the Postmaster General a memorandum attached to which are 50 or 60 press clippings which are nothing but self-serving statements the minister has made at various places from coast to coast. 1 wonder he has not broken his wrist patting himself on the back. If he has somebody in the department spending his time photostating all these self-serving comments and putting them together in a memorandum to send to members of parliament, he can shove it. If he wants to send me something, why doesn't he send me these reports which the taxpayers have paid for so that we can question the minister and his officials properly about the service the Post Office is giving?
The Postmaster General, Mr. Speaker, will never be able to set things right in the Post Office until he gets himself a backbone instead of a wishbone. My experience is that postmasters general have been the victims of their senior bureaucrats moulded to believe the same things as they believe about the way the Post Office should operate. I remember that soon after I began to take an interest in Post Office affairs for my party the first postmaster general I encountered was Bryce Mackasey. And the first thing he said to me was: "John, the problems in the Post Office lie with the Marxists in the Montreal post office." Notice the mentality, Mr. Speaker.
Post Office
They look at a group of workers and say: "There is the problem". They do not look internally. They do not look objectively at the way in which the department is operating. New ministers are appointed and right away the senior bureaucrats in the Post Office start moulding them. They are like clones. They all march out looking alike, saying the same things.
Well, the Postmaster General certainly had an insight the other day. He made a statement to the press in which he said communication between CUPW and Post Office management had deteriorated to nothing. It takes a Postmaster General with great insight to determine that communication between CUPW and management has deteriorated.
If the minister really wants to solve his problems with CUPW, I can offer some suggestions to him right now. First, all 43,000 grievances should be wiped out immediately. They should be wiped off the books.
Second, there is no need for a further study. There is no question but that the Post Office should become a Crown corporation under the Canada Labour Code.
Third, a memorandum should go out to all engaged in management telling them that the Post Office intends to abide by its agreement with the employees, whether with CUPW or with any of the other postal unions.
Fourth, the minister should begin transferring some of those postal corps officials from the last war who occupy positions in middle management and who are today square pegs in round holes. Early retirement might be one way, or they could be transferred across the country so as to get a better perception of what it is like to serve people in other regions.
These are things the Postmaster General should undertake to do if he has the courage. Radical action of this kind is needed to show that it is the Postmaster General who is in control, not the bureaucrats who sit in the background and try to stage the whole operation.
There are a lot of good workers in the Post Office and the minister does no service to the institution when he permits the Post Office to be torn apart by people who are on the outside. He does not serve the Post Office well if he allows productive and committed workers to be downgraded and denigrated by people outside who do not understand the workings of the Post Office or the difficulties outlined in the Hay report.
I might say it does not help morale in the Post Office to hear, for instance, of a secret report with respect to cutting back walks and deliveries in Vancouver. 1 understand there is a secret report flying around somewhere to that effect. The Prime Minister (Mr. Trudeau) once said, we recall, that people will have to be prepared to forget about door to door delivery. It seems to me that speculation of this kind has no positive value whatever. Let us instead get down to the business of correcting what is wrong with the Post Office. We have paid for these studies as taxpayers. Surely, the point of a study is that it provides the basis for informed discussion. It would be much better to provide this information than to go around
80045-26(4

June 8, 1978
Post Office
the country making even more difficult the negotiations currently going on between Treasury Board and CUPW.
1 trust the Postmaster General will act on the positive suggestions we have put forward. The Conservatives have welcomed the recommendations of the Ritchie report with a big fanfare. They got this man from Imperial Oil, he was parachuted into Algoma-


The Acting Speaker (Mr. Turner):: Order. 1 regret to interrupt the hon. member but his time has expired.


Hon. J.-Gilles Lamontagne (Postmaster General):: Mr. Speaker, 1 listened carefully to both the hon. member for Brandon-Souris (Mr. Dinsdale) and the hon. member for Nickel Belt (Mr. Rodriguez), but I would like at the beginning of my speech to put things in their places and to try to explain the problem at the Post Office.
We are very much aware that the Post Office is an essential service to all Canadians. I agree with the hon. member for Nickel Belt that the main purpose of the Post Office is not to make a profit but to provide service. 1 do not agree with every suggestion the hon. member has made to solve the problems of the Post Office because the hon. member does not seem to understand them.
This is the third time I have been asked to answer questions about the Hay report. I also spoke on May 4, and my speech can be found at page 5164 of Hansard. Before I deal with the Hay report, I would like to ask hon. members to be serious, more constructive and positive. Let us stop this attitude of gloom and doom about the Post Office. Let us stop looking backward and conducting a post mortem. Let us stop thinking about what happened weeks, months and years ago.


Walter Gilbert Dinsdale: What about yesterday and today?


Mr. Lamontagne:: Let us stop crying over spilt milk, as we say in English. Let us not live the Conservative way. Let us deal realistically with the problems we have. It is true we are facing a challenge at the Post Office, but it is unrealistic and irresponsible to ask people to believe that we could have the same Post Office service we had 50 years ago. Perhaps the opposition would like us to pull out a report relating to 1925.
The Hay report is three years old. Many things have happened since then. It is a challenge to make the Post Office operate more efficiently and more consistently and to give Canadians the service they deserve. With the revolution in technology that we have seen in the Post Office, many problems have arisen. We have a budget of $1.4 billion. There are 63,000 workers, six unions and some associations. We operate the largest fleet of trucks in Canada; we have 3,734 trucks. We use 4.5 million gallons of fuel and have close to 9,000 postal bureaux across Canada. There are millions of miles to cover in order to get six billion pieces of mail to our 23 million people. That is the magnitude of our postal service, and the recommendations in the Hay report will not solve the problems we have.
[ Translation]
A few years ago, a program was implemented to meet more effectively the increasing volume of mail in many regions of the country and the problems at certain of our installations which had become outdated. New installations were therefore proposed and a new operational technology was designed. This is why we are now facing an extraordinary evolution. We are now going through a completely new experience thanks to the most sophisticated technology.

The Hay report will not cure that.

It would be much easier to solve the problems that have come up and to provide Canadians with the best performance possible if we could count on the full co-operation of all the members of our unions and especially the Canadian Union of Postal Workers.
The problem of labour relations that I would like to touch on briefly is well known, but since we are now involved in a conciliation process with the Canadian Union of Postal Workers and are also negotiating on a friendly term with the Letter Carriers' Union of Canada, I shall not go into details. However, I would like to clarify certain recent statements. It is wrong to suggest that the Canadian Union of Postal Workers does not have a collective agreement. Even though the expiry date of last June is now passed, the previous collective agreement remains in effect and its clauses must be respected, as they are. This is an excellent collective agreement, and if the hon. members think that the postal workers are not well treated, I would suggest that they read their own collective agreement and compare it with that of the CUPW.

The hon. member for Nickel Belt is well aware of working conditions in the Post Office and, like me, is devoted to the workers. I would like him to look into the collective agreement with CUPW to see if he knows of any other collective agreement which provides the same rights or conditions. 1 would be surprised if this collective agreement is not the best collective agreement compared with many others. When we say we do not want to renegotiate, that does not mean we are not ready to discuss some items. The existing collective agreement is very good, but we want to clarify its language. That has been the source of the problem since 1975. If we could clarify the language and the interpretation of some clauses, I think we would find the solution to many of our problems.
[ Translation]
Mr. Speaker, of course, we are still ready to negotiate through the conciliation process. However, we have believed it essential-and this is what I said in French-to clarify the legal interpretation and the meaning of certain expressions used in the agreement. 1 repeat that we are willing to do everything in our power to prevent a strike and to provide at the same time for our workers fair and humane working

June 8, 1978

conditions which will be equal to those of most Canadian workers, or even better, as long as these are reasonable and allow us to meet our commitments towards the Canadian people.

The Post Office has 23 million shareholders. It is very nice to say that we should please the workers and give them extraordinary conditions, but we have a responsibility to the Canadian people who are paying the bills. We talk about the rights of management and the rights of workers, but there are no rights without responsibilities. Both management and the workers have responsibilities. I ask all our workers to put in an honest day's work and to strive to eliminate some of the current abuses of the rights contained in their collective agreement.
Two such abuses are absenteeism and multiplicity of grievances. The hon. member for Nickel Belt spoke about 42,000 grievances. I think that is proof that there must be abuses. The hon. member for Nickel Belt knows very well that it is easy to gather 1,000, 2,000 or even 5,000 grievances. 1 negotiated collective agreements in Quebec City for 12 years. We never lost an hour's work. We could at least talk to the people. We tried to communicate with our unions so that their rights could be protected. We collaborated, but it is very difficult to do that in this situation.
Asking what I just asked of our workers is not beyond reason. It is common sense, and the Canadian taxpayer has the right to an efficient postal service in return for the taxes he is paying. Despite all these difficulties I am still optimistic that we can come to an agreement and improve substantially the quality of our postal service. This has to be worked out between management and labour together. One cannot do it without the other. I am not being naive when I say that I have the firm belief that the majority of postal workers and ourselves desire an agreement instead of the other course which would be open to us all if we fail to reach an agreement.
When I say the majority of workers, 1 would like to see all CLJPW workers vote at a certain point so that we may know whether or not they want to strike with the conditions we give them. 1 think that would be much more democratic than to have a vote of 1,000 workers out of 23,000. If we could find that out, maybe that would be a good move.
There were many other reports which did not come up with a solution to our present problem. There are no miracle solutions, and even the Ritchie report submitted by the opposition has not brought us any solutions or any cure for our present difficulties. Banning the right to strike is no cure. Can you believe such a ban in 1978? Banning the right to strike would not prevent slowdowns. It would be much better to try to make our unions understand their right to strike but, as I said before, not to strike for any reason but rather to strike for good reason. As to private enterprise, obviously private enterprise would take over the Post Office, or what is profitable in
Post Office
the Post Office; but as for the rest, Canadians would have to foot the bill.
With regard to converting the Post Office Department into a Crown corporation, we are studying that proposal at the moment. We are studying it intelligently. As I said when I took over this portfolio, let us be intelligent about it. Let us look at it first. This has been tried in the United States and after seven years it is a mess. Are we to copy them now? We are still open minded about it and we say let us study this and see what happens. I do not believe that even if we convert the Post Office into a Crown corporation we will settle all our problems. On that point I agree with the hon. member for Nickel Belt.
It has been suggested that we should pay salaries equal to those paid by private enterprise. I think that is the case already. We provide good conditions; our salaries are fair.
There has been mention of leadership with backbone. We are exercising leadership in many ways, but one has to be careful not to confuse leadership with dictatorship. It would be very easy to be a dictator and to be arrogant toward our workers or even with regard to management; but it is much more intelligent to be flexible as well as firm and at the same time to show leadership without being dictatorial.
Many people have suggested that I should take the hard line. When something is broken, it is easier to repair it than to take steps to prevent the break.

Until now we have been tolerant and understanding. We have tried to communicate and establish a relationship with the other party to find together the answer to our problems. We intend to continue in that direction. We must explore every approach and make sure that we did not ignore any possible solution before we decide to change our philosophy and adopt intransigent tactics, as everybody will suffer from it. [English]
Let me come back, Mr. Speaker, to the Hay report. It remains a great mystery to me why hon. members of the opposition persist in demanding to have copies of the Hay report, which apparently they already have. If this document prescribed a cure-all for a number of labour relations problems which are now confronting the Post Office, I could understand their concern. The Hay report, which is an attitudinal survey of the Post Office management, does not do that. Not one document could possibly prescribe a simple solution to perfecting the movement of the mails in an organization staffed by over 60,000 employees in operations scattered over thousands of square miles.
Furthermore, what mystifies me is why the hon. member for Brandon-Souris should demand a copy of the report when obviously opposition members have it. The report is three years old. Having heard the hon. member for Nickel Belt quote some of the paragraphs from the report, I am convinced that it does not offer solutions to our problem. What kind of manoeuvre is this? Are they really dedicated to ferreting out informa-

June 8, 1978
Post Office
tion which it would be in the best interests of the Canadian public to know? I hardly think so.
The report conducted by Hay Associates of Toronto is now almost three years old. Lots of things have happened in the last three years.


Walter Gilbert Dinsdale: All downhill.


Maurice Lamontagne: The hon. member should be aware of that. Yesterday in committee the hon. member for Brandon-Souris asked me to table the annual report of the Post Office for 1976-77. I told him that it had been tabled on May 17.


Walter Gilbert Dinsdale: Five months late.


Maurice Lamontagne: That does not matter. He did not know it had been tabled. He should not complain that he does not have the information when he does not know about it.


Walter Gilbert Dinsdale: You do everything in secrecy.


Maurice Lamontagne: The hon. member is demanding a document which is almost three years old and whose application to current realities at Canada Post Office has now only limited relevance.

As I said earlier, this report was a confidential study on attitudes at various management levels of the department. In fact, this report was entitled "Climate Analysis Report- Rapport d'analyses du climat de travail." If that confidential document were made public it might embarrass some components of the Post Office Department that did not operate properly at the time, for various reasons.

We do not try to hide the fact that we have problems. 1 described a moment ago the magnitude of this problem. But General Motors have problems, Bell Canada have problems and Air Canada have problems.


Mr. Bechard:: And the Conservatives have problems.


Maurice Lamontagne: The Gallup poll shows this.


Walter Gilbert Dinsdale: Let us have an election.


Maurice Lamontagne: This morning's poll showed that the Canadian people do not think that the Post Office is that bad. Some people thought that part of the reason the polls are down is in the Post Office. Things in the Post Office are improving. The improvement in the Post Office has probably helped boost the polls.

Mr. Speaker, I would not like a section or a division of the Post Office Department to be subjected to pressures following a report from outside consultants. May 1 remind the hon. member that we sincerely worry about the morale of postal workers. The disclosure of some parts of that report would certainly prejudice their morale. Furthermore, the Hay report

is merely one report among several submitted by inside or outside consultants on postal operations. It is not the most important and certainly not the most recent. Why this obsession concerning the Hay report? Is the hon. member aware that there have been more recent studies on the Post Office operations that might inform him more adequately? I might mention that a former president of the major postal workers union last week published a summary of the main events that occurred in the Post Office Department over the last 20 years. He probably felt that the Hay report was not so important as he did not mention it in his book. I am convinced that this former union president is aiming at the well-being of the Post Office as sincerely as hon. members. Maybe it is in the interest of the hon. member to use the Hay report to act as the champion of freedom of information for Canadians?
It is obviously a very noble gesture to fight in defence of freedom of information, of the right of the public to know what is going on. But to urge the publication of information that can destroy the career and the morale of a person is another thing-


The Acting Speaker (Mr. Turner):: Order, please. The hour provided for the consideration of private members' business has now expired. With the consent of the House, perhaps we could go back into committee of the whole before the Chair calls it six o'clock. Is that agreed?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The house resumed consideration in committee of the whole of Bill C-56, to amend the statute law relating to income tax and to authorize payments related to provincial sales tax reductions-Mr. Chretien-Mr. Turner in the chair.
The Deputy Chairman:: Order, please. It being six o'clock 1 do now leave the chair until 8 p.m.
At six o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
On clause 1-Employment at special work site or remote location.
June 8, 1978
Mr. Huntington:: Mr. Chairman, 1 was very interested in the exchange between the hon. Minister of Finance and the hon. member for Yorkton-Melville, particularly on the subject of sales tax. I should like to offer a few remarks in that regard.
Before my efforts are finished in committee of the whole stage on Bill C-56, 1 should like to have an opportunity to make a few comments on the research and development items within the bill, because I think there is some poor advice and arithmetic behind the recommendations of the Minister of Finance.
When good legislation is presented to the House, it has no trouble receiving fair and good examination from the opposition and has no trouble getting through the processes; but when the government mixes good items with bad items in legislation, as it has in this bill, then its only resort to get on with the business of the House is to invoke closure, so it thinks. Closure was a very poor decision in this case. In the last hours of consideration on second reading before the House, some 1 5 government members rose to speak on the bill, using up the time of the House in the period which is no longer called closure but is known as time allocation. As long as the government continues to mix its legislation with good and bad items, 1 suggest the official opposition will continue to do its duty by opposing such activities.
One thing which really shocked me for the first time in the four years I have been here was the statements made by the Minister of Transport the other day. He came here, disrupted the process and the proceedings on this bill and moved into allegations of the official opposition spreading lies and using its offices for the creation of hate within the country. I want to express my disgust at that type of tactic and at that use of a bill of this nature.


Some hon. Members:: Hear, hear!


Arthur Ronald Huntington: Separatism exists in Canada today and separatists are in office in the province of Quebec because the people of that province rose against a government which had allowed levels of patronage and political behaviour to go beyond the bounds acceptable to Canadians.


Some hon. Members:: Oh, oh!


Arthur Ronald Huntington: That is what caused the political turmoil in this country today.


Charles Robert Turner: Order, please. 1 suggest the hon. member get back to the bill under discussion. Bill C-56, clause 1.


Arthur Ronald Huntington: Mr. Chairman, I am right on the bill and right on the clauses of it.
Also 1 was very interested in an article which appeared on page nine of the Ottawa Journal dated Tuesday, June 6, 1978. The article contained a good picture of the Minister of Finance with his Irish jaw right out, his lips firm and his characteristic strength showing. The article is entitled: "Private sector lacks initiative, Chretien says". The Minister of Finance is quoted
Income Tax Act
extensively throughout the article. He compared the tax system in Canada to the systems of other industrialized countries and the United States. In part the article reads:
Canada's over-all tax burden as a percentage of gross national product was 32.7 per cent in 1977 compared with 30.8 per cent in the U.S., he said. That is in the middle rank of industrial countries.
Corporations pay a lower level of taxes on their income in Canada than in the U.S., he added, while personal income taxes are higher here.
"Corporation income tax as a percentage of book profits totalled 35.2 per cent in Canada last year," Chretien said. "In the U.S., it was 40.2 per cent."
"In the manufacturing sector, the typical Canadian corporation enjoyed an advantage of almost 10 percentage points."
Chretien added that indirect taxes, such as the manufacturers' sales tax and custom duties, are relatively high in Canada. But the sales tax is generally not charged on exported goods and therefore favours firms competing internationally-
One has to ask the Minister of Finance, after a statement such as that, with the kind of publicity we can all see in that headline treatment, why so much entrepreneurial capital and industry is leaving Canada and this beautiful environment the minister so aptly described. There is something wrong. It says right here that our tax brackets and everything else are right in line. Something has to be wrong when hundreds of millions of dollars of entreprenurial capital are leaving this country. This represents industries that could create payrolls in Canada in the right environment. They would stay here and be fostered and nurtured and add strength to this country. What is happening to the fibre in Canada if all that the minister stands up and says as far as tax brackets are concerned is "Right on" and "We are in the middle rank"? Something is wrong.
The drafters of the tax legislation in this country are just not familiar and have not had any experience with the world of work. They still do not realize that wages in this country, no matter who is paying them, come from one basic function, and that is a function of adding to the value of goods.
The other thing that has happened in this country is that since 1952 when the Benson tax cut came in and the economists that were part of the Carter commission got their way under a minority government, supported by the NDP, the decision-making base of the business sector in Canada has been destroyed. Ever since 1972 all this governent has been able to do is monkey-wrench the tax act, change the rules of the game and try to correct the inequities that legislation brought into place. That is the tragedy in Canada today. There is no decision-making base for the private sector.
We hear the Prime Minister, the Minister of Finance and other members in the government party mouth platitudes about service to the private sector and the small business sector. We have just heard a great announcement on the part of the Minister of State for Small Business about all the things they are going to do for small business. Why is that necessary?
The government has changed a basically simple tax act to one of the most complicated monsters in the industrial free world. That is where our problem is. We keep having these amendments come in, these ways and means bills and budget speeches, such as we have seen in Bill C-56, and all they do is

June 8, 1978
Income Tax Act
correct errors, change the decision-making base and encourage companies in the private sector to create holding companies and trust companies to take advantage of some careless loophole such as the one the drafters of the last mini-budget put into place, all of which creates tremendous waste and loss of working capital in the business sector, and all because of bad drafting, bad legislation and more ad hockery. That is the problem we are facing in Canada today.
1 was rather surprised and pleased when the budget statement came down on April 10 and I saw that the government was finally going to do something about research and development costs. In that budget statement the minister said:
The effect would be to reduce a company's after-tax cost of each additional dollar spent on R & D to as low as 20 cents.
Then the statement goes on to say in the next paragraph:
Because of the incremental nature of the new incentive, its impact on tax revenues will depend upon the extent to which industry responds. However, it is estimated that in the initial years the reduction in federal revenue will be about $50 million a year.
I know you cannot say somebody has deliberately misled the Canadian people or members of this House, Mr. Chairman, but if this is not misleading then the advisers and the people working with sharp pencils behind the ministers had better sharpen up. Because there is no way you can find anything through an in depth analysis of this part of either the minister's statement or that other program announced by the Minister of State of Science and Technology, that will support this statement about reduced revenue of about $50 million a year.
I know the minister too well to suggest other than that he meant this sincerely, but he had better do something about the people behind him who are giving him that kind of advice and figures on that subject. Because there is nothing one can find through an analysis of the situation that would lead to that kind of a conclusion.
I am just searching here for a few figures I should like to point out. First of all, I should like to pose this question. On what basis does the minister think the new incentive is going to produce a higher growth rate than the 10 per cent per annum that is in place? I would like to ask why the government killed IRDIA, a program that was in place, had had good experience, and was showing a good growth pattern in Canada. What was it that caused the government to get this thing finally through all its birth pains and then to abort it absolutely just as the industry was finally learning how to use it, even though there were some faults, and the Department of Industry, Trade and Commerce was starting to work in some modifications? Why was it all of a sudden completely aborted?
This seems to be the pattern of this government. It goes out into the world and up into the north with programs, and just as they get going the government pulls the rug out from under them and starts something new, so that there is a totally endless wave of confusion on the part of the public. Is that policy deliberate? If it is, it is causing an awful lot of dry rot in the economic hull of this country.


An hon. Member:: That is not what the Gallup poll is saying.


Arthur Ronald Huntington: We talk about being an industrial country. I have a table here which indicates to me that when we make a comparison of the research and development effort in Canada with other OECD countries we are fourteenth on the list. We rank behind Italy, Finland and Denmark. Only behind us do we find Ireland and New Zealand. What is wrong? Something has to be wrong when we consider the resources and the people we have. We used to be expansionary, we used to be growing and we used to be hard working. What has happened to these characteristics that delivered us to one of the most enviable standards of living in the world?


An hon. Member:: A bad opposition.


Arthur Ronald Huntington: You are on your butt again. I saw you up on your feet this afternoon for the first time since I have been sitting in this House.


An hon. Member:: What is your definition of "butt"?


Arthur Ronald Huntington: You just talk from the seat of your pants all the time.


Charles Robert Turner: Order, please. 1 would invite the hon. member to address the Chair.


Arthur Ronald Huntington: Thank you, Mr. Chairman, for asking the hon. member to get back under control so we can carry on with the debate.
If we look at industrial research expenditures from 1963 to
1977	we will find that, as a percentage of gross national product, in constant terms we peaked out in 1965 at 0.52 per cent. In constant dollar terms in that year we spent $363.3 million. Then from 1965 on there was a steady decline, right down to 1977. As a percentage of gross national product that year-that is, last year-we only spent 0.4 per cent of gross national product on research and development. We have seen a stagnation in respect of research and development funds from 1971 right through to 1977 in real terms, going from $467.5 million in 1971 to $497.9 in 1977.
There have been three opposition days in this House in the life of this parliament in reference to that very subject, and we did not get one ounce of effort until we reached the pre-election days. Just how honest are the statements of the Minister of Finance? How much truth is in the statements of the Minister of Finance and the statement of the Minister of Science and Technology in the presentation that they have given the House and the people of Canada in this area? 1 will tell you, Mr. Chairman, how honest and truthful these statements are. We have been led to believe that this is a great program with a great bonanza for the small business sector and the industrial sector of Canada. But as I examine it and as I am advised on this subject, if we look at the large firms and at the standard deductions, R and D cost a large firm 58 cents for every dollar spent on research and development in 1976; in 1977, with the investment credit of 5 per cent, the amount was reduced to 55.1 cents for each dollar spent on research. In
1978	the government came through with a 50 per cent additional allowance, which reduced the cost of each dollar for
June 8, 1978

research and development for a large firm to 35.15 cents, a drop of 20 cents on the dollar.
The thing that I find staggering, Mr. Chairman, is that under the 1RD1A program back in 1975 a large firm spending a dollar on research had a cost of only 33 cents. So we have the government going through all this flimflam of announcing this program in the budget and then announcing it in Bill C-56, and having the Minister of Science and Technology announce a new program for research and development, when what they have announced for large firms is not as good as what they cancelled back in 1975. This is shameful, Mr. Chairman.
1 would like now to look at small firms and how they have fared under this research and development program, and shed some light on the equality that this government has given small firms, for which they have created a minister of state to supervise. The small firms get an absolute hosing in terms of equality. Under the standard deduction in 1976, on a dollar spent on research they had a 75 cent cost because their tax rate was 25 per cent. Under the 5 per cent investment credit of 1977 they had a 71.25 cent cost, a reduction of 33A cents. Then in 1978 with a 50 per cent additional allowance on each dollar spent on research they had a true cost of 59.38 cents, giving a reduction of 12 cents.
Again, Mr. Chairman, let us examine the flimflam that the Minister of Finance and the Minister of Science and Technology have imposed on this House, the people of Canada and the business community of Canada. The flimflam is that in 1975 under 1RD1A a small business spending a dollar on research had a cost of only 50 cents, yet under this budget, this bill, this minister's announcement, he has a cost of 59.38 cents. He was 9.4 cents better off three years ago under IRD1A. That is the kind of flimflam that causes most of us trouble when dealing with the legislation brought down by this government.
Let us now look at the value of the new tax incentive for industrial research and development. It is estimated that research and development performed by industry in 1977 amounted to $846.4 million. Federal government grants against that were $214.8 million. Thus, the net research and development funded by industry was $631.6 million. The rate of growth of industrial research and development from the years 1971 to 1975 averaged 10.3 per cent. That is just fantastic. That rate of growth merely matches the inflation component of this beautifully managed economy.
In my opening statement 1 mentioned R and D had gone as low as 20 cents on the dollar. The value of the new incentive for the 1978-


Charles Robert Turner: Order. I regret to inform the hon. member that his allotted time has expired. The hon. member for Portneuf.


Arthur Ronald Huntington: I will be back.
Income Tax Act


Mr. Bussieres:: Mr. Chairman, I will be very brief. I must say that what surprised me at first when Bill C-56 was introduced was the new procedure followed by the Minister of Finance (Mr. Chretien) who sought the advice of the provincial ministers of finance. At a time when so much is said about the new spirit of Canadian federation, I think this is an indication of the flexibility shown by the Canadian authorities towards the provinces. It was a new initiative and I hope this example will be followed from now on. And if the experience was deemed unfortunate, because the minister of finance of one of the ten provinces was mean and showed bad faith, nothing will prevent the government from seeking such advice to prepare future budgets.
Mr. Chairman, throughout the debate that has been going on here over the past few weeks, the source of the Quebec finance minister's lack of good faith in his colleagues of other provinces, the other ministers of finance and the Minister of Finance of Canada has become quite obvious. He has never accepted a compromise that would have given Quebec the same advantages as other provinces. For instance, the Minister of Finance suggested that the Quebec minister of finance reduce the sales tax by 2 per cent and that he use the 1 per cent, which Ontario for example uses to bring the sales tax down to 3 per cent, that he apply that 1 per cent on the four sectors where he decided to abolish the tax, but he never replied to that compromise. The only thing is the letter which was tabled today and which, in fact, is not a compromise comparable to the measures adopted in the other provinces regarding the sales tax. Mr. Chairman, I say that is selfishness and bad faith. Quebeckers, more particularly members from Quebec who support the Government of Canada on this issue are not showing, as could have been implied, a lack of courage but on the contrary an understanding of the life of their country which is essential if we are to continue to preserve this country.
I was very surprised to hear the hon. member for Yorkton-Melville (Mr. Nystrom) this afternoon as he seemed to say that the consequence of that situation was a confrontation between English-speaking Canadians and French-speaking Canadians. He blamed the Minister of Finance of Canada (Mr. Chretien) for it. One cannot agree with such a fallacy. Indeed, the conclusion at which the hon. member arrives is not at all in accordance with the premises he laid down or the premise also dictated by reality. If one looks at the facts, if one looks at what happened, one reali7.es that the one who is keeping things from going smoothly is not the Minister of the Finance of the Government of Canada but the minister of finance of the province of Quebec who at no time would come to a compromise, a compromise that the ministers of the other provinces had accepted to promote manufacturing production in this country. I am very surprised that the hon. member reached those conclusions.

June 8, 1978
Income Tax Act
Mr. Chairman, I would like to repeat that that initiative by the Minister of Finance appears to me as an excellent example of the co-operation that is required in the preparation of budgets in future in this country, a co-operation that was reflected in his consultations with the ministers of finance. Furthermore, the selfishness and the bad faith of the Quebec minister of finance led to a situation that is only a purely superficial confrontation as basic common sense suggests that we are right. Finally, I really do not see how the hon. member for Yorkton-Melville (Mr. Nystrom) could conclude from those facts this afternoon that a confrontation between Anglophones and Francophones had been arranged as this was in fact rather an attempt to bring all provincial ministers of finance to participate in part of the budget of the government of Canada, a part that was intended to stimulate the demand by Canadian consumers for Canadian-made products. We wanted this demand to involve all products manufactured in Canada. Never, Mr. Chairman, has the Minister of Finance of Canada denied the minister of finance of the province of Quebec the right to abolish completely the sales tax on any item whatsoever in his own budget. But he has talked about the chance that the other provinces give our manufactured products by putting down the sales tax by 3 per cent. Let us give them that chance also by putting down the sales tax on all items by at least 2 per cent and the 1 per cent that some of the other provinces bring to lower the sales tax by 3 per cent, let us apply that to the fields where we want to abolish it completely.
I think that compromise was quite reasonable and acceptable and the minister of finance of Quebec should be ashamed to have been so stubborn in his position, like some members of the opposition who got entangled in supporting it.


Mr. Ritchie:: able to take advantage, whatever it is, of the 3 per cent tax cut in Manitoba, Saskatchewan, B.C. and Ontario, while to a considerable extent the province of Quebec was able to protect its industries against goods shipped in from other provinces. The situation was no different than it has been in the past.
I would like to say that the minister of finance of the province of Quebec seems to have done exceedingly well for his province. He has protected industries which his province is able to take most advantage of and which do well, namely the furniture industry and the clothing industry. Industries in the province of Quebec have been able to go across the country and take advantage of whatever a 3 per cent sales tax in Ontario, Manitoba and the maritimes might bring. In return they have been able to get out of the federal treasury what they were entitled to on the basis as if the pay out of 3 per cent on the sales tax across the board had been implemented. In the situation we are concerned about as to how the tax pay-off will be made to the citizens of the province of Quebec, it does not seem to be terribly important. The citizens will receive it, and presumably the Quebec finance minister will have to find a way to tax back that portion that is paid to citizens in his province. I suspect this is the reason for the suggestion that some means be worked out for 1978 taxes so that we can arrive at a modicum which will not upset citizens. When people receive a cash payment they do not like to be taxed on it.
We have the situation where the Minister of Finance proposed to nine provinces a certain type of sales tax cut, in return for which he gave a certain amount of money. They accepted this, though for most of it not with any great alacrity and not with any great feeling that it was the right thing to do. After all, it is an invasion of provincial rights to some extent. I agree that the fields of unemployment insurance, health programs, welfare programs and education, fields which were given to the provinces, have been invaded by the federal jurisdiction over the years. They have been invaded because we did not allow enough tax room for the provinces to do those things they should have.
The Minister of Finance mentioned the other day, I believe, that he finds the provinces are spending more money than the federal government because of the change in tax revenues. It should be realized that the provinces' assumption of much of the tax load and spending has come about not because it has taken over from the federal government, but because in the fields of education, health and welfare the provincial governments have taken over from the private sector, and these fields alone contribute some 60 per cent to 70 per cent of the total provincial budgets. In this situation it has been bad business for the federal government to meddle in the sales tax, which is one of the few taxes the provinces have available. The BNA Act gave them only direct tax. There is not much scope for these when they are analyzed.
While it may have been a good thing economically to have the sales tax cut, one doubts whether the legacy of distrust that it will leave will contribute much to Canadian unity. In any event, the province of Quebec has won one over the Minister of Finance because the province has received its
Income Tax Act
money and has made tax cuts which are favourable to that province and to its industries. To argue about in what manner or by what means the $186 million should be paid to that province seems to be largely academic.


Benno Friesen: Mr. Chairman, we are seeing a very unusual happening in the House. We are debating a bill which the government pretends it wants to see passed as soon as possible, and yet it has the audacity to put up 15 speakers during second reading debate to the 17 speakers put forward by the members of the official opposition-


Arthur Ronald Huntington: And then bring down closure.


An hon. Member:: The guillotine.


Benno Friesen: -and then bring down closure. What a contradiction. It is not closure, I would remind the hon. member for Capilano, it is now called time allocation. What this government always does when it runs out of excuses is change the name. I do not know what PR company they hired to do this, but it always looks a lot better if they change the name. It is just as the Prime Minister says; he is in favour of democracy. By "democracy" he means: "Throw me out if you do not like what I have done". Whether or not he has kept a promise that he should have kept in the first place, that is his new definition of democracy.
I am a little amazed at the government's policy in taxation. It seems to me that we in this country are moving dangerously in the direction of a taxation policy which sees every missed opportunity as a tax loophole-


Mr. Epp:: Confiscation instead of taxation.


Benno Friesen: -that the government has to fill. The hon. member for Provencher says it is confiscation instead of taxation. That really is the direction in which we are going. So every time there is a missed opportunity the government gathers all of its staff resources together to see if they can plug that extra hole for fear that Joe Citizen has a few dollars left over. The parliamentary secretary is sitting there and joshing at all of this. What he is doing is attempting to pump the public to become dishonest citizens, because it is becoming a contest to see how much money will be left over at the end. It is a contest between them and the government. As soon as the government discovers there is something it can possibly latch on to, then Joe Citizen has to find a way of beating it. If we do not watch ourselves, we will find ourselves in the impossible position where we will have a whole generation of people who will see that they have, in order to eke out an existence, to beat out the government.


Ramon John Hnatyshyn: Bring proposition 13 on!


Benno Friesen: Yes, or bring proposition 13 on and see another tax revolt.
I have a few examples I would like to bring to the attention of the parliamentary secretary since the Minister of Finance is not here.

June 8, 1978
Income Tax Act


An hon. Member:: He is here.


Benno Friesen: He is here? 1 am sure he is listening to everything he can.


An hon. Member:: With both ears.


An hon. Member:: Pursed lips.


An hon. Member:: And open arms.


Benno Friesen: I know the Minister of Finance wants to talk about clause 1 and I thought that once in a while we should refer to it.


Mr. Lumiey:: Hear, hear! After three hours.


Benno Friesen: I do not want to disappoint the hon. member completely, but I would like to make passing reference to clause 1. If the parliamentary secretary will notice, it has reference to a person at, and I quote:
-a special work site at which the duties performed by him were of a temporary nature and from which, by reason of distance from the place where he maintained a self-contained domestic establishment (in this subsection referred to as his "ordinary place of residence") in which he resided and actually supported a spouse or a person dependent upon him for support and connected with him by blood relationship, marriage or adoption, he could not reasonably be expected to return daily to his ordinary place of residence,


An hon. Member:: Ask them what it means.


Benno Friesen: I do not know whether they could tell us. But there is one group of people who would fit this description and who have faced the wrath of the income tax department every year. They are the truck drivers. Truck drivers are now expected to save every little receipt they get in the local coffee shops as they drive across the country. And if they exceed $9 they can get, maybe, a $12 or $15 deduction on expenses. I can just see every truck driver having a little filing cabinet in his cab in which to keep receipts from coffee shops. There are really some ridiculous connotations for truck drivers. The government are expecting truck drivers to save all receipts, but civil servants travelling across the country get $25 per diem. Somehow truck drivers are expected to save as much as possible, but members of parliament, members of the Senate and bureaucrats should spend as much as possible. It doesn't add up. It savours of discrimination.
It is one thing to drive in your local community where expenses are commensurate with the area, but what if you are a truck driver moving into, say, northern British Columbia or the Yukon or the Territories. You cannot always stop at a local greasy spoon to save money. Meals cost a great deal of money in those areas. We are asking these truck drivers to save receipts, and the implication seems to be that they are going to eat too much and live too high, possibly at the expense of some loss of revenue to the government.
1 turn to another aspect which has come to my attention because I have a large number of employees of airlines in my constituency who are beginning to write to me on this subject.

The government seems to have a plan to put a tax on the airline passes given by the airlines to employees. I suggest to the Minister of Finance that here he is getting into dangerous territory.
I have already asked the Minister of National Revenue by letter how far he proposes to go with such a policy. How far is he willing to go in taxing these proposed perks? Does he propose to concern himself with every store clerk in Canada who gets a 10 per cent reduction on every piece of merchandise bought for personal use from department stores and other places where they work? Does he propose to estimate how much they save in a year and put a tax on it? Take one example which I brought to the attention of the Minister of National Revenue. Suppose, for example, you are a medical doctor and your wife is about to have a baby and one of your colleagues delivered the baby without charging a fee because he was a personal friend. Is it intended to impose a tax on that saving?
Then there is the position of the voluntary firefighter across Canada. For the past ten years or so they have been able to claim a tax deduction of $300 a year. Numbers of us have written to the Minister of Finance saying it is time for an adjustment to be made to bring the tax more into line with current realities. But the minister says he does not think so.
These are just a few items which occur to me, items which need amendment or further consideration. In so many of these respects the taxation policy is not only contradictory but is setting dangerous precedents and inviting habits among the taxpaying public which may be regretted in the future. It is inviting people to try to get as much as they can out of the treasury and to cheat on their taxes because there is so little over after the demands of oppressive taxation have been met.
All that is by way of introduction. 1 will be back later.


Arthur Ronald Huntington: Mr. Chairman, when you intervened to tell me my time had expired I was talking about the value of the new incentive for industrial research and development. I was drawing attention to the fact that research and development performed by industry in 1977 cost $846.4 million, and if you subtract the federal grant component amounting to $214.8 million the net value of research and development funded by industry is $631.8 million.
The minister in his budget speech mentioned R and D costs at the level of 20 cents on the dollar. But if you look at the rate of growth of research and development you will find that from 1971 to 1975 the rate of growth was 10.3 per cent per annum, which in real terms only matched inflation. It was a no-growth situation in terms of constant dollars.
If you look at the value of the new incentive for 1978 at 20 cents cost per dollar invested in research, and you take the $631.6 million research funded by industry at a growth rate of 10.3 per cent at 20 cents on the dollar, you arrive at a figure of $13 million. Yet the Minister of Finance in his budget address stated that, according to his estimate, in the initial years the reduction in federal revenue would be about $50 million a
June 8, 1978

year. That is $13 million-$13.01 million to be closer-versus the $50 million claimed by the Minister of Finance.
If one takes a very optimistic value of the incentive, say 15 per cent per annum growth rate, and takes the figure of $631.6 million invested in industry at a 15 per cent growth rate- which is almost 50 per cent greater than the actual rate from 1971 to 1975-at 20 cents on the dollar you would come up with a figure of $18.95 million. Even that, Mr. Chairman, is a long way from the $50 million presented by the minister in his April 10 budget address.
If, on the other hand, one took the figure of $50 million advanced by the Minister of Finance and extended it on the basis of a growth rate of 20 cents on the dollar, one would have something like $250 million. Then if you divided that by the 631.6, one would have an actual growth rate of 39.6 per cent per annum, a figure which is absolutely impossible.
In the simplest terms 1 can muster within the environment of this debate, I say that the $50 million figure of the Minister of Finance in his budget address and in his presentation to parliament and the Canadian people is just complete flimflam, if I may use my colleague's term.
Another aspect of the research and development program which troubles me is that the Minister of Finance completely ignored all the representations from the industrial sector of this country. There has been much talk in recent months by the government side and by the Prime Minister that the government is going to do all kinds of things for the private sector to pull this country out of the doldrums and get the one million unemployed people back to work. We have to get the private sector working.
If that is so, why does the government not listen to the private sector once in a while? Why does the government listen to academics in closets in the ivory towers of government, those people who have come from the land of Academe? They have worked on campuses and established themselves with honours degrees and secure tenure, and then moved as experts in their fields up here to the halls of government. They have got themselves into isolated environments where they draft legislation and impose upon the people of Canada the legislation which comes down through the government into this House. There is no input at all from the private sector. Why did the government not listen to the private sector when it favoured a 25 per cent tax credit without increments?


Mr. Maine:: Hear that, Harvey?


Arthur Ronald Huntington: An hon. member opposite is giving the needle to my colleague, the hon. member for Calgary Centre, who is an academic. However, let me tell the House that he is an academic with great experience in the world of industry. He is well respected in the world of industry and makes valuable contributions to it. He has not isolated himself in the sterile environment I am talking about where we have drafters of legislation who have had no experience out in the world of work or in the world of adding to the value of goods. One of
Income Tax Act
the great problems the country is facing today is the lack of experience of academic drafters of legislation.
The hon. member shakes his head. Let me take him and waltz him into the Treasury Board. That is a place to end all ivory towers, believe me. There we can find very respected individuals, and 1 respect them too. They are very well qualified individuals. They are responsible for allocating the tax resource of Canada, and they look after the priorities set on the tax resource by the cabinet. Here we have these gentlemen in this sterile environment allocating this resource. They have all kinds of problems, and they are tearing their hair out because too many departments want too much. They are hard, tough, mean people as far as the departments, agencies and Crown corporations of government are concerned.
It has been my experience that those gentlemen, as respected as they are in their fields, have absolutely no concept of what the taxpayer in this country has to go through. The taxpayer in this country is accountable to the tax collector, but the people who spend and are responsible for the use of the tax resource in this government are on a cash-flow accounting basis and have been accountable really to no one. That is one of the dilemmas this country is in today, and it is a cause of concern for many people and one of the pressures this government is under.
If the people who allocate the tax resource had the same degree of training that people in the private sector have had to go through, there would be a lot more care and attention and much more accountability demanded by the people and by the government. Some of us in this House are certainly working on the word "accountability" right now.
I interrupted what I was saying about research and development. I take issue with the minister's $50 million figure. My arithmetic says that there is no way that there is truth in that figure, and that the figure is between $13 million and $18 million at the most. 1 think the people behind that other arithmetic should have their heads examined or should be on the carpet in front of the Minister of Finance tomorrow morning.
One other thing about research and development which troubles me is where federal government expenditure on research and development is directed. Looking at the intramural component-which means the in-government component- we find that in the fiscal year 1976-77 federal government expenditure in the field of natural sciences was $460.8 million. In the fiscal year 1977-78 it was $511 million. In the fiscal year 1978-79 it is $567.1 million, for an average growth rate of 10.9 per cent per annum. That is just a little bit ahead of the inflation component.
However, if we look at the extramural expenditure-that is, organizations outside government, industry-in 1976-77 expenditure was $222.3 million. In the fiscal year 1977-78 industry got $214.8 million. What happened there? In fiscal year 1978-79 industry gets $217.6 million, for an actual loss of 1.1 per cent per annum. The university component went up 10.4 per cent per annum. In the "other" category, expenditures have gone up 8.8 per cent per annum.

June 8, 1978
Income Tax Act
The point I want to make is that this government, which is saying it is doing everything it can to stimulate the private sector and industry in this country, has actually spent less in that sector, and I think the government should be severely criticized for that.
One other point on this allocation which troubles me is the fact that unsolicited proposals for industry got $1.5 million. The science and technology employment program for universities got $3 million. The program for industry laboratory projects got $5 million. For technical information from the National Research Council the government paid $.35 million. The total for "industrial" was $6.5 million. Universities got $15 million in total, and the intramural government sector got $7.5 million. However, of that $6.5 million for industry, $5 million was delivered to intramural programs, so industry ended up with $1.5 million.
I think this is where we have a very serious problem in the area of research and development. There is a problem not only with the program announced by the Minister of Finance but also with the program which was announced by the Minister of State for Science and Technology the other day.
Early in the debate today there was an exchange between the Minister of Finance and the hon. member for Yorkton-Melville about sales tax, and I would like to say a few words about that. 1 am in the importing and distributing business in Canada. I have been extensively involved in costing and in the distribution of consumer merchandise, and 1 can tell hon. members that one of the things which interferes with the purchasing power of the Canadian wage dollar is taxes which are collected at the bottom of the pyramid. 1 am speaking of the 12 per cent federal sales tax.
1 can show hon. members that if there was no sales tax collected at the manufacturer's level, an item which retails for $5.60, rounded out to the psychological price of $5.59, would retail for $4.95. I really think that if we are going to start to improve the purchasing power of the wage dollar, we in this House have to take a serious look at the negative effects of the federal sales tax on that purchasing power.
Hon. members opposite might say there could be a loss of revenue which must be compensated for, and I agree. I think we could collect that in another way very easily, but I will save that for another point in this debate.
One of the other things which has delivered us into the national dilemma we are in today is that 55 per cent or 60 per cent of our federal budget is involved in statutory payments, in other words, there is no way to cut, mend, allocate or manage because 55 per cent to 60 per cent of our budget goes to transfer payments to the provinces to handle the social services we have built into the structure of Canada.
I do not think there is a person in the House who wants to see those social services threatened. But one of the weaknesses we have is that people, because of political gains, have got used to expecting something for nothing. When you compare one nation to another historically, you find that with high transfer

payments you start to have problems with the collection of taxes with respect for taxation and with respect for the spending of that tax dollar.


Monique Bégin: Give us an example.


Arthur Ronald Huntington: We have seen, my dear, the example where you had to go into block funding because you had to put under control those provinces which spent money on the basis that the dollar they spent was matched by the federal government, and that got the Department of National Health and Welfare into a budget problem. It was a transfer of payments problem, and there was a runaway situation which the government had to put under control.


Monique Bégin: Of whom are you talking? Name the province.


Arthur Ronald Huntington: If we could give the people of Canada the measure of the services they demand from government in terms of their own purchasing power, we could start to put the situation under control and have an accurate measure of just what it is they want so that they could measure its benefit in terms of their own purchasing power. It is difficult for any one of us in the House to think and talk in billions of dollars as we are doing. We lose track of reality. But if you look at the cost of the service in terms of somebody who is spending $150 a week, and all of a sudden some political party comes along and promises medicare and you find you have $1 billion or $2 billion more in expense and more problems in the tax collectors' over-all situation, you should be able to measure whether you want medicare or denticare in terms of your present costs or in terms of what it will cost you if it is provided by the government.
Somehow or other in the next decade this chamber will have to meet that challenge. We have to convert the cost of social services into terms that can be measured by individual spending power. Let us say that Mrs. Johnny Canuck is spending $100 a week and someone promises a service that will take $2.50 away from that. She knows that her present cost is $1 or $1.50. She must be able to measure this, not in terms of the millions of dollars it will cost the government, or in terms of dreams, or in terms of "what does it matter, the government will give it to us". Somehow or other we must resolve this dilemma in the sales tax debate. If we could put the cost of our social services in this country in terms of measurement for each individual user or drawer of that service, we would start to turn our problem around.
I think the answer is in the sales tax. I was very interested in the exchange between the minister and the hon. member for Yorkton-Melville and the comments that were made in this debate earlier, because 1 suspect you are starting to move to the end user tax. If we had an end user tax with no exemptions, dedicated to the supply of health and welfare services to the people of Canada, we would then have a measure in terms of the value and cost of that service to them. No matter what his pay cheque, a person could measure the value of a given service and he would have to know that there is a cost. If you start to think in those terms or put your experts into studying
June 8, 1978

those terms or publish a national white paper in those terms, you could start to make a solid correction to some of the very serious problems and attitudes of the government and put some responsibility into the political forces in this country.
I think that the comments that came from the hon. member for Yorkton-Melville and the Minister of Finance today are very significant. This is an area in which I would certainly like to participate in the years ahead in trying to resolve the very serious problem of providing services at a cost that can be validly measured.
[ Translation]


Joseph Adrien Henri Lambert: Mr. Chairman, the House is now studying Bill C-56 in committee of the whole. At the beginning of this study this afternoon, the spokesman for the official opposition and the Minister of Finance (Mr. Chretien) seemed to be at grips with each other, to oppose each other on totally different principles. However, a few moments ago, they both seemed to be in complete agreement and, to repeat an old expression often used in the House, it was the same old gang. They leave the impression, Mr. Chairman, that they are opposed on principles, but when the time comes to take a decision they reach agreement. It seems to me they both obey the same commander, a commander we do not know, a commander who is not in the House, a commander whose authority is strong, who is outside the House and yet is able to command not only the old parties referred to as the traditional parties of the House, but also to parties in other legislatures, in other legislative assemblies. Mr. Chairman, I have already expressed my views on Bill C-56 on second reading or during the debate on the amendment moved by the leader of the New Democratic Party. At that time, Mr. Chairman, 1 said that when the government wants to pass legislation likely to serve the interests of high finance, it always manages to include, as in the case of Bill C-56, proposals which will please all members of parliament and serve at the same time the interests of ordinary workers.
This is the case of Bill C-56. It contains provisions on which we agree, but it also contains a provision on which we are in complete disagreement because it goes against our constitution, our constitution that we must obey and follow as long as it is not replaced by a totally Canadian constitution, made by Canadians, for Canadians and for the whole of Canada. 1 already had the opportunity to comment on this matter during a debate that took place in 1977 and which was brought about by a motion entitled "National Unity". At that time, at the very start of the debate, 1 immediately emphasized that a debate on Canadian unity could not produce anything new that would allow hope that Canada would really be the nation of all Canadians, regardless of their language or ethnic origin.
At that time, I said that it was the duty of the 264 members sitting in this institution to work earnestly so that all Canadi-
Income Tax Act
ans could be proud of a true nation that would be called Canada and in which they could live in harmony. Mr. Chairman, 1 value harmony much more than unity because if you want to have harmony within a family, you will also inevitably have unity. The same is true in a parish. The same is true in a county. The same is true in a province. The same is true in a country. And to live in harmony, Mr. Chairman, it must be acknowledged in practice at all costs that all citizens are equal before the law, that every province of our country, all ten of them, should enjoy the same advantages, the same rights, and that they should get the same income to be able to assume their responsibilities.
Mr. Chairman, Bill C-56 is the logical result of the statement made by the Minister of Finance (Mr. Chretien) last April 10, in which he informed this House of the various policies that parliament might implement to alleviate the burden of Canadian taxpayers, to provide every Canadian with a higher income, to enable every head of family, every individual to face his responsibilities. This ways and means motion on income tax was followed by a legislation known as the Bill C-56. After the first reading of that bill, we witnessed the opposition of the Quebec government, a legitimate government, as it was elected following a general election on November 15, 1976. Some saw in the results of that election a rejection by the people in Quebec of a weak government, a government that was shirking its responsibilities in the face of events occurring in the province of Quebec at that time, when there were strikes after strikes in the private sector and in the public sector, and Quebeckers were asked at that election to pass judgment on the administration of our province, the province of Quebec. The people in Quebec chose an alternative government that had not mentioned in its electoral program its basic objective, the separation of Quebec from the rest of Canada.
Mr. Chairman, Canadians and Quebeckers voted then for a good government. They wished to express their desire to have a sound government, able to face its responsibilities and to solve our problems. Since then, Mr. Chairman, that government has made every effort with all kinds of mistakes, of course, like any government which acts, because a government which does nothing does not make any mistakes.
But a government which takes decisions also makes mistakes, as we do here in Ottawa. Mr. Trudeau's government has not only always done the right things; it has also made mistakes but it is through the experience of our mistakes that we learn how to correct them and do something in line with the common good. So, Mr. Chairman, this government, our national government, has presented a budget.
This afternoon I heard a member asking a question, the hon. member for Yorkton-Melville (Mr. Nystrom) who was asking: But if you had to make a decision at that time what would

June 8, 1978
Income Tax Act
have been your position? Mr. Chairman, I do not have to answer for that member, but as a responsible representative I have to answer as a responsible man. I must say that if the same procedure had been applied toward any of the other provinces of my country, I would also adopt the same position as the one I am taking today because we live in the same country, with the same principles, the same responsibilities and I feel quite disappointed today after these two months of debate for we have been discussing that for two months in this House and we have taken strong stands so that the constitution will be respected, so that we can live together in harmony. Today after reading the letter of the finance minister of Quebec which I have read carefully and reread and perhaps not understood completely, though l am willing to read it again, I think we should do our utmost to try to understand it well so that all of us 264 members of the House can adopt a position which will be the one likely to lead us to prosperity in this country and give equal chances to every province. Mr. Chairman, we have been witness to the fact that the province of Alberta, which does not have a retail sales tax and 1 now see the Minister of Finance (Mr. Chretien) listening to me carefully, it will still be getting something from the federal government.


Joseph Jacques Jean Chrétien: No.


Joseph Adrien Henri Lambert: No? Well, 1 would like to be corrected then. Will the province of Alberta not be getting a few million dollars-


Joseph Jacques Jean Chrétien: No!


Joseph Adrien Henri Lambert: -to allow. Here, according to-the Minister of Finance shakes his head. All the more reason for saying that not many in this House understand the thinking of the Minister of Finance and the Prime Minister. About two weeks ago, the Minister of Finance-


Joseph Jacques Jean Chrétien: I have been saying for two months that we are not paying Alberta!


Joseph Adrien Henri Lambert: -the following happened, and please correct me, because it is time to take honest stands. For me, if I have to back out, I say to the Minister of Finance that 1 will do so-


Joseph Jacques Jean Chrétien: It will depend on the questions!


Joseph Adrien Henri Lambert: -in all honesty in order to serve my country well.
If the Minister of Finance has to do the same thing I hope he will be honest enough to do it to serve this country well because in the final analysis we are at a climax. We now have a crucial problem-


Joseph Jacques Jean Chrétien: It is solved-read the letter.


Joseph Adrien Henri Lambert: Mr. Chairman, the Minister of Finance tells me it is solved. He says, read the letter. In the first paragraph-I see the Minister of Finance telling me to read the letter. I am pleased that the Minister of Finance should refer to me as tu. We do it for the Holy Father, so why not for a simple member of parliament?
In the first paragraph, the minister of finance of Quebec says, and I quote:
... our governments disagree .. . and that it would be useless to seek a formula other than the one which was approved by the Quebec government and supported unanimously by the National Assembly.
That is in the first paragraph. Moving to the second paragraph, Mr. Chairman-


Joseph Jacques Jean Chrétien: But the problem is solved.


Joseph Adrien Henri Lambert: You can be sure, Mr. Minister of Finance, that if you can convince us that the problem is solved 1 am going to applaud like mad with my two big hands-you can be sure of that!


Joseph Jacques Jean Chrétien: Mr. Chairman, if I could urge the hon. member to read the letter where he says at the end of the second paragraph on page 2, and I quote:
In this regard, I would like to submit to you a three-part proposal which includes the various elements of solution suggested in recent weeks.
First, there is the $40 million that I mentioned at the beginning for which the government of Quebec qualified. The second paragraph deals with Bill C-56 in which we propose to reduce immediately the income tax of Quebec taxpayers by $85. That is clause '30(b) of the bill now before us. If we could vote tonight on clause 30(6), we would thus accept Mr. Parizeau's first proposal. Mr. Chairman, I am happy to see the hon. member for Bellechasse getting all set to applaud.


Joseph Adrien Henri Lambert: Let us not go too fast, do not ask for anything before I have understood everything clearly. I am not the only one who has not quite understood the policy of the Minister of Finance since April 10. If I were, 1 would bow out, but I am not the only one: many other hon. members did not either, nor did quite a number of editors who wrote whole pages on the matter and have kept asking questions of the Prime Minister and the Minister of Finance.


An hon. Member:: Do not forget Claude Ryan.


Joseph Adrien Henri Lambert: Mr. Chairman, I should like to come back-


Lorne Edmund Nystrom: Do not forget the Gallup poll.
June 8, 1978


Joseph Adrien Henri Lambert: One hon. member tells me that only the Gallup poll understood. Mr. Chairman, in that regard, if you will allow me ... I do not believe in the Gallup poll. Last week, they said white; this week they say black-


An hon. Member:: Or red, rather.


Joseph Adrien Henri Lambert: I trust they do not mean red like in China or Russia: 1 would really feel terrible about that. Mr. Chairman, in any event, political colours do not mean much to me. I would rather have good old common sense any day. We now have a problem that is crucial, serious, and if the Quebec minister of finance... 1 can see the federal Minister of Finance showing the letter from his Quebec counterpart. He seems to be saying: Victory! Victory! He has given in to their proposals. But if that is true, surely someone was not serious somewhere.
There is only one possibility: either the Canadian government, through its Minister of Finance, was justified in making its tax proposal in the April 10 budget, or the Quebec minister of finance was justified in doing the same when introducing his budget, the date of which I do not remember. Both cannot be right at the same time. It is impossible. When he introduced his budget, the Minister of Finance of Canada made some proposals. He said: "We will grant an income tax reduction to Canadian taxpayers to enable them to increase their income, to spend more on the purchase of Canadian goods, to stimulate the Canadian economy and allow our Canadian industries to market their products, thus creating jobs and reducing inflation".
A week or two later, the Quebec minister of finance stated that the federal formula is unacceptable. The federal government wants to reduce income tax and compel the Quebec government to increase its taxes accordingly. Then it will be able to provide advantages to stimulate the economy.
Mr. Chairman, perhaps I do not understand anything and, in that case, the minister understands too well. He came here to sit in this chair. 1 asked him to explain clearly how he could possibly reconcile both policies. 1 would not want Canadians who are watching us on television to believe that we are making fun of their problems, far from it. Mr. Chairman, I want to say seriously that if the proposals contained in Bill C-56 are likely to become an economic solution or to stop inflation and bring harmony within our country, 1 would be quite happy. But why the discussions for two months between two intelligent ministers of finance, or supposedly intelligent, who were ruling the roost?
The federal minister said, "No, 1 don't understand anything". The minister in Quebec said: "The federal minister does not understand at all". At one time I for one was inclined to think that neither understood anything. Mr. Chairman, here
Income Tax Act
is the centre of the problem. I made a promise to the Minister of Finance, 1 will keep my word.


Prosper Boulanger: Now we're going to get it!


Joseph Adrien Henri Lambert: Mr. Chairman, I can understand that hon. members who have nothing serious to say make jokes. They have no opinion to voice. They are simply here to vote, to increase their number when it is time to get a majority. But 1 cannot understand that a sensible man like the hon. member who just made a remark can make silly cracks such as the one we just heard. Mr. Chairman, the problem we are faced with now is one of a financial nature. If there is one hon. member in this House who can claim the opposite, let him rise and I will sit down.
It is a Financial problem for the federal government, for the provincial governments, for municipal governments as well as for individuals.
What is a financial problem then? A financial problem occurs when you have more liabilities than you can meet. That's what a financial problem is. And Canada's problem is a financial one. Yesterday-that is quite recent, Mr. Chairman-yesterday the Minister of State for Urban Affairs submitted to us a formula which will allow some organizations to provide families or individuals with housing suited to their capacity to pay. In order to meet this objective, the Minister of State for Urban Affairs announced very happily to the House that the interest rates would be reduced from 8 per cent to 1 per cent, which represents a 7 per cent reduction. Then the hon. member opposite and, after him, the Minister of State for Urban Affairs, made the following remark: it is a Socred formula, the same kind that applies to developing countries to whom we provide loans with interest rates equivalent to the administration costs involved.
Mr. Chairman, we have often in the House urged the government to give Canadians in our own country the same advantages it is willing to give to people in underdeveloped countries. For once, Mr. Chairman, I must congratulate the Minister of State for Urban Affairs for realizing that the formula we are suggesting is reasonable and useful. He still has just a little further to go in this direction. How is that? Well, in order to get the necessary funds to provide loans with an interest rate to cover just about the cost of administration, we must take advantage of the bank which belongs to Canadians, the Bank of Canada, our own bank. We will be able to do so if we amend the current legislation along the line suggested in Bill C-390, which I introduced in the House and which has reached second reading stage-and I urge the Minister of Finance to bring back this bill in order that we may resume consideration of it, to help the government get out of its financial slavery.
The Minister of State for Urban Affairs has taken the right step, and I commend him for it. He speaks French and English, so he should have no difficulty making the Minister of

June 8, 1978
Income Tax Act
Finance, the President of Privy Council and the Prime Minister understand. He can tell them this: Canadian are glad of this initiative. If only we could make up our minds to get out of this financial ironcollar, to get rid of this machinery from outside the government which controls the financial affairs of our country, I can assure you, Mr. Chairman, that if the government, the Minister of Finance and the President of the Treasury Board had this courage, the government would remain in power till the end of times, because the Canadian people would be delighted to be liberated from their financial chains.
Mr. Chairman, clause 30 of Bill C-56 is at the centre of this whole debate. For our workers gone to work at remote work sites where they cannot maintain a home, a house, normal housing with their families, well, with this bill they will get some benefits. I am entirely for that.
As for the other clause regarding retirement savings plans, 1 have already talked about that-the hon. member for Saint-Denis is making faces. He looks as if he was saying: "Gee! That makes sense, but I do not have the guts to say it." Well, I have the guts to say so.


Mr. Prud'homme:: You speak too loud.


Joseph Adrien Henri Lambert: Me, speaking too loud? That is my natural voice. We will never speak too loud in this House to wake up those who are sleepy, those who sit here only to vote at the call of the bell but who have no guts to rise when it is time to do so. Mr. Chairman, to sit on the majority side and form the majority when the time comes to vote, that is not what is called courageous. I have seen hon. members on the majority side who do not agree with this bill. Oh, my God! 1 see one over there who refrained from voting. But there are others who in the past have spoken in this House and accused the others of being fence riders, people with no spine. It was the hon. member for Compton who accused his colleagues of sitting on the fence. Well, Mr. Chairman, during the vote yesterday, he gave me the impression that he was the chief fence rider, because he voted for a bill which he denounced on television.
Mr. Chairman, I do not think that 1 am being insulting because it is the hon. member who said that first, not me, he said that there were such people who just swayed in the wind, one way and then the other, but who nevertheless continued to sit on their fence. Well, I do not want to be a fence rider, I want to know where I am going; the hon. member for Roberval knows where he is going. We may not have a large team, but we are not a team of fence riders, we are a team of people who know where they are going, we want financial reforms to put the economy back on its feet, we want to bring harmony in our country so that French Canadians and English Canadians will love each other, because after all, we eat the same way and we react the same way. When we look at one another, we find a striking resemblance, so why should we not be able to get along? Simply because there are financial considerations

which separate us, because we create dividing interests, and that is why we cannot understand one another in this country.
Mr. Chairman, I take this opportunity to invite all my colleagues in the House to consider seriously in the coming months the bill which was introduced regarding chartered banks in Canada. It is that thick! It is an extraordinary bill, but it is a bill which can generate harmony among us, the federal government, the provincial governments, the municipal governments, and among Canadians. It is an extremely important bill and I would invite all my colleagues, during recess, if it can be called that, to scrutinize all the clauses in the legislation so that we can be well prepared to study it objectively when we return to the House.
Then it will be referred to the Standing Committee on Finance, Trade and Economic Affairs so that we can also consider it seriously, and finally bring in the necessary amendments to enable the Liberal, Progressive Conservative, NDP or Socred government to meet the aspirations of all Canadians, to give equal opportunity to all citizens, all individuals, to the private sector, to municipalities, to provincial governments and to the government of Canada. This is, Mr. Chairman, what a genuine Canadian constitution is about: first put some order in the financial system and the rest will come to us naturally.


Ramon John Hnatyshyn: Mr. Chairman, 1 have only a few minutes in which to speak. I remarked to the Parliamentary Secretary to Minister of Finance that if the hon. member for Bellechase ever made a speech like that in Saskatoon, he would get a standing ovation.


Monique Bégin: Would he be elected?


Ramon John Hnatyshyn: That is a good possibility, especially if he ran in the riding of the Minister of Transport. He would be a shoo-in there.
I want to direct a few questions to the Minister of Finance. As you pointed out in your ruling earlier today, Mr. Chairman, there is an opportunity in clause 1 for us to deal in a general way with some of the fundamental principles of this bill. I should like to ask the minister some questions on the amended ways and means motion as 1 am anxious to have a better understanding of it.
I must say I was very upset at the attitude taken by the minister this afternoon when he refused to answer questions on anything except clause 1. If we are to make any progress in committee of the whole he should not ignore this opportunity to try to clear away some of the misunderstandings and misapprehensions some of us have about this bill.
The way in which the bill has been handled up to this point reminds one of "Alice in Wonderland". It has been an unfortunate scenario of incompetence-of stupidity, I am sorry to say, as demonstrated by the minister. I should like to try and help him get the best possible arrangement under the circum-
June 8, 1978

stances, but that will be difficult if he refuses to answer questions. 1 suspect he wants to avoid answering questions, just put in some time here and then try to invoke a time allocation on this segment of the deliberation. This would be an unfortunate move on his part and would demonstrate again his inflexibility.
If the minister is not going to be here, perhaps I might ask the parliamentary secretary a couple of questions. If the minister is unwilling or afraid to answer questions maybe the parliamentary secretary will screw up his courage and answer them.
In the amended ways and means motion there is a provision that no interest will be payable on the portion of any refund arising by way of a reduction. Could the parliamentary secretary explain-


Charles Robert Turner: Order, please. It being 10 o'clock it is my duty to rise and report progress and request leave to consider the bill again at the next sitting of the House.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, recently in Toronto the Minister of National Defence (Mr. Danson) announced that he was calling for hanging for terrorists. He said that while he does not think the death penalty would deter terrorists, it would keep them out of jail, and that one of the prime motives for terrorism is the demand for release of imprisoned terrorists. In an interview the minister cited the assassination of Aldo Moro as an example of why terrorists should be executed.
1 raised this matter in the House on June 2 when I put a question to the Minister of Justice (Mr. Basford) about whether the government was considering reintroducing capital punishment for terrorism. At page 6000 of Hansard the minister replied:
It is not the intention to amend the law in the manner indicated by the question.
1 do not think 1 have to remind hon. members that 80 per cent of the Canadian people have been requesting the return of capital punishment. With the amount of terrorism we have seen around the world, the government should certainly be giving some serious consideration to the return of capital punishment. I asked the Minister of National Defence in the
Adjournment Debate
House to explain his statement that he wanted capital punishment brought back for terrorism. Part of his answer, appearing in Hansard at page 6000, reads as follows:
When one looks at the situation in recent months, where most terrorist activities have been directed to the release of terrorists who are incarcerated, one must consider the alternatives to reduce terrorism which is aimed at the structures of our society and our democratic way of life.
I would like to add a little further to that. When a terrorist is jailed he should be required to sign an affidavit that if his friends, the other terrorists outside, seize hostages to demand a prisoner's release from prison, it should be made clear to the jailed terrorist that he too will receive capital punishment along with his terrorist friends outside of the jail.
We have seen terrorist action in Zaire recently where rebels slaughtered as many as 200 foreigners in a hunt for the white man. French troops found a new massacre site in a European quarter of Kolwezi containing about 20 bodies, including a dozen children. In another town in Zaire, at Kinshasa, rescuers found 44 slain. Those examples prove that terrorists have been acting in a revolting manner around the world.
We now come to Spain, where three terrorists, believed to be mainly Armenian vengeance-seekers, pumped bullets into the Turkish ambassador's car at a stoplight in downtown Madrid killing his wife, brother-in-law and a chauffeur.
So one can see how bold terrorists are. No one is safe on the streets whether a person is in his car, walking down the street or whatever he is doing.
At least some countries know what to do with these individuals. I would like to refer to a recent case in Egypt where the Egyptian government hanged five people for a kidnap-murder. The Ottawa Journal for Monday, March 20, 1978 reported:
The Egyptian government hanged five Moslem fanatics at dawn Sunday for the kidnap-murder last summer of former cabinet minister Sheik Mohamed Zahabi, Egypt's Middle East news agency reported.
Closer to home, Mr. Speaker, last year the FBI reported that 91 policemen were killed on duty in the United States. In 1976 111 were killed in that country. Many Canadians want capital punishment brought back for the murder of policemen. So far this year in Canada four policemen have been murdered.
One sees many letters to the editor in many papers across Canada. Members of parliament also receive mail on the subject of capital punishment. I would like to refer to a letter to the editor in the Winnipeg Tribune which states:
We are not going to take it any more! Another police officer killed, two wounded, including a young woman constable!
How many more police officers have to be murdered before our government will bring back capital punishment?
That is just an example of one letter. I have another one which appeared in a Winnipeg newspaper recently entitled "Who is next on killer list?" It states:
At the risk of being thought a bigoted redneck from the West, I am still firmly in favour of capital punishment being put into force in Canada, immediately, for any deliberate murder.

June 8, 1978
Adjournment Debate
The letter goes on to say:
In parliament the flag dropped to half mast in respect for Italy's Aldo Moro, a politician. How much more appropriate would it be for such respect to be shown for our own Mounties when they give their lives in the service of Canadian citizens, including those stupid politicians who refuse to give them the protection of the law.
I would like to refer to the murder of the young shoeshine boy in Toronto last year, and in particular to an article which appeared in the Toronto Sun under the heading "Police say film shows sex attack on Emanuel". The article states:
Police investigating the slaying of Emanuel Jaques yesterday revealed they had seized colour film showing the boy being repeatedly sexually assaulted before his death.
These are the types of people Canadians want punished and that is why the government must consider the implementation of capital punishment once again.


Roger Carl Young: Mr. Speaker, it has been stated before that the ministry is not prepared to accede to the request for reinstatement of capital punishment in this country. The ministry does not feel compelled to depart from that principle presently enshrined in the law of this country in relation to offences committed by national or international terrorists.
This, notwithstanding the comments made by the hon. member this evening and the press clipping he quoted from a Winnipeg paper referring to "stupid politicians". 1 take it that must refer to all members of this House who voted for abolition in a free vote, including a number of members of his own party, among them his own leader.
Criminal Code amendments passed by parliament in 1977 which have now been proclaimed as the law of the land should be ample notice to would-be national or international terrorists that Canadians are prepared to deal rigorously with those who would commit violent criminal acts. This trend has been continued in the current legislation presently tabled before the House.
These present and proposed provisions are ample testimony to the fact that Canada will not be a haven for incidents of national or international terrorism.
The impact of the increased lengths of parole eligibility for persons convicted of first and second degree murder is becoming increasingly apparent in the community. Individuals who are convicted of first degree murder will be sentenced to imprisonment for life without eligibility for parole for 25 years. Persons found guilty of second degree murder run the risk of having their parole eligibility extended from ten to a maximum of 25 years.
Radical changes to the penalties for the criminal misuse of firearms are a mark of the new gun control legislation. Use of a firearm while committing an indictable offence will now be punished by mandatory imprisonment for one to 14 years for the first offence. Subsequent offences may attract sentences of three to 14 years. The sentence for use of a firearm in the
[Mr. McKenzie.)
commission of a violent indictable offence will be served consecutively to any other offence imposed for the crime. Carrying a concealed weapon, possessing prohibited weapons or unregistered restricted weapons, is punishable by up to five years imprisonment. Any offence under the Criminal Code authorizing imprisonment for five years or more now comes within the expanded definition of "offence" for which an authorization may be permitted under the wiretap provisions of the Code.
Proposed amendments presently before the House to the Fugitive Offenders and Extradition Acts are an attempt to modernize this legislation in the face of the increasing international scope of criminal activities, including terrorism. The-


The Acting Speaker (Mr. Ethier):: Order. 1 regret to interrupt the hon. member but the time allotted to him has expired.


CONFLICT OF INTEREST-EFFECT OF GUIDELINES ON FORMER MINISTERS AND DEPUTY MINISTERS
Ramon John Hnatyshyn: Mr. Speaker, 1 rise tonight in the hope of getting a better answer to the question 1 raised with respect to the conflict of interest rules set out by the Prime Minister (Mr. Trudeau), particularly as they related to the appointment of the former minister of finance, the Hon. Donald Macdonald, to the board of directors of the MacDonnell-Douglas Corporation.
1 suppose one of the advantages of flying back and forth between Saskatoon and Ottawa is that one has the chance of reading the papers. But on the weekend, before I asked my question, I noted on the financial pages of various newspapers, including the Globe and Mail, an announcement by the MacDonnell-Douglas Corporation of the appointment of Mr. Macdonald to the board of directors. In reading the announcement over, what struck me were the rather Freudian references to the qualifications of Mr. Macdonald, including the fact that he is a former minister of national defence and minister of finance. There was no reference to any other portfolios Mr. Macdonald held, so I suppose MacDonnell-Douglas felt those other portfolios brought no significant advantage to the company and were not the basis upon which Mr. Macdonald was made a member of the board.
The company went on to point out that it has commercial and military aircraft and automation services amongst its products. As we all know, the Government of Canada is now in process of considering a number of tenders for a massive $2.3 billion contract relating to military aircraft for the Department of National Defence and the government generally.
Mr. Macdonald resigned as minister of finance less than a year ago. He was minister of finance up until September, 1977, so there are a couple of considerations in this situation. As has been pointed out by many people, no one is suggesting that Mr. Macdonald is going to use some devious methods to obtain a particular preference for Macdonnell-Douglas. That is not the issue.
June 8, 1978

If we look ahead and if MacDonnell-Douglas is the successful bidder, what will be the perception as far as the Government of Canada is concerned? This will put the government in a very peculiar position, and the perception is going to be unfortunate. The perception might be that the contract was awarded to a company which had on its board of directors someone with access to and influence with the government over and above the normal lobby one might expect from competitors.
The point I was trying to make to the Prime Minister when 1 was asking the question was twofold. 1 think there is a very good reason to say that technically and unfortunately Mr. Macdonald has breached the guidelines which the Prime Minister laid down. Under the guidelines, and 1 quote:
A former office holder must not, within the relevant time period-
Which is two years.
-accept appointment to the board of directors of a commercial corporation which was, as a matter of course, in a special relationship with the department or agency with which he was last employed, where "special relationship" means regulation of the corporation by the department or agency-
The fact is that as minister of finance Mr. Macdonald would have had a special relationship with MacDonnell-Douglas and other companies such as Shell Canada Limited and Boise Cascade. Because he was minister of finance, he was technically responsible for the Anti-Inflation Board in relation to the aircraft company and quite possibly Shell, 1 do not know. He was also responsible for the Anti-Dumping Tribunal, which is responsible for protecting the production of materials in Canada and for making sure that there is no unfair importation of goods produced in other countries.
If we want to look at this technically, I suggest there was a breach of the guidelines. Quite apart from that, I suggest that the spirit of the guidelines has been breached in this situation because Mr. Macdonald was surely very keenly involved in cabinet deliberations respecting the expenditure of $2.3 billion. It goes without saying that as minister of finance he would have had to have very great interest in whether the government should expend that amount of money for fighter aircraft. He would have been involved in the decision-making process, so to say that he was not minister of national defence for some years and therefore the two-year period lapsed 1 think is begging the issue.
We have to have a serious look at what kind of rules we should have, if we are going to have rules, to bind office holders and former office holders so that there can be no question that there is preferential treatment being afforded some commercial corporation because of a particular connection of a former office holder. This is the submission 1 was making to the Prime Minister. 1 think this is a matter of public trust and confidence. If there are going to be guidelines which are worthless, why bother-
Adjournment Debate


The Acting Speaker (Mr. Ethier):: Order, please. 1 regret to interrupt the hon. gentleman but his allotted time has expired.


Mr. Rod Blaker (Parliamentary Secretary to Solicitor General):: Mr. Speaker, if I recall correctly, in 1975 an all-party committee of the House of Commons unanimously recommended conflict of interest guidelines. I remind the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn) that his present leader was one of the members who worked on that committee. My recollection is that the recommendations of the committee to parliament were unanimously agreed upon.
In 1976 the Prime Minister (Mr. Trudeau) tabled guidelines respecting conflicts of interest relating to ministers. Last April post-employment guidelines were tabled in this House. They are public knowledge and within the awareness of the hon. member.
The hon. member indicates that there was a technical breach of the guidelines with respect to Mr. Donald Macdonald and the aircraft company mentioned. I have read those guidelines and I am of the same opinion as others who have said that there is no breach whatsoever and that the former minister of finance is perfectly within the spirit as well as the letter of those guidelines.
If the argument presented by the hon. member had any validity at all, it would absolutely deny former ministers and members of parliament participation in public life because of the most far-fetched possible connection that can be found. The minister has observed the rules, as the Prime Minister has indicated, and since the hon. member opposite has made a point of saying that he does not raise a question as to the good faith of the former minister, he should not argue that on the appearance of the matter there might be some apparent conflict of interest. He himself has stated that he is satisfied as to the good faith of the individual, so I do not think he does the institution of parliament any good when, despite his own faith in the former minister, he raises the question of appearance. I do not think he can have it both ways.
These guidelines are amongst the most stringent in the world, as I am personally aware as a result of being chairman of the Standing Committee on Privileges and Elections which has studied the guidelines on conflict of interest. I, too, from that position can say that I am perfectly satisfied that there is neither an apparent nor a real conflict of interest.


The Acting Speaker (Mr. Ethier):: Order, please. A motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 11 a.m.
At 10.20 p.m. the House adjourned, without question put, pursuant to Standing Order.

June 8, 1978


APPENDIX
[Stage Direction]
Quebec, June 7, 1978
Honorable Jean Chretien,
Minister of Finance,
Government of Canada,
Ottawa, Ontario
Dear Sir:
Since your budget speech of April 10 last, we have had several opportunities to explain the point of view of our respective governments concerning the federal proposal on the provincial sales tax reduction. Following our exchange of correspondence and our discussions, it seems clear that our governments disagree about the formula for the sales tax reduction in Quebec and that it would be useless to seek a formula other than the one which was approved by the Quebec government and supported unanimously by the National Assembly.
The Government of Canada recognizes the principle that the decision of a province not to take part in a federal program should not result in a financial loss for the taxpayers of that province. Your government therefore accepts to pay to Quebec in one form or another the federal contribution originally offered in its provincial sales tax reduction proposal, which amounts to $226 million. Recognition of this principle should have led to a settlement between our two governments. You have not accepted that. I believe our disagreement on this matter has gone on long enough and time has come to settle the terms of payment of the federal contribution. In this regard, I would like to submit to you a three-part proposal which includes the various elements of solution suggested in recent weeks.
First, the federal government will pay to the government of Quebec, in this fiscal year, a financial contribution of some $40 million representing the equivalent of a two-point sales tax reduction for a six-month period on clothing, footwear, textiles, furniture and hotel accommodation, all this pursuant to the commitment you made in your letters of last April 21 and May 15.
Second, if you do not intend to amend Bill C-56, the government of Quebec will take the necessary action to recover a global amount equivalent to the sum which otherwise would have been paid to the province by the federal government. However, should the federal government choose to amend Bill C-56 and pay the balance of $186 million through a personal income tax reduction at the end of the 1978 fiscal year, the government of Quebec might consider recovering that amount through a special tax equivalent to the federal rebate. In the absence of any fiscal collection agreement, the government of Quebec would collect that tax itself. To facilitate its collection and ensure that in any case it will be no higher than the federal tax reduction our respective Departments of Revenue should agree on the administrative conditions governing that fiscal arrangement. Those conditions would concern particularly the provisions of our respective laws and formulas as well as the appropriate controls.
Last, the government of Quebec would be reimbursed the amount representing the interest on the loan it would contract in the absence of any fiscal collection agreement. Indeed, should Bill C-56 be amended as suggested above, unlike the other provinces the government of Quebec would have to wait until the next fiscal year to recover the federal rebate at the time of filing of income tax returns for the 1978 taxation year.
I hope that this proposal represents an acceptable solution as concerns the terms of payment of the amount of $226 million which must be paid to the province of Quebec one way or another, as you have recognized yourself.
Sincerely yours,
The Minister,
Jacques Parizeau
[Stage Direction]
Friday, June 9, 1978