1978-02-09

ROUTINE PROCEEDINGS


Mr. Ken Hurlburt (Lethbridge):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that an application was made to the Speaker of the House on July 14, 1976, to hold a "Lethbridge night" inviting all MPs, senators and their guests, along with the mayor of St. Laurent, our twin city, and in light of the fact this application was turned down, 1 move, seconded by the hon. member for Swift Current-Maple Creek (Mr. Hamilton):
That the Liberal annual meeting be moved to downtown Ottawa, where they can do the same as the NDP, Creditiste and PC parties by patronizing the business people who meet payrolls, pay taxes and provide a service every day of the year and, I should point out, they also vote.


Mr. Speaker:: The presentation of such a motion for discussion, pursuant to the Standing Order, requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


LABOUR CONDITIONS
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I rise under Standing Order 43 on a matter of national importance. All members of parliament have by now received from the Minister of Employment and Immigration (Mr. Cullen) notice of the allocation of funds under the Young Canada Works program. One of the obvious deficiences in the minister's communication is the failure to provide allocation figures and the unemployment rate calculated for all constituencies in Canada. Since this does not allow the individual member of parliament any means of comparison of unemployment rates amongst students by constituencies, or the rise or fall of funding to other constituencies, and since this is a vital piece of information so that not only equity in allocation of the Canada taxpayers' money for Young Canada Works be done, but that it be seen to be done in this election year, I move, seconded by the hon. member for New Westminster (Mr. Leggatt):
That the minister provide every member of parliament this information not later than the end of February.


Mr. Speaker:: The presentation of such a motion for discussion, pursuant to Standing Order 43, requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIR CANADA
Mr. Eudore Allard (Rimouski):: Mr. Speaker, pursuant to Standing Order 43, I ask for the unanimous consent of the House to present a motion on an urgent and important matter.
Considering that Air Canada aircraft operate at less than 60 per cent of capacity and that in some areas aircraft are the only means of transportation available; considering that there are about three million people in Canada who are 60 or over and that many would fly more often if travel rates were lower; considering that only private carriers such as Quebecair and Nordair offer reduced rates of some 50 per cent for senior citizens along with the privilege of making reservations at any time, while Air Canada's reduced rates do not vary more than 9 per cent or 10 per cent, I move, seconded by the hon. member for Richmond (Mr. Beaudoin):
That the House urge the Minister of Transport to make any necessary arrangements so that Air Canada provide similar privileges, that is, reduced rates of 50 per cent for senior citizens.


Mr. Speaker:: Order. Pursuant to Standing Order 43, presentation of such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Roch La Salle (Joliette):: Mr. Speaker, pursuant to the terms of Standing Order 43, I request the unanimous consent of the House to present a motion dealing with an important matter.
As the government is due to announce its new dairy policy next April, as the dairy producers have found themselves in a dramatic situation for a number of years and as their problems are growing, I move, seconded by the hon. member for Elgin (Mr. Wise):
That this House unanimously urge the responsible minister to incorporate in his new policy the following recommendations: (1) That the government adopt a dairy policy applicable for five years; (2) That the Canadian Dairy Commission be granted the same authority and prerogatives as the Canadian Wheat Board; (3) That price indexing apply to dairy production as soon as prices fluctuate by 2 per cent, either way; (4) That imports of cheese be reduced to 15 million pounds; (5) That the new quota calendar be changed to lessen its seasonal character.
Those, then, are the few recommendations that must be included in the new dairy policy.


Mr. Speaker:: Under the terms of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL DEFENCE
Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, under the terms of Standing Order 43, in order to assure the security of the nation in light of the incredibly naive letter written by the Minister of National Defence (Mr. Danson) to "Operations Dismantle", expressing his personal view of Soviet military intentions and his belief that in a crisis the "senior actors" should be kept in the dark until the last minute, I move, seconded by the hon. member for Selkirk (Mr. Whiteway):
That this House urge the Prime Minister to give the Minister of National Defence a less demanding job more in keeping with this demonstrated inability.
[Mr. Speaker.)
[ Translation]


EXPRESSION OF SYMPATHY TO FAMILY OF MR. MICHEL ROY- MOTION UNDER S.O. 43
Mr. Prosper Boulanger (Mercier):: Mr. Speaker, pursuant to the terms of Standing Order 43, I request the unanimous consent of the House to present an important motion. I move, seconded by the hon. member for Gamelin (Mr. Portelance):
That this House express its condolences to the family of Archambault Institution Warden Michel Roy, criminologist, who was murdered in front of his home in Pointe-aux-Trembles last Tuesday night.


Mr. Speaker:: Presentation of such a motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the decision by the directors of the publicly-owned insurance corporation of British Columbia, ICBC, to hire Mr. Robert Sherrell, an American, at $80,000 per annum, in spite of the fact that there were some 100 applicants from Canada for the job, and in view of the fact that Manpower offices were, as usual, not involved in the hiring process, and in view of the fact that more than one million Canadians are without employment, I move, seconded by the hon. member for Nickel Belt (Mr. Rodriguez):
That the application for a work permit by Mr. Sherrell be denied in view of the many qualified Canadians available for this position.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENITENTIARIES
Mr. Erik Nielsen (Yukon):: Mr. Speaker, under the terms of Standing Order 43, there can be no doubt about the urgency of this motion. In view of the fact that the unanimous report of the subcommittee of the Standing Committee on Justice and Legal Affairs on the penitentiary system in Canada was presented to the solicitor general on June 7, 1977, and in view of the fact that the response of the solicitor general to the said report containing 65 recommendations for penal reform in Canada was tabled in the House on August 5, 1977, and since the solicitor general has failed to adopt and implement those recommendations considered unanimously by the subcommittee members to be crucial to meaningful reform, and has otherwise procrastinated in the implementation of the recommendations in the said report, resulting in the renewal of hostage incidents at Millhaven, British Columbia penitentiary and Dorchester, in addition to other incidents such as the slaying of the warden of Archambault penitentiary on Tuesday last, I ask leave to move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That this House direct the government to adopt and implement forthwith the whole of the recommendations as presented to the solicitor general and the government by the non-partisan, unanimous report of the subcommittee on the penitentiary system in Canada.


Mr. Speaker:: Under the terms of Standing Order 43, such a motion can be presented for discussion only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


REQUEST SUBCOMMITTEE BE REACTIVATED-MOTION UNDER S.O. 43
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter which has been the subject of wide agreement in the past. Having regard to the recent hostage-taking at the B.C. penitentiary and at Dorchester, and the fact that in one such incident five men known to be dangerous were brought together in the visitors' area, I ask leave to move, seconded by the hon. member for Oxford (Mr. Halliday):
That the parliamentary subcommittee on penitentiaries be reactivated to investigate these latest incidents and present its findings to the House as soon as possible.


Mr. Speaker:: Is there unanimous consent to such a motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions



ORAL QUESTION PERIOD


Mr. James Gillies (Don Valley):: Mr. Speaker, my question is directed to the Minister of Finance. From what sources is the minister getting his primary economic advice these days? I ask this question in light of reports yesterday that senior officials in the Department of Finance have said there need to be major economic changes if this country is to achieve its potential over the next three or four years, yet the minister has constantly stated in this House that there is no need for policy changes. So I ask, where is the minister getting his advice from at this time?


Hon. Jean Chretien (Minister of Finance):: I am receiving advice from people in the Department of Finance. I suggest the hon. member should read the article more carefully. We all agree there should be important structural changes in Canada, but we are saying at this time that we cannot solve our problems through fiscal and monetary policies.


James McPhail Gillies: A supplementary question, Mr. Speaker. I think if the minister read the article carefully he would see that the first recommendation made by officials of the Department of Finance was that there should be a shift in our monetary and fiscal policy. On that point, I should like to ask the minister if he has had discussions with the governor of the Bank of Canada about the fact that the rate of increase in the money supply has gone up very substantially, because for the first time in the history of Canada a high proportion of new debt is being financed through the bank-in fact, 49 per cent.
Has the minister talked with the governor of the Bank of Canada about this new policy that the bank is following, and does he understand how inflationary this will be on the economy in the course of the next six months?


Joseph Jacques Jean Chrétien: Mr. Speaker, I meet with the governor of the Bank of Canada every week and we discuss these problems. As everyone knows, the governor of the Bank of Canada has told the nation that he will operate his monetary policies within a certain framework. He is within the framework he indicated to the nation a few months ago.


James McPhail Gillies: A final supplementary question, Mr. Speaker, in relation to the answer which the minister has just provided. How can he say that the governor of the Bank of Canada is still falling within that framework, when the rate of increase in the money supply has been tremendous in the last three months? Will the minister get the assurance of the governor of the Bank of Canada that an explanation for this fundamental change in policy will be made public by him?


Joseph Jacques Jean Chrétien: Mr. Speaker, he has not changed his policy at all. I explained that he had set a limit on the growth of the


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money supply, and he is within the limit that he set for himself.


INCREASING FINANCIAL DEFICITS-GOVERNMENT STEPS TO PROVIDE ECONOMIC STIMULUS
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a supplementary question for the Minister of Finance. The document which the minister tabled recently indicates that he will be calling for continued restraint on government spending at all levels. At the same time, it indicates that government deficits will continue to provide a strong stimulus to economic activity until 1981. There seems to be a conflict here. Can the minister advise how governments, including this one, expect to carry on with this greater deficit if they exercise restraint on not only their programs but on the tax intake?


Joseph Jacques Jean Chrétien: Mr. Speaker, unfortunately, I was arguing across the floor with the previous questioner, so I would ask the hon. member to repeat the question.


Lincoln MacCauley Alexander: Mr. Speaker, it is a simple question. The paper that was filed by the minister in the past day or so calls for continued restraint on government spending at all levels. At the same time, however, government deficits are projected to continue to provide a strong stimulus to economic activity between now and 1981. How will governments, including this one, finance greater deficits if they exercise such restraint and, presumably, exercise restraint on the amount of taxes taken in?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have said we are running a high deficit, and we are not planning to have a higher deficit this year. I said earlier that we face a particular problem next year because of the interest we will have to pay on certain bond issues which were circulated in 1969. The cash requirement will be that much greater next year. We are trying to keep expenditures within the growth of the GNP. I hope every member of the House realizes we managed to do that in the last two years, and we will do it next year as well.


Lincoln MacCauley Alexander: A final supplementary question, Mr. Speaker. It appears to me that the provinces are very concerned about having continuing and even higher deficits, because this will affect their prime ratings in money markets in the United States. How can the minister put this particular situation before them, when it appears to me that the provinces will not agree to it?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have discussed this problem with the provinces. I think the cash requirements of the provinces are less, relatively speaking, than those of the federal government. I am very pleased to see the hon. member preoccupied with the size of the deficit, because yesterday his leader proposed that we increase it by $2 billion.


Mr. Clark:: Another half-truth.


EXTERNAL AFFAIRS
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I direct a question to the Secretary of State for External Affairs. Would the minister confirm a news report that has just come over the wire, to the effect that 13 Soviet nationals have been found to be involved in inadmissible activities in Canada, in clear contravention of the Official Secrets Act and, if so, would the minister tell the House what, if any, action has been taken?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, 1 can confirm the general report as stated by the hon. member. I will be making a full statement on this matter at the appropriate time, as near to three o'clock as possible.


POST OFFICE
Hon. Martin O'Connell (Scarborough East):: Mr. Speaker, my question is directed to the Postmaster General. First, I should like to congratulate the minister on his appointment to this important federal institution.


Some hon. Members:: Hear, hear!


Mr. O'Connell:: In view of the effectiveness of committees of the House in bringing about reform of other federal institutions experiencing grave difficulties, will the Postmaster General agree to establish a special committee of the House, in the session, to inquire into the postal service, into the administration of the Post Office, into labour management relations therein, and into the advisability of converting the Post Office into some form of Crown corporation?


Hon. J.-Gilles Lamontagne (Postmaster General):: Mr. Speaker, I wish to thank my colleague from Scarborough East for his congratulations. Probably-


Mr. Baker (Grenville-Carleton):: That is a really bad show: a fixed question right at the beginning of oral questions.


Mr. Lamontagne:: Mr. Speaker, I wish to thank the hon. member for Scarborough East for his congratulations. They will probably be the last I shall receive in this House, I might as well enjoy it as long as it lasts.
I have said in public, on television and in other places, that I would be coming into this job with as open a mind as possible.


Many suggestions have been made, such as a royal commission, a committee, and a Crown corporation.


Mr. Lawrence:: What about nationalization?


Maurice Lamontagne: Nationalization has already been done.
[ Translation]
But all hon. members will understand, I think, that the negotiations are going on. Since I have taken office, mediators have been appointed in both cases with the CUPW and the GLT. We also had negotiations with the Treasury Board because, as you know, it is the employer of the letter carriers. 1 have already met for two hours-

We are doing everything possible to make the Post Office as economical as possible and to provide the best service to the people.


Some hon. Members:: Hear! hear!

[ Translation]


CRIMINAL CODE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Solicitor General.
Following the murder of Archambault Institution Warden Michel Roy, I moved a motion yesterday pursuant to Standing Order 43 to ask the House to consider seriously increased violence in Canada. My question is as follows: Given the growing number of murdered policemen, prison guards and even the murder of a warden, is the Solicitor General in a position to tell the House whether he will seriously study this matter with his cabinet colleagues and then present to Parliament a bill to amend the Criminal Code and impose harsher penalties on those who show no respect for life? Is the Solicitor General prepared to take a step in such direction?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I thank the hon. member for his comments. Indeed, as I said yesterday when I thanked him and his colleagues for their representations, this is quite a serious matter. As for his allegations about the growing number of certain crimes which he specified, I would ask him to provide particulars on which his allegations and representations are based.


Joseph Adrien Henri Lambert: Mr. Speaker, I wish to direct a supplementary question.
The invitation I have just received from the Solicitor General deserves a reply and today, in order to be able to provide him with the necessary information, I had a question put on the order paper requesting full details on events which have occurred over the past few years, details which, as soon as I am provided with them, I shall convey to him. I hope he will agree to look into this as soon as he receives the information
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and then seriously consider introducing legislation to amend the Criminal Code so that we may enjoy a little more peace and order in Canada-


THE CANADIAN ECONOMY
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is for the Prime Minister. Now that the government has made available its document prepared for the recent meeting of finance ministers and for the upcoming first ministers' conference on Canada's medium-term economic approaches, projections and targets, will the Prime Minister, in his usual co-operative manner, make available the governments' document on short-term projections, targets and proposals to deal with the current economic crisis, which it intends to make available to the first ministers next week? I presume that such a document exists.


Right Hon. P. E. Trudeau (Prime Minister):: 1 will consider the hon. lady's request.


Flora Isabel MacDonald: Will the Prime Minister state, since he is not putting forth any such document here in the House, whether he is also declaring that there is an absence of any such proposals, and that what in fact he is doing is throwing on to the provinces the onus to deal with the economic situation which his government has created, thereby declaring not only bankruptcy in fiscal terms in this country but bankruptcy in ideas as well?


Pierre Elliott Trudeau: Mr. Speaker, surely that was an argument rather than a question.


TRANSPORT
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to direct a question to the Minister of Transport. It has to do with the final plan for the western transcontinental passenger service. Since many representations have been received by members of parliament and the commission about the scheduling and structure of the final plan, as well as the potential lay-offs, and given the fact that the railway transport committee did not provide an opportunity for a number of citizens in the smaller communities of northern Ontario to present their views on the railway passenger service, what action will the minister take to ensure that the opinions and views of the people who are being grossly affected by the plan will, in fact, be heard and taken into consideration?


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Hon. Otto E. Lang (Minister of Transport):: I should like to say, first of all, that as far as labour questions and lay-offs are concerned, we have extremely good working relationships with the unions and their representatives and have made some break-through agreements and, indeed, received some praise from the union leadership in connection with that work.
So far as the final plan is concerned, I think we are moving into a new phase where the positive, forward-looking management of VIA Rail, under the leadership of Frank Roberts, will be examining to the fullest extent all the opportunities for maintaining and expanding passenger service on the railways where that makes sense. He has been doing this by discussing the problem with municipal authorities and provinces across the country, and we will want that continued. Of course, with regard to some services, such as those in northern Ontario, a number of views have been made known to me directly and also through members of parliament representing the area.


Donald Frank Mazankowski: Am I to take it, then, that the president of VIA Rail may be taking into consideration the views and opinions of people who reside along the 900-mile stretch of the railroad involved in northern Ontario, so they will be able to advance their views and have them receive fair consideration?
In view of the fact that the railway transport committee did not provide a vehicle for these people to be heard, is the minister contemplating the establishment of formalized hearings so that formal notice can be presented and these people can present their views?


Otto Emil Lang: Mr. Speaker, I think that might depend on the form of action which is recommended. Obviously, the final plan has a certain weight and power from the point of view of its being a Canadian Transport Commission decision. But as the VIA Rail plans, in concert with various areas in the provinces, are developed, they will be translated into more positive applications for relief or approval and decision by the CTC. That may very well provide a further opportunity for the opinions of various individuals to be heard.


CENSORING
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Prime Minister. It has to do with a judgment of the Supreme Court of Canada in an action respecting the powers of the board of censors of a province to make orders and directives which are not challengeable. The Supreme Court of Canada decided, on a majority of five to four, that the board had the right to make orders. I know the Prime Minister will be interested in this matter because in past years he was a proponent of civil liberties organizations.


Flora Isabel MacDonald: "Was", past tense.
[Mr. Mazankowski.J


John George Diefenbaker: He was, when he was not in his present position. I was speaking about the days when he was an outspoken member of a civil liberties organization, and I am not speaking in a facetious manner.
In the judgment of the Supreme Court of Canada, five judges determined one course-which was the final judgment-and four dissented. The Chief Justice of Canada, a very eminent judge, in dissenting said, among other things, that such a board can ban any film, even political or religious, and does not have to explain why. That was not part of the judgment which was handed down by the majority.
In view of the seriousness of the implications which flow from this decision, would the Prime Minister consider submitting a question to the Supreme Court of Canada to ascertain whether boards shall have the right to make determinations and not have to give the reasons therefor? Because if they have that right, that is the end of freedom. I suggest that the question be referred to the Supreme Court of Canada, or a committee of this House be set up to look into the matter, because if the law stands as it is being interpreted now, freedom will hang by a very weak cord.


Pierre Elliott Trudeau: Mr. Speaker, if I understood the right hon. gentleman, he was reading from the dissenting minority opinion, in which case he should be reassured, because in the supreme court it is the majority decision which prevails.


Mr. Fraser:: The hon. member said it did not affect the main judgment.


John George Diefenbaker: Mr. Speaker, the Chief Justice of Canada, the Right Hon. Bora Laskin, pointed out the grave danger of boards having the power to make determinations without giving the reasons therefor. As I remember, the Prime Minister in his palmy days held the same view. Therefore, I wonder if he would submit this question to the Supreme Court of Canada so that once and for all we can have the matter determined, so that boards do not become absolute monarchs who do not allow the individual to know the basis of orders or directives they make.


Pierre Elliott Trudeau: Mr. Speaker, I presume the court in this case was basing its decision on its interpretation of the statute. If there is to be a remedy, it seems to me it would be a change in the statute. I believe this is a statute passed by the government of Ontario. Perhaps that would be the proper course to follow.


An hon. Member:: Nova Scotia.


Pierre Elliott Trudeau: Yes, it is a statute passed by the government of Nova Scotia.


John George Diefenbaker: Mr. Speaker, in view of the majority judgment apparently a statute cannot be enacted by the Parliament of Canada. I am asking that the Prime Minister follow the course he followed with such vocal success in the days when he was at the Bar, and say that this kind of thing is wrong.


Pierre Elliott Trudeau: Mr. Speaker, what I did when I was at the bar was study a statute to see if it should be changed. That is what I am arguing now. It seems to me that that is the position of the right hon. gentleman, in saying that the statute has dangerous implications. If that is so, surely the argument should be made to those who passed the statute and have the power to amend it.


LABOUR CONDITIONS
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. In view of the fact that an Ontario select committee reported yesterday and made recommendations to save thousands of jobs in the nickel industry through a combination of a 30-day stockpiling of nickel, 30 days of job-sharing, and a retirement plan, that this proposal was supported by a majority of the committee, including all the provincial Liberals on the committee, and that this is the only positive proposal which has been put forward by either the federal government or the provincial government to save these thousands of jobs, can the minister tell this House if the government will at long last take positive steps to protect these jobs and the communities involved by supporting the proposals of the Ontario select committee?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I very much want to see those proposals. I have not yet received them. We have asked the Ontario government to send them to us, but they have not yet arrived. I believe they will be in our possession later this afternoon. When we receive them, we will take a very good look at them.


John R. Rodriguez: In view of the fact that the provincial select committee has at last come forward with a plan which will protect the employment of over 3,000 miners, and the communities in which they live, for at least 60 days, that the federal Liberal government has put forward absolutely no plans to protect the jobs of these workers, and that what is proposed by this select committee is that an interest-free loan be given to Falconbridge and Inco so they can stockpile for one month, can the minister tell the House if he is prepared to enter into negotiations with the provincial government and to put up money to save the jobs of miners in the Sudbury basin and at Thompson, Manitoba?


Alastair William Gillespie: Mr. Speaker, it is quite clear that the federal government has responded on a number of occasions, suggesting profitable avenues for the company and the union to pursue. Without accepting the hon. member's preamble, 1 go back to my earlier answer and say that I am prepared to consider what the select committee has proposed. However, I
Oral Questions
have not yet seen what has been proposed and until I do later this day I can add nothing more.


John R. Rodriguez: Mr. Speaker, the lay-offs are to take place on Monday: on Monday, 3,000 workers in Sudbury will be hitting the bricks. In view of the fact that the proposal which was made yesterday must go into effect as quickly as possible if we are to avoid the lay-offs, can the minister tell the House if he is prepared to go to his office after the question period, get on the telephone or telex and get the proposals from the Ontario government so that a decision can be made as quickly as possible? Can the minister tell the House that?


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


John R. Rodriguez: Come on; get up and answer the question. Don't sit there like a dummy; get up.


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


Mr. Jones:: Mr. Speaker-


John R. Rodriguez: Answer the question. You don't care about workers. You have a nice fat job, haven't you?


Leonard C. Jones: Order, Mr. Speaker.


Some hon. Members:: Oh, oh!


POST OFFICE
Leonard C. Jones: Mr. Speaker, my question is directed to the Postmaster General, to whom 1 would like to extend my personal congratulations, having been associated with him as a colleague in the municipal field for many years. Will the minister advise this House exactly when, and on what basis, the restraints placed on house to house mail delivery service will be lifted? Does the minister intend to discontinue house to house mail delivery service altogether, or is he going to follow the quid pro quo system which was followed in the Toronto area recently, as reported in the Toronto Globe and Mail on Monday.


J. Gilles Lamontagne: Mr. Speaker, I must say that we are not at all planning to discontinue house to house mail delivery service. Let us say that we are looking just now into ways we could improve this delivery service in urban areas which have developed very rapidly.


Leonard C. Jones: Mr. Speaker, I would like to ask the minister why the alleged restraints placed on house to house mail delivery were instituted in the Scarborough area, in the
2694


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Brandywine area subdivision, and not in other parts of Canada.


Maurice Lamontagne: Mr. Speaker, it is not a question of house delivery; it is a question of principle. I am trying as much as possible to follow some of the advice given by the opposition when they say we spend too much. We have a deficit of $600 million in the Post Office, and we are trying to reduce that deficit and still maintain the best service we can with the least possible money.


Leonard C. Jones: Mr. Speaker, 1 still ask the minister why he would pick one area in central Canada and not do the same thing in the maritime provinces, where employment is needed and where this service is required.


Maurice Lamontagne: 1 would like to mention to the hon. member for Moncton that I am sorry about the inconvenience and nuisance in Moncton. But it is also happening in Scarborough, Toronto, Windsor and other places.


EXTERNAL AFFAIRS
Mr. Paul E. McRae (Fort William):: Mr. Speaker, my question is for the Secretary of State for External Affairs. It involves Inco, Falconbridge, Sun Life and branch plants of other global corporations, and given the kind of information preferred by the United States Senate finance committee, that these corporations control about twice the liquid assets of all the nation states in which they function, what initiatives is this government taking, along with other governments, at the OECD, UNCTAD and the IMF, to try to right the balance of power that exists between global corporations and nation states?


Donald Campbell Jamieson: Mr. Speaker, I am by no means certain that I can provide a thorough answer to the question asked in the length of time you would permit. I think the hon. member knows that there are a number of studies under way at the OECD with regard to the conduct and the impact of multinational corporations. Also, the Prime Minister, along with the other leaders, at the London summit in May of last year agreed to further studies with regard to the conduct of other nationals. Perhaps 1 can serve the hon. member best by giving him a detailed, written, comprehensive report.


DISINTEGRATION OF SOVIET SATELLITE OVER CANADIAN SOIL-LIABILITY FOR SEARCH AND RECOVERY COSTS
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Secretary of State for External Affairs. On January 30, in reply to a question of mine concerning the cost of recovery of the Russian satellite, the Minister of National Defence replied, in part, "the international regime will meet its

responsibilities as was indicated to the Department of External Affairs by the Soviet ambassador". Does that mean Russia has given us formal assurances that it will pay all search and recovery costs and, if not, what does that remark mean?


Donald Campbell Jamieson: Mr. Speaker, I was not in the House when that remark was made. I would like to look at it in detail. I can tell the hon. member in general terms, of course, that yesterday-I believe he is familiar with this fact-I tabled in the House notes which we had sent to the Soviet embassy as well as to the Secretary General of the United Nations. Each one of these notes was designed to establish the fact that we were now satisfied that the debris was, in fact, part of the Soviet satellite.
This was an initial, and necessary, first step under international rules in order to lay the groundwork for a possible claim. So far-I believe the hon. member is also aware of this-the Soviets have not acknowledged specifically that the debris found in Canada is, indeed, part of their satellite. There will have to be an acknowledgement, first of all, on their part before the next phase can take place.


Allan Bruce McKinnon: Mr. Speaker, I agree with the Secretary of State for External Affairs, and only yesterday, at long last, 1 read the note which he sent to Russia. This note was sent in accordance with article V, paragraph 1, of the treaty. It is now obvious that we have not recovered the core of the nuclear reactor. Can the minister give us any assurance that Russia will not claim that our failure to request assistance under paragraph 4 extended unduly the time and cost of recovery operations? In other words, I suggest that if the U.S.S.R. looks at the list of recovered items and decides they are worthless, we will be stuck with meeting the entire cost of the search and recovery operations.


Donald Campbell Jamieson: Mr. Speaker, the latter part of the question is, of course, a conclusion to which I can neither agree nor disagree at the moment, not having heard from the Soviets. But 1 repeat, that I believe we have taken all the steps which we can take at this particular time, and we have taken the necessary first step. These were to indicate to the Soviet Union, unmistakably, that we believe the debris concerned in this case belongs to the Soviet satellite. The next steps will be through the United Nations mechanisms to which the hon. member made reference. I am going to the United Nations tomorrow and I am sure 1 will have an opportunity to discuss this matter with Mr. Waldheim on the weekend and to clarify more fully what procedures should be followed from this point.


INDIAN AFFAIRS
Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern De-


velopment. It is related to the recent report that four officials from the district office in Alberta involved in the Indian economic development program have been suspended for improper conduct in the mismanagement of departmental funds. I would like to ask the minister if he will confirm the fact that the RCMP are investigating the allegations. Would he also indicate who requested the investigation, and the date it commenced?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: Yes, Mr. Speaker, that is accurate. The investigation was requested yesterday by my officials. It was based on an internal study of financial procedures which flowed from the problems we had a month or so ago when I appointed a new acting director to try to straighten out these things. I think that responds to the question asked.


John Robert Holmes: Mr. Speaker, one final question. In view of the fact that these concerns were raised by members on this side of the House almost nine months ago, including during debate on an allocated day June 22, 1977, would the minister indicate if the departmental review has been completed? Would he also indicate whether he will refer the results of that review to the Standing Committee on Indian Affairs and Northern Development who have a very particular interest in this matter?


James Hugh Faulkner: Mr. Speaker, I have no problem in referring the matter to the standing committee. In fact, I am rather looking forward to discussing this general problem with the standing committee when the estimates are before it. If there is a review which has a finite end and a report emerges from it, I will be pleased to bring the report with me when I appear before the standing committee. I think in this case it stemmed largely from my concern about charges that were being made, and I instructed my officials to look at the financial control procedures to see if any were not acceptable, were not correct or were being abused, and to clear them up. It may, in fact predate that, but my impression is that the recent inquiry stemmed from those instructions.


ADMINISTRATION OF JUSTICE
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question is to the Solicitor General, who is by now, I am sure, aware of the message received by the Toronto Globe and Mail from a caller identifying himself as a representative of the prisoners' revolutionary army, claiming responsibility for the tragic death of warden Michel Roy. They threatened further executions if the report of the subcommittee was not made public. It was, of course, made public some nine months ago.
Is the minister able to determine, from information received from his officials, the existence of such a group and, if such a
Oral Questions
group exists, what is the opinion of his advisers as to the serious nature of its activities?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, from the reports I have received to date, no link can be established between that one telephone call and any of the events in Montreal. I hope there is no such link. Further, I hope we do not play up that telephone call any more than it absolutely deserves. I will deal with it very seriously, but not with any exaggerated seriousness.


William Herbert Jarvis: Mr. Speaker, I thank the Solicitor General for that answer. I want to ask a supplementary, because some two weeks ago the Quebec human rights league warned of possible very serious trouble at Archambault. This was followed up last Monday in a letter that appeared in Le Journal de Montreal from Paul Rose, a member of the prisoners' committee, warning of some trouble.
What steps were taken as a result of those warnings, in terms of extraordinary precautions to safeguard correctional officers, and what steps are now being taken as a result of that terrible tragedy, the assassination, to protect correctional officers not just on duty but elsewhere?


Mr. Blais:: Mr. Speaker, the hon. member is, of course, aware of this because of his very intimate co-operation with my predecessor, in terms of the implementation of the recommendation of the subcommittee of the Standing Committee on Justice and Legal Affairs. He is also aware that the subcommittee directed its attention to the Archambault situation, which left some serious doubts as to the way it was being operated. He is also well aware that the Rose letter could well be attributed to some of the tightening up in the operation that took place as a result of the subcommittee's recommendation.
We are aware of some dissatisfaction among certain elements of the inmate population. We are taking very serious additional measures in order to protect penitentiary personnel both at the work site and in the general area of their residences.


ESTIMATES
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is to the President of the Treasury Board. Since many committees of this House are standing by for the usual tabling of the main estimates, is the President of the Treasury Board in a position to tell us when they will be tabled?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker I plan to table them within the next two weeks, probably about February 22.
8003 l-29'/i


Oral Questions INDUSTRY


REPORTED DIFFICULTIES IN SHOE INDUSTRY-GOVERNMENT ACTION TO RESOLVE
John Allen Fraser: Mr. Speaker, my question is to the Minister of Industry, Trade and Commerce. A week ago a Vancouver newspaper warned as follows:
Grim warnings of zooming shoe prices, the virtual disappearance of low-priced imports, supply shortages and retail bankruptcies are rumbling through the B.C. shoe industry.
As the minister knows, this is imputed to be a direct result of the import quotas last month. Has the minister been in touch with people in the shoe industry in Vancouver? Can he tell the House whether these very dire warnings are exaggerated, whether his department is considering the situation, and whether it might mean some changes in the import quotas that have been put in place?
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, I wish to inform the House that those dire warnings are exaggerated. What we are attempting to do is limit an importer to the average importation of the 1974-75 year. There were no dire shortages in those years, and there will probably not be any dire shortages in 1978 and 1979.


John Allen Fraser: Mr. Speaker, an official at Eaton's in Vancouver was asked about this and he pointed out-and I again quote from the article:
-the estimated cutback of 11 million imported shoes would mean domestic producers must increase their output by 50 per cent to make up the shortfall.
He went on to say that he discussed this matter with manufacturers in Canada and there is no possible way it can be done. Is the minister aware of this situation? Can he advise whether the figures quoted in the article are correct? If they are, we are in a serious shortfall position as far as the supply of shoes is concerned.


Mr. Horner:: Mr. Speaker, I have not seen the article and I cannot confirm the figure. In 1976, the Canadian shoe manufacturing industry had about 56 per cent of the Canadian market. In the first eight months of 1977, the share of the Canadian market to the Canadian shoe industry dropped to about 41 per cent. We are trying to bring it up to at least 50 per cent or 56 per cent of what it was in 1974 and 1975.


REQUEST GOVERNMENT RECONSIDER INCREASING IMPORTS OF BEEF
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is to the Minister of Industry, Trade and Commerce. It is with regard to a possible strike, or boycott, by some meat producers in the prairies toward the end of February. I am sure the minister knows that the high level of imports and low prices are the cause of a lot of unrest on the prairies. Will he

reconsider the decision to increase imports by two million pounds in 1978, and set import controls that will progressively increase the Canadian producers' share of our domestic market?


John (Jack) Henry Horner: Mr. Speaker, Canadian producers have about 93 per cent or 94 per cent of the Canadian market. We exported more beef last year than we imported. If one totals up live and dressed beef, the two million pound increase to Australia and New Zealand is an increase of 1.5 per cent to those countries. That corresponds with the increase in growth of the population in Canada. That, to me, is a very small increase.


Lorne Edmund Nystrom: Since some cattle prices in this country are between 20 per cent and 30 per cent below the cost of production, will the minister now introduce the bill promised by the Minister of Agriculture last fall, in Saskatchewan, namely, a meat trade authority to monitor and control imports of beef and to monitor the whole beef industry in this country?


John (Jack) Henry Horner: Mr. Speaker, I suppose all kinds of bills could be introduced into parliament. Whether they would be passed is another matter. However, I want to assure the hon. member and the House that the importation of beef is being very closely monitored by my department. It is certainly in reliable hands.


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: With respect, the minister did not answer my question. I asked whether it is the intention of the government to introduce this bill, because the Minister of Agriculture promised last fall that if the beef industry was in trouble we would get such a bill. Is it the intention of the government to introduce it?


John (Jack) Henry Horner: As I have already answered, Mr. Speaker, the beef industry is being monitored very closely by my department with regard to the question of imports and exports. We will continue to do that.


THE MINISTRY
Charles Joseph Clark: Mr Speaker, my question is to the Prime Minister. Last night on "The Watson Report", the Solicitor General was asked if he had been asked by the Prime Minister whether there might be any matters which might lead him, the Solicitor General, not to be able to carry out his responsibilities. He was asked whether that question had been asked by the Prime Minister prior to his appointment as Solicitor General. As I understand it, the Solicitor General said he would not answer that question.
Will the Prime Minister tell the House whether he, personally, as head of government, asked the present Solicitor Gener-


al whether there were any activities or events in the past which might prevent him from carrying out his responsibilities in that very sensitive position?


Pierre Elliott Trudeau: Mr. Speaker, I answered that question in general terms, because it was asked in general terms, about two weeks ago. The Leader of the Opposition asked me what procedure I followed before appointing people to the cabinet. I told him the kind of clearance 1 ask for. The answer is the same in this case.


Charles Joseph Clark: Mr. Speaker, it was the very general nature of the response earlier that caused me to raise the question again. The Prime Minister said earlier that he usually asks questions of this kind. I would like to know whether, first in the case of the present Solicitor General and, second, in the case of the former solicitor general, the Prime Minister asked these two people, prior to their appointment, whether there was anything in their background, or any activity that might render them unfit or unable to carry out the position of Solicitor General.
It is a specific question relating, first, to the present Solicitor General and, second, to the previous solicitor general. What was the standard of questioning and care exercised by the Prime Minister, personally, in each of these cases? Did he ask that question of each of them?


Pierre Elliott Trudeau: I repeat, if the Leader of the Opposition refers to my earlier answer, I indicated that I always ask the security services of the RCMP to inform me of anything which might be negative in the file of any individual I am considering appointing to cabinet. That is the first step. The second step is that I am satisfied that the lady or gentleman I appoint to cabinet will be able to exercise that role honourably.


Charles Joseph Clark: We know what the general procedure is; we know that in this case the screening authority did its job. We want to know whether the Prime Minister did his own job; whether he, personally, put to those two ministers, before their appointment, the question whether there was anything in their backgrounds which might prevent them carrying out their duties. In the case of the previous solicitor general, did the Prime Minister ask that question, personally? In the case of the present Solicitor General, did the Prime Minister ask that question, personally?


Pierre Elliott Trudeau: I have told the Leader of the Opposition that I always satisfy myself that the members appointed would serve in that office with honour and distinction, and 1 am satisfied that they have.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: This is a very important matter relating to the standards of the government. We in the House of Commons have a right to know what action the Prime Minister took. He said he satisfied himself. I want to know whether the Prime Minister, personally and specifically, asked the present Solicitor General or the previous solicitor general whether there was
Espionage
anything in their backgrounds which might prevent them carrying out the responsibilities of this sensitive portfolio. Did the Prime Minister ask that question, specifically, in one or both those cases?


Pierre Elliott Trudeau: It seems to me the essence of my answer is that I am satisfied when I appoint a person to the cabinet. The process by which I satisfy myself, the reasons for which I reach my conclusion, the questions I ask and the answers I receive, are none of the hon. member's business.


Some hon. Members:: Hear, hear!


Some hon. Members:: Shame!



ROUTINE PROCEEDINGS


John (Jack) Henry Horner: Mr. Speaker, pursuant to Standing Order 41 I wish to table, in both official languages, the first semi-annual report of the Department of Industry, Trade and Commerce on international economic boycotts.



EXTERNAL AFFAIRS


Donald Campbell Jamieson: Mr. Speaker, at noon today, on my instructions, the Under-Secretary of State for External Affairs requested the Ambassador of the Soviet Union to withdraw 11 Soviet nationals from Canada for engaging in inadmissible activities in violation of the Official Secrets Act, and of course of their status in Canada. Two other Soviet nationals who were involved have already departed Canada but will not be permitted to return. A strong protest has been conveyed to the Soviet authorities about these activities.
The Soviet Ambassador was informed that the Canadian government had irrefutable evidence that all 13 persons had been involved in an attempt to recruit a member of the RCMP in order to penetrate the RCMP Security Service. Nine of the Soviet nationals still in Canada are employees of the Soviet embassy, one is an official of the Soviet Trade Office in Ottawa, and one is a member of the International Civil Aviation Organization Secretariat in Montreal.

The Canadian authorities have informed the Ambassador of the Soviet Union today of the discovery of an attempt by the


Espionage
Soviet intelligence service to recruit a member of the RCMP in order to penetrate the RCMP Security Service. Thirteen nationals of the Soviet Union have been involved in this operation. Two have already left Canada and the eleven others have been requested to do so. Nine are employees of the Soviet Embassy in Ottawa; one is an employee of the Secretariat of the International Civil Aviation Organization in Montreal and one is an official of the Soviet Trade Office in Ottawa.
Not only did this operation involve a large number of persons but it had been elaborately planned, involving coded messages, clandestine meetings, secret concealment devices and the payment of $30,500. This unsuccessful operation was mounted by the Soviet intelligence service in April, 1977. It has involved no compromise to national security.

The Soviet nationals involved are:
Igor P. Vartanian, First Secretary responsible for sports and cultural affairs, Soviet embassy, Ottawa.
Nikolai M. Talanov, counsellor, Soviet embassy, Ottawa.
Anatoly A. Mikhalin, official of the Soviet Foreign Trade Office, Ottawa.
Vadim A. Borishpolets, attache (Consular Affairs), Soviet embassy, Ottawa.
Vladimir L. Souvorov, Second Secretary, Soviet embassy, Ottawa.
Vladimir I. Oshkaderov, translator, International Civil Aviation Organization (ICAO), Montreal.
Yevgeniy K. Koblov, clerk, Soviet embassy, Ottawa.
Gennadi V. Ivashavitch, Third Secretary, Soviet embassy, Ottawa.
Oleg D. Reztsov, attache, Soviet embassy, Ottawa.
Vera A. Reztsov, employed in the library of the Soviet embassy, Ottawa.
Petr R. Lillenurm, Second Secretary (Consular Affairs), Soviet embassy, Ottawa.
Voldemar P. Veber, formerly Second Secretary in the Consular Division, Soviet embassy, Ottawa. Returned to the U.S.S.R. July 1977.
Andrei V. Krysin, economist, Soviet Foreign Trade Office, Ottawa. Returned to the U.S.S.R. December 1977.
Early in 1977 two Soviet intelligence officers approached a member of the RCMP and offered him an unlimited sum of money to spy for them. This member of the force had, on an earlier posting and in the normal course of his responsibilities, come into infrequent contact with one of the Soviet officials in this case. To establish the ultimate purpose of the Soviet approach, the member of the force was authorized, by the RCMP, under carefully controlled circumstances, to meet with the principal agent, Mr. Vartanian, in accordance with elaborate instructions he had received from the two Soviet officials. Between April, 1977, and the present he met secretly with the principal agent on seven occasions.

The 12 other Soviet nationals identified with this operation were involved in different support functions including transportation, counter-surveillance, and regular weekly observation activities.
This case proved to be a classic example of an intelligence operation, involving complex signalling systems, coded passwords, and secret concealment devices, all for the purpose of arranging clandestine meetings between the RCMP member and the Soviet agent.
As an example, on different occasions filmed instructions were passed to the RCMP member in a hollowed-out stick and a specially prepared package of cigarettes. The RCMP member was instructed by the agent to obtain information on such subjects as the methods the RCMP Security Service employed against Soviet intelligence services in Canada, character assessments of RCMP personnel, and details regarding RCMP counter-espionage cases. The RCMP member in return provided the Soviets with carefully screened non-sensitive information or completely fabricated material. The fact that he was paid $30,500 for information of no consequence provides an indication of the importance the Soviet intelligence service attached to this operation. The important point for the House to note, however, is that this case has involved no compromise of Canada's security.
This Soviet recruitment attempt is, nevertheless, a source of serious concern to the government. Its importance should be seen in the context of the unusual lengths to which the Soviet intelligence service was prepared to go to suborn a member of the RCMP. The case did not have any other implications for Canada's security. The evidence derived from this operation indicates that it was directed solely against the RCMP.
The firm action taken by the government in this case will remind the Soviet Union of our determination to deter foreign espionage. The government regrets that activities of this kind should be conducted at a time when there are efforts under way, to which both Canada and the Soviet Union have subscribed, to reduce the level of international tensions by overcoming mistrust and increasing confidence. Activities such as those I have disclosed to the House are contrary to that objective and represent a serious setback in our bilateral relations. This incident, and the action we have had to take today, will inevitably place strains on our relations with the Soviet Union. Nevertheless the Canadian government continues to attach importance to Canadian-Soviet relations and hopes the Soviet government does likewise.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, the statement just read to this House by the Secretary of State for External Affairs (Mr. Jamieson) reveals a very shocking state of affairs, and a matter that is of great concern to all members of the House. Before commenting briefly upon the substance of the report, I should like to express my appreciation to the Secretary of State for External Affairs for the very unusual


courtesy he extended to me and, I believe, to leaders of the other parties, by not only making a copy of the statement available to us in advance but also by providing us with a short personal briefing regarding the contents of the statement.


Some hon. Members:: Hear, hear!


Mr. McGrath:: That's because he's a Newfoundlander.


Charles Joseph Clark: Mr. Speaker, the minister's statement reminds us in a direct way that the current east-west detente is at best a limited agreement. The reality, although sad, is that the countries of the communist block persist in pursuing activities which are neither friendly nor of a nature likely to foster positive relationships between countries. Because of its participation in NATO and NORAD and given the proximity and the friendship linking Canada and the United States, our country-sad but true-sometimes appears to be an ideal target for activities of this kind.

The minister's statement is a stark reminder to us that the detente between east and west is, at best, a very limited understanding. The hard reality, unfortunate though it is, is that nations of the communist bloc persist in activities that are neither friendly nor conductive to relations among countries.
It is also unfortunate but true-and we must recognize this-that Canada continues to be a particular target for such activities. Our membership in NATO and in NORAD, as well as our proximity and close relationship to the United States, seem to invite a level of espionage activity, or at least attempted espionage activity, which must be of great concern to all in this country.
Members of my party, particularly the hon. member for High Park-Humber Valley (Mr. Jelinek), have taken a very leading role-


Some hon. Members:: Hear, hear!


Charles Joseph Clark: -in trying to determine through oral and written questions in this House, the nature of the threat of espionage or other related activity that cannot by any stretch of the imagination be called acceptable within the context of diplomacy. He has sought to determine the nature and has also sought to determine the response of the government to this general threat. I believe the statement made today by the minister will cause my colleague and others in the House of Commons to want to continue that kind of an investigation into the extent and nature of a threat to our security posed by persons who are in this country under diplomatic cover.
I am sure all members of the House want to join me in congratulating the Royal Canadian Mounted Police for the-


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Mr. Speaker, a member on the government side laughed at that. I regret that because I am sure this is a matter
Espionage
that all members, including the Minister of Industry, Trade and Commerce (Mr. Horner), agree is a case where it is just and proper that the House of Commons extend its most serious congratulations to the Royal Canadian Mounted Police for the thoroughly professional and effective manner in which members of the force pursued this difficult situation to an effective conclusion.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I must say that I find it very strange that ministers on the other side would try to shout down the Leader of the Opposition when he extends to the Royal Canadian Mounted Police some very deserved congratulations.


Some hon. Members:: Hear, hear!


Mr. Ouellet:: You are hypocrite.


Mr. Speaker:: Order, please. It seems to me the matter was serious enough that the Secretary of State for External Affairs Mr. Jamieson was given quiet attention when he made his statement, and I think the hon. Leader of the Opposition (Mr. Clark) should be extended the same courtesy.


Charles Joseph Clark: Thank you for your intervention, Mr. Speaker. The minister said in his statement, and indicated to me previously, that a strong protest had been conveyed to Soviet authorities. I think that is appropriate. While I recognize that it is not always normal practice in affairs of this kind, I think, given the unusual circumstances, that we in this House of Commons would like the opportunity to see the aide memoire or protest which the minister despatched. I would therefore ask the minister if he would be prepared to table the text of the aide memoire which he indicated had been sent to the Soviet authorities.


Donald Campbell Jamieson: Yes, Mr. Speaker. I can do that now if it is the wish of the House.


Mr. Speaker:: Is it agreed that the Secretary of State for External Affairs shall have leave to table the aide memoire now?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed, and so ordered.


John Edward Broadbent: Mr. Speaker, the activities undertaken by certain Soviet officials, as outlined by the Secretary of State for External Affairs (Mr. Jamieson), are extremely serious indeed. Before commenting briefly on those activities and the course of action taken by the government, I should like to join the Leader of the Opposition (Mr. Clark) in extending my appreciation to the minister not only for notice of the statement he was going to make today but for the personal briefing he provided to explain the circumstances. I think that was an exceptional course of action, for which the minister deserves the commendation of this House.


Espionage


Some hon. Members:: Hear, hear!


John Edward Broadbent: As I was saying, these offences are extremely serious. They are wrong in principle, and of course wrong in practice. To put it bluntly, they are particularly odious when one neighbouring country inflicts them upon another. All Canadians should feel particularly sensitive on that point.
On behalf of my colleagues, 1 extend my appreciation to the Royal Canadian Mounted Police for their good work in security matters. Obviously it was a professional job. They did their work, and they got the culprits.


Some hon. Members:: Hear, hear!


John Edward Broadbent: This is a series of events which is particularly unfortunate at these times in terms not only of the detente issue, because we are part of the western alliance and it has serious implications for it, but particularly in terms of the improving relations which had existed between the Government of Canada and the government of the U.S.S.R. There can be no doubt that this represents a serious setback, clearly in the face of those people of good will in both governments who, in recent years, have been attempting to improve and make more civilized the relationships between our two peoples. The authorities in the Soviet Union, who are responsible for these despicable activities, now have to assume responsibility for the unfortunate consequences which will follow from them.
It is worth emphasizing the Soviet Union, although it would be naive to ignore other great powers in the world which are still conducting these kinds of activities. But in this particular instance we are discussing the Soviet Union. The fact that this is still ongoing in 1978-and we are not back in the forties or fifties-indeed clearly illustrates how far we have yet to go in the modern world in trying to establish civilized and decent working relationships among all the nation states.
Under the circumstances, the response of the government in requesting the expulsion of 11 Soviet nationals who are still here, and the retention at home of two others who went back to the Soviet Union for a vist and planned to return, is entirely acceptable. Is this sufficient in terms of the relationships which were improving between Canada and the U.S.S.R.? We saw the clear possibility of the expansion of trade and the expansion of intercourse between our peoples, and now we witness this kind of dastardly act inflicted upon us. I raise the question as to the appropriateness of the government's response. In the view of my colleagues, certainly the minimum is to request those who were at fault to stay out of our country. However, on behalf of my colleagues, it seems to me something else should be done. I suggest, with all seriousness, that the Secretary of State for External Affairs should think about the appropriateness of withdrawing the Canadian ambassador from Moscow on a temporary basis until relationships, and particularly this incident, are clearly discused and resolved.


Some hon. Members:: Hear, hear!


Joseph Adrien Henri Lambert: Mr. Speaker, first of all, like the hon. leader of the official opposition and the leader of the New Democratic Party, 1 would like to sincerely thank the Secretary of State for External Affairs (Mr. Jamieson) for his great courtesy in notifying us in advance of the nature of his statement and for having us meet in his office to discuss this matter very seriously.
We do not often have the opportunity to agree to discuss a matter as serious as that which has just been brought up in the House of Commons by the Secretary of State for External Affairs. As a Canadian, I was shocked to learn that Soviet citizens employed in the U.S.S.R. embassy in Canada had taken part in espionage activities. It seems to me that this can be explained in wartime as it is then more or less normal for countries to try to learn the secrets of others. But in peacetime, and I hope that we are now in peacetime, when we try to work together to improve relations among nations so that peace may bring about more prosperity in each country, such situations are truly shocking.
Mr. Speaker, 1 am convinced that today in the House, certain members have related the important matter communicated to us by the Secretary of State for External Affairs and the Igor Gouzenko espionage affair which happened a few years ago and which received much publicity. I recall this affair very well and I would like the younger members of the House to take the trouble to get to the bottom of things before relating this espionage activity of a few years ago and that of which we have just been informed by the Secretary of State for External Affairs.
Mr. Speaker, I also recall that on December 20 of last year, there was a debate in parliament about external affairs. I remember very well that all hon. members who took part in this debate showed much patriotic feeling and supported the external policy of our country. Whatever the party in power, as I said at that time, Canada is a country whose citizens are respected and loved throughout the world.
I also remember, I think it was in October 1973 if my memory serves me right, that I had the honour to participate in a NATO conference in Turkey. It was on the U.S.S.R. border. At that time aircraft were flying over an their way to Lebanon where the war was going on. I was very upset to hear the noise of those heavy aircraft transporting armaments and soldiers going to a foreign country. At that time, Mr. Speaker, you were also a member of the delegation and you participated in a debate of the NATO Plenary Assembly and I remember very well what you said. In fact you expressed the hope as a member of that delegation that as long as Canada is a democracy it will promote that detente between the two blocks. I still agree today that we should do everything to encourage the detente. As Canadians, we have, more than anyone else, an interest in encouraging that detente as geographically we are between two great nations with incredible strength. On one side the U.S.S.R. and on the other the United States.


We must be very careful every day that the little secrets we have to ensure our defence are not known by those big powers so that we can ensure our independence and security. If we always act as we did today by making the whole population aware of the dangers of spying activities within our borders we shall draw the problem to the attention of every Canadian so that every one, whatever his language or religion, will be first of all a Canadian proud of his country and ready to defend it against everyone, and ready to co-operate with the government to ensure the security of our country and make sure that in foreign embassies on Canadian territory no one is working to discover our little secrets, of which we are proud, but rather to establish better co-operation within our nation through those embassies.
Once more I commend the Secretary of State for External Affairs and I wish him good health so that he can achieve his mission. I saw him last week on TV like other hon. members when he was travelling in China to meet the great leaders of that country. Notwithstanding our political views and options, when international matters and relationships with other nations are at stake we must all share the same pride in our country and defend our Canadian rights throughout the world.


Charles Joseph Clark: Mr. Speaker, I have at least one question for the Secretary of State for External Affairs, and I am sure my colleagues will have other questions as well. I understand the minister himself was advised of these matters in the middle of last month. Since this is a security matter, can the minister tell us whether advice was given during the course of the operation to the former solicitor general of Canada and what was the nature of the involvement of the Solicitor General himself or of his officials in this matter?


Donald Campbell Jamieson: Mr. Speaker, I am afraid I cannot answer in specific terms. I am not copping out when I say that perhaps the question might more properly be directed at the appropriate time to the Solicitor General. I can explain to the House and to the Leader of the Opposition that, in so far as security investigations are concerned, generally speaking the Department of External Affairs does not become involved in them until such time as a case is established. We are then advised by the RCMP, and the necessary foreign relations actions are taken. So the extent to which the former solicitor general was involved during the period of the investigation is not something which is known to me personally.


Allan Frederick Lawrence: The minister's statement does not make clear to what branch of the RCMP the original member of the RCMP who was approached belonged. Was he a member of the Security Service or was he a member of one of the other branches of the RCMP?


Donald Campbell Jamieson: In this regard I am sure that an opportunity will be provided for a more detailed statement by the RCMP sources on the very specific matters concerned. My information is that on the two occasions involved when the RCMP
Espionage
officer concerned was, for example, first associated with or first came into contact with the Soviets, he was working in a particular job. Subsequently he was transferred to another job, and it was in that second job that contact was made with him in an effort to suborn him. What specific titles he held is not information which I have directly in front of me. I do not think it is a matter of any confidence. I would be glad to try to find it out but, as I understand it, in one case he was working for a particular branch and it was after he was transferred that the Soviets, who had been familiar with him in the first job, made the contact with him later.


John Edward Broadbent: Mr. Speaker, I would like to ask the minister, so that it becomes part of the public record, if he would tell the House when he, as a Secretary of State for External Affairs, first learned of the espionage activities that were being undertaken. Can he explain to the House why there was a delay in time? I know he was out of the country, but I understand there are other reasons why there was a delay in time between when he learned of the activities on the one hand, and today's announcement on the other.


Donald Campbell Jamieson: There were two reasons. It was January 9 when I was advised formally that the RCMP had in fact completed, or virtually completed- I emphasize the word "virtually"-their investigation. The time lapse between then and now was due to two reasons. One was that I was not available for a matter of two weeks, being out of the country, and the other was, as I understand it, that there was a kind of final liaison which the RCMP wished to undertake in order to conclude the investigation and to complete their activities. Upon my return on Monday I was advised that indeed no further purpose would be served by continuing the operation and was advised directly by the RCMP authorities of the situation, and I chose immediately to take the action which I announced in the House today.


John Edward Broadbent: I should like to ask the minister another question. Considering the fact that the Government of Canada now has expelled 13 Soviet nationals, asking 11 to leave and prohibiting the re-entry of two others, and considering that that is the minimum action that one could expect to take under the circumstances, what other alternatives has the government considered, and specifically, given the seriousness of this action, why did the government not withdraw the Canadian ambassador from Moscow for a period of time to indicate just how seriously we regard this, until further resolution of the matter and further discussion of the unfortunate series of events perpetrated in Canada by the Soviet Union?


Donald Campbell Jamieson: I hope I have demonstrated today my desire to be as frank as possible in discussing this matter, but if I am somewhat restricted in my answer to that question, let me simply say that, of course, having taken this action, we are in no way aware at this moment of what action the Soviets themselves may take. I would think that under those circumstances it would be advisable to have an ambassador on the spot in Moscow against any eventualities which may occur.
2702


Espionage


John George Diefenbaker: Mr. Speaker, I wish to put a question to the Secretary of State for External Affairs who has not shown the insolence, arrogance and overbearing attitude to parliament which was evidenced this afternoon by the Prime Minister.


Some hon. Members:: Hear, hear!


John George Diefenbaker: The minister's attitude was in keeping with parliamentary tradition and his appreciation of parliament, which he has shown again today.
Having regard to the overwhelming power in nuclear weapons on submarines in the Atlantic, as has been set forth in detail by admirals in the navy, the great danger to North America and the cause of it, will the minister do his part in an effort to arrange a parliamentary debate immediately so that we can discuss at length the seriousness of the threat against us, as evidenced by what the minister spoke about today, in order to ensure that complete information can be given? If necessary, we might have a closed session such as we have had from time to time, for example, immediately after the war.


Donald Campbell Jamieson: Mr. Speaker, I presume this would be a matter for discussion among House leaders. At the instigation of the right hon. member we did have a couple days of general debate on foreign affairs. I assume, from the right hon. gentleman's preamble, that the debate he proposes would relate directly to defence matters. I would be glad to take this up with the Minister of National Defence and also with the government House leader. I personally have no objection to it. Indeed, I believe there is some effort under way at the moment to have members of parliament, who are associated with the NATO Association, have a discussion with the Minister of National Defence and myself. Anything of this nature which would enhance the general level of information and knowledge of hon. members, I think would be very useful.


John George Diefenbaker: Will the minister press for such a sitting in the House because the situation on the Atlantic, on the Mediterranean and the sea adjacent to South Africa has placed the U.S.S.R. in a position of overwhelming power. Warning of the danger has been given over and over again in the United States Congress. I hope something will be done in this connection because what was revealed today illustrates the attitude of the U.S.S.R. toward the reasonable and responsible attitude taken by Canada with regard to the U.S.S.R. in order to achieve renewed comity and good will between our nations.


Donald Campbell Jamieson: I will do my best, Mr. Speaker.


Joseph Adrien Henri Lambert: Mr. Speaker, I have only one question for the Minister. In his statement the Secretary of State for External Affairs (Mr. Jamieson) disclosed the names of the Soviet citizens involved. He also referred to an RCMP officer and to a sum of $30,500 which was paid to that officer to help him obtain some secrets. Is it out of simple prudence or

because of necessity that the minister did not disclose the name of that officer? Surely this question has occurred to other members as well, and if it is in the interest of the country that the name be kept unknown, I am prepared to accept the statement as it is, but on the other hand, if it is in the interest of the country that the officer's name be disclosed, I submit it is all to the honour of that person and it should not be a disgrace for him to have his name revealed before Parliament.


Donald Campbell Jamieson: Mr. Speaker, it is obviously a matter of importance and security that the name of the RCMP officer in this case not be disclosed, and I know hon. members will not press me in that regard.


Mr. Jelinek:: Mr. Speaker, 1 have a number of very important questions, so I hope Your Honour will bear with me. Some of the speakers today indicated shock at what has happened in this regard. I am not shocked or surprised whatsoever because, as the minister will recall, well over a year ago I made public a list of individuals whom I asked the government to inquire into. Individuals from inside the Soviet embassy were involved, I thought, in activities incompatible with their status as diplomats. I have not double checked, but at least eight or nine people on the list to which I have just referred have either already been asked to leave the country or have now been expelled, including the principal agent, Mr. Vartanian. Since some of these so-called diplomats have been asked to leave the country, what assurance does the minister have that the government has cleaned house, and why has it taken so long since I made this list public to bring this matter forward?


Donald Campbell Jamieson: Mr. Speaker, not meaning any offence to the hon. member, I am sure he would accept that if he was in possession of that list, the RCMP and perhaps some others were in possession of it as well. The mere fact that the association of a resident diplomat with the KGB or, for that matter, any other foreign intelligence agency, is known is not of itself, obviously, sufficient evidence on which to take either expulsive action or anything related to it. What is necessary is to establish that the conduct of that person is inconsistent with his status in Canada as a registered diplomat. I think it has been said by hon. members on both sides of the House that the RCMP was aware of the list to which the hon. member referred, has been very diligent, and has produced over a period of approximately seven months evidence which is adequate to take the actions we have taken today.


Otto John Jelinek: Mr. Speaker, the minister indicated that nine embassy employees and four others, a total of 13, were involved in recruiting the RCMP officer. Were the 13 agents, as we now know them, involved in other subversive activities in Canada?


Donald Campbell Jamieson: Mr. Speaker, I am advised that all of the parties whose names I revealed today were associated exclusively with this one particular action whose sole objective was to penetrate the RCMP Security Services and establish within those services someone whom they regarded as being a reliable


source of information. My statement makes the point that it is an indication of the important the Soviets attached to this there were so many people involved. 1 have no doubt that the RCMP would be prepared to provide certain information as to the roles played by certain of these parties. I can, however, tell the hon. member in a general way that there was a central person involved who was the principal contact. Many of the others were involved in transportation, in the identification of signals, and in various other activities related to and part of the establishment of the two-way contact. I am perfectly satisfied that all were involved and that they were involved in this particular matter.


Otto John Jelinek: In the year between February, 1976, and January, 1977, during which time, according to the minister's statement, the RCMP was aware of some of these happenings, the minister's own department granted 908 special travel permits to diplomats from the Soviet embassy to travel in parts of Canada other than the national capital region, including 41 special travel permits to the principal agent named today, Mr. Vartania. Eighty-eight were granted to Mr. Veber. The total number granted is 908. I wonder, if the RCMP was in the know with regard to these activities over the last year, why was the minister's department giving these individuals travel permits with such frequency and permitting them to travel outside the national capital area where surveillance obviously would be far more difficult?


Donald Campbell Jamieson: Mr. Speaker, there are a number of conclusions in the question which I would prefer not to go into in detail. I suggest in a hypothetical sense, however, that it is not inconceivable that the travel permits might have been authorized and issued on the basis of the investigation.


Leonard C. Jones: Mr. Speaker, I would like to lump my questions together. With the minister's capability I am sure he will be able to answer them all. Quite frankly, I am not really surprised. I am disturbed because things have been a bit too cosy between the U.S.S.R. and Canada for far too long. 1 would like to know what measures are now being taken to prevent the recurrence of this type of situation. Has the Canadian government any further steps in mind regarding a temporary severance of diplomatic relations between Canada and the U.S.S.R.? What investigations are still going on with regard to other Soviet nationals either inside or outside Canada? Are there other similar investigations regarding any other country in espionage ongoing, and have any espionage approaches been made, to the knowledge of the minister, to any other person or persons in Canada?


Donald Campbell Jamieson: Mr. Speaker, with the greatest of respect and with, as I said, my assurances that I want to be as open as I can, I reluctantly have to decline to answer all of those questions.


William Herbert Jarvis: Mr. Speaker, I have two brief questions for the Secretary of State for External Affairs. In the addendum to the aide memoire it is said four persons were ordered to leave
Espionage
Canada within 48 hours and, I believe, seven in about two weeks. Is the difference exclusively because of the degree of activity which the various persons within the two groups were perceived to participate in this affair?


Donald Campbell Jamieson: Mr. Speaker, yes, the hon. member has it exactly. The four who have been given 48 hours' notice to leave are those who were very specifically and clearly in breach of the Official Secrets Act. Incidentally we have had advice from reputable authorities that all of these people under normal circumstances could have been charged with some breach, but that these four came under the provisions of the Official Secrets Act. The remainder were, what I might describe as, supporting players who unquestionably had breached their status as diplomatic persons within Canada but whose offence, if one wishes to use that word, was not of the same magnitude as that of the four principals involved.


William Herbert Jarvis: Was this entire law enforcement operation carried on exclusively within the RCMP, or was it directed under the authority of the police and security planning analysis branch, which is a branch within the Solicitor General's department?


Donald Campbell Jamieson: Mr. Speaker, subject to later qualification by the Solicitor General, and I want to make that point because I am speaking on the basis of my own information and assumptions, I believe it was exclusively an RCMP operation.


Mr. Crouse:: Mr. Speaker, the statement made by the Secretary of State for External Affairs will certainly come as a shock to many Canadians, and especially his announcement that 13 have been declared as persona non grata. I would like to ask the minister what percentage the 13 represent of the personnel that are presently working in the Soviet embassy here in Ottawa, and would the minister indicate how many people still remain in that embassy? Finally, do we have any guarantees whatsoever that the 13 who have been ordered to leave Canada will not be immediately replaced by 13 others who will carry out similar activities?


Donald Campbell Jamieson: Mr. Speaker, the number on strength at the Soviet embassy is 64, as approved by us under the international rules of procedure. Of the 13 referred to today, I recall that two have left, so we are speaking of 11. Of that number 10 are actually on that strength of 64. One is with the International Civil Aviation Organization in Montreal. This means a reduction of the 64 to presumably 54-or to 53-I am not precisely certain.
On the matter of replacements, the Under-Secretary, on my instructions and with my approval, indicated to the Soviet Union today that we will examine very carefully all requests for replacements and that, furthermore, given the events which we have now reported to the House, we will examine also very carefully the size of the personnel presently within Canada who are under what might be described as diplomatic immunity. Therefore, in a general way my answer to the hon. member is that we will move very cautiously in terms of replacements. As at this moment we are not proposing to reduce the assigned
80031-30)4


Espionage
total of 64. I will be glad to explain to the hon. member in private the reasons why that is the case.


Lloyd Roseville Crouse: My supplementary question is to the minister, and I thank him for his answer.
I wonder if he could inform the Elouse how many personnel we are permitted to have in the Soviet Union. Secondly, are any of the names of the people whom you have mentioned today in any way connected with the Soviet consular office that is presently maintained in Elalifax where there is a liaison between shore personnel and the large Soviet fleet which is operating within our 200-mile economic zone?


Donald Campbell Jamieson: Mr. Speaker, I do not have the precise figure of the number of Canadians in the Soviet Union at the present time. I can say with almost 100 per cent assurance that it comes very close to 64, because the general pattern has been a one for one type of situation. Once again I would ask the hon. member to give me the benefit of the doubt until I have had a chance to check it fully, but that is a reasonable expectation.
In reply to the hon. member's second question, there is no linkage whatsoever, at least anything that has been perceived, between this operation and the general fisheries office to which he has made reference.


Mr. Ritchie:: Mr. Speaker, my question is to the hon. minister. In view of suggestions at the Keable commission hearings that money from outside Canada went to subversive groups, I would like to ask the minister if this episode has any connection with any such events of which he may be aware?


Donald Campbell Jamieson: Mr. Speaker, no. There is no such connection as I have said repeatedly, and I wish to emphasize, that all of the evidence I have seen, and everything that the RCMP has produced, lead me to the satisfactory conclusion that this activity was expressly and directly related to an effort to penetrate the RCMP Security Service.


Mr. Alkenbrack:: Mr. Speaker, the House was both surprised and perplexed to see the Prime Minister leave the chamber just prior to the minister's announcement. Does the minister know the reason why the Prime Minister walked out of this House immediately before the Secretary of State for External Affairs made this important announcement pertaining to our national security?


Donald Campbell Jamieson: Mr. Speaker, yes I do. 1 really think the question is quite irrelevant. The Prime Minister and I discussed it earlier this afternoon. He had an important meeting which it was not possible for him to change. We even discussed the possibility of changing the time of the statement in order to accommodate him. I can assure you it was through no lack of interest. The Prime Minister of course, was fully briefed on the situation.


Mr. Scott:: Mr. Speaker, I would like to ask the minister, with respect, why he did not make the announcement until this date? Given the fact that he was away out of the country, and keeping in mind our association with NATO and other coun-

tries, for him to wait two weeks to make the announcement on a matter of such significance, after being fully knowledgeable of the events, makes me think he should have returned home for this particular reason.


Donald Campbell Jamieson: Mr. Speaker, perhaps I may have given a somewhat incorrect impression; I do not think so. In any event, so that the hon. member can have the benefit of the doubt, I said that on January 9 I was provided with a general briefing. At that time there was no suggestion that we ought to have moved immediately. There were indeed some other things that it was felt ought to be done in the interim. I hope hon. members will appreciate that I am going about as far as it is possible for me to go in these circumstances.
It was not until January 26 that the RCMP, in writing and in detail, was able to put before us the documented, factual information on which, after all, the decision had to be made. It is one thing to be reasonably certain of something; it is something else to say, "Here it is. The evidence is now clear cut." I do not think the difference between January 26 and now is of any great significance.


Mr. Munro (Esquimalt-Saanich):: Mr. Speaker, I have a couple of questions I would like to put to the Secretary of State for External Affairs. In the aide-memoire which he very kindly provided to members, there is a clear indication that, prior to these incidents, within the last 14 months there have been three other incidents. How many employees or officers from the Soviet Embassy in those three individual instances were declared persona non grata?


Donald Campbell Jamieson: Mr. Speaker, the hon. member said members from External Affairs. I presume he meant from Soviet External Affairs. My recollection is that I have referred to all three of those incidents in the House. Once again, may I ask the hon. member for some leeway on my memory. I know that up until now we have had incidents involving the Soviet Union, with a total of eight people. Whether some of them were declared NPG, whether some had left the country, or whether it was resolved in some other manner, I do not know. However, there were three incidents that have come to public knowledge and to which reference has been made in the House.


Mr. Paproski:: 


Donald W. Munro: 1 am sure the minister meant PNG. May I ask the minister whether in those instances there was retaliation on the Soviet side declaring some of our officials or personel PNG in retaliation.


Donald Campbell Jamieson: Mr. Speaker, no member would probably be more aware than I that it is not always easy to identify retaliation as such. However, if the hon. member is asking me if some individual and specific person was asked to leave, to the best of my knowledge, no.


Donald W. Munro: Mr. Speaker, my final supplementary is with relation to a comment made by the Secretary of State for External Affairs, when he declared he instructed the Under-Secretary of State to declare specifically to the Soviet ambassador when he came in that the Canadian authorities would be examining most carefully any applications for replacement. I am surprised there are going to be any replacements. However, since the government has decided there might be, I wonder whether this suggests that applications in the past have not been given careful examination.


Donald Campbell Jamieson: No, Mr. Speaker, I think that would be an improper inference. Also, on the question of numbers, may 1 remind the hon. member that many representations are made to us by the Soviet Union and, I should also add, by other bodies and so on, with regard to numbers. I think we make a very thorough assessment of need. I am satisfied that we do. Indeed, there are some cases where we have been criticized for not permitting more trade representatives, for example, into Canada. We have a situation in which I have, in the best diplomatic language that I know, and the experts know, made it clear that we are going to examine very carefully the specific needs for replacement and for any change in the current levels within the Soviet Union. I think that is about as much as I ought to say at this present time.


Mr. Cossitt:: Mr. Speaker, I compliment the minister on a very forthright statement on what has happened and, so far, a very forthright way in answering questions. I would like to ask the minister a question and a supplementary, the question being in two parts. First, have any Canadian citizens outside the RCMP and outside the political security analysis group been in any way involved in this operation, in other words assisting the Soviet Union in their operations? This may perhaps be premature, but has there been any indication from Moscow as yet, as so often happens when other countries have expelled Soviet diplomats, that they have retaliated, not on a justifiable basis, but simply kicking people out saying, "Well, you people are doing the same thing"? That is the first question. 1 have a supplementary, if I might be permitted to ask it afterwards.


Donald Campbell Jamieson: Mr. Speaker, the first part might more properly be directed to a spokesman for the RCMP. Again to the best of my knowledge, there were no people other than RCMP officers involved. On the second question, the hon. member is quite right. It is still too early to have received any reaction from the Soviet Union. I should indicate to the House that we have told the Soviets that any action by them with regard to Canadian personnel would be considered entirely unjustified because there is no comparable activity of this kind being undertaken in the Soviet Union, or anywhere else for that matter.


Thomas Charles Cossitt: Mr. Speaker, my supplementary goes back to a question answered in the House by the immediate former solicitor general a month or so ago. He admitted to the House, after some three years during which I tried to draw out the information, that there was such a thing known as the "Fea-
Espionage
therbed Operation." Is the minister prepared to confer with the present Solicitor General with a view to making public the nature of the "featherbed" file which, I am sure he and other ministers must realize, would shed a great deal more light on the operation in Canada of such things as has been brought out today? Will he attempt to have some of this information made public from the "featherbed" file as to what has been going on in Canada over a period of years?


Donald Campbell Jamieson: Mr. Speaker, all I can say is that the information provided to me, and I have no reason to question it in any way, is to the effect that this was exclusively the kind of operation that I have outlined. It had nothing to do with any other of the ongoing activities of the RCMP. Therefore, I do not believe there is any relevancy between what we have been discussing today and the question the hon. member has asked.


Steve Eugene Paproski: Mr. Speaker, I would like to ask the minister one question. In view of the fact that Igor Vartanian was the sports and fitness representative for the Soviet Union when the minister learned about this particular espionage on January 9, did he inform our Minister of State (Fitness and Amateur Sport) of Igor's activities in Canada?


Donald Campbell Jamieson: No, I did not, Mr. Speaker. I realize, of course, that levity is not wise in these circumstances. In case I did not give a full answer, I should add that I did not know the gentleman's name at that particular time. I was only when the final and detailed facts came to my attention.


Steve Eugene Paproski: Mr. Speaker, that was a very serious question. It was not intended to be at all funny. I was very serious when 1 asked that question.


Robert Lloyd Wenman: Mr. Speaker, the minister indicated that he became aware of this operation on January 9. Relative to that, on January 20, the Minister of National Defence wrote, and I quote:
-Canadian governments have tried to achieve arms control but the 'problem is how best to proceed in a world where one group of states, namely the Warsaw Pact led by the Soviet Union, openly proclaims its policy to impose its political philosophy, if possible by peaceful means but, if necessary, by force.'
Was the Minister of National Defence aware of this information when he wrote this letter on January 20, and was he speaking in anticipation of this statement today? Does the Secretary of State for External Affairs agree with the point of view stated by the Minister of National Defence? In fact, as a result of this instance, does that statement have a new credibility?


Donald Campbell Jamieson: Mr. Speaker, I will just answer the one part of the question which is germane to the matter we are discussing today. To the best of my knowledge, the Minister of National Defence was not aware of this activity to which I am making reference. It is my responsibility. I took that responsibility and I did not consult with him in any way on it. I would have to look very carefully at what he said with regard to international affairs generally to know whether I agree entirely with him or not.


Electoral Boundaries Act


Mr. Towers:: Can the minister tell us whether the two agents who left the country were recalled or whether they were requested to leave by Canada?


Donald Campbell Jamieson: I gather they left in the normal course of posting to somewhere else while the investigation was going on. Whether there was any relationship between their departure and the activities referred today, I do not know. I would suspect not. I would think it was simply a matter of rotation.


Mr. Prud'homme:: In spite of the many criticisms to which the RCMP have been subjected in the last few months, would the minister convey to the Commissioner of the RCMP our congratulations on what seems to be a job well done?


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: I shall be very glad to do that.



ELECTORAL BOUNDARIES READJUSTMENT ACT


Mr. Serge Joyal (Maisonneuve-Rosemont) moved: for leave to introduce Bill C-417, respecting the Electoral Boundaries Readjustment Act (Sainte-Marie).



MOTION TO ADJOURN

Charles Joseph Clark: Mr. Speaker, I rise relative to statements made during the question period today. In view of the Prime Minister's (Mr. Trudeau) contempt of the House of Commons and the people of Canada in suggesting during the question period, as he did today, that information which may relate directly to national security or to national standards is, and I quote him, none of the business of the House of Commons, I move, seconded by the right hon. member for Prince Albert (Mr. Diefenbaker):
That this House do now adjourn.


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


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.
The House divided on the motion (Mr. Clark) which was negatived on the following division:



AMENDMENT TO CHANGE NAME OF RIDING OF HOCHELAGA-MAISONNEUVE

[Stage Direction]

Serge Joyal: for leave to introduce Bill C-418, respecting the Electoral Boundaries Readjustment Act (Hochelaga-Maisonneuve).


Some hon. Members:: Explain.


Serge Joyal: Mr. Speaker, the purpose of those two bills is to reestablish historical relevance in the designation of the new ridings of Hochelaga and Maisonneuve. The new riding named Hochelaga covers in fact the territory formerly known as the Sainte-Marie district. The history of the city of Montreal at the time of confederation shows us that that territory has always been designated under the name of Sainte-Marie from the very beginning. As for the village of Hochelaga, it was annexed to the city of Montreal in 1883, and its territorial limits are now included in the new riding of Maisonneuve. The purpose of those bills is therefore to respect historical relevance in the designation of those new ridings.
I do not think, Mr. Speaker, that the adoption of those bills will cause particular difficulties, even if the word "Hochelaga" means in the Huron language "place where one is caught in ambush".


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

(Division No. 23)
Alexander
Alkenbrack
Beatty
Benjamin
Cadieu
Clark
(Rocky Mountain) Clarke
(Vancouver Quadra) Crouse Darling Diefenbaker Dinsdale Dionne
(Kamouraska)
Douglas
(Nanaimo-Cowichan-
The Islands)
Epp
Firth
Forrestall
Fraser
Friesen
Gilbert
Grafftey
Halliday
Hamilton
(Qu'Appelle-Moose
Mountain)
++YEAS
Messrs.
Hamilton
(Swift Current-Maple Creek) Hnatyshyn Holmes Huntington Hurlburt Jarvis Jelinek Knowles (Winnipeg North Centre) Knowles
(Norfolk-Haldimand)
Lambert
(Bellechasse)
Lambert
(Edmonton West) Laprise La Salle Lawrence Leggatt
MacDonald (Miss) (Kingston and the Islands)
MacKay
Marshall
Mazankowski
McCain
McKenzie
McKinley
McKinnon
Munro
(Esquimalt-Saanich) Neil Nielsen Nowlan Nystrom Oberle Orlikow Pa proski Peters
Pigott (Mrs.)
Ritchie
Rodriguez
Schellenberger
Schumacher
Scott
Towers
Wagner
Wenman
Whiteway
Wise
Woolliams-66.
[Stage Direction]

Abbott	Duclos
Allmand	Dupont
Anderson	Dupras
Andras	Ethier
(Port Arthur)	Faulkner
Andres	Fleming
++NAYS
Messrs.
Lessard Loiselle (Chambly) Lumley MacDonald (Cardigan) MacEachen MacFarlane Maine Marchand Martin McRae
Nicholson (Miss) Olivier Ouellet Parent Philbrook Portelance Poulin
Prud'homme Railton Raines Robinson Roy (Laval)
Sharp Smith
(Saint-Jean) Stewart (Cochrane) Stollery Tessier Trudeau Turner Wood Yanakis Young-94.
(Lincoln)
Appolloni (Mrs.)
Basford Bechard Begin (Miss)
Blais
Blaker
Blouin
Boulanger
Buchanan
Bussieres
Cafik
Campagnolo (Mrs.) Campbell (Miss)
(South Western Nova) Campbell
(LaSalle-£mard-Cote
Saint-Paul)
Caron
Clermont
Comtois
Cote
Cullen
Cyr
Daudlin De Bane Demers Dionne
(Northumberland-
Miramichi)
Flynn Foster Francis Gauthier
(Ottawa-Vanier) Gendron Gillespie Goodale Goyer Gray Guilbault Haidasz Harquail Herbert Holt (Mrs.)
Hopkins
Horner
Isabelle
Joyal
Lachance
Lang
Langlois
Laniel
Lapointe
Leblanc
(Laurier)
LeBlanc
(Westmorland-Kent)
Lee
Lefebvre
Mr. Speaker:: I declare the motion lost.
Order Paper Questions
(b)	Ile-a-la Crosse, $185,400; (c) La Loche, $626,077; (d) Green Lake, $388,399; (e) Sandy Bay, $634,739; (f) Cumberland House, $784,551; (g) Weyakwin, $326,317; (h) Stony Rapids (study only), $52,550; (i) Lac La Ronge, $130,350; Total, $4,139,811.
2. Indian Reserve Sewer and Water Projects (April 1, 1974 to March 31, 1977): (a) Black Lake Indian Reserve-Study, $460; (b) English River Band (Patuanak-Study), $30,954;
(c)	Fond du Lac Indian Band-Study, $8,991; (d) James Smith Indian Reserve-Study, $168; (e) Lac La Ronge Reserve-Reservoirs, $24,597; (f) Peter Pond Band (Dillon)- Preliminary expenses only, $36; (g) Wahpeton Indian Reserve-Study, $2,532; Total, $67,738. Wells (April 1, 1976 to March 1977)*: Cole Bay, $1,094; Wollaston Post, $10,307; Pinehouse, $6,024; Sled Lake, $420; Jans Bay, $9,483; Green Lake, $3,473; lle-a-la-Crosse, $9,260; Southend-Reindeer, $1,358; Patuanak, $6,541; Sturgeon Landing, $1,756; Total, $49,716.
* Information by community for previous years is not readily available.
3. For Indian Reserve Projects (which are listed separately) the federal share is 100 per cent of which 60 per cent is contributed by the Department of Regional Economic Expansion and 40 per cent by the Department of Indian Affairs and Northern Development. For projects falling within provincial jurisdiction, the federal share is 60 per cent.



UIC-BOARD OF REFEREE HEARINGS  QUESTIONS ON THE ORDER PAPER

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr.   Wm. Andres@Parliamentary Secretary to Minister of State (Multiculturalism: Mr. Speaker, the following questions will be answered today: Nos. 376, 917 and 1,072.



CANADA-SASKATCHEWAN INTERIM SUBSIDIARY AGREEMENT-FEDERAL CONTRIBUTIONS

Mr. Mclsaac: 1.	Under the Canada-Saskatchewan Interim Subsidiary Agreement on the Saskatchewan Northlands, what was the federal contribution to water and sewer installations in (a) Buffalo Narrows (b) lle-a-la-Crosse (c) La Loche (d) Green Lake (e) Sandy Bay (0 Cumberland House (g) Weyokwin (h) Stony Rapids (i) Lac Laronge?
2.	What other communities in Northern Saskatchewan received federal contributions to develop water supplies and what were the amounts in each case?
3.	What share of the total cost of the projects does the federal contribution represent?


Mr. Donald Wood (Parliamentary Secretary to Minister of Regional Economic Expansion):: The reply for the Department of Regional Economic Expansion is as follows: 1. From April 1, 1974 to March 31, 1977: (a) Buffalo Narrows, $1,011,428;


Mr. Rodriguez: 1.	(a) In the twelve months from December 1, 1976 to November 30, 1977, how many Board of Referee hearings were held by the Unemployment Insurance Commission (b) how many of the decisions of the Boards were (i) favourable (ii) unfavourable to the claimant?
2.	(a) In the same period, how many Board hearings were held in the Ottawa region (b) how many of the decisions of the Boards were (i) favourable (ii) unfavourable to the claimant?
3.	(a) For the same period, what is the name and previous occupation of all persons who acted as Chairman of Boards of Referees for the Unemployment Insurance Commission in the Ottawa region (b) what is the number of cases over which each presided as chairman which delivered decisions (i) favourable (ii) unfavourable to the claimant?


Hon. Bud Cullen (Minister of Employment and Immigration):: 1. (a) 44,684. (b) (i) 8,219; (ii) 36,465.
2. (a) 856. (b) (i) 177; (ii) 679.
3.
Chairman	Favourable to Claimant	Decisions Unfavourable to Claimant	TotalMr. Donald Mitchell	66	297	363Mrs. Eva Berry	45	240	285Mr. Joseph Roadh	50	86	136Mr. Kenneth Matheson	14	36	50Mr. Albert Lusignan (on loan from Cornwall)	2	20	22177	679	856
With regard to the previous occupation of the chairman mentioned above, the commission does not divulge information obtained in confidential correspondence.


Business of the House OIL PRODUCTION


Mr. Herbert: 1.	What is the current number of barrels of oil produced per day in Canada?
2.	What quantity is exported and to which countries?
3.	What is the current daily consumption of barrels of oil in Canada?
4.	What is the quantity imported?
5.	What is the daily receipt from the tax on exported oil?
6.	What is the daily cost to subsidize imported oil?


Alastair William Gillespie: The Department of Energy, Mines and Resources reports as follows: 1. Preliminary data for 1977 indicate that Canada produced about 1.6 million barrels per day of crude oil and equivalent, synthetic (tar sands) oil and gas plant liquefied petroleum gases (FPG's).
2.	Crude oil exports in 1977 (net of exchanged oil) averaged about 271 thousand barrels per day. It was all exported to the United States.
3.	Preliminary data for 1977 indicate that total oil consumption in Canada (including LPGs) averaged about 1.8 million barrels per day.
4.	Approximately 575 thousand barrels per day of oil were imported in 1977 for consumption in Canada.
5.	In 1977, the export charge on oil generated about $1.3 million per day.
6.	Oil import compensation liabilities averaged at almost $2.5 million per day in 1977.


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


Some hon. Members:: Agreed.



BUSINESS OF THE HOUSE


Mr. Hnatyshyn:: Mr. Speaker, I rise on a point of order. Today is Thursday, the conventional time to ask the deputy House leader, in the absence of the government House leader, if he will inform the House as to the business for the balance of this week and possibly into next week, bearing in mind that tomorrow is an allotted day. When the deputy House leader is addressing himself to the business of the House, 1 wonder whether he will be good enough to designate next Thursday, February 16, as an allotted day, in accordance with the understanding arrived at between the House leaders. Finally, if this matter was raised by my colleague from Edmonton West during the course of the question period perhaps the answer given by the President of the Treasury Board was not complete. However, I wonder if the deputy House leader might tell the House of the government's intention with respect to bringing in the main estimates, bearing in mind the limited time the House has to consider these estimates under our rules? Could
he be more specific as to when the main estimates might be tabled in this House so we may give them appropriate attention?


Mr. Cafik:: Mr. Speaker, I wish to indicate today that we will proceed with second reading of Bill C-17, which is the CNR recapitalization act, and in light of the co-operative spirit in the House today I am sure that matter will be concluded. If so, we could proceed to Bill C-16, which would be the Bank Act extension. Tomorrow is an allotted day, and on Monday it is the intention of the government to bring forward Bill C-25, which is the northern pipeline legislation.
In order to comply with a request by the hon. member with respect to an allotted day next week, on behalf of the government I am happy to confirm that next Thursday, February 16, will be designated as an allotted day. Regarding the last point raised by the hon. member I agree with him that the main estimates are an important and pertinent matter. In light of the time frame in which these estimates would be considered, I will bring a specific answer to that reasonable request to the House as quickly as possible.


Ramon John Hnatyshyn: Mr. Speaker, I wonder if the deputy House leader could indicate if Bill C-25 will be brought forward as an item of business on Monday and whether that is a firm commitment so we can prepare ourselves for it, regardless of progress or otherwise with respect to matters now before the House.


Norman Augustine Cafik: Mr. Speaker, it is the intention of the government to bring forward Bill C-25 on Monday as I indicated, and I stand by my statement.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, with respect to the announcement that the government intends to proceed with Bill C-25 on Monday, it is true that earlier there was an indication that that bill would be proceeded with yesterday, I believe it was, but in response to objections from this side of the House, that was changed. I must say we have not been notified until just now that it was the government's intention to proceed with the second reading of Bill C-25 on Monday, and I would like to give notice to the government House leader through his deputy that we will ask for a further delay in that matter, particularly in view of the fact that the question of the pipe specifications has not yet been settled.


Mr. Marshall:: Mr. Speaker, prior to the Christmas recess there was unanimous consent given by the House to refer the annual report of the Department of Veterans Affairs to the Standing Committee on Veterans Affairs. Since it is obvious that the main estimates will be presented very soon, 1 wonder if the deputy House leader would verify whether that matter can be referred to the standing committee as soon as possible to comply with the unanimous consent given.


Norman Augustine Cafik: Mr. Speaker, I will certainly look into the matter carefully in the hope that we will be able to comply expedi-



tiously with the disposition of the unanimous consent of the House.


Mr. Speaker:: Orders of the day.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: It being five o'clock 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 Parkdale (Mr. Haidasz)-Health-Government action to fight cardiovascular disease; the hon. member for Nickel Belt (Mr. Rodriguez)-Labour Conditions-Layoffs in nickel industry-Government action to alleviate; the hon. member for Frontenac-Lennox and Addington-Capital Punishment-Request for reinstatement.
Order, please. It being five o'clock the House will now proceed to private member's business as listed on today's order paper, namely, private bills.


PRIVATE BILLS
[Stage Direction]
The House resumed, from Thursday, December 1, consideration of the motion of Mr. O'Connell that Bill C-1001, respecting Bell Canada, be read the second time and referred to the Standing Committee on Transport and Communications, and the amendment thereto of Mr. Leggatt.
Lorne Edmund Nystrom: Mr. Speaker, 1 wish to say a few words respecting the amendment to Bill C-1001 which is before the House. Unfortunately it will be a few words because I have only 20 minutes. I would like to enlighten my more Conservative friends as to the merits of publicly owned telephones, but with only 20 minutes it is very difficult to list all of the attributes of public ownership when it comes to the telephone system.
1 am pleased that the first comment given was by a member from British Columbia. Before he disappears from the House I want to say to him that I have an article here from the Toronto Globe and Mail which says that the highest telephone rates in the country are those charged in British Columbia, in central Canada and in the maritimes. The lowest telephone rates in the country, as the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn) knows, are the rates charged in the prairie prov-
Bell Canada
inces. You will note that all telephone systems operating in the prairie provinces are publicly owned. In instances where the telephone systems are privately owned, the rates are all very high indeed, and that speaks for itself. A publicly-owned telephone system is much more efficient, it provides a service at a much lower rate to the consumers, be they businessmen or private residential consumers.
I hope during this debate that Conservative members, particularly those from the prairies, the hon. member for Edmonton Centre (Mr. Paproski), the hon. member for Saskatoon-Biggar as well as others, will join in the debate and urge the federal government to place the Bell Telephone company under public ownership, as are the telephone systems operating in the prairies.
The bill that is before us today states that Bell Telephone want to expand their company, they want extra capitalization, and they want to make some changes in the legislation so that they would not have to come before parliament as often as they have done in the past. The amendment that is before us is to give that a six months' hoist.
I do not think that any of us should be rushing this bill through the House. First of all, Mr. Speaker, we notice in the press just a week or so ago that Bell Telephone are applying to the CRTC for a rate application increase of some $399 million. This is an application made by a company that has experienced large profits over the last many decades directly from the Canadian taxpayers. The rate increase will be 20 per cent for residences-and the Conservative party members laugh, they think it is great.


An hon. Member:: It is the Liberals who are laughing.


Lorne Edmund Nystrom: Mr. Speaker, I wish that the electronic equipment in this House could record the laughs of the Conservative party as they laugh at the increase which is to be inflicted on consumers by Bell Telephone. Business rates are being increased by some 28 per cent commencing July 15, 1978. When we see rate increases like that, Mr. Speaker, I am in no hurry to allow Bell Canada to have their way and to see their bill go through this House in an expeditious manner.
1 wish the Conservatives who are now talking would get up from sitting on their brains and join this debate, it would be very interesting to hear their comments. People from Alberta, who have a socialized telephone system, should get up and tell us of the advantages of that socialized telephone system. There is another member who I would be very interested to hear speak, the progressive hon. member for Winnipeg South Centre. He used to work for the Manitoba Telephone Company, which is publicly owned. That telephone company was established in Manitoba years ago by a great socialist, Premier Bracken. It is a telephone system which has worked very well. It will stay public even though the Conservatives are back in power in Manitoba. The hon. member for Winnipeg South Centre (Mr. McKenzie) should be telling us how a socialized telephone system works and how the people of Ontario, Quebec and British Columbia should have a socialized system.


Bell Canada
The Minister of Industry, Trade and Commerce (Mr. Horner) will probably get up and tell us about the merits of public ownership of the telephone system in the province of Alberta. However, I am very concerned about the monopoly that Bell Canada has in this part of Canada. I am very concerned about the argument they are making to the CRTC for a rate increase.
In 1974, Bell Telephone made the argument that they needed to make between 11 per cent and 12 per cent profit in order to keep the company going. I gather they have been making that. Now they argue they need between W/2 per cent and 14i4 per cent profit to maintain and expand the system, attract new shareholder investment, modernize the company, modernize the equipment, and provide service to people living in outlying areas, northern areas and other parts of the country.
If we do not protest in this House, Bell Telephone will very easily get their way with the CRTC. Their batting average is very good. It is worth while to put on record the batting average of Bell Telephone since 1970, the last seven or so years they have gone before government regulatory agencies. I will go back over the last six.
In June, 1970, Bell requested some $30 million in terms of increases from the federal government. In January, 1971, they were granted $22.5 million, 75 per cent of what they were requesting. In November, 1971, Bell requested $78.1 million. In June, 1972, they were granted $47.2 million, 60 per cent of what they had requested. In November, 1972, they requested $36 million. In July, 1973, they were granted $22.5 million, 63 per cent of what they requested.
In August, 1973, Bell requested $51.8 million. Here I am talking of a company that charges its consumers the highest rates in the country for telephone service for residences and businesses. In September, 1974, they were granted $51.8 million, 100 per cent of their request.
In May, 1975, Bell requested $110 million. In August, 1975, they were granted $14 million, and in January, 1976, they were granted $96 million, again 100 per cent of what they had requested. In November, 1976, Bell again requested money, this time $171.4 million. In June, 1977, they were granted $162 million or 95 per cent of what they had requested of their clients in central Canada and the Atlantic provinces.
If you total that up, you find that since June, 1970, they have requested $477.3 million of which they have been granted $416 million, or 87 per cent of what they requested.
Bell Telephone wants to raise the rates for consumers in Ontario, Quebec and other places by 20 per cent in 1978. The chances of that increase going through are very high because over the past six or seven years they have received 87 per cent of what they requested. We have heard barely a whimper from the government members or members of the Conservative party about these excessive rate increases by Bell Telephone Company.

I can go over the financial reports of Bell Telephone in detail and look at their annual profits. Being a large monopoly corporation, it makes a lot of money. Despite the fact that they claim poverty and state that they need another rate increase, I have recently found that Bell Telephone will be investing a lot of money in Saudi Arabia. During the month of January, Bell Telephone won a billion dollar contract to upgrade the telephone system in Saudi Arabia. If they can expand their empire outside the country in places like Saudi Arabia where there is no shortage of money or technological skills, surely they can provide better telephone service in this country, primarily to those in our rural areas, northern areas where many people are on one line and repair service is very slow, and in residential areas.
When I moved into a new area, I had to wait literally weeks before my telephone was installed. For a while it was necessary to share a telephone line with someone else. Over the years I have not had any problems getting telephones installed in my residences in Saskatchewan. I have never had a constituent call me, write to me or stop me on the street to say that the Saskatchewan government telephone company is being lax or slow in a needless way with regard to installing telephones in either a residence or business.
I am sure all members from Saskatchewan, a province where the population has grown in the last seven years since the NDP government was elected, have not received complaints about the telephone system. The same is probably true in the province of Manitoba. However, here Bell Telephone has a monopoly. There is virtually little public control being exercised. They do what they want in terms of consumers, generally kicking them around. They are only interested in profit, not in providing a service to the people of this country.
When the rate increase application came up and the lawyers for Bell were preparing to argue their case before the CRTC, an article appeared in the February 3 issue of the Toronto Globe and Mail headlined "Metro Rate Would Be Twice Winnipeg's". The telephone rate in Toronto would be twice as high as in the city of Winnipeg. There are other rates that are three times as high as those in provinces where the telephone system is publicly owned.
I want to read some of the article so that hon. members will be aware of it and perhaps aid us in ensuring that we do not facilitate and expedite passage of the bill before us. I quote:
If Bell Canada has its way, a resident of some centres near metro Toronto soon will be paying three times as much lor basic telephone service as residents of Portage la Prairie, Manitoba, and Toronto residents will be paying double the rate in effect in Winnipeg.
A Globe and Mail survey of telephone rates in effect in seven metropolitan areas and seven small towns across Canada suggests that charges proposed in a Bell rate application now before the Canadian Radio-Television and Telecommunications Commission will be among the highest anywhere in Canada.
The survey showed that phone service for businesses and residences alike now is costliest in British Columbia and the maritimes and cheapest on the prairies.
Some of the differences are enormous. Among the cities, the charge for a private-line telephone service now ranges from a low of $4.00 in Winnipeg to a high of $9.95 in Halifax. Bell's charge in both Toronto and Montreal now is $8.15 but under the CRTC application would be $9.80.


Under the CRTC application the rate would go from $8.15 to $9.80. As I say, it is $4.90 in the city of Winnipeg-exactly half of what it is proposed Torontonians shall pay.
The articles goes on to say:
Residents of Portage la Prairie now pay $4 a month for basic phone service compared with a high of $10.25 a month in Bolton, Nobleton and parts of Pickering that can call free to Metro Toronto.
Of course, you could do the same thing from Portage la Prairie into Winnipeg as can be done between Pickering and Toronto.
The article goes on:
The same Metro-fringe Bell subscribers would pay $12.25 under the Bell proposal.
A barber in Portage la Prairie is billed only $8.75 a month for a business telephone. In Bolton the charge is now $31 and will jump to $39.70 if Bell's proposal is approved by the CRTC.
One could go on and quote at great length from the article in the Toronto Globe and Mail, because other examples are given about cities and rate comparisons across the country. Mention is made of Halifax and Regina, Portage la Prairie and Montreal. On previous occasions in debate I have given comparisons between cities like Moncton, Ottawa, etc. We find that in every case the rates charged by Bell Canada are substantially higher than the rates charged in my native province and its sister provinces of Alberta and Manitoba.
I have told the House that the rate in Winnipeg is $4.90. The comparable rate in my home province and capital of Regina is $5.45. I assume it is the same in the city of Saskatoon. 1 see no reason, therefore, why members of this House should give more power to Bell Canada. I see no reason why members of the House should give up what little scrutinizing ability we do have with respect to Bell. I do not see why Bell Canada should get our stamp of approval to secure a rate increase or expand the size of the corporation. The time has come to look realistically at ways of helping people and at the services we should offer.
Sometimes the best way of doing this is to establish publicly-owned companies. If a company is publicly-owned-and the communications field is a good example of where this should be done-then you can be sure that the sole motivation of such a company will be service to people. If a company is privately-owned, then normally its motivation will be to secure profits for its shareholders, not service to the people. For a privately-owned company there is no advantage at all in improving its facilities in outlying areas. In the hinterland areas, the rural communities far from villages and towns, there is no profit in improving the service.
Under the system which exists in Saskatchewan where an efficient, government-run telephone service is available, one which despite low rates has made a profit, you have a system of cross-subsidization. You can make a big profit in Regina or Saskatoon and use part of that profit to subsidize rates in the little towns and villages throughout the province. This is possible because the main motivating factor in the company is to serve people and to provide telephone service at the lowest
Bell Canada
possible cost. It will not be done by Bell Canada. It will not be done because Bell wants to make profits so it can invest money in Saudi Arabia or in other industries and make money for its shareholders.
Something else which I feel should be said at this time is that Bell Canada has made a great deal of money over the last number of years. It has done very well indeed. It has made a lot of money in this part of Canada and in the Atlantic provinces. We in our party, during the period in which this bill has been before the House, have drawn attention to some of the profits made by Bell. We have also outlined the manner in which the company treats some of its executives. Some of my colleagues have put on record details of the generous pension plans for some of the senior executives; they have put on record the amounts of some of the bonuses these senior people have received. Things like this just would not happen under a publicly-owned telephone system which was being run at the lowest possible cost for the best possible service to the greatest number of people.
These are just a few of the reasons why I call on all hon. members to oppose the bill before us as vigorously as possible.


An hon. Member:: Bring it to a vote!


Lorne Edmund Nystrom: I see some Conservatives want us to bring the bill to a vote. I do not think we should bring it to a vote. The quicker we do that, the clearer the signal we give to the CRTC that we want a rate increase granted to Bell Canada. I know that members of the Conservative party from Saskatchewan probably do not want to do that. I also know that certain members from other parts of the country who do not know how a good telephone system should operate really believe Bell Canada needs the money the rate increases would provide. I am in no rush whatever to bring the bill to a vote, and I am sure other colleagues of mine who will be speaking later will take the same position as I.
I call upon the House to defeat the bill and to speak in the debate as long as they can in order to make sure that the people running Bell know we are concerned, that before they get any more handouts from us they will have to improve the services they provide to the people over whom they have a monopoly. Should this measure come to a vote before the next election, Mr. Speaker, the government-


The Acting Speaker (Mr. Turner):: Order. I regret to inform the hon. member that his allotted time has expired. The hon. member for Surrey-White Rock (Mr. Friesen).


Benno Friesen: I rise on a point of order, Mr. Speaker. I just wish to remind the hon. member for Yorkton-Melville (Mr. Nystrom) that in his opening remarks he said he had some things to say to me before I left the chamber. I want to say that even after listening to his jaded and jaundiced remarks for 20 minutes, I am still here-difficult as it was to listen to him-and 1 will still be here at six o'clock. He drew attention to how much money he is saving through the Saskatchewan Telephone Company. Obviously he took those savings and


Bell Canada
spent them on a vacation either in Florida or Cuba. Somehow or other he got that tan.


The Acting Speaker (Mr. Turner):: Order, please. The hon. member for Timiskaming (Mr. Peters).


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, members should not get up and apologize for it not being their day in the House; that happens to everybody at times but I do not think they have to apologize.
Bell Canada is a very important operation and one which deserves attention from the House. If members believe this, I hope they will be prepared to vote against the bill before us. This measure provides, among other things, for a change of great significance. Instead of parliament controlling Bell Canda, the cabinet is to do so by means of orders in council flowing from an application for changes in the organization of Bell by letters patent. These letters patent would be referred to the cabinet for decision. It is true there is a suggestion there might be an intervention on the part of members asking for a debate. I am sure, Mr. Speaker, that the result would be an overwhelming stamp of approval by Liberal members because the cabinet was involved.
We are going to try to hold this bill up until an election is called. After an election there will be no rubber stamping because there is obviously going to be a minority government. With a minority government all hon. members have to participate and justify their position.


An hon. Member:: All six of you!


William Arnold Peters: There may very well only be six and I hope I am one of them. I am not prepared to say whether it will be a Conservative government or a Liberal government. I am not too optimistic about it being an NDP government, but I am very optimistic that, no matter which party forms the government, the NDP is going to make the decisions. My assessment is that it will be a Conservative government and that we will make the decisions for them as we have sometimes for the Liberals.
Many hon. members believe we should pass this bill because Bell Canada can do nothing wrong. These members are mainly from western Canada where telephone service does not cost too much. In fact, in the three prairie provinces the telephone service is operated by the governments, through commissions. They assess public demand, calculate the costs and establish the rate to be charged. As my colleague pointed out, in some cases this amounts to less than half the charge in other areas.
Some hon. members will claim that free enterprise is a good system and that it pays. Many people in this country are opposed, however, to paying all the time and now want service at cost. They do not mind paying something for administration as long as it is not unreasonable. Where the telephone service is provided by commissions the costs are not exorbitant, as they are when Bell Canada provides it.

Bell Canada admits it is not really a telephone company. It owns some telephone companies-Northern Telephone in northern Ontario, Maritime Telephone and some others. I am sure they operate their subsidiaries pretty well as telephone companies, but the profits go back to Bell. They own Northern Telecom Limited, New Brunswick Telephone, Maritime Telephone, Newfoundland Telephone and Capital Telephone in the Ottawa area which, although it has less than 2,000 subscribers, owns Place Bell Canada, a fleet of ships and a jet air fleet. The subscribers have not had a rate increase for years and will probably never have one. If one were proposed, some subscriber would probably take it up with the CRTC. The company operates many things that have no relationship to a telephone service.
The Ottawa Citizen of March 9, 1977 quotes the president of Bell Canada as saying the company is a telecommunications operation and not just a phone company. Mr. Speaker, if 1 subscribe to Reader's Digest I expect to receive a magazine. I am not subscribing to those coupons that offer books or a lottery ticket for a million dollar prize. In my opinion you subscribe only to that in which you are interested. Many people subscribe to Bell Canada who only want a telephone, not a telecommunications network. They are not interested in buying other corporations that may be directly or indirectly connected with telephone communications. Why should a telephone company own boats, for instance? Some years ago when there was an international cable company and ships were required to service the cable this may have been necessary. Is it necessary today, however? The ownership of jet aircraft is not necessary in order to maintain a telephone service. Yet Capital Telephone owns some and rents them to other companies, including Bell Canada and its telecommunications services.
Bell Canada recently requested the CRTC to allow it to increase its rates, and not only to maintain the level of return it has been receiving. When the company went before the CRTC last year Andrew Roman, an intervener representing the National Anti-Poverty Organization, said he was concerned that the proposed increases would not be used to improve services to the ordinary telephone user but to facilitate company investment in non-voice data transmission for businesses. He said he had nothing against those services but that a rate increase should not be used to develop this nonvoice data transmission service at the expense of the ordinary telephone user.
At the hearing, questions were put by Mr. Dan Burtnick, a lawyer appearing for the government of Ontario, aimed at finding out from the president of Bell Canada whether his priorities lay with voice services or data services and where he would cut services if that were essential. In response, Mr. Thackray said that Bell Canada treated all its customers alike and did not give priority to the ordinary telephone user over data customers. He said that the Bell Canada act directed the company to provide telephones, but did not mention data services which did not exist when the act was passed. However, he insisted that the company was a telecommunications operation and not just a telephone company.


Also he said that the volume of data services offered by Bell Canada would likely increase relative to the volume of voice communication, and revenues from data might correspondingly increase in importance to the company. He continued by indicating that if Bell Canada did not get its rate increases, the company would cut back on services to private homes, because this was one of the quickest ways to stop spending money in the short term. He indicated that in doing this the company would be following the same course it had followed in 1975 when rate increases were held back.
Hon. members opposite must wear rose coloured glasses. They have indicated that Bell Canada should receive what it is requesting because it is necessary to maintain a good telephone communications system in Canada. Even the president of Bell Canada has indicated that the money will not be used to the benefit of ordinary telephone users. He has said that it will be used to make considerable money for Bell Canada.
It has been suggested that the New Democratic Party is interested in nationalizing Bell Canada. That is correct; we would like to do that because it is a public utility. These funds should be used to provide a service to the entire Canadian population, rather than the many ventures Bell Canada is now involved in.
There is a great similarity between the financial report of Bell Canada and that of the Canadian National Railways. The CNR is nationalized, but parliament has exercised very little control over it for many years. There has been control exercised by cabinet, and quite often the CNR was asked to do things it was not compensated for and did not wish to do. This was not the case with Bell Canada. That company has done things it wished rather than things which were requested by the cabinet or parliament. Bell Canada has had a greater interest in the role of the shareholder than that of the subscriber.
It has been recommended that the CNR should reduce its phony paper debt, a debt it was not capable of handling. That debt should have been written off a long time ago as any other such debt would have been. There have been very few years when the CNR has shown a profit. This year Canadian National is bragging about a $11 million profit. The last time the CNR debt was studied in committee, there was a deficit of $40 million and the interest on that debt was approximately $60 million. If the CNR had written off that debt, in that year the corporation would have earned $28 million in clear profit. Hon. members opposite have not paid much attention to the financial aspects of agencies under their control. This is also true of the agencies which have handled the rate structure of Bell Canada.
This year Bell Canada is requesting a 25 per cent increase. What is that company saying to the average person in Canada? Frankly, the public is not interested in giving Bell Canada that increase, but representatives of Bell Canada have said: "If you do not give it to us, none of the new suburbs will have telephones; we will not make any installations; and if you want to upgrade your telephone service, we will not do it".
Bell Canada
The subscribers in rural areas are the worst abused by Bell Canada, and they will suffer even further if Bell Canada does not receive its increase. It has been argued that it is costly to supply rural telephones, which is not true. For example, the majority of the expense involved in providing a telephone system to the rural areas of Saskatchewan took place a number of years ago, but that service was installed at a rate which was 100 per cent less than Bell Canada's rate for installing thousands of telephones back to back in an apartment building. In many instances Bell Canada is not required to use 20 feet of cable when installing telephones in apartment buildings.
In the city of Ottawa, where the lots are approximately 50 feet apart, Bell Canada requires approximately 30, 40 or 50 feet of coaxial cable per unit. That cable is buried in the ground and the contractor is required to do the installation during construction. All the telephone company has to do is to make the appropriate connections and instal the telephones. Yet some people in Ottawa have been waiting a long time for telephones. They are waiting for telephones because the company has indicated that it cannot make those connections until it is in receipt of the rate increase. The public is being blackmailed by this company.
What does Bell Canada tell the general public about its business? It tells them about the widows and orphans who own Bell Canada stock and, for that reason, the stock must be kept viable and the amount of dividends on those stocks must be in line with our national inflationary rate so that the poor widows and orphans will not starve to death. I should like to point out that I have a list of Bell Canada shareholders in my possession.


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


William Arnold Peters: All I wanted to indicate was that the smallest shareholder who owns 25 shares is not a widow or an orphan.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I am sure hon. members are aware that the hon. member for Yorkton-Melville (Mr. Nystrom) comes from the province of Saskatchewan, which has a publicly owned telephone system, and I come from the province of Manitoba which also has such a system. Neither system was created by a New Democratic Party government or by a CCF government. In Manitoba the government telephone system was created by a Conservative government under Sir R. P. Roblin. The rates there are probably half the proposed rate of Bell Canada which we oppose. We oppose this bill, which would give Bell Canada much greater power to increase its rates and profits. Members of parliament from Ontario and Quebec whose constituents will be hit very hard are conspicuous by their presence in the chamber and by their silence in the debate. By their silence they demonstrate their approval of the increases Bell proposes.


Mr. Maine:: Right on.


Bell Canada


David Orlikow: I presume, when the hon. member says "right on," he supports Bell in its usual request to increase rates.


Francis William (Frank) Maine: It is a free enterprise system.


David Orlikow: I am happy for that interjection. I invite the hon. member to interject more often because his interjections give me an opportunity to point out how badly the free enterprise system is working for his constituents. The hon. member does not want to listen. He is leaving the chamber.
Let us look at the record of the free enterprise system in which Bell Canada operates. I would like to quote some figures which were printed in the Globe and Mail. That newspaper is not a radical socialist journal. An article on February 3 of this year showed that the rate for an individual residential telephone in Winnipeg was $4.90 a month. In Regina it was $5.45, and in Calgary, $6.10. The present rate in Toronto for that same kind of line is $8.15 a month. If Bell gets the increase it is now asking for, the rate will be $9.80 a month. In Vancouver where there is also a privately-owned telephone company the rate at the present time is $9.75 a month, and in Halifax the rate is $9.95 a month.


Benno Friesen: What are the labour rates in B.C. and in Manitoba?


David Orlikow: I can assure the hon. member for Surrey-White Rock (Mr. Friesen) that the labour rate in Winnipeg is not one half the labour rate in Vancouver. That is not the reason for the sharp difference in price.
The hon. member for Yorkton-Melville (Mr. Nystrom) referred to rates in small towns. In Portage la Prairie the rate for an individual residential line is $4 a month. In Bolton, Ontario, a town about the same size, the rate is $10.20. If Bell gets the increase it is asking for, the rate at Bolton will be $12.25. Those figures demonstrate very clearly why even free enterprise governments in the western provinces realize that, when it comes to services people require, it makes sense to have a publicly-owned system rather than a privately-owned monopoly system like that of Bell Canada.
Bell Canada is asking for an increase of between 20 per cent and 28 per cent. Bell is able to get approval 90 per cent of the time from regulatory agencies. The old one was the Canadian Transport Commission, and the present one is the Canadian Radio-Television and Telecommunications Commission.
We in the New Democratic Party have been blocking this bill, and we promise members of parliament and the executives of Bell Canada that we will continue to block it as long as the rules permit.
This bill would make the increases Bell has been able to get almost every year since I came to parliament in 1962 look like small fish in a big tank. Bell wants to remove the limited authority parliament has to keep an eye on what it proposes to do. It wants to remove most of the power of the CRTC. The bill would give Bell the authority to do everything which private companies operating in a competitive market are able to do. Bell wants to be able to sell shares, set the price of the

shares it sells, set up more subsidiaries, as it has already done, and operate with no government control at all. The company wants to increase its profit at a tremendous rate at the expense of the people of Canada. Bell Canada has a monopoly and is not in the same position as an ordinary private company which competes on the market with competitors here and abroad. An ordinary company risks losing money and going bankrupt but, being a monopoly, Bell does not.
This bill proposes a number of distinct amendments to Bell's act of incorporation. It would revise the act of incorporation relating to the company's ability and methodology of capitalization, including the removal of the scrutiny of the appropriate government regulatory body. That is something we will never agree to. If the bill is passed, it will give Bell the power to borrow and issue stocks, bonds, debentures or other securities that it deems necessary.


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed from Wednesday, February 8, consideration of the motion of Mr. Lang that Bill C-17, to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in consequence thereof, be read the second time and referred to the Standing Committee on Transport and Communications.
Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, I hate to quote a remark made either today or yesterday, but I find that in respect to this bill I will have to repeat a phrase which the hon. member for Nickel Belt (Mr. Rodriguez) used in this House. The more I read about this particular piece of legislation the more it becomes curiouser and curiouser. If one took a walk through the fairyland of economics, this would be the boulevard of all walking areas when looking at the history of the CNR.
It seems rather strange that people still ask for crown corporations in view of the history of this organization. How


many times it has been refinanced is a matter of some minor dispute. Some say four and some say five. I suppose it depends on whether you refer to the assumption of debt as the various lines were incorporated into the CNR and whether there was a little written off then. Anyway, I find it very startling to take a look at the record of write-offs which the CNR has experienced.
While it may be repetitive, it is significant to note that governments of Canada in their wisdom of four different occasions have chosen to relieve the CNR of debt to a degree that should make it competitive with other instruments of transportation. On each of the three times prior to this one it has failed utterly. For example, in 1933, under the guise of one excuse or other, we forgave the CNR a debt of $1,230 million. At that time the CNR was supposed to be competitive.
In 1937 we eliminated a debt to the tune of $1,000,825. That is quite a hunk of change. It was particularly large coming just four years after the forgiveness of $1,230 million. In 1937 we therefore had nearly S3 billion of indebtedness that had been forgiven for a Crown corporation. To those who plead for Crown entities operated and financed by the taxpayer, that ought to be an initial lesson of its total lack of vision and capability.
In 1952 there was a further forgiveness of debt and interest which amounted to $2,845 million. In 1978 we are forgiving an additional $808 million, which will bring us to the point of having forgiven $6,708 million.
There is another Crown corporation owned and operated by the government of Canada which is building up a comparable structure of debt which was also forgiven by this government. I refer to the Seaway, which is another example of where the
taxpayers have had to fork over in order to keep a Crown corporation in operation. I am just sick of Crown corporations.
I submit there is a better way.
Thirty years ago rail rates were giving the Atlantic area problems in two ways. They were going up so fast that it made it difficult for producers to ship westward to Canadian markets. The Atlantic area was not developing at that time. We have had a meteor-like rise in rates in the past 30 years to the point where the income of producers in the Atlantic area has been further diminished. Our competitive position, particularly as it relates to agriculture, has been virtually wiped out. The advantages of expertise, soil in agriculture, yield and climate, have been literally totally wiped out. We now find ourselves in a position of disadvantage. Producers of those commodities which at one time were profitable are now at a disadvantage by virtue of the fact that this Crown corporation has led the way in the increment of freight rates from the Atlantic area to western markets.
We are now forgiving another $800 million indebtedness which brings the total relief given by the taxpayers to the CNR to $6.7 billion. Yet we still do not have a competitive position for our products in the Atlantic area.
There is a further problem. Not only has our income been reduced by virtue of railway tariff increments, but our cost of
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living has increased as charges levied by one Crown corporation after another in the movement of goods from west to east have increased. Therefore, we are getting it both ways; there is a reduction in income on that which we ship, and there is an increasing demand on our income and cost of living to pay for goods which cost us more because of freight charges which are increased on about a six monthly basis. As a maritimer being taken both coming and going, I am not really very happy about forgiving a further $800 million to the CNR.
I am particularly unhappy when I look at the CNR financial statement. It shows a long-term debt of $2,238 million. We are going to forgive $808 million of that. CN will still be $1.4 billion in debt.
I am even more unhappy when I look at remarks made at an earlier date when one of these forgiveness festivities took place. A gentleman known to many people in this House by the name of Mr. Donald Gordon said in a message to CN employees after the forgiveness of 1952 that we are now in a position where we have nothing to hide behind, nothing to block the road to success. He stated that we have a fighting chance of paying our way in the world and that, counting the bad years with the good, we ought to be able on the average to pay all our operating expenses, our fixed interest charges and income taxes and still have something left to return to the owners as a dividend on preferred stock.
In the 25 years since that assessment of its prospects, the CN system incurred net debts totalling $670 million, paid by the government, despite an infusion of $768 million of capital through government purchase of preferred stock which added more than $1 billion to its long-term debt, separate and apart from the financing of Air Canada. CN's fixed charges grew from $25 million to $132 million in the period 1952 to 1957.
I remember a very heated debate on a bill surrounding the establishment of the CN Tower in Toronto. At the time that tower was being proposed and while it was being constructed, it was criticized for taking money away that was badly needed for rolling stock and other items in the business of CN. It may or may not have been a profitable structure. I am not able to determine whether it is, except for a few government words and a few railroad official words which indicate something about it. In any event, whether it is profitable is not yet clear.
What is clear is that CN has been interested in a great many things other than transportation. When it was incapable of managing its principal business, it was permitted to go afield into real estate, towers, airplanes, hotels and a multitude of different services. It does this despite the fact it was not even capable of running the railroad first. The government has encouraged and allowed this structure to become diversified although this Crown corporation could not manage what it already had. This Crown corporation had proved itself incompetent ever since it was incorporated as such. I predict this will probably not be the last time members of the House will be asked to discuss refinancing the CNR and making further sums available to the company.


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I would point out that the indebtedness remains at $1.4 billion. In earlier times when forgiveness was sought from parliament, it was said that the company had inherited massive debts, that it had been asked by government to do things which a private corporation would not be asked to do and it was therefore necessary to ask parliament for a little more money to put the railway back into competitive shape. But the historic debt has more than been forgiven, Mr. Speaker. The existing debt of the CNR is probably comparable to that of other corporations operating in Canada. It is said the company has no equity capital. But why should it need equity capital when the government will pour into its coffers every nickel the company loses in a year's operation? Why should it need equity capital when the government is always ready to buy preferred shares upon which no interest is ever paid? It might be accrued but it is never paid. I contend it has befuddled the minds of Canadians by failure to adopt proper accounting procedures over the years. Why did the government not insist on knowing on an annual basis just how badly this corporation was operating as compared with private companies of a similar nature?
The country has been hoodwinked by the government and by the executive structure of the CNR into believing the company was nearly making a profit as taxpayers poured their millions into the sustenance of this corporation. Now we are being asked to forgive another $808 million, making $6.7 billion in total.
Reading various commentaries on the CNR one finds that people are making statements with respect to the extravagance of the capital expenditure. I have no instance of this extravagance. Every shipper of farm goods, whether he lives on the east or the west coast, knows that the car situation has been critical for years. The Government of Canada, in addition to the $6.7 billion, has had to buy cars to move grain though it has refused to buy cars to move perishable goods. It is a sorry record.
I am of the opinion, Mr. Speaker, that during the consideration of this bill no one to your right should urge us to hurry this legislation through so as to get the CN on its feet. Do not hurry this time. We want an accurate accounting study to show us what is the true position of the CN in comparison with that of its principal competitor, CP. What is the competitive position of the CNR in the area of road transportation? What is its competitive position in the area of water transportation? Until such time as the minister is prepared to give us authentic figures of this kind I do not think it would be fair to the taxpayers that any member on Your Honour's right should say at any point in time that a member of the opposition is holding up this bill. It is time the government and its child, the CNR, levelled with the people of Canada. We need to know these facts from experts who might have some idea what they are- and I mean from sources outside of government.
Another piece of legislation we are considering, the Aeronautics Act, shows that the Department of Transport has no idea what is going on. Take a look at the report. You will
find out we collected certain funds from aircraft operations and then reimbursed them again. We are trying again to collect them now and we probably cannot win, because according to the advice the Department of Justice received, a regulation may not have been correctly worded or the act was improperly framed. Sure as anything it was improperly administered; the story is that for ten years the department wanted to get an amendment through, but the government has not given time or space in its schedule for a new aeronautics bill to be brought in. So the position with regard to that is one of total confusion. If the administration of the CNR and the Department of Transport is as dismal as it has been in the case of Air Canada, then Canada needs to know. We need to know what is the competitive position.
We do know that there will be demands on the CNR for cars for the shipment of perishable goods. There will be demands for cars for the prompt shipment of frozen foods, demands for cars for the prompt shipment of all kinds of goods and commodities. What is the total of these anticipated demands likely to be? What are likely to be the capital requirements of the CNR? Will the company be able to buy these cars and haul goods from one part of Canada to another at a price we can afford? What impact will this have on rates? As a maritimer I am concerned about this aspect.
In our last discussion of the cost of transportation in the Atlantic area my remarks involved a comparison of rates for the movement of wood products in the maritimes, particularly in New Brunswick, as compared with the cost of moving comparable products in British Columbia. I showed that in New Brunswick the CN was charging us anything from 25 per cent to 100 per cent more than the British Columbia railroad was charging to move such products in B.C.
At that time the B.C. railroad was making a profit. I admit there was a so-called government out there leaning a little to the left; it almost caused that enterprise to flounder, too. The only two governments which could be compared in business management would be that government and the one on your right, Mr. Speaker. We are now in a position where producers of wood, wood products and paper in New Brunswick are taking a look at competitive rates in the state of Maine. We find that in Maine there is an even wider differential when it comes to the movement of wood products than there was between rates in New Brunswick and British Columbia. It is even more unfavourable.
The CNR does not look very good, Mr. Speaker, and I can see no point in giving the company $808 million if this House is not assured by the minister and the department that there is likely to be in the foreseeable future sufficient management capability to ensure that we shall not be asked again to forgive a large portion of the railway's obligations. The Bible tells us we should turn the other cheek. Mr. Speaker, we have turned it, turned it and turned it-and we got slapped every time we turned. The minister from Restigouche can grin but he has potato producers in his constituency who are just not competitive with producers in central Canada today because of unfair freight rates charged by the only railway running through his



constituency, the CNR. So the minister had better be prepared to tell us some facts and give us some prospects for the future which would justify the taxpayers forgiving $808 million.
What a dismal history for a Crown corporation. Why do members opposite not stand up and cheer? I remember going to the railway station in my community thirty years ago. It had a roadbed with no grass then but there were some good ties and a crew of men went along its length repairing it. Today the grass in that road bed is so high that you could not tell whether there were any ties unless you took the trouble to dig. The speed limit on the line is 15 miles an hour. It is ten miles an hour in Prince Edward Island. There are not many rail points in Prince Edward Island where heavy produce can be loaded, and even at those you cannot be sure what kind of car will be used and whether the load will be safe. Yet this government takes no action and the CNR takes no action.
Just recently the Minister of Agriculture (Mr. Whelan) received a telegram from the New Brunswick Potato Shippers Association about the situation in that industry. When the Minister of Transport (Mr. Lang) was in Grand Falls he received a deputation which stated that the industry could not be competitive if the CNR and the CPR did not take a realistic look at the value of transportation to industry, supply it with equipment and give it a rate that would enable it to survive.
Let us assume, Mr. Speaker, that you want to export potatoes from the constituency of Madawaska-Victoria. You might have the choice of loading them in Maine and shipping them through a port there or loading them in New Brunswick and shipping them through either Saint John or Halifax. The charges for going through the state of Maine would be somewhere between one-third and one half of the charges imposed by the CN or the CP. Now we are asked to forgive this debt and to smile while doing it. Mr. Speaker, it makes you cry crocodile tears.
It used to be the case that when you loaded a perishable commodity on the railway they had the responsibility to see to it-whether the weather be too hot or too cold-that the produce arrived at its destination in good condition. Now the government in its ignorance-and please note that I said ignorance, Mr. Speaker-has allowed the railroads to remove the priority for the movement of perishable products. Cars of potatoes, fruit and vegetables have been left sitting along the sidings in Canada until they rotted or froze, depending upon the weather. The CNR takes no responsibility for this. To the best of my knowledge and belief it is the only service in Canada for which the people have been asked to pay more and from which, on an annual basis, they have received less in the form of quality of equipment and service.
More and more producers in Atlantic Canada, agricultural or otherwise, are buying their own trucking outfits to move their goods to the markets of central Canada. This is not necessarily because it is cheaper or because they are making money on transportation-although they claim they are not
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losing-but rather because the railway system cannot deliver to the satisfaction of the customer. When you cannot satisfy your customer, Mr. Speaker, you do not have any business. Small businesses are going into trucking because the railroads, particularly the CNR, cannot deliver to their satisfaction.
I am looking forward to the day when CNR officials will appear before this committee, and I hope the minister will insist that we be given an opportunity to get an in depth accounting of present conditions. I should like the company to explain why wood products can be moved more cheaply in Maine than in New Brunswick, for instance.
I want also to know what is the cost structure. A blind man could tell that the Problem is not only the difference in equipment, though ours could not deteriorate any further. Does the problem lie with despatching? History shows that we have forgiven all debts, so they do not have to worry about money.
On many occasions I have inquired if the Department of Transport has ever made a study of other railroads in the world that managed to make a profit and compared them with the CNR, but I have not been able to get answers. Just this morning I put a question to an official of the department and he began his reply "I would conjecture-". Mr. Speaker, we have had a lot of conjectures and they have been costly. I think it is time we had some definitive and accurate answers.
We believe we have placed great men in executive positions in the CNR. Is the present situation their fault, or the fault of the government which has imposed constrictions upon the CNR? Is it because of bad management? Where is the weakness, Mr. Speaker, that causes producers to turn to trucks?
I hope the minister will also explain the competitive position between rail and water transportation. Other carriers are being put at a disadvantage. We know that the Post Office has discriminated against part of the trucking industry through adopting a plan to carry small packages. I do not think it has done very much for the Post Office but it has taken business away from private enterprise.
Mr. Speaker, this type of transportation is important to Canada. There is not much use, however, in the government investing in DREE and other aid projects if there is no transportation system to take goods to market at a competitive price. It does not make any difference whether the money is invested in Prince Edward Island, Newfoundland, New Brunswick or Nova Scotia, the product must go to market. If the goods cannot go through our ports at a price competitive with Maine, then they are not going to be competitive on the international market. If they cannot be moved to central Canada at a price competitive with other jurisdictions, then they are not going to be competitive with goods produced in the state of New York or the state of Washington.
I should like now to turn to CN Marine. As far as I know it is the only water transport structure that does not offer reasonable insurance protection for the vehicles it carries. The automatic coverage for a tractor-trailer carried on the CN


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marine ferry on the east coast is $500. To recover more than that one must sue the Crown. No matter how you try you cannot get marine insurance for travel on that ferry because all too often the tractor-trailers are not secured well enough. Not long ago when the ferry hit a big wave, a tractor-trailer tipped over and crushed three cars. Then when they got it off those three cars it went the other way and crushed two more. This is not hearsay, this is fact. There were five automobile owners who were in a jam when they tried to collect insurance, and there is no truck owner who can get insurance which will come anywhere near covering the loss of upsetting his load first left and then right. They did a good job on that one! This is what makes one wonder about Crown corporations.
CN Marine has insurance, but the only way you can collect from that insurance is to sue the Crown of Canada. It is not good to operate a ferry in such a fashion. Companies cannot afford to pay marine insurance for the loads they put on that ferry and have to take the liability into their own hands and sue the Crown, or buy insurance at such a rate that a maximum value load might cost you $15,000 in freight to move it from Cape Breton to Newfoundland. It could actually cost as much as $15,000 to move one load. Therefore, the people who use that ferry service are paying their own bills or, if they are big enough, bold enough, patient enough, and have money enough, they sue the Crown.
Why do we as taxpayers have to forgive for a fourth and maybe a fifth time? Why do we not have a Department of Transport with the capability of extending businesslike management to a Crown corporation? That is what it needs. I am not accusing this government as a government, I am accusing all governments of Canada historically for contributing to this situation. I am pleading with this government-and I hope the people of Canada will insist on this-to put this corporation on a paying basis. We in Canada cannot afford to allow the CNR or any other railway to neglect its road bed because it cannot find the ties. Canadian producers do not have the money to produce products when they cannot find cars to ship them. Canadian taxpayers are being abused by the Department of Transport and its minister in a very great way. A boulevard of fantasy to a fairyland of economics is what this tragedy of economic history would seem to be.


Lorne Edmund Nystrom: Mr. Speaker-


Steve Eugene Paproski: Twice in one day! This is the sunshine socialist.


An hon. Member:: Tell us about that sun tan.


Lorne Edmund Nystrom: I have a great fan club over here, Mr. Speaker, and I note that they are all informed.


An hon. Member:: We are jealous of your tan.


Lorne Edmund Nystrom: When I spoke earlier today there were only three members of the Conservative party here. They heard that I spoke so well there are now 13 or 14.


An hon. Member:: Just talk for a while and we will be back to three.


Some hon. Members:: Hear, hear!


Mr. Nowlan:: You are too young to know what a train is. Have you ridden one?


Lorne Edmund Nystrom: We now hear from the very articulate member from Nova Scotia. I hope he will get up during this debate and tell us how the transportation system should be organized so it will be more economical for all Canadians.


An hon. Member:: I thought you were well trained.


Some hon. Members:: Oh, oh!


An hon. Member:: Let's hear from the hon. member from Manitoba.


Lorne Edmund Nystrom: I am not a Manitoban, I am a Saskatchewanian, and I point this out in reply to that interjection from across the floor.
In any event, the bill before us today gives us a very good opportunity to talk about transportation and the way the economy and the industries of our country should be organized, and it gives us a chance to talk about some of the inequities that exist in Canada. The transportation system is really a vital key to how one organizes the country.
The bill before us is to recapitalize the CNR by writing off $808 million of a debt of around $2 billion that the CNR had accumulated at the time it was formed. There are three different things I want to refer to tonight in the remarks I intend to make. The first is that our party supports the move. We believe that writing off the debt of the CNR is a good thing. We believe the CNR should be on an equal footing with the CPR so it can give that company some real competition.
The second thing I want to concern myself with is the real fear I have that this move, even though it is a good move, is the first step toward privatization of the CNR, turning it into a private company by selling it off piece by piece, particularly the profitable areas, to private concerns and companies. I think that would be very wrong, Mr. Speaker.
My third concern when talking about a bill of this sort, to which I have already referred, is that we also talk a little about the transportation system of our country, how we plan it; we should talk about industrial strategy and how we want our country to be organized.
Let me have a look at the history of railways in our country. As I have said already, the move in itself is a good one. The CNR has been criticized very unfairly for a number of years as being a very inefficient corporation. The CNR has really been very efficient. If you go back to the time of World War II, Mr. Speaker, you find that the CNR really made a profit in almost all of those years; that is, if you take away some of the horrendous debt it has and the interest it had to pay on that debt which it inherited.


The CPR has always been in a different situation. It was subsidized very heavily by Canadian governments over the years, and as a result of that it is basically debt free compared to the CN.


An hon. Member:: What absolute crap.


Lorne Edmund Nystrom: When the CPR was formed-


John Patrick (Pat) Nowlan: Absolute historical crap.


Lorne Edmund Nystrom: Let me look at some of the facts. When the CPR was formed it was given $25 million in cash on an outright gift basis; it was given some 25 million acres of land; it was given other private railways that became part of the CPR in our country, and it was given all kinds of various rights and gifts by the federal government of this country. It is now worth about $5 billion, which is a lot of money.
The CPR has also been able to expand into several other businesses in our country. It is involved in land development through Marathon Realty; it is involved in the airline business through CP Air; it is involved in the resource industry through Cominco; it is involved in oil through CP Oil; and it is involved in the financial world through CP Investments.
When we consider the CN we see the reverse situation. Instead of being given all kinds of gifts and subsidies, as was the CPR, we find that the CNR was really formed when five railways in this country went bankrupt-the Intercolonial Railway, the National Transcontinental Railway, the Grand Trunk Railway, the Grand Trunk Pacific Railway and the Canadian Northern Railway. In 1919 these five railway companies as well as a few tiny branch railways or companies were formed into the CNR. So that when the CNR was formed it was loaded down right away with all kinds of debts. As a result it has always been in a very disadvantageous position in terms of competition with the CPR.
I want to say at the outset that I am in favour of this bill, which will take away much of that debt from the CNR and put it on an equal footing with the CPR, giving it an equal chance to compete right across this country.
Let me now say a few words about my fear regarding the privatization of the CNR. From the statements I have heard from the president of the CNR, the Minister of Transport (Mr. Lang) and other officials of the railway and the government, one of the objectives is to gradually sell off the CN. They will start doing that by selling off the more profitable aspects of the railway; that is, by taking away some of its profitable branches. They have already set up VIA Rail and are now talking about reorganizing other branches of the CN, such as the hotel end, for example. They are talking about prying this aspect away from the company. I maintain this should not be done.
One amendment I should like to see would result in the shares of the CNR not being traded publicly but remaining 100 per cent owned by a Crown corporation. This would result in its being operated as a Crown corporation in a similar fashion to the Saskatchewan Power Corporation, the Sas-
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katchewan government telephone company, the Saskatchewan insurance corporation and all kinds of other companies. This is the manner in which I would like to see the CNR operated, but it will not be done in that way.
There are many reasons why the CNR should remain a publicly-owned corporation. In fact, the CPR should be nationalized as well in order to have one national railway system in Canada. A transportation system should provide a basic service to people. It should not be in existence simply to provide a profit to its shareholders. If the railway system is publicly owned, then decent transportation will be provided to the various regions of our country. If that system is privately owned, its main concern will be the making of a profit. I do not believe in that, but it is the motivation of the free enterprise system.
Transportation should not be organized in that way. If it is, there will be greater concentrations of people in the huge urban centres such as southern Ontario, metropolitan Montreal and the lower mainland of British Columbia. At the same time there will be fewer people living in the farm regions, the small towns, the Atlantic provinces, the north and the other areas which are distant from the urban centres. People will gravitate toward the large centres if there is a privately owned transportation system, because transportation and freight rates will be lower.
If the hon. member for Annapolis Valley (Mr. Nowlan) and myself wanted to set up a shoe factory, we would do so in Toronto because it has the market and the freight rates are lower. Transportation should be organized in the opposite sense. It should be operated under a philosophy similar to that which governs the postage stamp. The postage stamp philosophy does not discriminate against people because of where they live. If a person lives in Inuvik and wants to send a letter to Ottawa, the cost will be the same as that for the person who wants to send one from Montreal to Ottawa: Some of that philosophy should be ingrained in the Canadian transportation and freight rate system.
If there was an equalization of freight rates in this country, a lot more would be done for the Atlantic provinces and the outlying areas than the DREE program is doing, for example. The DREE program is only good as long as the carrots or the gifts are there. When Santa Claus runs out of gifts, then there is no reason for DREE to stay in the place where it was established. Often it will fold up, or certainly it will not expand. If the freight rates were equalized from coast to coast, then there would be a reason for industry to stay and to expand.
I, as well as many other hon. members from the prairies, can give various examples of discriminatory freight rates and their effect upon the prairies provinces. Some commodities can be shipped more cheaply from Toronto and Hamilton to Vancouver than they can be shipped from Toronto to the prairies provinces. It is cheaper to ship certain goods overseas than it is to ship certain goods to the prairies because the transportation


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system is in the hands of large companies which are interested in making profits. There is no competition for those companies in the prairies. Thus, they have a monopoly and can charge what the market will bear. That is another reason why 1 believe the Canadian transportation system should be publicly owned and operated on behalf of all people.
I hope parts of the CNR are not sold off. If they are, the ones sold will be the profitable ones and the ones retained will be those which are losing money. The Liberal government has viewed Crown corporations over the years as follows: if it is profitable, sell it because it can be looked after by private companies; but if it is not profitable, then it should be subsidized by the treasury.
The transportation system should be an integrated system. It should be involved in the hotel business and be integrated with trucking companies, but companies and airlines. That would result in a national plan, and within the national transportation system, cross-subsidization could take place.
When the CCF took power in the province of Saskatchewan in 1944, one of its priorities was to ensure that small communities received bus service. Many villages, communities and hamlets received bus service because of that. They do not receive that service from Greyhound or some other private bus company because it does not pay to go into these small communities. They receive their bus service from the Saskatchewan Transportation Company, STC, which has been set up as a Crown corporation and is owned by the people of Saskatchewan.
The STC makes money on some of its lines, such as the run from Yorkton to Regina, which are large population centres. They are 115 to 120 miles apart. The STC is losing money on runs from Regina through little villages and hamlets, stopping every eight or ten miles. Sometimes the bus stops to pick up an old age pensioner who is going into the city; sometimes the bus stops to drop off a passenger who is going to visit someone in the next village or town. The Saskatchewan Transportation Company loses money on rural runs, but it uses the profits made on the busier runs to subsidize them. Without STC, rural communities would not have a bus service and they probably would be smaller today because there would be one less service for the people. But as a result of the publicly-owned bus system, these people have service. The only way that service could be profitable would be to charge excessively high rates, and then no one would use the service because of the cost. The example of the Saskatchewan Transportation Company could be expanded right across Canada.
In Yorkton and from time to time in Brandon, as is the case in Dauphin, Manitoba, there is a problem with inadequate air service because of the lack of population. Private companies do not want to provide air service to Yorkton and Dauphin because it does not pay. Thus, they cannot make a profit, nor can a dividend be paid to shareholders. The only way these communities will receive good air service is for a private company to be heavily subsidized, or for Air Canada to provide it. If a private company is going to be heavily subsidized, it might as well be publicly owned.
[Mr. Nystrom.)
If the CNR and the CPR were amalgamated and operated as a Crown corporation, then it could be used as a major planning device for our economy and would assist in diversif-ing our population. Most Canadians live in three or four of the larger population centres. This creates all kinds of problems in terms of crime rates, the noise of the big city, transportation problems, and hustle and bustle. Most of our big cities are built on the best farmland. Only one half of one per cent of Canada is class one farmland. If the urban centres are expanded, then more farmland is paved over. By taking away the grain and oilseeds industries, Canada will not be self-sufficient in the production of food.
For many reasons it makes sense to have a publicly owned transportation system which has as its motivation service to people and service to outlying areas instead of making a profit. Those are some of the matters which concern me about this bill.
Another conern is that if we do not have a publicly-owned transportation system, we will have to adopt the philosophy of the Minister of Transport (Mr. Lang) of user-pay. If that philosophy is adopted, outlying areas will have to pay the bill. Farmers on the prairies will have to pay the bill for transporting their grain. The Crowsnest rate will probably disappear, and farmers will then have to pay the full cost of transporting their grain.


Ramon John Hnatyshyn: Never.


Lorne Edmund Nystrom: Many of us on the prairies say "never" and "over our dead bodies." I am sure it would be over the dead body of the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn) as well as mine, but the Minister of Transport does not say "never". Sometimes he says "maybe," particularly right after an election. Perhaps as we go into a campaign he says "never", but reading through his speeches I have found that he is seriously considering getting rid of the Crow rate. He says that perhaps farmers will be given the benefit of that rate in some other way, but the user pay philosophy means that farmers themselves will pay the full cost of shipping their grain.
One of the benefits the country was supposed to have reaped from the CPR when that company got concessions from the public years ago was that the company was going to ship farmers' grain at a reduced rate forever. 1 am afraid that if we adopt the user-pay concept, that will not happen.
I want to discuss the issue of rail line abandonment. If we want railways to make money, we are obviously talking about abandoning unprofitable rail lines, rail lines which service small communities and which might not haul as much grain as rail lines which service communities in the big grain growing areas of the prairies. This issue affects many people in my area, and I want to spend a few minutes giving some specific examples.
The minister has talked for a long time about abandoning some rail lines. A commission chaired by Mr. Hall produced a



report on grain handling and transportation in western Canada. The Hall commission report was tabled a few months ago. It recommended a number of things with regard to railways and the prairies.
There are three lines in my riding which can perhaps illustrate the point I want to make. Mr. Hall divided railways into three categories. He said that about one-third of the rail lines should stay as part of the basic network. About another one-third are rail lines which it is suggested should go between now and the year 1981. The third group of lines is a group upon which the commission could not make a decision. They might be commercially viable but they might not. The commission feels that they should be the subject of further study. The commission recommended that those rail lines be put under the proposed prairie rail authority. The prairie rail authority is to make up its mind about the future of those lines. However, the minister has not yet established a prairie rail authority. He set up a committee, which is really an extension of his office, chaired by an individual in Saskatchewan, which is going to make recommendations on the future of rail lines in the country.
One of the prime factors in determining whether a rail line will go or stay is whether it is profitable. Because the Minister of Transport believes in the user pay concept. If the user is not paying enough, then the rail line will go. I would like to give three specific examples of what I mean.
There is a rail line in the northern part of my constituency which runs through the towns of Preeceville, Lintlaw, Nut Mountain and Kelvington and which hauls a lot of grain. That rail line should stay. The ten-year average on that line is about 73,000 bushels per mile. That is a lot of grain, and yet the minister is considering abandoning that line. A local committee from those communities was established a few months ago to save the line. They received a letter from the minister. If I remember correctly, that was on December 28. It was certainly toward the end of last year. That letter stated that in the following year a recommendation would be received from the prairie rail action committee about the future of that line. Unless the members of those communities fight really hard, my guess is that that line will go since the minister believes in the philosophy of user pay.
That philosophy discriminates against small towns and small communities. As Saskatchewan members know, places like Preeceville and Kelvington are not small towns, and when you haul 73,000 bushels of grain per mile on a railway track, that is not a small haul. It is a significant amount of grain. That line should stay, and it would stay if we had a rational transportation system, a system concerned about service to people rather than profit.
What is happening now-and I suspect that the minister is an accomplice to this-is that that line is being allowed to deteriorate. Snow is not being cleared off the line. It is getting run down. It is more and more difficult to argue that the line is viable, but that is part of the plan. The plan is to eliminate many rail lines in this country.
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There is another line in my constituency which runs from the town of Canora through to the little town of MacNutt, which is near the Manitoba boarder, close to the riding of the hon. member for Dauphin (Mr. Ritchie). That is another line which might be going between now and 1990. There are about ten elevators on that line. In the years in between 1967 and 1975, 1975 being the year the Hall commission was appointed, about 1.6 million bushels of grain moved along that line. That is about 42,000 bushels of grain per mile of track. The line is some 37.8 miles long, and it services a number of small communities. They are very fragile communities because they are located quite close to larger centres like Dauphin, Yorkton, Kamsack and Canora. In the small centres, if the railway goes, their elevators go. If the elevators go, so go the agents and their families. Where there are schools, they might be the next to go. If the elevators go, the reason for farmers to come to these communities also goes. Farmers will shop elsewhere and those communities will die. I do not want to see that happen. It is already happening too much on the prairies and in rural Canada; it does not have to happen.
A third line in my riding to which I want to refer is not as fortunate as the previous two. According to the Hall Commission report and all the indications I have received from the minister, it will probably be abandoned some time between now and the end of 1981. This line services two small communities, Jedburgh and Willowbrook, and hauls about 34,000 bushels of grain per mile. Both these communities are small, but they are communities. They have community halls, stores and post offices. They have grain elevators, and if the elevators go-and according to the minister they will-it is only a matter of time before the communities die. It is only a matter of time before some of the small farmers go, because if they have to haul their grain further to get to an elevator, they will not survive in business. Larger operations will, but the small ones will be squeezed out. Large operations can afford to haul grain longer distances.
In many of these places the taxpayer will have to foot the bill. These communities are on roads which are not built to carry large amounts of grain in large trucks. If large trucks are used on these roads, the roads will be damaged and municipalities will have to spend much more money upgrading them and keeping them in shape. Once again, the ordinary people of those communities will be hit the hardest.
That is an example of the tragedy which will be caused by the user pay concept. It is an example of what I mean by the tragedy of always trying to make a profit, instead of having a transportation system which will serve the people of this country. If we had a transportation system that had as its priority service to the people, we would not have wholesale rail line abandonment across the prairies, and there would be some hope for the small prairie communities which are gradually going to dwindle away and disappear.
We now come to the question whether we can believe the government. Transportation has been an issue in our part of


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the country for years. Before the debate this evening I searched for some statements made by the Minister of Transport and the Prime Minister in the last election campaign. This was in an effort to find any statement of hope for the people who live in those small communities I referred to in my riding and, also those who live in the ridings of almost any rural member from the prairies sitting in this House. I found that in the election campaign of 1974 the Prime Minister and the Minister of Transport certainly fiddled and sang to a different tune than the tune they are singing now.
I will quote some statements that will prove that without any shadow of a doubt. First of all, I quote from the issue of the Winnipeg Free Press of June 8, 1974. 1 am sure this will be of interest to all Conservative candidates, and it is of interest to our candidates. It reads as follows:
Justice Minister Otto Lang told a public meeting Friday night that if the Liberal government is re-elected not one railway branch line on the prairies will be abandoned as long as producers deliver to elevators on the line and the elevators continue to operate.
In the same meeting he said, and I quote again:
Countering opposition that he is out to close the many small grain elevators situated close to farmers... he declared that the smaller elevators will, in effect, remain as long as farmers want them.
I serve notice on the Minister of Transport that in my riding there are three "save our rail" committees. In each of these three communities where these rural lines travel the people want those elevators, they want those branch lines, and the farmers will continue delivering to those elevators as long as the elevators are there. The elevator companies in some of these places have assured me that they have no intention at all, Mr. Speaker, of closing down the elevators. They will be there as long as the Minister of Transport makes sure the rail lines are there. I say to him: "Let us make sure that you live up to your promises". With another election coming the Minister of Transport will probably make those same promises again, so I remind him of the promises which he has made to the country.
Again, another statement from the Winnipeg Free Press of June 11, 1974:
Otto Lang said, "as long as the Liberal party forms the government and as long as producers wish to continue to deliver to the elevator of their choice, not one rail line will be abandoned."
Now I wish to quote from the Winnipeg Free Press of June 15, 1974, under the headline "Prime Minister Outlines Farm Policy". I did not know that the Prime Minister (Mr. Trudeau) knew one cow from the other, but he was in Winnipeg and on June 15 he outlined the government's farm policy, according to this newspaper. The Prime Minister said:
He also reiterated his party's pledge to end any freight discrimination on the movement of meat, livestock and feed grains across Canada. This would not affect the Crowsnest special rates to aid the movement of grains for export to the west coast.
In that particular instance the Prime Minister is talking about saving the Crowsnest rate. I now quote from the Toronto Globe and Mail of June 15, 1974:
Justice Minister Otto Lang promised to pay farmers premium rates if they volunteer to take longer hauls, and to allow smaller grain elevators to stay in use as long as farmers want them.
As long as farmers want to use the grain elevators, they will stay in use, according to the Minister of Transport. I have a further quote from the Prime Minister saying approximately the same thing. This statement is also taken from the Toronto Globe and Mail of June 15, 1974:
He also added another plank to a transportation policy... He promised yesterday (June 14, 1974) not to abandon rail service on branch lines as long as elevator companies considered that continued rail service was warranted.
These are examples of campaign promises that were made in June, 1974, all of them to the effect that if farmers wanted to continue delivering grain to the elevators on the branch lines as I am sure they will in all of our ridings, not one elevator would be closed by the government of this country.
Let us make sure that the people who live in those areas know what the Prime Minister and the Minister of Transport have said. When the election campaign gets under way these promises will be heard again. The Minister of Industry, Trade and Commerce (Mr. Horner) will be adding his promises as well. We must be certain that the people do not make the same mistake again and re-elect those members to the House of Commons. If they do, abandonment of the rail lines on the prairies will come to pass.
All of us can pick up a copy of the Hall report, and we can see the maps of the railways, we can see the different colours of the lines and we can see quite visually which rail lines will be abandoned. When Mr. Justice Hall tabled his report, so clearly and well presented, it seemed to me that he did not want all of those rail lines abandoned; he wanted a prairie rail authority set up to study them further.
The indication I am getting is that most of those rail lines will be abandoned. I say to the people of Canada: "Let's put pressure on the minister for the few short months that he is going to be on his job". We must try to have him make a commitment to the effect that those rail lines will stay.
I see the hon. member for Crowfoot and the hon. member for Timiskaming (Mr. Peters) sitting across the way.


John (Jack) Henry Horner: We're old friends.


Lorne Edmund Nystrom: I know the minister in charge of industry, trade and commerce would not make a statement like the one the Minister of Transport has made. I know that he is a man of much more integrity than the minister from Saskatchewan.
I am sure the minister from Crowfoot is ashamed of these old Liberal campaign promises of 1974.


John (Jack) Henry Horner: I am not ashamed of anything I have ever done.


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: He says he is not ashamed of anything he has ever done.


John (Jack) Henry Horner: I have many friends on the opposite side of the House and I have many enemies. They are still the same.


Lorne Edmund Nystrom: The minister is saying that he is not ashamed of the statements his colleagues in the cabinet have made. He must be embarrassed by what has been said by the Minister of Transport. I think it was the Minister of Industry, Trade and Commerce who said at one time that the Minister of Transport should be tarred and feathered. I am sure he still believes that, and that he is a little embarrassed.
I return to this quote from the Winnipeg Free Press of June 8, 1974 which states:
Justice Minister Otto Lang told a public meeting Friday night that if the Liberal government is re-elected not one railway branch line on the prairies will be abandoned as long as producers deliver to elevators on the line and the elevators continue to operate.
The Minister of Industry, Trade and Commerce must be embarrassed by that statement. He knows the Minister of Transport intends to abandon some lines. It must turn his stomach to sit in the cabinet with a minister who so blatantly breaks his campaign promises and so coolly will say to the people in my riding that their rail line must go. I know the hon. member for Vancouver-Kingsway (Mrs. Holt) must be disgusted with that type of dishonesty. Once the Minister of Transport is re-elected he will forget all about his promises. He sets up smokescreens by setting up studies and he teases the people and pretends that their lines will be saved. But when the time comes the lines are not saved. I hope the people who live in the prairie provinces will realize this same Minister of Transport, and his new "Tonto" over there are making promises out of both sides of their mouths.
I submit that our whole transportation system should be pulicly owned and controlled. The prime aims of this system should be to provide a service to the people of Canada, not to make a profit for the shareholders. That should be the prime need to which we should be addressing ourselves.
I say to those in this House who are firm and passionate believers of free enterprise, such as the hon. member for Annapolis Valley (Mr. Nowlan), that there are other areas in which profits can be made. There are other areas in which people can invest their money, rather than investing it in the transportation system to make a profit. If you do, Mr. Speaker, you are shafting your neighbours in the poorer parts of the country. Your are saying that rail lines in Saskatchewan should be abandoned. Small communities in my province would disintegrate because it does not pay to keep the rail lines open to some of these communities.
We should not just look at the ledger sheet. There are social conditions to take into account. If some of these lines do not pay, as long as they serve a good number of people, haul a good amount of grain and other freight, they should be subsidized.
In the future, more and more people may become alienated from the big cities and urban life. There may be more and more energy problems. Perhaps more people will return to the farms and the small communities. Perhaps some day we will have a government that is sensible about industrial strategy
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and which tries to help business locate in small communities. If that happens, maybe those communities will grow and perhaps those rail lines will pay for themselves.
They surely will not do that if we take the opposite approach and say the user must pay, that they must be economically viable, that CN must be a commercial corporation and operate like any other corporation. If we take that philosophy, we will all be losers in this country. There will be a few large population centres, but they will not be in Nova Scotia or Saskatchewan. The people are going to congregate in other areas. That is wrong, dead wrong.


Benno Friesen: Mr. Speaker, I wonder if the hon. member would permit a question.


Lorne Edmund Nystrom: Yes, Mr. Speaker.


Benno Friesen: I noted the hon. member's remarks regarding debt forgiveness. I cannot help but wonder what this would do to the competitive advantage it would put the railways in with respect to the trucking companies. Can the hon. member tell us whether the truckers' union, the Teamsters, would be in total agreement with what he is proposing?


Lorne Edmund Nystrom: Unlike the hon. member for Surrey-White Rock (Mr. Friesen), I do not have many close personal friends in the teamsters' union. However, I am sure that if we had a rational transportation system in this country, the members of the teamsters' union would agree. Trucking is only one part of it. Railways are another very important part. My experience with trade union people, the working people of this country, is that they are concerned, not just about a fair deal for themselves, but about a fair deal for their brothers and sisters, in fact for all of the country. I am sure that if the hon. member consults the teamsters' union, he will find they are in favour of the general philosophy I have talked about, which is a publicly owned plant and a rational transportation system in our country that will service all the communities, not just those who happen to live in the big centres.


Mr. Whiteway:: Mr. Speaker, I wonder if the hon. member would entertain one more question.


Lorne Edmund Nystrom: Yes, Mr. Speaker.


Mr. Deputy Speaker:: Order, please. The hon. member's time has now expired. This would require unanimous consent, not only the consent of the hon. member. Is there consent to allow the hon. member for Selkirk (Mr. Whiteway) to ask a question?


Some hon. Members:: Agreed.


Dean Waldon Whiteway: Mr. Speaker, the hon. member talked about public ownership of transportation. Does he have in mind to expand public ownership to the building of means of transportation such as airplanes and buses, possibly modelled after the recent Manitoba experience under former Premier Schreyer?


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Lorne Edmund Nystrom: Mr. Speaker, I am afraid I do not know the examples in Manitoba to which the hon. member is referring. Perhaps he can shed some light on the good government of Mr. Schreyer in that province for many years. To answer his question in general, there is a case for having public ownership of the building of aircraft in this country and the building of buses in some cases. As I said, we have to plan the entire transportation system. If in that planning it makes sense to have the factories which manufacture the airplanes publicly owned, that should be the case. It is part of the overall planning one must look at.


John Patrick (Pat) Nowlan: Mr. Speaker, I certainly welcome the opportunity to participate in this debate on Bill C-17, another recapitalization of a recapitalized debt of a national railway which has obviously had financial problems right from the start.
It has been most interesting listening to the various comments. Certainly the hon. member for Yorkton-Melville (Mr. Nystrom) gave a very interesting and entertaining speech. Some of his historical perspective was obviously a little coloured because of his political perspective.
The hon. member said some kind things about me. I would not want to be unkind about him. However, one part of his speech that entertained me was the latter part, when he read off political promises of the 1974 campaign. I would be the last to try and pull rank in terms of chronological years or even years of seniority in this House, because we both came here at relatively the same time. I may have been here a little longer, but he has been here long enough to know that political promises from the other side, and especially those of the Prime Minister (Mr. Trudeau), with regard to transportation during an election campaign are only worth the paper on which they are written, a couple of cents and nothing more.
I do not want to be unkind on this interesting night in the latter part of the week. However, the hon. member for Yorkton-Melville almost shed crocodile tears when speaking about these broken promises. There was another election in 1972. I did not see too many crocodile tears between 1972 and 1974 when his party was supporting and buttressing a government that was abandoning rail lines all across the way. It was doing all the things about which the hon. member sincerely said he was concerned. He did not show that much concern nor did any members of his party between 1972 and 1974 when they voted yea, yea, yea every time Pierre Trudeau said yea, yea, yea.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: They said: "You jump and we will jump higher." The parliamentary ploy monster in the front row from Winnipeg North Centre dusted the cobwebs off the parliamentary rules in order to support this government which has brought ruination not only to transportation but to the unity of this country.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: I do not want any more crocodile tears from parliamentary salamanders who slither over to the opposite side for parliamentary power.


Some hon. Members:: Hear, hear!


John Patrick (Pat) Nowlan: It is interesting that we are debating Bill C-17. I want to be most ecumenical before I get to the merits of the bill because, quite frankly, the hon. member for Yorkton-Melville gave a gosh darned good parish pump speech for his constituency and for a lot of other constituencies in the west.
The hon. member for Vegreville (Mr. Mazankowski), the chairman of our transportation committee, when speaking last Tuesday gave a detailed assessment of the facts, figures, computations and compilations on the refinancing of refinanced capitalization deals. He could not get into all the details of constituency problems. He gave an overview. I hope to repeat some of it. Quite frankly, I read his speech of Tuesday and found it most informative.
The hon. member for Yorkton-Melville gave a gosh darned good parliamentary constituency speech. He did not talk about Bill C-17. As I listened to him and other speakers, I found it a little bit paradoxical. Perhaps it is not the time to say this, but I have sat in this House for 12 years and I have heard about some of the fundamental problems of this country. One of them that I do not accept is that because of the historical situation, having, in effect, two founding races, we do not possess a distinctive Canadian personality which makes us very different from other countries. I, for one, pay respect to the Francophones, to the Quebecois, who have a fantastic pride in their history and culture; mainly, it may be, for self-preservation, but they have it, and there is homogeneity there.
We all know, whether we listen to Jean-Luc Pepin, John Robarts or any of the other speakers on the unity commission, that the Anglophone dimension seems to be muted. It is muted in the Mazankowskis of Vegreville or in the McCains of Florenceville. We find a heterogeneous contribution to the Canadian scene which perhaps lacks individuality of culture because we are many cultures and many races. But, Mr. Speaker, I refuse to accept the defeatist attitude of some of the Anglophone politicians and political leaders in various parts of the country who say that, should unthinkable things occur, the Anglophone community, comprising basically nine provinces out of ten, is going to wither and die. You know, Mr. Speaker, there are institutions in this country apart from the House of Commons. There are institutions in this country which are neither Anglophone nor Francophone but Canadian. One of them is the CNR. Another is Air Canada. Another is the CBC. And my young friend to my left, who has not got on a choo-choo train, most likely does not appreciate this in terms of politics.
The hon. member for Winnipeg North Centre (Mr. Knowles) is aware of the contribution, in terms of political parties, which the Conservative party made to the establishment of the CBC and other institutions in this land. There are


Canadian institutions with Canadian characteristics which transcend language. I don't care if you are a francophone on the north shore or on the south shore of the St. Lawrence river, or whether you live in the West in the prairie bowl, in the great sky land or in the Rockies; when you hear that old choo-choo of a train you feel Canadian. They do not have that feeling in the United States. There is no nationalized state railway running side-by-side with a private enterprise line from coast to coast. There is no state-owned airline.
As a Conservative, as a member of a party which was responsible for some of these things historically, I agree there are obviously places for state-owned corporations. Perhaps part of the dilemma in which Canada finds itself today is because an institution which has helped bring this country together, the CNR, is not in the state of health it was, and perhaps does not enjoy the respect and confidence of Canadians from coast to coast as it did, when some hon. members on this side and across the way, including the Acting Speaker (Mr. Turner), worked for that company.
It is not the only institution in which Canadians perhaps lack confidence. Indeed, the situation reminds me somewhat about the riddle of the hen and the egg. Which came first? I am sorry the Minister of Industry, Trade and Commerce (Mr. Horner) has left the chamber. I certainly would not care to think he did so because he knew I was going to speak. I assure hon. members that I would be the last to suggest anything to him that he hasn't said before.


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: The hon. member for Yorkton-Melville (Mr. Nystrom) is quite right. The hon. member for Vegreville (Mr. Mazankowski) and the hon. member for Carleton-Charlotte (Mr. McCain) are quite right. This country was never built on a user-pay concept. There would never have been a Nova Scotia, there would never have been a Saskatchewan, a British Columbia or a Northwest Territories if a user-pay concept had been followed. How many members of parliament could afford to come to Ottawa on the basis of user-pay? This country was not built on the user-pay concept and it cannot stay built on such a concept. While a user-pay objective might be followed where there are competitive, compensatory rates, you do not bring the periphery into the centre and make it part of the whole when you have a minister of transport, from whatever part of the country, defining government policy as "user-pay".
There are some odd paradoxes here. The CN helped pull this country together. But the CP helped pull us together, too. Was the Canadian Pacific, with all the things which the hon. member to my left said was given to it, built on a user-pay concept? Who would ever have started it on such a basis? When my right hon. friend from Prince Albert (Mr. Diefen-baker) built the Pine Point Railway, that wasn't done on a user-pay concept. There was a natural resource to be developed, though. So in this respect I agree with the hon. member in some things.
I shall certainly not repeat what my hon. friend from Selkirk (Mr. Whiteway) has said, but I will say this: the longer I am
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here, Mr. Speaker, the more cynical I become, in a sense. Yet I become ever more confident that government through Crown corporations is just not as economical or as efficient as when private enterprise, governed by the marketplace, tries to run the show.
As I say, the CPR also helped build this country, and that is where I differ from my young friend to my left both in terms of historical perspective and political philosophy. However, to paraphrase what Winston Churchill said many years ago, if you are not a socialist before you are 30 you are a damned fool; but if you are a socialist after 31 you are even more of a fool. And now there are a lot of old fools over there.
I do not want to talk about them tonight because doing so would not change their spots, but there is a fundamental difference between nationalization and rationalization. I am aware that some telegraph offices were closed down in my part of the country, but the telegraph service was hardly used enough to justify its continuance. I do not like phone calls coming from Montreal wishing well to my constituents. I do not like good wishes coming by long distance phone from Saint John or Montreal because there is no local telegraph service; it has been rationalized. These are inconveniences. If you ask people when they last sent a telegram you find they haven't sent one for years.
In my area, they have tried to close down the spur line of the CP, the DAR, for years, while this government was just playing around with rapid transit and the mass movement of people. Perhaps they will try again to close down this spur line which goes from Halifax into Digby, the heart of my riding. It is a natural way of moving people from the valley to the city. I would love people to stay in small towns. I myself am from a small town. I also know that as farms get larger there are fewer people needed on the land, so there is migration. We would like to rationalize, but obviously, where you have a captive shipper and compensatory rates are not being charged, you become very concerned about the consequences. 1 remind hon. members that this party was in office when this country was put together. We agree, basically, that transportation has to be a tool of national development.
I was amazed about two years ago when the then minister of transport, Senator Marchand, convened a conference called WEOC. There was some hesitancy in recognizing that transportation was a tool of national development. We wasted a lot of time before that principle on which this country was built was invoked and used from coast to coast. This House created the CTC and gave the job of chairman to the then minister of transport. At that time compensatory rates were to be the be-all and end-all. I am all for a transportation policy that has business guidelines and is a tool of national development.
I am amazed at some of the history I hear from my friends to my left. It reaffirms my view that there should be consolidation of school curricula. We have some fundamental problems in this country. I am not trying to downgrade them but sometimes a note of levity does not hurt. It is not just a
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question of anglophone history or francophone history and who won the battle on the Plains of Abraham. I guess each province has different schoolbooks. When I hear about the history of the CN from my friends to the left, I am amazed. Some members of that party, especially the hon. member for Regina-Lake Centre (Mr. Benjamin), have a sincere personal interest in railways from their experience in earlier days, and I would not compete with him on that basis. But when he tries to tell me the history of the re-capitalization of the CN and implies that its problems today result from its still carrying the load of the Grand Trunk Railway, the Northern Railway and all the consolidations of railways in the 1920s and 1930s, I say that is a lot of hogwash.
A short, simple pithy name for this bill would be "the third train robbery." You might even say it is the fourth train robbery. The first was the capitalization of all the lines that went belly-up back in the 1970s. My friends are correct, they went bankrupt and the CN grew out of the problems of too many rail lines and disordered systems. They finally got some order out of chaos, though not complete order, of course.
There was a forgiveness of debts in 1933. According to the information given by the hon. member for Vegreville (Mr. Mazankowski), $1.2 billion was forgiven at that time. We had the first forgiveness of the other operation in 1937 when under the Capital Revision Act something like $1.8 billion of debt was forgiven. This is when the train robbery really began.


An hon. Member:: Watch out, Horner is back!


John Patrick (Pat) Nowlan: I am not worried about "Old Crowfoot". I have dealt with "Old Crowfoot" in more intimate circles than the formality of this Chamber. Whether it is intimate contact, formal contact or parliamentary contact, I do not worry about my scar tissue. Before I come to the user-pay aspect I should like to ask my late venerated friend, the Minister of Industry, Trade and Commerce (Mr. Horner), what he thinks about it and how he reconciles his view with that of the Minister of Transport (Mr. Lang).
Let me get back to the train robbery, Mr. Speaker, because this is a serious matter. The history given by some members of the NDP is astounding. We should check the social study classes in this country and send some parliamentarians to the library to get their facts straight.
In 1952, when some of the present members were around, a bill was presented to this House. I do not fully understand the system of debt equity and I do not want to get into that. I have great respect, however, for Mr. Bandeen. I think he is a dynamic businessman who wants to put the CN on a profitable footing; but when, to justify this bill, he says that this is the first time the CN is in a position comparable to the CP and will have a chance to compete, I say that is hogwash.
In 1952 there was a debt capitalization bill when the debt equity ratio of the CN minus parliament was forgiven to the tune of $2 billion and the debt equity ratio of the CN was almost identical to that of the CP. As the hon. member for Vegreville said in his speech on Tuesday, the then president of the CN, Mr. Donald Gordon, said in a private speech to
employees and officers of the CN: "Look, we have had this debt forgiven; we are now in the same position as CP, but that entails the obligation to compete with them. We cannot now use the excuse that we have to pay interest on this heavy debt which makes it impossible for us to compete."
That is why I call this the second or third great train robbery. I agree with the hon. member for Yorkton-Melville (Mr. Nystrom), and especially with the hon. member for Carleton-Charlotte (Mr. McCain), that we cannot keep on doing this-in 1952 there was a ten-year plan, and then in 1953 they were getting into debt again-there has to be an end to this somewhere. This time we are forgiving about $800 million.
I hope this bill goes to committee, Mr. Speaker, and that officers of the CN tell us how they will run the railway so that five or ten years ahead there will not have to be another recapitalization. There were three recapitalizations-1933, 1937 and 1952. The first was of the original debt, so there have really been two recapitalizations since the beginning. This is the refinancing of the recapitalized debt of a bankrupt outfit.
The hon. member for Surrey-White Rock (Mr. Friesen) raised the question of the problems of teamsters and the trucking industry which is most relevant. This company is a national institution and the parliament of Canada, another national institution, obviously has to bail it out. There comes a time, though, when we must ask why this should be. The hon. member for Carleton-Charlotte said we will forgive this time. There is an old song that says "forgive and forget", but I think parliamentarians had better not forget. We are being asked to do the same thing today that we were asked to do in 1952 and in 1937. We want to know the guidelines that will prevent this from happening again.
In 1952, after the debt was recapitalized to the tune of $2.8 billion, the then president of CN, Donald Gordon, entered upon a massive dieselization program almost overnight. Within a year the old steam locomotives were almost all recapitalized. Where is the private enterprise benefactor of all the largesse others have talked about today? They knew they could not accomplish this, and they would not be responsible for doing so overnight. They had to phase in the program.
In addition, after 1952, as I understand history and as I have been informed, because of recapitalization a blank cheque was given to start anew and the CN rushed into the trucking industry. That is why the question of the hon. member for Surrey-White Rock is very relevant. CN rushed into the trucking industry and bought trucking firms in some cases at outrageous prices-because the company knew its backup was the power in the presence of the mint down here on Sussex Street. Even I could almost sing that song "I forgive"-with qualifications-but I cannot always forget, and nor should we forget.
There are serious things to be considered. For instance, we must consider the passenger service that is supposed to be



changed or eliminated; the Crowsnest pass rates are to be changed; and there are other matters the president of the CN says will happen under this bill. I agree with what every other speaker has said in this House-and I do not care what side of the political spectrum a member might be on-that by this sort of performance we are chopping off the debt on the one hand and starving as a result. This is what happens when you have a regional economic policy that is not integrated with transportation policy.
Perhaps 1 am on the periphery of such change, as is the hon. member for Vegreville (Mr. Mazankowski), the hon. member for Yorkton-Melville (Mr. Nystrom) and the hon. member for South Shore (Mr. Crouse), who, incidentally, so ably handled our party's position in respect of Bill C-2 on fishing and recreational harbours. He talked time after time about the problem of getting the products of the sea to the marketplace.
As I have said, the trucks have taken over to a large extent, but when you talk about fish and agricultural products in my part of the country you cannot do so meaningfully unless you also talk about transportation to get those products to the market place. I have plants in my riding that have been expanded through the DREE program, but because of successive and cumulative effects of freight rate increases around the Lakehead, where we used to have markets, they again experienced difficulties. There was a kraft paper plant at the head of my riding that received a DREE grant one month of about $200,000 to $300,000 to expand plant facilities. Before that expansion was completed there were two freight rate increases which effectively prohibited that company from servicing its customers, let alone expanding. This was some three years ago, but that is the type of thing that is happening.
I will conclude from the point whence I started, Mr. Speaker.


An hon. Member:: Where was that?


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: I am awfully sorry to see that my friend, the Minister of Industry, Trade and Commerce (Mr. Horner), has disappeared again. He is elusive, a will-o'-the-wisp, a Kilroy; he is here today and gone tomorrow. I think it is poetic that the Minister of Industry, Trade and Commerce is one of the ministers in charge of tourism. I can relate this comment to the railway bill by referring to the tourist package that he has propounded. There has never been a minister travel farther in such a short distance than the hon. member for Crowfoot. He is a master, Mandrake the magician, travelling so far by going just about 15 feet. I do not know if that comes under a tourist plan, walking across the floor and changing your political spots. Do you get a premium for that or a discount? Is it a family package deal or a DREE grant?
I think it is very appropriate that the Minister of Industry, Trade and Commerce is responsible for tourism, because every tourist finally has to come home; every tour finally ends and the vacation is over. It will be a sad thing in a way because the hon. member for Crowfoot is a personal friend of mine, though
Railway Act
I cannot say a great political colleague at the moment. But great political and poetic justice will take place, or might, at the next election. Obviously there will be a change of government, and can you imagine the turmoil in the opposition ranks if the hon. member for Crowfoot ever bubbled forth and won and had to sit in opposition with the Liberals when we took over the government?


Some hon. Members:: Oh, oh!


John Patrick (Pat) Nowlan: I think that would be political and poetic justice. I almost wish it would happen, even though it would mean one of my colleagues would have to be defeated.


An hon. Member:: You are dreaming.


John Patrick (Pat) Nowlan: The hon. minister for consumer affairs or whatever department he is with at the moment is not with it, because I am not dreaming. On the basis of the facts as I know them, Alberta will obviously continue to be pretty true blue. If I could only protect the one colleague who might have to bite the dust for this type of thing to happen, I think it would be tremendous. Members of the opposition, as they then would be, would have to learn to handle the hon. member for Crowfoot in caucus. That would be an education that would give any tourist guide the right to a special rate at any time.
Now, Mr. Speaker, back to the main issue.


An hon. Member:: You were never on it.


John Patrick (Pat) Nowlan: Yes, I was speaking to Bill C-17. Let me say in conclusion that I hope this bill gets to committee. I still think it is paradoxical, and perhaps ironic, that one of the national institutions which has helped bring us together is in difficulty. Now we have Bill C-17 I hope that Bandeen and others come to the committee and give us firm guidelines indicating how we are going to avoid going through this procedure again and again and again. You can only refinance or re-capitalize so often. I hope many of these problems will be clarified. Obviously there is much interest in what will happen to Crowsnest pass rates. There is also much interest in the ferry system run by the CN. We are deeply concerned about the status of the ferry system in Atlantic Canada. The hotel operation is another facet that is of interest. I will leave that subject to my tourism friend. There are such things as "at and east" rates for the export of grain.
When we get back to fundamentals, it seems our transportation policies did not necessarily work cohesively. They grew a little bit like Topsy. The government has gone through recapitalization like this from time to time. These things helped build this country.
Perhaps if we can put some strength, vitality and better debt financing into the CN, making it a very vibrant part of the country, we will get it back as a national institution. Perhaps this will alleviate some of the problems of this country. Obviously they will not all disappear. Maybe this will become a company we can be proud of as an institution. We will then not have to take a hangdog, defeatist attitude because of Rene
2728


Adjournment Debate
Levesque and the power of la Grande allee. We have many things to be proud of in this country in terms of national institutions. These problems do occur, but they come and some of them go.
I do not know, Mr. Speaker, but I think it is time for me to go, so let me call it ten o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Hon. Stanley Haidasz (Parkdale):: Mr. Speaker, on February 1, when the traditional heart month was launched, I asked the Minister of National Health and Welfare (Miss Begin) what new initiatives she had taken to help Canadians fight cardiovascular disease. What prompted me to ask this question was the statistics concerning the epidemiology of this disease in spite of improved medical and surgical technology. Although a perceptible decrease in mortality from cardiovascular disease has been noted, it is still the number one cause of morbidity and mortality in Canada. In fact, cardiovascular disease accounts for approximately 77,000 deaths in our country. Recent statistics also reveal that there are about 2.5 million Candians suffering from some form of cardiovascular disease.
This kind of incidence is of epidemic proportions, and yet government health authorities do not consider cardiovascular disease to be an epidemic. That is why initiatives at all levels of government are few and inadequate. Cardiovascular disease in our country causes absenteeism, reduced productivity, wage loss, chronic disability and death which in economic terms alone amounts to a loss to Canada which exceeds $200 million annually. Above that, the human tragedy and suffering are incalculable.
Arteriosclerosis is known to be a multifactorial disease with many risk factors, such as obesity, hypertension, tobacco smoking and so on. To date medical research has achieved a great deal to cope with some forms of this disease. But it is clear that coronary heart disease, in particular, has a multifactorial origin. Many factors are related to it in relatively consistent but unknown ways. Many of these factors can be controlled or prevented. Therefore, there is hope to develop a fairly effective preventive approach.
This approach can become more effective if appropriate investigation into these factors is carried out. This means more

research and better public education in cardiovascular disease are needed. In this area, the Canadian Heart Foundation has taken many initiatives and its members and volunteer workers are doing a tremendous job for which they are to be commended. Any increased financial assistance from all levels of government and from the public would be beneficial and appreciated by health workers and especially those people directly or indirectly affected by cardiovascular disease.
It has been well known for many years that most deaths due to acute myocardial infarction, the most common cause of death in Canada, occur within the first two hours of the onset of symptoms and are specifically due to disturbances in cardiac rhythm. Effective electrical and drug treatment of arrhythmias has reduced the hospital mortality, but not the home or community mortality. Therefore, if mortality from acute myocardial infarction and other causes of sudden unexpected death is to be reduced substantially, a major reorganization of emergency medical services is needed. Public education in basic life support procedures, such as cardio-pulmonary resuscitation, is a necessary primary task.
Next, rapid delivery of highly trained ambulance personnel should be available. For this type of case, more public education and trained personnel are necessary. This means more financial resources. But above all, coherent provincial and national policies are necessary.
Therefore, the Minister of National Health and Welfare (Miss Begin) can take greater initiatives and allocate more resources to meet this new challenge. A vigorous campaign of federal leadership is urgently needed. The minister could call an early meeting with provincial health ministers and the medical profession to launch a co-ordinated comprehensive program at all government levels to fight this insidious epidemic. Mobilizing all the necessary resources could do a great deal to diminish the incidence of cardiovascular disease.


Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I congratulate the hon. member for Parkdale (Mr. Haidasz) on his very comprehensive representation. The hon. member is highly regarded as a doctor of medicine and as one who is very concerned about his constituents and Canadians generally.
I am pleased to be able to reply that the government has taken a number of new steps which I hope will help Canadians fight cardiovascular diseases. Several parts of the Department of National Health and Welfare are carrying out activities which we expect will have an impact on the prevention and control of heart attacks, strokes and other problems of the cardiovascular system.
How we live often determines when as well as how we die, and in no condition is the influence of lifestyle more important than in the case of heart attack. Consequently the prevention of premature death as a result of heart attacks is a major goal of the department's expanded efforts to assist Canadians to adopt healthful lifestyles.


On the subject of cigarette smoking, one of the major risk factors for heart attack, I am pleased to inform the hon. member that a series of activities is being developed or is under way as part of a new comprehensive tobacco and health plan. I want to mention especially that the department plans to expand efforts to encourage children to avoid smoking; to focus on smoking by young women among whom, until recently, smoking was increasing rapidly; to review smoking cessation programs and encourage those which are most effective; and to persuade manufacturers to reduce tar, nicotine and other constituents of cigarette smoke.
In a news release on February 2, the minister announced the launching of a nutrition program being carried out by the department in co-operation with provinces, heart foundations and other groups. The program is intended to reduce the impact of cardiovascular disease. Recommendations are designed, among other things, to deal with another of the major risk factors for heart attack, elevated blood fat levels.
I am also pleased to announce that a new departmental publication, "Food and Your Heart", is now available from provincial health departments, local health units and heart foundations.
The newest departmental activity to promote physical fitness is the exercise break package to help fitness leaders and health professionals conduct active breaks for employee groups, elementary and secondary school children and the elderly. Funded by the Federal Labour Intensive Project, the exercise break package will cost some $1.1 million, from a total departmental FLIP allocation of $1.4 million, and will create more that 200 jobs across Canada.
In addition to the above, a working group of Canadian physicians who are experts in the field of high blood pressure are preparing for the department, with the department's cooperation, a therapeutic monograph on this subject. This document will discuss the drugs used in treating high blood pressure and should help physicians in the selection of drugs.
Finally, I want to mention two new developments intended to sharpen the focus of our efforts and to assist in the co-ordination of various departmental activities in the field of cardiovascular disease. The first of these new developments is the establishment of a focal point on lifestyle and health promotion. The main purpose of the focal point is to assist in developing greater collaboration among governments and other agencies in lifestyle and health promotion activities and to bring about better co-ordination of activities within the department. The second development is the establishment of a co-ordinating mechanism for programs concerned with cardiovascular disease within the health protection branch.
Before I close I wish to correct a misprint in Hansard. The minister's reply on February 1 should have stated that the 1978 campaign target for the Quebec Heart Foundation is $1 million, rather than the $6 million recorded.
I have much more to say, but time does not permit. I will provide my hon. colleague with a complete copy of my notes.
Adjournment Debate


LABOUR CONDITIONS-LAY-OFFS IN NICKEL INDUSTRY-GOVERNMENT ACTION TO ALLEVIATE
John R. Rodriguez: Mr. Speaker, this afternoon I asked a question of the Minister of Energy, Mines and Resources (Mr. Gillespie) regarding his response to the report and recommendations of the Ontario legislature's select committee looking into the Inco and Falconbridge lay-offs. I pointed out to the minister that the select committee proposed some very practical suggestions, such as a 60-day moratorium on the lay-offs, a 30-day stockpile of nickel, with the two levels of government providing interest-free loans for the stockpiling, a job-sharing program, a retraining program and an improved pension plan which alone would save some 1,000 jobs. I pointed out to the minister that this select committee comprised members of all parties of the Ontario legislature and that in fact the Liberals on the committee all voted for the recommendations without hesitation.
I also pointed out that the committee held a press conference yesterday afternoon at 5 p.m. and released its report and recommendations at that time. However, in answer to my question the minister said he did not know what the recommendations were but that he had requested such information from the Ontario government and was hoping to have the recommendations later on. I asked my question 17 hours after the report was made public. There was a headline story in the Globe and Mail this morning. There were reports on every radio and television broadcast last evening and this morning. The minister rose in the House of Commons this afternoon and said that he has not yet seen the report or the recommendations.
Is this the action and attitude of a concerned minister and of a concerned government? Absolutely not. I have never in all my 40 years seen such callousness and disinterest for people's well-being as I saw displayed, particularly this afternoon, by the Minister of Energy, Mines and Resources (Mr. Gillespie). For four months this House has been bombarded with questions about the impending lay-offs at Falconbridge and Inco. A special day of debate was held in this House of the question. Thirty thousand cards of protest were tabled in the House by myself. There were two demonstrations on Parliament Hill by Inco and Falconbridge workers in an attempt to make the government aware of the problems facing these workers.
There were innumerable meetings between ministers of this government, the United Steel Workers of America and the mine mill union. Practically every day for the last four months I have raised the matter in the question period in order to make this government and its minister aware of the problems facing the workers in the Sudbury basin. And for four months, Mr. Speaker, all we have heard in reply is how concerned the minister and this government are about the impending lay-offs. They have stated they were on top of the situation. He was as on top of the situation today, as he was when he heard the night before the official announcement made by Inco of the lay-offs.


Adjournment Debate
What should a concerned minister and a concerned government have done under the present circumstances? Considering the fact that this government and the Minister of Energy, Mines and Resources have made no positive proposals, upon hearing of the committee's proposal last evening he should have flown this morning to Queen's Park, on the jet the Minister of Transport (Mr. Lang) uses to travel to and from football games and all the rest of it, and asked to meet with the minister of mines for the province of Ontario. The Minister of Energy, Mines and Resources should have asked to see the report and the recommendations. He should have asked if this problem could be solved by working together.
Even if he had not flown to Toronto, had he forgotten about the telephone system? The House of Commons has all sorts of party lines for members. There is a government Telex system and a member for one of the ridings across the way uses it for his own personal congratulatory messages to constituents. It could have been used in this instance. How callously the Minister of Energy, Mines, and Resources treats the people of Canada when he stands up in the House and brushes off the problem, as he has for the last four months.
He owed this House and the people of Canada, including the workers of the Sudbury basin, a knowledgeable response this afternoon. But, Mr. Speaker, the minister and this government have not displayed a sense of urgency. The lay-offs take effect in four days-Monday. In the Sudbury basin we support the recommendations of the select committee and we demand a positive response from this minister and government. Anything less is a dereliction of duty. This government should resign and let the people deal with them accordingly. I have little respect for them, and the least respect of all for the Minister of Energy, Mines and Resources.


Francis William (Frank) Maine: Mr. Speaker, that is a hard act to follow.


John R. Rodriguez: It is no act.


Francis William (Frank) Maine: Mr. Speaker, the Minister of Energy, Mines and Resources (Mr. Gillespie) has just this evening concluded a meeting with Mr. Sidney B. Handleman, MPP, chairman of the Ontario select committee dealing with the Inco Limited and Falconbridge Nickel Mines Limited lay-offs. Mr. Handle-man was accompanied by the hon. Mr. Miller, minister of natural resources for that province, plus other representatives and officials.
The program as proposed by the select committee consists of two components; first, for the first 30 days, the excess production, being that production which would be a direct result of not carrying out the proposed lay-offs, would be financed by interest-free loans provided by the government of Canada and the province of Ontario, as agreed upon by them; and second, for the second 30 days, there would be the implementation by Inco and the United Steelworkers of America of an agreed upon work-sharing program.

The purpose of the 60-day program, according to the select committee report, is to, first, enable Inco to reconsider its early retirement and severance programs and, second, enable Canada and Ontario to develop and introduce a retraining program for Inco workers.
In the meeting previously mentioned it was made clear to the Minister of Energy, Mines and Resources that the Ontario government does not support the recommendation of the select committee regarding stockpiling. Additionally, several members of the select committee submitted dissenting opinions on stockpiling. Indeed, the chairman of the select committee viewed the stockpiling program as counter-productive. The Minister of Energy, Mines and Resources would also draw to the attention of hon. members that the financing arrangement suggested in the select committee report is in essence a stockpiling program.
The position of the federal government has been stated on several occasions in this House by the Minister of Energy, Mines and Resources and other ministers. On February 8, in this House the Minister of Energy, Mines and Resources stated:
-the department and I have met with senior officers of both the corporations, Inco and Falconbridge, to examine the question of whether or not a stockpiling system would, indeed, assist that industry. Quite clearly, the conclusion of those discussions and that study is that it would increase the problems of the industry, that there is a significant overhang of nickel inventories in this country and elsewhere in the world, and by adding to that overhang we would be delaying the period of adjustment and therefore keeping more people out of work longer than would otherwise be necessary.
The Minister of Energy, Mines and Resources would again draw to the attention of this House that world nickel inventories are at an all time high. At this time Inco's inventory exceeds 340 million pounds and Falconbridge's over 50 million.
Additionally the cutbacks now being implemented by Inco are not sufficient to stop an increase in their stockpile. For example, Inco's stockpile of nickel, even in the face of production cutbacks, will increase during 1978.
The government of Canada strongly supports the concept of work sharing providing the union and Inco agree to the concept and make a joint proposal to the appropriate federal department.
The Minister of Energy, Mines and Resources would also hope that Inco would re-evaluate its early retirement programs and that retraining programs for Inco workers would be utilized.


CAPITAL PUNISHMENT-REQUEST FOR REINSTATEMENT
Almonte Douglas Alkenbrack: Mr. Speaker, I rise tonight pursuant to a question I asked of the Minister of Justice (Mr. Basford) on January 24, 1978. I asked him at that time:
Since the legislation of this government abolishing capital punishment has obviously resulted in an increase in capital murder, particularly the murder of police officers, will the minister immediately bring in legislation amending the


Criminal Code to reinstate capital punishment, which is the ultimate, permanent and effective deterrent to capital crime?
As I expected, the minister answered "No". The first response from the Liberal side of the House was from an unknown member who said:
That is not true; the rate has gone down.
That man does not know what he is talking about. We have lost ten policemen since the infamous incident last year in Moncton, New Brunswick where two policemen were forced to dig their own graves before they were executed by gunfire by their murderers. In less than the past two months we have lost four policemen, in Manitoba, Thunder Bay, New Brunswick and Toronto. The latest brutal crimes are the murder of prison warden Michel Roy in front of his home in Montreal, and also the premeditated capital murder of Miss Healther Zematis by a hold-up gang at the Chalet BBQ on Decarie Boulevard in Montreal. I include this case of capital murder along with the capital murder of policemen and the prison warden because the murder of Miss Zematis was premeditated.
We have got to get back to basics in this country in that any person who arms himself to commit armed robbery is guilty of capital murder if the armed robbery results in a death. Capital punishment was abolished in July 1976 by this House. The Prime Minister (Mr. Trudeau), the cabinet and the Liberal party made sure it would be, because as the vote neared they scrounged around and organized themselves sufficiently to get a six-vote majority. Yes, they have abolished capital punishment in law, but it is still retained by the underworld and the outlaws of this country. They practice capital punishment upon their victims.
Of all the arguments advanced against capital punishment the most specious and phony is that which pretends to equate the taking of life by judicial execution with the criminal act of a murderer. By the same lunatic logic, then, punitive fines are simply theft and imprisonment is kidnapping. To be consistent, the abolitionists should also want to abolish punitive fines and punitive imprisonment. Indeed, since all forms of punishment are unpleasant actions which it would be criminal for one individual to inflict unjustifiably on another, they should all be ruled inadmissible.
Not all taking of life is murder. The distinction lies in the qualifying word "justifiable". The act of a victim killing in self-defence is not the same as the act of a cold-blooded murderer.
Judicial execution has always been regarded as justified and its justification cannot be swept away by disingenuous logic. To fail to see the distinction between the execution of the criminal and the murder of the victim is simply to be unable to tell right from wrong and is an ingredient in the obscene inequity between our solicitude for the rights of the criminal- though this is indeed a responsibility of society-and our neglect of the needs of the victim, which are nobody's responsibility. The ancient rabbis put it well: "Whoever is kind to the cruel will end up being cruel to be kind."
Adjournment Debate
The expression of society's abhorrence of a crime is an important part of judicial punishment and should not be carelessly disregarded. It is an educational process. Our behaviour may not truly reflect our theoretical test of values but our ethical values will eventually come to reflect the way we act. By treating murderers leniently, our society has learned to take murder for granted and has accepted it as a perfectly natural accompaniment to robbery and organized financial crime. The need for a firm official stand is most urgent. The punishment should fit the crime.
If we fail to recognize these principles, the day is upon us when the recruitment of policemen and prison guards and officials will dry up. Protection of persons and property is the primary, yes, originally the sole reason for government. Without protection for persons and property we lapse into anarchy.
We noted today the answer given by the latest of a long string of solicitors general when the hon. member for Perth-Wilmot (Mr. Jarvis) asked him a question regarding the murder of Mr. Michel Roy. He said the government was thinking about providing protection for penal officials and guards both on and off duty. Mr. Speaker, we have reached a pretty pass when the government is thinking about hiring security personnel to guard policemen and prison officials in their homes. Guards to guard guards! This is the result of the Trudeau government's betrayal of the people of Canada through lenient and foolish policies which fail tr provide protection to persons and property. This is the result of the abolition of capital punishment, the ultimate permanent and effective deterrent to capital crime. Again, I say: Canada must get back to basics and make the punishment fit the crime.


Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, let me begin by reminding the hon. member that the vote on capital punishment in this House was a free vote of individual members of parliament. Let me also say to him that the statistics he quoted this evening are different from those I have seen published. In answer to the hon. member, the ministry is not prepared to accede to a request for the reinstatement of capital punishment in this country. Its position on this issue is well known. However, the Canadian public should be well aware of the concern of the government with the incidence of violent crime in Canada. Significant initiatives in the areas of wire tapping and gun control were the direct result of our concern with the growth of organized crime and the need to control its violent characteristics.
This House has only to look to its present agenda for further evidence of our concern. The relationship of violent crime to the flow of narcotics in this country is undeniable. Our proposals, which would allow law enforcement officials subject to legislative controls to open mails in order to curb the flow of narcotics within Canada, is directed at combating precisely this situation.
In the not too distant future, the next Criminal Code omnibus bill will contain a package of provisions dealing with


Adjournment Debate
increased penalties for the crimes of hostage-taking and extortion, as well as wider powers to deal with the problems of the defilement of children and the distribution of pornographic material which portrays the defilement of children.
It should not be forgotten that in the very legislation whereby this Elouse abolished capital punishment, new rigorous provisions were added to the Criminal Code concerning the eligibility for parole of persons convicted of first and second degree murder. The present law of the land decrees that individuals convicted of first degree murder are to be sentenced to imprisonment for life without eligibility for parole until 25 years of the sentence have been served. With respect to accused persons found guilty of second degree murder, we have now entrusted the jury with the task of recommending to the trial judge whether he should substitute for the ten-year
period which the law would otherwise require the accused to serve before he is eligible to be considered for release on parole, a number of years that is more than ten but less than 25 years.
In summary, the record of this government in responding to the challenges posed by violent crime in Canadian society is, I suggest, unimpeachable. The government is cognizant of the problems posed by violent, organized and serious crimes. It has dealt with and will continue to deal with them in order to best ensure the safety and security of our people.


Mr. Deputy Speaker:: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m.
Motion agreed to and the House adjourned at 10:28 p.m.

Friday, February 10, 1978