1978-04-10

ROUTINE PROCEEDINGS


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. On April 3, the CRTC gave notice it would be holding public hearings on April 11, in Gander, into a rate application by CN Telecommunications for a 20 per cent rate increase on the telephone system in Newfoundland and a 30 per cent increase on long-distance calls within the province. This compares with the normal 60 days' notice given by the CRTC for similar hearings into the Bell system affecting Ontario and Quebec. I believe, sir, that this is tantamount to second-hand treatment of Newfoundland taxpayers and ratepayers on the CN system, and I find that abhorrent.
With the consent of the House, I would move the following motion, seconded by the hon. member for Vegreville (Mr. Mazankowski):
That this House directs the CRTC to postpone its public hearings scheduled for tomorrow at Gander, Newfoundland, into an application by CN Telecommunications for a 20 per cent rate increase to its telephone subscribers in Newfoundland and a 30 per cent rate increase for long-distance calls within the province on the CNT system in order to give intervenors a reasonable time to prepare their case.


Mr. Speaker:: Presentation of such a motion for discussion would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


IMMIGRATION
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, under the provisions of the same order, in view of the fact that
the right of political asylum is recognized as one of the last lines of defence for democratic and human rights, in view of the fact that Galindo Madrid Avilez, because of his actions and criticisms of the Chilean regime, faces a real risk to his life or safety if he is deported to Chile, in view of the fact- known to the Minister of Employment and Immigration and his department-of the brutal nature of the Pinochet government in Chile, and in view of the fact that if returned to Chile, Galindo Madrid Avilez faces certain imprisonment and possible death for exercising what in Canada would be his right of free speech, I would move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the Minister of Employment and Immigration immediately grant Galindo Madrid Avilez political asylum.


Mr. Speaker:: Presentation of such a motion for discussion at this time would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: 
SOCIAL SECURITY
Mr. C. A. Gauthier (Roberval):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
Considering that Quebec pensions and private pension funds paid for by a citizen during his active life cannot be considered as new income, and considering that, such pensions being acquired values just like a single family house or even an amount of money bearing no interest, it is unfair and discriminatory to consider these pension plans as new income, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the government introduce a bill immediately before an election is called stating clearly that payments on accumulated funds will no longer reduce the guaranteed income supplements of elderly people.


Mr. Speaker:: The House has heard the terms of the hon. member's motion. Presentation of such a motion requires the unanimous consent of the House. Is there unanimous consent?

April 10, 1978


Some hon. Members:: Agreed.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: No.


INDUSTRY
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, 1 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Given the uncertainty that prevails regarding both the life of this session and the future of the textile industry in Canada, and given the fact that the Minister of Industry, Trade and Commerce has added to that uncertainty by his vague and ambivalent references to the status of textiles in GATT negotiations, with the apparent intention of trying to confuse an already complex issue, I move, seconded by the hon. member for Grenville-Carleton (Mr. Baker):
That the minister undertake, before the dissolution of the House, to make a statement on motions setting out the current position with regard to textile negotiations under (1) the multifibre arrangements and (2) the GATT, indicating whether or not the government will still consider withdrawing textiles from the GATT negotiations until such time as the multifibre agreements have been finalized and the industry has achieved stability.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INQUIRY OF THE MINISTRY
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion on a matter of urgent and pressing necessity. In view of the fact that for some strange reason a manufacturer in Winnipeg had accepted a $6,000 order for T-shirts bearing the inscription "Fuddle-buck", and then suddenly notified a group of businessmen from British Columbia that he would not complete the order and would destroy the 150 dozen that were already produced, I move, seconded by the hon. member for Okanagan Boundary (Mr. Whittaker):
That a representative of the government party make a statement on motions in this House reassuring the House that the manufacturer involved was not strong-armed by representatives of the Liberal party into cancelling this order.


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


OFFICIAL LANGUAGES
Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, under the terms of Standing Order 43,1 rise on a matter of urgent and pressing necessity. In light of the fact that nurses graduating in Quebec cannot receive a permanent licence until they pass the required French test, and also that no other nursing association in Canada is prepared to grant a permanent licence to these nurses until they receive a permanent licence from Quebec, I move, seconded by the hon. member for Madawaska-Victoria (Mr. Corbin):
That the government extend to all Canadians, and particularly Quebec graduating nurses, the same language training facilities that are offered to immigrants.


Mr. Speaker:: Presentation of such a motion for discussion at this time, pursuant to Standing Order 43, would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE BUDGET
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, in view of the fact that officials in both the Department of Finance and the Department of Employment and Immigration have already obtained the results of last month's labour force survey which is due to be released by Statistics Canada by tomorrow morning, I ask leave, seconded by the hon. member for Oshawa-Whitby (Mr. Broadbent), to move:
That this House request the assurance of the Minister of Finance that the March labour force information, including the number of unemployed and the unemployment rate, will be set forth in his budget presentation tonight.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

April 10, 1978


FINANCE
Mr. Gordon Towers (Red Deer):: Mr. Speaker, I rise on a matter of urgency under the provisions of Standing Order 43. In view of the fact that Canadians have been defrauded of over $100,000 through undelivered, prepaid Olympic coin orders purchased in good faith under a federal program, and in view of the fact that according to an answer to question No. 1,319 on April 7, gold coins on hand will be melted, I move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That the government accept responsibility for the coin dealers who failed to meet their commitments and follow the honourable procedure of supplying coins for the unfilled orders.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FISHERIES
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43. Since many Canadian inshore fishermen are complaining bitterly that regulations without consultation affecting their operations are proliferating with greater rapidity than the fish upon which they depend, 1 move, seconded by the hon. member for South Shore (Mr. Crouse):
That recent fisheries regulations regarding seasons for scallop dragging, changes in size of mesh in nets utilized in dragging for groundfish, and other such measures, be suspended until further input is received from those fishermen affected and more account taken of the varying conditions in regions affected, rather than imposing blanket regulations which do not take into account local conditions and differences in seasons.


Mr. Speaker:: Such a motion, for discussion, pursuant to Standing Order 43, would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions



ORAL QUESTION PERIOD


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, it is a matter of some regret that the Minister of Fisheries and the Environment and the Minister of Industry, Trade and Commerce are not in their seats this afternoon. Therefore, I direct my question to the Prime Minister. It flows out of a major policy statement made by the Minister of Fisheries and the Environment late last week, in which he set forth the terms and conditions under which Canada would reopen its Atlantic ports to foreign fishing vessels.
I ask the Prime Minister why the government chose to make one-half of the major policy statement and not couple it or pair it with a similar statement from the Ministry of Industry, Trade and Commerce and/or DREE with respect to the upgrading of our ports and, particularly, the upgrading of the capacity of our ports to deal with this increased ship repair and related activity.


Right Hon. P. E. Trudeau (Prime Minister):: I take it, Mr. Speaker, that the hon. member is supporting the policy announcement made by the minister but is saying that it is not quite enough. I will convey the representations of the hon. member to the minister.


J. Michael Forrestall: Mr. Speaker, this needs conveying to no one other than the Prime Minister. Would he convey at that time the concern of the people in the fishing industry and in the ports and port-related industries of eastern Canada that the Minister of Fisheries, in this major policy thrust, did not extend his thinking to include a definitive plan for the expansion and upgrading of our existing fishing fleet?
Some 10,000 jobs are involved. These should be given to Canadians to fish our own species, in our own boats registered in Canada and carrying Canadian crews. Why were these two matters not coupled? Would the Prime Minister make that representation as strongly as possible to his colleague?


Pierre Elliott Trudeau: Mr. Speaker, I think the House will recognize that this type of representation is hardly necessary. We have a Minister of Fisheries who is highly respected in the industry and who has the confidence of the fishermen. I would have to refresh my memory on the exact statement made by the minister. However, I would remind the hon. member that the first minister's conference in mid-February had something very specific on the fisheries, and of the fact that the federal government was successful in getting international support for the 200-mile limit and the provinces and the federal government were unanimous about the action that should be taken both provincially and federally. Of course, they included some suggestions along the lines made by the hon. member.
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REGIONAL ECONOMIC EXPANSION
J. Michael Forrestall: Mr. Speaker, 1 have forgotten more about fishing than the Prime Minister of this country will ever know. I would direct my final supplementary question to the Minister of Regional Economic Expansion. In the development of this policy statement by the Minister of Fisheries, was there direct consultation with his department, and is he aware of any direct consultation with the Department of Industry, Trade and Commerce with respect to the expansion of the existing fleet so that we might reap what is ours and that the benefits be maximized for Canadians, not the Russians and east Germans?


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, I can assure the hon. gentleman that there have been consultations among my officials and the Department of Fisheries over recent weeks on that matter. We are satisfied that the policy arrived at is the best one.


TRANSPORT
James Aloysius McGrath: Mr. Speaker, my question is for the Minister of Transport and is based upon the statement which, characteristically, was issued by the Minister of Fisheries on Thursday and delivered to members' offices on Friday afternoon. This is the kind of thing we have come to expect from this government which has so little regard for parliament.
I ask the Minister of Transport if there was consultation with the Minister of Fisheries before the decision was made to open Canadian ports for the repairs of foreign trawlers and crew changes. If so, does the minister intend to carry on a program of port upgrading which is desperately needed in east coast ports, in order to provide the facilities so we can maximize this new opportunity for business in the Atlantic provinces and create the new jobs that could arise from it?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, the hon. member well knows that our concern for facilities at east coast ports has resulted in announcement after announcement, in city after city, on the east coast for those improvements. I was in the Atlantic region just last week in connection with a further development. I can assure the hon. member that we will continue to make developments happen so that we have

the facilities to encourage development in that area, which is one of the high priorities of this government.


James Aloysius McGrath: Mr. Speaker, I am glad to know that this is a matter of some priority. I hope it will be given the same priority as the additional expenditures which have been announced for the port of Montreal and the port of Quebec: we hope we can get the same sense of priority in the Atlantic provinces.
I ask the minister if he is prepared to enter into a program of development for the port of Halifax, the port of Saint John, New Brunswick, and the port of St. John's, Newfoundland, for shipyard facilities in each case and the provision of a synchrolift in Newfoundland that was asked for by my colleague, the hon. member for St. John's West. All these things are desperately needed in order to maximize the opportunities arising from this policy statement for which we have been pressing for a considerable period of time.


Otto Emil Lang: Mr. Speaker, that is exactly what we are doing. I am happy the hon. member and some of his colleagues finally agree that it is all right to spend money on ports in other regions as well, just as we are making major expenditures in Prince Rupert, on the west coast. A week ago today I was in Saint John, New Brunswick, for a sod-turning ceremony in connection with a new forest products terminal, only several months after we opened a new forest products terminal there, so that we will have the facilities that are required in that area.


Some hon. Members:: Hear, hear!


Otto Emil Lang: Port by port, we have major developments going forward throughout the Atlantic region. We are spending very large amounts of money indeed.


An hon. Member:: What about Halifax?


Otto Emil Lang: The hon. member asks, "What about Halifax?" Surely, the most important development of all is the container terminal which is under construction in Halifax.


THE BUDGET
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Prime Minister. I preface my question by reminding Your Honour that I gave you notice of my intention to rise at three o'clock on a question of privilege concerning the same subject. Could the Prime Minister inform the House whether he or the Minister of Finance has ordered an inquiry into the possibility of a budget leak?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member was good enogh to inform me at a couple of minutes to two that he would be asking this question. I have been unable to communicate with the Minister of Finance in
April 10, 1978

the few minutes which have elapsed since then. I would think that, to say the least, the suggestion is premature. We will have to see what the budget is, and then perhaps the kind of concern the hon. member is expressing could be expressed at that time.


John Edward Broadbent: Mr. Speaker, the Prime Minister, of course, knows that I informed the Minister of Finance some two hours ago that I intended to raise the question. In the Saturday edition of the Toronto Star, an article appears, not in hypothetical, suggestive or conjectural terms but in categorical terms about what is in the budget. I will quote the opening sentence which reveals the tone of the rest of the article. It says:
The federal government will offer the provinces a deal in Monday's budget that would cut the Ontario sales tax on a $6,000 car from $420 to $240-
The article goes on. The point of my question, Mr. Speaker, is that the rest of the article in the Toronto Star details in specific after specific with the kind of tax cut that is supposed to be announced in tonight's budget. With this in mind, and given the tradition of Great Britain, where in modern times I have found that there have been only two budget leaks, both of which were immediately followed up with investigations and in both cases led to ministerial resignations, I ask the Prime Minister if he will assure the House that if the very specific assertions which appeared in the article in the Toronto Star turn out to be included in tonight's budget an investigation into the possibility of a budget leak will take place.


Pierre Elliott Trudeau: Mr. Speaker, you will recognize of course, that the question in its form is hypothetical. I will take notice of the question and we will see what the budget contains.


MANPOWER
Mr. Gilles Caouette (Temiscamingue):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration.
In view of the fact that some people involved in the assessment of Canada Works and Young Canada Works projects have heard of a 50 per cent staff cut, that the budget available this year for job creation is 75 per cent of what it was last year, and that the student work force will be over 4 per cent greater than last year, could the minister indicate to the House whether the current staff can effectively control and monitor the projects which have been received this year or which will be accepted this year under the Young Canada Works program.
Oral Questions


Hon. Bud Cullen (Minister of Employment and Immigration):: Yes, Mr. Speaker.


Gilles Caouette: I have a supplementary question, Mr. Speaker.
In view of his claim that the same service can be provided with 50 per cent of the staff which was previously necessary to study the Canada Works projects, with the assistance of some new people hired as recently as three weeks ago, to supervise the Young Canada Works projects, could the minister indicate to the House whether the necessary budget will be increased to make possible the implementation of a greater number of such projects?


Jack Sydney George (Bud) Cullen: It is not possible just now, Mr. Speaker, but we must examine this question.


INCREASE IN ELEVATOR COSTS-GOVERNMENT ACTION TO ASSIST FARMERS
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I direct my question to the Minister of Agriculture, who three days ago exercised unusual philanthropy in connection with the Western Grain Stabilization Act, providing for payment to the western farmers of $60 million as a gift from the government when, as a matter of fact, the farmers themselves have paid the full shot in the last two years. That disturbs the Minister of Transport, who is back in his seat after a trip to Nova Scotia which convinced him that all is not well in the Liberal party down there.
My question is this: Prairie farmers are facing a major increase in elevator costs this summer. An application has been made to a commisssion in connection with extra charges. Apparently the commission is favourable to permitting additional amounts to be levied in respect of wheat. The producer groups gave evidence. They say it will mean several cents a bushel will be taken out of the western farmers. In view of the serious situation in agriculture, whose income has decreased for three years by 6 per cent per year, is the minister prepared to assure the House that this extra levy to permit the grain companies to expand and develop their procedures will come from the people of Canada as a whole, rather than the western farmer in particular who has been paying through the nose as a result of the present government's policy during the last few years?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, 1 first want to say to the right hon. gentleman that the Western Grain Stabilization Act will be used properly and within the law to the extent we can do that which is proper. It will be done in as fair a manner as possible. I also want to advise that I had a discussion about the hearings with one of the grain commissioners this morning. At this time I am not
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April 10, 1978
Oral Questions
prepared to make a statement one way or another. I am sure the right hon. gentleman knows that the producers of grain do not want an increase in tariff. All the elevator operators, pools, and so on, are more or less in favour because they need a realistic economic operating picture to present. It is too early for me to say what we will do. I want him to know, and I am sure he does know, that I have the concern of all concerned.


John George Diefenbaker: Mr. Speaker, anybody who has the concern of all concerned has concern for nobody.


Some hon. Members:: Hear, hear!


John George Diefenbaker: I ask him this simple question. Not endeavouring to foretell what the commission will recommend, obviously there will be an increase: the grain companies want it, the pools want it, and so on. If there is an increase, as there will be, it will hit the western farmer to the extent of six cents a bushel. Will this be taken up by the Government of Canada, rather than adding to the burden already suffered by the farmers as a result of the high cost of production and rising costs in connection with their needs? Will the Government of Canada take this up as part of its responsibility and ensure fair markets for western wheat?


Eugene Whelan: Mr. Speaker, the right hon. member is suggesting that we should give this matter serious consideration. Anything he suggests always receives serious consideration from this minister.


THE CANADIAN ECONOMY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in the absence of the Minister of Finance, my question is addressed to the Prime Minister. As the lack of confidence in the government's economic record continues to be reflected in Canada with a Conference Board survey showing that 73 per cent of Canadians feel the government is doing poorly in running the economy while our dollar continues to scrape near bottom in New York-it was down again today, with a further loss of tens of millions of dollars-will the Prime Minister tell us when the government intends to place further foreign debt, as they just completed the issue for $750 million on April 1?


Pierre Elliott Trudeau: Mr. Speaker, I think you will recognize that the question is obviously on the subject of the debate which begins tonight.


Sinclair McKnight Stevens: Again to the Prime Minister, who obviously did not hear my question because it has nothing to do with the budget debate tonight But since in the Prime Minister's mind the budget debate tonight is linked very much with the issues the government indicates it may be making at some later date in New York, would the Prime Minister indicate whether
(Mr. Whelan.]
reports from Washington are correct, that the main reason the government is bringing in a budget tonight is that they have been told that without showing the current fiscal position for the country they may not raise further money in New York; they may not file a prospectus without showing the budgetary position which will be revealed tonight?


Pierre Elliott Trudeau: The hon. member asks two questions on monetary policy and then says they have nothing to do with the budget debate tonight. I will give him the answer to those questions if he will undertake that his party is not going to discuss monetary policy during the budget debate, which is a ludicrous proposition.


Sinclair McKnight Stevens: My supplementary is addressed to the Prime Minister. I shall word it very simply. Was a contributing reason to the timing of the budget tonight the fact that the information which will be revealed tonight concerning Canada's fiscal year 1979 is needed to be included in a prospectus to be later filed in Washington?


Pierre Elliott Trudeau: Mr. Speaker, an answer and a comment. The answer is a flat no. The comment is that the Conservatives add very little credibility to their own policies when they themselves have been pressing for a debate and then they do not think we are going to give a debate because they asked for it, which seems to be very ridiculous.


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, my question was intended for the Minister of Fisheries, but in his absence I shall direct it to the Prime Minister: it has to do with the ports policy announced by the Minister of Fisheries last Thursday. At that time the minister stated that something like 58 per cent of the catch of all species within the 200-mile limit was presently taken by Canadian fishermen.
How can the government justify giving away 42 per cent of the catch as being surplus to the catching capacity of Canadian fishermen? What steps is he taking to help Canadian fishermen modernize their vessels and equipment, as was recommended to him by the premiers and ministers of fisheries from Atlantic Canada when they met with him at the federal-provincial conference in February? To save asking a supplementary, I should also like to know what steps are being taken to help Canadian processing plants to expand and diversify their operations in order that they may process presently under utilized species in Atlantic Canada.


Mr. Hugh A. Anderson (Parliamentary Secretary to Minister of Fisheries and the Environment):: The hon. member is no doubt aware that through various international organizations and treaties we have signed, and in discussions which have taken place on the Law of the Sea, the Canadian government,
April 10, 1978

Oral Questions AIR TRANSPORT
along with many other governments, has agreed to allow fish surplus to the needs of Canadian fishermen to be caught by other nations. The hon. member is aware that if we Canadians do not catch species which are not commercially viable for us, we should not restrict entry to other countries, acting like dogs in the manger. As far as the modernization of our fleets is concerned-


An hon. Member:: Let's have a speech, Hugh.


Pierre Elliott Trudeau: Go on.


Some hon. Members:: Hear, hear!


Hugh Alan Anderson: The hon. member asked several questions. If he wishes, I shall deal with them. If not, I shall not deal with them. The hon. member is very well aware that we have today an overcatch capacity on both the east coast and the west coast.


J. Michael Forrestall: We were just told we had underutilized capacity.


Hugh Alan Anderson: The minister has stated on many occasions in the House that the object of federal policy should be to increase stocks of fish rather than increase the catch capacity of the fleets we already have. As far as the third part of the question is concerned, the hon. member knows that we have various programs in operation, including grants to freezing plants in order to increase the freeze capacity. I hope the hon. member will agree that the present minister has done more for the fishermen of Canada than any member or minister from the Conservative party.


Some hon. Members:: Hear, hear!


PUBLIC SERVICE
Mr. Lloyd Francis (Ottawa West):: Mr. speaker, I have a question for the President of the Treasury Board: it relates to Bill C-28. Last week, the hon. gentleman informed my hon. friend from Ottawa-Vanier that an amendment or deletion would be forthcoming with respect to the clause dealing with the duties of employees in the public service. On the assumption that Bill C-28 does receive second reading, is the minister prepared to consider other changes, for example in the restrictions on the flexilibity of the arbitration process?


Hon. Robert K. Andras (President of the Treasury Board):: We shall, of course, pay full attention to any constructive suggestions which may be put forward in the course of debate both on second reading and in committee. No doubt witnesses will be heard during the committee stage and full opportunity will be afforded to those who have constructive suggestions to make. I can say that we shall give them full consideration without, at this stage, making any commitment to specific changes other than the one I gave the other day.


REFUSAL OF AIR CANADA TO PARTICIPATE IN DOMESTIC ADVANCE BOOKING CHARTER PROGRAM
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to direct a question to the Minister of Transport. In light of Air Canada's refusal to participate in the domestic advance booking charter program, has the minister had an opportunity to look into this matter and can he give the House and the country a justifiable explanation for the action taken by the corporation? Is he satisfied that the position taken by Air Canada does not violate the principle and the spirit of the cabinet directive on this subject? Can he assure us that the result will not be an over-all reduction in the number of domestic air charter opportunities and, specifically, can he say whether Air Canada's allocation will be diverted to other carriers?


Otto Emil Lang: Mr. Speaker, the decision taken by Air Canada carried its own explanation. Of course, because of the action taken by this government, the opportunity for carriers to provide charter services went far beyond the original decision which would have restricted it largely to Air Canada and Canadian Pacific. This means there is no limitation on additional charters being offered. Naturally, there is no obligation on the carrier to offer services regardless of terms of agreement which might be proposed by a tour operator.
I must say I am delighted with the development of charter services as they are coming very quickly on the scene in Canada, and also by the fact that in addition to its charter competitive fares, which are much more numerous than ever before and have the advantage of linking all city pairs in Canada and not just the larger cities, which are all that are served by most of the charter operators, Air Canada has now introduced its Nighthawk flights, approved by the Canadian Transport Commission, an additional feature allowing Canadians to travel most cheaply between various cities in this country.


Donald Frank Mazankowski: The minister did not tell us whether the original ABCs for Air Canada would be diverted to other carriers. Considering that the Nighthawk program developed by Air Canada does not require the element of advance booking, and considering that the program discriminates against the minister's province of Saskatchewan, I ask the hon. gentleman whether he has discussed the possibility of reviewing or changing the advance booking requirement in relation to charter class fares and other charter operations so that further opportunities might be available to Canadians to see more of their country on a charter flight basis.


Otto Emil Lang: Mr. Speaker, I answered the question about the diversion of Air Canada flights to other carriers. I made it clear that that was open as a result of the cabinet decision directing more charters than the CTC had originally allowed. They were not limited to the 25 and 25 to the two main line

April 10, 1978
Oral Questions
carriers, but could go well beyond that. So there is no question of diversion: it is a question of any offer coming forward being potentially acceptable.
We did, at the same time, ask the commission to review its advance booking rules. The commission will have to do this even more vigorously, in view of the fact that these rules are undergoing changes in the United States and in certain places where we are directly competitive with American services.
In the case of Saskatchewan and other places where Nigh-thawk flights were not originally offered, I have had a discussion with Claude Taylor and he has his operational people looking at the question of whether these flights could be extended to other destinations and origins. Indeed, with particular regard to Saskatchewan, I am aware of certain overnighting aircraft in Saskatoon and it may be possible to offer some Nighthawk flights. There are other problems in relation to crew and the number of people likely to travel. These are being looked at because of the desire on the part of all of us to offer as many low-cost flights as we can to Canadians throughout Canada.


PUBLIC SERVICE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a question for the President of the Treasury Board regarding the enormous problems involved with the implementation of the bilingual bonus for language excellence. We have heard that it is a discriminatory program, that it adds to frustration and that it affects the morale of the public service. I understand the minister has been studying this program for some time. Has he reached any conclusions as to whether the program should be scrapped, as we have said it should be? If not, when does the minister expect to come to a conclusion in this regard?


Robert Knight Andras: No, Mr. Speaker, I have not reached such a conclusion and I cannot give the hon. member any indication as to when such a conclusion might be reached.


Lincoln MacCauley Alexander: Mr. Speaker, I point out to the minister that in hearings before Treasury Board last week, we were advised that the minister's department will deem the study which is now being undertaken confidential, and that the minister would be prepared to release the result of the administration of the bonus but will not release the results of the effect of the bonus on the public service.
Given the fact that the public of Canada will be paying twice, once to see that the public service does get this training and-which is beyond my comprehension-once more for proficiency by way of a bonus, is it the intention of the minister to see to it that any study or analysis, and the results, will be released for the edification not only of members of this

House but also of the public? Can the minister give me that assurance, or is this also a matter to be covered up?


Robert Knight Andras: Mr. Speaker, I will take that as a respresenta-tion from the hon. member and I will give it the consideration I usually give to his recommendations of that nature.


Lincoln MacCauley Alexander: One last supplementary, Mr. Speaker.


Mr. Speaker:: Order, please. The hon. member for New Westminster.


Lincoln MacCauley Alexander: Don't cover up; that's all we are saying.


IMMIGRATION
Stuart Malcolm Leggatt: Mr. Speaker, my question is directed to the Minister of Employment and Immigration: it concerns the case of Mr. Galindo Madrid which I discussed with the minister last Friday. In view of the fact that Mr. Madrid was tortured in Chile prior to jumping ship at Squamich, British Columbia, and in view of the widespread appeals for the minister's intercession on a humanitarian basis so that Mr. Madrid can be given political asylum in Canada, can the minister rise in his place today and advise whether he intends to intercede in this worthy case and provide asylum to Mr. Madrid so that he will not be deported to Chile?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the individual to whom the hon. member refers has been through all the appeal procedures. He was not able to convince the refugee status advisory committee that he was, in fact, a convention refugee. His case was reviewed by the special review committee. It was decided that there was no basis for special consideration. I understand that Mr. Madrid has now appealed to the Federal Court of Canada. Until that appeal is disposed of, I think it would inappropriate for me to comment further at this time.


Stuart Malcolm Leggatt: I can appreciate that Mr. Madrid is not a ballet dancer and that that gives him a bit of a handicap. However, in terms of the request the minister received on March 29, which was that there be a delay in the decision until the solicitors for Mr. Madrid are able to provide corroboration for the evidence they have provided to the various levels within the minister's department, would the minister at least undertake that there will be a delay until Mr. Madrid and his representatives have a chance to corroborate the evidence of risk and the evidence of torture which he will face in the event of his deportation?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the hon. member is suggesting that if Mr. Madrid had done a ballet manoeuvre when leaving that ship, we would have been a little more compassionate in our approach. I think the record speaks for itself. It indicates
April 10, 1978

that in cases of this kind we have bent over backward's to be as fair and compassionate as possible.
All the appeal procedures are in place. I think the gentleman and his counsel should be given access to them, and not be hampered or hindered in any way. With regard to whatever compassion is needed in this case to lengthen the time, I do not think there will be any difficulty.


AGRICULTURE
Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, my question is for the Minister of Agriculture. I ask him once again whether he will consider changing his previous statements to the effect that no stabilization payments would be made to potato growers until the end of the current marketing season. This is the seventh time I have risen in my place and asked this question of the Minister of Agriculture.


Eugene Whelan: Mr. Speaker, I said to the hon. member the other day that we would follow historic patterns. Historic patterns show that we have made interim payments, and I have instructed the stabilization board to do so for eastern Canada.


REQUEST FOR ASSISTANCE FOR WHITE BEAN GROWERS
Mr. R. E. McKinley (Huron-Middlesex):: Mr. Speaker, 1 have a question for the Minister of Agriculture. Some time ago, at a meeting, the minister suggested that there would be some federal assistance for white bean producers because of the disastrous weather of last year and the lower price. Can the minister advise us if a definite decision has been made in that regard and what form of assistance will be provided?


Eugene Whelan: Mr. Speaker, I do not remember exactly what I said to the hon. member, but those producers did receive about $10 million in assistance from crop insurance programs. The white bean board has applied for stabilization, and that is under consideration by the stabilization board at the present time.


Robert Elgin McKinley: Mr. Speaker, producers are now in the process of deciding what crops to plant in 1978. The minister's decision in this regard might have some bearing on those plans. 1 wonder if a definite decision could be given on this matter quite soon.


Eugene Whelan: Mr. Speaker, 1 met a group of white bean producers in the hon. member's area the other night. I gather that those producers are ready to go ahead and plant their acreages. Many of them have been compensated under crop insurance programs. There was low crop production last year because of the terrible catastrophe which took place, which was very wet weather. It was impossible in some areas to
Oral Questions
harvest any of the crop. In most areas about 90 per cent of it was left in the fields.
Producers are now deciding whether they are going to plant. That will be a decision for the producers themselves, but I gather from talking to them that most of them will be planting sizeable white bean acreages this year because we are considering stabilization, and also because slightly over 77 per cent of the producers had crop insurance.


CANADIAN WHEAT BOARD
Mr. Jake Epp (Provencher):: Mr. Speaker, I would like to direct my question to the minister responsible for the Canadian Wheat Board. Elevators in the Red River Valley are plugged because we have not received the number of rail cars to which we are entitled, even though we have received clearance through the block system. In view of the extensive flooding which is taking place in the Red River Valley south of the forty-ninth parallel, can the minister assure us that the special permits which have been issued in the past will be issued again? Farmers have been able in the past to move grain which might have been flood prone. Grain is now in storage. Will the minister announce a program so that these elevators can be cleared and so that grain can be moved before flood conditions arrive in Manitoba in approximately ten days' time?


Otto Emil Lang: Mr. Speaker, I think the hon. member knows that these arrangements are ordinarily made by the Canadian Wheat Board and not by the government. I will be very glad to discuss this matter with the board, and I know its usually sympathetic ear will be turned to these representations.


AGRICULTURE
Mr. Jack Murta (Lisgar):: Mr. Speaker, 1 would like to direct a question to the Minister of Agriculture. Last week Ambassador Warren, Canada's chief spokesman at the GATT negotiations in Geneva, made a statement in Winnipeg in which he said, "The Tariff Board recommendations, many of which propose higher protection than now afforded, have been under careful consideration by the government, and 1 understand that decisions may be expected shortly".
Since we are getting well into the final stages of the GATT negotiations, and since agriculture is being discussed at Geneva, can the minister indicate whether the government has made a decision on tariff recommendations and, if so, would the minister outline briefly what the situation is?

April 10, 1978
Oral Questions


Eugene Whelan: Mr. Speaker, they have made a decision. The people returned from GATT last week, as the hon. member knows full well. If he wants it briefly, it is practically as the Tariff Board reported.


Jack Burnett Murta: Mr. Speaker, do I have the assurance of the Minister of Agriculture that the government will be adopting the Tariff Board recommendations pretty much as they were outlined in their report to the government some time ago?


Eugene Whelan: Mr. Speaker, that is what I said.


PUBLIC SERVICE
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, my question is directed to the President of the Treasury Board: it is supplementary to the question asked by the hon. member for Ottawa West with respect to Bill C-28. Is the minister aware that the human rights commissioner has expressed an opinion with respect to the fact that bill C-28 contravenes the provisions of the Human Rights Act in one particular respect? Has the minister seen that opinion? Is he studying it? Can he undertake to inform the House of the intentions of the government with respect to the opinion as to the impropriety of Bill C-28 as expressed by the chairman of the Human Rights Commission?


Robert Knight Andras: Mr. Speaker, I am aware that the chairman of the Human Rights Commission has written to the Minister of Justice expressing an opinion and some concern about a portion of one clause of the bill. As yet, I have not had legal advice from the Minister of Justice in response to that letter, although there were some important discussions prior to the receipt of the letter which indicated that there would not be a problem. I will be guided by the advice which I will receive very shortly, I presume, from the Minister of Justice.


Walter David Baker: Mr. Speaker, as the minister knows, one of the aspects is equal pay for equal work for women, and there is one other important aspect. So that the House will have the benefit of the opinion of the chairman of the Human Rights Commission, will the minister consider tabling the letter from the chairman to the Minister of Justice, now that it is public?


Robert Knight Andras: Mr. Speaker, of course, the official in question reports to parliament. I do not think there would be any inhibition, but I would question the propriety of us tabling the document. The hon. member is quite correct; it was published in the Globe and Mail the other day, so I do not think there is anything secret about it. I will take it under advisement. If that is the proper procedure, I have no objection.


AIRPORTS
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is directed to the Minister of Transport: it concerns the fact that while this government is prepared to pump $50 million a year into a white elephant at Mirabel, it is not even prepared to discuss an offer by the province of Alberta to pay for the construction of a customs preclearance centre at Edmonton airport.
I ask the minister why he has refused to meet the Alberta minister of transport to discuss this offer. In view of the deficit the government has run up in creating the Mirabels and the Pickerings, why has this offer by the province of Alberta been refused? After all, it is free money for the government.


Otto Emil Lang: Mr. Speaker, both parts of the hon. member's statement are really quite ridiculous and are nonsense. The amount he talks about in relation to Mirabel-which I think he knows-is largely an interest payment being carried on the books, and not new money being pumped in.


An hon. Member:: Answer the question.


Otto Emil Lang: If he wants to display his regional biases, he might mention the fact that we are putting $130 million into an airport in Calgary, and it is a beautiful airport, which has just been completed.


Some hon. Members:: Hear, hear!


Otto Emil Lang: The reason the second part of his question is nonsense is that if he is reading one press release, he might read the other. I have made it clear that we have not received a formal proposal from the minister of transport in Alberta to finance the construction at the Edmonton airport. I have made it clear that we are willing to consider that if such a proposal came forward. When I met the minister two weeks ago and talked about three other subjects, he did not even raise with me that matter of the Edmonton airport.


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: Mr. Speaker, just to straighten the minister out, as of Friday he had not met the Alberta minister of transport on this particular project. It seems the so-called voice from Alberta in the cabinet is that pitiful squeak from what's-his-name.


Mr. Hees:: That is "Loose Lips."


Steve Eugene Paproski: Yes, that is his name. He cannot even get an audience for the Minister of Transport; that is the problem. I know the minister wants to use this as an election platform in the next campaign.


Mr. Speaker:: Order.
April 10, 1978


Otto Emil Lang: Mr. Speaker, as I indicated to hon. members, Dr. Horner-who is the minister of transport in Alberta-did not raise this matter with me when we met on other subjects a few weeks ago. He had ample opportunity to do so. Indeed, after our meetings on the three main subjects were over, we raised several other matters of interest. He did not choose to raise this one.


George Harris Hees: Did you raise it with him?


Otto Emil Lang: Indeed, I had an informal question about this matter through my colleague, the hon. Minister of Industry, Trade and Commerce, and I indicated to him that if such a request on the part of Alberta came forward, we would consider it most favourably. Nothing more has come forward in this regard.


FISHERIES
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is directed to the Minister of Fisheries and the Environment or his parliamentary secretary. Is he aware of the fact that the bonanza in the herring roe fishing industry in British Columbia is attracting some seasonal employment, and that Japanese nationals have been hired as technicians for that industry who are really not technicians but are out in the fishing grounds working along with the other fishermen and are taking jobs away from Canadians?


Hugh Alan Anderson: Mr. Speaker, I am aware, as I believe the minister is aware, that fish buyers of Japanese extraction are out in various areas during the herring season. 1 am not aware of any Japanese nationals who are fishing with the herring boats off British Columbia.


VESSEL AND FOREIGN CREW OPERATING UNDER CANADIAN LICENCE
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question also concerns the employment of Japanese. In light of the fact that the Minister of Fisheries and the Environment is not present in the chamber, perhaps Your Honour will permit a small preamble in order that the Prime Minister may understand what is happening in the Department of Fisheries and the Environment. Therefore, my question is directed to the Prime Minister.
In a recent letter to me, the minister stated that he was prepared to extend a licence to a ship with a capacity 25 times greater than the ship from which the licence was taken, on condition that the vessel went to sea with a Canadian crew. Now it is apparent that the vessel is going to sea with a Japanese captain and a Japanese engineer, within the 200-mile limit and under a Canadian licence. Is the Prime Minister
Oral Questions
aware of this? If he is not, would he be prepared to speak to the minister and ask him what devious political purpose he intends to achieve by this particular operation?


Some hon. Members:: Oh, oh!


Hugh Alan Anderson: Mr. Speaker, 1 wonder if the hon. member-


Donald W. Munro: Mr. Speaker, my question was addressed to the Prime Minister.


Pierre Elliott Trudeau: Mr. Speaker, how can the hon. member expect to score points by referring to private correspondence between himself and the minister? Obviously, I have not read the correspondence. The parliamentary secretary has risen, perhaps to give an answer or perhaps to take notice of the question. I think this is a somewhat ridiculous example of what the Tories are asking.


Some hon. Members:: Hear, hear!


FINANCE
Mr. Ron Huntington (Capilano):: Mr. Speaker, my question is directed to the right hon. Prime Minister. At the first ministers' conference, the Prime Minister left the message that if the premiers of Alberta and British Columbia got together on a mechanism to safeguard the interests of Algoma Steel, and at the same time maintain a steady supply of wide-flange steel beams from offshore sources at world prices, he would implement relief from the 30 per cent anti-dumping duty which was recently levied. Assuming agreement is reached between the provinces, will the Prime Minister confirm that it is still his intention to extend the relief beyond June 29?


Pierre Elliott Trudeau: Mr. Speaker, the names of the two provinces escaped me. Would the hon. member repeat them, please?


Arthur Ronald Huntington: Alberta and British Columbia.


Flora Isabel MacDonald: They are out west.


Arthur Ronald Huntington: Yes, they are out west.


George Harris Hees: Surely the Prime Minister remembers the place he flew to a little while ago.


Pierre Elliott Trudeau: Mr. Speaker, the facts on which the question is posed are not correct. Dealing with the first point, action was taken by the Minister of Finance in giving relief to the industry for a period which I believe extends to the end of June. Dealing with the second point, there was no suggestion by me that Alberta and British Columbia would have to get together to settle this question. The producers are in Ontario

April 10, 1978
Privilege-Mr. Broadbent
and they think anti-dumping duties should be applied: the consumers are in British Columbia and they think they should not be applied.
If I were to ask the provinces to get together, it would be rather to have Premier Davis and Premier Bennett get together to find an agreement, certainly not Alberta and British Columbia.


Arthur Ronald Huntington: Mr. Speaker, I would like to ask the right hon. gentleman whether he realizes that his reply today will be a great surprise to interests in British Columbia who have been negotiating with the province of Alberta on the clear understanding of a commitment from the Prime Minister.


PRIVILEGE
Hon. John Roberts (Secretary of State):: Mr. Speaker, I rise on a question of privilege. The Toronto Globe and Mail carries a story alleging that I have abused my franking privilege by sending newsletters of mine to areas outside my constituency, with the frank. This allegation is entirely false. I have sent newsletters outside my riding but I have paid for the printing and the postage of those sendings myself. I think it is important, since this is a matter which does affect the privileges of the House, that my position on the matter ought to be clearly put forward.


MR. BROADBENT-ALLEGED LEAK OF BUDGET DETAILS
John Edward Broadbent: Mr. Speaker, I too rise on a question of privilege, and I consider the subject matter to be of serious importance. I want to deal with two parts of the issue involved in this question of privilege. The first will be to indicate briefly the seriousness involved in a budget leak of any kind, and the second is to present my reasons for believing there is very good cause for concluding that precise information concerning tonight's budget has, indeed, been leaked in advance.
I checked the record for the past 50 years concerning budget leaks, and found there were two cases, both of which led to the resignation of ministers of the Crown, and they both took place in Great Britain.
One case occurred in 1947 and involved an indiscretion by the Chancellor of the Exchequer at the time. He made an off-hand comment to a journalist on the very evening of the presentation of his budget, obviously with no intent to have such information appear in public before he had concluded his budget address. However, what did transpire was that because of the timing of a certain edition of the paper for which the journalist worked, news in particular detail about the budget did in fact reach the paper. As soon as the Chancellor of the

Exchequer at the time, Dr. Dalton, was made aware of this, he submitted his resignation forthwith, which was accepted on the following day.
The other case I discovered in modern times, and that means going back probably over a 50-year period, took place in 1936, also in Great Britain. In this case it was not the Chancellor of the Exchequer who resigned but another minister of the Crown. In this particular instance there was what transpired to be a leak of information that led to certain activity on the stock market. As soon as the Chancellor of the Exchequer at the time learned of grounds for believing that there was at least a clear possibility of a leak of budgetary information, he initiated an investigation. The investigation led to the disclosure that another minister of the Crown had in fact revealed budgetary information, and in that case that minister resigned.
In the present circumstances I submit at this point for consideration a story which appeared in Saturday's Toronto Star. I should say at the outset that there have been countless newspaper, radio, and television speculative pieces about what may or may not appear in the budget. We always take that for granted. There is a crucial distinction to be made in respect of what one normally finds in such stories, whether in newspapers, on television or on radio, that is, the stories contain therein words like "it is speculated" that such and such will appear in the budget, or "it is assumed" that such and such will appear in the budget, or "it is rumoured" that such and such will appear in the budget.
In Saturday's Toronto Star one finds no wording of that kind at all in the story as it is worded. The story begins with the assertions I indicated in my letter to you earlier today, Mr. Speaker, and as I presented to day in a question to the Prime Minister (Mr. Trudeau). It begins in the April 8 edition of the Star "The federal government will offer the provinces" such and such, and the rest of the story concerns details of precise dollar amounts, taxation changes, and sales tax changes that are going to vary from province to province, with the direct dollar implications being connected to those tax changes.
The point I want to make then is really twofold in nature. A budget leak is a very serious matter indeed, in a parliamentary government, and at least at this point no one knows, except someone who may have leaked the story, whether it was a leak. Until we see the budget tonight most people in Canada, and certainly most people in the House of Commons, will not know if the story that appeared in the Toronto Star is in fact based on a budgetary leak. However, there are good grounds for believing so, and that is why I am raising the matter at this point. I do so simply to give you notice that there are very good grounds for believing, given the specificity of the story, that it is not speculative but contains what the budget is going to contain, in concrete detail. That is why I am concerned.
Therefore, Mr. Speaker, really what I would like to do at this point is simply serve Your Honour with notice that if the budget tonight, when it appears, contains the kind of precise detail that is indicated in the Toronto Star story, I intend
April 10, 1978

tomorrow in turn to raise a question of privilege on this matter.


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, in respect of the point raised by the Leader of the NDP (Mr. Broadbent). 1 have two observations to make. The first is, of course, that the budget itself has not yet been presented, and it is impossible to talk about a budget leak at this stage. The second point is that the hon. member has based his comments and his intention to rise on a question of privilege on two British cases. As the hon. member will recall, the former minister of finance often raised the appropriateness of the traditional, so-called, budget secrecy.
Obviously the concept of secrecy that surrounds the budget has evolved, and must evolve if a minister of finance, and the modern context, is to undertake any consultation whatsoever in respect of budget preparations. That was the gist of the comments, as I recall, made frequently by the former minister of finance. There was a question about the appropriateness of that traditional concept that the hon. member has taken from Britain in these cases in our modern economy.
I have not talked to the Minister of Finance (Mr. Chretien) about this. 1 do not know what the budget will disclose with respect to the matters that have been mentioned by the hon. member. A question that the members of the House of Commons ought to ask themselves is whether, in the operation of a modern economy and the preparation of a budget, it is relevant to apply the rigid categories that were applicable in the days that the hon. member has mentioned.


Walter David Baker: Mr. Speaker, I followed with great interest the statement that has just been made by the government House leader with respect to such a practice. He is quite right when he says that the former minister of finance, Mr. Donald MacDonald, P.C., did in fact question at one stage budget secrecy and whether it is appropriate in very general terms, but with respect to a specific interest which I raised with him in the House of Commons at the time, on that occasion he did not-and we do have the tradition on this occasion in the event that something untoward should be revealed-back away from his obligation to assure the House that the existing practice would continue, and practice is, therefore, a very good reason.
No one governs the private sector-businesses, or labour unions. No one ought to be able to speculate in any way whatsoever with respect to what is contained in the budget in the sense of taking advantage of it. This particularly applies in the private sector, and that is the reason for the tradition. We all know that, and it could very well apply in the public sector as well in the event this kind of matter should take place.
I am interested as well in the fact that the government House leader indicated to us today, quite properly, that he has not talked to the Minister of Finance (Mr. Chretien). I assume he will be talking to the minister. The fact that the matter was
Point of Order-Mr. McCain
raised in advance of the budget being presented, as the House leader has said, will not stop a leak. Of course, the only time that a leak could take place is before the budget is presented. However, if it has, it is extremely important that the minister live up to the undertaking that he will consult with the Minister of Finance and that tonight the Minister of Finance stand in his place and indicate to the House what the facts are with respect to the matter raised by the hon. member for Oshawa-Whitby (Mr. Broadbent). It is important that that be done, and we have a right to know. Then the situation can be discussed and decided upon by the House.
The parliamentary secretary to the minister says that it is pure speculation. I agree with him when he says it is speculation, but it is speculation that ought to be laid to rest. That is my point. I am happy that the government House leader is going to be speaking to the Minister of Finance, and I hope that the minister will make the appropriate statement.


Mr. Speaker:: The hon. member for Oshawa-Whitby (Mr. Broadbent) has raised an important question of privilege. It awaits the presentation of the budget this evening, and will be subject to further discussion at this time tomorrow.


POINT OF ORDER
Mr. Fred McCain (Carleton-Charlotte):: I rise on a point of order, Mr. Speaker. I have a document in my hand issued by the government, intended to promote inter-Canadian tourism and, no doubt, to turn the balance of the tourism dollar, which is being spent by Canadians abroad. In the first place, the document is inadequate, but even worse than that, and this is the subject of my point of order, is that it is inaccurate. Referring to Fundy National Park they say:
Live it, Learn it, Love it.
Fundy's in Nova Scotia on the Bay of Fundy where you can see the world's highest tides flood in and out. It is alive with things to see, touch and do.
The definition and description of the park are quite all right, but the location of the park indicates the lack of concern that many publications seem to have for accuracy. I would like to point out to the government, just in case none of its members are aware of it, that that park is definitely located in, and is the pride of, New Brunswick.
It is only fitting that the minister for tourism should reissue the booklet, withdraw those copies which have been circulated, remail those which have been mailed on request, and have the corrections made. The document should not only be withdrawn but should give proper attention to the scenic values of all of Canada. But, for goodness sake, let us put them province by province where they belong.


Some hon. Members:: Hear, hear!

April 10, 1978
Introduction of Bills PRIVILEGE


MR. DIEFENBAKER-DELAY IN ANSWERING QUESTIONS PLACED ON ORDER PAPER
John George Diefenbaker: Mr. Speaker, I should have given you notice. I thought it had been given through the whip, but through a misunderstanding it was not. I thank you very much for seeing me because I wish to raise a question of privilege that reveals an attitude on the part of this government that is totally inexcusable and out of keeping with the concept of government. I am referring to the matter which came up the other day when the hon. member for Simcoe North (Mr. Rynard) raised a question of privilege.
Here we are, approaching the last days of this session, and there are on the order paper 1,500 questions which have not been answered. I decided, while waiting today to get on, to look over the nature of these unanswered questions.


Mr. Speaker:: Order, please. I invite the right hon. gentleman to wait a few moments until we have called questions today, and then it will be more relevant to the question and, in addition, would not require notice.



ROUTINE PROCEEDINGS


Mr. Dean Whiteway (Selkirk) moved: for leave to introduce Bill C-434, to amend the Criminal Code (pornography).


Some hon. Members:: Explain.


Dean Waldon Whiteway: Mr. Speaker, the purpose of this bill would be to amend the Criminal Code with respect to obscenity. In particular, it would disallow expert witnesses, make the use of children for pornographic or sexual exploitive purposes an offence, and makes certain other changes to questions dealing with obscenity and its definition.
I would point out that this bill in no way offends the report coming from the justice and legal affairs committee regarding pornography, and is quite the opposite.


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

Mr. Allan B. McKinnon (Victoria) moved: for leave to introduce Bill C-435, to amend the Canada Shipping Act (pollution).


Some hon. Members:: Explain.


Allan Bruce McKinnon: Mr. Speaker, this is one of a pair of bills that are for the purpose of preventing shipowners and salvage operators from haggling over the division of the salvage of a tanker in distress. There was a recent event which increased the hazards, and I hope this bill will prevent such occurrences.


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

Allan Bruce McKinnon: for leave to introduce Bill C-436, to amend the Canada Shipping Act (pollution).


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

Mr. Maurice A. Dionne (Northumberland-Miramichi) moved: for leave to introduce Bill C-437, to amend the Income Tax Act.


Some hon. Members:: Explain.


Maurice Adrian Dionne: Mr. Speaker, under the present act certain payments made by one person on behalf of another in cases of separation or divorce are not permitted as a deduction for income tax purposes. My bill will make it clear that such payments will be classed as income for the person on whose behalf the payment is made and as a deduction for the person making the payment.


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

Harold Thomas Herbert: for leave to introduce Bill C-438, respecting the national anthem of Canada.


Some hon. Members:: Explain.


Harold Thomas Herbert: The purpose of this bill is to change in the English version only of our national anthem the word "native" to the word "cherished", in order to include the millions of Canadians who were not born in Canada.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
April 10, 1978

Mr. Mark MacGuigan (Windsor-Walkerville) moved: for leave to introduce Bill C-439, to amend the National Transportation Act (review and re-hearing).


Some hon. Members:: Explain.


Mark R. MacGuigan: Mr. Speaker, the purpose of this bill is formally to restrict the power of the Canadian Transport Commission to hold new hearings on public matters that have already been decided.
At present, the discretion of the Commission to review, rescind or alter its orders and decisions and to rehear applications, is somewhat unclear. In many cases the rehearing of matters can cause tremendous hardship, especially to public interest groups that wish to oppose applications made by regulated industries, because these groups do not normally have the funding to fight a prolonged legal battle. The re-hearing of decided issues by the CTC should therefore be strictly regulated by legislation.


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

Hon. John C. Munro (Minister of Labour) moved: for leave to introduce Bill C-45, to provide for the continuation of regular postal service operations.


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

Mr. G. W. Baldwin (Peace River) moved: that the third report of the Standing Joint Committee on Regulations and Other Statutory Instruments, presented to the House on Thursday, April 6, 1978, be concurred in.
He said: Mr. Speaker, I think it would not be amiss to borrow a few minutes of the time of the House to elaborate on the reasons for this particular motion which was passed unanimously by the committee, and to refresh hon. members' minds.
It provides, in the event a final report cannot be presented by the joint committee dealing with our terms of reference related to the green paper on legislation and access to government documents, that after the summoning of a new parlia-
Regulations and Statutory Instruments ment the order of reference to the committee be renewed and all evidence and proceedings given in relation to this matter before the committee be included in the said order of reference.
Of course the committee knew that all it could do was make a recommendation in the hope that, when a new parliament is called, there will be a new government which may be more sympathetic to the situation, and that those hon. members on the government side who worked their battered way to this side of the House might also be able to give support to the proposal contained in this motion. This is a request from the existing parliament to what hopefully will be a new and more lively one, to move quickly and finish a task which should have been done long ago.
In February, 1976, this House unanimously approved a motion supporting, in principle, freedom of information legislation, which clearly inferred that the government should get on with the job. In supporting the 1976 motion, the House accepted the views of the committee which had been studying the issue for well over a year, and the House also adopted the position of a government task force on information. Furthermore, government officials had been studying the matter, both in Canada and abroad, and had at their command all the facts, statistics, and studies on comparative legislation, necessary to draft a bill. But those of us who expected the government to act were sadly disappointed. I am instructed that the matter was considered at least twice at cabinet or cabinet committee level, but the assorted dinosaurs who make up the top level of government, both elected and appointed, just would not hear of it.
Freedom of information means that the truth is likely to come out, and these people and their leader react to truth like the devil to holy water.
Joseph Pulitzer said, "There is not a crime, there is not a dodge, there is not a swindle, there is not a vice, which does not live by secrecy." This can be equally applied to the errors and evils of government.
After 15 months or more, in June, 1977, this House was given a green paper, designed to delay and divert the request for "right to know" laws, and this tactic now seems to have succeeded. It took six months to drag the government into referring the paper to the committee last December, and it now appears as if there will not be time to complete the study and to report before dissolution.
A large number of organizations and people have appeared before the committee, or have presented briefs, and it would be a great shame to compel them to repeat their efforts. Nearly all who have appeared support the proposition that there be a law giving the public the right to know the facts about government operations, with limited exemptions and a clear and binding appeal process. There is the all-party committee on freedom of information, representing members in both Houses. In fact all parties have given their blessing, including the Liberal party which took a very strong stand in support of judicial review at its last convention.

April 10, 1978
Regulations and Statutory Instruments
Freedom of information is also supported by an impressive number of groups and organizations whose views should not have to be repeated, like the CLC, the Canadian Bar Association, the Canadian Association of University Teachers, the Canadian Manufacturers' Association, and dozens of others, including consumers' associations, library associations, community workers, newspaper associations and unions. In fact the entire spectrum of policital, economic, and social groups have a consensus favouring a more open and honest system of government.
There are those who stand in the path of this progress-a small group of willful, perverse, and arrogant people, who say, "Why should the public and parliament know what we know or why we act? It is for us to rule and for them to obey". And so they frustrated the unanimous wish of this House, flouted the views of all the organizations I have mentioned, went against the recommendations of their own advisers on this matter, and even rejected the twice-expressed position of their own national party. They are saying no to a motherhood issue, which makes me wonder what secrets must be protected by such obstructionism. I am sure that I am not the only one who wonders.
There is a particularly valid reason for speeding up the proposal to restore a more open face to government at this time. The absolute breakdown of trust and confidence in the apparatus of government is the most alarming phenomenon of our times. Unless this situation is repaired at once, if it can be, we are unlikely to get out of the swamp in which we are bogged down.
Tonight I sincerely wish the Minister of Finance (Mr. Chretien) good fortune with his budget. But I suggest anything he proposes will be worthless unless it is accepted as being credible, and there is the rub. Until this and other governments can restore credibility and truthfulness his proposals and programs are unlikely to succeed.


Mr. Speaker:: The motion is by Mr. Baldwin, seconded by Mr. Baker (Grenville-Carleton). The hon. member for Ottawa West (Mr. Francis).


Cyril Lloyd Francis: Mr. Speaker, I would just like to rise and say that I have acted as chairman of an all-party committee which has been concerned about freedom of information. Certainly I feel that the efforts which the government has made in producing the paper which was referred to committee, the terms of reference of the committee, the hearings that have taken place, and the statements made by a number of responsible persons, indicate the concern of members on this side of the House as well as of members on the other side of the House on this matter.
I know the hon. member who has just spoken is impatient with these matters. We recognize his great interest, of long standing, but I also recognize that good legislation arises out of the process of careful examination of what is really not a simple business but a complicated business. Those of us who

are concerned about it are determined that progress should be made.
I support the general principle of this resolution and I hope it will receive acceptance. I hope that perhaps in some way it will expedite the work of another parliament which must inevitably come to grips with it.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, I have the answers to some 47 questions, and perhaps that will help to alleviate some of the concern expressed by the right hon. member for Prince Albert (Mr. Diefenbaker). The following questions will be answered today: Nos. 837 to 880 inclusive, and questions Nos. 1,176, 1,178 and 1,196.


Mr. Epp: 1.	Who was the head or chief representative of the Delta Fishermen's Federation in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Mr. Donald Wood (Parliamentary Secretary to Minister of Regional Economic Expansion):: The reply for the Department of Regional Economic Expansion is as follows: 1. In September of 1973, when Special ARDA assistance was offered to Delta Fishermen's Federation I, the head representative was Mr. Gilbert Ducharme, president.
2. (a) Thirty-nine members of Delta Fishermen's Federation I were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b) At the time of expiration of the Special ARDA contract on March 31, 1975, all members were still registered as commercial fishermen.


Mr. Epp: 1.	Who was the head or chief representative of the Delta Local Fur Council in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In February of 1974, when Special ARDA assistance was offered to Delta Local Fur Council I, the head representative was Mr. Gilbert Ducharme, president.
April 10, 1978

2. (a) One hundred and forty-six members of Delta Local Fur Council I were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on September 30, 1975, all members were still registered as trappers.


Mr. Epp: 1.	Who was the head or chief representative of the Lake Manitoba Narrows Lodge in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In July of 1973, when Special ARDA assistance was offered, the head representative of Lake Manitoba Narrows Lodge was Mr. Peter Stasiuk, owner.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, November 1, 1976, this enterprise employed eleven people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.


Mr. Epp: 1.	Who was the head or chief representative of the Cross Lake Fishermen's Association in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In April of 1974, when Special ARDA assistance was offered to Cross Lake Fishermen's Association, the head representative was Mr. Donald McKay, president.
2. (a) Seventeen members of Cross Lake Fishermen's Association were able to engage in commercial fishing during the contract period and improve their incomes as a result, (b) At the time of expiration of the contract on September 30, 1975, all members were still registered as commercial fishermen.


Mr. Epp: 1.	Who was the head or chief representative of the Fisher River Fishermen's Federation in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In June of 1973, when Special ARDA assistance was offered to Fisher River Fishermen's Federation, the head representative was Mr. Norman Murdock, president.
2. (a) Forty-five members of Fisher River Fishermen's Federation were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b)
Order Paper Questions
At the time of expiration of the contract on March 31, 1978, all members were still registered as commercial fishermen.


Mr. Epp: 1.	Who was the head or chief representative of the Louis Riel Cooperative at St. Laurent, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In June of 1973, when Special ARDA assistance was offered, the head representative of Louis Riel Industrial Co-op was Mr. William Dumont, president.
2. (a) At the start of operations, the enterprise employed eighteen people, but was forced to cease operations for some time as the result of a severe fire. The operation is starting up again with the same employee level, (b) See 2. (a) above.


Mr. Epp: 1.	Who was the head or chief representative of the Einarsson's Trailer Court and Store in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1973, when Special ARDA assistance was offered, the head representative of Einarsson's Trailer Court and Store was Mr. Henry Einarsson, owner.
2. (a) At the start of operations, the enterprise employed three people, but has since ceased operations due to bankruptcy. (b) See 2. (a) above.


Mr. Epp: 1.	Who was the head or chief representative of the Nor-East Enterprises Ltd. in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Dapartment of Regional Economic Expansion is as follows: 1. In June of 1973, when Special ARDA assistance was offered, the head representative of Nor-East Enterprises Ltd. was Mr. Arthur Bostrom, owner.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, November, 1976, this enterprise employed three people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.

April 10, 1978
Order Paper Questions


Mr. Epp: 1.	Who was the head or chief representative of the Pikwitonei Local Fur Council in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In March of 1974, when Special ARDA assistance was offered to Pikwitonei Local Fur Council I, the head representative was Mr. William R. Cordell, president.
2. (a) Seventeen members of Pikwitonei Local Fur Council I were able to engage in trapping during the contract period and improved their incomes as a result.
(b) At the time of expiration of the contract on March 31, 1976, all members were still registered as trappers.


Mr. Epp: 1.	Who was the head or chief representative of the York Landing Local Fur Council in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In August of
1973,	when Special ARDA assistance was offered to York Landing Local Fur Council I, the head representative was Mr. Horace Saunders, president.
2. (a) Seven members of York Landing Local Fur Council I were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1975, all members were still registered as trappers.


Mr. Epp: 1.	Who was the head or chief representative of the Red Sucker Lake Local Fur Council in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In April of
1974,	when Special ARDA assistance was offered to *Red Sucker Lake Trappers' Association, the head representative was Mr. Billy Harper, president.
2. (a) Fifty-six members of Red Sucker Lake Trappers' Association were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1975, all members were still registered as trappers.
* Now known as Red Sucker Lake Local Fur Council.


Mr. Epp: 1.	Who was the head or chief representative of the Shamattawa Local Fur Council in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In August of 1973, when Special ARDA assistance was offered to * * 1 2Shamat-tawa Trappers' Association I, the head representative was Mr. Joel Beardy, president.
2. (a) Seven members of Shamattawa Trappers' Association I were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1975, all members were still registered as trappers.
* Now known as Shamattawa Local Fur Council.


Mr. Epp: 1.	Who was the head or chief representative of the Split Lake Local Fur Council in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In July of 1973, when Special ARDA assistance was offered to Split Lake Trappers' Association*, I, the head representative was Mr. Dan Flett, president.
2. (a) Thirty-seven members of Split Lake Trappers' Association I were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1975, all members were still registered as trappers.
*Now known as Split Lake Local Fur Council.


Mr. Epp: 1.	Who was the head or chief representative of the Nelson House Local Fur Council in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1975, when Special ARDA assistance was offered to Nelson House Local Fur Council, the head representative was Mr. Angus Linklater, president.
2. (a) Thirty-four members of Nelson House Local Fur Council were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time
[Mr. Wood.)
April 10, 1978

of expiration of the contract on September 30, 1975, all members were still registered as trappers.


Mr. Epp: 1.	Who was the head or chief representative of the Cormorant Local Fur Council in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1973, when Special ARDA assistance was offered to Cormorant Local Fur Council I, the head representative was Mr. Leslie J. Turner, president.
2. (a) Thirteen members of the Cormorant Local Fur Council I were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1976, all members were still registered trappers.


Mr. Epp: 1.	Who was the head or chief representative of the Grand Rapids Service Station in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In August of 1974, when Special ARDA assistance was offered, the head representative of Grand Rapids Service Station was Mr. Oscar Olson, owner.
2. (a) From the start of operations to December 5, 1977, the enterprise has employed eighteen people, (b) This company is still within the control period specified in the letter of offer. See 2 (a) above.


Mr. Epp: 1.	Who was the head or chief representative of the Molson Lake Lodge in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1973, when Special ARDA assistance was offered, the representatives of Molson Lake Lodge were Messrs. Joseph J. and Edward A. Paupanekis, co-owners.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, December, 1976, this enterprise employed six people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.
Order Paper Questions


Mr. Epp: 1.	Who was the head or chief representative of the Brochet Fishermen's Cooperative in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1973, when Special ARDA assistance was offered to Brochet Co-op Ltd., the head representative was Father A. Darveau, secretary.
2. (a) Twenty-five members of Brochet Co-op Ltd. were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1974, all members were still registered as commercial fishermen.


Mr. Epp: 1.	Who was the head or chief representative of the St. Ambroise Fishermen's Association in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In December of 1972, when Special ARDA assistance was offered to St. Ambroise Fishermen's Association, the head representative was Mr. S. Lavallee, president.
2. (a) Seventeen members of St. Ambroise Fishermen's Association were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1974, all members were still registered as commercial fishermen.


Mr. Epp: 1.	Who was the head or chief representative of the Oak Point Fishermen's and Trappers' Association in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In December of 1972, when Special ARDA assistance was offered to Oak Point Fishermen's and Trappers' Association, the head representative was Mr. Lloyd Clegg, president.
2. (a) Twenty-three members of Oak Point Fishermen's and Trappers' Association were able to engage in commercial fishing and trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1974, all members were still registered as commercial fishermen and trappers.

April 10, 1978
Order Paper Questions


Mr. Epp: 1.	Who was the head or chief representative of the Cormorant Fishermen's Co-op in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) Flow many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In January of 1973, when Special ARDA assistance was offered to Cormorant Fishermen's Association, the head representative was Mr. Louis J. Ducharme, president.
2.	(a) Three members of Cormorant Fishermen's Association were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1974, all members were still registered as commercial fishermen.


Mr. Epp: 1.	Who was the head or chief representative of the Indian Rice Producers in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1973, when Special ARDA assistance was offered, the head representative of Indian Rice Producers Co-op Ltd. was Mr. Walter Courchene, president.
2.	(a) At the start of operations, the enterprise employed three people, but has since ceased operations due to bankruptcy. (b) See 2. (a) above.


Mr. Epp: 1.	Who was the head or chief representative of the Camperduck Trappers Association in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In October of 1972, when Special ARDA assistance was offered to Camperduck Trappers Association I, the head representative was Mr. George Butler, secretary-treasurer.
2. (a) Seven members of Camperduck Trappers Association I were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1974, all members were still registered as trappers.


Mr. Epp: 1. Who was the head or chief representative of the Wabowden Trappers Association in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?

2. (a) Flow many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In October of 1972, when Special ARDA assistance was offered to Wabowden Trappers' Association I, the head representative was Mr. Abel Hall, president.
2. (a) Thirteen members of Wabowden Trappers Association I were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1975, all members were still registered as trappers.


Mr. Epp: 1.	Who was the head or chief representative of the Tri-Star Construction Company Ltd. in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In June of 1973, when Special ARDA assistance was offered, the head representative of Tri-Star Construction was Mr. William Dumont, owner.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, November, 1976, this enterprise employed three people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.


Mr. Epp: 1.	Who was the head or chief representative of the Lac du Bonnet Trappers' Association in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In October of 1972, when Special ARDA assistance was offered to Lac Du Bonnet Trappers' Association I, the head representative was Mrs. Theresa Ledin, president.
2. (a) Seven members of Lac Du Bonnet Trappers' Association I were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1974, all members were still registered trappers.


Mr. Epp: 1.	Who was the head or chief representative of the Oak Point Ftotel in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) Ftow many people were employed as a result of the grant and for what period of time (b) how many are presently employed?
April 10, 1978


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In March of 1974, when Special ARDA assistance was offered, the representative of Oak Point Hotel was Mr. Peter Torbiak, owner.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, May, 1977, this enterprise employed seven people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.


Mr. Epp: 1.	Who was the head or chief representative of the Moak Lodge at Grand Rapids, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1973, when Special ARDA assistance was offered, the representative of Moak Lodge was Mr. Herman Kutzner, owner.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, May, 1977, this enterprise employed nine people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.


Mr. Epp: 1.	Who was the head or chief representative of the Hole River Trappers Association in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In October of 1972, when Special ARDA assistance was offered to Hole River Trappers' Association I, the head representative was Mr. Alfred Favel, president.
2. (a) Eighteen members of Hole River Trappers' Association I were able to engage in trapping during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1974, all members were still registered trappers.


Mr. Epp: 1.	Who was the head or chief representative of the Barren Land Band at Lac Brochet, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In October of 1972, when Special ARDA assistance was offered to Barren
Order Paper Questions
Land Band Council, the head representatives were Mr. Pat Hyslop and Father Darveau, spokesmen.
2. (a) Ten members of Barren Land Band Council were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1975, all members were still registered commercial fishermen.


Mr. Epp: 1.	Who was the head or chief representative of the Yellow Quill Co-op at Swan Lake, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In June of 1973, when Special ARDA assistance was offered, the head representative of Yellow Quill Co-op was Mr. Harry Mous-seau, president.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, June, 1977, this enterprise employed four people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.


Mr. Epp: 1.	Who was the head or chief representative of Mr. Laubman's at Pitwitoei, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In July of
1972,	when Special ARDA assistance was offered, the head representative of P. Laubman's was Mr. Percy J. Laubman, owner.
2. (a) At the start of operations, the enterprise employed three people, but has since ceased operations due to bankruptcy. (b) See 2. (a) above.


Mr. Epp: 1.	Who was the head or chief representative of the Interlake Custom Killing at St. Laurent, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In August of
1973,	when Special ARDA assistance was offered, the head representative of Interlake Custom Killing was Mr. E. Schon, president.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, May, 1977, this enterprise

April 10, 1978
Order Paper Questions
employed four people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.


Mr. Epp: 1.	Who was the head or chief representative of the Northern Meat and Sausage at Scanterbury, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In July of 1973, when Special ARDA assistance was offered, the head representative of Northern Meat and Sausage Co. Ltd. was Mr. Ira Dallman, owner.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, April, 1977, this enterprise employed five people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.


Mr. Epp: 1.	Who was the head or chief representative of A. MacAuley in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1972, when Special ARDA assistance was offered, the head representative of A. MacAuley Camp was Mr. A. M. MacAuley, owner.
2. (a) At the start of operations, the enterprise employed four people, but has since ceased operations due to bankruptcy, (b) See 2. (a) above.


Mr. Epp: 1.	Who was the head or chief representative of E. Monkman at Loon Straits, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In August of 1972, when Special ARDA assistance was offered, the head representative of E. Monkman's was Mr. Ed Monkman, owner. 2
2. The proposal did not proceed as the applicant was unable to arrange for interim financing.


Mr. Epp: 1.	Who was the head or chief representative of the Pine Tree Inn at Richer, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In June of 1973, when Special ARDA assistance was offered, the head representative of Pine Tree Inn was Mr. Allan R. Jones, owner.
2. (a) At the start of operations the enterprise employed three people, but has since ceased operations due to bankruptcy. (b) See 2. (a) above.


Mr. Epp: 1.	Who was the head or chief representative of the Crane River Feedlot in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In August of 1972, when Special ARDA assistance was offered, the head representative of Crane River Feedlot Co-op Ltd. was Mr. James J. Moar, president.
2. (a) At the start of operations, the enterprise employed eight people, but has since ceased operations, (b) See 2. (a) above.


Mr. Epp: 1.	Who was the head or chief representative of the Fisher Bay Fishermen's Association in Koostatak, Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1972, when Special ARDA assistance was offered to Fisher Bay Fishermen's Association, the head representative was Mr. Theodore Govereau, president.
2. (a) Three members of Fisher Bay Fishermen's Association were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1975, all members were still registered as commercial fishermen.


Mr. Epp: I. Who was the head or chief representative of the South Indian Lake Fishermen's Co-op in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
April 10, 1978

2. (a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In July of 1976, when Special ARDA assistance was offered to South Indian Lake Fishermen's Association, the head representative was Mr. William R. Dysart, president.
2. (a) Thirty-six members of South Indian Lake Fishermen's Association were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on September 30, 1977, all members were still registered as commercial fishermen.


Mr. Epp: 1.	Who was the head or chief representative of the Lake Manitoba's Fishermen's Co-op in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In May of 1972, when Special ARDA assistance was offered, the head representative of Lake Manitoba Co-op Fisheries was Mr. Frank Bruce, secretary.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, May, 1976, this enterprise employed four people annually, (b) As the control period of the financial assistance has expired and final payment has been made this information is no longer collected.


Mr. Epp: 1.	Who was the head or chief representative of the St. Laurent Fishermen's Association in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In August of 1972, when Special ARDA assistance was offered to St. Laurent Fishermen's Association, the head representative was Mr. W. Dumont, treasurer.
2. (a) Twenty-two members of St. Laurent Fishermen's Association were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on March 31, 1974, all members were still registered as commercial fishermen.


Mr. Epp: 1.	Who was the head or chief representative of the Norway Nursing Home in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?
Order Paper Questions


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In September of 1973, when Special ARDA assistance was offered, the head representative of Pinaow Wachi (Norway House Nursing Home), was Mrs. Amy Monias, president.
2. (a) From the start of operations to the end of the Special ARDA three-year control period, April 1977, this enterprise employed twenty-eight people annually, (b) As the control period of the financial assistance has expired and final payment has been made, this information is no longer collected.


Mr. Epp: 1.	Who was the head or chief representative of the Grand Rapids Fishermen's Co-op in Manitoba at the time when the organization received funding under the Federal-Provincial ARDA Programme?
2.	(a) How many people were employed as a result of the grant and for what period of time (b) how many are presently employed?


Donald Paul Wood: The reply for the Department of Regional Economic Expansion is as follows: 1. In April of 1972, when Special ARDA assistance was offered to Grand Rapids Fishermen's Co-op Ltd. I, the head representative was Mr. Colin McKay, president.
2. (a) Nineteen members of Grand Rapids Fishermen's Co-op Ltd. I were able to engage in commercial fishing during the contract period and improved their incomes as a result, (b) At the time of expiration of the contract on July 4, 1972, all members were still registered as commercial fishermen.


Mr. Andre: 1.	What is the Crown's precise Financial interest in Canadian Colour and Fashion Trend Service as administered by the Department of Industry, Trade and Commerce and on what date was such interest acquired, at what cost and for what reason?
2.	What was the book value of the Crown's equity on the date of acquisition and what is its latest estimated book value?
3.	To date, what is the Crown's total investment, including equity costs, contributions to operating funds, debt forgiveness and what is the Crown's total realized profit from such investment?
4.	In what manner is the Crown's interest represented (a) on the Board of Directors (b) in its senior management?
5.	Did the government make a policy decision in regard to the future disposition of its interest?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: In so far as the Department of Industry, Trade and Commerce is concerned: 1. The Crown has no financial interest in the Canadian Colour and Fashion Trend Service as administered by the Department of Industry, Trade and Commerce. The Crown's financial involvement is limited to annual contributions toward the operating costs of the service over a maximum period of seven years. Formed in October 1975 as a non-profit organization without share capital, the equity of the corporation is limited to the net value of the fixed assets which amount to $5,773.00. The reason for the contribution was to promote the development of an organization that could

April 10, 1978
Order Paper Questions
accumulate and disburse national and international colour and fashion information to firms in the clothing, leather and allied industries.
2.	The residual assets of the company as shown in (1) will revert to the Crown upon liquidation.
3.	To date, the Crown's contribution to operating funds are as follows:
Inception Final Year
Year
1975-	76
1976-	77
1977- 78	(as at Dec. 31, 1977)
Total Contribution


[Stage Direction]
The Crown has realized no financial profit from its contributions.
4.	A Board of Directors was comprised of nine selected representatives, of which eight were recruited from industry. Government representation on this Board was provided by an officer from the Department of Industry, Trade and Commerce who assumed the position of vice-chairman.
5.	It was the Board of Director's decision to recommend dissolution of the corporation in view of the poor industry support and the unlikely prospect that the service would be self-supporting by year seven. The membership voted in favour of the dissolution at a general meeting held September 15, 1977. In view of this decision all assets of the company revert to the Crown according to section (10) of the agreement between Her Majesty the Queen and the corporation.
Mr. Andre: 1.	What is the Crown's precise financial interest in Fashion Canada as administered by the Department of Industry, Trade and Commerce and on what date was such interest acquired, at what cost and for what reason?
2.	What was the book value of the Crown's equity on the date of acquisition and what is its latest estimated book value?
3.	To date, what is the Crown's total investment, including equity costs, contributions to operating funds, debt forgiveness and what is the Crown's total realized profit from such investment?
4.	In what manner is the Crown's interest represented (a) on the Board of Directors (b) in its senior management?
5.	Did the government make a policy decision in regard to the future disposition of its interest?


John (Jack) Henry Horner: In so far as the Department of Industry, Trade and Commerce is concerned: 1. Fashion Canada is the promotional name given to the Fashion Design Assistance Program initiated in May, 1970 as an integral part of the Textiles Policy announced by the minister, Jean-Luc Pepin. The program was set up to assist Canadian apparel and textile industries achieve a more competitive position in domestic and world fashion markets by: (a) advancing the development of Canadian fashion design talent and strengthening the innovative fashion design potential in the Canadian apparel and
[Mr. Horncr.l
textile industrie, and (b) promoting the recognition of Canadian designers, and the acceptance of Canadian fashion design in domestic and international markets. Fashion/Canada was incorporated in May, 1973 under Part II of the Corporations Act. The Crown's precise financial interest in Fashion/Canada, as administered by the Department of Industry, Trade and Commerce, is limited to contributions toward the implementation of the projects and the operating costs of the organization. The Crown has no shares in the corporation.
2.	Fashion/Canada was set up as a non-profit corporation without share capital.
3.	Up to the end of December, 1977, the Crown's total contribution was $972,028.00. The Crown has realized no financial profit as a result of it's contributions. Contributions from its inception are as follows:
Year	Total Contributions
1971-72	$ 60,000
1972-73	58,000
1973-74	104,000
1974-75	202,000
1975-76	199,000
1976-77	202,000
1977-78 (As of Dec/77)	147,028
	$972,028
Total Contributions
Contributions to projects have been mainly on a cost-sharing basis with industry.
4.	The Board of Directors of Fashion/Canada is comprised of 24 selected representatives from the federal government, provincial governments, and sponsoring industry associations. The current president is a director of the Textiles and Consumer Products Branch, Industry, Trade and Commerce. The executive director of Fashion/Canada is an employee of the department.
5.	At the time of the inception, no policy decision was made in respect to the future disposition of the corporation's interest. The mandate of Fashion/Canada is reviewed annually by departmental management in terms of the overall departmental policy relevant to the apparel industry sector.


Mr. Andre: 1.	What is the Crown's precise financial interest in the Centennial Commission as administered by the Department of the Secretary of State and on what date was such interest acquired, at what cost and for what reason?
2.	What was the book value of the Crown's equity on the date of acquisition and what is its latest estimated book value?
3.	To date, what is the Crown's total investment, including equity costs, contributions to operating funds, debt forgiveness and what is the Crown's total realized profit from such investment?
4.	In what manner is the Crown's interest represented (a) on the Board of Directors (b) in its senior management?
April 10, 1978

5.	Did the government make a policy decision in regard to the future disposition of its interest?


John (Moody) Roberts: 1, 2, 3, 4 and 5.
The Centennial Commission was established in 1963 by the Centennial of Confederation Act (S.C. 1963) and was designated as a schedule C "Agency Corporation under the Financial Administration Act reporting to the Secretary of State (PC 1964-1956)". The Commission formally closed operations effective April 1, 1968 at which time the Department of the Secretary of State assumed responsibility for all assets and liabilities. In addition to the normal wind-up activities, this involved primarily the administration of the Centennial of Confederation Fund. This fund was established in co-operation with the provinces and territories to provide capital grants to municipalities for the construction of centennial projects. This fund was terminated during the 1972-73 fiscal year and the operations of the Centennial Commission were terminated.


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


Mr. Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered.


PRIVILEGE
John George Diefenbaker: Mr. Speaker, I am very interested in the observation just made by the hon. gentleman that the answering of 47 questions, generally asked towards the end of the record, constitutes something of approval of the stand taken by the hon. member for Simcoe North (Mr. Rynard) and myself the other day. Forty-seven answered out of 1,532! If that represents any indication that this government wants information given to the Canadian people, all I can say is that if parliament goes on to the year 2300 we will still not have answers to these questions.
I decided to raise a question of privilege for, as has been pointed out today, and in particular by the last hon. gentleman who stated it, freedom of information is an objective of this government. Indeed, it should cover the entire field of political endeavour. I decided to look at the questions which have not been answered, and that look revealed a most interesting situation. The hon. member for Regina East (Mr. Balfour) asked a series of questions beginning with No. 1 and going up to some 40, I think the number is, which have been on the order paper since October 18.
I know the civil service is busy. I know it is overworked, with the tremendous number of official employees that it has, but it strikes me as unusual that these questions should not be answered because, after all, the answers are available. They are as simple as A, B, C. The government has all the answers.
Privilege-Mr. Diefenbaker
I might read two or three of them to indicate their nature. October 18, No. 1:
Are private companies or individuals hired by departments or agencies for activities related to advertising and, if so, in each case, how many contracts were awarded and in what amount for the fiscal year ended March 31 (a) 1975 (b) 1976 (c) 1977?
Mr. Speaker, they have the answer to that. Why would they not answer it? Why would they wait five months? These questions will die on the order paper unless they are answered.
Question No. 2 reads as follows:
For the fiscal year ended March 31 (a) 1975 (b) 1976 (c) 1977, what was the total cost of advertising in Canada for all government departments and agencies (i) in newspapers (ii) on television (iii) on radio (iv) in magazines (v) in all other forms?
The goverment has that information. Sometimes I listen to radio and television. I am interested in the fact that the government's interest seems to be the interest of those who are commenting, in many cases, and their favourable comments on the government are such that one wonders if that is the reason that question is not answered.
Question No. 3 reads as follows:
For the fiscal year ended March 31 (a) 1975, (b) 1976, (c) 1977, what was the total cost to the Department of the Solicitor General for advertising in Canada (i) in newspapers, (ii) on television, (iii) on radio, (iv) in magazines, (v) in all other forms?
Question No. 4 deals with the Department of Consumer and Corporate Affairs. Question No. 5 deals with the Department of Industry, Trade and Commerce. Question No. 6 deals with the Department of Finance, and so on. I could go on page after page. Yet five months have gone by and these questions are still unanswered. Why are they not being answered? My answer is this, that the government is afraid to answer these questions as to do so would be embarrassing to the government.


Some hon. Members:: Hear, hear!


John George Diefenbaker: It would reveal the degree to which patronage is rampant under this government. I will not read any more of this group. They are all of the same purport, and the information is hidden in every case.
Then we come to another series of questions asked by the hon. member for Huron-Middlesex (Mr. McKinley). These are of interest here in the city of Ottawa. There is no difficulty getting this information. It is in every department. The following are some of the questions which have been on the order paper since November 14.
Question No. 560 reads as follows:
1.	How many square feet are leased by the government in the Aaron Building, 1712 Carling Ave., Ottawa?
2.	What is the cost per square foot?
3.	Which departments are located there?
4.	Who is the landlord?
5.	On what date does the lease expire and will it be renewed?
6.	How many square feet are currently classified vacant?
7.	How many square feet will be vacated or refitted in the next five years because of decentralization?

April 10, 1978
Privilege-Mr. Diefenbaker
Question No. 561 asks how many square feet are leased by the government in the Abrams Building, 2620 Sheffield Road, Ottawa. The next question we come to is No.562, which asks how many square feet are leased by the government in the Ala Kantti-Liff building, 222 Somerset Street West, Ottawa. Question No. 563 asks how many square feet are leased by the government in the Allstate Building. It even designates the address on Carling Avenue so the civil servants would have no difficulty in knowing where the building is. The next question is how many square feet are leased by the government in the American Can Company building. The address is given on Spruce Street. Going on-how many square feet are leased by the government in the Aselford-Martin Building on Woodward Drive, Ottawa?
So it goes, page after page, the Bank Building, the Bank of Nova Scotia building, the Bayview Road building, the Beamish building. That information is available to the government. All they have to do is look at the figures in the departments.
Those questions go from No. 563 to No. 645. It is a strange thing. Apparently the government cannot read. They have seen these questions here for five or six months, but have not answered them. Then they talk about believing in freedom of information.
I could go through the entire list. There is only one reason why these questions have not been answered. It would be embarrassing to the government if the answers were given. You cannot run parliament in that way. When I was Prime Minister, the total expenditure in Canada was $6 billion. Now it is over eight times that.
What is being paid for these various rentals? Why should that information not be available? Is it because it would reveal information to the Canadian people that would not be to the credit of the government? There can be no other explanation. Some questions will take time to answer, but that information is available in every department. I am not going to say more about that except to add that what this government is doing is hiding the information.
We are getting to the position today where you cannot believe the government. We had an example of that in the 1974 election. The Prime Minister (Mr. Trudeau), placing his hand over where his heart is, said that if he were re-elected they would not bring in wage and price controls. He pointed out the awful Conservative stand on that. Within a matter of weeks and months, he brought about that which he said he would never do. With that kind of leadership, it is no wonder we cannot get answers to these questions.
I can go on from there. Could it be suggested that the failure to answer these questions is that they have not the information? Parliament is being treated by this government as though it were a pawn. Mention was made today by the Deputy Prime Minister (Mr. MacEachen) that principles effective in the British parliament do not necessarily apply here. Principles of integrity do.


Some hon. Members:: Hear, hear!


John George Diefenbaker: I want to point that out. One should not have to say that. Some ministers answer the questions. I could even give a list of them because it would not take me long. I think there are three or four who answer the questions. One sits directly opposite me at this moment.
It is deliberate. The concealment is flagrant. Hiding information is contempt of this parliament, a grievous contempt. Is it any wonder that the expenditures of the Government of Canada have gone up and up and up by billions? They are $48,000 million this year. Since the present Prime Minister has been Prime Minister of Canada, they have gone up by approximately 78 per cent.
Hiding information enables the government to get away with these vast expenditures. We have now come to the point where this government treats this House with a disregard that I have never seen equalled. I have been here under three Prime Ministers and I have never seen anything to equal this. I remember Mackenzie King saying on one occasion, "We will give full information, by and large, excepting in connection with defence", which one could understand during days of war. Parliament got that information. It was the same under Mr. St. Laurent; meticulous, careful. We did not end a parliament with 1,450 questions unanswered. Never!
I witnessed something today that I did not think I would ever see, so unusual it was. When a parliamentary secretary to a minister starts to answer as to what the government is going to do, he has no such right. He does not sit in the cabinet. He is simply an assistant of the minister he represents. However, day after day one of the primary rules of parliament, that ministers ought to answer, is deliberately being set aside. Why? What does a parliamentary secretary know in connection with what the cabinet has done? He has no responsibility. All he has is a decorative position of giving assistance to the minister.
I made a mistake a while ago, and I am a Conservative. I mentioned the increase in the expenditures since the present Prime Minister became Prime Minister ten years ago. It is an 80 per cent increase, not the percentage that I gave speaking off the top of my head.
Because this government knows it can get away with this, it refuses to answer. It deliberately neglects to answer questions, giving parliament information to which it is entitled. Do you think it will hurt anybody? Will it hurt the security of Canada if we find out that a favourite landlord of the government receives a tremendous price for a rental and that an equivalent rental is only half that amount? It would not hurt the reputation of those landlords to have the truth out.
With all the power at my command, I condemn this practice, whereby when this House ends, whether it be on Thursday or Friday, of 1,500 questions unanswered, although the people have the right to that information, they will have no information on them. If this is the way they treat parliament, then no wonder the expenditures have increased as they have over and over again, year by year.
April 10, 1978

In 1978 we are told that although the expenditures have gone up, "look at the wonderful government we have." I have never before known a government going to the country saying they have spent more than ever before, that spending has increased by 80 per cent, that the cost of living, which was 1 Vz per cent in my time, today is 7 or 8 per cent and still going up.


An hon. Member:: It is 9'A per cent.


John George Diefenbaker: Nine and one half per cent. The same is true of interest rates. In the days ahead we will hear the argument advanced that we have a government so solid, so stable, so protective of the Canadian interest.
I am going to make a simple request of the House. Every few minutes as I go on I get an increase in the expenditures of the government. These are accountants who are not speaking from memory. They point out that I have been so generous in my words that I have appalled them. The latest is from an accountant. Expenditures under Mr. Trudeau in some areas have risen 800 per cent during his term.


Some hon. Members:: Shame!


John George Diefenbaker: I do not want to speak any longer. Somebody else will check the figures as far as the increase in expenditures is concerned, but I am advised it is 800 per cent.
Sir, the reason for not answering is simply that the government will not answer any questions which are embarrassing. That is the case all across the board. Today, in all its benevolence and with the great heart revealed by the words of the parliamentary secretary, some 40 questions are being answered. I suggest the House has a right to demand that the government, with the information in its possession-and it has every bit of information needed-should table the answer to those questions tomorrow or the day after, if we are still here. And if those questions are answered, the people of Ottawa will be shocked as never before by the degree of political patronage practised by this administration.


Allan Joseph MacEachen: Mr. Speaker, as I listened to the right hon. member for Prince Albert (Mr. Diefenbaker) I thought for a moment that the budget debate had already commenced. The right hon. gentleman ranged over the whole area of economic policy, rising expenditures, and the growth of the national debt.


John George Diefenbaker: I never mentioned the debt.


Allan Joseph MacEachen: He did all this under the guise of a spurious question of privilege or point of order, the grounds for which do not exist in fact. The right hon. member is obsessed with the possibility of an election.


John George Diefenbaker: I am not!


Allan Joseph MacEachen: He is totally obsessed by the possibility of an election. He has told us we are in the last days of this
Privilege-Mr. Diefenbaker
parliament, that there is to be a dissolution on Thursday or Friday. I do not want to relieve him of his anxiety-


John George Diefenbaker: You don't know, yourself. The Prime Minister has not told you yet.


Allan Joseph MacEachen: For my part I am content that this parliament should live on for an indefinite period and I would suggest that the right hon. gentleman not hold his breath on Thursday or Friday-not yet, anyway. I must also tell him he has totally distorted the facts with respect to the answering of questions. The fact of the matter is that this government has provided more information and answered more questions than any government in the history of Canada.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: If the right hon. gentleman would take a look at the order paper when he was prime minister and compare it with the order paper for today, he would find that the increase in the number of questions put down has been exponential. Their number has grown, in part because we have made possible the establishment of research staffs for opposition parties who have nothing better to do than dream up ridiculous questions and put them on the order paper.
It is appropriate that we should have an opportunity such as has been provided by the right hon. gentleman to comment upon the nature of questions which have been placed upon the order paper. Many of them relate to information which is already available to hon. members and which they can find in the Canada Gazette, or in the Canada Year Book which is the great source of constitutional authority for the official opposition. Many of these questions could be answered by a simple reference to government publications.
Then again, I wonder what a question like this, for example, has to do with the public interest-here is one question which apparently the right hon. member finds intriguing, otherwise he would not be urging that it be answered:
As of the date of this question, what is the (a) total number, (b) percentage of cabinet minister whose mother tongue is (i) English, (ii) French?
That, Mr. Speaker, is a question which was put down on the order paper, a mischievous question which should be dismissed out of hand as being insulting in its purpose.
Another question on the order paper to which we are expected to pay a lot of attention is this:
During his early February 1978 visit to British Columbia, did the Prime Minister meet with a group of labour leaders and specifically did he say to them "Do you think we are out to screw the Canadian people?" and, if so, (a) what is a full explanation of what the Prime Minister meant by this remark, (b) is the Prime Minister prepared to immediately produce evidence to Parliament showing that he is not out to "screw" the Canadian people?
That, too, is a question which was put down on the order paper in the expectation that it would be treated seriously by the government. There are many such questions on the order paper, and I believe we would be doing a great service to the operation of parliament if we were to take a closer look at these questions to determine whether they are useful and in the public interest. Many of them are not useful and are not in the
4300

April 10, 1978
Privilege-Mr. Diefenbaker
public interest, but they are placed on the order paper and a lot of time and money has to be spent in answering them.
We have provided answers to questions and we shall continue to do so. We have already answered over 900 questions this session-60 per cent of the questions appearing on the order paper have been answered. We cannot, of course, answer them in advance. At every moment of every day there will be unanswered questions appearing on the order paper. That is inevitable. We have, however, answered a very large number of them, and we shall continue to do so. We shall have answered more questions before the session ends. If the right hon. gentleman feels there is to be a dissolution on Thursday, or that parliament has very few days to live, I suggest to him that when any parliament ends, either by dissolution or the adjournment of a session, a number of questions are left unanswered. But the record of the government is extremely good in this respect.
The right hon. gentleman has allowed his suspicious mind to wander all over the order paper. With that suspicious attitude of his, he found some evil purpose lurking behind the questions left unanswered. There was the question of the rents which are paid or the square footage rented in a particular building. Mr. Speaker, that information will be made available.


An hon. Member:: When?


Allan Joseph MacEachen: Nobody is hiding it. The right hon. member is creating straw men, trying to make us believe there are sinister motives behind the failure to answer some of the questions which take time and money to answer. I ask him to dispel this suspicious attitude from his mind. If he were to do so he would have better peace of mind as he contemplates the election date which is so much his preoccupation these days.


Stanley Howard Knowles: Mr. Speaker, there is just one comment I should like to make with respect to something which was said by the Deputy Prime Minister (Mr. MacEachen). Before I come to the point which concerns me, may I just say that I assume that if that question about mother tongue had included one about one's mother tongue being Gaelic, the Deputy Prime Minister would not have been so offended.
However, what concerns me is a particular statement made by the Deputy Prime Minister. If I remember correctly, he said that perhaps we should look at these questions before they go on the order paper.
What does the Deputy Prime Minister have in mind? Is he going to have the government censor questions and deny members the right to put them on the order paper? It seems to me that if members put irresponsible questions on the order paper, they have to take responsibility for that in the eye of the public, but I have to say that I do not like the idea or the suggestion that some government body or board somewhere should have the power to review our questions. That would mean censoring or eliminating questions which members wish to put on the order paper.


Walter David Baker: Mr. Speaker, the point raised by the hon. member for Winnipeg North Centre (Mr. Knowles) is sound indeed. I do not think that the government House leader ought to condemn too quickly opposition members of parliament for their questions. He ought not to condemn members at all for putting questions on the order paper. If there is to be a condemnation, let the government House leader speak to the hon. member for Vaudreuil (Mr. Herbert) about the host of questions which appear in his name starting at page 76 of the order paper. Let me indicate just briefly what question No. 62, in the name of the hon. member for Winnipeg North (Mr. Orlikow), asks, as follows:
For the Fiscal year 1975-1976, what contracts for professional services were let (a) for studies, surveys and analyses into present or future policies, programs or information analysis, and their efficiency and effectiveness (b) into the examination of the administration or internal operation of the Post Office Department?
That question has been kicking around unanswered on the order paper since October 18, 1977. I see the hon. member for Ottawa-Vanier (Mr. Gauthier) is waving his arms as if he has taken leave of his senses. I could talk about one of his questions which appears on the order paper. There is a whole host of questions on the order paper, asked not just by members of the opposition but by members of the government as well. All members of parliament have the right to have their questions answered, and if we review the order paper, we find that there are many questions.
It is the responsibility of members of parliament, not that of the government House leader or of anyone else, to see that their questions are proper, but it is the responsibility of the government to answer questions on the order paper.
I speak now as a member of parliament from the national capital area. I see from the order paper that there are questions put there by the hon. member for Huron-Middlesex (Mr. McKinley) with regard to rentals of buildings and square footages. At a time when departments are leaving this city in droves, and when we are in the midst of a decentralization program which is not even supported by some members on the government side, it is not appropriate for the government House leader to say that certain questions are inappropriate and that they ought not to be answered. The right hon. member for Prince Albert (Mr. Diefenbaker) is absolutely right, they should be answered, and those answers would be fairly revealing to the people of the national capital area.
While I am on my feet, let me deal with one other matter with respect to questions, and that is the whole matter of starred questions. Starred questions are answered here in the House rather than by way of written answers. By their very nature they require some immediacy in terms of dealing with them. 1 have noticed that they have been treated neither as important nor urgent in terms of the answers given by the government.
All members of the Standing Committee on Regulations and Other Statutory Instruments dealt unanimously with the right to freedom of information. The Canadian Bar Association, labour unions, and every responsible organization which appeared before that committee have indicated that opportuni-
April 10, 1978

ties for information and knowledge, not just for members of the opposition but for all members of parliament, are wanting.
The government refuses to answer ordinary questions. It delays and drags its feet with respect to starred questions. I think we have to examine our system and our rules because they are not functioning in the terms that the 20th century requires. This is very important. As our parliament and our society become more complex, more and more questions will be asked, and our procedures with respect to questions are becoming farcical and irrelevant. I comend the right hon. member for Prince Albert for raising this matter today, and I condemn the government Elouse leader for giving the same old rote and the same old nonsense, rather than taking his responsibility and looking toward improving the procedures which are important to all of us.


Mr. Robert C. Coates (Cumberland-Colchester North):: Mr. Speaker, I would like to speak for just a few moments about this matter. I think Your Elonour has a special responsibility to individual members because the order paper is not something which is exclusive to members of the opposition. This was pointed out by the previous speaker. The order paper is available for all members of parliament so that they can seek information and obtain facts.
The Deputy Prime Minister (Mr. MacEachen) endeavoured to indicate that there should be a set of rules to determine how questions are put before they appear on the order paper, but there is definitely a determination made by members of Your Honour's staff as to the form of questions before they appear on the order paper. Questions must seek information and must not be partisan or political. The approximately 1,400 questions which at the moment are unanswered are not partisan political questions, but questions asking for facts. Members of parliament, whether they be Liberal, Social Credit, New Democratic or Progressive Conservative, have a right to ask questions, and the public has the right to know the answers.
Unfortunately, questions on the order paper have been taking up more and more of the time of this House because of questions of privilege of this nature. There is unwillingness on the part of the government to provide individual members of parliament with facts to which they have a right. As the hon. member for Grenville-Carleton (Mr. Baker) has pointed out, the more the government involves itself in the lives of individual Canadians in one way or another, the more questions will appear on the order paper.
Since I have been here I have watched the attitude of the government change toward questions on the order paper. When 1 first came here, a starred question which appeared on the order paper was usually answered within a period of two weeks. The starring of a question indicated an urgency that the question be answered orally in the House more or less like an oral question, but that no longer is the case. We have come to the point where a starred question does not mean any more to a minister than any other kind of question.
Unfortunately, questions on the order paper do not mean very much to ministers these days. Your Honour is here to
Privilege-Mr. Diefenbaker
protect individual members of parliament, and Your Honour is here to prevent the rights of individual members from being trampled upon by the government, but that is what is happening when the government refuses to answer questions.
I do not know what Your Honour can do. I do not know if Your Honour can be the boss of the executive branch of government, but I realize it is your duty to assist us in our work. If Your Honour set down some ground rules, that would assist individual members of parliament. In the last three or four years, I have put a question in one session and have been required to put it again in the next session. By the time an answer is provided, in my experience it has been worthless. As a matter of fact I have stopped using the order paper to secure information, as I once did. The government almost places a time limit on answering questions. Thus, when I receive the information, it is well beyond the point where it is of any value or significance whatsoever.
There must be a time limit in which the government answers a question. For example, if the government does not answer a question within three months, then the minister responsible should be required to stand in the House and explain the reason for that. At least the public would know whether the government is preventing the individual member from securing the information he and the taxpayers of Canada have a right to know. It is similar to the tale of Rip van Winkle. The government goes to sleep for 20 years before it awakens and decides to provide the facts which were requested by a particular hon. member. Parliament is made to look foolish by the government, because government or opposition members cannot obtain facts to which they have a right.
Once again the right hon. member for Prince Albert (Mr. Diefenbaker) has indicated his great concern for this institution. In his own way he is endeavouring to tell Your Honour what has to be done in order to ensure this institution remains viable in the minds of all Canadians. Because of that, I hope Your Honour arrives at a solution to a problem which has been a continuing, growing, and worsening problem in this parliament and in previous ones.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I do not want to extend the debate on that point of order but since it is very important, I think it is my duty to state the views of my party on the matter. I would like to say first that all the points raised by right hon. member for Prince Albert (Mr. Diefenbaker) were unbiaised and that in his answer the Deputy Prime Minister (Mr. MacEachen) wanted to justify the fact that many questions have remained unanswered.
Mr. Speaker, what surprises me is the fact that since I have been elected here I have often heard the Chair say to an hon. member that his question should be put on the order paper. 1 think the Chair should let the hon. member ask his question and if an oral answer cannot be obtained during the question period or the information requested is too exhaustive, the hon.
80033-59'/2

April 10, 1978
Privilege-Mr. Diefenbaker
member should put his question on the order paper of the House. I suggest that this is part of our procedure.
But I cannot go along with the assertion that we are putting too many questions on the order paper since indeed we receive a great many requests from Canadian taxpayers who want to put such or such question on the order paper of the House because they have not received from department officials answers to questions they have asked.
For instance, when one wants to know the price paid by the government for leasing offices in a given building in a Canadian city, I think we pay public servants to give that answer and to avoid wasting time in seeking the answers or information requested.
Mr. Speaker, as the Deputy Prime Minister pointed out a while ago, answering questions that should not even be put is also a waste of money, because hon. members could find the answers themselves in the reports of the various departments. He said it was a waste of time and money. If we want to talk about economizing, we should think very seriously about the large number of hours civil servants spend writing documents that fill our letter boxes with insignificant and useless literature. As for useful information, we are quite willing to get it and read it but every single day we get a huge quantity of useless papers that represent a waste of time, paper and money. We should also have a look at that, to see that there is no abuse in that field, and that people are not being paid for nothing, for the mere pleasure of writing things that are of very little interest.
Mr. Speaker, I am in favour of continuing to use that formula, that means of getting from the government the information we need when we want to answer the taxpayers' questions. That is why I am opposed to the government having the authority of deciding which questions should be put or rejected, because even the government members ask a lot of questions. I find that quite normal. Nobody is shocked because members of the government side can now ask questions during the question period, because they are considered private members like the rest of the House. And I am not shocked because their questions appear on the order paper. I would not want anybody to be shocked by the number of their questions appearing on the order paper, but I do wish that ministers would do their utmost to give an intelligent answer, so as to satisfy the member who asked the question. As long as democracy and the respect of members' responsibilities remain our chosen way of life, government will have to accept that questions continue to appear on the order paper, and those questions will have to be answered. The question is important, but so is the answer.
Such, Mr. Speaker, is the view of the hon. member for Bellechasse and of the members of the Social Credit Party of Canada. If ever this question is brought before the Committee on Procedure and Organization and members of the committee, after careful consideration of the situation, find there have

been abuses and that the standing orders should be amended so as to be more relevant and efficient, then I am willing to have the orders changed with a view to making them more democratic and allowing quicker answers to members' questions. This, I believe, would lead to a decrease in the number of questions, because the answers given would eliminate other questions. That is the view that I wanted to express, Mr. Speaker, on the question of privilege put by the right hon. member for Prince Albert.


Roger Carl Young: Mr. Speaker, I will be very brief. I simply want to point out that, if my ears did not deceive me, the hon. member for Cumberland-Colchester North (Mr. Coates) perpetuated something of an incorrect or misleading impression. Not all 1,532 questions on the order paper remain unanswered. I thought the Deputy Prime Minister (Mr. MacEachen) pointed out quite explicitly that somewhere over 900, or over 60 per cent of those questions, have been dealt with already.
Since the hon. member for Cumberland-Colchester North has intervened this afternoon, I would just like to point out to him and to the House that I did receive a question from him this morning demanding a rather immediate answer. That question asked me, as a "supporter" of the Progressive Conservative Party of Canada, whether I might kindly remit as soon as possible some $25 or more. I just want to assure that hon. member that this question in particular will remain outstanding and unanswered.


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I rise on just a brief point. I am happy that the parliamentary secretary has indicated the matter of numerical numbers. The numbers game is very easy to play. The right hon. member for Prince Albert (Mr. Diefenbaker) left the House with the impression that there were 1,532 questions unanswered. That is totally false. As the House Leader explained, some 900, or 60 per cent of those questions, have been answered to date.
In answer to the hon. member for Grenville-Carleton (Mr. Baker), who tried to imply that I had a number of questions on the order paper, let me say that I have one question more than he has, and that is one question, and he has none. We do not abuse this. There are fewer than 500 questions on the order paper at this time, and there are 264 members in this House. If we all asked two questions, that is not a great number.
I recognize, as do all members here, the freedom to ask questions. I do not reject the point that some of the questions are difficult to answer. There is one thing I should like to see done, and that is, attached to the answer should be the amount of money representing the cost of providing the answer. Maybe we should be talking in terms of saving money in respect of the questions to be asked. It is about time this House knew that some questions are very expensive to answer. Perhaps in changes to the rules, and maybe the House will agree to this some day, we should require that the cost involved in answer-
April 10, 1978

ing some of these questions be placed alongside the answers. Some of these questions are far fetched, very very deep, and sometimes very expensive.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Allan Joseph MacEachen: That Standing Order 65(1) be amended by adding immediately after subsection (r), the following:
"(r) Northern pipelines, to consist of not more than 15 members, to which shall stand permanently referred all reports, orders, agreements, regulations, directions and approvals mentioned in sections 12, 13, 14, 15 and 22 of the Northern Pipeline Act; provided that the said committee shall report thereon at least three times in every session."
Provided that this subsection shall be deleted from the Standing Orders on the day on which the Northern Pipeline Agency ceases to exist.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Hon. Alastair Gillespie (Minister of Energy, Mines and Resources) moved: that Bill C-19, to amend the Petroleum Administration Act and the Energy Supplies Emergency Act, as reported (with amendments) from the Standing Committee on National Resources and Public Works, be concurred in.


[Stage Direction]
Motion agreed to.
Alastair William Gillespie: that the bill be read the third time and do pass.
He said: Mr. Speaker, I am most pleased to have the opportunity this afternoon, or what remains of it, of introducing for third reading today Bill C-19, which amends the Petroleum Administration Act. This bill will help to foster the development of Canadian resources and help to minimize our dependence on foreign oil.
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I think it is worthy of note that this should be seen as one of a number of very important measures which the government has taken to minimize our dependence on foreign oil imports. For example, the extension of the oil pipeline to Montreal has minimized these oil imports, probably to an extent very close to $1.5 billion a year in foreign exchange, and at the same time has reduced our vulnerability to a cessation of oil imports from the Middle East.
This bill, which will foster the development of domestic petroleum resources, should be seen very much as a part of a series of measures the government has taken to develop Canadian oil resources and to develop other energy resources which can replace oil imports. As I said previously in the House on second reading, the principle aim of this bill is to fulfil a commitment of the federal government given at the time of the massive salvage operation, and I refer to the operation in which the government of Alberta and the government of Ontario joined with the federal government in protecting, preserving, and continuing that huge project, the Syncrude project in Alberta. At that time a commitment was given that this particular project should receive international prices for the synthetic oil produced by Syncrude of Canada from these Athabasca tar sands.
This bill does a number of other things. It establishes, for example, the levy out of which will be paid the funds to provide for that international price. The proceeds of the levy are to be used to fund the compensation paid to purchasers of the Syncrude material. It is expected that the levy will approximate one half a cent per barrel. This cost will ultimately be borne by the consumer of the petroleum products who, I believe, should be prepared to pay the price to secure such development both in respect of Syncrude and other selected energy projects.
So we have the international price, the levy, and the mechanism of a board, the Petroleum Compensation Board, previously known as the Emergency Supplies Allocation Board, as the three main elements of the bill. There are one or two others to which I will refer.
A moment ago I referred to the fact that this levy could be used for other major oil products in the west. It is important that we realize the potential that might be brought into being for the advantage of Canadians. The tar sands and heavy oil sands of Alberta and, yes, of Saskatchewan as well, represent a potential recoverable reserve of crude bitumens of roughly 330 billion barrels, and 250 billion barrels of ultimately recoverable reserves of synthetic crude oil. That compares with roughly 7 billion barrels of recoverable oil from our conventional resources. Clearly the opportunities for Canadians are enormous, and that is why this bill is so important.
I referred to the possibility of certain other major projects being involved. Let me just list them. In addition to Syncrude production, which in the first phase may be up to 125,000 barrels a day, there could be through an expansion additional production of some 75,000 barrels a day, for a total of 200,000 barrels. There is the possibility of increasing the production of Great Canadian Oil Sands to about 60,000 or 70,000 barrels a

April 10, 1978
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day. There is the possibility associated with the tar sands III consortium, headed up by Shell, of 125,000 barrels a day. There is an announcement by Imperial about bringing the Cold Lake project to fruition, which would provide 140,000 barrels a day.
The Saskatchewan government has indicated its interest in heavy oil development, roughly in the order of 100,000 barrels a day, in association with Petro-Canada. There is also another group in Alberta headed up by Pacific Petroleum that has been talking about the possibility of producing heavy oil and conventional oils in the area of 100,000 barrels per day. This, essentially, represents new production for Canadians and new security for the Canada of the future-a security for our economy which does not exist so long as we are dependent for a large proportion of our oil on imports from abroad. The numbers that I have mentioned total between 600,000 and 700,000 barrels a day. It is quite clear that these resources will only be brought into production for the benefit of Canadians if those resources, because they are high cost resources, receive the international price at the market place.
I refer to two other aspects of this bill, Mr. Speaker, and I would like to conclude my remarks by mentioning them. Essentially, they are minor changes to the Petroleum Administration Act. First, they provide for the payment of special compensation to importers of petroleum in cases of undue financial hardship. This provision would only be employed in situations where the regulations do not and cannot foresee special circumstances faced by importers. The second change in the amendments to the Petroleum Administration Act is one I referred to in my preliminary remarks, the change of the name of the Energy Supplies Allocation Board to the Petroleum Compensation Board. The change of name will more properly reflect the functions today of the Energy Supplies Allocation Board.
During the committee stage there was consideration of a number of amendments. The committee decided to adopt four of those amendments. These amendments will improve and strengthen the bill. I would now like to outline the purposes of the amendments, which have been incorporated in the revised bill before us.
The first two changes affect clause 1. I should also point out that three of the four changes are of a technical nature. The other is more of a policy review nature. I will deal with the three technical amendments. Clause 65.1 has been added specifying that revenues from this levy will be used to meet the cost of paying import compensation to those classes of petroleum designated by the governor in council as being eligible to receive international crude oil prices. The purpose of that particular amendment is to clarify the relationship between clauses 1 and 2, and it does that.
The second technical amendment affecting clause 1 deletes a provision which would have permitted the governor in council to allow exemptions from the levy in instances where it would be in the public interest. This amendment is in line with

the principle that all domestic consumers who benefit from the additional security afforded by the increased availability of domestic oil should be prepared to meet their share of the cost of providing incentives for its development. Further, given the small size of the proposed levy, there was no foreseeable need for an exemption provision.
The third technical amendment concerns clause 2. Essentially, it clarifies a definition. It substitutes for the word "purchaser" the words "first uses" Syncrude material. That amendment was found necessary because some of the Syncrude partners will use the oil in their own refineries and, technically speaking, do not purchase it.
The final amendment, Mr. Speaker, submitted by the committee and reported to the House, has to do with the policy review that I referred to a moment ago. This amendment provides that once the Petroleum Compensation Board has designated classes of petroleum to receive import compensation, those particular designations would be permanently referred to the committee of the House which at the time considers oil and gas matters. This is an important change to the bill in that it gives the relevant committee an opportunity to hear explanations of and to discuss such designations.
You will appreciate, Mr. Speaker, that I have abbreviated my remarks this afternoon in the hope that we may be able to conclude this debate very shortly. I would like to re-emphasize that the Syncrude project, for which this particular measure is designed, is the largest project of its kind in the world, of which I am aware. It is the largest mining project by far in this country; and Canada is no small mining country. Indeed, we are one of the great mining countries of this world, but the material moved each day at Syncrude is equivalent to all the material moved by all the mines in Canada every day. That gives some idea of the size of the Syncrude project.
The other point that I would like to emphasize is that there are a number of other very significant projects which are available for the benefit of Canadians. The tar sands III that I mentioned, the expansion of GCOS, the Cold Lake project of Imperial Oil, the heavy oil project of Alberta, the Saskatchewan Petro-Canada project-projects which could produce 600,000 barrels a day or more by the mid-1980's. These particular projects will depend upon the decisions to move forward on those projects and the House taking a decision to accord world price, or to give authority to the government to negotiate with these projects so that world price could be made available to them, along with other incentives that will have to be negotiated with the provinces concerned.
That massive Syncrude project, that world first, will be delivering oil to Canadians this summer. We can ill-afford to delay any longer in taking a decision, and I hope that we will be able to conclude promptly and decisively this debate this afternoon.


Paul Yewchuk: Mr. Speaker, I am pleased to say a few words about Bill C-19, not only because the tar sands are located in my constituency but also because it could have a significant effect on national energy policy as a whole.
April 10, 1978

Everyone will agree on what an extremely valuable asset that this country has in its natural resources as far as petroleum products are concerned. It has been valuable in the past and will become even more valuable in the future.
In fact the economic well-being and security of this nation are directly related to the development of energy supplies for this country. This is a matter which is of great concern to me, because the minister, while attempting to sound optimistic, has no justifiable reason to be optimistic because his projections have been that by 1990 we will still be producing only 42 per cent of our country's needs in energy supplies. This illustrates a very basic difference between the governing party which is in power and the policy of the Progressive Conservative party. We are not satisfied with the weak-kneed effort which will leave Canada dependent on foreign supplies in 1990 for 58 per cent of its petroleum needs. Imagine the cost to the country of such foreign sourced oil.
I have said many times in this House and other places that I believe, and my party believes, that Canada should not be satisfied with anything less than complete self-sufficiency in petroleum. That goal is not a pipe dream. It is possible and could be achieved, given proper government policies and a government with the will to do the things that need to be done to achieve it.
I subscribe to the view that every barrel of oil produced in the tar sands plant means that one barrel less will be imported from foreign sources. If we depend on external suppliers to the extent the minister predicts, for about the same expenditure we could build a tar sands plant to produce oil at the same price. This would provide thousands of jobs for Canadians and would bolster our economy. The plant would continue producing in the future, guaranteeing jobs for generations to come. It would be ironic if the national economy were to flounder through lack of expansion of Canadian energy supplies when the solution to the projected energy shortages is near at hand.
We need companies with entrepreneurial skills, and we have them. We need to encourage them, however. We also need a government that understands the situation, and finally, we need far more action in the development of energy than we have seen thus far.
We believe that Canada has the energy potential and the ability to develop it, given the proper business environment. If we review the record of this administration over the past ten years or so we can conclude that the proper business environment does not exist because the government has not had a long term energy policy. It still does not. The government seems to be playing musical chairs with the policies it had. It changed them so often that it was impossible for the industry to make long term plans based on anything this government said on any given day.
One of the most serious drawbacks to development in the tar sands so far has been this rapid shifting of policy at the federal level. The tar sands deposits in my constituency, and which extend into the constituencies of Peace River and Vegreville,
Energy
as well as Meadow Lake in Saskatchewan, contain an estimated one trillion barrels of bitumin. Without a doubt this is one of Canada's major resources and will be a source of energy, wealth, and employment for decades to come. Through lack of government policy and foresight, however, there is still a question of whether this vast resource can be developed economically to its full potential.
The petroleum industry has experimented and worked with tar sands for many years. Great Canadian Oil Sands, a company located at Fort McMurray, developed the first tar sands mining project in 1967. The company had many difficult years in the initial stages, but today there is the prospect of profitable operations. We must encourage groups with this kind of vision if we are to be self sufficient in energy, which is a desirable goal.
The petroleum industry in general has shown in the past that it does not fear taking risks with its investments, but it must be able to justify those risks to its shareholders. It must see a financial return in keeping with the amount of risk. Stable, long term government policies are required in order to create a proper environment for such risk-taking.
The second major tar sand mining project at Fort McMurray, the Syncrude project to which the minister alluded, is nearly completed now. I am told it is expected to go on stream in June of this year. At the peak of construction the project had a labour force of 8,400 people. It is now just beginning to process the tar sands. I think Syncrude must be congratulated for its performance. By building that plant it made a significant investment for its shareholders, and a great contribution to the country as a whole from the standpoint of ensuring energy supplies. The project is ahead of the construction schedule and is expected to exceed the projected budget of $2 billion by only 2 or 3 per cent. If we compare that with some other projects in this country and the degree of error in the projected costs and scheduling, we see that the Syncrude project has been managed very well. This in itself, in today's environment, when major projects usually greatly exceed budgetary allocations, is a major accomplishment.
When the production of Syncrude is on stream, it will produce more than 100,000 barrels per day of synthetic crude. Canada will be able to reduce its net oil imports by that amount, thereby improving our over-all balance of payments position. The project also keeps at home some 3,000 permanent, direct jobs, which in turn produce many thousands of secondary jobs through the employment multiplier effect.
We know that Syncrude itself is not enough. As I have mentioned before, there is an estimated one trillion barrels of bitumen in place and waiting to be developed in my riding, in northern Alberta and northern Saskatchewan. I agree with the minister that a great portion of that cannot be developed with the current technology, economically speaking. At least a portion is economic, however, given the proper business climate.
This party recognizes Bill C-19 as an encouragement to industry. We recognize that it will be absolutely necessary for the industry to be guaranteed the equivalent of the world

April 10, 1978
Energy
crude oil price if it is expected to take the major investment risks required to bring the tar sands into production. Congratulations are due to the oil industry which, fortunately for Canada, has been planning ahead diligently without knowing the specifics of the business environment in which its major development investments will be made. It is in this area that the government has failed to gain the confidence of the industry. The government, and particularly the Minister of Energy, Mines and Resources (Mr. Gillespie), are to be severely castigated for their lack of foresight and their inability to make decisions regarding how the proper development of energy supplies should proceed. How can we as a nation achieve our goal of self sufficiency if these major projects do not know the long term business circumstances? How can they be encouraged?
I was rather amused at the minister's statement that these projects were all about to begin, when only two or three days ago he said in this chamber that he has not as yet reached any kind of agreement with the tar sands industry and Shell Oil so that they would know under what conditions their plants are to be constructed, and under what circumstances they might be able to predict their financial returns and their economic picture. That is unknown still today.
The minister runs around trumpeting the onset of the third tar sands project, knowing full well that he is responsible for the inordinate delays which have been happening in the construction of this plant. I am rather surprised he did not take the opportunity to tell us today why he is dragging his feet on this matter. I am sure he must accept the fact that development should be more rapid. I hope the minister will be serious because he has not been so far, particularly from the point of view of his policies not being matched to his words. He says one thing in this chamber about how he wants to see the developments take place, but he certainly does not follow up his statements with any kind of policies or long-term commitments. As a result of that we are in a situation where, by 1990, we will be importing 58 per cent of our total energy needs. That is a rather shameful performance on the part of the minister. He has nothing at all to smile about when he talks about his policies-or lack of them-as far as tar sands development is concerned.
As a result of a lot of foot dragging by the minister, Shell Oil is not starting its construction.
Farther south of Fort McMurray near Cold Lake, Imperial Oil has announced its proposed project, which is the first commercial in situ tar sands recovery project. This project is expected to cost in excess of $4 billion, and is pioneering new technology. The company has been experimenting with this production technology for nearly 14 years. They have said so in their television advertising. I think this television advertising has been important. It has let the public know that in spite of the lack of interest of this particular administration, and under adverse circumstances, the entrepreneurial skills of oil companies have indeed continued, with the ever-optimistic hope that
[Mr. Yewchuk.)
the government would be replaced. Perhaps even some minister of the government could be appointed, if the government is not replaced, who would be more amenable to accepting his responsibility in terms of long-term tar sands development policy.
I can say that the industry has had no reason for confidence in this particular government's policies. As a result of that, industry is not sure that the kind of development will take place that they want.
Imperial, Shell, and other projects will provide more jobs, as well as an industrial stimulus across Canada. The industrial ripple effect will also be felt in all parts of the country and will give long-term stimulus to the economy as a whole. I am sure we all agree that is badly needed. I recognize that these projects have a long-lead time and their benefits will not be felt until the early 1980's, but this is the type of entrepreneurship we need in this country, which should be encouraged every day. The present government has for too long denied industries in Canada a clear and stable industrial business climate which would encourage industrial development.
Bill C-19 itself has been a long time coming. I was amused that the minister was able to say today with a straight face how anxious he was to get this bill through. I would ask him how long it took that bill in gestation. I would suggest that it was longer than the gestation period of an elephant, which is a long time. Now, all of a sudden, he is in a great rush to get it through. I am not saying, Mr. Speaker, that we do not agree it should be put through in a hurry, but I am saying that he should have given the matter a little forethought a long time ago, and the bill would have been passed by now.
As it is, the bill is before the House right now. It has to be considered before passage, and it is now only two or three months before the Syncrude project is going on-stream. This bill should have been in place before that project even began construction. That reflects quite clearly the foot dragging attitudes of this minister and the lack of incentive that his foot dragging has created as far as the other projects are concerned.
We have the opportunity in Canada to become self-reliant in energy and thus self-sufficient. We also have the opportunity to generate national wealth by encouraging the export of surplus energy supplies as they are made available. The petroleum industry has repeatedly shown that it has the drive and initiative to develop Canada's petroleum resources. But to do so it needs a national government with a stable economic policy to stimulate the long-term investment and project planning which is necessary. Everybody accepts that a stable economic policy is necessary for massive projects such as these.
Industry must have confidence that it will be repaid, that its efforts will not be thwarted, either by intergovernmental bickering, which this minister has been engaging in widely, or by changing the rules of the game, which this minister and his predecessors have been doing.
To sum, up industry and potential investors in the petroleum industry need assurance that government policies will be stable
April 10, 1978

and that the incentives to develop and invest in the next generation of energy projects reflect the costs and the risks involved. Such incentives must also offer the opportunity for a good return on the capital invested.
I would like to conclude by saying to the minister that I hope in future-for whatever future he has left in that job or whatever future the government has left, I feel quite confident it is very little-the minister will take his job more seriously and put into place the policies required to create stability in the business climate. I would like to see business be given the ability to make long-term planning projections in some kind of a reasonable way to justify their risks and expenditures so that they can expect reasonable returns for their efforts in the long run, and through that method create greater assurances that this country will produce its required energy supplies in the foreseeable future.


Donald Frank Mazankowski: Mr. Speaker, I wanted to make a few remarks concerning this particular piece of legislation. It is a very important piece of legislation, but perhaps it might be wise to call it five o'clock in view of the fact that private members' hour is almost upon us.
[ Translation]


Mr. Deputy Speaker:: Order, please. It being five o'clock, the House will now proceed to the consideration of private members' business as shown on today's order paper, that is notices of motions and public bills.


PRIVATE MEMBERS' MOTIONS
Roger Carl Young: Mr. Speaker, I understand that there have been the normal consultations and there might be unanimous consent to proceed at this moment expeditiously with Bill S-10. As a result of the same consultations there is agreement to proceed with notice of motion No. 22 standing in the name of the hon. member for Wetaskiwin (Mr. Schellenberger). If we do that, I would ask that all notices of motions preceding No. 22 be stood by unanimous consent.


Steve Eugene Paproski: That is so agreed.


Mr. Peters:: No. What is No. 10?


Steve Eugene Paproski: The Legion bill.


William Arnold Peters: Call the bills.


Mr. Deputy Speaker:: Is there unanimous consent?


William Arnold Peters: No, there is not unanimous consent to proceed with Bill S-10 at this time.
Oil Tax


Mr. Deputy Speaker:: We will proceed in the normal order. I will ask at this time whether there is unanimous consent to stand motion No. 4 in the name of the hon. member for Ottawa West (Mr. Francis), motion No. 11 in the name of the hon. member for Don Valley (Mr. Gillies), and motion No. 21, and proceed directly to motion No. 22 appearing in the name of the hon. member for Wetaskiwin (Mr. Schellenberger). Is this agreed?


Some hon. Members:: Agreed.


REPAYMENT OF EXPORT TAX TO INDIANS Mr. Stan Schellenberger (Wetaskiwin) moved:
That, in the opinion of this House, the government should consider the advisability of taking steps to ensure that the question of repayment of the export tax on oil taken from Indian lands be satisfactorily dealt with.
He said: Mr. Speaker, I rise today on a matter I have introduced in this House many times, not in the form of a motion but by way of questions during the question period, questions in the committees of the House of Commons, and by way of the late show which we have from ten o'clock until 10.30 in the evening.
In September, 1973, the federal government saw fit to place an export tax on oil leaving this country for the United States, to make up the difference between our domestic price and the price oil had risen to as far as world price was concerned. It promised at that time that 50 per cent of the tax would be returned to the producing province and 50 per cent would be held in the federal treasury to be used for research and development of ways and means of finding new oil, getting oil out of the tar sands, and heavy oil. At the same time, the government collected the export tax on oil that was produced on Indian lands. Technically or legally, it was believed that Ottawa was not in a position to tax the oil on Indian reserves. That aside, this money was collected.
The government collected this tax from October, 1973, to April, 1974. In committee I was not able to get the exact amount that was collected and whether interest was going to be charged to this account. However, it was speculated that the amount was somewhere in the neighbourhood of $4 million.
Hon. members who have native people within their constituencies realize that when it comes to statistics, comparing the number who are unemployed and the number who are employed, it is very much the number who are employed which is greatest. A large percentage of our native people are unemployed. The Department of Indian Affairs and Northern Development is working diligently through its economic division to create industries and jobs for natives on their reserves.
In the case of Alberta, there are approximately ten Indian bands or reserves that have oil on their land and upon which

April 10, 1978
Oil Tax
export tax was collected. If the statistic is $4 million, that amount of money could be put to tremendous use on the Indian reserves in my constituency and the constituencies of other Alberta members. I speak of the Hobbema and Enoch who have put the money they have collected from their royalty to great use in providing for trailer factories, a home furnishing factory and drapery factories. Still they find that more than 50 per cent of their people are unemployed. This $4 million could have been put into those economic areas. In my opinion, we have been dragging our feet on this issue for the past four years.
As I understand the minister and the departmental officials, the province of Alberta will first have to decide whether it will get back its 50 per cent. For a number of years, the subject bounced back and forth between the federal government and the provincial government. On February 15, 1977, I suggested that, in order to expedite the situation, the Minister of Indian Affairs and Northern Development (Mr. Faulkner) should take the initiative and call a tripartite meeting between the native people, the provincial Department of Indian Affairs, and the federal Department of Indian Affairs.
The minister acknowledged that it was a very important question and that he would do everything he could to provide me with a satisfactory answer. However, almost a year has passed, and still we have no definite word on what is going to happen to this money. These native people are looking forward to the kind of development they could proceed with if the money were returned to them.
I checked with the department early this year. They informed me this was on the list of priorities for the cabinet in January. I then checked with the province of Alberta. I received an assurance from the province that they were prepared to give back their 50 per cent to the producing bands. As it looks now, it is the federal government that is holding up the return of this money to these people in Alberta.
In this motion I am asking that the House and the government do everything in their power to have the Department of Indian Affairs and Treasury Board act expeditiously on the return of the export tax which in fact is money belonging to those Indian bands. This money has been collected from them and held in the treasury. After four years, it is time that we make the decision and return that money to these people so that they can put it to use.
I urge the government to take immediate steps on this issue in order that this money, and hopefully the interest that has accrued, can be returned to the Indian bands because it is rightfully theirs.


Mr. Robert Daudlin (Parliamentary Secretary to Secretary of State):: Mr. Speaker, as usual the hon. member raises in a sincere way an interesting and complex problem, for which I would like to thank him. It has given me the opportunity to do some research into a problem with which I have not been completely familiar. It leads me rapidly to the conclusion that this is a complex problem raised by the hon. member. Some detailed background information as to the tax itself and how

the tax affects the Indian people is necessary before one can enter into a debate on the subject.
The motion, as presented, appears to deal with all moneys derived from the oil export tax since its inception in 1973, as it now exists and as it is likely to exist for some years to come. On the other hand, the total formal claim on record that has been made on behalf of the Indian bands from Alberta and Saskatchewan deal only with the amount of money collected under the oil export tax during the first six months that it was levied.
In the first case, we are talking about a sum of money which could amount to $100 million, whereas the Indian claim is slightly less than one tenth of that figure. Lest anyone question the $100 million figure, let me point out that no attempt has been made to refine the rough estimate since it is sensitive to the rate of oil export, the price differential between Canadian and foreign oil, the types of oil to which it applies, and the length of time it will remain in effect, together with a number of other imponderables.
I do not want to over-stress the dollar value of the oil export tax levied on oil production from Indian reserves. I merely want to emphasize that it is necessary to be specific about the size and nature of the problem introduced by the hon. member in his motion.
A moment ago I referred to the fact that the claim on record only deals with the first six months. I believe the hon. member has made that reasonably clear. By that I meant that all correspondence received indicates that the Indian people are claiming only that portion of the tax collected during the first six months. Nothing has been presented to indicate that the Indian people feel that they have a claim on the tax collected since that time. In fact, correspondence specifically states that the claim is made on moral grounds and will not set a precedent for possible future claims.
Perhaps the hon. member is suggesting in his motion that there is a basic principle that Indians shall not be taxed and that on this basis all of the tax levied on oil from Indian reserves should be returned to the Indian people. This, of course, would introduce a number of parallel situations with respect to any form of taxation of any product from an Indian reserve.
If this is the direction we are going in this debate, then we will be heading into some rather complex technicalities. I would prefer to think that this is a special case which is based on the handling of a specific tax during a specific period. On the assumption that we are considering only the first six month period, I have not attempted to look into the ramifications of the more general situation. The hon. member seems to agree that we are talking specifically and purely about the six month situation.
This is a complex problem. In order to place things in their proper perspective, I intend to discuss the oil export tax, past, present and future; the Indian involvement; the amount of money involved; the legal and moral implications of the claim;
April 10, 1978

the chronological order of involvement of the Indians and the federal government; the provincial involvement, the Indian Association involvement, and interrelated developments.
First, by way of an introduction, let us look briefly at the tax itself, and then see how the Indians themselves are involved. I would like to present the general picture before examining the question in detail. During 1973 the price of oil rose rapidly, with an increase of 25 cents a barrel in May and a further increase of 40 cents in August. The price of oil thus rose to about $3.85 a barrel. In September the Middle East oil producing countries imposed a partial export embargo, and followed this by a series of price increases affecting the international price of oil. At that time the government placed a price freeze on oil in Canada and effective October 1, 1973, initiated an oil export tax. This was intended to prevent companies exporting oil from Canada from reaping windfall profits. During the first six months, the tax rose from 40 cents to $6.40 for each barrel of oil exported.
To understand how the Indian people became involved, it is necessary to be aware that both oil and natural gas are being produced from a number of reserves in Alberta and Saskatchewan. All revenues derived, including bonuses from the sale of exploration rights, rentals from mineral and surface rights, and royalties from production, go to the band for which the particular reserve was set aside. Somebody will ask: how much production and how much revenue? We take pride in the fact that revenues during the current fiscal year from development of oil and gas will amount to about $80 million, most of which comes from royalties from oil and natural gas production.
I realize this will immediately raise the question of why we should be considering a claim for return of oil export tax revenues to bands which are already "wealthy", if I may use quotation marks. I intend to cover this point at greater length later. For the moment, I would raise the following points: first, not all the bands concerned are wealthy; second, we are discussing a depleting, non-renewable resource; finally, the Canadian taxpayer also reaps benefits in a number of different ways.
It is necessary to examine the oil export tax in some detail to appreciate fully the mathematics involved in the claim as presented by the Indian people. I might say that the mathematical and statistical figures put forward have been checked by our Indian minerals division, oil and gas specialists. These figures were, in turn, checked and verified by the provincial authority in Alberta since that province is also involved in the claim.
Before reading into the record the extent of the claim put forward by each of the various bands, I feel it is necessary for me to describe what is meant by the provincial and federal share of the tax. For the moment it is sufficient to say that, as a result of one or more provincial-federal conferences, it was arranged that half of the revenues received from the oil export tax during the first six months would be returned to the producing provinces in proportion to the oil production of the province. This is popularly known as the provincial share. Of the remaining half, which is known as the federal share, the
Oil Tax
federal government agreed to invest the tax collected during the first four months in energy-related development in the producing province, again in proportion to production. The federal government later decided that its investment in Syncrude satisfied its commitment to Alberta.
The Indian people questioned why tax on oil produced from Indian reserves was returned to the province. They further questioned whether investment in Syncrude will bring any direct benefit to the Indian people.
We are debating the return to the Indian people of the oil export tax collected from the production of oil from Indian reserves. I suppose one might take the attitude that since the federal government returned half of the revenue to the provinces, rightly or wrongly, it should be responsible to the Indian people for the total amount of the tax. Actually the Indian people have made a simultaneous claim to the province for the return of the provincial share and to the federal government for the return of the federal share. In a sense, this has been outlined by the hon. member.
Now, for the record, let me list the claims by the various reserves concerned. These figures give the calculated dollar value of the export tax on the exported portion of production from October, 1973, through March, 1974, on crude oil production:
The two columns list Indian reserves in Alberta and the tax figures which apply:
Amber River No. 211 Ermineskin No. 138 Hay Lake No. 209 Pigeon Lake No. 138A Samson No. 137 Sawridge No. 150G Stony Plain No. 135 Sturgeon Lake No. 154 Utikoomak No. 155A
These figures relate to crude oil production. In course, there are condensate sales upon which tax
$	7,319.67
184.27
14.275.46 7,190,768.45
4,632.04
278,170.16
1,031,457.91
24.593.46 72,635.60
Total $ 8,624,031.02 addition, of
ic lp\Mpn oc
follows:
Alexander No. 134	$	1,340.67
Blood Timber Limit No. 148A	300,819.00
Buck Lake No. 133C	27,535.14
Pigeon Lake No. 138A	160,478.67
Sarcee No. 145	34,620.39
Sawridge No. 150G	2,660.25
Stony No. 142B	60,059.88
Stony No. 142, 143, 144	112,008.15
Total $ 699,523.15
The Alberta total thus becomes $9,323,554.17. To this must be added the tax on condensate sales in Saskatchewan, White Bear No. 70, $7,279.48, for a grand total, Alberta and Saskatchewan, of $9,330,833.65.
These figures represent the total tax on crude oil and condensate from Indian reserves deemed to have been exported during the first six month period. In order to arrive at the calculated percentage of oil produced from reserves which was
4310

April 10, 1978
Oil Tax
deemed to have been exported, it has been assumed that the same percentage of Indian oil would have been exported as calculated for the total amount of oil produced in Alberta which was exported. These export percentages were provided by the Alberta Energy Resources Conservation Board. The provincial and the federal share would, of course, be half of the totals given.
It will be noted that the total deemed to have been derived from oil exported from Saskatchewan reserves is very small in comparison to Alberta totals. This will explain why Alberta is used almost exclusively as a base for discussion. Early in the processing of the claim it was decided that any submission to the Province of Saskatchewan for the return of its provincial share should wait until the federal and Alberta claims were settled. The band concerned has been kept advised.
Now let us examine the tax in a little more detail. I have already pointed out that the expressed intent of the tax was to prevent oil exporting companies from reaping windfall profits by purchasing Canadian oil at the frozen price and exporting it at the international price.
The level of the oil export tax is established on a monthly basis by the National Energy Board and the Department of Energy, Mines and Resources. It is necessary to change the level every time there is a price change in either the Canadian-domestic-or the international price.
Unfortunately, there is no clear-cut international price, since the price of foreign oil depends on many factors. For the purposes of the oil export tax, the average delivered price of foreign oil at Chicago is used for the international price. This seems reasonable since virtually all of the oil exported from Canada is purchased by our neighbour to the south. As previously pointed out, during the first six months a single price was used for all classes or grades of oil. Under present conditions, different prices are determined for a number of different classes.
Natural gasoline and condensates are defined as oil for the purpose of the oil export tax. This explains why some of our natural gas producing Indian reserves such as the Blood and Stony reserves are included as having a claim for an oil export tax rebate. If we were to read our Indian oil and gas regulations, we would note that "condensate" is defined as a part of the natural gas and is so classified for royalty purposes. Incidentally, the same is true for the province of Alberta. The fact that "condensate" would be classified as oil for the oil export tax purposes did not become clear until the Oil Export Tax Act was promulgated. This is the reason that condensate producing bands were not included in some of the earlier discussions respecting the possible rebate of the tax.
Confusion often arises from the reference to a particular oil price. One has to be very specific as to the grade of the oil and the location to which the price is quoted. For example, press releases would indicate that a single price for a particular grade of oil exists at any one time.

The July, 1977, Alberta Petroleum Marketing Comission price bulletin states that prices are based on a price of $11.18 per barrel for marketable petroleum having a quality of 42 degrees or higher API gravity and containing less than 0.5 per cent sulphur by weight at the Edmonton terminal of the Interprovincial Pipeline Company. On this basis, Indian oil from the Pigeon Lake reserve, D-3 pool, was valued at $11.085 per barrel, while the Stony Plain Indian Reserve D-3 production was valued at $10.94. Both of these carried a tax of $5.60 per barrel. At the present time oil from both reserves is worth $1.01 per barrel more. This may sound complicated in that the most recent pricing agreement indicated that the price of oil would be allowed to rise by $1 per barrel as of January 1, 1978.
To return to the tax itself, it was first imposed under the provisions of the Excise Tax Act and became effective October 1, 1973. During October and November the tax was set at 40 cents per barrel. It was raised to $1.90 in December, $2.20 in January, 1974, and finally to $6.40 per barrel for the months of February and March, 1974.
It is interesting to note that at that stage the flat rate applied to all crude oils and condensates, regardless of gravity. Although easy to calculate, this had undesirable effects in that it overpriced the heavy crude oils on the export market.
The oil export tax was formalized under the Oil Export Tax Act which was assented to on January 14, 1974. The Oil Export Tax Act was later replaced by the Petroleum Administration Act which became effective April 1, 1974. The latter act remains effective to this date. Over the years the tax itself has become more complex, with different tax rates applying to diffirent classes of oil.
If we assume that our claim applies only to the first six months, we will then not be overly interested in the fact that there are presently eight different classes of oil, each with its own tax level. I mention this only in support of my earlier contention that it would be difficult to place a monetary value on the long-term application of the oil export tax. At present, oil produced from Indian reserves comes under several different classifications.
Tables are availablee showing the oil export tax levels that have been established from time to time since the tax was established. I do not propose to attempt to produce such a table at this particular time. However, I will comment that there have been about 45 changes to the tax for light and medium grade crude oils since the end of the first six-month period. During that time the tax on that particular class or grade has varied from a low of $3.20 to a high of $5.60 per barrel.
If anyone is tempted to do a few mental calculations, let me caution that the level of oil export over the period has varied considerably. Further, it must be remembered that my government has had the policy of gradually reducing the amount of oil that is permitted to be exported.
Hon. members may recall that, when the tax was initiated, there was considerable opposition by the oil producing prov-
April 10, 1978

inces, particularly those with appreciable oil exports. The oil producing provinces contended that the price of Canadian oil-sometimes referred as domestic oil-had been frozen at an unrealistically low level.
This, of course, meant that the provinces received lower revenues for their provincial royalty share. It also meant that oil and gas exploration was less attractive to the industry than would have been the case if the price had been allowed to seek the level of the international oil price. This in turn meant that the provinces received less revenues in bonuses from the sale of oil and gas rights. At that time several provinces considered the possibility of forming marketing boards, with the idea of exporting in the name of the provincial Crown to avoid payment of the tax or, conversely, to sell as much oil as possible on the export market at the international price.
After several federal-provincial conferences it was agreed that the federal government would return to the producing provinces, in direct proportion to production, half of the tax revenues collected during the first six months. Part of the agreement relating to the disposition of the tax moneys collected during the first six month period was an undertaking by the federal government to invest the money collected during the first four months in energy-related projects within the provinces concerned.
Later the federal government decided that the commitments to the Syncrude development at Fort McMurray satisfied its commitments respecting investments in Alberta.
Part of the agreement also included the fact that domestic, or Canadian, prices would be increased in accordance with a given formula or as re-negotiated between Canada and the provinces from time to time. The tax revenues collected during the last two months of the first period and all future tax revenues were dedicated to the equalization of the cost of the oil to the consumer in eastern provinces where most of the oil used is imported at international prices.
It must be realized that largely as a result of increased Indian royalty rates initiated in 1974 as well as increased oil and gas prices, the current revenues to Indian people are in the order of ten to 15 times those received in 1973. Nevertheless, the Indian people and their advisers at that time were very much aware of the effects of the price freeze and the oil export tax on their revenues, resulting not only from production royalties but also from the sale of exploration rights.
Questions were immediately raised by the Indian bands, particularly the oil-producing bands. The natural gas producing bands were not yet aware of the condensate situation. However, concern was expressed as to the possibility of a parallel gas export tax as well as lower revenues, since gas prices were also being kept lower than would have been the case if the oil price had been set at a higher level. I
I have been talking about the concern of the Indian bands. Perhaps it is time to give a few details as to how many bands benefit from their oil and gas resources.
Oil Tax


Mr. Deputy Speaker:: Order, please. I have to interrupt the hon. member because his time has expired. If he wishes to continue, he will need unanimous consent.


Steve Eugene Paproski: Question.


Mr. Deputy Speaker:: Is the House ready for the question?


Mr. Maurice Foster (Algoma):: Mr. Speaker, I would like to add a few words to this debate. The hon. member has suggested that the oil export tax, as implemented in 1973 to avoid windfall profits for oil companies, be turned over to Indian bands as a result of settlements on treaty obligations. I think we must realize that as it operates today the export charge is used to compensate for the very expensive oil coming in from the Middle East, Saudi Arabia, Venezuela and other offshore points, and to bring the price down to a Canadian administered price, which is some $3 below the world price. There is not in fact a kitty or a build up of revenues for the government.
According to reports to the Standing Committee on National Resources and Public Works, the revenues derived from the export charge and the excise tax of ten cents, which was implemented, I believe, in 1974, roughly balance the oil compensation program which has been so beneficial to eastern Canada right from Cornwall, Ottawa and the Ottawa Valley to Quebec and all the maritime provinces. Literally hundreds of millions of dollars have been paid in compensation to have that offshore oil reduced from the world price down to the Canadian domestic administered price.
The price of oil shot up rapidly in the fall of 1973 and 1974 as a result of the OPEC cartel. However, it firmed down and we were able to maintain the price. At that time half of the revenues which the federal government imposed and received were returned to the provinces. Thus, the obvious question would be whether the hon. member is referring to returning all the funds to Indian bands in the west where the oil is produced, or just the federal portion of it.
Most people do not fully realize the value of oil export tax funds for energy purposes. The fund is being utilized by Alberta and all of Canada for research into various projects. The agreement was approximately $100 million. It is a very significant amount of money which is being utilized for research and development. Surely there is a great deal to be done in that regard.
If we refer to enhanced recovery from the producing fields, a great deal of research and development must be carried out in that regard in order to increase the fairly small amount of oil which can be extracted in western Canada. The Syncrude project is a full scale research and production project. Even though it is a production model research facility, it will make a very significant contribution to Canadian energy supplies, approximately 125,000 barrels of oil a day. The federal government, as well as the governments of Alberta and Ontario, ought to be congratulated for the $600 million of equity which

April 10, 1978
Oil Tax
they have invested in that. Even though it is a production scale research project, it will pay off handsomely to the government. The information given before the Standing Committee on National Resources and Public Works by officials of the Department of Energy, Mines and Resources indicated that some 77 per cent of the gross revenues from the Syncrude project over its lifetime will accrue to the governments of Canada. We are not talking about a provincial oil field, nor a technique regarding the production of oil which has been completely proven.
The Sunoco project at the great Canadian oil sands produces 45,000 or 50,000 barrels a day. It is my understanding that that type of project would not meet all the environmental requirements of a new plant. The Syncrude project will come on stream this spring and will make a significant contribution to our oil supplies. Our governments have invested 30 per cent of the equity. Alberta has the right to increase the equity in the plant to 50 to 55 per cent. At the same time, 70 per cent of the revenues from the Syncrude plant will flow back to the governments. Three levels of government-two provincial and one federal-are investing together in a massive full-scale production and research facility. This facility will provide excellent returns. Elopefully Alberta will use successfully the $100 million of export revenue tax provided by the federal government. As well the government of Alberta has received funds from the export tax being pumped into exploration and research in heavy oil. Research must take place. I am not sure whether research in renewable energy will occur; but the problems relating to heavy oils, the tar sands, the environment and the disposal of waste must be looked into.
A great deal of funding has been provided by the federal government to the governments of Alberta and Saskatchewan. That funding can be employed very well in the field of heavy oils, tar sands research, as well as to enhance the recovery from the conventional oil field areas. Without getting into the aspects of transportation systems and renewable energies, there is great scope. The Alberta government is mainly interested in the petro-chemical aspects.
The export charge has been utilized to bring the price of offshore oil coming into Canada down to the Canadian domestic price. When Bill C-19 went before committee, at the time of the Syncrude project, it was explained that they would receive world price for the production of oil. Syncrude is a Canadian project which utilizes Canadian resources. It makes sense to provide the world price, if that project is to be brought on stream this year and to produce 125,000 barrels of high grade crude a day to displace the 125,000 barrels of oil a day which is being imported from Venezuela and the Middle East. We have the advantage of an insignificant outflow of capital from Canada in order to pay for the offshore oil which is coming into Canada. Bill C-19 will provide for that. Initially the estimated cost was ten cents a barrel on all oil sold in Canada. Thus, it is a very small amount at the gas pumps.
If an incentive can be provided for the Syncrude project, perhaps similar incentives could be provided to other tar sand projects in order for them to come on stream in the west. It

seems to me this is one ace in the hole which Canadians have: the tar sands and the heavy oils. The exploration that is taking place in the artic and offshore is significant, but so far has only found gas.


Mr. Deputy Speaker:: Order, please. The hon. member for Fraser Valley East (Mr. Patterson) rises on a point of order.


Mr. Patterson:: Mr. Speaker, I was listening this afternoon to a debate dealing with the Syncrude project. It seems to me this is just a continuation of that debate, interrupted at 5 o'clock to discuss this motion:
That, in the opinion of this House, the government should consider the advisability of taking steps to ensure that the question of repayment of the export tax on oil taken from Indian lands be satisfactorily dealt with.
I do not think we have heard any statement from the hon. member regarding this particular motion.


Maurice Brydon Foster: Mr. Speaker, I thought I made it very clear we were talking about the export charge and that these funds amounting to something like $100 million have been utilized by the federal government for energy research and development in Alberta.
That is a very good example of the kind of thing I could have gone into in considerable detail, but in considering this motion we obviously must realize that the export charge which was levied by the federal government is not just sitting in some bank account. It is being utilized, first of all in research projects such as those in Alberta and Saskatchewan, and more recently the export charge has in fact been used to compensate in respect of oil imported from offshore, reducing it to an administered price in Canada that is significantly below the world price of crude. I did not want to go into too many examples, but rather just sufficient to clarify the point for the hon. member in order that he would appreciate that this is not a separate fund which exists, but are funds that have been utilized to reduce the price of energy in eastern Canada and at the same time conduct the energy research in the province of Alberta which I know is so important to that province and to Canada as a whole. It is extremely important to the Canadian economy and the Canadian energy supply.
I hope I have not taken too much of the hon. member's time, but I thought it worthwhile to explain this in some detail so he would appreciate it.


Mr. Ross Milne (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, the subject matter we are dealing with this afternoon has certainly been the subject of discussion in the past, not only through questions asked in this House, as the proposer said this afternoon, but as well with the present and previous ministers who have had responsibility for the Department of Indian Affairs and Northern Development.
During the remaining minutes this afternoon I might take the opportunity to review some of the aspects of this matter from the point of view of the native people affected by the
April 10, 1978

issue raised. To begin with, I should point out that oil and gas resources underlying nearly all Indian reserves in the four western provinces have been set aside for the individual bands for which the reserves were set aside. There are a few exemptions, but not many.
From time to time most of the reserves in Alberta have received revenues from their oil and gas rights in one form or another. Likewise, quite a number of the British Columbia, Saskatchewan and Manitoba reserves situated in the sedimentary basin have received revenues. In Ontario a number of reserves have received substantial revenues, notwithstanding the complications arising out of the land agreement of 1924.
At present in Alberta there are some 18 bands receiving revenues from production, and 15 other bands that have active oil and gas leases. In Saskatchewan they have two producing bands and a number of other bands with active leases. In Manitoba and British Columbia there are a number of leases, but to date to the best of my knowledge there is no active production.
A few weeks ago at a sale of Indian oil and gas permits and leases, Indian bands in Alberta received over $8 million in bonuses and rents. As I said earlier, the Indian people are very much involved in the oil and gas industry and, in fact, in a number of aspects of that industry.
Immediately after the oil export tax was initiated the Indian people began to ask a number of key questions. They were questions such as these. Should oil produced, both lessee and lessor shares, from under Indian reserves be exempt from the tax under the provisions of the Indian Act? If either or both of the shares should be exempt, would it be possible to have the oil exported to share in the higher price of exported oil? Could Her Majesty-that is the Department of Indian Affairs and Northern Development-form a marketing board to export either the royalty share of oil taken in kind or both the lessee and lessor sharbs, thereby avoiding the tax and obtaining higher prices? Could the Department of Indian Affairs and Northern Development obtain a rebate for the producing bands on an appropriate share of production which might be deemed to have been exported? What could be done to get higher prices for domestic oil? These are all questions that have been brought forward by members in this House, and directly to the department.
In the normal course of events, once oil is placed in a pipeline and it leaves the reserve boundary it loses its identify. In most cases it is impossible to say whether a specific barrel of oil goes to a Canadian consumer or finds its way into the export market. Even if there were some way of identifying the oil that was produced on the reserves and put into the system, we would be left with the problem of why the oil from one reserve should all go to the export market while oil from another reserve should go entirely to the domestic market.
I think it is pretty generally agreed that if Her Majesty, as represented by the Minister of Indian Affairs and Northern Development, attempted to export the oil then Her Majesty, as represented by the Minister of Finance, would try to find a way of making the oil subject to the tax. A somewhat similar
Oil Tax
situation existed when the Department of Finance made royalties payable to the Department of Indian Affairs and Northern Development and the Department of Energy, Mines and Resources subject to a tax ruling related to corporate income tax.
Incidentally, as a result of a submission made by the Department of Indian Affairs and Northern Development on behalf of the Indian people, the lessees of Indian mineral rights were allowed to deduct from income before tax the total royalties paid to Indians. In the case of the provinces and other federal agencies there is a specified maximum limit to the royalty that may be deducted. This has allowed the Indian people to charge higher rates of royalties.
The Indian people supported the provincial point of view that frozen domestic prices for oil were unrealistically low. As in the case of producing provinces, this reduced the revenues to the producing bands. This line of reasoning seemed to have been accepted by the federal government and the consuming provinces when it was agreed that half of the tax revenues collected during the first six months should be returned to the producing provinces.
It seems to have been further confirmed that the tax rebate was based on production and not on the amount of export. If one agrees that the general result of the price freeze and the tax was a loss to the producing province, then the rebate should be based on production. If, on the other hand, it is based on a philosophy related to export of oil, then the rebate should be based on the amount of export rather than on production. Since we have assumed the same percentage of export from all the Indian reserves except the Saskatchewan reserve, it would not matter whether we used production or export figures.
Unfortunately, neither the Indian people nor officials of my department were involved in the federal-provincial negotiations leading to the splitting of tax revenues or the setting of future oil prices. Prior to the promulgation of the Oil Export Tax Act, representatives of some of the producing bands had attended meetings in Ottawa with officials of my department and the Department of Energy, Mines and Resources. Letters were written at that time to request that the Indian interest should be considered. Realistically, one should not be surprised that the Indian point of view might not have been properly considered. Although the Indian oil production is important to them, it represents only about 3 per cent of the production for the province of Alberta.
The Indian people and my deparmental officers were involved in a number of meetings respecting the oil export tax. There were two more significant meetings. On January 8, 1974 a large delegation met with the assistant deputy minister of Indian and Eskimo affairs in Ottawa. In addition to departmental staff and legal advisers, others attending the meeting included a band lawyer, an independent consultant, advisers of the Department of Energy, Mines and Resources and advisers of the Department of Justice.

April 10, 1978
Oil Tax
On September 8 and 9 the Hobbema Four Bands convened a meeting of all producing bands at Hobbema. A committee was formed and it was decided that all producing bands should be canvassed with a view to making a united claim and co-ordinating their points of view. A proposed band council resolution was drafted for circulation. This resolution requested return of the tax collected during the first six month period. It further requested that the rebate totals previously presented to the minister in this discussion should be used. The other major point related to the fact that the bands requested that the money be placed in their capital accounts, and agreed that all money would be used for the betterment of the band community.
I am advised that all except one band signed the resolution. The one remaining band was late in meeting the deadline set by the committee and as a result made a separate submission through their own lawyer. The figures for this band, the Stoney Indian Band, are included in the totals presented here today.
During the latter part of 1973 and 1974 there were a large number of meetings involving Indian oil and gas matters. At that time, we were discussing with Indian people the establishment of a new royalty rate, new Indian oil and gas regulations and the need for an act of parliament to permit changes to royalty rates applying to existing leases. These discussions gave rise to changes to the land and gas royalty scales and to passage of the Indian Oil and Gas Act. Discussions at the various meetings invariably included the oil export tax situation.
I briefly mentioned that the Indians of Alberta, largely through the work of the Hobbema Four Bands and the Enoch Band, presented a claim to the Alberta government for a return of the "provincial share". A formal meeting was held in Edmonton in the legislative building on February 12, 1975. The figures presented to the Alberta government at that meeting are the same as quoted by me earlier today. Representing Alberta were Mr. Dickie, the minister of mines and minerals, and Mr. Adair, minister without portfolio.
The Alberta government at that time indicated in writing that they were sympathetic to the claim and that they would follow the federal lead. Informal conversations since that time would indicate that the province would probably still be agreeable to returning the money if, indeed, the federal government returned its share.
As I mentioned earlier, no representation has been made to the Saskatchewan government as a result of the small size of the claim. The band council of the only band concerned has been consulted, and the chief has attended some of the meetings wherein the tax was discussed. If rebates are received from the federal government and Alberta, we would then bring the matter to the attention of Saskatchewan, and treat the matter there the same as in the resolution for Alberta.
The Indian Association of Alberta under Mr. Cardinal, the president of the association at that time, and the producing bands did not see eye to eye in the claim, and this probably resulted in a lack of mutual support. The association president

felt that half of the tax rebate should be dedicated to producing bands and half to a general economic development fund to be used for all Alberta bands. The producing bands argued that since oil and gas are depleting, non-renewable resources, the bands should make the best use of them while available. After all, other bands do not share their assets.
Mr. Joe Dion, the current president of the Indian Association of Alberta, has given his total and unqualified support for return of the tax money directly to the bands concerned. He and his legal advisers are actively working for the early settlement of the problem on the federal and provincial levels. As a matter of fact, Mr. Speaker, it was only days after the appointment of the present minister and the present parliamentary secretary that Mr. Dion came to Ottawa to meet with us and to talk about a number of concerns, the first and foremost of which was this whole question.
The present Indian affairs minister, as well as his three immediate predecessors, have all given moral support to the claim. They have all taken the view that there is no legal claim to the tax as it exists today. On the other hand, they have seen some justification for a moral claim on the basis that the tax moneys should not have been returned to the provinces. In view of the large number of reserves involved, it would be difficult to attempt to invest the federal share in energy related projects in each of the reserves to the amount of the claim by each band. The only practical solution would be to return the money.
This, finally, leaves me to deal with the contention of some people that the Indians already receive favourable tax concessions and that the tax rebate is inequitable in that it would be made to "wealthy" bands. To these people I would offer the following comments. First, we are dealing here with nonrenewable resources and some of the bands concerned will have their oil and gas pools depleted in the near future. Second, when bands receive large revenues from any source, the department exercises considerable discretion in responding to requests for grants, loans, etc. Third, bands use their capital moneys, such as bonuses and royalties, for capital development on the reserve-the cost of which otherwise would be paid out of general public funds. Fourth, bands use revenue moneys such as rents for general purposes that also offset funds normally received from public funds. Fifth, when bands decide to distribute some of the capital moneys on a per capita basis, the welfare authorities apply rigid "means test" principles in welfare applications. Finally, the provinces and Canadians as a whole benefit from the infrastructure and spin-off effects of oil and gas developments on reserves.


Mr. Deputy Speaker:: Order, please. It being six o'clock, the hour provided for the consideration of private members' business has now expired. I do now leave the Chair until eight o'clock, at which time, if I may remind hon. members, there will be consideration of the ways and means motion by the Minister of Finance (Mr. Chretien).
At six o'clock the House took recess.
April 10, 1978


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


Hon. Jean Chretien (Minister of Finance) moved:: That this House approves the budgetary policy of the government.
He said: Mr. Speaker, the purpose of my budget tonight is to take positive and responsible action to deal with the problems which face the Canadian economy in a very troubled world. These problems are complex and difficult. We are being held back by serious unemployment and inflation, and we must do all we can to deal with them. But we also face longer-term problems and opportunities calling for structural adjustment in many industries, sectors and policies. These were the challenges brought out very clearly by the recent Conference of First Ministers.
In the past days and weeks I have sought the advice of many individual Canadians. I have spoken to all provincial finance ministers. I have benefitted from vigorous public discussion of our economy. My cabinet colleagues and 1 have considered briefs from groups large and small, national and regional.
Many of the suggestions made to me for this budget would be popular politically but unwise economically. I will not follow such suggestions. I believe this is time for Canada to face our problems critically and realistically. If we do, we can turn the tide against inflation and unemployment. The measures of this budget should secure and reinforce the progress we have already made.
It is now clear that many of our current difficulties have their roots in the period of extraordinary growth Canada experienced between the mid-1960s and the mid-1970s. With the great advantage of hindsight, we can see that we did not always use our good fortune wisely.
Our economy boomed. The world environment was good to us. Canadians enjoyed a very large increase in their standard of living.
But we all came to expect too much of the economy. Governments increased their spending too quickly. The money supply was increased too fast.
Too much was asked and given at the wage bargaining table. Other forms of income also rose too rapidly. Too little
The Budget-Hon. Jean Chretien
attention was paid to the long-run efficiency of the Canadian economy, and its ability to compete.
And so Canadians were not well prepared to deal with the shocks of the early 1970s. Sharp increases in the price of oil, food and other major world commodities speeded up our inflationary spiral.
World recession arrived and compounded our loss of competitiveness. A large deficit opened up in our balance of payments. Our growth slowed down. The loss of sales meant the loss of jobs.
At the same time, we experienced more conflict and confrontation in Canada. Conflict between the provinces and Ottawa. Conflict between separatist and federalist forces. Conflict between employers and employees. All of these things breed uncertainty and weaken the economy.

The Signs of Progress
By the fall of 1975 it was clear that strong economic action had to be taken. The anti-inflation program launched at that time has made a major contribution in turning our situation around.
The expenditures of all levels of government in Canada have since been brought under better control. In our own case we have cut back the growth in our total outlays from 26 per cent in 1974-75 to 18 per cent in 1975-76 to 10 per cent or less since then.
The Bank of Canada has brought down the rate of increase of the money supply in line with its announced targets for continued growth and declining inflation.
Wage increases have returned to more realistic levels. New settlements came down from 17 per cent in 1975 to 10 per cent in 1976 and under 8 per cent in 1977. They are now down to the guideline of 6 per cent.
The underlying rate of inflation has also been reduced. We can see this in the trend of non-food prices which has been improving steadily. Another indication is the fact that the average price of all the goods and services which Canada produces rose only by 6.5 per cent last year, compared with 9.5 per cent in 1976 and 11.2 per cent in 1975.
The controls program has played a key role in these developments. Controls over prices and incomes cannot succeed unless they are supported by the right setting of fiscal and monetary policy. But the underlying rate of inflation would not have been brought down so quickly without the controls. Without their help, we would have had less growth and more unemployment.
Given the erosion that our competitive position suffered over several years, it was inevitable that an adjustment of the exchange rate would be required sooner or later. That adjustment has taken place in several stages. The government has permitted it to occur by allowing the exchange value of the

April 10, 1978
The Budget-Hon. Jean Chretien Canadian dollar to move in response to changes in the balance of supply and demand in the foreign exchange market. That continues to be our policy.
It also continues to be our policy to intervene directly in the market to moderate short-term fluctuations in the rate of exchange. This intervention dampens the more erratic shortterm movements. It also provides resistance to appreciable movements of the rate in either direction. The intervention does not prevent the exchange rate from moving in response to the market situation. It moderates the speed of change.
Such intervention gives rise to changes in Canada's official reserves. In the event of a sustained declining trend in the exchange rate, such as we have been experiencing, the drain on the official reserves can be considerable. In such circumstances it is prudent for the government to replenish the foreign exchange component of reserves by borrowing foreign currency. As hon. members know, we have been following just such a policy.
Changes in the official reserves arising from exchange market interventions reflect the over-all balance in Canada's international payments. When, as at present, we have a deficit in the current account of our balance of international payments, changes in official reserves can be regarded as adjusting the net inflows of capital that finance the current account deficit.
In recent months the net inflow of capital to Canada, particularly that arising from the usual foreign borrowing of Canadian provinces, municipalities and corporations, has been low in relation to the size of the deficit on current transactions in goods and services. For seasonal reasons, this deficit is normally much larger in the first several months of the year than in the other months. In these circumstances the Government of Canada has used exchange reserves to supplement the inflow of capital. The Bank of Canada has raised the bank rate on two recent occasions to encourage Canadian borrowers to raise funds abroad. In summary, it is our policy to undertake such foreign borrowings as are required to replenish our reserves and to provide assurance that the government is in a position to supplement the net inflow of capital to Canada.
With our costs now under better control and a lower exchange rate, we have become more competitive internationally. This has helped us to turn around our trade balance from a deficit of $500 million in 1975 to a surplus of almost $3 billion in 1977.
In other ways, our progress has been no less important, but perhaps harder to measure. Expectations have changed. Hopefully they are more realistic. Some of the divisions in our society have been narrowed or closed.
We have also seen a remarkable improvement in relations between labour and management. In 1976 we lost 11.6 million man-days in strikes. Last year that number fell 70 per cent to only 3.4 million man-days. More important, labour and business are talking to each other about their common problems.
There is also a more effective dialogue among governments and between governments and business, labour and other
[Mr. Chretien.)
groups in our society. It is not a matter of choice whether we pursue this dialogue. We must achieve more agreement on economic issues and find more ways to co-operate, or we cannot get the best out of our economy.

The Challenge of Structural Reform
The federal government discussed co-operation and structural change in the paper entitled Agenda for Co-operation. The first minister's conference was a milestone in federal-provincial relations both in terms of the range of policy agreement and the commitment to structural reform. A comprehensive work program is now underway as a result of the meeting. For example, studies are proceeding with the private sector in 22 manufacturing industry categories. A major effort is underway to cut down the burden of government regulation. Measures have been taken to help arrest and reverse the tourist deficit. Food and agricultural policies are under review. We are looking forward to developing the potential created for our fisheries by the 200-mile limit.
For my part, I can encourage useful structural adjustment as minister responsible for tariffs and tax policy.
Commercial Policy and the Tariff
The multilateral trade negotiations now taking place in Geneva have longer-range potential for the productive sectors of our economy. We are participating actively in the talks, and seeking reductions in both tariff and non-tariff barriers to give us better access for our exports, especially highly processed resources and manufactured goods. We will also be prepared to reduce Canadian tariffs, but only in return for concessions of real value. Canada's development in the 1980s will depend very largely on the ability of our industries to grasp significant new export opportunities and compete more effectively against imports at home. As First Ministers have urged, we will be ready to support the private sector adjustments that will be needed for our success in the trading environment of the decade ahead.
The Geneva talks are moving ahead quickly and we hope for a successful conclusion in the coming months. In the meantime I am not submitting any major amendments to the Customs Tariff. However, I am proposing tonight that most of the temporary tariff reductions introduced in 1973 on a broad range of consumer products be extended for another year beyond their scheduled expiry date of June 30. The extension will contribute, as it has in the past, to our efforts to minimize inflation.
I am also proposing to withdraw the British Preferential rate from certain goods imported from Britain and Ireland, including certain diesel engines, radio and television apparatus, truck-mounted cranes, knitted goods and confectionery products.
April 10, 1978

To assist Canadian producers, increases in the MFN rates are being proposed for certain chemicals and industrial tires and tubes.
I have received a number of inquiries about implementation of the Tariff Boards's proposals for changes in the tariffs on fruits and vegetables. We have notified our trading partners that we intend to renegotiate certain GATT commitments which currently prevent us from increasing existing rates of duty on products covered by the Board's report. The government will try to conclude these negotiations as soon as possible and then introduce legislation to provide for a new schedule of rates for fresh and processed fruits and vegetables.

The Tax Structure
Our tax system is another instrument which can support innovation and change. I want to proceed immediately with major structural changes in three areas of industrial policy highlighted by First Ministers. They are research and development, transportation and energy.
Research and Development
We must continue to encourage Canada's research and development efforts. An adequate level of R&D is crucial to achieve gains in productivity and to strengthen Canada's position in an increasingly competitive world. At present, corporations are allowed to write off immediately 100 per cent of all R&D capital and operating expenditures. Last year these outlays also became eligible for the federal investment tax credit of from 5 to 10 per cent. In many cases they also qualify for direct assistance under significant federal grant programs.
I now propose that for 10 years starting tonight, taxpayers be allowed to deduct from their income a further 50 per cent of additional R&D expenditures. The deduction will apply to both current and capital expenditures to the extent that they exceed the average amount over the preceding three years. This means that there will now be a special incentive for companies to expand their R&D. I want to emphasize that this special allowance comes on top of the incentives already in place.
The new allowance will make Canada's tax treatment of research and development one of the most generous in the world. The after-tax cost to companies of one dollar's worth of additional expenditure will be reduced to as little as 20 cents. I hope this incentive will lead to significant improvements in R&D performance by the private sector. And I look to companies to ensure that the resulting new technology is used within Canada to create new jobs.
Railway Investments
Discussions at the First Ministers' conference underlined the importance of transportation for industrial and regional development in Canada. Railways continue to be a crucially important mode of transportation, particulary for long hauls and heavy commodities. Recently, the government has
The Budget-Hon. Jean Chretien announced significant changes in the organization of the CNR to improve the efficiency of its operations. Measures were introduced in the last budget to encourage track and grading investments by railways. Looking to the medium term, major new investments are needed in this sector if efficiency and productivity gains are to be captured.
I am therefore proposing a significant increase in the capital cost allowance for railway investments. This will take the form of an additional depreciation allowance of 6 per cent per year for five years for most capital expenditures of a railway. It will apply to investments undertaken after tonight and before 1983. The measure will help improve the railway system in all regions of Canada and will be of benefit to suppliers of railway equipment.
Energy Development Incentives
We must also continue to place high priority on our national energy policy, and in particular the need to extend self-reliance for oil and gas. We are fortunate in our existing and potential resources, and many tax incentives and other measures have been put in place to encourage their development. But increasing attention is now focussed upon the heavy oil reserves and oil sands deposits of the western provinces which can be tapped only by advanced technology and multi-billion dollar investments. These are projects requiring long lead times for planning, organization, design and construction. It is important to get them moving now, and I have concluded that some modification and clarification of their tax treatment can be helpful in that regard.
First, I want to make clear that the up-grading plants to process the heavy oil produced from wells into a type of oil similar to conventional crude will be treated as a manufacturing facility, eligible for fast write-offs and the reduced tax rate.
Second, it will be important to extract as much oil as technologically possible from all deposits. It has already been established that enhanced recovery systems can greatly increase total production. After today, therefore, special machinery, equipment and other facilities acquired for enhanced recovery systems-specifically, so-called "tertiary" recovery- will be able to earn depletion at a rate of $1 for every $2 of expenditure as compared to the normal earning rate of $1 for $3.
Finally, earned depletion may be applied at present only to reduce taxable resource profits, and only up to a ceiling of 25 per cent. This provision will be significantly improved. Effective immediately, corporations may deduct depletion earned through certain qualifying investment in non-conventional oil projects up to the extent of 50 per cent of total income-both resource and other profits. The qualifying investment will include expenditures on tertiary recovery equipment and certain depreciable property acquired for use in a bituminous sands mining project.
I am confident that these measures, added to the ones already in place, will in future years help reduce our dependence on imported oil, especially in eastern Canada.

April 10, 1978
The Budget-Hon. Jean Chretien
I would like also to say a word about the mining industry. The First Minister's conference directed Finance and Resource Ministers to undertake an early review of the taxation of the mineral industry. The government is proceeding with its review and looks forward to further consultation with the provinces in the near future.
Retirement Income
Almost two million Canadians have Registered Retirement Savings Plans, enabling them to set aside funds to provide income after retirement. The wide range of choice allowed in setting up these plans and the generous tax treatment for contributions have made them very popular.
I have some concern, however, over the limited choice available to RRSP holders when the time comes to turn their savings into retirement income. A taxpayer is now required to invest his RRSP proceeds in a life annuity with an insurance company prior to his 71st birthday. The only alternative he has is to withdraw the funds in a lump sum and pay income tax on this amount in the same year.
I propose to introduce two additional alternatives that will increase flexibility while retaining the basic principle that RRSP funds are intended to be used for retirement income.
The First alternative will allow the purchase of a fixed-term annuity to provide benefits to age 90.
The second alternative will allow the taxpayer to have his RRSP savings placed in a new kind of investment vehicle to be known as a Registered Retirement Income Fund. Each year a set fraction of the total assets in the Fund-capital plus accumulated investment earnings-will be withdrawn and taken into income. This fraction will be determined by a formula designed to provide benefits to age 90. Payments would grow over time at a rate reflecting the investment performance of the Fund and thus provide a degree of protection against future inflation. There will be provisions enabling a taxpayer to manage his investments in much the same way as he can now with a self-administered RRSP.
Institutions with the right to issue RRSPs will be permitted to sell fixed term annuities or retirement income funds. At present this includes mainly life insurance and trust companies.
The transfer of an RRSP into any of the retirement income options must occur between age 60 and age 71.
I am confident that the added alternatives will provide the range of choice that taxpayers desire in planning for retirement. They respond to concerns expressed to me by many Canadians.
Family Law Reform
A number of provinces have introduced fundamental changes in the laws relating to the division of certain properties between marriage partners. These changes in law raise a number of important issues which are far from being resolved. Because they affect several provisions of the Income Tax Act,

I am monitoring the developments in this area very closely. In the meantime, I am proposing a change in the provisions so that transfers of property between spouses pursuant to provincial family laws will not give rise to taxable capital gains.
The Ways and Means Motion contains several other important changes. First, the current provisions which permit the transfer of farm land and buildings by a farmer to his children without payment of capital gains tax will be extended to incorporated family farms. Second, single employees will now receive the same tax exemption as married employees on the value of free board and lodging provided at logging camps and other remote work locations. Third, I am proposing certain tax changes to further promote the production of good Canadian films.
Problems of the Past Year
The structural changes in the economy which these measures will encourage will help us achieve the growth we need over the next four or five years. I have also had to consider what measures would be helpful in dealing with the immediate problems which confront us.

Although the prices of the things we produce continued to slow down last year, the prices of the things we consume have risen more sharply. There were two major factors-higher prices of imported foods and the decline in the exchange rate. I do not believe the price surge will last. I believe the direct impact of our dollar's decline is now largely behind us. Further, an improving supply situation should help to slow the rise in food prices.
The growth of output was disappointing last year. The rate dropped from about 5 per cent in 1976 to 2.6 per cent in 1977, according to the preliminary estimate. The most unfortunate consequence was the rise in unemployment. Unemployment has reached unacceptable levels despite a substantial increase in the number of Canadians who are working. Employment has increased more than 3 per cent in the past year. Almost 300,000 more Canadians are working today than one year ago. But our labour force has also been growing rapidly, much more rapidly than in other countries. Since 1970, our labour force has increased by about 31/2 per cent a year, compared with 2 per cent in the United States and well under 1 per cent in the United Kingdom, France and Japan. In Germany, the labour force has actually dropped over this period.
An important reason for the growth of our labour force has been the growing number of Canadian women who are working. Since 1970 the number of adult women in the labour force has increased from 1.9 million to 2.7 million, a rise of more than 40 per cent. There has also been a surge of young people coming into the labour market. This surge will not last; in many schools, there are now empty desks. But the immediate challenge is to create enough jobs for all our young people. Youth unemployment is one of our most serious problems. It cannot be dealt with only by general economic policies. Our
April 10, 1978

manpower training and direct job creation programs are pointed specifically to this problem.
In 1978-79 a total of $458 million will be spent for the Canada Works, Young Canada Works and other continuing job creation programs. Some of these programs, notably Young Canada Works, Summer Job Corps, Youth Apprenticeship and Job Experience Training are directed exclusively to young people. However, this does not represent our total effort in favour of young people. I must stress that the young also have complete access to our general programs such as Canada Works and the Canada Manpower Training Program where they represent roughly half of the clientele. I estimate our job creation effort for young people under these programs to be over $225 million.
Further, an additional $150 million is being provided for seasonal works projects with a high employment content in high unemployment areas. The new employment credit will directly stimulate private sector employment.
The stimulus will be especially strong for jobs which young people are most likely to fill. We are also making a manpower training investment of the order of $500 million, about half of which is to be spent on youth.
Mr. Speaker, if I may summarize, we are going through a difficult period of adjustment, with some recent factors working against the pace of our recovery. Forecasts for 1978, including my own, have been shaded down. But the recovery is proceeding. Employment is rising. Confidence is improving, although not as quickly as I would like to see. The question now is whether the gradual recovery that has been established should be given an added push from policy. I have decided that it should.
The size of such a push must take into account the forces of expansion that are already in place. Much of the tax action I took last winter has not yet worked through the system. Moreover, the decline in the exchange rate over the past year, by improving the competitiveness of our exports and domestic industry, will have an impact of major dimensions-provided we do not waste it through cost increases. Very large resource projects lie ahead of us. So while further action is desirable, it must be responsible action, and action aimed at the right target.
The Action We Need Now
Any further stimulus should obviously be fast-acting. It should encourage consumer spending, not more spending by government. It should offset some of the temporary factors which are pushing up prices. This is particularly important now, on the eve of the start of decontrol.
A reduction of retail sales taxes fits these requirements best, and has the added advantage of benefitting all those who spend in Canada, even those who do not pay income tax. It will stimulate retail sales and therefore benefit, among others, the many small businessmen in this sector. The idea has been
The Budget-Hon. Jean Chretien advocated widely by economists, business associations and others. Indeed, I made a proposal to the provinces last fall under which the federal government would compensate them for half of the cost of reducing retail sales taxes by two percentage points. Most provinces were unable to accept the proposal at that time in view of their fiscal positions, and 1 therefore proceeded with an income tax cut of up to $100 per person for January and February of this year.
Tonight I want to announce that I have made a broader proposal to my provincial colleagues.
I have offered to compensate them for a reduction of two percentage points in their retail sales taxes for a period of six months. In return, I have asked them to bear the cost of either a further one percentage point for the same period, or an extension of the two-point cut for a further three-month period.
I recognize that the Atlantic Provinces are less able than the other provinces to bear this additional cost. I have therefore offered to compensate them for the full cost of three percentage points for six months.
To focus the tax cut on essential items, the reductions will not apply to amusements, tobacco products and alcoholic beverages for home consumption.
The federal compensation to the provinces will be made in the form of a temporary transfer of $800 million in personal income taxes, with small balancing payments in cash where necessary. Equalization payments will be insulated from the impact of the retail sales tax and the personal income tax changes.
Alberta does not have a sales tax and therefore does not benefit in the same way as the other provinces. However, the fiscal position of Alberta is very strong as a result of its oil and gas revenues and this has permitted significant further cuts in other provincial taxes. The government of Alberta has raised no objection to our proceeding with the proposed arrangement.
Mr. Speaker, this measure can be an outstanding example of federal-provincial fiscal co-ordination and I want to express my deep appreciation of the co-operation I have received from my provincial colleagues. If all provinces accept the federal offer, this will mean a tax cut to the economy of about $1.1 billion. About one-third would be paid for by the stronger provinces, about a third by federal deficit financing, and about a third by a cut in federal expenditures to which I will refer in a moment. The measure will boost real income by holding prices below the level which would otherwise be expected. The impact on the average price level should be about one per cent for the period the cut is in effect. This cut provides a specific incentive to consumers to take advantage of temporarily lower prices. Its impact will be reflected in an early stimulus to retail and wholesale business, a call on output from the production line, and a lowering of tax cost on business.

April 10, 1978
The Budget-Hon. Jean Chretien
With this measure now officially committed in the budget tonight, I am glad to report that I finally contacted all provincial ministers of finance this afternoon and that the four Atlantic provinces-which I will come back to later-Ontario and Manitoba all propose to reduce their retail sales tax rates by three percentage points for six months. The provinces of British Columbia and Saskatchewan propose to apply the federal compensation to a two-point reduction for the first six months and to make their own contributions over subsequent periods.

As for the province of Quebec, it is still studying the federal offer. I asked my Quebec colleague to let me know his decision in the next few days and he has agreed to do so.

Under these cooperative arrangements, provincial governments respectively will take steps to reduce retail sales taxes from 11 per cent to 8 per cent in Newfoundland; from 8 per cent to 5 per cent in New Brunswick, Nova Scotia and Prince Edward Island; from 7 per cent to 4 per cent in Ontario; from 7 per cent to 5 per cent in British Columbia; from 5 per cent to 2 per cent in Manitoba; and from 5 per cent to 3 per cent in Saskatchewan.
Fiscal Position and Outlook
Mr. Speaker, I would like now to table the Notice of Ways and Means Motion, projections of the government's revenues and expenditures, and supplementary information outlining details of the measures proposed tonight. This material also provides background to the tables on the government's accounts and information on the relation between domestic borrowing, foreign borrowing and our financial requirements.
I would also like to ask for the consent of the House to include in Hansard the usual tables on the government's accounts together with the usual notes.


Mr. Speaker:: The minister has the right to table documents but needs the consent of the House to include them in Hansard as if they were printed as part of Hansard. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.
[Editor's Note: For notices of ways and means motions and tables referred to above, see appendix.]


Joseph Jacques Jean Chrétien: On the basis of close to final information, financial requirements excluding foreign exchange transactions totalled $8.5 billion in 1977-78. This is $300 million less than I forecast recently, mainly because it now appears likely that our total outlays were $200 million below the budgeted amounts, and I would like to thank the President of the Treasury Board (Mr. Andras) for that.
[ Translation]
For 1978-79, we have reduced our expenditure ceilings by $350 million below the total announced by the President of the
[Mr. Chretien.)
Treasury Board when he tabled the main estimates. This will require very tight control over spending under existing programs and over the introduction of new programs. Taking last year together, our financial requirements will be $550 million lower than they would otherwise have been as a result of these expenditure savings.
Taking into account the measures announced tonight, which will reduce revenues for this year by some $900 million, I now expect 1978-79 financial requirements to total about $9.5 billion if one excludes the $2 billion of accrued interest on Canada Savings Bonds which will be encashed this year. While the total requirement of $11.5 billion is large, I am confident it can be financed without creating undue pressures on markets, particularly in light of our very large cash balances at the present time.
The revenue side of the 1978-79 fiscal outlook is based on a forecast increase in total ouptput in current dollars of about 11 per cent.
I expect about 6 per cent of this increase to consist of price changes, as measured by the price index of total gross national expenditure, and close to 5 per cent of growth in real output. This rate of real growth should bring about some modest decline in unemployment. Whether we in fact obtain as much output growth and as little price increase will be influenced by wage and price behaviour in the decontrol period, as well as by international developments. The increase in the consumer price index is likely to be about 7 per cent because it includes import prices which are directly affected by higher food prices and the decline in the exchange rate.

Conclusion
In summary, this budget is aimed at creating the proper conditions for a strong and prosperous economy. In conjunction with the provinces, in the short term I have taken steps to increase consumer demand and to lower consumer prices; in the medium term, I have put into place tax changes designed to meet some of the major challenges of the future-in energy, transportation and research and development. In doing these things, my objective has been to strengthen the private sector without government interference.
Mr. Speaker, I am convinced that Canada has a potential for economic growth and higher living standards second to none in the world. We have the skills, the natural resources and the proven ability to work together in solving our problems.
To translate promise into reality we must meet certain conditions.
First and foremost, we must keep Canada united.
Second, we must carry through structural reforms in the Canadian economy to make it more efficient and competitive.
Eh
April 10, 1978

Third, we must restore reasonable cost and price stability. The experience of recent years has made it very clear that inflation is the enemy of growth, because it weakens consumer and business confidence and erodes our ability to compete in world markets.
Individual Canadians must accept the need to be reasonable in their wage and salary demands at a time when the issue for more than a million Canadians is not getting a pay increase but getting a job. There will be times when we will have to pay more for some of the things we buy without expecting any offsetting increase in our incomes. It is futile and damaging to try to compensate ourselves for the higher costs of imported goods.
I look to the business community to explore markets aggressively and demonstrate the faith in Canada that is merited by its great material and human resources and its sound institutions.
Governments must pursue with discipline the policies that will encourage as much growth as possible at declining rates of inflation. We shall continue to restrict the growth of our own spending to less than the trend growth of the gross national product. In doing so, we will continue to pursue greater efficiency in government. In setting the wages and salaries of our own employees, we will follow-not lead-the private sector.
If we all play our part, we can advance into the 1980s with rising investment, declining unemployment, an improving balance of payments and strong growth in all parts of this country.
There is only one way to get out of our difficulties and that is for all Canadians to apply themselves diligently to build a better future for our children and our grandchildren. It is through hard work, imagination, determination and discipline that we will succeed.
Tonight, despite the prospect of an early election, I have refused to make iresponsible promises to the people of Canada because I respect the intelligence of those who will be choosing the next government. The theme of the budget which I have brought down tonight is responsibility, and responsibility is what Canadians deserve.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, as hon. members of the House know, this is the first budget brought in by this Minister of Finance (Mr. Chretien). The minister has been in office for seven months, and frankly I believe most feel that we were entitled to a better effort tonight than we have just received.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: I sincerely hope that this minister will be a little better at skate boarding than he has been in preparing a budget, or he is going to damage himself very cruelly. Let us face it, this budget tonight is another example of the half measures that this government has been offering to the
The Budget-Mr. Stevens
Canadian public for ten years, half measures which have caused the number of unemployed in this country to rise from 375,000 to over one million today and caused inflation to more than double in the ten years that the Prime Minister (Mr. Trudeau) has led this country. I say "half measures" because if we add up the total revenue stimulant offered by this minister to trigger the proper reaction in the Canadian economy at the present time, it totals $900 million. That figure is not half of what is needed to trigger our economy into the exciting growth that Canadians frankly deserve from any government that wishes to lead them to the prosperity v/hich can be theirs.
We have said that we believe in one form of tax cut or another designed to trigger consumer confidence and consumer buying again in Canada. At least this government should be willing to give up $2.2 billion.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: When I say "$2.2 billion", it is because we can pinpoint enough fact, as well as sloth on the part of this government, to save well over $2 billion for the Canadian public. I do not know how the minister could read those words into the record with a straight face, namely that he has been following a policy of restraint.
1 refer hon. members to the budget given by the previous minister of finance, Mr. Macdonald, in this House on March 31, 1977, at which time he indicated that for fiscal 1978 the total spending, as far as his estimate was concerned, would be $41,900 million. Tonight we learned that estimate was $1.1 billion out of whack alone.


Robert Knight Andras: That is absolutely incorrect, absolutely inaccurate.


Sinclair McKnight Stevens: Mr. Speaker, the President of the Treasury Board (Mr. Andras) says "incorrect". I would recommend that right now he pull out the March 31 budget of Donald Macdonald where he will see the figure in Table 1.
One of the serious problems of this country today is that this government does not believe the facts. We have a budget tonight full of half measures. Frankly, I believe the government has become an administration full of half measures.
We recall that on October 20 the concept of an employment tax credit was announced. We gave support to that concept in the earnest hope that it might get some Canadians back to work who otherwise would not be gainfully employed. We supported it and gave it one day passage in this House. What has happened since? It now turns out that the government proposes to tax back a good proportion of that tax credit. Not only does it propose to tax it back, the program is not completely operational even to this date, April 10, 1978, after being announced on October 20, 1977.
I could also refer to many other things. Most Canadians are humiliated to see our dollar fall and fall in value. Frankly, that dollar would not have fallen as low as it has today had it not

April 10, 1978
The Budget-Mr. Stevens
been for the sheer mismanagement and inept handling of the foreign exchange situation in Canada by this Minister of Finance.
In this regard let me refer to two specific things. When it was clearly understood that the bank rate should be raised one point, this government raised it half a point. As a result this had little effect and the government had to raise it an additional half point, without realizing that in the world of international finance an increase of two one half points within three weeks would undermine confidence as opposed to renewing the confidence of international financiers in the Canadian economy.
In addition, Mr. Speaker, the government went into the international market and borrowed $750 million to help prop up the dollar which the government said was floating. That was at a time when the government was told it should raise at least $1.5 billion to $2 billion. Having followed that half measure this government is now faced with the unique situation of having our dollar fall out of bed, and the government still has to go back to the trough for more money. The government has to go back to that trough now when even more of the confidence once held by those international financiers has been lost.
One of the clear examples of a half measure tonight is the government's approach to the provincial sales tax reduction. This is an example of a good idea. It was a good idea when Darcy McKeough first advanced it in Ontario, and the way he set the mechanism in place was good. He did it at a crucial time in respect of unemployment in Ontario.
What has this minister done? First of all, it has apparently taken him seven months to fiddle around trying to get his plan into position and apparently talk from time to time with the provinces, yet tonight we understand he still has not got it operational in the sense that all provinces have agreed to go along with it. We find it is a program that starts tonight and runs for about six months until October, just before the wintery months when unemployment will begin to soar again. What totally inept handling of the situation.
To go further, Mr. Speaker, what will the effect be? Hopefully it is going to stir up some demand. We have advocated that this approach should be taken, but to put this into a six month time frame ending next October or November will telescope orders into the summer period, and in all likelihood these orders will be filled by plants working over-time during summer months. When we need the orders to alleviate the unemployment situation next winter the money will be gone and the program will be over.
Clearly there was another motive behind the minister's timing tonight in respect of that provincial sales tax reduction and the six month limitation. That motive clearly indicates that, as far as this government is concerned, political expediency comes first and economic reality comes second. In short, one million unemployed Canadians are tonight being sacrificed on the altar of political expediency.

Let me touch briefly on some of the things I think should have been included in this budget tonight. First, we must accept the fact that consumers in Canada have lost confidence. They are no longer willing to purchase to the extent we would like in order to trigger a more buoyant economy. We on this side of the House believe it is a must that those consumers are triggered once again to continue buying as in other years, to ensure that our factories are producing once again and that Canadians are put back to work in factories as they should be. What is contained in this budget tonight will not ignite the Canadian consumer. His confidence must be restored.
Let us think of the infrastructure that is needed in this country. Think of what our fishermen need on the Atlantic and Pacific coasts in order to ensure that they can fish at least up to their allotments. Think of what the grain growers in the Canadian west need to facilitate the delivery of their product. Think of what we need in certain urban areas-Toronto, for example, which is starved for good urban transportation facilities. These infrastructures must be put in place.
I find it difficult to understand why this government should say it has no loan money available for this type of project, but that it has, through the Export Development Corporation, lots of money available to help build pulp and paper plants in Poland, to help Iran with its forestry industry, to give lines of credit to Cuba and to build, if you can imagine, Mr. Speaker, steel factories in New Jersey to help the United States with its unemployment situation there, even though unemployment is lower there than here at home.


Alastair William Gillespie: Jobs for Canadians.


Sinclair McKnight Stevens: Mr. Speaker, the Minister of Energy, Mines and Resources (Mr. Gillespie) in his usual fashion says "jobs for Canadians". Let me suggest to that minister that we should have jobs for Canadians building what Canadians need in Canada.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: The third thing this budget should have done tonight was trigger more productivity among Canadian workers in our plants. We will be enunciating a program to do that, and I sincerely hope it will be embraced by the majority of Canadians. Having witnessed the government's performance and realizing the impact of its ever increasing spending, is it any wonder that our dollar now trades at a 16 per cent discount compared to the US dollar? Is it any wonder that it costs us 60 per cent more to buy a Swiss franc than it did in October, 1975 when the government brought in its so called anti-inflation program? Is it any wonder that it costs us now 42 per cent more to buy the German mark and 51 per cent more to buy the Japanese yen, if we compare today's price with what it was when this Prime Minister brought in his anti-inflation program?
We were told we would have restraint with regard to the public service. When this Prime Minister took office the
April 10, 1978

strength of our public service in Canada was 221,000 and he said he would reduce it. On the last recorded entry, Mr. Speaker, with respect to our total federal civil service, we find that there are 580,000 employees in the federal government.
Let me put it another way: just before the Prime Minister took office there was one federal employee for every 30 taxpayers in this country. Today it is one federal employee for every 15 Canadian taxpayers. If we express it yet another way, Mr. Speaker, in spite of the fact that the taxpayers of this country have increased by only about 50 per cent, the total number in the bureaucracy employed by the federal government has gone up by 155 per cent. That is why it is important to reduce the size of the public service by allowing attrition to take hold.
We believe that it is time to stop filling the vacancies that occur in the public service so that the government may get that service down to a more manageable level. That is why the Conservative party has advanced the idea that it is time to have zero base budgeting and sunset laws in Canada to review various programs.
I have said certain critical things about the budget. I would like hon. members to know that we welcome the 150 per cent increase that has been put into this budget in regard to research and development. Frankly, Mr. Speaker, we are disappointed that the minister did not go further. As the minister probably knows, he has merely brought his government back to the point that the Diefenbaker government already had us in in the 1960s with regard to research and development. The Liberal government cancelled that program in 1965.
We are pleased that the budget now allows the family farm to include corporate family farms where capital gains are concerned. It is a good move, and I am pleased that the government have responded to those requirements. I am also pleased that the registered retirement savings plans have been made a little more flexible to deal with the moneys that people have accumulated in anticipating retirement. Those are good measures.
Generally speaking, we must accept that this budget is a patch up job. The government has taken a line from here and a line from there. Do you know, Mr. Speaker, that the government has even taken a line from Edgar Benson's old budget,
The Budget-Mr. Stevens
and that is going back a few years. In short, this budget tonight is not relevant to the critical economic situation Canada is in today. It has been framed by those whose thinking is rather stale, and who, in fact, have a vested interested in previous mistakes. I do not doubt that within three months this budget will be completely forgotten by all, with the possible exception of those who wrote it.
In considering this budget, let us not forget that it would likely not be before us tonight had it not been at the insistence of Washington. This budget is a necessary preliminary to the filing of a further prospectus in Washington which must reveal the fiscal 1979 figures for this government. In other words, it is not the tragic unemployment situation in Canada that has triggered the budget; it is not our inflation figures, our falling dollar or our lack of real growth. It is simply a budget that has been dictated by Washington to meet the requirements of the Wall Street barons who might be asked to lend further money to this government.
I hope to be given an opportunity, Mr. Speaker, to continue with certain further remarks concerning this budget at a later date. At this point, it can be summed up by simply noting that with the size of the deficit put before the House tonight, the government has revealed that, based on its estimates for the deficit for 1978, it is 43 per cent out. In short, the deficit that we have now as revealed tonight for 1978 is 43 per cent higher than we were led to believe on March 31, 1977. Who could afford such miscalculation?
If I may, Mr. Speaker, I would like at this moment to move, seconded by the hon. member for Halifax (Mr. Stanfield):
That the debate be now adjourned.


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


Some hon. Members:: Agreed.
On motion of Mr. Stevens the debate was adjourned.


Allan Joseph MacEachen: I should like to move:
That this House do now adjourn.


[Stage Direction]
Motion agreed to.
Mr. Speaker:: Accordingly, this House stands adjourned until tomorrow at 2 p.m.
On motion of Mr. MacEachen the House adjourned at 9.19 p.m.

April 10, 1978
Notice of Ways and Means Motion
Income Tax Act
Notice of Ways and Means Motion to Amend the Income Tax Act
Remote work sites	That it is expedient to amend the Income Tax Act and to provide among other things: (1) That for the 1978 and subsequent taxation years, an individual be entitled to exclude from income the value of board and lodging received in respect of employment at a remote work site at which he could not reasonably be expected to maintain a self-contained domestic establishment.
Shareholder loans	(2) That a loan made by a corporation after March 31, 1977 to an employee to enable him to purchase from a related corporation fully paid shares of its capital stock, not be included in income.
Interest on policy loans	(3) That for the 1978 and subsequent taxation years, the rules relating to the deductibility of interest on policy loans made after March 31, 1977 apply to all policy loans.
Additional allowance for scientific research	(4) That for taxation years ending after 1977 and before 1988, in computing its income from a business carried on in Canada, a corporation be permitted to deduct an extra allowance equal to 50% of the amount by which its qualified current and capital expenditures on scientific research in Canada exceed the average of such expenditures made by it during a base period and that for the purposes of the allowance (a)	the base period in respect of a year be the three immediately preceding taxation years or such lesser number of years as ended after 1976, (b)	the deduction for the 1978 taxation year be calculated by reference to the number of days in the year after 1977, and (c)	rules be provided to determine the amount of the deduction where the corporation is a member of an associated group and to recapture an appropriate part of the allowance when a research property is disposed of.
April 10, 1978

1 Family farm j corporations j and partnerships	(5) That where, after April 10, 1978, a taxpayer transfers to his child resident in Canada shares of a qualifying farm corporation or an interest in a qualifying farm partnership, substantially all of the assets of which were used in the business of farming in Canada, any capital gain that would otherwise arise be (a)	deferred, in the case of a transfer on death, and (b)	determined on the basis of the lesser of the proceeds actually received and the fair market value, in the case of an inter-vivos transfer.
Transfers of | property pursuant to provincial legislation	(6) That for the 1978 and subsequent taxation years, the provisions of section 73 of the Act relating to the transfer of property by a taxpayer to hi: spouse be extended to apply to transfers of property under provincial legisla tion relating to marital property.
Agricultural quotas	(7) That the rules in subsection 73(3) of the Act applicable to the inter-vivos transfer of property by a farmer to his child be extended to apply to the transfer after April 10, 1978 of agricultural quotas and other eligible capital property.
Employee 1 loans	(8) That for the 1979 and subsequent taxation years, subsection 80.4(2) of the Act be amended: (a)	to extend the definition of "excluded loan" and "housing loan" to include a loan received by an employee from a person other than his employer, and (b)	to extend the definition of "housing loan" to include a loan made to an employee who has moved from a location outside Canada.
Reduction of capital	(9) That any amount paid by a public corporation after April 10, 1978 as a reduction of paid-up capital in respect of a share of its capital stock be treated as a dividend unless the amount was paid on the redemption or cancellation of the share, on the winding-up of the corporation or in the course of the reorganization of the capital stock of the corporation.
| Non-arm's length sale of shares	(10) That the rules in sections 84.1 and 21 2.1 of the Act be modified to apply to a non-arm's length sale of shares of the capital stock of a corporation after April 10, 1978 to another corporation with which it is connected within the meaning of section 186 of the Act as modified by paragraph (18) of this Motion.
Losses of certain : insurers	(11) That, for the purpose of computing the taxable income of a life insurer for its 1978 and subsequent taxation years, its non-capital loss for the 1977 taxation year be determined as the amount, if any, by which its 1977 carryforward deduction exceeds the aggregate of the amounts referred to in subparagraphs 138(4.2)(a)(i) and (ii) of the Act.
Northwest Territories	(12) That sections 120 and 124 of the Act be amended effective January 1, 1978 to recognize the introduction of an income tax by the Northwest Territories.

April 10, 1978
Abatement for provincial sales tax reduction
Cumulative
deduction
account
Cost basis of life insurance policy
Registered retirement savings plan
Penalties
Part IV tax
Interest on Part X tax
(13)	That for the 1978 taxation year the tax otherwise payable by an individual resident in a prescribed province on December 31, 1978 be reduced by $100.
(14)	That in computing the cumulative deduction account of a Canadian-controlled private corporation, no deduction be made in respect of a dividend paid after April 10, 1978 to another corporation (other than a corporation associated with it) with which it is connected within the meaning of section 186 of the Act as modified by paragraph (18) of this Motion.
(15)	That in computing the adjusted cost basis of a life insurance policy after March 31, 1978, the premium paid on the policy exclude any interest paid before 1978 on a policy loan.
(16)	That after Royal Assent to any measure giving effect to this paragraph,
(a)	a registered retirement savings plan shall mature only after the annuitant attains 60 years of age and before the end of the year in which he attains 71 years of age;
(b)	benefits under a registered retirement savings plan that matures after April 10, 1978, may be received as
(i)	an annuity for life,
(ii)	an annuity for a fixed term equal to the number of years remaining before the annuitant attains the age of 90, or
(iii)	an annuity under a new plan to be known as a registered retirement income fund out of which payments shall be made to the beneficiary in each year equal to the fraction of the value of the property of the fund at the beginning of the year that one year is of the number of years then remaining before the annuitant attains the age of 90; and
(c)	except where the spouse is the beneficiary, benefits pursuant to a registered retirement savings plan shall be required to be commutable at death and the annuitant shall be deemed to have received the value thereof immediately before death.
(17)	That the penalty provided in subsection 163(2) of the Act for a false statement or omission made by a person after April 10, 1978 be calculated by reference to all unreported income or overstated expenses.
(18)	That subparagraph 186(4)(b)(ii) of the Act be deleted with respect to dividends received after April 10, 1978.
(19)	That for the 1972 and subsequent taxation years, interest on the refundable portion of the Part X tax on non-qualified investments of a deferred profit sharing plan not accrue after the plan disposes of the non-qualified investment.

April 10, 1978

Insurers branch tax
(20)	That for the 1978 and subsequent taxation years,
(a)	subsections 219(5) and (6) of the Act be deleted, and
(b)	the rules in subsection 219 (4) of the Act be amended to limit the amount by which a non-resident insurer may reduce its Canadian investment fund by paying the 25% tax to the portion of its surplus that exceeds a minimum required level to be prescribed by regulation.

April 10, 1978
Notice of Ways and Means Motion
Customs Tariff
1. (1) That An Act to amend the Customs Tariff (No. 2), being c. 14 of the Statutes of Canada, 1976-77, be amended, except with respect to tariff items 805-1, 810-1,825, 8901-1,9001-1,9002-1, 32606-1, and 93402-1 listed in subsection 3(1) thereof, by deleting all references in subsections 7(3) and 7(4) thereof to the year 1978 and replacing them with references to the year 1979. 2
(2) That Schedule A to the Customs Tariff be amended by striking out tariff items 805-1,810-1, and 825-1 and the enumerations of goods and the rates of duty set opposite each of those items, and by inserting in Schedule A to the said Act the following items, enumerations of goods and rates of duty:
Rates in Effect Prior to
British Most-	February 20, 1973
Prefer- Favoured-	

Tariff Item	Description	ential Tariff	Nation Tariff	General Tariff	B.P. Tariff	M.F.N. Tariff	General Tariff805-1	Canned pork 	
15 p.c.	15 p.c.	35 p.c.	15 p.c.	25 p.c.	35 p.c.810-1	Canned hams 	
15 p.c.	15 p.c.	35 p.c.	15 p.c.	20 p.c.	35 p.c.825-1	Canned meats, n.o.p	
15 p.c.	15 p.c.	35 p.c.	15 p.c.	20 p.c.	35 p.c.April 10, 1978	COMMONS DEBATES	4329
April 10, 1978
2. That Schedule A to the Customs Tariff be amended by striking out tariff items 2300-1,7802-1,7804-1, 14100-1, 18405-1,40960-1,42701 -1,42815-1,44043-1, 44047-1,44205-1,44533-1,44540-1,56805-1,61810-1,68205-1,85000-1, and 91510-4, and the enumerations of goods and the rates of duty set opposite each of those items, and by inserting in Schedule A to the said Act the following items, enumerations of goods and rates of duty:
Tariff
Item
Rates in Effect Prior to
British Most-	Rates Proposed in this Budget
Prefer- Favoured-	

Description	ential Tariff	Nation Tariff	General Tariff	B.P. Tariff	M.F.N. Tariff	General TariffPreparations of cocoa or chocolate, n.o.p., and confectionery coated with or containing chocolate 	10 p.c.	15 p.c.	35 p.c.	10 p.c.	15 p.c.	35 p.c.
Except that in the case of any such goods that are the growth, produce or manufacture of the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man, or Eire, the Most-Favoured-Nation Tariff applies.
7802-1 Gladiolus corms, n.o.p.
15p.c.	17 1/2p.c. 25 p.c. 15p.c.	17 1/2p.c.	25 p.c.
7804-1 Hydrangeas and other pot-grown plants, n.o.p.; rose stock and other stock for grafting or budding, n.o.p.; bulbs, corms, including gladiolus corms, tubers, rhizomes and dormant roots, n.o.p.; dwarf polyantha rose bushes;
All the foregoing for use by florists or nurserymen for bona fide
forcing purposes or growing on prior to disposal	 Free	Free	20 p.c. Free	Free	20 p.c.
15 p.c.	17 1/2 p.c. 25 p.c.
14100-1 Sugar candy and confectionery, n.o.p., including sweetened gums, candied popcorn, candied nuts, flavouring powders, custard powders, jelly powders, sweetmeats, sweetened breads, cakes, pies, puddings and all other confections containing sugar	
Except that in the case of any such goods that are the growth, produce or manufacture of the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man, or Eire, the Most-Favoured-Nation Tariff applies.
12 1/2 p.c. 20 p.c. 35 p.c. 12 1/2 p.c. 20 p.c. 35 p.c
18405-1 Periodical publications, bound or unbound, printed and issued at regular intervals, not less frequently than four times a year, and
bearing dates of issue	
Free	Free	25 p.c. Free	Free	25 p.cApril 10, 1978	COMMONS DEBATES	4331
Tariff
Item
40960-1
Description
Articles of any material designed to be ejected from aircraft for use as markers in crop spraying or crop dusting operations	
Roofs, chutes, ladders, wall sections with or without doors incorporated therein, materials and parts; all of the foregoing for the construction or repair of silos for storing ensilage	
Articles which otherwise would be classified under tariff item 42700-1, namely: compressor sets, electricity generating sets, fork lift trucks, front-end loaders or tractor shovels, gear reducers, pumps and pump sets, motor operated valves, positive displacement blowers and vacuum pumps, metal working lathes, metal working milling machines, cutting tools for use with metal working machines, articulated folding boom-type cranes designed for mounting on trucks', accessories, attachments and control equipment for use therewith; parts of the foregoing	
Except that in the case of any such goods that are the manufacture of the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man, or Eire, the Most-Favoured-Nation Tariff applies.
Except that in the case of the importation into Canada of any goods enumerated in this item, the Governor in Council on the recommendation of the Minister of Industry, Trade and Commerce may, whenever he considers that it is in the public interest and that the goods are not available from production in Canada, remit the duty specified in this item applicable to the goods, and subsections 17(2), (3), (4), (5) and (8) of the Financial Administration Act apply in the case of a remission granted under this provision.
British
Preferential
Tariff
Free
10 p.c.
2 1/2 p.c.
Most- Favoured- Nation Tariff	Rates in Effect Prior to Rates Proposed in this Budget General B.P. M.F.N. General Tariff Tariff Tariff Tariff
Free	Free 15p.c. 17 1 /2 p.c. 35 p.c.
10 p.c.	25 p.c. 10 p.c. 10 p.c. 25 p.c.
15 p.c.	35 p.c. 2 1/2 p.c. 15 p.c. 35 p.c.
4332__________________________COMMONS DEBATES___________________ April 10, 1978
80033-61V4
Rates in Effect Prior to Rates Proposed in this Budget
Tariff
Item Description
British Most-Prefer- Favoured-ential	Nation	General	B.P.Tariff	Tariff	Tariff	TariffM.F.N.	GeneralTariff	Tariff42815- 1	Diesel and semi-diesel engines, of a class or kind made in Canada,and parts thereof, n.o.p	
Free 15p.c.	30 p.c. Free	15 p.c. 30 p.c.
Except that in the case of any such goods that are the manufacture of the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man, or Eire, the Most-Favoured-Nation Tariff applies.
42816-	1 Diesel and semi-diesel engines, of a class or kind not made in
Canada, and parts thereof', n.o.p	 Free 15 p.c. 30 p.c. Free	15 p.c. 30 p.c.
Aircraft, not including engines, under such regulations as the Minister may prescribe:
44043-1 When of types or sizes not made in Canada	
Free	Free	27 1/2 p.c.	Free	Free	27 1/2 p.c.on and after	July 1, 1973 Free	7 1/2 p.c.	27 1/2 p.c.	Free	7 1/2	p.c. 27 1/2 p.c.
(on and after July 1, 1978)
Aircraft engines, when imported for use in the equipment of aircraft'.
44047-1	When of types or sizes not made	in Canada	
Free	Free	27 1/2	p.c.	Free	Free	27 1/2 p.c.on and after	July 1, 1973	Free	71/2	p.c.	271/2p.c.	Free	7 1/2 p.c.	271/2p.c.
(on and after July 1, 1978)
44205-1 Materials, including all parts, wholly or in chief part of metal, of a class or kind not made in Canada, when imported for use in the manufacture of goods entitled to entry under tariff items 41100-1,	41105-1,	41110-1,	42723-1,	42726-1,	42729-1,42732-1,	42733-1,	42741-1,	42805-1,	42815-1,	42816-1,
42817-1, 44037-1,44040-1, and 44705-1, under such regulations
as the Minister may prescribe	
Free	Free	10 p.c.	Free	Free	10 p.c.April 10, 1978	COMMONS DEBATES	4333
Rates in Effect Prior to
British Most-	Rates Proposed in this Budget
Prefer- Favoured-	

Tariff Item	Description	ential Tariff	Nation Tariff	General Tariff	B.P. Tariff	M.F.N. Tariff	General Tariff44503-1	Parts of electric light fixtures and appliances which would otherwise be classified under tariff item 44500-1, but not including electric cords, plugs, sockets, switches, connectors, high intensity discharge ballasts, or assemblies incorporating any of the foregoing 	15 p.c.	15 p.c.	30 p.c.	17 1/2 p.c.	20 p.c.	30 p.c.44533-1	Radio and television apparatus and parts thereof, n.o.p	Free	15 p.c.	25 p.c.	Free	15 p.c.	25 p.c.
Except that in the case of colour television receiving sets having an overall diagonal measurement across the picture tube of sixteen inches or more that are the manufacture of any country, colony, protectorate or territory to which the benefits of the British Preferential Tariff have been extended, the Most-Favoured-Nation Tariff applies until December 31,1979.
Except that in the case of television apparatus and parts thereof, for use in community antenna television transmission lines, that are the manufacture of the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man, or Eire, the Most-Favoured-Nad on Tariff applies.
44540-1 Loudspeakers; audio-frequency electric amplifiers; parts thereof,
n.o.p	 Free 15p.c.	25 p.c. Free	15p.c.	25 p.c.
Except that in the case of audio-frequency electric amplifiers and parts thereof, for use in community antenna television transmission lines, that are the manufacture of the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man, or Eire, the Most-Favoured-Nation Tariff applies.

4334	COMMONS DEBATES	April 10, 1978
Tariff Item	British Prefer- ential Description Tariff
56805-1	Knitted garments, knitted fabrics and knitted goods, n.o.p	
20 p.c.61810-1	Except that in the case of any such goods that are the manufacture of the United Kingdom of Great Britain and Northern Ireland, the Channel Islands, the Isle of Man, or Eire, the Most-Favoured-Nation Tariff applies. Tires and tubes, wholly or in part of rubber, for equipment of the agricultural implements and agricultural machinery specified in tariff items 40904-1, 40906-1, 40908-1, 40910-1, 40912-1, 40914-1, 40916-1, 40918-1, 40920-1, 40924-1, 40928-1, 40932-1, 40936-1 and the tractors provided for in tariff items 40938-1 and 40940-1 when such tractors are used for farm purposes only 	
F ree68205-1	Articles and materials for use in the manufacture or repair of the goods specified in tariff item 68200-1 	
Free68705-1	Catgut, n.o.p	
Free85001-1	Materials of all kinds for use in producing or manufacturing the products of heading 93811, when imported exclusively for such use, whether or not otherwise enumerated in Schedule A, subject to such regulations as the Minister may prescribe: Other than the following	
Free
Rates in Effect Prior to Rates Proposed in this Budget
Most-Favoured-Nation	General	B.P.Tariff	Tariff	TariffM.F.N.	GeneralTariff	Tariff
27 1/2 p.c. 55 p.c. 20 p.c. 27 1/2 p.c. 55 p.c. or
25 p.c.
Free	Free	Free	Free	FreeFree	Free	Free Various	Free Various	Free VariousFree	Free	15 p.c.	17 1/2 p.c.	25 p.c.Free	Free Free	Free	FreeApril 10, 1978	__________COMMONS DEBATES____________________________4335British Prefer-	Most- Favoured- Nation Tariff	Rates in Effect Prior to Rates Proposed in this Budget	Tariff Item	Description	ential Tariff	General Tariff	B.P. Tariff	M.F.N. Tariff	General Tariff85002-1	2,4 dich/orophenoxyacetic acid, 2 methyl - 4 chlorophenoxy-acetic acid, and their esters and amine salts	10 p.c.	15 p.c.	25 p.c.	Free	Free	Free91510 - Industrial mixtures, including reaction blends, of fatty acids not containing 90 per cent or more by weight of any one acid; acid oils from refining, n.o.p.; industrial mixtures, including reaction blends, of fatty alcohols not containing 90 per cent or more by weight of any one alcohol:	91510-4	Higher fatty alcohols, unsulphated, for use in the manufacture of the goods enumerated in tariff item 93402-1	Free	Free	25 p.c.	Free Free	Free 15 p.c.	25 p.c. 25 p.c.93811 - Chemicals for use exclusively as, and preparations compounded exclusively for use as disinfectants, insecticides, fungicides, herbicides, anti-sprouting products, rodenticides, or otherwise in combatting pests of a plant or animal nature; all the foregoing subject to such regulations as the Minister may prescribe:	93811-3	2,4 dich/orophenoxyacetic acid, 2 methyl - 4 chlorophenoxy-acetic acid, and their esters and amine salts, when in packages exceeding 3 pounds each gross weight	10 p.c.	15 p.c.	25 p.c.	Free	Free	Free
4336__________________________COMMONS DEBATES_________________ April 10, 1978
April 10, 1978

3.	That the Schedule to subsection 3.1(3) of the Customs Tariff be amended by striking out tariff item 52306-1 and the enumeration of goods and the rate of duty set opposite that item, and by inserting in the Schedule to the said subsection the following item, enumeration of goods and rate of duty:
			Rates in Effect Prior to Rates Proposed			
			in this Budget			
General	British	Most-	GeneralPrefer-	Prefer-	Favoured-	Prefer-Tariff	ential	ential	Nation	General	entialItem	Description	Tariff	Tariff	Tariff	Tariff	Tariff52306-1	Industrial shop towels, hemmed but not bleached or dyed except for identification markings, not less than 17 inches nor more than 22 inches in width and not less than 17 inches nor more than 24 inches in length, made from woven fabrics wholly of cotton or of cotton and man-made fibres in yarn counts from 6 to 14, either single-ply or double-ply, and having not less than 20 yarns nor more than 32 yarns per inch in the warp and not less than 20 yarns nor more than 22 yarns per inch in the weft and weighing not less than 4 ounces nor more than 6 ounces per square yard	Free	22 1/2 p.c.	22 1/2 p.c.	35 p.c.	Free22 1/2 p.c.	22 1/2 p.c.	35 p.c.	-
4338_________________________COMMONS DEBATES___________ April 10, 1978
April 10, 1978

4.	That Schedule B to the Customs Tariff be amended by striking out item 97056-1 and the enumeration of goods and the rate of drawback of duty set opposite that item, and by inserting therein the following items, enumerations of goods, and rates of drawback of duty.
Portion of Duty Payable
Item Goods	When Subject to Drawback	as Drawback97012-1 Costumes or parts thereof, designed When for the use of bona fide ethno-cultural groups, who are recognized as or decorated in a manner reflecting a	such pursuant to regulations established	by order	of the Governor inspecific ethno-cultural heritage.	Council,	and who require such costumes	for the public manifestation oftheir ethno-cultural heritage, under such regulations as the Minister may prescribe	
pc
Any goods which are sold or otherwise disposed of within twelve months after drawback has been claimed under this item are subject to the duties otherwise prescribed.
97056-1 Materials, including all parts, wholly When used in the manufacture of goods entitled to entry under tariff items or in chief part of metal, of a class or	41 100-1,	41105-1, 41110-1, 42723-1,	42726-1,	42729-1, 42732-1kind not made in Canada.	42733-1,	42741-1, 42805-1, 42815-1,	42816-1,	42817-1, 44037-l!44040-1 and 44705-1	
99 d r
4340________________________ COMMONS DEBATES_____________________ April 10, 1978
April 10, 1978

5.	That any enactment founded upon subparagraph 1 (2) of this motion shall be deemed to have come into force on the 1st day of July 1978, and to have applied to all goods mentioned in the said paragraph imported or taken out of warehouse for consumption on or after that day, and to have applied to goods previously imported for which no entry for consumption was made before that day.
6.	That any enactment founded upon subparagraph 1(1) and paragraphs 2, 3 and 4 of this motion shall be deemed to have come into force on the 11th day of April, 1978, and to have applied to all goods mentioned in the said paragraphs imported or taken out of warehouse for consumption on or after that day, and to have applied to goods previously imported for which no entry for consumption was made before that day.
7.	That any enactment founded upon subparagraph 1 (2) of this motion shall expire on the 30th day of June, 1979, and all rates of customs duty established by such enactment shall be deemed to be restored on the expiration thereof to the rates that were in effect immediately prior to the 20th day of February, 1973, and such restored rates shall thereupon, subject to the Customs Tariff, apply after the 30th day of June, 1979, as they applied immediately before the 20th day of February, 1973.
8.	That where, as a result of an amendment made to Schedule A to the Customs Tariff by an enactment founded upon subparagraph 1 (2) of this motion, a rate of duty on any goods is reduced from the rate applicable thereto immediately prior to the 20th day of February, 1973, the Governor in Council, at any time during the period commencing with the coming into force of the enactment and ending on the 30th day of June, 1979, may by order restore the rate applicable in the case of the goods to the rate that was in effect immediately prior to the 20th day of February, 1973, and such restored rate shall thereupon, subject to the Customs Tariff, apply thereafter as it applied immediately before the 20th day of February, 1973.
4342

April 10, 1978
Table 1 Government of Canada Summary Statement of Transactions Public Accounts Presentation			
1976-77	1977-78	1978-79Actual	Estimated)	Forecast^)($ millions)	Budgetary transactions	Revenues 	
32,640	32,700	36,000Expenditures^) 	
- 38,930	-43,000	-46,900Surplus or deficit (- ) 	
6,290	-10,300	-10,900Non-budgetary transactions	Loans, investments and advances^) 	
-2,148	-1,250	-1,550Annuity, insurance and pension accounts	.... 2,368	1,570	2,250Other transactions 	.... 676	1,480	-1,300Net source or requirement (- ) 	.... 896	1,800	-600Financial requirements	(Excluding foreign exchange transactions) 	.... -5,394	-8,500	-11,500Foreign exchange transactions 	.... 1,122	1,170(3)	Total financial requirements 	.... -4,272	-7,330	
111 Numbers in these columns should be interpreted as mid-points of ranges of estimates.
17) Total outlays are composed of budgetary expenditures plus loans, investments and advances.
13) This figure reflects actual transactions to the end of fiscal year 1977-78. No forecast is made of foreign exchange transactions
in fiscal year 1978-79
April 10, 1978

Table 2
Government of Canada Fiscal Position
Public Accounts Budgetary Revenues
Personal income tax	
Corporation income tax . .
Non-resident tax	
Customs duties	
Sales tax	
Other duties and taxes . . .
Total tax revenues . . . .
Non-tax revenues . . . .
Total budgetary revenues
1976-77 Actual	1977-78 Estimate^)	1978-79 Forecast 0)
	($ millions)	
14,620	13,575	14,9155,377	5,775	6,270451	500	5402,097	2,280	2,6603,929	4,355	4,9052,681	2,465	2,32529,155	28,950	31,6153,485	3,750	4,38532,640	32,700	36,000
(11 Numbers in these columns should be interpreted as mid points of ranges of estimates.

April 10, 1978
Table 3
Government of Canada
Summary, Extended National Accounts Presentation
	1976-77 Actual	1977-78 Estimate! 1)	1978-79 Forecast (1)
		($ millions)	
Current transactions			
A. Revenues 	
36,599	36,400	40,525B. Expenditures	
-40,458	-45,200	-49,775Surplus or deficit (-) 	
-3,859	-8,800	-9,250Loans and other transactions	A. Loans, investments and advances 	
-2,030	-1,375	-1,150B. Cash vs accrual 	
486	1,325	-1,225C. Other transactions 	
9	350	125Net source or requirement (-) 	
-1,535	300	-2,250Total financial requirements	(Excl. foreign exchange transactions) . . .	
-5,394	-8,500	-11,500Foreign exchange transactions 	
1,122	1,170(2)	Total financial requirements 	
-4,272	-7,330	
(D Numbers in these columns should be interpreted as mid-points of ranges of estimates.
*2) This figure reflects actual transactions to the end of fiscal year 1977-78. No forecast is made of foreign exchange transactions in fiscal year 1978-79.

April 10, 1978

Table 4
Government of Canada Revenues and Expenditures National Accounts Basis
	1976-77 Actual	1977-78 Estimate^)	1978-79 Forecast^1)
		($ millions)	
Revenues			
Direct taxes, persons 	
18,535	17,455	19,305Direct taxes, corporations 	
5,810	5,685	6,320Direct taxes, non-residents 	
522	555	625Indirect taxes 	
8,596	9,090	9,820Other current transfers from persons	
9	10	10Investment income 	
2,611	3,015	3,780Capital consumption allowances	
516	590	665Total revenues	36,599	36,400	40,525Expenditures Current goods and services 	
10,139	11,300	12,400Transfer payments to persons 	
11,803	13,400	14,650Subsidies 	
2,431	2,500	2,400Capital assistance 	
312	400	525Current transfers to non-residents	
574	675	775Interest on the Public Debt 	
4,672	5,425	6,650Transfers to provinces 	
9,048	9,750	10,475Transfers to local governments	
197	350	375Gross capital formation 	
1,282	1,400	1,525Total expenditures 	
40,458	45,200	49,775Surplus or deficit (-)	-3,859	-8,800	-9,250
D) Numbers in these columns should be interpreted as mid points of ranges of estimates.

April 10, 1978
Table 5
Government of Canada Revenues, Public Accounts and National Accounts Reconciliation
	1976-77 Actual	1977-78 Estimate) 1)	1978-79 Forecast) 1)
		($ millions)	
Budgetary revenues -			
Public Accounts 		. 32,640	32,700	36,000
Deduct			
Post Office revenues and deficit ....	* -1,103	1,240	-1,310Deficit of government business enterprises^)	[DOT] - 144	-175	-130Excess of accruals over collections	Corporate income tax 	496	-30	110Oil export charge 	[DOT] -64	-40	-20Add	Government pension and social security receipts(3) . .	4,676	5,310	5,900Capital consumption allowance 	590	665Miscellaneous adjustments^) . .	[DOT] -418	-715	-690Total revenues -	National Accounts	
,599	36,400	40,525
j1* Numbers in these columns should be interpreted as mid-points of ranges of estimates.
In the Public Accounts, deficits of government business enterprises are a charge to budgetary expenditures whereas in the National Accounts, these deficits are deducted from remitted profits of other government business enterprises.
In the Public Accounts, these government pension and social security receipts and disbursements are treated as non-budgetary 14) transacf'OMS whereas in the National Accounts, these transactions are included in government revenue and expenditure.
These miscellaneous adjustments arise as a result of conceptual differences between the two forms of presentation. These items represent, for example, the proceeds from the sales of existing capital assets; budgetary revenue items offset against budgetary expenditures; imputed items; and, an adjustment for the treatment of revenue in the supplementary period.
April 10, 1978

Table 6
Government of Canada Expenditures, Public Accounts and National Accounts Reconciliation
	1976-77 Actual	1977-78 Estimate! 1)	1978-79 Forecast^)
		($ millions)	
Budgetary expenditures -			
Public Accounts 		38,930	43,000	46,900
Deduct			
Transfers to funds and agencies(2) 	-2,896	-2,885	-3,475Post Office expenditures	-1,103	-1,240	-1,310Deficit of government business enterprises^) 	-144	-175	-130Add	Expenditures of funds and agencies(2) 	1,500	1,510	2,065Government pension and social security disbursements^)	4,115	5,130	5,450Capital consumption allowance 	516	590	665Miscellaneous adjustments^) 	-460	-730	-390Total expenditures -	National Accounts	40,458	45,200	49,775
01 Numbers in these columns should be interpreted as mid-points of ranges of estimates.
(2) In the National Accounts, budgetary appropriations to various funds and agencies are replaced by the expenditure actually made by the funds and agencies.
12) In the Public Accounts, deficits of government business enterprises are a charge to budgetary expenditures whereas in the National Accounts, these deficits are deducted from remitted profits of other government business enterprises.
(4) in the Public Accounts, these government pension and social security receipts and disbursements are treated as non-budgetary transactions whereas in the National Accounts, these transactions are included in government revenue and expenditure.
15) As in the case of revenues, the miscellaneous adjustments arise as a result of conceptual differences between the two forms of presentation. These items represent, for example, reserves and write-offs; purchase of existing capital assets; budgetary revenue items offset against budgetary expenditure; expenditures of reserve accounts and revolving funds; imputed items; and, an adjustment for the treatment of expenditures in the supplementary period.

April 10, 1978
Table 7
Government of Canada Non-Budgetary, Public Accounts and Extended National Accounts Reconciliation
	1976-77 Actual	1977-78 Estimate^ 1)	1978-79 Forecast)!)
		($ millions)	
Non-budgetary transactions - Public Accounts 	. . 896	1,800	-600Deduct Loans and advances to funds and agencies 	
Government pension and social security accounts . . . .	. 118 . . - 2,366	-125 -1,585	400 -2,190Excess of accruals over collections Corporate income tax 	. . -496	30	-110Oil export charqe 	. . 64	40	20Miscellaneous adjustments^) 	. . 249	140	230Loans and other transactions - Extended National Accounts 	- - -1,535	300	-2,250
0 ) Numbers in these columns should be interpreted as mid-point of ranges of estimates.
(71 As in the case of revenues and expenditures, the miscellaneous adjustments arise as a result of conceptual differences between the two forms of presentation. These items represent, for example, the adjustments for the treatment of revenues and expenditures in the supplementary period; the change in the reserves and revolving funds; and the adjustment required to bring financial requirements of entities included in the national accounts government sector in line with the requirements of these entities which are met through the Consolidated Revenue Fund.
April 10, 1978

Notes to Fiscal Tables
Status of 1977-78 Figures
Although the fiscal year ends on March 31, the books remain open for some time to permit payments made up to April 30 in discharge of debts incurred before March 31, together with receipts in transit at March 31, to be included in the accounts for the fiscal year. Since the books are not yet closed, the 1977-78 figures in the fiscal tables should be regarded as estimates. The government's preliminary financial statement for 1977-78 will be published this summer in The Canada Gazette.
Fiscal year-end levels of cash balances are already known and the preliminary data on debt and foreign exchange transactions should be subject to only minor revisions. Thus, close to final figures for "Total Financial Requirements" and "Financial Requirements (excluding foreign exchange transactions)" may be derived. Budgetary revenues and expenditures, the resulting budgetary deficit, and the figures for nonbudgetary transactions are based on actual data for the first 11 months of the fiscal year, estimates for March, and forecasts for the supplementary period.
Differences from Forecast in October Economic and Fiscal Statement
The current estimate of 1977-78 budgetary revenues is $350 million lower than the forecast provided in the October 20, 1977 Economic and Fiscal Statement of the Minister of Finance. The individual revenue category showing the largest difference is personal income tax revenue which is $525 million below the October forecast. Of this reduction, $260 million reflects a transfer to the provincial tax collection account in respect of 1976 assessments. Adjustments in respect of prior years' entries to this account are calculated every January when data from individual tax returns for the taxation year which ended 13 months earlier become available. While reducing budgetary revenues, this transfer does not increase financial requirements as it constitutes a non-budgetary source of funds. The remaining part of the reduction in personal income tax revenues reflects a slightly lower tax base growth than expected earlier and the latest available collections information.
Total outlays, i.e., budgetary expenditures and non-budgetary loans, investments and advances, are now estimated to total $200 million less than the target level of $44,450 million established last March and restated in October. Budgetary expenditures on certain statutory programs, such as public debt charges and payments to provinces under the new Established Programs Financing arrangements, were higher than originally expected but more than offsetting reductions occurred in the loans, investments and advances categories. In addition, 't was decided to provide budgetary appropriations to write off loans totalling $444 million to the Canadian Dairy Commission and Atomic Energy of Canada Limited, and to forgive

April 10, 1978
loans totalling $232 million to least developed countries under the foreign aid program. These additional increases in budgetary expenditures resulted in no increase in total outlays, as they gave rise to corresponding reductions in net loan requirements.
The decrease in budgetary revenues and the increase in budgetary expenditures resulted in an estimated budgetary deficit which is $1.1 billion higher than the deficit forecast in October. The reduction in loan requirements and the increase in non-budgetary receipts turned out to balance this increase in the budgetary deficit, leaving financial requirements at the same level as in the October forecast.
Foreign Borrowing, Foreign Exchange Transactions and Domestic Borrowing
There was a significant amount of foreign borrowing in 1977-78 for the first time in several years. The following table shows how such borrowing is reflected in the Summary Statement of Transactions (Table 1), and also provides summary information on the domestic borrowing record.
Financial Requirements and Debt Transactions
	1976-77	1977-78
	($ millions)	
Financial requirements		
(Excl. foreign exchange transactions)		. -5,394	-8,500
Foreign exchange transactions Unmatured debt outstanding - payable in foreign		
currency (increase (+)/decrease-)	. -2	850Other . 	. . 1,124	320. . 1,122	1,170Total financial requirements 	. . -4,272	-7,330Unmatured debt transactions (increase (+)/decrease-)	Marketable bonds 	. . 2,270	3,443Treasury bills 	. . 1,760	3,040Canada Savings Bonds 	. . 787	1,747. . 4,817	8,230Change in cash balance 	. . 545	900Cash balance at end of period 	* [DOT]	. . 3,597	4,497
April 10, 1978

Foreign currency borrowing is shown under "Foreign Exchange Transactions". At the time of the borrowing, assuming the funds are not immediately converted into Canadian dollars, there are two offsetting entries: a positive entry under the "Unmatured Debt Outstanding - Payable in Foreign Currency" sub-heading which represents the Canadian dollar value of the foreign currency borrowed, and a negative entry included in "Other Foreign Exchange Transactions" which reflects the 'use' of the funds to add to our foreign exchange reserves. The $850 million positive entry shown for "Unmatured Debt Payable in Foreign Currency" in 1977-78 represents the value, in Canadian dollars, of the $750 million U.S. drawing in 1977-78 under the standby credit facility with the Canadian chartered banks. (The recent borrowing of $750 million U.S. through an issue of marketable securities dated April 1, 1978 will appear in this category in 1978-79.) The $320 million shown for "Other Foreign Exchange Transactions" in 1977-78 is the net result of the source of funds which arose from exchange market intervention and other transactions, and the 'use' of funds corresponding to the replenishment of the reserves from the foreign currency borrowing.
"Total Financial Requirements" represents the total requirements for Canadian funds arising from budgetary and non-budgetary transactions and foreign exchange transactions. These requirements are equal to the increase in unmatured debt less the increase in cash balances.
Direct Borrowing by Government Agencies
Direct market borrowings, of $463 million in 1976-77 and some $350 million in 1977-78, by agent Crown corporations, specifically Petro-Canada, the Export Development Corporation, and Eldorado Nuclear, which have been authorized to borrow under their respective statutes, are not included in Government of Canada financial requirements. In the projection of financial requirements for 1978-79, it is envisaged that such direct borrowings by agent corporations will continue, and that in particular the Export Development Corporation will raise the bulk of its requirements through direct borrowing. In addition, the 1978-79 requirement for loans to Central Mortgage and Housing Corporation is reduced due to the anticipated sale of mortgages by CMHC from its existing holdings.
Canada Savings Bond Interest and Financial Requirements in 1978-79
Provision for interest on Canada Savings Bonds, including an allowance for the accumulating liability under the compound interest and bonus interest features of bonds issued prior to 1974, is made each year on an accrual basis and forms part of the "public debt charges" component of total budgetary expenditures. To the extent that interest accruals exceed interest actually paid in a particular year, because some holders of Canada Savings Bonds allow coupons to accumulate uncashed and/or because the compound coupon or the bonus payment do not come due in that year, the government is provided with a source of funds which is included in "Other non-budgetary transactions" in Table 1. The accumulated amounts

April 10, 1978
of "interest accrued'' and "interest due and outstanding" are recorded as components of the public debt in the statement of the government's assets and liabilities.
In a year in which the compound interest coupon and/or bonus interest payment on a Canada Savings Bond series come due, cash interest payments will exceed interest accruals on that series; there is then a use of funds under "Other non-budgetary transactions". There is a corresponding reduction in the "interest accrued" and "interest due and outstanding" components of the total public debt.
The SR series of Canada Savings Bonds (issued May, 1968, $120 million estimated outstanding) and the large S24 series (issued November, 1969, $2.5 billion estimated outstanding), mature in 1978. Both series have compound interest provisions and are eligible for bonus interest. It is estimated that in 1978 compound interest coupons and bonus interest totalling $850 million will be paid on these series, together with $1,450 million in regular interest coupons. Only $300 million will correspond to interest accruing on these bonds during fiscal year 1978-79. Thus, unlike recent years in which the excess of interest accruing over interest encashment on these two series provided a substantial source of funds (some $350 million in 1977-78), in 1978-79 the excess of encashment over accruals gives rise to a requirement of some $2 billion. On other series of CSBs, accrued interest continues to exceed cash payments. Overall, the interest accounts switch from giving rise to a source of funds of almost $800 million in 1977-78, to giving rise to an estimated requirement of $1,300 million in 1978-79.
The unusually high level of interest encashment in 1978-79 affects financial requirements but not the budgetary deficit. Nor does it affect the National Accounts deficit (Tables 3 and 4) as interest on the public debt is also treated on an accrual basis in the National Accounts.
April 10, 1978

Supplementary Information
Research and Development Costs
There has been growing concern in recent months about the adequacy of scientific research and development activity in the Canadian industrial sector, given the importance of R&D as a contributor to long-run economic performance.
At the conclusion of the federal-provincial Conference of First Ministers in February a statement was issued announcing, among other things, that joint steps would be taken to improve the tax incentives or credits to private industry for R&D activities.
Since 1961, the Income Tax Act has allowed a 100 per cent write-off of current and capital R&D expenditures in the year they are made. This fast write-off was supplemented last year by an investment tax credit on current and capital R&D outlays varying by region from 5 to 10 per cent.
As an added stimulus, it is now proposed to introduce for a 10-year period beginning in 1978 a special allowance of 50 per cent of the increase in R&D activity. The allowance, which is deductible in computing income, would apply to the amount by which a company's R&D expenditures in a year exceed the company's average R&D expenditures over the previous three-year period. The effect would be to reduce a company's after-tax cost of each additional dollar spent on R&D to as low as 20 cents.
Because of the incremental nature of the new incentive, its impact on tax revenues will depend upon the extent to which industry responds.
However, it is estimated that in the initial years the reduction in federal revenue will be about $50 million a year. Provincial tax revenue would also be reduced in those provinces that have tax collection agreements with Ottawa and those outside the collection agreement who decide to adopt these new provisions.
Energy
Additional tax incentives are being introduced to stimulate the production of energy, in the immediate as well as long term, particularly by new methods that increase the rate of recovery from known oil deposits. Two changes are made in the depletion allowance.

April 10, 1978
First, the cost of machinery, equipment and other facilities acquired after tonight for use in an enhanced or "tertiary" recovery system will be eligible to earn a depletion allowance of $1 for each $2 of expenditure as compared to the normal depletion allowance earning rate of $1 for $3. An enhanced recovery system is one that uses new technology to recover additional marketable oil from either conventional or heavy oil fields. Depletion is a special allowance, deductible from taxable income, based on the eligible costs of recovering minerals and petroleum.
Second, the amount of the depletion allowance that may be claimed each year will be increased for depletion earned on certain investments in nonconventional oil. At present the maximum deduction for depletion is limited to 25 per cent of resource profits. This limit will be increased, effective this year, for depletion earned on certain eligible expenditures to 50 per cent of total taxable income - that is, resource profits and any other profits of the corporation. For this purpose eligible expenditures will include investments in machinery and equipment forming part of an enhanced recovery project and depreciable property in class 28 that is acquired for a bituminous sands mining project.
For tax purposes, plants established to upgrade heavy oil, other than those established in connection with a bituminous sands mining project, will be treated as manufacturing and processing facilities. This will place them on the same tax footing as oil refineries and other manufacturers. These plants process the heavy, thick types of oil that cannot be sold now in volume, and turn them into a marketable form.
Rail Transportation
Major investments are needed in the railway transportation system to improve efficiency and restrain cost increases. More modern equipment is required in many areas of railway operations including signalling, track and equipment maintenance, motive power and rolling stock.
An additional straight line capital cost allowance of 6 per cent will be provided on all railway system assets (other than certain non-rail automotive assets) acquired after April 10, 1978 and before 1983. This additional allowance will be available in the year of investment and in each of the four subsequent years.
For example, signalling equipment now qualifies for an allowance at a rate of 4 per cent a year on the reducing balance. The special depreciation will permit a further deduction of 6 per cent of the original cost of the equipment in the year in which it is purchased and the following four years.
New investment stimulated by this measure will benefit suppliers of railway equipment, including Canadian producers of rail locomotives and cars, strengthening output and employment in this important manufacturing sector.
April 10, 1978

Certified Canadian Films
To assist the financing and development of the Canadian film industry, the tax law provides a special write-off for investment in certain Canadian motion picture films or video tapes certified by the Secretary of State. The budget proposes a number of changes to this incentive designed both to improve the quality of Canadian film production and to eliminate abuses.
Under the present capital cost allowance system, the incentive is technically available for a taxation year only if the film or tape is brought into existence by the end of the year. This has tended to rush the completion of the photography, at a sacrifice of quality in many cases. To allow for a more orderly pace of production, a change will be made to permit the deduction to be taken under certain circumstances even though principal photography was not commenced until after the end of the year. This special rule, applicable to the 1978 and subsequent taxation years, will allow the incentive claim provided principal photography of the film is completed within 60 days after the end of the year.
Changes are also necessary to curtail the use of this incentive provision as a device for the undue deferral or avoidance of tax. The principal area of abuse involves a special guarantee arrangement the purpose of which is to increase the amount that an investor may deduct beyond his investment in the film. To curtail abuse, the amount deductible by an investor will be limited to the amount he has at risk. Effective for the 1978 and subsequent taxation years, the amount deductible will be reduced by any revenues or repayments that have been guaranteed.
The Registered Retirement Savings Plan
The Income Tax Act now requires a taxpayer, prior to reaching age 71, to use the funds accumulated in a Registered Retirement Savings Plan (RRSP) to purchase a life annuity from an insurance company. The annuity benefits are then taxable as they are received. The only alternative now available is to withdraw the full amount of the RRSP and become liable to pay income tax on it in the same year.
There have been many complaints that this compels holders to buy a life annuity and denies the holders any control over the investment of funds from RRSPs.
The budget of March 31, 1977 referred to this situation and reported that the government was examining the matter. As a result of that examination, it has been decided to add two alternatives for providing retirement income from RRSP funds:
1.	A fixed-term annuity may be purchased to provide benefits to age 90.
2.	The savings may be transferred into a new kind of investment vehicle - a Registered Retirement Income Fund (RRIF).

April 10, 1978
Financial and other institutions that are now eligible to issue RRSPs will be permitted to offer the new options. At present, these are mainly life insurance and trust companies. Under the second, or RRIF, option, a specific fraction of the total assets in the fund - capital plus accumulated earnings - would be withdrawn each year by the holder to provide annual income to age 90. The fraction will be related to the age of the taxpayer in the year and will simply be equal to one divided by the number of years remaining to age 90.
As an example, for a purchaser aged 70 an RRIF would run for 20 years.
In the first year, with 20 years remaining, the holder would be required to take into income 1 /20th of the total value of the plan at the beginning of the year. After another year 1/19th would be withdrawn, a year later 1/18th, and so on until the final year, when the taxpayer reaches age 90, withdrawal would exhaust the fund. A table at the end of this section shows the results for each $1,000 of investment in a typical RRIF.
The essential purpose of the RRSP, with its exceedingly generous tax treatment, is to provide income in retirement. Since more than 40 per cent of men and more than 50 per cent of women at age 70 would, for example, live longer than to age 85, retirement income must be assured well beyond that age. The new alternatives assure retirement income to age 90 which covers the retirement span of most Canadians.
A taxpayer will be limited to ownership of one RRIF. But he may, if he chooses, allot only a portion of his RRSP accumulations to the establishment of an RRIF and invest the remainder in any number of fixed-term or life annuities.
A taxpayer may base the term of an annuity or RRIF on the age of a spouse, if the spouse is younger, thus securing benefits to age 90 for the spouse. Should a person die before age 90, the benefits under the new options, as well as life annuities with a guaranteed term, could be transferred to the spouse. Otherwise, the value of any remaining benefits must be included in the person's income in the year in which he dies.
The current requirement that an RRSP be matured before attaining age 71 will be modified to require that it be matured during the calendar year in which the holder reaches age 71. This will allow the taxpayer more time to choose the combination of options best suited to his retirement income needs. A new provision will stipulate that a taxpayer may transfer an RRSP into any of the retirement income options, including a life annuity, only after reaching the age of 60.
An RRIF owner will be allowed to manage his own investments through directions to the trust company holding his funds, similar to the existing provision for a self-administered RRSP. There will be a wide variety of qualified investments available, matching those allowed under RRSP investment rules. These include stocks, bonds, bank certificates, savings bonds and mutual funds.
The changes proposed will be effective from the date of Royal Assent. There will, however, be a special provision for taxpayers who reach age 71
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between the date of the budget, April 10, 1978, and 60 days following the date on which the enabling legislation receives Royal Assent. If such taxpayers choose to withdraw funds from their RRSPs prior to attaining age 71, they may do so without incurring a tax liability to the extent the amount withdrawn is invested in any of the permissible retirement income options within 120 days of the legislation receiving Royal Assent.
The following table illustrates the characteristics of the RRIF and how it would operate. It shows the annual payments that would be received on a $1,000 investment in an RRIF assuming 5 per cent and 8 per cent rates of interest. Payments under an RRIF grow from year to year at the rate of return on investments in the fund. To the extent that the rates of return reflect price increases, this will tend to protect the real value of the benefits over time. Indeed, if the rates of return exceed the rate of inflation, this will enable the pensioner to improve his real standard of living along with other Canadians.
Payments Under a Registered Retirement Income Fund for Each $1,000 Investment by a Taxpayer at Age 70
Taxpayer's age on Jan. 1	Fraction of plan assets to be paid	5% Interest	8% Interest	Balance at start of year	Payments during the year	Balance at start of year	Payments during the year70	1/20	$1,000.00	$50.00	$1,000.00	$50.0071	1/19	997.50	52.50	1,026.00	54.0072	1/18	992.25	55.12	1,049.76	58.3273	1/17	983.98	57.88	1,070.76	62.9974	1/16	972.40	60.78	1,088.39	68.0275	1/15	957.21	63.81	1,102.00	73.4776	1/14	938.07	67.00	1,110.81	79.3477	1/13	914.62	70.36	1,113.99	85.6978	1/12	886.47	73.87	1,110.56	92.5579	1/11	853.23	77.57	1,099.45	99.9580	1/10	814.45	81.44	1,079.46	107.9581	1/9	769.65	85.52	1,049.24	116.5882	1/8	718.34	89.79	1,007.27	125.9183	1/7	659.98	94.28	951.87	135.9884	1/6	593.98	99.00	881.16	146.8685	1/5	519.73	103.95	793.04	158.6186	1/4	436.57	109.14	685.19	171.3087	1/3	343.80	114.60	555.00	185.0088	1/2	240.66	120.33	399.60	199.8089	1	126.35	126.35	215.79	215.79
Note: It is assumed that the required withdrawals from the Fund are made at the beginning of the year, that simple interest is credited at year end, and that no change occurs in the market value of the
investments.

April 10, 1978
Family Farms
Changes are proposed to broaden the special rules that permit the tax to be deferred on a transfer of farm property by a farmer to his children. This is generally referred to as a tax-free rollover and now applies only to the transfer of farmland and depreciable farm property owned by a farmer. It will be made to apply to an incorporated family farm effective immediately.
The rollover will cover transfers to children of shares in qualifying farm corporations and of interests in qualifying farm partnerships. To qualify, the farm corporation or partnership must be carrying on a farming business in Canada, substantially all of its assets must be used in the business and one or more members of the farmer's family must be actively engaged in running the farm The rollover will also be extended to cover transfers of agricultural quotas.
Family Law Reform
Several provinces are enacting important basic changes in their laws relating to the division of certain properties between parties to a marriage. In some provinces the new laws for the division of property will apply to all married couples, while in others they will relate to property division only in the case of a marriage breakdown.
Although property law is a field entirely within provincial jurisdiction, these changes affecting marital properties give rise to a problem in the application of federal Income Tax Act provisions relating to capital gains.
Technical changes will be made to the Income Tax Act to facilitate the division of property between spouses without incurring a capital gains tax liability. No tax would arise on the original transfer. On a subsequent sale of the property, each spouse would report an equal share of any capital gain.
An example would be a cottage (other than a principal residence) originally bought by a husband in Ontario for $10,000 and valued at $25,000 at the time of a divorce or legal separation. Under the existing Income Tax Act, the husband would be deemed to have disposed of a one-half interest in the property. The difference between the fair market value of his half-interest ($12,500) and his cost thereof ($5,000) would represent a capital gain of $7,500 and the husband would be liable to tax on half of that amount. Since the taxpayer's wife would not have paid anything for her interest in the property, she would have no cost. This means that on a later sale of the property, she would be required to treat her full share of the proceeds as a capital gain and would be required to bring one-half the proceeds into her income.
The change proposed ensures that a capital gain will not arise on the division of the property. The husband will be deemed to transfer his halfinterest in the cottage for $5,000. On any subsequent sale of the property, both the husband and wife would include one-half the gain in income.
April 10, 1978

Federal Compensation for Provincial Retail Sales Tax Reductions
The federal government has offered to compensate provinces to effect a temporary reduction in their general retail sales tax rates.
This offer to finance the provincial reductions takes the form of full compensation for a reduction of three percentage points for six months in the Atlantic Provinces. In all other provinces except Alberta where no retail sales tax is imposed, the federal government will compensate for the revenue forgone arising out of a two-point reduction for a period of six months, provided that these provinces agree to effect a further cut of one point. However, these provinces will have the option of reducing their sales taxes by three points for six months or by two points for nine months. In either event, the federal government will compensate these provinces to the extent of a two-point reduction for six months.
The federal share of the provincial sales tax reductions will be provided to the provinces in the form of a transfer of personal income tax room and, where necessary, by an additional cash payment. This transfer will be made through a temporary abatement of federal personal income tax which will reduce every taxpayer's federal tax liability by $100 or net federal tax otherwise payable, whichever is less. Provinces accepting the offer will increase their income tax on each individual by exactly the amount of the federal abatement. In this way there will be no change in a taxpayer's total tax liability. Taxpayers will not be burdened by any extra calculation when they file their returns since the necessary adjustments will be made by Revenue Canada. In provinces where the amount of the federal reduction of income taxes is not sufficient to fully compensate the province for the agreed level of sales tax revenue forgone, the federal government will make a supplementary cash payment. Similarly, where the federal transfer results in over-compensation, a recovery will be made from the province.
The federal abatement and provincial income tax increase will not apply to residents of the Yukon and Northwest Territories since, like Alberta, these jurisdictions do not levy a retail sales tax.
The accompanying table shows the forecast values of the provinces' retail sales tax reduction and associated federal-provincial financing arrangements.

April 10, 1978
Estimated Federal Compensation for Provincial Retail Sales Tax Reductions
Province	Present provincial retail sales tax rates	Reduced provincial retail sales tax rates	Value of sales tax reduction<7v)	(%)	($ millions)Newfoundland 	. . 11	8	24Prince Edward Island . .	. . 8	5	5Nova Scotia 	. . 8	5	28New Brunswick 	. . 8	5	27Quebec 	. . 8	6 or 5*	340Ontario 	. . 7	5 or 4*	433Manitoba 	. . 5	3 or 2*	62Saskatchewan 	. . 5	3 or 2*	53British Columbia 	. . 7	5 or 4*	176Total 	1,147
(*) These provinces have the option of reducing their sales tax rates by 3 points for 6 months or 2 points for 9 months.
Proposed Method of Financing Sales Tax Reductions
Federal share
Province	Tax abatement	Cash payment	Total	Provincial share	Total
			($ millions)		
Newfoundland	. 15	9	24	-	24Prince Edward Island . . .	. 3	2	5	-	5Nova Scotia	. 27	1	28	-	28New Brunswick 	. 22	5	27	-	27Quebec 	. 222	5	226	113	340Ontario 	. 346	-57	289	144	433Manitoba 	. 37	4	41	21	62Saskatchewan 	. 28	7	35	18	53British Columbia 	. 102	16	117	59	176Total	. 801	-8	793	354	1,147
Note: Totals may not add due to rounding.
April 10, 1978

Employees at Remote Work Sites
The Income Tax Act specifies that free board and lodging provided to an employee is a benefit subject to tax. However, it allows an exemption for persons working at remote locations far from their homes who have married or equivalent status. Single persons in similar circumstances are deemed to have a taxable benefit. Typical remote work sites are logging camps, construction projects and drilling locations.
It is now proposed to apply the exemption to all workers at remote sites.
Part IV Tax
Another budget measure concerns the special Part IV tax - that is, the tax of 25 per cent on intercorporate dividends. To assist small business financing and joint venture operations, the 1977 budget removed this tax from dividends received on any shareholding that represented an interest of more than 10 per cent in a corporation provided that the investor corporation's cumulative deduction account did not exceed $750,000. A change is proposed to eliminate the Part IV tax on all dividends received by a private corporation from another corporation in which it has an interest in excess of 10 per cent.
The change described above would by itself permit an inappropriate increase in the amount of business income that qualifies for the special low rates of corporate tax. To prevent such an unintended increase, a consequential change is proposed that will prevent the deduction by a payor corporation in determining its cumulative deduction account of dividends paid by it to any other corporation (other than an associated corporation) that owns more than 10 per cent of its shares.
Deferred Profit-Sharing Plans
The Income Tax Act imposes a special refundable tax on the acquisition by a deferred profit-sharing plan of certain non-qualified investments. Interest is charged where the tax is not paid at the time the investment is made. A change will ensure that interest on any such unpaid taxes ceases to accrue on the refundable portion of the tax as of the date the non-qualified property is disposed of.
Employee Loans
Rules were introduced in 1977 to treat as taxable the benefit an employee enjoys on loans that do not require him to pay a reasonable rate of interest. Certain housing loans and loans to enable an employee to purchase shares were exempted from these new rules. However, the exemption for such loans was available only if the loan was made by the employer. A change will ensure that the exemption will apply on loans made by a person other than the employer. This is needed because in

April 10, 1978
some provinces companies are prohibited from making such loans directly and must do so through a financial institution. Another change will exclude any benefit on housing loans made to persons moving from a location outside Canada.
Surplus Stripping
The Income Tax Act contains special provisions designed to prevent surplus stripping - that is, the tax-free distribution of corporate earnings through a series of transactions involving the sale of shares. One of the rules applies on the sale of shares of one corporation to another by shareholders who act in concert to control the purchasing corporation. The rule presents a number of problems from the point of view of administration and compliance. A change is proposed to eliminate the "acting in concert'' rule. The existing previsions relating to surplus stripping will be extended to those situations in which, immediately following a non-arm's length sale of shares, the purchasing corporation owns more than a 10 per cent interest in the corporation whose shares it acquired.
Reduction of Capital
To prevent the possibility of an unintended tax deferral on distributions by public corporations, a change is proposed to treat as a dividend a payment made to a shareholder as a reduction of capital except where the capital reduction takes place on the redemption or cancellation of the share, on the reorganization of the capital, or the winding-up of the corporation.
Insurers Branch Tax
A special 25 per cent branch tax applies to non-resident insurance companies carrying on business in Canada. To implement a change announced in the March 31, 1977 budget, the branch tax provisions are amended to limit the amount by which an insurer can reduce its Canadian investment fund - that is, the assets producing income subject to Canadian corporate tax. Thus an insurer will only be able to reduce his Canadian investment fund to the extent his surplus exceeds a level to be prescribed by regulation. This change is designed to bring the tax treatment of non-resident insurers into agreement with that accorded resident insurers.
Life Insurance Company Losses
A change is proposed to deal with losses of certain life insurance companies. The existing provisions in the Income Tax Act deny the carryforward into 1978 of losses and deductions from prior years to the extent that they arose as a result of the deduction of certain reserves in those years. The technical formula by which this is achieved produced a
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harsh result for certain small insurance companies that have suffered losses. The proposed change provides relief for losses in those cases where the losses and deductions of prior years exceeded a company's reserves.
Insurance Policy Loan Interest
Loan Interest Paid in 1978 and Subsequent Years
Two changes are proposed relating to life insurance policy loans. The first relates to the deductibility of interest. A policy holder who uses the proceeds of a policy loan to earn income can deduct the interest he pays from his income for tax purposes. However, he must have the insurance company verify that such interest has not been added to the cost of the policy. A change is needed to ensure that such verification is made for loans taken before April 1, 1977 as well as after.
Loan Interest Paid Prior to 1978
The Income Tax Act also provides that all interest paid prior to 1978 is included in the cost basis of an insurance policy. Because the records needed to establish amounts paid in previous years frequently do not exist, a change is required to ignore this interest paid before 1978.
Loans to Shareholders
Amendments were made in 1977 to broaden the rules relating to the inclusion in income of certain loans by corporations to shareholders. An exception was provided for loans to an employee of a corporation where the funds were to be used to acquire shares of the corporation. A further technical amendment is to be made to provide a similar exception for loans made after March 31, 1977 to an employee to assist him in acquiring shares of a related corporation.
Northwest Territories
Effective in 1978, the Northwest Territories introduced its own income tax. Consequential changes are introduced in this budget to provide for a corresponding reduction of the federal tax. The changes ensure that the Northwest Territories is treated on the same basis as the provinces, which already impose their own taxes. This does not result in any change in the level of tax paid by individuals or corporations in the Northwest Territories.
Penalties
The Act will be changed to correct a technical deficiency in the wording of Section 163 that leaves some categories of unreported income outside the
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April 10, 1978
calculation of the penalty that applies when a taxpayer has made a false statement on his income tax return.
Customs Tariff Reductions
Temporary tariff reductions on a wide range of goods, initially introduced as an anti-inflationary measure in the 1973 budget and scheduled to expire June 30, 1978, are being extended to June 30, 1979. Exceptions to this extension are canned and frozen asparagus and frozen Brussels sprouts for which the Tariff Board has recommended increased protection, glass tableware which a Canadian manufacturer intends producing in increased quantities if the pre-1973 rate is restored, and surface-active agents or synthetic detergents which are now being imported in such increased quantities as to threaten continued expansion of production in Canada.
The temporary rate of 10 per cent on certain canned meats will also expire at the end of June; it will be replaced by a 15 per cent rate, which is more in line with the rates on other meat products and the needs of the industry but stili substantially lower than the pre-1973 rates.
Importations of the products on which tariff reductions are being continued were valued at about $1.5 billion in 1977. The main trade items are raw sugar, motor vehicle parts, cameras and films, vacuum cleaners, pharmaceuticals, chinaware, bottles and hand tools. It is again proposed to have Order in Council authority to withdraw any reduced rates that adversely affect employment or production.
The temporary duty-free provisions covering aircraft and aircraft engines of types or sizes not made in Canada initially established in 1952 and scheduled to expire on June 30, 1978, are to be continued for another year. Free entry is also being proposed for markers used in the aerial spraying or dusting of crops and for catgut used mainly for stringing sports racquets. An existing free-entry provision for fatty alcohols for synthetic detergents is being extended to cover fatty alcohols used to make all kinds of surface-active agents.
A reduction from 20 per cent to 15 per cent is proposed for certain parts for electric light fixtures to help Canadian manufacturers compete with imports.
A few amendments of a more technical nature are being introduced as a consequence of those outlined above or to broaden the coverage of existing duty-free provisions (e.g., for gladiolus corms, and certain periodical publications).
Customs Tariff increases
It is proposed to withdraw the benefits of the British Preferential Tariff from certain goods imported into Canada from the United Kingdom and Ireland. These goods include confectionery, cranes for mounting on trucks, certain diesel engines, certain apparatus used in community antenna
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television transmission lines, and knitted garments. The main reason for this action is to assist Canadian manufacturers who are operating at below capacity or who have lost significant business to imports from the United Kingdom and Ireland. These imports will now be dutiable at MostFavoured-Nation rates of duty. Since Britain and Ireland ended Canada's preferential access by joining the European Economic Community,
Canada no longer has an obligation to extend preferential tariff treatment to British and Irish goods. Many of the remaining margins of preference will disappear as a result of tariff reductions made in the multilateral trade negotiations.
An amendment is being introduced to exclude tires for non-agricultural tractors from duty-free entry. This change is to assist Canadian manufacturers of industrial tractor tires and to correct an anomaly whereby tires used on the tractor portion of some equipment are free of duty while the same tires used on the non-tractor portion are subject to duty.
An amendment is also being proposed to impose a tariff on two basic chemicals used in the manufacture of pesticides. This action will result in substantial investments being made in expanded production of these chemicals and will help ensure a reliable Canadian source of supply. Formulated pesticides used in agricultural and other applications are now free of duty and will continue to be so.
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April 10, 1978
Effective Dates of Budget Measures
Jan. 1, 1978 - Special allowance to permit deduction from taxable income of 50 per cent of the costs of increases in research and development activity.
Jan. 1, 1978 - Rules on tax incentives for Canadian films certified by the Secretary of State modified to allow additional time for completion of photographic work.
Jan. 1, 1978 - Federal income tax rates reduction in the Northwest Territories to facilitate introduction of a territorial income tax with no tax increase for individuals or corporations.
April 10, 1978 - Costs of machinery, equipment and other facilities for enhanced oil recovery systems become eligible to earn depletion allowances of $1 for each $2.
April 10, 1978 - Limit on the deduction of depletion earned on certain expenditures on non-conventional oil projects increased to 50 per cent of total profit.
April 10, 1978 - Tax-free rollover provisions apply to incorporated family farms.
April 10, 1978 - Plants established to upgrade heavy oil deemed to be manufacturing and processing facilities.
April 10, 1978 - Additional capital cost allowance provided on depreciable railway system assets acquired by railways before 1983.
April 11, 1978 - Tariff changes.
July 1, 1978 - Tariff reductions on a wide range of consumer goods, due to expire, renewed for one year. Duty-free entry of aircraft and aircraft engines of types not made in Canada, also due for expiry, continues for another year. Other tariff changes take effect April 11, 1978.
Upon Royal Assent - Changes relating to retirement income options for owners of Registered Retirement Savings Plans. A special provision will allow RRSP owners reaching age 71 after April 10, 1978 to make use of the new options proposed.

Tuesday, April 11, 1978