1978-02-27

ROUTINE PROCEEDINGS


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I wish to move a motion under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. A petition from some 40,000 Newfoundland citizens presented to the House of Commons last year gave rise to a non-partisan amendment to the Fisheries Act which requires permission from the Minister of Fisheries and the Environment to enter the area of the seal hunt and gives increased powers to fisheries officers to apprehend violators. I therefore move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House orders that the minister of fisheries and the environment give warning to intended violators of the act of the penalties that they will face on illegal entry, such warning to be given such wide publicity that will prevent the needless hostility which could occur at this year's hunt.


Mr. Speaker:: The 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.


CANADIAN PACIFIC RAILWAY
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, as one who remembers not only the depression years, but also as one who remembers-for an even longer period of time-what the CPR has done to its employees, both working and retired, I move, seconded by the hon. member for Nanai-mo-Cowichan-The Islands (Mr. Douglas), who also remembers:
That this House, noting that the Canadian Pacific Railway pays its president a salary of $330,000 a year, calls on the government to review and make public
the massive extent to which this corporation receives public funds, and insists that the CPR increase immediately the level of pensions paid to its retired employees and their survivors, at least to the full extent recommended in the Noel Hall report of 1976.


Mr. Speaker:: The presentation of such a motion for discussion at this time requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SOCIAL SECURITY
Mr. Eudore Allard (Rimouski):: Mr. Speaker, pursuant to Standing Order 43, I ask for the unanimous consent of the House to present a motion on an urgent and important matter.
Considering the unprecedented rate of unemployment now affecting the country and the fact that numerous workers are forced to retire before age 65 and consequently are not entitled to the old age pension, which creates unjustified difficulties for them, and considering that early retirement would greatly contribute to reducing unemployment, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That this House urge the Minister of National Health and Welfare to take the necessary measures so that those retiring at age 60 or more could benefit from the old age security pension as well as the guaranteed income supplement.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

February 27, 1978


GOVERNMENT ADMINISTRATION
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, 1 rise on a matter of urgent and pressing necessity. In view of the reports of wholesale theft and fraudulent conversion, without colour of right, but attempting to appear to the right, of policies and principles of the Progressive Conservative Party of Canada by pragmatic Liberal swingers at the weekend Liberal policy-swiping convention in Ottawa, and in view of the hanging given by liberal swingers to the leftist, state-ist and collectivist view of the Prime Minister (Mr. Trudeau) as enunciated by him in rare but candid and frank New Year's confessions between electoral bouts, I move, seconded by the hon. member for Hamilton West (Mr. Alexander):
That this House direct the Minister of Justice to investigate and to charge the Liberal Party of Canada with theft of policies and principles of the PC party, though not with use of the same, and that the courts be informed that a plea for mercy be considered in view of the desperation as to electoral prospects that induced the said theft and fraudulent conversion.


Some hon. Members:: Oh, oh!


RESOLUTIONS PUT FORWARD AT LIBERAL PARTY CONVENTION-MOTION UNDER S.O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the Liberal party resolutions approved this past weekend calling for an increase in government expenditures in many specific areas, while at the same time approving the tightening of the money supply, halting growth in the public service and limiting government spending, I move, seconded by the member for Winnipeg North Centre (Mr. Knowles)-that hon. relic from the depression days:
That this House agrees that this hallucinatory batch of resolutions supports the view of the hon. member for Vancouver-Kingsway that the Liberal party has gone to pot.


Some hon. Members:: 
CANADIAN CULTURE
Mr. Art Lee (Vancouver East):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the statement which the Leader of the Opposition (Mr. Clark) made in Hanna, Alberta, on February 24, 1978, and in view of the fact such statement described European Canadians as "thinkers" and not "builders" of this great country and that those Canadians of European descent, whether from the Ukraine, Italy, Poland, Germany, Scotland or England, have all contributed greatly to
[Mr. Speaker.)
Canadian society, I move, seconded by the hon. member for Kent-Essex (Mr. Daudlin):
That this House condemn the artificial distinction made by the Leader of the Opposition as to North American and European Canadians, and that this House recognizes the great contribution of Canadians of European descent to our society and our nation.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


An hon. Member:: No.


Mr. Paproski:: Mr. Speaker, on a point of order, no one said "No" on this side. If anybody said "No", it was on the other side.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. It was a motion condemning the Leader of the Opposition (Mr. Clark). If the hon. member wants me to ask for unanimous consent again, I will.


Some hon. Members:: Oh, oh!


AGRICULTURE
Mr. Jake Epp (Provencher):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the fact that agricultural offshore labour is vital to the continuation of a healthy Canadian agricultural community, especially in horticultural pursuits, and in view of the fact that agricultural organizations have repeatedly asked the government to continue arrangements for offshore agricultural workers, I move, seconded by the hon. member for Carleton-Charlotte (Mr. McCain):
That the government continue the program of allowing offshore agricultural workers into Canada at levels not less than those of previous years.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
February 27, 19 78



ORAL QUESTION PERIOD


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in the absence of the Minister of Finance and the Minister of Industry, Trade and Commerce, perhaps I could direct my question to the second acting minister of industry, trade and commerce, the Minister of Employment and Immigration. As the government has represented for some time that our "crash dollar", which crashed down to 89 cents, would at least aid exports, will the minister indicate what happened in the month of January, when our exports dropped 16.9 per cent, a drop even greater than our imports-just the reverse of what was represented?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, 1 happen to have the answer to that question.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, because some of the comments on January commodity exports were misleading, the Minister of Industry, Trade and Commerce very diligently sent me some notes so that I would be able to answer the concern of the hon. member. We have to look at a number of things. First, the trade balance. The commodity trade balance in January, 1978, was $306 million. This is a very high level indeed, since it would amount to an annual rate of $3.6 billion.


Mr. Baker (Grenville-Carleton):: Read on.


Pierre Elliott Trudeau: Second, we have to look at the record over the year. Canada obtained a merchandise trade surplus of-


Walter David Baker: Motions.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I thought hon. members opposite wanted some information.


Some hon. Members:: Hear, hear!


Mr. Lambert (Edmonton West):: It is very simple; put it on motions.


Pierre Elliott Trudeau: I do not understand. If the House is concerned about this very high figure, perhaps-


Mr. Speaker:: Order, please.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order. The question concerned a statistical matter for the month of January. Up to this moment, that is
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the question being answered. I will not let it go on too long, but the question is being addressed.


Pierre Elliott Trudeau: I was saying that Canada obtained a merchandise trade surplus of $2.9 billion in 1977, even with a deficit of $1.5 billion in crude petroleum. Therefore, Canada improved over the past two years by over $3.4 billion. Third, our export performance in the last two years-the volume of our exports-has risen by about 22 per cent-


Mr. Speaker:: Order, please. The answer may be too lengthy. The hon. member for York-Simcoe.


Sinclair McKnight Stevens: Mr. Speaker, my further supplementary is directed to the Prime Minister. When he said that he had the answers, presumably that means the second acting minister of industry, trade and commerce does not have the answers. The Prime Minister started to quote certain figures. I would be very pleased if he would give us the current account trade deficit estimate now for Canada, bearing in mind the January turndown in the figures. Would he indicate whether, in fact, we may expect the original estimate of approximately $4.5 billion in current account trade deficit this year, or may it be even higher?


Pierre Elliott Trudeau: Mr. Speaker, now the hon. member is concerned with the current account. His question was about trade performance. It is on this that I have figures from the Minister of Industry, Trade and Commerce. I am sure the current account figures could be forwarded to me by the Minister of Finance, if the hon. member wants to know. The trade figures are extremely important. In the past two years, from 1975 to 1976, the value of exports of motor vehicles has increased by 52 per cent; automotive parts, by 69 per cent; chemicals by 70 per cent; industrial machinery, by 25 per cent; lumber, by 146 per cent.


Some hon. Members:: Order.


Mr. MacDonald (Egmont):: Don't be such a phony.


Pierre Elliott Trudeau: Are you not happy that trade is going well?


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


LEVEL OF CURRENT ACCOUNT TRADE DEFICIT
Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is also directed to the Prime Minister. He must feel that the entire nation is filled with Canadians who are naive, when he attempts to give an answer like the one he just gave. My question was with respect to the current account trade deficit. The figures the Prime Minister referred to are the merchandise trade figures, and when an estimated $8 billion of current account deficit is subtracted, one ends up with a $4 billion to $5 billion current account trade deficit.
After explaining that to the Prime Minister, would he indicate whether the current estimate is $4 billion, or is it even

February 27, 1978
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higher with respect to the current account trade deficit, bearing in mind that as our dollar hovers, now, around 89 cents, it is the current account trade deficit which may push it even lower unless the government does something to regain not only domestic confidence but international confidence in Canada's economic future?


Pierre Elliott Trudeau: Mr. Speaker, I imagine the hon. member is talking about the current account deficit, not about the trade deficit because, as he knows, there is no trade deficit. He is mixing the two terms. He has asked me a question-


Sinclair McKnight Stevens: Tell us about the current account deficit.


Pierre Elliott Trudeau: The figures which alarm the hon. member- one can understand why he is alarmed-show that there was a slight fall in trade performance in January over December.


Sinclair McKnight Stevens: Tell us about the current account deficit.


Pierre Elliott Trudeau: That is something else, Mr. Speaker.


Sinclair McKnight Stevens: Tell us about it.


Pierre Elliott Trudeau: Of course there is a current account deficit. We have said that in the House. We have explained that that is why we are calling on the stand-by credit. That is why we are trying to do something in the tourist area, where we have an enormous current account deficit.


Sinclair McKnight Stevens: How much?


Pierre Elliott Trudeau: I do not know how much tourist deficit there is, but certainly it is a substantial amount. That is why the first ministers and myself, just two weeks ago, undertook to act very seriously in this area.


Sinclair McKnight Stevens: How much is there in the total current account?


Pierre Elliott Trudeau: Mr. Speaker, will the hon. member ask a supplementary question?


Sinclair McKnight Stevens: Answer my question.


Pierre Elliott Trudeau: If the hon. member wants me to answer, Mr. Speaker, he should listen.


Mr. Speaker:: Order, please. The hon. member for St. John's West.


VALUE OF CANADIAN DOLLAR-CONCLUSIONS OF CONFERENCE BOARD OF CANADA
John Carnell Crosbie: I have a question for the Prime Minister, who seems to be full of electoral beans today. Does the Prime Minister realize that the Canadian dollar has been devalued by 26 per cent as against the Zambian kwacha?


Some hon. Members:: Oh, oh!


John Carnell Crosbie: Last year, I pointed out to the Minister of Industry, Trade and Commerce that devaluation of the dollar was not a permanent solution to our trade ills, but the minister rejected that and said that the devalued dollar, the "Chretien dollar", the dollar with the backside gone out of it, is the answer to our trade ills.
The Conference Board of Canada put out a report last week. I ask the Prime Minister whether he agrees with the conclusions in the report of the Conference Board that devaluation of the dollar is no permanent solution to our trade ills, and that growing deficits in manufactured goods, future large shortfalls in the oil and gas trade, deficits in service payments, including tourism, and the impact of negotiations with GATT, will have an adverse impact on our economic future.


Pierre Elliott Trudeau: Not only do we agree, but I said that very thing in my speech in the House last October when I indicated that devaluation of the Canadian dollar might be a temporary solution, provided we accepted the judgment of the world markets that this meant we have to work harder to perform better, and thus be more competitive. It is good that the hon. member understands this; it might lead him to the conclusion that he would be unwise to speculate on Zambian currency as against Canadian currency. But if he wants to do it, it is his own dough and he can do it.


John Carnell Crosbie: I do not intend to do the cha-cha with the kwacha with the Prime Minister. I am glad the Prime Minister understands these matters, but it is too bad he does not act on them. I ask the Prime Minister this question. Statistics Canada, in their advance estimates for 1978, show that the total of capital expenditures this year in all sectors of the Canadian economy will increase by only 4.8 per cent above 1977 figures. The figures for 1977 were 7 per cent higher than those for 1976, that is, less than the inflation rate; new construction will have a 4.8 per cent gain over 1977-and 1977 was a desperate year- and this increase is below the 8.1 per cent advance in 1977. The same with capital expenditures-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


John Carnell Crosbie: This is not the Liberal convention. We have Mr. Speaker here to keep order. These forecasts paint a very grim economic picture for this year. Has the Prime Minister any response to these very disturbing forecasts by Statistics Canada? These are not Liberal party statistics.


Pierre Elliott Trudeau: Mr. Speaker, in order to interpret those figures, I would have to know if the percentages the hon. member gave are in real terms or in money terms. If they are in real terms, that is good, and I thank the hon. member for bringing them to the House.


John Carnell Crosbie: They were in money terms.

February 27, 1978


JOB-CREATING PROGRAMS-GOVERNMENT'S INTENTION TO INTRODUCE
John Edward Broadbent: Mr. Speaker, I would be happy to help the Prime Minister in interpreting this question. The figures given refer to a forecast by Statistics Canada in real terms and indicate a net decline in investment for 1978 of about 3 per cent. Considering that the government's own document produced for the first ministers' conference said that an average of at least a 7.3 per cent increase was required in 1978 to produce the 300,000 new jobs which are necessary, can the Prime Minister indicate whether the government intends to bring any new job-creating programs before parliament?


Pierre Elliott Trudeau: Mr. Speaker, I have not seen this forecast: I will gladly look at it. If it is only just out, I suppose it was available in some form to the government two weeks ago when we spoke to the first ministers. Therefore, I think the actions and policies we have brought forward are meant to deal with this precise situation.


John Edward Broadbent: Mr. Speaker, by his answer the Prime Minister has compounded the problem. If the figures were available to the government two weeks ago at the time of the first ministers' conference, why did the Minister of Finance forecast that we would have an increase in investment of 7.3 per cent? In real terms, Statistics Canada says there will be a net decline in the neighbourhood of 3 per cent. The government has indicated that we need a minimum of 300,000 new jobs a year to bring unemployment down to 5 per cent by the beginning of 1982. With this level of investment we will clearly not do that. Manufacturing is operating at only 80 per cent capacity. The private sector did not respond to give-away programs last year, for obvious reasons: businessmen are not stupid; they are not going to expand operations if there is 20 per cent unused capacity.
Considering this very real and serious situation, will the government now allow tax cuts for consumers in order to stimulate demand for manufacturing? Will the government bring forward public investment programs for a shipping fleet on the east coast and for urban transit programs for our cities to produce jobs?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member is repeating the same lesson he has been giving us for the past month. The Minister of Finance and I have indicated to him that he is making the mistake of looking at this question in static terms. We had a first ministers' conference precisely because the situation was serious. All the first ministers, as well as myself, felt it very urgent to adjust our policies and to create a measure of confidence in falling price levels, in increased productivity and in a more competitive Canadian economic position. That is why we had that conference and that is why we are more optimistic than the hon. member, who prefers to look at past figures and present figures as though there has been no policy change.
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John Edward Broadbent: It is clear that the Prime Minister and his party are not at the radical centre of Canadian politics; they are at the dead centre.


Some hon. Members:: Oh, oh!


John Edward Broadbent: I am using Statistics Canada figures, which show that the private sector will not obtain the investment that is absolutely essential if we are to create jobs. Is the Prime Minister saying he would rather spend $4 billion-which is what we will spend on unemployment insurance next year in pay-outs to people for doing nothing-than invest so that people will have the opportunity to work?


Pierre Elliott Trudeau: Of course, that is not what I am saying. I am saying that this government is bringing forward policies and legislation which will create investment and jobs.


John Edward Broadbent: Where are they?


Pierre Elliott Trudeau: They are before the House.


Sinclair McKnight Stevens: There is nothing.


Pierre Elliott Trudeau: The pipeline legislation, for instance, is before the House. The NDP persists in feeling that we will not create jobs, but I can assure the hon. member that that is not the feeling of the country.


VALUE OF CANADIAN DOLLAR-REQUEST MUNICIPALITIES BE ASSISTED TO MEET COMMITMENTS
Mr. Gilles Caouette (Temiscamingue):: Mr. Speaker, I wish to put a question to the Prime Minister. He seems to forget that suggestions were made by members of the opposition and that the government is not quite willing when special rates are requested to transport ore from west to east so as to carry on our activities in Northwestern Quebec. However, the Minister of Finance stated during the weekend that the depreciation of the Canadian dollar was helpful for our exports, but he forgot to say that as a result of that same depreciation some twenty Quebec municipalities are unable to repay their loans made in Switzerland and abroad. Could the Prime Minister then tell us what he intends to do to help those municipalities meet their commitments abroad?


Pierre Elliott Trudeau: Mr. Speaker, the Social Credit leader is versed enough in monetary matters to know that when a currency depreciates in relation to another, it is due to the fact that this country is importing rather than exporting goods and services of all kinds. The reaction of the monetary system is to devaluate the currency of the country which is importing too much and is not exporting enough. This makes it possible to export at more competitive prices. In such a way, the economy can improve. This is why the Minister of Finance indicated that a devaluated dollar is warning the Canadian economy that it should be more com-
80031 -63

February 27, 1978
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petitive. This is the lesson which should be learned by the government and the opposition parties.


Mr. Caouette (Timiscamingue):: Mr. Speaker, I have a supplementary question. The purpose of the first question I directed to the Prime Minister was to find out what he meant to do for the municipalities which, because of the current dollar devaluation, are faced with the huge problem of not being able to reimburse the money they have borrowed in Switzerland and other countries. Therefore, I should like to know what, if anything, the Prime Minister can do to help these municipalities meet their commitments.


Pierre Elliott Trudeau: Mr. Speaker, the municipality, corporation or individual seeking a loan on a foreign market is aware that such a loan will be exposed to exchange fluctuation of both the Canadian dollar and the foreign currencies. This situation, which has been in effect since 1970, remains unchanged. For a few years, the Canadian dollar was worth more than its American counterpart; now it is worth less. The borrowers on foreign exchange markets are aware of this. They are also aware that, if the Canadian dollar drops in value, things will be more difficult, and that if it increases in value, they will be easier. Both situations have occurred over the past six or seven years, and borrowers are as a rule serious people who can assume their responsibilities.


David Réal Caouette: I should like to put one last supplementary, Mr. Speaker. As the municipalities are adult enough to know exactly where the problem lies, and as today they are up against the problem of reimbursing their debts which they cannot afford to do, I ask the Prime Minister what he intends to do and if he will finally accept to help those municipalities finance themselves here in Canada, instead of being forced to borrow money abroad, by granting them interest free loans or privileged rate loans from the Bank of Canada?


Pierre Elliott Trudeau: Mr. Speaker, two things are important: first, and the hon. member knows it full well, the municipalities do not fall within federal jurisdiction. When they borrow, municipalities do so under provincial laws or authorization. We have no control over those loans whether it be where they are made, the interest rates that apply, the amounts or the terms. We have no control whatsoever in those fields. If a problem exists, the municipalities can go to the provincial government.
As for the Bank of Canada lending without interest, I explained not so long ago, barely a month ago, to the hon. member, that when the government of Canada borrows from the citizens, it pays them interest: When the leader of the Social Credit Party buys savings bonds, he receives interest from the government: in other words, the government itself pays interest. So, clearly, when individuals or municipalities borrow, they must pay interest.


AGRICULTURE
Mr. James A. McGrath (St. John's East):: Mr. Speaker, 1 should like to direct a question to the Minister of Agriculture: it is prompted by a statement made last week to the Food Conference by the Minister of National Health and Welfare to the effect that the country is facing a nutrition crisis. Given that fact, and the importance of powdered skim milk in the diet of low income and fixed income people in Canada, declining farm incomes and rising food prices, would the minister explain to the House and to the country why he decided at this time to remove the consumer subsidy from skim milk powder?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I think it was based on the use of skim milk powder and whether the subsidy was doing the things we wanted it to do. Statistics Canada has taken a survey of over 3,000 families which shows that this subsidized product was not being used by the poor people it was intended for; the biggest percentage was used by middle income people or those who could afford the other type of product.
Instead of consumption of this product increasing because of its low price, it continued to go down. This amazed us, because so many told us that the right thing to do was to make sure this product was available to people on low income. It should also be noted that government programs such as indexing and transfer payments provide more income for low income families. It is estimated that indexing of family allowances, old age security pensions, guaranteed income supplements and other-


Some hon. Members:: Order.


Mr. Speaker:: Order, please. A supplementary question; the hon. member for St. John's East.


James Aloysius McGrath: Mr. Speaker, I do not think the minister is going to talk his way out of this one, as it defies explanation. I ask the minister who I know has a human heart beneath that gruff exterior if he would explain to the House what measures the government intends to take to ensure that the subsidy on powdered skim milk, an important dietary element to most Canadians-including those on middle or low incomes-is replaced, given the fact that it will mean an approximately 40 per cent increase in the price of powdered skim milk in this country for people who can least afford it.


Eugene Whelan: Mr. Speaker, the hon. member may not have thought that what I was saying about indexing pensions, transfer of payments, etc., was important; But they are for the poor people too. In 1977, transfers to low income people amounted to $589 million-not the $13 million with which we were subsidizing skim milk powder, but there was an equivalent of $589 million more to benefit the poor peole of our country so they could make their own purchases in their own manner.
February 27, 1978

We are trying to develop a program, with the Department of National Health and Welfare and others, to make the product available to people in the far northern regions of our country who cannot receive liquid milk. I was most disappointed that the program was not more successful in getting nutrition to the people who need it most, because this came out of my departments' budget and I thought it was the right thing to do. It turned out that the people using this product were those who could afford fluid milk, so the program has cost the government more money than it should because we were making powder and butter. When you sell fluid milk, you do not have those extra costs which are such a tremendous burden to the dairy industry and to the federal and provincial governments.


James Aloysius McGrath: A final supplementary question. Would the minister explain to the House the economic results of his actions? Why will Canadians now pay more for powdered skim milk than consumers in Japan, for the same Canadian product?


Eugene Whelan: Mr. Speaker, whatever Japan does with the product is up to them, but I would doubt we would be paying more than Japan because in actual economic jargon what Japan is doing is buying it at world market prices. Whether they buy the surplus product from us or from the European Community, in most instances they are putting it on their domestic market at a higher price than we are putting it on our domestic market.
Mr. Speaker, I think it is significant that consumption of this highly nutritional product was 43 million pounds two years ago, and it appears we will be lucky if it is over 26 million pounds this year. All these people who spread doom and gloom about the buying power of our people should check the statistics. They would find that only 10 per cent of our people live below the poverty line. That is a drop from 20 per cent in just a few short years.


FISHERIES
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, my question is for the Minister of Fisheries and the Environment: it has to do with the Freshwater Fish Marketing Corporation and, in particular, two affidavits which I sent earlier today to the minister. In light of the statements made in those two affidavits, would the minister now indicate to the House whether he will immediately put in place an investigation into the marketing practices and financial arrangements of that corporation?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, not only have I received a letter from the hon member indicating that he would ask these questions, but I have also seen the clippings from the Winnipeg Free Press, in which he has obviously orchestrated some kind of
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campaign announcing that affidavits might or might not come. By the way, these affidavits have nothing to do with marketing. If what is contained in the affidavits is perceived by the hon. member as being correct, and if he is interested in these matters being investigated, the least he should do is to give them to the attorney general of Manitoba.


Dean Waldon Whiteway: Mr. Speaker, my supplementary question is directed to the same minister. I am not in a position to editorialize on these affidavits; they are statements made by persons who were employed there at one time. Does the minister intend to act within his jurisdiction and responsibility and direct an inquiry into these marketing procedures? Pertaining to statements in the affidavits as to certain actions by top executives of the corporation, does he intend to use his responsibility to institute a full investigation?


Roméo LeBlanc: Mr. Speaker, the hon. member says that he does not want to editorialize. I certainly hope he does not want to smear individuals. The fact is that the Auditor General is the auditor of the Freshwater Fish Marketing Corporation and he has in the past given the corporation a clean bill of health from an accounting point of view. Obviously, if these allegations have substance, they should be checked or challenged. I am not a lawyer, but if they have substance I assume they should be the subject of some action by the attorney general of Manitoba.
If they are not substantiated, I would hope that the hon. member would at least stop smear and innuendo against persons who are employed and who could very well be employed in something else but who were working day and night trying to improve the conditions of the freshwater fish marketing industry.


Dean Waldon Whiteway: Mr. Speaker, I have a supplementary question to the same minister. In view of the fact that the minister responsible in the province of Manitoba has asked the federal minister for such an investigation, is it the intention of the federal minister, who has the power to initiate an investigation, to do so at the request of the provincial minister? Is that your intention, sir or is it not?


Roméo LeBlanc: Mr. Speaker, my understanding is that the minister from Manitoba has a view of the marketing corporation which is a view not shared by the board of the marketing corporation, four of whom are fishermen and the others are representatives from various provinces involved in the corporation. This is an honest difference of opinion and it has to be met by the board. It is, in fact, being met by the board. Surely the hon. member is not asking me to go behind the back of other provincial ministers and to call inquiries and audits on the basis of allegations and affidavits regarding which he has not had the courage to at least name the sponsors.
80031 -63(4

February 27, 1978
Oral Questions LABOUR CONDITIONS


ANNOUNCED LAY-OFFS AT IRON ORE COMPANY OF CANADA- GOVERNMENT POSITION
Mr. William Rompkey (Grand Falls-White Bay-Labrador):: Mr. Speaker, my question is to the Minister of Employment and Immigration: it has to do with announced lay-offs at the Iron Ore Company of Canada plant in Labrador City, because of down-time, some time early in the summer. I ask the minister, in view of the effect this will have not only on the economy of the area but on the economy of the province which is hard hit already, what steps he can take within his depar-ment to help avert these proposed lay-offs. In particular, would he consider setting up a joint consultative committee of union and management to investigate thoroughly the reasons for the lay-offs and to attempt to find alternatives?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, it would probably be incorrect for me to say that we can take action that might avert these particular lay-offs. I can say that our manpower consultative service people are meeting with the company today, and it would be my hope that they would see fit to set up a manpower consultative committee in the interests of assessing what can be done for the individuals who are laid off, or who face lay-off.


PURCHASE AND SALE OF IMPORT QUOTAS FOR TEXTILES AND SHOES
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is to the right hon. Prime Minister. Can the Prime Minister advise this House whether he is aware of a domestic market building up in the sale and purchase of textile quotas, brought about because of the quotas that were imposed approximately a year ago?


Pierre Elliott Trudeau: Mr. Speaker, 1 was not aware of that situation, but I will ask the Minister of Industry, Trade and Commerce to take note of that matter and look into it.


John Allen Fraser: Mr. Speaker, my supplementary is to the Prime Minister. Could he could also tell the House whether he is aware of a similar situation building up with respect to quotas granted for the imports of shoes? I am referring specifically to textiles and shoes of styles and prices which cannot be attained in Canada and for which there would not be any infringement on the domestic market in so far as Canadian producers are concerned.


Pierre Elliott Trudeau: Mr. Speaker, I thank the hon. member for drawing this question to my attention.


FINANCE
Marcel Joseph Aimé Lambert: Mr. Speaker, my question is for whoever may be subbing for the Minister of Finance. Is it the first acting minister of finance, the second acting minister, or the parliamentary secretary? With regard to bringing in for first reading the amendments to the Bank Act, statements were made almost a month ago that these were expected in the middle of March. Is the government prepared to say when this legislation is to be brought forward for first reading?


Mr. Ed Lumley (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, the minister has not changed his position from the answer he gave the hon. member in the committee meeting a month ago.


Marcel Joseph Aimé Lambert: My supplementary question is this. At that time the government announced that the amendments to the Bank Act would be introduced in the middle of March. That was a month ago. Is the date still the same? The bill was sent to the Department of Justice for technical drafting. Is anyone from the Department of Justice prepared to answer, Mr. Speaker, as to how long this technical drafting is to take, or is it simply that this document is to be kept away from the House until after Easter, in anticipation of a possible election call?


Edward C. Lumley: Mr. Speaker, the minister hopes, and it is still his priority, that amendments to the Bank Act will be introduced during the month of March.


LABOUR CONDITIONS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, my question is for the Minister of Employment and Immigration. It concerns the Slave River sawmill at Fort Resolution, Northwest Territories, and the recent submission to the minister's department for refinancing under the emergency response program. Can the minister report any progress on this matter to the House?


Jack Sydney George (Bud) Cullen: Mr. Speaker, as a result of that representation we looked at the matter favourably. However, because of the sum of money involved we require approval of the Treasury Board. 1 am not certain at this point whether that request was heard on Thursday. I will check it out and reply to the hon. member today.


Walter (Wally) Firth: My supplementary question is this. I ask the President of the Treasury Board when we may expect an answer on the submission regarding the sawmill operation at Fort Resolution, Northwest Territories, since he may be familiar with this application.
February 27, 1978


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, I have not seen the submission. I will inquire from the department concerned.


NATIONAL SECURITY
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, my question is for the Solicitor General. Has he been able to satisfy himself whether Mr. Warren Hart has received money for the work he was doing in Canada related to security matters? Also, can he indicate whether the names of certain RCMP members mentioned by Warren Hart appear in immigration and other files and whether there is evidence, according to some of the material which was indicated to the minister previously, that aliens were taken across the border, in particular one Ferdinando Melito?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I am in a position to indicate to the hon. member and to the House that, indeed, Mr. Hart has been in the employ of the RCMP. The other aspect of the hon. gentleman's question is one to which, of course, I shall be directing my attention.


Elmer MacIntosh MacKay: I appreciate the minister's answer. I should now like to ask a question related to the same general subject, that is, the activities of an undercover police informer. Has the hon. gentleman been apprised of an investigation regarding a Mr. C. Wagner about whose position a representative of CTV contacted Inspector Rod Stammler, resulting in an investigation which is apparently shaping up to the point at which CTV is reportedly threatened with charges, along with Mr. Jim Reed who investigated some of these matters?


Mr. Blais:: The hon. member spoke to me about this matter before I came into the House. I have no additional information to provide at this time.


WARREN HART-RELEVANCE OF IMMIGRATION FILE TO DEPORTATION
Arthur Jacob (Jake) Epp: A supplementary question to the Minister of Employment and Immigration. Has the minister been fully briefed on Mr. Warren Hart's immigration file, and can he tell us whether the stated grounds for his deportation correlate with the background in that file?


Jack Sydney George (Bud) Cullen: Yes, Mr. Speaker, I have reviewed that file. I am satisfied that the deportation order with respect to Mr. Hart in 1971, the refusal of his application for student status in 1972, and the refusal of his application for immigrant status in 1976, were legal and that regular procedures were followed. I am also satisfied that immigration officials did not knowingly
Oral Questions
grant the entry of Mr. Hart to Canada in violation of the Immigration Act. However, we have received a request from the McDonald commission to forward a file and I have written today to Mr. Justice McDonald. Perhaps I should quote from that letter:
It appears, however, that on several occasions after his deportation immigration officers became aware of his presence in Canada but, contrary to the provisions of the Immigration Act, did not take prompt action to apprehend and deport him because they were aware of the RCMP interest in him.
I felt this matter should be brought to the attention of the commission, so I have done that in addition to sending our headquarters' file.


Arthur Jacob (Jake) Epp: Would the minister table that letter, since he has quoted from it at some length? In light of the minister's answer and the dates he gave, would he indicate the terms under which Mr. Hart was admitted to Canada on December 1, 1975?


Jack Sydney George (Bud) Cullen: The information I have is that Mr. Hart, being an American citizen, came here as a visitor in the same way as any other American might do. It came to our attention that he had overstayed the period allowed for such visits, and a deportation order was made on that basis. As far as tabling the letter is concerned, I have a copy of it and I am quite prepared to accede to the hon. member's request.


Mr. Speaker:: In response to the point of order raised by the hon. member for Provencher, it being in keeping with precedence, the minister is now at leave to table the letter.


CANADIAN CULTURE
David Samuel Horne MacDonald: Mr. Speaker, I have a question for the Secretary of State. Last fall, as he may recall, I raised the problem caused by the loss of thousands of dollars to Canadian authors and publishers through the importation of American editions of Canadian books. At that time, both the minister and the parliamentary secretary assured me that the problem could be overcome by means of schedule C of the Customs and Excise Act.
Is the minister aware that copies of a popular Canadian book entitled "Book of Eve", by Constance Beresford-Howe, published by MacMillan of Canada, have been on sale in Montreal and Toronto despite its being listed a year and a half ago under schedule C, and that in response to complaints by the author and the publisher, legal counsel for both Revenue Canada and the Department of Consumer and Corporate Affairs have stated they will not take action because, they claim, schedule C does not specifically encompass books? May I ask what action the minister is taking to rectify this situation, or what action he is recommending to his cabinet colleagues?

February 27, 1978
Oral Questions


Hon. John Roberts (Secretary of State):: I thank the hon. member for drawing this matter to my attention. I will look into it with the utmost dispatch.


David Samuel Horne MacDonald: Mr. Speaker, the Minister of Consumer and Corporate Affairs is not here today, but since neither his department nor the Department of National Revenue has been able to act in this instance, I wonder whether some commitment might not be made through the acting minister or the parliamentary secretary either to introduce appropriate amendments to the Copyright Act or to undertake a test case, as was earlier suggested by Canadian authors, with respect to this serious situation.


Mr. Alan G. Martin (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: As the hon. member may be aware, it is proposed that amendments to the Copyright Act will be coming forward at some time in the future, and I will certainly bring his representations to the attention of the minister.


FISHERIES
Jack Marshall: Mr. Speaker, my question is to the Minister of Fisheries. In view of the fact that one, Brian Davies, was able to persuade one Newfoundlander to bring discredit to his province by indicating at press conferences in London and Paris that a goodly number of seals were being skinned while alive, I wonder if the minister has investigated that charge, and what action does he intend to take in the matter?


Roméo LeBlanc: We obviously have no evidence of this situation having arisen. I might say that if Mr. Brian Davies wants to skin an animal of the shape and size of seal while it is alive, it is quite a challenge to anybody's skill. We have no evidence of that whatsoever.


Jack Marshall: I am sure the minister accepted that my question was a serious one. In view of the fact that the motion I placed before the House today was not accepted, and in view of the hostility which could occur at the seal hunt this year because of the bad publicity, I wonder if the minister would indicate, by wider publicity of the amendments to the Fisheries Act which were accepted by the government last year, that this will be given the widest publicity and people will be warned of the violation and penalties that could be inflicted on violators? Would he do that, because there are only a few days left before the seal hunt starts?


Roméo LeBlanc: I assure the hon. member that I did take his question very seriously. I read the text of the motion he sought to present, and had I been in my place at the time I would have said yes. The fact is that we have, by an order in council which will be published in a

special Gazette, issued the regulations under which access to the seal hunt will be permitted. It will be under permit as parliament approved last year, and the regulations will be fully publicized. I hope there will be no confrontation. We have no interest in stopping legitimate observers from appeariang on the ice floes, including those who do not share our views about the seal hunt. What we want to avoid is interference with a legitimate activity of Newfoundland and Magdalen Island fishermen.


AGRICULTURE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I have a question for the Minister of Agriculture in connection with the price of skim milk powder. Skim milk powder will now cost about 40 per cent more in Canada as a result of the removal of the subsidy, a price which is about five times the world price. I know that the Consumers' Association of Canada were not consulted, and I know the dairy farmers were not consulted. Could the minister tell us whether, before taking the action he did, he consulted the Minister of Consumer and Corporate Affairs, and did that minister agree?


Eugene Whelan: Skim milk powder will still be much cheaper in Canada than fluid milk: the honourable member knows this. What he is trying to get across is that it is above and beyond the purchasing power of the vast majority of Canadians, which is not true; they will still be able to buy it. It is not the intention of the government to produce a surplus and just throw it on the world market and try and recoup what it can. We are curtailing our production for our domestic needs in order to meet our food aid programs across the world and aid needy people who cannot afford the high domestic price for it, as we have always done.
As I said earlier, in just one year we have put $589 million more into low income programs. When the hon. member suggests people cannot afford to buy skim milk powder, I do not know what he is talking about, and I do not think he does, either.


Some hon. Members:: Oh!


Lorne Edmund Nystrom: Mr. Speaker, last week in this city a conference on food took place and one of the themes of that conference was the desirability of consulting all those in the food industry. My question was whether or not the Minister of Consumer and Corporate Affairs was consulted. The dairy farmers were not consulted; neither was the Consumers' Association.


Eugene Whelan: All my cabinet colleagues were perfectly aware of the programs which we were initiating, because of the consultation process under which we operate when putting forward our estimates. Of course, when we are putting forward our estimates, we do not have the leeway to make it possible to

consult on every little item. I might add that a survey was taken recently to determine how the subsidy was being used in this country and who was benefiting most from it. To our amazement, we found it was not the poor people who were benefiting and consuming the most, but middle income and richer people who can well afford to pay the present price for the good milk we are producing in this country.


SOCIAL SECURITY
Eudore Allard: Mr. Speaker, since the Minister of National Health and Welfare is absent, may I direct my question to the right hon. Prime Minister?
Considering that since the 1974 election about ten federal-provincial conferences have been held on the subject of welfare, and in particular on the minimum guaranteed income and that, if I remember right, during the last federal election there was an undertaking that legislation establishing the minimum guaranteed income would be introduced, my question is the following: I would like to ask the Prime Minister whether he intends to carry out his undertaking and when he intends to introduce that bill.


Pierre Elliott Trudeau: As a matter of fact, Mr. Speaker, there were several federal-provincial conferences of ministers responsible for health and welfare. I know that the then minister, the hon. member for Outremont, in his meetings with the provinces, made quite a lot of progress, towards a formula which would enable us to go in the direction mentioned by the hon. member. However, I shall refer the question to the present Minister of National Health and Welfare to have a report which is more up to date and I shall draw her attention to the hon. member's question. Perhaps he might ask his question again tomorrow.


PUBLIC SERVICE
Walter David Baker: Mr. Speaker, my question is for the President of the Treasury Board. In November, 1977, and again in January, 1978, I asked the minister whether he would be tabling in this House the report of the Public Service Commission with regard to the problems of handicapped people entering and working with the public service. I know he has had some difficulty. Can the minister advise what the difficulty is, why it has not been reported and was not tabled in this House today, and when does he expect it
Oral Questions
to be tabled, because it is important in this continuing dialogue that must go on in the community with regard to the problems of handicapped people? It contains important recommendations. When will we see it?


Robert Knight Andras: Mr. Speaker, I will be very frank with the hon. member. I regret that it has not been tabled. I expect to table it within the next week or ten days. One of the problems has been that I was somewhat preoccupied with other responsibilities during that period. The hon. member has rightly reminded me of the report and its importance-an attitude I fully share. What I am attempting to do now is look very carefully at possible responses so that we will not, in fact, come out with a suggestion of further studies which, of course, the hon. member agrees we should not do, or the recommendations of the report that we should not.
I do not want to raise false or unfulfillable expectations. I want to be quite responsible, as the hon. member would want me to be, at the time I table it in order to be able to give some kind of response of the government which will lay before us all possible answers to this pervasive problem.


Walter David Baker: Mr. Speaker, did I hear the minister correctly, that he will be tabling the report? Certainly, that is the way this dialogue should begin, with the expectations and the reasons for action examined. Did I hear him correctly, that he intends to table it? If I did, when?


Robert Knight Andras: Mr. Speaker, I said that I intend to table it. I am hopeful of being able to develop a response as to the recommendations at almost the same time, so that expectations emanating from the report will not be beyond our ability to fulfil in terms of expenditures at this time. However, that will be within the next week or ten days.


POINTS OF ORDER
Jack Sydney George (Bud) Cullen: Mr. Speaker, I rise on a point of order. In a question to me by the hon. member for Provencher (Mr. Epp) I believe he mentioned the month of December for the deportation order. I want my answer to be as full and complete as possible. The situation is that Mr. Hart came into the country in the spring of 1971 to act as an informant for the RCMP. We were not aware of this fact until December, when the deportation order was made. I wanted to give full information to the hon. member.


MR. ALEXANDER-PROCEEDINGS DURING QUESTION PERIOD
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I rise on a point of order. I just want to draw to Your Honour's attention the fact of the flagrant abuse of the question period

February 27, 1978
Oral Questions
by two ministers in particular, the Prime Minister (Mr. Trudeau) and the Minister of Agriculture (Mr. Whelan), was particularly noticeable today. On several occasions I have heard Your Honour indicate to both sides of the House that questions should be sharp and short. I submit that this is what occurred this afternoon.
I noticed on several occasions that Your Honour attempted to admonish not only the Prime Minister but the Minister of Agriculture who were flagrantly-I do not want to use the word deliberately-abusing the question period by making statements which should come on motions. It is not up me to tell the Speaker how this House should be conducted.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: However, it is my duty to bring to your attention, Mr. Speaker, and to other members of the House that this type of action cannot continue, because we will have a breakdown. You, sir, have indicated this on several occasions in the past month and a half.


Some hon. Members:: Oh, oh!


Lincoln MacCauley Alexander: The Prime Minister is again being a smart alec. He had a little three-day convention and he had Trudeau-mania within the Chateau Laurier-


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: -but he has despair, discontentment and disillusionment around the country. I will now close my argument, hoping that when the donkeys quit braying, you will have an opportunity to give some input to my point of order, particularly with regard to chastising and admonishing the Prime Minister, the Minister of Agriculture and other ministers who are flagrantly abusing the question period.


Mr. Speaker:: Order, please. With respect to the point of order raised by the hon. member for Hamilton West (Mr. Alexander), my recollection is that today I extended about equal leniency to both sides of the House. I invite the hon. member to examine the transcript to see that. However, I will be glad to accept his invitation to come down a little tougher tomorrow on both sides. But it will be on both sides, not just one.


MR. PAPROSKI-MOTION OF HON. MEMBER FOR VANCOUVER EAST
Steve Eugene Paproski: On a point of order, Mr. Speaker, so there will be no misunderstanding, I said to the motion by the hon. member for Vancouver East (Mr. Lee) that this motion is not true and it should be debated.



ROUTINE PROCEEDINGS


[Stage Direction]
First report of Standing Committee on Public Accounts- Mr. Huntington.
[Editor's Note: For text of above Report see today's Votes and Proceedings.]

Jack Sydney George (Bud) Cullen: Mr. Speaker, pursuant to Standing Order 41(2) I should like to table, in both official languages, the immigration agreement entered into between Canada and the province of Saskatchewan.


David Samuel Horne MacDonald: Mr. Speaker, I rise on a point of order with respect to the document just tabled by the Minister of Employment and Immigration (Mr. Cullen). Is it going to be the practice of the minister to table from time to time these important documents with respect to immigration agreements between the federal government and the provinces without any opportunity for the standing committee to examine the regulations that will come into effect shortly? I find this to be a strange abuse of governmental responsibility.
When we discussed Bill C-24 it was my very clear understanding that the standing committee would have an opportunity to review those regulations before they went into effect. We are now in the situation of having the minister table the agreements with the provinces, with no chance to review even the regulations that are going to come into force which will affect those agreements and the over-all functioning of Bill C-24.


Jack Sydney George (Bud) Cullen: Mr. Speaker, rather than being discourteous to hon. members, when I was before the committee I provided them with rather extensive notes on the regulations to be passed pursuant to the Immigration Act. In addition, some two months ago, early in January in any event, I sent around to each member of parliament the regulations that would be passed, and pointed out the necessity of tabling them in the Gazette. I have not had one representation from any member of the House since January 3 with regard to the content of these particular regulations.
I thought I was being courteous to the House by indicating to it that notwithstanding whether I do or do not have a requirement, I made this information on the agreements available to members of the House so that they would have all of the information possible pursuant to the provisions of the act.


David Samuel Horne MacDonald: Mr. Speaker, I rise on a question of privilege. I know that the minister would not want to

February 27, 1978

misrepresent the position of my colleague, the hon. member for Provencher (Mr. Epp), our spokesman on immigration. On two separate occasions since those regulations have been presented by the minister, my colleague asked that they be referred to the standing committee. The minister refused twice to have that happen. Therefore the situation is not as stated by the minister. There has indeed been a very clear request by the official spokesman of our party to have these reviewed by the standing committee. We have had no such opportunity. I find it strange the minister has refused it.


Mr. Speaker:: Order, please. The hon. member is engaging in argument. It has nothing to do with privilege.
Order Paper Questions


Hon. Iona Campagnolo (Minister of State (Fitness and Amateur Sport)):: 1. As of October 20, 1977, there was one person under contract to Loto Canada Inc. He was a retired public servant.
2.	(a) Not applicable, (b) During the fiscal year 1976-77, $183,490.93 was paid to persons under contract. This took place during Loto Canada's start-up phase so that a very large majority of these individuals are no longer associated with the corporation. None of these, to our knowledge, was a retired public servant.


KATIMAVIK-ENROLMENTS, PROJECTS AND PARTICULARS CONCERNING NEWFOUNDLAND
[Stage Direction]
* *
*

[Stage Direction]
On the order: Government notices of motions:
Feb. 23-The Deputy Prime Minister and President of Privy Council-The following proposed motion:-That the Annual Report of the Department of Veterans Affairs, the Reports of the Chairmen of the Canadian Pension Commission, Pension Review Board, and War Veterans Allowance Board, and the Report of the Bureau of Pensions Advocates, for the fiscal year ended March 31, 1977, tabled on November 14, 1977, be referred to the Standing Committee on Veterans Affairs.
Mr. MacEachen:: Stand.


Mr. Speaker:: Pursuant to Section 2 of Standing Order 21, this government notice of motion is transferred to and ordered for consideration under government orders later this day or at the next sitting of the House.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.) [Translation]
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: 225, 1,091, 1,130, 1,157, 1,158, 1,167, 1,229, 1,246 and 1,287.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. McKenzie: 1.	What is the total number of persons under contract to Loto Canada Inc. and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?

Question No. 1,091-Mr. Marshall:
1.	How many young Canadians have applied to enroll under DND Programme KATIMAVIK?
2.	How many were (a) accepted (b) rejected?
3.	As of December 31, 1977, how many are still enrolled and how many have dropped out of the Programme?
4.	What are the 30 communities involved in KATIMAVIK?
5.	How was the project publicized in the Province of Newfoundland?
6.	How many applications were received from the Province of Newfoundland and how many were (a) accepted (b) rejected, and for what reason?
7.	What is the allocation of funding under KATIMAVIK, by province?


Hon. Barney Danson (Minister of National Defence):: 1.
KATIMAVIK is not a DND programme. The programme is managed by a private non-profit corporation which reports to Cabinet through the Minister of National Defence. However, the programme does offer a military option under the aegis of the Department of National Defence. The statistics in regard to the total programme as well as the military option are as follows: Number of applicants, 3,375; number invited for interview, 2,996; number reported for interview, 1,596; number enrolled, 1,137; number who selected military option, 112; number enrolled under the military option, 79.
2.	See Part 1 above.
3.	Total programme, 921; military option, 63.
4.
Terra Nova, Newfoundland Breadalbane, Prince Edward Island Halifax Citadel Clare, Nova Scotia
St. John, New Brunswick Tracadie, New Brunswick Larouche, Quebec Coaticook, Quebec Baie Comeau, Quebec Cabano, Quebec Gatineau, Quebec Arundel, Quebec North Bay, Ontario Prescott, Ontario Timmins, Ontario Peterborough, Ontario
Grand River, Ontario Wasaga Beach, Ontario
Paint Lake, Manitoba
National Park
Institute of Man & Resources Parks Canada University of Ste. Anne & Municipality
Heritage Trust Association Caraquet Municipal Council Municipality Tourist Commission Conseil des Loisirs Le Sentier du Grand Portage National Capital Commission Municipality Conservation Authority Municipality Conservation Authority Conservation Authority Social & Family Services Conservation Authority Ministry of Natural Resources and Municipalities Provincial Park
3246

February 27, 1978
Order Paper Questions
Bakers Narrows, Manitoba Wilcox, Saskatchewan
Gravelbourg, Saskatchewan Yamnuska, Alberta Fort McMurray, Alberta Strathcona, British Columbia Kamloops, British Columbia 100 Mile House, British Columbia Chilliwack, British Columbia Yellowknife, North West Territories
Yukon, Yukon Territory
Provincial Park College of Notre-Dame & Town
Municipality Recreation Centre Municipal Planning Board Outdoor Education Centre School District Royal Canadian Legion Park Board
Environment Protection Service, Parks & Recreation Dept.
Atlin Historical Society, Dawson City Historical Society, Parks Canada
5.	Pamphlets and application forms at Manpower Centres, high schools, colleges and universities. Media interviews, Weekend issue magazine, Radio.
6.	For the total programme including the military option, 80. (a) 68; (b) 12. Reasons for rejection were as follows: lack of motivation towards the programme; basic criteria not fulfilled such as age, citizenship and marital status.
7.	There is no allocation of funds by province; provincial representation applies in the forming of teams and into the allocation of teams to regions. The regions and the number of teams are as follows: Atlantic, 6; Quebec, 6; Ontario, 6; Prairies, 7; Pacific, 5.


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


Hon. John C. Munro (Minister of Labour):: Although the Department of Labour is active within the Constituency of Nickel Belt, accounting procedures are such that a specific reply would entail a lengthy and costly examination of accounts, the cost of which in manpower and time would be prohibitive.
SNOWBLOWING EQUIPMENT FOR STEPHENVILLE AND/OR DEER LAKE, NEWFOUNDLAND AIRPORTS


Mr. Marshall: Were requests made to the Department of Transport for new snowblowing equipment for Stephenville and/or Deer Lake, Newfoundland Airports and, if so, was such equipment provided under the $2.5 million procurement programme to replace snowblowing machines, as per Department of Transport News Release No. 283/77 dated December 20, 1977 and, if not, for what reason?


Hon. Otto E. Lang (Minister of Transport):: The requirement to provide snowblowing equipment at Stephenville and/or Deer Lake, Newfoundland Airports, as for other Transport Canada Airports, is reviewed periodically. The result of the current review showed that the snowblowers held at these two sites are adequate to meet the workload commit-

ment for the next four years. Snowblowing equipment is not included therefore for these two airports in the $2.5 million procurement program announced in the Transport Canada News Release No. 283/77 dated December 20, 1977.


Mr. Marshall: 1.	What are the particular projects being carried out under FLIP as a result of the allocation of $633,000 to the Province of Newfoundland under the Department of National Defence?
2.	What is the breakdown, by districts, in the Province?


Barnett Jerome Danson: 1.
The projects are in the administrative support and general labour categories and will basically provide the following work: (a) clerical, and general office work; (b) brush clearing, snow removal, kitchen help, grass cutting, cleaning assistance and driving.
2. CFS St. John's, $153,000; CFS Gander, $377,000; CFB Goose Bay, $103,000. Total, $633,000.


Mr. McKinnon: What was the total cost to the Department of National Defence for commercial air transportation in 1977 for (a) military personnel (b) civilian personnel (c) material?


Barnett Jerome Danson: (a)
and (b) This information is not readily available since military and civilian travel expenditures are controlled on a decentralized basis, at units, stations, bases and headquarters. To provide this information would require a review of thousands of claims all over Canada and overseas. For this the department does not have the necessary resources, (c) Commercial air transportation costs of material is not recorded as a separate item from other commercial transportation modes, i.e. railways, therefore only an estimate based on percentage use can be made. The estimate for 1977 is approximately $700,000. However, commercial air transportation is only used when DND resources are not available.


Mr. Howie: 1.	How many persons are on the New Brunswick Provincial Liaison Committee of the Task Force on National Unity?
2.	Do they receive remuneration or travel expenses and, if so, in each case, in what amount?
3.	(a) In what manner was the liaison committee in New Brunswick selected (b) what are the members names and in which municipality does each reside?


Yvon Pinard: 2.	The committee members are volunteer and receive no remuneration for their services.
3.	(a) To select members of the New Brunswick Liaison Committee, the Task Force on Canadian Unity contacted directors of different organizations and citizen's groups, such as the Federation of Labour, numerous Chambers of Commerce, educational groups, etc. From the suggestions given by directors of the groups consulted, fifteen interested New Brunswick residents were selected in order to achieve optimum representation.
Mr. Doug Bannon	P.O. Box 2159 Station A, Moncton
Mr. Ned Belliveau	P.O. Box 1238 Shediac
Mr. David Blair	1234 Main Street Moncton
Mmc Blanche Bourgeois	C.P. 60 Cocagne
Mr. Bill Cooper	P.O. Box 295 Fredericton
Dr. Forbes Elliot	29 Maple Grove Terrace Saint John
Major Frank Ervin	29 Horton Road East Riverside Saint John
Mr. Bud Gerth	75 Anne Street Moncton
M. Fernand Landry	Case postale 878 Bathurst
M. Martin Legere	Caraquet
M. Denis Losier	80, rue Church Moncton
Jocelyne Losier	860, rue Main Moncton
Mr. Roland J. Lutes, c.a.	40 Charlotte Street Saint John
M. Marcel Sormany	42 avenue Fraser
Pere Roland Soucie	Universite de Moncton


Mr. Herbert: 1.	Is it the government's intention to introduce an amendment to the Bank Act obligating chartered banks to release funds to a client at a branch other than that at which the funds are held in the account of the client?
2.	Is it the government's intention to change the procedure by which a chartered bank can release funds frozen at the death of a client?


Edward C. Lumley: A number of changes to the Bank Act were proposed in the White Paper on Canadian Banking Legislation, released in August 1976. Numerous suggestions were received through submissions from interested parties, responding to the White Paper proposals or to perceived shortcomings in the banking system. The government has considered these suggestions, along with a large number of relatively detailed changes that were not discussed in the White Paper. All of the proposed amendments, including any changes to the White Paper
Bank Act
proposals will be made public at the time the bill to revise the Bank Act is introduced in Parliament.


Mr. Jones: 1.	How many M.P.'s and Senators are shareholders in the CPR Company or its subsidiaries?
2.	What are the names of these persons and the amount of their shares and what are the details?


Yvon Pinard: See Beauchesne's Parliamentary Rules and Forms, Fourth Edition, citation 171 (dd).


Mr. Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Allan Joseph MacEachen: that Bill C-16, to amend the Bank Act and the Quebec Savings Banks Act, as reported (without amendment) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
Allan Joseph MacEachen: that the bill be read the third time and do pass.


Marcel Joseph Aimé Lambert: Mr. Speaker, about a month ago 1 directed some questions to the Minister of Finance (Mr. Chretien) in the hope that I would receive a reply from the minister or someone speaking on behalf of the government. I did not really expect a reiteration by the parliamentary secretary of the same vague information given to the Committee on Finance, Trade and Economic Affairs. That information was to the effect that the information might be forthcoming around March 15. The minister said it was really out of his hands in that the bill had been sent to the Department of Justice for the drafting of a technical amendment.
I have before me a copy of Issue No. 7 of the evidence of proceedings before that committee, where at page 6 it is indicated that the decision had been taken after the receipt of briefs, and that this was a very complex piece of legislation.
80031-64'A

February 27, 1978
Bank Act
There may be some areas where it is complex, but of all the legislation I have seen and am familiar with, it seems to me the Bank Act is one of the clearest we have on the statute books, at least in its basic terms, and it has been in existence for a long time. 1 do not agree that this thing is very complex.
Of course we are not able to know what the government proposes to do as a result of its white paper and the representations it has received, but the minister has said that there is a technical amendment that has to be made, and that the bill has been sent to the Department of Justice.
It would be very interesting to hear from a representative of the Department of Justice what that department is doing about the revisions to the Bank Act. I did ask for such information, but the parliamentary secretary to the minister merely reiterated what had been said.
Why is the department hanging on to this bill? I would suggest in a straightforward way that the bill is being deliberately buried by the Department of Justice. Why would that be so? First of all, I think the government must be concerned about some of the recommendations it has received, it has seen, or will be seeing in the Bryce report on corporate concentration, and that report has been aborning a long time. It seems to me it has been in the hands of the government for some time. It is supposedly in the process of translation, but the government knows what it contains, and that may have caused the government to want to change the Bank Act.
We are reaching a very sensitive season. As of yesterday we have been told we can expect an election date at any time. If anything is to be proposed by the government in respect of the Bank Act which might upset a part of the Canadian community, then obviously the best thing for the government to do is leave those revisions buried in the drafting section of the Department of Justice until it is too late for them to affect this House or the opinion of the public.
The extension date to March 31 of next year must be taken in conjunction with the government's proposals in its white paper dated August, 1976. Those in themselves are modest enough and there is no fundamental revision to the Bank Act, or not to the extent I would like. I think what all this amounts to is a sort of tinkering based upon what has happened in the last ten years. There should be much more than that.
I am not going to repeat what I said during the second reading debate. The Bank Act in so far as it deals with the chartered banks is not too bad. However, with the growth of the near-banks, and they are even more permanent than they were ten years ago when changes were last made,-I am referring to the trust companies, some of which were founded in the 1960's and have grown into substantial institutions-we need some changes. These near-banks are not as big as the big five chartered banks, but they are substantial institutions and are engaged in the business of banking. No one will deny that they are engaged in the business of banking.
Some of the provinces are overly touchy about these nearbanks. They do not want trust companies operating under incorporation by and within the provinces to be touched by the

authority of the Minister of Finance or the Inspector General of Banks. However, the constitution speaks about banking, and these companies are engaged in the business of banking. The only thing they do not have is the formula under which they can increase the volume of deposits on the basis of a percentage of their reserves and cash. The same thing applies to les caisses populaires and credit unions. They are engaged in the business of banking, and I will discuss them a bit further later on.
These near-banks, in whatever form, want the advantages of the clearing system, but they are not prepared to commit their reserves, as do other chartered banks, small or large. There are credit unions in existence today which are larger and stronger than some of the new banks that have been incorporated in the last two or three years. They have been operating for a good length of time. There is no question about the fact that they are no longer in the infant stage. They have grown to fullblown adulthood. I am not objecting to that in any way. They have been well run, but they are in the business of banking. Therefore it seems to me anyone engaged in the business of banking should come under the Bank Act. There should be a Bank Act not just dealing with commercial banks but with the chartered banks as well.
I expressed the opinion that there should be a short debate on this bill. My colleagues have convinced me otherwise. The stated purpose was in order to receive some views about changes to come in banking at this time. That is not totally relevant to the bill, but in the tradition of the House if something can be brought in under the title of a bill, then debate will take place regardless of the rules of relevance. Be that as it may, the official opposition voted against this bill on second reading in order to express disapproval of the government's failure to come forward with amendments to the Bank Act. This bill is another illustration of the careless, slapdash attitude the government has toward economic problems. It is tied up with so many other things that do not assist in putting this country together, and do not work toward developing Canada's economic strength. Further development of our economic strength is necessary in order to afford people the frills they desire in an affluent society.
I should like to refer to government proposals made in regard to the Canadian payment system. This must be brought out in the open. This is the first time we have had a chance to debate these matters before the House. What is the Canadian payment system? The present system is run by the Canadian Bankers' Association. It is established under federal law, and its by-laws are subject to the approval of the Treasury Board. The system is highly automated, but it is on the verge of becoming outdated for two reasons. I should like to refer to the white paper which reads as follows:
The first reason is that inequities have developed in the system as the near banks, operating under legislation different from that under which the banks operate, have become important in the business of accepting orders for the transfer of deposits.
February 27, 1978

Anyone working in the clearing system of any bank can indicate what the volume of transfer deposits means. The credit unions and caisses populates are not geared to handle as yet their responsibilities in the clearance system. Any good banker who has worked in the main clearing system can indicate that.
The white paper continues:
While the banks have made provision for the clearing of the cheques on these institutions, thereby aiding them to gain their present status in the payment system, the near banks have no voice in the operation of the clearing system.
I think they should have a voice in the operation of the clearing system. They have been strong participants in the transfer of deposits.
It continues:
Neither do they have access to lending facilities of the central bank as do the chartered banks. On the other hand, the near banks have no obligation to maintain non-earning reserves against their deposit liabilities as do the banks.
The second reason why the present system is becoming outdated is that the making of payments is starting to evolve from a system based almost exclusively on paper transactions toward an electronic system in which paper transactions will have a less prominent role. The Government of Canada has already recognized that the near banks should be represented in the technical work that must precede the introduction of such a new system and they are represented in the committee now at work designing some of the specifications which will be required. These institutions have asked for and welcomed the opportunity to participate . ..
In the evolution of the payments system of today into the payments system of tomorrow, the economic interests of Canada will be served best by a national clearing system in which all of the institutions directly involved may participate and share the requisite rights and obligations in an equitable manner . ..
I think everyone in the House would agree with that. In principle, all the near banks would agree with this. Then arises the question of how to achieve this status and what it would cost. What would be the responsibilities? I am afraid there is a difference of opinion in that regard. It has been expressed to me in letters from some of the credit union federation since I last spoke on this bill. I respect some of the opinions expressed. In others the language was somewhat intemperate and was not becoming of those who signed the letters. When the Bank Act comes up for revision, those self-same people will be heard, as I will be too. We will have an opportunity to discuss and then decide what should happen.
There will be many colleagues on the committee interested in banking who will express views with which there may be some divergence. This dialogue should have taken place a long time ago. There is no reason why the former minister of finance, the hon. member for Rosedale (Mr. Macdonald), should have refused to let the white paper go to the Standing Committee on Finance, Trade and Economic Affairs. In the fall of 1976 the other House availed itself of the opportunity by adopting the simple expedient of referring the contents of the white paper to its banking committee. They conducted some good hearings and heard views from people from whom we should have heard. Because there was a conflict of stupidities in regard to the length of debate that could take place on second reading, this was not done here. I am sure there would have been extensive participation from both sides of the House on second reading, because the Bank Act only comes before the House every ten years. There are strong views held in
Bank Act
favour of varying conditions which apply across the country. The conditions in Alberta should not necessarily apply in the Atlantic provinces, nor in the province of Quebec where there is a greater influence in the credit unions and les caisses populaires, nor in any other province where there is not the same balance.
One of the big difficulties in the economic administration of this country is that the Bank Act lays down conditions for the operations of chartered banks. They should be the same from St. John's, Newfoundland, to Victoria, British Columbia; from the 49th parallel and those places south of it, right up to the north pole. It seems to me that in a while we can legislate for the operations of the chartered banks across the country on a uniform basis, yet there should be provisions in the Bank Act to give flexibility for the better operation of those institutions best suited for the development of the regions.
If rural Quebec prefers to have caisses populaires and credit unions, or if in the rural portions of Newfoundland co-operative credit unions are the best vehicle for the handling of business on a personal and commercial basis, then so be it, but they should all come under the Minister of Finance (Mr. Chretien) in so far as monetary policy is concerned, and their responsibility should be to the central system. That is the way the constitution foresees it in giving to the federal authority absolute jurisdiction over banking and money. Yet we see the side operations, which now represent a high portion of the total of the financial operations in the country, being beyond the direct control of the Minister of Finance and of the central bank. I do not think we are in a position as a country to deal in what I think is such a slipshod and loosely organized way as that.
I want to see our banking system, as I explained on second reading, much more responsive to the needs not only of today but of the next 25 to 40 years. As I said then, we operate the Bank Act on a Model T Ford mentality. Everything is based on how the old Model T used to go.
The Porter Commission in the 1950's and 1960's made a number of valid proposals. I do not think it went far enough because I do not think it looked at the whole of the banking system, but the conditions in Canada at that time were different from what they are now and the Porter Commission should be viewed in the context of the conditions that applied at that time and the experience of today. Today we are in quite a different world. Our population has increased, our business affairs have increased, the sophistication of our financial system has created new demands, but, frankly, our financial institutions have not been flexible enough to respond to this.
You can talk to businessmen in the United States and to many of our own businessmen who will tell you of their difficulty in obtaining easier financing so that it does not become a case of hawking one's gold teeth every time one requires financing, or borrowing your own money. A much greater degree of confident risk taking must exist. The small businessman today in this country is strapped by the condi-

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tions. I am not blaming the commercial banks. They have to change their philosophy as well, but we must also make available other systems to fit our requirements.
We need a money market in Canada. At present one has to go abroad. The framework and the circumstances most required for the development of that money market do not exist and cannot be created overnight. If the minister of finance at that time, the hon. member for Eglinton (Mr. Sharp), and the then inspector general of the banks had seen fit to allow merchant banks in Canada on a proper framework, we would not have had the kind of funny financing that goes on now. There is some merchant banking that takes place in Canada, but mostly by agencies of foreign houses.
The white paper speaks about the operations of foreign banks. Well, there is competition and our chartered banks welcome it, but there must be competition on a fair basis. I say, as I did on second reading, that in most of our major cities we have suitcase bankers. They come from the world over and they provide a remarkably large volume of funds required to meet conditions here in Canada. There is one difficulty, however. These people operate without supervision and entirely outside of any control so far as ethics or safeguards are concerned. They take money out of the country. It is proposed here that there should be some form of control, but this condition has become epidemic and it will go further by March 31, 1979. Of course, that is only a problematical date, I forecast, because it all depends on when the next federal election takes place.
If the bill comes in on March 15, it is a question of whether the present House leader will consider allocating time to a lengthy debate on second reading of the bill. The estimates are before the House now, and the House committees will be considering estimates, not legislation, and also there has to be a run-up period for public hearings. When will those public hearings take place? Would it be in May or June? What about an election or, if the election is deferred until the fall, when will those public hearings take place? The committee will make its report, and on that basis what will the government do? Will it just turn a deaf ear to many of the recommendations that the committee may make and insist, if God forbid it should be the same administration, that its original proposals should stand without any major amendments?
Then, when is the legislation to be passed? More important, we must give time to the various financial institutions to adjust their operations so that they can be in a position to carry on when the new legislation becomes effective. They cannot adjust casually to the requirements which may be made of them because, insofar as chartered banks are concerned, the Bank Act is their charter. If they cannot be in a position to operate legally under the Bank Act, they will be in contravention of it. That is not a profound statement, but the Bank Act is their charter, and it sets out the conditions under which they operate. I find it appalling that the government has adopted such a casual approach to the fundamental cornerstone of the

operations of the Canadian economic system. This cornerstone is viewed as an easy canter or a lazy waltz toward the objectives. I do not think that is good enough.
Let us go back to what the government proposed with regard to the Canadian Payments Association. There would have to be a companion act, incidentally, because the Bank Act in its present form deals only with chartered banks. There would have to be a Canadian Payments Association Act because near-banks cannot operate under an act which is limited and forms the charter of chartered banks only.
To give effect to the payments system of tomorrow it is proposed that a Canadian Payments Association be established by companion legislation to the Bank Act. All institutions in Canada accepting deposits transferable by order will be required to join the association. That means trust companies, caisses populaires and credit unions. All members of the association will have certain rights and obligations. They will have the right to offer checking facilities to their customers. They do that now. They will have the right to have checks and perhaps certain other items cleared through the national clearing system. However, they do that now in a limited way in that this is handled in an account within one of the chartered banks which itself is a member of the clearing system. Near-banks are not.
Members will be expected to co-operate in the effective running of the system and to share its operating costs. I think that is quite right. If you are a member and you have a say about operations, you should be prepared to pay some of the costs. I do not think anybody really objects to that.
To assure all members that their associates are maintaining a sound financial condition, all members will be required to belong to the Canada Deposit Insurance Corporation, to be insured by the Quebec Deposit Insurance Board, or, in the case of credit union centrals and caisses populaires federations, to be members of the Canadian Co-operative Credit Society. I do not think that condition represents any obstacle. As a matter of fact I think everyone operating complies with these requirements, but here comes, shall we say, the nut on which some are cracking their teeth: members will also be required to maintain minimum reserve against specified liabilities in the form of Bank of Canada notes, in non-interest bearing deposits at the Bank of Canada or, in some cases, with other members of the association. Finally, members will be obliged to meet other requirements of the Canadian Payments Association Act in areas such as reporting information.
Provincially incorporated institutions will in all other respects continue to be controlled by their provincial acts of incorporation and subject to provincial jurisdiction. The filing of financial returns, annual reports, lists of shareholders, or whatever the credit unions require of their member societies, will have to be done according to the regulations laid down within the various provincial statutes, but as far as the business of banking is concerned it is my view-which is not necessarily shared by all-that all such institutions should have common privileges and common responsibilities.
February 27, 1978

The white paper goes further to say that in order to give flexibility to the system and, indeed, to permit it to function as much like the present system as the members desire, it is proposed to permit any bank or non-bank member of the association to be either a clearing member or a non-clearing member. A clearing member will keep its reserve account with the Bank of Canada and participate in the clearings at the regional settlement points. A non-clearing member will elect to clear through a clearing member and may keep its reserve account with that member, in which case the clearing member will have to match the non-clearing member's reserve account by an equivalent amount in its account at the central bank.
It is anticipated that many members of the association will elect to clear through other members. I think so; they do that now. There already have been some difficulties in some of the smaller institutions and among near banks. It is felt that the assignment of some reserves to a known interest earning status will cause them some difficulties. I do not know. Unless I can be persuaded otherwise, it seems to me that if they want to belong to the club they have to pay their dues. I am not looking for a great controlling hand.
My purpose in looking at the revisions to the Bank Act is to help create a Bank Act and a system which will give us greater flexibility in the kinds of institutions we can have here in Canada. They should, however, be responsible through the banking system to the Minister of Finance, who is responsible by law for the monetary policy of this country. Canada should be furnished many of the features of banking systems abroad. All of us know very well that those systems function very successfully. We have not been able to incorporate those features into our requirements because the single act we have that governs banking, governs chartered banks only.
There is another feature that I want to discuss briefly, Mr. Speaker. There has been mention of an electronics payments system which is an offshoot of the payments system. It will be much like a credit card but will be a payments card. The possibilities are just beginning to become evident, but I believe that within ten years of the effective date of whatever legislation we have permitting the payments card, individuals will be doing a fantastic amount of their business that way. It is open to electronic connections and the desire of the banks, whether near or fully chartered banks, to eliminate the cost of the float. The cost of floating credit instruments constitutes a high proportion of the total cost in our systems today. Banks may be able to eliminate some of these costs and thus reduce charges for the services offered to customers, and perhaps even enlarge their clientele.
I will not touch on the subject of reserve requirements because that is too complicated to discuss at the moment, but I should like to refer to the difficulties of entering the banking industry. At the present time banks may be incorporated only be a private act going through this House and the other place. The passage of a private banking bill is a calvary. I do not know how many gethsemanes the organizers of a new char-
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tered bank have to pass through before a bill passes. The record is shocking. The system for private members' bills is such that one or two members can hold up a chartered bank bill beyond reason, just through caprice or ignorance. This is unfair to the organizers of a bank.
I agree with the proposal that chartered banks may be incorporated by letters patent, subject to stringent conditions, through the Department of the Secretary of State or the Department of Consumer and Corporate Affairs. One thing in the white paper that I do not agree with emanated from the Western Economic Opportunities Conference, and that is the proposal to allow provincial governments to participate in the founding of chartered banks to the extent of owning up to 25 per cent of the issued shares, this to be reduced to a maximum of 10 per cent over ten years.
I am very pleased that the White Paper dropped the much more dangerous provision that was bandied about in Bill C-2 three or four years ago which would have allowed provincial governments to buy into existing chartered banks. This would have resulted in chaos and conflicts of interest. It would have given the provinces that owned shares in major banks an unjustified leverage in granting credit for the development of industry in certain provinces. It was a totally repulsive feature which I was glad to see abandoned.
I do not like to see provincial governments in the business of banking. It is all right for them to operate savings associations, but not chartered banks. The province of Alberta operates treasury branches which are a form of near-banks. I would like to see them disposed of to someone who is prepared to organize a regional bank which would respond to the needs of people as do the treasury branches.
I should like to close on a note of caution, Mr. Speaker. We have mentioned the activities of foreign banks. I am sure they recognize that they should operate within a framework which people understand and which at the same time is fair to them. At the present time arbitrary action can be taken which would be unfair to them. Not only would this framework permit a measure of control over them but it would also give them protection. It should be remembered that overly stringent or repressive action by the Canadian government toward foreign banks would be reciprocated in many countries. Our major chartered banks have established a world-wide network of operating branches in foreign capitals which enable Canadians to do business with their own institutions and thereby facilitate Canadian business. This should not be endangered.
This bill is a reflection of the slip-shod performance of the government, Mr. Speaker. I cannot accept the reasons given by the parliamentary secretary to the Minister of Finance (Mr. Lumley) that the delay occurred in the Department of Justice. But I certainly think that March 31 next is a sort of trigger clause or non-sitting clause. If it is required at that time it will give us a margin of safety with the chartered banks.
There are factors, however, which might cause us to come back again because there will be insufficient time to deal with

February 27, 1978
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the Bank Act. In outlining my remarks I have indicated what those circumstances might be. It might be just a case of calling the election at the wrong time. I hope, therefore, that members of this House had an opportunity themselves to examine the white paper. I think we should have a limited debate even of this nature given somewhat beyond Bill C-16. We thank the Chair for its indulgence, and I am sure that hon. members on the government side would want to respond in the same way so that we can discuss some of the requirements we think should exist in the Bank Act.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, the Bank Act by law is revised every ten years. We are now being asked to postpone that major revision. It is not because the opposition is opposing or blocking the revision of the Bank Act; it is because the government is not ready. This is an indication of how serious the economic situation is in this country and how the government has mismanaged its affairs.
This is a time when we have the highest number of unemployed Canada has seen since the great depression of the 1930's. By official statistics we have 991,000 unemployed. We know there are probably another 500,000 unemployed who are not counted in the official statistics. These are people who have given up looking for work because there are simply no jobs. These people live in areas such as Newfoundland, Cape Breton Island and eastern Quebec and the majority of them are women and youth. There are almost 20 people available for every job that exists. This is an indication of the serious situation in which this country finds itself.
Banks in every country have tremendous power. Banks play a major role in the decisions which will direct the economy over the next few months or years. And yet despite the banks' decisions to invest money in certain areas and in industry, and despite the importance those decisions have on the people of Canada, the government is not ready with its proposals to revise the Bank Act under which all the chartered banks and institutions such as the credit unions and trust companies operate. This is, to say the least, a disgraceful indication of the difficulties which this country faces.
This debate should be one of the most important debates in parliament. The chartered banks are at the centre of our whole financial system. We are disappointed, Mr. Speaker, that the government has taken this approach in postponing consideration and amendment of the Bank Act.
When the present Bank Act was tabled over 10 years it was labelled by the then finance minister as a "blueprint for competition". But over the next decade the banks grew faster then ever before in our history. They have consolidated their position at the centre of our financial system. In our view, their level of profits over the last decade has been much higher than public interest would have dictated. 1 would suggest, Mr. Speaker, in light of the anti-inflation program which this country has supposedly lived with since October, 1975, together with the 6 per cent restriction which the government has imposed on any increase of wages and salaries in the coming year, that the increase in assets and profits of the five

largest banks is a disgrace. This is a situation the people of Canada ought not to put up with.
The five largest chartered banks which control 90 per cent of the assets have already an inordinate degree of power. Yet the new Bank Act which the government is considering and which I assume will be the basis for the bill when we get it some time next year, would increase substantially the powers the banks already have. They would be able to expand into new areas where they have previously been forbidden and thus be able to expand profits and power.
One only needs to look at the information which the banks make public to see the tremendous powers that they hold. I want to take a few moments to illustrate some of these powers. I do this because of the tremendous financial assets of the banks and because of the interlocking directorate between senior officers of the five largest banks and the other major industrial and financial corporations of this country. These facts I procured from the Directory of Directors published by the Financial Post.
Mr. W. Earle McLaughlin is the chairman of the Royal Bank of Canada, and I will mention just a few of the directorships which he holds. First of all is Sun Life, and those Canadians particularly from Quebec know all about Sun Life. Mr. McLaughlin is a director of Adele Investments; Algoma Steel; Allied Chemical; Canadian Pacific Railway; General Motors-this is the whole General Motors corporation not just the Canadian segment-Genstar; Metropolitan Life; Power Corporation; Ralston Purina, the food corporation; and Standard Brands.
Another of the Royal Bank's directors is Ian Sinclair who is the president of the CPR. According to a report in the Globe and Mail for February 22, Mr. Sinclair was forced under provisions of United States law by regulations enacted by its Securities and Exchange Commission, to make public the salary he earns. This is a salary well over $300,000 a year. At the same time Canadians are being told by the Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. Chretien) that they are living beyond their means. This is at a time when Canadians are being told by the Prime Minister that they should tighten their belts and so on; it is at a time when the CPR pays some of its retired employees pensions of substantially less than $100 a month. Anyway, Mr. Sinclair, who is a director of the Royal Bank and of the CPR, is also a director of CP Investments, of CP Air, of Cominco, of Pan Canadian Petroleum, of the Canadian Investment Fund, of Great Lakes Paper, of MacMillan Bloedel, of Seagrams, of Simpsons Limited, and of TransCanada Pipelines.
Look at the Canadian Imperial Bank. Its chairman, Russell Harrison, is a director of Brascan Limited, of British American Assurance, of Canada Life, of Kinross Mortgage, of TransCanada Pipelines and of the Royal Insurance Company. One of its directors, John A. McDougold, is head of the Argus Corporation, of Dominion Stores, of Standard Broadcasting, of Hollinger Mines, of General Bakeries, of Massey-Ferguson,
February 27, 1978

of Domtar Limited, and of the Iron Ore Company of Canada. If I were to take the time to list all the corporations of which Mr. McDougold is a director it would take up the whole of the 40 minutes available to me.
Now I turn to the third largest bank, the Bank of Montreal. Its chairman, Fred McNeil, is a director of Canadian Canners, Dominion Life, MICC Investments, the Mortgage Insurance Company, Seagrams Limited, and International Resources Finance Bank. Another director, A. Searle Leach, is a director of Federal Industries, of Great West Life, of Bathurst Paper, of Carling-O'Keefe Limited, and of Dominion Tanners.
I could go on and on, but I think the few examples I have given illustrate the kind of control which the senior officers of Canadian banks exercise not only over the banking system but over the largest corporations of this country. At a time when ordinary citizens are being told by the federal government that they ought to restrict demands for increases in wages and salaries to 6 per cent, although the cost of living is increasing by 9 per cent, we find that the assets and profits of the banks have been increasing month by month and year by year at well beyond that rate.
I call attention to an article which appeared in the Globe and Mail of February 22, 1978, in the section headed "Report on Business." Consider the situation. Our largest bank, the Royal Bank, held assets amounting to $35,670 million as of December, 1977. This figure increased in one year by 18.8 per cent. On the same date the Canadian Imperial Bank of Commerce held assets of $32,781 million. In that case there was an increase of 19.6 per cent in one year. The assets of the Bank of Montreal, at $25.9 million, increased by 21.8 per cent in one year, and those of the Toronto-Dominion Bank, at $19.46 million, increased by 18.5 per cent.
Looking at the extent to which assets have risen one also finds that funds invested in NHA mortgages increased by 35 per cent, money on loan increased by 16.5 per cent, the value of securities held went up by 62 per cent, and holdings of Canadian treasury bonds increased in value by 17.3 per cent. Finally, funds out on day call and short loans rose by 32.5 per cent. Not only do the banks possess tremendous assets but the size of those assets is increasing rapidly. Total bank assets in December, 1977, according to the Globe and Mail, amounted to over $150 billion. So the banks play a decisive role in all the economic activities of Canadian corporations and Canadian citizens.
We in this party feel very strongly that the chartered banks, or at least the five largest, already have an inordinate degree of power and that the Bank Act amendments which the government proposes to bring forward, and which it is now postponing, would have increased the powers of the banks still further, allowing them into new areas previously forbidden to them, and offering them many new possibilities for expanding profits and power. At the same time the near-banks such as the credit unions, the caisses populaires, and the trust companies would have found the bill imposing new restrictions upon their activities. We believe that the bank bill, when it is brought forward, should do the reverse-that it should encour-
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age competition by giving more power to the credit unions, the caisses populaires, and the trust companies.
The proposals which the government included in its draft bank act were supposed to promote competition. It is our feeling that the result would have been just the opposite, that there would have been even more concentration than there is at the present time. The plain fact is that promoting competition between institutions of grossly unequal size simply allows the dominant institutions to take over the smaller ones. The record proves that this is what happens. If the Minister of Finance is really serious about increasing competition in the financial system, we would like him to take up the suggestion made at the finance ministers' meeting last month, that is, to set up a monitoring system to track the distribution of market power in the financial world and, if there is evidence of concentration, to take action to correct it.
We challenge the minister to look closely at the level of profits the banks have made over the past decade and to tell the Canadian people if he believes this is in the best public interest. If, as we think, the banks have made too much money in recent years, the government should be proposing measures to control profits and interest rates. Yet there is nothing in the Bank Act as it was drafted which addresses itself to this issue.
We believe the Minister of Finance should ask himself whether the big banks have been responsive in the last ten years to the real economic needs of this country. According to a narrow definition, one might say that economic efficiency is maximized when market forces concentrate investment in shopping centres and office space in big cities at the expense of investment in low cost housing, small business, and development in the more isolated regions. There is all kinds of evidence that banks have been leaders in the concentration of the business community in this country in the high growth areas of southern Ontario and British Columbia to the detriment of slow growth areas in eastern Quebec, the Atlantic provinces and Manitoba. Governments at all levels should be taking a more active role in deciding investment priorities. That is what governments do in such countries as Norway, Sweden, and West Germany.
The federal government has not done that kind of investment planning in co-operation with the banks. That is one reason why this country has economic difficulties and unemployment. Disparities between the high growth and low growth regions of Canada have been increasing rather than decreasing, which has been the supposed objective of the federal government for the past ten years.
When it brought forward the Bank Act, we were disappointed that it limited participation of provincial governments in regional banks. It seemed to penalize co-operative institutions such as credit unions and caises populaires. By and large, these institutions grew up to serve local and regional needs with which the big banks could not be bothered. They are an essential part of our financial system, particularly for those who are increasingly turning to the credit unions and caisses

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populaires for whatever their business requirements may be with regard to financial institutions.
The criticisms I have made are the same that were made when the white paper on the Bank Act was brought forward. I want to put on record some of the views of governments, credit unions and trust companies. To a large extent they are the same criticisms that we make of the government's proposed bill which has been postponed. Should the same government be in office when the Bank Act is brought forward, it will be in much the same form as when it was first tabled by the government.
When the white paper on the Bank Act was brought forward, the government of Manitoba made certain comments. 1 quote in part from their comments:
My government has serious concerns with the over-all tenor of the proposals. They are apparently designed to promote competition among financial institutions and make the provision of financial services more efficient.
They said they approve of those goals but feel that, and I quote:
-the very structure of the financial sector in Canada is such that the changes proposed are more likely to produce the reverse effect-more concentration and less "efficiency" in the broadest sense.
The plain fact is that promoting competition between institutions of grossly unequal size simply allows the dominating institutions to take over business from the small institutions.
The chartered banks have demonstrated clearly that they act as 'oligopolists'; if competition among banks were real or effective they would be vying with each other for higher deposit rates and lower lending rates, and this would be reflected in lower profits.
I was told today by someone very knowledgeable that one cannot get from the Canadian banks the prices they offer for different types of loans. This is kept secret. In fact there is no competition among the major banks despite the need for competition, and we should have a new competition act which would deal with that kind of situation.
The government of Manitoba further stated:
I would ask that the federal government demonstrate the sincerity of its concern with competition in banking by setting up a monitoring system to track the competitive situation in the financial sector-and take action should there be evidence of lack of competition.
Talking about the kind of investment controls which I indicated countries in western Europe have, the government of Manitoba said, and I quote:
The federal government has the power to stipulate requirements on the banks' assets and thus influence the composition of investment. Market forces concentrate investment on large low risk projects, and shortchange housing, especially low income housing, and small business and industry in remote regions. Certain proportions of the banks' investments should be earmarked for housing and small industry.
The province of Saskatchewan stated:
The banks have not been responsive to regional needs. The credit unions and co-operatives have grown up to fill this gap. The continuing existence of a strong credit union system is our insurance that the banks will not revert to their old ways of dealing with the people of Saskatchewan .. .
The banks are already earning excess profits because of their market power; allowing them to move into leasing and factoring will increase this power, which is already too strong.
[Mr. Orlikow.J
I do not have time today to go into detail, but in the Financial Post in January of this year there was a story headlined "Banks Increase Share of Expanding Leasing and Factoring Services." It will be seen that the province of Saskatchewan was not wrong when it warned of this. I quote from this article:
Despite further delays in the Bank Act revision, Canadian banks are going ahead and beefing up their participation in leasing and factoring (basically managing accounts receivable).
Canadian Imperial Bank of Commerce and Banque Provinciale du Canada have recently established new wholly-owned leasing subsidiaries. And Provinciale has brought a 100 per cent interest in an existing factoring company while Commerce is negotiating with a U.S. bank to take over its Candian factoring operation. Earlier, Royal Bank of Canada bought a 100 per cent interest in an established leasing company and increased its holding in another to 100 per cent from 50 per cent.
One therefore sees the direction in which the banks are moving without any countervailing action on the part of the federal government.
The province of Saskatchewan said that it is concerned that the white paper relies too heavily on the notion that increased competition within the banking sector will have a beneficial impact. The paper fails to realize that the real source of competition for the banks will increasingly come from the trust companies and credit unions. They feel in particular that no impediments such as a reserve requirement should block the road for the credit unions, that direct regulatory controls are necessary to restrain excess profits in the banking industry.
The National Association of Canadian Credit Unions made representations. They pointed out that while they had no objection to reserve requirements based on the needs of a clearing system, they saw no need for non-interest bearing reserves with the central bank. They said the only purpose of that proposal would be a centralized monitoring control which the Bank of Canada had always maintained could be achieved through control over the banks. They said that credit unions are already subject to a variety of legislative requirements under the provincial statutes and the federal Co-operative Credit Associations Act. They said that to stack such requirements on top of existing legislative requirements specific to Credit Unions without providing access to the compensating advantages enjoyed by chartered banks would be quite inequitable.
An even lengthier brief was presented by the Federation de Quebec Caisses Populaires. I could go on, but it is pretty obvious that what the government proposes in respect of revisions to the Bank Act will not do the job required. It will not bring about more competition and will not serve the needs of the people of Canada. We believe the Bank Act should accomplish these things, and this should have been assured in the proposed bill that has been postponed. There should have been provisions included to beef up disclosure and conflict of interest rules that apply to banks so everyone will know who it is that runs the big banks, what they earn, and what are their business interests.
February 27, 1978

Indicative of the kind of secrecy we have in this country is the fact that the information about the salary of the president of the CPR which I put on record today came to us, not as a result of laws we have in Canada, and not as a result of regulations put into effect by Canadian governments, but rather as a result of information which the U.S. government requires. The Securities and Exchange Commission of the United States requires every corporation to make public, when its shares are being traded on U.S. stock markets, that kind of information. Without that kind of regulation in the United States we would not know what the president of the CPR makes, anymore than we know the salary of the presidents of the Bank of Montreal, the Canadian Imperial Bank of Canada or the Royal Bank. We would not know what their roles are. We think that kind of regulation is needed in the Bank Act which we will finally be discussing.
When the Bank Act is brought forward we believe it should strengthen the role of co-operative credit institutions in our society. Our analysis, and the analysis of the credit unions and caisses populaires of the proposed bill, are that in fact if it had been passed as it was it would reduce this role and make the credit unions and the caisses populaires even less able to meet the needs of the Canadian people than they are at the present time. When the legislation is finally brought forward we believe it should make the big banks more responsive to regional needs, the need for housing, and the need for small business investment.
We are happy that several new banks have been created in recent years, and that the credit unions of western Canada helped to establish the Northland Bank. However, the assets of the new banks and their powers are relatively insignificant when compared with those of the five major banks. We believe more competition is required, and that the way to get that competition is by strengthening the credit unions, caisses populaires, and the trust companies.
The Bank Act should make the financial system as a whole more responsive to government investment priorities. One cannot come from a relatively slow growth area like Manitoba, as I do, without realizing that for generations, if not for the entire 100 years of Canada's life, the banks have not given the kind of consideration to the needs of slow growth areas that they ought to have given. The Government of Canada should take a leaf from the books of the governments of most of the democratic countries of the western world. Those governments, by law or by custom, voluntarily or by a twisting of the arms of bank officials, require the investment policies of their banks to be directed toward meeting the needs of the people. It is our belief the Government of Canada should have and should exercise the same kind of power and influence in respect of the investment policies of Canadian banks.
I am not going to deal with this at any length today, but we are less than enthused by the involvement of Canadian banks in large scale investments in countries such as Chile and South Africa. Our concerns are not just those of the members of this party, but are concerns that have been voiced by the largest churches in this country as well as by credit unions, co-opera-
Bank Act
tives, and other organizations. We are amazed and horrified by the increasing involvement of Canadian banks, with assets entrusted to them by the ordinary Canadian citizen, with regimes such as the repressive regime in Chile and the racist regime of South Africa.


Mr. Benjamin:: Anything to make a buck.


David Orlikow: As my colleague, the hon. member for Regi-na-Lake Centre (Mr. Benjamin) says, "Anything to make a buck". That is precisely the attitude of the major Canadian banks. We hope that when the government finally gets around to bringing forth its proposed bank act for discussion and enactment, which will amend the present powers, rights, duties and responsibilities of Canadian banks, it will take into consideration the proposals, suggestions, and criticisms of some of the provincial governments, credit unions, trust companies and co-operatives of the proposals in the postponed measures. When we get the new Bank Act we hope it will require our banks, more than has been the case, to meet the needs of the ordinary citizens of this country.


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, the government first presented its highlights in the white paper on Canadian banking legislation back in August, 1976, and here we are, two and a half years later, still talking about it. We are no further ahead, and the government is asking for an additional extension of the Bank Act to 1979. We are prepared to grant that extension, but first the government should table the bill. It should give us the proposed bank act.
Our financial institutions, caisses populaires, credit unions, opposition parties, and others have been patiently waiting for the new Bank Act to be tabled. With the economic crisis we have in this country, together with record unemployment, record debt and record borrowing-and we are now borrowing abroad to pay the interest on the money we have borrowed- the last thing we need is another delay in the Bank Act or in respect of anything to do with economic issues in Canada.
This request for an extension to the Bank Act was first suggested by the government on January 23 of this year when the Parliamentary Secretary to the Minister of Finance (Mr. Lumley) stated:
Mr. Speaker, hon. members will recall that in March of this year the former minister of finance, the hon. member for Rosedale (Mr. Macdonald), introduced a bill to amend Sections 6 of the Bank Act and Quebec Savings Banks Act to permit the banks incorporated under those acts to continue to carry on business until March 31, 1978, nine months beyond the date specified. The short bill before us today will further extend the banks' powers to do business until March 31, 1979.
The parliamentary secretary went on to say:
The reasons given in March for the delay in the decennial revision were the following. First, the extent of consultations encouraged by the white paper. Second, the extent and complexity of the task of converting the principles of the white paper into legislation and particularly, where appropriate, making the Bank Act consistent with the principles and provisions of the Canada Business Corporations Act and, third, the extent of the pressure of other priorities on the small group of legislative drafters in the Department of Justice.

February 27, 1978
Bank Act
The government has had ample time in order to do this. It is aware of the fact that the Bank Act has to be revised every ten years. Certainly this should have been prepared by now.
The document entitled "Highlights of the White Paper on Canadian Banking Legislation", dated August, 1976, reads as follows:
The federal government's white paper on banking issued today proposes significant legislative changes designed to encourage more competition in Canada's financial system.
Let us move toward revising the Bank Act in order to have this competition.
The document continues:
The white paper proposes to establish a new national framework for Canada's chequing system. It would permit foreign bank subsidiaries to operate within Canadian banking legislation, as a new dimension in competition.
Steps outlined in the white paper will help facilitate the establishment of new Canadian domestic banks. A number of changes are also proposed in the powers of the chartered banks, in order to promote stronger competition within a framework of Canadian regulatory control and predominantly Canadian ownership.
The white paper follows an extended period of study by federal authorities, during which financial institutions and other groups made representations to the government.
This was 2'h years ago. Yet we are still faced with delays and stalling tactics.
It continues:
The paper provides a further opportunity for public discussion before conclusion of the current decennial review of the Bank Act and other banking legislation.
Well, discussions have taken place. The banks and the credit unions did their homework and presented briefs approximately two years ago. The government is causing the delays. Everyone is co-operating with the government. It is time for the government to reciprocate by taking a look at the Bank Act.
The document continues:
The review is occasioned by the fact that the Bank Act confers powers on Canada's ten chartered banks for a ten-year period only.
The ten years are up.
It continues:
The last review was concluded in 1967; parliament will be required to act before the next scheduled expiry of these powers on June 30, 1977.
At this point we are well into 1978. The government has identified all the problems. It has made excellent suggestions in its white paper. It has run into very little opposition.
In the same document under the heading "A Canadian Payments Association", it reads as follows:
ED$(*: 2089;-1 2810;-1
The white paper points to growing inequities and fragmentation within the payments function, which lies at the heart of our financial system. This function is exercised principally by the chequing system, under which deposits are transferred by cheque or similar orders to settle financial obligations. Near banks, which include trust and mortgage loan companies, caisses populates and credit unions largely outside federal regulation, play an important role in effecting payments. But they have only indirect access to the clearing system for cheques, and do not enjoy a full voice or full rights in its operations, with the result that they are not fully subject to all its obligations.

The white paper proposes to bring all institutions offering chequing facilities into a new Canadian Payments Association to replace the present clearing system operated by the chartered banks. Members will share the same rights and obligations. They will obtain credit facilities from the Bank of Canada and will be required to maintain minimum reserves with the central bank.
Most of the credit unions are quite prepared to do this, but they want a copy of the Bank Act in order to read the fine print and details. This is causing them concern in their operations.
The document continues:
The reserve requirements: on Canadian dollar notice deposits, and term deposits with an original term to maturity of one year or less, or longer if encashable (includes most reservable deposits of near banks)-2 per cent on the first $500 million; 4 per cent on the remainder. On Canadian dollar demand deposits (mainly banks)-12 per cent as at present. On foreign currency deposits used domestically-4 per cent.
There are quite a few foreign banks operating illegally in Canada today.
Under the section headed "Foreign Banks", the document reads as follows:
Canadian law does not permit foreign banks to operate as banks in Canada, but they have established many affiliated corporations here as active lenders to business and as borrowers in the money market. Many of their operations are not subject to regulation. They enjoy some special advantages and have captured a significant share of commercial lending activities, including some areas where direct participation by Canadian banks is prohibited under the Bank Act.
Foreign banks can bring additional competition and innovation to bear in Canadian banking. With their world-wide connections, they can help develop Canadian resources, industries and trade. However, there should be a legislative basis for regulating their operations in Canada to ensure equitable and effective competition and that Canada's banking system remains predominantly in Canadian hands.
We do not know whether this will happen or not. Everyone is patiently awaiting consideration of the Bank Act, which has been delayed again and again.
The document continues:
The paper therefore proposes to allow foreign bank subsidiaries to operate in Canada as banks, incorporated with full powers under the Bank Act. However, government policy will be to limit their growth and size individually and their combined operations to 15 per cent of commercial lending in Canada, these limits being subject to review. They will be permitted a maximum of five branches; a minimum of one half of their directors will have to be Canadian citizens.
We do not know how foreign banks operate today. Perhaps those banks would like to know whether they are operating legally.
It continues:
Limits on the size of any foreign bank subsidiary will be removed if it opts to "Canadianize" by selling shareholdings in excess of 10 per cent to Canadians.
Canada will expect reciprocal recognition for its banks in the jurisdiction of the parent bank. The government does not propose to permit the establishment in Canada of branches or agencies of foreign banks. Foreign bank representative offices will be registered.
Non-bank subsidiaries of foreign banks in Canada will be required to file reports on their activities. Unless specifically authorized, such affiliates will be denied the right to borrow in the Canadian market with the guarantee of their foreign parents.
I should like to refer briefly to the representations made by the Co-operative Credit Society of Manitoba, Limited. As I pointed out on January 23, 1978, the credit unions and caisses
February 27, 1978

populates across Canada have memberships totalling I'/z million, and there are 4,000 such institutions. Is the government afraid to face the credit unions? Is it afraid to sit down in committee and discuss the Bank Act? Is it afraid to deal with these 4,000 institutions? Is this one of the reasons for the stalling with respect to the bringing in of this bill? I am suspicious of this.
In a document entitled "A Summary of Concerns Respecting Proposed Federal Legislation", the Co-operative Credit Society of Manitoba indicated the following:
Bank Act Proposals-As we understand it, the government's basic purpose here is to integrate the payments system and to encourage fair competition among the financial institutions-as becomes a democratic society-maintaining Canadian control of our own banking system and avoiding undue concentration of power and influence in this field.
We agree all qualified institutions should have access to the Canadian payments system through membership in the proposed Canadian Payments Association. However, the manner in which present arrangements are to be effected is of some concern since the system must be applied nationally and yet not clash with the jurisdiction of the province whose legislation has traditionally dictated the Manitoba Credit Union regulations. This positive approach is specifically mentioned in the white paper. We feel impelled to emphasize its importance here for reasons set out in the credit unions' response to the proposed banking legislation which you have before you.
Especially of concern to our members is the matter of proposed credit union inclusion in reserving with the Bank of Canada. We feel, and feel quite strongly, that proposals in the white paper in this regard are based upon the long since antiquated idea that the chartered banks are the only financial institutions of significance in Canada. Also we feel that based upon this outmoded idea, the proposals regarding reserves with the Bank of Canada by all other financial institutions, which is based upon traditional chartered bank operations is unrealistic.
I should like to read also from the 1976 Annual Report of the Co-operative Credit Society of Manitoba and Subsidiaries. This gives you an idea of how long they have been preparing for changes in the Bank Act. It is unbelievable that the government, with the staff it now has, could not have been prepared last year. The Co-operative Credit Society of Manitoba in its brief states the following under the heading "Bank Act Revision":
Nature of the Canadian financial systems' development will hinge greatly upon final provisions of the Bank Act, which currently is undergoing its decennial revision. Manitoba credit unions' concerns are embodied in the National Association of Canadian Credit Unions' (NACCU) briefs to the federal government, prior to and following release of the government's white paper.
Our position is that the credit union system be included in the Canadian payments and electronic funds transfer systems, that the credit union system have direct access to the negotiable orders clearing system, and that credit unions be excluded from the proposed requirements of direct reserving with the Bank of Canada.
Credit unions maintain that the holding of reserves for monetary policy purposes and the maintenance of a settlement account for payment purposes are two entirely separate issues and should be considered separately.
These are some of the issues which we should be discussing in committee. In the meantime the government's constant delaying leaves the committee hanging in mid air.
In the white paper there is a reference to residential mortgages. With reference to that matter the white paper states:
Bank Act
The Bank Act now places arbitrary limits on bank holdings of residential mortgages. The limits have so far constrained only new banks, but in future they could also curb mortgage lending by larger banks. The limits will be removed in recognition of the need for residential mortgage funds.
Because of the problems we have today with high mortgage rates and difficulties which Canadians have in obtaining mortgages and finding proper housing, it is imperative that we get on with amendments to the Bank Act and that we do everything possible to help Canadians receive residential mortgage loans.
Another important aspect pointed out in the white paper is in regard to investments in Canadian corporations. It states:
The white paper outlines a limited number of exceptions to the principle that the business of a bank should be provided directly through its own corporate structure.
The exceptions arise in such areas as residential mortgage lending, certain mortgage-based funds, venture capital and joint venture activities.
In Canada today there is practically no venture capital available and very few joint venture activities. This is one of the reasons why we have such record high unemployment. Our secondary industries are not expanding because they cannot obtain venture capital. Two and a half years ago the government pointed out the need for venture capital for secondary industries. However, it has been stalling on this issue. It is unbelievable, in light of the financial problems we are having in this country. Businesses are closing down or are pulling out of the country; there is record unemployment; our secondary industries cannot expand because they need venture capital, and yet the government is stalling. It is absolutely ridiculous.
Back in 1975 the Canadian Federation of Independent Business presented a document on changes to the Bank Act. Two or three years ago everyone was doing their job to prepare for this, but not the government. It is not prepared to do anything other than engage in another stalling tactic. It causes as much confusion as it possibly can in this country. The Canadian Federation of Independent Business pointed out a number of policy issues about which they are concerned, such as the portion of bank loans made to independent business; support for new venture formation-they were talking about venture capital and how important it is in this country, and that was back in 1975-the role of guaranteed loan programs; the role of banks in fostering Canadian ownership-that is very important in Canada-the impact of bank credit cards; the broadening of bank services to compete with customers; competition in banking; the role of banks in furthering the process of concentration of power; and the role of banks in regional disparities.
The hon. member for Winnipeg North (Mr. Orlikow) commented on the huge profits that banks are making. That is something we should discuss with the banking officials when they come to the committee. I will have no hesitation in discussing this with them.
I should like to read an excellent article which was recently written on this subject headed "Credit Unions Can Now Give Banks a Run For Your Money". It reads:
Why would anybody want to deal at a bank when it appears they can get a much better deal at most credit unions and many trust companies?

February 27, 1978
Adjournment Motion
I know of no banks which offer, as at least one credit union does, the following services: no charge for personalized cheques; no service charge for processing cheques; no charge for monthly mailing of statement and cancelled cheques; no charge for telephone transfer of funds from your savings account; no charge for postage-paid mail deposit envelopes; no monthly charges of any sort and no minimum balances required.
Here is what a reader stated, Mr. Speaker, about his experience with credit unions.
Banks are too expensive for the ordinary man. It's all free at many credit unions and several trust companies. Even loans are better. To pay my dentist bill, one year, I borrowed several hundred dollars at the credit union. The only added charge was for 12 per cent interest, and it worked out to small potatoes as I only borrowed for one month.
The article goes on to say:
Credit unions have come a long way. Here's a typical list of the types of services you can find at all but the smallest credit unions: various savings instruments, personal loans, first and second mortgages, collection of agreements for sale, life and general (fire, theft) insurance, Canada Savings Bonds (in season), registered retirement and home ownership savings plans (RRSPs and RHOSPs), wills and estate planning, reveal arrangements and safety deposit boxes.
They offer excellent service. We should be discussing why the banks have these tremendous charges for their chequing and other services and why credit unions can do it at no charge.
May I call it five o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Turner):: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Vancouver South (Mr. Fraser)-Trade-Textiles-Purchase and sale of import quotas; the hon. member for Winnipeg South Centre (Mr. McKenzie)-Tourism-Problems identified at industry conference-Government action to solve; the hon. member for Cape Breton-East Richmond (Mr. Hogan)- Housing- RRAP-Changes in regulations under program.
It being five o'clock the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions and public bills.


PRIVATE MEMBERS' MOTIONS
The Acting Speaker (Mr. Turner):: I understand there is unanimous agreement to standing motions Nos. 4, 5, 11, 19, 20, 21, 22, 23 and 24. Is that agreed?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: We will now proceed to motion No. 25.

[ Translation]


SOCIAL SECURITY
Mr. Adrien Lambert (Bellechasse) moved:: That, in the opinion of this House, the government should consider the advisability of having Parliament adopt a measure authorizing payment of an allowance to housewives who remain at home to take care of their family instead of joining the labour market, the purpose being to ensure a global income corresponding to the family's needs by providing an additional family income to that earned by the father.
He said: Mr. Speaker, the motion I am honoured to sponsor aims at inviting the House to consider the important and noble role played by housewives in Canadian society and at inviting the federal government to introduce before Parliament legislation which would authorize the payment of an allowance to housewives who remain at home to take care of their family instead of joining the labour market, the purpose being to ensure a global income corresponding to the family's needs by providing an additional family income to that earned by the father.
In our society, Mr. Speaker, the family institution is at the very basis of the two founding people of our country. In our opinion, the family consists of the father, the mother and the children. I have always believed and still do today that the family is a divine institution for if it were an invention of men, it would have disappeared I think a long time ago. In the past, and maybe not so long ago, the majority of our population was made up of farmers' families. Each family would produce all sorts of goods to provide for its own needs. In that manner, each member of the family be it large or small, accomplished some kind of job to ensure satisfaction of the needs of his close relatives. Craftsmanship played an important role instead of importing, things were handicrafted at home. Progress and industrialization have completely transformed our customs and we now have to pay the price of it.
Before the Second World War of 1939-45, the number of housewives on the job market was very small. One can actually say that women really started working outside their home
February 27, 1978

around 1940, when Canada needed manpower for its ammunition plants. I can remember then that hundreds of women would go to the Quebec City Palais Station to board special trains taking them to the ammunition plants located at Valcar-tier where people worked day and night shifts. During the war, and in the ensuing years, as male workers were not available in sufficient numbers of the jobs market, the woman was increasingly attracted to it first on a temporary basis and then on a permanent basis.
Many families have contracted financial obligations to acquire a family home, which is quite legitimate. Then the mother tells the father: I am going to work to help you pay our home, and then I will stop working to look after my family. Unfortunately, that was not always the way it turned out. New needs were created. She had to keep on working in order to earn the income required to meet those new needs. Very often we hear mothers say: Oh, if I had a small additional income, 1 would much prefer to stay home. And just as I was coming to Parliament in the minibus, there was a mother saying: If I could, I would stay home to look after my children, but I have to work to help my husband earn enough to meet our commitments.
We are living in an age of speed which led to a consumer society. Everything or nearly everything is mass produced at the plant and delivered in homes in small packages, which is likely to further strain the family budget, and then the father's income is no longer enough. So the mother has to look for a job to help make both ends meet. And now this situation does not only exist in large cities but also in the country. I represent a riding which is made up mostly of country people; they are rural families and the same problem now exists for country people. By nature the mother is a housewife, and on the whole, she would much prefer to perform that role.
Generally speaking, that is what we hear: mothers would like to have good meals ready for their husband and children, the house to be clean when the father and children come back from work and everbody sits around the table. That is really a family meal and a way of meeting one another to talk things over instead of everyone being always on the run the home being simply a place to sleep that everyone leaves in a hurry. Unfortunately, that is the situation in too many homes.
Mr. Speaker, I believe for my part that the mother greatly deserves our recognition. We all have a mother, and everyone of us believes that his is the best in the world. That is normal. We must absolutely take measures to recognize that also in fact.
All things considered, it is she who gives our country its greatest wealth, that is human investment, it is she who takes care of our children. She must ensure that our children get a good education and a good instruction to be able to carry on a trade or a profession later on in life. As a matter of fact, 1 must say, Mr. Speaker, it is disappointing to find that sometimes these efforts are not successful. I know all members
Housewives' Allowance
receive letters from young girls who, after graduating as nurses, secretaries, accounting clerk or anything else, are looking for jobs. Finding none, they stay at home and it is the mother, on top all her work at home, who has to go to work in a factory or an office to make ends meet.
It is topsy-turvydom. I think it is our duty to straighten things out. Nowadays, mothers are participating in meetings on children's education. They are more willing, at least in my province, to accept the school comissionner job. They sit in on parents' meetings while the father, busy elsewhere, has no more time to devote to his children's education. It is the mother's burden.
If she has an outside job, she is constantly rushed and cannot succeed either in playing her role as she would like and as her maternal feelings make her want to play it. The motion that I have suggested and that we are now discussing aims at recognizing that the mother who works at home is entitled to an income. I would not want this to be called a salary because a mother does not work for a salary; a mother with children does not think about that. On the other hand, she has needs which must be fulfilled. This is not done as in the past, as I explained at the beginning of my comments.
The married woman who has a job in a plant or an office is entitled to wages. Everyone recognizes this. At the end of the week, if she has worked 40 hours for example, society recognizes her right to a monetary reward. This is completely logical. This income is added to the salary of the husband. When there are five people in a family, they share the incomes of the father and the mother. This is a supplement. Everyone benefits from it. However, the mother who stays at home should also be entitled to a reward, whether she is married to a manual worker or a farmer, and God knows that farmers' wives work hard and have long days of work, not only in the house, but also in the barn, to help manage the dairy, to make sure everything is clean. I believe that those mothers are entitled to recognition and to an income.
I said earlier, and I want to repeat it, that it is essential and important for society to recognize in practice that we shall necessarily have to find a means to reward those who stay at home, through a sense of duty, necessity or choice. What happens in the case of a small wage earner, for instance? At the end of the week, the father comes home with his pay cheque, and if he has three children, this means that he must support five people including the mother. Unlike the family where the mother has an outside job, this family has only one income. Income has to be divided into five, and once more the mother will have to go without a number of small things she would like to have, such as short holidays she would like to take once in a while, because she cannot afford them. So she has to live on one income.
On the other hand, I approve the principle of equal pay for equal work. Obviously an employer should not be paid $100 more by his boss because he has three or five children. Equal

February 27, 1978
Housewives' Allowance
pay for equal work. But then, we should hasten to say in Canada, because we can afford it and the Lord gave us enough resources to do so, "To each according to his needs." We should find a way to add to income to meet that need. One way to reach that goal of family income would be to pay the mother as such a special allowance. That same allowance could also be paid to the widowed mother and the mother faced with some other hardship. We know, in this day and age, that there is no need to list such other hardships, because they are too numerous to be listed. They are covered by the words "other hardships".
Hon. members opposite may say the government is already paying mothers family allowances. Concerning this, I would point out that in the case of families with incomes below $13,000, family allowances should not be taxable, as we have said a number of times, and I am convinced government members themselves feel as I do. Of course some may say that the government needs revenues to meet the cost of social programs.
I think that capital should be taxed more. Let us consider the balance sheets of chartered banks which are making more and more profits as well as multinationals which manage to build up colossal reserves on which they are not taxed. We should consider this and we should surely find the revenues needed to compensate tax exemption at least on family allowances. I suggest to the government that families pay fewer taxes so that they have a chance to make a decent living and that our mothers have a little more opportunity to enjoy life and take some rest. They get tired and wear themselves out with work. We must give them a chance to stay beautiful. Women are beautiful. Mothers are beautiful. As legislators we must make all possible efforts to keep them even more beautiful. And to do this, we must alleviate some of their difficulties.
I invite the Minister of National Health and Welfare (Miss Begin) to present a legislation recognizing that Canadian mothers deserve our gratitude and that this Parliament is dedicated to save the family structure which is crucial for our society. I think that if that legislation is passed, it could be considered as the first step towards an annual guaranteed income system.
Last night, during the CBC news report, I watched the summary of resolutions presented to the Liberal party convention during the weekend. I noticed that some were for it and some against. The former finance minister was not absolutely convinced that the annual guaranteed income was a possibility in Canada. The present Minister of National Health and Welfare has advocated the view that she already expressed in this House, that it was time to initiate an annual guaranteed income system. This is why I said earlier that I am convinced that even on the government side there is no consensus on all those points. It does not mean that we should relinguish this system. It means that we must work further and that all studies made at the federal-provincial conference level about

the necessity to establish an annual guaranteed income system should be continued.
Today, in reply to a question from an opposition member the Prime Minister said that Canadians had to be more productive to become competitive on the international market. I entirely agree with him. There is one solution to encourage a greater input in the gross national product. It is to give youth the opportunity to contribute all their energy, their efficacity and their knowledge. At the same time, Canadian mothers would be given a chance to fulfill their responsibilities as mothers and wives, if we give them the security to which they are entitled.
[DOT]	(1712)


Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, at the outset I should like to congratulate the hon. member for Bellechasse (Mr. Lambert) for bringing forth a motion filled with the things we are all concerned about, that is, having sufficient income on which to live. He mentioned that the family is the basic unit. I certainly agree with that and I hope we will continue to feel that the basic unit is the family unit. I understand the hon. member has a large family. Maybe that is why he is so concerned about this kind of motion-he could use two salaries instead of one! I think he is pointing to the same kind of situation for many people in this country who find that one paycheck at the end of the week is not enough and that you actually need two in order to have a decent standard of living.
The motion put forward by the hon. member for Bellechasse regarding the payment of an allowance for housewives who remain at home to take care of the family instead of joining the labour market, touches the issue of income distribution and the status of women, matters which are of great concern to this government as I believe they have been of long standing concern to many others.
The motion essentially asks the government to consider in its over-all, ongoing study of income distribution and income maintenance, the specific role which allowances to housewives who remain at home to take care of their families, could play in the package of income distribution measures which constitutes the government's income policy at present and in the future.
[DOT]	(1722)
I would like to respond to the hon. member's motion by reviewing some of the issues that are implied. Current studies by the Department of National Health and Welfare already have given considerable attention to many of these points; they are not new to me. I can do justice to the issues at hand by sharing some of my thinking on the subject with hon. members.
At the outset I would like to make particular mention of the fact that to focus on the needs of low income earners and single parent families as two specific target populations for the
February 27, 1978

continuing evolution of our income maintenance policy is an idea I wholeheartedly support. In my opinion, the motion before us is related to this idea, and I hope to be able to show that to you today. The needs of children, the needs of parents and the responsibilities of parents in meeting children's needs will be receiving considerable attention by the minister and by the Department of National Health and Welfare within the next few months.
First, I would like to point out that the use of the term "housewife" in the motion raises an important issue of definition. It seems to me necessary to take into account that there are the single parent families which in most cases, whether they remain at home or enter the labour market, receive a level of income below their needs. The majority of this population are women who remain at home and receive transfer payments. If they enter the labour market they are unable to earn sufficient income to live, to meet employment expenses, and to cover the necessary child care costs. These women do a considerable amount of work in the home. They make do without many conveniences; they nurture dependent children, but they cannot or do not want to be classified as "housewives"-maybe nurturers of children would be the appropriate term.
Many needy families are one parent families. The term "housewife" is not always relevant to them. To target a program to "housewives" would surely invite considerable and justified criticism from those who are charged with the responsibility of taking care of a family but are not "wives"-be they single women, single men or married men. I would imagine that a motion which replaced the word "housewives" by the words "parents with dependent children" would be better received by this House.
Second, I would like to clarify to this House that the main concern of what may loosely be called "family support" is, in my mind, the care and well-being of children. This is not to say that childless families never merit support; but rather that incremental redistribution of income which this government is considering is targeted to groups with identified special needs. The responsibility to ensure adequate care for children creates one of those special needs we have identified. Conversely, other special needs of certain childless families are addressed by other policies and programs.
The case can be made that the responsibility for children creates particular needs in families. It is much harder to build a case to the effect that housework in and by itself creates special needs. After all everyone is in one way or another engaged in housework. Therefore housework does not have a proper place in the discussion regarding income distribution between families. Admittedly, housework has a role in the discussion of the distribution of income within the boundaries of the family. This is another subject and I do not believe the motion we are addressing today touches upon that subject.
At present there is a virtually infinite range of alternatives for people to organize the distribution of tasks within the home from total specialization to total sharing including alteration of roles and so forth. It would be senseless and very unwelcome
Housewives' Allowance
from the point of view of the population to interfere with those choices.
Third, and assuming that we are in fact discussing the special needs of parents during their child rearing years, it seems useful to distinguish between material support for the child rearing function and recognition of the social importance of that function. Both subjects are of great concern to me. Unfortunately the first is a more straightforward problem than the second. Let me begin by saying a few words on the issue of recognition, and I will return later to the issue of material support.
Many proponents of payment for parents at home have advanced the argument that the role of child rearing does not meet with proper recognition in our society, and that it is one of the responsibilities of the state to ensure that proper recognition is awarded. I say that this is one of the more problematic of the two concerns because it is neither clear that government intervention can prescribe the gain or loss of prestige of any individual or profession, nor is it clear that a monetary compensation would achieve any such desired goals. These two things are also interrelated. Prestige has traditionally been the result of a combination of qualities, among which money always had a role. The role of money, in recent years, has become more and more central in our society to the definition of prestige or recognition, to the point that some argue that only payment for services rendered is adequate recognition. Although this position has some merit in a society so heavily market oriented as is ours it remains unconvincing to many who argue that certain roles in society, among which child rearing is prominent, are privileged in that they contain intrinsic and otherwise non-monetary rewards.


Stanley Howard Knowles: Like being a member of parliament.


William Kenneth Robinson: That may be so.
In this regard our society seems to have come to some collective decisions without careful examination of alternatives. It is not clear to many observers that engulfing every person in the monetary and market scheme of things is a worth-while social objective. There are many different opinions and nuances voiced on this issue at this point in time, and to pretend to be able to find a solution to the problem of recognition through a monetary compensation scheme is premature. Nevertheless, let me repeat with emphasis that the issue of proper recognition of the child rearing function in our society is at the centre of this government's concern with the status of women. That is a subject on which I welcome further discussion.
The increasing sense of financial insecurity of parents who choose to remain outside the labour market due to marital breakdown, discontinuity of employment, loss of labour force skills and other related phenomena, is a mounting concern of this government. Recent and proposed changes in divorce laws and pension regulations address some of these issues. But then again this subject, as vitally important as it is, is not the issue raised by the motion under discussion.

February 27, 1978
Housewives' Allowance
Regarding the target population and the principal objective of the proposed policy study, namely, material support for parents with dependent children, I will address a fourth issue. This is the issue, as stated in the motion before us, of ensuring the adequacy of global income of families in relation to needs.
As you are all well aware, early in 1973 the government initiated a review aimed toward this objective: ensuring the adequacy of family income to meeting needs. At that time the Minister of National Health and Welfare tabled in this House the working paper on social security in Canada and launched the joint federal-provincial social security review. Since that review began there have been several major initiatives which have contributed very substantially to the attainment of the type of income security system envisaged by the hon. member for Bellechasse.
It will not be necessary to remind the House in detail of the many provisions that have come into being during the last few years through the sponsorship in the Ministry of National Health and Welfare and through the actions of this House. Among them I will cite only the tripling of family allowances, the tying of their purchasing power to the cost of living; the increases in old age security and in the guaranteed income supplement payments as well as their tying in to the consumer price index; the increase in Canada Pension Plan benefits and their protection against inflation as well as the increases which we have seen across the country in social assistance scheduled. Last but not least is the steep rise in income tax exemptions that has taken place.
Beyond these provisions, as I have already suggested, further income distribution proposals should be addressed to specific target populations in need. It is not sufficient to demonstrate that a segment of those affected are still in need in order to argue for augmenting universal income provisions. The taxpayer will not easily agree to give up more money for such unspecific purposes.
Therefore, the purpose of the motion must be understood to refer to the investigation and consideration of the needs of parents with dependent children which are not presently met by the broader income support systems. Clearly, only a portion of those with children will be found with valid claims for greater financial assistance; and that portion is by definition to be found largely among low income families. The motion, therefore, suggests that an investigation is necessary to determine in which income groups we still find parents with dependent children whose financial needs are not fully met for whatever reasons.
This is the type of issue which my department investigates on a continuing basis, and in so far as the issue raised by the motion is understood in these terms, I find myself in full agreement with it. Creating an atmosphere of Financial security for every Canadian does not mean that we can be complacent and pretend that all problems are being solved. There are

emerging needs and heightened perceptions of needs in a rapidly changing society which force us to be watchful and responsive at all times. In fact, as I have already stated in this House, the Department of National Health and Welfare is currently studying the means for instituting tax credits to benefit low-income earners and one-parent families, which are examples of how we seek to respond to changing needs in society. These studies, I might add, are also targeted in large measure to provide support to parents with dependent children.
Having said all that, I can now address a fifth issue, namely that this proposal does indeed refer to the provision of family allowances and income tax exemptions for dependent spouses and children. These are the two basic mechanisms available for the support of the child-rearing responsibilities of parents. With regard to family allowances, the first substantial step towards ensuring that family income matches family responsibilities was taken in 1974 by increasing the allowances to an average of $20 per month, by tying their purchasing power to the cost of living, and by maximizing the benefits to lower and middle income groups through the taxation of the allowance. In addition, provision was made for provincial legislatures to vary the level of federal family allowances, subject to national norms, in order to better integrate them with provincial social security systems. Two provinces, Quebec and Alberta, have taken advantage of these provisions.
With regard to personal income tax exemptions, I need only say that the basic deductions for the tax-filer, spouse, and two children under 16 today is $5,120 as opposed to $2,600 for the same family six years ago.
I would contend, Mr. Speaker, that the motion put forth by the hon. member for Bellechasse, although commendable in its intent, when examined closely comes down to a request for consideration of measures for the support of parents with dependent children in low-income situations, and that it is therefore misdirected in failing to take into account the existence of two very important provisions designed to accomplish precisely the objective which he advances. On the basis of these thoughts, Mr. Speaker, I cannot support this motion.


David Samuel Horne MacDonald: Mr. Speaker, I am extremely grateful to the hon. member for Bellechasse (Mr. Lambert) for bringing forward this motion; it is an important contribution to the list of subjects considered by this House during the private members' hour. As the previous speaker recognized, this is a matter which has been causing increasing concern not only to people in government but to many in the private sector as well. I do not think we should lose sight of the fact that one important if not crucial aspect of this subject involves recognition of the value of labour, of work done by those who work in the home.
We should not assume, simply because of the appearance of this motion before us, that there has been widespread acceptance of the idea that a definite value should be attached to the contribution made by homeworkers. While traditionally the major part of home-making activities has been carried out by women, increasing numbers of men are choosing to spend a
February 27, 1978

certain amount of their time in the home carrying on homemaking activities as part of a changing lifestyle. It is important, I believe, to recognize this trend.
I am sure most hon. members can confirm this either from personal experience or from the experience of friends. I can think of friends of my own who from time to time have varied the sequence of participation in domestic tasks. It happens from time to time that one or other partner decides to leave the public labour force and work in the private labour sector of the home. Thus it is not totally the case that work in the home is reserved for women. There should be a flexibility attached to modern arrangements in societies such as ours.
Of course, changes of this kind do not come quickly or easily. Indeed, presentation of this motion does, of itself, create a danger-that in responding to the motion as it is phrased we might be moving toward a solution which would create more difficulties than the present problem. By this, we might be in real danger of reinforcing the whole notion of a female ghetto as represented by work in the home.
I say this because implicit in the motion before us is the idea that, basically, women should remain in the home. To concur with the proposition put forward in this motion would, I suggest, simply strengthen that particular conception. The thrust of the proposal is that women would be in a position to remain at home without suffering economic loss, a consideration of particular importance today when, unfortunately, a second income is necessary if many families are to survive. Such families find themselves in a situation where one wage-earner simply cannot supply the household needs. So especially at the lower end of the income scale we find women being forced out of the home not by choice but through economic necessity.
I can well imagine that the hon. member who proposed this motion has done so with the needs of such families in mind. However, adoption of the motion might lead to substantial difficulty. I would refer to a recent report of the Canadian Council on Social Development entitled "Women's Pensions", specifically to pages 124 to 126, which analyze the whole question of pay for housework. The report outlines the various arrangements which could be made to improve the economic position of those who work in the home but recognizes that specific solutions would almost ensure further dependency, locking women particularly into a housework role from which it would be very difficult to escape. Summing up the options available, the report states:
Finally, the pay for housework proposal does nothing to solve the sexual division of labour inside and outside the home. Indeed, it may simply serve to legitimize it.
That one sentence contains the nub of the difficulty presented by the hon. member's motion. Further, summing up the report on page 235, there are one or two further comments which go to the heart of the housework for pay question. I quote from paragraph two of page 235:
The recognition of so-called housework must be enhanced through fundamental reforms such as family law reform as well as through largely symbolic but important changes such as the inclusion of such work in the measurement of gross national product.
Housewives' Allowance
The author of this report, Mr. Kevin Collins, has done outstanding work with the Canadian Council on Social Development and has now gone on to work with the Canadian
Labour Congress. Here he has stressed the need to recognize the importance of the work which is done in the home. For far too long, those who have worked in the home, for the most part women, have been regarded as providing a service of a kind which in other fields was provided by slave labour. If this motion does nothing else this afternoon, it emphasizes once and for all that those who work in the home are adding every bit as much to the total welfare of society and the totality of the gross national product as those who are employed in the well-known and strong professions of society.
I say again that we owe great credit to the hon. member for Bellechasse for bringing forward this motion. However, as I said, the danger is that we will reinforce the notion of a ghetto. It would lock women in particular into a no-choice situation. They would be forced to remain in the home, even though that may not be their basic desire.
As some members will recall, only a few days ago in this House I raised some questions with the minister responsible for the status of women. Knowing his great interest in this question, I am sorry he is not here to participate this afternoon. I raised with him the report that had been distributed through my office by a group of concerned female public servants. They indicated there were considerable problems within employment in the public service of this country. I want to quote a couple of sentences from the report to show how difficult it is to break down the notion of these ghettos, whether they exist in the home or in the public service of this country. In the opening part of this report they state:
The attached is from a group of concerned women who are witnessing every day signs of increasing discrimination against women workers. Press reports have indicated that there is growing opposition to women workers. Few have reported on the fallacy of the argument that women are a cause of the high unemployment rate.
If women are the cause of increasing unemployment in our society, by all means let there be a regular allowance so that they can get out of the work force outside the home and stay in the home. However, if we were to take that very retrograde step, it would be a terrible disservice to the women of this country. The report goes on to note that we have already established in public service employment in this country a very great ghetto. I want to read a brief section from the report under the heading "Job Ghettos". I quote:
One million women work in the clerical group and half of them are stenographers, typists or receptionists.
This is in Canada generally.
In services, almost two thirds of the women work as cooks, waitresses or hairdressers. Of the half million professional women, more than 60 per cent are school teachers or nurses. In the federal public service, the percentage of administrative support jobs filled by women has increased steadily over the past five years (from 68.2 per cent in 1972 to 78.8 per cent in 1976), thus creating the biggest job ghetto in the public service.

February 27, 1978
Housewives' Allowance
When hon. members relate that to the figures of those women who are employed at the very senior levels of administration in the public service, they will realize what women in public service employment are up against.
According to a listing of departments from the Public Service Commission 1976 annual report, there were only 38 females in the senior executive capacity, known as SX, compared to 1,221 males. National Revenue with a total of 23,736 employees, of which 39.4 per cent were women. There were 55 employees in the SX category, but not a single woman. The Department of Supply and Services had 10,217 employees, 46.8 per cent of whom were women. Of 62 in the SX category, there was not a single woman.
In the Public Service Commission, which is charged with the redressing of the balance in terms of employment of women at senior levels, there were 4,042 employees; 55 per cent were women, there were 27 in the SX category, of which only one was a woman. Obviously she must have been regarded as a token woman in the SX category.
In the Department of Secretary of State where almost two thirds of the employees are women, there was not one in the SX category. CIDA, which deals with the development of countries around the world, with a thousand employees, roughly half of them women, with 31 people at the SX level, does not have one single woman at that level. That is the kind of situation women face today in the public service.
What concerns me about the motion today is that we might restrict the opportunity for women to have their rightful role at every level of employment, not just in certain ghettos outside the home as is presently the case at a clerical administrative level, but throughout the public service and employment in this country.
I will not carry on this debate any longer, Mr. Speaker. It has been a useful contribution to a particularly important question, and I hope other members will have an opportunity to contribute to it as well.


Stanley Howard Knowles: Mr. Speaker, as the Parliamentary Secretary to the Minister of National Health and Welfare (Mr. Robinson) and the hon. member for Egmont (Mr. MacDonald) have indicated, it is possible, on the one hand, to praise the hon. member for Bellechasse (Mr. Lambert) for bringing in this motion and then to turn around and find all sorts of flaws in it. I suppose I could find a flaw in it myself. However, I am more concerned, to give my support to the intent of the motion, which is a good one for us to be considering this afternoon.
Time is going on and I shall not be part of the talking out process. I have learned in private members' hour how to say what is on my mind very quickly.
I feel that the Parliamentary Secretary to the Minister of National Health and Welfare missed one of the main points in this whole proposal. I recognize that in the motion there is a reference to the ensuring of a global income. However, it seems to me that the main reason for making payments of some sort to housewives and mothers is not just as an addition

to income, but as a means of recognizing the contribution these people make.
During the first part of his speech the parliamentary secretary showed no indication of that. When he got along into his speech, he talked about recognition. What did he say? Wives and mothers should enjoy the prestige that they have, that that should be sufficient recognition. That is where I threw in my reference about being members of parliament. There is a lot of prestige attached to our position as members of parliament, but we are not a group of people who are prepared to do it for no pay, just recognition. I submit that the time has come when we should recognize the work being done by housewives and mothers in the same way as we recognize all others.
I recognize the argument that the hon. member for Egmont made about job ghettos. However, I think he carried it a little bit far. I would like to see an equal chance for women whether they go out into the labour market or stay at home. As the hon. member pointed out, there are plenty of ghettos. However, I believe he is overplaying that word as far as life in the home is concerned. I contend that, there should be equal opportunity.
I promised myself to keep this contribution brief. However, I want to say a word about my concern with regard to equality for women which also extends to the time when they should be on pension. It is a shame we have not found some way of providing women in the home with the equivalent of the Canada Pension Plan. This might be one way of doing it. If we can put them on some sort of allowance or salary for the work they do in the home and count that as a contribution to the Canada Pension Plan, we might be able to do something about it. We shall have more to say about this matter on another occasion.
My main concern this afternoon is not to point out the flaws in the hon. member's motion but to commend him for bringing it forward and to encourage him to keep at it.


Mrs. Simma Holt (Vancouver-Kingsway):: Mr. Speaker, I did not intend to enter this debate this afternoon, but I cannot sit here and listen to this kind of tokenism, perpetuation of role locking a woman into the role of homemaker-a place in life she may not choose. If you want to pay your wife, pay her yourself; the country should not have to pay the cost. I do not think there are many women in Canada who would welcome this, as opposed to having essential help to what I would call the "displaced homemaker". These are women who have carried out this job as wife and mother for 10 or 15 years and raised their children with little imaginative support in the home. Their husbands were out enjoying themselves. I have worked all my life in that world and I know the men have had a much better and easier time of it. They have their coffee breaks and other privileges. They had freedoms, often, to act in a way I did not admire such as being disloyal to the women at home working.
February 27, 1978

We must give some consideration to those women who have been homemakers. There should also be equality in the home. We now have a number of househusbands, as they call them, who stay at home and look after the children. They must have equality with their wives who are out working. They are entitled to equal respect and equal opportunity.
This debate reminds me of what might have happened even before there were women in this House. This whole matter dates back to even before the 1920's. I have been in the work force now for about 35 years. I remember when men tried to prevent me from being in the outside work world. They told me, and are still trying to tell me, that my place is in the home. They suggest I have no right to be in the work force because, God forbid, I may be taking a job away from some man. There is nothing in our society that says men are superior, more competent and more able than that other 50 per cent of the population. It may very well be that our society, our governments, our institutions, our working force and, perhaps, the entire world would be better off if we recognized the fact that there is another 50 per cent of the population, the women- those members of society who not only make good mothers and homemakers, but also good lawyers, good accountants, good engineers-


An hon. Member:: Good members of parliament.


Simma Holt: I thank the hon. member for Toronto-Lakeshore (Mr. Robinson) who says "good members of parliament". I would like to see 50 per cent equity in this House. We are always talking about giving proportional representation by race. Perhaps it is time we also said we should have proportional representation by sex-in the House of Commons and in the work force.
I know there are many women who will not accept this motion by the hon. member for Bellechasse and I do not blame them. Many of the young women today are studying law, medicine, etc., even while they are raising their children. This is much more difficult for them because there are still some men who do not think they have to ease the workload for women, even those at school or working. If there is work to be done in the home it should be paid for by whoever is earning the living, be it the man or the woman.
There must never again be another Murdock case in Canada. In that case a woman who had worked her whole life to help in the building of an estate lost it all because she happened to be a member of the female sex. In courtrooms women are strangers in a foreign land and are taken to the cleaners.
If a woman wants to stay at home she should have that right and be paid for the work she does there by the one who uses her services-if this partnership requires pay. 1 think the greatest occupation ever for a woman or a man is the raising of a family successfully. There are none I respect more than those who have done so. There are none in this world we can respect more than those who have brought children into the world and
Housewives' Allowance
fashioned them into good human beings. The children of today will be the leaders of tomorrow. There is nothing that says the woman alone must raise the family.
The greatest failures among children are the results of the very thing the hon. member is suggesting in his motion, that the men can abdicate their responsibilities and let the government take over in the raising of their children while the women stay at home alone. As the hon. member for Egmont (Mr. MacDonald) says, this would legitimize the servant status for women.
I had a cartoon slipped to me early this afternoon and it is amazing how appropriate it is to this debate. It comes from Grainews, published by the farm information services of the United Grain Growers Limited, P.O. Box 6600, Winnipeg. Hon. members can send for this cartoon if it pleases them to adopt a chauvinist line. It is a picture of two farmers beside an old cow. Beside them is an elderly woman walking away with a milk pail. Underneath it states: "I don't care how good she used to be! Look at those teats! She's a broken down old bag and I'd get rid of her!". That attitude is what it is all about. I say we must all strive here to get women equal rights and equal respect.
Do you know, Mr. Speaker, what happened to the homemakers of the generation just before mine? They finished their job of raising the children but were not prepared to go out and earn a living outside the home. Some ended up in mental hospitals; some managed to rebuild their lives; and some managed to learn to use their leisure properly. Many turned to alcohol. Those were the tragedies of once good wives and homemakers-rejected and lonely.
In my generation a few women have broken out and are free. Many of my friends have gone back to school in their middle years and are trying to find a way to catch up. During the 20 years they were destined to be in the home alone, without much help, they were left behind in the work world by men. In many cases the man and woman would enter law, for example, at the same time, but the woman would have to stop because it was her duty to stay at home with the children and keep house. While the woman stayed home, locked into this thing called "woman's duty," the man moved on to become a judge, the head of a bank, the head of a business, a head plumber, or a head horticulturalist. As a result, when the women were free to enter the work force they could only go into jobs such as waitresses and secretaries.
Let me stop here to say that the most important and strongest group of women in our society is that group made up of our secretaries. I have discovered-and perhaps this is why women have been kept out of the board rooms for so long- that the male executives do not want women to find out the truth of how they do their jobs. The jobs really are done by the secretaries. In the law profession for example, it is very interesting to note that the secretary does most of the work- the factumes, the reports and the statements of claim. She does all that work and may make $8,000 a year.
I thank the hon. member for Winnipeg North Centre (Mr. Knowles) when he argues-

February 27, 1978
Bank Act


William Kenneth Robinson: Mr. Speaker, I rise on a point of order. I must take exception to some of the remarks of the hon. member. Being a lawyer myself I cannot agree that all of the things she has said are in fact accurate.


The Acting Speaker (Mr. Turner):: Order, please. Let me suggest to the hon. parliamentary secretary that that is not a point of order but rather a point of debate.


Simma Holt: Thank you, Mr. Speaker. They must defend their own injustices to women. I am not saying the parliamentary secretary is in this position, but many lawyers pay $8,000 a year to these women and charge $20,000 to $50,000 for the cases those women have prepared for them.
I say that young women now know they must prepare for their lives in their middle years. They will have to attain their degrees and nurture their talents in order to prepare their lives for the future. If both men and women share in the lives of their children, I am sure we will have happier children.


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. MacEachen (for the Minister of Finance) that Bill C-16, to amend the Bank Act and the Quebec Savings Banks Act, be read the third time and do pass.
A. Daniel McKenzie: Mr. Speaker, I should like to continue with my remarks in regard to how credit unions offer many additional services free of charge compared to banks. Turning to the article which I was referring to earlier, it reads as follows:
Banks certainly offer many of the same services, and quite a few others as well-although there's usually a charge.
But the credit unions offer many of the everyday services free, and the rates they pay for savings are often slightly higher than those paid by the banks.
To obtain the revenue for this, the credit unions sometimes charge slightly higher loan and mortgage rates-but then they often allow you to make extra payments ahead of time without penalty, which can be worth quite a bit.

The article went on to quote the comments of one member of a credit union who indicated the following:
We own a 12-site apartment and our cash flow is about $30,000 a year. Our account's monthly balance ranges from $1,200 to $2,000. Our bank didn't pay interest on the daily balance, so we switched to a credit union which does. And our credit union cheques work out to a cost of ten cents each versus the bank's 21.7 cents.
These are things we can question the bank representatives abcut when they come to committee in order to find out why the same services cannot be offered.
Earlier in my remarks I referred to the government's white paper on revisions to the Bank Act. It pointed out that some type of legislation would be brought in to deal with venture capital. Just last month I spoke on that subject in another debate. I indicated how important it was for our secondary industries to obtain venture capital. Venture capital cannot be obtained because of conditions in the country today. Apparently the government has some kind of program in regard to venture capital which will be presented.
Last week the Minister of Finance (Mr. Chretien) stated that the opposition was making him look good. When we experience delays like this and the stalling tactics which have occurred, neither the minister nor the government looks good. With the economic conditions in the country today, the government looks terrible when it delays something as important as the Bank Act. Also it is a disgrace that the minister is delaying the development of the new Bank Act. Independent businessmen of Canada have pointed out the kind of changes required in the legislation in order for small business and secondary industry to obtain venture capital. This is important today with our record high unemployment, which is costing $8 billion a year. It is time for something to be done to expand our secondary industry and to assist our small businesses, instead of just bringing in ridiculous pieces of legislation calling for delays in bringing in the Bank Act.
Earlier this year I read from a document from a financial group in Winnipeg named Peter Henry Jerch and Associates. They are a firm specializing in corporate finance and acquisitions. They have a significant roster of clients needing capital and are aware of many of the situations where the injection of equity venture capital can produce very beneficial results to them and to the economy at large. In fact, the need is so broad that nearly half of all companies that apply to banks for credit should have additional venture capital to make them more successful and more viable.
Instead of allowing this tremendous outflow of capital to the United States and large numbers of businesses to move to the United States because of the political climate here and the uncertainty caused by delays in producing the Bank Act, which should have been tabled here at least a year ago, the government points out the need for all these things in the white paper but is doing nothing. It is just bringing in ridiculous pieces of legislation asking for more delays.
February 27, 1978

This investment counselling firm also pointed out:
... if such venture capital investments could be offset in full against other income, and besides the tremendous impact on the short and long term economy, there would be no negative effect on government tax revenues. To test this assertion, Peter Henry Jerch and Associates conducted a detailed survey of 40 smaller Canadian owned companies located in Ontario, Manitoba, Alberta and B.C. The survey delved into nearly every aspect of a company and included a review of financial statements and books, a review of management ability to carry out a proposed strategy, and a study of product viability and historical projected market acceptance. Detailed summary tables were drawn up based on the results of this in depth review.
They go on to give statistical information on how they could expand and the number of jobs they would create if they could receive additional venture capital which they cannot obtain in this country and which, as the minister pointed out in his white paper, is one of the top requirements in this country. But apparently we will have to wait until unemployment goes up, more businesses leave and more investment capital leaves the country. Then the government might get around to bringing in revisions of the Bank Act. This is a ridiculous situation although, as I said at the beginning of my remarks, we could go along with a further extension of the Bank Act if the legislation is tabled now and businesses, credit unions and banks across Canada have this document to study so they can prepare themselves.
Therefore, Mr. Speaker, I cannot support the delay for which the minister asks. I hope he will read the remarks that were made today by the hon. member for Edmonton West (Mr. Lambert), by myself and by others who will speak later. I hope they will be forceful also in demanding that this irresponsible minister table the Bank Act immediately, instead of making ridiculous statements in the House that he looks good.


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I would like to say a few words about Bill C-16 which is before us, the purpose of which is to extend the Bank Act for another year. My colleague, the hon. member for Winnipeg South Centre (Mr. McKenzie) and the hon. member who spoke prior to him, the hon. member for Edmonton West (Mr. Lambert), both expressed my views clearly on why we are debating this bill when, as they have said, we should be debating the new Bank Act. I know that the minister, the people in his department and most of the people in the private sector to whom I spoke look upon the revised Bank Act as the basis for any economic recovery which will occur in Canada. We have all read the white paper on banking and the proposed changes to the Bank Act. We know that the legislation is ready and has been for some time.


Mr. Chretien:: This is not true, it is not ready.


William James Kempling: Perhaps we have been misinformed, but we were informed in January that the Bank Act is ready and that we might possibly be debating it-


Joseph Jacques Jean Chrétien: With the permission of the hon. member I would like to tell him that if the bill were ready, 1 would be tabling it. The bill is being drafted at this time by the Department of Justice. I am as frustrated as the hon. member
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that the bill is not ready. We had a long debate after the white paper was brought forward, we had more representations and some changes had to be made. Since the bill is not ready, I am not tabling it. It has not come back to me in its draft form.


Dean Waldon Whiteway: That is the problem. The bill is not ready.


Joseph Jacques Jean Chrétien: I said that in the committee about two weeks ago. I know that when the hon. member said the bill was ready, he was probably using information he had, and I wanted to correct his wrong impression.


The Acting Speaker (Mr. Ethier):: I am sure the minister wanted to rise on a point of clarification, but this does not justify a point of order.


Dean Waldon Whiteway: That is the problem, it is not ready.


Steve Eugene Paproski: Nothing is ready over there.


William James Kempling: I thank the minister and I accept his explanation that the bill is not yet ready. What I was referring to was information that we had in January to the effect that the bill was ready, had been drafted and approved; and, I might go on to say, we were even told that it followed the white paper very closely with few changes. I am referring to the white paper which was presented in August of 1976. We were told that that is the sort of bill we would be seeing. So I was not just spreading an idle rumour; I was speaking on the basis of pretty good information.
However, now that we are talking about the bill not being here, let me point out that the bill was being considered in 1973, 1974 and 1975. Here we are in 1978, five years after the bill was first considered, being asked to extend the existing legislation for another year to give the government a chance to bring in revised legislation. It is particularly important because people in the private sector are being pressured by the government to stimulate employment, to expand their plant facilities, to help pick up the slack in unemployment, to help export more products, and to offset our balance of payments deficit. The reason for not doing this, aside from the general economic condition, is the severe difficulties they have in obtaining adequate financing through our banking system.
In the last ten years, the ability to accumulate wealth has dried up. Normally, one could go into the stock and raise capital in order to spawn a new industry or enlarge an existing one, but that facility is not available today. The result is that we have to rely on what was traditionally a short-term money market for long-term investments. When we have difficulty getting those commitments out of some of our banks because of restrictions in the existing Bank Act, that is one of the major reasons for the absence of an upsurge in economic activity in Canada.
We need a variety of financial institutions in Canada. After reading the white paper on proposed changes to the Bank Act and on proposals regarding the credit union movement I was concerned. I suggest to the minister that possibly we need two levels of financing. Perhaps we need the level of our ten

February 27, 1978
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chartered banks and another piece of legislation to deal with credit unions, merchant banks, discount houses and those kinds of financial institutions. I am not convinced that we should bring credit unions totally under the control of the Bank Act.
If we look into the matter carefully, I think we will find that the bulk of assistance being given to small business today in Canada is given by credit unions. A tremendous amount of assistance is being given to small business by credit unions, I believe more than by chartered banks. I would be upset if we tried to cast a net and draw credit unions totally into the same orbit in which we find chartered banks.
One of the things we need most is confidence in the dollar. We also need confidence that Canada will continue on some rational footing for the next period of time. We need confidence in the integrity of Canadian enterprise. I do not think that confidence will come through programs and incentives from the Department of Industry, Trade and Commerce, where there is much bureaucracy but as a result of a realistic revision of the Bank Act, a close look at the functions being performed by trust companies and credit unions and an examination of the merchant banking system which we find to be very successful in Europe.
In my own career in business I had an opportunity to use merchant banks. Many years ago we had a tight money policy. At least that is what bankers in Canada told us. I had some difficulty acquiring some funds, so I got in touch with a merchant banking firm in London, England. After telex messages passed back and forth between London and my office, in a matter of 24 hours a line of credit was arranged which could not be arranged with one of our chartered Canadian banks. Merchant banks have a place in our banking system.
One gentleman in the business community whose opinion I particularly respect told me at the weekend that sooner or later Katz' Law is going to come into effect in Ottawa. According to Katz' Law, when you have completely screwed up the economy sooner or later you are going to do the things you should have done in the first place. Had the government pursued a revision of the Bank Act in 1974 and 1975, we would have been better served than we were by the imposition of controls. As I have said, the cornerstone of the economic recovery program is a revived and revised Bank Act.
One of the difficulties which was experienced by many businesses in 1975 and 1976 when our interest rates were running high was that they had to make arrangements principally in the United States and Europe to finance inventories. They entered into arrangements with European and American suppliers to finance inventories at rates of interest ranging from 5.5 per cent to 7.5 per cent, which was considerably lower than rates in Canada. As a result of a slowdown of activity in 1977 many of those business firms are now carrying notes from European and American financial institutions on their books. With the present devalued dollar they are into a serious profit position.
The stabilization of the dollar, a reconstituting of the Bank Act and a revision of the Bank Act are vital to everything we

do in business, and I am amazed that when we came back here in the fall the government did not announce that it would proceed full speed ahead with a new Bank Act and endeavour to have it in place by the spring of 1978. I want to stress the need to revise the present act. Businesses face tremendous difficulties with various sections of the existing act. I have raised the matter of section 88 before. That is the section of the act which deals with collateral. Under section 88, if you are in a manufacturing operation, banks will accept as collateral raw material and work in progress. However, once that work in progress is completed and is part of inventory it no longer falls under section 88. Where material rolls off the line and is delivered, that is fine; section 88 works well in that situation. But where there is a slowdown and where there is an accumulation of inventory, the business involved rapidly runs out of money, especially if that inventory is stored for a long period of time.
I have heard various members of the New Democratic Party urge that certain industries should be stockpiling or building up inventories to keep employment going during the present economic slowdown. The very real difficulty is the financing of that inventory. Most trading companies and most manufacturing companies have a great deal of difficulty financing finished inventories. Consequently, they tend to keep a minimum of finished inventories on their shelves. We really need some new instruments and some changes in the act in order to accommodate this situation. Banks need a new instrument to deal with small and medium-sized businesses, and I hope the minister will consider what I have said about two levels of financial institutions.
Once again I say that credit unions, trust companies and merchant bank operations could be governed by another type of legislation. Perhaps there could be a financing instrument to deal with the requirements of small and medium sized businesses. Under the existing act the small businessman really has very little leverage through the medium of a debt instrument which he can use to finance his business.
We are concerned, of course, with the forecast in the white paper about the role of the chartered banks in the areas of leasing, computer services and the extension of consumer credit. If the banks enter these areas to any great extent it could be to the detriment of the small and medium sized business sector. I think that would be a tragedy, Mr. Speaker.
We face difficult times. Unemployment stands at 8.3 per cent, inflation at 9 per cent, the Canadian dollar is under 90 cents U.S. and is unstable, while private capital spending is below 3.5 per cent. Everyone is calling for increased activity in the private sector and it seems to me that introduction of the Bank Act would do more to stimulate this than any other action. Programs of the Department of Industry, Trade and Commerce, GATT incentive programs, controls or no controls, labour relations, competition legislation-none of these things will have as much effect on the private sector as a revised Bank Act.
February 27, 1978

The minister has said that the legislation is presently being drafted by the Department of Justice and that he has not seen the draft. Of course, I take his word for that. He has also said that he wants to bring the bill to the House as soon as possible. That is rather strange when you consider how long it has been around. The Bank Act is due for revision every ten years and we know work was being done on it in 1973, yet after five years we are being asked to extend the present act.
I would urge the minister to bring the bill to the House as soon as possible. We did not have an opportunity to debate the white paper and it was never referred to the Standing Committee on Finance, Trade and Economic Affairs. It is true that the Senate studied it and the chartered banks and some other institutions had an opportunity to consider it, but the House did not. When the revised Bank Act is ready we are anxious that the House have an opportunity to debate it, to hear witnesses and, if necessary, to offer amendments to make it legislation the business community can work with for the next ten years.
That is about all I have to say on Bill C-16 at this time. Some of my colleagues will be speaking and I presume we will proceed with the bill when the other speakers have completed their remarks.


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, there are three main points that should be made when considering Bill C-16 and I do not think they can be made too often. First is the irresponsibility of the government; second is the uncertainty in the business community; and third is the uncertainty of future activities of the banks themselves.
Some of my colleagues have spoken of the performance of the government leading up to this bill and some of the things they have said are worth repeating briefly. The Bank Act expired on June 30, 1977. It is not as if the government did not know this was going to happen; one might say the government had ten years' notice that the act would expire. This act is not like any other; it does not just expire and become part of history. If it is allowed to wind down and expire, the banks are forced to wind down all operations on the day of expiration and then have no authority by which to operate.
If the ten years' notice were not enough for the government, they were reminded of their responsibility to introduce new legislation in 1977 when the first extension bill which extended the Bank Act until March 31, 1978 was introduced. After that came the white paper. The government might say it has so many things to do it could not possibly get the legislation passed by March 31, so now we are asked to extend the act until March 31, 1979.
There is a catch in this bill, Mr. Speaker. It is not only a bill to extend the operation of the Bank Act until April 1, 1979; in fact, it could go on for quite a few months more. That is not evident from the bill. The extension could be for several months or ten months. What the bill says is that it will extend the act beyond the end of March, 1979 until the sixtieth sitting day of parliament next thereafter. Parliament rarely sits more than 20 days in any month so that would give three months if
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parliament were in proper session. But let us suppose the government called an election next March, although, heaven forbid, there need not be an election until the fall of 1979. If an election were called in March, 1979 there would be a two-month election campaign during April and May. The House traditionally does not sit until a couple of months after an election so that would take us through June and July, nor does it usually sit in August, September or October. This would mean a possible extension not to March 31, 1979, but for seven or more months after that.
With that background I think we must ask why there has been a delay and why the government did not have the legislation ready. It has known for ten or eleven years when the review was due. If we look at the remarks of the Parliamentary Secretary to the Minister of Finance (Mr. Lumley) at the time the bill was introduced in the House in January of this year, it might be interesting to note that the Minister did not see fit to present the bill. It was presented by his colleague the Minister of Transport (Mr. Lang) and was introduced by way of opening remarks by the parliamentary secretary. One would have thought that the minister would find it important enough to be here since it was the first day of the resumption of parliament after the Christmas recess. In any event, at page 2118 of Hansard the parliamentary secretary said:
First, the extent of consultations encouraged by the white paper. Second, the extent and complexity of the task of converting the principles of white paper into legislation and particularly, where appropriate, making the Bank Act consistent with the principles and provisions of the Canada Business Corporations Act and, third, the extent of the pressure of other priorities on the small group of legislative drafters in the Department of Justice.
If I could comment for a moment on the last reason. We had an example where a mysterious bill materialized from the offices of the legislative drafters in the Department of Justice, which bore the name of the Minister of Finance (Mr. Chretien). It was strange that the Minister of Finance denied any connection with this particular bill. When I asked the Minister of Justice (Mr. Basford) last week what minion in his department had authorized the drafting of this bill, he was unable to recall the name of the author, what authority had been given for its drafting or for its release across this country.
What about these first and second reasons, which may be more important? The first was the extent of consultations encouraged by the white paper. The government called for submissions in response to the white paper from the business community. They received them and they were considered. They were distributed to all of the members of the finance committee. I have stacks of them in my office. But did the government ever call that committee to consider them in detail? No, Mr. Speaker, there have been no meetings by the standing committee to consider those submissions. The government itself undoubtedly had lots of time to examine those submissions. Goodness knows why they did not pay any attention to them. Maybe they did. Maybe that is why they withdrew the legislation.
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The second reason given by the parliamentary secretary is the extent and complexity of the task of converting the principles of the white paper into legislation. I am sure the banking community would like to know where they stand regarding the submissions which they made at the request of the government. The request was made for some input respecting the new rules that will be affecting banks in the near future. The legislation is nearing completion and the bill will soon be ready for introduction. At least, that is what we were told today when the hon. member for Edmonton West (Mr. Lambert) asked what was likely to be happening with the legislation. There have been ample opportunities for the government to have it ready. The words of the minister today merely repeated the statement which the parliamentary secretary made in his speech over a month ago. One would wonder if there is any faith in the system as exhibited by the government.
Again at page 2118 of Hansard, referring to the earlier amendment, the parliamentary secretary said:
That wording provides flexibility and acts as a safeguard in the event that parliament is not sitting at the end of March, 1979-
I believe I covered that when I said there was a possibility that this bill might not to passed until late in the fall of next year.
That is enough about the performance of the government. We should now turn to the performance of the banks to see what kind of consideration they deserve. The banks are often painted as ogres or worse by some members of this House. Management of Canadian banks is responsible in the performance of its duties. Everybody is not happy with the performance of the banks, just as everybody is not happy with the performance of politicians. There are split responsibilities. The management of Canada's banks has responsibility to its depositors. They must safeguard the millions of dollars belonging to Canadians on deposit in the banks. They are also responsible to the countless thousands of Canadians who own equity in the banks.
I do not have the number of shareholders at hand and I do not know whether that information has been given in this debate. However, I do remember when the International Nickel Company was the subject of debate in this House that the number of shareholders in Canada in that company was 55,000. If I had to guess, Mr. Speaker, I would say that there were several hundred thousand Canadians who had direct ownership of shares in Canadian banks. If we take the institutional investment in the banks and consider the beneficial ownership in the banks' equity stock by Canadians-and in this respect I am referring to pension funds, estates and trusts-I suggest there are probably millions of Canadians who have some direct or indirect interest in the operation of Canadian banks.
The executives themselves are not a particularly wealthy group. Some people are impressed by the high salaries of these professional managers in Canada. There was an example given just recently of an industrialist managing a large company earning something over $300,000. Salaries of $200,000 are not at all rare in Canada today. I do not know what salaries the

banks pay their top men, and this information may not be published. But that is not the point. These men are professional managers whose responsibility it is to serve their customers. At the same time they must protect their depositors and ensure that their shareholders, who are their ultimate bosses, receive a proper return on the capital which they have invested in those banks.
A lot is said about the banks and their huge profits. It is not necessary to go into the dollar figures here, but the percentage increases, which is the kind of information my friends to my left, and particularly the hon. member for Regina-Lake Centre (Mr. Benjamin), seem to indulge in, I have brought with me tonight. Profits of all Canadians banks, not counting the ones which lost money, in 1977 increased between 10 per cent and 13 per cent over 1976 profits.
Everything that is published in the financial world these days is published in numbers of actual dollars, not in so-called real dollars, which is the dollar discounted for inflation. If the government can allow the inflation rate to run at 9 or 10 per cent every year, an interest rate running between 10 and 13 per cent can hardly be said to be unreasonable. After all, the banks deal in dollar units; they do not get the kind of security against inflation which is held by people investing in real estate or in equities which increase in real value so as to offer protection against inflation. The banks have to reflect the result of inflation in the increase in their investments in terms of numbers of dollars. This is not to the discredit of the banks. If there is any blame to be apportioned for that kind of increase, it has to fall upon the government.
What kind of services are the banks performing and what kind of services do we want them to perform? It is true that the banks, because of the type of deposits they were in the habit of taking, were not for a long time involved in the mortgage market. Then, for a time, there was a non-legislative barrier against their being engaged in mortgage transactions- I refer to the interest ceiling placed on banks only. But since then we have seen an increasing involvement of banks in the mortgage field. Indeed, two years ago the banks were the holders of 21 per cent of all institutionally supplied mortgages. So more than one of every five dollars in the mortgage market had been put up by the banks, representing a sizeable proportion of mortgage funding in the housing field at any time. I suppose one might wonder whether this involvement by the banks increased the total amount of money available for mortgages or whether it merely allowed some of the other lenders to run off into other areas. I do not know.
Another important use of the funds of banks is in the small loans field. This is an area which is often overlooked. People sometimes think that the banks are being unfair in charging what they term a high interest rate on loans to individuals; rates of between 12 and 14 per cent are talked about and are realized by the banks. What is often ignored is the risk encountered by the banks and the rates charged by others in the field who are not in the same competitive position. I am
February 27, 1978

referring to some of those lenders who are subject to attack by supporters of the government when the borrowers and depositors legislation was introduced here and then allowed to die on the order paper.
It was interesting to note that when the legislation was introduced the then minister-I think he was the seventh in a row of nine or ten-spoke of an illegal rate of interest and stated that the highest rate of interest the government would consider would be something like six times the prime. In any event, it worked out to something like 50 per cent per annum before a rate would be illegal. And here we have the banks lending with a very small margin, because they pay interest, of course, on the amounts they lend out. They try to pay a rate of interest as high as possible to their depositors, and lend money to other Canadians who need it for individual purposes at 2 per cent or so over the rate. Indeed, sometimes the margin is no more than one and a half per cent. In any event, a real service to the community is being done in this field.
There is another and lesser known area, that of factoring. Many businessmen know how useful the banks are in factoring accounts receivable, say, in direct payments. What do we expect the banks to do in the future? Here is a real opportunity for the government and for the opposition to change the direction of banking in Canada. If the government would only come forward and let us know what plans it has, we could have something to say about the issue and so could the banking community.
With reference to other fields in which the banks might become involved I can only say I see certain dangers. For example, the banks want to become more involved in leasing. I see danger in this. I know there are many ordinary Canadian businesses which lease equipment and so on. If we consider the matter closely we see that leasing, after all, is only another way of borrowing money and that the one operation can be directly related to the other. If the banks were to step into the leasing field they would be competing with those who already lease equipment. When a lessor wanted to increase his line of credit with a bank the tendency, inescapably, would be for the bank to say: We are sorry, we have come to the end of the line of credit we are authorized to extend to you. The door would then be open for that bank, or any other bank, to jump in without restriction and offer to take the contract as a condition of providing the equipment. That is one possibility. There are undoubtedly others which would arise in connection with the expansion of banking activities. Thus it is important that the government get its legislation into the hands of the committee where it can be studied very carefully.
Finally, it is urgent that the bill before us be passed so that the banks will have this element of uncertainty removed from their operations and they will not be wondering whether they will still be in business after the end of next month. The best thing I can think of now as a member of the opposition is to urge the government to produce its revised act as they have promised to do very soon, but which we have not yet seen-


Sinclair McKnight Stevens: Shame!
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William Hillary (Bill) Clarke: My hon. friend says "Shame" and that is a fitting note on which to end. Let the government cease to follow these shameful delaying tactics which are imposing such uncertainty upon the banking and business community.


Leslie Gordon Benjamin: As a country boy from Saskatchewan, Mr. Speaker, I have been listening to hon. members from both sides speak on this measure. I want to take only a few minutes in which to remind the House that all this bill does is extend the provisions of the present Bank Act for another year while the government, like governments before it, agonizes about what should be done with our banking legislation.
In the history of this country, transportation and transcontinental railways were used as instruments of national policy. It seems to me this should be even more the case when it comes to banks and banking: they should be used as a tool of national policy. They should be used as a tool in terms of social policy, the direction of their investment, the kind of profits they make, how they treat their employees and their ethics or conscience in their dealings with Canadians, with their employees, and where they deal in other parts of the world. If anything has been lacking in financial institutions over many decades, it is some kind of conscience in terms of social policy, the ethics of who they deal with and how they deal with them.
One can go back 2,100 years. I do not want to infringe upon the territory of my colleague, the hon. member for Winnipeg North Centre (Mr. Knowles), but the parable of the money changers being driven from the temple is even more applicable today. It may have happened 2,100 years ago, but they have snuck in the back door and are here again!
The banks of our country whose depositors, borrowers and shareholders are Canadians are very large and efficient operators in the world banking industry. They are Canadian owned and operated for and by Canadians. When they deal outside of our boundaries, similar to the way investors did with the Hitlers, Mussolinis and Stalins of this world, one has to ask whether that is the kind of conscionable financial institutions we want in this country.


William Hillary (Bill) Clarke: Yes.


Leslie Gordon Benjamin: The hon. member for Vancouver Quadra (Mr. Clarke) says yes.


William Hillary (Bill) Clarke: To protect the depositors.


Leslie Gordon Benjamin: To protect those depositors who invest money in military dictatorships in Chile and to protect the dividends of those shareholders. Canadian money is provided to bolster a racist regime in South Africa and the hon. member for Vancouver Quadra thinks that is great. One of the reasons Jesus drove the money changers out of the temple was, I believe, because of the exploiting of people. That is a nineteenth century, or even older, philosophy or creed which says it is okay to do anything to make a buck.
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Marcel Joseph Aimé Lambert: How about loans to the left?


Leslie Gordon Benjamin: When it is a totalitarian dictatorship, right, left, upside or downside, it is not okay. If the hon. member for Vancouver-Quadra or the hon. member for Edmonton West (Mr. Lambert) want to invest their money in shoring up a loan for the state bank in Moscow or the military regime in Chile, that is their business. However, I do not know that any board of directors of a bank has a right to do that on behalf of their hundreds of thousands of depositors, customers and, in particular, shareholders without asking them. They never consult with them.


William Hillary (Bill) Clarke: Every year.


Leslie Gordon Benjamin: Every year they throw a party. If a shareholder tries to protest at an annual meeting about the kind of investment that is being made, he gets absolutely nowhere. Every time church groups and shareholders attend annual meetings of banks and protest policies regarding investments or the social conscience of that institution, they get absolutely no place. It is a myth that these private enterprise outfits are very democratic and that shareholders have the final say. I have never yet seen it work with any of these outfits.


Mr. Kaplan:: They can always sell their shares.


Leslie Gordon Benjamin: The $90,000 candidate from Toronto says they can always sell their shares.


An hon. Member:: He can always sell his soul.


Leslie Gordon Benjamin: Maybe, if he has one. It is easy for him to make that kind of recommendation. If he were an investment counsellor, he would abhor what the banks are doing. However, he would advise his clients to invest in banks because there are good bucks in it. Anything to make a buck.
The Royal Bank has participated in a $55 million loan to finance a steel project in Chile. The Bank of Montreal has confirmed it is part of an international group that will provide $125 million in economic aid to the Chilean junta. It is not bad enough that they do that, but they gave $25,000 to both the Conservative and Liberal parties a year ago. I suspect they do that every year. I doubt whether they consulted with their shareholders on that. They sure did not consult with their shareholders about backing up a $125 million project in Chile. They can find that kind of money, but when it is suggested that maybe there should be a few cents less in dividends for their shareholders and a few million for their profits so that this money can be used for the development and growth of our nation, they are quick to say it is not good business or good enterprise.
I know some free enterprising individuals who maximize their participation in our society and country. We might argue about politics, but they make a contribution to their community, province and country in a variety of ways. They treat their employees well, participate in good pension plans and do not invest in what can be called the "anything for a buck" type

of operation. However, our banks and other financial institutions do. That is something that gets our so-called free enterprise system in trouble. Their social conscience, how they deal with people and treat their shareholders is what gets them into trouble.


William Hillary (Bill) Clarke: We are not in trouble.


Leslie Gordon Benjamin: The hon. member for Vancouver-Quadra, like Marie Antoinette, says "We are not in trouble".


William Hillary (Bill) Clarke: Pierre gets in trouble.


Leslie Gordon Benjamin: It does not matter whether it is Pierre Elliott Trudeau or R. B. Bennett. Not that there is that much difference between them-


Stanley Howard Knowles: One is dead.


Leslie Gordon Benjamin: One is dead and the other soon will be politically.
Those who spread propaganda about the great ethics, morality and standards of the free enterprise system have dirty hands. I know some of these people personally. They are fine upstanding citizens. However, how they can look at themselves in the mirror in the morning without throwing up, I will never be able to understand. Not that everybody is totally pure.


Sinclair McKnight Stevens: You have a lot of cuts on your face.


Leslie Gordon Benjamin: The banks advertise on television telling us how great they are for us, but the entire history of the banking fraternity in Canada is bad, and that bad history goes back as far as confederation.
We need only two financial systems in this country, a publicly owned chartered banking system and the credit union or caisse populaire system. Let me tell the hon. member for Vancouver Quadra that about 30 years ago, when I first tried to get a loan from a bank for a $2,700 item, with $2,000 cash on hand, the bank manager, who was a very nice fellow to curl up with and to have a cup of coffee with, asked me if I owned any land, to which I said no. He asked did I own a house, to which I replied no, and whether I had any cash. So I said all I had was the $2,000, a good name and my job. He said he was sorry he could not lend me the $700. That was one of our great chartered banks. I had a wife, three kids and bills all over town like most every other Canadian in those days, but he could not trust me as a customer.
That is when I got wise, smartened up and went to my credit union. When I went to the credit union I paid my $5 for a membership in the union and had my $700 by noon. Let me tell you that I have never gone anywhere else but to the credit union since, Mr. Speaker.


An hon. Member:: You still owe them.


Leslie Gordon Benjamin: I have owed them several times, and sometimes they carried me longer than my own mother did.
February 27, 1978

An hon Member: And she carried you too long.


Some hon. Members:: Oh, oh!


An hon. Member:: You were a long-term baby.


Leslie Gordon Benjamin: I have been a member, on the board of directors and a member of the supervisory committees of a credit union for about 30 years. I have seen at first hand how money can work for people instead of people just working for money. I have seen what can be done for individuals in a community who desperately need the help of a financial friend. I have seen what money can do for an entire community when these private enterprise banks would not touch the project with a ten-foot pole, even though it meant a local skating rink or a curling club. As a result the people got together and did it themselves.
At a time when we need hundreds of millions more investments in low-income housing, senior citizens' homes or, even a real risk item, a day care centre which might go belly-up a year or two later

in other words, when it comes to the things in respect of which money can really work for the people- where do we find these banks? They all have great commercials on television, and they do everything to try to drag you in off the street to make you a loan, even for something for which you neither have the money nor the need. But when society really needs the money, or when a community, a small group or an individual needs financing, that is when whatever amount of social conscience they might attempt to display through their television ads totally disappears.
Let me tell my hon. friend from Vancouver that perhaps I should give him an honorary citizenship in Saskatchewan, or make him an honorary wheat farmer so that he can find out what the CCF did in respect of the co-operative movement in Saskatchewan. In fact, even his own party gave at least lip service to that movement in the dirty thirties, and the labour party bailed out the Saskatchewan wheat pool and the farmers' co-operative. There is a great deal of history of government activity in my province, a government which has said to hell with the banks and has done things itself.
At a time when we need so much investment in homes, hospitals, day care centres, senior citizens' housing and other socially desirable projects, these outfits are telling us how great they are about shoring up outfits in South Africa and Chile. It seems to me that condemns these institutions out of their own mouths and from their own actions. I do not see these banks rushing to help other Third World nations whose short-term prospects are not very good. They may be terribly poor nations with an annual per capita income of $50 or $100. They may be located in the middle of the desert, or because of some other geographical or natural circumstance they are in that category; but I do not see our banks volunteering to make investments, particularly if the chance of their making a buck is not very good. I do not see them volunteering to risk some part of their worth and wealth for these people. I have had many people in the banking fraternity tell me they are willing
Bank Act
to invest their money, but that it must be in a very good thing. Any damned fool can be a banker with that kind of a deal.
I think that governments must have some direction in this regard. This is a horrible thought to my friends to the right and to many across the way, but other countries to the right, the left and the centre have done this with their financial institutions and banks decades ago. They have moved in and directed them in terms of where some if not all of their investments are to go.
These governments have given the banking institutions two choices in respect of how much of their investment will be made in low-income housing, day care centres and other worth-while social projects which may or may not make a buck. They have directed them as to how much investment must go into those projects. They are given one of two choices; it is "compulsory" or they "must" do it.
Let us consider the whole matter of using our chartered banks as a tool of national policy. It seems to me this is even more important than the manner in which our national transcontinental railways are set up. In that case we are looking at investment in projects of national interest and national worth. When you require funding for some great national project the banking community, which obviously will not do it on its own, must be directed as to how much of their investment portfolios will go into the national project.
Let me say a word or two about the people who work in the banks-the tellers, the clerks and accountants. They are all capable, competent people. If they were not the banks would not be making nearly as much money as they do. For decades and decades they have attempted to obtain better working conditions-better hours, holidays with pay and rates of pay- but they have been looked upon as Scrooge looked upon Bob Cratchett. The needs and the wellbeing of the people who work for the banks come almost last in the banks' consideration. In fact, when one looks at the 30, 40 and 50-storey highrises the banks have been putting up in several cities in Canada, and the competition among our bankers to see which bank can put up the highest building, one can only conclude that their employees should be given the same kind of break employees in other industries are getting. When that is suggested to the bankers the answer is no, Mr. Speaker.
One might also talk about experts at union busting and at preventing employees from voluntarily organizing themselves into associations. Here is where the banks expend great effort. They can put up 50-storey towers, but they cannot do something about the pensions of their own employees. The banks carry on these chambers of commerce contests as to which one will be the most swinging. They carry on contests as to which one will have the best television advertisements. They advertise to buy off people with their own money. They cannot lead the way as they should do. They are the most financially capable of any employer in Canada. They should lead the way in dealing with and treating their employees, but they rate among the lowest. I know of restaurant owners who pay their waiters, waitresses and dish washers better than some banks pay their junior employees.

February 27, 1978
Bank Act
I hope the government in power a year from now will bring in some real changes in the Bank Act. We will provide these institutions with another year of life under the present law, but surely the next government should bring in amendments to the Bank Act which will provide for genuine public participation and be of meaning to the people of this nation. These amendments should provide some direction in the handling of financial institutions, individual citizens, groups of citizens, regions and small businesses.
Recently I heard a colleague indicate that the New Democratic Party did not object to more competition in the banking field. If there was some real competition, I suppose I could agree. It seems to me that competition is not necessary among churches, because their parishioners believe in the same God. I wonder why competition among banks would be necessary when their god is the same-mammon. We need competition among the banks like we need a hole in the head. Banks do not compete. Their competition is so marginal and dispersed that one bank will provide a one-quarter of 1 per cent better deal on one thing while the bank across the street will give you a like deal on something else. There is no genuine competition. If there was genuine competition in the banking institutions, it would hurt the people who need to use those services. I hope this parliament and the next one will direct their minds toward some fundamental changes with respect to how our banking institutions are required to operate and in fact operate.
The left and the right wing political parties of Norway have laid down some real rules for their banks. These banks operate in the best interests of people and money comes second. Canadian banks should serve people and not money. If and when a profit is made, it should be secondary. Much more can be done in this nation. Hundreds of thousands of people who require monetary assistance could be treated much better. If that was accomplished, Canada could be more proud of its banking system. I hope all hon. members will think about what has been said with respect to the kind of financial institutions Canada requires and how they should serve people.


Robert Phillip Kaplan: Mr. Speaker, I had no intention of participating in this debate, but having listened to the hon. member for Regina-Lake Centre (Mr. Benjamin), I cannot refrain from rising in an attempt to counter some of the ridiculous accusations he has made against banking and business. It is obvious the hon. member does not believe in business; he thinks that business is one of these evil necessities we would be better without. I do not rise to defend the banks. I rise to defend something the hon. member was prepared to attack and to take away from Canadian society, that is freedom. Freedom is something which is important in Canadian society.
The hon. member argued that Canadian banks should not be free to lend their shareholders' and depositors' money where they think it is in the best interest of their institutions to do so.


Leslie Gordon Benjamin: They lend it whether the shareholders like it or not. Does the hon. member call that freedom?


Robert Phillip Kaplan: I will come to that. The hon. member's point was that the banks should not have this freedom. He was able to refer to a list of countries which, in his view, are evil countries. I do not argue with that. In fact, I agree with him. Canada is one of the freest countries in the world. In most other countries human rights are not respected, even though they should be. These countries should be condemned. We should take concerted action with other countries, as we do, in an attempt to influence those countries along the lines of greater recognition of freedom and greater rights for the individual.
How does the hon. member want to solve that problem? The hon. member wants to take away the freedom of Canadians and Canadian institutions. He indicates that those institutions should not have the right to trade with the Soviet Union, parts of Africa, Latin America and Pakistan. Perhaps a list of 80 or 90 countries where people are far less free than Canadians could be drawn up. I do not mean to belittle the hon. member's point. Many people are less free than Canadians. Many countries that are run by autocratic dictators are unworthy. The hon. member wants to take away freedom. If the New Democratic Party wants the right to lend money to Chile to be taken away from Canadian institutions-


Leslie Gordon Benjamin: I did not say that.


Robert Phillip Kaplan: That is what the hon. members said. If that right is to be taken away, what about the right of travel? Why should the hon. member be prepared to permit Canadians to travel to those same countries? If the logic of the New Democratic Party is to take away the right to lend, invest and trade, should not the right to travel be taken away? That would be logical. Travel supports these countries. If the logic is followed, what about the right of Canadians to make telephone calls to those countries? Should that right be taken away? Why should Canadians be allowed to make telephone calls to those terrible countries? I agree they are terrible countries. If the position of the New Democratic Party is to take away the freedom of Canadians to trade, invest and do business with these countries, should not the freedom to travel and make telephone calls also be taken away? What about the freedom to send letters? Why should Canadians be allowed the freedom of writing letters to those totalitarian countries? In the policies advocated by the hon. member for Regina-Lake Centre (Mr. Benjamin), the NDP wants to take this country down the very dangerous path of reducing freedom of choice.
Now, let us come back to banks.


An hon. Member:: Yes, let us do that.


Robert Phillip Kaplan: I do not doubt that shareholders turn up at meetings at these banks to advocate that the banks should stop trading or doing business with certain countries. This is a free country and they are perfectly free to go to these meetings and to take these positions. What I would argue about with the hon. member is that if the majority of them took the view that
February 27, 1978

he says some do, then they would not be lending to these countries because banks are controlled by the majority of their shareholders, not by the minority. If the majority wanted the bank to stop trading, lending or investing in a certain way, the bank would have to stop doing it. So I disagree with the hon. member in his assertion that the banks are disobeying their shareholders. If a shareholder, depositor or a lender is dissatisfied with a policy of a bank, they have an easy recourse. They can sell their shares, transfer their deposits, and they have lots of places to go in this free country. If they do not like having shares in a bank, they can make a deposit in a credit union, as the hon. member indicated, and a credit union will have the advantage of having to pay far less income taxes and corporate taxes than do banks. In this country they have the perfect right to do that.
I should like to say in conclusion that I agree with the hon. member's condemnation of many countries. I think that the Canadian government and the Canadian people should express their views and do what they can to advance human freedoms in the world. But to recommend that our policy for achieving that should be to take away the freedom of our own people in this country is something that I am astonished to hear the NDP advocate, and something that I certainly hope this House will reject wholeheartedly.


Mr. Charles-Eugene Dionne (Kamouraska):: Mr. Speaker, I am pleased to have the opportunity, when a banking problem is being discussed, to suggest ways of improving the present system. Bill C-16 explains that the passage of this legislation may be delayed and that other drawbacks could occur to delay it further. Therefore, no specific date is given. But since this matter is under discussion, I have here statements made by politicians which inspire me and lead me to discuss the difficulties resulting from our famous banking system.
I listened carefully to some of my colleagues who referred to the various problems that arise from the implementation of the regulations following from the legislation which allow the banks to control just about everything because of the power they have. But I want to point out at the very beginning that I am not referring to the staff of those banking organizations. They are very honest and dedicated people who have been selected after investigation and they are actually performing their duties. What I want to point out in particular is the power held by the banking system which needs to be straightened out.
I realize that we live in a rich country, a tremendously rich country as many of our politicians like to put it, and I realize also that a high percentage of the population lives in poverty, that we accumulate debts which we cannot repay, because I have been here for over 15 years now and I do not hear anymore our friends opposite responsible for the administration of this country say how they are going to manage to repay the debt. The only thing they can do is to try to explain how they are going to manage to pay the interest. Can you imagine
Bank Act
a man managing his industry or whatever he has in that fashion? His whole enterprise would collapse.
We live in a system in which the banking organization forces our politicians who think they are smart to manage the country day in and day out grappling with ever increasing debts. Moreover, they do not seem to understand that money should be a man-made service. According to what some of them say, one would believe that money has been created by an outer-space force. Yet, when one takes a close look at the system, one can clearly see that money is created by people. God does not send angels every six months to create money. People create money. So how come the men who are supposed to hold the sovereign power of governing the country are controlled by a small number of people who are the only creators of money? That is the inefficient banking system we have and which is in dire need of a few basic changes. Otherwise we will never be able to pull ourselves out of the economic chaos in which we are struggling now.
I know that most people wish they could find a solution to the problem of unemployment which makes hundreds and even thousands of Canadians suffer. 1 know that many sincere politicians on both sides of the House would like to find a solution to this problem. But why are they unable to find it? Why is it that their efforts to fight unemployment only make inflation grow worse? They are also fighting hard against inflation. Therefore why not take a moment to consider the source of all these problems, which is our famous monetary system.
Earlier when I arrived in the House my colleague gave me a copy of a speech delivered by a man who is not just anybody. I am talking of Father Georges-Henri Levesque, the founder of the Social Sciences Faculty of the Universite Laval, who spoke not so long ago, as he did in 1936 and 1937. Many of his writings were published in the press, but some people managed to reduce his influence and to send him away as a measure of protection for the present system. But he is back and he understands very well the nature of this system.
I should like to quote a few excerpts from this lecture; on the subject of money, he said:
That general commodity is not only economic in nature. Money is a servant with a great many capabilities. Its contribution has hardly started when it has made it possible for us to clear the land for cultivation, operate a plant, and eat our daily bread. It must also and especially help develop the higher values in this world.
Money therefore must be put to use for charity. What favour from Heaven it is to be entrusted with some of the wealth which permits us to be generous ...
... to help the poor and the needy ...
.. . and contribute to our neighbours' happiness! What a privilege it is for one to cause the succurred poor to send prayers of thanks to Heaven through this great servant which money is.
Later on, he stated:
Is money not the magic instrument capable of mobilizing all beings in creation, of representing all things while expressing their value ...

February 27, 1978
Bank Act
At this time, we know the value of money can be played with, the dollar floats and we see it lose value. It fluctuates from one day to the next in Canada and in the United States.


Joseph Adrien Henri Lambert: It will drown if it continues floating like that!


Charles-Eugène Dionne: My colleague tells me that in these days of floating about, the dollar will drown if it continues to float like that. So, to resume my quotation from Father Levesque's text:
Is money not the magic instrument capable of mobilizing all beings in creation, of representing all things while expressing their value... even where men are concerned (is it not said that so-and-so is worth a million?) In fact, money is not a means, it is the perfect means. So, the infinity of its possibilities confers upon it, falsely, the traits and prestige of a god.
Further on, it is very interesting because in that talk we Find many explanations of our famous present monetary system.
Speaking of money he says this:
That general commodity, what is it in fact, where does it come from?
Talking about money.
I remember reading an article in the August 16, 1939 edition of the Action Catholique which was entitled: A mystery to clear up. Where does money come from? This article was written by Louis-Philippe Roy who, after mentioning that we had been short of money for a long time-let us not forget that we were in 1939, at the time of the declaration of war-all of a sudden there was plenty of everything, there was a flow of money for all the needs, war needs, of course.
He concluded his article by saying:
If, according to Pius XI, economic conditions are such that the salvation work is absolutely jeopardized by the money makers, it is high time we investigated in that direction.
I return to the speech I mentioned earlier:
What is it in fact? Where does it come from? It is not a direct creation of God who does not waste his time coining money. God does not need money. He has in his hands all the magnificence of creation: all the treasures buried in the ground or scattered in the infinity of space, the beauty of spring flowers and the brilliance of fall colours . . . One may even say that with regard to His creation, God does not need anything since He is everything. We must have things because our being is finite. To have is the human condition. To Be is the attribute of God. In his celestial grammar, the Creator only conjugates with the auxiliary verb to be: "I am that I am". Hence, money is a human invention.
That is what I was saying at the beginning.
It is produced by us. And in doing so, we are wonderfully right, even in the eyes of God. For God has put the material world at our disposal, leaving it to us to develop and to increase the natural wealth that He distributed here and there. He also endowed our minds and our bodies with various talents and different aptitudes enabling us to help each other.
But in order to achieve this, we must take the required means. I was saying at the very beginning, when 1 had other quotations in hand, particularly the one referring to a former prime minister of Canada, the Right Hon. Mackenzie King.
Once a nation loses control over its currency and its credit, it does not matter much who in that nation makes laws. Once in control, money lenders will ruin any country.

This is somebody that you know well. Several of you have probably sat with him in this House. I also have here statements from American administrators, like Jefferson for instance who said and I quote:
Money, that is the mean through which modern nations will recover their dues. This institution (the Bank of the United States) is one of the deadliest enemies threatening the principles and the form of our Constitution. I believe that no government can feel safe when it is subservient to an independent authority or toward any authority other than that of the nation.
I could give you hundreds of quotations such as these, which demonstrate that the power held by the banking system must absolutely be changed. Otherwise we are directing ourselves toward . . . Well, the population is asking itself toward what. How many times has this question been asked to us during our travels in our ridings. People ask us: Where is that system leading us to? I confess that it is difficult to give an answer because we cannot foresee, at least seriously the presence of active politicians exercizing decisive powers of control and who seem likely to bring back order to that financial chaos. It must be undertood that this is a serious matter. One must first grasp the difference between what is real and what is financial. These are two different things. Yet one has to admit it.
When one speaks about wheat, butter, cheese, eggs, shoes or anything likely to help us in our daily life, we are talking about real things. But when one talks about dollars, pounds, francs, you are talking about symbols. You do not eat symbols. In our present system, symbols are nevertheless necessary to obtain food. These symbols cannot by themselves feed, clothe, house or cure individuals. They are only symbols made to evaluate things and also in our organized world to give to those who offer to trade them certain rights to things they want.
The most important of the two and this is at this stage that one must come to think about it, is obviously the real one for these are the things which are the most important. Without the real thing, the symbol would not mean anything. If there were not goods, if there were no men at work, no women at work, if it were not for the fact that the whole population of a country who wishes to produce something, what would then be the use of money? What is essential is the material good. The symbol is of secondary importance. It is therefore necessary that we adopt a policy to adjust the value of that symbol. This must be corrected to enable the goods to meet the needs that are to be fulfilled. There lies the answer. Why not look for it in that area. It is useless to discuss or replace the Minister of Finance. Even when we do have good ones, they do not change the system. They try to struggle in a defective system. Reality rather than the financial aspect is what counts. A starving man in the desert with a wad of bills in his hand will die. A loaf of bread would be more appreciated. And in a city, a man with a wad of bills does not starve because he exchanges his dollars for food. Reality depends on the productive capacity of the country: natural resources, land, climate, manpower, machinery, production procedures, division of labour, social order, etc. This productive capacity of the country, real or anticipat-
February 27, 1978

ed, is the basis of the confidence held by its residents or its new citizens. Before it was even realized, that potential capacity of our country inspired enough confidence in people from France for them to leave their country for the shores of the St. Lawrence. Today Canada's production system while it has not yet reached it's full capacity is not of concern to anyone at all-there is not a Canadian who fears that in 10 or 50 years from now his country will no longer be able to produce wheat, meat, wood and manufactured goods.
The confidence in Canada's production system is total. If the financial system were the true image of the production system it would inspire exactly as much confidence as the production system. That is not the case; if no one fears for Canada's production many Canadians fear for the financial means of obtaining the product. That is what you see; nobody can deny it. We do see constant progress made in the production system but also continuous disorders in the financial system. The signs are not at all in precise and constant relation with things. There are so many advanced machines today to make calculations of all kinds and computers costing millions of dollars that can apparently at even excessive speed put out results from a problem they are fed based on the operator's programming, and we, as politicians, as administrators, could not Find means of making adequate calculations and fairly distribute the wealth of this country based on the sign values. We would not have this difficulty of always being faced with the uncertainty of the variation of our dollar as the wealth, the real wealth, is in things and not in the bucks. No matter how many bucks you have, if the things are not there, people can starve to death. The main thing is food, clothing, conditions, everthing one can find to have these decent living conditions. And there is no lack of that in Canada! What we lack is an adjustment in figures. Did you ever see such nonsense? It is really beyond understanding. And as I was saying earlier, if it came from a divine power, we would comply with it but that is not the case. All that is controlled by men, a handful of men who control the exchange, products, at will; they supply the money needed to organize their system so as to continue to make money, to build up profits. It is written all over the place. Banking organizations, we know what they are from charter bank annual reports. That does not mean I am critical of reasonable profits, however there is no reason why the system that controls everything should also be controlling our very lives, deciding whether we are going to eat two or three meals a day through the amount of money they put into circulation, with their power to create and delete money at will. Dollars there is no dearth of in wartime, when the producing system is geared to making things that in no way correspond to the people's needs. But when the producing system is no longer capable of supplying everything required from it, dollars to cover orders disappear. This we have experienced on many occasions.
That game is anti-social and barbaric. It hurts consumers in the context of unused production. We remember periods where
Bank Act
there was talk of overproduction, while families without actually dying of hunger pretty near did, lacking the essentials in of everything across the land. We now have the same thing again. We should not be talking of Canadian prosperity but of the percentage of the people who enjoy that prosperity when thousands of people have incomes below the poverty level. The reason they do not enjoy prosperity is the lack of symbols which dollars are. That game is anti-social and barbaric, it hurts consumers and creates fictitious problems not only for the individual but for groups and even governments. The government is wrestling with its debt and is unable to repay. If we think seriously about that, there is no way this will not lead us into trouble. The government is trying to juggle with figures, it is not trying to go to the root of the problem. They would identify its cause if they tried, as it is rather easy. Today there are courses on monetary reform. I already quoted in this House the book written by a famous economist about the issuing of money. It proved that those who still believe that banks do not create money supply are wrong.
As there have been so many inquiries that proved it, we can say without exaggeration that 90 per cent of the problems are financial problems. And if we look at what happens everywhere in our families, our households, how many quarrels are caused by a lack of money? When federal and provincial ministers meet to conclude an agreement, it is always on a financial matter. Federal-provincial conferences are endless and what is the subject of discussion? Who has the right to tax? It is always on a money matter.
I remember very well that during a federal-provincial conference in 1941, a Social Credit premier of Alberta made some suggestions. They listened to him. They listened to him very quietly and the conference chairman who was the Right Hon. William Lyon Mackenzie King even thanked him. He was the last one to have the floor but it did not bother the Alberta premier who explained his views about the situation. He made practical suggestions and said: We meet here to find the means to improve the situation and conditions in Upper Canada. If we really wanted, we should try to change something in the present system. Unfortunately, they did not follow his suggestions and since then they debate the same matter from one conference to another and it is sometimes a cause of differences. Now we are talking about national unity. We try to reunite-


Joseph Adrien Henri Lambert: Some of them slam the doors!


Charles-Eugène Dionne: Indeed. All sorts of things happen but if you consider the problem, they always meet about taxation rights. Who will best be served by knowing how much money Canadian taxpayers have? If reality consists in products and if the financier simply has to make symbols, the symbol acquires importance because of the rule under which you have to present the symbol to have the product that you do not manufacture yourself. Bread feeds you, but when you do not make your own bread, you can only get some by giving
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February 27, 1978
Adjournment Debate
money. Money is important since it is a prerequisite to having bread. This is extremely important in today's world because to survive everyone needs products made by others. Therefore the dollar sign is truly a permit to live. If you have this permit, you can get what you want from the production system. If you do not have this permit, the dollar, you will get nothing and the production system will slow down instead of serving you.
Control of money and credit therefore is the same as the control of peoples' life. It is not a coincidence that one of the highest doctrinal authorities in the world said in the encyclic that manipulators of money and credit hold economic life in their hands, so much so that no one can breathe without their consent. The encyclic has been praised many times. The words of the Pope of the time have been lauded, but his advice has never been followed. We have never tried. We have never made sufficient investigations on the issuing of money and there still are problems that cannot be solved. This is unfortunate. Even though the majority of members of parliament are sincere when they say they would like to find answers, I can tell them that I am convinced that I am right and that those who will live in the years after me will find that out. If the present financial system is not modified, we will continue to be constantly in debt and we will always have the same problems. A change, a radical change is needed in that area, as well as earnest people. Yet there are people who can understand that the money system must be adjusted to the needs of man since money must be a servant not a master.


Mr. Deputy Speaker:: Order. I regret to interrupt the hon. member, but it being ten o'clock, in accordance with Standing Order 40, a motion to adjourn the House is deemed to have been moved and seconded at this time. Therefore the question is that the House do now adjourn.



PROCEEDINGS ON ADJOURNMENT MOTION

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

John Allen Fraser: Mr. Speaker, on February 9 in this House, as recorded in Hansard at page 2696, I asked the Minister of Industry, Trade and Commerce (Mr. Horner) certain questions respecting the difficulties faced by Canadian importers of footwear, especially those who are importing products that cannot be obtained in Canada. This is because either the fashion or the price cannot be obtained here and there is not much possibility that Canadian manufacturers can realistically make any attempt to supply

that market. I cited an article from the Vancouver paper the Province dated January 30, 1978 under the heading "B.C, shoe industry gets the boot". I quoted at that time some parts of the article but there are other parts I was unable to quote during the question period and which deserve to be put on the record. I quote:
Another segment of the industry hard hit will be the stores specializing in imports. As it looks now, they'll lose one-third of their business with no respite.
"They'll have to ask Ottawa whether the government thinks they should be allowed to exist," said veteran Vancouver shoe retailer Ernie Freedman. Meanwhile, he, like all retailers, must juggle with the confusion created by the fact orders for spring merchandise, placed last fall before quotas were imposed, may have eaten up the quota of the entire year.
Now, faced with buying for fall, the stores find their imports limited and availability of domestic supplies uncertain.
The fact of the matter is that the majority of people in the retail shoe business are not objecting to some import quotas if the result of those quotas is to protect Canadian industry. The growing suspicion is that the quotas are affecting those products which the Canadian manufacturers cannot supply. The result of this is higher prices. The allegation is that the Canadian manufacturers are increasing their prices on general footwear.
On February 23 I asked the Minister of Industry, Trade and Commerce a question on a related subject, that of textiles. I asked the minister if he could tell this House whether there was a market building up for the sale and purchase of quotas in textiles. Today I asked the Prime Minister (Mr. Trudeau) the same question, and I also extended it to the problem of shoe quotas. I ask the question over and over again because I am receiving representations that this is exactly what is going on. Since the small operator cannot obtain the quotas he or she need, it is seems to me a travesty that other quotas which obviously are in excess of what is needed are being sold for profit within the domestic Canadian market. I refer specifically to an advertisement which appeared in the Vancouver Sun on February 4, 1978 for jeans. It says:
Jean or Pant Quota
Willing to purchase available quotas for spring and fall 1978.
Any quantity up to 100,000 pairs. Apply in confidence to-
Then it gives a box number. It is time that the government came clean with the House of Commons and with importers as to its motives, especially with respect to textiles or footwear which cannot be obtained in Canada and which the Canadian manufacturer cannot produce.
I have received innumerable complaints. I have received pleas from importers who, without some redress, are going to go broke. I have consistently received complaints that the machinery set up by the government is not competent to deal with the applications and is being handled in such a way that it is not attuned to market problems, especially in British Columbia.
February 27, 1978

I see my time is up and I will conclude on that note.


Mr. Maurice Harquail (Parliamentary Secretary to Minister of State for Urban Affairs):: Mr. Speaker, the hon. member for Vancouver South (Mr. Fraser) has been very busy. He has two questions tonight, one dealing with imported shoes and the other with import quotas.
Let me deal with imported shoes first. In response to this allegation I wish to state that the figure of 11 million pairs is inaccurate. The correct figure is 7.5 million pairs. In 1976 imports amounted to 40 million pairs of leather and vinyl footwear, an increase of 46 per cent over 1975. Government action has limited such imports to 32.5 million pairs, a cutback of 7.5 million pairs or a reduction of less than 19 per cent. While 1977 data are not available, it appears that imports will reach the 1976 level. This cutback of 7.5 million pairs represents 16 per cent of the 1976 Canadian production of 45.8 million pairs. Therefore, the replacement of 7.5 million pairs of imports would require not the alleged 50 per cent increase in domestic output but 16 per cent, which I am confident the Canadian industry is capable of producing.
To turn now to the textile question, under the Export and Import Permits Act, transfer of an import permit is prohibited as well as the transfer of quota allocated as a condition to the issuance of such a permit. In several instances the Department of Industry, Trade and Commerce has been asked to authorize the transfer of quota from one company to another as a result of the business changing hands or of a change in the structure of a particular business. All such requests for transfer of quota have been refused by officials in the department.
The department has also been apprised of several instances where possibilities of buying or selling import quotas were offered in newspapers. All cases brought to the attention of the departmental officials have been investigated. To date the results of two of these investigations have been received. It has been established that certain people were using the words "Quota for sale" or "Quota wanted" when they were in fact referring to goods already imported under the authority of an import permit issued under the Export and Import Permits Act after a valid quota had been obtained. The reason for using the word "quota" is simply that those goods had been imported as a result of allocation of quota. So far, none of the investigations have established that quota were in fact being bought and sold in Canada.
Perhaps I could make one last point with respect to imported shoes. Imports of 32.5 million pairs of leather and vinyl footwear permitted by the cabinet decision are considerably higher than imports in any year except 1976 and 1977. If to this we add approximately 15 million pairs of rubber, canvas and other types of footwear exempted from the quota, plus the capabilities of the Canadian footwear manufacturing industry, I am confident that retailers and consumers will have a very wide selection in terms of price, fashion, quality and function.
Adjournment Debate


TOURISM-PROBLEMS IDENTIFIED AT INDUSTRY CONFERENCE-GOVERNMENT ACTION TO SOLVE
A. Daniel McKenzie: Mr. Speaker, Canada registered a record fourth quarter tourism deficit of $340 million compared with a shortfall a year earlier of $293 million, Statistics Canada has reported. The tourism deficit for 1977 was also a record, totalling $1.66 billion compared with a 1976 gap of $1.19 billion.
Canadian visits to the United States are on the increase. Statistics Canada has reported that Canadians made 37.9 million visits to the U.S. during 1977, an increase of 5.5 per cent over the total for 1976. The number of trips to Canada by U.S. residents fell by 1.4 per cent from the 1976 total to 31.8 million in 1977. Similarly, the number of trips to Canada by foreign visitors from all other countries, at 1.4 million, was down 9.7 per cent from 1976. From these figures hon. members can see the dangerous trend which is developing in Canada with regard to tourism.
The statement made by the Minister of Industry, Trade an Commerce (Mr. Horner) with respect to alleviating the current $2 billion tourism deficit amounts only to window dressing. Tonight I am calling for the implementation of the following measures immediately.
I propose a reduction in sales taxes on promotional literature to the United States, and income tax reduction for Canadians who travel within Canada, reduced federal sales taxes, and, most important, that federal and provincial governments agree on a promotional package instead of each presenting a different picture of Canada as is the current concept. This does not mean that the provinces should abandon the practice of advertising individually but rather should adopt a more national promotional picture.
The federal government is spending $ 1.5 million to promote Canadian vacation packages at rock bottom prices. This great promotion is to start next month. However, many are not new, and many do not offer particularly low prices. An Ottawa travel agent says it is a lot of window dressing for a project which is basically unchanged. Also, much of what they are offering travel agents sold independently last summer. The packaging makes it easier to sell the product, an agent said, but that is all that is different. The price is not really different. The massive promotional approach to Canadian tourism is. One can see this is a lot of window dressing and not concrete proposals.
The Canadian tourism industry and the Canadian government office of tourism held a conference recently. The highlight was 13 problem areas facing the tourism industry in Canada. Referring to marketing, they stated, I quote:
Canada's visibility in the U.S. market was about 75 per cent this year because of frozen marketing budgets. Canada's visibility will be reduced to 60 per cent next year if CGOT marketing budgets do not increase ... It was suggested that more work should be done in the "V.F.R." (visiting friends and relatives) category. It is not known what motivates these people to come nor has it been fully determined exactly how many dollars were spent in areas other than accommodation.
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February 27, 1978
Adjournment Debate
There was a new report entitled "International Tourism Development Forecasts to 1985" produced by the Economist Intelligence Unit Limited in London, England. It shed some new light in this area. They stated:
The image of Canada in the U.S. is that Canadians are anti-American. Another problem in Canada is poor attitude of people who service the general public.
The document further states:
Lengthy discussions centered around the unfavourable image of Canada as a friendly tourist destination. This image problem is seen on two levels: first, some Americans view Canada (the government not the people) as being anti-American due to certain of its policies; second, some tourists feel friendly toward Canada as a country and even toward individual Canadians; however, having experienced unpleasant situations in previous travels, they have spread the word that Canada is not a friendly vacation spot.
Not only is this government driving out investment but it is scaring off tourists. No wonder we are heading for a $2 billion deficit. A recent editorial pointed out that the tourist program is mainly fanfare. I quote from that article:
With considerable fanfare, federal Industry Minister Jack Horner and his provincial counterparts have unveiled a national plan to promote tourism in Canada. Some specific deals are included for the benefit of consumers, but the main emphasis seems to be upon another massive publicity campaign by the government on behalf of domestic tourism.
Massive publicity campaigns alone are not the answer. The document prepared by the tourism industry and the government department also points out that transportation constraints are one of the main problems in Canada. It points out, and I quote:
There was great concern regarding travel costs caused by restrictive regulations governing various forms of transportation. The airline representatives strongly opposed the M.O.T. policy of "user pays"; the high cost of renting counter space at airport terminals is a contributor to higher costs, ultimately passed on to the air traveller. Fuel costs and labour costs were also cited as significant contributors to the high fares that must be set.
They claim that most of the tourists arriving in Canada from the United States on packaged tours come by motor coach. Regulations covering the use of coaches in Canada are deterring tour operators from sending their clientele to Canada. What is the government going to do about these transportation policies?


Maurice James Harquail: Mr. Speaker, 1 suppose if there were an award or trophy for someone who is the champion at spreading negative trends of gloom and doom, the hon. member for Winnipeg South Centre (Mr. McKenzie) would probably be right up there as a contender for that award.
Let me state the government's position. The Minister of Industry, Trade and Commerce (Mr. Horner) and the government have been concerned for some time with certain negative trends in Canada's tourism industry. Tourism is very important to Canada, as attested by the $9.2 billion in tourism related receipts in 1976, about 5 per cent of our gross national product, by the $7.3 billion expenditure of Canadians travelling in Canada and the $1.93 billion expenditure by visitors from the United States and other countries abroad. Over
800,000	jobs are involved, directly and indirectly, widely dispersed across Canada.
The problem is reflected by recent changes in the international balance of payments on travel account. Over the last three years alone, 1973 through 1976, the negative balance on travel account has quadrupled, reaching $1.2 billion, and is now responsible for 20.5 per cent of the shortfall of $5.8 billion for all service transactions. In 1977 so far the negative trend continues.
The factors largely contributing to the increasing negative tourism balance are, first, a decline in the numbers of United States visitors, about 6 per cent in 1976 and somewhat less in 1977; and, second, big increases in Canadians travelling outside of Canada, up from 8 per cent to 10 per cent in 1976.
Because tourism is such big business for Canada and so important to the thousands of businesses across Canada servicing it, the minister, and before him the Minister of Finance (Mr. Chretien), have been looking into the causes of these trends and seeking ways of reversing them.
Some of the actions taken are these. Over a year ago, in co-operation with the Travel Industry Association of Canada, the Canadian government office of tourism convened a workshop on "price competitiveness" problems. The CGOT has been working even more intensively in co-operative travel promotion with provinces and the industry. The minister discussed these problems with provincial ministers responsible for tourism in November, 1976, and September just past, in Yellowknife. In March this past year the Minister of Finance called together some 13 leaders of the industry to discuss the situation, and since has been gratified to receive from them very detailed recommendations which provide very helpful information which is being considered. Also, the minister has taken account of resolutions passed by TIAC at their annual conference in Edmonton last May.
The minister has directed that the most intense co-operative effort be carried on with the provinces and industry to find answers to these problems. One result expected is that, overall, 1978 Canadian tourism promotion programs will have much increased impact. As well, several special study projects are in process, the results of which the minister expects to be considering over the next two months and should lead to further actions to support this important industry.


A. Daniel McKenzie: Too little, too late.


HOUSING-RRAP-CHANGES IN REGULATIONS UNDER PROGRAM
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, on January 27 I asked the Minister of State for Urban Affairs (Mr. Ouellet) some questions on the changing regulations for the residential rehabilitation assistance program for 1978. I was especially concerned about rumours that repairs to basements of old houses of low-income people were not going to be included in the residential rehabilitation assistance program of the federal government in 1978. The minister

February 27, 1978

in answering me said that the issue is under study, but that "this point should remain included". I took it for granted that he was talking about the question of basements and house siding in the federal rehabilitation program.
Through correspondence with the minister and his predecessor I had suggested that a ten-year program of rehabilitation of miners' homes be carried out in the whole of the mining areas of Cape Breton which are now occupied by pensioned senior citizens, widows and others on low income. I pointed out that a great deal of this housing, formerly built by the private companies who controlled the coal fields in Cape Breton, was 70 or 80 years old. The miners in the past and the present occupants have done their best to keep these homes as neat and tidy as possible inside, but because of the age of these homes the sills, poor roofs and lack of foundations are beginning to take a toll.
With the introduction of the residential rehabilitation assistance program a few years ago some desperately needed help was given. The trouble is that the national legislation provided that the municipalities in urban areas had to set up neighbourhood improvement projects before RRAP money would be expended by the federal government. I suggest that in the case of mining towns such as those in Cape Breton this was putting the cart before the horse, that really what was needed was a more substantial ongoing housing repair program to be followed later on by neighbourhood improvements such as recreational fields and other amenities. In most of the mining areas sewer and water were already normal services for years.
Glace Bay is a town with a population of approximately
23,000	people. Last year it received RRAP funding of $453,000. The number of applicants looking for housing repairs was 755 without any advertising of this program. It must be kept in mind that this is just in the NIP areas which were designated by the town council and co-ordinator. The number of applicants approved was 99. The average loan was $4,564 with $3,500 forgiveable. The average income of successful applicants was $4,000.
New Waterford is a town in my constituency of approximately 10,000 people. It received an allocation of $437,000, again without advertising. There were 631 applicants. Of these applicants, 70 were approved. Their average income was $5,320.
Aside from the criticism noted above, my major criticism of this program was that at this rate of repairing the homes we were going to run into a situation where many of them could never be rehabilitated because the structures would be so far gone with respect to deterioration. The result would be a clamour for more public housing. The government of Nova Scotia had already placed a moratorium on family public housing in the province.
I attempted to get the Cape Breton Development Corporation and the Central Mortgage and Housing Corporation involved in setting up a special rehabilitation agency so as to get more homes in these areas repaired more quickly, efficient-
Adjournment Debate
ly and effectively. I estimated that it would cost from approximately $7,500 to $8,000 to do the job on one side of the duplexes, which are the typical type of housing we are talking about. In his answer to me, the minister indicated that another federal government program called the emergency repair program might be more applicable to our part of the country. He noted that the federal government had just given a special grant of $100,000 to the citizens service league of Glace Bay for emergency repairs. Also he indicated that more would follow.
I was happy about this, but I was not satisfied that the minister had grasped the difference between emergency repair programs, which had been used by the province of Nova Scotia within the last year, and full rehabilitation of these old homes, which would be a long term investment by governments to make these homes livable well into the future. I was attempting to press the point that we really needed a small or medium sized rehabilitation industry or agency to go beyond the work of the emergency repair programs, as well as to offset the slowness and other disadvantages in the NIP-RRAP programs as applied in present and former mining areas of Cape Breton.
Lask week I was notified by CMHC to attend a meeting at the Holiday Inn in Sydney. It began at ten o'clock on February 21 and lasted until 5.30 p.m. It continued the next day from nine to twelve o'clock. The main speaker at that meeting was a Mrs. Pat Gish, the director of the Eastern Kentucky Housing Development Corporation of Kentucky, U.S.A. During that day and a half, delegates went into the mining areas and saw the situation at first hand for themselves. Present at the meeting were five representatives of CMHC, two representatives of the Nova Scotia Housing Commission, one representative of the Cape Breton Development Corporation, myself, and a few other invited people from the area who were working in the housing field.
The conclusion of the meeting was that there was a general need for a special rehabilitation industry or agency to do the required job. CMHC and the Cape Breton Development Corporation could well have a special role in setting up the agency so as to ensure the cash flow status of small contractors in the area. Also they could play a part in setting up additional administrative training programs, possibly in conjunction with Canada Manpower and industrial training programs. The objective was to set up a housing rehabilitation industry with a view to fixing up most of these homes in a substantial way over a 10 or 12 year period, thus providing a small but important industry in an area of high unemployment.
CMHC delegates said they would be meeting internally on the matter and would be getting together with Devco with a view to trying to bring this new agency into reality. The two representatives of the Nova Scotia Housing Commission said that the commission was prepared to do anything it could to help expedite the setting up of such a program. I expect that such a housing rehabilitation industry will become a reality in Cape Breton this year.

February 27, 1978
Adjournment Debate


Maurice James Harquail: Mr. Speaker, I am sure that the hon. member for Cape Breton-East Richmond (Mr. Hogan), because of his interest in the subject and his experience in that area, would want to point out publicly the most positive thrust that has been made evident, especially in the Cape Breton area, in terms of assistance in housing programs. I would enjoin the hon. member to give credit where credit is due in terms of the amount of money and effort expended in that area by the federal government.
I have been advised by officials of CMHC that, under the residential rehabilitation assistance program, repairs to the basic components, basements and house sidings are not excluded. The changed regulations to which the hon. member refers are the standards for the rehabilitation of residential buildings. These standards were modified in 1977 and, following consultation with numerous municipalities across Canada, became effective after January 1, 1978.
These two repair items remain within these standards. Specifically, a section concerning structural repairs entitled "Foundations" reads as follows:
Foundations shall be restored to ensure that they reasonably support the loads imposed.
I emphasize "shall" because not only is this item included, but any repairs to foundations which may be required are mandatory. The following standard, however, has made extensive upgrading ineligible:
A mud sill foundation may be replaced by a pier or perimeter type foundation. No further upgrading of the foundation is eligible, for example-changing a crawl space foundation to a conventional full basement.
The rationale for this restriction, which is one of the most significant changes from the previous standards, is that urban RRAP is a rehabilitation program, not a modernization program. Where a basement did not exist previously, one cannot be provided under this program.
With respect to house siding, I wish to quote as follows from a section in the standards concerning exterior walls and roofs:
All exterior walls and roofs shall have an acceptable cladding or covering to prevent the entry of moisture into the structure and provide reasonable durability. Exterior cladding shall not be replaced except where restoration or repair is not justifiable in terms of cost. All exterior material subject to deterioration in its unprotected state should be painted or otherwise suitably treated.
Again, emphasis is placed on the mandatory nature of repairs which may be required to the house siding. The guideline within the standard, however, warns against the replacement of siding solely for aesthetic reasons or for ease of maintenance.
I wish to repeat what the minister said at that time, namely that we have to ensure that the money involved in this program is used in the best possible way to improve the living conditions of low income people, which is why the two points mentioned by the hon. member concerning basements and house siding are not only applicable but emphasized when rehabilitating housing.
With reference to the emergency repair program, I have been advised by Central Mortgage and Housing Corporation that a grant was provided to the citizens services league of Glace Bay in the amount of $148,213 covering the period July 5, 1977 to December 31, 1978. The grant was increased from $48,213 to $148,213, but it should be noted that the period covered is 18 months rather than the usual six months.
If further funds are required by the CSL, a special submission will have to be prepared and forwarded for consideration. It should be pointed out, however, that the emergency repair program RNH budget for 1978 is currently fully allocated to other applicants.
With the introduction of residential rehabilitation in rural areas in 1974, the emergency repair program is gradually being phased out. The total budget was $3 million in 1975, $2 million in each of 1977 and 1978, and it is anticipated that it will be $1 million in 1979.


Mr. Deputy Speaker:: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10:30 p.m.

Tuesday, February 28, 1978