1978-05-04

ROUTINE PROCEEDINGS


Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The Canadian Broadcasting Corporation will be closing down the Churchill radio station in June. The reason given for closing this station is that it is too costly to operate. For the last three weeks we have seen as many as five large CBC trucks and vans parked on Parliament Hill. It would appear that this is surplus equipment and it has cost thousands of dollars to let it lie idle on Parliament Hill. Therefore, I move, seconded by the hon. member for Lisgar (Mr. Murta):
That the CBC sell off this surplus equipment in order that they can afford to keep the radio station in Churchill.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CANADIAN ECONOMY
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the statement by the Minister of Industry, Trade and Commerce (Mr. Horner) while at Stoney Creek last night that the press are making more depressing our economic problems when in discussing our disastrous economic figures they compare Canada to other nations with better economic records, such as the United States, West Germany, Japan, France and others, instead of to Argentina where inflation is 150 per cent and strikers are put up against walls, a situation that the minister thinks "very
probably would not be palatable to Canadians", and in view of the fact that if the government had said to Argentina "no Candu", it would have saved Canadian taxpayers some $130 million so that even admirers of Luis Firpo, the wild bull of the Pampas, the model for the minister, can restrain their need to be reminded of how Argentina put it over the Canadian government, I move, seconded by the hon. member for Halton-Wentworth (Mr. Kempling):
That this House understands and sympathizes with the statement of the Prime Minister of April 12, 1978, that "it is surprising to see the hon. member paying so much attention to the statements of the hon. member for Crowfoot", and that this House continue the mind of the minister in an "at rest" position by assuring the minister that inflation at 150 per cent and the putting of strikers up against walls is a situation which would not be palatable to Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
Mr. Lome Nystrom (Yorkton-Melville):: I have an equally sensible motion, Mr. Speaker. The Saskatchewan Indian Community College at Saskatoon has a projected financial need in 1978-79 of $3.3 million. They recently received word from the Department of Indian Affairs and Northern Development that they will be receiving only $439,000, and the college may have to close. I move, seconded by the hon. member for Nickel Belt (Mr. Rodriguez):
That this House instruct the Department of Indian Affairs and Northern Development to immediately provide the Saskatchewan Indian Community College with the necessary $3.3 million to keep the college open for the Indian people of our province.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
5138

May 4, 1978
S.O.	43 FINANCE


SALES TAX AND DUTY ON IMPORTED GRAIN PROTEIN TESTING MACHINES-MOTION UNDER S.O. 43
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that with the introduction of protein grading, a large number of testers will be required by the various grain companies, in view of the fact that these testers are not manufactured in Canada and must be imported from the United States, and in view of the fact that the cost of these testers will ultimately be borne by the grain producer, I move, seconded by the hon. member for Wetaskiwin (Mr. Schellenberger):
That the government take immediate steps to waive the sales tax and duty on all protein testing machines imported into Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I rise under the same Standing Order on a matter of urgent and pressing necessity. In view of the fact that the Department of Indian Affairs and Northern Development has drastically cut back the budgets for Indian bands in the Sudbury district, and in view of the fact that such cutbacks are having particularly harsh results in the area of post-secondary education where the present budget only covers people presently in post-secondary institutions but makes no provision for students attending for the first time this fall, I move, seconded by the hon. member for Yorkton-Melville (Mr. Nystrom):
That this House instruct the minister to immediately review these cutbacks in budgets for Indian bands in the Sudbury basin and in particular instructs the minister to restore the original budget for post-secondary education for Indian bands in that area.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PROPOSED REDUCTION IN COST OF COPPER CONCENTRATE SHIPPED FROM B.C. TO QUEBEC-MOTION UNDER S.O. 43
Mr. Ren6 Matte (Champlain):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to move a motion dealing with an important matter of pressing necessity.
Considering the concern which the government should show in promoting industrial and economic development in all Canadian regions; considering that it costs between $5 and $16 more per ton to import copper concentrate from British Columbia to Noranda than it costs to export that same concentrate from British Columbia to Japan; considering that the company in Noranda would need 100,000 additional tons of concentrate in 1978 and that stock is available in British Columbia, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That, given the present circumstances, the federal government negotiate a reduction of $10 per ton for the importation of up to 100,000 tons per year of copper concentrate from British Columbia to Quebec and that the federal government set a two-year freeze on cost increases to ship iron ore on the St. Lawrence Seaway to assess the economic impact of such decision.


Mr. Speaker:: Order. Presentation of such a motion for debate under the provisions of Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CANADIAN ECONOMY
Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, I would like to move a motion under Standing Order 43 regarding an urgent matter. The government has borrowed or has on standby credit over $7 billion at present, costing the Canadian taxpayer over $700,000 in daily interest charges. Since never before in the history of the international financial world has there been a situation in which a country has had a floating dollar as its policy, and at the same time has undertaken massive borrowings to prop up its currency, I move, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That this House imposes the following cease and desist order:
(1)	Stop the policy of burdening the Canadian taxpayer with massive interest
costs;
(2)	Stimulate production and employment in Canada, and
(3)	Allow the Canadian dollar to find its own level in the international money
market.

May 4, 1978


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


APPOINTMENT OF MAJOR GENERAL GASTON CLOUTIER AS SERGEANT-AT-ARMS
Mr. Speaker:: Before beginning the question period, I know that all hon. members would want to join me in calling attention to an appointment that has been made by the governor in council and the fact that the new appointee has assumed for the first time what we hope will be an equally distinguished career for the House of Commons as has been his career as a Canadian, and particularly in the Canadian military. I refer to the new Sergeant-at-Arms, Major General Gaston Cloutier.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Oral questions.



ORAL QUESTION PERIOD


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in the absence of the Minister of Finance, perhaps-


Some hon. Members:: Here he comes.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, obviously the government ranks applaud the minister's courage for showing up in parliament today.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: My question centres on the $3 billion line of credit that the minister announced in Toronto yesterday evening. Does he feel that the credit he arranged yesterday, on top of the $2.5 billion line of credit he had already arranged for the chartered banks, the $750 million he borrowed earlier in New York and the $1.5 billion Deutschmarks he borrowed in Germany, would have been necessary if he had moved a little faster last October when the dollar crisis first occurred?
Oral Questions


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I think the easiest thing I can do in life is face the hon. member. We have followed this policy since the fall and have moved cautiously. I am glad to see that the hon. member now recognizes that, despite what he says, Canada's credit is very good and I have absolutely no problem in finding credit anywhere.


Sinclair McKnight Stevens: My supplementary question is for the Minister of Finance, who referred to Canada's credit. Can the minister say whether he will be making a statement on motions, or at least in committee, concerning the over-all borrowing activities and credit arrangements of the government so far as its foreign borrowings are concerned, bearing in mind that the credit he has arranged in New York is costing, for the origination fee, $1.8 million, including legal fees, printing and travel, as they say, and will also cost Canada $7.5 million in standby fees for the year, whether or not it is used? Will he give a full explanation to the House as to what exactly are the ramifications of all the government's credits and borrowings?


Joseph Jacques Jean Chrétien: Mr. Speaker, I shall attend the committee sitting this afternoon and gladly answer all questions concerning the arrangements I made yesterday with the Canadian banks as well as with the American banks. Naturally, I am not in a position just yet to reveal all the terms and conditions because they have not been completely negotiated and signed, but as soon as the legal document has been accepted by all parties, I shall give the information to the House.


Sinclair McKnight Stevens: My supplementary question is again directed to the Minister of Finance. Is he aware that the credit which he announced last night has been offered to certain South African banks? If he is, does this mean there has been a change of policy with respect to our commercial dealings with that country, the policy announced by the Secretary of State for External Affairs last December 19?


Joseph Jacques Jean Chrétien: Mr. Speaker, I think it is absurd and incredible that the hon. member would bring up that subject. 1 have never heard of dealings with South Africa or dealings with a series of banks in the United States. I have never been forced to confuse the two. I do not know how the hon. member can do that.


Sinclair McKnight Stevens: They have telexes.


STATEMENT OF MINISTER OF INDUSTRY, TRADE AND COMMERCE
John Carnell Crosbie: Mr. Speaker, I have a question for the Prime Minister in connection with our economic and financial situation. Last night the Minister of Industry, Trade and Commerce suggested that the press and reporters generally are doing Canada a disservice by compar-
80038-35%

May 4, 1978
Oral Questions
ing our economic and financial situation with that in countries which are better off than we are, and suggested we should only compare them with countries which are worse off economically, such as Argentina where there is high inflation and strikers are put up against the wall.
Is the government considering the introduction of sunshine legislation which will permit the press to make comparisons only between Canada and countries which are less well off, if we can find such countries? Is that being contemplated by the government?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the sunshine legislation which would interest the Canadian public is that which would retire the hon. member, and I hope it happens soon.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, the Prime Minister has had many opportunities to call the election, but he is afraid to do it.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: My supplementary question to the Prime Minister is the following: does the Prime Minister accept any responsibility for our current economic situation, or is it all the fault of the Canadian press, as the Minister of Industry, Trade and Commerce suggests, or of the Canadian people because, as the Prime Minister suggests, Canadians are too soft, the Minister of State for Fitness and Amateur Sport says we are too fat-the fat times are over-the Minister of Finance says-


Mr. Speaker:: Order, please. The hon. member may recognize a trace of argument in his question.


John Carnell Crosbie: My question to the Prime Minister is this: Does the Prime Minister accept any responsibility for our current economic position?


Pierre Elliott Trudeau: We are the government, Mr. Speaker.


Some hon. Members:: Oh, oh!


An hon. Member:: You could have fooled me.


INTEREST PAID ON FOREIGN BORROWINGS
Max Saltsman: Mr. Speaker, my question is directed to the Minister of Finance: it concerns his announcement last night to borrow up to another $3 billion in foreign money markets. Can the minister confirm that the total of over $7 billion in borrowings and standby credit is costing the Canadian taxpayer over $750,000 a day in interest charges alone? If so, how can he justify this tremendous burden on the Canadian people?


Joseph Jacques Jean Chrétien: Mr. Speaker, I can give quite a lengthy reply. It is quite complicated. If we borrow abroad, we do not borrow the equivalent amount of money in Canada. If we keep the money we borrow in the reserves, we place that money in treasury bills in the United States, and so on, and receive some interest on that money. It is a very complex proposition. I will be delighted if these questions are asked in the committee this afternoon. I will be there with my experts, when I can give an exact answer; but I cannot do that in the question period.


Max Saltsman: Mr. Speaker, the minister has stated that it is the Canadian government's policy to have a floating dollar on the exchange markets of the world. Can he explain to the House why the government has felt it necessary to borrow, over the past two or three months, over $7 billion to prop up the Canadian dollar, which is a blatant contradiction of having a policy of a floating dollar?
Since this has never taken place anywhere in the world before, where a country has had to undertake massive borrowings to prop up a so-called floating dollar, can the minister explain the government's position to this House and to the Canadian people and not put if off by saying he will do that before the committee?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have not borrowed $7 billion as the hon. member has stated. We have established a line of credit which we can use if needed. However, we have not borrowed that amount of money. We borrowed $750 million in the United States and $823 million in Germany. We have withdrawn $1.3 billion in standby credit from Canadian banks; we have not used the American facilities. We have sufficient flexibility so that if some people try to push the Canadian dollar up or down in an unreasonable fashion, the governor can intervene to ensure that the dollar floats in a normal fashion, as has been our policy for many years.


Max Saltsman: In view of his reply, can the minister explain to the House why this latest borrowing of up to $3 billion in standby credit is required, particularly since the credit facility is designed for an eight-year period? Is the minister expecting that the Canadian dollar will be in continuing difficulty for the next eight years and therefore feels it necessary to undertake these massive foreign borrowings? Also, is the pattern of this borrowing not in fact the very thing that invites speculation against the Canadian dollar?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not think that at all. We have established a line of credit that we can stop any day we feel it is necessary. However, we had to establish it for a period of years. That is why we have the period of eight years. If there is stabilization in the money market, we can cancel that on any day.
May 4, 1978


MANPOWER
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. I shall not speak of immigration but of employment today.
Under the Young Canada Works program, the projects that were accepted for subsidizing have been by far fewer than the applications made by sponsors of various projects. Still, I want to thank the minister for the funds granted my riding and other ridings in the province of Quebec. I should like to put the following question: We are now in the process of discussing various projects with their sponsors who are getting ready to apply for grants under Phase III of the Canada Works program. Can the minister tell the House whether we should encourage people in the same way to submit their projects under this program, seeing we have no idea of what funds have been earmarked for the program? Should we, yes or no, encourage people to plan projects and can the minister tell the House whether the amount of funds to be allotted to this project has yet been decided and whether it will be more generous than the funds allotted to the Young Canada Works program?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, the global funding has in fact been announced. It is a question of determining the amount that will go to each individual constituency. We hope within the next couple of weeks to be in a position to announce the funding available on a constituency by constituency basis. I hope the hon. member will again encourage people to participate in the Canada Works and Young Canada Works programs because they have been excellent programs. We need about a three or four to one ratio to get excellent projects, which we have had in the past from the hon. member's constituency and from others.
[ Translation]


REQUEST FOR ADDITIONAL FUNDS TO CREATE EMPLOYMENT
Joseph Adrien Henri Lambert: Mr. Speaker, I would like to ask a supplementary question.
Considering that the present situation is very serious and even very grave; that the private sector is not in a position to offer enough jobs to satisfy current needs; that Canada Manpower Centres respond in a very strange way to those seeking help to find employment, and that jobs are very scarce, would the minister be willing, in view of these special and grave circumstances, to ask the President of the Treasury Board for additional funds so that we might make better and more efficient use of Canadian manpower and thus ensure normal
Oral Questions
development in our country by using our qualified manpower until the private sector is in a position to do more?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I have reiterated time and time again that something like $1.2 billion has been made available by the federal government for direct job creation and training, and all these enterprises have been most satisfactory. Still on the subject of funding, we have spent about $96.2 million on programs to assist young people and students to find employment-the highest amount ever contributed by any government in this field.
Manpower centres have been giving good advice in the placing of individuals. Last year we placed something like 250,000 young people in employment during the summer months. So we must be doing something right. We hope to do even better this year. We should remember, too, that 300,000 more people are working this year than were working last year.


NATIONAL DEFENCE
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of National Defence. When I asked the minister on April 18 whether he agreed that any commitment of Canadian troops to a UN peacekeeping force ought to be conditional on the prospect of a political settlement or, at least, a reasonable expectation of one, he replied that the parties in the Lebanon area were, and I quote, "moving toward such an agreement and understanding". Unfortunately for his forecasting, the very next day the government of Lebanon fell and their prime minister resigned. Will the minister now tell us categorically what evidence he has that any of the parties in South Lebanon are moving toward agreement and understanding?


Hon. Barney Danson (Minister of National Defence):: We
were hoping for greater control in that area, as I indicated in reply to the hon. member's question. Obviously, there is need for greater control. The Secretary General has asked for more troops in the area, and we are still working toward stability.


Allan Bruce McKinnon: I would like the minister to confirm, as the man primarily responsible for sending our troops to Southern Lebanon, whether it is true that UN forces are presently engaged in hostilities with one of several organizations in the area, none of which seems to have the slightest intention of negotiating a settlement, though that is one of the main criteria to be met before Canadian troops become involved.
Will the minister press for a revised, tightened-up UN resolution which would be based on criteria set out by the hon. member for Eglinton on the basis of our long experience in peacekeeping?

May 4, 1978
Oral Questions


Barnett Jerome Danson: There has been an incident involving one of the dissident groups, as is obvious. Certainly, I will take up the hon. member's suggestion with the Secretary of State for External Affairs.


EXTERNAL AFFAIRS
Mr. Douglas Roche (Edmonton-Strathcona):: A supplementary to the Secretary of State for External Affairs. When the hon. gentleman appeared before the Standing Committee on External Affairs on April 4, he acknowledged that resolution 425 which sets out the peacekeeping procedure was too loose and needed to be improved.
I ask him now if Canada has pressed for a tightening of that resolution, and what steps did Canada take yesterday when this question was discussed before the Security Council which gave rise to the increase of troops from 4,000 to 6,000?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, I have not actually seen the text of our intervention yesterday, but I can deduce from conversations I have had with officials and with our delegation in New York that we did in fact, I have no doubt, consider either in public or in private sessions tightening up the resolution.
I think the dilemma really stems from the fact that we would like to see a tightening up in a particular way. There are other participants who would also like to see a tightening up but one which is not consistent with our objectives. In other words, as I said before the committee, I believe the task before the Security Council was to find the broadest possible mandate which will encompass all the various points of view.
We will continue to press for a stronger mandate, and we will also continue to press for the total withdrawal of Israeli forces from Lebanon. I have said previously, and I repeat it, that I believe this is a precondition for stabilization in the area. But, of course, as the Israelis themselves have said, until such time as the United Nations forces are in place their withdrawal is to some degree conditional. That is why the Secretary General has asked for additional support, and I was pleased to hear this morning that a number of countries have responded to the Secretary General and that additional forces will be put into place. My reason for saying this is that once a greater degree of stability has been achieved, then I believe the second step of getting a stronger mandate will come more easily.


Douglas Roche: Mr. Speaker, I think the question the Canadian public wants to have answered is whether there will be any commitment made by the government of more Canadian troops going to this embattled area before the resolution is amended in such a way as to guarantee that the eight criteria set out by the Canadian government some years ago can, in

fact, be adhered to, which will ensure the safety of Canadian soldiers on a peace-keeping mission.


Donald Campbell Jamieson: Mr. Speaker, without being in the least argumentative about this, I think the fundamental question to be recalled here is whether we will refuse to participate in any peacekeeping activities unless the so-called eight criteria have been met. These were laid down a number of years ago. They are entirely defensible. But I draw the attention of the hon. member and of the House to the fact that to the best of my knowledge that is an ideal situation which has not been achieved in any peacekeeping activity which has been undertaken. So it really becomes a question of deciding whether, if conditions are not perfect, we will participate at all.
On the more specific part of the question, we have, as the hon. member knows, limited participation in the communications role associated with the group and we have no intentions either to go beyond our particular role or to extend it beyond the six months to which we were committed by the Secretary General. May I conclude by saying that it is an immensely difficult task for the Secretary General and we cannot always meet all the conditions of all sides before moving, so it does come back to a question of whether we want to help under the best conditions we can establish, or simply wash our hands of the whole matter.


UNEMPLOYMENT INSURANCE
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I have a question for the Minister of Employment and Immigration. Statistics Canada figures for January and February of this year show pay-outs on the unemployment insurance account of $971 million, 26 per cent higher than last year, indicating a total pay-out approaching $5 billion in this calendar year. What new action is the government planning to reduce unemployment insurance pay-outs and to cut down on the unemployment insurance account deficit?


Jack Sydney George (Bud) Cullen: Mr. Speaker, as the hon. member knows, there is an indexing arrangement in the Unemployment Insurance Act which is built right into the legislation and for which, I might say, every party in this House voted. I also point out that the average pay-out is about $110 per week. Given the higher level of unemployment this year, we have a slightly higher pay-out. However, to compound that by suggesting that that will be the situation throughout the year, I think does a disservice to the program.


William Hillary (Bill) Clarke: Mr. Speaker, since the unemployment rate is directly related to the present economic situation, has the minister consulted, or will he consult with his colleague, the Minister of Finance, who seems intent on and content with a high rate of unemployment?
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May 4, 1978


Jack Sydney George (Bud) Cullen: Mr. Speaker, that question, in effect, answers itself. Obviously, the Minister of Finance is not satisfied. That is why we brought in the employment tax credit program which involves about $200 million. That is just one more program in the government's armament against the ogre of unemployment.


Mr. Hnatyshyn:: Too little, too late.


FINANCE
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, my question is directed to the Minister of Finance. Can the minister advise whether Mr. Tom Shoyama, the Deputy Minister of Finance, has resigned?


Joseph Jacques Jean Chrétien: No, Mr. Speaker, he is not resigning. He is working with me, and his work is very good.


Some hon. Members:: Hear, hear!


Mr. Alexander:: For how long?


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General. I would like to ask the Postmaster General why the Post Office is going back to the pre-Thomas Edison and Alexander Graham Bell era in communications and removing telephones from rural post offices.


Hon. J.-Gilles Lamontagne (Postmaster General):: Mr. Speaker, I would like to answer this question but it seems quite irrelevant to me since the telephone does not come under the jurisdiction of the Post Office. Nevertheless, I would like to ask the hon. member for Brandon-Souris to be more positive in his questions. I cannot see any purpose in asking questions about what happened at the Post Office perhaps 100 or 125 years ago. We are now trying to create a new climate in the Post Office. We are trying to establish more open communications with our employees, and I would ask for the opposition's co-operation in that effort so as to avoid the worst and make the Post Office more efficient throughout Canada.


Walter Gilbert Dinsdale: Mr. Speaker, with a statement like that, I can understand why the Post Office is in trouble. Inasmuch as the Post Office is in the communications business and improved communications are essential to the restoration of our rural communities, particularly in reversing the shift of population
Oral Questions
to urban areas, a process which has been gradually eroding rural communities and the family farm, why is the Post Office Department constantly downgrading its services while at the same time increasing postal rates, rather than pursuing the more positive policy of increasing business and revenues by improving service?


Mr. Speaker:: Order, please. This is a fascinating subject to raise, but surely it is one of argumentation and not a question. The hon. member for Yorkton-Melville.


RAILWAYS
Lorne Edmund Nystrom: Mr. Speaker, my question is to the Minister of Transport and it concerns the question of rail line abandonment. Because of the recommendation made by the Prairie Rail Action Committee to abandon some 121 miles of rail line, there is now a great deal of concern in many of the communities which are being studied by the PRAC. The communities have been asking whether it is the intention of the minister to instruct the PRAC to consult fully with the communities affected even to the extent of holding hearings in these communities.


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, the Prairie Rail Action Committee is analysing the lines which the Hall commission did not resolve in terms of their future. It is consulting with a number of additional groups on facts and figures, but is relying heavily on work done by the Hall commission. When recommendations are made by the Prairie Rail Action Committee and the nature of those recommendations is such that the positive parts of them favour maintaining and making lines permanent and upgrading lines, those recommendations can be-and have been, in some cases-implemented by the government forthwith.
What we might call the negative part of any recommendation, that is, that a line be abandoned at a certain point in time, can only be referred to the Canadian Transport Commission, and that commission would in the ordinary course have full hearings involving the communities. There is, therefore, an important message to the communities that they are very likely to have an opportunity either before the Canadian Transport Commission, or in due course before a western arm of that commission, to make their views known before any adverse decision is taken.


Lorne Edmund Nystrom: Mr. Speaker, as the Minister of Transport knows, the Saskatchewan Wheat Pool has criticized the criteria being used by the PRAC. For example, it is recommended that lines with traffic densities as high as 90,000 bushels per mile be abandoned. I wonder whether the minister can tell the House just what criteria are being used and if it is his intention to instruct the PRAC to change its criteria so that they will be more in line with what Hall was originally thinking.

May 4, 1978
Oral Questions


Otto Emil Lang: Mr. Speaker, following meetings with many farmers, including a group from the Holdfast-Dilke district and others concerned about specific lines, I asked the Prairie Rail Action Committee to make known more widely the criteria it is using. I am sure we will all be interested in iooking at those before making a judgment upon them. I think that is the important first step.
Second, the Prairie Rail Action Committee is preparing to make a much more detailed analysis available to each area affected, about their reasoning and about all the factors involved, short only of those which were given to them in confidence by, for instance, the elevator companies.


INDUSTRY
Hon. Herb Gray (Windsor West):: Mr. Speaker, my question is directed to the right hon. Prime Minister. The final communique of the first ministers' conference last February said that "federal and provincial governments will provide incentives and take measures to ensure the proportional share of the increasing investment in the new plant for the automotive industry takes place in Canada." Therefore, would the Prime Minister make the carrying out of this commitment one of his personal priorities as first minister of the federal Government of Canada?
In this connection, will he ensure that the Minister of Industry, Trade and Commerce gets together with the treasurer of Ontario to establish an agreed on data base about the entire automotive industry; and to have the Ontario government begin to carry out its side of the commitment in the first ministers' communique; but, most important, carry out the priority federal side of the commitment, which must mean ensuring Canada has a fair share of not just investment but primarily of jobs and production; and finally, deal with disturbing indications of the transfer of production from some Canadian auto plants to those of their parent companies in the United States?


Pierre Elliott Trudeau: Mr. Speaker, I take the hon. member's remarks to be more in the nature of a representation than a question. I should like to indicate to the hon. member that the government shares his concern. Not only the Minister of Industry, Trade and Commerce but other ministers, including the Minister of Regional Economic Expansion, have been involved in negotiations to obtain, in effect, results in this area.
In this regard, I should tell my colleague and all members of the House that at three o'clock I will table my letter to the premiers, including Premier Davis who wrote to me on this subject. My letter followed up on the February conference and indicated the conclusions which had been reached collectively by the premiers and myself, and the various actions which
[Mr. Nystrom.l
have been taken and are being taken in this regard by the government. It will be tabled at three o'clock.


Some hon. Members:: Hear, hear!


RAILWAYS
Ramon John Hnatyshyn: Mr. Speaker, my question is directed to the Minister of Transport. It relates to the important recommendations of the Hall commission on grain handling and rail line abandonment. I should like to ask the Minister of Transport a simple question. Is it the intention of the government to bring forward an extension of the Crows-nest rates in respect of finished products, or at least products of feed grain?


Otto Emil Lang: Mr. Speaker, any such question would involve very enormous additional expenditure which obviously we could not begin to contemplate at this stage. Indeed, the earlier recommendation of the Hall commission, that we pay to the railways full compensation between the Crow rate and what it costs to move grain, may involve a cost in the order of $200 million, including existing branch line subsidies. We have not been able to do that either, because of the present restraint period. However, we have done the very important thing of committing millions of dollars to rehabilitation. For every dollar being spent there, we will receive work, results and improvements in the lines.


Ramon John Hnatyshyn: Mr. Speaker, it is clear from the answer of the minister that either he misunderstands or has not read the recommendations or the full report of the Hall commission. With respect to my first question, I point out to the minister that the cost is estimated to be in the vicinity of $35 million, even with inflation taken into consideration. Will the minister read the report, understand it and come forward with some reasonable proposition in respect of my first question?


Otto Emil Lang: Mr. Speaker, I must tell the hon. member that his view that $35 million would do the job is quite wrong. I believe he would find that there would be an immediate insistence that any subsidy applied to rail shipment of meat and other products would be applied to trucking as well. Regardless of whatever logic the hon. member may apply, I do not believe he could say that the freight rate on meat moving 1,000 miles in the west could be much lower than a similar amount of meat moving 1,000 miles in the east. I have tried to be rather even-handed while helping the west significantly in many ways with regard to our policies. I hope the hon. member will speak to his colleague, the hon. member for Carleton-Charlotte, who already has criticized this government for doing too much for the west in transportation.
May 4, 1978


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


ADMINISTRATION OF JUSTICE
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, I should like to direct my question to the Prime Minister. Can he inform the House of his government's policy for dealing with marijuana and cannabis, in view of the fact that in 1972 the minister of national health and welfare promised a change in legislation and in 1973 the minister of national health and welfare, now the Minister of State for Federal-Provincial Relations, also promised a change in legislation? The government introduced Bill S-19 and the Liberal party convention endorsed a change in the law dealing with marijuana and cannabis, changing them from the Narcotic Control Act to the Food and Drugs Act.


Pierre Elliott Trudeau: Mr. Speaker, the hon. member is correct in reminding the House that the government introduced this bill in the Senate. Indeed, it was approved and passed by the Senate. If the hon. member is making an offer on behalf of his party-


Mr. Lawrence:: He is asking what you are prepared to do.


Pierre Elliott Trudeau: I will tell the hon. member what we are prepared to do. If there is all-party agreement to deal with this bill at all stages in one day, we will introduce it tomorrow.


Some hon. Members:: Oh, oh!


Paul Wyatt Dick: Mr. Speaker, I think the Prime Minister well knows that we usually like to see the wording of bills before we make agreements, because sometimes they play tricks. Is it a fact that the Prime Minister, in a press conference prior to the week of April 1, indicated that the government would not introduce this legislation unless it was re-elected again?


Pierre Elliott Trudeau: No, Mr. Speaker; I believe I told the press conference what I have just told the hon. member, that if we have time to pass it, we will pass it. That is why I am making the offer to the hon. member.


An hon. Member:: We have all the time to pass it.


Paul Wyatt Dick: Introduce the bill.


Pierre Elliott Trudeau: What is all the beefing about, Mr. Speaker? One member asks a question and another member is beefing about something. I do not know what he is beefing about.


Mr. Speaker:: The hon. member for Parry Sound-Muskoka.
Oral Questions


Paul Wyatt Dick: I would have liked to pose a final supplementary question.


SMALL BUSINESS
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I should like to direct my question to the Minister of State for Small Business. In view of the fact that products containing saccharin and other sugar substitutes are to be sold only in drugstores by decree of the Minister of National Health and Welfare, considering that this practice greatly discriminates against small rural businesses which traditionally have stocked such products, and further noting that many rural inhabitants are unable to drive the 20 miles or 30 miles to the closest drugstore, will the minister confer with his colleague, the Minister of National Health and Welfare, and end this unfair and arbitrary discrimination against rural business establishments and rural dwellers?


Hon. A. C. Abbott (Minister of State (Small Business)):: Mr. Speaker, without knowing the facts, I presume there must be some prescription sale of saccharin now which did not exist before. But I will check with the Minister of National Health and Welfare to see if it can be ameliorated.


Stan Darling: Mr. Speaker, I thank the minister for that answer. He is well aware that a great many small municipalities of 200 or 300 people have no stores within 20 or 30 miles other than the general store. Will the minister give the further assurance that steps will be taken in respect of providing research and development grants to small firms previously engaged in manufacturing products containing saccharin which have been adversely affected by the government's decision and may want to establish new product lines? The minister is well aware of this because he visited one such establishment in my constituency where the municipalities are suffering from this situation.


Anthony Chisholm Abbott: Mr. Speaker, I will take that as a representation as well.


LOANS FROM FEDERAL BUSINESS DEVELOPMENT BANK
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, my question is also directed to the Minister of State for Small Business. More than six weeks ago he gave an undertaking to the House that he would favour removing the penalties which are currently assessed against small businessmen who have loans with the Federal Business Development Bank for prepayment of such loans before they are due. Why has he not yet acted on that undertaking, and when does he intend to do so?
5146

May 4, 1978
Oral Questions


Anthony Chisholm Abbott: Mr. Speaker, I undertook to hold a conference with the newly-appointed president of the Federal Business Development Bank the Monday following the hon. member's question, and I did. He assured me that very careful study is being given to this matter, and I hope his decision will be a favourable one.


Henry Perrin Beatty: Mr. Speaker, on Tuesday the minister acknowledged the fact that since he assumed his present responsibilities last fall, the rate of failure of small businesses had increased. I ask the minister why he has yet to present to parliament a single piece of legislation reflecting his present responsibilities.


Anthony Chisholm Abbott: Mr. Speaker, I did present the CALURA amendments.


Some hon. Members:: Oh, oh!


Anthony Chisholm Abbott: I know the hon. member may not have them in his contemplation, but I can assure him we have done a good many other things as well. I would refer him to my speech during the budget debate. I am very hopeful that we will be introducing further initiatives in the future.


EXTERNAL AFFAIRS
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Has the minister inquired as to the circumstances surrounding the attack by Russia on the South Korean aircraft, indicating their sensitivity about their military bases and severe action by them against accidental intrusion?


Donald Campbell Jamieson: Mr. Speaker, since it is not a matter that directly involves Canada, I have not made any specific inquiries. Of course, I have been advised in a general way about it. If the hon. member has a specific question with regard to the matter, I will be glad to look into it and see what additional information I can obtain.


AGRICULTURE
Mr. Jack Murta (Lisgar):: Mr. Speaker, I would like to address a question to the Minister of Agriculture. On April 10, the minister, in reply to a question of mine concerning whether the government had made a decision on tariff recommendations, said "if he wants it briefly, it is practically as the Tariff Board reported." The Tariff Board report, at page 150, states, "one of the main recommendations was for the implementa-
[Mr. Beatty.l
tion of an automatic surtax." My question to the minister is: Has that particular part of the report been adopted in so far as the minister's statement to myself on April 10 is concerned?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, it is my understanding that it has been dealt with in its full content.


Jack Burnett Murta: Mr. Speaker, I was going to direct my next question to the Minister of Finance, but since he is not here I will direct it to the Minister of Agriculture because he has a passing interest in this matter. The Minister of Finance indicated that we, meaning Canada, have notified our trading partners that we intend to renegotiate certain GATT commitments in relation to Tariff Board proposals. Would the Minister of Agriculture inform the House what commitments the Minister of Finance and hence the government are talking about in terms of renegotiating with our trading partners at the GATT negotiations in Geneva?


Eugene Whelan: Mr. Speaker, I have had discussions with the Minister of Finance on this very topic. Since the hon. member has asked his previous question, to make it clearly understood, the Tariff Board report, with some modifications, is being dealt with practically in its entirety for discussion at the tariff talks that are taking place in Geneva. I do not think I am in any different position than I was then to say how these discussions are going or what is being done.
We had discussions this week with our ambassador there, and with our representative, Mr. Warren, to discuss how these negotiations were going. I am sure the hon. member is aware that agriculture is a very touchy thing for them to discuss there, because some countries have much more protective ideas than we do. We will be dealing directly with the United States on most of the Tariff Board suggestions and recommendations.


IMMIGRATION
Mr. Alex Patterson (Fraser Valley East):: Mr. Speaker, my question is to the Minister of Employment and Immigration. I have given him notice of my intention to ask it. In view of the government's stated immigration policy which gives emphasis to the reunification of families, could the minister explain to the House the department's delay in making its decision in the Pedro Cruz case.


Jack Sydney George (Bud) Cullen: First of all, Mr. Speaker, I thank the hon. member for not only giving me notice but making representations in this case. I have looked into it personally. Mr. Cruz, unfortunately, is a member, under the old bill, of the prohibited class. As a result, he was ordered to be deported but chose to leave voluntarily. His wife subsequently made further application. Because of the hon. member's representations and others, I am
May 4, 1978

Oral Questions


ADMINISTRATION OF JUSTICE
[Stage Direction]
taking a look at it; that is what is taking the time. I would like to look at all the circumstances as to why he was in the prohibited class and whether the time-frame that has gone by since the last offence would warrant ministerial permit intervention at this time.
Alexander Bell Patterson: Mr. Speaker, since Mrs. Cruz and her seven-month old son are being forced to go on public assistance, and since their mortgage company is proceeding with foreclosure action, could the minister assure the House that he will take not only a personal interest but will do all he can to expedite the decision in this matter?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I have already given the undertaking that I will expedite the decision. I cannot give an undertaking that the decision will be positive.


POST OFFICE
Cecil Morris Smith: Mr. Speaker, my question is for the Postmaster General: I previously raised it under Standing Order 43. Removal of phones from rural post offices has caused hardship for rural customers. Also, at this time the safekeeping of the Queen's mail must be a top priority. Would the minister now confirm that he will requisition hand-bells for postmasters, so that in case of fire they can go running down the street shouting "Fire"?


MANPOWER
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I would like to ask a question of the Minister of Unemployment and Immigration. Following some inquiries I made of Manpower, I understand there is no training provided for shoemakers. In light of the fact that shoes are very expensive in northern Ontario, and we could use a number of shoemakers to do repairs, will the minister give consideration to implementing a program of shoemaker training under Manpower facilities?


An hon. Member:: It is against their contract.


Jack Sydney George (Bud) Cullen: Mr. Speaker, the initiative and responsibility is provincial in providing the particular sources. Under the various adult occupational training programs, or the $96 million we make available for apprenticeship programs, we must work in agreement with the provinces. I have the hon. member's representation. I know his "soul" is in it, and we will give it every consideration.


Mr. Gillies:: Only a "heel" would make a statement like that.


Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, my question is for the Minister of Justice. In light of the debate on Bill C-42, language in the courts, that will continue this afternoon, perhaps the answer to my question will shorten it. I suggested in my speech, on behalf of the party, an amendment under which, if the act is to come into force, it would be jointly proclaimed not only by the federal government but by the provincial governments, if the law is to be adopted by the provinces, in line with the administration of justice which falls under provincial jurisdiction. Would the Minister of Justice comment on that matter, because I am sure it would shorten the debate?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, without getting into a debate with the hon. member, I take some exception in light of my view that the legislation as presented is perfectly constitutional. As I have already indicated, I have not taken a firm position on the proposed amendment. I am having my officers examine it from a constitutional and policy point of view. I have indicated to my colleagues that I want to discuss this matter with them early next week so that I will be in a position to respond to the hon. member in committee if the bill gets that far.


EXTERNAL AFFAIRS
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Secretary of State for External Affairs. As the minister is aware, there has been dissatisfaction expressed by members of the United Nations over the mandate exercised by South Africa over South West Africa, and South Africa has indicated that they will keep their
15,000,	approximately, troops in South West Africa just as long as Cuba keeps a similar number of troops, revolutionaries and mercenaries on the southwest Angola border.
My question to the minister is: Has he asked Cuba to withdraw these troops, in the interest of establishing peace in this much troubled area? Also, since it is my understanding that he was delegated as a spokesman to make a presentation which would solve this problem to the South Africans, has his concept been accepted and has SWAPO, the South West African People's Organization, accepted his proposal to establish peace in South West Africa?


Donald Campbell Jamieson: Mr. Speaker, it is quite difficult to answer all of those points succinctly, but I shall do my best. On the matter of South African troops in Namibia, or South West Africa, the description the hon. member has given probably predates the proposals put before the United Nations last week. These
80038-36%

May 4, 1978
Privilege-Mr. Lawrence
proposals, which I made on behalf of the Western Five and which have been accepted by South Africa, answered the second part of the question.
The proposals did in fact call for the withdrawal of South African troops from Namibia or South West Africa down to a total of 1500. The prior situation with regard to withdrawal being conditional on the Cubans' presence in Angola is therefore not now in play, given the precise meaning of the hon. member's question.
On the second point, with regard to Cuban troops in Angola or any foreign troops in that part of Africa, we have, as Canadians and as members of the Contact Group, indicated our concern over this continuing foreign presence and have made direct representations to the Cubans urging them to withdraw from their involvement in Africa.
On the third part of the question, just briefly, while South Africa has accepted the proposal of the Western Five as detailed by me before the United Nations, SWAPO-the South West Africa People's Organization-has not accepted it to date. But as of yesterday or the day before SWAPO has asked for a further meeting to clarify certain points made in the proposals.


BUSINESS OF THE HOUSE
Mr. Baker (Grenville-Carleton):: Mr. Speaker, I wonder if I could ask the government House leader his legislative intentions for the balance of this week and for next week.


Mr. MacEachen:: Mr. Speaker, as the Minister of Justice has indicated, we will be considering Bill C-42, language of trial, today, followed by Bill C-17, the CNR recapitalization; C-39, currency and exchange; C-6, the ports legislation; C-43, relating to the ombudsman, and I should like to designate May 11 as an allotted day. I suggest it may be possible to arrange that we deal with Bill C-39 on Monday to meet the convenience of the minister and the hon. member opposite.


Mr. Knowles (Winnipeg North Centre);: Mr. Speaker, Bill S-9 was on a previous list. May I inquire what happened to it?


Allan Joseph MacEachen: Mr. Speaker, it is still on my list but it is at a later stage. It is a bill dealing with tax conventions, which I will call later.


PRIVILEGE
Allan Frederick Lawrence: Mr. Speaker, I rise on a question of privilege. I have just been handed a publication which is currently being distributed by

the Department of Energy, Mines and Resources. This document unfairly reflects upon me; it attacks my integrity; it attacks the very root of what some of us stand for, but I am not sure that the House can do very much about it. I want you to know that this type of material is being distributed by this department. I resent it deeply as I think it is prejudicial to my interests. In it I am described as a Liberal member of parliament.


MR. McCAIN-COMMENT BY MINISTER OF TRANSPORT DURING QUESTION PERIOD
Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, I rise on a question of privilege. I do not believe it was intentional on the part of the Minister of Transport (Mr. Lang), but I believe it should be brought to his attention that my remarks emphasized what was being done in the west and perhaps gave him a little political credit, they emphasized what was being done in the St. Lawrence River area and from Quebec to Windsor in the transportation system, and also emphasized the total lack of attention being paid to Atlantic Canada and its transportation requirements as well as the disparities in attention and accomplishments in that field, but at no time did I say that too much had been spent on transportation in western Canada as the minister implied.


Otto Emil Lang: Mr. Speaker, in regard to the hon. member's desire not to have expenditures in the west, the record will speak for itself. I think the hon. member should be fairly corrected in his references to the Atlantic. He referred to a couple of trips I made to the Atlantic region recently. They involved improvements to several harbours, the introduction of a new ferry service, the signing of $100 million worth of highway agreements, about $21 million worth of airport improvements, and many more things, for which the Atlantic region is very grateful.


Fred Alward McCain: Mr. Speaker-


Mr. Speaker:: Order, please. The hon. member will realize that there is no procedure whereby I can give him the floor a second time on the same question. He has raised this matter by way of a question of privilege. He knows what he raised was a disagreement with the minister. The minister has continued the disagreement, but nevertheless it is not a question of privilege; it is a disagreement.


Fred Alward McCain: Mr. Speaker, on a question of privilege, I think the remarks of the minister merely amplify the position I have taken. He has now approached what might be termed as deliberate misleading of this House by his remarks in respect of my question of privilege and my earlier remarks in this House. I think-


Mr. Speaker:: Order, please. The hon. member for Carleton-Charlotte (Mr. McCain) is obviously continuing what is essentially a disagreement and not a question of privilege, which
May 4, 1978

was the way I ruled in the first place. I do not think the matter can be pursued any further.



ROUTINE PROCEEDINGS


Pierre Elliott Trudeau: Mr. Speaker, I should like to table, under Standing Order 41(2), copies of letters in both official languages which I sent to all provincial premiers following our discussions at the first ministers' conference. I should comment that my letter to Premier Davis also contains a reply to his telex of March 1, 1978.


LORD'S DAY ACT
Mr. Peter Elzinga (Pembina) moved: for leave to introduce Bill C-453, to amend the Lord's Day Act (penalties).


Some hon. Members:: Explain.


Peter Elzinga: Mr. Speaker, briefly the purpose of this legislation is to increase the fines levied when one is in violation of the Lord's Day Act.


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

Mr. Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the table the twelfth report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for St. John's West (Mr. Crosbie) and finds that it meets the requirements of the standing orders as to form.
* *
*


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
Order Paper Questions
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: 762, 1,485, 1,488 and 1,515.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Hnatyshyn: 1.	Did the Department of National Revenue (Taxation) conduct a close surveillance operation on Thomas Mighty Midway and Bernard Thomas of Lennox, South Dakota, U.S.A., during the period June 24 and July 23, 1977 at the time the Midway was operating in Canada and, if so, for what reason?
2.	How many Departmental members were employed from (a) Calgary (b) Saskatoon (c) Winnipeg (d) Thunder Bay (e) elsewhere, at (i) Thunder Bay, during the period June 24 to July 2, 1977 (ii) Saskatoon, during the period July 11 to July 16, 1977 (iii) Lethbridge, during the period July 18 to July 23, 1977?
3.	How many additional persons did the Department employ through Manpower Canada or any other federal agency or department, including the Royal Canadian Mounted Police at (a) Thunder Bay (b) Saskatoon (c) Lethbridge (d) the Customs Port of Entry at Pigeon River, Ontario, during the close surveillance operation?
4.	What was the cost of transportation for Departmental staff from their places of regular employment to (a) Thunder Bay (b) Saskatoon (c) Lethbridge?
5.	What was the cost of (a) accommodation and meals (b) overtime for Departmental staff during the period of close surveillance at (i) Thunder Bay (ii) Saskatoon (iii) Lethbridge?
6.	What was the cost of (a) hand operated unit counting machines (b) light summer headware (c) footwear (d) shirts (e) blue jeans and trousers (0 camp stools (g) mobile homes and campers and parking facilities for same (h) stenographic equipment and staff, purchased and rented for use in (i) Thunder Bay (ii) Saskatoon (iii) Lethbridge?
7.	What additional revenue, in total, was assessed Thomas Mighty Midway and Bernard Thomas and all of the midway unit owners and contracting unit managers, as a result of the close surveillance, beyond the total tax revenue declared by all of them in their 1976 income tax returns?
8.	Who ordered the close surveillance operation and for what reason?


Mr. Yves Demers (Parliamentary Secretary to Minister of National Revenue):: 1. The Department of National Revenue, taxation, as part of its normal programs has conducted tax audits, not close surveillance operations, on carnival and midway operations in western Canada. To preserve the confidentiality of taxpayers' affairs, the names of individuals and corporations that are audited, the extent or cost of the audit and the additional taxes levied are not disclosed publicly.
Parts 2 to 8. See answer to part 1.


Mr. Oberle: Did the Canadian Armed Forces Intelligence and Security Branch and/or General Walter Dabros have a direct or indirect involvement in the 1970 Praxis break-in in Toronto and, if so, to what extent?
(Questions answered orally are indicated by an asterisk.)


Barnett Jerome Danson: No.

May 4, 1978
Order Paper Questions DSS-SECURITY


Mr. Oberle: 1.	How many full or part-time staff or operatives are employed by the Security Branch of the Department of Supply and Services?
2.	What are the names of all private security agencies, such as the Corps of Commissionaires, or security branch of government defence firms who have been screened by, or are in constant contact with, the Security Branch and, in each case, how many staff are employed full or part-time?
3.	Which of the firms conduct investigative or detective functions and under what legislative authority are such services rendered?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: 1.	Staff: 51 Operatives: Nil
2.	(a) The security branch of the Department of Supply and Services does not screen security agencies such as the corps of commissionaires, (b) The security branch of the Department of Supply and Services is responsible for ensuring that departmental and industrial employees engaged in classified contracts are security cleared in accordance with established practices and procedures through the national security agency. The branch does not have an investigative role. Insofar as private guard companies are concerned, the security branch provides a contract quality control function for all private security guard contracts issued by the Department of Supply and Services in the National Capital Region. At the present time, there are 12 contracts with the following companies: National Protective Service Company Limited; General Protection Company Limited; Grant Security Services; S.I.S. Protection Company; Dustbane Security Services; Universal Investigation Services Limited. The numbers and identity of the companies engaged in classified contracts vary with the contracts issued. A list of such contracts issued by the Department of Supply and Services is published weekly. The number of staff employed full or part-time by such industries is unknown.
3.	Nil.


Mr. Forrestall: 1.	Did the government announce in June or July 1976, a $17.1 million loan by the Export Development Corporation to Panama for the construction of a container terminal in Colon, Panama and, if so, on what date is the project to be (a) completed (b) operational?
2.	What amount of the loan has been advanced to date?
3.	On what date will the loan be completely retired?
4.	What is the rate of interest to be paid on the loan?
5.	Have gantry cranes for the facility been ordered and, if so, who is the supplier?


Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: In so far as Export Development Corporation is concerned: 1. Yes, on June 30, 1976. (a) Completion date early in 1979. (b) Operational date is not yet available.
2. By tradition and as a matter of commercial principle Crown corporations have not been required by parliament to answer detailed questions on their administration and opera-

tion, and in the case of Export Development Corporation, the Export Development Act places the responsibility for such matters on its board of directors.
3.	The loan will be completely retired July 1, 1989.
4.	Please see the answer to part 2.
5.	That aspect of the project is one of the commercial features within the province of the exporter, since the exporter awards sub-contracts.


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


[Stage Direction]
The House resumed, from Tuesday, May 2, consideration of the motion of Mr. Basford that Bill C-42, to amend the Criminal Code, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I am glad to have this opportunity to make some remarks on Bill C-42, an Act to amend the Criminal Code, aimed at guaranteeing the language rights of Canadians before the courts. I will try, Mr. Speaker, to be as brief as possible and at the same time to restrain my enthusiasm and my pleasure in taking part in a debate I feel is almost historical.
I have been interested for a long time in matters dealing with linguistic equality, and hon. members will remember that once I did introduce Bill C-210 which would have given the accused the right to be heard and tried in his own official language. As it often happens, some hon. members on the other side, particularly Progressive Conservatives, found the bill untimely and killed my private bill.
So I am very pleased, Mr. Speaker, along with all fair-minded Canadians, to see that the government has kept its promise and introduced in this session a piece of legislation, Bill C-42, to amend the Criminal Code and give all Canadians both French- and English-speaking, the right to be tried in their own official language without the help of an interpreter. As I said earlier, this bill is one step further towards linguistic equality. In the minds of many Canadians, this bill confirms the most fundamental right in any society, namely the right of
May 4, 1978

any accused to defend himself in the courts in his own mother tongue. This bill which is being debated on second reading acknowledges this fundamental right which has been denied for too long to French-speaking Canadians living in those provinces where the majority of the population is Englishspeaking.
Some will say it is not perfect and the best possible compromise in the present context. History will record this important landmark which bears witness to the progress toward equity and justice by our two founding people.
If I say that this legislation is not perfect for those of us who live in French in provinces where the majority is Englishspeaking it is because the linguistic rights that the province of Quebec has always granted its English-speaking citizens before the courts are more extensive than in any other province of Canada. I recognize readily, Mr. Speaker, the efforts made by certain provinces over the past ten years, and I am fully aware of the resistance, the hesitation and sometimes even the refusal by certain provinces, certain groups, to take up the challenge of guaranteeing their French-speaking minorities the most elementary and nature rights they are entitled to. Whether it be justice, education, health services or a host of other public services, we still have several milestones to go before we reach linguistic equity.
We also know, Mr. Speaker, that in certain regions of Canada where there is a small French-speaking population, some groups will claim and some citizens will not hesitate to use the argument of numbers and costs. It will even be said that this legislation will mean everyone will have to learn French. Well, nothing could be further from the truth. This legislation will not force anyone to speak French. Rather it will allow all Canadians, both English-and French-speaking, to be able to be tried in their mother tongue. I am pleased, Mr. Speaker, with this initiative of the Liberal government which confirms the commitment made in the Speech from the Throne last October and which follows along the line of the linguistic equality process undertaken some ten years ago with the passage of the Official Languages Act.

As I said, Mr. Speaker, Quebec already gives greater language rights at trials to this minority than is provided under this bill. The province of New Brunswick also adopted similar provisions when it passed the Official Languages of New Brunswick Act. As a matter of fact Section 13 of the act, which came into force on December 20, 1972, granted the right to its citizens to give evidence in the official language of their choice before the courts of that province.
In his news release accompanying the tabling of Bill C-42 the minister said:
This government made a commitment in the Speech from the Throne to guarantee the language rights of the accused before the courts, a guarantee which we believe to be of particular relevance to national unity. Any person in Canada accused of a crime should not require an interpreter in order to state his or her case in either of Canada's official languages before Canadian courts.
Criminal Code
With Quebec and New Brunswick already giving this right to their citizens, and now with the province of Ontario studying a bill to extend language of trial rights, it seems to me that quick passage of Bill C-42 will clear the way for the rapid implementation of its provisions in the province of Ontario. It is a fact, Mr. Speaker, that 500,000 French-speaking Canadians reside in Ontario and that they constitute the largest French-speaking group in any Canadian province apart from Quebec. The passage of this bill, and the consequent amendment to the Ontario Judicature Act, will no doubt be another milestone in the history of French-speaking Ontarians.
Bill C-42 will also allow and invite other provinces to act as generously and justly with their own citizens.
We will have the opportunity in committee, Mr. Speaker, to clarify certain clauses of Bill C-42. As an example, I will want to clarify, with the minister, circumstances where a judge will retain the discretion to order that the trial be conducted in a bilingual fashion. Let me quote again from the minister's own news release as follows:
In addition, when circumstances require, the judge retains a discretion to order that the trial be conducted in a bilingual fashion, in other words, a mixed French and English record.
At present, Mr. Speaker, provisions regarding the language of trial vary from province to province. The Criminal Code provides that in Quebec an accused may be tried by jurors who speak his or her official language, or by a mixed jury composed of six persons who speak English and six who speak French. I refer to Sections 555 and 556 of the Criminal Code. The code also provides in Section 556 for mixed juries in Manitoba.
I agree with the minister that these mixed juries were rarely used because of the obvious communications difficulties where jurors could not communicate in their consideration of the evidence. It could very well be that half of them did not understand the language of the other half, and it was difficult indeed for a fair trial to be held. As a matter of fact I believe the last such trial that was held in Quebec was the trial of Mr. Coffin who was eventually hanged in 1956, but mixed juries were not the practice either in that province or in the province of Manitoba. I therefore agree with the minister that Section 556 should be repealed and replaced by Bill C-42.
In reading both the news release and proposed Section 462.1 of the bill, I admit that I had some difficulties in finding the provision which empowers a judge to order a trial in a bilingual fashion with a mixed French and English record. In discussing the bilingual capacity and in trying to understand the provision for a judge, or judge and jury, as the case may be, I had to reread several times those lines which read:
-who speak the official language of Canada that is the language of the accused or, if the circumstances warrant, who speak both official languages of Canada."
A distinction is to be made as to who speaks the language of the accused, and the second part being who speaks both official languages of Canada. Because I am a Franco-Ontarian and in Ontario all our lawyers and judges are bilingual, I fail

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to understand why we include in the bill a distinction between one who speaks the language of the accused and one who speaks both official languages. Why a distinction between one who speaks the official language of the accused and one who speaks both official languages of Canada?
The distinction must be made between a unilingual Frenchspeaking judge and a judge who speaks both official languages. In Ontario, as I said, all French-speaking judges are bilingual. There is no problem there. However, in Quebec one can find French-speaking judges who are not fluent in English. A choice will have to be made in certain circumstances whether to designate a bilingual judge rather than a unilingual judge.
To illustrate further the case, a choice may be made as to a judge who speaks the language of the accused and a judge who speaks both official languages in Canada. Let us situate a case in the Gaspe Peninsula or the Lac St. Jean area, where we could find a unilingual French-speaking judge designated to hear a case involving a unilingual French-speaking accused person. Some of the witnesses may be unilingual French and others unilingual English. There is no difficulty for the judge to hear testimony in the French language from those who speak French. For the witnesses who are unilingual English, the law allows the judge to swear in an interpreter who gives the judge an official interpretation. The interpretation in that court will be the language of that judge. Therefore the interpretation will be from English to French. The transcript will be in French, and the judge will make the judgemnt on that.
Another example, but different, is in the same locality. A unilingual French-speaking accused has elected to be tried by a judge who speaks his official language, French. However, all of the witnesses are unilingual English. It could be decided and agreed that in that case a judge who speaks both official languages of Canada would better serve the ends of justice. The judge would be able to follow all proceedings in both official languages of Canada, and the accused, this time, would be given an official interpreter. In the first case, the witness who spoke the other official language was given the interpreter, and in this case the accused is given an interpreter. Again the provisions of Bill C-42, proposed section 462.1 subsection (1), are respected.
These two examples, Mr. Speaker, at least in my understanding of the bill, would explain what is meant in the news release when the minister said, "The judge retains a discretion to order that the trial be conducted in a bilingual fashion, in other words, a mixed French and English record."
I would like to look now at existing legislation in New Brunswick and the proposed amendments to Section 127 of the Ontario Judicature Act. The province of New Brunswick in its existing legislation states at Article 13, subsection (1):
Subject to Section 15, in any proceeding before a court, any person appearing or giving evidence may be heard in the official language of his choice and such choice is not to place that person at any disadvantage.
Subsection (2) of Section 13 continues:
Subject to subsection (1), where
(a) requested by any party, and

(b) the court agrees that the proceedings can effectively be thus conducted,
the court may
order that the proceedings be conducted totally or partially in one of the official languages.
In Ontario the amendments in Section 127 of the Judicature Act, subsection (5), read:
Where an application is made under subsection 3, the court may further direct that the hearing or any part of the hearing be in the French language if, in the opinion of the court, the hearing or part can be so conducted effectually.
There is a great resemblance between the New Brunswick act and the proposed amendments to the Ontario Judicature Act. As can be seen, in both cases the court is given the discretion to decide if proceedings will be heard totally or partially in one of the official languages. This may be what the Minister of Justice (Mr. Basford) meant when he talked about the bilingual fashion. I do not know. If the judge is given the discretion to decide that part of the hearing will be held in French and part in English, I want the minister to explain in committee how, in law, that will operate.
If all proceedings are to be heard in a bilingual forum with official translations of all testimony available to the accused in the official language that he speaks, Bill C-42 goes further than the provincial legislation existing in New Brunswick and the proposed legislative changes in Ontario. I stand to be corrected. The minister may explain the distinction here when in committee. However, I think we go a bit further than the Ontario and New Brunswick legislation. In my view, it is closer to the situation presently prevailing in the province of Quebec. The accused would have the right to be heard in his official language and also to hear and read testimony in that same language. This would make it possible for trials to be conducted entirely in the language of the accused.
It may be appropriate at this time to recall that, according to the Canadian Bill of Rights, all Canadians are entitled to the services of an interpreter. Bill C-42 does not change this basic right. Bill C-42 confirms that English and French as official languages of Canada can be used equally in our courts.
I am also interested in the pre-trial procedures, more especially pertaining to the preliminary hearing where a decision is made by a judge as to whether there is sufficient evidence to proceed with a trial. Will it be possible to conduct these proceedings in the language of the accused, or is this provision to be included at a later stage? The bill does set minimum standards for language rights before the courts, and I am aware that the provinces will be free to add to these. Preliminary inquiries in the language spoken by the accused could be one of them.
There are many other questions which no doubt will arise in committee.
I understand also that timing of the proclamation of this legislation will be the subject of consultation between the federal government and each province. Province by province, proclamation will provide the flexibility that would allow each province to take the administrative steps required for the efficient implementation of the proposals in the province. Minority official language trials for indictable offences may be
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proclaimed first, trials for summary offences proclaimed later. Provinces may wish to test their bilingual capacities and capability at trials for indictable offences. When these capabilities are adequate, provisions dealing with trials for summary offences could be proclaimed.
Mr. Speaker, I would like to commend the Minister of Justice (Mr. Basford) for introducing this legislation. The government has kept its word. Bill C-42 is just another one of the many statutes which, under the administration of the right hon. Prime Minister Trudeau has made Canada a more united, fairer and more democratic country. 1 raise my hat to this federal initiative and I thank the Minister of Justice for having piloted with such generosity, patience and understanding a historic piece of legislation which will bring justice and equity to all Canadians.
Mr. Speaker, I would not want to close my comments without congratulating the Attorney General of Ontario, Mr. Roy McMurtry. I would like to thank him publicly for having tangibly contributed to this historic move or rather to these historic gestures in Ontario. If we compare this measure to what has happened in the past in Ontario, such as Regulation 17, we see that the Franco-Ontarian community can now be more hopeful of living in Ontario as first-class citizens. We have come a long way since the time of Regulations 17 which, as we all are aware, restricted and even prohibited the use of French in our schools. We have come a long way since we witnessed the amendment of the Judicature Act, which prohibited the use of French in Ontario, to include both official languages.
However, Mr. Speaker, we Franco-Ontarians, and I am talking on behalf of the 500 cousins, brothers, sisters and so on, all of us Canadians will have to keep a close watch on the situation because this move could be only a symbolic and meaningless gesture if the political will to designate the regions and the courts where the legislation will apply is slow in coming. For those who do not understand my comments, I would recall that in 1968 and 1969, Ontario passed important amendments to allow the establishment of French high schools in Ontario.
I was there, Mr. Speaker, and I was involved for 11 years with the school court of Ontario. We were all very happy and proud about these measures, that is Ontario's bills 140 and 141 passed in 1968.
Many people thought that because of the new Ontario legislation, schools for French-speaking students would be established where they were needed. I will mention only the battles begun in Ottawa in 1970 and then carried out throughout the province. The events in Sturgeon Falls, in Cornwall, and more recently in Essex have shown that even when legisla-
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tion is passed, implementation can be very slow, difficult and sometimes completed less than half-heartedly.
Finally, the Ontario government, which will be responsible for designating the courts, as well as the districts where trials can be held in French or in English, will have to provide the necessary legal and administrative staff, such as magistrates, clerks, stenographers and so on, and to do so as soon as possible.
We shall be able to ascertain the good faith of the Davis government and Mr. McMurtry if they act rapidly once the act is implemented. And we, Ontario francophones, shall have to keep on the alert to ensure that the bill is implemented. History will tell if most people have realized the importance of this initiative, Mr. Speaker. And in conclusion, I simply wish to say that I take part in what I consider a historical debate which gives to Canadians, wherever they live, a basic right, a natural right, that of defending themselves in their mother tongue before our criminal courts, and I trust it will be extended some day to civil cases, but as this comes under provincial jurisdiction, Mr. Speaker, we shall keep hoping it will happen.


Mr. Stan Schumacher (Palliser):: Mr. Speaker, I guess it falls to me to throw a pebble into the placid pool of friendship and brotherly love which has so far been in evidence in this chamber with respect to Bill C-42. I suppose that is to be expected.
It is, maybe, ironic that the first speech I am making in the House since moving to a new seat should deal with the question of language. I guess part of my troubles with the Progressive Conservative party over the last number of years is connected with that issue. I was one of those who did not support Bill C-120 in the twenty-eighth parliament and, as a result, was accused of undermining the leadership of my party.
It seems this situation is continuing, since there appears to be a great deal of support for the Minister of Justice (Mr. Basford) by the official opposition in connection with the piece of legislation before us. I guess we should not be surprised at this, because every time the question of language comes up in this House there is a love fest between the official opposition and the government. That was the case in 1969, and again in 1973 when the Prime Minister (Mr. Trudeau) introduced a resolution patting himself on the back for the way he handled the language problem in this country. On that occasion, too, the official opposition fell smartly behind the government and gave the resolution its full support. Any criticism made by other Conservatives resulted in those members being accused of undermining the leadership of the party; it was never acknowledged that they were speaking for their constituents or putting forward their own point of view.
Mr. Speaker, I have to say I am in total disagreement with Bill C-42. I think it is a gross infringement on the administration of justice in the provinces as set up under our constitution. I suppose that principle did receive a flicker of recognition

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from the official opposition because the spokesman for that party said he wished to see the bill amended in such a way that the provision would not be imposed in any province without some sort of positive action being taken on the part of that province.
The experience we have had with amendments is another matter which bears consideration. I, for one, do not feel the hon. member's suggestion will receive very real consideration from the Minister of Justice because the Conservatives have "cried wolf' before in this regard. They have proposed amendments to language proposals before, and those amendments have been turned down. But they still went along with the government.
Based on the past performance of the Conservative party on language issues, therefore, why should the government pay any attention to any of the amendments they propose? They know that when the crunch comes the Conservative party will be on the side of the government. After all, their integrity is not too good in that area. I would say it is nothing but hypocrisy, because they go around the constituencies afterward and say the government has done terrible things in the issue of bilingualism. But they do not stand in their places and express that point of view here in this Chamber, nor do they do so in the way they vote. I think it is a disgraceful situation.
I have checked with my constituents on this matter-of course I have my own point of view, in any case-and I am happy to report that when I asked them what they thought of this proposed legislation 88 per cent of them said they did not approve of it and felt it unworthy of support. Six per cent of them felt it was worthy of support, and the other 6 per cent were undecided. It is quite clear what the people around Calgary, Alberta, think of this legislation, but still we find the Progressive Conservative party saying it approves of the legislation in principle. I cannot understand how they can be so far out of touch with the feelings of their constituents.
We hear talk about the need for this legislation. Mr. Speaker, where is the need for it? Where are the miscarriages of justice occurring in the courts of our land, whether in Quebec, Alberta, or in any other province? I have seen no evidence of anyone being deprived of a fair trial on the basis of language in this country, and I am sure we would have heard about it if such had happened.
We hear about the case of Mr. Filion, now proceeding in Toronto. He was charged, along with a few others, with defrauding the taxpayers of Canada while engaged in the dredging business, and has demanded a trial in French. That did not happen. He is a perfectly bilingual person, able to understand the other language well enough to enter into contracts and make contacts with regard to his dredging operations. He is now facing a serious charge but the language barrier did not hinder his business enterprise.
I understand that when the matter came up and when a jury was being chosen for that trial there was a panel of some 240 people. The members of that panel were asked whether they

would be prepared to deal with the matter in French, and fewer than the 12 required-I think it was six-said that they could handle a trial in French in Toronto. I suppose the next question would be where to move the trial. Would it have to be moved 400 or 500 miles away in order to find a jury? What would be the cost to the taxpayer? If we are going to be doing things like this, what will be the cost of the administration of justice?
There are all kinds of practical objections to this piece of legislation. The Minister of Justice says it will not be proclaimed until there has been full and complete consultation with the provinces. The minister gave me an undertaking some time ago about proclaiming amendments to the Criminal Code dealing with appeals by way of trial de novo. I suggest the minister has not lived up to his undertaking because those amendments were proclaimed for the province of Alberta when, in fact, the minister said they would not be proclaimed until he was satisfied that there were legally trained provincial judges in that province.
I made it a point to bring this up in the Standing Committee on Justice and Legal Affairs. The minister told me not to worry about it because it would not be done until there was a proper system. The judge I had in mind at the time is still sitting and still causing no end of trouble because he does not know very much about the law and certainly has no conception of the principle of reasonable doubt.


Stanley Ronald Basford: Mr. Speaker, I rise on a question of privilege. The hon. member has accused me of breaching an undertaking I gave to him. I would obviously like to go back to read the words in the committee report of some two years ago in which that undertaking is recorded. However, I want to assure the hon. member-and I think he appreciates that what he has said about me is rather serious-that the proclamation of that section of the Criminal Code was made only after a formal request by the attorney general of the province of Alberta-


Eldon Mattison Woolliams: That's right.


Stanley Ronald Basford: -who is in charge of the administration of justice in the province of Alberta. I think I was entitled to presume, as a result of that request, that a proper system was in place in Alberta regarding trials de novo. I believe that was my undertaking, but I will check the record.


Stanley Stanford Schumacher: My understanding was that we did not have to worry about that and that the minister would see what the situation was. Perhaps he is correct in saying that he should be able to rely on the attorney general for Alberta. I have a different opinion, and if I were the hon. member for Calgary North (Mr. Woolliams) I would not want to support the proclamation of this particular bill if I had to rely on the attorney general of the province of Alberta, because sometimes I think he is completely out of touch with what he is doing. I really cannot see why the hon. member should be trying to pass the buck on to somebody else. We are elected to this House to make decisions. We should know what are the situations in our own provinces. We are elected by the people
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of those provinces, and we should not be so willing to pass off our responsibility for legislation to other jurisdictions.
The Minister of Justice says I have made a very serious accusation against him. I do not think it compares to the accusation he made against me last summer when he accused me of complicity in the death of an Ottawa policeman who was shot at the time we were discussing gun control legislation. However, these are, of course, matters of opinion.
This bill provides that every accused shall be advised of his right to apply to have his trial conducted by a French-speaking judge or before a French-speaking jury. This application will have to be made at an accused's first appearance in court. This provision does not relate just to superior court judges and juries. Justices of the peace and provincial court judges of first instance are going to have to read out this advice to every accused who comes before them. I can see situations developing where people will just want to make trouble or find a technical defence, and the court system will be clogged up even more with possible frivolous and vexatious applications. It may be that there will be applications that justices of the peace who try cases must speak the official language of accused persons.
I suggest this is directly contrary to the system of government we have now because, if we pass this legislation, the provincial governments will have to provide French-speaking justices of the peace and provincial court judges to deal with cases in which accused persons elect to be tried at that level.
There have been prior situations in which the government has abused its constitutional rights regarding spending. It has imposed large and expensive programs on the provinces in the fields of health and social welfare. Now the government is complaining about the cost of those programs. It says it cannot afford them and that it has to cut back. Those programs were imposed by this Liberal government under the system of 50 cents on the dollar and the like. Now the government wants to back away.
With this bill we have another situation in which the government is going outside its area of jurisdiction without any justification. It is imposing what will ultimately be a very expensive proposition for the provinces. The federal government does not have to pay the bill for most criminal proceedings in the provinces. The government pays the salaries of superior court judges it has appointed and no one else. What about interpreters or court reporters who will have to be used? If there are no bilingual court reporters, there will have to be interpreters for them, or groups of court reporters who are bilingual will have to be provided.
I was interested in the answer to a question put by the hon. member for Leeds (Mr. Cossitt) regarding the cost of bilingualism in this country since 1970 which is recorded in Tuesday's Hansard. According to the government's answer, the cost now totals $389,051 million. Are we really in better shape with regard to unity in this country now than we were in 1969 when the Official Languages Act was passed? Can anyone honestly say that, after our spending all that money? I do not think so.
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The first reaction to the Official Languages Act was Bill 63 introduced by the Union Nationale government in Quebec which reduced the rights of English-speaking people in that province and which made people upset. That government was succeeded by the Bourassa government which introduced Bill 22, which was probably the main reason for its defeat. Now we have the language charter, Bill 101, which says that the language of the courts of Quebec is going to be French. I suppose that applies only to provincial courts, but there certainly has not been an increased amount of good will among the language groups of this country since the introduction of the Official Languages Act back in 1969.1 think everyone who supported that legislation has a lot to answer for regarding present conditions in this country.
This bill is not necessary. We have a tremendous tradition in this country of protecting minority rights in our courts. The legal profession has been very sensitive to the fact that its duty is to protect people's rights and to ensure they receive a fair and just trial.
The hon. member for Yorkton-Melville (Mr. Nystrom) indicated that Newfoundland has a Francophone population of approximately 1 per cent. Yet the figures provided by the Minister of Justice indicate that the Francophone population of that province is seven tenths of 1 per cent. Someone else indicated that most of the Francophone population is located in Labrador.


John Carnell Crosbie: The Port au Port peninsula area.


Stanley Stanford Schumacher: Perhaps they are situated in a very restricted area. Perhaps that area referred to by the hon. member for St. John's West (Mr. Crosbie) will become the judicial centre for the province. In any event, it is a very, very small number of people. If it is impossible to impanel a jury capable of dealing with a trial conducted in the French language in a large city such as Toronto, I do not know what can be expected in a province which has a Francophone population of seven tenths of 1 per cent.
The province of Ontario is taking steps toward providing a practical solution for the problems of language in its jurisdiction. One must remember that the Francophone population is declining. Perhaps this will change. In a release dated November 22, 1977, the Minister of National Health and Welfare (Miss Begin) indicated that the Francophone population of Ontario dropped from 6.3 per cent to 5.7 per cent. Perhaps this will be reversed, as a result of what has occurred in the last couple of years in the province of Quebec. Nevertheless, it should not be considered to be an increasing problem.
The province of Ontario has attacked this problem in a proper fashion. Where there is a need for bilingual services, Ontario is providing them. Beyond the provinces of New Brunswick and Ontario, there is absolutely zero need for this legislation. If every Canadian justice of the peace and provincial court judge is required to advise people of their right to apply for a special judge and jury, there will be no end to

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irritation and trouble, the feeling that French is being shoved down the throats of people. That type of attitude is not necessary in our country at the present time.
I cannot understand why the government is bringing this before us at this time, especially when its standing in the country is considered. There have been substantial changes in the polls. We have found out that the Liberal and Conservative parties are tied. I suppose there is good reason for that. There is not much difference between those two parties. We have a Tweedledum and Tweedledee situation. Canadians are demanding more than that. They are unhappy with the bilingual situation.
When the Minister of Justice introduced this piece of legislation on April 4, I suspect he did not have the faintest idea that he would be sitting here today seeing it pass second reading. By the look of things, perhaps he will see it pass all stages. When this legislation was introduced, I suspect it was solely for election purposes, but funny things have occurred on the way to an election. I cannot believe the Minister of Justice, coming from British Columbia and having practised law at one time, feels this legislation has any practical application in the city of Vancouver or other parts of his province. According to the minister's own figures, British Columbia has a Francophone population of 1.7 per cent. He indicated that most of that population was centred in greater Vancouver. One must consider the size of that province, from the lower mainland to the far reaches of the Peace River area.
In my own province of Alberta the Francophone population mainly has settled in the northern part. The Minister of Justice referred to moving people for the purposes of trial. If that is to be implemented, one must remember that it will be necessary to move people distances of 300, 400, or perhaps 500 miles. Millions of people came to Canada not knowing the language. From time to time they broke the law and did not receive harsh treatment. In fact the courts provided proper interpreters for their benefit. Why should an Anglophone or a Francophone be placed in a better position than these people? Are they any better off than people from Spain, Germany, Italy or Portugal? Why should these people be placed on pedestals? Everyone in Canada should receive the same treatment in our courts. The important thing is that their evidence must be understandable.
If this suggestion is implemented, the result will be that judges will be hired because of their knowledge of language rather than their knowledge of law. That is a disgraceful approach on the part if the Minister of Justice, who supposedly has some respect for law. Another result would be in the area of required support staff. Where will these people come from? In the case of Alberta, what will happen when the number of French-speaking support staff employees has to be increased? I am thinking of court reporters, interpreters, or the necessary teachers to instruct them in the French language. Can one imagine the expense involved?
One must remember the expense involved in the federal government supporting a program which has created division and has been a failure. In fact Mr. Keith Spicer, who was our

Commissioner of Languages, has declared it to be a failure. When he left that office he indicated that the program did not work and that the government was crazy. I do not know why the government never learns anything. It just carries on in the same crazy fashion. I do not know what it is attempting to do. I do not know if the government is consciously attempting to break up the country or not.
The hon. Leader of the Opposition (Mr. Clark) said that the bilingual policies of the government have been terribly divisive. In the same breath, he pointed out that he felt compelled to support the principles of bilingualism in this country. I cannot understand him. On the one hand he indicates the policies are divisive, yet he continues to support them.
I do not know if any member of the Conservative party will participate in this debate other than the hon. member for Calgary North (Mr. Woolliams). Perhaps word has gone out that there are to be no speakers and that there should not be a vote. It would be interesting to know whether the Leader of the Opposition has brought strict discipline and unity to his group. It would be interesting to know if all members of the Conservative party are of one mind. It was not that long ago that I was a member of that party. If everyone in that party is in agreement with this bill, there have been some great conversions on the road to Damascus. I see the Minister of Justice beaming broadly. That is the fact of the situation. I do not know what will happen to the idea of represented democracy. It is a very unusual situation.


Mr. McKenzie:: Ask him what Jack Horner is going to do, Stan.


Stanley Stanford Schumacher: We will have to see what he does. I do not know. Perhaps he will take a walk. I don't know. I would assume there will be lots of people in the Conservative party who will not be around if there happens to be a vote on this question, as well. It really does not make a good point to say, "Well, they are just as bad as we are." The tragedy is that we cannot seem to get any real representation in this House of Commons. Unfortunately, the members are forgetting their constituents, and that is a sad day for Canada.


Joseph Adrien Henri Lambert: Mr. Speaker, first I wish to congratulate the government on having introduced in the House these amendments to the Criminal Code that will allow any individual to be tried in the official language of his choice in every Canadian province.
As my colleague the hon. member for Roberval (Mr. Gauthier) said last Tuesday, Quebec has been setting an example for the other Canadian provinces for 110 years, and I think it is time they adopted measures to give their French-speaking minorities the right to be tried in their mother tongue. We, from the Social Credit party of Canada, feel this is a basic, indefeasible right which does justice to Francophones whose rights have been encroached upon for too long. I say this
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without any bitterness, because it is the truth. It is time, if we want good will to prevail in Canada, Francophones were finally considered as first class citizens and no longer as second class citizens who are only tolerated in their own country.
Mr. Speaker, this bill is being sponsored by the Minister of Justice (Mr. Basford). I am convinced it is well inspired and after its passage it will be implemented equitably. Injustices are always reprehensible wherever they come from. That is why a public protector or ombudsman urgently needs to be appointed to ensure that the rights of each and everyone in Canada are protected as regards the enforcement of legislation under federal jurisdiction. Some hon. members and a few people have voiced certain apprehensions about the possibility of implementing this legislation all across Canada. They argue that in certain provinces such as Alberta or Saskatchewan, just to name a few, the concentration of Francophones is not high enough to justify the establishment of such services.
Mr. Speaker, I believe this argument is unfounded because if you read clause 462.2 of this bill carefully you will understand that if the linguistic qualifications of judges and jurors in an area are too thin, the trial can be moved to another region in the same province. There may be difficulties in the application of this law but they are not insurmountable inasmuch, Mr. Speaker, as those who have to enforce it act in good faith and really want harmony in Canada. Mr. Speaker, if I cannot be convinced, nobody will be, that even in those provinces where there are few Francophones, like Newfoundland for example, it is impossible to find a region where a trial could be held in French. If you do what is necessary you will find ways and the required people.
We of the Social Credit Party of Canada believe the minister to be sincere until proven otherwise, and I personally think that he is sincere when he says that the linguistic qualifications will be considered when new judges are appointed. That will be a good thing. It will prove that Canada is doing everything necessary to try and reach the objectives set out in Bill C-42.
Mr. Speaker, whether it be in western, eastern or central Canada, judges and juries who can communicate in French will have to be found, otherwise this legislation will be ineffective. We will have lost our time in the House debating this bill and the public will consider our discussion simply as an exercise in hypocrisy. I hesitate to use that term, because I believe the time has gone when they could fool aroung with the language rights of Canadians throughout Canada, that time has gone. One should keep pace with the times, with 1978, with our generation, and take advantage of all the opportunities for language teaching there are throughout Canada, all the money spent to enable Canadians to learn and use both languages. I believe that in the future there should not be any opportunity in the provinces to discriminate against any Canadian whatsoever. Moreover, certain provinces seem reluctant to implement the provisions of the new legislation and are using as a pretext the high cost of implementation. This is
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possible. As for me, I would reply that we hope that the federal government will not hesitate to provide financial assistance for the provinces. The money of Canadians is used in other areas where we believe that this is justified. I think that in this area it would also be justified and accepted by Canadians. Mr. Speaker, this is why it would not distress me to see such an item in the budgetary estimates of the government. I believe this would be money well spent.
Mr. Speaker, we are sure that passage of this bill will contribute greatly to improving the life of French-speaking people throughout Canada. We hope that all the Canadian provinces will readily accept this new legislation. Unless we are dealing with fanatics, with people who are completely against the use of both official languages in Canada, I believe most people will agree with the use of this new provision to put a stop to this injustice which has been going on for too long in this country.
Mr. Speaker, since Canada is supposedly bilingual, we believe it is essential that such actions be taken so that bilingualism can finally become fact instead of fiction; in other words, it is all very well to say that Canada is bilingual, but if Canadian citizens are denied basic rights, such as bilingualism which exists only on paper, we must correct the situation because if those rights exists only on paper, they can deteriorate to such a point that they will finally disappear altogether.
Mr. Speaker, our party has always favoured more bilingualism in all areas of social and economic activities. It is about time that Francophones be made to feel at home everywhere in Canada, that they not be confined only to Quebec. We do not want to live in a ghetto; we want our province to develop normally, we want French-speaking Canadians who have chosen to live in any other province not to feel like strangers, we want linguistics rights to be recognized, put into practice and respected. And I think we should consider that seriously if we want to live in harmony in this country and to try together to ensure the development and prosperity of Canada.
Mr. Speaker, I would like to reassure the government party, the majority party, not necessarily the party in power because I would say once again that I am clearly under the impression that power is outside this House. That is unfortunate. As long as I am not sure that the power is really in this House, I will have to remind my colleagues and the people of Canada as may times as necessary, that it is useless to talk about democracy when parliament is under the power of financiers outside this House.
Mr. Speaker, as I just said I wish to assure the government, the excutive, of support on this bill and I hope it will become law before the election so that it will not die on the order paper and be a mere statement of good intentions rather than reality. I hope this initiative of the government is not just an electoral scheme to get votes from Francophones and show the Anglo-

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phones that the government protects the rights of the Englishspeaking minority in Quebec against the so-called adverse effects of Bill 101 in that province.
If it wants to be honest with the citizens, and I hope it does, the federal government should do everything necessary to ensure the passage of this bill without delay and do justice to Francophones who have been patiently waiting for that for 110 years. Mr. Speaker, harmony in Canada is made up of many little details and if we keep them in mind we will reach our objective so that each and every Canadian will consider himelf equal to others, whatever his language, his religion and the province where he lives.
I have always considered I was lucky to be a Quebecker and a Canadian and I am proud of it and never shall I accept to grovel before anyone, before other Canadians, whatever their origin or their language. I for one, Mr. Speaker, do not think that we can turn a Francophone into an Anglophone or an Anglophone into a Francophone, but with good will both can become good Canadians. This has always been the ideal of the founder of the Social Credit Party of Canada, the late Real Caouette, who in his own words has always promoted that ideal throughout Canada.
I consider I am in the right direction in supporting the principle of that bill. Having made my remarks in the few minutes the House has put at my disposal-and I thank the minister for his attention because too often we must deplore the lack of attention from ministers and since we have a minister for a change, a member of the executive who is here listening to hon. members' remarks on this bill, I think we should thank him for his attention. This is how I consider that the business of this House should be conducted and that before our country, before all the people who look at us sometimes on television, because our debates are televised, we should make sure that our remarks become more and more serious and sincere so that the people paying dearly for the administration of our country be at least convinced that we are serious, that we are doing the utmost to give our country the best possible administration, with full justice towards all Canadians, whether they speak English, French or any other language.
Mr. Speaker, we are often blamed for opposing everything and being against every bill introduced by the majority, by the executive. I hope that for once radio and television will tell the whole population of Canada that the opposition approves this bill, wants to see it adopted, but most of all to see it in application, otherwise I will protest as a Canadian against the fact that it will have been sheer hypocrisy and in that case I assure you, Mr. Speaker, that I will come down hard on the executive.


Mr. Rene Matte (Champlain):: Mr. Speaker, the significance of the bill we are debating today goes far beyond its legal implications. Why? Because, Mr. Speaker, in 1978, on this fourth day of May, the House has just realized that it must suppress one of the most blatant if not despicable injus-

tices in this country which some people dare call bicultural or bilingual. Mr. Speaker, I believe it is appropriate on this occasion to mention certain historical facts when it has taken so much time to find a solution to the most elementary problem of justice concerning the most elementary freedom, that of being allowed to defend oneself in one's own language. Mr. Speaker, the proverb says better late than never, but we must admit it is often too late. If we analyse the immediate reasons which finally prompted the government to introduce this legislation, we must realize that it was forced by the events, because of very particular circumstances. We can wonder today whether the government would have presented this bill had not something happened in Quebec in 1976. Would the government have been in such a hurry to pass this bill if the Association des Francophones hors Quebec had not suddenly felt a new strength following events and positive and determined affirmations in Quebec? Would the government, Mr. Speaker, have deigned to consider this major and fundamental problem, which I insist is of a basic nature, if Quebec had not passed Bill 101?
Mr. Speaker, of course I am pleased to see that at last the injustice has been acknowledged and that some attempt to remedy this situation is being made. Nevertheless, how far will that action carry if you analyse the motivations and the reasons which have led to the introduction of this bill? I am even under the impression that it was drafted rather hastily if I consider that the French version is just a translation of the original English text. Once again, and perhaps the minister could let me know if I am wrong, I think that this bill which purports to defend the interests of Francophones in this country had to be drafted in English first. Furthermore, in view of the fact that hon. member for Ottawa-Vanier (Mr. Gauthier) who is a Francophone from outside Quebec fighting for the rights of his fellow Francophones made his intervention earlier mostly in English, I am led to feel quite skeptical about the whole thing, Mr. Speaker. Yet it is high time for us to realize that Canadians, be they French- or English-speaking and especially if they are French-speaking, certainly have no reasons for harbouring inferiority complexes especially from an historical point of view since they were the founders of this country.
Being the representative of a riding which bears the name of the very founder of our country, Champlain, it is for me an honour, Mr. Speaker, to underline these historical facts. Yet, what I do not agree with in the presentation of such bill is again the fact that something is going to be granted to us as a result of a definite attempt to prevent French Canadians from expressing even further their collective self-determination and participation in the future of this country. Mr. Speaker, if these are the feelings which motivate the government in introducing this bill I suggest it will not solve Canada's problems because to solve such problems you just do not do some
May 4, 1978

patching work when it becomes absolutely necessary, otherwise the whole structure will break down. On the contrary, this compulsory solution, this negative approach to bring about changes which have become necessary is not to the credit of this parliament.
This is why I would hope that this bill be considered only as a solution to an emergency because it deals with the basic freedom of the individual. It should not become the method used by the government to coax Quebeckers and Canadians into believing that the government is about to solve all their problems and that it alone has the solution, the proof being that it is capable of bringing remedies by simply introducing bills so that this country may stay united.
Mr. Speaker, if this is the first note of a ditty we will be hearing during an election campaign and it was done for that purpose, I say that this bill will change nothing to the present conditions. I am not being pessimistic, but I would like this negative attitude of the government, this legislation forced upon us make all members realize that we should rather consider the basic major changes which would finally make Canada meet the requirements of its citizens.
Mr. Speaker, I am not overly impressed when I am told that from now on-as I am not entirely convinced-a French Canadian from Toronto, Vancouver or New Brunswick will actually be tried in French, if he so desires. Mr. Speaker, it would please me and I hope it will happen. However, if they think all the problems related to national unity will then be solved, I think they are deluding themselves, Mr. Speaker.
I remember, a few years ago, when I presented a motion opposing that introduced by the Prime Minister on the official languages and their implementation. It was another story we heard during an electoral campaign. The Prime Minister was to solve the problem of Canadian unity by establishing bilingualism across the country.
Mr. Speaker, seven or eight years have passed and what are the results? Do Quebeckers or Francophones make a greater positive contribution to the administration of this country? No, Mr. Speaker. Indeed not. High officials are still almost exclusively Anglophones. The number of mid-level officials has increased by a few percentage points, but there would have been as many, and possibly more, without this legislation or this motion to implement bilingualism in this country.
Mr. Speaker, I suggest that these changes would not bring about any concrete results. Why? Because the government would rather ignore the real issue. The problem we are facing in Canada is certainly not linguistic in nature. We have about as much of a linguistic problem as the Irish would have trying to maintain their identity among the English. Mr. Speaker, although an Irishman is no Englishman, there is nothing preventing him from using English as a vehicle for his thoughts here in Canada. The problem has nothing at all to do
Criminal Code
with linguistic considerations. It is as painful to be laid off in French as it is in English.
The problem is essentially national. French-speaking Quebeckers want to be involved in the activities of Canadian society as equals, not as second class citizens. And there can be no justice in Canada without equality. In 1978, Mr. Speaker, it is about time people understood this basic idea. As the elected representative of the Champlain riding, Mr. Speaker, I am not suffering from any sort of inferiority complex, and I stand here after following in the footsteps of thirteen generations of Canadians who were among the very first to come to this country.
Mr. Speaker, I never asked anybody permission to speak my language, and I wish I never had to ask whether I could be tried in my language if I were outside Quebec. Those are the facts, Mr. Speaker. Quebeckers are no longer satisfied today with band-aid or emergency solutions to hinder the emancipation and the self-fulfilment of Quebec. Everyone in this House, whether from British Columbia or Newfoundland, should be glad to see the founding pioneers of this country developing voluntarily, positively, in order to bring about in Canada a new vitality, new advances, merely with the recognition of their equal status.
Now, Mr. Speaker, of course I would find it absurd to demand a trial in French in an exclusively English area. That would be absurd, ridiculous. I would also find it ridiculous that someone demand a trial in English in Trois-Rivieres or Cap-de-la-Madeleine. Let us be logical, let us use common sense and recognize the need to reform this country by granting each of its geographic and demographic entities the autonomy and self-determination each one needs to be able to free themselves and develop as they see fit. Let us not try to force French upon British Columbia; it is as ridiculous as to force English upon Quebec City or Trois-Rivieres.
Let us not try to go against the most elementary judgments of people on the pretext of creating an artificial national unity. Mr. Speaker, let us recognize that Canada is vast enough to be made into distinct and independent entities which would be able to bring together a new country, but this time a country meeting the needs of its inhabitants. And so Quebeckers would not have to intrude into the internal affairs of British Columbia and people from the prairies would not have to meddle in Quebec's affairs, and then we would have a united Canada.
Mr. Speaker, the Prime Minister has been posing for years as the champion of Canadian unity, as if unity or harmony in this country depended only on the ideas of this man. Mr. Speaker, he has been proving to us for ten years that his concept of Canadian unity has led to the imbroglio, the muddle, the chaos we now see in this country. That is why it is high time we woke up and considered first of all not the constitutional alternative of a thrill-seeking Prime Minister but rather the true interests of the Canadian people, and

May 4, 1978
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whether these interests lie in giving each part of the country all the prerogatives it needs to develop in harmony. Mr. Speaker, this does not mean hating everybody, but simply to accept an elementary principle of freedom, of brotherly equality, and to realize from the very beginning what we need to create in this country is such a climate that the whole world would be impressed. Mr. Speaker, it is on these principles that we should base our decisions as far as the constitution is concerned.
As a Quebecker, I do not have to wonder how people in British Columbia or in the prairies should solve their problems. They know much better than I do if it is sensible or possible to have trials in French in Vancouver or in Victoria. Mr. Speaker, that is not where the problem lies. It is at the regional level that these rights and privileges must be determined, it is up to each region rather than to the federal government to determine them. That is why even though this piece of legislation would seem to correct certain century-old anomalies, it would have been fairer to ask the provinces to legislate so as to ascertain their requirements in the light of their own needs and capabilities.
So, Mr. Speaker, even though I certainly agree with this action, I disagree that we should blind people to the facts and that the government should use this bill which was railroaded, which was even prepared in a rush, this legislation I repeat, which was drawn up in English in order to protect the rights of the French people.
Mr. Speaker, here we are in 1978, on the eve of the referendum that will determine whether Quebec can go, and therefore Canada, and a timorous effort is being made to solve problems in a way that may not be the right one. Mr. Speaker, like everyone else, I bank of course on the good will of the provinces to implement this proposal, but as others have said before me, nothing will change if it only stays on paper, and nothing will change either if we do not go from those findings to seek out solutions that get to the root of the problem; when time is ripe for a new Canadian constitution, then it should be done by giving the word "constitution" the etymological meaning it can and should have; then, Mr. Speaker, we will have created a new country, a country in which each of its parts can develop without stirring envy, jealousy or hatred. That must be our aim. If this bill only forces individuals to implement something that is more or less logical-as I said before, though I am Francophone and proud of it, I would never dare be senseless enough to the point of ordering a trial in French in Victoria or St. John's Newfoundland. Then it is ridiculous, stupid. So, if an attempt is being made to have us believe that this can be achieved, Mr. Speaker, things will turn out the way did with the policy on bilingualism the right hon. Prime Minister (Mr. Trudeau) wanted to adopt: it has not progressed one inch. Why? Because the problem in this country is not one of language.
The problem in Canada is a problem of equality, of participation; if French Canadians or Quebeckers felt they were

really participating in the progress of their country, Mr. Speaker, there would never have been talk of separatism, of independence or anything else. But as French Canadians have always felt like poor relatives, this is what we have come to. That is why we must now see things as they are, we must not be afraid of seeking and finding solutions that are indicated while respecting the freedom of the individual. Mr. Speaker, I hope my words will not fall upon deaf ears. I hope they reveal the very special concern I have about solving the Canadian problem, but of solving it in its true dimension, that is that of the individual.
Mr. Speaker, if I were to ask the President of the Privy Council (Mr. MacEachen) how many bills are originally drafted in French, I would be curious to know the answer. Over 95 per cent of the bills initroduced in the House are the work of people who think exclusively in English.
If the bills introduced in the House are always translated instead of being drafted for the French Canadians from time to time, Mr. Speaker, if I can get a reply to that question it would be easier to understand what goes on in Quebec, because translation is not enough and it is not enough either to grant certain things, because it is done at the United Nations in five languages. That does not turn a Chinese into a Russian or Russian into an American. As I said, It is not a matter of language which is merely a side issue. Irishmen are Irishmen and they resent being told that they are Englishmen. It does not prevent them from speaking English. French Canadians as well could have used English as a means of communication. It is not a linguistic problem, Mr. Speaker. The problem is one of participation. We want to have our share of responsibility and when nearly all activities in this House are conducted in terms of a mentality which is alien to what I am and to what Quebeckers are, that is where the problem lies. And that is why, if we want to correct this situation, we must simply give equal rights to the French-speaking citizens of this country. This is the problem and we will have to deal with it and solve it together one day, otherwise Quebec will do it unilaterally.


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


Some hon. Members:: Question!


Stanley Ronald Basford: Mr. Speaker, because of the speech of the hon. member for Palliser (Mr. Schumacher), will you please call the yeas and nays?


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


Some hon. Members:: Yea.


The Acting Speaker (Mr. Turner):: All those against will please say nay.
May 4, 1978


Some hon. Members:: Nay.
And more than five members having risen:


Stanley Ronald Basford: Mr. Speaker, I understand from my colleague, the President of the Privy Council (Mr. MacEachen), that if there were a vote it would be deferred until Tuesday.


Ramon John Hnatyshyn: I am not aware of any such arrangement. Maybe we could take the matter under advisement and carry on with the next item of business in the meantime.


Stanley Ronald Basford: Mr. Speaker, I understood it was the position of the House leader of the official opposition that if there were a vote it would be deferred until Tuesday. However, if the official opposition is ready to vote now, and if my understanding was inaccurate, we shall take the vote right now.


Mr. Speaker:: There has been a suggestion that if there is to be a recorded division-


Mr. Paproski:: Call in the members!


Mr. Speaker:: Call in the members.


Mr. Speaker:: I therefore declare the motion carried.
Bill read the second time and referred to the Standing Committee on Justice and Legal Affairs.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: It being after 5 o'clock it is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Vancouver South (Mr. Fraser)-External Affairs-Negotiations on proposed flooding of Skagit Valley, B.C.; the hon. member for Churchill (Mr. Smith)-National Research Council-Proposed removal of employees from Churchill, Manitoba; the hon. member for St. John's West (Mr. Crosbie)-Fisheries-Repair of foreign vessels in Canadian shipyards-Government policy.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, on a point of order-


Mr. Speaker:: Order, please. Before seeing the hon. member for Grenville-Carleton on a point of order, we have what remains of the private member's hour and we also have procedural argument on a motion to be taken on the next order of government business which, I believe, is the CNR recapitalization bill. I wondered if the House might want to consider if it is appropriate to use the time available for private members'

May 4, 1978
Business of the House
hour-which is in a sense unfair to the proponent of the measure to be debated-and rather than calling it 6 o'clock we might use the time to take the procedural argument on the motion, if it is going to occur. The House would then know whether to proceed with that motion at 8 o'clock or another motion on the same bill.


Walter David Baker: Mr. Speaker, on the point of order, I wanted to speak with respect to a matter that was raised just before the bells rang by the Minister of Justice. The minister indicated that there was an agreement between my friend, the government House leader, and myself, with respect to deferring a vote on Bill C-42 to next week. As a matter of fact there was an agreement with respect to deferring a vote, if any, but that agreement was with respect to Bill C-17, through a discussion we had across the floor. I just want to make sure that my friend, the Deputy Prime Minister, was not embarrassed by that misunderstanding.


Allan Joseph MacEachen: Mr. Speaker, I obviously misunderstood the hon. gentleman because the conversation was conducted across the aisle. I told the Minister of Justice that the arrangement had been made with respect to the bill we have just dealt with, so certainly the Minister of Justice can be absolved of blame. It is my fault, and I accept the blame very humbly.


Mr. Speaker:: Order, please. If there is not a disposition to proceed with private members' hour, I wonder if I might have the consent of the House to call the next government order and deal only with the procedural aspects of it.


Walter Gilbert Dinsdale: Mr. Speaker, on a point of order, I am a little uncertain as to what your wish is, or the wishes of the House are, with respect to private members' hour. I am ready to proceed if it is the wish of the House, as I think it is an important issue.


Mr. Speaker:: Order, please. There was no question of setting aside any intended business in private members' hour. If business is ready to go ahead in private members' hour it takes an absolute priority and ought to proceed. The procedural matter in respect of Bill C-17 will take place at 8 o'clock, and the House will now move to consideration of private members' business as listed on today's order paper, namely, private bills, notices of motions (papers), and public bills.
Is there any agreement about taking the motion in the name of the hon. member for Brandon-Souris (Mr. Dinsdale)? Is it agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed, and so ordered. Without prejudice to the priority of other items on the order paper the House will proceed to consideration of motion No. 51 in the name of the hon. member for Brandon-Souris.


PRIVATE MEMBERS' MOTIONS FOR PAPERS
Walter Gilbert Dinsdale: That an order of the House do issue for a copy of the recommendations compiled in conjunction with Hay Associates Limited report concerning the management of the Post Office Department.
He said: Mr. Speaker, the motion that is before the House this afternoon is one of a series in connection with the tabling of documents that deal with the ongoing problems of the Post Office Department.


The Acting Speaker (Mr. Turner):: Order, please. I would suggest to hon. members that they continue their conversations out behind the curtains.


Walter Gilbert Dinsdale: The series of reports have been put out by Hay Associates Limited, which is an American based company which gained a rather formidable reputation with respect to postal affairs because of its excellent studies and reports conducted in the United States. The post office department in the United States in the last decade or so has been going through problems similar to those of the Canadian Post Office Department, and Hay Associates, a consultant firm, were hired to prepare reports which were used as a basis for a thorough-going reorganization of the U.S. postal system. As all hon. members are aware, the reorganization involves the depoliticization of the U.S. postal service, removing it from direct political contact. If we think that our Post Office Department has been involved in politics, I am sure we have to conclude that it was much more so in the United States.
Notwithstanding the deep involvement in the political process at the patronage level of the U.S. postal service, the congress of the U.S. took action based on the recommendations in the reports of Hay Associates and also based on a series of studies and reports which came out of the congress itself. The post office administration in the U.S. was restructured in the form of a public corporation similar to what we in Canada would call a Crown corporation. At the same time, as I have indicated, the Canadian Post Office Department was experiencing similar problems and Hay Associates were hired to conduct a similar series of studies.
The difference between the U.S. experience and the Canadian experience is that the U.S. post office department responded to the advice and recommendations in the Hay reports, whereas in Canada there has been no response whatsoever. The reports still remain buried in the bosom of the Post Office Department, all marked "confidential." The reason that I and other hon. members have been endeavouring to gain access to these studies is the urgent necessity for action on the part of the Canadian Post Office Department. The change came in the United States during the early part of the 1970s. We are

May 4, 1978

now into 1978, and there has been no remedial action on the part of Canada's post office.
As I have indicated, when we discussed this subject some two weeks ago with respect to my motion No. 53, it is inevitable in circumstances of this kind that documents which are really in the public interest tend to leak from the departmental sources. Most of these Elay Associates reports are public property now, even though the Post Office Department still carries on the subterfuge that these documents are highly confidential and it would not be in the public interest that they be released.
Let me refer to some information which is available in these reports which, if the recommendations had been acted upon, would have long ago started the process of reform in the Post Office Department. We are now so late in the process that even postmasters general have been saying that if something is not done soon, the whole Post Office Department might be destroyed by the weight of its own incompetence.
As a result of the Hay Associates reports, an internal document was produced by one of the assistant deputy ministers of the Post Office Department. Among the many recommendations was the following very significant statement, and I am quoting now from page 4 of the so-called Uberig report, section 7, entitled "The Post Office Act". It reads:
Finally the Post Office Act itself seems outdated in certain respects and overly inhibiting. The process whereby parliament sets first class letter rates acts as a protection that over-zealous officals will not raise rates out of proportion to needs and service.
Perhaps I should interject here to say that this is at least an indication that in some parts of the post office administration they can only raise rates by amending the Post Office Act. The report goes on to read:
However, it also stymies deserved and needed rate adjustments by subjecting any proposals to the political arena.
The Postmaster General (Mr. Lamontagne) has got around that now. He just ignores the Post Office Act and goes merrily along his way raising rates at random without any restrictions under the Post Office Act. The quotation continues to read:
Attempts to modernize our authorities and freedom to respond to today's operating demands through legislative change have similarly been thwarted. For several years the government has not considered changes to the Post Office Act as having sufficient priority or being timely to debate in the House. Therefore, although times and needs have changed, post office legislation has not kept pace and deficits pyramided.
That document is dated August 11, 1975, some three years ago. Had it been acted upon, we would be well on the way to solving some of the mounting problems in the Post Office Department today. It might be coincidental that the Hay Associates were hired quite soon after the report of the assistant deputy minister was prepared. The Hay Associates document is dated December, 1975, so it went into operation quite soon after than and came up with a series of recommendations which are quite positive and would, I am sure, if they were acted upon, and if the high priority suggested in the Uberig document with respect to legislative changes had been accepted, have carried the Post Office Department along the road of reform at the present time, just as they did in the
Post Office
United States where they proceeded to grapple with their problems in a positive way.
There are still many problems, as the Postmaster General says from time to time in the House in response to questions. He says that the post office department in the United States is in a mess. Well, it might be in a mess, but if that is so, the Canadian post office system is in a greater mess because there has been no attempt at reform up to the present time.
Hay Associates operated on the basis of a 50-point questionnaire which was based on the experience they had gained in their examination of the United States postal service. Some 5,500 employees completed the questionnaire. Here are some interesting observations:
The Post Office is the most visible and universal area of government service to the general public.
That is why the report, in a later conclusion, notes that it is the most visible department in parliament as well.
There are more questions asked and more criticisms raised with regard to the post office than any other government department. That alone reflects the public concern expressed through complaints and criticisms from the elected representatives of the people. It should have been sufficient to encourage successive postmasters general to take some urgent action. Here is another interesting observation:
Departments performance reflects, to some extent, on the government of the day.
That almost goes without saying. This is an interesting report. Very often problems in the post office are laid on the employees. Hay Associates found, and I quote:
Group generally favourable impressed by the calibre and dedication of the people. As a group employees are highly committed to the P.O.
Perhaps I could add another reason for their declining morale and growing frustration at both the management and worker levels. It is because of the failure of the government to act to remedy obvious difficulties in the Post Office Department. It is not a very happy experience to work for an agency of government that has become the butt of jokes across the country. This was also referred to in this study, and I quote:
Majority feel very keenly the public criticism levelled at them from every direction. Embarrassed at image the P.O. has acquired of being an arena of union unrest and employee-management confrontation.
That is very good advice, yet no action has been taken to remedy the situation. Here is another interesting observation:
Most overriding problem over past several years is that of employee-management relations. Issue consumes disproportionate amounts of times, at the expense of other important areas of management.
It also notes that the post office is an extremely complex organization to manage. The Uberig report points out that there are no fewer than seven different government departments involved in post office administration. It refers to the Public Service Staff Relations Act, the Public Service Employment Act, the Financial Administration Act, the Public Works Act, the Supply and Services Act and finally the Post Office Act. Here is another interesting observation:

May 4, 1978
Post Office
Higher levels of management were generally critical of the deputy's preoccupation with labour problems. This preoccupation has resulted in poor management.
In other words, if you have a situation of confrontation between labour and management in the post office, you become completely absorbed in that difficulty. Other areas of concern must of necessity be neglected. Another statement reads:
Advisory Committee agendas are laden with petty issues (committee composed of deputy, assistant deputies and regional general managers).
Because of the confrontation in the post office and the thousands of grievances that constantly overwhelm and threaten to absorb completely the attention of the higher level of management, the more important issues are obviously neglected. It also makes the point that postmasters general are changed too frequently. That is a very good observation. Another point:
Political prominence of the P.O. in each community ensures a high degree of parliamentary and public interest in its operations.
Over past five years (1970-74) the P.O has consistently been the subject of more parliamentary questions than any other major government department or agency. Monopolizes the attention of top people.
Here is the essence of wisdom:
Significant departmental organizational adjustment is essential to correct the deficiency.
It is a marvellous report. If it had been made available to members of parliament, it would have assisted in the process of discussions from the standpoint of knowledge rather than the facade of secrecy in which the post office has attempted to shroud itself. If there is ignorance of what is going on, imagination outraces the actual situation.
As a result of this presentation today, I hope the Postmaster General, who is in the chamber, will be persuaded to table the document so we might get on with the job of constructive criticism and reorganization. The report deals with the decentralization issue. I have received a lot of complaints from postal workers across the country about this particular area. It states and I quote:
It was intended that there be a reduction in employees from a level of approximately 1300, which existed at the beginning of decentralization, to a planned 400-600 on full implementation. Regional offices were also expected to be comparatively lean in man-years, comprising some 30 functional experts. Five years later the headquarters man-years budget had been increased to approximately 1900; the regional offices had virtually quadrupled in size.
This is a complaint I get from the workers. The Post Office Department is top heavy at the management level.
District offices increased significantly,


Stan Darling: Too many chiefs and not enough Indians.


Walter Gilbert Dinsdale: That is one way of putting it.
Increases generated by addition of new areas of expertise such as industrial engineering, mechanization, language training, etc. Introduction of new functions at lower levels seemed inconsistent with the original concept of decentralization.
Since 1971-72, when decentralization first implemented, costs and man-years have risen much more rapidly than mail volumes, stimulating the departments deficit to a record level.
The organizational concept which was introduced also appears to have been notably divisive.
Decentralization created communications problems.
Study group not persuaded that regionalization is synonymous with decentralization and that the existence of four regions is desirable.
I could go on for some time reading the constructive observations of the Hay report. It made some interesting observations in the area of marketing. I quote:
The majority of marketing programs are seen as being at best non-compensatory and, at worst, sources of heavy financial losses.
Marketing staff are uninformed about postal operations.
Postpak-the service cited most frenquently by marketing as being a notable achievement-was consistently and forcefully criticized by line managers across the country.
A serious communications problem exists within the organization as to the role and contribution of marketing.
Another point raised from time to time is getting trained personnel at the supervisory level, particularly those who are going to be in direct contact with the shop stewards on the floor. The report makes the following criticism:
New supervisors are frequently expected to make what is virtually an overnight transition from mail clerk to supervisor without even basic indoctrination in contemporary management techniques.
Here is one of the major problems. Instead of trying to solve difficulties in industrial relations on the floor of the plant, as is the technique in modern industry-


The Acting Speaker (Mr. Turner):: Order, please. The hon. gentleman's time has expired.
[ Translation]


J. Gilles Lamontagne: Mr. Speaker, I wonder why I bothered to come to the House this afternoon, since I will waste valuable time answering questions which have been submitted months ago.
I will repeat for the hon. member the answer I gave on April 6, and then I will add some remarks on his comparison between the recommendations of the Hay report and the situation that prevails in the United States. The Hay report consists of a confidential survey of what some management officials think of postal services. The objective of the report was to collect the opinions of different heads in various business enterprises across the country.
Some 5,870 directors of business enterprises were asked to answer a questionnaire frankly and honestly. The respondents had been given the assurance, that their answers would remain confidential. If I were to reveal today the content of the Hay report, I would be breaking this confidentiality commitment towards the respondents. That is why I regret to inform the hon. member that it is impossible for me to reveal the content of this report, first because of its confidential nature and second because it was authorized only for internal distribution.
I hope the hon. member will understand my position. This report was an assessment of a number of postal services. To

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reveal the names of those services would only demoralize even more the postal workers assigned to these services. Besides, this study was conducted in 1975, so it is already nearly three years old. Corrective measures have been taken since, therefore the current situation is somewhat different. We are in 1978, Mr. Speaker.
Some of the recommendations in the Hay report require, in some cases, very drastic changes. By revealing these recommendations, we would only create concern and anxiety among the employees who would start asking themselves questions such as: Will I lose my job? Will my promotion opportunities be reduced? A conflict might arise between the various services, which would only contribute to lower the morale of the staff.

Mr. Speaker, I do not know what the hon. member is getting at. I wonder if he is serious when he asks the same question twice, three times, even. This is the second time he asks the question and he knew the answer before I gave it. I answered him on April 6, 1978, as reported at page 4,215 of Hansard. I get the impression that the hon. member is more interested in downgrading the post office by his questions and interventions-of course, to political advantage-than in working constructively to better the image of the post office, its workers and management.
[ Translation]
Furthermore Mr. Speaker, why come back to a report published in 1975 when we have one which is recent?

The hon. member compares the Hay report to some of the reports in the U.S.A. He told us how efficient and how perfect was the United States post office.


Walter Gilbert Dinsdale: No. they have problems, but they recognize them.


Mr. Lamontagne:: For his information, so that he can tell his constituents how the post office is doing in the United States, I will give him some of the reports I have from 1978, not from 1975. The Liberal party lives in 1978, it does not live in 1975. Three years have passed and problems have changed since 1975.


Walter Gilbert Dinsdale: You can say that! We have gone downhill.


Maurice Lamontagne: I should like to mention something to the hon. member for Brandon-Souris (Mr. Dinsdale) which he will recognize, I think, because apparently he might have some part of the Hay report-he indicated that maybe he had it, I don't know, but I would like to read this to him:
Both the U.K. and the United States have moved in the direction of Crown corporations for their post offices. Neither country seems to have solved its problems. They have experienced greater rate increases and larger deficits even than Canada.
The hon. member for Brandon-Souris must, surely, remember reading that passage.
Post Office


Walter Gilbert Dinsdale: I was over there last week and I read it.


Maurice Lamontagne: 1 will read, too, from an article which appeared in the Wall Street Journal in 1978, not in 1975. This is what it says about the actual situation of the post office in the United States. The date is January 4, 1978:
The new postal agency was designed to be run by professional managers, immune to political pressures. It has become clear after seven years of experience that this idyllic arrangement doesn't work.
Here is another citation, this one from the Washington Post dated March 22, 1978-not 1975, the year mentioned by the hon. member. We are in 1978 now, don't forget.
Postal officials who are trying to run the United States post office like a corporation say they must be allowed to automate certain operations and initiate a number of other economies which will eliminate jobs. The U.S. post office has already asked permission to raise the price of a first class stamp this year from 13 cents to 16 cents.
Mr. Speaker, ours will be the lowest rate in the world when they have raised their rate to 16 cents.
Legislation now before the House will revamp the United States post office and dramatically increase taxpayers subsidies to hold down rates and stave off service cuts.
The post office is a Crown corporation there. Is that what you want us to become in Canada? I cite another United States newspaper. Again, the date is 1978:
The U.S. postal service set up as a government corporation in 1970 under the postal reorganization act which transformed the post office from a public service into a so-called public utility, has failed and is dead.
We on this side are much more progressive and we want to live with the problem in 1978. At the moment we are in the stage of conciliation with CUPW. It is going smoothly.


Walter Gilbert Dinsdale: Preserve the status quo!


Maurice Lamontagne: We have a study group set up which will look intelligently at this issue and not necessarily affirm that we want a Crown corporation at any cost.


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


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
[Stage Direction]
May 4, 1978
Railway Act


[Stage Direction]
The House proceeded to the consideration of Bill C-17, to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in consequence thereof, as reported (with an amendment) from the Standing Committee on Transport and Communications
Mr. Speaker:: Order, please. There have been some indications of a procedural argument with respect to the first motion in the name of the hon. member for Winnipeg South Centre (Mr. McKenzie).


Otto Emil Lang: Mr. Speaker, 1 did want to raise a point of order in connection with the first motion standing in the name of the hon. member for Winnipeg South Centre (Mr. McKenzie). The motion deals with a matter which has frequently concerned hon. members in dealing with pensions, a matter which is negotiated from time to time between the railway and the unions representing the workers in the railway, and from that point of view there might be much interest for hon. members. But it does seem to me that there are two points against it in terms of its being presented to the House at this time. One is that it is completely foreign and strange to the bill itself, which does not deal with the issue to which the amendment directs itself. Therefore, it seems to me to have problems of relevance.
Second, and very briefly, it seems to me that it is clear that the motion fails at this point because of the financial implications involved and the requirement that would be present for a royal recommendation. The amendment appears to require the spending of certain sums by Canadian National, a Crown corporation which is wholly owned by the Government of Canada, and the debts of which are significantly held by the government. Some of those debts are guaranteed by the government, and in that way the proposed amendment involves quite a direct implication financially for the government and for the consolidated fund.
It seems to me, therefore, that on both those grounds the proposed amendment does fail.
I do not propose to raise a similar point of order with regard to the second motion. It is probably closer to being all right on grounds of relevance because it deals with a section which also deals with auditors. On one reading it might be thought to involve some additional expenditure, but I would say that that, at the very least, would be extremely minor because it is a practice which is not uncommon at all with the railway which is here being embraced. Indeed, the second motion is a motion which I probably can for that reason support, even though it adds very little. However, I think the first one does fail on the grounds of relevance and of involving expenditures of funds which have a direct relationship to the fisk.
[The Acting Speaker (Mr. Turner).]


Mr. Speaker:: The hon. member for Winnipeg South Centre will want to argue, I am sure, in support of the procedural regularity. I read his motion as adding to the proposed clause 2 on page 3 some language which would require that the financial statement, as it were, of revenues of the CNR be altered so as to accomodate whatever payments would have to be made by the company to the pensions of former CNR employees or, as the hon. member has put it, to the equalization of benefits for CNR pensioners. Obviously if it did not require a payment, the hon. member would not have put the motion. Since it will require a payment, it may cause difficulties. In fact, if some other revenues have to be subtracted from the total financial picture of the CNR, obviously the public treasury will have to make up the difference.
The other matter to which the hon. member will want to address himself is that the final financial picture, as I read clause 2 on page 3 of this amending bill, is determined first by totalling the revenues or the earnings of the national system, and then subtracting those payments which are required by section 9 of the parent act. After that, the balance remains in the hands of the company. The effect of the hon. member's amendment would be to change that, so that an additional charge or obligation would be placed upon the funds which would be called earnings in the system. An additional obligation would be placed on those funds. If that is going to be done, I am wondering whether it should be done by way of an amendment to section 9 of the act and not to this clause of the amending bill.
Therefore, those are the points I want the hon. member to argue.


A. Daniel McKenzie: Thank you, Mr. Speaker. As I understood the Minister of Transport (Mr. Lang), he indicated that he would accept the second motion. I will be able to make my contribution and raise all my points as to why the two motions have been presented when the second motion is debated. Will Your Honour be making a ruling on the second motion tonight, and then we will enter into debate on that motion?


Mr. Speaker:: No, I see no difficulty in respect of the second motion. The second motion raises some concerns which are not serious enough to set it aside on procedural grounds. The minister has indicated that motion will raise some possibility of additional expense in terms of an auditor or an auditing practice. It is not of such a major nature that anyone would consider it to embrace the kind of financial initiatives which would require royal recommendation.
I think the hon. member is inviting me to make a ruling on this motion now. Any ruling I would make on his first motion is without prejudice entirely to his ability to argue on his second motion which may be accepted. Nevertheless, even if it is accepted, certainly he will be provided with a chance to make a contribution at that time.
May 4, 1978

Clause 2 on page 3 of the amending bill reads as follows:
For the 1977 fiscal year, any earnings of the national system remaining after payment of the amounts described in paragraphs 9(1 )(a) to (c) of the Canadian National Railways Capital Revision Act as they read immediately prior to the coming into force of section I shall be retained by the national company.
The hon. member is seeking to add to that the idea that those earnings shall be retained by the company after a further charge; that is, a charge which will be made for the purpose of equalizing pension entitlements for all former CNR employees. In other words, the hon. member is putting forward that an additional charge will be made on the earnings of the system before the final financial accounting is laid in the hands of the national company. In fairness, I think that introduces a new concept into this amending bill. In addition, probably on close analysis, it introduces a possibility of additional charges on the public treasury, which would require a separate royal recommendation.
I understand the motivation of the hon. member. He wants to improve the position of the pensioners. I think all hon. members applaud that initiative. However, if that is to be done, it seems to me the hon. member has an opportunity to present his arguments on behalf of pensioners through his second motion.
Furthermore, both of the arguments put forward by the hon. Minister of Transport seem to be valid. That is, this introduces a new concept, and if a further charge on the revenue earnings of the system is to be made, surely it must be made by way of an amendment to section 9 of the Canadian National Railways Capital Revision Act directly, so that a further obligation is placed upon the system or the company in those circumstances, rather than doing it by way of an amendment to this section.
Therefore, I have to accede to the argument that such an amendment would go beyond the scope of this particular amending bill, and it ought to be made by way of an attempted amendment to the parent act, the Canadian National Railways Capital Revision Act. Therefore, I set aside the first motion. Of course, it is entirely without prejudice to the right of the hon. member to argue now in respect of his second motion, which has no procedural difficulties.


A. Daniel McKenzie: That Bill C-17, an act to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in consequence thereof, be amended in clause 4 by striking out lines 31 to 36 at page 3 and substituting the following therefor:
"38.(1) A continuous audit of the accounts of the National Railways and
the pension fund of its employees shall be made by independent auditors
appointed annually by the governor in council and the auditors shall report
annually to parliament in respect of their audits."
He said: Mr. Speaker, your ruling is quite acceptable to me, because I can make my point when arguing on my second motion calling for independent auditors. This was recommended in the Hall report, which was a very expensive study that was conducted regarding railway pensioners. After the report was tabled, we find that practically nothing was done.
Railway Act
My reason for presenting the two motions in the first place was to bring this charade to a stop. The pensioners have been played around with. The two railways have had these great studies done. Representations have been made. The railways have been allowed to come before transportation committee meetings. Their main spokesman, Mr. Earl White, the national president of the Canadian Railways Employees' Pension Association, has made representations. Then we received rulings from the chairman of the committee indicating that nothing could be done. It is just a hoax. In fact, what is being done to pensioners regarding this problem is criminal. Many of those people are drawing pensions of $100 a month, pensions which are not indexed at all.
The railways are paying certain amounts per year, but there is no way for them to wipe out the $1,073 million which they owe the pension fund. Over the 43 years the fund has been in existence, they have not been making their proper contributions. If they had been, there would be no problem today.
As I said earlier, the Hall report recommended that there should be independent auditors. The way the fund is being handled and the manner in which money is being invested is absolutely disgraceful. The loss has been in the range of millions of dollars. I will deal with that in a moment.
Railway pensioners have not had too many friends on the government side of the House over the years, but apparently a friend has been found finally in the President of the Treasury Board (Mr. Andras). On March 9, 1978 he made a statement in the House respecting legislation concerning the indexing of pensions. As reported at page 3622 of Hansard, he said the following:
Mr. Speaker, I want to take this occasion to announce the government's intention to introduce legislation to amend several features of the public service pension program with respect to the indexing of pensions to changes in the cost of living.
This is what the railway pensioners were asking for. He continued as follows:
The amendments that will be proposed will apply to members of parliament, public servants, military and RCMP personnel, and all other individuals who are subject to the Supplementary Retirement Benefits Act.
Something should be done for these pensioners to ensure that their pensions are indexed. CNR pensioners are former public servants, and there is no reason in the world why a similar program cannot be implemented for them.
In addition, the President of the Treasury Board went on to
say:
Second, that the first indexing adjustment received by pensioners to be pro-rated monthly so that it only reflects the inflation that occurs after retirement.
This is very similar to what the railway pensioners are asking for, Mr. Speaker. The minister went on to say:
Third, that the current continuing commitment to index pensions fully with changes in the consumer price index be replaced by an arrangement under which cost of living adjustments would be determined on an ad hoc basis, three years at a time.

May 4, 1978
Railway Act
Railways pensioners are asking for similar arrangements, and this is recommended in the Hall report. That was the purpose of the Hall commission, to do something for pensioners, but nothing has been done. The President of the Treasury Board went on to state:
I want to say, Mr. Speaker, that the decision to propose that public service pensions be adjusted for changes in the cost of living on an ad hoc basis was only reached after considerable thought and soul searching on my part and that of the government.
The source of the dilemma-and that is what it is, a dilemma-centers around the responsibility the government has to both pensioners and taxpayers.
I can understand the dilemma of railway pensioners who receive $100 a month in the form of a pension which is not indexed. They have a real dilemma. The minister went on to state:
On the one hand, it is the government's view that the measures that have been adopted to protect the purchasing value of public service pensions are based on a sound principle. In the government's view, it is unjust and unfair to allow the rate of inflation to determine arbitrarily the real value of pensions, and that is exactly what happens when pensions are not adjusted for changes in the cost of living.
This is exactly the problem we have with the railway pension fund. The minister went on to state:
In short, the principle of maintaining the purchasing value of pensions so that pensioners can maintain their access to the same basket of goods and services is a principle to which the government is committed, and remains committed.
If the President of the Treasury Board can say that about pensions of retired civil servants he should certainly include railway pensioners, and that is why we must take some decisive action and stop giving them the run-around. The minister went on to say:
The government, however, is also committed to the principle that public service pension arrangements must also be just and fair in terms of their impact on taxpayers.
The railway pensioners are not asking for anything more than that to which they are entitled. The minister went on:
There are experts who feel we can count on seeing a long-term situation in which interest rates, on average, will be 3 per cent to 4 per cent ahead of the rate of inflation, and 1 per cent ahead of salary increases.
My motion calls for the appointment of independent auditors, as recommended in the Hall report, who could start investing the money more wisely, and not as it has been invested over the last 43 years. In addition, the President of the Treasury Board stated:
In recent years, of course, interest rates have not maintained a 3 per cent to 4 per cent margin over inflation and a 1 per cent margin over salary increases.
The minister then stated:
To achieve this goal, the legislation which will be introduced will require the President of the Treasury Board to carry out a triennial review of public service pension arrangements with advice from the chief actuary and in consultation with representatives of interested parties.
At the present time the CNR handles the total pension fund, and this is why we say it is unsatisfactory. The President of the Treasury Board also stated on March 9:
In developing the proposals which would be included in the proposed legislation I shall be consulting with my colleague, the Minister of National Defence (Mr. Danson)-because of the armed forces pension program-with the Solicitor General (Mr. Blais) having the pension interest of the RCMP in mind, and

with my own Public Service Superannuation Advisory Committee as well as with other interested parties.
How can we leave railway pensioners out of these discussions about appropriate pensions, Mr. Speaker? They are entitled to have their pensions reviewed and properly indexed. The minister then said:
Finally, I should like to assure hon. members that the whole public service pension program will be up for review upon the completion of the current actuarial evaluation of the program now being carried out by the department of insurance and upon the completion of the government's comprehensive review of the retirement income situation of all Canadians. The review will also take into account all the Findings of the consultants, as tabled today, and the detailed analysis of the Treasury Board secretariat.
We made the request at the Standing Committee on Transport and Communications in respect of railway pension programs that the government through the Auditor General conduct a full scale inquiry into the handling of the CNR pension fund. We found it very strange at the committee that the Liberal members organized to defeat our motions calling for the Auditor General to appear before the committee and to conduct a full scale audit of, and an inquiry into, CNR pension funds. Recent statements by the government that it is going to strengthen the Auditor General's department, and that there is to be more scrutiny of Crown corporations and government agencies, is apparently all window dressing. This was one of the first occasions that we put this to the test in the committee and they ganged up to vote this motion down. This gives a clear indication that this is nothing but window dressing.
It was also stated at the committee that the CPR pension fund should be investigated, and this was referred to in the Noel A. Hall report on railway pensions. I understand it is in a worse financial condition than the CNR pension fund.
I should like to quote from some of the statements made at the committee meeting of April 5 when we had the president of the pension union before us. I asked him the following question, and we were talking about investment of pension funds:
These investments you mentioned, have they been paying off? Have you considered them good investments, these mortgages and bonds? Also, it appears that the way we are going, and with inflation the way it is, a [tensioner will not be able to survive on his particular pension. This 2 per cent a year they talk about is nowhere going to cover them for inflation.
Mr. Earl White, president of the railway pension union, answered me by stating:
1 have something on that particular subject and it is the Hall report. Dr. Noel A. Hall on page 48 refers to Table II of the report.
... Dr. Hall has published CNR Pension Trust Fund Investments as at December 31, 1974. The book value and the market value of bonds of the CNR is respectively, $358.8 millions and $281.2 millions ...
These are round figures. I am just quoting the millions. Three hundred and fifty-eight million is the book value and two hundred and eighty-one million is the market value, which means that there was a loss position on that date of $77,600,000.
I certainly would not want the CNR investing my money, Mr. Speaker. This type of loss is very strange in this day and age of investing money. Mr. White went on to quote from the Hall report as follows:
May 4, 1978

The book value and the market value of stocks is respectively, $445.9 millions and $344.9 millions, a loss position of $101 millions on common stocks. The board of directors of CNR has appointed Investment Specialists ...
This is not Dr. Hall speaking, this is me ...
... to invest our pension trust funds. As at December 31, 1974, the loss position on these two types of investments was $178,600,000.
I am sure you must understand, Mr. Speaker, why we requested the Auditor General to do a complete audit as to what the CNR is doing with this pension fund. I find it very strange that the Liberal members of the transport committee could overlook something like this and vote against having the Auditor General examine this fund. It is very strange indeed. Mr. White went on to say:
No disrespect is intended or implied, but to paraphrase Dr. Noel A. Hall's statement quoted in item number 11 it is equally proper and reasonable for me to say ...
First I would like to read his quotation above. In regard to the $371 million removed from the CNR pension trust fund in 1969, Dr. Hall stated on page 132:
.. It is also true that changes in actuarial assumptions led to a reduction in the unfunded liability of approximately $371 million. I can only state to those who would believe otherwise that these changes do not in any way reduce the company's obligations under the pension plan ..."
This is quite true. The company was committed to pay pensions based on service and based on earnings. It does not matter how much money is taken out of the plan; the pensions are guaranteed by CNR. So CNR lost $178 million and I stated in our last annual report:
"I can only state to those who believe otherwise that these losses do not in any way reduce the company's obligations under the pension plan."
If the CNR cannot handle the pension fund properly, then my motion must be accepted. I hope the government will take action as recommended in the Hall report, that it be placed in the hands of independent auditors, people that we hope will act in a more responsible manner. Mr. White went on to say:
Dr. Noel Hall recommended in his report that the pension funds for CNR and CPR should be transferred to an independent Canadian trust company.
I pointed this out earlier, but that is just further evidence as to why we need an independent actuary. We also had minor support from the hon. member for Fort William (Mr. McRae), when he stated:
Which would indicate to me that they do not possess a great deal of competence in terms of investment management.
That, of course, is an understatement, Mr. Speaker.
I would now like to quote briefly from a document presented to me by the Canadian Railways Employees' Pension Association:
The CNR statement of assets and liabilities for the year 1976, and Note 4 the statement of long term debt seem to reveal the financial position of the company, however they fall short of doing so. As of December 31, 1976, CNR owes much more than one billion dollars to the pension funds for employees and pensioners, merely to ensure that these will have sufficient assets to meet the actuarial liabilities for accrued benefits.
The unfunded accrued actuarial liability which was not included in the statement of assets and liabilities of the company as at December 31, 1976 was $1,073,062,000. If it has been included the total of the liabilities would have been $5,471,113,000 instead of $4,398,051,000 as shown in the annual report of 1976. The annual report for the year 1977 is not yet available to our association.
You can see how it has been handled, Mr. Speaker.
Railway Act
I just want to read from another document that was presented to me on April 25. Mr. White stated:
"For the year 1976 the president of the company has reported that CNR made a profit of $10,000,000. The suggestion has been made that consideration should be given to changing the corporation from a Crown company to a public company so that shares in CNR could be sold to the public."
"If now you will examine Note. 8 appended to the CNR annual report for 1976, you will find that the increase in the "unfunded liability" recorded during the year 1976 is $264,042,000."
Their handling of this fund has been disastrous and independent auditors should examine the fund to take it right out of the hands of the CNR. I would like to point out what the CNR railway pensioners requested:
That all retired members have their pension benefits increased effective immediately to the level, such pensions would have equalled (including any post retirement increases) had the pension been computed at retirement on the same 2 per cent formula in effect for current retirees.
Of course, the independent auditor could examine this request and see if it is feasible. Most certainly, there has to be some kind of an increase and some formula for indexing the railway pensions. In point two they go on to say:
After making the foregoing benefit increases, there would be created with respect to each of these employer's retirement plans a separate retired life trust fund. This trust fund to be operated by a board of trustees having significant representation (preferably 50 per cent of total board) by retired members under each plan.
They are not being greedy and demanding. In the final paragraph of this letter I received they say that they are not asking for fully indexed cost of living pensions. They are being fair. The letter continues:
We are asking, however, that if inflation continues and this results in higher investment earnings on assets put aside for retired members then these be used to provide such retired employees' higher pensions to the extent possible. Whether such higher pensions will be adequate to offset inflation is another question.
The foregoing arrangement would end the present highly inequitable arrangement whereby retired members are subsidizing active employees and the employers (as a result of inflation). We ask not to be treated overly-generously, merely in a fair and equitable fashion.
They are not making unreasonable demands. This is a problem that has been with us for almost ten years.
The government has seen fit to have very extensive studies, reports and inquiries done, but after they are completed absolutely nothing happens. They deserve better treatment than what they have been receiving. I would ask the government members to look at the March 9 statement by the President of Treasury Board where he is prepared to see that all civil servants are going to be treated fairly and squarely. This is a legitimate request. I hope the government will see fit to act on the Noel Hall report and appoint an independent auditor to audit and manage the CNR pension fund.


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I do not find any particular difficulty in supporting the hon. member's amendment at the report stage. Not that it does any good. All it does is cloud the auditor's report on the pension plan with the auditor's report on the company and the company's annual report to parliament.
The tragedy is that hon. members from all sides of this House have been trying for years to find legal and parliamen-
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May 4, 1978
Railway Act
tary mechanisms to do something once and for all about railway pensions. Over the ten years that I have been here reading debates, and during the years which I was on the railway and listening to my father in the years that he was on the railway, the tragedy is that all of us are to blame for this. I blame railway management, railway employees, railway unions, and I blame successive governments.
I can remember as a member of the order of railway telegraphers in 1950 arguing at several union meetings that rather than striking and shutting down the country over the 40 hour week we should do it over the pension plan. I argued that every two years when we were bargaining with both major railways. I said that we should down tools until something significant, important and equitable was done about the pension plans. Some of the same employees and junior management people who now write to me as a member of parliament telling me how insufficient the railway pension is are the same people who disagreed with me in union meetings in 1952, 1954, 1956, 1958 and 1960. I suppose that is understandable. They were older than I and were more concerned about take-home pay than what was going to happen when they reached age 65. Of course, that is all water under the bridge.
I hope that in current and future negotiations the railway brotherhoods strike the railroads of this country, if necessary, on the issue of adequate, equitable and fair pensions for those who are already retired as well as those yet to be retired.
I am a third generation member of the railway brotherhood. After 32 years' service my father had to retire from the railway two years early because of illness. The company was very good about leave of absence and protecting his seniority. His pension was $44 per month. When he died at age 64 my mother received a pension of $30 a month, but when she reached the age of 70 the pension ceased. I will never forget her saying that when she was 70 was when she needed it most, not when she was 65. However, it was cancelled as soon as she reached 70. Bless her heart, she worked until she was 74 and that $30 per month from the CPR did not matter. How many hundreds and thousands of people, widowers and pensioners, across this country have had to go through that, Mr. Speaker?
The hon. member's amendment would provide only a better check on the bookkeeping of the railways. It would not do anything fundamental about a change in the direction and equity of railway pension plans.
Each year in this House and at the Standing Committee on Transport and Communications we have been able to pound and hound railway management and the government as a result of what appeared in the auditor's report. All the auditor can do, however, is check the books and say that everything is in order, but no auditor has the authority and probably not even the inclination to make recommendations on changes or improvements to pension plans. That is not within his mandate.
There is no harm in the hon. member's amendment and we can support it. I suspect that the Minister of Transport (Mr. 
Lang) will not feel uncomfortable with it mainly because it will not accomplish very much. At least it will provide another avenue for us to continue the battle about railway pensions year after year.
In committee I asked Dr. Bandeen, president of Canadian National Railways-and I think I asked the Minister of Transport as well-why we did not amend this to add $1,063 million of transfer of provision of capital or cash by the people of Canada to Canadian National Railways and that way immediately fully fund the pension plan. Instead of Canadian National Railways taking until the year 2027 to pay in the money that they owe to retired and working employees, they would owe the money to the Government of Canada and have to pay it on the same scale as they are paying to the pension fund. They would have to pay it back to the government. This would immediately fully fund the CNR pension plan. As I recall, Dr. Bandeen said he did not think it would make any difference whether this is fully funded now or in the year 2027.
I do not think he is right, Mr. Speaker, but even if he is, it is none of his business. That money belongs to the pensioners and the employees of Canadian National Railways and to nobody else. In fact, if the pension fund were fully funded now and Canadian National found that it needed capital for expansion or improvement of the system, they could borrow from it. That might reduce the amount they would have to borrow in other markets and they could pay the same return to the pension plan.
The other thing that must happen with the fully funded pension plan is that there be a majority representation of employees and pensioners on the board of directors. That must come about, Mr. Speaker.
When the railways deduct the 6 per cent or 7 per cent of whatever it is from each employee's pay cheque every month, that amount is set aside in trust in the fund. The company's equal contribution is not deducted, however. The railways show that as part of their costs of labour; it is shown as a deduction in the cost of operation and as a deduction for income tax purposes, but they do not put the money into the pension plan. Each year they obtain at least a tax benefit on their legal, contractual obligation-their share of the employees' pension plan which they keep. In less polite circles that is called stealing.
This legislation should pass quickly and allow the CNR an additional $1,063 million to fully fund the pension plan. In fact, perhaps we should throw in another billion dollars for the CPR unfunded liability in their pension plan. Then the railways could repay the government immediately rather than taking 60 years to repay the pensioners and employees. Surely that would be far more sensible and equitable and even common justice.
If this amendment is accepted we will get a good report on the pension plan from the auditors, but they will not be inclined to make improvements on the benefits for pensioners. They are not hired to do that. At least it would provide an opening for members on both sides of the House to make their annual representations about railway pensions.
May 4, 1978

I understand that the railway brotherhoods have been negotiating in the past year not only on their own behalf as employees but that they are also endeavouring to negotiate improvements in pensions of retired employees to the extent they are prepared to contribute a small percentage out of their pay. I wish members other than members of the Privy Council could make amendments under the rules. That would make the House sit up and take notice and maybe do something about a problem that has been around since the middle of the 1930s.
The problems for those who are on railway pensions are more severe now than they were in the 1960s. A $200 pension that a pensioner received on his retirement ten years ago is worth about $40 now after he has been on retirement for ten years. Whatever the ills or errors in the 1930s and the 1940s, surely it is within our power to correct them now, if for no other reason than common decency. Surely this parliament could say to CNR that for the next X number of years we will forgo the legislative requirement that 20 per cent of their net earnings shall be returned to the national treasury and that money will go to fully fund the CNR pension plan. Surely we can say also to the shareholders of Canadian Pacific that if their dividend is $2 a share this year, they will get only $1 and that the other $1 will go to fully fund the Canadian Pacific pension plan.
Surely there is something immoral about a corporation, be it public or private, capitalizing itself by taking income tax deductions off the backs of its pensioners and out of money that does not belong to them. The money belongs to the pensioners; it is their money and they have a right to administer it, invest it, to have a majority on the board of directors and to make their decisions through the board of directors, through their pension associations, and through the railway brotherhoods. I do not know of any other kind of fund the money of which is kept by someone else, invested and spent by someone else, and over which you have little or no say. I am sure, Mr. Speaker, that if you were to try that in other financial operations, you would be called to court and sued out of town. Yet we allow this to go on.
Let us accept the hon. member's amendment and we will hear the auditor's reports orf the pension plan, but what the hell will that do to enable us to make a fundamental change in the funding, the direction and the control of pension funds which belong to the pensioners and the employees? They do not belong to anybody else.
I remember one time at a meeting of the transport committee in 1971 when I asked an actuary what would happen if we gathered up all the public and private pension plans in Canada and put the money into one fund, thus ending all the duplication and red tape, all the computer set-ups, and insurance arrangements. I asked him what kind of a pension would people then have out of such a fund. This was eight years ago at least. He told me that, off the top of his head, this would provide, generally speaking, a pension of about $1,000 a month at the age of 60.
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If there is any kind of social endeavour which all hon. members agree to and support, it is the matter of adequate and equitable pensions, and yet it has been so misused, betrayed and undermined. We could have indexing of pensions also if we placed our priority on people, not profits. This parliament, like many before it, will pass up another opportunity to do something once and for all about pensions for our railroaders. One could pick a lot of other occupations and institutions in this country where the matter of increasing pensions is long overdue as well, but pensions for railroaders is the best subject to debate because the debate about it has been going on for so long.
I hope the minister will accept this amendment and that we will go on to third reading of the bill, but I also hope that my friends, particularly my friend who has moved this amendment, will think beyond an auditor's report and realize that an auditor's report in itself will not be sufficient to bring about these fundamental changes. It may be helpful and will at least provide a vehicle for us to confront once again the management of both railroads, the boards of directors and the minister of transport, whoever he might be. We have been confronting them for 25 or 30 years, and where did it get us?
We did get some changes when the Standing Committee on Transport and Communications held hearings from coast to coast in 1970 and 1971. Finally, we got a 2 per cent escalation back for 20 years, and we raised some railway pensions from $20 to $40 a month. Big deal! It took one year or more of hearings, then it took another year of pushing and forcing the railroads to accept the report which was unanimously approved in this parliament, before they finally made those modest improvements for those already on pension.
We can all sit around here in comfort, but let us not forget the ones who retired ten years ago with $180 a month, which is now worth only about $40 or $50 a month in terms of purchasing power. They are the ones to whom we owe that money. They earned a decent wage and they need this money to live out their last years. They have made their contribution to this country. Why is it that we cannot get through to whoever is the government? I will not be partisan about this and try to pick on any one party; we are all to blame. We mess around with nitpicking amendments about auditors which will not change anything. It will enable the hon. member who moved the amendment, myself and others-if we are all still here next year-to raise a little more hell next time this issue comes up in the transport committee, but will it really change anything? I do not think so. But let us accept the amendment anyway.


Stanley Howard Knowles: Mr. Speaker, the case has been very well made by the two hon. members who have spoken for the passing of this amendment and for doing a great deal more for railway pensioners than has yet been done. It is a case, of course, that I have made a great many times, and perhaps in anything I say tonight I shall be repeating what I have said on other occasions; but it is a battle that, in my view, must go on until we win it.
80038-37'/z

May 4, 1978
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When my colleague the hon. member for Regina-Lake Centre (Mr. Benjamin) was speaking rather personally about his own father and mother and the small amount of pension that his father had and the smaller amount that his mother had until even it was taken away from her, I was wondering whether I would follow suit. Having gone this far, that is what I shall do.
It just so happens that it is precisely because of a raw deal to a certain railway worker many years ago that I have spent most of my life in parliament. That certain railway machinist was my father. At a time when I was quite deeply involved in my work as a minister of the United Church of Canada, I got word that at the age of 58 he had lost his job. This was because of the depression of the 1930's. Not only did he lose his job, but there was no pension of any kind.
I well remember the feeling I had at the time, that maybe it was not enough for me, whatever others might feel, to confine my advocacy of a better life to the pulpit, but that it was time I tried to do something to change the society that was ruining the lives of so many people, particularly the older ones of that decade. I made up my mind that, although there was nothing I could do in so far as my own father's economic position was concerned, down through the years I would try to get a better deal for railway workers when they reached the age of retirement and that I would try to get a better deal for all of our senior citizens. The loss of his job had not only been an economic blow to my father but a physical blow: three years later he was dead.
I am proud of what we have achieved since the year I made that decision. However, it is a black mark on our society that we have still done so little to improve the pensions of our railway workers, both Canadian National and Canadian Pacific.
I welcome the amendment that has been put forward by my next door neighbour in our home city, the hon. member for Winnipeg South Centre (Mr. McKenzie). As my colleague pointed out, it will make it possible for the accounts of the Canadian National pension fund to be brought before this House and the standing committee so we can hammer away at them. I am sure my friend from Winnipeg South Centre will agree that is all than can be accomplished by this amendment. However, it is something. I hope to goodness the Minister of Transport (Mr. Lang) will not turn it down.
Having been given a chance to look more closely at the Canadian National pension fund and railway pension funds in general, I hope we will make up our minds that things very substantial have got to be done. For one thing, the basic amount of the pension ought to be increased substantially. For another, indexing of railway pensions, at least to the extent of the rise in the cost of living, should be built into the scheme.
It is not good enough for Canadian National once in a while to grant an ad hoc escalation. It is not good enough for Canadian Pacific even less often than Canadian National to

grant an ad hoc escalation. That provision ought to be there in the scheme, in the pension plan itself.
My friend the hon. member for Winnipeg South Centre was quite right in drawing on the recommendations of Dr. Noel Hall. He was also quite right in drawing on some of the things said by the President of the Treasury Board (Mr. Andras) when he made his statement on the indexing of public service pensions in this House on Thursday, March 9 of this year.
In addition to what the President of the Treasury Board said on that occasion to which my hon. friend has referred, there was also a very interesting paragraph in which the President of the Treasury Board pointed out that about 30 per cent of the money in the public service superannuation account, including the employees' contributions and the employer's contributions, belongs to those now retired, the other 70 per cent beloning to those still working. The President of the Treasury Board stated that that 30 per cent which belongs to those already retired is actually earning enough interest, and indeed surplus interest beyond what was expected, to cover in full complete escalation.
I contend that if that fact applies to the public service superannuation account, it applies also to the pension accounts of Canadian National Railways and Canadian Pacific Railway. I suggest the moneys in those funds which belong to those already retired is earning more than enough interest to provide escalation fully equal to the rise in the cost of living. This parliament should not stand for nothing being done on this matter.
It is not good enough to say that Canadian National is a separate Crown corporation and that Canadian Pacific is a separate private corporation. They are both creations of the Parliament of Canada. They both exist on the basis of needs that have to be met in this country and on the basis of the work of Canadians. We have the right to say to them that, even apart from the morality and ethics and rightness of it, there is enough money there to make it possible for full escalation of the pensions of all retired railway workers. Some of us insist that this is a battle which must be won. I just hope it does not take as many more decades as some of us have spent fighting pension battles in this House.
The hon. member for Regina-Lake Centre referred to his parents' experience and to the report of Dr. Noel Hall. When I spoke of that in an earlier speech, I drew attention to the fact there was a reference in that report to the miserably small pension then being paid to the father of a former president of the Canadian Pacific Railway. There was a slight escalation by the CPR of those pensions. The late Mr. Emmerson, the father of the former president, received that slight escalation but died a few months later.
I am putting these things in personal terms. I mentioned the late Mr. Emmerson. My colleague mentioned his father and mother. I mentioned my father. This is the kind of society in which we live. It is made up of people who experienced rough times in industry. I see the Minister of National Health and Welfare (Miss Begin) across the way. Sometimes I love her and sometimes I don't.
May 4, 1978


Walter David Baker: No confessions, Stanley!


Leslie Gordon Benjamin: Sometimes is better than not at all.


Stanley Howard Knowles: Yesterday was not one of the times I loved her. She complained that I should not continue to argue for the lowering of the pension age to 60 because conditions have changed and people now want to work longer rather than retire early. She must not be aware of the struggle it is for those who work in railway shops, steel mills, packing plants and clothing establishments. She may not meet these people, but I do. There are men 55 and 58 who look older than I do. They feel they simply cannot maintain the struggle to age 65. I did not have time to say that yesterday when we were speaking on that other motion. I got it in now.
The point I am making is that it is real people who work for these railways. They are human beings. They have their rights, their hopes and their entitlement. This parliament should be doing something for those people. It is not enough just to debate niceties, techniques and so on, and I am glad the hon. member for Winnipeg South Centre has put down this motion which gives us the right to talk tonight about problems faced by the real people who work for the railways of this country. Not only should there be a better basic pension and built in guaranteed escalation, but there should also be an opportunity for earlier retirement without penalty. There must also be an improvement in the position of the widows of retired railway workers.
I know that what I am about to say now I have said so often that other members could probably quote it back to me. By what rule of decency or common sense or humanity do we stand for the proposition that if a man and wife live and work together and build up their home and their assets and obtain a pension we then provide that if she dies first his pension is 100 per cent, but if he dies first her pension is only 50 per cent? I know it stems from the day when we thought it was a man's world and it was very nice for those who ran this man's world to provide for 50 per cent pensions for widows. It does not stand up. It does not wash to make that type of discrimination. It is not only the Canadian National and the Canadian Pacific which practises that discrimination; the federal government does it and the public service and private industry do it everywhere.
But tonight we are talking about railway pensions and, in particular, we are talking about the Canadian National. The hon. member for Winnipeg South Centre, quite appropriately, is asking that we have an audit of their pension plan and pension operation so that we can look at these things every year. My plea, Mr. Speaker, is that we not only look at these things but that we do something about them. I say again, better pensions in terms of the basic amount, capacity for early retirement without penalty, escalation or indexing of railway pensions to the fullest extent of the cost of living, and equal pensions on retirement or death for the husband or the wife. These are things we must achieve. If we do not, then let us not
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have all this bragging about all the good social legislation we have brought in. Let us not have all this bragging about equal rights for men and women. Men and women, particularly older women, do not enjoy equal rights and this matter brings it to a head tonight.
I have no doubt my hon. friend from Winnipeg South Centre feels as I do and that he wants to go a lot further than this amendment, but under the rules affecting a private member, this is all he can do. He has performed a service by bringing this issue before us. He is trying to find an arrangement under which we can look more closely every year at the pension operations of the Canadian National Railways and, in an ancillary way, at the pension operations of Canadian Pacific as well. It is to be hoped that, having done so, we will one day become sufficiently human and decent in our treatment of our railway workers, particularly when their working days are over, when they become retired railway workers or leave their wives as widows, to provide better pensions for these people.
Mr. Speaker, I support the amendment and I know the hon. member who moved it will support me in my determination that we still have a lot further to go.


Mr. Charles Lapointe (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I would like very briefly to reiterate the commitment made by the minister at the beginning of the sitting tonight when he said that the government intends to support the motion introduced by the hon. member for Winnipeg South Centre (Mr. McKenzie).
After listening to all the comments on the problems facing CN pensioners and the pension fund at the present time, including the delays on the part of the CN to put up the money it must pay into the pension fund, I think all members of this House will agree that those problems are extremely important. Indeed the Hall Commission was set up in the early 1960's to study that problem which, unfortunately, has not yet been completely solved. However I think that progress has been made in the right direction. For example, during this year's negotiations between the CN and the various unions representing CN employees, an agreement was reached on the heritage fund that had been recommended in the Hall report, but there remains a lot to be done. That is why we welcome the motion of the hon. member from Winnipeg South Centre. In fact, each year parliamentarians now will be able to deal specifically with this problem at the Committee on Transport and Communications since the report of the auditors on the pension fund will now be referred to it. I believe this is a commendable initiative but we should also keep in mind, Mr. Speaker, that we parliamentarians are here to exert pressure on that Crown corporation to find solutions to this urgent problem. But on the other hand we must realize that all the responsibility does not rest with us but also and mostly with the management of the CN and its unions. So, Mr. Speaker, we will be happy to support the hon. member's motion.

May 4, 1978
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Motion (Mr. McKenzie) agreed to.


Anthony Chisholm Abbott: that the bill be concurred in.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. Ethier):: When shall the bill be read the third time? By leave, now?
Some bon. Members: By leave, now.


Anthony Chisholm Abbott: that the bill be read the third time and do pass.


Jack Burnett Murta: Mr. Speaker, at the outset of my remarks I should like to join other members of the House in congratulating the hon. member for Winnipeg South Centre (Mr. McKenzie) on the acceptance of his important amendment this evening. His first motion was not accepted, although he took the occasion to express the main thrust of his argument particularly as it related to the financial needs of those concerned. My hon. friend has worked very hard and single mindedly for pensioners in Canada and he certainly deserves the credit he has been given.
This is not the first occasion on which the CNR has been before parliament in connection with the reorganization of its capital structure or for the purpose of debt revision. Admittedly, this legislation is quite complicated, and it spent approximately one month at the committee stage. Witnesses brought excellent testimony to the committee. The evidence we received reveals some very deep concerns among some sectors of the transportation industry, especially the trucking industry, in spite of the verbal assurances of the minister and of the president of the CNR that this bill will in no way give the CNR leverage to abuse its powers in terms of affecting the balance of competition. This is one of the main concerns of the Canadian Trucking Association.
We on this side of the House have a great deal of sympathy for the trucking industry in connection with this legislation. The industry made a series of recommendations, which I will not bother reading into the record tonight because of the shortness of time. In any event, the concerns of the industry were expressed eloquently, and those concerns seemed to run through the general course of our committee study of this bill.
The committee meetings brought out the fact that there are still many unknowns about the impact of this legislation. We on this side of the House are concerned about government involvement and participation in the transportation sector. It is important that there be equal treatment for all modes of transportation. That question was never dealt with to our satisfaction during the committee proceedings. In our view this bill could distort the competitive balance which exists in the transportation industry. A paramount rule to which we should adhere is that participation must be on the basis of equality for

all modes of transportation. We see in this legislation a possible violation of that basic, fundamental policy.
To date the hearings have failed to convince members of the Conservative party of the need for this bill in terms of the public interest. It seems to us that this bill is an exercise in financial manipulation. In our attempts to tighten up control and accountability from a parliamentary point of view we have basically failed. There was an amendment, however, which was accepted and which would have the effect of ensuring that annual reports of the CNR would be automatically referred to the Standing Committee on Transport and Communications.
It seems to us that it would have been advisable to wait for the legislative package with respect to Crown corporations which will, presumably, be introduced, before proceeding with a bill of this magnitude which would have the impact of restructuring the capital arrangements of one of our biggest Crown corporations.
The bill sets out to do a number of things. First, it would eliminate the necessity of the government to purchase the 4 per cent preferred shares which amount to roughly $80 million based upon 3 per cent of the gross revenue of the national system. Second, it would eliminate the necessity of the federal treasury having to meet the deficits which arise from time to time. The third point is that the bill would bring about a reduction in the debt, which is now in the neighbourhood of 62 per cent in terms of the company itself. The passage of this bill would adjust that debt somewhere near the level of 42 per cent, which would be precisely the same level as that of Canadian Pacific. The conversion of the $808 million of debt into equity would then place the CNR on a par with the average of the industry. On the other hand, $808 million worth of public money is being written off.
Of the profits after deductions, 20 per cent will go to the treasury, and we are told that over the next five years the government or the federal treasury will be roughly $135 million better off than it is at the present time.
We have also been told that this bill will improve management morale. That is questionable, especially when one views the CNR in relation to VIA Rail, which is just in the process of getting started. Hon. members are beginning to hear about employee concern regarding the transition which is taking place from the passenger services of Canadian National to the VIA Rail corporation.
Many issues have been raised during the rather lengthy debate on Bill C-17. My colleague, the hon. member for Winnipeg South Centre, has raised an issue regarding pensions. He is deeply concerned about that, but that is only one issue.
In order to follow some of the history of the recapitalization of this corporation one has to go back and look at the financial system of the CNR which was outlined before the recapitalization in 1952. If we go back and look at that outline we find the main purpose for recapitalization. That outline shows very clearly and categorically the position of the CNR before recapitalization and after recapitalization.
May 4, 1978

For the information of the House, it has to be noted that after recapitalization in 1952 the CNR had a debt equity ratio of some 32.7 per cent to 67.3 per cent, precisely the same as the CPR at that particular time. We are now doing the same thing again. We are adjusting the debt equity ratio of the CNR to correspond with the debt equity ratio of the CPR, and the debt equity ratio of the CPR is in the neighbourhood of 42 per cent.
In the committee it was revealed that if the CNR had been taking depreciation over the intervening years, its losses would have been about $24 million per year over 30 years, if we amortize over that many years. Had the CNR actually been claiming that depreciation, the government would have been reimbursing those amounts annually. Therefore, the equity position of the company would have been that much better. The central point here is that if the CNR had come to the government or to parliament for $24 million additional dollars every year, that naturally would have enlarged its total deficit for each particular year. The main point is that the company would have had to come every year for that amount of money, and it would have had to account for the money. Hence, there would have been some control and parliamentary accountability. Instead we are giving the company $808 million at this one time.
Perhaps in its wisdom at that time parliament would have said to the CNR, "Just a minute." Perhaps we would not have had to have the CN tower. Perhaps we do not need to spend the money which is presently being spent on shopping centres and other allied ventures not directly related to the operations of a transportation system. If we had had parliamentary control on a yearly basis, I think the CNR would not have been so far removed from the public, and the large deficit we are talking about writting off today possibly would not have had to be written off in this year, 1978.
I want to review and place on the record the CNR profit figures because I think it is important to keep these figures in perspective. We have been told-and this has been confirmed-that without recapitalization in 1977 there was a profit of $28 million. In 1978, after some adjustments and after new factors have been taken into consideration with respect to a very successful first quarter, the CNR will probably show a profit of some $28 million. That is without recapitalization. In 1979 the CN has projected a profit of $6.2 million. Incidentally, these are CN's own figures. In 1980 it has projected a profit of $117.6 million; in 1981, a profit of $113.1 million; and in 1982, a profit of $141.3 million. All of these figures are based on the present financial structure of the CNR.
With recapitalization, the 1978 profit figures could reach $68.3 million; the 1979 profit figures could reach $136.7 million; the 1980 profit figures, $192.6 million; the 1981 profit figures, $215.5 million; and in 1982, we could see a projected profit of $267.8 million. Once again, these are the CN's own profit projections.
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If we take into consideration that there will be a possible adjustment to the statutory rate, some adjustment in respect of Newfoundland transportation problems, which is the subject of a royal commission study at this time, and the impact of an adjustment in the Crow rate, the 1978 profit figures with recapitalization would reach $130.1 million, as compared to $68.3 million. In 1979 the figure would reach $193.8 million, and it moves up to a figure of $294.2 million in 1982, at which time the CN would be in a tax bracket that would subject it to $116 million of federal income tax. This would be because by that point all the deferred income tax would be exhausted. With that payment of $116 million in taxes, it would still be showing a profit of $238.1 million. Based on CN's figures, it will be a very, very profitable corporation.
There is nothing wrong with a Crown corporation being very profitable, but the fact is that the corporation would be in a good financial position without this recapitalization bill. At the present time, the CNR seems to have a great deal going for it. In fact, before the Standing Committee on Transport and Communications, some people indicated that CN had too much going for it. We talk about the fact that CN is getting out of passenger service, which will have a direct effect on its earning capacity. Because of pressure brought to bear by the House of Commons, we are continuing to purchase hopper cars for the movement of grain by both CN and CP. There is a continuing consolidation and rationalization process ongoing in western Canada regarding grain handling systems.
This process has the effect of reducing the costs of doing business. We have the potential of some adjustment to the Crowsnest Pass rate. There is the impact of the provisions of the budget, an additional 6 per cent depreciation for the purchase of equipment. All in all, the CNR, with or without this bill, appears to have a rather bright economic future, provided the management of the company remains intact and is constantly on top of all phases of its operations.
We must take the position as a party that this bill is not really needed at this time. At least, it should be postponed until some of the proposed government measures are more widely known. There are many variables at the present time that should have a considerable impact on the total consideration of this piece of legislation. Until such a time as the full impact of these other developments are felt, it would be sheer irresponsibility on our part to pass this bill and give it our full support. Therefore, we recommend that the bill not be proceeded with. Because of CN's financial recovery, the prospect of its moving out from under passenger deficits and the grain handling deficits, another recapitalization should be delayed until such time as the impact of these factors can be assessed properly.
As representatives of Canadians, we must ask ourselves a number of questions. What benefit will accrue to the Canadian public from the passage of this bill? What guarantees do we have that we will not have more CN towers, shopping centres and investment in ventures not necessarily related to the transportation system? What guarantees do we have that we will have a better service? What assurance is there that the

May 4, 1978
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service will be more efficient and effective, particularly in those areas where there is a great need for improvement? What assurance do we have that the passage of this bill and the giving of this $808 million bonanza to the CNR will improve grain transportation and maritime rail services, just to name two? Furthermore, what guarantee do we have that additional funds will not distort and disrupt the competitive balance which was such a prominent issue during committee proceedings?
In conclusion, let me point out that we have had extensive hearings on this matter. Questions have arisen which have not been answered fully, in our opinion. Essentially we are concerned about the long term impact of this bill. We genuinely believe that it is not required at this time. We believe the bill should be delayed. My colleagues and I cannot support Bill C-17 at this time.
Because of this, I should like to move:
That Bill C-17, an act to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in consequence thereof, be not now read a third time but that it be read a third time this day six months hence.


Some hon. Members:: Hear, hear!


Mr. Ron Huntington (Capilano):: Mr. Speaker, I am pleased to have an opportunity to speak to the amendment submitted by the hon. member for Lisgar (Mr. Murta). In my opening remarks, I should like to compliment the incumbent president of the CNR on the very complete job which he has done. He has managed to take what historically has been a very costly Crown corporation and turn it around. I guess the CNR is the grand-daddy of all Crown corporations.
Back in 1975, the CN had a loss of $16 million. It was brought from that point to a profit position of $11.7 million in 1976 and $28 million in 1977.
The hon. member for Lisgar put an analysis of a five-year profit projection on the record. That is a valid projection which must be considered by all hon. members of the House in order for them to understand our reasons for feeling that this matter should be hoisted for six months. In fact, there is no immediate need for it.
The incumbent president has done a very creditable job when one considers what he started with. He has shown abilities that exist in few men. I might also say that now that the annual income of the president of the competing organization, the CPR, is known, it is obvious the president of the CNR is very badly underpaid. The House and the Minister of Transport (Mr. Lang) should bring his salary up to the level of those few men we see in our lives who have the ability and the capability of directing large organizations such as this.
Since being a member I have been quite active on the Standing Committee on Transport and Communications, and on behalf of my party I have done quite a bit of study. I have had the opportunity of getting to know many of the aspects of both our major railroads. I have been very pleased with the

spirit of technology and excitement which appears to exist within the research section, management, the freight section and the people involved in the new technology the CNR is putting in place.
The point was ably made by my colleague the hon. member for Lisgar that the railroad has been turned around. It is showing a potential, with its present balance sheet structure and its present management, to earn a profit and become the pride not only of management and the employees of that Crown corporation but of the shareholders of the Corporation, the people of Canada, whose spokesmen sit in this House.
Historically, for each dollar of revenue the Canadian Pacific Railway has it operates at a cost of 91 cents. Historically, prior to the incumbent management of the CNR, for each dollar of revenue it has operated at a cost of $1.01. We have seen a tremendous improvement, to the credit of Dr. Bandeen.
One of the other reasons for this improvement, and I want to emphasize them, is that the government is in the process of removing substantial burdens, probably political burdens, which the CNR has historically carried. The Newfoundland railroad system would appear to be under study and potentially is to be removed as a burden of cost on the CNR. The Crowsnest rates referred to in the Hall report appear to be under study.
To me it seems quite obsolete to carry on with that kind of pressure on the proprietary operations of a Crown corporation such as the CNR. There will be direct subsidy payments involved there, instead of the operating loss being against the railroad, requiring further subsidy. The government is also involved in underwriting the capital for the hopper cars for this railroad, thus removing that burden. The passenger aspect of the railroad is being removed and put into VIA. That should remove $50 million in costs from its operations. There have been massive appropriations, something like $600 million, for roadbed improvements, and the government is attempting through this bill to remove something like $60 million in interest from the company's operating cost. With these aids the CNR has not only turned around, but is showing potential for substantial profits commensurate with its gross earnings.
I now have to raise a number of prime questions. What is the level of profit we should expect from a Crown corporation, a proprietary corporation that is turning the corner and is moving into a very exciting new area of modernization and technology? How much profit is too much profit in a Crown corporation? Where will the earnings be applied and to what aspect of that operation will they be used? Who makes these decisions? Now that there are no appropriations of funds, and by reducing debt and giving it a ratio that allows it to go into money markets, what control do the shareholders, the people of Canada, or the Parliament of Canada, have over the decisions by its board, its chairman and its officers? These are serious questions today because we have had a whole series of examples in the last four years involving Crown corporations that appear to be operating out of control.
This is the third recapitalization the CNR has undergone. We just have to go back to the statement of the then minister
May 4, 1978

of transport in June of 1952 when he was opening the debate on Bill C-308. Let me quote him as follows:
... in this measure we have gone a great distance to grant the CNR relief from the fixed charges and to bring them to a position not on a parallel with that of Class I railways of the U.S. or with that of the CPR for that matter, but to bring them to a more comparable basis.
In other words, back in 1952 we were talking about bringing the CNR to a more comparable basis, rather than about a class I railway, or even one comparable with that of the CPR. In the same speech the minister said:
The intention of this formula is to lessen charges, to give more incentive to railway management and railway employees and to encourage the railway to earn greater gross revenues. If that can be done, a position should be arrived at which would free the Canadian National Railways from these large deficit operations.
That was back in June of 1952. Another aspect of the minister's opening statement was as follows:
The interest which will be forgone on converted debt will be more than offset by the elimination of the requirement for the government to purchase CNR preferred shares.
Yet we heard the hon. member for Lisgar state that from 1952 to 1960 we had the obligation to purchase these shares, on a formula based on gross revenues, at 4 per cent. However, for some reason or other the government saw fit to carry on with the $80 million appropriation to the CNR. From 1960 onward there was no obligation at all to do so.
I would also like to remind the House that the CNR has received by way of capital revisions or other contributions from government in excess of $6 billion since the 1923 recapitalization. The CNR has been able to borrow from the federal treasury for both short and long term debt at interest rates at least 2 per cent cheaper than anybody else can borrow in Canada. It has had an awful lot of advantage from the businessman's point of view. It has really not been capitalized, and I really have to question whether the leverage it has been given of three recapitalizations, and the appropriations it has received, has been used with frugality.
A very important member of my family to me spent his whole lifetime serving the CNR. I can remember the time when the Gordon philosophy was: "Borrow all you can because you never have to pay it back." Yet if we go back to the 1972 Benson tax act we get into this stupid philosophy of "a buck is a buck is a buck," trying to get at those in the private sector who have to work under some degree of frugality. Please excuse me if I get a little uptight when I see this type of resource managed loosely, abused or not managed in a true business sense, because every time there is a dollar of waste in the system it is at the expense of distributing that which is available for everybody.
I criticize Crown corporations and the government system for waste, which I think is costing the Canadian people about one million man-years of work. Although this cost of waste within this system and within the discretionary aspect of the system is serious, it is infinitesimal compared to the waste which exists at large within the country. We are not going to start getting at that waste until we start calling on our Crown corporations and our government departments for some meas-
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ure of financial management control and for some accountability. We must keep parliament in the position of continually reviewing and demanding performance from our departments, agencies and Crown corporations. This is why I feel privileged to speak to the motion of my colleague the hon. member for Lisgar.
If you look at the CNR statement, Mr. Speaker, you will find that it refers to a string of subsidiary companies. How effective are all these companies? I can remember when they were putting them together as a result of the 1952 recapitalization and they got their ratios in line with the CPR so that they could operate in the financial money markets of the country and the world. They immediately went on the wildest spending binge you could imagine. They got themselves into an expenditure of something like $1.8 billion; they ran their debt to something like $900 million in 1961, and by 1977 the debt of the CNR was $2.02 billion.
These figures are hard to comprehend, yet here we are getting into the same thing again of not having carefully put in place measures whereby we could control and put in place overviews on the financial management control systems of a Crown corporation such as this, measures where that Crown corporation is made accountable to parliament through one of the committees that is equipped with research staff to handle it. Are we back into a repeat of the 1952 recapitalization by cancelling this calculated, mysterious $808 million that was found in a depreciation account and which should have been cancelled but was not? Now they want it cancelled to give that Crown corporation debt ratios that are the same as the CPR once again. Are we not going to call for some measure of accountability so that we do not get into another runaway mess where they buy everything in town?
If we start to review what they did following that recapitalization, pretty well overnight, and in at least half the time taken by the Canadian Pacific Railway, they converted their steam plant and all of their steam engines to diesel. The problems they had on their balance sheets during that period were unbelievable. On the other hand, the Canadian Pacific Railway phased out their steam engines as they were depreciated, just as Canadian Pacific phases out its flying equipment-it is depreciated and then they bring on stream and put into its plant new equipment, thereby using a proper depreciation method.
I am very nervous at what the government is doing in this bill, and I think that I have good reason to be. This recapitalization in 1978 is bringing about ratios again that will open up the doors of the private financial institutions, and then what is going to happen? We are going to go in with a briefcase and we are going to come out with a truckload of money. What kind of pressure is this going to put on the private sector? It is going to increase interest rates and reduce the over-all credit that is available.
We already have the Export Development Corporation talking about borrowing billions of dollars, and there does not
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seem to be an understanding of what costs will be incurred in the future, what speculative risks we are getting into with corporations like CNR and EDC when they have unlimited borrowing capacity in the private sector market. How much speculation is involved in borrowing in Arabia, Switzerland or in the United States with the variable exchange rate that we have? Is there to be no accountability to parliament or to the committees that are trained to oversee these things? Are we just going to give carte blanche approval and authority to a corporation whose management could change and then we have another runaway situation to be debated 10 or 20 years down the road on another recapitalization? That would be to our everlasting shame.
The company is in good shape now. It has overcome its problems and is earning a profit. It does not need this cancellation of a phony $808 million debt in order to get back to ratios that allow it to sweep up the closets of the banks. Apparently CN is not prepared to earn its ratios. It wants big daddy, this government, to keep giving it ratios, as it will do now for the third time.
What is going to be the rate at which they indulge in new capital expenditures? I have not seen anywhere in this booklet current budgets, medium-term budgets, five-year budgets and long-term budgets to show its spending projections. Is the government, on behalf of the people of Canada, asking this corporation in this 1978 recapitalization to give us some projections and some commitment that this is where we are going and what we are going to do? They have already had a big stimulus to their cash flow in the recent budget by having the depreciation allowance increased from 6 per cent to 14 per cent. This is all working capital that is available to them now out of earnings. Why are they rushing for this? Could it be there is some kind of a deal with the CPR that we are going to put the CNR in a position where its profits are going to be so big it has no choice but to cut rates? Is it going to be possible for trucking lines and subsidiary companies in the marketplace to be able to compete with the CNR under this new structure?
These are questions that we have to sit down and talk about, think about and get back into committee where we can get some answers. Let us have some five-year, medium-term budget projections and find out what the long-term goals are. Let us see what the new objectives are for the CNR. Without that we are on a very dangerous wicket tonight if we allow this bill to go through, instead of waiting another six months to have some of these questions answered.
Nothing is going to change for the CNR. They are in good shape; they are doing a good job and they have things going for them right now. They do not need this bill right now. When we did the same thing for Air Canada, they immediately turned around and bought up another airline, or tried to. I hope they do not get it. They cry about the burden on their operating system by having feeder lines out that they have to operate in too lavish a manner, with all this most expensive equipment and staffing in outlying airports; but independent lines get along with farm tractors and wagons and do not get

involved in all this malarkey of high overhead and everything else.
May I call it ten o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT DEBATE

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

Mr. John A. Fraser (Vancouver South):: Mr. Speaker, it is too bad that I have to be raising this issue again tonight. The issue that I raise is the potential flooding of the Skagit River valley in British Columbia by the raising of a dam on the American side by Seattle City Light. It is regrettable that I have to raise this matter in the House of Commons of Canada because, despite the fact that hardly any Canadian would for one minute tolerate the flooding of this valley to supply power for the city of Seattle-which is in the state of Washington, United States of America-this issue is not yet resolved.
On November 2, 1973 this House very graciously co-operated with me as an opposition member and unanimously endorsed the following motion:
That the House of Commons of Canada is unalterably and unanimously opposed to the flooding of the Canadian Skagit River valley which will result from the proposed city of Seattle project to raise the height of the present Ross dam situated in the state of Washington and downstream from the Canada-United States border; and
That this House further resolves that the government of Canada deliver the text of this resolution forthwith to the government of the United States of America, the government of the state of Washington, and the council of the city of Seattle.
I want to make it abundantly clear that the issues which have led to this complex and difficult situation, so far as the relations between this country and the United States of America are concerned, are not easy to comprehend. They stem from an order made by the International Joint Commission in 1941 which purported to give to the city of Seattle the right to raise the water on the United States side, which would flood the Canadian side.
There are many serious difficulties which arise when one considers whether that order was valid, but we are in the dilemma of not having a court to which we can take those difficulties. As a consequence, and to make a long and complicated story shorter, the issue now is how we can stop the flooding and at the same time try to provide to our friends in the United States some of the power they say they need in the Pacific Northwest.
May 4, 1978

That has been the dilemma until reports started to come from the British Columbia Hydro Corporation-which is a publicly owned utility-indicating that we may very well have in British Columbia a significant surplus of power. We know now that certainly the state of Idaho is interested in some of that surplus power. As good neighbours we should consider whether we can provide some of it to them.
The committee that has opposed the flooding of the Skagit River has written to the Secretary of State for External Affairs (Mr. Jamieson) asking, in view of the fact we are now going to be in a surplus power position in the province of British Columbia, what co-operation the federal government will offer through the National Energy Board if British Columbia sells this surplus power to our American friends- and they are our friends. The committee suggested that some attempt should be made by the federal authorities in Canada to exercise pressure on the state of Washington and the city of Seattle for a reasonable and fair resolution of the dispute between Canada, the province of British Columbia, the state of Washington and the city of Seattle over this river valley flooding.
Keeping in mind that this House has stated that we are unalterably opposed to the flooding of the river valley, in all fairness and decency perhaps we should make some attempt to provide our American friends-and we who live in British Columbia and are very close to them consider them our friends-with some of the power they need.
The question which I put to the Secretary of State for External Affairs a couple of weeks ago was as follows: What steps is the government of Canada prepared to take in terms of its ongoing negotiations with the government of the United States to make sure that its position is made clear to the officials of Seattle City Power and Light Company? Because-and I say this through you, Mr. Speaker, to all members of the House-there is no way that British Columbia will accept the flooding of this river valley and there is no way that Canada, our proud country, should accept that flooding.


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, the current controversy over the flooding of the Skagit valley results from the fact that in 1942, over thirty years ago, the International Joint Commission approved the application submitted by the Seattle City Power and Light Company to raise the height of the Ross dam in the state of Washington, which would have resulted in the flooding of some 5,000 acres of land on the Canadian side. The commission approved this application, provided the city of Seattle and British Columbia agreed on the compensation to be paid to the province, which they did in 1967. Since then, efforts to block this project have been made by people concerned about the environment. Of course, the possibility exists that this project may be blocked or delayed by U.S. administrative red tape, but we remain convinced that
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the best way to solve this problem is through direct negotiations between the parties involved, namely British Columbia and the city of Seattle. Besides, the American government is also of that opinion. Over a year ago British Columbia started negotiating directly, offering electricity produced by the province in exchange for cancellation of the project. Those negotiations were interrupted last fall for the Seattle mayoralty election, but it would seems that they will soon resume.
Twice, my hon. colleague from Vancouver South alluded to it a while ago, in November 1973 and in 1977, the House voted unanimously against the destruction of that important part of our natural heritage. That threat has been the subject of lengthy discussions between representatives of both countries, as well as between Prime Minister Trudeau and President Ford at the end of 1974, our government trying to create an atmosphere conducive to a negotiated settlement.
The Secretary of State of External Affairs (Mr. Jamieson) recently received a letter from the Ross committee advising him of its suggestions with regard to current negotiations. The latter are now being looked into very seriously. Generally speaking, we are quite pleased with the events mentioned by the hon. member because they improve chances of reaching a negotiated settlement, and we are willing to do everything in our power to achieve that objective. We are convinced, on the other hand, that as in all our relations with the United States, those negotiations must go on in an atmosphere of confidence and harmony, and rest on a sound understanding of the mutual interests of our two countries.


NATIONAL RESEARCH COUNCIL-PROPOSED REMOVAL OF EMPLOYEES FROM CHURCHILL, MAN.
Cecil Morris Smith: Mr. Speaker, I rise tonight to speak about the National Research Council pulling 18 families out of Churchill, Manitoba. I brought up this matter first under Standing Order 43 on April 3, and again in the question period on April 24 in a question to the minister responsible.
What has happened is that over a period of some 30 years we have seen the building up of Churchill, which started in 1946 with the coming of the armed services to Churchill, and then the building of Fort Churchill. After a period of some 30 years, the government decided to dismantle Fort Churchill and to help redevelop the town of Churchill. The redevelopment cost some $50 million which was shared by the provincial and federal governments. Following the completion of the redevelopment, the federal government withdrew its services from Churchill. The CBC will be leaving Churchill in the month of June. The corporation has 12 people working at that station.
Now the National Research Council, which has 22 families in Churchill, and is responsible for the space research program there, is also partly moving out. Of the 22 NRC families, 18 will be moving to Gimli, Manitoba, probably this fall. That is the plan of the department. They are going to move the 18
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families to Gimli, Manitoba. They can no longer afford to keep them in Churchill.
I asked the department why they could no longer afford to keep them there. It is because of the housing subsidy that the National Research Council and space program must pay to Treasury Board, $10,000 per family. With 22 families, that equals $220,000 a year. They say that the money being spent on the housing subsidy can be used in the space research program. However, I feel the federal government has an obligation to keep these families in Churchill. I do not believe the federal government should be able to go into a community, spend $50 million redeveloping and rebuilding it, and then slowly withdraw all of the federal government services.
With regard to the armed services, it has been clarified that 35 families will remain in Churchill. However, many of them will be transferred this summer. I suspect they will be replaced by single people. Therefore, the community will shrink that much more.
Part of the redevelopment in Churchill was a complex which cost $11 million. There are only 1,500 people left in Churchill. I am really concerned for these people who now have an albatross hanging around their necks. It costs $1 million per year to maintain this $11 million recreation complex. Those 1,500 people cannot afford to keep up that facility. Therefore, I feel the National Research Council and the federal government have an obligation to continue their services and to keep the 22 families connected with the space program in Churchill.
What will this do to the town of Churchill? When the business people there saw the redevelopment take place, they thought that if the government had enough interest in Churchill to put in $50 million, there must be some future for that town. Many businessmen expanded their facilities. They now see the slow withdrawal of government services from their town.
What will happen to the government housing that the National Research Council now occupies? Eighty per cent of the housing in Churchill belongs to the federal government. This is almost new housing, built some two and a half years ago. There are no other federal government agencies to fill these quarters. Are they to remain empty?
At the present time, the federal government will not transfer any of this housing to the province. Many provincial people in Churchill are in need of housing now. Health and welfare are in need of accommodation for their clients, but they cannot touch this housing in Churchill.
The removal of these 18 families does not mean the space program will not continue. The plan is that when there are rocket launches to be conducted, the men and women involved will be flown to Churchill and they will stay in motels or hotels while the rocket launching is going on.
It is a well known fact that when these rocket launches take place, ideal weather conditions are required. Sometimes it is necessary to wait up to three weeks before launching one of

the particular types of rockets they use. The National Research Council say they will save $220,000. I would like a breakdown of exactly what they will save. I do not believe they will save $220,000 by transferring these families out of Churchill.
I repeat, the federal government has an obligation to keep government services in Churchill and not hang this albatross of $ 1 million required to maintain the recreation complex around the necks of the few who are left.


Mr. Frank Maine (Parliamentary Secretary to Minister of Public Works and Minister of State for Science and Technology):: Mr. Speaker, the National Research Council operates the Churchill research range for the prime purpose of launching scientific sounding rockets. Since taking over the operation of the range in 1965, NRC has adjusted the level of manning for operations and maintenance to fit changing circumstances. The resident range staff, which is provided under contract, has been reduced in stages from 220 in 1965 to the present small staff of 22. The main reason for staff reductions has been a steadily declining scientific interest in launching rockets in the auroral zone. The decline in the scientific use of Churchill is attributable to an increased emphasis on the use of scientific satellites, a shift in scientific interest to locations outside the auroral zone, and to curtailed budgets.
The trend in scientific programs brought about by these factors continues to be evident. The Canadian space science program will require so few rockets to be launched from Churchill, in comparison to the number of launches from temporary sites in other locations in Canada, that NRC can no longer justify retaining the launching staff permanently in Churchill. It is therefore planned to make the operation of NRC's facilities 25 per cent more cost effective by relocating the contractor's Churchill staff in Gimli. In addition, the same staff will take over the launching of scientific balloons, most of which are used in the southern part of the prairie provinces. It is thus even more important to have the technical staff located further south. However, Churchill will still be used and after 1979 there will be a small resident caretaking staff retained in Churchill. Scientists and technicians will visit the community for varying periods each year.
Under the circumstances, NRC considers the movement of up to 18 families out of Churchill to be unavoidable. The alternative of leaving the staff in Churchill would have the effect of making the operation of NRC's space research facility in western Canada unduly cumbersome and consequently inefficient and too expensive. The extra cost of retaining an all-year-round facility at Churchill would result in an even smaller scientific program, and the discontinuance of Canada's space science projects using rockets and balloons would be a real possibility. It is in the face of these considerations that NRC is planning the reconfiguration of facilities which regrettably involves the movement of families out of the town of Churchill.
May 4, 1978

Mr. Speaker, I find it strange that the party opposite, which so often criticizes us for overspending and employing too many people, should, when the government tries to be cost-effective in spending the taxpayers', money, turn around and criticize us for doing that, too.


FISHERIES-REPAIR OF FOREIGN VESSELS IN CANADIAN SHIPYARDS-GOVERNMENT POLICY
John Carnell Crosbie: Mr. Speaker, on February 1, I asked the Minister of Fisheries and the Environment (Mr. LeBlanc) the question whether the government intended to change its policy with respect to permitting fishing vessels to be repaired in Canadian ports. I want to say a few words of praise for the minister in this regard because on April 6 he issued a statement to the effect that the government had changed its policy, which formerly prohibited foreign vessels from using Canadian ports to purchase supplies, exchange crews and undertake major repairs. That policy was changed as a result of the extension of the coastal fishing limit to 200 miles.
Ever since I was elected 20 months ago I have been trying to get the Newfoundland dry dock in St. John's put on a sound basis. This is a very important industry in St. John's. It employs 200 men and women and it used to suffer a loss every year. It is owned by the government but operated by Canadian National for the Government of Canada. They have been losing money there but last year, under the inspired managership of Mr. Albert Burgess and with the co-operation of the employees, they broke even.
One of their problems is that they have only one graving dock and once that dock has vessels on it you cannot take the vessels off and put other vessels on it until that vessel is finished, which means having to turn away business. Last year they turned away, I think it was, 12 vessels because the dock was occupied. They could not wait for the vessels on the dock to be finished. Now the Minister of Fisheries has agreed that foreign fishing trawlers can be repaired in Canadian ports.
At my urging and working with the minister he did agree for the Newfoundland dockyard people to go to Russia several months ago to renew negotiations with the Russians that had started in 1974, because the U.S.S.R. wanted to have their vessels repaired in St. John's, Newfoundland. If this deal goes through, there will be 60 Russian fishing vessels a year being repaired in the dockyard at St. John's, a tremendous boost in employment. It will require 200 more men, bringing the labour force there up to at least 500. It would, of course, mean a lot of new business. It would bring gross revenue up to $13 million-that is the estimate-from $7.2 million last year, and it will be a great thing not just for the CN dock but for ancillary industries in St. John's, and even as far as Marys-town where the shipyard there will get additional work. I visualize St. John's, Mr. Speaker, and Newfoundland as being a marine service centre for the North Atlantic, which is what
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it can and should be with hundreds of fishing trawlers out there from foreign nations needing work done.
So I am pleased with the Minister of Fisheries and the Environment. He has been very co-operative. He has changed the policy now. He has permitted our dockyard to enter these negotiations, which look promising. Two Russian vessels are today in the dockyard at St. John's on a trial basis to see what the costs would be as part of this negotiation, and 1 am very hopeful.
But for this to go through and succeed, Mr. Speaker, something else is needed. This dockyard needs what is called a syncro-lift. Anyone who has visited a dockyard in the modern age, in the last 10 or 15 years, will know what that means. That is a piece of equipment that can lift ships out of the water, and they can be repaired and moved on this syncro-lift. It is not like a graving dock. The ships can be moved and left, and then the lift can be used again to take another ship from the water. What is needed to make it possible for this Russian contract to go through is a synchro-lift to be able to carry a 4,000 ton vessel. In that way all the work on these trawlers can be done on the syncro-lift. Larger vessels can be done on the graving dock, and they will then be equipped to handle the Russian contract; but they cannot handle this prospective Russian contract and other foreign trawlers without first acquiring a syncro-lift, which is going to cost $8 million.
On March 21 the dockyard wrote the Minister of Industry, Trade and Commerce (Mr. Horner) requesting that the government finance the $8 million syncro-lift extension. It will take 18 months to complete the work. The work should start this spring-certainly by July-because the Russian contract could then start the beginning of 1980. We have been waiting since March 21 for the Minister of Industry, Trade and Commerce to get the okay from the government to spend this $8 million.
Now, it is a government-owned shipyard. It is situated in an area of heavy unemployment. The only way we can get these Russian contracts and other contracts is through this syncro-lift. It is a natural, and I am sure the minister is going to come through and give his approval. I am sure because earlier this year the federal government approved $5 million to be spent on the Esquimalt graving dock in British Columbia. It was $12 million all together; $5 million on craneage and $7 million to refurbish existing dock services. The minister approved a million and a half for the design of a floating dock for the Port of Vancouver. He approved $1.7 million for a drydock now under construction at Les Mechins in Quebec. He approved new craneage valued at $5 million at the federally-owned Champlain Dock in Lauzon, Quebec. Of course, there is no reason why the minister wouldn't do in Newfoundland what he is doing in Quebec and what he is doing in British Columbia, particularly when it makes good economic sense.
Now, if the minister didn't do it, if somehow or other this decision is not made to go ahead, then, Mr. Speaker, you will not be hearing tones of sweet reasonableness from the hon. member for St. John's West. There will be such a berserk and vicious attack on the government that the government will fall

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because of the volume of that alone. But I know that is not going to happen. The Minister of Fisheries has been very co-operative. I have no reason to believe that the Minister of Industry, Trade and Commerce will not be because it makes good economic sense; and in an area of high unemployment, Mr. Speaker, we want a successful dockyard that will employ 200 additional people directly. This will have ripple effects throughout the Avalon area, even down to Marystown.
So, Mr. Speaker, tonight I am calling on the government to make a quick decision. It is going to take 18 months to do the work, so we should start now.


Mr. C. Douglas (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, I always enjoy listening to the hon. member from the east coast. You never know when you come in whether he is carrying a shotgun loaded for bear or a shotgun loaded for duck. Having come prepared for a shotgun loaded for bear I suppose I now have to change around and shoot for ducks!
First of all, I should like to thank the hon. member for his very kind praise of the Minister of Fisheries and the Environment (Mr. LeBlanc). At the present time our minister is very efficient and very excellent. That praise is well deserved. This indicates to the House and to the people of the east coast the type of approach the government takes in honouring its commitments to those citizens.
As Your Honour and the hon. member knows, prior to the implementation of the 200-mile limit, foreign fleets were in direct and very strong competition with Canadian fishermen for the stocks off Canada's coasts. One of the few competitive advantages our fishermen had at that time was the geographical advantage of being close to those fishing banks. Our port policy was intended to protect this advantage and to minimize the assistance given to foreign fleets off our coast.
With the advent of the 200-mile limit, it has been found that the fleets are fishing now only for the surplus within our zone. Of course, they are being closely licensed and controlled. Accordingly, the need for a restrictive port policy disappeared with the advent of the 200-mile limit. Since the expansion of port privileges is a major bargaining lever with foreign fishing fleets, it can be used to our advantage.
Under the terms of our bilateral agreements with those nations fishing within Canada's fisheries zone, we have agreed to examine the possibility of extending co-operation in various areas. This co-operation includes the question of transfer and exchange of crews while vessels are in port. That was mentioned by the hon. member tonight.
Recently the Minister of Fisheries and the Environment announced that he would be prepared to permit the exchange of crews. I might add that the minister's decision has been communicated to the minister of industrial and rural development of Newfoundland, with very delightful results. Currently the minister is reviewing the entire question of the use of Canadian ports by foreign vessels, fishing vessels in particular. We must ensure that the increased use of Canadian facilities does not proceed at the expense of our fishermen.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but his time has expired.
The motion to adjourn the House is now deemed to have been adopted. Accordingly the House stands adjourned until tomorrow at eleven o'clock.
Motion agreed to and the House adjourned at 10.29 p.m.

Friday, May 5, 1978