1978-02-28

ROUTINE PROCEEDINGS


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Declining salmon stocks have necessitated government intervention of special restrictions on both commercial and recreational salmon fisheries this year. Since government management program restrictions dictate drastic effects on salmon fishing but do not provide for increased surveillance, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House orders that the number of river guardians be increased, commensurate with the number required to give adequate protection, and that the minister make a statement on motions outlining the government's plans to prevent uncontrolled poaching, which is the real reason for the decline in stocks.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. The Minister of Agriculture (Mr. Whelan) on Friday last announced a miserly stabilization payment of $10.27 for cow-calf producers. Since calf producers are losing as much as $100 for every calf they raise, and many of them are facing bankruptcy, I move, seconded by the hon. member for Regina-Lake Centre (Mr. Benjamin):
That this House condemns the payment as inadequate and directs the Minister of Agriculture to bring forward revisions to the Agricultural Stabilization Act to provide for payments to cover the full cost of production.


Mr. Speaker:: Presentation of such a motion for discussion, pursuant to Standing Order 43, can be done at this time only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I move, seconded by the hon. member for Marquette (Mr. Stewart), under the provisions of Standing Order 43, a matter of urgent and national importance:
That this House requests the Secretary of State for External Affairs to inquire as to the death of an RCMP officer from Swan River, Manitoba, while on vacation in Mexico, and to report to the House as to the circumstances surrounding this tragic episode.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ROYAL CANADIAN MOUNTED POLICE
[Stage Direction]
Mr. Ren£ Matte (Champlain): Mr. Speaker, under the provisions of Standing Order 43, I seek the unanimous consent of the House to move a motion dealing with an important matter of pressing necessity.
Since the circumstances surrounding the events during the October 1970 crisis remain mysterious; since in a statement on January 9 last the Solicitor General indicated that in 1971 the RCMP had issued on behalf of the FLQ a release inciting violence; since that police force usually operates by infiltrating criminal groups; and since justice demands that the truth be known concerning that mysterious matter, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That the Solicitor General report to the House on the activities of the RCMP in the FLQ terrorist groups between 1960 and 1970.
[Stage Direction]
February 28, 1978
Mr. Speaker:: Order. The House has heard the motion of the hon. member. Under the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there such consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, in view of the fact that the Belgrade Review Conference is now drawing to a conclusion with little progress having been made on the question of human rights, and that a final communique which makes no reference to the increasing violations of human rights would be a mockery of the terms of the Helsinki Final Act, I move, seconded by the hon. member for Egmont (Mr. MacDonald):
That this House urges the government of Canada to maintain a strict refusal to endorse any final communique which makes no reference to human rights.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC ACCOUNTS
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43. In a document entitled "A Legacy of Spending", compiled by Edward Murphy of CJOR radio, Vancouver, on mismanagement and waste within the federal government over the past ten years, the Prime Minister (Mr. Trudeau) is quoted as saying in 1969: "We would be on the way to financial disaster-"


Some hon. Members:: Order.


Mr. Speaker:: Order, please. If the hon. member would get to the urgency of the matter immediately, it would be appreciated.


A. Daniel McKenzie: In 1969, the Prime Minister said: "We would be on the way to financial disaster-"


Some hon. Members:: Order.


Mr. Speaker:: Order, please. The provisions of Standing Order 43 require that the matter be of urgent and pressing necessity and that an hon. member be given only the opportunity to develop its urgent and pressing necessity. If the hon. member would confine himself to that, it would be appreciated.


A. Daniel McKenzie: Then I will move my motion. I move, seconded by the hon. member for Portage (Mr. Masniuk):
That this House direct the Prime Minister and the hon. member for Vancouver East to appear before the public accounts committee to explain the 230 per cent increase in government spending since the Prime Minister's statement on restraint in 1969.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NORTHERN AFFAIRS
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the statement by the Minister of National Health and Welfare to the Canadian Press that she is ready to close the mercury contaminated English-Wabigoon River system, and in view of the fact that the native people of the area called on the federal governmnent to close the river system years ago in order to protect the health of the people in the area, I move, seconded by the hon. member for Northwest Territories (Mr. Firth):
That this House demand that the minister close the said river system forthwith and provide adequate compensation for those whose livelihood would be affected by such closure.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
February 28, 19 78

[ Translation]


ENVIRONMENTAL AFFAIRS
Mr. Eudore Allard (Rimouski):: Mr. Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
In view of the fact that water, air and soil pollution is of great concern to all Canadians and that our very survival may be at stake if it is allowed to increase at the current rate, I move, seconded by the hon. member for Champlain (Mr. Matte):
That the House urge the Minister of Fisheries and the Environment (Mr. LeBlanc) to take all necessary steps to intensify the Fight against pollution in all its forms.


Mr. Speaker:: Order, please. Pursuant to Standing order 43, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Jack Murta (Lisgar):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity, namely, the contracting out by the Department of Supply and Services of agricultural research. This will have powerful implications for agricultural research and has already had its effect on morale in the research department of the Department of Agriculture. Therefore, I move, seconded by the hon. member for Swift Current-Maple Creek (Mr. Hamilton):
That because very few Canadian organizations are capable of taking on an agricultural research contract in its entirety, the government discontinue what can only become a degrading step for agricultural research in this country.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


S.O. 43 SPORTS CANADIAN WINNER OF COMMONWEALTH BOXING TITLE-MOTION UNDER S.O. 43
Mr. Gus MacFarlane (Hamilton Mountain):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the fact that a Canadian, Gary Summerhays, won the Commonwealth light-heavyweight title last night with a brilliant eleventh round knock-out of the defending champion, and in view of the fact that this Brantford resident won the fight before
5,000	people in Melbourne, Australia, when he caught the champion with a powerful left, I move, seconded by the hon. member for Bruce-Grey (Mr. Douglas):
That Mr. Speaker write Gary Summerhays and his family to convey our congratulations to the Canadian light-heavyweight champion who has added the Commonwealth title to the list of his accomplishments as a Canadian.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


PROTESTED INCLUSION OF TEXTILES IN GATT TARIFF CUTS- MOTION UNDER S.O. 43
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise under Standing Order 43 on a matter of extreme concern to the textile industry in the Ontario areas of Leeds and Grenville and Canada as a whole. This motion also arises from statements made by Thomas Wells, of Dupont of Canada, that the announced decision to include textiles in the proposed Swiss formula tariff cuts during the international GATT negotiations "will result in the end of the Canadian textile industry by 1985". I move, seconded by the hon. member for Grenville-Carleton (Mr. Baker):
That the government take immediate steps to rectify this serious situation, taking note of the fact that Canadian producers have dropped from a 60 per cent to a 40 per cent share of the Canadian market in the last several years; and, Finally, the House deplores any further such damage to a Canadian industry which will result in much additional unemployment.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


MEMBER FOR PALLISER TO SIT AS INDEPENDENT
Mr. Speaker:: I have received an indication from the hon. member for Palliser (Mr. Schumacher) that it is his desire to sit in the chamber as an independent member. After discus-

February 28, 1978
Oral Questions
sions with him, I am now able to advise the House that the seat to be occupied by him in future will be number 265.


Some hon. Members:: Hear, hear!


U417) ORAL QUESTION PERIOD   EXTERNAL AFFAIRS ALLEGED CANDU AGENCY SCANDAL-GOVERNMENT INVESTIGATION
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is for the Secretary of State for External Affairs. I wonder if the government of Canada has given any reply to the government of Argentina with respect to the very sharply implied criticism by Argentina that the Canadian government was dragging its feet on any meaningful government investigation of the Candu agency scandal, as evidenced by the note handed to our government on November 17 last by Argentina.
Why were the contents of that note hidden from the public accounts committee of this House while the matter was still being investigated by that committee? Why did it take from November 17, 1977, to February 21, 1978, before the minister even had the good grace and manners to produce that note for the public accounts committee?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, as usual, in starting to ask a perfectly legitimate question the hon. member has to throw in some rather stupid curves which tend to distort the whole issue.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: There was no hold-up as far as I was concerned. I think the record will show that we have responded to every request for information made by the hon. member. In this particular case, when we received the note I had to get clearance from the Argentinians to make it available. In addition, there was a period during which, as the hon. member knows, I was out of the country. There was no particular delay or anything unusual. I reject totally and completely the quite uncalled for charge which has been made.


Allan Frederick Lawrence: Mr. Speaker, I did not hear the minister's reply with regard to whether a reply had been given to Argentina. Has there been any formal communication between the Canadian government and the government of Italy on this matter? Why, when the key man in the whole Argentinian Candu scandal is an employee of an Italian corporation of which the Italian government is a major shareholder, has there been no pressure put on the Italian government for co-operation and assistance from Canada's so-called partner in this whole matter?


Donald Campbell Jamieson: Mr. Speaker, I am not sure whether the word "pressure" is an appropriate one, but we have made representations to the Italian government on a number of occasions. I believe the hon. member, or the committee, has had copies of those representations. I think the hon. member also knows that the government of Italy-I am recalling this from memory, but I am reasonably certain I am correct-has indicated that it cannot go beyond what it has already done.
The hon. member is shaking his head. I ask him to give me an opportunity to check the record to be sure. Certainly, verbally, I have been told that there is nothing that can be done. On the other hand, I say to the hon. member-or perhaps, more appropriately, I should say this to the chairman of the public accounts committee-that if the committee has any formula it can devise which would make it capable of being put to the Italian government in a way other than we have already done, I am certainly prepared to do it. Indeed, I will transmit any message the committee wishes to prepare.


Allan Frederick Lawrence: Mr. Speaker, because this matter is before the House and is now a parliamentary matter rather than a committee matter, certainly the government owes it to the people of the country and to this House to take the initiative and exercise some leadership instead of dragging its feet all down the line. Swiss legal authorities and even Swiss government officials have informed me that there are a number of ways of proceeding if the Canadian government wants to get at the truth of this matter. The Canadian government could be making other attempts either through Swiss courts, the Canadian courts or the Swiss government, rather than making a single, feeble and half-hearted attempt to break the Swiss numbered bank account secrecy.
Canadian taxpayers' moneys were deposited in Swiss numbered bank accounts. What other attempts has the minister, his departmental officials or the Canadian government taken to find out who received that Canadian money through those Swiss accounts, besides the single, feeble and unsuccessful attempt which has been made?


Donald Campbell Jamieson: Mr. Speaker, let me first deal with the preamble to the hon. member's question. When the hon. member gets into his debating and argumentative style, quite frankly it is hard to pick the substance out of the tremendous amount of verbiage with which he surrounds the issue.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: In so far as his first comment is concerned about the government not having dealt with this matter other than through the committee, surely it has been said repeatedly in this House that it was a matter for the committee. I undertook to do whatever the committee asked. The committee never argued with that proposition. Yesterday the report of the standing committee was issued and the hon. member did not even let 24 hours go by before asking what the government was going to do on another course.

February 28, 1978

I repeat to him that we have made all the representations that as far as we are concerned we have been asked to make- if the hon. member would let me finish-and in so far as we have been able to determine, we have gone through all the channels and made all the representations that we either have been asked to make or which appeared to be open to us to make. I repeat, if the hon. member has been advised by the Swiss of some method through which this information can be obtained, we are as anxious to have it as he is. I think it would have been sensible for him to specify what those methods are. 1 gave him an assurance that if they are open to us, we will pursue them immediately.


ADMINISTRATION OF JUSTICE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is directed to the Solicitor General. Would the minister report to the House and the people of Canada on the investigations undertaken by the RCMP with respect to nuclear sales and the possibility of breaches of Canadian law? I ask this question because the investigation has apparently been going on since the early part of 1977. Has the Solicitor General apprised himself of the situation, and what can he report to us today?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, 1 am pleased to advise the hon. gentleman that an investigation has been conducted by the RCMP. It is ongoing and is by no means complete, as we have encountered the difficulties described by the Secretary of State for External Affairs, namely, lack of co-operation from the areas within which the amounts are alleged to have been deposited.


Lincoln MacCauley Alexander: A supplementary question, Mr. Speaker. Is the minister aware that it has been reported that Dr. Marvulli, a federal state prosecutor in Genoa, Italy, has raised questions about the fairness of the investigation being carried on by the RCMP which leaves much to be desired? If he is not aware of this, would he follow this allegation through the usual channels in order to determine what type of investigation has been carried on? Would he find out how the RCMP is conducting the investigation and whether inquiries overseas, particularly in Italy, leave something to be desired?


Mr. Blais:: Mr. Speaker, I would be very surprised indeed if there were any unfairness in the investigation being conducted by the RCMP. As the hon. member knows, offshore the RCMP is rather limited in its operations, because we are not engaged in offensive investigations or intelligence-gathering. In this particular instance, we have to rely in large measure on the co-operation of foreign agencies.


Lincoln MacCauley Alexander: A final supplementary question, Mr. Speaker. I mentioned the name of Dr. Marvulli. Would the minister keep that name in mind? Also, would he approach his depart-
Oral Questions
mental officials and, in particular, the RCMP to determine whether there is any truth in the allegation about the fairness of the investigation which apparently, according to reports, leaves something to be desired?


Jean-Jacques Blais: Yes, Mr. Speaker. I would encourage the hon. gentleman to give particulars of the information he is advancing, which he will recognize is of a very general nature indeed.


INCREASE IN PRICE OF OIL-EFFECT ON COST OF LIVING
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is directed to the right hon. Prime Minister because it concerns over-all government policy rather than that of a single department. I refer to the fact that as a result of the government allowing the price of oil to be raised on January 1, the price of gasoline for cars and trucks, the price of home heating fuel and the price of natural gas will go up tomorrow. It is estimated this will increase the cost of living index by a full percentage point, and it is already more than 50 per cent higher than the 6 per cent increase forecast by the Minister of Finance.
I ask the Prime Minister, therefore, if he is sufficiently interested in keeping down the cost of living and relieving the hardship which its increase will involve, to rescind the increase in the price of oil and leave the price where it was.


Right Hon. P. E. Trudeau (Prime Minister):: Of course, Mr. Speaker, we are interested in keeping the cost of living down, particularly in energy areas. The hon. gentleman certainly remembers that right after the OPEC decision in the fall of 1973, this government acted, and has continued to act, to ensure that the price of energy-of gas and oil-in Canada would be below the world market price. We have all said at some point that if we wanted investment to continue, as well as exploration, we would have to trend toward world prices. But for four years we have been below world prices, and we will continue for another short period of time to be below the price in world markets.
Therefore, the effect on the cost of living of the OPEC nations' decision has not yet been fully borne by the Canadian consumer. This seems to be an element that the hon. gentleman always forgets when he talks about the actions of the federal government. The action taken by the federal government has not been to increase the price of petroleum; it has been to keep it below world prices.


Thomas Clement (Tommy) Douglas: Mr. Speaker, my supplementary question is this: In view of the fact that a very large part of the petroleum products we consume is produced in this country and not bought from OPEC countries, we have the opportunity to keep prices at a much lower level than they have been kept. I ask the Prime Minister if he

February 28, 1978
Oral Questions
is aware of the fact that the research which has been done by federal and provincial officers has indicated that this increase alone will place between 30,000 and 35,000 jobs in jeopardy. Also, in view of the fact that circumstances have changed since the government embarked upon a policy of allowing the price to rise toward the world level, is this not the time, in order to cope with inflation and unemployment, to confine this increase to the point it had reached prior to January 1 ?


Pierre Elliott Trudeau: Mr. Speaker, of course, some of the petroleum we consume in Canada is produced in Canada. But the hon. gentleman knows that we have to import a sizable and growing quantity of petroleum. This is paid for at world prices. It is because the government has been bringing in external petroleum and has been subsidizing the consumer that Canadians have been able to purchase energy at lower than world prices. This is something the hon. gentleman understands perfectly.


An hon. Member:: All oil?


Pierre Elliott Trudeau: Well "all oil" is pretty well all, Mr. Speaker. But the policy is well known to the Canadian people. They know they have benefited for four years from lower prices than world prices, in spite of the fact that we have had to import increasing quantities of oil from overseas. They have been subsidized to the tune of a few billion dollars by now, and Canadian consumers and producers have benefited from that action of the federal government.


Thomas Clement (Tommy) Douglas: Mr. Speaker, my final supplementary is directed to the Prime Minister. The fact is that the government has not subsidized the consumer, but the consumer has subsidized it by paying a ten cents a gallon gasoline tax, and the export levy on oil sold outside Canada has enabled us to level out the price in Canada. Also, the fact is that the Canadian consumer now is being charged four times as much for oil as he was being charged five years ago, and the main beneficiaries have been the oil companies. The government's own report shows that over 50 per cent-


Mr. Speaker:: Order, please. If the hon. member has a supplementary question, would he put it forthwith, please?


Thomas Clement (Tommy) Douglas: Over 50 per cent of the oil companies' cash flow is represented by after-tax profits. I ask the Prime Minister whether, in view of that, he will at least insist that any increase in the price of oil be put into some type of fund to pay for exploration, rather than going into pockets of the oil industry which has resulted in the biggest rip-off in the history of Canada.


Pierre Elliott Trudeau: Mr. Speaker, that may be an argument, but it is based on erroneous facts. The first thing is that the export tax is not sufficient to pay the subsidy for the five eastern provinces who rely on imported oil. That is why we have had to charge all consumers the extra ten cents a gallon. It is in order to make up for the deficiency in the export tax. Second, the hon. member is quite wrong when he says the money coming

from the windfall benefits resulting from the actions of the OPEC nations has gone just to the oil corporations. It has gone in part, through increased taxes, to the federal government: but it has gone in large part to the Conservative treasury of Alberta and the socialist treasury of Saskatchewan. The hon. member knows that.
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ESTIMATES
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is for the President of Privy Council. Has the minister initiated any conferences with House leaders concerning the allocation of the estimates tabled last Wednesday, so that House committees can start work? The rules provide that the estimates shall stand referred to the various committees, without debate, upon allocation after consultation among the House leaders. Has the minister held those conversations, and can he tell us when the estimates will be referred to the committees, because at the moment they are standing still doing nothing-like this government?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, the motion to refer the estimates will be made tomorrow.
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CONTROL OVER AECL IN INTERNATIONAL NEGOTIATIONS
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. Since the public accounts committee report, tabled yesterday, on the Atomic Energy of Canada Limited matter states that the chairman, Ross Campbell, failed in his renegotiation of the Eisenberg agency agreement in that he failed to obain an accounting of legitimate costs, and that he committed AECL to an exclusive agency agreement with Eisenberg for a second sale to Korea at an undetermined fee, what steps has the government taken to discipline Mr. Campbell or to ensure that he is kept under proper control in dealings where he might make costly or inappropriate arrangements on account of the taxpayers of Canada9


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I do not accept the preamble to the hon. member's question. I think Ross Campbell has done a first-rate job for Atomic Energy of Canada Limited. He moved in at a very difficult time to clean up a very difficult situation. In the renegotiation of the contract which the public accounts committee has examined there was some suggestion that a significant fee would be payable in the event that a second reactor was sold to Korea. That was implicit in the hon.
February 28, 1978

member's question. There is no finder's fee involved at all: Mr. Campbell made that very clear to the committee.
He also made it very clear to the committee in his testimony that fees for the service part of that contract would very likely not be payable. One particular invoice was submitted to him in April, 1976, well before the committee started to examine this question. He rejected that invoice, and no further invoices have been submitted to AECL. I think Mr. Campbell has done a first-rate job.


Some hon. Members:: Hear, hear!


William Hillary (Bill) Clarke: Mr. Speaker, I am referring to paragraphs 5 and 71 of the report tabled yesterday. I realize it has only been 24 hours and perhaps the minister has not had a chance to study those words. I believe my paraphrasing to be accurate. I ask the minister to look at those paragraphs. Is it the opinion of the minister and the government that Mr. Campbell was the most able negotiator to be found to renegotiate this contract? What was the purpose of the government in sending only one man?


Alastair William Gillespie: Mr. Speaker, if the hon. member is referring to renegotiation of the agency arrangement with regard to Korea, the answer is to be found in the decision of the board of directors of the corporation at that time.


ROYAL CANADIAN MOUNTED POLICE
Mr. Ren6 Matte (Champlain):: Mr. Speaker, I should like to put a question to the Solicitor General.
In view of the fact that on January 9 his predecessor stated that in 1971 the RCMP had issued a communique in the name of the FLQ, and also that in 1970, during the all too famous October crisis, similar releases had been issued which, as was established in court, did not come from the FLQ, would the minister tell the House whether he has had the opportunity, now that he is settled in his department, to look fully into the record of the 1970 October crisis and whether he is aware of this fact, in order to inform the House to what extent the special anti-terrorist RCMP committee had infiltrated into the FLQ?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I have not yet had time to look fully into the record of the 1970 October crisis, as the hon. member has suggested.


Mr. Matte:: Mr. Speaker, the minister answers my question as if he had never read the questions I have been putting in this House for a long, long time now. To my mind, it is time the truth were known in that regard. I therefore ask the Solicitor General, as a supplementary, whether he agrees that it is part of the RCMP's normal functions to infiltrate groups of criminals-
Oral Questions


An hon. Member:: Terrorists!


René Matte: -of terrorists, yes, to stimulate their activities: does he at least agree with that principle?


Jean-Jacques Blais: Mr. Speaker, if I remember correctly, two weeks ago the hon. member expressed his opinion on this matter, and I believe that, in his speech, he recognized that we agree it was our responsibility to infiltrate terrorist, subversive groups, which fall within the definition of section 16(2) of the Official Secrets Act.


MINISTERS INVOLVED IN FINANCIAL ASPECTS OF SALE OF CANDU REACTORS
Mr. Ron Huntington (Capilano):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. Was the president of the Export Development Corporation telling the truth when he told the public accounts committee on November 29 at least four or Five senior cabinet ministers were involved in financing decisions concerning both the Korean and Argentinian Candu reactor sales?


Alastair William Gillespie: Mr. Speaker, the hon. member is raising a question which was properly raised before the committee. I am not familiar with the particular testimony to which the hon. member is referring. I will be pleased to read the report to determine whether there are allegations of that kind in it, and provide the hon. member with an answer at a later date.


Arthur Ronald Huntington: I would advise the minister that the testimony I am speaking of was given on November 29 after the committee had finished the hearings concerning AECL. We were advised then that four or five ministers were involved in these decisions. Does the minister, as part of the cabinet committee on these matters, accept responsibility for the terms and conditions of these reactor deals with Korea and Argentina, both of which deals were subjected to strong criticism in the report tabled yesterday?


Alastair William Gillespie: Mr. Speaker, the hon. member referred to the Export Development Corporation in his first question. I agreed to take that matter under advisement and provide an answer at a later date. As to the question of the Argentinian renegotiation, as the hon. member knows, that was the reason Mr. Campbell was brought back from Japan, where he was serving as ambassador, to renegotiate the fiscal terms of the contract. The successful result of those negotiations was a saving in the order of $80 million. That is the report 1 have been given. I have to say that Mr. Campbell did a first-rate job in renegotiation of the Argentinian contract as well.

February 28, 1978
Oral Questions FINANCE


VALUE OF CANADIAN DOLLAR-TOTAL GOVERNMENT BORROWING TO IMPROVE EXCHANGE RATE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. As the minister continues to seed uncertainty in the marketplace with his inadequate statements and lack of decisive action on many financial matters, will he, in view of the still falling 89-cent Canadian dollar, clarify for the House and the Canadian public his statement of last evening-made outside this House-that it was the intention of the administration to take down $200 million of their $1.5 billion line of credit, but that it was only one sequence in a group of borrowings planned by the administration? What do they plan to borrow in total, and for how long?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, after careful consideration, I made a statement yesterday. We decided to borrow $200 million yesterday. The stand-by credit is there. The governor of the Bank of Canada will be borrowing more when it is judged necessary.


Sinclair McKnight Stevens: As business confidence continues to fall day by day, as shown by the Bank of Montreal's recent poll, due largely to the administration's inept handling of so many economic matters, will the minister at least clarify his borrowing intentions with regard to our balance of payments deficit? He indicated one week ago that he plans to borrow foreign funds to help cover the balance of payments deficit. What is the magnitude of that borrowing? To what degree will he cover that deficit, which is now estimated to be almost $6 billion?


Joseph Jacques Jean Chrétien: Mr. Speaker, there is another flow of capital coming into Canada outside of the planned borrowing by the federal government. We are in negotiation at this time. When agreement is reached, I will make it public.


Sinclair McKnight Stevens: Another question to the Minister of Finance. In view of the extreme uncertainty which prevails in the country today, would the minister agree to make a statement on motions concerning the present position of our foreign exchange, or would he make a suitable reference to the appropriate committee so there could be clarification of the government's handling of our foreign exchange at the present time?


Joseph Jacques Jean Chrétien: In two days the Bank of Canada will be publishing its monthly report on the figures.


Sinclair McKnight Stevens: We know that.


FISHERIES
Mr. B. Keith Penner (Thunder Bay):: Mr. Speaker, my question is addressed to the Minister of Fisheries. In view of reports that the Minister of National Health and Welfare intends to recommend the closing of the English-Wabigoon River system unilateral action on the part of the federal government because of mercury contamination, would the hon. gentleman give serious consideration to following an entirely consistent policy which would involve the closing of all river systems in Canada where mercury levels in fish life exceed the tolerable limit?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: I am informed that the Minister of National Health and Welfare was incompletely reported. In fact, it is to the provincial department of fisheries that she will address her request for closure. This is perfectly normal, since the Ontario fishery is a provincial responsibility. To this extent, I am in the hands of the minister responsible for fisheries in Ontario since the federal government does not have the policing capacity to put such a ban into effect.


JUSTIFICATION OF MONEYS PAID UNDER EISENBERG CONTRACT
Mr. David MacDonald (Egmont):: Mr. Speaker, my question is addressed to the Minister of Energy, Mines and Resources. Since renegotiation of the Eisenberg contract was specifically discussed and agreed to by him, would he now assure the House that the expenditure of a considerable amount of public funds with respect to that contract is fully justified, or whether any further investigation has been carried out to determine whether fair and reasonable use is being made of funds supplied to this agent?


Alastair William Gillespie: The hon. member will appreciate that the report of the public accounts committee dealing with this matter was tabled only yesterday and I have not yet had an opportunity to familiarize myself with all its recommendations. However, my first impression is that action on most of the recommendations, if not all of them, is substantially advanced.


David Samuel Horne MacDonald: I would have thought that for some months now the minister would have been actively pursuing the question whether or not there had been massive abuse of public funds with respect to this agency. Is he telling us that no action has been taken by his own department?


Alastair William Gillespie: The hon. member did not listen to the answer I gave to his last question. I made it clear that as I read through the recommendations in the committee report made yesterday, I was very pleased to note that nearly all those
February 28, 1978

recommendations, if not all of them, had been met either in whole or in part by the agency during the last 12 months.


AIRPORTS
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, my question is for the Minister of Transport. As Mirabel airport has cost Canadian taxpayers $115 million in deficits in the past two years, and since the department has no idea how long such enormous deficits will continue, would the hon. gentleman take the first opportunity to tell the House on motions what the government plans to do to eliminate these deficits and put this enormous white elephant on a paying basis?


Hon. Otto E. Lang (Minister of Transport):: The first thing I should like to say to the hon. member is this: it should be clear, if this matter is to be put into perspective, that any large figure for the deficit is only usable because we have taken the policy decision to include interest on the investment as part of the ongoing recurrent cost shown in relation to an airport. Hon. members should, at least, not use the initial cost of an airport and then use it again in terms of the ongoing interest costs: it should be one or the other. Mirabel will turn out to be, as it is given a chance to develop, one of the great investments in aviation in this country.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Otto Emil Lang: It is true that no airline likes to operate out of two airports in a particular city, but in Montreal-just as in the case of Toronto-there was very significant resistance to expanding sites in whose neighbourhood a lot of people wanted to live. It was, therefore, necessary to go to a new location and build a large airport which would progressively prove itself. At the present time, there is a vigorous committee at work to show the value of Mirabel, its potential, and to draw commercial development there. This, notwithstanding the existence of the present provincial government of Quebec, will continue to be our intention both in the near term and in the long run.


George Harris Hees: Is the minister not aware that construction of the second terminal building which had been planned for Dorval airport would easily have handled all overseas traffic for many years to come, with far greater convenience to the travelling public who by the tens and hundreds of thousands are not using Mirabel because it is too darned inconvenient?


Otto Emil Lang: There is no doubt that if one ignores certain costs, the easiest solution in both the Montreal area and the Toronto area would have been the expansion of Dorval and the expansion of Malton. But we do not like to ignore costs and, just as in the case of Malton, we refused to ignore the cost-


Some hon. Members:: Oh, oh!
Oral Questions


Otto Emil Lang: -which the hon. member just rides over, of inconvenience and, indeed, real damage to people in the neighbourhood of an airport if we increase unduly the amount of traffic into the airport once people have made their homes in the area. We will not do it in Malton, either.


Some hon. Members:: Hear, hear!


George Harris Hees: Since the figures in my possession were given me, as a former minister, by senior officials in the hon. gentleman's own department, I would ask the Minister of Transport to go back to his department and study those figures to see just how wrong he is and what a wrong decision the government made when it decided not to build a second terminal building at Dorval and, instead, built the white elephant at Mirabel-


Some hon. Members:: Order.


George Harris Hees: -when a wiser decision could have given the Canadian travelling public the service they deserve, at no cost to the taxpayer.


Mr. Speaker:: Order. The question, by its very nature, is argumentative.


CONSUMER AFFAIRS
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I address this question to the Minister of Consumer and Corporate Affairs. It arises from the revelations regarding the extremely high remuneration received by executives of Canadian corporations, particularly the $330,000 a year salary of the president of the CPR. Since all the information we have comes to us as a result of disclosure requirements in United States legislation, would the minister consider bringing in amendments to the Canada Corporations Act which would require Canadian corporations to make public the salaries and other remuneration of their senior officials?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I will take that representation under consideration.


FINANCE
David Orlikow: Mr. Speaker, my supplementary question is directed to the Minister of Finance. Will the minister discuss with the Anti-Inflation Board its decision to permit an increase of $3,650 in the salary of the president of the CPR, who is already receiving $330,000 per

February 28, 1978
Oral Questions
year, when the supposed maximum annual increase permitted by the AIB guidelines in $2,400, and at a time when workers with incomes of less than $10,000 a year are being restricted to increases of 4 per cent to 6 per cent a year?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am taking note of that question and shall inquire into the matter from representatives of the Anti-Inflation Board.


Mr. Speaker:: The hon. member for Rosedale.


Some hon. Members:: Hear, hear!


CANADIAN CULTURE
Hon. Donald S. Macdonald (Rosedale):: Mr. Speaker, I thank hon. members: the warm response reminds me of the line from Macbeth about my predecessor, Macdonwald, of whom it was said: "Nothing in his life became him like the leaving it".
I should like to direct my question to the Secretary of State. Is he in a position to meet with the Professional Association of Canadian Theatres for the purpose of discussing further financing for the performing arts?


Hon. John Roberts (Secretary of State):: Mr. Speaker, I welcome the hon. member's question, largely because it gives me a chance to salute the completion of the distinguished parliamentary career of the hon. member.


Some hon. Members:: Hear, hear!


John (Moody) Roberts: I have met with the Professional Association of Canadian Theatres to discuss its problems. I hope to meet with them again in the not too distant future. Perhaps I should say to the hon. member's Doppelganger, the hon. member for Egmont, who cited the other day an apparent drop in the funding for the arts on the part of the Secretary of State, that there is an error in the estimates. In fact, rather than decreasing, as was suggested by the hon. member, they have been increased. I will provide him with the details.


Mr. Paproski:: When did you change that?


ADMINISTRATION OF JUSTICE
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, in the absence of the Minister of Employment and Immigration, I should like to direct my question to the Solicitor General. Will the minister advise the House whether Mr. Warren Hart
[Mr. Orlikow.)
entered and left Canada with the knowledge and consent of the RCMP or the Department of Employment and Immigration, or both, subsequent to the deportation order of December 9, 1971? Such order resulted from an inquiry under the provisions of the Immigration Act held December 9, 1971, before special inquiry officer W. O. Darling. Is the minister prepared to consult with his cabinet colleagues to facilitate the re-entry of Mr. Hart into this country so that he can testify before the appropriate bodies?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, as I understand it, the deportation order was, indeed, effected and Mr. Hart left the country with the concurrence of the RCMP.
I would have to check with my colleague to ascertain whether there was involvement on the part of immigration authorities at that time. With reference to facilitating the re-entry of Mr. Hart into Canada, that is a matter which would have to be disposed of by the minister, and undoubtedly a request made by the McDonald commission.


Elmer MacIntosh MacKay: Mr. Speaker, is the minister really saying that the tapings to which he referred outside the House yesterday were accidental? Also, is he able to tell the House whether the commissioner of the RCMP knew, approved and was consulted concerning the recruitment and taking into this country of Mr. Warren Hart?


Jean-Jacques Blais: Mr. Speaker, with reference to the entry of Mr. Hart into this country, it was done in accordance with the measures which are followed in such occurrences as between the RCMP and other associations of like nature in other countries.


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: I will not comment further. In terms of my statement yesterday, I do not recall using the word "accidental". What I meant was "incidental".


INTELLIGENCE ACTIVITIES CONDUCTED IN FOREIGN COUNTRIES
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my supplementary question is directed to the Solicitor General. It relates to the evidence given by the commissioner and other officials before the Standing Committee on Justice and Legal Affairs last November, relating to our use of agents provocateurs, undercover agents and intelligence activities in foreign countries. Has the Solicitor General considered this very important evidence? Is he prepared to stand by it? If not, will he give an undertaking to the House that he will clarify and/or, if necessary, reject that very important evidence which was given before the standing committee last November?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I am not aware of any evidence indicating that we have used agents provocateurs outside-


An hon. Member:: The hon. minister is not aware?
February 28, 1978


Jean-Jacques Blais: I am not aware of any such evidence. If the hon. member indicates that evidence has been presented before a committee of the House, I will look at it and comment further at a later time.


William Herbert Jarvis: Mr. Speaker, I should like to refer the Solicitor General to page 2:26 and the following pages of the minutes of the standing committee of November 24. My supplementary question is: In view of the fact that we will be studying the estimates, including the Solicitor General's, in a very short time-which does not provide me with time to put the necessary questions on the order paper-will he undertake to provide details of the cost of travel and the air fares of Mr. Warren Hart and the Canadian employees who accompanied him, in order that that may be a subject matter before the standing committee when the estimates of the Solicitor General's department are studied?


Jean-Jacques Blais: Mr. Speaker, I will give the hon. member's representations serious consideration.


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: 
REQUEST FOR ADEQUATE PROTECTION OF SALMON FISHERY
Jack Marshall: Mr. Speaker, my supplementary question is directed to the Minister of Fisheries and the Environment. It deals with another species and the ban and restriction in the close-down of the salmon season. Can the minister indicate whether reconsideration has been given to the fierce restrictions on the closing of the salmon rivers? What are his intentions with regard to increasing the number of river guardians to try to prevent an increase in poaching which is taking place in all Canadian salmon rivers?


Roméo LeBlanc: Mr. Speaker, as the hon. member knows very well, the conservation measures which are taken are determined by biologists because we need escapement for spawning.
As for the poaching problem, the hon. member was on the committee when the penalties were considerably increased by this parliament. He knows that magistrates have been showing much more severity in their judgments when there is a conviction. He also knows that upon conviction we seize and forfeit equipment, vehicles, nets, etc., which were used in the violation.
As for the number of people employed in guarding the streams and rivers, the hon. member knows that we are always limited by the number of man-years allocated to our department and, of course, by the pressures on our department to manage the 200-mile limit properly and, therefore, the use of resources in that area.


PRIVILEGE
Mr. Speaker:: Order, please. There remains outstanding from last Thursday the question raised by the hon. member for Northumberland-Durham (Mr. Lawrence) giving notice to the Chair of a desire to raise a question of privilege, related to the action of the Minister of Finance (Mr. Chretien) which, according to the notice, was deliberately misleading the House.
This gave rise to a discussion as to whether or not that language can be used in parliament, and it led to the explanation by the hon. member at that time that his use of the language on the previous evening was not designed to offend parliamentary practices but rather had been calculated to put the matter on the record in order to test the rulings that have surrounded that particular language, and the rulings which

February 28, 1978
Privilege
surround the desire of a member who may wish to call into scrutiny the conduct of another member in the House.
The hon. member for Northumberland-Durham, in answer to my reference to the precedents, clearly and unequivocally withdrew that remark from Thursday night's record, and I left intentionally the word "deliberately" in his notice of a question of privilege in order to bring the matter further into scrutiny to see if I could be of some assistance to members in the apparent dilemma, and I am happy to say the dilemma is more apparent than real.
There has been, quite naturally, confusion in matters of this sort. Since under the precedents it is clearly unparliamentary to accuse a member of deliberately misleading the House, obviously an action of deliberately misleading the House would have to be looked upon as being a most serious action indeed. If a member is suspected of that kind of action, the dilemma becomes: how does a member call that conduct into scrutiny without using the words "deliberately misleading the House", since in fact the use of the language is in itself unparliamentary and therefore prohibited. It appears on the surface of it to give rise to a rather frustrating situation.
I have taken the time to examine some of the precedents, which I would like to give hon. members now. I think these precedents may be of assistance to hon. members in their further examination of this matter which, I hope, will leave open a possible course, if it is the desire of the hon. member for Northumberland-Durham or of any other member, now or at any other time, to pursue it.
My first reference is to the nineteenth edition of Erskine May at pages 367 and 428. At page 367, under the heading "Rules Governing Subject-Matter of Motions", it is stated that certain matters cannot be debated save upon a substantive motion which admits of a distinct vote of the House. Among these is the conduct of members of either House of Parliament. I am summarizing that slightly, but the reference is there.
At page 428 of May's nineteenth edition, under the heading "Reflections on the Sovereign, etc.", it is stated that unless the discussion is based upon a substantive motion, drawn in proper terms, reflections must not be cast in debate upon the conduct of the sovereign, etc, and among those enumerated are members of either House of Parliament.
There are two other rather important precedents to which 1 would like to refer for the benefit of hon. members. I have them here and would be glad to have them copied and distributed to any members who might be interested in the discussion. One of them refers to a case in our own Journals which is reported on March 11, 1890, when Sir Richard J. Cartwright moved a motion of criticism of another member of the House which contained in it, first of all, an allegation of directly misleading the House and, finally, concluded by saying that the conduct of a certain member in the premises was and had been discreditable, corrupt and scandalous. That matter was debated by the House as a substantive motion, and after debate the decision was taken that the matter would be referred to a committee for further examination.
In addition, there is a very useful precedent from the British House which occurred on June 15, 1965. At page 242 of the Official Report and the following page there are some very informative comments by the Chair relative to a comment that was made in the debate about a member being involved in racist propaganda. On being called to order by the Chair and, after discussion in which it was indicated that the withdrawal of those remarks was necessary in those circumstances, the clear indication was given by the Chair that if it was the intention to proceed to criticize the conduct of the member, it would have to be done by a substantive motion drawn in proper terms.
This does raise a very slight question as to whether or not in a substantive motion, since it is the very intention of the motion, language can be used which appears otherwise to be prohibited. My preliminary decision is that since the motion directs itself to that kind of criticism, obviously that language would have to be embodied in a motion and certainly would have to be permitted during the course of the debate, because I cannot see how the House could address itself to a substantive motion making that kind of allegation and complaint unless it was prepared to deal with it in specific terms. That question seems to remain partly open, but in any case that is my preliminary opinion.
The last area of guidance which the hon. member for Northumberland-Durham sought related to my own ruling of April 19, 1977, in which I indicated that, in order to found a question of privilege, the allegation would have to be not simply that the House had been misled, but had been deliberately misled. Whether or not in fact that necessarily constitutes a question of privilege, what I was endeavouring to say on that occasion was that certainly an allegation that the House had been misled without deliberateness does not constitute privilege on the face of it. If the action was deliberate and was then the subject of a substantive motion as required by the precedents, it might be argued by the mover of that substantive motion that rather than having the substantive motion dealt with in its regular place under private members' notices of motions, for example, it ought to enjoy the precedence accorded to privileged motions. Under certain circumstances that argument might prevail. In other words, once the matter is properly embodied in a substantive motion, it can be argued that it touches the privileges of members of the House. Whether that argument would prevail would depend on the original circumstances. What I was attempting to put forth in that ruling of April 19 was precisely that.
Certainly an allegation that the House has been misled unintentionally does not raise a question of privilege. Whether it would do so when the allegation in a proper substantive motion is that it was done deliberately, would be subject to argument, and I think possibly would accord to such a substantive motion. Certainly that has been the practice in the past where such a substantive motion has been put forward; obviously the House has been readily motivated to deal with it as a matter of privilege and give it the priority that privileged motions do enjoy. Therefore I think it was quite proper on

February 28, 1978

April 19 to indicate that it may possibly be privilege if the allegation is of deliberately misleading and contained in a proper substantive motion. That was what I was endeavouring to put forward at that time.
I would think, therefore, that the action would be to strike out the hon. member's notice of privilege because it contained the word "deliberately", on the basis of clear precedents. It is entirely without prejudice to the hon. member to raise the matter again in a substantive motion after he has had the opportunity to consult these precedents. Whether or not that course is open, in the light of the interventions that have already taken place by the Minister of Finance in the proceedings to this date, in which the Minister of Finance indicated that he did not mislead the House on those occasions, would have to depend on other precedents in which, when matters of this sort or similar to this have been raised a minister or a member has risen in his place in the House and said that the House was not misled, or, if it was misled, it was certainly not done intentionally. Under the practices of this House his word has always been accepted, and the matter has always been finalized. Since the minister has already said that, whether the matter ought to go further is something only further reflection can determine. However, I did want to give to the House and the hon. members involved the benefit of my examination of these precedents.
The matter remains open for further action which might be recommended, but it would have to be done in accordance with those precedents rather than in the manner which has been attempted up to the present time.


POINTS OF ORDER
Mrs. Simma Holt (Vancouver-Kingsway):: Mr. Speaker, I rise on a point of order. Yesterday I spoke on a motion relating to housewives' allowances, and I feel compelled now to correct an error in Hansard at page 3265. I referred yesterday to legal secretarial salaries and compared them with the income per case of their lawyer bosses. I used an old salary rate of $8,000 a year. It should have been $11,000 to $14,000 for what lawyers describe as a "good secretary". The hon. member for Toronto-Lakeshore (Mr. Robinson) challenged me in the debate. I would like the record to show that I know he is very generous in recognizing his secretary's remarkable management talent.


MR. BAKER (GRENVILLE-CARLETON)-CHANGES IN ESTIMATES
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I rise on a point of order. Just as a preliminary to my point of order, I gather from what Your Honour said with respect to the previous matter raised by the hon. member for Northumber-land-Durham (Mr. Lawrence) that the matter is open to
A IB Reports
argument and that Your Honour put precedents before the House so that we can examine them and perhaps speak later. I gather that is the case.
My point of order relates to something which arose during the question period with regard to the fact that, according to the announcement of the Deputy Prime Minister (Mr. Mac-Eachen), estimates will be referred to the appropriate committees tomorrow. During the course of the question period the hon. member for Rosedale (Mr. Macdonald), in, I suppose, his last question in this House, raised with the Secretary of State (Mr. Roberts) who, I suppose gave his penultimate answer in this House, the fact that there is some mistake in the estimates and that the estimates of the Secretary of State would be increased. I think the words used were "raised substantially".
That raises a point of order with respect to the reference tomorrow, and that has to do with whether any other ministers have approached the President of Treasury Board to advise him whether there will be revisions, either upward or downward, in their respective departmental estimates. Prior to any reference being made-preferably today, and certainly tomorrow-there should be a statement made or, on the reference, something substantive should go to the committees so that the committees and this House can be aware of what the situation might be. I raise this as a point of order because I think it deals with propositions with respect to the reference of the estimates tomorrow. Perhaps the President of the Treasury Board can deal with this.


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, I will certainly undertake to examine that situation. This is the first indication I have had that perhaps there was a printing error. However, I will check into this and try to give the hon. member a reassurance at the appropriate time.




Mr. Ed Lumley (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, pursuant to Section 17(2) of the Anti-Inflation Act I wish to table, in both official languages, copies of two reports sent to the Administrator by the AntiInflation Board.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
[Stage Direction]
February 28, 1978
AIB Reports
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: 956, 1,127, 1,136, 1,218, 1,256 and 1,257.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Howie: 
EXTERNAL AFFAIRS EXPENDITURES IN THE CONSTITUENCY OF NICKEL BELT
[Stage Direction]
Question No. 1,127
Mr. Rodriguez:: For each fiscal year since 1970, what amount was spent in the Constituency of Nickel Belt by the Department of External Affairs and those agencies that report to it?


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: Statistics are not available as departmental expenditure records are not maintained by region, municipality or constituency. However, it is estimated that departmental expenditures in Nickel Belt are negligible.
In so far as the Canadian International Development Agency is concerned, the reply is as follows: Records are not maintained on this basis.


TREASURY BOARD EXPENDITURES IN THE CONSTITUENCY OF NICKEL BELT
Mr. Rodriguez: For each fiscal year since 1970, what amount was spent in the Constituency of Nickel Belt by Treasury Board and those agencies that report to it?


Robert Knight Andras: In so far as the Treasury Board Secretariat is concerned: Nil.
NEW AND REINSTATED RECIPIENTS OF WVA/CWA AND DISABILITY PENSIONS


Mr. Marshall: 1.	How many veterans were added to the rolls of WVA/CWA recipients as (a) new recipients (b) reinstatements?
2.	How many WVA/CWA recipients have been removed from DVA rolls classified as (a) discontinued (b) deaths (c) in suspension?
3.	What are the figures for disability pensioners?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: For the fiscal year 1976-77.
1.	(a) 13,717; (b) 4,097.

2.	(a) 4,946; (b) 5,109; (c) 4,658.
3.	New awards, 1,900; Reinstatements, 179; Discontinued, 109; Deaths, 4,795; Suspension, 268.


COMMONWEALTH
Mr. Lambert (Bellechasse): As a member country of the British Commonwealth, is Canada required to pay an annual contribution and, if so (a) in what amount (b) to which country or
agency?


Maurice Dupras: 
CANADIAN CONTRIBUTION TO UPKEEP OF BRITISH CROWN
Mr. Lambert (Bellechasse): Is Canada called upon to contribute each year to the upkeep of the British Crown and, if so (a) in what amount (b) to which agency is the amount paid and by what date is it required?


Maurice Dupras: No. (a) Not applicable. (b) Not applicable.


PRIVILEGE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I wish to raise a question of privilege. Today as never before the House of Commons is under close scrutiny in all parts of Canada. Over and over again in the last few months Canadians have shown a deeper interest in the democratic system and in the preservation of parliamentary government.
Not having the knowledge which comes from years of experience in the House of Commons that on occasion we do say things we ought not to, some Canadians have pointed out that they find it difficult to understand some of the raucous behaviour that takes place. We understand it; they do not. Indeed, in two schools to which I have spoken, students in grades 11 and 12 have asked, "Is it actually parliamentary? After all, if we acted that way, we would not be in school very long." I mention that as a preliminary to the matter I wish to raise.
Like all hon. members, I am one who has a deep and abiding affection for this institution. I think it was some 12 years ago that I suggested that something should be done to preserve the right of private members to bring before the House matters which they regard as being important, nationally or provincially. Following that, over a period of time the procedure under
February 28, 1978

Standing Order 43 was developed. In itself it is good. It enables hon. members, particularly private members, to bring before the House matters of importance to them and the country. Without Standing Order 43 they would be denied that opportunity.
However, my hope that Standing Order 43 would prove to be something worthy of the institution has been degraded to the point where, when a motion under Standing Order 43 is raised, one solitary member can say "no"; "nyet", as if this were the Duma. When that happens, nothing further can be done. I am not going to identify anyone because I do not want to give him notoriety. However, today I had my eyes on him. I just happened to be looking in the direction of the Prime Minister (Mr. Trudeau) and some distance behind.


Some hon. Members:: Oh, oh!


John George Diefenbaker: There is no identification in that, unless the hon. member wishes to be identified. In almost every case one person says no. We might as well have a gramophone record here. That would be more in keeping with the technological development of this House.
The point I make is this: Standing Order 43 has been fractured in consequence of the fact that one member can simply deny the opportunity for the discussion of important matters. Are we going to have the House of Commons denatured in this way? Is it not about time we made a rule that a group of members may say no by simply rising? Perhaps the number should be increased to ten. In that way Standing Order 43 could provide a better opportunity for private members. After all, that is one of the purposes of the House of Commons.
I know that during your term of office Your Honour has done everything to uphold the rights of private members. If Standing Order 43 is not changed, it will simply be a caricature of what it should be, and I suggest that before this session is over, and before Your Honour completes his present term of office, an opportunity ought to be made available to discuss this question so that parliament will become effective and so that the voice of one, even with all the attributes of a gramophone, will not be effective in stultifying this institution.


Mr. Speaker:: Order, please. Before giving the floor to the hon. member for Kamouraska (Mr. Dionne) I want to comment briefly on the two points raised by the right hon. member for Prince Albert (Mr. Diefenbaker) that I am sure are very much on the minds of members of the House. The first relates to decorum. I think all members have had inquiries from the public who have now had an opportunity to examine the proceedings of the House to determine which of our parliamentary traditions are essential to the expedition of the nation's business in this chamber, and which are not. I think this is an important matter of introspection for all hon. members.
The second point relates to the question of some of our procedures, those specifically singled out for attention being
Bank Act
applications pursuant to Standing Order 43 for the unanimous consent of the House to deal with matters of urgent and pressing necessity. There are, of course, arguments on both sides about whether regular business should be set aside for motions advanced in that way. It is not for the Chair to go into them at this time.
I think we must all observe, however, that often the rules under which we operate are there for a specific purpose and sometimes are being stretched in order to accomplish a purpose not envisaged in our procedures but which is nevertheless an important part of the life of the individual member of parliament. I think particularly of the opportunity to address the House in a brief and specific way on grievances which may not be of national importance but which may be of great importance to the individual member. It is only with the utmost difficulty that time can be found in the schedule of parliament, which is already overcrowded, to provide for that. As a result, questions are often used in that way, and applications pursuant to Standing Order 43 are often used in that way. These are not satisfactory replacements for a grievance procedure of some sort which would not only give the opportunity to put the matter before the House but to get some sort of response in the circumstances on whether anything could or should be done. In my opinion we lack that procedure and often find ourselves in circumstances where we use other rules to accomplish the same purpose, but not in a very satisfactory way.
If the question of the satisfactory nature of applications pursuant to Standing Order 43 is to be examined, the more general question to be considered by the Standing Committee on Procedure and Organization is whether it is going to be altered substantially to deal only with matters in which some other form of the withholding of consent might be done. I would hope that the committee would try to find some other method by which legitimate attempts to raise matters of serious concern might be provided for the individual member of the House.



GOVERNMENT ORDERS

[Stage Direction]
[ Translation]

[Stage Direction]
AMENDMENT TO EXTEND OPERATION TO APRIL I, 1979 The House resumed, from February 27, consideration of the motion of Mr. MacEachen (for the Minister of Finance) that Bill C-16, to amend the Bank Act and the Quebec Savings Banks Act, be read the third time and do pass.
Mr. Charles-Eugene Dionne (Kamouraska):: Mr. Speaker, last evening, before the House adjourned, I explained during the debate on Bill C-16 the damage caused on our planet by this financial system which dominates virtually the whole world, and I made suggestions on possible changes. I also cited

February 28, 1978
Bank Act
in this context the view of some authorities on the subject who also deplored the disastrous effects of a system which does not meet the present needs. So I would like to continue by suggesting first that whe should necessarily put some order into this disorder which is so harmful to mankind as a whole.
An end must be put to that dictatorship by making financial credit truly represent the real credit in our country. In other words, by making money account exactly for the production capacity of the country, money would be produced with the same dynamism as production itself; as real credit belongs to the community, financial credit would also belong to it. Society itself would attend to dividing the credit of the money that entitles to goods. Money would then be no more of a problem than production itself. It is made by men, who are also citizens, as I said last night, and not by angels: money is produced by men. Money would go to everyone since production is meant to meet needs and everyone has needs. Society would see to it that the flow of production is maintained by giving adequate reward for work, as is done today through the intermediary of employers who pay their workers a salary, and by the reasonable profit margin the masters of production would continue to take through their prices. Society would distribute among its members whatever would be left of the financial credit representing production.
The technique, to that end, has been described repeatedly in the House of Commons by the Social Credit members, and outside in the works of authorities in the matter, such as Major Douglas and several others, in newspaper articles by people who have really studied the matter, by citizens concerned about finding a solution instead of power-hungry politicians. In any event, ignorance of the solution to money problems cannot be accepted as an excuse. Our legislators know or should know that the money supply can be increased or decreased at will, at very little cost; still, too many people still believe it would be unhealthy to get the system to work.
Last night, I had occasion to quote a few excerpts from a speech given by Father Georges-Henri Levesque, a Dominican. He is well versed in the field of making money and especially in that of the ravages it that famous system has caused on our planet, if you will. Let me quote another excerpts from that speech. I quote:
Finally, money must serve freedom. Money, which can be a bad master, the tyrant of the greedy man, the inhuman despot of a soulless society, can also become a marvellous instrument of liberation. But, one must have the means to be free. The hungry are not free before the hand that proffers bread. At least a minimum of property is required to guarantee personal freedom. The freedom and dignity of those who fear neither necessity, nor unemployment, nor disease nor old age. The freedom and dignity of all social classes become more prosperous. The hoped for freedom and dignity of all peoples, finally!... thinking more specifically of developing countries.
Their liberation will not come only through their own efforts, no matter how valiant they are. It will come as much if not more from a new distribution and apportionment of the common wealth more in harmony with its prime purpose which is to serve mankind.

More than any other in world history, our western society has created great amounts of riches which take the form of money or of things provided by money. In spite of the tremendous waste which now changes the outcome of its work into death and pollution, never before did it have such capacity for producing and accumulating. The power of money is ever expanding as man increases his control over the universe. It is up to us, to each of us, to see to it that this tremendous power makes money a better or, unfortunately, a worse instrument for mankind. Conversely, if we make money our master, it can only be a bad one.
The reason for this is first and foremost that men should not be commanded or dominated by money. When it gets such power it turns into a tyrant because, as I said before, it should only be considered as a tool, a medium we have produced. But sometimes we rush to submit to it, to estrange ourselves, to become its servants. Initially, with great joy and excitement, but progressively with a frenzy we do not want to end. We make it, against its purpose, a usurpator, a tyrant, a despot, an idol, a god. Yet, it is from us, and from nowhere else, that money takes its power. Little by little we let it take over us, like an interesting vice. Of course we complain of this weighty yoke, but with a secret perversity not devoid of pleasure.
Basically a bad master, money can become an even worse master because it is naturally hard. Even though some forms of it may have the flexibility of paper, they do not make it more human. Little by little overcoming our spirit and our heart, it dries them up, and conveys to them its own hardness. One need only think of Scrooge.
As I was saying in the earlier, this only gives us an idea of the ravages caused on this planet and in this country by a defective system that must be changed. We have reasons, many reasons. That is why I sometimes wonder how come some men, scientists, competent people, people who have taken all sorts of courses, who have had a university education and have acquired all kinds of knowledge in many fields, or so they think, do not search for the cause of most of our problems. At a time of upheaval in many fields: education, management-labour relations, debt, proliferation of taxes, permissions, restrictions, it is imperative we find a flexible way to allow the abundant goods that exist to satisfy the needs that are there.
Obviously, this adaptation of goods to needs would require a fundamental change in the goods distribution system. That is normal. That is why we should not stay with the old methods that have given us the well known results of inflation, deflation, increasing pollution, heavier taxes, a rising unpaid and unpayable national debt under our present system.
All those facts are so obvious nobody can dispute them. Why should we keep looking for invisible solutions in a confused system? Thousands of cases of affliction of all sorts lead us to the logical conclusion that the main cause of current economic and social disorders lies in a bad distrubition of wealth. Each thing must be put back in its right place and be given its true value. First, it must be recognized that men, women and children are human beings. In order to lead a decent life, they need wholesome food, warm clothing, proper care and adequate shelter.
February 28, 1978

In His wisdom, the Creator provided on earth everything necessary for mankind to ensure the survival of each and every one of its members. And it is undeniably proven that man's creative genius, inspired by a host of components in nature, did succeed in perfecting the productive mechanism to unsurpassed levels. At times, even our knowledgeable theoreticians, or those who pretend to be, have tried to explain to us that we were struggling with an overproduction crisis. Let us remember the years 1929 to 1939 in particular. The facts have clearly demonstrated that it was rather a crisis of under-consumption.
One will recall that the politicians of the day did not find any other solution than to destroy the production at a time when the population went hungry. Instead of instituting a price adjustment mechanism through a compensated discount to the producers and allowing the consumers to use the many goods which existed then, the choice was made to destroy real riches and goods to maintain the prices represented by figures. Why did they give such importance to figures and left aside what is important. After all, it is with goods and things that people live. It is not with figures. Figures are supposed to play a prevailing role provided they be adjusted. One can then enjoy the ownership of existing goods but to do so, their prices must be adjusted first.
The same system still applies in 1978. The population does not feed itself on par with the amount of food that, good God helping, our farmers manage to produce. Canadians do not get their housing depending on the quantity of lumber, stones or cement available or any other building materials that Canada produces in quantity. The population does not satisfy its clothing needs according to the variety of clothing produced in our manufactures or imported which is displayed in the stores or stacked on the shelves of our shops. The same thing applies for medical care, transportation, comfort under its most various aspects. Under the present system, our fellow citizens get food, housing, clothing or medical care according to the amount of money which each one of them has in his wallet. This is what Socreds call a stupid system.
The idea is not to change everything or set up a national printing office as some simplistic minds would have us say. The institutions are already here, it is just a question of adjusting the values, a matter of accounting through which a financial device will be established to reflect the real riches by taking into account the dignity of the human person, the value of the goods which can be produced in sufficient quantity to provide food, housing and clothing to the population. It is quite surprising as I mentioned previously, to see that such a great number of researchers in many fields, particularly in the economic field, have not yet succeeded in developing a device for the distribution of a large production that only awaits to be ordered to satisfy latent needs. Surely it is not on the scarcity of adequate means of transportation that this situation must be blamed.
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We have now reached the point where it is possible to spend millions of dollars to travel to the moon for the mere purpose of finding out what is going on on earth's satellite, while on earth itself thousands of human beings are suffering through lack of proper food, lodging, clothing and care. It is high time for the politicians who are now at the helm to find alternative solutions to the plans which have been followed up to now and which have only succeeded in favouring the strong at the expense of the weak. We do not claim that the Social Credit philosophy is a panacea, but it should very likely eliminate a great many of the causes of our current ills. In an article dealing with employment and income distribution which was published on January 17, 1976, Mr. Francis Blanchard-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to inform the hon. member that his allotted time has expired. He may continue only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Charles-Eugène Dionne: I thank my colleagues for their generosity and their willingness to continue to hear my version of the present system.


An hon. Member:: To listen to the truth.


Charles-Eugène Dionne: My colleague says, to listen to the truth. So I was referring to an article by Mr. Francis Blanchard, Director General of the International Labour Organization and Chairman of the Institute for Social Sciences. He said, and I quote:
Employment and income distribution are the most urgent and serious problems now facing developed as well as developing countries.
In that article inspired by a lecture he gave early this year before the New Delhi National Labour Institute the ILO director general examines various aspects of those problems, the efforts that have been made to date and what still remains to be done to solve them, and he talks about a new fight against extreme poverty and unemployment, pointing out that it is obvious today that the massive post-war economic expansion did not significantly improve material living conditions for a vast multitude of individuals. The absolute number of people in situations of extreme poverty continued to increase; the huge disparities in incomes and income opportunities remained and even widened in many countries during that period. Those unexpected results from three decades of development efforts compel us to reconsider the strategies and policies decided upon in the past and to rethink entirely the problem itself. It is unfortunate to see that people in general do not stop long enough to think in terms of heritage and heirs. Yet science and industry are the intellectual heritage of nations, the illustrated Webster of the 20th century.

February 28, 1978
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Science as applied to agriculture, industry, trade, communications, has made enormous progress particularly in the past century and a half, and more particularly in the past forty years. Man had long since learned to use simple machines to heighten the strength of his muscles and that of animals-he also used a few inanimate forces like wind and water. But since he has learned to use fossil solar energy in the form of coal or oil, since he has been distributing through simple metal wires the power of falling masses of water across hundreds of miles, since chemistry went from the laboratory to industry, the progress made cannot be measured, the problem of production has been solved. Realizing what is happening in the area of production and consumption and particularly the means of distribution used, we sometime wonder whether the leaders of our society are blind or stubborn. They do not seem to have yet understood that we should be heirs rather than born losers.
He still believes that a man must be poor and find it very difficult to earn his living. We speak about the legacy gathered by generations, of the land conquered through the toil and ingenuity of mankind; they will reply that we are born under a blanket of debts. Wealth is overflowing, but a false, stupid, deceitful and fanciful system turns heirs into debtors. According to their argument, Champlain and the brave settlers established the faith, farming and civilization in Canadian forests; their successors three centuries afterwards have improved agriculture, have built cities, modernized industry and all that series of workers would have toiled on the Canadian soil to leave to their issue a legacy of debts, misery and hardships. But this is really absurd! This is why I insist we should refrain from studying the terrible cause of all our troubles. Again I say it is the financial system, the money made by man which has been badly distributed and that is the matter which should be investigated.
For several years now our politicians no longer refer to the payment of our national debt, as I pointed out last night, they can hardly manage to pay the interests which reach several billions each year. We should not forget that it is only the interests on the public debt. We are surprised by the rising cost of living. We do not stop to think that higher interest payments are one of the main causes of the cost of goods and the soaring cost of living. And all this is due to that financial system which should be altered. Most provincial and municipal governments have to pay interests on their debts and they hardly manage to meet them. From our woods, our lands, our manufactures, we can hear someone making the following parody: You will pay your debts and your taxes by the sweat of your brow. [DOT]


Lorne Edmund Nystrom: Mr. Speaker, I wish to make a few comments on Bill C-16 which extends the date on which the Bank Act expires from March 31, 1978, to April 1, 1979. I am very much in favour of this bill passing. I am in no hurry to see a new Bank Act. If what I hear is

correct, the new Bank Act will not be very favourable to ordinary Canadian citizens. Therefore we need more time to talk about what should be in the new Bank Act to help the ordinary people of this country. It is on that issue I want to spend the next few minutes.
I believe that under the new Bank Act the government will allow into this country what one might call suitcase banks. The government would like to see a lot more banks come into Canada. They would obviously be foreign-owned banks, most of which would be based in the United States. I contend there are enough banks in this country. We do not need to bring in more. If more banks do come into Canada, I can visualize a lot of problems.
If we have an open door policy with regard to banks, the banks that will locate here will primarily be branches of the huge banks in the United States or large multinationals around the world. There will be a lot more competition with the Canadian chartered banks for the big accounts such as Inco, CP Rail, Imperial Oil and the like. Increased competition will mean lower profits for the Canadian banks than would otherwise be the case from the source.
We now have legislation in this country whereby our banks are Canadian. That is an important part of legislation passed in this House many years ago.
If foreign owned banks come into this country, their prime target will be to get the accounts of the large companies in Canada. They will not be interested in servicing the ordinary person who lives in Selkirk, Manitoba; Yorkton, Saskatchewan; Montreal, or anywhere else in this country. The Canadian banks will have to compete with these new banks for the business of these large companies. In order to be more competitive they will have to make less profit. They will make their profit by charging higher interest rates on consumer loans and charging higher fees and service charges to the ordinary citizen banking his money or making a loan. The service charges being paid by the ordinary person in this country will increase after the new Bank Act comes into force.
If what we hear is true, the government is going to open the door to allow more banks, the suitcase bankers, the foreign bankers, into our country. I think that would be a very big mistake. One of the prime prerequisites of our banking system in Canada should be to have that banking system act as an instrument of national policy. I think it should act as an instrument of national policy in the same way as a transportation system must act as an instrument of national policy. The government must maintain control over that system. It is one of the things which must remain within the authority and under the jurisdiction of the federal government. If we were to decentralize the banking system the difficulty of maintaining good economic planning would be more difficult.
The main point I am making, Mr. Speaker, is that banks must be an instrument of national policy and they must be used as such. If we are to allow huge multinational banks into our country from offshore it will be more difficult to use banks
February 28, 1978

as vehicles of national policy and economic planning. It would mean that the banking industry would be more fragmented and more difficult to direct by the Government of Canada on behalf of all the people.
We need to retain our control for all kinds of reasons. First, we are a country which is undergoing many economic difficulties; one need not talk at great length about our economic problems today in Canada. We know there are many difficulties, and if we are to solve them we need strong intervention by the government and strong intervention on the side of public planning. I know there are many hon. members, not all of them in the Conservative party, who are starting to look the other way. I know that during the Liberal convention held in Ottawa last weekend many of the delegates were talking about less government involvement and less government intervention in the economy. They felt that was the way to make the economy go well. But I suggest it is not.
If we are going to leave that to the private sector which, in the main, consists of the large multinational corporations, they will not do much for the ordinary citizen in our country. Their main goal is obviously to maximize their profits and to make their shareholders happy regardless of where their shareholders may live. There is absolutely nothing wrong with that if that is the type of system under which you wish to live. But I suggest to the House that in a country like our own that is just not going to work. Most of our economy is foreign owned and foreign controlled, of a resource-based economy in Canada where our resources are dug out of the ground here and are shipped over to the United States or somewhere else to be refined or manufactured-where, of course, the jobs are-and the profits will be drained out to those areas and we shall not have the benefit of any development of secondary industry based in Canada.
Perhaps even worse than that, though, we shall not see development of our country occur in an equal and uniform way. An hon. member from the maritimes asked a little earlier what was wrong with that. I tell him that that is why his region of the country, which is really being hit hardest, does not get some of the development. It is because the multinationals and the big corporations in this country have too much control.


An hon. Member:: You are wrong.


Lorne Edmund Nystrom: When I have finished I hope the hon. member will get up and speak. It would be interesting to see him take the opportunity to debate that point with us. If we had more government intervention and more planning in our economy, the maritime provinces, the eastern part of Quebec, the prairies and the north would be a lot better off.
I maintain it is not profitable to put plants in places like the maritime provinces if one is guided strictly by the profit motive. This is because they are a long way from the large markets and because we have a government which believes that we must have a user-pay transportation system. That, too, is part of free enterprise-you have to pay for what you use. If you hold that type of philosophical belief you are not going to develop equally those parts of our country which for numerous
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reasons are disadvantaged, through no fault of the people who live there. If you employ government intervention in the economy, for example in the area of transportation, where freight rates are equalized, so that no discrimination would exist against the maritimes and the north, then you would have a much better chance of making this country a sensible and well planned place in which to live.
Perhaps the best way of describing our country would be to use the analogy which my father used to use when I was quite young, in describing how our country is run. He saw this country as a huge cow pasture and in the pasture was a cow facing west eating the resources of the prairie. Those resources were processed within the cow and the cow was milked over Toronto. That was where all the cream went. The tail end of the cow was over the Atlantic provinces and part of Quebec. You know what was happening at that end of the cow. Anyway, that analogy is not far from the truth. That is the type of system you have if free enterprise takes over this country. You get profits any way you can without any regard to what it will do to people in the outlying areas. I would like to see some of the more capitalistic members, like the hon. member for Moncton (Mr. Jones) and the hon. member for Stormont-Dundas (Mr. Lumley), get up and refute this in as intelligent a way as I put it forward. Let us look at our country. We have never had any socialist government running things in the hundred and some odd years we have been in existence. Still we have these high inequities existing here. Look at the unemployment rate in the maritimes. Consider the average standard of living in places like Newfoundland. That cannot be as a result of the socialist system; it is the result of the systems we have always had in this country. What I am suggesting is that it is time we had an alternative to what has been happening; we need stronger intervention by the public in the economy in order that we would more equitably distribute our resources among the many parts of our country. Transportation is one of the very important tools to be used to this end and, of course, another which comes to mind is the use of the financial institutions and the banks.
We must do more to direct capital, to direct investment in Canada. Other countries in the world do so and the results are very good. In fact Canada is one of the very few countries in the world which does not have investment controls and the direction of capital. Just look at some of the social democratic countries such as Japan, France, and even Italy. Japan and France plan their economy in a much more interventionist sense than we do. They have in power governments equivalent to our own Liberal government, and equivalent to what a Conservative government would be like. Of course on the other side of the question I can think of many democratic socialist countries like Sweden, Norway, West Germany and so on which have for years intervened in the economy in order that all people under their economies are much better off and are much more equally served. One of the advantages we have in this country is that we now control the banks in Canada. Let us not allow that to slip away from us.
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And before I rose, Mr. Speaker, we heard an hon. member from the Social Credit Party of Canada who referred to many problems we have in our economy and which I too recognize. We in Canada are now facing an inflation crisis and an unemployment crisis. We are also facing a crisis on the matter of national unity, and the right hon. Prime Minister (Mr. Trudeau) of our country has been in power for the last ten years. And before he got to power there was no Parti Quebe-cois, which is the main factor in the national unity crisis. Mr. Speaker, I suggest that one of the reasons there is no national unity in this country lies in the whole economic problem. I have already mentioned unemployment and inflation. What we need in this country is a system of equality, equality between all regions of Canada, equality between all individuals, and the instrument for that equality is the Bank of Canada and the transportation system.

That is why it is so important, when we are debating issues such as that before us today, that we talk about the philosophy of how we wish to see our country developed, the philosophy of how we want our institutions to play their role. It seems to me that our financial institutions are among the main tools one needs in planning a country. I have referred also to transportation, to food, and to agriculture as among just a few very important elements which must be taken into consideration in this direction. Another which comes to mind is energy, and the gas and oil industry.
Another consideration to which we must turn attention when considering this subject is what we should be doing with our banks. I have already mentioned controlling investment, controlling profits, and these things should be within the public hand; they should be controlled more closely by the public of Canada. When the new Bank Act is brought in, one should consider the fact that Canada will have more foreign banks. That will hurt ordinary Canadians.
Hon. members should give some thought to the establishment of a Canadian Crown bank which would be publicly owned. Some of the more traditional free enterprise hon. members, excluding the hon. member for Spadina (Mr. Stol-lery), will perhaps become nervous when contemplating this. They should be reminded, if Canada is faced with a situation where there are more foreign owned banks receiving the large Canadian company accounts, that the banks already in existence will have to increase their charges. In order to compensate for that, the possibility of a Crown bank should be considered. It could be established very quickly by channelling federal government accounts to that bank. Many of these accounts are gravy accounts. They are fat and juicy. Banks make a lot of money on those accounts.
When dealing with federal government accounts, one is handling public money. I can see no reason why those accounts cannot be taken away from the private banks and channelled

into a Crown bank in order for its business to be commenced. In this area I am thinking of various pension plans, the Canada Pension Plan, CMHC, farm programs, the Farm Credit Corporation and so on. The government is involved federally with an immense amount of money. Why not channel that money to a publicly owned bank? A Crown bank could be the vanguard in planning our economic system. It is public money. Why cannot it be used in the best manner to plan on behalf of Canadians?


Mr. Whittaker:: What about lower interest rates?


Lorne Edmund Nystrom: This would be a great way to lower the interest rates. I am glad the hon. member for Okanagan Boundary (Mr. Whittaker) mentioned this. If all the government accounts are in a Crown bank, probably the interest rates for the ordinary Canadian will be lowered, as well as the service charges. If Canadian banks are to compete with multinationals and foreigners for the accounts of big companies, it will be necessary to lower their interest rates and service charges. A profit will have to be made somewhere. That profit will be made by charging the hopeless, small Canadians who have no way to fight back because they are facing an oligopoly. If a Crown bank were in existence, then those people would have a choice. They could do their banking in a Crown banking system. Hon. members of the Conservative party should not consider that idea as being too radical. It was that party which brought in many of the Crown corporations which are now in existence, such as the Canadian National Railways.


Marcel Joseph Aimé Lambert: They are not banks.


Lorne Edmund Nystrom: No, they are not banks. In the days when the CNR was brought into existence many Conservative members felt it was an outrageous scandal. Also many members of that party felt the establishment of the Canadian Broadcasting Corporation was an outrageous scandal as well.


Mr. Whiteway:: Right!


Lorne Edmund Nystrom: I hear an hon. member saying, "right". I hope that is said in front of Conservative party constituents. In the riding of the hon. member for Selkirk (Mr. Whiteway), the CBC is very popular and well liked indeed. For many years in the House, when a transportation policy was being discussed, members of the Conservative party chastised the New Democratic Party for talking about public ownership of parts of the transportation system such as the railways. It was not too many years later that Peter Lougheed of Alberta decided to nationalize one of the airline companies, PWA. That province has a Conservative government. I have not heard too many members of the Conservative party rising to chastise Peter Lougheed for nationalizing that airline.
That is what my party would like to see happen in the Canadian banking system. The establishment of a Crown bank should be considered. If that were done it would be only a matter of a few years before that bank would be one of the largest in the country, and only a matter of a few more years before it would become the largest. I suggest it would provide
February 28, 1978

a valuable tool to the government with which to plan the economy so that there is a much more balanced economic system for everyone.
I realize this suggestion goes against the grain of the majority of hon. members. That is why I am a member of the New Democractic Party. Most members like to see the operations of corporations go unimpeded. They like to see the elephants having all the liberation they want when they dance among the chickens in the chicken house. That is the philosophy of the other parties. That type of system would not help the ordinary Canadian. Ordinary Canadians require a system where the government would have a tool to plan our economic needs.


Mr. Jones:: Some tool!


Lorne Edmund Nystrom: The hon. member for Moncton seems to be content with defending the government today. I see the Minister of Finance (Mr. Chretien) is listening very seriously.


Mr. Knowles (Winnipeg North Centre):: The size of the party of the hon. member for Moncton has doubled today.


Lorne Edmund Nystrom: Yes. Perhaps he will join the Liberal party. 1 see the Minister of Finance taking out the Liberal party membership book. Perhaps he would be pleased to welcome the hon. member.
The record of governments in the past has not been effective in terms of reducing inequities in Canada. Some Liberal members are disappointed at how the Department of Regional Economic Expansion has failed to narrow the gaps between the haves and the have-nots over the past eight or ten years. One reason for that is that the old free enterprise system has been relied on because it was considered to be the system which would heal the country. The government, like a giant Santa Claus, has been willing to hand out carrots, bananas, and Christmas gifts to companies to solve problems. But once the gifts run out, there is no reason for the companies to expand or to remain, if the system is not changed. Banks should be used as one means for changing the system under which we operate in Canada.
When we talk about the Bank Act we must consider the credit unions and the co-operatives. I come from a province where the credit union movement is very strong and popular. In the province of Saskatchewan, perhaps nine times out of ten the credit unions have done more for the ordinary citizens and the small communities than the banks.

And I think the same is true in the province of Quebec with the caisses populaires.

I think too, when we talk about banks, we must make sure the legislation pertaining to credit unions remains as it is so that they can operate in the way they have been set up and are supposed to operate. Historically credit unions have played a valuable role in the development of Canada by assisting ordinary people and the communities in which they are located.
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These are a few things which are important to mention when Bill C-16 is being considered. This bill will extend the old Bank Act for one more year in order to give the government, and the people of Canada, another year to think about what they want in the new Bank Act which is to come before us. I do not want this bill to be held up, but when hon. members rise I hope they talk about the general direction in which they want to see our country go, and the general role banks and financial institutions can play in the development of Canada to make it a better place in which to live.
We must think about how we can make Canada a much better country for each and every one, regardless of economic background, colour of skin, or in what part of the country they live. Canada should not be made a better country only for those who have money, who happen to have inherited wealth or who have been given, by the grace of God, more luck or intelligence than others in order to benefit from the free enterprise system as we know it. It is wrong when people like the president of the CPR, Mr. Sinclair, earn approximately $330,000 a year, plus the other benefits which he receives. I think it is wrong when some people in our country make so much money and when at the same time there are so many Canadians living in absolute poverty.


Joseph Jacques Jean Chrétien: What about baseball players?


Lorne Edmund Nystrom: I agree completely with the Minister of Finance. Some of the salaries paid to baseball and hockey players are outrageously high. I think the former premier of Manitoba had a much more decent philosophy when he suggested that management should be paid no more than two and a half or three times the salary of the workers who work in the plant. That is the direction we must take in this country. We would create a much more decent society if we had other priorities than simply making a hell of a lot of money. This is what is wrong in this country-the worship of the almighty buck. When you believe in that, you start trampling on people and warping your priorities.


Leonard C. Jones: Yes, take away people's initiative.


Lorne Edmund Nystrom: I am glad the former mayor of Moncton mentioned initiative because one sure way to kill initiative in people is to keep them in poverty, keep them down in the gutter, with no money to buy such essentials as food and shelter. If you want people with initiative, make sure they have the basics in life. Once you have those basics in life, you have a lot more initiative than when you have to live on welfare or on unemployment insurance. That is one way of killing initiative in our country. You certainly have more initiative among people for whom you provide medicare, public auto insurance, decent old age pensions, family allowances, etc. That is how you give people initiative. If they have the basic necessities of life, they have an opportunity to be more creative and to be more happy with life, and therefore are liable to do a lot more in this country than if you keep them in the type of system we have.
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Members of the Conservative party are very good at criticizing any government involvement in the economy. They say that any intervention in the economy promotes a massive bureaucracy. This is absolute balderdash. All you have to do is to take a look at the federal-provincial conference which was held here two weeks ago. Which provincial government has the smallest number of public servants on a per capita basis? It is the province of Saskatchewan with its NDP government. In Saskatchewan for the last 27 years of the last 31 or 32 there has been a social democratic government.
Which province has the most public servants on a per capita basis? It is the province of Alberta, and Peter Lougheed, the premier of that province admitted that at the federal-provincial conference. And yet we hear members of the Conservative party here saying that any intervention in the economy will result in a massive bureaucracy. I maintain that precisely the opposite is true. Alberta has many more bureaucrats per capita than any other province.


Mr. Kempling:: What about Manitoba?


Lorne Edmund Nystrom: Alberta has many more bureaucrats than Manitoba on a per capita basis. You will find that in any province run by Conservatives there are more bureaucrats. You can even compare the salaries of the bureaucrats. In places such as Saskatchewan and Manitoba the salaries of the public servants are much lower than in Alberta, or indeed in the other beautiful province of the Conservative party, namely, Ontario. This is what we should keep in mind when we talk about intervention. When we talk about intervention we talk about a planning tool on behalf of all the people.
It does not require a very big bureaucracy to direct this country. In many cases it takes fewer people working in the public sector than if they were working in the private sector. That is an argument that has been proven time and time again in the little province from which I come, where socialism has been in practice for 27 of the last 31 or 32 years. I think we should use that province as a model. And we can look to many other countries of the world as well. The Conservative party should look at these facts when they argue, instead of using old rhetoric which comes not just from the depression days but from the 18th century, when debating a bill which will be so important to the future of the country, namely the Bank Act, which will help us determine what kind of economy we want for the years that lie ahead.


Dean Waldon Whiteway: Mr. Speaker, I rise in my place to speak on Bill C-16 and primarily to reprimand the Minister of Finance (Mr. Chretien) but, as has happened so often in recent years, it is difficult to tell where the enemy is, whether the socialists are in front of us or to the left of us.
The hon. member for Yorkton-Melville (Mr. Nystrom) chastised the hon. member for Moncton (Mr. Jones) and wondered whether the hon. member for Moncton was going to join the Liberal party. He also referred to the Minister of Finance taking out his membership. I can remember the hon. member for Yorkton-Melville supporting the Liberal govern-

ment right down the line for 20 months and climbing into bed with them without the benefit of a marriage licence or a party membership. If the hon. member wants to talk about flirtations with the Liberal government, he has only to look at his own record, which is a record of support and one which I find less and less clear because I think it is becoming crystal clear to most Canadians that the Trudeau government is as socialist as those who live under the name of socialists.


Lorne Edmund Nystrom: Be serious.


Dean Waldon Whiteway: That is an odd admonition coming from the hon. member who, I thought, had just spoken tongue in cheek for some 30 minutes. In any event, I would like members of the House to realize what is the situation here today. It is February 28, 1978, eighteen minutes past four o'clock in the afternoon, and today we have nearly double digit inflation in Canada, we have double digit unemployment, and we have estimates, which will be referred to the committees, showing a deficit of $11 billion. On February 28, 1978, we have an 89-cent dollar. Perhaps it is even less than that at 19 minutes past four o'clock, but that is what it was at noon today. We have record government spending, which has doubled in five years.
Our exports dropped last month, despite the assurances of the Minister of Industry, Trade and Commerce (Mr. Horner) and of the Prime Minister (Mr. Trudeau) a couple of months ago that the effect of the devaluation of the dollar would show in increased exports. In fact the reverse occurred in January. Neither the Minister of Finance, who is present now in the House, nor the Prime Minister, has explained that as yet. There is a record outflow of capital from this country to the U.S. I can go on, but let this suffice as a brief background to what is the situation on the twenty-eighth day of February, 1978. With this background, the Minister of Finance has presented to the House, not a new Bank Act, but a bill which asks parliament and Canadians to give another year's extension to the existing Bank Act.
The Liberal party has been talking about revisions of the Bank Act for half as many years as I am old. It has produced white papers on this subject and it has mentioned it in throne speeches. Just five years ago Liberals were on the brink of bringing in a new Bank Act. Yet here we are on February 28, 1978, and there is no new Bank Act. As a matter of fact last night in the House the Minister of Finance, in referring to the Bank Act-which we thought must be a massive document because it took so long to draft it-said the following, as reported at page 3267 of Hansard:
With the permission of the hon. member I would like to tell him that if the bill were ready, I would be tabling it. The bill is being drafted at this time by the Department of Justice.
It is not even drafted. The minister demonstrated he is a concerned Canadian when he said:
I am as frustrated as the hon. member that the bill is not ready.
February 28, 1978

The difference between the frustration of the Minister of Finance and that of hon. members on this side of the House is that the minister has the power to act. He is the head of the Department of Finance, and he is a minister in a government which has a duty to act. Granted, hon. members on this side of the House are frustrated, but we are not the government. If the minister cannot direct his department to get the bill drafted, he should move aside because we in the opposition will take the reins of government and get the job done.
The minister should not come before us with the feeble excuse that the government has been the government for only ten years and that we should not expect so much. For Five years we almost had a new Bank Act. The minister seemed sincere and was almost believable when he said it was being drafted and that the bill was not quite complete. The minister told us that if it was drafted, he would table it immediately. He said he was just as frustrated as other hon. members.
I do not want to mislead the minister. On previous occasions I have pointed out that under the parliamentary system it is the right and responsibility of the government to govern absolutely. It is the job of the government to set fiscal and monetary policies. Regardless of the mess the government has made, I believe it is its responsibility and duty to set foreign policy, and to bring in legislation which gives direction to the country economically and in every other way. Those are the responsibilities of the government, but it is the responsibility of the opposition to criticize, to point out to the government where it has failed and to try to point it in the right direction. If hon. members on this side have attempted to do anything it has been to point the government in the right direction. My friend and an able parliamentarian, the hon. member for Yorkton-Melville, might want to push the government in the wrong direction, but I admire him for at least trying to offer some alternative to the government, however wrong and misguided it might be.
Hon. members on this side of the House are going to do our jobs. We will not simply accept the word of the Minister of Finance when he comes to this House year after year and says the bill is being drafted and that his department is working night and day. The minister is not saying the act is not drafted; he is saying that the government's act is not together. The minister does not know what he wants to do, or, if he does, he does not have the fortitude to put it in the form of legislation.
I cannot believe for a minute that the reason the legislation is not on the table is that the government is running out of time. The reason is that, characteristically, the government is confused. I see the hon. member for Lincoln (Mr. Andres) shaking his head as if to say no. He says the government is not confused. A government with a clear purpose would come to this House on a matter of critical importance to small businessmen and say that it knows exactly where it wants to take the country, but that is not the case here. If government policy was clear, we would have legislation. Perhaps the hon. member for Lincoln will stand in his place later today and tell us that
Bank Act
ten years of Trudeau Liberal administration is not enough time.


Mr. Andres:: You have never had it so good.


Dean Waldon Whiteway: The hon. member says we have never had it so good. Let us ask one million unemployed Canadians how good things are. Let us ask those in the secondary manufacturing industry, and small businessmen who are crying for venture capital and for a new Bank Act, how good things are. These people need tools which would allow them to get on with business. Let us ask Canadians faced with an 89 cent dollar how good things are. Let us ask housewives faced with 11 per cent inflation of food prices how good things are. There are 850,000 Canadian families which do not own their own homes.


William Andres: Ask the farmers.


Dean Waldon Whiteway: Perhaps the hon. member will stand in his place and tell us how great things are in Canada. We on this side of the House have a vision for this country. We want to put Canadians back to work. I hear hon. members opposite mumbling and grumbling that ours is the party of gloom and doom.


Mr. Dionne (Northumberland-Miramichi):: Right on.


Dean Waldon Whiteway: The hon. member opposite says "right on" when one million Canadians are unemployed, when we have record inflation, when we have a devalued 89-cent dollar, when we have confusion in fiscal and monetary policies and when we have record spending and record deficits. If that is gloom and doom, then I am a prophet of gloom and doom. We talk about it, but the government opposite made it.
On the eve of a federal election we will point out to Canadians what they already know. If the results of the administration of this government are gloom and doom, so be it, but we on this side can do one thing hon. members opposite cannot do. We can offer Canadians a different course of action. We can offer not only different personnel, not only a new Prime Minister and not only a new Minister of Finance and new frontbenchers, but also a new direction, new hope, and new policies which will allow Canadians to see a star and to reach up and grasp it. We will offer Canadians job opportunities in order to get the country going again. What is the Liberal solution on February 28? It is, "We are sorry, but we have not had time in ten years to produce a new Bank Act". The government says the Department of Justice is not finished drafting it, but that just does not wash.
This Minister of Finance is being absolutely irresponsible. I have to chuckle at the hon. member for Lincoln. In spite of the critical conditions we have in Canada there are some members of this Trudeau government who can still joke and make light of the fact that one million are unemployed, that we have record deficits, record spending, waste and all the other things for which this government stands. The hon. member can laugh and joke about that. That is the arrogance that typifies this government, but it does not become it.


Jack Burnett Murta: It is coldhearted.

February 28, 1978
Bank Act


Dean Waldon Whiteway: Just before sitting down I want to make it clear that I am not an apologist for the banks of this country. I have no vested interest in the banking system. I hold no stocks of any kind, preferred, common or otherwise. I hold no debentures or bonds. I realize that there are deficiencies in our banking system. I can understand the frustration of a small businessman who tries to get the capital that is required to run his business.
There are hundreds of thousands of independent small businessmen. They are the backbone of this country. With their own initiative, backbone and hard work, and with the labour of their own hands and minds they want to get on with building this country. They want to provide employment for themselves and for others. A new Bank Act is critical, yet we do not have one. It is business as usual for this government. The business of this government is record spending, record unemployment, and the other things about which I have spoken.
The Minister of Finance is a man of integrity and honour, in spite of the fact that he displays incompetence in some of the things he does. If he wants to be serious and do something effective he could expedite the legislation and put Bill C-16 aside for a week or two. We on this side are willing to wait, or even come back early after the Easter recess. I would personally be prepared to sit through an all night session if we could get the new Bank Act, which is so important, especially to small businessmen.
There would be three major advantages to having a new Bank Act, Mr. Speaker. First, there would be more competition and efficiency in the financial market place. Second, the regulations and inspection of financial institutions would become more standardized. A problem with banks and near banks is the question of standardization and regulation which for near-banks comes under provincial jurisdiction. The third advantage would be greater efficiency. At the moment nearbanks are not required to hold primary and secondary reserves with the Bank of Canada, but the new Bank Act would address itself to that problem.
In opposition to those three major advantages is the argument that the power of the provinces is somehow taken away. At the moment the provinces have constitutional jurisdiction over the near banks and these would now be put under federal jurisdiction. That is a powerful argument.
We cannot discuss the pros and cons of the new Bank Act, however, because we do not have it before us. Bill C-16 which is before us does not deal with the serious questions regarding the whole structure of the banking system of Canada and I would be out of order to go into this at any length. What is before us is a bill that says "business as usual".
In effect the government is saying, "The bill is not even drafted and we do not know when it will be ready but, until it is, we would like another one-year extension." I would ask the Minister of Finance to set aside Bill C-16 for at least three weeks, or until he can get the new legislation in place. This would be a service to all of Canada.


Some hon. Members:: Hear, hear!


George H. Whittaker: Mr. Speaker, I cannot let Bill C-16 pass without saying a few words, but I do not intend to take too much of the time of the House. This is a very simple bill of two pages. All it asks is to extend the existing Bank Act for another year. This would be the second extension. The minister tells us that the act cannot be presented to the House because it has not been drafted. I wonder what the real reasons are for this foot dragging. The government has been aware for ten years that the act would have to be revised but now it is asking for an extra two years.
The Bank Act is not complex. It is one of the clearest statutes on the books, and it is very important to Canadians.
When the hon. member for Yorkton-Melville (Mr. Nystrom) spoke he proposed that we start a government bank, another Crown corporation. This causes me to wonder if this is why the government is dragging its feet, as I believe it to be far more socialist than his party. After he spoke I saw him go over and sit very comfortably on the government benches, so again I wonder if this is one of the reasons for the foot dragging. Does the government want to get the election over, bring in such a proposal, and then have more control over the people? The hon. member said the government would take off with the plums and put them into this bank, but I doubt that there are really many plums because of the system of banking in this country.
Is the government dragging its feet because it is afraid to show the people before an election what could happen to them? Does it want to get the election over and then bring in a Bank Act which includes such things as a government bank? This would mean more bureaucracy and more controls over the people such as has happened in the last ten years. Or is it that just before an election the government is afraid to deal with the question of near-banks and credit unions? We know that the government's attitude toward economics is not very satisfactory. It has not done anything for Canada, especially in the last ten years. We do not have a money market in Canada.
The hon. member for Yorkton-Melville spoke of what a socialist government could do but he did not mention the socialist government that British Columbia had for four long years. There was a surplus when it took over, but it soon had to borrow money outside Canada. Of course everyone else has to do that as well because there is not a money market in Canada. That government did not do anything for British Columbia except leave a deficit. It used and abused the money. The hon. member glibly spoke of what they could and would do, but we have the experience of British Columbia to warn us.
There is no venture capital in Canada, Mr. Speaker, and that is a pity because this country needs venture capital. There should be venture capital and profit for risk takers. We have high interest rates in Canada. In the speech given by the hon. member for Yorkton-Melville he mentioned that if there were more banks in Canada interest rates would go up. If we take a

February 28, 1978

look at the countries which have more banks than Canada, their interest rates are lower than here. It is one thing to talk about more banks but another thing to see how they operate.
We have a government which is adopting a casual approach to the Canadian economic system. We have a large outflow of capital funds leaving Canada. Our dollar is dropping drastically. It is now lower than 90 cents even though the Minister of Finance (Mr. Chretien) is trying his best to borrow funds abroad in order to prop up the dollar. Unfortunately there is no money market here in Canada, and we are not sure that the minister will be able to alleviate the situation by borrowing abroad. Our balance of trade is poor. It is billions of dollars in deficit. For many years the government has had high deficits. We are not sure what the amount is at the moment since the Minister of Finance is not presenting a budget. However, we do know that we have very high government spending. During the last ten years in which the present Bank Act has been in existence, government spending has risen from $10 billion to $50 billion. That demonstrates what has happened to the money market. We should have a new Bank Act brought forward in the face of the government's spending and the sums of money it is generating itself.
We should not be debating a bill to hoist the new Bank Act for another year. This legislation should be brought forward. It is necessary.
If the government is not proposing to bring forward the amendments to the Bank Act because it is afraid to present it before an election, that is shameful. An important item such as this should not be put off just so the government can go to the people, have an election, and then come back and do something which it says that it is not going to do.


Mr. Bob Brisco (Kootenay West):: Mr. Speaker, I rise to speak to this bill with reference to another hoist of the Bank Act. First of all I must compliment the hon. member for Selkirk (Mr. Whiteway) on his forceful address. I felt the arguments and points he presented were legitimate.
Voltaire once remarked that if you wanted to talk to him, that is, Voltaire, about God, you should first define your terms. And so with the banks. I do not want to give members the impression that the banks and God are synonymous. If we hope to discuss banks and banking with clarity we should define our terms. It is curious that there is no real definition of a bank in the Bank Act. In the interpretation section, 2(1), "bank" means a bank to which this act applies. Section 4 reads, "This act applies to each bank named in schedule "A" and does not apply to any other bank". We are not much wiser. Except that a bank is a bank. Obviously, however, it is implied that there are banks other than those listed in schedule "A".
The other day I received a letter from the Minister of Public Works and Minister of State for Science and Technology (Mr. Buchanan). He said to me:
Thank you for your letter of 25 January 1978, concerning Sun Systems Limited.
Bank Act
It is true that the Government of Canada, in responding to the energy crisis, did not immediately embrace the ideas of exploiting renewable energy resources, particularly solar, with the same urgency as the United States or some other countries. Our solar program began in 1976, about two years after the United States.
We still lack the large program of government procurement and subsidies or incentives for private solar installations that will be needed to provide a sufficient market to foster the Canadian solar industry at this pioneering stage.
What has that to do with the Bank Act? In reading those two paragraphs in this letter I was immediately struck with the similarity of the circumstance in that particular ministry with the similarity of the position taken by the Minister of Finance (Mr. Chretien) and his inexcusable delay in bringing forward the Bank Act. I do not think there is a subject of federal and national concern to which we can turn today without finding that the government is about two years out of step with everybody else. Of course if you were to ask the government they would say everybody else is out of step with them.


An hon. Member:: Yes.


Robert Hylton Brisco: One of the hon. members from the Liberal side has agreed with me. That is a further demonstration of Liberal government thinking, two years behind everybody else and out of step with the nation.
Recently the Inspector General of Banks wrote to someone with whom I am acquainted in terms of bank involvement. I quote from that letter:
The Office is established by the Bank Act, an Act of the Parliament of Canada, and the powers and responsibilities of the Inspector General are set out in that legislation.
He goes on to quote Section 68C2) of the act, and this is a quote from the act provided by the Inspector General of Banks. That is an onerous title. It imparts to me and to the casual observer or those affected that here is someone who is in a position to make major decisions in terms of bank operations. It reads as follows:
The Inspector or any other person appointed or employed under section 64 or any person to whom any powers are delegated under sub-section 65(4) shall not disclose to any other person, except the Minister, the Deputy Minister of Finance or the Governor of the Bank of Canada, or a representative of the latter if authorized by him in writing, any information regarding the business or affairs of a bank.
If there ever was a need for a revision of the Bank Act that clause in itself clearly indicates the urgency of revision. Just how protectionist can one get? That smacks of the same kind of government secrecy Canadians have experienced since the Liberals came to power. The Inspector General goes on to say:
As you will now understand, this Office is prevented by law from revealing to you any information that might come into our hands regarding the business or affairs of a bank.
Section 65(1) of the Act states in effect that the responsibility of the Inspector General is to inquire into the affairs of a bank annually "for the purposes of satisfying himself that the provisions of this Act having reference to the safety of the creditors and shareholders of the bank are being duly observed and that the bank is in a sound financial condition..." This section has always been interpreted as a responsibility in relation to the solvency of a bank. The broad powers of inspection given to this office are for the above purposes.

February 28, 1978
Bank Act
Obviously there is no provision for the Inspector General of Banks to inquire into any hanky panky by any of the banks.
The Office has virtually no power to direct a bank to behave in a particular way in its relations with a client.
It does not matter how small or how large the client, there is no provision whatsoever for the Inspector General of Banks to intrude into the affairs of that bank. I expect it would probably lead to chaos within the banking system if one of us or the man on the street could put his oar into the banking system without just cause. However, if we are going to appoint someone and provide him with the title of Inspector General of Banks, we should give him some teeth with which to act.
The Inspector General went on to say:
Nonetheless, where a dissatisfied client of a bank writes to this office or his complaint is brought to the attention of this office, the complaint is often referred to a senior officer of the bank involved to ensure that it receives a fair hearing in the bank.
Isn't that just sweet! If a particular bank has done a gross disservice to a client, the matter is reported to the Inspector General of Banks. The Inspector General writes to the manager of that bank, states that there is a problem and tells him to look after it. There is no slap on the wrist, no investigation. The bank is supposed to examine itself and make sure it did right by its client.
We see in the press today evidence and indications that some banks have cheated the public and have acted in an irresponsible fashion. It is grossly unfair to tar the banking system with a broad brush, but Canadians know that there are those within the banking system, indeed within any system, who are unscrupulous in the manner in which they do business with the public.
The Inspector General went on to say:
More difficult problems involving large clients in contractual obligations are normally settled in direct negotiations between the client and the bank or finally in the courts.
That brings me to the next point. I draw the attention of this House to the conduct of one bank. I do this with some discomfort because I am one of their satisfied customers. I refer to the Bank of Montreal and the manner in which that bank in British Columbia treated a constituent of mine, Merlin Thompson, who attempted to establish an industry within my constituency, Arvee Cedar Mills Limited. That matter is before the courts. The manner in which the Bank of Montreal treated that individual is indeed scandalous. After this has dragged through the courts for the next couple of years I hope the record will show that the Bank of Montreal does not act in this fashion in all of its branches.
Clearly my experience has been favourable, but just as clearly we should watch the bank for the next little while because this sad, nasty story of the actions of the Bank of Montreal will clearly be told. That is not the only case. Recently in this House the hon. member for Surrey-White Rock (Mr. Friesen) asked the Minister of Justice (Mr. Bas-ford) a question with regard to the conduct of a bank in Vancouver with reference to the manner in which it treated one of his constituents in violation of the law.
Not too long ago the British Columbia provincial minister of consumer and corporate affairs publicly stated over television that his department is very concerned about the attitude of banks. While there is growing public concern over the manner in which banks are doing business, this government is dragging its feet as usual. It does not matter whether it is a depressed Canadian dollar, massive unemployment or gross inflation, this government fails to respond. It is two years behind in taking action.
We have seen the Prime Minister (Mr. Trudeau) wrestle inflation to the ground. His biceps really do not amount to much. He is not fit for wrestling or for a lot of other things, particularly serving as Prime Minister of this country.
Not too long ago there was another disastrous bill before the committee, the borrowers and depositors protection act. It was brought in on the advice of the officials and with the blessings of the Minister of Consumer and Corporate Affairs (Mr. Ouellet). If ever a bill contained excess verbiage and ill-defined rhetoric, that was a classic. It died at the committee stage. The minister was clearly incompetent to move it any further.
In that bill there was provision for those who have had their cause advanced in this House today, those on low income and those with no income save and except welfare or the popular route of unemployment insurance. Because of the difficulty in borrowing from a bank, these people go to the loan sharks. We had representations from senior members of the Montreal police force about this problem.
May I call it five o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: 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 Ottawa-Vanier (Mr. Gauthier)-Official Languages-Protection of linguistic rights of minorities-Government position; the hon. member for St. John's West (Mr. Crosbie)-Power-Newfoundland-Federal assistance in power projects; the hon. member for Kootenay West (Mr. Johnston)-Unemployment Insurance-Canadian railroad workers employed by United States railroads-Entitlement to benefits.

February 28, 1978


PRIVATE MEMBERS' PUBLIC BILLS
[Stage Direction]
[ Translation]
Mr. Deputy Speaker:: It being five o'clock, the House will now proceed to the consideration of private member's bills on the order paper of today, namely public bills, private bills and notices of motion.


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


Mr. Deputy Speaker:: The hon. Parliamentary Secretary to the President of the Privy Council (Mr. Pinard) on a point of order.


Yvon Pinard: I request the unanimous consent of the House so we may proceed to consideration of Bill C-222.


Mr. Deputy Speaker:: Is there unanimous consent of the House that we proceed to consideration of Bill C-222?
Is there unanimous consent to call Bill C-222 and to suspend consideration of all the items appearing on the order paper before that bill?


Some hon. Members:: Agreed.


RAILWAY ACT
George H. Whittaker: that Bill C-222, to amend the Railway Act (ownership of land where railway line abandoned), be read the second time and referred to the Standing Committee on Transport and Communications.
He said: Mr. Speaker, the purpose of this bill is selfexplanatory. It is to provide that railway rights of way revert to the Crown when they are no longer used by railway companies.
There are five major reasons for the introduction of this bill:
1.	The selling of these rights of way would effectively close transportation corridors which might well be needed in future years.
2.	The Government of Canada has made monumental concessions to the railways in this country. Land and tax benefits were given freely to the railways in return for cross-Canada transportation service and now, when these lines are abandoned, the property should revert to the government as partial payment for those early concessions.
3.	Today, through a CPR subsidiary company, Marathon Realty, large sums of money are being made from roughly one million acres of land originally granted by the Canadian government to the CPR and still held by the company.
Railway Lands
4.	The original mandate of the CPR was to provide transportation on an ongoing basis to all parts of Canada. That mandate is no longer being followed.
5.	Through abandonment, the railway companies are making large financial gains selling property in urban areas at the expense of the Canadian people.
I was very happy when my motion on this topic was discussed in the House and given support in principle. Indeed, the hon. member for Scarborough East (Mr. O'Connell) said he would support the basic principle of the motion; he went even further by undertaking to support the bill when it came before the House. He stated he would support the measure in order to bring it to committee where its ramifications could be closely studied. He also indicated that the government's position was one of support in principle for the bill.
In two instances the Minister of Transport (Mr. Lang) supported the idea. With reference to a specific incident of abandonment authorized by the Canadian Transport Commission, he said:
The Government of Canada would then, after consultation with the provinces, offer the land to the provincial Crown involved for ultimate disposition to a local municipality, or we would offer it for sale as soon as possible to adjacent farm land owners.
Responding to a brief by the three prairie provinces' transport ministers, he said:
Where any land is in fact abandoned, the roadbed property should revert automatically to the federal Crown.
The hon. member for Vancouver-Kingsway (Mrs. Holt) also made her views known in strong support of my motion on the reversion of rights. Indeed the hon member suggested that the CPR is no longer a railway but "a front for exploitation of other interests in this country." She said:
The railway is simply there to further CP's moneymaking, and, I will go so far as to say, greed ... I know the reputation of the railway, specifically the Canadian Pacific, which has taken so much of what should be the property of Canadians.
Hon. members may agree that that is strong language to direct against a major Canadian company.
1 should also like to call the attention of the House to a news clipping from the Vancouver Province dated December 2, 1977. The clipping states that Canada's two major railways have made a secret pact with Ottawa to turn over all abandoned prairie railways to the federal government. According to this article, an agreement supposedly released by Alberta transport minister Hugh Horner shows CN and CP rail as having agreed to turn over to Ottawa all railway rights of way abandoned on or after August 5. Under the terms of the agreement the federal government would not pay for land but the railways would be paying mines and mineral rights. Urban rights of way and adjacent rail lands were excluded from the agreement. The only part of the agreement 1 question is this: why was it kept secret?
There has been speculation that the federal transport ministry has been waiving it under provincial noses to support the contention that railbeds belong to the federal government. I should also like to point out that Mr. Justice Hall, in the Hall Commission Report on grain handling and railways in western
3310

February 28, 1978
Railway Lands
Canada, came to a similar conclusion as far as rail abandonment is concerned, except that he suggested rights of way should revert to the provincial governments. I refer to pages 104 and 105 of that report which read as follows:
Upon abandonment, the roadbed, that part of the property abandoned, represented by land vested in the provincial Crown for disposition as may be mutually agreed to between the relevant province and municipal authority, the CNR or CPR, whatever the case may be, have entitlement to recover and remove with one exception such of the improvements to the property, rail, ties, other track materials, ballast etc. as may in their judgment be warranted. Culverts, the removal of which might alter established drainage patterns or have adverse effects, would constitute the sole item of improvements to be left in place by the prairie grain authority. We anticipate some objection that the property disposition formula we have outlined involves an element of expropriation of railway property without compensation to the railway company. This cannot be a valid objection. Under sections 106 and 259 of the Railway Act, the railways have a legal obligation to maintain service on all lines until approval for abandonment is given. In the case of grain-related branch lines the railways ask to be relieved of this obligation taking the position, with which we do not agree, that they are operating these uneconomic lines at a great loss even when given the branch line subsidies to which we have referred.
In our view, the railways cannot have it both ways. They cannot secure relief from their financial burdens, as we propose, and yet retain an undiluted title to the property in toto. This is particularly the case when, as we also propose, many elements in the property ultimately to be abandoned are likely in the interim to be enhanced by some degree of rehabilitation involving new investment of funds.
We therefore deem it eminently just and equitable that in return for permanent relief from legal obligation to continue a losing operation and having to restore the abandoned right of way to its former condition, the privilege of being allowed to abandon should be made conditional upon giving up ownership of the land in the right of way. A substantial portion of this land is quite valueless in any event. There should be no crying over the return of rights of way to the Crown.
I first became interested in the subject of railway abondon-ment some two years ago when the CPR made an application to the Transport Commission to abandon a large portion of what is known as the Kettle Valley Railway in my riding. This railway had long served as a second rail corridor across British Columbia-its use has been abandoned for some years, now. Rail traffic in British Columbia from east to west has been concentrated on what is known as the main line and both the CPR and the CNR use a similar route for much of the traffic.
If one looks at a map of British Columbia and studies the very limited corridor which is being used today for rail traffic, he will quickly see how vulnerable it is in many respects. This may be tolerable as long as the road links which exist today continue to exist. However, road use in years to come will be dependent on the same type of energy source as is used today, namely oil. On the other hand, railways can revert to the use of coal or electric energy generated from sources other than fossil fuel.
I became increasingly interested in rail line abandonment when I realized that at some time in the future, maybe not in my lifetime but certainly in the lifetime of my children and grandchildren, we might very well be obliged to return to rail transportation. I believe the corridors which have been used for railways will be necessary for future transportation in Canada. I have come to believe this even more strongly having looked at what could happen in such a city as Penticton, B.C., if the railways were allowed to abandon their responsibilities and sell off the real estate in these corridors.
It is for these reasons I asked questions of the Chairman of the Canadian Transport Commission, Mr. Edgar Benson. The CTC, under Mr. Benson, decides whether rail lines should be abandoned. I asked what would happen to the rights of way when abandonment was allowed, during a meeting of the Standing Committee on Transport and Communications. His answer was as follows:
As I understand the situation, once we rule that a branch line or spur line can be abandoned, we have no control over the land per se. But the railway may deal with it as it may see fit. Sometimes when the railway makes application for abandonment, someone will have indicated to them that they would like to use the land for a specific use and the railway will undertake to make land available for that specific use.
In addition I asked why the Canadian Transport Commission could not make it a condition that the land revert to the Crown on abandonment. Mr. Benson's answer was as follows:
You would have to put that into the Railway Act so we would have the authority to do it.
Also I questioned the Minister of Transport on this and received similar answers.
The railways of today are no longer only interested in transportation. For instance, the CPR is not merely a railway company but a huge conglomerate controlling a number of enterprises ranging from mining to air travel and from logging to oil. Also, the company has investments in almost all major industries. One has only to look at their television ads to see this.
In 1897 the CPR and the new Liberal government signed the most important deal since its original contract, giving CPR access to one of Canada's richest mineral areas, southeastern British Columbia in exchange for a reduction of freight rates. By 1970 it was estimated that CPR owned or controlled at least $1 billion in assets in B.C., making it by far the largest corporation in the province. The second largest, MacMillan-Bloedel, is being slowly bought up by CPR. The brokerage house report on CP will often tout its controlling interest in Cominco as one of the main reasons for the attractiveness of the company as an investment. It is much more important in this regard than the railway.
The government's transportation policy, as it can be exercised by this commission, should stress the transportation aspect and the historical commitment itinerant with the early grants and concessions that helped place CPR in a position from which it could expand and consolidate its position in a number of areas. It had an economic stability; others did not. This enabled it to buy up other railways and to acquire land charters that went with them. To capitalize now on the situation by selling rights of way in urban centres such as Penticton at premium prices is irresponsible. It closes the corridors which might be needed for coal shipping in approximately 15 years, or for transportating products from mining interests in the area to the coast. The line should be retained and maintained, even in disuse. The right of way could be used as a transportation corridor in the future. Under this condition, without the real estate revenues accrued from dividing

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and selling rights of way of the abandoned lines, the prospects of abandonment would appear much less attractive to Canadian Pacific Railway.
Railways, especially the CPR, have a commitment to maintain rail lines even if they are losing money. This argument is based on the fact that the CPR was heavily subsidized, received generous concessions and inducements for constructing the transcontinental line. Because of the almost limitless aid from the government, the CPR was a moderate success from the start. The total value of the government aid is almost impossible to estimate. There was $25 million in cash. Large portions of the railway were actually built by the government and then turned over to the company at a cost of $37.8 million. Also there were close to 25 million acres of arable land. The CPR received other concessions, especially in the area of railroad equipment and competition. Equipment was allowed into the country duty-free. The government assured the company a virtual monopoly until 1888.
Another serious consideration is the re-acquisition of rights of way once property is sold in transportation corridors. The cost of alternative transportation may be prohibitive. In the long run the cost of re-acquiring rail rights of way will make this more economic mode of transportation unjustifiably and needlessly expensive. The natural and obvious alternative is not to court these developments. Furthermore, the cost of re-acquiring rights of way in British Columbia, especially central and southern B.C., are higher than other regions in Canada.
The current routes used by rail lines are often the only viable passage. To circumvent urban areas in search of cheaper land in the future may be impossible. The only alternative would be to expropriate these lands currently being sold and developed as prime real estate property by Marathon Realty. Then they can be restored to transportation corridors at exorbitant cost to the taxpayer.
The hon. member for Scarborough East raised some concerns about the ramifications of the motion. He said:
Here are some of the considerations that I think cannot be met in this House in the broad scope he has given the motion. Supposing all of those properties revert to the Crown, what would be the burdens on the federal government in maintaining the properties in the meantime? Would it, in fact, wish to sell it off? Would any sales be consistent with long term planning in a municipality, or even a requirement that there be a federal-provincial agreement on long term transportation corridor needs? We do not know and cannot know unless we have much more information.
What the hon. member for Scarborough East said is true. Is there a better way to answer these questions than by taking them to committee? Also, the hon. member asked what city properties are worth in downtown Toronto if put into non-rail uses, and whether some of the properties now developed with multimillion dollar complexes would also revert to the Crown. He said that we should know the details of the amounts of money involved, and whether the railways would still have the opportunity to reinvest in railway networks. The only way to come to grips with these questions and the implications of the bill is to take it to committee. I agree with the hon. member when he suggested that the implications of the bill are serious,
Railway Lands
that detailed discussion and planning are needed to make this a cohesive piece of legislation. The only way to solve these questions is to take the bill to committee stage. In order to do that, I require the support of the House.
Once in committee, witnesses can be called to answer questions thoughtfully brought forward by the hon. member for Scarborough East. Witnesses can be called from the provincial and federal governments, as well as from the CPR and CNR. This will considerably speed up the process of gaining information. Also amendments could be proposed and dealt with in committee.
The Hall Report, which was compiled at the request of the Minister of Transport, is in agreement with my proposal. The Minister of Transport has shown his support of the proposal in principle, yet stories are circulating about secret agreements between the provinces and the federal government. These problems should be brought into the open. These secret meetings and agreements, which will affect transportation, should be disposed of. Transportation is the very lifeblood of this country. It is our responsibility to keep transportation corridors open. It is the responsibility of the government to prepare the future for our children and grandchildren. Perhaps I will never see the end of fossil fuels in my lifetime, but probably my children will. The importance of these transportation corridors will be evident then. We must get ready for the future. I appeal to the House to pass this bill. It will correct the unfair situation caused by attitudes taken by the railways on the abandonment of branch lines.


Some hon. Members:: Hear, hear!


Mr. Ralph E. Goodale (Assiniboia):: Mr. Speaker, given my prairie background I am understandably pleased to have an opportunity to participate in this particular debate regarding rail roadbeds this afternoon. On the prairies we perennially have no end of rail issues to discuss, debate and argue about. The sad thing is that until recently the issues we have argued about have been founded primarily upon bad news about the prairie rail system: the news of rising costs and declining service, the news of antiquated rolling stock and deteriorating rail lines, the news of possible abandonments, and nagging, lingering uncertainty concerning our rail system.
Fortunately, in the past couple of years, the news has begun to turn around, particularly with the work of the Snavely and Hall Commissions which have touched upon the issue we are discussing today of roadbed ownership, among a great many other things.
It seems to me that to understand fully the rail situation on the prairies today and to be able to assess the motion now before us it is essential to put the Snavely and Hall Commissions into perspective, that is, it is important to see how that bad news scenario I just mentioned has turned around to a more positive situation.
To begin with, during the past decade or so, quite apart from the Snavely and Hall work, there have been several
80031-68)4

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significant modifications in our prairie grain handling and transportation systems which have been positive and helpful and which deserve to be recognized in a discussion of this kind. I think, for example, of the construction of more modern elevator facilities and the efforts at consolidation of some elevator facilities on the prairies. There have been agreements between the railways to eliminate what used to be wasteful grain back-hauls in the movement of grain from prairie regions to export positions.
We have seen the development of a new quota system and the block shipping system; the appointment of port co-ordinators for grain operations at Thunder Bay and Vancouver; a special grain boxcar repair program which saved railway rolling stock for the movement of grain; probably most dramatically, the purchase of 8,000 grain hopper cars at a cost to the federal treasury of something in the order of $255 million; the useful Mants report on grain car allocation procedures; and a special Canadian Wheat Board trucking program to help move tough and damp grain and to ease pressure during times of peak volumes in the rail system.
Also, we have seen recently the Wheat Board's incentive program to encourage construction of new terminal capacity on the west coast; continuing efforts to utilize the port of Prince Rupert better for grain movement; an ongoing federal upgrading program to the tune of $12.5 million for the port of Churchill, including the installation this year of hopper car unloading facilities; and compulsory railway cost disclosure legislation to open the books of the railway companies for the first time.
That and other developments have brought us most recently to the work of the Snavely Commission, a commission initiated at the same time and in conjunction with the Hall Commission, to do the job of analyzing and assessing the real costs of trnasporting grain by rail.
The work of the Snavely Commission is generally regarded as being very thorough, practical and reliable. It has been well received and widely respected across the prairies, and indeed there has been no serious challenge to the basic analysis offered by the Snavely Commission. All of those developments, including the Snavely report and others, have formed the context within which the Hall Commission did its fundamental work to help shape the prairie rail network which we will require for the future.


Robert Hylton Brisco: Mr. Speaker, I rise on a point of order. I have listened with patience to the hon. member and, quite frankly, I fail to see what the Hall or Snavely Commission reports have to do with the private member's bill before us. He is talking about the movement of grain, not rail abandonment.


Ralph Goodale: If the hon. member had been in the room and had listened to the hon. member who moved the motion, he would have heard extensive references to the Hall report in the very speech in which the motion was introduced. Indeed, the whole question of the status of roadbeds on the prairies is derived from the work of the Hall report which was fundamental to the grain handling and transportation systems in western

Canada. It is most unfortunate that the representative of the Conservative party fails to recognize that.


Some hon. Members:: Hear, hear!


Ralph Goodale: As I have said many times, there is probably no document of more significance to our future in western Canada in relation to our transportation system than the report of the Hall Commission. It represents the collective judgment and wisdom of five prominent, well respected westerners, who were appointed by the government of Canada in 1975 to undertake a serious investigation of the prairie rail network. The commission took two full years to do its job, and in the process established a solid reputation across the prairies for fairness and thorough, conscientious work.
The report provides us with a good foundation upon which to build as we tackle what has become the very urgent job of revitalizing our grain handling and transportation systems. Reaction to it from most quarters-from farmers, farm organizations, western commodity groups, municipalities, grain companies and co-ops, provincial governments, opposition spokesmen in the House of Commons, and so on-has been generally positive.
As soon as the Hall report was published on May 16, 1977, westerners generally began to demand swift and positive responses to it. The government of Canada agreed, and we have moved quickly to implement the thrust of the Hall proposals. Probably no other report of a federal commission of inquiry has received such prompt, decisive attention as the Hall report.


Some hon. Members:: Hear, hear!


Mr. Hnatyshyn:: That is stretching our credibility too far.


Ralph Goodale: The hon. gentleman across the way wants to see a demonstration of that decisive action and I am quite prepared to give it to him at this moment. As I said, the report was first tabled in the House of Commons on May 16, 1977, and published across western Canada on that same date. Ten days later, on May 26, its central recommendation was passed into law by the federal cabinet when an order in council was adopted transferring more than 1,800 miles of prairie branch lines to the permanent basic rail network, bringing that network to well over 14,000 miles altogether. It is important to note that that is a full three quarters of all the trackage existing on the prairies in 1975 when the Commission began its work.
Furthermore, on that same day, on May 26, another federal order in council extended the existing freeze protection against abandonment for another 2,300 miles of rail line which Hall suggested should be assigned to the jurisdiction of the new body to be created called the Prairie Rail Authority, or PRA as it has come to be known. Significantly, toward the end of last year, the Minister of Transport (Mr. Lang) announced his intention to present legislation to the House on the PRA concept during 1978.

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On May 27, just 11 days after the Hall report was first tabled, the federal government announced its intention to establish an interim Prairie Rail Action Committee to go to work immediately upon three urgent tasks: first, to recommend additional, immediate transfers of lines from the suggested PRA category to the permanent network in order to facilitate the building plans of grain companies and so forth; second, the PRAC was to offer advice on rail line upgrading priorities; and third, the committee was asked to thrash out the full details of how the PRA concept would operate.
In June, a prominent Saskatchewan transportation expert, Professor Fred Anderson of the University of Regina, was named chairman of the Prairie Rail Action Committee. In July, three prairie farmers were appointed to serve on that committee, namely, Bill Cooper from West Bend, Saskatchewan, Jack Gorr from Three Hills, Alberta, and Lome Parker from Ste. Agathe, Manitoba. The committee has been hard at work since they took their positions last summer, and in fact their first recommendations are at hand.
In June and July of last year, as a result of the work of the Hall Commission on the configuration of the rail network on the prairies, a special engineering team was assigned to conduct the necessary on-the-ground examination of the new rail links between lines which Hall had recommended as logical in terms of rationalizing the rail system across the prairies. The report from that engineering team was essentially positive. It is now in hand and being studied by the prairie rail action committee.
Also last summer the federal government called for the submission of specific proposals from consulting firms in connection with the new grain collection and cleaning facilities in east central Saskatchewan which Hall had suggested as one way to bolster the future use of the port of Churchill. That analysis was completed early in the fall and has been under review not only by the government but also by various elements of the grains industry of western Canada to make an assessment of its value as an instructive piece of work so far as possible use of that kind of facility in east-central Saskatchewan is concerned in relation to the port of Churchill.
Also dealing with the question of Churchill, last May the Minister of Transport (Mr. Lang) instructed the CNR to review its decision to stop its upgrading work on the rail line to Churchill. The minister indicated to the railway that its reasons for stopping that work were inadequate and that it ought to reconsider that particular decision. Further, and most recently, the federal government announced a multi-million dollar western rail rehabilitation program. This as well flows from the work of the Hall commission and from the kind of discussion we are having today in relation to rail roadbeds. The government announced a rail rehabilitation program with an initial federal commitment of funds of $100 million. The work on that program has already begun. It is a massive amount of work, but it is urgently required from a prairie point of view. The $100 million represents the maximum
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amount of work that can be physically accomplished by the spring of 1979. It is moving forward at a great pace and is part of the scenario which has turned around the bad news with respect to rail lines which used to exist on the prairies. When we see those rail lines being rebuilt and restored, we see evidence that the news is now on the positive side.
Finally, I would like to refer to some demands which were made by the government of Canada upon the railways immediately after the Hall commission report was published. The federal government demanded three undertakings from the CNR and the CPR: first, that they provide complete concrete and ironclad rebuilding and upgrading commitments in western Canada in return for any future cash payments from the federal treasury; second, that they agree to exchange between themselves the specific rail lines which the Hall Commission recommended as logical ownership changes; third, that they surrender to the federal Crown any rail roadbeds which may be abandoned so that the government of Canada could dispose of them to municipalities or to adjacent farmland owners. Those last words bear specifically upon the matter which we have before us this afternoon.
The fundamental difference between the hon. member's bill and the position of the government is essentially that we do not want to be the permanent owners of the roadbed rights of way. On the contrary-and I think this stands in distinct contrast to the apparent positions being taken by provincial governments in western Canada-we at the federal level see our role merely as that of a facilitator to ensure that the ownership of these lands is transferred as quickly and as expeditiously as possible to the appropriate final owners, namely, in most cases the adjacent municipalities and the adjacent farmland owners.
fo expedite the transfer of title to the ultimate owners the Minister of Transport signed an agreement early last fall with the CNR and the CPR which will transfer to the federal government all roadbed property identified for abandonment in the prairie provinces. As the minister stated openly before the Standing Committee on Transport and Communications and elsewhere in public as well, this agreement was reached specifically to ensure that the land is in fact transferred to the logical recipients just as quickly as possible. There is no intention on the part of the federal government to retain the land for the Crown. In order to facilitate the process of ownership transfer, and recognizing the ned of municipalities for compensation, the minister has proposed that each prairie province have a roadbed steering committee to help determine the disposition of abandoned rights of way in each particular province.
Preparatory meetings have already been held with prairie farm and municipal groups, one of the most important being held in the city of Saskatoon on November 30 where some 30 or 40 western farm and municipal organizations were represented. It was a very positive meeting indeed. Rural and urban municipal organizations and, significantly, the Western Agricultural Conference, which represents most farm groups in western Canada, have given active and enthusiastic support to the initiative outlined by the federal government through

February 28, 1978
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the Minister of Transport. Municipal associations have now been formally invited to participate in this consultative process, and the prairie governments have also been invited to lend their support to the plan. As I said, the reaction from farm and municipal organizations to the plan of attack outlined by the Minister of Transport as to how best to deal with the roadbeds which may eventually be abandoned across the prairies has been extremely positive. They see it as a method of legitimately recognizing their interests and concerns with respect to the future ownership of those roadbed rights of way.
The bill proposed by the hon. member for Okanagan-Boundary has merit in principle as far as it goes, and the government of Canada can stand generally in agreement with the intent of the bill, namely that the ownership of abandoned railway rights of way revert, at least initially or temporarily, to the federal Crown, not in terms of final ownership but, as I said earlier, only in terms of facilitating the transfer to the appropriate final owner. However, while this bill has appeared on the order paper, events across the prairies have indeed superseded the proposed item we have before us because the government has acted expeditiously and in a more effective and complete fashion than that envisaged in the general legislative approach we now have before us. The reversion of roadbeds to the federal Crown must not be an end in itself but merely a means to an end. Its objective must be to smooth the transfer of title to the logical ultimate owners in as equitable a manner as possible, and as I have said before, in most cases the most logical ultimate owners should be adjacent municipalities or adjacent farmland owners.


Mr. Jake Epp (Provencher):: Mr. Speaker, it is an honour this afternoon to rise in support of Bill C-222 and the work the hon. member for Okanagan Boundary (Mr. Whittaker) has done in this vital issue. As a member representing the prairie region, I want to commend the hon. member for Okanagan Boundary for the clear vision he has not only of the problems of the region he represents but also of the prairies. What he has presented to the House is much in keeping with what we see as needed in the prairie region.
I find it interesting that the hon. member for Assiniboia (Mr. Goodale) spent his time primarily on the Hall report. He finally got to the recommendations Mr. Justice Hall made with regard to rail line abandonment. I felt he took the position of the federal government, which I suppose is fine, but he spent actually very little time on rail line abandonment. He finally did get to it. I want to touch on the matter of jurisdiction a little later on.
The hon. member for Assiniboia spoke about the alacrity with which the government has moved forward on the Hall commission recommendations. It is true that the government moved ahead on rail line abandonment, at least at the discussion stage, but we must keep in mind the fact that Mr. Justice Hall made some 96 recommendations and that the government has accepted only four or five of them. With regard to action on the others which farm groups and related organizations on the prairies have been asking for, the federal government has

been doing more studies. The federal government is creating organizations within the provinces, which is fine, but they are not moving with anything near the speed the hon. member for Assiniboia tried to impress upon us.
Just yesterday, February 27, about 15 members of the Conservative caucus who are primarily from the prairie region had a meeting with Mr. Justice Hall. The meeting was co-chaired by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn) and the hon. member for Vegreville (Mr. Mazan-kowski). That was the first time members of parliament have gone directly to the gentleman to discuss his report on behalf of their constituents. Liberals still have not done that, but I suppose they would have to find someone from the prairie region to go to such a meeting. I know they have a problem in that regard.


Maurice Dupras: We will fix that after the next election.


Robert Hylton Brisco: There won't be any Liberals from the prairie provinces after the next election.


Arthur Jacob (Jake) Epp: After what I heard from the lone Liberal MLA from Manitoba at the recent Liberal convention, I do not think we have to worry any further about Liberals from the prairies. In fact, Mr. Speaker, I think we will have to put them on the list of endangered species.
Two years ago the hon. member for Okanagan-Boundary set this bill down on the order paper, well before the Hall commission report was tabled. When the hon. member for Assiniboia says that events have preceded this bill, we should remember that the government could have accepted it two years ago and could have had at that time the very recommendations that Mr. Justice Hall made later.
I want to go into some of the practical realities now to show how this question is vital to rural municipalities and how the federal government is again not fulfilling its obligations but is in fact encroaching further on provincial rights. When a rail line is abandoned, the land still belongs to the railroads. The secretary of the railway transport committee of the Canadian Transport Commission wrote to me saying that the Canadian Transport Commission does not consider it has jurisdiction to order a railway company to take any specific steps when disposing of abandoned right-of-way property. That letter was received in my office on February 21.
In the five and a half years that I have been in this House, Mr. Speaker, I have appeared at hearings of the Canadian Transport Commission in my riding on two occasions in reference to a specific rail line which the CNR had applied to abandon. On the first application they wanted to abandon the line from Emerson to South Junction. They modified that application to abandon the line only from South Junction to Ridgeville. That left approximately nine miles on the line. Despite the objections of rural municipalities, local government district officials and the recommendation that, if the CTC gave approval of abandonment, the land should revert to
February 28, 1978

local government districts and rural municipalities, the CTC finally gave permission to abandon that rail line.
No sooner had that happened than the CNR made application to abandon another three and a half miles of line. That would remove another elevator from the line and there would be only one left. You can mark my words, Mr. Speaker; as soon as they get permission to abandon the three and a half miles they will apply to abandon the remaining six. That is the way they operate. Since 1969 there has been no train on the line through South Junction, Sundown, Vita, Gardenton and Ridgeville.
We knew the rail line abandonment would come but we wanted certain conditions. We made strong representations that we should know exactly what would happen to the land. This is what happened. Permission has been given to lift the rail. Tenders are now out for lifting the rail, the ties and the clamps. Rural officials have told me, the Canadian Transport Commission and the CNR that they feel the right-of-way should revert to local government districts or rural municipalities-that is, the local government district of Stuartburn or the rural municipality of Franklin. I see the hon. member for Assiniboia nodding his head, I take it in assent. I am glad we agree so far.
These rights-of-way that divided the small communities create problems and increase expenses for such things as roads. Some of these communities are now service centres for the highway system. The division in these towns has increased the cost of water and sewers. Planning is difficult for them because they do not know whether they will get the land. These problems are all valid, and I think everyone raised on the prairies understands them. Here is where the difficulty comes in, however: The federal government wants to take these rights-of-way and transfer them to the ultimate owner, namely local government districts, rural municipalities and private farmers; but the point is that the federal government, under the constitution, has no jurisdiction over the municipalities. The municipalities, the local government districts, the towns and villages fall within section 93, provincial rights. The three prairie provinces want the land and say they will give it to the local government districts, the rural municipalities and local farmers, but in some areas the rights-of-way parallel the roads. If the rail lines are abandoned some of those road systems will have to be upgraded, so surely the rights-of-way could be used for that purpose.


Ralph Goodale: That is possible under our plan.


Arthur Jacob (Jake) Epp: Of course it is possible, but the federal government wants to bypass the prairie provinces and go directly to the municipalities over which they have no authority. I would ask the federal government to approach the three prairie provinces. Basically they are in agreement, but they want jurisdiction because they have a responsibility to local government districts, rural municipalities and regarding land titles.
If the federal government is honest in its approach, and I believe it is, then it should make an agreement with the provinces that the ultimate owners can get the land. The hon.
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member for Okanagan Boundary had this clear insight two years ago, well before the government all of a sudden decided it might be able to exploit the issue politically. I commend the hon. member and I support this bill wholeheartedly.


Mr. Cliff Mclsaac (Battleford-Kindersley):: Mr. Speaker, the hon. member for Okanagan Boundary (Mr. Whittaker) has moved an interesting bill. I am reminded of an argument he made previously on a resolution which I had an opportunity to read before this debate began. Last November he made essentially the same argument. There is nothing wrong with that because it is a good argument, and it is a good argument today although I think he might have updated it in light of what has happened since.
Bill C-222 will certainly have my support. My only point is that the bill is superfluous and unnecessary as the government has made an agreement with both major railroads that would implement the thrust of the bill. To a large extent, therefore, we are going over previously plowed ground.


George H. Whittaker: I rise on a point of order, Mr. Speaker. A member who spoke previously said that the minister had done certain things, and now the hon. member for Battleford-Kindersley is saying the same thing. I should like to know when and where the minister made this announcement. The last I heard of it was when I asked a question in committee and the minister said the government could not do anything without changing the act.


Joseph Clifford McIsaac: Mr. Speaker, the hon. member may or may not have been at the committee in November when this question of ownership of rural rail beds was discussed very thoroughly by the hon. member for Vegreville (Mr. Mazan-kowski), the transport critic of the hon. member's party. There was nothing secret as my hon. friend would have us believe. He quoted earlier some press release he had found about a secret deal between the railroads and the minister. It was a well understood and well known move, although it may have taken my Tory friends some time to learn what happened and to realize the speed with which the minister was moving on a number of the recommendations in the Hall report.
I am pleased to know that my hon. friend from Saskatoon-Biggar (Mr. Hnatyshyn) has had a meeting with Chief Justice Hall and perhaps other members of that commission. Members on this side have met with various members of the Hall commission and held private discussions during the time the hearings were being held and following their conclusion. It is pleasing to note that the Tories are joining other groups of people and agencies across the prairies in Finding out what was recommended in the Hall report as well as learning some of the background to the recommendations.


Ramon John Hnatyshyn: We are supporting the Hall commission recommendations.


Joseph Clifford McIsaac: I was interested to hear the remarks of the hon. member for Provencher (Mr. Epp) who just took his seat.

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He made some good points. He mentioned the Hall report was not being implemented soon enough. The Conservative criticism of the Hall report is careful not to spell out either their concerns or their endorsements. They are also careful not to mention the positive steps, actions and announcements which have taken place and which were outlined so capably by my hon. friend from Assiniboia (Mr. Goodale) earlier this afternoon. They did not enjoy the comments of the hon. member for Assiniboia. My friend took 20 minutes in this debate; he could have taken a good deal longer to elaborate if time had permitted. It did require more time to outline all of the moves which have taken place and which have been enacted by this government in response to the Hall commission report.
The bill proposes that the rights-of-way of railroad beds of abandoned lines should revert to the federal Crown. With respect to Saskatchewan, the branch lines in that province are probably in a different situation from some of the lines my friend from the Okanagan valley might have in his province. It might make a good deal of sense to retain some lines in that part of British Columbia in the name of the federal Crown for perhaps years. But I doubt, Mr. Speaker, if that is the case in many situations in the provinces of Saskatchewan, Alberta or Manitoba. Most of these lines have been dealt with through the full abandonment process of the Canadian Transport Commission. Mostly these are branch lines and lines which have not been used to any great degree, and they are not likely to be used again in future, at least in terms of rail corridors. British Columbia in that respect could be different and on that point I am certainly not able to argue with my hon. friend.
In the majority of instances it will be the farmer or the cattleman who has had those tracks crossing his land over the years. He will be the logical person to own or have control over that particular land. It seems to me that it is appropriate to give that land to the federal Crown so they can move expeditiously to put that land into the hands of the farmer or the ranch owner through the municipality.
I do not think there is any group of people or body of elected officials in the prairie provinces, and I am sure it is true across the country, who are more capable and qualified to make the decision, Mr. Speaker, as to who should receive that right-of-way land. The Saskatchewan Association of Rural Municipalities, which is made up of almost 2,000 members of every political stripe and party, has endorsed this government wholeheartedly and opposes strenuously the recommendation of Mr. Justice Hall that rights-of-way first of all go to the provincial Crown.
Part of that opposition might be explained by the difficulties they have encountered with the present minister of transportation in the present government of Saskatchewan. The minister has been imposing various weight restrictions and other limitations on roads in the province. Perhaps it is their mistrust of that minister that brings about this particular approach. Surprisingly enough, the municipal people in Alberta and Manitoba have also endorsed the action of the federal Minister of Transport (Mr. Lang) in seeking that agreement which is now signed and public. There is nothing secret about it. The

rights-of-way when these lines are finally abandoned will revert to the federal Crown, for disposition as the municipalities see fit. The municipalities are losing considerable tax revenue from the loss of this land. It is worth pointing out that the return from the sale of this land will go to the municipalities, not the railroads or the federal Crown.
All hon. members opposite I am sure would endorse that particular aspect of this policy, which is meeting with the approval not only of municipal officials across the prairies but all farm groups in every province. Recently at a meeting in the province of Quebec the Canadian Federation of Agriculture endorsed the federal minister's proposals with respect to ownership of the rights-of-way of such land.
We have yet to see any tracks abandoned since the Hall report has been presented. I am aware of the fear, concern and apprehension that for many years has been shown particularly by members of the New Democratic party in some provinces. This issue that they have been worrying about for so long covering something like 14,000 miles of rail line in western Canada has now largely been cleared up and clarified right through the year 2000. There will be a period of indecision as to whether another 2,000 miles of line will be retained, rebuilt or abandoned after some four or five years.
I am pleased to endorse this bill. I point out that it is purely superfluous because of the action of the government and the Minister of Transport. This bill is not required in my riding-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member. The time allotted to the consideration of private members' business has expired. I do now leave the Chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. MacEachen (for the Minister of Finance) that Bill C-16, to amend the Bank Act and the Quebec Savings Banks Act, be read the third time and do pass.
Robert Hylton Brisco: Mr. Speaker, earlier today when discussing the proposal to give the revision of the Bank Act a one year hoist, I indicated that I had very serious
February 28, 1978

reservations about the wisdom of that proposal. The hon. member for Selkirk (Mr. Whiteway) and others have spoken most effectively. They presented very persuasive arguments why this should not be, not the least of which is the footdragging of the government which has in effect had ten years of notice of the revision of the Bank Act. It may well be, as I indicated earlier, that events will catch up with the Bank Act revision.
I indicated earlier there is presently before the courts in Vancouver a situation involving a chartered bank and Arvee Cedar Mills Ltd. I suppose it is quite common in this day and age, indeed in any day, to have banks involved in cases of law with clients. However, when the situation gets to the point that the Inspector General of Banks feels it necessary to have a solicitor from his department sit in to observe the circumstances of this case, the degree of seriousness escalates at once.
As I mentioned earlier, the Inspector General of Banks does not have the capacity to act in a very specific way in terms of any punitive-Mr. Speaker, I am having great difficulty hearing myself, let alone the rest of the members. I wonder if we could have a little order in the House.


The Acting Speaker (Mr. Turner):: Order, please. The hon. member for Kootenay West (Mr. Brisco) has the floor and I suggest we all listen.


Some hon. Members:: Hear, hear!


Robert Hylton Brisco: It would be helpful if the hon. member for Vancouver-Kingsway (Mrs. Holt) would simmer down.


Simma Holt: What was that again?


Robert Hylton Brisco: There is very little teeth in the Bank Act to allow the Inspector General to participate in a real and punitive sense with regard to the activities of a bank, whether they be legal or illegal. However, in the case I mentioned earlier today, it is significant that the Inspector General of Banks has seen fit to send a solicitor to Vancouver to observe this particular case.
It is further significant that the federal Department of Justice should have assigned two of its solicitors to be present and to look into the background to this case. Even greater significance can be attached to the fact that the same Mr. Raugust of the Vancouver Sun is shortly going to publish a feature story running, as I understand it, through several editions, dealing with this very case and the abuse of the individual by a chartered bank. It is more than passing strange that this particular case, which involves a cedar mill which went into receivership and was subsequently sold for the paltry sum of about $85,000, should now be back in receivership in the hands of the same receiver, a Mr. Sigurdson of Vancouver, who incidentally handles about 70 per cent of the receivership cases in Vancouver.
Ad hon. Member: And a Liberal!
Bank Act


Robert Hylton Brisco: And a Liberal. It is passing strange he should have this kind of corner on the market. Certainly he has had that corner on the market in Kootenay West in terms of Arvee Cedar, Quadra Manufacturing, Carefree Enterprises, and what other companies I know not. I find it strange indeed that this gentleman should have his oar in to such a degree that when a pressman from the Vancouver Sun approached him and asked "What is your interest in this case?", he should have replied, "I had better talk to my lawyer."
If there was ever a shadow of concern that perhaps he was skirting the bounds of legality, that kind of statement would certainly have made the Vancouver Sun reporter suspicious. And, indeed, he was. He said: "You know, that is the strangest statement I have ever heard in response to a simple question". Here is a man who is busy putting all kinds of companies in Vancouver into receivership for the chartered banks. I think it should also be noted that the solicitor who represents the Vancouver Sun, a man of no mean repute and ability, is also the solicitor who is representing Arvee Cedar Mills in its case against the Bank of Montreal.
It should also be noted that lawyers in smaller communities, who are often overlooked but who have a great deal to contribute and whose skills are often equal to, if not greater than, those of lawyers in the larger cities, have also taken part in this case in one way or another. I refer to a man who, as I understand it, is a good Liberal. I am not sure there are many good Liberals around, but at any rate, he is a Liberal, a man by the name of Warren Ferguson from Nelson, a very competent solicitor in any event. I say to you, Mr. Speaker, that when this bad smell emanating from Vancouver involving the chartered banks-the Canadian Bank of Commerce and Nelsal, and the Bank of Montreal and Arvee Cedar-comes before the public there will be a great deal of pressure on ministers of this do-little government to get off their collective backsides and bring in the Bank Act for revision.
I wonder whether Sir Josiah Stamp ever visualized that the Bank Act would get this kind of treatment or that some banks would treat the act in the manner they have since he introduced the original legislation in 1931. Sir Josiah Stamp, as hon. members may remember, was chairman of the royal commission in 1931 which recommended that Canada set up a central bank, following which the Bank of Canada was incorporated and has since then advanced all our legal tender.


Mr. Woolliams:: R. B. Bennett did that. R. B. Bennett was there.


Robert Hylton Brisco: I could go on at some length about the necessity of reviewing the Bank Act at this time. After all, the Minister of Consumer and Corporate Affairs (Mr. Allmand) has done nothing with his borrowers and depositors protection legislation. That was a total disaster. There is no way in which the underprivileged individual, the low income earner, can approach any chartered bank and expect the kind of treatment which you, sir, or I might expect to receive. Let us draw a credit line at that point, however, and say it is my understanding, as a result of serving on the committee and listening to

February 28, 1978
Bank Act
witnesses, that at least the Bank of Montreal has made an effort in that context right in the heart of loan-sharking territory. This is commendable. The bank was able to demonstrate that, although a person might have only low or negligible income, he or she could be trusted with a bank loan, which as a rule amounts to $100 or $150. Such an amount might seem an insignificant sum to many people, but to those at the near edge of things it is a princely sum indeed since it means the difference between having food for the family and having no food to put on the table.
I hope the Minister of Finance (Mr. Chretien) will take the time to read a submission which was forwarded to the former minister of finance in August, 1976 by a Mr. Alton Dahlstrom of British Columbia which dealt with the white paper on Canadian banking legislation. It is an excellent submission and I take this opportunity of recommending it to the present minister and to other members on the government side realizing, however, that in all likelihood they will ignore it since in this instance the author is a Conservative barrister and solicitor rather than a Liberal.
I hope that before parliament adjourns I will have the opportunity to deal with the Bank Act itself instead of addressing myself to this ridiculous proposal for a one year hoist. If, indeed, there is a one-year hoist and the Bank Act revision does not come back for a year, I can assure you, Mr. Speaker, that we in the Conservative party will deal with it properly as a government.


Leonard C. Jones: Mr. Speaker, it has been an interesting day in the House, listening to the debate on Bill C-16. Sitting at this end of the House I am very concerned, too, that the group of independents has increased 100 per cent as a result of a form of excommunication by a certain party in this chamber.
As for the bill before us, it is not my intention to speak about it for very long because there is really nothing to speak about. It is a nonentity. It is not a new act; the government merely asks for an extension of the same old thing for a further year, a continuation of the same act by the same old government, too tired and too worried to get the bureaucracy down to some good hard work for a change. The government has clearly shown by its attitude to this legislation that it is not prepared to tell the bureaucracy what to do. Instead, it prefers to wait for the bureaucracy to tell it what to do, a good example of the essence of socialism. The government has shown that it is not a promoter of free enterprise. In fact, it is not a promoter at all. I think some politician once said you can fool some of the people all of the time and all of the people some of the time. But you cannot fool the silent majority in this country for too long. [DOT]


Eldon Mattison Woolliams: I will help you if you don't know who that was. It was Abraham Lincoln who said that.


Leonard C. Jones: Yes, and I will quote him later on. He is a good man to quote, and it is too bad hon. members of this House do not use and follow his quotations more often.
I cannot say I really oppose what the government has in mind, if it has anything in mind at all. It has not brought in a bill with a policy; it has just asked for an extension. It seems to me the government has shown a bit of lackadaisicalness either in the Department of Finance or the Department of Justice. Surely to goodness it must have drafted a bill now that it could bring before this House. If the Minister of Finance (Mr. Chretien) wanted a hoist for a year he should have had the common courtesy to present a white paper, a green paper, even a red paper or maybe a yellow paper, to show us what is the policy of the government in relation to banks and banking. This is what the people of Canada are concerned about; certainly it is the concern of customers of the banks. It should be the concern of this parliament.
Everyone is talking about the eve of a federal election, and some say it will be within a few months. That is no excuse for failing to tell us what government policy is in relation to banks and banking. This is a very important subject, particularly at a time when our economy is in such bad shape. We should know where we are going in so far as banking is concerned.
We really have nothing to debate here. Do we agree that we let this revision go for a year, or do we not agree? Should we let the government have its way and give the act a 12 months' hoist? It does not take 12 months to draft a bill in relation to banks and banking policy. It does not take 12 months for a good lawyer to draft a bill.


Eldon Mattison Woolliams: He doesn't know them like I do.


Leonard C. Jones: I do not know whether I can support the bill until the Minister of Finance brings the policy before us. It is a sad day for democracy here to be witness to such unreasonableness on the part of a minister who introduces a bill which really says nothing except that he wants 12 months to do something he should have done ten years ago. We should have the final bill.
Reference was made by the NDP member for Yorkton-Mel-ville (Mr. Nystrom) to the poor conditions in the maritimes. He sure wanted to run down the free enterprise system. Let me point out that, like a lot of members of this House, I am not a socialist, and, like a lot of people in Canada, I do not believe in socialism. I am in favour of the free enterprise system. I am sure a lot of the problems of this nation could be solved through the free enterprise system. I am proud that a lot of people in my own constituency built their businesses and their lives on the free enterprise system. There is nothing wrong with making a profit so long as you are prepared to work for that profit, free of government interference, particularly dead weight government interference.
The hon. member mentioned the poor conditions in the maritimes, but let me assure him that those conditions are not the result of the free enterprise system. I can assure him that if he reads the history of the maritime provinces he will see that we were not always poor. What has made us poor are things

February 28, 1978

like socialism. It has wormed its miserable way into our area. In fact, we have lost many things through socialist provincial and federal governments.


An hon. Member:: Is that the Conservatives or the Liberals?


Leonard C. Jones: Both of them, and they call it equal opportunity down there. If the rest of Canada would come to its senses and get off this socialist bandwagon, with proper leadership we in the maritimes could fare pretty darn well.
We hear a lot said about pipelines and the St. Lawrence Seaway, part of which we in the maritimes paid for. It had a great impact on maritime seaports. I am sure we are going to help pay in the longrun for subsidization of the pipeline and other things across this country. These things are called for by socialist or semi-socialist regimes, provincial and federal. This is what hurts poor areas like the maritime provinces more than anything else. The rich get richer and the maritimes get poorer because of the socialist system. We do not want or need handouts. What we need are workouts in the maritime provinces. We need a free enterprise system to give us a little boost. That is all we need in the maritime provinces and with that we would be a "have" province before long. But we cannot do this with socialism.
I suppose to some of you the phrases "handouts" and "workouts" are new, but these represent the issues in this country today. There is a necessity for a return to the free enterprise system, particularly in this time of our failing economy. There is a necessity for a return to the principle of good hard work in business and in government.
My reference to handouts and workouts no doubt puts many of those on the government side of the House in a state of wonderment, not only about the meaning of those phrases but also about the seriousness of them. I do not want them to be deceived by the apparent light humour of those phrases. They are serious and meaningful, especially as I intend to use them tonight.
As hon. members are all well aware, over the last number of years our country in its entirety from coast to coast has been placed in a state of advanced socialism. We must admit that. This has been partly due to a failing economic order on the part of the government. But that is only half the reason. That is right; before our very eyes we have seen this country become a welfare state. Although this plan of welfare may fare well in the short-term, it certainly cannot be the rule for the longterm. If these programs of free government care continue, the federal Department of National Health and Welfare-or should I say "wealth and hellfare", because that is the department responsible for the majority of government grants and donations-will soon put this country so far in the red that we will never be able to see the light of day.
I am trying to tell it as it is. Some members may not know how it is. They should see what some of the books say about it. There is no escaping the fact that man must produce goods in order to enjoy them. Despite the availability of government free lunches and the patchwork quilt of welfare benefits offered by all layers of government, there is no disputing the
Bank Act
fact that the law of supply and demand cannot be repealed. You cannot extend that for a year. We will remain in this mess of today unless something is done immediately to doctor the situation. The establishment of a Crown bank, as has been suggested, offers no solution. I am sure such a bank would be in a deficit or bankrupt position overnight, and again the free enterprise system would begin to go down further.
It may seem absurd to some hon. members to turn to the past to find an appropriate remedy, but these basic truths and fundamental principles to which we must return in Canada were spoken of many years ago by a famous American politician, known to all of us. I refer to Abraham Lincoln. I have referred to these truths before and I should like to repeat them tonight. I hope hon. members will listen because they are very apropos this debate. He said:
You cannot bring about prosperity by discouraging thrift. You cannot strengthen the weak by weakening the strong. You cannot help the wage earner by pulling down the wage payer. You cannot help the poor by destroying the rich. You cannot establish sound security on borrowed money. You cannot keep out of trouble by spending more than you earn. You cannot build character and courage by taking away a man's initiative and independence. You cannot help men permanently by doing for them what they could and should do for themselves.
It has been said on more than one occasion that Canada is the most overgoverned country on earth. In almost the same breath, the sentiment is expressed: thank God we do not get all the government we pay for. I realize these are contradictions, but they indicate our essential dilemma. When municipal, provincial and federal levels are combined-and included therein are the marketing boards and regulatory agencies- there is no doubt that Canada is being overgoverned.
One cannot really blame the government for all their inefficiencies because their programs are conjured up partially to win elections. But it is time for Canadian businessmen to call a halt to some of the welfare situations. Governments cannot create wealth. They can provide only the climate where it can be generated and disbursed. We must find ways of allocating powers between governments. Also we must find ways of lessening their deadweight interference in the economy. Already we have gone too far. It is time for this nation to rebuild the barricades.
My own constituency has received assistance, and it will receive more assistance from DREE and the Federal Business Development Bank. During the last 11 months assistance was received from the Federal Business Development Bank by 39 small businesses. That is what is needed in the maritime provinces. This bank is capable of doing this. It provides incentive to industry, which is what Canada needs. The private businesses in the maritime provinces require a little push. That push can go a long way. With a little hard work, nothing is impossible.
The word I use is "work". Work will be the key to the success of parliament and the nation. We can no longer expect lunches to be free. The government is starting to admit that it cannot continue giving handouts. Even the government pot is running dry. In fact, it has gone dry. We require workouts.

February 28, 1978
Bank Act
Not only do we require work on the part of individuals and industry, we require work on the part of everyone, including elected representatives at all levels. If all elected officials, regardless of their petty political wrangling, worked in a united front, we could fight the common problem on our doorstep. Work and action will accomplish the things which have to be done, not the words which are spoken day after day. We require action by responsible politicians. Some hon. members may have an opinion different from mine. To them 1 say, "The steam that blows the whistle will never turn the wheel".
Canadians must return to the principles I mentioned earlier. We must return to the free enterprise system. There is nothing wrong with it. Also we must return to hard work. This is the basis upon which this nation was built. This is the basis upon which this nation will continue. 1 am referring to simple hard work. Perhaps that is unknown to many bureaucrats. It will be necessary to teach them to work hard. If they had been taught that, we would have been considering the Bank Act today rather than just an extension of it. Handouts are not the solution. We require incentives to industry. If industry receives those incentives, it will do the job.
What we are considering tonight indicates that the government does not have the policies we require, nor are the government bureaucrats prepared to work hard.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I was very surprised to learn tonight that the maritimes have become socialistic. I am sure Mr. Hatfield, Mr. Campbell, Mr. Moores and Mr. Regan will be surprised. If the maritimes have become socialistic, it is the best kept secret in Canada. If that is so, perhaps it would be better if it remained a secret, rather than the hon. member for Moncton (Mr. Jones) informing the people of the maritimes about it. Presumably it has happened without their knowing.
If we were to move a 12 month hoist on this bill, we would accomplish what the government is able to accomplish in any event, which is the postponement of the decision on the decennial review of the Bank Act. That review is already nine years late. As the hon. member for Winnipeg North Centre (Mr. Knowles) indicated, he will be here long enough to see it missed for the entire ten year period.
I do not believe the maritimes has become socialistic. Perhaps there are too many free enterprisers in that part of the country. There seems to be an acceptance of the subsidies given by the government. The Bank Act is being postponed because the government and the banks are not sure what they will do in the next two or three years to solve some of the problems in regard to the Bank Act. One problem is the government's relationship to the banking industry. Another problem is the roles which are played by members in the caisses populaires and credit unions of the country. Changes have been suggested with respect to the relationship which exist among the government, the caisses populaires and credit unions. It is difficult to decide what political advantage will be gained by including credit unions in the Bank Act, or allowing them to operate in the way they have in the past. It will be necessary for the government to consider this suggestion for
another two or three years, because it would be unwise if a wrong decision was arrived at prior to the forthcoming election.
I am concerned about what is happening to our Canadian dollar at the present time and its relationship to world currencies. The money markets of the world have been destroyed by asking countries to make deposits to the International Monetary Fund, and then giving them drawing rights against the IMF for the third world countries. The initial idea was that if the countries which were in a fairly sound financial position were to allow money to be lent to the developing countries, those countries would develop and then would become consumers while the countries which had lent the money would be able to do business and get their money back.
There is an interesting article in Myers' Finance and Energy publication. I know some hon. members are not the least bit impressed by some of the advice given by Richardson, Myers' or some of the other agencies on what to buy, what to sell and where to put their money, but the February issue of their commentary indicates that there are $400 billion Eurodollars floating around the world. They indicate, in a long and involved way, that the U.S. Treasury does not owe money for these Eurodollars. Many U.S. dollars, have been processed by the IMF and have reached Europe not as a debt but as a currency for which the U.S. takes no responsibility. The United States has made its sale, they have been paid for it in U.S. dollars and these dollars will not be picked up by the U.S. Treasury. The commentary goes on to say:
The U.S. Treasury does not owe any of those dollars and has no responsibility to make good. Only when the U.S. dollar was backed by gold was it in the position where it had to be made good. If an Arab potentate buys $10 million of U.S. Treasury notes, the U.S. does owe and must pay those dollars. If, however, the potentate puts $10 billion in Citibank and certificates of deposit, the U.S. has no obligation to pay those dollars. Citibank does, but the country doesn't.
It goes on to say that in their opinion there is probably $1 trillion floating around, only $800 billion of which the U.S. Treasury has the responsibility to repurchase, and that the great danger the world faces today is not inflation but deflation.
This commentary points out:
The very great danger rests in the contraction which is taking place all around the world. Japan at present is leading with bankruptcy. So far these are mild and they have not caused more than a few large failures, which have been absorbed. But if the illiquid debtors around the world run into a bad climate generally, many of them will have to defer payment, some of them will have to default payment. A certain amount of this can be handled. But if at the same time the depositors get scared of what is happening and begin to withdraw their funds, the banks will be left defenseless because, as previously stated, they simply do not have the money. It is in the hands of the illiquid debtors.
It goes on to say-


Maurice Adrian Dionne: Table it.


William Arnold Peters: It has been sent it to all members. The hon. member has not read it.


An hon. Member:: Shame.

February 28, 1978


William Arnold Peters: It goes on to talk about depletion at home. World farm prices are in bad shape in the United States. The European countries and Japan are politically bound to protect their farmers. This protection has the effect of reducing-


Some hon. Members:: Dispense.


An hon. Member:: Table it.


William Arnold Peters: I would be pleased to table it but the rules of the House do not permit it. I am sorry that so many hon. members do not know the rules of the House. I will continue to read it. Hon. members will be very interested to hear that if they were smart enough to read this and understand it, they could profit from it. Yes, even hon. members from the mari-times might be interested, members from that "social paradise" in Canada, the maritimes. As Myers' states:
Literally hundreds of thousands of pounds have been bought on credit-
This is certainly true of Canada.
-with the expectiation that the world would continue to go ahead in the 70's as it did in the 60's. But if this expectation proves to be wrong, these farmers will not be able to pay. Already they are crying for a debt moratorium, but who is to finance the moratorium?
The banks have lent them the money. But the money belongs to someone else who deposits in the bank. When that someone else demands his money, the banks will have to pay him, and so the farmers will have to pay the banks. If they do not, either the banks or the farmer will go bankrupt. If either of them go bankrupt first, then the original depositor will not be able to get his deposits out of the bank-and he will go bankrupt.
It's really not hard to accept this case for world deflation. To me, it's a much stronger one than the projections of inflation by most newsletters and the prognosticators. It could start at any time. It could start with default by foreign countries. It could start in Europe. It could start by withdrawals of large amounts of Arab money; and Japan-or even at home.
I know hon. members do not pay much attention to this, but let me read them the advice this gentleman gave. He went on to advise people who want to buy something that they buy gold. This commentary was published on February 10.


Maurice Adrian Dionne: What does he advise us to buy?


William Arnold Peters: Gold, that yellow stuff found in the ground which has been fairly stable in value in unstable times. Myers states:
Gold therefore stands on solid base around $170 to $175 as it moves toward its first important barrier, $185. But this barrier could quickly crumble in face of unpredictable events. Also, Carter's total deficit, disclosed and undisclosed, for 1978 and 1979 will be close to $160 billion. Worldwide awareness of this is reason for dollar's recent weakness and will push gold easily above $200, perhaps $250 this year in its march to unexpected new highs later on.
On February 10 the price of gold in Canada was $172 an ounce, but because of the instability of the government and banking institutions in Canada the price of gold last Friday, before the end of the month, stood at $203 an ounce. This means, for my friend from New Brunswick-


An hon. Member:: Which one?


Stanley Howard Knowles: There are three of them over there.
Bank Act


William Arnold Peters: All my friends from New Brunswick, those four socialists from New Brunswick. If they had bought futures for a May delivery, it would not have cost them any money, if they had just learned to read and understand the system. If they wanted to buy futures-400 ounces is the minimum they could buy-they would have to make a deposit, but on $65,000 worth of gold it would not be a very large deposit. They would then be able to sell that gold at $203, thus making somewhat over $25 an ounce in round figures. That $25 an ounce for 400 ounces would mean slightly over $10,000 in profit. Even a socialist maritimer would not object to that kind of profit. Anyone who is smart enough to tell you how you can make $10,000 in two weeks on a small deposit should be worth listening to.
Our currency is in trouble. I raise this matter because the government is now going to the banks to borrow money. The government will borrow $2 billion. It has asked the United States or other foreign markets to supply us with another $2 billion. That is $4 billion. We probably still have $5 billion in foreign currency. If we start to put that out, thinking we will hold our Canadian dollar when we have a government which cannot even bring forward a new Bank Act, and when there are no plans for a new Bank Act or for the future, and if we think we can spend $100 million a day to raise the value of our dollar one quarter of a cent-and it will probably slip back at the end of the day-we will see how bankrupt this government is.
If the government were to put up the total amount, it might be able to hedge our dollar against the American dollar; but let us not forget that the American dollar is in very serious difficulty. The American dollar is not even worth 60 cents against the yen. Perhaps it is worth 65 cents against the French franc and about 68 cents against the Swiss franc, or vice versa. The American dollar is in a very serious position, and now we are going to put up whatever reserves we have to bolster our dollar when everyone knows that economically speaking this country has no government, no policy and no plan for a long-range solution to our economic problems.
There are advantages associated with our devalued dollar. If its value goes down to 60 cents American, I will be unhappy because my national pride will be hurt. However, we would sell tremendous amounts of lumber from northern Ontario because we would have a 40 per cent advantage over the United States. The Americans would shut down their mills and buy our lumber.


Edward C. Lumley: Go back to the Bank Act.


William Arnold Peters: My friend says I should go back to the Bank Act. This man speaks for the Minister of Finance (Mr. Chretien), who cannot bring in a bill which is already nine years overdue.
We are not talking about the 1980s for the revision of the Bank Act. We are talking about the 1970s. This minister who cannot bring in a new Bank Act is going to give us some advice

February 28, 1978
Bank Act
on currency and on the relationship between the banking industry and our economic problems. If he is, he should get cracking with some of the people at the Bank of Canada and other stupid financial institutions to whom he listens. He should be considering what would be to the best advantage of Canada.
I would not want to see the dollar go down to 60 cents American, but at 80 cents there would be a 20 per cent advantage. That would mean that even members of parliament would be cautious about going out of the country because it would cost too much. People would be making up our $4 billion tourism deficit here. They would be staying at home.
We would not be buying television sets from Japan, we would be making them. Perhaps those socialists from the maritimes should consider that. We have spent a lot of money on maritime socialists. We gave them a nationalized industry, Clairtone. We put DREE money into that.


Leonard C. Jones: And Bricklin.


William Arnold Peters: We can talk about Bricklin too, it makes no difference. As long as the dollar stays at a 20 per cent advantage, investors would invest in Canada and there would be production in Canada. 1 suppose even rubber boots would be produced in Canada. We went out of that business years ago because we could not compete. With a 20 per cent advantage we could compete, and Clairtone could operate a television business, unless all its assets have been disposed of.
I have always said that a Canadian car should be produced. That could be done if we had a 20 per cent advantage. People would invest in Canada if they could get that kind of premium on their money. They would get high interest on that kind of high-risk money. They would not do too badly. We would see lots of money coming into this country. The banks would have to consider stopping money coming into the country. If they did not, we would be flooded with capital. In my opinion that would be detrimental because many branch plants would operate here and profits would be taken out of this country. There would be high profits because of high risks.
It seems to me that we should not just be revising the Bank Act. We should be looking at where we are going. I am sure the hon. member from Miramichi in the maritimes has gone to meetings in his area at which some dumb bunnies have asked him about the national debt.


Maurice Adrian Dionne: Mr. Speaker, while I enjoy the hon. member's explanation of the financial situation in this country, which he obviously does not understand, I want to point out that I come from the riding of Northumberland-Miramichi and that there are no dumb bunnies in my riding.


William Arnold Peters: Mr. Speaker, as I was saying, people must ask questions about the national debt in the hon. member's riding because they do in mine and in other parts of the country. When we have discussed the Bank Act in the 20 years I have been here we have never discussed the national debt, yet there are people in this country who believe that the national debt is

something they owe, that perhaps we should turn our attention to it, that for this reason we should not have huge deficits to carry the financing of the nation but that perhaps we should be reducing them.
There may be some merit in discussing these matters, and they might be discussed even in the socialist maritimes. I am not above admitting I am no expert on this subject.


Eldon Mattison Woolliams: You could have fooled me.


William Arnold Peters: I know a considerable amount about gold, but I do not know so much about the way the Liberal party finances the economy of the nation. I do know that we should have a serious discussion about it. I was very shocked a week or so ago, as I am sure the country was, that when the hon. member for York-Simcoe (Mr. Stevens) asked the Minister of Finance what he was going to do about the falling dollar, the minister flippantly said he was not going to do anything about it, that the dollar was fine and that everything was rosy.


Sinclair McKnight Stevens: We were all shocked.


William Arnold Peters: Then later the minister said we would spend an unlimited amount of money to bolster our dollar. I think it is time the minister discussed the intentions of the government. How is the government going to finance our dollar?
Our dollar is obviously not floating now. It is being bolstered by American currency. I suggest that we should know how much of that $5 billion reserve fund is going to be spent. We should know how much of the $2 billion which has been borrowed from Canadian banks and how much of the line of credit which has been arranged with foreign agencies will be spent. We should know that because I am sure that $200 million is not going to help. That is obvious because a number of years ago the government under the right hon. member for Prince Albert (Mr. Diefenbaker) tried it and spent a lot of money trying to maintain the Canadian dollar without pegging it.


Eldon Mattison Woolliams: Not as much as this government.


William Arnold Peters: I am sure it was not as much as this government is going to spend because the international money market today is very pernickety. It is not sound in any country. The United States is trying to get Germany to peg the German mark and the Japanese the yen, but both countries are resisting because they do not want to price themselves out of world markets. I think we will be throwing a lot of money away, trying to keep reasonable limits on a dirty float of the Canadian dollar against United States currency.
The newspapers are full of declared bankruptcies, Mr. Speaker. They appear every day in the Montreal Gazette and in the Toronto newspapers, so Japan and other countries with which we do business are not the only ones with this trouble. If there is devaluation of our dollar I am sure my friends in the Social Credit party, who know quite a bit about international finance, would say it would be greatly to our advantage to
February 28, 1978

retain the deposits which we now hold in foreign currency. It would be a good thing to have that in a time of need when it will be required if we are to carry on trade.
I am sure the Minister of Finance and the government are getting much advice on how to stabilize our dollar and whether we should continue to back our currency with the International Monetary Fund. They could ask the hon. member for Eglinton (Mr. Sharp) to advise them on the latest developments of the tri-lateral commission of which he is one of the chairmen. The object of this tri-lateral commission, set up by David Rockefeller, is to replace the International Monetary Fund, which they believe is going bankrupt. I think they would be interested in having a former minister of finance discuss Canada's role in that new agency.
Hon. members opposite laugh. They do not believe they should have any control over the banking institutions of this country. In the last four or five years some hon. members in this House have suggested that we should have more banks, and they will remember that I disagreed. Banks in this country do not operate in a free enterprise system. Sometimes they compete with trust companies, but they own the trust companies so it does not matter whether the trust company or the bank makes a loan because the bank will lend the money to the trust company anyway. There is very little competition in banking in this country. That goes for the International Development Bank as well, which I have not found to be a paragon of generosity when dealing with people who want to borrow money.
I am prepared to agree that banks should be nationalized and brought more under government control than at present, although most of them would maintain that they are well controlled now. That is partly true. There is no point, however, in allowing banks to build office towers like that one on Sparks Street. If I were in charge of that banking institution and had money stored there I would have the mirrors on the inside so that everything would be rosy, and then instead of there being one pile of money there would seem to be three piles!
The Bank Act should be changed and the whole banking structure of the country should be changed, Mr. Speaker, because there is no banking competition. If you want to borrow money and are turned down by one bank you will likely be turned down by another; and if you are turned down by two banks the Industrial Development Bank will not let you borrow money.
I do not propose that we should return to backing our currency with gold, but we should back it with something. There seems to be little reference to the gross national product as a means of backing money which is outstanding. We do not seem to be making an effort to reduce the national debt. We are living on a credit card just as individuals are being encouraged to do.
It is all very well for a bank to send me a letter outlining all the ways I can borrow money on my Chargex card and complaining that I have not used the card in the last three months. I suppose it is all right to use the credit card as long as
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there is money in the bank. But unless there is, I would be operating at a deficit. That may be necessary for me when I make a major purchase but it may not be an advantageous way for a nation to do business.
Someone who spoke earlier mentioned restrictions, and I should not be surprised to see some of them contained in a new budget, Mr. Speaker. We are borrowing money against the U.S. dollar in order to peg our dollar, but we have not done anything about the financial drain that is taking place in many areas. Some of this we can do something about and some we cannot, such as importing fruit and vegetables in winter. It may not be advisable for our tourists to spend $4 billion outside the country each year so controls may have to be put on travelling. I am sure some hon. members are not old enough to remember when that happened before, but it was since World Was II and travelers could only take about $200 out of the country. Such restrictions may have to be imposed again to help our balance of trade. That is the deciding factor in how other nations see us. How other nations see us is by their evaluation of our currency, and our dollar will reach that level of their support.
Again I tell those socialists in the maritimes to read Myers' report. He told us to buy gold. He told us not to buy certificates in South Africa because of the political climate there. His suggestion is to buy gold and nothing else. If the maritime socialists take his advice, they may find in that paradise that the sun may shine on them too.


Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, the shifting of the financial centre of Canada to a most westerly position has occurred in Canada in spite of rather than because of the initiatives of this centralist government. It the government intended to pay more than lip service to the concept of regionalism that is being espoused across this land, they could have demonstrated it in this Bank Act. They could have demonstrated it in minor ways by making changes in the basic structure of the board of directors of the Bank of Canada. Perhaps they could have considered the reintroduction of bill C-7 which was brought forward in 1974.
The Bank of Canada is controlled by a governor, a senior deputy governor, two deputy governors and 12 directors appointed by the federal government for three year terms. The Bank of Canada is the most centralized of all the regulatory agencies in that it has no mechanism for regional accommodation at all. The Bank of Canada's macro-economic models are strictly national in scope and make no estimate of the bank's policy as it relates to the regions. Provincial officials have complained long and loud about the inadequate consultation between provincial governments and Bank of Canada officials.
If our government intends to review the banking legislation, it is not sufficient to receive briefs from and examine the chartered banks and near banks. The Bank of Canada's policies determine significantly the behaviour of all banking institutions. If regional aspirations are to be given the consideration they deserve, some day there should be direct

February 28, 1978
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appointments by provincial governments to the board of directors of the Bank of Canada.
If the Bank of Canada considers it cannot find 12 directors outside of central Canada who have the financial capacity to represent or express regional aspirations, or if they consider the rest of Canada is incompetent financially, or if they fear the provincial governments and do not want direct provincial government input or appointment, perhaps they could in their own representation-


The Acting Speaker (Mr. Turner):: Order, please. The Parliamentary Secretary to the Minister of Finance is rising on a point of order.


Edward C. Lumley: Mr. Speaker, if I understood the hon. member correctly, he said that there were no members from British Columbia or western Canada serving on the board of the Bank of Canada. I think he should check the list of directors of the Bank of Canada.


Robert Lloyd Wenman: I was suggesting to the House that there is no regional representation; that members chosen for directorship have in the past been and continue to be not regional in their recognition. I am suggesting a specific proposal, that the government recognize the provinces by allowing them to make some appointments to the board. If the government is afraid of the provinces and does not wish each province to recommend one appointment, then perhaps the government could choose five representatives. Or perhaps a system could be found which would, within the appointments of the federal government, recognize the regionality of Canada. This is not the situation currently and it should be.
Another matter which the government might have considered in its Bank Act revision legislation is permitting chartered banks to use provincial treasury bills as part of their secondary reserve requirements. There are several advantages to the proposal. It would lift what could be considered a monopolistic federal tax on chartered banks. The federal government's discriminatory action against the provinces in the secondary reserve requirements is typical of its lip service in recognizing regional rights and aspirations rather than do so on a realistic basis.
In 1974 after the infusion of a few more Conservative MP's from western Canada we thought the government had heard western Canada when it acceded to British Columbia's request for more regional autonomy by introducing a bill which would allow a 25 per cent equity position by a provincial government in regional chartered banks. That was three finance ministers ago.
Why did the government not accept this proposal? Was this window dressing tokenism? Or was it because the legislation that is currently being planned by the government was in fact the new socialist controlled system that the Prime Minister (Mr. Trudeau) muses about so loudly so often? Perhaps the hon. member who has just spoken was revealing some inside information and the government is going to restrict Canadian travel by restricting the amount of money we can take out of

this country. Is that socialist policy government policy? I hope not. I hope they will make that matter clear before the next election.
Why did the government not bring forward the former bill C-7? Is it a stall to get the government past another election? Is it because the government does not want to accept the proposals presented to it or does not know what to do? Regardless of the excuse, it is inadequate. Instead it should be part of a substantial major economic package which would improve the sagging economy of this nation. The country cannot wait 12, 18 or 24 months for a new Bank Act or a new economic thrust. The country is tired of the election paralysis which has fallen over this parliament and Canada. It is time that the government did something concrete or called an election so we can get on with governing this nation.
This bill is one of the government's excuses for inaction. It is a further stall tactic. It means that on election day Canadians will choose a new government to bring in a new economic package which will include a new Bank Act and the provisions which are wanted and needed by Canada.
[ Translation]


Eudore Allard: Mr. Speaker, the white paper on the Canadian banking legislation published at the end of August 1976 would have the banks more competitive with credit unions, and other banking institutions. The members of the Social Credit Party of Canada believe that chartered banks at present are in a better position than other financial institutions in the country since they have the privilege to create money with a mere stroke of the pen.
A while ago I heard the hon. member for Timiskaming (Mr. Peters) say that he thought that the banks were sufficiently powerful, but chartered banks do not have control. They are self-controlled and they even control the members of this House as well as the government. They rule the roost. Mr. Speaker, I am pleased to take part in the debate on Bill C-16 since it gives Canadians the opportunity to get acquainted with the operation of our monetary system. I have before me some statements on banking assets from 1967 to 1975. From October 30, 1967 to October 31, 1970 those assets increased by $6 billion; from 1971 to 1972, by $8 billion; and from 1973 to 1975, a record increase of $16 billion. I said "record", but I think they will beat that record this year. In June, I forecast that the chartered banks would make a net profit of $25 billion, but I foresee now that those will reach $26 billion this year.
Mr. Speaker, before the Bank Act was revised in 1957, the increases in bank assets varied between $2 and $3 billion a year. With regard to interest rates on loans to their clients, there was a 7 per cent ceiling from 1934 to 1944 and 6 per cent from 1944 to 1967. When the ceiling was removed in 1967, rates remained subject to a very complicated increase which depended more on the general trends in financial mar-
February 28, 1978

kets than on the public will or that of the government. Before 1967, when the Bank Act was revised, bank shares were set at a $10 par value. After 1967, that par value was lowered to $2, but worthy of note is the fact that those same $2 bring in from 50 to 80 per cent in dividends annually. Today, it is easy to see that despite their par value of $2, bank shares fluctuate between $14 and $45. On that par value of $2, banks pay a dividend that varies between 25 cents and 40 cents, about four times a year, that is from $1 to $1.60 a year on a par value of $2 depending on the market, profits and other appreciations of market values.
Needless to say, Mr. Speaker, all that is very complex for the non-initiated to the monetary, economic and political systems in Canada and the United States. But, before going any further, Mr. Speaker, I should like to go back somewhat to better situate us in the banking context. During the worst of the 1930-39 depression many economists, Canadian, American and even from around the world met in Canada to study the phenomenon of the economic depression, the worldwide stagnation and the lethargy of business.
It is as a reaction to the increasing misery in a great many countries of the world that the Bank of Canada came up with all these regulations governing chartered banks, the printing of money, interest rates, etc. For 22 years, specifically from 1934 to 1956, the Bank of Canada maintained a basic interest rate of 2 per cent which made it possible for it to survive through the difficult years of the depression, World War II, the post-war boom, and part of the inflation which accompanied this boom.
As I was saying a moment ago, the chartered banks were limited to a ceiling of 7 per cent on loans from 1934 to 1944. At the time of the decennial review, this rate was reduced to 6 per cent for the period from 1944 to 1967, when it was decided to lift the ceiling on interest rates, without saying that this was a way to fight inflation. We realize today that the result has been quite the opposite As a matter of fact, this may be the most inflationary period ever, together with record unemployment. In 1967, we celebrated the centennial of Confederation. On that occasion, Canadians paused to consider the road already covered. Well, they came to realize that over the past 100 years, our chartered banks had accumulated total assets of some $100 billion. You will note that from 1967 to 1973, those same banks have reached assets of $75 billion. In hardly seven years, they have more than doubled the assets they had reached after their 100 first years.
Thus it can be suggested that a good part of that extraordinary increase was due to the removal of the ceiling on interest rates which grew from 6 and 7 per cent up to 13.5 and 14 per cent those last few days. Today, when we consider the national product, we find that it amounts to $190 billion and yet the federal government managed to show deficits. Indeed, as recently as last week, the Minister of Finance (Mr. Chretien) announced in the House of Commons that the estimated
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deficit would be roughly $8 billion. For this year, it is expected that it will go as high as $11 billion. Meanwhile, those who have the privilege to create credit, generally known as banks, were reporting net assets of $26 billion. Is that not cause for one to wonder? I think so.
If I may, I would like to quote from an article entitled "The Issues as I See Them," published in MacLean's of September 15, 1935. At that time, the Right Hon. William Lyon Mackenzie King said the following, and I quote from the article which was translated from English into French:
The Liberal Party thinks that credit is a public matter which does not concern bankers alone but which also affects directly the average citizen. The party is in favour of the immediate creation of a national central bank duly incorporated which would be responsible for rediscount and which would ensure the issuing of money according to public needs. A central bank is necessary on the one hand to determine the monetary reserve according to the national, social and industrial needs of the Canadian people, and on the other hand to deal with matters of international trade and exchange.
As a national central bank has been created by the present government since the disclosure of the Liberal policy on this subject, I think it is necessary to stress here that the Bank of Canada as it now is is a far cry from the institution viewed by the Liberal Party. As have stated several of our prominent economists, the Bank of Canada follows a fascist model. It is in fact a private company which has the power to control the volume of money in the country. I must repeat what I have already told Parliament when protesting over the fact that government was relinquishing to a private institution the control of the country and the nation's money. Once a nation parts with the control of its currency and credit, it matters not who makes the nation's laws. Usury, once in control, will wreck any nation. Until the control of the issue of currency and credit is restored to government and recognized as its most conspicuous and sacred responsibility, all talk of the sovereignty of parliament and democracy is idle and futile. One of the Liberal Party's main objective will be to return to the nation what it lost, and to establish a duly constituted national central bank.
Mr. Speaker, 44 years later, we are hanging from the cliff. The unemployment rate is at a record high. Our dollar is not worth what it used to, and is continuing to decline. Inflation is hitting us on all sides, and so on, and so forth.
I would like to quote from a newspaper article by Louis-Philippe Roy that appeared on August 17, 1939:
Here is an unsolved mystery: Where does money come from? Years go by and the depression continues. It was supposed to last three, five years at the most, but it has been with us for 10 years and real prosperity is nowhere in sight yet. Why does depression last so long? Why so much unrelenting unemployment? Why such famine in the midst of plenty? The present depression has a feature that is unique in history: millions of human beings live in misery while in many countries wealth is destroyed: milk is sent down the drain, coffee is burned, farmers are paid to reduce production. And in this country of ours, there is no lack of wealth, nor transportation to distribute it. We have an industrial work force that is rusting at idle and transport corridors often devoid of traffic.
If Providence has been generous to us, if goods are everywhere, if the soil waits but for man's work to yield its riches, the cause of this depression certainly is not the poverty of our Canadian land.
Is it that production is not well run? No. Manufacturers, just as farmers could produce more if their products were to move.
Ask mothers why there is nothing on their tables. Ask fathers why they are getting hungry. Ask children why they are getting skinny. Ask merchants why their business is not thriving. Ask professionals why they do so much work on credit. Everyone's answer will be: because there is no money!
No money! This is what people in government say to those asking for help, industrialists to those asking for work, consumers to businessmen asking for

February 28, 1978
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orders, businessmen to wholesalers. The same answer everyone gives everyone else!
No money? Billions and billions are spent on means of destruction. To prepare for the great kill there is all the money needed. War industries are working at capacity.
So there is money!
Would it be that its role is to prepare man's destruction? However it would seem that money was invented to provide for trade in produce and manufactured products, and also the sale of services.
If the world is suffering, it is not because for the most part trade is paralyzed? Then money is not fulfilling its normal function?
Who is to blame?
Certainly not the Lord. Neither is Nature, because money can exist independently from seasons and weather; it is immune to draught and grasshoppers. Its manufacture is limited to the availability of gold, they say, a big joke.
During the 1914-18 war there was little gold available and a great deal of money. The United States have piles of gold and yet 13 million unemployed cannot earn money. Never has Canada witnessed such a production of gold these years and look at the results. Must the government be blamed for it? I believe so because government, Mr. Speaker, seems to be powerless or paralyzed in the face of unemployment, inflation and all those who tell it what to do. Yet let us not forget that our governments are as poor as the individual; municipal governments, provincial governments, the federal government have only the money we pay them in taxes. They are the ones who borrow from banks, yes. The public administration which gives banks the power to make money has to ask the bank and pay large interests to obtain credit to administer the country and give the unemployed something to eat. Money, currency, credit, is that the same thing? To what principle are they subject in the manufacture of money, the issuance of currency, the distribution of credit? What do they demand in return and why? So many questions without answers in our school books. Yet the problem seems crucial at this time. Why that mystery about the origin of money? Is it not high time to put an end to that mystery? It is high time to scrutinize this problem of money which seems to be one of the causes of the present economic slump because it is true that current conditions of social economic life are such that a very considerable number of men are finding it most difficult to earn their bread.
So, Mr. Speaker, with your permission, I would like to try and help the population lift the veil of mystery over the origin of money. How does book money start? It starts, of course, when a credit is registered in a bank book without reducing anything elsewhere. Book money does not start when I deposit $10 at myh bank or my caisse populaire. It does not start because that account is opened by a reduction in my pocket money. It is a simple conversion of pocket money into book money. Book money does not start either when the car dealer sees his account increase by $2,000 after he sells a car. That increase of $2,000 in his account is the result of a decrease of $2,000 in mine. But book money is accumulated when a sum is deposited in an account without reducing another's account or emptying another's pockets.
Let me give you an example, Mr. Speaker, using, of course, a fictitious name. Mr. Jones, a manufacturer, wants to extend his factory. He does not have the money to pay for materials, labour and equipment. With $100,000, he could carry out his plans; later, with an increased production and sales, he could easily pay back the money. He then goes to his banker who agress to lend him the money, against the security given by

Mr. Jones. How is the loan worked out? The banker gives to Mr. Jones what is called a discount cheque worth $100,000. M. Jones goes to the cashier. As he is not interested in carrying such a sum, he simply deposits th cheque which is credited by the cashier to his account. All Mr. Jones has to do now is to make out cheques whenever he needs to pay for materials, labour or equipment.
When Mr. Toupin leaves the bank, he has a credit account of $100,000. No other account was debited, not one cent or one dollar has left one pocket or one drawer. Everyone has exactly the same amount on their account or on the books as before, but Mr. Toupin has $100,000 more. There are $100,000 more in the country in the account of Mr. Toupin. This is not an account from savings, from money that already existed and that was saved, this is a borrowing account from new money born from the decision of the banker, from a simple pen stroke and an entry in a credit account. This is where and how money comes into being: in a bank through a loan in the form of credit, but also in the form of a debt to be repaid with interest.
About one tenth of the cheques made by Mr. Toupin to pay his bills will be cashed in at the bank against coins or paper money; the other nine tenths will simply be deposited and will simply transfer the amount from the new credit of Mr. Toupin to the credit of other people. This is the result of present trade practices and the banker is well aware of it. He can easily loan against security ten times as much money as he has in reserve; he is the only one who can do this, no private moneylender has this magic wand. And the banker is authorized by his charter to do this. The Canadian legislation even allows him to loan up to 20 times the amount of his reserve. This is the money-making system established by the banks and legalized by our government.
I would add that the government itself when it needs more money than it can immediately levy through taxes also goes to the banks. It borrows in exactly the same manner as Mr. Toupin, but it gives as security the future taxes that it will collect from Canadian citizens. The government also promises to repay with interest and becomes a debtor of the bank to which it has delegated an absolute power, that of creating the currency of the country. The banker makes money, but we should note that he does not do so for himself, he does it for the borrower. Moreover, the banker is not giving this money away, he loans it, and this money is not put into circulation forever. The borrower must repay it within a certain time.
In the case of Mr. Toupin, what will happen of course is this: The banker will first withdraw from the account of Mr. Toupin the amount of the interest; if the loan is for one year at 7 per cent, the interest is $7,000. The banker will subtract $7,000 from the credit of Mr. Toupin and transfer it to the credit of the bank in the interest account. So, Mr. Toupin will have only $93,000 to his credit. When he starts paying his bills or his employees, using a cheque, progressively Mr. Toupin
February 28, 1978

will circulate those $93,000, but he must consider he has to pay his loan back within a year. Therefore Mr. Toupin is going to sell his products and make enough profit to earn $100,000 within a year to pay back the bank in one shot or every month according to the terms of the contract. Mr. Toupin invested $93,000 and extracted $100,000 from the public; that is the way he will generate that money.
As Mr. Toupin repays the bank, it will credit the discount which was charged when the $100,000 were generated. And when the $100,000 will be entirely paid back, the discount account will balance and that will be the end. Figure money, bookkeeping money will die at the same place where it was born. No new money will be created and put in circulation and in the same way, by creating the same debt, the consumer must pay that debt through the purchases he makes. As far as government is concerned, it is exactly the same thing except the taxpayer rather than the consumer has to foot the bill. However, until now the government does not pay back money but it defers maturity by issuing new bonds sometimes with a lower interest rate. That is why the national debt of all industrialized countries will never be settled but will increase instead as they have to borrow again for new projects. And that is why taxpayers must pay hundreds of millions every year to service national debts. As we can see, money is made by people with a stroke of the pen. Money is not eternal; it is destroyed by the same people who made it according to the terms of the birth certificate.


Sinclair McKnight Stevens: Mr. Speaker, on entering the debate on Bill C-16, which represents the second extension this government has asked this parliament to endorse in respect of the existing Bank Act in Canada, it is wise that we first take some cognizance of how the banking industry now stands in Canada, and how the near-banks, including the credit unions, trust companies, loan companies and finance companies, stand in relation to our chartered banks. Before we go further in considering whether this extension should be granted, I think it would be wise if we got a better perspective of why, on the last day of February, we are considering another extension to the Bank Act, which should have been extended as of June 30 last year.
I would suggest we have in this legislation before us tonight a very vivid example of the ineptness of this government over the past few years. There may be things that sneak up on this government or that surprise the government, and would perhaps surprise any government, but surely the one thing that any government in power in Canada could have anticipated was the revision of our Bank Act in 1977. It was a 10-year Bank Act, and on June 30 everybody knew that, unless it was further extended for another ten years, or extended as the government chose to do on March 31 of this year, the business of banks in this country would literally disintegrate. There would be no banks. Their constitution, which is the Bank Act,
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would no longer be in existence. Although the government was well aware of that fact, it chose not to take the necessary action to see to it that we did have a 10-year review of our banking situation and then a proper Bank Act introduced and passed in this House by the first deadline.
Having said that, I suggest we in this country missed a tremendous opportunity, an opportunity that may well have relieved some of the anxiety we now feel in respect of our crippled dollar. I suggest this because one of the things we have done well in this country is banking. We have healthy and strong banks which, unlike some of our industries, are able to be competitive with the largest banks in the world. I suggest there is a matter of reciprocity involved. We have been active in our banks. Our banks have been very successful in the United Kingdom, the United States and in other countries. They have brought back huge profits to this country as a result of their activities. As a matter of fact, at the present time our Canadian chartered banks have approximately $100 billion in domestic assets and $50 billion in foreign assets. In short, one-third of our total banking industry today is active around the world, doing what I would suggest we in Canada must try to get more industries doing; that is, making the world their oyster. In truth we are a tremendous international banking country, and that is a credit to us in Canada.
There is a certain feeling of reciprocity involved. If you choose to do business in another country-and I refer to banking activity-it is only natural that that country will expect to do some business in your country in return. There are many banks that are anxious to do business in Canada. They feel they can contribute in the sense of making Montreal, Vancouver or Toronto significant financial centres if given the right to participate in these markets.


Stanley Howard Knowles: What about Winnipeg?


Sinclair McKnight Stevens: This is known to the government and it has been known for years. In fact, the interest shown by these banks is such that it is estimated that in Canada there may be as many as 60 foreign banks carrying out some type of operation already, in the sense that they have agencies or representative offices here or, as some classify it, suitcase type operations. Some 60 foreign banks are active in Canada in the sense that they are waiting to get the nod to become active participants in our banking community if the Bank Act so permits.
Let me be more specific. In Toronto it is estimated there may be over 40 foreign banks presently maintaining offices, certainly as lookouts, listening posts or as training stations, as some describe them, but, in any case, indirectly carrying on active banking business. In the Commerce Court in Toronto there are 26 foreign banks which maintain offices of a banking nature. According to the Bank Act, it is an offence to use the title "bank" unless the bank is one of the scheduled banks to the act. I invite any hon. member to go through Commerce Court and see the number of banks which probably display

February 28, 1978
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their signs in that complex. Presumably there has been absolutely no criticism from Ottawa.
Let there be no doubt: I am saying that this is doubly wrong. If the Bank Act indicates that the title "bank" should not be used with respect to financial activities unless the bank is a chartered bank under that act, that is the law and it should be enforced. The government is wrong to allow this encroachment to take place with virtually no regulation.
On the other hand, it is totally wrong for the government not to realize this interest on the part of foreign banks. They give them lip service and encouragement through the white paper, which has been referred to in this debate, but they then let these banks sit in limbo. I know of at least 40 banks which opened offices over 2xh years ago in anticipation of this Bank Act being passed and putting them in a position of carrying on active banking activities. I am referring to banks such as the Deutsche Bank which has assets of $44 billion. It has an office in Toronto. It is awaiting an opportunity to do business. Perhaps it is indirectly doing some business at the present time. There is also the Dai-Ichi Kangyo Bank of Japan. It has $43 billion in assets. Also it is waiting to do business. There is the Banco do Brasil which has $39 billion in assets and is waiting. Also the Credit Lyonnais, the Fuji Bank, the Societe Generate, the Dresdner Bank, the Mitsubishi Bank, the Sanwa Bank, the Barclays Bank, the Bank of Tokyo and the Industrial Bank of Japan are waiting to do business. In the sense of maintaining offices, they are actively waiting to get into our banking system. They feel Canada can be made into an international banking community, yet they have not received the satisfaction of a proper regulation in the sense of having a Bank Act passed in Canada which will permit them to legalize their activities.
The reason I referred to that list is that it is interesting to note that every one of those banks has larger assets than our largest bank, the Royal Bank of Canada. The 50 largest banks listed in the Fortune list of the largest banks outside of the United States have total assets amounting to $1,287 billion. When one considers the potential which exists for Canada if those banks are encouraged to become participants in the Canadian banking community, and adds to that the participants from the United States, it is just great.


Alastair William Gillespie: What about the Western Bank?


Steve Eugene Paproski: The hon. minister should stop making noises.


The Acting Speaker (Mr. Turner):: Order. The hon. member for York-Simcoe has the floor.


Sinclair McKnight Stevens: I have not heard the hon. minister speak so loudly in the House for weeks.


Alastair William Gillespie: Perhaps you have not been in the House.


Sinclair McKnight Stevens: I wish the hon. minister would listen to what I am saying.


Alastair William Gillespie: Oh, oh!


Some hon. Members:: Order.


The Acting Speaker (Mr. Turner):: The hon. member for York-Simcoe has the floor for the purpose of making a speech. I suggest hon. members listen.


Alastair William Gillespie: How are the deposits in the Western Bank now?


Sinclair McKnight Stevens: I would have thought the Minister of Energy, Mines and Resources (Mr. Gillespie) would be tracking down a few of the payoffs which have occurred in the Crown corporations that he is responsible for.


Steve Eugene Paproski: That shameful minister!


Alastair William Gillespie: Oh, oh!


Sinclair McKnight Stevens: Perhaps the hon. member should do that, instead of talking about something he does not have one tittle of knowledge about.
There is an opportunity in Canada, if the Bank Act is revised to permit international banking activities in Canada under proper regulation. That opportunity should not be missed. It is most unfortunate the Minister of Finance, the hon. member for Rosedale (Mr. Macdonald) and the Hon. John Turner have systematically postponed the revision to the Bank Act. I will go through the sequence of how they did that tomorrow. It is unfortunate that on the eve of the first extension to the Bank Act there is a request for a further one-year extension from the end of March. That is the first point I should like to make.


Alastair William Gillespie: What is your second point?


Steve Eugene Paproski: I think the hon. minister should listen.


The Acting Speaker (Mr. Turner):: The hon. member for York-Simcoe has the floor.


Sinclair McKnight Stevens: I have patience for the minister. Obviously the stress and strain of his office on his weak mind is showing tonight.
International banks are interested in doing business in Canada. If we get on with revising the Bank Act properly, they can be regulated. I could be an asset to Canada. We must not forget that Canadian banks have been active in foreign countries of the world, and that is what this banking reciprocity is all about. One of the objectives in the revision of the Bank Act will be to ensure that the competitive position which has been built up by our banks around the world is maintained. Since Canadian banks are allowed to do business in some foreign countries, those countries should have some right to do business in Canada, thus maintaining our competitive position.
May I call it ten o'clock?
February 28, 1978



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, following the ruling by the Quebec Superior Court as to the constitutionality of some sections of Bill 101 concerning the language used in legislation and the administration of justice, I asked the Prime Minister (Mr. Trudeau) if he intended to make further representations to all provincial premiers urging them to formally support the linguistic rights of minorities. Obviously, Mr. Speaker, I refer to the linguistic rights of the French minorities outside the province of Quebec and the English minority in Quebec.
In fact, all governments should make every effort to guarantee to all Canadians, wherever they live in Canada, the right to be served in the official language of their choice in the fields of justice, legislation, administration and education.
In his reply, the Prime Minister told me that in September, he had asked all premiers not only to protect the rights of minorities in the education system, but also to include this protection in the Constitution by means of a constitutional amendment. Since my question did not refer only to linguistic rights in education, I take this opportunity to clearly state my views on this issue of great current interest, namely the basic human rights in a new Canada based on respect and tolerance and built on equality, justice and understanding. The only way for the federal government and the provinces to ensure that basic justice will be to agree on an amendment formula safeguarding linguistic rights.
Mr. Speaker, I am very disappointed with the compromise that came out of the premiers' conference held in Montreal last week. After having asserted the right of every child of the English or French minority to be educated in his language, they managed to restrict this right under a second principle which leaves it to the discretion of the provinces to grant that right or not.
I would like to quote these two principles from Le Devoir of February 24, 1978. The first one says:
All children belonging to the French-speaking or English-speaking minority in every province have the right to be educated in their language in elementary and secondary schools where the number of students warrants the establishment of such schools.
The second principle is as follows:
It is agreed, in view of the exclusive jurisdiction of provincial governments over education and of the important cultural and demographic differences, that
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each province is free to decide how the provisions preceding paragraph shall be applied.
The provinces, Mr. Speaker, have surrendered before the challenge of language equality in the educational field across Canada. I think they have rejected the only valuable guarantee, the constitutional amendment formula ensuring for ever these rights in the field of education.
After the St. Andrews conference which was held last year and where the bargaining between the provinces embarrassed them, the Montreal conference has now put them to sleep for ever. The agreements of reciprocity proposed by Mr. Levesque were in fact quite embarrassing after 110 years of inequality in the field of educational rights in all the other provinces of Canada.
Last week we heard the provincial premiers say that for some time yet things will remain more or less like they are now. I said for some time, Mr. Speaker, for I feel that very shortly those premiers will have to make up their mind about the Canadian reality. They will have to understand that the English-speaking minority in Quebec and the French-speaking minority outside Quebec must not be treated like pawns in interprovincial bargainings, but that most Canadians are ever more anxious to see that every Canadian citizen be given the consitutional right to receive his education in the official language of his choice.
The federal government has given its support and will certainly continue to support all great efforts in the field of education in all provinces. I am glad to see that the Secretary of State (Mr. Roberts) is here tonight. I know he has undertaken negotiations to reach agreements with regard to the continuation of programs carried on by his ministry to support the education of official language minority groups and the teaching of the second language. I also know the great needs of groups and the need for additional funds for education. On the other hand, I am convinced that the provinces should be publicly answerable for the way they spend those funds.
In view of the two statements that 1 have read, Mr. Speaker, from the Montreal conference, I think it is urgent for the government to review entirely its financial contribution to the program relating to the minority language in every provincial jurisdiction. The federal government has no other choice. It must fill the abyss of iniquity the premiers have left open. I also feel it is imperative to change the rules of the game so that from now on the federal government can obtain tangible results for every single dollar invested for the teaching of minority school rights.


John (Moody) Roberts: Mr. Speaker, the hon. member has indeed raised an important issue and I think he is right in emphasizing the importance of the issue of

February 28, 1978
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educational rights. Just like him, I was rather disappointed by the statements made by the premiers last week, because, Mr. Speaker, as he himself indicated, the premiers declaration can be interpreted as an acceptance of the principle of education in the two official languages without any commitment to its implementation. This second principle can be interpreted-and I believe that is the Quebec premier's interpretation-as a supporting bill 101 in the province of Quebec, which, I am sure, is not all in keeping with the views of the premiers of the other provinces.
So just like the hon. member, I am somewhat puzzled by the interpretation which should be given to that statement, and I think like him, that it demonstrates the importance of writing the linguistic rights to education in the official languages into the Constitution, which happen to be the aim of this government. Last September, the Prime Minister (Mr. Trudeau) raised that issue with the premiers and I myself did likewise last November, in discussions I had with the ministers of education. I again raised it also in connection with the charter of linguistic rights of minorities. Just before Christmas, we stressed the importance given at the federal level to the idea that the provinces will agree to exceptions to these very important rights.
As the hon. member already pointed out, there are federal agreements with the provinces for the financial support of second language education and also, what is very important, the education of the minority groups. Since I became Secretary of State, I have been concerned with the implementation of these agreements, because the objectives as well as the criteria are not clearly specified, which makes for an inadequate assessment and accountability of these programs.
I believe that the hon. member has often emphasized, and other members as well, the importance of earmarking during the negotiations the funds to be transferred to the provinces under a formula designed to meet the objectives established in the programs. That is why in the course of my negotiations with the provinces, I hope that we will succeed in specifying certain points especially with regard to the minority language. The hon. member has described a formula, a program, a means to ensure that the moneys used to attain these objectives will actually be used for that purpose. It is not only a mere transfer in principle, a theory calling for the funds to be used for the implementation of just about any objective. The fundamental objectives of these programs means that some kind of support of the minority language education must really be achieved.
These are the negotiations under way. I hope to meet again with the Council of Ministers of Education of Canada in the near future. We will have to negotiate in the hope of reaching before March 1979 a new agreement to last for a period of five years.


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. minister that his allotted time has expired.


POWER-NEWFOUNDLAND-FEDERAL ASSISTANCE IN POWER PROJECTS
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, on February 21 I asked the Minister of Energy, Mines and Resources (Mr. Gillespie) a question about the Gull Island project. On February 13 to 15 the first ministers of Canada had their great conference. The conference of the "Great Poohbahs" was held in Ottawa. The first ministers' caper was performed before the Canadian public on television. At that conference two specific things in the energy field were promised to the people of Canada. One was that the Gull Island project in Labrador would go ahead; the other was a project in Saskatchewan. The communique from the conference was a laugh: it listed another 12 projects that were to be considered for action soon.
That announcement aroused expectations that at last the federal government was moving on a project that had been put before them first in March, 1974. When we got a chance to look at the release issued by the Minister of Energy, Mines and Resources and the premier of Newfoundland, we found that the Gull Island project was not going into full gear immediately but that a corporation was to be set up by the province and the federal government. Further studies were to be done to see whether that or any other project of Labrador, hydro might be economically and technically justifiable.
What nonsense, Mr. Speaker! These studies were done three years ago and the proposal has been before the federal government for two years and five months. The great action to come out of this conference was "further studies". One of the main features of the conference was the Minister of Energy, Mines and Resources performing the greatest bubble act since the south sea bubble of the eighteenth century. Rumours swept the country that he was going to create one million jobs in energy projects. He went on television with his list of some 40 projects to create a million jobs which would put the one million unemployed to work immediately.
One of those projects was the Kitimat oil port and pipeline which was kiboshed several days ago. That shows the transparent dishonesty of that exercise. Another was the Gull Island hydro development and transmission line. The gullible are no longer going to gulp Gillespie. They did not believe this, and it was a lucky thing they did not because there was not an ounce of truth in the whole performance. The Gull Island project is not going ahead, nor are the other 40 projects that were listed. Indeed, some were already started. It was a shocking, transparent attempt to convince people that the government were doing something in the areas of employment and energy, when actually they were not.
The Gull Island project was first proposed to the government in March, 1974. It was a $2.3 billion project to develop 1800 megawatts of hydro power resources on the Lower Churchill River, with a transmission line to the Strait of Belle Isle and a tunnel under the straits to Newfoundland. Newfoundland has no further sources of major hydro power on the


island and is now at the mercy of oil-fired, steam-generated electricity which is very expensive. This project would save importing oil to Newfoundland to be converted to power. It is in the national interest as well as in the provincial interest.
There would be a surplus of power from that development which Newfoundland could not use for ten or fifteen years, which potentially could be sold to Quebec or some other purchaser if Quebec would allow it to be transmitted across the province to customers in the maritimes. The federal government's offer of assistance was much too small. They offered to lend one half of the cost of the transmission line to the project and would allow interest to be capitalized during construction and some other things that would total $343 million out of this $2.3 billion project.
In addition to the paucity of assistance offered by the federal government, the government of Quebec would not agree to buy the surplus power from Newfoundland at a reasonable price, nor allow Newfoundland to transmit it across their territory to other customers. They said, "Sell to us at the price we say, or do not sell at all." And this great Canadian government did nothing about it. They did not offer to use their powers under the BNA Act, section 92(10), to declare a transmission line across Quebec to be a work for the general advantage of Canada. If they had, Quebec could no longer blackmail Newfoundland and prevent the Gull Island project. But the government said that they would not interfere.
But now, with an election coming, on February 15, during a television program, they pretended the Gull Island program is now going ahead. When we look beneath the surface we Find nothing but weasel words about further studies, that the federal government is taking equity in a company, and so on. This was the most dishonest television program ever seen in the history of television. The Minister of Energy, Mines and Resources should have been given an enema award instead of an Emmy award.
On February 20 the Secretary of State for External Affairs (Mr. Jamieson), in an interview he gave to the Evening Telegram, stated it was a question of how much money can be generated out of the power in Labrador in order to develop power on the island in a less expensive way if possible. In other words, what the minister is suggesting is perhaps they will not divert to Newfoundland any hydro energy generated in Labrador. We will not do that if Labrador power can be sold outside Labrador, and then use the profits to subsidize power on the island of Newfoundland. That is the suggestion made by the Secretary of State for External Affairs.
He went on to say that there is now a re-examination under way of whether or not there has to be a tunnel at all to carry the power from Labrador under the Strait of Belle Isle to Newfoundland. He went on to say he does not think financing will be a problem. Once it is determined where the markets are, where the power is going, "then the Financing will flow", he said. What is going to flow from now until the election is
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over is the Secretary of State for External Affairs: he will flow. The financing.


The Acting Speaker (Mr. Turner):: Order. I regret to inform the hon. member that his allotted time has expired.


Alastair William Gillespie: Mr. Speaker, it is always a treat for us on this side to listen to the empty polemics of the hon. member for St. John's West (Mr. Crosbie). He has developed a well earned reputation as perhaps one of the noisiest, one of the most boisterous and at times one of the more innovative speakers in this House. He is not a man who has developed a reputation for accuracy, but that is not something that disturbs him. He is interested in projecting a sense of aggressiveness. Indeed, whenever it comes to the question of advancing energy projects, we on this side of the House think that he is far more interested in projecting his own advance, not advancing energy projects in his own province. That has been clear from the beginning.
I remember when he was a minister in the government of Newfoundland, a government which he is now criticizing and which he left because he felt he could advance himself more propitiously in the federal House. I remember that he and his government at that time could not make up their minds whether they wanted to go ahead with the Gull Island project. They had not been successful in getting the province of Quebec to agree to terms they had put forward. When we talked to them about the Gull Island project, an important national asset which we wanted to see advanced, they said "We are not quite ready because we cannot make up our minds whether to go ahead with this now or wait until there has been a settlement in the courts with Quebec".
It is interesting that the premier of Newfoundland has now reached agreement with us on the establishment of a corporation. Now that the premier has lost the counsel, advice and temerity, but not the noise, of the hon. member, he has said yes, he would like to form a corporation with us; he would like the federal government as equity partners. The federal government has said it would like to go ahead on that basis and that a corporation would be the logical first step in moving this massive project forward. The federal government has said that the corporation should be the agent for marketing that power, for assessing the financing of that project and working out plans for constructing and managing it. The hon. member is mostly noise, but those of us on this side of the House have become used to it.


UNEMPLOYMENT INSURANCE-CANADIAN RAILROAD WORKERS EMPLOYED BY UNITED STATES RAILROADS- ENTITLEMENT TO BENEFITS
Robert Hylton Brisco: Mr. Speaker, on February 13 I asked a question of the minister responsible for unemployment insurance regarding the circumstances of Canadian railroad workers employed by United States railroads who work in Canada. The minister at that time was

February 28, 1978
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unable to respond to my question. I certainly accept the fact that every minister cannot have every answer at the tip of his tongue. However, he then provided me with a follow-up letter which gives me cause for further concern.
It should be noted at the outset that this matter was brought to my attention by a railroad worker in my constituency and only affects seven railroad workers within Kootenay West. They work for the Burlington Northern Railway. These are Canadians working in Canada but subject to U.S. benefits only. If you examine the system across Canada as I have, Mr. Speaker you find there are some 12 U.S. railroads operating in Canada employing some 1,000 Canadian workers.
In responding to the concern that I have regarding the fact that these employees receive U.S. unemployment insurance benefits and not Canadian benefits, and that there are some serious questions that have to be asked about their pension benefits, the minister stated, to quote from his letter:
The United States Railroad Unemployment Insurance Act predates Canadian unemployment insurance legislation. It was designed specifically to take into account the peculiarities of employment by U.S. railroads. For example, benefits may be paid to workers while legally on strike. Also, the R.R. U.I. Act paid benefits in the event of sickness before sickness benefit was allowed under Canadian U.I.
I accept that Mr. Speaker, but that is in the past. In fact, it is some time in the past and fails to deal with the present. It is the present that I and the railroad workers are concerned about. It is all very well to refer back to 1971 and some Canada-U.S. agreement, but this is 1978, some seven years later, with some very substantial changes in our social system, unemployment insurance benefits and pension plan.
The minister went on to say that the benefit rate under railroad unemployment insurance is 60 per cent of wages up to a maximum of $125 per week, and that this is less than the present maximum of $160 per week under Canadian unemployment insurance benefits. I heartily agree.
He then draws in a red herring dealing with the period of time American workers are covered for sickness benefits compared to Canadian workers. Our period of 16 weeks is realistic. The United States seems to believe that 26 weeks is realistic. That is beside the point. The fact remains that the benefits are totally different in the United States. They receive 60 per cent of wages up to a maximum of $125 per week, whereas we receive $160 per week under Canadian unemployment insurance benefits. The minister went on to say:
To bring the railway workers now covered by U.S. R.R. U.I. into the Canadian U.I. program could adversely affect those workers. Where, for example, they work partly in the U.S.A. and partly in Canada, only their earnings from employment in Canada could be taken into account in determining the benefit rate. This could have a a depressing effect on the benefit rate.
That is another red herring. I am sure the minister has absolutely no knowledge of how many railroad workers work for American companies in Canada. I am sure he has absolutely no knowledge of how many work on both sides of the U.S. border. I can say there are very few. Therefore, that particular argument carries no weight whatsoever. Finally, the minister says:

Finally, it might be pointed out that for the above mentioned reasons the United States R.R. U.I. Act was specifically excepted from the U.S.-Canada reciprocal agreement on unemployment insurance.
That was in 1971 and bears no relationship to the situation today.
I should like to make a quick comparison of the pay benefits. Under the CN system the termination benefits are as follows. Up to one year, the contribution is refunded. From zero to 15 years the contribution is refunded with interest. The CP system provides that from zero to five years the contribution is refunded, and from five to 15 years, it is refunded with interest.
In the United States, if an employee has put in ten years he can obtain those benefits; but in the case of a Canadian worker employed for less than ten years those benefits go back to the estate of the railroad worker. Mr. Speaker, there are a lot of railway workers in Canada today who have no idea the pension benefits will accrue to their estates. In effect, they are being denied those benefits.
I object to the present system and I intend to do everything I can to bring about a change through a private member's bill so that Canadian workers receive the Canadian benefits due to them, rather than the lesser U.S. benefits.


Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, I have the pleasure of making a reply this evening on behalf of the Minister of Employment and Immigration (Mr. Cullen). It appears to me the minister has already conveyed to the hon, member a great deal of the information which is on hand.
First, it is important that I put the issue into its proper perspective. The United States railroad unemployment insurance act covers only those employees who work for U.S. railroads. It was created as a U.S. federal act, as opposed to individual state unemployment insurance legislation, in order to ensure that employees working for railroads in the U.S. had adequate coverage even though they work in several states or Canada throughout the course of a year.
Canada has a reciprocal agreement with 50 of the states and several U.S. territories in order to ensure satisfactory administration of payment of unemployment insurance benefits from respective programs and to guard against duplication of coverage. This reciprocal agreement explicitly excludes those covered under the U.S. railroad unemployment insurance act for that reason. Also, Mr. Speaker, the R.R. U.I. act paid benefits in the event of sickness before sickness benefit was allowed under the Canadian Unemployment Insurance Act. The benefit rate under R.R. U.I. is 60 per cent of wages up to a maximum of $125 per week, but these payments are not taxable under U.S. law. This may be slightly less than the present maximum of the taxable $160 per week under Canadian Unemployment Insurance, depending on the income tax position of the recipient. However, benefit duration both for sickness and shortage of work is 26 weeks, with the possibility of a further 26 weeks of extended benefit under U.S. law. It is
February 28, 1978

noteworthy that Canadian unemployment insurance benefit for sickness is limited to 15 weeks. I think that is an important point.
To bring railway workers now covered by U.S. R.R. U.I. into the Canadian program could adversely affect those workers. Where, for example, they work partly in the U.S.A. and partly in Canada, only their earnings from employment in Canada could be taken into account in determining the benefit rate and duration. This could have a depressing effect on the benefit rate and might in some cases result in individuals failing to qualify for benefits under either U.S. railroad or Canadian law.
For the foregoing reasons, Mr. Speaker, I do not believe we should undertake to change the existing reciprocal arrangements. The potential good that might result for a few individu-
Adjournment Debate
als would be far outweighed by the harm that would be caused to the majority who work for U.S. railroads in Canada.
Finally, I can assure the hon. member that I will be glad to see that his additional points are drawn to the attention of the minister. Coming from a border constituency, as I do, I have a large number of railway workers in my riding who work on Canadian engines and trains travelling in the United States as well as a great many who work for United States railroads coming into Canada. 1 am quite prepared, as I say, to draw his additional comments to the minister's attention.


The Acting Speaker (Mr. Turner):: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10.31 p.m.

Wednesday, March 1, 1978