1978-04-13

ROUTINE PROCEEDINGS


Mr. Roch La Salle (Joliette):: Mr. Speaker, under the provisions of Standing Order 43, I request the unanimous consent of the House to present a motion on a very important matter.
In view of the fact that the sales tax proposal in the recent federal budget is aimed at fostering an economic recovery in Canada and the creation of jobs for over a million unemployed; that the proposal made by the Quebec government to the federal government takes into account those two objectives without additional expense; and finally, that it is in the best interest of the federal government to improve the fate of the 340,000 unemployed in Quebec and in such vital sectors as textiles, footwear and furniture, I move, seconded by the hon. member for Brome-Missisquoi (Mr. Grafftey):
That the Minister of Finance be required to reply as soon as possible to Quebec's proposal.


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 unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FAILURE TO CURE ECONOMIC ILLS-MOTION UNDER S.O. 43
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise on a matter of urgent and pressing necessity, pursuant to Standing Order 43. On Tuesday there were 1.5 million Canadians unemployed; on Wednesday there was an inflation rate of almost 9 per cent; today we have a Canadian dollar trading at a depression level of 86.88. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the Minister of Finance seriously consider the proposition that perhaps he is doing something wrong.


Some hon. Members:: Oh, oh!


INCOME TAX
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I rise under the provisions of Standing Order 43 to ask for the unanimous consent of the House to discuss a matter of urgent and pressing necessity.
In view of the fact that a study conducted by the Economic Council of Canada has shown that the situation of low income Canadians is worsening by the day; that these same workers are taxed at the highest level and are the least protected; that the inflation rate continues to escalate at an uncontrollable rate and that these workers and their incomes are the most affected by it; and that the personal basic exemption for a Canadian resident is now limited to $2,270, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the House urge the Minister of Finance to take the necessary measures so as to increase to $5,000 the personal basic exemption of Canadian residents.


Mr. Speaker:: Order, please. The House has heard the terms of the hon. member's motion. Pursuant to Standing Order 43, presentation of such a motion requires unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ADMINISTRATION OF JUSTICE
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the Liberal government's vendetta against Peter Worthington, editor of the Toronto Sun, thus making him the Donald Woods of Canada and underscoring this government's commitment to

April 13, 1978
freedom of the press only if the press does not expose its failures, I move, seconded by the hon. member for Okanagan-Kootenay (Mr. Johnston):
That the Minister of Justice be instructed to withdraw all charges against Peter Worthington and the Toronto Sun as its demonstration and commitment to an open and free press.


Mr. Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


YOUNG CANADA WORKS
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, under the provisions of Standing Order 43, I move, seconded by the hon. member for New Westminster (Mr. Leggatt):
That the cabinet restore the funds of at least $17 million to the Young Canada Works program to prevent serious discrimination against students from low income areas of this country, and thus fulfil the Prime Minister's promise to work for equality of opportunity.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In light of the fact that the Minister of Indian Affairs and Northern Development (Mr. Faulkner) has refused to meet with the National Indian Brotherhood to discuss measures of his department to relieve the dependency situation on some reserves, and in light of the fact that the minister's budget for Saskatchewan is now several million dollars over budget, I move, seconded by the hon. member for Lambton-Kent (Mr. Holmes):
That the minister of Indian affairs immediately call his department's estimates before the standing committee, a condition which he has failed to live up to at this time, and provide the committee with the opportunity to scrutinize the estimates, which they so richly deserve.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE BUDGET
Mr. Leonard C. Jones (Moncton):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Whereas the present Minister of Finance (Mr. Chretien) announced on October 20, 1977, in his so-called economic and fiscal statement an income tax reduction for certain taxpayers for the year 1978, and whereas the said tax reduction as stated in a letter dated March 28, 1978, was allegedly to be done "to provide a quick stimulus to the economy", and whereas the said tax reduction was only for the period of January and February, 1978, causing a great deal of additional problems for employers and employees, and whereas the present Minister of Finance in his budget of April 10, 1978, announced a reduction or cut in provincial sales taxes, where applicable, for a period of six months, alleging that it would "provide fresh stimulus for industrial growth", and whereas the number of unemployed persons in Canada continues to rise and is now far in excess of the one million mark, and whereas there is still a desperate need to remedy the unemployment situation forthwith and at the same time give greater incentive to Canadian industry by encouraging production and the purchase of Canadian goods, I would move, seconded by the hon. member for Palliser (Mr. Schumacher):
That the House of Commons urge the Minister of Finance and his colleagues to amend the budget proposals now before the House to include the following:
(1)	A reduction in personal income taxes for the entire year 1978 similar to that granted for January and February 1978, and;
(2)	Elimination or substantial reduction of federal sales taxes on all Canadian made and/or produced and/or processed goods to help provide both incentive to industry and to provide needed employment for Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

April 13, 1978



ORAL QUESTION PERIOD


Roch La Salle: Mr. Speaker, my question is directed to the Minister of Finance. Given the fact that the minister surely has taken into account the proposition made by the government Monday evening in the budget relating to a cut in provincial taxes and the fact that he must have studied the proposal made by the government of Quebec, and given the fact that that proposal provides for a cut in the sales taxes on certain items, could the minister tell the House whether he intends to give Quebec an answer today and what that answer will be?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I had the opportunity to talk with Mr. Parizeau a few minutes ago and I told him that his counter-proposal was not acceptable in the present circumstances, that during the coming six months we would be willing to pay two cents on each item on which he intends to cut the sales tax. If he decides to cut taxes on other items of the Quebec economy, the money is always available.


Roch La Salle: Mr. Speaker, is the minister in a position to tell us whether, before bringing down the budget, he had had negotiations or discussions with the provinces with regard to the intentions of the government? If so, did he make any specific proposals and how much time did he give the provinces to accept or turn down the proposal dealing with the budget?


Joseph Jacques Jean Chrétien: Mr. Speaker, I had occasion to visit most finance ministers and spoke to the other ones over the telephone over the three-week period prior to bringing down the budget. We discussed that proposal and changed it to meet some of the requirements of the provinces. At no time in those three weeks did the Quebec government even allude to the proposal they put forward yesterday.


Roch La Salle: Mr. Speaker, I am speaking to a minister who has a good knowledge of the province of Quebec and its current rate of unemployment. On behalf of 340,000 unemployed, I would like to know if he is prepared to reconsider the answer he gave today to the Quebec government and, considering the number of members from that province in the House, to give a positive answer to a proposal which would solve the present problems of Quebecers.


Joseph Jacques Jean Chrétien: Mr. Speaker, for the hon. member who represents, I understand, the city of L'Assomption where refrigerators are manufactured, there are obvious distinctions
Oral Questions
made about those producers. Victoriaville is home to manufacturers of rowboats, pleasure boats and other similar products. I say that I am happy to contribute to the program of the Quebec government by paying 2 per cent for six months. If they want to use their own means to assist some sectors of the economy, fair enough. For the rest of the economy, the offer we have made and which has been accepted by the other provinces is still open to Quebec and they can reconsider their proposal and proceed with reductions in the sales tax for a period of six to nine months as was proposed to the other provinces.


SALES TAX-INQUIRY WHETHER GOVERNMENT READY TO DISCUSS QUEBEC'S PROPOSAL
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, I hope we will be able to run our federal policy not in a spirit of confrontation with the province of Quebec but in a spirit of flexibility.
In view of the lay-offs in the textile, clothing, footwear and furniture industries in the province of Quebec and, as the hon. member for Joliette has pointed out a few moments ago, the high level of unemployment in Quebec, and in view of the fact that in his speech Monday night the Minister of Finance stated many times that his policy was a striking example of federal-provincial co-operation, is the federal government prepared not to forget the present real economic needs of the province of Quebec and of our fellow citizens, those of the textile, clothing, footwear and furniture industries, and to discuss seriously with the Quebec minister the proposals made yesterday?


Joseph Jacques Jean Chrétien: Mr. Speaker, I discussed the proposals very seriously during a three-week period with the provincial governments. Mr. Parizeau made no proposal to me along the lines of those he made yesterday, all the more as the sales tax cut applies to all other small businesses in Quebec, not only to those in that special area. Furthermore, the sales tax cut in the rest of Canada is going to help the Canadian people outside the province of Quebec to buy textile, footwear and furniture manufactured in Quebec. I think it is an extremely important item. Well, Mr. Speaker, we made some offers in good faith to the provincial governments. All the other governments had counterproposals to make; I even made adjustments to meet the particular situation in British Columbia and Saskatchewan, and at that time Mr. Parizeau did not mention any counterproposal. He listened kindly, politely, and he only made this proposal yesterday, after the other provinces had made their decision. What I said, and I say it again, is that we are prepared to pay for each of the items exempted under Mr. Parizeau's plan, namely 2 per cent for six months, and if he decides in future weeks or months to cut the sales tax on the other products to assist the other sectors of the Quebec economy which are also very

April 13, 1978
Oral Questions
important, we shall be prepared to pay them the amount as promised.


William Heward Grafftey: Mr. Speaker, 1 wish to ask a supplementary question.
I fully agree with the Minister of Finance that we must take into account the whole secondary industry in the province of Quebec, but in view of the fact that in that province the textile, furniture, footwear and clothing industries hold the highest percentage of lay-offs, could the minister tell the House if he is really prepared to examine more seriously Quebec's proposals in that light.


Joseph Jacques Jean Chrétien: Mr. Speaker, it is up to the provincial government, within the limits of their fiscal capacity, to help clothing and footwear industries in addition to the support I personally offered. It is up to them to decide, within their jurisdiction. They took that decision, and so much the better if they accommodated those industries with their own financial resources. On my part, I maintain my offer. My proposals involve tremendous support to the footwear, textile and clothing industries since they will prompt other Canadians to buy those products manufactured in Quebec; moreover, I think that if the Quebec government wants to help the other sectors, the money will remain available.


VALUE OF CANADIAN DOLLAR-PEGGING WHEN U.S. DOLLAR STABILIZES
Stuart Malcolm Leggatt: Mr. Speaker, my question is directed to the Prime Minister. The Minister of State for Fitness and Amateur Sport was quoted on April 5 of this year as saying:
The federal government will move to fix the value of the Canadian dollar on the international money market once the U.S. dollar stabilizes.
Can the Prime Minister advise the House if that reflects government policy?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I will take notice of the quotation and verify its accuracy.


INTEREST CHARGES ON FOREIGN BORROWINGS
Stuart Malcolm Leggatt: I have a supplementary question for the Minister of Finance. Can he now confirm that it is costing the Canadian taxpayer approximately $750,000 a day in interest charges, or an annual cost of $275 million and, if so, would he not agree it would be better that we use this kind of money to put Canadians to work and stimulate the domestic economy, rather than tossing it away on foreign speculators?


Joseph Jacques Jean Chrétien: The hon. member should check his figures again, because the figures he

uses are completely false. We are not spending that much money.


An hon. Member:: How much?


Joseph Jacques Jean Chrétien: I can give you the figures. It is a very complex formula.


Some hon. Members:: Oh oh!


Joseph Jacques Jean Chrétien: Tomorrow I will give hon. members the exact amount of money involved. I will look into that. The figure mentioned by the hon. member does not represent the cost, and I have checked it very carefully. The figure used by the leader of the hon. member's party is unbelievably out of range. I will be delighted to make a comparison tomorrow. It would be better for the leader of that party, who claims to be an economist, to use a little calculator.


Stuart Malcolm Leggatt: I am sure the minister can agree that it is in the hundreds of millions of dollars, or at least a very substantial figure.


Joseph Jacques Jean Chrétien: No.


Stuart Malcolm Leggatt: When the Minister of Finance was looking after the foreign investment review legislation, we started a welcome-wagon process in Canada. In terms of the current balance of payments situation, our merchandise trade surplus is $2.9 billion; we are running a surplus on merchandise trade. But when you get to the service account and to what we are paying in interest and dividends to foreign ownership in Canada, that is when we find ourselves in a deficit position.
My question to the minister is this: Can we now expect some meaningful foreign investment legislation so that we can stop paying our absentee landlords these massive amounts and driving down the Canadian dollar?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am surprised an hon. member of a party that is always claiming there are not enough jobs being created in Canada would want to take measures to restrict the inflow of capital into Canada which would create jobs.


SALES TAX-EFFECT OF REDUCTION ON QUEBEC MUNICIPALITIES
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is of course for the Minister of Finance. It is unfortunate that such a controversy would create even more division to reduce the harmony that should exist in Canada. In any event, I would like to ask the Minister of Finance if he considered, when he made his budget speech and as concerns the retail sales tax reduction that he suggested to stimulate the Canadian economy, what impact this policy will have on the income
April 13, 1978

of Quebec municipalities which get a very large part of their income from the reimbursement of the provincial sales tax?


Joseph Jacques Jean Chrétien: Mr. Speaker, this is a point that Mr. Parizeau raised in his statement yesterday during his press conference. He said in effect that the sales tax proposals would in no way affect the income of municipalities and that the provincial government would make the necessary adjustments.


Joseph Adrien Henri Lambert: Mr. Speaker, since the proposal of the Quebec finance minister will result in the complete removal of the provincial retail sales tax on the products of the textile, furniture and footwear industries and since this will apply over a period of 12 months instead of six months as announced by the Minister of Finance, can the minister tell the House if this delay, or this margin of six months was discussed with the Quebec finance minister and if this will result in a difference of compensation to be paid to the province of Quebec as provided in the budget speech?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have amended our proposal to the provinces and this has allowed British Columbia, for instance, to apply a tax of 2 per cent instead of 3 per cent over a longer period, up to at least nine months. Our proposal was given some flexibility, as Mr. Parizeau was well aware.


Joseph Adrien Henri Lambert: A supplementary Mr. Speaker. Since this is boiling down to a revenue battle between the federal government and the provinces, would the Minister of Finance consider reviewing having a fresh look at the possibility of subsidizing those tax reductions amounting to a discount for consumers which, as announced in the budget, is going to be paid from the taxpayers' money? Would the minister be prepared to study in depth the possibility of creating extra credit through the Bank of Canada, increasing the money supply since the minister's aim is to increase the consumers' purchasing power? I think this should be considered. Is the minister prepared to have this financial proposition studied by his officials to accommodate both the Canadian government and the provinces?


Joseph Jacques Jean Chrétien: Mr. Speaker, as soon as I entered politics in 1963 it was my pleasure to go into social credit theories, and I am now more convinced than ever that I was right to oppose them at this time. Therefore in 1978 I am still against them.


GOVERNMENT PLANS RESPECTING FOREIGN BORROWINGS
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is directed to the Minister of Finance. We witnessed the dollar falling even further today, to 86.79 cents, having lost $30 million this morning in trying to defend the floating dollar. So far this month, $300 million has gone out.
Oral Questions
Would the minister try to give some stabilization to the market by indicating to the House what the government plans to borrow in the foreign markets? How much of their $11.5 billion total financial requirements will be raised in foreign markets?


Joseph Jacques Jean Chrétien: Mr. Speaker, I stated the policy of the government in my budget statement on monetary policies, and I have nothing to add to it. Of course, when the time comes for the financing of cash requirements, the market will be informed of the form of borrwing we will be adopting at that time, and where.


Sinclair McKnight Stevens: A supplementary question, Mr. Speaker. Whether the Minister of Finance likes it or not, there is growing anxiety in the inernational market about this monetary policy which the minister says is so clear. In particular, last year it caused the Bank of Canada to buy 23 per cent of their total financial requirements at the federal level.
Would the minister indicate if they plan to cause the Bank of Canada to buy debt of the federal treasury to that extent this year and, if they do, does he not feel that will demoralize the international money market still further?


Joseph Jacques Jean Chrétien: Mr. Speaker, the monetary policies are executed by the governor of the Bank of Canada, and when we decide to act we will make it public at that time.


Sinclair McKnight Stevens: Mr. Speaker, my final supplementary question to the Minister of Finance is based upon a report put out by Friedberg and Company Limited this month, in which they assess the monetary policy the minister appears to be so proud of and indicate that if the government persists in their approach, it will result in a 25 per cent devaluation in Canada, to be taken out with a falling dollar or inflation, or both.
In consequence of that type of a devaluation, would the minister not reconsider the statement he made to the House and indicate that he will at least take the matter up with the governor of the Bank of Canada with a view to having a saner monetary policy in this country.


Joseph Jacques Jean Chrétien: Mr. Speaker, I should like the hon. member to tell the House and the country if he is for pegging the Canadian dollar at a certain level, and where. I am not about to speculate on that in the way the hon. member does.


An hon. Member:: Ask Jack Horner.


Joseph Jacques Jean Chrétien: I am not about to speculate on those matters. The policy is well known, and the Canadian dollar is a floating dollar.


Mr. Hees:: What does "Loose Lips" say?

April 13, 1978
Oral Questions CAPITAL PUNISHMENT


REQUEST FOR REFERENDUM
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I wish to address a question to the Minister of Justice. 1 feel it should be directed to him and not to the Prime Minister because of the somersault with the truth the Prime Minister took in connection with capital punishment.
Having regard to the fact that it is estimated authoritatively that 75 per cent of Canadians, having regard to the tremendous increase in mortal crime and the number of police officers being shot down in cold blood, want the return of capital punishment, would the government, refusing to do anything to meet this problem, bring about a referendum on the question of capital punishment so that Canadians can speak and let the Government of Canada today and after a change of government in the election know what Canadians demand?


Some hon. Members:: Shame.


An hon. Member:: No.


John George Diefenbaker: Mr. Speaker, there was only one who said no, which indicates they realize they are on their way to defeat.


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I am rather surprised at the question from the right hon. member who all his life has been an opponent of capital punishment.


An hon. Member:: What is the answer, you coward?


Stanley Ronald Basford: -and who obviously, for partisan political reasons, is trying to squeeze away from what has been his lifetime position.


Some hon. Members:: Hear, hear!


Stanley Ronald Basford: The question was whether the government would hold a referendum on the question of capital punishment. That being a question of government policy, it should be answered by the Prime Minister. However, giving my personal view and what my advice to the government would be, I would say that we should not hold a referendum.


John George Diefenbaker: I am naturally interested in the expression of the view of the hon. gentleman that I was for abolition through the years-and I was. I voted for the bill. Does he not recall that I voted for the bill when the government decided to abolish capital punishment although, by another bill, preserving it for the murder of police officers and peace officers?


Some hon. Members:: Order.


John George Diefenbaker: That is the same outfit over there that interrupts all the time. All I have to say to them is: as the cuckoo in June, heard but not regarded. When the Prime Minister introduced legislation to provide for capital punishment for the murder of police officers and the like to be

effective until December 31, 1977, I voted for the bill. Then the Prime Minister turned around, somersaulted and set aside-


Some hon. Members:: Order.


Mr. Speaker:: Order please. I will have to ask the right hon. gentleman to put the question.


John George Diefenbaker: Mr. Speaker, I know the truth hurts. I ask why the law was changed, when there were seven murderers- vicious murderers-and the Prime Minister brought in legislation to do away with the law that was brought in by him earlier. Why the change?


Pierre Elliott Trudeau: Mr. Speaker, when a man claims for the whole of his life that he is against capital punishment, and then when the test comes and a bill is presented which abolishes capital punishment completely-


John George Diefenbaker: I voted for that.


Pierre Elliott Trudeau: -the man somersaults, he is the one who does the somersault, not me.


John George Diefenbaker: A final supplementary question, Mr. Speaker. The Prime Minister knows that statement is as false as so many others that he has made, and I ask him to withdraw. 1 voted for abolition and then I voted against the bill that the Prime Minister introduced.


Some hon. Members:: Order.


Mr. Speaker:: Order, please. The matter ought to finish there. I can scarcely condone the right hon. gentleman beginning his question by accusing the Prime Minister of a somersault, and then asking that the same representation made against him be withdrawn as being unparliamentary.


Pierre Elliott Trudeau: You landed on your head.


POST OFFICE
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, my question is for the Postmaster General. I believe the minister would agree that everyone makes mistakes, as this government more than anyone else is well aware, but does he really believe that 60 million errors per year, or 10,000 mistakes per hour, by the Post Office is acceptable to the Canadian people?


Hon. J.-Gilles Lamontagne (Postmaster General):: Mr. Speaker, I would like to answer the hon. member in English. If he would read the article from which the question was taken, I said that the Post Office handles six billion pieces yearly and that we could have an error factor of 1 per cent. That means maybe 60 million errors in the Post Office.
April 13, 1978

I asked the Businessmen's Club yesterday if anyone in business could claim to have an error factor of only 1 per cent. If anyone can claim that, they are very good. It must be realized, too, that the consequences of a 1 per cent error factor may be a little more important in the Post Office than anywhere else. It is still a very good average for a business the size of the Post Office, however, which handles 6 billion pieces of mail each year.


Stan Darling: Mr. Speaker, a supplementary question. In view of the fact that the Postmaster General has announced the possibility of the Post Office refusing to handle uncoded mail some time after the election, will the Postmaster General inform the House if, in fact, this is being practised unofficially in the Post Office at the present time, and will he at least come clean with the public and state clearly at this time what his intentions are with respect to the handling of uncoded mail in the future?


Mr. Lamontagne:: Mr. Speaker, on that issue I answered quite clearly to my audience there was no question for the moment of refusing uncoded mail. I would like to point out however that in other countries certain procedures and standards have been applied which brought about better efficiency in mail delivery, because everyone finally was using the code. As an illustration, Australia has a legal requirement that a letter must show the code if it is to be delivered. Moreover, I have here an article indicating that in the United States, envelopes larger than or otherwise violating post office standards will be returned. What I meant on that occasion is therefore that in the future we will have to try and standardize the way people send their mail. If everyone were using the code as requested, certainly this would help bring about a tremendous increase in postal efficiency.


Stan Darling: Mr. Speaker, my final supplementary is for the Postmaster General. It concerns Bill C-45 which is presently before the House. Is it the government's feeling that the material circulated to the Canadian people during an election campaign is more important and deserving of the immediate attention of the government, with this bill, than the millions of pieces of mail for old age pensioners and the rest of the Canadian public, including businessmen? Is the junk mail that will be going out during the election campaign more important than the important mail-


Mr. Speaker:: Order, please. Surely the question is argumentative.
Oral Questions LABOUR RELATIONS


AMBASSADOR BRIDGE-GOVERNMENT'S CONTRIBUTION TOWARD SETTLING LABOUR DISPUTE
Mr. Mark MacGuigan (Windsor-Walkerville):: Mr. Speaker, my question is for the Minister of Labour. Given the fact that the Ambassador Bridge is one of the principal transportation links between Canada and the United States at Windsor, that there is a labour dispute on both the Canadian side and American side of the bridge at the moment, and that the dispute on the American side has succeeded in greatly halting commercial traffic on the bridge, to the considerable loss of businesses in Windsor, could the Minister of Labour report to the House on the state of the labour dispute on the Canadian side and indicate whether he believes he will be able to make a contribution toward the settlement of the problem on the American side?


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, there is no doubt that there is an interrelationship in the dispute because it involves Teamsters on both sides of the bridge. We have jurisdiction only with respect to the Canadian side. The matter is in the conciliation process. We think we have very able mediators trying to resolve the dispute and I am hopeful it can be resolved. If the matter is resolved on the Canadian side, undoubtedly it will have a beneficial impact on the American side.


ELECTIONS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is to the Prime Minister. I realize that my question, quite frankly, has a partisan aspect-


Some hon. Members:: Oh, oh!


Some hon. Members:: Shame.


An hon. Member:: It is too much, Pierre.


Stanley Howard Knowles: -but I shall ask it in as low a key as possible and I hope the Prime Minister will reply in a similar vein. In view of a Canadian Press report to the effect that a $1 million computer, which belongs to one of the departments of the government, is now in a basement room of the Prime Minister's office and is being geared for use against campaign trail attacks by opposition parties, and in view of the fact the same report says that a number of those who are the Prime Minister's aides and whose salaries are paid for from public funds are spending the bulk of their time acting as election advance men, and so on-


Mr. Paproski:: You wouldn't do that, would you, Pierre?


Stanley Howard Knowles: -will the Prime Minister refer this matter either to the Auditor General or to

April 13, 1978
Oral Questions
the newly appointed Comptroller General for their views as to whether this is a proper expenditure of public funds?


Pierre Elliott Trudeau: Mr. Speaker, on the computer question, I draw to the hon. member's attention that this is an old story which appeared in the Globe and Mail in October, 1977. The two news people who were looking into the allegations that the computer was being used by the Liberal party for political purposes interviewed the high-level civil servant who is in charge of it, and he said that the story, and I quote him-the words were stated outside the House-was "absolute crap". I think the story was that then, and it still is today.
In so far as aides in the Prime Minister's office are concerned, of course the people working for me in the Prime Minister's office are paid out of public funds. The people working for the Leader of the Opposition are paid out of public funds also. With regard to people working in the office of the Leader of the NDP, the hon. member knows they are paid from public funds; and I would wager a large amount with the hon. member-I know he is not a betting man-that they are engaged in political pursuits, too.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Speaker, perhaps before I ask my supplementary question I might be permitted to point out that I asked my question, not on the basis of reports last October but on the basis of a Canadian Press report which appears in this afternoon's Ottawa Journal.
May I put my supplementary question to the Deputy Prime Minister, in view of his responsibility for the Canada Elections Act? In view of the very strict regulations as to the amount of money, either directly or indirectly, that can be spent on election purposes, will the Deputy Prime Minister ask the Chief Electoral Officer to check on these expenditures to see whether they should be reported as part of the election expenses of the Prime Minister?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, I do not find it necessary to consult the Chief Electoral Officer, because it is impossible to incur election expenses in the absence of an election.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


HEALTH AND WELFARE
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I would like to ask a question of the Minister of National Health and Welfare. In view of the fact that we are losing about 1,500 physicians a year from across Canada by emigration, costing

us for their medical education alone between $100 million and $150 million, many of them trained scientists, has the minister any plans to stop this haemorrhage?


Hon.   Monique@: Mr. Speaker, the hon. member refers to a phenomenon where different forces are at play, one of them being that the growth in the number of physicians graduating from universities every year is around 13 per cent in Canada, a country with one of the highest doctor-patient ratios in the world, namely, one doctor for every 673 persons, as of 1977. It also has to do with the attraction of certain booming economies in the southern states of the United States. This trend may be reversed, however, if the United States decides to adopt a medicare plan.
I am very concerned with the emigration of Canadian physicians, but I am not alarmed. Last week I received representations from the Canadian Medical Association, and we are looking into the matter.


ELECTIONS
George Harris Hees: Mr. Speaker, my question is for the Prime Minister. Is the Prime Minister planning a pre-election tour of Ontario such as he undertook in western Canada a few weeks ago? If he is not so planning, will he reconsider and do so, because we have found that the quickest way to switch people over and get them to vote Conservative-


Mr. Speaker:: Order, please.


George Harris Hees: -is to have them see and hear the Prime Minister close up. We want him in our province as much as we can between now and election day.


AGRICULTURE
Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I have a question for the Minister of Agriculture. Will the minister indicate if and when a stabilization pay-out for fed cattle for the first quarter of 1977 will be announced and, if so, what that amount will be?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, using the 90 per cent, according to what the act states the pay-out for the first quarter would be very small. We are having discussions at the present time on what percentage we should use, because the act states that we may go higher than
April 13, 1978

90 per cent, if we desire. That is what we are doing at the present time.


Herbert Thomas (Bert) Hargrave: With regard to the joint announcement by the Minister of Agriculture and the Minister of Industry, Trade and Commerce on March 30, 1978, on beef and veal import controls, will the minister carefully explain the phrase "adjusted for changes in domestic beef consumption since this base period"? Why not relative to the base period? Is the minister now actively contemplating an upward revision of the firm quotas that he announced for offshore beef?


Eugene Whelan: Mr. Speaker, there is no reason why anyone would want to increase those quotas. We made it specific that those quotas would not be increased. I am sure the hon. member knows as well as I do the GATT rules on trading, consumption within our country, and the rights of our trading partners. Those have to be considered. They have been considered. We made what we think is a very strong statement, putting our position very firmly that those quotas would not be changed and that that principle would be used for the next three years.


Mr. Speaker:: The hon. member for Northumberland-Dur-ham.


Mr. Lawrence:: Mr. Speaker, my questions were for the Minister of Finance, who has temporarily left the chamber.


AIRPORTS
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is to the Minister of Transport. In asking it, I would like to warn my hon. friend from Gaspe not to pay too much attention to the promises made yesterday by the Minister of Transport in connection with airports. My question is, where does the matter stand with regard to radar at Victoria international airport? An undertaking was given to this House as long ago as January, 1977, that the report and recommendations in that direction would be made by January of this year.


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I want to refresh my memory as to exactly what that exchange was. We have made it clear that the question of radar at Victoria was a matter of priority as between it and other airports where aircraft movement may be more numerous. In the case of Victoria, there is largely adequate coverage out of Vancouver: that is a very important factor.


Donald W. Munro: Has the minister checked lately the relative figures as between Vancouver and Victoria with respect to traffic, both small and commercial aircraft, pointing out the need for radar at Victoria international airport?
Oral Questions


Otto Emil Lang: Mr. Speaker, the most recent information from my officials was that there would be other locations having higher priority, and that up to that point no decision had been made. I can assure the hon. member, however, that we are watching these situations at all times. When it is appropriate, equipment will be put in place. However, that is not a promise to him about the specific date: it is quite the contrary.


THE BUDGET
Allan Frederick Lawrence: Mr. Speaker, my question is for the Minister of Finance. There are at least two points in the budget statement of Monday night relating to the resource industry which require some clarification. Are the depletion allowance provisions announced on Monday night applicable to the expansion of existing heavy oil and oil sands facilities? If not, why not?


Joseph Jacques Jean Chrétien: Not at this moment, Mr. Speaker.


Allan Frederick Lawrence: "Not at this moment", was that the minister's answer? The second part of my question was, if not, why not? In relation to the admittedly sick portion of the resource industry, namely, the mining industry in this country, there was very little of any substance relating to that industry in the minister's budget statement. For years, to the minister and his predecessors, from the provincial governments as well as from the industry itself, there have been requests that provincial mining royalties be deductible in computing federal tax. Prior to the budget, did the minister also receive representations along this line from his colleague, the Minister of Energy, Mines and Resources?


Joseph Jacques Jean Chrétien: Mr. Speaker, it was agreed at the first ministers' conference that there would be a- meeting of the ministers of finance and ministers of resources of this country to discuss that very problem. I said in my speech that we intend to do that. Some discussion is going on at this time with regard to finding a location, a date and agreement on the agenda.


ADMINISTRATION OF JUSTICE
Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, my question is for the Minister of Justice. In view of the fact that it is stated in the lead article on page 1 of today's Globe and Mail that "Ottawa may kill law aljowing use of force on child by parent, teacher", and in view of the fact that section 43 of
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April 13, 1978
Oral Questions
the Criminal Code gives parents and teachers permission to use reasonable force in the disciplining of children, is the federal government considering the removal of section 43 from the Criminal Code?


Stanley Ronald Basford: Mr. Speaker, I feel very sorry for both the Globe and Mail and the Canadian Broadcasting Corporation who have been sucked in by someone. Those reports of some great confidential report in the Department of Justice was a report given to the Standing Committee on Health, Welfare and Social Affairs on February 24 and tabled in this House on July 7, 1976. It was an analysis by an officer in my department of the issues that are raised in this whole, sad question of child abuse and the laws relating to child abuse and parental and teacher discipline. It made no recommendations; it simply, for the guidance of the committee, raised the issues that it should examine. The committee of this House recommended not repealing section 43 of the Criminal Code, and I accepted that recommendation.
While there is a very great need to examine the law relating to child abuse, and to provide children with protection and rights, if I might express a personal view as a parent, whether I use spanking in a reasonable way is a matter for me, and not the law.


Some hon. Members:: Hear, hear!


NATIONAL REVENUE
Mr. Arnold Malone (Battle River):: Mr. Speaker, my question is directed to whoever on the other side is responding for Revenue Canada. I would like to draw attention to the fact that in the last budget brought down by the former minister of finance, Donald Macdonald, he had a roll-over clause for capital gains tax. We now have a situation where there should be a roll-over provision for the purchase of new farmland. The regulations are now so restricted that we find the application simply does not apply. An example of this is in a letter I received, which states that the replacement of farmland used for wheat farming-


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


Arnold John Malone: That was the question, Mr. Speaker. Why have the regulations been made so restrictive that they simply do not apply to farming because of the differentiation between the styles of farming being practised? Can he give a justification for those regulations?


Mr. Yves Demers (Parliamentary Secretary to Minister of National Revenue):: Mr. Speaker, a few days ago, the Minister of Finance answered a similar question from one of his colleagues of the Progressive Conservative party. I shall be

pleased to look into this matter again in order to give more information to the hon. member.


Arnold John Malone: Mr. Speaker, I would ask the parliamentary secretary if he can indicate how finite he intends to make the regulations, because at the present time the situation is simply making the law not applicable. If you have a situation where a person changes the context to any degree, then the law of last March will simply not apply. Where do they get the quality to so easily make the simple so complicated?


BROADCASTING
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, my question is to the Secretary of State. His office has had notice of this matter for about three years. I know the minister is relatively new in this portfolio and may not be fully aware of this. It has to do with the satellite CBC station proposed for western Nova Scotia. Could the minister exercise, especially at this point in time, the weight of his good offices to expedite the negotiations being conducted by the CBC, the CRTC and affiliated stations so that we might finally get this satellite station which was promised me by Dr. George Davidson when he was president of the CBC in 1969?


Hon. John Roberts (Secretary of State):: Yes, Mr. Speaker, I remember I heard tell of this. All the good offices I have I will exercise on behalf of the hon. member's representation.


BUSINESS OF THE HOUSE
Mr. Hnatyshyn:: I rise on a point of order, Mr. Speaker, to ask the government House leader whether he is in a position to tell us the business of the House for next week and, possibly, even further on. Can he tell us whether it is intended to carry on with the budget debate in the usual way, and what his intentions are with respect to Bill C-45 in particular? I know it is of some importance to him and to the Prime Minister.


Allan Joseph MacEachen: Yes, Mr. Speaker. It is my intention to call the budget debate for today, and when the report is received from the Standing Committee on Labour, Manpower and Immigration, if it is received today, I propose to ask whether I can get a waiver of the standing order so that we could deal with all the final stages of Bill C-45 tomorrow. If this were done, I would call the budget debate for the next sitting of the House. I cannot, of course, proceed with Bill C-45 until I have received a report from the standing committee, but I shall do so as soon as a report is received.
April 13, 1978


Ramon John Hnatyshyn: I realize the government House leader is very interested in getting Bill C-45 through, but should unanimous consent be denied in some corner of the House, what is his intention with respect to government business during the course of the coming week? Further, is the House leader in a position to make an announcement concerning days customarily allotted to the opposition, since we have now reached the last part of the session for dealing with allotted days?


Allan Joseph MacEachen: I shall know in a few moments whether I can get unanimous consent. If consent is denied, we will go on with the budget tomorrow. But I would ask the House to waive the standing order so we could dispose entirely of the bill related to postal operations.


Stanley Howard Knowles: On the point raised by the government House leader, Mr. Speaker, may I suggest that this is a matter which might be the subject of consultation?



ROUTINE PROCEEDINGS


[Stage Direction]
Fourth report of Standing Joint Committee on Regulations and Other Statutory Instruments-Mr. Robinson.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Stanley Howard Knowles: Mr. Speaker, I rise on a separate point of order having to do with what, in my view, was a piece of misinformation given to the House during the question period. I realize it was probably given "off the cuff' or inadvertently, but it is serious enough to invite correction before we go any further.
The Deputy Prime Minister (Mr. MacEachen), responding to a question I put to him concerning moneys being spent now for material or information which might be used during the election period, said, "Since there is no election, there is no need to consult the Chief Electoral Officer." Sir, all of us in this House know that under the new rules governing election expenses, money spent before an election on material or information which is used during the election period has to be reported as part of our election expenses. I suggest, therefore, that before members generally get the wrong impression and think they can spend money now and not report it at election
Business of the House
time, the Deputy Prime Minister ought to consult the Elections Act, with which he is very familiar, and revise the information he gave to the House a few moments ago.


Allan Joseph MacEachen: I think I ought to revise the information, but only because the hon. member revised his question.


MR. HNATYSHYN-QUESTIONS DEALING WITH NATIONAL REVENUE
Ramon John Hnatyshyn: I rise on a separate point of order, Mr. Speaker. Today the hon. member for Battle River (Mr. Malone) addressed a question to the Acting Minister of National Revenue. The question was answered by a parliamentary secretary. I realize that the government is in the process of final disintegration, but I think we are entitled to know who is the acting minister for this particular portfolio since the hon. gentleman who was the minister has been appointed to another place. Could the Deputy Prime Minister (Mr. MacEachen) advise us to whom we should address questions having to do with national revenue?


Allan Joseph MacEachen: The parliamentary secretary is available to answer questions. I believe there are acting ministers and I will provide this information as soon as I have had an opportunity to refresh my memory.

[ Translation]


LABOUR, MANPOWER AND IMMIGRATION
[Stage Direction]
Second report of Standing Committee on Labour, Manpower and Immigration-Mr. Guay (Levis).
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Allan Joseph MacEachen: On a point of order, Mr. Speaker, I would like to ask if it is possible to secure a waiver of Standing Orders in order to deal with Bill C-45 in all its stages tomorrow.


Ramon John Hnatyshyn: I understand a reasonable proposition was put forward by the hon. member for Winnipeg North Centre (Mr. Knowles) with respect to consultation. The hon. House leader may have legitimate reasons for his request, and I believe we are prepared to listen to them, but I think the suggestion put forward by the hon. member for Winnipeg North Centre is a reasonable one.


Allan Joseph MacEachen: The hon. member asked me what my intentions were with regard to the bill, and I gave him an answer. I want to call it tomorrow, if I can get consent. I am
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April 13, 1978
Dairy Policy
having consultations now on a very broad basis on the floor of the House of Commons so that we and the Canadian people may know who is not prepared to agree.


Stanley Howard Knowles: This seems to be the day on which the Deputy Prime Minister (Mr. Mac-Eachen) has chosen to play with words. Surely, what he is now doing does not amount to consultation. I suggest this question be delayed until there has been real consultation among the House leaders.


Allan Joseph MacEachen: Open decisions, openly arrived at.


John George Diefenbaker: The suggestion by the Deputy Prime Minister (Mr. MacEachen) that we should consent to that bill coming on tomorrow simply means that the House is being asked to bail the government out of the position in which it finds itself, and I, for one, will not agree to do so. That bill is not necessary at the moment. Let us get on with the budget and do something for the economy of this country.


MULTICULTURALISM
Hon. Norman A. Cafik (Minister of State (Multiculturalism)):: Mr. Speaker, pursuant to Standing Order 41(2) I wish to table, in both official languages, a study entitled "Multicul-turalism and Ethnic Attitudes in Canada".


TABLING OF COUNCIL'S ANNUAL REPORT
Norman Augustine Cafik: Mr. Speaker, in accordance with Standing Order 41(2)
I would like to table, in both official languages, the report of the Canadian Consultative Council on Multiculturalism for 1977.


AGRICULTURE
Eugene Whelan: Mr. Speaker,
I am pleased to announce the broad outline for the 1978-79 dairy program. As of April 1, 1978, total market sharing quota remains unchanged for the dairy year ending March 31, 1979, for a total of 103.7 million hundredweights. The level of the federal subsidy paid on all industrial milk produced within Canadian requirements remains unchanged at $2.66 per hundredweight. The target price will be increased by 24 cents, to $12.42 per hundredweight. This will mean a five-cent increase in the support price of butter, to $1.27 per pound. The support price of skim milk powder also goes up by two cents, to 74 cents a pound.

The extra 24 cents, plus two other increases during the year, will raise returns to producers by a total of about 76 cents a hundredweight compared with what they got at the same time last year. That means a producer of 300,000 pounds annually will get an additional $2,300. However, let me remind the House that those increases are less than the present general rate of inflation and are needed to maintain producer incomes in the face of rising costs.
The direct levy on in-quota production is reduced to $ 1 per hundredweight, but every hundredweight of in-quota industrial milk and cream will be subject to a new contingency level of 20 cents, refundable to those producers who, at year end, have managed to keep their production within national requirements.
There will be a levy of $ 1 on every hundredweight of surplus cream diverted from fluid to industrial use. I should remind the House that this levy is equivalent to 20 cents per hundredweight on fluid shipments which, in fact, were subject to a 25 cents per hundredweight levy last year.
The over-quota levy will be raised by 50 cents, to $7.50 per hundredweight.
Some good news for those hon. members who have long been asking questions about the difficulties faced by Canada's cheese industry is the new level set for cheese imports. Total imports of cheese will not be allowed to exceed 45 million pounds over the dairy year, down 5 million pounds from the previous 50 million.
The market sharing quota period is being changed to a new basis, which will be August 1 to July 31, starting next year. This will provide the framework within which a more even milk production pattern can be achieved, which will benefit all sectors of the industry.
Our federal budget for the 1978-79 dairy program is made up as follows: $260.7 million in producer subsidy payments; $24.8 million for export assistance; $17 million in carrying charges; and $20 million for international food aid. This $20 million remains unchanged from the amount provided to the Canadian International Development Agency last year to buy skim milk powder and distribute it as part of its food aid program.
Finally, there is in that total an allowance of $6.5 million to the Canadian Dairy Commission to assist in exploring new ways to utilize skim milk powder. This amounts to a total of $329 million in federal assistance.
So far as the Canadian national requirement is concerned, this year's total has been estimated by the Canadian Milk Supply Management Committee to be 98 million hundredweights. Total market sharing quota is made up of these market requirements plus a 5 per cent sleeve. The Canadian Milk Supply Management Committee will, as it normally does, be monitoring production and demand during the year and will make any adjustments needed in quota allocation according to the policy.
I should point out that it is the responsibility of provincial boards to allocate and monitor individual quotas. It certainly is
April 13, 1978

my personal hope that provincial boards will show a special concern for the administration of their quota policies when it comes to the small producer who may have been hard hit by some of the quota cutbacks in the past. I also hope that if a quota cut is needed during the coming dairy year, then it will be made through transfer assessments or reallocation and not through direct quota cuts.
Some will be concerned because this announcement was not made prior to April 1. However, I do not believe there has ever been as much discussion and consultation between the different dairy producers concerned, provincial organizations, the market share quota committee, the management committee, and the Canadian Dairy Commission as there has been with respect to the program for this year. The last meeting of the consultative committee took place on the day the House adjourned for the Easter recess. It has taken some time to put the program together, but I know it is one of the best we have had, and I congratulate the provincial people and the marketing boards which make up the committee which worked out this program along with the Canadian Dairy Commission.


Some hon. Members:: Hear, hear!


Mr. John Wise (Elgin):: Mr. Speaker, I welcome this occasion to respond on behalf of my colleagues to the minister's statement regarding the 1978-79 dairy program. I want to begin by saying that, generally speaking, the dairy year just completed has been one in which the industry has adjusted with a fairly high degree of accuracy to the policy announced a year ago.
Given the many factors which are beyond the control of our producers, they must be commended for their efforts-some at very considerable expense-and for their ability to match milk supplies with domestic consumption and that of the export market. This government ran the very serious risk a year ago, when it applied the 25-cent per hundredweight export levy on fluid milk producers, of destroying the whole national plan. That statement is not an exaggeration, and it appears that the minister today has paid a nickel's worth of attention to that particular problem.
The plan could not have been achieved without the clout of subsidy dollars. The manner in which it was put into force caused disunity among producers within their own provinces, and concern between provinces, and embedded suspicions and anger in the minds of producers and their leaders at all levels.
I am convinced that this minister and certain officials of the Canadian Dairy Commission have not recognized to this date, or choose to ignore or forget, the seriousness of their unilateral action. It is true that time is a great healer, but it is essential if this program is to continue- and it is in everyone's best interest that the program does continue-that this or any similar type of action be avoided in the future. Practically all the provinces rejected this levy, and, indeed, most of the participating provinces did not sign the agreement until well on into the last dairy year. This should provide the government with a clear indication of their dissatisfaction and their deep resentment about this type of action.
Dairy Policy
I do not know the exact situation today, but as recently as last week British Columbia had not signed the national agreement. In not doing so B.C. signified its desire to withdraw, and in accordance with the terms of the agreement B.C. is at liberty today to exercise its right to withdraw from the program. The minister said nothing about this problem today in his statement. It is important and vital to the survival of the national plan, and it must be addressed and resolved immediately.
Another issue which still remains not completely resolved is the matter of the collection of the levy based on fluid milk sales. Whatever policy is followed, it must be brought clearly into conformity with agreements reached on the obligations of the participating provinces. Changes in the sleeve portion, and indeed any changes in the plan, must be administered to eliminate any possibility that producers in any one province can gain an advantage over producers in any other province.
Maximum flexibility and autonomy should be given to each province in the management of its quota system. It is not clear from the minister's printed statement today, but the minister did indicate in his remarks that the changes in the quota year have been made from April 1, 1978, to August 1, 1979, for a 16 months' period. I believe that the intention behind such a move is to level out seasonal production. Although such a move is desirable, I doubt that any real success will be achieved in this regard without such a move being accompanied by a financial incentive.
While it is generally agreed that complete integration of fluid and industrial milk production is desirable, it must be recognized that it would not be in the best interests of the industry to have such a plan forced upon it by the federal government. But it is important that the provinces be allowed to carry out their own plans and to establish their own timetable to achieve this desirable result.
The industry people indicate that there are severe inadequacies in securing accuracy and quality of information regarding production, disappearance of products, and the movement of milk, cream, and milk products. This problem has caused serious difficulties in the past and it can and will cause difficulties in the future, if the accurately of product volumes are not more accurately identified. The Dairy Farmers' Association of Canada has made a recommendation and has called for an improved system of provincial auditing.
The government has a responsibility to ensure that when a surplus is created by certain producers who consistently overproduce, and consequently cause a general reduction in the national quota, that reduction should not be applied across the board but rather should be assessed to those producers who cause the problem and not to those who have kept within their quota. The statement today containing the new contingency level of 20 cents per 100 pounds takes this disturbing factor somewhat into consideration. In addition, in applying price increases under the federal formula, the rule of triggering price adjustments with a 4 per cent change in the formula

April 13, 1978
Dairy Policy
should be changed to 2 per cent in the interest of price stability in relation to inflationary change.
Dairy producers, and particularly the manufacturing sector, continue to call for a reduction in the level of cheese imports by 10 million to 15 million pounds. The statement today goes in the right direction, but it calls for a reduction of only five million pounds. It is interesting that only recently the minister said that import levels were not reaching that particular level. If we could find out the exact level, we would be in a position to assess intelligently whether or not this five million pounds reduction would have any benefit at all.
An import levy could be placed on imported cheese products and the revenues used to reduce the export levy or for sale and promotion of dairy products. It must be stated that every ten million pounds of cheese imports result in a loss of over $3.6 million to Canadian producers, and heavy losses to the manufacturers as well. Greater restrictions should be placed on the importation of skim milk powder and other dairy products which are imported as components. I do not have the latest figures on these amounts, but the products to which I referred have increased by some 80 per cent between 1973 and 1975.
There is no mention in the minister's statement today of the reinstatement of even a portion of the skim milk powder consumer subsidy which was recently withdrawn by the government. I spoke at some length on that issue on March 9, and I will not go into any great detail today except to say that the program should be continued in areas where no fresh milk supplies are available, in areas of high unemployment, and also in areas where the wage rates are less than the national average.


Some hon. Members:: Hear, hear!


John Wise: But it remains incumbent on this government to make every effort to foster and encourage a greater degree of good will and trust between government, the Canadian Dairy Commission, and the industry, than now exists. Some may scoff at that comment, but those who do give an indication that they have been out of touch with people in the dairy industry. I can assure you, Mr. Speaker, that that is a major concern.
Finally, it is unfortunate, unfair to the dairy industry, and completely unacceptable to us, that policy changes continue to be announced after the effective date rather than well in advance of it. It should be noted that subsidy payments to producers have been reduced by $5.3 million, the carrying charges have been reduced by $3 million, and the $20 million commitment for food aid remains the same. There is certainly a great need to increase that $20 million for the purchase of about 60 million pounds of skim milk powder. Next time the minister consults people from the industry perhaps he would be prepared to ask them what kind of commitment they are prepared to make in that area, because I am sure they would be ready to increase their commitment from 60 million pounds to 100 million pounds of skim milk.
The minister continues to refer to this plan as being the best, to use his own favourite terminology "in the whole wide, wide
[Mr. Wise.)
world". In fact, Mr. Speaker, it is not uncommon for the minister to use the same modest description in referring to himself.
I agree that the Canadian dairy industry must be the best in the world to survive many of the programs and policies of this government. With some of the changes I have suggested today, with more consultation and co-operation and more forward planning by the government with the dairy industry, the goal referred to by the minister could be achieved.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I was impressed by the last remarks made by the hon. member when he mentioned the fact that the minister always refers to "the best minister" and "the best program". I think this is one of the times when the farmers thought it would be a better program. However, this is a program which will not change very much, and in fact will not provide even the changes that were recommended by the Dairy Council of Canada at its recent convention.
The minister stated that the target for this year will be about the same as last year, that there will be a slight increase in industrial milk, but that we are still plagued with the same problems we had before. In that respect he did not mention the contribution made by individual farmers. Farmers have been plagued by two things: the actions taken by the governments, both provincial and federal, and the inability of the government and its agencies to ascertain exactly what the market will be in the forthcoming year.
Over the last four or five years the concept of establishing the dairy year has become very important to farmers and has become increasingly difficult to establish for the Minister of Agriculture (Mr. Whelan). The one thing on which I wish to congratulate him is the fact that he has only been 13 days late this year. This is an improvement on the past. The delay is caused in part by our inability to decide what the target will be and exactly where we stand in terms of quotas, because we have not done the one thing for which the dairy farmers have asked, that is, we have not been able to achieve an understanding between the marketing boards in the various provinces, the provinces, and the Canadian Dairy Commission with regard to quotas and how to operate them. As the hon. member who preceded me has said, we are unable to bring all provinces into line, with the farmer down at the bottom agreeing that this is the manner in which the program has to work and these are the contributions he will be required to make.
In drafting the press release, the minister got the best out of it. That is normal, of course. Several weeks ago I spoke with a young farmer. He is not a big farmer, nor a small farmer. He has approximately 40 heads of milk cows. At that time he indicated that his over quota levy would amount to approximately $5,600. The minister indicated that we were to receive an additional 300,000 pound quota. I think 40 cows would produce something over that. Thus, the average probably would be something over that. He indicated they would receive $2,300, and that the increase did not meet inflation. Most
April 13, 1978

farmers have not been able to make that $2,300 because they would be required to make the over quota payment. The minister is faced with a problem which most dairy farmers thought would be solved in this statement. I am referring to the recommended change in the dairy year.
One problem we have been faced with in arriving at a target quota is the movement of the dairy year to a point in time further in the year, with a period of adjustment of perhaps three or four months. Perhaps it could be from April to July. It could be a 16-month year in order to arrive at a more even quota structure. The dairy year would take into consideration part of the problem with respect to seasonal milk. The elimination of summer milk was discussed at all farm meetings. I am sure the Dairy Commission has great difficulty with this problem. Certainly it is a problem with which the industry has great difficulty. In his statement the minister did not give much consideration to that particular problem.
Like the fluid milk producers of Canada, the industrial milk producers should be required to produce milk under a monthly quota which will involve the total year, so that producers in the industrial field will not make their total production in the summer months. Total production in the summer months causes great difficulty to the cheese industry which operates year round. That particular problem has not been faced as yet.
Another problem we are faced with is skim milk powder. It would be wise to sit down sooner or later and decide whether we are going to produce any skim milk powder, whether it is worth taking off the $7 over quota levy, whether it is worth supplementing by approximately 50 cents the production of skim milk powder for international sales. Perhaps we are not receiving any advantage from the skim milk powder program. Perhaps there is a better way of handling it.
There are things which can be done in Canada to assist in levelling out surplus production. As the minister is aware, it comes from the industry as well as the producers themselves. When the average Canadian buys milk, he is not buying fluid milk from the cow. He is buying 2 per cent, skim, or some other product or by-product from the fluid field. We should put some money into the disposal of skim milk powder. It is a valuable commodity. We are attempting to give it to other countries, at the same time as indicating that it has nutritional value. Perhaps it could be distributed in Canada through a school milk program. That would cost a few dollars, but it would be better than what is occurring at the present time. Farmers are finding it easier to dump milk down the drain than putting it into the system. That is a waste of a nutritious and very useful resource. It should be distributed through a school milk program or through a food stamp program which would benefit poorer families.
Several other things should have been included in the minister's statement respecting the sales program of quotas. Last year when some farmers had huge quotas, quota was available and many people borrowed, rented or loaned quota, and it was fairly satisfactory. This year the price of quota fluctuated to an unreasonably high level. In fact, most producers have indicated that it will take two to four years of production to
Dairy Policy
pay for the industrial quota, and there is no assurance that the price will remain at that level.
There are a number of programs which could be implemented. If time permitted, I could outline a number of ways that are better to utilize skim milk powder than paying people to take it off our hands. In many cases it is delivered to countries where, if their water were added to the powder, it could become a poisonous substance. There are better ways of handling skim milk powder.
Farmers will not be very happy with the dairy program this year. It does not indicate anything of substance or any value, with the exception of the reduction of cheese imports. I am surprised and pleased with the industrial developments which have taken place in the production of cheese in Canada. Unfortunately, Kraft is one of the companies which has been involved, but companies have been able to produce probably 30 or 40 types of cheese which previously had to be imported from Europe and other parts of the world. At the present time probably 110 types, varieties or brands of cheese are being imported. With the help of the Department of Agriculture, perhaps Canada would be able to manufacture every one of those specialty cheeses.
How was the minister able to change the only thing which developed the contractual link of the Prime Minister (Mr. Trudeau) with the European Common Market? Cheese imports were reduced by another ten million pounds, but most Canadian farmers feel those imports should be stopped altogether, or a tariff should be placed on those imports in order for Canada to double its specialty cheese production.
The minister will not receive any kudos out of this year's announcement. Many things should have taken place. There should be federal leadership from the Canadian Dairy Commission to the pooling of industrial and fluid milk sales in Canada. Most farmers have made the expenditure which would allow them to produce the high quality milk which has always been available to Canadian fluid milk users. In the main, industrial milk producers are now meeting those standards. It appears to me it is time for us to give some leadership in the pooling of all milk so that it is not handled in a different manner in different provinces.
The minister has not solved the problem of over production by food-milk producers although this is something that has caused difficulty. I am sure he would not have collected from most people if we had not been paying the subsidy.
I think there are many things that can and should be done to make our dairy industry a more viable industry.
In closing, I should like to say that Canadians in general should appreciate the efforts of the dairy producers in this country. Under great hardship over the last two or three years they have been able to overcome their difficulties and establish a sound industrial and fluid milk industry which has provided milk for Canadians at a reasonable price.

April 13, 1978
Dairy Policy


Joseph Adrien Henri Lambert: Mr. Speaker, last week I asked the Minister of Agriculture to announce as soon as possible the dairy policy for the current year. At that time, the minister answered proudly that he would announce it soon and that we should certainly be happy to learn that it would be the best in the world.
Now, as it looks very much like the one we had last year; it is nothing new since the quota is still 98 to 103 million hundredweights. So it is exactly the same as last year. As concerns the subsidy which remains at $2.66, I thank the minister on behalf of dairy producers, because there were rumours in my province to the effect that the federal government intended to discontinue the subsidies paid to industrial milk producers. This is further proof that the public is not always adequately informed, since I received many calls from people inquiring whether that was true or not.
Mr. Speaker, the target price per hundredweight of milk, as mentioned in the minister's statement, has been raised to $12.42, or a 24 cent increase per hundredweight. I feel, and the minister agrees with me, that this increase is far below those made in other sectors. I am convinced that at least farm and dairy producers will not be blamed for the rising inflation in Canada and the fall of the Canadian dollar.
1 am pleased, Mr. Speaker, that the import levy has been reduced to $1 per hundredweight. I wonder how it came to be set at $1, because a little further in the statement we find that "every hundredweight of in-quota industrial milk and cream will be subject to a new contingency level of 20 cents, refundable to those producers who, at year end, have managed to keep their production within national requirements."
So, it is $1 or $1.09. Who is going to decide whether it is really only $1 or $1.09? In what circumstances is this really going to be set at $1.09? Mr. Speaker, the levy on surplus cream diverted from fluid milk for industrial use, which is equivalent to 20 cents on fluid milk, is also announced in the dairy policy. This is a matter, Mr. Speaker, which gave rise last year to terrible discussions, manifestations, even confrontation here in front of parliament and this problem was solved very late in the year. I would like the minister's assurance on this question, so we could know if the management committee, the Canadian Dairy Commission and the minister really reached an agreement which will prevent manifestations of the kind we had last year.
What is less welcome, Mr. Speaker, is the raise to $7.50 of the over-quota levy and as I often said before, as have others, it is not easy for a dairy producer to control precisely the production allowed by his quota. I have been a dairy producer for some time, and I always preferred a great unit production. Our agronomists and our technicians were teaching us various formulas for improving the milk production of our cows, and with this penalty policy, as milk production is not as simple to

control as a tap, some producers must have their cows treated with injections to reduce their production, and this certainly upsets the cows. So instead of giving milk, they give "spite", because this is against the law of nature. Thus, the quality of our herds depreciates, and I am afraid that in the next few years we will have to pay for that, because it is not normal to give chemical injections for keeping the dairy cow from producing milk. Mr. Speaker, I now would like to discuss cheese imports. The minister is telling us that there will be a reduction to 45 million this year. Last year they were at 50 million.
On behalf of producers, I would like to urge the minister to stimulate research programs to make greater use of our dairy production and develop various kinds of cheese which could be made available to our Canadian consumers to eliminate the surpluses that will be penalized, according to the minister's statement. Mr. Speaker, I am convinced that the minister is sincere because he mentioned in his statement that last year small and young producers experienced problems as a result of the quotas but he also added: I also hope that if a quota cut is needed during the coming dairy year then it will be made through transfer assessments or reallocations and not through direct quota cuts.
Now if we want to ensure that a new generation will carry on in agriculture, we must not discourage the young people who run into debt and decide to buy the family land and adjoining lands to have a productive operation. Yet our laws force them to get into debt and to buy quotas to be able to. I am sure the hon. member for Levis (Mr. Guay) who is listening to me very carefully sees those things happening, because it also happens in this riding. So we should devise a formula to encourage them.
Mr. Speaker, the rise in the price of milk falls far short of the rise in production costs. It is a well known fact that electricity costs went up sharply, that gas costs went up sharply, as did the cost of farm machinery parts. On that matter, I would like to take this opportunity to ask the Minister of Finance (Mr. Chretien) to see to it that the recommendations of the Barber Commission be implemented as soon as possible, so that farmers are not forced to pay prohibitive prices for replacement parts. Something must be done in this regard to help milk producers and improve their situation.
Finally, Mr. Speaker, to conclude I must confess that I am a little disappointed that the school year, I mean the dairy year, has not been changed. I am sorry if I said school year but I was a school commissioner for a long time and we had to talk of school years then, but what I meant was dairy year. I believe it would be an excellent solution and it should be studied further. The dairy year should be changed to run from October 1 to September 30 of the following year so that the producers would be able to eliminate from their herd the necessary number of heads for the winter months and maintain it at the established level of the quota. As everyone knows,
April 13, 1978

during the winter beef prices are higher and the dairy producers could then dispose of their cattle at prices which would bring them additional revenues. Mr. Speaker, I think that the minister should retain this proposal, and apply it to the current year as it is not too late to do so; but if they did change the dairy year, why not say so in the statement?


Mr. Pinard:: But it is in the statement.


Joseph Adrien Henri Lambert: Well, I must have some pages missing then. I know it was late reaching me in any event, and if it has been done, it is all for the best; it will be August 1, so that is already a step forward. But I think it would be preferable to postpone it to October 1. In any event, I am quite pleased and things could have been worse. I hope that other countries will follow the example of Canada and that their producers will be as satisfied as Canadian producers.


Mr. Towers:: Mr. Speaker, I have a three-pronged question. The reason cheese is being imported is because there is a profit in it. In the past brokers have been receiving profits from its importation. I was wondering if there has been any discussion in the department to ensure that the Canadian Dairy Commission receives the profit on the importation of cheese.
With regard to the advertising program relating to cheese, will there be greater flexibility given to provinces like Alberta which has its own program? Has there been any discussion with the Department of Manpower in devising ways and means whereby manpower could be provided for the dairy industry? Up to the present time it has been very difficult for those in the industry to get employees.


Eugene Whelan: Mr. Speaker, on the question of import/export of cheese and that profit must be there for importers/exporters to be in the business of bringing in this product, I would agree with the hon. member that we have discussed the same type of an operation which we use for butter at the present time. We need butter. On the butterfat exchange program last year we did import some butter, but that is brought in and put on the market at a domestic price. If there is any money to be made, that goes into the treasury. For instance, if butter was brought in at world price last year it would have been around 35 cents a pound, plus a little bit, I believe towards the end of the year. That was put on the domestic market at our price in Canada. The money that was made belonged to the Dairy Commission, or the Treasury of Canada, I believe you would say.
With regard to sharing of advertising, I think I know what the hon. member wants. Alberta was the only province that asked that it be given the money to advertise provincially. That decision was made by all the producers, etc., that the advertising should be national, that electronic and paper media be used. We think it has been very successful because the con-
Dairy Policy
sumption of cheese has gone up, in the case of cheddar by over 3 per cent, and specialty cheese by over 6 per cent which is a sizeable increase in any one year.


Mr. Epp:: Mr. Speaker, very briefly I would like to ask the minister, in view of the fact that we will now be changing the dairy year, for the first time with an additional four months for a total of 16 months, could he indicate how the quota will be determined for those four months in view of the fact those four months are in the spring and shippers generally have a higher amount of shipping during that period of time, and yet our regular shippers through the year-12 months-have a fairly steady supply of milk? How will this be determined, and will there be very close monitoring and increased monitoring by the CDC in order to make sure that whatever arrangement there is, it will not be misused by those in the shipping of milk for specific periods?


Eugene Whelan: Mr. Speaker, the whole idea of changing the dairy year has come about not from the Dairy Commission solely but from the producers themselves. We want a constant production of fresh milk for those markets that are developing. Of the $6.5 million that will be used to develop new programs and new ways to sell the industrial dairy products, part at least will be going for that kind of development. We need the fresh milk for yogourt, etc. These types of products are rapidly expanding for consumption in homes and restaurants. This is an area in which we think we should be involved.
We have increased the sales of condensed milk on world markets last year by around 40 per cent. That lessens the need for butter and skim milk powder. When you can sell the complete product, condensed in a can, in some other part of the world it is better to do that even if, as the spokesman for the New Democratic Party has said, some of our fat needs must be imported, and it is better to do that because it is not so costly.
I think the monitoring system is the best we have had for a long time. The co-operation between the provinces, the provincial marketing boards, and the CDC I feel is excellent at the present time, to make sure that they know when they are getting out of line with production. I believe the hon. member for Elgin (Mr. Wise) made a comment about that when he spoke.
When one section or the other is getting out of line it is watched much closer. Under the program for this year, no longer will it be that one province over-produces and the other one pays a penalty. If a neighbour over-produces, no longer will the other neighbour pay part of that penalty. If they get out of line on the quota allowed to them, they will be the ones who will pay for it; in other words, the individual who breaks the rules. This is something which the producers want, and we want.
The four months will be reported month by month to the Dairy Commission. We know there will always be that production in that four months the hon. member is talking about. That should be taken advantage of and can be used for those products we are discussing. That is a time of year when there is an extra consumption of dairy products. Those are also some
4468

April 13, 1978
Dairy Policy
of the better months for tourism. The advertising program will be geared to using as much of that in as many new ways as we can possibly think of.


Mr. Schellenberger:: Mr. Speaker, my question relates to the movement of people within Canada. If I might use the example of Alberta, in the last three years Alberta has increased its population by movement, from within Canada, by some 60,000 per year. This has placed the province of Alberta in a shortage of supply situation at times. Will the minister instruct the milk supply committee to meet again in order that we can come up with an adequate quota to reflect the movement of people in this country in order to solve the problems, particularly in Alberta and British Columbia?


Eugene Whelan: Mr. Speaker, the supply management committee and the Dairy Commission are very much aware of the different areas of consumption in Canada. Even without the movement of people, certain parts of our society consume more of the product than others because of income, their way of life, and so on. It may be because of the kind of program a province may have. For example, the province of Nova Scotia has a milk program for school children. Therefore, the children there are trained, if not at home, at school, that milk is a good protein product and is highly nourishing. That has a consumption factor built in from the time they go to kindergarten. This is being tried by some of the other provincial groups. Provincial marketing boards have special advertising programs.
The Alberta producers are not in the difficult position the hon. member talked about. If he has evidence about a shortage in Alberta, it has not been brought to my attention. They had a slight surplus problem in Alberta last year. They distribute within the province, not by the federal Dairy Commission.


Mr. McGrath:: Mr. Speaker, we are all anxious to hear the Leader of the Opposition (Mr. Clark). However, I would first like to ask a short but important question. I hope it will elicit a brief reply. It is a simple question. The consumer subsidy on powdered skim milk has been removed. Concern has been expressed by his colleague, the Minister of Consumer and Corporate Affairs (Mr. Ouellet), who stated in committee the other night that it should be placed back on for certain groups. The Minister of National Health and Welfare (Miss Begin) has also expressed concern about it. Has the Minister of Agriculture (Mr. Whelan) had consultation with these two colleagues to see what can be done to offset the 40 to 50 per cent price increase on powdered skim milk which will flow from his announcement, and which will lean pretty heavily on poor people, native people, and particularly on people in the north?


Eugene Whelan: Mr. Speaker, if there is a 40 or 50 per cent increase in the price of skim milk powder, something is very wrong. It should not amount to anything more than 34 cents a pound. Thirty-four on to 74 does not make a 50 per cent increase in the price of that product. Even if they add the total on to it, and there is nothing saying the store has to do it, they

will supply a quart of a healthy, life-giving substance with many of the minerals that all age groups need, for about 28 cents a quart. You cannot buy Pepsi, Coca Cola, Seven Up or any other soft drink beverage for that amount. With regard to the question of whether I am consulting with my colleagues, yes I am. I again say that I do not think that it is the position of the Department of Agriculture to be in the subsidy business. Possibly transportation should be considered. Over half the cost of food in some of the northern parts of this country is transportation. Maybe it should be in the form of more direct aid through subsidization. We are looking at all these matters at the present time.


William Arnold Peters: Mr. Speaker, I would like to ask a very simple question. Why did the minister not include in his statement in the House the information that he provided in his press release in relation to the dairy year? If the minister is going to make a statement, he should make the whole statement in the House rather than making part of it in a press release where he is apt to get away with a lot of things which may be of doubtful authenticity.


Eugene Whelan: Mr. Speaker, if the hon. member thinks I did not want all that in the statement, he is mistaken. We are cautioned not to make too long a statement in the House. That is why it was narrowed down. Those who drafted the notes for my presentation were more conservative than I thought they would be. They left out two of the articles about the fund for export costs, $24.8 million, and the fact that the dairy year was going to be extended for four months. I added in both of those. If the hon. member was not in the House when I made my presentation, I am sorry. I did ad lib those comments when I made my presentation.


QUESTION OF PRIVILEGE
Joseph Adrien Henri Lambert: Mr. Speaker, I raise a question of privilege.
Earlier in the day, while commenting on the statement made by the Minister of Agriculture (Mr. Whelan) on the dairy policy, I made certain suggestions and I made them on the basis of a document which was delivered to me, namely the statement made by the minister to the House today and which I received just before coming to the House. So, in view of the fact that I did not have the official communique which the hon. member for Levis (Mr. Guay) handed me some time after, I therefore raise the question of privilege because I suggested a change of date in the dairy policy while the official communique contained precisely a change of date which is official.
As a result I have found myself stating things which I should have known and the fact is that it makes you look very silly when you take a position regarding a document in your hands while there actually exists another document which is more complete and more informative. I do not intend to blame
April 13, 1978

the minister for that, Mr. Speaker, but I would like to seize this opportunity so that in the future, when there is a minister's statement of such significance, we may get at least the full text of the communique while the minister himself could summarize it before us. That way, we would be in a position of total awareness regarding all the facts. I do not wish to complain needlessly, but I am convinced that my question of privilege is quite justified and well-grounded so I would appreciate if it could be taken into account.


BANK ACT
Stuart Malcolm Leggatt: for leave to introduce Bill C-442, to amend the Bank Act (standard forms).


Some hon. Members:: Explain.


Stuart Malcolm Leggatt: Mr. Speaker, the purpose of this legislation is to allow the Inspector General of Banks to regulate the contents of standard bank forms. The reason this is necessary is that in some provinces, particularly in British Columbia, "seize or sue" legislation has been passed. There is now evidence that banks have been refusing to amend their standards to comply with provincial law, thereby leaving the customers to believe there is a necessity to pay deficiencies where by provincial law this is not required. In brief, this will bring bank forms into compliance with provincial law.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Yvon Pinard: Mr. Speaker, the following questions will be answered today: Nos. 747, 788, 1,235, 1,341, 1,353, 1,366, 1,367 and 1,461.


Mr. Howie: Since April 1, 1976, what amount was spent for entertainment by the Department of External Affairs?


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: April 1, 1976 to March 31, 1977, $1,640,371; April 1, 1977 to October 31, 1977, $719,330.
In so far as the Canadian International Development Agency is concerned, the reply is as follows: The amount spent for entertainment was $66,339.10 for the period April 1, 1976 to December 31, 1977.


Mr. Herbert: Does the government share any part of the cost of the family planning centres recently announced by the Quebec Provincial Government?


Mr. C. Douglas (Bruce-Grey) moved: for leave to introduce Bill C-443, respecting the importation of beef.


Some hon. Members:: Explain.


Crawford Douglas: Mr. Speaker, the purpose of this bill would be to put in the hands of the Minister of Agriculture (Mr. Whelan) the legislative authority to protect the economic and national interest of Canada and the primary producers of beef from unfair or unwarranted interference in domestic beef markets. The intent would be to put in place a mechanism that would allow beef producers in this country to plan and develop better their production schedule while knowing that a legislative device is in place to avoid those wide fluctuations in the levels of offshore imports which can so adversely affect their industry.


Hon.   Monique@: Yes. The federal government has shared in the costs of establishing family planning centers by the Quebec provincial government. The family planning division assisted the department of social affairs, Quebec, in setting up family planning centers in the centres locaux de services com-munautaires by contributing $220,000 in 1974/75, $100,000 in 1975/76 and $330,150 in 1976/77. The role of the family planning centers in the centres locaux de services com-munautaires is to provide the whole range of family planning services, counselling, information and medical advice in fertility and contraception. Most centers employ a nurse, a social worker and a medical doctor. There are no abortion services within the centres locaux de services communautaires.


Mr. Towers: 1.	Have additional funds been allocated to strengthen CBC Radio agricultural broadcasts since the report of the Standing Committee on Broadcasting, Films and Assistance to the Arts was presented in the House in July 1977?
80033-70V2

April 13, 1978
Order Paper Questions
2.	Have amounts designated for CBC agricultural broadcasting been reduced since the Committee's hearings in December 1976 and, if so, by how much?
Hod. John Roberts (Secretary of State): I am informed by the Canadian Broadcasting Corporation as follows: 1. Additional funds have been allocated to produce the new program "The Food Show", which began January 8, 1978. Some extra moneys have also gone to strengthen the syndication of agriculture and food items, i.e. the exchange of topical items among regional production centres for use on local and regional programs.
2. No.


Mr. McKinnon: Is the RCMP buying $19,210 worth of mortician supplies from Finnie Mfg. Co. Ltd. and, if so, for what reason?


Mr. Rod Blaker (Parliamentary Secretary to Solicitor General):: Yes. Finnie Manufacturing Co. Ltd. supplied 247 body bags and 200 body bag liners to the RCMP for use at various locations across Canada. These items are used when bodies are removed from fatal motor vehicle accidents, scenes of suicides and sudden deaths, etc. The body bag is made of a heavy rubberized material and the liner fits inside the bag and is disposable.


Mr. Brisco: What are the terms of reference of the Public Service Commission's Language Bureau?


John (Moody) Roberts: I am informed by the Public Service Commission as follows: The mandate of the Language Training Branch is to aid departments agencies and other organizations of the federal government, in the realization of departmental and individual plans regarding language training and the continual application of such activities as orientation, curriculum development, teaching, evaluation and counselling.
N.B. On July 1, 1977, the language bureau and its regional operations directorate became the Language Training Branch.


Mr. Lambert (Bellechasse): During the 1976-77 fiscal year, did the government pay old age security pensions and guaranteed income supplements to spouses and, if so (a) what was the (i) total amount (ii) amount per province (b) to how many recipients (i) in all (ii) per province?


Hon.   Monique@: No old age security pensions or guaranteed income supplement benefits were paid to persons between the ages of 60 to 65. However, information concerning the spouse's allowance program during the 1976-77 fiscal year is provided below:
No. of
	Amount Paid	Recipients
	($000's)	
(a)(i)	100,626 (b)(i)	71,781(ii) Newfoundland	5,456	2,849Prince Edward Island	1,158	696Nova Scotia	6,264	4,104New Brunswick	4,397	3,027Quebec	31,898	21,535Ontario	20,614	17,714Manitoba	6,096	4,215Saskatchewan	5,916	3,998Alberta	7,443	5,371British Columbia	11,272	8,215Northwest Territories	90	45Yukon	22	12OLD AGE SECURITY PENSION	
Question No. 1,367-Mr.	Lambert (Bellechasse):	
1. During the 1976-77 fiscal	year, how many persons, 65	years and over,
received the (a) old age security pension (b) guaranteed income supplement?		
2. In each case, what (a) was the amount paid (i) in total (ii) per province (b)		
was the number of beneficiaries per province?		
Hon. Monique Begin	(Minister of National	Health and
Welfare):		
l.	The number of	
	recipients in	
	1976-77 of in	1976-77 of
	Old Age Guaranteed Income	
	Security Supplement	
	(a)	(b)
Newfoundland	37,595	30,820Prince Edward Island	13,421	9,966Nova Scotia	81,376	54,461New Brunswick	61,914	41,379Quebec	492,172	310,704Ontario	737,867	343,891Manitoba	107,891	62,231Saskatchewan	103,638	57,002Alberta	137,406	78,510British Columbia	239,333	124,505Northwest Territories	1,096	863Yukon	592	346Total	2,014,301	1,114,678
2. The amount paid per province in 1976-77 for:
	Old Age Security	Guaranteed Income Supplement
	(S)	($)
Newfoundland	61,896	30,711Prince Edward Island	22,148	9,487Nova Scotia	134,248	51,461New Brunswick	103,542	39,434Quebec	808,042	294,238Ontario	1,215,438	299,586Manitoba	177,809	55,999Saskatchewan	172,011	51,598Alberta	226,901	71,789British Columbia	393,961	111,487Northwest Territories	1,908	977Yukon	1,015	361Total	3,318,919	1,017,128

April 13, 1978


Mr. Rodriguez: With reference to the answer to Question No. 1,131, what were the major programme areas under which the money was spent and what was the amount going to each area?


Hon. Joseph-Philippe Guay (Minister of National Revenue):: Operating costs of the	
Sudbury District	
Taxation Office	Customs and Excise Program
1969-70-1,245,108	Not available
1970-71-1,341,857	$ 62,931
1971-72-1,595,678	66,459
1972-73-1,815,946	82,571
1973-74-2,081,095	100,280
1974-75-2,560,100	100,323
1975-76-2,731,566	122,288
1976-77-3,139,299	133,303
1977-78-2,625,191	128,380
(to date)	
* *
*


Yvon Pinard: Mr. Speaker, if question No. 1,446 could be made an order for return, this return would be tabled immediately.


Mr. Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered. Does the House agree that question No. 1,446 be deemed to have been made an order for return?


Some hon. Members:: Agreed.


Mr. Mitges: 1.	How does the Department of National Revenue define "ethnic newspaper"?
2.	In which ethnic newspapers did the Department advertise (a) in the fiscal year ending March 31, 1977 (b) since March 31, 1977 and, in each case, what was the total amount of advertisement placed?
3.	What criteria does the Department use to determine which ethnic newspapers will receive government advertising?
Return tabled.
The Budget-Mr. Clark


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


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, April 12, consideration of the motion of Mr. Chretien that this House approves in general the budgetary policy of the government; the amendment of Mr. Stevens (p. 4439), and the amendment to the amendment of Mr. Saltsman (p. 4443).
Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, it is appropriate that moments before I rise to speak on a budget which should have been brought in long ago, we saw introduced as a private member's bill a piece of legislation-a meat import law-which should have been introduced by a minister of the Crown, by the Minister of Agriculture (Mr. Whelan), some time ago. He promised three years ago he would introduce such a bill, and again he promised it would be introduced by the government this session. That responsibility was abandoned by the government and passed off to a backbencher, in the certain knowledge that, because of the way in which this government works, that piece of agricultural legislation would never see the light of day in this House.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, in dealing with the budget which was brought down on Monday night by the Minister of Finance (Mr. Chretien) I have to say with real sadness that my response, as I listened to the minister deliver his first and last budget address, was very much like my reaction to the speech given by the Prime Minister (Mr. Trudeau)-the latest in a series of televised speeches shown on CBC and CTV across the country-when he went to New York. What happened with this budget, as happened with the speech made by the Prime Minister in New York, was that the government, presented with an excellent opportunity to give Canadians some sense of economic leadership and to give the international community some certainty and confidence that there was a government here which was prepared to give economic leadership and to give some direction to our economy, failed to meet that opportunity to respond.
That opportunity was lost for two fundamental reasons. First, the government just does not want to admit how very

April 13, 1978
The Budget-Mr. Clark
serious Canada's economic problems are today. Second, this government no longer has the energy or imagination to give the Canadian economy the leadership it needs. The problems are only too well known to all of us. The Canadian dollar has fallen far below the level it should reach. The point which troubles most of us as we look at daily declines in the value of our dollar is the incompetence of this government which has created such concern among the international community. This government alone has cost us at least three points on the value of our dollar. I say "at least". It has cost this country somewhere between a billion, and one and a half billion dollars-a billion, or a billion and a half dollars wasted already because the international community-people who have to make decisions about the value and worth of the Canadian currency-just cannot find in this incompetent government anyone in whom to place their confidence.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We see the situation in this country where investment money-money which should be invested in this country to create jobs in this country, Canadian investment, and money which could come in from abroad if there were a climate in which foreign and Canadian investors could have confidence-instead of coming into this country is flooding out of it. Again, we see the rise of inflation in this country. Yesterday the figures showed it has risen once more-up to 8.8 per cent on an annual basis, an inflation rate which has been driven even higher by the finance minister's handling of the Canadian dollar.
We know the grievous situation which exists among the unemployed in Canada. More than a million Canadians are out of work now, and the government's answer to those million people is to say: It does not matter; they have unemployment insurance; they do not need to work; they can go on welfare. That is the philosophy of this government-


Steve Eugene Paproski: Shame!


Charles Joseph Clark: -and then they go on to say: Besides, that's not the real figure. Those are not real people, they are just women who want to work. Or: They are just young people who want to work. Mr. Speaker, that is a shameful attitude.


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: A heartless minister.


Charles Joseph Clark: Of course women in this country want to work. And they have the right to expect that this will be a modern community in which they can find work to do, if that is what they want. Of course young people in this country want to work. And they want to be able to start their careers with jobs to go to, rather than having to go to the Unemployment Insurance Commission. They should want to work. But in too many cases, among women and among young people, it is not simply a matter of wanting to work; it is a matter of having to work.
If the Minister of Finance, who so cavalierly blames unemployment on the women of Canada, would take a look at the actual situation of many of the women who are working, he would know that in many cases they are working because they have to work. He would know that if they did not work, or if they were not seeking work, their families would be without bread on the table, their children would be without the kind of future which should be theirs in a country such as Canada. These women have to work because we have a government which has let costs get out of control and which has destroyed the sense of possibility which used to be the basis of the Canadian nation.
The Prime Minister, with that lack of concern for economic matters and for the situation of the ordinary Canadian which he has demonstrated over the years, blames these problems on the world. He says they result from world conditions. It used to be the weather that he blamed, but now he needs a different explanation. The real problem is the ten-year failure of this government. Of course the world is tough. The Prime Minister should have known this from all his reading and all his travels. We live in a tough, hard world, but no matter how tough it is, ours is a country which should lead the world and not fall helplessly behind as we have under the direction and policies of this government-


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The difficulty is that the government is just worn out. Even when it was a young government-if you can cast your mind back that far to a point at which this government had some energy-when its best ministers were coming in instead of going out, and I refer to those like the Minister of Justice (Mr. Basford) who is across the aisle, back when it had energy and imagination, this government even then laid the basis for many of our economic problems of today by putting its priorities in areas other than the Canadian economy. It is uncontestable that by focusing so much exclusive attention on language policy and on theories like the contractual link, the government ignored the realities of the Canadian economy. Not only did it set the stage for the economic problems we now have, but it also sowed fresh seeds of separatism in the province of Quebec. That is the legacy of this government.
When it is forced to face the economic reality of Canada, this government is just too worn out to take command. Government members content themselves with trying to fool people instead of trying to lead them. There has been an absolute failure in economic leadership. I ask the House to consider these facts.
Tomorrow, April 14, is the date for the termination of controls, and two points are important for the House and the country to recognize. This government broke its word when it brought in controls. That is well known, but the government also broke its word in the way it operated the controls. Hon. members and the people of Canada will recall that when the Prime Minister introduced controls, he went out and promised
[Mr. Clark.}
April 13, 1978

that there would be major reforms in housing policy, in energy policy, and in other areas where change was needed, and that we would use the period of controls and the atmosphere of emergency to achieve those changes. Well, none of those reforms has come about. Untold millions in Canadian investment left this country because of the uncertainty that was generated by the controls regime, and inflation today, which was "wrestled to the ground" and which this government said it would end, stands at 8.8 per cent, and is rising.


James Aloysius McGrath: A shameful record.


Charles Joseph Clark: In October the new minister took a half step toward dealing with this problem when he brought down a budget which was not a budget. It was a document marked by a stimulus which was not a stimulus. The centrepiece of that proposal, as hon. members will recall, was a two-month tax cut of about $700 million, and the evidence is that it had almost no impact on the Canadian economy because the initiative of the government in October was too timid and far too limited. We asked for a real budget to be brought forward, and this government ducked, delayed, refused, sought every refuge and subterfuge it could, and finally brought in a patch-up budget which has the same weaknesses as the last excuse for stimulus. There is no over-all economic framework in this budget. There is no commitment to cut government spending, and no stimulus permanent enough to make a real difference in creating jobs and growth for Canadians.

Of course the budget features one or two provisions which we can support; there has never been any budget which did not contain valid proposals. I am pleased to note that the minister has complied with our request for action to promote research and development and has at least restored the tax deduction for research and development set under the Diefenbaker administration, a deduction which was subsequently removed by the Liberals. We are also pleased to note that our suggestion for a more equitable treatment of incorporated family farms has been accepted. We were also satisfied with the necessary options suggested for the pension plan as well as the limited incentives granted in the transportation and energy areas.

The Minister of Finance faced three major challenges in preparing this budget, but the sad report card is that he failed on each challenge. The most immediate challenge was to create jobs for Canadians. More than one million Canadians are out of work, and the challenge was to create jobs by stimulating the economy. By the government's own calculations, the stimulus the minister proposed will create just a few more jobs in six months than the government lost last month alone because of its economic policies.


Some hon. Members:: Shame!


Charles Joseph Clark: The second challenge was to halt the costly run on the Canadian dollar. Well, the results are in. Every half
The Budget-Mr. Clark
measure this minister takes drives the dollar further down. Just an hour after the minister finished reading his budget statement, the vice-president of the Bank of America said on CBC television from New York that nothing in the budget would help bolster the dollar or help assure international investors about the long-term prospects of the Canadian economy. In this morning's Montreal Gazette a senior trader was quoted as saying:
The events of the last few days have only increased downward pressure on the dollar. First came what was seen as a neutral budget, then poor unemployment figures and (then) figures showing a sharp rise in the consumer price index.
Every action this government takes makes our dollar figures worse, and one of the reasons is that this government will not come clean with the Canadian people, spell out its strategy, and take full measures instead of half measures. The government knows it must do that.
The third and perhaps most important challenge the minister faced was to restore some sense of confidence in Canadians and to demonstrate that we have here a national government which is doing more than plugging the leaks in a sinking ship. The centrepiece of this budget reflects the minister's view of Canada's future. That reflection of his view causes alarm among many Canadians because he thinks of our future in terms of six months, and he brings in a stimulus which will stop after six months. It will stop when it is needed most, when unemployment grows most acute in this country.
That measure may be considered to be politically clever. That measure provides election stimulus-or so the minister hopes-if not economic stimulus, and it perpetuates the old pattern of this government of creating problems for the provinces. We can be sure that particularly in the next two or three months the federal government will be going around this country and taking credit for introducing this measure. However, the provinces will bear the burden of restoring this tax, and that will be a particularly heavy burden because the provinces will be seen to be increasing sales taxes when this half measure ends. That will happen at precisely the time when unemployment in Canada becomes most acute. One wonders how Premier Regan of Nova Scotia will welcome that particular burden from his Liberal friends in Ottawa.


John Patrick (Pat) Nowlan: He won't be there.


Charles Joseph Clark: As my colleague from Nova Scotia reminds me, Premier Regan, who represents the western beachhead of Liberal strength in this country, will probably not be there come fall. If he is, and if he goes to the people and has to defend the re-introduction of sales taxes because of the shortsighted economic policies of his colleagues in Ottawa, he will certainly be on his way down the road after an election in his province.


Ramon John Hnatyshyn: Then he will know how Bourassa felt.


Charles Joseph Clark: With an aptness which Canadians who are concerned about the national unity debate should clearly understand, my colleague says that Premier Regan will know how Premier Bourassa felt, because Premier Bourassa was

April 13, 1978
The Budget-Mr. Clark
betrayed in every step and in every initiative he took by people in his own party.
The Minister of Finance could have met the challenges which were before him. He owed it to Canada at least to try to meet them. He could have produced the major permanent economic stimulus which is needed to create jobs in this country. He could have learned from his own experience of last October that half measures just will not work. They did not work in October; why does he think they will work now? We told him then that a two-month tax cut would not turn the economy around, and I tell him now that a six-month tax cut will not do so either.
Granted, there might be some small economic bump this summer. That might help the Liberals just a little bit during the only period in which they are interested, the period of the election campaign. I hope that we do get that economic bump, I hope there is some effect. But, sir, I repeat this because it is the fundamental weakness, not only in this legislation, but in the thinking of this short-term, part-time government. The impact of this measure stops when it is needed most. We have a stimulus that stops when a stimulus is most needed. We have a job creation measure that stops in October and November when the need for jobs in this winter country is at its most acute.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The minister says he cannot afford a larger stimulus. He said the government cannot find another nickel to cut. They could not find it in AECL, they could not find it in "Air Otto"-I see the flying minister has temporarily left the House-they could not find it in the advertising programs that the Minister of Industry, Trade and Commerce (Mr. Horner) told the House yesterday he intends to bring in to encourage buying in Canada. Get this, the Government of Canada intends to run advertising programs to persuade the Government of Canada to buy in Canada!


Some hon. Members:: Oh, oh!


James Aloysius McGrath: That is the only way he can reach his colleagues.


Charles Joseph Clark: It may well be that the impact of this budget upon the native province of the temporary member for Crowfoot indicates that the only way he can reach his colleagues and influence their deliberations is by advertising.
I say to the minister that I could find some saving in AECL, and I could find some savings in the advertising programs of the government, as well as in the extravagant travels of the Minister of Transport (Mr. Lang) and in a number of other areas which I spelled out for the minister before, and which I will spell out again later in this debate. I could find some savings also in the fact that if we get more Canadians to work in this country, we will get them off the unemployment insurance rolls.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I just cannot conceive of how a modern government which dares to call itself liberal, which dares to follow its tradition of building in this country, would prefer to spend on unemployment insurance rather than to spend on jobs, this from the party of C. D. Howe, from the party of people who have encouraged Canadians in the past to go out to build and to work. The tradition of the builders in the Liberal party has been put in the ground and buried by that party which prefers to encourage Canadians to go on welfare rather than to go to work.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We need a tax cut of at least $2 billion now. It should be a permanent tax cut, not some kind of six months' wonder. It should be a tax cut which gives Canadians back some of their money rather than just lending it to them for 180 days.
We propose just such a permanent measure, putting money permanently in the hands of lower and middle income Canadians, people who are most likely to spend that money quickly, to spend it in Canada, to spend it on Canadian goods, and by spending to allow Canadian plants and industries, which are now operating under capacity, to produce more goods and to go out and hire some of that army of Canadian unemployed. That is what we need to create jobs in this country now.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Among other advantages, that proposal is guided by an elemental sense of social justice. The Trudeau government offers the rich the same kind of stimulus as it offers the poor. Indeed, in many ways this minister offers the rich more. Under its proposal, the cost of Cadillacs will go down but the price of food will remain the same.


Some hon. Members:: Shame!


Charles Joseph Clark: That shows the priorities of this government. Among other dangers, the failure to bring in a budget which would be a document of economic leadership has added to the great sense of uncertainty about our future in this country. That is not the first time, because if this government is expert in anything, it is expert in uncertainty.
[ Translation]
One of the basic causes of the problems which occurred during the Trudeau years was the government's refusal to consider the provinces, business and labour as true partners in our society. It refused to consult the unions before deciding on the Economic Council of Canada for the post control period and it refused to clearly state the regulations which would allow oil companies to expand their exploration in the north. It refused to divulge to the provinces the outline of its national policy, which would have given the provinces a basis on which to develop their own plans of action. It even refused to publish the new Bank Act. We know, Mr. Speaker, that the new act is drafted and ready, but the Trudeau government continues to hide it. Why? That is true and the minister knows it is.
April 13, 1978


Joseph Jacques Jean Chrétien: It has not yet been translated into French.


Charles Joseph Clark: It is available. The minister can answer questions asked in the House on the policy, on different aspects of that piece of legislation. I asked a question regarding the directions. I asked the minister to tell Canadians, here in Parliament and throughout the country, if the government intends to include caisses populaires and credit unions in that legislation. He refused to answer. He replied that we had to wait and study the legislation. The first time he said it was not for the House of Commons. Now, his excuse is that it is not translated. This is a matter which involves the government's policy and we are wondering whether the Trudeau government intends to include the Quebec caisses populaires and the credit unions in the Bank Act.


Joseph Jacques Jean Chrétien: What are your views about it?


Charles Joseph Clark: My policy, as leader of the opposition, is to force the government into putting an end to the practice of hiding the truth from Canadians and, when it has a policy or a bill it must say so here in the House of Commons. I am sure, Mr. Speaker, that the bill is hidden somewhere, not because of the translation, but because the government intends to act against the interest of the Quebec people and caisses populaires. They want to keep their intentions quiet until the election. The impact will be serious on the province of Quebec, and it is irresponsible on the part of the Trudeau government to hide the truth about its intentions from Quebecers.
The minister wants to speak now. Perhaps later, since he is in the frame of mind to speak now, he could indicate exactly what the government intends to do about the Quebec caisses populaires. The bill is ready, he said so today, the policy is very clear on the matter. Why then should the policy be kept locked up, why does the minister refuse now to tell the House of Commons, Parliament, the Quebec people, the truth about the policy of the government? Why hide it? That is the question I now put to the government.
It must be remembered that it was that same Trudeau government that condemned the controls program, and then adopted one. Clearly, the Trudeau government cannot be trusted. Today the government must reveal its intentions with regard to the caisses populaires. They are threatened now by the government; the government should at least put out the bill: it is ready and only awaiting translation. It cannot be kept hidden any longer and serve to betray the Canadian people as it was betrayed in the case of the controls program.
This budget and this budget debate demonstrate the fundamental difference between the Liberal party and the Progressive Conservative party, in our view of the country, in our view of the economy, and in our view of the purpose of the budget.
The Budget-Mr. Clark
They regard the budget as a place to bluff. We regard the budget as a place to build.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Instead of a temporary tax cut which stops when unemployment becomes acute, we would have introduced a permanent tax cut which would have created jobs into the foreseeable future. Instead of ignoring Canadian small business, which is the backbone of the Canadian enterprise system, we would have introduced a tax credit to a limit of $5,000 per year to encourage Canadians to invest in Canadian small business.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Instead of six months' help in the summertime in Atlantic Canada, we would have combined the permanent stimulus of a permanent tax cut with the introduction of long term tax contracts to draw strong industry to build and to stay in Quebec and in Atlantic Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Most important, instead of a budget which takes such a limited view of Canada, which sees Canada as a six months' place, we would have used this budget to start the process of building a national development policy for Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: This budget fails completely to give Canadians any sense of national direction. In that respect, I regret to say it is a budget very much in the Trudeau tradition. We have had a full decade of such budgets, budgets which tinker with the tax rates but offer no framework, no direction, no development plan on which Canadians can count and in which they can lay their own plans and set their own priorities. There is no excuse for any of that full decade of drift, this full decade of opportunities lost for Canada.
This minister has even less excuse, because at the first ministers' conference in February, the provinces of Canada, which take their responsibility by and large much more seriously than this government does, gave the government a lengthy list of positive, constructive proposals which could form part of a new national development strategy. Thanks to the premiers, the minister had plenty of raw material from which to draw. Yet this budget does not implement and does not even deal with a single one of those proposals. It merely confirms that, having succeeded in getting the government a few hours of television time, the first ministers' conference is as dead as a dodo. In terms of a policy instrument, it has been a deliberate waste of the time of the premiers of Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Had this budget been ours, it would have spelled out a comprehensive plan for national development, not for a few months but for at least the next five years. As well as permanent stimulus, it would have spelled out the means we

April 13, 1978
The Budget-Mr. Clark
would take as the government to reduce significantly government's demands on the productive sectors of our society. I have presented this proposal to the government before. It is a proposal including sunset laws, which this nation very urgently needs. It is a proposal involving new means of budgetary control; a proposal involving deregulation; and a proposal requiring a tough-minded review of Crown corporations by this government which has more Crown corporations than it can count.
The Prime Minister talked about it being a tough world. Well, it is a tough world. He should stop just talking about that and begin to develop policies which recognize that we have to compete, grow, and build in a tough world. It is clear that the basis of any national development plan that we have to bring in, and certainly the basis of the plan we intend to bring in when we form the government, would be to build upon the great natural strengths of this country, build upon those strengths where we can become competitive in the world. Not just competitive, we should build upon those strengths where we can become leaders in the world. That used to be a concept of Liberal governments. There was a lot wrong with C. D. Howe, as the right hon. member for Prince Albert (Mr. Diefenbaker) will remember. There was a lot wrong, but he was a man who believed in making Canada a leader in the world. That used to be a tradition of the Liberal party. It is no longer. That tradition has gone from the Liberal party and it sits now in the Conservative party.
Some hon. Members; Hear, hear!


Joseph Jacques Jean Chrétien: Who is C. D. Howe?


Charles Joseph Clark: The minister indicates not only has he forgotten the traditions of C. D. Howe, he does not even know who the man was.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I suppose we cannot expect much more vision backward than we find forward from a minister of the Crown who brings in an economic policy for only six months.


Miss MacDonald:: Does he remember Laurier?


Charles Joseph Clark: I hope he remembers Laurier. Laurier was the prime minister who said that the twentieth century can belong to Canada. The Progressive Conservative party is the only party in Canada today which can begin to realize the promise of making the twentieth century ours.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I should like to enumerate some of the natural strengths upon which we can build as a country. For example, Canada already is one of the world's major producers of food. We can build on that strength by increasing our investment in food products and processes; by developing the storage vessels and processing capacity which our fishermen need to get the most out of the 200-mile limit; by aggressively seeking markets
[Mr. Clark.)
for our dairy products in places like Britain where cheddar cheese is actually being rationed today. We would stop talking about the OPEC crisis of the past. We would start acting on Canada's energy potential for the future by accelerating development of tar sands and heavy oil deposits, by getting on with tidal power.


Mr. Gillespie:: Look at the budget.


Charles Joseph Clark: I am pleased to hear from the hon. Minister of Energy, Mines and Resources (Mr. Gillespie). He is the minister who is left at home when Canada goes abroad to negotiate treaties in his domain.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: As I indicated, we would do that by getting on with tidal power and by moving forward on the construction of a reversible pipeline to Atlantic Canada. We would acknowledge the success of a company in this country like Northern Telecom, in becoming a major exporter of communications equipment. We would build on the strength of that industry, especially its expertise in long distance and remote area communications. We would use the billions of dollars Canada is going to have to invest in fishing, defence and energy vessels. It would be used as the base for a world scale shipbuilding industry in Atlantic Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: As the premier of Ontario has proposed, we would use our domestic need to improve rail services in the Windsor-Quebec corridor to assist our transportation industry to meet competitive world standards. We would end the atrocious situation at the port of Vancouver where, on average, 24 vessels are always waiting two to six weeks to load Canadian grain.


Some hon. Members:: Right on!


Ramon John Hnatyshyn: At the expense of farmers.


Charles Joseph Clark: We would recognize in our national development policy the fact that in the Middle East alone countries are planning to invest more than $200 billion over the next decade in infrastructure-in schools, in communications, in transportation and in housing. In this country we have companies like ATCO which have succeeded in this kind of world market despite the obstacles governments have put in their way. We would get behind more Canadian companies that have the experience and expertise to serve these markets.
The budget refers to research and development. By our debate in parliament some weeks ago, we forced the government to stop ignoring innovation in this country. But it is ironic to note what they count as an accomplishment. They have reinstated precisely the policy that a Progressive Conservative government introduced in 1961-the government of my colleague, the right hon. member for Prince Albert. A
April 13, 1978

Liberal government abandoned that policy as quickly as it could. We are glad to have it back; but bringing back the status quo in research and development is not enough.
One of the fundamental failures of this government has been the failure to recognize how important it is for Canada's research and development policy to become the basis of our ability to grow in the world. We have a serious problem-more serious, probably, than that faced by any other industrialized nation-in that so much of our natural research capacity is drained out of Canada to head offices elsewhere. That means that the specific intent of much of Canada's innovation policy must be to encourage Canadian scientists to stay at home and to encourage Canadian companies to build on Canadian strengths in a world that needs our innovation. The government has opened the door it closed several years ago. But there is no sense of direction to their innovation policy-just as there is no sense of direction to their economic policy.
That is the tragedy here. We have a nation of people who want to go to work-of provinces who want to cooperate as partners in economic growth-and of plants that are operating well below capacity. We are a nation that was once respected in the world, that was once a source of pride at home. Now we are a country whose Prime Minister tells its young to leave.


Some hon. Members:: Shame!


Charles Joseph Clark: This is a government which, in a decade, has debased our currency, divided our country and destroyed the natural confidence of Canadians in this country. They had an opportunity, in this budget, to begin to turn that around. But they are too old, too worn out, and once again they show themselves blind to the possibilities of this country.


Some hon. Members:: Hear, hear!


Mr. John M. Reid (Kenora-Rainy River):: Mr. Speaker, I want to say at the outset that I thoroughly enjoyed the speech made by the Leader of the Opposition (Mr. Clark). I felt it could have effectively been divided into two parts. The first part, and I think the most interesting in many respects, was the proposals he made to indicate how he would have cut taxes in the budget and how he would have cut services in the government. I think that is an appropriate position for a Tory leader.
The second half of his speech, however, was devoted not only to spending all the money he was going to cut but to spending that and more. It seems to me that the Leader of the Opposition is trying to have it two ways. He is trying to say that on the one hand he would cut taxes, cut services, and have a lean and hungry government, and that, on the other hand, there are a great many things they would want to do and a great many things that have to be done, and they are not only prepared to spend the $2 billion or whatever amount they are going to cut, but even more.
It seems to me the speech of the Leader of the Opposition would have been far more effective had it concentrated on one of those two themes, instead of trying to combine the two,
The Budget-Mr. Reid
which just will not wash. If I could give the Leader of the Opposition any advice, I would suggest that he pay some attention to the two themes he was discussing and choose one or the other, but not choose both, because that will make the next election much too easy for the Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. Chretien).
The Leader of the Opposition took the opportunity to quote some comments favourable to his side. I think it is only fair to indicate that there is a division of opinion in terms of the situation with the budget. Let me quote from this morning's Globe and Mail some remarks made by the chief economist of the Bank of Montreal. An article on the first page of the Business Section reports him as follows;
'It follows that in my view there is no basic justification for the Canadian dollar to continue to slide, and before long, one could expect to see some improvement,
' Jack Toten told a seminar on Canada in the world economy.
The article goes on to say:
The lower Canadian dollar, causing higher prices for necessary imports, does increase inflation in Canada, he said. 'Quite obviously, if we fail to hold down increases in wages and costs to something like those experienced in the United States, our position will once again deteriorate and the dollar will inevitably decline.'
He pointed out that jobs would be created in Canada as a result of the decline of the dollar, because our costs are too high. There is no indication by industry or labour that they would voluntarily lower those costs, so the market is doing it for us. I think we have to admit on balance that if we cannot sell what we are producing at high wages, we are better to produce what we can at a cost which is more reasonable in the world economy. That will put people back to work and get our dollar back to where it belongs and ensure that jobs are created.
In the same newspaper the columnist Ronald Anderson had some comments to make about the way the budget was perceived by the business sector of Canada. He said:
Reaction to the budget indicated that the private sector, by and large, regards it as an acceptable and responsible budget. It is questionable whether it would have been so regarded if the sales tax program had been more ambitious, with a federal cost of, say, $1.5 billion. Furthermore, provinces that are prepared to cooperate in a six-month program may not have agreed to a one-year reduction.
That seems to me to be eminent good sense. I think the Leader of the Opposition hit on a good point by accident when he commented that if you want to stimulate the economy by spending, you help people at the lower end of the income scale. I think the point is made explicit in the subamendment presented by the New Democratic Party. There is an argument to be made about how best to stimulate spending at the lower end of the income scale, however.
It is obvious to anyone who has looked at economics that the most regressive tax is a sales tax levied by the federal government, and more particularly a retail sales tax levied by a provincial government. I think we understand why those taxes are there, but if you were trying to stimulate the economy it seems to me the fastest, most expeditious, and easiest way to do it would be through the reduction of sales tax.
The important thing-and it is difficult for hon. members opposite to acknowledge it-is that this was done with cooper-

April 13, 1978
The Budget-Mr. Reid
ation from provincial governments. It was a joint economic effort, not an initiative of the federal government alone. It followed upon what was decided at the premiers' conference instead of what the Leader of the Opposition says, that it was initiated by the Minister of Finance. Let us give credit where it is due-to the provincial premiers and the provincial ministers of finance as well. It means that in Canada we have entered into a new era of trying to determine federal and provincial priorities together. This is a unique achievement, it is the first time, to my knowledge, that it has happened.
We should go further and point out to members opposite that this follows up the agreements which were reached when the House of Commons passed the federal arrangements bill that took a fair chunk of federal spending. This was turned over to the provinces without strings, and is surely a tremendous initiative in federal-provincial relations. I should also point out it is a substantial area of federal budgetary funds over which the Minister of Finance now has no control and is not able to direct.
I want to take a look now at some of the proposals which the Leader of the Opposition has produced in terms of cutting spending. The question of the dollar is a question in many respects of confidence, of how sound our economy is and how sound our policies are. Let us be frank; we have a problem in Canada in that the federal government has a policy and we have ten provincial premiers who may have different policies. Often it is difficult to coordinate these policies.
As Premier Davis said at the first ministers' meeting, it is very difficult for an investor to understand that he must deal with ten separate industrial policies. I think Premier Davis is right to point out that an industrial policy is not necessarily within the purview of the federal government but rather is within the purview of the provincial government.
What would happen if we had the policies as enunciated by the Leader of the Opposition and the official critic of the opposition? It seems to me that the first effect it would have would make the dollar even more unstable than it is now-


Ramon John Hnatyshyn: That is impossible.


John Mercer Reid: Why do I say that? I say it because the calculations which I have before me indicate that the programs of tax cuts and other tax measures which they have just suggested would appear-and I use the word "appear" because nobody can get a grip on them since they have been so unspecific-to cost in the range of $2.5 billion to $3 billion. They would seek to offset a part of this through a reduction in government spending.
I am sure it would be possible for a Conservative government, if it ever formed that at the federal level, to follow the example of Premier Lyon in Manitoba who has shown the way to destruction of social services by putting the burden of inflation on the backs of the poor. In Manitoba, I am told, if they do not have a display of at least 2,000 people on a regular day that it is a boring day in the Manitoba legislature. Those

members on the Conservative side should ask the hon. member for Churchill (Mr. Smith) just what the cuts have meant to his constituency and ask what it means for his chances of re-election.
It seems to me the deficit that is envisaged by the Conservative party would be enough to send the dollar scurrying down faster than anyone could anticipate. Let me give you three responses to this. First of all, the Canadian dollar exchange rate could drop sharply, leading to an accelerated rate of inflation through the price of imports. This would cause financial markets to view such an increase in the deficit as constituting irresponsible action. I emphasize the word irresponsible. The point is, as I quoted Mr. Anderson from the Globe and Mail earlier, that the business community, the private market, consider that the cuts which were made by the Minister of Finance to be appropriate under the circumstances. They further consider that the means taken to get that money quickly into circulation was appropriate, and done in as speedy a way as could be devised.
Secondly, if the money supply was not increased, and we are not clear at the moment just what the status of the official opposition is on this, the larger deficit would force interest rates up higher, hurting all private borrowers and increasing the cost of maintaining the public deficit now.
It seems that some of us were disappointed in the speech made by the Leader of the Opposition. From the build-up he received we anticipated he would come in as a knight on a white charger and be able to produce the necessary miracles from his hip pocket. We found no miracles, unfortunately. We did find a rather interesting stump speech which he was trying out on the House of Commons. He made a number of charges which I feel are totally irresponsible and not valid.
One of these charges deals with the question of the unemployment figures for women and young people. I am sure we all agree without question that this is indeed a very serious matter. In the comment which the Leader of the Opposition made in speaking of the high unemployment rate we have in Canada, he made a remarkable omission. He did not admit that from March last year to March this year some 305,000 new jobs have been created in Canada. This is a remarkable achievement for an economy which we all agree is not performing as well as we would like. I would go further and point out that that increase in the number of new jobs created in Canada is the third highest in the last 15 years. That surely is a remarkable record, Mr. Speaker.
If one wishes to discuss the economy and the budgetary problems, one has to put these things in proportion. Canada is in a unique position. A baby boom occurred in Canada. Those of us who pay attention to what is going on in local communities know that the result of that baby boom has moved now through the elementary system causing schools to be closed and along with that teachers are finding it difficult to get jobs. This lack of people coming into the school system is now beginning to affect the high schools, and the universities are planning for it. It is a remarkable phenomenon which is unique to Canada. So in the 1960's and 1970's the Government of
April 13, 1978

Canada threw the economy wide open to make sure there were as many jobs as possible available for these people coming into the work force. That tends to be the same principle we have in effect today.
It is also important to note, Mr. Speaker, that Canada has one of the highest participation rates in the work force by women and young people. That is a fact. If to admit these facts is an attack on youth and women in the work force, then I suppose anybody who looks at the facts is guilty of pointing out these embarrassing things.
It is important to recognize what is going on and, on the basis of those facts, to look for solutions. Let me take a look at the situation in terms of the labour force.
Canada's unemployment problem should be looked at in the context of the baby boom and the young people coming into the work force, and in the context of this not happening in the world economy as a whole. If we look at the Canadian record of youth employment from 1971 to 1976 we find that employment increased more rapidly in that period of time in Canada than in almost any other country in the world; three per cent per year on average in Canada; two per cent per year on average in the United States, and less than 1 per cent for the countries of Europe, and Japan. It is surely a remarkable record, Mr. Speaker. This is a record which the Tories would be well to recognize when they make their speeches.
Youth unemployment is a phenomenon which is not unique to Canada. The severity in Canada, however, is less than it is in the United States, less than it is in Italy, less than it is in France. It is the same as it is in the United Kingdom, and it is worse than it is in Japan and Germany. Not a bad record. If you measure this as a ratio of youth to adults unemployed you come up with a figure in 1977 of 2.5 in Canada and three in the United States. Certainly a creditable performance indeed. I would like to point out also that in terms of youth unemployment the money which the government is putting into Young Canada Works this summer amounts to direct job creation.
We all agree that jobs in the private sector, permanent, steady, well paying jobs, are the ideal. However, if you want to deal with an economic problem you cannot pull levers today that are going to have an effect further down the line in a year or two. It is often said that by the time you pull one of the major economic levers, what you get is a result within a year or 18 months. The problem is more urgent.
The government has moved smartly and quickly into the field of direct job creation. The programs we have initiated in Canada, and I stress the word initiated, are now being copied throughout the world. We have been innovators in dealing with direct job creation. That should be acknowledged by the opposition parties. I believe it would make their job much more honest and easy.
There have been tremendous gains in real income in Canada. Real personal income per capita in 1971 was $3,426. In 1977, and I am using a constant 1971 dollar, that had risen to $4,650. That means, after accounting for inflation, personal
The Budget-Mr. Reid
incomes rose by $1,224. That is a very impressive performance in anyone's income.
We always forget the international context. In the speech today by the Leader of the Opposition, he did his best to denigrate any external influence. He said it is a tough world out there, but basically we can solve all our problems domestically. If he takes that attitude, he does himself a disservice.
The Leader of the Opposition should cast his mind back to what was the turning point in modern world economic history, August 15, 1971, the day President Nixon took the world off the gold standard, the day he imposed wage and price controls in the United States. That basically was the day which signalled the breakdown of the Bretton Woods economic system that was constructed so laboriously after World War II.
We have not yet got a truly functioning, operating international economy. We have a system that has been patched together. Canada, as one of the countries so heavily dependent on foreign trade and the international exchange markets of the world, has suffered the most from this change.
If we do not take these changes into account, we really do not understand what happens. Canada, above all nations, is dependent upon world trade. We certainly cannot expect our economy to grow any faster than those of our competitors.
The Leader of the Opposition would have been wise indeed to have read the transcript of the President's address on inflation that was given yesterday. The President of the United States pointed out he was losing some $45 billion a year on oil imports. That means $45 billion in purchasing power is leaving the United States.
Our figure, now that we have become a net importer of oil, is about $2 billion a year. That money goes basically to the Middle East. Even more important, it is going into the hands of people who have no background in spending. By and large, there is a great gap between that money going out and being recycled.
The kind of money you could look forward to in past years to taking and recycling through our economy is no longer available to us in those amounts. This massive transfer of wealth is unparalleled in modern history. It has gone from the North American continent, the Common Market nations and Japan, what we call the western industrialized nations, to the Middle East, an area of tremendous political instability. That does not make anybody sleep well at night. It is an important factor we have to remember.
Who can remember the time in 1972-74 when there was tremendous world demand for North American food supplies, and when the growers of Australia, New Zealand and Argentina were virtually wiped out? In 1974 nobody protested the rise in food prices. We were all worried where the next supply would come from. Who can forget the droughts suffered in the western part of the United States and the western part of Canada?
Let me take it a step further. One of the most unique things that happened in the economic front in those days was the fact that for the first time the economies of all of the western world

April 13, 1978
The Budget-Mr. Reid
came together in synchronization. Normally the situation was that there were some strong economies going up and some going down. Now we are all in synchronization. In 1972 to 1975, we went up together, a single boom. We have gone down together since. We are all in recession together, and we are all fighting to get out. The amount of international cooperation which is required at the present time is not forthcoming.
I want to refer hon. members to an interesting article in the March 18, 1978, edition of the Toronto Star by Anthony Westell. He refers to an interesting speech made by a Labour member of parliament in Great Britain. He indicates that one of the problems facing the western economies is the question of moving the surpluses and deficits around. He makes the point that countries like Germany and Japan are desperate to create substantial surpluses in their trading accounts in order to have the funds necessary to buy the oil which they require to keep their economies going. What they are doing is deliberately, from self interest, and who can blame them, moving in this way. What it means to us and to North America is that this mad scramble for surpluses is forcing recession in a number of countries, particularly the United States which has the most grievous outflow of all. Let me quote from his column:
In short, in the scramble to earn enough in trade to pay for oil, developed countries are forcing each other into recession. They ought to realize what is happening and stop before it is too late.
He then quotes Mr. Lever:
'The surplus countries must not seek to impose, and the deficit countries must not accept, mutually injurious deflation with currency wars and lengthening dole queues.'
That is the fact of the matter. It is an analysis that makes some sense and indicates some of the substantial nature of the problems we face.
When I take you back into this little history lesson, I then come to the formation and effective action of the OPEC oil cartel. The increases in North America, the price we had to pay for imported oil on which we were all dependent, were massive. If western society has an Achilles heel anywhere, it is the way we use energy. Energy is North American society's Achilles heel.
Since World War II, our whole economy has been based in terms of cheap and abundant energy. Now we find that oil is no longer cheap, nor is it abundant. Two of the major terms on which we have based our economy have been demolished in one blow.
Perhaps it should be pointed out that the Arabs and the OPEC nations did us a favour. To some extent Canada and North American society at that time were living in a fool's paradise, thinking this could go on forever. Now we know it is not possible, that changes have to be made.
North American society, and Canada in particular, will have to go through a massive change. No longer can we base our economy on cheap and abundant oil. We have to re-examine the roots of this social and industrial policy, based on these two fundamental concepts. This is serious business indeed.

I would have thought the Leader of the Opposition would have dug a little deeper into what is going on and explained his view on these matters to the House. He cannot cavalierly dismiss them as being outside his purview or outside his concern.
The Leader of the Opposition had an opportunity to develop some interesting points and engage in a debate of some substance. He did not. He deliberately chose not to do that. I can certainly understand why. It would have forced him to change his views on a number of the points that he made.
I read with a great deal of interest the speech made by the hon. member for Waterloo-Cambridge (Mr. Saltsman), who always makes an interesting speech in the House of Commons. At this point I should indicate that I am one of those who are sorry to see the hon. member for Don Valley (Mr. Gillies) make the decision to retire. I can certainly understand the pressures he went through, and the reasons. He is another gentleman who has always had something interesting and of substance to say. I must say that in economic matters it is difficult to get substance in this House.
Let me deal with the point which was made very well indeed by the hon. member for Waterloo-Cambridge, namely, that the minister's forecasts were all wrong. I agree. I think there is no one who would agree more with that proposition than the Minister of Finance himself. If you take a look at the forecasting institutions in Canada you will find that in the sixties, by and large, their figures were accurate and could be relied upon. But if you look at the seventies, you will find that nobody's forecasting figures are worth the paper they are printed on.


Mr. Orlikow:: But nobody is as wrong as the minister.


John Mercer Reid: But the point I am trying to make is that the traditions and experience built up in the sixties which allowed the government, by and large, to run the economy reasonably well and to provide a remarkable number of jobs for the tremendous number of people entering the labour force, have all been wiped out by the changes which took place and which I have described, starting on August 15, 1971.
The old techniques no longer work. And if anyone doubts this let them take any of the major economic houses, and they will find that, by and large, the accuracy rate has dropped off substantially. What this means is policy makers are increasingly in the dark as to what is going to happen.
A perfect example is what happened to the mini-budget of last fall. Certain things were expected to take place as a result of the tax cut. It was expected that additional money would go into the consumer spending side of things. What do we find? According to the figures which are coming out, we find that very little of that money went into the consumer spending side. Where did it go? I think it went into savings. I think the bulk of it went into savings. So it strikes me that when you find personal tax cuts going into the savings side instead of into the spending side, although the concept is, in my judgment, virt-
April 13, 1978

uous for private persons but almost disastrous for society as we have constructed it, it makes no sense for the Minister of Finance to contemplate personal tax cuts at all. It makes no sense, either, in this economy for any party to advocate them.
It does make sense, though, to attack the retail sales taxes because this can exercise a direct and immediate effect not only in terms of consumption but in terms of the inflation rate. We do require these cuts in sales tax at the retail level in order to cut down the inflation rate caused by the devaluation of the Canadian dollar. One will balance the other.
I think the budget met a number of disparate points remarkably well and that both the minister and the provincial premiers deserve a great deal of credit for the action they took.
I want to deal with one last point. The last point I want to deal with is the question of where do we go, how do we go, from here.


An hon. Member:: Go Conservative!


Some hon. Members:: Hear, hear!


John Mercer Reid: It seems to me we have to look at a number of things which are rather foreign to the way in which Canadian governments, and I include the provinces, have approached the business of stimulating the economy. I have given the example of personal income tax cuts and its relative uselessness in current circumstances.
Take another favourite fiscal tool which was used with great success during the sixties. I refer to the corporation tax cuts. They do not seem to be effective any more, either. There are a variety of reasons for this, but I shall not enlarge upon them at this time. I am simply pointing out that two of the major engines of economic growth and stimulant in the sixties no longer apply as they did then.
I want to quote the hon. member for Waterloo-Cambridge who has given this matter some thought. He said on a television show:
It is fairly obvious that some profound change is taking place in our society and governments are no longer able to cope with this kind of change... It's an old society that is dying and there's a whole set of rules that we have to apply now and I don't think anyone is quite sure. In my conversations in the States I was very impressed with some young, bright people who had been brought into the Carter administration for the purpose of rethinking the economics and the kinds of things the government can do, and while they haven't come up with any solutions, all of them are pretty gloomy about the prospects and the abilities of governments to manage the economy in the way that was once thought possible.
If the hon. member is correct, that is a gloomy prescription for us all.


An hon. Member:: He is not correct.


John Mercer Reid: My hon. friend from Scarborough East (Mr. O'Connell) says he is not correct. I hope my hon. friend is right. But the conclusion we have to draw from his comments, and from what I have said earlier, is that governments will find themselves called upon to experiment with many new techniques, because the old ones are inadequate. New economic conditions are different. The crucial test of a budget, it seems to me, is whether or not the minister has experimented with
The Budget-Mr. Clarke
new techniques and used new techniques in a way likely to stimulate the economy to a meaningful extent. I believe the judgment of the Canadian people, of the provincial premiers, and of this House, will be that the Minister of Finance has done just those things.
I want to take a look at a last point, to run through some things I should like to see the government deal with, and I want to say that these apply not only to the federal government but to the provincial governments as well. Both levels of government suffer from the same symptoms.
First, all governments in Canada have limited fiscal flexibility. The western democracies, and particularly Canada, have all run substantial deficits over past years to meet the widening expectations of their people and, in Canada, to provide jobs for new entrants into the work force. As growth continues, this is not a serious matter. We could cope with it. But growth has slowed down and governments now find themselves in a fiscal bind. It seems clear we are not likely to experience the high growth of the sixties while we are in the process of transforming the economy. This is a consideration with which policy makers will have to deal. The tax policies we have developed at federal and provincial levels were useful during the sixties but are no longer so in the seventies. There has been a preoccupation with equity and redistribution in our tax system. Now I think we shall have to refocus, and look not only at those two principals-


Mr. Clarke:: Order! Mr. Speaker, I have a recollection that the hon. member for Kenora-Rainy River (Mr. Reid) began his speech well over 30 minutes ago and that, under the rules, there is a time limit of 30 minutes.


The Acting Speaker (Mr. Ethier):: I am sorry. The hon. member is quite correct. I have to tell the hon. member for Kenora-Rainy River (Mr. Reid) that his time has expired by almost four minutes. I regret that this should have happened. I will now call the next speaker.


William Hillary (Bill) Clarke: Thank you, Mr. Speaker. I hope hon. members opposite will forgive any sign of self-interest I might have shown in raising that point of order, but I thought the House had probably heard enough from the hon. member for Kenora-Rainy River (Mr. Reid).
I think it would be a good idea to start off by mentioning a few of the good points about the budget, because there are a few good points. It is a good news-bad news budget. We have already stated that we agree with the changes made in the research and development field. Write-offs with respect to research and development expenditures will be helpful. It is strange that it has taken Liberal governments 13 years to come back to the idea that we should be encouraging research and development expenditures. It was a Liberal government in 1965 which reversed a policy instituted by the previous Conservative government which allowed the very same 150 per cent write-off for research and development expenditures.

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The Budget-Mr. Clarke
I am sure that the changes in transportation policy will help the industry, and we welcome those changes.
In the energy field, fast write-offs and other special writeoffs for machinery and equipment and an increase in the depreciation write-off allowance will also be helpful and do their little bit toward getting the economy going again.
Coming from British Columbia, I am disappointed to note that the only mention of the mining industry, which is very important to British Columbia, was a statement by the minister that the government would keep mining provisions under review. Reviews will not help us very much. We need action.
I am sure that many Canadians, particularly older Canadians, will be glad to see that the government has finally bowed to pressure from consumer groups, particularly the Consumers' Association of Canada, supported by members of parliament, particularly members on this side of the House. The government has finally agreed that the rather harsh provisions of the Income Tax Act as they relate to registered retirement plans should be relaxed and that it should not now be mandatory for a Canadian taxpayer to purchase his life annuities before his 71st birthday. The flexibility provided by these new provisions will be welcomed.
The proposed revisions allowing free transfers between spouses for capital gains purposes will be helpful, as will free transfers of incorporated farms to children. However, none of the residents of my riding of Vancouver Quadra are farmers, and many of them will wonder why the government considers that their incorporated family businesses-or unincorporated-are not afforded the same advantage afforded to the farming businesses of Canada's great prairies.
I said there were some good points and I think that pretty well covers them. I would like to dwell for a moment on the bad points of this budget. The effect of the sales tax measure, increased business and so forth which will be created and about which I will be saying more in a few minutes, will amount to a change of less than one-half of one per cent in the unemployment rate. It is clear that we need some program to increase productivity, and in the opinion of hon. members on this side of the House the proposed measures will not do very much. There is absolutely no sign that the government plans any measures to control its expenditures. Without that control the measures contained in the budget will perpetuate the deficits we have had, and debt and interest will mount year after year. It is clear that this budget contains inadequate stimulus for the economy.
When we consider both the good and the bad things in this budget, we might ask whether the government cares about whether its effects will be good or bad. It seems clear that the government does care to a certain extent because I have here a list of the bills introduced by the government since the beginning of this session. Up until the end of February, which covers about four and a half months of this session, 26 items of legislation were introduced. Over five months, that would be an average of five pieces of legislation per month. After February the government felt it might be going to the people and that it should show a little more concern, so in the month

of March 11 pieces of legislation were introduced in the House. In April, up until yesterday, seven pieces of legislation were introduced.
Some might congratulate the government for introducing all that legislation and say that the government is demonstrating forward thinking, but if we look at the list of legislation, we find that the government's forward thinking extends only to the date of a proposed election. For example, what does the government intend to do with Bill C-28, the amendments to the Public Service Staff Relations Act? I think we can safely assume that it will not be debated on the floor of this House before the election and that during the election hon. ministers opposite will traipse around the country telling taxpayers of their intention to pass that legislation, telling them what a great team they are, asking why they should not be re-elected and telling them to forget about the bad things they have been doing for the last ten years.
Another bill which has "election" written all over it is the bill dealing with a public referendum on questions relating to the constitution, Bill C-40. I am sure government ministers will be telling voters what good fellows they are and how well they will do in the next little while. I must confess that hon. members on this side will be doing the same thing in support of our policies but, thankfully, we do not have the record of the government opposite to drag behind us. I can assure hon. members opposite that voters will not forget the last ten years. They have been fooled before by this government, but they will not be fooled again. There are a few items on the list of legislation I have in my hand which indicate what the government will be telling us in any coming election campaign.
As to whether or not the government cares, I would like to refer to the employment tax credit bill which was passed in this House with the co-operation of all opposition parties within one day, which is a very unusual happening. That day was January 26, nearly three months ago, and we are told that there is no sign of the effective date of that tax credit program. The forms are not ready. The government is in disarray, and nobody knows when the program will get started.
The Bank Act is another example of the procedures adopted by this government. The Bank Act expired in 1977. It was extended for, I think, nine months, and it has been extended for another year. Perhaps it will be extended even longer if the House is not in session during the month of March, 1979. What we need is some certainty so that businesses and individuals will know what the government expects of them and they can in an orderly fashion shape their lives and make their own plans. However, the government has presented no measures to stimulate the economy, to make people confident in the government, to stop them from taking their capital and fleeing to other countries to invest, or taking their expertise to other countries. How foolish is it, for example, to have Canadian expertise in building housing for residents of the U.S.A.? Why does the government think that Canadians are saving at a greater rate than ever before? Of course, it is because they do not have confidence that the government will protect the
April 13, 1978

value of the dollar or the value of any investments they might make.
I want to say something about the past policies of the government, since the government likes to defend them so well, to see how they have affected our country recently. Yesterday we saw the cost of living figures rise again. We found that the increase in the Consumer Price Index based on year over year was 8.8 per cent, and we are now in a position where something that cost $100 in 1971 now costs $170.08. The most notorious rise in prices is to be found in food. The index on fruits and vegetables stands at 226.9, and on housing the index for fuel and utilities stands at 221.5-hardly figures which indicate that any of the government's policies have worked. They say: "We have the policies, but you fellows do not have them". We have the proposals and we are expecting very soon to be able to make them into policies. Clearly the policies that have been devised by those fellows opposite have not worked, and there is no way one can say that the figures I have quoted are the result of any kind of good policies.
Yesterday we had cost of living figures. On Tuesday of this week we had the latest figures on unemployment. Total unemployment in Canada stands at 1,045,000, which means a rate of unemployment of 8.6 per cent. Youth unemployment stands at 16.1 per cent. Can the government tell us what great policies they have and how their economic policy has created new jobs in Canada? They say they have created 330,000 new jobs. I say, how nice! It would be wonderful were it not for the fact that there was an increase in the labour force of 432,000. What does that mean? It means that job creation has lagged behind the labour force growth by 102,000 people. Naturally the number of unemployed and the rate are on the increase.
I should point out at the same time that because of the faulty economic policies of the government, not only have the new jobs not kept pace with the new members of the labour force but employment in manufacturing has fallen by some
12,000	through lack of confidence and lack of use of the capacity of industry, thus further aggravating the problem.
What we need is some confidence in the government, as 1 said earlier. How are we going to get it? Let us have a government that is willing to bite the bullet, to use the old expression. Let us have a government that is ready to put the lid on expenses. The President of the Treasury Board (Mr. Andras), in introducing his estimates this year, took great pride in announcing that the government was cutting down on the rate of increase of government expenditures. You have to stop to think about that statement for a minute because it sounds good, but what he was saying is that the government is not spending as much this year as it spent last year or the year before. All that is coming down is the rate of increase. That might be a step in the right direction if it were not for the fact that the annual growth in the GNP will not be as large as the increase in the rate of growth in government expenditures.
Every time we try to suggest some place where the government could cut down on its expenditures, the government gives
The Budget-Mr. Clarke
us a reason why that cannot be done. They have the facilities over there to determine what the priorities should be, and they are the ones who must make the decision about where they are going to trim. It is impossible to continue spending at an ever increasing rate of deficit. The country will not stand it, the people will not stand it and the economy will not stand it.
The result of the continual policies of overspending and deficit financing by this government over the past ten years can surely be seen in the present low value of our dollar. They call it the floating dollar, and they ask what is wrong with a floating dollar, but a sinking dollar is pretty awful. Today our dollar compared with the U.S. dollar is at a lower point than it has ever been in my lifetime. Not for 45 years has the dollar been as low as it is today. There is no way in which the government can explain away the present level of the dollar compared with the U.S. dollar. The present situation does not even reveal the total problem, because we know that the international economic community does not favour the U.S. dollar very much either and that in relation to the currencies in other industrial countries, such as Germany, Switzerland and Japan, both the Canadian and U.S. dollars are in very bad shape. It is the government that is to blame, and I do not know how they will try to explain that away if we go into an election campaign soon.
The national policies which the government is giving us and which do not work have their effect in British Columbia as well. Every time I go to my riding in Vancouver overlooking English Bay I see 15 ships. The Leader of the Opposition (Mr. Clark) said today there were 24 ships in the harbour. In any event the figure does vary slightly, but I have never seen less than 15 ships at anchor in English Bay waiting to pick up cargoes which this government cannot get to port. Why can they not move the grain? We do not know. A few years ago they told farmers not to grow more grain because there was too much. Then they turned around and said they needed all the grain that the farmers can grow. Now that the farmers are growing lots of grain, where is it? The minister responsible for moving it to port is saying that it is being moved at the right levels.


Otto Emil Lang: No, at record levels.


William Hillary (Bill) Clarke: I wonder what the growers of that wheat are saying. What about the ships lying at anchor? I am afraid it is my friends on the farms in the prairies and my friends back home in Vancouver Quadra who are paying for the storage of grain and for those ships at anchor in the harbours. What we need is someone who will take the grain from the farmers and arrange to move it in orderly fashion down to where the ships are. The minister is saying they are doing it in orderly fashion, but I ask: who arranged the ships? I ask the minister to answer this question.


Otto Emil Lang: I am delighted that the hon. member allows me to answer the question because he missed my interjection. I want to ask him whether he recognizes that while there are some ships waiting in Vancouver because of difficulties in getting grain there as well as weather conditions, grain is being

April 13, 1978
The Budget-Mr. Clarke moved at record levels and we are almost certain to get a record level of exports in this country. The difficulties are there because of the fact that, in trying to achieve those record levels, we are pushing the system to the full. The hon. member might reflect back-and I wonder if he knows about it-to February of 1961 when his party was in power and when ships were waiting 28 days. At that time the exports were about half those we are achieving this year.


William Hillary (Bill) Clarke: I am glad to be able to answer the minister's question because I need the practice. I realize that what he says is correct, but obviously the minister does not understand my complaint. I am glad that the farmers are producing grain at record levels and I am glad Canada is selling grain at record levels. All I ask is why can the government not get the same rate of ship loading as the rate of grain arrival? What is the point of having ships lying at anchor if the grain is not there, although I admit that it adds to the seascape.
The government is always asking us what we would do. What do we need in this country? We need an economic stimulus, and we have been saying that for a long, long time. The hon. member for York-Simcoe (Mr. Stevens) told the government in a very interesting speech yesterday of about one hour's duration, and earlier in another speech of about three and a half hours' duration, quite a few things they should be doing and things we would be doing. The essential thing which the hon. member for York-Simcoe has urged upon the government is meaningful permanent tax cuts. I do not know how it can be said any more clearly than that. There is a minor temporary tax cut in the budget. It is going to be shared with the provinces. In his statement the minister said we needed action on this now. He said:
Any further stimulus should obviously be fast-acting. It should encourage consumer spending, not more spending by government.
I agree with that, but I cannot see how spending will be increased by a reduction in the sales tax of 2 per cent, except for government spending as it will be contributing money to offset the reduction of revenue at the provincial level. People who are spending in Canada will spend their money regardless whether there is a 5 per cent sales tax or a 7 per cent sales tax; that is not where the judgment is made as to whether a person is going to buy.
The hon. Leader of the Opposition made reference to the saving on a purchase of a Cadillac. That is a dramatic example. Not many Cadillacs are sold. Certainly on a large purchase like that, there will be a large saving. We are talking about everyday spenders, people who are spending money on essentials. We are not referring to the purchase of food, because that is tax free. We are referring to the other things they are required to buy in their ordinary lives. This kind of stimulation of the economy will not have a permanent effect.
It is asked, what can be done to balance the budget? When a $2 billion tax cut has been given away, it is necessary to increase the revenues on the other side and/or reduce expenditures. There are only two sides to a balance sheet, simple

debits and credits. Because I am an accountant, perhaps I understand it better than others. If credits are to be reduced by giving tax cuts, then we must increase our revenues. We could put a goodly number of those 1,045,000 unemployed people to work. We know there is an 18 per cent under productivity factor in our economy and our productive facilities. If those people are put to work, instead of contributing to the $2 billion deficit in the unemployment insurance account, they will become taxpayers and will contribute to the general revenue of the country. That money does not just go out once and end up there. There is a multiplier in the economy of Canada. When $2 billion is sent out into the economy, it is spent time and time again. That creates more jobs because there are more demands, needs and so on. I am not suggesting any funny money theory when I express that proposal, but it should be obvious to anyone who has studied the economy that it works in that manner. A step in the right direction would be to stop overspending in the unemployment insurance account by putting people back to work.
Many years ago in the United States when there was a tremendous tax cut of $11 billion, at the end of the fiscal year when the revenues were totalled up it was found that revenues were exactly the same because additional taxes paid by the citizens of that country had filled the gap of the $11 billion tax cut.
The Leader of the Opposition referred to some of the policies of our party. I do not think I need to repeat them. We heard the hon. member for Kenora-Rainy River (Mr. Reid) say that he did not understand or agree with what the hon. Leader of the Opposition said. That hon. member seemed to think the rules had changed and therefore it is all right for the government to overspend, have huge deficits and so on. Also he indicated that the government was not at fault, that circumstances had changed. We cannot agree with that and Canadians will not agree with that. They want measures to get Canada working again.
We require a little honesty from the government. I should like to remind hon. members opposite about some of their campaign promises made four years ago. How can people have any confidence in a government like that? A promise was made to Toronto regarding a $30 million waterfront park. Perhaps that won a lot of votes, even a few seats in that area. I wonder if the people of Toronto will think of the park which they did not receive when the next election rolls around. What about the statements of the Prime Minister (Mr. Trudeau) in 1974 during the same election campaign, when he campaigned against controls and 15 months later instituted a lengthy program of controls, which hopefully we will start to get out of tomorrow? Another 1974 campaign promise was that there would be aid to cities for rapid transit. I have been to at least half a dozen cities as a member of a special committee sent out by my party since the 1974 election. We find all across the country that every promise to cities of aid for rapid transit has been broken. How can we have confidence if the government behaves this way, overspends, breaks promises and does not do what it indicated it would do?
April 13, 1978

The leader of my party said it well today. Perhaps he said it somewhat better once or twice in other forums. In the remaining minute or two, I should like to refer to the five points he mentioned. Stop hiring in the federal public service. It is not that we are going to kick anyone out, nor that we think the public service is not doing a good job, but we think the public service has too many employees. They are tripping over themselves. For three years we would impose a freeze on hiring by the public service, and by normal attrition that will save
60,000	jobs at the end of that period.
Also my leader said we should turn back to the private sector Crown corporations like Petro-Can, Eldorado Nuclear Ltd. and Northern Transportation Ltd. There is an enormous amount of money involved in these Crown corporations, most of which do badly. Many of them no longer need the comfort of being owned by the government. They could be and should be turned back to the private sector.
Cutting back on federal regulations is another important point, especially in the manufacturing and mining industries. In particular, today small business is facing difficulties. With regard to cutting down on unnecessary government advertising and consulting, it is well known that the public service uses consultants or contract workers to circumvent the man-year limitations which are put on it. The most important point is the strengthening of parliament's power to control spending by introducing sunset laws and restoring parliamentary control of estimates.
The estimates will be ordered out in a few days. The possible consideration which can be given to the estimates in committee is appalling. The second report of the Standing Committee on Public Accounts was tabled in the House this week. It shows many of the problems regarding the estimates, particularly those of Crown corporations.
I have referred to the unemployment numbers in general. I have some notes regarding the effect on British Columbia, but I see my time has expired.


The Acting Speaker (Mr. Ethier):: Order, please. It being six o'clock, I do now leave the chair until 8 p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS The House resumed at 8 p.m.
Alastair William Gillespie: Mr. Speaker, on entering the debate this evening I want to concentrate on a number of what I think are very important aspects of Canadian life, the budget and the economy. In particular, I want to show how some of the economic measures in the budget reinforce Canadian energy policy, and how Canadian energy policy reinforces Canadian economic security.
The Budget-Mr. Gillespie
Future economic security is going to depend upon the energy decisions we take now, and how we take them. It is going to depend upon the ability of the federal government to work with the provinces and to take decisions with those provinces. I hope to show in the course of my remarks the kind of progress we have made in this country toward that objective of taking big decisions now, and taking them in co-operation and conjunction with the provinces.
I should like to go back a little bit, about four years ago to January, 1974, when the OPEC nations raised the price of oil. Oil represents the single most important energy source in this world, and the OPEC nations raised the price of oil by four times. The economies of the western world have never been the same since.
Almost immediately the g.n.p. growth and the economies of the western world slowed down, prices rose, inflation became endemic, unemployment increased. The Canadian economy was no different from any other. It too was affected, notwithstanding the fact that our economy depends more than most other nations on export sales. For close to one half of all the goods produced in Canada are exported. To put it another way, close to one half of the goods we produce depends upon the health of economies outside Canada to purchase Canadian production.
The Canadian economy has suffered notwithstanding that fact, but it suffered less, not more, than the economies of other countries. I believe our experience with the performance of the Canadian economy, where it has in effect, in terms of g.n.p. growth, outperformed by a factor of two the OECD countries since 1973, is very significant. Equally, I believe the fact that since that massive price increase we have had less inflation than the OECD rate of inflation is also a considerable achievement as far as Canada is concerned.
To listen to members of the opposition and their leader one would think they had not read the figures. Has anyone in this House heard the Leader of the Opposition (Mr. Clark) recognize the importance of that Canadian achievement against that kind of international background? He has been silent on that.
The other important aspect of that OPEC oil price increase is the fact that it involved a massive transfer of resources from the consuming nations to the producing nations-from the western world to the OPEC nations. Again, Canada was no exception. But has the Leader of the Opposition addressed himself to this central fact of international life? Has he addressed himself to this central fact of the international economy? No, he has avoided it, as he has avoided virtually all the central facts with respect to the international situation. I listened very carefully and he did not once recognize the interdependence of the international trading system. He has not recognized that the health of the Canadian mining industry depends on the health of the consuming economies of the countries that buy Canadian mining products. The Leader of the Opposition has a very large blind spot. Other people, less

April 13, 1978
The Budget-Mr. Gillespie
kindly disposed, would ask why the Leader of the Opposition sells Canada short.


Mr. Stanfield:: Because of the government.


Alastair William Gillespie: Mr. Speaker, Canada's oil import bill was just a fraction over $1 billion in 1973. Last year it was about $3.5 billion. Had it not been for the extension of the pipeline from Sarnia to Montreal, our oil import bill would be running at about $5 billion per year.
Since 1974 the United States has had the same problem- indeed, a gigantic hemorrhage might be the way to describe it. Before the OPEC increase the oil import bill in the United States was around $7.5 billion per year. Last year it was well over $40 billion. The jump in the value of oil imports for Canada has hurt the Canadian balance of payments, but for the United States it has been a disaster. That $41 billion-plus for oil imports by the United States has affected the value of United States currency in world markets. The United States secretary of the treasury cites this as a major reason for the fall of the U.S. dollar. Unfortunately, it has also contributed to the decline of the Canadian dollar. International experts would ask, when the Canadian economy is so dependent on the United States, why would we not expect an adverse effect on the value of the Canadian dollar?
There was another important message that the OPEC nations conveyed. The first message was that the era of cheap energy was over. The second message was more ominous. They said, "Don't count on us for your future energy supplies." Some of the OPEC nations tightened the tourniquet on the life blood of the western world. I refer to the Arab OPEC nations which cut off a number of their customers, including the United States. That action underscored the position of the OPEC nations and the vulnerability of the economies of the western world. That message, "Don't count on us for your future energy supplies," has been restated many times.
It is against that background that Canadian energy policy has been developed. Two years ago we set forth as the objective of Canadian energy policy to reduce our dependence on foreign oil imports. We put a strategy in place to bring that objective about. The strategy had three basic elements. First came effective conservation measures. There were two others, both of which are part of the replacement. The first is to find substitute kinds of energy indigenous to Canada to replace foreign imports. I am referring, of course, to natural gas, coal, nuclear, hydro, tidal power and other renewable forms. The third main element was to develop our own indigenous supplies of oil, particularly the non-conventional sources-the tar sands and the heavy oils of western Canada.
I believe that we have made a good deal of progress in implementing this strategy. Let us consider conservation. Last year, for example, our record was roughly a 3.3 per cent annual rate of growth, which was perhaps close to one-half of what it had been prior to the energy crisis caused by the OPEC nations in 1973-74 and on the target which we set of less 3.5 per cent annual rate of growth, a target which we hope

to be able to reduce to 2 per cent on an average in the 1980's and hopefully, eventually, to a zero rate of growth per capita.
The International Energy Agency has commented on the Canadian conservation program and described it as one of the best conceived and most comprehensive energy conservation programs in the world. They have, however, criticized one aspect of our policy on conservation because our oil prices have not risen to the international price. They have argued that if we had moved our prices up faster we could have reinforced Canadian conservation objectives. We recognize the merits of that argument. Clearly a faster and higher price would have had a beneficial effect on conservation, but in Canada we tried to balance the conservation objective with another, which is to maintain economic activity, to maintain the competitive advantage of Canadian companies and to sustain the employment and job-creating atmosphere in this country.
I think the record will show that we have been successful in this. At the present time we have met our energy conservation target, but more than that we have more exploratory and development drilling in western Canada than ever. There is not one spare drilling rig available. At the same time, there are more people employed in Canada then there were a year ago-
330,000	more.


Some hon. Members:: Hear, hear.


Alastair William Gillespie: Did the Leader of the Opposition once mention that there are 330,000 more Canadians at work in this country? Did he once suggest that this country was moving ahead of other nations? Did he once refer to the dynamism which would provide 330,000 jobs in one year? I listened very carefully, Mr. Speaker, and he implied the reverse-that there were fewer people at work in this country than a year ago.
I believe we have made a lot of progress on the second thrust of our energy strategy, which would use every indigenous source of energy to replace foreign oil imports. I believe we have been able to do it because we have been able to work out with the provinces a co-operative approach to the development of our massive energy resources. Was there one moment when the Leader of the Opposition suggested that the Canadian government had been successful in working out massive projects? He once talked about federal-provincial co-operation, but he does not now.
One is left with the impression that he does not want to draw attention to the successes of the federal government in working out co-operatively massive projects and an economic plan for this country. He does not want to draw attention to the success of the first ministers' conference. He does not want to draw attention to the fact that the major budget provision of the Minister of Finance (Mr. Chretien) with respect to the sales tax arrangement was worked out co-operatively with the provinces. He does not want to draw attention to the fact that
April 13, 1978

many of the major energy projects, which I am going to mention, have been worked out co-operatively with the provincial governments.
He does not want to talk about the maritime energy corporation, a corporation which, as the hon. member for Halifax (Mr. Stanfield) knows, offers the people of the maritimes an opportunity they have never had before, an opportunity to work together with the federal government to bring on massive new projects which by themselves they could not afford. For example, an integrated electrical grid for the maritimes which people have talked about for years can now be a reality. We have agreement on a maritime energy corporation. We have an agreement with respect to the terms of reference, the operating and planning of an integrated maritime electrical system, the management, financing and construction of new generation and transmission facilities, the buying of power and the selling of surplus power. I believe that this particular corporation offers the people of the maritimes an opportunity to be sure of getting the power they need at the lowest possible cost.
The decision of the maritime premiers and the federal government to move forward with phase II of the Bay of Fundy tidal power project is yet another example of the kind of federal-provincial co-operation that I am talking about, but not what the Leader of the Opposition is talking about. He is not talking about these things to the Canadian people because he recognizes them as strengths, as successes of the federal Liberal government.
He has not referred to the conservation and the renewable energy projects we have worked out with the province of Prince Edward Island. He has not talked about the exciting new Cape Breton Island coal mine development project for the Donkin mine. He has not talked about the agreement with the province of Newfoundland for the creation of the lower Churchill Falls development corporation to develop the massive potential of the lower Churchill Falls, the 2,000 megawatts of power which is spilling out over the rocks and into the sea. He has not talked about that, Mr. Speaker, because he does not want to draw attention to yet another successful enterprise of the federal government with the provinces.
There are a number of other major projects which will assist Canadians to become less dependent on foreign oil. I am referring to the Canada/U.S. development of the emergency oil storage in Wabana, Newfoundland and in Canso, Nova Scotia, presently before our two governments. As well I am referring to the Petro-Canada activity off the Nova Scotian shelf and off the shores of Labrador. He has not talked about those Petro-Canada activities and he has not talked about the fact that, if it was not for the leadership of Petro-Canada, one would not see the kind of study that is taking place right now in Quebec and the maritimes with respect to moving western gas to the maritimes.
Hon. members have not heard from the Leader of the Opposition about the liquefied natural gas projects which have been developing in the minds of those in charge of Trans-
The Budget-Mr. Gillespie
Canada Pipelines and Petro-Canada, projects which could move high Arctic natural gas to the east coast, perhaps through the terminal at Saint John, New Brunswick at Lor-neterm, or perhaps through another terminal at Canso.
Hon. members have not heard about these projects because the Leader of the Opposition wants to abolish Petro-Canada. That is what he has told the Canadian people.


Ramon John Hnatyshyn: Tell us about natural gas.


Alastair William Gillespie: Mr. Speaker, I think it is for the Leader of the Opposition to judge whether that is good politics in Bow River. I think the Canadian people will want to judge it bad policy for Canada.


An hon. Member:: Tell us about AECL.


Alastair William Gillespie: The people of Atlantic Canada will be asking: "And what about us? Who is going to do the drilling off our shores?" If it was not for Petro-Canada there would not have been any oil drilling last year off the Nova Scotia shelf.


An hon. Member:: The government relies on Alberta.


Alastair William Gillespie: The Leader of the Opposition quite clearly wants to turn back the oil future of Canada to the international oil companies. That to me sounds like a sell-out, where he would put Canadian public interests behind the interests of the international companies and be prepared to see energy priorities for Canada settled in the board rooms of Houston, Rotterdam or London.
I listened very carefully to the hon. member for Vancouver Quadra (Mr. Clarke) because he also expressed one of the favourite positions of the Leader of the Opposition. He has promised the Canadian people that if he is returned to form a government his government would sell Eldorado Nuclear Limited. Anybody who knows about Eldorado Nuclear Limited knows that it is the only company in this country which can produce the fuel for the world's most successful nuclear reactor, the Candu reactor.
Canadians would be well advised to ask the Leader of the Opposition why he would auction off a national asset, an asset which is part and parcel of the world's most successful system. Why would he turn that over to private entrepreneurs for private profit? Why would he turn it over to somebody else to peddle? Why would he put the national interests behind the convenience, as he perceives it, of selling a Crown corporation? Mr. Speaker, to me it is a sell-out to auction off an integral part of the Canadian Candu nuclear system. Perhaps it more than anything else reflects the knee-jerk reactions of an unthinking and very inexperienced leader.


An hon. Member:: Tell us about AECL.


Alastair William Gillespie: The hon. member has asked about AECL. If it had not been for federal initiatives, there would not be the massive nuclear program going on in Ontario, the significant program going on in Quebec and in New Brunswick, and the heavy water program in Nova Scotia, in Quebec and Ontario.

April 13, 1978
The Budget-Mr. Gillespie
Nuclear energy has to be one of the major options for Canada in reducing our dependence on foreign oil. That is not something which the Conservative party have yet addressed themselves to.
I could go on about exploration and drilling in the high Arctic, the importance of the polar gas operation and Petro-Canada's position in that. The hon. member perhaps does not realize that one-half of all the wells drilled offshore last year in the frontier areas were drilled by Petro-Canada. But the Conservative party would sell Petro-Canada. They would abolish it. They do not give a damn for Canada.


Some hon. Members:: Hear, hear!


Alastair William Gillespie: I would like to deal with the third thrust of our energy strategy, the development of our own indigenous resources. Hon. members will be aware that the government has presented to parliament Bill C-19, which is presently before the House and awaiting third and final reading. Bill C-19 would provide authority for the government to offer international prices for the production of tar sands projects and heavy oil projects. That represents a truly massive opportunity for Canadians. The budget has introduced a number of very important measures aimed at helping to provide the fiscal climate or regime whereby these massive projects will be undertaken. This fiscal regime will have to be worked out and negotiated with the provinces concerned.
In addition to the incentives in the budget 1 have referred to, the depletion incentives, the fact we will move to world prices for these new products and the other new incentives which the Minister of Finance referred to, there are a number of important measures which I should announce this evening. One has to do with the federal government's decision to meet the costs of moving domestic crude oil through the interprovincial pipeline between Toronto and Montreal.
Secondly, to make full use of this pipeline, to which I referred earlier, I believe we should increase the throughput of that pipeline from 250,000 barrels a day to 350,000 barrels a day. Such an increase of roughly 100,000 barrels daily would be the equivalent in balance of payments terms of a saving of $500 million a year. That is a truly significant saving in terms of balance of payments. To this end, I have initiated discussions with the Alberta government and the Interprovincial pipeline.
Hon. members will agree that the government has taken several important and very necessary steps to encourage expansion of non-conventional oil production. However, the federal government cannot do everything. I think this is recognized by the producing provinces. Alberta has already acted to provide heavy oil producers with alternative royalty incentives. It is my hope that Alberta and Saskatchewan will announce in the very near future measures they are prepared to take so that the total fiscal regime, including income tax and royalties, will lead without doubt to commercial development of these massive oil reserves in western Canada.
I believe the governments of Saskatchewan and Alberta are sympathetic to our objectives. In general, they appear willing to adjust their own royalty regime to provide the further incentives which are absolutely necessary if these projects are to go forward. Shell Oil has already announced its interest in a consortium. Imperial Oil has announced their interest. There have been discussions with respect to the Pacific petroleum group and another group headed up by Husky. We have also been-


Steve Eugene Paproski: This is not new. It has been going on for years.


Alastair William Gillespie: Yes, Mr. Speaker, but we are now waiting to hear from the provincial governments as to what royalty changes they are prepared to make. I am confident that in the spirit we have been able to work out these other arrangements we will also be able to work out the new fiscal regime which will bring on the kind of production we are looking for. I hope we will be successful in being able to produce close to one million barrels a day from the tar sands and heavy oils of western Canada by 1990.


Some hon. Members:: Hear, hear!


Ramon John Hnatyshyn: You are whistling in the dark.


Alastair William Gillespie: I am listening to the heckling of members opposite. That is not the kind of attitude that will build this country. However, that is the kind of complacency we have had from there. When will the Conservatives ever recognize a Canadian achievement? They do not talk about Canadian achievement. They just talk about gloom and doom. They are more interested in selling Canada short than in building Canada.
The large number of projects I have identified this evening will go a long way toward ensuring economic security of Canada in the years to come. During the construction and operating period, they will provide a significant number of jobs, hundreds of thousands of man-years of employment for Canadians, and the purchase of all kinds of Canadian goods and services.


Mr. Crosbie:: What about the one million jobs?


Alastair William Gillespie: Members opposite do not like this achievement either. They do not like our moving forward. They would prefer that the Canadian people not know about it. I guess if we were in their position, we would be a little envious too. They ought to get out and tell Canadians what our opportunities are and what can be done to help Canada go forward.
I believe in a very real way these projects can become a launching pad for a new decade of development in Canada. It will take determination and willingness to work with the provinces to work this out.


John Carnell Crosbie: It will take a change of government.


Alastair William Gillespie: These projects in Canada are not going to be developed by negative attitudes, by people who only look at the

April 13, 1978

problems, who do not build a sense of achievement in Canadians, people who would try to deflect Canadian opinion away from the kind of opportunities which are in Canada.


Mr. Anderson:: Mr. Speaker, I wonder if the hon. minister would entertain a question.


Mr. Deputy Speaker:: Will the minister accept a question?


Alastair William Gillespie: Yes, Mr. Speaker.


Hugh Alan Anderson: Mr. Speaker, my question deals with one of the most innovative and exciting proposals in the energy field in Canada. I refer to the potential of methanol being blended with gasoline from our renewable resources, wood fibres. Since the minister did not include this in his speech, can he now indicate whether there is a time frame for a methanol test program in Canada for cars to test the 85 per cent gasoline, 15 per cent alcohol blend. Are there any announcements forthcoming? Studies undertaken by the federal government seem to indicate the feasibility of this form of fuel.


Alastair William Gillespie: Mr. Speaker, I did not have time to deal with this area in my remarks. I did refer to the importance we attach to renewable energy. This particular area of methanol research is one which several departments of the government are actively engaged in at the present time. Discussions have been carried on with several provinces. This again is a good example of a federal-provincial undertaking.
Reference has been made to Alberta. I believe there are two other provinces also actively involved. I am not in a position at the moment to announce when the participation of those other provinces can be made public. However, I can assure the hon. member that methanol is one of the major potential fuels that we regard as important to the Canadian future. Indeed, in talking about forests and forest wastes and the energy associated with forests and forest wastes, I expect that after hydro energy our forests represent the single most important renewable energy source for Canadians.


Mr. Bawden:: Mr. Speaker, I have a question for the minister.


Mr. Deputy Speaker:: The hon. member may ask a question only with the consent of the House because the minister's time has just expired. Is there consent to allow the hon. member for Calgary South (Mr. Bawden) to ask a question?


Some hon. Members:: Agreed.


Peter Colwell Bawden: Mr. Speaker, in view of the minister's claims of gloom and doom on this side and optimism on his side, I have two questions bound into one. I wonder if the minister can say when Canadians can expect the next agreement with regard to the Alberta oil sands to be reached. Can he give us a precise date as to when the next project will be going ahead? There have been negotiations between governments. Can the minister give us a definite date?
The Budget-Mr. Gillespie
I would like to ask another question. On February 20 the Minister of Industry, Trade and Commerce (Mr. Horner) said that if the House got on with the job and the bill on the northern pipeline reached committee stage, some advance contracts could be made with the steel making empire of this country in order for them to commence rolling plate and pipe. The minister said the government wanted to see immediate action to create jobs in this country. I wonder if the Minister of Energy, Mines and Resources (Mr. Gillespie) can say whether any contracts have been awarded to the steel making industry in this country. If they have, have they been awarded on the strength of the pipeline company, or is the government proposing to guarantee the contracts to these steel makers or other suppliers in the interim while they build prior to the time when the pipeline is completely financed?


Alastair William Gillespie: Mr. Speaker, the two questions of the hon. member underline one of the points I was making in my speech this evening-the importance of other governments in the decision making process when it comes to energy. The first question had to do with when the next agreement with respect to the tar sands will be reached. I would be much better able to answer the hon. member if he could tell me when the Alberta government will decide upon the royalty system it is going to introduce with respect to the tar sands.


John Carnell Crosbie: You represent the national government. When are you going to decide about your tax system?


Alastair William Gillespie: If the hon. member had read the budget speech he would not ask such an uninformed question. However, we have come to expect that from the hon. member for St. John's West (Mr. Crosbie).
The hon. member for Calgary South (Mr. Bawden) asked a serious question about pipe contracts for the northern pipeline. Here again the Canadian government is waiting for another government to respond. I refer, of course, to the government of the United States.


Peter Colwell Bawden: Blame it on somebody else.


Alastair William Gillespie: Until the United States congress has dealt with the energy package of President Carter, contracts with respect to the purchase of natural gas and even the price of that natural gas cannot be determined by shippers in the United States. I think the hon. member knows that. He should know that contracts for the movement of gas will depend upon United States action.
He should also know that no orders for pipe will be placed with Canadian manufacturers of pipe until such time as the ability to finance the project is assured. If we follow that train of interconnected events to its source, we will see that the Canadian government and the Canadian economy are awaiting a decision by the United States congress and the United States administration.


Peter Colwell Bawden: Mr. Speaker, I have a supplementary question.

April 13, 1978
The Budget-Mr. La Salle


Mr. Deputy Speaker:: I think I should see the hon. member for Joliette (Mr. La Salle) because the minister's time has expired. In addition, there is a vote tonight, so I think we should proceed to the hon. member for Joliette.
[ Translation]


Roch La Salle: Mr. Speaker, I would not want to miss the opportunity to make a few remarks on this mini-budget, because, in my opinion, that is exactly what it is. It would seem that the first part was presented before Christmas and, under pressure, the minister decided to add to it. But I do not think that this budget will impress economists, experts and Canadians.
Unfortunately I had to be absent from the House a few days as I was called to an important meeting in my riding last night. I would have wanted to make these remarks sooner, but as this was my nomination meeting, Mr. Speaker, I had to be there and prepare myself for a good fight with my opponent who will be a candidate in the coming election. I heard the Minister of Energy, Mines and Resources (Mr. Gillespie) recall the efforts made by his government and try to justify the proposals put forth by the Minister of Finance (Mr. Chretien) as well as the situation which exists today.
He even blamed our leader (Mr. Clark) for not having referred to certain government achievements. In view of the unsatisfactory performance and the shortcomings of this government in virtually all areas, our leader certainly did not have much time left after having noted the many failures of the government in meeting nearly all its objectives. Everyone will recognize that it is our duty to tell the Canadians about the sad performance of the government in its monumental failure to restore our economy. I do not think we can be prevented from doing so, not only in the House, but in all public forums. I think that it is our duty to tell the Canadians how miserably this government has failed to meet its objectives in the last decade especially in the last four years.
I do not understand, Mr. Speaker, how the minister can accuse us of seeing only doom and gloom in view of the present situation concerning unemployment, inflation, and so on. Members on the other side may well ask why we are so pessimistic about the future, and why we seem somewhat negative about the proposals made by the government.
I was listening to a member from Quebec City. He too is worried, but he would like Canadians to accept the unfortunate administration that we have had in the last ten years. But we will have the opportunity to describe our present situation to the people of Quebec City and of other areas of Quebec as well as of the rest of Canada. Monday night, the Minister of Finance seemed quite happy when he delivered his budget speech. In principle, he announced his budget. Perhaps we could ask this question: Why did he wait so long? As I recall, we have been requesting for many months a budget which could correct in part, or at least satisfactorily, the present situation.
The highlights of this budget show that unemployment and inflation have reached their highest level, while the dollar is at its lowest level. This bears out a forecast made a long time ago and according to which the deficit would reach $11 billion. This is not what we were told six or seven months ago. They were then trying to convince us that the deficit would not be over $6, $7, or $8 billion. About four months ago, one of my colleagues, our financial critic, predicted a deficit of over $10 billion.
Still our friends opposite accuse us of being prophets of doom, and of being responsible for the lack of confidence shown by Canadian and foreign investors. But we have been saying the truth for the last six months. We were also saying the truth when we reminded the government on many occasions or tried to warn it that Canada was heading toward a lengthy and costly depression.
Those are the highlights of the budget of the Minister of Finance: unemployment has reached a record high, as did inflation, and our dollar is at its lowest. The Minister of Finance argues that our Canadian dollar is still floating, but we believe it is sinking. We are certainly considered as prophets of gloom. But, Mr. Speaker, this is the present situation and we cannot hide it.
I also believe that this $11 billion deficit will certainly not encourage businessmen and that it will rather make them worry about the present situation. The predecessors of the Minister of Finance have already made economic projections. The present Minister of Finance also made his projections. It did not change the situation. And this budget confirms what we have been expecting for several months. But in spite of this, earlier the Minister of Energy, Mines and Resources tried to reassure Canadians by telling them that the situation is not too bad.
However, we are blamed for not being willing to endorse those projections without too much discussion. But, Mr. Speaker, how could we trust a government that is responsible for the unemployment of 1,500,000 workers. The Prime Minister told us last week that he had created thousands of jobs. But how would you explain that with such positive results we have four times more unemployed than when the Prime Minister came to power? How would you explain that this government has not been able to plan for new jobs to accommodate new markets and the people who arrive on the labour market every day? The Minister of Finance refused to make sufficient credit available for job creation for students. He knows that is true either in his riding or in mine.
The hon. member for Montmorency is also aware of the difficulties students will experience this summer. If I refer to what has apparently been the experience of the Prime Minister when he was a university student, there is no doubt that he can hardly understand the financial difficulties encountered by our

April 13, 1978

students because he has never had to wonder where the money would come from. It is therefore difficult for him to think that our students will go through financial difficulties. We are perfectly aware that this government is asking us to put our trust in it and will soon ask the Canadian people to trust it, yet the government is indeed responsible for refusing to grant enough funds to create jobs for students. I can see members opposite trying to argue but in each of their ridings the students are in the same predicament as in mine; they are worried because they will not find summer jobs. Mr. Speaker, this same government is asking us to trust it while it is responsible for the 5,000 to 6,000 dairy producers who went out of business during the last two years.


An hon. Member:: That is not true.


Roch La Salle: I am being told that it is not true. But who can pretend that this is not true, Mr. Speaker? Dishonesty becomes obvious. It is clear that the government's poor administration and poor management of the dairy industry has thrown thousands of producers out of business. That same government is asking us to trust it when it refuses to compensate the cost of maintaining provincial police forces in the provinces of Quebec and Ontario, as it has been requested recently. There are no funds, no provision for that in the budget.
We will be asked to trust this government while it is responsible for the deterioration of the textile and footwear industry. Thousands of jobs have been lost because of the passiveness of this government. My friends opposite know that, some members in front of me have experienced serious problems in their own riding because of that and we are going to hide those facts. We should not mention it. This government is responsible for the highest inflation rate we have ever experienced; it is responsible for the declining purchasing power of Canadians; it is responsible for failing to provide sufficient grants for research which might have prevented the closing of plants in our country; it is responsible for the deterioration of our dairy industry and now we are called prophets of gloom because we have reasons, I believe, to blame the government for its inertia and its lack of success in finding the necessary solutions, Mr. Speaker.
We have been making proposals for quite a while, Mr. Speaker. I would also like to point out an important aspect of the budget where my friends from Quebec have a major responsibility as regards the proposal which was made by the Minister of Finance and which is rejected by the Quebec government.
The Minister of Finance rejects the proposal made by the Quebec minister and at the same time opposes the will of Quebecers, and not only of the Quebec government, since in principle the opposition parties of the Union Nationale or the Quebec Liberal Party have agreed on the position and the request of the Quebec government, and that is important. I
The Budget-Mr. La Salle
suggest that is the most significant factor. The National Assembly has unanimously requested the Minister of Finance to answer affirmatively to the proposal of the Quebec government which is asking for only one thing-


Mr. Duclos:: And your leader, what does he think about it?


Roch La Salle: They are not asking for one cent more from the federal government. They are simply asking that Quebec be allowed to use the same amount of money as befit the realities and the needs of the province and the Quebec government is prepared to suggest any province which would like to get the same advantages. Obviously Quebec would not object to any other province getting the same advantages.
Something I find repulsive, something I feel is a scandal is the attitude of our members from Quebec on that question. I heard over the radio this evening a report I hope is true. The report on TV was that a number of members from the Quebec Liberal caucus were meeting this evening to oppose the decision or position taken by the Minister of Finance. I hope this is true, I hope I am not the only one of this side to understand Quebec's true interests.
There are 60 Quebec members on the other side, and their silence this afternoon is the worst act of betrayal I have ever witnessed in this House in respect of a highly legitimate request from the Quebec government, which the Minister of Finance apparently is refusing. I hope my friends opposite will take this opportunity to rise and take a stand in favour of Quebec's request. It is certainly not at odds with the rest of Canada. And when apparently the Minister of Finance is not in a position to accept such a proposal, he must be subject to unknown pressures. He is betraying his mandate to respond to his province's true interests, as every member has a responsibility to do so. If this measure that will not cost Canada one cent more could be implemented in a fashion more germane to Quebec's vital interests, it would allow Quebecers to take advantage of the 8 per cent tax reduction in vital areas, products of almost daily consumption. I feel this would meet the legitimate aspirations of Quebecers. In conclusion, Mr. Speaker, I call on people in authority on the government's side, Quebec members who took a commitment in 1974, who have been promising the province of Quebec these last ten years that if the federal government were represented in large numbers by Quebecers, the province would derive additional benefits. God knows what has been happening during those last ten years. After so many requests were turned down, and not only since 1976 because Mr. Bourassa also faced refusals from the same government, as much as Mr. Johnson, Mr. Bertrand and Mr. Lesage. Since they are now in power-


Mr. Bechard:: Mr. Speaker, I rise on a point of order. I wonder if the hon. member would accept a short question?
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April 13, 1978
The Budget-Mr. La Salle


Roch La Salle: When I finish my remarks, Mr. Speaker, I will accept any question. I conclude, Mr. Speaker, because the hon. member for Winnipeg North (Mr. Orlikow) has asked me to end my remarks in order to leave him the floor. In conclusion I appeal to my friends from Quebec, Mr. Speaker, I ask my friends from the province of Quebec to have the guts to urge the Minister of Finance (Mr. Chretien) to respect the interest of his own province. No member in the House would blame the Minister of Finance for assuming that responsibility as regards the interest of his own province. I thought I had to appeal to them tonight and I hope we shall get the answer from my Quebec colleagues on that specific issue.
Therefore, Mr. Speaker, I believe it is important to underline this fact because the Minister of Finance did not consult the provinces sufficiently. I remember that at the federal-provincial conference, the right hon. Prime Minister (Mr. Trudeau) promised negotiations and consultations with the provinces, which he has not done in ten years. But as he was in difficulty at the last conference, he tried to reassure the provinces. However, if the federal government has $1 billion available to increase the purchasing power of Canadians, why did he not call on the premiers or the finance ministers to ask them how they wanted to spend this money-


Mr. Guay (Levis):: The Quebec premier left!


Roch La Salle: It is not what this government usually does. If this government wants to make a decision, it tells the provinces: Take it or leave it. That is the attitude of this government and that is the problem. For our part, we believe in consultation to correct the situation. I have been asked what should be done to achieve that. We believe that in a healthy and viable federal state, it is important to allow the provinces to take part in the major national decisions. We all recognize that the provinces must participate fully and truly in the making of the major national decisions and that this would eliminate our present problems, including that raised in the House today. Therefore, Mr. Speaker, I hope that the Minister of Finance will reflect tonight about the request made by the Quebec government and approved, as I said before, by the opposition parties.
The measure proposed by Quebec is so reasonable, timely, desired and wanted by the people that it has been approved unanimously by the government. The acting leader of the Liberal party and the leader of the official opposition stated it was sound federalism. The colleagues, the friends of members opposite in Quebec consider that co-operating with this proposition is sound federalism.
I notice that the hon. member for Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) does not agree with me, and that is a scandal. Furthermore, Mr. Speaker, I see that some of my colleagues from Quebec do not care for the vital interests of their province, and in a few days they will ask the voters in Quebec to trust them when they have been betraying them so

blatantly as they are doing today, when they have lied to them for ten years, they have forgotten their promises, and they have shown no respect for their own constituents. I hope this matter will be reconsidered, Mr. Speaker, that reason will prevail and that the requests and the interests of our province will be paid more consideration.


Albert Béchard: Now that the hon. member for Joliette (Mr. La Salle) is through with his speech, I would like to know if he would answer one question. And before I ask my question, I would like to say, Mr. Speaker, that the reason why the Progressive Conservative party has so few French Canadian members in Quebec is quite obvious after listening to such rubbish inspired by such intellectual dishonesty. Mr. Speaker, the hon. member for Joliette said that since the Prime Minister (Mr. Trudeau) has been in office, his province did not receive anything. I would like to give one example: I would like to ask him if he could tell the House the percentage increase in equalization since 1968?


Roch La Salle: Mr. Speaker, in no way did I suggest the government did nothing. In my opening remarks I stated the minister had stressed actions and accomplishments. What I said is that was done too late. This is what I said. When the hon. member for Bonaventure-Iles-de-la-Madeleine accuses me of being intellectually dishonest, I must tell him I only stated the government's poor performance and failures. The hon. member for Bonaventure-lles-de-la-Madeleine among others is objecting. He is only proving he is dishonest because he knows he is refusing once more, as so many other Quebecers, to support Quebec's position and best interests.
I am truly ashamed at that member's behaviour and certainly I cannot accept his accusations, because every time I rose in this House I endeavoured to enhance our responsibilities as members in this House. I feel therefore that the question or the interjection of the hon. member for Bona venture-Iles-de-la-Madeleine is quite malicious, and much more dishonest than anything I may have said since the beginning of my remarks.


Albert Béchard: I was right in suggesting he is dishonest, because he did not even answer my question.


Roch La Salle: Mr. Speaker, I answer intelligent questions only.


The Acting Speaker (Mr. Turner):: Order, please. I suggest that both hon. members are now getting into a debate.


David Orlikow: Mr. Speaker, in rising to participate in this debate I want to begin by spending a few moments discussing the words of wisdom we heard today from the Leader of the Opposition (Mr. Clark) and the words of wisdom we heard from the hon. member for York-Simcoe (Mr. Stevens), who led off the debate for the official opposition a couple of days ago. As part of his prescription for what
April 13, 1978

ails the government the hon. member for York-Simcoe suggested, among other things, that a Conservative government would reduce the size of the public service by attrition, would stop filling vacancies in the public service, and over a period of three years would reduce the public service by between 50,000 and 60,000 people. Of course, the impression he created was that this would be done very gradually and in a way that nobody would be hurt.
Those words had an oddly reminiscent sound. It seemed to me I had heard them somewhere before. I hear my colleague the hon. member for Nickel Belt (Mr. Rodriguez) say "in 1930". No. Mr. Speaker, I heard them just a few months ago, within the last year. I concentrated and suddenly I realized that in Manitoba we heard all that talk last year in August, September and October. The leader of the official opposition, the present Conservative premier of Manitoba, was telling the people of Manitoba just that kind of thing. One Conservative candidate in that provincial election was approached by a civil servant who said to him: "I am concerned, I am not happy with the NDP government. I have been thinking about voting Conservative but the way the leader of your party talks, it sounds to me as if there are going to be wholesale lay-offs of civil servants". So this candidate thought that he should find out what the party position was and he wrote a letter to the then leader of the opposition, Mr. Lyon, who sent him a letter which he authorized him to use in his campaign, and which was used in the campaign, in which he said that the Conservative party of Manitoba believed that the civil service in that province could be made more efficient and could be slimmed down, but that this would be done by attrition and that certainly no permanent employee would be laid off. The Conservative party won the election and Mr. Lyon is the premier of Manitoba. He has been in office for six months, and between 1,000 and 2,000 civil servants have been laid off in that time.
However, I want to talk for a few minutes not just about the people who were laid off but to put on the record what that Conservative government has done. I think members of the House and the people of Canada can get an idea of what the Conservative party of Canada mean when they talk about restraint and about cutting the expenditures of government. They can see what happened in Manitoba in six shorts months.
Before the NDP formed the government in Manitoba, the total number of senior citizens' housing units and public housing units, despite the fact the federal government for many years has paid 50 per cent or more of the cost of building those units, amounted to less than 1,000. That is the total which was built during the time of the Liberal government and the Progressive Conservative government. During the eight years in which the NDP formed the government, 12,000 housing units were built for senior citizens and for people who could not afford to buy or rent their own homes. The housing units are beautiful. Senior citizens who have no income except their old age pensions qualify for efficiency apartments. That program applied to senior citizens who
The Budget-Mr. Orlikow
received old age pension payments of $50 a month or less. That program has been discontinued, with no exception. The public housing unit program has been discontinued as well.
The provincial government inaugurated, with the federal government assisting in financing, a very impressive home repairs program for senior citizens who needed modest repairs to their electrical systems, plumbing systems or foundations. They were entitled to a loan, a grant, or a combination of the two, from the governments in order to have their homes repaired. Some 20,000 homes were repaired when the NDP was in power. That program has been stopped as well.
The government funded a school nutrition program in the core area of the city of Winnipeg. In that area there are a large number of students who come from new immigrant homes and native families. That program has been discontinued.
The universities have been told that the money they will get in this coming year will be not more that 2.6 per cent over what they received last year. That means a decrease in funding for the universities in Manitoba of approximately 6 per cent. The students' fees were increased by 20 per cent in one year as well. The grants to municipalities were very drastically pruned, so that the municipal taxes in Winnipeg, as well as other cities and towns in Manitoba, will go up between $75 and $125 this year.
During the last few years I have not used a car in Ottawa. I have used the public transit system. I have seen the ticket price go up from 25 cents in 1974 to 55 cents, or seven tickets for $3, in the three and a half years since the 1974 election. Until approximately two weeks ago, the fare in Winnipeg was 25 cents a ticket, with the provincial government picking up 50 per cent of the deficit incurred by the Winnipeg transit system. The new provincial government in Manitoba refused to increase its contribution, so the cost of a fare has risen from 25 cents to 35 cents, which is an increase of 40 per cent in one year.
The fees for people in nursing homes have been increased. Despite the promises made before and since the election by Mr. Lyon, today user fees were announced for elderly persons in acute care beds in hospitals. There are old people and sick people in Manitoba who should be in senior citizens' housing projects or nursing homes. Despite the job the former government did in building such facilities, there is still a shortage, as there is in most parts of Canada. There are people who have gone into hospital with acute illnesses and who are now ready to leave the hospital but cannot because there is no place for them to go. These are the people who are to be charged a fee.
Perhaps some of my friends, particularly my Conservative friends, will say that I am exaggerating. I should like to quote from a news story which appeared in the April 11, 1978 edition of the Winnipeg Free Press. Its headline is: "Take 3.2 per cent cut to avoid lay-offs, hospital asks". It reads as follows:
Victoria General Hospital is asking its employees to accept a 3.2 per cent wage cut to avoid lay-offs.
80033 - 71V2

April 13, 1978
The Budget-Mr. Orlikow
The hospital told four unions late last week the province's 2.9 per cent limit in additional operating funds this year means substantial lay-offs otherwise.


Mr. Rodriguez:: What about collective bargaining?


David Orlikow: They have collective bargaining. They finalized an agreement which gave them a 6 per cent increase. It was the maximum permitted under the guidelines of the anti-inflation legislation. The hospital is acting under the instructions or direction of the new government. Since it can only get an increase in operating grants of 2.9 per cent from the province, the hospital must react in the only way it can. It has told the employees either to take a cut in wages or people will be laid off. Not only does that result in more unemployment, it means a drastic cut in the standard of hospital care in the province of Manitoba.
When hon. members of the official opposition talk about the government being wasteful, about a freeze in the number of public servants, slimming down the public service by not filling vacancies when they occur and so on, they are talking about a very substantial reduction in the services which are provided by the federal government to Canadians, similar to what happened to the people of Manitoba since the Conservative government was elected provincially there.
Now I should like to turn to the budget which was placed before parliament a few nights ago by the Minister of Finance (Mr. Chretien). We have been given a part-time budget to meet the needs of a spring election. That is how the budget speech was described virtually by every newspaper, radio station and television station. Now we are faced with a situation such as we have not seen since prior to World War II, such as we have not seen since the great depression of the thirties. For the first time in the history of Canada, for three months running, there are more than one million unemployed people. For the month of March, the last month for which we have figures, according to Statistics Canada the official figure is 1,047,000 unemployed people. That is an increase of more than 100,000 people over the same month last year. On a seasonally adjusted basis, that represents 8.6 per cent of our labour force.
There is not a member of parliament who does not realize that several hundred thousand people are unemployed but are not counted. Our estimate is that 500,000 people are in such a position. In order to be counted you must be actively looking for work. There are many areas in this country, such as in Newfoundland, Cape Breton Island and the Inter Lake District of Manitoba near my constituency, where there are no jobs and have been none for several years, and there is no real point in someone who is unemployed there looking for work.
The Minister said the other night in his budget speech that it is not possible to provide jobs for everybody in Canada who wants to work. He trotted out some stale figures and prided himself on the jobs that have been created in Canada. It is true we have more people employed than ever before in Canada, but that is cold comfort to the more than one million people unemployed at this time.

In the years I have been here I suppose I have heard one hundred or more speeches at various times damning trade unions because they are too demanding and because sometimes they call a strike. Many of those spokesmen have suggested that the people do not want to work. How many of us have asked ourselves what one million unemployed people really means?
Every day we have one million people unemployed we lose one million days of productive work. One economist has calculated that between 1974 and 1978 we have lost some $20 billion in lost production because of unemployment, and that is unemployment over and above the 3.5 per cent to 4 per cent which has always been taken as full employment. Every three and a half days we have one million unemployed we lose more than we lost during all the strikes in Canada last year. Every twelve working days we lose more through unemployment than we lost in total to strikes in 1976. Members will remember how the newspaper editorial writers talked about the terrible things unions were doing to this country by going on strike.
Almost 40 per cent of the unemployed today are young people between the ages of 15 and 24 years. These are among the best educated and trained young people this country has ever had. We have spent hundreds of millions of dollars in our school systems, our community colleges, our technical institutions and our universities training our young people, and now they find there are no jobs. Our young people are graduating as teachers, as social workers, as engineers and in almost every field, but are being told not only that there are no jobs, but in such a way it seems as though it is their fault they have so much training. What could be more cynical or more cruel than that?
The Minister of Finance interjected during the speech of the Leader of the Official Opposition this afternoon: "Who is C. D. Howe?" I do not know whether he was joking or in fact did not know. For the information of the minister, C. D. Howe was probably the most important cabinet minister in this country during World War II. He was in charge of war production and virtually everything that mattered. In 1945 when the war ended he was the minister of reconstruction. I think in April of that year he tabled on behalf of the then Liberal government a white paper on reconstruction in which he said on behalf of the government that a Liberal government would not be satisfied with anything but full employment. He did not refer to a "large number employed", or to "most people", or to 85 per cent, 90 per cent or 95 per cent, or to "people who want to work"; he referred to "full employment". That is what that Liberal cabinet minister, who really was the most important minister during and after the war, had to say about what the Liberal party felt in 1945. This Liberal government of 1978 could take a lesson from that Liberal government of 1945.
Not only did we get the latest unemployment figures this week showing more than one million unemployed, we got the latest figures on the cost of living. Lo and behold, in spite of all the huffing and puffing of this government, in spite of lectures ad nauseam to the people of Canada by the Prime Minister (Mr. Trudeau) and the Minister of Finance, and in spite of
April 13, 1978

that whole bureaucratic jungle of the Anti-Inflation Board, the cost of living in one month jumped by 1.1 per cent, and for the whole year, from March 1977 to March 1978, the cost of living rose by 8.8 per cent. This is in the third year of the so-called anti-inflation program.
We get lectures from the Prime Minister, the Minister of Finance and occasionally from the chairman of the Anti-Inflation Board in which they have told us that if we exclude fuel prices and food prices we are right on target, just as though the people could live without paying for heat and power and buying food. We are told we are on target and doing better than most countries, but occasionally even this government has to tell the truth.
Frequently when we read about some of the terrible things that happen in the United States, such as Watergate and other things a super power like the United States can become involved in, we like to think that cannot happen in Canada because we are better than they. However, there are some things the United States has that we do not have, and one of those things is a securities and exchange commission.
If any corporation, individual or government wants to borrow money by selling bonds in the United States, they must first file a prospectus with the securities and exchange commission. Unfortunately we do not have similar legislation in Canada and we do not have such a commission. If you want to sell bonds in the United States you must go to the securities and exchange commission and explain what you are trying to do, what collateral you have, what your assets are, and so on. Fortunately or unfortunately, depending on how you look at it, the United States government requires this kind of information to be made public. People in Canada who do not think this kind of information should be made public, such as the President of the CNR, would think this is unfortunate, and he in fact does think it is unfortunate.
When the Government of Canada went to the United States recently to sell bonds they had to file a prospectus with the securities and exchange commission there. I hear the hon. member for Cape Breton-East Richmond (Mr. Hogan) say that was one of the first times ever. In our view it is fortunate they did because the prospectus has been published. Let me put on record what this great Liberal government, which tells us that inflation is under control, is on target and so on, put in their prospectus. In an article in the Montreal Gazette of April 12, Don McGillivray quotes from the prospectus as follows and adds his comments:
"Specific inflation targets, as measured by the consumer price index, were set"-
This refers to the Anti-Inflation Board and the guidelines.
-"at 8 per cent, 6 per cent and 4 per cent for the first, second and third program years ending in October 1976, 1977 and 1978, respectively. During the first program year, the rate of price increase was 6.2 per cent, but in the second year was 8.8 per cent."
No nonsense there about the 6 per cent target for this year or about the 'underlying' rate of inflation, minus food and energy prices, being within last
The Budget-Mr. Hees
year's guideline. The government evidently felt it had to level with foreign investors but could snow Canadians a little.
That is the situation, Mr. Speaker. Until budget night the Minister of Finance claimed that the rate of inflation for 1978 would be on target at 6 per cent. That in itself was a misstatement of the original target, because this is the third year of the program and the rate should have been 4 per cent. We will give the minister some leeway, however. He was saying that the rate of inflation should have been 6 per cent for this year, although he knows that devaluation of the dollar means substantial increases in the price of everything. Increases are particularly sharp in the price of all the food we import, which means virtually all vegetables in winter and all fruit in a large part of the year.
The minister knew that the government is committed to regular increases in the price of oil and natural gas until, within the next three or four years, they reach the international price. That means in the coming year at least two increases of $1.00 per barrel of oil and similar increases for natural gas. Those two increases alone will drive the cost of living up by about 2.5 per cent. When the minister spoke about a 6 per cent inflation target on Monday night, he must have known that it was in fact going to be substantially more. You can only bluff the people for so long, Mr. Speaker. On Monday night the minister finally admitted that the 6 per cent target for the cost of living increase in 1978 was not feasible and said the increase would be 7 per cent. It is obvious to anyone with the most elementary knowledge of economics that, unless the exchange rate on the Canadian dollar climbs in comparison to the United States dollar, we are facing not a 6 per cent increase in the cost of living or a 7 per cent increase but probably in the neighbourhood of 8 per cent.
We have not yet seen the effects of the things that are happening in the United States, such as the increase in wages won by the coal miners and the increase in prices that the steel companies imposed. These will work their way through the United States economy and will mean a sharp increase in inflation which will be reflected in Canada. As my colleague the hon. member for Cape Breton-East Richmond says, it will be between 8 and 9 per cent. I am sure he is much closer to the truth than the Minister of Finance.
There were some goodies for various interested groups in the budget, but essentially it was a political budget. Sales taxes were cut by 3 per cent for six months. That means that in October when unemployment traditionally begins to climb and the economy needs a boost the cut in sales tax will come off. The minister hopes the cut will find favour with the Canadian people and help his party win the next election, after which they can face the consequences for another four years. I have more confidence in the Canadian people, Mr. Speaker.


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


George Harris Hees: Mr. Speaker, in the short time available to me I will try and go over the sad record of this government in the past ten years and judge

April 13, 1978
The Budget-Mr. Hees
just how much support it deserves in the election that is coming up shortly.
Let me take unemployment first. In 1968 there were 375,000 people unemployed; in 1978, there are over one million unemployed, almost triple the number. In 1968 inflation was 4.5 per cent; in 1978 it is 8.7 per cent, triple the rate. The cost of a new NHA house in 1968 was $18,900; today it is $40,500, more than double. The mortgage rate in 1968 was 8 per cent; today it is 1014 per cent, an increase of nearly one-third. In 1968 the current account deficit was $97 million; today it is $4.5 billion, having increased 44 times. In 1968 the trade deficit for manufactured products, the ones that produce the jobs, was $3.1 billion; today it is $11.6 billion, an increase of almost four times.
From these figures it is evident that this is the worst performance ever put forward by a government in the history of this country.


Some hon. Members:: Hear, hear!


George Harris Hees: Let me look at who has resigned from this government in protest over the way the economy has been run. The first was Mr. Eric Kierans, economics professor at McGill University, president of the Montreal Stock Exchange and a provincial minister of revenue before he entered the cabinet. Then there was in succession Mr. John Turner and Mr. Donald Macdonald, both of whom served as minister of finance. These three gentlemen resigned because the Prime Minister (Mr. Trudeau) insisted on following an irresponsible socialist line which they could see clearly was leading the country into economic disaster.
Another member of cabinet, Mr. Paul Hellyer, the then deputy prime minister, quit because the Prime Minister refused to bring in a housing program to benefit low income people. That took place, Mr. Speaker, immediately following the Prime Minister's campaign across the country on the program of a just society. What a farce that turned out to be when he took over with a majority after the election!
Let us see who is left running the store. First of all, we have the Minister of Finance (Mr. Chretien) who, in this budget, brought in a sales tax cut which is to expire in six months' time, in the fall when unemployment always starts to rise. This is going to bring about a disastrous slump which, of course, this government does not care about because there is only one purpose in bringing in that measure. That purpose is to tide this government over the election, which is to be called in the next day or so, and that is the only purpose of this tax cut.
Then, Mr. Speaker, we have a departmental study which was produced by the Department of Industry Trade and Commerce entitled "Manufacturing Performance". It states that the manufacturing sector of our economy has lost no less than 80,000 jobs in the last four years. The minister's idea of helping the manufacturing industry of this country is to lower tariffs. He stated that in the House of Commons recently. He said that all tariffs are going to be cut an average of 40 per
[Mr. Hees.)
cent. If under his direction and the direction of this government that proposal is adopted at the GATT negotiations in Geneva today, then later this fall those disastrous tariff cuts, will result in complete disaster for the manufacturing industry in this country and will produce far greater lay-offs than we have seen for a very long time.
This government is going to the country in the next few days with the slogan "Show you care". I have news for the Prime Minister: the people of this country are already adding four words to that slogan which the Prime Minister is going to hear. He will hear these words all over this country in his election campaign, and they are "Get rid of Pierre".


Some hon. Members:: Hear, hear!


George Harris Hees: The obvious alternative to the shambles this government has made of running this economy into the ground is the program of economic competence and responsibility which has been presented in the last two days by the hon. leader of this party and by our financial critic, the hon. member for York-Simcoe (Mr. Stevens). This program is a positive program, a national development program which will get this country back on its feet. This is what this country deserves. It will restore the economic performance which the people of Canada deserve to receive from the government which they will have sitting over there, a Conservative government, as soon as the election results are announced on election night.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Turner):: Order, please. It being 9.45 p.m., it is my duty pursuant to Section (6) of Standing Order 60 to interrupt the proceedings and put forthwith the question necessary to dispose of the amendment to the amendment now before the House.
The question is on the amendment to the amendment. Is it the pleasure of the House to adopt the amendment to the amendment?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


Some hon. Members:: Yea.


The Acting Speaker (Mr. Turner):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Turner):: In my opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Turner):: Call in the members.
April 13, 1978


Mr. Speaker:: I therefore declare the amendment to the amendment lost.
It being after ten o'clock, this House stands adjourned until tomorrow at 11 a.m.
At 10.14 p.m. the House adjourned, without question put, pursuant to Standing Order.

Friday, April 14, 1978