1978-04-26

ROUTINE PROCEEDINGS


Mr. Jake Epp (Provencher):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the fact that the main estimates of the Department of Labour, the Department of Employment and Immigration and the Unemployment Insurance Commission have not been examined in the Standing Committee on Labour, Manpower and Immigration, and in view of the fact that the chairman has refused to schedule sittings of the said committee in order to examine the estimates, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House instruct the chairman of the Standing Committee on Labour, Manpower and Immigration to schedule meetings of the standing committee for the express purpose of examination of the estimates.


Mr. Speaker:: Pursuant to Standing Order 43, such a motion can be presented for debate only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL SECURITY
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, under the provisions of the same order I rise on a matter of urgent and pressing necessity. In view of the CBC news today that 24 monthly reports made by the RCMP to the Solicitor General concerning the force's surveillance operations are missing, and in view of the fact that the reports concern the period 1971-72, a period when Jean-Pierre Goyer was solicitor general, I would move, seconded by the hon. member for Cape Breton-East Richmond (Mr. Hogan):
That Mr. Goyer be requested to check his brief case to see if he has inadvertently removed them from his office, and if he finds them would he please return them so that we can get the commission of inquiry under way.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL REVENUE
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity I raise the following matter based on information circular 78.3 of the Department of National Revenue. According to the circular, its purpose as noted in paragraph 1 is to explain to registered charities and to charities seeking registration the consequences of carrying on activities that are political in nature. On page 3, point 2, under the title-


An hon. Member:: Order.


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


Andrew Hogan: Mr. Speaker, my motion is that the information in this circular that was put out by the former minister of revenue-


An hon. Member:: Order.


Andrew Hogan: Let me finish the motion, please. I move, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That this House deplores the regressive, undemocratic and idiotic nature of some of the rulings pertaining to charitable organizations that occur in the revenue department's information circular 78.3.
This circular is important reading for you people over there.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

April 26, 1978


INDUSTRY
Mr. Lionel Beaudoin (Richmond):: Mr. Speaker, pursuant to Standing Order 43, I ask for the unanimous consent of the House to present a motion on an urgent and important matter.
Since the Canadian mining industry, more particularly asbestos and copper, which represent an investment of $18.1 billion a year, is faced with a lack of export orders on world markets and is strangled by taxes, with a view to making it more competitive on the external market, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the House urge the government to grant immediate tax concessions for the Canadian mining industry and to undertake discussions with other countries to promote our mineral exports.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NORTHERN AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, in view of the fact that people living in the Northwest Territories, particularly those in isolated communities, experience the highest cost of living in the country, given the very high cost of housing for northern residents, and in view of the fact that all government consumers and domestic consumers in the communities of Yellowknife, Fort Smith, Pine Point and Fort Resolution have been subjected to yet another rate increase by the Northern Canada Power Commission of the order of 10.5 per cent, I move, seconded by the hon. member for New Westminster (Mr. Leggatt):
That the Northern Canada Power Commission be divided into two separate operations and that the responsibility for each be given to the territorial councils of the Yukon and the Northwest Territories.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN NATIONAL RAILWAYS
Mr. Lome Nystrom (Yorkton-Melville):: I rise under the same Standing Order, Mr. Speaker. The CNR has proposed to remove its agent and station from the town of Kamsack. Since the CNR has benefited tremendously by the long service provided by the town and residents of Kamsack, and since the CNR is now attempting to escape its historic and statutory obligations rather than providing better service, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House condemns the CNR's proposal to remove its agent and station from the town of Kamsack, and that this House calls upon the Minister of Transport to instruct the CNR to honour its historic obligations by retaining and improving the service provided by both agent and station to the town of Kamsack.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question is to the Solicitor General. The McDonald commission has been informed that there are missing, or have been destroyed, 24 monthly surveillance reports prepared for the Solicitor General covering the period of time during which the present Minister of Supply and Services was solicitor general, and also covering a period of time that is very crucial in terms of the McDonald commission's investigation.
Is it a fact that these 24 reports, covering two years, are missing? Were they destroyed? If so, under whose authority did the destruction take place?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, first of all, I would like to indicate to the hon. gentleman that we are dealing with files relating to the criminal investigation branch and not the security service. Evidence was indeed adduced before the McDonald inquiry to the effect that certain files which contained reports on surveillance installations were destroyed. Those were destroyed with reference to the principles on records, administration and maintenance within the RCMP which provide that certain files and reports can be destroyed three years next after their date of operation. However, all the installations and files relating to the specific installations which are referred to in those reports are still in
April 26, 1978

existence. Therefore, the McDonald inquiry is not at all hindered in its investigation.
To make it precise once more, there was a process whereby certain installations were reported on a monthly basis. The reports which referred to the original installations were destroyed in accordance with administration policy. However, the records relating to the specific installations were not destroyed and are still available.


William Herbert Jarvis: Mr. Speaker, on one hand we have uncontradicted allegations that 58 copies of a document marked "Top Secret. For Canadian eyes only" were distributed all over Parliament Hill, the national capital, and likely to foreign countries as well. On the other hand, we now have evidence from the Solicitor General that this particular series of reports covering two years was destroyed according to normal procedures.
Is the Solicitor General telling us that the reports prepared monthly for the Solicitor General were prepared in one copy only; that that copy has now been destroyed and that no other copies were maintained of what presumably was an extremely important monthly report to the chief law enforcement officer of the Crown?


Mr. Blais:: Again, Mr. Speaker, the report related to specific installations. The records of those installations are still available. As I understand it, they have been used by counsel in the preparation of evidence to be laid before the inquiry. I do not see what the hon. gentleman's point is at all.


William Herbert Jarvis: The issue is one of credibility. Surely the Solicitor General must understand how it tests one's credibility to learn that the missing or destroyed reports cover exactly the period of time during which the present Minister of Supply and Services was solicitor general and cover exactly the period during which activities took place which formed the main subject matter of the McDonald commission hearings.
Will the hon. gentleman be precise in telling us when the destruction of those documents took place, and under whose authority, and when did their destruction first come to his notice or to the notice of his predecessor?


Jean-Jacques Blais: First of all, if you recall, initially when I commenced my reply I said we were dealing with criminal investigation branch reports; we were not dealing with national security. The reports which were submitted to the Solicitor General in relation to national security are still available. I am dealing now with reports relating to installations and involving electronic surveillance, which have nothing at all to do with the security service. Therefore, the allegation advanced by the hon. gentleman does not hold water.


RCMP SURVEILLANCE OF POLITICAL CANDIDATES
Hon. Robert L. Stanfield (Halifax):: Knowing what an eager beaver the Solicitor General is, I am sure he has already
Oral Questions
checked out the accuracy of a report with regard to documents purported to be copies of RCMP instructions to certain personnel relating to the surveillance of political candidates. Can the Solicitor General tell us whether the document is a valid copy and, if so, whether those instructions were modified in any way by the instructions the government issued, I think it was in 1975, telling the RCMP and the security force to stop exercising surveillance over political parties; or is the instruction relating to the surveillance of political candidates still in place?


Hon.   J.-J. Blais@Solicitor General: I thank the hon. gentleman for the compliment he has paid me. In accordance with his evaluation of my activities, I have indeed ascertained certain facts. I want to say to the hon. gentleman, because I think this is the first question he has asked in the House in relation to the McDonald inquiry for some time, that he is well aware of the terms of reference of that commission and one of the terms of reference is to study all procedures within the RCMP.
He will be the first to recognize that the manuals are essential in the study of those procedures. As a consequence the manuals of the RCMP, past and current, have been made available to the McDonald inquiry. In terms of the contents of the manuals, I would call the hon. gentleman's attention to the fact that under the terms of reference of the inquiry certain hearings are to be held in camera to protect the security service and our national security. In terms of methodology or procedures which affect investigations related to national security, those hearings are to be held in camera and it would not be proper at this time to comment as to the accuracy of the contents.


Robert Lorne Stanfield: With all due respect to the Solicitor General, whom I know is not only an eager beaver but also a great democrat in his heart, would he not agree that it is of fundamental interest to hon. members of this House to know whether the RCMP were exercising surveillance over political candidates in the manner indicated in this report, and also of fundamental interest to us to know whether this has continued since the government's instructions to the RCMP to discontinue the surveillance of political parties, because they are not the same thing? Is it too much for me to insist on a straight answer from my friend the Solicitor General?


Some hon. Members:: Hear, hear!


Jean-Jacques Blais: Mr. Speaker, the hon. gentleman and hon. members of his party who have been briefed on security service operations know that because an individual belongs to an organization, whatever organization it may be, that does not make that individual impervious to investigation or surveillance by the security service, because the criterion relating to the exercise of surveillance or investigation is conduct which goes against the provisions of section 16(2) of the Official Secrets Act. The security service is indeed charged with effecting surveillance of individuals who could be a threat or

April 26, 1978
Oral Questions
who may be a threat to Canada's security. Surely it is not the position of the hon. gentleman that that surveillance ought not to take place.


Mr. Dick:: Answer the question for a change.


Robert Lorne Stanfield: Mr. Speaker, I would have thought that the best way, if I may suggest this to the Solicitor General, to be fair to the RCMP and to discharge his obligations to this House would be to give a straight answer to the question. I think it was the Prime Minister who told us some months ago that in 1975 the government asked the RCMP to stop exercising surveillance on legitimate democratic political parties.
Can the Solicitor General tell me whether those instructions from the government referred to by the Prime Minister- instructions such as those also referred to in the Globe and Mail-are no longer in effect? I think the House is entitled to an answer to this kind of question, and any reference to the McDonald Commission is quite beside the point.


Jean-Jacques Blais: Mr. Speaker, that was the first specific question the hon. gentleman has asked.


Some hon. Members:: No.


Jean-Jacques Blais: The directives which were issued by the Prime Minister of Canada relating to the surveillance of any legitimate political organization are being complied with in full by the RCMP.


ALLEGED DESTRUCTION OF RCMP SURVEILLANCE REPORTS
Stuart Malcolm Leggatt: Mr. Speaker, I would like to take the Solicitor General back to the question of the 24 documents which are reported to be missing. I am trying to get the Solicitor General's answer clear in my mind. Is it correct that those reports were not only destroyed but any exact duplicates were also destroyed, and all we have now is some summary of those reports? Are those reports available to the McDonald commission in full and in total as full exhibits, so that the commission can inquire into them?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, the reply I have already made relating to those 24 reports was that they cannot presently be located, that they refer to existing files relating to installations, that all the files are complete and that the sequence of those files is ascertainable and complete. Therefore, there are no files-which is really the subject matter of any investigation by the McDonald inquiry-which could be missing.
In terms of whether the 24 documents to which the hon. gentleman is referring were destroyed, I can say to the hon. gentleman that those documents are not there, they have not been found and they are presumed destroyed. I suggest to the hon. gentleman that the destruction took place in accordance-


Some hon. Members:: Oh, oh!
[Mr. Blais.l


Jean-Jacques Blais: Those documents could have been destroyed in accordance with the procedures that have been followed and approved internally by the RCMP.


Stuart Malcolm Leggatt: The Solicitor General still has not advised the House as to the date of the destruction of those particular documents, which I am assuming now-that was his evidence before the House-are not available as documents to be inquired into. My question is: Will he now confirm the date of the destruction of those documents, will he also confirm that they were destroyed subsequent to the revelations of the break-in at the APLQ, and can he also advise us whether they were destroyed under the instructions of any of the solicitors general?


Jean-Jacques Blais: First of all, the hon. gentleman presumes that the documents have been destroyed. I suggested to the hon. gentleman-


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: -there is no specific record that the documents have been destroyed. If I inadvertently misled the hon. gentleman, I apologize. Indeed, the documents are not there.


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: Evidence was laid before the McDonald inquiry to the effect that the reports referring to the electronic installations were destroyed-


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: -or at least not available, and there is a presumption-


An hon. Member:: You've got to be kidding.


Jean-Jacques Blais: There is a presumption that the documents may have been destroyed because it is the internal administrative policy of the RCMP relating to that sort of report, which is a monthly report, that it may be destroyed three years following the date of the issuance of the report.
However, the documents to which the reports refer, namely, the installations themselves, are still available. I will reiterate for the hon. gentleman, who has not been mindful of that fact in his question, that the documents relating to the installations are available and have been made available to the McDonald inquiry.


Stuart Malcolm Leggatt: I have a final supplementary question for the Solicitor General.


An hon. Member:: That buffoon.


Stuart Malcolm Leggatt: The Solicitor General has some experience with the courts of this country and he knows that evidence is evidence and documents are documents, and that summaries of documents are a very different thing. My question is this: In terms of the alleged mislaying or destruction, somehow the documents are missing-we have had confirmation of that
April 26, 1978

today-I want to know from the Solicitor General whether he or his predecessors have inquired as to what happened to those particular documents. What study has he done to determine whether any solicitor general has had any responsibility for seeing that those possibly inculpatory documents are now missing and are not available to the McDonald inquiry?


Jean-Jacques Blais: The hon. gentleman is not being fair in making suppositions in questions of that nature. I can guarantee to the hon. gentleman that neither myself nor my predecessor nor, indeed, any solicitor general has had anything to do with mislaying of any document or documents.


Robert Lorne Stanfield: How do you know?


Jean-Jacques Blais: I will say, further, that indeed the documents themselves could have been destroyed because the three years during which they were being retained, according to the internal procedures of the RCMP, had expired and in accordance with the usual methods and measures the documents could have been destroyed. The fact is that the hon. gentleman recognizes very well that if he were to keep files eternally in any internal administration, the cost of storing them would be prohibitive indeed.


NATIONAL DEFENCE
Mr. Adrien Lambert (Bellechasse):: 
Hon. Barney Danson (Minister of National Defence):: Yes, Mr. Speaker, I have been pursuing this with the hon. member for Levis as well. The hon. member raised a question in the House before, with the hon. member for Levis, and also with my colleague the Minister of Transport in an attempt to speed up work so that those shipyards can be busy and the people well employed. The Minister of Transport may wish to add to this answer today or in the very near future.
Oral Questions


TRANSPORT
Joseph Adrien Henri Lambert: I have a supplementary question, Mr. Speaker.
Since the Minister of National Defence is referring me to the Minister of Transport, has the latter good news to communicate to the House on this subject and could he confirm the date on which the work might start on the job he wants the Lauzon shipyards to do for him?


Hon. Otto E. Lang (Minister of Transport):: Yes, Mr. Speaker, some arrangements are in the final process of being made and the work involved would follow immediately.


ENVIRONMENTAL AFFAIRS
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, my question is directed to the Minister of State for the Environment. I gave him notice of this question yesterday. It deals with a matter which I have discussed with him and his department over several weeks.
As water flowing into Lake Ontario at a rate in excess of
400.000	cubic feet per minute and flowing out at a rate of only
300.000	cubic feet per minute has caused the level of the lake to rise one foot above the average level for this time of year, which is continuing to rise rapidly and has already caused extensive damage to properties on the shores of the lake, would the minister advise the House what steps he and his department are taking first of all to stop the water from rising and then to bring the level of the lake back to normal?


Some hon. Members:: Oh, oh!


George Harris Hees: We used to do it when the Conservatives were in power.


An hon. Member:: How long ago was that?


Hon. Len Marchand (Minister of State (Environment)):: We are getting into pretty deep water, Mr. Speaker.


Some hon. Members:: Hear, hear!


Len Marchand: The present level of Lake Ontario is 246 feet which, despite the spring rise, is still within the International Joint Commission orders of approval. The St. Lawrence board of control is continuing to discharge the maximum possible under existing conditions. The present rate of discharge is 308,000 cubic feet, which is just a little more than what the hon. member said.
4882

April 26, 1978
Oral Questions
I want to assure the hon. member that we are watching the situation very closely and doing everything we can within the means that we have to manage these levels. As the hon. member knows, there is no way of managing the water coming in from Lake Erie. It causes us some concern. Perhaps the Minister of Agriculture prayed a little too much last fall. The water levels from last fall were a problem also.
The hon. member will appreciate that if we allow too much water to escape from Lake Ontario there could be trouble at the other end at Lac Saint-Louis in the Montreal area. I assure the hon. member that we are watching the situation very closely.


George Harris Hees: Mr. Speaker, I am sure the hon. minister knows that watching the lake very carefully is not going to stop it from rising, as it is doing every minute at the present time. As this situation was brought about by catering solely to the wishes of the shipping companies which use the St. Lawrence Seaway, will the government start now to look after the needs of those living and working on the shores of Lake Ontario, instead of only paying attention to the wishes of the shipping companies which contribute so generously to Liberal campaign funds?


Mr. Speaker:: Order, please.


FISHERIES
Mr. David MacDonald (Egmont):: 
CONSUMER AFFAIRS
David Samuel Horne MacDonald: Mr. Speaker, I am not sure if the Minister of Consumer and Corporate Affairs is aware of a recent report which I sent to the Minister of Fisheries and the Environment on the Irish moss fishery. I should like to direct my supplementary question to the Minister of Consumer and Corporate Affairs, if I can have his attention.


Some hon. Members:: Oh, oh!


David Samuel Horne MacDonald: I do not mean to disturb him during question period when he is reading his fan mail. A recent report released by the Social Action Commission of the diocese of Charlottetown on the state of the Irish moss fishery in Prince Edward Island cited the testimony of a former vice-president of one of the major foreign buyers of Irish moss, Marine Colloids Ltd. It concerned an arrangement made among three multinational companies in 1975 to fix buying practices in a way which would drive the newly-formed cooperative, the P.E.I. Marine Plants Co-op, out of business.
Is the minister aware of these serious charges? Has he initiated, or is he aware of any investigation within his department on attempting to fix prices in this manner? These three companies virtually control the Irish moss market, nationally and internationally. Is he prepared to refer this matter, if it has not been investigated, to the Combines Investigation Branch for investigation and possible prosecution?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, this is the first time I have heard about this problem. I do not recall receiving any letter similar to the one referred to by the hon. member. I would be pleased to look into it and refer the matter to the director, if that is appropriate.


FEDERAL-PROVINCIAL RELATIONS HOUSING-PROGRESS REPORT ON NEGOTIATIONS WITH PROVINCES
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, in the absence of the hon. Minister of State for Urban Affairs, I should like to direct my question to the Minister of State for Federal-Provincial Relations. It has to do with the announcements made yesterday by the Minister of State for Urban Affairs regarding the new initiatives by the federal government in the area of housing, and specifically with regard to RRAP and NIP.
Because the minister obviously has been part of the negotiations with the provinces, can he tell the House whether any consensus has been reached with the provinces in the area of housing, which is clearly within the jurisdiction of the provinces?

April 26, 1978


Hon. Marc Lalonde (Minister of State for Federal-Provincial Relations):: Mr. Speaker, actually, I have not been part of the negotiations but I have been involved indirectly in the process over the past few months. I should like to inform the hon. member that, indeed, there was a federal-provincial conference in Edmonton a few months ago on the question of housing as part of the preparatory conference leading to the first ministers' conference. At that conference there was a general review of the proposals announced by the minister. At the time, those proposals were very well received by all the provinces.


George Harris Hees: No, they were not; that is not my information.


Marc Lalonde: Since then there have been telephone conversations between the minister responsible for housing and the minister responsible for housing in each province. I understand these conversations led to positive results, hence the announcement which was made by the minister which I think represents a very, very significant and major improvement in our housing program and which I think will benefit Canadians from all provinces.


Mr. Paproski:: Order.


Marc Lalonde: Also, it will increase the flexibility of our programs in terms of provincial participation.


Some hon. Members:: Hear, hear!


Dean Waldon Whiteway: Mr. Speaker, my supplementary question is directed to the same minister. "In the broad area of housing, consultation has been virtually non-existent." That is a quote from page 34 of the Western Premiers' Task Force on Constitutional Trends. In light of that which is found in the report of the four western premiers, can the minister assure the House that consultation and agreement will be sought with all provinces before any new federal initiatives are undertaken by the government and the minister?


Marc Lalonde: Mr. Speaker, first of all, I should like to mention to the hon. member that he is referring to a report which is several months old; as a matter of fact, it is a report from last year. I have had an opportunity of discussing that report extensively with the western premiers. They recognized that in many respects, having studied the report with their officials, there were certain allegations contained in it which were not quite accurate, and they have been corrected since. Others were correct. Steps have been taken to remedy the situation. I have had very fruitful meetings with the western ministers concerned in this whole area. I think major improvements have been made in that respect.
As far as the latter question is concerned, I can only repeat to the hon. member that there have been extensive consultations on the proposals or decisions announced by the minister responsible for housing. All provinces have been consulted. If the hon. member wants to imply that in the field of housing
Oral Questions
the federal government cannot move unless it has the unanimous agreement of each and every province, then I think he is going rather far and it will be the Canadian people who will suffer from the lack of funds for housing in many provinces. I am not ready to subscribe to the notion that every province should have a veto.


HOUSING-ALLEGED LACK OF CONSULTATION
Steve Eugene Paproski: Mr. Speaker, I should like to direct a question to the minister responsible for housing.


Some hon. Members:: Oh, oh!


Steve Eugene Paproski: I will get to my question if they will be quiet for one minute. I should like the minister to know that because of lack of consultation, the hon. minister for housing in Alberta, Bill Yurko, is running as a PC candidate against this government.


Some hon. Members:: Hear, hear!


Marc Lalonde: I can think of very many reasons, Mr. Speaker, why anybody else would like to run instead of some of the PC members from Alberta at the present time.


NORTHERN AFFAIRS
Walter (Wally) Firth: Mr. Speaker, I should like to direct a question to the Solicitor General in his capacity as Acting Minister for Indian Affairs and Northern Development. The subject matter is the extremely high cost of electricity in the Northwest Territories. The people have been subjected to yet another increase by the Northern Canada Power Commission in the order of 10.5 per cent.
In view of the fact that some power bills now received by home owners exceed the cost of the mortgage payments, I would ask the minister whether he will consider seeking an amendment to the Northern Canada Power Commission Act which stipulates that the power commission must set its rates to cover the cost of operations in each of its two zones; and would the minister consider turning over responsibility for the Northern Canada Power Commission to the two territorial councils of the Yukon and Northwest Territories?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I will be pleased to take notice of the representations by the hon. gentleman.
80038-19Vi

April 26, 1978
Oral Questions AGRICULTURE


PRICE OF HERBICIDES-STEPS TO ASSIST FARMERS
Arthur Jacob (Jake) Epp: Mr. Speaker, I would like to direct my question to the Minister of Agriculture. In view of the fact that certain herbicides are priced much lower in the United States than in Canada, even if one takes into account the discounting of the Canadian dollar against the U.S. dollar, in view of the fact that the Canadian farmer must compete in the international market and get international prices as the return for his products; and in view of the overwhelming evidence that the price of certain herbicides is much higher, will he reconsider his position, opening the border to allow Canadian farmers to purchase herbicides in the U.S. if that is the best deal they can get?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the hon. member makes it all sound very simple. I do not agree with everything he said. Many herbicides in Canada are cheaper than they are in the United States. No American farmer has ever been allowed to come into Canada and purchase herbicides to take back into the United States for his own use. It is against the law in their country to do that because the registration in respect of quality may not be the same here as in the United States.
The same thing is true in reverse. We have adopted the same law here because some products do not meet out registration demands and qualifications. There are many herbicides, as I said, which are much cheaper in Canada than in the United States. In addition, the United States has a 14 per cent tariff in respect of chemicals going into that country even if they are manufactured here in Canada where there is no tariff on their coming into Canada if brought in legitimately.


Arthur Jacob (Jake) Epp: Mr. Speaker, there are tariffs, but even with those and the discounted Canadian dollar certain products are priced much lower in the United States, and Canadian farmers can only obtain an income from selling on international markets. In view of the overwhelming evidence possessed by farm groups, individual farmers and members of parliament, if the evidence is given to the minister once again will he consider changing the policy relating to herbicides in respect of which Canadian farmers are now being penalized severely?


Eugene Whelan: Mr. Speaker, Canadian farmers are not being penalized. I am the Minister of Agriculture for all of Canada-


Some hon. Members:: Hear, hear!


Eugene Whelan: -and I have to consider the picture as a whole scene in respect of herbicides. I can go into the maritimes, for example, and find that with regard to potato herbicides the price is lower there than it is in Maine. I can go into Alberta and find that herbicides there are cheaper than they are in Montana. Neither the people from Montana nor from Maine can import those herbicides because it is against the law, in addition to which there is a tariff. However, there is no tariff
[Mr. Blais.l
on herbicides coming into Canada, as the hon. member has indicated.


SPECIAL IMPORT PERMITS FOR AGRICULTURAL CHEMICALS
Mr. Jack Murta (Lisgar):: Mr. Speaker, I have a question for the Minister of Agriculture along the same lines. Since the Canada-United States border will not be opened to the free flow of chemicals, which some of us on this side of the House have advocated, let me refer to committee proceedings dated Tuesday, March 21, where the minister, in reply to a question I asked, stated:
We are considering doing some other things that I am not free to make public at this time-suggestions by some farm organizations on how we import chemicals.
Has the minister given any consideration to allowing specific or special import permits for agricultural chemicals which are in some cases between 60 per cent and 100 per cent cheaper in the United States than in Canada? Would the minister give consideration to this request?


Eugene Whelan: Mr. Speaker, I am perfectly willing to look at any evidence the hon. member may have. I have an advisory group that is appointed from the industry, farm organizations, which reviews prices in the United States and in Canada. I am sure that the hon. member realizes if we had fixed prices the Minister of Consumer and Corporate Affairs would be after me in relation to a combine, particularly if we allowed that kind of situation to exist. There is competition in respect of these chemicals among distributors in Canada.
If the hon. member has real evidence, I will consider it. But no evidence has been presented to me by anyone, which I am aware of at the present time, that indicates a 100 per cent discrepancy. If the hon. member can come forward with that kind of fact, I certainly will consider some different action to what we have taken in the past.


EFFECT OF GATT NEGOTIATIONS ON TEXTILES
Paul Wyatt Dick: Mr. Speaker, I want to address a question to the Deputy Prime Minister: it relates to questions asked last week regarding textiles and GATT. In view of the fact that the United States protects and maintains 90 per cent of the U.S. textile market for U.S. textile producers, and that similarly the European Economic Community protects and maintains 85 per cent of that textile market for its own domestic producers, what percentage of the Canadian textile market will be maintained for the domestic textile industry in Canada after the cuts which the minister referred to last week are made at GATT?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, I think I can repeat with even greater certainty what I said last week, that there is
April 26, 1978

little prospect that big or major cuts will take place in the textile or clothing sectors as a result of negotiations at Geneva. For reasons that are well known, the textile industry is not the most robust in any of the industrialized countries and all negotiating partners are aware of the difficulties in undertaking substantial cuts in that area.


Paul Wyatt Dick: A supplementary question, Mr. Speaker. Considering that under this government the domestic share of the textile market has gone from 64 per cent in 1966 to 40 per cent in 1978, may I ask what the government intends to do to reverse this trend? If we had a 64 per cent share of the market, we would have another 80,000 jobs today and 80,000 fewer persons on unemployment insurance.


Mr. Basford:: Ask him where he got that French tie.


Allan Joseph MacEachen: Mr. Speaker, from time to time the government has taken steps to provide protection for the textile and shoe industries. Whatever steps are under contemplation will be announced in the usual way.


Paul Wyatt Dick: Why does the Minister of Justice call this a French tie? Is he upset about it? Doesn't he like French ties?

[ Translation]


FEDERAL-PROVINCIAL RELATIONS LAY-OFFS IN QUEBEC-REQUEST GOVERNMENT RECONSIDERS SALES TAX PROPOSALS OF PROVINCE
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of State for Federal-Provincial Relations. I have here a report put out by the Minister of Industry, Trade and Commerce from which I should like to quote a brief paragraph. Quebec was the first victim of the recent increase in unemployment-


Mr. Speaker:: Order. If the hon. member has a question to put, he should do so immediately.


William Heward Grafftey: As the report claims that of the jobs lost in Canada over the last two years 30,000 to 36,000 in the manufacturing sector were lost in the province of Quebec, specifically in textiles, clothing, furniture and footwear, can the government now give the House the assurance that, because of the conditions mentioned in the report, it is now seriously considering the proposal of the Quebec minister of finance with regard to the sales tax?


Marc Lalonde: Mr. Speaker, the hon. member should refer to the report put out in the last few weeks on the state of the footwear, textile and furniture industries in particular; he would then realize that it is above all thanks to the measures
Oral Questions
adopted by the government, the Minister of Industry, Trade and Commerce, and the Minister of Finance, who imposed quotas and reductions on imports, that those industries are now in a better position than they have been in several years. In fact, some of them are doing so well that one has to wait from six to eight months before getting delivery of their goods.
The federal government took steps in the last two years which have led to a considerably improved situation in those industries. As for the general state of the manufacturig industry in Quebec, the hon. member knows full well that the constitutional policy adopted by the Quebec government at the present time has not been conducive to the creation of jobs in the province. Finally, with regard to the sales tax, my colleague, the Minister of Finance, made a reasonable offer to his Quebec counterpart. The latter turned it down, suggesting he had another proposal to make. We shall wait and see what that proposal is. My colleague made it very clear that he would be quite willing to pursue discussions further on the matter.


William Heward Grafftey: I would like to ask a supplementary question.
I would like to know if the federal government is preparing another proposal for the province of Quebec regarding the sales tax. In view of the fact, Mr. Speaker, that in another federal government report the Minister of Industry, Trade and Commerce said that the adoption of the proposal put forth by the Quebec minister of Finance would even help job creation and the economy of other provinces, as Quebec imports a good deal of clothing, footwear, furniture, and the like, will the confrontation with Quebec continue or will we seriously consider the Quebec finance minister's proposal?


Marc Lalonde: Mr. Speaker, there has never been any question of confrontation on that level. The federal Minister of Finance consulted with all his colleagues, including his Quebec counterpart. In fact, consultations with the Quebec minister of finance started 18 days prior to the presentation of the budget, around March 23 I believe, and there have been continued consultations between Mr. Parizeau and the federal Minister of Finance, as well as between the officials concerned. So the government did not seek a climate of confrontation, quite the opposite; this was done in an attempt to come to a solution of co-operation on that level. Unfortunately the Quebec government decided not to co-operate and afterwards came up with a proposal of its own, which created problems. We have no objection to the Quebec government eliminating the sales tax. We have in fact proposed to extend the federal contribution.


RETURN OF GRANT MADE TO QUEBEC CANADA MOVEMENT
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I have a question for the Minister of State for Federal-Provincial Relations. Has the Quebec Canada movement returned the $265,520 grant that the federal government gave, as the other unity groups had declared their opposition to this donation?

April 26, 1978
Oral Questions


Marc Lalonde: I regret to see that the hon. member seems ill-informed, Mr. Speaker. Perhaps I should ask him to verify his facts. As far as I know, the groups involved in the question of national unity did not express their opposition to the granting of federal funds. This is true for all groups throughout Canada which receive such funds, including those operating in Quebec. I do not know of groups or organizations in Quebec or elsewhere which raised objections in this regard. I would be very happy to hear the additional information the hon. member may have on this subject.


William Gordon Ritchie: Does the minister feel that this grant can be justified in a moral sense and with due regard for a difficult democratic process?
[ Translation]


Marc Lalonde: Frankly, I think the hon. member is still more confused in his second question than in the first one. Funds are made available to all kinds of groups throughout Canada which are interested in an extremely important matter, namely national unity. Not only do I think that it is in accordance with the democratic process but also I hope with the wishes of all parties in the House which want this country to remain a united country, and I think it is the responsibility of the government of Canada to contribute to this matter in an extremely positive way.

Mr. Speaker, I am amazed that a member of the opposition would be scandalized by the fact that the federal government would contribute to groups working in the area of national unity.


MANPOWER
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. In view of the fact that a Japanese firm, Fujitsu, is working on a contract to instal certain communications equipment for Teleglobe, a Crown corporation, at its offices on Pharmacy Avenue in Toronto, and in view of the fact that this work is being done by Japanese installers employed by Teleglobe brought into Canada to do that work and that more are expected, and in view of the fact that the minister's department has issued special work permits to these people, can the minister tell the House why his government is issuing special work permits to foreign nations to do work which could be done by unemployed, skilled Canadian labour?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, I am not familiar with the particular case

to which the hon. member refers. In the ordinary course of events, we issue work permits or visas to individuals who have particular or special skills. This often results in more work for Canadians, not less. Because the Japanese bring in this particular skill, others who participate in the assembly process have jobs that they would not have if the skill was not available.


John R. Rodriguez: A supplementary question, Mr. Speaker. I never heard such hogwash in all my life. In view of the fact that Teleglobe is a Crown corporation, and at the present time has placed this order with a Japanese company and has Japanese workers at this plant, and in view of the fact that we have Canadian installers and Canadian manufacturers who can make this equipment, can the minister tell the House why a Crown corporation placed an order with a foreign installer, with foreign help, when Canadian firms are available to provide the equipment and service?


Jack Sydney George (Bud) Cullen: Mr. Speaker, if the hon. member had a genuine interest in this particular problem, he could have given advance notice of a particular contract. He is more interested in bombast and rhetoric. I will check into it and find out the real answers, not those we have been hearing from the hon. member.


PRIVILEGE
William Herbert Jarvis: Mr. Speaker, I rise on a question of privilege which relates to the questions I put to the Solicitor General (Mr. Blais) at the beginning of the question period. Subsequently similar questions were put to him by the hon. member for New Westminster (Mr. Leggatt). These questions related to 24 monthly reports prepared for and delivered to the then solicitor general in 1971, he now being the Minister of Supply and Services (Mr. Goyer). As a result of the answers given by the Solicitor General one thing appears clear, that these reports are no longer available. At least they are not available according to the present Solicitor General.
In my first question regarding these documents I understood the Solicitor General to say that they had been destroyed in the normal course because they were dated more than three years ago. Subsequently, when questions were put by the hon. member for New Westminster, the Solicitor General said, and I thank him for saying so, that he may have inadvertently been misleading in replying to my first question in that he presumed they may have been destroyed because this was the normal course of events.
The issue in my question of privilege is whether the Solicitor General did inadvertently mislead the House in terms of the destruction of these documents. What is difficult for me, sir,
April 26, 1978

and I presume for all members of this House, is to believe that documents dated 1971 and 1972 may have been destroyed in the normal course of events, when subsequent documents of exactly the same nature, dated 1973 and 1974, were not destroyed but were adduced as evidence before the McDonald Commission. If I am not mistaken that evidence was adduced by Assistant Commissioner Venner. On the basis of the answers given today by the Solicitor General it is very difficult to understand whether documents dated 1971 and 1972 might have been destroyed in the normal course of events but subsequent documents of exactly the same nature were not.
I cannot stress too much the importance of these documents. The documents relate directly to the basis of knowledge of the then solicitor general about electronic surveillance activities. I did not say that it related to security service surveillance, not at all. I did not mention the words security services in any of my questions that I am aware of, but it is extremely important when one realizes the nature of the documents.
It is a monthly report to the Solicitor General which presumably he must initial receipt of, and presumably he may make notations on it instructing members of the RCMP as to his wishes with respect to this important part of law enforcement activities. The report goes directly to the Solicitor General of the day. Presumably instructions or notations may be added by the Solicitor General to those monthly documents. It goes to the very heart of the Solicitor General's knowledge of activities of the day. It has nothing to do with the infringement upon the rights of the McDonald Commission in the normal course of their inquiry. It is also inconceivable-


Mr. Speaker:: Order, please. The hon. member has made the point that the Solicitor General (Mr. Blais) may have misled the House during the course of his response to questions. That was the purpose for which he was given the floor. I do not want to restrict him unduly, but I do not think he ought to go on to argue the importance of the question.


William Herbert Jarvis: Mr. Speaker, I apologize if I have infringed upon you. The destruction of documents is the issue upon which I raised my question of privilege. May I reserve my right to make the appropriate motion once I have had a chance to check the record, which is not available to me as yet? I think the important answer was the answer to the first question I put to the Solicitor General at the start of the question period today.


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, on that point I simply indicate to the hon. gentleman that I did point out subsequently that in the event that I did say they had been destroyed in categorical fashion, perhaps that could have been misleading to the hon. gentleman. I did correct that, Mr. Speaker, by indicating that I presumed they had been destroyed because that was the current procedure being followed within the RCMP, and that documents older than three years may have been destroyed. However, in order to answer the hon. gentleman, I would be pleased to check and find out if the documents might in some way be mislaid. I indicated to
Privilege-Mr. Stanfield
the hon. gentleman that the matter came to my attention this morning in the same way that it did to him.


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, I should like to make a point and I would like to make it clear for all hon. members. It regards some reports concerning electronic surveillance that may have been submitted to me by the RCMP. Those reports have never been in my files, have never been stored in my filing cabinets, have always remained in the hands of the RCMP. And if such reports have been destroyed, I have never given instructions to that effect and I have not been involved in their destruction.


Mr. Speaker:: The hon. member for Perth-Wilmot (Mr. Jarvis) raised by way of a question of privilege answers which may have been misleading in some way to the House. That was the gist of his question of privilege. He requested an opportunity to examine the record to determine that. The Solicitor General has indicated in response that he will re-examine the problem to see if there is any matter which needs to be further clarified. This issue will remain in abeyance until those two steps have been taken.


MR. STANFIELD-SURVEILLANCE OF CANDIDATES SEEKING PUBLIC OFFICE
Robert Lorne Stanfield: Mr. Speaker, I would like to raise a question of privilege. This afternoon I raised questions with the Solicitor General (Mr. Blais) which I think touch on matters of fundamental concern to members of this House respecting possible surveillance of candidates for election to this House as well as to other political offices in the country, on grounds which are admittedly set forth in a document.
I do not question and I do not rise in my place, after being in this House for ten years, to dispute the right of the Solicitor General to refuse to answer a question. I am not arguing that ordinarily he must answer my question. My question of privilege is that he did not simply refuse to answer the question, but that he took the position that this matter was in the hands of the McDonald Commission and will be dealt with, as I understood him, perhaps secretly. I took it that he was telling me that there was no way in which the Government of Canada would give me the information I was seeking as to whether these instructions have gone out, or whether members or candidates for election to this House are in fact subjected to this kind of surveillance under the very loose and broad terms as set forth in this document.
I suggest to you, sir, that it is a violation of the privileges of this House for a minister of the government not simply to say that he is not going to answer that question but for him to say that this is the business of the McDonald Commission and that this is really none of the business of members of this House.
I do not wish to take more time, but it is a matter about which I feel most strongly. The Prime Minister (Mr. Trudeau)

April 26, 1978
Privilege-Mr. Stanfield
told us that in 1975, for example, the government had instructed the security forces to discontinue surveillance of legitimate political parties in the country. I presume the Prime Minister made that statement to the House because he recognized that this is a matter of fundamental concern to members of this House. I submit in all seriousness that it is a breach of the privileges of this House for the Solicitor General, the chief minister responsible in this area of government in stating government policy, to tell me, as the member for Halifax, that it is none of my business, that this concerns security and it is not the business of any member of this House as to what kind of surveillance is exercised on candidates for this House.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I emphasize again, so there will be no confusion, that I am not disputing the right of the minister in the question period to refuse to answer my questions. He went far beyond that, I submit. If Your Honour believes I have a prima facie question of privilege, I will at the first opportunity submit a motion to this effect.


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, the document to which the hon. member refers, was, as he well knows, the subject of a newspaper report this morning. I like the hon. gentleman and I would like him to be assured that it is my preoccupation and main concern to ensure there is never any breach of the privileges of any of the members of this House.
I would indicate to the hon. member that it is well recognized in matters affecting national security, and the operations of the security service are one of the areas affecting national security, that those matters are not made public in the House. That is the reason why the government, by order in council, created the McDonald inquiry. That inquiry is reviewing the procedures of the security service of the RCMP.
That has been the practice not only in this House and in Canada, but in all jurisdictions that owe their traditions to the Mother of Parliaments in Great Britain. When we are dealing with an article relating to documents that could well involve matters of national security, I suggest to the hon. member that the proper course of action is to keep those matters in confidence. If those matters need examination, then they are being examined now by the McDonald inquiry.
Relating to the surveillance of members of this House, the Prime Minister (Mr. Trudeau) has written to the Leader of the Opposition (Mr. Clark), and the same evidence has been made available to the Leader of the New Democratic Party (Mr. Broadbent), to the effect that there is not surveillance of the members of this House and there has not been while he has been Prime Minister of Canada.
Relating to the surveillance of the legitimate political parties, I replied to the hon. member very specifically to a specific inquiry, indicating that the Prime Minister had issued directives and that the security service of Canada is abiding by those directives.

In terms of surveillance of individuals who may be acting contrary to Section 16(2) of the Official Secrets Act, a section passed by this House, that is a matter of proper investigation by the security service of this country.


Mr. Speaker:: The hon. member for New Westminster (Mr. Leggatt) seeks the floor on a separate question of privilege. The hon. member for Greenwood (Mr. Brewin).


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I want to say that we feel the hon. member for Halifax (Mr. Stanfield) has made a most important and valuable point, and that the privileges of this House are indeed concerned with the matter that he has raised.
First, it is said that because the McDonald Commission is making inquiries, the result of these inquiries may be postponed from month after month, that somehow or other that diminishes the powers of this House. I deny that proposition. This House is the supreme court of the land. There is no way in which the rights and privileges of this parliament can be curtailed merely by reason of the fact that some other tribunal is inquiring into some aspects of the fact.
We go from there to the same old thing which we have heard again and again, namely, reference to national security. If there are documents that throw light upon whether the members of this House are or have been subjected to surveillance, then no question of national security arises with regard to that matter. This is a matter which mainly affects the members of this House. I think we are entitled to the fullest answers from the minister. Let him give up these weak-kneed, foolish, misleading, and thoroughly unsound suggestions that, because it affects national security, this House is not to get the information to which it is clearly entitled.


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I wish to continue briefly on the same question of privilege, further to the remarks of the hon. member who has just spoken.
The Solicitor General (Mr. Blais) in dealing with this general question ought to say to this House whether he in fact is satisfied with the attitudes and truthfulness of some of the top officials of the RCMP on whom he has to depend for information, which in turn he has to give to the House. I say this in view of the answer given by Superintendent J. P. Nowlan to counsel named Bruno Pateras when he was questioning an operation which he considered typical of illegal activities. He asked Superintendent Nowlan, "To what limit will you go, if there is a limit, in giving information that is false?" Superintendent Nowlan said, if this newspaper report is correct, that "it depended on the situation."
The Solicitor General owes the House a clear and definitive statement as to what length he will go before he will take action, keeping in mind what the hon. member for Greenwood (Mr. Brewin) has said about the tendency to put all the responsibility on the McDonald Royal Commission. The Solicitor General should definitively say if there is a point to what limit he will go in apologizing, covering up, or condoning
April 26, 1978

lack of information which surely he must know he, as minister, was entitled to receive before this time.


Mr. Speaker:: The hon. member for Halifax (Mr. Stanfield) has raised, by way of a question of privilege, questions and answers that may have a fundamental relationship to the ability of persons to campaign for membership in this House free from any interference. That was the purpose of the matter raised by the hon. member for Halifax and certainly the very clear tone of the support given to it by the hon. member for Greenwood (Mr. Brewin) and the hon. member for Central Nova (Mr. MacKay) who contributed to that side of the discussion.
The hon. member for Halifax did not accompany his remarks by a motion today which would call for some action by the Chair. He did indicate that, after reflection, if the Chair felt there was a basic matter of privilege involved, he might put a motion in due course. I will therefore give the matter further consideration.


MR. LEGGATT-ANSWERS GIVEN BY SOLICITOR GENERAL DURING QUESTION PERIOD
Stuart Malcolm Leggatt: Mr. Speaker, my question of privilege arises as a result of the answers given by the Solicitor General (Mr. Blais) in the House today concerning the correction that he made to the answer given to the hon. member for Perth-Wilmot (Mr. Jarvis). In answer to the hon. member for Perth-Wilmot, he indicated he may have been in error by saying that the missing 24 documents were destroyed. He indicated in his answer that those 24 documents in fact may have been mislaid.
My question of privilege is this: while I realize the Solicitor General does not have an obligation to make answer in this House, he surely has some reasonable obligation to this House to inform himself so that he can make some answer. In this particular instance, the records of the RCMP, in terms of the documents that have been destroyed, are available to the Solicitor General. He comes very close to misleading this House by simply refusing to ask the question or get the information before appearing here, on a day when he knows that the major business of the House will deal with his department, and when he knows from news reports he has read over the past three days that it is his department that is under attack. If he does not want to answer and say it is in front of the McDonald inquiry, that is one matter. Another question is whether he should make any kind of reasonable inquiry to determine the accuracy or otherwise of newspaper reports.
It is clear the minister has not done that today. It is clear he has not checked that with the RCMP in terms of records being destroyed, otherwise he would have been able to provide a clear answer to the hon. member for Perth-Wilmot. I submit that comes as close to misleading hon. members on this side as you can get.
Privilege-Mr. Brisco


MR. BRISCO-EXAMINATION OF DEPARTMENTAL ESTIMATES
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, I rise on a new question of privilege to seek your advice and assistance. Although there is nothing unusual about a motion under Standing Order 43 being rejected for lack of unanimous consent, it nevertheless brought to bear the question of the failure of certain ministers to bring their estimates before a standing committee.
I am disturbed over the fact that not only have we had such a refusal in the Standing Committee on Labour Manpower and Immigration, but it is perhaps coincidental that for some time now there has been the absence of the Minister of Indian Affairs and Northern Development (Mr. Faulkner), the periodic absence of the Parliamentary Secretary to the Minister of Indian Affairs and Northern Development (Mr. Milne), and the protracted absence of the chairman of the Standing Committee on Indian Affairs.
In spite of the charges and allegations which I have made, and which have gone unchallenged, I am concerned that there should still the be failure to call the estimates of the Department of Indian Affairs and Northern Development before the standing committee. In the face of these facts I would appeal to you, Mr. Speaker, to take such measures as would oblige ministers to bring their estimates before the standing committees. What are they trying to hide?


Arthur Jacob (Jake) Epp: I intend to be very brief, Mr. Speaker. I sought to raise this matter today under the terms of Standing Order 43. The Standing Committee on Labour, Manpower and Immigration has not been called upon to examine estimates since the estimates were referred to it. The committee has nevertheless examined in detail Bill C-8 and Bill C-45. When we were considering Bill C-45 I raised this question of the referral of estimates to the committee-I made a point of it and discussed the matter with the chairman. But at no time have we received any commitment that the estimates would be brought before us. There is roughly one month left for this work, otherwise the estimates will be deemed to have been passed. It is of critical importance that members should be given an opportunity to examine these estimates on behalf of the people.


An hon. Member:: It may be only one hour.


Arthur Jacob (Jake) Epp: Whether there is an election or not, the principle remains. The government, and, to be specific, the chairmen of parliamentary committees, have used their positions to prevent estimates being examined, and I appeal to you, Mr. Speaker, to give us some advice and guidance on the matter and explain what rights we have on behalf of our constituents to examine these estimates. The restriction of time now available to us makes a farce of the committee system.


Mr. Speaker:: Order, please. Without consulting the precedents, my memory, if it serves me well, tells me it is fundamental to the whole system that there be an examination of
4890

April 26, 1978
Introduction of Bills
estimates and, this being the case, the phase of the parliamentary authority which relates to the financial accountability of our work here, demands that when the estimates are referred to the standing committees they be examined there in a meaningful way, and that members ought not in any circumstances to be deprived of their right to carry out such an examination. However, it is not entirely clear that the Chair has a very direct line of authority, although I would think it at least has one of inquiry into the matter to determine whether or not there has been any difficulty. I would presume that those concerned with the management of business in the particular standing committees referred to would want to contribute to our discussion before I made any decision. I will certainly give them the chance to do so.


POINT OF ORDER
Mr. Arnold Malone (Battle River):: On a point of order, Mr. Speaker, I rose to catch your eye during the question period today and my question would have been directed to the Minister of National Revenue (Mr. Guay) if he were not in the Senate. I would ask any of the ministers on the other side, since the Deputy Prime Minister (Mr. MacEachen) is not in the House, who is the minister in charge of Revenue Canada? This is just in case I should catch your eye at some future date.


Stanley Ronald Basford: I believe that question was answered yesterday.


Mr. Baker (Grenville-Carleton):: Not satisfactorily.


Andrew Hogan: If the answer was given yesterday, would the Minister of Justice (Mr. Basford) please repeat it so that we might know to whom we can direct questions?



ROUTINE PROCEEDINGS


Mr. Jim Balfour (Regina East) moved: for leave to introduce Bill No. C-446, to amend the Canada Elections Act (election expense period).


Some hon. Members:: Explain.


James Balfour: Mr. Speaker, this bill is in response to reports that some candidates nominated for the next federal election have already spent as much as $50,000 on pre-election campaigning. Although such expenditures are currently unrestrict-

ed, this spending is in clear violation of the spirit of the Election Expenses Act which attempts to make campaigning fairer by imposing ceilings on campaign expenditures. By extending the time during which election expenses are deemed to have been incurred to include the period following a candidate's nomination but before an election writ has been issued, this bill recognizes that in practice election campaigning begins long before elections are called. The effect of the bill would be to close a loophole in our election procedures.


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

Stanley Ronald Basford: for leave to introduce Bill C-49, to amend the Financial Administration Act (Garnishment).
He said: Mr. Speaker, checking the authorities I find it is appropriate for me to rise on a point of order at this point inasmuch as this bill involves a matter of the Crown's prerogative, and to point out to the House, after leave is granted and before first reading, that His Excellency the Governor General has been informed of the purport of this bill, and has given his consent as far as Her Majesty's prerogatives are affected to the consideration by parliament of the bill, that parliament may do therein as it thinks fit.


Walter David Baker: Mr. Speaker, I do not rise to question what the Minister of Justice (Mr. Basford) has said. I think the procedure he has felt bound to follow today is one which might appropriately be followed hereafter with respect to government bills generally so that there would be no need for us to wait for press statements and so on. 1 think a short summary from ministers with respect to their bills is just as important as a short summary from private members on such occasions.


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

Arnold John Malone: Further to my point of order, Mr. Speaker. I have checked through Hansard for yesterday and I find nothing in there which indicates who speaks on behalf of Revenue Canada. I wish to raise a series of questions with whoever is responsible and again I ask, who is the minister?


Mr. Speaker:: The Minister of Justice (Mr. Basford) is correct. The matter was dealt with and an answer was given by
April 26, 1978

the Prime Minister (Mr. Trudeau). Whether that answer was satisfactory or not is something the hon. member could take up at the next question period.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, the following questions will be answered today: 766, 815, 1,111, 1,211, 1,266, 1,456, and 1,502.
Mr. Speaker, I ask that the remaining questions be allowed to stand.


Mr. Broadbent: 1.	Is there a practice, established either by statute, regulation, policy directive or otherwise, that the Royal Canadian Mounted Police maintain a list or fde of all documents pertaining to investigations, that have been incinerated?
2.	Is there a list of the documents that were incinerated by the RCMP on June 2 and June 3,1977 and, if not, for what reason?
3.	Is there a practice, established either by statute, regulation, policy directive or otherwise, that sets out the period of time that documents related to RCMP activities are maintained prior to their incineration or destruction and, if so (a) what is the period of time (b) was such a practice followed regarding the incineration of documents on June 2 and June 3, 1977 and, if not, for what reason?
4.	Is there a practice, either by statute, regulation, policy directive or otherwise, that all documents, prior to their destruction by the RCMP, are microfilmed and, if so, was such a practice followed in relation to the documents that were incinerated on June 2 and June 3, 1977 and, if not, for what reason?


Hon.   J.-J. Blais@Solicitor General: 1. No. The only requirement is a statistical report on the volume of records destroyed annually which must be submitted to the Dominion Archivist.
2.	No. There is no requirement to compile or retain such a list.
3.	Yes. This period is known as the retention period and is the time the records are retained prior to a review for disposition. This review may cause a record to be destroyed, to have a further period of retention added or to have the record classed as historical and thereafter retained indefinitely, (a) The retention periods are variable depending on the type of records and may be from one year and up as approved by the Dominion Archivist vide Public Records Order P.C. 19661749. (b) Yes.
4.	No.
Order Paper Questions


Mr. Cossitt: 1.	Is the Minister of Employment and Immigration aware that the Ottawa Journal of November 30, 1977 quoted him as saying that the so-called fraud squad within the Unemployment Insurance Commission had not been disbanded but "merely reorganized and it is ever vigilant to the situation"?
2.	Was the Minister correctly quoted and, if so, has the situation changed since the answer to Question No. 2,765 of the Second Session of the 30th Parliament?


Jack Sydney George (Bud) Cullen: 1. Yes.
2. Yes he was correctly quoted, and, the situation on which the reply to question 2765 of the Second Session of the Thirtieth Parliament remains the same. The Special Investigation Division of the former UIC was organized between late 1973 and early 1974. At the end of 1974 the operations of the division, which had been carried out separately from the benefit control activity were decentralized and integrated with normal benefit control investigation activities. The Special Investigation Division has not been in existence since early 1975.


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


Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: In so far as the Department of Industry, Trade and Commerce is concerned:
Fiscal Year	Amount'
70/71	$40,434
71/72	Nil
72/73	Nil
73/74	Nil
74/75	Nil
75/76	Nil
76/77	1,194
77/78	7,446
* Amounts are for grants and contributions only. Departmental accounting records for administrative and operational expenditures are not kept in a manner which readily allows breakdown by constituency.
In so far as Statistics Canada is concerned: For each fiscal year since 1970 the approximate expenditures in the constituency of Nickel Belt were as follows:
Labour Force Survey	Census	Total$	$	$1970/71	2,000	49,000	51,0001971/72	2,000	2,0001972/73	2,100	2.1001973/74	2,300	2.3001974/75	4,000*	4,000
80038-20%

April 26, 1978
1975/76
1976/77
Order Paper Questions
Labour Force		
Survey	Census	Total$ '	$	$4,500	78,000	82,5002,300	2,300
* The increase in cost resulted from the fact that both the old and the new LFS were run for one year. As well, the sample size for subsequent surveys was doubled.
In so far as Foreign Investment Review Agency is concerned: None.
In so far as the Metric Commission is concerned: Not applicable.


Mr. Herbert: 1.	For each year 1968-1978 to date, what was the total number of foreign university students in Canada?
2.	For the same years, what was the total number of students who remained in Canada during the summer vacations?
3.	For the same years, by province, what was the number of foreign students who obtained summer employment?


Jack Sydney George (Bud) Cullen: 1. 1968, 16,906; 1969, 17,271; 1970, 15,229; 1971, 16,677; 1972, 20,826; 1973, 14,950; 1974, 18,035; 1975, 24,004; 1976, 29,436; 1977, 29,380.
2.	Not available.
3.	1968 to 1973 not available. During June, July and August of each of the following years, employment visas issued to foreign students were:
1973	1974	1975	1976	1977	1978Newfoundland	13	13	20	27	14	notPrince Edward Island	12	7	2	2	2	availableNova Scotia	28	26	44	45	49	New Brunswick	25	28	42	63	52	Quebec	359	208	254	312	329	Ontario	1,159	661	853	820	769	Manitoba	104	206	49	53	46	Saskatchewan	124	69	121	148	57	Alberta	433	354	732	450	348	British Columbia	218	143	219	164	169	Yukon/N.W. Territories	4	1	6	3	-	Total	2,479	1,716	2,342	2,087	1,835


Mrs. Pigott: Has any government organization identified qualified women for promotion in the Public Service and have any career paths been developed for them and, if so, how many women have been identified?


Hon. John Roberts (Secretary of State):: I am informed by the Public Service Commission as follows: the Public Service Commission has established special development programs for those considering entrance at the officer level and those at the middle management level. Administrative Trainee Program:
[Mr. l.oiselle (Chambly).J
The Administrative Trainee Program offers careers in the administrative field of the Public Service to recent university graduates recruited externally and administrative support category personnel recruited from within the Public Service.
External Administrative Trainees
* One more course is scheduled for 1978 and it is anticipated there will be some women participants.
Every year, a few specially selected middle level public servants are chosen to study at institutions with an international reputation. These are, l'fecole nationale d'administration, Paris, France (program started in 1964), the British Program for Administrative Principals, London, England, (program started in 1967), l'ficole nationale d'administration publique, Quebec City, Canada, (program started in 1970), College of Europe, Bruges, Belgium, (program started in 1977). Since the first program was initiated in 1964, until the most recently
Year	Women	Total M & F1971	51	2001972	41	1521973	88	2501974	70	2251975	50	1331976	35	1001977	64	148399	1,200Internal Administrative Trainees	Year	Women	Total M & I1971	4	341972	6	391973	19	731974	27	661975	12	321976	10	231977	12	3090	297Career Assignment Program: The Career Assignment Program is designed to identify middle management public servants and develop them for more senior responsibility. Federal departments identify and nominate candidates, both men and women, for the Career Assignment Program (CAP). CAP	started in 1968 and	to date,	there have been the followingnumber of women participants:	Year	Women Total M & F	1968	1	351969	1	1 1 11970	1	911971	4	1011972	10	941973	8	521974	9	441975	20	671976	15	671977	9	641978*	9	4387	769
April 26, 1978

established program in 1977, only 114 public servants have participated of which there were 5 women. To date a total number of 92 women have been sponsored for the Career Assignment Program and the Special Development Programs. Several federal departments have designed programs to benefit and enhance the career opportunities for their own women employees. Data on these programs is not available from the Public Service Commission.


Mr. Alexander: 1.	Did the government establish a committee to review the area of retirement income including options available to holders of registered retirement savings plans (RRSP's) and, if so (a) on what date (b) to which Minister does it report (c) what are its terms of reference (d) who are the Members?
2.	Will the committee determine what options are available to holders of registered retirement savings plans when they reach the age of 71?
3.	Is the committee expected to report its findings or recommendations and, if so (a) on what date will it report (b) will they be tabled in the House of Commons?


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: 1. The government began a review of the retirement income system in 1976. The review is being conducted under the auspices of the Minister of Finance, the Minister of National Health and Welfare and the President of the Treasury Board. The ministers are being assisted by officials from their respective departments, other departments and a task force. The review covers the various sources of retirement income including the public pension programs, employer-sponsored pensions and personal saving, as well as registered retirement savings plans (RRSPs).
2.	The options available to holders of registered retirement savings plans have been reviewed and, as a result of this examination, two additional alternatives to holders of RRSPs were introduced in the recent Budget (April 10, 1978). The new options available are as follows: (a) a fixed-term annuity may be purchased to provide benefits to age 90, and (b) the savings may be transferred to a new investment vehicle-a Registered Retirement Income Fund (RRIF). Financial and other institutions that are now eligible to issue RRSPs will be permitted to offer the new options. Under both alternatives, retirement income will be provided to age 90. Further details are available in the budget document.
3.	The task force report is expected to be available for consideration by ministers within the next month or so. A decision concerning tabling of a public document based on the report will be taken after the cabinet has had an opportunity to study it.


Mr. Patterson: What amount was spent by the government in the Constituency of Fraser Valley East under the Winter Job Expansion Programme in each year of its duration?
Motion for Papers


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: Four loans were made under the Winter Capital Projects Fund in respect of projects located in the constituency of Fraser Valley East. The principal loan details are as follows:
Municipality	Project	Amount of Loan	Amount of Loan ForgivenessMission	Renovation of hos-	$130,000	$ 57,252.42Chilliwack	pital Upgrading of roads	275,000	100,381.93Chilliwack	Addition to fire hall	41,755	12,875.00Mission	Construction of	275,000	73,054.19[English]	municipal hall


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


Some hon. Members:: Agreed.


Roger Carl Young: Mr. Speaker, notice of motion No. 69 for the production of papers is acceptable to the government.


Mr. Speaker:: Does the House agree that notice of motion No. 69 be deemed to have been adopted?


Some hon. Members:: Agreed.


[Stage Direction]
Motion No. 69-Mr. Knowles (Winnipeg North Centre):
That an Order of the House do issue for a copy of the letter of condolence that the Department of National Health and Welfare now sends to a woman who has been in receipt of the Spouse's Allowance but whose husband had died before she has reached age 65, including the portion of the said letter that informs her that her Spouse's Allowance has been discontinued.
Motion agreed to.
Roger Carl Young: I ask, Mr. Speaker, that all other notices of motions be allowed to stand.


Mr. Speaker:: Does the House agree?


Some hon. Members:: Agreed.

April 26, 1978
Export Development Act



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, April 24, consideration of the motion of Mr. Horner that Bill C-36, to amend the Export Development Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
William Gordon Ritchie: Mr. Speaker, I welcome this opportunity to speak about this bill because I think it exemplifies some of our major problems in export markets. The intention to assist exporters is, of course, laudable and beneficial to certain small companies. Under certain circumstances that assistance is recommended. The idea of assisting a small struggling Canadian company to land an order in a developing country has much appeal. It appeals to our sense of trying to help the Canadian company find its way through the maze of external politics in foreign countries, often in competition with other countries much more export-oriented than is Canada, particularly in the manufacturing field.
Furthermore, when there is any question about our aiding exports in the very large amounts we are, the answer always seems to be that other countries such as the United States, Germany, Japan, the United Kingdom, France, and Italy all have their own forms of export development assistance, and unless we do the same our companies will be at a serious disadvantage.
When we look at our exports of manufactured goods and the locations of firms given assistance by the Export Development Corporation, we can easily come to the conclusion that nearly all our exports of manufactured goods off the North American continent are financed by the EDC.
Recent actions of the EDC call into question the value of much of what it has been doing. If it is necessary to give so much export assistance to many of our producers, surely it is questionable that this is a good way to go about promoting exports. The mere fact that so many of our exports are financed by the EDC and need to have that assistance, really means that that portion of our economy not assisted by government is being forced to help that portion which is.
Certainly the EDC in the broadest sense seems to be nothing more than an export subsidy program, albeit the intention is to assist our exports. There certainly are disadvantages. What about some of the loans the EDC has been making? From a social point of view, assisting developing nations and lending to companies involved in these markets strikes a responsive chord generally among Canadians. However, what about financing steel mills in Texas and New Jersey? Are those developing states in the great U.S.A.?
We have always considered our pulp and paper industry to be one of our leading exporters, yet on February 8, 1974, the

EDC announced a $82.5 million loan for a forestry plant in Iran. Oil prices have quadrupled the income of Iran in the last four years. In 1976, $102 million went to a pulp and paper mill in Poland. In 1977, $1.8 million went to a pulp and paper project in Peru, which has a left-wing dictatorship and has just completed the purchase of many military aircraft from Russia, some of which passed through Dorval on January 19 of this year. In November of 1977 there was a $102 million loan for a new pulp and paper mill in Iran, and in December of 1977, $5.5 million went to a pulp and paper mill in Romania. In March $57 million was put up for two projects in Argentina. In Argentina we are building an atomic plant at a loss of some $100 million.
It seems that Canadian exporters have to be assisted to obtain export orders abroad. Many recipient countries, such as Poland, have the avowed aim of destroying our society as we know it, while others, such as Algeria, Iran, and Venezuela, are wealthy countries and have the capacity to be as stable and as wealthy as Canada, yet we see fit to lend them money at low rates of interest. Officials of the EDC have stated that the money is borrowed outside the country and that it does not constitute a burden on the Canadian economy, but the mere fact that the money is borrowed abroad does not absolve Canada from responsibility. In fact, the covenant of Canada is also on loan. It is almost the same as co-signing a note at the bank for a friend. EDC loans eventually are a charge on the Canadian economy and must be made good if the loans should be negated.
As I understand it, most of the money is borrowed in the Euro-dollar market. More and more this market, evidently, becomes less and less stable, and some suggest that that might create an economic recession.
The Euro-dollar has no backing. If a person makes a deposit of $10,000 in a bank in Europe and keeps that deposit in the form of dollars, the bank lends out those dollars to a creditor in Europe or in some other part of the world, who then re-lends them to someone else. The Euro-dollar is an American currency which has not been changed into the currency of the country of receipt. The United States does not owe those dollars and is not obligated to redeem them. If a person receives value for his goods, and if the money is held in the form of American dollars, those dollars still rest in the Eurodollar market, and the United States Treasury has no obligation.
There are $350 billion to $400 billion Euro-dollars whose value has already been received, and there is no bank standing behind those dollars. This is where the EDC borrows its money. That money cannot be presented to the United States treasury for gold, for U.S. treasury notes or for U.S. greenbacks. There is an uncontrolled mass of money floating around in the world monetary sky. It has no home and no guarantor, and this is where the EDC is getting its money. This indicates that, in the final analysis, Canada is responsible for the loans made by the EDC, even though the officials of the EDC try to say it is not.
April 26, 1978

There is increasing concern about the world economic situation, and there are those who suggest that the western world is on the brink of a depression. Throughout the capitalist west, unemployment seems to be moving upward. Depressing events are occurring, and the old economic mechanisms appear to be losing efficiency. Economies cannot be managed the way they once were. The British found that they incurred heavy budgetary deficits, but inflation continued to rise.
In connection with the problems of the EDC it should be pointed out that no convincing theory has been advanced to provide an alternative to the old mechanisms. Monetarists suggest solutions, but those solutions mean creating more unemployment, at least at the beginning, for which there is considerable resistance in democratic societies where people elect politicians. No one could have forecast the sudden fourfold increase in the price of oil which spoiled all the neat long-range forecasts of that time. Arising out of this oil price increase, the current instability in the balance of payments, and chaos in international currency markets, there have been no new mechanisms developed to deal with the situation. One of the disturbing effects of all this, including the actions of vehicles such as the EDC, has been that we are internationalizing economic policy.
At the recent summit meetings in France, Puerto Rico, and Britain-and the one coming in July in Bonn-economic politics dominated. Mr. Callaghan, the British Prime Minister, is relying on the Bonn summit to provide some answers. We are relying on the EDC to provide help, and increasingly economics are taking the place of weapons in defensive alliances. At last year's summit in London all the participants agreed to increase economic growth so that world trade would expand and unemployment fall, but this has not happened. Germany, which many nations blame for not having done enough, has tried to re-inflate its economy on three occasions, but the result has been a disappointment.
The great problem is that the United States, the great economic locomotive of this world, is plagued by a falling dollar, a balance of payments deficit of astronomical proportions, and an economy which threatens to be severely inflated. Small wonder then that protectionism is rife and that it gives economic internationalists bad dreams. It is a problem for the Export Development Corporation.
The protectionist lobby in Great Britain, which is mostly left wing, complains that the number of unemployed in Britain might increase to 4.5 million, that is, three times as great as at present.
Import controls are another subject about which the protectionists are complaining. The industrialized west could also raise high tariffs against Asian countries, notably Japan. President Giscard d'Estaing seems to be following this line. The dilemma which faces the world is obvious, with the protectionists arguing that, if countries do not follow their policy, a depression will result, while the opponents of protectionism argue that it is the introduction of these tariffs which will
Export Development Act
result in a depression. Most people agree that one way or another we are going to have problems, and this is a sobering thought for those in the western world.
No one would seriously doubt that we have been able to maintain our high standard of living largely owing to the availability of cheap energy in the form of oil and gas. Although there might be a small glut of oil now, the future seems bleak. The United States, the great locomotive of the world, is now importing almost half the oil it uses. If U.S. oil supply is cut off in the Middle East by either the Russians or any other nation in that sector of the globe, it will result in severe economic hardship for the United States, and perhaps severe depression.
Anything can be exported at a price, and Canada is becoming a source of cheap and ready money to some of our intensive competitors. I have spoken about the financing by EDC of the $100 million pulp and paper mill in Poland. The government, and others, expect Poland to be one of the major competitors in the European pulp and paper market. Karl Marx said long ago that capitalists are so anxious to sell that the Marxist states can continue buying from them in sufficient quantities to keep their own struggling economies alive until they are in a position to overpower them.
Obviously there comes a time when the indiscriminate lending of money for export purposes ceases to be useful. It is unfortunate that what started out to be a useful tool, with the increase in multilateral trade, has reached the point of no return.
In many ways this bill exemplifies the dilemma in which Canada finds itself. In the past 25 years we have had a contrived type of economy, that is, we continue to help one part of the country over another by one kind of government intervention or another, and we favour one area of the country over another by means of government intervention. A classic example of this is the official interference, at least in a moral sense, to prevent the move of Sun Life headquarters from Montreal to Toronto. For some reason the government feels that Sun Life should stay in Montreal. But Montreal is part of Quebec, and that province has said that the use of the English language should be kept to a minimum, if at all. However, it should be kept in mind that the vast majority of Sun Life policy holders come from the English speaking part of the country.
As many industries are now finding out, it is difficult to work in the second language and to have a head office working in a language other than that used by the main group of subscribers, particularly when on this continent English is the language of business. Sun Life is a co-operative mutual insurance company which belongs to its policy holders, and it should have the privilege of deciding where its head office is located in Canada. It should have the right to decide even to move its headquarters to the United States if it so wishes. In view of the fact that the company is a mutual insurance company, the individual policy holders of which have the right to vote, there should be no government interference and no

April 26, 1978
Export Development Act
government disapproval of the decision of the millions of policy holders.
Surely people with investments are entitled to move their investments to whatever location they feel is safe and will bring them the best return. Obviously the fear expressed by many policy holders of Sun Life, that they will be unable to collect their pension should the company remain in Montreal, is very real to them.
Indeed, many parts of Canada would benefit from the movement of head offices out of Montreal, particularly the movement out of Montreal of Crown corporations. So far as western Canada is concerned, both Air Canada and CNR, with their headquarters in Montreal, are totally oblivious to the needs of western Canadians.
Now I would like to return to some of the problems facing the Export Development Corporation. In 1968 its budget was $2 billion. Now the minister is asking for $26 billion. Even taking into account the high rise in inflation, this increase is of great magnitude. Obviously the minister does not expect any export of industrial goods from our country to take place unless it is subsidized by the EDC.
Let us consider again the pulp and paper industry which is one of our largest money earners, with a high level of efficiency. In spite of this, we are lending money all around the world at low rates of interest to countries such as Iran, Poland, and Peru-we have made further loans to Iran this year-to Romania and Argentina, presumably because the EDC believes that the Canadian pulp and paper industry is not going to prosper and that it is better to sell pulp and paper machinery at subsidized interest rates to other countries. But what about our own industry? It will have to modernize its pulp and paper facilities at the going rate of interest of 10 per cent to 15 per cent, while its competitors around the world can get Canadian loans at low interest rates.
Small business can be analogous to big business. Every small businessman could expand his business if he could get his friends to co-sign a note at the bank. Occasionally a small businessman might get an order as a result, but if he persists in following this practice, his business will depend on other people co-signing. This is not a good practice, and it might cause the business to collapse in the long run.
According to EDC reports, many of our exports of manufactured end products from this country have to be financed by the EDC. The question arises as to whether or not the EDC has been successful and whether we have not reached the stage where we will only be able to export our manufactured goods with the assistance of EDC. What will happen then is that the EDC assistance will be a form of subsidy, and the cost of Canadian goods will rise to cover the subsidy. Industries which have exported goods on their own might find that they can no longer compete because the goods are subsidized by EDC at the cost of those that are not. In short, the EDC has a role and a place, and we must question whether or not the role it is playing has become so large that its activities are detrimental to the export community.

When EDC first came into existence there was a need for assistance to Canadian firms wishing to export. No one questions that, and this need continues. However, the activities of EDC might become detrimental in the case of certain exports. We seem to have a passion for exporting manufactured goods at all times, but we must remember that we can only export as much as we import over a period of time. If our export of manufactured goods increases, other products such as grain, raw materials, and pulp and paper, must decrease as, relatively speaking, one cannot go on exporting more than one imports over a period of time.
I will follow with interest some of the matters I have raised when the bill is considered in committee. I believe that as a nation we must consider how much we want to finance and subsidize our exports. Certainly EDC has a subsidizing role to play without damaging the competitive ability of our industry. This is a matter of judgment which is not easily defined. Perhaps some answers will arise when it is studied in committee.


Andrew Hogan: Mr. Speaker, I rise in order to point out a few simple facts relating to the bill before the House and its relationship to the Canadian economy.
Opposition has been expressed by members of parliament to the extension of funds to the Export Development Corporation. That corporation claims it needs those funds in order to fulfil its objectives. Generally parliamentarians, including myself, suffer from a lack of understanding, or perhaps there has not been enough openness concerning the activities of the Export Development Corporation. There is some confusion surrounding the prime objective of EDC.
In any institution which grows and is an appendage of a department, there comes a time when the original purpose evolves into other types of things which were not originally intended in the legislation. The Export Development Corporation is an appendage of the Department of Industry, Trade and Commerce. When the Export Development Corporation was established, it was to assist Canadian exporters. Economic historians have written great tomes about staple exports, particularly since the famous Toronto economist, Mr. Innis, forecast a period of such growth for Canada. He indicated, from an economic point of view that Canada had many natural resources, what he called staples. Our resource industry began with the fur trade and expanded into such things as wheat, minerals, and oil. Economists indicate that Canada has a comparative advantage. Perhaps it is not an economic rule. Perhaps it is just logic which has been taken over by economists, this notion of comparative advantage. The development of Canada has stressed both renewable and non-renewable resources. In the natural course of our development, we became an exporting nation because of our primary resource industries, both renewable and non-renewable.
As time went on, other countries discovered similar resources or substitute resources which could be sold on world
April 26, 1978

markets. To this day, by and large we are a nation which depends upon staples for the standard of living which we experience. When our exports are in trouble, our nation is in great trouble. At the present time our current account deficit is running extremely high. In the past it was covered by capital inflows and borrowings abroad. At the present time it has not balanced out because of the failure of our monetary, fiscal, export, and general commercial policies.
Canada does all right in the merchandise hard goods and soft goods sector, but we fall far behind in the service sector. In order to make up for this, we are forced into large borrowings. Our economy is still structured around the basic notion of exporting mainly primary resource and staple products, plus some processing of them. As far as manufactured end products are concerned, at the present time we are experiencing a deficit of approximately $11 billion. Although it does not seem to worry some people, it should.
Recently an hon. member referred to the idea that Canada is following its historical, natural comparative advantage. Also he indicated that we should not be worried about the fact that our manufacturing industry is not growing. He forgets that many of our comparative advantages are now dwindling because of competition from other countries, and because we have not succeeded in building our own manufacturing capability.
In the process of the evolution of our economy, since the export of staples was so important, during the post war period we arrived at full nationhood. Perhaps Canada is a small or medium-sized power as far as the giants are concerned, but our population grew from approximately 11 million people during the time of the war to approximately 23 million or 24 million people today.
The Export Development Corporation was established to give a shot in the arm to Canadian exports when they were in trouble, in order to maintain Canadian jobs and to increase Canadian jobs. In my section of the country there is a steel plant which is nowhere near the market place when compared to Ontario steel plants. Over the years that plant has depended to a large extent on semi-finished products, as well as being dependent upon selling rails to underdeveloped or less-developed countries. The steel plant has been dependent upon rail market orders, and through its period of public ownership that rail mill in Sydney has been largely assisted by the Export Development Corporation. Thus, EDC has maintained if not increased jobs in that area. Of course everyone realizes there has been a decrease in jobs in that steel plant. If the soft loans which were granted to countries like Mexico had not come about, that Sydney steel plant would have experienced less employment than at present. Another plant in Trenton which is owned by Hawker-Siddeley also was assisted to a large extent and was able to survive.
The original intent of the Export Development Corporation was to improve Canada's natural advantages, as well as our export sector, for the benefit of all Canadians. Some point out that in the evolution of the corporation, in recent years it has made new moves akin to things one might consider as being
Export Development Act
the function of a Canadian international development agency, such as supplying grants and loans to Canadian companies operating in other countries, with the jobs basically going to people in those other countries. It may be true that in some cases this helps Canada's balance of payments and employment picture, but I see this as the essential problem confronting those who are opposed to giving increased funding to the Export Development Corporation at this time. This is an important role for the EDC to fulfil, particularly at this time when we know these less developed countries of the world need help. Nevertheless, when we compare Canada with the United States, Russia, Japan, West Germany, and most other countries of the European Economic Community, this is still a developing country. For this reason we require the type of activity I alluded to in the two examples I gave.
What some of us feel, and a few very seriously, is that the Export Development Corporation has gone beyond its original purpose. It is getting out of hand in allowing certain multinational mining corporations to use its funds to create jobs in Guatemala and Indonesia, through developments such as that of the Inco plant in Sudbury.
We know of the work being done by Eric Kierans at McGill University in respect of what tax deferrals do for this type of thing. You have approximately $11 billion in tax deferrals by multinational corporations, and that is approximately the situation, given a slight interpolation from the last figures put out in the CALURA figures, and yet there is little real investment development in terms of equipment, plant and factories in Canada, most of which are operating at about 80 per cent capacity, then there is an apparent contradiction.
This government has acted through its fiscal policies to assist these large corporations. This was particularly true under former finance minister John Turner. It is amazing just to realize the number of tax deferrals allowed during that two or three year period. As a result of this type of thing and of retained earnings on the part of these corporations, many of them are now very liquid. Some of them suffer from a shortage of cash flow or capital, but many are very liquid.
Given the internal saving or retained earnings, and given the help offered by government in terms of tax and investment credits of a variety of kinds, including the tax deferrals I have mentioned, we cannot understand why these funds are not being turned into jobs for Canadians. The theory is that you put savings into insurance and trust companies, as well as banks and other institutions, which pay you interest, and in turn they lend out that money at a greater interest rate in order to make money for themselves. The corporations then take that money and turn it into plant and equipment for jobs. There is a great missing link here. We have more personal savings in Canada at this time, as a percentage of the g.n.p., as a percentage of disposal income, and as a percentage of national income, than at any time during the last ten years, but we still suffer high unemployment.

April 26, 1978
Export Development Act
We have these special tax deferrals and tax investments which are not being used to increase the number of jobs to meet the needs of the Canadian labour force. If they were being used for this purpose we would not have the 1,040,000 or 1,080,000 unemployed at the present time, and those are the official figures according to Statistics Canada. My leader is not exaggerating when he suggests the real unemployment figure is closer to 1,400,000 when you take into account the number of discouraged workers who are no longer actively looking for employment.
We know the officials of the Export Development Corporation have done a great job in promoting exports throughout the history of this corporation. This is particularly true of the exports from my own area of the country, such as those from the Sydney and Trenton Steel works.
Many people are concerned about the other function of this corporation, and that is the promotion of Canadian multinational corporations, especially mining ones, no matter where they operate. I am wondering whether the Export Development Corporation should be pushing that function when the primary function, as I see it, was to assist export industries in Canada, both in the primary and manufacturing sectors, to compete internationally, through loans and in other ways, in order that jobs for workers would increase. This is vitally important in Canada at this time.
I try to be as fair as I can to the Prime Minister (Mr. Trudeau), particularly in relation to the national unity issue, but in the last four years the major failure of this Liberal government has been in its mismanagement of the economy of this country. This government has mismanaged the economy of this country to such an extent in the last four years that it makes one sad. If we are going to recover we must certainly find a means of developing manufacturing and processing industry in this country rather than in other countries of the world.
From a moral point of view we want to see these underdeveloped countries assisted economically, but we must look at the situation in our own country. I do not think the people in Alberta, who do not even have to pay any sales tax are generally happy that the situation in the maritimes, Newfoundland and elsewhere, is much worse. However, the situation there is not nearly as bad compared to the situation in many underdeveloped countries of the world. I do not think any Canadian will be satisfied until this gap between our standards of living and theirs has been closed. We have both the moral and economic obligation to help these countries, but I do not see that as the role of the Export Development Corporation. It is one for CIDA.
I have just one or two more points to make. Since coming to parliament I have said that one of the greatest failures of Liberal governments over the years has been in not gaining control of our own economy. I say this is a failure of a Liberal government because they have been in power most of the time, although some of my Tory friends were in power for a number of years.

I do not want to be as nationalistic as people in the independent movement in Canada but, Mr. Speaker, there is an important germ of truth in what they are trying to tell us. We cannot continue to have a deficit of $10 or $11 billion in manufactured goods because we lose the ability to produce the primary goods that, through technology, can be turned into finished manufactured goods.
An Australian economist, Colin Clark, has said that the growth of a nation's economy and the growth of the welfare of nations is such that you move from a primary resource stage- principally agriculture-and then, because of changing technology on the supply side and changing demand on the other side, most people get out of primary industries and go to the manufacturing sector and make that labour intensive. Things then become so technologically improved on the supply side and the demand side, with changes against the manufacturing sector, that most people are pushed over into the tertiary or service sector. In other words, you become a society that produces non-things called services, rather than a society that produces things which are called goods.
There is a parallel in all western nations, Mr. Speaker. Much of our labour force has moved into the service industries. Unlike the United States or Japan, Canada has jumped as it were from being a primary producer requiring little labour into a service sector, both government and private, without having a fully developed manufacturing sector. This is hurting us.
I think the Export Development Corporation should be putting emphasis in this area rather than enabling multinational corporations which originate in Canada-and to be fair which have supplied jobs to the primary sector in this country-to move into other countries. It should be helping us build our own manufacturing and processing industries.
There can be debate on how to go about this, given the decisions made in the past regarding tariff structure and capital borrowings from the United States. We must realize that for Canada, the day of reckoning has come, and we hate that to happen during a national unity crisis. We realize there are relatively few separatists in the province of Quebec- probably about 20 per cent, and we are all opposed to them despite the slur that the Prime Minister cast-probably in anger-on all in the opposition last week. It was not fair to say that because we opposed certain things about the sales tax agreement with Quebec that we were favouring the separatist party in Quebec. He can be forgiven, though, because at times we all say things in haste and anger.
The tariff that has protected industry in central Canada is no longer effective. In the last few months questions raised about Quebec in the daily question period generally relate to furniture, footwear, textiles and clothing. These industries have been over-protected from the beginning. Now the same thing is happening in Ontario. We have the most effective protective measures in the western world, Mr. Speaker. A study was done on this subject by Professor Barber of the University of Manitoba.
April 26, 1978

What the Export Development Corporation has done to help our export trade is appreciated, and all parties will probably agree to increase the funding, although we cannot be sure of that. The corporation must ask itself some serious questions about its function as a development corporation, however, and its relationship to the manufacturing sector.
Winston Churchill is supposed to have said that democracy is the worst form of government until you compare it to everything else. One does not have to sit in this House very long to realize that one of the most disheartening things encountered is the difficulty in getting information. Whether I am re-elected or not by the people I respect, admire, and love,
I want to tell members on the other side, or whoever comes to power in this country, that we must have greater freedom of information. We are a democracy, not an Iron Curtain country. We know that some things cannot be disclosed because of the provisions of the Official Secrets Act.
Even in the question period, why should we have a rule that allows a minister to refuse to answer an opposition question? That is undemocratic. We can understand a poor answer, as it is spontaneous, but there is no case for a refusal to answer, as sometimes happens in very important circumstances.
I want to return to my topic, Mr. Speaker, and say to officials of the Export Development Corporation in the gallery, and to the minister in charge of the corporation, who is not here today for whatever reason, that we must find a way to make our institutions more open. We must make this real in fact, not just rhetoric. This applies to the corporation we are now discussing.
In our time in this House we come to have respect for individuals on all sides, regardless of political affiliation, and I have that respect for the hon. member for Peace River (Mr. Baldwin). I have come to the conclusion that one of the most important contributions we can make to parliament is to ensure there is more openness about all our institutions. This will be embarrassing to a government at times, of course. We have before us the lesson of the United States. I have a very high regard for the humility of that nation despite apparent stupidities. We laugh at them at times and we make fun of their presidents sometimes. But when the time came their elected officials told their people. They get much more information in that country from their parliamentarians and from their government than we do here in Canada. I cite that as an example.
1 think the Export Development Corporation is in difficulty, partly because under the Ministry of Industry, Trade and Commerce, not just under this particular minister, but all ministers of industry, trade and commerce, parliamentarians have not been told enough about things they should know. If we continue to make light of parliament, there will come a day when provincial and federal entities in special meetings will become the dominant institution. But at this time as a parliament we do not have too good an image. We can dispel our present image. There are all kinds of hard working people
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here. In general we should take the secrecy out of things. This would be relatively easy to do in most cases, although in certain instances discretion is needed, and certainly the Export Development Corporation falls into this category.
I see Mr. Speaker rubbing his knees. I know over the last four years, whenever he is in the chair and when he does that, he is getting a little tired. However, I ask him to bear with me on this point.
I want to repeat that the Export Development Corporation in its primary objective, as I have described it and as it appeared to me, has done a great job. There are many questions now about where it has gone in recent years and where it intends to go. We must get that Corporation to join with all of the institutions in Canada, even at this late date in our history and despite the economic, social, psychological, and political difficulties, and build a solid economic structure in this country. This should include a large, decisive, manufacturing sector otherwise we could go down the drain much faster than we realize.
[ Translation]


Mr. Eudore Allard (Rimouski):: Thank you, Mr. Speaker, for allowing me to speak on Bill C-36 now before us. However, I must first of all deplore the fact that the government is again doing all it can to have us adopt at full speed such an important piece of financial legislation. To begin with, it seems to me that when such a legislation is put before us to triple the Export Development Corporation's support to Canadian business, as elected representatives we are entitled to ask for guarantees regarding the allocation and management of these funds.
I know that most of us think that our unemployment rate is quite unacceptable and that it is mostly the result of competition from foreign countries and of our rather weak position in an increasing number of industries. I recognize that the Export Development Corporation needs fresh funds which will create new jobs in industries where we are already competitive. The corporation should obviously be able to ensure the steady volume of exports we need to restore our balance of payments.
Mr. Speaker, I think that the corporation could not only promote the continuous expansion of a number of industries such as farm and industrial machinery plants, but also earmark some of these new funds-which Parliament is probably going to authorize-for the development of some sectors where Canada is presently experiencing a significant decline and which might reverse the trend if new markets were found. I am thinking particularly of mining and textile industries. So the government is prepared to increase the maximum guarantees of the corporation from $2.5 billion to $10 billion and its authorized capital from $400 million to $1 billion. If not for electoral reasons, why does the government want to hand out millions under our nose without giving us the opportunity of at least suggesting that these funds be put to better use than has ever been the case in the past?

April 26, 1978
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Mr. Speaker, I note that as at December 31, 1976, the Export Development Corporation was owed $2,458,000 in unpaid interests. We have spent considerable amounts of money to help countries such as Chile and South Africa where the rights of individuals are violated every day. We have lent money to Cuba, which, through its military interventions in Africa, is a threat to peace. Since political considerations are taken into account, as is the case with Rhodesia, why do we not do the same in the cases I just mentioned? The political and economic situation of certain countries is so unstable and unpredictable that we would have reasons to doubt that they will ever norow their commitments. The Export Development Corporation's objective is to increase Canadian exports and not to help less developed countries. Another institution has been established to that end, namely the Canadian International Development Agency or CIDA whose practices also leave much to be desired when it comes to allocation of funds. That means, Mr. Speaker, that the Export Development Corporation will have to review their management mechanisms in order to be able to get their money back.
In an economic situation where competition is very tough and requires concerted action from the government and its lending institutions, it is a must for Canada to make competitive products. While giving EDC the funds they require, I feel it is reasonable to ask them to expand their activities. EDC must play a wider part in the future. Let me explain myself. We all know that a number of sectors of our economy are sick, that eastern regions like the one I represent are in urgent need of competitive industries based on export products.
For instance, in eastern Quebec we have mining, forestry and off-shore resources that only outlets on foreign markets could allow us to develop. In an area where unemployment reaches dramatic proportions, a number of industries and mines have slowed down their production because of a lack of markets. In addition to issuing loans to bying countries and ensuring that Canadian businesses are paid, the Export Development Corporation should also help businesses which are directly involved in export products by way of financial contributions, subsidies and search for other markets.
Mr. Speaker, allow me to say in passing that a Liberal government had to be defeated and a Pequist government elected to revive projects such as the Magdalen Islands salt mines and the Gaspesie limestone deposit projects which were gathering dust on shelves. It is unthinkable that the government should increase so substantially the lending power of its own corporation without reconsidering its objectives. In other words, charity begins at home.


Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, I wish to say at the outset that while I approve of Bill C-36, I am greatly concerned about the ad hoc approach to development on the part of this government. This debate is important

because it gives us the opportunity to express what, in my judgment, should be an outward view on the way to create manufacturing jobs in Canada. We have to take a bold new approach.
As we consider the Export Development Corporation, we must in this debate not only confine ourselves to EDC but consider the way in which EDC is related to those other instruments of government that are supposed to be promoting development both in Canada and in our role in other countries.
The bill before us triples the carrying capacity of EDC from $9 billion to $27 billion. Several members have expressed concern about the size of this enlargement. They have expressed concern about whether the Export Development Corporation in its attempt to help Canadian manufacturers is actually creating jobs in other countries rather than in Canada.
Is the role of the Export Development Corporation being handled correctly? That is the question on which much of this debate has turned. Questions of growth, capitalization, and the future of markets for Canada are not simple to answer. That is one reason why this debate should not be closed off quickly, as though we have nothing to say; expressing our views, not only of criticism of the government for its failure to create long range jobs in this country in sufficient numbers, but pointing the way and encouraging the government to take certain steps that will be of an innovative character in order to match the future of this country.
A new book has been published, prepared by the Hudson Institute of Canada under the general direction of the head of that institute, Herman Kahn, of the United States. The book is called "Canada Has A Future". There is no question mark after that title. It is about time we started to get some literature of a positive nature on the future of our country. 1 want to indicate one paragraph from that book which sets the context for the remarks I want to make about the Export Development Corporation.
This book makes the following observation:
-Canadians could be innovative in the international field generally. An innovation which would be terribly useful for the Third World and the First World alike, indeed perhaps the most useful single thing any advanced country could do, would be for Canada to innovate appropriate methods of alleviating a world problem which will become increasingly acute during the next two or three decades: an enormous and increasing labour surplus in the Third World and an almost equally dramatic labour shortage in the First World.
I want to align that quotation from "Canada Has A Future" with a comment made by my colleague from Vancouver Quadra who, in his contribution to this debate, put his finger on what really needs to be considered when we talk about the Export Development Corporation. The hon. member for Vancouver Quadra (Mr. Clarke) said what is necessary is for the Canada Development Corporation and the Export Development Corporation to be merged into a new national development corporation. If that were done, he said:
-a new economic strategy for Canada could be formulated which would balance our exports and industrial objectives. Finally, if a new export policy is thus rationalized, private financial institutions could be encouraged to contribute
April 26, 1978

to a fund for the development of third world nations on the threshhold of development.
What we are considering here is the enlargement of markets for Canadian goods of a long range. As I said a moment ago, much of the government's preoccupation is with short range, getting over the hump, meeting the exigencies of what appear to be the daily crises, the monthly figures. We have to look at where our markets for Canadian goods can be found in the future of our country.
I quote from Mr. Shridath S. Ramphal, the Secretary General of the Commonwealth. Mr. Ramphal has been distinguished in his contributions to what is called the north-south dialogue taking place today, in which the developed and developing nations are attempting to work out new strategies for industrial growth which will permit that growth to take place on a more equitable basis around the world.
He points out that most of the developing populations around the world, and most of the future markets of the world, are in what is now called the developing countries. They now have a low purchasing power, with the result that they are not able to buy very much from the developing nations. The point he makes is that if we took the long range view toward the creation of new markets in the developing world, it would not only be a good thing to do for the growth of the people concerned, but it would be very good for us. It would not only stimulate the economies of the developed countries, but it would ensure their continued steady growth to meet the growth of world conditions.
Mr. Ramphal says:
The increases in the incomes which the developing countries would earn from the dismantling of trade barriers and other obstacles and from a sustained expansion of their export income from primary commodities and from manufactures, would be spent, and spent quickly, on imports from the industrialized countries.
What he is saying there is precisely what was said by the subcommittee on international development which conducted studies in the past two sessions of parliament on questions related to commodity pricing related to the UNCTAD IV Conference and on questions related to debt financing in the third world, connected to the Conference on International Economic Co-operation which concluded its work last summer.
When we talk about fusing policies, harmonizing what the Canadian government's policies are with regard to the Export Development Corporation which is supposed to be in business to help the export of Canadian goods abroad and, in turn, to stimulate and create Canadian jobs, that whole approach needs to be keyed to the Canadian approach of international development taken by CIDA.
Two of the speakers this afternoon reflected in their remarks the confusion which arises when we consider the role of the Export Development Corporation, especially in the third world. Let there be no mistake. The Export Development Corporation is a commercial enterprise. It is not in the aid business, nor should it be. It ensures exports. It makes loans to what one might call middle range countries. It has been
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criticized for providing loans to first world countries-one example is the steel mill at Perth Amboy, New Jersey, and another is the development of the pulp and paper industry in Poland. I would certainly criticize the corporation for its policy in providing loans for Cuba.
My hon. friend from Esquimalt-Saanich pointed out the other night, in the course of a very effective contribution to this debate, that it was altogether wrong to expect the Canadian people to support an instrument of policy which was, in effect, helping a country to expand its military operations overseas, causing havoc in the process. I have in mind Cuba's policy of sending increasing numbers of troops to Africa taking us, in my judgment, one step closer to world war III. I have expressed the view for some time that our commercial relations with Cuba through the EDC, and through our aid policies, ought to be suspended on the ground that we should express our condemnation of that country's exacerbation of the danger of war through its military activities.
The policy of EDC, whether we are talking about the development of pulp mills in Poland or of a steel mill in the United States, or the development in Indonesia which Inco is managing, ought to be debated and examined in committee. It is not my intention at this time to enlarge on the concepts put forward by others. What I am attempting to do is emphasize the commercial character of the EDC so that a sharp distinction may be made between the corporation and the aid policies of the government through CIDA. It is precisely because CIDA has got itself into the export business that its true purpose has been hurt. Further, through this jungle of policies, we find ourselves in a strange position, one in which CIDA is not only failing to carry out the humanitarian work it ought to be doing in third world countries but is failing to develop people who might in future be customers of Canadian business.
I stated at the outset of my speech that one of the most important contributions to the debate so far was made by my hon. friend from Vancouver Quadra, who said a new national policy was needed, one which would rationalize the creation of jobs and the development of our industry. I would use that statement as a stepping stone to what I wish to say next.
If the government would move away from its dependence on ad hoc decisions and policies with respect to development, and clarify the distinct roles of its agencies, it could stimulate the economy by providing a long range pattern of growth. In addition, it would be doing a better job in relation to helping those who most need help in an era of profound change.
It is not new to talk about harmonizing the various instruments of government policy. I have here a publication put out by the federal government entitled "Strategy for International Development Co-operation, 1975-1980." This document outlines a five-point strategy, and the first of those five points calls attention to the need for a comprehensive and organic approach to development co-operation. I will read the first point in its entirety because I wish to place it on the record.
In renewing its firm commitment to international development and cooperation, the government undertakes to harmonize various external and domestic

April 26, 1978
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policies which have an impact on the developing countries and to use a variety of policy instruments in the trade, international monetary and other fields in order to achieve its international development objectives.
What does this mean? The point, it seems to me, is summarized in the following sentence, also from the publication mentioned:
While continuing to value a higher volume and an improved quality of development assistance, developing countries are particularly concerned with other factors influencing their economic prospects, such as trade, monetary reform, investment, shipping and transfer of technology.
Well, Mr. Speaker, how have we been doing? How well have we been harmonizing the various instruments available to the government? The new North-South Institute, a private organization founded about a year ago, an organization well respected in development circles in Canada, made an evaluation of the government's development policies in a report issued a couple of months ago. Time does not permit me to go into this in this debate, but with respect to point one, about which I have just read, on the question of harmonizing, the North-South Institute has given a rating to the government's performance in that policy, and the rating is minus D. When my children come home with minus D on their report cards, I do not think very much of it.
What does minus D mean? It means that the government has failed to implement that key plank in the five-year strategy which is supposed to be harmonizing our industries to promote development in the world. The government, and I quote:
... is failing badly on this point. There is not sufficiently strong or consistent leadership being exerted to force all departments to give adequate weight to developing countries' concerns in their areas of policy. Without this supervision, departments tend not to do homework and to lose sight of the development dimension. The result is that the main effort now must be to prevent backsliding in several important policy areas.
Then the North-South Institute goes on to make the following point:
-Negative steps (non-tariff barriers) and contradictions (promotion of uncompetitive industries by DREE and the adjustment programmes of Industry, Trade and Commerce).
All of those programs have had a negative rating so far. When we talk about failure to implement policies, we have to put the discussion into the wider context of what is going on in the world, because I think it is unfair to single out the Canadian government as the only culprit in not taking long-range constructive policies to promote development. The problem is deeper than merely the colouration of the government. The problem has to do with the structures in the international community today as well as with what we might call the climate of world opinion.
There is another important passage from the most recent address by Mr. Ramphal to a number of British parliamentarians on January 23 of this year, in which Mr. Ramphal puts his finger on the dilemma we and the Export Development Corporation face as the EDC attempts to decide where it can most successfully invest its money commercially. It is a dilemma which hon. members of this House ought to be considering as we contemplate the future of the EDC. Mr. Ramphal evaluat-

ed what has been going on over the past couple of years since the new international economic order was formulated and espoused by the United Nations at the Sixth and Seventh Special Sessions of the General Assembly which took place in 1975 and 1976.
Mr. Ramphal gave this evaluation:
The frustrations of UNCTAD IV, the failure of CIEC ...
The North-South Conference which took place, at which the Deputy Prime Minister (Mr. MacEachen) was co-chairman.
... to produce meaningful results on structural change in the world's trading and financial arrangements, or, even to agree on the character of its disagreements; the negligible progress being made in eliminating the barriers to trade at the Multilateral Trade Negotiations in Geneva after four years of intensive dialogue; the bogging down of the negotiations on individual commodity agreements and on the Common Fund in spite of verbal agreement on the Integrated Programme for Commodities; the perpetuation of disorderly conditions in the international financial system with the attendant displacement of an international financial system by one substantially under national control; and the inability of the international community to agree even on a forum for coming to grips with the debt problem of the developing countries despite the staggering balance of payments deficits which have been projected for them-these events (or nonevents) are not only disappointing in themselves, they are positively dangerous. To put it at its most charitable, this record of continuous dialogue and consistent inaction suggests that the realism which induced the promises of the Sixth and Seventh Special Sessions has passed and that the rich are returning to accustomed complacency with an unequal world-with all that that implies for a world at war with itself, even though all the evidence demonstrates that-as the young Canadian poet Margaret Atwood so poignantly warned us: "surviving is the only war we can afford."
I have used that quotation to indicate that the harmonizing of our domestic and international policies, with a new understanding that such a move is essential to create those long-range markets for Canada, is most urgently needed at this moment. I said that we should clarify the roles of both EDC and CIDA so that we can stop being confused about them. In order to do that I would like to draw attention to Mr. Robert McNamara, the president of the World Bank, who is among the leaders in the world now making the point that if developed nations in their assistance programs would change their programs to provide basic human development in developing countries-and by that he means food, water, shelter, hygiene, and education-that would provide a spirit of self-reliance in the developing nations and would help them to grow so that they can become those legitimate consumers who are waiting in the expectation that some day they will be able to have some of the basics of life. I want to use a little incident to illustrate the magnitude of what we are talking about here.
I was in China recently. I was going through a commune. I know the Export Development Corporation does not deal with China, but its officials should listen anyway because the moral applies to the countries with which it does deal. When I was in China I went through a commune, and I noticed a television set in the home of one of the leaders of that commune. That leader was a woman, and I asked her why she had a television set. She said it was true that there were television sets in public halls and so forth, but that more and more people now wanted to have television sets. I asked why, and she said, "Well, because it is so nice to lie in bed and watch television". I said to myself that that woman was ringing a bell. She was speaking for millions upon millions of people in third world
April 26, 1978

countries who are waiting with the expectation that some day they are going to be able to buy the goods and services that we should be able to produce.
It is in the interests, as Robert McNamara, Mr. Ramphal, and United Nations experts keep telling us, of the countries of the developed world to create aid policies which produce self reliance so that people in third world countries can eventually rise above the kind of life which is deprived even of human dignity and become the consumers of the future. That is a long-range policy for human development which is good for people, for society, and for Canadian manufacturing industries.
When I say harmonizing the policies I mean the government should harmonize its policies. I say to government members today, and to some of my own colleagues whom I expect to form a government before very long-


Some hon. Members:: Hear, hear!


Douglas Roche: -that when this party forms the government we are going to formulate development policies of the kind which the hon. member for Vancouver Quadra has described, namely, long range development policies which can be depended upon and are not ad hoc as the present government's policies are. That is the route advocated by Mr. McNamara.
I am confident that the future of Canadian development policies would be much sounder if we asserted, through this debate and through the committee work which will follow, and keep driving home to the government, the need for long range, integrated, harmonizing policies which take advantage of our need to create new markets, and realize the very real conditions throughout the world, particularly the developing world of people who need to be brought to a state of self-reliance.
Before I come to my final point I would like to make this observation, Mr. Speaker. The way in which CIDA is now being used by the government as a sort of mini EDC is doing a disservice to the cause of development, because most of the money that CIDA spends-its budget is now $1.2 billion, and some 60 per cent to 65 per cent is spent through high technology bilateral aid-is aimed at helping Canadian industries. I am all for helping Canadian industries and for doing everything we possibly can to increase our exports and improve our manufacturing potential in this country. What I am against is CIDA giving away high technology items such as planes, generators, and bridges. I am against CIDA giving that away in the name of aid because it is creating a dependence on CIDA by Canadian manufacturers as an instrument which is going to do their sales work.
CIDA should be confined to helping to create self-reliance among the masses of people in villages, rather than so much of its budget being devoted to exporting high technological equipment, an activity which may look good in the short range because it adds to our export total, but one which in effect does not promote development in countries with which we are dealing. One example of that is Indonesia, a country about
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which our friends in EDC know a lot because they are heavily involved there.
CIDA has a $37 million program in Indonesia today in the form of official development assistance, plus a credit line of some $200 million from EDC operating in Indonesia. What do they get for this kind of money? They get planes, training of pilots, generators, and a number of things such as high technology equipment which I have seen with my own eyes. This adds a fraction to our manufacturing here.
CIDA officials, of course, go around the country telling Canadians they should support CIDA because it is good for Canadian business. This puts people like me in a very difficult position because I do not want to argue that we should not be helping Canadian business. Obviously Canadian business needs to be helped, but it is the function of EDC to do that, not a function in the name of aid, because in Indonesia, while highly technological equipment is being sent there in the name of aid, studies which have been carried out in that country show that 75 per cent of the people live in villages where there are no floors in the houses, there is no water, there are no latrines, and no educational facilities.
We are not talking about some throw-away, backwater community. We are talking about the fifth largest country in the world, with a population of 140 million, 75 per cent to 80 per cent of them living in villages at this very low subsistence level. Bangladesh is in a similar situation. It has a population of 80 million people, 90 per cent of whom live in rural areas with no basic services. That is why Mr. McNamara said that if the developed countries are serious about their relations with developing countries, they would steer their aid policies toward the creation of self-reliance by having their aid emphasize what I call the big five, that is, food, water, shelter, hygiene, and job opportunities.
I have indicated some reasons for differentiating between what EDC does and what CIDA ought to do in order that the markets for Canadian potential sales may be developed. What we have to remember at the base of this very complex discussion of north-south relations is that low productivity is at the heart of the dilemma both in Canada and in the developing countries. It is in the interests of both the rich and the poor to boost productivity all over the world, and this can be done by stabilizing commodity prices, lowering tariff barriers, increasing the flow of capital to the developing world, and improving the transfer of technology.
This bill gives us an opportunity to make the point that we advocate an intensified and continuous technical co-operation with developing countries. That should lead us into more private investment in the developing countries stimulated by EDC as a way of helping out not only those countries but also helping the Canadian manufacturing industry.
I advocate an increase in private investment capital from Canada to the developing countries through an instrument such as the Advisory Council on International Development to provide systematic consultation between business, labour, and government. This would stimulate private enterprise to trans-

April 26, 1978
Export Development Act
fer larger capital investment and more managerial skills to broaden the industrial base of Third World countries.
Further, I advocate modifications in Canadian tax laws, and other steps to encourage Canadian companies to participate in international trading companies and form consortia to help develop the economies of third world countries. At the same time, these ventures would bring substantial benefits to Canadian business and industry.
That is my case for making this intervention. I believe there are two sides to the EDC story, the side here in Canada which can be harmonized successfully with the other side, which is our need to find new markets and to develop those markets through the creation of self-reliance among those millions upon millions of people who want nothing more in life but the opportunities we have in this country.


Mr. Hugh A. Anderson (Parliamentary Secretary to Minister of Fisheries and the Environment):: Mr. Speaker, when the Minister of Industry, Trade and Commerce (Mr. Horner) initiated the debate on Bill C-36, he said that the Export Development Corporation was probably the most misunderstood corporation in Canada. After having read the record of the debate which has taken place on this bill, and having listened in person to the debate this afternoon in the House, I am afraid that people reading Hansard or listening to the debate will be confused further. I may be a country boy from Vancouver Island, but it seems to me that Bill C-36 is a very simple piece of legislation.
The bill proposes to amend the present Export Development Act by increasing the authorized capital of EDC to $1 billion. It proposes to provide separate ceilings for direct and contingent liabilities, as well as providing ceiling amounts in the direct liabilities corporate account of $10 billion. Also it proposes to have ceilings expressed for corporate accounts in multiples of ten times the authorized capital. I am not an economist, but that seems to be a simple bill.
I have no reason to suspect the words of the Minister of Industry, Trade and Commerce. He indicated that the Export Development Corporation will have reached its corporate lending level by the month of June. Therefore, either one of two things will happen. If this legislation is not approved, then there will be no more funds for the Export Development Corporation to lend out, because its maximum will have been reached.
If this legislation is allowed to go to committee, then I am sure the minister and his officials will be very glad to go over the role of the Export Development Corporation. As the hon. member for Cape Breton-East Richmond (Mr. Hogan) said, it should be out in the open. I am sure the officials will be willing to talk about interest rates and other matters. I hope the hon. member will participate in that committee in order to question the Export Development Corporation.
Since I am a country boy, perhaps I am not the world's greatest economist. I know in 1977 the Export Development
[Mr. Roche.l
Corporation contributed to maintaining and creating new jobs in the amount of 200,000 man-years.


Some hon. Members:: Oh, oh!


Hugh Alan Anderson: Perhaps that does not sound like very much to hon. members of the opposition. Day in and day out I hear doom and gloom from hon. members opposite concerning employment problems in Canada. This Crown corporation is increasing and maintaining Canadian jobs to the amount of
200,000	man-years.


John R. Rodriguez: Oh, come on!


Hugh Alan Anderson: I suspect the hon. member for Nickel Belt (Mr. Rodriguez) does not like what I am saying because it is a success story.


An hon. Member:: Right on!


Hugh Alan Anderson: Hon. members of the opposition parties do not like to hear success stories.


The Acting Speaker (Mr. Ethier):: The hon. member for Nickel Belt (Mr. Rodriguez) on a point of order.


John R. Rodriguez: Mr. Speaker, will the hon. parliamentary secretary permit a question?


The Acting Speaker (Mr. Ethier):: Will the hon. parliamentary secretary permit a question?


Hugh Alan Anderson: Mr. Speaker, I will more than welcome a question after the conclusion of my remarks.


John R. Rodriguez: Chicken.


Hugh Alan Anderson: Before the hon. member interrupted, I was referring to a success story. Aside from the Export Development Corporation creating jobs for Canadians, it is interesting to note that it is self-sustaining. In most years of its operations, it contributes a profit which is reinvested back into the corporation to be lent out again. My understanding is that the profit made by the Export Development Corporation in 1977 was approximately $60 million. In itself, that is a very complimentary and beneficial result of the corporation. It means that the corporation generates funds to lend out on foreign markets.
The criticism regarding the Export Development Corporation basically has been that it is financing competition to Canadian industries. Because certain people and parties in this country have created the false impression that, by funding Canadian industries abroad, the Export Development Corporation is somehow cutting down jobs in Canada, this should be laid to rest in the House immediately. Capital projects in Indonesia, Poland, and Iran will go ahead with or without Canadian expenditure.


John R. Rodriguez: Oh, oh!


Hugh Alan Anderson: If the hon. member for Nickel Belt would care to debate this subject on any platform, I would be pleased
April 26, 1978

to participate. If he or his party indicate in the next election campaign that capital projects-


John R. Rodriguez: When is that going to happen?


Hugh Alan Anderson: If it is indicated by them that capital projects in Poland, Iran, and Indonesia will not go ahead without Canadian participation, then they are deluding Canadians. Those projects will go ahead. It is only a question as to whether Canadian manufacturers will get a bite of those projects. It is only a matter of whether we become a part of those projects.


John R. Rodriguez: Oh, oh!


Hugh Alan Anderson: Obviously the hon. member has a problem with his economic theories. Not only will they delude Canadians, they will delude themselves if they argue that Canadian participation does not create Canadian jobs, and that these projects will not go ahead unless Canada participates. That is utter rubbish.


John R. Rodriguez: I challenge the parliamentary secretary to come up to Nickel Belt and repeat that.


Hugh Alan Anderson: Inevitably Canada's competitive position will be challenged in areas such as pulp, paper, and nickel as a result of other countries developing their own capabilities.


John R. Rodriguez: Tell that to the people of Nickel Belt.


Hugh Alan Anderson: These developments will take place. Third world countries, as well as other underdeveloped countries, will develop their paper facilities. If they have nickel or copper, they will not sit back idly.


John R. Rodriguez: The parliamentary secretary should include that in a speech to my constituents.


Hugh Alan Anderson: I do not expect to hear economic theory which makes sense from the hon. member for Nickel Belt.


John R. Rodriguez: Oh, oh!


Hugh Alan Anderson: Instead of playing politics all the time, I hope the hon. member for Nickel Belt will examine our economic theory. Instead of making political speeches, perhaps he should look at what is being done by the Export Development Corporation and what its objectives are. Last year that corporation provided 200,000 man-years of employment for Canadians.


John R. Rodriguez: Where did you get that figure from?


Mr. Peters:: Did you pull it out of the air?


Hugh Alan Anderson: Canada is doing something that no other country does. At the present time the Export Development Corporation charges in the neighbourhood of 6 per cent to 7 per cent on its loans.


John R. Rodriguez: How do you know that?
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Hugh Alan Anderson: Countries such as Japan are competing with Canadian products. They have organizations similar to the Canadian Export Development Corporation, but their interest rates are in the neighbourhood of 4 per cent.


William Arnold Peters: Then why is Indonesia coming to us?


Hugh Alan Anderson: We are like lambs in the international market. Thank God the lambs from the New Democratic Party are not out on the world markets. If that was the case, Canadian contracts would never be sold and Canadian machinery would not be going to the world markets.


William Arnold Peters: Very funny!


Hugh Alan Anderson: If we are to encourage our manufacturing industry, we must supply assistance in the form of corporations such as the Export Development Corporation. Every other major exporting nation has exactly the same type of corporation. Anyone who even pretends to have any economic knowledge is talking absolute drivel if he indicates that this corporation should be examined, perhaps abolished, and that machinery and equipment should not be exported to countries such as Poland.


Andrew Hogan: Who suggested that?


Hugh Alan Anderson: These people should ask the government what it is doing to help the manufacturing industry. I am pointing out what is being done.


John R. Rodriguez: Come on!


William Arnold Peters: Is that what you call help?


Hugh Alan Anderson: We would like to have the limit raised so that this corporation will not run out of funds in June of this year and, in fact, will have funds to continue financing Canadian industry throughout the world. In 1977 the export trade support of the Export Development Corporation reached a record high of $2.6 billion. It is estimated that in 1977 the Export Development Corporation financed 40 per cent of all capital goods and services exported from this country.


An hon. Member:: No wonder we are in trouble.


Hugh Alan Anderson: According to the theory put out by my good friends opposite, I guess what we should do is put a lid on all those bad people in the third world who have the temerity to have an utter disregard for Canada in developing their own resources. What a bad bunch of robbers they are, developing over there while we as Canadians are plugging money into the multinational corporations, which do not need it anyway, setting up competition for Canadians. What a simple story to tell your children at night; children who are too young to understand. It is unfortunate that in this day and age, when Canadian businesses, exporters, and manufacturers are having a very difficult time in foreign markets, and I suggest this is for a variety of reasons, this parliament does not recognize the

April 26, 1978
Export Development Act
importance of a corporation such as the EDC and the assistance it can bring to the Canadian businessman. It is unfortunate that this parliament does not recognize these facts and pass this legislation so that this money can be provided before the corporation runs out of funding in June of this year.
It is all very well to stand up and criticize the government because of a slow increase in the number of jobs in the manufacturing sector, but one should take into account the facts. Let me give one example. There have been a number of comments regarding a steel company in the United States which was provided with Export Development Corporation money. No one has ever said what the situation actually is regarding this company. Perhaps a few facts about this will wake up my hon. friends in the New Democratic Party.
This is referred to as a unique concept in the production of steel. This mini steel mill has vaulted the small community of Whitby, Ontario, into prominence in the export of Canadian technology and the creation of employment in Canada. Does that name Whitby ring a bell with hon. gentlemen opposite from the NDP? Is the Leader of the NDP (Mr. Broadbent) going to go to Whitby and say he is against this EDC program which is helping out a Canadian company located in his constituency? You go there and tell them this is a bad thing!
The Whitby-based firm of Co'steel International Limited already is operating mini steel mills in Canada, the United Kingdom, and the United States. It is now launching a similar venture in Perth Amboy, New Jersey. The equipment will be built completely in Canada, providing at least 1,350 man-years of employment in 130 companies across Canada.


Andrew Hogan: Name them.


Hugh Alan Anderson: I will if you would like.


Andrew Hogan: Go ahead.


Hugh Alan Anderson: I have them here. In a brief ceremony-I will not go into the details of that meeting. Raritan River Steel Company of New Jersey, a subsidiary of Co'steel, will operate the mill which is expected to go into production in 1979. The project consists of steel-making and rod-rolling facilities. The rod mill will utilize billets produced by an arc electric furnace and a continuous casting machine. The projected output of
450,000	tons a year is tailored to supply the market for the steel rod, wire mesh, and fastener industries along the U.S. coast from Maine to Florida. That is a traditional Canadian market, the Maine to Florida market.
Despite strong competition from the U.S., Germany, the United Kingdom, and Japan, Canada is assured of the sales of the equipment going into the proposed mill. Some 130 small and larger Canadian firms engaged in engineering, metal working, and electrical equipment manufacturing, will provide equipment, supplies, and services for the Perth Amboy mill.
The interesting fact here is that, first of all, the mill is not competing with Canadian products. Secondly, regardless of whether the EDC is involved or not, the mill would have gone ahead. The only question is whether the jobs in Whitby would

have been provided. I suggest rather they would have been created in the United States. I would ask the hon. gentlemen in the NDP if they are willing to go to Whitby and tell the people there that the EDC has hurt their chances for jobs. I am afraid they would be laughed out of town. I am certainly sure that the Leader of the New Democratic Party is not going to go to Whitby and stand on a stump shouting "Down with the EDC". It is all very well to do that in other parts of Canada, but I am sure he will not be doing it in his own riding because that would obviously be foolish.
One of the gentlemen from the NDP asked me to name some of the companies. I will name some of them if he wants and he has the time. I have a list of them here. They include Co'steel International Limited, 1601 Hopkins, Whitby, Ontario, and the amount of the loan is $47 million. Suppliers include Provincial Crane Division of Dominion Bridge Company Limited, Niagara Falls, and that company will be supplying cranes to the value of $2.6 million; Lake Ontario Steel Company of Whitby will be supplying reinforcing steel to the value of $461,000; Canadian General Electric of Scarborough will be providing main drive DC motors to the value of $1,780,000, generating 77 man-years of employment; Whiting Equipment Limited of Welland will supply an arc electric furnace to a value of $1,521,000; Concast Canada Limited of Montreal will be supplying a casting machine at a cost of $2,230,000; and Brown Boveri Canada Limited of Pointe Claire will be supplying power supplies and controls to the extent of $1,730,000, providing 54 man-years. Mr. Speaker, let me suggest that the point has been proven.
What would have happened in this particular instance had this particular mill been financed by the United States, Japan, or the United Kingdom? I suggest the jobs which have been created in Canada at the various companies I have mentioned would just not exist. We would not have those jobs. We must bite the bullet and realize that if we are to compete on world markets there may be instances in which the products produced by the companies assisted will be in competition with Canadian produced products, whether those products are manufactured in Poland, Indonesia, or elsewhere. This is what we must realize, and this is the heart of the matter. These projects will go ahead, with or without Canada, and it is up to us to determine whether we want some of the man-years employment in time devoted to these projects, or whether we want to kiss it off by saying we will not take part because these projects may be in competition with our own. I submit that such action would be cutting our own throats.
We are not dealing with an "either or" situation. This involves simply a question of whether Canada participates and jobs are created as a result of that participation. It is utter and absolute nonsense to say that such financing is reducing jobs in Canada. Competition may be involved but, as sure as God made little green apples, we would be getting that competition from Japan, Germany or the United Kingdom whether Canada participated or not. Their factories would produce the equipment. Either we accept that fact, or realize we are ridiculous as economists-as are our friends opposite.
April 26, 1978

When a Canadian company such as MacMillan Bloedel goes abroad it brings benefit to Canada in the form of the share dividends that accrue to Canadian shareholders. The role of the Export Development Corporation in setting up these corporations abroad is to create jobs and bring other benefits such as the flow of capital to Canadians.
If my friends in the opposition do not agree with that thesis that projects will go ahead with or without our participation, if they wish Japanese, West German or United Kingdom companies to straddle the world while ours remain at home, let them say so. Let the Japanese, the West German and United Kingdom companies develop mines in Indonesia and Guatemala. Let them surround us with their capital while we stay pure and do not put money into industries that may compete against us.
The argument put forth by some hon. members is fallacious. If we are to provide stimulus to Canadian business so that they can compete abroad in countries using exactly the same type of corporation-some with lower interest rates than ours- then we must support this legislation. If we take the view that such competition does not matter-that because Alcan or any other company has interests in Canada and therefore we should not compete against ourselves-we should say so.
The hon. member for Nickel Belt will have an opportunity to contribute to this debate later, although judging from his past performance he will not have much to contribute.
I hope that members who have an interest in this corporation will express their views at committee stage when they will be able to examine witnesses, including the Minister of Industry, Trade and Commerce and his officials. I hope we get speedy passage of this bill to the committee stage.


John R. Rodriguez: Mr. Speaker, I rise on a point of order. The parliamentary secretary said he would answer a question at the end of his speech, so I presume he is now prepared to do so.
I have information from International Nickel Company of Canada in a letter signed by Elizabeth Parr Bond, the director of government affairs. The question is related to the hon. member's reference to the number of man-years of employment that would be created. The letter says quite clearly that the EDC has estimated their loans to Inco have provided the equivalent of 4,000 man-years of work for Canadians through contracts to about 490 Canadian suppliers. This relates to the $77 million that EDC loaned to Inco for the Indonesia operation and the Guatemala operation which it claims created
4.000	man-years of employment. How does the hon. member reconcile 4,000 man-years of employment with the loss of
4.000	permanent jobs at Inco in Sudbury, Thompson, and Port Colborne?


Hugh Alan Anderson: As I indicated, Mr. Speaker, I did not think much would come from the hon. member. I am not sure if this is allowed but I should like to ask him how many tons of nickel are being produced in Guatemala or Indonesia today, April 26, in competition with Inco mines in Canada. I suspect the
Export Development Act
answer is zero. I also suspect the hon. member did not listen to a word I said. The mines in Guatemala and Indonesia would have been developed with U.K., German and Japanese capital, regardless of what Inco did or of EDC involvement.
The hon. member should ask himself if he would be satisfied with no jobs being created in Canada through the development of those mines when the work could have gone to any other country, or is he happy with the 4,000 man-years of work created in Canada? We could have ended up with no jobs but still had the competition. Now at least we have the 4,000 man-years of work, although we know there will be competition at some future date from mines throughout the world that do not have any Canadian participation. He makes a rather foolish argument, Mr. Speaker.


William Arnold Peters: Could I ask a question, Mr. Speaker? The hon. member used the example that I presume was provided for him of the Whitby firm Co'steel International Ltd. which has established a plant in New Jersey, and pointed out, quite rightly, that it has been given a large amount of assistance to enable it to buy from Canadian manufacturers. This is a one-time grant, of course.
Could the hon. member tell me what we are doing wrong? Surely the money we loaned would produce permanent jobs in Canada, not just jobs on a one-shot basis. Could the material not be manufactured in Canada? Are tariffs too high or our prices too high? What could we have done to keep that corporation in Canada so that the jobs could be permanent jobs?
Surely the function of EDC is to work toward that end and not just on one-time projects that give a certain number of man-years of work but from which there is no lasting benefit. Presumably the suppliers who benefit at this stage expect to exist afterwards, but this type of operation makes their future precarious, to say the least. Is there not something more that the EDC could have done so that this Canadian plant could have located in the maritimes where it was going to locate had not some inducements been offered which persuaded it to establish in New Jersey?


The Acting Speaker (Mr. Ethier):: Order, please. For the information of hon. members, I did not recognize the hon. member for Timiskaming (Mr. Peters) on a point of order for the purpose of asking a question. Perhaps we could clarify that at this time. He may not be recognized in the debate again if there is not unanimous consent that he was recognized for the purpose of asking a question. Is there unanimous consent?


Some hon. Members:: Agreed.


Hugh Alan Anderson: Mr. Speaker, the hon. member asked a very good and rational question. Unfortunately the decision was made by the company in Whitby to locate its mill in New Jersey. I cannot comment on the reasons for the decision. I suspect, however, that the location is closer to the market it intends to serve. I am sure the hon. member heard me say the company has branches in the United Kingdom. I suspect it located in New Jersey to serve a regional market from Maine

April 26, 1978
Export Development Act
to Florida. Perhaps that and other questions could be answered in committee.


Mr. Munro (Esquimalt-Saanich):: Mr. Speaker, would it be in order for me to ask a question?


The Acting Speaker (Mr. Ethier):: Order, please. I would recognize the hon. member for Nickel Belt (Mr. Rodriguez) in the ordinary course of debate. Surely we should have no more questions. We are not at committee stage now.


John R. Rodriguez: Mr. Speaker, I would not dare ask any more questions because we are not getting a debate with the parliamentary secretary; what we are getting is a debate with the bureaucrats and nabobs in EDC who have written his spiel. I do not mind debating with the nabobs, but I want to do it in committee.
Some of the things that the hon. member for Comox-Alber-ni (Mr. Anderson) mentioned in his attempt at responding to the question I put to him, indicate very clearly that he is unaware of the controversy which exists on the board of directors of the EDC with respect to making EDC loans to multinational mining companies. There has been a great deal of turmoil and disagreement. I was told that by the president of EDC, for what it is worth. Ele said that it was a question which has divided the board of directors.


An hon. Member:: He did not tell it to you in confidence either.


John R. Rodriguez: And he did not tell it to me in confidence either.
No one in this House can expect me to stand in my place here after what we have been through in the Sudbury Basin with respect to the layoffs by Inco and Falconbridge and say that I think the EDC is doing a terrific job, that in effect I support the increase of its capitalization. It seems to me that it ought not to be supported by members of this House until an overhaul is made of the way in which the Export Development Corporation operates, along with their accountability to parliament and to the Standing Committee on Finance, Trade and Economic Affairs. I have been before the committee on three previous occasions. On each of those occasions it was for a matter to increase capitalization of the Export Development Corporation.
We heard the hon. member for Comox-Alberni mention in relation to the Inco operation that no nickel has come out of Indonesia or out of Guatemala as yet, so they could not have an effect on the market. We had better take a look at the whole situation, Mr. Speaker, for the edification of the bureaucrats who probably do not know a bloody thing about nickel. Maybe they ought to listen if they are in the galleries.
There are two kinds of nickel, namely, lateritic nickel and sulphide nickel. The sulphide ores are the kinds which are found in the Sudbury basin and at Thompson, Manitoba. The lateritic nickel deposits are found in the tropical countries.

These deposits are on the surface of the land and are scraped off. To reduce the lateritic ores to a semi-processed state-to remove the nickel-a great deal of energy must be applied to the lateritic nickel. For the sulphide nickel which is found in the Sudbury basin, the sulphur in the ore is an energy agent. In effect we do not need as much energy to reduce that ore to nickel.
With the cost of petroleum and the cost of energy in the world, it makes Canadian nickel extremely competitive with the tropical countries where the lateritic nickel is found at this point in time. But never sell the EDC short. Falconbridge and Inco are always willing to look for a friend, and EDC is always there to be the friend at hand.
It is said that a friend in need is a friend indeed. That is the problem with Falconbridge in the Dominican Republic. Nickel is now selling at approximately $2.20 a pound. What do they have to find? They must find some energy deposits. So, what does Falconbridge do? It has one of its sister companies, Superior Oil of Canada, searching for oil and gas in the Dominican Republic. Who is the friend in need ready to put $25 million worth of insurance on the operation? Of course, the EDC! You can just see the boys, Mr. Speaker! The picture and the story were printed in the paper. They even broke out the champagne when they signed the contract. There was Marsh Cooper as large as life. There was John MacDonald, president of EDC, bigger than Marsh Cooper, bigger than life.


An hon. Member:: You don't have to scream.


John R. Rodriguez: They sprung out the champagne and the boys were breaking the bottles. My, 1977 was a good year for Falconbridge Dominicana or Falcondo. A good year. And guess what, Mr. Speaker? Inco is not to be deterred. Inco will show the same initiative. As a matter of fact they are presently showing the same initiative. Right at this moment they are exploring for gas and oil off the coast of Guatemala and, guess what, Mr. Speaker? I will lay my neck on this table that the EDC will very shortly receive an application for insurance-


An hon. Member:: What a neck.


John R. Rodriguez: I hear the retentionist over there. He is touchy about necks these days. Now you have made me forget where I was.


Some hon. Members:: Oh, oh!


John R. Rodriguez: You can bet your bottom dollar-


An hon. Member:: You hang in there.


John R. Rodriguez: -that Inco will be shortly approaching and making a demand on the munificence of the taxpayers of Canada to get some insurance for their operations. That is the problem. It is not what you know, it is who you know in this world. Everyone will subscribe to that theory, and Falconbridge knows the president, Balaguer. He is a good friend. Marsh Cooper told me. He said, "I was playing golf with Colonel Balaguer". They have friends in high places and, guess
April 26, 1978

what? I will bet you dollars to doughnuts that the energy costs will be subsidized by the people of the Dominican Republic just as the people of Indonesia subsidize the energy cost for Inco in Indonesia. At that point in time it will be found that lateritic nickel from the third world becomes much more economical than the nickel in Canada.-I see the member from Thompson, Manitoba, and I am going there tonight-


An hon. Member:: Tell them about capital punishment.


John R. Rodriguez: I will tell them about capitalism, not capital punishment.


Some hon. Members:: Oh, oh!


An hon. Member:: We will let Joe Clark tell them about capital punishment.


John R. Rodriguez: Earlier in the debate I heard the hon. member for Dauphin (Mr. Ritchie) quote Karl Marx. I think socialism is creeping into Manitoba. Wait until Sterling Lyon hears about that, or better still wait until the hon. member for St. John's West (Mr. Crosbie) hears about that, or the hon. member for Winnipeg South-


An hon. Member:: Winnipeg South Centre.


John R. Rodriguez: Winnipeg South Centre (Mr. MacKenzie).
It is the friends that one has in high places that count. At that point in time lateritic nickel becomes much more economical than Canadian nickel.
Indeed, on the very day the Law of the Sea Conference opened to discuss ocean floor mining, the mining of nickel and magnesium from the floor of the ocean, Inco and Bellevue, Washington, unveiled the first experimental runs on the nodules which they have raised from the ocean floor. Even a minister of the government, the Minister of Employment and Immigration (Mr. Cullen), went to Sudbury. There was a mass rally of 25 people at a luncheon at the Chamber of Commerce. He told the people of Sudbury that as a nickel producing community its days are numbered.
I want to ask some simple questions that the people in the Sudbury basin asked. If we have $77 million to put into helping Inco develop its lateritic ores in Guatemala and in Indonesia, why do they not make that $77 million available in Canada at these reasonable rates of interest? This would help the community, the small entrepreneurs and individuals who want to develop an infrastructure around the nickel industry, such as heat pumps and copper rods and all the other infrastructure we can use in the Sudbury basin. Why do we not put the money into that?
There is another aspect to this whole question of multinational mining companies receiving EDC grants. I have heard a lot of garbage about creating employment in Canada. In the mining industry the Export Development Corporation has done nothing more than help the multinational mining companies do to the third world countries what was done here in Canada. For example, the lateritic nickel in Guatemala is
Export Development Act
going to be mined from the shores of Lake Izabal. The boats will come in. The material will be scraped off the surface of the land and semi-processed, just as it is in the Sudbury basin. It will then be loaded on to ships. The ships will sail across the lake and across the ocean to Wales where it will be refined.
EDC has loaned $23 million to the Guatemalan operation. Inco says the total operation cost them $325 million. It is highly capital intensive. It will employ 700 Guatemalans, and they will have spent $325 million. We are allowing Inco, with the Canadian taxpayers' money, to do to third world countries as far as mining companies are concerned exactly what they have done here. That is what I am talking about. I want that perfectly clear.
It is morally wrong and economically mad to loan Canadian taxpayers' money to multinational companies which have raped this country, laying off workers the minute they feel a downbeat in the economy. It is not only morally wrong, but economically stupid. Regardless of what the hon. member for Comox-Alberni has said, it is wrong to loan money to Inco and Falconbridge to set up an operation to do in third world countries exactly what they have done to Canadians.
Note the countries they go to, countries with a record of respect for human freedoms. They have gone to Guatemala where the "Butcher of Zacapa" provided a captive work force for Inco. In the Dominican Republic they have a dictator, Balaguer. It is interesting to note that when Marsh Cooper played golf with the president, they had armed guards guarding the golf course. You can see how loved the dictator is by his people.
I raised this in 1974 when Bill C-9 was before the committee. I went through the whole process of a country where the political regime has denied its people their human and civil rights. They do not call him the "Butcher of Zacapa" for nothing. I brought that out. I said in effect we have the taxpayers of Canada participating in this sort of development, but not to help the people develop and control the technology for the future. Is that the kind of development we want for the third world? Do we want to make them hewers of wood and drawers of water in their own country? Are we going to allow to happen to them what happened to us? I say that is morally wrong.
We should provide the Guatemalan government with low interest loans, guaranteed in the same fashion as EDC loans are presently guaranteed, and let them purchase the technology required for the operation. If they want to exploit their lateritic nickel, give them a long-term loan at a reasonable rate of interest to help them develop their own technology and resources so that they can be master in their own home. They should not be subject to the whims and fancies of a multinational mining company.
We then go to Indonesia. Amnesty International tells us there are 55,000 political prisoners who have been put in prison without trial there. We have the situation in Indonesia where Inco is attempting to penetrate the Japanese market.

April 26, 1978
Export Development Act
Elere we have the Export Development Corporation using the taxpayers' money to help Inco to exert market dominance in lateritic nickels.
What is in it for Canada? That ought to be one of the primary concerns for the Export Development Corporation. What is the benefit to Canada? I do not mean the 4,000 man-years that will last as long as it takes to send down the equipment or the specialized personnel. They are Inco personnel who are already on salary. What they are doing is paying the wages of Inco personnel to go there and set up the operation.
What plan is there down the road for the nickel communities of this country? That is extremely important. It is not just the New Democratic Party that has raised these concerns. Every time we make a loan or insure an operation, whether it be in Chile, Guatemala, Indonesia or Santo Domingo, we have a vested interest in ensuring that the operation continues. In effect we are indicating support for the regime in power. If the people rise up and take over the operation, our Export Development Corporation pays the insurance. We are really in the position of committing ourselves to the regime in power, whether it be in Indonesia, Guatemala, Santo Domingo or Chile.
I do not often quote from the Northern Miner, the trade paper of the mining industry. However, I wish to quote from an editorial in their November 3, 1977 edition. If the bureaucrats want, they can look that up and see whether I am quoting correctly. I quote:
Although Guatemala and Indonesia cannot be charged with having precipitated the current situation, looking further down the road to the years when nickel markets improve, the reality is that there will be more nickel producers laying a claim to a share of the nickel market. And no amount of castigation of Inco's policies or motives will alter that fact. We sowed, so shall we reap.


The Acting Speaker (Mr. Ethier):: Order, please. It being six o'clock, this House stands adjourned until 2 p.m. tomorrow.
At six o'clock the House adjourned, without question put, pursuant to Standing Order.

Thursday, April 27, 1978