1978-06-21

ROUTINE PROCEEDINGS


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, I rise under the provisions of Standing Order 43 to present a motion which I am sure will be approved and accepted by all hon. members. In view of the fact that yesterday a devastating earthquake in Salonika and northeastern Greece left in its wake a trail of destruction and death, the tragedy and magnitude of which has not yet been fully realized, I move, seconded by the hon. member for Provencher (Mr. Epp):
That the Government of Canada, on behalf of all Canadians, express its heartfelt sympathy to the government of Greece and its citizens; and, further, that the government respond to any requests for aid, as has been similarly done in other areas and countries which have suffered similar natural disasters.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE SENATE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have an important motion concerning the possibility of a veritable glut of senators in the country. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House instructs the government to appoint a public committee to investigate and make recommendations as to what should be done with existing senators in the future should the present Senate be abolished; that this committee not be blue ribbon in nature, as proposed yesterday by the Prime Minister, but that it consist of one corporation lawyer to act in the interests of existing senators, two fishermen, two farmers, two miners and two factory workers, equally divided between men and women, and that the average income of members of this committee not exceed the national income average.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIRPORTS
[Stage Direction]
REQUESTED EXTENSION OF LANDING STRIP AT SAINT-LfeONARD AND IMPROVED FACILITIES-MOTION UNDER S O. 43
Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to move a motion dealing with an urgent matter.
Considering that the Air Transport Board of the Canadian Transport Commission ruled on June 2, 1978 that Eastern Provincial Airways (1963) Limited would be authorized to serve northwest New Brunswick under permit A.T.C. 2482/ 75(S) and considering that in its wisdom the commission recognizes that northwest New Brunswick has more than enough residents to make a commercial air service profitable, I move, seconded by the hon. member for Davenport (Mr. Caccia):
That the Minister of Transport authorize the extension of the landing strip at Saint-Leonard to the required length to accommodate EPA's Boeing 737 aircraft and that the required navigation facilities be installed to provide class I commercial service.


Mr. Speaker:: The House has heard the motion of the hon. member. Under the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there such consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE MINISTRY
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of
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June 21, 1978
urgent and pressing necessity. My motion concerns the well-publicized jaunts of the Minister of Transport (Mr. Lang) on MOT JetStar aircraft. These trips and tours by the minister have cost taxpayers over $1 million, including $8,000 to fly himself and friends to a Grey Cup game.
The minister has justified these political meanderings by saying that insistent demands for his presence by Canadians in all regions necessitated his abusing his ministerial privileges and that his flights were vital to the government in a partisan sense. In view of the fact that the minister now travels on Air Canada, I move, seconded by the hon. member for Portage (Mr. Masniuk):
That the Minister of Transport be instructed to inform the House of these facts: first, does his recent decision to fly Air Canada reflect a reduction in the number of requests for his presence in the various regions of the country; second, since, according to the minister, one of his reasons for flying JetStar was supposedly because of his hectic schedule, does the decision to fly Air Canada not suggest that he has reduced his workload and, if so, could he advise members what ministerial duties he is now neglecting?


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDUSTRY
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In light of the undertaking given over a year ago by the former minister of finance to extend start-up financing for the Trident Aircraft Limited of Vancouver, in Sidney, British Columbia, and in view of the unemployment situation in this country generally, I move, seconded by the hon. member for Surrey-White Rock (Mr. Friesen):
That the Minister of Industry, Trade and Commerce be required, now, to live up to the commitment he made in the House last December 15 to provide assistance to Trident Aircraft which will permit it to supply the 25 aircraft now on its order books.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. John C. Crosbie (St. John's West):: Mr. Speaker, my question is for the Deputy Prime Minister. It has to do with what I think is the most important problem facing Canada's economic future at the moment-even more important than the constitution-that is, the GATT negotiations which will settle our economic future for perhaps 10 or 15 years. I know the minister will answer with majestic solemnity, but I wonder if he can give us some information today.
The situation report that the minister's office has just issued on multilateral negotiations points out that the Canadian offer on industrial tariffs was made conditional upon satisfactory progress being achieved in three areas. One of those areas was the liberalization of tariff and non-tariff barriers to trade in the key resource-based sectors of forest products and non-ferrous metals. It also points out that the Canadian suggestion to have sector negotiations was not accepted.
My question is: Will the Canadian offer on industrial tariffs be withdrawn if there is no greater liberalization of tariff and non-tariff barriers in the resource-based sectors of forest products and non-ferrous metals and if there is not considerable liberalization of tariff barriers with respect to the export of Canadian fishery products?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Certainly, if the conditions we have laid down for good negotiations from the Canadian point of view are not met, then our offers will be reconsidered. At the end of the day we will have to examine, as a country, how much we are getting and what we have to give and if there is a balance, then we will settle. But we will not settle unless our offer is reached as it might have been if these conditions had been met.


John Carnell Crosbie: The problem is that of the Canadian people and Canadian industry. The minister's answer is very general. There are only 22 days to go before the July 15 deadline to settle general principles, which the United States insists must be done. I ask the minister the following question: The EEC delegation, according to the report from the minister's office, has taken the view that the Canadian offer, of which the Canadian people and the Canadian industry know nothing, includes too many exceptions and conditions, and they want specific improvements.
Can the minister tell the House what exceptions to the lowering of tariff barriers we have set in our offer, to what conditions EEC countries are objecting, and what industries are we going to protect by the exceptions we put forward? This has tremendous consequences for our industrial sectors in Ontario and Quebec. Can the minister tell the House, or arrange to give us information on this most vital matter?
June 21, 1978


Allan Joseph MacEachen: Mr. Speaker, in acknowledging the opinion expressed by the European Community and the United States that the Canadian offer is not satisfactory at the present stage, I should add that Canada has expressed its opinion to other partners that their offers are not satisfactory. For example, the hon. member has referred to the question of increasing markets for fish products of Canada. Up to the present time we do not feel we have received from the major markets we have in mind the kind of response we will need in order to have a successful negotiation.
With regard to the specifics of the hon. member's question, the exceptions, and so on, the offer made by the various countries generally is confidential. I will examine the situation to see whether I can provide the hon. member with more detailed information within that general concept.


John Carnell Crosbie: Mr. Speaker, in a speech of November 29, 1977, which was ignored by the government-as usual-the Minister of Agriculture made several good points. This is not usual, I will admit. He said there should be more involvement from the non-government sector in the trade negotiations at GATT and that representatives of commodity organizations and industrial associations should sit in at the GATT negotiations. Has the government taken that advice? Will it now take that advice of the Minister of Agriculture, or will it continue to ignore the Minister of Agriculture, as is usually the case?


Allan Joseph MacEachen: Mr. Speaker, I do not acknowledge the premise of the hon. member's question, or his conclusion. The Minister of Agriculture has made a very remarkable contribution to the preparation of the Canadian position at GATT.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: It has not been our intention, from the beginning, to include sector representatives in the negotiations themselves; we believe a small team conducting the negotiations is the most effective way. But we have been prepared to provide confidential briefings to the representatives of the various sectors which are affected. For example, we have made it possible for representatives of the Canadian Labour Congress to go to Geneva and to be briefed by our delegation on the spot. That offer would apply to industry and agriculture, as I explained in reply to a question which was asked last week.

[ Translation]


INDUSTRY
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, I want to put a question to the Minister of Industry, Trade and Commerce. It deals with tariff matters and with 150,000 jobs
Oral Questions
and workers in the province of Quebec, particularly workers in the textile, clothing, footwear and furniture industries.
In view of the fact that 34,000 jobs have been lost in the Canadian industry between October 1976 and October 1977, including 30,000 in the province of Quebec, particularly in the industries I have just mentioned, why is it, according to government guidelines contained in a document I have here, that the minister states that the textile, clothing, furniture and footwear industries, as a result of tariff negotiations, will disappear?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, I do not know what document the hon. member has at hand, but I can assure him and the House that we will do our utmost to see the textile, furniture and footwear industries have ample opportunity for expansion within Canada. In saying that, I should like to inform the hon. member that while manufacturing jobs decreased from 1976 to perhaps the middle of 1977, statistics now suggest that in the first quarter of 1978 manufacturing jobs in Canada increased by 9,000.


Some hon. Members:: Hear, hear!
[ Translation]


William Heward Grafftey: Mr. Speaker, I wish to direct a supplementary question to the Minister of Finance. But first I should like to read this government documentation which states in part that the government's main purpose must be above all to achieve progressive reduction through increased rationalization of the corporations involved and a minimum of assistance during the transition period.
Mr. Speaker, how will the Minister of Finance explain to Quebeckers this long term policy which calls for the disappearance of these industries? As far as jobs are concerned, what alternatives does the minister propose for Quebec workers?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, 1 suggest the hon. member disregards very important facts, namely that when I was acting as minister of industry, trade and commerce in 1976, we introduced a quota system in Canada, to ensure a more equitable sharing between imports and Canadian goods. This policy served as an excellent stabilizing factor on the textile and footwear industries in Canada.
The hon. member would be well advised to consult his colleagues on his side of the House who never stop complaining that we impose too many quotas, with the result, they claim, that importers in a number of Canadian cities are compelled to limit their turnover.

June 21, 1978
Oral Questions


NATURAL RESOURCES
John Edward Broadbent: Mr. Speaker, I have a question for the Prime Minister arising from an answer he gave in the House on Monday. In 1974, the Prime Minister promised that "new major projects in the natural resource field should have at least 50 per cent and preferably 60 per cent Canadian equity ownership". In the House on Monday, when asked about this the Prime Minister did not withdraw that commitment but reasserted it when he said:
-the commitment as it was made still stands.
Can he tell the House why he said that on Monday, when his government has continued to approve virtually all takeover bids in the resource sector since 1974 and, in particular, when he has approved offers in eight major cases which have completely violated the commitment he made in 1974 and repeated here in the House on Monday?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the commitment made in 1974, which was repeated on Monday and I repeat again today, was that we would move in that direction; that we did not expect to reach it overnight, but we were looking at a span of perhaps five years. Perhaps it would be of interest to inform the hon. member that, indeed, when FIRA negotiates with foreign companies which are investing in the resource area, it generally gets an undertaking from them to ensure that over a period of time they will be moving toward majority Canadian ownership.
I cannot say this is done in every case, Mr. Speaker, but I do know this is one of the conditions which is discussed in respect of many FIRA cases in order to determine whether the investment or the takeover is in the interest of Canada.


John Edward Broadbent: Mr. Speaker, the Prime Minister says it is a FIRA consideration which envisages a move toward 50 per cent to 60 per cent Canadian ownership. I point out to him that in a document I have here that is not what was said by the Minister of Industry, Trade and Commerce: he said that in most instances so far it has not proven feasible to secure full compliance with that objective. The Prime Minister is saying one thing and his minister is saying another.
Since all the hard evidence in terms of the major decisions that have been made-I have a list of them here-would indicate that the 50 per cent to 60 per cent equity ownership has not been achieved at all, I would ask the Prime Minister whether he is saying that we can look forward to this at some distant point down the road; or is he going to start now, at long last, acting on what he promised in 1974?


Pierre Elliott Trudeau: Mr. Speaker, I am saying that FIRA, since the beginning and since the announcement of that policy, has been discussing with those who want to invest or take over in Canada this particular policy and the assurance that some guarantees can be obtained, when possible, to move in this
[Mr. Chr6tien.l
direction. I do not know what particular cases the hon. member has in mind: perhaps he could send them over and we could provide detailed answers. I do know that very frequently, when FIRA cases are reported to cabinet, it is determined that there is an undertaking on the part of foreign investors that there will be a move toward a greater percentage of Canadian ownership.
There are, and there must be, cases where exceptions are made to that rule and that is perhaps what the Minister of Industry, Trade and Commerce was saying. Often the provinces themselves make very strong representations that they must have a particular investment in a particular area, especially where there is less development than in other parts of Canada, and sometimes we have to choose between federal objectives and provincial desires. Generally, there is a great attempt made by FIRA to put everybody on side, but sometimes we have to go in the direction of the provinces.


John Edward Broadbent: Mr. Speaker, I have a final supplementary. The document that comes from the Minister of Industry, Trade and Commerce states, with reference to the provinces:
No province raised any outright objection though some reserved their positions.
That is as to the general proposition that we should move toward Canadian control in the resource sector. So the general position of the provinces, at least as indicated in this document, is that they support the proposition. The Prime Minister, however, has indicated a general moving toward the policy. Either we have 50 per cent to 60 per cent, or we do not. Is the Prime Minister saying that 30 per cent is moving toward the implementation of his policy?
Finally, because I, for one, have genuine scepticism about the government's commitment, if the government is committed, will it-at least in the Husky Oil case-make its position clear today as to whether there will be Canadian control and ownership of that particular enterprise?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member has asked if 30 per cent is moving toward my policy. Obviously, if in year one they had 10 and in year two they had 30, yes, that is moving toward 50, because 30 is on the way to 50 from 10. When we say we want to reach that-


An hon. Member:: He thinks he is in caucus.


Pierre Elliott Trudeau: I am very happy to see that even some of the backbenchers understand this. I made it quite clear in my answer that we did not expect this to happen in one year; I said a period of five years.


An hon. Member:: You are ready for the Senate.


Pierre Elliott Trudeau: I tell the hon. member-who may not be interested in the answer and more interested in making speeches-that if he is interested in Canadian ownership, the answer is in what we are doing. For example, when we get a commitment from a company that it will move toward a position of majority ownership over the next three or four
June 21, 1978

years, we are satisfied with that. Also, as the hon. member said in quoting from the document, the provinces are satisfied as well. Only the hon. member, perhaps, would want to expropriate and make it Canadian overnight, but that is not the policy of this government.

[ Translation]


URBAN AFFAIRS
Mr. C. A. Gauthier (Roberval):: Mr. Speaker, my question is directed to the Minister for Urban Affairs and concerns the RRAP projects. Is it true that funds earmarked for his department for RRAP projects are barely enough to finance one project per municipality, to a maximum of $6,000 yet?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: Mr. Speaker, since we have made all small rural communities in Quebec eligible for the RRAP program, there has been a race for available funds. We will certainly not be able to grant all requests this year. But we are trying as much as possible to plan expenditures so as to help first of all the low income residents of the oldest houses. As for distribution of funds among municipalities, no final decision has been made. Everything will depend on the requests from the different municipalities. First we will grant requests from those municipalities which are best equipped to benefit from the RRAP program.


Charles-Arthur Gauthier: Mr. Speaker, on a supplementary. Assuming that those basic proposals are applied, does that mean that in the large municipalities in need of a RRAP, there might be one or two projects, depending on the population?


André Ouellet: The answer is yes, Mr. Speaker.


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, my question is for the Minister of Fisheries and the Environment. In view of the need to secure a satisfactory framework for the future, long-term development of the fisheries resources presently shared by Canada and the United States, I should like to ask the minister if it is the intention of the government to continue the suspension of the 1978 Interim Reciprocal Fisheries Agreement as implemented on June 2 until the boundary problems are resolved on a permanent basis.
Oral Questions


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, the discussions which took place on Monday and Tuesday continued late last night, and this morning, at a more junior level than the special negotiators. Considerable progress has been made on problems affecting the west coast. We did not feel that progress was adequate on the east coast discussions: these will be continuing, but I am expecting a fuller report from the special negotiators. For the moment, the agreement remains suspended.


Lloyd Roseville Crouse: A supplementary question, Mr. Speaker. Has the government obtained United States guarantees of a permanent stay of countervailing duties on fish? In order to get these guarantees, has the government been required to agree to give up any other assistance to the fishing industry besides the subsidy of two cents per pound on groundfish, by October 1, such as management and control over Swiftsure bank on the west coast?


Roméo LeBlanc: Mr. Speaker, there is no link between the two problems. The countervailing action which was in response to a complaint by United States fishing interests is many months old, before the suspension of the agreement. It was acted upon as a separate issue and is certainly not linked to present difficulties.


ATOMIC ENERGY CONTROL BOARD
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, the Minister of Energy, Mines and Resources has notice of our concern about certain emergency safety design systems and also requirements regarding safety of the public as a result of certain reports leaked to us and others from the agencies under his control in the atomic energy field.
I ask the minister why he has permitted public statements to be made by these agencies under his control that all is well with regard to emergency safety designs, when their own reports and, I suspect, reports which have reached the minister indicate that the agencies are very seriously questioning the design and efficiency of these emergency safety systems.


Hon. Aiastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, the reports the hon. member mentioned are, I presume, those which appeared in the press yesterday and the day before, some of them in the Globe and Mail. Information I have received indicates that these reports are based either on misinformation or misinterpretation of data and that, in fact, much of the concern reflected in them was dealt with in considerable detail in answer to written questions of the hon. member for Nanaimo-Cowichan-The Islands and the hon. member for St. John's East.
At that time a considerable amount of information was made public about these particular concerns. There were further discussions before the Porter commission, and cross-

June 21, 1978
Oral Questions
examination by Dr. Edwards, for example, of senior officers of the Atomic Energy Control Board and the same sort of allegation was made. I believe the answers at that time dealt with this particular concern quite satisfactorily.


Allan Frederick Lawrence: A supplementary question, Mr. Speaker. As a result of the information that has been placed in our hands and in the hands of others, obviously the Atomic Energy Control Board has itself been very seriously questioning not only these design standards but also safety standards in relation to the public at large: they have been questioning them very seriously, and apparently some changes have been made.
As a result of these reports and as a result of this highly complex and technical information, are the design faults themselves now being rectified in secret, or are the safety standards being lowered, again with no public disclosure of these facts?


Alastair William Gillespie: Mr. Speaker, the hon. member makes the perfectly legitimate point that the Atomic Energy Control Board has been seriously questioning procedures, which is the phrase he used. 1 think he would agree that that is the proper course for the Atomic Energy Control Board to take. I am very pleased that he has noted they have been acting in this area.
They have made it clear to me that they have these matters under continuing review, and if they see an opportunity with respect to a particular system which has not previously come to their attention and requires improvement, they will initiate the necessary measures.


THE CANADIAN ECONOMY
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Prime Minister. As Canadian productivity remains 20 per cent below that of the United States-by far our most important industrial competitor-and our wage rates are generally higher than theirs for comparable jobs, would the Prime Minister advise the House why he and his government persists in refusing to introduce productivity incentives to be paid in direct proportion to increases in productivity, as greatly increased productivity is the only way we can continue to pay higher wage rates than those paid by our chief industrial competitor and stay competitive in the marketplace?


Pierre Elliott Trudeau: Mr. Speaker, this seems like a re-issue of the speech I made in this House last October when I quoted those very figures. The difference

is that I indicated the 80 per cent figure had narrowed the gap from a much larger productivity gap and that, indeed, in some areas the productivity of Canadian workers was very close to the 100 per cent mark of productivity in the United States. If the hon. member wants to review the figures in detail, I can give him more information.
In so far as wage costs are concerned, I made the point that in the past few years our wage costs in manufacturing have been notably higher than in the United States. I indicated that with the devaluation of the Canadian dollar, this gap had also narrowed to practically zero.


George Harris Hees: Mr. Speaker, a supplementary. If the Prime Minister will take the time to read the latest reports put out by his government and the government of the United States on this question, he will see that what I have said is completely correct; that our productivity today is still 20 per cent lower than it is in the United States. This is a very serious situation.
In view of the fact that this country has a trade deficit of more than $11 billion per year in fully manufactured products-and they are the ones which produce the jobs-and as the Canadian Manufacturers' Association recently stated that if we can overcome this deficit we can provide 800,000 additional jobs for Canadians, would the Prime Minister, in the interest of this country, give very serious and worth-while consideration to introducing the kind of incentives that I have discussed with him on many occasions and with which I think he agrees, so that we can take the first important step to provide those 800,000 additional jobs for Canadians?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member has been following the multilateral trade negotiations, as I am sure he has, he will know that in the Canadian negotiations with Japan on one hand, and with the European Community on the other, we have been attempting to make sure that the totality of our exports to those countries includes a much higher percentage of manufactured goods.
One of the approaches we are using, which I am sure has the support of the hon. member, is to take part in the multilateral trade negotiations with sector approaches, indicating that if a country wants to import some of our raw materials at a certain tariff, it should also be importing the manufactured goods made from those raw materials at the same time. This has been explained to the House many times by the Minister of Energy, Mines and Resources, who initiated them when he was with Industry, Trade and Commerce, and by the present Minister of Industry, Trade and Commerce. I will make sure that the hon. member is brought up to date on their speeches.
June 21, 1978


MANPOWER
Mr. F. A. Philbrook (Halton):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. There seems to be a serious paradox where Canadian jobs are held open for Canadian workers by Canada Manpower, and potential immigrants who could fill those jobs are turned away, yet in practice employers are not able to fill those jobs with Canadian workers. Does the minister have any plan either to make immigration more flexible again, in this sense, or to fill Canadian jobs with Canadian workers?


Hon. Bud Cullen (Minister of Employment and Immigration):: My department certainly remains committed to seeing that Canadians have the first opportunity of jobs that are available in Canada, whether they are local people or not. In some cases we have to go across Canada to find them. However, where Canadians are unwilling to move or are unwilling to accept a particular job and will not fill the vacancy, we have to look to others in order to maintain a work force that quite often, in large measure, is Canadian.


UNEMPLOYMENT INSURANCE
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, my question is for the Minister of Employment and Immigration. I want to ask him about the recently revealed refusal to supply unemployment insurance information to the RCMP. In view of the fact that this information has been supplied for many years, in spite of the regulation regarding the confidentiality of unemployment insurance information, I ask what type of confidential information was supplied to the RCMP and under what authority was that information given?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the legal opinion I received recently indicated that in the past the information given to the RCMP went beyond that which was allowed under section 126. This was a legal interpretation of that section. It seems to me that it is open to interpretation. Because we wanted to get the matter clarified, it seemed the wisest policy was to issue instructions that information other than that for the administration of the Unemployment Insurance Act or the administration of social insurance numbers should not be released until we had clarification of section 126.
I am happy that the McDonald commission is looking into this particular area to give us advice either that we do have authority to give additional information as the minister shall determine, or that we should amend legislation to do what I
Oral Questions
think is appropriate, that is, to give this information to the RCMP to help their investigations.


William Hillary (Bill) Clarke: Mr. Speaker, I ask the minister what recent developments caused the ruling to be investigated and forced the government to stop giving that information.


Jack Sydney George (Bud) Cullen: Mr. Speaker, until the carping of opposition members, we used what we thought was common sense and tried to help the RCMP in their fight against organized crime-


An hon. Member:: Organized crime?


Jack Sydney George (Bud) Cullen: I might say that with the passage of Bill C-27, the hon. member's colleague, the hon. member for Hamilton West, quite correctly thought that the minister should have the responsibility for giving information under the Unemployment Insurance Act to other people, and insisted that the wording be changed from "the commission" to "the minister" so that the minister had to accept responsibility. I sought a legal opinion to determine whether we were acting within the provisions of section 126. The advice I have from legal counsel is to the effect that more information is being provided than was authorized by that section. Because of that, I have ordered it stopped.


CONSUMER AFFAIRS
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. A recent report by Robert Babe to the Restrictive Trade Practices Commission indicated that Bell Canada has overcharged its subscribers, who live mostly in Ontario and Quebec, by more than $1 billion. In light of this report, will the minister demand that Bell rebate to its subscribers their individual overpayments which went to Northern Telecom, a Bell subsidiary?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, that report had been commissioned by the director of research and investigation under the Combines Investigation Act. As you know, he operates independently under the statute. He has now received the report. I have not yet read it, but it will be presented as evidence to the Restrictive Trade Practices Commission, which is the usual practice, and they will make a judgment.


William Arnold Peters: I have a supplementary question to the Minister of Finance. Has this gouging of the public by Bell Canada been referred to the AIB for rebate action, in light of the advantageous rates charged to subscribers of publicly-owned telephone systems who purchased their equipment on the open
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June 21, 1978
Oral Questions
market rather than the principle used by Bell of buying from their own subsidiary?


Joseph Jacques Jean Chrétien: I think the legislation governing the AIB applies to Bell Canada. I will make sure the AIB look into that matter and report to me.


INDUSTRY
Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker, in view of the announcement made last week by the Minister of Industry, Trade and Commerce while he was in Kelowna, B.C., that he was going to give $6 million in financing to Triphibian Helicopters, and in view of the confusion this has caused in Kelowna because the Regional Economic Development Commission know that Triphibian Helicopter's first choice was to locate in Kelowna, not in Victoria, I ask the minister whether it was the Triphibian aircraft that he was announcing, or the Trident aircraft, and the source of the $6 million.


John (Jack) Henry Horner: Mr. Speaker, there does seem to be a great deal of confusion. I announced in Vancouver on Monday that the Enterprise Development Board, under my department, is prepared to guarantee loans at the bank of up to $2 million for Trident Aircraft Industries, which is to manufacture the Trigull, an amphibian, four to six-passenger paraplane, on the west coast, to be assembled in Sidney. With the $2 million that my department, through the Enterprise Development Board, is prepared to guarantee, Treasury Board has approved a $4 million repayable loan to the company.
That loan is to be given as production proceeds and repaid as sales on the plane are made. In total, it is $6 million for the establishment of an aircraft industry on the west coast, hoping that the spin-off from that industry will enable offset programs to be taken from the huge aircraft industry to the south into Canada, thereby creating a large number of jobs in the air industry of the west coast.


George H. Whittaker: Mr. Speaker, I have a supplementary question. In view of the fact the minister clearly announced in Kelowna that it was for Triphibian Helicopters, I would ask him if the same arrangement, or project, is available for Triphibian Helicopters who want to locate in Kelowna, where he was making the announcement?


John (Jack) Henry Horner: Mr. Speaker, I had the privilege of addressing a roomful of about 500 people, or more, at a nominating convention in Kelowna. It was a great meeting. At no time did I mention helicopters in my speech. And I can say to the House and to the country that I was very pleased with the

calibre of candidate who came forward and offered himself to serve that area.


LOTO CANADA
Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, I have a question for the Prime Minister, who I am sure is pleased, having regard to the calibre of his Minister of Industry, Trade and Commerce, that there are some good candidates presenting themselves to the Liberal party.


Some hon. Members:: Oh, oh!


Mr. Basford:: Jealousy will get you nowhere.


Charles Joseph Clark: My question relates to lotteries and to a potentially serious federal-provincial controversy. The Prime Minister will remember that the then minister of industry, trade and commerce, in a standing committee in mid-June, 1976, in relation to the federal lottery said, "We could decide to carry on or withdraw completely if there is an understanding between the provincial governments and the federal government". In other words, it was very clear that there would be a carrying on of the federal lottery only with understanding of the provinces.


Stanley Ronald Basford: That was not the understanding.


Charles Joseph Clark: It was certainly the understanding of the provinces, as nine of them made clear when they sent a telex to the Prime Minister about a week ago expressing "shock and disapproval that the Government of Canada seems determined to bulldoze ahead in this field in contradiction to understandings."
Has the Prime Minister responded to this telex, and has he agreed to hold back any federal lottery plan until there has been more consultation and collaboration with the provincial governments concerned?


Pierre Elliott Trudeau: Mr. Speaker, the undertaking was not to prolong the lotteries without coming before parliament, and we intend to discharge this commitment. As far as the provinces are concerned, both the minister presently responsible in this field and the former minister have sought to find a formula with which the premiers would agree. From the telegram-and I have not yet seen it-presumably they do not agree. That is, perhaps, natural. This is a field which is open to both levels of government. It is a revenue-producing field. I see no reason, in theory or in practice, why the federal government should abandon it to the provinces exclusively.
June 21, 1978

I should like to know whether it is the position of the Conservative party that the federal government should not operate lotteries under any circumstances. That is not our position, neither does the constitution nor any other law indicate that it should be.


Charles Joseph Clark: Our position is that the Government of Canada should honour its undertakings.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Prime Minister is being coached by his colleague. He will find that reading the record is a more reliable means of understanding the undertaking which was given. I suggest he read the record. Will he confirm that it is the intention of the Government of Canada to move into a lottery program whereby lottery tickets will be dispensed in slot-machine fashion-using, incidentally, machines imported from the United States-on a 24-hour basis in shopping centres across the country, to bring revenues to governments in competition with existing provincial programs which provide funds for hundreds of thousands of people involved in voluntary organizations across the country?
Will the right hon. gentleman confirm that this slot-machine approach is the one the government is contemplating in competition with voluntary agencies across the country?


Pierre Elliott Trudeau: The approach is certainly not one of desiring competition. I note that both the minister responsible for lotteries and his predecessor have offered to the provinces some form of agreement whereby there would be one lottery for all Canadians involving federal and provincial governments and the proceeds would be shared. I believe sharing was offered on a 50-50 basis. As to the details, whether it is to be operated by using slot-machines or not, I will take notice of the question and ask the minister, who is perfectly able to explain our policies, to answer the question.
On the matter of principle, I find it strange that the Leader of the Opposition, when considering any scheme which would bring revenue to governments, always seems to be on the side of the provinces. He obviously does not want to be the leader of a national government; he wants to stick up for the provinces on every issue. We take the position that this field is open to both levels of government. Actually, it was made open by a law of parliament presented by this government. Until we presented it, the provinces could not engage in lotteries. But we presented the law and it was passed. We have tried to find a common scheme upon which everyone would agree. The provinces, naturally, want the whole field for themselves and, naturally, the Leader of the Opposition thinks that is what the position should be.


Some hon. Members:: Hear, hear!
Oral Questions


Charles Joseph Clark: One of the changes I intend to introduce is to be the head of a truthful government which keeps its word.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Also, the head of a government of a nation that stays together, rather than being driven apart by intransigence and stubbornness at the centre. Not surprisingly, the Prime Minister has not read the telex from the provinces, though it should have been received in his office some days ago. I would ask him to read it and to pay particular attention to the request over the signature of the chairman of the conference, Mr. Shillington, of Saskatchewan, that the Prime Minister himself become involved in this matter and assure the provinces that the federal government will not proceed until an attempt has been made by the right hon. gentleman himself to reach consensus with the premiers. Will the Prime Minister give us that undertaking?


Pierre Elliott Trudeau: I do not think I have to give such an undertaking.


Some hon. Members:: Oh!


Pierre Elliott Trudeau: It has been my constant practice to receive telegrams from the premiers and to respond to them in order to each the best possible agreement between both levels of government. However, since this is a federal system, it is obvious there will be some points of disagreement, and the difference between this party and the party opposite is that we do not intend to try to keep the country together by giving all the powers of the federal government to the provinces.


Some hon. Members:: Hear, hear!


HEALTH AND WELFARE
Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, my question is for the Minister of National Health and Welfare. Has the hon. lady made any response to recommendations from the recent federal-provincial conference on child abuse, or the United Nations call for action on this question by 1979, the Year of the Child? In particular, has she considered a suggestion to host an international symposium in Canada in 1979 to develop a greater awareness of this problem and better approaches to resolving it?


Hon. Monique Begin (Minister of National Health and Welfare):: I have read the recommendations released from the federal-provincial conference on child abuse and the department has studied them. I have expressed my own reaction in a letter to Keith Norton, the Ontario minister who co-hosted the conference with the federal government. As for the suggestion
80045-52%

June 21, 1978
OraI Questions
about an international symposium, I think it would be more appropriate if we were to consider a Canadian approach. My role is only to be supportive of any group in Canada which might wish to do something during the Year of the Child in the field of child abuse or family violence. Any national conference would be welcome, or any project which could help deal with these issues.


ATOMIC ENERGY
Mr. Bob Wenman (Fraser Valley West):: I have a question for the Minister of Energy, Mines and Resources, Mr. Speaker. Have international Candu purchasers been informed of potential problems with the Candu emergency cooling system and the possible need to operate at well below the rated full power level?


Alastair William Gillespie: If the hon. member is asking whether potential customers read the Globe and Mail, I cannot answer him. If he is trying to give credence to false stories, perhaps he is succeeding.


Robert Lloyd Wenman: The hon. member on this side is attempting to ensure that Canada does not become a nuclear prostitute. Since safety standards are being examined, may I ask whether technical information leading to any reduction in standards will be made public, thereby ensuring the credibility or acceptability of any new or revised standards?


Alastair William Gillespie: As I indicated in an earlier answer to the hon. member for Northumberland-Durham, the Atomic Energy Control Board has already placed a great deal of information upon the public record. I have placed further information before the House in answer to questions on this subject. There will undoubtedly be further licensing requirements on the part of the Atomic Energy Control Board. I have indicated that the review is a continuing one and that these further requirements will be made public when they become effective.


CULTURAL AFFAIRS
Mr. Leonard C. Jones (Moncton):: Mr. Speaker, my question is directed to the Secretary of State. Has the Secretary of State, his department or any department of the federal government, made any proclamation proclaiming July 1 as Canada Day, so-called? Legally, July 1 is Dominion Day. Would the
minister also inform the House whether the government and, in particular, his department intend to continue to disregard the law of this House in this connection, or does the government intend to introduce legislation to change Dominion Day to Canada Day?


Hon. John Roberts (Secretary of State):: Mr. Speaker, there were several questions contained in the hon. member's question. As to the first part of it, I believe the Governor General may very well issue a proclamation. I am not yet sure on what date that will occur. As to the other question, as I think I replied to the right hon. member for Prince Albert last year, we intend, again this year, to celebrate Canada Day on Dominion Day.
 * *


BUSINESS OF THE HOUSE
Mr. Baker (Grenville-Carleton):: Mr. Speaker, I rise on a point of order. My point of order relates to the business of the House. I would like to inform the House of the motion for the allotted day tomorrow. It is an allotted day for the Progressive Conservative party. The motion is not framed as-nor is it intended to be-a non-confidence motion. Hopefully, backbenchers on the government side will prod their government, and the government itself will see fit, to support the motion. However, I want to indicate to the House that there will be a vote on this motion, which reads as follows:
That this House reaffirms its support for the principle of freedom of information as a prerequisite to open and responsible government, as endorsed unanimously by the House on February 12, 1976, and urges the early introduction of appropriate legislation providing for certain precise and limited exceptions subject to a review process with ultimate appeal to the courts.
That motion will stand in the name of the Leader of the Opposition for debate tomorrow.


Allan Joseph MacEachen: Mr. Speaker, as I heard the terms of the motion read by the hon. member for Grenville-Carleton, it appeared that there would be no objection on our side to the acceptance of such a principle. But as the hon. member knows, under the Standing Orders the very motion which is put is described as a motion of non-confidence, and if hon. members are agreeable to waiving the effect of the standing order, then we would consider whether we could vote on the matter.


Walter David Baker: Sure; fine.

June 21, 1978



ROUTINE PROCEEDINGS


John (Jack) Henry Horner: Mr. Speaker, I would like to table, under Standing Order 41(2), a memorandum of understanding in relation to the export of certain textiles and textile products between the Government of Canada, the government of the Socialist Republic of Romania, the republic of the Philippines, the government of Hong Kong, the government of Poland, the republic of Korea, and the People's Republic of China. I also wish to table a statement of intent relating to exports from Taiwan to Canada.


ADDITIONAL SEATS FOR PRIME MINISTER AND LEADER OF THE OPPOSITION
Mr. Ralph Stewart (Cochrane) moved: for leave to introduce Bill C-464, respecting the Prime Minister and the Leader of the Opposition and the House of Commons of Canada.


Some hon. Members:: Explain.


Ralph Wesley Stewart: Mr. Speaker, this bill would provide two additional seats in the House of Commons, one for the Prime Minister and one for the Leader of the Opposition, without being defined by constituency. Since both leaders represent all Canada and conduct electoral campaigns in all parts of Canada, it is appropriate that their representation in this House not be limited to a single constituency.


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

Ralph Wesley Stewart: for leave to introduce Bill C-45, respecting the duration of every House of Commons.


Some hon. Members:: Explain.


Ralph Wesley Stewart: Mr. Speaker, several bills have been introduced with respect to fixed dates for elections. The advantages regarding stability and intelligent planning have been expressed time and time again in this House. This bill would differ inasmuch as it would specify that a general election would take place on the first Monday of June every four years. It also provides that new administrations take over on July 1, Canada's national day, by means of a special
Order Paper Questions
ceremonial sitting of both Houses on the lawns of parliament with the participation of Canadians from various aspects of Canadian life, both spiritual and temporal. Governments would be assured of remaining in office for four years without the chance of defeat as at present.


Mr. Alexander:: I don't know about that.


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

Ralph Wesley Stewart: for leave to introduce Bill C-466, to establish the electoral district of Parliament Hill.


Some hon. Members:: Explain.


Ralph Wesley Stewart: Mr. Speaker, this bill is similar in principle to the bill introduced by the hon. member for Winnipeg North Centre (Mr. Knowles), but it differs in some respects. First, it would provide for a proper election of the Speaker by his peers which would be handled by the clerk in this chamber. Second, the election would take place during the final session of a parliament for the following parliament. This would permit an easy transition during the general election period, and it would permit the choice of a Speaker to be made by members who know the candidates, which would not be the case if done after a general election. Third, the Speaker would not run in general elections. Fourth-and this would be of some interest-each unsuccessful candidate for the office of Speaker could still submit himself to the general electorate in a constituency.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise on a point of order. In relation to the bills with which we have just been dealing I believe the record should be clear that the motions were seconded by the hon. member for St. Jean (Mr. Smith) and not Mr. Smith (Churchill).


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: 1,162, 1,359, 1,439, 1,440, 1,441 and 1,609.

June 21, 1978
Order Paper Questions


Mr. Cossitt: What are the names of all persons, including crew members, late additions to the passenger manifests, etc. on Department of National Defence Flight 712, that left Ottawa on December 18, 1977 for Vancouver?


Hon. Barney Danson (Minister of National Defence):: flight 712 is a scheduled flight from Shearwater to Vancouver with scheduled stops at Ottawa, Trenton, Winnipeg and Edmonton. The names of the passengers who boarded this flight in Ottawa were as follows: WO P. Davies; Capt A. McKay; Capt B. Campbell; Pte B. Davis: LCol J. Holt; Maj D. Johnston; WO M. Keddy; M/Cpl D. J. Dolinski; WO and Mrs. H. Vieweg; Cpl Kruger; Mr. Morewood; Dr. J. Reesor; Mr. and Mrs. S. Schumacher, M.P. and 2 children; M/Cpl C. Silver; Mr. B. Telford; Cpl D. Wells; Lt J. R. Vallee; Mr. B. Clarke; Sgt R. R. Germain; Capt D. Lascelle; Miss B. McDonald; WO C. M. Pallard; Sgt J. Whelan; Capt A. Burton. In regard to crew members see question No. 2,881 of the second session of the 30th Parliament, Hansard No. 175 page 8266 dated October 17, 1977.


Mr. Haidasz: What was the total budget for the federal multiculturalism program for each year since October, 1971?


Hon. Norman A. Cafik (Minister of State (Multiculturalism)):: In so far as the Department is concerned, its total budget for the multiculturalism program since 1971-1972 has been: Fiscal Year, 000's: 1971-72, Operating, 585; Grants, 1,594; Total, 2,179. 1972-73, Operating, 947; Grants, 2,309; Total, 3,256. 1973-74, Operating, 2,528; Grants, 3,131; Total, 5,659. 1974-75, Operating, 2,592; Grants, 2,921; Total, 5,513. 1975-76, Operating, 2,559; Grants, 2,735; Total, 5,294. 197677, Operating, 2,259; Grants, 2,916; Total, 5,175. 1977-78, Operating, 2,291; Grants, 3,716; Total, 6,007.


Mr. Mitges: For the fiscal year ended March 31 (a) 1976 (b) 1977, what were the expenditures of the multiculturalism directorate under the heading of (i) operating (ii) capital (iii) grants and contributions?


Norman Augustine Cafik: See list below.
Multiculturalism Directorate (In thousands of dollars)
Expenditures	Expenditures
1976-1977	1975-1976
Salary	583	612Non-salary Expenditures	1,381	1,343Total Operating Expenditures	1,964	1,955

	Expenditures	Expenditures
	1976-1977	1975-1976
Capital	1	20
Grants: Multiculturalism Projects				
Cultural Enrichment	-		
Canadian Ethnic Studies (Visiting	-		
Professors) Intercultural Communications		
Immigrant Orientation	7	31Ethnic Liaison	1,369	1,244Identities Project	696	556Multicultural Centres	349	613Third Language Teaching Aids	68	81Total Grants	2,489	2,525Contributions: *Language Textbooks	193	158Language Instruction	3,930	1,130Total Contributions	4,123	1,288Total Grants and Contributions	6,612	3,813
These contributions are administered by Citizenship Registration Program and come within their budget.


Mr. Mitges: For the fiscal year ending March 31, 1978, what are the forecast expenditures of the multiculturalism directorate under the heading of (a) operating (b) capital (c) grants and contributions?


Norman Augustine Cafik: See list below.
Multiculturalism Directorate (In thousands of dollars)
Salary	Budget 1977-1978 723
Non-salary Expenditures	1,691
Total Operating Expenditures	2,414
Capital	-
Grants: Multiculturalism Projects	1,785
Cultural Enrichment	1,074
Canadian Ethnic Studies (Visiting Professors)	27
Intercultural Communications	530
Immigrant Orientation		
Ethnic Liaison		
Identities Project		
Multicultural Centres		
Third Language Teaching Aids	-
Total Grants	3,416
Contributions: Szechenyi Society	300
Language Textbooks	193
Language Instruction	2,830
Total Contributions	3,323
Total Grants and Contributions	6,739
*These contributions are administered by Citizenship Registration Program and come within their budget.
June 21, 1978


Mr. Mitges: For the fiscal year ending March 31, 1979, what are the estimated expenditures of the multiculturalism directorate under the heading of (a) operating (b) capital (c) grants and contributions?


Norman Augustine Cafik: See list below.
Motions for Papers


Mr. Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall question No. 710 be deemed to have been made an order for return?


Some hon. Members:: Agreed.
Multiculturalism Directorate (In thousands of dollars)
Salary	Budget 1978-1979 772
Non-salary Expenditures	1,826
Total Operating Expenditures	2,598
Capital	-
Grants: Multiculturalism Projects	2,360
Cultural Enrichment	1,295
Canadian Ethnic Studies (Visiting Professors)	311
Intercultural Communications	585
Immigrant Orientation	-
Ethnic Liaison	-
Identities Project	-
Multicultural Centres	-
Third Language Teaching Aids	-
Total Grants	4,551
Contributions: Group Development Operations	250
Canadian Folk Arts Council	145
Language Textbooks	193
Language Instruction	3,132
Total Contributions	3,720
Total Grants and Contributions	8,271
These contributions are administered by Citizenship Registration Program and come within their budget.


Mr. Howie: In the fiscal year ending March 31, 1977, did the Secretary of State grant any money under programmes or projects, to persons or organizations in New Brunswick and, if so (a) in what amount (b) was the opportunity to apply for such grants advertised in the New Brunswick media and, if so, on what dates?
Return tabled.


Mr. Speaker:: Shall the remaining questions be allowed to stand?


Mr. Beatty:: Mr. Speaker, I would like to ask the parliamentary secretary whether he ever intends to answer my questions.


Yvon Pinard: Mr. Speaker, we endeavour to answer as many questions as possible, and to date we have an average of 70 per cent, which is excellent.


Mr. Lambert (Bellechasse): During the fiscal year (a) 1976-77 (b) 1977-78, did the government grant money for the transportation of milk in the area located east of Levis, Quebec and, if so (i) in what amount (ii) to whom or to which companies?


Hon. Eugene F. Whelan (Minister of Agriculture):: The
transportation of milk is a provincial responsibility and, therefore, any assistance provided would come under a provincial program.


Yvon Pinard: Mr. Speaker, if question No. 710 could be made an order for return, this return would be tabled immediately.


Mr. Speaker:: Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.


Yvon Pinard: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Does the House agree?


Some hon. Members:: Agreed.

June 21, 1978
Income Tax Act



GOVERNMENT ORDERS


Allan Joseph MacEachen: that Bill C-56, to amend the statute law relating to income tax and to authorize payments related to provincial sales tax reductions, be read the third time and do pass.


Mr. Speaker:: Is it the pleasure to the House to adopt the said motion?


Mr. Ron Huntington (Capilano):: Mr. Speaker, I must say that the trouble we have had with this bill to which closure was applied during second reading, was an example of the abuse of power by the government, with the government matching the opposition speaker for speaker, but closure on committee of the whole stage of this bill, on some real issues affecting Canadians, was not just an arrogant abuse and exercise of power but was another blow of the hammer that is chipping away at the foundation of parliamentary democracy and our liberty.
The confusion that we just saw when third reading of Bill C-56 was introduced is a forerunner of the confusion for which the Canadian people will have to pay and which they will have to face as this bill takes effect. I am very surprised that at third reading there was no statement from the Minister of Finance (Mr. Chretien), let alone a statement from his parliamentary secretary.
Like other hon. members, I have worked hard at one or two aspects of Bill C-56, particularly the research and development matters in clause 6. Clause 14 affecting the transfer of farm property is of serious concern, and that aspect needs more debate and understanding, as I believe does clause 6. I am also aware of the weaknesses in clause 32 which will create serious complications for the small business sector in Canada. I would have liked to see more clarity and understanding developed within that area of the bill during committee of the whole. Clause 34 also is of serious concern to Canadians, as is evidenced by the mail load which members of parliament have on that subject, and the Minister of Finance himself admitted that this clause of the bill could stand more work.
This is a last minute bill, of a slapdash nature. The Minister of Finance denied the people of Canada through the parliamentary system the right to explore, improve, and even develop a greater understanding of these and many other issues within this tax bill.
Others will probably comment on these clauses, but I was one of several members who did considerable work on the research and development issues which were debated in the budget debate and in clause 6 of the bill. With background help, very substantive amendments were prepared which would have improved all industrial aspects of research and develop-

ment in Canada and would have put in place very real incentives which would have worked to smooth out this area of need in the Canadian economy. These amendments were passed on to the Minister of Finance during committee of the whole last Friday, but no, all this effort died with the "tough guy" use of closure during committee of the whole.
The announcements of both the Minister of Finance and the Minister of State for Science and Technology (Mr. Buchanan) are misleading and overstated, not only in the budget speech of the minister but in the statements released by the Minister of State for Science and Technology. Both these ministers have received bad advice, and the record should be corrected.
Basic to the amendments given to the Minister of Finance last Friday was the separation of research and development expenditure into current and capital expenditures. Second to that premise, we suggested that full credit be given to both capital and current research and development expenditures for companies which have an aggregate research and development expenditure of less than $1 million. Companies in this category make up approximately 25 per cent of the industrial research and development expenditure in Canada.
For companies with aggregate research and development expenditures of over $1 million, we suggested that the tax credit or allowance be based on incremental increases in current and capital expenditures. Seventy-Five per cent of industrial research and development expenditures are in this category of companies, that is, companies which have already aggregated an expenditure in research and development greater than $1 million.
We also proposed in the amendments given to the minister in committee of the whole that small firms without profit upon which to claim a credit or an allowance be given a grant, of course under rigid and stringent conditions.
What would these amendments cost, particularly in terms of the statements issued by both the Minister of Finance and the Minister of State for Science and Technology? In our study of that part of the presentation we looked at the May 10, 1978, issue of StatsCan under "Projections for Research and Development" and we found that in 1978, for current research and development expenditures there would be $933 million, and the increment over 1977 would be $72.3 million netted out after the government component has been subtracted. On capital research and development for 1978, we find in these statistics that the capital would be $93.9 million, with the increment equalling $1.1 million, for a total R and D expenditure in 1978 of $1026.9 million, and an increment of $73.4 million.
I would like to point out that the over-all growth rate for 1978 is expected to be only $75.5 million gross, or 8.4 per cent, versus the $175 million which was announced by the Minister of State for Science and Technology.
We believe that the best way-and we were not given the courtesy of discussing this in committee of the whole as a result of the minister's closure of that process-is to go the tax credit route rather than allowing the 50 per cent additional
June 21, 1978

allowance which the government is proposing in Bill C-56. The reason for that is that if you look at the 25 per cent credit on capital, plus the 25 per cent credit on the first SI million of capital expenditure, you get a total of $81.74 million. This is within the $85 million announced by the Minister of State for Science and Technology. So we are not asking that more be allowed in the form of expenditure than was announced in the official statement of the government. According to the studies we have done on this subject, the tax credit route is the most sensible route to take, putting in place the incentives which would work best in the private sector and in the industrial component of Canada.
I might also say that it was recommended at the first ministers' conference, particularly by the first minister of the province of Ontario, the Hon. William J. Davis, in the Economic Development Policy for Canada" published by Ontario, on February 13-15, 1978, that the government should replace existing research, design and development assistance programs with federal and provincial tax credits, and I emphasize tax credits, which would provide direct incentives for expanded levels of R and D activity in Canada.
In light of all this, and in light of the arithmetic which was available to the government, why has it resisted the tax credits? I have not been able to understand that fully. Also I do not understand why it insists on proceeding with its 50 per cent additional allowance which does not match the figures which the two ministers have announced to the House and to the people of Canada.
With respect to the 50 per cent research allowance amendment, if the government had accepted the principle I have outlined in my short address today and applied the 50 per cent research allowance, the cost to the government on the first $1 million, all capital, plus the first $1 million current, fully eligible, would be $65.39 million, again well within the figures stated by the minister and well below the amounts which would be available as an incentive to industry if we took the tax credit route. That is why I have been debating with the Minister of Finance during committee of the whole stage in the short time I was allowed, and pleading with him, to take the tax credit route versus the route proposed in Bill C-56. If we compare these two cases to the existing proposals in the bill, the government will allow $38.15 million of incentive. The Minister of Finance has announced $50 million. If one combines that with the other $35 million which was announced by the Minister of State for Science and Technology, the total is $85 million. In actual fact the bill before us, in terms of the opening statements of both ministers, is nothing but flimflam. There is nothing close to $85 million of incentive available to the industrial sector on research and development. The figure is $38.15 million, on the basis of the bill as it stands at third reading.
The Minister of State for Science and Technology indicated that the government is sincere and is prepared to provide an incentive worth $85 million in order to realize the growth
Income Tax Act
target for industrial research and development which has been announced. The only way to get there is with the tax credit. I attempted to get that across to the minister during committee of the whole proceedings. There is no other way to get there. The 50 per cent allowance will just not do the job. I challenge both ministers to withdraw their inaccurate statements which indicated that $85 million was available through this legislation.
If the minister is unwilling to go the tax route and attempts to pass off some of the costs of industrial research and development to the provinces, then he should accept some of the principles which were submitted across the floor in these amendments. He should allow the 50 per cent allowance to apply on the basis of the amendment I attempted to present during committee of the whole stage. If the government went that route, instead of $85 million being the incentive component to the industrial community, the incentive component would be $65.9 million, which is 20 per cent less than the benefits advertised by the Minister of State for Science and Technology.
The amendment on allowance is still $27.24 million better or 71 per cent higher than the existing budget proposal. The minister and the government cannot see their way to the tax credit proposal, which is the correct way to go if incentive is to be put into the industrial sector. They insist on staying with the 50 per cent additional allowance. They would be 71 per cent better off in terms of incentive to the industrial sector than they are under the bill as it stands now.
During committee of the whole stage we were attempting to get at some fundamental aspects of the bill. I am so concerned about this, and the closure which was imposed on committee of the whole stage, that I wish to move, seconded by the hon. member for Red Deer (Mr. Towers):
That Bill C-56, an act to amend the statute law relating to income tax and to authorize payments related to provincial sales tax reductions, be not now read the third time, but that it be referred back to the committee of the whole for the purpose of reconsidering clauses 6 and 14 thereof.


Some hon. Members:: Hear, hear!


Mr. Gordon Towers (Red Deer):: Mr. Speaker, I welcome this opportunity of making a few comments with regard to Bill C-56. The minister purports that this bill will perform a certain function for people involved in family farm corporations. I contend it will not.
Perhaps the Minister of Finance (Mr. Chretien) does not understand or particularly care. Possibly the same holds true for the Minister of Industry, Trade and Commerce (Mr. Horner). He should know better, but perhaps he does not have the time to give this aspect of the bill the respect it should have. He could have shown a little more consideration for the people who are caught in this rollover of family farm capital gains tax. Of course the Minister of National Revenue has interpreted the bill in the manner that he understands it. The minister in charge of the Canadian Wheat Board (Mr. Lang) said that the bill is complete in itself. This shows how little he knows about it. The Minister of Agriculture (Mr. Whelan) is

June 21, 1978
Income Tax Act
the one man who should be up on his feet protecting the rights of people involved in Canadian agriculture. To my knowledge, he has not made a speech. Undoubtedly he is not aware of the critical situation in which quite a large number of people are caught.
I noticed the hon. member for Battleford-Kindersley (Mr. Mclsaac) was in the House a few moments ago. He stated that he was in favour of the minister bringing in an amendment to protect the people caught in this act. When the time comes to vote on this matter, I trust he and the hon. member for Assiniboia (Mr. Goodale) will give us support. If anything is worth doing, it is worth doing well.
On April 10 during the budget speech, as reported at page 4318 of Hansard, the Minister of Finance said the following:
The ways and means motion contains several other important changes. First, the current provisions which permit the transfer of farm land and buildings by a farmer to his children without payment of capital gains tax will be extended to incorporated family farms.
We took the minister's word at face value and thought that he meant what he was saying. Later we found out that either he was playing loose with words or did not know what he was talking about. We brought this to the minister's attention on April 25 in committee. As reported at page 23:22 of the committee report, the minister replied as follows:
I have been made aware of that complaint... I have received some correspondence on that and I have looked into it. We have discussed it thoroughly with the ministry of revenue, who made the interpretation, and I am planning to clarify those clauses in the bill which will be in front of the House following my budget. It is one of the amendments that I would like to put forward in order to clarify the interpretation.
The people who are caught in this are those who have set up family farm corporations but did not include all the farm property in that corporation. In turn, the corporation leased, rented, or entered into some form of agreement with the owner whereby the farm operation continued. With the interpretation given by officials of the Department of National Revenue, there is no means whereby this property can be rolled over to that corporation, or from the owner to a member of the corporation who is a descendant. There is only one thing that can happen in such a case, and that is that capital gains tax will have to be paid on the property when there is a transfer or exchange.
On April 25 the minister went on to state:
I do not want to put the blame-I just think it is an interpretation. I do not want to say that it is my shop or their shop. I just think, as Minister of Finance, that my responsibility is to change it. I do not want to know who made the interpretation. That is a fact of life that I want to correct. I think I would like to see the face of the man who made that decision. It was not me but I will correct the guy.
That is what this amendment is all about. We are asking the minister to take this legislation back to the committee of the whole and make this correction so that these people are not going to be caught in this horrible situation.
In the event of a death in a family there will be a sizable amount of money transferred from either the corporation or the individual to Revenue Canada. This is one of the reasons

this deferral of capital gains tax is so important. In a great many cases if the tax has to be paid, the property will not be retained by the corporation of the family, but will have to be sold in order to pay the tax to the federal government.
On June 6 the minister in charge of the Canadian Wheat Board, who should also know what the situation is, had this to say:
In the case of this budget, the extension of this rollover provision to the small corporate farm is simply the completion-
Let me underline that word "completion". He is saying that this is a finalization. He does not realize that a great many people out in the field accept minister's words at their face value. I suggest they will find out too late that they are caught by this situation. That minister went on to say:
-is simply the completion of a piece of work which was started in a previous budget when the direct transfer of a farm from parent to child was already made a matter of special consideration so that the capital gains tax need not be paid at that time.
On June 12 I put a question to the Minister of Finance asking him to clarify his position, and this is what he said, as reported at page 6302 of Hansard:
The hon. member is talking about leasing land. If the owner wishes to do that, he can transfer the land to the corporation tax free before the rollover. That is the way in which the provision is understood by my officials, and there is no need for any change in the law.
Later on, as reported on the same page, I asked the following question:
-I should like to make this matter clear. Can a farmer who owns land that is being leased to a corporation which is the operator transfer that land without being subject to capital gains tax? Can it be sold or transferred to the corporation?
The minister stated in reply:
The questions asked by the hon. member are covered by the rollover provisions in the act.
The minister also said, in answer to a question by the hon. member for Moose Jaw (Mr. Neil):
If a farmer is making a transfer to another entity a third person, and not a corporation which he owns, he is required to pay capital gains. I was speaking about the transfer of lands to his own corporation. The transfer of farm lands has not been exempted completely from any capital gain. That is not what is meant.
The following morning before the committee of finance Senator Guay made the following statement as it appears at page 43:7 of the committee hearings of June 13:
I understand that it is quite common for farmland to be owned by a taxpayer who leases it to his farm corporation. In these circumstances it is the corporation and not a member of the taxpayer's family that carries on the farming business. Consequently, neither the current law nor the proposal in Bill C-56 would permit a deferral of the capital gains tax where the land is transferred directly from the taxpayer to his child. If you would like I can repeat that. I will give you a copy of it, if you like, to look at.
That is a pretty emphatic statement by the minister in charge of national revenue. It emphasizes the confusion in the minds of the several ministers involved with this legislation. Certainly those people who think they are home free in respect of capital gains tax and the rollover, not only corporations but private individuals, are really going to be caught. They will suffer because the value of land has increased to such an
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extent the tax will also be a considerable amount. It is not as though the money were available. I have no quarrel where the land is sold to an outsider and there is money available, but in many cases when the land is transferred from an individual to a descendant, either by way of a corporation or a direct transfer between individuals, these people who presume they are clear because of this legislation are going to be caught.
This whole thing is a mess, and it was my hope that the Minister of Finance would have seen fit to clear it up when he had the opportunity to do so at the time the legislation was before the committee of the whole. That is why I would hope that even at this late date he might reconsider and accept the amendment before the House.
It would not take long to clear up the problem that has been referred to by the hon. member for Capilano (Mr. Huntington), myself, and several others. I know I speak on behalf of all hon. members who represent farming areas in western Canada, including the hon. member for Wetaskiwin (Mr. Schellenberg-er). He has been vitally concerned with this from the beginning. In fact we had a discussion recently as to how one could establish the definition of a corporate family farm that would qualify.
I hope the minister will take this legislation back to the committee of the whole for a few hours in order that this confusion can be cleared up. These people would then not be caught in what could be a horrendous mess.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, the budget is one of the major tools of government in achieving full employment, providing jobs for all those who want to work. One of the major goals of a tax system, of which income tax is one of the most important facets, is the moving of a country to a more equitable situation for all people. In both these objectives, full employment and a more equitable society, this government has failed miserably. Whether one looks at unemployment in terms of the number of people out of work or the percentage of the labour force unemployed, we have the greatest number and the highest percentage since the great depression years of the 1930s. We have one of, if not the highest, rates of unemployment in any of the industrialized countries of the western world.
In May of this year, the last period for which we have figures, there were, according to Statistics Canada, 933,000 unemployed. This amounts to an increase of more than 100,000 over the same month in 1977, and it means that 8.4 per cent of the labour force is without work. In our two largest provinces, Quebec and Ontario, more than 300,000 people were unemployed, and if one looks at the rate of unemployment in the Atlantic provinces one can only characterize it as a disastrous situation. The official figures of Statistics Canada indicate that 18.5 per cent of the labour force in Newfoundland is unemployed; 10.8 per cent in Nova Scotia, 13.6 per cent in New Brunswick. Those are the official figures, Mr. Speaker, and, as every member of parliament knows, there are several hundred thousand people who are unemployed but who
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are not being classified in this category by Statistics Canada because they are not now actively looking for work. They are not looking for work because in their areas, for example, New Brunswick, Cape Breton Island, or Quebec, there is no work to be found.
However, instead of dealing with this very serious problem which is so important to some people in this country, we will in the next year be spending a major part of our time and effort in debating the questions of a new constitution and a new House of Federation, which, I submit, will be of little real importance to most Canadians in any part of the country, including Quebec.
Instead of dealing with the problem of unemployment, and instead of an expansionary budget which would get the economy moving, as recommended by organizations as diverse as the Economic Council and the C.D. Howe Institute, we get a minor tuning of the economy through the minister's present budget, which has already proven that it is unable to achieve the 5 per cent increase in the gross national product that was predicted by the minister when it was brought down.
Instead of an income tax system which is fair and which treats income from wherever it is derived as taxable income, we get a system so full of loopholes that the other night the minister had to urge members of the House to pass the section dealing with the registered retirement savings plans on the promise he would fix the loopholes which had been brought to his attention, at some later date.
In terms of using the income tax system as a means of moving toward a more equitable society in which Canadians who live in a state of poverty would see some improvement in their situation relative to other groups in Canada, virtually nothing has been accomplished by the government in the past 25 years. Professor Gillespie of Carleton University's economic department, in a study for the C.D. Howe Institute published this year, said:
-the federal government has not improved the economic position of the poor relative to the highest-income families during the 1970s. The social legislation cf the early 1970s failed to improve the relative economic position of the poorest families. Tax reform provided modest benefits for lower-middle-income families relative to the poor and to the highest-income families, but it did not substantially alter the distribution of income.
He went on to say:
Federal budgetary policies during the 1970's have not redistributed income from the highest-income families to the poor . . . Thus it was not the poor and needy who were protected from the "ravages of inflation", during Mr. Turner's tenure as minister of finance.
I would add, Mr. Speaker, nor under the guidance of the present Minister of Finance (Mr. Chretien).
Some members of parliament, particularly Liberal members, may not believe Professor Gillespie. To those members who may have doubts about what Professor Gillespie indicated, I suggest they read a speech made by the present Minister of National Health and Welfare (Miss Begin) to a conference of YMCA's less than a month ago. I would like to quote a couple a sentences from this speech where she said that little has been done for the:

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-nearly 2 million children who live in families with incomes inadequate for their needs and for the 600,000 working families who spend two thirds or more of their incomes to provide the basic necessities of food, clothing and shelter.
To demonstrate the truth of my claim, later in her speech she went on to say:
In 1977, the poorest 20 per cent of Canadian families received less than 6 per cent of total Canadian family income while the richest 20 per cent of Canadian families received 40 per cent of all the income. These figures are, unfortunately, very stable. The share of income going to our poor families has scarcely changed since the end of the second world war.
Obviously, Mr. Speaker, the Minister of National Health and Welfare agrees with Professor Gillespie, that our tax policies and our social programs have not helped the poor improve their lot.
Just how effective have our tax policies been? Again, let us look at the speech of the Minister of National Health and Welfare, where she said:
The average taxpayer in the $5-10,000 category benefited from various special personal income tax exemptions in 1976 to the tune of about $237 per year. The average taxpayer in the over $50,000 category benefited to the tune of $5,592. And of course if you were too poor to pay taxes you would not have benefited at all. That may well be good fiscal policy and in some respects it is good social policy too-but still, it does seem odd that those who need the benefits most are least likely to get them.
I do not think it is odd, I think it is criminal.
Now, Mr. Speaker, what about all the special provisions of our tax system, the exemptions from payment of income tax on the first $1,000 of income received from investments and savings, the RRSP plan, the RRIP plan, all of which will long live to destroy the Carter commission principles? They are still with us. What we have is an income tax system which bites pretty hard on those who derive their income from salaries or wages, particularly those at the lower levels. Somehow, it lets many who derive their incomes from sources other than salaries or wages, such as from the ownership of stocks, bonds, real estate, investments in oil, natural gas, etc., get off pretty lightly.
I used an illustration several days ago from a Revenue Canada publication called "Taxation Statistics, 1977 Edition" which said that in 1975, the most recent year for which figures are available, there were 226 persons earning $50,000 to $100,000 who paid no tax; 58 persons earning $100,000 to $200,000 who paid no tax, and 21 persons earning $200,000 and over who paid no tax. I suggest to the minister that this is the kind of problem he ought to direct his attention to, the kind of problem he ought to take in hand so that Canadians will get an income tax system that treats all people fairly and tax those who have the larger incomes proportionate to their income, rather than the reverse, as it is now.
Our tax laws are either deliberately designed or so carelessly designed that we do not know what happens. We do not know who the people are with the high incomes. We do not know who the people are who do not pay taxes because they find legal ways to avoid paying. We do not know which corporations are able to avoid payment of taxes, or at least pay very low taxes. Canada is one of the few countries that does not

have provision in its tax or other laws to guarantee that such information is made available.
I would suggest to the minister that he examine the system in the United States where free enterprise is alive and well, despite the fact that for over 40 years their laws have required the public reporting of information about individual incomes and corporation profits. I suggest that the Minister of Finance and the Minister of National Revenue examine the Securities and Exchange Act in the United States, particularly the section which requires that corporations which sell shares must disclose and publicize information concerning the remuneration of directors and officers of those corporations. Those corporations whose shares are to be traded must file an application with the Securities and Exchange Commission which, according to the act, must contain such information as the rules and regulations of the commission require. This may cover information pertaining to directors, officers, underwriters; their remuneration and material contracts with the corporations; bonus and profit-sharing arrangements, and options existing or to be created in respect of their securities.
The May 15, 1978, issue of Business Week, which is read mainly by businessmen in the United States, carried an article which listed the 20 highest paid U.S. executives last year. Amongst them were Archie R. McCardell, president of International Harvester, whose income was $1,496 million; James E. Lee of Gulf Oil, $1,099 million; Henry Ford II, chairman of Ford Motor Company, $992,000. It is ironic and sad that when some people wanted to find out what the earnings of the president of CPR were, the information was only available because CPR shares were trading in the United States and it was required to make that information public in the United States. In that way we learned that the president of CPR earned in excess of $300,000 in the last year for which he reported.
We all know that Canadian corporations in this country have benefited by deferred corporation taxes to the extent of almost $10 billion, which means, in effect, that they have been given interest-free loans to $10 billion. I wonder how many Canadian citizens who want to buy a house or a car, or want to remodel their home, would like the opportunity to get an interest-free loan from the government? There is no such thing for them. We cannot afford to give interest-free loans to the ordinary citizen, but we can afford to give $10 billion worth of interest-free loans to Canadian corporations. Because of the secrecy imposed by our tax laws we do not know which corporations have benefited from these deferred taxes or how much any of them received.
In the United States the people at least know how many and which of their major corporations did not pay federal taxes despite the fact that they made substantial profits. Many of those which had some taxes only paid at a rate of 10 per cent or less. In the United States they know that in 1975 the Ford Motor Company had profits of $148 million and paid no federal tax at all; they know that Bethlehem Steel had profits
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of $225 million and paid no federal taxes, that Western Electric had profits of $185 million and paid no federal taxes, and that Lockheed Aircraft-a company about which we know something in Canada-paid no taxes despite its $84 million profit.
Our income tax system does not begin to meet any of the standards of equity in a modern society. What this country needs is a budget to help us move to full employment, rather than the extraordinarily severe unemployment we have at the present. This country needs an income tax system to move it toward more equity, a system which would begin to improve the condition of the poor and ensure that those in the upper income brackets would be required to pay their fair share of taxes. Our income tax system meets none of these goals, and it is for that reason that we simply cannot and will not vote for this bill.


Mr. Roch La Salle (Joliette):: Mr. Speaker, now that we are at the third reading stage of a bill which has been discussed lengthily and seriously, I would like to make a few comments, and indeed 1 could not do otherwise in view of the background of this proposal which already dates back two months and a half. Of course, we have talked about basic principles and I would like to say immediately that we have defended rather well, 1 believe, one basic principle concerning the refusal to involve ourselves in provincial matters.
We are very much aware that the federal government must work in close co-operation with the provinces to help them improve the economy on the regional as well as the national levels, but from the start we have shown our indignation about the way in which the proposals were made, since they were conditional proposals, and we have always believed that it is not enough to talk about consultations, but that there must also be co-operation, and I believe that consultation must start from a spirit of co-operation, that is that they must involve two, ten or eleven interested parties, which was not the case in this instance and as we have evidence that there was not enough consultation. Of course, there has been a lot of talk about this new initiative on the part of the Minister of Finance (Mr. Chretien). He boasted of having brought about discussions with his provincial counterparts for the first time, but we also know that this consultation did not last long and that the provincial ministers of finance had only one choice: to take it or leave it.
From the very beginning, there was also the position taken by the Quebec government and unanimously supported-this can not be repeated too often-by the National Assembly. Mr. Speaker, I think it is important to underline that we defended the position taken by the National Assembly which represented the entire population of Quebec, except, of course, my friend opposite who did not want to be part of those people that were being protected by the National Assembly, whether we want to admit it or not. The Minister of Finance first of all
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hastily rejected the formula suggested by Quebec for selective reductions. I shall not of course repeat all his comments that I quoted in the House in second reading, but he already said that this position was aimed at destroying federalism and dividing our country and so on.
The Quebec proposal was absolutely impossible to accept for the Minister of Finance although sometime later the province of Quebec applied its proposal in some selected industries and it was demonstrated that the allegations of the Minister of Finance were false as the federal Department of Industry, Trade and Commerce recognized that the industries that benefited from the provincial tax cut were also in other provinces than Quebec and that the incentive proposed by the Minister of Finance was not limited only to the province of Quebec. Then I think that the remarks made since the beginning by the Minister of Finance are an indication of his malevolence.
In the circumstances I think we had no other choice but to support a province that wanted not only to protect but help those sectors that needed it most, and still today there has been an announcement concerning textile, furniture, and importations, that demonstrates that those industries have been weak for a long time and that the Minister of Finance, even if he has been minister of industry, trade and commerce has made his decision much too late to be in the least helpful. But the consensus of the National Assembly on that issue has been neglected. So, I think that the Minister of Finance has been disrespectful to the province of Quebec, his own province which he represents.
So there was malevolent pig-headedness and stubbornness in solving the dispute over the remote possibility of the federal government ever reaching an agreement with the provincial government or the government of Quebec. The Minister of Finance reminded us that the letter of his provincial counterpart implied agreement on the proposal contained in this bill, that is clause 30. But that is not true, Mr. Speaker.
You have to read the letter. There is no way anyone reading the letter can even suggest that the minister of finance of Quebec agrees with the federal Minister of Finance. And if you read the letter carefully it is obvious that the government of Quebec would have preferred the second option mentioned in that letter. Then, what is unreal is that the Minister of Finance himself proposed a tax abatement, an arrangement between governments. Because the government of Quebec rejected it outright he never wanted to come back on his proposal. So I say again that this is partisan stubbornness or partisan pig-headedness. Those are about the only two reasons.
Indeed the Minister of Finance knew full well that there would have been support on our side if he had been willing to correct what we call an injustice or an interference in provincial affairs. The Minister of Finance meant to stimulate the economy and increase the purchasing power. The Quebec government's proposal met those two objectives in sectors

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which are vital to Quebec, and to the tune of 8 per cent on those selected products rather than 3 per cent.
So I must say I am most disappointed with members opposite representing Quebec. I am sorry and disappointed with their attitude vis-a-vis that proposal coming from Quebec which was supported unanimously by the National Assembly. To that you can add all the manipulation that went on during two and a half months and all kinds of accusations that we on this side were in bed with the Parti Quebecois. My friends opposite never wanted to admit that Mr. Ryan, Mr. Biron and others at the National Assembly were in perfect agreement with Quebec's proposal.
This manipulation and these allegations were not grounded but I think I have to refute them at the third reading stage because I am sorry to have to say that, when the proposal from Quebec came in, we had an opportunity to demonstrate our type of federalism was flexible. We had a golden opportunity to give evidence that it was possible to make this federal system work, but the government has allowed those who want to split this country to fatten their file with outstanding evidence of the fact that it is impossible to deal with this federal government. Consequently those who wish to separate from Canada will have an additional argument at their disposal.
This is nothing new, Mr. Speaker. This confrontation has been going on for ten years and with governments other than this one. Is it necessary to recall the conflicts and confrontations which took place with Mr. Bourassa and Mr. Johnson? Of course they serve us as a rationale that this time this Quebec government has a particular purpose for acting that way, a purpose which incidentally we have never shared on this side of this House. We are being accused of sharing the objectives of the government of Quebec on a very political issue. This is false. Yet we thought and still do that we had the responsibility of defending a basic principle, mainly that the federal government must not interfere in the preparation of provincial budgets. If the finance minister wants to urge the provinces to improve the state of our national economy or the regional economies, there is nothing to prevent him from doing so but he must do it in close co-operation and with a real involvement of the provinces in the decision-making process, not on a conditional basis. And that is the basic principle which we on this side of the House have wanted to uphold, respectful as we are for the provinces and because it is the duty of every member who believes in true federalism.
Under these circumstances, Mr. Speaker, there is no doubt that because of the obstinate attitude of my Quebec friends opposite, an attitude which I have sometimes found shameful as a Quebecker, I shall certainly not be able to vote in favour of this bill. I am not saying that there are no desirable provisions in it but that the strategy of the federal government is to propose a number of measures which are desirable together with one which is unacceptable. Yet, it wants to shove

it down our throats, something which is not new for it has already tried it. There are precedents, but we are saying no, while acknowledging that a number of the provisions in this bill are good. I suggest that because of the basic proposal, no member with a minimum of respect for the provinces would support this bill.
Before I conclude, Mr. Speaker, I should like to add that under these circumstances, I have been pleased, as an elected representative of Quebec, to defend the position taken by the Quebec government, which aimed only at preserving the vital interests of the province without jeopardizing the national economy.


J. Robert Howie: Mr. Speaker, my contribution to the debate will be very brief. I would like to speak in support of the amendment proposed by my colleague, the hon. member for Capilano (Mr. Huntington), and to say that I would like to refer clause 6 back in view of some of the excellent remarks made in this debate by my colleagues and all members of parliament on both sides of the House.
I feel the concept of the tax credit is far preferable to the concept of the special allowance. The one feature of the special allowance which disturbs me is the lumping of operational and capital expenditures together in arriving at the 50 per cent special allowance. Perhaps the detrimental aspect of this feature could be explained by a brief example. If a firm were to spend a lot of money on capital research facilities, a large building, for instance, in one year, and if in the following year it incurred expenditures of an operational nature, the shadow of the huge expenditure in one year would fall against expenditures of future years. Thus, the increases in operation and development expenditures would not meet the 50 per cent allowance provisions, so the incentive would not be present and the government's purpose would be defeated.
Provision of a general research credit in the form of a tax credit was recommended by the Canadian Manufacturers' Association in a brief submitted on February 15 of this year. It was recommended by the Science Council, by the Senate committee, by the President of Northern Telecom, and by the scientific community generally. Almost everyone favoured the 25 per cent tax credit proposal. There were variations, of course, with regard to threshold clauses and increments in years to come.
I favour the tax credit of 25 per cent because I feel it provides a much stronger incentive than the 50 per cent research allowance, while eliminating the unfair discrimination against small firms by means of differential rates. I refer to the fact that a large firm paying a 46 per cent tax rate would-applying this to a dollar-derive a 46 cent benefit. A small firm paying tax at the rate of 15 per cent only gets credit for 15 cents on the dollar. This is the discriminatory aspect to which I have referred. Under the tax credit proposal it would
June 21, 1978

not occur. I would favour a tax credit of 25 per cent in relation to capital expenditures and, separately, for current or operational expenditures bearing in mind the lumping feature I mentioned a few moments ago.
As far as current expenditures are concerned, the provision of a base level of research and development expenditure qualifying for the full 25 per cent tax credit favours small entrepreneurial firms which play the most important role in technological innovations, and whose needs for financial assistance are greatest. Most of the firms which fall into this category are Canadian-owned; they are native industries which I believe we should support to a much greater extent than at present. Larger firms with research and development expenditures in excess of the base level-and I think in terms of a million dollars being the base level-should receive the incentive, but only with respect to increased research and development effort above that of the previous year or above the threshold level, thereby preventing windfall benefits and short term profits.
Capital expenditures should be treated separately from current expenditures and receive the full 25 per cent tax credit on the grounds that new research facilities represent a prima facie expansion of the capability of a firm to perform in this area. A feature of this kind was included in the former 1RDIA program which succeeded the 1962 special allowance feature which was discarded in that year. I think it was about 1975 that the IRDIA program was discontinued. I feel that capital expenditures should not be subject to the incremental feature, in other words, that the full expenditure should be subject to benefit.
In the case of newly established or small firms, I see an anomaly. If often happens that such firms have insufficient tax liability to take advantage of the proposed incentive. I would therefore suggest we consider giving them the option of a cash grant in lieu of any unused tax credit arising from their research and development expenditures. This was recommended in the brief of the Canadian Manufacturers' Association which I mentioned earlier. In order to prevent abuse of the incentive, I think there should be safeguards to ensure that R and D qualifying for the incentive is carried out in Canada and that the results are exploited in Canada for the benefit of the Canadian economy. I believe the tax credit route would permit us to give the program a strong Canadian orientation and, to my mind, this is essential, particularly where small firms are concerned.
In a branch plant economy, the branch plant can obtain long term financial assistance from the parent, whereas a small, new Canadian firm has no such opportunity. As I say, I believe we should give serious thought to helping such firms and this is one measure which could be used, though, of course, there are others. This would at least be one small step in the right direction.


Some hon. Members:: Hear, hear!


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in joining this debate as the last spokesman for my party before the House divides on the motion put by my hon. friend from
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Capilano, and also on the main motion with respect to the third reading of the bill, I think it might be useful to summarize some of the most important aspects of what has occurred in relation, first of all, to the budget of April 10 and then, subsequently, to Bill C-56.
I shall not reiterate the very valid points made by my hon. friends with regard to clause 6 underlining our belief that the research and development proposals contained in that clause could be improved upon. It is most unfortunate that we were not given the opportunity in the committee of the whole to have a better discussion of our proposals in connection with the research and development provisions.
In the second place, clause 14 deals with the corporate family farm rollover provisions, and many of our members have serious questions to raise concerning the proposals the minister has put forward. We feel they could be improved upon, but again, unfortunately, because of closure we were not given ample opportunity to debate and discuss the question with the minister. Then again, I would remind the House that there is tremendous concern across the country among credit unions and others in connection with the minister's proposals regarding RRSPs. He is proposing a tax on lump sums a person might have in an RRSP at the time of death. We believe the effect of this could have been softer; there are other methods which are available.
These are three separate areas of concern which many members wished to advance and deal with, but unfortunately we were cut off by closure. The motion placed before us by my hon. friend from Capilano gives the House an opportunity to refer clauses 6 and 14 back to committee so they can be dealt with as they should have been in the first place.
The other matter to which I wish to refer was discussed briefly. Unfortunately, we could not discuss RRSPs fully because closure took hold, and there was no longer any time left for further debate.
The fourth thing I would like to mention is the fact that we never did get a clause in this bill which really is a reneging of the minister's earlier position with respect to the taxation of cash surrender values in life insurance policies. The minister is now saying that the interest which might have been paid on a loan, for example, with respect to cash surrender value in a life insurance policy is no longer an amount which can be credited against capital cost with respect to cash surrender value. The net result is that the taxation of cash surrender values which the minister assured us would not occur because of the new provisions in this bill, will in fact occur. If I had been given an opportunity to discuss that with the minister in the committee of the whole, I think we could have made some very valid arguments showing why the present provision is most unfortunate. If the government does not realize the consequences of that clause now, it certainly will as we go down the road if this bill is passed in its present form.
Many hon. members will recall that I also raised a point about how harsh the government has been with small busi-

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nesses. It has put a new provision in this bill which in effect will restrict the number of people small businesses can turn to if they need venture capital to shore up their equity positions. This again is very unfortunate.
Basically what I am saying is that since this minister has taken office he has failed to recognize the worth-while function this House can perform in trying to adjust whatever budgetary provisions the minister suggests. The essence of a working parliament is that the government proposes and the House generally disposes of whatever legislation the government sees fit. However, we seem to be at the point where this minister, presumably backed up by his Prime Minister (Mr. Trudeau), now takes the view that when the government proposes, that is it, we accept, and that there should be little discussion from that point on. In fact, the government seems to be completely intolerant regarding any questioning such as is usual in committee of the whole proceedings. That is not the way to make parliament work. Not only is that the attitude of the government within parliament but, unfortunately, we find that it is also spilling out in its general approach to federal-provincial relations.
The government is now taking the attitude that cooperation means briefly telling the provinces what it proposes, and expecting the provinces to agree quickly. However, in the event that one or more of the provinces say no, there is an attempt to blackmail them into a position which the federal government feels is in accordance with its wish. We cannot have more unity or happier relations between the various parts of this country if that attitude prevails in the government of the day in Ottawa. That was the fundamental question we dealt with regarding clause 30 and, unfortunately, we were not able to deal with it at clause 59 of this bill because, of course, we did not reach clause 59.
The fundamental question is whether the government was fair in introducing a provision on April 10 affecting provincial sales taxes in nine of our provinces knowing, as the government did, that there was no agreement forthcoming from one of the nine provinces which would be affected. In this connection the minister has claimed that somehow he thought he was close to an agreement, that he thought there was some kind of understanding with the minister of finance of Quebec, and that that minister flip-flopped and changed his mind. I challenge that.
1 do not think that the minister of finance of Quebec at any time gave the federal Minister of Finance (Mr. Chretien) an assurance which would be sufficient for him to go ahead and bring in the budget in the form it was brought in on April 10. In support of that I refer hon. members to an article written by W. A. Wilson, a well known columnist in the Montreal area. The article is entitled "Endless Chretien-Parizeau Dispute, A High Tax On Canadian Patience". In the body of the article Mr. Wilson states the following:
There is no doubt that Mr. Chretien's budget has produced an unholy political mess, with Quebec's federalist parties lined up with the Pequistes against him. The underlying politics with which the issue was approached in the first place remain mystifying.

One of Mr. Chretien's aides asked to see this correspondent a short time ago and subsequently argued that a couple of articles I had written were too harsh and somewhat unfair. But, placing no restrictions whatever on the use I could make of the information, he told me of two aspects of the affair which I had not known and which seem to me to be significant.
Mr. Wilson then set out the two aspects of the affair which a personal aide to the Minister of Finance related to him. This is what Mr. Wilson relates:
-About a week before the Chretien budget was delivered, Mr. Parizeau told the federal minister by telephone that he was having difficulty with the proposal with his Quebec cabinet colleagues and did not know whether he could go along with it;
According to the minister's aide, Mr. Parizeau was telling the Minister of Finance that he was having difficulty with cabinet ministers in Quebec regarding the federal minister's proposal.
-Subsequently more than one provincial treasurer got in touch with Mr. Chretien to alert him to the fact that Mr. Parizeau had approached them seeking to persuade other provinces to reject the federal sales tax proposal.
That was the second aspect. Mr. Wilson then went on to state the following:
It seems to me from this that the federal cabinet knew very well, before the Chretien budget was presented, that serious trouble with Quebec lay ahead. Nonetheless, they proceeded and the row blew up to major proportions. It can be presented as a federalist-separatist fight, as Mr. Trudeau has done, but it is clear that if every party in the Ontario legislature were to combine in opposition to a major federal finance proposal the matter would be seen everywhere as serious.
Nor can the dispute be doing the country any good economically. There is very widespread agreement that part of our difficulty these days is the weakness of confidence at almost every level-industrial, commercial and consumer. The economy has been for at least the last three quarters in a recovery phase but it is a slow, uncertain recovery, which the budget was intended to stimulate.
I have read that into the record because I know that often in the heat of partisan debate in this House hon. members feel that when allegations are made they are made without the proper substantiation one would normally expect. However, in this case there can be no doubt. The fact is that the government went ahead with the proposal contained in clause 30, knowing that there would likely be opposition in the province of Quebec. That was just foolhardy. It was foolhardy when there was talk of separation and when national unity was of concern to many people. To go ahead and persist in pushing this type of thing, knowing that there was hostility not just from the government in Quebec but also from every party in the national assembly in the province of Quebec, was just foolhardy and irresponsible.
Let there be no doubt that we on this side of the House are as opposed to separatism as anybody else in this House. We hope that separation will never come about, but the government in Quebec is the government of the day in that province, and the federal government should not be exciting confrontation. It should not be giving the Quebec government an issue which allows it the opprotunity to take a provincial versus federal stand, such as the one it has been able to take.
Let me go further to show how foolhardy the government has been in its approach. Having been turned down, as it knew it would be turned down, by Mr. Parizeau, it then hit upon a
June 21, 1978

new scheme. Its new scheme was to give, in view of the sales tax reduction such as it gave the other eight provinces, a special $85 cheque to every individual resident in the province of Quebec as of December 31, 1977. Is that not beautiful! Just think how clever this is politically! We can just see how the Jim Coutt's and the Keith Davey's worked that out. They knew how it would project politically in Quebec, that it would be the coup of the century if $85 cheques were sent to every resident of Quebec as of December 31, 1977. The government is not giving that to the other eight provinces. There is a deductibility based approximately on the residents in those provinces during the current year, 1978. This is cute, because who can really say no to an $85 cheque? Presumably Keith Davey would say that all kinds of warm feelings will flow from those individuals to the federal government, their great benefactor.
Of course, the government then put the provincial government in the awkward position of having to tax back the $85. Of course, this is not politically what most people would like to do. So from the great strategy standpoint-and if it is not Keith Davey, then presumably it is some adviser to the Minister of Finance who worked out this scheme-you can see how cute it all was. But, frankly, what the government did not anticipate was that there are many people in Quebec who put their honour first and said that they will not accept that kind of bribe, they do not feel that it is right for the federal government to walk around the constitutional reality in order somehow or other to embarrass the provincial jurisdiction. That is where the fight began.
Unfortunately, the minister did not back down. I understand that he did not back down because he took great heart from the Gallup poll which, to his great surprise, did not show a drop for the Liberals but showed the Liberals going up marginally, so he felt it was an endorsement of his approach in Quebec, and he put his gloves back on and said, "Fine, full speed ahead". In fact, he even now shows me the results of that Gallup poll which are on his desk.


Mr. Paproski:: The Shawinigan kid!


Sinclair McKnight Stevens: What a way to run the economy of the country, to keep one eye on the current Gallup poll and the other eye on how you can win personal favour with individuals in Quebec by giving them $85 cheques as hand-outs.
I should like to read into the record something which the minister said earlier during the main debate on this bill. It appears on page 6366 of Hansard, and this is what he said:
There is, of course, another element, though people forget about it. Because we are dealing directly with Quebec taxpayers and not collecting the taxes for Quebec, there are some 200,000 Quebeckers who will not receive a rebate if I take the list of 1978, for the reason that since we have deducted for them $100 so far this year, in January or February or later, they will not qualify at all. It is only those who pay between $100 and $185 in taxes who will qualify. So we would have eliminated 200,000 Quebec citizens from being entitled to that credit.
Let us just analyse what the minister is saying. I do not know whether he realizes how blatant that statement is. He is saying in effect that the reason he wanted to use the 1977
Income Tax Act
figures for his tax rebates in the form of the $85 cheque is that if he used the 1978 figures there would be 200,000 people in Quebec who would not get his $85 cheques because they would not have anything coming to them because they had already received the $100 in January and February. So unless they had something coming to them greater than $100, there would be nothing to give them back.
The minister is saying that those 200,000 Quebeckers can only be given their cheques if he uses the figures for the previous year. What that really means is that the minister has victimized every other person in Canada who also received the $100 deduction but now will not be able to claim his $85 deduction because it is already used up.


An hon. Member:: Cosy deal!


Sinclair McKnight Stevens: Just think of the ramifications of this. In their eagerness to give the $85 individual payoff in Quebec, they said that they had to shift the base back to 1977 because they have already given those people a $100 deduction in 1978, which was received in January and February, so unless they shift back there will be 200,000 people who will not get any benefit. But when they deal with the other eight provinces, they ignore totally the fact that the same argument can be made for them. The residents of those other provinces received their $100 deductibility in January and February, and presumably there are approximately four times as many Canadians in those provinces who will literally not get the $85 or $100 deduction to credit against their provincial tax position. The net result is a very interesting transfer of income. There is roughly $186 million which will be going in the aggregate to Quebec residents, presumably to filter somehow back to the provincial government. The corresponding amount will not be going to residents of the other provinces of Canada because of the gimmick pulled by the Minister of Finance as he described it in the part of Hansard which I just read.
Secondly, one of the reasons given by the minister for wanting to get this money flushed through Quebec early-he did not mention the upcoming election, presumably he never even thought about it-was that you cannot inject a stimulant into Quebec unless this is done first. But where is the stimulant being injected into the other provinces? It is occurring only because the other provinces have reduced their provincial sales taxes. In Quebec the provincial sales tax is also reduced.


Some hon. Members:: No.


Sinclair McKnight Stevens: Some hon. members opposite say no. In fact, it has been reduced on five separate items.


Some hon. Members:: On four.


Sinclair McKnight Stevens: All right, on four items. If hon. members want to call it only four items, that is fine. The fact is that, to the extent of $186 million, the provincial government has already reduced the provincial sales tax in Quebec, so the stimulant there is in place. What the minister is actually doing is applying a double stimulant in Quebec. He knows that the $186 million is already having its effect in Quebec. The only

June 21, 1978
Income Tax Act
question now is how it will be paid for. Will it be paid for by the Quebec provincial government raising taxes? Will they put it on the cuff by raising more debt, or will they get a handout from Ottawa? That is the only question.
For the minister to say that giving the $85 cheques to Quebec residents is for the purpose of injecting a stimulant into the economy is not in accordance with the facts. The fact is that the stimulant is there, and what he wants to do is to give a double stimulant, not just for its economic effect but for the political effect. There is no way in which this government is more crafty than when it works out schemes to get more votes into the ballot box, and that is what we have before us in clause 30 of Bill C-56.
We have indicated that we would like to have an early division on my colleague's amendment which, if passed, will result in some clauses being referred back to committee of the whole. So, with a view to having an early division, I will now conclude my remarks, being the final speaker for the official opposition.


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


Some hon. Members:: Question.


The Acting Speaker (Mr. Turner):: The question is on the amendment to the main motion. All those in favour will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


The Acting Speaker (Mr. Turner):: Call in the members.


Mr. Speaker:: I therefore declare the amendment lost.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I rise on a point of order. Earlier in the day I made an announcement in the name of the Leader of the Opposition (Mr. Clark) with respect to what the business of the House would be tomorrow, being an allotted day, involving the principle of freedom of information. I said at that time I hoped that the government would accept the terms of that motion. For our part we did not intend it to be a matter of non-confidence; we know how little confidence the people of Canada have in this government-


Some hon. Members:: Oh, oh!


Walter David Baker: -I meant that in the parliamentary sense, and I advanced the theory that that be so. The reply of my friend, the government House leader, in part was "it appeared that there would be no objection on our side to the acceptance of such a principle, but as the hon. member knows, under the Standing Orders the very motion which is put is described as a motion of non-confidence, and if hon. members are agreeable to waiving the effect of the standing order, then we would consider whether we could vote on the matter."
I have two things to say with respect to that. First, upon a reading of subsection (9) of Standing Order 58 I do not see the word "confidence" appearing there, but there may be a parliamentary precedent to the contrary. The hon. member for Peace River (Mr. Baldwin), who was the House leader before me, indicates that there was a change made to that standing order which may very well have made some changes with respect to it. However that may be, that is a nice parliamentary argument.
We feel very strongly that this House, having supported the principle of freedom of information in a motion on February 12, 1976, ought not to be fettered in any procedural way with moving in that direction today or tomorrow during the course of the allotted day. On behalf of the official opposition I am saying that regardless of what the determination is of that subsection of Standing Order 58, we are prepared to waive the provisions of that standing order if the matter should be a matter of non-confidence in the mind of the Chair, or in the mind of the government, so that members on all sides of the House can express their own personal feelings with respect to the whole question of freedom of information in the terms of that motion.
If the government House leader would want to prepare an appropriate amendment to the standing order for the purposes of the allotted day on June 22, 1978, he will find us most

June 21, 1978
Business of the House
accommodating, because we think that principle should be underscored and underlined in the Parliament of Canada.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Mr. Speaker, I would remind the hon. member for Grenville-Carleton (Mr. Baker) that he was reading from the provisional standing order which expired in October, 1977.


Walter David Baker: That could be; that is why I put the alternative.


Allan Joseph MacEachen: However, I stand by what I said earlier, that we would consider whether we could support this motion if we can overcome the procedural difficulties.
I should advise the hon. member that when he read the motion I agreed with it as I heard it. I did not hear the final phrase "subject to review process with ultimate appeal to the courts." I think that is a very important principle which will be part of our consideration in fulfilment of the commitment which I made earlier today.


Mr. Baldwin:: Mr. Speaker, I am sure that if the House leader recognized that I would be able to vote for a motion allowing for a final appeal to the judges, the government should be able to follow along.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The matter having been referred to earlier today, and raised again now for this brief discussion, does relate to the manner in which the House can conduct business tomorrow, and is therefore a proper point of order to be taken up at this time. In any case it remains open for further consideration and discussion. Perhaps resolution of some sort can be made by the time the debate begins as an order of the day tomorrow.


Some hon. Members:: Six o'clock.


Mr. Speaker:: Shall I call it six o'clock?


Some hon. Members:: Agreed.


Mr. Speaker:: It being six o'clock p.m. this House stands adjourned until tomorrow at 2 o'clock p.m.
At 5.28 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, June 22, 1978