1978-06-01

ROUTINE PROCEEDINGS


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, under the provisions of Standing Order 43, I rise on a matter of serious and pressing necessity. In light of the fact that as of May 31, 26 ships are at the port of Vancouver, of which 19 are waiting while only seven are loading because of insufficient supplies of grain due to the shortage of railway hopper and boxcars, and as of April 1 some 23,000 Canadian boxcars are in the United States being utilized for the movement of goods by the United States railways, which represents some 13,000 more boxcars than is the normal and, further, since the railways have reduced their grain-carrying fleet to 13,300 boxcars, with projections to reduce this amount to 6,300 by 1981, 1 move, seconded by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn), that:
This House instruct the Minister of Transport to take immediate action to resolve this very serious economic emergency which has resulted in the loss of our reputation as a reliable grain supplier, plus a further deterioration in our balance of trade position, and also to take immediate steps to alleviate the producer of the mounting demurrage costs due to our inadequate grain handling and transportation system.


Mr. Speaker:: The introduction of such a motion for debate at this time would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CONFLICT OF INTEREST
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43. It has been announced that Donald S. Macdonald has been elected to the board of directors of McDonnell-Douglas Corporation. Considering that this corporation is one of the front-runners for
the $2.3 billion fighter aircraft contract with the federal government, and considering that Mr. Macdonald's former position as minister of finance and minister of national defence puts him in a position of special advantage to the company and is contrary to the public interest, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House request the Prime Minister to urge Mr. Macdonald to resign forthwith from his position as a member of the board of directors of the McDonnell-Douglas Corporation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, pursuant to Standing Order 43, I ask for the unanimous consent of the House to present a motion on an urgent and important matter.
Considering that prices go up much faster than salaries and that low income people are therefore affected by a decrease in their purchasing power, and given the obvious dissatisfaction of House of Commons employees following the review of their salary scale which was announced on May 31 last, as a partial solution to their problem I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the House urge the Minister of Finance (Mr. Chretien) to introduce legislation which would apply a discounting system on retail prices on all Canadian-made products to bring back consumer prices to the level of the current purchasing power of consumers.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
80045-9%

June 1, 1978
[English]	HOUSE OF COMMONS


PIPELINES
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, I rise under the provisions of Standing Order 43 to propose a motion of urgent and pressing necessity. Having regard to the tabling of preliminary documents outlining the government's position with respect to environmental and socioeconomic guidelines in connection with the proposed Alaska Highway pipeline, and in light of the many inconsistencies, omissions and contradictions contained in the discussion paper and, further, regarding the fact that there has never been a study of the impact in socioeconomic or environmental terms in most areas touched by the pipeline, I move, seconded by the hon. member for Vancouver South (Mr. Fraser):
That the committee of the House known as the special pipeline committee be reactivated immediately with a mandate to conduct hearings and call witnesses for the purpose of establishing clear guidelines and regulations designed to safeguard the legitimate interests of all affected.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POST OFFICE
Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion on a matter of urgent and pressing necessity, namely, the inability of the Post Office to deliver the mail. I refer specifically to the situation in the Toronto post office, where the backlog of mail and parcels is so great that the post office is storing large quantities of mail and packages in an armoury instead of processing and delivering them. I move, seconded by the hon. member for Norfolk-Haldimand (Mr. Knowles):
That this House direct the Postmaster General to acquire the necessary personnel and initiate action immediately to clear the backlog of mail in the Toronto post office and ensure a reasonable level of mail delivery in that area in the future.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


COLLECTIVE BARGAINING FOR EMPLOYEES-MOTION UNDER S.O. 43
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, as a matter of urgency, seconded by the hon. member for Sault Ste. Marie (Mr. Symes), I move:
That this House recommends the immediate introduction of legislation to provide for collective bargaining for employees of the House of Commons, the Library of Parliament and the Senate, as recommended by a special joint committee on the public service as long ago as February 3, 1967, it being the view of this House that this parliament having granted the right of collective bargaining to public servants and to employees in the private sector who come under federal labour jurisdiction, we should, by comparable legislation, grant this same right to our own employees.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


URBAN AFFAIRS
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that the Minister of State for Urban Affairs (Mr. Ouellet) has confirmed in a letter to me dated May 26, 1978, that the planned sewage treatment plant for the Outaouais region will not control phosphate or viral pollution of the effluent, I move, seconded by the hon. member for Simcoe North (Mr. Rynard):
That this serious matter be referred to the appropriate standing committee for further study so that experts can be heard and recommendations made.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the importance to the province of Newfoundland of the findings of the royal commission inquiring into CN operations in that province and its impact on the future of transportation in
June 1, 1978

Newfoundland, I move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That the report of the royal commission on CN operations in Newfoundland, now in the hands of the Minister of Transport, be tabled in this House forthwith.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PRESENCE IN GALLERY OF LEADER OF OPPOSITION IN GRENADA
Mr. Speaker:: Order, please. Before beginning the question period, I know that members would want to joint with me in welcoming a visitor from a fellow country in the Commonwealth, the beautiful island of Grenada. The Leader of the Opposition of that country Dr. Maurice Bishop, is here, being received by members of the Commonwealth Parliamentary Association at a luncheon event today, and is now in our gallery.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is directed to the Prime Minister. As the Prime Minister will know, Canada's capital budget for our defence program will increase during the current fiscal year by $100 million, or 2.8 per cent in real terms. All of that increase, as the Prime Minister also knows, is going to replace equipment in the Canadian armed forces and is not at all the result of any increased commitment to NATO.
Can the Prime Minister tell the House of Commons whether supplementary estimates will be brought down for increased expenditures by the Department of National Defence as a result of any commitments made by Canada at the NATO summit conference?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the Leader of the Opposition is, of course, not correct in implying or even in stating that money spent by the government in national defence is not for NATO purposes. On the contrary, a great deal of the commitments made to NATO will
Oral Questions
be commitments which will be followed up through this expenditure and through this federal budget of, presently, some $4.1 billion, to be increased as the Leader of the Opposition says. There is no plan for supplementary budgets.
I would explain to the Leader of the Opposition that the commitments we have taken are the same as those of the other 14 NATO countries-13, I think, because in this particular case France has not subscribed to the commitment-and it is to adhere to the conclusions of the long-term defence planning program put forth by NATO which had been discussed by our Minister of National Defence with other ministers about ten days ago. Every leader, including myself, indicated their acceptance of these conclusions. It does not call for new expenditures beyond the ones to which the hon. Leader of the Opposition just referred. I would point out to him that these are very substantial new commitments and they are going to proceed at an increased rate of something around 3 per cent in real terms for the next several years.


Charles Joseph Clark: Mr. Speaker, so that I clearly understand that answer and the country understands it, the Prime Minister is saying that Canada entered into no new commitments to NATO at the meeting just concluded.
My supplementary question will deal with another aspect of the Prime Minister's recent activities outside of the House of Commons. It deals with the discussion of Soviet-Cuban involvement in Africa. The conference is to take place next Monday in Paris. Would the Prime Minister tell the House of Commons whether Canada was invited to attend that conference and to participate, as a natural extension of Canada's role in the UN Security Council and, if we were invited, why did we decline to attend?


Pierre Elliott Trudeau: Mr. Speaker, once again the preamble to the question gives an incorrect impression. There are increased expenditures; indeed, 12 per cent in real terms to capital expenditures in the armed forces and about 3 per cent over-all. Many of these new expenditures will be for NATO purposes. On the question, Mr. Speaker, the answer is that we have not been invited.


Charles Joseph Clark: Mr. Speaker, I wonder if the Prime Minister could tell us whether the Government of Canada sought or intends to seek the opportunity, as an extension of its Security Council responsibilities, to participate in that meeting in Paris.
Perhaps while he is answering that question the Prime Minister could also indicate to us whether it is his intention, as the leader of the government who went to the United Nations and Washington and made statements that were not discussed previously in the House of Commons, to come before the House of Commons, as is the normal practice, and to make a report in a statement on motions to the House indicating exactly what new undertakings were made by himself on behalf of Canada, and to allow some discussion of that matter in this House.

June 1, 1978
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, there are two or three unrelated questions in that particular question. I will try and remember them. Dealing with the last one, on the NATO side I have just given an answer to the Leader of the Opposition and I do not know what further statement he needs beyond that.
In so far as the position I took in New York on disarmament is concerned, I would point out to the Leader of the Opposition that it is contained in the white paper on defence policy that we made public in 1971. The Leader of the Opposition's predecessor would perhaps be able to hand him his copy, and he could see what was stated in it.
In so far as the Paris conference is concerned we have not been invited and we have not sought to be invited. As far as I am concerned, there is no need to be invited. We are involved in Africa in very constructive ways. The Secretary of State for External Affairs answered questions in this House the other week about our role in Namibia. The House knows that the preference of this government is to be involved in peaceful pursuits in Africa and in establishing political and social conditions on that continent which will create better conditions and prevent destabilization, rather than to come in after and try to correct the situation once it has been destabilized.


Charles Joseph Clark: Again in the interests of clarification, is it the intention of the Prime Minister and the Government of Canada to break the practice of previous governments and, indeed, to break the practice of the previous secretary of state for external affairs, and to exclude parliament from the opportunity to discuss these undertakings or policies that Canada adopts internationally; or, instead, will the Prime Minister follow the practice and his responsibilities and report to the House of Commons, in a statement on motions, the decisions to which he has been party during the last few days in the United States?


Pierre Elliott Trudeau: Mr. Speaker, as the Secretary of State for External Affairs answered last week in the House, he has appeared before standing committees of this House and answered all questions and discussed all issues put to him. The opposition apparently was not interested in asking questions on the particular subject that the Leader of the Opposition discovered over the weekend. As far as I am concerned, I am happy to answer each and every question put to me by the opposition. I see no need for a statement, Mr. Speaker. I doubt whether the Leader of the Opposition really sees a need for a statement: he would then have to hand the floor over to one of his members to learn what his policy is on defence.


EXTERNAL AFFAIRS
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. I think it should be made clear right away that at the
[Mr. Clark.)
last external affairs committee meeting neither the minister nor his undersecretary came to answer questions.


Some hon. Members:: Hear, hear!


Douglas Roche: Returning to the question of Canada's noninvolvement in the Paris Conference for African Security, I ask the minister why it is that Canada is involved in presenting the western proposal for Namibian independence, Canada is involved in trade sanctions against South Africa, and yet we are not involved and the Prime Minister is casting disdain on the security conference, which is brought about by the presence of 40,000 Cuban troops which is severely threatening security in Africa. I wish to know what standard the government applies to the security conference and is it, in fact, a double standard that we have in Africa?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, since there has been some comment, perhaps I can be permitted to say that I will go back to the committee at any time. The hon. member knows that. If he would like to set it up for any time in the next month, or as long as we will be here, I will be glad to do it.


An hon. Member:: Next week?


Donald Campbell Jamieson: Next week is fine with me. I think it is important, in answering the hon. member, to make the point at the beginning that the question with regard to the conference on Zaire, if that is an appropriate name for it, and Canada's involvement in it stems from an error which was made in Paris and since has been corrected. The question stemmed from a totally false comment made by the Quai d'Orsay which they have conceded since was in error, saying in fact that we had been invited. We were never asked to involve ourselves in the first place.
It has also been described as a security conference by the hon. member. It is a quite informal grouping of Belgium, France, I believe, the United States and perhaps the United Kingdom, on the basis of asking what can be done with regard to their nationals in Zaire, and also with regard to the very specific investments which they have in that country. It is very informal. It is not being held under the auspices of any international organization. If it were held under the United Nations, then perhaps we might have been involved as members of the Security Council. It is exploratory.
Following the meetings which are to be held in Europe next week, it is conceivable that a more formal conference will be held. However, at the moment it is just a matter of these countries getting together to discuss their particular interests. As the Prime Minister has said, there is no real reason at this moment why we should seek to be involved. Indeed, it would be rather difficult to see what kind of contribution we could make in that particular situation at the moment.


Douglas Roche: Mr. Speaker, once again the government and this minister in particular have sidestepped the question of Cuban involvement in Africa which is such a serious threat to security in that country. If Canada will not take an interest in
June 1, 1978

a security conference for Africa, and if Canada will not raise its voice at the Security Council of the United Nations, where we are still a member, what steps will Canada take to get Cuba out of Africa?


Charles Joseph Clark: Tell us about the EDC.


Donald Campbell Jamieson: Mr. Speaker, in the first place, if we are going to have this kind of discussion, I am delighted to participate. But I ask the hon. member to get the facts of the matter straight. None of the members in the NATO discussions or at the United Nations has made any direct suggestion or claim that there are, indeed, Cubans involved in the Zaire situation.


Some hon. Members:: Oh, oh!


Donald Campbell Jamieson: Let me add in that connection that Canada made comments both in the NATO context and previously, indicating that we clearly and unmistakably deplore the involvement of both the Soviet Union and Cuba anywhere in Africa. That is on the record of this House as well as elsewhere.
The hon. member asks what we can do to get Cuba or any other foreign involvement out of Africa. With regard to Cuban involvement or any other country seeking the same kinds of incursions into Africa, we will, of course, support any initiatives which are taken within the Security Council or within the General Assembly. I come back to the point that to this moment, in any event, neither the United States nor any other country has put forward any proposals which could be considered in that forum. However, we will be quite prepared to do so and to support vigorously and without qualification a demand that Cuba get out of Africa now, without any further delay.


Some hon. Members:: Hear, hear!


Mr. Alexander:: Why don't you be a leader and take the initiative?


Mr. Paproski:: Send them a couple of DC-8s.


Douglas Roche: We will continue this next week.


Mr. Speaker:: Order, please. The hon. member for Oshawa-Whitby.


CONFLICT OF INTEREST
John Edward Broadbent: Mr. Speaker, I have a question for the Prime Minister on a very different subject. Considering that Donald Macdonald, former minister of finance and a former minister of national defence, has been
Oral Questions
elected to the board of directors of the McDonnell-Douglas Corporation, which corporation is one of the front-runners for the $2.3 billion fighter aircraft contract with the federal government, would the Prime Minister not agree that this action violates the principle of his own guidelines which were tabled in the House in December of 1976 and which state, in part, that a former government official should not take a position in the private sector in which he would be giving advice for commercial purposes on programs or policies of his former department?


Pierre Elliott Trudeau: Mr. Speaker, the position of Mr. Macdonald, the former minister of finance in this government, is one which he has taken after studying the guidelines and making sure that he did adhere to them. We all know that Mr. Macdonald is an honest and scrupulous person. He did give some consideration to his position as a former minister, and I can state that the guidelines which, as the hon. member says, were tabled in this House in December of 1976, along with a letter which I wrote to ministers explaining what their duty was, have not been contravened in any way, despite what the Leader of the New Democratic Party says.
The guidelines explain a position which has to be adhered to by former officials and ministers who have privileged knowledge, during a period of one year and during a period of two years, in relation to former portfolios. I know of no contact between the McDonnell-Douglas Corporation and the Department of Finance. If the hon. member has any information to the contrary, I wish he would make it public.


John Edward Broadbent: Mr. Speaker, I took care in my question to say that in my understanding of the guidelines, what was involved in this particular case was a violation of the principle or spirit, and I want to make it clear that I am not questioning Mr. Macdonald's personal integrity. The Prime Minister knows, and we all know, that a conflict of interest position has nothing to do with the individual integrity of a person.
The former minister of finance has himself publicly admitted that as a member of the cabinet he was involved in the discussion of the question of the purchase of fighter aircraft- which can only pertain, I think, to a future major purchase- on matters "dealing with guidance to bidders". Since Mr. Macdonald has acknowledged that as minister of finance he was involved in such negotiations, and since the corporation has submitted a bid, now that he is a member of the board of directors, surely the Prime Minister would admit that he is in a preferred position to help the corporation get a contract with the federal government.


Pierre Elliott Trudeau: Mr. Speaker, the answer is no, he is not in a preferred position, nor will his corporation be in a preferred position. I know the leader of the NDP understands the importance of what he calls the principles or the spirit of the guidelines. They were enunciated in order to give some guidance to members of any government after they had left the

June 1, 1978
Oral Questions
government, much in the same way they were given for the guidance of civil servants, particularly those in higher positions, after they had left government service.
We felt, I think, it would have the support of the House generally, and certainly of public opinion, that we should not attempt to penalize or prevent the men and women who had served their country in either the civil service or in government from ever again working at their trade, and we set a period of one and two years which was meant to create a distance between them and their former employment. We were very specific about the ethics of changing sides and advocating one case after you had defended the contrary case in the government's interest. We were specific in the guidelines in spelling out a certain number of rules which should not be broken.
My examination of the guidelines, without the benefit of talking to Mr. Macdonald since the news came out, has shown that he has not broken the letter or the spirit of the guidelines unless, of course, the spirit is meant to imply that no person who serves in government, either as a political person or as a civil servant, should thereafter be able to work in private enterprise; and this is not the spirit of the guidelines as we see it. The hon. member has in his own party a House leader who, after having left-


Mr. Speaker:: Order, please.


John Edward Broadbent: As the Prime Minister will recall, the guidelines were not debated in the House but were issued by fiat of the Prime Minister himself. One of the guidelines would have pertained very directly to Mr. Macdonald if he had been a former official as opposed to being a former minister of the Crown. One of them says that for one year former officials are not to give counsel for commercial purposes on programs or policies of the government department with which they were employed during the preceding year.
If this guideline is relevant for a former official for a period of a year, why is not the same guideline strictly relevant, in principle, to a former minister of the Crown whose position of authority or power is much greater than that of an official? If it is relevant, then surely it applies in principle to the case of Mr. Macdonald.


Pierre Elliott Trudeau: The principle applies to a former department. If Mr. Macdonald had accepted a directorship in a corporation or business which had dealings with the minister of finance or the Department of Finance, then the leader of the NDP would be right. But he has not. If he had accepted the directorship of a bank-obviously, the Department of Finance and banking are closely connected-again the leader of the NDP would be correct. But there is no direct relationship between the Department of Finance and the McDonnell-Douglas Corporation which builds airplanes. It seems to me the guidelines are applicable in a fair way, and the leader of the NDP should understand it.


EXTERNAL AFFAIRS
[Stage Direction]
INQUIRY WHETHER QUESTION OF DfiTENTE RAISED WITH NATO COUNTRIES
Mr. Lionel Beaudoin (Richmond):: Mr. Speaker, I should like to put my question to the right hon. Prime Minister. Further to a reply the Prime Minister just gave the Leader of the Opposition to the effect that the Canadian government has accepted to spend for NATO, or under the treaty of the NATO countries, from 12 to 30 per cent all told, can he tell us whether detente was discussed with the representatives of the members of NATO, seeing detente is so dear to the Soviet bloc? In addition, were ways and means discussed of coming to an agreement over the long term with regard to the arms race?


Pierre Elliott Trudeau: Yes, Mr. Speaker, we discussed those matters very much indeed and I thank the hon. member for his interest. I shall see to it that he gets a copy of the news release published yesterday; it should reach him probably later today or tomorrow. He will see that the matter of detente was discussed at length and that the subject proved to be of great interest to all the participants, including myself, with a view to contributing to the progress of the discussions on disarmament as a contributing factor to detente, as well as at the Vienna negotiations on the limitation of conventional armament and the discussions under SALT with regard to the limitation of nuclear weapons. So, we were very much concerned about the matter and we share the concern of the hon. member. We are striving toward a balance of power not only in the increase of expenditures but also in helping to reduce them equitably on both sides.


REASON CANADA DOES NOT BENEFIT FROM FUNDS FOR EXTERNAL DEFENCE
Léonel Beaudoin: Mr. Speaker, in view of the fact that Canada has committed itself to raise its NATO expenditures by 12 to 30 per cent and that, from what I understand, every time we have raised our expenditures in NATO countries, because we have invested in other countries, for example in Lahr, Germany, and elsewhere, we have not benefited from our expenditures in this security program like other countries do, could the Prime Minister tell us whether he discussed this matter with his counterparts, with the people responsible for this question which in my view is a fundamental matter. If we use taxpayers' money to guarantee our security or to defend ourselves eventually, how come none of this money comes back to this country?


Pierre Elliott Trudeau: Yes, Mr. Speaker, we have also discussed this matter, and Canada and other countries share the hon. member's concern, namely that much of the money they spend for their defence is spent in other countries, including the United States, England, France
June 1, 1978

and Germany, rather than in their own country. We have established a committee of officials and eventually of ministers to try to find means to make this sharing more equitable. As the hon. member knows, we already have a defence-sharing agreement with the United States, but this concern is shared by all NATO countries.


ESTABLISHMENT OF LIAISON GROUP BETWEEN NATO AND WARSAW PACT BLOCS
Léonel Beaudoin: Mr. Speaker, here is my last question to the right hon. Prime Minister. Could he tell us whether he had time to set some bases in their discussions about further disarmament especially to achieve the detente sought by the Soviet bloc?
Could the Prime Minister tell us whether they reached an agreement to set up a liaison group which could commute between the two blocs, i.e. namely NATO and the Warsaw pact blocs?


Pierre Elliott Trudeau: Mr. Speaker, for the moment there is no question of commuting, as the hon. member put it, but of course the Vienna meeting includes representatives from the two blocs. What 1 have suggested at the NATO meeting, as it had also been suggested indeed by other heads of state, is that at some time we should see to it that the Vienna negotiations be conducted at the ministerial level rather than at the official level and then hopefully there could be a positive breakthrough, and we are ready to take that decision if necessary.
* *
*


FINANCE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. As the dollar shows renewed instability now and it is hovering again in the 89-cent range, would the minister indicate to the House and to the Canadian people why it appears to be dropping once again, notwithstanding the fact that he has arranged $7 billion in loans and credit, presumably to try to shore-up the dollar?


Hon. Jean Chretien (Minister of Finance):: I think probably one of the reasons is that the hon. member is back in town.


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


Sinclair McKnight Stevens: Mr. Speaker, the Minister of Finance has indicated that the dollar might go up or down. In the event the dollar continues to go down, would the minister indicate whether he is content to see it fall even further as long as this is done in an orderly way?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not reply to that kind of hypothetical question because it leads to speculation, and that is also a factor that influences the dollar. For example, when the minister of finance for Quebec said he was going to have his own currency, that stopped the upward movement of the dollar. That is the kind of intervention made off the cuff that influences the dollar, and that is why I said earlier-in a half joking way, although with some seriousness-that the Canadian dollar does not gain anything when members of the opposition, like the hon. member for York-Simcoe, try to speculate in respect of the value of the dollar by asking that kind of question.


Sinclair McKnight Stevens: Mr. Speaker, my final supplementary question is again to the Minister of Finance. Surely he does not expect members of this opposition to stop asking appropriate questions, even though they are embarrassing to the government.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: My question centres, really, on the basic reason our dollar has deteriorated in value, and that is the chronic current account balance position of this nation, which is running at a deficit double that of the United States in relation to our gross national product. Will the minister indicate whether any steps of a concrete nature are being taken to narrow this deficit so there will not be this continuing pressure on the dollar?


Joseph Jacques Jean Chrétien: Mr. Speaker, the best way to correct that situation lies in the performance of the economy since the beginning of this year. As for the balance of payments in respect of trade, the performance of Canada has been very good for the first four months of this year. Last year we had a trade surplus of $3 billion and if the present trend goes on the surplus could reach $5 billion this year. That is the best way to correct our balance of payments problem.


CONSUMER AFFAIRS
[Stage Direction]

Joseph Jacques Jean Chrétien: Mr. Speaker, of course, the dollar is a floating dollar, as I have said a few times in this House: that means it can go up and it can go down. This morning it has recuperated somewhat, and at 1.45 p.m. it was at 89.43 cents.


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. Will the minister advise whether there is an investigation under way by the director of combines investigations into the organized rebate program between some large food retailers and certain producers?
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June 1, 1978
Oral Questions


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: No, Mr. Speaker, there is no formal investigation, although we are keeping a close watch on the investigation being carried out by the Ontario legislature. Let me say that the opinion of the director of investigations is that such rebates to a retailer would be legal as long as they were offered to all retailers who purchase in the same amounts. In other words, if they were not discriminatory they would be legal, but at this point it is difficult to say whether that is presently the case because all the evidence is not in.


William James Kempling: Mr. Speaker, would the minister indicate whether his director of combines investigations has indicated the impact these rebates may have in lowering farm profits and increasing prices to consumers, or does he believe that this is a normal cost recovery program, as large retailers have stated it is?


William Warren Allmand: Mr. Speaker, the director and officials of our department are not yet ready to make a judgment on this and will not be ready until they have observed all the evidence. These possibilities must be examined, but we cannot make a report on the matter as yet.


HEALTH AND WELFARE
Mr. S. Victor Railton (Welland):: Mr. Speaker, my question is for the Minister of National Health and Welfare. In light of representations made to the Standing Committee on Health, Welfare and Social Affairs concerning the need for increased funding for the Medical Research Council, has the minister given further consideration to this matter in order that Canada's medical research capability can be properly sustained?


Hon. Monique Begin (Minister of National Health and Welfare):: Oui, monsieur I'Orateur. Yes, Mr. Speaker. If they did not understand "oui", I will put it in English. I would like to take this opportunity to confirm that the budget of the MRC, which had an increase of 5.8 per cent over last year's estimate, will now enjoy an increase of 11.8 per cent.


Some hon. Members:: Hear, hear!


COMMITMENT OF FUNDS TO MEDICAL RESEARCH
Paul Yewchuk: Mr. Speaker, I should like to ask the minister whether the 11.8 per cent increase of which she has spoken will be applied to the current year, or to next year; and could she also tell the House whether it represents any kind of long-term commitment to medical research?


Monique Bégin: Mr. Speaker, we have a long-term commitment to research, of course. If the hon. member is talking about the acute problem of arriving at some form of stability in respect of longer term funds, namely, over a period of three to five

years, Dr. Rene Simard, who started today as the new president of MRC, has already presented me with a first document, which I am studying at the time, which deals with this matter. As to the first question the hon. member raised, let me say that this increase will be in the current fiscal year.


NATIONAL DEFENCE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I should like to direct a question to the Minister of National Defence. It has to do with the neutron bomb and the fact that one of his chiefs of staff took the stand that without the neutron bomb, the overwhelming power of the U.S.S.R. would place the western world in a serious position in terms of defence.
One has only to go back to the debates of 1938-39, both in this parliament and in the parliament in Britain, to realize that the same discussions were taking place then in respect of up-to-the-minute technological developments.
In view of the fact that this senior officer has taken that position, and with the knowledge he has, which is not possessed by the rest of us, will he give consideration, before the summer adjournment takes place, to having a day set aside for discussion of defence in order that members generally, and the people as a whole, can come to their own conclusions in respect of this matter-a matter which is one of survival, if one accepts the defence point of view, or a situation that places us in an extremely vulnerable position if one adopts the disarmament view of others?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, the right hon. gentleman raises a very interesting point. I would welcome the opportunity, if the opposition would choose one of its allotted days, to debate this subject.
As to the other points, I think the right hon. gentleman raises the point that the Chief of Defence Staff, Admiral Falls, gave a military appreciation, which is not uncommon, on the utility of the weapon. He did not question its battlefield utility. He was not making a recommendation with reference to maintaining a credible deterrence.
This government, through the Prime Minister, in the last few days has reaffirmed our commitment to the alliance as well as our continuing co-operation and co-ordination. Knowing full well the lessons of the past, one must be in a position to deter aggression. The best way, we all feel, including my colleagues, the defence ministers of NORAD, to do this would be to reduce the level of armament rather than to escalate it. In the meantime, we have confirmed and reconfirmed our position to increase our readiness so we can deal from a position of strength.


John George Diefenbaker: That is very interesting, Mr. Speaker. The same arguments were made in 1938 and 1939 when so many countries in the western world failed to realize or to accept the
June 1, 1978

realization of the serious strength of Germany of that day and followed the course of the ostrich with its head in the sand.
It would be worth having a day set aside by the government to discuss this matter fully and completely, so that at least parliament would know exactly the position; because it could be too late if appropriate action is not taken. If, on the other hand, such an open discussion-


Mr. Speaker:: Order.


Barnett Jerome Danson: Mr. Speaker, the best place for this debate to take place in a reasonable fashion would be before the Committee on External Affairs and National Defence, where I have appeared whenever I have been asked. It would be very helpful, as guidance to me, to have the right hon. gentleman there, whose position is obviously different from that of the defence critic of his party.


Some hon. Members:: Oh, oh!


COLLECTIVE BARGAINING FOR EMPLOYEES
Stanley Howard Knowles: Mr. Speaker, my question is for the Deputy Prime Minister. In view of the fact that following the tabling of the report of the special committee on the public service in February, 1967, ministers from time to time assured us that consideration was being given to the recommendation that there be collective bargaining for employees on Parliament Hill, can the Deputy Prime Minister tell us the stage of that consideration at the present time? Will there soon be legislation granting to these employees the same rights that we have granted to so many others?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, there will not be legislation on that subject, certainly not in this session of parliament. It is my expectation that possibly at the next session or, indeed, in the new parliament, I will be bringing in an over-all measure.


Some hon. Members:: Oh, oh!


FISHERIES
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is directed to the right hon. Prime Minister. I should like to ask the Prime Minister if, by any chance, when he was in Washington he thought to raise with the President of the United States a very important question regarding the
Oral Questions
defence of Canadian fishing interests, namely, negotiations on the extension of our boundaries out to 200 miles and the related fishing question. If he did raise this question, would he give us some indication of the response?


Pierre Elliott Trudeau: Mr. Speaker, I had occasion to talk briefly to President Carter on this subject, although, as the hon. member would suspect, there was not a lot of time on the agenda for this type of discussion. For that reason, we agreed to defer to our ministers of external affairs, Mr. Vance and Mr. Jamieson, who did discuss the matter at greater length. There was a report in cabinet this morning in the presence of the Minister of Fisheries and the Deputy Prime Minister, and the Minister of Fisheries is now taking under advisement the information we brought back.


Donald W. Munro: Mr. Speaker, in view of that report, which could be encouraging and which could not be encouraging because we do not know what the results were, and without asking anyone to reveal what was passed around in cabinet, I wonder if the Secretary of State for External Affairs took the opportunity when he was in Washington to discuss with another important influence in Washington, namely, some of his parliamentary colleagues in Congress- those key people who are expected to ratify the agreement- the same matter, and whether he had any concrete results.


Donald Campbell Jamieson: Mr. Speaker, I did not speak with any congressional leaders on this question.


Donald W. Munro: Shame on you.


Donald Campbell Jamieson: The hon. member said, "Shame on you." I am not sure if he would feel the same way if the American cabinet ministers were to come up here and lobby some of our people. That is one consideration. But I have to say, at the same time, there was nothing lost in that regard. The conversations with Secretary of State Vance were very comprehensive. I undertake to indicate to the House at the earliest possible moment the outcome of those conversations and what steps will be taken.


PROGRESS REPORT ON CANADA-U.S. NEGOTIATIONS RESPECTING FISHING BOUNDARIES
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, my question is related to the question that has been asked and I direct it to the hon. Minister of Fisheries and the Environment. In view of the fact that in 1977 the United States set the total allowable catch for cod and haddock at 20,000 and 6,000 metric tonnes, respectively, in Georges Bank-a 40 per cent increase, in effect, on both species-which contravenes section 8 of the 1977 interim agreement, and they also increased their pollock catch by 3,000 metric tonnes and the scallop catch by 180 per cent in one year, would the Minister of Fisheries, since neither the Prime Minister nor the minister for external affairs seem to have the answer, give the House an up to date report on the progress being made in resolving the Canada-U.S.
80045-10'/2

June 1, 1978
Oral Questions
boundary dispute? If agreement is not reached, for example, on a quota for scallops in 1978, can he inform the House what will happen to the interim fisheries agreement which presently exists between our two countries?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, in case there is some misunderstanding, I must remind the hon. member that some of the quotas he has alluded to are, either in total or in part, taken on the American side of what would be an eventual boundary. These are transboundary stocks in which we have an interest and for this reason, of course, we do not agree with the American position with regard to the conservation measures we have recommended.
As to the final outcome, the hon. member will have to bear with me a little longer. I have expressed the hope that we will have by the end of this week knowledge of whether the agreement is, or is not, possible.


CONFLICT OF INTEREST
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I address my question to the Prime Minister. It relates to the question first raised this afternoon by the Leader of the New Democratic Party concerning the appointment of Donald S. Macdonald to the board of directors of the MacDonnell-Dou-glas Corporation.
My question to the Prime Minister is this: Does he not concede that the position of a former cabinet minister is quite distinct from that of a former deputy minister of a particular department, in the concept of collective agreement within cabinet and collective decision-making, particularly when the minister was the former minister of finance who will be very much concerned about an expenditure of $2.3 billion for the acquisition of military aircraft?


Pierre Elliott Trudeau: Mr. Speaker, I believe the hon. member is now arguing contrary to the position taken by the Leader of the New Democratic Party, who was arguing that they should be guided by the same guidelines. Now the hon. member is suggesting that they should be different. The position of the government was put before the House in December of 1976.


An hon. Member:: Tabled.


Pierre Elliott Trudeau: It has been tabled. It has been made public and is known. If it had been unfair in some way, I would have expected members opposite to so state. They are not reticent in telling the government that it is too lenient with its former members and former officials. It was done at the time of a rather hotly debated issue raised in this House on the occasion of a former deputy minister being engaged in other business in Ottawa. We responded at the time with guidelines that seemed

to be fair in the sense that they did put a distance between a former position and the next successive position. They spelled out that there could be no serving of two masters simultaneously or in immediate succession, and they were accepted then, I believe, as reasonable. I repeat that Mr. Macdonald has adhered to these guidelines in their strictest sense.
If hon. members opposite want to propose stricter guidelines for the future which would apply to all members of the House and in a particular sense to former cabinet ministers and former civil servants, we are anxious to have their views.


Charles Joseph Clark: We would like to do away with frozen trusts, for example.


Pierre Elliott Trudeau: Mr. Speaker, the Leader of the Opposition is beginning to speak. You will note that it is three o'clock.


Ramon John Hnatyshyn: I have one supplementary, Mr. Speaker. It may not have occurred to the Prime Minister, who is very tired after his long trip, that that is precisely what we are trying to do: we are trying to improve the guidelines which he made, for they are not engraved in granite.
Is the Prime Minister aware of the fact that Mr. Macdonald has also been appointed to the board of directors of Shell Canada Limited, which has substantial interests in Syncrude and other federal projects, and does he not think that in light of this kind of development, where a minister in the cabinet, recently retired, was involved in energy policy decisions, he should at least reconsider his guidelines to make more stringent rules for cabinet ministers and former cabinet ministers?


Charles Joseph Clark: Tell us about frozen trusts.


Pierre Elliott Trudeau: Mr. Speaker, the important issue now is that I state-and the statement has not been challenged by the opposition-that the former minister of finance has respected the guidelines. If the hon. member opposite wants to argue that they should be stronger and that they should apply in future with some stringency, we are prepared to hear suggestions. I am just telling the opposition that those guidelines have been known to the House and the Canadian people since December, 1976, and the former minister has respected them.

We know it is a question which will always cause problems. If you say the distance will be two years, people will ask, "Why not five?" If you say there will be a conflict which must be resolved in one year, they will ask, "Why not two years?" It is very important not to put former citizens who served the Canadian public from the particular vantage point of parliament, whether as members of parliament and members of a government or, for that matter, members of the public service, in a position where they have to retire into nothingness. That is not the position we want to take.
June 1, 1978


PRIVILEGE
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, before 1 begin I wonder if I might ask if the Minister of Justice (Mr. Basford) is prepared to indicate anything regarding the government's position. He may have had an opportunity to discuss the matter with his colleague, the Minister of Supply and Services (Mr. Goyer), under whose auspices it would appear much of the alleged bungling with respect to this matter took place.
I see no indication of a willingness on the other side to stand and deal with the matter, so I shall proceed.


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I am not sure what the hon. member wishes me to respond to. He raised a question of privilege the other day to which, I take it, he wants to speak again. At that time he did not indicate the precise nature of the motion he wants to move, so I am unable to respond to it at this time.
The question he asked me the other day was about tabling certain documents and I undertook to table that which I could.
1 am in the process of doing that. I have three documents ready for tabling, and another one is being worked on presently.


Gerald William Baldwin: I will take that at face value, Mr. Speaker, and hope that the documents will be tabled because they are very, very important to this particular issue. 1 really and sincerely hope that the aura of secrecy which appears to be around the trial in this matter does not surround this House.
I have obtained and sent to the Minister of Justice, and to all those other hon. members who were good enough to intervene in this debate the other day, copies of an English translation of the statement issued in Montreal on May 29 by Acting Chief Judge Mayrand. 1 must say that the copy which came to us is not very legible and I was only able to produce as good an English translation as possible under the circumstances, so if there is any challenge as to its terms I shall, of course, consider that.
I am not going to read all of the statement, which is three pages long and, of course, as a private member I am not permitted to table it. It may be that when the Minister of Justice speaks he will be able to table the document in its entirety if he accepts it.
In part, some of the comments which appear in the statement are as follows:
Some members of parliament, under the protection of parliamentary privilege, have taken the liberty-
I underline the word "liberty".
-of questioning and critizing the way in which the trial was conducted before Justice Luc Trudel of the Sessions Court.
Then he said:
It is up to the citizens to place pressure on the legislators in order to change the law or on the cabinet in order to change its attitude.
Privilege-Mr. Baldwin
And later he said:
In the name of the respect of judicial independence, we cannot tolerate-
I repeat those words, Mr. Speaker.
-we cannot tolerate the remarks of Mr. Gerald Baldwin, M.P., who was wondering whether the law had not been well understood or had been wrongfully applied by the judges. We respectfully advise him to content himself with doing his own work, that is, with the drafting of a better Official Secrets Act, if he feels the present one is unjust and abusive. The member of parliament, Mr. Baldwin, should not pose as an appeal court to study the conduct of the judge of this trial, especially since he is totally ignorant of the facts presented as evidence-
Finally he said:
It seems to us that it would be preferable to leave to the courts the delicate task of drawing the line between the rights of the individual and the rights of a nation in the application of the law.
I have underlined vocally some of the statements made by the Acting Chief Judge and I will relate my comments to some of the remarks in the statement, later.
To start with, I want to say that I have never been happy about the use of the word "privilege." I have never maintained that members of this House, of parliament, have rights and privileges higher than those of others, but I think, and I would insist, and I am sure my colleagues on both sides of the House would insist, that members of this House must be guaranteed, must be assured that there are no inhibitions, or any suggestion of intimidation to prevent every one of us from carrying out our duties as we see fit.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: This is especially so today when so many challenges exist to the strength and the capacity of this House and this parliament to carry out its responsibilities. I suggest we must be ever vigilant to correct what appears to be limitations on our rights as members to do the job we were sent here to do.
I hold no brief for Mr. Treu, Mr. Speaker, but I am concerned about the circumstances under which the legislation in question, the Official Secrets Act, was applied, and which permit the taking of proceedings such as the trial, conviction, and sentence of Dr. Alexander Peter Treu.
Like courts or judges, or even prime ministers, we must be prepared to accept and live with criticism, but not with threats or statements designed or calculated or intended to fence us in and to limit our capacity to discharge our responsibilities. We must be in a position where we have full immunity in this regard, and that is what I complain of in this case. That, Mr. Speaker, is something which concerns this House, and I suggest it is not a matter just of myself as a member of the opposition or of my friends in the New Democratic Party and the Social Credit party. I would hope this would apply to members on both sides of the House who have concern about the capacity of this House and of every member of this House to discharge their duties without being threatened or intimidated, or without any inhibitions.
I say, Mr. Speaker, that in this particular case it would seem to me that the statement and the language of the Acting Chief

June 1, 1978
Privilege-Mr. Baldwin
Judge have transgressed the boundary line and, in my opinion, they constitute a threat or intimidation by their context.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: The words "some members of parliament under the protection of parliamentary privilege" are certainly more than reasonable criticism. Then he said "have taken the liberty". I consider that to be an affront to myself and every member of parliament. If I had not considered, and if other hon. members who spoke in this debate the other day had not considered they were justified in doing that, they would not have done so. To be accused in doing so, in the original comments I made in this House on three occasions, that I am taking a liberty in discussing the matter in the way I did, constitutes to my mind far more than any judge is justified in bringing to my attention in the form of the statement which was issued by Judge Mayrand.
We must couple the following statements:
It is up to the citizens to place pressure on the legislators in order to change the law or on the cabinet in order to change its attitude ...
-we cannot tolerate the remarks of Mr. Gerald Baldwin, M.P.-
Mr. Speaker, this is not an ordinary citizen speaking; this is a judge, with power to summon people before him, peremptorily, and to sentence them on the basis of an allegation of contempt. This is a person who has, as a member of the judiciary, whose independence I and all members of this House will always respect, the power to call myself or the right hon. member for Prince Albert (Mr. Diefenbaker), or the Leader of the Opposition (Mr. Clark), or any member before him on a question of laying a charge, punishable by imprisonment or otherwise, of contempt. I underline the wording, "We cannot tolerate the remarks of Mr. Baldwin," coupled with what has been said before, coupled with a subsequent statement, we advise him-
-and he means we are telling him; cautioning him-
-to content himself with doing his own work, that is with the drafting of a better Official Secrets Act, if he feels the present one is unjust and abusive.
I have already commented on that. I have been trying to do it for four years with a notable lack of success so far.


Miss MacDonald:: Wrong government.


Gerald William Baldwin: I resent the right of any judge to tell me that I have no right to be critical of the way in which a trial is conducted when in doing so there was no mention of the trial judge, no mention of his name. What I was doing was what any member of this House would do and has done, saying trials of this nature and character take us far beyond what is permissible in this particular day and age.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: There is an obligation upon us, by calling attention to trials of this nature, to seek corrective action. If

we did not do that, I would not be doing my job as a member, nor would other members of this House.
I have looked at the possibilities of what this House can do. I have looked at some of the precedents, and I have looked at the hearings of the committee which Your Honour has the privilege to chair, that is, the committee on rights and immunities. We have dealt with this issue, particularly in a report made on April 29, 1977. This House received a report from the special committee, which says in part:
3. The freedom of speech accorded to members of parliament is a fundamental right without which they would be hampered in the performance of their duties. It permits them to speak in the House without inhibition, to refer to any matter or express any opinion as they see fit, and to say what they feel needs to be said in the furtherance of the national interest and the aspirations of their constituents.
We were at the time dealing with the question of sub judice, but the words which were uttered by that committee and tabled in this House have not been challenged. I submit to you, Mr. Speaker, and to members of this House, that these words must be taken to represent the considered opinion of all members of this House and that they are wise and essential words in the kind of world in which we live today.
Later on, dealing with the question of the convention of sub judice and privilege, the committee went on to say:
Your committee believes, however, that any modification of the practice-
And that is the practice of sub judice and privilege.
-should be in the direction of greater flexibility rather than stricter application. It is not possible to determine whether or to what extent comments made in parliament might affect the outcome of a trial or an inquiry.
It went on to say the option should be left with the Chair.
We have also had some illustrations of questions of privilege in this House. One of the very earliest ones deals with a case in
1879,	when Mr. Alexander Mackenzie stated in the House that one of his colleagues had been called "a cheat and a swindler" by a certain John A. Macdonell who came into the House to profess those words. The culprit was expelled from the House by the Sergeant-at-Arms while still insisting that L. S. Huntington was a cheat and a swindler. On February 16,
1880,	Macdonell was again summoned to the Bar. He appeared on the day ordered and apologized, but only to the House and not to Huntington. He was nonetheless discharged after a motion was passed declaring his actions a breach of the privileges of the House.
There is another interesting case which has some similarity. In 1874 the House ordered that H. J. Clarke, the Attorney General of Manitoba, be called to the Bar of the House to answer some questions. Clarke was seeking to execute a warrant for the arrest of Louis Riel for the murder of Thomas Scott. As Riel had been recently elected to the House as the hon. member for Provencher, the warrant was considered by some as a contempt of parliament.
There are other cases. However, I think it would be wise to say that in issues of this kind we should consider each one on its own particular merits, to examine to what extent, and that is an issue upon which you, Your Honour, as guardian and as the repository of the privileges of this House may be called

upon to make a decision, whether in your view there has been a prima facie case of privilege. It is not for Your Honour to make a decision that there has or has not been but to say whether, in your opinion, enough facts have been put before this House to justify the House being given the motion for the purpose of coming to a decision, if it becomes essential to go that far.
I will not go any further with this. Other members may want to participate. I would like to think that I have put sufficient facts before the House which would warrant some concern, not only on the part of members on this side of the House but members on the other side as well, who surely must be alarmed at the extent of the threat posed within the four corners of the statement made by Chief Judge Mayrand.
Maybe the Minister of Justice can deal with this next point because I think this is relevant to the whole issue. It deals with what has been established to be a very serious threat to the freedoms and liberties of people in this country. Has the minister given any consideration to instructing counsel to appear before the appeal tribunal to have them seek to have the bail order rectified so as to permit Dr. Treu to be able to speak to myself and other people in regard to this issue? Is the Minister of Justice prepared to instruct counsel to appear before the appellate tribunal and ask that the appeal be held publicly? There is always the saving right of any court when issues come up which may be pertinent to national defence, or in cases of espionage, to urge that documents not be disclosed.
I would also like to ask if the minister is prepared to walk the full mile and instruct counsel to appear in appellate court and agree that because this trial was held in secret, the conviction and sentence be quashed and that an order be sought to include a provision that a new trial be held publicly, also saving the right of the Crown to insist or to ask at any time that certain evidence or documents which may be inimical to the security and the defence of the country be kept in camera. I suggest that would be a fair and reasonable thing to do under the circumstances.
I am prepared to move a motion and my motion would be: That the matters consisting of the statement made by the Chief Judge, Mayrand, dealing with the statements 1 made in this House, a statement made by the chief judge on May 29, and all related issues be referred to the Standing Committee on Right and Immunities.
I suggest that committee because that committee has already had experience and has dealt in considerable detail with these particular issues. I am prepared to relinquish the rights I have, in observance of the belief that we might secure a measure of justice for a man who, while he may have breached technically an act in the remarks of the judge who sentenced him, seems at the moment, according to the limited facts we have, to have been the subject of a grave miscarriage of justice. That is the issue which should concern us all primarily. I am reserving the right to move that motion. I would first like to hear what the Minister of Justice and others may have to say.
Privilege-Mr. Baldwin


Mr. Speaker:: Order, please. I am sure there are others who wish to participate. I am anxious to hear the comments of other members. I see the Minister of Justice (Mr. Basford) anxious to participate. But there is one thought I want to put forward before inviting the participation of other members.
There are two or three matters that are tied together in the subject raised by the hon. member for Peace River (Mr. Baldwin). The first is that aspect he was touching on at the conclusion of his remarks, that is, some suggestion in respect to the merit of the case before the courts and some positions to be taken with regard to the actual legal matter that is before the courts. That is one which will be ongoing and one that I am sure he, and other members, will pursue with great interest. I am certain all hon. members will want to do that.
The matter which is of a more particular nature from the procedural point of view is that of the question of privilege, because the hon. member for Peace River has based his action in the House on privilege. Of course my obligation may be to find whether the matter does in fact come within the strict and classic definition of privilege that we have followed in the past, whether there has been an affront or contempt of parliament, or whether there has been a molestation or interference in some way with the hon. member in carrying out his duty.
It occurs to me that if I make that fundamental decision, then I give the matter priority and put the question to the House as to whether it should be sent to the committee on rights and immunities, which the hon. member has suggested. While other members are participating, I would want them to bear this in mind. In the end, it seems to me that with the mandate that that committee has already, it would be most unlikely that that committee would complete the work of its present mandate without in some way turning its attention to this entire matter, whether it gets a specific reference or not.
That is something which is quite important to remember, because the subject which is before that committee, the rights and immunities of members, can hardly be looked at in full without a reference to that particular matter. That leads me to the area I would want hon. members to think about during their participation in this discussion, that is, that it may be possible to accommodate the position the House seeks to achieve without making a basic decision on the question of privilege, if the House, instead of insisting on a decision on privilege first, agrees that the matter ought to be referred to the committee on rights and immunities. If the House is in unanimous agreement that the matter ought to be referred to the Standing Committee on Rights and Immunities of Members for examination there, then it is not necessary that it be confined within the strict definition of privilege.
Since the matter relates to language and, therefore, somewhat to the potential rather than the actual interference by the courts in the actions of this member or any other hon. member, and since language has often been set aside as an actual molestation and interference, and since obviously the hon. member and other hon. members are not in the slightest intimidated in their desire to pursue this matter, by whatever

June 1, 1978
Privilege-Mr. Baldwin
language was used-and I am not saying this because I have not heard all the arguments and I have not examined them, but it may be difficult to fit them into the specific and classific definition of privilege-if that is so, it may be that hon. members would want to think about the possibility of saying we can obviate the decision on privilege by simply agreeing that the matter ought to be referred to the committee in any case.
If that does become possible during the discussion, or during the time that I have it under reserve, it is something on which I would want to take some guidance from the House before coming to a final decision. If there is no consent and no accord in that respect, then of course I will carry on and make the basic decision that it is my responsibility to make on the matter of privilege.


Stanley Ronald Basford: Mr. Speaker, I appreciate your position of endeavouring to make a suggestion that might be helpful. Obviously it has to be considered carefully. However, as I understand the suggestion, I would have some difficulty with it.
As Your Honour pointed out, there are several aspects to this whole matter. One is the obvious concern of the hon. member for Peace River (Mr. Baldwin), a concern which I suspect is shared by all members of the House, including myself, as to the wording of the Official Secrets Act and its application. That is a matter of substance, not of privilege.
There is the second matter, the question of the Crown's case, which is related to a number of questions the hon. member has asked me and for which I, as Minister of Justice, obviously as a political officer of the House am accountable to the House. It seems to me there is a procedure where the Crown, through its Minister of Justice, is accountable for the conduct of the case, is accountable to the House in the daily question period or in the examination of the departmental estimates in the Standing Committee on Justice and Legal Affairs.
During the handling of estimates, as the chief law officer, I am subject to examination by any member who wishes to come to the committee, on how I or my officials are conducting a Crown's case.


An hon. Member:: You do not have to answer.


Stanley Ronald Basford: The hon. member yells out that I do not have to answer. That, as Your Honour knows, is a rule. The fact is that I have never been asked any question in the Justice and Legal Affairs Committee, so the question of whether or not I would answer has never arisen.
The third aspect is the question of privilege, or the alleged question of privilege, which arises, or allegedly arises, out of the remarks of the Acting Chief Sessions Judge in Quebec. I suggest, with respect, it is that latter part on which we have to concentrate.
I might go back to the question of Your Honour's suggestion of referring the whole matter to some committee. I recall the hon. member for Peace River suggesting the other day that

that would be desirable so that the committee could call the judge before it. With the greatest of respect, that is something that parliament should undertake only under the most serious of circumstances.
I want to make very sure what my role is in this debate. I am not here to defend a judge. These statements, or alleged statements, were made by a provincially appointed judge. Even if he were a federally appointed judge, he is not accountable to me for his remarks, nor am I accountable to parliament for his remarks.
It would be unwise, and in fact dangerous, if one is going to consider the independence both of parliament and the judiciary for parliament to pass motions summoning judges, particularly provincially appointed judges, before our committee. If the judiciary has committed an error or a wrong, this parliament has set up through amendments to the Judges Act, through the Judicial Council of Canada, a mechanism for dealing with those types of complaints about members of the judiciary. In the province of Quebec there is a similar kind of mechanism for dealing with complaints about the conduct, behaviour or actions of the judiciary.
As I made very clear in this House a while ago in my statement relative to the hon. member for Leeds (Mr. Cossitt), it is up to this parliament and its members to determine our rights, privileges, and freedoms. Equally, the independence of this institution and the independence of the judiciary, from each other, depend on our not being called to court for them to determine our privileges, and on judges not being called before this court to determine their rights and privileges.
Therefore, while Your Honour's suggestion to refer the whole matter to a committee is, I know, made in a spirit of helpfulness, I resist it because I think that would create a very dangerous precedent.
On the substance of whether the remarks constitute a question of privilege or a prima facie case of privilege, the hon. member was not able to table the remarks. I would be happy, although in this matter I have no official capacity whatsoever, to table, if the hon. member will supply me with a copy of it, a copy of his letter to me of June 1 to which are attached what purports to be a transcript of the judge's remarks. I will be quite happy to accommodate the hon. member in tabling it if he will give me the copy to table. In no way can I authenticate the correctness of the transcript or the translation, but I am happy to accommodate the hon. member in that way.
Whether the statement which has been given to Your Honour is a wise statement or an unwise statement is a question which I am not going to debate. One could argue that it may not be a wise statement, and that a judge should not have made comments on a matter which really is highly political. However, we are not here to debate whether the statement was wise. We are here to debate whether it constitutes a question of privilege.
I think I will make just three short points. First, whether the statement is well founded or not, it clearly acknowledges in the
June 1, 1978

second paragraph the privileges of parliament-"Some members of parliament, under the protection of parliamentary privilege, have taken the liberty-The hon. member takes issue with the words "taken the liberty" and so forth, but it seems to me that there is a very clear acknowledgement that whatever the hon. member did, or whatever any hon. members did in this House in commenting on the case, they were acting within the privileges of the House of Commons and acting within their own privileges.


Mr. Fraser:: It is just exactly the opposite.


Stanley Ronald Basford: There is a clear acknowledgement that that privilege to comment exists. There is a clear acknowledgement that there is a freedom in this House and among hon. members to comment in the way they want.
Second, the statement is not an instrument of the court. The hon. member feels he has been threatened or intimidated. As Your Honour has said, quite obviously hon. members are not threatened or intimidated. The comments have engendered this very debate, and for the hon. member for Peace River, whom I have known for a long time, to suggest that he has been threatened by these comments or in any way intimidated, or is likely to be intimidated is, with all due respect, carrying it somewhat too far.
Third, I point out that the statement is not an instrument of the court. It is not a court order. It has no status or stature. In no way can it affect the privileges or the rights of members of this House.


Ramon John Hnatyshyn: Ron, you may have to run again because you are not going to make a good lawyer.


Mr. Beatty:: If I get into trouble, will you promise to be the Crown attorney?


Stanley Howard Knowles: Mr. Speaker, first of all I would like to comment on the issue of how the statement in question gets before us. I suggest that whether or not the Minister of Justice (Mr. Basford) tables the letter from the hon. member for Peace River (Mr. Baldwin), and the copy of the translation of the statement which the hon. member sent him, the House could, by unanimous consent, agree to have anything it wishes made an appendix to today's Hansard, and I suggest that since we are discussing a statement made by the judge, at some point Your Honour might ask if there is such consent. My suggestion is that the consent be to the making of an appendix to today's Hansard of the letter which the hon. member for Peace River wrote to the Minister of Justice-he wrote the same one to me-together with the enclosure, namely, a translation of the judge's statement. Is it Your Honour's disposition to settle that matter now?


Mr. Speaker:: The Minister of Justice (Mr. Basford) made reference to the letter and, I think, quoted from it. At least I hope he did. The House is obviously generally interested in having the letter tabled, either under our practice whereby a minister of the Crown participating in discussion, who quotes from a document, is asked by the House or compelled by the
Privilege-Mr. Baldwin
House to table it or, in any case, upon the unanimous consent of the House which, I assume, is now forthcoming.
I take it that the minister has the consent of the House at this time-just to keep it perfectly clear that we are proceeding with consent-to table the letter referred to, and the enclosure. It can be done in that way, and the matter then becomes at least a part of our proceedings. If the hon. member is suggesting now that it ought also to be made an appendix to Hansard, I will now ask if there is unanimous consent that that document be printed in Hansard as an appendix. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: So ordered.


Stanley Howard Knowles: Mr. Speaker, there is one other matter which has been referred to, mainly by the Minister of Justice-


Stanley Ronald Basford: I do not have a copy to table.


Stanley Howard Knowles: I have a copy. The other matter which has been referred to, mainly by the Minister of Justice, is the question of whether this House or one of its committees should call the judge to appear before such a committee.


Mr. Peters:: Hear, hear!


Stanley Howard Knowles: My good friend and chief counsel, the hon. member for Timiskaming (Mr. Peters), is expressing his view. I suggest that that not be part of the discussion here in the House. If we refer this matter to a committee, let the committee decide on that question. There are angles which are involved, and I think they should be looked at, but I do not think the question of whether Your Honour decides that there is a prima facie case of privilege should be conditioned upon whether that means calling the judge before the committee.
In any case, the only request in the motion which the hon. member for Peace River proposes to make is that the matter be referred to the Standing Committee on Rights and Immunities of Members. It is a bit unusual to refer a matter of privilege to a committee other than the Standing Committee on Privileges and Elections, but I think in this case the point is well taken.
I gathered that Your Honour rather favoured the idea of having the whole matter simply referred as a reference to that committee if there was unanimous consent. But if the Minister of Justice is not prepared to give that unanimous consent, Your Honour may yet have to rule on whether there is a question of privilege, and it is to that that I address myself today, as I did when we discussed this matter a couple of days ago.
There are three sentences in May's nineteenth edition which I would like to read. They are short and to the point. On page 150 there is this sentence:

June 1, 1978
Privilege-Mr. Baldwin
To attempt to influence members in their conduct by threats is also a breach of privilege.
Another sentence is found on page 151.
It is a breach of privilege to molest any member of either House on account of his conduct in parliament.
Then on page 153 there is another sentence which I think has some relevance.
Wilful misrepresentation of the proceedings of members is an offence of the same character as a libel.
Despite what the Minister of Justice has said about members not being intimidated by the comments of the judge, which of course is demonstrated by the fact that we are discussing the matter in full freedom here on the floor of the House, the fact is that the gentleman who has offered this criticism is not an editorial writer in the employ of some newspaper, and not an ordinary citizen of Canada saying he will not vote for the hon. member for Peace River at the next election. He is a judge who has the power to summon persons to his court, or to charge the hon. member for Peace River with contempt. I suggest that when a judge in that position makes the statements that he has made in the translation which is now before us, he is in effect saying to the hon. member for Peace River: desist or something can happen to you. Indeed, he is saying it to all of us. I put that down as a threat, as noted on page 150 of May's nineteenth edition, or as molestation.
There is also, in my view, some misrepresentation of what the hon. member for Peace River was trying to do. I realize that the hon. member for Peace River has read the offending sentences and that the document is now part of today's record, but 1 think it should be noted again that the first sentence which was read is as follows:
Some members of parliament, under the protection of parliamentary privilege, have taken the liberty of questioning and criticizing the way in which the trial was conducted by Mr. Justice Luc Trudel of the Sessions Court.
The Minister of Justice says that is a statement of our rights. If that is what he meant, he could have said that we have exercised the right to question and criticize, but when he says that a member of parliament has taken a liberty, it means that in his view the member is trifling with our rights and that that in effect is a warning that, in the view of the judge, he has gone too far.
Then for that same judge to say later in very clear language-at least as far as the English translation goes-
In the name of the respect of judicial independence, we cannot tolerate the remarks of Mr. Gerald Baldwin, M.P. who was wondering whether the law had not been well understood or had been wrongfully applied by the judges.
-as I have already said, if this were an editorial writer saying this in the Globe and Mail, in the Montreal Gazette, or in the Winnipeg Free Press-so what, the hon. member for Peace River would not worry at all.
If this were an ordinary citizen writing letters to an editor, or writing to members of parliament saying "we cannot tolerate that sort of thing, we will not support the member in the

next election", that would not be cause for concern. But when a judge, with the power to charge a person with contempt, says that sort of thing, in my view he is attempting to influence a member in his conduct in the House, he is molesting a member on account of his conduct in parliament, and I suggest that, whether or not we have the right to call the judge, or decide that we have that right, the hon. member for Peace River has been wronged by that kind of statement.
The judge goes on to say:
We respectfully advise him to content himself with doing his own work . . . The member of parliament, Mr. Baldwin, should not pose as an appeal court to study the conduct of the judge of this trial-
Then the final paragraph is of the same character. It reads:
It seems to us that it would be preferable to leave to the courts the delicate task of drawing the line between the rights of the individual and the rights of a nation-
Editorial writers may tell us that until they are blue in the face and we do not worry about it, but when a judge says that we do not have the right in this high court of parliament to discuss the question of drawing the line between the rights of the individual and the rights of a nation, in my view that is going too far. I say "going too far" because the effect of that is to attempt to influence members in the conduct of their duties in parliament, and it is a case of molesting a member of parliament on account of his conduct in parliament.
I have read again today, as I did before I presented a motion some days ago under Standing Order 43, the words of the hon. member for Peace River on this whole question. They were contained in a motion under Standing Order 43 on Friday, May 12, in questions to the Minister of Justice on Monday, May 15, and in another motion under Standing Order 43 on Tuesday, May 23, and I find in all those statements nothing that is offensive, nothing that goes beyond his concern that we have on our statute books an Official Secrets Act which is thoroughly out of date and should be looked at and revised so that the kind of trial which took place in the case of Dr. Treu could not take place at all. Because, in my view, the hon. member for Peace River has not offended the rights of the courts not to be criticized, because he has exercised restraint, because he has pursued his duty in trying to get this parliament to bring up to date an outdated and antiquated law, I believe that for the judge to molest and interfere with the member's rights is a classic case of privilege.
I must say that I come back to my feeling that Your Honour's suggestion was a good one and, if it can be negotiated, I would go along with it, namely, that this matter be gone into thoroughly by the Standing Committee on Rights and Immunities of Members. But if the Minister of Justice is not prepared to give unanimous consent to pursuing that course, then of course Your Honour will have to decide whether or not there is an actual case of privilege, bearing in mind that the classic definition of privilege is an attempt by anyone, especially outside of the House, to interfere with the right of a member to do his duty in the House. I suggest that that is what the judge has done. Whatever may be our rights of redress, at least we have the right to declare that the privileges
June 1, 1978

of the hon. member for Peace River, the privileges of this House, have been offended, and we have the right to have that matter discussed in an appropriate committee, and to issue a statement which, I trust, will be completely on the side of our distinguished colleague, the hon. member for Peace River.


Mr. Speaker:: The hon. member for Grenville-Carleton (Mr. Baker) will have the floor in just a moment.
In examining the transcript of the remarks which the hon. member was good enough to provide to the Chair in giving notice of his intention to raise this today, there is one matter I should mention, that is, that some argument has centred around the second paragraph which reads:
Some members of parliament, under the protection of parliamentary privilege, have taken the liberty of questioning-
The phrase "taken the liberty of questioning" has come under considerable attention until the present time.
The French text is as follows:
-certains deputes, sous le couvert de leur immunite parlementaire, se sont permis de questionner-

I think most hon. members would agree that a possible translation of that would be "have taken the liberty", but another translation of it would be that members, under the protection of parliamentary privilege, have allowed themselves to question.


Stanley Howard Knowles: La meme chose.


Mr. Speaker:: It is not quite the same thing, because there was some argument as to whether or not this could be described as a liberty when in fact it may be not only the right of a member but his duty. I only put that on the record because so much has been made of it. If privilege is going to be found-and, as I have indicated earlier, it will not be without some difficulty-it seems to me that the far more serious words are those which are translated very accurately. Those are the ones that say:
In the name of the respect of judicial independence, we cannot tolerate the remarks of Mr. Gerald Baldwin, M.P.,-
That was a direct translation, and those words are far more serious than the oblique references as to whether we are doing it by liberty or by right. I would think there would be further discussion and consideration of that language, and other hon. members are free to comment on the other language as well, but I thought I should correct the record.


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, in looking at the statement-and I am not unhappy you interjected-I should like to say, first of all, that frankly I am just a little disturbed that the Minister of Justice (Mr. Basford) decided today he does not agree to what I thought was a perfectly reasonable and perfectly acceptable suggestion that the matter go to committee where it can be dealt with. Frankly, I think that upon reflection, as he looks back upon his career in parliament, the Minister of Justice is going to count
Privilege-Mr. Baldwin
that decision among the most regrettable he has made in the exercise of his duties, because it would have been an appropriate, quiet, and dignified way of handling the matter, to look at it from the point of view of the position of the House of Commons, on the one hand, and the question of the importance and integrity of the judiciary on the other, to which he directed himself on Tuesday. It was a regrettable decision. I commend you, sir, for having advanced it, and I condemn the Minister of Justice for having rejected it.
The second matter is with respect to the translation of the words you brought forward. I think it is a very dangerous thing, and I say this with respect, if we look at the document paragraph for paragraph, word for word, or phrase for phrase. We have to look at the whole tenor of the document.
The tenor of the document, while it did not intimidate the hon. member for Peace River (Mr. Baldwin), or the right hon. member for Prince Albert (Mr. Diefenbaker), is the main point. The point is in respect of the nature of the words that appear in the document, and the tone of that document. The point is, could the document be considered to intimidate anyone, not specifically hon. members, but rather the position of parliament in the scheme of things and its relationship to the courts? If there ever was any doubt about the whole purport of the document, that doubt should be resolved in favour of parliament. I do not think there can be any doubt, and there is certainly no doubt in my mind, and I say that with respect. The doubt ought to be resolved in favour of what you must decide at this point, sir, and that is whether there is a prima facie case.
This does not mean, Mr. Speaker, that you have to try the issue and decide whether there was a breach of privilege, and whether that has been proved to the degree required. What you have to decide is whether there is a prima facie case, and whether there is enough in the document itself, taken as a whole, bearing in mind what the authorities have said, to warrant sending the matter to the committee in order that the committee can deal with it, following an appropriate motion having been dealt with by the House.
I suggest, with the greatest respect to that learned judge in Quebec who made the statement, that this is far more than merely an unwise statement. I suggest to you, sir, with respect, that the matter has to be resolved by this House in favour of protection of the privileges of the members of this place. I am not suggesting that they were threatened, per se, but rather whether they could be threatened by this statement. That is the issue which has to be dealt with in respect to a prima facie case. I think that prima facie case has amply been made out by the hon. member for Peace River.
It is important that we consider the position of the judiciary, but it is equally important that this House considers it own traditions, its own privileges, and its own place in the scheme of things. If we do not deal with the matter, then what will happen is something the right hon. member for Prince Albert suggested the other day; a travelled part can become a high-

June 1, 1978
Privilege-Mr. Baldwin
way. All of these little things begin to build up, and we may find the traditions and privileges of this House, in the sense the hon. member for Peace River spoke about them, gradually whittled and eroded away. If that should happen, it is not just members of the House of Commons who will suffer. This institution itself will suffer, as will the force of this institution in the scheme of our national affairs. We do have certain privileges-I guess you could call them immunities or rights- to be used responsibly for the protection of people, causes, and institutions.
This is why it is important, if Your Honour has any doubt in respect of the matter, that the doubt ought to be resolved in favour of deciding that a prima facie case has been made. I must suggest, sir, that the facts should lead you far beyond that point. However, if the facts have left Your Honour's feelings in balance, then any doubt should be resolved in favour of this institution and its privileges, and I ask you to rule in that way, sir.


Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: I will attempt to be brief, Mr. Speaker. It would seem to me that the real question at issue here is one of conflicting privileges, perhaps, and the necessity that parliament has its rights, freedoms, immunities and privileges. So, equally, does the judiciary. I think some of the words of the hon. member for Peace River (Mr. Baldwin) were very well chosen, but I think, in terms of the way he applied them to the rights of members of parliament, they could equally and equitably be applied to members of the judiciary. There must be rights, freedoms, and immunities which are afforded members in order that they may do their job. Concomitantly, there must be rights and privileges afforded members of the judiciary to do their job.
What the hon. membr for Grenville Carleton (Mr. Baker) has said, to the ffect that it was the nature or the tenor of the words that is important, is quite true. With respect, sir, I do not see in the words, as I read this translation, any of the same reflections. I do not see the same tenor in those words.


An hon. Member:: Oh, oh!


Roger Carl Young: Perhaps the hon. lady would permit me to complete my remarks. I do not see that same tenor in the words. I see a difference of opinion between a member of parliament and a judicial official; a difference of opinion between a member of parliament and a judicial official; a difference of reflection of one upon the other. One has to be a little bit thin-skinned to find the reflections in those words that have been attached to them thus far.
To begin with, there is a very important issue in respect of the nuance of the language within which the words were spoken. They do not translate quite so directly into the English language as they appear from the translation we apparently have before us. Mr. Speaker has made a point already on one particular passage.
There is a very important issue here in respect of the nuance to be attached to the words spoken in the language in which

they were spoken. A translation, rough or as accurate as one may get, may not contain the same nuances.
I said that I did not see the same flavour, the same tenor, and the same nature of feeling in the words as seen by the hon. member for Grenville-Carleton. I wish to refer to one or two passages. I hope this translation is a as accurate as it possibly can be, because I am working from the English in the translation and not from the original.
There are a couple of very important passages in this translation. At one point the judge was saying that the Official Secrets Act places a judge in a real dilemma. He went on to explain how a judge would find himself in a dilemma when conducting a trial under the Official Secrets Act. Some time later in this translation the judge was saying:
In the name of the respect of judicial independence, we cannot tolerate the remarks-
The sentence goes on to state:
-who was wondering whether the law had not been well understood or had been wrongfully applied by the judges.
I think those two phrases explain the context in which the judge received the remarks and the nature of the state of his mind at the time he made his comments in reply. I do not think one can overlook that.
The hon. member for Winnipeg North Centre (Mr. Knowles) said, and I hope that I am not taking him out of context, that the judge had said something about members of parliament not having the right to draw the line, although I do not see that in here. The passage I see, and again this is from a translation, but the judge is saying "It seems to us that it would be preferable to leave to the courts the delicate task of drawing the line between rights of individuals and rights of a nation in the application of the law." That in no way, Mr. Speaker, could be interpreted to say that the judge was saying what rights parliament has and what rights parliament does not have.


Stanley Howard Knowles: That is precisely what he is saying.


Roger Carl Young: It seems to me that the man is saying, "It would be preferable." You would have to be very thin-skinned to read into the remarks the nature of which is understood by the hon. member for Winnipeg North Centre.


An hon. Member:: He is trying not to see it.


Roger Carl Young: There are, evidently, a lot of members from the other side, Mr. Speaker, who wish to speak from their seats. If they wish to get up and participate in the debate, they are quite welcome to do so.


An hon. Member:: Sit down; I will do so.


Roger Carl Young: All right, if the hon. member would be decent enough first to allow me to conclude my remarks. I will be a few more seconds.
June 1, 1978

To read that as a threat to parliament when the man is saying, "that it seems to us that it would be preferable", overblows quite dramatically the meaning of the words and their context. I would suggest that one-and again I would stress I have to read from a translation because 1 have not seen the original in the language in which it was spoken, and you, Mr. Speaker, have pointed out a difference, a nuance in the language in which it was originally spoken from what appears in the translation-one has to be thin-skinned to put the character into the words that has been put. I think it is tempest which has been overblown at this time.


Hon. Robert L. Stanfield (Halifax):: I will be very brief, Mr. Speaker. My concern is with the attitude taken by the Minister of Justice (Mr. Basford) and his parliamentary assistant. In a sense, I am almost more concerned about their attitude than I am about the original question that was raised.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The argument raised by the Minister of Justice was entirely spurious and substantially irrelevant. His suggestion, Mr. Speaker, that your very reasonable proposal should not be accepted, because someone has suggested in the House that the judge might be called before a committee of the House, is surely no reason why the Minister of Justice and the members on the other side of the House could not have accepted it. It is for the committee to decide how they would proceed, and I am sure a committee of this House would be quite capable of making that decision in a way consistent with the traditions of this House and of this country. For the Minister of Justice to make such a spurious argument and use that as a basis for refusing his consent, does not engender very much respect from me at least.
The minister also had something to say about his accountability to the House with respect to the conduct of trials and possible miscarriages of justice. I wonder why he introduced that at all, unless it was to infer that the hon. member for Peace River (Mr. Baldwin) ought to have proceeded in some other way. We all know that there is no way in which the Minister of Justice can be held accountable in any specific way to an appropriate committee, or any other way, because he does not have to answer questions even in committee.
The point the minister was trying to make, whatever it was, had nothing to do with the case. The distance the hon. gentleman has gone to try to suggest that we on this side of the House are thin-skinned to have taken offence at the remarks of the chief justice is a surprise to me. 1 asked myself as I listened to them: why are they taking this position? Why is the Minister of Justice and his parliamentary secretary taking this position? Surely, the whole purpose of this statement by the chief justice was to cause the hon. member for Peace River to desist in this kind of comment in this House. I suggest, with respect, that there is no other possible interpretation.
You, sir, may be quite right in suggesting that the hon. member for Peace River is not in fact intimidated, but I suggest to you that that is not a relevant consideration. I
Privilege-Mr. Baldwin
suggest the question is, what was this comment calculated to do? The only reason it was made by the chief judge was to cause the hon. member for Peace River and other members of parliament to desist from this kind of remark in the House.
As for the comments of the parliamentary secretary, there is some kind of conflict of privilege here that is a bit beyond me. I do not understand why both sides of the House could not have co-operated in getting this matter before a committee for consideration by an all-party standing committee. That would be the place to consider it, but that does not seem to be acceptable to the government, and I, therefore, suspect that you will have to make the decision, sir.
Without repeating myself unnecessarily, there has been an attempt made by the chief justice of this court to silence a member of parliament.


Roger Carl Young: Nonsense!


Robert Lorne Stanfield: What nonsense? It is open to no other reasonable interpretation. It may be, on the pretence that you have indicated in a preliminary way, that you may have difficulty finding that on the traditions and on the concept of privilege it does constitute a violation of our privileges, but I suggest with all sincerity there is no other reasonable interpretation of these comments. They were intended to silence a member of parliament, and the fact that they have not, and will not silence him, is irrelevant. I am very disturbed by the attitude taken by the Minister of Justice and his parliamentary secretary.


Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, I would simply like to draw your attention to the fact that we are now discussing a comment made in French by a judge from Quebec, and on the fact that we are discussing a translation. A moment ago, Your Honour took the precaution of referring us to the French version, that is the original version of the hon. judge's comment, and you made a distinction which, in my view, is quite right and timely, pointing out that the statement made by the judge has a clearly different meaning than it seems to have in the English translation.
I do not wish to argue at this moment, Mr. Speaker, on the merits of the question raised by the hon. member for Peace River (Mr. Baldwin). My point is that, realizing we were discussing the translation of a statement made in French by a francophone judge, I tried to get and did obtain from the clerk of the House or his assistant the French original of the statement. Mr. Speaker, that copy is practically illegible. It is impossible for me, as I can show you, and it comes from you because I had photocopies made of it, as I said, it is impossible to read it, to all practical purposes and intents, in an intelligent way and to comment on it today. I presume that someone must have had a legible version since we are now discussing the English translation. But it certainly is not the document I now

June 1, 1978
Privilege-Mr. Baldwin
have in my possession and which was given to me through your assistants and was used for that translation, Mr. Speaker.
What I am asking is that we be given the chance to study the original version of the comments made by the learned judge so that we can, in an enlightened way, basing ourselves on the original text, comment on a topic that is very serious in my opinion. I am not asking that the debate be postponed indefinitely. I am asking for a short postponement, possibly until tomorrow at the least, to allow those who want to see the original statement to get a copy that is legible and understandable and can be understood and then discuss the matter advisedly. My request is therefore that I at least might be allowed to come back to the subject at the earliest opportunity, but that I be given a legible copy of the French original of the statement made by the learned judge.


Gerald William Baldwin: Mr. Speaker, on the very day that statement made by the judge came to my attention, we got in touch with his office. An undertaking was given by his office that a letter would be sent by special delivery. It should have reached my office the next day, according to their calculations.


An hon. Member:: They don't know the Post Office the way we do.


Gerald William Baldwin: I say this with due respect, Mr. Speaker. That document did not reach my office, has not reached my office, and I do not know whether it ever will. My instructions were that it was a special delivery letter containing a copy of the comments of the chief judge and it would be in my possession immediately. That has not happened. I did all I could, and I was only able to obtain the same kind of barely legible copy as the hon. member, from a member of the press gallery who got it from the office of the clerk in Montreal.
I had people in our organization who are good at this, and who are reputable, make as careful and detailed a copy as possible under the circumstances. I would have preferred the other way, but I was put in this impossible position. Now I understand that the chief judge departed yesterday for Greece for two or three weeks, and so we may not be able to get another copy as he is not available.


Mr. Speaker:: Order, please. The parliamentary secretary has requested that he be given some time to examine the text. I think that is a reasonable request. In any event, I would intend to take some time for study of the matters I have to decide, so there certainly will be an opportunity for him to examine the text. If he seeks an opportunity to make an intervention as the result of that study, I certainly think the House ought to accord it to him.


William Arnold Peters: Mr. Speaker, I suppose we could ask the hon. member for Peace River (Mr. Baldwin) if we have extradition privileges with Greece!

Many of the people who spoke today have commented on the wording, the legality, the lawyer's position in terms of this privilege. I think consideration should also be given to those of us who are not lawyers and who may not know the niceties of the law and so may be intimidated.
I am very pleased that the hon. member for Peace River brought this forth. He is one of the most honourable members of this House. He is certainly one of those dedicated to law in a very general sense, and to law as it specifically affects parliament.
I think it reflects badly on some members of this House that they have continually neglected to take full advantage of the suggestions of Your Honour with regard to solving some of the problems of the House. As I understand it, Your Honour made the suggestion today on behalf of all members-without making the decision whether or not the judge was in contempt of parliament and whether he had in fact intimidated a member of parliament to a point where he could not conduct his business-of an alternative course that would allow this matter to be discussed, and might eliminate the threat that would be inherent in a very definite decision of the House in finding there was a prima facie case of intimidation.
1 would question the legalistic ability of some members who participated, and would certainly question their ability in other senses in making this argument, who have disagreed with you for, I think, partisan and very selfish reasons. It is not the first time. We had a situation of a similar nature not too long ago.


Mr. Speaker:: Order, please. I hesitate to interrupt the hon. member but I think we ought to be careful here. What I asked the House to do was-while other contributions were being made, and while I had the matter under reserve-to consider whether a reference to the Standing Committee on Rights and Immunities of Members might be a matter of consent. That is a departure for the Chair to take at the beginning of a procedural discussion. I would not want that to be taken as a suggestion that it be done. That is unfair. What I did was to say that it ought to be considered.
There may be all kinds of reasons why people want to take positions, but I think we should be careful to say that the Chair put forward a matter that might be considered on this occasion or any other occasion. I would not want it to be said that I simply observed to the House that the matter might be resolved that way, that in fact it was the way that I preferred or that I suggested. That puts too strong an interpretation on what I was endeavouring to do. I thought that while contributions were being made, and while I had it under reserve, members might want to discuss the possibility of an agreed reference. I do not want that to be taken as a suggestion that I would prefer it that way, however. In fact, if the matter rests with me officially and I have to make a decision on the grounds of privilege, I am quite happy to do so.


William Arnold Peters: Mr. Speaker, I listened to your suggestion and found it to be excellent. I accepted it, as I think many members did, and I think there would have been agreement. I have no legal training, but not long ago I received a letter from
June 1, 1978

a legal firm. It had about 20 names on fancy notepaper, and it threatened to sue me for a number of things that I had said about pensions, not necessarily in this House, but certainly those things have been said in this House as well.
I am not easily intimidated, Mr. Speaker, but I am not very wealthy either. I am not sure that I want to face that battery of lawyers in Toronto, so I have pretty well ceased and desisted from talking about that particular problem. While I would not say I have backed down, I certainly have been cautious.
I am sure that if many of us not trained in the law received a letter of that sort, or an indication in a press release that a judge said, "If you say those things outside the House of Commons I will have you in contempt of court and put you in jail", we would feel intimidated. That is really what happened in this case. Judges do not normally go around explaining why they make a certain decision. Questions were asked why the judge had made a decision in relation to bail and had prevented members of parliament from asking questions about it even in this House. They certainly could not talk to the person who could give a first-hand account of it, even privately outside this chamber, and get the information without the person who asked the question and the person who had the information being in contempt of court. To me, that is intimidation.
It often amazes those of us who are uninformed when we hear one lawyer address another as "my honourable friend", when you can see the knife about six inches long going into the back. It is "my honourable friend", "my honourable associate", "my honourable colleague", and that sort of thing-just mumbo-jumbo.
As a person who is not legally trained, it seemed to me that when the judge made that statement he was only making it in order to intimidate. He does not do that every time. Certainly ever time he makes a judgment he does not give a press release saying why he did certain things, and telling members of parliament that if they refer to it then they could be in contempt of court. I might suggest to the hon. member for Peace River (Mr. Baldwin) that if he should take a train to Montreal and say it out of court-


Gerald William Baldwin: I cancelled one this week end.


William Arnold Peters: -he would now have to wait for that judge to come back from his extended holiday in Greece. I am not suggesting that, Mr. Speaker, because I am damned sure the judge would put him in jail if he did it, if he has the power to do it. Therefore, he is intimidating him. I think for that reason your suggestion, Mr. Speaker, was an ideal one.
I am shocked at these government members trying to defend something that is indefensible, on behalf of the judiciary over which they have no control. They cannot answer questions in this House, they did not appoint these people for whom they are not responsible. It would seem to me they should start worrying a little more about members of parliament who may be intimidated by a judge.
Privilege-Mr. Baldwin
Certainly one of the cabinet ministers, in my opinion, was intimidated by a judge. They damn well think that that cabinet minister had the right to say that the guy needed a pair of glasses, that he certainly did not see a judicial situation very clearly. I think the minister was right. Certainly when he let those companies off, he was wrong. I do not think it is right for them to get up and go to the committee and defend the right of the RCMP to bug a member of parliament and say there is no privilege in that. He really did not get hurt. He did not say anything that incriminated him with his wife so, therefore, it is not a matter of privilege.
I would like the Liberal members of this House to show a little more concern for the individual member who may find himself in a position of being intimidated. While I know the member for Peace River is not being intimidated by this judge, I know he knows that he is making this case on our behalf because it may happen to someone else who may feel just as strongly about the law. I would suggest that it will be a member from Quebec who is being threatened by that same judiciary who will be the next on the list if we do not stand up for the limited privilege that we have in this House which, to me, is only the privilege of being protected against libel in this House. Sometimes we are allowed on behalf of our constituents to say what we think on their behalf, and assume that privilege on their behalf where it is not available to us as ordinary members of parliament on the street.


Mr. Speaker:: Members who have contributed to this discussion have all put forward some very helpful views. As I indicated earlier, I want to give them careful consideration. If the Parliamentary Secretary to the President of Privy Council (Mr. Pinard), after examination of the original text in French, wants to make a further contribution, he ought to have the opportunity to do it, although I would hope he would do it very soon.
I want to reiterate that while I have the matter under reserve, the matter of any kind of agreed reference, as always in matters of this sort, remains open. Maybe some discussion can take place on that. If they do not, I would like to make it clear that when I put that idea forward it is an idea that can be taken under consideration really in every matter of privilege, I suppose. If it materializes, the Chair can be advised, and that is a happy resolution of the matter. If it does not materialize, I think it would be most inappropriate to consider that the mention of it by the Chair would be a preference expressed by the Chair for the resolution of the matter. That, I think, would be most improper. And in that atmosphere it is one that I would not want to contribute to in any way.
To close this matter from discussion at this time we ought to be clear on the documents we have ordered appended. Such as the quality of the copies that are available, I have the notice which the hon. member gave to me. It includes a French text and the translation to which reference has been made. For the sake of accuracy these will be the set of documents to be appended to today's Hansard and printed as a part of it. This clarifies the order that we made earlier, because there was some confusion about what text we were printing, particularly

June 1, 1978
Business of the House
since the original text may be different from the documents we have tabled here today. Nevertheless, for the purposes of today's discussion we agreed to table the document which I now have in my hand and which was part of the notice given to me on this matter by the hon. member for Peace River (Mr. Baldwin).
I will take the matter under reserve, subject only to a further contribution and any other debate that might be provoked by the hon. Parliamentary Secretary to the President of Privy Council.
[Editor's Note: For document referred to, see Appendix.]


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I wonder if 1 could ask a question, in the absence of the government House leader, with respect to the business of the House. Perhaps the Parliamentary Secretary to the President of Privy Council (Mr. Pinard) will be able to answer. I assume, in asking the question, that the list of legislation given last week at this time continues to be the list of the government's priorities. If it has not already been done, can there be a designation by him or someone who has the power to so designate that Monday, June 5, and Friday, June 9, be allotted days in accordance with the informal arrangement that exists?


Yvon Pinard: Mr. Speaker, the hon. member is right in saying that the priority list as established last week by the Deputy Prime Minister (Mr. MacEachen) still holds; we will continue the debate on Bill C-56, and next Monday as well as next Friday will be allotted days.


Walter David Baker: Mr. Speaker, I am sorry the government House leader is not here because there are a couple of matters which came up today that are important. However, I will put them on the record, and he can read them. One was the matter that was raised in the question period about the time which might be set aside for a debate on the matters involving NATO, the Prime Minister's visit to the United Nations, our position with respect to South Africa, and all of those matters that were encompassed within the question period. There was some question as to the time that might be available.
In accordance with this informal arrangement, we have an opposition day, it is a short day but it is a day that is designated for us, on June 14, if my recollection is correct. Would the government be agreeable to giving us a day ahead for the purposes of discussing those matters? I would suggest the day before, June 13, for example, and an appropriate motion could be put on the order paper. We would be prepared to contribute that opposition day for the purpose of making up a two-day debate on foreign affairs, because we take the position there has not been sufficient discussion on that topic.

We can discuss whether it will be the day after, but we make that offer to the government concerning a debate on foreign affairs.
In our judgment the question period is inadequate for the kind of examination that we want and similarly the standing committee is inadequate for the kind of participation we want. I hope the government will be forthcoming in granting us a day so that we can have a two-day debate. I leave that with the parliamentary secretary.
The other matter concerns the veterans legislation. I am glad to see that the Minister of Veterans Affairs (Mr. MacDonald) is in the House. I know he is anxious to bring forward that bill. It is unfortunate that the Deputy Prime Minister is holding that bill to ransom until the tax bill is finished. I do not think the veterans of the country, who have been anxious for that particular bill for some time, should be held to ransom for the tax bill. I repeat the undertaking with regard to that legislation. We will deal with all stages of that bill in one hour on a parliamentary day, all three readings and committee of the whole.
I suggest to the government that we would take part of the Progressive Conservative party's allotted day on Friday, June 9, between four and five in the afternoon, so that bill can be put through just prior to the time the minister goes to Edmonton to attend the convention of the Royal Canadian Legion. I am, of course, prepared to suggest that we might break off debate now on the tax bill to allow it to go through all stages. That is an offer for the minister. I am glad he is in the House. I hope he takes the position he cannot refuse such a generous offer.
I do not know who is in the position to answer for the government today. I do not know whether the government has taken note of the fact that the holiday for French-speaking Canadians, Saint Jean Baptiste Day, falls on Saturday, June 24, when parliament is not sitting. I understand it is to be celebrated on Friday, June 23. Indeed, federal public servants who work in Hull will, I understand, have that day as a holiday.
There is some confusion in the Standing Orders with regard to the celebration of that day. Interestingly enough, the same confusion occurs with regard to July 1 which also falls on a Saturday. I understand the celebrations are to take place on the Monday. The Standing Orders do make reference to the day upon which those holidays are to be celebrated.
The reason 1 rise is that the balance of the public servants will have the Dominion Day holiday on the following Monday. It is important that there be some clarification by the government as to the position of the government, not only for members of the House of Commons, but for the staff of the House of Commons. I would appreciate it if the parliamentary secretary would convey that message, because it is appropriate that the government make that clarification soon.
June 1, 1978

Finally, can the parliamentary secretary tell us when the bill following upon the ways and means motion relating to the small business changes will be introduced?


Stanley Howard Knowles: Mr. Speaker, it is obvious that with regard to two or three matters raised by the hon. member for Grenville-Carleton (Mr. Baker), the parliamentary secretary will have to consult his minister. It may be that we should have some joint discussions, particularly with regard to sorting out the holiday week ends.
I rise mainly to say two things. First, 1 welcome the fact that Monday, June 5, has been or will be designated as an opposition day. I believe it is agreed on this side of the House that that will be our day, and there will be a motion in the name of the leader of this party.
I now come to the question of the bill respecting the basic rate of the War Disability Pension. I may say that in the meetings of the Standing Committee on Veterans Affairs this week when we were on estimates, we had enough discussion on this bill that I can say we would be very satisfied to put it through the House quickly. Certainly an hour will be sufficient time.
Since the business of the day has already been upset, and there is more to come, I suggest that we deal with that bill tonight. We are not going to have much time today for Bill C-56 anyway. I would suggest we deal with it now, only the Minister of State for Science and Technology (Mr. Buchanan) has a statement to make and we will be tied up with that. Then there will be private members' hour.
The Minister of Veterans Affairs (Mr. MacDonald) will be here tonight. The hon. member for Norfolk-Haldimand (Mr. Knowles), who speaks for his party on this issue as I do for my party, and I have discussed the matter and we are certainly in agreement on a very short debate. I do not think we need a House order. Surely our word is good on this, that it will not take more than an hour to put that bill through second reading, committee of the whole, and third reading so that it can be passed and sent to the other place where I believe they can deal with it very quickly.


Yvon Pinard: Mr. Speaker, concerning the Tory House leader's comments about a special debate on external affairs, he was told this afternoon that the question period provided opposition members with sufficient opportunity to ask questions about it. A few moments ago I read the motion moved by the Deputy Prime Minister (Mr. MacEachen) to allow certain committees to sit during the month of June. I find that the committee on External Affairs and National Defence is included in the motion and thus will be allowed to sit during June, providing opposition members with another opportunity to ask questions on the subject, and finally there are still many days allocated to the opposition. However, I take notice of the hon. member's suggestion about a two-day debate where the opposition would sacrifice one day and the government would
Point of Order-Mr. Hnatyshyn
give up one day of its business. I will transmit that suggestion to the President of the Privy Council.
As for Bill C-58, we disagree that we should wait as long as the Progressive Conservative House leader suggests. We want to proceed with this bill on the conditions he specified, that is to pass the bill through all stages within an hour. We do not wish to consider the bill on an opposition day next week, or in two or three weeks, as he suggested. We would rather go ahead with this bill today and, if necessary, tonight at eight o'clock when the minister will be here. The Minister of Veterans Affairs (Mr. MacDonald) is available and as soon as we are finished with another minister's statement on motions, we will proceed with the bill, as long as we have at least an hour, that is as long as there is one working hour left to discuss, for a maximum of one hour, and pass this piece of legislation at all stages.
Finally, as regards the Saint-Jean-Baptiste, we on this side of the House have a deep respect for the French Canadians' feast day and hon. members of the opposition can be assured that we will advise all members of the House at what time exactly the House may adjourn to celebrate with dignity the feast day of our fellow citizens. Finally, concerning bills relating to small businesses, I have been asked when we will proceed to their consideration. I will refer this request to the President of Privy Council, but I want to point out to the hon. member that several of these fiscal measures have already been implemented so that it is far from being as urgent as one might believe at first sight. Mr. Speaker, besides the comments I just made, I will be pleased to convey to the Deputy Prime Minister the suggestions which have been made and I will inform the opposition parties as soon as possible.


POINT OF ORDER
Ramon John Hnatyshyn: Mr. Speaker, I rise on a point of order. It has its basis in the question period today. I intend to be very brief. My point of order relates to an answer given by the Prime Minister (Mr. Trudeau) during the course of the question period today in response to a question I put to him. 1 submit to Your Honour that the Prime Minister misled the House, perhaps inadvertently, by putting words in my mouth with regard to the question I put to him.
During the course of his response the Prime Minister suggested that the position I had put to him was that the actions of Hon. Donald S. Macdonald with regard to his appointment as a director of one or another commercial corporations in Canada did not contravene the guidelines set out by the Prime Minister on two separate occasions. That position is not the position I have submitted to the Prime Minister. I think there

June 1, 1978
Tabling of Documents
are more substantial questions than whether the action of Mr. Macdonald breaches the guidelines or not, and my question to the Prime Minister asked for a review of those guidelines, not whether, in fact, Mr. Macdonald's activities breached the guidelines in question.


BUSINESS OF THE HOUSE
Yvon Pinard: Mr. Speaker, after discussion on the consideration of Bill C-58 relating to the Department of Veterans Affairs, it seems that we could go through consideration of the whole bill between five and six o'clock tonight during the time usually reserved for private members' business. Having discussed with the leader of the official opposition, I would like to ask for the unanimous consent of the House to cancel private members' business between five and six o'clock today in order to dispose of all stages of Bill C-58.


Mr. Speaker:: Order, please. This is a proposition which will undoubtedly be considered between now and five o'clock. In the meantime we have other matters with which to occupy the House.



ROUTINE PROCEEDINGS


[Stage Direction]
Fourth report of Standing Committee on Justice and Legal Affairs-Mr. MacGuigan.

[Stage Direction]
First report of the Standing Committee on Veterans Affairs-Mr. Flynn.
[Editor's Note: For texts of above reports, see today's Votes and Proceedings.]

Hon. Judd Buchanan (Minister of Public Works and Minister of State for Science and Technology):: Mr. Speaker, under the provisions of Standing Order 41(2) I should like to

table two documents in each of the official languages dealing with the state of research and development in Canada.


MINISTER'S STATEMENT ON RESEARCFI AND DEVELOPMENT
J. Judd Buchanan: Mr. Speaker, with reference to the two documents which were just tabled, may I say that one of them is a discussion paper dealing with research and development in Canada in which a number of long term issues and policies are presented. It is intended to stimulate an exchange of views among the research sectors prior to the proposed federal-provincial ministers' conference on industrial research and development in the fall of 1978. The other is a document informing the House of a number of specific objectives and immediate measures the government is adopting to increase the level of research and development in this country.
The objectives are:
1.	As a new national policy, to reach a target of 1.5 per cent of the gross domestic product for research and development expenditure in Canada by 1983.
2.	To use federal government procurement to stimulate industrial research and industrial development in Canada.
3.	To encourage greater private sector spending on research and development and to create more job opportunities in, and through, science and technology.
4.	To open federal laboratories to the private sector in order to encourage greater technology transfer between government and business.
5.	To create industrial research and innovation centres to assist industry, particularly small business and private inventors, in the development of new products and technology.
6.	To assist in the development of centres of excellence on a regional basis, both to build upon the diverse strength of Canada and to ensure local expertise and initiative.
7.	To increase funding for university research in areas of national concern.

If we are to secure the future that Canadians expect, the attainment of these objectives is essential. A healthy R and D effort in Canadian industry is a necessary component of success in an international trading environment which is becoming increasingly competitive. At present, the level of industrial R and D in Canada is significantly lower than it should be. A number of measures have already been taken by the Government to correct the situation. They include: increased tax incentives for industrial research announced in recent budgets; increased funding of a number of direct assistance programs in 1978-79; extension of the contracting-out policy; increased efforts at transferring technology from government laboratories to industry; and introduction of an employment program in industry for highly-qualified manpower.
June 1, 1978



Further steps are to be taken as follows:
1.	The procurement practices of the federal government will be changed to ensure their effective use in support of industrial research and industrial development in Canada.
2.	The government is expanding its contracting-out program by adding SI.5 million in each of the next two years to the unsolicited proposals fund of the Department of Supply and Services which is designed to allow industry to meet government research needs.
3.	As a further stimulus to employment in research and development, an additional program involving $3 million this year will be instituted for highly qualified manpower under Canada Works. It will create jobs for unemployed scientific and technical personnel in the performance of research projects in universities at the request of Canadian firms. It complements the science and technology employment program in industry which I announced in April, and is directed especially at small businesses which do not have an R and D capacity of their own.
4.	Increased co-operation between government and industry and between universities and industry will be fostered through the establishment of institutions and the reinforcement of other mechanisms specifically devoted to the transfer of ideas, innovations, information, skills, manpower and technical capacity; by the addition of $5 million to the Program of Industry-Laboratory Projects (PILP) of the National Research Council and the extension of the program to other government departments, and by the expansion of the National Research Council's technical information service for small businesses through the employment of senior students in science and engineering. An amount of $350,000 will be directed to this program in the current year.
Increased co-operation will also be fostered by the establishment of a clearing-house role for Canadian Patents and Development Limited to facilitate the transfer of information between industry and government laboratories; by further emphasis on the transfer of technology to industry as an objective of all government research activities; by the establishment, in consultation with the provinces, of up to five regional university-based industrial research and innovation centres over the next few years. An amount of $2 million will be made available for the purpose this year.
5.	The establishment of centres of excellence across Canada responsive to national needs. One of the main objectives of the centres will be to achieve better integration of government, university, and industrial research activities. They will be based on the natural and human resources of each area so as to assist in the further development of the industrial capacity of each region. As one illustration, the new ice tank of the National Research Council will be located in St. John's, Newfoundland, within the developing complex of facilities for cold water engineering. The government will spend $6.8 million this year toward the establishment of such centres. Their successful establishment and operation will require the closest
Research and Development
co-operation between the provinces, industry and the universities.
6.	The budget of the three granting councils for funding research will be increased by $10 million each year. This increase will be for research efforts in areas of national concern and will supplement the funds provided to the councils for this purpose in 1977-78.
The details of the foregoing measures can be found in the document entitled "Measures to Strengthen and Encourage Research and Development in Canada".
In addition to the measures already announced, very important initiatives will be taken by other departments in the area of research and development. For example, the Department of Fisheries and the Environment, the Department of National Defence, and the Ministry of Transport all have major interests in these areas. In particular, my colleague, the Minister of Communications (Mrs. Sauve), has significant proposals which she will be announcing in the near future.
In addition, I believe these measures will complement and support the initiatives to strengthen small business in Canada proposed last week by my colleague, the Minister of State (Small Business) (Mr. Abbott).
In view of the increasing evidence that research and development intensive companies grow more quickly, have higher productivity, better price performance, and are competitive in international markets, these policies and measures I have announced will help to strengthen our economy and provide jobs now and well into the future. I believe also that the policies and measures lay a good foundation for a new spirit of co-operation among government, universities, and industry.


Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, in terms of our gross national product we have the worst record of any western nation when it comes to investing in research and development. We invest less than 1 per cent of our gross national product, while our objective, as set out by the Senate Committee on Science Policy, should be 2.5 per cent, and our goal must be to achieve that level by the mid-1980s. This is the fraction of the gross national product now spent in the United States, the United Kingdom, and West Germany, and achieving this goal will require a major commitment of our natural resources and significant new directions in science policy. Even then we shall arrive only at the same commitment now enjoyed by our competitors.
The minister's identification of 1.5 per cent of gross national product-the written release refers to gross domestic product-for our research and development expenditure in Canada by 1983 is like the awakening of wisdom, but the limited objective and his shotgun approach in announcing a number of recycled old policies-some of them unrelated- cause me to be concerned that the wisdom is shortlived.
Most certainly, we hope for the success of every single program the minister has announced, and only time will tell whether the statement, which is more general than specific, is more cosmetic than real.

June 1, 1978
Research and Development
It is important for us to refer to the ministry of state summary of federal science activities for 1978-79 and refer to figure 6, federal government expenditures by type of science and performer, to see the effect of the federal government commitment to the make or buy policy, and to contracting out to industry functions which otherwise would be performed in government laboratories. Intramural activities in 1976-77 are shown at $460.8 million. In 1977-78 they rise to $511.1 million. In 1978-79 they increase to $567.1 million. At the same time the research and development expenditures for industry in 1976-77 were $222.3 million, in 1977-78 $214.8 million, and in 1978-79 $217.6 million. With the make or buy policy we still have an increase in intramural activity and a decrease in industrial research and development expenditures by this government.
Another amazing feature of this same report is that the government has spent over $1 billion on research and development. Where are the results, and what is the direction?
So, how do we stimulate research and development in the private sector of our economy? The Science Council suggests a 25 per cent tax credit on all current and capital expenditures, with carry-forward provisions, in addition to the current shared-cost programs.
The Senate committee suggested that we restore the tax incentive for industrial research and development based solely on incremental research and development expenditures over a base period.
Another representation from the scientific community supported the 25 per cent investment tax credit, increased at the rate of 5 per cent per year until a satisfactory national level of industrial research and development is attained. This body also recommended a moratorium on the capital gains tax for new technology-based ventures for the initial five years of operation. A reduced corporation tax rate for new technology-based industry based on employment growth was also suggested.
The president of Northern Telecom supported a 25 per cent investment tax credit with a ten-year commitment, and the Canadian Manufacturers' Association supported the same 25 per cent tax credit, but with the asset value not reduced for depreciation purposes.
In its great wisdom the government rejected all these recommendations and chose the additional allowance scheme of 1962, featuring the 50 per cent special allowance of a three-year moving average base involving both capital and current expenditures lumped together.
This special 50 per cent allowance was replaced about ten years ago because it was alleged by the government to be of no benefit to new firms and those not in a taxable position which needed the assistance most. Small firms receive less of the benefit than larger ones, because the larger the rate of tax applied to the pre-tax allowance, the greater is the benefit. The tax credit eliminates this type of discrimination by the tax rate against small firms.
It is not enough to point to the failures of the government without offering suggestions, and I do have some proposals to
make. The government must be convinced and clearly indicate to all segments of our economy that it is convinced of the importance of research and development as an essential base for economic advancement, and that it will encourage the transfer of scientific knowledge and technology in a co-operative effort between universities, governments, and industries. It is not convincing when it comes out with a series of ad hoc policies, recycled proposals, and rejected tax schemes. Neither is it convincing when every few days we get another announcement of a new program. What we really need is a coherent, clearly stated national policy underlining a serious commitment to development.
The government must increase its support for basic and applied research and development in Canada, and with our present facilities-starved and dehydrated by government policies-reaching the level of 2.5 per cent of our gross national product that will not be easy, but it should be our goal, and it has been expressed as the goal of this party in this House by our leader.


Some hon. Members:: Who?


J. Robert Howie: While government has an important continuing role in research and development funding, especially in areas like agriculture, we need a special effort to increase investment in innovation by Canadian industry. The sad fact is that General Motors, IBM, and Ford each spend more on research and development in the United States than do all Canadian companies taken together. A significant increase in the research and development tax deduction must be a first priority.
Since our ability to produce food is a precious national asset and we own one third of the world's fresh water supply, we must give particular priority to strengthening our agricultural research and development program. The federal government spends about one tenth of its research and development funding on agriculture. The Agricultural Institute of Canada has warned us that this situation threatens Canada's position as a major world producer and supplier of food.
As the Science Council of Canada has pointed out, the key to innovation is to build and maintain an effective team of human talent. This involves our universities in an expanded role, and it means developing a special incentive for new employment in industrial research, design, and development.
Our policies too must be more than passive or responsive. They must be geared to promote innovation where Canada is best equipped to compete with the rest of the world and by companies which have a clear and unfettered commitment to Canada's interests. The creative talent is there. What is not there and what must be there is national leadership to match that creative potential with our economic objectives. What we need is a focus of all departments of government on the problem of research and development, and not a cosmetic shotgun approach of recycled ideas.


Mr. Deputy Speaker:: Order, please. It being five o'clock, I must at this time interrupt the proceedings to proceed to the
[Mr. Howie.l
June 1, 1978

consideration of private members' business. However, by unanimous consent the House may agree not to see the clock so that we can complete proceedings under statements by ministers. If hon. members feel we can complete the business in a short time, we could come back to private members' business following that. I will invite the parliamentary secretary to move a motion reflecting whatever agreement has been reached. Is that agreed?


Some hon. Members:: Agreed.


Yvon Pinard: Mr. Speaker, I would like to state clearly that consideration of Bill C-58 will have to end at six o'clock and that by that time the bill must have gone through all stages so that at eight o'clock tonight we can proceed to consideration of Bill C-56 as previously agreed.


Mr. Deputy Speaker:: The parliamentary secretary requests the Chair to put his proposal before the House. This means that we would not see the clock but complete the proceedings under statements by ministers, following which we would forgo private members' business and proceed directly to Bill C-58, on the understanding that all stages of the bill will be completed by six o'clock.


Stanley Howard Knowles: Yes, Mr. Speaker, that represents the agreement amongst us. I think that part of the agreement is that if precisely at six o'clock we have not finished because we have lost more time, we will not see the clock, any more than we have seen it at five o'clock.


Walter David Baker: That is certainly agreeable Mr. Speaker.


Mr. Deputy Speaker:: It is agreed and so ordered.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, the statement by the minister a little while ago, and the announcement by the Minister of National Health and Welfare (Miss Begin) earlier today during the question period that the amount of money to be allocated for medical research has been increased by 11 per cent rather than the 5.5 per cent indicated in the estimates, demonstrate that even this government listens to representations if they are made loud enough and often enough, and when an election is coming up.
I must admit that again I was amazed by the statement made by the minister because he succeeded in doing something I did not think he could do. He succeeded in making a statement which sounded very good but which, when the fine print was looked at, proved again that the government really does not understand the needs with regard to scientific research. The reason it sounded very well was obviously that
Research and Development
the minister's speech writers have read documents such as the May issue of the bulletin published by the Canadian Association of University Teachers, which concentrates on the problems of scientific research, and the resolution passed by the 1977 convention of the NDP which went into detail about scientific research and what needed doing. That was in the general things they said, but when it comes to doing things, we find that the minister and the government propose to do very little more than they have already done.
The minister states that the government's target for the next five years is to raise the percentage of the gross domestic product from the present less than 1 per cent to 1.5 per cent expenditure on scientific research by 1983. The fact is that at present countries such as the United States, the United Kingdom, West Germany, and the Netherlands are already spending 2 per cent or more of their g.n.p. on scientific research. So the minister is proposing that five years from now we will still be spending less of our g.n.p. than those countries are already spending.
I point out to the minister that our 1977 convention stated as follows:
Increased financial support for basic and applied research and development to a level of at least 2.5 per cent of the g.n.p. within three years.
That is 1 per cent more than the minister is proposing, and in three years rather than five.


J. Judd Buchanan: That is impractical.


David Orlikow: That is what I expected from the minister. The government proposes more tax incentives, increased assistance to direct assistance programs, extension of the contracting out policy, and transfer from government laboratories to industry of technology. All of these have been tried before and they have obviously failed to meet the needs of this country for increased emphasis on scientific research.
The government proposes to increase funding for university research, but the amount indicated in the background papers of $20 million is so small that I consider it to be an insult to the university scientists of this country.
The government proposes the creation of industrial research and innovation centres, financial support for employment of scientific research personnel, and a number of other proposals, all which are small steps in the right direction, which we support. But the proposals to encourage greater private sector spending on research and development through increased tax incentives have been complete failures. Those failures go at least as far back as when scientific research came under the jurisdiction of the former member for Westmount, Mr. Drury, and I think even this minister knows how the scientific community assesses that minister's regime with regard to scientific research.
Between 1968-69 and 1975-76, research and development expenditures fell from 5 per cent of federal expenditures to less than half of that, to 2.4 per cent of federal expenditures. By 1976 actual government expenditures on research and development had fallen to less than .5 per cent of the g.n.p. Just

June 1, 1978
Research and Development
compare that with what other countries are doing. The proportion of the g.n.p. spent by the federal government for basic research has steadily decreased since 1969. In 1976 it was an appalling 0.07 per cent, while in Belgium it was 0.3 per cent, in Germany 0.3 per cent, in France 0.4 per cent, in Japan 0.4 per cent, and in the Netherlands 0.6 per cent of the g.n.p. In other words, Canada spent about one quarter of the average support level of these western European countries and Japan.
The Lamontagne committee, which looked into the whole question of science, reported that Canada and Scandinavia, which have comparable populations, have about the same number of researchers in universities, yet Canada has 9,000 more people than Scanadinavia in government laboratories and 20,000 fewer in industry. What the minister is proposing is more concessions to the industrial community which has failed thus far.
The minister says I have it backwards. I do not. I said that we have 20,000 fewer people in industry than Scandinavia.


J. Judd Buchanan: That is our problem.


David Orlikow: What the minister is proposing simply will not do. The background papers tabled by the minister indicate that Canadian research and development effort over-all is "low compared to other industrialized countries". Later on in the same paper it is stated "An important component of the problem in industry is the high degree of foreign ownership". Yet we get proposals for more incentives to these corporations which have failed so miserably until now in fulfilling their responsibilities.
Why has this happened? I think the reasons include the following:
(1)	The fact that so much of Canadian industry is in the resources area which requires little R and D. Canada has one of the lowest percentage of workers, in the manufacturing area (23 per cent) as compared to West Germany's 38 per cent, the U.K.'s 36 per cent and the U.S.A.'s 34 per cent.
(2)	Canada has the highest degree of foreign ownership and control of its industry among the OECD countries. The major part of the R and D efforts of these companies increasingly takes place in the head office country. A classic example of this situation is Ford of Canada which had sales of $4.8 billion, a profit of $126 million, yet carries out no R and D in Canada and employs not one science Ph.D. in all its Canadian operations.
If we are going to deal with this matter of scientific research seriously, we must deal with the situation involving multinational foreign owned corporations. Legisl ation is required to ensure that these companies invest a significant percentage of their profits earned in Canada in research and development conducted in Canada.
The ability of this country to function as an independent nation will depend on our capacity to develop a strong secondary manufacturing industry based on products and ideas developed from heavy investment in research and development by industry. If we are to do that we must make scientific research by governments, universities, and industry a must, not just a choice that can be ignored at will as it has been in the past, largely by multi-national controlled industry.

[ Translation]


Mr. G6rard Laprise (Abitibi):: Mr. Speaker, I would like to say a few words about the statement the minister just made which is a small step in the right direction, but a rather timid one when one considers the need for research and development in Canada.
Indeed, during a debate on March 7 last several members told the government about the needs of universities in research and development. On that occasion, I said to the minister and to the government that for several years Canada had been lagging behind in the field of research and development when compared with OECD countries and that for several years Canada had even been behind Italy which, in 1975, spent more than 1.1 per cent of its gross national product on R and D whereas Canada was content with spending 0.8 per cent only of its gross national product. Mr. Speaker, obviously we have lagged behind in research and development, and the increase proposed tonight by the minister, however interesting it may be, is not enough to make up for lost time. I think we should do better than that if we are to reach the level of industrialized countries, since we do consider ourselves members of that great family. This is not the first time that we take position in this regard and I would like to remind the minister that last year, in November 1977, during a Social Credit party convention in Drummondville, Quebec, a resolution in that vein was passed, and if I may, Mr. Speaker, 1 would like to read this resolution once again, and I quote:
That a Social Credit Party of Canada government would stimulate private (university) research by establishing a five-year science policy in line with the three following basic principles: (1) the necessity of an adequate budget; (2) the urgency of a long term, that is three to nine year, science policy for Canada; and
(3)	the presence of a researchers' representative on the grants committees.
I think that this third point is also extremely important. Only recently, a few weeks ago as a matter of fact, during the distribution of allocated votes, there were some pretty fierce confrontations and I believe that the presence of researchers' representatives on the grants committee is indispensable to ensure that the grants be given out properly and the money go where it should.
Mr. Speaker, the minister also said that some departments would be spending more than others for research and development in their own field of endeavour. That is well and good, but I think that if we want to help small business, that can only and most easily be done through departments. But I also believe that by entrusting the research to our universities, which have the proper equipment and the qualified staff, we will be able to make interesting discoveries, which will put Canada on an equal footing with any other country in the world and we will no longer need to borrow from other countries the innovations we need. We will be able to do so ourselves and we will help the expansion of research throughout the world.
June 1, 1978


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Yvon Pinard: Mr. Speaker, the following questions will be answered today: Nos. 1,159, 1,498, 1,592 and 1,607.


Mr. Marshall: 1.	What is the budget of the CBC "Ombudsman"?
2.	What is the number of staff of the CBC "Ombudsman"?
3.	(a) How many cases per month are received by the CBC "Ombudsman" (b) how many are (i) accepted (ii) rejected?


Hon. John Roberts (Secretary of State):: I am informed by the Canadian Broadcasting Corporation as follows: 1. It has not been customary to require the CBC to provide such details of its internal management and administration as the budgets of its programs. The background to this custom is explained in detail in the reply to question No. 2,530, May 22, 1975.
2. 21.
3.	(a) and (b) A varying number of potential cases are received each month, ranging from an average of 700 a week in peak season to an average of 50 a week in late summer. Since "Ombudsman" began in January, 1974, approximately 38,000 pieces of mail of all kinds have been received. A portion of that total consists of audience comments on the program. Of the total pieces of mail received, more than 11,000 were cases and, of these, 208, or 1.8 per cent, were telecast on the weekly 30 minute television program. From the outset of program it was felt that "Ombudsman" could not offer to help people who wrote and then help only those whose cases were chosen for television, discarding the rest. "Ombudsman" has, therefore, been a television program, telecast from October to April, as well as a service carried on throughout the year. All mail is acknowledged and all cases are logged and filed under a numerical-alphabetical system. The federal Law Reform Commission's 1975 report on "Ombudsman's" case files broke down the process of disposition and showed that "Ombudsman" was able to be helpful in 68.24 per cent of all cases. This help was provided by referring the complainant to an agency competent to handle the complaint, by clarifying the complainant's rights, by speeding up the government process, or by sometimes leading to a reversal of an official decision.


Mr. Jones: 1.	Who was recently appointed to the position of Administrator, Canadian Surface Transportation Administration?
2.	What are the duties and responsibilities of this position?
3.	What are the recent appointee's qualifications for this position?
4.	Does the previous work experience of the recent appointee in any way relate to his/her new position?
Order Paper Questions


Hon. Otto E. Lang (Minister of Transport):: 1. Mr. R. J.
Giroux.
2.	Under the general direction of the deputy minister and the senior assistant deputy minister, the administrator, Canadian Surface Transportation Administration, directs the formulation and implementation of the surface transportation policies and programs and the management of all operational, developmental and regulatory activities of the Department of Transport in support of surface transportation. In discharging these duties he consults with other administrators and assistant deputy ministers in the department and is assisted by subordinate directors general responsible for planning and coordination, highway, railway, and water transportation.
3.	Mr. Giroux has a Bachelor in Commerce (Economics) and a Masters degree (Labour Economics) from the University of Ottawa. He has research and line management experience gained through progressively more senior positions in the Public Service, including director general Ontario region, DREE, and assistant deputy minister, Department of Fitness and Amateur Sport and Department of National Health and Welfare.
4.	Yes.


Mr. Brisco: Has an application been made to the Minister of Transport under the Navigable Waters Protection Act for a licence or permit to obstruct the Kootenay River at or near Canal Flats, British Columbia to construct the Kootenay River Diversion by B.C. Hydro?


Otto Emil Lang: The Minister of Transport is not in receipt of an application by British Columbia Hydro for approval under the Navigable Waters Protection Act to undertake works in the Kootenay River at or near Canal Flats, province of British Columbia.


Mr. Elzinga: Was a newspaper advertisement published by the Marketing Division of the Post Office Department entitled "What advertising medium allows you to reach 98 per cent of your prospects with a single message? Direct Mail!" and, if so (a) by province, what are the names of the newspapers which published it (b) how often did it appear in each newspaper (c) what was the cost per advertisement (d) what was the total cost of publishing the advertisement?


Hon. J.-Gilles Lamontagne (Postmaster General):: "What advertising medium allows you to reach 98 per cent of your prospects with a single message? Direct Mail!"-was not strictly a newspaper advertisement as the question would indicate. This advertisement, and one other of the same direct mail campaign were placed in national publications and subsequently placed in the business sections of daily newspapers where it was felt the national papers lacked market penetration. The media was scheduled as follows: all insertions carried in the month of March, 1978. (a) and (b) Ontario: Financial Times (1,000 li), 4 insertions; Financial Post (1,200 li), 3 insertions; Stimulus, 1 insertion; Marketing, 3 insertions;

June 1, 1978
Order Paper Questions
Globe and Mail, 4 insertions. Quebec: Les Affaires (830 li), 3 insertions; Publicitaire, 1 insertion; Le Devoir, 4 insertions. New Brunswick: Fredericton Gleaner, 4 insertions; Moncton Times Transcript, 4 insertions. Nova Scotia: Halifax Chronicle-Herald-Mail Star, 4 insertions. Newfoundland: Saint John Telegraph Journal-Evening Times Globe, 4 insertions, (c) See part (d) of this reply, (d) Total cost, placement and production of the two advertisements-$54,281.40.


Yvon Pinard: Mr. Speaker, if question No. 520 could be made an order for return, that return would be tabled immediately.


Mr. Mazankowski: 1.	What are the names of all the companies who placed bids on the ten train options as a result of a tender call by DOT for new rail equipment on July 4, 1976?
2.	(a) What are all the factors, including cost, that were taken into consideration in the awarding of the tenders (b) what was the weighted-average or similar type of quantification that was given to each factor in each bid?
3.	What was the (a) amount (b) date (c) purpose of any grant or loan or similar kind of offer, if any, that has been given to Bombardier-MLW Ltd. of Montreal, since 1970 by any department, agency or Crown corporation?
4.	What was the (a) amount (b) date (c) purpose of any grant or kind of offer, if any, that was given to the companies listed in Part 1 since 1970 by any department, agency or Crown corporation?
5.	(a) Of the 1500 man-years of work to be spread over a three year period arising from the $90 million contract to Bombardier-MLW Ltd. of Montreal, what are the job locations and number of man-years assigned to each location that will serve this contract (b) are any of the job locations in a DREE "designated area" and, if so, what is the area and what is the annual unemployment rate for each area?
Return tabled.


Mr. Deputy Speaker:: The questions enumerated by the parliamentary secretary have been answered. Does the House agree that question No. 520 be made an order for return?


Some hon. Members:: Agreed.


Yvon Pinard: 1 ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Deputy Speaker:: Does the House agree?


Some hon. Members:: Agreed.
[Mr. Lamontagne.)



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Northwest Territories (Mr. Firth)-Northern Affairs-Funding of native organizations for land claims negotiations; the hon. member for Hillsborough (Mr. Mac-quarrie)-External Affairs-Appointment of ambassadors to and by foreign countries; the hon. member for Brant (Mr. Blackburn)-Industry-Canada-U.S. auto pact-Equitable sharing of benefits.



GOVERNMENT ORDERS


Daniel Joseph MacDonald: that Bill C-58, to amend the Pension Act and the Compensation for Former Prisoners of War Act, be read the second time and referred to the Standing Committee on Veterans Affairs.


Mr. Deputy Speaker:: Order, please. The motion as it appears on the Order Paper states that the bill is to be referred to the standing committee. Is it agreed, by unanimous consent, to conform with an agreement already made, that the motion be amended in order that the bill will be referred to a committee of the whole?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: The amended motion is then as follows:


Daniel Joseph MacDonald: That Bill C-58, to amend the Pension Act and the Compensation for Former Prisoners of War Act, be read the second time and referred to a committee of the whole.


Daniel Joseph MacDonald: Mr. Speaker, this bill receiving second reading today has been a major concern of Canadian veterans for some time. However, it has been an issue that had to be considered from every aspect.
We all realize that legislation which affects veterans does not remain static. It requires frequent re-examination and constructive review. This procedure has been a prime concern
June 1, 1978

for many people in the Canadian Pension Commission, the Department of Veterans Affairs, and in this House. I am pleased this bill will receive quick passage, and I reiterate the fact that this increase is significant at a time when we must guard against overspending, and demonstrate to the people of Canada our concern in the area of financial restraint. Our Canadian veterans are deserving of this addition to the automatic increases provided under the Pension Act each January in accordance with the consumer price index.
Bill C-58 is a recognition of the service rendered by our Canadian veterans for their country, and a recognition by the Government of Canada of the sacrifice made by, not only the soldiers, sailors, airmen and women of Canada's wartime forces but also by the wives, widows, dependants and orphans of those who gave so much for this nation.
Earlier this year increased benefits were provided for first world war veterans who were prisoners of war, and a smaller group, mostly members of the wartime RCAF who evaded capture after finding themselves in enemy territory. We also improved the situation for some of our servicemen who escaped from prisoner of war camps. Compensation for these first world war prisoners, evaders and escapees now is provided under the same basic terms as for the second world war POWs of Germany and Italy. The fact that parliament acted so quickly on this bill indicates our continued awareness of the debt of gratitude owed to this group of very special Canadians.
I would like to mention at this point the support and advice my department has received in the past on this subject and on others from the veterans' associations of Canada. The Royal Canadian Legion, for instance, through its representations to me by way of briefs and resolutions, has influenced the care and well-being of Canadian veterans down through the years. The National Council of Veterans Associations through its concern for its members, our veterans, has been a valuable source of information and guidance for me in pursuing the goal of better and more appropriate legislation in the best interest of veterans. Their organizations speak with a powerful voice that always makes itself heard.
This legislation, Mr. Speaker, marks another indication of the responsibility we have as Canadians to realize the wants and needs of a segment of our population, the survivors, the maimed, the bereaved of world wars and the people of our nation who will be marked by the devastation of war to the end of their lives. Widows and orphans are as much victims of war as our soldiers, sailors, and airmen. Over the past years we have attempted to assist these men and women who gave so much in a time of need, but we must not sit back and congratulate ourselves for what we have accomplished. Rather we must constantly review and update what we have accepted as our responsibility, our debt.
Successive Canadian parliaments have shown, and this one is no exception, that party lines evaporate when the veteran is involved. The success I have on behalf of veterans' legislation depends, not on opposition to their demands, not on political differences, but on the available resources of the Canadian people which are allocated on a priority basis. Happily the
Pension Act
Canadian people have placed the veterans' needs at a reasonably high level.
There has been tremendous growth in veterans' benefits over the past few years. I am proud of this fact, and grateful at the same time for the recognition by this government of its responsibilities along this line. The nature and direction of programs and legislation designed and administered by this government demonstrate that our efforts are rightly directed toward those we seek to serve, the Canadian people, and, in this particular case, the Canadian veterans.
When they speak, our veterans do so eloquently and responsibly, certainly not from a politically partisan viewpoint, but more in the role of advisers and guides to those who frame and administer legislation. They have always kept the welfare of Canada in the forefront of their aims, while working for the proper care of all who served their country in time of war. Their knowledgeable expression of the hopes and aspirations of veterans has been met, by way of return, by willingness on the part of this government to listen and to assist whenever possible. As a Canadian I feel this is the way it should be. I know also that my colleagues have this same sense of responsibility, all share this firm desire to provide a tangible expression of national gratitude tempered only by our country's ability to pay. The effect of representations to my department, and the efforts of the dedicated men and women of my portfolio have resulted in a comprehensive program of legislation for veterans that not only equals but surpasses in a number of cases any country in the world.
This bill will enhance the lifestyle, augment the income, and generally improve the situation of a great number of deserving Canadians. We have many responsibilities. Some of these deal with the economy, others with the preservation of our Confederation. The one before us today is our responsibility for the well-being of a very special segment of our society. 1 am pleased that parliament so readily accepts that responsibility toward Canada's veterans.


Mr. William Knowles (Norfolk-Haldimand):: This is a moment in the House of Commons, Mr. Speaker, that we have awaited for two, almost three years. We have been pressing the minister and the cabinet to give us this moment in the House of Commons, to give speedy passage to the bill before us, Bill C-58.
I want to compliment the Minister of Veterans Affairs (Mr. MacDonald) and his staff for producing the legislation we are about to pass here in the House. This gives me an opportunity to say a special word about those loyal public servants in the Department of Veterans Affairs who labour hard and long to help those who have given so much of themselves, who kicked great holes in their lives when they volunteered for the service of their country. Some came back, as the minister said, broken men, and certainly broken lives, and this is only a small way that we have of recognizing their great contribution to this country.
As I began to say a moment ago, the staff in the department have always been most co-operative with all members of this
5972

June 1, 1978
Pension Act
House when they have brought to them specific problems related to their department. I think I can say on behalf of those members that we certainly appreciate that. I also echo the sentiments of the minister when he praised the men who gave so much for their country, and I pay tribute to the people on this side of the House who have pressed the minister and his government to get this legislation in the form in which we have it. I pay tribute to my predecessor as the critic here on our side of the House, the former member for Humber-St. George's-St. Barbe, who gave a great deal of his time and effort to do this, and to my colleague, the hon. member for Winnipeg North Centre (Mr. Knowles), who joined often with the member for Humber-St. George's-St. Barbe to press the minister to do this.
Personally, I know that the minister has wanted to see this legislation passed for a long time. He is a veteran who gave a lot of himself in the cause of Canada, and it is not always his fault that we do not have the legislation when we want it. We hope, however, we have helped him in persuading his cabinet to see the light of day and put us where we are now.
There are one or two concerns I would like to express about this bill. One is the fact that there is no provision in it for an annual review of the right to a disability pension. When the legislation was first introduced it was thought that indexing according to the consumer price index would keep the basic rate of pension in line with the five categories of unskilled labour in the public service, but as experience has shown, that has not happened. There is a very distinct possibility that in the years ahead we will find ourselves in the same situation we are in today. I would have thought it not beyond human ingenuity to include a clause to ensure that the basic rate of pension could be reviewed perhaps on an annual basis, and certainly on a biennial basis, to see that it keeps up with the categories I have mentioned.
Mr. Speaker, this gives me an opportunity to express concern and hope that the government in their review, which the minister assures us is always before them, will find some means of giving the survivor's pension to widows of pensioners who received a pension of less than 48 per cent. I know there are a few who receive benefits if the death resulted directly from war injury, but there are a great number who, when the veteran dies, if his disability pension was less than 48 per cent, are simply cut off.
We have asked for this over and over again. In committee yesterday and this morning the minister assured us that the matter was under review. He cited the cost to the Canadian taxpayer as one of the reasons why it is not being done. Mr. Speaker, when you look at some of the frivolous grants that are sanctioned by this government, it is hard not to believe that some of the money could be passed on to more worthy causes such as those I have mentioned here. I know the minister has this matter well in mind and we give him our pledge of support if in the next few months or in the next year he brings in a bill
[Mr. Knowles (Norfolk-Haldimand).l
to correct the situation, which will get the same speedy passage as the bill before us this afternoon.
There are many other issues we could talk about today, Mr. Speaker, but on this side of the House we have given an undertaking that the bill will be passed within the hour. I wish to see that happen so I will not take up the other issues at this time.
The convention of the Dominion Command of the Canadian Legion will take place soon in Edmonton. I know that the minister will go to the convention and tell them what we have done for the veterans by passing this bill. I hope he will give some credit to the opposition for this because we have worked very hard to get it through. We will support him if he says that!
That is all I have to say, Mr. Speaker, and we hope for very speedy passage of this bill.


Stanley Howard Knowles: Mr. Speaker, there are times when in a particular way this parliament speaks in the name of the Canadian people. I suggest this is one of those occasions. It is good that we do not forget the sacrifices made by our veterans and the suffering that many of them still endure. I am glad that despite the passage of time we do not forget our veterans, and that today we are responding to the request to restore the basic rate of war disability pension to the level calculated by the formula agreed to in 1973.
Like my colleague and namesake who has just spoken, we in this party have been very anxious to get this bill and we are pleased to get it, so we have no intention of taking up time at this stage. We are prepared to go through second reading very quickly, put it through committee of the whole and give it third reading before we rise for the dinner hour.
The minister has paid tribute to those who helped him get this legislation-to members of parliament of all parties. We are aware that he has needed a good deal of help because of some of those he has to deal with in cabinet. Even though we attack him and criticize him at times because things seem to move so slowly, I think he deserves our commendation for having got out of his cabinet colleagues additional money to bring pensions up to the amount indicated in this bill.
1 join with the hon. member for Norfolk-Haldimand (Mr. Knowles) in commending also the Royal Canadian Legion and all the organizations that are part of the National Council of Veterans Associations of Canada for their persistent campaign, particularly since last fall. I know they are delighted that the campaign has been successful.
Like the hon. member who just spoke, one or two things about the bill leave me less than satisfied but not to the point of wanting to hold it up. I still say that in 1973, when it was agreed to put the basic rate of the war disability pension at a level equal to the average take home pay of five categories in the public service, that provision should have been written into the bill so that each year, as that average take home pay increased, the basic rate of pension would have increased accordingly. The government did not see fit to do that in 1973.
June 1, 1978

Instead, it put the proper figures in for 1973 but left in the bill the provision that the increases for the following years would be governed only by the rise in the consumer price index. As we all know, a gap developed which at times was as high as $500 per year-in fact, more than that.
What the minister is doing by this bill is establishing again the actual dollar figure that represents the average take home pay of those five categories at the present time. We are back where we were in 1973; indeed, we are back where we were in 1920 or 1921 in terms of principle. Because the escalation clause in the act has not been changed by this bill, it means that next year and the year after the escalation will again just be the rise in the consumer price index. That will not create a problem for a year or two but three or four years ahead we will have to go through this all over again.
I hope we can do away with the necessity for doing this every four or five years by writing into the act the provision that the basic rate of the war disability pension shall be the average take home pay of those five categories, whatever that average may be. As I say, I hope we will get there some time soon, but for 1978 and 1979 the problem has been solved. We welcome this and we congratulate the minister.
As I said earlier, we had quite a bit of discussion about this in the Standing Committee on Veterans Affairs even though we did not have the bill before us. I made one particular plea to the minister which I repeat now, and 1 know he will do his best about it. The way this legislation is set up, if a veteran is receiving a small disability pension so that he also gets something under the War Veterans Allowance Act, the bill will not benefit him. He will get an increase in his disability pension but the means test ceiling on the war veterans' allowance will cause that to be cut back and he will end up with the same total.
There are a few items which the War Veterans Allowance Board has found it can ignore for purposes of that means test ceiling, such as certain increases in old age security and the guaranteed income supplement. I urge the minister to take this up with the War Veterans Allowance Board and find a way whereby, in the case of veterans receiving the disability pension and war veterans allowance, they get the benefit of the increase instead of having it given to them with one hand and taken away with the other.
That will also apply to widows on war veterans allowance as opposed to widows on pension under the Pension Act. It strikes me that we do not need to do this by legislation; there is sufficient authority in the War Veterans Allowance Act. I urge the minister to do his best to resolve this issue and to do it before the increased payments come into effect on July 1.
The other thing I want to say has already been said by the hon. member for Norfolk-Haldimand. I repeat it, I underline it and I press it on the minister with every bit of parliamentary experience that I have. This business of a cut-off, such that a widow whose husband had only a 47 per cent pension gets no pension whereas the widow of the husband who had a 48 per cent gets full pension, is for the birds. There is no justification for continuing that provision, that 48 per cent cut-off rule. The
Pension Act
minister knows how strongly all of us in this House feel about it. We know the attention that has been given to it in his department. I realize that he has done well to get this much money out of the cabinet this session; we cannot look for the other measure next week. But I urge him to give everything he can to resolve this matter in favour of all veterans' widows.
My friend said that at the Legion convention in Edmonton the minister will boast about this and he will be thanked for doing it; but I can tell the minister that as sure as I am standing here at the Edmonton convention he will also be asked "What have you done for us lately?". They will start to say to him "Fine, you have done it with respect to the basic rate; it is time to solve this question with respect to the widows." I call upon the minister to put the same fight and determination into that battle that he put into this one. It is unfinished business that will not go away. We will stay with it until we win the fight. In the meantime we congratulate the minister on getting this bill approved by the cabinet. He will soon discover that, just as with the bill a little while ago concerning compensation for prisoners of war, this one will be passed by parliament very quickly.


Gérard Laprise: Mr. Speaker, I am also happy to participate in this short debate on consideration of Bill C-58, all the more so because it was remarkable indeed that the House has agreed to pass all stages of the bill so quickly. But it is a pity that the minister and his department officials took so long to draft such a simple and non complicated bill which will go through so rapidly. We want to suggest in saying so that all veterans as well as all members of this House were looking forward to such legislation. So, I think that the co-operation we have offered to the minister tonight should encourage the government and other ministers to follow the example set by the Minister of Veterans Affairs (Mr. MacDonald) to introduce the legislation we ask for a lot faster than is usually the case.
Mr. Speaker, it is obvious that disabled veterans have been waiting for the increases contained in this bill because these people are suffering as well as their fellow Canadians from the impact of inflation. As most of them are in no position to earn any income, they must keep pace with price increases and inflation, and I think that the increase contemplated in this bill will be welcomed and that we should not stop there because unfortunately I am afraid that inflation is not about to stop.
So, Mr. Speaker, 1 will not dwell any longer on this subject but there is another point which I would still like to expand on and my colleague from Winnipeg North Centre has also dealt with it and it is the one with respect to veterans' widows. Recently I explained to the minister a problem which had been submitted to me by a widow in my riding who during one year-the year which followed the death of her husband- received a pension which was paid to her according to the law.
80045-11V4


Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. Members:: Question.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Laniel in the chair.
Clauses 1 to 4 agreed to.
On Clause 5-Coming into force.
Stanley Howard Knowles: Mr. Chairman, may I ask just one question about clause 5 which provides for this amending legislation to come into effect on July 1, 1978. May we assume that the offices which write and send out the cheques are geared up for this legislation and that the increases provided in this bill will be reflected in the cheques which veterans receive in July?


Daniel Joseph MacDonald: Mr. Chairman, the answer to the hon. member's question is that this is what we anticipate in our department at this time.
June 1, 1978


[Stage Direction]
Clause agreed to.
Title agreed to.
Bill reported, read the third time and passed.
Some hon. Members:: Six o'clock.


Mr. Deputy Speaker:: It being six o'clock, I do now leave the chair until eight o'clock tonight.
At 5:58 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: On a point of order, Mr. Speaker, I should like to make a correction in Hansard for May 31, 1978. I might say I wanted to attend to this matter earlier in the afternoon but I was unable to do so because of the lengthy question of privilege before the House, discussion of which continued until I was called to a committee meeting.
On page 5915 at line eight I am reported to have said and I did in fact say the following:
Mr. Speaker, we recently signed an agreement with Volkswagen which allows Volkswagen to claim remission on duties-
What I intended to say was:
-we recently signed an agreement for cabinet approval which allows Volkswagen to claim remission on duties-
The rest of the paragraph remains the same. I guess I could add that I have no doubt the agreement will receive cabinet approval; I thought it would have been given last week but it was not. It is a very good agreement and I have no doubt approval will be given.


INCOME TAX ACT
[Stage Direction]
The House resumed, from Tuesday, May 30, consideration of the motion of Mr. Chretien that Bill C-56, to amend the statute relating to income tax and to authorize payments related to provincial sales tax reductions, be read the second time and referred to committee of the whole.
The Acting Speaker (Mr. Turner):: The hon. member for Algoma (Mr. Foster).
Income Tax Act


Steve Eugene Paproski: On a point of order, Mr. Speaker, I believe the hon. member for Fraser Valley West (Mr. Wenman) had the floor.


The Acting Speaker (Mr. Turner):: Order. On Tuesday night the Leader of the Opposition (Mr. Clark) spoke and a vote was taken. He made the last speech and I am therefore going to the Liberal side.


Steve Eugene Paproski: I am surprised you would do that.


Mr. Maurice Foster (Algoma):: Thank you, Mr. Speaker. I think your judgment on that matter was very sound. I am glad to have an opportunity to say a few words on Bill C-56.


Some hon. Members:: Filibuster!


Maurice Brydon Foster: This bill makes provision for implementation of many aspects of the budget which the Minister of Finance (Mr. Chretien) presented a few weeks ago. The bill continues the stimulus which the Minister of Finance has been pursuing for the past several months, including the reduction of sales tax for the citizens of Ontario from 7 per cent to 4 per cent, or, in other terms, to the tune of $1 billion worth of incentive to the Canadian economy. This incentive is an important one, Mr. Speaker, and adds to those provided in the economic statement made by the minister last fall when a tax cut of approximately $100 per taxpayer was provided in January and February of this year. This was in addition to the indexation of income tax which reduced taxes by another $900 million. It has been the strategy of the government to overcome our unemployment difficulties by providing stimulus to the economy in the form of cuts in the income tax and, now, in the sales tax.
There are several features involved in the stimulus to which I have referred. There are the incentives in the form of tax cuts and incentives to industry by reduction of corporation taxes. The employment tax credit will create some 50,000 jobs in the next two years and provide some $200 million worth of incentive to industry. As well, there are incentives to the private sector in respect to oil and gas exploration, research and development and transportation.
Equally important in this strategy of creating jobs, Mr. Speaker, is the direct employment program which will be putting almost a billion dollars into the economy in the form of direct job creation as well as job training programs under the department of employment.
Many constituencies throughout the country which have high unemployment have benefited from the Canada Works Program. The Algoma riding certainly has had a great stimulus during this past winter. Some $1.8 million worth of Canada Works projects were approved. In the last few weeks $345,000 worth of Young Canada Works projects were approved. That will provide about 250 jobs. Fifty-three projects have now been approved and are being implemented by young people across the constituency. These programs are related to recreation,

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community clean-up, hospital auxiliaries, dock improvement and other kinds of community improvement.
Equally important this fall will be the Canada Works Program under which the government will be spending $175 million across Canada for the coming winter and some $50 million for the economic component aspect of the employment strategy. Some $26 million of this will be spent, I understand, in reforestation projects. I think that is an excellent approach because communities are sometimes unable to come up with good projects, and reforestation is an ongoing need in many areas of our country.
Companion to the direct employment program has been the expediting of major capital projects like the northern gas pipeline project which has been approved by this Elouse. We are now waiting for approval by authorities in Washington so that the project can get under way. It will pour some $4 billion into the economy of Canada and create some 100,000 man-years of work during the next few years.
We hear a great deal of gloom and doom in this place. I suppose it is the nature of the House of Commons that some bad-mouth the Canadian economy and the difficulties we have in this country. However, there are many positive aspects to our economy, and perhaps from time to time we should look at them. For instance, the Minister of Finance has indicated that we probably will round out the year with a 4 per cent to 5 per cent growth in the Canadian economy. Our exports over our imports are moving ahead. During the first quarter alone there was a $1.4 billion surplus of exports over imports. That compares with a total export surplus last year of $2.9 billion. The figures for this year look very promising in that regard.
In February of this year some 280,000 more people were employed in Canada than in February of 1977. I thought an article in last Saturday's Toronto Star by Anthony Westell summed up many of the positive aspects of our economy. In his article he mentioned that the House of Commons often plays down all the positive aspects of the Canadian economy, and he spelled out several of the very positive aspects of the economy, and I quote:
For example, we could take pride in the fact that our gross national product- the value of all goods and services produced-has increased in every year of the past quarter-century, except in 1954. That's a record few of our competitors can match.
We could also look at the fact that in the period 1967-72 the number of Canadians employed increased by 912,000, while from 1972-77, the increase was 1,391,000.
Instead of whining about high taxes and hard times, we might boast about the rapid rise in personal incomes per capita, for example, from $3,129 in 1970 to $6,741 in 1976.
The ratio of personal savings to disposable income has more than doubled, from 5.3 per cent in 1970 to 10.7 per cent last year ... We've done so well over the past quarter-century that our expectations are high and any setback seems like a crisis.
But the problems are soluble-indeed, we are already making progress. Constantly telling each other that the situation is much worse than it really is just makes it harder to solve the problems.
Those are the words of a reporter, and some reporters do not always have complimentary things to say about the Canadian economy.

Reviewing the aspects of our economy, one of the most controversial factors has been the fall in the Canadian dollar. Of course, it has rallied now to 89 cents or almost 90 cents. I suppose the value of the Canadian dollar compared with that of the United States dollar is always a matter of great concern and a matter of national pride to Canadians, but if we look at some of the resource areas like northern Ontario, having a 90-cent dollar is not always disadvantageous. Granted, when we buy orange juice, it is more expensive. That has been so in the last year because of the fact that it is imported from the United States. That is a disadvantage.
However, if we look at many of our resource industries, we see great advantages. Let us consider the beef industry. The reason for part of the recovery in that industry is that the Canadian dollar is worth about 90 cents compared with the United States dollar. That is a very positive aspect when we consider that the beef industry has been in decline for the last three of four years. Indeed, beef producers have gone through one of the most difficult times in our history. This is especially true for cow-calf operators.
When we consider the mining industry, and especially uranium mining where that product is being sold on world markets, we gain a 10 per cent advantage with our lower dollar. In the forest products industry pulp has not been at a favourable price, but the demand for lumber and for paper products is very strong, and a 10 per cent advantage is very beneficial to the producers of northern Ontario. Likewise in the steel industry, for many producers like Algoma Steel 1977 was a turnaround year. Our steel industry is now in a competitive position abroad because our steel products sell for less. We can also be competitive with products coming in from outside the country, so we have an advantage there as well.
The 90 cent dollar has been a great advantage for the industries I have mentioned, but particularly for producers who sell in the United States market and overseas. The advantage is even greater for products like uranium, which is sold in the Japanese market or the German market where the devaluation of the Canadian dollar vis-a-vis the mark or the yen is even greater than it is in relation to the American dollar.
Perhaps no industry is looking at a better prospect this year than the tourist industry because of the devalued Canadian dollar. That, coupled with the removal of the sales tax for hotel rooms, is making success in that industry very promising this year. After some very bleak times it is very encouraging to find that many tourist operators in many areas of our country are looking forward this year to one of the best years they have had in the past several years.
I think Bill C-56 would provide some important benefits throughout our economy. It certainly would for the farm operator who is incorporated and who wants to pass his farm on to his son. The provisions of this bill deferring the capital gains tax make it possible for the property to be passed on without a capital gains tax initially. Thus, the very unfair and undesirable situation we have had in the past where some large family farms which were incorporated had to be sold in order to pay the capital gains tax can now be avoided.
June 1, 1978

Likewise, the provisions relating to research and development are very important, coupled with the announcement this afternoon by the Minister of Public Works responsible for science and technology (Mr. Buchanan). Now Canadian companies which want to make expenditures and carry out important R and D will be able to spend their dollar, which will cost them 20 cents net because of the 150 per cent write off provision in this bill. This program will continue for a ten year period. I understand it is one of the most generous of any in the world. Surely now, at a time when our whole economy and our industry are restructuring to meet the competitive situation in the world, we should be offering that kind of incentive, whether it is to the automobile industry or to any other industry which is competing abroad as well as in the domestic market, for which R and D is essential.
The investment tax credit which was extended last year for R and D and which was made 7.5 per cent higher in areas like Ontario and 10 per cent in the maritimes, coupled with the provisions in this bill and the recent announcements made today by the Minister of State for Science and Technology, are important moves forward.
Another very important provision in this bill which I support is changes to the registered retirement savings program which provide a more flexible means of retirement savings for people so that those who retire do not have to withdraw the funds in such a short time; and if they continue to have other sources of income, they can be spun out over a longer period of time while the taxes of senior citizens are essentially reduced.
Equally important are the provisions for oil and gas production in the west. We have had a remarkable turnaround in exploration and development of natural gas in the past four or five years. A few years ago we were receiving reports that there could be shortfalls in natural gas by 1978-79. In fact, the policies that were introduced at that time to produce natural gas to the BTU equivalent with crude oil have brought on important suplies of natural gas in Alberta so that we have not had to resort to the more expensive gas in the Arctic islands at this point.
The provisions in this bill move in three directions: first, to provide a depletion allowance of $1 for each $2 spent on enhanced recovery. Some 65 per cent of the oil in the ground is not recovered with the present level of technology. This incentive to the oil industry will mean that more R and D can take place for enhanced recovery. Likewise in the case of nonconventional oil, the tarsands and heavy oils, the depletion allowance will be increased from 25 per cent to 50 per cent. Also the heavy oil plants will be taxed as a manufacturing facility.
Recently in the Standing Committee on National Resources and Public Works, the Minister of Energy, Mines and Resources (Mr. Gillespie) outlined the prospects for new tarsands plants and heavy oil upgrading facilities for the tremendous reserves in Alberta and Saskatchewan, and he indicated that with the possible upgrading of the two existing plants of Syncrude and GCOS, combined with the new tarsands and heavy oil plants, we could expect in the next eight to ten years
Income Tax Act
some 750,000 barrels of oil a day extracted from those areas in Alberta and Saskatchewan. When we look at the resource of some 200 billion barrels of oil or some 37 billion or 38 billion which are available with the present technology, the incentives provided to utilize this resource are appropriate at this time because such companies as Shell and Imperial Oil as well as the Saskatchewan and Alberta governments are considering making investments to develop these resources.
If we look at the Syncrude project, which is a production scale sized plant in which both the federal and provincial governments of Alberta and Ontario invested some $600 million, we see a very good return to the governments because the three governments involved hold an equity of some 37 per cent in that plant, and yet some 77 per cent of the revenues from the production scale plant will be accruing to these governments. The revenues over the next 25 years are estimated to be some $25 billion. The federal government will collect some $3.5 billion in taxes towards the end of the production life of that plant. The Alberta government royalties will amount to some $13 billion, and the equity of the three governments' return on their investment will amount to some $2.5 billion, giving a total amount of revenue to the three governments involved of $19 billion, which amounts to about 77 per cent.
But obviously the policy of the government is not to do all of this itself but rather to have private enterprise invest in this kind of project, both the tarsands and the heavy oil production. In that regard, a considerable amount of research funds of the federal government are being poured in together with those of the province of Saskatchewan in developing the technology for heavy oil production.
Perhaps the most important part of Bill C-56 is, of course, the 3 per cent reduction in the sales tax which, I believe, is already having a very positive effect on provinces such as Ontario where, I am told, retail sales of automobiles have increased dramatically. On a $6,000 car, you get a reduction in the sales tax of $180. I think the Minister of Finance (Mr. Chretien) is to be congratulated on having had the courage to make this new departure in budget making and for having consulted with the provinces with a view to coming up with a direct stimulus by providing sales tax reductions which will have a stimulating effect. The direct encouragement which this provision represents to purchase a major appliance or an automobile because of a reduction of $100 or $150 is a great stimulus.
Of course, under our constitution sales taxes are the prerogative of the provincial governments and therefore such provisions require a great deal of consultation and co-operation with the provinces. The Minister of Finance went to great lengths to try to carry out that kind of consultation and at the same time to retain the confidentiality of the budget. It was a very tricky procedure, and I understand that during the Easter break when many members were enjoying a holiday the Minister of Finance was spending time in consultation with his provincial colleagues, those ministers of finance, on this very important and innovative procedure. The fact that he did not get co-operation from the province of Quebec and its separatist

June 1, 1978
Income Tax Act
P.Q. government is most unfortunate. When you have a government that is dedicated to breaking up the country by taking one province out of Canada, perhaps it is not surprising that it did not co-operate fully in this regard.
Nevertheless, I have great confidence in the minister's abilities to consult, negotiate and work out a very equitable and fair arrangement with the province, at least fair to the people of Quebec. The surprise to me is that opposition parties would support the separatist government in this approach, because it is obvious that the federal government were to allow that province these selective cuts for products that are produced primarily in that province, this would be a very disruptive factor across the country.
It has been made very clear that when consultation took place with the other provincial governments none of them were agreeable to selective tax cuts such as proposed by the province of Quebec. I am really surprised that opposition parties would support that government in this regard. Obviously this would have been unfair to the other provinces when they did not have that opportunity and had not agreed to such a proposal. It would have been a very disruptive force to have a sales tax for the province of Quebec that was not an across the board cut but singled in on textiles, footwear and furniture, many of which items are produced in that province. However, even that might have been possible had there been agreement with the other provinces; but the first three provincial governments the Minister of Finance discussed this proposal with all turned thumbs down, so it is obvious it would not have been acceptable to a majority of the provinces.
I believe the minister's proposal to return an equivalent amount of money to the taxpayers of the province of Quebec, whether this is done by way of direct payment or otherwise, is obviously the most fair way of handling the situation. It could and has been argued that if the province of Quebec was not willing to reduce its sales tax across the board in a non-discriminatory way, it should not be eligible for the tax reduction.
I personally think the proposal the minister is making to return an equivalent amount to the taxpayers in the province of Quebec is most fair.
During the past several months leading up to this period we have witnessed a concerted attack by the Leader of the Opposition (Mr. Clark) and the hon. member for York-Simcoe (Mr. Stevens) on the Minister of Finance, an attack often abusive, unreasonable and completely unfair. This culminated a couple of weeks ago in the charge that Liberal members, and even cabinet ministers, were speculating in the Canadian dollar. The Minister of Finance answered that very succinctly when he said simply to the hon. member for York-Simcoe to put up or shut up; to name names and spell out those people, or withdraw.
A week ago yesterday we had the opportunity of seeing that hon. member eat humble crow in the House, completely withdrawing his allegation. He had very little credibility before that episode, but he had even less when he finished. I do

not think many hon. members over there stayed in the House that day, but whatever credibility that hon. member had left was stripped away by the Minister of Industry, Trade and Commerce (Mr. Horner), who spoke immediately after and laid bare all the facts about the Bank of Western Canada and the unsavoury mess in that regard. The Minister of Industry, Trade and Commerce laid out all the facts for everyone to see. I do not think it will be long, following this incident, before we see the shadow cabinet over there shuffled around.


An hon. Member:: It will be shuffled from this side to that side.


Maurice Brydon Foster: Perhaps we will see the hon. member for York-Simcoe moved to another position.
The Leader of the Opposition likes to refer in very derogatory terms to the Minister of Finance as "that guy from Shawinigan Falls; that street fighter". I am sure everyone on this side of the House and most Canadians would rather have that street fighter from Shawinigan Falls than one of the Bay Street millionaires. I am sure everyone will not only want him to an even greater degree as Minister of Finance, but will trust him a darned sight more.


Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, when listening to the comments of the last hon. member I had to check my Order Paper to make sure we were talking about Bill C-56. In fact, I even wondered if the hon. member was speaking about the same country I know something about and intend to speak about in my remarks.
The arguments in respect of Bill C-56 are becoming well known, not only in this chamber where they are repeated often enough, but as well among a growing number of Canadians who are demanding that the bill be withdrawn, the measure renegotiated and the bill redrafted.
This bill is a very special status bill. In fact, it is also a special, special status bill, a special status bill, a non-special status bill, and a very non-special status bill. If you live in the province of British Columbia it has very, very special status because not only do you receive the tax cut for six months, you receive it permanently courtesy of the B.C. government.
This bill has special status in Quebec because there the taxpayers are to get a cheque for $100 in the mail.


An hon. Member:: If they are rich enough.


Robert Lloyd Wenman: The bill has a non-special status in the province of Ontario and other provinces where the residents will receive only a temporary six-month tax cut; and it is a very, non-special status bill in the province of Alberta where the taxpayers in fact will receive nothing from this bill.
The capacity and the weight of a province's bargaining power has become the new criterion for federal-provincial relations. This is probably one of the most divisive pieces of legislation that I or any member of this House has seen during the last four years. It has been unanimously condemned by every governmental jurisdiction and agency in Canada, and I
June 1, 1978

would ask the government: Who in fact, in addition to the Liberal government, shows any support for this bill? I have not heard any support from any parties in opposition; I have not heard any support from any province in Canada; I have not heard any support from labour groups; I have not heard any support from the business sector; and I have not heard support for this bill from anywhere except from a few cabinet ministers and backbenchers on the other side. Perhaps the next speaker will tell us about the great support for this tax measure that is coming in from across Canada, because I am certainly not aware of any.
To say that everything is wrong with this bill would be an overstatement. We must recognize that in some ways it is successful. The government has been successful in respect of this bill, and that success can be measured by the fact that through this bill the government has successfully encroached on provincial rights. It has been successful in undermining a long standing tradition, the partnership concept of confederation. It has also been successful in demonstrating its incompetence and confusion in economic matters and now, through the bill, not only economic matters, but also its grasp of the unity issue. This government has been successful in these ways, but it has also been very successful in building a civil service of 640,000 employees.
In previous speeches I have talked about the government becoming the biggest employer in Canada, hiring 640,000 civil servants; but now one department of the government has become even larger than the whole civil service of Canada, and that, of course, is the UIC. In fact, the unemployed are the biggest group of employees in the country. When you add to the 640,000 civil servants the provincial government civil servants and the municipal government civil servants, and on top of that you add those receiving assistance from various government levels, then rather than self support you wonder who is doing all the work. You wonder where in Canada is that minority that is working hard and producing the tremendous income support that it takes to support this bureaucracy and agencies at all levels of government in Canada.
So far the debate has centred, and rightly so, on the problems with the bill, but what of the broader principle which is the principle of a tax cut for the Canadian economy? In my opinion, the bill fails even in that category because, firstly, the bill does not provide more than a token tax cut. Secondly, it is not accompanied by equivalent cutbacks in government expenditures. In Canada today we are taxing work, taxing growth, taxing investment, taxing savings, taxing productivity. On the other hand, we are subsidizing non-work consumption, welfare and debt. Is it any wonder we are getting less and less of the first category and more and more of the latter?
The real problem with our Canadian economy today is that incentive is being taxed away. Taxes at all levels now consume more than 43 per cent of our gross national income, and, coupled with steeply graduated tax rates, our private enterprise economy's ability to create jobs and generate higher real
Income Tax Act
incomes is being strangled. In face of this situation, what does the government do? It refuses to make permanent tax cuts and continues to increase government spending on new and exotic give-away programs. At the same time inflation increases everyone's taxes daily as people are pushed up into higher tax brackets, thereby discouraging incentives for both workers and investors.
Remember, when we talk about a major tax cut, we are not talking just about a tax cut for investors; we are talking about a tax cut for labour-a labour incentive as well as a business incentive. In order to increase the after tax income of all Canadians and restore incentive in the Canadian economy, the government should look to bold programs like the ones that are being discussed in the United States, programs that would reduce all individual income tax rates by about 33 per cent; not 2 per cent or 1 per cent or just an inflationary coverage, but an individual income tax cut of 33 per cent. A reduction of corporate tax rates by 3 percentage points, complete write-off of all capital losses-these are the types of bolder stimulants that are needed in our economy at this time.
This type of bold attack on the economic woes of our country would stimulate an immediate growth of economic output, employment and investment. This would expand the nation's tax base, thereby increasing tax revenues for all levels of government. A corresponding reduction in government expenditures for welfare and unemployment compensation will prevent any increase in the budget deficit.
This is not a new proposal and was in fact demonstrated in the United States by President Kennedy in 1963. As a result of that massive tax cut in 1963, the United States experienced the highest real investment growth in modern history. Inflation was the lowest in modern history, real industrial output growth was the greatest in any period, and real disposable income grew the fastest. This is not a program they merely talked about; this is a program that was in fact implemented, a 25 per cent income tax cut across the board.
Substantive rather than token and temporary tax cuts are not a new remedy and have, in fact, been proven highly successful in many nations in the past. In Great Britain, for example, the income tax was first imposed in 1799. Thereafter, under the pressure of the Napoleonic wars, the rates rose rapidly as did the national debt. Despite the fact that the income tax was producing one fifth of Britain's tax revenue in 1815, about 15 million pounds, and its debt had risen to the astronomical sum of 900 million pounds, parliament abolished the income tax in 1815. Can you imagine that, a country actually abolishing income tax!
Then, as now, the cries of the fiscal experts were loud. It was said that the debt would crush the economy and that the tax rates must remain high in order to pay it off. What happened, however, was that the abolition of the income tax set off a 60 year economic expansion in Great Britain which, by the end of the century, had significantly reduced the debt in both absolute and relative terms. Over the same period the interest rate on government bonds dropped steadily, attesting
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to the wealth of savings created by the low taxes and greater prosperity raising the real standard of everyone's income.
The British empire ultimately waned, not by the devastation of World War I, but by a reversal of its traditional low tax and free trade policies of the 19th century. Since 1914 high taxes, socialism and protectionism have been the hallmarks of British economic policy, and the tax rates today are essentially what they were in 1914-15; that is, 83 per cent on ordinary income and 98 per cent on investment at about $40,000.
A similar experience can be traced in the economic history of France. In 1920 France imposed a steeply progressive income tax in the name of tax reform. It was so steeply progressive that it became known as the "sucker's tax", to be paid only by those who could not escape it. That sounds familiar, and I do believe I have heard that kind of talk in Canada today. As the government became more adept at enforcing the tax, the French economy contracted steady inflation, culminating in the 1924 financial crisis. Total government revenues, measured in pre-war francs, were only a bit higher between 1920 and 1925 than they had been in 1913 when there was no income tax. The crisis ended in 1926 when the left wing Flerriot government fell and was replaced by the centre right Poincare government, which announced a new tax law just one week after taking power.
The highest rate of general income tax was cut from 60 per cent to 30 per cent. That is the type of income tax that is being talked about in the United States today, and it is the type of income tax cut which we should be talking about in Canada. The rates of inheritance and estate taxes were cut, and at the same time made less steeply graduated. The annual transmission tax on securities was lowered by about 40 per cent. The franc stabilized, the economy revived, and in the first year of the reform, tax revenues jumped dramatically from 5.4 billion pre-war francs to 7 billion. In the six months from July to the end of 1926, the franc soared on the foreign exchange market from two cents to four cents on the dollar. That substantial tax reduction stimulated the economy for a good number of years.
Germany, too, has experienced a somewhat historical background in its economy. If we look to the time when taxes were cut we find similar action. Following World War II tax rates in Germany were extremely high. The 50 per cent marginal tax rate began at only $600 of income and the highest tax rate, 95 per cent, began at $15,000. By 1948 these high tax rates, combined with massive inflation and price controls, had led to a severe economic crisis in Germany.
Into this crisis stepped Ludwig Erhard, one of the great economic leaders of all times. Not only did he abandon all wage and price controls with a single stroke, but he began a process of tax reduction that continued for a quarter of a century. He did so by steadily raising the income level at which high marginal tax rates began.
In 1948 he increased the threshold for the 50 per cent bracket from $600 to $2,000 and the threshold for the 90 per cent bracket from $15,000 to $63,000. A year later the 50 per
[Mr. Wenman.l
cent bracket was pushed up another $5,000. In 1953 it was pushed up to $9,000 and the top rate of income tax was reduced to 82 per cent. By 1955, the highest rate had been reduced to 63 per cent on incomes above $250,000 and the 50 per cent bracket did not begin until earnings of $42,000.
This systematic reduction in tax rates yielded a massive economic boom which increased the revenues so much that Germany was able to establish a system of social insurance for both the unemployed and the aged which is among the most generous in the world. It was all done without inflation and in direct contrast to the Keynesian advice West Germany received from the state department of the United States.
The situation in Japan after World War II was very similar to that in Germany: high tax rates and a destroyed economy. Beginning in 1950 the Japanese began to adopt a program of tax rates reduction. Marginal tax rates on both individuals and businesses have been cut almost every year since 1950. As each of these tax cuts generated new economic activity and higher revenues to the government, they fuelled new tax cuts. The process has continued until Japan's economy has become one of the most fierce competitions in the world.
In the United States, long before the Kennedy tax cuts of the 1960s there was ample evidence from American history that tax rate reductions would lead to higher tax revenues. The most important example is from the 1920s. The republican party took control of the White House and the congress in
1920	by promising a return to normalcy. A primary aspect of this return to normalcy was a reduction in high wartime tax rates, which went as high as 63 per cent.
Thereafter the congress reduced tax rates every year from
1921	to 1925, lowering the highest tax rate from 63 to 25 per cent and the lowest tax rate from 4 to Wi per cent. This led to an enormous economic boom in the United States, no inflation and a reduction of the national debt.
This brief survey, I believe, shows quite clearly that sound tax rate reductions have led to enormous economic growth and an accompanying increase in revenue to government without inflation. Getting people into private enterprise jobs and producing new goods and services is not inflationary and we should start a major reduction now.
The academics of the economic proposal I am supporting is explained by what is becoming known as the Laffer curve. The curve shows the relationship between tax rates and tax revenues. In the normal range, the higher tax rates bring higher revenues. But there is a maximum revenue point beyond which higher rates result in lower revenues, because the impairing of incentives severely contracts the tax base. When tax rates are in this counterproductive, prohibitive range, a general tax cut is well worth trying.
What this means is that you can tax the public at. 10 per cent, receive a 10 per cent taxation revenue and people continue to work in the same way. You can tax them at 20 per cent and they will still give you full output. You can tax at 30 per cent or 40 per cent, but somewhere about 40 per cent there starts to be a resistance to taxation. We have all heard it said
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in this House that people start saying it just is not worth while to work overtime, or indeed it is not worth going to work. In fact, we have reached the point in Canada where people are saying not only is it not worth while to work, but they can make money by going on unemployment insurance. Last summer I hired a student, Mr. Speaker, and it cost him $30 a month to take the job. He was making slightly above minimum wage but it was $30 a month less than he would collect if he did not work.
Around the 40 per cent mark people lose the incentive to work, so instead of receiving more taxes we find that more and more people go on unemployment insurance or welfare or do not work overtime. They do not have the incentive to produce more, to work harder and longer.
We have reached that point in Canada now. To increase taxes, let alone maintain the current rate, is counter-productive. The more we raise taxes, in fact, the less taxes will come to us. This is an economic reality that has been recognized throughout history and is now being recognized in the United States. Senator Kemp of the United States-a potential candidate for the presidency-has recognized this. Forces are now rallying to his side, recognizing that a major tax cut would help the economy of the United States as it would any of the western industrialized countries.
The key is to let producers keep more of what they produce, and the biggest effect will come from cutting rates where they are the highest. If the tax cuts reduce rather than improve rewards for the economy's most gifted, talented and skilled producers, they will be worse than nothing at all.
The middle class is being squeezed by high taxes and inflation to the point where it fears for its own survival. Simple desires, which up until recently seemed easily within reach of any middle class family, now seem out of reach. We all tend to expect in Canadian society that some day we will be able to provide a house for ourselves and our families. This is a basic, minimum expectation of Canadians which many have accomplished. All of a sudden, however, in this economy of overtaxation, people are finding that they cannot afford a house. Some people will say that is not so and that more people are buying houses; but actually more people who bought houses are losing them, and with their investment goes their incentive and everything else.
Recent statistics show that 850,000 people in Canada who should be able to afford a house actually cannot. The key to our economy is the fact that unemployment is hurting. It hurts to be on unemployment and on welfare. Foreclosures in Canada are accelerating at an alarming rate. Statistics that I received just today show that foreclosures on NHA houses only are 150 per cent higher in 1977 than in 1976. If that trend continues, 1978 foreclosures will be up by 200 per cent over 1977. From 1975 to 1978 the percentage of foreclosures will rise 1400 per cent. In other words, in the last three years there has been something drastically wrong with our economy because people have seen the basic ideal of owning their own home quashed.
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It has been quashed because the government decided they would subsidize homeownership through AHOP, and AHOP has become a very hopping program. People bought houses on the predication that the value of the house would continue to rise, and with it their disposable income, so they could afford higher payments later. This is a situation that has not happened. An AHOP house in Vancouver that sold just two years ago for $47,000 can now be bought for $43,000. In other words, the value of the house did not increase, it dropped.
At the same time, while that person's wages went up through wage controls, in fact his disposable income went down. It is from his disposable income that he makes his payments. Therefore, when the amount he had to pay on his mortgage increased, there was nothing left of his salary to pay his increased mortgage. His mortgage jumped from perhaps $370 a month $500 a month. When it jumped to $500 a month, he could not pay that amount. Even if he could pay the $500 he found that because he was not paying the interest- his payments did not even meet all of the interest-the house he bought for $47,000 three years ago is now a liability of $50,000. He now owes $50,000 on a house which if he sold it would be worth only $43,000.
What has happened to this man? He is paying $500 a month on a $50,000 investment which is only worth $43,000. What does he do? He does as the program suggests, "a hop". He does an "a hop" into another municipality; he "a hops" out of that house. Instead of paying $500 a month he walks out and pays $43,000 for a new house. His payments, instead of jumping from $370 to $500 a month, have now dropped to $330 because his initial investment was $43,000. Who picks up the difference? The mortgage insurance corporations of Canada. And who is that? That is you and I who helped to buy the house in the beginning. Homeowners who have their homes are paying for them two and three times over.
This problem of foreclosure is serious. In 1975 there were 139 foreclosures. In 1976 the number jumped from 139 to 246. In 1977 the number increased to 630. In the first two months of this year there were already 244 foreclosures. That is through NHA alone. If one multiplies that number by four to get what this year's jump will be, and if the rate continues as it is, from 630 foreclosures last year it will probably be in the neighbourhood of 1,200 to 1,500 foreclosures this year.
That is unacceptable, but it is the reality that is brought home in Bill C-56. The reality is that Canadians who had these very modest desires are finding that they are getting to the point of being beyond their reach. People thought they could afford a university education for their children. At one time a person could pull $1,000 from his income and support his child at university. Then it became $2,000 and then $3,000. Now that $3,000 is not in the pocketbook to support that child at university. As a result people are now having to drop their sights of providing a higher education for their children. That was a basic element in Canadian society that we came to expect; that young people should be able to have a higher
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education and that we should be able to provide it for our children.
Now I come to the subject of a dignified retirement. Many people thought when they retired ten or 15 years ago that they had worked for their society which they had helped to build, that it had become strong and they could count on a dignified retirement. That hope of a dignified retirement has now gone or is disappearing. We are finding a cynical and a discouraged attitude among those who worked and saved and now find that their savings are gone. These things are now out of reach for people.
Rising unemployment and inflation in Canada today are unacceptably high, while real investment and after-tax incomes of Canadians are lagging. Perhaps even more disturbing is the weakness of capital spending by business for modernization of plant and equipment, which creates the jobs Canadians need for the future, leads to higher real wages, and leads to the possibility that these very basic goals of a house, an education, a dignified retirement are brought back into reality.
Over the past several years the rate of capacity growth in manufacturing has slowed considerably. Canada is lagging behind nearly all OECD countries in the rate of investment and is not keeping pace with our need to create jobs, combat pollution and fight inflation as well. This bill is not a solution in the short or long-term. It is not a solution to the economic problems of Canada. It is a temporary token, a confused and inequitable bandaid. The government has failed the country economically and this bill, with its useless, half attempt to try to make an economic correction not only does not make an economic correction but is a disaster as far as the national unity of this country is concerned.
This bill should be withdrawn, renegotiated and replaced with a bill that makes not a token, temporary tax cut, but a substantive tax cut which will provide a new incentive for Canadians to work, thereby through their work reviving their aspirations toward the very basic needs that all of us in this House hold for Canada and Canadians.


Mr. Alan Martin (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, it is an honour to have the opportunity to participate in this debate on Bill C-56. I think we all recognize it as being an important aspect of the budget proposals that were brought down by the Minister of Finance (Mr. Chretien) on April 10 last.
As one of four chartered accountants in this House of Commons-the only one from Ontario-three, I believe, on our side and one on the official opposition side-from time to time I feel it somewhat of a responsibility and indeed a privilege to participate regularly in the debates of this House where we are dealing with fiscal and economic matters.
Many of us have found much satisfaction in the work in committees, myself included, where there is a great opportunity for backbenchers to make important and meaningful contributions to various issues that come before committees with which we are associated. However, it has to be borne in mind that here in this central forum of our national governing

process is where the real action is, not because of any greater cut of thrust that might occur here than in committees-in fact, I think it is probably the reverse-but because this is basically the heart of our over-all parliamentary institution. For that reason it is important for us, during a debate of this nature, to put facts on the table and to dispel notions that are being conveyed across this land by people who profit from this kind of thing and whose objective in life is to make Canadians look at themselves and say "Gosh, I think I am far worse off than I am". I have never been a member of the opposition, but I suppose they look upon that as part of their official function and their main job in life.


Steve Eugene Paproski: You sure will be, or you will be defeated.


Alan Gray Martin: I do not anticipate being a member of any opposition party in this House in the foreseeable future, and I fully plan on being back here after the next election.
Again I say, not having been a member of the opposition, I find it hard to rationalize just what their function is or how they see their function. I listen to the Leader of the Official Opposition (Mr. Clark), and to the leader of the unofficial opposition and the finance critic of the official opposition, the hon. member for York-Simcoe (Mr. Stevens). At times I shake my head in astonishment, not so much at the details of what I hear-although for the most part they are rather incredulous, and, as recent events tended to indicate, often at best wishful thinking with no foundation in fact-but at the general approach they take. They take a very negative gloom and doom approach toward all the very many positive accomplishments of the Canadian economy over the past ten years and currently.
What I find rather incredible is really two factors. First, these distinguished members, the leaders of the two major opposition parties and the finance critic for the opposition from York-Simcoe, are, first and foremost, members of parliament. That seems to say their initial task is to represent at the federal level, each of them, many thousands of hard working Canadians who reside in their individual areas, whether it is Rocky Mountain, Oshawa-Whitby or York-Simcoe.
Those Canadians, not unlike Canadians residing in my constituency of Scarborough West or the constituencies of other members in this House, are for the most part reasonably well employed people, reasonably content and reasonably confident in the ability of themselves and their fellow Canadians across this country to continue to improve their collective economic situation and ultimately overcome those identified problems which we all acknowledge continue to plague us and for which this government is constantly seeking meaningful solutions.
This extreme attitude of negativism in the face of positive accomplishments in the past and in the present appal and really disturb me. This is true whether it comes from members opposite or the media, although in fairness I frankly blame the media to a somewhat less extent. After all, their job is to sell
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papers and make a profit. From what 1 understand, in Toronto some of them are doing not too bad a job at that right now.
Naturally the gloom and doom produces headlines. The papers understand that. No news is good news. The government of this country has to accept the fact that the media is not able to peddle their wares to the same extent with headlines when things are going well or if the government are making positive accomplishments, as they are doing. However, they can put in blatant headlines problems pointed out to them by the official opposition in the course of their meanderings as well as those they manage to dig up themselves. This they bring to the opposition to have brought forward during question period. The opposition spend their mornings going over the latest headlines to see what they can dig up to use during one hour of the parliamentary process.
We on this side take a more positive approach. We are proud of our position. In my view, it is much more representative of the real mood of Canadians. It is a positive and forward planning attitude toward our country, its potential and, indeed, its problems.
The bill before us at this time makes a landmark in Canadian budgetary and fiscal planning.


Mr. Whiteway:: You are right about that.


Alan Gray Martin: The official opposition acknowledges this, Mr. Speaker. For the first time, the federal Minister of Finance has gone out, at great expense and risk to his own position, to consult with the individual provinces as to the details of some of the important points that he was considering in his budget. This was unheard of before but long sought after by economic experts, specialists across the country and, of course, by the individual provinces.
It was a first try, undertaken by a courageous and sincere Minister of Finance in the face of all kinds of parliamentary background to the contrary. It was a bold step undertaken by a bold man, and, Mr. Speaker, it has basically worked. Unfortunately one province out of ten, or I suppose one province out of nine because the province of Alberta was not directly involved, chose to screw up the works.


Monique Bégin: That is not parliamentary.


Alan Gray Martin: Is it really any wonder, Mr. Speaker? After all, we are looking at a situation that could arise somewhere else in the country in the future. We are a very diverse and regional type of country. At the present time one province in this country is led by a premier who makes no bones about the fact-and I respect him for his frankness and candour-that his objective while in power is to lead the 28 per cent of Canadians who live within the borders of Quebec out of confederation, out of their country and out of our country, which for 111 years we have jointly enjoyed as Canadians one and all. It is disappointing, but hardly surprising.
My hope is that the current discussions now going on at the deputy minister level will help to resolve this impasse which is all too reminiscent of a similar situation over revenue sharing
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which occurred in 1953 under another government in Quebec.
It happended to be the same province. It was a situation that the official opposition might well note today. It did them and their leader no good in their vain attempts at the time to capitalize on the situation in a political way during the then forthcoming general election which, interestingly enough, came within months of the height of the impasse.
Canadians in all provinces then recognized, and will once again recognize, the craftiness, the devilry, the crass political opportunity of such a move. They will again return to power the national leader who represents the best interests of all sections of this country and continues to maintain a solid position in support of one Canada from coast to coast, made up of diverse regions and provinces, with local culture, linguistic and economic interests, but united in one solid determination to remain together in the larger aim of protecting their national accomplishments and identity, geographic and economic, above all else. This is the kind of objective the leader of this party and the members on this side of the House will pursue, a positive and meaningful objective of which all Canadians can be proud.
We continue to hear in the course of comments coming from members on the other side of the House indications of gloom and doom in the country. We do not hear of anything positive. They assume it is not in their interest. I would question that because, when the chips are down, I wonder how many Canadians would solidly support a bunch of people traversing this country from coast to coast telling them how bad their situation is. It will not happen. It has not happened over the last 15 years and it will not happen the next time either.
I now wish to talk about one or two other areas. The first is the anti-inflation program. Millions of workers recognized the need for such measures and, indeed, supported them. Admittedly, the leadership of organized labour tended to oppose the program, but the millions of workers involved did recognize the need and supported it throughout.
One result of the program-


An hon. Member:: What about inflation?


Alan Gray Martin: I shall speak about the inflation rate in a few moments.


An hon. Member:: What about the unemployed?


Alan Gray Martin: I do not intend to talk about unemployment. On this side we talk about positive aspects. We intend to increase the employment rate from the level of 92 per cent which presently exists in the country. I might note that the hooting and hollering on the part of the opposition is an indication of nervousness on their side.
As I was saying, one result of the program has been that increases in wage settlements have declined from an average of 17 per cent in 1975 to about 7 per cent currently. The anti-inflation program has done much to help relieve Canada's

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competitive situation. Productivity figures are similarly worth noting. We have seen 40 per cent growth over the past ten years, a considerably better record than that achieved in the United States, a country often held up as a country we might follow. Elere is an indication that we have performed singifi-cantly better than our neighbours to the south. Yes, there are soft spots in the economy, but the important thing is that Canadians under this government have not lost their will to work and are sharing the benefits.
It is this positive approach to the problem confronting us which will receive, ultimately, the support of voters across the land. There are other like items in this list of achievements and I shall turn to them later.
From 1969 to 1976, the average income of Canadians increased 25 per cent in real terms. Personal disposable income per capita increased by 118 per cent in that period, during the Trudeau years. Real per capita disposable income-that is, what is left after allowing for inflation and other relative factors-rose by nearly 52 per cent, more than double the increase in the United States. Even when the same test is applied on a "per employee" basis, disposable income rose by 23 per cent as against 12.3 per cent in the United States. Mr. Speaker, we do not hear these figures which Canadians ought to hear about. Hopefully the media will be sufficiently responsible to make sure they do.
The conclusion is clear. By working together-the federal government and the provinces, the public and the private sectors-we have coped with inflation and with the world economic crisis, not painlessly but with greater success than most other countries. Canadians have not only kept pace but are better off than they were ten, five or even one year ago. During the decade to which I have referred, the number of Canadians living below the poverty line has been cut dramatically to less than half the figure in 1968 when the Prime Minister (Mr. Trudeau) took over the leadership of the party. Mr. Speaker, these are not unsubstantiated claims. This is not wishful thinking on the part of representatives on this side. They are facts, and I believe it is important they should be put into the record.
There are so many examples I could use in accentuating the positive that it is necessary to be selective. Reference was made by the previous speaker to the Organization for Economic Co-operation and Development. I wonder if he realizes that between 1973 and 1976, the peak period of crisis, Canada had the third highest rate of growth in the western world-not a bad accomplishment in a difficult period. The OECD has forecast that this year Canada's economic performance will again outstrip that of such countries as Germany. We shall outstrip France and Britain but lag somewhat behind the United States and Japan. The OECD goes on to say that Canada's real economic growth will be second only to that of Japan and our inflation rate the third lowest after Japan and Germany.
Unfortunately, this is not the way we hear the story from the other side of the House. And very often this is not the way the media present the picture, though there are responsible

articles written quite frequently in the papers paying attention to the positive side of our achievements. Needless to say, they are not picked up by members across the way-I doubt whether they ever get beyond the front pages. All their concentration each morning is centred upon scanning those pages to determine what their program is to be for the crucial hour between two and three o'clock.
According to the most recent figures available to OECD, Canada with a per capita income of $8,400 comes third among the major industrialized countries. The U.S. is in fourth place, some $500 behind. Again, this is not wishful thinking, not speculation, but fact reported by an independent organization. This is in sharp contrast to the wild and woeful meandering of the groups opposite.
Mr. Speaker, I would like to conclude my remarks by summarizing a few of the areas in which perhaps we have failed as a government. Perhaps we have been so preoccupied with governing the country, looking ahead and coming up with positive solutions, that we may have failed adequately to report the kinds of accomplishments which have indeed been achieved. If, indeed, that is our failure, it is not a bad place at which to have failed. We have done the job, but perhaps our communication back to the people has not been as good as it might have been. It is obvious, of course, that we cannot count upon people opposite to help us in this regard. We have seen enough of their doom and gloom attitude to have the distinct feeling that members on this side are going to be much more conscious of our accomplishments in the weeks to come and will make a greater effort to get the message across this great country.
Here are some points I would like to make. We have the largest number of people working than we ever have had before. This, in itself, is not a bad statistic. It is a very important statistic. We have a larger percentage of population employed than at any previous time.


An hon. Member:: What about the unemployed?


Alan Gray Martin: There you are, Mr. Speaker. I talk about the employed-a figure in the region of 90 per cent-and yet we hear the question: What about the unemployed? Of course we are concerned about the unemployed. Why do we have unemployment insurance programs? Why have they been constantly revised by this government in order to make them more meaningful? It is because we care. But we also care about the opportunities for the 92 per cent and more who are employed.
I think they are very important as well.
We have the largest ever growth of income. We have the largest ever real income. We have the largest ever average income. More new jobs are created annually than ever before. More students are inclined to seek employment. There are more people in the average family unit who are employed. Certainly we can wish to do better. Our aim is to continue to do better.
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I am delighted that the Minister of Finance is in the House tonight. I wish he had been here earlier when I spoke about what a bold and positive step he had taken this first time ever to consult the provinces in a very worthwhile effort to make the budget system much more meaningful and representative across this country. He was responsive to the thinking and to the advice of many people across the country. I think that kind of responsiveness is indicative of this government as we move along day by day, week by week and month by month. That story will be told because we on this side are going to make a point of telling it.
In conclusion, I would like again to say that the effort the official opposition and other opposition parties are undertaking at the present time is a very poor reflection on the hard working attitudes of most Canadians. I say honestly that as they re-examine their position over the coming months when, presumably, they will also be getting ready for an election- although one would never know it-they should consider coming to the people as a responsible group.
Members of opposition parties should not be saying that the country is in bad shape and that people should be putting them in power. They should not be telling people that the country is in horrible shape and that people should understand that, if they do not already. That kind of talk has never worked in the past, and it certainly will not work this time around.


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, tonight we have the opportunity to talk about taxation in Canada and about the general economic policies of the government. The bill before us is a result of the budget of the Minister of Finance (Mr. Chretien) which was supposed to attack the economic crisis facing Canadians today of record unemployment, inflation, a falling dollar and so forth.
The major innovation in the budget was the temporary reduction of provincial sales taxes with the federal government making up the difference for the provinces. It was indeed a bold and new idea. Unfortunately, this measure has served to bring the whole problem of national unity into greater focus and to disrupt attempts to calm bad feelings between the provinces. Quebec seems very much opposed to this provision. It feels the provision is an intrusion on provincial jurisdiction. This has been discussed at length.
Tonight I want to deal with what I see happening to our income tax system both at the personal income tax level and at the corporate income tax level. I think it is important that we discuss the rather negative trends which I see developing and about which constituents from all walks of life constantly complain to me.
There is the old adage that there are two things in this world which are certain, death and taxes. We all realize that we will have to continue to pay taxes because we receive something in return by way of government services, whether they be old age pensions, medical care, unemployment insurance, airports, railways and so forth. We cannot get rid of them, but I think
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we can do something about seeing that the taxes we all pay are fair.
When we look at our tax system, budgets which have been introduced and tax laws which have been passed under this Trudeau government, two very important conclusions strike us in the face. First, the tax system is becoming more and more regressive. The burden of taxation is being shifted down the income ladder. Low and middle income earners are paying more in taxes, and high income earners are paying less. Second, the burden is being shifted from corporate taxation to taxation of individuals. We have all accepted-or I thought so-the idea of a progressive income tax system and the concept that people should pay taxes based on their ability to pay. People at lower income levels should not be burdened with heavy tax loads, but as people move up the income ladder they can afford to pay more taxes.
We do not levy the same amount of tax on every person regardless of his income. We graduate taxation on a progressive scale. That is the theory. That is what we assume is happening. But when we examine the situation, we find that the contrary is the case.
I would like to illustrate what I mean. Anyone who fills out an income tax form knows that there are various exemptions. There is the basic exemption, the child exemption, the marriage exemption and other exemptions. These exemptions reduce income subject to tax. However, unfortunately, according to the way the system works the value of exemptions increases with a taxpayer's tax rate. In other words, the maximum advantage goes to those at the top end of the income scale rather than to those at the middle and lower parts of the scale whom one would think a progressive income tax system should benefit.
For example, let us consider the value of an additional $1,000 tax exemption. Let us assume that a taxpayer is married and has two children under 16 years of age to support. If that taxpayer's gross income is $10,000, that $1,000 exemption would have a tax saving value of $266. Let us climb the income ladder and consider a person who earns $25,000. For him that same exemption is worth $300. Let us consider the taxpayer who earns $50,000 a year. The value of his exemption jumps to $510. In other words, the more a person earns, the more his tax exemptions are worth in dollars.
The same thing happens with exemptions for the aged, the blind and the disabled. All the deductions which can be taken are worth more to people with high incomes. For example, a person who earns $30,000 a year has a tax saving of $62 because of the Canada Pension Plan deduction, but a person who earns only $9,000 a year saves only $37 as a result of the CPP deduction.
If we are going to have a fair and progressive tax system, we should replace the whole idea of tax exemptions with the concept of tax credits. In other words, every taxpayer should be given the same tax credit in dollar terms and then we should either apply a surtax to people at higher income levels or provide a cut-off point at which a tax credit is not given to someone at a certain higher income level. The whole concept

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of exemptions tends to negate the idea of a progressive tax system.
There is another feature in our income tax system which, I submit, is very regressive and very negative, and that is the concept of indexing taxes. This began in 1974 as protection against inflation. Our taxes were adjusted each year to take into account the rise in the consumer price index so that we would not be pushed into a higher tax bracket and have to pay more taxes.
This idea was first proposed by the Conservative party and later adopted by the Liberals. The idea of indexing seems logical, a way to protect the taxpayer from inflation. But again when you examine how it works, you find the result is that greater benefits go to upper income earners. Then one has to ask oneself: Where is the fairness in that kind of procedure if we believe in a progressive tax system?
For example, if you take the total tax savings from 1973 to 1977 of different income groups-and this includes income tax-this is the result of indexing: if your total income was $10,000, because of indexing you get a cumulative tax saving over those years of $671. If your income is $25,000 a year, your tax saving jumps to $1,663. If your income is $50,000, your tax saving increases to $2,573. In other words, the more you make, the more you save in taxes because of indexing. The cumulative annual cost of indexing by 1977 was some $5 billion. That is $5 billion less revenue for the federal treasury to carry on the programs that we as Canadians want and need.
I submit that indexing is justified to protect taxpayers against inflation, but to make it fair we should apply indexing to a system of tax credits, not to the current system which I have just described.
There are other tax shelters which again indicate that our tax system is very unfair. Let us take, for example, the investment income deduction. The first $1,000 of investment income or interest income from a bank deposit is, of course, tax free under our system. If your income was $10,000 a year, the value to that typical taxpayer, married with two children, is $266 in tax saving; but if your income is $25,000, that value jumps to $379. If your income is $50,000, you save $510 because of that provision.
Consider, for example, the registered retirement savings plan. In 1974, the cost of this program to the federal treasury was $513 million, and it has been in effect ever since. If your income is between $10,000 and $15,000 a year, your average saving is only $9.81, and that group of taxpayers represents 18.7 per cent of all taxpayers in Canada. But if your income is $15,000 to $20,000 a year, under the RRSP provision you are able to save $125 a year, but that income group represents only 6.8 per cent of the taxpayers. If your income is over $20,000, you have an average saving of $551.88, yet that income group represents only 4.6 per cent of all taxpayers. Therefore, we see that just under 5 per cent in the over $20,000 a year bracket had just over 57 per cent of the tax savings in 1974 from the RRSP. Again, the income tax system

favours the wealthy and allows them to avoid more and more in taxes.
The same thing could be said of the registered pension plans. Again we see the same kind of trend in the registered home-ownership savings plan. Consider child care deduction, of which so many taxpayers take advantage. If you have a two child family in the $10,000 income range, you would save about $210 in taxes, while a family in the $50,000 and over range would save $430 under the child care deduction scheme. We hear the Minister of Finance say, whenever he talks about this in budgets, that the child care deduction was supposed to help lower and middle income families who need help most. In reality, when we examine how the tax system works, we find that it helps the upper income level more. If you go through our tax system, you begin to see the unfairness developing.
What is fair about the situation that occurred in 1975 when, according to official statistics, we had 305 people earning over $50,000 a year, and quite legitimately under our income tax system they did not have to pay one cent in income tax because of all these deductions? Something is very, very wrong and I think the average wage earner knows it when he looks at the way the tax system works.
Surely we need a progressive income tax system that is fair. Yet when we look at the evidence, we see that the personal tax system as it is presently structured is not fair. Indeed, I should like to put on the record a quotation from a study done by the Economic Council of Canada in 1972 which found the following:
While government expenditure programs may contribute to the redistribution of income, the tax system as a whole does nothing to contribute to this goal. Indeed, over the lower portion of the income scale the system tends to contradict the ability to pay principle by taxing the poor at a higher rate than those who are better off. The effect of the few taxes that are progressive is completely offset by the remainder of the taxes in the system.
That study is just as valid today in 1978. Indeed, the National Council of Welfare published a report in November of 1976 which estimated that the cost of just 17 of these 60 tax subsidies and tax breaks in our system was some $6.4 billion. That is an incredible sum. We find that taxpayers earning over $50,000 a year received an average $4,000 in annual tax break benefits, but taxpayers earning less than $10,000 received less than $500 from the same tax break provisions. Yet the Minister of Finance is trying to argue that we have a progressive, fair and just tax system.
So if you look at the personal income tax side of the equation, you see that the burden of taxes is falling on the lower and middle income group and that the upper income group is taking advantage of all these exemptions, thereby undermining the whole concept of ability to pay and of taxation being progressive.
The second phenomenon that is happening with our tax system is on the corporate income tax side. Here we find that the tax burden is also being shifted, but it is being shifted away from the corporate sector of our society to the backs of individual taxpayers. I have done some studying and I find that tax incentives to big business-not to small business
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because under this government the small businessman has to beg for funds and is usually turned down-is in excess of some $6 billion a year, when you average it out over the past few years of this government's budgets. I am including here the direct tax deductions and also the various tax deferrals.
The theory of all these corporate income tax breaks is that they will help stimulate jobs. Indeed, in the last budget or mini budget of the Minister of Finance we found that companies like Inco were given tax breaks in the millions of dollars. What was the result? There were layoffs by the thousands. The same kind of thing happened in respect of companies like Northern Telecom which has laid off over a thousand workers, and Alcan in Newfoundland.
I could go on and on indicating how these tax cuts, which were supposed to benefit the economy through stimulation and job creation, are not working. Indeed, this is money down the drain. It is less money for the federal treasury, and if corporations are paying less in taxes you know who has to make it up. It is made up by you and me as individual taxpayers, Mr. Speaker.
We have this phenomenon of corporate taxes declining while corporation profits increase. These tax breaks are not creating the jobs we were promised. We also find that the effective tax rate of corporations was 29.6 per cent in 1970 and that it declined to 26.6 per cent in 1975. Corporations are contributing less proportionately to the federal treasury than ever before. If we look back a few years we find that in 1950 personal income taxes contributed about 20 per cent of total federal revenues, and in the same year corporate income taxes contributed 28 per cent. By 1974, the last year for which statistics are available, personal income taxes contributed 38 per cent of federal revenue whereas corporate taxes contributed only 16 per cent. Indeed, we see quite clearly that corporate contributions as a percentage have been declining.
The tax breaks to large corporations are costing Canadian taxpayers more each year than federal spending on health care, old age pensions or other programs the government argues it must cut back on because it does not have the money.
I submit that we need drastic reform of the whole tax system. We will not get it from Liberal or Conservative members. Both those parties oppose the Carter royal commission recommendations on taxation. They argued for the idea of a progressive income tax system, that a buck is a buck and that you cannot get around this idea of progressive taxes by implementing all these exemptions and tax deductions which benefit the upper income Canadians. That is what the Carter Royal Commission recommended, and the opposition from big business and a number of Conservative and Liberal members was immense indeed. Thus the main recommendations of that commission have not been implemented. We as taxpayers, certainly as individual taxpayers in the middle and low income levels, have been paying for that ever since.
If we cleared our personal and corporate tax systems of these unfair subsidies, especially for the wealthy and for the
Business of the House
large corporations, then taxes for ordinary Canadians, workers, small businessmen and farmers could be cut substantially. At the same time, our federal government would have new revenues to supplement existing social and economic programs.
Surely we have the opportunity to use our tax system to bring about fairness, to try to help end the anomalies and injustices that burden so many of our citizens who are trying to make ends meet, facing horrendous mortgage payments or rents, seeing the cost of the necessities of life increasing every day, and who want some economic justice but do not get it from this government, especially in the field of taxation. Instead they find that the system comes down hard on those who can least afford to bear the burden.
Surely if we consider ourselves a civilized country we should end this discrimination in our income tax system. We should be moving toward the concepts advocated by the Carter royal commission on taxation. We should be closing the loopholes and making the very wealthy sector of our economy, in terms of the large corporations who have received from this government since the Prime Minister took office some S10 billion in deferred taxes, pay its share. This $10 billion deferral has been allowed without interest. If you or I, Mr.Speaker, happen to be late in our income tax payment, we have to pay interest; but not these corporations with $10 billion in deferred taxes.
We should begin to collect some of that money and put conditions on the other tax breaks we give. I am not suggesting we should never have tax breaks, but we must put some iron-clad conditions on them in respect of job creation and economic expansion, instead of just signing a blank cheque for these corporations to bank the money.
We have to get our economy back on the road. We cannot tolerate much longer the horrendous cost of over one million unemployed. This is a cost in terms of less tax revenue coming into the federal treasury and in terms of unemployment insurance payouts. Canadians want to work. They do not want welfare. When I look at the economic policies of this government I become very, very discouraged and disheartened. There are opportunities to bring about reform, and one of the areas where we can start is in respect of the income tax system, so as to lessen the burden on those Canadians who work so hard only to see their earnings dissipated because of an unfair tax system.
We need a government that will use these new found revenues by implementing a fair tax system to institute economic programs that will get Canadians back to work and this country on the road to prosperity again.


Donald Frank Mazankowski: Mr. Speaker, in light of the hour I wonder if I might call it ten o'clock?


BUSINESS OF THE HOUSE
Steve Eugene Paproski: I rise on a point of order, Mr. Speaker. I should like to know whether there is a minister or a member

June 1, 1978
Adjournment Debate
on that side who could tell us what bill we will be debating tomorrow. If there is someone who would be so kind as to let us know, it would be appreciated.


Mr. Harquail:: Yes, Mr. Speaker. It is the government's intention to continue with the debate on the finance bill, Bill C-56.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Wally Firth (Northwest Territories):: Mr. Speaker, yesterday I directed a question to the Minister of Indian Affairs and Northern Development (Mr. Faulkner) concerning funding for the Dene nation and Metis Association in the Northwest Territories. I understand the association has not yet received funding for what I believe is referred to as the first quarter of this fiscal year. The association is in the sad circumstance now that it will have to layoff staff soon if funding is not forthcoming. This would not do much good for those people the association represents. The association will have to let go trained staff who have learned to work in the area of research, and so on, into land claims for the native people of the Northwest Territories, a rather specialized field. There are not many people who work in that area, and should the Metis Association be forced to lay their trained staff off and funding is resumed further down the road, the association will then have to find other staff. It is very likely that those people now working for the association will take other jobs because they have to pay the rent, feed their children and put bread and butter on the table like anyone else.
The minister made mention of a moratorium. I understand that he has communicated with the Dene nation and the Metis Association on this matter. Unfortunately, that will not be of much benefit to the people of the Northwest Territories at this time. However, the situation may come up further down the road and perhaps at that time I may be in a position to support the minister should that happen. I certainly hope that it will not.
I raised this question about funding because the organizations are very concerned about it. 1 would like the minister or his parliamentary secretary to elaborate a bit more on the reply which I received yesterday in this House, at which time the minister mentioned again the idea of moratorium. Perhaps the minister or his parliamentary secretary could let me know

what the intentions are regarding the funding of these organizations. It is my sincere hope and belief that the two organizations will soon be co-operating and working together toward a fair and just settlement claim for the native people along the Mackenzie Valley, but they certainly will not be able to do this without funds.
I want to make it clear, Mr. Speaker, that it is indeed a very serious matter, and I wish to hear what the parliamentary secretary has to say on this.


Mr. Ross Milne (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am pleased to respond to the concern raised by the hon. member for the Northwest Territories (Mr. Firth) and to elaborate on the comments made by the minister in this House yesterday, Wednesday, May 31, in question period respecting the funding of native organizations in the territories.
I would like first to recap briefly that two of the native organizations in the Northwest Territories, the Committee for Original Peoples Entitlement and the Inuit Tapirisat of Canada, have received loans totalling $903,395 and $3,239,607 respectively to the end of the fiscal year 1977-78. In the current fiscal year, funding will be going forward to both COPE and ITC in the amount of approximately $1 million to each organization. Although funding has not yet been advanced this fiscal year for the two native organizations in the Mackenzie Valley, the Dene nation or Indian Brotherhood of the Northwest Territories, and the Metis Association of the Northwest Territories, the fact of the matter is that no decision has been made to impose a moratorium to date.
All members should be aware, as is the hon. member who put the question, that the government has funded both these organizations, in the past for claims research, proposals formulation and negotiations, to a total of $2,509,489; $1,405,000 of this has gone to the Indian Brotherhood of the Northwest Territories since 1975-76, with the remaining $1,104,489 to the Metis Association of the Northwest Territories since 1976-77.
I would like to elaborate on why the government has accepted separate claims from the two organizations, yet has taken the position that there must be only one settlement for all native people in the Mackenzie Valley. Prior to pronouncement of the Dene declaration in 1975, all native people in the Mackenzie Valley were united behind a common cause. When the Metis Association in 1976 announced its non-acceptance of the Dene declaration as a basis for a claim proposal, the government considered it important that the aspirations of the Metis Association of the Northwest Territories membership be known before negotiations began. Consequently, the Metis Association of the Northwest Territories was funded separately to research and develop its own claim.
The government's position has been constant since submission of the Metis Association of the Northwest Territories claim in September 1977, now that both claims are in, that a
June 1, 1978

mechanism must be established to have the views of all native people in the Mackenzie Valley represented at the negotiating table, as the Indians and Metis live together in the same communities, share the same resources, and are regarded by everyone as one people.
I might just make two additional brief comments, Mr. Speaker. Given the present situation, there is a need for both groups to reach agreement on a process for joint negotiations. This could mean, for example, an umbrella structure, or alternatively, both groups could come to the same table as separate entities. The Mackenzie Valley chiefs have stated that they intend to deal with this matter at a leadership meeting later this month. In the meantime, a decision on first quarter funding will be made within the next few days.
Given the need for a single settlement, further claims research and negotiations funding is entirely dependent on both organizations coming together. Hopefully, an understanding between the organizations can be reached after the Dene leadership meeting in June so that the negotiations can proceed and the necessary supportive funding be continued.


EXTERNAL AFFAIRS-APPOINTMENT OF AMBASSADORS TO AND BY FOREIGN COUNTRIES
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, on February 22 I asked the minister about the prospects of the establishment of embassies in Amman and Damascus. While congratulating him on his announcement of the opening of a Canadian embassy in Kuwait, I questioned him as to when the Kuwaiti government would be sending an ambassador solely accredited to this country.
As my learned and most respected friend the parliamentary secretary knows, I have urged repeatedly the improvement of contacts between Canada and the peoples of the Arab world. Commercial, social, cultural and diplomatic ties could be strengthened with a group of nations with which there are no reasons for anything but cordial relations with Canada. The economies of many of the countries of the Arab Middle East are developing in such a way as to offer major opportunities for Canadian investment and technical co-operation. It is my experience from frequent visits to these countries that Canada often lags behind other more alert and aggressive trading countries. Considering the slack state of our own economy I think it would be shocking neglect to miss opportunities in the outside world.
While much can be done and must be done by the private sector, the government can assist in strengthening government-to-government contacts, in obtaining information, and by using agencies such as the Canadian Export Development Corporation in reference to those Arab countries not wealthy through an abundance of petro-dollars. Not all Arab countries are facing grave problems of what to do with their money! Some need assistance in infrastructure and especially technical aid.
I fear we have not taken advantage of an opportunity offered by the Kuwaiti fund for development whose director 1 met here in Ottawa a few years ago. It was his suggestion that,
Adjournment Debate
through a marriage of the fund's finances and CIDA's technical know-how, much could be done. I believe it was a most useful suggestion and I would have been happier had the Canadian response been more fulsome and interested.
If I recall aright, when I came to the House of Commons in 1957 we had embassies in the Middle East only in Lebanon, Israel and Egypt. I many times called for exchange of diplomatic missions with other areas of the Arab world, notably Iraq, Saudi Arabia and the Gulf Emirates. Over the years this has been done and one can see clearly that improved trade and investment contacts have followed. Canadian businessmen are involved in major projects in Saudi Arabia. One of these is the construction of what will be one of the most splendid and costliest universities in the world. I am happy that we have missions in those beautiful Magreb countries, Tunisia, Algeria and Morocco.
But there are two countries whose importance in the Middle East, and more specifically in Middle East tensions, cannot be overestimated. These are Syria and Jordan. They are confrontation states vitally concerned with the future of the Palestinians whose status, as is now almost universally agreed, is the core of the Middle East problem.
As a founding member of the United Nations which created Israel, as a member of the Security Council and as the provider of peacekeeping forces in the area, Canada must and should be vitally interested in the establishment of a just and durable peace in the area. I do not think we can do our job or play our part without close contact with Jordan and Syria. We need a presence, a listening post, a place for regular dialogue with those pivotal countries. For the immediate and urgent requirement of the current troubles and tension we should be there. Beyond that exist many reasons for strengthening our ties with those two countries who are working out their destiny under different forms of government but to whom peace today and prosperity today and tommorow are vital.


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I wish to commend my hon. colleague and friend, the distinguished member for Hillsborough (Mr. Macquarrie), for his great interest in the Arab countries, more particularly Jordan and Kuwait. Since we are going to establish a new embassy in Kuwait it goes without saying that we would be delighted if Kuwait would create a mission in Ottawa. Nevertheless, nothing at present indicates that Kuwait intends to open a mission in Ottawa in the immediate future.

Needless to say, Mr. Speaker, no state has unlimited funds for the purposes of diplomatic representation. Still I am sure that the presence of the resident mission of Canada in Kuwait would improve our bilateral relations in our best respective interests and it is not unreasonable to hope that as a result of closer relations, the government of Kuwait will one day open an embassy in Canada.

June 1, 1978
Adjournment Debate
As for Amman and Damascus, I agree that it would be most desirable to have an embassy in one or even both those very important capitals. We do not have the necessary resources to do so now or in the near future. It was possible to do it in Kuwait following the closing of our mission in Johannesburg. As we do not anticipate the closing of other missions, we must be satisfied with multiple accreditations from Beyrouth which is fortunately well located to deal with those two important cities of Amman and Damascus. I regret to disappoint my hon. colleague.


INDUSTRY-CANADA-U.S. AUTO PACT-EQUITABLE SHARING OF BENEFITS
Mr. Derek Blackburn (Brant):: Mr. Speaker, two weeks ago I directed a question to the Minister of Industry, Trade and Commerce (Mr. Horner) concerning the government's plan to subsidize the construction of two new auto parts plants by General Motors and Ford Motor Company of Canada to the tune of $116 million. I asked how the government could contemplate subsidizing these two multinational conglomerates when, according to the spirit of the 1965 Auto Pact between Canada and the United States, these firms are already committed to investing in Canada.
The minister was evasive. He quoted from the Auto Pact and he also replied that we had a surplus of $2 billion in automobile manufacturing in Canada last year. What the minister forgot to mention is that Canada had an auto parts deficit of more than $3 billion last year, which completely erases our surplus in assembled vehicles shipped to the United States and leave us with a deficit of over $1 billion.
The fact is, Mr. Speaker, that Canada is not getting its fair share of the automotive trade. The Auto Pact has become a joke. Canada has had a deficit in ten out of the 13 years since the Auto Pact was signed, a deficit that has totalled more than $7.5 billion. The deficit in our auto parts trade is even worse. Since 1965 we have had a deficit on parts trade with the U.S. of just under $19 billion. At the present time there is a shortfall of about 25,000 jobs between what we should have as a fair share of the total employment in the auto industry and what we actually have.
The auto industry is now planning for its biggest re-tooling since the 1920's. Ford and GM have announced they will be spending at least $20 billion each between now and 1985 to re-tool for new emission and fuel economy standards. Within the spirit of the Auto Pact, this commits each of them to a level of investment in Canada in the range of $275 million each and every year for the foreseeable future.
Canada cannot hope to get a large share of the investment in the auto industry that is going to be made over the next few years, and the jobs that go with that investment, unless the federal government exerts pressure on the auto manufacturers to spend more of their investment budget in Canada. The major auto manufacturers have been remarkably reluctant to

spend a fair share of new investment in plant and equipment in Canada. Just looking at the past few years, our share of the new car market has been between 9 per cent and 10 per cent. Our share of new investment funds has been down around 5 per cent.
Pressure must be put on the auto industry right now to make sure the auto manufacturers live up to their investment commitments in Canada. I would like to know what the Minister of Industry, Trade and Commerce is doing to ensure this, besides offering $116 million of the taxpayers' money to Ford and GM to invest in Canada when they are bound by the Auto Pact to invest anyway.
The government must immediately begin negotiations with the auto industry regarding the Auto Pact. We must have guarantees that the number of jobs, the amount of new investment, and the research and development expenditures will be commensurate with Canada's share of the auto market.
The government has so far failed to offer a credible response to our growing auto trade deficit. Most of the planning for the conversions to smaller, more energy efficient cars is being made now. I would like to impress upon the government that we are running out of time. Decisions will be taken in the next two years that will affect the auto industry for the rest of the century.
In Ontario, one in seven jobs is directly or indirectly related to the auto industry. These jobs must be protected. The former minister of industry, trade and commerce has admitted that our current auto trade deficit is "too big to swallow". I would agree with that. The only question that remains is, when will the government insist that the auto makers do something about it, and why has it not begun to insist already?
What we are looking for as far as the Auto Pact is concerned is a fair deal. We do not say we should have more than the American workers. The Canadian workers are agreed upon this. As far as the Auto Pact is concerned, auto workers in Canadian subsidiaries of American auto corporations, particularly in the parts manufacturing industry, are well aware of the fact we have been sold down the river since 1965. We have a tremendous deficit vis-a-vis the United States. It is time that jobs were created in the automotive industry in this country and that there is parity between the cost of cars made in this country and cars made in the United States. I see no reason why any model of car should cost $100, $200 or $300 more in Canada than in the United States if that car was made in Canada. I do not understand why consumers in Detroit can purchase an automobile manufactured in St. Thomas, Ontario, for $100, $200 or $300 less than someone in Canada.
The minister is not here this evening. I do not expect him to be here at this late hour. Not even his parliamentary secretary is here. It is a damned shame there is no one from his department here tonight for the last three minutes of this period to rebut what I have been debating. There is no one from the cabinet here to answer the question I have put forward regarding bringing the Auto Pact up to date, so that we have more investment and jobs in this country, jobs that will create more money, and so that Canadians can buy more
June 1, 1978

cars. That is what it is all about. As I say, it is a damned shame there is no one here to reply. There is only one member of the entire Liberal party on the other side of the House tonight.


Maurice Dupras: Mr. Speaker, I wish my distinguished colleague would not judge the interest of our party in the automobile pact question by the absence of most of my hon. friends. The minister and his parliamentary secretary have made a commitment which they could not break and they could not be here to speak tonight. Nevertheless, I shall attempt to answer the observations of the hon. member with regard to the automobile agreement.

First of all, Mr. Speaker, I should like to refer to the main points mentioned in his presentation, namely a fair share of the auto production, the loss of 25,000 jobs in the automobile industry, and finally the payment of subsidies to the industries in that sector.
First, the fair share. Paragraph (c) of the Auto Pact reads as follows: Development of conditions allowing the market forces to interact efficiently for the most economic development of investments, production and trade. No mention is made of the automatic right to a "fair share" of jobs, production or investments. In fact, no mention is made in the agreement of jobs. The fact that one country or the other gets more or less than of its fair share should be determined, according to intent of the agreement as I understand it, by such factors as the relative cost of production in the two countries and the relative return of new investments.

The attainment of a "fair share" of production and investment is obviously the objective. We achieved and surpassed
Adjournment Debate
this objective in the early 1970's when production costs and returns on investment were in our favour. The route to reachieving this objective is not to require companies to invest in less than economic propositions in Canada. It is to recreate conditions in which it is in the interests of the industry itself to invest in Canada.
We are working with both the vehicle industry and the parts industry to demonstrate to them that, in large measure, these conditions have been recreated and that it is in their interests to invest in Canada.
The number of jobs that we are reputed to have been shortchanged under the automotive agreement keeps escalating. I assume that the 25,000 number has been taken from a report prepared by the treasurer of Ontario. We have trouble with the arithmetic contained within that report. Almost 6,000 of the 25,000 jobs we are reputed to be short are in vehicle assembly. Statistics Canada reports that we have a trade surplus with the United States of over $2 billion in completed vehicles and that we exported almost $600 million of North American vehicles to third countries. It is beyond me how the treasurer could conclude that we are short of jobs in vehicle assembly when in fact we have a substantial surplus. Were we to achieve automotive agreement trade balance, which would be my definition of fair share, we would have additional automotive employment of about 5,000.
I see, Mr. Speaker, that you are about to rise to tell me my time has expired. Perhaps I might simply add that I know the minister is about to make an important announcement in the field of automotive parts.


Mr. Deputy Speaker:: Order, please. A motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at eleven o'clock a.m.
At 10:25 p.m. the House adjourned, without question put, pursuant to Standing Order.


APPENDIX
[Stage Direction]
On May 4th, engineer Alexander Treu was sentenced to two years in prison after a lengthy trial held in camera under the provisions of the Official Secrets Act.
Some members of parliament, under the protection of parliamentary privilege, have taken the liberty of questioning and criticizing the way in which the trial was conducted before Justice Luc Trudel of the Sessions Court.
Although it is admissible to make comments about a judicial decision and to disagree with the Official Secrets Act or with the fact that authorities do not use the notion of national security with enough reservation, the Judge himself cannot be blamed for his obligation is to apply such a law.
It is up to the citizens to place pressure on the legislators in order to change the law or on the cabinet in order to change its attitude.
This Official Secrets Act places the Judge in a real dilemma. Once he has ordered that the trial will be in camera, after the presentation of arguments and representations, since the evidence would constitute a hazard to the security of the state, it is not possible for him, in the name of national security, to publicly justify his decisions and to provide his reasons to the news media.
Once the "in camera status" has been ordered, the logic and the law force him to respect it to the limit. In fact, the Appeal Court has followed the same rationale by demanding that the accused refrain from making comments about this matter, for any consideration, while waiting for the final decision of the Appeal Court, as it had been also ordered by a judge of the Superior Court while he was revising the terms of bail during the trial.
In the name of the respect of judicial independence, we cannot tolerate the remarks of Mr. Gerald Baldwin, M.P., who was wondering whether the law had not been well understood or had been wrongfully applied by the judges.
We respectfully advise him to content himself with doing his own work, that is with the drafting of a better Official Secrets Act, if he feels the present one is unjust and abusive.
The Member of Parliament, Mr. Baldwin, should not pose as an Appeal Court to study the conduct of the Judge of this trial, especially since he is totally ignorant of the facts presented as evidence and of the consent of the lawyers, both for the defence and for the prosecution, since the trial as well as the preliminary hearing were held in camera.
In any circumstances, public interest and the preservation of individual liberties demand that we strictly adhere to the principle of separation of the three powers, that is the executive, the legislative and the judiciary; each citizen must respect their rights and privileges and especially those who hold a position with great responsibilities as is the case for a Member of Parliament.
It seems to us that it would be preferable to leave to the Courts the delicate task of drawing the line between the rights of the individual and the rights of a nation in the application of the law.

[Stage Direction]
Le 4 mai dernier, I'ingenieur Alexander Treu etait con-damne a deux ans de penitencier, au terme d'un long proces tenu a huis clos, sous le regime de la loi des secrets officiels.
Certains deputes, sous le couvert de leur immunite parle-mentaire, se sont permis de questionner et critiquer la fa9on dont le proces s'est instruit devant le juge Leo Trudel de la Cour des sessions de la paix.
S'il est permis de commenter une decision judiciaire et de ne pas etre d'accord avec la loi des secrets officiels ou avec le fait que les autorites recourent trop souvent a la notion de securite nationale, il ne saurait etre question de blamer le juge qui a l'obligation d'appliquer une telle loi.
II appartient alors aux citoyens de faire pression sur le legislateur pour qu'il modifie la loi ou sur le cabinet pour qu'il modifie son attitude.
Cette loi des secrets officiels place le juge dans une veritable impasse. Une fois qu'il a decrete le huis clos, a la suite d'arguments et de representations, a l'effet que la revelation de la preuve constituerait un danger pour la securite de l'fitat, il ne lui est plus possible, au nom de cette meme securite nationale, de justifier publiquement sa decision et d'en donner les raisons aux media d'information.
Une fois le huis clos decrete, la logique et la loi l'obligent a le maintenir jusqu'a la derniere limite. D'ailleurs, la Cour d'appel a suivi cette logique, en exigeant que le prevenu s'abstienne de discuter de cette affaire, sous aucune consideration, en attendant le jugement final de la Cour d'appel, comme l'avait d'ailleurs decrete un juge de la Cour superieure, en revision de ses conditions de cautionnement durant son proces.
Au nom du respect de l'independance judiciaire, nous ne pouvons tolerer les remarques du depute Gerald Baldwin, qui s'inquietait de voir la loi mal comprise et mal appliquee par les juges.
Nous lui conseillons respectueusement de se contenter de faire son travail, soit l'amelioration de la loi des secrets officiels, si cette loi lui apparait injuste et abusive.
Le depute Baldwin n'a pas a s'eriger en Cour d'appel pour etudier la conduite du juge presidant le proces, d'autant plus qu'il est dans la plus complete ignorance des faits mis en preuve et du consentement des avocats, tant de la defense que de la poursuite. A ce que le proces se redoule a huis clos, comme le fut l'enquete preliminaire.
En toute circonstance, l'interet public et la sauvegarde des libertes individuelles exigent que soit rigoureusement observe le principe de la separation des trois pouvoirs, soit l'executif, le legislatif et le judiciaire; chaque citoyen devant en respecter leurs droits et privileges et a plus forte raison, ceux qui occupent un poste de responsabilite comme un depute.
Il nous apparait souhaitable que demeure reservee a la magistrature la delicate tache de tirer la ligne de demarcation entre les droits d'un individu et les droits d'une nation dans l'application de la loi.
[Stage Direction]
Friday, June 2, 1978