1978-11-14

ROUTINE PROCEEDINGS


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, the purpose of Standing Order 43 is to make it possible for the House to deal with something that is urgent. I suggest there is nothing more urgent than the need for the government to review its cutbacks respecting medical and scientific research before it is too late. I therefore move, seconded by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas):
That this House calls on the government to institute an immediate review of its cutbacks respecting medical and scientific research, it being the view of this House that adequate funding of such research is a matter of urgency and that the time to act is now.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I rise under the provisions of Standing Order 43 and ask for the unanimous consent of the House to move a motion relating to a matter of urgent and pressing necessity.
Considering that the Canfarm program is an important service whose objective is to help farmers in the administration of their operations; considering that almost one-third of the farmers subscribing to that program are in the province of Quebec; and considering that the Department of Agriculture has decided to withdraw all financial assistance granted under
that program, I move, seconded by the hon. member for Temiscamingue (Mr. Caouette):
That the House instruct the Minister of Agriculture to reconsider his decision to end financial assistance under the Canfarm program.


Mr. Speaker:: Pursuant to the provisions of Standing Order 43, this motion can only be put with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SUGGESTION NON-RENEWABLE RESOURCES SHOULD BE NATIONALIZED-MOTION UNDER S.O. 43
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my motion arises over the takeover of Pacific Petroleums by Petro-Can. I move, seconded by the hon. member for Nickel Belt (Mr. Rodriguez):
That this House congratulate Petro-Can for its foresight, and urges the federal government to co-operate with the provinces to devise a joint plan to bring all of Canada's non-renewable resources under public ownership.


Some hon. Members:: Oh, oh!


STATISTICS CANADA
Mr. Andy Hogan (Cape Breton-East Richmond):: 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 job vacancy survey by Statistics Canada is being cancelled as part of the $13.5 million spending cut for that department, and in view of the fact that this is the only good measure of demand for labour that we have in Canada, it is obvious that there is political involvement in this cut to avoid embarrassment to the government over the unemployment crisis. I move, therefore, seconded by the hon. member for Northwest Territories (Mr. Firth):
That for the sake of freedom of information in our democratic society, StatsCanada be required to publish the vacancy survey as in the past and with improved regional data.

November 14, 1978


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC SERVICE
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I rise, under the provisions of Standing Order 43, to seek the unanimous consent of the House on a matter of urgent and pressing necessity.
In view of the fact that the unemployment rate in the Sudbury basin is 11.2 per cent, second only to the Atlantic region, the fact that construction of the taxation data centre for Sudbury has been put off until next year because of the government's cutback program, and the fact that workers, provincial leaders and municipal leaders in the Sudbury basin want the project started now, not next year, I move, seconded by the hon. member for Yorkton-Melville (Mr. Nystrom):
That this House instructs the President of the Treasury Board to rescind the rescheduling of the construction of the taxation data centre in Sudbury so that it can be built now.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Yuri Shymko (Parkdale):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity. It relates to the tragic plight of more than
2,000	human beings escaping from the holocaust of genocide by regimes in Southeast Asia, 1,200 of them children, now stranded on a ship off the coast of Malaysia, reminding us of a similar tragic plight of Jewish refugees who were seeking the assistance of humanity prior to World War II.
I move, seconded by the hon. member for Fraser Valley West (Mr. Wenman):
That this House give consideration as the only country in the world to launch a rescue operation with relation to the plight of these people and offer them asylum in Canada.


Mr. Speaker:: The presentation of such a motion for debate can be done at this time only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance: it arises out of answers given yesterday by the minister and by certain of his colleagues with regard to the Petro-Can takeover of Pacific Petroleums Ltd.
Does the minister recall an order in council being filed in this House on October 10 which set out a revised capital budget for Petro-Can, stating it was approved specifically by the Minister of Finance, the revised budget calling for Petro-Can raising either in direct debt, or through share issues, $819 million. If the minister does recall this filing, will he tell the House what he had in mind when he approved that $800 million further capitalization for Petro-Can?


Hon. Jean Chr6tien (Minister of Finance):: Mr. Speaker, I replied in the House yesterday that the buying by Petro-Canada of Pacific Petroleums was announced last week. This was done under the operation of the board of Petro-Canada: they used their borrowing capacity in order to get the necessary funds in American dollars from Canadian banks. This was approved.
As far as the particular question in relation to this order is concerned, I will have to check and give a reply to the hon. member.


Sinclair McKnight Stevens: Mr. Speaker, again the Minister of Finance has avoided answering the very specific question.
Let me go to the Minister of Energy, Mines and Resources, whose name is also included as being one of the three cabinet ministers who approved the supplementary capital budget for 1978 involving Petro-Canada. As this budget includes preferred shares of $64.5 million, common shares of $205 million, and debt financing of $504 million, will the minister indicate to the House what he had in mind, or what he thought Petro-Can was going to do with this money when he granted his approval?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, when 1 answered questions in the
November 14, 1978

House yesterday, I indicated that an opportunity had come to Petro-Canada to make a very significant transaction which members on this side of the House and some members on the other side supported. At that time, the particular deal had not come to fruition: it was not possible to speculate about it at that time. Indeed, it did not come to fruition until late Friday afternoon of last week.


Sinclair McKnight Stevens: The Minister of Energy, Mines and Resources, together with the President of Privy Council and the Minister of Finance, created-or attempted to create-the impression yesterday that this was just another commercial transaction. Yet we find they had already filed, on October 10, a budgetary addition of $809 million, presumably in anticipation of this.
My question to the Minister of Energy, Mines and Resources is: would he like to reconsider his answer, given yesterday, that Canada is not involved, federal government-wise, bearing in mind the provisions of section 14(1) of the act incorporating Petro-Can, which states that corporations may exercise this power only as agents of Her Majesty?


Alastair William Gillespie: Mr. Speaker, I shall need your guidance with regard to this question, because the hon. member has given notice of his intention to raise a question of privilege dealing, I believe, with this point. I am quite prepared to deal with it right now and to cite from the Petro-Canada act the relevant passages; but I would seek your guidance before fully answering the question.


Mr. Speaker:: Order. I shall not be able to deal with the question of privilege until later in the day.


VALUE OF PACIFIC PETROLEUMS SHARES
Mr. Harvie Andre (Calgary Centre):: My question, also, is directed to the Minister of Energy, Mines and Resources. This morning, trading in Pacific Petroleums was reinstituted. The stock was trading at $55, and by eleven o'clock some 280,000 shares had been traded.
Since the market is discounting from Petro-Can's price the shares of Pacific Pete by $10, and since Petro-Canada did not consult with the management of Pacific Petroleums in advance of this purchase and there is no guarantee, therefore, that the management will hang around to protect its investment, my question is: what guarantee does Petro-Canada and, by extension, Canada as responsible for Petro-Canada, have from Phillips Petroleum that the investment of taxpayers' dollars made will not be subject to jeopardy in the event of the deal falling through, in the event of the market being correct that the shares are overpriced or in the event of Pacific's management depreciating the value-


Some hon. Members:: Order.


Alastair William Gillespie: The press release which was issued by Petro-
Oral Questions
Canada and by Phillips Petroleum on Friday dealt with these issues. It clearly indicated that the purpose of Petro-Canada was to obtain all the remaining outstanding shares of Pacific Petroleums; that it had an obligation to seek the support of the management and the board of directors of Pacific Petroleums. Those discussions have already started, and I believe the board of directors of Pacific Petroleums will be meeting later this week to deal with that specific question.


Harvie Andre: On September 26, Petro-Canada issued a statement indicating it had no interest in acquiring Pacific Petroleums, and a number of investors made investment decisions based on that statement. What obligation does the hon. gentleman feel he has to those shareholders who made investment decisions based on that statement by Petro-Canada, an agent of Her Majesty?
Is he aware that Petro-Canada and the Government of Canada are open to a class action suit by the previous shareholders in Pacific Petroleums who sold their shares on the basis of a categorical statement by Petro-Canada that it had no interest whatsoever in Pacific Petroleums?


Alastair William Gillespie: There has been a considerable amount of speculation in the marketplace with respect to the shares of Pacific Petroleums. I saw a letter from "the street" dated October 21, from one of the brokerage houses, indicating there was a very good chance that there would be a takeover of Pacific Petroleums if only for the reason that it was thought to be known that the ownership of the shares-that is to say, Phillips-would be available at a price of about $65.


Harvie Andre: In early September, the President of the Treasury Board, during a cross-Canada tour publicizing his so-called budgetary cuts of $2.5 billion, stated in Edmonton that much of the money being cut from the budget would be reinvested in Alberta in the oil industry, in an equity position, to enhance federal government control. Was the President of the Treasury Board referring at that time to the acquisition of other oil companies, including Pacific Petroleums, by Petro-Canada?


An hon. Member:: I hope so.


Alastair William Gillespie: If the question is meant for the President of the Treasury Board, I think it should have been so directed.


URBAN AFFAIRS
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, 1 would like to direct a question to the Minister of State for Urban Affairs. Most of the cities and municipalities of Canada have been very interested in participating in the community

November 14, 1978
Oral Questions
services grants program which funds the Neighbourhood Improvement Program and sewer and water extensions.
In view of the discussions which the Minister of Finance had with provincial ministers of finance about a week or ten days ago, in which he indicated that this program would be discontinued or put back to a later time, is there a community services grants program with a budget for 1978 and, if so, of what does it consist?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: Mr. Speaker, at the federal-provincial meeting of ministers of finance there was a consensus to delay the implementation of the community services grants program for one year. Therefore, this program will not operate in 1978. I understand that municipal incentive grants and sewage treatment programs will continue until December 31, 1978, and the decision which was taken was that the community services grants program will commence as of January, 1979.


David Orlikow: Is any consideration being given to the extension of the Neighbourhood Improvement Program so that municipalities which had plans to improve run-down areas can proceed with their work; or are they to assume that there is no more money for this kind of neighbourhood improvement until the new agreement is put into effect?


André Ouellet: Mr. Speaker, some neighbourhood improvement projects were designated by the provinces this year and some activity took place during 1978. Under the new community services grants program, it will be possible for municipalities, with the approval of their provincial governments, to designate some areas for neighbourhood improvement. That will be under the new scheme which will be implemented in January, 1979-not under the previous program. Many municipalities will be able to take advantage of the new program and undertake some neighbourhood improvements.


David Orlikow: I assume from what the minister said that whatever was planned for the future will have to wait until money is available and the program is allowed to go ahead. As a result of the negotiations with the provinces which are being carried on by his department, have any of the provinces signed a new agreement? If so, which ones; and has the federal government signed the agreement so that work can proceed?


André Ouellet: Mr. Speaker, those signatures had to await the discussions which were to take place at the meeting of the federal Minister of Finance with the provincial ministers of finance: they had to wait until a decision was reached at that meeting of ministers of finance.
Now that a decision has been taken, it is possible for us to sign some agreement with the provinces. I have received indications that provincial authorities are ready and willing to sign an agreement.


AGRICULTURE
Eudore Allard: Mr. Speaker, my question is directed to the Minister of Agriculture.
In view of his department's recent decision to cut back $6 million which were allocated to Canfarm to help farmers in their agricultural operations, and in view of the fact that this is a very valuable program for agriculture, can the minister inform the House if he intends to revise his decision of allocating these $6 million, as this has proven extremely valuable for the management of agricultural lands and for farmers, especially in Quebec?


Hon. E. F. Whelan (Minister of Agriculture):: I am sure the hon. member knows that there have been submissions and propositions made by several different farm organizations through the Canadian Federation of Agriculture. That is being considered at the present time. A final decision has not been made to go along with their request, which involves some financing by the federal government, but it is being considered at present. However, the hon. member can rest assured that I will do everything I can to see that Canfarm stays alive.


NATIONAL DEFENCE
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of National Defence. Last Tuesday, when I asked the minister about the delay in selecting the new fighter aircraft, the minister blamed the plane manufacturers for the 3>/2 months' delay since the companies submitted their final bids. Now that he has had a chance to review the facts, would he care to tell the House the real reason for this delay? Also, would he tell the House in which month he expects to sign the final contract?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I was certainly not blaming the aircraft manufacturers: as a matter of fact, I welcomed the opportunity for them to give more comprehensive bids which were extremely valuable in the whole process. As I said the other day, I am still targeting a final decision for late spring. However, I think it would be unwise to be tied down to a specific date on a contract of this importance, because we must make absolutely certain that we get the best deal for Canada that is possible, with the best industrial benefits possible. If that takes a couple of weeks more, those are weeks well worth taking. On the other hand, I would like to see the decision taken as quickly as
November 14, 1978

possible, because this contract will be a great boon for Canadian industry.


Allan Bruce McKinnon: The minister did not answer my question as to when he planned to sign the contract. Would he be prepared, either this month or next, to appear before the Standing Committee on External Affairs and National Defence, together with his officials, to answer questions on both the schedule of funding for the new fighter aircraft and on the government's recent announcement of a further $150 million cut in his budget which, as many believe, is the real reason for the delay in the NFA contract?


Barnett Jerome Danson: I did not say when I was going to sign the contract, first of all because I am not the one to sign it: as the hon. member knows, the Minister of Supply and Services oversees these contracts. Second, I would not presume to want to sign a contract until it is negotiated. I gave the explanation as to when it would be negotiated, and how.
So far as the funds are concerned, this is in our financial envelope. We fully intend to meet our commitment to a 12 per cent growth in capital equipment. The budgetary savings in the calendar year 1979-80 will not affect this project, as the hon. member continually implies.
So far as appearing before the committee is concerned, the committee is master of its own business. I always appear before the committee when I am asked to so do, and would welcome any opportunity, as would my officials.


CONSUMER AFFAIRS
Mr. Geoff Scott (Hamilton-Wentworth):: Mr. Speaker, my question is addressed to the Minister of Consumer and Corporate Affairs and it has to do with the voluntary anti-rust guidelines set down by the government. Has the minister held discussions with the automobile manufacturers; have they agreed to comply with the guidelines: and, if so, was any time-frame or deadline discussed?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, we introduced this code in January of this year. It provides a one-year warranty against surface corrosion, three years against perforation, and a six-year warranty against structural damage. We did meet with the automobile companies. So far, 13 companies have accepted the code, ten have introduced specific warranties which are similar to the code, and two have not responded. But nobody has refused so far.


Geoffrey Douglas Scott: Can the minister tell the House how he proposes to monitor adherence to the guidelines, even if some of those companies have accepted the code? Does the government intend introducing any legislation in this regard?
Oral Questions


William Warren Allmand: We did carry out a preliminary monitoring program last summer in Montreal and Toronto, through the Canadian Automobile Association, and we have submitted proposals to the companies and to the consumers' associations for a more extended monitoring program for next summer, following this coming winter. We are still awaiting a response from some of the companies on that.
With respect to legislation, we would prefer not to legislate. We feel that if the voluntary code is a success, we will not have to legislate.


COMMUNICATIONS
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, my question is directed to the Minister of Communications. I wonder if the Minister of Communications is prepared to communicate today. Perhaps she could confirm the reports across Canada indicating that officials in her department are requesting very distinguished Canadians to sit on a royal commission on communications.


Hon. Jeanne Sauv6 (Minister of Communications):: No, Mr. Speaker, I cannot confirm that: there are no officials of my department crossing Canada to set up a royal commission.


John Patrick (Pat) Nowlan: Mr. Speaker, my supplementary question is directed to the same minister. If these communications are not to inquire about setting up a royal commission on communications at this late date in this parliament, and/or to seek employment in some other parliament, can the minister tell the House, in view of the introduction of Bill C-16, if she intends to proceed with that bill prior to the federal-provincial conference in February? What has happened to the timetable for the pay television model and/or her review on an earth satellite station policy?


Jeanne Sauvé: Mr. Speaker, the model on pay television will be submitted to the next conference of provincial ministers of communications to be held in the month of March. It could be accelerated and prepared before that date, if there is need to discuss that at one time or another in the course of our discussions with the provinces regarding federal-provincial relations.
As for the earth station policy, I think I will be in a position in a short while to give the House and the public an idea of the manner in which this will be reviewed.

November 14, 1978
Oral Questions INDUSTRY


PROCESSING OF RAW MATERIALS IN CANADA IN ORDER TO CREATE JOBS
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, my question was for the Minister of Industry, Trade and Commerce, but as I understand he has been dispatched to Barbados during this critical budget week, I will direct it to the Prime Minister.
In order to start creating the additional 800,000 jobs which the Canadian Manufacturers' Association recently indicated can be made available in this country if we can overcome our $12 billion a year trade deficit in fully-manufactured products, when does the government intend to introduce legislation requiring those who export our primary products in their raw state to process a far higher proportion in this country as a condition of exporting, and in this way make available the jobs which Canadians have a right to expect and need very much indeed?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, because the House is well aware of the hon. member's propensity for vacation spots, I think I should correct him: the minister has a trade conference in Trinidad, not in Barbados. Therefore, I urge the hon. member to change his airline tickets so he can go and talk to the minister in Trinidad rather than Barbados, as I know he planned. He would find out what the House knows, that the government has done many things to produce expansion in Canada of the developmental sector. In practically each budget for the past several years, incentives have been given to the manufacturing and processing sectors, which the hon. member could find out about.


George Harris Hees: Mr. Speaker, my supplementary question is directed to the Prime Minister. As the Prime Minister did not answer my question and did not make any attempt to answer it, it is very obvious that the government has no intention at all of introducing necessary legislation such as I have outlined to him. Is it not obvious, when we receive vacuous answers such as the Prime Minister just gave, why the economy is in the terrible shape it is today?


Some hon. Members:: Order.


Mr. Speaker:: Order, please. The hon. member for Egmont.


EXTERNAL AFFAIRS
Mr. David MacDonald (Egmont):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. It relates to the recent establishment by his department of a new branch having to do with human rights issues. It also relates to his speech at the United Nations in September which

took particular exception to human rights violations occurring in democratic Kampuchea.
What action has the government taken with regard to furthering its general concern for human rights in the United Nations and, in particular, the establishment of a human rights commissioner to which I believe the government now is committed? Has any particular action been taken by way of follow-up to our concern about human rights violations in Kampuchea, as expressed today by the hon. member for Parkdale in his motion under Standing Order 43?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, on the matter of the human rights commissioner, other than having made our position known at the General Assembly, I have also had our officials advocating this course not only with the officials of the United Nations but with other countries which we hope will support the idea.
On the democratic Kampuchea situation, I was pleased to learn that the Secretary General of the United Nations received an indication from the government of that country to inspect, himself, the human rights conditions. I can only assume that this was, at least in part, as a result of the statements we made at the United Nations. Since the Secretary General is going there, I consider that perhaps the most appropriate course is to await his return to see what kind of a report he makes, before taking any further action.


David Samuel Horne MacDonald: Mr. Speaker, respecting the establishment of the human rights commissioner, since Canada has let its position be known at the United Nations, have we taken any initiative to either initiate or co-sponsor a resolution which might effect the achievement of this position which has been discussed for a number of years at the United Nations? I do not believe that Canada, to date, has given any unique or forthright leadership in order that that post can be established and to make the UN more effective in dealing with human rights violations.


Donald Campbell Jamieson: Mr. Speaker, it sounds to me like a worthwhile suggestion. It may very well have been done at some time in the past, before I was minister, but I do not recall it having been done in the last year or so.
In connection with whether we should put it forward formally, as the hon. member knows, that would depend upon how much support we could assess would be available, by consultation with friendly countries and the like. I will ask my officials to look into it and discuss it myself.
Also, may I just add, lest there be some misunderstanding with regard to Kampuchean refugees, when I mentioned doing nothing until the Secretary General returned, I meant on the broader question. On the question of individual families, I think I announced, at the same time, that we were increasing the assistance to refugees and boat people generally, as they are called.
November 14, 1978


THE CANADIAN ECONOMY
Mr. F. A. Philbrook (Halton):: Mr. Speaker, my question is directed to the Minister of Finance. Today, the Toronto Globe and Mail reported on a survey of 300 large Canadian corporations that a 16.2 per cent rise in business spending is indicated for 1979. Will the minister indicate the basis for this improved position of Canadian business and how it might relate specifically to government policies?


Some hon. Members:: Oh, oh!


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, the question contains the answer: there is much more confidence in Canada than there was before.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


TRANSPORT
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I have a question involving basic government policy which I should like to direct to the right hon. Prime Minister. It arises out of actions by the government when it fully accepted the recommendations of the Hall royal commission on the basic rail network for western Canada as government policy.
In light of the fact that the chairman of the Department of Transport's Prairie Rail Action Committee has called the basic network itself an irrational collection of lines derived from a series of politically expedient decisions, and that events show there is too much mileage in the basic network, can the Prime Minister advise whether this is a change in government thinking or policy? If not, will he ask the Minister of Transport to dismiss Mr. Anderson?


Mr. Charles Lapointe (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, this was discussed at length yesterday. The government was very prompt to consider the Hall commission report. Two days after its publication, it had already acted, through an order in council, to protect the more than 1,000 kilometers of tracks which, as recommended by Mr. Justice Hall, should be part of the permanent system. Afterwards, more than 1,444 kilometers of the network were included in a second category for further consideration, and that part of the network was referred for an in-depth study to the commission mentioned by the hon. member.
By 1980, I believe western farmers as well as other users will have at their disposal a permanent railway system which will allow them to move their goods most efficiently.
Oral Questions


Leslie Gordon Benjamin: Mr. Speaker, I find it strange, when an officer of a commission appointed by the government flies in the face of government policy, that the Prime Minister will not deal with it and the minister's parliamentary secretary attempts to do so. The government has accepted the recommendation of Mr. Justice Hall as government policy, and Mr. Justice Hall also said that the task committed to the Prairie Rail Action Committee was premature and impossible of fulfilment within the time-frame given that committee.
[DOT] (U42)
May I ask the Prime Minister whether he will instruct the Minister of Transport and Minister of Justice to dismiss Mr. Anderson and disband the Prairie Rail Action Committee?
[ Translation]


Charles Lapointe: Mr. Speaker, the hon. member may not like parliamentary secretaries to deal with matters which come under the ministers to whom they are assigned but I would remind him that all members on our side of the House agree we are fully entitled to look after matters related to grain transport or other relevant matters whenever they come under our responsibilities.
It may be true that Mr. Fred Anderson flies in the face of the government, as the hon. member put it, but I would remind him that in past months it did happen that Mr. Justice Hall referred to other conclusions which perhaps did not agree with government policy. Still I wonder if he agrees with one of Mr. Justice Hall's recommendations, for instance when he suggested that there is no need for more hopper cars in the fleet used for moving western grain.


IMMIGRATION
Mr. Jake Epp (Provencher):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration: it relates to the plight of the 2,500 refugees now on the high seas who have been trying to get to Malaysia as the country of first asylum. This mattter, as the minister knows, was raised under Standing Order 43 by the hon. member for Parkdale.
I would ask the minister whether the Canadian government has contacted the United Nations high commissioner for refugee matters and committed Canada to accepting a number of these 2,500 refugees. If no contact has been made specifically in respect of these boat refugees, rather than the additional families regarding which the minister made a commitment earlier, will the minister indicate when contact will be made? If contact has been made, what has been the response?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, the United Nations high commissioner for
1098

November 14, 1978
Oral Questions
refugees commended Canada for its role in the refugee program. As you know, we announced the policy respecting the 50 small boat refugees and have increased that by another 20 families which we are taking by month for those going overland.
The present situation, as explained to us, is that the United Nations commissioner is, in fact, endeavouring to board that particular ship to find out what can be done. Normally, we wait for the approach to be made by the United Nations high commissioner. In light of the history and the excellent record Canada has in this regard, I would expect that we will probably be one of the first countries he would contact. We are looking at that issue now.


Arthur Jacob (Jake) Epp: Mr. Speaker, I would ask the minister whether he has been contacted by the church officials of Canada, of various denominations, who have been in contact with my office stating they would be willing to sponsor some of these refugees. Has the minister had these contacts; and, if so, what has been his response to these church officials?


Jack Sydney George (Bud) Cullen: Mr. Speaker, it is pretty difficult to make a response to the church officials until we know precisely the magnitude of the problem as discovered by the United Nations high commissioner for refugees. Once we have a contact from that particular office, we will be in a better position to respond. I do compliment the church officials for being quick off the mark on this one.


FORESTRY
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is addressed to the Minister of State (Environment): it concerns the proposed amalgamation of the work of two of the forestry labs in Ottawa with the work in Petawawa.
Is the minister prepared to let the House know what study or what group recommended, first of all, the elimination of the establishment at Petawawa and, secondly, the basis for the reversal of that decision followed by the decision to integrate the work of Petawawa with the work of the two forestry institutes from Ottawa?


Hon. Len Marchand (Minister of State (Environment)):: Mr. Speaker, these were internal decisions taken with my departmental officials.


Donald W. Munro: Mr. Speaker, I assume the minister is saying that the decisions were taken by the people of Petawawa and the institute itself, but that is not the story I am getting. Will the minister indicate whether any consideration at all was given to cutting the administrative costs between the operating end of the forestry service and the home base in Ottawa as a means of implementing the restraint program?


Len Marchand: Mr. Speaker, the amalgamation of the Forest Fire Research Institute and the Forest Management Institute at Petawawa will result in considerable reduction in administrative costs.


AGRICULTURE
Mr. R. E. McKinley (Huron-Middlesex):: Mr. Speaker, my question is for the Minister of Agriculture and it relates to the stabilization plan in respect of white beans.
It seems that producers who have worked hard to harvest their beans and sell them, but who had them graded as feed beans-and I said "feed", not "seed"-are now not eligible for stabilization. I am also advised that some producers received payment and are now being asked to send the cheques back. Will the minister advise us whether this is, in fact, the case and the way the plan was supposed to work? If that is so, will the minister have the plan changed, because these are the very producers who are most in need of this stabilization assistance?


Eugene Whelan: Mr. Speaker,
I am not aware of what the hon. member says about the stabilization board action regarding white beans. I will certainly look into it and report to the hon. member.


Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I had a question for the Minister of State for Urban Affairs. Since it took only six days to create the earth, and this is the seventh day I have been trying to get recognition, I shall rest, particularly as the question was asked by a member from Winnipeg.


Some hon. Members:: Hear, hear!


POLICY RESPECTING CANFARM
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, I have a question for the Minister of Agriculture. I would like to return to the subject of Canfarm in Guelph, Ontario. The decision of Canfarm's future was scheduled for announcement last Friday. In view of the fact that each day that goes by without a decision being made makes it that much more difficult for Canfarm to keep dedicated and qualified employees and to sign up new clients for the year 1979, may I ask the minister whether he can give the House a date when a decision will, in fact, be announced on Canfarm's future?


Eugene Whelan: Mr. Speaker, the people in Canfarm know what we are doing and how concerned we are. The people who use Canfarm in Canada know the very same thing. As I said earlier during the question period, we are doing everything we possibly can to make sure it stays alive. There may be some cutbacks in Canfarm, even with the submission made by the Canadian Federation of Agriculture, but I am not in a position to say at this time. All
November 14, 1978

the technicalities, etc., of that proposal are not ironed out as yet.


Henry Perrin Beatty: Mr. Speaker, might I ask the minister whether he will at least give the House the assurance that Canfarm will be kept alive until the time when it can be turned over to the private sector, something which is strongly supported by the employees, the farmers concerned, and certainly by me?


Eugene Whelan: Mr. Speaker, I am condemned on the one hand for not keeping it alive with government funds; and when I said it should be privatized, I was condemned for that. I am glad to see that the member has come around to agreeing to both sides. I just want to say that I can say no more at this time, other than to suggest that our concern seems to be the same, that Canfarm should stay alive and we will do everything we can to make sure that happens.


EXTERNAL AFFAIRS
Mrs. Simma Holt (Vancouver-Kingsway):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and relates to Raymond Chung, of Vancouver, the beloved founder and master of T'ai Chi in Canada, who has for 16 years sought to be reunited in Canada with his wife and two children in mainland China.
Since the Peking government has been telling the free world it will act to honour our goals toward the free movement of people and family reunification, will the minister press China to prove its integrity and sincerity by reuniting Raymond Chung with his family?


Donald Campbell Jamieson: Mr. Speaker, I have made a number of representations to the government of China on this particular case, as well as, of course, on the whole issue of family reunification. 1 regret to say that in this particular instance I have not had as much success as with many other family reunification matters, but I can assure the hon. lady that I will take it up again with the appropriate authorities.


THE CANADIAN ECONOMY
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I should like to direct a question to the Minister of Energy, Mines and Resources.
Why did Petro-Canada buy into Phillips Petroleum when it was at the end of a long rise in share prices of the past four
Oral Questions
years and only a year ago averaged $31? On what grounds did Petro-Canada evaluate the purchase, which seems to be some $20 higher than it was on the trading day? Is this to be another Texas Gulf type of transaction, when the CDC bought at the height of the market and the stock has not done very well since?


Alastair William Gillespie: Mr. Speaker, Petro-Canada paid a premium over the then market price, as the hon. member has noted. That is not extraordinary; indeed, every oil company takeover this year has involved a significant premium over market.
As to the actual price and what might be an appropriate price, this, of course, is a professional judgment. A professional judgment was taken by the board of directors and those who advised the board of directors of Petro-Canada.


PUBLIC WORKS
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, my question is directed to the Minister of Public Works and Minister of State for Science and Technology: it deals with reports that between $500,000 and $1.5 million have been invested in the theatre at the National Press building.
Could the minister tell the House what the intention is for future use of that theatre, having regard to the fact that the Prime Minister seems determined to move his press conference out of that particular locale?


Hon. Judd Buchanan (Minister of Public Works and Minister of State for Science and Technology):: Mr. Speaker, I will have to investigate the figures suggested by the hon. member. They sound rather on the high side, and I am not sure whether he is talking about the original construction or the modifications to the building. It is my understanding, however, that the theatre will continue to be used in the future.


MOVING OF PRESS CONFERENCES FROM THEATRE IN NATIONAL PRESS BUILDING
Ramon John Hnatyshyn: Mr. Speaker, may I put a supplementary question to the Prime Minister? He will recall that the Secretary of State made a long speech at UNESCO with respect to what we regard as freedom of the press in this country. In view of the statements made by the Secretary of State on this important topic, will the Prime Minister reconsider his plan to move press conferences to his own locale to allow him to stand in front of the television cameras, rather than being seated, as he is apparently concerned about this?


Pierre Elliott Trudeau: Mr. Speaker, that is an urgent question of national importance and I am anxious to answer the hon. member. It is precisely in keeping
8006S-70'/j

November 14, 1978
Oral Questions
with the freedom of the press that we are moving to a larger room, because of the great onrush from the press of all quarters to hear me speak.


AGREEMENT CONCERNING RENTAL OF NEW MANPOWER
Mr. Gilles Caouette (Temiscamingue):: Mr. Speaker, I am pleased to hear the Prime Minister's answer where he seems to attach some importance to the space for newsmen.
My question is directed to the Minister of Public Works. An agreement was made in Rouyn to rent new offices for regrouping unemployment insurance and manpower offices to give more space to the staff, and this agreement was delayed over the years to the point that employees work in offices which are too small. They were advised to wait for the new offices which would-


Mr. Speaker:: Order, please. If the hon. member has a question he should ask it immediately.


Gilles Caouette: My question is coming and if hon. members on the government side would listen perhaps they would understand. As a matter of fact, there was an agreement to rent new offices. Is the minister aware that recently his department cancelled that agreement and that they do not want to reconsider it in any way? Is the minister prepared to reevaluate this situation?


J. Judd Buchanan: No, Mr. Speaker, I am not aware of this fact, but I shall be very pleased to inquire about this and to inform the hon. member.


FISHERIES
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question is directed to the Minister of Fisheries and the Environment: it concerns the rather massive expansion of the Roberts Bank port in the estuary of the Fraser River.
Clear evidence has been presented to the environmental panel that there will be substantial damage to about 300 acres of spawning grounds, with the potential loss of some $60 million in the future. Would the minister advise the House whether it is his intention to use the new fisheries legislation to ensure that construction does not destroy the fish habitat at the estuary in the Fraser River?


Hon. Rom6o LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, I am very happy that the hon. member
[Mr. Trudeau.)
has obviously read what officials of my department put forward as a position of sound conservation and protection of the habitat.
The legislation, which was passed unanimously by this House and which gives us power to prevent damage to spawning grounds, will be utilized if it is found to be applicable in this case. Certainly, the position taken by my officials was cleared with me and I intend to act accordingly.


COST OF EXPANSION OF ROBERTS BANK, B.C., FACILITIES
Stuart Malcolm Leggatt: Mr. Speaker, my supplementary question is for the Minister of State (Environment). I am pleased to hear that the Minister of Fisheries and the Environment indicates that he will act in accordance with the law.
My question to the Minister of State (Environment) concerns the environmental assessment panel, under his jurisdiction, with regard to the Roberts Bank development which is now looking into environmental questions. One question that has not been put before the panel is the matter of the estimated cost of the construction. The chairman of the Vancouver harbours board indicated he would not release that figure to the commission. Could the minister indicate to the House why the estimated cost of that project has not been put before the public and before that inquiry?


Len Marchand: Mr. Speaker, this question should more properly be put to my colleague, the Minister of Transport, who is acting as proponent of the project. I will check, on behalf of my colleague, to find out why that kind of figure could not have been put. It is my view and my wish that all kinds of information pertinent to that project going ahead should be put before the panel.


THE CANADIAN ECONOMY
Mr. James Gillies (Don Valley):: Mr. Speaker, may I put a
question to the Minister of Energy, Mines and Resources? Is the offer being made by Petro-Canada to Phillips Petroleum being made to all owners of outstanding stock of Pacific Petroleums Ltd. at the same price?


Alastair William Gillespie: Mr. Speaker, I made it quite clear that Petro-Canada wants to pick up all the shares of Pacific Petroleums, and it is the intention of Petro-Canada that all shareholders would get the same price.


James McPhail Gillies: A supplementary question. Could the minister explain why shares of Pacific Petroleums were selling at $10 below offer price on the Toronto Stock Exchange today?


Alastair William Gillespie: Mr. Speaker, it is not for me to speculate on that matter. It may have something to do with the fact that the
November 14, 1978

board of directors of Pacific Petroleums has not yet met. They will meet on Thursday, at which time they will consider the proposal put to them by Petro-Canada.


FISHERIES
Mr. James A. McGrath (St. John's East):: 
James Aloysius McGrath: A supplementary question, Mr. Speaker. May I ask the minister if it is the government's intention to participate in the development of our fisheries in the Atlantic provinces and, specifically, if it is the government's intention to co-operate with the government of Newfoundland on the excellent proposals they announced yesterday, so that we can maximize the opportunities open to us by virtue of the 200-mile limit and help reduce the substantial unemployment in the area?


Mr. LeBlanc (Westmorland-Rent):: Mr. Speaker, the substantial budget of this department, plus the $200 million-odd we put in to keep the fishery alive since 1974, indicates, obviously, the level of commitment of all parties in this House.
As for the plan of the Newfoundland authorities, since I was not consulted and was not informed before the plan was made public, I am at a bit of a disadvantage to comment. I was a little surprised, frankly, that provinces which constantly ask me to consult with them should have-from the meeting last Friday-not informed their colleagues of the details of the new project.


PRIVILEGE
Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, I rise on a question of privilege. My seatmate, the House leader
Privilege-Mr. Stevens
of the official opposition, has brought to my attention some debate that occurred in this House on November 10 in relation to a statement I made during debate in the afternoon of Wednesday of last week. That was a statement I made, sir, in response to an interjection by my good friend, the hon. member for Gloucester (Mr. Breau), who had moved within shouting range of me and invited me to make a remark which, on reflection, was more extreme than I intended.
As you made clear in your remarks on Friday, it is quite open for me to take no action at all on this matter; that that would be quite within my right. However, I have a very deep respect for the traditions of this House and I am conscious of the example that we can set here in this House, an example which will be seen and, I trust, followed by Canadians across the country.
I want to make it clear, therefore, that I had no intention of suggesting that any member of parliament from the other side of the House, or indeed any member of parliament at all, would deliberately seek to sow hatred in the country, and I want to withdraw any implication to that effect.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I am very grateful to the Leader of the Opposition (Mr. Clark) for taking that step.


MR. STEVENS-PETRO-CANADA'S USE OF FUNDS TO PURCHASE SHARES IN PACIFIC PETROLEUMS LTD.
Sinclair McKnight Stevens: Mr. Speaker, my question of privilege arises out of the various exchanges that occurred in yesterday's question period, and particularly the exchanges with the Minister of Energy, Mines and Resources (Mr. Gillespie), the President of Privy Council (Mr. Mac-Eachen), and also the Minister of Finance (Mr. Chretien). Speaking very generally, the impression was left by those three ministers that the actual takeover of Pacific Petroleums on the part of Petro-Can had no federal implication. It was presented to us that this was a commercial transaction that the government felt Petro-Can were right in entering into. But, in any event, there was no consequence as far as the federal treasury was concerned. Perhaps one of the most direct answers to that effect was given by the President of Privy Council when he stated, as reported at page 1042 of Hansard:
It is totally a commercial transaction, financed outside government expenditures by commercial transactions by the private banks of Canada.
I rise on a question of privilege because I feel the answers given by the ministers yesterday interfere in a direct way with my ability to perform as a member of parliament in this House.
You will recall, Mr. Speaker, in the budget that was delivered on April 10 of this year, rather than reflecting the borrowings of certain agency corporations the Minister of Finance chose to make it simply a noted item. At that time the Minister of Finance stated:
Direct market borrowings, of $463 million in 1976-77 and some $350 million in 1977-78, by agent Crown corporations, specifically Petro-Canada, the Export

November 14, 1978
Privilege-Mr. Stevens
Development Corporation, and Eldorado Nuclear, which have been authorized to borrow under their respective statutes, are not included in Government of Canada financial requirements. In the projection of financial requirements for 1978-79, it is envisaged that such direct borrowings by agent corporations will continue-
Having noted that reference in the budget we on this side of the House took some pains to find out if the minister was saying there were no liabilities involved, and that was the reason why he had chosen not to reflect the borrowings I have referred to of such corporations as Petro-Canada, Eldorado or the Export Development Corporation, or alternatively, was the minister simply saying because the funds did not come directly from the Consolidated Revenue Fund that he chose to show them as a noted item. The answer was the latter. Simply because the funds were not being routed through the Consolidated Revenue Fund the government felt in future that, notwithstanding there was no disagreement, it had to stand behind those corporations, that they in effect were the principal behind those corporations and said it would prefer to show them as a separate item.
The reason I would suggest that my ability to function as a member of parliament has now been somewhat harmed is that if we accept at face value the statements which were made by the minister, to which I referred yesterday, it means Petro-Canada can literally borrow money to an unlimited amount with no covenant of the Dominion of Canada being involved. If that is so we must get it established before budget night this Thursday. In responding to the budget our members in this caucus, and certainly myself specifically, need to know are these liabilities of Petro-Canada in fact an obligation of Canada? Are the obligations of the Export Development Corporation of a like nature an obligation of Canada? If so, should they not be included in the general financial requirements of Canada, as the budget will outline? I stress this point because up until the rather startling statements made by the minister to which I have referred, there was really no question about this. I draw your attention to Section 14(1) of the Petro-Canada Act of Incorporation which states:
The corporation is, for all purposes of this act, agent of Her Majesty, and its powers under this act may be exercised only as an agent of Her Majesty.
It goes on to state in subsection (2):
The corporation may, on behalf of Her Majesty, enter into contracts in the name of Her Majesty or in the name of the corporation.
I take it that is simply empowering it to sign directly in its own name, that is, Petro-Canada, or to sign on behalf of Her Majesty. In either event it is acting as an agent for its principal, Her Majesty in the right of Canada.
In subsection (3) it goes on to state:
Property acquired by the corporation is the property of Her Majesty and title thereto may be vested in the name of Her Majesty or in the name of the corporation.
Subsection (3), I think, is particularly relevant. In response to a question put by myself to the Minister of Finance yesterday he responded at page 1042 of Hansard as follows, referring to the Petro-Canada, Pacific Petroleums deal:

I just want to say that it is a commercial transaction and Petro-Canada pledged the assets they have gained in making the transaction.
Subsection (3) of Section 14 of the Petro-Canada Act of incorporation makes it clear that they are not Petro-Canada's assets to pledge. To repeat that subsection again it says that the assets are the property acquired by the corporation and they are the property of Her Majesty and title thereto may be vested in the name of Her Majesty or in the name of the corporation.
If I may point out, other sections of this act make it very clear that any obligation of Petro-Canada may be sued for in the name of the Queen. Second, in Section 7(5) of this act it is stated that all the borrowing authority of Petro-Canada are only operative provided they have a proper order in council. You will recall, sir, that I referred to the fact earlier in today's question period that in this connection an order in council was passed on June 16, 1978, in which, on the recommendation of the Minister of Energy, Mines and Resources, the President of the Treasury Board (Mr. Andras) and the Minister of Finance, pursuant to section 7(5) of the Petro-Canada Act, the supplementary capital budget of Petro-Canada for the financial year 1978 was approved.
There is a schedule attached. That schedule shows there is contemplated a supplemental or extra usage of funds on the part of Petro-Canada in their 1978 capital budget of $819.9 million. They show the source of those funds. They say that the common shares that will be issued by the corporation will supply $205 million, the preferred shares $65 million, debt financing $504 million, and there is a certain adjustment figure to come out to the $819.9 million.
I suggest that schedule is doubly important. First, it confirms that Petro-Canada is certainly acting under the provisions, as you would expect, of the act incorporating them. They specifically sought the consent of the governor in council. Second, it provides for the actual issue of preferred shares and common shares of this corporation. Those shares, certainly in the case of the preferred shares, can only come under another section of this act from the Government of Canada. They are the only ones who can subscribe to those preferred shares.
In looking for some reason as to why the government might have presumed it had the right through Petro-Canada to borrow moneys and yet not involve the covenant of the Government of Canada, I can only assume it has turned to section 23 of the Petro-Canada Act of incorporation. In that section it is stated that the corporation, that is, Petro-Canada, may issue certain debentures, have securities guaranteed under another section, and may put out certain loans, or issue preferred shares. But, in any event, they may not exceed $1 billion.
The reason I think this is significant is because, in effect, what this section is saying is that there is a limit as to how much the Government of Canada can put into Petro-Canada, either in the form of capitalization, in the form of direct loan advances, or in the form of gurantees of a direct nature as far as the corporation is concerned.
November 14, 1978

The subsection that the government may be relying on is subsection (2) of section 23, which states:
Nothing in this section shall be interpreted as limiting the amount
(a)	that the corporation may borrow without a Crown guarantee; or
(b)	that a subsidiary of the corporation may borrow.
If in fact the government is relying on that section, I think that a legal opinion should be supplied to show why that section has an overriding effect on section 14 to which I originally referred, which makes it very clear that Petro-Canada throughout their entire activities act as an agent.
I am advised by my legal counsel that the statutory interpretation of section 23 is not in any way to minimize the agent principal relationship between Petro-Canada and the Government of Canada. It is simply to make it clear that the total limit of any direct guarantee of any advance or of any capital infusion on the part of Canada is $1 billion.
Beyond that point my legal counsel tell me the section simply says they can borrow other moneys, but if they borrow those moneys relying on section 14, which is the overriding section, they clearly have borrowed those funds as an agency of Her Majesty in the right of Canada, and as such the covenant of Canada goes with those funds.
To support that argument I would refer to the comparable act in this regard, a very similar act incorporating the Export Development Corporation. In fact, section 14 as it appears in the Petro-Canada Act is almost, with the exception I think of three words, identical to the section you find in the Export Development Corporation Act. In short, that corporation under their act, like Petro-Canada, not only are designated an agent of Her Majesty in the right of Canada, but they are both put into Schedule D of the Financial Administration Act.
Dealing with the Export Development Corporation, various prospectuses have been filed, mainly in the United States. Those prospectuses, for example, make statements such as this:
Export Development Corporation
Immediately under it is shown:
(An agent of Her Majesty in right of Canada)
It is then stated that the notes, that is, the notes that are being proposed to be sold by the Export Development Corporation under this prospectus, and I quote:
-will constitute direct obligations of Export Development Corporation and as such will constitute obligations of Her Majesty in right of Canada. Payment of the principal of and interest on the notes will be a charge on and payable out of the Consolidated Revenue Fund of Canada.
It is my submission that Petro-Canada has no different status under its act of incorporation under the Financial Administration Act than the Export Development Corporation, and any debts they incur are in fact incurred as an agent on behalf of Her Majesty in right of Canada. We must identify those because, when a budget is presented in this House, it will be a total distortion of the facts if the direct and indirect obligations of Her Majesty in the right of Canada are not identified as such. That is why I am suggesting that our rights, certainly my rights within this House, to act in an effective way, are being hampered.
Privilege-Mr. Stevens
If for the first time there is some doubt being shown as to what is the effect of an agency corporation of Petro-Canada borrowing money, then we must get this clarified. Certainly I do not want, unintentionally or otherwise, to be making statements as to what in fact are the gross or net obligations of Canada if in fact the ministers are correct in making the statement they have made. However, to the best of my knowledge, certainly on the advice of counsel that we have consulted, the ministers are not correct in making this suggestion that the resources of Canada in the name of Her Majesty are not charged.
For the Minister of Finance to suggest that the Petro-Canada assets acquired on this takeover of Pacific Petroleums are being pledged seems to be in direct defiance of the act which states that all assets of Petro-Canada are assets of the Crown.
I could give further evidence of the point I am making. I acknowledge that the Minister of Energy, Mines and Resources, during today's question period, said that he felt he had an answer. I will certainly look forward to what he has to say. However, if he is relying on the provisions of Section 23 of the Petro-Canada Act, he is relying on a very weak argument. It can only be accepted on receipt of proper legal opinion indicating that, notwithstanding Section 14 of the Petro-Canada Act, the Queen in the name of Canada is not bound by Petro-Canada borrowings or any other obligations.
I feel it is a very material matter that is before us, particularly in this budget week, because an understanding on the finances of this government is essential to the proper operation of this House. In truth, if these are direct or indirect obligations of Canada, we must know that. If, presumably unintentionally, the ministers have misrepresented the facts, they should be allowed to clarify the record to that effect.
If you, sir, find that I have a question of privilege, particularly as it relates to my ability to function as a member of parliament and certainly as my party's financial spokesman, I would be prepared to move the proper motion to have a reference to the suitable committee of this House so that the matter may be gone into in some depth.


Alastair William Gillespie: Mr. Speaker, in the opening remarks of the hon. member for York-Simcoe (Mr. Stevens), he referred to the fact that ministers had described this transaction as a commercial transaction. That, of course, is precisely what it is. It is a commercial transaction. It was financed by a normal commercial instrument which has been used by the private sector repeatedly. It was handled by the commercial banking system of Canada. So let me reaffirm it was a commercial transaction entered into by a Crown corporation under the legislative authority provided by parliament in the act setting up the corporation.
I think it is important to recognize that parliament did set up this Crown corporation. It did give it powers, and it did give

November 14, 1978
Privilege-Mr. Stevens
it latitude and flexibility with respect to some of its financial arrangements. As to the nature of the financing, I do not intend to go into the details of that; I think it would be more appropriate for that information to come from the officers of the corporation. But the transaction was financed through a subsidiary of Petro-Canada, Petro-Canada Explorations Inc., which holds all the revenue producing assets of Petro-Canada.
During the debate yesterday, in the notice with respect to the question of privilege which the hon. member for York-Simcoe gave, considerable doubt was cast on the question of government guarantees. Let me deal with that one. There is no question that Petro-Canada as an agent of Her Majesty is covered, as are other Crown corporations, by the Financial Administration Act. That is common knowledge and is not in question. But I was asked by the hon. member for Halifax (Mr. Stanfield) whether or not there were any expressed guarantees by the federal government. I would refer the House to Hansard, page 1050, I believe, in which yesterday's debate is reported. That is a fair question, Mr. Speaker.
I would draw to the attention of the hon. member and of the hon. member for York-Simcoe, section 21 of the Petro-Canada Act in particular, which is subtitled "Guarantees." Section 21(1) reads:
Subject to section 23, the governor in council may, on the recommendation of the minister and the Minister of Finance, authorize the Minister of Finance to guarantee on behalf of Her Majesty in right of Canada, the principal and interest of any debentures or other securities issued by the corporation for the purpose of raising capital otherwise than from Her Majesty in right of Canada.
Section 21(2) goes on to say:
The Minister of Finance may approve or decide the form, manner and conditions of guarantees under this section.
It seems quite a proper question to address. Were the guarantees which were anticipated in the legislation setting up Petro-Canada sought from the Government of Canada? I can tell the House that those guarantees were not given under this section of the act, nor were any other express guarantees with respect to this transaction given by the Government of Canada.


Hon. Robert L. Stanfield (Halifax):: Mr. Speaker, the minister has brought me into this and I rise because I do not think in all fairness he gave a proper summary of the question I put to him and which he answered. I asked him whether he was saying in connection with this transaction that there is absolutely no financial responsibility on the part of the federal government. Is he saying not only that the federal government did not engage in any expressed guarantee but, by virtue of Petro-Canada being the agent of the government and the implications of that under the Financial Administration Act, there is no financial responsibility on the government in connection with this transaction, by way of guarantee or otherwise? I do not think that anybody could have read his answer or listened to his answer today without coming away with the impression that it was calculated to give the impression that the answer was no, that there was no financial responsibility, not only no expressed guarantee but no financial responsibility on the part of the Government of Canada.


An hon. Member:: Read his answer.


Robert Lorne Stanfield: I have read his answer very carefully. I want to say there is only one reasonable impression one could get from reading his answer. It may be that the answer is worded in such a way that he can say he did not answer my question. But he purported to answer my question. He certainly gave the impression he was answering my question and he certainly gave the impression that the answer was in the negative, that it was a purely commercial transaction and there was no way in which the government is involved.
I got the impression today that he is not maintaining that position, that he is not maintaining the Government of Canada is not financially responsible for this, he is not denying the point made by my hon. friend from York-Simcoe.
I feel deeply aggrieved. I have always regarded the minister as being an honest man. I have not always agreed with him, but I believe I have a question of privilege. I think he tried in a smart way to mislead in this matter, and I do not think this is the sort of thing which should be allowed to pass unnoticed in this House.


Harvie Andre: Mr. Speaker, I will not take up too much time of the House. I rise because I gave notice last night to the Chair of my intention to raise a question of privilege. I did not give notice today because it follows the question of privilege raised by the hon. member for York-Simcoe (Mr. Stevens). It relates to an answer given to me by the Deputy Prime Minister (Mr. MacEachen) in connection with the same matter. I asked about the liability of the Crown, and the Deputy Prime Minister stated, as reported in Hansard at page 1042, "This does not represent in any way a demand on government resources."
My hon. friend from York-Simcoe presented detailed, accurate, and sincere arguments about the impact this has on our ability to operate; whether this is, indeed, a factual statement of the circumstances. I shall not go over that again but I want to reiterate one point.
Section 14 of the act is very clear. It states that in terms of every transaction Petro-Canada might undertake it is an agent of Her Majesty. Therefore the principal, Her Majesty, or the Government of Canada cannot avoid being responsible for the actions of the agent and therefore maintains a liability in terms of any debts which might be incurred by Petro-Canada. Section 14(3) points out that all property of Petro-Canada, owned directly or indirectly, is the property of Her Majesty. Thus, any pledge of property to support any debentures, or other documents which have been sold by Petro-Canada, are pledges of property belonging to the Government of Canada, to the people of Canada, and therefore there is a government liability; it does represent a demand on government resources, totally contrary to the statement made by the Deputy Prime Minister.
I sincerely hope the Chair will give serious consideration to accepting the motion put forward by my hon. friend from York-Simcoe so that this matter can be referred to the committee, because this whole question of Crown corporations-
November 14, 1978

their liability, the way they operate, how their books are accounted for, and how their spending is accounted for-is not a new issue; it is an issue which has been with us for a while, and one which is in considerable dispute not only between this side and the government but between the Auditor General and the government.
A related matter is this question of the capital budget of Petro-Canada which was approved by the cabinet on June 16 in Privy Council document 1978/1975, by outlining the capital budget which has a source of funds of $205 million in common shares and $269 million in preferred shares.
The Petro-Canada Act states quite specifically that only the Government of Canada can purchase the common or preferred shares of Petro-Canada. This was approved on June 12. I have looked through the main estimates for 1978-79. I have looked through the supplementary estimates which were tabled just last week. Nowhere in those estimates is there a statement by the government that it has put up the cash to purchase these shares, yet the act states specifically that the purchase of common shares is a demand on the Consolidated Revenue Fund, and that therefore that should appear in the spending estimates of the government. This was authorized in June.
There is every reason to believe that money has been committed or spent in terms of the purchase of share in Pacific Petroleums, yet nowhere in the miscellaneous estimates does this item appear. I think there may be a separate item of privilege in the sense that the estimates do not reflect the factual position of the government in terms of the commitment it has made.
I would like briefly to make one further point. I refer to the position of the Auditor General. Just weeks ago the Public Accounts of Canada for 1977-78 were tabled. The Auditor General mentioned again, as he has repeatedly in the past, that the manner in which the government treats the accounts of Crown corporations, the manner in which it includes within its own budget certain expenditures of Crown corporations and the manner in which it excludes certain operations of Crown corporations from its public accounts, create an inaccurate picture of government assets and expenditures. I think that in itself constitutes an item of privilege because an inaccurate statement of accounts is presented to us, as members of this House of Commons, as a factual statement in terms of government spending.
While this is somewhat separate from the point raised by the hon. member for York-Simcoe, it is related. I think this is a grand opportunity to have this issue explored in depth in the appropriate committee so that we can reach some final decision as to what the liabilities of the taxpayers are with regard to Crown corporations and what declarations must be made public in terms of Crown corporations. I am sure the government would have to admit that it is in the best interests of good government and our democratic system to have the rules out in the open and accurate information placed before the
Privilege-Mr. Stevens
House. I strongly urge acceptance of the motion of the hon. member for York-Simcoe.
[ Translation]


Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, as regards the question of privilege directed to the Deputy Prime Minister (Mr. MacEachen), I would like to add the following: it was the hon. member for Calgary Centre (Mr. Andre) who put a specific question to the Deputy Prime Minister as reported on page 1041 of Hansard, and I quote:
-Will the Deputy Prime Minister give his firm commitment that there will be no further nationalization of private companies-
It was in that context, Mr. Speaker, that the Deputy Prime Minister answered the hon. member for Calgary Centre. He wanted to know whether the government was going to nationalize other private companies and the answer to that specific question was also quite clear. The Deputy Prime Minister answered:
I also ask him to probe more deeply beneath the surface of this transaction to discover for himself that the purchase was made entirely without government funds. It is entirely a commercial transaction. It is not drawing upon the revenue of the Government of Canada.
However, Mr. Speaker, if the question put by the hon. member and the answer given by the Deputy Prime Minister are examined in their proper context, it becomes obvious there is no breach whatsoever of the hon. member's privileges. The hon. member is making a fanciful interpretation of a federal law, namely the Petro-Canada Act, and he is giving interpretations. The hon. member for York-Simcoe (Mr. Stevens) even went so far as soliciting legal advice to ascertain whether section 23 of the Petro-Canada Act could be interpreted in such or such a way in light of other sections of the same act. This is a purely academic debate, Mr. Speaker. It is interesting to hear legal advice in the House, but it is equally interesting to note that some questions of privilege are ludicrous and do not hold water. In this case, it is much more a point of debate and a matter of interpreting answers given to quite specific questions than a matter of whether there has been any breach of the privileges of the hon. members for York-Simcoe or for Calgary Centre in carrying out their duties as members of parliament.
I suggest the facts speak for themselves, Mr. Speaker. The hon. member for Calgary Centre wants to know whether the government intends to nationalize other companies. The Deputy Prime Minister said we have no intention of nationalizing any company whatsoever, and in this instance the government is spending no money. A corporation created by a federal act is investing funds through the intermediary of the bank: it is a commercial transaction. There is nothing dishonest about that, nothing that is contrary to the Petro-Canada Act; moreover, Mr. Speaker, the Minister of Energy, Mines and Resources (Mr. Gillespie) himself gave the answer about the whole matter saying it was strictly a question of debate. He

November 14, 1978
Privilege-Mr. Stevens
referred the hon. member to section 21, paragraphs (1) and (2) of the Petro-Canada Act where the legislator saw fit to specify that in certain cases, circumstances or procedures might necessitate the intervention of the Minister of Finance (Mr. Chretien) or the government to guarantee a commercial or financial operation on the part of Petro-Canada.
Now, in this instance, neither the government nor the Minister of Finance had to resort to the provisions of section 21, paragraphs (1) and (2) of the Petro-Canada Act. It is in that context, Mr. Speaker, that we must interpret the replies of both the Minister of Energy, Mines and Resources and the Deputy Prime Minister to the questions of the hon. members for York-Simcoe and Calgary Centre.
If one is taking into serious consideration the facts which are the very basis of the questions of privilege brought up today, one realizes that we are dealing with what is far more a matter of legal interpretation, discussion or debate than a matter of privilege of hon. members of parliament.


Mr. Paul E. McRae (Fort William):: Mr. Speaker, my contribution will be short. I find myself compelled to say a few words because I do not believe that the motion of the hon. member for York-Simcoe (Mr. Stevens) is very serious.
Petro-Canada has had very rough going at the hands of many hon. members, particularly hon. members opposite. I think we should look back to when the bill setting up Petro-Canada was undergoing study in committee and in this House. After second reading there was a clause or clauses in the bill which made the relationship between Petro-Canada and the Minister of Energy, Mines and Resources much closer than is normal with Crown corporations. Clause 2 of the bill was before the committee for about 13 meetings, and in order to pass the bill it was agreed that the relationship between the minister and the corporation would be broken and that the relationship would be at arm's length. I think that was at the insistence of the opposition. Now we have the opposition claiming that for every step Petro-Canada takes, and every time it buys a paper clip, the government and the minister must be responsible.
There was an attempt to separate the corporation from the government. That proposal was accepted by our party in the interest of getting the corporation going. No matter what happens, the opposition will constantly berate Petro-Canada in this House. It happened with regard to the purchase of Husky and is happening with regard to Pacific Petroleums.
I believe Petro-Canada is an imporant part of the petroleum industry of this country. It is important that we have a national petroleum company, in the same way Britain has one and Italy has one. Some foreign state-owned petroleum companies are operating in Canada. The opposition constantly seems to be trying to undermine Petro-Canada. I understand that, if they had the power, they would immediately sell its assets.
I believe that in the course of the debates in committee it was clearly developed that Petro-Canada and the minister were separated in the interest of getting the bill through.


Robert Lorne Stanfield: Mr. Speaker, I apologize, but I rise on the same point. I would simply like to serve notice-I think this is the first time I have had to give you notice-that I would like to consider bringing in a question of privilege myself in view of the answer given rne yesterday by the minister. I took his answer at face value, but in view of the fact that the law as expressed by the hon. member for York-Simcoe (Mr. Stevens), and apparently accepted by the minister himself, puts a different light on it, I should like to reflect on whether I will raise a question of privilege against the minister. This is not something I would do lightly, but I simply want to give you notice, sir, and in view of the lapse of time I regard this very seriously.
If I come to the conclusion that I will raise a question of privilege, I would like to do it tomorrow. I will do it reluctantly, but if my present impression with regard to how the matter stands is correct, I will be proceeding with it.


Mr. Speaker:: Order, please. Of course I will grant the hon. member for Halifax (Mr. Stanfield), as I would any other member, the right to reflect on the matter which he considers so seriously. Therefore I will stand the matter over until the hon. member for Halifax has had a further opportunity to examine it, and if he or other hon. members want to make further contributions after that time, I will be glad to hear them.
I think all hon. members will have to recognize, however, that the basic difficulty of the Chair in matters of this sort stems from two problems. When a minister, after a matter has been raised in this way as a question of privilege, returns to his reply and indicates that that was the reply he gave and that he has examined the matter, given it further consideration, and still stands by that reply, from a procedural point of view the Chair has two difficult decisions to make. The first is that if I were to try to make a decision, I have to make a substantive decision on the basis of facts, as to what set of facts is correct. Essentially that is a disagreement on facts, but often, to resolve it, the test that the Chair has to apply is whether it is a disagreement as to facts or a question of privilege by virtue of an attempt to mislead.
If the Chair finds itself in the position of having to make a decision between the two sides on a interpretation of facts, that is enough for the Chair to surrender the question of privilege and say that on procedural grounds, and in the circumstances, it has no jurisdiction. The difficulty is even more severe here because we are not even arguing about a question of facts but rather about an interpretation of the statute. Therefore the matter seems to place upon the Chair the obligation, not only of deciding on the correctness of facts but also of making a judgment as to which argument is correct under the law.
While I would concede generally that because of the clarity of the opinions which have been expressed this afternoon I

November 14, 1978

would have no difficulty in deciding on the facts, the intricate arguments of the law would be more than I would be expected to decide. Therefore, I say, in a serious way, that if this is where these discussions are leading us, no matter how great the grievance may be, it may leave me in a situation in which procedurally I would have no authority to act, because if we have a disagreement of law and facts, surely that is not a procedural matter on which the Chair should decide.
However, I say that today only in a preliminary way, and I will stand the matter over until I have heard further from the hon. member for Halifax as to whether he wishes to proceed, and if at that time there are other hon. members who have contributions to make, after reviewing what I have had to say this afternoon, I will hear them then.


MR. RODRIGUEZ-ANSWER GIVEN BY POSTMASTER GENERAL
Mr. Speaker:: The hon. member for Nickel Belt (Mr. Rodriguez) gave notice earlier of a grievance with respect to remarks made by the Postmaster General (Mr. Lamontagne). I think it was understood that when both members were back in the House, they would address themselves to it. Do I have an indication now that either hon. member wishes to develop that point further?


John R. Rodriguez: Mr. Speaker, I raised my question of privilege last week and went through the details at that time. Furthermore, I sent to Your Honour's office today a further addendum dealing with that question of privilege. I believe you are to make a ruling today, sir.


Mr. Speaker:: Order, please. Both hon. members made a contribution to this point the other day. After examining the record, I found some difficulty because the words which the Postmaster General (Mr. Lamontagne) used in reply to a question put by the hon. member for Nickel Belt (Mr. Rodriguez) were the following:
Mr. Speaker, when I listen to a question like that, I wonder if the attitude of the hon. member is not one of protecting the workers who got involved in illegal activities or actions disrupting the postal service.
The situation is this: I think there are two things which would tend to cause me to set the point aside, expect that an abundance of caution would tell me that I might ask the Postmaster General to make his position clear. I think that might be the safer course to follow.
It seems to me that I should ask for the withdrawal of the language only when the language used clearly imputes motives which are unsavoury, or else where the language is unparliamentary. In the circumstances, in looking at the language I find that certainly unparliamentary language was not used, but it may be, as the Postmaster General attempted to say on that day, that his answer contained a more generous interpretation than appeared at first. If that is the case, that the Postmaster General was simply concerning himself with whether or not the hon. member was protecting union members who were being charged with offences, that seems to me to be a legitimate objective of the hon. member. It is not
Introduction of Bills
protecting union members who have difficulty in the courts, and it is certainly not an unsavoury implication.
However, it appeared in the answer that, because of the last couple of words "or actions disrupting the postal service" the impression might have been conveyed that the Postmaster General was attempting to say that the hon. member was concerning himself with protecting those who were disrupting the postal service, instead of putting a question. If that is so, I would ask the Postmaster General, out of an abundance of caution, to clarify to the House that he did not intend to impute that kind of motive to the hon. member. If that could be done, the matter could be gracefully retired.


Hon. J. Gilles Lamontagne (Postmaster General):: Mr. Speaker, I can say clearly that I did not intend to impute motives to the hon. member for Nickel Belt (Mr. Rodriguez). However, I would like to stress the fact that in reading the question of the hon. member I find I could probably have raised a number of questions of privilege because the question is full of insinuations that we are threatening the employees and that harassment is our policy. I do not think that is the way to ask a question in the House, with that presumption.
I am not imputing motives to the hon. member nor, I am sure, is he imputing motives to me or to the Post Office Department. The fact is that when we have good, law-abiding workers, they do not have to worry, and if they have nothing reprehensible in their record we would be glad to withdraw the letter of intent. In the circumstances, Mr. Speaker, I think perhaps the words went beyond my meaning.



ROUTINE PROCEEDINGS


Mr. Bob Kaplan (York Centre) moved: for leave to introduce Bill C-442, to amend the Canada Elections Act (choice of polling day).
He said: Mr. Speaker, the need for this bill arose during the recent by-elections when the government called the by-elections on a religious holiday. There appears to be a lack of flexibility in the legislation at present which requires that an election be held on a Monday or, in certain cases, on a Tuesday.
One of the thrusts of this bill is to permit an election to be called on a Wednesday, Thursday, or subsequent day, if a religious holiday intervenes. A second thrust of the bill is to provide that the advance polls be open until ten o'clock at night, because Saturday advance polls always conflict with the Jewish religious holiday. It would extend the voting hours until ten o'clock to overcome that problem.

November 14, 1978
Order Paper Questions


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Yvon Pinard: Mr. Speaker, the following questions will be answered today: Nos. 246 and 254.


Mr. Epp: From June 1, 1974 to date, what lawyers in the Constituency of Provencher were given work by the Department of Veterans Affairs and what amount was each paid per year?


Mr. Claude-Andre Lachance (Parliamentary Secretary to Minister of Justice):: In so far as the legal agents of the Minister of Justice are concerned: None.


Mr. Epp: From June 1, 1974 to date, what lawyers in the Constituency of Provencher were given work by the Department of Fisheries and the Environment and what amount was each paid per year?


Claude-André Lachance: In so far as the legal agents of the Minister of Justice are concerned: None.


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


Mr. Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-7, to provide supplementary borrowing authority for the fiscal year 1978-79 and to amend the Financial Administration Act, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Speaker:: Order, please. Before putting the question, may I advise the House, pursuant to the special order adopted on Thursday, October 26, 1978, a total of five hours has been allocated to report stage and third reading stage of this bill.


Stanley Howard Knowles: Not including any time spent on votes.


Sinclair McKnight Stevens: That Bill C-7, to provide supplementary borrowing authority for the fiscal year 1978-79 and to amend the Financial Administration Act, be amended in clause 5 by striking out lines 22 to 24 at page 2 and substituting the following therefor:
"5. (1) This act shall come into force on a date, after royal assent, to be
fixed by proclamation."
He said: Before Your Honour leaves the chair, could we have a clarification of your interpretation of the House order under which we are operating? Quite rightly Your Honour referred to five hours of debate for report stage and third reading of Bill C-7, but I understood that was exclusive of any time to be taken in the voting proceedings. Is that correct?


Mr. Speaker:: That is my specific recollection. If there is any disagreement on that, I can be informed, but my specific recollection is precisely in the terms stated by the hon. member for York-Simcoe (Mr. Stevens).
In order to set the record straight, the last paragraph of the order reads as follows:
That the report and third reading stage of the bill not exceed a total of five hours in addition to any time required for divisions.


Sinclair McKnight Stevens: Thank you, Mr. Speaker.
In speaking to my motion today, I feel hon. members may be interested in an explanation of why I feel this motion deserves support. If hon. members refer to Bill C-7, they will note that the clause I am proposing to change simply reads as follows:
This act shall come into force or be deemed to have come into force on November 1, 1978.
During committee proceedings there was considerable questioning of the minister and certain of his officials respecting the present state of the borrowing authority of the Government of Canada. They were asked to what extent debt already was incurred under previous borrowing authorities, and to what extent is there room to borrow more funds.
The reason this questioning was so significant was because last March the Minister of Finance (Mr. Chretien) secured an authority to borrow an additional $5 billion. At that time he indicated that that borrowing authority would be sufficient to suit the government's needs until the end of fiscal 1978-79. In short, the authority was granted to the minister by parliament on the understanding that that was all he needed. Then, on the introduction of this bill, the minister stated that an additional $7 billion is needed. He gave various reasons why that additional amount was needed. For example, he stated that foreign borrowings had exceeded expectation, and that the Canada Savings Bond issue had to be covered.
November 14, 1978

I should like to make two points respecting those comments of the Minister of Finance. When he introduced this bill, certainly foreign borrowings were contemplated to the extent of $3 billion to possibly $4 billion. They were in hand on March 22 when the minister asked and secured the $5 billion authority to which I have referred. It is unfortunate that he would attempt to fudge this issue by saying, "We said $5 billion, but we did not realize the foreign borrowing was going to be a little bigger; so please give us more money". Before the Standing Committee on Finance, Trade and Economic Affairs, the government made it very clear that borrowing authority to the extent of $3 billion or $4 billion was in hand.
My second point deals with the Canada Savings Bond issue. At the present time the Canada Savings Bond issue is outstanding. In fact it was supposed to close tomorrow, in the sense that if one wanted to pick up one's bonds, one could do so tomorrow. During committee stage we became very curious as to whether the Canada Savings Bond issue could be closed if this bill is not passed. In short, has the government sufficient available borrowing authority, be it $5 billion or some other authority, to close the present Canada Savings Bond issue?
Rather than refer to the various minutes of the committee, perhaps I can summarize them. It was said before committee, "No, we need the bill passed or we cannot close the Canada Savings Bond issue to the extent we would like". When the government sensed what we were getting at, the Parliamentary Secretary to the Minister of Finance (Mr. Martin) then started to waffle a little in committee. He said that really on reflection it was a question of whether the net borrowings were sufficient. Without unduly delaying the House, I should like to summarize what happened in committee.
The real story is: if the government has to exercise its full lines of credit with foreign and Canadian banks, literally there would not be enough room left to finish the Canada Savings Bond issue, certainly if sales under the current issue are in the order of $6 million to $8 million, which is the government's hope. If there is any single example of government economic policies being in a chaotic state, this is it. To have a government, on the eve of closing Canada Savings Bond issue, come before the House requesting a fast and quick $7 billion borrowing authority, leaves some doubt as to whether it will be able to close the Canada Savings Bond issue.
The government is attempting to keep a stiff upper lip and to pretend to the outside world that there is no problem. Why did it have to extend the time from November 15 to November 22 when people could pick up their bonds with no loss of interest? The truth is that the government cannot close the deal as it intended because the bill has not been passed as yet.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: The government has put itself into another corner. Can it be believed that it is in a corner with something which could have been anticipated 12 months ago, namely, the financing of its Canada Savings Bond issue for the fall of 1978? That is the kind of governing we have, and that is the type of government with which we have been living. Is it any
Borrowing Authority Act
wonder the government is so reluctant to face the nation? This government knows this type of irresponsibility would certainly be condemmed by the voters of Canada. This is symbolic of how this government has been handling the economic affairs of this country; it is ad hockery gone wild, simply an attempt to solve yesterday's problems today, with new problems requiring solution developing very quickly. This government is stumbling and bumbling.
I feel this November 1 date is of importance for a number of reasons, specifically in view of the answers to direct questions put to officials who appeared before the Standing Committee on Finance, Trade and Economic Affairs. We asked what the significance of the November 1 date was, and the officials replied that this was the beginning of the Canada Savings Bond issue. In short, unless this legislation is passed in a retroactive fashion, this government is in trouble. It will be in trouble because there is a serious legal question as to whether it can actually complete this Canada Savings Bond issue without authority.
As we know, the borrowings of this government are very clearly covered by the Financial Administration Act. It states that no money shall be borrowed or security issued by or on behalf of Her Majesty without the authority of parliament. This government has put in place a Canada Savings Bond issue. It has placed advertisements and has agents working, and it has increased the interest rate on the issue twice during its sale. It has extended the free period from November 15 to November 22 in order to attract more buyers. Incidentally, we think that extension is also because the government thinks that will provide enough time for this bill to receive passage in this House. As of this date we do not believe the government has the clear authority to close this deal.
Let us put this into perspective. What will that free week, the extension from November 15 to November 22, cost the Canadian taxpayers? During that week buyers will be able to pick up the extra interest, notwithstanding the fact they will not have to put out the cash. I suggest this will cost the taxpayers an additional $13 million. By this one example of maladministration the Canadian taxpayer is being asked to pay an additional $13 million in added interest that will have to be paid for funds which will not be received until November 22.
Just consider how ridiculous the situation is in which this government finds itself. If for some reason this bill has not received passage by November 22, the government will literally have to postpone the closing date, perhaps until November 29, hoping parliament will finally give authority to complete the deal.
You might ask, Mr. Speaker, why we are suggesting that the November 1 date, to which I have referred as the date in relation to the Canada Savings Bond issue, should be changed.
I suggest it should be changed because it is contemptible for the government to take parliament so much for granted as to bring forward a bill that will give the government retroactive

November 14, 1978
Borrowing Authority Act
authority in respect of something it should have brought forward in advance, allowing us a proper opportunity to appraise the situation.
You may ask, Mr. Speaker, why we want to embarrass the government in this way, by changing the November 1 date to some other date. Obviously if the government is caught in this deal it will be caught royally, because it will not be in a position to close the Canada Savings Bond issue. I suggest this is one instance when we must take the minister's words at face value. We must accept what he said literally, and I think he misled the House. I think it is in the interest of every hon. member to hold him to his word.
Last Friday when I asked the minister directly if he had the authority to close the Canada Savings Bond issue he replied categorically that he did. That reply was in direct contradiction to the evidence given before the Standing Committee on Finance, Trade and Economic Affairs-a truly remarkable thing. Having given that reply, we should take the minister at his word. If he does not really need, or does not rely on the November 1 date, he should support this motion which simply states that authority will come into effect after royal assent, whenever the government wants to proclaim it. That is what we are saying in this amendment.
The reason we included the words "after royal assent" is simply that we did not want the government to play games. Had we simply said the government would have authority following royal assent and by proclamation, the government might retroactively have proclaimed the act, effective November 1.
Let us check to see what the minister actually said in respect of this direct question. He was asked a question by my colleague, the hon. member for St. John's West (Mr. Crosbie), as to whether he had sufficient authorization available to close the Canada Savings Bond issue, to which the minister replied that he had. Let me read into the record exactly what was said as it appears in Hansard of November 10, at page 1008:
Mr. Speaker, my question is directed to the Minister of Finance. I would First like to congratulate him for being here in the House of Commons-I know this is a busy period-when 20 of his colleagues are away. He is one of four who are here.
You will recall, Mr. Speaker, that the hon. member corrected that, saying it should have read "one of 14 who are here".
The hon. member went on as follows:
My question is this: yesterday at the Finance committee-


An hon. Member:: Where is your leader?


Mr. Crosbie:: Listen to them bray over there, Mr. Speaker. Yesterday at the Finance committee, in answer to a question as to where the authority would come from to cover the present Canada Savings Bonds issue, the parliamentary secretary to the minister said there would be between $3 billion and $4 billion of the current Canada Savings Bonds issue authorized by Bill C-7.
My question, therefore, to the minister is this: is it the position that unless Bill C-7 is passed by parliament, there cannot be completed the current sale of Canada Savings Bonds which is to total, in gross, from $6 billion to $8 billion; that these bonds cannot be sold and the transaction consummated unless Bill C-7 is passed? Is that the reason the minister agreed to drop his abominable $10 billion additional imposition of authority for next year?

The minister in his reply said:
No, Mr. Speaker, we are not afraid that the Canada Savings Bonds issue will not be pursued. There is no problem. We have enough borrowing authority to go through with the campaign. We hope this bill will be passed as quickly as possible, as we need the authority to carry on for the rest of the year after that campaign.
On the basis of that answer by the minister, I think it is proper for us to assume that he does not need the retroactive date. It was made very clear to the committee that this date dovetailed with the Canada Savings Bonds issue. If that is the only reason for this inclusion, then I suggest it should be removed. Rather than the November 1 date it would be better to have the act come into force on the date following royal assent, by proclamation.
We should make it very clear that the minister, in giving that answer, was counting on everything working in his favour. He clearly hoped, for example, that the line of credit to which I referred would not have to be utilized too quickly. We have been pressing the government to indicate whether the borrowings of Petro-Can represent obligations on the part of Canada or are, as the ministers have been implying, some other kind of strange things such as borrowings, but not borrowings that obligate Canada. One of the reasons we are pressing is that surely, when considering the over-all debt position at the federal level, including the authority to borrow even more money, it is absolutely essential to have a definition of what is included in the debt calculation, and what is excluded.
That is why I suggest that members who may agree to join in this debate on Bill C-7 should do so bearing in mind that we are dealing with the whole conscience of why we are here. It is the question of parliament's control of governmental expenditures, including governmental borrowings.
When this bill was at second reading I put certain facts on the record about how desirable it would be to get better control of expenditures. I mentioned that the debt level in Canada is almost triple what it was a few years ago. I would reiterate that because I think it is absolutely essential that parliament regain its position as the controller of Canada's treasury. I therefore urge hon. members to support my motion. I feel this would be a better piece of legislation if it were made clear that it will only be operative from the time parliament passes it, as opposed to being retroactive to November 1.
The more I think about the consequences of the government's borrowings, the more I reflect on what its attitude seems to be with respect to $671 million it has to put up for the purchase of 48 per cent of Pacific Petroleums Ltd. I become alarmed particularly when 1 hear the attitude of my colleagues to my left, the socialists, who have been egging the government on. Today they presented a motion under Standing Order 43 urging members on the government side to go further. I presume the thrust of that motion was to encourage the takeover of the whole resource industry in Canada and be done with it.
November 14, 1978

I think this is unfortunate. This government, though Liberal in name, is essentially socialist in nature and is being encouraged by a party which calls itself the New Democratic Party, and which is not socialist in name but is socialist in reality. When we see this kind of attitude I think it is time for those who believe in the free enterprise system in Canada to stand up and be counted. It is time we stopped being apologetic for the system that has given us our present prosperity, and started laying a few facts on the line.


Stanley Howard Knowles: Our present troubles too.


Sinclair McKnight Stevens: The hon. member for Winnipeg North Centre (Mr. Knowles) speaks about our present problems. Who in this House would know better than he why we are in this present predicament? It was his party, in conjunction with the minority government of the emperor himself, that seeded the expansion in our monetary system and fiscal system that gave us the inflation we are now living with, gave us our high interest rates, and caused the lack of real growth. In short, it was that little partnership that surfaces periodically that has ravished this country, and it was particularly hard on the poor to whom the NDP like to pretend to be the great protectors-


Stanley Howard Knowles: Mr. Speaker, would the hon. member permit a question?


Sinclair McKnight Stevens: After I am through, Mr. Speaker.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Obviously the hon. member is not used to direct answers.


Stanley Howard Knowles: I am used to courtesy.


Sinclair McKnight Stevens: Mr. Speaker, it was only yesterday that we were questioning the government about why it saw fit to commit possibly $1.4 billion to the takeover of Pacific Petroleums, Ltd., bearing in mind that it will not bring in one extra barrel of oil to Canada and will not create one morejob. Does it not reflect the true attitude of my colleagues to my left that their leader stood up and said that was the type of question that makes the government look progressive, in the sense that the government was doing something progressive by the takeover of a free enterprise company such as Pacific Petroleums?
Perhaps I should mention that I think we have to start taking a new message to the Canadian public, a message of new hope. I think we have to acknowledge that although in Ottawa we are buffeted with requests for the government of the day to do this or that, there is always the assumption that government action is needed and that such action will be beneficial. Rarely is it suggested that often the best thing for governments to do is just nothing. Rarely is it realized that the government does not create wealth.
Borrowing Authority Act


Mr. McKenzie:: Just debt.


Sinclair McKnight Stevens: To me that is the crux of what we have under review. As my colleague has just said, the government in this case does not create wealth but it sure knows how to create debt.
The socialists on the one hand, with almost religious zeal, feel that more government involvement can help solve our problems, while the statists, particularly the present government, crave power for the sake of power. It is in this atmosphere that I want to suggest a really new thought to most members of the House. I suggest it is perhaps a brand new thought for those to my left, and for many on the government side it is something that, if they ever thought of it, they have tended to forget. It is an idea that we appeared, a decade ago, to have turned away from, with the election of the emperor we have in Canada. Yet it is an idea which once turned a raw and underdeveloped continent of poverty stricken colonies into two of the richest nations on earth-Canada and the United States.
It is a concept which, invented 200 years ago in England and then fuelled by the individual dreams of millions of immigrants, became the most forceful engine for the creation of wealth and prosperity the world has ever seen. That idea, of course, is the free-enterprise system. I know that over the past decade it has become fashionable to portray the free enterprise system as simply the pursuit of shallow materialism, as the socialists would say, by "Greedy, selfish and self-serving men." In contrast, socialism and the centralist philosophies have been portrayed as a new form of egalitarianism-of people living for society and for each other. This concept, though widespread and popular, is based in myth, and not in fact. The sooner we start laying a few of the particular facts on the record of this House, the better.
The central planners rarely admit, as they seek power in the name of the people, that it is power for themselves they seek. To the extent we give them that power we lessen our freedoms.
We should be encouraged to note that in recent polling in the United States, 90 per cent agreed with this statement, "We must be ready to make sacrifices if necessary to preserve the free enterprise system. In 1976, almost three-quarters disapproved of the view that "the country would be better off if big businesses were taken over by the government as in certain European countries."
Throughout mankind's civilized history, central control of national economies has been the rule, not the exception. That is often forgotten, Mr. Speaker, so let me repeat it-throughout mankind's civilized history, central control of national economies has been the rule, not the exception. In each case central planning has not proven successful, and as the centrally planned state has faltered, tyranny has increased, with people becoming more and more the serfs or vassals of the state. That is what the socialists want to put us back to.
The free enterprise or capitalistic system, as we know it, is unique in the 4,600 years of mankind's experience. For the first 44 centuries of our civilized existence, we find that the

November 14, 1978
Borrowing Authority Act
well-being of individuals ebbed and flowed with little or no real gain. But with the birth of the industrial capitalist system some 200 years ago, there was an explosion in mankind's well-being. Suddenly, as a result of technology breakthroughs of industry of the accumulation of wealth through corporations which helped productivity, it was found that more and more workers could be employed. In turn this gave rising real wealth for their families and for the nation, and with it disease lessened. Food became more plentiful as production grew.
We find that it takes the same amount in gold today to buy a loaf of bread as it did two centuries ago, yet in the past 200 years the real earnings of workers in the western world have risen sevenfold. Notwithstanding this success, it is strange to find that many today, wittingly or unwittingly, suggest the free enterprise system should be virtually replaced, without realizing that what they are suggesting is a return to the world of 200 years ago.
If one is curious to see what that world was like, I ask any member of this House to go and view the slums of Calcutta, or many of the streets of Cairo, and see first-hand how most of our forefathers lived before they and their descendants were lifted by the free enterprise system to our present prosperity.
The Parliamentary Secretary to the Minister of Finance has asked twice what this has to do with Bill C-7. Mr. Speaker, this is what it has to do with it. Bill C-7 will be an extension of the borrowing authority of this government by another $7 billion. To the degree the government is now spending a dollar of which it can only finance out of revenue 75 cents of that dollar, 25 per cent ends up in debt or in the creation of artificial money. To the degree this continues, there is absolutely no doubt that the government will continue to generate inflation. To the degree the government generates inflation it is going to separate still further the wealthy from the poor. This government is going to devastate our economy and, in short it will cause this country to evolve into something not a free enterprise system any more, but a state controlled system, which presumably their socialist friends would love. But I can assure hon. members the people of Canada will not enjoy that should it ever occur.
I have just touched on what 1 think is often overlooked, and that is that we do have a good system traditionally in this country. The enterprise system has produced great prosperity, but it cannot continue to produce that prosperity if we allow government to encroach on it continually, if we load the system with undue taxation, or if we load the system with the type of borrowing that has been taking place at the federal level for the last three or four years. That is why I urge hon. members to consider my motion. I think it would make this bill more meaningful in relation to the Canada Savings Bond question. I would hope also that all members, before voting on Bill C-7, would think of the consequences. I remind hon. members they will be giving this government more funds, because of the lack of restraint shown at the spending level. This has to end. I hope that, whatever debate ensues on Bill C-7, that point will be driven home to the government.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Speaker, at the point when I asked the hon. member if he would permit a question, he was complaining about some of the things that had happened during the parliament of 1972 to 1974. He was complaining that we had co-operated with the government of that day in getting certain legislation that, in his view, was the cause of all the troubles we are now experiencing. I ask the hon. member for York-Simcoe (Mr. Stevens) if that means that he would like to undo the social legislation, the increases in pensions and family allowances, and also in veterans benefits, that we achieved during that period of time. Is he telling us that if his party came to power they would turn back the clock on the social legislation we won during the period from 1972 to 1974?


Sinclair McKnight Stevens: Mr. Speaker, my good friend, the hon. member for Winnipeg North Centre (Mr. Knowles), has not been following me. His question is in relation to something about which I made no comment. I was talking about the expansion of our monetary system during that period. Certainly when "Blue Eyes" was here, the minister of finance now known as Mr. Turner, that is when the explosion took place. Government spending went up over 100 per cent during his 44 months as minister of finance. You will recall it was that minister, to the great delight of the liberal NDP members to my left who, at committee, said it is political expediency that dictates, not economic reality. It is that type of thinking that caused the monetary explosion that we are now getting the fallout from in this country. That is what I was referring to; never once did I refer to that legislation. The hon. member for Winnipeg North Centre must have been snoozing or something if he thought 1 did.


Stanley Howard Knowles: Mr. Speaker, since my question had to do with social legislation which is closely related to the increase in spending by the Government of Canada, may I ask him if, like others in this House, he is simply refusing to answer my question as to where his party stands on expanded social legislation?


Sinclair McKnight Stevens: I can give the hon. member, my good friend, a very short answer; all he has to do is try us. Another election is coming along and, with his support and the support of other NDPers-and I know we have millions of Liberals who are supporting us now-we will form the government and he will see one of the best run countries he has ever seen.


Mr. Alan Martin (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I continue to be amazed at how wide our rules are in this House, but perhaps it is of general benefit. But here we are dealing with report stage of Bill C-7, which would authorize the government, when needed, to obtain additional borrowing funds. This bill has been debated at great length on second reading in this House. This is a bill on which the hon. member for York-Simcoe (Mr. Stevens) participated - both in this House and in committee at great length. Nothing new has been raised today.
November 14, 1978

In the course of report stage debate on this borrowing bill, the hon. member for York-Simcoe has been up to one of those old tricks of trying to piggyback in all sorts of general philosophical discussions involving what should or should not be done in the economic field and ranging all over the map. Because he has done that, it seems only fair that we at least respond to one or two of the points he has made.
I am delighted that the hon. member for Winnipeg North Centre (Mr. Knowles) posed the question that he just did to the hon. member for York-Simcoe. It shows over and over again that the official opposition are trying to snow the Canadian public with regard to their ability to form a government of this country. They will not answer hard questions on hard points. They will not state where they stand on important matters of social legislation.
The official opposition have told the Canadian people that if they are put in power they will get rid of Petro-Canada. They have said they will get rid of the instrument the Canadian people have to involve themselves directly in the oil and gas resources of this country. That is what they have indicated about an instrument that most countries in the western world have.
They have not indicated their position on matters of social legislation. This has come up over and over again, including the debate on Bill C-10, which is also before the House at the present time. They will not state their position. That party is trying to maintain that within several months it will form the government of this country. It seems rather incredible, therefore, that they are prepared to try and snow the Canadian public without giving concrete answers to simple questions of that type.
I made a very quick calculation, as the hon. member for York-Simcoe was speaking. He probably did not do it intentionally, but a type of arrogant approach was perceived in some of his comments. Canadians need to be worried about this posture by the chief financial critic of the official opposition. Were he to be the finance minister of this country, what position would he take in matters that are very sensitive to Canadians? Would it continue to be that type of attitude whereby that party simply says they know what is best for Canadians, this is what Canadians are going to have, they are going to cut out various programs, they will get rid of a lot of civil servants, wind up Petro-Canada, and get rid of a great deal of legislation that has been on the books of this country for the past 50 years? This question will have to be addressed at some point. I presume there will be opportunities as the coming year develops.
The party opposite has been in power in this country for only 19 years in this century. It has been in power for 19 out of 78 years, roughly 25 per cent of the time. What immediately comes to mind is, why is that? Why is it the party opposite has not been able to sell itself to the Canadian people for more than 25 per cent of the time that has elapsed in this century?
Borrowing Authority Act
The answer is very simple. It is shown in the kind of comments being made here this afternoon by the hon. member for York-Simcoe. He is not prepared to answer simple questions as to what their answers will be on key issues. In addition, he and his party continue to criticize legislation whereby the Canadian public, having been faced with an extremely serious problem during the time of the OPEC oil crisis, have moved to establish their own national petroleum corporation. The party opposite has stated that before that corporation is more than two or three years old, it will get rid of it. They have said that will be one of the first things they will do. I do not think the Canadian people will buy that kind of approach. They will not buy the approach indicated in the comments of the hon. member for York-Simcoe, the finance critic of the official opposition.
I come back to one or two other points that have been mentioned. The first is the question of the borrowing authority and how it is to be used. In the course of his address during second reading, in debates in the House and in discussion in committee, the minister clearly indicated the purpose of this borrowing authority. He gave the exact reasons why the government is coming before the House at this time.
This takes us back to another point raised by the hon. member for York-Simcoe. He indicated that the total outstanding debt of this country places us in a very precarious position. I forget his exact words. Facts were placed before this House during my speech on second reading of this bill indicating that the percentage of debt outstanding in this country as a percentage of gross national product is less than the percentage in the United States, a fairly successful country to the south of us. It was also clearly indicated, and the hon. member can check this in Hansard, that the improvement in that ratio over the past ten years has never been more significant in this country, compared with the United States.
The other point in relation to his general remarks was that he continued to push the concept of gloom and doom to the Canadian people, trying to convince the Canadian people that their economic situation is far worse than it actually is. During the course of second reading of this bill, I responded to some comments by the hon. member for York-Simcoe. At that time I indicated where Canada stood in relation to other countries that he enumerated in the western industrialized world, and how Canada ranked in relation to those countries in certain significant areas. I will not repeat all of that, but I wish to repeat one or two facts today, because once again the hon. member has left the innuendo that when you match Canada against many other free enterprise capitalist-oriented countries, we are in horrendous shape.
We have not done badly in the 78 years of this century in which this government has led the country for 75 per cent of the time. Here is where we stand in one or two of these areas. I will repeat some figures I mentioned during the debate on second reading.
In the rate of growth in our labour force from 1968 to 1977, Canada is in first place in relation to the six countries mentioned by the hon. member for York-Simcoe, namely, the
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United States, West Germany, Switzerland, Belgium, and Denmark. In terms of the cost of living index, that is to say, the smallest increase in 1978, we are second to the United States in relation to these other countries. In relation to food prices, the least costly in 1978, we came out in first place. In relation to the rate of growth in our real domestic product for the period 1968-1977, we are in first place. In relation to housing starts 1970-1977, we are in second place, right behind Belgium, with the United States in third place.
There are many more statistics. They are based on very reliable sources. They indicate to the hon. member for York-Simcoe and the Canadian public, if ever they are given a chance to see these kinds of statistics, that the Canadian economy is not in that bad shape, particularly when matched against the economies of the major countries of the industrialized world.
I hesitate to repeat this kind of detail, but it seems we have to do this over and over again because the gloom and doom philosophy and the approach of the official opposition are being pushed on the Canadian public, day in and day out. Whenever they get an opportunity, either in this House or in speeches outside, they try to connive the Canadian people into thinking they have a bad deal going for them with the present government in Ottawa, that if given the chance the official opposition will shake up and improve the situation. The substantiation of their claim does not add up when you look at the facts of the situation and get away from their innuendoes which cannot be supported.
I am not sure whether the hon. member for York-Simcoe was bringing things out of the air or not when he referred to the slums of Calcutta and the streets of Cairo. Most Canadians are concerned about the conditions they see in Third World countries, but to suggest for one minute that our situation in Canada is inferior to that of any other major country is to fly directly in the face of the information available. He will get the straight facts if he talks to new Canadians who have come to this country in the last ten, 15 or 20 years. These people will tell him how Canada ranks in relation to other countries around the world. They will give him the story straight, and I am sure he has a good number of new Canadians in his riding, as I have in mine.


An hon. Member:: Three years ago, or five maybe.


Alan Gray Martin: Many of these people have been here during the years of progressive Liberal government from 1963 to the present time, and many of them will also be here as those progressive years of Liberal government continue in times to come.


Sinclair McKnight Stevens: I was rather enjoying the babbling of the hon. member but I must correct a misundertaking he must have taken from my remarks. I was saying that if you want to see the living standards which existed 200 years ago you can see something comparable in Calcutta or in the slums of Cairo. In no way was I referring to them as being of a contemporary
nature in Canada. There is no mystery about the conditions in which people used to live before private enterprise enabled us to reach our present standard of living. In true Liberal fashion, what I said on that subject got distorted.


Alan Gray Martin: I am delighted to accept that explanation, and I am pleased the hon. member is in no way attempting to indicate that if his party were to become the government of the country we would move any closer to the conditions which exist in those countries. I believe, though, that Canadians would be taking an incredible risk, and I am sure all of them will realize this as the months transpire between now and the time of an election.
The electorate will be asking some of these questions. Questions will not only be coming just from the mouth of the hon. member for Winnipeg North Centre in the House of Commons. They will be asked on the streets. They will be raised on campaign trails. They will come one after the other, and the hon. member for York-Simcoe, the Leader of the Opposition (Mr. Clark) and others over there who are eagerly getting ready in their own minds to assume grandiose positions in Ottawa with need to be ready to answer these questions.


An hon. Member:: We did in the by-elections.


Alan Gray Martin: No, you didn't have to answer them in the by-elections because in the by-elections there was one thing the Canadian public knew. They knew that going out to vote against the government could in no way affect the leadership of this country. That was a very important factor to them.
At some point, Mr. Speaker, it might be useful for me to get back to the subject at hand. The only reason I am off it again is because the hon. member for York-Simcoe spent 75 per cent of his debating time on other issues so I am tempted to spend a little of mine responding to him. Again, 1 want to get back to Petro-Canada and the proposal put forward by that corporation to take over the assets of Pacific Petroleums.
I think it was mentioned by the Minister of Energy, Mines and Resources (Mr. Gillespie), or perhaps by the parliamentary secretary to the House leader or it may have been the hon. member for Fort William (Mr. McRae), that on every opportunity available to it the opposition decries Petro-Canada. Every time they have a chance, they have to try to talk down this corporation, the great work it is doing and the great place it has in the eyes of the Canadian public in attempting to bring us to a position of self-reliance in oil and gas. They do this because they have to back up the statement they have made.
They are stuck with this idea of getting rid of the corporation. So now, having decided they are going to do that, they have continually to find ways of supporting their argument, and every day and every week it gets more difficult to support that particular plank in their platform. It cannot come out of the program now because it is indelibly there in stone, and they are going to have to speak to it over and over again as the months go on. I am not going to get into an argument. We discussed this at great length when the legislation was before this House. I would simply say this to the hon. member for

November 14, 1978

York-Simcoe and to hon. members opposite: Canadians, by and large, are very supportive of the idea that we in this country should do all we can to move toward self-reliance in the area of oil and gas.


Sinclair McKnight Stevens: What has that got to do with Petro-Canada?


Alan Gray Martin: The sole raison d'etre of Petro-Canada is to help us move toward that goal and if, by doing the kind of thing exemplified by this offer for the shares of Pacific Petroleums, they can gradually reduce the horrendous percentage of our over-all natural gas resources petroleum industry that is controlled outside the country, I suggest the Canadian people are going to be very supportive of it.
I suggest to hon. members opposite that they have taken hold of a tiger by the tail by putting into their platform already at this early date an undertaking that they will, once in power, immediately unwind and dispense with Petro-Canada.
I should like to come back now to the amendment the hon. member for York-Simcoe made. Here again, the question whether the date of the bill should be November 1 or some later date was discussed at great length in committee, and 1 think the hon. member for York-Simcoe was given all the answers he was seeking. However, I am prepared to read into the record a little further explanation or to make a further explanation why we on this side are not prepared to accept that amendment.
One of the purposes of the bill is to clarify for greater certainty that it is the net amount of any increase in oustand-ing indebtedness which is to be charged against the borrowing authority. This was explained at great length in committee. It is an important point to make. For instance, in the case of the current Canada Savings Bond issue, it is not the total amount of the bonds that are sold that will be charged against the borrowing authority; rather, it is the net amount of new bonds sold as against any conversions made of old issues. Calculated on this basis the government is satisfied that in the normal circumstances existing borrowing authority would indeed be sufficient to meet both the full amount of the current Canada Savings Bond issue and any borrowings which might take place under the revolving credit agreement recently negotiated with Canadian and American banks.
However, there is a possibility that an unusually large Canada Savings Bond issue coupled, perhaps, with the need to borrow under one of the revolving credit agreements, could deplete the existing borrowing authority. It only makes sense in a situation of that kind to ensure that the necessary arrangements can be made should the need arise. Under the circumstances, if this were to happen and we did not have the additional borrowing authority, yes, one would then have to cut off sales of any further Canada Savings Bonds. Again, I say this is a remote possibility, but it is good business practice and good housekeeping to be protected against that sort of thing. To preclude this remote possibility the government is ensuring that the bill comes into force on November 1, which is the effective date of the Canada Savings Bond issue.
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I want to make one other point clear because the hon. member for York-Simcoe raised it in committee. He always comes back to this November 22 date. He knows-it was explained to him in committee-the reason for the extension from November 15 to November 22. It is normal to have 15 days. There is nothing unusual about that. The reason for the extension is the latest change in the interest rate which, as the hon. member well knows, was the result of a Bank of Canada increase. An additional week is being allowed to give Canadians an opportunity to take advantage of this new issue at the new rate, and in order to give them extra time to complete their transactions. That is the reason for that. There was no secret motive, which I think has been imputed. Perhaps that was done unintentionally. I am not entirely sure, but that was certainly the indication in the remarks of the hon. member for York-Simcoe.
With those comments, both of a general nature and a specific nature, regarding the amendment, I encourage hon. members opposite to support the November 1 date as it now stands and to defeat the amendment, which would simply put an unknown date on the bill, namely, the date it is given royal assent.


A. Daniel McKenzie: Mr. Speaker, I welcome this opportunity to become involved in the debate on Bill C-7 regarding borrowing authority. I always enjoy rambling and wide open debates like this one, and I always like to follow the parliamentary secretary so that I can correct all the statements he makes and the misleading information he gives the House and the Canadian public. He is becoming a master at that.


Alan Gray Martin: Mr. Speaker, I rise on a point of order. I would like to ask the hon. member for Winnipeg South Centre (Mr. McKenzie) if he would consider withdrawing that comment. He has indicated that I have made misleading statements to this House. He has done that without any substantiation whatsoever, and I do not think a comment like that should be allowed, unless the hon. member is prepared to be specific and indicate the erroneous information I have put before this House.


A. Daniel McKenzie: Mr. Speaker, I have no problem with that at all.


Mr. Deputy Speaker:: Is the hon. member rising on this point of order?


A. Daniel McKenzie: I have been on my feet for only one minute.


An hon. Member:: That is too long.


A. Daniel McKenzie: When I make statements like that, I intend to substantiate them in my speech.


Mr. Deputy Speaker:: Order, please. Perhaps I should intervene. That might calm everything down. I must say that I was speaking with one of the clerks and did not hear the exact
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words which were spoken. However, if, as the parliamentary secretary says, the words were to the effect that his remarks were not factual or were misleading, that is not necessarily unparliamentary. It becomes unparliamentary if the hon. member says the misleading was done intentionally.


Henry Perrin Beatty: Which he did not say.


Mr. Deputy Speaker:: If it is just a matter of opinion, and as long as the hon. member did not attach a qualification regarding intentional misleading, that is permitted by the rules. Such words are used regularly in the House. If the hon. member pursues his insinuation or reflection on the remarks of the parliamentary secretary, I might have to decide otherwise.


A. Daniel McKenzie: I have no problem qualifying my remarks, Mr. Speaker. I would never make a statement like that without going into it a little deeper. I suggest that the parliamentary secretary listen to me for a few minutes before he starts challenging me.
The parliamentary secretary said that the Conservative party would fire many civil servants. We have never at any time said we would fire many civil servants. We said we would not hire any more civil servants. We feel that half a million is enough.
I listened to the adjournment debate here last week. Two members of the Liberal party, the hon. member for Ottawa-Vanier (Mr. Gauthier) and the hon. member for Ottawa West (Mr. Francis), were pleading with the government not to fire any civil servants. It is the Liberals who will be firing civil servants, not us. We have said we would not hire any more.
The parliamentary secretary discussed whether we supported social legislation in the last parliament. We certainly did support social legislation. We had to support social legislation in the last parliament because of double digit inflation. That was what the last election was about. Our incomes and prices policy was designed to assist the five million people who were below the poverty line and who needed assistance. It was the Conservative party which showed leadership in the last federal election in dealing with the underprivileged and with the need for proper legislation to help people.
I listened to the comments of the hon. member for Winnipeg North Centre (Mr. Knowles), who said that the best parliament we have ever had in this country was the last parliament. He spoke of all the great legislation which was passed. I found his comments very strange, because it was an NDP motion of non-confidence which brought the government down. That motion was not presented by us. If the last parliament was so wonderful and if the legislation was so great, why on earth did the NDP present a motion of non-confidence to bring the government down?
The parliamentary secretary said that for the last number of years the federal government has been Liberal. That is quite true. The Canadian people have been very generous and tolerant with this government, but that is coming to an end. The by-elections proved that. The parliamentary secretary has much praise for this government. I am sure he must have

campaigned in Toronto. I am sure he must have gone from door to door praising this government. If he did, I wonder why the Liberals did not sweep Toronto.
The parliamentary secretary spoke about how great things are in this country. Unemployment costs us $8 billion a year. Over $4 billion is spent on the unemployment insurance plan and $2 billion on welfare, and $2 billion in taxes is lost. The parliamentary secretary says he is proud of that. He says that that is just great, and that it is terrible we should mention it.
If the rules had never been changed, we would not need this borrowing authority bill. Since 1963 parliament has not had effective control of public expenditures. The Auditor General has said that the Liberal government has lost control or is close to losing effective control of the public purse. In a subsequent report he stated that he felt very strongly about the fact-


The Acting Speaker (Mr. Turner):: Order, please.


A. Daniel McKenzie: Mr. Speaker, may I call it five o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Turner):: 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 Egmont (Mr. MacDonald)-Regional Economic Expansion-Funding of land registration and information service; the hon. member for South Western Nova (Miss Campbell)-Fisheries-Depletion of inshore lobster fishery; the hon. member for Nickel Belt (Mr. Rodriguez)- Public works-Construction of taxation centre at Sudbury, Ont.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, public bills, private bills, notices of motions.


PRIVATE MEMBERS' PUBLIC BILLS
Mr. Eldon M. Woolliams (Calgary North) moved: that Bill C-202, to amend the Criminal Law Amendment Act (No. 2),
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1976, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, before discussing the details of this bill I should say that this bill relates to preferring indictments respecting retroactive and retrospective legislation. This is a very technical matter. As hon. members know, I usually speak with just a few notes, but because I am limited to only 20 minutes I will speak from a prepared text.
Private member's Bill C-202 would amend the transitional sections of the Criminal Code approved by parliament at the time the death penalty was abolished for all offences under the Criminal Code, particularly treason, piracy and murder. The abolition of the death penalty by the present government was proclaimed on July 16, 1976. In this debate I wish to deal with the question of murder alone.
Prior to July 16, 1976, there were a number of murder cases in which no charges had been laid, or, if a charge had been laid, the process of law had not been completed when the new bill was proclaimed. The rule that was followed was that if the alleged crime had been committed and the process of law commenced prior to July 16, 1976, the charge was continued and the trial proceeded under the former law, except with regard to the penalty, when the charge was either capital or non-capital murder.
Prior to the 1976 law, murder was classified-I want to emphasize the word "classified", instead of defined-as capital and non-capital murder. Conviction of capital murder called for the death penalty, as you will recall, Mr. Speaker, and all murder that was not capital murder was classified as non-capital murder under the Code and the penalty called for imprisonment, meaning 21 years. Under the penal rules, most people, depending on the facts of the case and the character of the accused who was convicted, could make an application for parole to the parole board within the time frame.
This bill deals only with persons who, prior to the abolition of July, 1976, were convicted of non-capital murder and appealed their conviction to the authorized provincial appeal board and the said appeal tribunal quashed the conviction and ordered a new trial. That was after July 16, 1976. Before 1976, that person, under the ordinary rules of jurisprudence would be retried on the charge of capital murder or a lesser inclusive charge of manslaughter, or some such charge.
The section of the code I am proposing to amend is known as the transitional section dealing with pending cases, in other words, the transitional period from the time the murder was defined as capital murder and non-capital murder until the time when it was redefined or reclassified as first and second degree murder. The only change that was made at that time was the nature of the penalty. The section to which I refer, and which has caused great embarrassment to people whom I have already mentioned and to the courts, reads as follows:
Where proceedings in respect of any offence of murder-
Legal Proceedings
I have left out the other two.
-whether punishable by death or not, were commenced before the coming into force of this act, and a new trial of a person for the offence has been ordered and the new trial is commenced after coming into force of this act, the new trial shall be commenced by the preferring of a new indictment before the court before which the accused is to be tried, and thereafter the offence shall be dealt with, inquired into, tried and determined, and any punishment in respect of the offence shall be imposed as if it had been committed after the coming into force of this act.
What it says, in brief, is that if you were convicted of non-capital murder and you went to the court of appeal-such as in the three cases of which I know, one in Ontario and two in Alberta, and there may be others-and your conviction was quashed because you were wrongfully convicted and a new trial was ordered, the Crown, that is the attorney general in the province, may prefer a new indictment. Under the old law, in the case of non-capital murder, if a person is convicted, he received a sentence of life imprisonment or 21 years with the right to parole. But if he was found guilty of capital murder, he was sentenced to the death penalty. What they have done now is not to prefer a charge of second degree murder, which is similar to non-capital murder-I will go into that in a moment-but to up it to first degree murder.
In the three known cases-I will not name the accused because they are still before the court, but let us call them Mr. X, Mr. Y, and Mr. Z, one of which was tried in Ontario and two in Alberta-following a successful appeal by the accused, the charge was upped from non-capital murder to first degree murder, which would be like changing it from non-capital murder to capital murder. Therein lies the injustice.
Let me explain that briefly. Because the accused exercised a right in law to appeal his case, upping the charge is an abuse of the due process of law, because the Crown upped the charge of non-capital murder, by preferring an indictment without the right to a preliminary hearing, to first degree murder which, under the former law, is classified as capital murder and calls for the death penalty.
If this is the law of Canada, it can still reach back to a person who has successfully appealed and charge that person with a new offence calling for a greater penalty. As I said, murder was never redefined in the Criminal Code. It was merely reclassified for the sole purpose of changing the punishment.
My amendment would prevent this abuse of the due process of law by preferring an indictment of first degree murder only if the new trial ordered by an appeal court was from a conviction of capital murder, or of lesser offences, or in the case of a new trial ordered for an offence of non-capital murder to a new indictment no greater than second degree murder, and a lesser offence, if the Crown saw fit, as it has in some cases.
Why do I suggest this? Section 27(2) is retroactive and retrospective legislation. It is against all the principles of justice known to mankind and not in accordance with the principles of British justice. I have found in research that

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Legal Proceedings
Henry of Bracton, under the rule of Henry III between the years 1222 to 1272, said the following in Latin:
Omnis nova constitutio formam futuris imponere debet, non praeteritis.
It means that every statute ought to prescribe a form to the future, not to the past. This principle dates back to the time of Cicero. My pronunciation of the name might be questioned, as it seems to be, but I pronounce it Cicero-with a hard C.


Mr. Ellis:: Only in Calgary is it pronounced that way.


Eldon Mattison Woolliams: If you had gone to a Latin school, you would have known the correct pronunciation is Cicero-with a hard C. My friend from the province of Ontario may pronounce that name differently, but I will not get into an argument about that. That was the way they pronounced it in Rome.
Section 27(2) makes a sham out of every successful appeal in that under that section the freedom of the accused is jeopardized for a longer term. Mr. Justice Brooks, in a dissenting judgment of the court, put it succinctly in the recent case of Regina v. Pineault 1977, 32 c.c.c., second edition, Appeal Court of Ontario, when the appeal court considered an application under section 613(8) of the Code, which reads as follows:
Where a court of appeal exercises any of the powers conferred by subsection (2), (4), (6) or (7),-
Such as directing a new trial and quashing the conviction, the court may also make an order in addition to what justice requires. In other words, it was argued by Mr. Greenspan in the Court of Appeal in Ontario, and properly so, that the court could have ordered that the accused be charged with the crime of second degree murder. This is what he said:
Having regard to the whole of section 27 of the act, it seems clear that parliament set a cut-off date. It said that after the coming into force of the act all charges of murder would proceed as murder in the First degree or murder in the second degree and an accused not yet tried and one for whom a new trial had been ordered by an appellate court would accordingly be similarly treated. To this extent parliament has declared what is fair and just. However, the important distinction (and really it is a safeguard) is that where a new trial has been ordered the appellate court was under a duty when directing the new trial to make an order that justice requires. It is the presence of this obligation that is perhaps an answer to Mr. Greenspan's submission that this man's successful exercise of his right of appeal from his conviction for non-capital murder is no more than a sham.
In other words, the fact that he was successful in his appeal makes it a sham, because the charge is moved up from non-capital murder to first degree murder where he would be subject to a penalty of 25 years without the right of parole, unless he made an application to the chief justice after 15 years.
In my opinion section 27(2) is ultra vires or inoperative in view of the Bill of Rights. The Bill of Rights provides that every law of Canada enacted before or after the coming into force of the Bill of Rights, unless parliament makes an express declaration to the contrary, is to be so construed and applied as not to abrogate, abridge or infringe or to authorize the

abrogation, abridgement or infringement of any right so recognized and declared.
At committee stage I examined this and asked questions. There was no express declaration by parliament as to section 27(2) to create a new classification of murder in reference to an alleged crime committed prior to July 16, 1976 and tried under the former classification of murder. In other words, to make it retroactive legislation there was no express declaration that parliament could do that, and if it did not make that declaration, it would be inoperative. This is retroactive legislation of the rankest, most oppressive and tyrannical form.
I should like to refer to section 2 of the Bill of Rights which reads as follows:
Every law of Canada shall, unless it is expressly declared by an act of the parliament that it shall operate notwithstanding the Canadian Bill of Rights, be so construed and applied as not to abrogate, abridge or infringe or to authorize the abrogation, abridgement or infringement of any of the rights or freedoms herein recognized and declared, and in particular, no law of Canada shall be construed or applied so as to
(e)	deprive a person of the right to a fair hearing in accordance with the principles of fundamental justice for the determination of his rights and obligations.
How can one say that these three persons, and perhaps others, will receive fair trials under the circumstances? Section 27(2) abridges the Bill of Rights, as it denies a fair and just hearing, and therefore is inoperative.
I do not have to refer to the Drybones case where an Indian off a reservation was charged as being drunk because he was an Indian off a reservation. The Supreme Court of Canada indicated that that discriminated against race, and therefore, that section of the Indian Act was inoperative and ultra vires.
The Interpretation Act of Canada reads in part as follows:
Every enactment shall be deemed remedial, and shall be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects.
The courts of appeal of two provinces have already ruled that this is retroactive legislation but parliament must have intended it, even though there have been a few dissenting judges. Section 35(b) reads as follows:
Where an enactment is repealed in whole or in part, the repeal does not (b) affect the previous operation of the enactment so repealed or anything duly done or suffered thereunder.
Thus, it runs in full face of the Interpretation Act. Section 36 reads as follows:
Where an enactment (in this section called the "former enactment") is repealed and another enactment (in this section called the "new enactment") is substituted therefor,
(d) the procedure established by the new enactment shall be followed as far as it can be adapted thereto in the recovery or enforcement of penalties and forfeitures incurred, and in the enforcement of rights existing or accruing under the former enactment or in a proceeding in relation to matters that have happened before the repeal;
(f)	except to the extent the provisions of the new enactment are not in substance the same as those of the former enactment, the new enactment shall not be held to operate as new law, but shall be construed and have effect as a consolidation and as declaratory of the law as contained in the former enactment.
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To charge a person with first degree murder after a successful appeal from a conviction of non-capital murder changes the law as known at the time of the trial. Capital murder as first degree murder in 1966 was described as planned and deliberate, identical to the wording in 1976 of section 214(2) of the Criminal Code, and any other murder was non-capital which today would be known as second degree murder. One asks, "So what, the death penalty is abolished?"
The difference in penalty between first degree and second degree murder is substantial. As I said at the beginning, the government is merely classifying murder to change the penalty. Second degree murder calls for 21 years of imprisonment with the right to make an application to the Parole Board in ten years, depending on character, facts, etc. First degree murder is 25 years of imprisonment without the right of parole. One might make an application to the chief justice after 15 years.
One might ask how this mistake occurred. Well, it occurred. I should like to refer to a rather interesting quote from the book entitled "Preparation of Legislation in Canada" by Mr. E. A. Driedger, Q.C. at page 293, which reads as follows:
What is a draftsman or a draftperson's job?
-His function is to prepare the legislation desired by someone else; and it follows that there must be a transfer of ideas to the draftsman. He must understand precisely what the new law is to be. He may draft a perfectly plain amendment but if that amendment is not the desired amendment he has not done his work properly-
Is that not quite a statement coming from a former deputy minister of justice who is now director of legislation?
Over 100 years ago Bentham talked about legislation like this which was retroactive and reached back into the past. For example, as far as I know today, it is legal for me to make this speech in the House of Commons. If parliament, in its insane sense, passed an act tomorrow which indicated that what I did today was illegal, it would be called retroactive legislation. Surely Canadians are supposed to know the law as they run, walk or are involved in their business and social arrangements with their families and other institutions. Bentham said that such legislation is ambiguous, imperfect, redundant, long-winded, entangled and, above all, naked and without any boundaries. That is exactly what we are faced with here.
As I have said over and over again in the House of Commons, and I will never tire of saying it as long as I am here, let us have a new Criminal Code of Canada rather than one made up of amendments or a band-aid deal which causes confusion to jurists and all Canadians.
I ask the House to consider this bill in light of the fact that it affects the freedom of Canadians who have the right to a fair trial and the right to appeal, and when they win their appeals they are penalized for winning them. That is an abuse of the process of law in the worst form.


Some hon. Members:: Hear, hear!


Mr. Roger Young (Parliamentary Secretary to Solicitor General):: Mr. Speaker, I should like to make a few comments on Bill C-202 which was presented to the House by the hon.
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member for Calgary North (Mr. Woolliams). Of necessity he requested permission to speak from some extensive notes. I can appreciate why, because the matter is technical in nature. I hope the House will allow me the same courtesy during the course of my reply.
I should like to say at the outset that it is a pleasure to consider measures proposed by the hon. member for Calgary North because he has a reputation as a lawyer and a parliamentarian which I think elicits our respect and our very close attention.
We are considering today a measure which would draw to the attention of this House a specific anomaly which he perceives in respect of the transitional aspects of the Criminal Law Amendment (Capital Punishment) Act (No. 2) 1976, passed by this House on July 14, 1976, and proclaimed as law on July 26 of that year. On behalf of the Solicitor General (Mr. Blais) I would like to congratulate the hon. member for his suggestion, and for the good intentions which so evidently have gone into drawing up the bill before us.
If I understand it correctly, the bill we are considering would amend the transitional provisions of the Criminal Law Amendment Act (No. 2) 1976 in respect of persons who were charged with murder before this act came into effect but who were ordered to stand trial again as a result of a higher court decision. In these cases, the new trial is to be commenced by the preferring of a new indictment, with such new indictment being drawn up in terms of the new act. The effect of this would be that persons originally tried for capital murder would be tried for first degree murder, and that persons originally tried for non-capital murder would be tried either for first degree or second degree murder, depending on whether the facts were such as to support a charge of first degree murder on the grounds that there was planning and deliberation involved, that the murder was a "contract" killing, or that the offence was committed in the course of committing or attempting to commit aircraft hijacking, kidnapping and forcible confinement, rape or attempted rape, or indecent assault on a female or a male.
These latter elements of first degree murder previously would have resulted in a charge of non-capital murder, and the difference in penalty for first degree murder and non-capital murder is, I take it, the point which concerns the hon. member. Under the previous legislation, a person found guilty of noncapital murder was liable to life imprisonment with parole eligibility not available for at least ten, and as many as 20 years, depending on the order of the trial judge having considered any advice the jury may have had to offer. Under the Criminal Law Amendment Act (No. 2) 1976, a person found guilty of first degree murder is now liable to life imprisonment with Parole eligibility not available for 25 years, with that eligibility date being reviewable after 15 years.


Eldon Mattison Woolliams: By the Chief Justice.

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Roger Carl Young: The hon. member argues that a hardship is worked on those individuals-those very few individuals, I might point out-who fall into the category of having originally been convicted of non-capital murder, but have been ordered to stand trial again, this time for first degree murder.
I would like to assure the hon. member that I think his argument is an important one, and it is one which deserves the closest consideration. There are, however, some points which I believe merit examination in the course of considering the bill we have before us, and I would like to turn to some of those points now.
In the short time I had available to review the hon. member's proposal, I found two reported cases bearing on the point at issue. I am not certain whether there are any further appeals outstanding in either of those cases, so will necessarily restrict my remarks somewhat, as I noted the hon. member did too.
In a general sense it seems to me that neither case offers much support for the hon. member's argument that the transitional aspects of the Criminal Law Amendment Act (No. 2) violate the Bill of Rights, or are subject to the interpretational principles which he cites in the explanatory notes to his bill. Again, I would like to make it clear that these are questions which occur to me from a brief perusal of the hon. member's proposal, and I offer them as lines of argument which I think merit further examination in the context of further examination that should be given the proposal. Having said that, let me express the concern I have with the hon. member's point. In arguing that the section in question violates canons of interpretation, I am not sure whether the hon. member had an opportunity to reflect on the finding of the Alberta Supreme Court, Appellate Division, in the case of Regina v. Budic (No. 2).


Eldon Mattison Woolliams: Mr. Speaker, I rise on a point of order, and I hope you do not deduct the time I take from the time allotted the hon. member. That case has been quoted by me in a court room. I understand the case and it does not apply to hijacking, and does not apply to the other offences the hon. member has mentioned. I know the facts of the case. Under the normal conditions the person would have been charged with non-capital murder, as there was nothing planned or deliberate. In fact the second trial ended up in the court of appeal, from a second appeal, and he was found not guilty because of insanity. In the Regina v. Pineault case the attorney general of Ontario repented and preferred an indictment of manslaughter.


Roger Carl Young: I thank the hon. member for that interjection, Mr. Speaker. He undoubtedly does know about the case. All I was going to say, very briefly, in reference to that particular case, was that in looking at the comments of Mr. Justice Clement, he argued that the transitional section of the Criminal Law Amendment Act (No. 2) which is the subject of the hon. member's amendment "leaves no room for argument, or the application of canons of construction. The language is plain and imperative." Mr. Justice Morrow, in the same case, also found that it was "clear to me that the legislation has

expressed an intent to have the newly enacted provisions take effective retroactively".
The hon. member for Calgary North referred to the Pineault case before the Ontario Court of Appeal. That case considered the provisions we are discussing this afternoon.
Mr. Justice Arnup also referred to the clarity of parliament's statement in respect of the preferring of a new indictment and thus, I would argue, called into question the basis for the hon. member's argument that the canons of construction are required to be brought into effect to the extent to which a clarifying amendment is required.
I must say I am even less certain about the argument made on Bill of Rights grounds by the hon. member. I do not intend to go into a great deal of detail on that argument. I think one of my colleagues may wish to make some comments in that regard a little later on. I would only suggest that we must take into account cases other than Drybones in assessing the impact of section 2 of the Bill of Rights on any given provision.
All I am saying here is that the provisions suggested by the hon. member affect a tiny number of persons, and it is not at all clear that an amendment such as that he proposes is required in practice. I have raised some arguments which, at the very least, leave some unresolved doubt in my mind as to the legal basis for the argument advanced by the hon. member, and attempted to tie them in, in a general way, with the two reported cases on the issue of which I am aware. I think we should leave it at that for the time being, and 1 would like to suggest that further consideration is merited in the areas I have mentioned. Also, I am sure no hon. member would wish to make specific comments which might have prejudicial effects on individual cases which might yet be heard, and I repeat the point that I am not aware of the current standing of the two cases to which I made brief reference.
In examining the proposal put forward by the hon. member, I think we must look at the assumptions which lie behind it in order to see if it can be supported as it stands or if it requires some further thought and study.
I have made very brief reference to the Bill of Rights argument which was advanced in the explanatory notes, and to the argument put forward by the hon. member involving canons of construction. I would like further to mention two other points which I believe also merit consideration. These involve the hon. member's interpretation of the intent of parliament in passing the Criminal Law Amendment Act (No. 2) 1976, and some of the remedies which may be available to individuals who believe themselves to have been unfairly affected-remedies not referred to by the hon. member.
First with respect to the intent of parliament, the hon. member in his explanatory notes appears to be taking the position-I am sure he will correct me if I am not interpreting him accurately-that parliament intended to ameliorate penalties under the terms of the Criminal Law Amendment Act (No. 2), either throughout that act, or in the transitional provisions, or both. To be sure, capital punishment was abol-
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ished under the terms of the act. But I would question the interpretation that the terms of the act were designed to be purely ameliorative, aimed at lessening penalties throughout.
I am sure hon. members will recall the fact that several speakers in the capital punishment debate advanced the position that the sanctions for murder were too harsh; some said they were harsher than capital punishment itself. I do not comment on the merits of those arguments but simply note that they were made during the course of debate.
I would also point out that the solicitor general of the day, commenting on those arguments, made the point that the "Canadian public are concerned about crime, and have a right to expect protection." He said that "murder is a horrible and heinous crime and must be punished severely if we are adequately to express society's outrage against the murderers."
Indeed, the entire peace and security program, of which the Criminal Law Amendment Act (No. 2) was only a part, was aimed not at lessening penalties but at affording to the Canadian public a greater degree of protection against violent crime. All of the measures-legislative and administrative alike-which were included in that package were designed with that one aim in mind: giving effect to realistic and effective measures of protection.
The package contained a range of measures-from dangerous offender legislation, to gun control, to restrictions on the release of offenders, to crime prevention measures-and while each of us may have questioned particular elements of the package, the point I wish to stress is that the over-all intent of the package was to increase effective protection, not to lessen penalties. It is in this context that I would question the hon. member's interpretation of the intent of parliament in passing the section which we are considering today. And in challenging that interpretation, I believe there can be some question raised as to the underlying rationale of the proposal put forward in Bill C-202. Again, I raise this argument not to refute the hon. member but simply to suggest that a great deal of careful consideration should be given to it before we move any further with it.
The second point I would wish to bring to the attention of hon. members involves remedies. The hon. member for Calgary North, based on the interpretation he has given to the intent of parliament and to the legal merits of the case, is suggesting to us that an amendment is required to the transitional provisions of the act. As I have said, the arguments made require careful consideration, and I would welcome discussion of some of the aspects of the argument I have raised already in the course of that consideration.
It may be that we will conclude that the hon. member's amendment, or one similar to it, would be a useful addition to the statute law-I have been very careful not to prejudge that. But in considering the issue, I would also like to see consideration given to certain other recourses which are available if we accept the arguments advanced by the hon. member with respect to the merits of the case. As I have said, an amendment is one possible course of action. A court challenge, brought on grounds similar to those raised by the hon.
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member, is another possible course of action, and I for one would not feel comfortable placing myself in the position of the courts with respect to the issues at hand.
Let us look at other existing courses of action which are available. Let us, for the sake of this discussion, accept the hon. member's point of view that there is an injustice involved-or that there may be an injustice involved-under the section under consideration. As I say, I am not prepared to accept that argument without first having given the matter a great deal of thought, but for the sake of this discussion let us proceed on that basis.
If therefore, an individual, found guilty of first degree murder having first been found guilty of non-capital murder, is sentenced to life imprisonment without eligibility for parole until 25 years, I think we should not overlook the fact that that individual is also eligible to have the parole eligibility date reviewed after 15 years under the terms of the Criminal Law Amendment Act (No. 2).
Under section 672 of the Criminal Code, an application may be made to the appropriate chief justice in the province or territory for a reduction in the number of years of imprisonment without eligibility for parole. Such an application is to be heard by a jury specially empanelled for the purpose, and the jury may advance the parole eligibility date having regard to the character of the applicant, his conduct while serving his sentence, the nature of the offence for which he was convicted and such other matters as the judge deems relevant in the circumstances. Additionally, I would draw attention to the fact that there is the royal prerogative of mercy which can be brought to bear with respect to a sentence being served.
Arguably, then, if there are cases of injustice or hardships being worked in individual instances, there are available remedies other than those put forward by the hon. member in his bill. Again, I would like to examine these possibilities in considering whether the proposal made by the hon. member is required, whether a similar proposal is required, or whether there are already sufficient remedies available to meet any problems that might conceivably arise.
In conclusion, having discussed several points which occurred to me upon a quick reading of the hon. member's proposal, I want to return to the point I made at the outset of my remarks. I think the bill we are considering today is an important and worthwhile contribution to the continuing debate which is aimed at improving the criminal law of Canada. The hon. member for Calgary North, as was to be expected, has given us much food for thought and is to be congratulated for his proposal, for the thought, research and excellent motivation which went into its preparation.
In raising some questions which I would like to see given further consideration, I would not wish to leave the impression that I am rejecting the hon. member's proposal. Indeed, I cannot see how such an impression can be left. All I am doing, Mr. Speaker, is raising a number of points which I think merit further, in depth consideration. I would welcome interventions during today's debate, as I would welcome them at any time. I have raised certain points because I am not completely certain
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in my own mind as to the complete ramifications of the proposal advanced today. Perhaps other hon. members can offer additional insights and material on the important question we are examining.
One thing, however, is clear to me. It is that the hon. member for Calgary North deserves the thanks and congratulations of the House for his excellent intervention. You may be assured, Mr. Speaker, that the Solicitor General-and I can say this on his behalf as well as my own in my capacity as his parliamentary secretary-intend to examine the issues he raises with careful attention.


Stuart Malcolm Leggatt: Mr. Speaker, I should like to participate briefly in this debate and to congratulate the hon. member for Calgary North (Mr. Wool-liams) for a well reasoned and effective contribution to the criminal law of Canada. I listened with some impatience to my hon. friend the Parliamentary Secretary to the Solicitor General (Mr. Young), however. One of the things he said was that there are really only three people involved in this particular situation. The	day	that we in this House cannot take the timeto make sure	that	the law is applied	in accordance with	the
well tried principles of justice and common law is the day we should not waste our time here. There are three people involved and those people deserve to have the law applied in accordance with the proper principles.
The Criminal Code, which we amended in the unfortunate package that	we bought a few years	ago in this House,	hasresulted in a	very	severe injustice. It	is all very well for	the
parliamentary secretary to say we are taking this question under study. While we are doing that people are rotting in jail. It is nice and easy for us to sit in our comfortable offices studying matters, but people are sitting in jail as a direct result of this anachronism, this violation of the bill of rights.
I also congratulate the hon. member for Calgary North for raising in this House again a most important principle basically, the supremacy of parliament. When parliament passed a federal bill of rights, it was not a direction to the courts to do everything in their power they could to avoid the consequences of that bill of rights. Many of us who have had some experience in the law are continually disappointed by the judges of the Supreme Court of Canada when they come up against the bill of rights and try to apply it to specific statute law.
There has been a quick reference made to the Drybones case. I recall very well the Lavelle Bedard case in which a native lady was denied her rights on the sole ground she was a female. The Canadian Bill of Rights purported to protect that situation. She received no protection from the courts of the land.
The principle which the hon. member for Calgary North is attempting to apply to the Criminal Code and, which is so fundamental and so vital is this: When a person commits an offence the law that applies on the date of that offence is the law. Only totalitarian regimes attempt to correct and change

the law and then apply it retroactively; only totalitarian regimes do that, not decent, civilized societies. Surely this is one of the things that we have great respect for in this country. We do not attempt to create offences that occurred in the past by changing the law in an umbrella or catch-all fashion, as we unfortunately did in this place when the insertion was made of section 27(2) in the Canadian Criminal Code.
That section which went into the code at that time, the hon. member for Calgary North and I had differences on. It concerned the ultimate penalty with regard to murder. But we are in some agreement in terms of what the alternatives have been. The 25-year sentence, for example, now that we examine it in operation, has got to change. We are placing people in prisons with 25-year sentences with no option whatsoever to see the light of day. They have three alternatives. The first is to commit suicide; many do or have tried to. The second is to attempt to escape and perhaps inflict harm upon the people who are guarding them within the prison system. Lastly, prisoners can serve their sentence and thereby suffer the kind of brain damage they are bound to have developed by the time of their release after 25 years. Many of these people are living in appalling conditions in solitary confinement.
The hon. member for Calgary North and I will probably never agree on the ultimate penalty, but certainly the package that was bought at that time was a bad bargain. It was a bad bargain for the criminal justice system, and it was a bad bargain for providing any kind of safety measure to the public. The 25-year sentence is a horrendous change to our criminal law. It has disrupted the prison system of Canada. Parliamentarians will have seriously to look once more at the sentencing procedure under the murder provisions of the Criminal Code.
I congratulate the hon. member for raising this issue; it is a fundamental and important one. It may also serve to sensitize us to the Canadian Bill of Rights and to possibly having a look at the way in which we can see that the courts take that law seriously, instead of seeing them continually attempt to interpret their way around the plain meaning of the bill, which the right hon. member for Prince Albert (Mr. Diefenbaker) originally brought forward in this House.
I hope my friend the parliamentary secretary will look seriously at this change. I hope that it will not be a case of saying, "We will take it back to our officials and we will see you next year." This is a matter which the Standing Committee on Justice and Legal Affairs would wish to speed through quite quickly in order to see this obvious injustice in the code removed.


Mr. Gilles Marceau (Lapointe):: Mr. Speaker, I have always had much esteem and consideration for my colleague from Calgary North (Mr. Woolliams) and I am always quite pleased to note that he has the necessary readiness of mind and courage to offer hon. members ideas which deserve to be taken into account. Mr. Speaker, I think that in such discussions we
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must try to avoid any partisanship and stick to the basic issue, to wit, the freedoms that we want to uphold for all individuals, even those whom society has branded as criminals and who are often less guilty than those enjoying freedom.
Mr. Speaker, I think that the bill introduced by my colleague from Calgary North deserves not only thorough but also speedy consideration. The rights involved in such an amendment concern the most basic rights of individuals- freedom and justice. Looking over my colleague's bill and the clause to which he refers, I note that the sentence at issue is the last one which reads as follows:
-the accused is to be tried ... as if... the offence ... had been committed after the coming into force of this act.
After having acquainted myself with the original section, I hesitate to reach the same conclusion as my hon. colleague. Mr. Speaker, I am quite willing to recognize that the present section provides for a more severe penalty, but not that the new section allows for the possibility of a more serious offence or indictment than that the Crown could have preferred before implementation of this bill. Obviously, the severity of a penalty can lend itself to many interpretations and discussions. Is the death penalty more severe than 25 years in prison? I doubt that anyone can argue clearly, conclusively which of the two is most severe, most inhuman. I doubt that it is possible to do so because, since the new act was passed, according to the reactions of prisoners, my hon. friend from Westminster mentioned it in his speech-personally I feel that in some regards a 25-year term in prison is far more severe penalty than capital punishment-as I was saying, prisoners with whom we have had occasion to discuss the matter often tell us: "I would have preferred the noose to 25 years in prison." So I think that one must not go too far in saying that the present legislation is less or more harsh than the preceeding one. It is a matter of interpretation, but one thing is certain, neither capital punishment nor 25 years' imprisonment are going to solve our social problems and put an end to the violence which exists in our society, because I do not think that by increasing violence, in the form of capital punishment or 25 years' imprisonment, we are going to improve our world. This is of course my personal opinion, but I am sure that it is shared by members from both sides of the House. As law makers, we are often forced to pass extremely harsh laws, in the hope of solving problems, but we are not, in fact, going to the root of the problem, which is to be found in discussion, dialogue, brotherhood, friendship and co-operation. And this is often forgotten in many sectors.
Mr. Speaker, my colleague from Calgary North referred to the human rights bill and said that the bill that was passed was in fact a violation of the Bill of Rights. That might true because I think he nearly convinced me with his usual vitality and persuasion that there was an anomaly which deserves not only to be considered by civil servants but which calls for a quick and specific response. And if it was established that a serious injustice was committed, as my colleagues mentioned, I
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think there should be no hesitation or delay in introducing before the House an amendment which should be approved by all parties as this affects the basic rights of individuals.
Generally speaking, Mr. Speaker, the present Bill of Human Rights certainly does not provide adequate protection and if the bill introduced by my friend and colleague could convince governments, parliamentarians and people in general that we have to pass quickly a constitution in which those basic rights would be recognized and preserved without parliamentarians being able through subsequent legislation or governments to change those basic rights which are above political parties, provinces, countries and which are in fact the basic foundation of our democratic society, that would be fine.
Mr. Speaker, I think that my friend and colleague will surely get positive results with the bill he introduced. And even though I am not prepared to follow him immediately in the course he chose, namely that there is a contradiction between the law as it stands now and the one he would want to see in place, in view of the principle involved, I am prepared to lend my co-operation so a serious and quick examination can be made, so that if it comes out that my friend and colleague is right we can leave aside the fact that he comes from a party of the opposition and we can consider seriously an amendment which could be brought in after serious consideration.
I congratulate my colleague, and I see that once more we have been able to have a discussion above political partisanship, a friendly discussion with both my colleague from Calgary North (Mr. Woolliams) and my colleague from New Westminster (Mr. Leggatt) with whom we sit on the Standing Committee on Justice and Legal Affairs which is recognized, I must admit, as the best and most productive committee of the House under the chairmanship of the hon. member for Windsor-Walkerville (Mr. MacGuigan) who is sitting beside me.


Mr. Jim Fleming (York West):: Mr. Speaker, I enter this debate with very few minutes remaining. This is probably to my benefit because I have a great deal of trepidation in speaking since I am the only non-lawyer so far to speak on this subject in this debate. I see my good friend from Vancouver-Kingsway (Mrs. Holt) is also interested in this bill.
First, I want to pay the obeisance that others have to the hon. member for Calgary North (Mr. Woolliams), with all sincerity to his extreme wisdom and experience in the law and his high reputation as a trial lawyer. Even if I am standing as a government supporter close to the end of the private members' hour, if does not change for a moment my absolute support for the principle he puts forward. I put on record the fact that I think the Minister of Justice (Mr. Lang) has no other choice but to go back and look at the situation as drawn out and pointed out by the hon. member for Calgary North.
I want to make a couple of very quick points in defence of the parliamentary secretary, who is trying to carry out his job very ably in presenting some concerns about the wording of Bill C-202. As I understood the hon. member for New West-
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minster (Mr. Leggatt), and I will try to quote him correctly, he said that people are sitting in jail at this moment as a result of this anachronism. Unless he is saying that they are sitting in jail pending their trial because of these complications, in fact those in jail as a result of convictions rendered would be there in any case whether convicted under the old law or under the new one, because 10 years versus 15 minimum, 20 years versus 25 years maximum, would mean that they would still be there now, even though several years have passed after passage of the new bill.


Stuart Malcolm Leggatt: Would be.


James Sydney Clark Fleming: Yes, in time to come. I argue, as I did during the capital punishment debate as a very much committed abolitionist, that one of my great hopes when we introduced and then passed as a parliament that very tough legislation was that if you had to judge that legislation alongside the legislation preceding it, which provided that a few people could be hanged by the state, then compared generally with what the new legislation provides, it was much tougher, much more severe, and I would even admit regressive in the long run. I think I expressed in debate at that time my hope that we can show in time that we must reduce the length of that penalty yet still have an effective deterrent. I hope this will be done before 15, 20 or 25 years pass.
The other point I want to make is in defence of my colleague. He mentioned that only three people are involved. I do not believe that the parliamentary secretary any more than other members who have contributed to this debate for a moment minimizes one person's rights before the law and his right to absolute justice. Any law which would in the process of carrying out justice create injustice for one, two or 200 is a wrong law and should be changed.
Finally, I would like to add my voice, and I am sure that of all hon. members here present, in support. I see our very distinguished chairman of the justice committee here. 1 heard his applause in support of the hon. member for Calgary North. I think there is general sympathy that the Minister of Justice must look at this problem. As easy as it would be for us to take the soft course and to say we are talking about potential murderers, alleged murderers, people who defy our society and the highest principles of it, those principles are not worth a damn if we cannot give an equal measure of the law to all people who come up against it in our society.


Simma Holt: Mr. Speaker, I would very much like to congratulate the hon. member for Calgary North (Mr. Woolliams). I am an admirer of his depth of perception and the deep sense of justice he has-


The Acting Speaker (Mr. Turner):: Order, please. The hour provided for the consideration of private members' business having expired, I do now leave the chair until eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of Bill C-7, to provide supplementary borrowing authority for the fiscal year 1978-79 and to amend the Standing Committee on Finance, Trade and Economic Affairs, and the motion of Mr. Stevens.
A. Daniel McKenzie: Mr. Speaker, before five o'clock I was explaining how uncontrolled government spending, uncontrolled growth of government departments and uncontrolled borrowing started in 1963 under the Liberal government. I want to put on record the statement made by the Auditor General:
We feel very strongly about the fact that unless the systems are corrected the day may well come when I cannot give a clear certificate on the accounts of Canada.
Remember, all this happened during the term of office of the present government. The Liberal government has become a spending machine without a control centre. This has been verified by recent reports of the Auditor General. That is why we cannot rubber stamp authority for these loans and this latest request for additional borrowing of $7 billion.
I wish to explain to the House how this situation arose a number of years ago. The erosion of parliamentary control over government spending has its genesis in certain parliamentary rule changes instituted in 1969. In the summer of that year the government invoked closure, which, as you know, Mr. Speaker, is the termination of debate, to ram through a rule, Standing Order 75C, permitting a minister to close debate within ten days where there is not agreement between all parties, with a maximum of four days' debate. This was a dictatorial, unilateral action on the part of the government. The rules are the property of parliament as a whole, not just of the government. The government used closure to get a new closure rule.
This rule has effectively prevented parliament from properly scrutinizing government expenditures. Departmental estimates are shuttled off to already overworked committees and then reported back to the House where debate on them is limited, and thus seldom meaningful. As well, the number of votes on estimates has been reduced, further restricting parliamentary debate on government spending.
I could go on about this, particularly the "ramming through" back in 1969. What it means is that there is no itemized accounting of government expenditure today, and

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that is why we are protesting. The first responsibility of an elected official, I do not care at what level, is to see that tax dollars are properly spent, and we do not know whether they are being spent properly because of this rule change which was rammed through by closure.
I will give members a further example. It has to do with the money supply and it all ties up with the bill before us and the reason the government is asking for authority to borrow $7 billion, borrow $10 billion-borrow, borrow, borrow, print, print, print, spend, spend, spend. The money supply, the chief cause of inflation, is constantly being increased. Money should just not be printed but must be related to the gross national product. In the period from October, 1970 to October, 1976 the federal government expanded the country's money supply by 10.2 per cent in contrast to a real growth in the economy of only 31.7 per cent. Inflation increased 55.3 per cent over this period. In the previous six-year period the money supply expanded by 43.2 per cent compared to a real growth in the economy of 34.2 per cent. Inflation totalled a relatively modest 24.1 per cent. The huge amount of financing required by the federal government to finance its deficits was unquestionably one of the main causes of this excessive and inflationary monetary growth.
We are still at it today. I listened to the parliamentary secretary and other members on the government side trying to justify this borrowing. It is such a fraud. Here we are, expanding the department of the Auditor General. He does not know where all the money is going, where all this mad Liberal spending is leading us. We have to appoint a Comptroller General, and he says he is going to need a staff of 300, probably all chartered accountants, and hopes he is not around when this staff of 300 begins to find out where all the money is going. He recently stated that restraint being realized in Ottawa will take a decade to filter down through management. So we come back to that rule change.
We are told that everything is just rosy and sweet and that we should not be saying anything about doom and gloom. We had to appoint a Comptroller General at an initial cost of $6 million to Canadian taxpayers. The Comptroller General says he will need a staff of 300 to find out what on earth this government has been doing over the last 10 or 12 years. One of the frontbenchers of the Liberal party who has been here for years sits there laughing and giggling. This is all a big joke to him.
I would like to list the principal faults of Bill C-7, a bill which is needed because of bad financial management in Canada over the last 15 years. This is the third time that the government has sought to raise borrowing limits for the current fiscal year. First, there was whatever was left from the $9 billion new authority granted by Bill C-ll in December, 1977, which applied to the 1978 and 1979 fiscal years. Then in Bill C-31 the government sought a further $5 billion in borrowing authority in March of 1978. Now Bill C-7 asks for a further $7 billion. This bad planning of debt needs is the same kind of
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bad planning which caused the Minister of Finance (Mr. Chretien) to make three quasi-budget presentations within one year. That is a clear indication that the government really does not know what it is doing.
Federal Figures do not add up. For fiscal years 1978 and 1979 borrowing limits have been raised by $28 billion, including those contained in Bill C-7. However, the sum of actual and forecast cash requirements for the two years totals $20.3 billion. The extra authority is needed, according to the Department of Finance, to allow foreign bond issues and to permit full draw-downs of foreign currency lines of credit. The extra amount is also needed to cover a large Canada Savings Bond refinancing and to provide a reserve for contingencies.
What the department and the minister do not mention is that foreign currency borrowings can be used and are being used to satisfy the domestic cash requirement. Bank of Canada purchases of Canadian dollars in support of our currency are transferred to federal cash balances, thus reducing the need for domestic financing. Both the Minister of Finance and the governor of the Bank of Canada have pointed this out in the past. Previous requests for new borrowing authorities have referred to the amounts required for foreign exchange support, Canada Savings Bond refinancing and reserves for contingencies.
The obvious question is, how many times in one year must Canada Savings Bonds be refinanced-our financial critic, the hon. member for York-Simcoe (Mr. Stevens) covered this very well this afternoon-and how many reserves for contingencies does the government require.
Economic policy has changed significantly since the last borrowing authority was sought. The government has proposed expenditure cutbacks and several reallocations. Parliament has not had the opportunity to examine and debate the new policies. This goes back to 1969 when all the rules were changed. In those days there was full and itemized accounting and documentation of the expenditures of every government department. Parliament could sensibly debate what was being spent. Ministers were on the hot seat. They really had to be on their toes to explain the expenditures of their departments. Now they can bluff their way through.
We have slower economic growth than that forecast. The forecasts of ministers of finance have been wrong so often in the recent past that whatever the Minister of Finance forecasts is suspect. There is certainly much to suspect with regard to Bill C-7. Lower than anticipated economic growth will result in lower revenues, higher deficits and the need for more borrowing.
There is a need for change in economic policy. The Minister of Finance and the President of the Treasury Board (Mr. Andras) in a joint statement on September 8 raised the possibility of a tax cut. Since the Minister of Finance attacks our tax cut proposals on the ground that tax cuts would increase the deficit, tax cuts in the next budget would, by his own analysis, increase borrowing requirements. Conversely, the federal government may at last concede that much of the current federal spending is still excessive. The government may

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propose further cutbacks in areas where there should not be cutbacks.
This is all part of a Liberal plot. Anyone who attacks these "high profile" cuts will be told that they should not oppose cutbacks, but there are many departments and agencies in which cuts could be made. There are about 400 federal government departments and agencies, some of which we have never heard of, which are serving no useful purpose at all. They could be eliminated, but what does the government do? It cuts forestry research expenditures. The forestry research people have not completed all the research that is required. The government is also eliminating weather stations. This is all trickery. That there might be meaningful cutbacks is an unlikely prospect, but cutbacks cannot be ruled out, given the sudden shifts in economic policy this government has been making. Lower expenditures may mean that this borrowing authority is excessive.
While most observers think our currency is undervalued, a further decline in our dollar is a realistic possibility. Further borrowings may be required. If one accepts the minister's claim that foreign currency borrowings require new borrowing authorization, then the present $7 billion authority being sought might be too little.
I would like to talk about the proliferation of public debt. Total borrowing authorities requested for the fiscal years 1978, 1979 and 1980 are $38 billion. That is unbelievable. When this government took over in 1963 total federal government expenditures were only about $6 billion. Now we are talking about $38 billion in borrowing authority. If this authority is fully utilized, the unmatured debt of Canada will be 90 per cent higher in 1980 than it was in 1977. That is unbelievable.
There are parliamentary secretaries and others who stand up in this House and tell us how wonderful things are and that we should not talk about this because it is doom and gloom. All they want us to do is keep rubberstamping bills to allow the government to borrow $7 billion, $10 billion and on and on. Everything is just fine as long as the government can borrow more money. That is the Liberal rationale, and it is totally irresponsible.
The parliamentary secretary says that we will have a difficult job going into the next federal election explaining that it is wrong to keep on borrowing money. I will have no trouble with that, and the Liberal in my riding will lose his deposit. The rate of public debt expansion to which I referred will be unprecedented in peacetime history. Interest costs for servicing the public debt are skyrocketing. Debt charges will be much higher than they have been. The Parliamentary Secretary to the Minister of Finance (Mr. Martin) says we will have a difficult job explaining that in the next federal election. I will have no trouble explaining that. These new borrowing authorities will guarantee that the debt interest spiral will continue. The only way this government wants to govern is by borrowing more money, printing more money and spending more money.
Extensive foreign borrowings are a short-term solution but they create long-term problems. Federal foreign borrowings

undertaken in the last year must be repaid. The interest charges on the debts will add 5 per cent to Canada's interest and dividends trade deficit.
I see, Mr. Speaker, that you are on the edge of your seat, so I will bring my remarks to a close by making it perfectly clear that I will not be voting for this bill or in any way supporting this irresponsible borrowing.


William Gordon Ritchie: Mr. Speaker, I would like to say a few words on this borrowing bill and to reiterate our concern about the difficult situation in which we find ourselves with the ever increasing deficit which we are running. For instance, in the two years from 1966 to 1968, the net financing requirement of the Government of Canada was for $2,578 million; from 1969 to 1971, the financing requirements were for $3,671 million; from 1972 to 1974, the financing requirements were for $3,271 million; and from 1975 to 1977, they were for $14,334 million. The projected figure for 1978-1979 is over $20 billion; that is not taking into account the foreign borrowings with which this bill is dealing.
I think these figures are significant. For instance, in the two years from 1969 to 1971, the deficit amounted to $3,671 million, or an average of $1.8 billion a year. The g.n.p. for this year is projected to be around $260 billion, but in 1971 constant dollars it was only $130 billion. So, in effect, our deficit is around five to six times what it was in 1971, based on the value of the dollar that year.
I think we should also remember how the government, through inflation, has taken a great deal of money from bond holders. It has filched that money from them through the mechanics of inflation. For instance, a $1,000 bond bought in
1971	would only be worth $500 in buying power today, based on the present inflation rate. How long can we continue to be bond holders if we are rooked this way? Taking out a Canada bond is an invitation to certain loss, because not only will the bond purchaser see the value of his bond depreciate by 10 per cent a year, but he will also be taxed on the interest, so that he will not even be able to keep even.
When the Government of Canada, in the two years from
1972	to 1974, had a deficit of $3,271 million, the Bank of Canada purchased $2,172 million, or 66 per cent of that deficit. It meant that the bank just monetized the debt. It did not take the money from the public or out of its savings, but merely printed money to carry us through. What we must keep in mind in discussing this amendment to the bill is: Will the Canada Savings Bonds which are now being sold be taken up? Will we have enough in borrowings to cover the $10 billion to $11 billion necessary for this year, and how much money will the Bank of Canada print? I suspect the amount will be pretty substantial.
It is obvious that the inflationary pressures are continuing. In today's issue of the Globe and Mail, an article in the report on business is entitled "Money growth rate causes concern." It is written by Hugh Anderson who states the following:
November 14, 1978

Increasing concern over the high rate of growth in the money supply in both Canada and the United States is being shown by financial market commentators.
The situation is more clear-cut south of the border, where the picture is not clouded by such temporary phenomena as a postal strike and a banking year end.
The article goes on to say that it has been concluded:
-that money supply growth will have to be curtailed if the Federal Reserve Board's targets are to be met.
Speaking of Canada, Hugh Anderson has this to say:
Similar problems may well be building up in Canada where the chart lines showing the rate of growth in M-l have shot well above the Bank of Canada's target range of 6 to 10 per cent, measured on a weekly basis. The central bank has warned that recent numbers may be misleading because of the unknown effects of the brief postal stoppage last month ...
The fact remains, however, that curbing money supply growth seems likely to become a preoccupation for the central bank . . .
It seems to me that the somewhat more vigorous rate of Canadian economic growth expected in 1979 and the amount of federal debt to be monetized both suggest further upward pressure on M-l after the January-February seasonal decline.
The problem of inflation remains with us, and much of what we will be seeing and watching for depends on the success or otherwise of the recent issue of Canada Savings Bonds-on how many of these bonds will be taken up by the Bank of Canada.
The real wages of the average Canadian worker are falling because prices are rising faster than his pay. The normal and natural thing for him to do is to try to get enough pay to keep his standard of living from falling any further. But the government has been trying to persuade him to grit his teeth. As the deputy governor of the Bank of Canada stated:
Canadians will be wise enough to recognize that the burst in consumer prices is temporary and that it should be met with moderation and patience.
But is this inflation temporary? I doubt it. What are some of the indications? We find that wholesale prices are on the rise, which is a fairly sure indicator of inflation down the road. It is a sign of higher retail prices to come. Until recently, the wholesale price index has been trailing behind the consumer price index, but it has now surged ahead and is quoted at 14 per cent for September.
High interest rates are both an indication and a cause of high inflation to come. One element in interest rates is an allowance for future inflation. At the same time, increased interest rates feed into prices by raising costs of production, of construction and of holding inventories.
Those of us who have studied the inflationary process since as far back as 1970 have noted, as did the current finance committee, that the real interest rate had to be 3 per cent and that anything above that figure was what the lender expected inflation to be; and since he made that allowance, the raised interest rates and the higher inflation were taken into account by him.
We are likely to get secondhand inflationary pressure as a result of the slump in the U.S. dollar, and of course our dollar has slumped much more. The U.S. dollar has dropped 20 per cent in relation to the German mark and more in relation to
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the Japanese yen. Therefore, we are bound to have inflation as a result.
The U.S. president has attempted to contain inflation through voluntary guidelines. Where can he hope to go? We have had them in Canada. We had the Food Prices Review Board and voluntary guidelines. This indicates that they are merely a smokescreen to obscure what is really happening. Inflation is like a hot potato, tossed from one section of the economy to another, each sector hoping that the other one will take it up. Labour will decline to hang on to the hot potato of the inflationary spiral without demanding further wage increases, which bring on the demand for wage and price controls. The borrowings indicate that our accounts are pretty well out of control. The seeking of additional borrowings indicates the bad state of our economy.
I should like to refer to the recent takeover of Phillips Petroleum by Petro-Canada. That takeover does not seem to make much sense. This company was paying taxes, and I understand that it was a well-run company. It is being taken over by Petro-Canada, which takeover will be financed by the borrowing of American dollars. Perhaps one can say that this is the repatriation of a company which is owned approximately 70 per cent by United States interests.
Is exchanging equity for a mortgage any better? In a mortgage the interest and principal must be repaid, regardless of whether Petro-Canada makes any money or what its profitability is, whereas when there is equity investment and the company does not make money, the people who have invested in the company do not receive dividends either. To go forward with the borrowing of SI billion to buy a well-established company in Canada makes no sense at this time. It increases liabilities by another $1 billion. The government has said that it is not responsible. As a federal company, Petro-Canada in the final analysis must be backed up by the Canadian government. Its borrowings and losses are picked up by the government.
Last spring the Export Development Act was before the House. Everyone who studied that act realized that in effect the Government of Canada was the covenant for the borrowing of the Export Development Corporation. On that occasion the government was honest enough to admit, if the worst came to the worst, that EDC could call upon the federal treasury to cover its borrowings. The Export Development Corporation raised money in the Eurodollar market, which action increased the pressure on the United States dollar.
In the Eurodollar market, the holders of foreign dollars have a defence against the devaluation of the American dollar and hence the Canadian dollar. They create more dollars by borrowing. Loans create deposits faster than engraving greenbacks. All the Eurodollar need to do is increase strong currency loans to Eurodollar accounts, thereby building up dollar deposits without an obligation to liquidate assets put up as collateral. In effect, EDC is adding to our debt responsibility abroad by borrowing in the Eurodollar market. In turn, pres-

November 14, 1978
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sures are created on the American dollar and finally the Canadian dollar.
The objective of this amendment is to ensure that this act shall come into force on a date, after royal assent, to be fixed by proclamation. To date it back to November 1, 1978 is not in the best interests of this legislation. I hope the government and hon. members see fit to support the amendment before the Elouse at this time.
[ Translation]
Mir. Herb Breau (Gloucester): Mr. Speaker, I am glad to rise on the amendment put forward by the hon. member for York-Simcoe (Mr. Stevens) at the report stage of Bill C-7, an act to provide the government with supplementary borrowing authority for the fiscal year 1978-79.
First of all, I should like to say that I am against the amendment because I think that it is useless and, second, that it is contrary to parliamentary practice relating to government business put before parliament, that is to say that on budget or tax matters it is normal for the government to propose legislation subject to parliament approval. When the government introduced this legislation at the outset, it felt that to ensure the orderly issue of Canada Savings Bonds it was better to have a set date for the coming into force of such a legislation once passed by parliament, that is November 1, which coincides with the issue of the new Canada Savings Bonds series.
So that is why I find the amendment moved by the hon. member for York-Simcoe to be useless and contrary to the practice in budget and tax matters put before parliament. However, Mr. Speaker, I want to speak on that amendment and on the general issue, because it should be noted that we are now merely discussing the question of increasing the borrowing authority of the federal government and not necessarily of authorizing expenditures. During the debate on second reading of Bill C-7, as in committee, I was a member of the Standing Committee on Finance, Trade and Economic Affairs, when members criticized the bill they wanted to deal with government expenditures. The bill does not provide for any government expenditure but it is aimed at allowing the government to increase its borrowing authority. Of course, if the government is borrowing, before those expenditures can be made, they must be approved by parliament. This is not a debate on government expenditures but on whether or not to increase the borrowing authority of the government. Once the government has borrowed, before spending that money, it must obtain authority to do so.
In this debate we are obviously getting the same reaction from the Conservative party when they tell us that the government spends too much, that government borrowings will fuel inflation, that its spending is ill-conceived, that its intervention in the Canadian economy is excessive, yet in all debates or every day some members on the other side who pretend they speak for their parties have nothing else to do than to propose measures which would imply more government spending.

Whenever the government proposes reductions, the Conservatives stand on both sides of the fence at the same time. On the one hand, they say, "Cut the spending, reduce the government's deficit. You interfere too much in the economy. It's bad." But the minute the government proposes a reduction, the same people on the other side who said "Cut, cut, cut" stand up one after another and say, "It's terrible! You are going to close a laboratory here. Shame, you are going to close a laboratory there. It is awful, you are going to put people on unemployment." Well, Mr. Speaker, the Conservatives should make up their minds about whether they want the government to reduce its intervention in the economy or to increase it.
In my opinion, additional fiscal measures by the government are healthy for the economy. Those who want better redistribution of wealth and more social justice must recognize that it is up to the government to do that on behalf of Canadians. It levies taxes or uses its borrowing power to redistribute this wealth. It is the only way to do it and anyone suggesting that we can build a better society without doing that either fails to understand how the economy works or is being a hypocrite. It is one or the other.


Lorne Edmund Nystrom: That is socialism.


Mr. Breau:: No, it is not necessarily socialism. My friend from Yorkton-Melville (Mr. Nystrom) is still confusing socialism and pragmatism.
I did not understand what the hon. member for Calgary Centre (Mr. Andre) meant but I think I know what he will say during this debate. He will likely say that the government-I should not anticipate on what he is going to say but sometimes it happens that we know in advance what people are going to say-he is going to say that it is a terrible thing for the government to spend more and to have an oil company such as Petro-Can. He is going to say it is bad for a country to have that kind of company while the British or the Mexicans or other countries have similar national companies but, in his opinion, it is bad for Canada.


Lorne Edmund Nystrom: France and England!


Herb Breau: I said the British, and that means England.
Mr. Speaker, this is one example where on the one hand the Conservative members are telling us to do more for society. I am astonished by some of the eloquent speeches that we have heard from the Conservative ranks in the past two or three weeks. They are telling us to do more to help the poor and to eliminate the disparities that exist in our society but on the other hand, they are rising to say: you spend too much, you undertake too much, you collect too many taxes, you use too freely the borrowing authority of the government.
Mr. Speaker, there is no way to build a more just society if the government does not use its borrowing and taxing author-
November 14, 1978

ity to distribute the resources and benefits in the economy and in society as a whole.
It is very funny that when the government proposes to privatize some services which have proven to be self-sufficient, as for example the program of insurance for fishing vessels, research facilities of the department of fisheries in Halifax and some research facilities for the forest industry, we hear members of the Conservative party particularly criticize and suggest it is terrible to privatize in that way.


An hon. Member:: He is not a Conservative.


Herb Breau: I am not referring to him, I am referring to the Conservative party. They say it is terrible to leave these services in the hands of the private sector. I have been here for a little more than ten years.


An hon. Member:: Too long.


Herb Breau: The hon. member for Calgary Centre (Mr. Andre) says "too long". I have not been here as long as he, so if it is too long for me it must be very long for him. During the ten years I have been here, the Conservative members have been saying we should leave these things to the private sector because the private sector is more efficient and can do things better. When the government does exactly that, members of the Conservative party, including that hon. member from Victoria-I forget the name of his riding right now-


An hon. Member:: You mean Esquimalt-Saanich.


Herb Breau: He gets up and says it is terrible to privatize. I heard him during the question period about ten days ago say it was terrible to privatize some of the research facilities of the federal government.


David Orlikow: And he was right for a change.


Herb Breau: Hon. members should make up their minds. Either we give more to the private sector or we do not. I do not think the Canadian people or this parliament will be fooled by the people over there who cannot make up their minds and try to be on both sides of an issue at the same time.


Eldon Mattison Woolliams: Why don't we go to the country? You would not have an election in the spring or in the fall. Let us have a decision.


Herb Breau: If the hon. member for Calgary North (Mr. Woolliams) wants to speak he should do so. I am sure he is not shy. Normally he is a very good orator. Lie can get up during debate and make quite a good speech on any subject. I am sure he will continue in that tradition and make a speech if he wants to respond to what I am saying.
I am one who believes the government must use its borrowing power to intervene in the economy. It should use its power to redistribute the fiscal resources of the country in order to ensure a better sharing of the riches of this country. I have suggested to the Minister of Finance (Mr. Chretien), and he
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has told me he would give this serious consideration, that one of the things we should do in order to stimulate the economy is devise a special program whereby the government would help start large industrial infrastructure projects in the field of energy, in the field of fisheries and in other fields that normally are left to federal spending. Because we cannot expect the private sector to do everything. For example, in respect of fisheries we must provide wharves and marine facilities, and in respect of energy we must provide pipelines and other things that will be needed in the future.


Harvie Andre: The private sector is quite ready to do that. You do not have to get involved.


Herb Breau: The government should help support any project that requires public spending. We have a surplus of manpower, or a surplus in the labour force. After all, that is what unemployment is. We should have a special authority for borrowing abroad, as that will not influence interest rates in the country, using these funds precisely for the purpose of helping the provinces and the private sector in large industrial infrastructure projects which will be needed in the next 20 or 25 years, even if we have to pay higher interest rates. Perhaps many of these projects are not economically feasible at this time, but when considered in the long-term they may be feasibly attractive at some time in the future.
What I am suggesting is that we use our borrowing authority now in conjunction with our surplus in the labour force to start these projects. Many studies have confirmed that within ten years we will have a shortage of skilled construction workers. This means that we will be engaged in large industrial projects requiring a great deal of construction activity and will have to import workers from outside. I suggest we should borrow now in order to start these projects now.

Mr. Speaker, I believe that this bill should be passed by parliament for the reasons explained by the Minister of Finance (Mr. Chretien) in committee and in the House. First, he had to borrow outside the country, particularly in Germany and the United States, so as to change those funds into Canadian dollars with a view to ensuring an orderly fluctuation of exchange. As the situation of our dollar has improved, we can now sell dollars to ensure an orderly increase. It is important to act that way when there is pressure on the dollar, pressure which is very often speculative. For that reason it is important for the government to exchange foreign currencies from borrowings or national reserves into Canadian dollars to ensure an orderly fluctuation. Even on that issue it is difficult to understand what would be the position of the Progressive Conservative party because every time we had data indicating that the government had converted its foreign currency reserves into Canadian dollars, opposition members and particularly the Progressive Conservatives rose and said it was dangerous for the economy, that it was an evidence of the malfunction of our economy because we converted foreign currencies from borrowings or Canadian reserves into Canadi-

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an dollars to insure an orderly fluctuation on the exchange market.
Mr. Speaker, I wonder what the opposition members would do if they ever had the power or the responsibility to act. Would they merely leave the market to its own devices when there is a run on the dollar, when it is obvious that speculative forces are reducing the value of the dollar, that the dollar is artificially reduced by speculative forces? The hon. member is laughing, does he believe that there is no speculation against our dollar?
There is never any speculation against the dollar?


Harvie Andre: That is not what is causing it.


Herb Breau: I am not saying that is what is causing that. I am saying that at times pressure on the dollar is caused strictly by speculative forces. At times that is what happens and that is why it is important for the government to intervene and make sure that upward fluctuations on the dollar are orderly.
On that point I should like to know what the Conservatives would do. If they found out there was speculation against the dollar, would they let the speculators have a holiday on the dollar? Is that what they would do? Of course, we do not get an answer; all we get is criticism when the government-


Harvie Andre: 1 am going to speak in a minute and I will give you the answer.


Herb Breau: I am glad that we will finally get a position on that from a member of the Conservative party in the shadow cabinet. He may speak with authority and tell us what the Conservatives would do. Would they intervene when there is clearly an artificial downward pressure on the dollar, when there is speculation on the dollar, or would they let the market settle exactly where the dollar should be? I should like to hear that, because I believe it is the responsibility of the government to make sure that fluctuation in the exchange markets is orderly, and when there is speculation we should intervene. We should do so when there is downward pressure on the dollar as well as when there is upward pressure on the dollar.
In these last few days we have heard again the great Tory pronouncement of how dangerous it is, how terrible it is, for the government of this country, for the parliament of this country, to set up a national oil company like Petro-Canada. When the Conservatives attack the government for keeping Petro-Canada, for shoring up Petro-Canada, for making sure it plays an important role in the development of oil and gas in this country, what they are saying is that Canadians are not good enough to have a national oil company like the British have, the French have and the Mexicans have.
I hope in the next election campaign they will come to eastern Canada, where Petro-Canada has been the only company to invest money and make sure there is exploration there for oil and gas. I just cannot wait until the Tories come there

and tell the people they do not want this to happen, that they do not want a national oil company. We will see what the country says about that.


Some hon. Members:: Hear, hear!


Harvie Andre: Mr. Speaker, there was so much nonsense in that speech that to reply to all of it would take up all the time I am allotted so I will just touch on some of the most obvious points.
First of all, the hon. member contends that it is evil speculators who have driven our dollar down to 84 cents or 85 cents and that the government is intervening simply to stop these evil speculators from driving the dollar down. That is absolute nonsense. The dollar is being driven down because Canada has one of the highest inflation rates-


Herb Breau: Mr. Speaker, a question of privilege.


Harvie Andre: You have just finished speaking.


The Acting Speaker (Mr. Ethier):: The hon. member for Gloucester (Mr. Breau) on a point of order.


Herb Breau: No, a question of privilege, Mr. Speaker. I believe the rules provide that when a member is being misrepresented that is a question of privilege. The hon. member is misrepresenting what I just said when he said-


An hon. Member:: No, he is quoting you.


The Acting Speaker (Mr. Ethier):: Order, please. I understand the hon. member for Gloucester wants to debate or argue a point that was just made by the hon. member for Calgary Centre (Mr. Andre). He may have that privilege if we have the unanimous consent of the House. Nevertheless, if he has a point of privilege to raise it might be done at a later time but certainly not at this time. I feel it is quite argumentative. The hon. member for Gloucester wants to debate or argue a point made by the hon. member for Calgary Centre. I cannot recognize him on a point of privilege.


Herb Breau: Mr. Speaker, on a question of privilege. I am not-


The Acting Speaker (Mr. Ethier):: Order, please.


An hon. Member:: You have made your speech.


Harvie Andre: You sit down, you nincompoop!


The Acting Speaker (Mr. Ethier):: Order, please. I should not like to have to cite any quotation or any rules of procedure that I have to live by, but I have to regretfully say that I see no point of privilege. I recognize the hon. member for Calgary Centre.


Herb Breau: Mr. Speaker-


An hon. Member:: Name him.
November 14, 1978

[ Translation]


Yvon Pinard: Mr. Speaker, I was in the House but did not hear the explanations of the hon. member who wanted to raise a question of privilege. It is rather difficult for me to judge whether there was indeed a question of privilege. I am referring to Standing Order 17(2) which provides for a question of privilege to be raised at the first opportunity. I do not know, however, what the hon. member was going to say, so it is difficult for me to decide whether he was raising a question of privilege. 1 respectfully suggest that he be heard.


The Acting Speaker (Mr. Ethier):: I think-I am listening and it is precisely what hon. members are saying and the hon. member for Gloucester (Mr. Breau), and I quote, said he had been misquoted. If one refers to Standing Order 37, one can see that a debate cannot be interrupted and above all that a member who has had the floor cannot speak again to say that he has been misquoted. I therefore recognize the member for Calgary Centre (Mr. Andre).


Herb Breau: Mr. Speaker, a question of privilege.


Mr. Corbin:: You have to listen to him, Mr. Speaker. He has to be heard.


Stanley Howard Knowles: Oh!


Lorne Edmund Nystrom: Name him.


The Acting Speaker (Mr. Ethier):: I have recognized the hon. member for Calgary Centre and I have ruled there was no question of privilege; therefore, I cannot entertain any discussion on the matter. The hon. member for Calgary Centre.


Herb Breau: Mr. Speaker, a point of order.


Robert Lorne Stanfield: Filibuster.


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


Herb Breau: Mr. Speaker, if hon. members would just keep quiet, I am just trying to make a point. I do not want to question your decision-


Some hon. Members:: Oh, oh!


Herb Breau: Mr. Speaker, you said in your ruling that I had said that I was misquoted. Mr. Speaker, I just want to say that I had not said that. I said that the hon. member for Calgary Centre was misrepresenting what I said. I believe that a member-


The Acting Speaker (Mr. Ethier):: Order, please. I read from Standing Order 37:
(1) No member may speak twice to a question except in explanation of a material part of his speech which may have been misquoted or misunderstood.
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but then he is not to introduce any new matter, and no debate shall be allowed upon such explanation.


Harvie Andre: Mr. Speaker, before I was so rudely interrupted five or six times I was saying the hon. member's contention that the dollar has dropped because of evil speculators is nonsense. The dollar has dropped in value because Canada's inflation rate is higher than most other western industrialized countries. Our government is running a deficit higher than any other country, with the exception of Italy, and the international monetary fund has no confidence in this government's ability to run the economy. That is why the dollar is dropping, and the parliamentary secretary knows that full well. He knows exactly why the dollar is dropping in value and why we are running the huge kind of trade deficit we have.
There were a few other remarks made by the hon. member for Gloucester (Mr. Breau) that I would like to touch on. His opening statement made reference to the fact that it was perfectly reasonable-in fact, it was more than reasonable, it was highly desirable-for the government to involve itself physically in the economy, to borrow money and to take money from the state, spread it out and do good works on behalf of the people of Canada. That was his statement. He said that anyone who opposed that was really being mean and cruel.
I would like to remind the hon. member of a speech made by his leader on August 1. That is not long ago and he should be able to remember that far back. They were planning an election at the time but maybe this is only valid during pre-election periods and we should not believe what the Prime Minister (Mr. Trudeau) said after he has changed his mind about an election. He said, however:
We will be cutting $2 billion from current and planned expenditures ...
According to the hon. member for Gloucester, what the Prime Minister said he was going to be doing when he spoke on August 1 is exactly the wrong thing to do. The Prime Minister also said:
We will achieve zero growth in the federal public service.
The hon. member for Gloucester thinks that is terrible. But that is what the Prime Minister promised on national television on August 1. The Prime Minister went on to say:
We will remove the intrusions of many government policies and regulations from individuals and businesses-
That is what the Prime Minister promised on national television on August 1. Continuing, he said:
-in some cases this will mean returning functions to the private sector-
That is what the Prime Minister promised. And again the speech continues:
-in others it will mean removing the heavy hand of government and its drag on personal initiatives.
He said that on national television.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!

November 14, 1978
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Harvie Andre: Obviously some of the members of the Liberal party disagree with the hon. member for Gloucester and his contention that the government should get in there and get involved.


An hon. Member:: We disagree with you.


Harvie Andre: Much of this, of course, was repeated in the throne speech of October 10. Then less than 30 days later an airline and an oil company were nationalized.


Some hon. Members:: Hear, hear!


Harvie Andre: Who in their right mind, Mr. Speaker, would believe anything that anyone in that group says?


Some hon. Members:: Hear, hear.


Mr. Dinsdale:: People in Canada do not.


Harvie Andre: This is a debate about government spending and about government debt. That is what I am going to talk about but the Parliamentary Secretary to the Minister of Finance (Mr. Martin) made some comments about Petro-Canada that I must respond to. In particular, he said that Petro-Canada was needed so that the government could have control over an important part of the oil industry. That was his statement.


Alan Gray Martin: Mr. Speaker, I rise on a point of order. I do not know how you will rule on this matter. I think the hon. member for Calgary Centre (Mr. Andre) has indicated that I have made definite, specific statements. I simply want to say that those were not the statements that 1 made. I could ask him to withdraw those remarks until he has at least read the transcript.


Harvie Andre: Mr. Speaker, I heard what I heard, and I heard both the Parliamentary Secretary to the Minister of Finance and the hon. member for Gloucester say that Petro-Canada gives the government control over an important sector of the industry. It is impossible to run a seismic line, it is impossible to drill a well, it is impossible to put in some pumps, it is impossible to put in a pipeline, it is impossible to put in a refinery, it is impossible to do anything without getting government permission. There are several hundred employees of E M and R, under various pieces of legislation plus something called moral suasion, exercising tremendous control over the oil industry. There is the National Energy Board with its several hundred employees licensing virtually every activity of the oil and gas industry. It is one of the most regulated industries imaginable.


An hon. Member:: But they pay no taxes.


Harvie Andre: What the government is saying is that all of these hundreds of civil servants and hundreds of thousands of other people cannot control the industry. The government has to own it to control it. At least we have to say: "If that is the route you are going, get rid of these other redundant people. If they are not doing the job of controlling it that they are being paid to do, get rid of them." Why have both?


An hon. Member:: That is a good point.


Harvie Andre: Why can we not have a national oil company since Mexico has one? Obviously they do not know anything about the history of the Mexican oil industry. In the 1930s when Mexico's industry was privately run, Mexico was the second largest producer of oil in the world. It was the largest exporter of oil in the world by a long way. Then the Mexican government nationalized the industry and for the next 40 years Mexico was a net importer of oil. That nationalized oil company went from the largest exporter in the world to being a net importer of energy, at great cost to the people of Mexico through lost opportunity, lost revenue, lost jobs.
This situation must be put in the context of the geology Mexico happens to have under its land. It has some of the most attractive geology in the world in terms of oil and gas reserve; only Saudi Arabia surpasses it. So this national oil company for 40 years drove Mexico from being the largest exporter of oil into a net import position. And that is what hon. members opposite want to do to Canada, and we will not let them. That is the point.
If hon. members want to choose examples, at least use a little more care about the examples we should emulate. If hon. members want to emulate something, emulate British Petroleum. That is a good exemple. That is not a Crown corporation. The British government owns shares. They do not control it. It is not an agent of Her Majesty. It does not have a monopoly. It does not have special rules. The government is not allowed to dip into the till and the liabilities of British Petroleum are not liabilities of the British Crown. If there is a national oil company to be duplicated, for goodness sake duplicate BP. Do not duplicate Pemex and do not duplicate these other ludicrous examples that hon. members are putting before the House with no knowledge whatsoever.
Next we come to the question-I am sure the Parliamentary Secretary to the Minister of Finance will be interested in this-of the method of financing this takeover. The method of financing used in this takeover by Petro-Can of Pacific Petroleums is through the sale of something called an income debenture. An income debenture is a loophole in the tax law. It allows the interest on this debenture to be treated on a tax-free basis by the bank. That is the reason for the 7 per cent. The bank does not have to treat it as income. It goes right to the bottom line as profit. There is no tax on it. It is a loophole in the tax law which the banks have taken tremendous advantage of, and they are not to be criticized for that.
The net effect is that the banks in Canada now pay an interest rate of 30 per cent, not 50 per cent as they are supposed to, because a lot of their income is derived from this loophole, these income debentures and so-called term preferred. The net result from this little transaction of Petro-Canada using the banks is the loss of income tax revenue to the treasury of $84 million a year. That is the loss of income tax revenue to the treasury of Canada as a result of this bill. If
November 14, 1978

I were a betting man, I would bet this loophole will be closed on Thursday night.
Is it not interesting that this Crown owned company, our own oil company, should take advantage of this loophole at this point to not only saddle us with $1,400 million in debt but do it in a way that costs us $84 million a year in lost revenue? That is very "responsible" government.
The debt burden that we are forced to bear as a result of irresponsible government over the past few years is absolutely horrendous. Fourteen per cent of government expenditures this year will be used to pay interest on the debt.
The hon. member for Winnipeg North Centre (Mr. Knowles) says we are concerned about spending. He says this is because we want to cut back on social programs. In fact, he asked us which social programs we would cut back. Old age security payments in this country account for $5,375 million. The interest on debt is $6,500 million. Next year, as a result of the borrowing authority in this bill, it will be over $1 billion more. I am sure the hon. member for Winnipeg North Centre would agree it would make a lot of sense to stop this kind of irresponsible spending, take the extra $1 billion in interest and give it to the old people in this country who deserve and need it. That is the kind of policies we want to see.


Stanley Howard Knowles: That is what capitalism lives on.


Harvie Andre: Instead of spending $1,400 million on the takeover of Pacific Petroleums which will not generate one job or one extra barrel of oil, let us use the interest on that money to help the old people, pensioners and veterans that the hon. member for Winnipeg North Centre is genuinely concerned about. That makes a lot more sense than taking over an oil company in some sort of empire building operation.


Lorne Edmund Nystrom: Nonsense.


Harvie Andre: The hon. member for Yorkton-Melville (Mr. Nystrom) says "nonsense". He does not want to help the elderly of this country, he wants to take over the oil companies.


Stanley Howard Knowles: Your finance critic would not answer our question.


Harvie Andre: The debt in this country is absolutely incredible. There are no plans, statements or indications as to how it is to be paid off. That $6,500 million does not pay off anything. It is just interest. That is equivalent to one half the total income tax collected in this country. In other words, one half the income tax taken off our pay cheque goes to pay the interest on our national debt. What an incredible figure! Next year it will be larger. We have had no indication from the government of how it plans to pay this off.


Robert Lorne Stanfield: They will bring in John Turner.


Harvie Andre: Marvellous. Before John Turner we had roughly balanced budgets. Turner was the guy who launched us on this blooming program. He was the most pathetic finance minister
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we ever had. Most who came after him learned from his bad example.
The reasons given by virtually everyone for our debt position are the tremendous drop in the value of the American dollar, the American budgetary deficit, American inflation and American trade balance problems. In every one of those circumstances Canada has done worse and is in a worse position. Our deficit this year is at least four times as much as the United States on a per capita basis, and theirs is considered totally unacceptable. Our inflation is higher and our trade balances are worse. I do not see any action from the government to correct the situation.
If you looked around the world for examples of situations that resemble our economy today, Mr. Speaker, you would find that the most similar circumstance is New York city. We are using borrowed funds on which to live. We pay our operating expenses with borrowed funds. Our situation is like going to Household Finance to borrow money in order to buy groceries without knowing how we will repay it. You keep borrowing more money for groceries. The interest piles up and eventually you have had it. You borrow money to pay the interest and on and on it goes.
An individual can only do that for three or four years before he gets caught. A country can do that for quite a while before getting caught. Unfortunately the government has discovered they can do that past the next election. By the time the country has to pay for this irresponsible behaviour, the electorate will have forgotten who caused it. Therefore, the government will not have to pay the electoral price. That is absolutely irresponsible.
Horrendous as our debt is this year-at least 11.8 per cent declared deficit; that is an understatement by a long ways- much of this government's spending is disguised. It is not declared but simply hidden. Year after year we have listened to the President of the Treasury Board (Mr. Andras) reading his pronouncements that spending had been cut to less than the growth in the gross national product; 9 per cent this year, 9.8 per cent last year, 8.2 per cent the year before.
When I look at the figures produced by Statistics Canada and the Canada Tax Foundation, I find that the percentage of gross national product consumed by individuals has gone up. I wonder how that is possible since government spending is less than the growth in the gross national product. However, the total portion consumed by individuals has gone up.


Mr. Lang:: It is provincial.


Harvie Andre: The minister says it is provincial. The federal share is growing faster than the provincial or municipal share. It is from the Canada Tax Foundation that I discovered the notion of national accounts and public accounts. Public accounts are the figures presented to us by the government. National accounts are all aspects of government, including Crown corporations.
When you look at the national accounts, which are all of the government's operations as well as all the Crown corporations,

November 14, 1978
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you find that spending by this government is far in excess of the growth in the gross national product. It is not less, as the President of the Treasury Board has been claiming in this House, it is more. They have merely shifted from the consolidated revenue accounts into Crown corporation acounts certain spending, which heretofore had been part of the public accounts, thereby disguising their true spending habits.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. S. Victor Railton (Welland):: Mr. Speaker, I feel bound to interject here-


Herb Breau: On a point of order, Mr. Speaker. I am sorry to interrupt the hon. member for Welland. I just want to ask Your Honour a question.

I merely want to ask the Chair at what stage of the debate an hon. member has the right to invoke Standing Order 37(1) when he has been misinterpreted.


The Acting Speaker (Mr. Ethier):: I believe I can answer that fairly quickly. At the beginning, the hon. member for Calgary Centre (Mr. Andre) did not mention the words quoted by the hon. member for Gloucester (Mr. Breau). If he did so, I was unaware of it and did not hear him attribute statements or a quotation to the hon. member, which could lead the hon. member for Gloucester to say he was misinterpreted. Then, the hon. member for Gloucester rose, saying he has been misunderstood or misinterpreted. The point he could certainly argue and bring up, but he surely had to give the Chair a chance to hear what the hon. member for Calgary Centre had to say. Moreover, I could not, at that point, accept the question of privilege as I had not heard what the hon. member for Calgary Centre had to say. The question of privilege was raised and I told him there was not a question of privilege. The hon. member for Gloucester has the floor.


Herb Breau: Mr. Speaker, I admit you are right about what you heard or not; however, the hon. member has clearly interpreted my remarks, I did hear him clearly and I think he himself would recognize he did. I can understand Your Honour may not have heard or understood, but I simply want to tell you, that I heard the hon. member for Calgary Centre give a quite wrong interpretation of the position I have stated in my speech on a certain matter.


The Acting Speaker (Mr. Ethier):: One certainly cannot raise the question of privilege to quote the interpretations of a

position taken, or of what one intended to mean; it can be done only if one quotes the exact words that have been said and that have been given a wrong interpretation. Then one can certainly seek rectification by raising the question of privilege. However,
I must say, I did not hear the hon. member for Calgary Centre quote words he had said and say-

-the hon. member for Gloucester said this and this and this and I will quote. I did not think there was a question of privilege and I so ruled.
The hon. member for Welland.


Samuel Victor Railton: Thank you, Mr. Speaker. I am really rising because I cannot quite stomach some of the remarks tonight-


An hon. Member:: Get a doctor!


Samuel Victor Railton: I have plenty of tablets at my disposal for dealing with ordinary stomach ache, but it would take a peculiar type of medicine to enable me to put up with the sickness engendered by irresponsible talk from the other side. This talk about irresponsibility on the part of the government is ludicrous. I think some of the members on the other side should remember what Gordon Sinclair, that good old war-horse, said a year ago-that our leader is the most maligned man in Canada and that he is getting tired of all the blame and approbrium being heaped on his shoulders by small minds. And small minds come from the other side. I think this kind of debate tonight has been taken a little too far.
Way back in October and a little later we were discussing Bill C-7, and at that time the opposition was still talking about irresponsibility as well as about unemployment and inflation. As you know, Mr. Speaker, unemployment is no fault of the government. In fact, we have been creating more jobs in the last ten years than any other country in the world. I have to keep repeating this because people do not listen. We have to keep repeating the simple truth. In some years the number of new jobs created has been 250,000; in other years 350,000. It is usually between 250,000 and 275,000 jobs every year. No other country has done as well either in terms of percentage or in absolute figures.
If you want to talk about the growth of the labour force and the reason for the present unemployment, there are some encouraging figures to go on. As the hon. member for Fort William (Mr. McRae) told us a few weeks ago, for every 100 people employed in Germany ten years ago there are today some 96. The figure for the U.K. is around 110. In Italy it is around 112 and the figures for France are roughly even. In the United States it is 125 but in Canada it is between 145 and 150. There is no other industrial country in the world which has experienced such growth in the labour force. We want to see participation by women and young people. We have more young people than most other countries-


An hon. Member:: No.


Samuel Victor Railton: There is no doubt we have experienced a bigger population growth through the birth rate than most
November 14, 1978

other countries since the end of the Second World War and the Korean war. We are not complaining about it; we are glad to have these people and glad they are willing to work. We are trying to find work for them and we are doing better than most countries.
As far as inflation is concerned, the hon. member for York-Simcoe (Mr. Stevens) put us down in thirteenth or fourteenth place. This was refuted by the hon. member from Scarborough. We are really not in that position. We are in the first two, three or four or whatever it is in those categories, so we are not thirteenth or fourteenth among the industrial nations at all as far as inflation is concerned. Our performance has been better than that of most countries.
I have no idea what the hon. member for Gloucester (Mr. Breau) was talking about when he spoke of nationalization. We are not nationalizing anything. Does the hon. member for Calgary Centre (Mr. Andre) have anything against Crown corporations? Is he telling us he would not like to see Air Canada continue, that he would not like to see the CBC continue, that he would not like to see the CNR continue, that he would not like to see the Post Office turned into a Crown corporation? Just how are we going to perform?
This idea that the government must not intervene is rather naive. There is no country in the world which has not intervened in business. This idea of private enterprise making everything sweet and rosy is probably the most old-fashioned idea since Eve tempted Adam with an apple.


Harvie Andre: Why don't you read your own Prime Minister's speech. That is what he said.


Samuel Victor Railton: Take your choice. You have totalitarian countries whether on the left or on the right. You have countries with so-called democratic governments. But none of those countries with so-called democratic governments can get along without intervention by sensible, responsible administrations once in a while. This is how Petro-Can will have to be regarded.
Petro-Canada was set up for a definite purpose. The hon. member for Calgary Centre was with me and a number of others who went up north to study energy, mines and natural resources. The hon. member saw the beginning of the Syncrude project. He saw Great Canadian Oil Sands work in the tar sands. He went up to Yellowknife, Inuvik and the Arctic islands with the rest of us. We saw Prudhoe Bay. The hon. member talks about the wonderful oil fields in Mexico. We have just as much oil in the Arctic islands and gas in the Beaufort Sea, in Alberta and all through the Mackenzie basin as there is in Saudi Arabia or Mexico. But let us get at it and make ourselves self-reliant.
It is about time we realized why Petro-Canada was set up. Canada's oil and gas industry has been taken over by foreign oil companies. Let us not kid ourselves about that. There are very few Canadian oil companies except for the ones in which we are trying to intervene. Petro-Canada is providing guid-
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ance, inspiration and leadership to other oil companies in Canada. Let us not forget that after the quadrupling of oil prices by the Arab world in 1973 and 1974 oil rigs disappeared from Alberta and the north. That was because we did not have Canadian oil companies. We did not have an oil policy which included Petro-Canada. Foreign oil companies wanted to kid Canadians into believing that we had to depend on them. That is why Petro-Canada was set up.
That government intervention was very important, and it will help ensure self-sufficiency. We have done a great deal more than has been done in the United States. It took about two years for good old President Carter's energy package to work its way through congress. We made a start a year or two before President Carter did. Because of its size and the fact that it is our neighbour, the United States cannot see our arguments because of fancy and expensive lobbying in Washington. The United States has not really listened to us, but it will be glad to do so as time goes on.
The hon. member for Calgary Centre was criticizing our social security policies. I wonder what social security program he would like to abolish. Would he like to see old age security wiped out? Would he like to see family allowances wiped out? Would he like to see medicare and hospitalization wiped out? What social security program would the hon. member like to see disappear? He talks about irresponsibility. There is probably no government in Canada which has done as much for the average citizen and the poor person in Canada as this Liberal government has done in the last ten years.
I would like to deal with the question of the national debt. If I said that our national debt per capita is higher than that in the United States, that is actually not so. Per capita the national debt in Canada is less than that in the United States, and it has come down in the last ten years. It has also come down in the United States. The figure has gone down from 35 per cent to 27 per cent.


Donald W. Munro: Oh, come on.


Samuel Victor Railton: Did the hon. member not hear that two or three weeks ago? These are accurate figures, and the figure here is 2 per cent lower than the figure in the United States.
Hon. members talk about our children being saddled with this terrible debt. Is this debt not actually an investment in Canada? Listening to the hon. member for Calgary Centre, one would think he had no faith in Canada's future.
Hon. members should realize that the national debt of Canada could be paid off with one quarter of our gross national product in one year. When we think of it that way, the national debt is not so big.
I have just received a note from the parliamentary secretary.
I do not know if he is attempting to correct me, but he points out that proportionately our debt per capita is lower than it was ten years ago, and it is reducing faster than is the national debt in the United States.


Some hon. Members:: Hear, hear!


An hon. Member:: That is not true.

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Arthur Jacob (Jake) Epp: Mr. Speaker, I want to speak for the amendment to Bill C-7. I have been in various committees with the hon. member for Welland (Mr. Railton), and I always find his rhetoric interesting, but I think today he reached new levels. He made many statements, but if he had to back them up he would have some difficulty. I am sure that in his professional days he would have been much more successful backing up his diagnoses than he was tonight backing up his statements.
Tonight the hon. member for Welland mused in the same manner as his fearless leader has mused. Hon. members will recall that one New Year's Eve-


Mr. Harquail:: Wouldn't you like to have a leader?


Arthur Jacob (Jake) Epp: I have a leader, and you are on the way out, friend. On that New Year's Eve the Prime Minister (Mr. Trudeau) mused along the same lines as the hon. member for Welland tonight. He said that he thought the market economy was not really working very well. Once someone established that, the next step is obvious. If the market economy does not work well, you intervene and nationalize.
The hon. member does not know what all the fuss and bother is about with regard to nationalization, so I will tell him. Through this bill the government initially asked for authority to borrow $17 billion. Because of opposition to granting authority to borrow $10 billion next fiscal year, the government was forced to back down. An amendment was introduced to delete that request for $10 billion in borrowing authority from Bill C-7.
The government now goes forward and makes additional borrowings. For what purpose? It wants to take over a company at a cost of $1.4 billion. The government has allowed another Crown corporation to buy out a profitable free enterprise carrier, Nordair, despite the objections of almost every province which is served by Nordair. I see that the Minister of Transport (Mr. Lang) is in the House tonight. The provinces involved are concerned that if Nordair is vulnerable, who is next and will there be regional carriers? I believe that there are a number of hon. members opposite who are totally convinced, even though it is not very popular at this time, that the market economy does not work and that it is up to them to intervene in the market economy.


Alan Gray Martin: Mr. Speaker, I rise on a point of order. I am sure the hon. member for Provencher (Mr. Epp) would want to be clear about the facts. The fact is that this request for borrowing authority has nothing whatsoever to do with Petro-Canada's potential to buy this, that or any other company. The current proposal of Petro-Canada-


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member for Provencher (Mr. Epp).


Arthur Jacob (Jake) Epp: The point that is important is that the government wants to intervene, and it is flirting with the Canadian public when it says: "We must allow the private sector to do more.''

DEBATES	November 14, 1978
It is the musing of last August 1 when the Prime Minister (Mr. Trudeau) said he would allow the private sector to do more, that he would not intervene. But that is a slight retreat from his goal and his plan. Mentally and philosophically he has always been an interventionist. He has wanted to control the lives of Canadians and control the market economy. There is a wide body of people in Canada who are now totally convinced that given half the chance, the Prime Minister would intervene even more in the market economy if the politics of it were such that he would not lose at the polls.
All we have to look at is the last ten years and the further intervention by this government in the marketplace. Just take Nordair and Petro-Can as examples. But when anyone criticizes this intervention, hon. members opposite wrap themselves in the Canadian flag and equate any criticism of the Liberal government and of the Prime Minister with criticism of Canada. It is not criticism of Canada that we are putting forward tonight; it is criticism of the leadership of this government and of the economic malaise to which they have brought this country.
No matter how they trumpet and bray from the other side, the Canadian public has finally seen through this crew. Government members opposite are now facing more than anything else a credibility gap, first of all with the Canadian people, and secondly with the international community which does not believe what the government are saying. Let us go back to price and wage controls. Did they support wage and price controls in the 1974 election campaign?


Mr. B6chard:: No.


Arthur Jacob (Jake) Epp: Of course they did not. Six months later, on October 14, did they support it? Of course they supported it then, because suddenly the shoe was on the other foot. And that is where the credibility gap started for this government.
Despite the Prime Minister's protestations that he will allow the private market system to work, his actions in the last two weeks have proven again that this is so much rhetoric and that his real philosophical bent is toward intervention. Given half a chance, that is what he will continue to do. No member on the other side of the House can refute what I am saying and defend the Prime Minister. No member on the other side can deny that the Prime Minister's first goal is to make the market economy work and that above and beyond that it is his own private and personal goal to control the Canadian economy.
The result is that today in Canada we have a situation where the potential of this country has been frittered away. Canada can be strong, but not with the type of leadership that this government is giving in economic matters. Read all the comments about the economy. What can the Minister of Finance (Mr. Chretien) do on Thursday night? His hands are tied. Why? Because the Prime Minister and the long list of finance ministers who went to their reward in Toronto and in various such spots have put us further into debt.
The hon. member for Welland is right that a national debt can be created, for instance, as an investment toward to the future. I agree with him. A national debt has also been created
November 14, 1978



during times of crisis. I agree with him, but I do not think this period of crisis should be equated with a period of war or depression. However, the point is that these debts we are now incurring are not long-term investments. Basically, they are debts to cover ongoing expenses of the government, daily expenses.
I will give you one example, Mr. Speaker. We have before the House Bill C-14, which is now in committee. I do not want to get into a debate on the bill, but it is a bill amending the Unemployment Insurance Act. The other day I asked Mr. Speaker for the official consolidation of the act. I received a message from the legal department of the House that there is no such animal. What they did do was give me two pages of amendments and references to the Unemployment Insurance Act passed in 1971.
What I am pointing out is that this is another example of lack of credibility. The then minister of manpower and immigration said that the plan will not cost Canadians any more money than did the previous plan. Yet what is it costing us? It is costing us $4 billion. The point I am trying to make is that every member on this side of the House has said, "Let us make the unemployment insurance program work." But the leakage-or is it the haemorrhage-continues and continues. When anyone criticizes, immediately members on the government side rear up in great protestation and say, "Are you trying to remove money from the unemployed?" They have always tried to project the image of competent managers with experience. They have tried to say that we on this side do not have experience and therefore it will be in the interest of the Canadian people to elect them. I say that the type of experience we are having at present with the government Canadians can well do without.
Why does the government need this $7 billion? Has the parliamentary secretary given us a clear indication of what they need that money for?


Alan Gray Martin: I rise on a point of order, Mr. Speaker. The question has been posed by the hon. member for Provencher and the answer is yes. The reasons and explanations have been given time and time again, at second reading, in committee-


Stanley Howard Knowles: That is not a point of order.


The Acting Speaker (Mr. Ethier):: Order, please. I understand the parliamentary secretary would like to debate this, but this is certainly a point of debate, not a point of order.


Arthur Jacob (Jake) Epp: Surely it is quite simple. Let us go back to March, 1978. What did the present Minister of Finance say when he asked the House for an additional borrowing authority of $5 billion? Does any member on the government side care to give us the words of the finance minister? I am sure the parliamentary secretary can, but twice he has been shot down by Mr. Speaker for being out of order so perhaps I had better help him out. The Minister of Finance said that the $5 billion in borrowing authority would be sufficient to see the government through to the end of the fiscal year which ends on March 31,
Borrowing Authority Act
1979, plus, he said, it would be sufficient to meet further contingencies.
What happened then? When we came back on October 10 he asked us, not for $7 billion for this year, but for more. How much did he want? He wanted another $10 billion for next year. Did he give us any answers as to why he wanted the $7 billion? No, but I suppose he must have thought Christmas is coming when everybody gives gifts, and that if the Canadian people have been gullible for so long, they will be gullible once more. What has the government had to do? They have had to withdraw their request for the $10 billion authority because of opposition from this party-because we said no and the Canadian people said no. Despite all the promises of the Minister of Finance, how are we to believe his March statement that $5 billion was sufficient when now he wants another $7 billion? Is it because we are purchasing certain things or is it because we have to prop up the sinking dollar? Is it because the commitments of the government are so high that despite its attempt at restraint, its cash flow is such that it has to go back to the trough for more borrowing?
The Prime Minister went to Bonn and rubbed shoulders with the great leaders of the world. I imagine he hoped the aura of greatness surrounding him would rub off a little bit on him. What did he commit Canada to at that point? He committed Canada to 5 per cent growth and a restraint program. What happened? He came back to Canada after a slight respite in Morocco. What did he come back to Canada to do? He went on national television and told us about the restraint program. Again he said that the government was going to allow the private market economy to take over.
What is the real growth of Canada? We require 5 per cent just to maintain present employment levels and the revenue demands and commitment of the government. We are not meeting a 5 per cent real growth despite the solemn promises of the Prime Minister. That is the reason the government now needs an additional $7 billion and that 14 cents of every tax dollar goes to service debt, not amortize it.
The hon. member for Welland said that the hon. member for Calgary Centre was opposed to social service programs. That is not the case. He pointed out that under the old age pension program we are spending less in Canada on senior citizens than we are spending on interest. The greatest tragedy is that this generation is spending the legacy of our children. We are placing upon our children and their children a debt, not a debt incurred on the basis of investment which will be of benefit to them, but a debt for our own profligate ways. The government has led the way. It needs $7 billion now, and before the next election rolls around it will need additional money.


Mr. Andres:: That is correct.


Arthur Jacob (Jake) Epp: The hon. member for Lincoln (Mr. Andres) agrees. I should like to point out to him that Canadians are

November 14, 1978
Borrowing Authority Act
tired of handing out more money to a government which cannot manage its affairs.
The amendment by the hon. member for York-Simcoe (Mr. Stevens) to bring at least some semblance of responsibility to the government is highly desirable.


Some hon. Members:: Hear, hear!


Yvon Pinard: Mr. Speaker, I am pleased to take part very briefly in this debate to emphasize the good use the government generally makes of the funds voted by the House. I heard this evening several remarks by hon. members, mostly from Alberta, a province which is fairly rich compared to other provinces more to the east. We in the east are very sensitive to the good use the government makes of public funds. With all the social policies we have had in the country for a few years, we can see to what extent the government takes seriously its role of redistributing as fairly as possible all the wealth of this country. If some hon. members from the west find it difficult to agree to share or to have a fair redistribution of the wealth of this country, I find it is shameful and unacceptable. It is still more unacceptable to use the debate on the bill before us to blame the government for its sense of justice and fairness. As far as I am concerned, I represent an area where industry is being really diversified thanks to the Department of Regional Economic Expansion.
It will be remembered that in 1969 that department was created specifically to fight against regional disparities. That is the very best example one can give of the fair use the Canadian government made of funds. Thanks to the money Bill C-7 will authorize us to borrow, the government will be able to pursue the many projects and programs already in progress. For instance, it will enable industries in ridings like mine to get subsidies for job creation.
Since 1969, the Department of Regional Economic Expansion has spent $12 million in the riding of Drummond. It has created hundreds of jobs. In an area like mine, where textiles represented 40 per cent to 45 per cent of the industrial sector ten years ago, it now stands at only 8 per cent of the active population in the whole riding. That change we owe in major part to the policy of the Canadian government with regard to regional economic expansion, a policy of diversification of industries in the larger centres where, unfortunately too often, the economy was dependent on a single sector which in this instance was weak.
Mr. Speaker, when I hear some hon. members from the have provinces complain about the use this government has made of its funds, I can only answer by giving them that example which speaks loudly of the sense of responsibilities, of equity and fair distribution of our wealth across the nation, which this government has. There are also the numerous other programs financed by the Canadian government all of which are in the

common interest. We always act in that spirit of Canadian solidarity. Today I heard the member for Calgary Centre (Mr. Andre)-unfortunately, he left the House-blaming us for nationalizing a private oil company through Petro-Canada. I say that it was a wrongful not to say a misleading way to put it. May I call it ten o'clock, Mr. Speaker?


BUSINESS OF THE HOUSE
Stanley Howard Knowles: Mr. Speaker, before beginning the adjournment debate, I wonder if I might put a question to the Parliamentary secretary to the President of Privy Council (Mr. Pinard), concerning the House business tomorrow.


The Acting Speaker (Mr. Ethier):: That can be done with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Stanley Howard Knowles: In view of the fact that time is of the essence respecting Bill C-5, because certain spouses become widows day by day and lose their benefits until the bill is passed, would the government canvass the possibility of Bill C-5 being given priority over Bill C-7, particularly if it is possible to pass it quickly?


Yvon Pinard: Mr. Speaker, we are prepared to consider all possibilities, but we will probably proceed with consideration of Bill C-7, then study Bill C-5 and finally come to Bill C-10.



PROCEEDINGS ON ADJOURNMENT MOTION

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

David Samuel Horne MacDonald: Mr. Speaker, I rise to pursue the matter which I raised on October 18 with the Deputy Prime Minister and President of Privy Council (Mr. MacEachen), as the Minister of Regional Economic Expansion (Mr. Lessard) was not in the House. It concerns one of the more unbelievable decisions made by the government in the name of reducing federal expenditures. It has to do with the termination at the halfway point of support for the land registration and information service, a program and agency which the federal government helped to create in 1972-73.
November 14, 1978

When I indicated to the Deputy Prime Minister and President of Privy Council on October 18 that not only would this reduce employment by some hundreds in the Atlantic provinces, but lead to millions of dollars in waste as well as to the loss of a new high-technology export industry, the Deputy Prime Minister and President of Privy Council seemed to be primarily unaware of this, or certainly gave argument at that time which bore no relationship to the facts.
I think it is very clear that prior to 1972 the over-all program of mapping, and to a certain degree the monumenting system that had been implemented, was totally under the control of the federal government. Indeed, as the premier of Nova Scotia at that time, Mr. Gerald Regan, said in a press release on September 14:
We were encouraged to get into this program by the federal government five years ago, when the costs were borne 100 per cent by the federal government-
I simply put that on the record at this point to indicate that this is a process by which the federal government seems to be reneging on its basic responsibility.
The 1973 agreement was entered into between Canada and the maritime provinces, introducing a four-phase program designed to provide a simple and understandable land titles system with easy access to property owners. Eventually this system would substitute picture identification of property for the legal identification now used by most offices, introducing really and quite dramatically one of the most up to date land registry systems anywhere in the world.
It was clearly understood that this project would take some ten or 12 years to complete, some time in the 1983 to 1985 period. There were four very clear phases to the program, and it was very clearly outlined in the agreement that the federal government would pay 75 per cent of the cost under that agreement. Because of the policy of the federal government not to enter into contracts ordinarily for longer than a five-year period, the initial agreement was signed to cover the period from 1973 to 1978. However, there was certainly no indication in any way, shape or form that at the half way point the federal government would suddenly terminate its support for this important project. Indeed, the first indication that the federal government was making this unusual decision came with an hour's notice to those directly involved in the LRIS system. As a matter of fact, perhaps the words of Premier Regan indicate more clearly the shock and inability to accept this decision than anything I could state. Premier Regan said on September 14:
This is the first hint... that we have had that this program was not a priority of the federal government. The cutback places all three provinces in an extremely awkward situation. The LRIS program will require seven more years and $40 million if we are to complete it on schedule by 1985. These facts were known by both parties before we embarked on this program in 1973. That the federal government would withdraw support half-way through this capital project is hard to believe.
That is certainly, if anything, an understatement, because not only was there no consultation with any of the three governments of the maritime provinces, and no forewarning to those directly involved with the system, but it seems clear that
Adjournment Debate the department which has been responsible for the implementation of this program, the Department of Regional Economic Expansion, was offered almost no consultation or advanced notice. That kind of pursuit of priorities seems to be hard to understand.
As one journalist has pointed out, we are faced with a kind of Hobson's choice where the federal government has pulled the plug at the half way point. As Jack Willoughby wrote in the Toronto Globe and Mail of September 15:
The withdrawal of federal money from a plan to computerize the land title system in the maritime provinces has left the provinces with the Hobson's choice of paying $40-million to finish the half-completed project or spending large sums to move back to the old system.
We do not have the luxury of simply abandoning the project at this stage because obviously we are at the stage where mapping has been completed in Prince Edward Island, mostly completed in New Brunswick, with a significant portion still to be done in Nova Scotia.
As I pointed out originally, the loss of a new industry of high technology, offering long-term employment in the Atlantic provinces, is really hard to believe. It is a kind of "antiDREE" decision.
I think it is ironic that we had filed last year, which was prepared for in the original contract, a cost-benefit study produced by P. S. Ross & Partners last April 1977. This is a benefit-cost study of the LRIS program. I want to offer two brief quotations from this study to show the ridiculous position the federal government has taken. Under the subheading "Overview of the Study's Results", the following is reported at page 3:
The results of the benefit-cost analysis of phases I, II, and III show that the benefits realized in the later years of the study period far exceed the annual operating costs.
At page 5 there appears the following statement:
In addition to the benefits listed above, all four phases of the LRIS program support the region's economic development. This benefit takes the form of faster implementation of capital development projects, savings in the costs for interim financing for these projects, and savings in the actual cost of the projects that otherwise could be increased by inflation.
In fact, this decision is, at its worst, a kind of anti-DREE decision-a decision against removing or reducing regional disparity. The fact that the department had an evaluation on its desk a year in advance of this sudden decision by the federal government simply defies the imagination. I think one journalist put it best when he said, when reporting on this, that it is now up to the politicians and other interested parties to howl loudly enough to make Ottawa think twice-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but his allotted time has expired.


Mr. Donald Wood (Parliamentary Secretary to Minister of Regional Economic Expansion):: Mr. Speaker, I am pleased to have the opportunity in this adjournment debate to bring the hon. member for Egmont (Mr. MacDonald) up to date on what the federal government has been spending through the

November 14, 1978
Adjournment Debate
Department of Regional Economic Expansion and what it has really meant to LRIS in particular. First of all, I think it is important to consider and understand what has happened in the past ten years, and then I will bring the hon. member up to date on the present situation as well as on what LRIS may offer in the future.
The federal government commitment in the past ten years was on a 75-25 basis with Ottawa paying approximately $34 million. This means that phase I of the program is practically completed and at the end of the fiscal year, March, 1979, there will be four years remaining in phase II. This means in reality that the legal design for land titles is not complete. More than that, a computer support system design will almost be complete by the end of the fiscal year, so a great deal has been accomplished. Perhaps most important of all, several regional land title offices are ready to be turned over to the provinces. This, in effect, means some very valuable work has been completed and recorded and so will always be there.
In the past few years-and here I want to speak for a moment on a more personal note-I have used the small aerial photos and the larger ortho maps. I grant that in recent years hardly any of those have had the elevation contours on them, but nevertheless these maps were very useful and will be very useful for identifying property and property lines. So in reality there is great value in the money that has been spent.
That brings us up to the present. The work of the LRIS as an agency, as such, will be terminated by the end of the fiscal year, but until that time the federal government will continue to assist as we have been assisting up to this stage, even though there was no agreement since the end of March last year. This will be done through the original source, the Council of Maritime Premiers. Until the Council of Maritime Premiers has had an opportunity to do a full assessment of the valued work done and make a future commitment to land registration,
I think it would be quite improper to influence or perhaps even jeopardize the decision it now had before it.
It is all very well to speak about accomplishments and spending money, but that is only part of the possible termination of LRIS. There are people involved who may lose their jobs. I have talked to many of them as I am sure the hon. member for Egmont (Mr. MacDonald) has, and I am as concerned as he is. The people at LRIS are all professionals, however, and I am confident that individuals of such high calibre will find jobs without too much trouble.
I think it is important to keep a few pertinent facts-


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member's time has expired.


FISHERIES-DEPLETION OF INSHORE LOBSTER FISHERY
Miss Coline Campbell (South Western Nova):: Mr. Speaker, I rise regarding a question I put to the Minister of Fisheries and the Environment (Mr. LeBlanc) on November 9 about the relationship between inshore and offshore lobster fishing, and particularly the closing of Browns Bank pending the outcome

of this study. I do not trust statistics, having seen what they do with the UIC amendments, but the statistics since 1973, which is the first year I have been able to find statistics concerning district 4 offshore lobster fishing, show that the quantity of lobsters caught in district 4 has decreased.
In 1973 we had the first full year of offshore lobster fishing although fishing had commenced in 1972. The percentages of quantity offshore lobsters caught rise quite spectacularly between 1973 and 1977. There were eight boats fishing in that period and 2,800 inshore lobster fishermen who fish in district 4 from the end of November until the end of May under very hard circumstances. People like to eat lobsters and they consider lobster a delicacy. But it is a difficult task for the fishermen who have to go out at the end of November and into December at the beginning of the lobster season. However, the quantity of offshore lobster in comparison to the total quantity fished works out to 7.9 per cent in 1973, for a value of 6.6 per cent of the total catch. I am now referring to total offshore lobster fishing as related to total lobster fishing in district 4.
As I have mentioned, in 1973 the quantity was 7.9 per cent and the value of that quantity was 6.6 per cent. In 1974 the figure is 8.3 per cent of the total lobster catch for a value of 6.8 per cent. In 1975 the figure goes up to 10.3 per cent for a value of 7.7 per cent. In 1976 the figure is 17.8 per cent. In 1977, the figure goes down to 15.08 per cent in total quantity. In 1976 it went up to 13.2 per cent of the total value and came down to 11.2 per cent in 1977. In 1977 the only statistics available covered January to October. When we find out what the total offshore lobster catch was in 1977 I am sure we will find it comes close to that of the previous year.
As I have mentioned, the percentage in quantity of the offshore fishing in relation to the total catch has increased remarkably from 1973 to 1977 with only eight offshore lobster boats operating. At the same time, the inshore lobster fishery, which supports approximately 2,800 fishermen in district 4, has decreased. Starting in 1973 there were 5,299 metric tonnes of lobsters landed. In 1974 the figure was 4,404 metric tonnes, in 1975 the figure was 4,676 metric tonnes, in 1976 3,124 metric tonnes, and in 1977 covering January to October the figure is 2,516 metric tonnes. I have already shown what percentage of the total this is.
I regret we are allocated such a short time. However, the history of this problem between the inshore and offshore lobster fishermen has gone on since the commencement of the offshore fishery late in summer of 1971 with the banning of the sale of swordfish in Canada. The swordfish was banned at that time because of its unacceptable mercury content. As a result, the offshore lobster fishery was set up with only two restrictions. One was that they use lobster traps rather than otter trawls which the Americans used. The second was that they not be aallowed to fish within a 50-mile radius.
November 14, 1978

This was fine at the beginning because they went quite a bit further than the 50 mile line. In fact, they were fishing 125 to 250 miles southwest of Cape Sable Island. Then commercial fishing areas were discovered in the Browns Bank and Baccaro Bank area 50 to 100 miles off the coast and very close to the inshore lobster fishing areas. Last year the eight or nine offshore lobster boats were given a quota in this area of
900,000	pounds or approximately 450 metric tonnes. The same quota exists this year.
It was felt by the department that some quota should be imposed in order to preserve whatever lobster stocks there might be there for the inshore fishermen who fish adjoining and up to the 50-mile limit. With the commencement of the inshore lobster fishery at the end of November, and pending the outcome of the study that was commissioned in 1975 by the minister of fisheries, of which preliminary indications show that there probably is a connection-and Dr. Cady was quoted in a recent article in the Chronicle Herald as saying we have to protect this valuable inshore fishery-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but her time has expired.


Mr. Jack Pearsall (Parliamentary Secretary to Minister of Fisheries and the Environment):: Mr. Speaker, the minister has asked me to express to the hon. member for South Western Nova (Miss Campbell) his personal concern for the inshore-offshore lobster problem. I would advise the hon. member as follows.
The results of a meeting held October 24 to 26 between Canadian and American scientists on the above subject provided evidence, although not 100 per cent conclusive, that an inter-relationship between inshore Nova Scotia lobster and offshore lobster, including Browns Bank, does exist. Also, there is some evidence showing movement of individual lobsters between Browns Bank and Georges Bank.
Evidence shows there is significant larvae production on Browns and Georges and drift patterns of the larvae from Browns inshore. The data lead to consideration of the option to close a portion of Browns Bank to the offshore fleet and at the same time try and move the boundary between inshore and offshore closer inshore to create a closed "spawning stock area".
A firm recommendation from the meeting was the need to raise size limits along the entire eastern seaboard. The Americans will be making public the results of the Canada-U.S. discussions and the Canadian media were informed by a news release on November 6, 1978.
Another conclusion reached at the meeting is that it seems clear that the area east of Cape Sable Island, where the lobster landings are going down, is not affected by any offshore-inshore inter-relationship. Rather, the decline appears to be due partly to over-fishing and partly to a change in the ecology. Evidence shows that kelp beds in that area are being eroded and denuded by sea urchins. The relationship between ecological change in kelp beds and lobster stocks is continuing
Adjournment Debate
to be investigated, but the decline in stocks is clearly not an effect of offshore fishing.
Tagging experiments are being conducted both by federal scientists and by New Brunswick.


The Acting Speaker (Mr. Ethier):: Order, please.


PUBLIC WORKS-CONSTRUCTION OF TAXATION CENTRE AT SUDBURY, ONT.
John R. Rodriguez: Mr. Speaker, on November 3, I raised a question with the President of the Treasury Board (Mr. Andras), regarding the construction of the taxation data centre in Sudbury. This centre was announced in the summer of 1977 after I had raised the matter with the then minister of national revenue, as her letter to me dated July 19, 1977 confirms.
Construction of the centre was scheduled for this fall but, it was announced that because of drafting problems the contract would not be let until next year. I thereupon wrote to the Minister of National Revenue, asking him to end what appeared to be political horsing around with an extremely important capital project in the Sudbury basin. The minister wrote back to me on October 25. His letter stated:
In fact, plans for the proposed Taxation Centre for Sudbury are proceeding. Although originally scheduled to commence operation in the fall of 1980, it has now been deferred until the fall of 1981 due to the recent government financial restraint program. In the meantime, my staff along with employees of Department of Public Works and their private sector architectural and engineering consultants are proceeding with the planning phase, with the intention of calling tenders for the general contract in the summer of 1979, with construction to commence in September or October.
We received a commitment for this taxation data centre. We were promised it would be under construction this fall. That, of course, was when there was speculation that there would be a fall election. Now it has been rescheduled for the fall of 1979. Is it because we must have a spring general election in 1979, that the people of the Sudbury area are in effect being told that if they do not vote the right way they may not get the taxation data centre at all? We do not appreciate that kind of stick and carrot approach.
The fact is, our basin is suffering a viciously high unemployment rate of 11.2 per cent, and in the various trades unemployment is running as high as 80 per cent. Moreover, last fall Inco and Falconbridge gave us a Christmas present, an annouce-ment of some 3,000 lay-offs. Neither Ottawa nor Queen's Park could deal with the reality of mobile capital and resource domination by multinational mining corporations. In spite of the fact that the community was mobilized to petition the government to take action and that specific, positive proposals were made, not a bloody thing was done, not a bloody thing, and these layoffs took place. What a sad commentary on the leadership in this country of ours today. This government was completely immobilized when it came to dealing with unilateral action on the part of multinational mining corporations. Our workers demanded employment but the government turned a deaf ear to them.

November 14, 1978
Adjournment Debate
Now here is a $12 million construction project, the data centre, which would stimulate considerable employment in the area, especially in the trades and construction sector. The President of the Treasury Board has a responsibility to withdraw the freeze on the project. We face a long winter of discontent as it is. Preliminary studies indicate a high correlation between crime among our citizens and the high unemployment rate in the Sudbury basin. The minister must be aware that a plant similar to the one contemplated in Sudbury has been given the green light in St. John's, Newfoundland. As a matter of fact, Lundrigan's Limited has been awarded a contract and work is already started. We know that the cutback program has been alleviated in areas where the effect would be adverse, and that is as it should be. We in the Sudbury basin should be treated in the same way. The government has a most serious responsibility to ensure that every opportunity for employment is made available. That means construction of the data centre now and not next fall after a general election.


An hon. Member:: Great speech, John.


John R. Rodriguez: Those are the realities, brother.


Maurice James Harquail: Mr. Speaker, the hon. member for Nickel Belt (Mr. Rodriguez) indulged in his usual rhetoric tonight. His remarks had nothing to do with drafting and everything to do with accusations of electioneering. He has bootlegged accusations in here this evening. He has spoken about subjects other than the one he put down for the adjournment debate.
This debate does give me an opportunity on behalf of the Minister of Public Works (Mr. Buchanan) to set the record straight. I know from personal experience that the minister has been involved in this matter just recently. He is very seriously interested in the ongoing developments with respect to the Sudbury data taxation centre. Construction was originally
scheduled to begin in the late fall of 1978. The schedule proposed completion of the facility in the late fall of 1980.
During the review of the Public Works Canada program as a result of fiscal restraint, it was decided to delay this schedule by one year; that is, to begin construction in the fall of 1979 with completion in the late fall of 1981. That is the schedule being followed now.
Our analysis indicated that for construction to begin in the fall of 1978 it would be a requirement that Public Works Canada use a system of phased construction. It was also established that if a construction start were deferred until a complete single contract package could be completed, there would be cost savings on the project. This was estimated at approximately $390,000. This factor, coupled with the fact that Public Works Canada would be able to secure interim accommodation to permit the start-up of national revenue operations in 1978 and carry this interim operation through to 1981, led us to conclude that deferral of this project for one year was preferable.
The present schedule for this project calls for tenders to be called in mid-June, 1979 with a construction start in mid-September. This schedule is based on an expenditure of $4 million in 1979-80. Public Works Canada will make every effort to call tenders in mid-April, 1979 and to have construction start in mid-July.
Whether or not this early schedule is possible depends on two factors: first, whether the department can allocate an additional $1 million to the project in the 1979-80 fiscal year; and second, if Public Works Canada and its consultant can manage within the exceedingly tight schedule to complete the contract documents to permit an April tender call.


The Acting Speaker (Mr. Ethier):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until two o'clock p.m. tomorrow.
Motion agreed to and the House adjourned at 10.30 p.m., without question put, pursuant to Standing Order.


END OF VOLUME I