1978-01-24

Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, I rise under the provisions of Standing Order 43. On December 24 last, the office of the Minister of Labour called for the government JetStar to come to Hamilton at about 4 p.m. to take the minister to Sault Ste. Marie. Because of weather conditions they could not land in Sault Ste. Marie and had to land in Toronto. In view of the fact that the exercise took more than six hours, and in view of the fact that the flight crew was denied inflight meal service because of the government's austerity program, I move, seconded by the hon. member for Okanagan-Kootenay (Mr. Johnston):
That the Minister of Transport table in the House the manifest for that flight and a copy of the request for the aircraft, and the statement of government business which necessitated that flight to Sault Ste. Marie on Christmas eve.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDUSTRY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43 concerning an application before the Foreign Investment Review Agency involving a bid by Nordzee, a West Germany subsidiary of Unilever, to take over the Newfoundland fish processing company, Ocean Harvesters. Because FIRA refuses to consider the views of fishermen and the communities directly involved, I move, seconded by the hon. member for Cape Breton-East Richmond (Mr. Hogan):
That this House directs the Minister of Industry, Trade and Commerce and the Minister of Fisheries to intervene with FIRA on behalf of the Newfoundland fishermen to inform that agency of the serious threat to the inshore fishery and the livelihood of the communities involved should this unnecessary foreign takeover bid be allowed.


Mr. Speaker:: The presentation of such a motion can only be done with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ADMINISTRATION OF JUSTICE
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under Standing Order 43. I wish to move, seconded by the hon. member for Marquette (Mr. Stewart), a motion which reads as follows:
That section 24.7 of the Criminal Code relating to kidnapping and abduction and hostage-taking be amended so that where other kinds of violence are involved, such as we see today in the tragic affair in Manitoba, a mandatory sentence of life imprisonment be imposed instead of the discretionary power given a judge to impose sentence "liable to life imprisonment".


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


UNEMPLOYMENT INSURANCE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to introduce a motion dealing with an important matter of pressing necessity.
Since when passing Bill C-52 parliament has recognized the vested right to unemployment insurance before January 1, 1976 of individuals 65 years of age; since before passage of that bill several senior citizens, realizing that the Unemployment Insurance Commission was ignoring the principle of the vested right, applied for pensions from the Canada Pension
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January 24, 1978
Plan or the Quebec Pension Plan; since due to that fact, thousands of aged persons are penalized because the Unemployment Insurance Commission refuses to pay benefits to which they are entitled under the pretext that they have received pensions from the Canada Pension Plan or the Quebec Pension Plan, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the House enjoin the federal government to appeal to the Unemployment Insurance Commission so that the latter reconsider its decision as a result of the glaring injustice now experienced by some 18,000 pensioners and at the same time to introduce legislation which would correct in the shortest possible time the injustice of the Unemployment Insurance Commission toward those senior citizens.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


DEPARTMENT OF SOLICITOR GENERAL
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the extravagant efforts of the Solicitor General (Mr. Fox) to separate himself, his predecessors and the Prime Minister (Mr. Trudeau) from the RCMP and to shift responsibility for alleged wrongdoing from the government, and in view of reports that the Solicitor General recently purchased three paper shredding machines and is considering ordering others, I move, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That this House directs the Solicitor General to divest himself of any and all paper-shredders now in use in his department and orders the Solicitor General, or preferably his executive assistant, to assure the House that this is absolutely the last instance in which he will allow the purchase and use of paper-shredders for his files.


Mr. Speaker:: Such a motion can be presented for discussion only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
[Mr. Allard.)


IMPLEMENTING OF HALL COMMISSION RECOMMENDATION TO CLEAR EXPORT BOTTLENECKS-MOTION UNDER S.O. 43
Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, I rise under the provisions of Standing Order 43. Net farm income from grain is down, and over 20 million bushels of west coast grain exports have been shipped behind schedule. This annual winter foul-up has once again cost us millions of bushels in exports, the farmers millions of dollars in demurrage costs, and it has jeopardized future trade with our important Asian customers. I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That the minister responsible for the Canadian Wheat Board be instructed to implement the recommendations of the Hall commission forthwith with a view to straightening out west coast export grain bottlenecks.


Mr. Speaker:: Such a motion can be presented for discussion at this point only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


UNEMPLOYMENT INSURANCE COMMISSION
Mr. Derek Blackburn (Brant):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of very pressing and urgent necessity. In view of the fact that Unemployment Insurance Commission regional maps with respect to minimum attachment qualifications are terribly outdated, and in view of the fact that my riding of Brant, for example, is listed as having only 7.1 per cent unemployment when in fact the rate is about 15 per cent-a human and economic tragedy in itself-I move, seconded by the hon. member for Northwest Territories (Mr. Firth):
That the Unemployment Insurance Commission scrap its outdated 16 regional boundaries and immediately introduce realistic attachment qualifications that accurately reflect current unemployment in any specific location in Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


RAILWAYS
Mr. William Knowles (Norfolk-Haldimand):: Mr. Speaker, I wish to move a motion under the provisions of Standing Order

43 on a matter of urgent public necessity. In view of the fact that Canadian National Railways is further curtailing essential rail services in southern Ontario, as now evidenced by the closing of the Caledonia station and the dismantling of train order signals at that station as of December 30, 1977,1 move, seconded by the hon. member for Halton-Wentworth (Mr. Kempling):
That the whole matter of deteriorating rail service in southern Ontario be referred to the Standing Committee on Transport and Communications for the hearing of evidence in this matter and reporting back to the House of Commons.


Mr. Speaker:: The presentation of such a motion pursuant to Standing Order 43 can be made at this time only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Prime Minister and it refers to reports of a Soviet satellite which apparently descended in the Great Slave Lake area today. We understand that the Prime Minister was advised of this matter by an early morning telephone call from the President of the United States.
This seems to raise a very important question touching Canadian sovereignty. Canada is supposed to be an equal partner in the NORAD arrangement which would be surveying the movement of this kind of vehicle into Canadian orbit. Since Canada is an equal partner in NORAD, why was the Prime Minister of Canada not advised by Canadian officials about this penetration of Canadian territory; and if he was not advised by Canadian officials, does that indicate that the only way Canada becomes informed of possible threats to itself is by telephone calls from American officials?
[DOT] (M17)


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I regret to inform the Leader of the Opposition that his facts, as sometimes happens, are completely wrong. As to the equal partnership, when I visited the NORAD centre at Colorado Springs in December, the officials there, both the commander-in-chief and the deputy who is a Canadian, were extremely forthcoming in their giving of information to Canada about their surveillance in space of such objects.


Mr. MacDonald (Egmont):: How about answering the question?
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, I understand there was an allegation that there was no equal partnership. I am explaining that there was an equal partnership. In so far as being informed about this particular instance of an orbit out of control, of course I was advised several days ago by Canadian officials that there was knowledge that there was a satellite out of control, that it was tumbling through space, that we were jointly, with the Americans, at NORAD monitoring its path, and if it became apparent that it might land in Canada, we would know and would let the Americans know and we would be in a position to take whatever preventive action was necessary.


Charles Joseph Clark: A supplementary question, Mr. Speaker. If the Prime Minister and the Government of Canada were advised several days ago, I presume they would have taken some action to prepare Canadian experts who might have been interested in this descent into Canadian territory. Could the Prime Minister tell the House precisely what arrangements and preparations were made by Canadian officials? Could he tell the House what Canadian experts are now on site in the Northwest Territories looking at this matter, or are all the investigations in this matter being left to the Americans?


Pierre Elliott Trudeau: No, Mr. Speaker, I am afraid the supplementary question is just as badly informed as the first question. As soon as it became apparent that the satellite might land in Canada, the federal government took several preventive measures, including contacting people at the highest level in the provinces concerned with civil defence. But, once again, there was not at the outset, an identification of the area where the landing might take place. One hour before the landing, I understand it was still possible it might have landed in the southern hemisphere rather than the northern hemisphere.
Obviously, we did not want to alert every square inch of territory in Canada where something might land. We took whatever preventive actions were necessary in order to let us act quickly as soon as the landing site had been precisely defined. When that was established, our officials knew right away. The President of the United States telephoned me around seven o'clock this morning and said they had it on their radar and it was about to land, and he indicated where he thought the landing would be. Of course, we were having the same approximate-


An hon. Member:: Why? Did Canadians take any action?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. gentleman over there has a supplementary question, you might want to recognize him later. The real reason the President of the United States telephoned me was to offer to the Canadian forces, should they need it, airborne detecting devices for any possible radioactivity. That was a fair offer, and I undertook to see if it would be needed. I understand that the Minister of National Defence carried on from there, and that our own experts are involved in the detection process.


Charles Joseph Clark: Mr. Speaker, the Prime Minister has replied with his usual evasive generalities.
80027-68^2

January 24, 1978
Oral Questions


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Hon. members on the other side can continue to try to shout me down. The question was put, and the Prime Minister did not answer it except to say that Canadians are involved, which is a very general statement. The question was whether there are Canadians en route to the site or are on site-that question was not answered-or whether we are leaving this matter to the United States. The matter I now want to turn to is this. We seem to have a very curious system here in relation to NORAD.
We seem to have a system that requires the President of the United States to call the Prime Minister of Canada when there is some decision made as to where an object is going to fall.
Will the Prime Minister not only give us a general assurance, now, that the system is more secure than that, but will he check and make a direct report to this House to assure the House of Commons-it is very difficult, sir, to speak over the shouting from the other side of the House. I know they are developing a deliberate tactic of trying to shout down the opposition.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: I can stand through this Liberal catcalling for some time, Mr. Speaker. I would like to ask for an undertaking from the Prime Minister that there is a system more efficient and less demanding upon Presidents and Prime Ministers when an event of this kind occurs. I ask, in addition, that there be a direct means whereby the Canadian chief of government or the minister of national defence is advised, by Canadians, of a potential infringement of Canadian sovereignty and soil, rather than relying upon the President of the United States to awaken the Prime Minister with this kind of information.


Pierre Elliott Trudeau: Mr. Speaker, I find the attitude of the Leader of the Opposition somewhat puzzling. His first assumption was that it was not an equal partnership and that we were only informed for the first time at seven o'clock this morning by the President of what was about to happen-


An hon. Member:: You did not deny it.


Pierre Elliott Trudeau: This is presumably the way in which he chooses to conceive relations between the two governments in NORAD. My first answer was to put clearly to him that 1 had been informed several days ago by Canadian officials. Indeed, members of the Department of National Defence have been on standby for a week for just such an eventuality.


An hon. Member:: Skiing in Aspen with you?


Pierre Elliott Trudeau: It could not be more clear, Mr. Speaker, that Canada was informed as soon as the landing became probable. The objection now seems to be that the President of the United States chose to phone me around seven o'clock this morning. I

can understand why the Leader of the Opposition does not understand that kind of thing. It seems to me that this is the kind of courtesy which probably escapes members of the Tory party.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: But, Mr. Speaker, I find it strange that we would fault the President of the United States for choosing to phone me to offer co-operation in such an important matter, when the thesis of the Leader of the Opposition is that it should be a co-operative approach.


Charles Joseph Clark: Mr. Speaker, the Prime Minister continues to try to evade a very simple question. The question is: Why did Canadians in this partnership not advise the Prime Minister of the final descent on to Canadian soil of a Soviet satellite? Why do we rely on the Americans in this matter? Let me ask one other question. The Prime Minister might be able to answer my question if his backbenchers ceased shouting at us from across the way.


Mr. Speaker:: Order. The hon. Leader of the Opposition.


Charles Joseph Clark: Sir, can the Prime Minister inform the House of Commons as to the method of disposal of the debris from the satellite? Is it the intention of the government of Canada to turn that debris over to the U.S.S.R.?


Pierre Elliott Trudeau: Mr. Speaker, these matters are dealt with in an international treaty which states that the country which is the launcher and owner of the satellite is responsible for the damage caused.
We will have to establish what damage there was, if any, and what operations have to be embarked upon in order to make any possible unsafeness safe. Then we will be able to ask the Soviets-


Charles Joseph Clark: That is not the question, Mr. Speaker. The Prime Minister is having trouble with the question.


Pierre Elliott Trudeau: I am not having trouble.


Charles Joseph Clark: The question related to the debris.


Pierre Elliott Trudeau: Mr. Speaker, it is entirely possible that the satellite burned itself out in its re-entry and there is no debris. That is entirely possible. I think it is reasonable to answer the question by saying that we will first establish if there is debris. Second-


Charles Joseph Clark: I suggest you ask Jimmy Carter.


Pierre Elliott Trudeau: -what possible damage might have been caused by the debris, and third, what possible action is needed in order to remove this adverse effect. Then it would be reasonable to address ourselves to the Soviets and say there is debris; second, there is damage, and third, "What are you going to do about it?"


Some hon. Members:: Hear, hear!
January 24, 1978


INDUSTRY
John Edward Broadbent: Mr. Speaker, I would like to bring the Prime Minister back to earth. The Deputy Prime Minister said in Ottawa on September 9 that 100,000 man-years of employment would be created-that is a phrase right out of his press release-not "might be" or "could be", but would be created in Canada as a direct result of the construction of the Alcan pipeline. When we asked an officer of the pipeline company what this figure was based on, we were told it was based on the assumption that Canada would produce 98 per cent of the pipe for the Canadian section of the pipeline.
My question to the Prime Minister is as follows. Considering that the Deputy Prime Minister yesterday, both in the House and, if I understood it correctly, outside the House, withdrew the government's promise to produce 98 per cent of the pipe in Canada, and therefore withdrew entirely the very specific commitment to produce the 100,000 man-years of employment which he categorically promised on September 9, does this turnaround by the Deputy Prime Minister reflect government policy?


Pierre Elliott Trudeau: Mr. Speaker, the leader of the New Democratic Party persists in seeing a contradiction between the reality of what we said-


John Edward Broadbent: There is a contradiction.


Pierre Elliott Trudeau: This is based on an assumption by the leader of the New Democratic Party that if there is a good piece of news for Canada, such as the construction of a pipeline which will involve spending some $3 billion or $4 billion on construction work in Canada, he must make sure that the down side of that good news happens, so that everyone will be convinced that the good news is not happening.
Some bon. Members: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, it should be a cause of satisfaction to every Canadian that this very important pipeline will be built and that the Foothills part of it will be built in Canada, by Canadian companies, and that it will be calling for Canadian content for that building. I can understand the leader of the New Democratic Party wanting to get some guarantee that Canadian businessmen and Canadian workers-


John Edward Broadbent: You gave the guarantee. You gave the promise.


Pierre Elliott Trudeau: Yes, Mr. Speaker, we negotiated an agreement with the United States according to which both countries, for the part of the pipeline built in their territory, would assure the maximum content for their country. We did not ask that the Americans guarantee that we would not be able to bid on their part of the pipeline, that if Canadian technology and Canadian materials were more competitive they would keep us
Oral Questions
out of their territory, because we have confidence in the future of the Canadian entrepreneur and the Canadian worker. That is our position.
Some bon. Members: Hear, hear!


Pierre Elliott Trudeau: Surely, in a joint operation like this, we have to be consistent. If we get a guarantee from the Americans that they will not bid on our section, then we have to give an equal guarantee. We did not want to give that guarantee, because we have confidence that we can compete with any other producer.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, the Prime Minister took two minutes not to deal with the question at all. What is at stake here is the integrity of the government regarding a categorical promise made by the Deputy Prime Minister of Canada in Ottawa on September 9. The Deputy Prime Minister said that we were going to get 100,000 man-years of employment. He broke it down into three subsections. I will not repeat the figures that he gave. He did not say that we might get them, we could get them, or it would be dependent upon the situation: he said that Canada would get 100,000 man-years of jobs. Is that the situation, or is it not? Yesterday, in the House, the Deputy Prime Minister seemed to withdraw entirely that commitment made by the government on September 9.


Pierre Elliott Trudeau: Mr. Speaker, I would say the same: we will get that many jobs, and probably we will get more if we can compete in the United States section.


Charles Joseph Clark: Always conditional.


John Edward Broadbent: Mr. Speaker, any doubt about the betrayal has now been cleared up. We now know we do not have a commitment to get jobs.


Some hon. Members:: Oh, oh!


John Edward Broadbent: Would the Prime Minister agree that practically the only benefit Canada was going to receive as a result of the Alcan pipeline was the jobs? If he would agree with that, would he also assure the House with regard to stories going around suggesting that Canadians have yielded to American pressure to change the kind of pipe required to build the pipeline? That will exclude many Canadians from the kind of jobs the government promised. The Prime Minister committed the government in order to get public support for this major project.


Pierre Elliott Trudeau: Mr. Speaker, we did not need public support. We had the support of the New Democratic Party, the Progressive Conservative party and the Social Credit party.


John Edward Broadbent: On the condition there would be jobs.

January 24, 1978
Oral Questions


Pierre Elliott Trudeau: This pipeline was envisaged as the right pipeline for Canada, at the right time, in the right way. The NDP voted for it.


John Edward Broadbent: We have not had a vote yet.


Pierre Elliott Trudeau: That discussion took place in the House of Commons early last August, when the New Democratic Party indicated that this was the proper course to take, and the government took it. Within a short time, the government successfully negotiated a contract with the United States government which indicated that each side would seek the maximum amount of content for the section constructed in its own country. This was a decision taken by the governments. The Canadian government does not intend to own the steel mill. It does not intend to take the steelworkers unto its bosom. We are now turning to the private sector and asking if it can produce effectively, compete and build a pipeline in Canada. The private sector is indicating that it can. We have faith in the entrepreneur and the worker. Therefore, we have faith that the agreement we signed with the Americans is one which will result in great benefit to Canadians. The hon. leader of the New Democratic Party does not seem to have that faith in the future. We do.


Some hon. Members:: Hear, hear!


ROYAL CANADIAN MOUNTED POLICE
Mr. Rene Matte (Champlain):: Mr. Speaker, I would like to put a question to the right hon. Prime Minister.
Although the Solicitor General had formally stated that the RCMP had done nothing illegal other than those acts concerning events which took place in 1972 and 1973, last January 9 he disclosed another act by that police force as incredible as having made a public announcement in 1971 in the name of the FLQ. Would the Prime Minister tell us if he can give the House absolute assurance that no illegal or irregular act has been done by the RCMP before 1971 in relation to the terrorist activities that have been committed in Quebec?


Pierre Elliott Trudeau: Mr. Speaker, if I could give the House an absolute assurance of that, there would have been no need for instituting a commission of inquiry. We have established such a commission so that indeed it could inquire on this police force and find out whether or not other illegal acts have been committed by the force and finally make its findings public, at which time the hon. member will be satisfied.


René Matte: I would like to ask a supplementary question, Mr. Speaker.
Since the Prime Minister seems to show some good will, would he tell the House if he will change his mind about the

federal government cooperating with the Keable inquiry on the operations of the RCMP related to terrorist activities in Quebec?


Pierre Elliott Trudeau: Mr. Speaker, we did cooperate, we have made several depositions and we have handed back a whole series of documents to the Keable Commission. We have stated before the courts that this commission of inquiry should look into problems related to the administration of justice within the province of Quebec and not turn it into an inquiry on a federal institution. Just as the hon. member certainly does not believe that the federal government would be entitled to establish a federal commission of inquiry on, say the school system within the province of Quebec, so do we not think that a provincial commission of inquiry, either from Quebec, Ontario or Alberta, should lead an investigation on a federal institution as such.


NATIONAL DEFENCE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, this is a very happy day. It reminds me of March and April of 1957, when one after the other, opposition speakers were howled down as the hon. Leader of the Opposition was today and two months later the government went out.


Some hon. Members:: Hear, hear!


John George Diefenbaker: We have witnessed a disgraceful performance today on the part of the government.


An hon. Member:: Right on.


John George Diefenbaker: I direct a question to the Minister of National Defence and ask him what time this morning he became aware of the fact that this satellite had, in fact, exploded over Canadian soil.


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I have been aware of the satellite being out of orbit for the best part of a week.


John George Diefenbaker: At what time today?


Barnett Jerome Danson: My officials have known this was possible since December. I knew around seven o'clock or 7.15 this morning when my officials called to let me know that it had re-entered the atmosphere on Canadian soil.


John George Diefenbaker: Mr. Speaker, is the minister in agreement with the description of this satellite as it was given a few moments ago by Associated Press in the United States, as a military spy satellite?


Some hon. Members:: Oh, oh!
January 24, 1978


John George Diefenbaker: Does he accept that? Why was the announcement of what had taken place made in the United States, and not in Canada? When I was prime minister-


Some hon. Members:: Oh, oh!


John George Diefenbaker: Mr. Speaker, I do not mind being howled down. I would again remind government members that what happened in 1957 is going to happen again this year.


Some hon. Members:: Hear, hear!


John George Diefenbaker: I ask the minister why the announcement was made in Washington and not Ottawa, where it should have been made.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: Mr. Speaker, first, I remember what happened to our relationships with the United States and other countries during that period of time.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: It is not what I would describe as a spy satellite. It is a surveillance satellite, a radar-type satellite.


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: If my friends over there want to laugh and howl down this side, they can do it all they want. But if they are interested in the truth, I will give it to them. Everybody has surveillance satellites to check on their fleets, on search and rescue, on the position of ships, and on pollution. That is part of the peaceful use of satellites. We co-operate with all nations of the world, and in our co-operation we maintain the peaceful use of satellites with our allies in NATO and in NORAD. There is complete communication going on at all times. It is not a matter of making announcements or not making announcements.
In the words of the press in Canada, it was ten minutes. This is not a great deal of time, but things happen very quickly with satellites, as my friends over there might begin to learn after a while. The announcement to the press here was made prior to the announcement made to the press in the United States. That was done in full understanding with the United States, I must say. Action is taking place because we have continuous co-operation. It is not a matter of who asked who, what. We are working together as a partnership and as a team, and it is working very well.
We are accepting the assistance offered by the United States government with four aircraft which are either on their way or in Edmonton now, or on their way to the site. We have our own full team of 23 anti-nuclear, anti-fallout people in Yellowknife ready, on the job, to render whatever assistance they can on the remote chance that particles from the satellite have penetrated the atmosphere. In most cases they burn up and dissipate in the atmosphere. There may be some indication
Oral Questions
that some have landed. Our troops are ready; they are on the job. We have nuclear alert teams on the job-


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


John George Diefenbaker: It is all very well to talk about co-operation. We also have co-operation with Cuba.


Some hon. Members:: Oh, oh!


John George Diefenbaker: I will repeat my question to the minister. Why was this announcement not made from Ottawa, where it should have been made?


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: I repeat that the announcement, if you can call it an announcement, the information which the press was given in Ottawa, was given here before it was given in Washington. I held a press conference as soon as possible, as soon as we could bring the press together. They were in my office this morning, where I gave them as much full and frank information as I could, and I shall continue to do so.


Some hon. Members:: Hear, hear!


Mr. Paproski:: You knew about it a week ago.


U.S.S.R. DEVELOPMENT OF NUCLEAR PLANTS VIS-A-VIS WESTERN WORLD
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question, also, is for the Minister of National Defence. Reports about the satellite which descended in the Great Slave Lake area indicate that it was nuclear-powered while in flight. Can the minister inform us if this is to be taken as an indication that the Soviet Union is ahead of the western world in the development of small nuclear plants?


Barnett Jerome Danson: No, Mr. Speaker.


Allan Bruce McKinnon: Can the minister inform us if the power plant in use in Cosmos 986 is equivalent to, or ahead of, the Slowpoke which is being developed by Canadian scientists,? Also, could he tell us-the Prime Minister dodged this question, and when he dodges questions usually there is a reason- whether, as the minister says, on the remote chance that debris is found, and the international agreement covering it requires that Canada return such debris to the U.S.S.R., it is our intention to do so?


Barnett Jerome Danson: I cannot at this time give a relative assessment of the nuclear power plants on different satellites. I must say that if there is debris on the ground, we would want to contain it or preserve it and seal off the area. We will look after the safety of Canadians first and then we will determine what is required under the international regime. The most important

January 24, 1978
Oral Questions
point to which we have to address ourselves is the safety of Canadians and our sovereignty.


REPORTED INCREASED NATURAL GAS SUPPLIES-EFFECT ON CONSTRUCTION OF NORTHERN PIPELINE
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the Prime Minister based on recent news reports with respect to additional gas supplies and accelerated or additional gas exports from Alberta to the United States. Can the Prime Minister inform us how long the government has been aware of this situation, which may merit slowing down the pace of construction of the northern pipeline, or may necessitate the prebuilding of the southern portion of the pipeline in order to facilitate additional gas exports to the United States? Did the Prime Minister discuss this issue with Vice-President Mondale when they met last week? If so, with what result? Was any agreement reached?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, if I may answer the question, I would say yes, there was discussion with the vice-president on this question and there was agreement on the part of both governments that it might be very useful to prebuild a section of this pipeline using some of the gas bubble at present for that purpose, provided-it is a very important proviso-there is a swap arrangement giving Canadians a call on Alaskan, American gas at a later date. The other proviso is that the regulatory authorities of the province of Alberta and of the federal government fully endorse such a swap.


Erik Nielsen: Can the President of Privy Council inform the House whether the prebuilding of the southern section was discussed during the September negotiations regarding the pipeline agreement, and whether the delay in bringing the pipeline legislation before the House is because it had been submitted to the government of Alberta for their observations and suggestions? Is this one of the reasons for the delay in the legislation coming before us?
Hod. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council): No, Mr. Speaker.


Erik Nielsen: I have a final supplementary question, Mr. Speaker. Can the President of Privy Council tell us why Canadians were denied knowledge of the possibility of prebuilding this pipeline, since no mention of the subject was made in the government's news releases, despite the fact that the U.S. President's decision and report to Congress concerning the same topic makes repeated mention of the possibility of prebuilding? When he answers that question, could he assure us that all the appropriate governments and agencies, including the native organizations, will be consulted before a final decision is made on this specific question?
[Mr. Danson.l


Alastair William Gillespie: Mr. Speaker, I think it was made quite clear to Canadians, and indeed to the House of Commons before we debated the issue, by the National Energy Board in its report, "Reasons for Decision" with respect to a national northern pipeline, namely, that the swapping option, the prebuilding option and the predelivery option were all options which could be considered against a background of a northern pipeline program.


LABOUR CONDITIONS
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. In view of the fact that last Friday the minister met with provincial mines ministers in Toronto, and in view of the fact that in exactly three weeks from today 3,000 Canadian miners and smelter workers will be laid off in Thompson and in the Sudbury basin, can the minister tell the House what specific steps he proposed, if any, or what specific proposals he and the mines ministers discussed to avoid this catastrophic lay-off in the Sudbury basin and in Thompson, Manitoba?


Alastair William Gillespie: Mr. Speaker, I am sure the hon. member is well aware of the fact that the conference of mines ministers was called to look at medium-term prospects for the mining industry and how it would be possible for mines ministers to restore confidence in the mining industry. The hon. member has pointed to one of the very significant but disturbing aspects of the mining industry today, a decision which might be followed in other mines across the country during the course of this year. Development of the mining industry will require a long lead time. The ministers looked at a number of questions which in their separate jurisdictions they may be able to address for the purpose of reporting to their first ministers for the February 1 ministers' meeting.


John R. Rodriguez: In view of the statement made by the minister, that in effect they discussed potential mine lay-offs, can the minister identify, for the information of the House, the people of Canada and of the workers involved, what those potential mine lay-off areas are?


Alastair William Gillespie: Mr. Speaker, the hon. member knows there have been weakening markets in copper and, to some extent, zinc. I am pleased to say that so far as lead molybdenum, potash and uranium in particular are concerned, there are very strong markets at present. However, because of the world situation at the present time, some metal markets are undergoing a period of weakness. Zinc and copper are two of those. These are matters which we have been examining.
January 24, 1978


John R. Rodriguez: Mr. Speaker, in view of the statements by the minister and his aides prior to Christmas regarding the fact that stockpiling had not been completely eliminated from the government's arsenal to deal with lay-offs in the mining industry, and in view of the fact that a recent report from the Department of Energy, Mines and Resources indicates optimism for the future of the nickel industry, can the minister tell the House if he has made to the cabinet a recommendation of short-term stockpiling of nickel? If he has, what is the decision? If he has not made such a recommendation, why not?


Alastair William Gillespie: Mr. Speaker, this question has been asked in this House in the past, and the answer has been that stockpiling would not solve the problems of the nickel industry of this country at the present time. I can tell the hon. member that there was no support, that I detected, from mines ministers for a stockpiling program for metals, minerals or mines that were in difficulty.


John R. Rodriguez: Mr. Speaker, a final supplementary.


Some hon. Members:: No.


Mr. Speaker:: Order, please. The hon. member for Windsor West.


PRICE OF ALASKA GAS COMPARED WITH CANADIAN GAS EXPORTED TO UNITED STATES
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. If and when Canada buys Alaska gas as part of a swap arrangement, will it be at prices equivalent to those Canada will get for natural gas it will have sold previously to the United States, or will the arrangement mean that Canada will be paying higher prices for Alaska gas than those it received for equivalent quantities of Canadian natural gas exported to the United States?


Alastair William Gillespie: Mr. Speaker, I think I have reassured hon. members in the past that with respect to the pricing under swapping arrangements, Canadian interests will be preserved. I think the best way to preserve Canadian interests would be to ensure that any transfer of energy takes place on the basis of real values, not nominal values.
Oral Questions INDUSTRY


INQUIRY WHETHER SHIP TO REPLACE LOST CN VESSEL WILL BE BUILT IN CANADA
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. Inasmuch as officials of the Ministry of Transport are now in Europe looking for a vessel to replace the Canadian National ship lost off the coast of Labrador and Newfoundland last year, can the minister indicate whether that accurately reflects the position he announced two weeks ago with respect to aid for the shipbuilding industry? If so, can he relate the two positions?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, in this regard the Department of Transport is examining shipping costs and the cost of replacing a ship which served the east coast. The figures are comparable. We must compare what it would cost to purchase, with what it would cost to build.


J. Michael Forrestall: Mr. Speaker, can the minister indicate what action his department has taken to determine the capacity of Canadian yards to construct a vessel within price ranges which are not significantly different? In other words, has he canvassed Canadian yards? Has he asked Halifax shipbuilders, for example, whose yards are about ready to shut down, whether they have the capacity?


John (Jack) Henry Horner: Mr. Speaker, we are assured by the Halifax shipyards and a number of others that they have the capacity. That is why we announced a 20 per cent subsidy on all ships built between now and the end of October, 1978. We certainly encourage shipbuilding to be done in Canadian yards and that they take advantage of that subsidy.


ADMINISTRATION OF JUSTICE
Mr. Craig Stewart (Marquette):: Mr. Speaker, 1 would like to direct a question to the acting Solicitor General or the Minister of Justice. Is the Solicitor General in communication with the commissioner of the RCMP regarding the tragic affair in Manitoba, and has he any comforting information to give to the House?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, the Solicitor General is in communication with the commissioner regarding the situation in Manitoba, which at the moment appears to be stable. I am sure the hon. member and this House join me in expressing sympathy to the family of Constable Onofrey who died in the course of his duty of protecting society as a police officer.


Some hon. Members:: Hear, hear!

January 24, 1978
Oral Questions


Hon. Ron  Bastard@Minister of Justice: The special emergency unit of the RCMP is in control of the situation. I do not think I can report very much more at this point.


CAPITAL PUNISHMENT
Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, I have a question for the Minister of Justice. Since the legislation of this government abolishing capital punishment has obviously resulted in an increase in capital murder-


An hon. Member:: That is not true; the rate has gone down.


Almonte Douglas Alkenbrack: -particularly the murder of police officers, will the minister immediately bring in legislation amending the Criminal Code to reinstate capital punishment, which is the ultimate, permanent and effective deterrent to capital crime?


An hon. Member:: Boo!


An hon. Member:: Nonsense.


Hon. Ron  Bastard@Minister of Justice: Mr. Speaker, I have already indicated the answer to that question, which is no. I have made recommendations to my colleagues, and they have been accepted, that in the next round of Criminal Code amendments upon which I am working the penalty for abduction be increased.


NATIONAL DEFENCE
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is to the Minister of National Defence. In view of the fact that the Canadian government has accepted the suggestion of the American government to let American planes fly in Canadian air space, has the minister given specific instructions to aircrews and to those in charge of the aircrews that when and if debris is found, it is solely under Canadian sovereignty and only Canadians will examine it?


Barnett Jerome Danson: Mr. Speaker, those instructions are not necessary. That is understood. The aircraft which are coming from the United States are being staged out of Edmonton at our regional control centre which is under the control of our air command. It is likely that the surveillance pods which will be used will be on our Hercules aircraft. That is not certain at this moment, but they will be under Canadian control. The high surveillance aircraft will be operating out of the same centre. Control is the

responsibility of our own command and our sovereignty is, of course, fully recognized.


Francis Alvin George Hamilton: Am I to
understand that if debris is found, under no circumstances will representatives of a foreign power be allowed to examine it? Is that instruction very clear? The minister said it is understood. Is it absolutely understood and made very clear in the instructions?


Barnett Jerome Danson: Mr. Speaker, they are operating under our control. We are not dealing with a belligerent power; we are dealing with people who are working with us. I cannot give the assurance that they will not be allowed to look or touch. If they can be of assistance to us in this role, of course, that assistance will be accepted. However, no specific instructions have been given by me. If it would make the hon. member feel any better, I would be pleased to give them. But that is not the object of the operation; the object of the operation is to reduce the amount of damage that can be done to Canadians, to our environment and to our wildlife.


ENVIRONMENTAL AFFAIRS
Benno Friesen: Mr. Speaker, my question is to the Minister of State (Environment). In the months of October and November of 1974 I posed a series of questions to the former minister of the environment and asked for the tabling of contingency plans in the event of a major oil spill on the west coast. The former minister assured me, as recorded in Hansard of November 6, 1974, that plans in the Vancouver area were very adequate and, in fact, computerized. Now I find that a consultant to the GVRD says that no government agency is capable of a major oil clean-up. Can the minister explain the disparity in those two accounts?


Hon. Len Marchand (Minister of State (Environment)):: Mr. Speaker, it would take a little more time than I am allowed in the question period to explain that matter. Perhaps the consultant means that no single agency is capable of handling any major oil spill. We work with the United States, the Department of National Defence and a number of other groups in dealing with major oil spills and with the supply of materials. I assure the hon. member that we can deal effectively and quickly with oil spills on the west coast, and on the east coast as well.


Benno Friesen: Mr. Speaker, the consultant also said that these plans are merely policy guidelines and are not active plans. Can the minister explain that?


Len Marchand: I have not read this particular consultant's report. I will look at it. We have plans.
January 24, 1978


An hon. Member:: Have you read them?


Len Marchand: On occasions when we have had to put them to the test, such as the Stevenson oil spill and others, we have shown that we can deal effectively with oil spills; perhaps not as adequately or perfectly as we would like, but we have a pretty good capability.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Mr. Fernand E. Leblanc (Laurier):: Mr. Speaker, I have the honour to table the first report of the Standing Committee on National Resources and Public Works and, with the consent of the House, I intend to move its adoption some time today.
# * *


ELECTORAL BOUNDARIES READJUSTMENT ACT
Mr. Gerard Loiselle (Saint-Henri) moved: for leave to introduce Bill C-415, respecting the Electoral Boundaries Readjustment Act (Saint-Henri-Westmount).
He said; Mr. Speaker, the purpose of this bill is to have the name of the Saint-Henri riding changed to that of Saint-Henri-Westmount. The reasons for adding the name of Saint-Henri-to that of Westmount date back to the seventeenth century. The Saint-Henri area was already in existence and is an integral part of the history of Montreal.
Moreover, we must pay particular attention to the industrious population of the Saint-Henri, some 23,000 strong, which is delighted to join the new Westmount riding.


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

Hon. Jean Chretien (Minister of Finance) moved: that a ways and means motion to amend the Income Tax Act, laid upon the table on Monday, January 23, 1978, be concurred in.


Mr. Speaker:: Does the House agree with such a motion?


[Stage Direction]
Motion agreed to.
Order Paper Questions QUESTIONS ON THE ORDER PAPER
(Questions answered orally are marked by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 110, 111, 164, 200, 219, 296, 330, 331, 334, 361, 449, 455, 459, 477, 547, 558, 695, 708, 755, 899, 909, 924, 977 and 978.


PERCENTAGE OF CONSUMER EXPENDITURE ON FARM PRODUCED FOOD
Mr. Herbert: In each of the past five years, what percentage of consumer expenditure on Canadian farm produced food was (a) farm value (b) marketing costs?


Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Statistics Canada does not collect data on the farm value and marketing costs as a percentage of consumer expenditure on Canadian farm produced food.


PERCENTAGE OF DISPOSABLE INCOME EXPENDED ON FARM PRODUCED FOOD
Mr. Herbert: 1.	In each of the past five years, what was the percentage of personal disposable income expended by the consumer on Canadian farm produced food?
2.	For the last year for which figures are available, what were the comparable percentages in (a) the United States (b) Great Britain (c) France?


Bernard Pierre Loiselle: 1. Statistics Canada does not collect data on the percentage of personal disposable income expended on Canadian farm produced food.
2.	Not available.


AR-15 SEMI-AUTOMATIC RIFLE
Mr. Friesen: 1.	Did the Minister of Justice, through joint consultation with the RCMP and various police forces in Canada, have the AR-15 semi-automatic rifle placed on the restricted weapons list by Order-in-Council, effective April 1, 1977 and, if so, for what reason?
2.	Was the AR-15 specifically designed and manufactured for use by U.S. troops during the Vietnam War?
3.	Did the Canadian Penitentiary Service order and receive some eight hundred and twenty-two, .223 calibre AR-15 from Colt Firearms of Hartford Connecticut and, if so (a) for what reason (b) what, if any, were the required specifications (c) for what reason was CPS exempted from the April 1, 1977 Order-in-Council?
4.	Is there another weapon that meets CPS specifications and is not on the list of restricted weapons?
5.	What are the technical and ballistic characteristics of the AR-15?
6.	(a) How many AR-15 are presently stocked by all government agencies (b) what is the breakdown by agency?
7.	Does any government agency or department have immediate plans for purchasing further AR-15's and, if so, which agencies and departments and in what quantities?

January 24, 1978
Order Paper Questions


Yvon Pinard: I am informed by the Departments of Justice, National Defence and the Ministry of the Solicitor General as follows: 1. Yes. This decision was taken by the government because it is of the view that the AR-15 has no legitimate sporting use and is closely modelled along military lines. It was felt that weapons of this kind should not be readily available to anyone, and that control should be exercised over those who possess them.
2.	The Department of Justice is informed that the AR-15 is the commercial predecessor of the Colt M-16 and M-16A1 rifles, both of which are fully automatic weapons developed from the AR-15 design and manufactured for the use of U.S. troops during the Vietnam war.
3.	Yes. It is pointed out, however, that the name of supplying firm is Colt Industries, not Colt Firearms, (a) To meet an objective in standardization, (b) Requirements were for a semi-automatic rifle capable of withstanding rigorous handling, rather simple to operate and service, lightweight, convertible to calibre .22 inches for training with a resulting economy for ammunition, and medium range, (c) At the time of purchase the Colt AR-15 was not on the list of restricted weapons.
4.	Not within the context of the requirements as laid out in 3(b).
5.	The technical and ballistic characteristics of the Colt AR-15 are as follows: Calibre-.223 (Remington); Barrel-20 inches; Weight-1'A pounds; Length-38% inches overall; Stock-reinforced polycarbonate with buttstock stowage compartment; Sights-front: post, rear: adjustable for wind and elevation; Magazine-5-round detachable record pad; Muzzle velocity-3,250 feet per second; Muzzle energy-1,280 feet per pound; Flash suppressor, sling and swivels.
6.	(a) See Part 6 (b). (b) National Defence-2; Canadian Penitentiary Service-822.
7.	The Canadian Penitentiary Service will be purchasing additional quantities of this rifle as new major institutions come into operation; this will occur in 1978 and subsequent years. National Defence-No.


CRTC-PERSONS UNDER CONTRACT
Mr. McKenzie: 1.	What is the total number of persons under contract to the Canadian Radio-television and Telecommunications Commission and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Mr. C. Douglas (Parliamentary Secretary to Minister of Communications):: The Canadian Radio-television and Telecommunications Commission (CRTC) has submitted the following:
1.	The total number of persons under contract to the CRTC is fifteen (15) as of October 20, 1977. Of these, none are retired public servants.
[Mr. Fricscn.l
2.
Total amount paid Fiscal Year	for contracts
1974-	1975	$ 313,786.001975-	1976	$480,869.001976-	1977	$ 375,689.00
Of these amounts, nothing was paid to retired public servants.


FEDERAL BUSINESS DEVELOPMENT BANK-PERSONS UNDER CONTRACT AND SALARIES
Mr. McKenzie: 1.	What is the total number of persons under contract to the Federal Business Development Bank and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Bernard Pierre Loiselle: 1. Thirty-two persons were under contract with the Federal Business Development Bank as CASE Co-ordinators and Assistant Co-ordinators at October 31, 1977. Two of those are retired public servants.
2.	(a) The FBDB did not come into existence until October 2, 1975. (b) The FBDB does not, as a matter of policy, publish salaries paid to individuals or small group of persons. The annual reports of the bank for the fiscal years ended March 31, 1976 and 1977 show total salaries and employee benefits for Management Services (which includes all CASE Co-ordinators and Assistant Co-ordinators) as $462,345 in 1976 and $2,033,992 in 1977.


COMMISSION OF INQUIRY INTO BILINGUAL AIR TRAFFIC SERVICES-PRIVATE EMPLOYMENT AGENCIES
Mr. McKenzie: 1.	Has the Commission of Inquiry into Bilingual Air Traffic Services in Quebec obtained (a) part-time (b) full-time employees from private employment agencies in (i) British Columbia (ii) Alberta (iii) Saskatchewan (iv) Manitoba (v) Ontario (vi) Quebec (vii) New Brunswick (viii) Nova Scotia (ix) Prince Edward Island (x) Newfoundland and, if so, in each case, how many?
2.	Are such employees paid from supplementary estimates and, if not, from what estimates are they paid?
3.	By province, what was the (a) average hourly rate paid to employment agencies (b) average hourly rate paid to employees (c) total amount paid by the Commission of Inquiry into Bilingual Air Traffic Services in Quebec?


Yvon Pinard: 1. (a) Ontario-1; (b) Nil.
2.	Main Estimates.
3.	(a) $7.50; (b) Not known; (c) (i) 1975-76-Not applicable; (ii) 1976-77-$22.50
January 24, 1978


PRIVY COUNCIL OFFICE-PRIVATE EMPLOYMENT AGENCIES
Mr. McKenzie: 1.	Has the Privy Council Office obtained (a) part-time (b) full-time employees from private employment agencies in (i) British Columbia (ii) Alberta (iii) Saskatchewan (iv) Manitoba (v) Ontario (vi) Quebec (vii) New Brunswick (viii) Nova Scotia (ix) Prince Edward Island (*) Newfoundland and, if so, in each case, how many?
2.	Are such employees paid from supplementary estimates and, if not, from what estimates are they paid?
3.	By province, what was the (a) average hourly rate paid to employment agencies (b) average hourly rate paid to employees (c) total amount paid by the Privy Council Office in (i) 1975 (ii) 1976?


Yvon Pinard: 1. (a) Ontario-80; (b) Nil.
2.	Main Estimates.
3.	(a) $8.22; (b) Not known; (c) i) 1975-76-$126,128.77; ii) 1976-77-$139,659.53.


OFFICE OF THE PRIME MINISTER-PRIVATE EMPLOYMENT AGENCIES
Mr. McKenzie: 1.	Has the Office of the Prime Minister obtained (a) part-time (b) full-time employees from private employment agencies in (i) British Columbia (ii) Alberta (iii) Saskatchewan (iv) Manitoba (v) Ontario (vi) Quebec (vii) New Brunswick (viii) Nova Scotia (ix) Prince Edward Island (x) Newfoundland and, if so, in each case, how many?
2.	Are such employees paid from supplementary estimates and, if not, from what estimates are they paid?
3.	By province, what was the (a) average hourly rate paid to employment agencies (b) average hourly rate paid to employees (c) total amount paid by the Office of the Prime Minister in (i) 1975 (ii) 1976?


Yvon Pinard: 1. (a) Ontario-54; (b) Nil.
2.	Main Estimates.
3.	(a) $7.44; (b) Not known; (c) (i) 1975-76-$31,018.81; (ii) 1976-77-$59,579.09.


ROYAL COMMISSION ON CORPORATE CONCENTRATION-PRIVATE EMPLOYMENT AGENCIES
Mr. McKenzie: 1. Has the Royal Commission on Corporate Concentration obtained (a) part-time (b) full-time employees from private employment agencies in (i) British Columbia (ii) Alberta (iii) Saskatchewan (iv) Manitoba (v) Ontario (vi) Quebec (vii) New Brunswick (viii) Nova Scotia (ix) Prince Edward Island (x) Newfoundland and, if so, in each case, how many?
2.	Are such employees paid from supplementary estimates and, if not, from what estimates are they paid?
3.	By province, what was the (a) average hourly rate paid to employment agencies (b) average hourly rate paid to employees (c) total amount paid by the Royal Commission on Corporate Concentration in (i) 1975 (ii) 1976?


Yvon Pinard: 1. (a) Ontario-32; (b) Nil.
2. Main Estimates.
Order Paper Questions
3. (a) $6.59; (b) Not known; (c) (i) 1975-76-$10,134.03; (ii) 1976-77-$21,607.01.


CBC-MAIL ORDER BUSINESS FOR RECORDINGS
Mr. Schumacher: 1.	Does CBC operate a mail order business for recordings by Canadian artists and, if so, who is responsible for the operation and how long has it been in operation?
2.	Is the operation strictly for the promotion of Canadian Artists?
3.	By year, since the commencement of the operation, how many (a) artists have been recorded (b) records of each artist were made for sale (c) requests were received for recordings and how many were (i) shipped (ii) returned (iii) paid for?
4.	By year, since the commencement of the operation, what was the cost of (a) recording the artists (b) preparing the records for sale (c) preparing, publishing and distributing a mail-order catalogue (d) distributing the records?
5.	(a) How many mail order outlets are there in (i) Canada (ii) the United States (iii) other countries (b) what was the total (i) revenue (ii) expense involved, by year, since commencement of the operation in each country where facilities existed?


Hon. John Roberts (Secretary of State):: I am informed by the Canadian Broadcasting Corporation as follows: 1. Yes. The service, within the Learning Systems section of the CBC, is known as the Canadian Collection and began in January, 1973. It is operated by the Marketing Department of the CBC's English Services Division, in cooperation with the French Services Division and Radio Canada International.
2.	The service, which uses the same master-discs that are used to make recordings for on-air use, is intended to promote the efforts of Canadian performers and composers.
3.
(a) Recorded in:	1972-3/4	1974/75	1975/76	1976/77Solo	22	25	16	20Choir	2	5	6	3Orchestras and Ensembles	33	41	34	46
(b) The number of recordings pressed from each master varies, but the average number is 142 per artist or group, (c) Albums ordered, shipped and paid for: 1972/73, 1,199; 1973/74, 3,379; 1974/75, 8,427; 1975/76, 8,006; 1976/77, 6,383. Since the beginning of the Canadian Collection, a total of 128 recordings have been returned to the CBC by customers. These were returned because of manufacturing defects and were all replaced at no cost to the customer.
4.	(a) Since the original recordings are made for program use, their production cost is part of the appropriate program budget and is not charged to the Canadian Collection, (b) 1972/73, $1,873; 1973/74, $2,863; 1974/75, $8,994; 1975/76, $13,808; 1976/77, $14,665. (c) 1972/73, $4,500; 1973/74, $3,380; 1974/75, $6,716; 1975/76, $4,550; 1976/77, $7,735. (d) The cost of mailing albums is charged to the customer.
5.	(a) Toronto is the warehousing and mailing point for all orders.

January 24, 1978
Order Paper Questions
	(i)	(ii)*
1972/73	$ 5,995.00	11,800.001973/74	$10,100.00	17,680.001974/75	$27,773.00	23,016.001975/76	$30,486.00	24,850.001976/77	$35,653.00	29,035.00
* These expenses represent direct costs only and do not include indirect (overhead) expenses, such as office staff who work on other projects within the Learning Systems section and whose duties include looking after the Canadian Collection.


FEDERAL EXPENDITURES IN CONSTITUENCY OF NEW WESTMINSTER
Mr. Leggatt: In each fiscal year since 1970, what amount was spent in the Constituency of New Westminster by the Department of Fisheries and the Environment and those agencies that report to it?


Hon. Rom6o LeBlanc (Minister of Fisheries and the Environment):: In so far as the Department of Fisheries and the Environment is concerned: 1970-71, *; 71-72, *; 72-73,
$66,166; 73-74, $89,479; 74-75, $173,807; 75-76, $213,289; 76-77, $258,864; 77-78** $120,265; Total, $921, 870.
* Expenditures not available by constituency for fiscal years 1970-71 and 1971-72.
** To October 31, 1977.
In so far as the Freshwater Fish Marketing Corporation is concerned: Nil.
In so far as the Canadian Saltfish Corporation is concerned: Nil.
In so far as the Fisheries Prices Support Board is concerned: Nil.


AMOUNT SPENT BY MSUA AND REPORTING AGENCIES SINCE 1970 IN NEW WESTMINSTER CONSTITUENCY
Mr. Leggatt: In each fiscal year since 1970, what amount was spent in the Constituency of New Westminster by the Ministry of State for Urban Affairs and those agencies that report to it?


Hon. Andr6 Ouellet (Minister of State for Urban Affairs):: Note 1: The calendar year is the fiscal year of CMHC.
Note 2: Data compiled by CMHC on activity under the National Housing Act are based on municipalities and census divisions and sub-divisions in British Columbia.
I am informed by the National Capital Commission as follows: Nil.
In so far as the Ministry of State for Urban Affairs is concerned: Nil.


FEDERAL EXPENDITURES IN NEW WESTMINSTER CONSTITUENCY
Mr. Leggatt: In each fiscal year since 1970, what amount was spent in the Constituency of New Westminster by the Department of Energy, Mines and Resources and those agencies that report to it?


Hon. J.-Gilles Lamontagne (Minister Without Portfolio):: The Department of Energy, Mines and Resources reports as follows: EM&R's financial information system is designed to provide a breakdown of expenditures by province and territory only. However, EM&R can supply the following estimated amounts: 1970-71, nil; 1971-72, nil; 1972-73, $1,500; 1973-74, nil; 1974-75, $11,000; 1975-76, $10,500; 1976-77, $13,500;
1977-78, $4,000. Atomic Energy Control Board, National Energy Board, Atomic Energy of Canada Limited and Uranium Canada Limited report as follows: 1970-71 to 1977-78, nil.


CANADIAN PACIFIC COMPANY LIMITED
Mr. Rondeau: 1.	How many shareholders does the Canadian Pacific Company Limited have?
2.	What is the amount of capital subscribed by the (a) shareholders (b) public?
3.	Does CP have any foreign holdings and, if so (a) where (b) what is their value?
Order Paper Questions
4.	In 1976, what was the turnover of the company and its subsidiaries (a) in Canada (b) abroad?
5.	Where is the head office of the company?
6.	During the past ten years, did the company and its Canadian subsidiaries pay any Federal income tax and, if so, what was the amount for each year?


Yvon Pinard: See Beauchesne, Citation 171 (dd).


BRUCELLOSIS
Mr. Rondeau: 1.	From 1968 to date, did the government pay indemnities for losses caused by brucellosis and, if so, what was the amount each year for (a) Canada (b) each province (c) each constituency in Quebec?
2.	For each year since 1968, did the government pay fees for professional services rendered by veterinarians for the care of animals afflicted by brucellosis and, if so, what was the amount for (a) Canada (b) each province (c) each constituency in Quebec?
3.	How many animals afflicted by brucellosis died during the past ten years in (a) Canada (b) Quebec?
4.	What are the names of the one hundred breeders who incurred the largest losses due to brucellosis in (a) Canada (b) Quebec?
5.	For each year since 1968, by province, how many deaths due to brucellosis were registered?


Hon. E. F. Whelan (Minister of Agriculture):: 1. Yes. (a) and (b) See Statement A. (c) Records are not maintained in a manner which readily allows for the preparation of the information requested. The compilation of the information would result in an excessive delay in replying to the question.
2.	Fees for professional services rendered by veterinarians for the care of animals afflicted by brucellosis are the responsibility of the owner of the animals.
3.	(a) and (b) Deaths from brucellosis are minimal, but to prevent dissemination of this disease, animals were ordered destroyed as outlined in Statement B.
4.	See 1(c).
5.	Deaths due to brucellosis are not registered.
Statement A
Compensation Awarded for Brucellosis
Province	1968-69	1969-70	1970-71	1971-72	1972-73	1973-74	1974-75	1975-76	1976-77	1977-78*Newfoundland	105.00	120.00	303.60	. 	_	500.00	Prince Edward Island	-	-	-	-	-	-	1,400.00	1,300.00	1,348.00	1,304.00Nova Scotia	358.74	694.00	-	174.00	198.00	230.00	928.00	451.00	600.00	624.52New Brunswick	65.00	198.00	-	382.00	-	111.00	898.00	846.00	1,056.55	179.80Quebec	144,965.26	147,389.08	171,643.87	74,795.76	49,718.25	110,295.56	337,744.60	561,887.88	1,327,403.83	708,942.56Ontario	61,493.68	28,385.32	25,220.55	31,165.88	31,115.54	240,703.19	1,261,589.44	2,080,340.85	3,000,628.64	1,691,088.27Manitoba	23,627.54	33,664.01	70,853.38	58,641.48	64,505.38	124,532.95	267,548.55	736,934.85	815,899.02	469,254.11Saskatchewan	28,201.76	93,751.59	120,056.25	217,929.41	286,849.66	539,903.07	811,096.23	571,264.85	1,085,523.17	284,304.02Alberta	11,639.36	20,584.81	21,443.10	22,505.00	40,478.05	237,078.97	496,939.26	99.644.93	847,195.60	507,279.81British Columbia	4,609.00	877.50	306.00	94.00	575.00	24,041.25	44,568.10	280,145.72	384,116.26	78,704.42Canada	274,960.34	325,399.31	409,643.15	405,991.13	473,439.88	1,276,895.99	3,222,712.18	4,333,316.08	7,463,771.07	3,741,681.51
April 1, 1977 to October 31, 1977

January 24, 1978
Order Paper Questions
Statement B
Number of Animals Slaughtered for Brucellosis
April 1, 1977 to October 31, 1977


SERVICES PERFORMED BY LAWYERS AND LAW FIRMS IN VICTORIA CONSTITUENCY
Mr. McKinnon: What were the names and addresses of all lawyers and law firms in the Constituency of Victoria, British Columbia, who performed services during (a) 1975 (b) 1976 for the Canadian Radio-Television Commission and, in each case, what was the total amount paid?


Crawford Douglas: The Canadian Radio-television and Telecommunications Commission informed us that the answer is "nil".


OUTSIDE CONSULTANTS
Mr. Howie: From January 1, 1977 to date, did the Department of Agriculture hire outside consultants and, if so, how many?


Eugene Whelan: Yes, 47.


FEES PAID BY FARM CREDIT CORPORATION TO OUTSIDE LAWYERS IN FREDERICTON, N.B.
Mr. Howie: Since April 1, 1976, what amount was paid by the Farm Credit Corporation to outside lawyers practising in Fredericton, New Brunswick and to whom were such payments made?


Eugene Whelan: The Farm Credit Corporation advises: Nil.


NUMBER OF MOBILE HOMES ACCEPTED AS MORTGAGE SECURITY BY CMHC SINCE JANUARY 1, 1977
Mr. Howie: Since January 1, 1977, have any mobile homes been accepted as mortgage security by CMHC?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: 1
am advised as follows by Central Mortgage and Housing Corporation: In the first nine months of 1977, CMHC has approved insured loans on mobile homes, made by approved lenders, for 47 units totalling $1.7 million. It has also approved one direct loan for $29,000.
[Mr. Whelan.)


MR. LAWRENCE D. A. HAYWARD, R.R. 1, ELGIN, ONTARIO
Mr. Cossitt: 1.	Since 1960, how many times has Mr. Lawrence D. A. Hayward, R.R. 1, Elgin, Ontario, applied for a Canada Council grant and, in each case (a) what were the amounts requested (b) on what dates were the applications made and were they refused and, if so, for what reason (c) for what reason were the grants requested?
2.	Is the Canada Council aware that Mr. Hayward, Curator of Alpha Gallery, has carried out extensive documented research on the biographies of Canadian Sculptors and that some of his research was purchased by the National Archives?
3.	Did the Canada Council approve a grant for the research of the biographies of Canadian Sculptors and, if so (a) what is the name and address of the person receiving such grant (b) in what amount (c) on what date (d) for what reason was such a grant approved when the material is already available in documented form from Mr. Hayward?
4.	Is it government policy to spend taxpayers money for research into material that is already available?


John (Moody) Roberts: I am informed by the Canada Council as follows: 1. and 2. The Canada Council's policy is to consider applications for grants or awards as confidential to protect the privacy of applicants.
3.	Two such grants were awarded under the Council's Explorations program (a) Frances Gage, Toronto, and Guy-Marc Fournier, Roberval, Que. (b) $8,000 and $6,200 (c) May 1977 and July 1977 (d) Miss Gage was awarded a grant for an inventory of the works of the late Toronto sculptors Loring and Wyle. No such inventory had ever been made. Miss Gage has been a sculptor and teacher of sculpture for 20 years and was a close friend of Loring and Wyle. Her application, endorsed by three referees, was one of 24 recommended by a six member regional jury in a competition that drew 172 applicants. Mr. Fournier, whose project was to produce a book on the sculptors of Saint-Jean-Port-Joli, Quebec, was one of 19 applicants recommended, out of a total of 126.
4.	The Canada Council, before supporting any research project, requires evidence of originality.

Question No. 909-


POST OFFICE CALENDAR
[Stage Direction]
-Mr. Howie:
What was the total cost of producing the 1978 post office calendar and how many copies were produced?
Province	1968-69	1969-70	1970-71	1971-72	1972-73	1973-74	1974-75	1975-76	1976-77	
-78	Newfoundland	1	1	1	3	.Prince Edward Island	-	-	-	-	-	-	7	5	5	2	Nova Scotia	4	7	-	1	2	2	5	1	1	4	New Brunswick	1	2	-	4	-	1	4	3	7	1	Quebec	2,089	1,495	1,695	733	456	814	1,695	2,707	5,879	2,672	Ontario	787	269	231	270	248	1,501	6,136	5,093	12,208	6,348	Manitoba	354	304	679	553	559	898	1,402	4,145	4,270	2,035	Saskatchewan	389	885	1,078	2,033	2,483	4,029	4,330	3,090	5,620	2,241	Alberta	184	213	205	217	361	1,509	2,270	4,568	4,571	2,636	British Columbia	52	9	3	1	3	97	136	1,901	2,202	223	Canada	3,860	3,185	3,892	3,813	4,112	8,851	15,985	21,516	34,763	16,162	
January 24, 1978
Hon.   J.-J. Blais@Postmaster General: Actual cost figures are not yet available for the 1978 Calendar. The estimated cost totals $182,282. This includes all facets of the calendar, creative production, printing, and distribution. 816,000 copies.


PHARMACEUTICAL PRODUCTS
Mr. Herbert: For each of the past ten years, what was the total value of (a) imported (b) exported pharmaceutical products?
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Statistics Canada reports that: Statistics for each of the past ten years on imports and exports of medicinal and pharmaceutical products are shown on the table below:
	Imports	Exports
	($000)	($000)
1967	51,837	17,5791968	53,092	17,0891969	66,898	22,4761970	79,794	25,6671971	80,530	24,5991972	94,474	29,3211973	109,855	38,9901974	144,616	40,8241975	167,381	44,4061976	173,176	43,747


MINISTERS OF STATE FOR SCIENCE AND TECHNOLOGY
Mr. Howie: Since October 30, 1972, what are the names of the Ministers of Science and Technology and on what date did each assume and relinquish his/her post?


Yvon Pinard: Hon. Alastair William Gillespie, August 12, 1971-November 26, 1972; Hon. Jeanne Sauve, November 27, 1972-August 7, 1974; Hon. Charles Mills Drury, August 8, 1974-September 14, 1976; Hon. James Hugh Faulkner, September 15, 1976-September 15, 1977; Hon. J. Judd Buchanan, September 16, 1977.


SECRETARY OF MINISTRY OF STATE FOR SCIENCE AND TECHNOLOGY
Mr. Howie: Since October 30, 1972, what are the names of the Deputy Ministers of Science and Technology and on what date did each assume and relinquish his/her post?


Yvon Pinard: Dr. Aurele Beaulnes, Sept. 1, 1971-Sept. 8, 1974; Dr. J. Maurice LeClair, Sept. 9, 1974-Dec. 14, 1976; Mr. L. Denis Hudon, Jan. 1, 1977.
Anti-Inflation Act


QUESTION PASSED AS ORDER FOR RETURN
Yvon Pinard: Mr. Speaker, if question No. 768 could be made an order for return, this return would be tabled immediately.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


STATISTICS CANADA CATALOGUE NO. 71-001P
Mr. Lambert (Bellechasse): With reference to page 23 of Statistics Canada Catalogue No. 71-001P concerning the Canadian labour force and indicating the employment and unemployment rates by region, what is the meaning of the (a) numbers 41 to 49 for Quebec (b) letters BCDE following the labour force percentage (c) letters EFGH following the unemployment rate?
Return tabled.


INCOME TAX ACT
Joseph Jacques Jean Chrétien: for leave to introduce Bill C-23, to amend the Income Tax Act and establish the employment tax credit program.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Speaker:: When shall this bill be read the second time? At the next sitting of the House?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Joseph Jacques Jean Chrétien: that Bill C-18, to amend the Anti-Inflation Act and guidelines, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, Bill C-18 is now before the House for second reading. Some of the amendments in this bill are for housekeeping purposes and have been required for some time. Others are needed to ensure that the decontrol process will be orderly.

January 24, 1978
Anti-Inflation Act
Controls were never intended to be permanent since this government does not believe in excessive intervention in the market place. Last October I announced that a phased process of decontrol would begin on April 14 of this year. We believe that this date will ensure that wage and price controls will be in place for the right length of time. Most groups and firms will remain subject to the guidelines until the last quarter of 1978.
The recent high rates of increase in inflation have resulted mainly from food prices and the depreciation of the exchange rate. I am confident that almost all of the impact of these developments is now behind us and that inflation will trend downward during 1978. Wage increases have been coming in at more reasonable levels and the AIB's price prenotification program is indicating only moderate changes.
Part of our progress is being made by a shift in attitudes. There is now a widespread recognition that we cannot expect the economy to deliver the large increases in real income which we enjoyed in the easy times of the 1960s and early 1970s. There is a better understanding of our goals and priorities and, in particular, of the difficulties involved in maintaining a competitive international trading position.

Our prospects are improving with regard to salary costs. The number of work days lost as a result of strikes decreased considerably last year. Union leaders have indicated that wage claims will be reasonable after April 14. All understand that unrealistic demand will only tend to reduce job creation or lead to the disappearance of existing ones. Public authorities, at every level, are showing more discipline than a few years ago.
Various new steps are being taken, as we near the phasing-out of controls. Our wage policy will guarantee that the state, as an employer, will not provoke in the private sector such wage increases as might be likely to stir a flare up in wages and prices. The federal-provincial conference of the finance ministers, to be held this week will give me a chance to broach this subject with my provincial counterparts, as well as with the President of the Treasury Board (Mr. Andras) in the hope that a similar policy might be implemented throughout the public sector.
I plan to announce in the near future the details of the setting up of a control body whose main mission will be to see to it that all groups remain aware of the ravages of inflation, and draw attention to such inflationary elements as may exist. [English]
Let me now turn to the specific clauses of this bill. Two of the amendments relate to the decontrol process. The first of these was introduced last summer. It would deem compensation plans to be amended in line with a recommendation of the AIB or an order of the administrator. Without this amendment, groups would probably be entitled to the negotiated level of wages as soon as controls cease to apply.
The other deals with administration in the transition period and prevents the use of what are known as AIB clauses. As the
[Mr. Chritien.l
act now stands, no action can be taken against those firms or groups who have not reported early enough to allow a binding order to be issued by the administrator prior to December 31, 1978. This situation is clearly unsatisfactory and inequitable. This amendment would ensure that reports would be filed for the period covered by controls and allow the AIB, the administrator and the Anti-Inflation Appeal Tribunal to remain in operation as long as necessary to enforce compliance in respect of the controls period.
With respect to the "AIB clauses", the amendment will prevent the use of clauses which call for a higher entitlement to compensation as soon as the group is no longer covered by controls. It is designed to build in further restraint against a possible wage bulge.
All but one of the remaining amendments were introduced in Bill C-59 last summer. To review an order in council, which brought various groups that bargain in association under mandatory controls, would be backdated to December 16, 1975. A time limit would be imposed for parties referring a matter to the administrator following a notification from the AIB. The authority of the administrator to issue orders dealing with past or current contraventions of the guidelines would be clarified. Cabinet would be given adequate time to deal with petitions from parties affected by an order of the administrator. The remaining amendment, introduced for the first time, would clarify the definition of compensation plans.

Hon. members in this House will surely see the importance of this bill. It is therefore imperative that we proceed with its study without delay if we want the controls to be lifted in an orderly fashion. Let us not forget that we have little time left before phasing out of the controls begins.


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I was intrigued by the remarks of the Minister of Finance (Mr. Chretien) who blames food prices and exchange rates for the continuing inflation which Canada is experiencing just now. Blaming food prices is almost the same as saying that the controls program does not work at all. Food prices at the farm gate were not supposed to be controlled. At the other end of the food chain, prices were supposed to be controlled except of course it was not price controls at all that we had, it was profit control. Therefore, any increase in costs could be passed right through to the consumer, and naturally we are not going to have any control over food prices. Long before this anti-inflation program was introduced in the first place the government knew that food prices were a villain and should be controlled.
As far as blaming exchange rates is concerned, Mr. Speaker, the government is responsible in large measure, if not totally, for the situation of exchange rates and the Canadian dollar. After all the government has allowed the productivity of this country to drop at such a rate, compared to other producing countries, that the world markets have finally realized the
January 24, 1978

value of our dollar, and they have placed a proper value on it. That is the reason for the decline in exchange rates.
As for the minister's further remark that the economy cannot deliver the large increases to workers that it used to, we can look to the policies of the present administration and determine that they have in no way encouraged the economy to deliver anything close to what the economy is capable of delivering. For anyone wanting to improve the Canadian economy the government has provided only disincentives.
The minister also remarked that Bill C-18 is mainly a housekeeping bill. We might say that it is about time that the government started doing some housekeeping.
I would like to remind the House of some of the bungling that this government has done during the past few years, particularly in the case of the anti-inflation legislation which has been before the House, but not limited to that. For example, in 1975 we had Bill C-73, the original anti-inflation bill. Then, it was barely five months later the government found that it had to have amendments to the original program. Therefore, in May, 1976, we had Bill C-89, which amended Bill C-73. Then, a little over a year later, Mr. Speaker, Bill C-59 was introduced in July, 1977. Unfortunately the government did not think that Bill C-59 had sufficient priority and it died on the order paper at the end of the session. Now it is six months later and we have another set of Anti-Inflation Act amendments.
I have mentioned bungling, Mr. Speaker, and you may wonder if these are the only examples I have. On the legislative side I would like to refer to the Income Tax Act amendments. We dealt with those not so long ago and the minister and the government members were complaining that the opposition was stonewalling or delaying passage of the legislation. The delay came on the other side of the House, Mr. Speaker. The evidence is clear that Bill C-ll was first debated on November 7, 1977, and only five weeks elapsed between the start of the debate and the passage of the bill. Compare that with the 31 weeks which elapsed between the March 31 budget and the start of debate on the bill. The government left debate of that bill for so long that once again it found it imperative to introduce closure, and the people of Canada were denied a proper debate on another important tax bill. It is known widely that budget bills have effect from the date of the budget and there was absolutely no need for a closure motion to be used in that particular instance.
If that were not enough evidence, I would like to remind the House that even though ten years ago the government knew Bank Act legislation would be needed, we had an introduction yesterday of second reading of the Bank Act amending bill, in spite of the fact that the debate on an initial extension bill passed last year. The debate on that bill continued for a shorter period of time than the bells rang last evening to call a vote on this bill for which they obviously were not ready. What has happened to the proper legislation? That is the kind of bungling that we can do without.
It seems to me the Prime Minister (Mr. Trudeau) is appealing to Canadians on the basis that he is not going to run the
Anti-Inflation Act
next election campaign on his record. He cannot, of course, because he doesn't have a good one, so he is going to run the next election based on the future. He thinks Canadians are going to forgive him for his bungling; that is his premise. I say yes, Mr. Speaker, Canadians could easily forgive the government for bungling, but I doubt very much that Canadians are going to forgive the government for its dishonesty.
I would like to skim over a few examples which I suggest are examples of dishonesty on the part of this government. Just last week in the Vancouver newspapers there was an announcement made of the fact that the Minister of Justice (Mr. Basford)-I am glad he has returned to hear about it- gave the city of Vancouver $200,000 as the first installment of a $400,000 urban demonstration fund grant for the Gastown Fishermen's Wharf. Of course, the people of Vancouver welcomed that kind of participation by the government. But, it is totally dishonest to say that the Minister of Justice gave the city of Vancouver $200,000 as if it were something that he dug out of the Liberal coffers or his own pockets.
The people of Vancouver know where that money came from. It came out of the pockets of the residents of British Columbia. For this government to say that it has given money to the city of Vancouver is dishonest. The article goes on to say that the money came from a $6 million fund originally set aside for use during the United Nations Habitat Conference, but which was not used. Well, what do we take from that? That is an admission that either the government did some very bad budgeting and overprovided $6 million for the Habitat conference, or it had not sufficiently promoted the conference to make it a success and the money was not spent.


Stanley Ronald Basford: Don't you know about it?


William Hillary (Bill) Clarke: Of course. I was there. I was a delegate. I am aware that the minister's office generated a half million dollar loss as a result of unused hotel rooms. Who will be blamed for that? Was that dishonest or just fumbling? It is hard to distinguish.
The $6 million was probably appropriated for a specific purpose. We will find this out in a couple of years when it is looked at by the Auditor General and the Public Accounts committee. It seems to me there is a prima facie case of appropriating funds for one purpose and using it for another. The Auditor General and the Public Accounts committee have been very explicit that funds appropriated for one purpose are not to be used for another. We will have to wait for the answer to that one.
The Minister of Justice will not be here then. As for myself, I plan to be here for a good long time because the people of Canada need watchdogs like myself with a government like this in power.
The $200,000 gift is not the only item about which the government has been dishonest. Earlier the Minister of Justice went to Victoria and made a magnanimous gift of $150 million

January 24, 1978
Anti-Inflation Act
to the premier of British Columbia. It was all over the front pages.


Stanley Ronald Basford: British Columbia never had such good representation.


William Hillary (Bill) Clarke: Of course British Columbia needs that money. They welcomed getting it-back. However, the minister makes it sound as though he were bringing that money from eastern Canada to British Columbia by the truckload in order to make them a gift.
The people of British Columbia know where that money came from. They do not appreciate having it made to appear as though it is a gift from the great gods across the floor. I commend the Minister of Justice for his decision to quit this place early. It saves the voters the trouble of doing it for him.
There may be some discussion about the examples of dishonesty I have given. I have another piece of paper here which directly involves the Minister of Justice. It is a four page handbill entitled "The Redevelopment of Granville Island and False Creek in Vancouver".


Mr. Deputy Speaker:: Order, please. I have been following the interesting remarks of the hon. member. However, I have difficulty relating those remarks to Bill C-18 which is before us, the amendments proposed to the Anti-Inflation Act and the guidelines.


William Hillary (Bill) Clarke: I apologize to you, Mr. Speaker, and to the House if I have strayed slightly from the tenor of the debate. I was merely making a preliminary lead-in to the thrust of my remarks which will deal with inflation. That is what the bill is about. It is clear that these government expenditures are inflationary. The problem is that those that I picked out are also dishonest. If I have stressed the dishonest feature of them over the inflationary feature, I apologize. I assure Your Honour I will tie that in with the debate on this bill.
As I was saying, I have a folder on the redevelopment of Granville Island and False Creek. It is not necessary to go into the history of this island at this time. Let it be said that Central Mortgage and Housing Corporation acquired title to this land in Vancouver at a time when it was being used as an industrial estate. The great gods opposite decided that industrial estates should not be located close to the city where people can get to work easily. They feel they should be moved to the suburbs, which makes it more difficult for people. They decided this should be a people place, not an industrial estate.


Stanley Ronald Basford: Hear, hear!


William Hillary (Bill) Clarke: In addition, they had to find a job for the past president of the Liberal party of British Columbia. For the past four or five years he has been the chairman, manager or director of the agency in charge of the redevelopment of Granville Island.
In order to buy up leases and clean the place up, $25 million was allocated. A park was put here and there as well as restaurants, and now they are going to put in some stores.

What is wrong with that? It is a people place at the end of a two-lane dead-end road. How many people can get down such a road? What if there were an emergency? There would be a real traffic problem.
That is a dishonest use of the taxpayer's money, money which was obtained from people in British Columbia and is now back there. The people of British Columbia were not asked whether they wanted this.
After four years and the spending of $6 million, a public meeting was finally held last December 8 to outline the plans. The results were predictable. Vancouver merchants within a mile or two of that place asked what the government was doing with their tax dollars buy building a government-owned and subsidized shopping centre to compete with them. The people of Vancouver do not want to go to this people place with the inconvenience built into it. The merchants who pay the taxes are seeing their money being used in order that the government may compete with them. With a financial policy like that, I do not know where we are headed.
Something else in our society that is inflationary is the Unemployment Insurance Commission. That may sound strange. However, that commission will spend approximately $4.4 billion this year, which is about 10 per cent of the federal budget for the whole year. It may be called an insurance fund, but the Minister of Employment and Immigration (Mr. Cullen) has no interest or desire in seeing that it operates as an insurance fund. He is only interested in paying the unemployed people provided to him by the Minister of Finance. It is like a con game-"You give me the bodies and I will pay them."
However, there happens to be the matter of a shortfall in the unemployment insurance fund. The government says it is not too great. It is nearly $2 billion. The Minister of Employment and Immigration does not consider that a deficit. In answers to questions in this House, that minister said on two occasions that this is a commitment, not a deficit. Of course it is a commitment. No one would argue with that. The government instituted the unemployment insurance program. Therefore it is committed to pay those who qualify for the benefits. But it is also a deficit. It is no wonder the Minister of Finance does not know how to balance the budget when the Minister of Employment and Immigration denies it is a deficit and the Minister of Justice thinks it is proper to take money out of someone's pocket, give it back to him, and ask for thanks.
All through this inflationary period the government has been asking Canadians to tighten their belts. But there is no evidence at all that the government has been tightening its belt in turn, and the result has been further inflationary pressure.
The Minister of Employment and Immigration has made a big thing about his make-work programs. No doubt the people who are unemployed enjoy very much getting grants under the Canada Works Program and similar programs. Nevertheless, in my view the government should recognize that, if there is a need, adequate measures should be taken to meet it, and it is
January 24, 1978

clear that the need for jobs has in no way been met by any of the minister's make-work programs. The money goes out, it is spent, and it is gone; the people are back on the unemployment rolls. All that has happened is the creation of yet another bureaucracy to administer these programs-programs which meet about 10 per cent of the demand. If there is a need, let us meet it. The government ought not to give the impression that they are good fellows handing out money so as to find work for the unemployed, and so on, when at the end there is no left-over benefit.
It is a little like the situation with regard to old age security and guaranteed income supplements. The amount presently paid out to a single person is about $3,000 a year. I have not seen the latest figures but in round numbers let us say the poverty level has been placed at $6,000 a year. How can the government suggest it is really meeting the need when $6,000 is the poverty level and it pays out $3,000?
I am sorry the Minister of Justice has left the chamber because I had another item I wanted to show him. This, too, is from the Vancouver Sun-an article written last week headed "Where your money goes". The headline reads; "Basford will get $112,000 at age 75". The article goes on to say that the minister, who, as we know, is retiring, will be getting a certain pension, and explains that with built-in escalation that pension could reach $112,000 by the time he is 75.
I want to tell you, Mr. Speaker, and the other members of the House, that the minister will need that $112,000 if he should happen to live to the age of 75. He will need it because when, at the age of 75, he goes to buy his new automobile he will need not $5,000 but $60,000 in 2007, or whatever the year is 29 years from now. That price is based upon inflation continuing at its present rate in Canada-it is presently 9 per cent though there are indications it will probably end up being 9.5 per cent. If we were fortunate enough to be able to contain inflation at the rate of 7 per cent the minister would only have to pay $35,000 for his car. The point is, though, that he will need the amount of pension the papers say he is going to get.
Here are a few more examples of what things will cost: a 60-cent loaf of bread at today's price will cost the minister $7.35 when he reaches 75 taking current rates of inflation into account. If he needs to call in a plumber to fix his kitchen sink, instead of a $25 charge for a house call he will be paying $233 to get the plumber to come over for an hour.
While we are talking about inflationary pressures caused by government spending I should like members opposite to consider the case of the elderly couple getting full old age security benefits and guaranteed income supplement. I am sure hon. members to my left will be interested in these figures, particularly the hon. member for Winnipeg North Centre (Mr. Knowles) because he is familiar with the problems of these pensioners who are now getting $498 a month. I am sure he will be delighted to hear that when the Minister of Justice is 75 in 29 years from now, old age pensioners such as I have described will be getting $4,640 a month.


Mr. Knowles (Winnipeg North Centre):: Hear, hear!
Anti-Inflation Act


William Hillary (Bill) Clarke: That is $55,000 a year, which is about half of what the minister will be getting at that time. I submit the minister is not being unreasonable in signing up for his pension in these circumstances. Indeed, I am not at all sure that just being twice as well off as a couple living on old age security benefits will provide an adequate standard of living for him. If nothing is done about reducing present rates of inflation, this is exactly what we shall be seeing.
The figures I have given are not excessive. They are based on present rates of inflation and the indications are that the trend is worsening-that inflation in Canada is actually on the rise. Unfortunately, the government, and, I am sad to say, many parliamentarians do not address themselves to the real problem. It is not the amount of the minister's pension or prices in themselves. The problem is inflation-inflation and the economy. As I said earlier, the government has done nothing to see that the economy is put back on the rails so that it can produce the jobs it is capable of producing.
I saw another item in the paper which interested me and I should like to refer to it because it directs attention to the sorry state in which the Canadian government and people find themselves. The item refers to a comment made by one man to another as they waited in line to collect unemployment insurance cheques. One of them said, "It frightens me sometimes to realize that this administration, with its fiscal irresponsibility, is my sole means of support!" What a double problem it is for Canadians who probably want to work but cannot because of the policies of the government.


Ramon John Hnatyshyn: Or lack of them.


William Hillary (Bill) Clarke: We can understand it when the Prime Minister tells us he is sorry things have not been good, that he does not propose to run on his record-because it is bad-but that he will run on the hopes he has for the future. We are delighted to give the Prime Minister the chance to show us the programs contemplated by himself and his party. But here is an item from the Globe and Mail of December 14-I cut it out because it contains such a ludicrous statement to hear from the Prime Minister. He said "The government has no emergency plans to counter rising inflation and unemployment". He concedes that the rates of inflation and unemployment are rising, but he tells us that the government has no plans to change the situation. What a sad state of affairs! The economy is on a course which might well end in collapse and the government is bereft of ideas for dealing with the situation.
One might have thought that during the Christmas break members on the front benches opposite would have had a chance to restore themselves. We realize they were getting tired toward the end of the first half of that session, and the Christmas break, we thought, might have given them an opportunity to come up with some solutions to the country's economic problems. Well, Mr. Speaker, I was here in the House yesterday, the opening day of this resumed session, and I heard the Leader of the Opposition (Mr. Clark) ask the Prime Minister what plans the government had to reverse the

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economic trend. Here is what the Prime Minister had to say as reported in Hansard for yesterday:
The government believes, and the statistics support it, that the economy has been stimulated in the proper fashion by this government.
If the Prime Minister believes this-and he says he does, so we cannot doubt him-he illustrates a complete lack of knowledge of what economics is all about, because many more things could be done by the government to cut down government outlays and restore a little respect to Canadians by enabling them to find jobs.
The root cause of inflation in any country is government spending and over-spending which results in government deficits. Government deficits must be covered somehow. The government can cover deficits easily. All it has to do is print more money. That does not mean turning on the presses and turning out dollar bills, but it means spreading around the credit and selling a few more bonds to the Bank of Canada. The Bank of Canada does not really want the bonds; neither do investors. The government must get rid of its bonds in order to cover the deficit.
Every home owner in Canada is aware of the fact that he must balance his budget. He can borrow from the bank and a few lending institutions for a while, but he cannot continuously borrow year after year as the government does. The government suggests that, because it is the government, it cannot go bankrupt. I wish that were true. The current inflationary trends, which are not being attacked by the government, are leading Canada into the same type of collapse that any business or family would encounter if their affairs were conducted in the same way as the government conducts its affairs.
As the House is aware, I am a chartered accountant. Accounting principles can be applied to household budgets as well as to national budgets. If one continues to carry out policies which are economically bad, then he must reap the penalties later on.
Canada requires increased production. That would allow for the expansion of the economy in a normal manner. The government recognizes that there is inflation. It quotes figures based on percentage growth year over year, as well as on a much lower rate of real growth. If the government wanted to be more honest when using the term "real growth", it would tell us that this is the rate of growth after inflation is deducted-inflation it is unable or unwilling to cover.
There have been various arguments concerning the causes of inflation. Some people believe that wages cause inflation. Wages may add to the problem of inflation somewhat, but the labour people in Canada are seeking to regain what was lost through the inflation the government has allowed to occur. Because the labour unions are attempting to keep up does not mean that workers are gouging the people of this country.
The government has decided that the minimum wage in Canada will increase. It wants the lowest paid workers to receive the higher minimum amount. Of course these workers have needs, but the floor the government puts under wages has

to work its way through the system. That results in higher prices for the consumer. Certainly that adds to inflation, but the point is that it was commenced by the government and not labour.
If a worker is earning $1 over the minimum wage and the minimum wage is increased by 50 cents, then he has to receive a proportionately larger amount. An increase of 25 cents in the minimum wage probably will result in an increase of 60 cents or more at the higher wage levels.
People have indicated that the government cannot control the inflation it imports. That statement is not completely true. Some of the goods Canada imports result in a greater cost to the consumer, but if Canada were more productive, then its dollar would be at a higher level than at present. If that were the case, Canadians might receive $1.08 U.S. on the Canadian dollar, which was the situation two or three years ago, instead of 90 cents today. The devalued Canadian dollar translates into a higher price of approximately 15 per cent on everything imported into Canada, which is a result of government policies. That could and should be avoided.
During the time that my party proposed a freeze some years ago, some people indicated that it would not control imported inflation. Those who said that forgot that the proposed freeze was to be implemented for a temporary period of 90 days. Any importer can control the price of his goods for that period. His orders are usually placed well in advance, and if there had been any problem, it could have been absorbed in his business.
I should like to direct a few remarks toward what can be done in order to resolve inflation. The government must have asked itself what can be done about inflation. Obviously it came up with the answer of controls, some year and a half after indicating how bad controls would be. That might be referred to as bungling or being dishonest. I would not want to say which right now. After a two-year period of application, the controls are not working. I refer to the government's "Year Two" report prepared by the Anti-Inflation Board. Under the section entitled "Fiscal Restraint", the report reads as follows:
The annual increase in federal, provincial and municipal government spending is back to 1972 levels or even lower.
As a comparison, during the first six months of 1977 the annual increase in federal expenditures was 13.7 per cent. At the same time as telling Canadians to tighten their belts and not spend so much money, the government was increasing its expenditures to the extent of 13.7 per cent. Also it might be interesting to note that the increase in municipal spending was 7.4 per cent, and for provincial spending it was 12.1 per cent for the first six months of 1977. Once again the federal government led the way in creating inflationary expenditures, while telling taxpayers to spend less.
Under the section entitled "Wages and Profits Restraint", the report indicates that at the end of Year Two of the program the consumer price index was 8.8 per cent, which was 2.8 per cent over the goal of 6 per cent. There are more current figures available since this was printed which indicate that 9.5 per cent seems to be the rate of increase for the consumer price index rather than 8.8 per cent.
January 24, 1978

The government indicates that it can overcome the effects of inflation by indexing, and now everything is indexed. Pensions, tax exemptions and so on are being indexed, which may relieve some of the hurt but does not solve the problem. Once again we find that the government is not attacking the root problem but simply applies indexing.
I already mentioned increases in minimum wages and I will not go through that again, but the end result of all these gimmicks that the government uses, such as indexing and so on, is that nobody is better off. In fact, I remember in 1974 when we were campaigning on the basis of controls, of a freeze with a selective control period following, working people would say to me, "Yes, we should have some kind of controls because my wife has had to go out to work for the first time in our marriage", or something like that. I said, "You mean that prices are increasing faster than your wages". Of course that was the problem. Costs were increasing at a faster rate than wages, and that is still true, so people are falling behind.
Now the government says, "We will put pensions up". In the case of the minister, his pension is capped at 7 per cent, so that if the government cannot force inflation below 7 per cent, he will fall behind for sure. Old age pensioners will be indexed at the rate of increase in the CPI, so they should be keeping their relative position. But I have spoken to many of them and they tell me they are not keeping their relative position; they are falling behind also.
There are many things that pensioners have to buy that are not included in the CPI which establishes the rate of increase in old age pensions. I say that it all comes back to the fact that Canada is not competitive in world markets because we have not been creating an attractive climate for industry to want to stay in Canada. That has resulted in lower export sales, resulting in trade deficits which ultimately result in the lower value of the Canadian dollar.
Why is the climate unattractive for business? I should like to refer to an article in the CA Magazine issue of November, 1977 which tells us that companies in Canada are going bankrupt at the rate of about 100 a week. The figures they gave were as of August 18. They say there were 2,602 business failures across Canada in 1977. That is bad enough, but it is also a 29 per cent increase from the previous year. The rate of losses is also higher than ever before, with unpaid debts left by the 1977 bankruptcies totalling $409 million more in the first seven and a half months than was lost in all of 1974.
We can see the inhospitable climate created by the government for business when we look at the stock market columns, which people have traditionally followed when investing their money. The problem in stock markets now is that the result of deterioration of money values has caused serious changes in the trends in stock markets. For instance, an article in the Globe and Mail last week indicates that the Toronto Stock Exchange index of 300 stocks has gone up only 10 per cent in 20 months. That would be a bad indicator for the investment community itself, but furthermore these prices are measured
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in dollars which have lost one-third of their value during the last decade. They say that the Canadian dollar is well on the way to losing half its 1971 buying power by 1980. How can we expect business to conduct itself in the traditional ways and to provide traditional investment shelters and so on when the government makes it so difficult for them?
Farther on the article continues:
The circumstances have inspired the Bank Credit Analyst to revive its thesis of the past ten years, that inflation of debt along with inflation of money and prices will eventually have to be liquidated by collapse into depression. Accordingly, this service, with roots in Canada, advises extreme caution in investment policy, with an eye to defence against disaster.
That writer is not the only one who has spotted the serious problem, and the flight of investment capital and expertise from Canada is surely an example of the lack of confidence felt by many of Canada's strongest and best entrepreneurs and developers, and I do not mean only land development but also development of a healthy business climate.
What we need is a return of confidence in the Government of Canada, and of course there is good reason for not having any in the group over there. Also what we need is a caring for Canada. There are many Canadians who care very much for their country and who are hanging on here at their own peril through the economic crisis into which this government is leading us. The action of a company such as Sun Life in proposing to move from Montreal to Toronto is simply another illustration of this feeling among Canadian businessmen that if the government makes it inhospitable for them to work or live in a certain area, then-at least so far in Canada-we still have the freedom to make a move to some other hospitable climate.
I think it is a very sad thing for Canada, as it is for Quebec, that a move such as Sun Life is proposing has had to be considered, but it certainly was not the fault of the Sun Life people or of the sun Life policyholders who will make the decision ultimately as to where the company can best operate. It was the fault of the government of that province which made it so difficult for a company like Sun Life to operate. It is not only company problems that are involved, it is people problems. Sun Life is run by employees, and employees do not want to live in a place where the government has taken away so much of their liberty.
I want to refer again to the CA Magazine, the monthly publication of the Institute of Chartered Accountants in Canada, which held its annual conference in 1977 in Bermuda. You might think that strange. It does not have anything to do with inflation but rather with the fact that Bermuda was chosen as the site of a meeting because it is part of the Canadian Institute. All other provinces have been the site of conferences of the Institute of Chartered Accountants, but that was the first time the conference was held in Bermuda.
The guest speaker at that conference was the new premier, the Hon. J. David Gibbons, who is also minister of finance of Bermuda. I thought his summary of his legislative intentions was very interesting, and I would like to read the following short paragraph. He said:

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In Bermuda, we take the view that it is the government's function to make legislation that provides the right climate for the private sector, consistent with the needs of society-it should protect both the individual and the environment.
I ask the House to compare that simple statement with the attitude and performance of the government opposite. It has certainly not provided the right climate for the private sector and it has tried to interfere to overcome the resulting shortcomings of the private sector to no avail. The government has not protected the individual, who is falling further and further behind as a result of its policies and, as we hear almost daily in the House, it certainly is not protecting the environment.
These are some things Bermuda does, and I quote the words of the premier:
The right balance between freedom and control-that's how we in Bermuda see our system of government and the country's approach to economic affairs. Essentially, the Bermuda Formula boils down to a system of free enterprise, supported by the right combination of flexible controls and a minimum of legislation.
When the premier says flexible controls, he does not mean the type of controls the government opposite imposed. There are certain other things which have to be controlled in order to preserve the mood and the nature of Bermuda. For instance, ownership of cars is rigidly controlled. When there are only a few miles of two-lane road, cars cannot be allowed to block it up. Workers in Bermuda are protected, and development and construction are carefully supervised. I am sure Canadian industry thinks it has had enough of that.
I will not go through the whole list, but one or two at the end might interest some Canadians. In Bermuda there are no advertising billboards and no car rentals. However, nowhere in the Bermuda Formula, as it is called, is there anything like the government intervention in business or in the economy we know here. Bermuda has a very simple and straightforward tax system, namely, and I quote the premier's remarks again:
There's no income tax in Bermuda, nor a profits tax, nor a capital gains tax. The bulk of our revenue comes from customs duties...
This suggestion has been made by me previously in this House, and some have said that it would be a retrogressive step. However, I note that the same exemptions I suggested are allowed by the government of Bermuda. Those cover basic foods like meat, fresh fruit and vegetables. It is possible to exempt the essentials of life from duties of all kinds and still achieve a certain balance. I do not think I should dwell any longer on Bermuda or other countries. We have enough problems here.
We on this side of the House are often asked what we would propose in order to solve the problems which the government seems to be unable to solve. I would like to mention a few proposals which come to my mind. I am not in any way attempting to write our program for the next election or to commit my leader or my colleagues, but some of these ideas have been talked about, and I like them.
Tax cuts would stimulate the economy. The government might say it has cut taxes, but its own advisers have said that those cuts were not enough and were not made soon enough.
[Mr. Clarke.l
As all Canadians are going to find out when they fill out their income tax forms in April, the provinces are going to take away the $2 billion tax reduction the Minister of Finance allowed, because in negotiations between the federal and provincial governments the formula was changed. I recommend that Canadians not spend the money the minister has given us because the provinces will take a good portion of it.
In British Columbia the tax rate for 1976 was 31.5 per cent. The rate for 1977 is 46 per cent, an increase of nearly 50 per cent. I do not think we can anticipate any great stimulation as a result of the gift from the Minister of Finance.
Is a massive tax cut inflationary? I have to say no. I hope I have illustrated that the speed at which the economy turns around is not what creates inflation; it is the speed at which the government spends, and overspends, taxpayers' dollars. If a massive tax cut is not inflationary, why do we not allow it? The government says that if it did, it could not balance the budget. It says that if it cuts taxes to the extent needed to get the economy going again, there will not be enough revenue to balance the budget, and there will be greater deficits. There is a response to that, and to illustrate I will cite the example of what happened in the United States. In the mid-1950s there was what was then a massive tax reduction of some $11 billion. At the end of that particular year when revenues were totalled, it was found that the whole $11 billion was recovered in increased revenues. There was no budget deficit created as a result of giving that money back to the people. If that seems like a strange equation, let me put it in a slightly different way.
At the moment 800,000 people in Canada are unemployed. Each of them is drawing an average of $6,000 out of the treasury. These people make no contribution to the federal treasury because their incomes are too small. They are taking out all the time. If we can get things going again and if the private sector is given the opportunity to provide jobs, which it can do, those unemployed Canadians will have the opportunity to become workers and taxpayers instead of remaining a drain on the economy.
I suppose we cannot eliminate unemployment altogether, but let us suppose we could cut unemployment insurance payments by $3 billion by putting people to work. The payments amount to over $4 billion, so that would be a cut of about 75 per cent. I am sure the private sector is capable of putting those people to work if there is demand. If we are talking about a tax cut of about $3 billion, we can see that there is the possibility of having things in balance again. I know this is an oversimplification, but in a debate such as this it is only possible to leave the details for another time. After all, we are talking about policy. Instead of saying that what we have done is the best we can do, we should be doing more.
I have already talked about the inflationary aspects of government spending. The government should consider cutting its expenditures. We on this side are always asked what we would cut and are accused of criticizing the government when it does, but if we could get inflation under control, the added expenditures as a result of indexing would not be necessary.
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What a boon that would be! I said earlier that the problem is not indexing. The problem is inflation, and if we can get that problem licked, the problem of indexing would also be solved. The Prime Minister said he would wrestle inflation to the ground. He therefore must think that there is some hope of getting inflation under control.
I previously mentioned the unemployment insurance deficit of about $2 billion. I think it is unfair that taxpayers who are not entitled to unemployment insurance benefits should be called upon to pick up a portion of the deficit. That deficit is an inflationary expenditure which the Unemployment Insurance Commission makes every year. Many self-employed people, retired people, young people and others who are not entitled to unemployment insurance benefits have to pay their share of the deficit.
Another matter the government might examine is the cost of operating the House of Commons. It costs $80 million a year to operate this House. That is not a big price for democracy, but it works out to about $9,000 per hour. I suppose one could say we wasted $18,000 last night with our bell ringing effort.
It is the intention of the government to increase the representation in the House of Commons every ten years until the turn of the century. Many of my colleagues ask why we need a larger House of Commons. At the moment each of us represents 85,000 or 90,000 people. Other countries have much larger constituencies. In the United States, for instance, each member of Congress represents about 400,000 constituents.
Another major area that the government should get under control is Crown corporations. Is it really necessary for the Canadian Broadcasting Corporation to show a loss of something like $400 million or for the Post Office to lose about $600 million? I do not know of any other business which manages to spend $2 for every $1 of revenue. The government has not given sufficient consideration to these areas.
We must ask ourselves why the government has such a lackadaisical, don't care attitude toward inflation. One reason that springs to mind is that the government itself is the chief beneficiary of inflation, so why should it do anything to control it? It borrows money in year I and pays it back in year 20 with dollars only worth half what they were in year 1. It pays interest on bonds and borrowings at about 8 per cent, which is lower than the rate of inflation, so the taxpayer is already going in the hole. Then it adds that on to his other income and charges him tax on it as well. Things are very bad for the individual but they are good for the government, so it is easy to see why the government wants to continue having inflation. It has the tools at hand, it has the controls it needs to do something about inflation, but it will not because it does not see that as a popular measure.
Last week the Standing Committee on Finance, Trade and Economic Affairs visited Washington to talk to economists there. The theme with liberal economists there was just the same-and I use the small "1" liberal advisedly. They said they had reduced inflation to 6 per cent and, although they
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knew that is still too high and will have disastrous results in the long run, they were advising the government not to do anything about it for a few years.
In a recent speech President Carter of the United States said that he hoped to balance the budget by 1981. Nothing that the economists could propose was seen as a politically acceptable solution to inflation. They know how to solve the problem all right, but the government will not allow them to do it. I suggest, Mr. Speaker, that a new government in this country would show that something could be done and something would be done.
I am afraid I have gone on for a long time, Mr. Speaker, but it is important to bring some of these points up in the debate, and I hope it will be a rousing debate that follows.
To get back to Washington for a moment, after a depressing week listening to all these liberal economists saying that they did not know what to do, or were not willing to do anything about inflation, the one bright spot was provided by the former secretary of the treasury of the United States, William Simon. It is worth noting that Mr. Simon was a long-time personal and political friend of a former minister of finance in Canada, Mr. John Turner. Mr. Simon told us that he frequently came to Canada to comfort his friend who was having a very difficult time trying to talk this government out of imposing controls. There is absolutely no doubt in my mind that the former minister of finance knew that controls would not solve our problems and that he refused to implement them. It is particularly interesting to note that not three weeks after Mr. Turner's resignation the Prime Minister announced the program of controls.
I hope I have made it clear, Mr. Speaker, that the responsibility in this matter lies with the government. As I have illustrated, using the example of the Minister of Justice, the government is not using its own money when it hands out largesse. The government is a trustee of the money it takes from the people of Canada and has a duty to spend it more wisely than has been evidenced in the last ten years or more.
Inflation must be reduced. After 2'A years of controls, however, it is increasing, as the government's own figures show. Hon. members opposite seem to think there is something strange in what I am saying, but the strange thing is that nothing has been done on that side to solve this problem which is hurting all of us and bringing the country to the brink of financial collapse.
In ten years this administration has done nothing to solve the problems of inflation and unemployment, nor the over-all economic problems in the country. It is absolutely vital that some positive action be taken if we are not to face economic collapse.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, what we are witnessing with this bill is another marvellous reversal in the series by the Prime Minister (Mr. Trudeau). Canadians will recall that in 1974 he took off his jacket,
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loosened his shirt collar, slid down his tie, and campaigned in his great, vigorous, honest way against wage and price controls. What a "calamitous disaster", to use an old phrase from a different prime minister, would be inflicted upon Canada if we were to have such a system of controls. That is what he said in 1974.
In 1975 the government indicated that things were in a terrible state. Inflation was 9.5 per cent, and it said we needed a system of wage and price controls. Unemployment was 7.2 per cent. The Prime Minister said the two were connected. He said that when you have inflation running at that rate, and when it is due to price pressure generated by excessive wage increases-and, of course, we do not accept that argument- then you have unemployment. That is when he brought in wage and price controls. The bill now before us is supposed to terminate those controls over a period of time.
We now have another reversal. The controls program that has been with us since the fall of 1975 is to be dropped at precisely the time conditions are worse than when those controls were introduced-at precisely the time the statistical data for inflation and unemployment are worse than they were in the fall of 1975. This appears to be insane if you believe in the program at all.


Mr. Collenette:: Are you arguing for more controls?


John Edward Broadbent: Mr. Speaker, I heard a voice of wisdom from the back bench over there and I would be glad if the hon. member would give me a question.


David Michael Collenette: Mr. Speaker, it is very good of the hon. member for Oshawa-Whitby (Mr. Broadbent) to give up his time. Are he and his party arguing this afternoon that the controls program should remain? After making speeches in this House and going up and down the country speaking against the program, are they now changing their point of view and arguing for more controls?


John Edward Broadbent: Mr. Speaker, given the quality of that question, the hon. member will be in cabinet in two weeks. It is a gem. He asks if we are now arguing for this system of controls. Of course not. We opposed them in 1975, 1976 and 1977, and we opposed these kinds of controls in the election campaign of 1974. At least we were consistent.
The monumental capacity for hypocrisy of the Liberal party to attack the controls in 1974 was for cynical political reasons. It is worse now, and at a time when it is worse in terms of unemployment and inflation they lift the controls. If you believe in a program-that is the point I was trying to make- particularly for Liberal members of this House, if they believe in the set of controls that we now have, why in God's name take them off now? The rate of inflation, Mr. Speaker, for the last three months has been 11.2 per cent.


An hon. Member:: Shame!


John Edward Broadbent: That is the statistical trend. The figure we got recently was 9.5 per cent year over year. What is important in economics is not a one month figure but a three month trend, and the three month trend is 11.2 per cent. I say to the Liberals, and I say particularly to the female member of the cabinet who is opposite and who is supporting the system of controls-she comes from the province of British Columbia which has concerns about inflation-how can anyone support a policy that was justified at a time when inflation was 10.9 per cent, and now say let's take it off when inflation is running at 11.2 per cent? Only the intellectual culpability of a Liberal can accept that. It just boggles the mind.
The argument made in 1975 was that unemployment which was 7.2 per cent then, was in part generated by the kind of inflation we were experiencing. Unemployment now, as everyone knows except the government, is 8.5 per cent, so it is up too. If they really believe inflation is causing unemployment, and they really believe their controls program matters a damn in terms of efficacy, they should leave it in effect and not take it off.
But of course, Mr. Speaker, every Canadian knows that with the kind of controls program we had, it had no effect on inflation at all, except there has been an impact on one part of the Canadian community. That, of course, is the impact on the wage and salary earner. The program has been reasonably effective in holding down incomes of working Canadians. It has not affected prices. Let me just give you some examples. I gave you the running rate of inflation at 11.2 per cent which means we are back at double digit inflation in Canada. What about some concrete examples? The reality is that where the government could have been effective in controlling prices, they haven't done anything. Not a thing. I will give you some prices that, if the government had been interested, could have produced a real effect on the cost of living in terms of their impact on Canadians.
Consider food prices first of all. I will concede the argument that food prices, which have been a major source of price increases in Canada, have not been subject to any realistic wage controls by a national government when those foods are imported from abroad. I will concede that. One of the reasons for opposing this particular set of controls was that you could not control imported prices. If I remember correctly, the Prime Minister said back in the campaign of 1974 that you could not control import prices. We agree with that. There are other sectors, Mr. Speaker. And I want to stress, in all seriousness that if the government had been concerned about inflation, if it is concerned about inflation now, it could move and it could do something.
With respect to house prices they are up 9 per cent year over year. My party has said "move decisively on mortgages" because if you control mortgage prices you can hold mortgages down. It does not just affect the would-be home owner, it affects the men and women who rent their accommodation, because they pay the cost of mortgages indirectly through their rent levels.


Ramon John Hnatyshyn: Aren't those controls?
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John Edward Broadbent: Yes, indeed, we favour some kinds of controls.


Ramon John Hnatyshyn: Let's put it on the record.


John Edward Broadbent: I say to the hon. member that it is this set of controls we oppose. The Liberals nod sagely. Let me say-


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: The hon. member for Oshawa-Whitby (Mr. Broadbent) has the floor for the purpose of making a speech, and I suggest we listen to him.


John Edward Broadbent: Let me state it as clearly and as succinctly, and I must emphasize, as simply as possible so the Liberals will understand it, that the New Democratic Party does indeed believe in some kinds of control program in certain sectors. In any advanced economy anywhere in the world controls have been in effect. If they knew what they were doing, a selection could be made of certain sectors of the economy and then it makes sense to interfere with the market place. What we have objected to is this abysmal set of controls which the Liberals have inflicted on the people of Canada with the only result being that of holding wages and salaries down while letting prices go up. That is what we oppose.
House prices, as I indicated, are up year over year by some 9 per cent. On a $50,000 house, which is not out of line unfortunately for a typical family buying in most urban parts of Canada, that means year over year an increase of around $4,500 in price. We have calculated that because of this government's attitude on mortgages, not moving in and holding them down, with the cumulative impact over the life of the typical mortgage with that kind of a price increase would be $12,000. A family would have to pay this amount in additional cost just as a result of the year over year increase in the price of a house. So mortgages are one sector, I repeat, not just for the home owner but for the renters, where the government could have moved in with the Bank Act and forced the banks to bring down mortgages, making changes in the regulations to ensure that the banks put up money at a low level in mortgages.
Another area of cost that affects most families in Canada is that of the energy prices. What has the Government of Canada done about that? It has allowed the oil industry, the multinationals, to charge Canadians world prices for our own oil resources. What has this meant? For example it meant that they put up by $1 a barrel the price of oil last July, with another $1 a barrel on January 1, this year. Its accumulated impact on ordinary Canadian families, we have calculated in terms of cost. The increase in cost to drive cars and heat homes has been $150 a year. That cost could have been controlled and held down. Instead of permitting oil companies to cash in on decisions that were made a few years ago in the Middle East by the oil producing cartel, instead of permitting that cartel to have its hands stretched across our border and charge Canadians these prices, we could have held down oil prices and reduced the cost of living for Canadians.
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Another practical matter and an area within federal jurisdiction, and where the government could have moved in on, is that of car prices. Most Canadians buy cars. Most families have them. We have an agreement with the United States that is supposed to ensure price parity between the two countries. Instead we get constant escalation of Canadian prices that are out of line with the goal of price parity. The government should have told the automotive companies that there could be no price increase this year until the prices are in line with the United States for the same products. Instead, the major manufacturers just announced they will increase their prices by 3 per cent. This will mean a $150 price increase for a typical car. Most Canadians buy their cars on time over a three-year period, paying 12 per cent or 18 per cent interest. This will increase the interest charges they will have to pay.
If the government were committed to selective action, there are a number of areas like that where it could have some real impact on prices. I refer to energy, housing, car prices, and there are others. I do not want to belabour the point this afternoon.


An hon. Member:: Good.


John Edward Broadbent: A Liberal member says "good". There is always a capacity for massive indigestion whenever one feeds a Liberal the truth.
I will not string out the list of particular categories of price areas that affect a typical family that could have been acted upon on a selective basis by a government committed to dealing with inflation. However, we did not have that. We had this bogus controls program which, as I said, simply ensured the restriction and inhibition of wage and salary increases for ordinary Canadians.
I will not take quite as much time as the second speaker on this bill. I would like to indicate in my comments the general direction that the New Democratic Party believes is required in dealing with an economy such as ours at this time. Although I will be brief this afternoon, this is an illustration in short form of a general policy that has been developed and enunciated in the past.
First, we believe the Government of Canada ought to recognize at long last what has been accepted by governments as different as those of Japan, France, Sweden and West Germany. Two of those countries have social democratic governments, two do not. What they all have in common is a commitment to national economic planning. Entailed in that is a sophisticated approach to developing certain industrial sectors to ensure employment. It is no accident that all of those countries I have just mentioned have unemployment rates that are not even half the unemployment level in Canada. I am saying this in the context of dealing with inflation as well.
Those countries take sophisticated counter-cyclical policies over a period of time, not to remove entirely but to try to level out the cyclical nature of market economies so that the impact of inflation is minimized. That requires a commitment to
80027-69'/2

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Anti-Inflation Act
national economic planning. It requires a commitment by our national government to recognize that in terms of world competition, in times of economic forces on the global scale, our national government should play a leading role in managing the economy. That we have not had.
Second, and in relation to that, there is the very important connection between production and inflation. It is not a simple direct connection, but there is some connection. When you have a million people who are unemployed and a manufacturing sector operating at only 82 per cent capacity, your economy is not producing the goods and services which, if it were producing, would have an effect on driving down prices.
There is a connection between unemployment levels and inflation. If you had a sensibly planned economy, one that ensured investment was going into the right sectors, and you had something approaching full employment, that would have an impact on driving down prices in certain key sectors. Again, we do not have that. Instead, we have a million unemployed, the worst level since the great depression.
Third, and I gave some examples of this earlier, in our country we need a system of direct controls in certain sectors in terms of prices, either because the prices are subject to oligopolistic action by a few firms in the economy and require direct government intervention to protect the consumer, or because we believe in society the particular price of a certain commodity for its own sake ought to be controlled and held down. In the latter case, I think of something like mortgages.
If you believe that housing is a social right, as my party does, through community or government action you have to take the kind of steps we took years ago with medicare and hospitalization to make that effectively a social right. That means dealing with the banks in a tough minded way to bring down, for example, the price of mortgages. The point I make is that you need effective price control in a certain specific number of sectors. We have not had that with this government.
As a concrete measure to improve circumstances for Canadian consumers, we have recommended, on behalf of my party as recently as last week in Toronto, a reduction in the sales tax, which is regressive. It hits the poor person, whether a pensioner, an elderly person living in Cape Breton, or his or her equivalent living in British Columbia. Sales tax hits the pensioner and the millionaire. It is very regressive.
In terms of dealing with the impact of rising costs and in terms of job creation, we have recommended a reduction in sales tax. Related to that, there should be serious negotiation between the federal government and the provinces so that the federal government can compensate the provinces in some way for the lost revenue they would experience in a reduction in the sales tax.
I want to stress that reducing the sales tax is a most equitable kind of proposal because it would bring proportionately greater benefits to low income people. That is something under the present circumstances which the government should act upon, perhaps even as an interim measure.
[Mr. Broadbent.l
Finally, I want to propose on behalf of my party that we have to recognize the divergent needs and interests of the Canadian economy. We have to recognize that Canadians are prepared, and indeed want to work hard. They will be co-operative in terms of wage and salary demands if the government will set an example. By that I mean a real example in terms of bringing forward a coherent government policy, something which in other countries has been called a social compact. I cannot stress too much the relevance of that.
In Sweden, West Germany, and more recently in Great Britain, the governments of those countries know they can get wage and salary co-operation from ordinary men and women. If in certain sectors jobs are threatened and wage and salary increases are out of line, ordinary Canadians can perceive that well in advance. However, you cannot expect ordinary Canadians to co-operate with regard to wage and salary demands if you maintain simultaneously an unfair tax system that ensures great disparities in Canada. The same is true if you maintain simultaneously a housing program which ensures that the bottom 20 per cent of Canadians is inadequately housed or if you do not do anything about energy prices.
The point I am making is that in a mixed economy the kind of controls we have had are not the sensible kind. They are unfair and unworkable. We are seeing the results of that. They need to have a comprehensive approach. 1 do not care about the label. In Great Britain they call it the social compact approach. They have been doing it in other countries for some time without the label. What is important is the idea. The idea behind it is a sense of fairness to everyone.
What is so fundamentally wrong with the present set of controls? The present set of controls holds down wage and salary increases while permitting prices to go up. We cannot tolerate that kind of system any longer.
Let me illustrate by one final example the abysmal consequences of the kind of unfair thinking which lies behind this sort of controls program. The government is in the process of phasing out the controls program entirely. The major change it introduces, not in this bill but by regulation, is that it is going to permit wage and salary increases to go up in the coming year by some 6 per cent. What does this mean in terms of its impact on ordinary Canadians? It means this: if inflation is running at 11.2 per cent, as it is, and if wage and salary increases are to be restricted to 6 per cent, Canadians from coast to coast will suffer a net loss in real income. Let me give an example.
Let us assume the rate of inflation is 10 per cent. A man or woman earning $15,000 and getting the 6 per cent increase would suffer a decline in real income in 1978 amounting to $12 a week. But there is no guarantee a 6 per cent increase will be forthcoming, and in its absence the decline in real income in 1978 would be $30 a week. That will be the result of the government's program. Wage and salary earners are being left without any defence.
January 24, 1978

The government is saying to men and women, bank clerks, department store salesmen, unorganized workers in Atlantic Canada, "All you can get is 6 per cent, but inflation will continue unchecked." It is this kind of control program which the New Democratic Party will not tolerate. It is time it was brought to an abrupt end. It is time we put in its place a program which showed a commitment to national economic leadership, a program which would set out goals for employment and realistic targets in terms of reducing the rate at which prices rise.
In the months ahead, in a year in which we all expect an election, I, along with other members of my party, will be producing detailed proposals which we believe will not only bring a greater degree of efficiency to the Canadian economy but a much greater degree of justice, also.


Some hon. Members:: Hear, hear!


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker,
I welcome this opportunity to make my contribution to the debate on Bill C-18. The Anti-Inflation Board is one of the main contributors to our economic problems, including the record number of the unemployed; it is one of the main reasons for the flight of business and investment capital from Canada to the United States, and one of the reasons Canada is no longer an attractive place in which to invest money.
It is no use trying to delude ourselves. Investment capital and business growth are the two most important things a country needs if it is to prosper, and until we can change the political climate the mass exodus of capital and business will continue. Not only has the AIB caused serious problems throughout its existence, but we are running into new problems as an attempt is made to remove existing controls. I refer to one report out of Quebec city where labour ministers are meeting to discuss this aspect of the matter. It states:
No consensus on the federal government's proposed monitoring agency to replace wage and price controls emerged Monday in the first day of a federal-provincial conference of labour ministers.
Four of the ten provincial ministers available for interviews were unanimous in saying they did not see any evidence at the meeting of the consensus federal Labour Minister John Munro had sought.
So it is clear there are difficult times ahead because the provincial labour ministers are not satisfied with the government's program.
I referred earlier to the number of businesses and the volume of investment capital leaving Canada out of discontent with the poor political climate created by the present administration in Ottawa, a situation aggravated by the policies of the Levesque government in Quebec. We have Levesque driving business out of Quebec on one hand, and the Liberal government in Ottawa driving business out of Canada on the other. That is a great combination, a great prospect for the reunification of this country.
It is estimated there are now 140 Canadian manufacturing or distribution firms with outlets in the State of New York. In 1976, 44 companies either moved to New York or expanded existing facilities there. Of these 25 came from Ontario and 18
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from Quebec, bringing with them $28.6 million in investment and creating 1,330 new jobs in the United States.
Northeastern states, with the support of the U.S. government, are taking full advantage of the uncertainty felt by Canadian businessmen and investors who no longer have faith in the prospects available to them in Canada under the policies of the present government, and are openly assisting them in the move to the U.S. American towns and cities along the Canadian border are blitzing Ontario, Quebec, and British Columbia with promotional campaigns aimed at luring Canadians across the line.
The mass exodus of business and capital is greatly aggravating Canadian unemployment. I have raised this issue many times with the Prime Minister (Mr. Trudeau) and with the Minister of Finance (Mr. Chretien), but they have no plan whatever designed to keep investors in this country. At the present time more than 400,000 students are graduating yearly from schools and universities in Canada and only 225,000 new jobs are being created. Unemployment is already costing Canadians more than $8 billion a year, and in the absence of any suitable programs on the part of the government the figure is likely to increase still further. In circumstances such as these the government has sought to rely on short term mini-works projects which have proved ineffective.
We in this party have for some time been calling for tax reductions. A small tax deduction will, it is true, be provided for this month, but it is by no means the total answer, and I hope the new tax incentive bill which the Minister of Finance has introduced will make venture capital more easily available to small and medium-sized businesses so that secondary industries, in particular, will be able to expand. At the present time there is no encouragement for Canadian investors to put money into secondary industries in this country. I hope the minister has this point well covered in the bill he has just introduced.
I should like at this point to offer the House further evidence of the lack of confidence in this country felt by investors. Olympia and York Developments Limited of Toronto laid out $350 million a few weeks ago to buy nine skyscrapers in New York city, becoming overnight the largest Canadian investors in American real estate. In 1976 Canadians invested $5.9 billion in U.S. companies, an increase of $500 million over the previous year. In fact Canadians are the largest investors in the United States today, accounting for 10 per cent of all foreign direct investment activity in that country. All this is very discouraging.
Just about every magazine one picks up contains an article on this very serious situation. One such article appeared in Forbes which was entitled: "Foreign Investment In The U.S.- It Grows ... But Slowly". It is growing slowly and steadily with Canadian investment dollars. Last year $2.5 billion in real estate investment money went to the United States.
Canadian investors now own 30 per cent of the major high rise apartments in the city of Seattle, Washington. Also 17

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major complexes in the United States are being developed with Canadian money. Investors have no faith in Canada or its government, and thus they are getting out. The net outflow of capital has been growing in recent years. In 1976, even though foreign economies were plagued by stagnation, Canadians invested S555 million abroad. For the first time in at least 25 years, 1976 was the first year in which foreigners actually reduced the value of their holdings in Canada by $395 million, because Canada is no longer an attractive place to invest money. Figures for the first quarter of 1977 show that the net outflow is continuing: $35 million in the first quarter, at an annual rate of $140 million.
Some Canadian investment counsellors are concerned about this irreversible trend. One such firm is Peter Henry Jerch & Associates of Winnipeg, Manitoba. That firm points out that this mass exodus of investment capital and business leaving Canada has been going on for the last few years. Mr. P. H. Jerch in a document prepared by his firm points out the following:
Countries or for that matter provinces which have nationalistic, leftist or extremely strong bureaucratic tendencies make striving and successful entrepreneurs feel uncomfortable.
Certainly they feel uncomfortable in Canada. Mr. Jerch gave examples of 64 Canadian businesses which are planning to move to the United States or to expand there. He gives statistical information on the job loss caused by this investment money leaving Canada. Because of these Canadian firms planning to expand into the United States, there will be a loss of up to 17,000 jobs in Canada. Also he gives a perfect example of the political climate caused by socialistic governments similar to the one Manitoba previously had.
The effects of the New Democratic Party being in power for eight years were devastating to Manitoba. As an example, Mr. Jerch pointed out where $40 million of investment money was driven out of that province by the Schreyer government. Investors do not trust socialist governments. They will not make long term investments in provinces or countries where there are socialist governments. Also Mr. Jerch pointed out that this mass exodus of money from Manitoba resulted in the loss of 4,000 jobs. This trend has been slowed down somewhat by the change of government in Manitoba.
Another example which could be used is the province of Saskatchewan with Premier Blakeney nationalizing the potash industry. That put the fear of death into the minds of business investors across the United States. Also there is the Barrett government which caused serious economic problems in the province of British Columbia. An NDP government does not attract investment or business, for which there is no substitute.
I should like to comment on wage behaviour before, during, and after controls. Before controls 77 per cent of employees under AIB jurisdiction were achieving wage settlements above what the wage guidelines would have been if controls were in force. During the first year of controls, 41 per cent of employees attempted to achieve wage increases above the wage guideline. During the second year of controls only 30 per cent of employees attempted to achieve settlements above the wage

guideline. Because the third year guideline was altered to a flat 6 per cent on October 20, the relationship between wage gains attempted and allowed is not clear. Even those wage settlements found to be excessive by AIB attempted to overshoot the wage guidelines by a smaller margin. Before controls, average wage settlements were 15.6 per cent, where 10.9 per cent was justified under the hypothetical guidelines-a 4.7 percentage point in the first year of controls and to 0.2 in the second.
While it is clear that the AIB had some considerable effect on wage settlements, it is not clear that the AIB was the sole or even the principal determinant of wage settlements. The over-all state of the economy had a very significant influence on wage demands, as many unions and workers realized that high wage gains could lead to a loss of jobs due to a corporation s growing inability to compete on domestic and world markets.
The behaviour of Canadian average industrial wages compared to those in the United States is instructive in this respect. Without controls the United States has reduced inflation sharply. Its correction took place at a high cost in unemployment, but United States unemployment rates have been below Canadian rates for ten months, and they have experienced lower inflation since early 1975.
I should like to refer to the percentage increase in manufacturing hourly earnings as between the United States and Canada. In 1976 the increase for Canada was 13.6 per cent, whereas the increase for the United States was 7.7 per cent. In 1977 the increase for Canada was 10.5 per cent, whereas the increase for the United States was 8.6 per cent. If economic conditions have the bearing on wage rates that is suggested, then pressures for large wage adjustments following decontrol will be limited by workers' fears of losing their jobs.
Should economic restraint fail to limit wage gains, it is the Conservative party policy that for the six-month to 12-month period following decontrol, unions negotiating with the top 200 corporations will be required to submit wage settlements to the Department of Consumer and Corporate Affairs 30 days before a contract can take effect. If found to be excessive, and where publicity and suasion fail, the then Minister of Consumer and Corporate Affairs may refer the increase to cabinet. As a last resort measure, cabinet could roll back the wage.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
[ Translation]

Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised at the time of adjournment are as follows: the hon. member for Capilano (Mr. Huntington)-Transport-Date when harbour
January 24, 1978

patrol boat will be provided for Vancouver; the hon. member for York-Simcoe (Mr. Stevens)-The Canadian Economy- Reason for continuing high level of inflation-Date when level will reach four per cent; the hon. member for Ottawa-Vanier (Mr. Gauthier)-Administration of Justice-Request for amendment to permit use of French in Ontario courts.


PRIVATE MEMBERS' PUBLIC BILLS
Mr. Deputy Speaker:: 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, and notices of motions.
I wish to bring to the attention of hon. members the fact that the notations "allowed to stand at the request of the government" which appeared on the order paper at the time we adjourned for Christmas have been removed from the various orders under public bills as listed on today's order paper. This was an administrative decision taken by me. It arose out of my ruling of December 5, 1977, and the decision I made in the House on December 12, 1977, which had the effect of removing similar notations under notices of motions. Actually all that did was to eliminate any notation that had been made under a motion or a notice of motion for a private member's public bill, so that my ruling of December 5 will not be retroactive and the only note that would appear from now on with regard to notices of motions for public bills would be those that would result from the proceedings in the private members' hour following my decision of December 5.
There seems to be a disposition to proceed with Bill C-215 appearing in the name of the hon. member for London East (Mr. Turner). If there is unanimous consent, orders Nos. 2, 4, 8, 9, 10 and 13 will be stood. Is that agreed?


Some hon. Members:: Agreed.


CRIMINAL CODE
Mr. J. Larry Condon (for Mr. Turner (London East)) moved: that Bill C-215, to amend the Criminal Code (NSF cheques) be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, the purpose of Bill C-215 where a cheque has been returned "NSF", is to delay the raising of a presumption of false pretences until 15 days after notification by the bank, and to allow the person who made the cheque to
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avoid criminal liability by paying off the debt within the period of grace.
First of all, I should like to bring to the attention of the House the fact that this bill was put forward by the hon. member for London East (Mr. Turner), but because the rules of the House do not permit occupants of the chair to speak on their bills, I shall do so for the hon. member. When the time comes to discuss changes in the rules of the House, this is one change which I believe should be considered because our rules take away a very important function from members. I believe that all members should be allowed to speak on any bill they put forward.
As I said, the purpose of this bill is to try to improve the law so as to protect better, first, small businessmen; second, landlords; and third, people who suffer most from NSF cheques. In the past the recipients of NSF cheques have had no other recourse but to go to the small claims court or to go through the process of the criminal law to receive the money which they have lost.
There are a good many reasons for which people write bad cheques. In some cases it is an honest error on the part of the drawer of the cheque, as he is called by banks, and in most cases he will redeem the worthless cheque promptly after being notified that his cheque was dishonoured. In such cases payment, or even an arrangement to pay, is sufficient evidence to indicate that the cheque drawer did not commit fraud as would otherwise appear.
As has become evident in the last nine or ten years, those who have suffered most from NSF cheques have been small businessmen who, on seeing a person with the intention of paying a bill, took the word of the man as indicated on a piece of paper which designates to the person receiving it that money will be available when the cheque is put through the normal banking processes. One of the problems is that some people who make out such cheques have no intention of honouring them. Certainly the law has not been sufficiently strong to protect the recipients of such cheques, and this has caused many problems.
Let us take a look at the Ontario Landlords and Tenants Act. For example, a person who intends to rent an apartment pays the rent in advance by cheque. Three or four months later when the landlord tells him the cheque has bounced, the person says that he intended to honour the cheque but that since now it is October or November, the landlord cannot kick him out anyway. This puts the landlord in a very difficult position because he forfeits four or five months at a time of year when it is difficult to rent the apartment. It puts him in the position of having to house the tenant for free. In such circumstances the landlord cannot enforce the law under which he owns that property and for which he expects money.
Another problem we find is when a person purchases some goods. In the past the government has made an attempt to assist small businessmen and to give them an opportunity to develop their businesses, but the latter have been restricted by the law under which it is possible for people to pay for their purchases by cheque. The small businessman depends on the

January 24, 1978
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local person to walk in, pay cash for the goods and thus make money move around so that the businessman can buy more goods and increase his assets. It is not only businessmen who have suffered over the years. People who do not understand the law have also been the victims.
I should like to read into the record a letter written to the Prime Minister (Mr. Trudeau), a copy of which was sent to the hon. member for London East. It is a very sad story of a person who was given poor advice and who then suffered a calamity. It reads as follows:
I'm writing to you begging for help. I should explain what has happened to me and my family. I am 37 years old and have been working since I was 16 with my present employer, not for very much money but it has been steady work, saving everything that I could for me, my wife and two children. Recently I was misled by a real estate salesman to invest in second mortgages. I took all of our savings and did so. The total amount was $20,000. After five months the postdated cheques went NSF-
I assume this refers to the person making payments on the second mortgage.
-all of them on four properties, so the first mortgage holder foreclosed on the properties, and that left me helpless because I had no money to carry them on. Since this has happened I have not been able to sleep for a month. I'm on the verge of losing my job because my nerves have been so bad that my hands can't stop shaking since this has happened. I would appreciate if you can help me before I go out of my mind. I don't know anybody else that I can turn to. That is why I'm going to the top. Forgive me for the poor English as I came to Canada when I was twelve and had not gone to school in Italy and had only four years of school here in Canada. I hope you can help us, as I have not felt so low in life before.
Thank you. Hope to hear from you-
This is a typical example of what is happening. This gentleman has a family; he has worked very hard, saved $20,000, and finally felt he could be self-sufficient. He put his money into second mortgages so that he could raise his family and give his children the education he never had. This happened because of poor advice and because of the law we have now which does not protect people with little education. It is not just businessmen and landlords who suffer; the little fellow suffers as well.
How do you answer a letter like that? Some of my colleagues who are in the legal profession might say this gentleman could have purchased the properties, got more money and taken over the mortgage. That would be very simple for some people who are educated, but this gentleman lost all his money and possibly will lose his job because of his nervous problems and his worry. His money has been stolen, and he has no recourse. This is just one of the reasons why this bill in the name of the hon. member for London East should be passed.
I admit that I am not a lawyer, but I think we have a moral as well as a legal obligation to protect people like this gentleman. We talk about taking care of people of all kinds, but I think we have forgotten the people who count the most, the hard workers who lose their money because of this quirk in the law. They lose their money because of a lack of knowledge and because they do not do things which perhaps others with a knowledge of the law would do.

Our criminal law provides no satisfaction for the merchant, the landlord, or for ladies and gentlemen like the gentleman to whom I referred. The law does not provide for repayment, nor does it deter others from committing this kind of crime. Offenders walk down the street laughing. They say, "If I can get away with it, why not?" French law treats this as an offence. The severity of punishment depends on the amount of money involved. The fraud is considered serious if the NSF cheque is between $200 and $700. The penalty is from one to five years. Some in this country may think that is harsh, but I wonder if one to five years is too harsh in the case I have cited involving $20,000. The victim in this case, as well as his family, suffered frustration.
For the sake of the consumer in the market place and every merchant with whom he deals, I strongly suggest that there is a need for a simple and effective law which would identify and eliminate cheque counterfeiters and bring about prosecution by the Crown without requiring the merchant, the landlord, or the little fellow to weigh the cost and the benefit of trying to collect payments on account of bad cheques. In my view the proposed bill would provide such a law, and I heartily support it.


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, it is indeed a pleasure for me to speak in support of Bill C-215, sponsored by the hon. member for London East (Mr. Turner). This bill would do something concrete to combat the ever-increasing number of NSF cheques, the elasticity of which is also increasing and stretching from one end of Canada to the other.
At present the Criminal Code of Canada states that if a person obtains any merchandise by means of a cheque dishonoured for insufficient funds, a false pretence will be assumed unless the court is satisfied by evidence that such cheque would be honoured if it were presented for payment within a reasonable time after it was issued. There is no doubt in my mind that the issuing of a cheque without funds in a bank account to back it up is nothing but the perpetration of fraud by the cheque issuer. This should no longer be tolerated. It is a well known and established fact that 90 per cent of the people who knowingly write cheques against bank accounts with insufficient funds have no intention of ever paying.
Too many people do not realize that the ability to pay by cheque is not only a shopping convenience but a customer privilege as well. It is certainly not a divine right.
Too few cheque writers understand that until such time as a cheque clears the bank it is merely a promise to pay and represents the granting of credit. Occasionally an accounting error on the part of a cheque writer may cause an overdrawing of his finances. Honest mistakes are promptly rectified, and honest mistakes occur in the vast majority of cases.
Writing an NSF cheque in Canada is not in itself a criminal offence unless it can be proved it was intended in the first place to be NSF. Proving this can be very difficult.
Bill C-215 would provide a mechanism by which to put some teeth into the law and to prevent the misuse of cheques. Cheques should be a satisfactory way of making payments.
January 24, 1978

The only alternative would be to stop accepting cheques altogether. I think all of us would hate to see that happen because of the hardship that would result. The provisions of Bill C-215 would give the writer of an NSF cheque 30 days to satisfy the debt after notification by the business concerned. If the cheque is not covered in the bank by that time, the purchase involved would be presumed to have been obtained by false pretences, and court procedures would be the next course of action.
This bill would go a long way toward deterring individuals who have habitually passed bad cheques. This bill would help all businessmen who have frequently been stung by fraudulent and unscrupulous individuals. I urge hon. members to support this bill so that it can become law as quickly as possible.


Mr. John Gilbert (Broadview):: Mr. Speaker, the hon. member for London East (Mr. Turner) should be commended for bringing this matter forward in the form of Bill C-215, and the hon. member for Middlesex-London-Lambton (Mr. Condon) should be congratulated for setting out the problem in a very precise and persuasive way.
There are certain dangers in Bill C-215 which I should like to discuss, Mr. Speaker. Before doing so, I should say that I think this bill may be of sufficient importance to have the subject matter referred to the Standing Committee on Justice and Legal Affairs where expert witnesses could be called. Businessmen, bankers, and law enforcement officers, for instance, could focus on the problem and make recommendations.
The bill gives a 15-day grace period after the bank has notified the person who issued the cheque that there are not sufficient moneys in the account to cover it. If the amount set forth in the cheque is not paid, then the presumption of false pretences applies and if it cannot be proven that the person who issued the cheque did so without any intention to deceive the payee, there would be the possibility of imprisonment.
When I heard the hon. member for Middlesex-London-Lambton, who introduced the bill on behalf of its sponsor, say that in the case where someone was duped out of $20,000 on a mortgage he recommended imprisonment for one to five years, I thought that illustrated the importance of this discussion.
It would be trite to say that we live in a credit society rather than a cash society, Mr. Speaker. Our parents would never buy anything unless they had the cash to pay for it, but we are a different generation. I notice that my children lean to credit buying. In a credit society with the tremendous advertising pressures that there are, many people buy things they cannot pay for and sometimes issue cheques hoping that by the time they are presented to the bank they will have had a chance to deposit the money to meet them. In many cases this does not happen.
I think businessmen and bankers have a responsibility to tone down advertising aimed at young people today. We hear of things like "the red convertible loan." Young people borrow
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money, buy the red convertible, and then find they cannot pay for it. There is constant radio and television pressure on young people to buy, without impressing upon them their responsibility to pay. I think there is an onus on businessmen and bankers to ensure that young people are not pressured into over-buying.
This bill puts the onus on bankers to notify anyone who issues an NSF cheque that, if it is not covered within 15 days of the notification, there will be a presumption of false pretences. Again, it is trite to say that most businesses include in the cost price of an article the cost to them of loss through theft and loss suffered as a result of bad cheques. Of course 95 per cent of people in the community pay for those two cost factors.
As it stands, Bill C-15 would impose a tremendous workload on the courts with charges of false pretences as a result of NSF cheques. The present trend is to unclog the courts and not bring to them matters which are of a personal nature- squabbles between neighbours and so on. There is an attempt to refer such matters to places other than the courts so that they can devote their time to cases where violence has been committed against the person rather than assault on the pocketbook.
I could have said shed tears over the example given by the hon. member for Middlesex-London-Lambton about the uneducated immigrant who invested his life savings of $20,000 in a mortgage and then, when the mortgagor did not pay, lost his money. It would have been interesting if the hon. member had read the reply given to that person by the Prime Minister (Mr. Trudeau).
Sometimes greed brings about loss, Mr. Speaker. This uneducated immigrant put his whole life savings of $20,000 into a second mortgage without any appreciation of what happens upon default, and without any appreciation of his responsibility for taking up the payments on the first mortgage and so on. It seems to me there is a moral obligation upon the lawyers who write these mortgages, upon real estate agents, and upon the community in general, to tell people who want to invest in mortgages, especially second mortgages, that they must be very careful not to invest their whole life savings, as they face possible loss.
When it comes to housing there should be a moral obligation on all of us to provide decent housing for Canadians at reasonable cost. We should take the profit out of housing. There is no reason why that immigrant should put his $20,000 into a second mortgage at a very high interest rate to be paid by the owner of the house. He should have directed his money into Canada Savings Bonds, or even into a bank, for lesser interest and greater security. In the final analysis, greed overcame caution.
Legal history shows that a hundred years ago we still had debtors' prisons. People who could not pay their debts were put in prison and then, of course, they could not pay their debts at all. We wisely got rid of debtors' prisons and gave people an opportunity to pay. Thank goodness we did get rid of them because they imposed an impossible burden on the debtor.

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Imagine the result if the recommendation of the hon. member for Middlesex-London-Lambton were accepted and a sentence of one to five years' imprisonment was imposed upon anyone who failed to pay debt. The Canadian people would ultimately pay the $15,000 to $18,000 per year it costs to keep that person in prison, not taking into account the moneys that would have to be paid to maintain any dependants. That does not seem to be a very good solution.
The solution, and it is a difficult one, is to impose upon people the responsibility to live within their means. That is not an easy task to perform and this is why, for people who experience difficulty, you have to have budget counselling which sets forth a proper budget which enables them to live within their means.
I would hope that we could refer the subject matter of this bill to the committee on justice and legal affairs and go into depth with regard to what should be done with persons who pass on NSF cheques. Certainly it hurts many people, small businessmen, landlords and so forth. It creates quite a clog on the banking system, on the criminal law system and on the law enforcement system. So I give the member for London East credit for bringing forth this matter at this time, but I respectfully suggest, Mr. Speaker, that his solution is not a good one. It does not take care of the total problem. I think we have to have the experts give us their recommendations based on their experience with regard to what should happen to a person who passes on an NSF cheque. Should that person be imprisoned? At this time I would say no. Should that person be forced to take budget counselling and eventually repay the amount of the cheque?
I think that if we were put to the ultimate test, the New Democratic Party would have to vote against the bill as it is presently constituted. But I would hope that the Parliamentary Secretary to the Minister of Justice (Mr. Young) will get to his feet and in his own persuasive and eloquent way say: "Well, the New Democratic Party has brought forth the idea that this subject matter should be referred to the committee, that we should have advice from experts and should get a report." Based on that report it may be that there should be changes to the Criminal Code affecting this situation.


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I am pleased to discuss Bill C-215 introduced by the hon. member for London East (Mr. Turner). I would like to congratulate the hon. member for having introduced this bill dealing with NSF cheques. I would only mention an idea I had while listening to the hon. member who explained the bill, the hon. member for Middlesex-London-Lambton (Mr. Condon).
The hon. member for Middlesex-London-Lambton said that people who are responsible for or who write NSF cheques should be imprisoned, that we should have a bill providing that we can imprison such a person as soon as we are certain that he is acting in bad faith by passing NSF cheques. I for one, Mr. Speaker, would like to know which one should be impris-

oned. Is it the one who writes such cheques because he is caught in the system or is it the system which drives him to do that by encouraging him to buy too much? Here is what happens. I have been in business for some 20-odd years and-


Mr. Deputy Speaker:: Order, please. The hon. member for Middlesex-London-Lambton on a point of order.


Joseph Lawrence (Larry) Condon: Mr. Speaker, I would just like to clarify one point that seems to have been brought up twice. The assumption was that if somebody passed a bad cheque he would be put in jail. I was pointing out that in France, if a bad cheque is written and the person writing the bad cheque is guilty of an offence, the term is from one to five years in jail. I must have been misunderstood if it is suggested that 1 would throw a person in jail for this offence. It was the law of France I was referring to.


Léonel Beaudoin: I thank the hon. member for Middlesex-London-Lambton for his explanation but I must say that they have a different system in France. The system in France does not relate to consumption as much as ours does here in Canada. In France they do not send credit cards right and left to heads of family, whether they are solvent or not, and then allow sons and daughters and wives to go and buy at Eaton's, Simpsons and so on with the head of family having $450, $500, $600 of bills to pay. In France they have a different system. But to explain Bill C-215 one must start with our system and not take the example of France where they have a different system.
I think small businessmen in Canada are certainly threatened by NSF cheques from their clients. I agree with what the hon. member for Middlesex-London-Lambton suggested earlier, but they are the ones who suffer the most but, on the other hand, you also remember that the small businessman often has a certain margin of credit. He too belongs to the group of people writing NSF cheques because the bank, without warning him or warning him at the last minute, cuts off his margin of credit. He has post-dated cheques for a month, two months, three months, up to 12 months to pay for a house, a car, this and that but the bank tells him: You have a client who has been refused a cheque in your name so we can no longer maintain your margin of credit.
Take an example of $5,000 or $10,000. His margin of credit is cut by 50 per cent. He too becomes a victim of the system in which we are stuck. And I say that the main culprit is the bank which did create its own problems, first by issuing credit cards to nearly everyone, second by overlapping every which way the credit of its clients or those of other branches, third by lending money it never did receive. I think banks lend money on the stroke of the pen, then revalorized that money by giving it a certain value which is purely fictitious in my mind because a chartered bank only has to deposit a fractional reserve of 16 per cent with the Bank of Canada, and as soon as it has a 16 per cent reserve with the Bank of Canada, it can then lend a client 100 per cent.
January 24, 1978

Although it is allowed to lend 100 per cent with a profit of 84 per cent on the original amount, it is not in fact a profit of 84 per cent on the amount itself but an interest profit on the 84 per cent which it never had in its coffers in the first place. But nevertheless, to revalorize the money before its customers, it says: Sir, your line of credit has been cut down to so much. So the small businessman who is so unhappy, as the hon. member put it earlier, is more or less stuck because of the action of the bank.
But I would like to return to the point made earlier by the hon. member for Middlesex-London-Lambton that the bill should provide for the imprisonment of recedivists. If such a person comes back with NSF cheques drawn against the same bank he should be sentenced to jail. But what about cheques issued last year to a Canadian milk producer? That cheque was for $3,000 or $3,500 because that milk producer had exceeded his quota and he had $214 or $241 left on his cheque. That person has some obligations with his bank and his creditors. Cheques were returned NSF because there were no funds although he had produced.
I would like to point out to the hon. member for Middlesex-London-Lambton that we should ... 1 agree with the hon. member for Broadview (Mr. Gilbert) in saying that this Bill C-215 should certainly be allowed to go through the various stages but that one should start by finding out where the evil lies, not in the mind of the hon. member, but in the initial thinking of those who care for the well-being of our economy. As to NSF cheques I think they are seldom passed in bad faith and only a few crooks make money by writing cheques without sufficient funds.
They just switch banks, those few crooks, but they only represent a small minority. If tomorrow we were to jail all those people who are of good faith, I am referring to the poor, because the cheques of the rich fellow never bounce, we would not have enough space in our jails. Furthermore, we would thereby punish those who are not responsible at all for the existing system. Mr. Speaker, when talking about Bill C-215,1 think we should also mention deceitful advertising aimed at consumers.


Mr. Lambert (Bellechasse):: Newspapers are filled with such advertising!


Léonel Beaudoin: Throughout the evening, every five, ten or 15 minutes we see advertisements being broadcast on television. Buy this today, pay tomorrow. Why so? To allow those who are filthy rich to take advantage of the poor and spoil them. This bill or a related bill should deal with that and condemn these companies which are dishonest and connive with those who lend money at rates of 9, 10, 12, 13, 14, 15 and up to 27 per cent and act in such a manner that the decent fellow, the little working man becomes insolvent and is driven to writing NSF cheques.
Once again, in ending my remarks, I would express the hope that Bill C-215 not be talked out but that it be referred to the
Criminal Code
Standing Committee for Justice and Legal Affairs and I hope that we will then start explaining these bills in a positive manner, in a broad sense, without any intention to punish the little fellow because it is the system which has failed, not him! We should start addressing ourselves to the system itself and give the individual a fighting chance because he has become insolvent on account of the very fundamental dishonesty of the system itself.


Mr. Peter Stollery (Spadina):: Mr. Speaker, I want to say a few words about Bill C-215. I will be brief as there are other members who also want to speak before we adjourn for the dinner hour.
I congratulate the sponsor of the bill. The matter of NSF cheques and what happens to them should be straightened out. If a person in Canada writes an NSF cheque while thinking that he has enough money in the bank to cover it, that is not false pretences.
The situation which we now have does not satisfy anybody. If by accident you write an NSF cheque, thinking you have enough money in the bank, you can still be taken to court where you must prove that you thought you had the money. Although you actually thought you had the money, you could be found guilty of an offence. There is also the situation of someone practising fraud who gets away with that. This is not satisfactory from anyone's point of view.
The hon. member for Broadview (Mr. Gilbert) has asked that this bill go to committee where it can be studied in order to find a satisfactory way of handling instances such as this. Such a situation has happened with me and, I am sure, many other members of this House. I have written a cheque without having enough money in the bank. When that happens you wind up with an extra charge of $2.50-and I hope someone says something about that-or you have the embarrassing situation where your cheque is returned and it looks as though you are trying to pull a fast one.
I wish to deal with another point raised by the hon. member for Broadview. What is a merchant in Canada to do? I have had the experience of running a cash register in a busy store during the Christmas season. I have okayed hundreds, if not thousands, of cheques. You are reduced to sitting there, looking the person over and hoping you are making the right decision. When okaying cheques, you calculate that a certain percentage will be bad cheques. In my experience, I cannot remember once trying to get the money for a bad cheque. If the person does it on purpose, there is nothing you can do. If it is by accident, normally they will pay the money without too much of a follow-up.
The present situation is most unsatisfactory. The only ones who benefit are the banks with their excessive charge of $2.50. If someone writes an NSF cheque for $2.50 and the bank charges an extra $2.50 as a result, that person ends up paying 100 per cent interest. Even a loan shark would feel pretty happy about that sort of situation. Therefore, this is something which must be changed.

January 24, 1978
Criminal Code
The bill puts forward the interesting proposition of allowing 15 days' grace. However, I think there are many more aspects to this whole question of cheques that are being utilized increasingly in our society. Under the credit card system, there is an interest charge of 18 per cent. Cheques have become a form of credit card system for many people. If a cheque is small, the interest becomes exceedingly excessive.
I do not know the exact amount of my telephone bill because it has changed so often recently. In any event, it is a relatively small amount. Many people pay their telephone bills as well as their hydro bills and other relatively modest amounts through the bank. Once again they are jabbed by the banking system for an excessive amount of money.
There are one or two other members who want to speak on this subject. I want again to congratulate the sponsor of the bill for bringing forward this subject, which is of interest to very many Canadians, in order that we may have a few minutes to discuss it.


Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, perhaps I might be permitted to spend a few moments putting forward some personal observations on Bill C-215. I am prompted to do so if for no other reason than that it stands in the name of the hon. member for London East (Mr. Turner); in my view, therefore, it is a matter which is deserving of serious consideration. I compliment the hon. member on bringing this legislation forward and I compliment also the hon. member for Middlesex-London-Lambton (Mr. Condon) for explaining so well the purposes of the bill.
I agree with what the bill seeks to achieve. I am not sure, however, that I agree with the means by which the sponsor and the hon. member for Middlesex-London-Lambton wish to attain those objectives. Let me first of all draw attention to a matter which is, for me, one of serious principle, though I do not say so as a lawyer. Is the Criminal Code a vehicle to be used for the enforcement of a commercial contract? In other words, should we superimpose the Criminal Code upon day to day business activities? There are great arguments on both sides. I understand the frustration of small businessmen in the London area. My own riding is very close to that area and I appreciate the frustration businessmen feel in trying to get litigation through the courts, having regard to the inadequate facilities at their disposal. I understand that a similar situation exists in Ottawa to the extent that the regional bar association has made strong representations to various levels of government.
Nevertheless, are we to use the Criminal Code in an attempt to mitigate this understandable frustration and financial loss suffered by small businessmen? I am sure the financial loss suffered by these people in the London area has been very significant indeed. Knowing the nature of the court list in that area I can well understand that a businessman would not be much inclined to say to the law enforcement agencies: "I want this case prosecuted." Because of the frustration they feel with the civil court procedure, small businessmen in the area, as

well, I am sure, in many other areas across Canada, are saying possibly: "At least we may be able to expedite our cases by resorting to the use of the Criminal Code."
This brings me back to the principle I stated: Should the Criminal Code be used to enforce commercial transactions? I do not know which side of the fence I am on. Looking at the legislation I can see certain difficulties immediately. Suppose I am a tenant and I receive a cheque from a friend or a business associate at the time my rent is due and I endorse that cheque to my landlord and it is returned stamped "NSF." Now, who is the payee? According to the cheque, I am. I, in turn, endorsed it to pay my rent. Under the bill before us, as I read it, I am in a situation in which, should the payor pay the amount of the dishonoured cheque to the payee, no further action is taken against him. Well, Mr. Speaker, I have no claim to that money. The claim has passed to my landlord to whom I have endorsed it. If he becomes the payee in law, that is fine, but I am not sure he does.
Another situation occurs to me. Again, as a tenant, I write a cheque to the landlord and the landlord endorses it over to another, and the recipient endorses it again, as happens in many commercial transactions; the cheque may pass through three or four hands before being finally presented to the bank upon which it is drawn.
I come, now, to the very good point made by the hon. member for Middlesex-London-Lambton with respect to the morality of certain aspects of the measure and his concern about protecting the little fellow, the uneducated person, the person who lacks an adequate command of either of our official languages. Is it in the moral interest of such a person, or of any other Canadian, to say: "You can write cheques even though you do not have funds to meet them, as long as within a 15-day period following notification of the fact that you do not have sufficient funds to meet them, you make arrangements to do so." Is that good morally? I do not stand in judgment. I do not know.
What I am willing to say is that I support the position taken by the hon. member for Broadview (Mr. Gilbert). I think this would be a very good subject for consideration by the Standing Committee on Justice and Legal Affairs, of which I happen to be a member. I am not so sure it should be discussed in this precise form but, in the absence of any other form, let us consider it in the form of Bill C-215. I should very much like to discuss further this matter of principle, the contemplated use of the Criminal Code to enforce commercial contracts.


Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, I join with others who have spoken this afternoon in commending the hon. member for London East (Mr. Turner) and the hon. member for Middlesex-London-Lambton (Mr. Condon) for bringing this bill forward. It has given us all a chance to take a run at the subject matter.
I might say that I have prepared what I thought was a pretty good speech on the subject. I had hoped to deal at some length with the legal technicalities involved because I believe there has been some misinterpretation of what this bill would
January 24, 1978

really have done. I am indebted to hon. members who have already spoken, particularly to the hon. member for Perth-Wilmot (Mr. Jarvis), and the hon. member for Broadview (Mr. Gilbert), because I believe they have drawn attention to some of the troublesome points. I, too, have doubts about certain aspects of the measure.
It is possible that we could refer the subject matter to committee. My reluctance in recommending such a course arises only because of the fact that other considerations to be placed before the justice and legal affairs committee this session are likely to take up a great deal of time.


Mr. Deputy Speaker:: Order, please. The time allotted to consideration of private members' business has 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.
The Acting Speaker (Mr. Turner):: Order, please. The hon. member for Laurier (Mr. Leblanc) rises on a point of order.


Fernand-E. Leblanc: Mr. Speaker, I request the unanimous consent of the House to revert to motions.


The Acting Speaker (Mr. Turner):: Does the hon. member have unanimous consent to present the committee report?


Some hon. Members:: Agreed.



ROUTINE PROCEEDINGS


[Stage Direction]
The Clerk Assistant read the following report:
The Standing Committee on National Resources and Public Works has the honour of presenting its first report.
In accordance with its Order of Reference of Thursday, December 1st, 1977, your Committee recommends that it be authorized to travel throughout Canada and that it be accompanied by the staff required.
A copy of the relevant Minutes of Proceedings and Evidence (Issue No. 9) is tabled.
Respectfully submitted,
Fernand E. Leblanc,
Chairman.
Anti-Inflation Act

Fernand-E. Leblanc: I move that the first report of the Standing Committee on National Resources and Public Works be adopted as read.


[Stage Direction]
Motion agreed to.


[Stage Direction]
The House resumed consideration of the motion of Mr. Chretien that Bill C-18, to amend the Anti-Inflation Act and guidelines, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
A. Daniel McKenzie: Mr. Speaker, let me return to the consideration of Bill C-18 which calls for amendments to the Anti-Inflation Act. I mentioned earlier the effects that long-term controls have had on the Canadian economy and the contribution they have made to high unemployment in this country. It was for this reason that we in the Conservative party proposed short-term controls; that is, to bring uncontrolled government spending under control. This is one of the main causes of inflation and the other economic problems we are facing in Canada today.
Earlier this afternoon I referred to a document prepared by Peter Henry Jerch and Associates, a Winnipeg investment group which has carried out detailed studies to determine why businesses and investment money have been leaving Canada in large numbers. Let me refer to this document again. It states:
Countries or for that matter provinces which have nationalistic, leftist or extremely strong bureaucratic tendencies make striving and successful entrepreneurs feel uncomfortable. They are of course also the one element of business that a region can least afford to lose.
This is the basis of one of our main problems in Canada today. The document goes on to state:
Britain is a good example of a country with bureaucratic tendencies. Italy has been on the brink of ruin for some time and had to formally restrict the outflow of funds: those who were not able to take their money out are however not going to invest it internally either. Germany, Denmark, France, Holland, Sweden and Austria, among others, are countries where those striving and willing to invest have been burned too often in the past. Every time an unfavourable trend develops, rather than burying their head in the sand, their thoughts and aspirations wander to more hospitable climates. For the past two or three years certainly, the trend of investing in or buying businesses, from almost anywhere, has been to do so in the United States. That country is viewed by most successful businessmen as the most hospitable place.
It really does not matter whether the Republicans or the Democrats are in, they welcome business and know there is no substitute for business or investors. There is no point trying to
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Anti-Inflation Act
kid anyone that there is a substitute for business. Businesses hire people, they build plants, factories and provide employment. The United States is certainly benefiting from the poor political climate we have in this country, and this is an additional effect of the Anti-Inflation Act.
While it is gratifying to know that these controls are to be removed in April, Mr. Jerch gives further reasons in this document for the mass exodus of investment money and business from Canada. Continuing with the quotation:
Why this not-so-sudden flood for more hospitable climates? The big and rich U.S. market has, for all practical purposes, always been there. The devalued C$ should help in exports pricing and the relatively higher cost of acquisitions there-yet it has barely had any effect on the numbers of Canadian firms looking south. Is it the generally higher Canadian wage rates? Not likely, says Mr. Jerch. Not any one single factor is actually responsible. Rather, it is a combination of factors and feelings.
The best climate for orderly and normal business growth is economic and social stability-which is not to be confused with status quo.
That is something in this country which should not be confused with the status quo. While activist politics are present in most democracies, Canada seems to have had more than its fair share. Clearly that is evidenced by the problems which have been created in Ottawa by the premier of the province of Quebec.
Earlier I referred to the need for venture capital. I hope that will be encouraged in April when the AIB controls are removed. Mr. Jerch and his associates have compiled a document entitled: "Nothing ventured: nothing gained". I should like to point out that this is just one firm which has compiled statistics. If statistics were prepared by every investment counsellor in each Canadian city, I am sure the compiled figures would be devastating. This particular document was an investigation of the effects of risk capital on 40 Canadian companies, our economy and taxes. It reads as follows:
The growth and continued health of our economy is indeed based on an innovative secondary industry. Most innovation is people-based and most innovation starts small-in a smaller business. Like a seed that needs water and a good climatic condition, an innovation needs money, management and a conducive economic and social climate. Meaningful jobs and in effect the spirit of the population at large are derived from this innovation which instils a real purpose, satisfaction with oneself and old-fashioned pride in occupation and personal accomplishment.
I will not read the entire document, but I should like to refer to another section which deals with AIB controls and how they have affected a number of businesses in Canada. It reads as follows:
Peter Henry Jerch & Associates, being a firm specializing in corporate finance and acquisitions, has a significant roster of clients needing capital and is aware of many other situations where the injection of equity venture capital can produce very beneficial results to them and to the economy at large. In fact, the need is so broad that nearly half of all companies that apply for credit to banks should have additional venture capital to make them more successful and more viable.
As I mentioned this afternoon, I hope the Minister of Finance (Mr. Chretien) will arrive at some legislation to deal with venture capital and to encourage Canadian investors to invest in our secondary industries, as well as our small and medium-sized businesses. The document continues:
(Mr. McKenzie.]
Peter Henry Jerch & Associates maintains that if such venture captial investments could be offset in full against other income, and besides the tremendous impact on the short and long term economy, there would be no negative effect on government tax revenues. To test this assertion, Peter Henry Jerch & Associates conducted a detailed survey of 40 smaller Canadian-owned companies located in Ontario, Manitoba, Alberta and British Columbia. The survey delved into nearly every aspect of a company and included a review of financial statements and books, a review of management ability to carry out a proposed strategy, and a study of product viability and historical projected market acceptance. Detailed summary tables were drawn up based on the results of this in-depth review.
The Minister of Finance and his colleagues in the Department of Industry, Trade and Commerce would be well advised to contact Mr. Jerch and his associates, as well as other Canadian investment companies, in order to arrive at some ideas regarding venture capital, because it is evident the government is bankrupt of any idea along these lines.
I should like to refer to a recent article which appeared in the Winnipeg Tribune. It reads as follows:
Canada doesn't need a grandiose national industrial strategy. What it needs desperately is more risk taking investment in small secondary industries.
That's the forthright and well-argued opinion of Peter Jerch of Winnipeg, head of his own firm of corporate financing and acquisition consultants, Peter Henry Jerch and Associates.
He's not advocating the tearing down of any of the existing systems of business development encouragement, even though he strongly suspects they haven't achieved the aims given to government programs such as DREE. What's required is a tax incentive which will wean Canadians away from their habit of being cautious savers and convert them into adventurous investors-on a massive scale.
I hope this will come about when the AIB rules and regulations are removed in April, and that the Minister of Finance will expand on his tax incentive bill, which has certain benefits but will not be the total answer. Also I hope the Parliamentary Secretary to the Minister of Finance (Mr. Lumley) is paying attention this evening, rather than just looking around this chamber. Some action in regard to arriving at legislation to deal with venture capital is needed.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, today we are engaged in an exercise in futility. We are being asked to support a bill which will continue in a phased out manner the anti-inflation program that the government put into effect in October 1975. The anti-inflation program is a complete failure, with the exception of the effect it has had on increases in wages and salaries. The cost of living for 1977 went up by 9V4 per cent, which is 1 per cent less than the rate of inflation in October, 1975 when the government brought forward and implemented its anti-inflation program.
The New Democratic Party opposed the anti-inflation program in 1975 because we felt unemployment would increase and that no program could hold down the cost of living for more than a short period of time. As the Prime Minister (Mr. Trudeau) said during the 1974 election, the causes of the rising cost of living were almost completely of an external nature. They were due to increases in oil and natural gas prices imposed by the oil producing countries, as well as increases in the cost of food which could not be controlled in Canada. We predicted that controls would not be applied equitably, that people who earned their living through wages and salary could
January 24, 1978

have their income controlled, but that people who were selfemployed or business people would be able to circumvent the controls program.
It would be worth while to review what the government was promising when it brought in its anti-inflation program. I should like to refer to the policy statement tabled in the House of Commons on October 14, 1975, by the then minister of finance, the hon. member for Rosedale (Mr. Macdonald), which reads as follows:
Canada is in the grip of serious inflation.
If this inflation continues or gets worse there is a grave danger that economic recovery will be stifled, unemployment increased and the nation subjected to mounting stresses and strains.
This statement is entitled "Attack on Inflation". We are aware of what has happened to unemployment. In October 1975 when the program was brought in, the seasonally adjusted rate of unemployment was 7.2 per cent and the number of unemployed people was 725,000 on a seasonally adjusted basis. More than two years later, in December of 1977, the seasonally adjusted rate of unemployment was 8.5 per cent and the number of unemployed people was 911,000 on a seasonally adjusted basis. In other words, there were almost 200,000 more unemployed people in December 1977 than there were in October 1975 when the program was put into effect.
Then the minister went on to say in his statement:
Inflation threatens to price our goods out of world markets and to lessen the capacity of our businessmen to expand their operations.
Many of our export industries have been in trouble. Many have not had large profits, and many of them, like International Nickel, have had to lay people off. At no time has that been caused by the fact that they were required to pay too high wages. If Canadian corporations have not been able to export as much as they had exported two or three years ago, it is because the western world in particular has been in a slump, and our products, our minerals and our lumber, have not been selling. Or if they have been selling, they have been selling at substantially lower prices than they did two or three years ago. A good example of that is the price of wheat which is down by about 40 per cent. The minister then said:
Lowering the rate of inflation and reducing the level of unemployment must go hand in hand.
I think it is pretty obvious that the rate of inflation is almost what it was in October of 1975 and that unemployment is substantially higher. We have witnessed a peculiar phenomenon in the first year. For various reasons the cost of living did not increase as fast as it had the previous year. To a large extent that was because the cost of food did not go up. So when the Anti-Inflation Board made their first year's report in 1976, they took credit for the reduced rate of inflation and they said, to quote from their first report:
The various elements of the anti-inflation program work together in this manner: Monetary and fiscal policies are designed to achieve a sustained economic recovery consistent with price increase targets of 8 per cent in the first program year, 6 per cent in the second year, and 4 per cent in the third.
Anti-Inflation Act
Then they said:
Prices should increase by less than the increase in compensation, so that workers can gain, on average, at least a two per cent increase in real income.
Predictions of the Anti-Inflation Board and of the then minister of finance have proven to be completely erroneous because the rate of inflation in fact has increased to 9.5 per cent for the calendar year and in the last three months of 1977 to about 11.5 per cent, a rate of inflation even higher than that prevailing when the program was brought in.
We said in 1975 that this program could not work for any length of time, that we could not keep prices down because Canada could not live by itself, that Canada is part of the world economy. We are a tremendous importer of all sorts of goods and if these go up, as they have and as they will continue to do, we will have to pay increased costs. That is exactly what happened. The cost of food is going up. It has gone up by 17.7 per cent in the last year, which is not surprising when you think of the fact that we import fresh fruit and vegetables, we buy our coffee and tea and all other products, over the price of which we have no control. So the cost of living has gone up despite the arguments of the government.
The Minister of Finance (Mr. Chretien) is still arguing that in 1978 the cost of living will go up by only 6 per cent. That is a ridiculous claim to make, and it will prove to be wrong by a very large margin because we have not been able to master those factors which have led to the increase in the cost of living. The government is committed to regular increases in the price of oil and natural gas. We had an increase of $1 a barrel on January 1, which we will begin to feel in March, and there will be another increase of $1 a barrel in oil and a comparable increase in the price of natural gas in July. The price of food is continuing to go up; there is no indication that it will go down, and this despite the fact that the minister keeps on saying ad nauseam that the cost of living will not be great. The fact that the minister is repeating that will not have much effect on the cost of living.
The Anti-Inflation Board, which took such credit for the reduction in the rate of increase of the cost of living in 1976, is now trying, through the judicious use of selective figures, to indicate that we are doing not badly at all. In a booklet which they issued some months ago entitled, "Kick the Inflation Habit" they tried to argue that we were doing quite well. They tried to show that inflation has been coming down for the last 12 months, despite the fact that the annual rate of increase in the consumer price index was 8.5 per cent at the time they issued the booklet, as compared to 6.5 per cent the year before. How did they try to rationalize this? They said:
Food, energy and import price movements have obscured somewhat the success that has been attained in reducing the rate of inflation.
In other words, when they could not prove that the total cost of living was going up faster than they expected, they tried to exclude the price of food and energy from the calculations which they made.
It is obvious that the government's policies have not worked. The minister has made it clear, and this legislation provides, that wages and salaries will not be permitted to increase by
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January 24, 1978
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more than 6 per cent in the coming year, despite the fact that we now have an annual inflation rate of almost 10 per cent. What that means, of course, is that every member of a family who works and is paid in wages or salary will have less funds to meet the actual cost of living because they will be restricted to a 6 per cent increase in their income while the cost of living is going up by almost double that. We said at the beginning when the program was implemented it would be easy for the government to control, at whatever level they wanted, incomes received by people who are paid in wages or salaries, but that it would be almost impossible to control the incomes of self-employed people. In its first year's report the Anti-Inflation Board describes what happened. Figures are given showing how much the incomes of professional people increased. I want to compare those increases, which were permitted by the Anti-Inflation Board, with the increases received by people who are paid wages or salaries. Dentists increased their income in the first year by 19.6 per cent. Their income went from $34,100 to $40,800. Engineers increased their income by 20.2 per cent. Their incomes went from $38,200 to $45,900. Lawyers saw their incomes increase by 14.6 per cent, from $34,900 to $40,000. Those income increases ranged from $5,000 to $7,000 at a time when the government had said that the maximum increase which would be permitted to any person in one year was $2,400. We see that, as we predicted, the government's program has worked in a very unfair way. Wage and salary earners have had their incomes controlled. Their increases this year are limited to 6 per cent, while the selfemployed go merrily along.
We predicted that profits would go up, and indeed they have. The Montreal Gazette of November 30, 1977 reported that assets and after tax profits of the nine largest Canadian chartered banks rose more quickly in the year ending October 31, 1977 than in the previous year. The Gazette reported that the nine banks' balance of revenue, which measures the after tax profit before the deduction of sums to cover anticipated losses on loans still outstanding, rose by 10.4 per cent over-all.
On almost the same day the Globe and Mail reported that corporate profits for the first three quarters of 1977 had risen by 16.7 per cent. It was reported that after tax corporate profits grew at a quicker rate in the third quarter than in the two previous quarters, according to a preliminary third quarter survey of profits of publicly owned Canadian corporations. The year over year increase recorded in the latest quarter, 16.7 per cent, was the largest in any quarter since the third quarter of 1974. It is not just profits that have increased; there has been an even larger increase in the assets of Canadian corporations.
Eric Kierans, whom some members of this House will remember, quoted some interesting figures in a speech he made several months ago to the Committee for an Independent Canada. I would like to quote a couple of sentences from that speech because they are interesting. Indeed, I would say they are amazing. He said:
[Mr. Orlikow.l
In 1968, (corporate assets) amounted to $190 billion. Six years later they'd more than doubled, to $427 billion, an average annual compounded growth rate of 17 per cent.
He then said:
Then look at some individual examples like the Royal Bank... In 1970, the Royal's assets were $11.4 billion. In 1976, they were $28.8 billion. With CPR the story is the same. Assets, in 1970, of $2.3 billion. Assets, in 1976, of $6.8 billion.
It is not surprising, therefore, that people are dissatisfied with the anti-inflation program. As I have indicated, in the coming year ordinary citizens in Canada will be subjected to a substantial and very noticeable decrease in their actual standard of living. In most cases organized union workers will probably be able to get the increase which is allowed under this legislation, 6 per cent, but there are more people not organized than organized, and these people are faced with the fact that there are more people looking for jobs today than there have been since the depression years. People who work in unorganized industries will in all likelihood not be able to get the 6 per cent increase which is permitted by this legislation.
We will see a further continuation of the drift we have had for the last two and a half years. There will be more unemployment. As I said, in December there were 911,000 people unemployed. That was on a seasonally adjusted basis. That does not include the tens of thousands of people who are unemployed who are not counted because many of them have given up attempting to find jobs. If you live in Newfoundland where the rate of unemployment is over 15 per cent, there is not much use looking for work. There is not much point looking for work if you live in eastern Quebec or in the interlake area of Manitoba.
There will be more unemployment and more suffering on the part of the bulk of the people of Canada. I began my remarks by saying that we are engaged in an exercise in futility. The anti-inflation program has not worked. It has not kept the cost of living down. It has increased unemployment because, along with the anti-inflation program, the government is involved in a major program of restraint. The government has cut back on programs and has put a freeze on hiring. It has called on provincial and municipal governments to do the same.
The federal government has passed legislation which will reduce the transfer payments it has made in other years to the provinces to help pay the cost of hospitalization, medicare, social security programs and post-secondary education. All those programs were begun and encouraged by the federal government. They are now very expensive, and in the next few years they will not receive the same percentage of their cost that they have received in other years. The provincial governments are being urged to cut back on programs which have already begun. They are being pressured to give up any idea of new programs. Just at the time when the private sector of the economy is not able or willing to find jobs for all the people who want to work, and when the government should be increasing its participation to take up the slack, we find the government cutting back and urging the provinces to cut back

and to show restraint. This means that we will have more unemployment and inflation.
I think that this legislation and this debate are really pointless. Instead of bringing this legislation forward the minister should have brought forward a new budget. The Minister should no longer heed the advice coming from officials in the Department of Finance because in the last three or four years they have been consistently wrong. Instead, he should listen to the advice given by the Economic Council of Canada and the Conference Board of Canada which he has rejected out of hand as being impractical. They have suggested that what is needed is a substantial cut in income tax, particularly for people in low and middle income brackets. The minister has been heard to comment that one of the reasons we are in trouble is because people are saving too much money. The figures prove that savings have increased substantially but these savings are not by people in low and middle income brackets. They are not in a position to save money; they must spend everything they earn just to get by.
The Economic Council of Canada, which is composed of people appointed by this government-it has no labour representation and, if anything, is business oriented-recommended a substantial cut in income tax and a cut in or removal of sales tax. No other form of taxation is felt more cruelly by people on low income than sales tax. Any reduction should be monitored so that it filtered down to the consumer. This would do a great deal to cushion the increased cost of living we have witnessed over which, in many cases, we have little or no control. That is one thing the government should do to fight the increase in the cost of living and the increase in the rate of inflation.
The government should also deal with unemployment. It is not good enough for the Minister of Employment and Immigration (Mr. Cullen)-or, as he is commonly known, the "minister of unemployment"-to say that government can do little or nothing about unemployment. We will not and we cannot accept that kind of statement. We saw enough of that kind of argument in the depression years. We thought those days would never return but they are back. To a large extent, the minister and the government are responsible for the current unemployment.
We have argued and will continue to argue that it is the government's responsibility to adopt programs that will put people back to work. This is not impossible. We need to get on with building homes for the tens of thousands of people in this country who still live in dilapidated and unsanitary homes. This is completely inexcusable. We also need to develop programs to deal with pollution.
As I have said before, Mr. Speaker, we live in a country which spent $ 1.5 billion to hold the Olympic games in a city which still dumps raw sewage into the St. Lawrence River. That kind of thing should not be allowed to continue.
The government ought to forget about its anti-inflation program, although it earned some undeserved credit in the
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first year of operations, for which it can be grateful. It ought to get on with the job of putting people back to work and helping those on low incomes who have been adversely affected by the sharp increase in the cost of living this past year. This increase will continue throughout 1978 unless the government takes action.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, at the outset I should like to say that the Minister of Finance (Mr. Chretien) was probably right when he said in Toronto recently that the Liberal administration was not very good. Of course, he tried to cover that up by saying that the alternative was worse. The minister and this government have been running the economy of this country for a long time, however. After railing against the evils of wage and price controls in the 1974 election campaign, the Prime Minister (Mr. Trudeau) and the government then did an about-face and introduced them. The results have not been very good.
Bill C-18, instead of paving the way for the removal of controls, provides for the extension of them and even widens the net by including profit and wage guidelines retroactive to December, 1975, as well as guidelines for the transportation industry. Profit and wage guidelines are also to be extended to the construction industry. The bill contains one or two amendments that might be useful in a decontrol program, but although the government has announced that controls will end on April 14, in practice 70 per cent of renewable wage agreements and 81 per cent of renewable profit performances will remain under control during 1978. As well, the way has been paved for a continuation of these controls if the government so desires.
The Minister of Finance has said that he hopes for an inflation rate of 6 per cent this year. Mr. Speaker, he must be the most optimistic person in Canada when you consider that inflation is already running at 9.2 per cent and the government still proposes to remove controls.
In the United States, which has an enormous influence on our economy, indications are that inflation will increase substantially. In his State of the Union speech, the President of the United States triggered another fall in the United States dollar, and, of course, our dollar fell along with it. We tend to look at the state of the U.S. dollar and forget that the whole North American economy is affected by it. In President Carter's first year in office in the United States, the government there has added to inflation by an increase in the minimum wage, which always increases wages at all levels not just at the bottom of the scale. We are adept at this as our minimum wages are substantially above those in the United States. Just recently, the province of Manitoba illustrated the danger of excessive increases in the minimum wage when they refused a further increase in the statutory escalation of the minimum wage in that province. In the United States government workers received a salary boost of 7 per cent. They are doing the same thing that we are doing in this country.
The orderly marketing agreements which the United States government has indulged in are just a fancy label for the limiting of imports. In Canada we are doing this with televi-

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sions, electronic goods, shoes and clothing which decreases the flow of low-priced imports and allows higher pricing of domestic goods. This may be good for our domestic industry but it also increases the price of goods our people must buy.
In the United States there are today higher taxes on business for purposes of social security, jobless pay or what we call UIC, and an increase in pension insurance premiums. Of course, the United States has a larger federal budget and a larger deficit, with so-called tax cuts to offset tax increases. This is certainly a classic combination to cause inflation. As in Canada, all things done in the United States are done with the public good in mind, and to satisfy constituents that government feels its cause is just and reasonable. The result, whether in the United States or Canada, is to push up business costs, which in turn are passed on.
We also have the pervasive indexing of wages and pensions which is particularly important in the Canadian economy because so much of our expensive public service employment is locked in to the automatic indexing of wages.
The President of the United States does not intend to use forceful action in controlling inflation; he intends to have moral suasion by government, by business and by labour. In the short run, at least, this is not going to work any better in the United States than it would in Canada or in any other country. Perhaps, in the long run, it may well help to halt and contain the forces of inflation but it will not be of immediate value. So with the expected rise of inflation in the United States, how can anyone, least of all the Minister of Finance (Mr. Chretien), expect our inflation rate will moderate from over 9 per cent at present to his own estimated 6 per cent? Certainly other trading partners are in the same situation. How can the minister expect to have an inflation rate of 6 per cent when our trading partners and the people we do business with are expecting increases in their rates, and where will our exports go?
In so many fields, Canada's performance is lacklustre, and this is evidence of our financial malaise. For instance, the rapid and continuous increase in Canada's external debt is such that we must give serious thought to the country's ability to cover the interest charges. A review of what has happened in our foreign debt is interesting. It has climbed from $26 billion at the end of 1968 to $46 billion at the end of 1976, and it is estimated to reach $58 billion at the end of 1978. Certainly the increment in the foreign debt is increasing by leaps and bounds. The interest and dividend components of the current deficit have increased from $900 million in 1968 to an estimated $3.6 billion this year.
It seems that as a result of the higher deficits in the interest and dividend items Canada is moving increasingly in the direction of a balance of payments problem, due to our inability to earn sufficient foreign exchange to pay the interest and dividends on outstanding foreign debt. In other words, large future borrowings will be necessary just to cover the service payments of past borrowing. Even with the merchandise trade

surplus in 1977, the current account deficit is predicted to increase sharply from last year to over $6 billion for this year. In 1970 we had a surplus in our commodity trade of $3 billion, whereas in 1977 it was certainly less than $3 billion.
Much of this can be ascribed to the failure to sell to the United States the crude oil that we were selling in other years. It brings into question the disastrous situation whereby the federal government has been involved in a tax dispute with the provinces which has dampened exploration in the petroleum industry. It is significant to note that there seem to be ample gas supplies once again, largely on the initiative of the governments of Alberta and British Columbia, when changes were made in the tax structure so that drilling resumed. It seems to me, Mr. Speaker, that we are short-sighted in our assessment of restricting energy trade, particularly on a continental basis.
Our troubles are even greater in the manufacturing sector. The deficit in manufactured goods has climbed in eight years from $3 billion to $10 billion. This massive deficit has been due to the deterioration of the competitive position of Canadian manufacturing. A prime factor here has been the rapid increase in unit labour costs. There has been some restraint in the rise in wages in the manufacturing industry, but most important is the reduction in the rate of increase of labour costs due to a cyclical improvement in the output of the workers.
The lower value of the Canadian dollar and some reduced pressure on labour costs may bring about an improvement in the trade deficit, but this will be accomplished mainly through displacing imports rather than increasing exports. The lack of buoyancy in world trade will certainly diminish significant improvement in Canada's exports of manufactured goods. Unless industries have had some profits they will not be able to expand or to increase their efficiency so as to take advantage either of the home market or the export market. The operation of the tax system has meant that taxes were levied on fictional profits so that for many firms it was difficult to maintain an adequate level of capital investment or even to maintain the present level.
There are a good many reasons to believe that the home market for manufacturers will not be as buoyant as in years gone by. Travelling has introduced many Canadians to new levels of consumer wants and needs. Many Canadian manufactured goods are now realized to be of average or mediocre quality, not the worst but far from the best in the world. I notice western Canadians especially are looking south of the border for many of their goods, and many are not so keen on the traditional stylings of a textile industry based in eastern Canada. The western farm machinery industry is looking increasingly across the border for its machines as well as to sell agricultural and other products made by local industry.
No doubt the government would like to take great credit for the wage and price controls moderating inflationary pressure. But it is doubtful that controls have had any significant success considering the fact that conditions would have moderated the rate of inflation in any case. I think that the government's experience will cause all governments to weigh
January 24, 1978

carefully whether or not controls should be reintroduced, at least in a period of peacetime. Obviously they distort the market. They make more difficult business transactions and decisions as to whether to expand and plan for the long term. Business tends to sit and wait, not knowing what the government is going to do next, and it is in no position to make any commitment for expansion.
But the cardinal failing, it seems to me, is that in a country where nearly 50 per cent of our GNP is channeled through governments, there has been no real control on government expenditures and no real control on increases in the public service wage remuneration level or on the various charges that Crown corporations can levy on corporate citizens, such as hydro and so on. Furthermore, Crown corporations, not usually considered in the public sector, did not, in the main, observe restrictions that were so evident in the private sector. The private sector has now become a relatively small part of our economy compared to what it was some years ago. Certainly it means that the advantages of any slowdown in wage increases in the private sector do not have nearly as great an impact on the total economy as was the case many years ago.
I would like to say a word about the cost to firms observing AIB rules and filling in AIB reports. I can quote a small professional operation which had a gross income of slightly over $20,000, in a profession whose fees were negotiated by an association and the provincial government. This situation put him in a so-called safe haven. But in order to prepare the AIB form the charge to this professional by his accountants was some $600 a year or about 3 per cent of his gross earnings. I suspect that this is fairly true for business at large. The cost of complying with the AIB, doing the paper work and submitting the required reports amount to somewhere between 3 per cent to 5 per cent of the cost of doing business in many instances. Not an insignificant amount, particularly when you add such costs as bilingualism, which many people feel adds another 5 per cent and which we recognize is a financial problem for Canadian business.
With the slack in manufacturing and in all sections of the country in the private sector, wage increases should not be increased excessively in the coming year. In any case, wage levels in the private sector seem to be substantially lower than in the public sector, so there is a steady move of competent and skilled workers and managers out of the private sector into the public service or public institutions. This certainly can be seen in small communities. From personal experience I can state that some of our most productive industries, such as agriculture, are not able to offer the salaries, amenities and pensions that government services can offer. In this field workers are scarce, and they will become scarcer because the agricultural industry is unable to compete with the public service. This seems to me to be one of the most important things we have to deal with in the economy. Furthermore, the rates of pay, hours, pensions and amenities make the excellence demanded so much easier to come by in the public service. Yet even in the face of supposedly high unemployment, there are many jobs, such as field workers and so on, that are not being filled
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because there are no applicants. Many are necessary for the functioning of our economy. We could do without many of the service workers, but not without jobs that produce our goods.
The minister did not bring forward a plan of the decontrol period. He did not bring forward the idea of a watchdog commission to watch over wages and prices, although he did talk about it vaguely. He may feel it would become another bureaucracy with another layer of people to watch over private business.
Bill C-18 is only marking time. It extends the AIB coverage for another eight months. As I have stated, every indication is that 70 per cent of wage agreements will continue past April 14 to the end of the year. Profit performances in the nature of 80 per cent will continue to be controlled.
This bill makes one or two amendments that are necessary in preparation for the removal of controls. However, it fails to bring forward any suggestions with regard to the post-control period. There is the possibility of economic chaos when controls are lifted. In particular, there is the question of how to deal with the public sector in order to find a reasonable method of assessing wage increases. The Prime Minister (Mr. Trudeau) says he has a plan which he will put forward to the provinces at the forthcoming federal-provincial conference. However, there is nothing in this legislation to indicate what the government has in mind about this important facet as we approach decontrols, hopefully by the end of the year. I refer to the period when we will function without controls.


Mr. Roch La Salle (Joliette):: Mr. Speaker, I would like to say a few words about this legislation which I think brings an extension of these controls which have been embarrassing so many Canadians for too long.
I remember very well, Mr. Speaker, when these controls were introduced in 1975, we on this side were already blaming the government for having waited much too long to do so. It was already too late to reach the proposed objective which was to curb inflation, a danger that had been hanging over our heads for several months and about which the Progressive Conservative party had warned this government on several occasions.
So we have lived through this period of controls and I suggest that now we have the right to examine its results. I believe, on the one hand, that this point has been recognized throughout the country and, on the other, that we have also come to realize that those two years were sad years for Canada. And we cannot help admit with all those who have a little sense of objectivity that the results are deplorable. We have partly succeeded in curbing salary increases but not prices. And that is where it hurt Canadians and did them wrong because they had to live through an increase in the cost of living as a result of a badly prepared, badly drafted and especially badly implemented piece of legislation. As I pointed '

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out earlier, it was already too late to correct the malaise that was felt in Canada.
Mr. Speaker, 1 remember quite well that two years before October 1975, the then leader of our party toured the country to warn Canadians against the dangers they were faced with because of inflation. But the government did not want to listen to the wise advice of our leader. The government, thinking that they knew everything, did not want to listen. However, they were well aware that politically, this could affect their popularity.
I will come back to what happened in 1974 later because some things are not so easy to forget. In 1975, nearly everyone was penalized by this board, all the sectors of our society, from the farmers to the labourers, and even the businessmen were penalized. People became more and more concerned and investments started to slow down. This is the result: we know the problems which we have had in the last two years and which are growing worse.
You may wonder why, Mr. Speaker. It is because we got off on the wrong foot. Yet, it was clear at the time that the cooperation and the support of provinces were needed and even essential, because I believe that at the time, in view of the decision made, provincial areas of jurisdictions were already being ignored. The government did not obtain the cooperation of unions, which was essential, nor that of business. Without the support and the cooperation essential for the effectiveness of this approach, the task was already doomed to failure; it was already impossible. This put the board in a difficult position since it had more often than not to oppose either the unions, the businessmen or the provinces, and this caused continuous confrontation, with the deplorable results that I mentioned earlier and that we must recognize.
Of course, we have been recommending this decontrol period for some time because, in view of the failure to meet these objectives, something should have been done a long time ago and the various sectors of the Canadian economy have been waiting for a long time for the government to take a position and they want to know exactly what the government is going to do.
Mr. Speaker, if the provinces, labour unions, the business community and economic sectors did not show much interest for the imposition of those measures, it is because already, in October 1975, people were showing that loss of confidence in this government. One has only to check the figures, and I will spare you all those statistical data for others before me have quoted them, but one has only to compare with our American neighbours who, without this tool, have fared a lot better than us.
I am not saying that they did not have any problems with the increasing cost of living or inflation, but they have come through without any controls, through persuasion, a better will and, probably, because of the much greater public confidence they had in their government than Canadians did in theirs. In my opinion, in a situation such as the one we are in now it is important to have confidence. The Minister of Finance (Mr. Chretien) is calling for this confidence on the part of the

opposition parties, and he hopes to gain the confidence of Canadians about the anti-inflation measures he has announced a few months ago and those he will be announcing in the coming days. Mr. Speaker, it is hard to trust the government when we see its economic record and the results of its policies. It is hard and I will even say it is impossible to support the government when it tells us about all kinds of expectations, knowing full well that all our economic forecasts have proven awfully false for too long and particularly so during these past ten years. So, right from the beginning, the objective set by the government was unreachable and the government knew it. But, Mr. Speaker, they had to win the 1974 election. So, two years before the enforcement of these controls, in 1975, the Progressive Conservative party had already warned the government about the dangers of these controls and the misery in which they would throw all Canadians. And the member for Bona-venture-Iles-de-la-Madeleine (Mr. Bechard) knows quite well what he was advocating in 1974 like so many others. They crisscrossed the country and we saw what I would call the scandal of the century: all the Liberal members of the House and all those who were running for the Liberals stubbornly refused to believe in price controls, in a 90-day wage and price freeze.
This 90-day period, which was omitted when the controls were applied, would have given us and any government the time required to seek and obtain the support and the co-operation that are essential to the effectiveness of these measures. It has been swept aside. But what is most repugnant is that the government had promised it would never apply such controls and it tricked the business world, the unions, the workers, the provinces and this side of the House. The government was scaring Canadians with the proposal we were putting forward. It had been studied and we had the feeling it was already urgent.
We were asking the government to take action, and that was well before 1974. It did not respond, at least not before having categorically promised all Canadians that the government elected in 1974 would never apply controls. I said some time ago that this government had deliberately and openly lied to every component of the Canadian society, and I was asked to take back what I was saying because I could not prove it. I see the hon. member who must indeed feel embarrassed, he who in October 1975 was compelled to obediently submit to the decisions taken by this Prime Minister, to stay quiet and hope his constituents would forget he had ever stood up for this position.
Oh, yes, Mr. Speaker, I am convinced of that. I repeat everywhere that this government lied openly to the Canadian people in 1974, and that is why it deserves to lose the confidence of the people from day to day as it does.


Mr. Portelance:: That is not true!


Roch La Salle: An old proverb says that he who has lied will lie, Mr. Speaker. Today, the minister introduces before us a
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bill which in a way extends controls. There is talk of decontrol, of a supervising committee: how will it be done, with whose co-operation, under what agreements? We are given no details. How are we to believe so readily a government that has given the Canadians proof of its dishonesty with regard to the promises it made at the time. So, we are asked to approve some kind of extension, with a committee whose task would be to supervise the decontrol period and make sure nothing upsets our economy again; it is hard to "upset" the present situation; though there is pressing need to improve the situation we are now experiencing.
It has already been said that the suggested decontrol formula could lead to interference with the provinces. Tonight, over the news, after a day spent in Quebec city where representatives of the provinces and the federal government spoke of work and the decontrol period, considerable concern was expressed, Mr. Speaker. We are concerned by the approach to be used by this review committee. We really wonder to what extent this government is giving itself an instrument allowing it to intrude in provincial jurisdiction and make decisions that already belong to the provinces. And if the information we got tonight is right, it was obvious that all provinces, and not only the province of Quebec, were very much concerned by the way this surveillance would be implemented. I understand the Quebec labour minister who expressed his concern and I take this opportunity to encourage government members to do their best to facilitate the necessary agreements and to respect provincial jurisdiction, and this applies not only to the province of Quebec but to every province.
If the government demonstrated its incompetence on that respect the legislation we have lived with since October, 1975,1 repeat that it is difficult to believe in the efficiency of those measures. We wonder if this government will not try to obtain such an instrument, not within a year but in the next few months. I insist on the absolute necessity to get support from provinces, unions and management during that decontrol period. We must admit that without a commitment to get the co-operation from every sector of the economy to deal with a situation created by this government, we are in a dangerous economic deadlock.
Yesterday, the right hon. Prime Minister (Mr. Trudeau) blamed our leader for being pessimistic as we recognized that this government, with its accumulation of deficits, was on the verge of bankruptcy. And we must be careful according to our friends opposite because when we talk about the government's bankruptcy we are frightening investors and foreign countries. Those people hear the same information and read the same newspapers as we do and it is impossible to make them believe that everything is going fine, thank you.


Mr. Lachance:: Only Rockefeller!


Roch La Salle: Rockefeller is also concerned. He made a courtesy visit to Canada yesterday but he must also have read the newspapers and I think that Canadians are more worried and this is important, Mr. Speaker. Canadians are more worried and this is why I think it is essential in the coming
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months to take the necessary steps to gain the support of union, provinces, employers and every sector of the economy. The government has shown a lack of leadership and is indeed caught in a trap and cannot free itself. It is not embarrassing to acknowledge the need for sensible advice from economic experts and the government should urgently appeal to those economic sectors which can provide some assistance in the public interest.
When I consider the special conditions in my province, I must point to this government that it must endeavour to obtain the co-operation of my province and avoid confrontations with the Quebec government, because it has chosen a special option which I and others do not approve. But I think we must respect provincial institutions and it is more urgent than ever to co-operate especially as far as this bill is concerned. And that cooperation is also essential in the case of the other provinces and that respect by this government for provincial jurisdictions is equally essential.
So I repeat that it is difficult to have faith in the legislation now before us in view of what we have had in the last two years. I hope we will be able to correct the present situation but we will be more successful if we can have faith in those sectors of the economy which could be well disposed at a certain moment if the government shows enough initiative to correct the situation. So I think it will be possible to get that cooperation which would allow us to restore an economic climate both in Canada and in my province, something which is necessary and urgent. We are concerned with that monumental failure and the repeated economic failures of this government but we are seriously wondering whether the best solution for the people of Canada might not be indeed a change of government. We hope that Canadians will have that opportunity to choose before long and I can assure you, Mr. Speaker, that we will be reminding this government of the kind of administration we had for the past ten years. And we will see whether Canadians have suffered enough or whether they can tolerate any longer this kind of administration. In the circumstances I hope this government will not pass this opportunity or call that I am making about the urgency of having the support of the important sectors of the economy represented by the provinces and the unions to make this a successful legislation. Should it meet the interests of Canadians I would be quite happy to make my modest contribution.


Claude-André Lachance: I rise on a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Lafontaine-Rosemont (Mr. Lachance) on a point of order.


Claude-André Lachance: Mr. Speaker, I wonder whether the hon. member for Joliette (Mr. La Salle) would accept a question.


Mr. Deputy Speaker:: It is up to the hon. member to accept the question. His time has not expired, so the hon. member for Lafontaine-Rosemont could put his question.


Claude-André Lachance: I want to ensure collaboration with provincial authorities and rightly so. Does the hon. member not feel

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that the blanket agreement signed not later than today in respect of a $77 million fund, of which $45 million will be provided by the federal government for the servicing of industrial parks and also for fishery parks, is a good example of cooperation with the Quebec provincial government?


Roch La Salle: Mr. Speaker, the hon. member is referring to a sizeable grant announced by the Department of Regional Economic Expansion, I believe it was yesterday or the day before, for projects in the province of Quebec. This is very good news indeed. I would remind the hon. member just the same that it would have been better in my view if such agreements had been signed five years ago.
Quebeckers are asking themselves, why did this government wait until it was on the brink of bankruptcy, it brought the nation so near to a gigantic bankruptcy, into so dangerous an economic quagmire, before it started announcing day after day a series of grants that should have been announced four or five years ago, as we were then pressing for such measures. Of course I accept this grant announced today by the Minister of Regional Economic Expansion (Mr. Lessard). Of course I welcome it. My only regret is the government did so because it was forced to.


Claude-André Lachance: This has been achieved, it is an extension.


Mr. Lapointe:: We have granted $300 million over the last five years.


Derek Nigel Ernest Blackburn: In my opinion, Mr. Speaker, and I think in the opinion of members of my party, this is a very important debate on the Anti-Inflation Act, its regulations and the board. For the first time we have seen the government actually planning the economy in advance. But unfortunately its planning was wrong. I do not want to be one of those who says "I told you so", but members of this New Democratic Party suggested it was wrong two and a half years ago.
What the government planned deliberately has not only increased unemployment in this country and, consequently, increased the misery of many of our citizens, but it has not solved the basic problems it was supposed to solve, namely, the problems of inflation. This government has all kinds of precedents to follow. The United States, for example, tried controls in the late 1960s or early 1970s, but wage and price controls failed in that country. This government did not learn a lesson from that failure. We heard the words of President Carter on television the other night during his State of the Nation address to the United States Congress. He said he does not believe in price and wage controls because they do not work.
This government across from me now is committed to controls until at least April 14, and it intends to continue some kind of control mechanism well on into the year and perhaps beyond into 1979. This is its intention in spite of the lesson we should have learned from the United States.

I do not profess to be an economist, but it seems to me that when you have a totally unplanned economy and you are on the upswing is the time to attempt to dampen things through fiscal and monetary mechanisms. When the economy is on the downswing, as it has been in this country for the past two and a half years, that is the time when you loosen those monetary and fiscal measures. This Liberal government has done things the other way around.
According to the government everything was wide open during the early 1970s. Its advice was to make the fastest buck possible; get things now because in two, three or four years' time it will not be possible. We are now experiencing a restrictive economy with tight money, yet the government insists on continuing controls.
What does this mean in human terms? Let us get away for the moment from what is said by the great thinkers, the great legislators, that great Prime Minister (Mr. Trudeau) and the bureaucrats. Let us consider this at the grassroots. I do not wish to be too parochial by speaking just about my own constituency of Brant because this controls program has adversely affected most of the country, but let us look briefly at what these controls have accomplished in that area of Canada which is supposedly wealthy, with traditionally low unemployment, a high cash flow and a lot of economic activity.
As a result of the inverse or negative planning of the Liberal government, we have in the city of Brant an unemployment rate of 12 per cent. If you combine that area with the county and the Six Nations Indian reserve you will find an unemployment rate of about 15 per cent. Is this really what the government intended to do to the riding of Brant, or to any other constituency in this country? I can only draw the conclusion that this was intentional, that the Prime Minister was so preoccupied two and a half years ago with inflation that he was suggesting that we must suffer the consequences of controls and live with unemployment. He could then say to the young people of this country that if they could not get jobs they should go some place else; they should go to a foreign country.
The fundamental fact is that in western European nations, where governments plan in a positive way-and I do not refer just to those with social democratic governments-the rate of inflation and the rate of unemployment are both lower without controls. Yet the Prime Minister insists on holding on to the outmoded and outdated concept that the only way the economy can work is through controls.
I recall a very great opportunity I experienced back in the autumn of 1975 when I marched in Brantford with local labour people. At that time we realized that controls would not work and that they would be unequally applied. We knew some people would escape all the controls and others would escape part of the controls as far as income was concerned. We knew those on fixed incomes, such as disability, war and old age pensions, would be hurt. Also we knew those on wages and

salaries would be hurt. It is very, very easy to control wages and salaries. At that time we were aware of the fact that those who worked on a fee for service basis or investors would find loopholes around the Anti-Inflation Board legislation. Let me make it clear that I am not condemning them as individuals. Indeed, 20 per cent of them found their way around the program and have not as yet sent in their information to the AIB with respect to income, which have to be adjudicated.
We were aware that it would be very difficult to control prices, but the most inequitable aspect of the program, which came into effect in December of 1975, was in relation to those parts of the economy that were excluded. I am referring to gasoline prices, home heating fuel prices, hydro, other public utilities, land speculation costs, home interest mortgage rates and the various borrowing interest rates across the country. All of these were excluded from the AIB program, yet today most of these areas, in terms of cost to the consumer, have skyrocketed well above the AIB guidelines for prices. At the same time wages have been held back.
For example, in December 1975 when the AIB program came into existence, the Canadian inflation rate was 9.5 per cent. Today the inflation rate is 9.5 per cent. What is the rate of increase in salaries today? Those who have to bargain for their incomes or salaries are being held to 6 per cent this year. At this very moment in time we have a differential of Vk per cent between the amount of money people may receive in terms of an increase in salary and what in fact they are paying with respect to increased costs, according to the consumer price index. Obviously something is amiss.
The other day in Toronto the Minister of Finance (Mr. Chretien) implied that things would not change. In a critical economic period such as we are experiencing now, the flow of money to those who need it the most must be increased. Whether these people are pensioners, low or middle income earners, they spend money on necessities such as food, gasoline and clothing. Although these are basic items which they require money for, the government is not prepared to reduce taxes, thus providing these people with a tax break of any significance. When more money is put into the economy at a time when the economy is down and money is tight, more money is spent. When this money is given to those at the bottom end of the income scale, it is spent. When it is spent, it creates demand. When demand is created, demand for productivity is created as well. When a greater demand for productivity is created, there is a greater demand for those who produce the products, which is one fundamental way to get people back to work.
It is a disgrace that Canada has over 800,000 persons listed as unemployed and probably another 300,000 persons who are either underemployed or have given up looking for work. Therefore we are talking in terms of 1.1 million unemployed people in this country, perhaps even more. One must look at the cost to those who are working because of the ineptitude and stupidity of the government. One must look at the payout of unemployment insurance, and when that runs out, the cost of welfare. I cannot understand this attitude in light of the
Anti-Inflation Act
experience to the south of us in the United States, where a much more rapid rate of recovery occurred. President Carter and his economic advisers are advocating and putting into practice the very things members of the New Democratic Party suggested last fall. Why is it that the government would not listen? I do not expect the Prime Minister to say that I am correct and he is wrong. But I am expecting some new action from the government side, something creative which will provide us with some hope. It will take a long, long time for the government to weaken. I am awaiting something innovative. If the government cannot think of something innovative, why does it not accept traditional economic practices, as the Americans are doing, in order to get more money flowing in tne economy? I know we do not have a Lord Keynes or Kenneth Galbraith coming along every day, so perhaps we have to rely on the philosophical concepts of the economics of the thirties and early forties. But at least that is better than standing pat at a time when our economy is on the rocks.
I realize some people have not been hurt, such as myself and many others, but some jobs have been affected by the spin-off from unemployment. I am not referring just to statistics and numbers, but to people who are dependent upon their sons and daughters for a portion of their income, livelihood and so on. Approximately 2Vi million Canadians are suffering directly as a result of the government's ineptitude and inability to come to grips with the economic realities of the present day.
The Prime Minister (Mr. Trudeau) is on the campaign trail these days. I guess someone up there does not like him, because when he was supposed to come to Brantford it snowed so badly he could not get in. A lot of work went into organizing the Liberal meeting at Brantford and I feel sorry for those who went to all the trouble. He was only 20 miles away and the highways were open. He could have been there, but he decided not to go.


An hon. Member:: The highways were snowed in. I know, I was there.


Derek Nigel Ernest Blackburn: We were all snowed in. Highway 2 was open all that morning and during the afternoon, but the Prime Minister decided not to risk it in his big limousine. He left his Liberal buddies in Brantford with about 600 doughnuts and I do not know how many gallons of coffee. I actually feel sorry for the local Liberal people who organized the meeting. Even I received an invitation, as a matter of fact. I do not know who slipped up there. It would take a long time to concert me to the Liberal party, a couple of lifetimes.


Some hon. Members:: Oh, oh!


An hon. Member:: Nobody would want to do that.


Derek Nigel Ernest Blackburn: I can understand why the Prime Minister dwells almost entirely on the national unity issue at this time. He does not want to be reminded of the fact that he has been in office as Prime Minister for ten years, that when he came into office as Prime Minister promising to bring us together as

January 24, 1978
Anti-Inflation Act
a country, he said: "I understand Quebec, I am Francophone"-although I think he is half Scottish by origin. 1 can understand why he wants to evade the economic issues which will plague him during the next campaign. We can understand why he wants to go ahead on the national unity issue if we remember that when he was elected ten years ago there was not one separatist sitting in the Quebec National Assembly. Today there are approximately 70 or 71 and they are in power.
I am not blaming the Prime Minister entirely for what happened in Quebec, but as a Francophone Prime Minister of the country surely he must have known what was going on in Quebec in the 1960s and 1970s. So why did he choose to ignore the natural linguistic and cultural aspirations of that province and instead try to superimpose upon English speaking Canada some quasi-linguistic program that would somehow solve our problems by converting Canada into a bilingual nation? If we were the size of Switzerland, I would understand it.
Now he wants to get away from the AIB and all the problems and troubles that the AIB has caused Canadians. He wants to ignore inflation and the ravages that unemployment creates within a family, a neighbourhood or a community, and somehow sell the idea of national unity, about which we have all thought very seriously over the years. What is new about it? It is very interesting, when you compare the economy with national unity-and incidentally this ties in with this bill-to note that the government had flattened out in the late summer and early autumn of 1976 so far as their popularity across the country was concerned. They did not know where to go, they had no ideas and no philosophy left, if they ever had any in the beginning. Then all of a sudden, in the middle of November 1976, Rene Levesque was elected premier of Quebec and the separatists gave our Prime Minister an issue.
We are not looking for issues in this country today, we are looking for policies which will benefit all Canadians, whether French speaking or English speaking. This is what will cement this country. But if unemployment continues to increase in Quebec, if job opportunities falter and fail for the young in Quebec, the young people in Quebec will say: "Look, we have our language and we have our cultural traditions. What is the point of staying in confederation?"
You do not hold a country together with rhetoric. In all sincerity and honesty I am somewhat dismayed that the Prime Minister is now quoting from the Bible and asking people to love one another. You do not need to quote from the Bible; you have to work, you have to act. You have to bring in economic policies that will help Canadians recapture their sense of self-confidence and dignity as people in this country. What we need are not words and pronouncements from on high, not somebody who changes his hairdo every season or every two or three years. We need action. We need somebody who can bring in something which will assist those who need assistance.
Late last summer or early fall my party asked the government to create jobs, public works programs or grant tax credits or benefits to low and middle income earners, to put more money into circulation, and so on. The government has ignored

this. But not president Carter. Not the United States, whose recovery is coming about much more rapidly than ours. In fact, I doubt whether we will have a real recovery in this country for at least a year and a half under present Liberal fiscal and monetary policies.
To twist this kind of economic problem into an emotional national unity issue in the hope that people who are hurting will forget their hurt feelings and come together in an election campaign to hold the country together is a fallacious and spurious approach to basic issues. I predict that unless we address ourselves to the economic issues of this country, an election based on the national unity issue will divide this country more than it is divided today. This is not so just with regard to Quebec; this applies to the prairies, to British Columbia and to Atlantic Canada. I do not know to whom the Prime Minister is listening these days but I do not think he is listening to the grassroots, to the people in the prairies or in British Columbia, to the ordinary people who go to work every day, who still have jobs, who come home at night to family meetings, who watch television, have debts and have to meet the budget every week. I think he is listening to some of the so-called "expert advisers" in the Liberal party here in Ottawa and to the bureaucrats.
We have to change our direction, Mr. Speaker. We cannot afford to continue in the same direction we are going now. Some of the writers in the popular press today are saying that not only have controls failed but they have made matters worse. How much longer we can continue with this kind of phoney economics is hard to say. The most recent poll reflects the growing concern on the part of average Canadians about the economy. Once again the Liberals have slipped two points. Obviously the national unity issue is not getting across to the majority of Canadians as the Prime Minister would like. Canadians today are still preoccupied with pocket book, bread and butter issues. I do not think the average Canadian expects anyone to wave a magic wand and make all our troubles go away overnight. I do not think the average Canadian wants a great deal in material terms. But I am sure the average Canadian is very concerned that we are not only not holding our own in terms of real income but also that we are falling back. Tremendous demands are being made upon Canadians to buy at a time when they simply do not have money. Wealthy Canadians do not spend a large proportion of their income anyway. They save it, invest it or bank it. The interesting thing is that even those who are in the middle income bracket are trying to do the same thing because they are afraid of what is going to happen tomorrow, next week or next year.
In my opinion, the Canadian people have lost confidence in this government. They have not lost confidence in themselves. But what is the Prime Minister saying wherever he goes? He says; "Be proud that you are Canadian; be proud of yourselves; work harder." These are pious, stupid platitudes which he spews forth at political meetings that are very well orchestrated to make sure that 99.9 per cent of the people in the audience are Liberal supporters. Therefore, the account in the
January 24, 1978

media looks great. One might get the impression that everybody in Hamilton is a Liberal. Let me say that the majority of Hamiltonians do not vote Liberal. However, no matter where the Prime Minister goes, that is the impression he wants to create.
It seems that we have adopted the Hollywood approach to politics, where everything is orchestrated and pre-arranged to the point where there is very little sense to it at all. We must come clean with the people of this country. We must be fair and honest with them. The Prime Minister is not doing that. When he does appear to be honest with the people of this country, and when he does appear to come clean with them, it is on the national unity issue and not on the economic issues which plague us.
When we advocated an expansionary approach to the economy last autumn, the government said that that would just send inflation up the ladder again. What nonsense! When there is plant operating capacity of about 80 per cent, an injection of cash will not reach inflation proportions for at least two years. Why not take the initiative now? I ask the Minister of Finance (Mr. Chretien), who is not here tonight, no doubt because of other commitments, and the Prime Minister, who cannot be here tonight because of other commitments, to take a bold step forward instead of dilly-dallying back and forth and waiting for George to do it.
"George" happens to be the President of the United States. Our government is hoping that the benefits of the risks taken by the United States and the benefits of American guts will spin off into Canada. Then the Prime Minister will say that the credit is his, Americans are willing to gamble. They are not afraid of inflation. They want to put people back to work, and that is what the New Democratic Party of Canada wants to do today. We do not want those who are working to have to pay more taxes and higher unemployment insurance rates in order to keep people away from work. That is what the Liberal government has allowed to happen for the past two and one-half years. We just cannot afford any more unemployment, yet unemployment is going to get worse this winter and on to the spring.
I hope the Prime Minister has the courage to call a snap election. I would be delighted to go to the people of Brant in April, because I know that the makeup of this chamber would be radically changed. The Prime Minister says he will follow the polls. I must say that that really reflects a lack of courage. When the government brought in a bill to abolish capital punishment-and I was with the government on that issue-it ignored the wishes of anywhere from 70 per cent to 80 per cent of Canadians.
The Prime Minister says: "No, I am going to wait until the polls are favourable to me and the Liberal party before I call an election." I challenge the government opposite to call this election as soon as possible so that we can clean the cobwebs out and bring some vitality back to government. I do not want to be personal, but quite frankly when I look at the treasury benches day in and day out and note the difference between what happens when the Prime Minister is in his seat and what
Adjournment Debate
happens when he is away, I know that we are dealing with a one-man government.


An hon. Member:: Right on.


Derek Nigel Ernest Blackburn: Canadians do not want one-man governments, so I challenge the Prime Minister to call an election. We will fight the government on economic issues, and 1 welcome hon. members opposite to sit on my side of the House for the next ten years.


Mr. Oberle:: Mr. Speaker, may I call it ten o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Ron Huntington (Capilano):: Mr. Speaker, on December 7, 1977, as recorded at page 1639 of Hansard, I asked the following question of the Minister of Transport (Mr. Lang):
... when will the minister take the initiative to provide a Canada-built harbour (patrol) vessel for the port of Vancouver, the largest and busiest harbour on the west coast of the North American continent?
The National Harbours Board in 1977 asked four Vancouver shipyards, all in need of work, to submit a design of and specifications for their concept of a good harbour patrol boat. The four companies, on their own time and at their own expense, went through the design and specifications bidding process with four separate designs. The tenders were opened on September 6, 1977. The high bid was $226,600 and the low bid was $191,400. The bids were close; the prices were right and were competitive.
The low bidder subsequently asked when he would be allowed to go ahead. He was told by the National Harbours Board and the Department of Transport that there was not enough money available to cover the bid. The four bidders were asked to quote again and reduce the horsepower of the vessels they had designed. What a stupid request, Mr. Speaker, for an organization in the government that is dealing with marine equipment all the time. As it happens, due to the escalation in value of the United States dollar and inflation attrition, it would not make any difference if the horsepower of the vessel was reduced.
We are now told by the Department of Transport and the National Harbours Board that they will go through the same futile exercise with the plastic boat industry. I caution them

January 24, 1978
Adjournment Debate
not to get involved and waste their money since there seems to be no commitment on the part of the National Harbours Board to fulfil this very necessary equipment requirement for the port of Vancouver. What a waste of time and entrepreneurial working capital, particularly as one tallies the accumulated waste that is the taxpayers' legacy from this government.
An example of waste and apparent patronage occurred in 1974 when the National Harbours Board purchased a U.S.-built vessel in New Orleans, the Supply Venture. Apparently, someone in Halifax purchased this boat in New Orleans for $25,000, brought it to Halifax, then transferred the ownership to a company called Halifax Fishing Ventures Ltd. I have not been able to find that this company was ever registered, but it sold the vessel to the Department of Transport for $75,000 on a seaworthiness certificate. The vessel was shipped to Vancouver as deck cargo where in 1975 it was appraised at $10,000. It is nothing but a pile of junk. The engines have been removed but it has not been possible to get them to turn over. The boat lies in shame under a Vancouver bridge. This is an example of the patronage and waste of money involved in providing a needed boat for the port of Vancouver. The $40,000 has obviously gone to somebody but not to the entrepreneurs who put forward legitimate bids for the equipment. It is a national shame to see patronage and waste like this when hardworking entrepreneurs and skilled labour are idle and cannot even be given a simple, direct order for a badly needed patrol vessel for the port of Vancouver.
I draw to your attention, Mr. Speaker, the fact that I have been waiting for answers to my order paper questions on this subject since November 28, 1977.
All that is offered is more stonewalling, more secrecy, more cover-up and abuse within the mandate of trust given to this government by the people of Canada. I take this opportunity to ask again when the Minister of Transport (Mr. Lang) will take the initiative and provide a Canadian built harbour partrol vessel for the port of Vancouver, the largest, busiest and most profitable harbour on the west coast of the continent of North America.
[ Translation]


Charles Lapointe: I agree with the hon. member on the importance of the port of Vancouver.


An hon. Member:: We know, we live there!


Charles Lapointe: If the hon. member would only listen, he might learn something. I agree with the hon. member on the importance of the port of Vancouver, a port which, as everyone knows, is open twelve months a year, which is of great importance for the economy of the Pacific coast and the whole of Canada.
This port has known a very extensive development over the past ten years, because of the increasing tonnage which is using

its facilities. Statistical reports indicate that over 40 million tons of goods have been handled in the port of Vancouver in 1976, which is more than any other Canadian port.
Of course, Mr. Speaker, in view of this fast increase of the tonnage handled in the port of Vancouver, it is understandable that-


An hon. Member:: What is the question?


Charles Lapointe: Wait until the end and you will hear the answer.

Mr. Speaker, it is quite understandable that a port of such importance wants to be provided with the necessary facilities to maintain its activities. At present, of the two patrolling vessels operating in the port of Vancouver, one has been in service for 17 years and the other for 33 years. Plans have been made to phase out the latter and replace it with a more recent boat which could better meet the more complex needs of the current facilities and the increased trade.

The Department of Supply and Services was therefore asked to obtain tenders for the supply of a suitable patrol vessel for the port of Vancouver and four tenders were received in response to the request. I understand, Mr. Speaker, that tenders have now been reviewed and that the contract will be awarded within the next few days.


An hon. Member:: To whom?


Charles Lapointe: I do not know, sir. It will be awarded within the next few days.
Along with the hon. member from the province of British Columbia we all look forward to the day in the not too distant future when the efficiency of the port of Vancouver will be increased by the addition of a new harbour patrol vessel.


THE CANADIAN ECONOMY-REASON FOR CONTINUING HIGH LEVEL OF INFLATION-DATE WHEN LEVEL WILL REACH FOUR PER CENT
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, the matter which brings me into the adjournment debate tonight is an exchange I had with the Minister of Finance (Mr. Chretien) on November 29, 1977, an exchange which was recorded in Hansard at pages 1349 and 1350. Very simply, I asked the minister why inflation in Canada over the three prior months had been running at an annualized rate of more than 8 per cent while our neighbour to the south, the United States, was cruising along with an inflation rate of only half that of ours. I further asked the minister why the government had silently abandoned its one time projected goal of 4 per cent inflation for this year, putting it off instead until some time after 1980.
None of the questions were meant to be taken lightly. With nearly a million Canadians out of work, with inflation again

gathering momentum, and with the federal fiscal deficit topping $9 billion, these are serious questions of concern to all thinking Canadians. Yet the man most responsible for the government's fiscal and financial policies, the finance minister, merely ducked the questions by implying that he had never set such goals for the country, and that anyway they did not matter all that much.
This approach is all too typical of this government. When it finds that it cannot meet even its own standards of performance it simply puts those standards off, or maintains that goals are, after all, not important. When this administration brought in the wage and price control package it did so with much fanfare and ballyhoo about getting inflation down to 4 per cent this year. Let's remember that. It was the level of inflation we were told this government would achieve. Now, with inflation running about twice that level-in fact last month it was up to 9.5 per cent in a year over year basis-the government, rather than taking a hard look at its policy and programs, has decided instead to move the target back a couple of years.
We have even more current examples of where this minister is openly deceptive with the Canadian public. You will recall, Mr. Speaker, on October 20 the minister indicated that if we accepted his program inflation would be below 6 per cent in 1978. Before the finance committee of this House, the minister subsequently confirmed that by 6 per cent he meant that the average rate of inflation for the totality of the year 1978 would be 6 per cent. Those are his words.
On January 16 he crept into Toronto and spoke to the Canadian Club. He told them that the rate of increase in the consumer price index would be down to 6 per cent by year end, in short by December of this year as opposed to his earlier prediction. This type of deception by the Minister of Finance is totally unacceptable. It is time we called it what it is. It is open misrepresentation to the Canadian public.
The government seems to be in the position where they are willing to go to virtually any length to avoid living up to responsibility for the state of our economy. They will rationalize. They will make excuses. They will even attempt to rewrite history. They will do anything but face their own glaring mismanagement.
We saw this in committee recently when the Minister of Finance-naturally, it is very hard to get him before a standing committee of this House because he does not like to be cross-questioned when he is out of his depth and virtually does not know what he is doing-tried to account for a staggering $11 billion deficit in manufacturing trade. That is the amount this incompetent government has allowed to run up in this country. The minister came back with the startling observation that it is a matter of definition. He said that if we call it manufacturing, there is an $11 billion trade deficit. However, if you include certain other things, such as wheat, for example, which the good Lord presumably manufactures, he said the deficit would be something less than $11 billion.
Adjournment Debate
What absolute hypocrisy to be suggesting that it is simply a question of definition. The government blame everyone they can think of. They blame the Arabs for our problems. They blame the United States government if it suits their purposes. They blame labour and management. They blame everybody but the obvious, themselves.
What is even worse, the government tries to minimize the seriousness of the situation. With a current account trade deficit of over $4 billion, with unemployment at the highest level in 40 years, and incidentally higher than in any industrialized country in the world, with inflation hovering at dangerous levels, the minister has the gall to tell the Financial Times, as he did last November, "and in ten years' time the people will say oh, gee, 1977-it was great."
The Minister of Finance has sent his parliamentary secretary here tonight because he does not like to face members of this House. I hope the parliamentary secretary will try to set the minister's record straight.


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: Mr. Speaker, the reason my minister cannot be here tonight is because he is speaking to the Canadian people in a very positive fashion. As the hon. member knows, the parliamentary secretary usually represents the minister at the late show.
To get a balanced view of our performance relative to that of the United States, it is necessary to look at more than one single indicator, as the member opposite has done. When a more comprehensive view is taken, it is not at all obvious that we are seriously underperforming relative to the United States.
While recent price increases in Canada have been somewhat greater in recent months than south of the border, there are other areas of economic activity where we have done better, in some cases much better, than have our American neighbours. For example, relative to 1974, business fixed capital formation here has increased by almost 50 per cent while the increase in the United States fell short of 30 per cent. Our merchandise exports are up 40 per cent over the same period while those of the U.S. increased by less than 30 per cent.
It is true that the rate of inflation, as measured by the consumer price index has recently been rising faster in Canada than in the United States. In December, the CPI in Canada was 9.5 per cent higher than one year earlier while the increase in the U.S. was 6.8 per cent.
The difference in these rates can be narrowed substantially when food and non-food prices are considered separately. Using the same year-on-year calculations, non-food prices in Canada were up 7.4 per cent while those in the U.S. were up almost as much at 6.3 per cent.
One of the main reasons why our food prices have moved up more than in the United States has been the recent depreciation of the Canadian dollar vis-a-vis the U.S. dollar. This means that the Canadian dollar price of goods whose price is set in the international marketplace has increased by the full

January 24, 1978
Adjournment Debate
amount of the dollar depreciation. While all imports are subject to this effect to one degree or another, it is particularly evident with respect to food prices. There are two reasons for this. First, many food products are simply not produced in Canada due to climatic conditions and they have to be imported. Second, due to the perishable nature of foodstuffs, the impact of the lower dollar shows up right away; there are no appreciable inventories to stretch out and soften the impact.
While these price impacts are regrettable, they are unavoidable in an economy as open as Canada's. For example, the recent downward movement in the U.S. currency is not nearly so onerous in its price implications for the U.S. economy simply because imports form, relative to Canada, almost an insignificant portion of U.S. final demand and intermediate products.
As I have already mentioned, the non-food component of the Canadian CPI, while rising somewhat faster than the comparable U.S. series, has not been too far out of line. Part of the divergence that does exist in these non-food prices can also be traced to the lower Canadian dollar. In addition to making prices of consumer goods higher, production costs, which of course eventually wind up in final prices, have also been adversely affected to some degree since imported materials prices may now be higher as a consequence of the lower dollar. It is also the case that because energy prices started out at a lower level in Canada than in the United States, the rates of increase here must now be greater as we adjust to the world level. This is reflected in the CPI where Canadian energy prices in December were up 11.4 per cent while the November figures for the U.S. show a percentage increase of 8.1 per cent.
The greater upward pressure on our prices relative to the U.S. over the recent past must also surely be a lagged consequence of our very inflationary wage rate increases over the past few years.


Mr. Deputy Speaker:: Order. I regret I have to interrupt the parliamentary secretary but his time has expired.


ADMINISTRATION OF JUSTICE-REQUEST FOR AMENDMENT TO PERMIT USE OF FRENCH IN ONTARIO COURTS
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, on December 13 last, I asked the Minister of Justice whether he would use his good offices to encourage the province of Ontario to recognize the use of French in all provincial courts.
We know, Mr. Speaker, that the Ontario Judicature Act formally forbids the use of any language other than English in Ontario courts of justice.
The amendments to be made to the acts both federal and provincial would allow the use of French in the provincial courts.
As information is the best tool in clearing up misunderstandings, and in the hope of stirring interest in the English majority of my own province, I shall therefore use Shakespeare's language to add to what I have to say.
[Mr. Lumley.J

It is not generally known by Ontarians that their own French-speaking population has no legal right to use French in everyday dealings, such as the drafting of legal contracts, insurance policies and other important transactions, including even personal wills which must be translated into English before being officially registered. I sincerely believe that when English-speaking Canadians understand the situation which exists in some Canadian provinces where there are substantial French-speaking minorities they will wish to raise these Canadians, often their own neighbours, friends or even relatives, to the legal status of fully-fledged citizens of a state where the majority is respectful and generous in recognizing and accepting language equality whether in the legal, health, educational or social domains.
In the short time allowed me tonight I should like to call attention to a particular problem which affects French-speaking Canadians living in Ontario. Bearing in mind that French in the Ontario courts is tolerated only in a discretionary way without any legal guarantee and that section 127 of the Ontario Judicature Act formally forbids the use of any language other than English in Ontario courts, last December I asked the Minister of Justice (Mr. Basford) what pressures he intended to bring to bear on his Ontario counterpart to make sure that section 127 of the act might be amended so as to allow the use of French in all Ontario courts. You will recall, Mr. Speaker, that in the Speech from the Throne it was stated that after consultation with the provinces the government of Canada would amend the Criminal Code so as to guarantee the right of accused persons to be tried in the official language of their choice. This commitment follows the positive actions taken by the present Attorney General of Ontario, the Hon. Roy McMurtry, whereby ministerial direction and within his discretion he allowed French to be used in certain designated judicial districts, beginning with two experimental projects, Sudbury and Ottawa, and enlarging this privilege to include several other judicial areas in Ontario. This was an encouraging and far-reaching measure which pleased many residents of Ontario.
For the first time Franco-Ontarians have been given the privilege of defending themselves before the courts in their mother tongue. I say it is a privilege, Mr. Speaker, because a privilege can be withdrawn. What we want is a right. That is what we need, and we want it enshrined in legislation.
To reach this goal of providing the right to Francophones to be heard in their own language in Ontario courts certain amendments are required to the Criminal Code. The Attorney General of Ontario has asked for these changes to the Criminal Code, and I understand also that the federal Minister of Justice is presently studying amendments with a view to making provision for accused persons to have the right of choosing the official language in which their case will be heard
January 24, 1978

by the courts. This implies the use of judges and juries which can understand the language of the accused, and provision of the necessary administrative court services in the language understood by the accused.
In addition to the required amendments to the Criminal Code, amendments to the Official Languages Act would be required, making it the duty of federal courts to provide simultaneous translation of the proceedings, including the evidence given, from one official language to the other, and this everywhere in Canada.
Additional amendments would be required to allow an accused who was arraigned before a court of criminal jurisdiction and who speaks an official language other than that in which the proceedings of the courts are conducted the right to request a change of venue, making it possible for his case to be heard in a judicial district in Canada where his language is used.
As you know, Mr. Speaker, I have tabled before this House Bill C-210, an act to correct certain anomalies and inconsistencies in the Revised Statutes of Canada pertaining to the protection of Canadian language rights. I hope to be able to debate this bill in the near future.
In short, Mr. Speaker, I am asking the Minister of Justice of Canada for a progress report on his negotiations with the province of Ontario to make it possible to amend the judicature act of Ontario, the Criminal Code and the Official Languages Act. The province of Ontario has demonstrated its willingness to recognize that the use of the French language in Ontario is of fundamental importance in the administration of justice in this province. I am aware also that the federal government through its Department of Justice is co-operating with the province of Ontario in bringing forward the required amendments to make this possible. In times when we speak of justice, equality, tolerance and understanding, it is a measure of Canadian unity when provinces and the federal government can work together for the benefit of the citizens of this country.
Adjournment Debate


Roger Carl Young: It gives me great pleasure to be able to respond this evening to this very interesting and important question and argument posed by my colleague, the hon. member for Ottawa-Vanier (Mr. Gauthier). I would take note at the same time, Mr. Speaker, that there is not a single member of the opposition present here in the House.


Stanley Howard Knowles: Order, order!


Roger Carl Young: Excuse me, Mr. Speaker, one has just come in; the one who is always here.
The Minister of Justice (Mr. Basford) does not intend to bring specific pressure to bear on the attorney general of Ontario in view of the fact that the federal parliament has no particular authority of jurisdiction over provincial judicature acts. However, I point out that Department of Justice officials have met with almost all of the provinces in an effort to obtain provincial co-operation for the implementation of amendments to allow for choice of language in a trial. I might add that the consultations with Ontario were especially productive. Ontario is well geared in the way of court staff and judges to implement bilingual trials.
Hon. members will appreciate, I am sure, that the administrative ramifications of these measures are significant. The support staff will have to be as bilingual as the judge and jurors and the court reporters. For some provinces these people will have to be trained as they are starting virtually afresh.
In respect of the introduction of amendments to the Criminal Code, there are finishing touches required for the consultations and the drafting of the bill itself. The Minister of Justice expects to be able to introduce these amendments very soon, although no specific date can be given at this particular time.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10.26 p.m.

Wednesday, January 25, 1978