1978-10-20

ROUTINE PROCEEDINGS


Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I rise, under the provisions of Standing Order 43, to move a motion of urgent and pressing necessity. As the overwhelming majority of Canadians strongly support the present role of the monarchy in this country, I move, seconded by the hon. member for Victoria-Haliburton (Mr. Scott):
That the government cease its present efforts to downgrade the role of the monarchy in Canada and, instead, give strong support to the Queen and the royal family as they carry out their duties with such dignity and effectiveness.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: The presentation of such a motion would require unanimous consent. I have some concern about whether an urgent and pressing necessity was explained by the mover in a particular way. However, when in doubt in circumstances of this sort, since a motion could only be presented with the unanimous consent of the House, I generally resolve the matter by putting the question, where any doubt rests in my mind.


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, I think this is an appropriate occasion to express my resentment at the fact that there is included-


Some hon. Members:: Oh, oh!


Some hon. Members:: Order.


Mr. Speaker:: Order, please. I am not able to hear the point being made by the President of Privy Council (Mr. MacEachen).


Allan Joseph MacEachen: Mr. Speaker, I put the problem before Your Honour that there is contained within the motion put forward by the hon. member a series of false statements. When false allegations are made, when is it possible for us to answer them under this procedure?


Some hon. Members:: Hear, hear!


Mr. Clark:: Such an arrogant breach of the rules!


Mr. Speaker:: Order, please. We have not used the time at this hour of the day to enter into discussion on the principles surrounding the use of this particular rule. However, as I indicated at the outset, the Standing Order says that a matter of urgent and pressing necessity explained by the mover forms a part of the application.
In this case, as in other cases, it may be that there are borderline matters involved in which the mover is simply expressing an opinion, and the matter is perhaps one of criticism and of policy without necessarily having any pressing or urgent nature to it. The Chair has generally resolved that question in favour of the person applying to the House for unanimous consent, because the simple expedient is to deny consent.
This always places the Chair in a difficult position. While I do not think that the few minutes at the start of the day gives us an opportunity to discuss it, I certainly would welcome at some time, perhaps by way of a point of order on any particular application, a full discussion on what principles should govern the Chair in the acceptance of the presentation of these motions.
I do not think we can do it at this time, but possibly by way of this one, if the President of the Privy Council wishes to take this example to serve notice that later this day, or at a time set by the Chair, there should be a discussion of Standing Order 43,1 would be glad to do it in that way.


Allan Joseph MacEachen: Mr. Speaker, this has been a troublesome point for some time, and I welcome your suggestion: it is one that I would want to press, that we set aside, at an early date, an opportunity to debate fully the use of Standing Order 43 to ensure that if false allegations are made, or if debating points are made in the motion, there will be an opportunity-under the fairness of debate that is supposed to be established in parliament-for those on this side of the House to have an adequate opportunity to reply. I would like to debate that point of order next week, whenever Your Honour would like to raise the point.


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I take it my friend has not forgotten that he is the government House leader and can call the matter at any time he likes. In fact, he could have done it long before now, without rising on a fallacious point of order at the outset in order to put a point of view across and thereby disturb the order of business of this House.

October 20, 1978
Standing Order 43 is there for a purpose and it should be used by hon. members for a purpose. I do not wish to see the diminishing rights of private members further diminished because the hon. gentleman finds it uncomfortable to hear the truth.


Allan Joseph MacEachen: I rise on a question of privilege-


Mr. Speaker:: Order, please. In accordance with the practice we have followed since we altered our procedures to take motions under Standing Order 43 prior to the question period, it is usual to await the conclusion of the question period before dealing with points of order and questions of privilege. However, I do feel this Standing Order ought to be discussed in some way.
The matter has been raised today, and further exchanges at this time would obviously give rise to other matters which would be argued. I should like to have the subject left in my hands. I will take the earliest opportunity which meets the need of the House leaders and, in particular, of the two combatants this morning, to give hon. members the fullest opportunity to amplify their feelings on this rule and the exchange which has taken place.
May I take it that this application is by way of a point of order which will be deferred for discussion until a more convenient time?


Some hon. Members:: Agreed.


PUBLIC ACCOUNTS COMMITTEE
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise, under the provision of Standing Order 43, to present a motion of urgent and pressing necessity.
In light of the federal government's supposed commitment to reduce government spending, and owing to the extraordinarily effective response by Mr. L. Quaglia, president of St. Boniface General Hospital in Winnipeg, to Premier Lyon's call to eliminate waste and mismanagement in all government departments and institutions, a response which resulted in an estimated $3,700,000 savings on operating expenses at St. Boniface hospital, without lay-offs, and maintaining the high level of patient care for which St. Boniface hospital is world-renowned, I ask leave to move, seconded by the hon. member for Provencher (Mr. Epp):
That Mr. Quaglia be invited to appear before the public accounts committee of the House of Commons to outline his program of employee involvement in the cost reduction of $3,700,000 and with a view to applying his plan to all federal government operations.


Mr. Speaker:: Presentation of such a motion can only be done by unanimous consent. Is there unanimous consent?
[Mr. Baker (Grenville-Carleton).J


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is for the Minister of Justice. The minister stated yesterday he would not elaborate as to specific courses of action he might take in connection with the illegal activities of a minority of workers in the postal services. However, Canadians are wondering for how long we can allow a double standard to continue with regard to a majority of law-abiding labour and a minority of law-defying labour.
Could the minister advise the House, if not specifically, what the government intends to do, bearing in mind the legislation passed earlier this week, the present status of the Public Service Staff Relations Act and the provisions of the Criminal Code, under the options available to it by way of injunctions, dismissal or other form of recourse? Surely the public is entitled to know that.


Hon. Otto E. Lang (Minister of Transport and Minister of Justice):: The hon. member has mentioned the options that are available. It might be noted that even in a case like this in regard to which parliament passed a law very recently, it is still necessary to gather the facts and move with care when proceeding against individuals. It is our intention to do that, to ensure that the law is respected.
I said the other day, and I say again, that respect for the law comes best through ordinary compliance with the law by Canadian citizens, and I make a plea again to the individuals involved and their friends that that point be noted and be made time and time again. In the current circumstances we are proceeding, and the first action to be taken is proceeding by way of seeking injunctions. That material is being prepared, and that may be in court this afternoon in certain localities.


APPOINTMENT OF MEDIATOR-ARBITRATOR IN LABOUR DISPUTE
John Allen Fraser: Mr. Speaker, I thank the minister for his remarks. I would like to put a supplementary question to the Postmaster General.
In the legislation which was passed earlier this week there was provision for the appointment of a mediator-arbitrator. In answers given yesterday, it was not clear whether the government had the agreement of any person to take the job or whether the government had had any opportunity to discuss
October 20, 1978

the appointment of the person to be named with the appropriate people. Has anybody accepted the job? Has anybody indicated that he will take it and, if there is more than one, are any of these people acceptable to the parties who have to enter into the arbitration?
My third question is very specific: is the government in such a position that it just cannot put together any kind of mediation-arbitration as was contemplated in the act which was passed only a few days ago?


Hon. J. Gilles Lamontagne (Postmaster General):: Mr. Speaker, the Minister of Labour is now actively engaged in trying to find a mediator who will be acceptable to the government and all the parties involved so that the job can be done as soon as possible. I think we can expect the Minister of Labour to make this appointment very shortly.


John Allen Fraser: Mr. Speaker, I can understand how my question might have evoked a general answer if there was not any specific answer; but has anyone said to the government, "Yes, I will take on the job," or is the minister still looking?
That is a simple question, but it certainly is important because on Monday night we were assured: the Acting Minister of Labour said to me, in answer to a question, that we could be assured he would make that appointment within hours. If no one will even accept the job, the minister will have a difficult time making the appointment. It is time we found out what the situation is.
[ Translation]


Mr. Lamontagne:: Mr. Speaker, I can only say that the Minister of Labour is very actively looking for this person. [English]
Listen. Don't get excited.


Some hon. Members:: Oh, oh!


Maurice Lamontagne: I think in a situation like this hon. members should keep their calm. The Acting Minister of Labour is working very actively at the moment to make the most judicious choice of a good arbitrator-mediator, and I am confident that he will find one within hours or within days.


George Harris Hees: You could have added, weeks or months.


SUGGESTED MEETING WITH CUPW TO STOP ILLEGAL PICKETING
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I have a question for the Postmaster General and I trust that he will show some real concern in this matter.
In view of the fact that illegal picketing is still taking place in some major postal plants across the country, has the hon. gentleman assumed his responsibilities and met with officers of the Canadian Union of Postal Workers who are recommending this illegal action, thereby preventing return to work of a large
Oral Questions
number of postal workers who want to obey the legislation to provide for the continuation of postal service which was passed by parliament last Tuesday, and could he inform the House whether he has taken other specific action to end this continuing harassment of postal workers who want to work?


J. Gilles Lamontagne: Mr. Speaker, I think the Minister of Justice defined very well the steps he intends to take with regard to legal procedures. I must say, and repeat, that all our postal buildings are open. Security measures have been taken to accept and welcome the employees who want to work. I want to reiterate what I said yesterday, that is that if they come to work at any post office in Canada, they will be paid. Mr. Speaker, I should also like to add that we have received innumerable telephone calls, telegrams and messages from the Canadian people, and that we are acutely aware of the situation. But, in view of the difficult circumstances we are going through at the present time, it is most important not to take steps that could be unfair towards the majority of Canadian postal workers. I believe it is generally known that extremists in the postal services are in a minority. Hasty measures should not be taken that might create more injustice than would help the situation. I must say that we are very much concerned about the situation, and that we are now making very special efforts to try and convince the employees who want to work for the postal services to go back to work and respect the law.


Walter Gilbert Dinsdale: With reference to hasty action, I am sure the Postmaster General is aware that on May 18, 1977, the official opposition moved lack of confidence in this government because of our increasing concern about the drift toward the situation which can only result in final confrontation and complete breakdown of the postal service. That was in 1977, and it was on that occasion that CUPW requested that a royal commission be established.
In view of the fact that the postmasters general-there have been two since that time-have taken no action to deal with the crisis that we pinpointed in precise detail in 1977, will he now reread that debate and start implementing the recommendations which were made which will begin to establish confidence and trust in labour-management relations in the Post Office?


Maurice Lamontagne: Mr. Speaker, I think the hon. member will have the opportunity, during the committee sittings and when the bill for the establishment of a Crown company is introduced, to intervene as often as he wishes on that matter. I should also like to tell him that I shall be tabling, in a few minutes, the annual report of the Post Office Department for 1977; he can then see that, despite what he has just said, there has been progress in that department.

October 20, 1978
Oral Questions
[Engli&\


RESOURCES
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Prime Minister: it arises out of the very important decision that was reached by the Supreme Court of Canada in the Cigol case. As the Prime Minister will know, the decision reached by the Supreme Court declared ultra vires the law passed by the government of Saskatchewan which it thought was very clearly within its jurisdictional authority.
While considering that constitutional control of resources, the right to have effective management over resources, means something to the provinces-in this respect I am thinking specifically of forests, mines and minerals-would the Prime Minister agree that the law should make it perfectly clear that provincial governments have the right to levy indirect taxes in these fields?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, let me remind the leader of the NDP that as far back as 1969 we had proposed constitutional changes which would permit provinces to levy indirect taxes. The only proviso was that that did not affect interprovincial or international trade. It is obvious that only the federal government can have jurisdiction to regulate international trade-if Canada is, indeed, to be a country-and no province should be able to use the tax method to prevent free trade across Canada. These are the two provisos that we put then, and we still stand by them.
The Supreme Court made a very simple judgment: it is that the province indeed was trying to use powers it did not have in order to regulate international trade. We think the Supreme Court made a decision which stands on its own merit, and I am somewhat surprised that the leader of the NDP is trying now, across the House by way of a question, to suggest that Canada should not continue to exercise the power to regulate the common market within Canada.


Some hon. Members:: Hear, hear!


John Edward Broadbent: The Prime Minister knows very well that at least on this matter I and my party are in basic agreement with him: the federal authority must remain very strong indeed to ensure that there is an equitable distribution of the benefits of the wealth, for example, that occur throughout this country. The federal government has the right to levy its own indirect taxes on resources.
In his letter to the Prime Minister dated October 10, 1978, Premier Blakeney requested that the provinces be given at least the same right exclusively in the field of resources, and I have named the three areas of resources. That was accepted unanimously by the ten provinces in 1976; also, I thought it was accepted by the federal government. If the Prime Minister is in agreement with that, will he follow it up at the upcoming

first ministers' conference and accept the suggestion of making an amendment to the Constitution of Canada to remove all uncertainty in this area?


Pierre Elliott Trudeau: Mr. Speaker, the hon. Leader of the New Democratic Party said that he supported my view in so far as it permitted the redistribution of wealth across Canada. That is not the case I am making. Of course we must have that power. We have it now, and we exercise it.
I am making another case, that no province should be able to use its jurisdiction to prevent the free flow of goods across provincial borders. That is why, in the area of indirect taxation which can be used for this purpose, we stand by the position we have always taken and we think the position of the court is correct.
In 1976, Premier Blakeney reached some position on resources. We will debate that at the end of the month. We hope some accommodation is possible. We want provinces to be able to exercise fully their jurisdiction over resources, but when there is a conflicting interest with the importance of maintaining within Canada the free flow of goods, whether they be resources, manufactured products or anything else, then we think the federal government should remain supreme-and that is the position we will take.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, it is very important for members on this side of the House, and the people of Canada, to receive as clearly as possible the position of the Prime Minister on this. Whether indirect taxes are levied by the government of Saskatchewan, the government of Alberta or the government of Ontario, and if that should constitute an increase in the price of the product paid by another province, would it be defined by the Prime Minister of Canada as a hindrance to free trade throughout the country and, therefore, the province which levies such a tax ought not to have the right to do so? If that is his position, certainly it is not the position of the New Democratic Party of Canada.


Pierre Elliott Trudeau: Mr. Speaker, the hon. member is asking if this is the definition of the Prime Minister. I understand this is the line which Premier Blakeney used during his election campaign in an attempt to indicate that the federal government, somehow and in some way, was trying to take the resources away from Saskatchewan and that they needed Premier Blakeney to protect the province. I am pointing out that it is not the Prime Minister taking that position; it is the Supreme Court of Canada stating what the law is.


An hon. Member:: Oh, oh!


Pierre Elliott Trudeau: It was the Supreme Court of Canada stating what the law is. I have indicated that we are flexible in our approach to changing the law. I have indicated what the parameters are, that we will consider permitting the provinces to exercise jurisdiction in indirect taxation; once again, provided it does not interfere with the free flow of goods from province to province.
October 20, 1978


TRANSPORT
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to direct my question to the Minister of Transport: it concerns the continued disruption of shipping on the Great Lakes.
Now that negotiations between the striking engineers and the Lake Carriers' Association have broken off, can the minister tell us what action the government is taking or is contemplating to bring the parties back to the negotiating table?


Otto Emil Lang: Mr. Speaker, of course I was glad to hear the news yesterday that one of the two unions involved in the dispute, and the employers, with the help of the mediation of the Department of Labour, had reached an agreement. That dispute is settled as a result of the successful collective bargaining process and the efforts of the Department of Labour.
With relation to the contract with the engineers, negotiations and mediations broke off yesterday but the parties have now agreed to meet again and there will be further meetings, again with the help of the Minister of Labour.


Donald Frank Mazankowski: Mr. Speaker, since it has been indicated by the president of the Lake Carriers' Association, Mr. Norman Hall, that if the strike is not resolved by the weekend about 2,000 crew members and seafarers will be laid off, with the effect of further entrenching a prolonged disruption of services, will the Minister of Transport indicate what action the government is prepared to take to ensure that the whole system is not shut down prematurely; that is, shut down until the spring, as a result of which we would lose the benefit of the next month and a half of shipping season, which is crucial considering the impact to the Canadian economy, an impact that would be irreparable?


Otto Emil Lang: Mr. Speaker, in view of the ongoing mediation and negotiations, I think it would be wrong to talk in terms of the hypothetical and what we would do if this did not succeed. Let us hope that, as with three other contracts in this area in respect of which negotiation has succeeded, they will succeed in this one remaining area during the course of the weekend.
While I have not heard from lake shippers directly or indirectly about the matter, I would, indeed, think they might reconsider their notice of intention to lay off, in view of the one settlement which has occurred and the possibility of operating some ships, and in view also of mediation and the hope for success during the course of the next day or two.


EARLY ACTION TO SETTLE DISPUTE
Mr. Jack Murta (Lisgar):: Mr. Speaker, it is our understanding that the lake carriers have not heard any word, as of just a few minutes ago, about any kind of resumption of talks,
Oral Questions
so the whole question is still very much up in the air. The impact, as the minister should know, would be extremely serious for parts of the country, especially western Canada and any area that is affected by the iron ore shutdown.
If we are still in this position on Monday, will the government be ready at that time to take some concrete action? Once again, I hate to say this but the only recourse at the present time seems to be legislation. Is the government prepared to move in that direction in the first part of the week in order to settle this very serious matter?


Otto Emil Lang: Mr. Speaker, that, obviously, is a repetition, in different words, of the earlier question. I indicated why it was not wise to speculate on the hypothetical failure of these discussions and, instead, that we should emphasize reasonableness on the part of the parties.
As far as the meeting is concerned, I only learned about 55 minutes ago that there were now grounds for the resumption of mediation and discussions and I would think by this time, if they had not heard an hour ago, they will have had that communication on the subject.


Jack Burnett Murta: Mr. Speaker, if the strike should last without any action being taken by the government, the part of this country that will be most seriously affected by a slowdown, certainly in grain movement, is Manitoba because all the grain out of that province goes to Thunder Bay.
Does the government have any contingency plan to go to an alternative system of moving grain to Vancouver or some other area of the country, if that should happen? The economy of Manitoba will be very seriously affected if we keep fudging on this issue and if it keeps dragging on well into next week.


Otto Emil Lang: Mr. Speaker, fortunately, some 20 per cent of lake shipping has been continuing even throughout this strike. In addition, the ocean-going vessels which can go to Thunder Bay and collect grain were also still moving. Needless to say, in view of the circumstances of this week of immobility of certain parts of shipping, the Wheat Board and others have been looking at all the alternatives in order to again take advantage of wherever there is space and wherever there is movement. This will include absolute maximization of the use of Vancouver and Prince Rupert on the west coast.
If that can be done, it will take some of the pressure of moving Saskatchewan grain away from the movement of Manitoba grain, allowing Manitoba grain to move more freely to Thunder Bay. We are looking at all possible formulas, including the use of unit trains directly to the east, in order to catch up anything that may have been lost through the last few days.

October 20, 1978
Oral Questions POST OFFICE


STEPS TO STOP ILLEGAL STRIKE AND PICKETING
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the Minister of Justice: it is supplementary to questions asked by the hon. member for Vancouver South.
It seems to me there is a little foot-dragging here. The minister indicated that he wants to get the facts. The facts are that we have an illegal strike and illegal picketing. It seems to me that the minister has admitted there are three options: an injunction, criminal proceedings, and dismissal.
I want to know what makes the minister think an injunction is going to work, when in fact we know there is a small group that is defying the law at this particular time. Why does the minister opt for an injunction at this time? What are the reasons for moving for an injunction at this urgent moment, rather than spelling out why he has not sought proceedings under the Criminal Code, or dismissal? I think he must explain that.


Otto Emil Lang: Mr. Speaker, I said earlier that all the options were being examined and there are different timeframes for each of them. Hon. members may think that a law, having been passed, it can be enforced against individuals automatically. That is not the case. The Attorney General labours under the difficulty that he still must respect the civil liberties of people and still must respect due process. It is a difficulty I labour under very gladly, I may say, because I do not believe that generalizations can lead to criminality or conviction. That simply does not work in our country, either. When I talk about the respect for the law that I want these individuals to observe, I think it is partly because we carefully observe these traditions, that the law does, indeed, deserve that respect.
I should make it clear that the injunctions referred to and which we will be seeking will be directly related to the picketing activity which, of course, is an obstacle to the resumption of work by those who do, indeed, want to go back to work. That is a first step and one which we hope we can take as quickly as possible. I cannot comment on that further, again because of traditions about what one should say in respect of what will be going before the courts.
As far as other matters are concerned, the facts in relation to individuals and in relation to the law are being obtained and further action will be taken. I do not say that in any sense of trying to hold out a threat, because I fall back again on my original statement, that willingness to obey the law and the recognition of that principle is of most fundamental importance.


Lincoln MacCauley Alexander: Mr. Speaker, I would have more faith in the minister's answer if he had taken the opportunity to give me and the people of Canada some indication as to what he was referring to in terms of timeframes.


INSTITUTION OF PUBLIC INTEREST DISPUTES COMMISSION
Lincoln MacCauley Alexander: Let me
address this question to the Postmaster General, since he seems to be in a box at this particular time. Members of this party have indicated over and over again that the solution placed before the people of Canada for peaceful labour-management relations lies in the public interest disputes commission. Under questioning in the House, the minister has indicated more than once that he was not considering this. Yet at the same time, in the other place I understand that the Acting Minister of Labour has indicated that the public interest disputes commission is under active consideration.
Will the minister stand and tell the people what is going on? Is he considering the public interest disputes commission as an answer, or is he not? The minister has left the people of this country with the impression that he has discarded that idea.


J. Gilles Lamontagne: Mr. Speaker, I do not think I can give an answer to that elaborate question. Everything we have done in an attempt to obtain a settlement of this postal dispute is well known.
I can state again that we are wide open to renewed discussions. Clause 5 of Bill C-8 provides the union with an opportunity to come back to us, and with common agreement we can talk again about our differences. If the union wants to come back, we are wide open for discussions and we will discuss these differences at any time they want.


Lincoln MacCauley Alexander: Why do you evade my question, sir? I am talking about the public interest disputes commission.


Mr. Speaker:: Order.


TRANSPORT
Mr. Paul E. McRae (Fort William):: My question, Mr. Speaker, is to the Minister of Transport. Given the nature of the strike on the Great Lakes-which I believe must be concluded in the next few days-which, incidentally, highlights the vital role of the port of Thunder Bay in the Canadian economy, given the backlog of grain in the west, and given the fact that studies have been going on this summer with the idea of increasing the number of months the Seaway is in operation, does the department have any plans at this stage to lengthen the time the Seaway will be open this year, so that some of this backlog can be moved, assuming that the strike will be concluded within the next few days?


Otto Emil Lang: Mr. Speaker, without any doubt the Seaway and Thunder Bay are extremely important aspects of our transportation system in Canada. That is why a short time ago we
October 20, 1978

indicated that a consultant analysis had been started in relation to the lengthening of the Seaway season.
The Seaway, under current circumstances, is likely to be approaching its full capacity in a fairly short period of time-a very short period of years. Clearly, anything which can be done to lengthen that season and allow the port of Thunder Bay and vessels on the lakes to operate for a longer period of time would have great benefit for Canada, and it is being pursued with that in mind.


USE OF CHURCHILL IN MOVEMENT OF GRAIN
Mr. Cecil Smith (Churchill):: Mr. Speaker, my question is supplementary to the questions of the hon. member for Lisgar: it is to the Minister of Transport. When the minister said that alternate routes for shipping grain out of Canada for export would be looked at, he failed to mention the port of Churchill.
I would like to ask the minister if he would give consideration to my suggestion, that when the m.v. Arctic comes into Churchill on November 15, because it is a class II icebreaker it be accompanied by four or five other ships, thus bringing the shipping of grain out of Churchill up to the anticipated 30 million bushels?


Otto Emil Lang: Mr. Speaker, I did not mention the port of Churchill for the very good reason that for the last four or five years we have been maximizing, absolutely, to the highest extent possible, the volume of grain moving through Churchill. Therefore, we can add nothing more to it under current circumstances.
The problem with shipping into Churchill late in the season may have just been emphasized, and that is the difficulty with ice which the m.v. Arctic has just run into. In view of that difficulty, I am not at all sure at this point in time if it will be able to make the trip which originally had been planned. I do say, however, that the fact this ice-strengthened vessel ran into difficulty is some indication in logic to the hon. member as to why other vessels may not want to try the trip at that time of year. The solution to Churchill's problem may lie more in lengthening the season by avoiding certain ice problems in the harbour, but they are not simple problems to overcome.


Cecil Morris Smith: Mr. Speaker, I think the solution to the problems in Churchill would be the changing of this government. The minister said that the port of Churchill was being utilized to its full capacity. I believe he has read the Bryden report and not the Hall commission report which says that 55 million bushels could be shipped through this port.
In light of that, will the minister now take it upon himself to ask the Wheat Board, if they cannot ship another 4 million or 5 million bushels out of Churchill, if in fact they will store the cargo which has been sold for shipment out of Churchill, next year in Churchill, thus easing the pressure on storage facilities on the prairies?


Otto Emil Lang: Mr. Speaker, if the existing situation allows railway cars to be available, the Wheat Board may well find it
Oral Questions
possible to move grain into storage in Churchill earlier than they had anticipated. That does depend, however, on whether cars can be freed from the other movements of grain.
As far as the question of expanding the port of Churchill to handle 55 million bushels is concerned, the Hall commission report recommended the construction of a very expensive terminal inland in order to accomplish that. I have to say that, looking at this from the point of view of total economic benefits, it is still true that the placing of that terminal at Prince Rupert where it could be used 12 months of the year, or at Thunder Bay where it could be used nine or ten months, simply gets a lot more grain through for the dollars available.
I hope the hon. member will appreciate that, even as a westerner who has long and strongly worked for the port of Churchill and its development, I too have to take into account the use of those dollars and the fact that if you can get two or three times the grain through for the same expenditure, then it would be something in the way of a waste to not do it in that fashion.


PUBLIC SERVICE
Walter David Baker: Mr. Speaker, I have a question for the Minister of Justice in his capacity as Attorney General. In the Senate, on October 18, 1978, with respect to the postal matters, Senator van Roggen wanted to know whether or not there was sufficient provision in the Public Service Staff Relations Act to enable the Minister of Labour to terminate the employment of those who disobey the law, as opposed to only fining them. The unequivocal answer by the Minister of Labour was that there was power in the Public Service Staff Relations Act. There have been press reports which say that a search of that act has indicated that the power does not rest there.
With respect to the remedies which are available to the Government of Canada, and in view of that uncertainty, can the Attorney General assure the House that the government has the capacity to dismiss for failure to obey the law, if that should be a remedy that the government would consider? I ask, not in his capacity as Minister of Justice but as Attorney General, will the hon. minister advise the House as to the capacity of the government to utilize that one option that the minister, in his capacity as Minister of Justice, indicated that the government was considering? Do they have that power?


Otto Emil Lang: Mr. Speaker, without having the Public Service Staff Relations Act in front of me, I can say to the hon. member that there are, obviously, within it various powers to dismiss and some of those powers apply in circumstances such as those to which he refers.
It is true, however, that certain of those powers are subject to the usual protections in that act in terms of appeals and

October 20, 1978
Oral Questions
other procedures. I will not go further than that. Yes, the power is there. There are also procedures which are designed to safeguard individual employees, of course. These are all matters to be carefully considered.


INDUSTRY
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce. It concerns the very substantial investment by Japanese interests in the west coast shipping industry and the potential that this will have an adverse effect in terms of employment, pricing and processing of fish.
My question is: what steps has the minister taken to see that Canadian capital is available for west coast fishing interests, rather than Japanese capital of foreign capital, so that we can be assured that we are moving in the direction of Canadian ownership in terms of our west coast fisheries, rather than in the direction we are now, which is toward a foreign-dominated west coast fishery?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, with regard to Canadian ownership of the west coast fishing industry, any new venture by Japanese capital, or any other capital, into starting a new business in British Columbia, naturally would have to go through FIRA. Any takeover would have to go through FIRA. With regard to funds available from the Department of Industry, Trade and Commerce, it might be of interest to know that the Federal Business Development Bank last year loaned approximately $479 million and one-quarter of that money went to British Columbia.
In my own department, the enterprise development program was recently approved by Treasury Board to insure up to $1 billion in loans. I have said many times in this House that last year we helped 256 companies and that all but 7 of those companies were Canadian-owned. So we have money available and are prepared to assist any industry that can bring forward a bona fide case and show that it is particularly interested in developing the fishing industry, or any other industry.


Stuart Malcolm Leggatt: Mr. Speaker, the minister fails to tell us how much of that money went into the fishing industry. I can tell him that it was miniscule. Under the foreign investment review mechanism, only takeovers are reviewed. What is happening is that we have Japanese interests that are putting up loan capital rather that equity capital, and are therefore getting in under the review mechanism. This means that when you have tied contracts in terms of products, where you have a foreign company that is able to tie up your products because of a loan rather than a purchase, that is not reviewable.
My question is: will the minister now consider changing the provisions of the Foreign Investment Review Act so that these

kinds of product agreements which are coming in through the back door-through loan, rather than equity-will be reviewable?


John (Jack) Henry Horner: Mr. Speaker, we are prepared to look at all possible suggestions to facilitate Canadian business; but the hon. member is quite wrong when he suggests that only takeovers are reviewed by the Foreign Investment Review Agency. New businesses are also under review by the Foreign Investment Review Agency.
With regard to the Federal Business Development Bank, as I said, one quarter of the money loaned last year was loaned in British Columbia, and one-quarter loaned last year was in manufacturing. I will have to see how much went into the fishing industry. But the initiative must rest with the private sector; they must come to the bank and ask for a loan.


An hon. Member:: They are on strike.


John (Jack) Henry Horner: I do not know how many companies representing the fishing industry came to the bank and asked for loans.


CRIMINAL CODE
Mr. Ross Milne (Peel-Dufferin-Simcoe):: Mr. Speaker, my question is directed to the Solicitor General. Following the tragic shooting incidents, one in a Brampton high school and later another in Ottawa, I am sure all members were alarmed to learn that there was a similar incident in Winnipeg.
Could the Solicitor General give the House every assurance that the remaining provisions of the bill which was passed last session, including the firearms acquisition certificates requirements, will be proclaimed on January 1, 1979, as proposed?


Some hon. Members:: Hear, hear!


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, that is fully the intention of the government. I understand the hon. gentleman's concern in this matter. As the hon. member knows, most of the remaining provisions have been implemented. The firearms acquisition certificate provision is the only section which has yet to be implemented. It is our intention, in view of the offences that the hon. member has described and the dangers that are ongoing, to proceed with final implementation of that section on January 1. We shall also be proceeding with the aspect of the amnesty recall program during the month of November. Further publicity will be advanced in that area.
While I am on my feet, I would indicate that I am very pleased with the amount of public support the program has received: it is well deserved support.
October 20, 1978


BANKRUPTCIES
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question in the absence of the Minister of Finance, and now I see the Minister of State (Small Business) is also absent, will be addressed to the Prime Minister. Is the Prime Minister familiar with the Dun and Bradstreet revelation that while bankruptcies in Canada had a ratio to American bankruptcies of one in ten in 1970, they are now up to a ratio of seven in Canada for every ten in the United States?
If the Prime Minister is aware of this, has he done any review to find out why there is this sad increase in bankruptcies in Canada, bearing in mind they left defaulted liabilities of $2 billion in the last two years?


Pierre Elliott Trudeau: Mr. Speaker, no, I was not aware of what the hon. gentleman calls a revelation. I will read it and see if I have an explanation for it.

[ Translation]


THE MINISTRY
Charles Joseph Clark: Mr. Speaker, my question is directed to the right hon. Prime Minister. I would like to know if he intends to proceed with a cabinet shuffle and, if so, when.


Pierre Elliott Trudeau: The opposition leader's question astounds me, Mr. Speaker. I would think that he has enough to worry about shuffling his own members on the other side of the House.


Charles Joseph Clark: Mr. Speaker, I think that even if the Canadian people are anxious to elect a Progressive Conservative government, it is now urgent to have a cabinet which is able to face the present challenge. I am therefore asking the Prime Minister again if he intends to shuffle his cabinet and to appoint a new Minister of Finance. And if so, when?


Pierre Elliott Trudeau: Mr. Speaker, according to the Leader of the Opposition, a cabinet shuffle would allow us to meet the present challenge in Canada. I am aware of that, Mr. Speaker, but I believe that the present cabinet also allows us to do just that.


PUBLIC SERVICE
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I would like to direct a question to the right hon. Prime Minis-
Oral Questions
ter: it is supplementary to the question posed to the Postmaster General by the hon. member for Hamilton West.
Was the Acting Minister of Labour reflecting government policy in the other place on October 18, 1978, when he said:
I can assure the honourable senator that the recommendations of the Woods commission are under active consideration.
The principal recommendation of the Woods commission was the setting up of an industrial, or essential or public interest disputes commission. In light of the very dangerous confrontation that is taking place in this country today between a segment of organized labour and this parliament, can the Prime Minister tell this House if it is the government's intention to bring in, forthwith, legislation implementing the principal recommendations of the Woods commission, which the government has had now for ten years?


Pierre Elliott Trudeau: Mr. Speaker, the Acting Minister of Labour may have revived within his department interest in some aspects of the Woods report which, as the hon. member says, goes back ten years. I have not been informed of such a revival.


James Aloysius McGrath: Mr. Speaker, I have a supplementary question for the Prime Minister. I will put it to him in the form of a direct question. Is it the intention of the government to establish in this country an industrial, or essential or public interest disputes commission which would resolve the kind of dangerous confrontation that is now taking place in this country with respect to collective agreements or collective bargaining between government services that are obviously essential?


Pierre Elliott Trudeau: The short answer is no, Mr. Speaker. But I think I should be allowed to reassure the hon. member that the degree of confrontation which he suggests is not such so as to exhibit the alarmist tone that he is using.
The hon. member knows that 85 per cent of labour matters are under the jurisdiction of the provinces.


An hon. Member:: Ninety-five.


Pierre Elliott Trudeau: I have improved statistics from the New Democratic Party; I am told it is 95 per cent. I think, as usual, this statistic is off the top of the hon. member's head. At any rate, it is quite obvious that the danger of confrontation that the hon. member is talking about is, if it exists, mainly in the provincial area.
The second point is that in the past two years the Canadian strike record has improved immeasurably. The third point is that even when the Canadian strike record was very high, it took into account things which are not comparable with the figures of other nations because it took into account the very large sector of the public service which is found in schools and hospitals. This accounts for the very large strike record in the public sector.
All these facts are meant to reassure the hon. member that there are obviously some confrontation situations, like the present one in the Post Office, but we are not as despairing as

October 20, 1978
Business of the House
the hon. member about the future management-labour relations in Canada.


TRANSPORT
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of Transport, for which I have given him notice. The Esquimalt and Nanaimo railroad passenger service is slated for discontinuance on December 13 of this year.
Is the minister aware that passenger-loading on the E and N quadrupled this summer and fall? Can he now assure Vancouver Islanders that this popular, and now profitable, rail service will continue beyond December 13?


Otto Emil Lang: Mr. Speaker, I can tell the hon. member that I am aware of the very remarkable increase in the number of people using the service. I presume that will also be taken into account in the various steps which have to be taken with regard to the future of the rail service. There are a number of complex legal and procedural questions involved. I note the hope and optimism of the hon. member.


IMPLEMENTATION OF URBAN TRANSPORTATION ASSISTANCE PROGRAM
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, my question is to the Minister of Transport. Can the minister inform the House whether the master agreement under the urban transportation assistance program has been signed with the province of British Columbia? Can he provide any assurance that construction of the very necessary overpass at Inver-mere, B.C., will proceed without further delay?


Otto Emil Lang: Mr. Speaker, while we have been able to sign master agreements with many of the provinces, we have not yet reached that stage with the province of British Columbia.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I rise on a point of order. The government House leader was not in the House yesterday and therefore I did not ask the usual question regarding business of the House. He is here now. May I ask him the usual Thursday question, on Friday, with respect to the proposals of the government for business before this House?


Allan Joseph MacEachen: Mr. Speaker, the hon. member is aware that we are presently dealing with the borrowing authority bill in the name of the Minister of Finance (Mr. Chretien). We propose to continue that bill today and, if it is not completed today as I would hope, deal with it again on Monday. We will continue with it until we can see some prospect of completing it. Following that I would like to deal, as I indicated earlier, with the act to amend the Old Age Security Act.
There is standing in notice the bill in the name of the Minister of Finance which will be given first reading today that I would like to call, and the amendment to the Health Resources Fund Act that I would also like to call at an early date.
I would appreciate some comment from hon. members opposite as to when we might give second reading to the very important bill dealing with conflict of interest with respect to members of the House of Commons and the Senate.
With regard to the resumption of debate on the address, it is my intention to call that debate a week from Monday. In the meantime, we are having discussions as to how we might terminate that debate. I do not believe I should state the terms of the discussion. That can be done later.


Walter David Baker: Mr. Speaker, I would be quite prepared to speak to the hon. gentleman with regard to the conflict of interest bill. I take it he was asking for discussion on the matter. That is certainly agreeable.
I wonder if the minister would be interested in following the normal practice of having suggested allotted days for the period between now and the Christmas adjournment. I think there are five of them. If so, we could discuss the appropriate schedule.
Possibly while on his feet he could advise when he anticipates the notice with regard to establishing the Crown corporation relating to the Post Office. I understand this is actively under consideration by the cabinet. Can he indicate approximately when we might see that bill, since it is an important piece of legislation in light of what is going on in the country today?


Allan Joseph MacEachen: Mr. Speaker, I would be quite receptive to receiving a proposed list of allotted days that we could use as a basis for future planning. I had hoped it would have been possible to have given notice of the bill on the Crown corpor-tion relating to the Post Office today. However, because of a number of points that have to be further considered, it is not likely that I can give the notice earlier than this time next week. I feel that is a good target.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, we welcome the statement of the House leader on what the business will be for the next few days. I note that he did leave open two questions. First, may I say we would be happy to discuss with him the possibility of getting the conflict of interest bill into committee an early date.

October 20, 1978

The other comment I would make is that I thought we had reached agreement about completing the debate on the address in reply. At any rate, we are prepared to have it called again on Monday, October 30. We are also prepared for that to be the final day.


Walter David Baker: Mr. Speaker, I know that it is no secret, at least among House leaders, of the generosity shown to the government House leader with regard to the throne speech debate. It is a matter that he appreciates very much. If my friend is offering one day, that is quite agreeable with me, and has been quite agreeable for some time. I am delighted to see him in the position now where he can make the same offer. If later today the appropriate House order could be put down, we would be very pleased to consider it.


Stanley Howard Knowles: Mr. Speaker, that is not quite a representation of what happened. I thought we had agreed at the meeting of House leaders this morning. I am confirming that. We are prepared, all of us, to conclude the address debate in one more day.


Mr. Speaker:: Is the House ready to so order?


Stanley Howard Knowles: Mr. Speaker, if you order it, it is also agreed that the vote be taken at 9.45 p.m.


Allan Joseph MacEachen: Mr. Speaker, I confirm that this agreement was reached. I did not disclose the terms of the agreement because I did not recall that I sought authority from my colleagues to announce the agreement. However, I am delighted that it has been done on my behalf. I hope this seeming spirit of generosity will continue. May I add that it is understood the two days that are taken away from this debate are not to be added to the allotted days, otherwise it would be counterproductive.


Walter David Baker: Mr. Speaker, we should make it quite clear. The government has a problem with regard to its legislative program. There is not much in it with regard to incentives to the community. However, we have agreed, as he has suggested. Also in a spirit of generosity we have agreed to put back the private members' matters. Therefore the government in effect has the equivalent of another parliamentary day, or perhaps a bit more, for government business.
It has never been our tradition to hold up the business of this House of Commons but only to discuss those matters which are important. We think this is a point of view and position that are important for us to take in this. It is in that spirit we made the agreement we have discussed.


Mr. Speaker:: Order, please. I am beginning to get the impression we are having more difficulty agreeing with each other than when we disagree. Does the House wish at this time to proceed to order that there be one remaining day for the debate on the Address in Reply to the Speech from the Throne, that it shall be Monday, October 30, and that the vote thereon shall be taken at 9.45 p.m.?
Point of Order-Mr. Stevens


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.


POINT OF ORDER
Sinclair McKnight Stevens: Mr. Speaker, I rise on a point of order. It arises from remarks made in this House yesterday by the Parliamentary Secretary to the Minister of Finance (Mr. Martin). The parliamentary secretary, unintentionally I assume, misled the House when he said, referring to myself:
The hon. member knows this. He knows authority is being obtained now to cover the government's needs not only for the balance of the present fiscal year but for the next fiscal year so as to avoid our having to come back to parliament time and time again for the necessary legislation if we are to meet the expenditures which he himself, along with other members of the finance committee, examined in detail when the estimates were before the committee last spring and supported there.
My point of order is twofold. First, the current year's estimates as they were before our committee, and indeed in this House, were opposed on many points and, to the limit of our procedural ability, we tried to have certain of these estimates defeated.
My main point of order is that for the parliamentary secretary to suggest that expenditures for the next fiscal year, fiscal 1980, have already been approved, is totally erroneous. We have not seen the figures. We have seen no estimates. Indeed, we have seen no indication, even in the form of a budget, as to what the government plans for 1980 as far as expenditures are concerned.


Mr. Speaker:: I am not so sure that that point might not have been a better contribution to the debate than it was to the order of the House. In any case, it is now finalized.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

J. Gilles Lamontagne: Mr. Speaker, pursuant to Standing Order 41(2) and section 82 of the Post Office Act, I am pleased to table, in both official languages, the annual report of the Post Office for 1977-78.

October 20, 1978
Borrowing Authority Act


INCOME TAX ACT
Allan Joseph MacEachen: the introduction of Bill C-10, to amend the Income Tax Act to provide for a child tax credit and to amend the Family Allowances Act, 1973.


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

Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Perhaps I missed it, but did Your Honour call questions on the order paper?


Mr. Speaker:: If the hon. member would refer to the last occasion on which that question was raised, a few days ago, he will find it has not been the practice to call questions on the order paper until after the debate on the address has been concluded. However, in view of the rearrangement of our business perhaps I can forewarn the House that beginning on Monday of next week, I shall call questions on the order paper.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, October 19, consideration of the motion of Mr. Chretien that Bill C-7, to provide supplementary borrowing authority for the fiscal year 197879, to provide borrowing authority for the fiscal year 1979-80 and to amend the Financial Administration Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs, and the amendment thereto (Mr. Stevens) (p. 271).
Cecil Morris Smith: Mr. Speaker, toward the end of my remarks last night I was talking about the town of Churchill and the recreational complex which was built there by the government at a cost of some $13 million, and the fact that there are only 1,400 people left in this community which is saddled with keeping this huge complex in operation.
For some time I have been trying to establish what could be done with this white elephant, as it must be called at this time. I have heard some rumblings, some rumours, that a university

of the north might be in the offing-I understand the government is in something of a dilemma with regard to this complex. I suggest that consideration be given to setting up a university of the north in Churchill for postgraduate work in engineering, scientific research, and so on. Those studying there could concentrate on the potential of the north, not only in Manitoba but in Canada generally.
At present most of our northern research is carried out in places far removed from the north and it is about time that the government, having created this monster, seriously considered establishing a new university in the north for postgraduate work. Churchill is well known for its involvement in scientific work of various kinds and this huge complex could become the hub of such a university as I am proposing.
At the beginning of my speech I mentioned Otineka and Le Pas and the billion dollar loan to Panama. I can tell you, Mr. Speaker, that north of the 53rd parallel in Manitoba, Liberal words about restraint have an odd ring to them. In 1970 the Le Pas Indian band, a group of approximately 1,200 Cree-speaking people, made a proposal for a small shopping complex to be built on their reserve. What they had in mind was a complex covering some 25,000 square feet. The proposal was accepted by the federal government through the minister of Indian affairs at that time, now the Minister of Finance (Mr. Chretien). What did the people of Le Pas end up with? It is hard to believe. The Indians wanted a little store. Ottawa built them a mall. Once approval had been given by the minister, work went ahead and, by the time the mall was completed, it covered 190,000 square feet. The estimated cost was in the neighbourhood of $4 million, and the final cost was $8.4 million. I attempted several times in committee to ascertain the reasons for this huge cost overrun. Invariably I was told that it was due to government overbilling.
I will tell you what happened, Mr. Speaker. The Indians have been placed in a most difficult position because once the mall had been built the government turned it over to the band organization; Harry Wilson, the chairman of the Otineka corporation, is finding it almost impossible to make it a paying proposition, although he is working very hard, for the simple reason that this 190,000 square feet mall is still not filled though the complex was officially opened two years ago. As a result the government has felt obliged to write off $4.2 million of the guaranteed loan it gave in connection with this mall.
The Indian people have been put in the position of trying to bail the government out of a situation it manufactured for itself by allowing spending to get completely out of control. It is the taxpayers of Canada who are being called upon to pay the $4.2 million the government wrote off some two months ago, and if things continue as they are now in that shopping mall, the government will be spending still more of the taxpayers' dollars to write off the entire debt. I would like to develop this theme further but I am sure it is not new to hon. members. It is just another example of the bumbling mismanagement and overspending that have gone on under this government. These things happen because the government decides to take matters out of the hands of the communities concerned. Costly
October 20, 1978

gifts are made, and then they walk away from them, declining responsibility for upkeep and maintenance once the initial construction has been completed.
What does the bill before us ask parliament to do? The government is seeking authority to borrow another $17 billion, and I can tell you, Mr. Speaker, that I shall want some answers from the minister before I agree to it. For example, is $1 billion of that $17 billion going to the Republic of Panama for the development of a copper mine there as the EDC is planning right now? The EDC was, of course, somewhat embarrassed when General Torrijos announced in a speech in Panama that Canada has agreed to guarantee a $1 billion loan to that country to help develop the Cerro Colorado mine. EDC denied this, however, stating that negotiations for the loan were still at an early stage.
On October 16 I learned that this loan had still not been guaranteed and that the final negotiations had not been completed. However, it is the intention of the government to go ahead, and the EDC says it is a very good project in which to get involved. But how do I explain to the miner at the Hudson Bay Mining and Smelting Company at Flin Flon, which mines copper and zinc, that we have a government which is taking tax dollars and sending them to the Republic of Panama to develop a copper mine there? The miner at Flin Flon is wondering if he will be laid off next week because the Canadian copper industry has gone to rock bottom. How do I explain that? There is no way.
What the government should be doing with this $1 billion it is considering lending to the Republic of Panama is putting it into the Canadian mining industry, so that instead of shipping raw materials to other parts of the world and buying back manufactured goods, that $1 billion should go into the Canadian mining industry so it can process raw materials here and provide much needed jobs.
Hon. members opposite can smile, and the Minister of Employment and Immigration (Mr. Cullen) can say that the Churchill constituency receives a bigger grant under the Canada Works Program than any other constituency, but that does not satisfy me, because that constituency has the highest rate of unemployment. Churchill is entitled to a bigger grant if money is going to be handed out in that fashion. We need long-term jobs, but lending $1 billion to the Republic of Panama to develop another copper mine will certainly not provide jobs in Canada. That money should be used to develop processing right here in Canada.
The chamber of commerce of Leaf Rapids, Manitoba, has sent a petition to the government. The chamber of commerce of Thompson, Manitoba, sent a petition to the government telling it to get off this foolishness. Instead of financing a copper mine in the Republic of Panama, why not put some money into the sagging mining industry right here in Canada? The government is asking for authority to borrow another $17 billion, but I certainly will not vote for this bill unless we know where this money is going to be spent.
Borrowing Authority Act
I am dealing only with the Churchill constituency. Will some of this money be spent on another white elephant complex in Churchill? Will it be spent to built another huge shopping mall like the one which has become an empty barn in northern Manitoba? Will it be used to send another $1 billion to the Republic of Panama?


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. member that his allotted time has expired. He may continue with unanimous consent. Does the hon. member for Churchill (Mr. Smith) have unanimous consent to continue?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Paul Edmund McRae: Mr. Speaker, I am pleased to be able to participate in this debate and to make a few points which I think are rather essential when we are talking about the national debt and its relative size in terms of the gross national product.
The hon. member for Waterloo-Cambridge (Mr. Saltsman) made an interesting speech in the House yesterday dealing with some new economics and dealing with what he termed a new society. I have talked about this three or four times in this House, and I will say it again and again-there were very important lessons to learn from the hon. member's speech, and I have some other thoughts along the same line, that is, that there is no question that in the world today a whole range of industrial nations are undergoing some very serious economic problems.
Japan has a surplus of trade, and therefore a yen which is very high. Japan is finding it more and more difficult to compete with dollars like ours. West Germany and Switzerland, which have relatively low inflation rates, still have some very serious long-term problems. The IMF and the Big Seven talk in terms of 5 per cent as being like zero in relation to inflation. It is not like it used to be when 2 per cent was considered normal. We now have to deal with figures like that.
Unemployment is a problem throughout the world; much more so in Canada than in most other countries, but it is certainly a problem throughout the world. There are many social problems which are being faced by all countries.
The hon. member for Waterloo-Cambridge said that ours is a new society. I prefer the term "new economics". There is a totally new notion called scarcity, and we find this in the major area of energy. This has some very major ramifications for the world's governments. The net outflow of about $50 billion a year to the Arab countries from the United States is one of those ramifications, and it has militated considerably against the economy of the United States and the American dollar. Because of our reliance in terms of trade upon the United States, there are ramifications for our economy as well.
We are told that we must expect to spend about $180 billion over the next 15 or 20 years on energy projects. That amount far exceeds the rate at which we are spending today. That rate

October 20, 1978
Borrowing Authority Act
more than doubles the number of capital dollars going into energy projects in relation to the total number of capital dollars available.
Another factor which seems to be little known to hon. members opposite is that the techniques which have served us well in the past, Keynesian fiscal and monetary techniques, are no longer working the way they did, and for two reasons. One is the nature and size of the problem. It is interesting to hear members of the Conservative party talking about $2 billion in tax relief as the kind of stimulus which will really move things. This is what the Tories plan to do if they happen to be fortunate enough, from their point of view, or unfortunate enough, from the point of view of the country, to be in power.
They talk about a $2 billion tax cut changing things. That is the same figure we used to hear in the early sixties. We were told that such a move would change the economy around and move things along. In those days we were talking about a gross national product of $40 billion to $50 billion. Today we are talking about a gross national product of $220 billion. We were talking about a stimulus of 4 per cent or 5 per cent at that time, and now we are talking about a stimulus of .75 per cent to 1 per cent, and saying that that will move the economy. I want to talk about that later, but at this point I am saying that the magnitude of the problems make it almost impossible for this to happen.
Present techniques also tend to be counter-productive. That is the thing which worries most economists. This was mentioned by the hon. member for Waterloo-Cambridge. He said that if there were tax cuts to stimulate growth in the economy, we could expect that money to go into savings. Back in the early sixties about 2 per cent or 2.3 per cent of the gross national product went into savings. Today the figure is about 10 per cent, a growth factor of about 4. This goes into savings and therefore does not get into the stream as purchasing power. Some goes in terms of purchasing luxury goods, which often means that money flows out of the country through foreign purchases. People do take trips south and so forth, and while that is desirable from an individual point of view, it is not the kind of thing which stimulates the Canadian economy.
I am using this to illustrate the point that these techniques do not work the way they used to work, and some of them are counterproductive. For instance, there is a good case to be made that if you do in fact increase the deficit by a tax cut, the increased deficit will have an effect on inflation. Increased inflationary costs will mean that our goods cost more and more on the world market, and very often that might mean that we produce less and there are fewer jobs. It used to be that if you had a little inflation, you would have few unemployed. There is a case to be made today for actually increasing unemployment by increasing inflation.
So, putting these factors together, I think we are going into a new economic world, and some of the things we are saying in the House do not work any more. I think that was the case that the hon. member for Waterloo-Cambridge made, and that

is the case that many of us on both sides of the House have been making. We have to look at new ways of handling our economic problems.
When we come to Canada more specifically, we have one or two unique problems which separate our efforts from the efforts of other countries to solve their economic problems. The most compelling single factor that makes us very different from any of the other OECD countries is the high rate of unemployment and, more basically, the very large growth in our labour force.
I have used these figures before, but I will use them again because I think we must keep saying this. I have a chart in front of me from Statistics Canada which was produced in spring. If one takes the year 1965 as the base year, using the figure 100, one finds that for every 100 persons in the labour force in West Germany in 1965 there is now something in the order of 96 or 97 people, an actual decline of people in the labour force; for every 100 people in the labour force in Italy in 1965, there is still 100; for every 100 in the United Kingdom, there is about 104 now; Sweden has about 112; France, 110; Japan, about 114. All of these are major countries with which we can compare ourselves.
Let us not compare ourselves with Mauritius or some such country with which it is not possible to compare economies. Let us compare our economy with those of the Big Seven and the major European countries, the economies of which are similar to ours. Taking them as a kind of average, you find that most of those countries have had either no growth in their labour force or a growth of perhaps less than 10 people per 100 over the period from 1965 to the end of 1977.
There are three countries that stand out beyond these figures. One of them is the United States, which has 28 more people per 100 in the labour force than they had in 1965, and one is Australia, which has 30 more people per 100 in the labour force than they had in 1965. This is quite different from the first group. But there is one country that stands out in a way that no other does, and that is Canada. We had 46 more people per 100 in the labour force at the end of last year than we did in 1965, way above anyone else. Even with an 8.5 per cent or 9 per cent, or even a 10 per cent unemployment rate in this country-and there is always a debate about this rate-we would not have a really serious problem in this country, having done the things we have done to create jobs, if we had at this stage the same growth in the labour force that exists in the United States. That is the fundamental difference between Canada and the other countries to which I referred. The growth in our labour force has been unbelievable.
This is what concerns me in the House. I hear people saying, "Throw another $2 billion into the hopper, and we will solve the problem". The NDP member would up the ante to about $4 billion. This is an horrendous problem. We have 46 more people in the labour force per 100 than there were 12 years ago.
Why am I talking about this when we are talking about our national debt and the money we need to cover it? I am talking about it specifically because this growth in the labour force
October 20, 1978

has been the single factor that has created the problems which have brought us this debt. We have a massive $4.5 billion to $5 billion going out in UIC payments each year. This is entirely related to the growth in the labour force. I haven't the figures at hand at this point, but several billion dollars have gone out to DREE, in transfer payments to provinces, to Canada Works, and so on. All this is entirely related to the growth in the labour force.
I do not think I am exaggerating one iota when I say-it is probably absolutely true-that if our labour force growth was like the growth in the U.S. labour force, we would be incurring virtually no debt today simply because we would not have to spend that money. I would say we could wipe out $10 billion to $12 billion of government expenditures if we had the same situation that exists in the United States, given what we have done in the past. I think there is much nonsense being said in the House and in the press that totally ignores that fact.
If you pick up the Globe and Mail or any other newspaper, you often find on the first page some statement about the economy which is totally isolated from the context, like the statement I heard this morning on the CBC credited to the hon. member for York-Simcoe (Mr. Stevens) that our national debt has increased four or five times over the last 15 or 20 years and that his is a very bad situation. This is the kind of thing the public keeps hearing.
If you turn to the financial page of the Globe and Mail, of the Financial Post, or of most of the larger newspapers, you will find a slightly different story. They will not be saying that the growth in our debt has increased four or five times. They will say, yes, it is four or five times larger, but also the GNP has grown four or five times. Actually, we have somewhat less debt as related to the GNP today than we had 15 years ago. This is what one finds in the financial pages of the papers and this is what economists tell me; this is what I find when I read various economic journals. But when I read the front pages of our daily newspapers, all I see are these alarming, disturbing figures. Now we have reached the point where the press, the opposition, and the government have to talk about real figures. They have to talk about the real growth in the labour force and the effect of that real growth on our economy.
So I am saying-and I have been saying it all along but I hope that perhaps I am saying it better now because it takes some time to understand this-along with the hon. member for Waterloo-Cambridge-and I do not agree with all his solutions-that we have a new economics now, a new set of problems which will not be solved by the simplistic, Keynesian techniques that were used in the past. They were great in the 1960s; they do not obtain today.
Now I should like to spend a couple of minutes talking about some of my concerns in terms of the things the opposition members have been saying in what I think are their honest efforts-in no way am I imputing to someone dishonesty in this business-to find solutions to our economic problems. It is not dishonesty. It is that people have not come to grips with the fact that there is an essential qualitative change in the world's economies. Canadians are affected by that as much as
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anyone else. This essential qualitative change is what we should study. I am not talking about dishonesty, misleading information, or anything of that nature. I am talking about government leaders throughout the world not understanding the phenomena referred to by the hon. member for Waterloo-Cambridge, myself, and others.
I should like to refer to one of the recent statements of the hon. Leader of the Opposition (Mr. Clark) regarding mortgage and municipal taxation deductions from income tax. It is not a bad idea. It appeals to a lot of people, even though this type of program contains some grave inequities which must be dealt with. Certainly the government has looked very, very carefully at the same type of program. We see some of the desirability in it. There is no question a lot of middle class people are caught in a bind. This particular suggestion by the opposition makes some sense, so it should not be rejected out of hand. But we should look at it, taking into account the new economics.
I rose today in order to look at these suggestions and so-called techniques, taking into account the world in which we are living. There could not be a worse time to advance a mortgage and taxation refund program. The deficit for this fiscal year is $11 billion or $12 billion, and the opposition comes forth with an idea which would increase the deficit to $14 billion or $15 billion. There has been some mention of figures, but the best figures of many economists indicate an amount of close to $4 billion shared by provincial, federal, and municipal governments.
In view of the inflationary situation, an increased deficit is not acceptable at this particular point. The suggestion of the opposition is a good and valid one, if it is applied to Keynesian economics and the pre-1975 period. The point is that $2 billion, $3 billion or $4 billion is put into the housing sector in the hope of stimulating it and creating jobs. There are a lot of economists in the world who do not believe that $2 billion or $3 billion will result in any material change in the growth of this country. Therefore government revenues will not be increased one iota because of this increased demand. That is why I feel such a proposition is very bad at this particular time. I do not believe it will increase jobs or have any effect on the job market. It will not have the expected effects on revenue. Therefore, it can be only inflationary and further increase the deficit.
The opposition party has claimed for a long time that government spending must be reduced. There are problems with deficits, but government revenues cannot be cut back. An interesting chart was put out by the President of the Treasury Board (Mr. Andras) which showed revenues and expenditures, side by side, for the last ten years. The lines continued along parallel, and crossed at points which indicated small deficits or surpluses. Suddenly in 1974-75 the expenditure line continued to rise but the revenue line almost flattened. It is not a slow turn; it is an abrupt one. What happened in that period? The then minister of finance, in a minority government, on the
318
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suggestion of a push by the Tory party leader, at one particular point decided to index exemptions. Everything else was indexed, so we indexed exemptions, and the curve went off. The revenue line flattened right out.
One cannot have it both ways. Government deficits cannot be reduced by the reduction of expenditures, if at the same time revenues fall because of decreasing taxes. It will not work, it cannot be done this way. At the present time we are facing a very serious deficit problem. It is inflationary, has a bad effect on the dollar and so on. It is a major problem.
My main criticism of the mortgage and tax deduction notion is that a stimulus of $2 billion, $3 billion or $4 billion in our new economics will not have the same effect as it did in the era of Keynesian economics. It will not have the expected effect. We are talking about a stimulus of perhaps IVi per cent to 2 per cent of the gross national product in total. We are not talking about the effect of a $3 billion or $4 billion stimulus on a $45 billion GNP. We are talking about the effect of an approximate $2 billion stimulus on a $220 billion GNP. It is a very, very small factor, a little over 1 per cent.
The opposition indicated that the mortgage and municipal tax deduction scheme is popular in the United States. Perhaps that is so. One of the very important effects of such a deduction on the United States federal state and municipal taxation system is that more and more taxes are levied on property owners. For example, the average home owner in California is paying in the order of $5,000, $6,000, or $7,000 a year for municipal taxes. If a similar type of situation is placed before our average home owners, one must remember that there is a different kind of problem to face. In the United States this led directly to proposition 13. That was the result of this type of scheme. Property owners are encouraged to keep their homes highly mortgaged, not to pay off existing mortgages, but to remortgage because of these deductions. This is the type of thing which occurred.
The structure of this country supports property owners and property taxes. For example, in my area taxpayers pay approximately $800 or $1,000 a year, as opposed to the $5,000 or $6,000 in California. Of course that $800 or $1,000 is not the total amount of money spent by the municipality. Close to 50 per cent of the money for education in that municipality comes from the provinces. In turn, a lot of that money is transferred from the federal government to the provinces. In a sense we have already a built-in exemption within the federal income tax which is transferred to the provinces for welfare, education, and various purposes not specified. Then it is transferred to the municipalities. This is not the case to any great extent in the United States.
One has to understand these factors, and when you start playing around with the taxation system, making major changes out of the blue a few weeks before a by-election, and when you talk about that kind of change, then you are talking about changing the whole structure we have built up in Canada. I do not say the structure should remain forever

written in stone. The point of the matter is that changing the tax structure is an intricate thing and you do not just pick one little thing out of the hat and say we will do that. We all know that when we take this one small step we are obviously creating all kinds of inequities in terms of those people who now fully own their homes and in terms of those people who rent, and so on. We have to look after those people, and then we start to change the whole tax system.
I do not want to spend much more time on this, but I have dealt with it at some length because in the new economics, and the new kind of thinking that must obtain, there is no room in the future for these kinds of half-baked schemes, of picking something out of the hat, dropping it in and saying we will solve all our problems in this way. In no way do I impute any motive. Rather, I am saying this is the result of not understanding the situation. When a political party picks up something like this and says, "This is how we are going to run the next government," then I do not think that party really has an understanding of what is happening and should not have the right to govern, or that it will really be able to govern under the circumstances.
I really decry partisanship in respect of this kind of thing. When we start looking at the kind of world we are moving toward, the kind of world about which the hon. member for Waterloo-Cambridge talked, the kind of thing about which I have spoken many times, and about which the Prime Minister (Mr. Trudeau) has spoken, we must do some new economic thinking about changes that will fit into this new structure. It may well be that a government will be formed by members on the other side at some time in the future. I would ask them, before moving into this kind of thing, to think about the kind of world we are living in, and to avoid coming up with schemes that are good but irrelevant to the times.
Let us talk about a new kind of economics in terms of changes that have occurred and the new approach that must be taken by all nations, Canada included. Let us talk about the fact that we have a massive and unique problem which no other country faces, but which creates all kinds of tensions in this country. I refer to the growth in the labour force. Let us talk about the real terms of this problem rather than giving these $2 billion answers to everything.


Some hon. Members:: Hear, hear!


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I listened with intense interest to the speech of the hon. member for Fort William (Mr. McRae). He said during his remarks that the amount of unemployment in Canada has risen because of the degree to which jobs have increased.


Paul Edmund McRae: No, I said the labour force.


John George Diefenbaker: When he was speaking I decided I would find out what previous ministers of finance had said in this connection. In 1969 the then minister of finance said that we really mean business, and the business was the degree of unemployment that had to be met. Then in February, 1973, the Hon. John Turner, who today represents hope eternal and
October 20, 1978

survival for the Liberal party, said that the purpose of his budget was first and foremost to reduce unemployment. That was clear and definite. Then in the 1974 budget we find it stated that one thing that must be done is to restrain all government spending. Then within the last year on January 20, and I am sorry the Minister of Finance (Mr. Chretien) is not here today-he is a very busy man and I am not critical of the fact that he is not here-the minister said that he expected by the year end inflation would be down to 6 per cent. The hon. member for Fort William should certainly whisper a few of these ideas into the impenetrable depths of the cabinet mind today in this country.


Some hon. Members:: Hear, hear!


John George Diefenbaker: I was very much impressed by the speech of the hon. member for Churchill (Mr. Smith). He is an hon. member who is clear and definitive in the views he expresses. When it comes to Churchill, I have a particular interest in the area. My great grandparents spent part of the winter of 1812-13 in that area before they were driven out to York Factory, the Selkirk settlement of the day. They were driven out because they shot or killed too many partridges. They had their guns taken away-this was before gun legislation-and were driven out into the night.
The amendment moved by Her Majesty's Loyal Opposition is that we are of the opinion that the granting of this authority for massive borrowing in advance of any budget presentation is objectionable in principle. It has been proven today that what is stated therein is in accordance with the fact. The proof is in the degree of unemployment and the massive deficits, amounting to $13,000 million to $15,000 million, which exist in Canada.
On August 1 the Prime Minister (Mr. Trudeau) came back from his Moroccan trip and made a speech, about which the cabinet knew nothing. His ministers had to listen to that speech on television to find out what he was going to do.


The Acting Speaker (Mr. Turner):: Order, please. It being one o'clock, I do now leave the chair until two o'clock p.m. this day.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
John George Diefenbaker: Mr. Speaker, at the time of the adjournment I was referring to certain quotations concerning inflation. I will refer to one or two others that I have. The Minister of Finance on January 20, 1977, said, "We expected by the year end that inflation will be down to 6 per cent." In 1978 the Prime Minister (Mr. Trudeau) predicted that as a result of the controls that had been brought in he felt sure that inflation
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would be brought to 4 per cent. Another quotation from the Prime Minister on May 27, 1974, at Etobicoke, Ontario, says, "We are confident that we have a grip on the problem and will wrestle inflation to the ground." That has been quoted before, but apparently inflation wrestled him to the ground. A little later on in that same speech he is quoted as saying, "We are going to bring inflation under control, I pledge you that."
Those quotations are simply part and parcel of a trend through the years in which the Prime Minister has endeavoured to fool the people of Canada into believing that inflation could be controlled. I say this to you: I was prime minister for just less than six years, and the rate of inflation at its highest was 1.2 per cent, the lowest all over the world. We brought in the control of the valuation of money, and we fixed the dollar at 92.5 cents. In consequence this brought to Canada the greatest expansion of trade in its history up to that date.


Some hon. Members:: Hear, hear!


John George Diefenbaker: At that time the front bench Liberal party cried, oh, the lachrymose perversions they put on, "the most terrible thing" but they kept that control at 92.5 for seven years. This is indicative of the degree to which they endeavoured to deceive and succeeded, and at the same time carried on a policy which they had ridiculed.
I am not going to say any more about inflation because there are some other matters that I want to deal with specifically, except to say that with the rate of inflation at what it is today, the Prime Minister is looking around for a plan to conceal to what extent it has actually risen. He set up this board called CSIP, the study of inflation and productivity. They are going to change the manner of computation, for they say that too much importance is placed on certain things, food and the like. In the first issue of their magazine "The Monitor" they proposed this measure as a better, short run measure of inflationary prices and the success of government policy. This is an old trick. It is deception personified, because there is every indication that inflation will increase, but in order to pretend that it has not, a new system is set up, this CSIP system.
I said to myself, "In short, what do you think should be done?" It has taken me several hours to get this reply from the Bank of Canada, and instead of reading those massive figures, may I be permitted to place on Hansard the letter from the deputy chief of banking, delivered to me only a few moments ago, setting out in full the general monetary situation since 1968, during the period of the Prime Minister's administration. If I might have that permission?


Some hon. Members:: Agreed.


John George Diefenbaker: I will not go into the document, except to say that it shows that in this nation today, and in particular three years ago, and two years ago, there is and has been uncontrolled expansion of credit far beyond the requirements of our country. Over and over again this has been referred to, but without success.
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October 20, 1978
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I went into the bank the other day. I very seldom do this, so it was probably the first time in ten years. I wanted to find out what the monetary situation was, and I asked them to give me $10 in one dollar bills. I did not go into devaluation at all. What I received was then perfectly new printing press dollars. That is what we have in this nation today to a degree never before equalled; whenever they want any money, the printing press turns it out. There is one thing I might add that is of interest in that connection, and that is that in that department, as I am informed, they have four incinerators to bum used dollars, or dirty dollars that no longer should be passed in circulation.
Why does this government not do something to control the expansion of money? It is because it is easier to permit the expansion than it would be to act with courage and with determination. That is the suggestion I want to make today; that something along this line must be done. It will be hard to do it because people may resent it, but it is necessary. When you view the record of the Trudeau administration, it is one of spendthrift spending beyond anything before known in history, a $13 billion deficit this year. It will probably go up in the next year, while they are pretending that they believe in restraint.
In what way has the Prime Minister practised restraint? In that connection I point this out; that it costs $3 million to run his office today, whereas during my period of administration it cost $50,000 a year, and $75,000 during the administration of Mr. Pearson. During my period of administration we took over Harrington Lake, my late wife and I. The building was to be torn down, but we took it. The expenditures thereon totalled $50. Last year, as I understand it, the expenditure by this government in order to make it appropriate, fit for a sultan or a czar, amounted to approximately $85,000. I would like to ask the Prime Minister about that if he was here, but he never turns up when I am around.
We had to supply our own cars, Mr. Pearson and I. I think we got an allowance of $2,000 a year approximately. Nothing of that today. The Prime Minister has two $75,000 cars. They are bombproof.


Some hon. Members:: Oh, oh!


An hon. Member:: Not bugproof.


Some hon. Members:: Oh, oh!


John George Diefenbaker: In addition to that-a swimming pool at 24 Sussex Drive which cost $200,000. It was given by wellmeaning Canadian citizens-


Some hon. Members:: Oh, oh!


John George Diefenbaker: -who desired to remain incognito. I do not know why, making a contribution like that which you can deduct from income tax. Why? Who were these people? We asked. Information was not given to us; it was refused; hidden, the way so much of the information that parliament is entitled to today is being hidden I suppose with the vast expenditures

that are taking place. They talk about restraint. We have expenditures amounting this year to $2 billion or $3 billion additional, and yet the cornerstone of democracy in this country and in all democracies is the municipality.
Last spring the Minister of Finance told regional municipal government officials they could expect more grants in lieu of taxes this year. Now that plan has been scuttled. What does it mean? The total shortfall in this country today, that is, over what taxes should be on government properties and what is actually advanced, is $62 million a year, of which $33 million is in Ottawa. I do not know how they carry on, the city of Ottawa among other cities. It was said the government would expand that. It has now been turned down.
I live in Rockcliffe and the taxes today are at a point beyond which taxation can never possibly be successful. I suggest the first thing that should be done in order to help out the municipalities, and the taxpayers in the municipalities, is for that promise that the Minister of Finance made last spring to be carried out. Unless it is, municipalities will find themselves in bankruptcy.
Now then, where are we going? I am glad the Minister of Transport (Mr. Lang) is here because he has an answer to all of the questions. I have never seen him as affable as he was yesterday in all of the years that he has been here. He was the epitome of all the warm-hearted consideration of parliament that he so seldom evinces.
What are we going to get? 1 thought this House was called together for the purpose of providing opportunities for economic change and improvement in this country. Where is there anything of what the government has in mind today to cover inflation and unemployment? The hon. member for Fort William said,-I do not know whether the minister listened to him when he said it-"You know, we have the largest unemployment in Canada in all of the world. What is to be done?" Nothing. We are to have old age security-that is fine-and family allowances. It will not take long for one of those bills to pass. Then there is the health resources bill. Will the health resources bill help the economic condition of Canada today? Regarding conflict of interest legislation, I think the only interest the government has is in endeavouring to pretend that it is going to do something and then not do it. Because, after all, the Minister of Finance endeavoured to help municipalities out last year only to find his plan was turned down.
What are they going to do? They say, "Oh; wait, wait." That is the answer we got the other day, the hon. member for Vegreville (Mr. Mazankowski) and others, in connection with the strike on the Great Lakes.
Yesterday the Minister of Justice-he just beamed. "Oh" he said, "I won't deal with that because already negotiations are going on." It shocked his fine sensibility to think that anyone should say in advance what would be done unless a settlement came. Did he give that advice to the Prime Minister when he said to the posties, "If you go out, we will use the limit of the law"? Since when did that magnificent spirit of diffidence to face facts become the monopoly of this government?
October 20, 1978

I mention that, Mr. Speaker, because we had an event in Saskatchewan two days ago. I do not like to bring up horrible scenes of the kind. I do not know how the Minister of Justice was able to smile yesterday because the city of Saskatoon, I think they elected one Conservative and about six NDPs, and all the constituency represented by the minister pretty well turned NDP. But look, he smiles!


Some hon. Members:: Oh, oh!


John George Diefenbaker: The result placed Saskatchewan in the position where the Liberal party started with eleven members. "We were eleven and now we are none." Regina's six or seven seats went NDP, except for one.
The Minister of Justice looks as if he is going to ask a question. I am always ready for a question from intelligent wonders.


Some hon. Members:: Oh, oh!


John George Diefenbaker: Do you know why it happened? Do you know why the Liberal party is as extinct as it is in Manitoba and in Alberta, and also approaching extinction in British Columbia? It is because of this government. No other reason.


Some hon. Members:: Hear, hear!


John George Diefenbaker: James Fenimore Cooper wrote the "The Last of the Mohicans". Somebody will write today "The Last of the Liberals on the Prairies". And I warned the minister, and said with the deepest appreciation for everything he does and does not do-


Some hon. Members:: Oh, oh!


John George Diefenbaker: -he will be back in university-


An hon. Member:: Oh, oh!


John George Diefenbaker: -as soon as the election takes place.


Some hon. Members:: Oh, oh!


John George Diefenbaker: You say I overstate it. I always believe in quoting good authorities. Yesterday Senator Herb Sparrow-I think he was appointed by the Trudeau government-


Otto Emil Lang: No.


John George Diefenbaker: He wasn't. Oh, I got an answer.


Some hon. Members:: Oh, oh!


John George Diefenbaker: He is pre-Trudeau.


Otto Emil Lang: That is right.


John George Diefenbaker: He made a statement. I do not know whether the minister has had it but I think it ought to go on the record so that it will be clear. Senator Herb Sparrow said:
Prime Minister Trudeau should resign ... Sparrow said in an interview he blames the policies of Trudeau and federal transport minister Otto Lang-


Some hon. Members:: Oh, oh!
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An hon. Member:: Shame!


Stanley Howard Knowles: Such bedfellows!


Some hon. Members:: Oh, oh!


John George Diefenbaker: He said the federal policies that are ruining this country are unemployment-is there anything in this plan the government placed before the country today, that we are going to do in the next two weeks, to halt the declining value of the Canadian dollar and irresponsible spending?


Some hon. Members:: Hear, hear!


John George Diefenbaker: Mr. Sparrow has worshipped at the feet of liberalism all his life. He has been in the Senate for ten years. That is what he said. I want to bring this to the attention of the minister, interested as he is in his own future. He then said:
This record will destroy the Liberals, said Sparrow who was president of the Saskatchewan Liberal party from 1964-68 and who has managed federal party efforts in Saskatchewan during at least one election.
I give the minister the opportunity of saying that Mr. Sparrow does not mean an end for the Liberal party, but that is the view today all over Canada.
Passing on from there for a moment, they say they are keeping expenditures down. All I ask is a record of the expenditures in the office of the Prime Minister, in his official home and country place in the ten years since he has been Prime Minister. They would be most revealing. I think of that fabulous expenditure at Mirabel. Mirabel cost $l'/2 billion.


Otto Emil Lang: Mr. Speaker, I rise on a point of order. I gather that the $l'/2 billion figure the right hon. gentleman is using has as its source the Toronto Sun.


John George Diefenbaker: No, I am using fact.


Otto Emil Lang: That is certainly the worst of all sources. It is a matter on record in this House, in answer to a question some time ago, that the cost at that time was $325 million, including the purchase of land and total new construction. I say that because I know the right hon. gentleman would like to dissociate himself from those who suggest that this spending, which they cite as $l'/2 billion, is biased toward one part of the country or another.


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


John George Diefenbaker: A little guilty conscience brought him up because, after all, in the province of Saskatchewan, occupying a very high position-


Otto Emil Lang: Mr. Speaker, my point of order is what I take to be the imputation of motives when the right hon. gentleman refers to a guilty conscience. Let me just say this. I thought he would like to look at the facts, instead of a distortion of 'the facts with which I know he is much more comfortable.

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John George Diefenbaker: He at least ascribes a conscience to me. I cannot do the same for him because he spent $750,000 for himself and his family to travel all over Canada and elsewhere on government planes. He spent $8,000 of the taxpayers' money to attend the Grey Cup game in Calgary.


Some hon. Members:: Oh, oh!


Otto Emil Lang: Mr. Speaker, I rise on a question of privilege, a very serious one indeed.


John George Diefenbaker: This one is serious, is it? The last two were not.


Otto Emil Lang: The right hon. member says that perhaps the last two interventions were not serious. In one sense, they were not. Very often in this House error goes uncorrected. I thought it was important for me to correct the Mirabel figure. On my question of privilege-


John George Diefenbaker: The rules do not permit this kind of thing to take place, even by a person filling three portfolios but doing nothing.


The Acting Speaker (Mr. Ethier):: Order, please. The minister has a question of privilege. I would like to hear him.


Otto Emil Lang: Mr. Speaker, I believe it is a very serious question of privilege. While ordinarily I can sit and receive all kinds of remarks and innuendo, I know that very often there is the danger the suggestion will be made that because I sat and said nothing I accepted what was said.


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


Otto Emil Lang: Mr. Speaker, I am coming, in my question of privilege, to the reference by the right hon. member to an expenditure of $750,000 in connection with the use of aircraft. That figure, of course, is one which I supplied, although let it be known, if honesty-


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Ethier):: Order, please. The Minister of Transport (Mr. Lang) may raise this question of privilege at a later date. Right now it is mostly a point of debate, one that is argumentative. He is arguing a point previously made by the right hon. member.


Otto Emil Lang: On a question of privilege, Mr. Speaker-


Some hon. Members:: Order!


The Acting Speaker (Mr. Ethier):: Order, please. The right hon. member for Prince Albert.


Otto Emil Lang: On a point of order, Mr. Speaker-


The Acting Speaker (Mr. Ethier):: The Minister of Transport on a question of privilege.


Otto Emil Lang: I am now calling it a point of order, Mr. Speaker. I would like to return to the question of privilege. I do not

think Your Honour has given me a chance to state my question of privilege. It is not a matter of debate because I sat here and heard direct imputation against me by the right hon. gentleman. I must, as a matter of my right in this House, come to this question of privilege.


Walter David Baker: On the same point of order, Mr. Speaker-


The Acting Speaker (Mr. Ethier):: Order, please. I have recognized the Minister of Transport on a question of privilege. If he will get to his question of privilege, I will listen to it.


Otto Emil Lang: My question of privilege is this-


John George Diefenbaker: It was a point of order a minute ago.


Otto Emil Lang: The suggestion by the right hon. member regarding the use of aircraft by myself and my family is an insinuation.


John George Diefenbaker: It is the truth.


Otto Emil Lang: It is an allegation unbecoming of him and completely false in light of the fact that my very extensive use of aircraft is designed to allow me to carry out my duties.


Some hon. Members:: Oh, oh!


Otto Emil Lang: The right hon. member and his colleagues said he made an insinuation. He did have innuendo at the very least. I say to the right hon. member, do an honourable thing about it in terms of what he is alleging. If he is alleging wrongdoing in me, I say to the right hon. member that I have spent hundreds and hundreds of hours flying between different parts of this country as part of my duty to listen and talk to people. It is on government business I did that.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Ethier):: Order, please. I listened carefully to what the Minister of Transport has said. The point he seeks to introduce is argumentative. I would ask that whoever addresses the House today should speak to the amendment presently before us.


John George Diefenbaker: The hon. gentleman says what he has done. He has referred to the Sun as if it were something very wrong that appeared there. In a recent issue it stated:
Otto was completely unrepentent about his misuse of the taxpayers' planes. But what was the cheapest trick of all was the fact he made the poor Scottish nanny-whom he had been paying the princely sum of $50 a week to look after his seven children-pay half of the $279 ticket she needed to get back to Britain.


Otto Emil Lang: On a point of order, Mr. Speaker-


The Acting Speaker (Mr. Ethier):: Order, please. It is very difficult to keep order in the House when hon. members do not confine their remarks to the bill. I now have to recognize the Minister of Transport on a point of order.
October 20, 1978


Otto Emil Lang: More specifically, on a question of privilege, Mr. Speaker. The right hon. member might have checked those allegations in the Sun with me, because they happen to be false as well. The allegations in the Sun make me look bad by requiring a person working for me to pay her own fare home. The fact is we paid it, even though it was her legal obligation to do so. That too is false, and I would ask the right hon. member not to associate himself with those remarks in the Sun. That column happens to have nine specific errors in it.


The Acting Speaker (Mr. Ethier):: Order, please. I am sure all hon. members are interested in the discussion which is now going on, but I believe we should confine our remarks to the amendment.


John George Diefenbaker: It is only because I have so high a regard for the hon. gentleman that I speak with such restraint. But I want to say this to him with regard to the problem which now faces this country, the strike on the Great Lakes. Yesterday he smiled benignly and said we should not be discussing that matter because at that very moment the parties were considering whether the strike should be continued and the outlook appeared very hopeful. He added that any discussion of the matter in the House might be unhelpful. He also said he realized the loss being suffered by Canada in consequence of the strike and told us that the Lake Carriers Association and the engineers union were getting together. I now ask him why it is, in so serious a situation, that instead of holding that meeting today or tomorrow or Sunday morning, it has been postponed until Sunday afternoon? Again it is a case of playing with this country, fooling the people, pretending to take action, while at the same time refusing to act. Why is not something done?
In connection with the postal strike, let me say I do not support anyone who breaks the law. But why was it that the Prime Minister warned that if the postal employees struck, the full force of the law would be used against them and that there would be a parliamentary declaration? Why was this strike declared a national emergency within 24 hours, while the last one was allowed to go on for seven weeks? It was simply because of a desire on the part of the government to pretend it was going to act and to act firmly because of the impending date of an election.
I could go on indefinitely to cite examples of waste and extravagance unparalleled in the history of our country. Since the hon. gentleman is rising on points of order, I should like him to answer the following question. More than $125 million was spent on the sale of nuclear reactors. Some $20 million in fees was paid to mysterious agents. Who were these agents? Why was $20 million of taxpayers money handed out to them? The government has refused to give an answer. Who are these agents? We endeavour to get the facts but they are concealed from parliament because the government declines to answer. Consider its duplicity in pretending allegiance to the Crown while at the same time denying the Queen all her powers. It is no wonder the people have lost faith in this government to an
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extent not seen in many, many years, and all I would suggest is this: the earlier an election comes, the earlier there will be a possibility of salvation for Canada.


Some hon. Members:: Hear, hear!


Stuart Malcolm Leggatt: Mr. Speaker, I listened with great interest to some of the remarks made concerning this legislation. It seems to me that those who argue that the reason we are borrowing an additional $7 billion is because of waste in government spending, simply do not know what they are talking about and haven't examined any of the fiscal accounts of the Government of Canada.
There is no question the government is in a bind, there is no question that it does not have much choice but to borrow $7 billion, but to say at one side of one's mouth that you can't borrow the $7 billion, and out of the other side, "We are going to allow mortgage deductibility in respect of home ownership and further reduce revenues to the treasury by a major amount", makes no sense whatsoever. There has to be some kind of balance when we consider this question of government waste and government spending.
We have had the experience of the forces of Proposition 13 from California coming into British Columbia and selling the idea that, with a referendum, a simple proposition can be put that says you can cut 20 per cent or 30 per cent of your budget, and still run an efficient and good government. That is a siren song being played in the west and it will probably be played throughout the country. It is the most dangerous kind of proposition I have seen since I became serious about politics.
Just note what has happened. In the city of Berkley, for example, they have shut down their libraries, and they do not have recreational programs.
There is no doubt that we can be more efficient in government. There is no doubt that we can cut a great deal of the fat out of government, but examine the accounts; if you want to start saving money, consider first where you are spending it. The biggest part of the government accounts has to do with health and welfare, child and family allowances, and old age pensions. Yet there is no political party in this House with the courage to get up and say: let us really save money, let us cut $10 from the old age pension. This party would certainly never propose such a thing.
The idea is getting about that somehow or other government spending is bad and private spending is good, that if you build another hamburger stand on the block, that is a wise investment, but if you build a library for your community you are wasting money. That is Milton Friedmanism taken to its logical conclusion. That is the kind of philosophy that is being espoused throughout this country, and it is time the people of Canada took a serious look at the impact of that kind of philosophy in terms of the civilization we have been able to achieve in Canada, one which implies a reasonable balance between public and private spending.

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My party will, 1 suspect, vote against this bill because we believe that it is wrong to continue forever with deficit financing. In this particular year we can see a need for additional borrowing, but somewhere along the line we will have to remind ourselves again about what Lord Keynes had to say about budgeting. He still believed that in the long run you had to pay the price. I must say that as a democratic socialist I have just as much objection to deficit budgeting as any right wing Tory. I say to my friends on my left in the Social Credit party that one part of their philosophy that I have always been able to understand-perhaps the only one-is the virtue of balanced budgeting and the virtue of not having a continuing deficit in the accounts.
[DOT] (N42)
We cannot continue to put ourselves in the hands of foreign investors and foreign moneylenders, and as long as we continue to run these kinds of deficits, our capacity for social progress and for flexibility goes down the tubes.
The reality here is that when we have a Sll billion, $12 billion or $13 billion deficit, we can talk all we want about the changes we want to effect in society, but our hands are tied. The hands of this government are tied. If the people of Canada decide to have a Conservative government, the hands of that government will be tied. The hands of a New Democratic Party government would also be tied, because with that kind of deficit there is no room to manoeuvre. There is very little room in which to manoeuvre. Therefore, surely it is in the interests of everyone in this country that we examine the idea of cyclical budgeting rather than having constant deficit financing of $11 billion to $15 billion a year.
The last government in British Columbia, the government of the provincial New Democratic Party, was defeated to a large extent because one of its ministers went $100 million over in his budget. He miscalculated the extent to which a new pharmacare program, which the New Democratic Party had introduced, was needed, and he was $100 million out.
People screamed "fiscal irresponsibility". They said, "You socialists can't run a peanut stand", but they elected a good number of government members in the next federal election when the country was running an $11 billion deficit. The government buried $100 million in the ground at Pickering. No one will ever see that money again. The government squandered millions of dollars on the Mirabel airport.
It becomes a question of trying to understand the difference between a million and a billion. Many people do not quite understand the difference in the amounts, but we cannot continue to operate government irrationally, and we cannot continue to provide the services the public demands. It is not just this party which demands additions to welfare, additions to pensions, and further government interference in the area of welfare. That has generally been popular and will continue to be popular. However, with this kind of deficit financing, the hands of any government will be tied when it tries to improve that particular feature.

One of the reasons for this bill is the fact that we are now wasting as much as $1 million a day abroad to buttress the value of the Canadian dollar. I have seen figures ranging from $750,000 to $1 million a day. Surely that is the most monumental waste of all. People can talk all they like about civil servants who have not been earning their salaries, allegedly, etc., but that $1 million a day is a phenomenal waste.
The Minister of Industry, Trade and Commerce (Mr. Horner) tells us that our trade picture is improving and that in fact we in this country are getting out from under, but the reality is that we are continuing to go in the wrong direction. It is not the trade picture which is causing the Canadian dollar to fall and fall. In 1977 we had a surplus on the merchandise trade account of something close to $3 billion, but when we look at our service transactions and examine what we have paid in travel, interest, dividends, freight, shipping and other areas, the key figure lies in what we are paying out to those who have lent money to Canada both privately and publicly. That figure is just about $3.5 billion a year, and it is a drain on the resources of this country.
The trend I have seen in this House is that foreign ownership is no longer an issue and that we are so desperate for capital that we do not need to review foreign investment seriously. We have the Foreign Investment Review Agency, and we have a minister who really is acting like a fox among the chickens.
There is no question that our free trader Minister of Industry, Trade and Commerce has no real interest in controlling foreign investment or directing it only to those areas which are in desperate need. A classic example in my own province is what happened in the fishing industry.
As a result of negotiations at the Law of the Sea Conference-and I might say that the Canadian delegation played a vital and constructive role in them-we have expanded our sea boundaries out to 200 miles. The result, however, is that Japan is the big loser. The Japanese desperately need fishing markets where they can get fish to continue to supply the massive Japanese fish market. Therefore they have placed capital on the market in that industry which is more advantageous to us than capital we can get anywhere else. They have said that they want a piece of our fishing action so that they can be guaranteed access to that resource. I have every sympathy for Japan in doing that, but I have no sympathy for a government which does not understand what Japan is trying to accomplish. This means that jobs are going to Japan. It means that we do not process our fish here, and it also means that the price of that product can be artificially depressed where purchase agreements are tied to loans to the Canadian fishing industry.
Because of a lack of imagination on the part of the Minister of Industry, Trade and Commerce we are allowing foreign capital to come into our fishing industry without restriction or review. As a matter of fact, it is not reviewable because it is loan capital. It is not take-over capital, and it is not establishing new industry. We do not have legislation to control it. A government with imagination would not allow this to happen but, rather than taking the draconian move of saying we will
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not allow capital-and clearly the fishing industry needs capital-we should be saying that we will offer Canadian capital at better rates than the Japanese are offering it.
We should go to that market and say that if it needs capital it must get Canadian capital and that it will get Canadian capital at better than competitive rates. That is only one example of what could be done if we had a government with an industrial strategy. This government has none. It continues to operate on a day to day basis, and it looks like that day to day operation will be coming to an end in the near future. That might not be a bad thing.
It might be a good thing to have a change of government, whether it be a change to a Conservative government or to a New Democratic Party government. I think a change may be necessary to get the spirit of this country going again, because there has been an atmosphere of tiredness for a long time in terms of the way our affairs have been conducted.
We talk a lot about economic conditions in Canada. We hear much rhetoric in this place and in politics generally to the effect that everything which happens in the country is the direct result of whatever government may happen to be in power. While the New Democratic Party was in office in British Columbia between 1974 and 1975 there was a total of 100 bankruptcies. The following year there was a total of 197. In the following year there was a change of government. The new government said that the New Democratic Party had been scaring foreign capital away, that it was far too tough on the business community and that it was in fact antagonistic to the business community. In the first year of office of the new government the number of bankruptcies rose to 421, and in 1977-78 the number rose to 674. In the first five months of this year there were 281 bankruptcies.
I am not saying that that is the fault of the provincial government nor the fault of the federal government, and I am not saying that there were no bankruptcies or very few in British Columbia when there was a socialist government, or because there was a socialist government. These things occur from time to time in the cyclical economy we have, and people who are engaged in the field of politics have great difficulty restraining their rhetoric. Blame is always cast as if all the evils of the world sit right at the government's door, and it is said that the new Jerusalem will come when we change governments. That is not going to happen. We are faced with certain realities, and no matter which government we have, that government will have to embrace the concept that in the world of the future there will be less to distribute.
Now, I happen to think that the NDP, or democratic socialism, is the best vehicle to have as a government when a crisis exists and when one has to consider the possibility of future scarcity in the world, it is only the NDP, with its principle of equality in sharing, which can hold the political fabric together. Because in the long run, over the years, we have developed a welfare state in Canada, and we have always congratulated ourselves around the world that somehow we are
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very fine people because we have been redistributing wealth and we have been creating old age pensions, unemployment insurance, and the various other social programs. The reality is that the people of Canada have given nothing to those particular projects, nor have the governments.
What has happened is that our economy has expanded and we have taken the additional wealth we have created and redistributed a little bit of it. But no one else has said, "I am taking less". People out there have said, "We want more, more and more". All I am saying, Mr. Speaker, is that the day will come when we will not be able to do that any more, when someone will have to make a sacrifice, when the spirit that was abroad in this country in the second world war will have to come back, and when we will be willing to give and to sacrifice.
The reality is that in the last ten years the poor section of the population has retained approximately the same percentage of the GNP, about 4 per cent, and the rich, the top 10 per cent, have retained something in the order of 20 per cent of the wealth. There has been no redistribution of wealth, and we have created our social programs out of the expansion of the pie. The proposition is that, if that pie stops expanding, we will have serious trouble in this country because someone will have to give up something, and that has not been the case up to now. There has been enough to distribute and, I suggest, only the philosophy of democratic socialism can contemplate that particular crisis which we might have in the future.
Now, what is the immediate solution to the question of the dollar? The idea that we should continue to allow the natural flow of capital to take place between Canada and the rest of the world is a disastrous mistake in terms of the dollar. Unless the government has the courage to impose some kind of exchange controls, problems that we have seen in such places as Sudbury, problems that we have seen where it is far more advantageous to invest in the resource sector of the third world, will continue to exist. We cannot allow the drain of Canadian capital to continue.
I am not suggesting that exchange controls need to be applied on small amounts of money leaving this country, but let us take a figure in the area of, say, $75,000. You might then say that the Parliament of Canada believes that you should keep your money in Canada, that Canada is still a capital shy country but it is particularly capital shy in terms of Canadian capital. If we do not impose some exchange controls, the dollar will continue to be soft at 84 cents or 85 cents-it could even go lower.
I do not suspect that this particular bill will do much for the Canadian dollar. I suppose that the people who look at money in the city of New York are looking at this piece of legislation to borrow another $7 billion abroad wondering what will happen to the Canadian dollar after it is passed. Exchange controls are the immediate answer to two major problems: the first is the softness in the Canadian dollar; and the second, and perhaps the most important one, is that the multinationals which have come to Canada, which have reaped the benefits of our resources, which have made some contribution to this
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society, but which have developed their capital on the ingenuity, education and work of Canadians and then decided to take that capital abroad, are not good corporate citizens.
What we do with bad citizens is to pass laws to place some kind of control on them, and until we take courage in our hands and impose exchange controls on the capital flows of multinational corporations, Sudbury will just be the beginning of a massive problem all across our resource sector. As a matter of fact I do not think that companies like Cominco and some of our pulp and paper giants would be unsympathetic to a temporary exchange control once the total problem was explained to them, and once they understood the difficult situation in which this country has now been placed as a result of the movement of the capital that has accumulated in this country.
There is too often a simplicity in the debate in this place. All too often unnecessary cheap shots and slanging matches between members of parliament take place here, and 1 want to tell you that the public does not appreciate that at all. I think they are tired of the stupidity of debate in this place, they are tired of personalities jumping up and throwing jibes at each other. I do not think that kind of conduct enhances this place or enhances the reputation of politics or politicians. It is time we in the House ended the personality conflicts and got down to talking about issues, instead of, "What did you do at some time in the past", etc., etc.


Some hon. Members:: Hear, hear!


Stuart Malcolm Leggatt: When I speak to members of the public 1 find, I must say, a feeling that we have lowered the level of rhetoric in debates to nonsense, and they recognize nonsense. The average voter out there knows games when he sees them being played. Let us get back to talking about issues; let us not talk about personalities. Thank you, Mr. Speaker, that is all I have to say.


Mr. Alan Martin (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I had not really intended at this time to rise again in this debate, but I believe we are now debating the amendment rather than the main motion.


Walter David Baker: Mr. Speaker, may I rise on a point of order. As I recollect the order of speakers, the last time the matter was before the House the amendment was put by the hon. member for York-Simcoe (Mr. Stevens), and it was following the putting of the amendment by the hon. member for York-Simcoe that the hon. member for Scarborough West (Mr. Martin) spoke. The question is now on the amendment, and I do not think he has the right to speak now, although when the amendment is disposed of he may speak on the main motion, of course.


Mr. Mclsaac:: Mr. Speaker, on the same point of order, may I say that the opposition House leader surely realizes that the amendment was being considered by the Chair at the time and was not formally put until later on in the evening. Surely that is a fact.


Walter David Baker: Mr. Speaker, I want to speak on the point raised by the government whip. I hope that the decision of the Chair will be that it is not only when Mr. Speaker gave his ruling that the debate started on the amendment of the hon. member for York-Simcoe. The debate was started at the time when the amendment was put. I think that would be the normal way in which one would deal with the matter. Anything else would be a travesty of the rules of the House of Commons. The rules are quite clear that a member can speak only once in each stage of the debate, and the stage of debate at the moment is consideration of the amendment of the hon. member for York-Simcoe.


Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the principles outlined by the hon. member for Grenville-Carleton (Mr. Baker) are excellent. This is very easy since he quotes from the standing orders, but his interpretation is wrong.
Yesterday evening at six o'clock, the Speaker of the House called the motion for the first time and the hon. member who had the floor spoke before six o'clock and talked about the main motion at the second reading stage. Therefore, the time between the moment when you reserved your decision concerning the amendment moved by the hon. member for York-Simcoe and the moment when you gave your ruling did not constitute a debate on the amendment as such, but rather on the main motion. It is only at six o'clock yesterday evening that the Speaker of the House put the motion in front of the House. In view of the circumstances, it is therefore obvious that the amendment could not be debated before the motion was put to the House, which was done only at six o'clock yesterday evening, and the hon. member did not speak before that time. I therefore submit that he is quite entitled to speak at this time, Mr. Speaker.


The Acting Speaker (Mr. Ethier):: I have no precedent to guide me in this particular instance. I read the amendment when it was moved and I asked whether I might take it under consideration and rule on it later on. It is very difficult to determine whether the hon. member was speaking about the amendment or the bill. I therefore ask all hon. members for their guidance on this point. If there is unanimous consent to allow the hon. member to speak on the amendment and to consider that when he spoke previously, it was only about the bill, this would be acceptable, but I could not recognize the hon. member at this time without consulting further the precedents that may exist if there were not unanimous consent. Is there unanimous consent?


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, this question is very simple in that it is a determination of an amendment put by an hon. member. The Chair seeks the

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indulgence of the House on the question of a decision. In fact, hon. members of the House could insist upon Mr. Speaker rendering his decision at that time, as well as giving his reasons for that decision. It is in the spirit of accommodation that the Chair is provided with an opportunity to put together a reasoned judgment, because some amendments present difficulty.
For the hon. Parliamentary Secretary to President of Privy Council (Mr. Pinard) and others to argue that the division of speakers shall start from the time Mr. Speaker renders his judgment is quite wrong. In the past I have put amendments or raised points of order in debate where Mr. Speaker has taken two or three days to render his decision because the matters were rather difficult. It was readily understood that there was no prejudice, and that, whatever the decision may be, it is dated back to the point at which the amendment or the point of order was put forward.
As the hon. member for Grenville-Carleton (Mr. Baker) said, to do otherwise would be a most invidious position in which to put the Chair, because one could quite unfairly accuse the Chair of guiding the nature of the debate by merely withholding judgment on a point of order or an amendment. That is not acceptable. Because of the experience I have had in the Chair and otherwise, it is clear in my mind that the amendment dates from the point it is put forward by the proposer and the seconder, and not from the date of the judgment given by the Chair on a complex question.


Otto Emil Lang: Mr. Speaker, I was very interested in the points raised by the hon. member for Edmonton West (Mr. Lambert), particularly in his noting that when there is a difficult question which needs to be decided, argued about and considered at length, then usually the House makes a sensible arrangement and continues debate. That could apply in this case because there is an interesting point involved here which perhaps was not argued before. It may deserve further argument, and therefore, it might make sense on the one hand to let the hon. parliamentary secretary speak, knowing that would be his second time on the motion and amendment.
When a decision is reserved on an amendment and speaking continues, clearly one of the possible results is that the amendment may be ruled out of order at the conclusion of Mr. Speaker's deliberation. Then it is difficult to say that the member was speaking on the amendment. Obviously the government would put up speakers dealing with the main motion in this case and not with the amendment, if there is a possibility that the amendment will be ruled out of order. In that event, the words and comments become completely meaningless in the context of the real debate.
I recognize that I am arguing a question which perhaps Mr. Speaker wants to reserve upon in terms of a formal decision. I know that the Chair said the same spirit of co-operation which allows for debate to continue, while that issue is being decided in regard to motions, can lead the House to resolve the matter amicably this afternoon without prejudging the question
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whether the House might hear this afternoon from the parliamentary secretary.


The Acting Speaker (Mr. Ethier):: Order, please. I recall what happened. After 1 read the amendment of the hon. member for York-Simcoe (Mr. Stevens), I said that I would reserve judgment. Also I recall recognizing the hon. member for Waterloo-Cambridge (Mr. Saltsman) on the bill. Therefore, I recognize the hon. Parliamentary Secretary to the Minister of Finance (Mr. Martin) at this time.


Some hon. Members:: Hear, hear!


Alan Gray Martin: Mr. Speaker, I do not want to a take a great deal of the time of the House in speaking on the amendment. Yesterday when I had an opportunity to speak on the main motion, I put before the House certain statistics which I felt were important in that they indicated how well Canada and Canadians were doing vis-a-vis a number of other countries. I did not select the countries with which to make the comparison. I used the same countries which were referred to by the hon. Leader of the Opposition (Mr. Clark) in his initial speech commencing debate on the Address in Reply to the Speech from the Throne. Yesterday the hon. member for York-Simcoe (Mr. Stevens), the financial critic for the opposition, identified the countries as being West Germany, the United States, Denmark, Sweden, Switzerland, and one or two other places and then I referred to the point originally raised by the hon. Leader of the Opposition, which was reiterated yesterday by the hon. member for York-Simcoe, that Canada was in seventh place in relation to these countries. They both indicated that Canadians were sitting on a tier which was seven points down in relation to some other western industrialized countries.
I raised the point yesterday that that was completely incorrect. I referred to statistics of four and five years ago, statistics regarding increases in food prices, employment records, creation of new jobs, housing starts and a number of other areas. Also I pointed out that Canada was in second place in most of these cases, and that some of the countries mentioned by the hon. member for York-Simcoe as being in a far better position than Canada were in fact as low down as fourteenth, fifteenth, or in a number of cases, eighth, ninth or tenth place as compared to this country. I made that point yesterday and I might come back to a few more of these statistics this afternoon.
I should like at this time to come back to a quote that was said to come from the hon. member for York-Simcoe, the financial critic for the opposition, on a commentary on the radio this morning, in which the inference was left, with me at least as an early morning listener of early news broadcast, I think it was at seven o'clock, that Canadians were building for themselves debt upon debt which they are going to have a great deal of trouble paying back. I think that was the context
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of his remarks; at least, that was the inference I gained from the point made by the newscaster.
I believe the hon. member was comparing our situation with that of the United States. That is probably a reasonable comparison in view of the fact that we do compare so much of what we do in this country with what is done in the United States. The U.S. is our best customer and is where 70 per cent of our exports go and, contrary to what former President Nixon thought, we all know Canada is in turn its best customer. I think he thought at one time that Japan was, but that impression was soon corrected. We are, indeed, each other's best customer, so I think a reasonable comparison would be the long-term debt outstanding of the two countries.
The comparison I want to make is in terms of the borrowings outstanding by the two countries; that is, by the central governments in Washington and Ottawa. This is again in relation to gross national product. In other words, these are percentages of gross national product. I will go first to the period from 1960 to 1969 in order that we get a little bit of the history of a period during which, at least for a few years, this country was governed by that party on the other side of the House one of the few periods in this century when they have had the opportunity of being the government.
The figure for the United States during that period is 39.2 per cent. That is the percentage of the U.S. gross national product, for a given year, that is represented by their total outstanding debt. That figure has come down over the years in the United States, from 1960 to 1969 to the year 1977. The United States has improved the situation to the point that this figure now stands at only 29.9 per cent of the gross national product, represented by total outstanding debt. That is the long-term debt owed by the central government, and indirectly owed by every resident of the U.S.A. Those are the American figures.
The Canadian figures are amazingly close for the period 1960 to 1969, in fact varying by one-tenth of 1 per cent. In that period the central government debt in Canada, which is the federal government debt, was 39.3 per cent of our gross national product, as against the United States figure of 39.2 per cent. As I say, with one-tenth of 1 per cent variation, basically the two are identical.
We move to 1977. I mentioned earlier that the United States seemed to have improved its situation in that the total long-term debt outstanding decreased as a percentage of gross national product. I think the variation in the United States was some 12 percentage points. The same thing happened in Canada. This is not going to be happy news for members of the opposition, because again it is a little bit of good financial news. Happy news for members of the opposition is that kind of news the right hon. member for Prince Albert (Mr. Diefen-baker), a former prime minister, quoted from the Toronto Sun, making some imputation regarding certain legitimate costs incurred by the Minister of Transport (Mr. Lang), and making other imputations about a particular airport costing five times what the Minister of Transport indicated were the

actual costs. These are good figures and that is why we do not hear very much about them, unfortunately.
The figure has come down from 39.3 per cent for the period 1960-69 to 27.4 per cent for 1977. I mentioned earlier that the United States had brought its figure down to 29.9 per cent, whereas ours is 27.4 per cent. That is a considerably better performance than occurred in the United States.
In other words, 27.4 per cent of our gross national product today is the figure that is represented by our total central government outstanding debt. In comparison, the U.S. figure is 29.9 per cent. In other words, Canadians do not owe as much as Americans in terms of our total outstanding central government debt in relation to gross national product, which is the product of all our goods and services produced in any one year.
This is a far cry from the hon. member's insinuation. Indeed, it is more than an insinuation; it is in fact a direct comment broadcast on our national news service to all Canadians as they got up for breakfast this morning, and emanated from the speech made by the financial critic and senior financial spokesman of the opposition party in this House yesterday, in probably his first major speech this session on a financial bill. I am sure we will be hearing from that hon. member and perhaps other financial experts who may be on the scene on the other side at different times during this year. I would only ask them, if they do expect to go to the Canadian people when we have a general election-and I assume they will be out there plodding the streets-to campaign in an honest and straightforward way by giving the people the facts of the situation, rather than trying to play a sort of shell game, showing people statistics that simply do not bear up under close examination. I indicated yesterday that in my view, at the next general election, perhaps within the next six months, the Canadian public simply will not buy that kind of attitude from a party that has held itself out as a legitimate alternative to the government now in power.


An hon. Member:: Check the polls.


Alan Gray Martin: These statements will be much more closely examined, and I am sure over the course of the winter and the spring the polls will reflect this view. The people will be looking more closely at statements made by senior spokesmen for the Conservative opposition on financial matters. I hope members on this side of the House and all Canadians will examine these figures carefully rather than accept them at first hand as being factual.


An hon. Member:: They sure as blazes will look at yours.


Alan Gray Martin: That is fair enough. The hon. member for Hastings (Mr. Ellis) says they are not going to accept our figures. Perhaps not, but the sources of our figures are very clear and are supportable. It seems to me that Canadians should look at all facts and figures put before them. I hope they will and that they will ask questions. I hope when proposals are being made, such as those propounded by the official opposition during the recent by-election campaign, the
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public will ask questions and get more concrete answers than those given by the Leader of the Opposition the other week on television. I hope that, indeed, there will be some clarification of those answers which will indicate clearly to the people that when a very large tax deduction is put forward as a major incentive to persuade people to support a party, that hand-out is going to cost the government a lot of money.
I hope these clarifications will be similar to these put forward by the provincial treasurer of the Conservative party of Ontario. Every time you reduce the tax revenue coming into Ottawa you do indeed reduce substantially payments transferred to the provinces. The provincial treasurer in Ontario was sensible enough to realize this point and made a very quick rebuttal when the Leader of the Opposition first announced his particular policy.


Sinclair McKnight Stevens: What did he say?


Henry Perrin Beatty: Did he say whether he supported the policy or not?


Alan Gray Martin: The other point I would like to make during my second intervention in this debate, since we have an amendment put forward by the hon. member for York-Simcoe, is in regard to the reference made earlier by the right hon. member for Prince Albert who indicated that perhaps our banking policies, our government policies and general fiscal policies were resulting in the printing of far too many dollars at a rather outrageous rate.
Our government recently floated a major U.S. bond issue in the amount of $750 million, one of the larger issues of all time and which has had absolutely no problem finding its way into the market. This is always a good indicator of how strong the economy really is; it is usually easier to borrow money if you are in sound and stable shape financially.


Sinclair McKnight Stevens: And pay a high interest rate.


Alan Gray Martin: Indeed, this particular issue has run into no problem at all. The prospectus that went with this issue contains a rather significant comment which was made by the syndicate that was responsible for selling the issue. 1 assume that it was inserted in there because it is factual and also because they felt that it would be a plus to show prospective investors who would be buying pieces of the bond issue. It refers to the fact that in recent years Canadian monetary policy has primarily been directed toward achieving a gradual and continuing decline in the trend rate of growth of the money supply, defined as the public holdings of currency and the chartered bank's demand deposits, otherwise known as the Ml figure, a definition which includes only forms of money used as a means of payment. The aim was mentioned in this same extract, which was to guide monetary expansion along the path conducive to the gradual return of the Canadian economy to satisfactory levels of activity without inflation.
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Sinclair McKnight Stevens: Mr. Speaker, no member of this House can tolerate this type of misrepresentation. The hon. parliamentary secretary knows perfectly well that the prospectus he is referring to is the government's prospectus, not the syndicate's prospectus. It is the government's representation to those who would be buying the issue as to what is the state of affairs in Canada. I think the parliamentary secretary ought to clarify that.


Mr. Deputy Speaker:: Order, please. There are remarks that the hon. member should make by participating in the debate afterwards.


Sinclair McKnight Stevens: I cannot participate.


Mr. Blais:: Sure you can.


Alan Gray Martin: I had assumed that they were comments that were put together, presumably, to aid prospective buyers to understand something about the issue and the organization from which they will be buying the bonds. I assume that it was put in because it is positive news and it is factual. The point I am trying to make is that it seems to go a long way from arguments advanced by the right hon. gentleman from Prince Albert, that, indeed Canadians appear to be running along some reckless road where new money was constantly being printed, a kind of insinuation which I think, in fairness to the hon. member for York-Simcoe, is dropped into various media channels where it might do some good by the official finance critic for the opposition and his colleagues. So, I think that the point is well made.
I really do not want to take up any more time of the House at this time.


An hon. Member:: Sit down.


Alan Gray Martin: However, it is important for members on this side continually to do their utmost to bring before the Canadian public, wherever justified and supported by facts, objections to the kind of insinuations and loose comments that are self-serving for members of the opposition and, indeed, make news because they help feed the kind of headlines that sell papers. All this information is thrown into a big hopper and comes out the other end to the ordinary Canadian who is led to believe that things are not right on the government side and he should perhaps try the fellows on the other side, the same point I made yesterday.
I would only hope that as we move closer toward the period of a general election and the time when the mettle of members on both sides of the House will be more properly tested, which was not the case in the 15 by-elections, last Monday when people knew full well that the winners would have no chance of affecting the over-all direction of the country. I do hope members of the opposition will do their utmost to be responsible as they present points of view and facts that they may put before the voting public, so that the public may make a fair assessment of the situation and not be misguided by the presentation of inaccurate figures and loose comments.

October 20, 1978
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Mr. Maurice A. Dionne (Northumberland-Miramichi):: Mr. Speaker-


Walter David Baker: Filibuster, filibuster.


Maurice Adrian Dionne: It seems to me, listening to the jeers coming from the other side of the House, that hon. members opposite are very unhappy when facts are being put on the record. We, of course, are expected to sit here and listen to the diatribe which they hurl across the floor.


Walter David Baker: Mr. Speaker, just before the member on the other side launches into a speech that will stop the vote on our amendment this afternoon, may I raise a point of order? It is with regard to your colleague in the chair and the ruling that he made. I would like to reserve, if at all possible, the opportunity at some time-and I will speak to the Chair, my colleagues and other House leaders with respect to the appropriate time-to discuss the question of the appropriateness of a ruling such as the one that was made, so that we may settle once and for all what the appropriate language is for the official record of the House of Commons, as well as other questions which allowed the member who has just taken his seat to repeat a speech he made yesterday for the purpose of stringing out this debate, rather than coming to the point and having a vote on the amendment to the motion.


Yvon Pinard: Mr. Speaker, I find the intervention of my colleague very strange. We do not have the right to appeal a decision of the Speaker. The decision is very clear, very simple. We know that an hon. member may not speak twice to a question, under Standing Order 37(1). Now, the Speaker put the motion for amendment only at six o'clock last night, after which the hon. member spoke.
The matter was settled. The ruling was given and the comments of the hon. member cast doubts on the wise and learned ruling given by the hon. member who preceded you in the chair, Mr. Speaker.
Under the circumstances, I deplore the fact that an attempt is being made to discredit a decision of the Chair, decision that was very soundly based as far as facts and our standing orders are concerned.


Mr. Deputy Speaker:: Order, please. 1 do not wish to get involved in a decision that has already been taken by the Chair. The hon. member gave me the impression that he wanted to raise a general question, and it is his privilege to do that. I am not prepared to pass judgment on a decision that I think should not be questioned, but if there is a general matter as to the proceedings of the House, he can do that at any time, either when Mr. Speaker is in the chair, myself or somebody else. I am sure it has no reflection at all on the previous decision, and surely it did not prevent the hon. parliamentary secretary from addressing the House.


Maurice Adrian Dionne: Mr. Speaker, the crybabies on the other side seem to want to have a field day with the ruling made by the Chair. They do not seem to want to give to members on this side the right to speak in debate. I find that somewhat difficult to accept from those who are constantly holding themselves up to be the defenders of the rights of parliament. It is an absolute sham.


An hon. Member:: Shame.


Maurice Adrian Dionne: In introducing Bill C-7 the minister set forth very clearly the purposes of the bill. From listening to the debate one would think there was something insidious about this bill. In fact there is not. It is a very routine bill. It is the type of bill put before the House of Commons quite frequently which quite often passes without a great deal of difficulty or long debate.
At this particular time the official opposition sees some advantage in making a political football out of this bill. We have listened to all kinds of red herrings in this debate. No one in this House can do that more capably than the right hon. member for Prince Albert (Mr. Diefenbaker). In listening to him today he took us all the way from the time of his great-grandparents to the present. He brought in the old red herring which the Tories are using more and more nowadays and which some of their candidates used in the by-elections. As well, some Tory premiers and Tory hopefuls are using this same red herring in provincial elections. It is the so-called issued of the removal of the powers from the Queen. If they do not know it, that is an absolute fabrication and they should stop using it because it is damaging not only to the Queen but to the country.
It has been clearly stated in the government bill introduced for the purposes of discussion and creating interest in the issue of constitutional reform that the government does not intend now, did not intend in the past nor does intend in the future, to remove or lessen the powers of the Queen.
Ever since 1215 the power of the British monarchy has steadily and progressively diminished, until today we have a parliamentary democracy in which there is very little power given to the monarchy. However, there are some potent prerogatives which our present Queen is free to exercise and which have not been removed or diminished by this government, nor will they be. As a result I find it offensive that the official opposition tries to mislead the public by bringing in that kind of argument in discussing bills which are totally unrelated to the situation. I am not trying to claim that the government should not be subject to criticism from the opposition; obviously that is the role of the opposition. But it would be refreshing if at least once in a while there was some constructive criticism coming from the other side, particularly the official opposition.
On the other hand, I must compliment the hon. member for New Westminster (Mr. Leggatt). The speech he made this afternoon was constructive. It was not designed to destroy but
October 20, 1978

to criticize in a constructive way. I say that whether or not members agree with what the hon. member said, but his remarks were made in a positive manner.
I am also concerned with the charges and counter-charges made in this House and the effect they will have on our nation in the days and years ahead. We are living in a time when there are those who doubt very seriously the future of our country as a unified nation consisting of two founding races and many other ethnic groups. I wonder what purpose is being served in continually trying to downgrade our country by saying that everything is bad. If one listens to the official opposition everything is worse than it has ever been, and that it is worse in Canada than it is in almost any other country. Everything is put in the negative superlative in order to try to score some political points. In my opinion that will not serve the interests of our nation.
We have heard a lot of figures which have been bandied about across the floor in the last few days on the relative standing of Canada vis-a-vis other nations of the world. Peculiar uses have been made of these figures in trying to show that Canada is just on the verge of bankruptcy. As well these figures have been used to try to show that the citizens of Canada are suffering irreparable economic harm, and that that economic harm is increasing day by day. I submit to you, Mr. Speaker, that that is not true.
I ask the opposition, how many of them would prefer to live in one of the countries that they are holding up as examples to us? How many of them would prefer to live in one of those countries rather than in Canada? How many of them would prefer to buy their groceries in West Germany rather than in Canada? How many of them would prefer to buy their petroleum in Great Britain rather than in Canada? How many of them would prefer to buy their clothing in any of the countries making up the European Common Market? In other words, how many of them would like to take the income of people in any of the other industrialized nations of the world and have to support themselves in those nations? How many of them would honestly say they would prefer that and that they would be better off than they are living in Canada? I do not hear any answers.
The bill before the House requests authority to borrow. As I said, it is not an unusual bill. It specifically requests authority to borrow $7 billion for the fiscal year ending March 31, 1979, and borrowing authority to a total of $10 billion for the fiscal year 1979-1980. That, of course, does not mean all of that money will necessarily be borrowed, but it means the authority has been given by parliament to the government to borrow those sums if it becomes necessary.
We have already been told that the cash requirements for
1977-	1978 were $8.3 billion and the cash requirements for
1978-	79 will be $11.8 billion. That is a total of $20.1 billion for two years plus U.S. exchange loans of $750 million and other borrowings of 1.5 million Deutschmarks. It is conceivable that other lines of credit will have to be arranged or other borrowings made in order to ensure that the position of the
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Canadian dollar vis-a-vis the U.S. dollar is one which is in the best interest of Canada and her trading partners.
This is not an unusual bill. I am therefore surprised that the opposition is trying to make a political football of it. I simply want to put on record today my view that, despite the political atmosphere in the country at the moment, it behooves us all to speak with care and attention when dealing with the economy of our nation. I do not think it serves the purpose of our government, the opposition nor our nation to continue to try and score political points at the expense of our nation's economy.


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, first of all I welcome this opportunity to address the House because it is not often I can speak on the economy, although I am neatly interested in such matters because they have a fundamental bearing on our country's existence. I was given responsibilities in other areas although I feel those are of primary importance and I give them much of my time. Because of my departmental responsibilities, I also have an opportunity to take part in discussions dealing with economic matters. This no doubt is the reason for my being accused of showing a constant smile, because 1 have the opportunity to discuss these matters with our highly competent people managing the Canadian economy and as far as I am concerned things look very encouraging. It has just been suggested that in the international context Canada is comparing very advantageously with all our competitors. Of course we would like, as members of government, to emphasize that this country's outstanding economic performance is due to the government's genius only and exclusively. For my part I would not go that far because I have no reluctance in recognizing that of all countries Canada is no doubt the most privileged and the most fortunate.
I had an opportunity during the by-elections we have just gone through to travel across the country. In addition, as former postmaster general and now minister responsible for penitentiaries, the institutions for which I have been and I am now responsible are dispersed throughout the country so that I have the pleasure of travelling throughout the land and this gives me a chance to review the economy and all factors which favour Canadians. I enjoy this very much because we politicians, both in the opposition and on the government side, can witness our advantages throughout the country. In the Vancouver area-and I see now one of Vancouver's famous members of parliament-


An hon. Member:: They are all famous.


Jean-Jacques Blais: -of course, they are all famous-as well as in the York-Simcoe constituency, in the Toronto area, in my own northern Ontario area, it is becoming evident that economically Canada is faring very well. 1 would not wish to be too

October 20, 1978
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parochial but I had an opportunity two weeks ago to be in my own area, the constituency of Nipissing, in North Bay where I had the privilege of signing a federal-provincial agreement- [English]
-with the Ontario representative, the minister of northern affairs, Mr. Leo Bernier. I felt a great deal of pleasure in signing that agreement. It was a joint federal-provincial contribution of more than $10 million under the regional development program. It was an infrastructure grant which had a great deal of significance for my area, and my area is typical of the rest of Canada.
In effect, it was a recognition of the economic growth experienced in my area of Nipissing and an investment of faith in the future of that part of the country. It was a justified investment because, in my view, Canada has a great future.
That infrastructure grant was made to develop new industrial land. The industrial land previously made available had been completely used up. As a result of a high demand for industrial development, we needed additional land. I felt there was a signal to be transmitted there. It was an excellent one.


Walter David Baker: On a point of order, Mr. Speaker, it may have slipped the minister's mind, but we are dealing with an amendment to Bill C-7. I wonder if he might do his best to stay on the subject so that we can proceed as quickly as possible. He may have thought we were on the throne speech debate, but if he checks with his House leader he will find that is not the case.


Otto Emil Lang: Mr. Speaker, I rise on the same point of order. I am delighted to see the hon. member for Grenville-Carleton (Mr. Baker) at last considering that relevance has anything to do with debate in this House. It has not been his practice in his own speeches or those he has seen members of his party give.
Earlier in the debate the right hon. member for Prince-Albert (Mr. Diefenbaker) was rather embarrassed when speaking about the Post Office situation and the Great Lakes strike. He, as an aside, practically laughed about the matter, saying he could of course connect it with the amendment before the House. If we are moving toward a reinstitution of the idea of relevance in this House, members of this government will welcome it very much, provided the standard is observed by the opposition.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: I can only ask hon. members to stay on the subject matter. I cannot answer as to what has been said or will be said tomorrow. I can only say that I am in the chair right now. I hope hon. members do not think that one sin can be an excuse for another sin, and that the minister and others who speak in this debate will speak to the subject matter.


Sinclair McKnight Stevens: Mr. Speaker, I rise on a point of order. I listened to the minister most closely. As a minister of the Crown, and bearing in mind the Minister of Finance (Mr. Chretien) is not with us this afternoon, I believe hon. members

would appreciate it if he would tell us exactly why the government needs the $7 billion it is taking for in borrowing authority this year and another $10 billion next year. I would be most interested in hearing this minister of the Crown explain why the government needs this authority.


Jean-Jacques Blais: It will be my pleasure. I was trying to find an article in the Globe and Mail; I am sure one of my hon. friends will find it for me while I continue to enlighten hon. members. Contrary to what has just been said, articles which have recently been published do recognize the immense future which is before Canada both in trade and in other areas.
As for the hon. member's direct question, I ask him to wait until we get into committee when he can put it to the Minister of Finance (Mr. Chretien). I know he has had a great deal of practice because I have often sat here and heard him in committee of the whole asking the same question ad nauseam, and I would not deprive him of the pleasure of doing so again.
Speaking of the golden future of northern Ontario, may I say I had the occasion recently to visit the northern region of my province, in particular the town of Timmins. I dally there from time to time and take a great deal of pleasure in visiting. In Timmins there is a great deal of activity by Texas Gulf, a company which is one of the concerns of the Canada Development Corporation. Among the most welcome initiatives shown by this government was the creation of a corporation which seeks to concentrate capital within Canada for the benefit of the nation. This is something we tend to forget amid the doom and gloom and naysaying that we hear from members of the opposition. I was interested to see the development of a massive copper refining industry in Timmins. I cannot but wonder at the wisdom of the policies followed by this government in the past in encouraging the development of what we in Canada find to be most advantageous, especially where our mineral resources are concerned.
The hon. gentleman spoke of the borrowing of funds. There is no doubt that in any economic activity the act of borrowing is inevitable. I have yet to see an individual or a corporation engaged in a business of any size in circumstances where a strong line of credit is not maintained with an appropriate financial institution.
I had occasion also to visit the county of Lotbiniere.

This riding, Mr. Speaker, is steeped in tradition and is still represented by the Social Credit party-which deserves our congratulations-it is a riding where we can see the changes now occurring in Canada as a result of government initiatives.
In fact, I had the opportunity to talk with businessmen in that community who made investments in the post-war period to modernize our manufacturing industry. Hon. members will recall indeed that textiles and furniture were the basic industries in this area, and it has been recognized that employment in recent years has declined in textiles as well as in footwear and furniture industries. In fact, what happens is that those
October 20, 1978

companies are experiencing lower employment potential as a result of international competition, but Canadians, with the help of the federal government and the minister concerned, have nevertheless been able to undertake industrial initiatives and are also able to compensate for the employment loss experienced recently in those areas.
As you know, when we mention the furniture industry, we must recognize that it takes wood to make furniture. Since the supply of hardwood is not inexhaustible it disappeared in the Victoriaville area so that now we have to import it. As a result, those people are already using iron and other materials to increase industrial activity and job creation. It is extremely encouraging, particularly if you consider that those initiatives are undertaken by Canadians who are not afraid to take some risks to develop the economy of our country. And this situation does not prevail only in that area, Mr. Speaker, but in all parts of the country. And when you go to Alberta, which is, everybody is ready to admit it, the richest province in Canada- [English]
The impetus which has been given to development in that region results in large measure from the creative juxtaposition of federal and provincial powers. Soon after I came to this House I had the good fortune to be involved in the energy field with a minister who perhaps marked the area of national resources to a greater extent than any minister in the fifty years prior to his assuming office. His policies are presently being put into effect by my colleague, the Minister of Energy, Mines and Resources (Mr. Gillespie). We often neglect, as men leave public office, to offer them the recognition which is their due.
I recall debates on the subject of oil in this House when members of the opposition were advocating the wholesale transfer of this resource to American consumers. Those were days when, even in face of evidence that there was likely to be a shortage of hydrocarbons in the near future, members of the opposition were advocating an increase in the export of our non-renewable resources.


An hon. Member:: That was Joe Green.


Jean-Jacques Blais: It was that kind of shortsighted policy that the government resisted.


An hon. Member:: What does all of this have to do with borrowing?


Jean-Jacques Blais: It has to do with borrowing because it affects the economic status of this country. What I am saying is that the stability we have known here, notwithstanding detrimental conditions generally, is the result of wise and farseeing policies dictated by the government. Take the investment of $300 million by the Canadian people in the tar sands development at a time when there was resistance on the other side of the House to that investment. While the legislation establishing Petro-Can was before the House, members of the opposition in their shortsightedness and narrowmindedness resisted the setting up of that corporation.
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Yes, Mr. Speaker, we have a story to tell the electorate about the official opposition. The Canadian people are no longer ready to listen to diatribes-


Some hon. Members:: Oh!


Jean-Jacques Blais: -or pejorative readings of all possible indicators. I have been reading the press and I have not been very pleased at some of the interpretations placed on economic matters and other subjects that are close to my heart. But when I looked at the Toronto Star of October 18, at page B-12, I saw there an article by a writer named Jack McArthur who has given a fair shake in terms of telling what the truth is. I hope hon. members present will give me the opportunity to read this. Under the heading "Big differences" Jack McArthur says this:
How much chance is there that Canada can perform differently-and better-than the U.S.? Well, there have been big differences during the 70s.
For example, Canada grew more than twice as rapidly in 1971 and considerably more in '73. It added to its production at rates varying from 1.3 per cent to 3.6 in the years 1970, '74 and '75 while American output was dropping by from 0.3 per cent to 1.4 per cent annually. The Americans outgained us considerably only in 1977.
That's history. But there are differences today in the two economies. Canada's energy development boom is comparatively louder. Its capital spending already seems to be picking up.
Those quotations come under the general heading "Canada may once again outrun the U.S.".
I did not say that, Mr. Speaker. This man is not a member of my party. Members of the opposition attempt to paint people who are positively inclined toward our country as being part of the Liberal party line. They think that to be positive about this country is to be guilty of some partisan prejudice. What utter rubbish and impossible nonsense!
I see the report on the first page of the Globe and Mail business section this week that a group of Canadian businessmen went to China to initiate and develop potential markets within a country which possesses one quarter of the world's population. That is not by accident. It is because this government has recognized the need for investing in the export market. It has created instruments in order to do that. It has created the Export Development Corporation. I remember well that in the last session members of the opposition kept negatively harping at and attacking the government for seeking to increase the ceiling of loans by the EDC. They filibustered that bill ad nauseam. They did not even want to recognize that without that bill Canada could not survive as a trading nation because we were competing with people who were extremely competitive.


Mr. Dick:: Now you want to borrow $17 billion.


Jean-Jacques Blais: The hon. member for Lanark-Renfrew-Carleton (Mr. Dick) is only about 40 miles away from his home; he might make it in time for dinner if he left just about now.


Mr. Baldwin:: He will miss it if he stays here.

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Jean-Jacques Blais: The hon. member for Peace River (Mr. Baldwin) says the hon. member for Lanark-Renfrew-Carleton has other plans for his dinner. I am sure that if he does he will stay away from the hon. member for Peace River. The blue jacket of the hon. member for Peace River is very becoming, and 1 would not want to see it spotted.


Walter David Baker: Stop filibustering the bill.


An hon. Member:: You haven't talked about it yet.


Jean-Jacques Blais: I am selling the positive record of this government. I am not filibustering the bill; I am participating in the debate in order to point out to hon. members opposite, who are anchored to their chairs-and I am pleased to have an audience-the truth, in both official languages.

What happens, Mr. Speaker, in cases such as what was reported this week is that action is being taken to sell our products to distant countries. In order to do that we must have the necessary funds to encourage companies which may be new in Canada and not in a position to take the risk. Of course it means that the Canadian government must offer guarantees and insurance so that these companies can recognize that when they do sell abroad they will be paid, independently of the buyer's ability to honour his obligations. But to offer these guarantees we must borrow, because this money will not come before the sales are completed, the products reach destination and the money returns to the country. It is recognized, in the international sector, that we Canadians must help and finance those firms abroad.

There was another story in the Globe and Mail on Wednesday which spoke about the sale of two Candu reactors. Undoubtedly there will be some government financing to allow the export of these reactors because it is recognized that the money necessary will not be generated until such time as the goods are in place after export to Rumania. Notwithstanding the fact that we have the best technology in the world in terms of nuclear generation, I remember quite well the opposition's naysaying and dooming and glooming in that context as well, never recognizing the excellence of Canadian technology.
The principles advocated by the official opposition find something sinister about having a Crown corporation such as AECL in Canada. AECL is developing new technology. The official opposition tries to make us believe that the private sector could have developed the Candu technology which is now one of the prime international technologies and which will be providing us with immense foreign exchange.
When we look at the philosophy of the official opposition, we wonder how far it can go. Hon. members opposite try to maintain with some modicum of consistency that a Crown corporation or something which is tainted by the government can really not function properly. That was their attitude in dealing with Petro-Canada. When we were dealing with a bill to set up Petro-Canada, there was filibustering the likes of

which we have never seen. Hon. members opposite tried to prevent the creation of Petro-Canada because they could not imagine that a corporation like Petro-Canada could do anything positive for Canada. Quite the contrary, we have seen that that is not the case because there is a recognition, even by the most conservative in the small "c" sense, or small "r" reactionary sense, that Crown corporations are an essential ingredient of Canada's make-up. There is a recognition as well that Petro-Canada is doing much in the development of Canadian energy resources.
There were questions raised regarding the financing and the capital structure of Petro-Canada, because there has to be a great deal of investment in energy resources if we are going to ensure supplies for a long period of time. In order to finance that kind of investment we have to borrow, which is perhaps one of the reasons why on a regular basis we present borrowing bills to this House. In case hon. members opposite get sensitive about what Petro-Canada has to do with this borrowing bill, I simply point out that in order to invest moneys we have to borrow from time to time so that we can secure a return on our investment at some future time.
There is no question but that Petro-Canada is our window into the petro-chemical industry. The United States is the only major oil producer in the world which does not have a national petroleum corporation. Mexico has one, Indonesia has one, Nigeria has one, the OPEC countries have one and Venezuela has one. There is a recognition that what is contained under the ground in Saskatchewan really belongs to the people. It does not belong to the fellow who is lucky enough to find it. He should, of course, get a fair return, there is no question about that; but the wealth that is under the ground should belong to the people collectively.
In fact, we were in a very difficult situation at the time Petro-Canada was formed because there was a danger that the multinational corporations, in the interest of satisfying their own shareholders, would make decisions which would be detre-mental to the national interest and, having made those decisions, would have sufficient capital to give effect to them, thus taking away the birthright that is owing to Canadians. I objected to that very strenuously, of course, and, notwithstanding the opposition's filibuster and their negative attitude, we passed the Petro-Canada legislation, and we are very pleased to have passed it.
The reason I refer to this subject at this stage is to indicate that, with the export of the Candu reactor and our policy with regard to that, with Petro-Canada, with investment in the tar sands, we owe a great deal to the former minister of energy, mines and resources, Mr. Macdonald, who is now back in the private sector. I simply want to draw to the attention of hon. members on the other side that those were sound policies that even they, having rejected them at first, are now recognizing as being wise.
I do not have that much more to say, and I am sure hon. members opposite will be pleased to see me sit down soon, but
October 20, 1978

some allegations have been made relating to the borrowings in which we have engaged in terms of foreign reserves-


Gerald William Baldwin: Mr. Speaker, I rise on a point of order. I was most dreadfully sorry to hear the minister indicate he will sit down shortly. We have heard a masterful demonstration of how to filibuster your own legislation, during which the minister has taken us over the newspapers, which I know he is watching very carefully for criticism of the royal commission. He has touched very briefly on the bill once or twice to show he has a vague knowledge of what the debate should be about. I am sure all hon. members are prepared to allow him an additional 20 minutes if he would like to continue.


Some hon. Members:: Hear, hear!


Jean-Jacques Blais: Mr. Speaker, I have not departed for one minute from economic considerations. I am sure that every point I raised was connected with the question of government borrowings and the fact that, in order for the government to function properly, it has to invest funds in the economy. I indicated the wisdom of our past decisions, although opposition members have tried to embarrass me through technical means; but, as you well know, Mr. Speaker, I do not embarrass easily. I remember last session rising to speak on points such as the one which the hon. member for Peace River has raised and being told, as you will undoubtedly tell him, Mr. Speaker, that it is customary in the House, in order not to restrict free speech, to permit a relatively wide range of discussion, in particular on financial matters.
I wish to indicate that some question was raised at one time when I was not here as to the cost of borrowing the amounts which the Minister of Finance has seen fit to borrow in order to permit stabilization in the trading of the Canadian dollar. I think there was a question on the recent $750 million borrowing. I am advised-and this is for the enlightenment of the House-that indeed no cost is involved because, as you may understand, Mr. Speaker, you borrow on the international market not in order to spend, when you are dealing with currency exchanges, but so as to put in order the trading of your own currency. The amount, once it is borrowed, is not left in the bank but is reinvested in the country. In fact, it is now securing an interest on the return which will surpass the costs of the borrowing. So indeed those amounts are being borrowed in order to permit Canada to deal more easily with its own currency at no cost to the public purse.


An hon. Member:: It only costs the taxpayer, that is all.


Jean-Jacques Blais: There is a gentleman over there who is speaking from his behind-


Stanley Howard Knowles: Order!


Jean-Jacques Blais: In any event, Mr. Speaker, those are all the remarks I have to make. I want to conclude by again commending the hon. member for New Westminster on his remarks. He really touched on a very pertinent question, namely, the fact that in the House there must be an ongoing
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exchange of information among all parties, and when information is advanced, although we can never guarantee the accuracy of everything we advance, there is a responsibility to be accurate, especially when we are dealing, not with whether tomorrow taxi fares will go up in the Gaspe, but with questions that are of national import and that are seen and interpreted on a regular basis by the press and by the electronic media which transmit everything that happens in the House directly to the livingrooms of the nation. There is a responsibility to cite accurate figures and to make responsible points in their context, and so I fully support what the hon. member for New Westminster advanced.


Some hon. Members:: Question.


Otto Emil Lang: Mr. Speaker-


An hon. Member:: You are filibustering your own bill.


Otto Emil Lang: -we have before us a bill to extend the power of the government to borrow and an amendment from the financial critic of the official opposition to strike out that increase in authority on the rather treacherous grounds that he does not yet have sufficient information about the need for this authority.
It might be difficult for people in the country to understand the nature of this debate. It is not a debate about a specific borrowing taking place. It is not a debate about the ability of the government to borrow money as required in a practical and economic sense. It is a debate about the actual authority and the limit on it which is maintained over the years in order that a parliamentary procedure may take place before additional authority is given. Obviously the authority required for a government in any circumstances is enough to deal with the issues it faces in borrowing and also enough to provide for contingencies so that it may be in a position to take reasonable steps to deal with financial emergencies and foreign exchange activities which might arise. It is, therefore, the amount of authority required to meet governing problems.
What is extraordinary here is that presumably the official opposition, in putting forward their amendment, would vote to curtail this authority of the government, although they themselves know that such authority is required in today's circumstances. It is required in part to deal with budget deficits and in part to deal with matters in the world of exchange where both the U.S. and the Canadian dollar are seriously under attack. I say the Canadian and U.S. dollar because, of course, many people believe that the Canadian dollar is affected by what happens to the U.S. dollar, regardless of what we might do inside our country. This bill could have supplied the specific total amount now for this year to deal with contingencies a year and a half or so ahead. Instead it does it in two stages so as to specify that, in the current fiscal year, no more than $7 billion of that authority will be sought to be used, and therefore it is not requested.

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The further amount to deal with contingencies into the future, of course, is a sensible and necessary precaution. The Minister of Finance (Mr. Chretien) indicated that it is a matter of contingency, largely because of his view of cash balances. The point is that the exact question of government action regarding spending under a budget will come before the House in another form. From time to time in the future, as in the past, the House will have an opportunity to debate specific issues as to how the government is spending, what kind of taxation it is imposing, and what kind of deficits result from that.
The extraordinary thing is that the official opposition criticized the bill, and indeed by its amendment presumed to vote against it. In anything they have said, surely their position has been that the deficits should be higher rather than lower today.


Some hon. Members:: Hear, hear!


Otto Emil Lang: This afternoon we heard an excellent speech by the hon. member for New Westminster (Mr. Leggatt), a member of the New Democratic Party. I regret to hear that he is not planning to seek re-election. His speech was excellent in almost every regard, but I have to reserve my position on his comment that he was not sure if his party would vote against the authority being sought in the bill because of the extent of the borrowing request for next year. He said that on the ground that sooner or later there should be some balanced budgets. I agree with him on that, but surely he would agree that the "sooner or later" will not happen next year in this country. Given all we can project regarding present economic conditions, the situation next year certainly will require a significant deficit again.
For several years now the government has been engaged in a cost cutting exercise, an exercise of retraint in its spending, in limiting growth in the public service, and in cutting back the number of man-years employed. It is not a new venture on our part. When we engaged in it, we knew as we began that it was not an easy exercise. It was an exercise of finding out in various parts of big government operation where things can be done more efficiently, more effectively, and then examine them again as to their efficiency and effectiveness.
It is an ongoing job which in one sense should always continue. In the last three years we have undertaken it with zeal. That is why our situation is so different from that which faced the right hon. member for Prince Albert (Mr. Diefen-baker) when he was prime minister. He entered the debate today, perhaps stung by the memory of the fact that once before in the country when the dollar was falling he was prime minister and found it impossible to escape the blame and criticism for the economic conditions which brought that about.
The difference is that in the late 1950s and early 1960s, the government of the day was in circumstances where the hon. member for New Westminster, had he been in the House then,

would have called for economic responsibility and a sign of a government in control of a situation. Instead he would have found the Diefenbaker government spending irresponsibly and exercising no restraint whatever. In those days when the dollar suffered because of lack of confidence in the economy as a result of government action, naturally blame was attached immediately to the government of the day.
It should be noted to some extent the government will fall heir to the spirit of criticism which existed in those days. However, the situation is very signficantly different. Even with the restraint we have been exercising for three years in regard to government spending, and the responsibility we have been showing, time after time the opposition thought we were in a pre-election period and expected us to go to the limit in terms of spending and minimizing taxation. Instead, we produced three budgets which were criticized by the official opposition for not having enough spending and too much taxing. The official opposition, budget after budget, has asserted that our deficits should be larger than they have been. That is a sign of the responsibility of the government.
Our dollar is under attack, as is the American dollar, in a world where certain things fundamentally have changed, oil prices being one of them. Canada has its own special factors which cause a problem for the dollar. In terms of investor confidence, as misplaced as it may be to argue that a separatist government has created threat to the country and its unity, that is without a doubt one factor. It is not a factor investors should take into account, but it is one which is often subtle when looked at by would-be investors, and leads to judgments as to where investments should take place. It is apparent a good amount of Canadian money is going abroad to be invested, rather than simply a lack of foreign money coming here. That is where it becomes important to re-emphasize at every turn the reasons why Canada and Canadians ought to have absolute, firm confidence in the future of the country and its economic development.
Of course, the opposition must, as part of its natural objectives create as much doom and gloom about the future as possible. As a government, we must challenge that and emphasize why Canadians should have confidence in their future and in the actions of the government in relation to the constitution, language, and questions which otherwise might feed separatism.
The government has been successful to such a degree that that threat should not be considered real or realistic in the minds of investors, subject to the continuation of the type of leadership displayed by the government. The fact of the matter is that the Canadian economy is buoyant and strong. More jobs are being created in Canada each year than in any other area of the world, relative to the nature of the economy and the size of the country. Year after year we have seen jobs created in numbers which outpace the proportionate increase in population. If in a 12-month period the number of new jobs is 375,000 higher,iris well out of proportion to the increase in population during that period. If in a ten-year period the increase in jobs is two million, when a population increase of
October 20, 1978

three million has occurred, then clearly more Canadians in proportion to the population are working at paying jobs and more Canadians are supporting the economy with these jobs than ever before.
We should not let ourselves be misled by the existence at the same time of even a larger number of people seeking work. As a government we are not misled. We know the economy is strong, but we are not misled by the fact that additional efforts must be put to the task of assuring that work is found for those who want it. Even though we expressed satisfaction with the increase in the number of jobs, we are not satisfied about the amount of unemployment and the challenge for additional jobs. We continue to turn our attention to that in economic measures, job-creation measures, industrial incentives measures, and throughout our government of this country.
Behind the unemployment figures we realize, if the official opposition does not, there is a chronic situation, as well as the current one of a lot of people wanting jobs. The chronic problem is that of a very large number of people seeking jobs without jobs to be found for them in the eastern part of the country, from Montreal to the east, throughout a good part of Quebec and the whole of the Atlantic region.
It is for that reason that this government has made effort after effort to try to strengthen and expand the efforts of the Department of Regional Economic Expansion, and has tailored its unemployment programs, its employment-creating programs and its Canada Works program toward assisting the eastern region of the country. I hope hon. members opposite support that effort to help these areas of the country where the problem is chronic.
Instead of supporting it, however, may I remind you again, Mr. Speaker, that hon. members in the Conservative party far too often attack these programs by relating them to assistance for Quebec in that very insidious way they have of ignoring the fact that, because the problem is even more serious in the Atlantic region, even more attention by us has been placed upon the Atlantic region in job-creation and regional development. That we will continue to do and we will continue to look for solutions. We do not say we have found all the answers. We believe, however, that we are facing up to the problem and recognizing it for what it is.
The economy of this country has faced for some years the challenge of inflation, and indeed, if there is one thing more than any other which can be identified as putting pressure on the Canadian dollar and forcing it down, it is inflation in this country, fired by demands for wages and other forms of return which are out of line with what can be expected, given the need to share some of the productivity gains, and given the cost to the world of rapid increases in energy prices. Whether it is foreign oil or increased prices for oil which give great returns to Alberta and Saskatchewan, for which I am naturally grateful as a prairie boy, the fact of the matter is that those returns have to be obtained from all Canadians.
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Those who ignored the fact that this was a cost we all had to share and tried, through increases in returns, in wages, profits or salaries, to obtain full recompense for productivity increases and cost of living increases, are the people who tried to move the load of inflation and energy price increases to those who are not protected and cannot protect themselves.
This government, remaining true to its Liberal principles, took steps in these difficult economic times where inflation was a challenge to make sure that those who suffer most from these forms of attack by inflation were helped. That is why we have announced new funds for those who have families and are in a low income position, and it is why we have announced a $20 increase in the guaranteed income supplement for those who are retired and depend upon the old age pension and the income supplement for their livelihood. These are Liberal principles applied at a time when our own policy has been for three years one of stern spending restraint, and at a time when we are facing a budget deficit which we believe is as much as it reasonably ought to be in the economic circumstances of the day.
This is a time when we are facing the need to find those funds and have put into place further spending cuts and the removal of programs, many of which we believe are good in themselves but which simply have to be put in a lower priority category compared to helping the family on low income and the elderly who depend upon the OAS and GIS for their sole support. This also meant we had to cut some programs in order to find funds for the industrial incentive programs we have already put forward and will be putting forward in the House.
We have not decided to go to a larger deficit for these matters because of our challenge in respect of inflation, a challenge we continue to face and are going to have to face by encouraging all Canadians to examine the question of restraint in their own demands upon the economy. Yet we are faced with an opposition which says we should spend more, tax less and have a larger deficit, but should not have the authority to borrow the funds which we would obviously require if the deficit were larger.
That is an irresponsibility from an opposition whose members think they can get away with it because the issue is complex and the people may not understand. I think gradually and over time people have a very shrewd way of judging these irresponsible approaches to economic management, and I think they will so judge the official opposition as well.
The last factor I should like to refer to in this approach by the official opposition is its recent proposal for mortgage deductions from income, which every commentator has seen as being a forgiveness of tax to the rich much more than to the poor. It excludes whole classes of people, including particularly the elderly who own homes free of mortgage. This is a program which will mean a loss of $1.6 billion in revenue for the treasury. It will cost even more when the program works its way through and people take on mortgages to get the benefit of the proposal, as we have seen happen in the United States. The opposition puts this proposal forward without saying what it will do to replace that loss of $1.6 billion in

October 20, 1978
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revenue, or what it will do about the further taxation it will have to impose to balance the budget or to hold the deficit in line with current thinking. That is again an irresponsibility which we will, over the coming months, have to point out clearly to the people of Canada.
Even more than that, I think our real challenge as a government and as a people is not only to continue to grapple with the problem of inflation which is fired by excessive demand, as well as grapple with the problem of chronic unemployment in areas like Quebec and Atlantic Canada, but also to inspire once again confidence among Canadians in the fact that our economy is, indeed, very strong; that in every sector, except those we have had to help because they could not help themselves, real incomes are better than they were before. This is measured in terms of disposable income and savings, and measured in terms which are very visible at airports and railway stations and by those who organize charters abroad. All of this shows that we Canadians are clearly better off than ever before.
The one thing that is lacking is clear confidence in our future. There is no reality in fact for that lack of confidence, and we recognize the challenge to restore it. Because if one thing more than another is needed in addition to restraint on a government that has committed itself, it is restraint on demand for higher wages, salaries and profits. We must find ways of getting Canadians to accept this fact in the absence of a wage and price control program.
One additional thing needed is for Canadians to readdress themselves to the fact that this country is strong and vibrant, that they have been the recipients over time of Liberal policies and programs of many kinds to assist those who are in need and inspire economic growth, without attempting to override the private investment sector in so doing. People in Canada must, as I say, recognize that this country is strong and vibrant and that they should have faith in it. This will restore the flow of investment into this country and will be an important ingredient in dealing with the problems this country faces.


Stanley Howard Knowles: Mr. Speaker, would the minister accept a question before he sits down?


Otto Emil Lang: Yes, I would.


Stanley Howard Knowles: Mr. Speaker, I appreciate the tributes which have been paid this afternoon- and well deserved they have been-to the hon. member for New Westminster (Mr. Leggatt) for the excellent speech he made. Would the minister also not agree that a very constructive speech was made yesterday by the hon. member for Waterloo-Cambridge (Mr. Saltsman); and would he also not agree that all members of his cabinet ought to read the speech made the other day by the hon. member for Windsor West (Mr. Gray)?


Otto Emil Lang: Mr. Speaker, I am delighted to hear those two suggestions and to understand that there were three great

speeches made in the House rather than just the one made today. It is very good news, indeed, and I will personally see whether 1 can find the other two and read them.


Alan Gray Martin: Mr. Speaker, it is not an enviable position to be speaking now, since there have by general agreement in the House been so many excellent speeches preceding me that it may be difficult to match their eloquence and substance. I do want to say that I have appreciated very much the speeches and remarks made in the House this afternoon, principally by speakers on this side, because they have been very clarifying and instructive.


An hon. Member:: Stonewall.


Mr. O'Connell:: I trust that the hon. member believes when he makes a speech he too intends it to be clarifying and instructive as well.


Walter David Baker: Order. Now, don't get carried away.


Martin Patrick O'Connell: It is essential that the people of Canada understand the government's reasons for asking for this borrowing authority. It is not the borrowing itself that is important but the right for the rest of this fiscal year and throughout the next to borrow sums of money that may be required.
There are a couple of essential points that I would like to add to the understanding we have gained this afternoon. The first one is that this borrowing authority does not represent additional spending by the government in the rest of this fiscal year or the next. It would be a false impression to think that this borrowing was for something new, something not already divulged in the government's program.
The government over the past two years has made it very clear that its firm intention and its practice is to reduce government spending, and it is on course in that respect, not least of all in the announcement on August 1. The total requirements of this government are well known, and they do include a significant deficit this year and next year. There are reasons for those deficits. This borrowing authority is to provide a legal foundation for those deficits, and there are economic and fiscal reasons for doing so. We need to have the legal framework in which to do the borrowing to support those deficits.
A second reason for the borrowing is to bring the authority into line with the stand-by credit already negotiated.
A third reason for the borrowing authority, one that will be of interest to Canadians, is to protect the government's current cash reserves in Canadian dollars for the purchase of American dollars when our dollar rises again.
Why would this lead one to borrow? It is because we have acquired Canadian dollars in the process of the falling dollar as it sought the lower levels. Those dollars will be required again to purchase U.S. dollars as our dollar rises. If those dollars were spent in current operations or in investment in Canada's future, as in Central Mortgage and Housing mort-
October 20, 1978

gages or in Petro-Canada development in energy and so forth, we would subsequently have to borrow Canadian dollars to purchase U.S. dollars to replenish the reserves. Reserves go out and come back. Canadian dollars are purchased as they fall in value. American dollars are purchased as our dollar rises. Therefore, we want to save Canadian dollars for that return upward. Those are some of the reasons which make it prudent for the government at this time to seek from parliament the authority to borrow.
Is the Canadian debt of such unusual size that it would cause concern in the country? We do have Canadian government debt and it has risen substantially, like most things. Our incomes have risen, as has the value of Canada's production and our entire economy.
The most sensible way of responding to the question whether our debt is now really very high, and would these additions make it unusually high, is to make some comparisons.


Walter David Baker: You cannot sneeze at $17 billion.


Sinclair McKnight Stevens: You have tripled the debt in five years.


Martin Patrick O'Connell: Naturally, members of the opposition are going to say yes. I have a table which is an international comparison on public debt as reflected in the debt of central governments such as Great Britain, the United States, Germany, Canada, etc. As the hon. parliamentary secretary to the minister said in his excellent speech this afternoon-and I found it an instructive point-we should compare our Canadian government debt with the American government debt, take a look at what has been the trend to see whether we have diverged, whether we are out of line, or whether we think that their debt is excessively high.
The period for the 1960s shows that the Canadian government debt and the U.S. debt reflected the same percentage of their economic production in any one year. For example, about 39 per cent of our annual production would have paid off the debt in that one year, which means we had that kind of relationship to our total economy. It may be that the debt has doubled or tripled in certain periods, depending on the period you want to take, but the economy has doubled and tripled along with the debt.
It is only reasonable to ask, is the weight of the debt today heavier in the economy than it was back in the sixties? The answer is no; Canada's public debt as reflected by the Government of Canada's direct debt is a lesser burden on the Canadian economy in 1977, according to the last figures we have, by roughly 10 percentage points. That is 25 per cent less. I do not have the actual figures worked out, but it could be said that it would take a little over a quarter of our production to pay the total debt off.
Where do we stand with respect to the United States? In 1977 the United States had a central government debt representing 30 per cent of its gross national product for that year,
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and 1 have rounded that figure; the actual figure was 29.9 per cent. The Canadian government's debt was less than the American in relation to its own economy. The figure for Canada was 27.4 per cent. Not only have we stayed generally in line with what is going on in the United States, but we have done a little better.


Some hon. Members:: Hear, hear!


Martin Patrick O'Connell: Why have we done a little better? It is not only that we have struggled to invest in the Canadian economy with government borrowing and investments, but that the Canadian economy has outperformed the American economy over those periods of years so that the debt we have is a lesser proportion of the total economy than it is in the American case.
I will not trouble the House at this late time in the afternoon with more statistics that would reflect the faster growth of the Canadian economy over the American economy, because those points were made today and yesterday quite clearly. I want to stress that one of the sources of growth in both economies, and indeed in all economies, is borrowings. Borrowing when seen from another direction is an investment in the future. Borrowing is not made for frivolous reasons. Money is borrowed to invest in a country's social structure and in its economic structure. Investments are made in education. Investments are made in things like Petro-Canada in order to discover new energy resources, particularly in the frontier regions where the cost of exploration and production will be very high.
We are investing in the rehabilitation of grain gathering railway lines in western Canada. That takes in a large sum of money. Borrowings support such investments. Borrowings such as those we are seeking authority for today help to rehabilitate western Canada's grain lines. That is one reason why the economy of Canada is outperforming other economies. We are making investments in restructuring so that revenues will come back later and less subsidies will be required.
Borrowings also go to rehabilitate the fishing harbours in Atlantic Canada. Why do I mention that? If we have the new 200-mile fishing zone off our shores on both coasts, we will have to provide bigger harbours for bigger boats that go out to catch the fish. We will have to invest in shipbuilding and we will have to provide better breakwaters than the old ones used for smaller boats. It is foolishness not to borrow to invest in that sort of future and have the borrowing paid off as taxes bring back funds to repay that debt.
I could go on and on. Such bodies as the Export Development Corporation, the CNR and Air Canada will be asked to borrow on their own, but we have been providing them with hundreds of millions of dollars. Is it fair to say to the taxpayers today: "You pay money in taxes and we will give it to the Export Development Corporation to lend to another country, so that the other country will buy our manufactured goods, our technology and our ability to build an airport for them and engage our engineers and so forth"? No, it is not fair to ask taxpayers, today to pay those taxes, because the returns come in over 20 years, 15 years, ten years. It is money borrowed.

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The authority we are now seeking from this parliament is the authority to continue to invest in an improved economy for the sake of those taxpayers ten years, 15 years and 20 years down the line. There is no question in my mind that we not only must continue that process-and these borrowings are for the rest of this year and all of next year-but that we will continue to get returns for it.
I would like to point out one other aspect of why borrowing authority is being sought. I refer to the rather unique spreading out of our revenues as a government and our expenditures as a government. Is anyone in the House going to object to the indexation of family allowance or unemployment insurance or senior citizen's pensions? That change was undertaken I believe in 1973, when the oil crisis sent inflation reverberations all over the world. We had to face those circumstances, and we said we would protect such people against inflation. While our expenditures would rise with whatever the inflation rate was, we said we would protect taxpayers by indexing their tax exemptions. So that as we take in fewer taxes-


Paul Wyatt Dick: Mr. Speaker, I rise on a point of order.


Mr. Deputy Speaker:: The hon. member for Lanark-Ren-frew-Carleton is rising on a point of order.


Paul Wyatt Dick: 
Martin Patrick O'Connell: Mr. Speaker, it is virtually impossible for any party in Canada to claim the original patent rights, as it were, to any particular program.


Some hon. Members:: Oh, oh!


Martin Patrick O'Connell: Program suggestions come up on this side of the House and on that side as well. But it is this government which protected those people and it will continue to protect those people. I would be surprised if the hon. member and his party would not support this borrowing authority in order to continue that kind of support.


Mr. Deputy Speaker:: It being five o'clock, this House stands adjourned until Monday at two o'clock in the afternoon, pursuant to Standing Order 2(1).
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, October 23, 1978