1978-04-14

ROUTINE PROCEEDINGS


Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Rural post offices are the lifeline of the community. Farmers and ranchers depend on the post office for mail-order service for garden seeds, clothing, and so on. It has been brought to my attention that telephones are being removed from rural post offices in my constituency. Therefore, I move, seconded by the hon. member for Marquette (Mr. Stewart):
That the Post Office stop any further removal of telephones from rural post offices as many rural folk use the telephone to determine whether parcels have arrived rather than driving to town and wasting fuel.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I rise to present a motion under Standing Order 43. With an unusual degree of political cynicism, the Minister of Agriculture (Mr. Whelan) has been supporting the idea of a beef import law administered by his department. Although there have been guarantees of support in expediting such a bill through the House, no import law has been presented by him. Yesterday, the member for Bruce-Grey (Mr. Douglas) got first reading for such a bill. Mr. Speaker, if the government wants a beef import law now, and the Liberals do not object by shouting "No", I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House give unanimous consent to all stages of Bill C-443 before this session of parliament ends.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. C. A. Gauthier (Roberval):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to introduce a motion dealing with an important matter of pressing necessity.
Following the flat refusal of the Minister of Finance to accept the decision of the Quebec government concerning the removal of the sales tax for a year in weak economic areas; since the dictatorial move of the federal Minister of Finance (Mr. Chretien) is giving Quebecers further proof of his oneway negotiations with Quebec, when the exclusive responsibilities of the provinces guaranteed by the constitution are involved and following many telephone calls from Quebec taxpayers protesting against this unhealthy intrusion of the federal government to prevent Quebecers from setting their own priorities; and considering the grave danger of deepening further the differences between Quebec and Ottawa, which would be the worst threat to Canadian harmony, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That the Minister of Finance reconsider and accept for once the decision of Quebec which wants to act alone within its own jurisdiction.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
4500

April 14, 1978


ELECTIONS
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I rise under the provisions of Standing Order 43 to ask for the unanimous consent of the House to put a motion on a matter of urgent and pressing necessity. In view of the news report that the declared candidate for the Liberal nomination in the Keewatin riding in the Northwest Territories travelled aboard the N.W.T. government's Gulfstream aircraft with the Minister of Indian Affairs and Northern Development (Mr. Faulkner), visiting numerous settlements in the eastern arctic, I would move, seconded by the hon. member for Churchill (Mr. Smith):
That this travel privilege at public expense by a candidate for the Liberal party be extended to declared candidates of the other two major parties.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]


SCIENCE AND TECHNOLOGY
Mr. Eudore Allard (Rimouski):: Mr. Speaker, pursuant to the terms of Standing Order 43, I request the unanimous consent of the House to present a motion dealing with an extremely important and urgent matter.
Because of the glaring lack of efficient measures in the last budget as regards funds earmarked for scientific research, and further to the article published in The Citizen April 10 last on the ever increasing anxiety in which Canadian scientists live in Canada because the present government can at any time cut off all subsidies to scientific research, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That this House agree unanimously on the need for an adequate research and development budget, more specifically 2.5 per cent of the gross national product, and the necessity of adopting a national science policy for the long term, that is from three to nine years.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SPEECH FROM THE THRONE
Mr. Speaker:: Following a brief traditional ceremony which took place at the residence of the Governor General two days ago, I have the honour to inform the House that a communication has been received which is as follows:
Government House
April 13, 1978 Sir,
The Governor General has directed me to send you the enclosed message which has just been received from Her Majesty The Queen.
I have the honour to be,
Sir,
Your obedient servant,
Edmond Joly de Lotbinifcre Administrative Secretary to the Governor General
"To the Speaker of the Senate and the Speaker of the House of Commons:
I have received with great pleasure the loyal and dutiful expression of your thanks for my speech at the opening of parliament on October 18, 1977.
Elizabeth R"



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is for the Minister of Finance. Four more provinces, the four provinces of the west meeting in Yorkton, Saskatchewan, have now expressed concern about the way in which the central government has used its fiscal powers to change the sales tax in provincial jurisdiction. Can the minister confirm for the House of Commons the accuracy of the communique issued by the premiers of the four western provinces yesterday, to this effect:
The provinces did not participate in the decision concerning the federal compensation formula which treats Canadian taxpayers differently depending on the region in which they live.


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I am very surprised that they should say so, because we have made a special arrangement to accommodate the situations of Saskatchewan and British Columbia. When I went for my first round of discussions, they had some problems with some aspects and asked me to change my formula. I changed my formula. My original formula was that they would contribute
April 14, 1978

1 per cent for six months. They changed it so that rather than reducing the tax three points for six months, B.C. and Saskatchewan have reduced their sales taxes by only two points.
That was at their request after discussions with them, so I am surprised that they say they have not participated. I think the point made by the premiers was to the effect that this question was not discussed between the Prime Minister and themselves at the first ministers' conference.


Some hon. Members:: No.


Joseph Jacques Jean Chrétien: Yes. It was not discussed. It was discussed last October among the ministers of finance, and at that time they decided not to proceed with it. When I had my meeting with the ministers of finance previous to the first ministers' meeting, I discussed this matter with them again, but there were no takers, if I may use that expression. That is why it was not raised with the premiers. If the premiers of the west were not in agreement, it would have been easy for them to say so. I did not force anybody. I even made some adjustments to accommodate them.


Mr. Paproski:: You are a phony and a fraud.


Charles Joseph Clark: Mr. Speaker, we have a situation where this government, in the course of its conduct of what it calls federal-provincial co-operation, has the Minister of Finance standing up and saying that the statement made jointly by four premiers, meeting together in consultation with their ministers of finance, was false.


Joseph Jacques Jean Chrétien: I didn't say that.


Charles Joseph Clark: That is precisely the implication, and the only implication, which can be drawn here. Is that federal-provincial co-operation?


Mr. Lang:: He gave the facts.


Charles Joseph Clark: I want to refer to another statement, the veracity of which might be questioned. I have here a transcript of the press conference yesterday of the right hon. Prime Minister in which he says that the agreement relative to the sales tax provision was reached, and I quote, "following something like six months of intensive co-operation". If there were six months of intensive co-operation, can the acting-I was going to say "the acting Minister of Finance"; that is exactly what he is.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Given the fact that the first ministers met in February, knowing that budgets had to be brought down in March or April, can the minister tell us with some precision why this matter which, in the words of the Prime Minister, had been under intensive discussion for six months was not placed upon the table of the economic summit which was called precisely for the purpose of ensuring that federal and provincial policies would go in the same direction, and that there would be co-operation? Why was this matter, which the Prime Minister says was discussed for six months, not raised at
Oral Questions
the summit in February and, instead, sprung upon the provinces in detailed form only four days before the budget came down?


Joseph Jacques Jean Chrétien: Mr. Speaker, I think it is very amusing that the hon. member has to take such a long time to make a point. Discussions began last October at the meeting of ministers of finance; we discussed this proposal, and we discussed it again when we met in January prior to the meeting of first ministers. The first ministers could have put this proposal on the table if they had wanted to, but they did not discuss it. I did not organize the agenda for the first ministers. The hon. member seems to be afraid to ask a question of the Prime Minister. However, I did not organize the agenda. I just say that we discussed it for six months. I travelled out west, met with the ministers and made some accommodations to suit the special cases of Saskatchewan and B.C.
It is very amusing that hon. members opposite should say that there was no consultation when I have made adjustments to meet provincial requirements.


Charles Joseph Clark: Mr. Speaker, we have a situation here where the opposition is wrong, the premier of Quebec is wrong and the premiers of the four western provinces are wrong. Nobody is right except poor little Jean Chretien. Isn't that an amazing situation?


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Minister of Finance says this matter was discussed last October. It was discussed for five minutes over lunch; it was not brought forward in any serious way by the Minister of Finance. If he wants to deny that, let him stand in his place and say that in October or November of last year he put a detailed proposal to the ministers of finance of the provinces-because he knows he did not.


CONSULTATION WITH PROVINCES ON SALES TAX REDUCTIONS
Charles Joseph Clark: Let me now turn to the Prime Minister, this man who has been watching these intensive discussions of the last six months. I ask him this question: In light of the fact that after those intensive discussions we now have five provinces-fully half of the provinces in confederation-expressing their view that the intrusion by the federal government into provincial fields in this manner was handled in a way that is dangerous not only to federal-provincial co-operation on economic matters but also to national unity, will the federal government give serious consideration to immediate discussions with all of the affected governments concerning modifications of the formula or of the proposal?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, to the extent that the western premiers want to further provincial co-operation and think that some mechanism should be set up so that the provincial budgets and the federal budget could be announced together and elaborated together, we are prepared to hear their views.
80033-72(4

April 14, 1978
Oral Questions
I have not read what they stated out west, nor am I privy to their discussions, but if this is the spirit in which they talk I would be happy to sit down with them-as we did in February-and find ways in which budgets at different levels of government can be co-ordinated and brought in together. But in so far as the past budget is concerned, particularly in circumstances where already a question of privilege has been raised in the House that already there has been too much consultation and, therefore, secrecy has not been respected in terms of the budget-


Mr. Grafftey:: You're not serious.


Pierre Elliott Trudeau: -I find it difficult to understand how the Leader of the Opposition could quarrel with the statement of the Minister of Finance and myself that the subject was raised in October at the financial ministers' meeting. It was raised-


Charles Joseph Clark: For five "intensive" minutes.


Pierre Elliott Trudeau: Maybe it takes only five minutes to make the proposition. If the finance ministers wanted to think about those five minutes, they had until the month of January when the Minister of Finance raised the matter again. Surely that is more than five minutes: it is a period of several months.


Charles Joseph Clark: "Intensive discussions."


Pierre Elliott Trudeau: But in so far as making a specific proposal on budget night is concerned, the Leader of the Oppposition and, I am sure, the western premiers themselves realize that it would not have been possible for the Minister of Finance to say, several weeks in advance, that taxes would be cut three or four weeks hence, particularly sales taxes. He and the premiers know perfectly well that this would not have been possible.
The Minister of Finance approached them in confidence, some of them more than once, talked to them on the telel-phone, met with them personally and made a proposal to them. They are big boys, Mr. Speaker, they are adults: if they thought it was not a good proposal, they could have said no; but they accepted.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Not only have they accepted, but they proposed modifications which were accepted by us. After you bring in the budget, one to which they have agreed, all nine of them, suddenly four of them have second thoughts. I repeat that I am not clear as to what they actually said in their deliberations, but I hope it was more constructive than the interpretation put on it by the Leader of the Opposition.


Charles Joseph Clark: Mr. Speaker, this government has so little taste for actual negotiations and co-operation among different levels of government that to them five minutes of talk over broccoli-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: -amounts to intensive discussion.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: I wonder if I might get the attention of the Prime Minister.


An hon. Member:: The word was "broccoli".


An hon. Member:: It's what you eat.


Charles Joseph Clark: The Prime Minister speaks about being ready to agree to any kind of mechanism the premiers might propose. The fact is that the premiers were led by the Prime Minister to believe that they had, in the economic summit, a mechanism by which co-operation among different levels of government could be worked out. They find, having been brought here for the television cameras, they are then betrayed by having a proposal, which did not emerge in February, sprung upon them six months later.
I should like to come back to the question I raised with the Prime Minister which he refused to answer. That question is: In light of the fact that half of the provinces of Canada have now expressed concern about the means by which the federal government has intruded, and used its fiscal power to intrude, into their jurisdictions, will the government commence immediate discussions with all the affected governments to see what changes might be brought in either to the formula or to the proposal relating to provincial sales taxes? Will they start those discussions now with all of those premiers?


Pierre Elliott Trudeau: Mr. Speaker, the meeting in February of first ministers was to establish the kind of co-operation for the short and medium run. We did not attempt, the premiers or myself, to negotiate what budget we would bring down, nor did they tell me what budgets they would bring down. They gave me no information on that.
In so far as information on budgets is concerned, various proposals were made; they were at the level of the finance ministers. The particular scheme of cutting provincial sales tax was in the public domain; it was being discussed publicly. It was not only over the hon. member's broccoli, but it was discussed publicly since the month of October at least. I believe it was made public in a statement by the minister of finance for Ontario.


Charles Joseph Clark: You are a parody of yourself. Go ahead.


Pierre Elliott Trudeau: Mr. Speaker, the Leader of the Opposition expects to receive answers to questions and then he does not listen to them.


Charles Joseph Clark: Not from you.


Pierre Elliott Trudeau: Then I wonder why the hon. member asks the question.


Steve Eugene Paproski: There are no answers forthcoming. You are a phony; you are a fraud.
April 14, 1978


Pierre Elliott Trudeau: I take it the hon. member does not want me to answer his question. If he does, he should listen.


Charles Joseph Clark: I do not think you can answer my question.


Pierre Elliott Trudeau: Let the hon. member say particularly what he wants me to say.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: For the third time, Mr. Speaker-


Mr. Speaker:: Order, please. The exchange has already lasted 15 minutes. The hon. member for Winnipeg North Centre.


Some hon. Members:: Hear, hear!


INCREASE IN SALES TAX AFTER SIX-MONTH PERIOD
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is directed to the Prime Minister. In view of the very clear feeling on the part of the western premiers that federal-provincial relations have been damaged by this experience, and in view of the Prime Minister's having stated just now that the federal government is prepared to do something to try to repair that damage, may I put this proposition to him: In view of the fact that the federal government is taking full credit for the reductions which will now take place in the sales tax of the various provinces, will the federal government-if it is still there six months from now-use all of its capacity to effect the news and to tell us what is going on; will it use that to make it clear to the people of Canada, when the sales tax goes back up six months from now, that the responsibility for it is that of the federal government?


Pierre Elliott Trudeau: Mr. Speaker, the position of the government on the budget is very simple. We gave room to the provinces to increase their income tax and cut their sales tax. This was done by depriving ourselves of federal tax funds, or federal funds from income tax. We decided to do this for a period of six months. In six months, presumably, when this ends, we will have to increase the taxes again to what they were. The people of Canada will know to whom they are paying taxes, unless we decide then to have another budget. They will know that.
In so far as the position of the premiers is concerned, I repeat what I said earlier: they, through the ministers of finance, accepted this proposition. They discussed it over a period of several weeks. I find it passing strange now that the premiers, not the ministers of finance, are saying there has not been co-operation. If the premiers feel that, I am prepared to see them. Let them come to Ottawa next week and I will make an appointment with them. I would be glad to discuss with them what budgetary processes they would like to establish in the future.
Oral Questions
Here is a proposal in which the federal government said to the provincial governments, "We will both put some money in. The federal government will put in more than you. We will put some money in, and we will reduce sales taxes to the Canadian people in order to stimulate effective demand in the economy." And the finance ministers of the provinces accepted. They were not forced to do that; they could have said no, just as one province refused to give an answer. But no. Obviously there is some lack of communication between the ministers of finance and the premiers-the left hand does not know what the right hand is doing-and now they are complaining.
There could not have been a better attempt by the federal government to co-operate with the provinces in putting together a budget with which they agreed. The Minister of Finance travelled across the country to do that; he travelled across the country meeting the finance ministers of the provinces. After three weeks of consultations, we arrived at a budget with which nine provinces agreed and the other remained silent. I now find it passing strange that they are having second thoughts and playing politics to help the Leader of the Opposition.


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: Mr. Speaker, in view of the utter confusion that exists over this matter, and in view of the fact it is now clear that damage has been done to federal-provincial relations, I hope the Prime Minister will meet with the premiers of the provinces very soon to straighten this matter out and come to an understanding as to what is to happen six months from now.


SALES TAX FORMULA AS APPLIED TO QUEBEC
Stanley Howard Knowles: Mr. Speaker, may I direct my supplementary question to the Minister of Finance? My question relates to what is going on between the Minister of Finance of the federal government and the minister of finance of the province of Quebec. In view of the minister's statement that this government will provide to Quebec, having regard to the formula that province has set up, only $37 million of the $220 million that was to have gone to Quebec under this minister's formula, will he undertake that the other $183 million will be provided in some way as an economic stimulus in Quebec to create badly needed jobs in that province?


Joseph Jacques Jean Chrétien: Mr. Speaker, the money is all available at this time. If the Quebec government wants to cut sales tax by two points for six months, as described in the formula, for the rest of the retail sector in the province of Quebec, the money is available. If that province has decided on its own to stimulate further production of textiles, shoes and furniture, so much the better. It is their provincial budget and I cannot quarrel with it. I have some of the textile industry in my own district. I am pleased that Mr. Parizeau decided to do more, through his own budget, for that sector. I am glad he has decided to do that, because we did

April 14, 1978
Oral Questions
something about it when imposing quotas some time ago. The money is still available. He can still cut taxes on other items in the province of Quebec and we would be delighted to contribute and stimulate those other sectors.


Stanley Howard Knowles: Mr. Speaker, does the Minister of Finance call this offer of a total of $220 million, only on the basis that Quebec accept his formula, co-operation when in fact it is dictatorship?


Joseph Jacques Jean Chrétien: Mr. Speaker, I should like to reply to this point because the second minister I called about three weeks before the budget was the minister of finance for Quebec. I wanted to know from him if he was going to say "Yes" or "No". He never said "Yes" or "No".


An hon. Member:: What did he say?


Joseph Jacques Jean Chrétien: He never said "Yes" or "No." He waited until I had made the proposition in the House. 1 could not read his mind. He was talking with other ministers of finance on the topic; he called other ministers of finance to discuss its advantages or disadvantages. I knew that, because the other ones mentioned that to me during my conversations. I had the maximum consultation I could have. He decided, himself, to wait and make his own decision after the fact; and he has to live with his own decision, just as I have to live with my own decision.


SALES TAX-NEGOTIATIONS WITH PROVINCES
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is for the Minister of Finance. We have already determined that the Prime Minister did not see fit to discuss this major initiative on the part of the federal government at the economic summit conference in February. Since March was a month in which six provincial budgets were brought down, budgets which have been seriously affected by what the western premiers describe as severe distortion of provincial fiscal priorities as a result of the unilateral exercise of federal budgetary policy, and since this government speaks so glowingly of its commitment to federal-provincial negotiations, will the Minister of Finance tell us in precise detail, giving the exact dates, when the specific proposal was discussed in detail with the finance ministers of the provinces? I am not referring to general discussions over a lunch last fall; I am referring to specific details.


Joseph Jacques Jean Chrétien: First, Mr. Speaker, I would like to thank the hon. member for saying that it is a major initiative, because in his speech yesterday the Leader of the Opposition said it was no measure at all. I am very pleased that the hon. member calls it a major initiative.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: I said that I had travelled and started these talks during la semaine sainte with the ministers of finance of Ontario and Quebec-la semaine des bons chretiens, monsieur

le president. I spoke to the ministers of finance of Quebec and Ontario. The week right after that I went to B.C., Manitoba, Saskatchewan and Alberta and spoke to all of them. The ministers of finance of the maritimes were phoned by me during the same week, Holy Week. I am sorry; it was Holy Week in respect of the ministers of finance of Quebec and Ontario and the following week for the other ministers.


Flora Isabel MacDonald: Mr. Speaker, I think most of us recognize when Holy Week is held. I should like to point out to the minister that major initiatives are not always good initiatives; they can be bad major initiatives, too. Let me point out to the minister that the government's first action since the economic summit conference was held in February has been action that has brought about federal-provincial chaos, as we have seen now, and not federal-provincial co-operation.
This government's budgetary proposals have had different implications for six provincial budgets brought down prior to these proposals and after the economic summit conference in February. That is what the minister has said in stating he did not discuss this matter with his provincial counterparts until Holy Week. Since his proposals have had different implications for six provincial budgets than for the other four, and since in the words of the western premiers-


Mr. Speaker:: Order, please. I am trying to be lenient with the hon. member, but would she come to her question, please?


Flora Isabel MacDonald: I will put my question, Mr. Speaker. Since this measure could be prejudicial, as the western premiers have said, to ongoing discussions on national unity, dividing the provinces-which seems to be what the premier said-will the Minister of Finance undertake to reopen the discussions, at least with the six governments which introduced their budgets prior to the time the federal government put forward its proposals, and determine if any adjustment to what they have done is now warranted? Will he undertake to do that?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have spoken with the ministers of finance for all the provinces. Some of my discussions were very short and, in fact, the maritime provinces were so happy that they said "Yes" within the first five minutes. So there was no problem there. As to the other provinces which had problems, I visited them and made some accommodations. They were not obliged to accept. I told them it was all apolitical and would depend on what resulted.
In fact, yesterday morning I called as many of the ministers as I could reach, to get their opinion on what Quebec has done. One of the ministers said, "I have made a decision with you, Mr. Chretien, and what happens with the others is not my concern." I have been very frank with the provinces. They could have said "No," but they were pleased to say "Yes" because it was the first time that the minister of finance had ever gone to them. This was not the only matter that I discussed with them: we had discussions on various features of the economy of Canada-the situation with the Canadian
April 14, 1978

dollar, the situation with imports and exports, and so on. Many of them said to me that it was the first time that the minister of finance had ever bothered to talk to them about the economy of Canada before a budget.


Flora Isabel MacDonald: Since this initiative has given four provinces an advantage which the other six did not have when they were introducing their budgets, I wonder if the Minister of Finance would consider changing the phraseology that he used with regard to this initiative and with regard to the economic summit conference, when he described it as a milestone in federal-provincial relations and, indeed, describe it as a millstone in federal-provincial relations.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Mr. Speaker, there was one minister of finance who had made his budget some time previously, and it was the minister of finance of Ontario. However, he was a proponent of this idea and he was so pleased with what I was proposing that on his own initiative he called some of his colleagues to tell them that I was on the right track. Apparently some of these people were afraid that they would be helping me politically in bringing in this budget.


An hon. Member:: Nobody can help you.


Joseph Jacques Jean Chrétien: Every one of the ministers, except the finance minister of Quebec, put the national interest ahead of their political interests.


Some hon. Members:: Hear, hear!

[ Translation]


THE CONSTITUTION
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is directed to the right hon. Prime Minister. It is obvious that we are faced with a very serious problem which might degenerate into a constitutional crisis and once again we are given evidence that the basis of a new constitution is urgently needed. Would the right hon. Prime Minister tell the House whether he would look favourably on the provinces coming together to set the basis of a new constitution which would clearly establish the responsibilities and jurisdictions of provincial governments as well as those of the federal government?


Pierre Elliott Trudeau: Yes, Mr. Speaker, I have already done that. Indeed from 1968 to 1971 the premiers and myself have met from 10 to 12 times to resolve the problem to which the hon. member referred. We have agreed on a number of conclusions. White papers have been published by the federal government. A conference was
Oral Questions
held in Victoria and we had the discussion which the hon. member is hoping for. I also urged the premiers when they met in Ottawa last February to resume that discussion next fall and they have expressed interest in that proposal.


FINANCE
Joseph Adrien Henri Lambert: Mr. Speaker, I would like to direct a supplementary question to the Minister of Finance, and at the same time thank the Prime Minister for his excellent answer.
The whole problem is one of money; the provinces need income and so does the federal government. They are all controlled by finance, by monetary power. Yesterday I asked the Minister of Finance a question and he answered that I was advocating a change in the system of financing the public sector, which is known as the credit-debt system, and the replacement of this method which creates problems by a more social type of credit. In view of the events that have occurred in the last 24 hours, is the minister at least prepared to ask his officials to consider such a change? Only a study can show if that would be better or worse. Is the minister prepared to request such a study?


Joseph Jacques Jean Chrétien: Mr. Speaker, if the hon. member could put his theories down on paper and forward them to me, I will ask my officials to study them and I will give him a reply.


THE CANADIAN ECONOMY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Prime Minister. As we have witnessed this morning an unbelievable foul-up in federal-provincial relations, I would like to deal with the foul-up in relation generally to the world. The dollar continues to fall, with another $30 million being lost today and possibly $350 million so far this month.
At his press conference yesterday, the Prime Minister stated that he hoped the dollar would reach a "just" level on world markets and that he will not intervene to prevent it from reaching that level. Would the Prime Minister indicate what that just level is, because the inference to be taken from his statement is that the dollar still has not reached this just level.


Pierre Elliott Trudeau: Mr. Speaker, I believe the hon. member knows the answer to the question. A just level is one established by supply and demand for the

April 14, 1978
Oral Questions
Canadian dollar on the world market. Supply and demand is established by thousands upon thousands of individuals-businessmen, speculators, and others-offering the Canadian dollar or buying the Canadian dollar. At one point the two curves cross and this establishes the price of the dollar as has happened on the world market.


Sinclair McKnight Stevens: Mr. Speaker, my supplementary is again to the Prime Minister, who added to his earlier statement yesterday that he would intervene to normalize the jerks and spasms but not to prevent the dollar from seeking its normal level. My question, after the Prime Minister's little lecture concerning curves, is: Would he indicate why they chose to raise domestic interest rates in Canada by a full point, if they do not intend to intervene with these normal levels that he refers to?


Pierre Elliott Trudeau: Once again, Mr. Speaker, the central bank will intervene to prevent any movement which it feels is either speculative or abnormal. It does not intervene by establishing a rate beyond which the dollar will not fall or rise. It does not say that we have a fixed dollar: it says, let it float but we will help the dollar float toward whatever its eventual destination is by intervening to prevent an abnormal occurrence.


Sinclair McKnight Stevens: Mr. Speaker, my final supplementary is to the Prime Minister. In order that there be less confusion concerning exactly what the government's and the Bank of Canada's stance is with respect to our dollar, and to avoid the confusion that obviously exists in the imposition of the provincial sales tax, would the Prime Minister arrange for a proper reference to a committee of the House on the subject of the falling dollar, so that the governor of the Bank of Canada, and even the Minister of Finance, would come to that committee and give us a first-hand view of what they feel is a normal level for the dollar and what is, in fact, government policy with respect to this very, very disturbing situation in Canada?


Pierre Elliott Trudeau: Mr. Speaker, we are in the middle of a budget debate. There is no better place for the opposition to make its views known on that matter. It is even better than stating them in committee.


Sinclair McKnight Stevens: We want to find out your view.


Pierre Elliott Trudeau: The hon. member wants to find out our view. Our view is that the dollar is a floating dollar, as are the other currencies of the world. Therefore, we are not determining in advance the proper level which the dollar should reach. We are not determining that. We are letting it float so that the markets of the world will establish its proper value.


An hon. Member:: Horner says it is 90 cents.


Pierre Elliott Trudeau: If the hon. gentleman opposite and members of his party want to express their views on that in committee, I suggest they do it during the next four days of the budget debate. We will be interested in hearing their views.
[Mr. Trudeau.)


EFFECT OF SALES TAX REDUCTIONS
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I have a question for the Prime Minister. The Minister of Finance has just brought down his rubber-duck budget. It had a lot of leaks before, and it has had a lot of leaks since. The Prime Minister will agree that direct taxes are a provincially-shared responsibility. My question for the Prime Minister is this: Why is the government objecting to the province of Quebec directing the reduction of sales taxes on clothing, textiles and footwear when other provinces, such as Newfoundland, do not tax clothing, footwear and textiles at all-


An hon. Member:: Nor does P.E.I.


John Carnell Crosbie: -in their sales tax? Nor does P.E.I. And in Alberta they have no sales tax at all. Why isn't the province of Quebec being permitted leverage in this manner, if there is a policy of co-operative federalism? There is no tax on clothing, footwear and textiles in Newfoundland, P.E.I., or Alberta. Why is Quebec not permitted the same choice?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, the question seems to be singularly contradictory. The hon. member is indicating that because sales taxes are a provincial jurisdiction, Newfoundland has, in effect, reduced its sales taxes on certain items. Quebec has done that. We applaud that. They are perfectly entitled to reduce their sales taxes in the way they want. The province of Alberta is perfectly entitled to have no sales tax, if they want. That is the reality under the constitution and that is the political reality.
We are not objecting to Quebec cutting taxes on certain items. All we are saying is that when the federal budget is brought in we intend to compensate the provinces for certain fiscal actions which they can take; we intend to pay them in part for it. We put this budget together after three weeks of consultation.


An hon. Member:: Six months.


Pierre Elliott Trudeau: We think it indefensible for one province to hold out, to wait until the budget is tabled, to wait until all the other provinces have agreed to it and stated so, and then to decide to go on its own and to high-grade federal money for its own benefit and not for the benefit of the total economy. We think it is contrary to federalism and to the notion of a common market which the PQ itself says would be the one they would fight for.


John Carnell Crosbie: Mr. Speaker, the Prime Minister's answer shows why our federal-provincial relations are in such a barbaric state. The hon. gentleman realizes that the federal government has great fiscal strength compared to the provinces, and what you have said to Quebec is, "You are going to suffer a $ 180-million penalty if you choose to exercise your own discretion on your own direct sales tax in Quebec".


Charles Joseph Clark: That is right.
April 14, 1978


John Carnell Crosbie: My question to the Prime Minister is this: How can our confederation survive with this kind of strong-arm, bully-boy, kung-fu federalist tactic? How can we survive if he stays in office?


Pierre Elliott Trudeau: Mr. Speaker, I think the opposition is demonstrating that it is useless to attempt to put a budget together in consultation with the provinces.


An hon. Member:: Come on!


Pierre Elliott Trudeau: I am wondering if the four western premiers have really taken that view. I do not believe they have. They are probably arguing that the budget should be established together, all of us bringing in our budgets at the same time after consultation. We are prepared to discuss that possibility with them, although it does not seem a very realistic one. But this is the first time, Mr. Speaker. We could have cut other taxes.


Flora Isabel MacDonald: Manufacturing?


Pierre Elliott Trudeau: We could have cut income tax and left it at that. But we were attempting-


An hon. Member:: How about manufacturing?


Pierre Elliott Trudeau: -to put together an idea which had been propounded by the finance minister of Ontario, which had been supported by many economic groups in Canada, as the best way to stimulate the economy at this time. Cutting the sales tax is the way in which you can immediately stimulate the greatest consumer demand.


An hon. Member:: What about the federal sales tax?


An hon. Member:: You have fouled it up.


Pierre Elliott Trudeau: Having accepted this thesis, and realizing that sales taxes are in the hands of the provinces, we said, "We will give you some money to do this. Do you accept?" Nine of them said they accepted, and they did it. Now the opposition is trying to criticize the decision of nine provinces to do something, and the reluctance of one-


An hon. Member:: That is not what happened.


An hon. Member:: Keep digging.


Pierre Elliott Trudeau: -to make up its mind so that it could come in after, make a better deal for itself and not for the whole of Canada. I find the opposition supporting a separatist government in Quebec-


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, that kind of low, disgusting tactic will get the Prime Minister nowhere.


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


John Carnell Crosbie: I quote from the joint communique of the four western provinces. The four western premiers have said:
-contradicted the spirit of federal-provincial co-operation and consultation ... and could be prejudicial to ongoing discussions on national unity.
Are the four western premiers separatists? Is everyone who disagrees with the government a separatist?


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. I am having difficulty hearing the hon. member's question.


An hon. Member:: Ask it again.


John Carnell Crosbie: Mr. Speaker, my question to the Prime Minister is: Are the four western premiers, including everyone on this side and everyone who doubts the veracity and wisdom of the government, separatists by definition?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, that can be the inference the hon. member wants to draw. It is certainly not-


An hon. Member:: It is yours.


An hon. Member:: You said it.


Pierre Elliott Trudeau: It is certainly not what I said, Mr. Speaker. I was dealing with the support given by the Tory party-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: -to the scheme put forward by the separatist party of Quebec.


An hon. Member:: Cheap.


Pierre Elliott Trudeau: They are telling us now that they want the federal government to go along with the scheme, the effect of which is to use national funds, funds of the Canadian taxpayer, to encourage certain industries in Quebec, when the rest of the provinces have accepted a proposition which would help all consumers in Canada-


An hon. Member:: What about DREE?


An hon. Member:: Half a billion in DREE.


An hon. Member:: What does DREE do?


Pierre Elliott Trudeau: Now they want to ask a question about DREE, Mr. Speaker. Let them ask a question about DREE. We were talking, until now, about their support for a scheme which does not have the support of the other provinces. Yesterday, the Minister of Finance phoned several of the provincial ministers of finance-


An hon. Member:: Support the Liberal party of Quebec.

April 14, 1978
Introduction of Bills


Pierre Elliott Trudeau: -asking them if they would go along with the Quebec scheme, and they said, "Of course not."


An hon. Member:: Raymond Garneau likes it.


Pierre Elliott Trudeau: We put a deal together, all nine of us plus the federal governement, and now we are not going to go along with the special proposal made by Quebec. The Tory party is distinguishing itself by saying that it will. We will not, Mr. Speaker. That is their position; it is not ours.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!



ROUTINE PROCEEDINGS


Mrs. Ursula Appolloni (York South) moved: for leave to introduce Bill C-444, to amend the Criminal Code (hospital orders).


Some hon. Members:: Explain.


Ursula Appolloni: Mr. Speaker, this bill is premised on the acknowledgment of the fact that because brutal "justice" is frequently meted out by fellow inmates to child molesters, judges hesitate to sentence these offenders to prison terms. By granting special power to the criminal courts to make "hospital orders" as opposed to usual terms of imprisonment, this bill is designed to provide needed medical treatment to offenders suffering from psychopathic disorders and, especially important, to protect the public from the risk of further offences being committed if the offenders are at large.


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

Mr. Stuart Leggatt (New Westminster) moved: for leave to introduce Bill C-435, to amend the Canadian Human Rights Act (private sector compliance).


Some hon. Members:: Explain.


Stuart Malcolm Leggatt: Briefly, Mr. Speaker, the purpose of this bill is to extend the protection of the Canadian Human Rights Act to employees of private companies carrying on business in

Canada that are in receipt of federal government contracts or subsidies of any kind. The effect of the bill would be to deny such companies federal contracts or subsidies where they are in violation of the Canadian Human Rights Act.


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

[ Translation]

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: 313, 314, 490, 1,153, 1,243, 1,336, 1,354, 1,428, 1,437, 1,442 and 1,473.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


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


Otto Emil Lang: The Management of Canadian National Railways advises as follows: 1. (a) CN obtained part-time employees from private agencies in the following provinces only:
Number of Employees
Province	1975	1976	TotalBritish Columbia	16	20	36Alberta	108	197	305Manitoba	1	7	8Ontario	12	11	23Quebec	37	65	102174	300	474
(b) In 1975 only, CN obtained one (1) full-time employee from an employment agency in Ontario.
2. The fees for all of the above employees were paid from existing operating budgets. No supplemental budgets were set up to cover these fees. No such payments were made from government estimates.
April 14, 1978

3. (a) The average hourly rate paid to the employment agencies in the five provinces where agencies were used is shown below:
Province	1975	1976British Columbia	$5.64	$5.96Alberta	5.57	5.89Manitoba	5.00	5.55Ontario	5.10	5.59Quebec	4.97	5.52
(b) The average hourly rate paid to the employees by the agencies, is unknown as the agencies do not disclose, to their clients, the wages paid to employees, (c) The total amounts paid by CN in the five provinces where employment agencies were used are shown below:
Province	1975	1976	TotalBritish Columbia	$ 2,531.99	$ 4,382.45	$ 6,914.44Alberta	15,179.62	34,134.35	49,313.97Manitoba	534.00	7,815.00	8,349.00Ontario	6,896.58	6,303.60	13,200.18Quebec	32,597.82	45,296.08	77,893.90$57,740.01	$97,931.48	$155,671.49


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


Otto Emil Lang: The management of Air Canada advises as follows: 1. (a), (b), (i) to (x), 2 and 3. Air Canada has a part-time and temporary and casual staff to fill peak work requirements, some of whom are obtained from outside agencies. In all cases, each of the more than 800 budget centres in the airline may employ such help if the necessary budget provision has been made and approved. These non-permanent employees do not form part of the company's automated payroll system and, while it is possible to reconstruct this information manually, the required expense to produce the information is considerable and prohibitive.


Mr. Forrestall: 1.	With reference to the answers to Question Nos. 5,359 of the First Session and 163 of the Second Session of the 30th Parliament, did the government receive representations from foreign governments or international organizations seeking to learn Canada's record in terms of implementing international treaties etc. signed by Canada?
Order Paper Questions
2.	Does the government have any current plans to compile statistics on what percentage of treaties it has signed but has never implemented and, if not, for what reason?
3.	What is the government's best estimate of the percentage of treaties it has signed which have (a) never been implemented (b) been implemented (i) in part (ii) completely?
4.	Does the government consider its record in terms of implementing treaties signed by it to be favourable in terms of international standards?
5.	If difficulties exist in terms of implementing international treaties in Canada, what is the policy of the government in signing such treaties where such difficulties, if any, are foreseeable?


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: 1. No. The government, through the Department of External Affairs, does receive enquiries, however, from foreign governments or international organizations in respect of the implementation of specific treaties signed, ratified or acceded to by Canada. These enquiries are normally of a legal or technical nature.
2.	The Department of External Affairs has no plans to compile statistics on treaties signed by Canada which have not been implemented. A search of the hundreds of entries in the Canada Treaty Register to establish the limited number of treaties signed subject to ratification and not ratified would require a major expenditure of budgetary and manpower resources.
3.	The number of treaties signed by Canada which have not been implemented is insignificant.
4.	Yes.
5.	When the Government of Canada has determined that it is in the interest of Canada to enter into a treaty, if legislative action by the Parliament of Canada or the legislatures of the provinces is necessary to implement the treaty, the practice, subject to the terms of the treaty, is to sign subject to ratification, or alternatively, after legislation is in place, to accede to the treaty. In neither case will obligations normally be assumed by Canada by ratification or accession until the legislative requirements of implementation have been fulfilled.


Mr. Herbert: Has the government considered introducing legislation requiring companies that sell or lease subdivision lots across provincial boundaries, to file a detailed description of such property, including financial and legal information, information on sewers, water lines, possible flooding conditions, etc.?


Hon. Andrl Ouellet (Minister of State for Urban Affairs):: am advised as follows by Central Mortgage and Housing Corporation: The information being sought involves matters which fall exclusively under provincial and municipal legislation, and the government has, therefore, not considered introducing legislation of this kind.


Mr. Herbert: Are statistics recorded on the percentage (a) of single family residences that are mortgaged (b) by various dollar levels of existing mortgages and, if so, by

April 14, 1978
Order Paper Questions
comparing mortgage figures in constant dollars was there a discernible trend in any change in the past five years?


André Ouellet: am advised as follows by Central Mortgage and Housing Corporation: (a) Data on single detached dwellings with or without mortgages are available only from the decennial census. The table following summarizes the information for 1971.
Single-Family Residences, Canada, 1971
	Per cent
No Mortgage	47.2
One Mortgage	45.1
More than One Mortgage	7.7
Total	100.0
(b) Census data do not provide the information requested. The table following provides information derived from a special survey conducted in metropolitan areas in 1974, but the constant dollar deflation of residential mortgages is not available in any form.
Mortgages Outstanding on Single-Detached Dwellings
Metropolitan Areas, Canada, 1974
Amount of Mortgage $	Per cent
I- 9,999	37.9
10,000-19,999	37.4
20,000-29,999	16.6
30,000-39,999	6.2
40,000-49,999	1.4
50,000 +	.5
Total	100.0


Mr. Bawden: 1.	How many people are employed in Crown Assets Disposal Corporation?
2.	In (a) 1973 (b) 1974 (c) 1975 (d) 1976 (e) 1977, how many employees were classified as (i) bilingual (ii) unilingual?
3.	What is the policy of the Corporation on (a) hiring (b) promotion (c) demotion of employees classed as (i) unilingual (ii) bilingual?
4.	How many employees in the Corporation were promoted from branch offices to the head office in (a) 1973 (b) 1974 (c) 1975 (d) 1976 (e) 1977?
5.	How many employees from outside the public service have been hired in the head office of the Corporation in (a) 1973 (b) 1974 (c) 1975 (d) 1976 (e) 1977?
6.	How many of the above are (a) bilingual (b) unilingual?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: 1.	As of February 28, 1978, Crown Assets Disposal Corporation employed 68 people.
2.	January 1 to December 31 :(a) (i) 19, (ii) 74; (b) (i) 20, (ii) 71; (c) (i) 21, (ii) 50; (d) (i) 27, (ii) 39; (e) (i) 31, (ii) 36.
3.	(a) (i) and (ii) All qualified applicants are considered for appointment to vacant positions. In the case of bilingual

positions, appointees have to be bilingual or be willing to undertake language training, (b) (i) and (ii) Unilingual and bilingual employees share equal opportunities for promotion. In the case of bilingual positions, appointees have to be bilingual or be willing to undertake language training, (c) (i) and (ii) The language status of an employee has no bearing on demotion.
4.	(a) 1, (b) Nil, (c) 1, (d) 1, (e) Nil.
5.	(a) 12, (b) 18, (c) 9, (d) 6, (e) 17
6.	Bilingual (a) 1, (b) 5, (c) 8, (d) 6, (e) 12. Unilingual (a) 11, (b) 13, (c) 1, (d) Nil, (e) 5.


Mr. Brisco: Is the approval of the Minister of Transport or the Cabinet required before any obstruction in the form of a bridge, dam or similar structure is placed on/in or across a navigable waterway and, if so, what is the list of all (a) approvals that have been given in the past three years and, in each case, what is the name and location of the waterway (b) applications that are presently waiting approval and, in each case, what is the name of the waterway and its geographic location?


Otto Emil Lang: The approval of the Minister of Transport by virtue of the Navigable Waters Protection Act is required for any works constructed in, on, over, upon, under or across a navigable waterway in Canada regardless of whether the work is existing or proposed. Examples of such works would include bridges, booms, dams, causeways, marinas, fill, aerial and submarine cables, wharfs and many other smaller works. In response to part (a) of the question, the approximate number of applications approved by this department within the past three years is in the order of 4,500. Of these approvals issued, approximately 40 per cent would be generated from the west coast region. Resources within the department do not permit a further breakdown of this figure, which would require a comprehensive listing of waterways and geographic locations of the approvals involved. There is also no mechanism for identifying applications pending approval, which would enable the department to provide the information requested in (b). It would be necessary for the enquirer to provide the name of the applicant or the waterway involved.


Mr. McGrath: testing of samples, it was indicated that the brick complied with the requirements of residential standards, i.e., Canadian Standards Association, A82.1 burnt clay brick.
2. CMHC is not authorized to offer assistance to the owners of the homes affected.


Mr. Hnatyshyn: How many freight cars capable of being used for grain hauling were in the United States on March 3, 4 and 5, 1978?


Otto Emil Lang: Many types of railway cars could be used to haul grain but of the railway cars dedicated to grain service, both CN and CP Rail advise that there were less than 100 cars in the United States on March 3, 4 and 5, 1978.


Mr. McKinnon: 1.	Has a contract been let to Bristol Aerospace Limited for $4,198,760 for rocket motors and, if so, what is the purpose for which the rocket motors are to be used?
2.	How many rocket motors will be provided and are they all of precisely the same type?


Jean-Pierre Goyer: 1. Yes. The rocket motor is part of a weapons system, and the number contracted for is equivalent to the annual consumption by the Department of National Defence in air-to-ground practice firings.
2. Twenty-four thousand rocket motors of precisely the same type will be provided.


Mr. Huntington: 1.	Does the National Harbours Board pay for fire boat protection at Montreal Harbour and (a) if so, what is the cost per year (b) if not, who does and what are the operating costs per annum?
2.	Who owns the fire boat in Montreal Harbour?


Otto Emil Lang: The National Harbours Board advises as follows: 1. No. (a) Not applicable, (b) Tugs owned and operated by private tug operators in the port of Montreal are equipped with fire fighting apparatus, the cost of which is borne by the operators.
2. There is no fire boat at the port of Montreal (see reply to
Kb)).



POINT OF ORDER


Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, I rise on a point of order. I have had a question outstanding since October
The Budget-Mr. Andras
19, some six months, question No. 137, in which I ask if DREE or any other departments pay direct or indirect subsidies toward the operation or maintenance of Canadian Armed Forces bases. It is quite a simple question. Some money is going into the Department of National Defence to keep bases running. A department that spends $4 billion should know where its money is coming from, and I cannot understand why they have not been able to answer this question in less than six months. I do not see anything sinister about them withholding the answer. I believe it is sheer incompetence.


Yvon Pinard: Mr. Speaker, to date we have answered more than 60 per cent of the questions on the order paper. Obviously the question referred to by the hon. member is part of the 40 per cent of questions we have not yet had time to answer. We will consider his request.


Mr. Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall the remaining questions stand?


Some hon. Members:: Agreed.


Mr. Speaker:: May I ask the House to return momentarily to the tabling of documents. I have overlooked an indication that the Minister of Transport (Mr. Lang) has a document for filing.



VIA RAIL


Otto Emil Lang: Mr. Speaker, I would like to table, under Standing Order 41(2), two copies, in both official languages of the first annual report of VIA Rail Canada Incorporated.



GOVERNMENT ORDERS


[Stage Direction]
FINANCIAL STATEMENT OF THE MINISTER OF FINANCE The House resumed, from Thursday, April 13, consideration of the motion by Mr. Chretien that this House approves in general the budgetary policy of the government, and the amendment of Mr. Stevens (p. 4439).
Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, as I rise to take a few brief moments to enter this debate, I begin by expressing my congratulations to my col-

April 14, 1978
The Budget-Mr. Andras
league, the Minister of Finance (Mr. Chretien), both for the budget he presented on April 10 and for the way he is handling what I think anyone on any side of the House or anywhere in the country would recognize as a very difficult portfolio in admittedly difficult times of economic tension.
I believe it is a reasonable assessment to say that the general reaction across the country to the budget of the other night has been favourable. It is obviously correct to say it has not met with total acceptance by our friends across the floor. That is understandable, because they are the opposition. It would be a great surprise to see any measure presented by the government with which they could find favour, even if there were some elements of it they could find in their hearts to accept.
We have heard in response to the budget that it was too little, that it was half measures. The Progressive Conservatives stated they would have cut taxes by over $2 billion. Indeed, that becomes the option game for the Canadian people. They have said that the budget is short term, it is the wrong thing to do, and so on.
I would like to take a few minutes to put on the record the cumulative measures and the impact on the year 1978 in terms of tax reductions and the cumulative measures taken by this government over a period of time, most recently on April 10 with the cooperation of at least nine of the provinces. That was a phenomenal step forward in federal-provincial relations, despite the criticisms some members opposite have addressed to the one aberration, that is, the decision of the province of Quebec.
It was a step forward in federal-provincial cooperation on fiscal-economic matters. It fell very well into what I consider to be a very significant advance between the provinces and the federal government which took place at the first ministers' conference a month or so ago. At that time, nearly all the senior leaders of various levels of government met and, for whatever the reason, reached general agreement on a set of principles that were well enunciated and will be beneficial to Canada.
I return to the cumulative stimulus in the economy of tax reductions resulting from actions taken by this government over a period of time. In 1978 the total effective tax reductions from those actions will be $4,497 million. If anyone says that is a half measure, they are playing the option game with the Canadian economy. That would be totally irresponsible in some of the measures they are suggesting. Let me detail where that $4,497 million comes from.
On the personal income tax side, the automatic indexation that was introduced three years ago, which is casually dismissed on many occasions by members opposite, amounted to an effective $850 million personal tax reduction as of January 1 and continuing through the year.
The carry-on effect of the personal tax reductions in 1978 of the March 31, 1977, budget measures is another $675 million tax reduction this year on the personal income tax side. The measures taken by my colleague, the Minister of Finance, on
October 20 last represent another tax reduction on the personal tax side of $730 million.
On the personal income tax side, in a measure which is considered to stimulate spending and alleviate the effect of inflation, particularly on lower income families, the total tax reduction effective January, 1978, amounted to $2,255 million. That is not a half measure.
The effective tax reduction flowing from the retail sales tax reduction announced on April 10 is $1,147 million, which will be put directly into consumer spending because it cannot be realized unless people buy things and take advantage of the tax reduction.
On the corporation tax side, the cumulative effect of 1978 taxes to be paid by corporations, will be a total reduction, as a result of action taken by the government, of $1,095 million. On March 31, 1977, the then minister of finance introduced in his budget certain adjustments in inventory tax measures and also announced the provision of investment tax credits. Those two measures combined amount to tax cuts for corporations of $895 million in this fiscal year. On October 20 the Minister of Finance announced access for corporations to employment tax credit and this, if used in the current year, will amount to another $100 million tax relief to the corporations.
In addition, on April 10, the other night, the Minister of Finance provided access to a higher level of write-off in connection with research and development which will amount to approximately $50 million this year. He also provided concessions in taxation applied to tertiary oil and other areas amounting to $50 million. So we are looking at a corporate tax reduction effective this year of $1,095 million, and at a total of tax reductions effective in 1978 of approximately $4,497 million. Mr. Speaker, I do not think those who talk about that as a half measure are acting responsibly or even in a credible fashion.
There has also been an attempt to say that this is the wrong way to go-that this is not part of a planned economic approach. I submit that this view is not the correct one. The personal income tax cuts, the income tax cuts, the corporations tax cuts to which I have referred, do focus not only on the short term but also on the medium and longer term. Certainly they are concerned with helping lower income people-I refer particularly to the personal tax cuts and to the retail sales tax reductions.
I would also point out that the April 10 measure especially deals directly with the stimulating of consumer demand-we are all concerned about the question of unused capacity in our plants resulting from an apparent reluctance to purchase goods-thereby stimulating further expansion and employment. That is the purpose of the retail tax deductions which took effect the other day. Their purpose was to stimulate consumer spending so as to absorb some of that unutilized capacity and thereby trigger the other measures taken by the government which address themselves to the medium and the long term, and, if I may say so, to structural problems as well.

April 14, 1978

What else is investment tax credit but investment in the medium and the long term growth of the economy? That is its purpose, to encourage people to invest in industrial and commercial activity, a process which will, in the end, result in the creation of more jobs. The inventory adjustment measure addresses itself to structural problems and to the medium and the long term. The employment tax credits are addressed directly to the reduction of unemployment through the stimulation of business activity and confidence. What else is the $50 million which is going into research and development-I hope it turns out to be more-but an investment in the medium and the long term and in the structural aspects to which we all wish to address ourselves?
Those who criticize this budget or the actions of the government for not addressing the deeper problems, had better tell me what else the tax reductions made the other night in the tertiary oil field and rail transportation are, what else are they but investment in the structure of our society which, we say, troubles us.
Finally, the change in the tax measures applied to family and corporate farms will also encourage our food producers.
Keeping all these things in mind, I submit that those who argue that government policy lacks continuity, lacks symmetry, lacks an over-all strategy, are failing, either deliberately or through lack of understanding, to give credit to the cumulative effect of all the measures which have been taken.
I intend, now, to make a statement which I think is indisputable but which may surprise some people. One hears from certain businessmen and others that they face a punitive corporate tax regime in Canada. That is not the case. The Canadian corporate tax structure is as favourable as that of any country in the world, including the United States. This was the case before the measures taken the other day, and the position of the corporations has now been enhanced by the concessions I have detailed. I think it is time for people to stop talking about how they are being punished and handicapped and inhibited when operating businesses in this country. The facts show that this is not the case.
One often hears from certain businessmen that they are over-regulated, that they are being hamstrung by the number of regulations with which they are obliged to conform, the amount of information they are called to supply, and so on. Let those people go down to the United States, into any state of the union, and start to operate under the much harsher regulatory regime applied there, and then tell us we are not competitive in that field.
The other side of the budget picture involves the question of fiscal responsibility. We have heard a constant stream of unreal statements from the opposition to the effect that no real restraint in expenditure is being shown by the government. I am glad to recognize that this is not believed by people who analyze the situation seriously. It is really nothing but a political statement, because the facts are indisputable.
Governments, not just the federal government but all the governments in this country-and thank goodness for that-
The Budget-Mr. Andras
have turned away from the admittedly excessive spending of the last ten or 12 years, which culminated in a bite on the economy by all levels of government of about 40 per cent. Incidentally, one hears the figure of 42 per cent as the figure for spending by all governments. That is not correct. National statistics clearly indicate that it was in fact 39.9 per cent-I don't know where these people are getting their statistics. At any rate, government expenditures are now declining from the peak of 1975. The same statistics show that the reduction as a percentage of the gross national product is taking place mainly at the federal level through the exercise of restraint in federal spending.
What is the story of our expenditure levels in the last three years? Two or three years ago we began to set out publicly what our total spending would be for the coming fiscal year. That had not been done before by any government, to my knowledge. We set out our commitment and said that we would not exceed it. We said that our objective was to restrain budgetary and non-budgetary increases, capital and non-capital spending, and total cash spending, to something less than the growth in the gross national product.
Our first commitment of a dollar figure ceiling was for the year 1976-77. Our original publicly stated and committed spending target was $42.15 billion. We actually spent $1 billion less than that in fiscal year 1976-77. We spent $41,078 billion. We stated our commitment and met it. Our percentage increase year on year was 10.2 per cent.
In 1977-78 we started off by making the same move. We laid out publicly and in this House what our total spending ceiling would be for fiscal year 1977-78. When I tabled the main estimates for that year on February 16, 1977, I stated that we would contain ourselves to a ceiling of $45.1 billion. Shortly thereafter, in cooperation with the then minister of finance and to provide an offset of expenditure reduction to enable him to make certain tax cuts which we all thought were then required, we reduced that spending target, again publicly. The then minister of finance stated in his budget speech of March 31 that spending would be $44.45 billion, a cut then of $650 million.
For the statement of the Minister of Finance of April 10- and I was glad to be able to do this; I had much cooperation from many people-I was able to tell him that we would come $200 million under that downward revised ceiling of expenditures for 1977-78, and in fact I am saying that we will be in, at, or under $44.25 billion rather than $44.45 billion. That will represent a 7.7 per cent increase over the previous year, which is very close to or even a little under the inflation rate for that year, and which means that we contained ourselves to no real growth at all in our expenditures for the fiscal year just ended.
Taking the same tactics again-and I think these are eminently responsible-when the Minister of Finance, in conjunction with his colleagues and in co-operation with the provinces, made the basic decision to cut retail sales taxes, provide research and development assistance, and so forth, the other

April 14, 1978
The Budget-Mr. Andras
day, we consulted. We said that there should be some kind of offset to the reduction of revenue inherent in those tax cuts to the federal treasury. The $1,147 billion of retail tax cuts plus the research and development tax cut and the tertiary oil and railway development tax cuts will end up costing in revenue to the federal government about $900 million.
Everybody knows we have a deficit and that we are concerned about it, and, of course, the provinces are sharing in that over-all tax reduction. However, for those who might have been concerned about the result and the effect on our cash requirements this year of that $900 million federal investment in tax reductions, the arithmetic is that with the $200 million under-spending for 1977-78 which I was able to announce, and with the commitment to cut another $350 million off our spending total for 1978-79, we will have offset that $900 million revenue reduction by a $550 million expenditure reduction. That means that there might be a net increase in our deficit as a result of the budget measures the other night of about $350 million. That $350 million will result in the stimulation of consumer demand.
There will be a $1,147 billion retail sales tax reduction, and there will be another $100 million in other structural tax encouragement for corporations. I think it was an eminently responsible budget. We recognized the limitations in our fiscal situation by virtue of high cash requirements, and we offset those to the maximum by about $550 million. I can assure hon. members that that $350 million expenditure reduction to which we are committed will be met, and I submit the track record of 1976-77 and 1977-78 as evidence that when we make that commitment we will make that expenditure reduction.


Some hon. Members:: Hear, hear!


Robert Knight Andras: As we do that we are reducing the reserve for supplementary estimates, which I detailed when I presented the main estimates on February 22, by that $350 million. I am not going to say that this will be an easy job for the government. I know from the experience of a year and a half in my present portfolio that it will not be easy for me.
We will have to deny submissions for new programs. We will have to cut back in some other programs. That will be difficult. Just saying, as the opposition does, that if it had the reins of power it would cut expenditures by $2 billion just like that, will not deceive the Canadian public. The Canadian public will not be deceived by that kind of nonsense. I would like very much to hear from what level the opposition would cut, and precisely where. We have been doing it. I would like to know what programs the opposition would attack. Whose ox are they going to gore? It is not an easy job.
Members of the opposition say that if they had power, they would cut taxes by $2 billion in addition to the $4,497 billion which I have delineated. They would cut expenditures by $2 billion just like that, but they really do not know what they are talking about. They have left no precision on the record as to where the money would come from or how they would do it.
My time is limited. There are one or two corrections I want to make. I want to correct some of the rather loose things the

hon. member for York-Simcoe (Mr. Stevens) threw around the other day. He claimed that instead of the expenditure reduction I am telling the House we are accomplishing, our expenditures for 1977-78 were more than $1 billion more than had been forecast in the budget speech of March 31, 1977. I have already dealt with that. I will forgive the hon. member by saying that he probably took the wrong line from the book. Whether that was convenience or not, I do not know, but it was the wrong line, and therefore a distortion of the facts when the hon. member said that total spending was up.
I will forgive him for that, but there was another rather puzzling set of figures the hon. member used when he attacked the government for growth in the number in the federal public service. He said that in 1968 when the Prime Minister (Mr. Trudeau) came to power there were 280,000 people in the total federal public service and that, as of the end of 1977, that number had grown to 580,000.
When the hon. member gave a figure for the base year 1968, he quoted the figure 280,000, conveniently leaving out the Armed Forces and all employees of Crown corporations. If he had included those employees, the base figure would have been 470,000. He conveniently left those employees out of the base year figure, but somehow they all turned up in the figure for the comparative year of 1977, 580,000. I am not sure whether that was because of poor research or because of absolutely blatant chicanery.


Mr. Cullen:: The latter.


Robert Knight Andras: Again I will say that the hon. member probably took the wrong page or the wrong line, but he should not make statements like that and expect to be believed in everything else he says. It is curious that his errors are always in the wrong direction.
We are achieving restraint in the growth of the federal public service. We have chosen, in the expenditure pattern and those kinds of things, to do it on a responsible, gradual basis, because we want to direct it downward. We do not want to take Draconian measures today which could have a very serious impact on the economy later.
There is a tendency in these debates to throw statistics around. I did it because I felt I had to correct some of the very, very bad information that has been put out in this debate by members opposite.
I want to wind up my remarks, Mr. Speaker, with this point. Nobody realistically would say that in this country we are making economic progress. Nobody is saying that and nobody is failing to recognize, except in the heat of rhetorical debate and political opportunism, that many of the problems we have in this country are absolutely, correctly, and factually shared in most of the western world. We share those problems, and there is no amount of bombastic rhetoric that will convince people that we can isolate our situation from that in the rest of the world.
April 14, 1978

I have great faith in the mass wisdom of people in this country, and faith in their understanding that the world is facing economic tensions and that there is confusion. Even those countries we tout as having the best economies in the world are facing economic tensions. Helmut Schmidt is reported as having said the other day to a friend of his that he is totally puzzled about how the economy of the world is operating today. There is nobody who will stand before the electorate and say, "We have all the answers, we have the miracle wand to wave and, if you just trust us, all the problems will be solved". There are some people who will try to convey that, if they had the reins of power, all the problems in the world would be solved, but I do not think Canadians would be fooled about that.
In the process of overkill, of the constant verbal barrage of gloom, doom, and disaster, always talking about the negatives in our society and in our economy, and never admitting or playing up or putting into the balance the positive aspects of our economy which still in our country far outweigh the negatives, I question what consideration is being given to the psychological confidence of Canadians. So on that basis I look across the floor and I question, not only the matter of policy responsibility but also the question of psychological responsibility, when what we need in this country above all, and indeed in the western world, is an emphasis on the positive, a recognition that this country stands economically, socially, in terms of justice, and in terms of any indicator you want to look at, as one of the most favoured nations in the world. The only way in which we could louse that up is by an overkill of opportunistic negativism, which prevails in this House all too often and obviously in the press.
We really have nothing to fear but fear itself. I think it is time we faced our problems realistically. It is time we patched up our weaknesses, we recognized that things are being done, and we recognized that governments alone cannot do them but that the decisions of businessmen, unions and individuals in this country are collectively far more important than what we think we are doing here in the House. If we have a role to play as political leaders and public figures, it is one of presenting a balanced picture, and today I say what we need is a balanced picture that comes out positive and not negative.


Some hon. Members:: Hear, hear!


Mr. James A. McGrath (St. John's East):: Mr. Speaker, we meet to debate this budget in an air of crisis, and there is a crisis in this country, a very serious economic crisis. All we have to do is to examine what has taken place in this country in the three days following the bringing down of the budget by the Minister of Finance (Mr. Chretien). No sooner was the budget brought down than the unemployment figures were released the following day by Statistics Canada showing a substantial increase in the rate of unemployment in this country. The rate of unemployment rose to 8.6 per cent, a rise of three points over the previous month, putting 1,045,000 Canadians in the ranks of the unemployed.
The Budget-Mr. McGrath
As if that was not bad enough, we had the consumer price index released on the following day showing another substantial increase in the rate of inflation, which is now running at 8.8 per cent, an increase in one month of 1.1 per cent.
In the midst of all this we had an unprecedented fall in the Canadian dollar. Our dollar is sinking daily in response to the minister's budget, demonstrating beyond any doubt that the international financial community have no confidence in this government's ability to manage the Canadian economy. Certainly they have demonstrated that they have no confidence in the budget brought down last Monday night by the Minister of Finance. Today, the Canadian dollar is trading at less than 87 cents.


Some hon. Members:: Shame!


James Aloysius McGrath: It is still sinking. By the weekend it will be down to 86 cents, and we are just a few days away from an 85 cent dollar and all it means to Canada, to the Canadian economy, to Canadian consumers, and to our rate of inflation, closely tied as we are to the U.S. economy, with our pricing system geared to the U.S. dollar.
And yet we have the President of the Treasury Board (Mr. Andras) standing in his place today trying to justify the unjustifiable. He threw out a few challenges. I pity the President of the Treasury Board. He has a very difficult role to play; he has an impossible task. He criticized my colleague, the hon. member for York-Simcoe (Mr. Stevens), and he criticized my leader. He criticized this party for daring to advocate $2 billion worth of tax cuts, and he challenged us to identify them. I thought that the Leader of the Official Opposition (Mr. Clark) did just that when he spoke in this debate in one of the great speeches of the House of Commons.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: I am sorry the President of the Treasury Board could not wait for a reply to his question. We can identify where $2 billion could be saved in this country. We are spending almost that much on consultants' fees, which is a euphemistic term for patronage. We are spending almost $2 billion on consultants' fees, notwithstanding the fact that we have built up in this country a substantial body of experts within the Public Service of Canada capable of meeting just about any challenge presented to them by any department of government. We have a highly trained, highly competent Public Service in this country, yet we go outside of the Public Service every day, every week, and every month, and spend almost $2 billion annually on consultants' fees. That is where we can make the saving right there. That is some of the fat we would trim from the government.
My leader spoke about sunset laws, about bringing the curtain down on some of the redundant Crown corporations which are no longer relevant. We have a ridiculous situation today where the government hardly knows how many Crown corporations it has under its jurisdiction. Certainly the curtain should be brought down on some of these redundant Crown corporations, and the remainder should be made more

April 14, 1978
The Budget-Mr. McGrath
accountable to parliament so that their budgets can be kept within control. As it stands now, they answer to no one. In fact they are accountable to no one, as has been demonstrated by the experiences of the past year with at least two Crown corporations dealing in the commercial world.
When the government took office ten years ago, the total budget was about the extent of what is the total anticipated deficit of the government this year. That is where we are. That is the consequence of the disarray arising from the financial mismanagement of the Canadian economy. The former minister of finance originally forecast a $7.2 billion budgetary deficit for 1978. Some seven months later, the present Minister of Finance said that the deficit would be $9.2 billion. The 1978 accounts will show a budgetary deficit of $10.3 billion, which is 43 per cent greater than the original forecast and comparable to the total amount of the government's budget when it took office ten years ago. That is the setting we find ourselves in for this debate today.
Our annual rate of inflation is the second worst of the major industrialized countries of the west, 8.8 per cent. That is the climate we are in, as we come into the post controls period which commences tomorrow. The government does not have a post control strategy to cope with this new round of inflation, which is being influenced directly by the dollar crisis.
What do we have in terms of a monitoring agency? The government could not reach agreement with the provinces on setting up such an agency, based on either the Food Prices Review Board or the old Prices and Incomes Commission, both of which had the legislative clout to move in and examine the books of companies and organizations that were suspected of going beyond the guidelines. Instead, the government is falling back on the Economic Council of Canada, which was not set up to do this type of work and which does not have the legislative clout to it.
In fact the legislation setting up the Economic Council of Canada included a provision to ensure that it would not duplicate the work of Statistics Canada. The Council can only react to the Statistics Canada figures in the consumer price index. In other words, it can react only after the fact, after the inflationary trend in a particular sector has been identified by Statistics Canada. In terms of an inherent weakness in monitoring during the post controls period, that was not bad enough. This agency does not have labour representation. The Canadian Labour Congress withdrew from it a couple of years ago. That brings up the whole business of co-operation, in order to bring in a post control strategy of voluntary restraints.
Obviously there cannot be cooperation without consultation with labour. Now we know that following the first ministers' conference, and the face-saving move by the Prime Minister (Mr. Trudeau) in establishing the Economic Council of Canada as a monitoring agency, there was in fact no consultation with CLC on a post controls strategy. There was no consultation with the group in this country which is the aggrieved group representing labour. As a result of the work of

the Anti-Inflation Board and the legislation setting it up, there is not a working person in Canada who does not feel he has been badly used by the Board, because his wages have been controlled while prices have been escalating and allowed to continue to rise. Yet there was no cooperation whatsoever, no move to obtain the cooperation of organized labour.
The other day in Quebec one of the commissioners of the Anti-Inflation Board predicted that controls would have to be reimposed. If the truth were known, I suspect that is a very important part of the government's strategy, the reimposition of controls. He identified the reasons for that. He indicated that most of the wage settlements over the past few years have openers in them for January of next year, in anticipation of controls coming off. With inflation running at 8.8 per cent annually, and showing no signs of improving, we expect labour to operate within voluntary constraint guidelines of 6 per cent! That is a ridiculous expectation.
The budget referred to a reduction in provincial sales taxes. It is the major stimulator for the economy in the budget. I will not deal with the controversy surrounding the measure of consultation with the provinces, or more precisely, the lack of it. One major item which is not covered by retail sales taxes in any of the provinces is food. If one looks at the consumer price index, which was released this week for last month, he will find the food component went up by 1.4 per cent. It has to get worse. As the dollar goes down, the price of imported vegetables and produce goes up.
Yesterday the Minister of Agriculture (Mr. Whelan) announced a new dairy policy, which means an increase in the price of most Canadian dairy products. A week or so prior to the latest round of ad hoc reactions to the dairy situation and this annual policy statement, the government decided to remove the consumer subsidy on the price of powdered skim milk. This will result in the government saving $13 million in its budget. Is that a good way to save it? It will be at whose expense? It will be at the expense of the low income earners, fixed income earners, the unemployed, the poor, the native people, and the people of the north who use this product. This will mean the retail price of powdered skim milk will rise by anywhere from 40 per cent to 50 per cent, as a direct result of what the government is doing.
The paradox of all of this is that farm incomes continue to go down. The government will have to react to that situation, given the influence of the Canadian farming community upon the Government of Canada. We can anticipate with certainty that food prices will go even higher, driving up our rate of inflation once again.
Before the summer is out and before the new harvest is in, I predict our rate of inflation will be well in excess of 9 per cent as a result of this push in the price of food. I predict there will be more unrest in the farming community, as farmers demand more and more a greater share, and rightly so, because they have arrived at a point in time today where they are losing money.
April 14, 1978

Of course, the other part of the double whammy is the unemployment situation. We have the second worst performance of western industrialized countries insofar as inflation is concerned, but when you compare our situation with that of the United States, Japan, Germany, France and the United Kingdom in terms of unemployment, our performance is by far the worst. Our unemployment rate of 8.6 per cent is the worst of any of the major industrialized western countries of the world.
If you examine the unemployment figures you find there are some very disturbing features about the statistics. For example, youth unemployment is over 16 per cent, and over 10 per cent of women in the work force are unemployed. That is discounted, of course, by the Minister of Employment and Immigration (Mr. Cullen) because he refers to these people as second income earners. In so doing he denies women who work and the young their opportunity in this supposed land of opportunities.
As the Leader of the Opposition said yesterday, women work in this consumer oriented and inflated society of ours because they have to work, quite apart altogether from their right to do so. Female spouses are working today because it is absolutely essential to family income, and they represent about one third of the female work force.


An hon. Member:: No one questions that.


James Aloysius McGrath: Except the Minister of Employment and Immigration.


An hon. Member:: That is not true.


James Aloysius McGrath: And the Prime Minister. They both keep trying to discount unemployment figures by talking about these second income earners. We have a number of women in the work force today who are the heads of single parent families who obviously have to work to support their families. Obviously the balance is made up of single women who have to work to support themselves, and the young.
What are we doing to our young people, Mr. Speaker? What kind of a country is this when we have a rate of unemployment among people between the ages of 15 and 24 in excess of 16 per cent? Unfortunately that situation will get worse as the current university college year comes to an end and thousands of young Canadians come into the work force looking for the jobs that are so necessary to finance their education, pay off their student loans, and keep themselves during the period of summer holidays. Many of them are graduating from universities and technical schools, highly skilled and trained for jobs that do not exist. The only response we get from the Prime Minister is let them go elsewhere and look for work.
In my own province the unemployment rate is approaching 17 per cent, seasonally adjusted. I am very cynical of that seasonally adjusted figure because it suggests that seasonal workers do not have to work throughout the year in order to
The Budget-Mr. McGrath
supplement their income. Fishermen, for example, have to find work during the winter to supplement their incomes, as do the tourist workers. If you look at the situation in my province in real terms, the unemployment rate is more like 30 per cent.
I heard the Secretary of State for External Affairs (Mr. Jamieson) talk in this House the other day about sales tax and what the 3 percentage point decrease in that tax meant in a province where the sales tax was increased to 11 per cent from 10 per cent. Of course we have the highest sales tax in the country, and naturally this was a reasonable proposition, and any reasonable person would have to agree with him. This means a great deal to the people in a province where the per capita income is the lowest and unemployment is the highest, and where the per capita cost of living is the highest. In that case any substantial reduction in retail sales tax is of major importance.
Not once during the course of that minister's speech did he make any reference whatsoever to the unemployment situation in the province for which he has a great deal of responsibility as our representative in cabinet. Not once did he refer to the unemployment situation in the Atlantic region as a whole, and not once did he refer to the national unemployment situation. This is incredible when you consider he was brought here especially and hastily by government plane from New York to prop up this weak government on national television when it was discovered last Wednesday that the debates were to be carried live across the country. Somebody forgot to tell the minister during the briefing session on the short flight from New York City to Ottawa that we had an unemployment crisis in this country, or that he in fact has a critical unemployment situation in his own province and his own region.
Mr. Speaker, may I call it one o'clock?


Mr. Deputy Speaker:: It being one o'clock, I do now leave the chair until two o'clock this afternoon.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
The Acting Speaker (Mr. Turner):: Order, please. The hon. member for St. John's East (Mr. McGrath) has the floor, and he has seven minutes remaining.


James Aloysius McGrath: Mr. Speaker, I will try and make those seven minutes go by as quickly as possible out of deference to my colleagues opposite. When the House adjourned for lunch I was referring to the intervention-albeit, the flying intervention-of the Secretary of State for External Affairs in this debate last Wednesday. He was brought in especially from New York in order to bolster the sagging image of this government in a debate that was at that particular time being televised live nationally on the CBC. I said, and I repeat, that I found it very strange that my colleague from Newfoundland-

April 14, 1978
The Budget-Mr. McGrath
for whom I have very great respect and with whom I have been associated in politics and in business for many years-could possibly make reference to the province for which he has a great deal of responsibility in terms of Cabinet representation, without making one, single, solitary reference to the number one problem in our province and, indeed, in our country: unemployment.
The minister in not one of his better speeches-on reading it one gets the impression it was a hastily prepared speech; he is a great orator and one of the best speakers of the country-in trying to defend the weak record of this government made reference to our position vis-a-vis the other industrialized countries. He said:
Canada has been recognized internationally by all countries, both developed and developing, as a country which has an excellent record in terms of economic management...
A country which had an excellent record, I might add, in terms of economic management. Then he went on to make a remark about a distinguished officer of this House. I regret that intervention very much. It was out of character for the hon. Secretary of State for External Affairs.
He referred to a nightmare that he had, in which he suddenly found the western industrialized countries, meeting as they are to meet next summer in Bonn to discuss the economies of the western world, and he referred to the President of France, the Prime Minister of Great Britain, the Prime Minister of Japan and the President of the United States, and in the midst of this company who should be in Canada's chair but Joe Who! Presumably he was referring to the Leader of the Opposition. Unfortunately, the minister did not stay in the House very long because, if he had, he would have known, having heard the excellent speech of the Leader of the Opposition yesterday, that here is a man who has the ability not only to give good management to this country, but also to restore Canada's badly tarnished international reputation abroad. When the Leader of the Opposition goes abroad, as he will as the prime minister of this country, he will do so with dignity.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: And there will be no more sliding down the rails of banisters in London-


An hon. Member:: He might fall.


James Aloysius McGrath: -as the Prime Minister did on his first trip abroad as Prime Minister of Canada ten years ago. There will be no more pirouettes like the Prime Minister performed last summer at Buckingham Palace. I was in London with my colleague, the parliamentary secretary to the government House leader at the time. I know he felt a twinge of shame, as I did, to see the leader of our country at Buckingham Palace, with the other distinguished leaders of the western world, acting like a buffoon in the presence of the Queen and of other distinguished statesmen.

There is no doubt in my mind, sir, why Canada's reputation has been tarnished, and why the world no longer has confidence in our ability to manage the economy of this country, with those kinds of shenanigans. It would be better for the Secretary of State for External Affairs to have a dream in which there will be something akin to full employment and equality of opportunity in all parts of this country, in which the war on economic regional disparity would be waged successfully, as it has not been for the past ten years.
The minister himself admitted that a short time ago in Nova Scotia, when he said that the DREE program had not been effective in producing jobs. Perhaps we could all dream. Indeed, we can hope with a reasonable degree of justification and realization that if the Prime Minister has the courage to go to the Governor General and dissolve parliament and take his record to the country, this country will be represented abroad with distinction, with great courage, and great skill by a prime minister heading up a Progressive Conservative government. This will be a government that will, as its number one priority, try to instil some investor confidence in this country.
A Progressive Conservative government will try to stop the flow of capital out of this country. The Secretary of State for External Affairs made no reference to that. He made no reference about efforts to do something for the sagging Canadian dollar which is now supposed to be a floating dollar, but which is in fact sinking out of sight. The sagging dollar is having a direct impact on prices in this country and pushing up the inflationary spiral again. Perhaps the Secretary of State for External Affairs, the senior minister of this government, the senior representative for the Atlantic provinces having the responsibility in this government, certainly for his own province, would, instead of making these negative interventions, try to say something positive in this House for a change-


The Acting Speaker (Mr. Turner):: I regret to inform the hon. member that his allotted time has expired.


Maurice Dupras: Mr. Speaker, I wish at the outset to join the hon. members on this side who rose before me to express my sincere congratulations and my admiration to the Minister of Finance (Mr. Chretien) who was courageous enough to introduce a budget which was welcome in all spheres of Canadian society. It was welcome, Mr. Speaker, by the Canadian Chamber of Commerce as well as by nine provincial premiers. I would like to quote, as an example and as an introduction to my remarks, a communique released by the Canadian Chamber of Commerce the day following the budget speech. I quote:
The Minister of Finance introduced this evening what this chamber considers as a responsible budget.
A little further, in the same communique of the Canadian Chamber of Commerce, it says:
April 14, 1978

We are very disappointed by the fact that it is going to be only a temporary cut.
But it is obvious that if we want this cut to have some effect on the economy, to prevent consumers from postponing their purchases, there must be a time limit and this limit was agreed to by nine provincial premiers and the Minister of Finance, who said that it could be six and nine months. The purpose was to encourage Canadian consumers to take advantage of the provisions of the budget and to purchase goods that they would normally have bought later.
To go back to the press release, Mr. Speaker, and I quote:
This budget will bring down inflation at a time when wage and price control are coming off, and that is important.
Of course, Mr. Speaker, it is very important; the Chamber of Commerce understood all the nuances contained in the budget brought down by the Minister of Finance. And the Chamber of Commerce, this time, disagrees with my colleague and friend the hon. member for St. John's East (Mr. McGrath) when it says that in its opinion, contrary to the forecast of the Minister of Finance for an increase in the gross national product of 5 per cent, Canada will do as well as any other member of the Organization for Economic Cooperation and Development, OECD, and that Canada will increase its GNP by 4.5 per cent. What is important as well, to continue quoting the press release of the Chamber of Commerce, is this:
It is worth mentioning that the budget takes into account regional economic disparities and the Chamber of Commerce fully agrees with the formula selected to finance the sales tax cuts. Let us hope all the provinces will co-operate so that the resulting benefits can reach their citizens.
Finally, Mr. Speaker, a bit further, the Chamber states:
We have also noted the new options being made available to individuals when selecting new investment vehicles for their retirement savings.
Here, Mr. Speaker, we are talking of investments in Canada. And back to the quotation once more:
The expansion of the rules allowing tax deferral on the transfer of farm property from parents to children will eliminate what has been a long standing concern to many of our members.
So that is what the Chamber of Commerce had to say in acceptance of the budget of the Minister of Finance.

But before I go on and deal with the budget, I would like to address myself to the remarks made by the speaker who preceded me, the hon. member for St. John's East (Mr. McGrath) regarding the leader of my party. I think he was referring to a gathering of leaders of heads of governments last year where the Prime Minister (Mr. Trudeau) was among leaders of the Commonwealth. I am sure he would miss the great popularity of our Prime Minister (Mr. Trudeau) with the other prime ministers of the Commonwealth. I have often witnessed such admiration for my leader.
While attending a CPA conference within the last few weeks, I met with ministers and prime ministers who told me
The Budget-Mr. Dupras
how fortunate Canada and Canadians are to have this Prime Minister as our leader. I am sure the hon. member for St. John's East does not want me to pursue this. However, if he wishes to have this parliament dissolve, I invite him to try to influence his neighbour, the right hon. member for Prince Albert (Mr. Diefenbaker), to permit unanimous consent so that this House can deal with an election as soon as possible. [Translation]
Mr. Speaker, the budget is the result of lengthy negotiations and discussions with the Canadian premiers. Earlier today in the House, the Leader of the Opposition and a few other members across the aisle were wondering whether indeed there had been consultations. The Minister of Finance then recalled that as early as October 1977, the premiers were told about those measures which might be considered if there was some degree of acceptance. As explained by the right hon. Prime Minister, most premiers agreed and found that it was a commendable step which would help control unemployment by providing immediate stimulus to the economy.
It has also been suggested that the consultation was not extensive enough, that the finance ministers would have needed a few weeks to take their decision. I do not think the outcome would have been different even if our Minister of Finance had allowed his Quebec counterpart two or three months more to make his decision. It has been shown on several occasions, Mr. Speaker, that the Quebec finance minister is the one who is unable to make a decision.
He does not seem to understand all the fine points of preparing a budget, especially on the national scene. This is why he decided, for instance, not to oppose the proposal of the Minister of Finance (Mr. Chretien). He made no counterproposal and no statement on the proposals submitted to him by the Minister of Finance, and it is only afterwards, the day after the budget speech, that the Quebec finance minister discovered it was something that could be implemented in Quebec, but in his own way and only with considerable changes to the budget proposals.
Mr. Speaker, it is important to understand all the problems that this can represent for us, who must think about the general interest of the whole country and not only of a single province. In this regard, Mr. Speaker, the Minister of Finance has solid support from the Quebec caucus members, and if anyone still has any doubt about this, I can say that our position is based on many facts. With your permission, Mr. Speaker, I would first like to recall certain figures for my colleagues. As concerns the export to other provinces of products made in Quebec, according to available figures Quebec exports to other provinces accounted for 50.5 per cent in 1974 compared with 45.7 per cent in 1967. Let us now examine the importance that the interprovincial market could have for Quebec manufacturers since the budget proposals of Mr. Parizeau seem to neglect this. Quebec producers sell 19 per cent of their products to Ontario alone while only 11 per cent

April 14, 1978
The Budget-Mr. Dupras
of the products made in Ontario are sold in Quebec, and the figures have gone up between 1967 and 1974. If we compare the industrial activities of Quebec as a whole with those of the rest of the country, we find that in 1974, once again, Quebec showed a $1.1 billion surplus in its markets in other provinces. Which industry accounted for this surplus? Mr. Speaker, it was in fact the industries that are called the soft sector, which can be confusing since they are not really soft if we consider the importance of those industries. For instance, our textile shipments to the rest of the country show a surplus of $192 million. The clothing manufacturing industry shows a surplus of $111 million, there is a surplus of $59 million for leather products, a surplus of $503 million for other garments, and a surplus of $134 million for the furniture industry.
Mr. Speaker, I wanted to quote those figures to stress the difficulties that the Quebec industry could face if the budget submitted by the provincial minister were passed. To understand the importance of the Quebec market, let us examine, for instance, the Quebec products consigned to Ontario and the other provinces. If the sales tax on furniture is removed, we would perhaps expect this to affect all the production in Quebec. That is not so. It would affect only 56 per cent of the furniture industry because the rest of the production, or 44 per cent, is exported outside the province. As concerns the leather industry, 42 or 43 per cent of the production is exported. In the textile industry, 43 per cent is exported. In the clothing manufacturing industry, nearly 40 per cent of the production is exported, Mr. Speaker. Will the budget proposals of the Quebec finance minister enable furniture manufacturers to sell more furniture outside Quebec? Or will there be an increase in the 55 or 56 per cent of production now sold in Quebec to justify a budget separate from the national budget? Or are the provisions of the provincial budget going to encourage buyers from outside the province, those who buy our leather and textile products, to stimulate the industry in the province of Quebec?
This morning, during the question period, the right hon. Prime Minister (Mr. Trudeau) emphasized the outlandishness of such an attitude. It destroys the industry in the province of Quebec and stifles its growth by raising a tariff barrier and preventing a certain sector of retail distribution that needs encouragement in the province of Quebec from benefitting from the provisions of the budget proposed by the Minister of Finance (Mr. Chretien).
So, Mr. Speaker, those aspects have not been studied deeply enough and one of the spokesmen, or indeed the only spokesman for the opposition, the hon. member for Joliette (Mr. La Salle), fails to grasp the significance of the problems that might arise from the budget announced last Tuesday by Mr. Parizeau. For instance, he accused hon. members on this side of the House by saying, and I quote:
I heard over the radio this evening a report I hope is true. The report on TV was that a number of members from the Quebec Liberal caucus were meeting this evening to oppose the decision or position taken by the Minister of Finance.

It is absolutely false, Mr. Speaker. And once more he was probably misguided by the media which would be pleased to see a division within the Liberal caucus in the province of Quebec.


Some hon. Members:: That's La Salle!


An hon. Member:: There is no division!


Maurice Dupras: That's La Salle, as my colleague said and as we say in English, it is wishful thinking.


An hon. Member:: There is no division!


Maurice Dupras: There is no division! The caucus chairman already indicated, as I said, that the Minister of Finance has the solid backing of his colleagues as far as his budget is concerned.


An hon. Member:: It is the hon. member for Saint-Denis (Mr. Prud'homme)!


Maurice Dupras: The caucus chairman reminds me it is the hon. member for Saint-Denis, Mr. Speaker.
There was also that question put by the hon. member for Joliette, asking, and I quote:
I ask my friends from the province of Quebec to have the guts to urge the Minister of Finance (Mr. Chretien) to respect the interests of his own province.
Mr. Speaker, this is something I cannot understand, because no later than this morning reference was made to the Canadian government's generosity to the province of Quebec. Someone said: "Oh, the DREE? Oh yes, in Montreal, the DREE is helping Montreal." They should make up their minds, Mr. Speaker. Is Quebec receiving too much from the federal government, or too little? If the hon. member for Joliette is expressing the views of the opposition, if he in fact is suggesting the Canadian government has not been generous enough to the province of Quebec, well, maybe we should settle this issue. Because I often hear discordant voices, references made to the French Power in Ottawa and all the handouts given the province of Quebec that are not available to other provinces.
He truly betrayed some of his colleagues. It is unfortunate he did not take a few minutes to answer the question put bv my colleague from Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) who, having heard such a recital of falsehoods, asked him if he-
... could tell the House the percentage increase in equalization since 1968?
This of course involves payments to the province of Quebec.
I did not compute any Figures, but if my memory does not fail me, this could involve more than $9 billion for 1977, while the figure was $300 million in 1968. Certainly this is a truly significant increase.
There may be different views on the hon. member's party on this side of the House, and among those from the province of Quebec opinions may vary from his, but I would not go so far as to suggest what the hon. member for Joliette indicated about his party when he crossed the House once or twice in
April 14, 1978

1972 and 1973. In any case, Mr. Speaker, I do not think these are words I would like to-


Some hon. Members:: Well, go ahead.


Maurice Dupras: My colleagues are challenging me to repeat. I would rather not quote the words of the hon. member for Joliette (Mr. La Salle). His party favours decentralization, which means weakening the central power. Of course, once again, he cannot see through the scheme of his colleagues who are bent on curtailing the authority of the central government. Let me explain. Of course, if we could reduce the taxation power of the central government, this would benefit two provinces in particular: Alberta and Ontario. As a matter of fact, this would directly affect the equalization payments program. He does not realize that each time the leader and the hon. members of his party advocate decentralization and a reduction of federal powers, they are in fact talking about this program. The main reason why they want to take some of the taxation power away from the central government is to stop equalization payments not only for the province of Quebec, but also for the Atlantic provinces. He has not yet seen through his colleagues' guile and his leader's intention to cut down on the tax power of the central government.


An hon. Member:: Which leader?


Maurice Dupras: Someone asks, "Which leader?"


An hon. Member:: They do not have any.


Maurice Dupras: They may have two to date. There is one who refused to give unanimous consent yesterday so that we could all start campaigning and live up to the mandate Canadian voters gave us in 1974. His refusing unanimous consent is hard to understand. Does this mean the right hon. member for Prince Albert (Mr. Diefenbaker) is apprehensive about the next campaign? Or is it his contention that the present government is doing so well now that its mandate should be extended? Those questions are worth asking. Anyway, in the Province of Quebec as in most of the other provinces, Canadians support this government. We had evidence of that. People appreciated the government's action when, for example, we introduced compensation payments for oil products, which allowed the Eastern consumers in Quebec, the Maritimes, the Atlantic provinces, the province of my hon. friend from St. John's East (Mr. McGrath), to buy oil at Canadian prices. And that does credit to the generosity and understanding of the people in Alberta. I say the same thing in the province of Quebec, Mr. Speaker. This is further evidence of the great benefits of Canadian confederation: a part of the country, a part of the population is willing to provide temporary assistance to another which does not enjoy similar economic benefits.
All the same, this program was first endorsed by the people in Alberta, by their government, to the benefit not only of the Atlantic provinces but of Quebec as well. The figures which were released this morning suggest that by the end of 1978, the province of Quebec will have received $3 billion under the petroleum compensation program. That is quite an amount of
The Budget-Mr. Dupras
money which not only helped people who drive their children to school or to deliver the goods they manufacture but which has contributed to keep our industry competitive, the agri-food industry which is so sick in the province of Quebec and elsewhere, and all eastern industries which have enjoyed a Canadian price as well as the rest of the country.
There are also all the Quebec-Canada programs under which agreements have been entered into with the province of Quebec. I refer more often to the province of Quebec that to other provinces, because I am trying to make my colleague from Joliette (Mr. La Salle) aware of the advantages of the Canadian Confederation. First of all, he is not convinced of that and I would ask him to commend the generous policy of the Canadian government to his colleagues in his party. That is his weakest point. Indeed, he does not manage to uphold the generosity, the openness of mind shown by the Trudeau government for the economic development of the province of Quebec.
I said a few moments ago that agreements representing investments of $200 or $300 million for the province of Quebec have just been signed. These agreements provide for road construction, the creation of parks to stimulate the tourist industry and a set of other measures which I hope will help eradicate the unemployment that plagues mainly Quebec. One could have foreseen, Mr. Speaker, that following the election of a separatist party in 1976, unemployment would strike very hard in my province. No matter how much money the federal government may inject in industry and the public sector for job creation, if the provincial government does all it can, through ill-advised measures, to thwart economic development, there is not much we can do. It seems also that people are encouraged to refuse the kind of work only people from foreign countries, mainly the Caribbean islands, are prepared to do.
Also, Mr. Speaker, if the current slide of the Canadian dollar is deplored by several sectors of our economy, I know of some industries in my riding that are pleased with it. Of course, I would not say that the dollar must stay low or under the 90 cents level compared to the U.S. dollar. But I dare not think of the problems and the unemployment we would have if the Canadian dollar had not been devaluated. In fact, the dollar has not been devaluated, but was subject to the law of supply and demand, and the value of the dollar today, as the Prime Minister pointed out during the question period this morning, is based on the productivity and performance of the Canadian economy.
This allows Quebec industries, some in particular such as fine paper, to recover the markets lost during the strike in the fine paper industry in 1976. This also allows other industries to develop business in the U.S. and in Europe with the hope of retaining such business when the dollar regains its true value which, when compared to the U.S. dollar, is certainly not 100 cents to the dollar. But in the short term, Mr. Speaker, this had definite advantages for Canadian products in that it promotes our exports and job creation.

April 14, 1978
The Budget-Mr. Dupras
Naturally, there are other causes for the fluctuations of the dollar, if one considers, for example, the performance of the tourist industry in Canada, with a deficit of almost $2 billion in 1977, and this could double in a few years if drastic measures are not taken. Mr. Speaker, we should be very happy with the provisions contained in the budget which will indeed help promote the tourist industry.
This leads me to consider the provision contained in the Quebec provincial budget which removes the 8 per cent tax on hotel rooms. The budget brought down by the Minister of Finance aimed at stimulating the economy and creating jobs. The removal of the 8 per cent tax on hotel rooms will only attain those aims in a few years. Allow me to explain, Mr. Speaker. The tourist industry has suffered, especially in Montreal and in Quebec City, from the lack of major conventions. As we all know, conventions are prepared years in advance so that the people who will be holding conventions in 1980 and 1981 have already signed agreements and made reservations either in North America or in Europe. So this tax cut is only window-dressing, because if you look at the facts, it is very impressive, as it will not really prompt Canadians to visit the province of Quebec unless other corrective action is taken and other measures adopted.
There are two other things, Mr. Speaker, which I could say about the Quebec budget, since they are trying by that new scheme to undermine the strong conviction held by the Canadian people that the Canadian confederation is really working well for all Canadians throughout the country. More than ever in Quebec, the people have such a conviction, as I realized Wednesday last, Mr. Speaker, at my nomination meeting. My fellow citizens, my constituents, are looking to the Canadian government which they consider as their own, with which they can hold a dialogue, a government that listens to its electors and the people of the province.
One only has to consider, for example, the treatment given to the Quebec Council of municipalities at its last convention, where all kinds of tactics were used to keep the Minister of State for Urban Affairs (Mr. Ouellet) away, because he had indeed developed a credibility with the civic authorities who found out that this federal minister listened to their grievances and tried by every possible means to help them disprove the arguments put forward by the Quebec premier.
Mr. Speaker, I would like to comment briefly on the decision of a distinguished member of the opposition not to seek re-election. It is no wonder that the hon. member for Don Valley (Mr. Gillies) has decided not to run again.


Mr. Baker (Grenville-Carleton):: Why don't you make your choice for Canada and quit too?


Maurice Dupras: I would make the same decision if I were a member of that party. The hon. member for Don Valley can count on my admiration.


Allan Bruce McKinnon: Like John Turner and Donald Macdonald.


Walter David Baker: Macdonald and Basford are doing the same thing.


An hon. Member:: And Mitchell Sharp.


Maurice Dupras: I know it has not been easy for the hon. member for Don Valley. I know he has had difficulty convincing his colleagues about a few economic matters.


Walter David Baker: Why don't you partake in public service and quit?


Maurice Dupras: That is wishful thinking. I know the hon. member for Grenville-Carleton (Mr. Baker) would like me to quit, but I was re-nominated.


Walter David Baker: You are good for comic relief.


The Acting Speaker (Mr. Turner):: Order, please. The hon. parliamentary secretary has the floor.


Maurice Dupras: Thank you very much, Mr. Speaker. I would like to end my remarks by saying that the Leader of the Opposition (Mr. Clark) needs help. I know he is seeking help from his provincial colleagues. He has consulted them and tried to learn their views on the budget.

Mr. Speaker, the Leader of the Opposition really needs help, and it is not his lack of understanding of the special problems in Quebec nor his support of a separatist budget which will earn him votes in Quebec.


Mr. Alex Patterson (Fraser Valley East):: Mr. Speaker, it is a pleasure to participate in this debate this afternoon. While training for my profession I was counselled not to depend upon the size of a listening audience but to make my presentation as though the whole world were listening. Today I have the opportunity to speak in this debate. I am not sure how many people will listen to me, but there are certain things I would like to say anyway.
Back in October, 1977, when the Minister of Finance (Mr. Chretien) bootlegged a mini-budget into the throne speech debate, the response of this party was that the minister was only tinkering with the system to avoid a full-fledged budget debate. In fact the minister declined to call his mini-budget a budget. He called it an economic statement. Nevertheless, there were some similarities, and perhaps the mini-budget of last October was more like a real budget than the one we are discussing today.
We on this side felt that the minister's response last October to the economic realities of the country was completely inadequate. Since last October whenever we on this side of the House have called for firm and decisive action, the minister's response has been to say that we have to wait until we see the results of the measures introduced last October. We have been told we have to wait until the results of those measures trickle down and it becomes obvious as to the extent to which the

April 14, 1978

proposals are effective. At one point the minister even tried to insult the intelligence of the Canadian people by suggesting that the measures announced by his predecessor, Mr. Macdonald, on March 31, 1977, had not yet taken effect. I suppose if those measures did not take effect, certainly the ones introduced last fall could hardly be expected to produce results today.
The minister has made his first legitimate budget statement in this House, and as my leader pointed out so aptly yesterday, it was the minister's first and last budget. We find ourselves in the same situation we were in previously. The minister has tinkered here and fiddled there, with the same lack of commitment and the same ignorance of economic reality. The same thing happened in March and in October of 1977. It has been said that Nero fiddled while Rome burned, and I think possibly it would be appropriate to say that in this instance Chretien tinkered while Canada tumbled.
Nothing illustrates more the utter bankruptcy of this government's policies than the tumble of the Canadian dollar on the world money markets. This has been more pronounced even since the minister made his budget statement a few evenings ago. The morning after the budget announcement, the dollar sank to a low of 87.57 cents. Then it continued to tumble downward to its current level of 86.79 cents in terms of the U.S. dollar as of noon today. This indicates in a frighteningly dramatic way that the international community of economic experts have no confidence whatever in the government's ability to meet the serious problems facing our nation at present.
While I am on this point may I just say that Canadians should be outraged at the way this government has handled the decline of the dollar. It is bad enough that the dollar has fallen, but in the long slide from its former level to its current level Canadians have lost between $1 billion and $1.5 billion. This is money wasted, and I say Canadians should be outraged. On the one hand, the Prime Minister (Mr. Trudeau) says we have a floating dollar, and this was stated again by the Minister of Finance, and on the other hand the Minister of Finance pours $1.5 billion down the drain to keep the dollar from floating. It is precisely this kind of indecision and dishonesty on the part of the government which causes lack of confidence in the Canadian dollar.
I believe it is time the Prime Minister and his government came clean with the Canadian people on this issue: do we have a floating dollar or do we not?


Mr. Sharp:: Yes.


Alexander Bell Patterson: If we have a floating dollar, then why go to the trouble of trying to prop it up and, by this means, keep it from floating? Someone said yesterday that the dollar has been floating. It has been sinking until today, and if you want to see it, you have to wear goggles and a snorkle. Perhaps we should consider that. Perhaps it is time to put away the
The Budget-Mr. Patterson
wishy-washy economics of expediency and introduce some basic directional changes.
All of our reputable domestic economic analysts were in agreement prior to the budget's introduction that a complete structural turn-around was necessary in our economic and fiscal policies to restore confidence in our national economy, get the country working again, and stem the tide of spiralling inflation. In this task the minister has failed miserably. All he could do was just to tinker around with it. I think we could say that Macdonald the thumper has been replaced by Chretien the tinker.
I say that structural changes are necessary in this country, but there appears to be no desire on the part of this tired, aging, weak government to put any direction into our national economy. The government has been preoccupied with many other matters, in fact so preoccupied that it has no time or desire to pay attention to the critical economic matters facing us.
I remember that for months the government trumpeted the idea that, after all, the major problem in Canada was national unity and that, if we were to achieve national unity, it was going to be by the implementation of linguistic policies, and everybody had to accept that. The responsibility and the blame were placed upon the English speaking people of this country, and the result was a great deal of resentment. But in later times, when things began to get pretty tough and the Prime Minister came alive, he and some of his ministers began to say that, after all, the most important problem facing Canada was the economy. I am not just sure what they think is the most important problem. The Prime Minister has been too concerned with the language policy and with other matters concerning the contractual link with the European Economic Community. He and his ministers have been determined to change the social structure of Canada and to change the moral values of this nation. They have been too busy with these things to take care of the fundamental problem that confronts us, namely, that if we cannot solve our economic problems we will not have the occasion to take care of our country in the long run.
We come to the conclusion then that after looking at the picture as it has developed, an exodus of supporters of the government has begun, and an exodus of cabinet ministers, which is very significant. My friend, the hon. member for Labelle (Mr. Dupras), was talking about the ones who have decided not to run for the Conservative party this time, but I ask him why has John Turner left, why has Paul Hellyer left, why have many others left, such as Don Macdonald, for instance? Were they unimportant individuals? Did they not count in the make-up of the cabinet or in the make-up of the party? Where did they go and why did they go? How can the government go to the people and tell them "return us", when many of their most important, influential and able ministers could not stand it and left?


An hon. Member:: They are left with their disabled.
4524

April 14, 1978
The Budget-Mr. Patterson


Alexander Bell Patterson: It is quite evident where the lack of confidence is. They just could not see themselves supporting the lack of policies that had characterized this government, so they pulled out and said they were not going to waste their time.
I should like to call attention to some of the promises that were made by this government. I think of one in the 1974 election campaign, about transportation. I know that there is a reference to transportation in the budget speech, but if it does not mean any more than the promise that was made in the riding of Fraser Valley East some years ago, then nobody can look forward to getting any results from it. I just mention the fact that at that time the Prime Minister stated that there would be a rapid transit system put through the Fraser Valley to Vancouver. I know that this promise was made in order to try to prop up the Liberal candidate, but when I raised the issue in the House of Commons I was told that such a promise had not been made. Well, I will leave it to the people of Fraser Valley East to decide whether or not the Prime Minister made this promise. Certainly it was made in the Fraser Valley, it appeared in the papers, and yet we have not seen it fulfilled.
The agricultural community in Fraser Valley East and in other parts of B.C., as well as in some of the other western provinces, have given up hope that the government will fulfil its 1974 promise to adjust the freight rates so as to bring justice and fairness to the movement of goods between eastern and western Canada. I am glad the Minister of Transport (Mr. Lang) is here because this matter has been brought to his attention on a great many occasions. Those engaged in secondary industries and in the processing industries are facing insuperable problems because of the fact that the freight rates are loaded against them. The result is that they are suffering economically because no attempt has yet been made to take any remedial action in this regard. Conferences have been held, promises have been given and glowing statements have been made regarding what was going to be done in order to assist in the development of western Canada and the development of secondary industry, but we have not seen them yet.
I intended to call attention to another matter yesterday, but because of lack of time I did not raise it. Again this morning I was unable to do so. I should like to make reference to the dairy situation in the province of British Columbia. Representations were made by the Fraser Valley Milk Producers Association a few days ago. They pointed out the need for some changes as far as dairy policy is concerned. They pointed out that the provincial market shares of the national quota of 100 million cwt are as follows: British Columbia, 3.1 per cent; Alberta, 6.7 per cent; Saskatchewan, 2.5 per cent; Manitoba, 3.9 per cent; Ontario, 31.4 per cent; Quebec, 48 per cent; the maritime provinces, 4.3 per cent.
As far as British Columbia was concerned, even though there might be some justification for it when the quotas were established in 1971, changes have taken place. The population of British Columbia has grown tremendously. The consumption of fluid milk has grown and is continuing to grow. British

Columbia is self-sufficient, as far as fresh milk is concerned for the fluid trade, but it produces only 20 per cent of its industrial milk needs. The document went on to indicate that approximately nine million cwt of milk is produced in British Columbia. About six million cwt is sold on the fresh market, and the balance of three million cwt is the market share quota of British Columbia. This is the total allowable amount of industrial milk which can be produced in British Columbia, as established by the Canadian milk supply management committee several years ago.
Another statement referred to the fact that it is important that the market for semi-fluid products be allowed to grow and that milk production in the province of British Columbia be allowed to expand in a relative fashion. Also the document indicated that industrial milk plants at Abbotsford and Sardis should be increased to enable them to maintain viable plants with trained staff in order to meet the needs of the dairy industry in British Columbia.
I should like to ask the Minister of Agriculture (Mr. Whelan) the following question: In view of the fact that fluid milk consumption in British Columbia is increasing, and in meeting this demand there will of necessity be an increase in the production of milk, will he consider the desirability of recommending the granting to that province of a higher percentage of the provincial market share quota, or through another mechanism, in order that the industry will be permitted to expand within its industrial production? I think this request is very valid. Because of the changing circumstances and situations, provision must be made for the expansion of that industry in British Columbia.
Another question I should like to ask is: As surplus milk must be of sufficient volume to allow for the maintenance of an adequate processing facility and trained staff, and as all such milk produced on the lower mainland of British Columbia and Vancouver Island is processed by the two Fraser Valley milk producing plants in Abbotsford and Sardis, will the minister call upon the Canadian Dairy Commission to call a meeting of the national supply management committee at the earliest possible moment to resolve this problem which is affecting seriously the British Columbia dairy industry?
The agricultural producers of British Columbia are working under enough handicaps, some of which I have pointed out. The time has come when greater attention must be given to some of these matters, rather than the matters which seemingly take up so much of the government's time.
As we are considering the other matters in this debate, and as we look at the various needs which have been brought to our attention, it is incumbent upon the government to make a serious attempt to remedy the situation which has developed and which is continuing in this nation. Some semblance of reality must be brought into the entire picture. The government has not acted in a manner which will produce the results we require or solve the problems facing us. Instead of spending so much time on other matters, the government should give attention to the basic problem of dealing with the fundamental issues before us. Budgets to help solve those problems should
April 14, 1978

be brought in. They should meet the needs and answer the requirements of Canadians. In view of the promises made and not kept, how can the Prime Minister expect anyone to believe the promises he has made now and will make in the future?
May I now say something about the sales tax cut announced by the Minister of Finance. Yesterday the Prime Minister told a press conference that negotiations had been ongoing with the provinces for weeks and weeks on the issue of sales tax cuts. He reprimanded the Quebec minister for coming up with a new suggestion on 24 hours' notice. The actual truth is the four western premiers felt so strongly about the lack of consultation by the federal government in this move that they issued a joint statement last night criticizing the Minister of Finance for his unilateral action. Where is the truth in what the Prime Minister told the press yesterday? There is a misunderstanding somewhere. Someone is not stating the clear facts. I prefer to believe what the western premiers have said. The consultation referred to was far from adequate. Their representations are worth careful consideration by the government in this respect.
The net effect of the budget of the former minister of finance, and the mini-budget of October presented by this Minister of Finance, has been rising unemployment and spiralling inflation. If the House is sitting in the coming weeks and months, we will continue to hear the old song by the Prime Minister and the Minister of Finance that the measures have not taken effect yet and that we should give them a chance to work through the system. How long do Canadians have to wait? How long does it take to bring about economic sanity? One gets the impression the government is just biding time, waiting for something to happen. They used to blame the weather for our economic ills. Then it was world conditions. For a while it was women and young people who were the cause of our problems. At his press conference yesterday, it is my understanding the Prime Minister announced it was the world again. The government can go on biding its time, but the situation will not improve, not under this administration.
The only solution is to proceed in the manner the country has been looking for, which is an election. An election will result in a change in administration and bring in a government headed by the hon. member for Rocky Mountain (Mr. Clark), who will meet this challenge and bring sanity, guidance and leadership to the country. My leader spoke very eloquently yesterday in outlining some of our party's policies to meet the challenges of our country, including a five-year development strategy to achieve some of those structural changes to which reference has been made. He referred to our proposal to put more investment into food production and food processing, to accelerate the development of our nation's oil sands and heavy oil reserves, to construct a reversible pipeline from the west to Atlantic Canada, to rebuild the fishing and ship building industry in Atlantic Canada, and to upgrade the loading facilities in the port of Vancouver.
My leader also referred to permanent tax cuts of $300 per person to help stimulate demand and production. He referred
The Budget-Mr. A. Lambert
to our policy to freeze public service hirings and thereby cut the public service. He expressed the importance of sunset laws which should be introduced. He referred to a freedom of information act that would be brought in by a Conservative government.
He also outlined our policy to assist small business, which is the backbone of our economic system, and to approve income tax to a limit of $5,000 per year to encourage Canadians to invest in Canadian small business. In view of the fact that small business activity is the backbone of the Canadian economy, providing at least 60 per cent of the job opportunities in the nation and contributing a huge slice of the tax revenue to the public coffers, and in view of the contribution that has been made by the small business sector of our country, I believe this government ought to take the challenge more realistically and come up with something that will be of advantage and benefit to those who are struggling to keep their operations going, sometimes having to work double shifts themselves in order to meet demands made upon them by governments in the way of statements, records, reports and so on. There ought to be some realistic programs outlined which will bring some assistance to these hard-pressed businessmen who are struggling to make a go of it in Canada.
These are good policies and a few of them have been outlined here this afternoon. They are economically sound and are needed to put this country back on the road to recovery. Again I suggest that the only solution is an election. This will decide how many of those wonderful people from the other side will be back here. I think a lot of them will run but will not be back. We will miss them, sure, but there will be others who will take their place, who will be able to contribute in a superior manner to the debates and discussions that go on in this place, and make their contributions to the preparation of policies that will be of tremendous value and importance to the economy of this country.

Mir. Adrien Lambert (Bellechasse): Mr. Speaker, on this quiet Friday afternoon I would like to comment briefly on the speech made Monday night by the Minister of Finance (Mr. Chretien) when he introduced the new budget. While I was listening to him, I got the impression that he was a member of a new government because, at the beginning of his speech, he was more or less condemning his predecessor's policy. Is not that playing fair? He said that our gross national product has gone down from 5 per cent in 1976 to 2.6 per cent in 1977. It is a fact everybody is aware of, but to recognize it in his speech, particularly in his first real budget speech takes, I think, a lot of courage.
He also said that the number of unemployed young people has increased. We now have over one million unemployed in Canada. We should not be proud of that. It is a crying shame to have so many healthy people without work. There is a saying that applies here: idleness is the mother of all vices. No wonder delinquency is on the rise in Canada. An able-bodied
80033-73'/2

April 14, 1978
The Budget-Mr. A. Lambert
man who is idle will sooner or later get into mischief. This is human. All the same, I should like to emphasize the good points of this budget, because it has its good points. It would be unusual if it were all bad. For example, pension plans have been improved. I think this is a beneficial measure which will benefit a number of people who have the means to invest in a pension plan. But obviously, for the great number of unemployed, it will not change much.
There is another point on which I agree, the changes proposed to the incorporated family farms which will allow farmers to enjoy a tax provision which did not apply to them before. Those are excellent measures.
As for the provisions related to industrial development, to energy and railways, they are necessary and will certainly benefit some people, but I am very skeptical as to their ability to deal with unemployment in the near future. What I find amazing with this government is their capacity to bring forward all kinds of minor measures which are good in themselves, along with their incapacity to bring forward any major responsible measures designed to deal with our most serious problems at present: unemployment and inflation. Of course when your hands are tied behind your back by financiers, as I said today to the Minister of Finance, it is difficult to get the job done. That is where the real problem is, in my view.
When it comes to social measures, the government has come up with challenging suggestions. I must say at the outset, as I pointed out a moment ago, that the tax free transfer of family farms has been extended to farms registered as corporations. We have been demanding this for a long time. The government has finally understood the validity of our case. I am sure this measure will encourage young people to go into farming.
We must encourage young people if we want them to maintain their interest in agriculture and save this basic industry that Canada needs. I am seriously concerned, Mr. Speaker, about the declining number of young people who should be interested in farming and in the agricultural industry. Of course, if all our policies result in a massive transfer of our youth from rural to urban areas, it is obvious that time will come when we will find ourselves in a very unfavourable situation in comparison with a number of countries. If we have to import too many food products to satisfy our needs, we will of course become dependent on others. The situation would then be much worse than it is today. On the other hand, I think this policy should help, at least I hope so, in limiting the rural exodus and should be an incentive for our young farmers to keep them interested in this vital activity, farming and farm production in Canada.
I would like to point out in passing-I did so briefly yesterday-that the Minister of Agriculture (Mr. Whelan) has finally told farmers as well as industrial and fluid milk producers what the dairy policy of the government is going to be

for the next few months. I was pleasantly surprised to see there were some aspects which I have been advocating all along and which are finally being implemented in our policy; the period change, the new dairy policy schedule. I received the official release only this morning, I had the opportunity to review it thoroughly and today I made a point of mailing many copies to producers who have been asking me questions on this matter for a long time. I think it is my duty to help inform people of legislation which might be beneficial to them. And it is also my duty to make suggestions to the government. I would like to take advantage of the budget debate to make one, I would like the government to study seriously the possibility of providing in its policy, in its financial policy, a rebate on some farm products or on some Canadian dairy products with a view to promoting the consumption of these products in the country and second, increasing the purchasing power of consumers and needy families. Mr. Speaker, this is nothing new. Through its legislation, through the propositions made to the provinces to pay compensation as an incentive for reducing or even abolishing retail sale taxes, the government is already doing that.
It would be much easier for the government to proceed directly under the federal jurisdiction; the same purpose would be achieved with less confrontation. In fact, Mr. Speaker, this discount will increase the consumer's purchasing power, but he is the one who decides on what goods he wants a discount, because, after all, the consumer is always right and he is the one who chooses the products he wants to buy.
We established that policy, as I already stated in this House, a few years ago, under a minority government that had the good idea to comply with the requests of the people, and it was of particular benefit to the families. During several months, more than $181 million were distributed without any confrontation, but today with the federal approach of urging the provinces to cut their sales tax, we saw what happened in the last 24 hours. The Quebec government has decided to apply that cut in the weakest sectors. In other words, when I buy $1 item in Quebec, I must now pay $1.08, and under the policy announced in the budget, the consumer will pay only $1. Then, this is a discount on the retail price but it has been transferred from the federal to the provincial jurisdiction, and this is the cause of the present confrontation. It worries me so much that I warned today that we should proceed carefully and sensibly, if we want to avoid constitutional crisis.
Now, I do not think that this government will solve the problem through the proposed measures. The federal government will compensate a part of this cut will a $11.5 billion deficit, which means that future generations will have to pay for our present spending because this budget increases our deficit, our national debt, by $11.5 billion. Sooner or later, we shall have to find a means of repaying that debt. This is what I call a debt system. If that system is good, it will give good results, as a good tree bears good fruits and a bad tree bad
April 14, 1978

fruits. You judge a tree by its fruits, everyone knows that, it is in the Scriptures. So we can judge a system by its results.
Mr. Speaker, this system takes us on a very dangerous course. Although in the 1978-1979 budget, there seems to be an effort to protect the individuals and the taxpayers at the same time, the extraordinary thing is that in fact a heavier tax burden is being placed upon them. One just has to look at the budget to see it! In the budget, which has been in effect since April 1 the increase in the personal income tax is of about $1.34 billion; while the increase in the corporate tax is only of about $495 million. We have been asking for a review of the tax structure for a long time now in order to reduce the tax burden on the individual, we have been asking for a fairer distribution in view of the fact that 60 per cent of Canada's revenues are in the hands of multinational corporations while the remaining 40 per cent go to the individuals. It is imperative to strike a balance because it is the little man who is paying for the big shot. We make sure that the rich get richer and the poor get poorer.
That is why I would suggest, in order to bring about a fairer and healthier administration, a measure which comes under federal jurisdiction, namely a cut in the sales tax on building materials. The provinces could not say a darned word about it since it is a matter of federal jurisdiction. In this way, we would increase the income of families and individuals without the risk of a constitutional crisis as the one which is forthcoming. We would give the building industry a boost and that sector of the Canadian economy could start out with greater enthusiasm.
Builders and contractors could use their equipment, workers in every building trade could go to work, and automatically the government could derive revenues from their income tax, according to a well-known formula, and automatically the wheels would start to grind again without anybody being hurt.
Mr. Speaker, there is also another sector involved. I remember, and this was repeated once more yesterday by the Minister of Finance (Mr. Chretien) when I asked him whether he would not be ready to study another method of financing the public sector so that private savings, the savings of private citizens be left to the private sector so it could use them to cover its financing needs, and the federal government in turn could get its financing requirements by creating new money, because the government's purpose is to increase the money supply for those who need it. Since this is a worthwhile purpose, why not, as I said yesterday, at least give serious consideration to the possibility of replacing the debt-oriented system of the public sector by a more social kind of credit system, putting the Bank of Canada to work as it were, increasing the money supply to the extent that discounts would be used by consumers not haphazardly but to the extent those people would buy, to the extent consumption would go up, to
The Budget-Mr. A. Lambert
the extent they would take advantage of the available discounts. There, Mr. Speaker, you have the regulating factor.
Yesterday, the Minister of Finance told me he had studied that in 1963 and he had found it absolutely impossible. Well, how often have I not been told that if this monetary theory were to be used, there would be inflation in Canada. There would be unemployment, there would be chaos. But what is the situation in 1978? Do we have inflation? Do we have unemployment? Do we have chaos?


An hon. Member:: It would be worse.


Joseph Adrien Henri Lambert: An hon. friend over there says it would be worse. Maybe it would be worse, but is it not "worse enough" already? It has also been said this would force the Canadian dollar down. This is said derisively, but there is nothing funny about that. It is awful to know the Canadian dollar now trades at 87.2 cents. It is terrible to see that our dollar is down to 87.2 cents today. Were that to happen under an administration headed by people like me, who believe in Major Douglas' political and economic theory known as Social Credit, we would be charged with all the sins of the world.


Miss Begin:: For sure!


Joseph Adrien Henri Lambert: Yes, and it would make you happy. But this time, it is your own administration, your own system of credit, of debts, and it is terrible. Listen to this carefully: in 1975-you are laughing, you think it is funny, but the young people, tomorrow, will judge you harshly. It is not very funny. In 1975, Mr. Speaker, our debt as Canadians, at the federal level, amounted to $19 billion. We could live with the interest on that debt since that debt went as far back as July 1, 1867. But three years later, to the officials of the Department of Finance, at the meeting held to brief us before the budget speech on Monday night, I put the following question: What is at present, as of March 31, the net debt of Canada? It took them some time to check it up.
Finally they found that it amounts to $39,800 billion. It more than doubled over three years. What outstanding achievements have we to show for it? What great things, Mr. Speaker, what have we accomplished, Mr. Speaker, to justify more than doubling our debt? Have we had to spend enormous amounts of money on National Defence to ensure the safety of our borders? Of course not-yet our debt has doubled. We started on our new budget on April 1 and we are told that our deficit will be about $11.5 billion, which will increase the debt in Canada to $51,300 billion. Let us think about it seriously, the way things are going, we are accumulating $31 million debt each day, and we cannot afford to give the Minister of Employment and Immigration (Mr. Cullen) who is here now, more money to increase the number of very good programs such as Young Canada Works. We have-


Mr. B6chard:: On a point of order, Mr. Speaker.

April 14, 1978
The Budget-Mr. A. Lambert


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member for Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) is raising a point of order.


Albert Béchard: Mr. Speaker, would the hon. member for Bellechasse (Mr. Lambert) allow me a question?


Joseph Adrien Henri Lambert: Certainly.


Albert Béchard: Mr. Speaker, at the beginning of his remarks the hon. member for Bellechasse referred to the total debt of Canada and said: Do we have a navy? Do we have this or that? The hon. member for Bellechasse knows the answer to those questions but is he aware that all Canadians, among other benefits, receive free medical care? Does he consider the health of the Canadian people as a national debt?


The Acting Speaker (Mr. Ethier):: The hon. member for Bellechasse has the floor.


Joseph Adrien Henri Lambert: That's a very good question, but that's not the area which gets us in the red.


Miss B6gin:: We'll come to it.


Joseph Adrien Henri Lambert: The Minister of National Health and Welfare (Miss Begin) says that we'll come to it. I am looking forward to discussing it. After all, that is what parliament is all about. That's why we are here. We are here as members of parliament, as representatives of our constituents to deal with their problems. If, hon. members on the other side are able to justify such spendings, good for them, but it will take a lot of efforts on their part to convince me because if we really tried, if we were serious about our responsibilities, if we did our job, things would be different. We are under the control of monetary powers, and while we run into debt, while we make hundreds of thousands of unemployed, the financial institutions get richer. They have made record profits since 1967. Has this been considered?
The hon. member for Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) made a comment. He asked me a question to which I would like to reply very seriously. I know that the federal government shares the responsibility for public health with the provinces. It is not in this area that we have serious problems. I would like to have truly meaningful figures. Let us be serious. In 1977-78, servicing the debt, or the interest that we must pay, cost $5,425 million, and in the present budget it amounts to $6,650 million, or an increase of $1,225 million. The interests on this debt do not go mostly to Canadians. Foreign interests own $106 billion of our debt and they are the ones who get the interests, even though we could make other arrangements. There is no risk in trying. Some may say that if we change our public financing system, perhaps the Americans, the Italians or the Germans will not like it, since they are
the major source of our borrowing. I cannot understand how a country like Germany, which suffered complete defeat in two world wars, can lend us money 30 years later. We are indebted towards Germany. The victor is indebted towards the vanquished. Such a situation is unthinkable.
What do we suggest? It is not enough to criticize, we must also suggest alternatives. Answers have been found elsewhere. The June 28, 1977 issue of Le Devoir, people also think about finance elsewhere, refers to interest-free bank loans with charges limited to administration costs. This has been done. This article says:
The bank charges its borrowers only its own costs. It is a commercial business like any other which is trying to prove that it is possible to increase its capital without charging interests. Loans of more than $63 million have been granted to Turkey, Algeria, Jordania, Sudan, Bangladesh and Somalia.
Good heavens, if that is possible over there. I recently heard the Prime Minister say in reply to a question put by the hon. member for Temiscamingue (Mr. Caouette), that if you can find us a lender who will lend us money without interest, we are certainly prepared to administer the country that way. Mr. Speaker, our Prime Minister is much smarter than that. He knows the financial side of things from A to Z. He knows it very well, but he feels incapable of letting go.
That is why it is our duty, and your duty on the government side, on the side of the majority, to do your utmost to advise the Prime Minister, so that he finally decides to table the bank act, which we have been waiting for two years. You know it on the other side, you are well aware of it. Mr. Speaker, this act which should be before parliament and which we should consider and pass after amending it by removing section 72, which gives the banking system-I am not speaking of individuals, but of the system-which gives the banking system, the power to cash in on the credit of the people, a credit which is created by individuals, by Canadians and not by banks, to cash in on the credit of the people through private institutions to get the country into debt, to get the public sector into debt, that, in my view, is criminal. Our credit should be cashed in by-


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


Monique Bégin: Mr. Speaker, if I have correctly understood the speeches and remarks of the two parties of the opposition I have heard so far during the budget debate, Canadians did and won almost nothing in the last decade, or even over the last fifty years and the government did nothing for Canadians that is any good. As far as I can see, it seems all our social programs are worthless, and I have reached the stage when I should have liked to hear the hon. member for Bellechasse (Mr. Lambert) talk about them, but he got lost in his monetary theory which unfortunately did not enlighten us-

April 14, 1978


Joseph Adrien Henri Lambert: 
Joseph Adrien Henri Lambert: Not lowering-


René Bégin: -to 60 the age of retirement which would automatically cost $2 billion more a year. Everyone is in favour of it. That is not hard. But we are still waiting for the $2 billion. We want to know where they will come from. Yet, we have not heard anything about that.

As to the official opposition, from what they have been saying up until now, all their attention is fixed on the fact that 8 per cent of the labour force is unemployed rather than on the fact that we have by far the best record of job creation in the western world. Of course, I am not saying it is acceptable to have 8 per cent of one's population unemployed.


An hon. Member:: It is for this government.


René Bégin: No. It is not. But this government takes care of its unemployed. No one has referred to the fact that Statistics
The Budget-Miss Begin
Canada recently released figures showing that 82 per cent of Canadians find their work enjoyable. Only 4 per cent find it unpleasant. Society is not as sick as the opposition wants us to believe.
We keep hearing of alienation, fear, insecurity and bankruptcy. The Tory party even wanted us to opt out of Canada.
It is absolutely incredible.
We hear from those who have never been unemployed that our unemployment insurance program is too costly and needlessly generous. We hear it said-falsely-that in order to restore the work ethic, which in truth Canadians have never lost, we should go back to exploiting our many marginal workers for the sake of the affluence of a few. In short, I get the impression, which is far from the truth, that the quality of life in Canada is unpleasant and has deteriorated sharply over the last decade.

Mr. Speaker, nothing could be further from the truth, and the general thrust of the opposition's criticisms so far in this budget debate shows a lack of direction in their thinking. Incidentally, the same is true regarding many other areas, but especially in the social policy domain, the intellectual irrelevance of the suggestions heard is particularly striking.

In the six months I have been in this portfolio, I have observed that the Tory opposition has no coherent social policy. It has no comprehensive social policy whatsoever. For example, the hon. member for Brome-Missisquoi (Mr. Graff-tey) proposes more welfare funding. The hon. member for Kingston and the Islands (Miss MacDonald) advocates the availability of spouses' allowance to all women between the ages of 60 and 64. The hon. member for Athabasca (Mr. Yewchuk) proposes more funding for medical research while at the same time he opposes any form of income support program. The hon. member for Dauphin (Mr. Ritchie) said that by providing the Canada Pension Plan, old age security, the guaranteed income supplement and medicare we have gone too far. What a melange! What a social policy! At the same time the hon. member urged the government to spend more. The hon. member for York-Simcoe (Mr. Stevens), the official critic on these matters, demands that the federal government cut spending by $2 billion. One wonders.
The general thrust of the opposition's criticisms in the social security and social policy area is that Canadians generally do not like to pay taxes for social security programs since expenses in that area are wasted money and useless. They often suggest that social programs are partly responsible for the excessively high level of government expenses, which creates an unacceptable rate of inflation.

When the opposition speaks of slashing more and more deeply into government spending they are really talking about
April 14, 1978

The Budget-Miss Begin
cuts in our social programs; and cuts in our social programs will very soon be reflected in a diminution of the quality of life which Canadians have the right to expect. I am delighted to note that the vast majority of Canadians do not agree with the Tory opposition on that proposition. A Gallup poll survey carried out for the Anti-Inflation Board and reported two weeks ago had determined that only 7 per cent of the people blamed the government's social programs for inflation whereas 63 per cent blamed business or labour. Canadians believe in their social programs for the simple reason that they work. They have worked well enough to improve very substantially the quality of life in Canada over the last decade and they can be made to improve it still more in the years ahead. But they will do so only if we retain the steadfastness and good sense to maintain our balance in face of the shrill cries of a tiny minority who would diminish the quality of life of the majority simply because we live in times of economic uncertainty.
Perhaps I could best illustrate what I mean by referring to levels of poverty in Canada. I will certainly not stand here today and claim we have solved the problem of poverty. We must do much more to improve the share of the national income going to our poorer people.


Stanley Howard Knowles: Hear, hear!


René Bégin: I am pleased the hon. member for Winnipeg North Centre (Mr. Knowles) is here.


An hon. Member:: He is always here.


Monique Bégin: I would also claim that the effect of our social programs on income distribution has been far better than has been generally acknowledged. As the Prime Minister (Mr. Trudeau) has pointed out in this chamber, progress against poverty, with poverty defined in terms of having an income below some barely minimum acceptable floor, has actually been quite dramatic over the last decade. According to the measure used by the Economic Council of Canada, only about 10 per cent of Canadians are poor today compared to about 20 per cent in 1967. One could dispute the measure used by the Economic Council and turn to the Senate report on poverty or some other measure, but the fact remains that the percentage of people living in absolute poverty in Canada has diminished tremendously, almost by 50 per cent, in the last ten years.
What I was discussing when I spoke elsewhere of relative poverty was another concept. I spoke of the share of money income going to the poor compared to the share going to other groups in society. I said the proportion had not changed appreciably. If one uses that measure, it can be said we have simply kept pace. The poorest 20 per cent of Canadian families and individuals currently receive about 6 per cent of our money income, while the proportion of revenue to which they have access-this should be noted; it was not mentioned by the hon. member for Winnipeg North Centre when he questioned the Prime Minister-would, in the absence of government transfer, have been only about 1.6 per cent.


Stanley Howard Knowles: It is still far too low.


Monique Bégin: It is always too low. We are pleased to see we can count on the support, as so often in the past, of the New Democratic Party as expressed by its official critic in this field.
Earlier today, the hon. member for St. John's East (Mr. McGrath) said that when the government took office ten years ago the total budget amounted to the extent of the present total anticipated deficit. In passing, may I mention that he was supposed to have talked about social policy but we did not hear a word about social policy during his speech. Let me remind him and his hon. friends of the situation surrounding government spending ten years ago by comparison with what Canadians receive, what they have at night when they go to sleep. They often fear, eventually, insecurity as a result of being handicapped or suffering the effects of an accident, disease, sickness, a catastrophe in their family life, or any other uncertainty, including unemployment and even, in a sense, maternity-any risk to their jobs. Let us compare the situation ten years ago with the situation now and figure out why there is a deficit, one which, as I suggested in the other official language, is not frightening to Canadians because they realize that their government must bring in an expansionist budget to deal with a difficult economic situation.
In January, 1967, old age security benefit amounted to $75 a month, and that was all that was provided. Today the old age security payments are $153.44 a month and guaranteed income supplement of $107.62 is also available to those who need it.


Stanley Howard Knowles: You are a month behind. It is $156.66 now.


An hon. Member:: But what are those dollars worth?


Monique Bégin: Of course, payments are indexed to the cost of living; an adjustment is made every three months and these amounts have been higher since April 1. There is also a spouse's allowance of up to $249 a month for couples where one partner is over 65 and the other between 60 and 65. In 1967, family allowances were $6 per month for children up to nine years of age. Now they are $25.68 on average, at $308 a year as against $72 ten years ago. Unemployment insurance payments were $25.96 per week in 1967. We have been fighting to improve payments in the face of criticism from many people who have never been unemployed, but they currently amount to $160 a week. I am talking, of course, of the ceilings.
I do not think that is too much when we consider the number of people who support dependants. All these programs have contributed at least to ensuring that the income of Canada's poor did not fall any further behind that of affluent Canadians in recent years.
April 14, 1978

[ Translation]
At this point, Mr. Speaker, I should like to remind my colleagues that a few years ago, none of us knew the word indexation. It was a technical word that was not part of the member's vocabulary, not to mention the public at large. Yet, only three, four or five years later at the most, everybody uses this word; everywhere, in the streets, between neighbours, in the daily newspapers, people discuss the concept of indexation which has been built into most of our social programs and must quite obviously be financed one way or another. I for one believe it is a progressive concept that should not be lost in times of economic uncertainty, when some people panic and question the universality of some of our programs or their indexation to the cost of living or to some other measure of monetary depreciation.

Furthermore, despite the stability of money income shares, the Prime Minister, when talking about the definition of poverty in Canada, pointed out that absolute poverty has decreased by about 50 per cent in the last ten years. There has been progress in closing the gap between rich and poor which can be identified. Income distribution statistics hide important changes in the distribution of non-money income and in the impact of taxes. Government actions in both these areas have tended to reduce the gap between rich and poor families.
Since World War II federal and provincial governments have co-operated to introduce improved programs. When I refer to federal and provincial governments, I mean the taxpayers of Canada. Programs which provide medical and hospital insurance, education, assisted housing, social services such as day care, counselling and rehabilitation-and I could give a long list-have been developed. Although some of them are universal, these programs have grown steadily in importance and provide benefits which are often directed specifically to low income families.
The benefits of these programs are not reflected in statistics regarding division of income. Similarly, our tax structure is based primarily upon income, and income taxes have become more progressive over the last decade. On this last point I underline the fact that there is still room for improvement. We could, for instance, discuss concepts such as the tax exemption concept, which tends to favour the higher income earners in Canada. By comparison, the refundable tax credit concept tends to favour those who are at the bottom of the income scale.
However, progress has been made, and I welcome the current budget because it ensures reductions in the relatively regressive sales tax. Sales taxes have an across-the-board effect, and because of that those who have little money are most adversely affected. As much as 75 per cent of the income of some people has to be used to purchase consumer goods. I am very pleased therefore, that this current budget acknowledges the regressive nature of sales taxes and that, together with the majority of provinces which have agreed to the pro-
The Budget-Miss Begin
gram, the federal government will have caused a relaxation of the hardships which are inherent in the sales tax concept.
All things considered, then, real incomes of the poor have risen relative to those of the rich. It can thus hardly be denied that one effect of our social policies over the last decade has been to improve the quality of life of the poorest Canadians.
We cannot yet claim to have done a fully adequate job on their behalf-a theme to which I want to return later-but it should be very clear that deep cuts in government spending, especially combined with the assignment of high priorities to other than the social policy sectors, will inevitably mean a diminution of the quality of the lives of those Canadians least able to defend themselves. Believe me, it will be no compensation to a poor child living in the slums of Montreal or Vancouver or in rural poverty to hear that even his meagre standard of living will be diminished in order to satisfy the misapprehensions of politicians that comfortable upper class Canadians want to cut social program expenditures. I believe that any party or any government which adopts that approach will lead itself to ruin, and worse, will destroy what little hope there is for those who need our help most.

Of course, numerous social programs which have been set up during the last decade or in the last fifteen years do not only benefit Canadians who are poor. Indeed, those social programs improve the quality of life of the vast majority of Canadians, which explains their being so popular. Millions of people in this country of all incomes benefit from the Canada Pension Plan or the Quebec Pension Plan, from family allowances, old age security pensions and the guaranteed income supplement. Needless to say that all those who have the misfortune of losing their jobs do not share the views of the members from the official opposition on our present unemployment insurance system which they constantly criticize for being so abusive. That is true for the programs that may exist under the transfer payments which we make to provinces and it is also true of programs which provide services instead of money.

We are all richer for the fact that our society is compassionate enough to care for those of our people who need services like day care, rehabilitation, counselling or nursing home care. Even more directly, we all benefit from universal access to complete medical care via programs instituted by federal governments over the last three decades.
Indeed, our universal medical insurance programs are rated by the Canadian public as the most popular and worthwhile of all public services. This is hardly surprising, for these programs have ensured that the availability of good health care is the right of all Canadians. In contrast to the situation in the United States, whose lower level of public spending is often cited so favourably by those who would cut into our social programs, no Canadians need lack medical care because they cannot afford it. No Canadian in the last decade has been
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April 14, 1978
The Budget-Miss Begin
forced into personal bankruptcy by medical bills, whereas over 10,000 Americans had that misfortune last year.
Look, Mr. Speaker, at the results. Health care costs are a full percentage point of the gross national product lower in Canada than in the United States. Our life expectancy is higher, our infant mortality lower and our morbidity figures consistently better. Our proportion of physicians and other health related professionals exceeds all recognized world standards. Over the last ten years-since the inception of medicare-our situation has improved from one physician in every 734 Canadians to better than one for every 673 Canadians.
What is even better is that regional discrepancies have been greatly diminished. For example, in 1960 the ratio of the greatest to the least amount expended on health care by the provinces was 2.17. By 1973 the ratio had declined to 1.58 and it has since continued to approach the desirable 1.0 level. Similar changes occurred in beds to population and physicians to population ratios. We receive universal access to an excellent standard of health care at a very reasonable cost. In part this is due to the dedication and hard work of those who provide our health care. In no small part it is also due to enlightened social policies.
The health of Canadians is protected in a variety of other ways as well and many of these derive from the health protection activities of my department. For example, there has been a great expansion in the control of potentially faulty medical devices that may endanger health. More and more, doctors rely on valves, tubes, and sophisticated engineering and electronic devices in the diagnosis and treatment of disease. These are vital to medical progress and at the same time the public must be guarded against faulty products such as defective infant incubators or anaesthetic machines. Canada was the first country to institute formal regulatory control of the more than a quarter of a million devices used for health care. Controls have led to removal from the market of 57, 93 and 115 unsafe devices in the last three years respectively.
Important initiatives have also taken place with respect to the quality of drugs. Federal programs strive to ensure that drugs on the Canadian market are safe, pure and effective. In addition to monitoring manufacture, distribution, advertising and sale of drug products, federal government programs include research on such matters as drug quality and toxicity. We have introduced stringent inspection activities, supported by international agreements, and, to take but one other example, we recently introduced the quality assessment of drugs program. This is intended to ensure that lower cost generic drugs, the ones that many Canadians receive through the free drug list in various provinces or simply over the counter in a drug store, are of a quality comparable to expensive brand names and that they can safely be prescribed in order to keep down health care costs to patients.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. minister, but I must inform her that her time has expired. However she may continue if there is unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Monique Bégin: I thank you, Mr. Speaker, and I thank my colleagues. I could speak of many other programs. I have touched upon the health programs and the social programs. We could talk of what is being done in the fields of agriculture, the environment, industrial work safety. We could talk of post-secondary education. In short, we could speak of everything which makes up the quality of life of Canadian families, of the fact that parents now have assured protection, garanteed programs covering most of the risk situations in which their children may find themselves.
Let us take post-secondary education, what are we talking about? Well, we are talking about the fact that in 1966, for example, 13.4 per cent of all young people between the ages of 18 and 24 were attending post-secondary institutions, that is approximately 270,000 young Canadians. In 1976, after a decade of federal aid to post-secondary education, through redistribution programs by which richer provinces are helping the less fortunate ones, this proportion had reached 19.6 per cent, that is about 600,000 young Canadians who were enrolled in post-secondary institutions.
I could go on speaking about our programs, but in these difficult times I would like to remind the House of the importance of remaining cool, of being thankful for the wellbeing achieved by Canadians. There are people who have been here for some time and I have great respect for them. If they were in favour of social policies, we might accept a few from the other side of the House. They are not numerous and are mostly on my right. However, all those who passed medicare will remember that when the program was introduced barely ten years ago, a program which is now taken for granted by many among us who are younger or were not interested in the public life of that period, it was considered revolutionary in Canada. So were most of our social programs.
Why does the federal government have to get involved in health and welfare? It is another question which requires an answer. What do we do in that field? Canadians and our colleagues are familiar with the old type of shared cost programs under which social programs have been developed in Canada as well as in hospitals where different health care and ancillary medical services have evolved from the famous medicare on a fifty-fifty basis. A provincial minister of health or welfare would submit a plan to his cabinet. It was a program-financed on a 50-50 basis. He thus obtained from the federal government, through the Canada Assistance Plan and a number of laws covering medical and hospital cares, half of all
April 14, 1978

costs thus creating our present day well developed system of services and agencies.
This is why it seemed to us reasonable to hand over to the provinces the direct supply of health care which they had begun to assume. Although the federal government had undoubtedly played a leading role over the previous decade, we decided to hand over to the provinces the power to allocate resources, to control fully the financial administration of these programs, and to select the priorities which are of interest to their respective customers. So in 1977, for health services, and in 1978, for social services, we devised a different type of financial arrangement known as block funding.
I have already told the House, when speaking about these arrangements, how pleased I was to negotiate with the provinces in early March on an agreement for block funding of social services. It seemed fundamental to me in times of economic uncertainty to be able to guarantee to the provinces a certain amount of money for ten years. Through what will soon become an act of parliament, during the first five years, this amount will be fully guaranteed, whatever the situation in the country, increasing investments in a vulnerable sector of the economy, namely social services, from $516 million in this the first year to about $2 billion within 10 years.
The reason for the presence of the federal government in health and welfare remains fundamentally not so much a matter of leadership-which we assumed over the last decade, and which is no longer necessary since Canada has an adequate system of services and hospitals-but rather of redistribution. The formula underlying block funding in health and social services is redistribution of the money from the well-to-do provinces to the needy provinces in order to reach within the next decade, the same average per capita investment for all the Canadian people.
I should like, Mr. Speaker, to refer to the kinds of improvements in the lives and health of Canadians which are possible using this approach. It is interesting to speak of the past, but it is important to finish by referring to a few goals for the future. Canada is now a model to other countries. Canadians always have the bad tendency of thinking that they should have an inferiority complex. That is not justified. Canada is a model in preventive medicine. As referred to in a book on new perspectives for the health of Canadians, the care of their health is in their own hands.
In the coming years, this is what we will be doing in the field of health. As to the field of social services and social policies in general, there is still work to do. It is dreaming for hon. members of the House to think a guaranteed annual income of a universal nature would be possible in the coming years. It is a dream because the provinces rejected it in 1975, after years of discussion and negotiation.
The Budget-Mrs. Pigott
I cannot invite all hon. members to join the ranks of the government, but they should realize the government will continue to develop the work already started in income redistribution in this country. Perhaps this will be achieved through tax related programs and using the budgets and expenditures already in place. The government expenditures will not be increased, but as I once said in committee, there could be a shift of approximately half a billion dollars within the total of $12 billion already spent on social services. In summary, the list of opportunities and the accomplishments over the last decade could be multiplied almost endlessly.
I am sure other hon. members would like to contribute to this budget debate. I congratulate the Minister of Finance (Mr. Chretien) for the budget he presented. He did not give in to the loud cry we heard from hon. members on the other side, particularly by those in the Tory party, and unfortunately by the hon. members of the Social Credit party. He did not give in to all hon. members who wanted to cut the social and health programs of this country to the detriment of all Canadians.


Mrs. Jean E. Pigott (Ottawa-Carleton):: Mr. Speaker, I am pleased to have an opportunity to participate in the budget debate. Perhaps the next time the hon. Minister of National Health and Welfare (Miss Begin) will be very careful and listen to the comments of the hon. member for St. John's East (Mr. McGrath), who presented very constructive ideas concerning the social needs of our population.
The Minister of Finance (Mr. Chretien) showed some recognition of the important shelter needs of Canadians when he presented his recent budget. Unfortunately, the board and lodging benefits for single persons employed at remote work sites fall far short of the mark. Canada has ready evidence of mankind's inability to solve basic food and shelter needs. It is sad to realize that the housing policies of the present government and the present budget provisions promise little hope for the solution of our housing problems. Government controls the access of Canadians to housing funds. Government influences the construction and distribution of housing. Government exercises considerable control over standards and research technology in housing. In short, while housing is an area of provincial jurisdiction, it is not without federal influence. Yet as this budget shows, the present technique for dealing with housing problems is through scattered, ill-planned, fire fighting measures.
The federal government's role in housing ought to focus on such areas as the development of national housing policies, monitoring housing-related conditions, evaluation and review of policies, co-ordination of housing-related efforts, sponsoring the development of new concepts and processes, and the provision of expertise to needed areas. Central Mortgage and Housing Corporation and Statistics Canada offer the federal government instruments for national housing research.
Important levers affecting housing, such as tax and monetary policy, rest in federal hands. There appears to be confusion in federal housing policy in the fact that housing is a national goal with a regional nature. Both constitutionally and practically, housing might best be administered at the provin-
80033-74V2

April 14, 1978
The Budget-Mrs. Pigott
cial level, leaving the federal government free to use its resources of time and finances to support research and co-ordination. Of course, this has been constantly spoken about by the Leader of the Opposition (Mr. Clark) and by the hon. member for St. John's East.
One example of the need for long range, thorough planning is in the area of accommodation for the aged. The pattern for so many of our older citizens is not uncommonly to move from a house to an apartment, to a lodge, to a nursing home. Many of these people have little or no choice of housing design. Too often the resulting housing is unsuitable. Many elderly Canadians feel that less emphasis should be placed on designing housing specifically for their age group. Instead of more attention being placed on designing housing specifically for their age group, more attention should be paid to a plan to integrate the needs of all age groups. This situation and many other housing-related issues point to the need for increased research into various options and improved co-ordination between federal and provincial authorities.


René Bégin: It is completely provincial now.


Jean Elizabeth Pigott: That is so, but research is not being conducted to ensure that it is properly done. It is not co-ordinated. The hon. Minister of State for Urban Affairs (Mr. Ouellet) is not co-ordinating this type of thing. It is not being done at all.
It is discouraging to see that the budget, delivered at a time when housing difficulties are becoming increasingly critical, did not address itself more directly to the solution of those problems through increased research or aid to home ownership. Housing in Canada is regional in nature and results in the need for a flexible approach on the part of the federal government. In order to promote greater flexibility in the development and implementation of federal-provincial housing policies, avoiding duplication and reducing complexity, this budget could have introduced global funding to the provinces.
The Minister of State for Urban Affairs has promised, promised, promised; but all that came out of his department was the game of musical chairs which he plays with the management level of his department and the Central Mortgage and Housing Corporation. The Canadian home insulation program and the neighbourhood improvement program are examples of the need to re-evaluate and restructure housing policy. In our present circumstances there is no question that energy saving measures are worth-while, necessary and critical. The Canadian home insulation program could be a valuable part of our energy conservation effort. However, the person who observed that a camel is a horse designed by a committee might well be prompted to make the same comment about the CHIP program.
At a time when the Minister of Finance prefaced his budget by those wonderful words suggesting Canadians need to apply themselves diligently to build a better future through hard work and discipline, the management of this program shows no evidence of diligence and discipline. The Minister of Finance in his budget suggested that growth of spending by govern-

ments at all levels had been brought down. In that case CHIP is the exception that proves the rule, as Bob and Ray would
say.
Instead of reducing spending we have a program administered through a single, central office and through new regional offices, while existing Central Mortgage and Housing Corporation facilities could have been used to take advantage of offices already in place and expertise already in existence. Just eight seats away from the Minister of Finance we have a minister of a department that is doing nothing but duplicating existing building and programs.
Perhaps the one exception to the rule of this duplication was overlooked because there is no Central Mortgage and Housing office conveniently located to the Prime Minister's Montreal riding. That is where he put the new CHIP program. One questions further the duplication of an entirely separate federal administration of the insulation program in light of provincial comments urging the co-ordination integration of federal and provincial conservation programs. It would be a good idea to rename the position of Minister of State for Urban Affairs. Perhaps we could call it the ministry of state for empire building and interference in provincial affairs. Don't you think, Mr. Speaker, that would be a good new name for it?
Why was CHIP not more complete? Imagine not including labour costs and full installation. Who conceived a program for proper insulation in Canada that did not include windows, doors or basements? Of course, we know that CHIP was designed in a hurry in the Prime Minister's office because they thought there was an election coming last August. Everybody knows that the Prime Minister's office specializes in insulating the Prime Minister (Mr. Trudeau) and the cabinet from the reality of the real needs of Canadians.
While the Canadian home insulation program offers unnecessary duplication, let us take a look at the neighbourhood improvement program which shows us how ineffective management in the ministry led to the elimination of an excellent program. At a time when the Minister of Finance is asking all Canadians to show discipline and diligence the management of one of his fellow ministers has led to the interruption of a rehabilitation program whose expiry date was written into the National Housing Act.
Provincial and municipal response has been strongly in favour of NIP as a vehicle for revitalizing local neighbourhoods. In an era when many areas of federal-provincial contacts are strained, this program was well received. In spite of this positive reaction, and knowing the expiry date well in advance, the Minister of State for Urban Affairs allowed this program to lapse in the absence of any substitute measures. I am afraid the Minister of State for Urban Affairs has been so preoccupied with his party activities that he has not been able to carry out his responsibilities.
Present housing policies show a fascination for numbers. This government seems clearly to believe that a large number of housing starts is the magic solution to the housing problems of Canada. Let us consider the AHOP program. That program is causing great grief to many persons; many people who have
April 14, 1978

already bought this type of housing are unable to keep up the payments. We have heard reports that there are hundreds of thousands of unsold units. With our dreadful unemployment in this country, who can even think of planning to buy one of these houses? There was a hurried approach because the minister wanted numbers, and this has produced economic ghettos. The hon. member for Fraser Valley West (Mr. Wenman) talks about the incredible situation in his riding in respect of these unsold AHOP units. Had there been incentives in this budget to the economy, bringing relief to people who want to buy these or other units, that would have brought a great deal of help to young people and to those of the middle class who need decent housing.
We have a government that has failed in its budget response to rehabilitate the economy, yet it lets a rehabilitation program lapse because the minister is so involved and away from his ministry. This government has failed to deal with inflation, but it certainly knows how to inflate statistics, especially those relating to housing, as though that were a solution to the housing needs in this country. Senior citizens, lower income families and our burdened middle class in the core areas of our smaller towns and cities are crying out for the kind of proper economic planning that should have been in this budget. The housing needs of this country have been ignored by this government. I am deeply sorry for what has happened, because the hundreds of letters that come to us show that this budget could have made the difference but has not.


Stuart Malcolm Leggatt: Mr. Speaker, I should initially like to make a few remarks about some of the comments made by other participants in the debate. I was particularly interested in the intercession by the Minister of National Health and Welfare (Miss. Begin) who is not one of the least progressive ministers in that particular cabinet. Some of the things she has said are things with which we in this party can agree. It is always interesting to see how much credit the minister takes for those measures that her party fought against for some 40 years. Suddenly her colleagues are running around taking credit for almost everything important in the social field.
The facts are really quite different. There is not much point in taking credit for something that was never initiated by that particular party. Almost none of those measures were initiated by the Liberals. We are not averse to see progressive measures coming from NDP conventions being adopted as government policy. We have always accepted that as one of the prices of failure, but of help to the Canadian people. Of course, that may be the story of our life, but I am surprised that the minister would spend so much time this afternoon taking credit for NDP help over the years in providing decent social measures for the people of Canada.
The other aspect of this budget about which I want to comment briefly is that relating to the sales tax. We had a great discussion today during the question period about the apparent upset of the western premiers over this particular budget. We get back to the question of whether they were consulted, how much attention was paid to this matter, and
The Budget-Mr. Leggatt
why was it not something raised at the first ministers' conference? The real reason the four western premiers are upset is that the smartest finance minister in Canada is a man called Parizeau, who kept his cards in his pocket until the Minister of Finance (Mr. Chretien) stood up and committed himself. He then played every one of his cards beautifully. I think it is time somebody stood up in this House and gave Mr. Parizeau some credit. He is a bright minister and this government would be well served to have a minister of finance half as shrewd as that minister from Quebec. The reason the western premiers are upset is that they wish they had been smart enough to do exactly the same thing and not commit themselves in advance and then-


Mr. Lumley:: Saskatchewan is going to love you.


Stuart Malcolm Leggatt: I am pleased we are finally getting a little response. Now they are going to wind up being suckered into that sales tax solution which will see sales tax reduced on imported items-socially undesirable items like the eighteenth variety of under-arm deodorant-or some of the useless imported products that we have. At least we have one government in Canada who was smart enough to say: "Let us just go to the vital areas where additional sales are needed." The reason our western premiers are a little upset is because there is another finance minister in this country who is just a little smarter than all the rest.


An hon. Member:: How much money is he getting?


Stuart Malcolm Leggatt: If he does not get the full share the hon. member can guess who will suffer the penalty. The government cannot get away with treating Quebec one way and the rest of the country another way. It will be very interesting equating Quebec. It will be interesting to see this supposedly fair-minded government handle the distribution of those sales tax moneys. Quebec, Mr. Speaker, has out-thought this particular government, and I give them full credit for having played their cards extremely shrewdly.


Yvon Pinard: Do you wish they win the referendum?


Steve Eugene Paproski: What referendum?


The Acting Speaker (Mr. Ethier):: Order, please. The Chair recognized the hon. member for New Westminster only.


Stuart Malcolm Leggatt: I liked that interjection, Mr. Speaker, about do we wish they win the referendum. My answer is, "No". There is no doubt that none of the federal political parties are supportive of separation or that referendum. We have fought just as vigorously to make certain that that referendum is defeated. In fact, at the moment it does not look like it has got a very good chance. Having said that, let us not get confused between the question of separation and the question of good government. The present government in the province of Quebec is a far-sight better than the predecessor, and the people of Quebec understand that.

April 14, 1978
The Budget-Mr. Leggatt


An hon. Member:: Look at the polls.


Stuart Malcolm Leggatt: I agree with my colleague from Winnipeg North Centre (Mr. Knowles) when he said that it is not very difficult to be better than the Bourassa government, because there is not much to compare with.
Let us get back to the question of the budget and why it is that we saw much a modest approach by the Minister of Finance. At the present time Canada has an $11 billion deficit. I remember the previous NDP government of British Columbia that was defeated because it went $100 million over and the people were so upset with that terribly inefficient administration. What a terrible thing, $100 million over. The minister of justice at that time said that we had a guy named C. D. Howe who said "What's a million", that we had a Dave Barrett who said "What's a hundred million?". That was a pretty nice political shot. Now we have a government that has been saying year after year "What's $11 billion, it does not really matter, it is just another deficit".
The one thing that I can agree with my Social Credit colleagues on is that $11 billion is just too big a deficit if you are going to try to do the things you have to do for this country. The reason the government put forth such a "slim-pickings" budget is that the Minister of Finance has nowhere to go. The money barons in this world are saying: "You guys are in the hole and you are overspent". What does the government do about that? All they do is play around with someone else's sales tax.


An hon. Member:: What would you do?


Stuart Malcolm Leggatt: I will come to that. I am going to provide the solutions if I have time, and I am sure we can expect to see them right there in black and white after the next Liberal policy convention.
With an $11 billion deficit this government has not room to manoeuvre. It cannot go into massive public spending unless it reorganizes the income tax system. What can you do when you have an $11 billion debt, one and a half million people unemployed, an inflation rate of 9 per cent and a Canadian dollar that is now below 87 cents? I do not know what it is trading at today, but it must be getting close to the 85 cent mark.
I see my colleague, and in fact the member for the area in which I live in Ottawa, shrug his shoulders and say, "What is 85 cents, it does not really matter." It means a great deal to the old people in my riding who have to buy the necessities of life. It has had a bigger impact on inflation than any other single factor. The way the dollar has dropped has meant that the cost of living has risen in such a dramatic way, not for people who are well off, but for low income people, the old people, people who have to spend their money on necessities, many of which are imported.
There is no point, Mr. Speaker, in shrugging our shoulders about a dollar that is now the lowest in value in the lifetime of any member here, with the possible exception of the hon. member for Winnipeg North Centre, I am not sure. Certainly

it is the lowest in our lifetime. Why is it soft? It is soft because of the $11 billion deficit and also because of another major problem in our economy-and it is one that I do not think many of my colleagues in this House have addressed.
There was a time when people like Walter Gordon, who sat in the Liberal cabinet, the hon. member for Windsor West (Mr. Gray), who sits forlornly at the end of the front bench outside of that cabinet, Eric Kierans, who is now doing his duty to Canadians by providing some very skilled economic advice-which the government continues to reject-had a voice in this place. The common agreement amongst these people was that this country is owned and dominated abroad, and unless you begin to tackle that problem you cannot begin to tackle the major problems of the economy in Canada. Those chickens are now coming home to roost in a way that the hon. member for Windsor West, Mr. Kierans, Walter Gordon and the Committee for an Independent Canada have been predicting over the last 10 years. It has been predicted by these people for the last 10 years that this would happen unless something was done about foreign ownership and foreign domination of the Canadian economy.
Let me remind the House what the figures are regarding foreign domination. These figures were published in 1977 and they continue to get worse: 57 per cent of Canadian manufacturing is owned abroad, 99 per cent of the rubber industry, 96 per cent of our automobile and parts industry, 85 per cent of the chemical industry, 71 per cent of electrical goods, 63 per cent of agricultural equipment and 57 per cent of transportation.
Then the government comes forward with this marvellous research and development feature in the budget. If the government wanted to do something about research and development they would repatriate this economy. Then we would get some money spent on research and development, because multinational corporations do not spend money on research and development in Canada. There is no point in their doing it. They spend that money at their head office. They create those jobs at head office so that they can sell products to Canada without bringing Canada into the market to sell our own products abroad produced with our own technology.
The domination of the Canadian economy by foreign ownership has meant that Canadians continue to be the last hired and the first fired. With a head office in New York and with a board of directors who know and like New York, when making an economic decision in bad times, the first plant such a company are going to shut down will be the one in Canada. What has been the response of this government? They have turned the Foreign Investment Review Act into a welcome wagon. The previous portfolio of the Minister of Finance was to change the entire thrust of that mechanism and he changed the policy of this government totally so that there is no doubt left that Canada welcomes foreign capital from wherever or for whatever purpose. The record of the foreign investment review legislation is that 10 per cent of new acquisitions have been turned down and about 5 per cent of new business. Almost none of the people applying to invest in Canada have received unfavourable treatment. The comment everywhere in
April 14, 1978

the international market is, "Don't worry about foreign investment review legislation in Canada, it doesn't mean anything." They are right, it does not mean anything.
If one examines the balance of trade figures, it shows a travel deficit of $1.6 billion. We will never correct that in the long run; there will always be a deficit because of the nature of the climate in Canada. When one looks at the merchandise trade account one finds we are running a $2.9 billion surplus. We are selling more abroad than we are buying. If we look at raw materials and processed goods as examples, we are still selling more than we are buying. We do not see that in the papers. What are we paying the landlord and the owner of our industry for the money they put out in interest and dividends? There is a deficit of $3.4 billion in that area.
To put some confidence in the Canadian dollar abroad there has to be a long-term strategy to repatriate the Canadian economy. As long as we continue to pay the kind of rent, profits and interest we have been paying, we will not provide any long-term stability to the Canadian dollar. The Canadian dollar will continue to be weak in international markets.
Look where the Canadian dollar is in terms of West German currency, in terms of Swedish currency and in terms of most of the currencies of west European countries which have domination and control of their own economy and which are not branch plant economies at all. These west European currencies continue to be very strong in comparison to the Canadian currency.
In this budget we have provision for a 50 per cent oil exploration depletion allowance. A large portion of that money will go to the multinational oil companies. They continue to be the spoiled brats of the corporate sector. When there are any handouts coming, the oil companies are there with both hands. What we should be doing is looking for research and technology in terms of renewable energy, looking for alternate energy and bringing forward a conservation program that is worth the name. This is something we do not have now. Forget about incentives to the oil companies. My God, if they have not had enough incentives and they have not had enough profits by now, then how much do they want?
We could have moved forward in a progressive way in this budget, accepting the limitations of an $ 11 billion deficit and accepting the worry of how much room there is to manoeuvre. One could have manoeuvred in terms of renewable energy and a decent conservation policy in Canada. Then we would see some improvement in the Canadian dollar and in the unemployment statistics. As a result of renewable energy projects, jobs are created. There are not many jobs attached to the digging of oil wells. But there are a lot of jobs in the coal industry. There are a lot of jobs in the recycling of garbage, in the windmill power field, in the production of solar energy and in other areas of that kind of research and technology. There will be some change, then, in terms of the economic climate. But these tired old solutions which we continue to get will not have a significant impact on our two major problems.
The Budget-Mr. Leggatt
I would like to say a few words about the current speculation in the dollar. We have had some warning from the Minister of Finance that what the opposition does by standing up every day and forcing him to answer questions in the House is to play into the hands of the international money barons. He thinks hon. members are speculating. The Minister of Industry, Trade and Commerce (Mr. Horner)-"Mr. Loose Lips"-has been quoted, a quote that he denies, concerning his comments on the Canadian dollar and the impact it might have.
I would now like to refer to an edition of the Kamloops News for April 5 quoting directly the Minister of State (Fitness and Amateur Sport) (Mrs. Campagnolo), who said this:
The federal government will move to fix the value of the Canadian dollar on the international money market once the U.S. dollar stabilizes.
That is a pretty firm statement of government policy in terms of the Canadian dollar. I must say, Mr. Speaker, that we on this side of the House are tired of being lectured to by the Minister of Finance when ministers of the government cannot keep their mouths shut anywhere. They are running around telling one story in one place and another story in another. I do not doubt the international money barons are a little confused, but they are not confused about what is happening here. They are confused because they do not know what kind of a policy the government is following in terms of the Canadian dollar. Therefore, in the absence of any policy the value of the Canadian dollar will go down and so they continue to sell the Canadian dollar short. This is the direct result of the lack of cohesion in the Liberal cabinet.
The solution which I hear from my colleagues in the Conservative party is that somehow we will solve this problem by cutting back in the public service. We will create employment, as Sterling Lyon is allegedly doing in Manitoba. They maintain we will create employment by knifing the public service and throwing people out on the streets. What an inconsistent position to take in a land of 1.5 million unemployed. We will throw the public service on the street with them. That makes no sense whatsoever. It is really Milton Freidman's ideological fanaticism.


An hon. Member:: Right on.


Stuart Malcolm Leggatt: It is time we recognized that Milton Freidman does not possess all the economic wisdom in the western world but is doing a lot of harm.


An hon. Member:: Right on.


Stuart Malcolm Leggatt: I hear my good friend say, "Right on". If he will examine the budgets of the Liberal government, this one and the last one, they could have been written by Milton Freidman because the government itself has not moved in a progressive way.


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member for Winnipeg North Centre (Mr. Knowles) is rising on a point of order.
Business of the House BUSINESS OF THE HOUSE

April 14, 1978


Stanley Howard Knowles: Mr. Speaker, in view of the fact we are still here, as some of us believed we would be, I wonder if the Parliamentary Secretary to the Deputy Prime Minister and President of Privy Council (Mr. Pinard) could give us a word about Monday. Will we be continuing with the budget debate in accordance with the indication which the Deputy Prime Minister gave, that once that debate started it would continue without interruption unless something constitutional got in the way?
[ Translation]


Yvon Pinard: Mr. Speaker, after a great deal of the pessimistic and negative feelings expressed by opposition members
for the last three days, I think they need a one day's break to get themselves acquainted with many positive aspects of the federal administration over the last few years. I believe that research will convince them they should not foster unduly a confidence crisis and a climate of political uncertainty which are responsible for bringing about some of our present difficulties. This is why on Monday we will proceed with the study of Bill C-45 and then, if time allows us to do so, we will continue discussion of Bill C-19.


The Acting Speaker (Mr. Ethier):: Order, please. It being five o'clock now, this House stands adjourned until Monday at 2 p.m., pursuant to Standing Order 2(1).
At five o'clock the House adjourned, without question put, pursuant to Standing Order.

Monday, April 17, 1978