1978-11-20

ROUTINE PROCEEDINGS


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I rise under the provisions of Standing Order 43, on a matter of urgent and pressing necessity, to move as follows:
That this House calls on the government to set aside, as bureaucratic "snoopery" which interferes with the civil rights and privacy of Canadians, the regulations under law under which social insurance numbers must be produced, failing which 25 per cent of the interest on bonds is held back and the sale and purchases of stock without such a number is denied.


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


Some hon. Members:: No.


TRANSPORT
Mr. Jack Murta (Lisgar):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
Since the movement of grain out of Manitoba has almost stopped and, according to sources in the grain industry, the province of Manitoba will not see any significant movement of grain until January, 1979, at the earliest, I therefore move, seconded by the hon. member for Dauphin (Mr. Ritchie):
That Canadian grain cars be recalled immediately from the United States and pressed into service, moving barley and lower grades of wheat out of the province of Manitoba so that Manitoba farmers will have some available cash with which to pay their bills.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, I rise under the provisions of Standing Order 43. I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That the Minister of Indian Affairs and Northern Development personally acquaint himself with the deplorable housing conditions on the Blackfoot reserve, where there are 239 families living in 104 houses; 126 houses without plumbing, running water and sewage disposal; 21 to 22 people crowded into three bedrooms, instances where there are five families jammed into a single substandard home and, further, that the minister meet with the chief and council to discuss the band council resolution seeking to complete a housing study which is an integral part of a workable housing construction plan.


Mr. Speaker:: The introduction of such a motion for discussion at this time, pursuant to Standing Order 43, can be done only with unanimous agreement. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INQUIRY OF THE MINISTRY
Mr. Bob Rae (Broadview):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity. I move, seconded by the hon. member for Humber-St. George's-St. Barbe (Mr. Faour):
That in commemoration of the Prime Minister's discourse to Ontario Liberals on Friday, November 17, this House names November 17 as a National Day of Reason to be celebrated by a shutdown-


Mr. Speaker:: Order, please.


AIRPORTS
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity, pursuant to the provisions of Standing Order 43, affecting car rental agencies at major Canadian airports and, specifically, the failure by MOT, to the detriment of other car rental firms, to resolve a dispute with Host Rent-a-Car Ltd., which allegedly owes MOT in excess of $1 million; this at a time when the government, in its current budget, is attempting to maximize revenues from airport facilities, even to the point of drastically increasing an air travel tax to the detriment of many regions.

November 20, 1978
Oral Questions
Therefore, I move, seconded by the hon. member for Sas-katoon-Biggar (Mr. Hnatyshyn):
That the Minister of Transport cause to be exercised those rights conferred upon the department under the existing contract with Host Rent-a-Car Ltd., allowing for eviction after 15 days for arrears in payments and a lien on the company's automobiles to expedite the settlement of some of the matters at issue.


Mr. Speaker:: Such a motion can be aired for debate at this time, pursuant to Standing Order 43, only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PRESENCE IN GALLERY OF FIRST DEPUTY PRIME MINISTER OF ROMANIA
Mr. Speaker:: Before proceeding with the question period, I call attention to the presence in our gallery of a distinguished visitor, in the person of the First Deputy Prime Minister of Romania, Mr. Gheroghe Oprea.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is to the Minister of Finance, who is just coming into the House. As the Prime Minister, in Toronto over the weekend, told Ontario Liberals that we in the opposition and the media were his enemy in that we are too critical, would the Minister of Finance tell the House how we can put a better slant on our current 8.2 per cent inflation, bearing in mind that inflation was about 4 per cent when the Prime Minister first took power, which is well up from the 2 per cent average prior to his gaining power in this country?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, first I should like to tell the hon. member that indeed I was in the House. Since he saw me circulating, I do not know why he took the occasion to tell them on television that I was not in my seat.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: I was here at two o'clock. I think the hon. member is not seeking information; he is just trying to make some political points.


Some hon. Members:: Shame!


Sinclair McKnight Stevens: Mr. Speaker, again my question is directed to the Minister of Finance, who must slip around so quietly that certainly I did not perceive he was in the House earlier.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: My follow-up question to the Minister of Finance deals with unemployment. Could he tell us how we should interpret the present unemployment level in Canada of
8.2	per cent, bearing in mind that when the Prime Minister took power it was a mere 4 per cent? I ask this question in the context of the Prime Minister's suggestion that we are a little too critical, judging from his remarks in Toronto.


Mr. Chr6tien:: Mr. Speaker, he said that opposition members were a little bit too critical because the financial critics of the opposition never mentioned that we have created 2.3 million new jobs in Canada in the last seven years.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, my final supplementary is directed to the Minister of Finance. In due course, I hope he will try to explain his answer to the 900,000 people who are still out of work in this country.


Mr. Alexander:: Plus the hidden jobless.


Sinclair McKnight Stevens: Since Canada, for four years in a row, has been the only industrial nation to run a current account world deficit, would the minister tell the House in what way this has been good for Canada, bearing in mind that while we likely will lose $4 billion to $5 billion internationally this year, Italy, France, Britain, West Germany and Japan all will run substantial surpluses in their current positions with the rest of the world?


Joseph Jacques Jean Chrétien: Mr. Speaker, the hon. member is asking me to compare the economy of Germany or France with that of Canada, a country which must develop its monumental resources year after year in order to boost its economy from coast to coast and from Windsor to the North Pole, which is very difficult to do. Obviously, over the years, Canadians have been obliged to borrow capital to develop their vast country and that is why we now have current account deficits. But I want to mention that among all western hemisphere countries, Canada is the one which has the largest per capita trade surplus.
November 20, 1978


MARITIMES-EFFECT ON ECONOMY OF HIGH INTEREST RATES
Mr. James A. McGrath (St. John's East):: Mr. Speaker, can the minister explain, or perhaps tell the House what steps, other than those announced in the budget, he intends to take to offset the 10.75 per cent increase in the prime rate in the slow growth regions of the country, especially in the five eastern provinces which already account for over half the total unemployment in the country, and on which provinces this high interest rate will slow growth considerably more?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have put many more resources at the disposal of the Minister of Employment and Immigration for his program this winter to cope with the problems of unemployment. In turn, particularly to help the maritime provinces in developing and having more investment, we have doubled from 10 to 20 the investment tax credit. We have done the same for research and development. This is the first time, since I became the Minister of Finance, that we have found enough flexibility in our policies to have fiscal policies which are conducive to more growth in the maritimes and the rest of Canada, and to have a special fiscal policy for the maritimes.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: Mr. Speaker, the minister is attempting to salvage what is left of his reputation as Minister of Finance, and the Prime Minister is attempting to explain away ten years of mismanagement by the government. According to the 1977 figures of Statistics Canada, especially in the Atlantic provinces and Quebec, family incomes have fallen behind by
4.5	per cent in real terms, thereby adding another 300,000 Canadians to the list of those already below the poverty line. Since this is something the minister cannot be proud of, perhaps he can explain why it is so. Let him explain that away.


Joseph Jacques Jean Chrétien: Mr. Speaker, the night of the budget I explained that in the last three years Canadians have increased their net income by 7 per cent while our southern neighbours have seen their net income go down by 2 per cent. I think that is a performance we should be proud of.


James Aloysius McGrath: Mr. Speaker, keeping in mind the slow growth rate of the country and the government's pitiful record in regional development, perhaps the minister and his colleague, the Minister of Regional Economic Expansion, will look at what has been happening in the New England states adjacent to the Atlantic provinces, particularly at their growth rates and their rates of unemployment-which are the envy of the country-to determine what they are doing right and what this government is doing wrong. Has the minister examined that?
Oral Questions CONSUMER AFFAIRS


PRICE OF TURKEYS
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. This morning, Ken Crawford, president of the Canadian Turkey Marketing Agency, said that wholesalers in the turkey business in Canada are withholding some 50 million pounds of turkeys from the market on an artificial basis in order to drive up prices before Christmas. He also predicted that if the government does not force them to release these 50 million pounds of turkeys, the price paid by Canadians will be the highest we have experienced in the last 45 years.
I would ask the minister whether he is aware of that situation and, if so, what is he doing to prevent the wholesalers from driving up prices artificially?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: No, Mr. Speaker, I was not aware of that. As a matter of fact, during the summer and on several occasions since, I have made public statements urging marketing boards to increase the production of turkeys as an alternative to beef with such high prices. I have taken an opposite approach, and I am certainly surprised by this particular set of events.


Lorne Edmund Nystrom: Mr. Speaker, the marketing board says we have 50 million pounds of turkeys artificially being held back by the wholesalers, not the marketing board, with another 50 million pounds of turkeys now in the process of being killed and put on stream, which is about half the turkey production in this country. So the turkeys are there.
Since the farm price for turkeys went up by four cents a pound, and according to a government study in August the consumer price has gone up by some 15 cents a pound, I would ask the minister whether he has considered referring this matter to the combines investigations branch to determine whether this comes under consumer gouging or price fixing by the turkey wholesalers of this country.


William Warren Allmand: Mr. Speaker, I am alarmed by the allegations of the hon. member, and I certainly will pursue the matter.


Lorne Edmund Nystrom: Mr. Speaker, I am sure the minister will soon receive in his office the press statement by the turkey marketing agency of Canada, and from the president who held a press conference this morning, saying the things I am now saying in the House, namely, that as a result of this artificial stockpiling by the wholesalers, the retailers have now gone to the Canadian turkey marketing agency asking it to press for a further importation of turkeys from the United States to the tune of some three million pounds.
I would like to ask the minister whether he can assure us he will recommend to the Minister of Industry, Trade and Commerce that the supplementary import permit be denied and that, instead, he will force the turkey wholesalers to put on stream these turkeys they are holding back in order that we can have more jobs in Canadian agriculture and processing.

November 20, 1978
Oral Questions


William Warren Allmand: Mr. Speaker, I will be glad to pursue the recommendations made by the hon. member, but I want to check the facts first.


THE CANADIAN ECONOMY
Mr. James Gillies (Don Valley):: Mr. Speaker, I want to direct a question to the Minister of Finance. Now that he has admitted real growth in the country will be around, or less than, 4 per cent this year, yet only 13 months ago he was saying we must have growth of at least 5 per cent or 6 per cent if we are to bring unemployment right down, I would ask the minister whether the government is giving up the proposition that one of the functions of budget-making, and one of the functions of economic policy-making, is to create reasonably full employment in the country.


Joseph Jacques Jean Chrétien: Mr. Speaker, it is always the objective of the government to create as much employment as possible and to review the level of unemployment. At the same time, we have to set our policies against the flexibility we have in present circumstances. Of course, we have had 4 per cent growth, or close to it, rather than 5 per cent as expected. There is less growth in all OECD nations than predicted. Even with a growth of 4 per cent, as I said, we managed in the last year to create 368,000 new jobs, while with 5 per cent growth last year we predicted we were going to have less than 300,000 jobs. So under the circumstances I think we have done quite well in terms of employment over the last 12 months.


James McPhail Gillies: A supplementary question, Mr. Speaker. I am always astonished when the Minister of Finance quotes figures for growth of jobs. That is totally irrelevant; the question is how many people are out of work and what is the unemployment rate. That is what is important. It is also clear from the budget that the minister was not really making any really concerted attack on inflation. Given the fact that for the last 40 years the goal of budget-making has been to have relatively full employment and reasonable price stability, I am trying to discover, through my questions to the minister today, what were the goals of this particular budget, which is doing nothing about unemployment and nothing about inflation. What was the Minister of Finance trying to achieve in this budget?


Joseph Jacques Jean Chrétien: Mr. Speaker, through the different measures that we have put forward, we have reduced income taxes paid by workers in Canada by almost $2 billion. We have also helped, thereby, to put more money in the hands of the people to buy more goods next year. We have also reduced the sales tax in order to reduce the cost of those goods which Canadians will be buying. At the same time as doing all that, we have managed to reduce the cash requirements of the government,

because in the month of August we were able to produce some cuts in expenditures.
The policy of the government is to make more money available in the hands of the workers, and to lower prices. In doing so, we will be more competitive and, in being more competitive, we will have more people working in Canada's labour force.


James McPhail Gillies: A final supplementary question, Mr. Speaker. I come back to the Minister of Finance because I think this is an important point. One has to be pragmatic and take into consideration what the minister has provided in his budget. Under the budget, neither unemployment nor inflation will be substantially reduced in this nation. Am I correct in understanding that the minister has said today that the principal goal of this budget was to reduce the cash requirements of the government? Is that the major aim of budget-making in Canada at the present time?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have just clearly indicated that the purpose of this budget was to control the level of inflation which has varied this year between 816 per cent and 9 per cent. We hope that this level will be reduced next year to 616 per cent. We hope also to create next year some 250,000 additional new jobs, which indicates that we are very concerned about the level of employment in Canada, and we have succeeded in introducing such a budget while reducing the cash flow requirements from $12 billion to $10.7 billion.


DECLINE IN MANUFACTURED EXPORTS
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I have a question for the Acting Prime Minister. Between 1970 and 1976, Canada's share of the world market for manufactured exports fell from 6 per cent to 4.7 per cent. At the same time, the world demand for manufactured exports was increasing at an amazing rate.
I would ask the Acting Prime Minister, does he agree with the analysis of the Science Council of Canada's, Mr. John Shepherd and Mr. John Orr-this being a government appointed agency, by the way-that the real weakness in Canadian industry is in the area of fully manufactured goods? If the Acting Prime Minister agrees with that, what steps is he going to take to overcome this weakness, or does he think that these statements are balderdash?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: No, Mr. Speaker, I do not believe that these statements are balderdash, even though when repeated by the hon. member they have not improved in transmission. They are serious views which will be taken into account by the government in its ongoing effort to develop and implement an industrial policy in Canada.


John Carnell Crosbie: A supplementary question, Mr. Speaker. I am glad the Acting Prime Minister does not believe that these

November 20, 1978
statements are balderdash. Could he explain to the House why the Minister of Industry, Trade and Commerce has said that the Science Council experts are talking balderdash, as reported on November 13 in the Montreal Gazette and in every other newspaper that carries Canadian Press reports? The Minister of Industry, Trade and Commerce has said that they are talking balderdash, and I quote him: he said, "What do they know about running a business or the real business world?" Who speaks for the government in this matter, the minister, who spouts balderdash, or the Acting Prime Minister who has just answered my question?


Allan Joseph MacEachen: Mr. Speaker, I would not conclude that the use of the word "balderdash" is a matter of government policy. I hope it does not become a matter of great concern in the Conservative caucus.


PUBLIC UTILITIES TAX REFUNDING
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is for the Minister of Finance. Some ten days ago I asked him about a pending government decision with regard to the public utilities tax refunding act. He indicated it would be decided at that week's cabinet meeting. Is the minister now in a position to tell the House whether there has been a decision? Has it been indicated to the ministers of finance of the provinces, and is he prepared to tell the House what the government is prepared to do about this question?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am not in a position today to report anything new to the House.


Marcel Joseph Aimé Lambert: A supplementary question, Mr. Speaker. Could the hon. minister tell me whether he has the concurrence of the Minister of Industry, Trade and Commerce in regard to this policy as enunciated by the President of the Treasury Board, since this proposal mostly affects the province of Alberta in a very negative way?


Joseph Jacques Jean Chrétien: Mr. Speaker, I just said that when the time comes, I will report to the House of Commons. Discussions within cabinet are not for public exposure. I am going along very well with the Minister of Industry, Trade and Commerce.


John Carnell Crosbie: Balderdash!


ADMINISTRATION OF JUSTICE
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Solicitor General. It is now more than 18 months since the first published reports that Boeing was making so-called dual contract payments to its agents in Canada.
Oral Questions
Will the minister tell the House approximately when the RCMP investigation was begun, whether there has been an interim or progress report since then to a minister or ministers and, for the record, when does he expect the final report?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, the matter was raised by me on a number of occasions with the RCMP. In reply to the hon. gentleman's question, I can only indicate to him that, as has been the practice in the past, the investigation is ongoing. I cannot advise the hon. gentleman at this time when it will be concluded, but I can indicate to him that I will be pleased to report to the House any progress in the matter.


Allan Bruce McKinnon: A supplementary question, Mr. Speaker. The minister neglected to mention that I was told by the government a month ago that if I would be patient I would soon be satisfied one way or another with an answer. As Boeing stated that they executed dual consulting agreements in connection with sales in Canada, it would seem logical for the inquiry into this matter to start with the individual or company most likely to know the practice of Boeing during dual consulting agreements, that is, the regular consultant for Boeing in Canada. Has this been done? Can the minister tell me that and, if not, will he undertake to find out and report back to the House?


Mr. Blais:: Mr. Speaker, the question the hon. gentleman poses requests information that would reveal the nature of the investigation and the progress of that investigation, which is something which I am not at liberty to do. In terms of the undertaking that he wishes me to give, I cannot give it.


THE CANADIAN ECONOMY
Mr. Robert de Cotret (Ottawa Centre):: Mr. Speaker, I have a supplementary question arising from an earlier question to the Minister of Finance. Could the minister inform the House how he can talk in his budget and, again, in answers given today, about the need for a greater competitive position between Canada and the United States and at the same time stress the fact that real disposable income for employees in Canada has risen in real terms by 7 per cent, while it has declined in the United States by 2 per cent? It seems to me those two statements are in direct conflict and I should like the minister to explain.


Joseph Jacques Jean Chrétien: Mr. Speaker, I suggest there is nothing wrong in saying that the situation of Canadian workers has improved over the past three years. We must see to it that the competitive position between Canada and the United States does not deteriorate in the future because of excessive increases in wages and prices. One does not contradict oneself when one says to Canadian employees

November 20, 1978
Oral Questions
that they have improved their situation over the past three years and that they must limit their demands in the future to help Canada maintain its current competitive position with the United States.


Robert René de Cotret: Mr. Speaker, can the Minister of Finance tell us, at this time, whether or not the disposable income of a Canadian worker should increase at a faster rate than, or at least decrease at the same rate as that of his American counterpart in the years to come, so that we can maintain our competitive position?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not want to make a statement that will cover the next ten years. I can only say that, at this moment, the Canadian economy has recovered its competitive position with the economy of the U.S. and that we will have to take all the necessary precautions so that we do not lose it.


CANADIAN BROADCASTING CORPORATION
[Stage Direction]
Mr. Ir£nee Pelletier (Sherbrooke): Mr. Speaker, my question was for the Secretary of State, but in his absence I will direct it to the Deputy Prime Minister. Last Saturday, two Canadian universities, the University of British Columbia, the western champion, and Queen's University, the eastern champion, were playing for the championship of Canadian university football. I would like to know why the CBC's French network did not televise this event which does much more for Canadian unity than the two old American films which were shown on that network?
Allan Joseph MacEachen: Mr. Speaker, I will draw the hon. member's question to the attention of the Secretary of State who, I am sure, will be in touch with the CBC with respect to this matter.


CRIMINAL CODE
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, my question is for the Minister of Justice. In his absence, perhaps his parliamentary secretary or the Solicitor General would answer the question.
My question deals with the social problem of child abuse. Section 43 of the Criminal Code says:

Every schoolteacher, parent or person standing in the place of a parent is justified in using force by way of correction ... if the force does not exceed what is reasonable-
The Tree Foundation of Canada, which represents children who are abused and are being beaten, also asks whether this matter is under consideration by the Justice Department, so that when Bill C-51 returns to this House there will be sections in the Code regarding sanctions and with reference to child abuse; also other sections to protect children of this nation.


Mr. Claude-Andre Lachance (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, the matter of child abuse is of great concern to the minister. In that respect, one of the major concerns is related to the fact that given the very nature of the offences, most often they are not reported to police authorities. In that respect I would recall to the hon. member that on November 9, 1978, the subject matter of Bill C-204 in the name of the hon. member for St. John's East, respecting a Canadian bill of rights for children, was referred to the Standing Committee on Justice and Legal Affairs. I think this would provide hon. members of this House with a very good opportunity to express their concerns and make suggestions to the minister with a view to amending the Criminal Code accordingly.


Eldon Mattison Woolliams: Mr. Speaker, I wonder if I could get a statement at a later date, either from the parliamentary secretary or the Minister of Justice, on this subject-in light of the fact that 1979 will be the International Year of the Child. Would they take a hard look at the sections to the Code and the new amendments thereto, so children will be protected against abuse and beating, a problem which is becoming very prevalent and which is on the increase in Canada.


Claude-André Lachance: Mr. Speaker, that question as well as all those regarding the rights of children-and I refer particularly to the matter related to the custody of the children and the difficulties encountered by custodians to keep their children
when one of the spouses leaves the province concerned____all
questions respecting the rights of children are currently under study, and again I repeat that the proceedings of the Standing Committee on Justice and Legal Affairs will provide a very good opportunity to examine those questions in detail and to make recommendations to the House.


RECOMMENDATIONS OF COMMITTEE ON HEALTH AND WELFARE
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my supplementary question is to the Parliamentary Secretary to the Minister of Justice. If the minister is concerned about this matter, as the parliamentary secretary seems to indicate, will he tell us why the minister has not taken any action whatso-
November 20, 1978

ever to implement any of the recommendations put forward by the Standing Committee on Health, Welfare and Social Affairs which did a fairly exhaustive study on this problem about two years ago?


Mr.   Claude-Andr@: Mr. Speaker, many recommendations made by this committee were contained in the provisions of Bill C-51 amending the Criminal Code, which should come back to the House during this session.


URBAN AFFAIRS
Bob Rae: Mr. Speaker, in the absence of the Minister of State for Urban Affairs, my question is addressed to the Minister of Finance.
In light of the cutbacks which were announced by the government in relation to Central Mortgage and Housing in August and September of this year, in light of the fact that the land-banking program has also been abolished by the government, and in light of the fact that the special adviser to the task force on land-banking said that "profits being made in suburban land development are very, very high," can the minister tell us how much money the Canadian taxpayer is giving to the private land developers as contained in the two specific measures in the budget relating to housing that were announced on Thursday night?


Joseph Jacques Jean Chrétien: Mr. Speaker, if the hon. member would take the trouble to read the documentation tabled in the House Thursday night , on budget night, he would find the exact figures.


Bob Rae: Mr. Speaker, I can assure the minister that I have taken the trouble to do that. I can also assure the minister that those figures are not there. If the minister will check, I think he will find that those specific figures are simply not in the budget, just as the unemployment figures are not in the budget.


Joseph Jacques Jean Chrétien: Mr. Speaker, if the hon. member is not satisfied, he can always put the question on the order paper or put a question in writing. I do not bring the figures with me to every question period.
Oral Questions INDIAN AFFAIRS


REDUCTION IN DEPARTMENTAL BUDGET
Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. Is the minister aware of a proposed $60 million cut in the Indian health services program of the Department of National Health and Welfare? If he is aware, did he make representations to the minister, on behalf of the Indians, and what was the minister's response?


Hon. Janies Hugh Faulkner (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am not sure about the exact numbers. However, of course, the budget of my colleague, the Minister of National Health and Welfare, was affected by the recent cuts and it has had an impact on the Indian community. I have made that known to her. She had a very useful and constructive meeting with representatives of the Indian people across Canada and, as a result of that meeting, they have set up a working relationship to ensure that the impact is as minimal as possible.


FINANCE
Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Prime Minister. It relates to the situation of the new tax form, T-3010, which the Prime Minister may not be aware of but which came into effect January 1 last year, having to do with the filing of public information on charitable organizations, of which there are some 50,000 in the country.
I wonder, since the law went into effect on January 1 last year, with the filing to take place by March 31 this year, why it is that on May 12 the Minister of National Revenue-I think the Prime Minister may remember him; he used to be a member of this place and he is now in the other place-this information is not available, and in fact it goes against section 241 according to the legal information he had obtained. First of all, can he indicate why that discrepancy should exist at all, with respect to the Minister of National Revenue, and why the information that was to become available in March has not yet been made available either to the general public, members of parliament or in reply to any inquiries from the media?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, on behalf of the Acting Minister of National Revenue who is not here I am pleased to advise the hon. gentleman that in terms of providing information it is not as a result of section 241 of the Income Tax Act; it is because there has been some delay in certain quarters in filing returns under the new legislation. That is, in large measure, as a result of the volunteer nature of the staffing of some of the public charities that have to make returns, and also because of the change in legislation which has necessitated additional information being made available

November 20, 1978
Oral Questions
to the charitable corporations that would require them to make a return at this time.


David Samuel Horne MacDonald: Mr. Speaker, my supplementary question is for the Prime Minister. Could the Prime Minister explain why, in light of the recognized obligation on the part of the government as expressed by the Solicitor General in responding for the Minister of National Revenue, we still have no commitment on the part of officials to make this information public, and why the Minister of National Revenue would specifically write to me as late as May 12, 1978, indicating that the legal opinion he had received was to the effect this information could not be supplied?
What information has the Prime Minister gained from the Minister of National Revenue that he could be so far in disagrement with the answer just given by the Solicitor General?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I will be happy to inquire. I take the question as notice.


EXTERNAL AFFAIRS
Elmer MacIntosh MacKay: Mr. Speaker, my question is for the Secretary of State for External Affairs: it is with regard to the steady deterioration of relations between Chile and Argentina.
As the minister is no doubt aware, this has caused considerable international attention. Can the minister advise the House and the country of Canada's posture regarding the dispute between these two nations, both enjoying friendly relations with Canada, strategically situated in South America, and whether this country, either alone or together with other nations, is doing anything to help resolve the matters at issue?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, I think that the hon. member's definition of a "steadily deteriorating" position would have been correct up until perhaps a couple of weeks ago. The word that I have received within the last week or so is that there has been an improvement and that the negotiations are proceeding.
I am not certain that I am at liberty to indicate the country concerned, but there is an optimistic expectation that a particular country, a third party, will be able to serve as a mediator or negotiator between Argentina and Chile. Some word on that may come either before the end of the present month or early in December. Up to the present time, as the hon. member knows, we have taken a totally neutral stance on the grounds that we did not feel it was a matter in which it would be appropriate for Canada to take sides, particularly in view of the fact that the United Kingdom was seeking to act in a mediating role previously. I repeat my last point, namely

that it should be possible to announce something with regard to a new mediation effort within perhaps a week or ten days.


Elmer MacIntosh MacKay: I appreciate the minister's answer. Can he state whether he has any indication of the attitude of Bolivia and Peru with regard to this? Reports indicate that they are poised to take appropriate action, perhaps to get back some of the territory they lost 100 years ago in the Pacific war, if any hostilities should begin, keeping in mind the territorial claims to the Antarctic which could be analogous to our claims to the Arctic. That is the reason I asked the question. I wonder if the minister has contacted Peru or Bolivia and possibly Brazil, to see what their posture has been.


Donald Campbell Jamieson: I have not done so in the immediate past. I have had conversations with Brazil and Peru during the past year on this subject. I must say that I have not talked to Bolivia on it. Certainly, the impression I got at that time was that all the parties were anxious for an amicable solution. The hon. member said it properly when he indicated that this is a dispute of long standing. Obviously, the best solution would be through this kind of third party intervention that I am hopeful will come about in the next little while, and perhaps the other parties could be brought into that same over-all settlement. I agree with the hon. member that it does have certain ramifications for Canada in terms of the Antarctic, but I doubt very much if the parallel is very exact.


CORPORATE AFFAIRS
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, my question is for the Minister of Finance. It was reported at noon today that the proposed Manulife-Standard Life merger agreement had been cancelled. Can the minister indicate whether that is so?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not have any official information on this. At one time I agreed to accept in principle, but subject to further study, the proposed merger. I understood last week that there was some problem between the two partners, but I do not know whether they have made any official release with regard to it. I will inquire.


LOTO CANADA
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is to the minister who is responsible for federal lotteries. It was learned this week end that Loto Canada has promised a Canadian professional football team $350,000 for improving its stadium facilities. As the minister knows, this parliament approved the extension of the original Olympic

November 20, 1978

lottery to the present Loto operation with the understanding that the distribution of profits would benefit amateur sport, fitness, the arts and so on, and not, I emphasize the word not, professional teams or organizations. Can the minister advise this House why this obvious change of government policy has taken place, particularly without having consulted parliament?


Hon. Iona Campagnolo (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, I would first refer the hon. gentleman to clause E2 of the final section of the memorandum of agreement with the provinces which clearly makes united distribution activities between the provincial and the federal government. This is the first co-operative venture by the Saskatchewan government-licensed Sasksport with Loto Canada. It is the first such action in this regard. I think E2 spells it out quite clearly. However, final arrangements as to amounts, dollars and so on, have not been made. The rather premature announcement by the Saskatchewan Rough Riders was taken up by Saskatchewan Information Services and put forward, in very favourable terms I might add. Further information will be forthcoming in a formal way in the near future.


Otto John Jelinek: The minister having read that answer, I would now like to ask her this. In the past she has made it clear in this House, as well as outside the House on a number of occasions, that Loto profits and distribution of profits from Loto Canada would not go to professional teams and organizations. Will she very clearly advise this House whether this is an isolated incident, or now that the government has changed its policies, whether it intends to distribute these profits to anyone as long as the provinces are in agreement?


Iona Campagnolo: No, Mr. Speaker. I can assure the hon. member that the philosophy of the lottery expenditures is still the same. What we are dealing with here is in the promotion and advertising section of the sale of the lotteries. We are looking, at co-operation in some 17 kiosks with Sasksport, selling both their tickets and ours, as was expressed in the federal-provincial agreement. This particular one would be over a three-year period. Saskatchewan officials are fully aware of and are in complete support of it. I believe that the hon. gentleman, as a friend of sport, might be as pleased, as I am, that this federal-provincial agreement and lottery are beginning to turn around some of the disagreements that have existed previously in sport, and of course he knows this facility is not limited to professional sport. A great deal of amateur sport also takes place in this facility.


EXTERNAL AFFAIRS
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. It follows on questions last week to the Minister of Industry, Trade and Commerce regarding the tax convention problem between Canada and the United States. I did not have
Oral Questions
a chance to ask the minister about this earlier. However, I know he is well briefed on all subjects. What is the present status of the negotiations with the United States regarding this tax convention problem whereby conventions held in Mexico and Canada do not receive the tax benefits, which is also linked to the border station problem involving telecommunications?


Donald Campbell Jamieson: Mr. Speaker, this is a rather complex question to try to answer briefly. The situation is that we are continuing to make our representations to the United States. As far as the administration is concerned, I think it is fair to say, as vice president Mondale indicated while visiting Canada, that they are prepared to do something with regard to it. However, when the legislation was introduced in Congress, there were certain waivers and related issues that were brought into play. As a result, the bill did not pass prior to the mid-term election. That is the status at the moment.
We continue to insist through my colleague, the Minister of Communications, that there is no linkage between the convention tax on the one hand and the border television issue on the other. However, a number of Congressmen have taken the position that one has a bearing on the other and we are seeking to make representations to them. I may say that members on both sides of the House have been helpful through the Cana-da-U.S. Parliamentary Association in making representations in this regard.


John Patrick (Pat) Nowlan: I appreciate the complexity. There is obviously a dispute about linking these two issues. I am informed that some of the border stations have applied under the United States trade act for what is in effect retaliatory action and that that complaint is going to be heard by their commission on November 29. Is the government going to be represented at that hearing, or are we just going to read about it in the newspapers?


Donald Campbell Jamieson: Mr. Speaker, we will certainly do considerably more than read about it in the newspapers. I would like to take the question as notice because I am not sure what form our presence is going to take. I know that Canadian broadcasting interests are going to appear. Whether it is appropriate for the government to appear before the United States or any foreign tribunal is another question. I would like to check it out from a legal point of view.


VETERANS AFFAIRS
Mr. J. Larry Condon (Middlesex-London-Lambton):: Mr. Speaker, my question is to the Minister of Veterans Affairs. Can the minister tell us if any steps have been taken to ensure that veterans and their dependants will receive the full increases resulting from the changes in the Guaranteed
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November 20, 1978
Oral Questions
Income Supplement and the introduction of children's tax credits?


URBAN TRANSPORTATION
Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, as the hon. member knows, this legislation has not yet been passed. People in my department are looking very closely at this. We hope to be able to cope with the situation.


HOUSING
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, I had hoped to ask my question of the Minister of Transport, but possibly his parliamentary secretary can be of assistance. Given increasing local concern about the inability to proceed on a much needed grade separation project at Athalmer, British Columbia, which is apparently dependent on the signing of a master agreement with B.C. regarding the urban transportation assistance program, will the minister personally intervene to expedite the completion and signing of that agreement?


PROPOSAL TO AMEND NATIONAL HOUSING ACT
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question was intended for the Minister of State for Urban Affairs, but I will put it instead to the Deputy Prime Minister because I think it affects him.
The failure of the government to extend existing neighbourhood improvement programs will have an enormous impact on programs across the country by curtailing government spending at the expense of municipalities. Municipalities will be forced to raise property taxes or renege on their commitments. In light of the fact that a notice of motion to amend the National Housing Act appeared on the order paper a number of times before October 31 and has since disappeared from the government notices set out in the order paper, will the Deputy Prime Minister say whether it is the intention of the government to introduce legislation enabling contributions to be made so that municipalities may live up to their commitments in this field?


Allan Joseph MacEachen: Mr. Speaker, it is true that there was notice of a bill in the name of the Minister of State for Urban Affairs and that it was later withdrawn. The reason it was withdrawn was to bring in the bill at a later point when certain policy matters had been finally resolved. That will be done soon, and the bill amending the National Housing Act will be brought before the House within a reasonably short period.


Francis Andrew Brewin: In view of the housing needs of Canadians and the need to maintain employment may I take it from the reply of the Deputy Prime Minister that the government will make the necessary commitments to ensure that contributions will be made to municipalities so that they can proceed with essential housing, sewer and water programs? Will this be done after the matters referred to by the Deputy Prime Minister have been cleared up?


Allan Joseph MacEachen: Mr. Speaker, I cannot tell the hon. member what will be in the bill. It will be a good bill, and I am sure the hon. member will support it, but its details will be disclosed later.
[ Translation]


Mr. Charles Lapointe (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, the minister himself is very concerned about this delay in the implementation of the urban transportation assistance program with British Columbia, and we shall make every effort to complete that agreement as soon as possible.
* *
*


REGIONAL DEVELOPMENT
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, my question is to the Minister of Regional Economic Expansion. Can the minister report on the current state of discussions with the province of British Columbia and the city of Castlegar with reference to a proposal that the federal government assist in Castlegar's water distribution problem and in providing a supply of fresh water for Castlegar?
[ Translation]


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, following my most recent conversations with the minister of economic development of the province of British Columbia, I think I can say that there were in fact discussions between the province and the municipality about the supply of fresh water for Castlegar. We are still hoping to find a mechanism which will enable us to help the municipality as much as possible to obtain that supplementary piece of equipment for its municipal services but at this time I cannot report any progress since there are ongoing discussions between both levels of government.


FORESTRY
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I am wondering whether the Minister of State (Environment)

November 20, 1978

is aware of a zero base budget review according to which the Forest Management Institute was under review, that the conclusion of this zero base budget review, among other things, was that the Forest Management Institute should not be cut and that it has since been cut by a cabinet decision? If the minister is aware that the zero base budget review came to this conclusion, can he explain why the cut was made?


Hon. Len Marchand (Minister of State (Environment)):: Mr. Speaker, I am very much aware that there has been a zero base budget review of my whole department and that it has been gone over very thoroughly. I was not aware of the recommendation with respect to the Forest Management Institute, but I am very much aware that this institute has done much good work. I remind the hon. member that the work of the Forest Management Institute has not stopped. We have moved that work to what used to be called the Petawawa Research Station. We are contemplating giving that station a new name and giving new emphasis to the research program which is going on there. The Forest Management Institute is very much part of that work.


Donald W. Munro: Mr. Speaker, since the minister is not aware of the recommendation regarding the Forest Management Institute, I wonder if he would agree that it would be a good thing to have that review looked into by the appropriate parliamentary standing committee. Will he ensure that a reference is made to that committee so that it might examine the documents involved and the cut proposed?


Len Marchand: Mr. Speaker, the committee can, of course, examine the estimates of my department. Its members can ask any question they want. However, the decision to move the Forest Management Institute to Petawawa has been made. A decision to move the Forest Fire Research Institute to Petawawa has also been made. There will be an amalgamation at that station which will contribute greatly to forest research in this country. The station will be one of the best forest research stations in Canada.
Oral Questions
point in time is whether we are close enough to an agreement to be able to predict a date. However, I will check that out and report back to the hon. member.


CROWN ASSETS
Mr. Peter Elzinga (Pembina):: Mr. Speaker, my question is for the Minister of Supply and Services. I am curious as to whether the minister is aware of the resignations of five employees at the Edmonton regional offices of the Crown Assets Disposal Corporation, the resignations being due to what has been called gross mismanagement at the upper levels of the corporation. If the minister is ware of this, is his office conducting an inquiry into these resignations?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, the management of the corporation is taken care of by a president and I am certain that if there were resignations and a new team was appointed it was done to ensure the greatest possible economic efficiency of the corporation.


Peter Elzinga: Would the minister assure the House that he will do nothing to deter the appearance of the president of the Crown Assets Disposal Corporation before the appropriate standing committee, if that committee wishes to hear evidence?


Jean-Pierre Goyer: Mr. Speaker, it is obvious that the corporation is answerable to the House and I am sure the president, Mrs. Nadeau, will be pleased to fulfil the wishes of the House.


NATIONAL PARKS
Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. Can the minister say when we can expect an agreement between Canada and the province of Saskatchewan regarding the Grassland National Park to be signed? As the minister knows, the land owners involved have been waiting patiently for several years.


James Hugh Faulkner: Mr. Speaker, that was a subject of discussion during the course of the summer, and my latest information is that there has been a reconciliation in areas of difference. What I am not able to tell the hon. member at this


RAILWAYS
Mr. Arnold Malone (Battle River):: Mr. Speaker, in the absence of the Minister of Transport I will put my question to his parliamentary secretary. On what date did the minister or any member of his staff release a directive indicating that 2,300 miles of line which were to be secured for further study by Chief Justice Emmett Hall were lines which were to receive an abnormally low standard of service? That is a pattern which is showing up, and that is exactly what is happening regarding those 2,300 miles of line.


Charles Lapointe: Mr. Speaker, I do not know the exact date but I will inquire and inform the hon. member.
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November 20, 1978
Privilege-Mr. Chretien


PRIVILEGE
[Stage Direction]
mr. Macdonald (egmont)-answer of solicitor general

David Samuel Horne MacDonald: Mr. Speaker, I would like to give notice of a question of privilege arising out of today's question period. The Solicitor General (Mr. Blais), speaking for the Acting Minister of National Revenue (Miss Begin), confirmed that access to information on registered charities has in fact been the law of this land since January 1, last year. On May 11 in raising this very same matter, which is reported at page 5316 of Hansard, 1 received a very clear indication that the information would not be made available, and the following day I received a letter from the Minister of National Revenue (Mr. Guay) confirming in very definite terms that such information could not be made available.
Ordinarily I would proceed with the question of privilege at this point, but in view of the commitment by the Prime Minister (Mr. Trudeau) to investigate the very great differences of opinion which presently exist between the Solicitor General, the information generally available about the provisions of that legislative action, and the communications directly from the Minister of National Revenue himself, I will await a further report from him. Certainly this situation parallels very closely the present situation confronting the hon. member for Northumberland-Durham (Mr. Lawrence) and the question of privilege he has raised in this House.


MR. CHRETIEN-CORPORATE AFFAIRS-PROPOSED MERGER OF MANULIFE-STANDARD LIFE
Joseph Jacques Jean Chrétien: Mr. Speaker, on a question of privilege I would like to answer a question asked by my friend, the House leader of the official opposition, the hon. member for Grenville-Carleton (Mr. Baker), that indeed both Manulife and Standard Life have decided not to proceed with the merger.


Walter David Baker: Mr. Speaker, on the question of privilege that is raised by the Minister of Finance (Mr. Chretien), I would like to thank him for the answer. The question now is, what was the minister's involvement? As I understand it, is was a transaction involving $5.7 billion. Has there been approval of any kind given by the Minister of Finance with respect to the transaction itself, and has there been approval by the minister of the decision not to proceed? Would the minister be prepared to make a statement on motions so that we can understand exactly what did happen, and the involvement of the Department of Finance in that transaction?


Joseph Jacques Jean Chrétien: Mr. Speaker, last summer the Superintendent of Insurance held talks with Standard Life and Manulife about the merger. Our position was that in principle we were not in disagreement with the merger, subject to verification of

certain legal, accounting and actuarial problems, but the parties decided not to proceed, which concluded the matter.


Mr. Speaker:: Statements by ministers.



ROUTINE PROCEEDINGS


Hon. J. Gilles Lamontagne (Postmaster General):: Mr. Speaker, I am pleased to have this opportunity to make a brief statement on motions, and in particular to say a few words about the Post Office and Post Office rates. As hon. members will recall, on October 20 when I tabled the 1978 Post Office annual report, I also gave a statement to the press noting that, for the first time since the fiscal year 1971-72, the upward trend in the Post Office deficit had been reversed. I attributed our improved financial picture to the rate increase in the previous fiscal year, and to improved mail volumes.
The rate changes actually began with the two-stage increases of September, 1976, and March, 1977, and continued with the rate change of April, 1978. They are part of a staged process, not only to narrow the gap between revenues and costs but also to restore an appropriate balance between postal revenues and general taxation required to offset the costs of providing postal services to Canadians.
That balance had been changing over the years, with the taxpayer paying a higher percentage of postal costs and the postal user paying less. The portion of postal costs in excess of revenues, subsidized by government from general taxation, averaged 13.7 per cent during the 1960s and early 1970s, with no year exceeding 20 per cent. But rapidly rising costs outstripped the growth in revenues, and by 1975-76 the percentage of costs funded by government had risen to 49 per cent. Rate increases help to shift the balance back in the other direction. In fiscal year 1976-77 the percentage of costs funded by the government declined to 42.8 per cent. In the fiscal year ending March, 1978, subsidization through general taxation declined to 37.2 per cent. By asking the postal user to pay more for his share of the cost of mailing a letter, we help to reduce the cost to the taxpayer while increasing it for those who are actively using the service.
[ Translation]
There are, of course, certain things that the Post Office cannot do. I cannot ask some Canadians to pay more for mailing their letters for the only reason that they live in one of the largest areas of the country far from cities or main transport systems. I cannot decide to serve some Canadians and not others because it would not be profitable.
November 20, 1978



The Post Office is a complex blend of service and business. Because it is a service the Post Office must provide basic, national mail coverage to all Canadians, wherever they live, for the same reasonable price. Rightfully, therefore, there must be some element of government funding to help provide this national service. But the public purse and the public patience both have limits. Because the Post Office is this hybrid of service and business, its stockholders, the people of Canada, have the right to expect that it will live by the same economic rules that govern any large business. That is the only way that the Post Office will keep its costs and revenue figures under control, and its demands on the pocketbooks of the taxpayers to a reasonable minimum.
On the costs' side of the ledger, wages and transportation continue as the major costs of doing business. For more than a year the Post Office has been cutting back on those budget items that do not contribute directly to the operational side of the business. This means stringent control over the use of man-years, less spending on administration, and limitations and cutbacks on some programs, and we are keeping at it daily.

Mr. Speaker, the transport of mail is another very costly factor of postal operations. The Post Office can act in some sectors where they can control costs, through energy saving, the use and design of vehicles. It is more difficult to control other transport sectors, because the rates are set by airlines, railways and shipping companies. At this time when the cost of fuel is constantly increasing, transport companies can hardly control their expenditures and that is reflected in their rates. [English]
Postal revenues are determined by mail volumes and postal rates. Mail volumes continue to increase, but at a low rate. Volumes for the past fiscal year were 5.9 billion pieces of mail, an increase of only 2.8 per cent over the previous year.
That leaves postal rates. Sensible and business-like measures to control costs, and vigorous action in the marketplace to increase volumes are contributing to an improved financial position. By themselves, however, these measures are not enough to bring down the size of the Post Office deficit. To be fully effective they must be coupled with rate action that will bring in more revenue.
We feel that an increase in postal rates is warranted at this time, Mr. Speaker. It could be viewed as a continuation of the process commenced in September, 1976, to restore an appropriate balance between postal revenues and the general taxation revenue needed to offset the costs of doing business. However, equally important, a postal rate increase now also will help to improve the financial position of the Post Office at a time when the department is preparing for the complex change-over to Crown corporation status. Accordingly, we propose to implement price increases to most classes of domestic and international mail to take effect at the beginning of the next fiscal year, April 1, 1979.
Post Office
At the same time, the basic first class letter rate will be increased from 14 cents to 17 cents.


Some hon. Members:: Shame, shame!


Mr. Lamontagne:: Also there will be selective increases in other classes of mail and in some service fees. Full details of the new rates will be spelled out in a news release which will be issued from my department today. Also, postmasters will be given details of the rate revisions.

Taking into account what I have just said, Mr. Speaker, we suggest the implementation of rate increases for most mail classes at the domestic and international levels beginning next fiscal year, that is on April 1, 1979.
On that date, the basic rate for a first class letter will rise from 14 to 17 cents. There will also be rate increases for other mail classes and fees for some services. The new rates will be explained in detail in a press release which my department will be issuing today. The postmasters will also receive detailed explanations on the new rates.

Indeed, even with these increases, Canadians will be paying among the lowest rates of major western countries.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Maurice Lamontagne: Australians now pay the equivalent of 26 cents, and the French pay the equivalent of 30 cents. The people of Great Britain pay the equivalent of 19 cents Canadian for a first class letter. The current rate in the United States, expressed in Canadian equivalents, is approximately 17 cents.
While I am on the subject of postal costs and rates, it might be a propitious time to announce that the proposed rates for second class publications are the result of consultations with my colleague, the Secretary of State (Mr. Roberts). They were reached under the terms of a memorandum of agreement which we both signed on behalf of our respective departments.
Briefly, the agreement indicated that the Post Office will no longer be responsible for establishing postal rates for certain types of mail. Instead, the responsibility for reimbursing losses incurred through publishers' postal rates will be transferred to the Secretary of State. The effect of the agreement will be to reduce that portion of our deficit incurred by carrying publications for postage far below the cost of providing the service.
In conclusion, I hope I have demonstrated to hon. members of the House today that a postal rate increase is necessary, and that it will help to bring about a better correlation between postal rates and the cost of providing postal service. It is part of our ongoing efforts to reduce the size of the deficit which must be paid for by all the taxpayers of Canada.


Some hon. Members:: Hear, hear!

November 20, 1978
Post Office


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, all hon. members are aware that the Canadian Post Office service, which used to be one of the most efficient in the world, in recent times has fallen upon less happy days. ETnfortunately the Post Office Department has become the butt of a lot of humour across the nation doday.
I do not think the statement which the Postmaster General (Mr. Lamontagne) made in the House today will do anything to enhance the reputation of Canada Post, at a time when it is most urgently needed. As I listened to his presentation, I realized that it was almost a detailed repetition of the statement made in the House one year ago almost to the day. On November 21, 1977, his predecessor, the present Solicitor General (Mr. Blais), made a statement. That was almost identical to the one we heard today. If this type of procedure continues, successive postmasters general should dust off the old speech and rise in their places to table it as read.
At the outset of my remarks this afternoon I want to make the point that something much more positive than this annual, ritualistic increase in postal rates must take place if Canada is to have the quality of postal service which is urgently needed. I admit that the statement last year was a little more realistic than the one made today by the Postmaster General, because it indicated that there were some real problems which had to be be dealt with if we were to bring the growing deficit into line.
The Postmaster General indicated that there were two sources of revenue: volumes of mail and increased subsidies from general revenue. Unfortunately over the past decade the balance has been going in the opposite direction, as between the positive and negative. The subsidies from taxpayers' revenue have been going up, and the volumes have been decreasing. This point was made in specific terms last year when the then postmaster general mentioned, because of the growing problems in the Post Office, that the projected volumes of first class mail, which is the real revenue earner, were down by one billion pieces. Also he made the specific point that the parcel post volume was back to the level it had been 20 years ago. By personal investigation I know that situation has not improved during the past year.
If anyone visits the huge Gateway plant in Toronto, he will find that the mechanized parcel sorting facility, which still has to be automated, is not functioning as intended. Instead of having increased volumes, which might have derived from improved marketing procedures, most of the parcel post, except for experimental runs which are being conducted in order to keep the computers in operation-


An hon. Member:: That is not true.


Walter Gilbert Dinsdale: I should like to tell the hon. member for Peel-Dufferin-Simcoe (Mr. Milne) that it is true. If he visits the plant, he will find out for himself that the computers are not functioning as originally intended. Because his constituency is in that area, the hon. member knows that the Post Office has rented the Canadian Arsenal facilities in order to process the parcels manually, rather than using the expensive ma-

chinery and computers which were supposed to handle the mail at this time.
The essence of the Postmaster General's statement this year introduces a new philosophy into Post Office financing. Referring to the announced increases he said the following:
They are part of a staged process, not only to narrow the gap between revenues and costs, but also to restore an appropriate balance between postal revenues and general taxation required to offset the costs of providing postal services to Canadians.
That is a new philosophy for financing the Canadian Post Office. It is almost a new mandate, as I am sure the hon. gentleman is aware that the mandate prescribed in Post Office regulations is to the effect that the Post Office is to provide postal service to the people of Canada at reasonable rates and at a standard of service adequate to meet their needs without incurring subsidies from general revenue.
The Postmaster General speaks optimistically of the declining deficit. I have the appropriate figures before me as compiled by the Canadian Tax Foundation in its report for 197778. This makes interesting reading.
In 1970 the Post Office Department registered a surplus of $14.3 million. The Post Office was then living within its mandate, providing an efficient service without incurring subsidies from general revenue. In 1971 there was a deficit of $31 million. In 1972 the deficit was $9.5 million. In 1973 the deficit increased to $26.4 million. In 1974 the deficit was $111.2 million. In 1975 the deficit was $252.4 million. In 1976 the deficit took a great leap to $468.9 million. In 1977 the deficit was $488.8 million, almost half a billion, and the estimated deficit for the current fiscal year, as indicated by the Postmaster General's own figures, has soared to over one half a billion, or $524 million. That is a pretty bad picture, as I am sure the hon. gentleman would agree, and these figures are from the Canadian Tax Foundation report. Coincidentally, they parallel the years this administration has been in power.
This is typical of the pattern of rising costs, soaring inflation, and other difficulties that have befallen the Canadian economy during the past ten years of the present Liberal administration.
In the few minutes that remain let me indicate to the Postmaster General that much more positive policies will have to be instituted if we are to reverse this unhappy state of affairs. This is not the first time the official opposition has outlined these matters in the House. The minister refers to a Crown corporation requiring additional infusions of money from the treasury. I suggest that does not necessarily have to be so.
As we have pointed out on several occasions, the Crown corporation method of organization and administration in the Post Office has been operating in the United Kingdom now for almost a decade. It was instituted in 1969 after very careful study and reports, both parliamentary and private. This is something we have been urging for the past several years in order that we can get at the facts.
November 20, 1978

Following this institution of the Crown corporation system in the United Kingdom in 1969, almost immediately there was a strike. That strike took place in 1971, so Crown corporations do not represent the solution to all the problems of the Post Office. This was a strike in that newly formed Crown corporation in the United Kingdom as a result of management failing to consult with unions on mechanization and automation programs. The process of mechanization was slowed down in the interests of labour-management relations.
Management and the unions came together, along with the postal users, in advisory committees where there was constant and continuous consultation. Training programs were instituted for supervisors and shop stewards in order that problems would be resolved on the plant floor as they arose rather than being allowed to accumulate in thousands of grievances as they have in Canada where there are some 10,000 plus grievances clogging up the present grievance process. Parliamentary investigations were organized on a regular basis to get at the root causes of problems in the British Post Office. The experiment of industrial democracy has been instituted, and this has induced in the British Post Office a spirit of co-operation rather than confrontation, and has resulted in returning the British Post Office to its former efficiency.
I maintain that exactly the same happy situation could obtain in Canada if the government would only provide the necessary leadership. The British Post Office is living within its mandate, showing a surplus of $83 million in postal operations at the present time.
My final suggestion to the Postmaster General is that he must do something about creating happier relationships with postal users. We have pursued this subject in a series of debates in the House in the last year, specifically regarding the method used by the government in increasing postal rates.
The Post Office Act, section 10, says this must be done by the authority of parliament through a formal legislative amendment. This was sustained by the Standing Committee on Regulations and Other Statutory Instruments. As a result of the arbitrary procedure on the part of the Post Office Department one of the major postal users in Canada, periodical publishers, took the government to the Supreme Court. They lost the first round but are now appealing. I am not going to discuss that in any more detail today other than to point out that this is no way to create good customer relationships, with customers having to take the government to court because of the arbitrary manner in which it has increased their costs.
I am sure we all understand why the Canada Post Office is in such difficult straits today, and why it is not working as an efficient operation. Just a month ago we had the last confrontation between labour and management in the Post Office. I had hoped the Postmaster General might have used the opportunity of this statement to report some positive developments. The moment of truth is now upon the Postmaster General and the government. We have reached a point of no return.
If the Postmaster General thinks that the establishment of a Crown corporation will be the sunnum bonum, or a universal solution to all his problems, he is sadly mistaken. We insist
Post Office
that there must be a parliamentary inquiry so that the people who are most vitally concerned with postal services, the unions, the customers or postal users, will have a chance to appear before that committee to express their concerns. We are confident that if this sort of dialogue or consultation takes place, and if an atmosphere of co-operation replaces the present atmosphere of confrontation, we can restore the postal service to its position of high efficiency.


Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, in responding to the Postmaster General's statement this afternoon first of all I want to observe that since 1972 this is the fourth postmaster general we have had. Can you imagine any kind of corporation operating with that sort of revolving door leadership-the fourth postmaster general in six years, or a little over a year and a half for each?
What has the Postmaster General (Mr. Lamontagne) announced today? He has announced a first-class mail rate increase from 14 cents to 17 cents, an increase of 21.5 per cent. For greeting cards he has moved the rate from 12 to 15 cents, an increase of 25 per cent, and this by a postmaster general who is so tough with the workers, saying that they have to hold the line. The average wage increase last year was 6.8 per cent. The increase in the cost of services is three times the average increase in wages last year. What increase has he made in the rate for junk mail? It is a marginal increase.
I cannot understand why the Postmaster General and the government continue to subsidize those who are obviously advertising to make money. Why are the taxpayers being asked to subsidize these corporations? Does it make sense that, with a very costly mechanized system and well paid workers, we subsidize junk mail in this country? I just do not understand that.
Since the Postmaster General has been in his post we have had two increases in postage rates and deteriorating relations between postal workers and Post Office management. As a matter of fact, asking this Postmaster General to run the Post Office is like asking Evil Knievil to park your car-it is absolutely hazardous. What is the Postmaster General's rationale for these increases? His rationale is that in the United States they pay the equivalent of 17 cents and in the U.K. they pay the equivalent of 19 cents. I can be equally ridiculous: in Uganda they pay the equivalent of 30 cents, and in Nicaragua they pay 27 cents. Service is what counts, and it is service that has been deteriorating.
My colleague from Humber-St. George's-St. Barbe tells me that to mail a newspaper first class from St. John's, Newfoundland, for example, to Ottawa, takes five to six days. The Post Office Department has not yet heard about the airways. The service just does not justify these massive percentage increases in postal rates at all.
I suggest to the Postmaster General in all seriousness that the people of Canada are looking to see how effectively the Post Office is run and how cost conscious it is. I want to put on

November 20, 1978
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record some of the obvious misuse of public funds taking place in the Post Office Department. The first one I want to deal with is the whole slew of grievances outstanding, and I want to deal specifically with the breach of clause 39.07 by the Post Office. There is an expenditure in the Post Office that should never have occurred. We have the case of the workers grieving the use of casual help in the Post Office. They wanted an adjudication. The Post Office Department appealed it to the Federal Court and lost that appeal. Then they took the matter to the Supreme Court of Canada.
I want to put on the record a statement by Mr. Corkery, the deputy postmaster general, in the submission he made to the Supreme Court of Canada. Paragraph six states:
If the decision of the Federal Court of Appeal in O'Toole is allowed to stand, the moneys that would be required to be paid out to all the grievors would exceed $2 million. Further, there would be substantial costs that would be incurred in the future.
There, Mr. Speaker, is an expenditure that was unnecessary.


The Acting Speaker (Mr. Turner):: Order. The Postmaster General (Mr. Lamontagne) is rising on a point of order.


Maurice Lamontagne: Mr. Speaker, the hon. member is digressing and dealing with history rather than with raising postal rates. At the moment he is discussing the grievances of employees of the Post Office. We are presently setting up a mechanism to see that these are settled. Arbitration is going on and discussions are taking place with the union. Why does the hon. member not start discussing the rate increases?


The Acting Speaker (Mr. Turner):: 1 would suggest that that is not a point of order. The hon. member for Nickel Belt.


John R. Rodriguez: Thank you, Mr. Speaker. I understand the sensitivity of the Postmaster General; he has a thin skin, and with reason. He is asking the people of Canada for a rate increase, and they want to know how he can justify a rate increase. How efficiently has he been running the Post Office? How has he saved more money? It is going to cost us over $2 million, according to Mr. Corkery, to give justice to the people who have grieved, and that does not include the cost of litigation all the way to the Supreme Court of Canada. When the case got to the Supreme Court of Canada it was thrown out, the court holding there were no grounds for appeal.
I wonder, whether the Postmaster General will now put the people of Canada to the expense of having all of the remaining 2,699 grievances, taken all the way to the Supreme Court of Canada. That would amount to a pretty cost, but I suppose that he would say that it will come out of the Justice Department's funds. It still comes out of the taxpayers' pockets.
About a month ago we saw a great campaign being conducted in all the newspapers across the country, local as well as national. This campaign cost $150,000. Did it help solve the problems in the Post Office? Not one whit. What it did was make propaganda to enable the Post Office to amass public support against the inside workers in the Post Office. It did not move one piece of mail faster or more efficiently. I think that

expenditure was an absolute waste of money and certainly should not necessitate a rate increase.
One must look at all of these things in total, Mr. Speaker. During this period 53,000 employees were called in by management, each one individually, for a period of one hour. For each employee there was a flip chart regarding the offer made by the Post Office to CUPW. This process was repeated a second time. In other words, 53,000 workers times two hours, times a base rate of $6 an hour, I work out at pretty close to $630,000, and that does not include the wages of management who had to take these people through the mulberry bush in going through this process for the benefit of the ego of Post Office management.
Another costly item is the provision of television cameras which have been set up in the Post Office to watch people sort mail. I think this is a cost which should be eliminated immediately, and the cameras taken out. Instead, effective line management in the Post Office should be developed. At least management would be able to talk with the workers when supervising them on the job. A bloody camera does not do that. No personal interrelationship or rapport is being developed within the Post Office with that kind of snooping.
I also want to raise the question of the proposed Crown corporation. This is another objection we have at this particular time to this increase of 21'A per cent in first class mail postage rates and 25 per cent for cards. It seems to me there ought to be a moratorium on any rate increases until this Crown corporation is put in place and is able to take a look at the needs of the Post Office and the way in which improvements can be made in service to the taxpayers of Canada. The way this whole system is going to work should be examined.
1 know that the minister, in the twilight of his postmaster generalship, wants to feel important at this point. We can all appreciate that, and an ego massaging is going on right now. But he would have served the public better, I think, at this time, one month after creating havoc, and continuing to create havoc in the Post Office, and then having the gall to come here and tell the people of Canada that on April 1, 1979, there is going to be an increase in first class mail rates of 21 */2 per cent and a 25 per cent increase in rates for greeting cards, if he had got up in this House and shown that he had done something great for the people of Canada in terms of mail service.
I think it is absolutely imperative that there be no increase in rates whatsoever until the Crown corporation takes a look at the way the Post Office operates and how best the costs can be borne. It seems to me that is what the minister should be looking at, and not coming here making announcements on the eve of the defeat of this government. That is equally unacceptable.
Last of all, Mr. Speaker, I want to say in all seriousness that the government is using expediency. The Postmaster General says, "We are going to be tough; we are going to clean up those workers in the Post Office, and I am going to make this thing all service and business." I like that, Mr. Speaker! The
November 20, 1978

twins of the minister's imagination-"This is a corporation of service and business." Having moved in the Post Office with Mr. Corkery from de Havilland, and a gentleman who has now gone to another department from the Department of Industry, Trade and Commerce, as well as Mr. Pare from Steinbergs, via Princeton or somewhere in the United States, all with the businessman's mentality, the minister is going to run the Post Office like a business.
He tells us, "We are going to make this thing pay its way, so we will increase the costs," and he uses this fallacious argument of comparing us with the United States, Uganda, and all the rest. They are the most ridiculous comparisons, Mr. Speaker.
What the minister has done is to use expediency in this announcement, rather than planned postal development. There is no planned postal development. It is an expedient measure with which he hopes to convince the corporate sector that we have a tough minister in charge and that things are going to start rolling. It is hoped there will be some financial support from the Liberal party when the bagman goes calling.
In all seriousness, Mr. Speaker, I think if the Postmaster General were to do the honourable thing he would resign his position.


Some hon. Members:: Oh, oh!


John R. Rodriguez: Hon. members opposite scream. All I ever heard in this House when the minister first came was that he was mayor of Quebec city and that there was never an industrial dispute there. But there never was a union either! Now he has found out what it is like to deal with unions, and not with pussycat unions or sweetheart unions, but tough unions that are concerned about working conditions.
I think if he were to do the right thing by the people of Canada he would do what-


The Acting Speaker (Mr. Turner):: Order, please. The minister rises on a point of order.


Maurice Lamontagne: Mr. Speaker, on a point of order, first of all, the hon. member is always talking about the Post Office with a kind of masochistic delight. He seems to say practically anything he wants to say. I want to raise a few points, Mr. Speaker, that are absolutely false. When he said that we subsidize junk mail-we do not subsidize it-


Some hon. Members:: Order, order!


Maurice Lamontagne: I can answer. Mr. Speaker, may I speak?
I think what he said was that we are subsidizing junk mail. That is absolutely false. We do not subsidize junk mail. He said that in Quebec city we have no union. Mr. Speaker, we have four unions that are members of respected international unions-


The Acting Speaker (Mr. Turner):: Order, please. I would suggest to the hon. Postmaster General that he is now in a
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position of dispute or debate. The hon. member for Nanaimo-Cowichan-The Islands.


Mr. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, the Postmaster General (Mr. Lamontagne) rises on the pretence of a point of order and is proceeding to carry on a debate. I think it would be a debate we could all get into, and the Postmaster General should resume his seat unless he has a genuine point of order. I ask Your Honour whether he has a point of order and, if so, what it is.


Mr. Collenette:: Mr. Speaker, I should like to use the words of the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas). He is talking about debate. The hon. member for Nickel Belt (Mr. Rodriguez) has been on his feet for twenty minutes. He has not stuck to the original purpose of the Postmaster General's remarks in this point of order, which is to announce the rate increase. He is making a political speech for the benefit of his friends in the postal unions. I think order should be called. At the least the hon. member for Brandon-Souris (Mr. Dinsdale) stuck to the topic.


John R. Rodriguez: Needless to say, Mr. Speaker, the parliamentary secretary is very sensitive. I can understand the sensitivity over there and the need for support. I doubt, Mr. Speaker-


The Acting Speaker (Mr. Turner):: Order, please. The hon. member is getting into a position of debate. He has used fourteen minutes, the time that was allotted to the hon. member for Brandon-Souris (Mr. Dinsdale) and I would suggest that his time has expired.


John R. Rodriguez: Mr. Speaker, the final proposal I make-


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


John R. Rodriguez: -with respect to these rate increases is that the Postmaster General ought to do the honourable thing and vacate that position, because certainly what he has announced today is expediency and not planned postal development.


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, I will try to speak more briefly than the previous member, but I would like at least to congratulate the minister for having had the courage this afternoon to announce an increase in the postal rates and to propose turning the Post Office Department into a Crown corporation.
It is quite obvious that Canadians are wondering when those constant increases will come to an end and when we will at last have a Postmaster General who will have enough time to learn what is the Post Office Department. When we consider that there were four postmasters general over a six-year period we should not expect a member who has never held such portfolio to learn his job in two, three or four months.
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That is very tough and I pity those who after having been minister for two years or two years and a half have to quit for whatever reason, sometimes probably because of the hardship of their job but maybe sometimes also because of the criticism to which they are subject from everywhere. Of course, the Post Office concerns not only the government but also the public as a whole because people pay for the postal service. One must also bear in mind that this is a service and that it cannot be transformed into a profitable business as long as it is considered as a social service, as a service to the whole population. We are told that the current increase is due to a salary raise, to lower productivity in the Post Office as compared to the productivity level in other areas, in private industry or in Crown corporations where productivity is said to be better.
Mr. Speaker, that is where a question crops up in my mind. We must ask ourselves what is the cause of this. Why are the Post Office employees not interested, like other workers, to work industriously?


Mr. Boulanger:: There are too many socialists.


Charles-Arthur Gauthier: An hon. member from the government side tells me there are too many socialists, but I personally do not believe it. Rather it is because the employees feel they are isolated. I think the crux of the problem is the lack of dialogue between employer and employees. It is a well known fact that when a boat is running adrift, it is not easy to get it back on course. And I think this is what the present minister is trying to do, to get back on course a boat which has been running adrift for several years. Are we going to achieve this by creating at last a Crown corporation where the same old mentality will remain unchanged? That will not make any difference. The employee will still face a boatswain wanting to foist his wills on him. That is the point I want to make.
The government insists on imposing its dictatorship in all sectors without previous consultation. It does so in every field. It does so even with the provinces imposing its will upon them year in and year out without consulting them to find out what is good for them. The government does the same thing with the postal union. I have often had the opportunity of chatting with the postal workers; they would love to see a healthy atmosphere created in which they could live and breathe freely, in which they could enjoy working. But no! That atmosphere has yet to come.
I do not know whether the present minister will manage that outstanding feat of straightening out matters in the Post Office. On the other hand, the people complain about getting just about the worse service in fifty years despite all the streamlining, namely, automation and all the other experiments the former speaker mentioned a while ago, including a television hook up to supervise the workers-all we need now is a television set for every worker so that he can supervise his own work-but that is where money is being spent foolishly. In addition, the employees are not trusted. I have employees and

I know very well that if I did not trust them, I would not be here today because my business would have gone belly-up. But it works because I trust my employees, and a department whether it be the Post Office, Public Works or Transport must trust its employees. That is a must, and I am convinced it would pay dividends. Let us then stop saying we will win that point, and we will do this or that; we will fight and go before the courts and things will work out-Let us put an end to that!
The government is going to have to give up its dictatorial approach and acquire more social manners. We are no longer in the eighth or tenth century-we are in the century of social life. If the present minister keeps that in mind and wants to succeed-I know he wants to succeed and put back together that famous postal service to the great satisfaction of everyone in this country who need it urgently-I believe he is going to succeed only if he puts himself at the level of the postal workers, postal officials and talks with them on an equal basis. That is the secret, Mr. Speaker. If he does that, I can guarantee the minister he is going to succeed with his reform. But if he does not do that, we are going to continue to have what we have today.


David Samuel Horne MacDonald: Mr. Speaker, I want to put a question to the Postmaster General (Mr. Lamontagne) which concerns the latter part of his statement. The minister mentioned with respect to second class publications that he would enter into some kind of agreement with the Secretary of State (Mr. Roberts). Apparently a memorandum of agreement has been signed but I do not know whether that document has been made public. The proposal as outlined by the Postmaster General reads:
Briefly the agreement states that the Post Office will no longer be responsible for establishing postal rates for certain types of mail. Instead, the responsibility for reimbursing losses incurred through publishers postal rates will be transferred to the Secretary of State.
There was considerable concern expressed about earlier rate increases last year, particularly by representatives of the Canadian Periodical Publishers Association, who also spoke about the nature of the consultation that took place. As I understand it, some agreement was entered into that there would be at least six months' notice given to this body. The minister shakes his head no, but I think there is a good deal of correspondence from officials, on record, which could be tabled quite easily to indicate that the lack of notice that currently exists would be remedied respecting future rate increases.
Has any significant notice, and by that I mean at least four to six months, taken place? Second, was there any consultation with the periodical publishers of this country about this radical change, and third, what kind of criteria is the Secretary of State going to use when he decides which publications are going to receive some form of subsidy and which are not?
November 20, 1978


Maurice Lamontagne: Mr. Speaker, first before I answer the hon. gentleman's question, I would like to move that I be given the privilege of looking at the blues. After listening to the hon. member for Nickel Belt (Mr. Rodriguez) I may be able to raise a point of privilege. There have been so many things said, 1 would like an opportunity to check the blues because I cannot translate material that fast.


Mr. Peters:: Get on with your job. What is your job?


Maurice Lamontagne: I am doing my job, and just keep quiet.


William Arnold Peters: Total incompetence.


Maurice Lamontagne: To answer the question raised, we never promised the publishers notice of six months. We told them many times in letters, by other conversations and communications with them, that they would be given ample time to raise their own rates for advertising and for publishing. If I remember correctly, at the last users' conference in Toronto, when they were all present, I said they would have to expect an increase by next April because it would be normal. These are normal business-like principles and attitudes. It was obvious that rates would have to be raised in view of the costs incurred by the Post Office by way of transportation and wages. There was no use in hiding this. The rates had to be raised. It is the same in business; if costs increase, fees must be raised. That is what we told them. Therefore they will have four and a half, five or six months to raise their rates. Furthermore, I have quite a few reports which we received following the users' conference in Toronto. They were sent from practically everyone involved. They all said it was expected and they would look forward to being informed of when and how the rates would be raised. We have informed them as soon as we could.
Our people are in constant communication with postal users. We have people in our office in the marketing department who are in consultation with them. I do not think there is any objection at the moment to that raise being effective by April 1 if they understand the business-like attitude we must have with the Post Office. Furthermore, this raise in postal rates will give the Post Office, as I have already mentioned, around $160 million. I think that is just normal so that we can decrease our deficits. As far as the agreement with the Secretary of State is concerned, I would prefer if you put your question later on to him and have the details of the agreement, considering the fact it is up to him to judge the increase of rates for people who use postal publishing rates for cultural matters. That is up to them to decide in consultation with us.


David Samuel Horne MacDonald: Mr. Speaker, I find this very strange. Up to now we have had a non-discriminatory rate structure. Suddenly the Postmaster General tells us there is to be an entirely different basis on which rates are to be administered, and not even by his department. I would think, at the very least, if the Postmaster General carries any responsibility for the Post Office he can table that agreement today. He can also give us, by tabling because it will take too long in the course of questions and answers, some statement as to the criteria to be used. Also he should tell us whether or not this
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totally new principle which has been enunciated by the Postmaster General today has been agreed to by those who primarily use this service. He has given no indication that there was any consultation about this new method of administration. In view of the dangers that exist in this kind of radical departure we should have much more assurance than we, have had so far.


Maurice Lamontagne: Mr. Speaker, first of all there is nothing discriminatory about the rates we are setting today. It has been studied for months by our department to see what the market can take, and along with that, how we can compete in certain classes. If the hon. member had attended the users' conference he would have witnessed the discussions we had with these people. There were many working groups working with us at that users' conference. Some people suggested that this agreement with the Secretary of State should be done as quickly as possible and in such a way that the Post Office will be responsible for a kind of a cost which is due to the government's policy of subsidizing a certain class of publisher. It is logical that some part of the government policy should not be borne by the Post Office deficit. We will know exactly what amount it is. When the Secretary of State studies that with us, we will know the exact amount.


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, this is a very alarming change that the Postmaster General (Mr. Lamontagne) has outlined. The document speaks about the responsibility of reimbursing losses to periodical publishers. In other words, a decision will be taken by the minister responsible for culture in this country as to how much money will be paid and to which publications. As far as we know, no guidelines have been established. It could be entirely discretionary. It holds open the prospect for a very real capacity for censorship in this country. That is what worries us.
The minister indicated to us that there was a memorandum of agreement signed between his department and the Department of the Secretary of State. We in this House of Commons, as well as anyone else concerned with freedom in this country, have a right to an undertaking from the minister that the full details of that memorandum of agreement will be published and put before this House of Commons and, if necessary, that the Secretary of State (Mr. Roberts) will make himself available for questioning as to the implications of a new power which could very well become a censorship power.
Will the Postmaster General, as a senior minister in this House at the moment and as one of the ministers who co-signed this memorandum of agreement, give us an indication that this memorandum of agreement will be published in totality in the House of Commons?


Maurice Lamontagne: Mr. Speaker, I think the Leader of the Opposition (Mr. Clark) misunderstood what I said when he says that we will be reimbursing the publisher. That is not the question. The Secretary of State, in collaboration with our officials and staff, will set the rates for those publishers who
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already have special rates. They will not reimburse the publishers. They will reimburse the Post Office for what we estimate will be the cost of the policy of the government in trying to help these publishers. The question for the Secretary of State is strictly a question of developing and formulating a current postal policy for cultural mail users. That is not a subsidy to the publisher. It will be compensation to the Post Office to ensure that the Post Office deficit picture is real. It is not because of a certain policy of government to help publishers.
There is nothing secret about the agreement. However, I think it is up to the Secretary of State to table it. I do not have it with me now. It is not secret. It was signed by myself and the Secretary of State. It is just an agreement by which hon. members will see that-


Walter Gilbert Dinsdale: Table it.


Maurice Lamontagne: It is not only my signature.


An hon. Member:: You signed it.


Maurice Lamontagne: I am sure hon. members will understand that I do not want to make a decision without consulting my colleague, the Secretary of State. There is nothing secret about it. I will table it in due time if agreed.


Charles Joseph Clark: Mr. Speaker, I do not want to prolong this. The language here refers explicitly to the word "reimbursements." That is alarming language. It speaks about reimbursements made at the discretion of the Secretary of State, presumably to certain publications which he, for whatever reasons he establishes, deems worthy of receiving those reimbursements.
The minister, for some odd reason, is claiming that he does not have authority to make available to the House of Commons a document which he signed. Of course he does. He is giving away by this document, as much as we know about it, responsibilities which now attach to his department. At the very least I would ask him to give us his undertaking now, without any equivocation, that he will recommend to his colleague that they act at the earliest possible opportunity, today if possible, and I will interrupt my budget speech if I ever get it started, to have presented here in the House of Commons in all of its detail that memorandum of agreement which we on this side of the House think could have very dangerous implications for freedom of information and freedom to publish in this country.


Maurice Lamontagne: Mr. Speaker, the Leader of the Opposition has again spoken about reimbursement to the publisher. It is not a reimbursement to the publisher. It is compensation to the Post Office. That is completely different. Second, I will consult with my colleague to see whether I can table the document. I repeat, it is not a secret document. I think it is just normal to consult with my colleague because we both signed it. We should both be in agreement if it is to be tabled.


Thomas Clement (Tommy) Douglas: Mr. Speaker, the minister keeps saying it is not a secret agreement

because both he and the Secretary of State (Mr. Roberts) have seen it and signed it. That does not make it a public document. The minister today is announcing a policy which I fear will be put into effect later on without being submitted to parliament. We will be told that it was announced on the twentieth day of November by the Postmaster General (Mr. Lamontagne) and that parliament had been consulted. We have not been consulted at all.
I agree with what has been said by the Leader of the Opposition (Mr. Clark) and the hon. member for Egmont (Mr. MacDonald) that this must be tabled with no ifs, ands or buts about it.
I want to know three simple things. First, when will this policy come into effect? Will it be April 1, the beginning of the fiscal year? The minister nods his head. I think that is correct.
Second, do I take the minister's statement to mean that the Secretary of State will set what he thinks is the rate the publications should pay, and then the Secretary of State Department will pay the difference between that rate and what the Postmaster General's department estimates it costs? Is that correct? If that is correct, I may point out that the Secretary of State will have to pay an amount dependent entirely on what the Postmaster General and his department set as their cost. It could be an inflated cost. It could be anything at all. It means that the taxpayers of Canada will start to pay in order to give publications a preferred position.
We have known for a long time that people put out tons of junk mail and periodicals for which the first class postal users and the general public have to pay. What control is there going to be to see that this is not going to be abused?
My final question is, what publications are involved? The minister says the effect of this agreement will be to reduce that portion of our deficit incurred by carrying publications for postage far below the cost of providing the service. Which publications? Who is going to decide?
The minister referred to cultural publications. Does that cover Time, Newsweek, Macleans and Playboy? Does it cover weekly newspapers, or will it only cover Economic Review and magazines for academics? Who is going to decide that? Does this mean that the Postmaster General (Mr. Lamontagne) or, preferably, the Secretary of State is going to decide which privileged groups in this country will have their postage costs subsidized and which will not? Is that a power which the government thinks should be put in the hands of any minister without having it included in some type of legislation approved by parliament?


Maurice Lamontagne: Mr. Speaker, the policy of having a special rate for second class publications already exists. It was judged during previous years and this year which ones would be at the special rates. This was because of a government policy to try to encourage some publications. The policy of the government is specifically set out in the Post Office Act. There is nothing new about it. If it is a policy of the government with regard to giving help to this cultural mail, as it is called, I think we will have double control.
November 20, 1978

In its wisdom the Post Office felt that certain publications should enjoy the special rate. We said to the Secretary of State that it is government policy to help certain cultural publications which need help. I feel that the Secretary of State is a much better judge in this regard than the Post Office which, in a way, is a business, and which provides a service. I indicated to the Secretary of State that we should sign an agreement regarding who should enjoy these special rates and what the special rates should be. In view of the policy of the government to help these publications, I am sure we do not want to terminate that assistance tomorrow. If we did so, I think the reaction toward the Secretary of State would not be good.
I felt that we should both consider these publications and how they should be classified. In a way it is a double control. This is much better than having the Post Office acting alone, because sometimes we do not know exactly what the Secretary of State decides regarding policy on culture. We try to collaborate with his department, and I think that is an improvement. I think there is a double control.


James Aloysius McGrath: Mr. Speaker, I rise on a point of order. This is a very serious matter, and the Leader of the Opposition (Mr. Clark) and the hon. member for Egmont (Mr. MacDonald) were correct in raising it. In his statement the minister said, "The agreement states that the Post Office will no longer be responsible for establishing postal rates". I listened very carefully to his replies to the Leader of the Opposition. In his replies he looked down, and he was quoting from a document. Under the rules of the House the minister has to table the document. He quoted from it in his statement as well as in replies to the Leader of the Opposition. The Minister has no alternative but to table the document. In support of that contention I refer Your Honour to citation 159(2) of Beau-chesne, which reads as follows:
A minister of the Crown is not at liberty to read or quote from a despatch or other state paper not before the House, unless he is prepared to lay it upon the table.
Under the rules the minister now has a clear obligation to lay on the table of the House the agreement between himself and the Secretary of State (Mr. Roberts) dealing with this very important matter.


Mr. Speaker:: I did not understand the minister to say that he refused to table the document. I understood that there was another signatory to it, and he thought he ought to get the permission of the other person whose signature the document bore. Therefore I think that the question of any refusal to table the document for the moment is suspended. If we come to a point at which the minister does in fact refuse to table the document, I think then the hon. member for St. John's East (Mr. McGrath) could return to his point of order and proceed at that time. However, I understand the minister's response at this point to be that there is another signatory and that he feels that out of courtesy he ought to consult the other signatory to the document before deciding whether to table it.
Post Office


Walter Gilbert Dinsdale: Mr. Speaker, I think we can now see the wisdom of the specification in the Post Office Act to the effect that postal rates should be dealt with only by parliament through an amendment to the Post Office Act. If this procedure had been followed, the Postmaster General (Mr. Lamon-tagne) obviously would not be in the dilemma he is in at the present time.
My question is on the specific point regarding who decides what groups, publishers or periodicals have the special privilege of second class mailing rights. It is obviously some mysterious committee deep down in the bowels of the Post Office Department somewhere.
Incidentally, when we get to the Crown corporation issue, this whole business of postal rates will have to be dealt with in a more forthright manner. Lor example, why do the Postmaster General and the Post Office Department exclude controlled circulation magazines, which represent one of the growth industries in Canada and which deal exclusively with Canadian topics? The magazines are published in Toronto and Montreal. They are magazines in every sense of the word. They have Canadian content only and deal with cultural matters, yet for some inexplicable, mysterious reason the Post Office has refused to give them the second class category mailing privilege. Rather, the Post Office has placed them in the third class category. How does the Post Office Department reach its conclusions, in secret, about these special, privileged groups under the special category of postal rates?


Maurice Lamontagne: Mr. Speaker, I do not know what the hon. member is implying regarding a secret way of deciding who gets special rates. Very clearly, there are certain conditions regarding second class. Nobody makes decisions because he likes or does not like a certain publication. The act clearly provides for certain rates. Nothing is done arbitrarily because of mood or anything like that. There are very precise conditions. Certain mail is put into certain classes, to which certain rates apply.


Walter Gilbert Dinsdale: If that is the case and if all magazines are included, particularly those with Canadian contents, why are direct controlled circulation magazines-I believe they are called that-excluded from the second class privilege, when they meet all the criteria?


Maurice Lamontagne: I cannot list all the criteria involved in putting publications into certain classes which involve special rates. Nothing is done arbitrarily, and everything is very well judged.
Certain conditions must be met before publications are put into special categories.


Walter Gilbert Dinsdale: It is a matter of opinion.


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, 1 would like to pose a few questions to the Postmaster General (Mr. Lamontagne). The minister mentioned the postal users' conference which was held, I believe, on September 27, 28 and 29. The minister said that the chairman of our caucus Post

November 20, 1978
Post Office
Office committee and our official critic, the hon. member for Brandon-Souris (Mr. Dinsdale), was not there. I was there taking his place for the entire convention, and I reported back to him. Much excellent information was presented at that postal users' conference.
Postal users account for about 83 per cent of the total revenue of the minister's department, and I wonder when all the material which was presented at the conference will be studied by the department and when it will be made available. That might tell us a few stories. It might tell us about what the big users are thinking.
I wonder if the minister realizes that these drastic rate increases might be killing the goose that laid the golden egg and that the postal users may revert to some other method of delivery. I am thinking of magazines which might end up being delivered door to door. If that happened, the Post Office would lose.
I have great sympathy for the small weekly newspaper industry. I have spoken time and again on its behalf. Are weekly newspapers still getting a 40-mile preferential rate? Will the rate for weekly newspapers going further than 40 miles be increased? Postage for weekly newspapers going further than 40 miles is already at an astronomical rate. Some newspapers are now charging $20. I know many weekly newspapers go to the United States, and if there is an increase those subscriptions will be stopped. The Postmaster General might say that he is not interested in circulating weekly newspapers beyond 40 miles, but I would appreciate his comments in that regard.
One other matter: is the three-cent increase for first class letters carved in stone, or is it negotiable? That is the highest increase I can recall ever being put into effect at one time. The Postmaster General did test the water and make noises that the increase may be one cent or two cents, but I am surprised at three cents. As was mentioned earlier by the hon. member for Nickel Belt (Mr. Rodriguez), this is really a big increase. I would appreciate the Postmaster General's comments on what I have said.


Maurice Lamontagne: Mr. Speaker, I know that the hon. member was at the users' postal conference. Regarding the cost of mailing an individually addressed, daily newspaper the cost is to increase from three cents to 3.8 cents. As far as certain weekly Canadian newspapers go, they will still enjoy a free mailing within a radius of 40 miles under their stated conditions. I was able to spend a good deal of time at the postal users' conference despite the fact that it was held at the same time as negotiations were being conducted with LCUC. There were reports given by many firms, for example, the Retail Council, Canadian Manufacturers' Association, Canadian Telecommunications Carriers, Robert Simpson Co., a major user across Canada, and many others. The consensus among these users with regard to rate increases was that as businessmen they understood that there must be a raise coming.

At this time we sounded out the market through the various users to determine how far we could go without causing harm to the market or to the volume of mail going through the postal system. As a result of these consultations we arrived at a rate increase of three cents. In general, the users felt that they could handle this increase so long as it was not higher than other people pay. They stated that they wanted continuity and consistency in service. We informed them that we would try to keep the service consistent in spite of the difficulties we were having with labour. They also said that they understood the logic of users paying more. These were the principles upon which we based our rate in our attempt to balance the users' share with the share of the Canadian taxpayers.


John R. Rodriguez: Mr. Speaker, on October 16, 1978, the Supreme Court of Canada tossed out an appeal by the Post Office which would have resulted in over $2 million in pay to 2,700 workers. Would the Postmaster General (Mr. Lamontagne) tell us whether he intends to accept that decision by the Supreme Court and whether he will make sure that the collective agreement with respect to casual help, clause 39.07, is followed by the Post Office and does not lead to 2,700 more grievances?
Can the Postmaster General also assure the House that at this particular time under the collective agreement he will abide by that decision until such time as the med-arb comes down with something different?


Maurice Lamontagne: Mr. Speaker, the first question asked by the hon. member is not relevant to the discussion this afternoon. He can obtain the answer when I table the estimates or at committee, but not here.


John R. Rodriguez: Mr. Speaker, I rise on a point of order. My point of order is with regard to this announcement made by the Postmaster General this afternoon which deals with projected increases in rates. The reason for the increase is because there has been an overrun in terms of what the taxpayer must pick up. Surely the way in which the collective agreement is honoured, and if they are going to continue to run up these increases of over $2 million, is related to the increase in rates. There is a connection there, and the Postmaster General is responsible for telling the Canadian public that he will honour the collective agreement so we do not have these cost overruns.


Mr. Speaker:: I would not have gone so far as to rule that the hon. member's question was off the point, but I cannot say that I am surprised that the minister has made the reply that today he is talking about a rate increase, and to try to answer questions under the umbrella of labour relations, particularly with respect to a Supreme Court of Canada decision, is stretching the point.
I will conclude the questioning with two other members, the hon. member for Hamilton West (Mr. Alexander) and the hon. member for Oxford (Mr. Halliday).


Lincoln MacCauley Alexander: Mr. Speaker, I would like to clear up a matter raised by the Leader of the
November 20, 1978

Opposition (Mr. Clark) and the hon. member for St. John's East (Mr. McGrath). As I understand it, the minister indicated that he would discuss with the Secretary of State (Mr. Roberts) whether or not this memorandum of agreement should be tabled. What we want is an assurance and/or an undertaking by the Postmaster General (Mr. Lamontagne) that he will recommend to his colleague, the Secretary of State, that the memorandum of agreement entered into by both of them will be tabled. In other words, I do not want a discussion, but an assurance and/or an undertaking that the Postmaster General will recommend to him-in other words, he will accept what we are talking about this afternoon-that this document be tabled as soon as possible.


Maurice Lamontagne: Mr. Speaker, I am not refusing to table the document, but before I decide anything I think that it would be wise to discuss the matter with the minister to determine whether he agrees or not.


Mr. Bruce Halliday (Oxford):: Mr. Speaker, as the debate closes I think that it would be appropriate to indicate to the Postmaster General (Mr. Lamontagne) that there is a reservoir of milk of human kindness on this side of the House toward the minister. I would like to congratulate him for having the courage to come before the House with his statement today, because over the past few years we were very unused to having this kind of statement made by the government.
My concern in rising now has to do with the minister's comment and emphasis upon the consultations he has had with the users in Toronto. Generally he is to be commended for that, and I am sure that the Postmaster General has consulted with his cabinet colleagues and his officials. On several occasions during the past year and a half we asked the Postmaster General to consult with the House of Commons, but so far he has not. A number of times we have asked the Postmaster General to set up a parliamentary committee to study the whole problem of the Post Office, and on one occasion he even indicated that if there was continuing difficulty he would be glad to do so. It seems to me that the difficulties are continuing.
Today the Postmaster General is confronting us with rate increases that may not be justified, but they may be justified if, as he says, we look at the situation around the world. Would the Postmaster General tell the House why he refuses to set up a parliamentary committee? Is it because his cabinet colleagues advise against it, or is it because his officials, who know that there are certain reports available, which we have not seen, that are not complimentary to themselves, will be offended and he therefore refuses to set up a committee?


Maurice Lamontagne: Mr. Speaker, there is no question of setting up a parliamentary committee at this stage because I do not see how it could help in view of the fact that within the next couple of weeks we will probably be presenting a bill converting the Post Office to a Crown corporation. This bill will go to committee and hon. members will be given the opportunity to ask all the questions they want. I am sure that
Order Paper Questions
in view of the number of studies that have gone on in the Post Office over the last six or eight years, including the last study headed by Mr. Darling and the two days of discussions at the users' postal conference, that hon. members will agree that a parliamentary committee at this stage would serve no purpose.


Bruce Halliday: Mr. Speaker, I would like to clarify the Postmaster General's commitment and ask him whether he will permit us to call any witnesses that we choose before the committee?


PETITIONS
James Aloysius McGrath: Mr. Speaker, having tried every other way to get the Government of Canada to build a badly needed wharf in the community of Harbour Main, Newfoundland, we now resort to this final alternative, which is a petition to this honourable House. I therefore present a petition from the residents of Harbour Main, Newfoundland, calling upon the government to replace the wharf which was destroyed by a storm. The wharf is absolutely essential for the people of that community to carry on with their livelihood of fishing.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Roger Young (Parliamentary Secretary to Solicitor General):: Mr. Speaker, the following questions will be answered today: Nos. 140, 253 and 281.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Mitges: 1.	For the Fiscal year ending March 31, 1978, what amount of the budget of the Multiculturalism Directorate was used for travelling expenses (a) in Ottawa (b) in Canada but outside Ottawa (c) outside Canada?
2.	In the case of travelling expenses in the city of Ottawa, what amount was spent on taxi fares?
3.	In the case of travelling expenses in Canada but outside Ottawa, what amount was spent on (a) inter-city travel (i.e. train fare, bus fare, air fare on commercial flights, car rentals and taxi fare (b) hotel and motel accommodations (c) taxi fares and car rentals (not including travel between cities)?
4.	Was any part of the budget of the Multiculturalism Directorate used for car rentals and, if so, for what purpose were the cars rented and, in each case (a) who were the passengers (b) what distance was travelled (c) what was the cost to the government?

November 20, 1978
Order Paper Questions
5.	With respect to travel between cities in Canada, how many times were government aircraft used and, in each case, who were the passengers?


Hon. Norman A. Cafik (Minister of State (Multiculturalism)):: 1.	(a) $1,173.30
(b)	69,747.40
(c)	1,986.40
2.	$1,173.30
3.	(a) $37,850.35
(b)	12,247.85
(c)	8,186.40
4.	The cars were rented for official government business.
(a)	Nil
(b)	2,528 miles (14 occasions)
(c)	$746.64
5.	Government aircraft were used on eight occasions when the director of multiculturalism accompanied the minister and his staff on official government business.


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


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


Mr. Cossitt: 1.	Did the Export Development Corporation guarantee a loan of one billion dollars to the Republic of Panama and, if so, on what date?
2.	Will such funds be used to develop copper mining and, if so, will this therefore be in direct competition with similar industry in Canada and, if so, what are all the reasons that the government can justify guaranteeing funds to other countries which could indirectly result in the undermining of Canada's industrial structure?


Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: In so far as Export Development is concerned: 1. By tradition and as a matter of commercial principle parliament has not required the corporation to give details of its activity in individual transactions. When the corporation has concluded arrangements for financing an export sale, the commercial confidentiality thereof is no longer an issue, and then it can and does publish the facts.
2. Please see the answer to part 1.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, November 17, consideration of the motion of Mr. Chretien that this House approves in general the budgetary policy of the government and the revised amendment of Mr. Stevens (p. 1249).
Mr. Speaker:: Order, please. There is a procedural matter which I should have attended to before calling the hon. Leader of the Opposition (Mr. Clark). I hope he will give us his indulgence for just one more moment. On Friday there was a procedural dispute about the regularity, in the first place, of an amendment, and in the second place, of a subamendment.
The result of that discussion was the setting aside of a subamendment with leave for the reintroduction of an amendment with procedural regularity with the understanding-and I am addressing myself to that point now-that no other subamendment would be received until such time as another member of the New Democratic Party had an opportunity to introduce it. It would seem to be more regular that a member, who does not intend to speak to the subamendment, could introduce that subamendment now. Simply by introducing it, that would be technically considered to be a speech. But as long as it is a member who is not intending to speak to the subamendment, no prejudice is done to the speaking rotation, and it would not in any way prejudice the right of a further member of that caucus to speak later. Then at least the subamendment would be on the record during the debate this afternoon. Is that agreed and so ordered?


Some hon. Members:: Agreed.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, thank you for not only giving me the floor but for explaining the situation. I gather that I am being charged with a speech, even though I shall not make one.
I rise on behalf of my party, in the absence of the hon. member for Waterloo-Cambridge (Mr. Saltsman) whose subamendment on Friday was ruled out of order, for reasons we need not go into, simply to present our amendment to the amendment which is before the House. Therefore, I move, seconded by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas):
November 20, 1978

That the amendment be amended by deleting therefrom the words "the continued acquisition of private corporations by the government and," and by changing the period at the end of the amendment to a comma, and by adding immediately thereafter the following words:
"and condemns the government in particular for carrying out a policy of
deliberately high unemployment."
Thus endeth my speech.


Mr. Speaker:: Therefore, the question is upon the amendment to the amendment.


Charles Joseph Clark: Mr. Speaker, I am sure one of the intentions of the hon. member for Winnipeg North Centre (Mr. Knowles), in introducing the amendment was to ensure that should I seek the opportunity, I will have an opportunity to speak twice in this budget debate, after the amendment which he now introduced is disposed of by the House.
As this afternoon moved along, I was beginning to think that through no choice of my own, 1 might be forced into on of the several reprehensible habits of the Prime Minister (Mr. Trudeau), which is to make statements and speeches only after six o'clock. I am pleased that did not happen, and to have an opportunity to speak to the House while the afternoon is still upon us.
It is of some significance that this part of the budget debate was delayed to some degree by the introduction of a statement by the Postmaster General (Mr. Lamontagne), dealing with the situation in the Post Office. When the government took office, the Post Office was operating at a slight profit. Now, after ten years of the government's continuance in office, it is running at a deficit of nearly half a billion dollars. Indeed, it proposes to pass the burden of that deficit along to ordinary Canadians who can least afford it. These ordinary Canadians have been counting upon the mail as a reasonable service.
This is not the first time this sort of thing has been done. It is precisely the same situation as in the case of who pays for the mistakes made by government in terms of its Taj Mahal and air transportation policies. The government built airports like Mirabel and others in the country, which were far beyond the needs of the nation. Then it passed the burden along, as the minister proposed in his budget the other night, to ordinary Canadians who are required to fly. As a spokesman for Quebecair indicated the other night, it ensures that the particular and hardest burden lies upon those Canadians living in some of the smaller centres of the country, who fly in and out of Newfoundland, Atlantic Canada and northern Ontario. They will be paying more regularly that kind of extra burden than will citizens who fly in and out of some of the larger metropolitan airports of the country.
The series of events in relation to the budget would have almost comic character to them, if they were not so serious. We have a Minister of Finance (Mr. Chretien) who is introducing in effect his third budget; at least his third new pair of shoes in 14 months.


Joseph Jacques Jean Chrétien: Second.
The Budget-Mr. Clark


Charles Joseph Clark: Is the minister talking about a pair of shoes or the budget?


Joseph Jacques Jean Chrétien: The shoes.


Mr. Martin:: Both.


Joseph Jacques Jean Chrétien: Both. I want the record straight.


Charles Joseph Clark: Naturally I am reluctant to accept the minister's judgment on matters relating to the economy, but on matters relating to a pair of shoes I am prepared to trust his assessment.
I understand that the other night the Minister of Finance in speaking to television, or the enemy as the government characterizes them, said that he will not bring down another budget before an election. I imagine the emphasis was upon his not introducing another budget, because there is some very real suspicion on this side of the House that there will be another budget and another minister before we go to an election some time in the spring after five years of delay.
Another element of the comic character of what has been going on has been that the minister has three major stimulants to his credit. The first was the two-month tax holiday which was effective the beginning of this year. It was supposed to help increase our gross national product. Indeed, the GNP went up by .7 per cent in the first quarter. Then he talked about his employment tax credit, which was the second stimulant he was to introduce. It was to provide 50,000 new jobs for Canadians. Well, it is providing 8,000 new jobs for Canadians. The minister is wrong by approximately 85 per cent. Once again, the six-month wonder of the reduction in provincial sales tax was timed not to boost the economy but to attempt to boost the prospects of the Liberal party in the election. As the need for stimulus becomes more acute as winter comes on, that kind of stimulus is withdrawn.
As I will indicate later on in my remarks, we are left in a situation where for the remaining months of this year-the hard months, the winter months-there will be less stimulus provided by the government for economic growth in the country than there was in the relatively easy months prior to the termination of the provincial sales tax arrangement.
Again it is the minister whose forecasts are always wrong. In fact he is so wrong in his forecasts, I would suggest that after his defeat in the next federal election he might want to move to Toronto where he can support the Argonauts. I know of no other group of people who are so often wrong in their forecasts.
Some lion. Members: Hear, hear!


Charles Joseph Clark: Again in terms of being frank with the House of Commons, this is a minister who has brought in statements we find difficult to accept as complete. We know, for example, that when he talks about his deficit figures, those deficit figures exclude at least $854 million in liabilities incurred by

November 20, 1978
The Budget-Mr. Clark
the Government of Canada through three Crown corporations alone. We do not know, because he will not tell the whole truth to the people of Canada, the full extent of the rest of the obligations that have been incurred by this government or its agencies but which count against the accounts and the credit of Canada and which should be considered as part of the deficit this government has built up.
Finally, sir, in terms of the comedy we face, we have the explanations, which vary, as to just who exactly is at fault here. One moment it is the weather that has caused all these problems in the Canadian economy, then it is the Arabs, then from time to time it is Rene Levesque, and from time to time it is me. The Minister of Finance said I was causing all the problems in the country. Now he has discovered another enemy. It is the media that is causing all the problems in the country. Indeed, if you read his budget, or if you were listening to him the other night, you will have noticed he has one more cause for Canada's economic problems. Who are these people who are working against the interests of Canada? They are the coal miners of the United States of America. They are the culprits, the coal miners of the United States who are causing all the problems we are having here.
I suppose the minister read that in his conflicts with John L. Lewis, Harry Truman, who was a legitimate street fighter, came out on top. Even though the spirit of Harry Truman does not really linger on over there, and John L. Lewis is gone, perhaps the minister thought some luck might rub off if he too were to ascribe all Canada's economic difficulties to the members of the United Mine Workers of another country.
In fact, the reality in this country is that other nations with whom we should be compared are doing considerably better than we are, and the reality is that we have the highest unemployment rate in the western industrial world-a country with the potential of Canada-that our inflation rate is second only to Italy among nations in the industrial world, and that those problems were caused not by some foreigners, not by some coal miners in some other country, but were caused by the incompetence of this government on the other side of this House.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: What is perhaps most alarming to Canadians is that we recognize now that, particularly with the decline in the United States and with the absence of any stimulus, no one outside this country is going to help this country up. The only people who can build this country up are Canadians themselves, and the only way they can do that is with leadership from the government. This government indicated the other night that it intends no leadership at all. So the obligation is clearly upon us, and it is an obligation we will accept as soon as the Prime Minister finds the courage to move from making speeches to calling elections.


An hon. Member:: Canadians have that choice.


Charles Joseph Clark: I understand the interjection from an hon. member from, of all places, Scarborough, was that Canadians
[Mr. Clark.)
had the obligation to make that choice. Well, the Canadians in Scarborough made that choice not long ago.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: There are some aspects of this budget that we think valuable. We are pleased to see that, after rejecting it for a long time, the government has finally accepted our view that there should be some movement toward a reduction of the manufacturing sales tax at the federal level, although we think it should have been more selective in its cuts rather than across the board. We are very pleased that the government has finally moved to encourage activity again in the creation of jobs in the mining industry in the country. I was a little amused to note the minister said in his budget address, "I want to take the lead here." We know what happened. The minister was with the provincial ministers of finance who made it very clear to him that unless the federal government stopped putting obstacles in the path of mining development, there would be no help from the provinces. It was the pressure from the provinces that caused this government finally to make the changes that will perhaps create some growth in the mining industry in Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Again we are pleased to see that the government has begun to move toward the encouragement of research and development. This government, which under the former Prime Minister, Mr. Pearson, as one of its first acts began the discontinuance of the incentives to research and development that had been introduced by the hon. Georges Hees when he was the minister of trade and commerce in the Diefenbaker government, is moving again in this direction. The Conservative government brought in the incentives which the Liberal government then abandoned for ten long years. We are pleased to see them coming back.
I have to say to the minister that I am sorry the government has not accepted the detail of my advice in this regard, and that the government is not giving more attention to directing the research and development incentives in this country toward a focusing upon those companies or innovators who will deal with specific Canadian problems or specific Canadian potential, because our R and D problem in this country is aggravated by the fact that there is so much leakage to head offices elsewhere. What we need in terms of an effective research and development policy and approach in this country is a policy which will focus in upon those Canadian innovators who will face Canadian problems and deal with Canadian potential and not be tempted to leak this away to head offices in some other countries.
I have indicated that over-all there are some specific matters we find of value, not the least because we proposed many of them. We are getting used to that on this side of the House. In over-all terms this is a budget that provides no real stimulus. My colleague, the hon. member for Don Valley (Mr. Gillies), got the minister to admit today that its purpose is not to deal with inflation, and its purpose is not to create jobs for Canadi-
November 20, 1978

ans, because it is not going to deal effectively with inflation and it is going to create new unemployment in Canada rather than create jobs for Canadians. The government's purpose is simply to try to survive.
I see the minister holding up three fingers and I will come to what he means by those three fingers a little bit later. The fact is that those three fingers should really be taken as indicating strike one, strike two, and strike three.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: What we have here is a government with a budget that has no real stimulus, a budget with a larger deficit, the effect of which will be stagnation, as usual, of the Canadian economy. It is a budget that promises, as I say, to create more unemployment. We already have the worst record in unemployment in the industrialized world, but his minister is going to make it worse.

The Minister of Finance (Mr. Chretien) mentioned the creation of some 250,000 new jobs for next year. If the rate of real growth is between 4 per cent and 4'A per cent, this prediction-and we must admit that the Minister of Finance has not been very successful up to now with his predictions- this prediction, should it come true, will only make certain that a still larger number of people will be unemployed because it has already been established that 325,000 new people will join the labour force. This figure has already been confirmed, and the new incentives contained in the budget will create at most
250,000	new jobs. Who will look after the 75,000 other people without jobs?
The right hon. Prime Minister (Mr. Trudeau) stated recently in Toronto that with his Quebec members he can represent Quebeckers best. The problem stems from the fact that the right hon. Prime Minister is taking Quebeckers for granted, and based on this assumption, he comes up with all sorts of measures which create unemployment. How could he speak on behalf of workers when unemployment is particularly severe in the province of Quebec? What is needed are new members who will increase possibilities for Quebec, namely Quebec Progressive Conservative party members who will not accept policies or budgets conducive to unemployment. All I can say, Mr. Speaker, is that if there are unemployed in Quebec, the Liberal members will be among them.


Prosper Boulanger: That's a good punch line.


Charles Joseph Clark: I am very pleased that my friend from Quebec got the first punch line, because when the election comes he will be sure to get the second punch line.
The Budget-Mr. Clark


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The excuse that we are being given here for a budget that stimulates nothing at all is that the government has very limited room to manoeuvre. Well, Mr. Speaker, who limited the room to manoeuvre of the Government of Canada? Indeed, how good were the choices which were made in that limited room to manoeuvre? We are in a deep deficit position today in this country, and the question has to be asked: why we are in that deep deficit position? Did it just happen overnight? Did somebody else do it? Was it really the coal miners, the Arabs, or somebody else? Or was it, perhaps, successive ministers of finance, some of them now reduced to writing memoranda, who have occupied the treasury benches of the government opposite?
Let us take a look at what happened in years when the people of Canada did not need spending by government for economic stimulus. In some of those years this Liberal government deepened the deficit of Canada by increasing budgetary spending 17.3 per cent in 1974, 18.8 per cent in 1975, 26.5 per cent in 1976, and 19.3 per cent in 1977. You speak about limited room to manoeuvre. Now you know who limited the room. It was yourself and the other ministers in the Trudeau Liberal government of Canada who have been mismanaging the economy of Canada for the last ten years.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: One problem that we face as a country is that this government has developed a virtually incurable spending habit. But it has also dangerously crippled some of the natural strengths of the country. We talked earlier about research and development. I see the new member for Westmount (Mr. Johnston) is in his seat. I want to say one thing about his predecessor, a man I generally admired. In my judgment, one of the most dangerous decisions for Canada ever to be taken by this government was the decision that went out over the name of the previous member for Westmount, when he was minister responsible, that we in this country will buy our technology elsewhere, because by abandoning the responsibility for research and development and innovation in Canada, we drove hundreds, indeed thousands of innovators, researchers and scientists out of this country.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Unfortunately, sir, that policy is being carried on today as the Government of Canada shuts down research station after research station across the country.


Mrs. Sauve:: Not so with telecommunications.


Charles Joseph Clark: Telecommunications is an interesting case because of what has happened in the field of telecommunications.
Let me come to another Field where the Canadian capacity to grow has been crippled by this government, that of small business. We now have a government department that deals

November 20, 1978
The Budget-Mr. Clark
with government bureaucracy. Government service to small business in this country is to try to cut down some of the government paper with which the government has been smothering small business for years. That has been the total effect of their policies up until this budget. There are a few more proposals that they are following now.
Clearly, what is needed here is a far more comprehensive small business encouragement policy. What is needed here is what I have proposed several times across this country, namely, a tax incentive in the form of a tax credit up to a maximum of $5,000 a year available to those Canadians who are prepared to put their money into Canadian-owned small business. We need that, we need it now, and it should have been in this budget. It will be in ours.
We need to move quickly to give permission to small businessmen to form consortia for competition internationally. I know that is part of a stillborn bill that this government introduced, as it introduces so many stillborn bills. But that provision should be taken out of the bill and put into law right now so that we can allow and encourage small business in Canada to get out into the world and build upon their industry and their opportunity, and so they can form the kind of consortia in Canada with which they have to compete abroad.
Again, sir, this government has to begin to take seriously its obligations, followed in other countries like Japan and the United States-countries with which we have to compete-to shape its purchasing policy in a way that does not buy everything from the government's friends in the big corporations but instead extends a certain strong proportion of its purchases to small Canadian entrepreneurs and small businesses. Again that is what we are going to do as a government, given that opportunity.
There have been a number of other fields, sir, in which the actions of this government have crippled the Canadian capacity to compete in the world. We have spoken of the mining industry in which we have lost thousands of jobs as a result of stagnation stemming from the conflict between governments in regard to mining policy. Another field that has clearly been damaged severely in this country is agriculture, which used to be among the priorities when Canadians went abroad to negotiate but is now a matter whose interests are traded away.
I could give many, many other examples, Mr. Speaker. Think of the negative impact upon this country of the tremendous investment outflow. In the 30 years prior to 1974 money used to come into this country. This was a country to which people came from around the wide world to invest. But in the last three years more Canadian money has been invested outside Canada than foreign money has been invested in Canada. That is a mark of the lack of confidence that investors here and around the world have in this government.
That is some of the damage that has been done, Mr. Speaker. The Trudeau government has made Canada's position very difficult. Given that difficult position, it is now making the wrong choices in regard to what we need to do to improve our situation. The government claims now to acknowledge the need to combine a policy of restraint and one of

stimulus. It claims to acknowledge that, although I remember the President of the Treasury Board (Mr. Andras) saying earlier this year, on February 22, 1978, when being pressed from this side of the House to make reductions, "We are cutting the fat wherever we can". That is what he said then, and the implication was that there was nothing more that they could cut. That was before the first of the series of nocturnal admissions on August 1, when the Prime Minister announced that he had discovered these new areas in which economies could be made.
The fact, sir, is that throughout this budget, indeed throughout the term of office of this government, there has been too little restraint and too little stimulus. I want to speak about restraint. The restraint announced on August 1 reminds me of the one consistent element of the government's economic policy, and that is that when the government has anything important to announce it sends the Minister of Industry, Trade and Commerce (Mr. Horner) out of the country. On August 1 the government sent him to Japan. When the Minister of Finance finally decided on a budget date, they sent the Minister of Industry, Trade and Commerce down to the Caribbean. I understand there have been other ministers on that side who have been travelling around the Caribbean lately; the Minister of Consumer and Corporate Affairs (Mr. Allmand) did. I am given to understand that some of his officials in his department thought that he should have taken along the expert who knew what was being discussed at the conference that he attended, and that they took up a collection to send the relevant expert,


James Aloysius McGrath: That was the commissioner for patents.


Charles Joseph Clark: Yes, the commissioner for patents. And knowing the esteem in which the Minister of Industry, Trade and Commerce is held by public servants, I would not be surprised if his public servants took up a collection to try to keep him in the Caribbean.
The government announced a program of restraint by surprise on August 1. A lot of us were wondering what pattern was going to be followed in this period of restraint. We wondered what would be the priorities, what would be the guidelines that would lead the government to decide where to cut and where not to cut. It was very, very difficult to come to any sensible conclusion, looking at where the cuts were made. I thought 1 had discovered a pattern at one point. I thought that they were cutting where the ministers were weakest and that it was simply a matter of who around the table could argue most strongly for their private empire.
I know it is difficult, Mr. Speaker, to try to make any comparison of strength and weakness in a cabinet like this one, but I thought for a while that that was the standard. I think I was wrong. I think it is increasingly becoming clear now that the Government of Canada-and this is a very serious matter-applied restraint to projects that it knew were popular enough or necessary enough that there was going to be very strong protest. Ministers wanted to go out into the country and say, "Look, we are restraining; we are cutting back. How can you tell we are cutting back? Sure, we are taking airlines to
November 20, 1978

Grey Cup games and things like that, but how can you tell we are cutting back? Listen to the screaming. Look at the people who are complaining". In other words, what they were interested in when they established their list of targets for restraint was not the size of the saving; they were concerned about the size of the protest. If the protests were strong the government could take that as proof of its own seriousness about restraint.
That, like so much that was followed by this government, was a very short term strategy. The proof that it is a short term strategy is that the government has already been forced to back down on some of the particularly foolish proposals for restraint, proposals such as the phasing out of forestry stations, the phasing out of weather ships on the west coast, the phasing out of weather forecasting which could have meant a matter of life and death in the province of my colleague from St. John's.
The real proof that the so-called restraint of this government was a fraud, the real proof of the fraudulent nature of that restraint, was given to the House in the eight days immediately before the minister brought down his budget. It became clear then that this remains a government that, given the opportunity to extend its own control over aspects of the Canadian community where it should have control, is prepared to spend without restraint. It did that in the case of Nordair and the attempt at the Pacific Petroleums Ltd. acquisition.
What is significant and what indicates how fraudulent this commitment to restraint is, are the things the government has not cut. First of all, there has been a very insignificant cut, certainly not as significant as is possible, in the practice of contracting out. This is a very dangerous practice, dangerous to our system of government because it allows a government that wants to, to get around the protection against patronage, to get around the protection against incompetence that is built into the Public Service Commission, that is built into the system of ensuring we have a government that makes its decisions in accord with the facts and not in accord with improper pressures, and makes its appointments with regard to competence and not with regard to friendship.
There has been an immense increase in contracting out by this government, Mr. Speaker. Indeed the cost of contracting out has increased six and one half times in the period this government has been in office, from $214.9 million in 1968 to $1,424 billion in the latest year. That is a six and one-half fold increase in contracting out.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Mr. Speaker, I hear some protests from ministers on the other side. There is no question that there may well be some areas in which contracting out makes sense, but there is also no question at all-it is always easy to tell when one strikes close to the bone, Mr. Speaker, because ministers start to complain. It is also very, very clear that there has been an immense capacity for abuse not only of spending but of controls to ensure that there is protection against patronage. That capacity was there, and I suggest that if this was a
The Budget-Mr. Clark
government that was very seriously concerned about practicis-ing restraint we would have had some significant cuts in the practice of contracting out.
One of the areas where there has not been a dramatic indication of a determination to have restraint has been in relation to that invention of the Prime Minister in the Canadian political system-in effect, I believe, a cancer in the Canadian system-the building up of the strength of the Privy Council office and the Prime Minister's office at the expense of the cabinet, at the expense of parliament, at the expense of democracy in this country. During the first six months of fiscal 1979, the year of restraint, spending on the Privy Council office has increased by 86 per cent. The Privy Council office hired 80 new people last year. The Prime Minister's office hired 54. Perhaps these people are all necessary; perhaps they are the people who will administer restraint in the country. I cannot be sure about that, but what is clear is that the one agency of government that has been most free of restraint has been the agency that encircles the Prime Minister. In terms of establishing policy direction in this country it has taken the place that used to be occupied by cabinets when cabinets were filled with strong people determined to represent the interests of the regions from which they came.
As I mentioned, Mr. Speaker, the most dramatic example of the fraudulent nature of restraint came in the two most recent acquisitions. I say most recent because we do not know what they are going to try to buy up next. They went into the private market to spend $28 million on an airline. They say they are going to get rid of it after a year, but they have said that before about other Crown agencies. They said that four or five years ago-


Joseph Jacques Jean Chrétien: What about Pacific Western?


Charles Joseph Clark: I see the Minister of Finance is suggesting that the Government of Canada is now taking the government of Alberta as a model. I would simply suggest to him that, if he is going to do that, there are a number of better areas than in relation to the acquisition of aircraft. I say to him also, Mr. Speaker-

-and it might be essential for me to point out the fact that one of the differences between the situation with the airline owned by the government of Alberta and the airline bought by the Government of Canada lies in the fact that other people were able to buy Nordair-

And that was not the case in the Pacific Western Airline's situation. Nonetheless, the government practised restraint by spending $28 million on an airline it does not need, an airline for which a private purchaser was available. It was not exactly a fire sale in the case of Nordair because Great Lakes Airlines Limited or other purchasers would have bought it. The Government of Canada, however, with the interest in control that was so clear in the speech made the other day by the Minister of Transport and Justice (Mr. Lang) and of the Wheat Board

November 20, 1978
The Budget-Mr. Clark
and anything else he can get his hands on-that instinct for control led this government to buy an airline it did not need, in absolute disregard for the restraint aspects of its policy.
Having struck out in their attempt to acquire Husky Oil for Petro-Can, they looked around and found another oil company. They incurred obligations of $ 1.4 billion in this period of restraint which they have tried to hide. One of the things that interests me about Petro-Can-


Mr. Railton:: Tell it the way it is.


Charles Joseph Clark: I am telling it the way it is. I am pleased that once again the good doctor, who served as such an effective foil for my colleague, the hon. member for York-Simcoe (Mr. Stevens) the other night, has taken an interest in this debate. If he knows the oil industry-


Samuel Victor Railton: Do not get personal or I will.


James Aloysius McGrath: Tell us about unemployment in the Niagara peninsula.


Charles Joseph Clark: The truth about Petro-Can, Mr. Speaker, is that since it became clear a government would be elected that intends to have the state move out of activities in which the state should not belong, the main exploration activity of Petro-Can has been in the boardrooms of other companies. Their means of discovering oil is to buy a company that has some, and buy it at the potential cost to Canada, the incurring of obligations by Canada of $1.4 billion.


Samuel Victor Railton: Oh, oh!


Charles Joseph Clark: Mr. Speaker, it is very difficult for me with the hon. member for Welland (Mr. Railton) shouting from across the way. I know that he does stand up to speak in this House from time to time, and I hope he will be able to influence his colleagues in the Liberal party to give him a place to stand and speak so that he will not have to make his whole speech by interrupting mine.
The other night the hon. member for York-Simcoe indicated that the great significance of buying an airline that was not necessary and an oil company that was not necessary is that the purchases indicate how wrong are the priorities of this government. In our judgment, we should be divesting ourselves of some of these Crown agencies we do not need and putting that money back into use in ways that will stimulate the Canadian economy. Even if the government does not accept that view, even if it does not want to rely on the private sector to generate growth and jobs in the country as we do, even if it wants to stay true to its own statist philosophy, surely it could have found better use for $1.5 billion than buying an oil company and an airline it does not need. Surely there are old age pensioners in this country who could have made better use of that money than the American owners of Pacific Petroleums.


Some hon. Members:: Hear, hear!
[Mr. Clark.)


Charles Joseph Clark: Surely there are a number of Canadians looking for homes who could put that money to better use. But instead this government, so intent on controlling everything it can, ignores the elderly Canadians and those Canadians who need homes, ignores the taxpayer in this country, ignores the legitimate priorities in Canada-


Joseph Jacques Jean Chrétien: No taxpayers' money.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Let us try to get some quiet in here because the Minister of Finance has made an important point. He has shouted from his seat that there is no Canadian taxpayers' money involved here. There is an obligation on the part of the Government of Canada to the extent of $1.4 billion. That obligation, if it comes to be honoured, will have to be paid by taxpayers' money. I am asked about the assets. I think it is understood that there has been a remarkable difference between the quoted market value for Pacific Petroleums shares and the value that is being paid by the Government of Canada.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: What about AGTL and Husky? The margin was bigger.


Charles Joseph Clark: The minister is making another speech from his seat. I heard him, but it is difficult to hear because there is so much shouting from over there. I heard him talk about Husky. I want to say something about Husky because the Prime Minister of Canada-outside this House naturally-defended the acquisition of Pacific Petroleums by saying that it was in the interests of Canadian ownership. The Husky deal showed that there is more than one way to acquire Canadian ownership of international oil companies. The private sector will do it when the private sector has an opportunity to do it. And speaking for this party, we would prefer to see private ownership in the energy industry accomplished by private Canadian entrepreneurs going out and building for themselves.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We believe there has to be a combination of real restraint and real stimulus. I want to spell out again the elements of the restraint program that we will introduce as a government. First of all, it will be permanent restraint, not the kind of cosmetic restraint that this government has talked about. It will be permanent restraint accomplished in the following ways, and accomplished in accord with three principles.
First, we will permanently reduce the operating costs of government. We will do that by not hiring new public servants when vacancies become open due to death, retirement, or by moving away. We have an immense respect for the capacity and ability of serving Canadian public servants. We know that many of them are frustrated and underutilized. We intend to give to Canadian public servants the opportunity to move into positions of responsibility in the Canadian public service, to which access is now denied them.
November 20, 1978


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We will follow that policy of attrition in public service size and of calling upon the best from Canadian public servants. That will result in a net reduction in the size and the cost of the Government of Canada. Second, we will introduce into the practice of the government and Parliament of Canada, some of the cost control techniques which this nation has been without for far too long. We are going to introduce zero based budgeting throughout the Government of Canada. We are going to return to the House of Commons, this parliament which was established to represent and protect the interests of all Canadians, all the power to control government spending.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I was not a member of this House at the time, but I am familiar with one of the first items on the agenda of this government, when it was first elected in 1968. Indeed, it forced a measure through parliament in 1969. I use the word "forced" advisedly because for the first time in the history of British parliamentary tradition anywhere in the world, this government changed the rules of parliament by the use of closure.


Some hon. Members:: Shame!


Charles Joseph Clark: They did that, sir, with one goal in mind. The goal was to take away from the House of Commons the power to control government spending.


Joseph Jacques Jean Chrétien: Not true.


Charles Joseph Clark: Absolutely true, and the record makes it clear. Recognizing that while it took the Trudeau government less than a year to undo the principles which were established centuries ago, we intend in forming a new government to give the highest priority, to bringing back reforms that will allow the then Leader of the Opposition-I do not know if the member for Mount Royal will hold to that office or open it up to the queue that is already forming behind him-to choose two departments whose estimates will be examined without any restriction of time. The choice will be made after all estimates have been prepared, so that estimates will be prepared in the expectation of the kind of scrutiny which is the only guarantee of responsible government.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Again, the third principle we will follow in terms of ensuring there is real restraint will be to get the government out of areas where it does not belong. Earlier today I talked about Petro-Canada. Petro-Canada is one of the classic cases of what can go wrong when the government gets in where it should not be. It is justified as being a window on the oil industry. I would not be surprised if other companies competing with Petro-Canada, particularly as Petro-Can now moves to larger and larger status, are less prepared and more reluctant to make confidential information available to a government regulator which they know is a regulator on one day and
The Budget-Mr. Clark
the owner of a competitive company the next day. I would not be surprised if it is having a negative effect and closing the window which the National Energy Board already has. That is one point in relation to Petro-Can.


Joseph Jacques Jean Chrétien: The French, the English, The Netherlands, everyone. You are of the sixteenth century.


Charles Joseph Clark: The Minister of Finance tells us there is a justification for the government's policy, that is, that other countries have oil companies.


Joseph Jacques Jean Chrétien: Yes.


Charles Joseph Clark: Other countries have monsoons, other countries have state police agencies, other countries have censorship rules, other countries have a number of things. Because they exist in other countries is no reason for them to exist here.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The standard which should be established and guide government decisions here is not what is good for other countries but what is good for this particular country, Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: There are two other reasons. I will not debate the whole Petro-Can matter. This determination to become involved in the private economy is dangerous. One of the reasons has to do with the conflict of interest between a government which owns one company and sets the rules for all companies. That is most evident in relation to the northern land regulations where the northern land regulations have been changed, quite clearly to give specific advantage to the company the government owns. It is just like anybody in this room who has a son who plays softball or baseball, if anyone has a daughter who plays hockey-as they should be in Barrie,-you know very well that if you were called upon to umpire a game there would be a strong suspicion among other parents and players that you are giving preference to your son or daughter. That is exactly the situation here. There is evidence of this because the northern land regulations have been changed explicitly to confer special advantage on the company the government owns.


Some hon. Members:: Shame!


Charles Joseph Clark: The other day in this House we had another indication of a conflict of interest. It was a conflict of interest of a very invidious kind because it put a leading and outstanding public servant in a very difficult position. I speak, of course, of the deputy minister of finance who is required by law to participate in confidential government budget decisions and is also required by law to sit as a member of the board of directors of Petro-Canada. He was put in the invidious position of knowing what Petro-Canada was going to do at a time when he might have been seized of knowledge about the budget. No Canadian public servant should be put in that situation. The minister is nervous. I ask him to check-

November 20, 1978
The Budget-Mr. Clark


Joseph Jacques Jean Chrétien: No, I would like to reply. It is dicey. Make an accusation if you can.


Charles Joseph Clark: One sign of panic and decay on the other side is that every time an issue arises, they say, "Make a charge". Well, I will make the charge that I have made. The Government of Canada has put the Deputy Minister of Finance in a very invidious postion. That is the charge. The people against whom the charge lies are the Government of Canada. The reason it is subject to that charge is because it is so determined to control so many of the activities in this country that would function better if they operated without the heavy hand of government.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Naturally our view of achieving restraint by getting the government out of activities where it should not be is opposed by some other parties in this chamber. It is opposed for different reasons.


Joseph Jacques Jean Chrétien: He is running away.


Charles Joseph Clark: If the Minister of Finance cannot make it as a shoe salesman, he will certainly make it as a humourist.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: There are two different kinds of objections. The Government of Canada, the Liberal party, which speaks most eloquently from its seat and to its discredit and sorrow speaks most eloquently by its actions, because by its actions it is known, as the last series of by-elections in this country demonstrated so dramatically, is concerned about divesting control of any of the more than 300 Crown corporations.


An hon. Member:: Three hundred and eighty-five.


Charles Joseph Clark: There are 385 Crown corporations which they like to control. It was very interesting listening to the Minister of Transport the other day talking about the process of de-regulation in the air industry in the United States which has brought down fares and increased usage, saying it would not work here. He said there are public interest factors which you have to consider. That is short for saying he does not want to let go of any of his control. That is really the philosophy of this government.
This is a highly statist government, and it is not for philosophic reasons. There are philosophic reasons to my left. It is because this government enjoys running things, even if it runs them badly.
The New Democratic Party are interested in public ownership because that is their ideology. It has been their ideology since the Regina manifesto. They have changed very few of their views since the Regina manifesto. That is, nonetheless, a relatively legitimate reason. Certainly philosophy is a more legitimate reason for a statist approach to government than

simply a desire to keep your hands on everything that moves, which is the control orientation of the Liberal party.
In relation to the NDP, I have had a chance to look at the amendment they have introduced.


Stanley Howard Knowles: Subamendment.


Charles Joseph Clark: As well as reading the Regina manifesto, it is beyond dispute that the hon. member for Winnipeg North Centre (Mr. Knowles) has also read the rules of parliament. The effect of that subamendment is to strike out the objection which we in this party take to the incessant acquisition by the Government of Canada of ventures which are better operated by others. That is the deleting effect.
The adding effect is redundant. It talks about creating employment in the country. It is redundant to our motion because our motion makes it clear that what we believe is necessary is a stimulant budget. There is no question that that kind of stimulant which I and my colleagues have outlined for some time, many elements of which have been adopted by the government, would provide the employment that is called for explicitly in the NDP motion.
I might say a word about Crown corporations. There is no question that in a nation like this, young, large, still developing, still a place that has to attract capital and develop its own capacity to increase its investment capacity to do the things we want to do but cannot quite do, there is going to be a continuing need to have the state intervene from time to time. However, the rule must be that the government should intervene as a last resort because it needs to, not as a first resort because it wants to intervene. Indeed, that distinction led predecessors of mine in the leadership of this party to establish some of the great Crown corporations and Crown agencies in this country, corporations like the Canadian Broadcasting Corporation and agencies like the Canadian Wheat Board. That is a tradition which is essential to this country.
There is no question at all that we must continue to have the state ready to move in as a last resort when the private sector cannot function. However, these Crown corporations and agencies established for one purpose at one point in time should not be above examination. We should look at them to see if they are doing what they were set up to do.
We should see if the country has matured to the stage where such activity is no longer as necessary as it once was. That is the approach that we in this party intend to take to a number of the activities in which the Government of Canada is now involved. We will do it directly in some cases, such as in relation to a Crown corporation like Petro-Can where our view is clear. We will do it by empowering this parliament through the sunset laws to examine the continuing need to exist of various Crown corporations and agencies so that we can improve those we keep and get rid of those that should not continue to be supported by public funds.
I can name some examples where it would be well to have a committee empowered with a sunset law, reviewing the need to keep as an acquisition something possessed by the Government
November 20, 1978

of Canada such as Canadian Arsenals, the Crown Assets Disposal Corporation and the Defence Construction Corporation. Do we need to keep those? Should we not be asking this kind of question rather than making the knee jerk reaction of, "Now that we have them, should not we hold them?"
Parliament should be acting now to reform activities like the Canadian Dairy Commission which has some areas that clearly need reform, as well as the pilotage authorities. Atomic Energy of Canada Limited clearly needs scrutiny and reform by this parliament. CIDA would benefit substantially from scrutiny and reform by this parliament, particularly in light of some of the recommendations of the Science Council, as would the Foreign Investment Review Agency.
Why should these be sacrosanct? Why should parliament be prevented from reviewing their usefulness and continued need to exist? Why should we put that prohibition upon ourselves at a time when it is so necessary for us to practice restraint and save the money of the taxpayers of Canada?

When I said that having partners was essential I was speaking of steps to restrain government expenditures; but today we also need strong incentives for barely half of the real economic possibilities in Canada are being developed. Our rate of unemployment is the highest of all industrialized countries; our rate of inflation exceeds all others with the exception of Italy. Almost all Canadian private forecasters claim that things will be no better next year.
In Canada, we can do much better than that. According to the Conference Board, even a rate of real growth of 4.75 per cent and a rate of unemployment of 5.5 per cent would increase the wealth of the nation by $41 billion within two years, wealth which could be used to generate new investments and new jobs. The Conference Board also believes that if those growth and job objectives were achieved this year and next year, federal and provincial government revenues would grow by over $13 billion, which would contribute immeasurably to restoring balance in the government accounts.
What we need above all is incentives. In the aggregate, our stimulants would include a decrease in federal income taxes of at least $2 billion in favour of Canadians who would spend that money quickly here in Canada; cuts in the mortgage rate and income tax up to fixed limits spread over a four-year period; a tax credit on investments for those Canadians who are willing to invest their money in small Canadian businesses; and specific steps to encourage research and development, to protect capital gains, to protect inventories against inflation and, in particular, to encourage regional development.
As I said earlier, the effect of the budget introduced by the minister the other night will actually be to reduce the stimulus for the remainder of the current fiscal year. The minister needed a tax cut of $750 million for the second half of fiscal
The Budget-Mr. Clark
1978-79 to maintain the stimulus which was given to the economy by provincial sales tax cuts. Instead of the $750 million which was needed, this budget provides only $300 million. That is by the minister's own admission. The stimulus is down for the remainder of this fiscal year. It is down, after the minister has failed to meet his April growth target. It is down at a time when we are heading into a winter of one million unemployed. At a time like that, the Trudeau government reduces the stimulus in the Canadian economy.
I want to talk for a moment about the budget process. I will not speak for much longer, but I want to talk about the budget process because part of what has gone wrong here in the last ten years is that this government has been so certain that it knew all the answers that it has moved away from people who might have other ideas and might have contributions and suggestions to make.
The minister has boasted that he had more consultation this time. He had a series of private and secret meetings across the country, and I congratulate him for that. That is a step forward, but it is still a step in the shadows. What should be happening is that this kind of consultation should be taking place here in the open. I say "here" advisedly because, before a budget is brought down, the obvious place for discussion of the economic climate and economic potential of this country is in a committee of the House of Commons. That is what we are here for. That is what parliament was established to do. If we were able to do that, we would be able to invite, to a committee of this House, the consumers' association, the manufacturers' association, the Canadian Labour Congress and all groups which have legitimate interests in national economic policy. We would be able to sit down with them, as well as with representatives of the C. D. Howe Institute, the Fraser Institute and a number of other private agencies which are concerned about economic policy. We would have public discussions which would increase and improve public understanding of the economic problems and the economic potential of this country.
Other countries do that, and we need to do that. As a government, we are going to do it as part of our reform of parliament.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: A reform which we will introduce will be the annual publication of five-year spending forecasts and five-year revenue forecasts of the Government of Canada. What is almost unbelievable and almost impossible for me to accept is that in the United States, in the United Kingdom and in Canada there are five-year revenue projections and five-year spending projections, that in the United States they are published, that in the United Kingdom they are published, but that in Canada under the Trudeau government they are kept secret.
Why are they kept secret? Why should parliament not know what public servants know when they set budget policy? Why should the people of Canada not know about the implications, five years down the line, of budget policy which is being

November 20, 1978
The Budget-Mr. Clark
brought in now? Why should there be so much secrecy? Why should Canadians be kept in the dark about the basis of national economic policy? There is no reason. This government, which has grown so old in office, is so captive to the old habit of secrecy that it simply will not break it.
I give to the people of Canada and to this House the commitment that after the next election we as a new government will break that bad habit and let the sun shine in on the five-year forecasts and projections on which national economic policy is based.
I think all of us in this parliament are concerned about how much, if anything, must be kept secret and how much can be made public. We must take a hard look at taking away part of the veil which now covers our budget-making process. We know that the way the United States deals with the problem of holding a potential special advantage because of special information is by making sure that all information is available to everybody. Here we keep all information from everybody. 1 think we must take a hard look at whether the system in the United States does not have more to recommend it than the system which has led us to so much economic difficulty here.
With regard to those technical changes in budgetary policy which can confer no positive or negative advantage or disadvantage, we in this party think that those matters should be discussed in public and that they should be moved out, from the preparation of this budget onward, into the open so that there can be that kind of consideration.
Unfortunately, this secrecy which has cast a shadow and a cloak over budgetary policy is pervasive in this government. In the budget documents there is a brief, seemingly innocuous but dangerous reference to some $300 million which the government of Canada is going to make available to those companies which are adversely affected by the negotiations at the Geneva round of GATT. The government knows what went on at GATT; parliament does not, the companies affected do not. The government does know, and the government is of the view that at least $300 million worth of damage was done to the Canadian public interest and to the interests of Canadian companies by what was negotiated away at GATT.
Part of the reason that that causes so much concern is that the industries whose lives and future are being affected by these negotiations at GATT have consistently been kept outside. Once again, other nations with economies far more complex than ours have found ways to ensure that industries whose lives are affected by tariff negotiations have a means of participating in those negotiations. That is not the case here.


Alan Gray Martin: They have had a lot of input.


Charles Joseph Clark: The parliamentary secretary correctly says that they have had a lot of input, but they have had input up to a point, and then public servants-admittedly good people- have had theirs. The industries involved have been sent away, but there is no role in Canadian delegations, as there is in the delegations of other countries, for representatives of some of those industry groups to participate directly in the negotiations. One consequence is that not only do people live with the

certainty that the Government of Canada has concluded that there has been at least $300 million worth of damage done to the Canadian economy by the GATT negotiations, but also there is the suspicion that if somebody who knew more about an industry which was bargained away had been present at the table, then the injury done to that Canadian industry would not have occurred. That is the tragedy, and we must change our procedures to prevent that.
The basic weakness of this budget and, indeed, the basic weakness of this government is that it is standing pat. It is dealing with the past. It has no sense of the future of this country. In ten years the government has wasted and crippled some of the great building assets of Canada.
This budget promises us a deeper deficit and stagnation as usual. There is no excitement in this budget, and there is no excitement in this tired old government. There is no excitement about the potenital of this country, and this budget certainly offers no encouragement.
It is quite interesting to look at the threads which run through the language of the Prime Minister and the Minister of Finance. They talk about the problems Canada faces and about this being a difficult world. They talk about all the obstacles we face and about all the bad things which are in the atmosphere. The fact is if they would get out of their cocoons and visited this country, if they would stop apologizing about what they had done and began to look at what we can do as a people, they would realize that this is not a country beset by problems, but a country beset by opportunities and possibilities.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Nobody pretends that this is an easy country to govern, it never has been, but there is no question at all that Canada can be governed, that it can grow as an economy. What is necessary is to have a Government of Canada that is prepared to trust the people of Canada more than this government does. There has to be a determination to encourage the instinct to build which is part of Canadian life, whether it is evident in a company like Great Lakes Air-which wanted to buy the airline which the government bought-in a company like Alberta Gas Trunk Line-which moved in and ensured Canadian ownership in a far preferable way to having Petro-Can move in-or, indeed, whether it is evident in the aspirations of countless Canadians across the country who simply want to own, buy or build their own homes and want this government, through mortgage interest deductibility and other means, to help them. These people want the Government of Canada to adopt that kind of policy because it indicates that it is prepared to back up with its policy those Canadians who want to go out and build for themselves.


Alan Gray Martin: Talk about the cost.


Charles Joseph Clark: I shall talk about the cost, and I will talk about the consequences as well.
November 20, 1978


Alan Gray Martin: In real figures.


Charles Joseph Clark: I shall talk about the cost in real figures too. I am sure the parliamentary secretary is aware, and I know he is doing his job as a parliamentary secretary and as a partisan, that the two industries which would be most dramatically affected by my policy would be the house building industry, which is almost 100 per cent Canadian-owned. We would not only be helping young, older and middle aged Canadians who want to build homes, we would also be stimulating a highly productive part of the Canadian economy. We would be creating jobs for Canadians and growth for Canada, which in turn would provide revenue for the Government of Canada and the governments of the provinces. It would provide the kind of stimulus which is singularly absent in the budget brought down by this government.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: All members are proud of the constituencies they come from and I am sure they think they cannot be matched by any other constituency in the country. I had the opportunity to be home in my riding on the weekend, to meet some of the people who work and live in the constituency of Rocky Mountain which stretches along the western mountains and foothills of Alberta. These are people who work harder than we do in this House of Commons, people who go down in coal mines every day, who work outside in winter, and who run farm operations which require them to keep the schedule that calves keep when they are being born, a schedule much less predictable than you, sir, can enforce in this House of Commons. They are hard working Canadians who have their counterparts in every constituency in this country.
One of my privileges as national leader is to have the opportunity to travel this country, to go to Newfoundland and visit the little community of Trepassey and see people who go out every day in violent seas to fish for food, and to travel across this country and see people who want to build.
Many of these people came to this country because they knew that there was opportunity to build, and that is the nature of this country. What we need is a national policy, including an economic policy, that is in keeping with the building nature of this country, rather than in conflict. For a decade we have had a government which has not trusted the people of Canada, and it is evident again in the budget. Instead of allowing private entrepreneurs to acquire businesses which could be best operated in the private sector, the government moves in and buys. Instead of helping young Canadians and other Canadians who want to go out and build their homes, the government says no. Instead, this government goes out to younger Canadians and Canadians on low incomes and says: "You are too rich. How do we, those of us sitting in Outremont, know you are too rich? Because you want to own a home." That is what the Prime Minister said, and that is why he opposed our policy.


Some hon. Members:: Oh, oh!
The Budget-Mr. D. J. Johnston


Charles Joseph Clark: I will not get into that matter, Mr. Speaker, because it is a subject for another debate, but it certainly indicates an attitude toward Canadians. There is here, in this party, a determination to establish a government which will introduce policies which will encourage the building instinct of ordinary Canadians. It will be a refreshing change and we look forward to introducing such policies as soon as we can after the next election.


Some hon. Members:: Hear, hear!


Mr. Donald J. Johnston (Westmount):: These are my first remarks in this House, Mr. Speaker. Indeed, it is a great honour and privilege for a number of reasons. First of all, simply being an elected representative of the Canadian people is a great honour, as is representing the riding of Westmount, which, as hon. members know, will soon be redesignated as Saint Henri-Westmount. It is an unexpected pleasure to have the opportunity to listen to and follow the Leader of the Opposition (Mr. Clark), and accordingly I would like to depart from some of the general comments which I intended to make at the outset about my riding-which I understand are traditional and to which I will come back in due course-to comment briefly upon some of the statements made by the Leader of the Opposition with regard to the budget.
I have sometimes been a critic of budgets in the past, but I must say that I am proud, as a humble backbencher, to be associated, however indirectly, with the budget handed down last week.


Some hon. Members:: Hear, hear!


Donald James Johnston: I have to assume that the Leader of the Opposition, because he really did not address himself to any of the substantive issues contained in the budget, must be in agreement, by and large, with the proposals contained in it.
I learned some things in the course of my campaign. I am a neophyte and a debutante with no political experience, and, in the course of my campaign, my Conservative adversary, who was a very able adversary, let it be known to me that he had been at a candidate's school. This was my first criticism of my own party, because I did not have the benefit of candidate school. It appeared to me during the course of the campaign and after listening to a number of members of the opposition, including its leader, that candidate school specializes in a particular form of humour, a good deal of gloom and doom, and the preaching of a lot of platitudes.
The comments which I intend to make to this House today will be less humorous, with less doom and gloom, and I hope that there will not be too many platitudes. However, I would like to point out that the Leader of the Opposition did make one statement which I share wholeheartedly with him, and that is, that this is not a country beset by problems, but a country of unlimited opportunity. I was delighted to hear the Leader of the Opposition make that statement, because it has long been my impression during the course of the last several years and, in my election campaign that too much gloom and

November 20, 1978
The Budget-Mr. D. J. Johnston
doom is being preached in this country, not only by the opposition but from other quarters as well.
I see this country today as a country of unlimited potential and energy, with enormous coal reserves, untapped riches in the tar sands, hydroelectric power which could double within the next 15 years, and with one of the great forest reserves of the world, unmatched by any nation except, as I understand it, Russia and Brazil. We are endowed with one of the great freshwater reservoirs, minerals, and twice as much farmland per capita as the United States, although we are not quite as productive. Canada is a country of unlimited opportunity. That is why I say, that I am delighted to see those opportunities married to responsible financial policies, such as those contained in the budget brought down by the government.
It is clear to even the most cynical observer that the Minister of Finance (Mr. Chretien), in his budget rejected seductive political proposals in favour of long-term economic growth which the country requires.
Turning for a moment to my own riding, I should like to point out that indeed it is not only an honour and privilege to represent Westmount, but also a challenge. I am called upon to fill the vacancy created by the resignation of the Hon. "Bud" Drury, whose distinguished career as a soldier, public servant and politician is well known to members on both sides of the House.


Some hon. Members:: Hear, hear!


Donald James Johnston: I was delighted to hear the hon. Leader of the Opposition pay homage to Mr. Drury. Even in his retirement from the House, he has gone on to accept several difficult mandates, and still serves the Canadian people.
In its wisdom, the riding of Westmount selected a Liberal by an overwhelming majority in the recent by-elections. Yet, I feel that in the minds of many Canadians, the Westmount riding conjures up the image of one of the two solitudes about which Hugh MacLennan wrote so many years ago: the solitude of the affluent English in the province of Quebec. The riding of Westmount is not such a bastion or fortress of the English-speaking population of the province of Quebec. In fact, Westmount today is symbolic of the Canada of the future, the pluralistic society which brings together so many of the wonderful differences present in Canada, such as racial, religious, economic and social. All those differences are present in that great riding. The riding comprises one of the most important influential Jewish communities in Canada, as well as one of the most important business communities and universities, combining all that in a riding which is predominantly English and very substantially bilingual.
From time to time the premier of Quebec, Mr. Rene Levesque, has made reference to the metaphor used by Sir Winston Churchill of two scorpions in a bottle being representative of the relationship between the French and the English. I can assure Your Honour and all members of the

House, that if that metaphor is applicable anywhere is Canada-and I personally do not think it is-certainly it is not applicable in my riding or in the city of Montreal.


Some hon. Members:: Hear, hear!


Donald James Johnston: In fact, Mr. Speaker, the Westmount riding represents the Canada of tomorrow, where learning and speaking both official languages will be considered an opportunity and not an obligation.
At present, Mr. Speaker, we are observing in the West-mount riding a profound change in the attitude of the Englishspeaking population which is willingly taking part in the francization of Quebec. Anglophones, for example, are seeking opportunities to communicate and speak French with their fellow citizens, and it is astonishing to see, Mr. Speaker, that most of my Anglophone friends' children are attending either French schools or French immersion schools where both languages are taught. Therefore, Mr. Speaker, despite the Parti Quebecois' efforts to create an attitude of confrontation between Anglophones and Francophones, exactly the opposite is happening today.
Mr. Speaker, since the conquest, Canadian history has taught us that the division between French and English in the province of Quebec is based on religious rather than language differences. Up until now these religious differences have almost separated the two societies or prevented their integration. In my view, the ease with which English-speaking Irish Catholics have integrated themselves into the French community, for example, is proof of this theory. I believe, Mr. Speaker, that is why today we Find Francophones with names like Burns, O'Neill and Johnson, even in the Parti Quebecois.
As we know, Mr. Speaker, these religious barriers have nearly disappeared. This is a very great change in Quebec. In my opinion, relations have never been as friendly and as positive. I believe that far from being confirmed, these two solitudes, of which Hugh MacLellan wrote, are rapidly getting closer together. We, English-speaking Canadians, who have not the slightest intention of leaving the province of Quebec, see in all this the potential for a multicultural society.


The Acting Speaker (Mr. Ethier):: It being six o'clock, I do now leave the chair until eight o'clock this evening.
At 6.03 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
November 20, 1978
Donald James Johnston: Mr. Speaker, when the House adjourned at six o'clock, I was discussing the attitude of the English community towards the francization of Quebec. I was explaining that we, English-speaking Canadians, have no intention of leaving Quebec because we are very pleased with what is now happening in the province. We see a dynamic, multicultural and bilingual society which could become the most dynamic society in North America if the economy is not overly weakened by the present political uncertainty.

Notwithstanding these very positive attitudes all of us in the riding of Westmount have, it is also fair to say that all Montrealers and all residents of my riding, be they Francophone or Anglophone, are fearful of what may lie ahead. We have heard our Prime Minister (Mr. Trudeau) and others say on a number of occasions that the health of the Canadian economy is inseparable from the subject of national unity. I say to you, Mr. Speaker, that I know there are many Canadians who may not share that view, but we who live in the riding of Westmount know that view to be correct.
Daily we witness an exodus of talent, French and English, young talent, often the children of friends, sometimes to other provinces in Canada but quite often to the United States. Daily we witness the exodus of businesses and assets. We see businesses closing and families displaced, as I indicated before, again sometimes to other provinces in Canada, but again quite often to the United States. The professional community in the city of Montreal, be they lawyers, auditors or professional counsellors, have been presiding over transactions of this kind on a daily basis for the last several years.
1 ask you, is it any wonder that the people of Westmount are more sensitive to the problems of national unity and the relationship of those problems to the economy than Canadians elsewhere in this country?

-as we say in French, to ask the question is to answer it.

Imagine my disappointment when I attended the first ministers' constitutional conference several weeks ago here in Ottawa and listened to the discussion about entrenching given rights and freedoms in our constitution, hearing Premier Lougheed declare that as far as he was concerned such entrenchment was unnecessary, that Alberta had a bill of rights and that the legislature of any particular province would be able and should respond to the needs and the will of the people at any particular time in this regard. I sat there and thought to myself, how would Premier Lougheed feel were he an English-speaking merchant in the third-perhaps the second, but probably the third-largest English-speaking city in Canada serving almost exclusively an English clientele, unable to erect a sign on his premises in English? So much, I said to myself, for the protection that is to be afforded the minorities of this country, not only in Quebec, but by other provincial legislatures.
The Budget-Mr. D. J. Johnston
Returning for a moment to the budget itself and the economy, I would point out that during my campaign I learned that in Westmount, economic issues are of as much concern as elsewhere in Canada. The people in Westmount want lean, tough government. That message came through loud and clear. They endorsed the policies introduced in 1975, the tightening up of the money supply, the basic freezing of the civil service over the last several years, and cutback in government expenditures. Furthermore, the mandate they gave me was: you go there and make sure these additional budget cuts and this economic plan of August are implemented. They approved the policies of this government as shown overwhelmingly by their vote on October 16.
As I said earlier to day, I am confident they will approve wholeheartedly the very responsible and very economically sound budget introduced by the finance minister last week.
I was very pleased, as, I noted, was the Leader of the Opposition (Mr. Clark), at the added incentive given to research and development in this country. This is very important to all of Canada and particularly to my province, Quebec, where, in the relatively near future, we must establish competitive high technology industries to replace those which we regard as being in the secteurs mous whose years are obviously numbered.
I was also heartened by something for which I have been asking for years, and that is a re-examination of our Income Tax Act to see that it is fair to all Canadians. A carefull look should be taken at the concept of tax neutrality-namely, that Canadians in the same financial circumstances should bear the same burden of tax. I am not by any means satisfied that this job is being done, but certainly in many respects this budget is a step in the right direction.
I might say that I learned several things this afternoon from the Leader of the Opposition, though none had anything to do with the budget. This leads me to conclude that fundamentally the Conservative party endorses the principles set forth in the budget. One of the things which came through loud and clear was that members of the Conservative party have an aversion to Crown corporations, which apparently is not shared by their colleague, Mr. Peter Lougheed. I too favour greater private sector participation wherever possible, but understandably the private sector looks to the competitive return on investment that it can derive from any particular area of endeavour. Those returns are not necessarily readily available in the capital intensive energy areas in which Canada is required to invest in the latter part of this century, not only for our generation but for that of our children, our grandchildren and for the future.
Hence, nineteenth century Conservative philosophy is not appropriate to the kind of capital intensive energy situation we are facing in Canada today. By the same reasoning that I heard this afternoon, I would think that the Leader of the Opposition should postulate that private industry in the United States should be financing outer space exploration. I would doubt that he would even convince General Motors of the

November 20, 1978
The Budget-Mr. D. J. Johnston validity of that kind of investment, yet who knows what kind of benefits may be ultimately derived by mankind from that kind of expenditure in the public sector?
Another thing which I found fascinating was the idea that the acquisition by Petro-Can of Pacific Petroleums was a current government expenditure of some kind. As I understand the transaction-and since I sit on the backbenches perhaps I do not understand fully-the acquisition is an asset. So I said to myself that if the acquisition of an asset was regarded by the opposition as a current expenditure, then it is small wonder that they believe that mortgage interest should be deductible. In fact, the entire purchase price of a house should be deductible.
The Leader of the Opposition also told us that he believed in cutting costs, freezing the growth of the civil service and reducing the deficit, all programs, I would point out, Mr. Speaker, which the government has undertaken. It is not clear to me how he manages another $2 billion in cost saving, but I am somewhat new to this game of politics and perhaps that is what is regarded as opposition licence, rather like poetic licence. If so and that kind of licence is available to us, I think at the same time we should look to full employment, no deficits and reduced taxes. He may be saving that platform for the spring, but I want it on record, Mr. Speaker, that it first came from the backbenches of the Liberal party.


Some hon. Members:: Hear, hear!


Donald James Johnston: 1 should like to close, Mr. Speaker, on a rather more serious note. I said earlier that Canada has enormous potential, and the Leader of the Opposition agrees with that. We have a tremendous asset base and we have a population that can exploit that base. The constituent elements of economic growth, as we all know, basically consist of the marriage of resources, labour and capital. We need capital in this country, Mr. Speaker. Unfortunately, political uncertainty does not create a secure environment to attract capital, be it Canadian or foreign.
We in the Westmount riding, Mr. Speaker, are on the front line of the battle not only to save our own economy in Quebec and that of Canada, but to save the country itself. The people in the Westmount riding, be they French-speaking or Englishspeaking, live with this problem every day. I believe that the people of Westmount, like the troops on the front line of a battle, are in a better position to judge what kind of leadership and what kind of leader is required to win that battle than the reserve troops who are stationed many miles away. I say to you, Mr. Speaker, that the vote on October 16 whereby the Liberal party was given an overwhelmingly increased percentage majority compared with 1974 was a message which the people on the front line sent to the people of Canada. And they sent a message that was loud and clear, Mr. Speaker.


Charles-Arthur Gauthier: Mr. Speaker, it is always interesting to speak about a budget such as the one under consideration. Since I have been sitting in this House, Mr. Speaker, several budgets have been introduced but I think that none has ever been so eagerly awaited. Not unlike previous finance ministers this one has only partly succeeded in sitting on the fence, to provide a nice picture while giving as little as possible. The business world is rather satisifed with the budget, because financial restraint is essential, but the small taxpayer is not happy as a result of the budget.
Nothing substantial appears in the minister's speech. For weeks he had been receiving much advice from various quarters about the direction to take to promote the economy. The Economic Council of Canada among others urged him to reduce the excise tax, cut the sales tax from 12 per cent to 6 per cent as well as personal income tax. On the other hand the Canadian Manufacturers Association advised him not to include any personal tax reduction, but to provide tax changes for companies and the business world generally. The minister could choose between one of those options, that is please the large company by taking a more cautious approach or please the small taxpayer by taking stronger steps. He has decided to follow the first option at the expense of the second.
This having been said, let us consider the details of the highlights of the new budget. At the outset, let us examine the sections which seem to be of a certain interest at first sight. The fiscal changes which will prevent professionals from incorporating in order to pay less income tax will be welcomed. Canadians will also welcome the changes relating to income debentures and retractable preferred shares. A number of companies invested their money in that fashion and by so doing avoided paying their taxes. We must note however that Petro-Canada took advantage of that fiscal loophole to buy the Pacific Petroleums Company Ltd. Could there have been a leak of information relating to the budget, Mr. Speaker, a leak that would have allowed Petro-Canada to acquire that company before the budget abolished that form of investment? The increase in the taxes of air carriers means that users only, and not the whole population of Canada, will pay the costs of transportation.
Generally speaking, those are the aspects of the budget which seem acceptable to us; unfortunately, they help only a very small part of the population. The government provides very few new measures for ordinary people. The sections of the budget which seem to favour these people do not actually. Let us take a closer look at them. In his introductory comments, the minister stated that the Canadian economy has made great progress in 1978, but without the results which had been anticipated. Real production growth will be around 4 per cent while the increase in domestic production prices will reach 6'/2 per cent. What has happened in recent months when a 5(6 per cent increase in production was foreseen by the minister? Why
November 20, 1978

this anticipated decrease of IV2 per cent? Moreover, this decline could be more important as economic experts are predicting an increase of approximately 3'/2 per cent. In addition, the minister maintains that the increase in domestic production prices will be 6!/2 per cent. Is he taking into account the increases resulting from imported products? In his speech, the Minister of Finance (Mr. Chretien) specified, and I quote:
But action is needed now to encourage investment, to respond to the needs of sectors and regions, and to keep our costs competitive, while reducing our cash requirements from the present high level.
Anyone hearing such a statement wonders what the minister is getting at. First, apart from Ontario and maybe Alberta, what real advantages will the other provinces of Canada stand to gain from the incentives advocated by the minister? Second, when the minister suggests raising from 30 per cent to 100 per cent the write-off for mining development expenditures it certainly helps the development of enterprises but it does precious little for those who work there. Let us take for example the recent ruling by the Anti-Inflation Board which refused an 8 per cent salary increase to miners in Thetford Mines because it was supposed to be too much: so, there is one law for the rich and another for the poor. In addition, always with a view to helping development, the minister extends the incentive for oil drilling funds. That is another gift for that industry which was going to invest anyway, even without help from the government.
The government, in a sublime and noble effort, saw fit to include in its new tax legislation a new maximum for the deduction of expenses relating to employment, that is $500. At first look, it seems to be a very generous action, but it is not so. First, that change in tax legislation will take place only in one year from now, not in 1979, which would have had immediate effects. Second, that increased deduction will benefit rich taxpayers, those who pay income tax. That exemption means an average real gain of $100 to $125 a year. Mind you, that reduction does not apply to taxpayers whose income is less than $10,000. Provincial income tax will decrease by $400 million for provinces which have signed an agreement in relation with income tax collection.
However, this measure is dependant upon an agreement between the federal government and the provincial government. The terms and conditions are not specified. So the greatest uncertainty prevails. Lastly, we note this quite mysterious sentence by the Minister of Finance (Mr. Chretien), and I quote:
The federal government and a number of provincial governments are working together to reduce the high cost of wood supply.
In his budget, the minister grants these companies other fiscal advantages which will have both directly and indirectly the effect of lowering their supply costs. That is a nice gesture, however the minister ignores the fact that in Quebec, for example, the cost of forest operations concessions in already
The Budget-Mr. D. J. Johnston low. Why then give grants to reduce these costs further? In fact, most of these measures will directly help such already privileged areas as Alberta and Ontario. The wealthy will get richer and the poor poorer.
Mr. Speaker, I will now comment on the measures announced by the Minister of Finance to promote research and development. As for increasing the basic investment tax credit for R and D from 5 per cent to 10 per cent throughout Canada, and to 20 per cent in the Atlantic provinces and the Gaspe region, I think that that is in itself a good measure. But I wonder why the minister did not increase it to 100 per cent as he did elsewhere, for example for expenses related to mining development. I really believe that small and medium-sized businesses, especially in the pulp and paper industry, would have benefited from such measures, when one considers that the main reason why various sectors of job creating companies were closed is their lack of competitiveness because of old, unsatisfactory and inadequate facilities for our time.
As for companies whose head office is outside Canada, I really do not think that the small tax advantages offered by the government would compete with those already offered by countries such as the United States. In that sense, the measures put forth by the Minister of Finance will certainly not have the impact which he wants Canadians to believe, and he knows that, Mr. Speaker.
I want to deal now with another far more important aspect of this R and D issue that the government is trying to hide from the Canadian people. On September 6, 1978, the present government announced budgetary cutbacks which, I believe, will be disastrous for the future of basic and industrial research in Canada. I can already hear short-sighted Liberal ministers say, as they have in the past, that basic research is good only for egocentric researchers. But I for one, Mr. Speaker, predict that the way things are going within two years industrial research will feel the countereffects of the way in which basic research is presently being mistreated, and I think the minister is the only one who cannot understand that the application of new technologies comes after the basic research necessary to discover those technologies.
The minister says on the one hand that he wants to help small and medium-sized businesses, but on the other hand the government announces cutbacks of $14.8 million in the nationally important sector of agriculture. Mr. Speaker, I believe the Minister of Agriculture (Mr. Whelan) will hear about this later on because I think that all hon. members must have received representations from their local federation representatives saying that they are not at all pleased about the Canadian dairy policy which has been frozen for the last two years. I shall come back to this question at the proper time, but I simply want to underline in passing that the government has done absolutely nothing in this area.
The budget of the Medical Research Council had been reduced by $500,000 and that of the Fitness and Amateur

November 20, 1978
The Budget-Mr. D. J. Johnston Sport Branch has been slashed by $6 million. Is fitness not also a matter of national concern, Mr. Speaker? And the list goes on. If the minister continues to damage university research as he has been doing for too long, who will train our scientists, even in the field of industrial research, and will we have to rely even more on foreign technology?
Mr. Speaker, recently, the Science Council of Canada raised the problem of industrial underdevelopment in Canada. Does the Minister of Finance (Mr. Chretien) not agree that this fact coupled with the drop of the dollar on international exchange markets will increase even more the already enormous cost of the transfer of foreign technology? Does that really represent a saving in the long term? What good can such a policy do to Canada? This government seems to have no ingenuity whatsoever, Mr. Speaker.
Indeed, why did the government not subsidize on an equal basis with small and medium-sized businesses the allocation of contracts for research made in government or university laboratories, which already have all the infrastructures needed to carry out this work? In addition to developing and maintaining our scientific customers in Canada, this could have had an obvious beneficial effect on industrial and pure research. This is the type of positive action which calls for the participation of everyone concerned and which could re-establish confidence among the various groups which constitute the Canadian scientific community, which confidence has been dangerously eroded during the last three years by the lack of an adequate policy in the area of research and development.
When I talk about an adequate policy, Mr. Speaker, what I mean is this: first of all, an adequate budget, which implies that the funds allocated to research and development should be increased to 2.5 per cent of the gross national product before 1985, with 50 per cent of these funds contributed by the public sector and 50 per cent by the private sector. This would encourage the business involved to be more serious in its application and in its work on research projects since it would have a 50 per cent financial involvement in these projects.
To avoid the type of political blackmail we are presently facing and to ensure the stability necessary for a good technological performance, a long term science policy supported by three year budgetary commitments revised every year should be established as soon as possible. The final element of an adequate research and development policy would be intensive consultation with the Canadian scientific community and the appointment of competent people to key positions in the research and development field, excluding in fact those experts in general administration. In that respect, Mr. Speaker, I do not think I need to be more accurate. The minister certainly understands what I mean.
In conclusion, the government predicts a reduction of 112,000 jobs in 1979 compared to the 1978 performance. In fact,
[Mr. Gauthier (Roberval).J
some 362,000 new jobs were created in 1978 while they will increase by only 250,000 in 1979, again according to the Minister of Finance: Informetrica Ltd., a statistical data research corporation in Ottawa, predicts that the proposed $2.5 billion financial cuts will result in the loss of 94,000 jobs in the federal government by 1981.
Last August the Minister of Finance predicted a 5'A per cent growth rate but Thursday evening he said that this rate would hardly reach 4 per cent. The weekend edition of the newspaper La Presse referred to a possibility of a mere 2'h per cent growth rate. Each statement made recently by the minister seems to demonstrate the government's inability to stimulate the economy.
In Canada, we have gotten into the habit of taxing production and employment through a large number of very complex fiscal laws while at the same time we subsidize inefficiency and non production through various government programs. The inability of the present government in economic matters as well as the performance of previous governments demonstrate without any doubt that the Keynesian system, the economic bible of our governments for years, is no longer adapted to our present economic and fiscal problems. The coexistence of soaring inflation and high unemployment rates as well as the behaviour of current governments towards budgetary deficits are there to prove it.
Considering the incompetence of the present government, we propose the immediate adoption of the policy advocated by the Social Credit Party of Canada since 1962 in this House.
That policy is what the sum total of money supply plus credit balances must be strictly controlled by the Bank of Canada to avoid inflation or deflation at the retail price level. Moreover, within the framework of an over-all monetary policy ensuring that enough credit is available for all Canadians to buy the goods and services they are able to produce, the national government must adhere to a "cash payment" fiscal policy rather than sinking lower into debt all the time, and undertake to eliminate the national debt in a specific period of time. Since the credit worth created by chartered banks issues from the producing systems capacity and the consumers' desire to consume, the government must maintain a balance between dollar demand and the cost of consumer goods, which they failed to do until now. In order to make available to Canadians sufficient purchasing power to maintain that kind of balance, the government should revert to the 1967 6 per cent maximum interest rate on chartered bank loans. Finally, the total personal exemption for income tax purposes should be increased to $5,000 per person, which means that the basic exemption should now be $5,000 for a single taxpayer, $10,000 for a couple, plus an additional $1,000 per dependent child. Those are initiatives that are called for by many people. Indeed, I urge the Minister of Finance to promptly consider them, if he has not yet done so, because the Progressive Conservative candidate in the Toronto constituency of "Beaches" made

November 20, 1978
comments quite similar to that of Major Douglas, the initiator of the Social Credit, in a recent speech before the Toronto chapter of the Society of Management Accountants.
Although we developed the fiscal proposition he put forward, and quite some time ago, and some people apparently have been making political capital at our expense on the issue for a number of years, we are happy that some federal political organizations finally saw fit to endorse our analysis of the economic situation.
It would suffice, just to name a few, to mention for instance family allowances and old age security pensions, which have been advocated by us since the beginning and which we now have today. The government has again started to talk about a guaranteed annual income program and we are pleased with that. They are even talking about Canadian harmony. I have just read an article in La Presse and I am glad to quote from it:
That is what comes out of the annual congress of the Ontario wing of the Liberal Party of Canada ... Three days of debates on the double theme of Canadian harmony and the economy-
So they will no longer talk about Canadian unity, the new word is Canadian harmony. And this is precisely what we have been saying for a long time. We know that it is impossible to achieve unity if unity is to be taken in the strict sense of the word. People can live in total harmony but they cannot live in complete unity. I am most happy to see the right hon. Prime Minister (Mr. Trudeau) using this new expression. This was very comforting Mr. Speaker.
We now have the impression that changes are taking place slowly but surely. Let us administer this country to the advantage of its human resources instead of sacrificing its human capital for the sake of profit. The Social Credit party represents the triumph of men over money. How simple these words can sound yet how heavy their practical consequences. I see that you are about to rise, Mr. Speaker. I will save you the effort and resume my seat.


Mr. David Orlikow (Winnipeg North):: 
An hon. Member:: That is much better than 10 per cent.


David Orlikow: The hon. member says that is better than 10 per cent. I remind him that we are almost back to where we were in October of 1975 when the government brought forward its anti-inflation program, which has been a failure. Unemployment has increased since the minister's October, 1977 mini-budget and his April budget. Official Statistics Canada figures show that 910,000 Canadians were unemployed last month. That is a substantial increase over the same period a year earlier. During the course of the last year the unemployment rate in my province of Manitoba went up from
5.6	per cent to 6.5 per cent.
In October of this year 4,000 more Manitobans were out of work than in October of 1977. We Manitobans know what a Conservative government means because we have had one for the last 15 months. It is not surprising that unemployment in Manitoba is increasing faster than in any other province. Actual unemployment in September of this year was 30 per cent higher than it was in the same month in 1977. On a seasonally adjusted rate, unemployment rose by 24 per cent. It is not hard to understand why that happened. Manitoba has a Conservative government, and the Conservative party in this parliament is urging the Canadian people to adopt the same policies nationally as those policies which are in existence in the province of Manitoba under a Conservative government.
What has been done in Manitoba, and why is unemployment up? Let us look at the record. Because of the contention of the Conservative government in Manitoba that the province needed more restraint, that government reduced the number of civil servants in that province by 1,500. That meant a reduction of services. A complete freeze was put on all government construction for a whole year. That meant that no government buildings were built. No senior citizens' housing was constructed, and no public housing was constructed.
1300

November 20, 1978
The Budget-Mr. Orlikow
In the whole province of Manitoba work on only one hospital was done in the whole year. It is not surprising that 2,000 construction workers who were working in 1977 are not working in 1978. That is what a Conservative government and restraint mean.
What the program of the Minister of Finance means, and has meant until now, is an increase in unemployment across the country. Our most industrialized province, Ontario, governed by a Conservative government, experienced a very large increase in unemployment in October of this year compared with the year before. The same was the case in the province of Quebec. The number of jobless in Ontario and Quebec exceeded 520,000 people. Let us face the fact that over 40 per cent of the 900,000 unemployed in Canada are young people between the ages of 15 and 24. That means that probably between
80.000	and 90,000 young people are unemployed in Quebec. It is no wonder that young people, in Quebec, particularly Francophones, have moved to support the separatist government in that province. I would have been surprised if they had not, in view of the record of this federal government in dealing with the major problem of unemployment in the province of Quebec.
The hardships and deprivations suffered by unemployed Canadians also mean losses for the people of Canada as a whole. The difference between the number of unemployed in 1973 and in 1978 is about 350,000. This represents a loss of almost $11.5 billion in terms of our gross national product. It means substantially less tax income for all levels of government and more spending under the unemployment insurance program.
The Minister of Finance has predicted that there will be
112.000	fewer new jobs in 1979. That is a prediction of further recession, less government revenue and more ineffective spending on job-creation programs to cushion the effects of unemployment, which to a large extent has been created by this government's lack of action. Unfortunately, the minister and his colleagues would rather cut government spending and slow down the economy even more than adopt measures which would tackle unemployment. As I have already pointed out, the effects of solutions like than can be seen today in Manitoba.
High unemployment, no major increase in funding for job creation and no real tax cuts demonstrate that the budget is a stand-pat budget and that there are no new policy directions.
The Minister of Finance is standing pat when our economy is at a standstill, consumer spending is low, prices are high and about 13 per cent of our industrial capacity is still unused. The minister continues to predict expansion, but the record of past predictions by this minister and this government give Canadians little hope for the coming year.
Only one element of society has welcomed the budget. Not surprisingly, it is the group which has gained most from the economic policies practised by this government since 1974. I refer to business people. A variety of tax cuts for corporations has been introduced in recent years, although four years of

economic downturn suggests that this is the worst possible way to try to stimulate the economy.
Instead of the stale, unimaginative advice which the minister has been getting from his advisers since he took on his portfolio-advice which has proved to result in failure-the minister should have listened to the Economic Council of Canada. In its recent annual report, the Economic Council of Canada pointed out that economic prosperity will not be assured if governments get out of the way of the private sector. Following the principle of less government-now accepted by both the Liberal government and the Conservative opposition-means more government austerity, more unemployment and more hardships for Canadian people.
The second principle which the Economic Council discussed was the idea that inflation can be eliminated if the rate of growth in the money supply is cut to 5 per cent, approximately the potential real growth of the Canadian economy. This is the policy which is being followed-or at least espoused-by the governor of the Bank of Canada, and I believe it is the policy of the Official Opposition, as expounded often by its spokesman, the hon. member for York-Simcoe (Mr. Stevens). What that policy will mean is that real growth will drop, interest rates will rise, unemployment will rise and the rate of increase in the cost of living will rise sharply. What the Economic Council proposed instead was real tax cuts, not just in the sales tax but also substantial cuts in income taxes for most Canadians, particularly low and middle income Canadians.
These tax cuts which the minister has put in, and the minister's faith in the improved competitiveness due to a lower dollar, reflect his rejection of a real industrial stategy and any real long-term policies to improve the state of the Canadian economy. The long-term prospects are disastrous, even if the most optimistic projections for 1979 are met. The structure of our economy, especially foreign domination of key industries and a multitude of small branch plants, is such that economic opportunities are not now used to Canada's advantage.
A recent background study for the Science Council of Canada entitled, "The Weakest Link" makes this situation very clear. The authors documented their case as follows:
During the 1950s and 1960s Canada lost ground economically to European economies in spite of expanding domestic and international markets. Expanding markets provided a superb opportunity for new investment, new processes, and new products, and should have influenced both productivity and profits. Canada has appeared to have squandered the opportunities of the past 20 years and has been left with inefficient, unprogressive secondary manufacturing firms.
The authors state later on that, even if Canadian costs were reduced:
-the economy would still be less well equipped, compared with most advanced industrial nations, to make positive responses to the problems posed by the growing industrialization of the underdeveloped world. Furthermore, it would still be a weak competitor against other advanced countries which, with their higher levels of technological capability, are more able to replace dying exports with new products.
These long-term structural problems are ignored by the budget. The recommendations of industry, labour committees
November 20, 1978

and the sectoral committees have been almost completely ignored, and the result is likely to be the shameful spectacle of taxpayers' revenue being used to finance corporations' continued movements of jobs and investment out of Canada.
The budget gives another $755 million to business through a variety of new tax cuts and the extension of older ones. This will be in addition to the billions of dollars in corporate tax cuts already provided by the present minister and his predecessors. These taxes are cut with no strings attached, and corporations have taken advantage of the fact.
I would like to point out the ineffectiveness of the tax policies, which have been followed until now and are continued in the present budget, in fostering research and development. We will continue to fail in the future because the minister has not faced up to the problems. The Toronto Star, in its October 12 issue, did some research. They called some of the largest multinational corporations in Canada to find out how much research and development they were doing on a world wide basis and how much of that R and D was being done in Canada. Here are some of the glaring examples of how these giant multinationals have ignored Canada until now.
Ford Motor Company, which spent $1,170 million on world wide research and development, said:
Most of our R and D is done in the U.S., Britain and Germany. We do some here but there are no figures available.


An hon. Member:: Is it U.S. Ford?


David Orlikow: It is Ford worldwide. I would like the hon. member to realize that Ford of Canada, one of the largest, most profitable corporations in this country, does not have one science Ph.D. graduate employed in Canada. General Electric spent $463 million for R and D world wide, and $9 million of that was spent in Canada. Kodak spent $351 million on research and development world wide. A spokesman for that company said:
All pure and applied research is done at our Rochester, N.Y., facility. We do some product development in Canada but no figures are available.
Chrysler spent $337 million on R and D international, and they responded by saying:
We don't do any R and D here in Canada. All our design and development work is done in the U.S.
I could go on, but I do not have the time. Most of the multinationals have the same dismal record.
I have not mentioned the large Canadian corporations, but some of them are no better. They are interested in profits only, not jobs for Canadians. One example is Northern Telecom, a Bell Canada subsidiary which has been viewed as a model for Canadian industry. Northern Telecom is treated well by the federal government. The company has received grants and loans that amount to almost $14 million. Its deferred taxes as at December, 1977 were about $50 million. The Export Development Corporation loans to foreign countries for the purchase of Northern Telecom equipment have reached the $200 million mark. The returns to Northern Telecom have been
The Budget-Mr. Orlikow
excellent. Its sales have more than doubled since 1971, going-


Joseph Lawrence (Larry) Condon: Mr. Speaker, on a point of order may I direct a question to the hon. member?


David Orlikow: Mr. Speaker, I would be very glad to accept a question from the hon. member if I have time at the end of my remarks.
Sales have increased from over $500 million in 1971 to approximately $1.2 billion in 1977. In the same period, profits have increased almost sevenfold from $12 million to $85 million. Similar increases have been recorded in other indicators of this company's wealth. It is today a large and much more profitable corporation than was the case in the 1960s.
This profitability came, Mr. Speaker, at the expense of Canadians in more ways than just tax cuts. In the 1970s, Northern Telecom employed 26,000 people when the then minister of industry, trade and commerce, Mr. Pepin, assured a union representing the employees that the company would not leave Quebec. However, it has left Quebec and other provinces since that assurance. Last year, about 15,000 people were employed in Canada by Telecom, and in 1978 they estimate that it would have only 14,000 employees. At the same time, foreign plants built or bought by Northern Telecom-I suggest with Canadian money, either through profits, tax rebates or loans-now employ 10,000, slightly less than the number of people who lost their jobs in this country. The net effect is that, in my view, taxpayers paid this company to export jobs during a period of immense growth in that company's profits.
Another example of a company using across-the-board tax cuts is International Nickel Company. This corporation, with profits of $1.7 billion between 1967 and 1976, could defer $368 million in federal taxes, although it eliminated 4,000 full time jobs in just one day in 1977. All this was done in Tory Ontario at Sudbury and in Tory Manitoba at Thompson. Inco was able to use profits made in Canada, $17.5 million in federal tax credits, a $25 million provincial sales tax exemption and a low cost $70 million loan from the Export Development Corporation to export jobs to Guatemala and to Indonesia.
The Inco story raises questions about the value of this budget's special tax cuts for the mining industry. The foreign owned firms which dominate this industry seem ready and willing to use such tax cuts to finance their expenses elsewhere, and even to eliminate jobs here. It seems incredible to us that the minister's response has been to help increase the profits of such companies which they use to pay for foreign expansion at the expense of Canadian workers.
Northern Telecom and Inco are two examples which illustrate the flow of investment funds out of Canada. Indeed, the United States department of commerce estimates that there will be $720 million worth of direct Canadian investment in that country this year. Total investment abroad was $1,365
80067-11 y2

November 20, 1978
The Budget-Mr. Orlikow
million in the year ending June 30, 1978, according to Statistics Canada. Canada is now the third largest source of foreign investment in the United States economy.
At the present time, the pulp and paper industry should be using its enormous profits to modernize Canadian plants. The budget provides extra help for this industry, but what happened? B. C. Forest Products recently invested $75 million in the purchase of Blandin Corporation, a Minnesota paper company. Olympia & York invested $350 million in Manhattan, at a time when approximately 170,000 building trade workers were unemployed in Canada. This month, the Bank of Montreal will invest $1 billion in New York State, although key Canadian industries are falling behind in domestic and world markets because they lack the credit needed to innovate and modernize.
These exports of investment funds and jobs came after the corporate tax cuts of 1974, 1975 and 1976. Those carrots were not even sufficient to keep our own money in this poorly structured and declining economy. The November 16 budget offers more carrots, oblivious to the flow of investment under current economic conditions. We need a strategy to revitalize the economy, and sticks, such as the monitoring of Canadian investment abroad, to keep money here and make the economy attractive to investors.
Alternatives are available to the Minister of Finance. He did not have to maintain the pattern of across-the-board unconditional corporate tax cuts, a pattern which has been damaging to the economy and increasing the deficit. He could have applied to all corporate taxes the rule which he announced for small business tax. About the latter, he said the following:
The very generosity of the measures makes it essential to ensure that they are effectively targeted.
Despite what he said, the budget did not adopt any of the recommendations from the second tier committee which represented both industry and labour in the more than 20 industries which it examined. The committee made specific recommendations about research and development incentives. It recommended write-offs and tax credits which could be applied flexibly to each project; a payback mechanism where the subsidized research leads to new profits; a special effort to increase Canadian research and development by foreign firms; and safeguards against the free transfer out of Canada of publicly financed research and development benefits, such as the ones to which I referred in connection with Northern Telecom. Not one of those recommendations was included in the budget, although the minister implied that the changes in research and development tax credits were made in response to the second tier committee. If they were, it was a poor response.
We need to adopt an industrial strategy along the lines suggested by the New Democratic Party for approximately two years. One goal of such a strategy would be the development of industries which supply inputs into key sectors of our economy: housing, transportation and food. Instead, we received cuts in the research budgets for transportation, fishing, farming and energy. This should be done in a way which would improve both the quality and quantity of Canadian

production, as well as make maximum use of Canadian products.
Canada now relies too heavily on imports in the basic high technology industries, such as industrial machinery and equipment, chemicals, plastic materials and telecommunications equipment. Priority development in these industries would replace imports and lead to an international specialization in some of the categories. This would increase the proportion of industrial goods in our over-all exports. Despite what is being done by the Minister of Industry, Trade and Commerce (Mr. Horner), we depend almost exclusively on the sale of raw materials for export, rather than on manufacturing to provide the necessary jobs. Further processing of our natural resources in Canada would represent another opportunity to strengthen the economy and increase employment. These are investment imperatives for future economic strength, not just opportunities.
An industrial strategy will not be achieved by tax giveaways or passive acceptance of the export of jobs and capital from the country. The budget should have replaced the broad range of corporate tax cuts with a Canadian investment fund as proposed by my party. Such a fund, built up of private profits deposited to gain tax credits, would be available for investment under public authority to help rebuild Canadian industry. That is precisely what the Swedish government has done, and that country has surged ahead, while Canada has fallen behind. There would be a penalty for unapproved use of such profits; large firms could be required to contribute a share of their profits in times of inflationary pressure. A constantly revitalized economy, with well planned investment in Canada of at least some corporate profits, would be the result.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but his allotted time has expired. He may continue with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


An hon. Member:: No.
[ Translation]


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I am really delighted to take part in this debate, and I wish first of all to congratulate the hon. member for Westmount (Mr. Johnston), who has presented his ideas and remarks with quite a remarkable eloquence. 1 take also great pleasure in mentioning that the hon. member represents a linguistic minority within his province, just as I represent one within mine. [English]
Also, it augurs very well for the contribution of that hon. member to future debates. I strongly encourage him to bring to this House in the future the quality which he contributed today.
At the outset, I should like to indicate that as a representative of a northern Ontario constituency, I have followed issues affecting that area with a great deal of interest. I was extreme-
November 20, 1978

ly pleased with the budget and its provisions in terms of how the areas of northern Ontario are affected. Advantage will be made available to industry in northern Ontario, particularly the pulp and paper industry, by the 10 per cent investment tax credit. Northern Ontario has experienced the phenomenon of older mills and equipment in the pulp and paper industry, at a time when the industry is facing a bull market. I strongly encourage major corporations involved in the pulp and paper industry in northern Ontario, to avail themselves of the 10 per cent investment tax credit in order to renew equipment and refurbish old plants.
One item in the budget of considerable interest and importance to me, was the encouragement given to the mineral industry. Since the advent of the railway back in the 1880's, northern Ontario has seen the development of mining, unsurpassed anywhere else in Canada. Indeed, the mining industry has been an essential ingredient to northern Ontario and, as a consequence, to Ontario and the whole of Canada. It is encouraging to see the positive reaction within that industry to the initiatives of the government, such as mining tax incentives, including the write-off of development expenditures which is being increased from 30 per cent to 100 per cent.
In addition, the government has advanced its declared intention to allow costs associated with town sites and social assets of new mines to be subject to depletion write-offs, again a welcome intitiative supported by the industry.
Another example of co-operation with the province in the recent past can be found in a bill introduced at the last session of the Ontario legislature to provide a tax write-off for mining equipment. That tax write-off marries very well with the write-offs that are to be made available, and I would encourage the Ontario government to renew its efforts to pass that legislation which died on the previous order paper. This is a great initiative that we are presenting, and I hope it will receive the support of the Ontario government.
We have received encouragement in the past as a result of co-operation with that government. One example is to be found in the recent agreement between the federal government and the government of Ontario to provide $2.3 million for geoscientific surveys undertaken in the Kirkland Lake area of the province, an area which Your Honour will recognize as one of the most productive mining areas in the past.
Having regard to these budget proposals, let me say that my office has contacted a number of major mining concerns. In the last year I have visited some of those major mining operations in northern Ontario in order to familiarize myself with conditions there. As a result, I have established a rapport with the industry, and there has been a great exchange of information. Following the budget, the industry gave primary approval to its provisions.
I listened with some interest on Friday to what was advanced by the hon. member for York-Simcoe (Mr. Stevens). I listened to a small portion of his speech, and that was enough. For a number of reasons I had to leave, but I found,
The Budget-Mr. Blais
upon reading his speech, there was not very much I missed after the few remarks I heard.
He criticized the government in terms of Crown corporations. He attempted to wax eloquently about these corporations, and he advanced the notion of privatization. He indicated that the government should abandon its initiatives in terms of Crown corporations and launch itself into a program of privatization. Unfortunately, he seized upon two shining examples of government initiative in the Crown corporation field. The first was in respect of Petro-Canada; the other was in respect of a Crown corporation styled the Enterprise Development Corporation.
Let me deal first with Petro-Can. I have very fond memories regarding this corporation. I was a member of the committee on National Resources and Public Works when the concept was approved by the committee and parliament. I have watched its development as a concept and as a fact and its subsequent progress within the private sector. I suggest its progress has been commendable. I find it strange that the Tories selected that corporation in order to exemplify their response to Crown corporations and in trying to discourage the government from protecting the national interest. I find it strange that the Tory opposition, in this instance, should take exception to a national corporation acting within a very important industry in Canada, namely, the petrochemical industry, particularly at a time when they know full well there are other national corporations of foreign governments operating within this field. Hon. members recognize full well that British Petroleum has a large operation and capital investment in this field. They seem to have no objection to that corporation's operations within Canada and would not suggest at all that the British government should discourage BP from taking part in the North Sea play. I find it passing strange that members of the opposition should resist the initiative of this government to introduce a national oil company in the play in western Canada.
Hon. members of the opposition also know full well, especially members from Alberta, that other national corporations have capital investment in this field, including national corporations of Italy, France, Germany and Japan. There is an involvement on the part of the governments of those countries, yet there is no objection to that. However, as soon as the Canadian government introduces a national corporation to protect our national interests, there is objection.

Mr. Speaker, the hon. member for York-Simcoe (Mr. Stevens) stated, and I quote:
-the government no longer can afford the luxury of owning things as Petro-Canada.
-and-
-that the acquisition of Pacific Petroleums will not contribute to the production of one extra barrel of oil in this country, and it will not mean the employment of one more person.
The Progressive Conservative party therefore wants to return Petro-Canada to the private sector. Let it be known that

November 20, 1978
The Budget-Mr. Blais
I am against such an idea. Energy resources have become a major factor of public life. The interaction between government and private industry has become increasingly important and complex. The communication gap that sometimes exists between the government and the private industry represents a stumbling block to the development and realization of major national policies.
Petro-Canada was set up to help fill that gap and to facilitate a more immediate and close interaction between public policy and the operational realities of industry. Petro-Canada is also used for another purpose, that is to increase strongly the part played by Canada in a mainly foreign controlled industry. It also provides to Canadians the best possible profit for their substantial rights as owners of oil and gas deposits held by the Canadian government. The hon. member for York-Simcoe (Mr. Stevens) forgets the basic objective of Petro-Canada when he suggests that Canada cannot afford such a corporation. It is incredible. No doubt he forgets that the utmost priority for Petro-Canada is to help increase oil and gas supplies and assess the potential of main areas offering significant prospects for the increase of Canadian reserves.
Mr. Speaker, you will remember that some time ago the multionational corporations were stating that there were huge oil reserves in Canada, so much so that a government was prompted to promote exports when 100 per cent of that industry was controlled by multinationals. So it became obvious that to protect itself Canada had to have available an industry that could shed light on the sector of the oil industry, and that is why Petro-Canada was set up to be able to see exactly what happened in that industry. And, of course, we used extensively the information we have available which can guide the policy we wanted to adopt. It is important to remember that unlike certain national petroleum corporations, Petro-Canada was also set up as an alternative to the nationalization of the industry.
So it is not a matter of Petro-Canada taking over the area but rather acting in parallel with other corporations in the private sector. The hon. member for York-Simcoe cannot be very serious when he says the acquisition by Petro-Canada will not create a single job and not produce one more barrel of oil in Canada. He does not seem to realize that through that transaction Petro-Canada will have access to a production of oil and natural gas in southern Alberta beyond the bounds of his imagination-if one can find any because imagination on that side of the House, Mr. Speaker, is not in our supply-and as the result of the combination with Pacific Petroleums would become the second natural gas producer and the fifth oil producer in Canada a few steps behind the giant producers. Pacific Petroleums alone ranks second in Canada with respect to natural gas reserves and fifth with respect to natural gas production. Furthermore, Pacific Petroleums ranks fifth and ninth respectively for oil and production reserves.
[Mr. Blais.)
The hon. member of the opposition, the hon. member for York-Simcoe, is pessimistic as to the effect the acquisition of Pacific Petroleums will have on oil production. He does not even dare expand on his argument because he knows quite well that it is not well founded. If he examines the performance record of Petro-Canada, he will see that in 1977 that corporation as a result of its development operations, added 21 billion cubic feet of gas to its reserves. In addition, in 1977, Petro-Canada added 2.9 million barrels of oil and of liquid natural gas by-products to its reserves. Furthermore, in 1976, Pacific Petroleums had estimated reserves of 3.2 billion cubic feet of gas and 180 million barrels of oil. Its production was 396 million cubic feet of gas and 31,650 barrels of oil a day. Those facts clearly show that the Progressive Conservatives did not understand at all the transaction and the role of Petro-Canada.
Mr. Speaker, the hon. member for York-Simcoe (Mr. Stevens) says he is concerned about the fact that the purchase will create no new jobs. Once again his affirmation is without basis and does not take reality into consideration. On the contrary, such a purchase will allow Petro-Canada to undertake daring projects, in addition to strengthening its position in the marketplace. Doubtless those endeavours will create employment. Canadian money spent to finance exploration, production, development and transportation of oil and gas generates economic activity in Canada. At the same time, we have the opportunity of acquiring direct and precious experience in the technology of resource development and international economic activity.
In short, in this world where oil companies play an increasingly important role, Canada is developing expertise of great advantage to it. In any event, by operating at the international level, Canada, through Petro-Canada, will be able to open important markets, among those which supply equipment to the oil industry, allow drillings and offer professional and technical services. Speaking of exports, Mr. Speaker, I should like to point out to you some of the remarks made by the hon. member for York-Simcoe (Mr. Stevens) about the Export Development Corporation. He said he was taking that corporation to task and, again he was on the wrong track. The corporation proved that he knew nothing about the principles which govern it and it continues to serve the Canadian people well. In denouncing the increased support capacity of the corporation, the hon. member for York-Simcoe proved to us once again his lack of competence in economic matters. For the benefit of this House and the Canadian people, I should like to set the record straight and put things back in their right perspective.
First of all, it will be remembered that on June 30 last, Bill C-36, An act to amend the Export Development Act, was given royal assent and increased from $8.5 billion to $26 billion, the capacity of the Export Development Corporation to support and help Canadian exporters who in turn create jobs.


November 20, 1978

We are to be reminded that this increase in the level of support was not pure fantasy. It was brought about as a result of the increase in demand for the services of the Export Development Corporation. We as a nation must recognize the importance of exports. Twenty-five per cent of our GNP is represented by exports. Canada must increase its exports if it is to survive as a nation. The Export Development Corporation has assisted nearly 40 per cent of the exportation of equipment and products.
[ Translation]
What's more, the corporation has always shown profits. [English]
We have heard from the opposition comments to the effect that somehow $26 billion of support was going to come from government coffers. There is no recognition by the opposition of the fact that the Export Development Corporation has been a profitable enterprise. It has made money and it has obtained all the financing that it has needed from the international money markets. It has been able to meet its obligations always. [Translation]
It is important to understand-but the hon. member for York-Simcoe has not yet understood it-that the loans made by the Export Development Corporation do not leave the country, but rather are paid directly by the corporation to the exporter on behalf of the foreign buyer. The only object of the loans is to finance sales of Canadian goods and services to better meet the international competition of other trading countries.

If the suggestion that the Export Development Corporation ought to be disbanded, or somehow done away with, were adopted, it would really put Canadian competitors in the international market at a disadvantage. Hon. gentlemen opposite will recognize that all of our major competitors have organizations similar to the Export Development Corporation which assist their own exporters. They should recognize as well that the Export Development Corporation is most efficient compared with other export development corporations, or their facsimiles in other countries. It just stands to reason that all members of the House need to encourage this particular corporation if they are serious about increasing the manufacturing sector in Canada.
[ Translation]
Canada needed the additional capacity I was talking about, that is the $26 billion to reach the export level it would need in the future. Canada ranks among one of the most export-relying countries in the world. Exports account for $1,900 per Canadian. Given the fact that our domestic market is weak and that without exports our manufacturing prices would be a lot higher than world prices, Canada always had to strive fiercely against international competition.
The Budget-Mr. Blais

It is recognized that in an industrialized society, the competitive nature of the goods in the Canadian market depends on production rates and the level of investment. That, in turn, depends on markets. No Canadian entrepreneur is going to invest money, his or somebody else's, unless he knows there is a market for his goods. If there is no market for the output of his production, he will not invest any money.
So far as international consumption of goods is concerned, 20 per cent only of the world's population consumes 80 per cent of the world's production. There is a massive untapped market for Canadian exports, Mr. Speaker, and that is the market where our exports should go. I congratulate Canadian entrepreneurs who have been bold enough to go to communist China and seek out markets within that area. These are the areas for which the EDC would be ready to furnish funds to finance transactions. I might mention that in the recent past there has been a number of countries with whom we have had no trading experience but which have now benefited from EDC financing, thus encouraging the presence of Canadian businessmen within those areas.
In 1977 the Export Development Corporation offered lines of credit to Morocco, Egypt, Gabon, Algeria and Iran. They are contemplating other agreements with countries strongly interested in Canadian exports which are in a position to honour the loans made. Not only did the corporation join its efforts to those of exporters to make a breakthrough in foreign markets but even here in Canada it placed the emphasis on the closest collaboration with exporters in their own area. Mr. Speaker, the hon. member for York-Simcoe would like to dismantle the Export Development Corporation and use the money in Canadian projects in Canada. He is making a mistake once again because the Canadian economy cannot operate in isolation. It is quite the opposite and I am basing my argument on the statement made by the president of the Corporation Mr. MacDonald, and I quote:

Mr. Speaker, I see the leader of the opposition has joined us-or had joined
us.


Mr. Baldwin:: When he heard you, he went out again.


Jean-Jacques Blais: I simply want to indicate to him as the leader who wants to see the disbandment of the Export Development Corporation and the disappearance of Petro-Can, that those are two major corporations which reflect upon our future. They make Canada, of all the western industrialized nations with which we compete, the only one that has any chance of becoming self-sufficient in energy and the only one that has access to new technology and new technological developments.
We in Canada have advantages in terms of foreign trade which are not enjoyed by any of our competitors.

November 20, 1978
Royal Assent
We need the instrument of the Export Development Corporation in order to get into those markets. Anyone who does not see that has blinders and blinkers and everything else. Mr. Speaker, the hon. member for York-Simcoe (Mr. Stevens) is the prime mover of the retrograde policy being advanced by the Tories.

We have to shift more and more to exporting equipment goods and related services with a view to obtaining the kind of economic growth Canada needs to provide the number and type of jobs corresponding to the skills of our labour. It is precisely these labour intensive goods and services, products of the Canadian technology which will contribute to create future employment. And it is to this effect that EDC support is absolutely necessary.


MESSAGE FROM THE SENATE
Mr. Speaker:: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate have passed Bill C-5, an act to amend the Old Age Security Act, without amendment.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the House that a communication has been received on November 20, 1978, which is as follows:
Government House Ottawa
November 20, 1978 Sir,
I have the honour to inform you that the hon. Wishart F. Spence, O.B.E. Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate chamber today, the twentieth day
of November at 9.50 p.m. for the purpose of giving royal assent to certain bills.
I have the honour to be,
Sir,
Your obedient servant,
Edmond Joly de Lotbiniere Administrative Secretary to the Governor General


Mr. Speaker:: The House will understand that, as a result of these arrangements, the Senate having passed the bill in connection with the old age pension, and the desire of the

House to proceed to the division at this time in accordance with the Standing Orders with respect to the budget debate, we may be in the position of continuing a few minutes beyond the ordinary hour of adjournment so that we may receive the message from the Senate and proceed to the Senate for the purpose of receiving royal assent to the old age security bill. I presume, if that is necessary, there is a disposition in the House to attend the Senate at that hour and for that purpose. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed, and so ordered.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Chretien that this House approves in general the budgetary policy of the government and the amendment of Mr. Stevens (p. 1249), and the amendment to the amendment (Mr. Knowles, Winnipeg North Centre).
Mr. Speaker:: It being 9.45 p.m., it is my duty pursuant to Standing Order 60(6) to interrupt the proceedings and put forthwith the question necessary to dispose of the amendment to the amendment now before the House.
The question is on the amendment to the amendment. Is it the pleasure of the House to adopt the said motion? All those in favour of the amendment to the amendment will please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: All those opposed, will please say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion, the nays have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.


Mr. Speaker:: I therefore declare the amendment to the amendment lost.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable the Deputy Governor General desires the immediate attendance of this honourable House in the chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate chamber.
[Stage Direction]
And being returned:
Mr. Speaker informed the House that the Honourable the Deputy of His Excellency the Governor General was pleased to give the royal assent to the following bill:
Bill C-5, an act to amend the Old Age Security Act-Chapter No. 3.
* *
*

Walter David Baker: Mr. Speaker, on a point of order. We were informed earlier in the day that the budget debate would be continuing tomorrow. Is there someone here who can confirm that?


Pierre Elliott Trudeau: Yes, Mr. Speaker, I can confirm that. I am taking a chance, but I can confirm it.


Mr. Speaker:: It being ten o'clock, this House stands adjourned until tomorrow at two o'clock in the afternoon.
At 10.25 p.m. the House adjourned, without question, pursuant to Standing Order.

Tuesday, November 21, 1978