1978-11-23

ROUTINE PROCEEDINGS


[Stage Direction]
5.0.	43
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I rise on a matter of urgent and pressing necessity, pursuant to the provisions of Standing Order 43, which I trust will meet with the approval of the House.
In view of the alarming spill at the city of Regina of a least 1,500 gallons of Askral, a PCB, a chemical that has been linked to cancer, birth defects and other ailments, this being the biggest known spill of PCBs in Canadian history, I move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That the House instruct the minister of the environment to make provision in his department and in co-operation with provincial environment departments for the establishment of a detection and correction squad, being an investigative and action-oriented task force which in the future could act quickly on such industrial spills as have occurred in Regina and at Dowling, near Sudbury, thus affording protection to the health and safety of Canadians and literally saving millions of taxpayers' dollars.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC ACCOUNTS
[Stage Direction]
5.0.	43
Mr. Ron Huntington (Capilano):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity, and seek the unanimous consent of the House for my motion.
Whereas the Standing Committee on Public Accounts will have the Auditor General of Canada before it at 3.30 p.m. today to be questioned on his 1978 report, as this report is
possibly one of the most important reports tabled in the House of Commons, and because there is high media and public interest in this subject matter, I move, seconded by the hon. member for Eglinton (Mr. Parker):
That the electronic media be allowed to join their colleagues from the press gallery and report on the special meeting of the Standing Committee on Public Accounts this afternoon.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HAZARDOUS SUBSTANCES
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I rise, under Standing Order 43, on a matter of urgent and pressing necessity. It has been reported that a tank car of lethal hydrogen-sulphide gas was left standing unguarded at the Sydney CNR depot for 30 hours on the weekend of November 4.
In view of the fact that a former professor of chemistry at the college of Cape Breton says leaving such a potentially dangerous commodity-comparable to hydrogen-cyanide in its destructive capabilities-in a highly populated area is a dangerous threat to the people, I move, seconded by the member for Sault Ste. Marie (Mr. Symes):
That in future the CNR be instructed by the Atomic Energy of Canada Limited to place such tank cars at a siding in a less populated area.


Mr. Speaker:: Order, please. Such a motion can be presented for debate at this time only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
80067-1 IVi

November 23, 1978


AGRICULTURE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to introduce a motion dealing with an important matter of pressing necessity.
In view of the fact that poultry producers in Quebec requested some time ago the establishment of a national chicken marketing board and that it is urgent to set up such a board immediately to avoid the deterioration of the market at the expense of Canadian producers, 1 move, seconded by the hon. member for Lotbiniere (Mr. Janelle):
That the Minister of Agriculture (Mr. Whelan) be directed to proceed immediately with the creation of that board for marketing both Canadian and imported poultry.


Mr. Speaker:: Under the provisions of Standing Order 43, the presentation of such a motion requires unanimous consent. Is there such consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


GOVERNMENT STRATEGIES ON MOVEMENT AND SALE-MOTION UNDER S.O. 43
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity regarding reports from Washington of a further United States wheat sale of 145,000 metric tonnes to China, bringing the total United States wheat sales to China for this year and next to four million metric tonnes.
In light of the serious implication this has for Canada's position in world grain markets, I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That the minister responsible for the Canadian Wheat Board make a statement on motions detailing the government's strategies for the sale and movement of grain for the balance of this crop year and inform the grain producers of this country of all immediate and future measures he is planning to take to ensure that world markets for Canadian grain do not continue to slip away.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HEALTH AND WELFARE
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise, under the provisions of Standing Order 43, to move a motion of urgent and pressing necessity. I move, seconded by the hon. member for Provencher (Mr. Epp):
That the government abandon the foolish idea that you can make significant savings in the health care field by cutting back on biomedical research, and that the government recognize that the only way to affect such savings is to increase expenditure on research.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SOCIAL INSURANCE
Mr. Leonard C. Jones (Moncton):: Mr. Speaker, I rise to move a motion of urgent and pressing necessity and of great public concern, under the provisions of Standing Order 43.
Whereas mail addressed to military personnel in Canada and elsewhere is being returned because the social insurance number is not included in the address, and whereas it is not possible to legally obtain the social insurance number of any Canadian citizen except, of course, from the individual, I move, seconded by the hon. member for Brant (Mr. Blackburn):
That the Prime Minister, the Postmaster General and the Minister of National Defence issue a joint statement to cease this procedure, practice or policy and, further, that the same ministers take steps to make certain that these practices, procedures or policies halt for all Canadians.


Mr. Speaker:: Presentation of such a motion for debate can be done, in conformity with Standing Order 43, only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AUDITOR GENERAL
[Stage Direction]
TABLING OF 100th REPORT
Mr. Speaker:: Before beginning the oral question period, I have the honour to lay upon the Table the 100th Annual Report of the Auditor General of Canada to the House of Commons, for the fiscal year ended March 31, 1978. I would remind hon. members that, pursuant to Standing Order
November 23, 1978

65(1 )(a), this report is deemed permanently referred to the Standing Committee on Public Accounts.
I take particular pleasure in introducing this report into our proceedings in the presence in our gallery of the Auditor General of Canada, Mr. James Macdonell.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, may I say, on behalf of this side of the House, that we hope the second century of reports of the Auditor General receives much more careful attention by the government than has been the case in recent years.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: My question is to the Prime Minister. I understand that the Auditor General's report talks about the problems created by self-perpetuating programs and about the very real difficulty of parliament being able to ensure that programs are accomplishing the purpose for which parliament established them. Would the Prime Minister tell us if it is the intention of the government to adopt some species of my proposal to introduce into practice in this parliament a form of Sunset law?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I can understand the Leader of the Opposition's concern about the first century, particularly the early part when it was dominated by so many Conservative governments.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I wish the Leader of the Opposition would make some specific proposals about Sunset laws. He has talked about them, I understand in various forums. I remember introducing into this House a Sunset law in one particular piece of legislation and department, and having all the Tory party oppose it, saying we should not have anything disappear.


Charles Joseph Clark: Mr. Speaker, in terms of that long period of Conservative domination, we intend next year to start another century of it.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: For the Prime Minister's reference, I draw his attention to a proposal placed on the order paper by my
Oral Questions
colleague, the hon. member for Dartmouth-Halifax East, outlining in detail a proposal for a Sunset law.
My question now for the Prime Minister has to do with recommendations with which I am sure he is familiar, coming from myself and other members of this House on various committees, relating to procedures in this House. Is it the intention of the Government of Canada to introduce reforms to the rules of this House that will allow there to be consideration of the estimates of some departments without a time limitation?


Pierre Elliott Trudeau: Mr. Speaker, the question of House rules has been before this House a few times since I have been Prime Minister. We have never had the co-operation of the opposition party in any of our attempts to make this House more efficient.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: We made specific proposals. We suggested forms of allocating less time on second reading, for example, as is the case in the British parliament where they spend one day in principle on second reading. We have seen this opposition talk for days and days and days on second reading, while it should be the occasion, under the rules, when they would only state their position in principle.
However, with this kind of a party, they have no position on principle. They get around that by talking for days and days on the subject. This is against the spirit of the law as it is practised in the British parliament.


Charles Joseph Clark: Mr. Speaker, that is the second question the Prime Minister has refused to answer in the House. Since that recommendation came from a committee which includes members of his party, I can only assume that there are some members of his party, and not just us and the media, whom he considers to be the enemy of the country.
1 would like to direct a final supplementary, in the hope it might begin the tradition of having some questions answered here. I direct it to the President of the Treasury Board.
In light of the concern expressed by the Auditor General that parliament and the people of Canada have inadequate information on which to judge the estimates which are brought forward in the House of Commons and have to be approved by this House, I wonder if the Auditor General would give us a guarantee-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: He is not here.


Charles Joseph Clark: 1 inadvertently referred to the Auditor General. There is no question that we would have more information forthcoming from that gentleman were he occupying that seat instead of the President of the Treasury Board.


Some hon. Members:: Hear, hear!

November 23, 1978
Oral Questions


Charles Joseph Clark: My question to the President of the Treasury Board is the following: will he give us an unqualified guarantee that any future estimates he might bring into this House of Commons will be estimates that have the fullness of information-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: I am not sure, but I suppose the government is always nervous-


Mr. Speaker:: Order, please. Perhaps we had better conclude this question.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I will conclude the question, Mr. Speaker, when the government members conclude their attempts to interrupt and stop us from putting questions in this House.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Possibly I can get a little quiet from over there. Can we have, from the President of the Treasury Board, an unequivocal guarantee that any future estimates he or his short-lived government might introduce into this House will contain the kind of fullness of information that was requested and recommended by the Auditor General in his report?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, the development of new forms of the estimates is a matter that has been under consideration by this government; in fact, in co-operation and in consultation with the public accounts committee. The deliberations are going on. There are some very interesting advances being thought out. We will only put them in after we have had exposure to and advice from the public accounts committee. Therefore, I am not making any time guarantee; I will only say that progress is being made.


PUBLIC SERVICE
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is directed to the Prime Minister. A good portion of the Auditor General's report just tabled by Your Honour deals with the lack of performance measurement systems, that is, some way by which the government is able to measure the productivity and efficiency of people in the public service. For instance, he says that in 16 performance measurement systems covering 100,000 man-hours in 12 departments, only two systems were satisfactory. I ask the Prime Minister, who has for ten years been leader of the government, why there should be such a deplorable record as that in the public service.


Robert Knight Andras: I should like to reply to that question having more direct knowledge about it. Indeed, we want to see vast improvements in performance measurement, vast improvements in the techniques and methods used to evaluate programs. I think objective observation would indicate that the practices this government has already installed are applauded by other governments around the world and are, in fact, the subject of considerable encouragement from the Auditor General as to what we have done and what we intend to do.


Some hon. Members:: Oh!


Robert Knight Andras: That is not to say they are perfect, but we are advancing and our methodology is being given great credit by many observers outside the government and in the private sector.


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: The hon. gentleman says they are not perfect. The Auditor General says they are non-existent; that is the point.


Some hon. Members:: Oh, oh!


Allan Frederick Lawrence: Another section in the report deals with the evaluation of programs, that is, information on the accomplishments of programs and policies. In 23 programs in 18 departments, the Auditor General says there is no evaluation process. Either the Prime Minister or the President of the Treasury Board should tell us why not.


Robert Knight Andras: I think the hon. member would be more credible if he presented a more balanced approach to this subject. He should read the Auditor General's overview comments. There is no doubt that in the so-called spice observations there are many criticisms, many of them justified. We welcome those criticisms. They do date back, however, to events, projects and undertakings of several years ago. They are very valuable to us, enabling us to refine our programs and devise improvements which we want to instal in the future. I think the hon. member would serve the House better if he took a more balanced approach to the report.


Allan Frederick Lawrence: In dealing with parliamentary control, the accountability of the government to parliament, the Auditor General recommends a brand new approach. But he does say that after three successive auditor general's reports, three successive reports of the public accounts committee on three separate occasions, Treasury Board indicated its intention to follow the recommendations which were made. He says now, in this year's report, that little has been done.
Again, my question is a simple one; it is directed to the President of the Treasury Board and it affects the credibility of Treasury Board. Why has Treasury Board not done what it said it would do in three successive years?


Robert Knight Andras: Again, an objective examination of the facts and of the report would indicate that the Auditor General
November 23, 1978

Oral Questions LABOUR CONDITIONS
himself has noted a great deal of progress on many fronts by Treasury Board and by the departments which come under its examination.


HEALTH AND WELFARE
Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is for the Minister of National Health and Welfare, the minister charged with responsibility for protecting and maintaining the health of Canadians. I should like to ask whether the minister and her officials are familiar with documents filed in a recent U.S. court case which show that as early as 1949, Canadian asbestos companies were aware of the serious health hazards to which their employees were exposed.
If the minister is not familiar with these documents, would she assure the House that the department will get copies of them and look into these charges?


Hon. Monique Begin (Minister of National Health and Welfare):: I will, Mr. Speaker. The general problem of asbestos in relation to health is well known to us. The hon. member refers to particular documents going back to 1949. My department probably has them, but I will pass on the information.


Derek Nigel Ernest Blackburn: 
OCCUPATIONAL HEALTH AND SAFETY OF WORKERS EXPOSED TO ASBESTOS HAZARDS
Derek Nigel Ernest Blackburn: Mr. Speaker, there is much medical evidence to show the dangers of working near asbestos. My final supplementary is directed to the Acting Minister of Labour. Has the Department of Labour's new centre for occupational health and safety had any discussions with the provinces concerning workers who have been exposed to asbe-stosis, asbestos hazards, and specifically whether there is a need for joint action in determining what persons have been affected and what medical attention is appropriate?


Hon. Andrg Ouellet (Acting Minister of Labour):: Yes, Mr. Speaker, the new council is currently being set up. As a matter of fact, there have been consultations between federal and provincial officials on this subject, and if the hon. member wishes to obtain further information, I should be pleased to send them to him.


AGRICULTURE
Joseph Adrien Henri Lambert: As the Minister of Agriculture is absent, Mr. Speaker, could his parliamentary secretary advise the House whether, pursuant to Bill C-76 which was adopted a few years ago "to authorize the establishment of national marketing agencies for farm products," chicken and poultry producers in Canada have submitted an application for the establishment of a national marketing board for chicken, and if so, what stage of the examination process has their application reached now?


Mr. Yves Caron (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, the various provincial marketing boards for chicken have indeed submitted to the federal government applications for the establishment of a national marketing board for chicken.
As to the application per se, I must advise the hon. member that we, together with several hon. members on the government side, recently met the representatives of the Quebec poultry producers, who have submitted this application which in turn I have referred to the Department of Agriculture, and an important decision is forthcoming concerning the establishment of such a board.


Joseph Adrien Henri Lambert: Mr. Speaker, I would like to direct a supplementary question to the Prime Minister.
Since this is of nationwide capital importance, could the Prime Minister advise the House, if the request for the creation of a national chicken marketing board has been brought

November 23, 1978
Oral Questions
to the cabinet's attention? If so, can he also tell us if a decision is forthcoming on this, as was suggested by the Parliamentary Secretary to the Minister of Agriculture? I want to specify to the Prime Minister that I do not want to cause any embarrassment through this question. I am simply asking a logical question which is of concern to a great many producers and which also affects Canadian harmony, because that is the basis of common understanding throughout Canada as regards marketing.


Pierre Elliott Trudeau: Mr. Speaker, I appreciate that the hon. member does not want to cause any embarrassment. I apologize, I was not following the prior questioning, that is why I referred to the Parliamentary Secretary to the Minister of Agriculture. But if he would take note of the question, I will gladly discuss it with him.


GOVERNMENT EXPENDITURES
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, I would like to ask a question of the President of the Treasury Board with regard to the report tabled today by the Auditor General, in which he details millions of dollars of waste of the taxpayers' dollars.
As the President of the Treasury Board will know, in the report the Auditor General examines some 13 acquisition projects worth $700 million, and of those 13 he found that 11 lacked adequate controls on expenditures, with the consequent waste of millions of dollars of the taxpayers' money.
In view of that fact, what assurances can the minister give the Canadian taxpayers that the same pattern of inadequate controls and waste of the taxpayers' dollars will not continue all the way through the $10 billion in expenditures which are currently under way in capital projects for this government?


Robert Knight Andras: Mr. Speaker, I am sorry to disappoint the hon. member in telling him that I do not for a moment think that that is the situation throughout the government. As all hon. members know, this very valuable and comprehensive report tabled today by the Auditor General is the first one he has filed under the very expanded mandate which this government brought in within the Auditor General's bill last year.


Some hon. Members:: Hear, hear!


Robert Knight Andras: Indeed, the Auditor General is now embarking on one very valuable expansion of his powers, the exercise of exploring value for money.


Mr. Baldwin:: That is nonsense.


Robert Knight Andras: The exploration by the Auditor General into value for money is nonsense? I find that an extremely interesting comment.


Gerald William Baldwin: He had more rights before.


Robert Knight Andras: There have been many steps taken. The Auditor General is aware of that and he makes reference to them in his comments in the report, with regard to very much improved systems of control, not the least of which is also another measure by this government and that is the installation and recruitment of a very effective officer in the position of Comptroller General of Canada. Indeed, he is beginning to install the systems working in co-operation with the Auditor General, and I think you will see further vast improvements over those we have made in the last two, three or four years.


Henry Perrin Beatty: Mr. Speaker, Canadian taxpayers will not rest easy tonight after that answer from the minister. I want to ask the minister about one specific example with regard to the 13 projects audited by the Auditor General. It concerns the way in which the taxpayers' money is being squandered on the C. D. Howe building here in Ottawa, the lavish headquarters for the Minister of Industry, Trade and Commerce.
In view of the fact that the Auditor General's report discloses that the government's decision to have the developer finance the project, as opposed to financing it itself, cost taxpayers $12 million, can the President of the Treasury Board tell this House how he justifies that waste of the taxpayers' money?


Robert Knight Andras: Mr. Speaker, we will be very glad to go into that in great detail in the appropriate forum, which I think would be the first available meeting of the public accounts committee. The people who are directly involved in any one of the several spice examinations recorded by the Auditor General will be present to answer in detail.


Henry Perrin Beatty: Mr. Speaker, in his report the Auditor General points out that before engaging in major capital projects for acquiring new office space, particularly in Ottawa, the government has not looked adequately at all the alternatives, including the possibility of renting space. The result has been the loss of millions of dollars of taxpayers' money.
What assurances can the President of the Treasury Board give this House and the Canadian people that in the future all these alternatives will be examined and that, in particular, they will examine the option of renting before building themselves?


Robert Knight Andras: Mr. Speaker, we have been examining those options. Indeed, there is a major study under way on the question of lease versus purchase and contracting for buildings ourselves versus leasing space. Those details are available to the House.
November 23, 1978


FINANCE
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, 1 have a question for the Minister of Finance, but in his absence I will put it to the Prime Minister. A great deal of concern is being expressed by automobile dealers regarding the reduction in the federal excise tax as set forth in the recent budget. Many of these dealers have three and four months' inventory on hand as a result of the introduction of new models of vehicles and they estimate that they could lose as much as $60 million because of the tax reduction.
Will the Prime Minister consider and entertain a rebate program for certain large dollar items? There is precedent for this in the 1958 budget and the 1974 budget.


Pierre Elliott Trudeau: Mr. Speaker, that seems to me like a rather extraordinary suggestion. When the government introduces a budget which cuts indirect taxes, the federal sales tax, the effect of which is that manufacturers and sales companies will cut the price of automobiles to the Canadian consumer, the hon. member is not happy: he would like us in some way to pretend that this tax had been known and that people could, in advance, get some kind of remuneration for it. I do not see how we can seriously contemplate indemnifying people whose stocks of cars were bought before the sales tax was cut. Surely, the consumers' interest is foremost.


William James Kempling: Mr. Speaker, I do not think the Prime Minister understands. These people had already paid the 12 per cent excise tax before the government arbitrarily reduced it to 9 per cent. I am not disputing that it should be less than 9 per cent. I am saying that in good faith the dealers paid 12 per cent, they have these automobiles in stock and they are asking now if the government can follow a precedent set in 1958 and 1974, and give a rebate.
Furthermore, there is a great-deal of inventory in transit that will not reach the dealers' hands for three or four weeks. They will be charged 12 per cent on that as well, when they do not even have it in stock. Will the government not consider that?


Pierre Elliott Trudeau: Mr. Speaker, will the government also have to indemnify all the consumers who bought-


William James Kempling: 1 did not ask you that.


Pierre Elliott Trudeau: -any object which was hit by a sales tax? I wish the opposition-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Mr. Speaker, I do not know what the heckling is all about. They were told to keep quiet, not to heckle, and to wear blue suits-and they should do that.


Mr. Dick:: You're the only one wearing a blue suit.
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, I even saw the right hon. gentleman from Prince Albert hammer his desk yesterday rather than applaud, and I think this should be drawn to your attention.

[ Translation]


OFFICIAL LANGUAGES
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is directed to the Secretary of State.
In view of disturbing comments made by non-government groups, could the Secretary of State assure the House that the government does not intend to cut funds for the $75 million five-year program to support both French-speaking and English-speaking minorities announced by himself in December 1977. Even if no announcement has been made so far for 1978-79, it is rumoured that the Secretary of State might have reservations about the amount of $12 million. I would like to have the assurance today that this is not the case.


Hon. John Roberts (Secretary of State):: Mr. Speaker, there will be no reduction in the commitment made by the government to support the development and the progress of minority groups in both official languages. Thus, as I announced last year, in December I think, an increase of $75 million was earmarked for that purpose. There was no cut in this financial year as far as programs for minority groups in both official languages are concerned, and it is still true. In that respect, we did not change our decision to fulfil the commitment I made last December.


URBAN AFFAIRS
Mrs. Jean E. Pigott (Ottawa-Carleton):: Mr. Speaker, my question is to the Minister of State for Urban Affairs, the man in the grey suit.


Some hon. Members:: Oh, oh!


Jean Elizabeth Pigott: In light of recent remarks made by the minister that he wanted to better target the housing dollar, specifically with regard to the Cloverdale project in Pierrefonds and the fact that the people there have not been able to meet with the minister, I wonder if he could give this House a guarantee that the 2,000 people involved in this sale will be protected under the conditions of the sale?
1404

November 23, 1978
Oral Questions


Hon. Andr6 Ouellet (Minister of State for Urban Affairs):: Mr. Speaker, the hon. member should know that when Central Mortgage and Housing Corporation sells such a project, there is of course quite a normal condition in any transaction, which is that leases continue for the current year. Therefore the tenants do not have to fear that during their lease the rent might be increased.
Second, for those living in subsidized housing, there is a formal warranty to be agreed to by the new owner, which is that the same conditions in force under the ownership of Central Mortgage and Housing Corporation will continue for one year under the new ownership.
Now, for those who might fear that rents could be increased unduly, it is obvious that in the Cloverdale case, which is a housing complex located in the province of Quebec and subject to rental board regulations, any undue rent increase could be submitted to the rental board and be rectified where necessary.


Jean Elizabeth Pigott: A supplementary question, Mr. Speaker. I ask the minister whether he would inform the House about this particular sale, as this property has been evaluated at $10 million and is to be sold for $4 million cash to a group called Grado. Can he tell us a little more about the sale and the conditions of the sale?


André Ouellet: Mr. Speaker, the procedure for selling projects owned and taken back by Central Mortgage and Housing Corporation following bankruptcy is always the same in all cases. I do not want to make this an exception. I sent the hon. member a document she now has and which she can read, I hope, and which clearly states that before offering it on the public market, we first offer it to provincial corporations. So, first, in the case of Cloverdale, the project was offered to the Quebec Housing Corporation, which turned down the offer. Second, we considered the possibility of selling it to a nonprofit venture. Such organizations are more interested in smaller projects. Since this is a large project, no non-profit organization could afford to buy it. Third, it was therefore possible to sell it on the open market by calling for public bids. That has been done and in principle, the transaction was to be closed on December 1, the project being sold to the highest bidder.


FORESTRY
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is for the Minister of State (Environment), and is

with regard to the effects in his department of a recent cost-cutting exercise, to use the Prime Minister's words, which turns out to be more of a cost-shifting exercise.
It is clear that the Canadian Forestry Service has undergone a policy review. Judging from the recent acts of the government, it would appear it is the policy to phase out the Canadian Forestry Service. Can the minister tell the House whether he still lives by his commitment to the private sector to enhance the role of the Canadian Forestry Service instead, or is he really presiding over the demise of that most important public service?


Hon. Len Marchand (Minister of State (Environment)):: Mr. Speaker, the Government of Canada treats the forestry service that we have in this country as a very important one. The recent cuts were really regrettable, but I think the cuts made in the civil service were perhaps far less than those that would have been made by the party on the other side. Since that party opposite talks about a cut of 60,000 civil servants, I think the hon. member had better reconsider the kind of question that he is asking.


Frank Oberle: A supplementary question, Mr. Speaker. Just 30 days prior to the cuts that he is referring to, the minister committed himself publicly, to the forestry service, that no such cuts would be taking place in that crucial area. The fact is that the government is shifting responsibility to the provinces and the private sector. Can the minister tell the House what reaction he has received at this point from the private sector in response to his attempts to shift that responsibility, which is really one of government, to private industry?


Len Marchand: Mr. Speaker, we have had a very positive response from the private sector, and to the privatization of the two labs in particular, the forest products lab in Vancouver and the forest products lab in Ottawa. The Canadian Forestry Advisory Committee, which is chaired by Mr. Rogers of Crown Zellerbach, and other meetings I have had with the private industry, have welcomed this move. I have said on many occasions in this House that we are going to get very great co-operation from private industry and from the privatization of those two labs. We will also get very great co-operation from the universities as a result of the privatization of those two labs.


EXTERNAL AFFAIRS
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I have a question for the Secretary of State for External Affairs and it concerns the discussions just concluded with Mr. Cyrus Vance. I wonder whether the minister could advise if the report that Canada is now willing to compromise in terms of our claims in the Beaufort Sea is accurate. If it is accurate, can the minister advise whether he has sufficient information
November 23, 1978

from the industry as to the value of hydrocarbons in that sea to make any kind of meaningful proposal?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, in the context of the hon. member's question, there has been no compromise. I suppose the whole negotiating process on any issue can be regarded as being, in a sense, a compromise in that a number of propositions are put forward and changed as the process goes along. Incidentally, no firm commitments have been made on any of the boundary issues as of this moment.
I personally cannot answer with regard to the hydrocarbon assessments. I would take the question as notice, if the hon. member agreed, or perhaps refer it to my colleague, the Minister of Energy, Mines and Resources. I am not myself competent to answer that question.


Stuart Malcolm Leggatt: A supplementary question, Mr. Speaker. I am sure that one of the other subjects discussed was the question of fishing rights with respect to the two countries in an attempt to put an end to what has been termed as the "fish war".
In British Columbia, we have 300 to 400 halibut fishermen who have been kicked out of the Bering Sea and who do not know whether they will fish next year at all. They have made a massive investment in their boats. Can the minister give the House some assurance that those fishermen will be allowed to continue fishing next year, or will be taken into the salmon fishery itself if they do not have the right to fish for halibut?


Donald Campbell Jamieson: Mr. Speaker, I am very well aware of this problem from the representations and discussions I have had with the Minister of State (Fitness and Amateur Sport), who has a direct interest in this matter because it is in her part of British Columbia. In so far as whether we can give the kind of assurances to which the hon. member referred, of course, it depends on the outcome of the negotiations. Halibut fishing is one of the issues; groundfish is another of the issues. Indeed, there is a whole complex of questions now being resolved.
In order to eliminate the uncertainties to which the hon. member has made reference, yesterday we gave the negotiators a very specific instruction to end their negotiations by the end of this current year. If there are unresolved problems at that time, they are to refer them to the ministers concerned, namely Mr. Vance and myself.
We are reasonably confident now that we will get a comprehensive fisheries' agreement between now and the end of the year. I can assure the hon. member that the interests of the halibut fishermen and, indeed, the interests of all fishermen, will be taken into account in that agreement.
If I may just have a few more seconds, Mr. Speaker, we have been consulting with literally every group on both coasts, and this is the process which has slowed up a final resolution, because we want to make sure that all of the inputs are there. Obviously, we may not be able to satisfy everyone on every issue, but we will do our best to get something that is in the best interests of the maximum number of fishermen, including the halibut fishermen.
Oral Questions CORPORATE AFFAIRS


PROPOSED TAKEOVER OF SIMPSONS BY HUDSON'S BAY
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. Will he confirm the bureau of competition policy is reviewing the proposed takeover of Simpsons by the Hudson's Bay Company, since if it goes through it will mean that one company will control more than two-thirds of the department store market in Canada, a level of concentration which could be contrary to the best interests of consumers?
Also would the minister and the government now agree that this proposed transaction shows a need to finally complete the reform and updating of our existing competition law, since it is likely not adequate to permit the government to deal fully with this or any kind of merger? Could he tell us when the government is likely to present a bill to this House to complete the revision of this important branch of the law?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, under the Combines Investigation Act, the director of investigations has been made aware of the proposed transaction between the Hudson's Bay Company and Simpsons Ltd. and is taking his responsibilities under the act.
As the hon. member knows, I cannot say anything further on that at the present time. With respect to a further reform of our competition laws, we are continuing discussion of this matter and hope we can announce something in due course.


NATIONAL SECURITY
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to have addressed this question to the Minister of Justice, but in his absence I shall direct it to the Solicitor General.
Yesterday, the hon. member for Peace River asked some very important questions in reference to the use or abuse of section 41(2) of the Federal Court Act. We are dealing with a question of personal liberty and a charge made under the Official Secrets Act. I should like to ask if the minister would reconsider his position, because the guilt or innocence of an accused is decided by a judge alone or by a judge with a jury.
In light of the fact that the minister, by the use and abuse of this section, has withheld the documents that may determine the guilt or innocence of a person and affecting their personal liberty, will he reconsider his position and at least use section 41(1) and allow the judge to examine those documents in camera, so that a proper charge can be made to the jury? This is particularly important when we are dealing with a case of personal liberty under the Official Secrets Act, under which the charge was laid by this government.
80067-18y2

November 23, 1978
Oral Questions


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I am very pleased that the hon. gentleman permits me to offer further clarification. It seems that he has misunderstood the position I have taken, judging from some of the reports about the action I have taken. If he reads carefully what I said yesterday in the House and what the Prime Minister said yesterday in the House, he will see that I filed two affidavits. One was filed under section 41(1) and covered 16,500 documents, more or less. Those documents are made available to the judge so that the judge can put his own evaluation on the nature of the documents and agree with me that they ought not to be produced to the court.
In terms of the very small portion of the total documents involved, namely, 548 documents, I felt that it was my responsibility-and in that I am supported by precedent-to decide whether the documents referred to information received from third country agencies, agencies which provided us with that information in confidence, and if providing those documents to anyone would be in breach of that confidence. Section 41(2) permits me, as is my responsibility, not to produce those documents to the tribunal.


Eldon Mattison Woolliams: Mr. Speaker, that was a very interesting answer.


Donald Campbell Jamieson: 1 thought so.


Eldon Mattison Woolliams: The Solicitor General said "a small amount of documents". "Small" means 548, which is something like the money this government spends.
I am asking the minister, again, a very serious and important question that goes to the liberty and freedom of the individuals in question. Respecting those 548 documents, does the minister not have trust in the judiciary of this country and the judges in question to examine the documents in camera? If he feels there will be some injury to the state, or some breach of security, then they would not be made public; but at least those documents would be examined by the court and not withheld from the court by a discretion maybe wrongfully used by the minister.
Will the minister reconsider his position and let the judiciary do the work, rather than the executive, of trying people in this country for acts of which they may not be guilty?


Mr. Blais:: Mr. Speaker, the hon. gentleman will recognize that the 548 documents he has referred to are basically part and parcel of working files. There were 117 files. There is no great distinction in the documents, in terms of what they contain. It is simply the source of the information, so the judge will be able to see, if he wishes, the documents that he has available to him and will see quite readily that there is no need to see the balance of the documents.


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: I might indicate to the hon. gentleman that I am ready to trust the judiciary to exercise its own responsibility in terms of dealing with the issues which they have before them.


PRODUCTION OF DOCUMENTS TO THE JUDICIARY
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I just have one question for the Solicitor General. Has he read these documents to which he refers? If so, does he think that he is any more trustworthy than a judge of the superior courts of this country?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, 1 answered that question yesterday. I exercised a political responsibility, and in my view I exercised that political responsibility in accordance with the law of this land.


NATIONAL UNITY
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is directed to the Prime Minister. Given the blanket accusation by the Minister of Finance that the provincial premiers constitute the greatest threat to national unity in this country, would the Prime Minister now name those provincial premiers; and that word was used in the plural by the Minister of Finance? Would he now name those provincial premiers who he and his colleagues feel are actively working to destroy Canada?


Pierre Elliott Trudeau: Mr. Speaker, the hon. lady quotes from a speech by the minister. I did not see the speech and I do not know in what context it was made. He said "premiers"; I suppose he has in mind more than one. I have in this House, and outside, taken the occasion to say personally that I thought the view of Canada propounded by the premiers, particularly in the constitution debate as they formulated it last summer in Regina, was not conducive to the kind of strong Canada in which we on this side believe. I know that is not the view of the hon. lady, and I think it is perhaps an honest disagreement. I wish she would name the premiers, singular or plural, who are contributing to the kind of Canada for which she stands.


Flora Isabel MacDonald: Mr. Speaker, I have no hesitation in saying that the provincial premiers I know are working for the unity of this country.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: I realize it is much easier for the Prime Minister to offer evasive answers or to offer sweeping indictments outside this House than it is to give precise answers within the House.
I should like to ask if he believes that such a sweeping and irrational indictment by his Minister of Finance really constitutes the kind of approach that we should have in this country on the eve of a very important first ministers' economic conference when, surely, all of those involved are seeking to
November 23, 1978

bring about the unity and co-operation in this country that we all seek. Is that the kind of approach of which he approves?


Pierre Elliott Trudeau: Mr. Speaker, the hon. lady may be making some rhetorical point, but when she accuses me of an evasive answer I would point out that I began my answer by saying that I did not know to which speech of the Minister of Finance she referred. I am prepared to put on record my own views. She holds up and shows me a copy of a newspaper.


Charles Joseph Clark: The enemy.


Pierre Elliott Trudeau: The Leader of the Opposition now describes that newspaper as the enemy.


Mr. Fraser:: That is how you described it.


Allan Frederick Lawrence: He is not that stupid.


Pierre Elliott Trudeau: Then you must be.


Charles Joseph Clark: Keep it going.


Pierre Elliott Trudeau: I will keep it up if the Leader of the Opposition would keep quiet and permit me to give my answer. He should show a little bit of the self-discipline he is asking of his colleagues. Mr. Speaker, I understand this is Mickey Mouse week, so I want him to take over.


Charles Joseph Clark: Mr. Speaker, I rise on a point of order in relation to the Prime Minister's offer that he wants me to take over. I am prepared to, as soon as he has the courage to call a national election.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: Chicken.


POINTS OF ORDER
Gerald William Baldwin: Mr. Speaker, I rise on what is either a question of privilege or a point of order, the information in respect to which I put before you only came to me about ten minutes ago. It affects a question which I asked the Prime Minister (Mr. Trudeau) yesterday and the reply he made. However, I put the matter before Your Honour for clarification and decision. Yesterday I asked the right hon. gentleman about some documents which had been requested of him by Mr. George Bain of the Toronto Star. The Prime Minister, with something less than his usual agility in jumping over the truth, said to me in response to my question the following. It appears at page 1368 of Hansard:
He referred to a promise I made to George Bain. That promise had to do with saying we had no objection if NATO had no objection. They were NATO documents which somebody had worked on. I still have no objection if NATO
Point of Order-Mr. Mac Kay
wants to produce them, and if Mr. Bain wants to address himself to NATO I see no objection to that.


An hon. Member:: He did.
The hon. member referred to was me. The Prime Minister went on to say:
Well, he did? Then complain to NATO. I don't know what NATO will say. They are not our documents, Mr. Speaker, they are NATO documents and it is NATO which asked certain individuals to work on them. I have no objection if NATO wants to respond to the advocate of Mr. Bain sitting on the opposition benches here.
I am really not the advocate of Mr. Bain. We really only share one thing, that of being on the Prime Minister's enemy list together.
Mr. Bain did in fact request the documents from NATO. Those particular documents were in respect of the case of Peter Treu. NATO responded to Mr. Bain and said to him, "This is a matter for your national government". Mr. Bain then made a request of the national government. He waited several months without any response. He then wrote an article. At about the time he wrote the article he received some documents from the government, by no means the documents he had requested.
This relates to the point that Your Honour has considered with respect to Standing Order 43. I had exhausted, and possibly gone beyond the limit of questions which I could ask under the provisions allowed. I received an answer from the Prime Minister which was 180 degrees different from what the facts were. 1 do not think the Prime Minister erred deliberately. He erred through ignorance, as he frequently does. Under those conditions the country is left with the impression that Mr. Bain had not done what he had been requested to do. In fact, he had done so and had received this kind of run around.
I make that statement to Your Honour today because the impression left by the Prime Minister's answer yesterday is completely inaccurate. I may well be in a position to raise this as a question of privilege later, but certainly I raise it as a point of order to see if the record should be set straight.
MR. MacKAY-REPLIES BY SOLICITOR GENERAL ON ACCESS TO DOCUMENTS


Elmer MacIntosh MacKay: Mr. Speaker, briefly I believe my point of order would fit in very conveniently under the one raised by my friend, the hon. member for Peace River (Mr. Baldwin). Yesterday and today the Solicitor General (Mr. Blais), in view of the seriousness of an affidavit filed under section 41(2) of the Federal Court Act in relation to a matter under the Official Secrets Act, said that he had gone through the files. This is what he said yesterday, that he had examined every file. I asked him today whether he had read the documents. I think you will agree, sir, there is a big difference between going through files containing documents and reading the documents. I wish the minister would be more specific and say to this House whether he read all the documents on which he signed this very significant affidavit.

November 23, 1978
Business of the House



ROUTINE PROCEEDINGS


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, I table, in both official languages, the Canadian Automotive Industry study put out by Commissioner Simon Reisman.


BUSINESS OF THE HOUSE
Mr. Baker (Grenville-Carleton):: Mr. Speaker, I wonder if it might be convenient for me to ask the parliamentary secretary to the government House leader about business that we will be dealing with after the budget. While the parliamentary secretary is on his feet could he, on behalf of his principal, designate December 1 as an opposition day, which is the next day in accordance with our discussion? I believe it is a day which will be taken by the Creditiste party.
There are one or two other matters that I might deal with as well. Last week I asked the government House leader if he could indicate when the Christmas adjournment will be taken. I understand my hon. friend may be able to make an announcement today on behalf of the government.
Finally, is there any intention of bringing back Bill C-5 from the Senate in the event there is any time lost as a result of what Senator Perrault has called the grossest miscalculation in terms of communication between the government House leader in this House and the Senate, which may have caused some delay? Is the government bringing in an amendment to that bill so that, if there is some lost time, the House can deal with that matter and no one will suffer as a result of the lost time, regardless of whose fault it may be?
As I indicated to him earlier we are prepared to give very swift passage to that bill if the government intends to proceed that way. I ask this question because that very matter was raised in a committee of the Senate, not addressed in the Senate, but raised in a committee of the Senate directly. If that could be done, the government would find us willing to co-operate.


Mr. Pinard:: Mr. Speaker, today and tomorrow we will terminate the debate on the budget. On Monday we will be dealing with the second reading of Bill C-2, following that Bill C-10, which is in committee of the whole, and after that Bill C-12. Concerning the next allotted day it will be Friday, December 1. As well, the last two allotted days will be Tuesday, December 5, and Thursday, December 7.
[Mr. MacKay.J

With regard to the Christmas break, it seems discussions have been held with the representatives of all parties and, that we shall do everything in our power to be able, as we hope, to adjourn on Thursday, December 21, until Monday, January 22, thus allowing hon. members to attend to their devotions, their families and their electors.
With regard to the question of the hon. member on Bill C-5, I shall convey his representations to the Deputy Prime Minister who, I am sure, will be in touch with him at the very first opportunity.


Walter David Baker: Mr. Speaker, there is one other matter which we have not discussed and that is the question of the commodity tax review. I had indicated at one time that we were ready to let that reference go to the appropriate committee without debate. Is it the intention of the government to take advantage of that very generous offer?


Yvon Pinard: Mr. Speaker, we are taking into consideration all suggestions, whether good or bad, and I am convinced that the leader of the House will advise the hon. member of his reaction without undue delay.


PRIVILEGE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, as you know, I gave you notice of a question of privilege which I had hoped to raise at the appropriate time today. I feel it will be in the interest of all concerned if I were allowed to consult some precedents with respect to my question, of which I think you are familiar, and also to consult some others, especially those respecting the public accounts committee. If it is in order, I would like to speak to this matter more fully tomorrow.


Mr. Speaker:: It is agreed the hon. member has reserved his position by way of his notice.
Statements by ministers.


NATIONAL DEFENCE
Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I am pleased to announce today that, based on conclusions of one of the most thorough evaluations of a defence procurement program ever carried out in this country, cabinet has now approved a set of directions regarding the next
November 23, 1978

stage of the process towards acquisition of a new fighter aircraft for the Canadian Forces.
In arriving at these conclusions I have been guided by, and the judgments reflect, the military advice which I have received from the Chief of the Defence Staff. The government, through the offices of the NFA program manager, has now informed four of the competing manufacturers that their aircraft are no longer in the competition. These are: Grumman with the F-14 Tomcat; McDonnell-Douglas with the F-15 Eagle; Panavia with the Tornado, and Northrop with the CF-18L Cobra.
The finalists will be the General Dynamics CF-16 and the McDonnell-Douglas/Northrop CF-18A, which are the Canadian versions of these aircraft. The government has also decided against further consideration of a mixed fleet of fighters. The governments of the Federal Republic of Germany, Great Britain, Italy and United States, which all have been following this selection process with keen interest, are also being informed of this development.
Direction has now been given to the interdepartmental program office to initiate discussions leading to the negotiation of draft contracts with the two prime manufacturers remaining in competition. In addition to the very important questions of aircraft capability, fleet size, delivery schedule, and optimum phasing of payments, emphasis will be placed on negotiating the best mix of industrial benefits for Canada. In these negotiations particular attention will be paid to arrangements that could contribute to the growth of research and development activity in Canada, as well as high technology industry which complements our geography and resources. Emphasis also will be given to ensuring that all regions of the country will have full opportunity to participate in this program.
I expect that it will be several months before I am in a position to present a comparative analysis of draft contracts to cabinet for final selection of a new fighter aircraft. I am sure that those of you who have followed the evolution of the program since its start, in March, 1977, have come to realize the magnitude of the task facing the government in this selection process. At the end of June, as you will recall, the government decided to allow additional time to permit manufacturers to refine their initial proposals. I am pleased to report that by the new deadline of August 1 all had responded with offers that contained substantial improvements over their earlier proposals.
Our numerical requirement of between 130 and 150 aircraft is critical to our capability to meet our domestic and European commitments. We are indeed disappointed that procurement of sufficient numbers of F-14s, F-15s or Tornados could not be accommodated within our set budget of $2.34 billion in August 1977 dollars.
Our evaluation also revealed that acquisition of a mixed fleet would bring little or no benefit in terms of fleet size and that operation of such a fleet would bring substantial liabili-
National Defence
ties, including double training and logistics support systems over the life span of the aircraft.
The two most severe constraints that we face, and will continue to face, are the number of aircraft required and the set amount of money to buy them. Our task, then, is to buy the best military aircraft available within those constraints, while seeking the best possible industrial benefits with a minimum of project risk.
In addition to cost and numbers, there are other considerations that serve to favour the two aircraft we have kept in the process. To begin with, there is the military and political assessment that we have made of the current-and to a certain extent, anticipated-strategic situation that we are facing.
We have come to the conclusion that an adequate number of the smaller aircraft equipped with radar guided air-to-air missiles and suitably deployed across Canada, could afford us the capability to exercise our sovereignty fully by intercepting, identifying, and if necessary, destroying aircraft that might be probing into Canadian airspace. Having this type of prudent capability, we believe, would deter probes and offer adequate protection against the possibility of a bomber attack on the North American continent.
Having eliminated the three most expensive systems from the competition, three remained-the CF-16, the CF-18A and the CF-18L-that met or came very close to meeting our numerical requirements within the budgetary envelope while being able to meet the most likely military challenges.
The CF-18L proposed by Northrop could meet these most likely challenges and probably be acquired in sufficient quantities. Potentially, it also provides a very attractive package of industrial benefits. However, we have assessed as very considerable the risk of committing Canada to buying a sophisticated aircraft that is not in service with any other country. At this time, I consider all the various types of risks which could be involved in the development and initial introduction into operational service of this aircraft are greater than we either need or are prepared to accept. Moreover, even in the best of circumstances, the delivery schedule of the CF-18L is likely to be markedly behind that required for the timely replacement of our CF-101 and CF-104 aircraft.
The CF-16 is a single-engine aircraft which has been selected by five of our NATO allies, including the United States. Should the CF-16 be acquired, Canada would of course have extensive commonality with NATO allies in Europe. While this aircraft does not have the degree of sophistication of the larger aircraft, it does have acceptable capability and is the only aircraft which at this point meets the numbers required.
The other fighter remaining in the competition, the CF-18A, offers us another set of possibilities. It may be more expensive than the CF-16 would be; therefore we can expect to acquire fewer, although I am optimistic that an adequate number to meet our roles can be acquired in negotiations. Purchase of this aircraft could allow for co-operative logistics arrangements with the United States.

November 23, 1978
National Defence
On the other hand, being a twin-engined, somewhat larger aircraft, the CF-18A offers some definite advantages of its own. These include a good potential for growth, or a capability to be fitted with new systems that may be necessary to cater to future demands made of a fighter aircraft. The CF-18A also currently has more advanced all-weather capabilities in the context of sovereignty protection and air defence.
We must recognize, however, that in both military and political terms, a major consideration for Canada is collective security in Europe. This is where the philosophy, or strategy, of deterrence, common to all members of the NATO alliance, is subject to its greatest challenge, in the light of qualitative and quantitative improvements to the forces of the Warsaw Pact countries.
It is important that our own contributions to collective security be quantitatively and qualitatively adequate for deterrence. Quantitatively, this means a number of aircraft at least equal to that we now commit to the Alliance in central Europe and to the northern flank. This total number of aircraft, plus some for training and attrition, makes up well over half of our total requirement. This is clearly a factor that influences the type of capability that we must seek in the fleet, the qualitative aspect of the contribution. We want that capability to be prudently adequate for the sovereignty and air defence roles in Canada and also to be effective in particular roles in central Europe and in northern Norway.
As you can appreciate, there are pros and cons to both types of aircraft. I can assure you that there were also some pros and cons to all aircraft that have now been eliminated. Our request for proposal provided a standard which enabled us to obtain truly comparable data for all contenders. No single aircraft could possibly have met all specifications given in the request for proposal. Nor was it the government's intention to acquire an aircraft whose capabilities far exceeded those required to carry out assessed roles adequately.
We are convinced that we have now made a very judicious decision in selecting these two aircraft for further consideration, taking into account the factors of military requirements, budgetary considerations, the minimum number of aircraft required, the risk element, and the potential industrial benefits.
We expect that a reduction to two contenders will have a very favourable impact on Canadian industry's ability to participate with prime manufacturers in the development of detailed industrial proposals.
To the prime manufacturers who have devoted considerable resources to this competition so far, and particularly to manufacturers' representatives who have displayed so much energy and sincere efforts in presenting their companies' proposals in the best possible light, we owe thanks for their exceptional co-operation.
Finally, Mr. Speaker, I am confident that in this next, critical phase of the fighter program, the interdepartmental team and all others who are in any way involved will continue

to work in an atmosphere of fair and keen competition, and that rapid progress will be made towards selection of a new fighter aircraft to meet Canada's needs to the end of the century.


Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, our party has for many years advocated that movement should be made by the government to re-equip our forces. Normally I would be very pleased at the announcement-the announcement of any progress brings with it a certain amount of gratification, I suppose. However, to say the least, the statement the minister has made today is very unusual. In the very short time available to me since I received the statement only a few minutes ago, I have made some notes. I would have preferred to have had more time, but if I cut my remarks fairly short now, perhaps I will be able to make it up by the number of questions I am allowed to put. I see at least ten outstanding questions which have not been dealt with in the minister's statement and which have a considerable bearing on the new fighter aircraft.
First, I would point out that the minister states they have been guided-I presume he is referring to the cabinet-and adds:
The judgments reflect the military advice which I have received from the Chief of the Defence Staff.
That is a rather peculiar admission when one understands that most of the consideration was done by a project team. I am already beginning to hear disturbing rumours that the project team's advice was largely ignored in the selection and that the cabinet called together another group of senior civil servants at the deputy minister level to rewrite the proposal which was given to the Chief of Defence Staff and to the minister in early September. That is one of the reasons for the unseemly delay we have undergone so far.
Elsewhere in his statement the minister said:
Emphasis will be given to ensuring that all regions of the country will have full opportunity to participate in this program.
That bears a striking resemblance to the long range patrol aircraft proposition which was put to us, under which all parts of the country were to have an opportunity to participate in the offset work and the industrial benefits. As I pointed out to the House the other day, British Columbia so far has managed to obtain one half of one per cent. To a province that has 10 per cent of the population and an industrial capacity to match, this hardly indicates that anyone out west has reason to dance in the streets over the work they are going to get out of any project this government offers. Their reputation is too well known at present.
Again, the minister said:
Our evaluation reveals that acquisition of a mixed fleet would bring little or no benefit and would bring substantial liabilities, including double training in logistic support systems over the life span of the aircraft.
This, of course, does not stop them from flying three different types of fighter at the present time. It never seems to stop Air Canada from buying different planes from different companies. In my opinion, the statement is merely included to
November 23, 1978

validate a bad decision rather than as containing any truth insofar as problems from having two or three different types of fighter plane are concerned. I have yet to hear the minister or anyone else in a senior position in defence complaining bitterly that we have F-104s in Europe and F-lOls in Canada.
On page four of his statement the minister says he came to the conclusion that an adequate number of smaller aircraft equipped with radar guided air to air missiles could afford us the capability to exercise our sovereignty fully. No mention was made of the range of the two fighter aircraft which the announcement tells us have been selected. I would have been more pleased if the minister had managed to discover the range of the F-16 and the F-18 as compared, say, to the F-15.
Later we find the minister saying that the F-16 has acceptable capability and is the only aircraft which to this point meets the numbers required. Then in another part of his statement he said that unfortunately the F-18L, I believe it was, could not quite make it in terms of the numbers they would be able to provide, and that the F-15 could not make it for the same reason within the limitations of $2.34 billion. Now if the F-16 is the only one, it means that its running mate, the F-18L, also cannot qualify under the same set of regulations that caused the minister to turn down the F-15, the F-14, and the larger and more expensive planes. Either they had a dividing line there or they did not. It is my understanding they could have provided about 117 F-15 planes within the $2.34 billion limit, and there is certainly no doubt in anyone's mind that the F-15 was far closer to being the favourite of the project team than the F-16 or the F-18 A.
The final choice, as the minister said, comes down to the F-18A and the F-16, and I must question whether the 18A is in there just as a straw man to be used by the government to get betters bids out of General Dynamics, because the F-18, let's face it Mr. Speaker, belongs on an aircraft carrier. It carries around some 2,500 pounds of surplus machinery which enables it to land and take off from carriers, and unless the minister intends to buy a carrier, or buy back a carrier, 1 see no reason why we would want to select the F-18A over, say, the F-18L. I realize there is a difference in the time at which they would be available and I hope to bring this out in my questioning. However, it seems to me a most peculiar choice of planes has been made by the minister, considering the preferences expressed by his project team. I hope I will be given the opportunity to carry out lengthy questioning later on today as to the reasons for the unusual choice.


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I, too, think it necessary to comment on the fact that on a matter involving well over $2 billion we received notice of this statement only a few minutes before it was delivered in the House. I must in all fairness add, though, that it does not embarrass me one little bit because the point of view we take makes the total exercise of choosing between different suppliers irrelevant.
We think that what the government should be doing is looking at the total strategic purpose which lies behind this proposition to acquire between 130 and 150 fighter planes. It
National Defence
is our view that this is a misapplication of roles, that it is going back to something which is totally obsolete, something which has nothing to do with the security of Canada or the stability of the world as a whole.
So far as I know, we have never had a clear statement of the strategic purpose of what is the largest purchase of military equipment ever made by Canada-the minister can correct me if I am wrong. We have never been told the nature of the threat which is to be met. We know that the fighter planes based in North America are intended to replace a number of Voodoos and other aircraft which were designed to meet the threat of a manned bomber attack. Indeed, the statement just made by the minister does contain a reference to the possible threat of the manned bomber. We do not believe in the reality of that threat.
We think that the role of a government or of anyone making decisions in this field, should be to look at the basic situation and then fit the equipment into the roles which are necessary. We say that a manned bomber threat is unthinkable at the present stage of history, the missile age. Aeroplanes involved in attacking Canada and the United States would have to travel two or three hours. Their coming presumably would be made well known to the American defence system, by the forms of detection which are in existence. We believe in the necessity of such detection, and if it is not adequate, let us improve it.
However, once we have adequate detection, the defence which exists both for Canada and the United States as far as North America is concerned, is the fact that the Americans have available defences in submarines and elsewhere to meet any first strike. Perhaps, fixed missile sites are no longer as secure as they used to be for the placing of the strategic weapons of the United States, but as far as submarines are concerned, the whole society of the U.S.S.R., could be blanked out.
With adequate mechanisms the targets of attack would not be there. It seems we have to assume an irrationality on the part of the leaders of the U.S.S.R. which, whatever else some of us may say or think about them, is totally inconsistent with the facts.
We say we should not be choosing between this and that. This proposition will cost $2.3 billion in 1977 dollars. We must add to that the extra cost of inflation and any other extra costs which may be involved by reason of our present exchange rate. I think somewhere around $3 billion would be a modest figure to expect. What could be done with $3 billion? Many things need to be done. I propose to speak in the budget debate on this very subject and to elaborate on the points I am making now.
I know that this is an occasion for brief statements, but we say to the government that it ought to look at this all over again. We need a clear strategic statement. From time to time the minister has made highly exuberant and optimistic assertions, but he confines himself to assertions like "It is necessary for the security of Canada." Let him show us why he says it is

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necessary. What threats have to be met, and how real are they? Is this just a fantasy against which we are supposed to defend ourselves? We think it is, and therefore to be picking one fighter plane against another is not necessary.
I want to say a word about offsets. I will have more to say on this subject when I participate in the budget debate. It is, of course, a good idea to have offsets, including our technology, but at the present time the aircraft industry is very buoyant, and what we need is improvement in the technology for the things we can sell commercially. We do not need to build up our capacity to supply sophisticated weaponry to the countries of the world. Perhaps they would buy it. The insanity which pervades this world is such that $400 billion per year is spent on armaments, which have no purpose but destruction, even at a time when human needs throughout the world cry out for attention, capital, and personnel.
All we can say regarding this statement is that it is not too late to look at the reality of this situation. The commitment has not been finalized. Let the government look at the reality of this situation and then tell us, if it is possible, where, why, and how it proposes to undertake this colossal expenditure. Why is it necessary for the security of Canada or the stability of the world? I wish the minister were coming before us and saying that we are moving into the field of so-called smart bombs, which are precision guided weapons which hold out a much greater hope to small countries. These are light weapons, armed with laser guides, which can hit targets. They are highly effective in stopping tanks and in shooting down fighter planes.
We know we have obligations. When I have a chance to speak in the budget debate I will set forth the important obligations Canada can meet in the military sphere. We must meet them. That naturally will cost money, and the job must be done well. There is no point in doing a thing half-heartedly, but for goodness sake let us not be led astray by this mirage of an attack, which no sane person would ever make upon North America in this missile age. Granted, conditions can change, but I am talking about conditions as they exist now.
The government should look at the whole thing again, and consider it from beginning to end. It is not just a matter of which is better and which is worse. I am sure that if the government considers the whole matter again it will arrive at a decision which will be far more beneficial to the people of Canada in this time of strain and so-called restraint and retrenchment. A re-examination of this matter would be far more important than any other contribution the government has made in the past few years.


Joseph Adrien Henri Lambert: Mr. Speaker, I wish to make very brief comments on the statement the Minister of National Defence (Mr. Danson) just delivered to the House. I want to thank the minister for making available to me a copy of his statement which I received only around three o'clock. I do not feel strongly about that because at 1.30 I received a phone call, probably from his office, telling me that I was

about to get a copy of his speech. But given the fact that the postal service is very poor, the minister is obviously not responsible for the delay. Hon. members who spoke about the minister's statement before me said the same thing.
But I do not have only bad things to say. I want to seize the first occasion I have to thank the minister from the bottom of my heart for having authorized the band of the Royal 22nd Regiment to come to Montmagny on Remembrance Day. On such a beautiful day the local residents were very happy to see a detachment of the armed forces and the air cadets and I can assure him that that is a good way to ensure harmony exists in our country. You should have seen the onlookers! For the first in the 12 years I have witnessed such ceremonies I saw people give rousing cheers. It is a sign of the times and I am very happy that the minister authorized such a visit to our city of Montmagny.
Mr. Speaker, at the time of the right hon. Prime Minister (Mr. Trudeau) visit to Bonn for the summit conference, I also remember seeing on TV our Prime Minister surrounded by aircraft manufacturers trying to convince him that their type of aircraft was the best. Canada was really the centre of attention. We could see that for those manufacturers this was a big occasion to make a deal. Some businessmen from different countries were also present.
The Minister of Defence has just announced that we need to buy between 130 and 150 fighter planes. I assume, or at least I hope that these will not be used in a new world war but that they will help those who really want to maintain peace in the world. Canada is prepared to do its share, but to do so, it must be well equipped. I had a few occasions to visit countries throughout the world where our armed forces do an examplary job, a tremendous job to preserve peace. Naturally, there is the odd trouble here and there, little conflicts that break out, but were it not for the NATO force in which Canada participates, unfortunately I think we would have faced major military confrontations. I believe it most deeply. However, I must say that I am not an aircraft specialist. I trust the experts in that field whose duty is to advise the minister. I hope their advice is in the best interest of Canada rather than in the best interest of those who want to make money at our expenses.
I fully understand that it is normal to make profits even in manufacturing aircraft, but we should also make sure that our money is not wasted. I am sure the minister is smart enough to detect those who might try to profit from the circumstances to take advantage of him and convince him that some type of aircraft is better than some other type, without he being sure that it is the truth. Thus, the minister tells us that he chose the CF-16 rather than the CF-18A. I hope he is not mistaken.
But I would like to ask something of the minister. We are being told that the contracts have not been signed, that the details are still under study. I would like to suggest-the minister made reference to that point in his statement-that we go further than that. All kinds of parts will be needed to
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build those planes, to put them together. Obviously those parts, like in the automobile industry, can be manufactured in Quebec city, in Trois-Rivieres, in Sherbrooke or even in Mont-magny where the unemployment rate reaches 30 per cent. These parts could then be sent to companies for assembly. It should then be seen that the Canadian industrial sector benefit from these contracts, that it be given the opportunity to manufacture some of these parts. This would enable us to create jobs in this country and to make a good deal with other countries.
Mr. Speaker, I understand that the minister has a rather sizable budget and that he must do his utmost to apply the principles of moderation while providing our armed forces with the equipment required. This is essential. So I would like the minister to inform us more regularly of what happens in his department as concerns not only the organization of the air force but also the equipment needs of our armed forces, our naval forces and our vessels.
Mr. Speaker, I take this opportunity to remind the minister that two or three times he announced shipbuilding projects to meet the needs of our armed forces for national defence. I would ask him whether it would be possible to accelerate this decision to help our shipyards keep up with the times, keep up with their more sophisticated competitors and give them the opportunity to provide jobs for the many unemployed Canadians. So, if we are to make a decision as it is required, we should make it when unemployment is at its highest level.
I think it is more important to spend money in a way which encourages the use of our manpower and our expertise rather than to pay those people to do nothing and make them loose the desire to work, because after a while you finally believe it is not necessary to work and you find it difficult to go back on the labour market.
Mr. Speaker, I have here a document I have just received, the Right to Information. Parliament, ministers and courts. Who said this? The government. Here again, I wish we were better informed. In parliament particularly we can understand when we are informed of the facts. And if we have suggestions to make, we are responsible enough, I think, to do it and instead of being prejudicial to the minister it would help him exercise his difficult responsibilities as Minister of National Defence.


Allan Bruce McKinnon: Mr. Speaker, I shall try to keep my questions as short as I can, and I hope that the answers will be equally brief because I have several questions that I wish to get through. Could the minister tell me does this choice mean that the doors are closed forever on the possibility of a two-plane purchase, that is, the F-16 or the F-18A, but not a combination of the two?


Barnett Jerome Danson: Mr. Speaker, that is correct. We have rejected the two aircraft fleet concept. It will be a single aircraft fleet, either one or the other.
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Allan Bruce McKinnon: Mr. Speaker, what did the selection team, that worked so assiduously from last February to this September, report, and what were their recommendations as to what plane or planes should be bought?


Barnett Jerome Danson: Mr. Speaker, the team did not say which one should be bought. They evaluated all the aircraft against specific criteria, and those were the ultimate criteria for each role. Some served some roles better than others, but in essence it was left to the judgment of the Chief of Defence Staff and his advisers, a judgment which I support and cabinet supports, on which planes would actually be chosen based on the strategic assessment, which the hon. member for Greenwood (Mr. Brewin) referred to, the military capability, the quantity of aircraft needed to fulfil our roles and, finally, industrial benefits.


Allan Bruce McKinnon: Could the minister tell the House if the story, which has received a certain amount of publicity, is true, that the F-16 rated fifth under the heading "military evaluation" and also rated fifth under "industrial benefits" among the six planes?


Barnett Jerome Danson: Mr. Speaker, I will not be able to give that immediate information, but it does not mean much because the difference between one and five or six was very close in many cases. They are all excellent aircraft. Some of them achieved the total range of roles better than others, but would not give us the numbers we could possibly work with and still fulfil our roles in any meaningful way.


Allan Bruce McKinnon: Mr. Speaker, would the minister table a resume of the industrial benefits promised by these two finalists on the short list, and table it so that it shows what industrial benefits are expected for the regions in Canada? I must say to the minister that the LRPA distribution of benefits has left a bad taste in the mouths of a lot of Canadians, and it does little to help us solve the alienation problem that we have in western Canada.


Barnett Jerome Danson: Mr. Speaker, I am not sure that it is in the best interest of the program to produce at this time the industrial benefits or their regional location. I would say that there is a very great effort being made to make certain that there is a greater distribution of regional benefits than under previous programs and that it is a much larger program than the LRPA program. I must express some disappointment because on that program even the contractor has had difficulty getting people to show interest, submit bids, or in some cases even the answering mail from some regions of the country. These are our individual firms who, of course, have to make those decisions. In this case, those who are bidding are aggressively seeking out contractors in different parts of the country, and I think it is very important to note that this is not concerned only with contracts for aircraft. There are other types of industries of high technology and research and development that might serve us well in other areas with this particular aircraft.

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I think the hon. member may be assured that the greatest effort will be made in this regard. As a matter of fact it is the specific direction of cabinet that the negotiating team seek out those areas that best complement our geography and our resources so that we have an opportunity to be competitive in areas where we are good and which suit us naturally, rather than those for which we have to pay a premium.
So far as making a list is concerned, I think the hon. member for Victoria might realize that that might be counter productive at this stage because we are in a very tough bidding competition between two firms which will be upgrading, significantly I would think their industrial benefit packages as the negotiations continue. I think, it would be inappropriate, certainly in terms of industrial or commercial secrecy, to indicate what one or the other is doing at this time. Perhaps I will consider that when a findl decision is made.


Allan Bruce McKinnon: Could the minister tell the House how many planes in each case is the short list of tenders offering? How many planes of each type are there?


Barnett Jerome Danson: Based on the best assessment, the CF-18A comes close enough to the 130 minimum that we required, with a reasonable expectation of exceeding that when we get to the final negotiations. The CF-16 is in adequate number in their proposal to meet our requirements. There will be refinements of these proposals as they go along; perhaps other things will be required in the aircraft and that will affect the total number. In either case we expect to have adequate numbers to fulfil at least our minimum requirements, and hopefully all or close to all of our maximum needs.


Allan Bruce McKinnon: Mr. Speaker, I am rather disappointed about the last answer; I would rather do without the adjectives and adverbs and find out how many planes are involved, which was the question I asked, whether the number be 137, 127 or 117. I understand that for the CF-15 they were able to bid 117 planes.
My final question for now is this. The Dassault Mirage 2000 was talked about before the competition was closed, but then the French company did not enter the final bid. My understanding is it was turned down because the Mirage 2000 was not yet in flight, but it would appear that the F-18L lasted until today. I am curious as to the difference between these two planes. It seems that the French company was cut off rather summarily back in January of last year, yet the F-18L, which the minister says will not be ready in time, which is one of the reasons he turned it down, was considered right up until now.


Barnett Jerome Danson: The Mirage 2000 team themselves withdrew, Mr. Speaker. It was not our assessment; they themselves said that they did not believe they would be ready in adequate time and they did not believe they could marshal a sufficiently attractive industrial benefit package, and on their own volition they withdrew from the competition, really before it started.


Francis Andrew Brewin: Mr. Speaker, I should like to ask the minister, first of all, to inform the House what is the present assignment of fighter planes as between North America and our European theatre. My understanding is that we have an air group of 45 planes in Europe, and the minister's statement seemed to lead toward the view that we are now going to equalize somehow or other our commitment, which would seem, if my figures are right, to mean a substantial increase in our commitment to NATO, one that is far beyond our commitment of ground forces there or anything relative to that, with a diminution in our commitment to North America. Perhaps he could say, in this new dispensation-I am sure they are not all allocated yet because they are not even built or ordered yet-what is the proposed distribution of the 130 to 150 planes as between the two different theatres, the North American and the European theatres?


Barnett Jerome Danson: Mr. Speaker, the number is precisely the same as now, namely, 36 assigned and, I believe, 18 in reserve, for the central front, and 24 aircraft for the north flank. That commitment will remain the same. At the present time there is a larger total fleet. There was a figure I ran across of 160 total front line, but with these new aircraft of all models there will be a much, much lower attribution because of the higher technology and safety features put into them. Because it is only one type of aircraft there will be a reduction in the number we need in our training and replacement systems. So there is a one for one replacement there.
I think that what might have led the hon. member to that conclusion is the ability to maintain our sovereignty role, which I would take from the hon. member's remarks today and at other times he still considers rather important. Protection without enforcement does not leave us with sovereignty; it just leaves us with information. We need something to enforce that sovereignty, and that role we will fulfil with the same number of aircraft, I believe 36 being assigned to that specific role.


Joseph Adrien Henri Lambert: Mr. Speaker, I have only one question to ask since the minister has just replied to many of the questions I was asking myself and since my colleagues have asked very specific questions. I would like to know the approximate cost of the CF-16 and CF-18A aircraft and whether that cost includes all the equipment needed to enable those planes to fulfil their role.


Barnett Jerome Danson: Well, Mr. Speaker, I have not broken this down in fly away cost per aircraft, though I am sure I can get that; but the $2.34 billion program covers equipment, manuals, spare parts and training systems, implemented with enough reserves in each case to provide adequately for our needs.


Joseph Adrien Henri Lambert: Since the minister has quoted the figure of $2.3 billion and since the figures we have been given for the number of planes vary from 130 to 150, there is

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quite a difference. Could we at least have an approximate figure? Will we go over $2.3 billion to purchase 130, 140 or 150 aircraft? This is where the unit price can make a difference. Could we know the approximate cost of these aircraft?


Barnett Jerome Danson: Mr. Speaker, we are attempting within that budget of $2.34 billion to acquire 150 aircraft. That will allow us to do our job, to fulfil our roles on a one to one basis for our training system, and give us sufficient back-up aircraft to account for natural attrition. As for the price, if one takes a very much ball park figure-I am sure that people who sell aircraft would not do it in this way-I always talk about a $10 million aircraft and a $20 million aircraft. If we look at it in terms of a $10 million aircraft for individual fly away cost, then that would be reasonable. One of the studies that I have read, and I have read many in connection with this program, indicated it would be about $1 'A billion for the aircraft program itself. The rest goes towards support for the particular items about which the hon. member is concerned. Those are not the precise figures, but I would be pleased to get them for him.


Mr. Munro (Esquimalt-Saanich):: Mr. Speaker, I have two questions, unless some of the replies lead to further ones. First, now that it has been determined there is to be one aircraft and that the two aircraft in the fleet concept has been abandoned, can the minister say if the configuration of the aircraft for the two different roles that the single aircraft will have to play- the sovereignty role on the one hand, and the close support role in Europe on the other-will allow for interchangeability of aircraft, or will there be one aircraft with two distinct configurations?


Barnett Jerome Danson: Mr. Speaker, I expect that they should be able to remain in one configuration for both roles. There may be a difference in the way they are armed, but they would be interchangeable in those roles. There would be room to have two different CF-18As or two different CF-16s. There may be some small adjustments in the roles, but not what one would consider different configurations.


Donald W. Munro: Mr. Speaker, my other question concerns the power plant. I understand that the power plant in the 16-if the designation of the F-16 is the same in Canadian terms as it is in United States terms-the power plant which is the F-100, I believe, of Pratt and Whitney, has run into some pretty scary problems. I wonder whether that has all been taken into account in the choice. I am not sure whether the 18A might not also have the same power plant, whether the minister is aware of these problems, and whether due allowance has been made for the work that is still to go into the F-100 engine, Pratt and Whitney, before it is ready to power even the American F-16.


Barnett Jerome Danson: Mr. Speaker, that same engine is used to power the CF-16, the F-16 and the F-15. There are some teething problems as there generally are with new engines. Our
National Defence
team has looked into this very carefully and compared notes with other nations. Five of our allies are using this aircraft. I have personally spoken to colleagues in NATO and they are satisfied that this is a normal part of the development of a new engine that is taking place, and they are all confident that these problems will be overcome. Fortunately, if something arose that made that an invalid conclusion, it would be one of the things that our own evaluation team would follow extremely closely to make absolutely certain that we are not risking aircraft or, more important, Canadian pilots.


Donald W. Munro: Mr. Speaker, the minister said that five of our NATO allies are using the aircraft. Did he mean using them, or that they are on order by five other nations?


Barnett Jerome Danson: They are on order by Norway, Denmark, the Netherlands, Belgium, and the United States.


Stuart Malcolm Leggatt: Mr. Speaker, I wonder if the minister could clarify an answer that he gave to the hon. member for Greenwood (Mr. Brewin) earlier about the distribution of the acquisition when it takes place. Perhaps the minister will correct me if I am wrong in my reading of the statement, which is that the new allocations will be divided approximately 50 per cent to our NATO commitment and 50 per cent to our North American zone. That would lead me to the conclusion that we are increasing our commitment to NATO very substantially in terms of the number of aircraft we now have committed. I understand we are in the area of approximately 45 and are going to increase that to about 75 aircraft for our NATO role. Would the minister comment on that? If my figures are in error, perhaps he wishes to correct them.


Barnett Jerome Danson: Mr. Speaker, I do not think the hon. member's figures are in error but I think incorrect conclusions have been drawn from them. There are the 36 committed to central front in Baden. I believe there are 18 attrition and reserve aircraft and that works out to 54-I think I am right-that are there in the reserve role. They would have fly-over crews to support those. It may not be necessary with these new modern aircraft to maintain those additional aircraft in Germany because they all have fly-over capability-an unrefuelled fly-over capability-to the central front.
In addition, 24 are presently assigned to the north flank role. That is a fly-over role as well, from Bagotville and Cold Lake. The others are all in the North American defence role.


Stuart Malcolm Leggatt: Mr. Speaker, I have concern to know how much study the minister and his officials have made in two areas of technology. The choice has been reduced to the two aircraft, the CF-16 and the CF-18A. My information is that in mock combat both of those aircraft have been very successful in eliminating each other in the air. In fact most new fighter aircraft have become so technologically advanced that they cancel each other when they get into combat. I would suspect the same would be true with Soviet aircraft, if we want to deal with the NATO question. Has the minister any Figures of the

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survival rate of these new proposed fighters in competition with themselves or other fighters? Will he table that? Perhaps he would respond to that, and I could have one more question.


Barnett Jerome Danson: First of all, Mr. Speaker, they may cancel each other out. That is why we are only buying one kind, so that each will survive. I guess the likely combat is with Warsaw Pact forces. They are all highly sophisticated, but the survival rate has certainly been studied. I have the information in front of me but it would take some time to find it as it is a rather complex equation. I would be pleased to go over it with the hon. member at any time, however. Those are judgments that have been made and tested, computerized, and in some cases, I believe, in mock trials.


Stuart Malcolm Leggatt: Mr. Speaker, I am sure the minister gets my point in that question, which is that air cover that simply destroys itself in competition with the enemy is not air cover at all. My last question deals with the studies the minister has done on new weaponry, that is, heat seeking laser beam weaponry, which is the new technology in terms of support for ground forces, rather than fighter aircraft. Has the minister an assessment by his officials or his project team which deal s with the capacity of the new weapons using ground forces to eliminate fighter aircraft? Can he advise why it is that Canada seems to get in at the tail end of technology rather than at the beginning?


Barnett Jerome Danson: Mr. Speaker, those studies have been addressed. They are in my briefings and have merited consideration. I think this is one of the fortunate things in this buy, that we are phased in with the technology at a pretty reasonable stage-not so far in advance that we are getting into a "Never-Never Land" but sufficiently mature that we can make a wise judgment and at an early stage of the technical life of these aircraft that we have selected. They are at an early stage in their life cycle. None of them is actually in service per se yet. They are in the prototype and early production stages, but they have been fairly evaluated by others. One has been purchased by a number of nations, the other by the United States in significant quantities and is being looked at very seriously by others. I think we are at a rather good stage in the technology to have a high performance aircraft through the life cycle of 15 or 20 years.


Allan Bruce McKinnon: Mr. Speaker, I only have four more questions and, I might be able to put two of them together. I would like to ask the minister for the date of signing. Two statements were made by him today, one that we are making rapid progress to that end, and the other that it would be several months. I wonder if he could put an approximate number before the word months. Secondly, when does he expect that we will get the first plane out of this contract?


Barnett Jerome Danson: Mr. Speaker, we are proceeding as rapidly as we can to the date of signing in several months. That is the best way to describe it. To prepare the documentation, which is considerable, to sit down with the contractors will take one month or close to it for completion-it is close to completion,

but until the decision was made it could not be completed. It will likely be after Christmas before the vendors, the two contenders, have an opportunity to assess this. That is if they give up some of their Christmas recess for it. Our team should be able to sit down with the first group immediately after the New Year. This would be done by the same team sequentially, rather than at the same time, because it is necessary that the same people do the assessment so that we get the same qualitative judgment.
As I said the other day, I hope this will be all done by late spring. It is pretty difficult to be more definite than that because we want to make sure the negotiations are as exhaustive, as tough, and extensive as possible, and that we get the best buy and the best benefit from it.
Realistically one could only hope to look at April as a possible date of final completion. May or early June are real possibilities. I would not want to rush those and not get as good a deal, although I am anxious to see this purchase completed. I would rather have the best deal we can get by April. I would not want to put that additional pressure on the team to report when they are not satisfied they are ready. We will all be watching this closely. In so far as the first delivery is concerned, I believe the first delivery would be early in 1982. Depending on the number of aircraft we finally achieve, the rate is about two a month because of our cash flow requirements and abilities. This could take us to 1986 or 1987 before the final attrition aircraft are delivered.


Allan Bruce McKinnon: Mr. Speaker, I would like to point out that the minister on April 25, 1978, said that the government expected the first plane in 1981. Apparently there has been a slippage of one year, which is a considerable amount of slippage. Would the minister tell us if he is aware of any unrest or discontent in Air Command over the selection of these two planes? I have heard there is considerable discontent in Ottawa and several senior air force officers are most unhappy about the selection of the F-16 and F-18A.


Barnett Jerome Danson: Mr. Speaker, I would be a little surprised if there was no criticism. I do not question the fact that airmen have favourites. I have spoken to many pilots throughout the system since I have been in this job and involved with new fighter aircraft. One does hear varying views. I know there are some concerns, some of which have been talked out and worked over by the Chief of Defence Staff, his senior people and everybody involved. There is full support of those people who have major responsibility. I believe what the hon. member is referring to, and I am sure it will be reflected in comment, is that the F-15 is a pretty hot aircraft. We know it is an excellent aircraft but so is the Tornado and the Tomcat.
I think in the main everybody realizes the need to have a sufficient number of aircraft in the total system and the capability which is realistic in terms of our assessment of the threat. More important and which must be taken into consideration here, is the question of the lifecycle cost. This is the
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cost to keep those planes flying through their training system and exercises during their lifecycle. I have been apprised of the reservations each of the senior officers have had. The Chief of Defence Staff has kept me fully informed in this regard.


Allan Bruce McKinnon: Mr. Speaker, in view of the fact the F-16 is something less than the world's greatest ground support plane, has the minister given consideration to a change of the role of our air arm in Germany?


Barnett Jerome Danson: No, I do not think that will be necessary, Mr. Speaker. SACUER might decide. This will be discussed because of the new aircraft and the different set of capabilities, or a better capability really for the present role. These planes have considerable flexibility and may be used in a different role. That is not in the cards, and it is not necessary in the present considerations. However, that will develop perhaps as the strategic situation changes.


Mr. Rae:: Mr. Speaker, is it the minister's intention to bring down a white paper on defence in this session?


Barnett Jerome Danson: Mr. Speaker, it is not my intention to bring one down on defence in this session. I would welcome the opportunity to discuss the defence policy concerns at much greater length which the hon. member for Greenwood (Mr. Brewin), the hon. member for Victoria (Mr. McKinnon) and the hon. member for Bellechasse (Mr. Lambert) have. The reason for not bringing down a white paper is not that I would not like to because there is work going on, but that it is not possible in this session due to the tremendous strain on resources in our department, particularly in the policy areas that have to be attributed to such a task.
It is not possible to do it in a short period of time and I would not want to see less than a first rate job done. I am sure the quality of people that we have would not want to attach themselves to anything they did not consider first rate. It is a matter of timing. In the circumstances, I think the hon. member for Broadview (Mr. Rae) will agree that while thinking is taking place and input is going into what will ultimately be produced as a white paper, I just cannot put a date on it. It is keeping the ball bearings in everybody's two and one-half pound computer going.


Bob Rae: Mr. Speaker, I am sympathetic to the minister and his department's problem with ball bearings. I am concerned that if we are locking ourselves into a technology which will not become fully available until 1987, and which presumably will be in use until the year 2000-or who knows-it might be worth taking a little time. The minister said that he did not want to enter into something without a good deal. I put it to the minister and ask him to comment on it that if we are locking ourselves into a military strategy which will last, if the minister's plans take place, for at least 20 if not 25 years, would it not be a good idea to produce a white paper at the same time and allow members on all sides of the House, and the press at large, to discuss these matters before locking ourselves into these major decisions?
Order Paper Questions


Barnett Jerome Danson: Mr. Speaker, it is certainly consistent with the priorities of the government, the assessment of military advisers in Canada and their joint considerations with NATO and NORAD. What we will buy is a capability with sufficient flexibility in growth that one can reasonably expect. This is always a difficulty with any major purpose. One would never buy anything if one would always wait for the next generation. That difficulty crops up every time something is put into production and it is taken from the drawing boards. Some engineers spend their lives keeping things on drawing boards which never get produced. They usually do not work for the same company for very long, but this happens. Sometimes you have to freeze drawings to get into production and get going. I think we are at the right end of the cycle with two flexible aircraft that could allow for any foreseeable change in role or strategy.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Yvon Pinard: Mr. Speaker, the following questions will be answered today: Nos. 187 and 522.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


EXTERNAL AFFAIRS-OFFICIAL HOSPITALITY
Mr. Howie: Since April 1, 1977, what amount was spent on entertainment by the Department of External Affairs?
Mr. Louis Duclos (Parliamentary Secretary to Secretary of
State for External Affairs):
April 1, 1977 to March 31, 1978	$2,086,731*
April 1, 1978 to September 30, 1978	$ 616,036*
* This includes hospitality costs incurred by posts and officers abroad.


MR. ROBERT DOUGLAS
Mr. Epp: 1.	What is the annual salary of Mr. Robert Douglas, Executive Director for the Centre for the Study of Inflation and Productivity?
2.	What is the life span for the Centre?
3.	What is the total number of employees in the Centre and how many earn over $30,000 annually?


Yvon Pinard: 1. $45,400-$61,200.
2.	Until June, 1980.
3.	(a) Fifty-six employees as of November 10, 1978; (b) Fourteen employees earn over $30,000 annually.

November 23, 1978
Royal Assent


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


Some hon. Members:: Agreed.


MESSAGE FROM THE SENATE
Mr. Deputy 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 S-4, an act respecting Canadian non-profit corporations, to which the concurrence of this House is desired.
[ Translation]
I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill C-7, an act to provide supplementary borrowing authority for the fiscal year 1978-79 and to amend the Financial Administration Act, without amendment.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the House that I have received the following communication:
Ottawa, November 23, 1978 Sir:
I have the honour to inform you that the Honourable Robert G. B. Dickson, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 23rd day of November, at 5.45 p.m., for the purpose of giving Royal Assent to a Bill.
I have the honour to be, Sir,
Your obedient servant, Edmond Joly de Lotbinidre, Administrative Secretary to the Governor General.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, November 22, consideration of the motion of Mr. Chretien that this House approves in general the budgetary policy of the government.
Mr. Art Lee (Vancouver East):: Mr. Speaker, it is a pleasure and honour to participate in this budget debate. For the past week we have heard a lot of blather by the official opposition, the hon. member for York-Simcoe (Mr. Stevens) and the Leader of the Opposition (Mr. Clark), about Petro-Canada's purchase of Pacific Pete.
I submit that the hon. member for York-Simcoe and the Leader of the Opposition have misrepresented the facts on this matter. It is not only my opinion, but the opinion of the editorial board of the Toronto Sun. I wish to quote from its editorial dated November 22. As I indicated, I will quote directly from it. It is entitled "Clark Misleads on Petro-Canada", and I quote:
Conservative Leader Joe Clark is both naive and misleading in his obsessive attacks on Canada's national oil company, Petro-Canada. The company was set up in 1975 to give Canadians a stake in their own oil and gas industry, which is largely controlled by the big international oil companies.
Clark is naive when he says that Ottawa has all kinds of leverage which it could use to regulate the oil industry rather than acquiring its own national oil company.
Interestingly, Clark has never spelled out what kind of regulations he would apply to control the oil industry, perhaps because he's also promising to deregulate much of the Canadian economy and to cut the size of the civil service.
But to properly regulate something as complicated as the oil industry would require volumes of regulations and an army of civil servants, who would have to keep their eyes on every operation from the service station to exploration.
The country couldn't afford such an army. Even if it could, it would be difficult to ascertain the true situation. Canadians have only to recall how, based on industry-supplied forecasts and statistics, the National Energy Board thought there was a natural gas surplus when there was a shortage and how there was a shortage which turned out to be a surplus.
The last thing the international oil companies want is for the public to get an insider's view, which explains why the major oil companies in Canada have conducted such a strong campaign against Petro-Canada.
If Clark is naive in thinking he can control the oil industry through regulation, he is downright misleading when he suggests the $1.4 billion spent by Petro-Canada to acquire control of Pacific Petroleums Ltd. is an added burden on the taxpayer or that it represents reckless new spending by Ottawa.
Taxpayers' money is not being used by Petro-Canada to buy Pacific Petroleums. Instead, Canada's national oil company has borrowed the money from the Canadian banks and will be able to pay all the interest and principal from the future profits of Pacific Petroleums-and still have money left over for exploration and development. This is the same way takeovers are financed in the private sector.
The government's role is that of ultimate guarantor of the loan, but that doesn't cost it any money unless Pacific Petroleums, a highly profitable and oil-and-gas-rich company, should go bankrupt.
Clark is also wrong when he says, as he did this week in Parliament, that the money used to acquire Pacific Petroleums could have been used instead to help senior citizens or make it easier for Canadians to buy new homes.

November 23, 1978

There's a big difference between taking these worthwhile steps and giving Petro-Canada the green light to take over Pacific Petroleums. Taxpayers' money would have to be used to help the senior citizens and new homebuyers whereas there is no taxpayers' money used in the Petro-Canada acquisition.
In view of this editorial I submit that the hon. member for York-Simcoe and, particularly, the Leader of the Opposition, should withdraw the comments they have made which, not only in my opinion but in the opinion of the Toronto Sun editorial board, fail to reflect accurately the Petro-Can-Pacific Pete transaction.
The hon. Minister of Finance (Mr. Chretien), clearly and succinctly, put before the Canadian people the economic direction in which this country is to move within the ensuing year. It was a budget based not on political gimmickery but on sound principles of financial management; I submit a responsible budget. Generally, with the exception of the proponents of further deficit financing, the reaction has been favourable.
The reduction in the federal sales tax will help the consumer by slowing the rate of inflation. Other measures will help industry and induce them to invest. This creates permanent jobs in the long run. For example, Mr. Harvey Parliament, president of the Mining Association of British Columbia, is reported in the Express, November 20, 1978, as follows:
The next tax incentives improve the climate in the industry a lot. If there are mining properties that were thinking of going into production, but were teetering on the brink of making a decision, this may make them decide to go ahead.
As hon. members know, the proposal allows mining companies to write off 100 per cent of mining development costs, instead of the 30 per cent allowed up to now. Mining men and those in forestry are pleased with the budget's decision to allow a $100 deduction for every $300 spent on construction of townsites and the social assets that are involved. Similar favourable reaction has been received from these B.C. industries respecting the federal government's decision to maintain the write-offs for pollution equipment. The increase in the tax credit for new plant and equipment for expansion was also welcomed by industry in British Columbia.
Favourable reaction to this was given by the Employers' Council of British Columbia. They issued a press release on November 16, 1978, written by William Hamilton, President of the Employers' Council of British Columbia. I quote from their brief:
Given the constraints he faced, Chretien has produced a better budget than most business people expected. He had distributed a variety of tax changes between the personal sector and the business sector which will stimulate the economy. The western provinces will enjoy some particular benefits: He has re-emphasized the importance of our resource industries, especially mining, forestry, and petroleum, as a very basic source of Canadian economic growth.
We agree completely with the great emphasis Chretien placed on the responsibility of the private sector and individuals to pass on the benefits of this budget and to exercise personal restraint. In this way all Canadians will benefit from the measures announced which should provide a framework for further improving Canada's competitive position internationally.
We have some reservations about Mr. Chretien's forecast of inflation and economic growth which seems to us somewhat optimistic. However, we are encouraged by what seems to be the government's determination to exercise restraint and begin to build strength in the Canadian economy for the 1980s.
Unquestionably the budget was not expansionary. I submit to add to an already large deficit would have exacerbated our
The Budget-Mr. Lee
present economic situation. Canada is living in a tough, competitive world. Our unemployment rate is too high, especially among young Canadians. Prices are coming down, but not as fast as we would like. The Canadian dollar has declined in value.
Underlying these real economic challenges is the issue of national unity. We see a provincial government aiming to break up this country, to remove one province, a part of Canada, from this land of ours.
All hon. members have seen the deliberate, staged performances of Rene Levesque at first minister's conferences. We have heard all his blather about the federal government not helping the province of Quebec, that the federal government was not spending any money in Quebec. I could not believe it. Here was the premier of the province of Quebec saying his government does not receive any financial help from the federal government. The Minister of State for Urban Affairs (Mr. Ouellet) corrected this fabrication. We are not only helping Quebec, but in many instances Quebec isn't even availing herself of the help we are offering.
Then we hear the cynics say the whole national unity issue is a government plot, a conspiracy to hold on to power. Well, I am not going to apologize for wanting to fight back when I see somebody, whether a pequiste or a western separatist, setting out deliberately or overtly to destroy my country. Neither does the Prime Minister (Mr. Trudeau) have to apologize for being determined to keep Canada strong and united.
There are cynics who say national unity is a government smokescreen to distract people from the economy. That's nonsense. I have talked to business people from the United States. They are not prepared to invest in a Canada that might fall apart. Of greater concern is the movement of Canadian business and industry from Quebec-I think, for example, of the Sun Life Corporation. It doesn't take a financial wizard to know that the unity crisis affects investment.
People in Vancouver East are concerned about national unity, but I know the issue can be pretty remote when one is unemployed and the cost of living isn't coming down fast enough. I know the people of Vancouver East are more concerned with the bread and butter issues, jobs and inflation. Even so, I don't have to remind you, Mr. Speaker, that unless we remain a strong country we won't have to worry about the economic challenges facing Canada.
Let's talk about the economy. Back in 1975 I spoke at the convention of my party and outlined Canada's economic problems as I saw them then. I should like to restate a few of the points I made because I think they are still applicable today. I began by talking about inflation, about what it was doing to Canada and to Canadians, about the way in which it disrupted financial planning by business and government, how it priced our goods out of world markets and created more unemployment. I talked about the way in which inflation undermines the position of those least able to protect themselves-pensioners and others living on fixed incomes. I said that the uncer-

November 23, 1978
The Budget-Mr. Lee
tainty caused by inflation provoked frustration, social unrest, and a distrust of private and public institutions. I said that it threatened the validity of collective bargaining and that it set labour up as a scapegoat for all our economic ills. I said that people were looking to the federal government for leadership and that, in my opinion, the federal government has fallen short of handling the economy as well as it could have done.
I called for a system of flexible wage and price controls. One month later, the federal government introduced them. Mr. Speaker, the anti-inflation program has worked. Controls were a success. When controls are phased out starting April 14 we shall all have to exercise the self-restraint which both labour and management have been telling government it would have to demonstrate once the controls are lifted. I, personally, do not anticipate any "bubble" of high wage demands and unwarranted price increases and, from what I have seen, this has not occurred. For one thing, Canadians are more aware than they were two and a half years ago of the impact which wage and price levels can have on our competitive position. There is a greater appreciation on the part of both labour and management that jobs and profits can be lost if our wages and prices get out of line with those of our competitors. We are more aware of the importance of economies of scale, entrepreneurial skills, and access to markets, as factors in our competitive situation.
I believe most Canadians feel that, despite its rough justice, the wage and price control program was about as fair as any such program could be. Workers, for example, are aware that while the guidelines may have restrained their wage demands, they also restrained prices. On balance, workers came out a little ahead of the game, which is better than one can say for their inflation experience in the two years before the controls program. The statistics support these calculations. Over the two-year period 1976-1977, wage increases under collective agreements monitored by the AIB amounted to roughly 18 per cent while the consumer price index increased by 15.9 per cent. This represents on average a gain in real wages of better than 2 per cent.
Another measure of the wage-price relationship is our experience with shares gross national product. The share of the GNP accorded to wages increased from 51.8 per cent in 1961 to 56.6 per cent in 1976, an increase of 5.1 percentage points. The wage share continued to rise, and in 1977 it was 57.2 per cent. It is wrong, therefore, to maintain as some still do, that the anti-inflation program was anti-labour. It is true that the guidelines placed restrictions around collective bargaining, but price increases have been restrained relatively more. The share of national income going to corporate profits has been fairly constant at 10.7 per cent to 11 per cent over the last decade, including the period under controls.
What has the government done about the bureaucracy? For two years there has been almost zero growth in the federal public service. The first ministers' conference agreed that compensation, wages and pensions to civil servants should follow those in the private sector. The first ministers also agreed to submit the growth of bureaucracy and regulations to

the Economic Council for study. A good start, but much more can be done. While there are many highly competent and highly dedicated people in the civil service, some civil servants are bilking the taxpayer by not giving a fair day's work for their pay. When I served on the sub-committee studying the penitentiary system I definitely saw this and I believe I could find the same thing in every federal department.
The federal government has lately regionalized many operations. Unfortunately, regionalism has come to mean little more than duplication of head office positions in the field without due concern for line and staff functions. I am gratified to see the government taking this aspect of the sub-committee's report on penitentiaries very seriously. What is required is not regionalism for the sake of regionalism, but real decentralization. Let me illustrate them with an example.
Some guards from the Kingston maximum security penitentiary went to the Ottawa airport to pick up prisoners. Because the plane was late, the guards went and got drunk. Fortunately, the RCMP officers accompanying the prisoners refused to turn the prisoners over to them. What was done about these guards? Their director wanted to fire them. The regional director wanted to fire them. Were they fired? No. Treasury Board officials advised they could only be suspended for a few days because of red tape. That is intolerable, Mr. Speaker.
We need to put the work ethic back into the public service. Managers should be able to hire, fire and transfer personnel more easily, and be able to offer cash incentives for good work. This is what we recommended for the penitentiary service, and I am sure the same is applicable to other departments. Managers, just as strongly as the public, want to get rid of the red tape that ties them up until they cannot function.
Now I should like to outline some of the things the government is doing to ease unemployment. First of all, why are so many people out of work? Is there something basically wrong with the system? The fact is the system is working pretty well considering that Canada is in the midst of an international economic recession. Last year the economy created more than
250,000	new jobs. In fact we had led the world in job creation and economic growth for years. Right now, though, two factors are coming together during a world-wide economic slowdown. We are still trying to absorb the last wave of the post-war baby boom into the labour force. At the same time, increasing numbers of women are leaving the home and entering the job market after being out of the work force for a few years. The result is a bulb in the labour force, and the job creating ability of the economy cannot keep up because our export and production performance is slowed down by world conditions.
Once the world recovers sufficiently from the present recession, the Canadian economy will pick up, and we will be able to bring unemployment down to normal levels. In the meantime the federal government is providing a gradual stimulus to production and investment, creating jobs directly and provid-
November 23, 1978

ing training and experience to young people so that they will be employable workers when the economy has recovered.
Let us look at the record. First, there have been income tax reductions amounting to $2 billion so that we can stimulate consumer demand.
Second, there has been a $900 million cut in corporate taxes to encourage private enterprise to invest and create jobs.
Third, more than $1 billion has been spent on direct job-creation programs. Since 1974 Vancouver East has received $6,751,499 under the Local Initiatives Program, the Canada Works Program and the Young Canada Works Program, and 1,278 jobs have been created.
Fourth, the experimental $100 million employment tax credit program will encourage the private sector to create more permanent jobs.
Fifth, the Alcan pipeline legislation will create 100,000 man-years of employment. For British Columbia a total of 1,800 man-years will be required from 1981 to 1982 to construct the pipeline. At peak periods the work force will reach 1,750 people.
Sixth, the $150 million salmon enhancement program for British Columbia will help ensure adequate stocks of this natural resource and double the existing $200 million wholesale value catch.
Seventh, the 200-mile economic zone for coastal provinces will be a distinct advantage to the British Columbia fishing industry. Presently I am working with the port of Vancouver to establish better facilities for fish processors.
Eighth, a government subsidized loan of $1.5 million has been made to establish a proper drydock facility in the port of Vancouver.
Ninth, of a $117 million expenditure for West Coast ports $40 million was spent on the new Vanterm container facility and $26 million on Lynterm, the sister facility of Vanterm, which is designed for bulk loading.
Tenth, there has been a commitment by the federal government to build a new federal building in Vancouver. Unquestionably, that will pick up the slack in the construction trade, which is suffering 30 per cent to 40 per cent unemployment. It will create 250,000 man-days of work.
Eleventh, a $50 million tourist agreement has just been signed with the British Columbia government.
Twelfth, there is a $186 million agreement for agricultural and industrial incentives under the Department of Regional Economic Expansion.
I would like to say a few words about western alienation. There is a myth that somehow we in the west are bankrolling the rest of the country. Lately this myth has attached itself to the equalization policy, under which all taxpayers in Canada share equally in the services for which their taxes pay. One sometimes gets the impression that the people who believe this myth think that bags of money are being loaded on to planes in Vancouver, Calgary and Edmonton so that they can be dropped from the skies on to Quebec and the maritime prov-
The Budget-Mr. Lee
inces. The fact is that Canada is one country, and we all contribute to the well-being of all Canadians. Quebeckers and maritimers pay taxes just as Albertans and British Columbians do, and the federal income tax rate is the same wherever we live.
I suspect that there is a certain amount of prejudice behind the myth that the west is paying for the east. The complaint is always about how much Quebec receives in equalization payments. We never hear people complaining about how much the federal government gives in equalization payments to Saskatchewan and Manitoba, or even Newfoundland. The other half of the myth is the false assertion that the federal government has not done anything good for the west. This old chestnut is still being kicked around, despite the fact that we need only pick up a newspaper to see how the west has benefited from confederation.
Let us look at some of the things which have been done by the federal government in the west. The government has recognized that the economic base of western Canada must be widened. That is why massive amounts of federal money and effort have gone into saving the Syncrude development of the Alberta tar sands.
The federal government has recognized that Canada's old trade patterns, based on trans-Atlantic trading, are outdated. That is why Ottawa has been pulling out all the stops to boost trade with Japan and other Pacific Rim countries which will buy our products. I note that the Minister of Industry, Trade and Commerce (Mr. Horner) is in the House. He just returned from a trip to Pacific Rim countries with that very object in mind.
Ottawa has recognized that the decision-making, employment, and purchasing powers of the federal government should apply outside central Canada. That is why the mint was moved to Winnipeg. That is why a taxation data center is being opened in Surrey, British Columbia, to handle all tax returns from British Columbia and Yukon. That is why the Department of Regional Economic Expansion has been decentralized all over this country.
Let us consider the massive federal assistance which will be needed to make development of the northeast coal deposits in British Columbia a major shot in the arm to the provincial economy. A $10 million study into environmental, social, engineering and transportation aspects of coal development has been initiated as a result of a federal-provincial agreement. Let us consider the millions of dollars in federal subsidies which will support coastal transportation communities on the north coast.
The main contribution to British Columbia which the federal government makes is in the area of federal-provincial transfer payments. From 1975 to 1978 the federal government gave British Columbia more than $3 billion in federal transfer payments. That Figure includes direct federal payments to individuals through family allowances, old age pensions and veterans' benefits. Apart from that $3 billion blockbuster, the federal government pours hundreds of millions into the British

November 23, 1978
Adjournment Motion
Columbia economy every year to keep normal government operations going.
The people who work in local Manpower offices, the Federal Business Development Bank, the Post Office, immigration offices and so forth, are British Columbians whose salaries are being paid out of the taxes which all Canadians pay to the federal Department of National Revenue.
In 1975 and 1976 the Post Office spent more than $95 million in British Columbia. Transport Canada spent more than $44 million, and the Department of Industry, Trade and Commerce spent $10 million. The Department of Supply and Services, which purchases all the equipment and goods which the federal government uses in its operations-from paper clips to trucks-spent more than $146 million. Just think how many suppliers of government contracts keep their businesses alive because they have the federal government as one of their customers. Just think how much that means to the economy of British Columbia.
Unfortunately the total amount of federal spending in my province is unknown. No one has ever worked that figure out because our nationhood is not based on a balance sheet.
Before I finish, there is one other topic I wish to spend a few moments discussing, and again I draw attention to the fact that the Minister of Industry, Trade and Commerce is in the House. In the throne speech debate back in 1976 I spoke about the desire of western Canada for freer trade. With the government's decision to impose quotas on shoes and textiles I submit that the government is moving away from its commitment to freer trade. Protectionism costs Canadians from coast to coast money. We are all consumers, whether we live west of the Rockies or east of the Ottawa River. If we do away with import duties, we will all be better off from an economic point of view.


Some hon. Members:: Hear, hear!



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Halton (Mr. Philbrook)- Health and Welfare-Request government reconsider cut in family planning grants program; the hon. member for Ottawa-Carleton (Mrs. Pigott)-Urban Affairs-CMHC divesting itself of low-income properties; the hon. member for Brant (Mr. Blackburn)-Urban Affairs-Alleged failure of department to promote home insulation program.



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.
Mr. Heward Grafftey (Brome-Missisquoi):: It is amusing, Mr. Speaker, to witness this government in its last gasping death throws. The backbenchers are handing out statistics to show Canadians, who know otherwise, that things are very good economically. It reminds me of Louis XIV who was about to disappear when the minions were handing him his towel as he jumped out of the shower. Such was the speech the hon. member just made. In fact he made quite a good speech but I think it was more or less prepared for the hustings in the election which the Prime Minister (Mr. Trudeau) did not have the guts to call. I think that my analogy of Louis XIV is accurate in terms of the statistics the hon. member was quoting.
There was a headline in the press today that the present Auditor General does not like horror stories. Although he may not like them, and although we on this side of the House have only had a few hours to study his report, already the horror stories are coming out. There are plenty of them in this Auditor General's report, as in the reports of other auditor generals that have been produced since this government has taken power.
We on this side of the House have only had a little time to study the general meaning of the report, but there is one comment in the report which I would like to refer to all hon. members. It says that there are no criteria in place guiding the decision-making powers on over $10 billion for capital projects in place for 1977-78, and that competitive bidding practices are not in place over a high percentage of this. This confirms my view that this government is the most patronage ridden government this country has had since Confederation. I have said this all along, and I have been accused of being too partisan, but now the Auditor General is saying it.
The Auditor General also says that we are now moving into an era of comprehensive audit, with emphasis on special procedures in cost effectiveness, designed to change the attitudes of those managing the systems because as it appears now the quality of management leaves much to be desired. There is no myth about who is responsible for this; it is the government. The only thing wrong with this country is the mismanagement of the present government. A little kid in my riding last week told me that this government is going to go out like a bullet in the next election.
The Auditor General also said that in his opinion there was widespread lack of due regard for economy and efficiency in the operation of the government, and that inadequate attention
November 23, 1978

is being given to programs costing millions of dollars and whether they are accomplishing what parliament intended. This report, together with reports of previous auditors general, and the views of millions of Canadians confirm that this government is the most wasteful government since confederation and is mismanaging our economy as no other government has mismanaged it since confederation.
In looking through chapter three of the Auditor General's report with regard to airports, the Auditor General virtually suggested that he was going to withhold what is referred to in the private sector, as the normal time of auditing certification. In other words, he almost wanted to disown himself from the disaster. What is implicit in his comments is that he is withholding normal auditing practice certifications. It is the first time that this sort of thing has happened in any Auditor General's report in my time here in the House of Commons.
If this government took as serious the reports of the auditors general over the last number of years-and I know that my hon. friends to the left will support me on this-we could have saved millions and billions of dollars and channeled them into vital social and welfare programs.
[ Translation]
Mr. Speaker, we are of course in agreement with some proposals in last week's budget including, as the hon. member for Ottawa-Centre (Mr. de Cotret) would have clearly indicated yesterday afternoon, the reduction from 12 per cent to 9 per cent in the federal sales tax as it affects a number of manufactured goods.
However I would have to put a number of questions at this point to the Minister of Finance (Mr. Chretien). These questions are clear and simple. I would like to ask this to the minister: What proposals does your budget include to help low income people, the poor? What proposals does your budget include to help small businessmen, solve unemployment, stimulate the economy, or eliminate economic stagnation? And here is another question of significance to the Auditor General: To control budget deficits, to control inflation, what proposals are there? This is another question I am putting to the Minister of Finance.
Mr. Speaker, the answers are quite obvious. This budget means no real growth for the economy, and an analysis of the proposals put forward by the minister clearly shows that unfortunately we will have more unemployment in the future, no improvements in the inflation rate and a larger budget deficit.
In his speech, the minister discussed the outlook for the future. Frankly, Mr. Speaker, I did not listen very closely because the minister's forecasts have always been proved wrong. The public and the House both lost confidence in the minister forecasts. And I repeat, the Canadian people have lost all confidence in the government.
Mir. Breau: No, they did not!
The Budget-Mr. Grafftey


William Heward Grafftey: Like many Canadians I said to myself a number of months ago, "Why did Mr. Goldfarb"-I mean the right hon. Prime Minister-"not call an election?" I do not think that I am known on Parliament Hill as being a hidebound traditionalist, but there is one tradition that has been here a long time, and that is that we are supposed to have an election every four years in this country. Since he did not call the election Canadians assumed that the Prime Minister must have something, apart from civil war in Quebec, very big in mind. He gave no explanation of why he was not calling an election.
We all then awaited the throne speech. In my 20 years on Parliament Hill, the last throne speech was the worst. I am not kidding myself, but when we were in power, although the throne speeches may have been a little vague, they at least had some meat to them. After hearing the throne speech and realizing there was nothing in it, I thought that we should be patient and wait for the government's legislative package. Once again there was nothing. Perhaps the hon. ministers opposite have isolated themselves in their ivory towers in their death throes, because there was not one single thing.
The Prime Minister said that he had something big in mind, but in the view of the Canadian people it was certainly not in the throne speech or in the legislative package which has been presented to parliament. And we are almost at Christmas time. But no matter, Mr. Speaker, even if he did present something relatively big now, it would be far too late for anything that may happen this winter, so we can rule out anything happening in terms of meaningful legislation.
Now we have this budget, Mr. Speaker. When I was a parliamentary secretary many years ago with the minister of finance, we regarded a budget as a major document which told the Canadian people where we had come from and where we were going. It was a major document that showed the Canadian people the economic direction and economic policy of the government of the day. By bringing down three budgets in one year the federal government has virtually undermined the credibility of a budget. I challenge the government opposite to go to the Canadian people on this budget, on their legislative package, and on their throne speech. I say there is not one single item that authorizes the Prime Minister to go beyond the traditional mandate for calling an election.
As I have said, Mr. Speaker, budgets are supposed to be a grand design that indicates government policy to the Canadian people. I admit that because of the gross economic mismanagement of the worst government we have had since Confederation, the poor Minister of Finance (Mr. Chretien) has been placed in a hopeless pickle. He had two alternatives. One was to dare to go ahead with a bold new design and cut new ground; the other was to work within the confines of the narrow parameters set out for him by this awful government. He chose the latter, and what we got was tinkering and lack of vision.

November 23, 1978
The Budget-Mr. Grafftey
I ask, is that what has kept parliament going on? I hope not. The only possible excuse, having seen the government's budget, its throne speech, and its legislative package, is this. The Prime Minister used to be an NDPer in Quebec but he took over the Liberal party. As a result, there now exists this Liberal disease, which is that hon. members opposite have some divine right to continue to rule this country, even when they have brought this country to its economic knees. This parliament has been prolonged not for the survival of Canada but for the survival of the Liberal party. They keep underlining day after day and year after year this divine right to govern this country, even after the years of gross economic mismanagement.
Just what do we have, Mr. Speaker, after ten years of this government? Unimaginable budgetary deficits, record unemployment, inflation, the lowest dollar relationship to the United States dollar since confederation, and, last but not least, record interest rates that hurt most of all Canadians of low income. These are the very people I have always said members on both sides of the House are here to protect. These are the very people who have been shafted most by the gross economic mismanagement of this government. Certainly they have been shafted the most by high interest rates.
I do not care what statistics the minions of the Prime Minister hand him as he sits in his ivory tower; in the last ten years more and more Canadians have fallen below the poverty line because of Ottawa's foolhardy policies. Gathered in cabinet on the opposite side of the House is the worst collection of economic illiterates that this country has ever seen. With their record, Mr. Speaker, how can they presume to prolong this parliament over and above the traditional mandate? But it will not be long, Mr. Speaker. You bet it will not be long. However, we on this side of the House have to look at you guys over there for another winter.


Some hon. Members:: Oh, oh!


William Heward Grafftey: What have they done to help small businessmen in this budget?


Yvon Pinard: A lot, and you know that.


William Heward Grafftey: I know a lot of hon. gentlemen across the way do not think I am the greatest guy who ever came down the pike, but I do keep in touch with the people, with the foot soldiers in my part of the world. These next two sentences express the mandate that they have given to me. The right hon. Prime Minister, by not calling an election after his traditional mandate expired, has deprived Canadians of removing the worst government we have seen since confederation. We on this side of the House say: after looking at your budget, after looking at your throne speech, after denying that you have the divine right to rule, and after looking at your legislative package, in the name of God, go!


Some hon. Members:: Oh, oh!


William Heward Grafftey: They may be laughing now, Mr. Speaker, but they will not be laughing when their quarterback finally calls the election.
I am glad to see that the Minister of Energy, Mines and Resources (Mr. Gillespie) is in the House this afternoon because I want to talk about our attitude to the proposed purchase of Pacific Petroleums. Certainly their attitude with regard to the purchase of Nordair and Pacific Petroleums underlines how completely even the so-called free enterprise businessmen in the cabinet have lost touch with private sector realities.
The minister of energy proposed to give us a lecture the other day on how companies get finance. I am quite well aware, I will tell the minister, as is the Leader of the Opposition (Mr. Clark) and the hon. member for York-Simcoe (Mr. Stevens), of how Petro-Canada, with the aid of the chartered banks, proposes to take over Pacific Petroleums. Like hon. members opposite, I too have read the details of the proposed chartered bank financing of this takeover. I am as aware as the government of how it is proposed to buy Nordair. The government may have competely lost touch with reality somewhere along the line, but although they have diddled the books enough in terms of public accounting, they cannot diddle this book.
I had Frank Scott, a constitutional law expert, as my professor at McGill, and compared to him the lectures that I have had from members on the other side of the House on constitutional law, and on varying degrees of governmental responsibility for actions taken in the name of the Crown, have been pretty bad. Nevertheless, having gone through the plethora of combinations of argument, the fact is that somewhere down the line the government will indirectly incur a liability for taking over Pacific Petroleums and Nordair.
I ask the minister of energy to state yes or no a little more clearly than he has in the past just what is the position. I do not buy the argument that the government can satisfy its quasi-doctrinaire propensities for cutting back because it has an ex-NDPer who took over the Liberal party as a short-term prime minister. That side of the House has the worst of both worlds-the worst of the free enterprise world and the worst of the socialist world. It is on that basis of lack of principle that the government has brought this country to its economic knees.


Mr. Knowles (Winnipeg North Centre):: They also have the hon. member for Crowfoot (Mr. Horner).


William Heward Grafftey: He has only been hitting about .125 since he has been on the other side of the House.
Having said that, I would say to the ministry opposite that in purchasing Nordair and Pacific Petroleums Ltd., somewhere down the line they will be incurring indebtedness, indirectly. I think it is a pretty poor show during a week when the Minister of National Health and Welfare (Miss Begin) is in Toronto telling her provincial counterparts that we will cut back on health resource programs, health research and bloc
November 23, 1978

funding of social services at the community level, that the government, to satisfy its quasi-doctrinaire urges, purchases Pacific Petroleums Ltd. and Nordair.
I am a little surprised at my colleagues to the left. I usually have a great deal of honest admiration for their spokesman on energy, but I was a little surprised the other day that he supported this move which involves billions of dollars at the same time as we are cutting back on health and welfare services and the like. They, too, lose their sense of reality when they get caught up with their doctrinaire urges, which I submit are more realistic for a bygone age.
This week and last week the Minister of Finance announced the unilateral cutback of programs affecting the provinces. The Prime Minister said this is because of fiscal restraint. I reiterate that in the case of bloc funding of social services at the community level not only the question of money was involved but also a whole new system that the federal and provincial ministers of welfare had worked out with the provinces over a long period. Holus-bolus, unilaterally, the Minister of Finance cancelled the programs. Apart from considerations of restraint, is this the way to deal with the provinces? I suggest that when programs like that are cancelled unilaterally, the waste of money is incredible.
Let me be more specific about the government's plans for cutting back on the health resources fund, Mr. Speaker. The position of this party on restraint is very clear. I am sure I am representing the party when I say we must be selective. Very often Treasury Board moves into certain programs like a bull in a china shop, without understanding the implications, and so the results are incredible.
If there is one thing I have some knowledge of it is the health resources fund. It was a multi-million dollar fund put in place not only to organize community health services, to humanize and make more decent the delivery of health care services, but also one of the centrifugal aspects of the fund was to rationalize costs. One of the means of doing this was to train paramedical people to take the place of high cost doctors, by building units less expensive than the curative community hospitals, and by helping research. In the name of restraint, however, the government went hog-wild. Treasury Board, with no knowledge of the centrifugal aspect of this program apart from its human dimensions, just cut costs. They went in to cancel and cut. I maintain that by cutting in the area of health resources you waste rather than save.
I want to lay another myth to rest, Mr. Speaker. Time and time again in past weeks the Leader of the Opposition (Mr. Clark) and his party have put forward propositions vis-a-vis local tax deductions for housing. With an almost Pavlovian dog reaction, the government said this was for the rich and not for the poor. I think we have laid to rest the argument that not all homeowners with young families and sizeable mortgages can automatically be classified as rich. Apart from that, however, it is quite a fallacious argument.
The benefit we want for homeowners is a benefit that lessees have been getting indirectly for years. The owner of buildings, houses and condominiums, rents them and directly or indirect-
The Budget-Mr. Grafftey
ly has been able to benefit from the tax provision that we provided for homeowners in the past. The benefits that we are proposing for future homeowners are benefits that have largely been enjoyed by lessees in the past.
Hon. members opposite sneer at our proposal. It is not just an ad hoc proposal like so many made by the government but is one that goes to the heart of the principles and philosophy of this party. As we go to victory at the next election, we say that we believe that democracy is well served, in the best sense of the word, when the individual citizen has an ownership stake in the country. Unlike the socialists and the Liberals, holding on to their doctrinaire ideas which were more relevant in the thirties than today, we believe that government has a role to play in encouraging what I call a property-owning-


Mr. Gillespie:: Like Petro-Canada.


William Heward Grafftey: While the minister is out buying more and more for the government, we are encouraging individual Canadians to own more and more. We believe that governments have a direct and indirect role through tax incentives and the like, in encouraging more good farmers to own their own farms, more businessmen to own small businesses. The government is not interested in the small businessman and did nothing for him in the budget. We have and are articulating policies, as our leader said, to get our money "out of the sock and into stocks". We have a policy to encourage more Canadians to invest in Canadian enterprise.
We believe that democracy is well served when more Canadians are encouraged to own their own homes. That, Mr. Speaker, is a private sector or individual policy; it is not just an ad hoc thing we thought of overnight. It goes to the heart of the principles of this party. It is one of the reasons that I am a Progressive Conservative, because I believe in a propertyowning democracy when the people own the property, not the government.
The Minister of Energy, Mines and Resources did so well in the private sector that he now wants billions of tax dollars to satisfy his quasi doctrinaire propensity. We on this side of the House believe that our-


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


Alastair William Gillespie: Mr. Speaker, I wonder if the hon. member would accept a question.


The Acting Speaker (Mr. Ethier):: The hon. minister is seeking permission to ask a question. That can be done only with unanimous consent. Is there unanimous consent?


Mr. Paproski:: Yes, Mr. Speaker, if he can have more time.


The Acting Speaker (Mr. Ethier):: Order, please. There does not seem to be unanimous consent. I did not get unanimous consent.

November 23, 1978
The Budget-Mr. Duclos


Alastair William Gillespie: Mr. Speaker, we are prepared to allow him to finish his remarks. If he is allowed more time, that is fine by us.


The Acting Speaker (Mr. Ethier):: 1 asked if there was unanimous consent, and it was not given with conditions. Now conditions are applied to it, so I recognize the hon. Parliamentary Secretary to the Secretary of State for External Affairs (Mr. Duclos).


Mr. Louis Duclos (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I wanted to take part in this debate to state openly and publicly that I fully agree with the responsible approach of the government with regard to the financial and economic management of our country. Mr. Speaker, the government could easily have taken advantage of this budget brought down by the Minister of Finance (Mr. Chretien) to pander to the tastes of the people. On the other hand, the Prime Minister (Mr. Trudeau) could easily have abstained from making the decisions which required the support and co-operation of the Canadian people, but he chose to do so, because we know that in spite of all the speeches made by members opposite and all the half-truths spread by them, the Canadian people prefer a government which assumes its responsibilities and tells the truth.
Mr. Speaker, the best proof given by the government that it intends to run this country in a responsible fashion and to seriously curb its spending has been its decision to come to grips with a program which was indeed very popular in some quarters but gave rise to abuses and excesses that could no longer be tolerated, namely, the unemployment insurance program.
As a result of the decisions taken by the government to reduce and make more stringent the provisions of the Unemployment Insurance Act covering benefits and the eligibility of Canadians, Mr. Speaker, from now till the end of the current taxation year we will save $150 million while for 1979-80 we will save some $580 million and for the following year almost $1 billion by making the unemployment insurance scheme much more restrictive.


Mr. La Salle:: On the back of the unemployed.


Louis Duclos: The member for Joliette (Mr. La Salle) will have the opportunity to speak in due time, Mr. Speaker. He makes me laugh because a survey made by Ottawa University Professor Bodkin shows that the generosity of the government with its unemployment insurance policy has created an artificial unemployment of at least 2 per cent so that the real unemployment rate in our country must be about 6 to 6.5 per cent. Indeed, what happened is that the original intent of the unemployment insurance scheme has been distorted. This is not an insurance against unemployment any more, Mr. Speak-
[The Acting Speaker (Mr. Ethier).]
er; it has become a social welfare measure which too many Canadians take advantage of as soon as they meet the legal requirements. Mr. Speaker, I think it is time that the government thought about those who work, who pay taxes, who get up in the morning and have the guts to go out and earn a living and I think the government is doing just that. Of course, the present economic situation makes it impossible for some of us who really want to work to find jobs and we deplore that fact. The government does not want to penalize these people anyway, but to punish those who found a way to systematically take advantage of the generosity of our program.
Mr. Speaker, one of the big deceptions I had in recent weeks or even months was to hear some ministers of the Quebec government mislead Quebeckers by pretending that the federal budget restrictions were aimed first and foremost at jeopardizing the interests of the province of Quebec, and yet they had already recognized the advisability and necessity for the federal government to reduce its spending in some very specific fields. For example, using an analogy, the finance minister said that it was a bit like someone clearing the snow in his driveway by shovelling it over to his neighbour's entrance. I think the Quebec finance minister could have told the population that those people who will no longer be eligible for unemployment insurance because of the new requirements in the law will in some cases get welfare benefits of which, Mr. Speaker, 50 per cent are financed by the federal government under the Canada Assistance Plan.
I would add, Mr. Speaker, that in any event fewer than 10 per cent of those who will no longer be eligible for unemployment insurance will become recipients of welfare benefits because in several cases they are young people still living at home with their parents, and their parents can support them. In some cases it is a man or a woman whose spouse is working and earning an adequate income. Mr. Speaker, when I was a student, I never thought about that, it never occurred to me that by working so many weeks I could have applied for unemployment insurance. Not only me but also my fellow students. People with whom I used to study managed to work during summer. We were saving enough money and then were studying for eight, nine or ten months at the university with the modest amount of money we had managed to save.
Mr. Speaker, I was also deeply disappointed to hear in the last few months a minister in the Quebec government, the Minister of Industry and Commerce, denounce throughout Quebec the position of the federal government on the Ford matter. He stated on several occasions that the federal government prejudiced Quebec's interests by allowing Ford Motors to build their plant in Ontario. Mr. Speaker, the people in Quebec should know that the choice was not between Quebec and Ontario. The choice was between an investment by Ford Motors in the state of Ohio, in the United States, or an investment in the Windsor area, in Ontario.
November 23, 1978


An hon. Member:: That is all!


Louis Duclos: All in all, would the Quebec minister of industry and commerce have preferred the investment to go to the United States rather than benefit Canada because it was made in the province of Ontario? I think, Mr. Speaker, that the benefits Canada will derive from that investment will also be felt in Quebec, if only indirectly, and I can assure Quebeckers that the government is making every effort in the case of General Motors to have that investment made in Quebec. But such decisions are not made by governments finally but by business leaders who think in terms of economic profitability.
Mr. Speaker, I am a member of a party which is very tolerant, and for that reason, I feel well at ease to bring that matter to the attention of the House, and I am glad to note that the Minister of Energy, Mines and Resources (Mr. Gillespie) is now in the House because it is a matter which I know is of great interest to him. What I have in mind, Mr. Speaker, is the issue concerning the heavy water plant in Laprade, Quebec.
Strictly speaking, Mr. Speaker, it is obvious that the arguments raised by the minister make a lot of sense because there is no point in building a heavy water plant if, on the one hand, there is already overproduction of heavy water in Canada as a whole and if, on the other hand, the cost to Quebec consumers is going to be higher if they are supplied by the heavy water plant which could be built in Laprade. However, Mr. Speaker, I wonder why the federal government signed that agreement earlier this year. I suppose the reasons we have been bringing forward since last August were already as good in January and February.
Mr. Speaker, rigorously and objectively speaking we are certainly right but I think the minister should understand the significant political dimension of that matter. The minister should understand that the credibility of the federal government is at stake in the province of Quebec and that its credibility is very important given the important debates now taking place and given the major decisions that Quebeckers will have to make in the coming months. I think there is a symbol here and it would therefore be very important to reconsider the entire matter. Indeed, 1,500 jobs are at stake and I think that it is imperative that the Minister of Energy, Mines and Resources make a proposal to the government of Quebec. What he should do is offer a compensation such as the extension of the natural gas pipeline to the east or simply accept to give further action to the agreement already signed because what is noticeable for people is that an agreement has been signed and that we withdraw unilaterally from it now.
Mr. Speaker, the government budget restrictions cannot be prejudicial to Quebec's interests. It is easy to prove, regardless of what the Quebec government may say. Let us take, for example, the revision of family allowances. In 1979, Mr. Speaker, this change, which will benefit low income families
The Budget-Mr. Duclos and require of the more privileged that they forgo $5 a month for each child, means, as far as Quebec is concerned, an additional injection of $60 million during the coming year.
Also, I should like to take this opportunity to stress that as far as the riding of Montmorency-which I have the honour to represent here-is concerned, the net result of this measure will be an additional 2.7 million in family allowances. This means that the population of Montmorency will get a total of $25 million, only in family allowances. And if we add to that old age security, a sector where the Minister of National Health and Welfare (Miss Begin) has performed a feat in spite of budgetary restraints, has managed to raise almost $300 million, of which $82 million will go directly to Quebec, I wonder, Mr. Speaker, how one can say that this government do not serve the interests of Quebeckers.
As far as my constituency is concerned, the riding of Montmorency, and as far as old age security is concerned, with the guaranteed income supplement being raised by $20 a month, an additional sum of $1.5 million will be injected into the constituency during the coming year, which will increase to $36 million the money received from the federal government by the senior citizens in my constituency. In all, Mr. Speaker, following the revision of family allowances and the increase in the budget for old age security, Quebec will receive in the coming year $142 million more than it did last year.
Mr. Speaker, a few weeks ago, we studied Bill C-5, a measure which specifically provided for this $20 a month increase per household for senior citizens, and also a six-month extension of the spouse allowance to help the spouse who loses his or her partner to death to face the situation more easily. Naturally it is easy to say that something is not enough. I say, Mr. Speaker, it is a step in the right direction. I find that rather strange. I remember the hon. member for Kingston and the Islands (Miss MacDonald) and the hon. member for St. John's East (Mr. McGrath) expressing pity for the fate of the women and the men who, having lost their spouse, would also lose their pension. I found that strange, that taken individually, those hon. members of the opposition may be sincere; I am willing to trust them. But, Mr. Speaker, they should realize that their worst ennemy, if they are really sincere, is their party, taken as a whole, which constantly and indirectly, with great subtlety, attacks the social policies of the government, insinuating that it does too much for the people. That is very easy to do, Mr. Speaker, to create an atmosphere in the country, to have the country sway to the right, so that tremendous pressures-


Roch La Salle: It is going to hell.


Louis Duclos: -are exerted against the government. Mr. Speaker, does the hon. member for Joliette ever use parliamentary language! I think he should be a bit more polite. In any event, I feel I should not attach too much importance to such despicable comments. About this whole matter, the problem of
1428

November 23, 1978
The Budget-Mr. Duclos
older people, I think we have to be extremely careful lest in allowing the spouse, aged 60 to 65, to keep the pension-which in itself is desirable, we create at the same time an injustice towards the other individuals of 60 to 65 who, being single, are under no circumstances entitled to the spouse's allowance.
This is why, Mr. Speaker, I believe that the answer, which must nevertheless take into account the taxpayer's capacity to pay and the government's capacity to spend, would be to lower gradually the age of eligibility for old age security in the case of people who leave the labour force and have no other source of income. Mr. Speaker, I would suggest to the government that starting next year, let us say in 1980, we start paying the pension from the age of 64 and that we lower the age of eligibility by one year annually so that in 1984, all Canadians over 60 who will have left the labour force and have no other source of income could receive a pension.
Mr. Speaker, according to the studies which have been made, about half of all Canadians between the ages of 60 and 65 would take advantage of this pension and retire from the labour force. If we brought about such a reform of our social security system right now, it would cost $1 billion, Mr. Speaker, and I do believe, as my colleagues do, that Canadians have enough of a sense of their responsibilities to understand that in the present economic situation the government cannot spend an additional $1 billion. However, I believe that the government could spend a bit more than it does now so that eventually old age pensions would be available at the age of 60. One of the beneficial results of such an action, Mr. Speaker, would be to free jobs for our young people who want to work, and there are some young people who want to work, Mr. Speaker. There are a number of spongers in our society, but I believe that most young people want to work, to have an interesting job and to be motivated.
Mr. Speaker, I would now like to discuss the attitude of our friends opposite concerning the economic situation of Canada as a whole. On the one hand, the hon. member for York-Simcoe (Mr. Stevens) asks for a considerable reduction in our deficit. This is not a bad idea; I believe that it is a valid objective, Mr. Speaker. On the other hand, the Leader of the Opposition (Mr. Clark) maintains that we must reduce taxes. It would not be a bad idea to reduce our deficit and reduce taxes. However, I believe that this would entail lower expenditures.
When discussing income tax reduction, Mr. Speaker, we are immediately reminded of the proposition made by the Leader of the Opposition who would have municipal taxes and mortgage interests made deductible from the taxable income of the taxpayers.
Mr. Speaker, I believe that if we think about it for one second we see this is a totally irresponsible proposition. Mr. Speaker, it is known for instance that after four years- because this scheme would cover a four-year period-the
federal government would lose at least $2 billion in fiscal revenues, not to mention the $750 million lost by the provinces which, of course, would not collect these revenues. Besides, I would like to point out the interesting fact that we are very often blamed for not consulting the provinces when we implement various policies. Mr. Speaker, in an area closely related to provincial taxation, I do not believe that the Leader of the Opposition bothered to consult very many provinces, I believe that in future he should not teach us too many lessons in this respect. And besides, if the home owners who have completely paid off their mortgage or have paid part of it were to decide-as they would probably do because nobody is stupid enough not to grab such and opportunity-to refinance completely their house, we cannot even project the possible costs, the taxes that might be lost by the government.
Mr. Speaker, the effects would be first an increase in mortgage interest rates. When money goes to the mortgage market, there are less funds available for industrial development, mining development and the various economic developments required by our country. Mr. Speaker, with the increase in interest rates, municipal financing would be much more costly, and in order to meet their responsibilities, municipalities would have to increase property taxes, thus offsetting the benefits that taxpayers might derive from the proposal made by the Leader of the Opposition. Mr. Speaker, it is also a socially unfair measure as, considering the progressive nature of tax rates in Canada, savings would increase with higher taxable incomes.
Furthermore, it is obvious that people with luxury homes, with the most expensive residences, will take advantage of the $5,000 maximum provided by the proposal of the official opposition leader: the owners of small bungalows would not get the maximum, but rather the people who are able to pay for luxury homes and with a high standard of living. Mr. Speaker, I do not consider this as a socially equitable policy and I am prepared, in my riding, to defend the government's position on that issue and to attack the irresponsibility of the opposition party. Mr. Speaker, I know that it is not enough to criticize. For my part, when I criticize a proposal made by my political opponents, I like to propose an alternative. The aim in my view should be to help homeowners who really need this help, while maintaining a responsible fiscal and budget policy. One proposal I would have in that respect would be to allow small homeowners to deduct up to $1,000 from taxable income, depending on how much deduction they claimed for interests and dividends because, as you know, there is a maximum $1,000 exemption for dividends and interests.
Mr. Speaker, this would help small homeowners and we know that thousands can barely pay their mortgages and taxes, and are unable to save. They would use the maximum $1,000 deduction.
Mr. Speaker, the more affluent homeowners, those already receiving dividends and interests in excess of $1,000 could not benefit, and rightly so. Such a policy would be socially fair,

November 23, 1978

because the government's first priority is to care for the small in society.
Mr. Speaker, an exemption is also needed for the aged. We are aware that a number of old age pensioners essentially live off their savings, they receive dividends and interests, so they could be allowed a deduction at the uniform and flat rate of $1,000. The advantage in that proposal, Mr. Speaker, is that we know the cost. It would be roughly $300 million. This might be implemented on a gradual basis, to conform with current economic and financial conditions, but such should be the goal. As I said, Mr. Speaker, deficit reduction is good. Income tax reductions I support. But the opposition should be a little more specific when time comes to talk about spending cuts. One hears relatively few suggestions. We have been told about 60,000 civil servants who should be laid off over a three-year period. What an intelligent proposal! Self-made unemployment, but one hopes-


Roch La Salle: This is not true.


Louis Duclos: But, Mr. Speaker, one knows very well that there are not 20,000 civil servants who voluntarily retire each year in the federal government. Therefore, it would be voluntary unemployment creation. I wonder what the hon. member for Joliette is going to answer to that, Mr. Speaker.


Roch La Salle: This is not true.


Louis Duclos: Mr. Speaker, we prefer to propose some raises. We do not suggest cutbacks but higher expenditures and I am going to give you a few examples.
I referred earlier to what the hon. member for Kingston and the Islands (Miss MacDonald) said, that the spouse's allowance should be paid in all circumstances to people between the ages of 60 and 65. That is $10 million more, Mr. Speaker. I listened to the hon. member-unfortunately, he is gone-the hon. member for Brome-Missisquoi (Mr. Grafftey) who talked about the financing of social services. I will tell him first that he has not done his homework because there has been no agreement yet. There was a discussion between the federal government and the provinces but no agreement has been signed. He said it was only a matter of reorganizing budgets. I will tell the hon. member for Brome-Missisquoi that if that agreement were to be signed it would result in an increase in spending of $160 million for the federal government. Always spending!
I was listening yesterday to the new member for Burnaby-Richmond-Delta (Mr. Siddon) who urged-and I think it was legitimate-that the 250 scientists working for the federal government not be fired because that would have a bad effect on the development of science in Canada. I am sure of that, Mr. Speaker, but there will come a time when there will have to be a little consistency, when there will have to be an elimination of the contradictions in the economic and financial policy of the opposition.
80067-19'A
The Budget-Mr. Duclos
You know, Mr. Speaker, it is not hard, to reduce a deficit there are not very many ways of going about it. Either you reduce spending or you increase taxes, or a combination of both. There are no alternatives. If you reduce taxes, you essentially have to reduce spending. I noted that the Progressive Conservatives are even prepared to contradict themselves, are so power hungry that they are prepared to make the worst contradictions, and they think that Canadians are going to fall for that farce. You can fool all people from time to time, you can fool some people all the time but you cannot fool all people all the time. I think it is time that the opposition dropped their masks, that they showed their real face. The time for truth has come in this country. I challenge the Progressive Conservatives to present a budget. It could be called the budget of the year I of the Progressive Conservative party. A budget. We are going to be waiting for that. I ask them questions. Present that budget and answer the following questions: What would be the size of the deficit? How and by how much would taxes be reduced, by how much and by cutting into what expenditures, cutting into what programs would spending be reduced? I challenge the Progressive Conservative to put before this House a budget before the forthcoming elections with all their so-called experts who are members of the Tory caucus.
There are elementary principles which should not be forgotten. To achieve both a deficit and tax reduction expenditures must be curtailed more so than taxes. The La Presse newspaper from November 18 quoted a fairly typical statement by no less an authority than the most honourable Progressive Conservative member for Prince Albert (Mr. Diefenbaker), a former prime minister of Canada under whose administration our country experienced a high rate of unemployment.


An hon. Member:: Quite high, indeed!


Louis Duclos: Under the Liberals in 1955-56, the unemployment rate had been fluctuating from 3 to 4, and 4'/i per cent. All of a sudden it went up to 6, 7, 7.1 per cent and when the Liberal party came back to power in 1963, unemployment started to go down. The 7 per cent unemployment rate in the conditions prevailing then, when the rate of participation in the labour force in 1960 was much lower than it is nowadays would mean a rate of unemployment of 10 per cent to 11 per cent by today's standards. Such were the achievements of the Progressive Conservative government under the leadership of that prime minister-


The Acting Speaker (Mr. Ethier):: I regret to interrupt the honourable member but his time has expired.


Roch La Salle: Mr. Speaker, I am extremely eager to join in this debate. However, I wonder if, in order to allow all these hon. gentlemen to have a good supper in view of the fact that it is already 5.55 p.m., I could not ask for the adjournment of this House so that I may resume. It seems that Mr. Speaker does not quite seem to feel that way. I certainly would like to take advantage of the few minutes which I am granted to join in this debate, in answer to the speech delivered by the Minister of Finance (Mr. Chretien).

November 23, 1978
The Budget-Mr. La Salle
Mr. Speaker, once again this House has to deal with one of these quarterly interventions by the Minister of Finance in the shaping of our economic policy.
Those numerous and awkward efforts to steer to the right and then to the left prove only one thing-the glaring incompetence of the Minister of Finance. If he had seen right last spring, we would not have to discuss once again such important economic issues. Had the minister listened to advice from the opposition, because we gave him good opinions and also those of experts, Canada would now be on the road to economic recovery. The Canadian dollar would be in a stable position and we would have registered real success against inflation.
In light of past efforts and if I consider those failures which have marked all those interventions last year, this budget will fall far short of the lofty goals at which the minister is so confidently aiming. However, as the minister is crossing a political desert, he can do nothing but whistle to recover his morale while he is spending our money. Economists agree on one point: this budget will fail to stimulate the economy and appreciably cut down unemployment. On the contrary, it is evident that the Minister of Finance has decided to use unemployment as his principal instrument to fight desperately an ever threatening inflation.
Once again, Mr. Speaker, thousands of Canadian workers are going to pay for the mistakes, the foolishness and the maladministration of this government. While attempting to deceive us by talking about expenditure cutbacks, the minister is in fact increasing federal spending. Mr. Speaker, under the present government, words have lost their real meaning and only the minister has the nerve to pretend that we will reduce our spending by increasing them. Our party proposes longterm budgeting-preferably five years-but the minister prefers to table a hold-the-line budget, desperately hoping that the situation will improve as if by magic and that the government will not be defeated in the months to come.
Mr. Speaker, in the hands of this government, the budget is no longer an instrument of economic policy but simply a ploy of electoral propaganda. It is in fact one of the reasons why we heard so many economic statements this year. And in spite of a few welcomed initiatives, the same applies to the last budget. Indeed, a deficit of at least $12 billion does nothing to restore confidence among business circles nor does it strenghten our dollar on international markets. It is not the first time the Minister of Finance is engaged in double talk. While bragging about the merits of devaluating the dollar, he is increasing its value by putting the interest rates to an unprecedented level which will only worsen the stagnation of our economy. The so-called benefits of a decrease in the value of the dollar will be wiped off for the consumer by an increase in financing costs and economic activities. It is as if the minister was trying to save a drowning man he has just thrown in the lake with a milestone around his neck or as if somebody was feeling compelled to sell his stove to buy wood. In my view, this is
[The Acting Speaker.]
more or less the attitude of the Minister of Finance. Our dollar is likely to go on sinking straight to the bottom as it has been doing since the minister assumed his present portfolio. Mr. Speaker, I think I am hearing some strange noises, therefore I hope to continue at eight o'clock.



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.
And being returned:
Mr. Speaker informed the House that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
Bill C-7, an act to provide supplementary borrowing authority for the fiscal year 1978-79 and to amend the Financial Administration Act-Chapter No. 4.
Mr. Speaker:: It being after six o'clock, I do now leave the chair till eight o'clock this evening.
At 6.10 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

[Stage Direction]
[ Translation]

[Stage Direction]
The House resumed consideration of the motion of Mr. Chretien that this House approves in general the budgetary policy of the government.
Roch La Salle: Mr. Speaker, I will continue my speech. I readily admit that tax exemptions for some industries are very commendable indeed. My only regret is that they have not been granted earlier, as we in the Progressive Conservative party have been advocating it for a long time, especially in the
November 23, 1978

case of resource industries. The reduction of the federal sales tax from 12 per cent to 9 per cent is definitely a step in the right direction, but it is not addressed to the heart of the problem of the costs that overburden the Canadian manufacturing industry. Moreover, it is not entirely sure that the benefits of the operation will be fully passed on to consumers. The indexing of the basic exemption for personal income tax purposes will at the most enable a taxpayer to keep his purchasing power.
The tax credit granted for employment expenses which is raised from $250 to a limit of $500 seems generous at first sight, but it is really quite small for workers and will not fully compensate for the increase in transportation costs and the price of tools. I sincerely regret that the minister has found necessary to increase the airport tax by 15 per cent. There is no clearer evidence of the wealthy bourgeois mentality which characterizes this government than this tax increase the principal victims of which will be the passengers with little or no means. Air travel in this country is not for the exclusive use of the rich businessmen and vacationers .
The airplane is a vital means of transportation in the outlying areas of Canada, be it in the North or in regions where other means of transportation are not available, or on the many islands off our coasts. I am especially referring, as far as my province is concerned, to the people of the Magdalen Islands among others, who can reach the mainland by plane only and who are not exactly among the richest citizens of our country. I am also referring to the workers of the north coast and of new Quebec who once in a while want to visit their families in the Gaspe peninsula. I am also thinking about the Indians and the people working on the James Bay project whose transportation expenses will go up again. And what about the people of Prince Edward Island, of Newfoundland, of the Northwest Territories or of the northern parts of all our provinces? What about all the Canadians who are scattered all over the country and who have no other means of transportation but the airplane to get together at Christmas time or for the funerals of one of their relatives? I am thinking of those new Canadians of less than modest means who may want to go back home, to the old country, for one last time. The government would not have acted otherwise even if they had actually wanted to get at the most needy of Canadians.
I also regret that the Minister of Finance (Mr. Chretien) has not seen fit to adopt our party's recommendations regarding deductibility of mortgage interests and property taxes on a homeowner's principal residence. This measure, which would be of immense benefit to our economy in several industrial sectors, will be one of the Progressive Conservative party's top priorities after the Canadians have given us the mandate to govern this country. And since the Prime Minister (Mr. Trudeau) likes to link the economic problem with that of national unity, I do not think that it is irrelevant for me to say a word about the pitiful and deplorable speech given over the week-
77! e Budget-Mr. La Salle
end by the head of this government before the Ontario Liberals.
I am not much impressed, Mr. Speaker, by the Prime Minister's efforts to propel himself into the role of defender of Canada's unity. The Canadian people are not too willing to forget that it was under his government and because of his political actions that disunity came to Canada. Nor are they too willing to forget that his arrogance and his rigidity as regards constitutional matters are the main reason why so many Quebeckers want out and why the present Quebec government was elected. Recent polls published in Montreal's La Presse also show that opposition to the Prime Minister, his policies and especially his government, has reached an all time high. They are of such nature as to convince voters that maintaining this party in power any longer is the surest way to push a majority of Quebeckers into the arms of the party currently in power in Quebec. Even though the right hon. Prime Minister drapes himself in the Canadian flag in an effort to present the figure of a national hero, he cannot prevent anybody from seeing through the desperate manoeuvre of a politician eager to divert the attention of the public away from the economic chaos in which he has plunged the country and the serious divisions he has created among the various Canadian ethnic groups. Canadians will not fall for this pitch by a man whose credibility has fallen to the zero level. They will remember his stand against controls during the 1974 election campaign. They are not about to forget this huge political fraud, Mr. Speaker.
Should the right hon. Prime Minister decide to masquerade as the saviour of our country, Canadians would only laugh. This so-called rempart against separatism reminds one of the famous rempart the Liberal party claimed it had risen against conscription. It was not very solid. Such ridiculous claims would only make people jeer if they were not accompanied by slanderous remarks against those who oppose the government. Never has there been a party leader, let alone a Prime Minister, who has questioned his adversaries' loyalty to Canada. I do not doubt the sincerity of the leader of the government when he claims that only his policies can save Canada from disaster and I have nothing but pity for his blindness, but I deny him the right to accuse the leader of the opposition or any other public figure for that matter of being disloyal to Canada, just because he happens to favour a greater decentralization of power and a more active role for provincial governments.
Incidently, we have an indication of the sincerity of the right hon. Prime Minister when he states that he is willing to discuss a new power sharing formula with the provinces. The right hon. Prime Minister goes too far when he calls all those who do not agree with him "enemies". This man who claims to be the only one capable of uniting Canadians is the only one who,

November 23, 1978
The Budget-Mr. La Salle
to date, has dared use words likely to provoke division among Canadians and create a truly explosive social climate.
But the worst, Mr. Speaker, is not that the right hon. Prime Minister should have made such unworthy remarks. Today we know that he is quite capable of doing anything at all to save his bacon. The worst is that there should have been Liberals to applaud, to support those unbecoming and unfortunate calls. Mr. Speaker, this afternoon I heard several speeches and I should like to demonstrate the lack of trust in the government that has grown in this country. When the right hon. Prime Minister visited Ontario last Sunday, he went as far as to say that if the country were to have a Progressive Conservative government it would separate. I refuse to accept such a statement, Mr. Speaker. Let us remember the story of the three wisemen.
I feel it is important to recall the time when the right hon. Prime Minister, accompanied by his two attendants, came to Ottawa and decided to sink into the Liberal party. Of course, the Liberals of the day did not see them as their friends and especially not as their counsellors. Of the three wisemen, you will recognize with me, Mr. Speaker, that two have chosen fairer climes. As for the third, I think in fact he is faring about as well as the Canadian dollar. But when we look at the background of the right hon. Prime Minister, at the bed-fellows he had at the time, it is not surprising to see the type of politics we have had in the last ten years and why a lack of trust has settled in the land.
Lie dared claim that a Progressive Conservative government could lead to the separation of the country when he is fully aware, and all hon. members opposite know that, that the situation began to deteriorate in the last ten years, under his administration. Should I recall the fraternity which existed between the two founding peoples, between the two largest groups in Canada, during the centenary of Confederation? What happened in the last ten years? There was a lack of economic policies which increased social problems all over the country, and the Prime Minister travelled across the land making people believe that he had the whole situation in Quebec under control. He accused the mass media of making false statements whereas he alone described accurately and exactly the situation in Quebec. And we wonder today why so many Quebeckers show a lack of trust and even a lack of interest in our federal system. I should perhaps remind hon. members opposite, who have shared the same experiences, that we have witnessed many betrayals on the part of this government and of those members who came here to save the country ten years ago. In view of this terrible political and economic fiasco, we certainly cannot agree hastily to support this budget without making appropriate comments.
I would like to remind those who state that the government has managed the affairs of Canada well and who wonder about
(Mr.: Mr. S.]
the indifference of Quebeckers and the objective that many of them have, that what has brought about this lack of trust and this rejection of federalism in the province of Quebec is the attitude of this government. For instance, the conflict over the French language in air traffic certainly did nothing to gain the confidence of Quebeckers even though the department involved was headed by a Quebecker, and we should perhaps ask some questions to the then minister of transport who was well aware of the situation in Quebec and who has now gone to rest in the Senate. We could also talk about the Prime Minister. Who is the cause of this lack of trust? This same Prime Minister who had as his main objective bilingualism throughout the country. He had promised a bonus to those who could work in both official languages, and in his cutbacks last summer, without any prior consultation, he boldly took back this bonus and reneged on his promise. If such an action is not liable to create a lack of trust, a lack of confidence and a lack of credibility for these people, I wonder what is.
This afternoon, Mr. Speaker, I listened to the hon. member for Montmorency (Mr. Duclos) who, with great subtlety, wanted to say to the Minister of Energy, Mines and Resources (Mr. Gillespie) that he was greatly disappointed that the federal government had broken its agreement with the government of Quebec. The hon. member for Montmorency was very careful about what he said, but I could see that he was very disappointed and that he disagreed in principle with the minister. The federal government had signed an agreement with a provincial government and it broke this agreement in this budget without any prior negotiation. Not one member on the other side can suggest the opposite. Few people complain about that. So far, so good. Recently the minister told me the closing down of the Laprade site was in the interest of Quebec consumers. If such was the case, Mr. Speaker, how come twelve months ago this government took the lead and invited the Quebec government to start such a huge project? This proves no sufficient revenues had been collected, which points to utter incompetence.
That kind of decision can only worsen the situation as viewed from the province of Quebec. These are decisions that hurt. Of course the Quebec government recently published data proving fiscal restraint was costing Quebec 18,000 jobs. I put the question to the Minister of Finance (Mr. Chretien). I asked him whether he had made projections, assessments before announcing those cuts. The minister never answered. He suggested he wanted to put the country's finances into better shape, but he could not prove data published by the Quebec government were inaccurate. The Minister for Federal-Provincial Relations (Mr. Lalonde), who is in the habit of announcing the big bad wolf is coming, had no hesitation in suggesting those data were baseless. Of course this is no proof, and it can hardly help the government regain credibility and public confidence.
November 23, 1978

I hope that the Minister of Finance and all the ministers who have cut their spendings... We are not necessarily against cuts, we did ask for them, but I would like to know if serious assessments have been made and I would like to make sure that the province of Quebec particularly, and other members from that province will mention it, will not be unduly penalized by those budget cuts.
Until now this government has not been able to answer and I am quite sure that these cuts were made without any serious analysis, and I think we should blame this government for it. How could this government possibly maintain its credibility when there has been nearly 500,000 young people on unemployment rolls for over a year? And they will tell us all about Bill C-14 when this government has allowed the number of unemployed to reach 1.5 million. We are talking about one million unemployed but 500,000 more are not even registered. As we exceed the one million unemployed level, in the name of spending reduction they go after that category of unemployed who have no other alternative but welfare and I consider that this proposal is inhuman and ill-advised. Of course there has been some abuse in that department and in the administration of the government administration which was unable to identify those abuses soon enough. We will not blame the government because it wants to set things straight, on the contrary.
If the Minister of Employment and Immigration (Mr. Cullen) is really convinced that through these savings he can create 350,000 jobs under the 14 programs he announced-the few assessments that were made do not guarantee that he will reach his objectives-but if the minister is convinced that he can create 350,000 jobs, why did he not implement those programs sooner? And if he can really create 350,000 jobs, Bill C-14 might become useless because that number of job opportunities will reduce the unemployment rate by 30 per cent. Mr. Speaker, there is nothing to prove that the minister will succeed in meeting his objectives and if we base ourselves on the falsehood of the predictions made by the Minister of Finance since he has assumed his present portfolio, we are quite entitled to think that the Minister of Employment and Immigration will not meet his own objectives and that, Mr. Speaker is a troublesome matter. There is also an attempt to win back public confidence.
I stated earlier that little concern was given to those affected when certain cutbacks were unilaterally decided. How can this government regain public confidence when Canadians have not forgotten its position on the sales tax last summer? How can this government gain public confidence after having pledged ten times over to build Place Guy Favreau which is a project which has just been started very recently? How is it possible to trust this government which has implemented a dairy policy which has compelled thousands of milk producers to leave this market, not to mention the fact that it is still refusing indexation?


An hon. Member:: It is not true.
The Budget-Mr. La Salle


Roch La Salle: No, it is true. Mr. Speaker, a member opposite is telling me that it is not true. Hundreds of milk producers have been compelled to give up production some two years ago because of bad management, bad projections and bad advice on the part of the then minister of agriculture and all members know that. Of course he is careful enough not to try to justify this position. All these factors, Mr. Speaker, can only lead to distrust for this government. Nobody has yet complained on the other side. We are being told that the users of commuter trains in the Montreal area will probably have to pay 50 per cent extra for their daily ticket in order to travel from their homes to their places of employment. Here is a form of penalty because the government allows itself to forecast increases in production costs and wages, yet it will accept without a word of protest an increase of 50 per cent for the users of commuter trains in the Montreal area.
That seems to me a flagrant breach of the guidelines it set for itself. For a long time, Mr. Speaker, we have been perfectly aware that because the federal government kept refusing to write off the deficits of the CNR, that is why the users of commuter trains are going to have to pay an extraordinary increase. And I know that several members are very concerned by that and I simply ask them to exert pressures on their own government so it will come back to reason. This afternoon I heard an hon. member on the government side talk about reducing the age of retirement to 64. He was referring to incentives and services-


Mr. Roy (Laval):: Mr. Speaker-


Mr. Deputy Speaker:: Order. The hon. member for Laval on a point of order.


Marcel-Claude Roy: Mr. Speaker, I wonder if the hon. member would accept a question?


Roch La Salle: No, Mr. Speaker. 1 know those questions and hon. members opposite had the opportunity to speak on this. And I did not hear the hon. member for Laval rise to blame the minister for the increase I am referring to. That is his business but I am doing so as a Quebecker and I think he should do the same, I think I have to do it-


Marcel-Claude Roy: Mr. Speaker-


Mr. Deputy Speaker:: Order. The hon. member for Laval on a question of privilege.


Marcel-Claude Roy: Mr. Speaker, I think I am entitled to rise on a question of privilege because when he talks about commuter trains the hon. member for Joliette (Mr. La Salle) is referring to a jurisdiction that is purely provincial and highly recognized by the Liberal government three years ago and turned down-

November 23, 1978
The Budget-Mr. Brewin


Mr. Deputy Speaker:: I must advise the hon. member that the point he is raising is simply a point of debate which he will be able to put before the House in his contribution either later today or tomorrow.


Roch La Salle: Mr. Speaker, I want to say to the hon. member that the minister responsible told me last week that his officials were still negotiating this issue with the Quebec government and that he himself is still negotiating in order to arrive at some kind of solution. That is why I asked the minister to delay this increase as long as this dispute between the two levels of government remains unsettled. That is all I asked, Mr. Speaker.
The hon. member for Laval is appalled, but there is a certain uneasiness at this time. Just look at the situation on the political front and you will understand the reason for this uneasiness. However, Mr. Speaker, I have the impression that you are soon going to ask me to resume my seat, so I would simply like to conclude by saying that, as far as we are concerned, Mr. Speaker, that is not the way we intend to achieve national unity. We respect our opponents' positions. We never treat them as enemies simply because they do not think the same way we do, and our aim is not to divide Canadians in two tight clans, but to encourage them, despite their opposite views, to have mutual respect and a common love of the great country that we dream of rebuilding under the wise leadership of our leader, the Leader of the Opposition.


Francis Andrew Brewin: Mr. Speaker, I do not intend to cover all the aspects in this budget we are debating. What I want to do is to expose an outstanding example of a wasteful program, which, if it were cancelled, as it should, could save Canada and its taxpayers $2 billion at least.
Before I deal with that, however, I want to express a few general comments first. I accept the view put forward by my party that this budget does not adequately stimulate the economy or relieve Canada of its depressed economic conditions. To put the matter another way, unemployment will not improve. Indeed, if the prophesies of the U.S. lack of growth are fulfilled, the situation of unemployment in Canada may become a good deal worse. To my way of thinking, unemployment should have the highest priority of all. It should come first in any sound scheme of values in dealing with the economy. I am not thinking only of the economic waste of 1 million employable Canadians making no contribution to the growth and economic prosperity of the country. I am thinking also of the individuals, many of them in my constituency, who are living and will live frustrated lives, not having employment which is the economic base for individual well-being and a necessity to their sense of identity and success in life. I am thinking particularly of those many Canadian children whose lives may well be stunted by the apparent economic failure of their parents.
Why does the minister, who is clearly a man of compassion and intelligence, accept this situation? I can only attribute it to
[Mr.: No, M.J
the devotion of his party to private enterprise. Private enterprise, is not, cannot, and will not do the job or provide the jobs-


An hon. Member:: I thought you people were always talking about small business.


Francis Andrew Brewin: -and an industrial strategy in which both private and public enterprise, combined to provide full employment, is essential if we are not to drift on in our present unhappy situation. I have reason to think that the Conservatives would not do any better.


Mr. MacDonald (Cardigan):: That is right.


Francis Andrew Brewin: They equally pay obeisance to private business.
However, to get to the main thrust of what I have to say, we all know that we are in a time of stringency and restraint. Above all, waste in government and private expenditures must be ended. It is tragic that the most conspicuous example of such waste is entirely overlooked by the government. I refer to a matter discussed briefly this afternoon when the Minister of National Defence (Mr. Danson) made a statement concerning the proposed purchase of 130 to 150 fighter planes. Of course, defence and security are high priorities, but they are not sacrosanct. Defence expenditures must be scrutinized like any other expenditures, and firmly resisted if they are not necessary.
The purchase of these planes, we are told, is to cost roughly $2.3 billion in 1977 dollars. With continued inflation and the decline in the Canadian dollar, I would estimate that at least $3 billion is involved. This is by far the greatest expenditure on armaments made in this country in its history. By far the greatest expenditure is to be on manned interceptors to defend this country against a massive bomber attack by the U.S.S.R. Some part of the total no doubt, will be used for providing cover for ground troops in Europe under the provisions of NATO. Whatever may be said now, it is clear that by far the largest amount is to go to the so-called active North American defence.
I propose to show, Mr. Speaker, that these fighter planes are obsolete in the missile age. The essential task of anyone determining the distribution of defence dollars available is to weigh the importance and necessity of the proposed role for our military forces. The task is to weed out those roles not essential to the security of Canada and the stability of the world. There is ample evidence to suggest that fighter planes are not required on a substantial scale in any intelligent consideration of Canada's role. The reason for this is simple, namely, that the threat of a massive Russian attack by manned bombers is non-existent. The allocation of substantial Canadian funds for fighter planes in North America is an outstanding example of the wrong allocation of roles.
I well remember hearing more than ten years ago, in the parliamentary committee on national defence, two very distinguished Canadian soldiers, General Simonds and General Foulkes, who had risen to the top in active service during the
November 23, 1978

over the world. The need has been suggested in Namibia and in the Middle East; no doubt, other needs will arise. This contributes to the peace of the world, it is something Canada has shown it can do, and it is something we should be prepared to do. We are not against Canada taking a share of responsibility for military commitments, and it is essential that we arm our forces to fulfil these roles. But let us get away from commitment to expenditures that help nobody yet hang a vast debt around the necks of the Canadian people.
All of us are looking at the effects of the cuts that are being made. Many of those cutbacks are painful and unfortunate. We regret the effect they will have on such things as equalization payments, assistance programs, health and medicare. We regret that the cuts affecting the CBC will help destroy the high level of artistic endeavour and quality which has been built up. We object to the CIDA budget being frozen at the expense of those throughout the world who are most in need. We object to the cuts in loans for public housing. We object to the cutting back of forest research stations. There are many acts of this kind, inefficient and selected at random, though some of them are necessary. But let no one say that we in this party did not criticize them and offer alternatives. By all means let us strike out programs and expenditures which we need, to use common parlance, like a hole in the head. The axe must fall, perhaps, but let it fall on what we do not need, on what we could well do without. Let it fall on this unnecessary production of highly sophisticated aircraft whose capability, I believe it is safe to prophesy, will never be used at all. Let us get rid of fantasy and look at the world as it is, making the best contribution we can and minimizing those cutbacks which adversely affect the welfare of the poor, the development of productive resources and the artistic future of this country. Let us use sense about these things and not be swept away by the theory that defence expenditures are sacrosanct. Of course, some are necessary, but none of them are sacrosanct and when we are told by our allies in the United States that the manned bomber is no longer regarded as presenting any considerable risk,-it has been downgraded to almost nothing-why must we go ahead with a project of this kind that we do not need? Is it because we are committed to it, because we do not dare to say no to the military? I believe the military people are wise enough to recognize that it is only when they are doing something worthwhile that they earn the true respect of the people of this country. I hope they will earn that respect. Let us have the guts in our government to say no when no is the obvious answer.


Mr. F. A. Philbrook (Halton):: Thank you, Mr. Speaker, for the opportunity of taking part in the closing hours of this autumn budget debate-perhaps tonight I should call it a winter budget. I should like to congratulate the Minister of Finance (Mr. Chretien) on a budget which is appropriate and responsible. [DOT]


An hon. Member:: Why?
The Budget-Mr. Philbrook


Frank A. Philbrook: It is nice to hear from one of the new members opposite. His interjection was typical. I point out that I have been attentive and quiet while members of his party have spoken, and I am sure he will afford me the same courtesy. This budget has been called many things in the last few days. It has been called a pro-business budget, and I for one do not apologize for that. I think private business and industry are the most capable of bringing about a healthy economy and a better life for all Canadians.
I would also like to congratulate some of the new members who have spoken in the House. One has been my colleague, the hon. member for Westmount (Mr. Johnston). Another has been the hon. member for Ottawa Centre (Mr. de Cotret). Both those hon. members made very fine maiden speeches.


Some hon. Members:: Hear, hear!


Frank A. Philbrook: Of course, they were based on their own points of view. I would like to say a word of thanks to the official opposition for recognizing some positive features in this budget. I think that is a step in the right direction.
Political parties still have far to go in that direction, but that recognition is certainly better than nothing.
In my speech tonight I would like to deal with positive public reaction to this budget. I will also deal with some complaints which have come in from my constituency. I want to make a few general remarks on budgets and then deal with the general economic picture which provides a context for this or any other budget. I know that my hon. colleagues opposite will understand and forgive me if I quote some of the positive remarks which have been made in reaction to this budget. The proof of the pudding for any budget is found a few weeks or months down the road, but in the meantime we can learn a great deal from the important sectors of our society. Their reactions are articulate, and they tend to be accepted as non-partisan. For example, Mr. Sam Hughes, executive director of the Canadian Chamber of Commerce, said:
It's a sensible and responsible budget, and he has avoided going political.
Mr. Chretien apparently listened to bankers and economists who urged him to refrain from over-stimulating the economy.
He could easily have been much more stimulative but has chosen the more practical route.
A spokesperson for the Canadian Federation of Independent Business said:
We're delighted. It's a masterful job.
We're particularly happy with the special 25 per cent research and development tax credit for small businesses.
Mr. William Small, president of the Housing and Urban Development Association of Canada, said:
The government's decision to extend for another year the capital cost allowance for multi-residential building construction will be helpful.
Mr. Erik Nilsson, not our distinguished colleague opposite but an economist with the Canadian Manufacturers' Association, said:
It was basically a good budget.
Chretien didn't have much leeway, but we're pleased he didn't fly in the face of economic realities and introduce a program of massive stimulation.
80067-20 V2

November 23, 1978
The Budget-Mr. Philbrook
The CMA has recommended the R and D incentives and improvements in investment tax credits.
Peter J. Dawes, foreign trade director of the Canadian Importers Association, said:
We are generally pleased and particularly happy with the federal sales tax cut, which we expect our members and the Canadian importing community generally to respond to and pass along with future shipments to Canadian consumers.
That has been a point of concern. He went on to say:
We're pleased to note the minister's reaffirmation of its commitment to General Agreement on Tariffs and Trade negotiations and of course we're delighted that the tariffs remain unchanged for the present.
The commitment referred to was the commitment of the government.
Mr. Reg Ryan, president of the Mortgage Insurance Company of Canada, said:
It is important to take an over-all view of what Chretien was trying to do.
We have to endure some more pain before we get back to the days of low inflation and low interest rates.
It showed some restraint and some stimulation without going too far in either direction.
Mr. Cliff Bulmer, secretary of the Council of Ontario Contractors, said:
It will allow developers to write off the carrying cost of unused land, which may have the effect of encouraging developers to order builders to build because it will keep their costs a bit lower.
Mr. H. J. M. Watson, comptroller, Steel Company of Canada, said:
Chretien has provided some stimulus, but we as a country have got to bite the bullet a little harder to reduce the deficit.
It will benefit the steel industry from the cut in the sales tax, investment credits, and unemployment insurance cuts.
From my home town of Oakville, Mr. Ron Bennett, president of Ford of Canada, said:
Wc welcome the reduction in sales tax, and this together with the cumulative effect of the other measures taken, will contribute to a sustained growth in vehicle sales and the economy in general.
Since the budget, we know that both Ford and GM have announced average $150 car price cuts.
Mr. Russell E. Harrison, chairman of the Canadian Imperial Bank of Commerce, said:
In view of Canada's complex economic problems, I expect it will be mildly stimulative, which is essential if it results in increased over-all production, through the economic stimulus provided by the appropriate tax reductions.
From the very important province of Ontario, treasurer Frank Miller was reported to be pleased by what he considers a private sector budget, with special incentives for manufacturing industries and positive steps such as the 3 per cent reduction in the federal manufacturing sales tax, added encouragement to research and development and enhanced investment tax credits. Mr. Miller considered this budget a private sector budget. I also mentioned that, and proudly, at the beginning of my speech.
Mr. Miller said that the reduced sales tax and the research and development incentives will make manufacturing more profitable and more attractive to new investment, and that

that means the creation of new jobs. He said that the reduced sales tax will make Ontario more competitive with the northern United States.
Several economists reacted in a positive way to the budget. Two were Mr. Douglas Peters, chief economist of the Toronto-Dominion Bank and Mr. Ben Gestrin of the Canadian Imperial Bank of Commerce. Judith Maxwell, who I believe is no stranger to the Leader of the Opposition (Mr. Clark), endorsed the budget and said:
He has used all the room that's available to him to stimulate the economy.
That is a remark with which we agree, but it is sometimes greeted with strange reactions when we say it. Economic investment houses like Pitfield, Mackay, Ross and Nesbitt, Thomson, Bongard saw other things in this budget, according to their comments. One comment was that costs and inflation will be relieved by tax cuts and unemployment insurance reductions. Another was that investment and manufacturing expansion will be aided by the investment tax credits.
Another was that it is difficult to affect unemployment directly overnight. Another was that expansion is up to Germany and Japan, not Canada.
There has been some favourable reaction from the general media. Mr. W. A. Wilson of the Ottawa Journal, a distinguished journalist and political analyst, reflected on the budget.


Mr. Friesen:: A good friend.


Frank A. Philbrook: The Ottawa Journal is not usually considered a Liberal newspaper. With regard to restraint, Mr. Wilson said:
The budget's tax changes can be defended in good conscience.
He acted with restraint and despite all the howls of disappointment that have followed, a large increase in the deficit would have been contrary to the public interest.
On inflation he said:
There has been some post-budget scepticism about Mr. Chretien's optimism over inflation, but he is by no means alone in this outlook.
On growth, Mr. Wilson said:
The problem of estimating next year's growth with any accuracy is, however, complex and difficult because conditions in this country will inevitably be affected by American developments.
Coming from Mr. Wilson, it is hard to interpret that as an alibi. On stimulation he said:
The budget contains other devices aimed at stimulating investment so the government's emphasis remains what it must be: that an increase in business investment is essential to this country's health.
I emphasize the word "remains".
In the latest edition of Maclean's magazine, Ian Urquart covered essentially what the minister covered. He said:
On the evidence of the first day following the budget, he won that gamble as the dollar did not merely hold its own, but actually picked up a bit.
Its value rose to above 85 cents American. How did he do this? According to Ian Urquart:
November 23, 1978

war, stating that a manned U.S.S.R. bomber over North America would only be possible if the Russians were crazy. They said, that of course, this is not the case.
As I said, we live in a missile age. A manned bomber attack would involve a couple of hours' transport from bases in Europe or the U.S.S.R. to North America. The important thing is the means of detection. If the attack were detected a matter of hours before it actually happened, targets in the American strategic arsenal would be removed and the defence prepared. Suppose, however, that the Russians did attempt a first strike. They have not now, and are not likely to have in the near future, the means of destroying the American retaliatory power. Swift retribution destroying the U.S.S.R. as a civilized community would follow even a successful first strike. A first strike capability cannot prevent a retaliatory attack in which all the cities of the U.S.S.R., and the strategic bases would be wiped out. This has been recognized both in the United States and the U.S.S.R.
Brian Cuthbertson, writing in "Canadian Military Independence in the Age of the Superpower," published in Toronto in 1977, says, at page 81:
-it appears fairly certain that Soviet strategy sees only a small role for the long-range bomber and for the U.S. anti-bomber defence has become a strategically redundant role.
That is really saying in round-about language what I have been trying to say. It is a waste of money because it has no purpose from the military point of view. He goes on to say that the United States plans to reduce its present 405 interceptors to 212 F-106s by the mid-1980s. At page 87, he refers to the strategic redundancy of anti-bomber defence. [DOT]
Mr. James Schlesinger, who was the United States Secretary for Defence, visited Ottawa in September, 1975. That was for the express purpose of consulting about Canada's role in the alliance. He saw the then minister of National Defence, the hon. member for Winnipeg South (Mr. Richardson), and the Prime Minister (Mr. Trudeau).
According to the report which I have, dated September 27, 1975, he played down the Soviet bomb threat and urged Canada instead to beef up its forces and equipment in Europe. To use his own words, well equipped ground forces in Europe would be the most illustrious contribution Canada could make to western security.
In 1977, Mr. Cuthbertson wrote about the weaknesses of NORAD in the following words. He referred to the vulnerability of its installation to destruction by missiles, its poor capability in the detection of low level flights and lack of capability against bombers launching missiles outside the interceptor range.
These circumstances demonstrate that the defence of North America depends upon maintenance by the United States of a retaliatory force, either in fixed sites, ICBMs, which may become vulnerable-they have not yet, but they may-or in submarines equipped with missiles which are not now, and are
The Budget-Mr. Brewin
not likely in the foreseeable future, to become vulnerable. This submarine-based force exists and is not likely to be substantially reduced by technical changes for many years to come.
It is suggested by some that the Russian development of the backfire bomber has changed all this. The Russians presently have 50 backfire bombers in commission, according to the International Institute of Strategic Studies Military Balance for 1978-79. That is not a great many.
They lack intercontinental range, but with a compatible tanker force can be refueled in flight. It would not be correct or fair to say they could not reach North America directly. They are also capable of flying below radar detection. Cuthbertson suggests that when employed with a tanker force, they would have a "peripheral role". However that may be, there are two main defences: the first is the same as the defence against any manned bomber, namely the impossibility of destroying an effective retaliatory force and therefore the assurance that the use of such bombers would provoke a retaliation which would destroy the U.S.S.R. as a functioning society. The second is that efforts could be made to improve the detection capacity of defence forces in North America.
It is sometimes said that Canada's commitments under NORAD, while strategically useless, are justifiable on political grounds. When this question of the political grounds is pressed, it appears that the political ground is the view that the United States desires the continuing of NORAD and of the Canadian contribution to a fighter anti-bomber.
There is no evidence to support this. Indeed, the view expressed by Mr. Schlesinger is exactly the opposite of this, as is the down-grading of the American interceptors to a secondary role.
When pressed for positive evidence, neither the former minister of National Defence nor the present President of Privy Council (Mr. MacEachen), who was then Secretary of State for External Affairs, could give any basis whatever for their statement that the United States was anxious that the NORAD arrangement be continued. Indeed, the former minister of National Defence in the committee or. external affairs, said that his belief was based on a conversation with an unnamed person at NATO and was not supported by any documents or evidence whatsoever. The same is true of the similar claim asserted by the then Secretary of State for External Affairs, now President of Privy Council. It would indeed be a strange surrender of Canadian judgment if we were to be governed in our views of policy by a non-existent, non-proven political view that the United States desired Canada to maintain this role, in view of their own actions and their own words and the clear indication that an anti-bomber is strategically redundant in their eyes.
It is to be noted that I have concentrated my remarks on the defence of North America and not on the need for air protection for our troops committed under NATO in Europe. We, in this party, fully recognize that whatever we may think of NATO, Canada is committed and Canadian troops are committed to that theatre. We must give them all necessary support. However, it does not appear that what is needed to strengthen NATO is a provision of sophisticated fighters by
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Canada. Indeed, Mr. Schlesinger's statement, which I quoted, is to the contrary.
One could only wish that Canadian military plans were not based upon obsolete and outmoded concepts, but upon new developments. There are highly important new developments taking place in military concepts and weaponry which affect NATO and Canada. I refer to the "smart" bombs, which is a nickname for what are more accurately described as precision guided weapons, which use lasers to secure an infinitely more accurate means of hitting targets, promise revolutionary changes. Throughout the course of military history, very few weapons actually hit the targets. These new precision-guided weapons will, in fact, hit the targets.
They can be used with light portable weapons with greater accuracy and are effective anti-tank and anti-battlefield aircraft weapons. They enhance defence and strengthen the position of smaller powers.
There is still much development required before "smart" bombs are in general use but they promise the strengthening of defence, and such defensive alliances as NATO making more important the individual contribution of trained men. They may indeed represent a sharpening of the distinction between nuclear and non-nuclear weapons.
Haziness of distinction in this field is one of the greater dangers of war developing into an all-out nuclear holocaust. It would be a happy change if proposals for Canadian expenditures were imaginative and looked forward, rather than proposing the substitution in obsolete roles of more obsolete weaponry.
In the Scientific American of October, 1978, there is an interesting discussion on precision-guided weapons, and there is an Adelphi Paper published by the Institute of Strategic Studies in 1975 by James Digby of the Rand Corporation spelling out in some detail the implications of the PGM.
There is one good ground for questioning the proposed expenditure on the acquisition of fighter interceptor plans, and that is that it has never been clearly explained. The whole process of seeking these replacements has been shrouded in secrecy. It is not enough for the Minister of National Defence to say that these planes contribute to our national security. Such a statement begs the question. Nor can it be said that they are demanded by our commitment to NORAD or NATO. Both of these treaties leave to individual member countries the decision as to the nature of their contribution.
In the debate in the United States Senate on the neutron bomb, Senator Clark set out the Senate approach as follows:
Any program with respect to nuclear armaments shall include a complete statement analysing the impact. The requirement of an arms impact statement is fully justified for it demands of the executive a thoughtful and reasoned analysis of the over-all significance of the weapon under consideration.
Senator Clark added:
The requirements of the law are clear; before we appropriate money for a system, we must know what the system will do; we must have this statement; the lack of this alone justifies withholding Senate approval at this time.

Not only has this House not received any such impact statement related to these proposed purchases, but we are told a new white paper on defence is on the way. If I understood the minister today, they are too busy at present to get out a white paper, so what we are doing is this-we are putting the cart before the horse, we are getting the weapons and then deciding on a policy to fit them, rather than deciding on a policy and then acquiring the necessary equipment. So the minister is doing precisely the reverse of what he should be doing. The minister emphasized the advantages to Canada of providing "offsets" by the employment of Canadian resources and the development of Canadian technology. Others will no doubt do the same thing. This, it is said, will be followed by other advantages. Offsets are the amounts of money which will be spent by those who sell the planes to employ Canadian labour and technology. This is supposed to provide considerable advances in Canadian technology. The argument is without substantiation. At the present time the aircraft industry is extremely buoyant and the effects of further purchases in this field will be highly inflationary.
There is a very good article by Mr. Sheppard, the Executive Director for the Science Council, which appeared in the Globe and Mail of October 2, in the course of which the author stated:
The answer ought to lie in the transfer to other sectors of Canadian industry, technologies critical to our future competitiveness in commercial markets, for instance in energy products, automobile parts, communications equipment, transportation and computer equipment.
We are not objecting to spending money on improving Canadian technology. What we wonder is whether it is necessary to improve technology to supply weapons systems to countries which are already, in the global insanity of the day, spending $400 billion a year on armaments which, if they were ever used, would destroy us all and which, if they are not used, will suck up the resources, both material and monetary, of the whole world so that the pressing problems of mankind cannot be met. There is no need for us to contribute to this madness. My plea to the government has nothing to do with a choice between various suppliers of aircraft. We do not care whether there are three, four or ten possible suppliers. My plea is that we look carefully at the question of the basic need for what we would be committing ourselves to buying if the government goes through with its plan.
The first decision to be made is whether we should proceed with the purchase of fighter planes at all. I know there have been verbal commitments, that promises have been made, that there have been talks about all this, but there is no firm commitment at the moment, there is still room for the government to use a little common sense and change its attitude toward the whole thing. There are many roles of great importance that Canada has to play in the military field. One of them, of course, is the protection of our sovereignty by providing surveillance of our air space. Another is to build the naval craft necessary to protect our sovereignty over our territorial waters and, incidentally, to protect our fishing industry from depredation by fishermen of other countries. Lastly, there is a continuing need for Canada to supply peacekeeping forces all
November 23, 1978

He cut both the prices and taxes, and plugged loopholes. Chretien decided to hang tough rather than give in to opposition demands for deductibility of mortgage interest payments, massive spending on housing and transportation, or any vote-grabbing gimmickery.
Something even bigger is happening for manufacturing, the government's industrial strategy program through the federal-provincial conferences.
The GATT meetings also have an important bearing.
Now we are starting to get the general background to this budget. In the Financial Times it was said that this is a "non-political budget" and, to its credit, "not dramatically stimulative." It goes on to say:
But a major upturn is just around the corner. Let the recovery take place of its own momentum, helping it along very gently, and not attempting any measures that might diminish business confidence or put increased pressure on the dollar.
Chretien and his advisers are pinning their main hopes for improved performance on forces already at play in the economy; the devalued dollar, controlled iabour costs and increased corporate investment plans.
One of the key aspects of this budget is the background economy against which it is set. The Financial Times describes two reasons for the budget at this time as it plays its small part in the whole economic picture. They are, first, an accounting of the August announcements made by the Prime Minister (Mr. Trudeau) and, secondly, some useful measures which are better than nothing.
In terms of positive community reaction, it has come from the various business associations, such as the chamber, small business, CFIB, the CMA, and the CIA. We have had a positive reaction from the area of construction and housing such as HUDAC, the mortgage associations and the Ontario Construction Association. Other positive reactions have come from such sectors of our economy as steel, Stelco; automobile manufacturers, such as Ford, and banks, such as the Bank of Commerce and the Toronto-Dominion Bank. There has also been a good reaction from some of the provinces, including my home province, Ontario, one of the key provinces in our economy. We have had good reactions from various economists and from the media. It is a fair cross section of the Canadian community.
There are always complaints. There are two or three areas where I would like to see improvements, and I would like to mention them, in the hope that the government will perhaps take a look at them to see if something can be done. One area was mentioned earlier today, that is automobile sales. Many automobile dealers are stuck with cars on their lots which will be more expensive than the new ones because they were purchased before the manufacturers' sales tax was reduced from 12 per cent to 9 per cent. Perhaps it could be written off as the luck of the game, because we did not hear from the car dealers in the spring when the provincial sales tax cut took place. We heard from the consumers then because they were the ones who lost out by buying one day early. However, it amounts to a lot of money to these dealers, and apparently there are precedents where the government has provided rebates, I believe, in the years 1958 and 1974.
There is also concern in the area of personal service corporations. Here the special rate of tax was provided for small
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businesses in manufacturing, not services. It was provided for small Canadian businesses competing against large foreign owned ones. It does not apply to athletes or entertainers who have incorporated and have had the advantage of low tax rates. However, there are concerns from people providing services who are incorporated, such as people in consulting, various kinds of management services, and perhaps development services. People in these areas can put up the argument that they are providing something valuable for the country and the economy. Certainly they are providing employment which may be reduced if they have to scrap their small corporation. Perhaps we have cast the net a bit too wide and some adjustment could be made there.
Another area of concern, a matter which is held over from the April budget, is the area of RRSPs. The minister was good enough to take care of the problem of child dependants whose father and mother are killed at the same time. According to the information I have received, there still remains the problem of widows who are under age 60 who cannot afford to transfer their husband's RRSP into some other plan or annuity upon his death. These widows need the cash to live, but they cannot afford to pay income tax on it. They are in a very poor financial situation, and it is aggravated when they see civil servants able to retire at an unusually young age. The widow, however, is held to age 60 on this particular benefit.
One of the difficulties for the public is understanding budgets. I think that the media provides good coverage for the public if they will use it and refer to post budget developments to point out adjustments which should be made. The limitation of a budget is that it is supposed to provide a few specific changes, but things do vary from time to time, and it may not necessarily be the same type of thing each time. For example, in one case it may have an effect on the general economy through what economists call macroeconomics, and at another time it may be individual benefits or microeconomics. In some cases it can even be a combination of both.
It is all part of the ongoing process built up through previous budgets and other major programs which influence the economy. For example, perhaps even more important than this budget, are the GATT negotiations presently going on in Europe which will affect our trade for a long time to come and have an effect on all levels of government. Another influence would be federal-provincial conferences, such as the one coming up. It is an important area of industrial strategy. I think all parties agree that it would be beneficial to have an industrial strategy. The only question is, how do we get there? I think at the present time there are some very exciting happenings which are the outcome of our federal-provincial conference on the economy. We had one in February and another one is coming up soon.
One of the main programs coming from that conference was a study of our industry and a positive basis for long-range planning. It was a study, in the first instance, of 23 sectors of the economy, and leading from that, there was a more select

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group which produced the so-called "Tier 2" report. This is one of the most exciting and important developments of our time. I hope it will produce concrete results that we can all support.
I spoke last week at a conference in this regard and found that the people there, our fellow Canadians, were tuned into the subject and looking forward to things happening. We have something very worthwhile on which to work in this regard and we will see more come from that in the next week or so, right here in Ottawa.
Finally, as I said, I think sometimes that a budget can be disappointing as a result of it being overrated. It may be important in itself but when thought of in terms of being a panacea for everything, including our economic concerns particularly, it may be disappointing because it is cast in the wrong role.
There is a great deal going on at the present time and a more general positive economic outlook developing. We have seen many positive economic statements regarding the near future made by people such as Mr. Earle McLaughlin, chairman of the Royal Bank of Canada, and Mr. Andrew Kniewasser of the Investment Dealers' Association of Canada. He spoke here in Ottawa recently, claiming that the 1980s will be the best decade in Canadian history. This was documented by John Bullock, the head of the small businesses group, CFIB. We have seen positive results from the new computer wonder, Trendicator of the Canadian Imperial Bank of Commerce, as well as from statements in the Financial Times to the effect that the 1980s will see a return to economic stability. I hope that is the case. There have been many other positive reports, such as the one in the Globe and Mail which said that a nationwide gain will be seen for domestic growth in 1979. We have seen all of these generally positive predictions for the near future in respect of the Canadian economy.
Certain writers, like Jack McArthur and Anthony Westell of the Toronto Star, and James Reston of the New York Times, have been pleading for people to look on the brighter side, and questioning the gloom and doom which has been with us for far too long.
There are other more specific signs of better days ahead. For example, after tax profits have been reported to be up by 31.9 per cent in the third quarter of this year; the August consumer price index was up only 0.1 per cent, the smallest rise since 1975; consumer buying and confidence is reported to be up, according to the Conference Board; there is no surge in wages in major contracts this year; higher production and employment is predicted for 1979 by the Conference Board; farm cash receipts jumped 14.3 per cent in the past year; and there is a general belief that the lower dollar means more jobs, and that it is working, in fact, in terms of increased trade, increased exports and increased industrial activity.
In terms of the important area of business expansion, there has been more investment, more expansion and more production. Recently we had the very good news that business spending in this country will probably double next year to a

rate of increase of 16.2 per cent, and also that next year United States companies intend to increase their investment in Canada. We have heard the news that manufacturers expect production levels to increase in the fourth quarter. In addition to generally improved economic outlook and plans for expansion, there is this important area of trade which, as I just said, has been undoubtedly stimulated by our lower dollar, and the predictions in this regard also are good.
Our trade surplus may be as high as $4 billion this year, up again, and apparently our trade performance for next year would indicate a bright picture. Again, in a general way, predictions for the 1980s indicate that our trading position will strengthen.
We have a reasonable budget here, and again I believe the minister deserves credit. The budget should be seen in perspective for what it is and what it cannot be. It should be seen against the background of a great deal of other economic events and activities which will make a very positive difference for this country.
In concluding may I say that I know everyone would wish the same as I do, namely that the federal-provincial economic conference coming up in the next week will be very successful and will provide another step forward, just as I believe this budget has. Thank you very much, Mr. Speaker.


The Acting Speaker (Mr. Turner):: I recognize now the hon. member for Halifax-East Hants (Mr. Crosby) and I should like to remind hon. members that this is that hon. member's maiden speech.


Some hon. Members:: Hear, hear!


Mr. Howard Crosby (Halifax-East Hants):: Mr. Speaker, it is an honour and a privilege for me to participate in this budget debate and, with your indulgence, I shall make some remarks of a more general character relating to the economic state of the nation.
First, let me express to you the compliments and good wishes of the people of Halifax-East Hants, and may I ask that you express my greetings and best wishes to His Excellency, the Governor General, and his lady.
It is not difficult to bring to this assembly the views of my constituents on our economic problems. Time and time again during the recent by-election campaign the concern of the people for the financial and fiscal future of this country was brought forcefully and emphatically to my attention. Make no mistake about it, the state of the economy is the number one issue in Halifax-East Hants, and I suspect it is the number one issue in the great majority of constituencies across this country.
In rising to speak in this chamber, hon. members may be interested to know that I follow belatedly in the footsteps of my grandfather. He was elected to this House over 70 years ago along with Sir Robert Borden as a dual member for Halifax.
Before making some remarks on the subject of the economy and other aspects of the budget I should like to comment very
November 23, 1978

briefly on my constituency and on some of those who have represented Halifax-East Hants and Nova Scotia in this chamber and elsewhere.
All hon. members of this House are well aware of the importance of the contribution made by yourself and your confreres in the chair. As it happens, the hon. member whom I have succeeded has made the same important contribution as Deputy Speaker. In addition, for many years he served his constituents and all Nova Scotians in parliament in matters of special concern to them. Judge Robert McCleave, whom I succeed, was a long-time member of this House and an articulate and effective representative. It is apparent he was as much admired in this chamber as he was in Halifax-East Hants.


Some hon. Members:: Hear, hear!


Howard Edward Crosby: Let me record the admiration I hold for Judge McCleave. I know the same sentiment is held by all his former constituents.
I would like to mention how honoured I feel at taking my seat in this House in the presence of the hon. member for Halifax (Mr. Stanfield) and the right hon. member for Prince Albert (Mr. Diefenbaker). Again I want to record the respect and admiration I hold for those hon. gentlemen. I was engaged in the public service of Nova Scotia during the early years of the administration of that province by the former Leader of the Opposition. Recently he celebrated his 30th year in government and in public service. Not only Nova Scotians, but all Canadians have benefited from his dedicated service over the years as premier of Nova Scotia and as the national leader of the official opposition. The reverence and respect with which the right hon. member for Prince Albert is held by Nova Scotians has not diminished in the years since he first held office as prime minister. When the right hon. member speaks, Mr. Speaker, I can assure you that Nova Scotians listen and will continue to listen.
My references to Nova Scotia prompt me to mention that we now have in the province a new administration. The new government, headed by Premier John Buchanan, took office in October of this year. I have said on many occasions, and I repeat in this House, that Premier Buchanan will follow in the footsteps of the right hon. member for Prince Albert and the hon. member for Halifax (Mr. Stanfield) in providing leadership that is responsible and that is concerned. That is what I believe all Canadians expect of government today: they expect responsibility in the management of the nation's financial matters, responsibility in the administration of the affairs of state, and they expect those who govern to be concerned with the lives and the legitimate pursuits of all Canadians.
And so we should ask ourselves whether and to what extent the government and hon. members opposite have demonstrated responsibility and concern in this budget and in the other affairs of government. First, my thoughts extend not only to the constituency that I represent, but to my province and the
The Budget-Mr. Crosby
Atlantic region as well as to Canada. It is a fact well known, and often recorded in the debates in this House, that Nova Scotia and Atlantic Canada have not prospered in the passage of time since confederation. Nonetheless, the loyalty of the Atlantic people to confederation and to the sovereign lady who heads our state is unwavering and undiminished. Our loyalty will continue, whatever events the future holds. We are proud to be Nova Scotians, but we are equally proud to be Canadians, and we will never change. There is no support in my area for any policy or stratagem for our nation that does not embrace one Canada and our sovereign, the Queen.


Some hon. Members:: Hear, hear!


Howard Edward Crosby: Nonetheless, Mr. Speaker, the economic forces that are present in our confederation demand review and reassessment. Halifax-East Hants, like many areas of Nova Scotia and Atlantic Canada, does not have an assured economic base. This leads to an economic psychology in which hope for the future is often drowned in despair.
Historically, Canada has developed into regions which have been differently defined, but always on the basis of provincial boundaries. Over the past number of years, those who attempted to define the regions of Canada nearly always join the four most easterly provinces as the Atlantic region. Regardless of the measure used to determine the economic state of the regions, be it per capita income, employment or unemployment, or population and growth, the Atlantic region always comes out at the bottom of the scale. Needless to say, Ontario always comes out on top, although the areas to the west now challenge the economic superiority of central Canada.
What has developed from a comparison of the regions of Canada, however defined and whatever the measurement device, is the concept of regional disparity. What is more important is the question whether the federal government and the provincial administrations will recognize that we must move from a state of economic disparity to a state of economic equality.
The movement from disparity to equality is not an easy goal to reach. Some would regard it as improbable, if not impossible. To date, despite federal programs and provincial cooperation, there is no real evidence of progress toward economic equality across Canada in income, employment or opportunity.
Many knowledgeable people, particularly in the academic field, will contend that unless we resolve the problem of regional economic disparity and create equality in Canada, we will live with the possibility of national disintegration. I for one do not believe that this nation will disintegrate for economic or any other reasons, but I do believe the spirit of Canada can be so adversely affected by our economic state that, while we will not die as a nation, we will not obtain the quality of national life that we ought to enjoy as Canadians.
While all hon. members are bombarded on a daily basis with statistics respecting income levels, unemployment rates and other economic indicators, I think, Mr. Speaker, you will permit me to remind you that residents of Atlantic Canada

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suffer an income level not much more than half the income level in Ontario. And the rate of unemployment in some provinces is twice that of provinces with high levels of employment.
National unity has become a key phrase to support a great rush of government sponsored activities. Expensive brochures and materials are dealt out to schools, exchange visits are arranged, programs are erected and disbanded, new policies are formulated and then abandoned, institutions are established and then collapsed, services are implemented and then terminated-all in the name of national unity.
If there is a real concern, Mr. Speaker, with national unity, and if there is a real belief in the danger of national disintegration, then I believe the government should sponsor and implement a national assault on disparities of income and employment. These differences arise out of the structure and history of the Canadian economy and have led to the regional disparity suffered by Atlantic Canada.
If we cannot have an all-out national assault on regional disparity, then at least we can have a national strategy designed to reduce, if not to eliminate, those disparities in income, employment and opportunity. We cannot simply redistribute existing economic activity. Transfer payments and grants are not enough.
Any national strategy must locate and foster new opportunities, new sources of capital and new entrepreneurs. We must combine our strength in natural resources with capital investment and managerial and technical capability. The new strategy must embrace a new natural resource policy, a research and development program, and public support for enterprise that will create consumer products from our resources.
There is nothing, Mr. Speaker, in the budget that even remotely indicates a move toward a new national strategy designed to eliminate the disparities that exist between the regions of Canada. In fact, we have been told that the transfer payments intended to equalize services or correct deficiences will be reduced. In the result, Atlantic Canada cannot look to the future with great expectations of a changing economy, and that is my first and foremost criticism of the budget. I will not even mention, Mr. Speaker, the failure adequately to support the revitalized fishing industry, because I know my colleague from South Shore (Mr. Crouse) will speak to that.
I mentioned my grandfather and the fact that he was a member of this House. I should mention that he also held a seat in the other place for several years. I was interested in what he might have said during his term in office, possibly in the hope that he might have uttered something more profound that I am likely to offer. In reviewing the debates of more than 50 years ago, I was struck by the timelessness of the interchange. While I found nothing especially profound or prophetic, I discovered that the matter of national unity was, then as now, the preoccupation of many. What my grandfather said on this matter over 60 years ago is a very simple statement but is still apt today. He said, that the great trouble we have in this country is misunderstanding, that we do not know each other

well enough, that we do not mix and that we do not get together.
I am confident, Mr. Speaker, that good faith, common sense and mutual respect can resolve the differences between us once we know and understand the problem. In this as in all other matters government must be fair but it must be firm.
My second area of concern in relation to the budget and economic matters is the plight of the young persons in my constituency and in my province. Mr. Speaker, there is no greater despair in a nation that embraces the work ethic than to enter the employment market for the first time and find no job waiting.
The many universities, technical institutes and other educational facilities in Nova Scotia train and graduate an increasingly larger number of young people qualified in professions, technical occupations and trades. These young Nova Scotians cannot put education and training to use in their home province or elsewhere in Atlantic Canada. It is not uncommon for university graduates to work as waiters and waitresses or as sales clerks.
You will not convince these young people there are no solutions to these problems. They believe, and I believe, that a greater effort can-and must-be made. It is prudent to warn those who do not regard the legitimate demands of our young people that about one-third of the voters at the next general election will be in the 18 to 25 age bracket.
While age and experience have a value that is recognized by all, youth and enthusiasm cannot be discounted as a national asset. It is trite to say that the future of this nation is in the hands of the young people, but how many listen to their demands? I suspect those who do not listen to the young will not survive to govern the people.
What does the standard of living enjoyed by most Canadians embrace? I heard hon. members opposite and other supporters of the government decry and debase the proposal to permit tax relief for mortgage interest payments. They say this is pandering to the rich. They say we are neglecting the poor people and the less fortunate, that their numbers are so great they will rise up and strike us down.
I cannot speak for the great constituencies in central Canada in which home ownership is apparently reserved for the rich and powerful, but I can say this for myself and for my constituency-I believe, and have always believed, that every working Canadian should have the opportunity and the financial capability to acquire, in his or her lifetime, some form of home ownership. I believe that the national government should, to the extent possible, assist Canadians in reaching that goal.
While I am on the subject of young people and young Canadians, let me say, Mr. Speaker, that I was one of those who sat in the House and listened to the remarks of the Minister of State for Small Business (Mr. Abbott) in defence of the budget. What he said, Mr. Speaker, is recorded in
November 23, 1978

Hansard but I take his point to be that the hon. Leader of the Opposition (Mr. Clark), in his opinion, is too young, too youthful, a mere child, and not of sufficient status to form a government. Mr. Speaker, the Leader of the Opposition will be 40 next June. I can say from my personal experience and observation, being beyond that milestone, that the law of diminishing returns sets in well before that date. With the greatest respect to the hon. minister, I can think of no better age for a person to take over the office of prime minister than the magic mark of 40.
Mr. Speaker, I had the honour in Nova Scotia of establishing the first province-wide legal aid program. I did so with the help and support of a dedicated group of young lawyers who were full-time employees of the program.
My experience with those young people taught me many things but, most important, it taught me this: the young people of my province and of Canada are ready, willing and able to respond to the challenges of the day. The hon. member opposite will never convince me a man of forty is too young to govern.
If I may, Mr. Speaker, I should like to describe to hon. members very briefly my constituency of Halifax-East Hants so that I may describe the budget and the performance of the government from that perspective. The Halifax county portion of the new constituency contains two of the fastest growing communities in Nova Scotia; I refer to Sackville and to Bedford. The residents of these communities have shown active and dedicated interest in the development of their areas. Before much more time passes, I expect that these communities will attain town status and may even become cities. In any event, because of the dedication and work of those concerned citizens in each community, I know these areas will become models of good urban development. Certainly, I will do all I can to assist them.
There are other equally progressive communities in my constituency which stretches from the Atlantic ocean near the famed Peggy's Cove to Cobequid Bay on the Fundy Shore. We have typical Nova Scotian rural life in East Hants county and we have the finest of residential suburbs in the city of Halifax area. I am proud to say that the new premier of Nova Scotia is an elector in Halifax-East Hants. I know the support I received from his provincial constituency of Halifax-Atlantic, and I want to record my thanks to the residents of that area and to all the electors of Halifax-East Hants for electing me as their parliamentary representative.
I have spoken, Mr. Speaker, of problems of regional disparity and their resolution and I mentioned my special concern for and interest in the young people of Canada. For my own constituency, let me say this: this budget offers nothing new and nothing progressive and nothing that will change our situation.
The tax benefits are not the kind that will filter down to the market place in such a way that economic activity will be generated. In terms of buying power, the amounts involved will not alter the life-style which already is below the standard of
The Budget-Mr. Crosby
the national average. I believe the gulf will be widened rather than reduced.
What we require, Mr. Speaker, as I have said, is a national strategy and a national assault on disparity. Failing that, we, in the Atlantic region, require more direct aid and assistance. It might be said that this kind of help is available through the Department of Regional Economic Expansion. As many know, DREE is the successor to a long line of government institutions designed to help the maritimes. I well remember the great hopes we had for the Atlantic Development Board. Unlike that misadventure, I think DREE, as a legitimate department of the government, can help.
It must be remembered that government departments are designed to perform functions. DREE's activity is geographical-it cannot assist the areas it is intended to aid if functional decisions are made in the Department of Transport, the Department of Public Works, the Department of Industry, Trade and Commerce and other departments which destroy the programs designed to benefit deprived regions. Dree must be given a better foundation and a stronger voice in government decision-making if it expects to accomplish its aims. There is no evidence that the government intends to change its ways in that regard.
Hon. members opposite may say: you want us to cut back on government spending and yet provide assistance to your region. Can that be done, Mr. Speaker? I say it can.
First, you must cut back on government spending in functional areas and in regions where it is not essential to generate activity. You cannot cut spending in the Atlantic region because you will end up spending more on welfare and unproductive benefits than you save on cuts.
Second, one must examine the kind of expenditures that are being made and assess the economic value of the expense. There is no member of this House, and, I suspect, not one Canadian, who cannot catalogue many items of unnecessary and useless government spending. If these funds were redirected to economic development, the Atlantic area would prosper.
I am not forgetting the vast amounts required for Petro-Canada, Nordair and other ventures.
I do not want to end on a pessimistic note. There is hope for Halifax-East Hants and Atlantic Canada. That hope is a new government which will look more kindly on us and move to correct the imbalance and disparity which now exists.
I said earlier, the Leader of the Opposition will celebrate his fortieth birthday on June 5, 1979. If our electors give him a proper birthday present and allow him to form the new government, I am sure he will respond to the needs of our people with responsibility and concern.


Some hon. Members:: Hear, hear!


Mr. Martin:: Mr. Speaker, I rise on a point of order. Just before we proceed, I believe there may be some disposition for us to continue beyond the ten o'clock hour and have two

November 23, 1978
The Budget-Mr. Pelletier
additional speakers, namely, the hon. member for Sherbrooke (Mr. Pelletier) and the hon. member for Huron-Middlesex (Mr. McKinley). In the process, we would forgo the normal late show.


Steve Eugene Paproski: Mr. Speaker, yes, there has been agreement in the House that we would allow time to speak to the hon. member for Sherbrooke (Mr. Pelletier) and also the hon. member for Huron-Middlesex (Mr. McKinley). We would hope to adjourn at 20 minutes to 12 a.m.


Alan Gray Martin: Mr. Speaker, there is a slight correction to the hon. member's statement. I am sure the hope would be that these speeches would each be of approximately 20 minutes' duration, and that will take us to about 25 to 11.


The Acting Speaker (Mr. Turner):: The suggestion is before the House. Is there unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: Agreed and so ordered.


Mr. Irfenee Pelletier (Sherbrooke):: Mr. Speaker, first of all I should like to congratulate the hon. member for Halifax-East Hants (Mr. Crosby) on his maiden speech.


Some hon. Members:: Hear, hear!


Irénée Pelletier: Being a native maritimer from New Brunswick, I would also like to tell the hon. gentleman that I have studied at St. Francis Xavier University in his province. I subscribe completely to what he said about youth and about the maritime provinces, although I do not share his last few words concerning this government.
[ Translation]
Mr. Speaker, the budget speech like the Speech from the Throne gives us a chance to discuss matters that we cannot deal with when legislation comes before this House since we are then restricted to the specific subject matter of the bill introduced in the House. I would like to avail myself of the few minutes I am allotted today to tell my colleagues about a problem which faces the Sherbrooke area, which I have the honour of representing here. I would like to deal with the controversial question of relocation, that is the federal government plan to relocate in Sherbrooke the mapping branch of the Department of Energy, Mines and Resources. This was announced a year ago and until now the negotiations have not led to any positive results. But before that, Mr. Speaker, I wish to say a few words on the textile situation in the Eastern Townships since this industry was and still is the most important of the area in terms of employment.
The situation of the textile industry has never been more encouraging in the last ten years that it is now. The action taken by the Canadian government in November, 1976, to redress an unbearable situation which had been denounced by union, labour and industry has yielded positive results. The government has agreed to implement the recommendations

and proposals made by the Canadian Textile and Clothing Board as well as the corrective measures proposed by some members in the House, such as the hon. member for Drummond (Mr. Pinard), the hon. member for Gamelin (Mr. Portelance) and the hon. member for Compton (Mr. Tessier). The devaluation of the Canadian dollar has also contributed to the recovery of the textile industry. The Quebec government's sales tax cut on clothing was also instrumental in bringing about an improvement in this area. There are of course a few sectors in the textile industry which will need special attention over the next few months. These sectors are a little softer than others which we have improved to a large extent by implementing the measures we announced in November, 1976.
Last year, negotiations between Canada and seven of the major textile exporters have led to the signing of renegotiable five year agreements. All these developments have contributed to a large extent to the recovery of the textile industry. To put it in a nutshell, at the present time, the textile industry is in excellent shape in the eastern townships, the province of Quebec as a whole and Canada in general. We can say that the industry is expanding and it is important to mention it, Mr. Speaker, because the area I represent, in spite of commendable efforts at industrial reorganization, is still a region where soft sectors predominate, which makes the whole area of the Eastern Townships and more particularly Sherbrooke very sensitive to adverse economic conditions This prompts me to deal with the problem of decentralization, that is the mapping branch of the Department of Energy, Mines and Resources.
Five years ago, the federal government decided to decentralize some departments which could easily function outside the federal capital. In Quebec and this criticism has often originated with provincial members, organizations and even governments-the federal government has often been blamed for centralizing everything in the national capital, while some of the services could very well have been operated normally in other areas of the country. That is why the federal government has been led to consider the possibility of relocating several of its agencies or departments in the provinces. In this process, Sherbrooke was elected to receive a complete section of the Department of Energy, Mines and Resources, the mapping branch, and on October 3, 1977, the then solicitor general, the hon. Francis Fox, announced in a press conference that he was advising Sherbrooke of the official decision made by the Canadian government to decentralize that department, and relocate the mapping branch in the eastern townships.
In August 1974, the cabinet asked the Treasury Board to examine in detail the removal of public services and the decentralization of certain departments. The cabinet ministers thought that if it was well executed such a specific program could promote the federal policy of national unity, regional economic development, balanced urban growth and better services for Canadians.
November 23, 1978

In May 1975, the then president of the Treasury Board, the hon. Jean Chretien, was asked to develop a program and to designate the groups of civil servants in the national capital area and of the large urban centres in Canada who could be transferred. The main objectives of the Government of Canada were first, to bring the administration of federal programs closer to those directly concerned; secondly, to help slow growth and high unemployment areas; thirdly, to make the federal administration more conspicuous in the communities where it was not much felt and, where activities related to the country as a whole can contribute to maintain national unity; and finally, to reduce the undue concentration of civil servants in the national capital area.
In Canada, the federal public service is mostly concentrated in the national capital area, where are found more than 30 per cent of the federal civil servants, that is more than 75,000 people. Such concentration is much higher than in other confederations, in the United States, for example, where only about 12 per cent of the federal employees work in the area of Washington D.C. The total capital expenditures required by the government for the decentralization program will amount to some $200 million. This will not require additional expenditures, since most of these are charged against the normal construction budget of the Department of Public Works.
The capital expenditures related to the decentralization will obviously benefit the communities, where these services will be established way before the actual move. In many cases new buildings will have to be built, and it is estimated this will directly create some 4,000 man-years of employment in related sectors. The re-establishment and the decentralization will also contribute to promote the government policy as regards regional economic expansion and balanced urban growth. The federal government's decentralization efforts in the last few years have already produced concrete results. For example, Northern Transportation Company Limited headquarters, were moved to Edmonton, Petro-Canada headquarters, to Calgary, the Royal Mint to Winnipeg, the Department of Regional Economic Expansion's activities and services, were divided between four areas and established within the provinces, only the headquarters remaining in the national capital.
We all know that 24 Canadian cities have been selected by the federal government to receive these transfers. Six cities have been chosen in Quebec, and Sherbrooke is one of them. The projects in Matane and Shawinigan are already operating. I am told that a week or so ago tenders were called for excavation works at Jonquiere. The cargography service of the Department of Energy, Mines and Resources has been selected to move in Sherbrooke, and on October 3, 1977, the federal government announced its intention to proceed, by 1983, the target date for official opening, with the moving of over 750 public servants and their families to Sherbrooke in the eastern townships.
The Budget-Mr. Pelletier
The surveying and mapping branch is the Canadian government organization responsible for basic mapping in Canada. Its major programs include grids for geodesic control surveys, the topographical maps in the National Atlas and the aeronautical maps. The maintenance of the international border and the surveying of Canadian lands are other major activities of that branch. The surveying and mapping branch head office now located in Ottawa includes some 945 jobs, of which 75 per cent are filled by people in the scientific, professional and technical group. According to current plans, some 750 jobs will be transferred, the remaining work being gradually farmed out. Total annual salaries for the relocalized part of the branch will be in the order of $15 million. The relocation should cost some $40 million. It seems the government decided to relocate the branch to Sherbrooke for a number of reasons: the presence of two universities-one French and one English-two CEGEPS-one French and one English-a number of high calibre education institutions, both French and English, and finally the Eastern Townships environment, a bilingual environment that perfectly suited the relocation as admitted by everyone.
Sherbrooke, with a population of about 90,000, is some 90 miles east of Montreal and 135 miles southwest of Quebec city. It is large enough to absorb an organization of that size and is considered the most important growth centre in the eastern townships. Because of the major economic impact of the project, its numerous employment opportunities both current and potential in an area that has a great need of it, and the leading effect of an organization of that size, the decentralization to Sherbrooke of the Department of Energy, Mines and Resources has become for us a very urgent and most important issue. Large investments in our areas depend on the decisions that will be taken by the Canadian and Quebec governments. I am also convinced a large number of foreign, Canadian, Quebec and Sherbrooke investments would be made at very short notice if both levels of governments were to come to an agreement.
Therefore, the decision to implement that plan will have for Sherbrooke and the eastern townships as a whole a leading effect that is difficult to evaluate at this point. We can readily realize however the considerable impact this would have on an already weakened Sherbrooke economy. As regards employment the announcement made on October 3, 1977 gave rise to great interest. Mr. Speaker, it has always been our view that too many young people in the eastern townships and Sherbrooke had to leave our area because they could not find a job. It is abnormal indeed that people in the eastern townships and Sherbrooke, having acquired institutions of higher learning and great quality, cannot benefit from those investments. Many of them had to make sacrifices to build our two universities and our two junior colleges and today too many of our graduates have to leave for Montreal or elsewhere in Quebec, sometimes outside Quebec, to find a job. That seems to me

November 23, 1978
The Budget-Mr. Pelletier
absolutely unacceptable. The federal relocation proposal brought much hope for young people especially for graduates of our two universities and our two junior colleges because there is so much unemployment among young people. Everybody agrees that the project is very important for our area, for economic development of course, but also for social and cultural development.
I would now like to say a word about this proposed relocation. Since the beginning, that is 1974, among the basic principles set by the federal government at that time there is one that the federal government has particularly emphasized and still emphasizes. This principle is as follows and I quote:
The transfer of any administrative unit of the federal public service implying a considerable number of an official linguistic minority will only be made when it has been ascertained through a permanent agreement with the host province that the children of federal civil servants will have the opportunity to be educated in the official language that they usually speak.
It is only after long and hard negotiations with public service officials and the provinces that the agreement was reached to abide fully by this principle when federal decentralization or relocation projects would take place within their boundaries. None of the provinces having accepted the federal government decentralization program could back out of this basic principle. When the Matane, Shawinigan and Jonquiere programs were announced and implemented in Quebec-since all the other provinces had agreed on decentralization-it decided to stand by this fundamental principle of the Federal government. And when the second stage of the federal relocation program was announced in the autumn of 1977, three other cities in Quebec had been chosen and the same 1974 principles to which provinces had agreed from the outset were still included in the conditions set by the federal government. This requirement of free choice for the language of instruction has not been changed despite the changes in provincial governments since 1974. It has not been easy to obtain such linguistic guarantees from other Canadian provinces, in which francophones represent less than 5 per cent of the population in certain cases. As far as Sherbrooke is concerned, all the other conditions set by the federal government do not seem to be causing any problem to the relocation project.
At least three ministers of the Quebec government came to Sherbrooke after the announcement of October 3, 1977. One said that the provincial government "would never go down on its knees before the federal government", a second said that the federal project was "stillborn", and finally, Minister Camille Laurier said in his press conference of March 17, 1978, and I quote:
This is why we cannot accept the statement by the federal government that.. . "any relocation of an administrative unit of the federal public service involving a significant group of an official language minority will occur only when we are assured, by a permanent agreement with the host province, that the children of federal government employees will be taught in the official language that they usually use."

Mr. Laurin then said:
It is up to the provinces to sign mutual agreements to ensure fair and desirable reciprocity because they alone are constitutionally empowered to do so. By trying to assume the right to sign a permanent agreement in this regard with a province, the federal government is once more invading the jurisdiction of the provinces and reveals its desire for centralization.
During the same press conference, Minister Laurin also said:
First, the Quebec government recognizes the economic advantages that the establishment of a service including 750 employees would have for the Sherbrooke area; and second, the government was willing to offer its full co-operation for the implementation of this project while scrupulouc?y respecting Quebec laws.	[DOT]
He reminded us in this regard that Act 101 provides for a renewable authorization of temporary residence for a period of three years and that it would therefore be normal that a period of six years be provided for employees moving to Sherbrooke. This section of the French language charter-section 85- refers to temporary stay in Quebec and then suggests that those six years should remove all anxiety from the mind of public servants who might be transferred eventually. On that matter, Mr. Speaker, I would like to point out that the proposed relocation will not be for three years or six years but it will be permanent. Therefore the federal public servants who will be transferred to Sherbrooke will not be in our province on a temporary basis, but most of them will settle permanently in Sherbrooke with their family. That is the substance of the problem. The federal government, which does not have one law for the rich and another for the poor, has a principle which applies to all regions of Canada since 1974, including Quebec which is still part of Canada. On the other hand, that provision of the French language charter would not allow Canadian citizens from outside Quebec who would take up permanent residence in Sherbrooke to send their children over six years of age to the school of their choice. On several occasions, the federal government has stated that it could not accept that view of the Quebec government.
In the House last spring I asked the following questions to the Minister of Finance (Mr. Chretien):
In connection with the Quebec government proposal to allow the federal public servants who would settle in Sherbrooke a six year maximum during which they could send their children to English schools would the minister be prepared to discuss whether, under the 101 legislation, the cartographers who expect to be moved to Sherbrooke might enjoy the linguistic privileges of the military?
And the minister answered:
Mr. Speaker, I would surely be interested in discussing such a proposal with the Quebec government. I feel it would be very desirable to have a certain number of public servants transferred to Sherbrooke as provided in the decentralization plan.
When it was advised of this reply made by the Minister of Finance, the Quebec government indicated that it could not accept this proposal. Because of the problems resulting from the conflicting principles and positions put forward by both governments, several independent local organizations tried to

November 23, 1978
put together solutions which could be acceptable to both governments, but to no avail.
This is the stage we have reached now and it seems that no progress is being made, that this is some sort of a dead end, and that the project in Sherbrooke, as well as those in Rigaud and Quebec city for that matter, are greatly jeopardized. Here are two basic approaches by two levels of government which seriously endanger the realization in Sherbrooke of this relocation project. The fact remains, however, that the people in Sherbrooke are very eager to see this project come true, a project which should mean significant economic benefits for Sherbrooke and the eastern townships generally.
For the sake of political decency, we cannot let the hopes of a whole population hang in midair without knowing what will happen. The federal government is determined to relocate that service in Sherbrooke, in accordance with the commitment given to the public servants and all the provinces in the House in 1974. Let us think about it: it concerns 750 employees, plus their spouses and children, a total of about 2,000 people. It means creation of at least 1,500 direct and indirect jobs, total annual wages of over $15 million, and capital investments in the range of $40 million. In brief, a project with absolutely tremendous economic repercussions.
I would conclude by recalling what a distinguished editor in the region very appropriately wrote about this last winter. I quote:
It would suffice that the Parti Quebecois acknowledge that all-out nationalism does not put food on the table and does not create jobs whereas simple logic would help bring 700 new jobs to Sherbrooke.
There is nothing humiliating about that; it is just a matter of knowing how to add, of recognizing what everyone knows, except the government, that Quebec is still part of Canada and that Canadians are not immigrants in the province of Quebec.
If the Pequiste government persists in refusing jobs like that, in being haughty in several respects, the political balloon that will burst will be its own. It will have lasted only four years.
We have always maintained that English-speaking Canadians from the other provinces could not, as long as Quebec is part of Canada, be assimilated with the immigrants like the others, as far as the language of schooling is concerned.
If Quebec were to persist in applying Act 101 in its entirety to English-speaking Canadians, it would prove that it cares less than it professes to about economic development. Ottawa does not ask that Quebec deny its principles it does not intervene in its legislative process, it proposes-
-always according to that editor-
-acceptable terms.
Mr. Levesque should soon agree that he is not expected to capitulate but simply to try to cooperate a little.
To conclude, Mr. Speaker, I would say that the government offer is there; it is explicit and unequivocal. The requirements are the same for all provinces in Canada, and they were felt acceptable everywhere else in Canada. It seems to me that by depriving Quebeckers of a fair distribution of federal expenditures, therefore of their own taxes, under the relocation program of the services of the Government of Canada which was established to extend better service to the population, the
The Budget-Mr. McKinley
government of Quebec fails to pay attention to the most urgent needs of an area like the constituency I have the honour to represent in this House.


Mr. R. E. McKinley (Huron-Middlesex):: Thank you, Mr. Speaker. First, I want to express my appreciation to the members of the House of Commons for agreeing not to see the clock tonight, and also to the staff of the House of Commons.
Reflection on this budget leaves one wondering increasingly just what deserves praise. On the face of it, the budget appears to be cautious and, as the media describe it, responsible. Well, here perhaps is one quality that deserves praise: compared with the wild riot of spending we have grown to expect from the government, this budget is responsible. It is a sad commentary on the state to which our economy has been brought that we can praise a government as responsible simply because it is not quite as irresponsible as it was before. It is as if we were to congratulate a murderer because he had cut back to aggravated assault, or an arsonist because his fires were getting smaller. Nevertheless we recognize that while this government clings to office, we cannot expect the best of all possible worlds, and this being the case we can still welcome the decision not to penalize private industry in the resource sector, particularly mining and pulp and paper. What we should bear in mind, of course, is that the government has not given anything new to these industries; it has simply decided to take less away. It is slackening its chokehold.
The intention to increase tax credits for investment and to encourage more research and development is a welcome feature, but it draws attention to an underlying pattern, namely that the budget is directed toward winning the approval of big business. The fact that a loophole, used mainly by large corporations for debenture financing at bargain rates, has now been closed should not obscure the underlying pattern. This is essentially a budget to make big business happy.
With this pattern in mind, I want to look at the budget from two points of view and from the perspective, not of large and often foreign-owned businesses, but from the perspective of small businessmen, particularly the kind of small businessman I have been sent here to represent, the self-employed farmer who sustains a good many small Canadian communities. From this perspective I want to talk of areas of government performance as they are reflected in the budget, one dealing with the government's enormous capacity for spending money, and the other with the feeble measures with which it has come up to help this particular kind of Canadian business earn money.
This government has proved to be extremely good at spending money, a habit it increased as if it were a drug addiction during its short marriage to the big spenders in the NDP while we had a minority government a few years ago. Until circumstances and a strong public protest forced it to haul back a little in its dying days, the government has shown no more concern than the most short-sighted freeloader on the socialist benches about the sources of the money it spends.

November 23, 1978
The Budget-Mr. McKinley
In the real world, you do not just print money; you earn it. I want to offer an example of how Canadians have shown they can earn money. I use this example to examine what this government has done to help or hinder them. I have chosen an example from my own riding with which I am familiar. In my riding, people have been quietly producing wealth for the country for years, only to see this government squander it faster than it can be produced. I refer to the business of producing white beans. That is not a crop which attracts headlines. It does not have the prominence of wheat, but within several counties of western Ontario, and especially in the riding I represent, it is an essential crop produced, on the average, by about 3,500 producers. It may not be a prominent crop, but white bean production has grown in Ontario by well over two and a half times in the past 15 years, even though the domestic market has declined steadily during the past decade.
What has sustained this industry, is the powerful growth of exports of these beans. Ontario is the world's largest exporter of white beans, having surpassed the United States as an exporter several years ago. Since 1963, the export share of the market has grown from about 30 per cent to about 85 per cent.
In 1975, exports of white beans were worth about $24 million. This strong exporting position makes this particular crop of considerable interest within Canada's agricultural export picture. It earns foreign currency which is badly needed to save the country from the government. This industry deserves support by the government.
White beans are only one crop of many, and I mention this crop because I know about it. How many other industries in Canada go begging because this government ignores the potential to produce demontrated by small Canadian businesses?
A study conducted by a Nobel prize-winning economist suggests that the world population will be rising rapidly in the next 20 years and that demand for farm products will be rising at the rate of 5 per cent per year. If the government is serious about its commitment to research and development, let us see its commitment in support for proven research programs from which Canadian producers have benefited in the past and from which they continue to benefit.
We in this party support the idea of stimulating Canadian research and development by private industry, but we will continue to argue for a genuine commitment to research. In terms of many small businesses in this country, the present budget proposals seem more like a pat and a nod and a bid for business support than a fully thought out commitment to move the economy ahead.
Agriculture seems remarkably under-emphasized in this budget, which is surprising since only this summer when the cost paring knife was being wielded, agriculture attracted more than its fair share of attention. Before the summer cutbacks, agriculture accounted for only 1.6 per cent of the government's budgetary expenditure, but it was asked to accept a full 6 per cent of the cutbacks. Whether the government has decided that farmers and everyone else associated with agriculture are already lost votes anyway or whether it simply does not understand how important agriculture is and

always will be to this country, it has done precious little to take advantage of the strength in this industry in its plans for the future.
The milk industry offers another interesting example of how low agriculture figures in the government's mind, or perhaps I should say of how agriculture figures in the government's low mind.
Late last summer a director of the government centre for the study of inflation and productivity suggested that Canada was producing too much industrial milk and that farmers would benefit, while the government would save on subsidies, if industrial milk production was cut by a third. In other words, he was proposing a cut in our gross national product of over $1 billion, which the National Dairy Council of Canada estimates would cost tens of thousands of permanent jobs. Why did he propose this cut? Because this year we are facing a depressed world market for skim milk powder, and we will have a surplus. If this cutback in production occurs, it might save the government $130 million in subsidies this year, but it would also result in a cutback in Canadian butter production of 135 million pounds, which the government would then import and sell to consumers. Consumers would save nothing by this proposal. The government would save subsidy money, and apparently it did not look ahead to decide what or who would provide for the dairy farmers who would be put out of business. Again, short-term expediency, a paring down of the government's own expenses rather than a genuine contribution to the economy of the country, seems to underlie the dealings of the government.
The Minister of Agriculture (Mr. Whelan) seems to feel that consumption of dairy products in Canada is bound to drop so that a price rise to producers would merely hasten the process. He has even suggested that dairy men agree with him, although the howls of indignation from that quarter have caused him to invite producers to Ottawa to give him some proper lessons.
This proposed drop of a third of our industrial milk production comes at a time when industrial milk is already in short supply in Ontario. The problem with the international market at the moment has to do with surplus skim milk powder which might, under prevailing circumstances, become a precious and desired part of our food aid to other countries. Yet in Ontario very little powder has been shipped to the Canadian Dairy Commission for some time. Furthermore, under its present milk quota, Ontario is barred from producing even as much butter as it consumes, and it is not producing anything like the amount of specialty cheeses, yogurt and ice cream that it could absorb. It continues to import specialty cheeses with a continued outflow of Canadian dollars-more and more as the dollar continues to sag, of course-when it could be producing them in greater quantity if quotas did not operate against producers. This year farmers were so heavily penalized for over-production, that many have tried to produce less than their allowed quotas. That, with a little help from unco-operative weather and other factors, has led to the present shortage of industrial milk in Ontario.
November 23, 1978

Something is drastically wrong with our milk policy, when the successor to the Anti-Inflation Board can propose importing 135 million pounds of butter while cutting industrial milk production by one third. Something is drastically wrong with our quota system when Ontario must produce less industrial milk than it produces. Something is drastically wrong with this government when, instead of seeking ways to increase the prosperity of this industry, it argues that higher prices would, nevertheless, cut demand. The fact is that the milk industry is not treated by this government as an industry out of which wealth may come, but as an arm of policy. It suggests cutting its subsidies by $130 million, even though the country as a whole will not be saving this amount, but instead will pay to import foreign butter. In other words, the present initiatives of the government in dairy policy are calculated to cut down on the visible spending of the government, whether the cutback benefits the country or not. The government wants to cut its spending even when it increases the country's costs.
Here again in dairy policy, then, Mr. Speaker, we have an example of confusion and of disregard for the economics of our vitally important agricultural sector. Years of milking the public have not taught the government's economists to milk a cow. You do not turn on production overnight, nor can you cut it off overnight without severely dislocating a heavily capitalized industry, and of course, cutting back milk production by a third certainly does not cut back a dairy producer's costs by one-third. It forces him to absorb fully the losses which subsidies are designed to cushion.
What benefits, one might ask, can the government expect from damaging the Ontario dairy industry? One is that it can get out of some subsidies it does not want to pay. Another is that Quebec can become an exporter of milk to Ontario, a consideration that might satisfy some policy requirements of this government that have nothing to do with producing wealth but a lot to do with maintaining the government's last bastion of voter support in the country.
So far, Mr. Speaker, I have been looking at how the government fails to support Canadian industries in the important agricultural sector as it attempts to cut its own spending and its losses with the public.
I want to now look at ways in which the government spends money, and again I want to employ an example with which it is my responsibility to be familiar. I refer to the government's public works spending, which has grown during the period of this present parliament to astronomical proportions. I want to refer in particular to the mushrooming of the government's office inventory in the national capital region. Again in pursuit of policy objectives which have nothing to do with saving the taxpayers' money, the government has singlehandedly and at one and the same time saddled future governments with enormous commitments of the taxpayers' money-much of it comitted in rents to private developers-and handed the city of Ottawa, which has grown up as the service centre for the government, a crisis of yawning, empty office buildings.
The Budget-Mr. McKinley
Let us look very briefly at the pattern of spending this government has shown in its public works policies. In 1972, the Department of Public Works administered 42 million square feet of Crown-owned office space across Canada and 17 million square feet of leased space. It spent roughly $100 million in 1971-72 on building construction and acquisition.
By 1976, it spent two and a half times that much on building construction-almost a quarter of a billion dollars in a single year. Its Crown-owned inventory grew by 25 per cent, while its inventory of leased space more than doubled.
Recently, the Department of Public Works has gone from a system of accounting for space in square feet to a system using square metres. The Minister of Public Works (Mr. Buchanan) told us in the House a while ago that he was an old-fashioned man who still had to multiply these metric figures by 11 to understand them. If we multiply the current figures by 11 and then knock off a bit so that we are more accurate than the minister, we find that the government inventory of space stood, at the beginning of this year, at 67 million square feet, while in 1972 it stood at only 58 million square feet. Accordingly, the total inventory increased by 9 million square feet, or about 15.5 per cent from 1972 to the beginning of 1978.
Now let us look at the jump since January of this year. It is a jump of over 20 million square feet in 10 months, or 30 per cent in this year alone. No wonder the government has gone metric during the last few months; the figures do not sound nearly as harmful when they are divided by 11. The government will say that this last figure of 30 per cent is unfair, that many projects have suddenly been added to their inventory this year that were in the planning and construction stages for several years. Allowing for the sudden addition of projects that have been several years in the works, we are left with an increase, since 1972, of over 50 per cent in the space administered by the Department of Public Works' accommodation program.
The cost of the program, then, has increased two and a half times since 1971 and the space administered has increased one and a half times. In the last three fiscal years, building construction and acquisition has totalled $750 million, which is roughly half of the total cost of government accommodation in those years. Half the budget for accommodation goes simply on new building. How fast is this country supposed to be growing?
What are the benefits of this amazing program, Mr. Speaker? Have Canadians enjoyed so much better government that the boom in government building has been worth it? For that matter, have civil servants noticed a huge increase in their ability to serve the public?
Before I close I want to draw attention briefly to comments in the annual reports of the Department of Public Works for the years 1975-76 and 1976-77. In the first of these reports is the following comment:
The five-year accommodation plan was updated by PP&C (The program planning and co-ordination branch of the department) in January (1976) in the light of new federal constraints on public service growth and the implications of decentralization-

The Budget-Mr. McKinley
In the following year's report, we are told
The January 1976 accommodation plan for the national capital region was approved by Treasury Board in July 1976. Based on this approval, outline implementation plans were prepared: this affects more than half of the public servants now occupying space in the national capital over the next four or five years.
The year 1976 appears to have been a key year, Mr. Speaker. Despite an acknowledged awareness that restraint was called for, the government decided to go ahead with a spending program to house new departments, which has cost $750 million since then and which has left downtown Ottawa dotted with empty buildings and rental signs. The ripple effects on the economy of this city must make other cities, which have to deal with the federal government, shudder. But the costs will go on, Mr. Speaker, because this government did not know when or how to stop. It has these enormous buildings now, and the country is stuck with their cost for years into the future. Only now, now that the damage is done, has the government announced what should have been obvious long ago to anyone with sense, that the public service is too big and must be cut back, with a corresponding cutback in the office space needed for it.
I could elaborate on the figures which document the government's mismanagement of public spending through the Department of Public Works, a great deal of which is not in the least attributable to the hard-working servants of the department but simply to the economic incompetence of the government. There is the $150 million spent on expropriation at Mirabel airport, and the $88 million spent on expropriation for the Pickering airport, and the sum-which is far from final-of over $100 million which the government is spending on a new office building in downtown Montreal so that it can create more empty office space there. Mirabel, Pickering, and more empty office space in Montreal: these are government follies which all Canadians can see, even if their final costs can not easily be measured.
No wonder we have a debt this year of over $12 billion. No wonder the international community has lost confidence in our currency, when the government spends it hand over fist on unnecessary offices, unneeded or even unbuilt airports, and unworkable postal plants. No wonder the people of Canada have lost heart, and no wonder the Auditor General, for the third year in a row, has had to call attention to the inadequacy of the government's accommodation program in the Department of Public Works.
I want to end my remarks, Mr. Speaker, by drawing attention to a few of the comments of the Auditor General in his report just issued. Last year he suggested that:
The government should consider establishing long-term guidelines on the growth of the public service to facilitate planning for office accommodation, with due consideration to decentralization and other government objectives.
Well, of course, if the government had had an adequate plan for accommodation when it updated its accommodation plan in 1976, the Auditor General should not have had to make such a comment last year.

November 23, 1978
In this year's report, the Auditor General notes that two years ago he had also commented on the inadequacy of accounting for accommodation. This year, noting that under present arrangements parliament is not informed of "the cost of accommodation services requested and used by individual departments", the Auditor General has added his voice unequivocally to the voice of the national finance committee of the other place in its report this fall, and to the voice we have raised in opposition, with a recommendation that departments be required to pay Public Works for the space they use.
This concept of revenue dependency was proposed as long ago as 1962, and the Conservative party then in government had already instituted a method of showing, in the annual estimates of departments, the cost of their accommodation. Since the last Conservative government was in office, the recommendation of the Glassco commission urging this concept of revenue dependency, or "user-pays", has just sat there. The Department of Public Works itself has welcomed the proposal. It is the government which has not acted.
A week or so ago I asked the Minister of Public Works and Minister of State for Science and Technology if he intended to introduce legislation to update the Public Works Act, as a committee of the other place had recommended. He said he did not intend to introduce such legislation now. Now that the Auditor General has joined the chorus of voices which recommend a change in the nature of accounting for government accommodation, we can only hope that the government will think again. Its hesitation becomes a bit more understandable when we notice that the Auditor General, whose concern is that public spending should be both visible and accountable to parliament, urges this change, because at present the accounting system used to keep track of the cost of government accommodation buries much of the actual cost. The real costs would be even more startling if they were shown openly.
One quotation from the Auditor General's new report will suffice, Mr. Speaker. The report states that both when the government builds a building of its own and when it leases accommodation on the private market "current reporting arrangements understate the actual cost of new accommodation; consequently, it is difficult to make valid comparisons of the relative merits of construction, purchase and leasing alternatives." This suggests that the government could not and did not know what it was getting into when it committed itself to lease-purchase agreements for new office accommodation, agreements which by one estimate may cost $179 million more than if the government had built Crown-owned buildings in the first place. Once again, the government has appeared to save money by committing future governments to years and years of rent, instead of showing openly and honestly what money it has spent.
Mr. Speaker, in indicating our lack of confidence in this government, I am merely echoing what Canadians from coast
November 23, 1978

to coast and from the American border to the Arctic have been showing all year, that this country is strong but that the government is weak and must go. It has harmed us enough. Let us look forward to the end of it and a beginning of recovery within the country. Thank you, Mr. Speaker.
The Budget-Mr. McKinley


The Acting Speaker (Mr. Turner):: Order, please. It being 10.45 p.m., this House stands adjourned until tomorrow at eleven o'clock a.m., pursuant to Standing Order.
At 10.45 p.m. the House adjourned, without question put, pursuant to Standing Order.

Friday, November 24, 1978