1978-04-05

ROUTINE PROCEEDINGS


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity involving the loss of unemployment insurance benefits for hundreds of workers in my constituency in Trenton, Nova Scotia. These men, who have not worked for many weeks because of curtailed operations by their employer, Hawker Siddeley Canada Limited, are being placed in dire circumstances because a portion only of the work force is involved in a legal strike. I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the Minister of Employment and Immigration take every possible step to ensure that only those workers employed at the time of the dispute and resulting strike are disqualified from receiving benefits and that those other workers whose termination of employment predated by many weeks any such dispute and who have no immediate prospects in the immediate future of employment with Hawker Siddeley not have their benefits disturbed.


Mr. Speaker:: Pursuant to Standing Order 43, the presentation of such a motion for debate would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL DEFENCE
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise under the provisions of Standing Order 43-


Some hon. Members:: No.


Mr. Beatty:: They have guilty consciences again.


Thomas Charles Cossitt: -concerning new developments on a matter which I revealed in the House a few months ago dealing with theft or conversion of public funds at Canadian Forces Base, Ottawa North, in the reported amount of a quarter of a
million dollars. I move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
Whereas the RCMP investigated this situation and forwarded a report to the Department of National Defence, and whereas the Department of National Defence has ordered the convening of a court martial on Tuesday, April 18; that the Minister of National Defence make public all details of the situation, including the name or names of military personnel and the charges against them, whether or not charges are also being laid against certain civilians as a result of RCMP evidence and, if so, the name or names of such persons and the nature of the charges and, finally, that an explanation be given as to why there have been no audits of central band equipment at Canadian Forces Base, Ottawa North, for a number of years.


Mr. Speaker:: Presentation of such a motion for debate requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSIONS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, under the provisions of Standing Order 43, and seconded by the hon. member for Oshawa-Whitby (Mr. Broadbent), I ask leave to move:
That this House urges the government, in view of its stated recognition of the role of spouses working in the home, to bring before the House legislation to provide pensions for all homemaker spouses, in their own right, equivalent to those earned by contributors to the Canada Pension Plan, thus recognizing in full, for pension purposes, the contribution to our society made by those who work in the home.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

April 5, 1978
[ Translation]


ADMINISTRATION OF JUSTICE
Mr. Rene Matte (Champlain):: Mr. Speaker, I ask for the unanimous consent of the House to present an urgent and important motion.
Considering the importance of setting the facts and the situation of the October 1970 crisis in their true light, and since those facts and circumstances seemed to have been freely interpreted by federal government authorities so that they could justify war measures and discredit the entire population of Quebec; considering that the government has never taken seriously all the interventions which I have been making for years on that very matter and since new developments such as the revelations made by the Cossette-Trudel couple confirm in part my allegations that the police were quite aware of FLQ activities, but allowed them to go on, thus risking even the life of Mr. Laporte in the secret hope of discrediting for ever the emancipation movement in Quebec, I move, seconded, by the hon. member for Rimouski (Mr. Allard):
That a special committee made up of representatives of all political parties in the House be created to hear all the necessary witnesses to clarify the circumstances which led the government to impose war measures in 1970.


Mr. Speaker:: Such a motion cannot be presented for discussion without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN BROADCASTING CORPORATION PROPOSED WITHDRAWAL OF RADIO SERVICES FROM CHURCHILL, MAN.-MOTION UNDER S.O. 43
Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. CBC radio has been established in Churchill for 27 years. The Canadian Broadcasting Corporation has made application to withdraw its services from the town of Churchill in June, 1978. The CRTC has given its approval to this request. Therefore, due to the need of this necessary service to this isolated community, and due to the sagging economy of Churchill, I move, seconded by the hon. member for Provencher (Mr. Epp):
That the government instruct the CBC to continue radio service to Churchill in the existing manner.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


REQUEST TEXTILES BE EXCLUDED FROM TARIFF CUTS-MOTION UNDER S.O. 43
Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Whereas the Canadian trades and tariffs committee's announced decision to include textiles in the proposed "Swiss formula" tariff cuts during the General Agreement on Tariffs and Trade negotiations at Geneva, Switzerland, presents a real threat to the future of the Canadian textile industry inasmuch as Canadian textile tariffs would be reduced from their current 20.8 per cent to 8.2 per cent by 1985, I move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That this House immediately instruct our Canadian trades and tariffs committee to exclude all Canadian-made textiles from tariff cuts during the current GATT negotiations at Geneva.


Mr. Speaker:: In accordance with Standing Order 43, such a motion can be presented for debate only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is for the Minister of Finance. By telling the House of Commons yesterday to shut up, the Minister of Finance indicated that he does not want Canadians to know what policy this government is following to defend the dollar. The minister knows that that very uncertainty is driving down the value of the dollar.
I ask the minister now whether, to stop that drop, he would agree to make an immediate statement today outlining the level below which the Government of Canada will not let the value of the Canadian dollar drop, and also outlining the


April 5, 1978

specific strategy that the government is going to follow to stop this daily drop in the value of the Canadian dollar.


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, the policies of the government are well known-


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: The governor of the bank is intervening to make sure that the dollar floats in the normal way. I think we are gaining nothing from speculating on those figures. Perhaps what the country would like to know is whether the opposition has a policy on that.


Some hon. Members:: Oh, oh!


An hon. Member:: Who is running the country?


Joseph Jacques Jean Chrétien: It is because they are all over the place that they are worried when the figures go down. The Gallup poll this morning has shown that the country sees that the opposition presents no real alternative.


Charles Joseph Clark: The problem is that the position of the Government of Canada is not at all well known. It claims that it is letting the dollar float, when it is clear that there is not at all a float in any sensible meaning of that word. The Solicitor General of Canada, in a speech made yesterday or the day before in Sarnia, took a position explaining the policy on the dollar that is exactly the opposite of the position stated by the governor of the Bank of Canada. What we have here is not just speculation on the value of the dollar, but speculation as to what in fact is the policy of the Government of Canada.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Everything this government does adds to the uncertainty which drives down the value of the dollar. What I want to know is, will the minister stop this playing of games which is destroying the value of the Canadian dollar, and will he come forward immediately and spell out to this country and to the international investment community-which does not know now what is the real position of the Government of Canada-just exactly what that position is, so that the dollar will not continue to drop day after day after the actions of this most incompetent and confused minister and government?


Joseph Jacques Jean Chrétien: Mr. Speaker, the Leader of the Opposition took the occasion to make a speech. Once again he has not put forward anything concrete in terms of a position. The position of the government on the dollar is very simple. The Canadian currency is a floating dollar. We are intervening to ensure that it floats in a normal way. The governor of the Bank of Canada intervened on Monday night: he made a very clear statement. If the Leader of the Opposition will take two minutes to read it-and it is only one page-he will understand the policy of the government.
Oral Questions


Charles Joseph Clark: I read what the governor said. I also saw what the Solicitor General said, which was exactly the opposite of what the governor of the Bank of Canada said. Every day this minister gets up in the House of Commons, the dollar drops again. It drops because this government is not coming forth and telling the international or the Canadian community exactly what it intends to do to defend the dollar. More than politics is at stake here; the value of the Canadian currency is at stake.


Mr. Speaker:: Order, please. I have to ask the Leader of the Opposition to put his question.


Charles Joseph Clark: My question to the minister is this: this minister not only refuses to answer questions here, but refuses to come before the standing committee on finance of the House of Commons. Why will the minister not now come forward and spell out precisely what strategy this government is going to follow and what is the basement value beyond which he will not let the value of the Canadian dollar drop?


Joseph Jacques Jean Chrétien: Mr. Speaker, 1 have stated the policy many times. The results of the Gallup poll were published today, and it is very obvious that is why the Leader of the Opposition has lost his cool. I just want to say that the policy of the government is the same. We are floating the Canadian dollar. We intervene in the market to make sure the float is done in an orderly way. This has been the policy we have been following for some months: we are not planning to change it.


REPORTED ASSISTANCE OF QUEBEC HYDRO IN SHORING UP VALUE OF DOLLAR
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. As the dollar started to scrape against a new low today, 87.44 cents, Quebec Hydro came to the government's assistance in Ottawa and exercised $100 million of their standby line of credit with 51 banks. Will the minister indicate if he is aware of this assistance from Quebec Hydro in shoring up our dollar? If so, was it done at his request?


Joseph Jacques Jean Chrétien: Mr. Speaker, what the hon. member just stated is an illustration that the governor was correct when he stated on Monday night that one of the reasons is the institutions in Canada were not going into the market at this time. The fact that some Canadian institutions are going into the foreign market to borrow is what is desired at this time. If the hon. member will read the statement of the governor, he will see he was referring to that problem. As expressed in the communique of the governor of the Bank of Canada, some provinces and institutions will go into the marketplace in the near future. I am glad to hear the hon. member confirm that that will help the status of the Canadian dollar.


Sinclair McKnight Stevens: In the interests of some clarification, a further item that is disturbing the international market is the February budgetary deficit figures that have now been published.

April 5, 1978
Oral Questions
These figures indicate that the budgetary deficit for fiscal year 1978 is running 81 per cent ahead of where it was the year before. Does the minister still anticipate the budgetary deficit for fiscal 1978 to be the $9.2 billion originally indicated, or may we anticipate it to be considerably higher, as current figures indicate it could be $11 billion?


Joseph Jacques Jean Chrétien: Mr. Speaker, I would like to know whether the hon. member is referring to 1977-78 or 1978-79. In any event, when I come into the House with the budget, those figures will be made known to the public.


Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is directed to the Minister of Finance. With rising unemployment, rising inflation, a falling dollar and a widening budgetary deficit since the minister took office in September of last year, will he now indicate whether he has done anything wrong?


Some hon. Members:: Oh, oh!


An hon. Member:: Come on, get up and tell us about the Gallup poll.


Some hon. Members:: Oh, oh!


PRIME MINISTER'S STATEMENT ON NARROWING GAP BETWEEN RICH AND POOR
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question is for the Prime Minister, who yesterday misinformed the House in replying to a question asked by the hon. member for Winnipeg North Centre. He said, when discussing the problem of poverty in Canada, that what is important is that the group of Canadians below the poverty line be reduced, and he maintained that the statistics he gave in Calgary bore this out.
Mr. Speaker, the statistics presented by his Minister of National Health and Welfare, and Statistics Canada, simply do not bear him out. I would ask whether he will today admit that the totally inaccurate claim which he made in western Canada before a Liberal convention, that the number of those living below the poverty level in Canada has been reduced from 20 per cent to 10 per cent, was achieved by ludicrously assuming that the dollar level of poverty in 1961 ought to be applied in 1975, thus totally ignoring the effects of inflation which all honest presentations of such figures take into account?


Right Hon. P. E. Trudeau (Prime Minister):: No, Mr. Speaker, that is quite incorrect; and if members of the hon. member's party and others had let me answer yesterday, they would have understood that.


John Edward Broadbent: Mr. Speaker, I see that the Prime Minister does not want to be any more forthcoming or honest today than he was yesterday when discussing poverty.


Some hon. Members:: Oh, oh!


An hon. Member:: Give him a chance.


John Edward Broadbent: I will give him an opportunity to answer the second question. In her recent sensitive speech in which she honestly confronted the question of poverty, the Minister of National Health and Welfare pointed out, with reference to a certain district in the city of Montreal, that 21 per cent of the children are undernourished, 22 per cent are physically retarded, and 28 per cent are retarded in a physical-mental co-ordination way. She said, "Poor children do far less well in school".
Considering this situation, and given the fact that yesterday the Prime Minister said in the House that the Liberal party believes in equality of opportunity, would he not agree that such a description of equality of opportunity is ludicrous when applied to such children who have no such opportunity to achieve what others do?


Mr. Speaker:: Order, please. Surely the question is being put forward as an argument, and not in search of information.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, this question is one seeking information. Does the Prime Minister agree with the statistics as presented by the Minister of National Health and Welfare? Was she stating government policy when she said, "Poor children do far less well in school"? If that is so, will he not agree that his so-called belief in equality of opportunity is not only factually wrong, on the basis of that description of such children, but is morally offensive and odious because it implies they could do just as well and it is their fault rather than that of circumstances?


Pierre Elliott Trudeau: Mr. Speaker, the leader of the NDP is quoting certain facts. These do not represent matters of policy but, rather, are matters of fact. Of course I agree with the general line put forward by the Minister of National Health and Welfare. She put it forward precisely to justify some of the current expenditures in order to create more equality of opportunity.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I never stated that we had achieved equality of opportunity in Canada. To the contrary, my statement in Calgary, and my statement here yesterday, was to the effect that there are a great number of people in Canada who are still living below the poverty line.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Those were my statements.


John Edward Broadbent: The situation has not changed much, either.


Pierre Elliott Trudeau: The point I was making, Mr. Speaker, is that over the last ten years the number of people as a percentage of
April 5, 1978

total population below the poverty line has dropped considerably in Canada.


John Edward Broadbent: That is false.


Pierre Elliott Trudeau: That is the point I was making.


John Edward Broadbent: That is horseradish.


Pierre Elliott Trudeau: Those are the facts that the hon. member will get from the bureau of statistics, if he will take the trouble to look.


ADMINISTRATION OF JUSTICE
Mr. Ren6 Matte (Champlain):: Mr. Speaker, my question is directed to the Prime Minister. Further to the revelations made by the Cossette-Trudel couple last night on the CBC program Telemag, can the Prime Minister tell the Elouse whether he intends to change his position with regard to the necessity of throwing light on all the details of the gloomy business of the October 1970 crisis? Mr. Speaker, I wonder whether the Prime Minister is turning a deaf ear or whether he wants me to put my question again?


Pierre Elliott Trudeau: Mr. Speaker, I was unaware that the hon. member was putting a question to me. If he is willing to put it again, I shall answer it.


René Matte: Mr. Speaker, I repeat my question. The right hon. Prime Minister if doubtless aware of the revelations made by the Cossette-Trudel couple, who kidnapped James Cross on October 5, 1970, and stated on the Telemag program that the police knew where they were and were holding Mr. Cross, that they even knew where Mr. Laporte was being held. For eight years now I have been trying to convince the government of the need to throw light on every aspect of that incident, so I ask whether the Prime Minister, in view of the fact that those revelations confirm my allegations, whether his government is willing to come clean so that we can find out everything concerning the circumstances and events surrounding that dark business of the October 1970 crisis?


Pierre Elliott Trudeau: Mr. Speaker, indeed it was a dark crisis which shook the morale of Canadians right across the country. The allegations of the hon. member are, as far as I know, false and erroneous. I know that, at that time, the cabinet asked for a daily report on the inquiry assigned to finding out where Mr. Cross and the late Mr. Laporte were being held, and the police did not locate them. So one cannot claim that the police knew where they were. Had we known that, we would have acted much sooner to free them. Those claims strike me as complete fabrications, not only fabrications, but also totally unrealistic
Oral Questions
in their make-up. If the hon. member has otherwise some knowledge contrary to what I have said, he should bring it forth either before the House or before the McDonald commission, which was created to inquire into such matters.


René Matte: Mr. Speaker, I have a supplementary.
To answer the statement the right hon. Prime Minister has just made, Mr. Speaker, he simply has to question FLQ members. But the Prime Minister did not answer my question on the circumstances of the kidnapping of Mr. Laporte and Mr. Cross and everything surrounding this matter. When they appeared before the Committee on Broadcasting, Films and Assistance to the Arts in 1969, one year at least before the October crisis, Montreal Mayor Jean Drapeau and Executive Committee Chairman Lucien Saulnier stated categorically that several times they informed the Prime Minister of some troubling facts concerning terrorist activities in Quebec, and in particular the sabotage and kidnapping planned by FLQ groups-


Mr. Speaker:: Order, please. If the hon. member has a question, I would ask him to put it forthwith.


René Matte: Mr. Speaker, I wanted first of all to give the Prime Minister some background information so he would not go off on a tangent. Does the Prime Minister remember these messages, could he advise us of their contents and tell us how he followed up on the recommendations of the Montreal authorities?


Pierre Elliott Trudeau: Well yes, Mr. Speaker, I quite clearly recall them; as for their contents, I believe that at the time Messrs. Saulnier and Drapeau made public what they told me in private, namely that they were afraid of the terrorists in Montreal. What a revelation, Mr. Speaker! We knew that there were terrorists, that for a few years there had been murders, train derailments, arms thefts and all kinds of bomb threats, we knew there were terrorists, and of course the mayor of Montreal and the chairman of the executive committee knew it also, they gave us the information they had at the time, and we attempted, in co-operation with their police, the Montreal police and the Quebec Police Force to find the terrorists. So the hon. member is not shedding any new light on the climate which existed at the time.


FINANCE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I should like to direct a question to the Minister of Finance. It relates to press and radio reports to the effect that because

April 5, 1978
Oral Questions
many Canadians are fearful of the direction in which the value of our dollar is going, and also the failure of the government to act, they are sending their currency to the United States to purchase real estate in that country in order to safeguard them against potential loss.
Is that a fact, and to what degree does the government estimate that last month Canadians took their money out of Canada and sent it to the United States for that purpose?


Joseph Jacques Jean Chrétien: Mr. Speaker, it is very difficult for the government to know exactly what Canadians do in their transactions. Of course, there are some stories to the effect that some Canadians are buying houses or other properties in the United States and elsewhere. We have no intention of imposing exchange control. The flow of capital inside Canada and outside Canada is the policy of the government.


John George Diefenbaker: Mr. Speaker, we at least have one policy now that we know the government is going to adopt. I suggest to the minister, to the Prime Minister and to the government that their nonchalant attitude toward this terrible problem indicates that they believe they still have 87 cents to go before they will act.


MANPOWER
Mr. James A. McGrath (St. John's East):: Mr. Speaker, 1 should like to direct a question to the Minister of Manpower and Immigration. Can he tell the House whether the employment tax credit bill is, in fact, operative? Have applications been received, and are they being processed? If not, can the minister tell the House why not, and when we can expect the bill to be operative?


Hon. Bud Cullen (Minister of Employment and Immigration):: Yes, Mr. Speaker, the bill is operative and some applications are coming in. We will be conducting a program of advertising to indicate the benefits available under this particular program, in the hope and expectation of increasing the number taking advantage of it.


James Aloysius McGrath: Mr. Speaker, a supplementary question. Given the seriousness of the unemployment situation, the delay in getting that bill in place and the minimum impact it is consequently having on the unemployment situation, I ask the minister if he can give the House an assurance that there will be no tampering with the Unemployment Insurance Act while there are over one million Canadians unemployed. Perhaps he can tell the House precisely what the terms of reference are of the advisory council that he referred to in his interview yesterday.


Jack Sydney George (Bud) Cullen: Mr. Speaker, during discussion of Bill C-27 we went into this particular council at some length, or the author-

ity and objectives that I wanted to see. We indicated that we did not want to set it up simply for the sake of setting up a council.
I am happy to say that we found an excellent chairman who wants to get a group of three or four people to find the most effective way of using the council so they can give advice to the department. I do not know what the hon. member means by "tampering with the act." Perhaps he could be more specific. If there are ways to improve the Unemployment Insurance Act, that of course will be done.


James Aloysius McGrath: A final supplementary question, Mr. Speaker. Given the fact that the minister is presently spending $1 million on a campaign to bring alleged fraudulent practices to the attention of the public, given the fact that there are over 800,000 recipients of unemployment insurance out of over one million unemployed, I ask the minister if he is prepared to include with unemployment cheques a small card advising unemployment insurance recipients of their rights under the law.


Jack Sydney George (Bud) Cullen: Mr. Speaker, all the unemployed receive courtesy and co-operation from Unemployment Insurance offices and Canada employment centres across the country from the civil servants who have that particular responsibility. I think those who come under that program would indicate that they receive very sympathetic, very careful, patient treatment and information, and tremendous help from our offices. If there are further ways to enhance that co-operation and assistance, I am prepared to look at them.


NATIONAL DEFENCE
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, I have a question for the Minister of National Defence. Last July the minister told us that he was studying the question of acceptance of the neutron bomb. Since virtually all our NATO allies have said where they stand on this matter, could the minister tell the House what the policy of the government is on the acceptance of this bomb?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, that policy has not yet been developed. As was pointed out at that time, it has military utility, but we are not a user of nuclear weapons nor are we one of the nations on which the weapon would likely be deployed. This is a matter for NATO discussion.


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: If hon. members opposite think this is a funny sort of thing-


An hon. Member:: You are.


An hon. Member:: You are the joke.
April 5, 1978


Barnett Jerome Danson: I think it is a pretty sad joke over there, Mr. Speaker. I am sure they are trying to keep their spirits up, after the Gallup poll. A policy is being developed.


Allan Bruce McKinnon: A supplementary question. Last Wednesday the minister said on television that we should give the neutron bomb to the Russians, ignoring the fact that it is not ours to give to anyone. Would the minister explain why he is so keen to give the neutron bomb to the Russians, when we ourselves seem incapable of deciding whether it should be deployed by NATO?


Barnett Jerome Danson: Mr. Speaker, if the hon. member did a little more research in many areas, he might find out that that is not what I said.


Some hon. Members:: Oh, oh!



CONSUMER AFFAIRS


Mr. Jim Fleming (York West):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. The minister is reported as saying that he wants to see a code of ethics established to govern lottery advertising in Canada. Several months ago I asked his colleague, the Secretary of State, if he would investigate charges that various government lotteries appeared to be negatively affecting private sector fund-raising for many important charitable causes.
In preparing his code of ethics, will the minister take into consideration the broader question, that these government-run lotteries may be seriously affecting the traditional and important marketplace for fund-raising in the private sector?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, immediately before Easter we had a federal-provincial conference of consumer affairs ministers. All agreed that we should work toward the development of a code of ethics for lottery advertising. Prior to that conference I had approached the Minister of State (Fitness and Amateur Sport) and she was very interested in these proposals. We would be glad to consider the submissions made by the hon. member.



NATIONAL DEFENCE


Thomas Charles Cossitt: Mr. Speaker, my question is directed to the Minister of National Defence. It concerns the embezzlement or conversion of public funds at Canadian Forces Base, Ottawa north, in the estimated amount of a quarter of a million dollars, and the fact that the court martial
Oral Questions
has been set for April 18, resulting from an RCMP investigation.
Is the minister in a position to give details of the matter, including who has been charged, the nature of the charges, and why it has taken so long for this matter to come to a head since I first raised it in the House?


Barnett Jerome Danson: Mr. Speaker, I dp not think it came to a head when the hon. member raised it in the House, as the RCMP were conducting an investigation. Warrant Officer Cooper has been charged. There will be a court martial, and that court martial will be public.


Thomas Charles Cossitt: A supplementary question, Mr. Speaker. Would the minister tell the House how much of the money that was allegedly embezzled or allegedly taken in some manner has been recovered by the government? In addition, could he tell the House whether charges are being laid against certain civilians, particularly in the musical instrument business, as a result of information uncovered by the RCMP? Also, could he tell us why audits of musical band equipment at Canadian Forces Base, Ottawa north, have not taken place for some years?


Barnett Jerome Danson: No, Mr. Speaker, I cannot give that information. It will likely come out in the court martial.



RESOURCES


Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is to the Minister of Energy, Mines and Resources. A recently-released government of Ontario report indicated the likelihood that the mining industry in Ontario will lose another 1,300 jobs between now and 1980. The federal government is now considering stockpiling more uranium as a profitable edge against future world demands, and in the last week Inco raised the price of nickel by 7 cents per pound.
In view of these facts, can the minister tell this House if he is now prepared to extend the concept of stockpiling to other areas of the mining sector, both to protect jobs of the workers in those communities and the communities themselves, where required, and to help capture a larger share of the profits that our resources are accruing for a very small band of multinational mining companies?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I do not accept the preamble to the hon. member's question. The whole issue with respect to the stockpiling of nickel-which he has raised in this House before-has been answered quite clearly. We have looked at it and we have decided that such a program would not help those

April 5, 1978
Oral Questions
who need help: indeed, it would undercut the very stability and revival of that important industry in Sudbury.


John R. Rodriguez: Mr. Speaker, in view of the fact that despite the lay-offs, Inco has raised the price of nickel by 7 cents a pound, which indicates their confidence in the future markets of nickel, and in view of the fact that in spite of its 2,000-man lay-off to cut back production, Inco has required overtime in the last month in production areas for their remaining employees-and, indeed, their production of nickel is just as high as it was prior to the lay-off-and in view of the fact that if the government had acquired a one-month stockpile of 30 million pounds of nickel it would not only have saved 2,000 jobs but they would have made $2.1 million on that stockpile, can the minister stand in this House and honestly tell us why he is not prepared to take advantage of these opportunities, and at the same time show some commitment to the communities affected by such lay-offs?


Alastair William Gillespie: Mr. Speaker, the hon. member should know by now that as far as nickel is concerned, 96 per cent of all the nickel produced in Canada is sold abroad. The reason the nickel industry is in difficulty right now is that the international markets are in trouble-


John R. Rodriguez: Production is off.


Alastair William Gillespie: -and Canadian nickel goes into those international markets, 96 per cent of it. Therefore, the health of the Canadian nickel industry will depend on those markets. Unfortunately, at the present time the international markets are not healthy as far as nickel is concerned. That is why we have stated time and time again that the kind of stockpiling program the hon. member has referred to with respect to nickel would not help the recovery of the nickel industry. The hon. member a few moments ago laughed when I gave that answer. We are concerned-I am not sure that he is-with the plight of the workers in Sudbury. He seems to be more interested in making political hay rather than trying to solve a very difficult problem.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order. The hon. member for Simcoe North.


John R. Rodriguez: Supplementary, supplementary.


Some hon. Members:: Order.



ENVIRONMENTAL AFFAIRS


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I would like to address a question to the Minister of Fisheries and the Environment. In view of the fact that the IJC reports growing evidence of dangerous toxic chemicals in the Great Lakes basin, combined sewer overflows and storm water overflows

from urban areas reaching serious proportions which may well become dangerous, as well as radioactivity from the 12 nuclear plants situated on the Great Lakes using the water from the lakes, why has there not been more manpower supplied to deal with this increasing problem?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, if I understood the hon. member's question correctly-and I may not have because there was a fair amount of noise occurring while he spoke-he was inquiring about the matter of adequate manpower to police and to detect the difficulties of the heavy metals and other pollution ingested by fish. I would tell the hon. member that fish sold for commercial purposes must reach required standards. If it does not, then sale is prohibited as it was, for example, in the English-Wabigoon system where fishing is not allowed to be pursued commercially. Regulations for the sports fishery would come under the jurisdiction of the provincial government which administers them.


Philip Bernard Rynard: Mr. Speaker, I have a supplementary question. It was the people I was concerned about who are using this water, and the pollution that is contained in it. It does, of course, affect the fish, but I was talking about the lead and the radioactivity pollution which affects people.


Roméo LeBlanc: Mr. Speaker, I will read the hon. member's question very carefully and determine whether I or my colleague, the Minister of State (Environment), should give him a longer answer.



FINANCE


Mr. Jake Epp (Provencher):: Mr. Speaker, 1 direct my question to the Minister of Finance. In the last budget, which was brought down March 31, 1977, it is said, "taxes are to be deferred on any capital gain that arises from voluntary sales in cases where a farmer sells his farm, providing the funds received are used to purchase a similar asset in the same business".
I ask the minister in view of the support that measure received, whether it was government policy at the time that budget was introduced that farmers who sell their capital assets and turn them over into another farming operation, but of a different nature, where the income is solely farm income, should have the tax department now assessing capital gains on those transactions?


An hon. Member:: Scandalous.
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, this is a rather technical question. I shall take note of it and ask the Department of National Revenue and get back to the hon. member on it.
April 5, 1978



STATUS OF WOMEN


Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Prime Minister: it relates to the establishment in 1972, by a cabinet directive, of equal opportunity directorates in all departments of government. The report I had recently from the chairman of the Public Service Commission indicated that in a survey of more than 40 departments, only 16 have full-time, equal opportunity co-ordinators.
Does the Prime Minister think, with the progress that has been made in the last five years since this directive was issued-which would lead one to believe that equal opportunities' programs would only be effective over the course of 50 to 100 years-that is a satisfactory performance, or does he think that less than 50 per cent of the departments should not have even one full-time person to implement these important programs?


Pierre Elliott Trudeau: Mr. Speaker, I am glad to have the observations of the hon. member. I will, of course, confer with the minister responsible for the policy regarding the status of women and, hopefully, he will report back to the House on this matter.
The hon. member realizes, of course, that this post was created in order to influence hiring within the civil service. That hiring is not controllable in any way by the government. We can give directions and express hopes. However, in so far as order in council appointments are concerned, the hon. member knows that the record of the government has been improving and is quite good at present. We expect to do better. As far as the public service is concerned, I will have to ask the minister to inquire into the reason why, if the facts are right, more persons have not been established to fulfil these functions.


David Samuel Horne MacDonald: Mr. Speaker, perhaps I can put a question to the Prime Minister relating to an area of direct government policy and programs. In 1975, the spokesman for the status of women announced a feasibility study involving the Department of Labour, Supply and Services, Public Works, and Treasury Board with respect to contracts with companies with the federal government to ensure, to use his words "that the federal government is determined that companies with which it does business should provide equal employment opportunities and wages for their women employees".
Since that study was done Vh years ago, Mr. Speaker, can the Prime Minister indicate whether the results of that study have resulted in directives being issued by these particular departments; and what has been the effect of that policy?


Pierre Elliott Trudeau: Mr. Speaker, I can certainly inquire into that. 1 would indicate to the hon. member that he knows that in some cases when quotas are established, they become floors. That is not the proper way to proceed. In the case of order in council appointments, I repeat that we find it necessary con-
Oral Questions
stantly to remind ourselves that indeed there are functions which can be filled by women representatives. We constantly remind ourselves of that in cabinet. That is why we made a particular effort to bring a certain number of "firsts" into the area of employment of women. This government named the first woman lieutenant-governor of a province, the first woman chief justice of a superior court, the first woman judge of a superior court, and the first woman deputy minister.



FINANCE


Almonte Douglas Alkenbrack: Mr. Speaker, I have a question for the Minister of Finance. As a result of hundreds of messages I have received from constituents employed in the textile industry who are deeply concerned that a government decision in the current GATT discussions will reduce tariffs on imported textiles and synthetic fibres entering Canada, thus causing more massive unemployment in our country, I ask the minister to tell us the government's policy on this matter, and is it a policy that will sustain the jobs of Canadian textile workers?


Hon. Jean Chr6tien (Minister of Finance):: The policy is well known, Mr. Speaker. We are presently negotiating on tariffs at the Geneva conference. We have put forward some propositions there and we have received some proposition, but no final decision has been made on any item. The government is, of course, aware of the situation of the textile industry and we have already done a lot for that industry: we have imposed controls on the importation of textiles, quotas, and so on. 1 agree with the hon. member-other hon. members disagree with him, depending on where they come from-that in the hon. member's riding, textiles are important.



REQUEST THAT TEN CENTS EXCISE TAX ON GASOLINE BE REMOVED

Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, my question is for the Minister of Finance. It has to do with the 10 cents excise tax on gasoline, and also with the discrepancy between prices at one gasoline station as compared with another. Will the minister and his department review this 10 cents excise tax on gasoline and work out a proposal for its removal, because all it has ever done is add to inflation? At the same time, would the hon. gentleman review the discrepancy between gasoline prices at one gas station compared with those at another? 1 might add that 1 have pressed the government to do this for the past three years.


Joseph Jacques Jean Chrétien: The proposition the hon. member puts forward is like so many others put forward by the opposition: during every question period they

April 5, 1978
Oral Questions
ask for increases in expenditure or reductions in taxes, while at the same time complaining there is too big a deficit.



ROYAL CANADIAN MOUNTED POLICE


Mr. Roch La Salle (Joliette):: Mr. Speaker, in view of the fact that the Quebec justice minister indicated yesterday the firm intention of the Quebec government to demand from Ottawa payment of a lump sum of $937 million as compensation for the costs of providing provincial police services which are the responsibility of the Royal Canadian Mounted Police in eight of the Canadian provinces, could the minister advise the House whether he intends to meet the Quebec minister to discuss the basis for this claim?


Hon. Ron Basford (Minister of Justice):: No, Mr. Speaker, because I am not responsible for the RCMP or for police costs. Those are matters which are dealt with by the Solicitor General, who may wish to add to my answer.


Roch La Salle: Mr. Speaker, I have a most important supplementary question. I suggest the Solicitor General understands very well the nature of my question. Is he at least willing to discuss with the Quebec justice minister an issue which Mr. Choquette, the former Quebec justice minister, had raised himself for that matter, namely whether the federal government should pay compensation to the province of Quebec for these costs which are extremely high just now?


Hon.   J.-J. Blais@Solicitor General: It is a fact that the former Quebec justice minister had discussed this issue with my predecessor, who had clearly indicated the position of the federal government on this. Mr. Speaker, I am afraid my reply to the hon. member is no.


Hon.   Monique@: I did look into the question of accessibility and the problem which might be caused to residents in northern communities. In the case of the territories, the difficulty has been solved in a satisfactory manner. As for the northern parts of the provinces, I gave consideration to the representations made to me by the hon. member and I have instructed my department to place saccharin on the list of drugs which are stocked by nursing health stations. However, I am referring now to very isolated communities, not to parts of the north where people may have to travel a little before reaching a pharmacy.



SCIENCE AND TECHNOLOGY


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Minister of State for Science and Technology. Canadian citizens living along the south shore of Nova Scotia, especially those living in Barrington, Cape Sable Island and Ingomar, Shelburne county, are experiencing on an almost daily basis a new meteorological phenomenon-specifically, a new kind of sonic boom. Since these booms are very disturbing, I ask the minister whether the government has made any representations concerning this matter to the International Civil Aviation Organization which is presently preparing recommendations for regulating the noise from supersonic transport and, if so, what response has been received?


Hon. Judd Buchanan (Minister of Public Works and Minister of State for Science and Technology):: It was my understanding that such representations have been made and that aircraft in this area would reduce their speed. I would be happy to pursue the matter, though, and find out whether this has been done.



AGRICULTURE


Mr. Maurice Foster (Algoma):: Mr. Speaker, I wish to ask the Minister of National Health and Welfare a question arising from her department's plan to ban the sale of saccharin in grocery stores and limit its sale to pharmacies only. Bearing in mind the research which is going on around the world to determine whether saccharin is harmful to humans or whether it is only harmful to laboratory animals, would the minister consider allowing the sale of this drug in grocery stores until those studies are completed?


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Minister of Agriculture. As the hon. gentleman knows, farm income in this country has declined by some 23 per cent over the last three years and beef producers lost some $400 million over that period. Beef prices have now begun to pick up. I should like the minister to assure the House that if this trend toward increased prices continues, further imports will not be used as a tool to depress the domestic price.


Hon. E. F. Whelan (Minister of Agriculture):: I am sure the hon. member, unlike his hon. friends in that party, does read some of the reports and releases I make from time to time. My colleague, the Minister of Industry, Trade and Commerce, and
April 5, 1978

Western Grain Stabilization Payment
myself put out one release saying that the import laws in effect those investments and whether the Quebec government comat the present time will be carried on for three more years.	pletely agrees with the minister on this point?


Lorne Edmund Nystrom: That is precisely why I have raised this question. We want a guarantee that the minister will not use imports in the future as a means of decreasing the domestic price.
While I am on my feet, may I ask the minister this: Since we only supply about 94 per cent of the Canadian market, what steps does the hon. gentleman envisage his department will be taking to assist the beef industry in this country? What concrete steps does he have in mind to assist Canadian cattle producers?


Eugene Whelan: If the hon. member wishes, I will send him about four pages of material listing all the things we have done in the last four years in response to the requests of that industry. There has never been a government or a minister under which more has been done, and the evidence shows this to be the case. I am surprised the hon. member asked the question he did, having regard to some of the things he has said in the past.
* *
*



URBAN AFFAIRS


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I would like to ask a question of the hon. Minister of State for Urban Affairs.
Recently we received a release to the effect that the assistance program for rehabilitation of older residences, namely RRAP, would be implemented. At first sight, that program looks as thoughs it will help and encourage small property owners to renovate their homes through a maximum remission of $3,750 on a $10,000 loan. However, I would like to know when the housing industry will be able to take advantage of those programs and what funds will be allocated for 1978-79.


Hon. Andre Ouellet (Minister of State for Urban Affairs):: Mr. Speaker, as soon as the budget is approved, I will be in a position to tell Canadian municipal authorities how much money is available to them for residential rehabilitation purposes. There is no doubt in my mind that the budget will be twice what it was last year, especially in rural areas, in keeping with the increase in residential rehabilitation applications.


Léonel Beaudoin: May I ask a supplementary question, Mr. Speaker?
According to press reports suggesting that the Minister of State for Urban Affairs is on rather bad terms with some small municipalities of Quebec, particularly with some mayors, could the minister tell the House whether he has come to some agreement with the province of Quebec regarding


André Ouellet: Mr. Speaker, this is essentially a federal program as well as federal funds. In order to put the program into effect, all provinces-not only the province of Quebec- had to designate the municipalities qualified to receive these funds from the federal government. As far as the province of Quebec is concerned, it has been agreed that all rural municipalities of Quebec would be designated for this program.



EXTERNAL AFFAIRS


Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Can the minister inform the House what plans the government has for participating in the special session of the United Nations on disarmament, starting in May, which UN Secretary General Waldheim says may become a turning point in the search for disarmament? Also, is the government prepared to introduce any initiatives for arms control and world peace by promoting the political, civil, social and economic rights of people everywhere?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, it would not be possible in an oral answer to provide the details to the hon. member. I can tell him, however, that we will be taking an active role in the special session on disarmament. In addition, there are a number of internal departmental groups and outside groups which are making submissions and preparing material. I hope this will all be co-ordinated within the next little while. It is possible that the hon. member might wish to raise some questions when I appear before the standing committee, at which time I will be very glad both orally and, incidentally, by way of a written statement, to provide him with an up to date report.



ROUTINE PROCEEDINGS


Eugene Whelan: Mr. Speaker, I am pleased to announce to the House today that an initial payment of $60 million has been approved under the western grain stabilization program.
April 5, 1978

Western Grain Stabilization Payment
Producers who have paid the $500 maximum levy over each of the past two years will be getting about $1,100 as a part payment for the 1977 crop. A final payment will be made in the fall when all the information needed to determine the final pay-out level under the act has been gathered. Right now it looks as if that final payment will also be a pretty hefty one.
This part payment will help grain growers meet planting expenses for the coming year. The purpose of setting up the Western Grain Stabilization Act on a calendar basis was to allow producers this type of flexible assistance. I understand that cheques will be going out very shortly. In fact, producers can expect to have them in their hands by the end of April. This should be of considerable help to prairie grain farmers particularly, in view of the decreased net returns prairie farmers suffered last year.


Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, we on this side welcome this announcement by the minister for two reasons. First, the announcement was mercifully short and, second, the money is badly needed now. The announcement emphasizes the problem facing the western grain industry, which is really just a reflection of the total problem facing Canadian agriculture.
This announcement is one more indicator that an election is imminent. Yesterday in the Standing Committee on Agriculture the minister said this announcement could not be made until after the cabinet meeting tomorrow, so he is either talking through his hat or he does not understand cabinet procedure, or both.
We are now 30 million bushels behind in our grain exports, mainly because of problems at the west coast. Farmers know that the asking price for top grade grain is $4.50 a bushel plus, but still the government says there will be no further payment on the initial price of $2.75 a bushel received by the farmer. For those people this announcement today will be small comfort. It means that they are sold out at below the cost of production for the full calendar year 1978.
At a time when close to $1 billion will have to be expended to plant the prairie grain crop, which requires seed, fuel, chemicals, equipment and wages, producers will question why this payment could not be made in full instead of in two parts. The money is required now. The fund presently has in it $154 million, give or take $1 million or $2 million. The $60 million payment announced by the minister today is simply a return of the premiums already paid by farmers, and if the government honestly feels that the western grain stabilization plan is so great, why does it not include landlords? By "landlords" I mean mainly widows who live in our small prairie towns. These are the people who are being hurt. I sincerely hope that in the coming years returns from the marketplace will preclude payments of this kind.


Lorne Edmund Nystrom: Mr. Speaker, like the spokesman for the Conservative party, we in the NDP welcome the fact that farmers are getting some additional moneys, but I must admit that I am not really surprised at the announcement. It is really an election payment which is being

made to the farmers. Farmers are being paid $1,100, as a maximum, of their own money, and if we look at the plan, we find that over the last two years farmers contributed $1,000, $500 per year. If we add interest, that amounts to $1,100, so they are getting back their own money. I think this is a bit of cynical politics on the part of the Minister of Agriculture (Mr. Whelan).
The announcement today says that a final payment will be made in the fall when all the information needed to determine the final pay-out under the act has been gathered. Of course, we will not have that information in the fall. I suppose it is by accident that there is an initial payment. We welcome that initial payment, but I want to be sure that this is a precedent, and in other than election years when there is a pay-out under the plan there had better be an initial payment like there is this year. It had better not be just in an election year that the government decides to pay farmers with their own money in an attempt to buy votes. I want to be sure that the minister uses this as a precedent.
I do not think the Minister of Agriculture knows very much about this because his boss is out in Saskatchewan making a similar announcement today.


An hon. Member:: Winnipeg.


Lorne Edmund Nystrom: By his "boss" I mean the minister in charge of the Canadian Wheat Board, who is announcing that there will be a hefty payment in the fall. If the government can project a hefty payment in the fall, why can that payment not be made now? It would make more sense to make the payment now than it would in the fall.
The minister who made this announcement in the House today is full of nothing but bull when he talks about the decent farm incomes we have in this country. Net farm incomes in the last three years have dropped by 23 per cent. Farm expenses have gone up by 18 per cent. Is that the best there is in the world? When the minister cannot answer questions in the House, he pats himself on the back, and he spreads a bunch of bull from one end of the country to the other.
In my province of Saskatchewan between 1975 and 1977 cash receipts for grain and oil seeds went down by 20 per cent, while the cost to the farmer went up by some 23 per cent. Some Minister of Agriculture and some department!
Between January, 1975 and January, 1978 cash receipts for farmers went down by 38 per cent, and in the province of Saskatchewan they went down 55 per cent. What other sector of our economy would sit back quietly and allow that to happen? The minister announced nothing today for beef producers. All he has announced is a measly payment out of the western grain stabilization fund, money which the farmers themselves have put into it. Of course we welcome the payment, but it is not enough. If farmers are going to stay in business, they will need a lot more than this.
April 5, 1978


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I would like to comment very briefly on the statement the Minister of Agriculture (Mr. Whelan) just made on western Canada's grain growers.
That the government decided to extend financial aid to farmers can only be good news, whether those farmers are in western, central or eastern Canada. Because it is generally recognized by members in this Elouse that farm producers are finding it very difficult to gain recognition for their right to a reasonable and stable return, bad seasons and bad years notwithstanding.
As far as I am concerned, I know western grain growers are facing difficulties, and the announcement that an initial $60 million payment has been approved will be welcome because those farmers have obligations and any revenue will allow them to honour those obligations, at least in part, and provide them with some incentive to consider the coming crop year and the seeding season with better hope and satisfaction.
On the other hand, it is too bad farmers have to wait for months on end before at least recouping the money they spent on seeding, maintenance, threshing, storage and so forth, and still wait another number of months before getting a revenue, some return on their labour. I hope, Mr. Speaker, that through the years it will be possible to develop a program ensuring better stability, so that our country can produce on a regular basis what is needed to feed this country and also to meet our commitments to the underdeveloped countries we are helping generously.
I am happy about this, about the fact that we can help because, in my opinion, it is more satisfying to help others then to have to ask others for help. While the Minister of Agriculture is still in his seat, 1 would like to make a small comment concerning the Canadian dairy producers.
Yesterday, when I asked the minister about this, he replied that we would be proud when he announces the dairy policy for next year and that we would be happy to learn that we have the best dairy policy in the world. If it really is the best in the world, 1 shall be the first to applaud. When someone does something positive, something which truly corresponds with the aspirations of a group of Canadian producers, I am not one to criticize, as I would rather help with the administration and co-operate, and on those occasions, 1 am happy and proud to say that such a thing is good.
Therefore, in the days to come, 1 hope the Minister of Agriculture will tell us about the nature of this dairy policy to reassure the Canadian dairy producers so that they will also start the next dairy production year in good spirits and work generously like all other producers of western Canada to produce the goods essential for Canada.
Western Grain Stabilization Payment
Mr. Speaker, if this is the situation, the member for Bellechasse will be happy to say so throughout Canada and invite all our producers to take advantage of this policy and to continue to work generously to accomplish their mission, and we shall assure them of our support to provide them with reasonable returns and to ensure the future of agriculture in Canada, which is essential for the survival and the prosperity of our country.


Mr. John Wise (Elgin):: Mr. Speaker, I believe that under the rules of the House we might be permitted to pose a few questions following the minister's statement, which could be accurately described as an attempt to bribe farmers with their own money. I draw the minister's attention to the last sentence of the statement, which reads:
This should be of considerable help to prairie grain farmers particulary, in view of the decreased net returns prairie farmers suffered last year.
The minister has finally recognized that farm incomes in this country have declined. That is admitting his failure and that of the government, of which he is a part, to deal effectively with this serious problem.
My questions to the minister are, first, what information is not known now that should be known in order that a final payment could be made to western producers; second, when will this information be known; and third, can he give me the assurance today that cheques will be in the hands of the western producers by the end of this month?


Eugene Whelan: I think I can tell the hon. member that cheques will be in the hands of the producers by the end of April, according to the officials who administer this act and who are under the jurisdiction of the Minister of Agriculture. Producers were slow in giving their information. This is the first year of operation of the program and we had hoped to have the final figures in by March 15. The figures are being tabulated at present. We are not satisfied that they are coming in fast enough. I am afraid I forgot the other question the hon. member asked.


John Wise: I think the minister was in the process of answering it, but can I take it from the minister's remarks that all the information should have been in by March 15 and in the hands of the Grain Stabilization Board; and if this is the case, why will the full payment only be received in the fall?


Eugene Whelan: The hon. member should realize that if a mistake is made of even half of one per cent either in favour of the producers or against them, it can amount to a tremendous amount of money one way or the other. So these figures have to be double checked and double checked again to make sure that they are accurate.
When the hon. member makes the statement that the incomes of farmers have gone down, let me point out that 1 have continually stated to those farmers who are selling their products on the world market, whether it be surplus dairy or surplus grain products, that the world price of those products went into a tremendous slump or depression, and that there are

April 5, 1978
Western Grain Stabilization Payment few grain farmers in the world who have a program such as this under which for every dollar they put in the federal government puts in $2. Opposition members are saying that this is producers' money, but let me point out that there is $2 of taxpayers' money in this program for every dollar the farmers contribute. We think we have one of the best programs of all. It may not be the 100 per cent we would like to see but it is at least 99 per cent of what we would like to do to stabilize farmers' incomes.


Mr. Jack Murta (Lisgar):: I should like to ask the Minister of Agriculture (Mr. Whelan) a question. The statement he made today makes a mockery of the grain stabilization program. The farmers have contributed approximately $50 million and the government has contributed in the neighbourhood of $100 million, which comes to an approximate total of $150 million which has been allocated to the plan. What the government has done today is to give farmers back $50 million of their own money plus $100 million of federal government money, and that is it for the present time.
The minister says that possibly next year we may see a lump sum payment, one payment only. The minister has certainly not convinced the House of Commons. I want to ask him why that payment was not made in total at the present time. Why are we dragging it out in this particular year? I would caution the minister not to give us the same old answer to the effect that officials do not want to make a mistake. We know that the computers of the Canadian Wheat Board are determining the payment. I would like to know the reason.


Eugene Whelan: As I said, Mr. Speaker, the information has just come into the office, some of it late in March. It has to be double checked. The hon. member spoke about the computers. They are using the most sophisticated equipment; there is no doubt about that. The money is there. There will be a payment later to finalize the payment for that year. I am more optimistic, as was his colleague in answer to the statement I made. I hope we do not have to make a pay-out next year. That would eliminate all the problems and accusations that this is political skullduggery and that type of thing, or that if the program is running like it should, there is an automatic pay-out. We thought it proper that a statement be made in the House today because of the deep concern of hon. members for the farmers of western Canada.


Jack Burnett Murta: The minister can take away any charge of political skullduggery by answering this last question. He indicated that he knows the amount of the total payment; if he checks Hansard he will see that. We have seen $60 million at the present time. What will be the final payment, within $5 million or $10 million if he likes? Can the minister answer that in order to clear up this matter?


Eugene Whelan: No, Mr. Speaker, not at this time. The figures we have been given go all the way from a final payment of around $100 million to $120 million to $140 million. The computers have not fed out any better information than that,

according to information we have received at this time from the trade. We have to make doubly sure we have that so that we do not make an error in favour of the government or against the farmer.


Mr. Gordon Towers (Red Deer):: Mr. Speaker, this is probably the dirtiest trick that has been played on the prairie grain producers for a long time. Is the reason the payment is being made in two phases the fact that the government does not have the money now and is waiting for the producers to contribute for the balance of this crop year and the start of the next in order to contribute to the fund that will be paid in the fall?


Eugene Whelan: Mr. Speaker, the hon. member says this is one of the dirtiest tricks ever played on the farmers. That is false. We need to have all the information. Statistics Canada will not be able to give us the total information we need to make the final payment until July of this year. We hope in other years this will be more automatic. This is something they are adjusting to and learning how to manage. It is not something that has been in operation for several years. It is a new program, one that we think is very satisfactory.


Lorne Edmund Nystrom: The Minister of Agriculture said the final payment would likely be $100 million to $140 million, in that category. If the computers are saying it is at least $100 million, why was a larger initial payment not made now? Is the minister saving some for a larger payment in case there is a fall election instead of a spring election?


Eugene Whelan: Mr. Speaker, the hon. member knows full well that we would love to make the complete payment at this time. However, as I said, we do not have the facts from Statistics Canada. It could be that that payment will be made before the fall; it will depend on how early we get those figures. We have been promised them for July. The hon. member talked about the amount of money. The facts that have to be supplied are the cost of production figures. That is what you need to have.
The hon. member threw figures around here, as he usually does, about a reduction in income and this type of thing. When you talk to most of the farmers in western Canada about their grain production and the price they have received for the last five years-and they are on a five year revolving program for income tax-you find that most will be paying a decent income tax again for the calendar year 1977. The hon. member knows that. When he talks about a tremendous income reduction, he fails to take into consideration the very high price they have received from durum wheat and rapeseed. Those prices are much above the cost of production. They were allowed to sell a tremendous volume because of the fact this government allowed them to delay paying their income tax. We made it so that they would not be subject to heavy taxes because we needed the grain for world markets at that time. The government co-operated 100 per cent in every way to market the grain and get the best possible price for it.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I wish to ask the minister what was the contribution of the farmers plus the accrued interest up to the time of the payments? Second, what
April 5, 1978

is the estimated levy paid by the farmers in the present crop year? Finally, how many cheques are being mailed out?


Eugene Whelan: Mr. Speaker, there are 129,740 participants. The amount of producer levies is $51,893,842.85, government contributions amount to $103,787,685.70, and interest $8,410,223.10, for a total of $164,091,751.65. As I said, this partial payment will amount to an average of $1,100 per producer.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, as an easterner, I would like to ask the minister a question about the statement he made today in the House. This is a joint or split jurisdiction. Is the statement the minister made in the House the same statement being made in Winnipeg by the Minister of Transport (Mr. Lang)? Is it possible that in the statement being made in Winnipeg the minister will indicate that the $100 million to $140 million the Minister of Agriculture (Mr. Whelan) mentioned can be paid as a final payment before June 19?


Eugene Whelan: Not being a political member of the cabinet, Mr. Speaker, I would think we would want to make sure the payments were made after all the facts are in and that this is done in as honest and proper a fashion as we now know how. Hon. members keep using the figures $100 million and $120 million. I also used the figure $89 million. That indicates how varied the figures are at the present time. I want to be doubly sure, whether it be June 19 or October 19, that we can mail the cheques to the farmers so that they can make use of them. Some are suggesting that we may have two elections this year. Who knows?
[ Translation]


Mr. Speaker:: Order, please. I intend to conclude the discussion between the hon. member for Bellechasse (Mr. Lambert) and the hon. member for Swift Current-Maple Creek (Mr. Hamilton). The hon. member for Bellechasse.


Joseph Adrien Henri Lambert: Mr. Speaker, I find really extraordinary the statement just made by the Minister of Agriculture who is not a political member of the cabinet. I shall not ask a question concerning the dates but I wish to ask very seriously a question concerning the last paragraph of his statement. He said that this payment would be a substantial help for grain producers of the prairies considering the reduction of their net income last year. Will that payment compensate for the reduction of their net income last year and ensure them a surplus for the present year to stabilize their operation?


Eugene Whelan: Mr. Speaker, the intent of stabilization is to do just that. We do not pretend that it is going to be 100 per cent of their cost. We used 90 per cent in this the same as we did with the Agricultural Stabilization Act in 1975, only this is a contributory program by the producers and the federal government. The producers pay in $ 1 and the federal treasury puts in
Standing Orders
$2. It will be that kind of program. This is a voluntary program. The farmers are not forced to join. Seventy-seven per cent of the farmers in western Canada saw fit to join this program and 23 per cent did not. Perhaps they felt their economic resources were such that they did not need to join; we do not know. It is their right to join or not join. They have the right to drop from the program with three years' notice if they think it is unsatisfactory.
When all this is known I think it is one of the most fair programs in which the producers can participate. It is also one of the most superior programs that any group of cereal grain producers have in the world.


Frank Fletcher Hamilton: Mr. Speaker,
I have two short questions for the minister which relate to his replies to the hon. member for Dauphin (Mr. Ritchie). Would the minister give us the effective date in relation to the amounts he gave in response to that hon. member? Does the grain farmer have to pay income tax on his contributions now that he is getting them back? Will he have to pay income tax once again?


Eugene Whelan: Mr. Speaker, I would imagine that this is treated the same as all other stabilization payments; it is counted as income. I am surprised by what the hon. member has said. If we rely on what has been said by hon. members of the NDP, the hon. member would not be worrying about the farmers paying income tax because, as they have said, their incomes are so very, very bad. The money he is talking about, and the figures I used in reply to the hon. member for Dauphin, relate to December 31, 1977.


OMBUDSMAN
Stanley Ronald Basford: for leave to introduce Bill C-43, respecting the office of the Ombudsman and matters related or incidental thereto.


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

[Stage Direction]
On the order: Government Notices of Motions:
April 3, 1978-The Deputy Prime Minister and President of Privy Council:
That Standing Order 65(1) be amended by adding immediately after subsection (s), the following:
"(t) Northern pipelines, to consist of not more than 15 members, to which
shall stand permanently referred all reports, orders, agreements, regulations,
directions and approvals mentioned in sections 12, 13, 14, 15 and 22 of the
[Stage Direction]
April 5, 1978
Order Paper Questions
Northern Pipeline Act; provided that the said committee shall report thereon
at least three times in every session."
Provided that this subsection shall be deleted from the Standing Orders on the day on which the Northern Pipeline Agency ceases to exist.
Mir. Speaker: Pursuant to section (2) of Standing Order 21, this notice of motion is transferred to and ordered for consideration under Government Orders later this day.

Mr. Speaker:: Order. I have the honour to inform the House that the Clerk of the House has laid upon the table the tenth report of the Clerk of Petitions stating he has examined the petition presented by the hon. member for Vancouver East (Mr. Lee) and finds that it meets the requirements of the Standing Orders as to form.

[ Translation]


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 196, 517, 675, 719, 833 and 1,431.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Canadian Penitentiary Service and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Mr. Rod Blaker (Parliamentary Secretary to Solicitor General):: By the Ministry of the Solicitor General: 1. As of October 20, 1977, 749 persons were under contract to the Canadian Penitentiary Service.
2.	(a) 1975/76: $377,631,48; (b) 1976/77: $1,399,105.60.
Note: The above figures reflect the total number of persons under contract and the total amount so paid. Information on the number of retired public servants under contract cannot be provided as the records of the Canadian Penitentiary Service are not kept in such a manner as to facilitate extraction of this information. However, appropriate measures have been taken in order to have this type of information available in the future.


Mr. Howie: Has the Ministry of State for Science and Technology or any of its commissions or councils or the Department of Energy, Mines and Resources, instituted any programmes, projects or taken any measures to promote reforestation of harvested timber lands since January 1, 1975 and, if so, what measures have been implemented?


Yvon Pinard: I am informed by the Ministry of State for Science and Technology and the Department of Energy, Mines and Resources as follows: The policy of the Ministry of State for Science and Technology is to formulate and develop policies in relation to the activities of the government of Canada that affect the development and application of science and technology. The objective is to assure the optimum use of science and technology in support of national objectives. The ministry has no laboratories and does not award grants-in-aid of research, scholarships or fellowships. Forestry and/or reforestation are not within the administration responsibility of the Department of Energy, Mines and Resources.


Mr. Cossitt: 1.	With reference to the answers to Question Nos. 29 and 30 of the Second Session of the 30th Parliament which stated in part that the Minister of Agriculture made 188 trips on government aircraft to his Constituency in Windsor or from Windsor to elsewhere, on how many such occasions, if any, did the aircraft leave the Minister in Windsor, return to Ottawa or elsewhere and then subsequently fly back again to pick up the Minister?
2.	Were any such empty flights included in the total of Department of Transport and Department of National Defence aircraft used by the Minister and, if not, for what reason?
3.	What was the total number and cost of all flights made to or from Windsor by the Minister from the points of origin, including flights returning to or from Windsor from points elsewhere without the Minister on board?


Yvon Pinard: I am informed by the Department of National Defence and Transport Canada as follows: 1 and 2. The requested information was provided in answers to questions No. 29 and 30 tabled October 17, 1977.
3.	The requested information regarding flights to and from Windsor was provided in the answers to questions No. 29 and 30. For information regarding the costs of all flights, see reply to question No. 2,881 answered October 17, 1977.


Mr. Jones: 1.	In competition 77-DSS-CCID-5126M for the position of Manager, Records Office (As-3) in the Superannuation Division of the Department of Supply and Services, to whom is the position open?
2.	Does the Public Service allow educational leave at their expense and are there unemployed persons qualified to do the work the employees are being trained for and, if so, for what reason is such leave granted?

April 5, 1978

3.	(a) How many employees of the Public Service in Moncton are on so-called sabbatical leave (b) what are their names (c) what courses are they enrolled in (d) how will such courses assist them in their work?
4.	How many persons were hired from Moncton for positions in the Superannuation Division of the Department of Supply and Services to be located in Moncton and are presently being trained in (a) Ottawa (b) Montreal?


Yvon Pinard: 1. Employees of the Superannuation Division, Ottawa-Hull area, and employees of that part of the Public Service, Atlantic region, to which the Public Service Commission has the exclusive right to appoint, who occupy positions of which the maximum of the salary range is at least $16,498 per annum as of November 28, 1977.
2. The Public Service Commission allows at its own expense educational leave which is granted under the following conditions: firstly, under some collective agreements, the employer is compelled to grant educational leave to a minimum of its personnel (e.g., for the ED group, the employer has to set aside 1 per cent of his resource-years annually for educational leave). In the Public Service Commission, almost all educational leave is granted under collective agreements. Secondly, the other condition under which this type of leave is granted is governed by the following criteria: organizational requirements; the need to improve the performance of employees. In order to meet future needs, constantly changing organizational requirements and finally to better prepare more and more qualified employees, training and development policies provide for educational leave. The Public Service Commission does not employ additional resources since resource-year limitations and internal recruitment policies compel the Public Service Commission to call on its own personnel for the necessary skills.
In so far as the Department of Communications is concerned: 3. (a) Two employees; (b) (1) Mr. Douglas Maloney; (2) Miss Claudette Drisdelle; (c) (1) Masters in Business Administration-University of Moncton; (2) Electronic Technology-New Brunswick Institute of Technology; (d) (1) This type of training will provide the employee with a greater knowledge and additional skills thereby assisting the Moncton Regional Office in its senior management activities. (2) To better perform radio inspector duties in the Atlantic Provinces.
In so far as the Department of Regional Economic Expansion is concerned: 3. (a) One. (b) Donald J. Savoie, (c) Doctoral program at Queen's College, Oxford University, (d) The program consists of course work in policy development and in policy and program coordination. It will have specific application to Mr. Savoie's duties as a program coordinator.
In so far as the Department of Transport is concerned: 3. (a) There are presently no employees from Transport Canada on leave, that may be described as sabbatical, in Moncton. There is one employee from the Atlantic region who is currently on leave-without-pay for educational purposes, (b) This employee is Mr. Douglas M. Consul, (c) Leave was granted to enable Mr. Consul to complete a degree in electronic engineering, at Seneca College, Toronto, at his own expense. Due to health reasons, Mr. Consul was unable to retain his licence as a helicopter pilot, and is taking this training to acquire a second
Order Paper Questions
profession for subsequent re-employment in the Public Service, (d) This course is a recognized qualification in the field of electronic engineering.
In so far as other departments and agencies located in Moncton are concerned: None. 4. Fifty; (a) Fifty; (b) None.


Mr. Dick: 1.	Is it the government's intention to relocate 750 positions in the Surveys and Mapping Branch of the Department of Energy, Mines and Resources to Sherbrooke, Quebec and, if so, how many employees will be involved?
2.	What is the estimated cost of moving the employees?
3.	What is the number of (a) permanent (b) term (c) casual employees working in the Branch in Ottawa?
4.	What percentage of the employees speak (a) English (b) French as their mother tongue?
5.	Is their a cartography course or degree programme offered at the University of Sherbrooke or at any other university, community college or CEGEP in the Province of Quebec?
6.	Prior to the decision to relocate such employees, did the government calculate the number of spouses who presently have jobs in the Ottawa area?
7.	Is the government considering compensation for spouses who will have to give up their jobs in order to accompany relocated employees and, if so, in what manner?


Yvon Pinard: I am informed by the Department of Energy, Mines and Resources and Treasury Board as follows: 1. If the relocation of the Surveys and Mapping Branch is confirmed, 750 employees will be affected.
2.	Excluding facilities and other costs, the actual expenditure requirements for the movement of employees will depend upon the number of staff members who eventually agree to relocate. The unit cost of movement, per employee, is estimated at $13,800.
3.	(a) 878 permanent; (b) 90 term (over six months); (c) 19 casual (less than six months).
4.	72 per cent of employees speak English as their mother tongue or first official language. 28 per cent speak French as their mother tongue or first official language.
5.	Yes.
6.	No.
7.	The entitlements of spouses are covered in the Decentralization and Relocation Guidelines which were endorsed by the National Joint Council on December 7, 1977 and issued by the Personnel Policy Branch of the Treasury Board Secretariat on December 21, 1977. The relevant paragraphs read as follows: "Indeterminately employed spouses of relocated employees may, if they make their wishes known to their departmental personnel office, be granted leave of absence without pay for a period not in excess of twelve months. During this 12 month period, such spouses will be entitled to the services of the PSC's transfer system if they wish to be considered for reassignment within the Public Service, either in the new location or elsewhere."
4172

April 5, 1978
Motion for Production of Papers GRANTS TO CHARITABLE AND NON-PROFIT ORGANIZATIONS


Mr. Robinson: For each year 1971 to 1978, did charitable and non-profit organizations receive grants of public funds and, if so (a) how many (b) in each case (i) in what amount (ii) for what purpose (iii) was an audited financial statement filed by the recipient?


Yvon Pinard: The information requested is not readily available. To provide an accurate reply in its entirety, would entail a lengthy and costly examination of the accounts of every department and agency including their regional offices. The costs in manpower and time to undertake such a large amount of work would be prohibitive.


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


Some hon. Members:: Agreed.

[ Translation]


Yvon Pinard: Mr. Speaker, if question No. 166 could be made an order for return, that return would be tabled immediately.


Mr. Friesen: How many persons in Canada were charged and convicted of murder or manslaughter more than once and, in each case (a) what is their name (b) how was the sentence disposed of (c) on what date was he/she eligible for parole where a prison term was involved (d) what was the length of the sentence served?
Return tabled.


Yvon Pinard: Mr. Speaker, the motion for the production of papers No. 49 is acceptable to the government subject to usual reservations concerning confidential documents and to the approval of interested government authorities.


Mr. Speaker:: Subject to the reservations or conditions expressed by the hon. parliamentary secretary, shall notice of motion No. 49 be deemed to have been adopted?


Some hon. Members:: Agreed.
[Mr. Pinard.1


[Stage Direction]
Motion No. 49-Mr. Munro (Esquimalt-Saanich):
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House copies of correspondence between the federal and provincial authorities relating to the accounting of federal funds provided under the Federal-Provincial Programme for Bilingualism in Education.
Motion agreed to.
Yvon Pinard: Mr. Speaker, I ask that all other notices of motion be allowed to stand.


[Stage Direction]
Motion agreed to.


Sinclair McKnight Stevens: Mr. Speaker, pursuant to the notice I sent you earlier today I wish to ask leave to move the adjournment of this House, pursuant to the provisions of Standing Order 26, for the purpose of discussing a specific and important matter requiring urgent consideration, namely the shattering of world confidence in our economy as evidenced by the selling off of Canada's April 1 bond issue in New York, the arrangement of a further emergency credit of $1 billion from our Canadian chartered banks, the imploring by our Minister of Finance (Mr. Chretien) that our provinces, municipalities and corporations borrow more actively in foreign markets, only to be countered by the reported statement by the Solicitor General (Mr. Blais) in Sarnia yesterday that "international debt is caused by Canadian businesses borrowing on the international market" which he felt was bad.
The urgency of this matter has been aggravated by the refusal of the Minister of Finance to come before the Standing Committee on Finance, Trade and Economic Affairs for the next two weeks, notwithstanding the fact that he has not appeared once on his main estimates for this year.


Mr. Speaker:: matter requiring urgent consideration, namely the shattering of world confidence in our economy".
The balance of the notice is evidence, as is the language used, of that opinion. Nevertheless, the matter itself is the shattering of world confidence in our economy, which is an opinion rather than an event. 1 do not make a final determination on that, but it seems to me that the language of the Standing Order does not really lend itself readily to a debate of an opinion, as it does to the consideration of a specific event. However, I say again that I do not make that as a final determination. That could be subject to argument and in certain circumstances it may be applicable. I do not think it is here.
As I said, there are three reasons. The second is that on February 22 I did grant an application pursuant to this Standing Order in respect of a matter proposed by the hon. Leader of the Opposition (Mr. Clark), in which he was joined by the hon. leader of the New Democratic party (Mr. Broad-bent). The language, of course, was different, but it did relate to the fall of the dollar as it reflected confidence in our economy. While the language is not identical, I would have some misgivings, in the face of the provisions of paragraph (16)(b), about granting a second application under this order allowing a discussion on the same subject-matter. As I say, 1 might be persuaded otherwise in that regard.
The third reason, which 1 think involves the final determination, is that in answer to questions this week the Minister of Finance has indicated, and he did so again today in answer to a question, that after tomorrow's cabinet meeting he will be giving an indication about the presentation of a budget. 1 really think I would have to overlook entirely the provisions of paragraph (5) of the Standing Order if I did not at least wait to see whether such a budget is to be presented. The matter of the accountability of the Minister of Finance in this regard would seem to be answered in that way.
To what extent a full debate will be possible after that, of course, remains to be determined. In any case, as long as that remains a serious possibility I should think that the provisions of paragraph (5) would prevent the Chair from granting the application.
For those three reasons I do not find that the matter is a proper matter to be discussed at this time under Standing Order 26.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, April 3, consideration of the motion of Mr. Chretien that Bill C-18, to amend the
Anti-Inflation Act
Anti-Inflation Act and guidelines, be read the third time and do pass.
Sinclair McKnight Stevens: Mr. Speaker, it is rather fortunate that I am able to speak at the moment on Bill C-18. I earnestly hope that the Minister of Finance (Mr. Chretien), who is shunning this parliament and is unwilling to appear before the Standing Committee on Finance, Trade and Economic Affairs to give an accounting and explain some of the mistakes his department has been making in its administration, particularly in relation to the monetary situation, will take part in this debate.
It is fortunate, Mr. Speaker, that this debate is able to continue. I enjoy having the opportunity to add a few more remarks to the record concerning our position with respect to the controls position and Bill C-18 itself. More specifically, I hope that the Minister of Finance will accept this as an opportunity to come into this debate and give a meaningful speech on the federal government's present position with regard to our monetary status both domestically and internationally.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: If the Minister of Finance is within hearing distance-and I know his parliamentary secretary is here-I will make this deal with him: I will stop speaking to give him an opportunity to speak in this debate if he so wishes. He can have the remainder of my time, Mr. Speaker, and I will be one of the most attentive people in this House when the minister explains to the members the policy that he is trying to follow- or more specifically, what appears to be the lack of policy that he is following-concerning the economy of this country.


Stanley Howard Knowles: What is the remainder of unlimited time?


Sinclair McKnight Stevens: Well, Mr. Speaker, I will leave that up to the discretion of the Minister of Finance; if he wishes to talk for a long period of time that will be up to him.
The time has come, Mr. Speaker, when we need some clarification concerning the direction of the economy in this country. There was a time when, presumably, the government was able to fudge the issue sufficiently-at least domestically-and get by with a very poor economic performance. Now, however, they have come unstuck. They have come unstuck because the government has raised the attention of the international bankers of this world. Most of us who have had to deal with bankers on a credit basis know that bankers can be very cold and ruthless in getting to the facts.
As far as I am concerned, this is no longer a partisan question. It is no longer a question of rhetoric. This country deserves better economic leadership than it has been getting from the Trudeau government or the Minister of Finance. In dealing with the Minister of Finance it is no overstatement to
80033-51*72

April 5, 1978
Anti-Inflation Act
say that this is literally the weakest performance of any minister of finance in this country since confederation.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: I say that because I think that the minister can be faulted virtually on all fronts. He refused to answer a question today when I asked him this: In view of the fact that unemployment has risen since he has taken office last September-inflation has risen, his deficit has widened, the dollar has fallen-does he feel he has done anything wrong? Normally, I would have expected him to get to his feet and clarify the situation or defend himself. However, the nature of the question shocked him so much that he sat dumbfounded, realizing I had hit upon the truth.
The Minister of Finance has made some serious mistakes. International financial circles are able to identify almost within the hour when mistakes have been made by this minister. These mistakes have helped to shatter the Canadian economic image throughout the world and resulted in the further decline-of our dollar. This is due to the minister's presentation and lack of comprehension of the nature of this job. In short, he has bumbled, but unfortunately he is not the one who suffers most. It is the Canadian public that are suffering from his want of knowledge in a department that is so vital to Canada's wellbeing today.
In saying that, and in dealing with the question of inflation under Bill C-18, we must bear in mind that one of the contributing reasons for the decline of our dollar is that the international banking world is judging us as an inflation-prone nation when other nations have been able to get control of their inflation. They find that Canada has become a stand-out nation where inflation continues to rise. As we said on Monday, it has risen by 9.5 per cent. It continues to rise much faster than it has been rising in the United States and is almost triple the rate in Germany. Switzerland has no inflation.
We are told by this Minister of Finance, backed up by his emperor overlord, the Prime Minister (Mr. Trudeau), that they do not know what to do to control inflation in this country. In my opening, rather brief preliminary remarks last Monday, Mr. Speaker-I see the parliamentary secretary to the Minister of Finance is laughing. Frankly, the question of our economic condition in Canada at the present time is not a laughing matter.
In the opening remarks I made last Monday I pointed out, for example, that the outflow from our foreign exchange reserves was costing Canadians dearly. It is easy to forget that on August 31 last year, about six months ago, United States reserves held on behalf of the Canadian public by the Bank of Canada were $2,558 million. Since that time and with the arrival of the Minister of Finance in September to take over the reins of finance in this country, we have had a deterioration in those reserves of $1.6 billion. If you add the outflow of United States reserves so far in April alone-Monday, Tuesday and today-there has probably been $1.7 to $1.8 billion lost with respect to the United States reserves that we held

when this Minister of Finance took over the reins on behalf of the Government of Canada.
If you translate that into more meaningful terms, it means that the ineptitude and lack of comprehension shown by the Minister of Finance has cost the average taxpayer in Canada $180 of the United States reserves that he rightfully could have expected to be maintained by the Bank of Canada on his behalf. It has cost every taxpayer in Canada $180.
Let me put that into perspective. When we are talking in terms of billions of dollars-and frankly most of us, including myself, cannot comprehend what a billion dollars is-let us not forget that our reserves have now dwindled to the point where we, in relation to our external obligations, be they of a debt nature or trade nature, have the thinnest reserves of any industrialized nation in the world. In that context it is not too hard to understand why the international community has the jitters about Canada when they see our reserves are so thin and they observe the bumbling, stumbling actions of this government. When the international community sees the half measures the government brings in in order to try to counter the lack of confidence that there is in the system, it is not hard to understand why the run on the Canadian dollar continues. The obvious reason why the run continues is that the government's program to counter inflation in this country has failed.
That is why, when dealing with Bill C-18, I think it wise to continue to press this government for an explanation of why the program they enunciated on October 20, 1975 to help fight inflation in this country was not carried out. If you recall, Mr. Speaker, the program was quite explicit. It said the government was going to make some basic changes in the way they were running the country. They were going to be restrained in their own fiscal spending. They were going to be restrained in their monetary growth. They were going to start deregulating industry and set up a controls mechanism through the AntiInflation Board that somehow would keep the lid on prices, profits and wages in the country.
I think the time has come to ask the government what went wrong with the program that they told the Canadian people, and certainly this parliament, they intended to follow. Certainly we do not have the fiscal restraint. Anybody who wishes to attend the committees of this House and review the estimates now before us-the $50 billion spending that the government contemplates for the coming year-realizes there is no fiscal restraint. We have not had the monetary restraint referred to in October of 1975, we have not had the deregulation referred to, and, of course, the controls that were presumably supposed to keep the lid on the rising prices, profits and wages have not worked either.
I ask what went wrong because we must not forget that the targets the government set for themselves were, if anything, high targets. When they said we would be getting down to 4 per cent inflation this year, that was not only an attainable goal if we had been in power in 1975, it was a high goal. If Germany got inflation down to 3.5 per cent this year compared
April 5, 1978

to our 9.5 per cent, then I must ask this government why they cannot do the same. If Switzerland can get down to zero inflation at the present time compared to our 9.5 per cent, then I ask this government why they cannot.
The hard fact is that this government does not have to live with some of the problems a country like Switzerland has. Other than salt, basically Switzerland has no resources whatsoever. They have to import practically everything they need. That is not our situation, Mr. Speaker. We are virtually self-sufficient in energy, we are virtually self-sufficient in such resources as nickel, iron and other minerals and we are rich in agricultural products. In short, of all industrialized nations, we have fewer problems than others. Switzerland, Germany and Japan, for instance, have very, very serious problems but in spite of them have been able to handle their level of inflation in a much more satisfactory way.
The figures I used are on the record, Mr. Speaker. I shall not take hon. members through the Bank of Canada's February 1970 Review again. It points out the comparative position as far as consumer prices are concerned in the various countries listed. We must not forget, however, that the Bank of Canada-and few members will want to dispute what the Bank of Canada says in this regard-points out that in December, 1977, the 12-month inflation level in the United States was 6.8 per cent compared to the Canadian 9.5 per cent; the Japanese inflation rate was 4.9 per cent compared to our 9.5 per cent; and the German rate was 3.5 per cent compared to our 9.5 per cent. In fact, all those major industrialized countries were lumped together and 7.2 per cent is the average inflation level compared to our 9.5 per cent. I think those Bank of Canada figures are a sad testimony to the effective management of our economy by this government.
Toward the end of my opening remarks on Monday, Mr. Speaker, I said that I should like to deal with the historical perspective of this question. I hear the Parliamentary Secretary to the Minister of Finance (Mr. Lumley) suggesting that I should shorten my remarks. I find it not only reprehensible that the government does not have the courage to tell the people of Canada what they believe the facts to be, but that they seem to have absolute disdain for anybody in this House who tries to enter the debate of the day as it should be debated.


Mr. Lumley:: A point of order, Mr. Speaker. My comments to the hon. member were that we are debating Bill C-18, amendments to the Anti-Inflation Act, not having a general discussion on the Canadian economy. The hon. member has already spoken for almost two and one-half hours. It is taking the eloquent gentleman from the business world two and one-half hours to make his point. That is the point I was making, Mr. Speaker.


Thomas Gordon Towers: You missed the point entirely.


Sinclair McKnight Stevens: As the hon. member for Red Deer (Mr. Towers) says, the parliamentary secretary missed the whole
Anti-Inflation Act
point. The point is, if the parliamentary secretary feels I have taken a few minutes too long-


An hon. Member:: A few hours too long.


Sinclair McKnight Stevens: The fact is that over there the Minister of Finance, his parliamentary secretary, the Prime Minister or any minister of that cabinet have not taken one minute to give their explanation of the failure of their anti-inflation program as enunciated in October of 1975 to the Canadian people. That is the point. I think perhaps even more effectively than he realizes the parliamentary secretary has demonstrated the complete disdain of his party for this House of Commons. The fact that he could get up and be critical of one member speaking for a few minutes longer than he likes and the fact that the minister chooses not to say one word on this, if not the most important problem in Canada, certainly the second most important problem, inflation, is appalling. What does Bill C-18 deal with if not inflation? It is simply legislation amending the Anti-Inflation Act that this government, counter to their 1974 election promises, introduced and passed in this House in 1975. That is what I am debating.
We have another interjection from a government supporter, the hon. member for Scarborough West (Mr. Martin). They speak from their seats much more effectively than from their feet, Mr. Speaker.


Mr. Martin:: We do not take 2'k hours.


Sinclair McKnight Stevens: The hon. member for Scarborough West says I have spoken so long that it is very difficult for others to get into the debate, but I should like him to stand up and indicate whether the Minister of Finance has agreed to enter the debate. Perhaps the Parliamentary Secretary to the Minister of Finance could indicate that. If other gentlemen can assure me that the minister will come and join in the debate, I will stop within the minute and give him an opportunity to put his comments on the record concerning the anti-inflation program introduced by this government in 1975.
I should like to return to my concluding remarks when I spoke on Monday concerning Bill C-18, Mr. Speaker. I feel it is proper to put into historical perspective what "the Trudeau government role" has been on this whole question. Let us not forget that a large proportion of the money printed in recent years by the Bank of Canada has gone to finance the Trudeau government's deficits. For the members of this House who were not here Monday night when I dealt with this question of the creation of inflation by the over-printing of money in relation to the real growth in the economy, I would reiterate that that is the basic cause of inflation in any nation.
As I pointed out, during the ten years of mismanagement by the Trudeau emperor, we have had money created to the extent of 156 per cent in this country. During that same period of approximately ten years the real growth in the economy, Mr. Speaker, was 55 per cent. Is it any wonder that we had 100 per cent inflation during the present government's tenure

April 5, 1978
Anti-Inflation Act
of office since 1968? These are the facts. Basically, let us not forget the more people pretend that they do not know-and certain politicians pretend that they do not know what causes inflation-the more they are not being fair to the Canadian public. Inflation basically cannot be caused in a nation unless more money is printed than the real growth of the economy permits.
That is why I come back to this question of the nature of the printing of money by the Bank of Canada. The fact is the Bank of Canada printed money to finance 33 per cent of the federal cash requirements needed by this government in the past five years. The $5.6 billion of federal securities purchased by the Bank of Canada represents more than 60 per cent of the total addition to the money supply over the period I am referring to.
Let us bear in mind that when the Prime Minister took the reins of power, when he became the senior executive in this country, the total federal securities owned by the Bank of Canada were approximately $4 billion. Since that time securities owned by the bank have risen to almost $11 billion. That increase from $4 billion to $11 billion is what people mean by monetarizing the debt of the nation. When the debt of the nation is monetarized, that is the classic way to print more money; more money is flushed into the system which causes the inflation we are now living with. I cannot dwell on that point too often because it is the point that every government in power which acts irresponsibly with respect to the management of the economy likes to forget. The main cause of inflation occurs when governments over-print money in relation to real growth. The terrible culprit in Canada has been the present administration.
The spending practices of the present government created the budgetary deficits which where partially financed by increasing the money supply, as I have indicated. Since 1968 federal spending has more than quadrupled. If the $50 billion figure is accepted, it is up almost five times. In 1968 the federal government announced preliminary federal spending intentions of $10.9 billion. In 1979, using the government's own figures, it will be $46.5 billion, which is the figure I am referring to when I say there has been approximately a fourfold increase in government spending.
Before I go further, Mr. Speaker, let us make a quick review of the present administration's strategy against inflation. First of all are the years 1973 to 1975. Early in 1973 it became apparent that the administration had not licked inflation as the Prime Minister was wont to claim. In 1971 we find that the rate of inflation was approaching 6 per cent. It was showing no signs of lessening since the money supply was growing in excess of 15 per cent. In short, the return of inflation in that period was not surprising.
In the budget of February, 1973, the present administration stated that fiscal measures were, and I quote, "aimed at reducing inflationary pressures in Canada". The strategy was to increase supply, to increase disposable incomes, to protect Canadians against inflation and to restrict federal government demands upon the economy. In many ways, are not those

familiar terms even today? Wage and price controls were flatly rejected in that budget.
That strategy, of course, was a failure. Inflation which stood at 5.8 per cent reached 9.6 per cent a year later, and was still rising. The strategy might have had more effect if it had been properly implemented. Where smaller federal demands upon the economy were promised, federal spending actually grew 23 per cent in the following year. Let us not forget that figure.
In spite of the fact that in the February, 1973 budget we were told that the government was at last going to restrain their spending, in the very next year they increased it by 23 per cent. By the next budget, in May, 1974, inflation had reached 11 per cent and was still rising. The budget reflected to use the government's words, "determination to deal with inflation." Lip service to spending restraint was dropped. Federal spending grew at the even faster rate that year of 28 per cent. Once again the present administration rejected the illusory magic, as they called it, of controls. During the subsequent election campaign-how well we all remember- the Prime Minister called controls "a proven disaster looking for a new place to happen". At the same time he pledged his government, and I quote again, "to bring inflation under control." That was the Prime Minister's pledge to the people of Canada which presumably influenced them in voting for his re-election in 1974.
With the rate of inflation approaching 12 per cent the then finance minister, Mr. Turner, prescribed the same medicine once again in November 1974 that he had been prescribing previously and unfortunately it had the same effect. The inflation rate was hovering around 11 per cent when he presented his last budget in June 1975. The principal measure was, again, promised restraint in federal spending. While the present administration claimed it had cut $1 billion from federal spending plans, federal spending was still forecast to increase by an alarming 11 per cent over the year before. That, Mr. Speaker, is a very brief summary of what the government said and did during the 1973 to 1975 period.
Let us take a look at 1975 through to 1978 and at what brings us to the debate on Bill C-18 at the present time. You will recall, Mr. Speaker, that by October 1975 the inflation rate was still in excess of 10 per cent. After nearly three years of budgets directed against inflation, three years during which the government had consistently rejected the use of wage and price controls, the present government introduced the antiinflation program, which I have referred to. The central component of it was none other than wage and price controls.
At this point I should explain something. Most of us will recall that the minister of finance who presided over the economic affairs of this country during the tremendous spending binge which occurred was none other than Mr. John Turner. But Mr. Turner presumably had a falling out with the Prime Minister in that the Prime Minister was a controls-ori-ented person. He liked the sound of controls. The falling out resulted in Mr. Turner resigning and Mr. Macdonald being brought in to do the dirty work of imposing controls.
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It is interesting to note that there was a change of ministers at that time. But not only was there a change of ministers. As we know, the deputy finance minister during most of the time Mr. Turner was minister of finance also resigned, and he has since stated in unequivocal terms that the inflation problem with which we are confronted today was contributed to in large measure by the overspending of the federal government during the Turner years. That is a little of the background.
Then we find that the anti-inflation program of October, 1975 proposed to reduce inflation from its level of 10.6 per cent to 4 per cent by October, 1978. As I said earlier, that 4 per cent target was not an overly high one. It was relatively realistic. The anti-inflation program also promised that federal spending would be restrained, that the growth in the money supply would be greatly restricted, that there would be "a review with some urgency of the federal government's responsibility for creating price rigidities in its own area of responsibility", and that there would be a reassessment of the cost to the private sector of government rules and regulations. Finally, a review of the role of regulatory agencies was to be undertaken.
The promise of federal spending restraint, Mr. Speaker, has not been kept. Over the two years of so-called restraint the estimates of federal spending have risen by 28 per cent, and those increases have occurred due to the administration's own internal operating costs. Let no hon. member forget this. During the two years of so-called restraint, operating costs have increased by 37 per cent. That, Mr. Speaker, is the government in action. That, if you like, is charisma in action for the Canadian public to enjoy. The cost to the taxpayer has been horrendous. If the cost of federal operations had run parallel to the inflation guidelines of the control period, federal expenditures would today be $2 billion lower than they are.
Let us remember, also, that the growth of the money supply has been held within the limits proposed by the Bank of Canada primarily because the targets were so generous. The first set of targets called for money supply growth amounting to between 10 per cent and 15 per cent effective September, 1975. The second set called for growth rates between 8 per cent and 12 per cent effective March, 1976, and the third set for rates between 7 per cent and 11 per cent effective last June. These targets all represent rates of monetary expansion which are not consistent with price stability. They are an improvement in relation to previous performance but they are still, in our opinion, too high.
Throughout most of the controls program monetary expansion has been below the target range. Recently, however, the money supply has been growing at much higher rates. In December, 1977 the money supply was 12 per cent higher than in December, 1976, a rate of expansion higher than the target range. If such growth continues, the Bank of Canada will slip back into an inflationary posture not much different from that which created the initial problem.
The administration has given us no indication that it is reviewing the contribution to inflation made by federal agen-
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cies. Indeed, the federal government has specifically exempted a number of Crown corporations and agencies from the application of its own price and profit control guidelines. Such an action clearly indicates that the administration does not view the activities of its own agencies as being in any way inflationary.
Further, the government has published no studies and offered no initiatives relating to its commitment to reassess the economic costs of federal regulations. Recently the minister of state responsible for small business announced he would establish a program to reduce the paperwork burden on small business. The first step, Mr. Speaker, is to be a study. Guess of what. A study of what the problem is. More than two years after a commitment is made to reduce the regulatory burden, the present administration has progressed as far as studying the problem. In order to do so they intend to appoint, they say, a comptroller of the paper burden, with a staff of 20.


Mr. Hnatyshyn:: Pathetic!


Sinclair McKnight Stevens: If it were not so sad it would be almost laughable to compare the rhetoric of the government with its actions. There has been no indication that the government is reviewing or has reviewed the role of its regulatory agencies. Ministers have admitted publicly that they do not know how many Crown corporations the government owns; the total is over 385 and they are still counting. It is unlikely the administration will be able to accomplish the review it promised even if all the regulatory agencies can be identified. New regulatory agencies are still being created; for example, there is the national broiler board, the Northern Pipeline Agency, the competition policy advocate and, of course, the comptroller of the paper burden.
Let me add one almost humorous note. Here we are dealing with Bill C-18, which proposes to amend the anti-inflation legislation. The government, according to the Financial Post this week, has given an assurance to the 700-man staff of the AIB that they will be shifted to other government jobs should the board ever be dismantled. Here is a government which created an agency, one which it told us would never be established, and then announced that the number on the staff would not be more than 200 temporary employees. Now we find the board has a staff of 700, and when it is suggested the board might be dismantled the employees are assured they will never be allowed to drift away from the public service but will be guaranteed jobs at salaries comparable with those they now receive under the AIB.
Let me now deal with the lack of success-indeed, I might say the failure-of controls. Since the present administration has been unwilling to honour its commitments on spending restraint, monetary restraint, and the proliferation of bureaucracy, it is not surprising that wage and price controls have been unable to slow inflation. In fact, the failure of this administration to implement supportive policies has made controls virtually irrelevant in the anti-inflation campaign.

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Wage controls, for example, did not halt the erosion of our competitive trade position with the United States. Studies by the Conference Board of Canada indicate that the deterioration in our competitive position has continued throughout the controls program. All the devaluation of the Canadian dollar has done is restore our competitive position to what it was in 1975 when our competitive position was so poor that controls were required.
On the question of the effect of a declining dollar hon. members will recall that this party initially pointed out to the government that a falling dollar is not a mixed blessing. The government was saying that the fall in the dollar would help exports, but we were pointing out that it would also trigger a new round of inflation in the country. As the Conference Board pointed out in the quote to which 1 referred, the fact is that the devaluation which had occurred up to the date of the report simply had put us back to the competitive position we were in in 1975, the very year the government said it had to bring in controls because we had lost our competitive position in relation to the rest of the world.
The important thing to bear in mind now is that the government at last seems to be coming to its senses. It is realizing that the falling dollar is in fact generating its own inflation, and we now find that the Governor of the Bank of Canada in a release dated April 3 stated that, and 1 quote:
-too large an exchange rate adjustment over too short a period of time would not be helpful in restoring Canada's international competitive position on a durable basis because of the risk that it would undermine the substantial progress Canada has made to date in overcoming inflation.
In short, the economy is in a tailspin. The government has allowed the dollar to drift lower, and to the degree that it has allowed the dollar to drift lower it is in turn generating inflation about which even the governor of the Bank of Canada has become alarmed.
Let me touch on another point. In our opinion the price and profit controls imposed on the nation through the government's anti-inflation program were quite an unnecessary burden on the business community. Corporate profits have been so sluggish that in 1976 only 20 per cent of the firms subject to profit controls had been within 10 per cent of the allowable maximum profit. Most firms had such small profits that the profit restraints were unnecessary. In 1976 Canadian business was generating only 51 per cent of the maximum profit allowable under very strict profit restraining guidelines. The steadily worsening economic situation has narrowed business profit margins independently of controls. Profit margins of industrial corporations had already fallen from 1974 levels of 7.2 per cent to the level of 6.1 per cent in the nine months of 1975 before controls were introduced. Margins fell further in 1976 to 5.2 per cent and declined to 5.1 per cent in 1977.
Wage controls, on the other hand, did not halt the erosion of our competitive position, nor were profit controls necessary in the current economic circumstances. The costs of controls have been huge. Labour-management relations have been damaged severely by prolonged federal intervention. Business confidence and investment are low. These costs might have been sustain-

able if inflation had fallen to forecast levels, but as we have pointed out, inflation has not come down to the 4 per cent target. Where the inflation rate was originally forecast to be in the 4 per cent to 6 per cent range at this time, as we know the rate is now 9.5 per cent. The Trudeau government's controls have failed. Not only have they failed, but they have produced the costs to which I have referred which have had to be borne by business. Let me put this into perspective. One corporation has told me that its cost for staff and administration simply to cope with the anti-inflation program is $500,000 a year.
What are the new policies enunciated by this administration to fight inflation? The government now says that the phase-out of the disastrous controls program will begin on April 14 of this year. However, as I indicated on Monday, 70 per cent of workers and 80 per cent of companies will remain under controls until the end of 1978. Even after the expiry of controls certain rules and guidelines will continue to apply. Monitoring of prices and wages in the post-controls period is now to be undertaken by the Economic Council of Canada. Whatever group does the monitoring will be a watchdog, without real powers.
We are told that inflation will reach 6 per cent in 1978. Hon. members will recall that at the first ministers' conference the government forecast an inflation rate of 3.5 per cent by 1982, but no policies have been implemented or even proposed to move Canada from the current 8 per cent plus inflation level to the 3.5 per cent level the government claims can be achieved by 1982. Let me be candid on that. We believe that an inflation level lower than 3.5 per cent could be achieved by 1982. That is not the point. What we are saying is that it will not be achieved, any more than was the 4 per cent inflation level achieved this year, if the government does not now take the necessary steps to ensure that it will be achieved.
Repeatedly the Minister of Finance likes to maintain in his inept way that he sees nothing wrong with existing federal fiscal and monetary policies. That is most unfortunate.
Let me now deal with what we in the Progressive Conservative party think should be done in this country to reduce inflation. First of all, we should end controls, but they should not be ended in this disgraceful way by saying that there will be a decontrol period starting on April 14, but in fact keeping 70 per cent to 80 per cent of the employees and companies in this country bound up until the end of the year. We believe that, if anything, wage controls have been inflationary. What starts out as a wage ceiling over time becomes a floor for wage settlements. That is a consequence of a controls program which lasts too long.
Profit controls, no doubt, have been inflationary. They have retarded investment projects which would have protected the economy from inflation resulting from supply shortages. Profit controls have increased the burden of regulations upon business, added to cost and reduced efficiency. Profit controls have encouraged business inefficiency as a method of disposing of excess revenue.
A second thing we would do to counter inflation would be to cut income taxes. Consumers need a break. The 6 per cent
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ceiling on wage gains in 1978 is inadequate to compensate workers for the inflation expected during this current year. Without a tax cut the buying power of consumers may well fall. Wage earners must be protected against inflation to avoid a catch-up explosion of wage demands in the future. We feel the tax cut should be large. It should be approximately the $2.2 billion the government is overspending at the present time. I referred to that earlier. This means that more than 1 per cent of Canada's national output, or gross national product if you like that term, will be returned to individual taxpayers; that 500,000 Canadians will be taken off the federal tax rolls if our tax cut were implemented. I say that 500,000 Canadians would be taken off our tax rolls because we recall how many ministers of finance have loved to use that term.
Not only do we feel that the tax cut would benefit the average Canadian but we believe it should be directed so as to bring the main advantages to those earning up to $16,000 a year, who would receive nearly $300 if you work out our program. In effect, we are proposing a tax cut which would give most Canadians one week's extra pay. We say that one of the problems in the economy is the lack of consumer buying. We must get the consumer buying once again, creating the demand to which the businessman will respond through additional production, and eventually the creation of more plants and the buying of more equipment to serve that demand.
If you assess the thrust of this government's stand with respect to making our economy more buoyant, Mr. Speaker, I think you can determine that they have put heavy emphasis on giving the corporate sector an incentive. But the corporate sector really needs more than an incentive; it needs the demand from the buying public to allow it to create the jobs that are so urgently needed in the country. In addition to giving the corporate sector just a blind handout incentive, one should link those incentives to productivity tests so far as those corporations are concerned, and make them work for the tax breaks they are offered through one's fiscal position. That would be part of the approach that we would adopt in bringing in a budget if we had the opportunity to do so this month.
Having said that, I should like to emphasize that timing is all important in these measures. We enunciated what I am saying in part several months ago. We urged the government to cut back on their spending and to give a more meaningful tax cut to the Canadian taxpayer. We would not have the unemployment levels today that we have if the government had taken our suggestions. But now we are saying: Although it is late, do something still; because if you do not get the economy responding in a more vigorous way, we will have higher unemployment come the winter of 1978-79.
We believe that there should be a cut in sales taxes. The federal government collects a 12 per cent sales tax on almost every purchase made by consumers. By reducing the rate of tax on particular items, for example on building materials, consumers will pay lower prices. This is a fiscal tool that could be used, if the government so wished, with precision. They can
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assess, for example, the hardware items that are not moving at present, the cars, refrigerators and stoves, and as the government determines where it wants to put the main thrust of its incentives, it can at least lower the sales tax, if not remove it, with respect to that particular commodity. We have referred to the manufacturers' sales tax or the federal sales tax because we feel that is a most unfortunate type of tax. It is very inflationary and it goes on products at the manufacturer level and in effect then becomes amplified as mark-ups are placed on the product between the manufacturer and the eventual end user.
Another approach that can be used is to have the provinces reduce their sales taxes. Most provinces feel that they cannot give such a cut if they do not have a break from the federal government. That is why we are saying that the federal government, and certainly the Minister of Finance, in considering the budget that he will probably bring in next week or the following week, should at least consider cutting back on taxes, or, if you like, giving a bonus to those provinces which are willing to reduce their sales tax. Surely it is most unfortunate that a province such as Newfoundland, which is experiencing the tragedy of the highest unemployment in this country, should feel it necessary to impose a 12 per cent sales tax on its goods.


Mr. Kempling:: Quebec has the highest unemployment.


Sinclair McKnight Stevens: The hon. member is correct. I was referring to Newfoundland having the highest unemployment rate, which is also correct. I am pointing out that it is most unfortunate that, because of lack of revenue, some of the provinces which have high unemployment-and the two things go hand in hand-have been forced to inflict upon their citizens the highest sales taxes in the country.
This is where the federal government can do something meaningful. It can make whatever compensation is needed to those provinces to allow them to start removing, or at least reducing, their sales tax so that the consumer buying enthusiasm can be restored and in turn we can get our economy working again.
The thrust of what I am saying is that if we were in power, we would get Canadians back to work. It is a disgrace that in a nation which is as bountiful as ours this government should be tolerating a real growth of only 2.6 per cent, as they did last year.
Having said those things on the revenue side, let me say where we feel those revenue items can be paid for. In short, the size of government must be reduced. By cutting back on the growth of federal spending we will reduce the contribution of the government to inflationary pressures. A variety of cuts would be made by us if we had the opportunity. The size of the federal public service would be reduced by 20,000 a year for the next three years. This would be accomplished through a hiring freeze and a policy of not replacing those who resign or retire.
In this respect we feel we should probably have to exempt prison guards, RCMP personnel and military personnel. In
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short, we are simply saying that it is possible not to fill the vacancies, to let attrition of its own momentum reduce the size of our public service. If we were able to drop, say, 20,000 public servants a year through that method, this would mean about $400 million a year could be saved in spending at the federal government level.
We also feel that savings could be achieved through lower personnel support costs, lower accommodation and equipment charges, and lower transportation and communication expenditures. Again we feel that further reductions in spending could be achieved through sharply reduced advertising and consulting expenditures. One of the points we have made- certainly my leader has made them several times-is that we believe there is room for zero based budgeting and sunset laws if they were implemented by the federal government and earnestly enforced. I emphasize that because, as most of us know, the city of Hamilton has brought in a zero based approach to their budgeting. It has been tough, it has been hard to work out, but it has been successful. I think it is interesting to note that a city with a budget of approximately $100 million has been able to keep the lid on its spending to within 1 per cent of the previous year's spending. As a result of the general growth of that city, their mill rate, the actual tax rate of the homeowners in that city, has gone down this year compared to last.
Compare that city with zero based budgeting, keeping their increase to within 1 per cent of their spending last year, to this federal government which expects to receive cheers when they tell us they kept their spending approximately equal to the real growth plus inflation in the nation. They are a laugh. Hopefully the Canadian public will give them the final laugh when the election is called and the voting is recorded later this year.
We feel that some of the more than 300 Crown corporations to which I have referred should be dismantled or integrated within departments or sold to the private sector. Non-budgetary borrowings of Crown corporations should be curtailed, especially where the interest rate does not reflect market conditions.
We have before the House a bill to amend the Export Development Corporation Act in which the Minister of Industry, Trade and Commerce (Mr. Horner) is seriously asking this House to give that one Crown corporation the right to borrow without further reference to this House, certainly of a formal nature, over $20 billion on their own account.
The Minister of Finance has said that our cash needs for fiscal year 1979 are to be $11 billion. He deliberately did not induce the borrowings of such Crown corporations as EDC because they do it in their own name. That may be so, but they bind the Government of Canada when they do it. That is clear. If you read their prospectus, Mr. Speaker, in each case across the front of it they state it is an Export Development Corporation note that you are buying, but Her Majesty the Queen in the right of Canada guarantees the note.

When we talk about cash needs, admitted by the Minister of Finance to be $ 11 billion, and we add the needs of Crown corporation such as EDC, we see how totally out of control this government is getting. If you put it into percentage terms, you find they are spending about $50 billion this year and are going to be able to pay back only 77 or 78 per cent of that spending. The rest of it is ending up on the cuff to be paid not necessarily by us, but in part, plus interest, by future generations in this country. That is why we say there has to be a cutback.
Recently some of us were in Israel. I found it most refreshing when talking to the minister of finance in Israel to hear his attitude as a new minister of finance, heading a Conservative government in that country, with regard to what they intend to do with their state corporations. The previous socialist government which ruled that country ended up with about 180 state corporations. Apparently those state corporations were into unbelievable things. They were making plastic articles, virtually anything you can conceive of, but losing money hand over fist.
When I talked to officials in their finance department, they pointed out that their country simply could not continue to subsidize the losses that were being run up by those state corporations. The solution of the new government in Israel- and this is why I say it is so refreshing-is to put on the block at least one-half of those 180 state corporations. They are simply going to ask for tenders in the private sector. If they can get suitable bids, presumably they will sell and get out of the business of running companies which no government any place in the world generally runs well.
The next point I would like to make is that we, if in power, would deregulate the economy. The burden of public bureaucracy on private enterprise must be lifted. Sunset laws will be implemented to terminate agencies which have outlived their usefulness. Tax rebates will be supplied to small businessmen who are plagued by excess federal paperwork.
We should bear in mind that the paperwork, the bureaucracy that business has to live with, is certainly an irritant to all businessmen. The large corporations handle it by simply adding to their staff. They hire another accountant or another lawyer. It is just another cost item. The small businessman cannot do that. He finds that that is often the final load that breaks him as a businessman. In short, he goes out of business.
My final point in dealing with what we would do if we were in power today is this. We feel there should be greater monetary restraint in Canada. There should be gradual reductions in the growth rate of the money supply, greater than we have been having. Monetary expansion must not be allowed to exceed growth targets that are set in relation to realistic real growth potential in this country. The federal government must put less pressure on the Bank of Canada to finance their own federal debt. The federal government must learn to live within its means.
That is our position. I believe it is a credible position. I hope it will be accepted, at least in part, by the Minister of Finance when he brings in the budget some time next week or the week
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after. If he does not, let me assure him that to the extent he has cheated the Canadian public once again by taking the wrong fiscal and monetary positions in a budget, we will make it an election issue come the next election.
I have touched on the Liberal record with regard to controls.
I could touch on certain other items. I know there are other members who are anxious to get into this debate and I do not want to take an unduly long time.


William James Kempling: These are just preliminary remarks.


Mr. Hees:: That was a nice introduction.


Stanley Howard Knowles: He has not warmed up yet.


Sinclair McKnight Stevens: I do not want to take a prolonged time as far as my remarks are concerned. I am pleased to see that a former minister of finance is in the chamber, the hon. member for Eglinton (Mr. Sharp). He knows what I am taking about.


Stanley Howard Knowles: He is the only Liberal listening to you.


Sinclair McKnight Stevens: 1 hope that hon. member might join in this debate and give us the benefit of his understanding as to where the government has gone wrong with regard to inflation in the nation. I hope he will indicate where he feels some of the mistakes were made in the anti-inflation program and where corrections could be made, even at this late date.
I conclude by saying that I think Canada has a potential second to none in the world. It has a potential that, if properly harnessed with the government of the day giving the kind of economic leadership that Canadians rightfully deserve and are entitled to, could go on to real growth targets, not at the low level set by this government, but substantially above the real targets to which this government has referred.
In short, this country could be second to none in the world. We do not have to be humiliated with the tenth standard of living in the world when we once had number two. We could be number one in the world as an industrial nation if we simply made up our mind under the present leadership in Ottawa that we could do it.
I am concluding my remarks a little prematurely because I earnestly hope that the Minister of Finance will take the time that I have left to come into the debate and give us some explanation as to why he has been such a tragic failure as Minister of Finance to this point.


Some hon. Members:: Hear, hear!


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, as 1 listened to the speech of the first spokesman for the official opposition I could not help wondering why he went on and on, speaking for more than three and a half hours, unless the nature and objective of his speech was not to criticize the government but rather to outdo the lengthy speech of my
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colleague the hon. member for Nickel Belt (Mr. Rodriguez) some months ago. All the practical suggestions made by the hon. member for York-Simcoe (Mr. Stevens) could very easily be compressed into fifteen minutes. I listened very carefully, so let me list them quickly to show what I mean.
Some of the proposals he made for reducing government expenditure included means of reducing the size of the government. Of course, he was very careful not to indicate which programs would be eliminated. Every member of parliament who has any experience knows that the real cost of government does not result from the size of the public service, although that is substantial, but from services provided the people of Canada. If a political party pledges to eliminate services it may lose votes, so the hon. member was very careful not to do that.


Sinclair McKnight Stevens: I was trying to give you some time.


David Orlikow: Then the hon. member said a Conservative government would dismantle some Crown corporations. Again he was very careful not to indicate which they would be.


An hon. Member:: That is being smart.


David Orlikow: That is right; that is being smart politically, but not very honest.


Sinclair McKnight Stevens: I rise on a point of order, Mr. Speaker. The hon. member asked that I conclude my remarks in order to give him some time to speak. In doing so I did not have the time to elaborate on some of the points he is raising and complaining about now. Had he allowed me the extra time I would have given him the detail he is looking for now.


The Acting Speaker (Mr. Turner):: Order, please. I would suggest to the hon. member that this is a point of debate and not a point of order.


David Orlikow: Mr. Speaker, it is a long time since I have heard a member speak for three hours and then-
An. hon. Member: And say nothing.


David Orlikow: -complain about not having enough time. The hon. member said that a Conservative government would dismantle some Crown corporations. Canadian history will show that Crown corporations are created by government. In the entire history of Canada we have never had a socialist government in Ottawa. We have always had either a Conservative or Liberal government. Those governments created Crown corporations, not because they fit in with their ideological frameworks, but because there was a need that was not being met by the private sector.
For example, in my province of Manitoba we have a publicly owned telephone system. It was created in 1908 by the Conservative party headed by Sir R. Roblin. This is how we get Crown corporations. If the hon. member had been serious I think he should have indicated the kind of Crown corporations his government would dismantle.
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The hon. member then talked about greater monetary restraint. Of course, what that means is that you spend less money, you provide less service and you employ fewer people. As a result, of course, you increase unemployment. So much for his ways for reducing expenditure.
He then outlined his proposed ways of helping to get the economy moving again. Those suggestions were not bad, as far as they went. He was not being very radical, but following the advice of the Economic Council of Canada and the Conference Board. He said a Conservative government would cut income taxes, particularly for the people in the middle and lower income brackets. We are in agreement with that. He said his government would cut sales taxes. We are in agreement in that regard, and they would encourage the provinces to cut their sales taxes as well. Mr. Speaker, I have taken about five minutes to list all the practical things the hon. member took over three hours to outline.
Let me speak about the situation this country finds itself in, keeping in mind the sophistry used by the Prime Minister (Mr. Trudeau) during question period today when he referred to the Liberal objective of providing equality of opportunity for the people of Canada. What the Liberal government has done instead since this Prime Minister took office is provide a lack of opportunity for the people of this country.
I am glad to see that the hon. member for Eglinton (Mr. Sharp) is in his seat today. If my memory serves me correctly, he was the first minister of finance at the time this Prime Minister took office. I want to compare the situation then in April of 1968 with the situation in February of 1978.
In April of 1968 the actual number of unemployed was 375,000 and the actual rate of unemployment was 4.9 per cent of the labour force. In February of 1978, just two months short of the ten years this Prime Minister has been in office, the actual number of unemployed was 1,007,000, and the actual rate of unemployment was 9.5 per cent. In other words, we had an almost threefold increase in the number of unemployed and an increase in the rate of almost 100 per cent.


An hon. Member:: And they call that progress!


David Orlikow: Yes, they call that progress and we are told we are doing quite well in comparison with other countries. The hon. member for Cape Breton-East Richmond (Mr. Hogan) has informed me that in a news article appearing in the Ottawa Citizen today there is an indication that the rate of unemployment in nine common market countries is 5.9 per cent as compared to the 9.5 per cent in Canada.
In discussing this bill before us today we must consider the history of how we got into this situation and why we are amending a bill we first passed in 1975, more than two years ago. Members will remember that in 1974 the Conservative party, then as now the official opposition, began a campaign across the country calling for a freeze on wages and prices. That was to be a 90 day freeze. That proposal was taken up by the media and given a great deal of prominence. It became an issue in the election campaign of 1974. The Prime Minister of this country travelled across the land from the Atlantic to the

Pacific telling the people of Canada that a freeze on wages and prices would not work, and that the government which he headed would not impose wage controls in this country. The people, particularly the workers in the urban parts, believed the Prime Minister was an honest man. They voted in substantial numbers electing Liberal members while defeating some Conservative and some NDP members of parliament.
We all know that happened in 1975. This Prime Minister, who had won an election on the promise not to impose controls, implemented wage and price controls because, as he said, they were necessary to stop the cost of living from rising. In October 1975 there was sharp inflation, running at an annual rate of 10.5 per cent. After the anti-inflation program was imposed in October of 1975 there was a sharp decrease in the rate. At the end of the first year in which we had controls the cost of living increase had been reduced to 6.2 per cent.
The Prime Minister, the Minister of Finance (Mr. Chretien) and the chairman of the Anti-Inflation Board went around flexing their muscles and saying to the people "Look how successful we have been." Some of us tried to warn the government that this to a large extent was an accident and a temporary thing which would not be repeated.
I have not often, if ever, quoted from a speech which I have made in this parliament on an earlier occasion. However, speaking in this House on June 20, 1977 I talked about this question of the cost of living, and I pointed out how in each month from January, 1977 through to June the cost of living had increased by a half to one per cent. I said:
Taking into account the $2 a barrel price increase there will be in July, we are looking at an increase in the cost of living for the year 1977 of between 9 and 10 per cent.
And what happened, Mr. Speaker? We had an increase of exactly 9.5 per cent for the calendar year of 1977. The Minister of Finance is still going around the country arguing that in 1978 the cost of living will only rise by 6 per cent. However, he cannot find a single independent economist in the universities, the business community or anywhere else who will agree with him that such a thing will happen.
The reasons are obvious. First of all, the fall in the Canadian dollar has had a disastrous effect on the cost of living in this country. The business commentator in the Globe and Mail yesterday quoted a speech made recently by David Slater, a member of the Economic Council, in which he quoted from a study done by the Conference Board of comparable wages between the United States and Canada for 1975 which seemed to show that the wage rate in Canada was higher than in the United States. Even if one accepts the validity of that study in 1975, the fact is the dollar in Canada as compared to the dollar in the United States has fallen by 15 cents since 1975. So the Canadian worker has suffered a real decline in the cost of living since this program began.
The second thing is that we have a continuing increase in the cost of energy because the government is committed to staged increases in the cost of oil and natural gas to the
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consumer until the cost reaches the world price. Thirdly, there has been and continues to be a sharp increase in the cost of food, so much of which is imported from other countries, and which is, therefore, a cost over which we have no control.
The government-I said it then and 1 will say it now, and events have proven me correct-had taken credit for the decline in the rate of inflation through the Anti-Inflation Board. However, when the facts demonstrated that there was no reason to br proud of what was happening, the Anti-Inflation Board suddenly began to try to rationalize matters and deceive the public last October by putting out a booklet called "Kick the Inflation Habit", in which they tried to argue that we were doing quite well. They tried to show that the rate of inflation was continuing to come down. How did they do that? They did that in the classical way of one who wants to lie to the public. They cooked the books. To show how they did it and how they rationalized it, I quote from that pamphlet:
Food, energy and import price movements have obscured somewhat the success that has been attained in reducing the rate of inflation.
Of course, if you take out the major factors for the change in something, then you can prove that the change has not taken place.
What has been the effect of the anti-inflation program? Let us look at it. The program has, in fact, never worked because it has never controlled prices. It has only been successful in the one field in which there was the least reason for implementing it, and that is in controlling and limiting wage increases. Since the program has not worked at all, we believe there is no logic in continuing the program, and for that reason we are going to vote against this bill.
The program has not succeeded in holding down prices, profits or the rate of inflation. All it has done is to hold down the salaries and wages of the low and middle income people. It has been ineffective in controlling executive salaries or the incomes of professionals. The only logic for continuing the program, therefore, is a continuing desire on the part of the government to hold down wages and salaries of the ordinary people of Canada. The government continues to believe that this type of wage increase is the prime cause of inflation when there is all kinds of evidence to indicate that the prime cause is elsewhere altogether. By holding down wages and salaries, the government is restricting the purchasing power of the wage earners, thus holding down consumer demand and lengthening the recession in which we currently find ourselves.
The government has deliberately increased prices on oil products. The oil price increase of last year, this year and the one which will come some months from now will add at least one per cent. It added over one per cent in 1977, and it will add more than one per cent to the over-all cost to the CPI for 1978. For the average family this means approximately $150 a year more to heat a house and drive a car. The oil price increase has contributed to a 15 per cent increase in the price of fuel and utilities in the last year, and we have not yet seen the effect of the latest increase. Moreover, the government is committed to a dollar per barrel increase every six months for the foreseeable future.
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The cost of buying a house has increased by 9 per cent in the last year for a $50,000 home, which in most cities does not give a person a very elaborate home. This is a price increase of $4,500 and over the average life of a mortgage it is an increase of approximately $12,000. Also the cost of an automobile has risen by nearly 10 per cent in the past 12 months, and recent price stories indicate that the larger car companies will continue to raise their prices in this year. In fact, one has already raised its prices and another has received permission from the AIB for a 5 per cent increase. Food prices in 1977 have gone up by over 15 per cent, and food for home consumption rose by nearly 18 per cent. As a result of all this, we have had an increase over the year in the CPI of 9.5 per cent, and in the last months of 1977 the increase was over 11 per cent.
In spite of this the government, under the provisions of this legislation, is holding down wage increases in the last year of the AIB to 6 per cent. With inflation running at somewhere between 8 and 9 per cent, this means food and energy prices, and even prices of supposedly controlled items are going up at a rate of 9 to 10 per cent a year, and the average person this year will suffer a corresponding decline in his real standard of living.
If they are lucky the average family's income will go up about $900, or $ 18 per week. The average family, if it gets the increase allowed by the AIB, will find its standard of living this year dropping by about $12 per week. For those on fixed income the loss will be even more, about $16 per week for those on fixed incomes of $8,000 per year and about $20 per week for those on fixed incomes of $10,000 per year. What we have always needed is an alternative to the anti-inflation board, a plan that protects those on low and fixed incomes and guarantees the purchasing power of ordinary people so that we can begin to work our way out of the combined recession and inflation that has characterized this country for the past few years.
We have been told that the reason we had inflation was that workers were demanding and getting too high wage increases. I refer now to the period in 1975 when the government brought its program in. What the government conveniently forgot to tell people was that in 1975 workers were reacting to the very sharp increases in profits which Canadian corporations had been able to achieve in the years 1972 to 1974. Profits more than doubled in those three years. It was very natural for workers to try to get their share of the increased productivity and the increased gross national product of this country.
We were told that we needed the anti-inflation program to protect our markets. Although we have had the controls and although the wage demands of Canadian workers were restricted, what we have had is complete disaster. Our major export products, such as metals, have not been selling, not because the price was wrong but to a large extent because the market was not good. There has been a world recession. They have not been selling because our very patriotic multinational

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corporations such as International Nickel found it wise from their point of view, wise from the point of view of their management, wise from the point of view of their shareholders, but disastrous for their workers, to take the profits they made in Canada and the loans so generously provided by this government and invest that money in mines in Indonesia and Guatemala. These mines compete for sales with Canadian mines and for jobs with Canadian workers.
In a fit of honesty-not found too often-a senior Inco official admitted and later retracted, I am sure under a great deal of pressure, that of course Inco could not conceive of cutting back production in Indonesia or Guatemala because those governments simply would not permit it. Only in a country like Canada with a supine government such as we have could this take place.
When I began I said that our actual rate of unemployment today is 9V4 per cent. Is that temporary, Mr. Speaker? Is it likely to go away in the near future? Is it likely to improve? There is not a single reason to believe that is likely to happen.
The current issue of Macleans, Mr. Speaker, should have been paid for, if it was not, by the Liberal party because it is an out-and-out propaganda pamphlet for that party. It contains an article by Ian Urquhart entitled "What Price Trudeau? If he didn't hurt the Economy, he sure didn't help it." Then there are four "report cards" given by four economists who were asked to rate the Prime Minister. I should like to quote a couple of sentences each from three of them.
The first one is by John F. Helliwell, Department of Economics, University of British Columbia, and has the heading "Trudeau's Report Card No. 1: A very Average Student". The text reads as follows:
GRADE: C
The student was asked to find and implement policies that would achieve reasonably full employment, reasonably stable prices, efficient, innovative and peaceful operation of the public and private sectors, and less disparity of income and opportunity across the country. The student failed the exam ...
Carl Beigie, C. D. Howe Research Institute, Montreal under the heading "Trudeau's Report Card No. 2: Not working to Potential", writes as follows:
GRADE: C
Mr. Trudeau inherited two major economic problems when he became Prime Minister-regional disparities and a weak international competitive position in most manufactured products. Both are now even more serious.
The last one I want to quote is Professor J. C. Weldon, Department of Economics, McGill University. Under the heading "Trudeau's Report Card No. 4: Should seek other Work", he writes:
GRADE: F
Not deserved? Perhaps, but it is the lowest grade the rules allow. I suppose the principal charge to be laid against the Trudeau government is that it has adopted the most reactionary of all economic policies, namely to abandon policy. The vital commitment of 1945 to full employment has vanished.
In case members on the government side think that I am being much too partisan and being unrealistic in speaking about full employment, let me remind them of a white paper published by a Liberal government in 1945. One of the great

men in the Liberal history of this country, C. D. Howe, was minister of reconstruction. When tabling the white paper he said that the central task of reconstruction was to maintain a high and stable level of employment and income, a task the government adopted as a primary objective of policy. He said that government was not thereby selecting a lower target than full employment.
That was the commitment of the Liberal government in 1945 and we must compare that with the record in February, 1978 when over one million were unemployed and 9.5 per cent of the labour force was out of work and looking for work. We know that is an under-estimation of the actual number of unemployed. We know that there are several hundred thousand-probably 500,000 people-who have given up looking for work because it is no use, there is no work in the areas in which they live.
Our party believes in 1978, as did the Liberal government in 1945, that full employment is both necessary and possible. We believe that and we say it can be done. Indeed, we know it can be done. If we are to achieve that goal, however, we must order our system much better than we have been doing.
In a recent report on industrial policy the Science Council of Canada gave as one of the major causes of our economic turndown the fractionalization of industry because of the high degree of foreign ownership in our manufacturing sector and our subservience through branch plant organization to investment decisions being made by large foreign industrial concerns. Mr. Speaker, is there a member of this House from any party who would not agree with that assessment? Is it not obvious that our branch plants are not able and interested in providing the jobs which are necessary?
We have in many fields an efficient industry productivity. In the Canadian steel industry it has always been high. Output of the worker increased by 6 per cent between 1975 and 1976. Canadian steel prices are 10 per cent to 20 per cent lower than that of comparable American products. We are able to sell 70 per cent of our steel exports to the United States and yet the employment rate has been falling in that industry. While we are not exporters of steel, we run a deficit in imported manufactured goods incorporating steel. These manufactured goods are auto parts, aircraft parts, agricultural implements, appliances, machinery and equipment. The biggest drawback to expansion in this industry is weak demand. As a result there are less people employed this year than there were in earlier years.
Those of us who were here in parliament at the time when the auto pact was negotiated remember the glowing promises made by the then minister of industry, Mr. Drury, about how we were to get a better share of the automobile market, how we were to get more skilled jobs, how we would get lower prices for cars. Mr. Speaker, we have more jobs but the skilled jobs are in the United States. The assembly jobs are available in Canada. The tool and die makers are in the United States. We have not developed a tool and die industry. We have let
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our electronics industry and our television industry go. What we have had is a series of plant closures and layoffs.
Let me put on the record just a few of them. RCA is getting out of the major appliance business. CAMCO, formerly West-inghouse, manufacturer of dishwashers, refrigerators and ranges, has reduced employment from a high of 1,400 in 1973 to the present 700. Appliances, formerly made in Barrie by Canadian General Electric, are now being shipped in from the parent plant in the United States. These products include vacuum cleaners, electric knives, hair dryers, deep fryers, blenders, food processors, etc. The workers at CGE in Peterborough attribute the drop in employment from a high of 4,500 to 3,000 in 1975 and to the present low of 2,300 to the depressed economy and the fact that the company has been moving many sections of its operations elsewhere. I could go on and on.
We may not know it because the GATT negotiators have not said so publicly, but what we gather and are told by people in the industry is that our negotiators are prepared, if they can get some more concessions for tariff reductions on raw materials such as minerals and lumber, which we export, to agree to substantial tariff cuts for manufactured goods coming into Canada. That means fewer jobs and more unemployment in Canada.
Having damned the government's program and having indicated how miserably the anti-inflation program has failed,
I want to take the few moments remaining to me to put on the record the concrete steps which we think should be followed by a Canadian government.
First of all, there must be a real commitment to full employment. This country can and must have full employment. It must offer to every Canadian citizen who is able and willing to work a meaningful job. How can that be accomplished? We believe that our monetary and fiscal policies must be timed adjusted and implemented to attain this objective. We believe that our manpower policies and training programs should be developed and co-ordinated to bring jobs and people together. That obviously has not been done. Publications such as the Financial Post are predicting that we will have a very serious shortage of skilled craftsmen despite the fact that we have spent billions of dollars on our manpower training programs. We believe that substantial moneys should be allotted by all levels of government for programs to create jobs providing decent living wages. What we have had instead, despite the urging of the official opposition, is the exact reverse-restraint and cutbacks. These have meant more unemployment in all provinces of Canada.
We believe that we need a massive low income housing program to help solve the severe housing shortage and, as well, to provide jobs. We believe an industrial strategy must be developed which would promote and create secondary manufacturing, provide long-range solutions to energy problems, deal with manpower needs, transportation, housing and land use, and concentrate on employment. We believe that there must be a redistribution of income in this country. We must face up to the fact that the present Minister of National
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Health and Welfare (Miss Begin) stated so clearly in her recent speech, namely that in more than 30 years income distribution in Canada has hardly changed at all. Where it has changed, it has changed for the worse. Thirty years ago the lowest 20 per cent of income earners of this country got about 4 per cent of the gross national product. The top 20 per cent received more than ten times that. They got 42.5 per cent of the gross national product. Thirty years later according to the latest figures, the bottom 20 per cent get 3.9 per cent and the top 20 per cent get 44 per cent of the gross national product.
What should we do about income redistribution? First of all, we should scrap the Anti-Inflation Board since its main thrust has been to keep down wages and not prices. Secondly, the tax system should be restructured to be more equitable. Thirdly, those on the lower end of the income scale should have their personal income taxes lowered and the sales taxes should be cut. Fourthly, pensioners and those on fixed incomes should have their purchasing power restored by tax adjustments and by increasing benefits. Lastly, real taxes on corporation profits should be increased.
I have tried to sketch not just what is wrong with the government's program but what a government that is really concerned about the welfare of this country should do. This government has failed lamentably, Mr. Speaker. It has not met the needs of the Canadian people. One of the most dramatic ways of indicating that feeling is to vote against this bill, because this program has been a complete failure. For those reasons, we intend to vote against this bill.


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I have already made a contribution to this debate on this patch-up bill, C-18, but I want to put in a few final remarks at this time. I do not want members on the other side to think we are holding things up over here. I know they have had a lot of information given to them by the hon. member for York-Simcoe (Mr. Stevens) but I would refer the House to the fact that the bill had only two days of debate in the House earlier before it was referred to the Standing committee, where it received speedy passage after only four committee meetings. I would also stress that we in the opposition are going to be consistent and stick to our position in opposing this kind of bill.
I think it is interesting, though, to refer to the draft bill which my hon. friend from York-Simcoe mentioned in his remarks. I have the draft bill here in my hand, a discussion draft bearing the name of D. Maurais from the Department of Justice, legislation branch. It makes reference to the minister as being the Minister of Finance (Mr. Chretien). It is interesting that at our last committee meeting on March 16 the minister said to the committee in reference to this bill, which he said he saw for the first time in the committee:
It has never been government policy and I have never seen it before. It was shown to me by a member of the opposition and I denied that day and I deny today that we had any intention whatever to present such a bill.
Now that is a fairly straightforward statement, but I have to go back a little further to February 17 when we were also in

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committee and the minister, again referring to the bill, said this:
I have never approved and do not have any intention to approve; I do not intend to put it in front of my colleagues in cabinet. I have said that to the unions, I said it to the businessmen and I now say it to the premiers. There was no such thing. How could I say more?
He was referring again to that bill. I commented that this was reassuring and at that same meeting-I am quoting myself here-I said:
If the Economic Council would not take on the job there would be legislation?
To which the minister replied: "For a monitoring agency, yes". The minister said he did not want to see the bill and continued:
You know, Mr. Stevens presented it. He had the bill in his hand. I have never seen such a bill. My name is on it, but I have never seen it.
I thought it was poor that we should have the minister at the meeting without having the advantage of having seen such a bill, so on the next occasion, also at a meeting of the finance committee, I reminded him that on Friday I had said that I would try to get a copy of it for him. I said I had it with me, but the minister said: "I do not want to see it." He did not want to see it even though he had been reminded that his name was on it. Subsequently the minister was asked by me who Mr. Maurais was, the one who had drafted the bill, and the minister said he did not know who that was. Finally, at this same meeting, I asked the minister whether he would undertake for the benefit of the committee to determine where this bill originated, who drafted it, under whose authority, and why it was released. I said:
Mr. Chairman, I said I was willing to obtain a copy and I did obtain a copy for the minister but he does not want it.
The minister said: "It was given to me here. I will take it home." So finally, on February 17, we have the minister admitting that he has the copy and that he will take it home even though some weeks later he says in the same committee:
I have never seen it before it was shown to me. And I denied that day and I deny today that we have any intention whatever to present such a bill.
That is very strange, Mr. Speaker, and in order to try and clarify as to how this draft bill came into being, I decided we had better ask a question in the House about it. Accordingly, on February 22 I put a question to the Minister of Justice (Mr. Basford) because, after all, legislation does emanate from the Department of Justice. I asked him whether he would tell us who in his office had instructed Mr. D. Maurais to draft this bill and who had authorized the release of the bill across the country. Now that is a fairly straightforward question. At that time the minister said simply that he did not know the name of the officer and added "I would have to find out who he is in order to ascertain from whom he received his instructions."
That was approximately six weeks ago and we have not yet had an answer from the Minister of Justice with regard to that question. I tried to catch Your Honour's eye today so that I could refresh his memory on this matter. I am assured by the minister that he will have an answer for the House tomorrow. I regret he did not have it available before now but I would remind the House, since I will not have an opportunity to do so

tomorrow, that the name of D. Maurais is the ninth name on the list of some 14 officers in the legislative section of the Department of Justic. He is listed right here in the government of Canada telephone book and if the minister has any trouble finding him I will be glad to help.
Leaving that mystery aside for the moment I should like to deal with the issue of restraint. Ministers have assured us they are anxious to exercise restraint, yet the President of the Treasury Board (Mr. Andras), when presenting the estimates this year, took great pleasure from the fact that the government was reducing the rate of increase in public expenditure. He did not say that expenditures were down or that the government had been able to hold the line with regard to expenditure. No, the only thing the minister could take credit for was a reduction in the rate of increase.
We cannot afford to carry on this kind of spending spiral. We have to do something more serious than having the rate of spending increase going down. Of course, as the hon. member for York-Simcoe has said, it is really all a matter of confidence in the economy; but I must say that if one looks at the record of the government one cannot escape the conviction that the record is not an impressive one. How can we have confidence in a government led by a prime minister who said to us some time ago that inflation had been wrestled to the ground and that separatism in Canada was dead?
I have a couple of quotations here from recent magazines. This is the same man who in July, 1974 said:
You cannot start with a policy and then run away from it every time you want to get a new sector of the population to support you.
Well, we have seen some of the changes of mind of the government opposite and if they have any shred of consistency left, it is this: when they get a bad policy they sure stick to it. I guess this is why we have a bad record on unemployment and inflation.
Another couple of quotes from the leader of the government party. Here is one from December, 1975. He does not like the system the way it is. He says:
We haven't been able to make it work, the free market system. We've ended up with very high unemployment and very high inflation. We can't go back to what was before with the same habits, the same behaviour and the same institutions. Otherwise, we'd be back to high unemployment and high inflation ... That means the government is going to take a larger role in running institutions.
That was two and a half years ago, and since the Prime Minister (Mr. Trudeau) made that statement we have had nothing but high unemployment, high inflation and a government which takes a larger and larger role in running institutions. If the government cannot learn from its mistakes, I do not know how we can expect it to change the direction in which Canada is going or to increase confidence in Canada.
If we think the statements of the Prime Minister are strange, perhaps we ought to compare his statements with the actions of his government. In the 1974 election campaign the government campaigned against controls of any kind and made a mockery of the temporary freeze proposed by the
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Conservative party. Then, as we all know, 15 months later the government imposed a 39-month program of controls. Can we believe what the government says?
In that same 1974 election campaign the government promised the residents of Toronto a $30 million waterfront park. Well, the residents of Toronto know that nothing has happened on that score. That is another example of this government changing its mind.
The government promised other cities aid in the form of grants for rapid transit systems, but every mayor in the country can tell us that there has been no money for rapid transit since that election promise in 1974. I suppose we should not be too surprised at the actions of the government opposite.
I see that the Minister of Employment and Immigration (Mr. Cullen) is here. I appreciate the fact that he is listening attentively because I want to refer to some of his problems. He tells the country quite blithely that his department does not have any deficit. The fact that it spends something like $1.7 billion more than it takes in is, in the words of the minister, a commitment of the government. I hope the minister can sell that to the taxpayers, particularly those who are either selfemployed or who are retired and do not contribute to or benefit from the unemployment insurance scheme, but who, nevertheless, are required to pick up their share of the tab through general taxation. Some insurance scheme!
I remember that the Minister of National Defence (Mr. Danson) told the country about the great things his department was going to do, but we find that there was such a small increase in national defence spending that it did not even keep up with the rate of inflation.
If the voters of the country can be forgiven for wondering about the practices of the government opposite, I wonder how the voters of Vancouver feel. Every time many of my constituents look out of their windows in the morning they can see 13 to 15 ocean-going ships anchored in the harbour. Why are they anchored in the harbour? They are waiting for grain. Where is the grain? The grain is out on the prairies because the government cannot get it to Vancouver to ship it to the people who want it, the Russians or the Chinese. Who pays the cost of these ships waiting around in Vancouver harbour, and who is at fault? At the very least the taxpayer pays. Farmers probably pay more than other taxpayers do. We know where the fault lies. No one can take the blame except the government opposite.
Let us go back to the time when the government told farmers that they should not grow anything because the government could not sell it. Farmers were going to be paid for not producing. Now they are told to produce as much as they can, even though it cannot be shipped out.
What are the results of this lack of planning and leadership on the part of the government? Recently we have seen a flight of capital from Canada, principally to the United States because that country is so close to us. That is not really surprising. Any time a government creates a hostile environment for people or capital, they leave. We need only examine
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the situation in Quebec at the present time under its separatist government. That government has frightened many people and undermined confidence in that province. Many companies and individuals are leaving Quebec because of the hostile environment there. We had the same problem in British Columbia a few years ago when we had an NDP government. One result of policies which are unfriendly to businesses and individuals is that there is a tendency to save money rather than to invest. Another result is higher unemployment because the private sector will not invest in order to create the jobs which are needed.
It is really a shame to see Canadian expertise and Canadian money going to the United States to provide housing for American citizens. The Minister of State for Urban Affairs (Mr. Ouellet) tells us we have a housing crisis in Canada. We do not have a housing crisis; we have a money crisis. Many people cannot afford the houses that are available. There are empty units all over Canada. Units financed by the government opposite are competing with private sector units, and some government financed units are even competing with other government financed units. It is ludicrous that the government should be competing with itself. In some small centres apartment units financed under the National Housing Act by CMHC are competing with new houses built under AHOP. The result is that people invest in housing for themselves only. What we really need is more investment in housing and in other industries in order to get things going again.
Finally, I want to conclude this fairly short intervention by saying that it is extremely unfortunate for the country and for the confidence that taxpayers are expected to have when government ministers-and I have just illustrated a few cases-do not even know what is going on in their own departments. We cannot expect to have confidence until hon. ministers opposite can show that they know what is going on in their departments and that they are interested in what is happening. When the government has no idea-as illustrated by the quotations I have cited-of what direction it should take, it runs for cover because it knows it has to take care of itself; and if it does not know what direction the country should take and the effects of its policies on the whole economy, the results can be devastating indeed.


George Harris Hees: Mr. Speaker, as we approach the beginning of the dismantling of controls on April 14, 1 think we should take a look at the problems we will have to handle in a satisfactory way if we are to avoid a recurrence of the situation which made the imposition of controls necessary in the first place.
First of all, we must realize that human nature does not change very much from year to year and that the impulses and desires which caused management, labour and government to act in the way they did prior to the imposition of controls in 1975 will still be about the same when controls are lifted. Knowing this, in what way can we expect these three components of society to react when the economy becomes free of controls once again?

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We can expect organized labour to put forward demands for the accumulated wage increases it considers were wrongly denied it by the AIB during the period when controls were in force.
We can expect management to give in to labour's demands for wage increases rather than risk work stoppages and the consequent loss of profits, as it did in most cases during the period which preceded the imposition of controls. These wage increases will, once again, be passed on to the buying public in the form of higher prices. Management can also be expected to resume the practice of charging what it considers the traffic will bear in order to obtain the best possible return for its shareholders.
We can expect government to continue spending far in excess of what can be justified by proper management of its responsibilities to the public and to be the worst offender of all in fueling the fires of inflation.
Realizing that there will be sharp upward pressures on wages and prices as soon as controls are lifted, the government has announced guidelines, and has asked the Economic Council of Canada to monitor our price and wage performance after controls have been removed. Now, how effective will this monitoring mechanism be? The best way to arrive at an answer to that question is to see what success a similar approach to controlling wage and price rises had when it was tried some years ago.
In June, 1969 the government established the Prices and Incomes Commission under the chairmanship of Dr. John Young in an attempt to control price and wage increases. Soon after it came into being, the commission announced price and wage guidelines to be followed by management and labour, and started to monitor price and wage performances.
As wages kept on rising at an unacceptable rate, the commission brought this to the attention of the unions concerned, and strongly urged that the government's guidelines be obeyed. The unions paid no attention to the commission, because it had no powers to compel compliance with the guidelines. As wages continued to rise, prices also continued to go up at an unacceptable rate. Management's reply to the commission was that these price increases were necessary to compensate for the wage increases that were taking place, and so the price-wage spiral continued unchecked.
It became obvious that without the provision of teeth to require compliance with the guidelines, the commission was powerless to control or even slow down price and wage increases, and it finally went out of existence in June, 1972, a very disappointing failure.
When those of us who were around here ten years ago hear the government announcing guidelines, to be monitored by a mechanism that will have no power to require compliance with the guidelines, we get the very definite feeling that "this is where we came in". There is no reason for believing that the government's proposed method of getting labour and management to comply with its guidelines after April 14 will be any less of a failure than it was between 1969 and 1972. To try to pretend that the present approach will be any more successful than it was then is a blatant attempt to mislead the people of this country.
And, of course, that is exactly what the present plan is. April 14 will be very close to the day when the election will be called, and the vote will be in the latter part of June. The government's plan is for very gradual decontrol in the early stages, which means that very little decontrolling will have taken place before the end of June. This plan will, of course, give the government the best of both worlds. It will please those voters who are clamouring for decontrol, and sharp increases in prices will not become apparent until after the election is over.
In addition to our own buying capabilities, why is it so necessary to keep our price levels from rising at an excessive rate? The main reason for applying controls in 1975 was that rapidly accelerating inflation was making our products less and less competitive in both the Canadian and the export market, and production and employment were adversely affected. In this regard, we are particularly vulnerable to price levels in the United States, the country which is by far our most important trading partner and with whom we do 70 per cent of our export and import business. Neither Americans nor Canadians are willing to pay more for a Canadian product if they can buy a similar American product at a lower price.
For many months now, prices in the United States have been rising less rapidly than ours, and that is one of the principal reasons why our production and unemployment have been steadily worsening. If this spread between our price levels grows even greater, our loss of orders to the United States will be even greater than at present, and unemployment in Canada will increase at an even faster rate than during recent months.
The complete failure experienced by the Prices and Incomes Commission in trying to control price and wage increases without the power to compel management and labour to obey the government's guidelines shows the futility of a monitoring mechanism without teeth to require compliance with the guidelines. I believe that the teeth which are required are for the government to say, very clearly, that if inflation due to causes generated within our economy rises for two successive quarters at an annual rate greater than 1 per cent above the annual rate at the time when decontrol starts, controls will be reimposed.
Past experience has demonstrated that without such teeth we will be heading for failure before we even start and will have inflation which will accelerate more rapidly than that which made controls necessary in the first place.
Mr. Speaker, may I call it six o'clock?


The Acting Speaker (Mr. Turner):: It being six o'clock, this House stands adjourned until tomorrow at two o'clock in the afternoon, pursuant to Standing Order 2(1).
At 6 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, April 6, 1978