1978-02-16

ROUTINE PROCEEDINGS


Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of importance concerning the following five completely or largely Soviet-owned companies operating in Canada: Emec Trading Company and Morflot Freight Liners Limited, both of Vancouver; Stan-Canada Machinery Limited and Belarus Equipment of Canada Limited, both of Toronto; and Socan Aircraft of Calgary. I am advised by intelligence sources that these companies are under surveillance. I move, seconded by the hon. member for Frontenac-Lennox and Addington (Mr. Alken-brack):
That the Solicitor General make a statement as to whether the government has or is presently monitoring the profits of these companies that are being kept in Canada in the form of bank certificate deposits in an amount exceeding $20 million, for purposes of determining that none of this money has or will be diverted to finance KGB activities in Canada or to support extremist elements whose ends are not in keeping with the Canadian democratic process, and that the minister include in his statement similar information with regard to 45 to 50 other companies in Canada that are not completely state-owned by the Soviet Union but which are controlled by Soviet interests.


Mr. Speaker:: Such a motion can be presented for debate, pursuant to Standing Order 43, only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CALL FOR GENERAL ELECTION-MOTION UNDER S.O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43. Yesterday, all of Canada came to realize that in spite of several months of preparation and coaching by his handlers, the old prize fighter has now become too weary to continue in the big league. We were all disappointed that when it came to the final round, he
had nothing left in his bag of tricks. In light of this, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House demands that the old fighter and his entourage resign from office so that the electorate can choose someone who can do the job.


An hon. Member:: Who, you?


Mr. Speaker:: Order, please. The hon. member for Selkirk.


FISHERIES
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the inability of the Freshwater Fish Marketing Corporation to meet the final payments to fishermen for last year's catch, and in view of the fact that tens of thousands of pounds of fish are being returned to the corporation by government inspectors from retail stores because of freezer burn caused by up to four years' storage, I move, seconded by the hon. member for Portage (Mr. Masniuk):
That this House directs the minister responsible for fisheries to order an immediate market study analysis, cost accounting, efficiency study and a review of the marketing practices of the Freshwater Fish Marketing Corporation.


Mr. Speaker:: The presentation of such a motion for debate can be done only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


POST OFFICE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, I rise pursuant to Standing Order 43. A mile of Her Majesty's mail has lain strewn along the express lanes of Highway 401 in Toronto for nearly two weeks. A postal official sent a sample of these wind-blown, frozen letters by registered mail a week ago to what he termed "our investigation people", but that mail has not been delivered either, it being in the postal system. I have retrieved some of this mail, preventing its obvious destruction, and I will turn it over to the Postmaster

February 16, 1978
General (Mr. Lamontagne) today in the hope that he might have it delivered. I move, seconded by the hon. member for Don Valley (Mr. Gillies):
That this House asks the Postmaster General to supervise, personally, the collection and delivery of the balance of the letters that are still deliverable and report back to this House, when his mission has been accomplished, as to why there should have been such careless non-delivery of Her Majesty's mail.


Mr. Speaker:: Such a motion can be presented for discussion only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that the recommendations submitted by the provincial ministers of agriculture to the federal-provincial conference recognize the serious problems which exist in the agricultural and food industry, and in view of recommendations for upgrading the processing of agricultural products, a "Buy Canadian" food campaign, a grain marketing strategy, an improvement in agricultural research funding, an expansion of international markets for agricultural products, and an improved transportation system-all of which are in keeping and consistent with Progressive Conservative positions and policies-I move, seconded by the hon. member for Elgin (Mr. Wise):
That the ministers of agriculture and transport bring forth appropriate legislation immediately to deal with these urgent and pressing problems.


Mr. Speaker:: The motion can be presented for discussion at this time only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of pressing urgency to the port of Halifax. Given the revelation of extreme bias on the part of Canadian National toward the port of Halifax, as contained in a report for the government of Nova Scotia prepared by the U.S.

consulting firm of Arthur D. Little, indicating that CN is intent on forcing Halifax out of the container business through the deliberate application of prejudicial freight rate structures, I move, seconded by the hon. member for Halifax (Mr. Stanfield):
That this House call on the Minister of Transport to make a full statement on motions today explaining the position of this government and its Crown agency, the CNR, in connection with this totally unacceptable bias against the port of Halifax.


Mr. Speaker:: Such a motion, pursuant to Standing Order 43, can be presented for debate only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN BROADCASTING CORPORATION
Mr. Maurice A. Dionne (Northumberland-Miramichi):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas this parliament has charged the CBC with the mandate and the funds to promote national unity and to inform Canadians on issues affecting their lives and their livelihood, and whereas the lead story on the 9 a.m. national radio news on the day following the conclusion of a major conference of first ministers dealt at length with the outcome of the Ali-Spinks boxing match in the U.S.A., I move, seconded by the hon. member for Madawaska-Victoria (Mr. Corbin):
That this House expresses to the public affairs department of the CBC its dismay at their failure to comprehend their mandate, and their absence of a sense of proportion in assessing Canadian values.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the campaign promise of the government in 1974, to the effect that "the total grain handling system from the granary to the ships in the harbour will be revamped and new systems introduced", in view of the fact
February 16, 1978

that deliveries of grain to the west coast have fallen behind some 25 million bushels in meeting the commitment of 43 million bushels a month through the west coast, and in view of the fact that costs of demurrage are building up and Canada's reputation as an exporter is being seriously damaged, I move, seconded by the hon. member for Vegreville (Mr. Mazankow-ski):
That the government take immediate steps to increase efficiency in the grain handling system by implementing the recommendations of the Hall commission report and, further, that the treasury, rather than the producer, bear the costs of demurrage, which liability has arisen through the bungling of this government and through no fault of the producer.


Mr. Speaker:: The presentation of such a motion for debate, pursuant to Standing Order 43, can be done at this time 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):: My question is to the Prime Minister. It is on a matter regarding which, I am sure, the government has some firm estimates. Will the Prime Minister tell the House of Commons how many new jobs will be created this year as a result of the projects outlined in the document appended to the communique yesterday?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the communique, as the House will realize, covered many pages, as did the announcement of proposed or considered projects. It would be difficult to quantify in exact terms the number of jobs that will be created. That happens to be the case. Our hope, and the hope expressed by all the premiers, is that we will turn the economy around from the position it has been in for the past year or two by creating confidence. This confidence is determined to increase the rate of investment in the country.
The rate of investment will create jobs by bringing the price spiral down to 3lA per cent within three years, which is the resolution we all agreed to. We are making the Canadian economy more competitive. All these factors, put together, will mean more jobs for Canadians. This is a fact which has been accepted by all the governments represented at the meeting, and together they decided this was a step unique in the history of managing the economy.
Oral Questions


Charles Joseph Clark: Mr. Speaker, a supplementary question. The federal government has no estimates coming out of the conference, just as it had no proposals going into the conference. I should like to ask the Prime Minister a specific question regarding one of the projects that was appended to the communique. It relates to the advantage that will now be taken, ten years late, of the 200-mile fishery limit. How many jobs can Canadians expect to be created next year by that particular venture?


Pierre Elliott Trudeau: Mr. Speaker, once again, even in his second question, the Leader of the Opposition is asking me to give him a number. I tell him I will not attempt to give him a number. If he wants to ask the people of his province who know something about energy projects if it will be a good thing for the economy and for jobs to advance the energy projects in the west and in the east, then he can ask them. If the number is not one they have in their pockets, they will say so, Mr. Speaker.
He can ask the fishermen on the west coast and on the east coast if it will mean jobs for them, because we have taken these decisions, in terms of building the infrastructure and using the 200-mile limit to our advantage. They will not know an exact figure, but they will know it is important. He can ask the people in Oshawa who know something about the automobile industry if it means jobs for them to have reached these agreements with the province of Ontario and, hopefully, Quebec. They will not give him a figure but they can give him an answer, if he will go and ask them.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, that reminds me of the applause for Muhammad Ali as he went into the ring last night.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Prime Minister will not give me a number, so I will give him a number; the number of nearly one million Canadians who are out of work in this country and whom he and his government ignored when preparing for this conference. Since the Prime Minister has failed on the fisheries question, I should like to give him a chance on the Prince Rupert question and ask how many new jobs will be created in 1978 by the expansion of port facilities on the west coast.


Pierre Elliott Trudeau: Mr. Speaker, the Leader of the Opposition and the leader of the New Democratic Party have both referred to Muhammad Ali. I can tell them that he could probably take both of them on together with one hand tied behind his back.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Hees:: What about wrestling inflation to the ground?

February 16, 1978
Oral Questions


Charles Joseph Clark: The Prime Minister has indicated to the House that he can fly like a bee and sting like a butterfly.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: I would like to ask the Prime Minister, who has failed consistently to tell the people of Canada, one million of whom are out of work right now, how many new jobs will be created by the proposals appended to the communique of yesterday? I would like to ask, in relation to the automotive industry to which he referred, how many new jobs can Canadians expect to have created in 1978 as a result of the agreements relative to that industry, referred to in the communique yesterday?


Pierre Elliott Trudeau: Mr. Speaker, apparently the only fall-back position of the Leader of the Opposition is to ask for a specific number. He knows very well that there is no possibility of quantifying a number with any precision. I can tell him, with respect to jobs in the automobile industry, that if the proposal which the federal government is putting forward to one of the majors for building their plant in Quebec, for instance, is accepted, it will mean thousands of jobs. But it will depend not only on the proposals of the federal government; it will depend also on the confidence Canadians show in their own future. If they think the Canadian economy and the country is closing down this year, as the Leader of the Opposition has predicted, obviously they will not create jobs. But this is not the view of the ten premiers and myself who met yesterday, Mr. Speaker.


Some hon. Members:: Hear, hear!


JOBS TO BE CREATED BY OPENING COAL MINE IN CAPE BRETON
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is directed to the Prime Minister. Given the severity of the present unemployment situation, I can understand the Prime Minister's reluctance to deal with this issue; but having attended that conference and listened to the flim-flam of a million new jobs that was thrown out by the Minister of Energy, Mines and Resources, surely the Prime Minister can give some specifics today.
I would ask the Prime Minister, in relation to another of the projects included in that list-that is, the opening of a coal mine in Cape Breton-how many new jobs will be created for hard-pressed Cape Bretoners this year as a result of that project? How will that ease the unemployment situation in Cape Breton?


Pierre Elliott Trudeau: Mr. Speaker, the hon. lady talks about listening to flim-flam. Maybe the description is one that she sees. She not only has not listened to flimflam, but she has not listened. If she had listened to the minister make his presentation, she would know that the facts she is quoting are not the facts put forward. She is inventing a figure or else drawing it from some imaginative place. He never said one million jobs, Mr. Speaker, and the hon. lady is putting up a straw lady.


Some hon. Members:: Oh, oh!


Miss MacDonald:: Mr. Speaker, I find the Prime Minister's quaint reply just about as amusing as the quaint way in which he refuses to acknowledge that women members of the House of Commons have just as much right as any other person to be addressed as a member.


Some hon. Members:: Hear, hear!


Mr. Paproski:: What do you care about the status of women?


An hon. Member:: Chauvinist.


Daniel Joseph MacDonald: Mr. Speaker, that mid-Victorian view has gone out. I would ask the Prime Minister a question regarding the projects presented to that conference and attached to the communique. I refer to the Fundy tidal power project, another project which will influence hard-pressed Atlantic Canada. How many jobs will it create in 1978 to ease the unemployment situation? Does he have a figure? Are there any specifics?


Pierre Elliott Trudeau: Mr. Speaker, since the opposition cannot describe the conference as a failure, in the face of their colleagues in the provincial governments having declared it a success, their ploy seems to be to ask me to put numbers on the jobs which are going to be created tomorrow. As a result of our meeting yesterday, I am not saying that a million jobs are going to be created tomorrow. But what I am saying is, if they want to talk about the jobs being created today and tomorrow, in the past ten years, for example, we have created in the economy some 2,300,000 jobs.
I really cannot follow the logic of those who say that what we did yesterday has not created jobs today. However, what we did the day before yesterday has created jobs today and will create jobs the day after tomorrow.


Some hon. Members:: Hear, hear!


GOVERNMENT MEASURES TO IMPROVE ECONOMY
John Edward Broadbent: Mr. Speaker, I have a question for the Prime Minister. I remind him, at the outset, that he cannot have it both ways. He is chiding the opposition for producing figures. I remind him that it is his government's document which shows that we are going to have an unemployment rate of 5'/2 per cent in three years, a 7.3 per cent investment increase in each of the next three years, and inflation will come down to 3 Vi per cent.
In light of his government's assertion with regard to these figures, which require, on the employment side, an increase in jobs-to achieve his government's target-of 300,000 in each of the next three years, which is almost twice the rate of job creation in real numbers, according to Statistics Canada, how does he plan to achieve that target which his government, not the opposition, has set?
February 16, 1978


Pierre Elliott Trudeau: Mr. Speaker, the figures which appear in the communique are not the figures that the hon. member has just quoted. He is, once again, using figures which are not those arrived at as a result of the conference yesterday. He is also disputing the fact that we created 250,000 jobs by the fourth quarter of last year over the year before. When there are two ways of interpreting the economic path of Canada, the hon. member prefers to take the most pessimistic and negative one. This is not the view of the premiers who, meeting together, preferred to express confidence in the future of the economy and agreed to objectives in terms of growth and in terms of reducing inflation, which shows they have more confidence in the economy than the opposition parties combined.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


John Edward Broadbent: Mr. Speaker, I am quoting from a document produced by the Department of Finance. It states that unemployment will go down to 5'/2 per cent by 1981. This is the government's figure, not something that we on this side have concocted. Also, with regard to job creation for last year, Statistics Canada state that 182,000 was the real number for last year, not the bogus figure the Prime Minister keeps quoting.
A document put out by the Minister of Industry, Trade and Commerce and a document by the Minister of Finance forecast, in the manufacturing sector, some 74,000 new jobs, on an annual basis, which is about four times the rate which has occurred in the past four years. Will the Prime Minister tell the members of the opposition and, more important, the people of Canada, why he makes the assumption that in the next four years we will have four times as many new jobs in manufacturing than we have had, on an annual basis, in each of the past four years?


Pierre Elliott Trudeau: Mr. Speaker, the whole purpose of the conference was to reverse the trend of the past two years during which Canada was not competitive in its price and cost structure. The premiers and I agreed that in order to achieve that purpose we had to do several things. One of them was to bring down inflation, the CPI, to a rate of 3*/2 per cent within the next three years. The second was to keep down the cost of government growth. The third was to create confidence in the private sector so that the private sector would, with renewed confidence in the economy, create the jobs which are needed. The fourth was to specify a certain number of projects which the governments together could get under way now or in the short term.
There are many assumptions which lead to the optimism felt by the premiers and myself. All those assumptions are spelled out in some detail in the paper. The leader of the NDP can regret those assumptions; he can question whether they will be realized or not. All I can tell him is that the ten provincial governments, together with the federal government, are deter-
Oral Questions
mined to make these optimistic projections a reality. They know they will do it if they can instil into the private sector, by which I mean the unions and management, the same kind of confidence that we in the governments of this country feel.


John Edward Broadbent: Mr. Speaker, the people of Canada want action, not just rhetoric about the confidence felt by the Prime Minister of this country. Considering we all want to bring down the level of unemployment-and I grant that members on the government side want this as much as do members on this side of the House-does the government not intend to bring in a capital works program of the kind all the premiers requested at the meeting in St. Andrews last August? Is the Prime Minister not prepared to cut taxes for medium and low income taxpayers? Is he not prepared to expand the housing budget? All these measures could provide jobs now for the people who need them. I point out that the government made no specific short-run proposals, nor did it set up specific means of achieving its main targets.


Pierre Elliott Trudeau: If the leader of the NDP is referring to some suggestions made at St. Andrews by the premiers, I would point out to him that the same premiers, with one change, were present at the conference during the last few days. We looked, together, at capital projects-a substantial list. We took those on which we felt progress could be made either immediately or in the near future and singled them out.
As to the suggestion regarding tax cuts or stimulation of demand, the hon. gentleman must recall-and, more important, the premiers took it into account-the announcement made by the Minister of Finance in October and our budget of last year which have resulted in the injection into the economy of some $4 billion in addition to what otherwise would have happened. All this led the premiers and myself to the conclusion that the economy would not perform in the years to come as it has in the past two years, because steps have been taken and policy decisions have been taken and implemented which will produce better results. This is extremely important in the eyes of all who took part in the conference.


FINANCE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, my question is to the Minister of Finance.
Since the federal government will soon launch a full-scale energy and industrial development program, which means considerable expenses, and in view of the present high rate of unemployment in Canada, could the minister tell the House whether he intends to introduce a new budget or whether he thinks there is a slight possibility that we can do with the present budget?

February 16, 1978
Oral Questions


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, as the hon. member knows, we have injected $4 billion into the Canadian economy and most of the tax deductions for individuals and corporations came into effect on January 1, 1978. It is only seven weeks since we have taken these incentives and we are analysing on a day to day basis the progress of the Canadian economy, but later this spring we will be able to determine whether or not a new budget is necessary. I hope to be able to do so, but as the proposed incentives did not come into effect before January 1, we must give the economy the necessary time to react.


URBAN AFFAIRS
Mr. Adrien Lambert (Bellechasse):: 
FINANCE
Sinclair McKnight Stevens: Mr. Speaker, my question is for the Minister of Finance. As our dollar continues to plunge, with more than $450 million being drained from our foreign exchange reserves in six weeks so far this year, would

the right hon. gentleman tell us whether he sees it falling still lower than its present value of 89 cents? Would he confirm speculation in the marketplace that it is the government's intention to trigger still higher interest rates in the hope of attracting investment funds to halt the retreat?


Hon. Jean Chr6tien (Minister of Finance):: Mr. Speaker, the Canadian dollar has been floating freely for a number of months and the government has no intention of changing its monetary policy. We do not intervene on the marketplace and we let the value of the dollar fluctuate according to the market situation. Moreover, the government has no intention of determining a fixed rate for the Canadian dollar.


GOVERNMENT POLICY ON VALUE OF DOLLAR
Sinclair McKnight Stevens: A supplementary to the Prime Minister. The Minister of Industry, Trade and Commerce has indicated that a 90-cent dollar is good. Would the Prime Minister inform us whether, in his view, an 80-cent dollar would be even better and, if so, in what way would it be better?


Pierre Elliott Trudeau: I think the question is irresponsible. The hon. member knows that if I were to give an answer, it would set up a wave of speculation which he and his friends might perhaps make money out of, but that is not our intention.


Sinclair McKnight Stevens: A further supplementary to the Prime Minister, who still believes people listen to him. I will give him another try. Our dollar, having collapsed by 37 per cent in relation to the Swiss franc, 23 per cent in relation to the Deutschmark, and 8 per cent in relation to the U.S. dollar, would the right hon. gentleman tell us whether his government has any shame at all and, if so, at what level does he intend to defend the Canadian dollar?


Pierre Elliott Trudeau: Yes, Mr. Speaker, I am ashamed of the lack of intelligence of a member who begins by saying he is not going to listen to me, and then asks me a question.


Some hon. Members:: Oh, oh!

# (1442)


NATIONAL SECURITY
Thomas Charles Cossitt: Mr. Speaker, my question is directed to the Solicitor General. It concerns the following five companies: Emec Trading Company and Morflot Freight Liners Limited, both of Vancouver; Stan-Canada Machinery Limited and Belarus Equipment of Canada, Limited, both of Toronto; and Socan Aircraft of Calgary. Will the minister tell
February 16, 1978

the House whether or not the government is monitoring the profits of these companies kept in Canada in the form of 30 to 60-day bank certificate deposits in an amount exceeding $20 million? Is it for the purpose of determining that none of this money is ever diverted to finance KGB spying activities in Canada or the supporting of extremist elements? How long has this monitoring been going on?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I wish the hon. member would identify the source of his information.


Some hon. Members:: Oh, oh!


Mr. Blais:: At this time I simply wish to indicate that I find it most regrettable that the hon. member is advancing information of this nature, in the manner he has done it, without advising me of the nature of the information. This is the first time I have heard the details which he has advanced. If the hon. member were serious about assisting the security service of this nation, he would refrain from making these alarmist interventions and alarmist declarations without identifying the source of information or providing additional information relating to those allegations.


Some hon. Members:: Hear, hear!


Thomas Charles Cossitt: Mr. Speaker, I preface my supplementary question to the minister by saying that probably he knows no more about his present department than he did about the Post Office.


Some hon. Members:: Hear, hear!
SUGGESTION MPs SHOULD TAKE OATH BEFORE SECRET INFORMATION GIVEN THEM


Thomas Charles Cossitt: My supplementary question concerns media statements attributed to the Solicitor General today, namely, his unctuous admission that some of what I have been saying is true. Will the minister explain what he meant when he was quoted as saying, "We are in a very ticklish situation", and that he was prepared to let some members of parliament in on only some of the secrets, but not all, if they took an oath to say nothing afterwards? Is this an attempt to provide only half-truths to members of parliament? Is it an attempt to muzzle members by forcing them to take an oath before they learn the truth, or half-truth?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, the hon. member knows full well that it has been the practice in the past to have a security briefing with members of the Standing Committee on Justice and Legal Affairs on certain matters presented before that committee. Allegations have been made on national networks and by the hon. member which could be dealt with very well in an in camera meeting of that particular committee. I am informing myself about all the allegations in order to be able to assist in that particular briefing when it is made available.
Oral Questions
The reason we are doing that is simply in order to avoid exactly what the hon. member is relishing. Indeed, a massive amount of information relating to matters which come within national security is best not made public. Yesterday, the hon. member made allegations under a Standing Order 43 motion which are completely unsubstantiated. I find it most regrettable that when he was subsequently asked outside the House he did not want to provide any substantiation for his wild allegations which will have a very serious impact on commercial establishments hiring people within Canada and offering jobs to Canadians.


Some hon. Members:: Hear, hear!


Thomas Charles Cossitt: Mr. Speaker, instead of indulging in a tirade, I wish the minister would give the facts to the House.


Some hon. Members:: Oh, oh!


Thomas Charles Cossitt: At this time, is he prepared to rise in his place and say that nothing I have said is true? I ask him if he dares to do that.


Mr. Speaker:: The hon. member for Oxford.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Surely that question, in its very terms, is argumentative. I am sure that is understood.


INDUSTRY
Mr. Bruce Halliday (Oxford):: Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce, to whom I gave notice. It relates to potential jobs in the auto parts industry. In 1977, Canada's trade deficit with the U.S.A. in auto parts was approximately $3 billion. Recently, as a result of considerable pressure from the auto parts industry, the third country remission order was given approval in principle by the government. But for it to be effective, administrative action is necessary. When will such action be taken? Why has there been such a long delay in finalizing this simple job-creation program?
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, we are working on that. It will take place company by company.


Bruce Halliday: Mr. Speaker, will the minister give us his assurance that the remission order will be fully effective in time for the selling program planned by several Canadian automotive parts manufacturers for the European parts symposium in Geneva, Switzerland, in May?


Mr. Horner:: Mr. Speaker, I think it will be ready by then, but it will have to go forward on a company by company basis.

February 16, 1978
Oral Questions TRANSPORT


HALIFAX-RESULTS OF STUDY ON MOVEMENT OF CONTAINERS
J. Michael Forrestall: Mr. Speaker, my question is directed to the Minister of Transport. Is the minister now in a position to give the House any information with respect to the allegations, findings or revelations in the study prepared by the Arthur D. Little consulting corporation, in the United States, regarding the position Canadian National has taken vis-a-vis the port of Halifax, the port of Montreal and the cost of moving containers into the mid and central U.S. markets?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I am not in a position to give an analysis of the relative freight rates at this point in time. Indeed, I am not able to confirm the findings of the report at this stage. However, I will look into the matter further. I hope to be able to enlighten the House on another date.


J. Michael Forrestall: Mr. Speaker, it is very difficult to believe that Canadian National would deliberately create a bias against the port of Halifax, in favour of the port of Montreal, although that is not something I would put past the minister. In investigating this matter, would the minister advise himself, through consultations with Canadian National Railways, why the cost of moving containers through the port of Halifax has gone up 115 per cent since the base rate was struck in late 1969 or early 1970?


Otto Emil Lang: Mr. Speaker, as I indicated to the House yesterday, another alternative question may be why the rate used to be the same for a much greater distance, as well as asking the question as to why they are now different. I think the hon. member should not leave the impression that there is any concern or doubt about the great future of Halifax as a receiving port for containers. Indeed, our faith in the future of that port was demonstrated recently by the commitment there of very large investment in the development of further facilities for handling containers.


J. Michael Forrestall: Mr. Speaker, I have contained my anger and tried not to be partisan with respect to this question. If the minister is going to rise and give us nonsense such as that, Dr. Bandeen can be told that he will not get his recapitalization bill.


Some hon. Members:: Oh, oh!


J. Michael Forrestall: I am very serious about this. I am somewhat fed up with the manner in which we are being treated by Canadian National. Will the minister, not later than tomorrow, rise on motions and advise the people of the role the government and Canadian National will play with respect to the bias against the port of Halifax, in favour of the port of Montreal?


Otto Emil Lang: Mr. Speaker, I indicated in my first answer that I will give that information when it is available. I will not give it before it is available: I hope the hon. member understands

that. I find it rather strange- although not strange from that party-that the hon. member tries to use an argument in relation to one situation as a reason for filibustering in another case. That is how they deal with the House at all times.


J. Michael Forrestall: Let us have some co-operation.


Otto Emil Lang: It is important for the hon. member to avoid this one-sided pessimism by spreading a certain account about Halifax. He should recognize the fact that the government has not, in a regional way, preferred one port compared to another, as he suggested, or compared whatever it be to another situation. It is true that we have invested in Montreal, in Saint John and in Halifax. It is our determination to try to do a proper economic analysis and produce the necessary port facilities, as we are doing in Halifax, when they are needed.


Some hon. Members:: Hear, hear!


NATIONAL DEFENCE
Miss Coline Campbell (South Western Nova):: Mr. Speaker, my question is directed to the Minister of National Defence. In light of the fact that more people are joining the armed forces, thus putting a strain on housing at CFB Cornwallis, is the minister giving consideration to the construction of new married quarters at that base?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I am aware of the problem as a result of representations from the base and also from the hon. member. The matter is under active consideration at this time.


TRANSPORT
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of Transport. In light of the fact that the user pay theory of the minister was repudiated by the premiers of all the provinces, and in light of the importance of public utility planning and transportation in this country for a balanced economy and balanced economic growth, is the minister prepared to drop the user-pay philosophy and thus do the country a big favour?


Otto Emil Lang: In strict terms, this government and this minister have never had a philosophy of user-pay.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Or anything else.
February 16, 1978


Otto Emil Lang: It is a delightful distortion of the opposition to say that is so, but in every statement I have made and, indeed, in the statement of principles respecting Bill C-33 when it was before the House last session the developmental aspects of transportation and the use of transportation as a developmental tool have been recognized. The bill also recognized that we should not allow the user to pay too much, which is my very important concern.
What I have said, and what I will continue to say, is that productivity in this country, and economic organization, will be far better served if we do not treat subsidies from the taxpayer against one particular cost as though it were a light matter, just because the taxpayer is an anonymous individual. What taxpayers have to recognize in supporting this program is that by hiding subsidies in relation to one cost, we distort the position. I do not believe it makes sense for this country to ship a product abroad so that it ends up costing us extra money over the value of the product. Subsidies cannot be treated as a light matter; the taxpayers' money is important.


Some hon. Members:: Hear, hear!


Lorne Edmund Nystrom: Mr. Speaker, the minister is one user who does not pay. It might not be the government's policy, but it is certainly his policy.


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: I should like to ask him, very seriously, particularly on behalf of the premiers of the Atlantic and prairie provinces, when he is setting transportation rates and freight rates in this country, which is more important to him, the user-pay philosophy or the economic development of those regions?


Otto Emil Lang: Like all members of the House, in doing my work, my transportation is provided, as it is for the hon. member when travelling between Ottawa and Yorkton, Saskatchewan, for political reasons. That is not surprising.
Development in the Atlantic region, in Quebec and in the northwest, where it is needed, has been a strong objective of this government. There can be no doubt about that being a priority objective of this government now and in the future. Surely, that should be clear.


Some hon. Members:: Hear, hear!


Otto Emil Lang: I think its success is evidenced by the changes we are making with regard to freight subsidies in the Atlantic region. The fact is that we should look at every transportation subsidy and see if the money could be better used in another way.
As a result of changes in the Atlantic region subsidies, we are taking a certain amount of money away from subsidizing freight costs. We are still subsidizing many of them up to 50 per cent, but we are taking some of the money away from subsidizing freight costs because it was agreed by five governments that that did not help development in the Atlantic region. We are applying that money specifically to other
Oral Questions
transportation and infrastructure matters which will help the Atlantic provinces.


Some hon. Members:: Hear, hear!


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, my question is for the Minister of Fisheries. It is also of interest to the Minister of Public Works and to the Minister of Transport. Last week's high winds and high tides did tremendous damage all along the coast of Nova Scotia. Damage was done to mariners, wharves, skidways, breakwaters and boats. In fact, in Little Harbour, Smithsville and Shelburne county the federal public wharfs were completely destroyed, along with some 1,000 lobster traps and a number of boats.
In light of the damage that has been done, and the fact that we in eastern Canada have the highest rate of unemployment in the nation, has the m-nister made any plans to review the damage in the disaster area, and will special funds be made available to repair fishermen's facilities, thereby providing much needed employment right now, as well as new facilities for the use of the fishermen?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, following similar representations from the hon. member for South Western Nova, I have directed engineers from my department to assess the damage and report as quickly as they can. We have in our budget a contingency fund which can be allocated for storm damage, and of course this we will do as soon as we have a report on the extent of the damage.


IMMIGRATION
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the Minister of Employment and Immigration and remind him again about a very serious matter, that is, deportation orders issued against nine Jamaican women who are, I believe, in the city of Toronto. As I understand it, this action by the government has been called excessive, cruel and heavy-handed-a view which I share. Can the minister advise the House whether he has taken steps to quash these deportation orders?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, I totally disagree with the preamble to the hon. member's question. Each case is looked at on its individual merits. These ladies knew the situation when they applied to come from Jamaica, and other centres, that if they had
2918

February 16, 1978
Oral Questions
children in that country and declared them, they could not be part of this program. They thereby prevented people who do not have children from participating in the program.
At the present time, many of them are coming forward because of the length of time they have worked and lived in Canada. It seems appropriate, when they write down a lie in making'an application for a work permit in this country, that it should be dealt with on that basis. Notwithstanding that, we do not adopt a general approach; we look at each individual case on its merits. Where compassion can be shown, or where we can take some action to help them, we do that. We also met, under the aegis of the Ontario Human Rights Commission, with a group in Toronto and discussed with them ideas such as amnesties and matters of that nature which they, too, reject. They indicated we might be talking about 2,000 people in this country with children in Jamaica and other countries. With a problem of that size, I think we should be looking at it on an individual basis rather than saying that we will bring all these people in holus-bolus or send all of them out.


Lincoln MacCauley Alexander: I thank the minister for the lecture, but it seems to me that this government and officials of the immigration department have known for some time that women from Jamaica do have babies out of wedlock. This was known to the minister at the time the program was instituted. All I ask the minister is whether he will quash these deportation orders. Also, given the fact that some of these women have been here for five to ten years and have made a significant contribution to our economy and to the way of life in the city of Toronto, will he not at least at this time stay these deportation orders until a complete review can be made in order that a less excessive penalty may be imposed, thereby showing that in these circumstances the minister and the government have some compassion and sensitivity? Surely, some sympathy should be shown in this matter because of the length of their stay in this country. Can the minister give us that assurance?


Jack Sydney George (Bud) Cullen: Even before proceedings are initiated, each case is looked at on its individual merits to find out if we should even commence proceedings. Having made that determination in a series of cases, deportation orders were made. There is an appeal to the Immigration Appeal Board. If they feel there are compassionate reasons or grounds why a deportation order should not be made, they can appeal. We have made all these procedures available to the people concerned, and I do not intend to quash any deportation order; nor do I have that power.


Lincoln MacCauley Alexander: You can stay the orders.


PUBLIC SERVICE
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is directed to the President of the Treasury Board. Can the minister confirm that consideration is being given to the withdrawal of collective bargaining rights from a large number of public servants by imposing a salary ceiling above which public servants would not be eligible to be members of a bargaining group?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, I believe such a proposal was suggested in the Finkelman report and by the Committee on Executive Compensation. Many proposed amendments to the Public Servants Staff Relations Act are under consideration. No final or definite decisions have been made, although we do anticipate presenting something in the House in the not too distant future, as I have indicated publicly on other occasions.


Donald W. Munro: Mr. Speaker, can the minister give us some indication of the level at which limit is being set, the number of public servants affected and whether the government has fully consulted those who are likely to be affected by changes of this kind?


Robert Knight Andras: Mr. Speaker, I indicated to the hon. member in the House that that, among many other proposals, is being examined. No final decisions have been taken in terms of legislation. There has been consultation about the general range of the changes to the PSSRA which we are contemplating at the present time. If and when such a decision is taken and appears in legislative form, the House will obviously be informed of it.


PRIVILEGE
Thomas Charles Cossitt: Mr. Speaker, I rise on a question of privilege. My question of privilege concerns remarks attributed to the Solicitor General (Mr. Blais) today by the news media, a great part of which refers to me. The minister is reported to have said that RCMP security officials approached me for evidence with regard to the matter I raised in this House on June 1, 1977, namely, the training of persons in terrorist activities under the auspices of the Russian KGB at a training camp located at Finsterwalde, East Germany.
The following appears in the media: Asked whether the government is trying to find out who my informants are, the minister is reported to have stated that when security officers of the RCMP approached me, "nothing was forthcoming".
February 16, 1978

The minister has made an entirely misleading and inaccurate statement which I suggest casts reflections on me as a member of parliament and constitutes a matter of privilege.
The facts are these: I was approached shortly after I raised the matter of Finsterwalde in the Flouse by two members of the security service of the RCMP and, if I remember correctly, their names were Inspector Don MacKinnon and Corporal Dwight Dowbiggin. They asked me if I would give them the name and address of the source of my information. I assured them that I was prepared to co-operate to the fullest extent, but I added that I could furnish the name only if the individual was in agreement. I explained to the RCMP on the day in question that the individual was in Europe travelling behind the so-called iron curtain. I further explained that his ability to travel behind the iron curtain could be severely hampered and, indeed, that his life could be endangered if there happened to be a double-agent within the RCMP who came across the name and passed it on to Soviet sources.
The officers fully agreed, but attempted to obtain the name on the basis of assurances that there was really no possibility of there ever being a double-agent within the RCMP and that, due to recruitment methods followed by the security service, this was in practice impossible. Needless to say, the incident revealed by the Secretary of State for External Affairs (Mr. Jamieson) a few days ago regarding the expulsion of 13 Soviet diplomats because of attempts to infiltrate the security service of the RCMP, and their belief that they had actually done so, indicates clearly that I had every right to be concerned. It was not a matter of my not co-operating. The situation in England a few years ago in which Kim Philby, head of British counter intelligence, turned out to be a Soviet agent is a further example which speaks for itself.
In effect the Solicitor General has accused me of not co-operating with the RCMP. On the contrary, I eventually contacted my source when it was possible and was refused permission to divulge his identity to the police, and I advised them accordingly.
The Solicitor General is quoted further as saying that we are in "a very ticklish situation at a very ticklish time". While I agree with that, I cannot agree with something else the minister is quoted as saying, which I think constitutes another matter of privilege.


Mr. Speaker:: Order, please. I hope the hon. member understands that one of the difficulties I have is deciphering what part of his argument is with respect to disagreement with the Solicitor General (Mr. Blais) and what part, if any, constitutes privilege. The hon. member is now going on to cite another matter about which he just said he disagrees with the Solicitor General. Matters about which there is disagreement between the hon. member and the Solicitor General are not matters of privilege, as the hon. member understands, and I would like to be sure that he confines himself strictly to matters which might relate to privilege.


Thomas Charles Cossitt: I agree, Mr. Speaker. I used the wrong phrase. There is no question about that.
Business of the House
The Solicitor General was quoted further as saying that he was prepared to make information available to members of parliament later in the spring on matters I have raised, but only if they swear to keep details secret. Fie is reported to have added that some of the information would be given to members of parliament only under oath, but not all of it. This indicates to me an attempt by the Solicitor General to suppress the privileges of members of parliament, who are elected by the Canadian people to run this country, as if they cannot be trusted without having to take special oaths, and the implication is that with respect to some information the government would not trust members of parliament anyway, even under oath.
Finally, I submit that the Solicitor General has done the following things which breach my privileges and the privileges of others in this House: He has falsely stated and implied that I did not co-operate with the RCMP security service, and he has certainly implied that members of parliament are not to be trusted.
I feel justified in demanding that the Solicitor General withdraw his uncalled for remarks with regard to me and other members of this House. This parliament should not tolerate inaccurate and untruthful statements by the man in charge of law enforcement in Canada, who has demonstrated clearly his utter and total incompetence.
I reserve my right to move any motion which might become necessary arising from this matter.


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I would like to reserve comment on this matter. I would like to read the statement of the hon. member and check the information in it. There has been no intention on my part to indicate that members of this House should not be trusted. There is no aspersion being cast. There is a disagreement in terms of facts, and I would like to check those facts out to see if there is any indication that I should make some correction.


Mr. Speaker:: The matter will therefore stand until such time as the Solicitor General examines the record and decides whether any further contribution to this debate should be made.


BUSINESS OF THE HOUSE
Mr. Baker (Grenville-Carleton):: Mr. Speaker, I do not know who is acting as government House leader today. The parliamentary secretary is nodding his head, so I would like to put some matters to him with respect to House business.
From the point of view of hon. members in this part of the House there is a possibility that the second reading debate on the pipeline bill might end next week. I wonder if the acting government House leader can give us his assurance that we will have the National Energy Board report on Monday. I
80031 -43Vi

February 16, 1978
Order Paper Questions
understand that it should be available on Monday. That could have a great bearing on the direction of the debate.
Will the parliamentary secretary also tell us which bills will be called after the House has dealt with second reading stage of Bill C-25?


Mr. Pinard:: With reference to the report of the National Energy Board, Mr. Speaker, 1 cannot assure the House that it will be tabled on Monday, but I shall certainly inquire and make sure that it will be tabled as soon as possible, because it is of paramount importance that hon. members should be made aware of its contents and findings before they deal with Bill C-25. Today and tomorrow are two allotted days. On Monday, we shall resume consideration of Bill C-25, and should the debate on the bill concerning the northern pipeline come to an end some time next week, we should resume consideration of Bill C-17, and then of Bill C-16, to amend the Bank Act.


Walter David Baker: Mr. Speaker, there have been discussions with my hon. friend, his senior the government House leader, with respect to next Friday and the possibility of adjourning the House for the Liberal convention. Does the government intend to bring a motion forward? Perhaps we could see the terms of the motion fairly soon.


Yvon Pinard: I wish to thank the Leader of the Official Opposition for his offer of co-operation in this area. During the next few days, we will indeed contact the House leaders of the opposition parties and try to reach an agreement not to sit next Friday while the Liberal Party of Canada is holding its national convention in Ottawa.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Yvon Pinard: Mr. Speaker, the following questions will be answered today: 115,691,734,830, 927, 1,131 and 1,139.


Mr. Herbert: 1.	In the past five years, how many deputy ministers retired and continued to work for the government in another position?
2.	What are their names and what positions did they hold after leaving the position of deputy minister?


Yvon Pinard: I am informed by the Post Office Department,

the Departments of Industry, Trade and Commerce and Energy, Mines and Resources as follows: 1. Three.
2.	Mr. Bernard Wilson, retired deputy minister of Labour, provided consulting services in the area of labour relations in 1975 to the former Postmaster General, Hon. Bryce Mack-asey. Mr. J. F. Grandy, retired deputy minister of Industry, Trade and Commerce, was reappointed as deputy minister by order in council effective January 2, 1975 to March 31, 1975, to accommodate management's need to retain his services until Mr. O. G. Stoner's appointment in April 1975. Mr. G. B. Williams, retired deputy minister of public works, is on a personal services contract in the office of energy conservation in the Department of Energy, Mines and Resources. All other departments and agencies submitted "Nil" replies to this question.


Mr. Howie: From November 1, 1976 to November 1, 1977, how many jobs were created in the Atlantic region as a result of DREE assistance and what were their nature?


Mr. Donald Wood (Parliamentary Secretary to Minister of Regional Economic Expansion):: The reply for the Department of Regional Economic Expansion is as follows: The majority of programs administered by DREE do not lend themselves to job creation figures. However, under the department's Regional Development Incentives program, which accounted for 17.4 per cent of the total DREE expenditures for 1976-77, incentive offers can be related to the anticipated number of jobs to be created. A total of 2,704 jobs are expected to be created in the Atlantic region as a result of accepted incentive offers made under the Regional Development Incentives Act from November 1, 1976, to November 1, 1977. The department does not compile statistics on the nature of these jobs. In addition, it can be assumed that a significant number of jobs will be created as a result of expenditures made for development-oriented projects under General Development Agreements and other agreements.


Mr. La Salle: With reference to the Report on Regional Development Incentives for the period July 1, 1969 to December 31, 1976, what is the breakdown of Items 261-268 listed under S.I.C. Code in Table II, regarding the 68 projects related to the Canadian furniture industry?


Donald Paul Wood: With reference to the Report on Regional Development Incentives for the period July 1, 1969, to December 31, 1976, the breakdown of the 68 projects related to the Canadian furniture industry listed in table II, under SIC codes 261-268, is shown below.
February 16, 1978

Order Paper Questions
Cumulative Statistics Since the Program's Inception for Projects (Net Accepted Offers)
Which Had Been Completed as of December 31, 1976
Canadian Furniture Industry
Amount of Incentive ($000,000)
Eligible Costs ($000,000)
Direct Jobs (to nearest ten)
No. of	Estimated at	Approved at Time of Project	Expected at	Approved at Time of Project	Expected at	Actual at Time of ProjectSIC Code*	Projects	Time of Offer	Completion	Time of Offer	Completion	Time of Offer	Completion261	57	3.029	2.850	12.724	12.725	1,750	1,700266	11	0.699	0.700	2.086	2.312	300	180Total	68	3.728	3.550	14.810	15.037	2,050	1,880
* Major Group 9, Furniture and Fixture Industries, includes SIC codes 261, 264, 266 and 268. No projects fell within codes 264 and 268.


Mr. Mazankowski: 1.	Is the government giving any consideration to replacing the ten cent per gallon excise tax on gasoline used for private purposes with a three cent per gallon excise tax on all petroleum products as recommended by the Canadian Automobile Association and (a) if so, on what date will the change be made (b) if not, for what reason?
2.	Has the government undertaken any studies to determine the effectiveness of the excise tax on gasoline in promoting energy conservation and (a) if so, what were the results (b) if not, for what reason?
3.	Is the government giving any consideration to requiring motor vehicle manufacturers and their agents to indicate on any bill of sale all federal and provincial taxes and thereby inform consumers where their money is going?
4.	(a) Has the government undertaken any studies to evaluate the effectiveness of the weight and air conditioner tax, imposed on automobiles as an energy conservation measure and (i) if so, what were the results (ii) if not, for what reason (b) if this tax is found ineffective, will the government consider removing it and if it is found effective, will the government require it to be clearly stated as additional taxes on any bill of sale?


Yvon Pinard: I am informed by the Departments of Finance and Energy, Mines and Resources as follows: 1. The government is continuously reviewing and evaluating proposed legislative changes. With regard to the proposal for replacing the ten cent per gallon excise tax on gasoline for personal use with a three cent per gallon tax on all petroleum products, it is considered that such a change is not a viable alternative at this time. The increase in the price of crude oil is affecting the prices of all petroleum products. The existing excise tax on motor gasoline for personal use provides a further incentive to conservation in an area of petroleum use where it appears easier for consumers to make additional adjustments in consumption patterns. Imposition of a tax on all users would unduly raise the cost of home heating and have adverse effects on Canada's competitive position by raising producers' costs.
2. No. (a) Not applicable, (b) The excise tax was not designed primarily as an energy conservation measure. The ten cent per gallon excise tax on gasoline for personal use is one of a number of influences on the demand for gasoline. These include the increase in the price of crude oil, the mileage requirements for automobiles set by EMR, the excise tax on heavy cars and other excise taxes on energy consuming products. It is difficult to disentangle the effects of all relevant influences on sales of motor gasoline so as to determine the
precise importance of the excise tax in terms of energy conservation. It should be noted, however, that there is broad agreement among researchers that consumer demand for motor gasoline is responsive to changes in the price of the product.
3.	No mechanism exists whereby retailers can be forced to display federal taxes on their bills of sale to consumers. Federal commodity taxes are imposed at the manufacturer's level and as such become an element in the retailer's cost. This is not unlike other taxes or costs incurred by the retailer, such as realty taxes, tax on corporate profit, the employee's share of Canada pension, unemployment insurance, workmen's compensation, hospitalization etc., which are passed on to the consumer but are not identified on the bill of sale. With regard to provincial taxes, this matter is the responsibility of the individual provinces concerned and as such is outside the area of federal jurisdiction.
4.	(a) The weight tax on heavy automobiles is just one of a number of government measures and market circumstances that bear on consumer and producer choices as to the relative desirability of buying and producing various types of automobiles. For example, the mileage requirements set by EMR and the increase in the price of motor gasoline resulting from both higher crude oil prices and the ten cent per gallon excise tax, make heavier, less fuel-efficient automobiles less desirable. While it is difficult to isolate the precise effects of each individual measure, it is clear that the tendency is toward the use of smaller, lighter, more fuel-efficient vehicles. The $100 excise tax on air conditioners represents a significant deterrent to their purchase. Comparisons of revenue collected and sales of vehicles over recent months with data for the 1975 calendar year (the latest for which actual data on air conditioners sales exist), indicate a significant increase in the percentages of new cars not equipped with air conditioners. While this could be in response to several influences which are difficult to isolate, it is thought that the tax is a significant factor, (b) The question of the identification of federal taxes as a separate item on the retailer's bill of sale was addressed in question 3.


Mr. Herbert: Has the Department of National Health and Welfare monitored the effect on domestic production of the enforcement of health protection branch manufacturing regulations?

February 16, 1978
Order Paper Questions


Hon. Monique Begin (Minister of National Health and Welfare):: Monitoring the impact of the enforcement of the Food and Drug Regulations on domestic production of those commodities covered by the regulations is done on a continual basis. When specific regulations are being developed, the impacts of the proposals are reviewed from two positions- effects on the health and well-being of consumers, and the economic impact of the proposed regulations on consumers and the affected industry.


Mr. Rodriguez: For each Fiscal year since 1970, what amount was spent in the Constituency of Nickel Belt by the Department of National Revenue and those agencies that report to it?


Hon. Joseph-Philippe Guay (Minister of National Revenue):: In so far as the Department of National Revenue is concerned: 1969-70, $1,245,108; 1970-71, $1,404,788; 197172, $1,662,137; 1972-73, $1,898,517; 1973-74, $2,181,375; 1974-75, $2,660,423; 1975-76, $2,853,854; 1976-77, $3,272,602; 1977-78, $2,753,571; (to date).


Mr. Herbert: For each of the past Five years, what was the percentage increase in (a) the money supply (b) productive capacity?


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: (a) Increase in money supply. Money supply is defined as demand deposits at chartered banks plus currency held outside banks (Ml): 1973, 14.4 per cent; 1974, 9.7 per cent; 1975, 13.8 per cent; 1976, 7.9 per cent; 1977, 8.1 per cent, (b) Increase in productive capacity. The data below are annual increases in productive capacity of the manufacturing sector as derived from Statistics Canada published data. Statistics Canada does not publish a corresponding series for the total economy. 1973, 4.1 per cent; 1974, 4.8 per cent; 1975, 4.1 per cent; 1976, 3.6 per cent; 1977, 3.3 per cent.


Yvon Pinard: Mr. Speaker, if question No. 476 could be made an order for return, that return would be tabled immediately.


Mr. Speaker:: The questions listed by the parliamentary secretary have been answered. Is it the pleasure of the House
[Mr. Herbert.)
that question No. 476 be deemed to have been made an order for return?


Some hon. Members:: Agreed.
[ Text]


Mr. Elzinga: 1.	Under the Social Action Programme of the Department of the Secretary of State, what was the total amount of funds granted, by province and territory in
(a)	1969 (b) 1970 (c) 1971 (d) 1972?
2.	By province and territory, what (a) were the names and addresses of the organizations who received such grants and what was the amount in each case
(b)	was the specific reason for each such grant in (i) 1969 (ii) 1970 (iii) 1971 (iv) 1972?
Return tabled.


Mr. Jones:: Mr. Speaker, I rise on a point of order. On several occasions I have drawn the attention of the Parliamentary Secretary to the President of Privy Council (Mr. Pinard) to the possibility of obtaining an early, complete, and detailed answer to question No. 145. I would appreciate it if he could expedite that.


Yvon Pinard: Mr. Speaker, I refer the hon. member to the last answer I gave him on the matter. May he rest assured of my good faith in my efforts to reply to his question as soon as possible.


Mr. Speaker:: Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



THE CANADIAN ECONOMY


John Edward Broadbent: Mr. Speaker, I ask leave, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), to move the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration, namely, the failure of the federal government to place before the first ministers' conference any concrete proposals either to produce jobs for the immediate future or to establish the specific means for creating long-term economic growth, as a result of which 1.6 million unemployed Canadians are left without grounds for optimism for their future and the Canadian economy will continue to falter.


Mr. Speaker:: Pursuant to the relevant provision of Standing Order 26, the hon. member for Oshawa-Whitby (Mr. Broad-bent) gave the Chair notice of his intention to move this motion at this time. This has given me the opportunity to

February 16, 1978

examine the terms of the motion in order to examine first, as I am required to do, whether it is a proper subject to be discussed, which essentially provides the machinery for the establishment of debates on matters of an emergent nature.
I refer particularly to sub-paragraph 16(a) of Standing Order 26 which reads as follows:
16. The right to move the adjournment of the House for the above purposes is subject to the following conditions: (a) The matter proposed for discussion must relate to a genuine emergency, calling for immediate and urgent consideration;
I think hon. members will understand that I am not about to endeavour to define in a specific and comprehensive way what type of matter will qualify pursuant to this paragraph, but I am able to address myself to the subject matter of this particular motion and say that a motion of criticism of the government's performance at a federal provincial conference does not, in my opinion, qualify under that paragraph, and therefore I cannot grant the application.



POINT OF ORDER


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise on a point of order. On December 7 I placed a question on the order paper asking whether the hon. member for Assiniboia (Mr. Goodale) was being charged for using the DOT Telex network to send out political messages. This is a straightforward question and there has been time to answer it since December.
On December 13 I placed a starred question on the order paper asking whether Air Canada was going to have a flight from Winnipeg to Chicago. In light of the fact that Air Canada has issued a press release to the effect that it will not be flying this route, I submit it is ridiculous that the parliamentary secretary cannot provide an answer to the House of Commons.


Yvon Pinard: Mr. Speaker, so far we have answered over one third of the questions put on the order paper, which is an excellent average. However, I can assure the hon. member that we will check his questions and try to answer them as soon as possible.
________________________________________2923
Regional Disparities



GOVERNMENT ORDERS


Hon. Robert L. Stanfield (Halifax) moved:: That, in the opinion of this House, the government must now renew its commitment to reduce regional disparities by developing and implementing without further delay comprehensive development strategies for eastern Quebec and the Atlantic provinces including such areas as transportation, energy, primary resources, industrial and service sector expansion.


Mr. Speaker:: Pursuant to Standing Order 58(11) proceedings on this motion will expire at the ordinary hour of adjournment this evening.


Robert Lorne Stanfield: Mr. Speaker, before presenting my case for the resolution, I should like to clear away a little piece of debris which also helps to point up one of the things that has been wrong with the general approach in the fight against regional disparities in the area being considered by the House today.
Yesterday in reply to a question, the Minister of Transport (Mr. Lang) gave the impression that somehow a royal commission appointed by the government led by the right hon. member for Prince Albert (Mr. Diefenbaker) imposed upon the minority Pearson government the necessity to pass legislation governing freight rates which the Minister of Transport does not approve of today. The minister correctly pointed out that this legislation provided inadequate regulation of freight rates in areas where competition was limited. The minister tried to give the impression that this was somehow or other imposed upon a minority government. He said, for example, that the reason freight rates are what they are is that after the MacPherson commission set up by the right hon. member for Prince Albert, the minority parliament enacted legislation which gave, essentially, freedom to the railways to set rates on the principle of what the market would bear, on the theory that competition would control the situation.
In my opinion this has worked to the detriment of the Atlantic area. I happened to be premier of Nova Scotia at the time this legislation was being drafted and considered by the government and put through the House. All Atlantic governments opposed it on the grounds the minister mentioned yesterday. The Maritime Transportation Commission opposed it, yet the government insisted on passing the legislation in the form it was adopted.
For the minister to suggest that the Liberal government of the day was somehow pressed into adopting the legislation by a royal commission is to suggest that the Hon. Jack Pickersgill, who was Minister of Transport at the time, was a patsy- which he was not, whatever else he was-and that he completely falsified history.
It is the kind of distortion and political falsification which we do not need, particularly in the case of regional disparity and its causes. This is the kind of distortion and falsification

February 16, 1978
Regional Disparities
that increased my own personal doubts about how much one can believe of many of the statements being made by ministers these days.
I deliberately made that statement at the beginning, Mr. Speaker, because it is not my intention to generate any partisan heat in the course of this debate.
I wish to focus attention on a serious and deepening national problem and the urgency in facing it. As I indicated, the way in which freight rate legislation and the control of freight rates have worked against regional economic development in the Atlantic area is an example of what I have in mind.
First of all, there is much about regional economic disparity we can agree on; it exists as far a- the Atlantic provinces are concerned. It is serious, and it is clear the approaches in dealing with it are inadequate. Ten years ago the Prime Minister (Mr. Trudeau) made a commitment at a time when he had not given it much thought. The problem was how to attack regional economic disparity. Fie promised the establishment of a department, which became DREE. At that time I expressed some reservations concerning the ability of such a department to co-ordinate adequately the operation of the federal government. I expressed some reservations about the whole approach and I think they were justified. In any event, whether they were justified or not, surely the time has come for a thorough review of the policy and approaches that have been followed during the last decade. I want to do this without threshing over too much old straw and I do not propose to spend much time on statistics.
There is clearly serious unemployment in eastern Quebec and the Atlantic provinces. There is a serious gap in the per capita income in that area as compared with the rest of the country. This gap exists despite very substantial transfer payments. Indeed, in a very real sense the economic weakness of that region is more serious than the income disparity would indicate because transfer payments have, in fact, shored up, and continue to shore up the income figures.
The economy of that region is relatively weaker vis-a-vis the rest of Canada than it was ten years ago. And I say that very deliberately, Mr. Speaker. I do not say this to spread gloom or doom, or anything like that. It is not that there are no opportunities in that region, there are opportunities. There are opportunities in industries such as fisheries, by way of tidal power development and power development generally, and many things that no doubt DREE has under consideration.
It is not a matter of being gloomy, it is a matter of recognizing that far from making progress the economy has slipped in terms of strength relative to the rest of the country. This to some extent has been disguised by the increase in transfer payments from the Government of Canada to those areas. It is time for a thorough review of policies.
I do not think DREE has ever been in the position to develop and implement a coherent strategy to attack economic policies in that area. There have been attacks launched against particular problems. There have been agreements entered into

concerning problems in sections of the Atlantic provinces. There have been useful steps taken to help develop the infrastructure in various parts of the Atlantic provinces. I, for one, have never been able to see what seems to me to be essential, a plan or a strategy involving the co-ordinated efforts of all the federal departments and agencies. This should be a plan not imposed on the Atlantic provinces, but worked out with their governments, and followed by their governments, a coherent, co-ordinated and co-operative effort. Whatever else is essential to attack problems of regional disparity in that area, those requirements are essential and we have not met them, Mr. Speaker.
Some are questioning not only the lack of coherency, the lack of co-operation and the lack of co-ordination, but also whether what has been done is moving things in the right direction at all.
In a recent lecture, which was described as deliberately provocative, Professor Thomas H. Courchene of the University of London, has argued that the effect of transfer and other policies in recent years has been to worsen the economies of the poorer provinces. In the introduction to his lecture he says that the current system of transfers, between governments and from governments to persons, is not at all conducive to eliminating regional economic differentials in this country.
Indeed I should argue the current pattern of transfers is serving to rigidify, perhaps even exacerbate provincial and regional disparities. 1 do not think one has to accept all of that to recognize that there may be some questions to be asked, or to agree fairly substantially with what Professor Courchene declares on page 17 of these lectures, when he says that "The thrust of the above analysis suggests that the economies of the have-not provinces are likely to have deteriorated relatively over time" which is my own view-"deteriorated in a sense they are put in a position where to an increasing extent they rely on federal transfers for their well being."
Put more bluntly, the result of the combined policies with respect to Canada's various regions is such that to a substantial degree Canada has turned several provincial economies into what financial analyst Don McGillivray has referred to as government dependencies. As a native Nova Scotian 1 do not read that with any great pleasure. It seems to me there is some element of truth and that we have and are creating governmental dependencies. I do not suggest the federal government is solely to blame for this. I believe that George Post, at the time acting chairman of the Economic Council of Canada, hit the nail pretty well on the head when he said to the Chronicle-Herald on September 20, 1977:
It's never quite the right time for governments to engage in bold new initiatives, ... Some day, governments are going to have to face the disparity issue,... The problem shows not the slightest indication of going away on its own.
I think, Mr. Speaker, the time has come to take a clear, hard look at what has been going on. Some bold new initiatives and approaches should be conceived and implemented. It is not simply a matter of me expressing opinions or academics like Professor Courchene. A senior Newfoundland minister recent-
February 16, 1978

ly declared that the effort to achieve economic development, as contrasted to what has been done to improve infrastructure, had been a failure.
Surely in view of these statements, and in view of what we can all see, it is necessary to take a hard look at what that minister described as a failure, and try to do something better. As I say, and I cannot repeat it too often, a basic condition for doing better is a thorough co-ordination of federal effort and the thorough co-operation of the concerned provinces with the federal government in attacking the problems of the region.
It may be that the problems and opportunities in Newfoundland, Labrador, and eastern Quebec are sufficiently different from those of the maritime provinces to require, in part at least, a distinctive approach from what would be appropriate for the maritime provinces. However, the federal and provincial governments, and I deliberately say federal and provincial, must have enough political courage to take a regional approach. This would not please every provincial or federal constituency in the region. Any coherent and effective plan to attack the causes of regional disparity may seem unfair for the time being to some sections in that region. The governments must have the intestinal fortitude to face that complaint. They must not be frightened by complaints that another province or another section in their own province is doing better and, as a result, the regional effort is disrupted. No approach will be absolutely fair to all at the same time. Lord knows there is plenty of intraregional disparity now, plenty of economic disparity within the region. It may indeed be as great as the disparity between the region and the rest of the country.
In terms of getting agreement, understanding, approval of an approach within the area, and of getting the people in various walks of life and different sectors of the economy behind a program, the people should be more involved in developing it. I am not suggesting that the ministers of this government should be following absolutely a program such as the one we had in Nova Scotia, called Voluntary Economic Planning. It involved representatives of business, labour, farmers and other people in developing a planned approach. It was not simply a matter of people accepting something produced by the bureaucrats and the politicians, but rather of developing an approach together.
If this is a practical way to proceed in the maritime provinces, it could diminish enormously the distrust between different provinces, the distrust between different sections of the provinces, and could increase enormously the support that any strategy or approach would receive from the total area. It is worth thinking about some variation of that kind of approach, plan, or method of policy. I believe it is worth considering the application of this to the maritimes as a whole.
When I talk about maritime co-operation I want to make it very clear that I am not proposing, at this time at least, maritime governmental union. I want that made clear. It has been recommended by a commission, but it has not yet been
Regional Disparities
adopted and I see no sign of it being adopted. I do not wish to drag any red herrings around at this time.
There has been a degree of co-operation developed among the maritime provinces. However, one sometimes gets the impression that competition is being stressed more than cooperation. When the going gets tough, competition between the provinces takes over. It may not be a big matter, but there has been feuding over the location of the veterinary college. Anybody who has been following the situation can mention other instances where one province is seen to have difficulty going along with the others.
Co-operation between or among the provinces cannot be just a matter of convenience. It must be a governing factor at all times. Newfoundland-Labrador and eastern Quebec may be sufficiently distinct, but surely it makes sense from a national point of view to treat the maritimes as a unit of economic development. That does not mean the federal government should impose on those three provinces a plan of development. It does mean that the federal government should insist on a common plan of development and a common strategy to be developed by the people of the three provinces and the federal government. Once that plan or strategy has been agreed upon by everyone concerned, the federal government, its departments and agencies and the provinces, that strategy or plan could only be changed by agreement.
The federal government must show leadership here. That is not to say the total responsibility rests with the Government of Canada. I do not believe that. However, it must take the leadership. The governments and the people of the region must have their responsibility as well. Let us have an end to ad hoc federal initiatives and an end to ad hoc demands for federal action on particular problems. They have never amounted to an adequate approach and they certainly do not now. In fact, they are creating a complex of dependence.
I do not suggest that all decisions on projects be postponed until there is agreement on a strategy or plan. Far from it. There are measures in particular sectors that should go forward promptly, ones that would clearly be right and appropriate under any plan. Some of these will be suggested today by colleagues who will follow me in speaking, in the areas of fisheries, development and transportation. These specific measures will be full of merit. Many meritorious suggestions have come forth from the maritime provinces. These specific measures in particular sectors will not be enough in themselves to constitute a coherent and adequate plan to lift the economy of the maritimes and the Atlantic provinces as we want to see done.
The governments must do some pretty fundamental thinking about the total strategy. I am not suggesting one should accept all the doubts created by Professor Courchene and other academics, thoughtful men no doubt. Nevertheless, after ten years of government under the present Prime Minister, eight years of DREE, and after what any fair minded person must qualify at best a very limited success, it is surely time to take a very searching look at what has been going on, what has worked, what has not worked, and what is the trouble.
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Regional Disparities
Because of my strong belief about the need for review, I am happy to see the academics looking at this. I was pleased to see the Economic Council of Canada study regional disparity. It published the findings of its study in a report called "Living Together".
This is not the first time the Economic Council of Canada has taken a very comprehensive and helpful look at this problem. When Mr. Deutsch was chairman of the council in the sixties, the council published a very comprehensive study of the problems of regional disparity in Canada. It is my hope that the new chairman of the Economic Council will keep this great national problem very high on her list of priorities for the council to study.
There seems to be, as I will indicate in a few moments, a substantial difference of opinion between the Economic Council and the Department of Finance, to mention one department. For all I know, there may be a substantial difference of opinion between the council and the Department of Regional Economic Expansion. It is essential that they all get together to do their thinking and try to come together in their assessment of what needs to be done.
At the time of this report last year, the acting chairman described governmental response to it as "underwhelming". That is the word he used to describe the reaction in government circles. The Economic Council highlighted one factor in its report. It noted that unemployment increases more rapidly in the Atlantic provinces than in other provinces during a national economic recession. Simply put, the report suggested that this means that effective demand falls more in the Atlantic provinces than elsewhere as a result of a national recession. The report made some recommendations. It recommended a joint federal-provincial effort to offset this factor through a fiscal stabilization plan, part of which might involve temporary tax cuts, directed to the Atlantic provinces and not to the rest of Canada.
This is not the only point made by the council in this report, but I was interested to find the council pushing hard the view that during a recession the economy of the Atlantic provinces falls further behind than is the case with respect to the economies in other parts of the country. Whatever one thinks about the solution the Economic Council proposed, its analysis of the problem is very impressive.
We in the maritimes have always felt in our gut that economic depressions or recessions slowed down our growth more than was the case in the rest of Canada; that we were usually the first to be hit and the last to recover, and that any momentum we got going during the upward movement of the economy was destroyed during the recession and became very difficult to restore. If this gut feeling is right, if the analysis made by the Economic Council is right, this explains a good deal of the chronic weakness in the economies of the areas to which I have referred. If national recessions-and they come every few years-have a much greater impact upon the Atlan-

tic region than upon the rest of the country, then the effect becomes cumulative.
After reading this report, I wrote to the minister of finance of that day, now the hon. member for Rosedale (Mr. Macdonald), asking what the Department of Finance thought about this point made by the Economic Council and about its proposals to correct the situation. The minister was most responsive and I want to thank him publicly now for his courtesy in replying at length. He wrote me a long letter setting forth the department's reaction.
The department did not accept the council's contention that, because unemployment rises faster in the Atlantic provinces during a national recession, the economies of those provinces are necessarily set back further than they are in the other provinces. It stated that unemployment swings down further during recovery than it does in other provinces-not to a lower point, of course-and that consequently the entire cycle does not hurt the Atlantic economy. The department argued that during national recovery the drop in the rate of unemployment was greater in the Atlantic provinces than in the country at large. The former minister argued, also, that although unemployment rises to a higher point in the eastern provinces during a recession, output does not.
I must say I do not find the department's response to the analysis of the Economic Council very convincing. This may not indicate that the department is wrong, but I find myself still siding with the Economic Council. To my mind it does not explain away the effect of recession on the Atlantic economy. As to the council's proposals to stimulate effective demand and employment by a policy of fiscal stabilization, the department pretty well dismisses it out of hand, on the whole, I thought, with arguments which are reasonably convincing. I am not prepared to make a case for the remedial measures the council proposed.
Toward the conclusion of his letter the former minister wrote:
It is far from clear that the new approaches proposed by the council offer any net advantage over the approaches already being used in the effort to lessen regional disparities. It may be noted that a number of approaches already in use, including DREE grants and the regionally differentiated investment tax creadit of the last budget involve specific incentives to locate economic activity in the target areas. In general, this seems to us likely to be more effective than less direct approaches.
As I have indicated, I accept his criticism of the solutions proposed by the Economic Council but I have to say that while the hon. member for Rosedale was persuaded that the methods being employed were probably more effective than those proposed by the Economic Council, those methods have not yet shown anything which could be considered hopeful by way of results. I believe the Economic Council drew attention to a very serious problem and that its analysis was significant.


The Acting Speaker (Mr. Turner):: Order. I regret to interrupt the hon. member but his allotted time has expired. He may continue with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.
February 16, 1978


Robert Lorne Stanfield: I apologize to the House, Mr. Speaker. I will wind up very shortly. To sum up, we have to examine what has been going on in other departments. We have to insist upon co-operation and co-ordination. We have to pay strict attention to the analysis of the problem put out by the Economic Council. And we must pay attention to something else which was said by the hon. member for Rosedale while he was minister of finance.
The very fact that such a substantial government effort had to be made in order to achieve results would seem to indicate that there are limits to what the government can accomplish when it moves to counter the economic forces producing regional disparities. I am not saying we could not perhaps do more in this regard, but that we should not expect government policies to completely eliminate regional disparities. For this to occur, the proper conditions must exist in the private sector of the economy.
What does that mean? I thought this was what we were trying to create. I thought we were trying to create proper conditions in the private sector in eastern Quebec and the Atlantic provinces. Was the minister suggesting there is something wrong with attitudes or with the organization of industry in that region of Canada? Was he suggesting there are marketing difficulties? What, in the view of the Department of Finance or of the government generally, are the proper conditions? What are the weaknesses which exist today? I think it is time for frankness. I do not expect the government to commit hara-kiri by saying things which are offensive to the people of that region, but if there is something wrong with existing conditions such as to prevent enterprise from developing in the region, I think it should be discussed.
Of course the classic grievance in the eastern provinces arises from the very shape of the Canadian market which at the present time offers such striking advantages to industry in central Canada. I think we ought to be considering ways of overcoming this situation which has been a significant cause of regional disparity. Unless we can do something to change the shape of the market, the areas we are talking about today will increasingly become colonial economic dependencies of central Canada.
What are the weaknesses in the private sector? Granted, the government cannot do everything itself. My colleagues will be putting forward specific proposals.
In summary, my case is very simple. We have not been successful. By "we" I mean the Government of Canada; the Parliament of Canada; the government, the legislatures, and the people of the areas concerned. We have had very limited success, to the degree we have had any success at all, in confronting these problems over the last decade.
In order to have success we must have a coherent, co-operative, co-ordinated policy. Personally I am not happy. Huge sums are being spent, and the economy is not strengthening. I am not happy when I see the governments in the area I come from becoming increasingly dependent on the federal government, nor the increasing discouragement which I sense there. Not just the federal government, the provincial governments, and the people of the region, but everyone should accept their
Regional Disparities
responsibilities and face reality. The beginning of this process is a review of what is going on. Certainly it includes the whole-hearted co-operation of provincial governments. It requires leadership from the Government of Canada, and that is what I ask for today.


Some hon. Members:: Hear, hear!


Mr. Jamieson:: Mr. Speaker, in rising to compliment the hon. member, and not wishing to participate in the debate, I use the devise of a point of order, and perhaps it may be a question of privilege. I compliment him on a very well-balanced and thoughtful presentation. He was alluding to me when he made reference to my having indicated my feeling that DREE had failed. In confirming his views on this matter, I want to say that I was speaking in that context in terms of new industry in the area. It was not a blanket denunciation. I am sure the hon. member did not mean it to be in that sense.


Robert Lorne Stanfield: Mr. Speaker, certainly I meant to make it clear that the minister thought DREE had done well in terms of infrastructure, for example, but it had not been a success- and perhaps he used the word failure-in terms of economic development. I do not want to be unfair to the hon. minister.
[ Translation)


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, my first words are of course directed to the hon. member for Halifax (Mr. Stanfield) whose sense of moderation and responsibility in debating such serious issues I always admire. He almost always shows that attitude anyway, I think, and I believe he considers the economic problems prevailing in the Atlantic provinces and in Quebec as a very serious issue.
I wish to congratulate and thank him for having given us the opportunity to discuss regional disparities, the particular economic situation of eastern Quebec the Atlantic provinces, as well as the efforts that have been made, the successes achieved and, above all, the important challenge facing us. I thank him for the opportunity he has given us, Mr. Speaker, and I want the House to know that during the time allotted to me I will try to talk the way he has, that is in a general way at the beginning, but also in a rather selective way as regards what we have done in the past, what we are doing now and what we hope to be able to achieve with the co-operation of the provinces in the coming months and years.

I welcome the opportunity to speak to this motion, particularly in light of the discussion related to regional policies and regional development which took place at the conference of first ministers. As hon. members know, I participated in a number of the sectoral conferences leading up to the conference of first ministers and was represented by senior officials on the federal delegation to others. The DREE input to these conferences was significant and the DREE presence was widely appreciated, indicating as it did the emphasis which the federal government has been giving, increasingly in recent years, to the regional dimension of policies affecting economic
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February 16, 1978
Regional Disparities
development. This dimension received a good deal of attention at the meeting of finance ministers and at the conference of first ministers itself, where it was represented by a separate item on the agenda. The lead speaker for that item was Premier Hatfield of New Brunswick. I should like to refer to some of the comments he made concerning that particular topic. Page 5 of his statement reads as follows:
Looking beyond the cyclical condition, I think that very significant progress has been made in broadening the economic base in many of the poorer regions. It is this longer term improvement which should permit us to make significant gains once the economy returns to more normal levels.
Let me try to illustrate this for the Atlantic provinces.
One key indicator of the basis for growth in the Atlantic region is the amount of fixed capital stock. There has been an impressive growth in the real level of capital stock. For instance, between 1961 and 1974, total fixed capital in the Atlantic provinces increased at an average annual rate of 9 per cent-almost two percentage points higher than the rate of growth in Ontario.
Before the cyclical downturn, when capacity utilization declined across the country, this investment was reflected in impressive growth in output and employment. For example, from 1966 to 1974, the value of Atlantic manufacturing output grew at an average annual rate of 24 per cent-a full nine points above the national average. Over the same period, Atlantic manufacturing employment increased at an average rate of nearly 2 per cent-almost twice the Canadian average.
Witf respect to the need for modification to the approach of DREE, he said:
Both the investment tax credit and the recently announced employment tax credit have been designed to provide additional assistance in the DREE designated areas.
He referred to other tools, other means, and other departments becoming involved in fighting disparities. He said:
Programs of the federal government must continue to be increasingly designed with regional development needs in mind. The most important method in achieving a co-ordinated approach to regional development at the present time, however, is that of the Department of Regional Economic Expansion.
Also he said:
We should give DREE a good deal of credit for what it has achieved and we cannot blame regional development policies for the setbacks resulting from cyclical difficulties.

Mr. Speaker, those were the comments of premier Hatfield which, were taken up again by several other Canadian premiers with slight differences of course. I would like to take this opportunity to deal with part of the motion now under consideration in which the hon. member for Halifax is asking the government to renew its commitment to reduce regional disparities. I would like once again to quote from the press release at the end of the conference which is rather explicit on regional disparities, and I quote:
First ministers strongly affirmed the importance of reducing regional disparities and the continuing need for review and expansion of programs for regional development, based on the longer-run economic development potential and transportation requirements of each province and region.
It was also agreed that we should continue to be the major federal agency for these purposes. So definitely we have a commitment here by both levels of government to carry on our joint efforts in reducing regional disoarities.


Mr. Speaker, I am going to spend a few moments dealing with the Atlantic region which presents enough reasons to concern my department. There are enough on going projects to say a few words about them. When this department was established, we have worked in terms of designated and specially designated areas. It was an approach which at the time was in the line of thoughts of the hon. member for Halifax who recognized the potential and the existence of some centers and poles of growth. Both levels of governments identified some poles of growth and established a program of expansion to create in those places a situation which would stimulate the expansion of businesses. We have witnessed the establishment of such centres in each one of the maritime provinces as well as in Quebec, in the prairie provinces, in Ontario and even in British Columbia.
As the hon. member has pointed out, after a few years this approach has proved to be valuable but it also had weaknesses, as a result of which the efforts of the federal and provincial governments were concentrated in very specific areas within the provinces. The hon. member-and I commend him for his position-has recognized that it was always hard to be selective in that kind of action, that while we recognized the growth potential of some regions, we denied such recognition to other areas of those same provinces.
After spending tens of millions of dollars in these expansion centers over a period of three or four years, we finally realized that by doing so-something the Economic Council of Canada has recognized for that matter-we had in fact contributed to widening the income gap between expansion center residents and people in other areas of these provinces. This had become evident, for instance, in New Brunswick, Nova Scotia and indeed in Newfoundland: in St. John's where our expansion center was located, the incomes of the local residents increased much more rapidly than elsewhere in the province, therefore we would constantly receive a great many representations for the implementation of similar programs within these regions and sub-regions. While continuing to provide assistance to the expansion centers which we had identified, we had the opportunity, through the General Development Agreements and subagreements we had with the provinces, to open new areas for development ir. these subregions.
When the hon. member suggests that we should take a more comprehensive approach and have a master plan for all the Maritimes excluding Newfoundland to which he recognizes a somewhat different status, I fully agree with him in principle. One wonders how it would be done while respecting, of course, the provinces' will and authority as well as the potential and the projects that may be carried out. We thought it could be done by stages. The GDA entered into with each one of the provinces is one step which brings us closer, of course to a consensus among the Atlantic authorities on the need for shared costs programs.
The Council of Maritimes Premiers is helped financially by the Department of Regional Economic Expansion. The department also supports many projects which are jointly decided
February 16, 1978

upon by the three Atlantic premiers. I believe it is a good start in the right direction. The hon. member has pointed out some difficulties. There has been agreement on some projects we have carried out together, but then there was some disagreement. It is not easy, and the hon. member quite agreed.
Now, to come back to that new framework, known as the general development agreement and subagreements, 1 feel that we have there a new approach for planning, analysing, identifying and coordinating our work which is by far superior to what we had before. It may not be perfect, as I am the first to admit but it will provide us with an opportunity for better co-ordination between both federal levels of government and later on, various departments.
When I took this portfolio over two years ago, we had just a few subagreements in operation. The House may be interested to know that since the model agreement for development has been signed, we have negotiated and signed, with the provinces of Canada, 78 agreements which were amended in 80 instances. Thus, we have been practically negotiating new agreements all the time or amending existing ones. That process may seem cumbersome and slow, but it is one of joint assessment studies.
It is a planning process, one through which the efforts of several federal departments are co-ordinated with a view to maximizing the impact of federal interventions in various regions through the subagreements I have mentioned. As recently as last week, I signed an agreement with the province of Alberta; we travelled up north in that province, to Fort Vermilion, close to the 60th parallel, and met with officials of that community which, for practical purposes is in a sense the capital of the area where the agreement will be implemented. Two of my colleagues joined me in signing that agreement. And together with the government of Alberta we will be able to deal with problems in the northern part of that province, problems affecting small groups of people, whether they are natives of the area, Indians, Metis or white people. This is a co-ordinated effort. But in three Atlantic provinces as a whole-because Prince Edward Island must always be excluded as it has a very special agreement-we now have 38 agreements that have been signed and already amended 55 times for very substantial amounts touching practically every sector of the economy.
In his last remarks the hon. member asked why, when there is an economic recession, the Atlantic provinces and eastern Quebec-a good part of Quebec-are always more rapidly and severely affected, and when an upturn occurs only after central Canada has regained strength do the Atlantic regions and Quebec start feeling the beneficial effects. This is a matter that other levels of government neglected and with which we are concerned.
What conditions could be achieved in those provinces so that when we have a recession it would affect the Atlantic region less or at least no more than the other parts of this country? I do not think that any of them are being treated more favour-
Regional Disparities
ably than the others. But what we would like to try and do is find out how we could develop the economic industrial structure in the Atlantic provinces, as the hon. member pointed out, so that when there are hard times in the international context the same area will not always be the one to be affected.
It is difficult to give an answer to that. We think that by improving various forms of infrastructures-and when my colleague the Secretary of State for External Affairs (Mr. Jamieson) referred earlier to the statement he made, of course the first years were not a success from an industrial standpoint. A few gains were recorded. In the case of his province, Newfoundland, our greatest efforts were designed to develop the infrastructure and help the province to manage more efficiently its resources: forestry, the mining sector, energy and particularly hydroelectricity, through existing agreements, and there is quite an impressive list of 13 agreements that have been amended 34 times in the case of Newfoundland, as we want that flexibility to adapt our programs to the opportunities identified by the province itself. We want the province of Newfoundland to develop its potential, and this is also true of every province.
It was recognized that if the economy of Newfoundland was to be strengthened so as to be able to weather bad times, its base should be reinforced. In fact, it had a poor highway system and in many places an inadequate school system, and in some municipalities there was no infrastructure at all,
I think we had many reasons to take some action designed to reinforce the position of those provinces. The economic deterioration of the Atlantic provinces is a trend that developed over a period of at least 50 years or even 100 years. It is obvious that we shall have to develop a long-term strategy to remedy the situation. It will require a sustained and significant effort. And then, of course, we may not agree on the level of funding and financial commitment by the federal government to help Atlantic provinces develop their economies and over come their economic short comings.
I will not deal in depth with the case of Prince Edward Island as my colleague, the hon. Minister of Veterans Affairs (Mr. MacDonald) will have an opportunity to raise that issue and I assume that as a representative of Prince Edward Island, he will be willing to speak about his own province. I will therefore limit my remarks to the three other provinces.
A study of the programs now in place in those three other provinces, namely Newfoundland, Nova Scotia, New Brunswick, shows that we are now working to develop their forest resources. We have set up procedures to carry out inventories, analyses and careful identification of these resources, and to build access roads and carry out a reforestation program.
Finally, we have helped establish what has been commonly referred to as forest resources management in those three provinces. It did not exist previously or at least if it did, it was very fragmentary. This is an extremely important resource for those provinces and I think we had to tackle these problems and try to develop their potentials.

February 16, 1978
Regional Disparities
In other provinces, more particularly in New Brunswick and Newfoundland, we noted that the road ways were run down. In Nova Scotia we conducted three or four major studies on that issue. We found that the situation in Newfoundland is particularly serious. Over the past five years in particular, we kept pouring money in to improve the road infrastructures in that province and provide means for the development and transportation of those resources. This required large amounts of money.
Mr. Speaker, I could mention several other areas. Tourism is a resource that we are now developing after identifying several sectors. In the province of New Brunswick, for instance, 15 existing agreements have been amended 28 times. This shows the flexibility of our approach. We want to be able to plan with the province. Our aim, perhaps on the rather long term, is to achieve a comprehensive planning and recognize the specific nature and advantages of each province.
It is very important to capitalize on the real advantages that exist in these provinces since it may be dangerous to establish industries there which have no affinity with the area. We have tried this approach and it has failed. We have had certain failures, but we have also had some success. There is, for instance, the case of the Michelin company in Nova Scotia. This is an obvious example of a major intervention on the part of the government which has been and still is completely successful. However, there have been other interventions which were not as successful, and we recognize this.
We have the honesty to admit making mistakes occasionally, we recognize that situations have changed. We are not the only ones to have made mistakes, the province too and the private interests which suggested these projects, invested in them and also suffered major losses. It is therefore through the joint efforts of both levels of government, the private sector and the people in the area that we shall be able to gradually correct the real weaknesses of the economic structure of the Atlantic provinces. At first, we must depend on the resources, we must of course depend on the people and we must also consider future possibilities. In view of the 200-mile limit, fisheries have a fantastic potential, but we must not go too fast because we have things to do and we must do them by stages.
Because of its geographical position, Newfoundland is the province which has direct access to this resource. We are also aware of this potential, and my colleague, the Minister of Fisheries (Mr. LeBlanc) is also well aware of this potential, of certain difficulties, of certain prerequisites for an effective management of this resource, both in the short and in the long term, because it requires substantial investments on the part of the governments and the private sector.
Mr. Speaker, we could dwell a long time on what the department has done. I shall not mention any amount of money because that would be the easy way out. The statistics are available to everyone, and I shall not refer to them because I think there is something much more fundamental in the concern we should have today, namely how to co-ordinate our

efforts to be able to develop the economy of the Atlantic provinces.
I see the hon. member from Cape Breton. He will take the floor later. Of course, he will refer to the problems of the province of Nova Scotia, and to those of Cape Breton in particular. He knows my concerns very well. He is very well aware of the objectives we are trying to pursue and to fulfill at the present time. He knows very well that in the last few months we made certain decisions. We helped SYSCO to modernize. We see results. We hope that some of the things indicated to us will be confirmed and we can reasonably have some hope in that respect.
As to the energy potential which coal offers to the province of Nova Scotia, which depended so much on oil for its energy, this is obviously a fantastic asset, but we have to act according to our possibilities. Studies are being carried out and we hope they will confirm the possibility of developing a new mine sooner or later. We have been told that the reserves were substantial but a number of aspects regarding the ore contents and characteristics are still to be determined. This will be done soon but we can already assume that in the next years important investments will be made in the energy field of the Atlantic provinces because they have potential resources which will bring along, not only on a short term basis but also on a long term basis, a prosperity which has been absent for too long, although it was there unexploited in our soil, but absent in the way that it did not bring any additional wealth to maritime residents and communities.
Furthermore, the conference indicated that very soon we intended to tackle two or three projects. Several plans have already been publicized and the government has been blamed for not presenting concrete plans or proposals to the conference. We wanted all premiers attending the conference to co-operate, to have a say in the decision taking process and to identify with us the potentialities of each province. We have reached our objectives and I refer to the press release, although it gives just a part of our future decisions which will be considered by both levels of government during the next months on a number of items now under study as regards our responsibilities, on the federal side, and also the joint responsibilities of both levels of government.
I see that time is flying by, Mr. Speaker, and that you will probably ask me shortly to resume my seat. However, I would like to assure hon. members of one thing, namely that I am still pursuing the research with my officials and that I am consulting outside experts. The hon. member for Halifax referred to the Economic Council of Canada and to its report Living Together which I have read, believe me. I have discussed it. I agree with parts of it, I am not quite convinced about others but I do not necessarily reject them. I agree with some criticisms which were made, or with some positive suggestions to the effect that we should develop new tools or new means of intervention besides those which are available to DREE. Obviously we have not used up all the means of intervention, and I hope that during the next months or weeks we will have the opportunity to see new methods added to the
February 16, 1978

arsenal of tools we now have to fight disparities. We have seen a regionalization of unemployment insurance benefits, as well as a regionalization of investment credits.
The unemployment tax credit has been regionalized. This did not come by accident, it resulted from analyses and recommendations from my department as well as discussions with my colleagues so that gradually we draft our legislation on line with the plans of the Department of Finance. I believe we succeeded in breaching the wall. The principle is that Fiscal policies must pay special attention to the regions. I agree completely with the hon. member for Halifax when he said we have yet to use the fiscal instrument to its full extent. I considered many suggestions which had been put forward. I have a few ideas which I have discussed and which I continue to advocate. I hope they will be accepted, maybe not completely but in part, but they all convey recognition of a need for intervention through a national policy on a regional basis.
That is why the Prime Minister wanted DREE to participate in all those sectorial conferences in order to take into account that regional aspect in all sectorial policies. I was quite happy because my role in the federal government must be to ensure that all my colleagues in all departments are aware of the regional impact of their policy. Maybe we made some mistakes in the past and we are probably still making some. Maybe some decisions do not recognize enough that regional need but may I say that in our department, there are clear-


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the hon. minister but his allotted time has expired. He may continue with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Marcel Lessard: Thank you, Mr. Speaker, I will not abuse the House's courtesy. Since I have taken all this time to speak of the Atlantic provinces, I would now like to say a few words about Quebec where serious problems are also known to exist. There are also a number of agreements in force in Quebec, nine which have been amended 17 times. They are significant and their content is more substantial than their number indicates. Sometimes I hear criticisms, as I did this week from Quebec authorities, that not enough money is being spent in Quebec on a per capita basis, and it is a fact our spending per capita is not very high in Quebec, despite what is said in certain quarters. In actual dollars, however, more money is being spent in Quebec than in other provinces. But it must be realized that in Quebec the population is very large, relatively speaking. Nevertheless the essential factor to look at is the kind of projects we are involved in.
In that province as elsewhere, we are involved in resources. Mr. Berube, the Minister of Forests who is responsible for resources, forests in particular, was complaining Wednesday morning of a lack of support. I do not believe he is absolutely
Regional Disparities
right because two agreements were signed, dealing precisely with forests. Substantial amounts have been appropriated, more than $80 million to help develop Quebec's forests. There are other substantial amounts. More than $100 million have also been appropriated for highway upgrading. We have funds earmarked for the promotion of large industries. Recently we signed an agreement for the development of industrial infrastructures for which we will be paying $46 million over and above the $36 million already invested.
We have stepped in in a rather vigorous way to help Quebec's economy, and I cannot let go unchallenged suggestions that DREE does not contribute its full share. Maybe more can be done. We will try to allocate more funds for specific projects, and I hope that during the coming weeks, the coming months, I hope to be able to get involved in specific problems and still do more in Quebec, because I recognize that an 11 per cent rate unemployment is quite intolerable. But we are prepared to do all we can provided we get the co-operation of the province of Quebec which is extremely important. I would like to point out that if Quebec would co-operate to the same extent as the other provinces, things would go much more smoothly. Ultimatums are not always the right approach.


The Acting Speaker (Mr. Turner):: Order, please, the hon. member for Champlain (Mr. Matte) rises on a point of order.


Mr. Boulanger:: The separatist is rising.


Mr. Matte:: Mr. Speaker, would the minister answer a question? He says that there is a lack of co-operation between the Quebec government and the federal government as regards the funds available in his department. I remember very well that on November 15, 1976, the minister stated that he would be cautious when the time came to negotiate the investment of his department's money in Quebec. Consequently, is the minister himself not responsible for creating the climate he mentioned this afternoon?


Prosper Boulanger: You are undermining the creditiste party. Join the PQ.


The Acting Speaker (Mr. Turner):: Order please. I asked the unanimous consent of the House for extended time for the minister. Therefore, if the minister is ready to answer the question, I will accept it.


Marcel Lessard: On this particular point, I could very well answer. If the hon. member examines the agreements I have signed since November 16, 1976, he will see that the moneys appropriated for Quebec projects are substantially higher than those allocated to the previous government, which prompted the Quebec minister in charge of the negotiations to brag that he had squeezed more money out of the federal government, out of DREE, than the previous government. It is just the opposite of what the hon. member has just stated.

February 16, 1978
Regional Disparities


René Matte: The minister just said that it didn't work; it proves that it works!


Marcel Lessard: With regard to some actual proposals that are now under study and about which there have been complaints of delays, as I have said before, the Quebec government lays down conditions that are unacceptable to my department; what I do not accept from other provinces, I cannot accept from Quebec. These conditions are unacceptable for a very important reason, because the legislation does not allow me to accept them. This creates a major problem, as the hon. member can realize.
In any case, Mr. Speaker, I want to conclude by saying that as far as Quebec is concerned, we have come forward with infrastructures as part of our ongoing auxiliary agreements which, for the federal government, now represent commitments amounting to well over $1,200 million. Some of these commitments will be spread out over the next few years. I will now make reference to industrial assistance, and I insist on dealing with that point because I know that for some of our colleagues, that aspect is more actual, more visible, especially since, as far as Quebec is concerned, that amount is proportionately larger compared to other provinces.
Every year, Quebec companies request assistance under the act providing for assistance to industries. Since Quebec has a greater number of industries, more applications inevitably are received from that province, and because of that we have to provide positive answers to a larger number of applications and, consequently, we spend more money there. It is thus normal that it be so, but if we look at the total commitments of the DREE in Quebec, I do not feel that hon. members from other parts of Canada should have any reason to say that the DREE is investing all of its money in Quebec. It is not true. We strive to balance things out. I think that we are trying to give a positive answer to all sensible applications we receive from all parts of Canada.
I should also like to conclude by saying that, last June, we designated Montreal as a special zone, effective on July 1. There again, people suggested that this system was an exercise in futility, that it did not yield the expected results. I just want to give you the figures, for I think they are significant. Since that program was implemented on February 9, we received 266 applications from private enterprises requesting assistance to expand, update or simply go into business. Of the total number of applications, decisions were made in 103 cases. Sixty-eight offers have already been forwarded to different firms. About 40 of them filed a positive answer, and the fact that the others have 90 days to reply to our proposal may account for certain delays. But everything is doing fine now, and if all those projects were to be carried out, 65 of those proposals, for instance, would require total investments of up to $50 million which would create 1,800 jobs, an end result achieved with the assistance of our total commitments of $9,500,000.
Many projects are now under consideration. In our files in Montreal, there are projects which would cost approximately

$700 million if they were all implemented. Of course, companies submit proposals which are studied, some are accepted, others are not, and in some cases they are withdrawn by the companies themselves. The complexity of this situation must be realized. I feel optimistic about the future. We will keep on promoting Quebec's economic development, we will keep on responding positively in most cases to the Quebec government's proposals as far as possible, and I am sure that in the next months, the next years, if only the Quebec government will co-operate, we will manage to lower the unemployment rate in Quebec, but it is not a federal responsibility only. I think that to create a climate favourable to investment, is also a prime responsibility of the provincial government in office. I believe that on that score the Quebec government has not always done its best in the last few months, it has not always made the appropriate statements, and judging by some statements made by the premier himself, it is certainly not the way to attract industrial investments. But we still hope there will be some, there will certainly be some investments, and we will keep on promoting the economic development of the province of Quebec, as well as the Atlantic provinces, the western provinces, the prairie provinces and British Columbia.


Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, first of all I want to congratulate the hon. member for Halifax (Mr. Stanfield) for introducing this motion today. Both the hon. member for Halifax and the minister in charge of DREE made reference to efforts in the past.
We had the hon. member for Halifax making the statement that, in his opinion, the economy of the Atlantic region is relatively weaker in real terms than it was ten years ago. The minister, in an apparent attempt to meet this criticism, quoted from a statement made by the Conservative premier of New Brunswick, and he used statistics which I do not think proved his case at all. He started from a base of 1961 to 1974 and used percentage figures. That proves nothing except that he started from a lower base with his criteria, especially the criteria of fixed investment in the Atlantic region.
Then the minister made the remarkable statement that Mr. Hatfield said that if it was not for the general down-turn in the business cycle the Atlantic region would be better off. Any high school can tell him that. But this has been a traditional policy and part and parcel of the private capital market system under which we all operate. Even though it is a mixed one today because of government intervention, which was made necessary because of the decline of that system at the time of the depression in the 1930s, we have a situation in which this imbalance is built into the scheme of things. In a federal state it gives protection to the private sector in the centre of the country. When aggregate demands and the total economy keeps going down until we have a national recession, the overflow in terms of the outer region, and especially the Atlantic region, makes us that much worse off.
In that debate I would have to side strongly with the hon. member for Halifax on theoretical, empirical, and historical
February 16, 1578

grounds. The problem is that there is a recession in Canada lasting for four years. Conditions are unquestionably, in my opinion, much worse in the Atlantic procinces, than they were ten years ago, as the member for Halifax states. We know, as the minister pointed out, that the main emphasis of DREE in the Atlantic region was to support what was called a growth centre theory of development.
There are acceptable theories of development ranging from what is called an export base or an economic based theory by which exports from your area should exceed imports. By looking at a nation as a region, then we as a nation have followed this in our line of development. Most of our development has been in staple products to the neglect of a manufacturing sector that could be viable and competitive.
At one time we put too much stress on the staple primary products and at the same time over-protected the secondary manufacturing sector. The secondary manufacturing sector now cannot stand the gaff of international competition. Everyone is surprised that there is low productivity. They try to blame it on wage rates and so on. The biggest cause of the lack of productivity in this country is the built-in protection that is constantly there as a hidden subsidy to central Canada manufacturers. It's called a tariff. Therefore, it is not surprising that the Atlantic region is badly off.
To be fair to DREE, they did move into the growth areas which are the centres of government, namely Halifax in Nova Scotia, St. John's in Newfoundland, Charlottetown in Prince Edward Island and Fredericton in New Brunswick, with an overflow into Saint John which is coupled with the growth of the port in that metropolitan area. The result is very serious for outlying areas.
Recently DREE issued a document on one-industry towns and similar types of areas. It gives due recognition to these areas, but it is only a first step.
1 wish to underline the disparity noted by the hon. member for Halifax, and agreed to by the minister, between growth areas in the Atlantic region and the outlying areas. For example, in 1971, the disparity between the Halifax-Dartmouth area and the Canadian average for Canada in terms of per capita income for that area of Nova Scotia was 75 per cent of the national average. That gap has been rapidly closing and it is now closer to 85 or 90 per cent. In Cape Breton, where Sydney is the largest city, the rate was 56 per cent. In Glace Bay it was 48 per cent, and in New Waterford 46 per cent. That is according to 1971 census statistics, the only ones available. This type of information was not gathered during the 1976 census. The trend is there.
If we are going to close the gap, the allocation of human and financial resources will have to be diverted to these areas. They will have to be diverted to northern New Brunswick, the outlying areas of Newfoundland and the outlying areas of Nova Scotia. As the minister noted, Prince Edward Island is a special case because of the small geographic area and the compactness of the product markets, and the labour markets.
Regional Disparities
I do not want to criticize DREE unduly. However, it is long past time that they zeroed in on these tough areas rather than tackling the relatively easy areas in which development would occur naturally under the growth of government at the provincial level. Now is the time, I repeat, to use the financial and human resources to develop these outlying areas. Opportunities within those regions must be identified so that solid development can take place. There must be government encouragement in the way of incentives, grants and so on. It can be done.
We can look to the example of Scotland, and of parts of England and Wales. As the minister noted, this would be very difficult as well as expensive. Over a long period of time they developed areas that had been considered hopeless from the point of view of being developed. The Labour government started this regional development policy. It has not been a total success, but it has been a major effort toward closing the gaps in employment and income in that nation.
A long term look must be taken at the primary resources in the Atlantic region. As the minister stated, there is a 200-mile fishing zone. Most of us hope that consideration will soon be given to a 50-mile zone for inshore fishing. This should be done after the stocks have been built up.
We must not make the mistakes that have been made in the past. This is a prime case of a region being neglected. There has been a lack of policy by the federal and provincial governments with regard to a resource that was once looked down upon as something that was only good enough for the Newfies, the humble cod. We now know this fishery has immense potential.
Oceanographic possibilities in the Atlantic region have to some extent been recognized by the establishment of the Bedford Institute of Technology in Halifax. It is part and parcel of the whole picture. However, we have to develop more species of fish. Once the stocks are again running true to nature, we cannot just sit back without proper management and care of that resource. That would be neglecting an important part of the national economy, the Atlantic region. It has been neglected in the past as a result of failures of governments.
I can understand the Minister of Transport (Mr. Lang) finding it difficult to understand exactly what the maritime premiers want. Although the experts are not agreed on this, there seems to be general agreement that we are entering into an era of oil shortages, if not in the physical sense then in the sense that it will be extremely costly. Therefore we should not allocate too much of our natural resources to building huge airports and airplanes.
When one considers the extent to which the operating costs of Air Canada have increased in the past few years due to increases in the price of fuel alone, one wonders how much planning has really gone into the future of transportation-I have in mind the movement of goods and people from 1990 on, well into the next century. We ought to be putting a far

February 16, 1978
Regional Disparities
greater proportion of our resources into the development of railroads. We ought to be improving the rail beds and bringing up to date the equipment used in railway maintenance and improvement. This will all be necessary from a very practical point of view.
Alberta coal will be desperately needed in Central Canada ten or more years from now. Coal both from the east and the west will be urgently required by the Ontario steel plants and utilities. At the moment they feel secure because they have captive mines in the United States. But that coal will sooner or later run out and our own supplies are at the extremities of the country, on the west coast and on the east coast. The steel industry and the utilities, I repeat, will need that coal, so the rail lines through central Canada will need to be rebuilt. They must be rebuilt from Cape Breton Island through to Montreal and Toronto. This would do a lot, in the process, to help the hard-pressed steel industry in Nova Scotia.
The minister mentioned the recent help given to SYSCO. I was bitterly disappointed at the government's failure to take over that Sydney steel plant when it set up the Cape Breton Development Corporation after the private profit corporation, Hawker Siddeley, walked out on us. Enough studies have now been completed to justify the formation of a special body which would ask the question seriously: is there any hope of building a billion dollar industry down there which would have such a spin-off as to effect not only Cape Breton Island but Nova Scotia and New Brunswick, well into the next century? Nobody is studying such a proposition seriously. The government is content to provide dribs of assistance here and there, guaranteed loans, such as the $70 million to the Sydney steel plant and so on, is an effort to patch things up while the provincial government lumbers along running the plant inefficiently and going into the hole.
That isn't the way to use the taxpayers' money or the resources of this nation. It is not a question of ideology. The fact is, private enterprise has gone in there, communities were built up, and an infrastructure provided. Workers, along with their families, moved to these communities in large numbers. What will be our answer to the threat to this social pattern? When will we be prepared to ask ourselves the question: is it or is it not economically possible under government auspices, with proper management, to build an international, competitive steel plant in the Atlantic region? When will we let the people know, once and for all, what is in store? We cannot act simply as politicians all the time thinking of the short run. That is the lesson of the first ministers' conference. The purposes of this country continue beyond four years. Many of the problems which face us today are those from decisions made by other groups of politicians in the past and taken with only short term advantage in mind.


The Acting Speaker (Mr. Ethier):: Order, please. 1 regret to interrupt the hon. member but his allotted time has expired. He may continue only by unanimous consent.


Some hon. Members:: Agreed.
(Mr. Hogan.]


The Acting Speaker (Mr. Ethier):: Perhaps I might take this opportunity to announce the proceedings on the adjournment motion tonight.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Moose Jaw (Mr. Neil)- Grain-Possibility elevator at Moose Jaw able to service Churchill-Request for study; the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall)-Social Security- Denial of pensions to widows under age 65-Government action; the hon. member for Winnipeg North Centre (Mr. Knowles)-Social Security-Suggested provision of pensions for persons in need between ages 60 and 65.


MESSAGE FROM THE SENATE
The Acting Speaker (Mr. Ethier):: I have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed the following bills to which the concurrence of this House is desired:
Bill No. S-5-an act to provide an exception from the public general law relating to marriage in the case of James Richard Borden and Judy Ann Borden. Bill No. S-6-an act to provide an exception from the public general law relating to marriage in the case of Eugene Waddell and Marguerite Benoit.
I also have the honour to inform the House that a message has been received from the Senate informing this House that the Senate has passed Bill S-4, an act to implement the International Convention for Safe Containers, to which the concurrence of this House is desired.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Stanfield:
February 16, 1978
[Stage Direction]
That, in the opinion of this House, the government must now renew its commitment to reduce regional disparities by developing and implementing without further delay comprehensive development strategies for eastern Quebec and the Atlantic provinces including such areas as transportation, energy, primary resources, industrial and service sector expansion.
Andrew Hogan: I thank hon. members for allowing me an extra few minutes. A great deal has already been said on the subject of energy, and I am sure much more will be said by hon. members like the hon. member for Egmont (Mr. MacDonald) with regard to energy development in the Atlantic region based on Fundy tides and the increasing use of our coal reserves both in the east and in Alberta.
The minister did mention coal. The potential for this form of energy in Nova Scotia was written off in the short run some years ago. But that was before the Arabs came out of their tents and formed the OPEC monopoly. The situation now is that a great deal of money will have to be spent on the development of our coal resources since there are literally billions of tons of coal in this country which can either be burned or put to other commercial uses. The primary need, in the east, is for $ 16 million to be spent in Glace Bay refurbishing a coal mine, No. 26, which produces coal of the highest grade with only a very low sulphur content. Indeed, conditions are right at the present time for the reopening of two further collieries. Even though we still need DREE, I would make the following suggestions, bearing in mind the constraints we face in the need to get elected or re-elected every few years and the fact that governments cannot hope to achieve much success by short term solutions which are often not solutions at all.
In the long run, a new institution is needed to probe deeply into the actual and potential resource base of the Atlantic region. I am referring to the physical, primary resource base, excluding the manufacturing and service sectors. As I have mentioned before, some of this is ongoing at the present time in specialized agencies such as the Oceanographic Institute at Bedford in Halifax.
It would be worth while to consider having a body composed of permanent members of the Science Council of Canada, representatives of the Secretariat of Maritime Premiers, a representative of the Canadian Manufacturers' Association and the Maritimes Chambers of Commerce. These members could be appointed on a biannual or triannual basis. Also there should be representatives from labour federations of Atlantic Canada, as well as one or two members from the Atlantic Provinces Economic Council. Also there should be one or two members from the Atlantic universities as such. It would be strictly a non-political body. Both the federal and provincial governments would provide funds. Its major function would be to examine in depth long term technical and economic feasibilities for maritimes primary resource development. Its secondary function would be to attempt to improve the coordination of present existing long range federal and provincial policies for development of the Atlantic region. I propose that such an institution be called "The Atlantic Provinces Research
Regional Disparities
and Study Institute for Long Term Development of Atlantic Canada's Primary Resources".
I make that suggestion because it is in that direction that our future prosperity lies in the Atlantic region, despite the fact the other sectors have a relatively important part to play in our future.


Some hon. Members:: Hear, hear!


Joseph Adrien Henri Lambert: Mr. Speaker, I would like to congratulate the hon. member for Halifax (Mr. Stanfield) for the very interesting motion which he has moved. It deals with actual present-day problems. I am very much concerned about the problems in the Atlantic provinces, as they are similar to the ones we have on the south shore. This is the reason why I want to congratulate the hon. member for the thrust of his motion in dealing with these specific problems.
The population of the constituency of Bellechasse, which I have the honour to represent in this House, represents 1.37 per cent of the overall population of Quebec. And yet, the manufacturing sector accounts for only .75 per cent of the whole of Quebec.
Mr. Speaker, this question of regional disparities has to do with the inadequacy of industrial development which does not allow people to find jobs or earn a normal living in their own province. On the other hand, while 1.8 per cent of Quebec's factories are located in the constituency of Bellechasse, only 0.8 per cent of the factory workers are employed there.
The fact that most industries, in this area, are not big plants but small and medium-sized companies accounts for this disparity. Industries prefer being located closer to our larger cities and to the large North American markets. They could hardly be blamed because in the present state of things, those industries seek primarily to minimize their costs and we know that freight rates would only add to the manufacturing cost of their products and make them less competitive.
A logical solution to this problem would be to grant a special transport subsidy to companies which would be ready to move to outlying areas, far from our major centres. That would be one way of eliminating one of the factors contributing to the concentration of industries in already well-developed areas.
Earlier I heard the Minister of Regional Economic Expansion (Mr. Lessard) mention the many benefits that have already been made available. I agree that this led to improvements but the evidence shows that it was not enough. I thank him for what has already been done but I ask him to do even more. If we have intensive development we will be able to maintain in our areas at least the level of population we now have and this will make it easier to lighten the burden of public expenditures for those who must live in those areas. The more people we have, the fairer the distribution.
In a given region it is important and logical to look for industries which have historically been related to it but which have experienced difficult times over the years. An example

February 16, 1978
Regional Disparities
that comes to mind is the Davie Ship Building yards in Lauzon which have been a large employer in my area for a long time; even if it is in Lauzon many workers from the ridings of Bellechasse and Montmagny earn their living there.
In think an expansion of the yard in Lauzon would provide many jobs so the people in that area would be able to get organized, be more economically active and have less need to fall back on governments to remain afloat. Last week I heard the motion of the hon. member for Levis (Mr. Guay) urging the government to give very special attention to the possibility of establishing a Canadian merchant marine. It is not the first time this matter is being raised in the House.
I too had an opportunity to introduce a motion along those lines. I think the last time I introduced such a motion was last Monday when I urged the House to set up a special committee to consider the advantages of using the millions of dollars we are now paying in the form of subsidies for building ships, very often to foreign businesses. This has an advantage. The government has done its best with this policy to protect the level of employment, and in 1976-77, the government paid $65 million in grants to 45 companies. $65 million is quite a lot of money. If we tried to use part of this sum to develop a merchant marine, we would also create employment, but at the same time we would be giving Canada a very important economic tool.
I remember reading a few years ago that at a certain time Canada was the third largest owner of merchant ships in the world. I wonder why we did not continue to support our merchant marine which made us dependent upon foreign companies for our coastal trade. This is certainly a profitable industry since I have never known one of those foreign companies to go bankrupt. They buy ships, they rebuild them, make them seaworthy and then they have a profitable transportation trade.
With regard to the mode of transportation to which I alluded earlier, I have already suggested in the House that a study be made on the transportation of goods by truck or rail between the most easterly point of the country and Montreal to find out what are the actual difficulties and why companies are not able to continue their operations let alone to expand. Under Bill C-ll tax benefits of lxh per cent are provided for companies in the maritimes and the Gaspe area, but the South Shore area, which also needs this assistance was forgotten. The IVi per cent benefit was increased to 10 per cent, but still, all the South Shore companies were forgotten even though they greatly need this assistance. I once again bring this matter to the attention of the Minister of Regional Economic Expansion (Mr. Lessard) so that he may make representations to his colleague, the Minister of Finance (Mr. Chretien), who could perhaps amend Bill C-ll to allow these companies to take advantage of these tax benefits.
Mr. Speaker, a while ago I heard the minister quote the agreements made with the provinces, including the province of Quebec, and the benefits involved. I am very happy about this

and I would like these means of communication between the various levels of governments to continue and to improve. However, Mr. Speaker, since we have a very high level of unemployment in our area, I believe that the time has come to extend these agreements or to draw up a special agreement for the South Shore area. Yesterday, I asked the Minister of Transport (Mr. Lang) what progress had been made in the negotiations concerning the transfer of certain communication wharves between Ottawa and Quebec. He was somewhat reluctant to give me an answer. Today, the situation has improved and I have been assured that exchanges are going on and that results will soon be achieved. There again, if there was an agreement to help speed up the building of communication wharves and upgrade them, jobs could be created, while capital projects were being carried out and a problem solved. In Montmagny, in the cove, and I am sure the Minister of Regional Economic Expansion knows what I am talking about, there is an tremendous location to build a marina. People have wanted a marina there for years, and nature has provided us with all those opportunities.
Therefore I hope that with Bill C-2 introduced by the Minister of Fisheries and the Environment (Mr. LeBlanc), it would be possible to achieve that objective. But as the Minister of Regional Economic Expansion put it so well a moment ago, it often takes the co-operation of two, three or four departments to succeed in achieving an objective. So, while building that marina, it would also be necessary to provide for new highway programs in order to allow easier access to it and to develop the tourist industry, which would be of great benefit not only to the city of Montmagny but also to the whole area.
There is another suggestion I would like to make. Bellechasse is a very beautiful riding. When you travel south to the U.S. border, you see beautiful mountains there and it would be possible to set up a flourishing tourist industry in that area. Farming cannot be further developed and I do not believe we should leave that immense territory unused. Today I received a letter once again from a local resident who asked me if there was a program of federal assistance to help entrepreneurs put up businesses and breed fish by building small dams across the rivers. This would not only create employment directly and allow local people to get involved but it would mean producing goods and selling them. That is the way to create industries and jobs. Of course I had to answer that such a program did not exist at the moment but there is nothing stopping us from implementing one in the future.
So, I think it would be possible to develop that kind of program in that area which would benefit economically, financially and socially. I also wish to draw the minister's attention to the crucial problem of the textile industry. There are textile plants in our area. Again this week I received a brief from three textile companies asking me to press for more specific protection measures. This brief mentioned not the Kennedy Round but the Tokyo Round. I was also sent a newspaper article entitled: "Investments in the United States, Joblessness in Canada." This report is supported by figures showing that this is absolutely true. We should negotiate better trading
February 16, 1978

terms and conditions to protect those industries which are no more inefficient than the others. They have all the facilities to produce. They have good equipment, modern looms and the quality of their product is excellent. Elowever, they have difficulty to make ends meet. But they manage to survive. Salaries are not high but adequate. Of course, it might be cheaper to live on the other side of the border, I do not know, I have never lived there but subsidized transportation and tax cuts would help them tremendously. This is why I ask that this area be included among those who will receive tax rebates; it would help enormously.
Mr. Speaker, before concluding, I would also like to quote from an article published in the February 9 issue of Le Devoir. It says: "Provinces invited to increase deficit". This was at the very centre of the federal-provincial conference that was held earlier this week: each government wants to do great things, each one is extremely willing, but none has enough revenues to meet its responsibilities. That is why the Prime Minister is reported to have said: "The provinces should increase their deficit". But our national deficit will reach the $9 billion mark this year, and this is an increase of $5 billion over last year's deficit which was of $4 billion. All these governments, both at the federal and provincial levels, are caught in a vicious cycle, to say the least. What does the future hold in store for us? We are not accumulating these enormous debts because of any war nor because of any natural catastrophe. How is it that competent and intelligent Canadian management ends up advocating such methods or solutions for Canadian financing in 1978?
Mr. Speaker, we must call a spade a spade: a $9 billion deficit is tantamount to an indebtedness imposed upon our future generations. But if we have a $9 billion deficit, we must borrow money somewhere to write it off. That is why I feel this is our big chance. We must take advantage of our economic and financial difficulties and carry out a reform of our methods of financing the public sector. Never will I relent on this issue, for I am convinced that this reform is a necessity, and as long as we do not get it done, we shall get deeper and deeper into debt. We shall be dragging down with us the provinces, the municipalities, the school boards, and also, indirectly, the Canadian taxpayers who will have to pay higher rates and higher taxes in order to pay up the interests on these debts which are increasing at a frightening pace.
As a matter of fact, the purpose of Bill C-390 which is now before the House is to increase the powers of the Bank of Canada. Which way? Precisely to prevent us from getting deeper into debt next year by another $9 billion, but how? Nobody knows. I, for one, recommend that the Bank of Canada Act be amended to make it possible for the Bank of Canada to grant long-term loans to the federal government. We would undertake to refund these loans to the Bank of Canada in the same way as we refund other loans to our other creditors, but at least, we would be owing that money to ourselves, because the Bank of Canada is ours. In this way, we
Regional Disparities
would be borrowing from our own institution moneys which we would then have to reimburse, but not at the high interest rates that we are required to pay now.


Mr. Roch La Salle (Joliette):: Mr. Speaker, I am quite happy to take part in this opposition day debate since the subject is most interesting for all Canadians and especially for those living in our own areas of the country with which we are particularly concerned. Mr. Speaker, I would like to congratulate the mover of the motion, the hon. member for Halifax (Mr. Stanfield). I am quite happy to participate in this debate because it gives me a chance to speak in this House on a subject which concerns me very much and which is of vital interest to Quebec, that is, regional disparities.
Furthermore, I am honored to echo the well thought-out statement made earlier by the former leader of my party, the hon. member for Halifax, a man who has been denouncing and fighting regional disparities throughout his career, both on the provincial and federal scene. If we had listened more to him at that time, perhaps our country would not be today in so much trouble and difficulty, because the hon. member for Halifax has been talking about discussion, cooperation and consultation for a long time.
I also wish to add a few remarks to the speech made by the Minister of Regional Economic Expansion (Mr. Lessard). He acknowledge, much to my pleasure, the objectivity of the statements and proposals made by the hon. member for Halifax. He also acknowledged some valid recommendations, ad I know that the Minister of Regional Economic Expansion is able to do this with enough objectivity. He also mentioned the federal provincial conference where a great many good intentions were shown. He spoke of the co-operation that is essential with the provinces and with Quebec, and demonstrated, of course, his good will with regard to the efforts his government is willing to make, in view of the problems we know.
I should also like to point out that his department is in fact directly involved in the interests of several ridings, of which mine that benefited from a subsidiary agreement granting it special privileges related to certain investments taking into account the type of industries that may be entitled to those subsidies. I understand, of course, that it would probably have been impossible for all types of industries to benefit from them. Recently I was very happy to learn that a $1 million agreement was signed with the province of Quebec, through which my riding will benefit from an infrastructure for an industrial park that is already quite well installed, but still needs money to attract more industry.
So, Mr. Speaker, I really do not question the good faith or good will of the minister. Before him, when the department was set up, there were times, to my mind, when it was not as well intentioned as the minister seemed to explain to us today. I am sure that because of the situation, the federal government feels compelled to do more consulting and be more understanding of the provinces.
Now, I should like to say a few words about the federal-provincial conference. The minister responsible stressed the

February 16, 1978
Regional Disparities
importance of speaking the truth, and I feel, it must be spoken in the Elouse. I say this in a positive vein. I should therefore like to invite him, particularly, and knowing that he is capable of doing so, to show more interest than ever before in the province in which I live, as many others do, and especially, not to allow himself to be influenced by some of his colleagues who, whether we like it or not, Mr. Speaker, at times have some difficulty in accepting the recommendations of the Quebec government.
The minister pointed out the dramatic situation in which the province of Quebec finds itself. He recognized, I believe, the importance of giving it a hand. I think it is the duty of the government, of his department, and like him, I have surely no hesitation in promoting a sincere co-operation and consultation and also in urging that province to keep within the limits and criteria set in the legislation. We should seriously consider the possibility of showing to the people in Quebec that the economic climate can and should be restored with the co-operation of the federal government. I am quite pleased to see that the minister has stressed that co-operation so much and I feel that he has truly shown its good faith.
Once again 1 invite him to exert his influence on some of his colleagues who may not show the same objectivity as he does or may not be able as he is to overcome sectarian opinions to take a real interest in the welfare and legitimate aspirations of the province of Quebec. I am confident that the minister will be able to fulfil the commitments he has taken today and, as a Quebecker, I hope he will do so and I am going to do my best to invite the government and the people of Quebec to show the same goodwill in order to promote the industrial development which has been so badly missed by the people of Quebec until now.
In another vein, Mr. Speaker, in the opening speech the Prime Minister delivered at the conference on Monday, he said at the very beginning that Canadians felt concerned about our present situation and, in the same breath, he added that the unemployment and inflation rates will soon be brought to an acceptable level and that the economic recovery was already well under way, that the conference was the beginning of a continuing consultation between the federal government and the provinces and that, all in all, everything was going well in the best of worlds.
Mr. Speaker, I have never seen the government so open to this type of consultation and good will. We must nevertheless ask ourselves: how is it that in the last ten years we have not felt this deep desire for co-operation and consultation with the provinces such as we have seen in the last few days. They chose to let the provinces choke, and then call up on them to make recommendations, suggestions. However, I have followed closely the federal-provincial conference where the government, echoing some well-known publicity slogans, simply asked the provinces: Now, what can we do for you? Ottawa is on your side and it's good for you. We hardly accept newspaper reports suggesting that for some premiers such a campaign

had a pre-election flavour to it. We cannot accept that this idea may have come through their minds!
Mr. Speaker, I am not saying that this conference should not have taken place, as there are rumours about forthcoming elections. Yet I think, like many others, that it should have been held a year ago. Either the government did not hold it last year because it was not aware of the dangers threatening us and of the urgent need for such a conference, which seems to indicate irresponsibility or incompetence, or the government realized that on the eve of general elections it had better get the provinces together and present them with problems that he was already aware of, and know would grow worse, because in this way, the federal government knew it could expect a more favourable response to the well intentioned proposals it had been making over these past three days.
1 nevertheless hope that the present co-operative spirit shown by the provinces will be matched by a serious effort of coordination on the part of the federal government.
Mr. Speaker, to be truthful, we must admit that it is some sort of a farce when the prime minister feels all he has to do is state that the economic recovery is already under way, which I am not so sure about. I am inclined to think that there has been a wanton abuse of words and media coverage for electoral purposes. The truth is that Canadians are concerned and have every reason to be, even though those concerns were played down at the conference. What is not true is as the present government would have us believe that the people's concern is due to the wickedness of the government's opponents and propagated by the negative remarks of the media in search of striking headlines.
The fact, Mr. Speaker, is that there are over a million unemployed in Canada and it is not the Leader of the Opposition (Mr. Clark) who is saying that, or even some premier, but Statistics Canada. It is even so much of a fact that according to impartial observers, unemployment went beyond the size of a problem to become some kind of a national disgrace. The fact is, Mr. Speaker, inflation has reached the 9 per cent level which is much higher than in the United States and one of the highest among developed countries, although controls were established in 1975. The Prime Minister (Mr. Trudeau) had laughed them off when our party advocated them during the 1974 campaign, but he later implemented them, too late however and without adequate consultation, without an overall plan arrived at with the provinces and interested sectors. Those same inadequate controls that let inflation reach its current level, are to be lifted on April 14, and we may wonder what will happen then. The fact also is that according to the Economic Council of Canada our economy, although capable of sustaining a 5 per cent annual growth, only attained half that goal last year. Forecasts by economists outside the government are to the effect that we will not do much better in 1978. The fact is, that today some 18 per cent of our producing capacity is unused; however the government is sufficiently wrapped up in its bureaucratic red tape to suggest that we should avoid too hasty a recovery for fear that it might revive inflation. The fact is also, Mr. Speaker, that last year we paid
February 16, 1978

out in unemployment insurance benefits alone more than $4 billion while during that same period we lost at least $7 billion in potential production Canadians could have put out had they had jobs. Another fact is that our Canadian dollar is faltering, our exports are declining, our balance of payments is increasing at an alarming rate, our budget deficits are getting bigger and bigger, our national debt on a per capita basis continues to increase and reliable sources throughout the world are beginning to cast doubts about the Canadian government's economic capability. In the meantime investors at home have lost confidence for at least four years, they are investing more and more abroad, consumers themselves have become diffident and purchases are on a constant decline. Such are the facts, Mr. Speaker. What concerns the Canadian people at this time is this government's economic performance. Mind you, we might as well be prepared because it is against this background that lies the shape of things to come.
Some businessmen might be impressed by such a management of the economy but I presume that those businessmen are not that impressed. As for me, I hope for something far better to serve my country and I do not want to be told that another government could not do any better. The only way to find out would be to try it, Mr. Speaker. Faced with that failure of the present administration, the Prime Minister in his opening statement before the provincial conference once again resorted to his old trick of comparing the performance of the Canadian economy with those of other countries. That prompted a few people to say that the Prime Minister wanted us to believe that everything was fine in the worst of worlds. But speaking of confidence, Mr. Speaker, it is certainly not with the performance of the present government that one can regain the confidence of Canadian voters or of members on this side of the House who have once too often heard completely erroneous forecasts and projections. And to what extent have we been misled, to what extent have they proved to be incompetent and irresponsible in making forecasts?
But for ten years, Mr. Speaker, millions of dollars have been swallowed up in all sorts of more or less worth-while plans and structures which rarely become reality, millions of dollars which could have been invested in employment producing projects.
The hon. member for Halifax said earlier that five or six years ago, if I remember well, in a tour he made across this country he warned this government of the dangers which were facing us. He said about regional disparities that we had to deal with the problem in a rational way and not with temporary solutions as this government has done. I do not question what the Minister of Regional Economic Expansion said today-what he said in the House today is entirely new and encouraging for that matter, I must admit-but I would like very much his predecessors and his government to think like him, that before they set up regional economic policy they establish in close co-operation with the provinces a national economic policy and then see how provincial and regional needs can be fitted into that policy. It is in that contact that we
Regional Disparities
advocated during the 1972 campaign the calling as soon as possible of a conference on tomorrow's priorities.
What I am recalling for the benefit of the House today, Mr. Speaker, is exactly what the hon. member for Halifax who was then the leader of the Progressive Conserative party advocated years ago, and it is exactly what this government refused to hear, with the results that we now know. At present, the government is moving on regional economic expansion, as in other areas, without co-ordination and planning. So he referred to it earlier-this is new. That gave the results we know when we saw plants receive federal subsidies to promote regional economies and those very plants closed their doors a few months later.
The problem of regional disparities is not an easy one to solve. We admit that but I suggest that this party could do a lot better and would have already brought about solutions. When we get to form the government, and the time will come, we will carry out a complete review of all those regional development and economic expansion programs, in consultation of course with provincial governments and the people in underprivileged area. We are also going to launch a massive attack on all fronts where the problems lie, the effects of which will inevitably be felt in the area of regional disparities. This coherent offensive will simultaneously deal with problems of unemployment, cost of living, economic growth, taxation and housing. Allow me to point out some of those measures and if we had been called to govern the country, we would also have created the proposed investment funds to stimulate small businesses and new jobs would already be available here and there.
We realize the incompetence and clumsiness of the federal government, because for too long it has refused to coordinate its policies; it has invested huge amounts in the economics of areas where transport is primitive and shipping costs are almost prohibitive. I think that transport is also a very important question. I would like to say that with a government which is allegedly respectful of regional economic growth, we should have a national transport policy to cope with deficiencies and disparities. In spite of all the projects and plans devised by bureaucrats in their ivory towers, up to recent times, regional disparities have remained one of the main problems in Canada. They are a major problem more specifically because they threaten the success of our confederation and at the same time, they are in a certain way a negation of the concept on which it is based. It is not necessary to be an economic expert to understand that slow growth areas are the first to feel the effects of an economic recession and the last to recover. The hon. member for Halifax has pointed out that danger quite well. As I would like to give my colleagues the opportunity to make a few comments, I wish, before concluding, that the statements made today by the Minister of Regional Economic Expansion will give way to some genuine short-term action.
This afternoon, my party leader asked the right hon. Prime Minister not exactly but approximately how many new jobs would be created under the projects or objectives which the

February 16, 1978
Northern pipeline
federal and provincial governments agreed upon yesterday. The right hon. Prime Minister refused to give him any answer. Yet, during this federal-provincial conference, he asked the Canadian public to trust the federal government, a government which has failed in practically all areas and in connection with all the objectives he has been advocating since 1968, from the just society to the control of wages and prices, the fight against inflation and unemployment. How can he ask the Canadian public to trust a government with such an extensive and diverse record of failures. We still hope nevertheless and we shall continue to demand that the consultations which the minister in charge hoped for today become a reality, and he shall then be assured of co-operation.


The Acting Speaker (Mr. Ethier):: Order, please. The hon. Parliamentary Secretary to the President of Privy Council rises on a point of order.


Yvon Pinard: Mr. Speaker, after consultation, and agreement having been reached, I ask unanimous consent of the House to move two motions.


The Acting Speaker (Mr. Ethier):: Order, please. The House has heard the request of the hon. Parliamentary Secretary to President of Privy Council (Mr. Pinard). Is it agreed?


Some hon. Members:: Agreed.



ROUTINE PROCEEDINGS


Yvon Pinard: Mr. Speaker, I move, seconded by the hon. member for Saint-Jacques (Mr. Guilbault):
That when the House adjourns on Thursday, February 23, 1978, it shall stand adjourned until Monday, February 27, 1978.
1 understand that there is unanimous consent for this motion.


The Acting Speaker (Mr. Ethier):: Order, please. Hon. members have heard the motion. Is it agreed?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. Ethier):: Agreed and so ordered.


NORTHERN PIPELINE ACT
Yvon Pinard: Mr. Speaker, I have a second motion which requires unanimous consent.


The Acting Speaker (Mr. Ethier):: Order, please. The House has heard the request of the hon. Parliamentary Secretary to President of Privy Council (Mr. Pinard). Is it agreed?


Some hon. Members:: Agreed.


Yvon Pinard: I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the members to serve on the Special Committee on a Northern Gas Pipeline be Messrs. Allard, Breau, Dawson, Douglas (Nanaimo-Cowichan-The Islands), Foster, Goodale, Lawrence, Lee, Loiselle (Chambly), Munro (Esquimalt-Saanich), Neil, Nielsen, Penner and Railton.


The Acting Speaker (Mr. Ethier):: Order, please. Again hon. members have heard the motion. Is it agreed?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
The Acting Speaker (Mr. Ethier):: Agreed and so ordered.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Stanfield:
That, in the opinion of this House, the government must now renew its commitment to reduce regional disparities by developing and implementing without further delay comprehensive development strategies for eastern Quebec transportation, energy, primary resources, industrial and service sector expansion.
Daniel Joseph MacDonald: Mr. Speaker, I am very happy to participate in this motion which has been moved by the hon. member for Halifax (Mr. Stanfield). He has had great experience both in this House and as leader of a party for many years.
I had the opportunity to attend the first ministers' conference, and it was interesting to note the support the first ministers lent to DREE, and how necessary they find that it continues. I would like to compliment my colleague the minister responsible for DREE for the effort he is putting forth. It is a worthy instrument, especially for the part of Canada where I come from. We have many needs in the Atlantic provinces. It is difficult sometimes to determine what the picture would have been like if we had not had DREE. I will spend a few moments later on discussing how the comprehensive develop-
February 16, 1978

ment plan functions in Prince Edward Island. As hon. members know, this has been a necessary plan for Prince Edward Island.
During discussions at the first ministers' conference there was some constructive criticism, which we found beneficial. There were some suggestions for changes in emphasis which might be explored. There was also overwhelming support for the basic approach and the principal program instruments of the department. The mechanism, in particular, received favourable comment as the kind of mechanism needed to ensure a co-ordinated federal-provincial approach to economic development.
This support was reflected in the official communique issued by the first ministers at the end of the conference. The two related conclusions set forth were firstly, that the first ministers strongly affirmed the importance of reducing regional disparities and the continuing need for review and expansion of programs for regional development based on the longer run economic potential and transportation requirements of each province and region. Secondly, it was agreed DREE should continue to be a major federal agency for those purposes.
In light of developments at the first ministers' conference, it is obvious that the federal and provincial governments have renewed their commitment to regional economic development. We can be assured, therefore, that part of this motion has already been dealt with in a rather impressive way.
The motion also refers to comprehensive strategies for economic development. I certainly have no objection to this reference as long as we have in mind a workable concept. The statements of strategy already imbedded in the general development agreement are based on a workable concept. They carry the support of both senior levels of government and they are subject to regular review in light of changing circumstances. Indeed, one of the important elements of the GDA system is the provision made for annual meetings of the responsible federal and provincial ministers, meetings at which it is possible to review strategic questions, monitor progress being achieved by way of specific subsidiary agreements and make concrete plans for the period ahead.
The motion also refers to eastern Canada, suggesting a need for priority attention to the developmental requirements of eastern Quebec and the Atlantic provinces. That part of Canada is, of course, already receiving priority under the DREE program and under various other policy instruments of the federal government. The Atlantic provinces are subject to a higher maximum than other designated regions under the Regional Development Incentives Act. The Gaspe region of Quebec and the Atlantic provinces are also subject to the newly-announced employment tax credit. In many other ways, under the programs of various federal departments and agencies, everything possible is being done to maximize the economic impact of government activity in these same regions.
I would like to say a few words about Prince Edward Island.


Mr. Marshall:: Where is that?
Regional Disparities


Daniel Joseph MacDonald: It is on this side of Newfoundland. When flying to Newfoundland, you come to Prince Edward Island first. Most members of this House realize there is a comprehensive development plan in Prince Edward Island. It is for a 15-year period and began in 1969. It is the only province in Canada that has a comprehensive plan that deals with practically every aspect of development. To my knowledge, this is not so in other provinces. The minister can correct me if I am wrong.
Its purpose is to further the economic and social development of Prince Edward Island. Approximately $225 million was spent in the plan's first phase, 1969 to 1975, to establish a sound foundation for agriculture, fishing and tourism. In addition, the education system was reorganized and schools were consolidated, major improvements were made to the highway system, housing standards were improved, and marketing facilities were strengthened. During this period the economy showed a marked improvement as employment advanced, population increased, and per capita income growth exceeded expectations.
In 1975 the second phase of the plan was introduced, placing greater emphasis on the economic sectors of the province as programs were designed to make use of the improved capacity of the province to respond to development opportunities.
In March 1977 the Minister of Regional Economic Expansion (Mr. Lessard) and Premier Alex Campbell signed an agreement on the financial arrangements for the remaining three years of the second phase of the comprehensive development plan. This agreement provides for a contribution by DREE of $89 million over the next three years and a continuation of the phase II strategy. Programs implemented under this agreement are cost-shared on a 90-10 federal-provincial ratio, except for school construction, which is 50-50. Emphasis will continue to be placed on the productive sectors: agriculture, fisheries, and industrial development.
I wish to mention a few other items. One is of recent construction. I refer to the submarine cable link between Prince Edward Island and New Brunswick. A 13.5 miles, $36 million electric cable stretching across Northumberland Strait between New Brunswick and Prince Edward Island was officially opened in Charlottetown on October 28, 1977. This project began in 1969 to ease Prince Edward Island'., energy problems by linking the province to a maritime electrical grid. With a grant of $18 million from the Department of Regional Economic Expansion, a $9 million loan from the Department of Energy, Mines and Resources and $9 million from the Prince Edward Island government, a pair of cables manufactured in Sweden were laid into pre-dug trenches at the bottom of the Strait between Murray Corner, New Brunswick and Richmond Cove, Prince Edward Island.
The link will not lower the cost of electricity to Prince Edward Islanders but it will slow down the accelerating rate of increase. Although the Island will not draw all its power from the cable, its energy future is no longer tied to fossil fuels and to costs beyond its ability to control. The cable will be oper-

February 16, 1978
Regional Disparities
ated by Maritime Electric Co., Ltd. under lease by the Prince Edward Island government.
There are a few matters on which I would like to elaborate. I wish to make reference to how DREE is operating in Prince Edward Island and to what I feel it has accomplished.
With regard to electrical power, I know there are some in this House who will argue that we do not have the highest electrical bills in Canada. Some of my hon. friends from Newfoundland claim that. However, we are very dependent on oil. This cable is one of the great benefits we have received. It has not decreased our electricity cost, but it is a measure of security. As years pass and there is further development with water power and so on, this will be a very good thing for us.
I wish to make reference to school construction in Prince Edward Island under the development plan. We have a school system like other rural provinces which is rather spread out. Our pupils were attending one-room schools. With the help of DREE, we were able to proceed much more rapidly with consolidating schools, both secondary and high schools. This is a great benefit to us. This is one of the first programs of a comprehensive nature that was developed between the federal government and the provincial government of P.E.I. I think the minister will agree that it was used as a model at that time. However, a lot of things have come and gone since 1969.
Something else that has been very fruitful and beneficial to our province and copied in other provinces is the family farm program. I have a few more comments I would like to make, Mr. Speaker; therefore I will call it six o'clock.


The Acting Speaker (Mr. Ethier):: Order, please. It being six o'clock, I do now leave the chair until 8 p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Daniel Joseph MacDonald: Mr. Speaker, before the House rose at six o'clock I was concluding my remarks about DREE as applied to Prince Edward Island. I might say something now about the family farm program and the benefits derived from it.
As hon. members realize, Prince Edward Island being an agricultural province, the agricultural sector is a very important one. If it were not for DREE, those who live in the farm community in Prince Edward Island and who are able to enjoy some benefit from that program would be in a much worse position than they are at the present time. I am not trying to leave the impression that everything is cream and peaches, but I was closely associated with this scheme at its inception and I worked with it for a number of years, and I will do everything in my power to see that it is carried on and that worthwhile projects are forthcoming.

I might add that the arrangement for reviewing these programs is an excellent one. There is provision for an annual review by a joint advisory board consisting of representatives of both the provincial and federal governments.
Another area in which the government help very much is that of transportation, chiefly through road surfacing and construction. In P.E.I. we probably have more miles of road per capita than any other province. A great deal is demanded of roads today, truck traffic from one province to another being so heavy, so here again I think we would be in a bad position had it not been for federal assistance in highway construction, particularly in the maintenance of the trans-Canada highway.
The fishery is another important sector in our province. Our most lucrative fish is the lobster which brings in many dollars. It is a delicacy sold in many parts of Canada and it is likely that many people come to Prince Edward Island just to eat lobster. My other Atlantic colleagues appreciate this fish also. The government assists in the processing and in the maintenance of freezing units around harbours. Consideration is being given to using DREE money for the construction of boats also.
Something relatively new is taking place in our province. It is known as industrial malls. Industrial malls started in Charlottetown about two years ago through the efforts of the provincial government. What they really do is assist people interested in business. The province itself has a structure in this regard that is assisted through DREE in training and in implementation. When an individual gets to know his business he has an opportunity to expand and often moves on to something else. Someone then starting up in the business will take up the gap in that area.
This has proved to be very successful in this part of the country. There are over 20 in the town of Charlottetown. These employ quite a number of people and it looks like a very good thing to do for the future. The island population is small and there is no sense trying to take on big projects. Actually I think probably this is a return to our yesteryear when the people in our province, and other provinces as well, depended more or less on self-help, doing a great many things for themselves. This is something that looks very encouraging. It is expanding now to another town in Prince Edward Island, the town of Summerside, and we are looking forward to achievements in that area. As the saying goes, nothing is perfect at the onset. We are learning by our mistakes and other parts of Canada will perhaps also learn from some of the mistakes we make.
This is far, far from being all a mistake because there is enough good coming from it that it is bringing our population back. There has been a population change in the last number of years in our province. People used to say in the past that we were more or less an incubator for other parts of Canada. That is very true, but if all our people had stayed with their large families of yesteryear there would not be standing room now and they would have to leave anyway.
February 16, 1978

A lot has also been done in respect to market development. This is also assisted through DREE in conjunction with the provincial governments. Much is done in advertising and in processing, and this has been quite a help to us. Until we can get into the position in this great country of ours of having more control of production and marketing there will be some problems.
As you know, Mr. Speaker, the agricultural sector depends on many things, chiefly the elements. It depends on how much rainfall we have, how much frost there is on some occasions, and how long the growing season is. These are uncontrollable factors, but you do what you can in other areas, such as in promotion, salesmanship and what have you, and this has proved very successful. What we are producing for export are goods in very highly competitive fields. Our products must be very competitive in outside markets, not just in Canada but throughout the world.
Food processing is certainly coming into its own and is highly productive in Prince Edward Island. We have a great potato crop. In the last couple of years we have processed as much as 20 per cent of our potato crop, and that is a lot of potatoes when you consider they are produced on approximately 50,000 acres. This also helps our cash receipts. As the House knows, cash receipts from potatoes have been very, very good. They are not too good this year but last year we enjoyed possibly one of the best in many, many years. This was because in times of drought, as in Europe last year, our production was more saleable.
There are aspects of DREE that assist us in many ways. Going back to the agricultural sector again, one thing that has been very fruitful and beneficial is the potato packaging scheme. We get assistance in that regard through job creation, and assistance for structures. These are all things that help keep people abreast of things and we find this very beneficial.
At one time not too many years in the past, as everyone knows, in our small province we had one of the best forestry stands in the country. It has deteriorated now a long way from that state. One of the chief reasons for this deterioration results from the actions of some human beings. When you cut the perimeter around a very small area like this and expose it to the wind, the rains, the salt spray, and what have you, it has a very bad effect on the forest. Through help from DREE and the provincial government we now have a replanting process, and the day will come when we may have our forests back to the stands that once existed. This is not something that will happen very rapidly because it takes 30 years to grow a tree for pulp and 60 years to make good lumber, so to get a good stand of lumber right across the whole island will take practically a century.
I see, Mr. Speaker, you getting ready to stand so I think I should conclude on that point. There are many more things I could speak about regarding DREE and its benefits in Prince Edward Island and in the Atlantic provinces generally. I want to endorse DREE in every way. Being a landlubber in the past I know what the situation was and can see the good that DREE has done for our province. I want to compliment the
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minister for his patience and for the very intricate deals he has worked out for the Atlantic provinces. I wish him as well as our province great luck.


Jack Marshall: Mr. Speaker, I apologize to the hon. member of the NDP, but I am pleased to have the opportunity to speak on this motion. I commend the hon. member for Halifax (Mr. Stanfield) for introducing it, and also the hon. member for Dartmouth-Halifax East (Mr. Forrestall) for his contribution in producing this motion, which is significantly timely and in line with the economic conference we witnessed with great national interest over the past few days.
I watched a good deal of the economic conference and what struck me was the fact that everything I heard and read in the papers that were produced appeared to be repetition of things we have heard in the House of Commons over past years. They were the same suggestions and the same solutions to problems. I can only reflect and deduce that the provincial premiers have been reading Hansard over the past years in order to produce these papers.
Another thing struck me as I observed the conference. I wondered what our job was as federal members of parliament representing 264 districts in this place and where is the liaison between ourselves and the provinces. What has happened to the thrust we are trying to make here in the House of Commons as representatives of all Canada? What has happened to the liaison that would permit us to make those representations that should be made to the government? I can only come to the conclusion that some people are not listening to us. I wonder what we are doing here.
Certainly there must be some positive aspects about the discussions that take place between representatives of the provinces and whoever it may be that is interested in this country. I hope we will see some positive results from this conference. As I watched I heard the same cliches we have all heard for years, such as that we have to provide a climate of opportunity; we have to direct more attention to the private and, in some cases, the public sectors; we have to provide direction in the area of restraint on spending. The one that struck me the most was the suggestion that we had to instil a renewal of confidence on the part of our people and the business sector in the government.
It is a well-known fact that our citizens have lost faith in the government, but you cannot instil confidence in the people we are representing by sitting around a table repeating political cliches. You instil confidence in the people and in business by performance, by action, by leadership and by deed. We keep hearing the same problems and the same suggestions year in and year out, yet we have the same distressing situation regarding the economy of Canada, this country which we all know is so prosperous.
Our motion today relates in a few words just what the government must do immediately. It states:
-the government must now renew its commitment to reduce regional disparities by developing and implementing . . . comprehensive development strategies for

February 16, 1978
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eastern Quebec and the Atlantic provinces including such areas as transportation, energy, primary resources, industrial and service sector expansion.
I want to attempt to address my remarks to these areas as they concern my province of Newfoundland.
As a result of my basic military training, I have learned some fundamental lessons. One such lesson was that any advancing army, organization, element or province can move no faster than the slowest or weakest troops. Nothing is more true when that principle is applied to our nation's economic and social direction. Canada will never reach its potential unless the weakest provinces are strengthened to keep pace with the richer ones.
Another fundamental lesson was: in order to maintain progress and win a victory, one must reinforce his success. One must take advantage of his potential strengths and reinforce them for the benefit of all. Newfoundland's strength is in its richness of renewable resources: forests, potential energy, fish, offshore oil, potential mineral resources, tourism, and most important, human resource. In spite of this richness, and in spite of joining confederation in 1949 in order to take advantage of federal leadership, Newfoundland is still embarrassingly categorized as one of the poorest provinces. Hundreds of millions of dollars have been put into Newfoundland by the government for the purpose of development. Yet it still has the highest unemployment rate and cost of living. This is partly because our leaders never developed a long term strategy in order to take advantage of the province's potential, other than on a hit and miss basis. No infrastructure base was provided, which was the first unforgiveable mistake. An adequate transportation system is a fundamental necessity to reach the rich resources of Newfoundland and Labrador.
In spite of that known fact, it probably has the most inadequate rail lines and deteriorated highways in all of Canada. The Canadian National Railways has the responsibility of maintaining its rail lines. It has allowed those lines to deteriorate to the point where they are no longer in use. The CN has turned more and more to trailer trucks in an attempt to compete in the market. That contributes greatly to the deterioration of the province's highways. The cheapest form of transportation, from an energy point of view, is the rail lines, but that is not recognized. The transportation link requires upgrading and strengthening, yet the Minister of Transport (Mr. Lang) refuses to offer any more than 50 per cent of the cost. Certainly the Newfoundland government cannot afford it.
I commend the Minister of Regional Economic Expansion (Mr. Lessard) who is providing 90 per cent of the construction cost for a highway to the Great Northern Peninsula. That highway is 1 hg constructed to take advantage of the resources whiv are in northern Newfoundland and Labrador. How can one minister offer only 50 per cent of the cost while another minister is providing 90 per cent of the cost of the Great Northern Peninsula highway? The Minister of Regional Economic Expansion recognizes the value of Newfoundland's
resources. Originally the federal government assisted in the construction of the Trans-Canada Highway on a 90-10 basis. In order to take advantage of the resources which can be found in the Great Northern Peninsula, northern Newfoundland and Labrador, work must be done on the Trans-Canada Highway from Port aux Basques to the jump-off point in the triangle of Deer Lake, Corner Brook and St. Stephen.
I should like to refer to some statistics which were prepared by the trucking associations of the Atlantic provinces. Between 1970 and 1976, rail transportation increased by 3 per cent. It was an increase from 385,000 tons to 397,000 tons. Truck and trailer traffic increased by 424 per cent. Thus, it must be fundamentally obvious that the highway has to be built up, strengthened and reconstructed through the trans-Newfoundland corridor, which is vital to economic development.
Because of Newfoundland's isolation, the cost of living has increased rapidly. Newfoundland suffers more than any part of Canada because of isolation and the high cost of transportation. Hon. members might be surprised if I mention that Newfoundland has an agricultural base. It can produce almost everything required agriculturally and thus avoid transportation costs. I do not understand the policies of the Minister of Agriculture (Mr. Whelan) with respect to the creation of storage facilities in order to lower the cost of transportation and storage of grain.
In regard to the subsidies which are provided by the Department of Agriculture for vegetable storage facilities, in Newfoundland last year there were two applications. Newfoundland can produce almost anything it requires, such as vegetables, beef, poultry, eggs, milk and other food commodities which are imported at greater cost to the consumer. We must have the support of subsidies and the provision of storage facilities. I hope the minister realizes that potential will help Newfoundland.
The Newfoundland Federation of Agriculture produced figures on laying mash to indicate the price spread among the various provinces. The cost per ton in Quebec was $165, in Nova Scotia it was $172 and in Newfoundland it was $187. That is a difference of approximately 15 per cent. Is it any wonder Newfoundland has the highest cost of living? Because of the additional cost of feed, it is necessary to add one cent to the price of a dozen of eggs.
Newfoundland is the customer of every province west of it. In 1974 the total manufactured shipments from Newfoundland to Canadian destinations were $270 million, while imports totalled approximately $740 million. Newfoundland is shipping too much of its products in their raw state, such as iron ore, unprocessed codfish and pulpwood. There is a trade surplus in the paper industry. The deficits in trade for 1977 in Nova Scotia were $68 million; in New Brunswick, $30 million; and in Quebec, $124 million. Newfoundland requires a comprehensive program to develop its resources for the benefit of its people and Canada.

February 16, 1978

Speaking about the pulp and paper industry, it is in a desperate situation in Newfoundland. Although this is a successful operation, it is threatened by the budworm blight. Unfortunately, because of our distance from markets, the great pulp and paper mills in Newfoundland have difficulties competing. Our exports to the United States which amounted to 80 per cent of our production have decreased to 60 per cent. This is problem which again reflects our need for assistance in transportation.
With respect to the spruce budworm infestation, I had the opportunity, together with some of my colleagues, to meet experts from the Department of the Environment through the auspices of the minister, and we learned from them that the provinces of Ontario, Quebec, New Brunswick, Nova Scotia and Prince Edward Island have reduced the blight through defoliation measures and that only in Newfoundland the infested area has increased last year from three million acres to 3.3 million acres. I know the Minister of State (Environment) (Mr. Marchand) is trying, with the help of the U.S. government, to increase research in that area to find means of fighting the budworm and at the same time recognize the environmental effects which might result. I hope that we will see the results soon, but this work must be given priority because if we lose our pulp and paper industry in Newfoundland, an industry which is threatened now, I do not know what our future will be.
However, there is still much potential in Newfoundland, and I must commend the minister for providing millions of dollars to various sectors of our economy. We talk about our visions in the north. In Labrador and in northern Newfoundland we have a great potential and we must direct our efforts toward developing it. Experts say that in Labrador there are substantial uranium reserves, but the most realistic potential we have is the hydro potential on Gull Island on the Churchill River in Labrador, a source of renewable energy of which we must take advantage, and the quicker the better. I hope that the minister, together with his colleagues, will recognize the fact that with that energy resource we will be able to provide energy to the people of Newfoundland at a realistic price, and at the same time help the Atlantic provinces as well as develop other industries in northern Newfoundland and Labrador.
As I indicated previously, one of our military lessons was to support the weakest troops. If the government wants ideas about producing jobs, let me point to a housing program which, as I have mentioned many times, is so necessary in Newfoundland, a program called residential rehabilitation assistance. It is recognized that in Newfoundland there are
31,000	homes needing insulation, yet CHIP is directed at the wrong people. It does not assist those who need it most, namely, Newfoundlanders who own their own homes, people with less than $6,000 income and people who cannot afford insulation. There is a program right now which would produce one job in every home which needs repairs. Again I say to the minister that the program should be redirected to assist those people who need it most.
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What amazes me is that whenever I ask for money to be allocated to the Residential Rehabilitation Assistance Program, the minister tells me there is not enough money; yet the government can turn around and provide $1.4 million for the home insulation program, and the people who need it most cannot take advantage of it. I suggest to the minister that we can produce jobs in the way I indicated and that this is a realistic way of providing employment and helping people to insulate their homes at the same time. Again I say there are
31.000	homes in Newfoundland needing insulation, and for every such home there is a job. This would produce at least
31.000	jobs.
Another problem in my province which distresses me is our inability to take advantage of another good housing program, namely, the Neighbourhood Improvement Program. There is a community in my district called Stephenville which lost a linerboard mill with 2,100 jobs. They were designated as a NIP area, which program provided them with money to build a base for the town. Unfortunately they could not afford it because they could not afford the loan factor. They were given a grant of $400,000, but there was a loan factor of $400,000 attached to it so they had to give it up. This has denied them the opportunity not only to develop their town and to give it an infrastructure base but also to provide the necessary-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but the time allotted to him has expired. Nevertheless, he may continue with unanimous consent.


Maurice Adrian Dionne: Mr. Speaker, I am happy that the hon. member for Halifax (Mr. Stanfield) introduced this motion today because it gives us a chance to take a look at programs provided under DREE and also at the ways in which the provinces have put them to use. I will confine my remarks principally to DREE programs in New Brunswick and to the way the government of New Brunswick has put to use money under these programs.
It seems to me that the motion before us is worded in somewhat general terms. It seems to ignore the fact that it would be extremely difficult for the government to do what the motion suggests without the concurrence and active participation of the provinces. Perhaps that consultative and participatory process has already begun earlier this week at the conference of first ministers. I must say I am a little amazed at the virulent attacks which the opposition has launched at that conference and at the participants at that conference, particularly in view of the fact that five of the premiers attending the conference are adherents of the Tory doctrine and one is an adherent of the NDP doctrine, although one would never think that members of the NDP here in the House belong to the same party as the premier of Saskatchewan.
I suggest that in order to develop effective strategies for eastern Quebec and the Atlantic provinces in such areas as transportation, energy, primary resources and industrial and service sector expansion, the province involved must participate actively, and indeed play a greater role than the federal

February 16, 1978
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government, in the planning and implementation stages of such a strategy. Nearly all these areas fall within the jurisdiction of the provinces under our constitution.


A. Daniel McKenzie: Tell us how you are helping the economy in Florida.


Maurice Adrian Dionne: 1 suggest the hon. gentleman pipe down and listen to what I am about to say, and perhaps he will be more satisfied. Never having been to Florida, I am afraid I would not know very much about the economy there.


J. Michael Forrestall: You do not know a hell of a lot about the economy of New Brunswick either.


Maurice Adrian Dionne: If you listened you would find that perhaps I know more about it than you would like to hear. I do not know why it is that whenever I speak here in the evenings there are a few hon. members opposite who seem to have great difficulty in accepting the truth of what I say. It seems that they always want to interrupt and create a disturbance in the House. It is a strange phenomenon, but I do not really mind because every time they open their mouths I am given an opportunity to refute another of their contradictions.


Some hon. Members:: Oh, oh!


Maurice Adrian Dionne: At least I am not reading a speech made by one of my colleagues several months ago. If the hon. member for Winnipeg South Centre (Mr. McKenzie) has an original speech to make, I would be happy to sit down, let him make it and then continue mine after he is through.


A. Daniel McKenzie: Mr. Speaker, I rise on a point of order. 1 would appreciate it if the hon. member would give us some statistics on how the government is helping the economy of Florida. We have much detailed information on how the government is driving investment money outside Canada and into Florida. Let the hon. member tell us how the government is helping the Florida economy.


Maurice Adrian Dionne: Mr. Speaker, I am having difficulty following the hon. member's point. I do not see anything in the motion about Florida. I am afraid the hon. member is lost, and if he does not stop interrupting, I may get lost as well.
The question of priorities and the definition of those priorities must rest with the provinces. I do not think any province, be it Quebec or one of the four Atlantic provinces, would want the federal government to tell it what its strategy for development must be, but it seems to me that that is what the motion is suggesting. I know that the province of New Brunswick would not want that, and I do not think it should. The provincial governments are obviously closer to the residents of the provinces than the federal government can be. It is impor-

tant to note that in the New Brunswick legislature there are 58 representatives of the people, whereas in the federal parliament there are only ten, so each member of the federal parliament from that province represents a much large area and a much larger population.
What has been happening in the province of New Brunswick is worthy of note. While I applaud the remarks of the premier of New Brunswick which he made at the first ministers' conference concerning the value of DREE, I wish he would tell the ministers of his government to keep their grubby little paws off federal money and stop using it for patronage and for helping out their political friends.


Some hon. Members:: Oh, oh!


Maurice Adrian Dionne: I hear the hon. member for Carleton-Charlotte (Mr. McCain) piping up. If he has any doubt about what I say, I suggest he look at the monstrosity the Conservative government of New Brunswick has built on the Houlton road in New Brunswick. That tourist reception area cost the taxpayers of Canada and New Brunswick almost $3 million. If anyone can justify that, bearing in mind that we need jobs in New Brunswick, I would be glad to listen.
During the sixties real attempts were made by that great New Brunswick premier, the Hon. Louis Robichaud, to bring to the province equality of opportunity for all people of all sectors. Unfortunately, that thrust has been lost. Some areas of the province are now being developed, but little or no attention is being given to other areas.
Two areas of my province are not covered by subsidiary agreements between the federal government and the province. I want to speak about the northwest part of New Brunswick, which is made up principally of Madawaska and Victoria counties, and the area which I represent, commonly known as the Miramichi.
On the Miramichi there is a very high rate of unemployment. We have had great difficulty with our economy for a long time. That has been particularly pronounced in recent years because of weak markets for the primary resources upon which most of us rely for our livelihoods. Very little is being done to enhance the economy of that region or of the northwest region. I understand that DREE is quite prepared to enter into a joint agreement for the development of those regions of the province which are not covered by existing DREE grants, but we cannot get any movement from the provincial government.
I think it is fair to ask why. If DREE is prepared to put money into those areas of the province, what is holding the province back, and how can the federal government work out a comprehensive development strategy for the province of New Brunswick as suggested by this motion? I submit that the federal government cannot act on its own, although it has shown a continuing willingness to do so.
During the period between April, 1966, and the end of March, 1977, total DREE expenditures in New Brunswick
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amounted to $426.5 million. There are many agreements covered by that amount. Under special area agreements and highways agreements substantial investments have been made in roads, water and sewer and industrial land infrastructure in the Moncton and Saint John special areas. Other efforts have been made to improve the highway network in New Brunswick, but again it is interesting to note that a great deal of money has gone into areas which are already fairly well developed. The Saint John and Moncton areas were undoubtedly in need of a strengthening of their infrastructures to provide broader industrial bases for their citizens, and no one, including me, wishes to take anything away from any other part of the province. What I wonder is why other areas of the province cannot share in the largesse of the Department of Regional Economic Expansion through properly negotiated agreements to give those areas the strengthening they require in order to bring about their own industrial development.
There was the growth centre concept, for instance, and I think it is fair to say that for the entire province the growth centre concept was a failure. There is no doubt that the growth centre concept created some jobs, but the bad side effects outweighed the good effects the concept created. It weakened areas outside the growth centre. Their opportunity to attract industry diminished. Their ability to maintain the industry they had diminished. The growth centre concept caused the reduction of population in some areas. I do not believe that is good policy, so I am glad that it is not being taken very seriously any more.
The FRED agreement resulted in the pumping of millions of dollars into the northeast part of the province of New Brunswick. There have been some spectacular results there as well. The improvement in housing and support facilities for housing development is quite phenomenal. None of this would have been possible or brought to fruition without the assistance of DREE. In the southeast part of New Brunswick we have what is commonly referred to as the southeast agreement which, while not massive in its funding, has been a very worthwhile effort in strengthening the basic infrastructure required for the development of communities and tor attracting industry. Unfortunately, those programs have not covered the area between the northeast and southeast known as the Miramichi except for two little sections on either side.


Mr. McCain:: Patronage goes everywhere else. Why does it not go there?


Maurice Adrian Dionne: The hon.
member wants to talk about patronage, Mr. Speaker. The government of which he was once a member made a science of patronage in New Brunswick. No government in this country has practised patronage the way the Hatfield government in New Brunswick has. Hon. members opposite complain because of appointments made by this government-because from time to time someone who might have been a Liberal is appointed to the bench, perhaps. The hon. member sitting over there had a situation created for him by his colleagues in New Bruns-
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wick. He was called the potato co-ordinator for New Brunswick, whatever that may be. How does one co-ordinate potatoes?
Let me tell you something else about patronage, Mr. Speaker. There is the matter of route 11 in Northumberland county. When DREE forced the Hatfield government to spend some money on road development in Northumberland county last summer, despite the clause in the agreement which said that hiring must be done through manpower, it had to be done through a candidate defeated in the 1974 election. If the hon. member wants to talk about patronage I will give it to him. It is rife in the forestry agreement and worse in the tourism agreement. I could go on and on about patronage but that would take up all the time until the adjournment.


Charles Joseph Clark: Move them all to Shediac.


Maurice Adrian Dionne: They had better quit while they think they are ahead. There is a tourism agreement in New Brunswick and I suppose it has done some good. One would have to do a fairly careful search to find out how it is going to help the development of tourism in New Brunswick, though. There have been some rather grandiose schemes like the building of these magnificent reception centres which very few people visit. There is the scandal of Jardin de la Republique and the scandal of Sugarloaf Park.
I do not want to belittle these projects because they will have some value in the long run, but I cannot accept that we should develop very elaborate structures when we do not have the kind of highway systems we need to bring the tourists in. It seems to me that the highway system should come first. The Minister of Transport (Mr. Lang) has offered the province a $100 million program for highway strengthening over three years on a 50-50 cost shared basis-


Fred Alward McCain: Come back to the motion and be positive about the maritimes.


Maurice Adrian Dionne: Do you want to mix it up again? I am game. I would be positive if the government of New Brunswick gave us anything about which to be positive. It has been a negative government which has not shown any interest in half of the province. It is their philosophy that there are two capitals in New Brunswick-Fredericton for the southern, industrial part of the province and Ottawa for the rest. They have ministers saying to the ministers of the federal government, "Why don't you get on and sign these agreements so that we can get on and spend our money in the rest of the province?" Is that an attitude of responsibility?


Fred Alward McCain: Oh, oh!


Maurice Adrian Dionne: If you had kept your trap closed, all of this would not have started. If you want to mix it up politically I can do it and I am prepared to do it.


The Acting Speaker (Mr. Ethier):: Order, please. Perhaps hon. members should be reminded that they should address the

February 16, 1978
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Chair at all times and not one person in particular. I would remind the hon. member that he has one minute left.


Maurice Adrian Dionne: Mr. Speaker, I regret that I neglected to address the Chair. I apologize for that. I will give the remainder of my time to the opposition and maybe if they take a minute or two to reflect they will be able to come up with some positive ideas.


Fred Alward McCain: A point of order. Let me set the record straight on one thing-


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


Fred Alward McCain: Mr. Speaker, on a point of order-


The Acting Speaker (Mr. Ethier):: The hon. member is seeking the floor on a point of order and he will be recognized, but 1 do not see why he should establish a point of order before being recognized.


Fred Alward McCain: For the record, I think it should be on the books correctly that the $100 million-


The Acting Speaker (Mr. Ethier):: Order, please. I think I said clearly that I would recognize the hon. member to establish a point of order but not something for the record. That is argument and a point of debate, not a point of order.


Mr. David MacDonald (Egmont):: Mr. Speaker, as I listened to the hon. member for Northumberland-Miramichi (Mr. Dionne) it reminded me of my former profession and I thought that he was perhaps preaching for a call. Certainly with such fervour and emotion he might be welcome in the seriously depleted ranks of the Liberal party in New Brunswick at the present time.
I want to recognize at the outset not only the contribution made by the hon. member for Halifax (Mr. Stanfield) when he led off in this important debate but the contribution he has made throughout his career in trying to reverse a very serious trend that has affected the eastern provinces of this country almost since the moment of confederation.
I think the hon. member for Halifax, a former premier of Nova Scotia and former national leader of this party, is one individual who has gained respect on all sides of this House and throughout the country for attempting to tackle very directly the problems confronting a significant proportion of the population of this country.
The motion before us today refers to the need for a com-prenhensive development strategy for the five eastern provinces. 1 think that is the crux of what we are faced with in this debate. Hon. members may have wondered whether the motion was just a series of words without particular meaning or whether it held some special implications for us as federal legislators.
It is important to recognize that the project of trying to deal with regional disparities is relatively new in this country. It is
[The Acting Speaker (Mr. Ethier).]
true that since the 1920s there have been attempts to deal in sporadic or specific ways with economic and social disparity. I think it is fair to say that it was not until the time of the government of the right hon. member for Prince Albert (Mr. Diefenbaker) that there was any conscious attempt to deal with economic disparities.
I would like to give two or three examples to point that up very clearly. There was the development of the ARDA program, the Atlantic adjustment grants, and the Atlantic Development Board. Those three instruments recognized that it was not enough just to have a piecemeal response or an occasional subsidy to deal with one element of disparity or economic difficulty. They recognized that a more comprehensive and consistent approach was required to get at the underlying causes of these economic difficulties.
As I said at the outset, Mr. Speaker, since confederation economic development in Atlantic Canada has lagged behind the Canadian norm by almost any indicator of economic progress. Recent development efforts since the early 1960s have succeeded to some degree in narrowing the income gap. I might say that this has been built chiefly by very large amounts of economic transfers.
In 1976 the following are the transfers made to the Atlantic region: $550 million for unemployment insurance benefits; $208 million in family allowance benefits; $461 million in old age security benefits and $89 million for the Canada pension plan, the largest amount in terms of equalization grants of well over $800 million. These figures together total something in excess of $2.1 billion.
In that same period when we were transferring, by one means or another, a very substantial portion of basic income to the two million residents of Atlantic Canada, we were spending in direct incentives under the Regional Development Incentives Act something like $23 million. We have heard it expressed during recent days by some of the premiers of the eastern provinces speaking at the federal-provincial conference, that Atlantic Canadians and Quebecois are becoming increasingly worried that we are being classed only as consumers and not as producers. That is not a situation this country should accept.
I believe that our region is increasingly in danger of being trapped in its dependency on the federal government for public services, income transfers and even jobs. I am glad that the Minister of Employment and Immigration (Mr. Cullen) is here this evening. He is the minister responsible for the very large scale program of Canada Works. I am disturbed at the number of representations I have received from people in my constituency. As the minister well knows, it is one of the areas in the country which has very high unemployment. By varying statistics it is between 15 per cent and 30 per cent.
I am concerned that we have fallen into this continuing round of making funds available for short-term job creation which provides no permanent economic benefit to the region. It provides no opportunity to strengthen and expand the employment possibilities in the basic industries or sectors of
February 16, 1978

the economy, not agriculture, fisheries, tourism or any of the services that support the over-all structure of the economy.
It is more disturbing when you realize that the minister has received representations. I know he has had representations directly from the chairman of my ministerial advisory group saying that if we are to receive these millions of dollars for job creation, then let us make sure the funds that are being expended are not going to create some kind of short-term enthusiasm or interest or opportunity, or long-term frustration and dependency.
I am sorry to say that this government and the minister, while having inaugurated this program some years ago now, are no closer to recognizing that reality as well as the growing economic and social dependency, and the cost included in it, across the country but particularly in the area of eastern Canada which has the highest continuing unemployment. It is too much to expect that the minister would say anything this evening, but I would hope that he would recognize that it is unacceptable to deal with people only in terms of making sure that they have some form of income to continue as consumers, dependent if you like, on the federal handout. It is to reverse that situation that we have this motion before us today.
There must be a development strategy that takes into account both the problems and the potential in the area of transportation, energy, primary resources and the industrial and service sector. Just to look for a moment at the energy question, I was interested in the remarks of the Minister for Veterans Affairs (Mr. MacDonald) who correctly said that energy costs in Prince Edward Island are among the highest in the country. If I look at the report which was produced some months ago comparing the average annual energy expense in Canada in a number of cities-these figures were for about a year ago and they would have escalated somewhat in the meantime-I find the figure of $305 for heating in Toronto, $80 for hot water, oil or gas, and $140 for electricity. Compare those costs to costs in Charlottetown, which are $410 for heating, $90 for hot water and $480 for electricity, making the over-all figure for a Prince Edward Island urban resident $980 as compared with a Toronto figure of $525. Lower figures would have been reported for cities in western Canada and slightly higher figures would be reported for other cities in eastern Canada.
This is one indication of disparity alone, Mr. Speaker, where consumers in my province must pay energy rates in some instances almost twice that of their counterparts who live in other urban centres in central and western Canada. It is not enough to make sure that we have some level of unemployment insurance as maintenance income, or family allowance, or Canada Pension Plan benefits, or even employment under Canada Works. If we are not prepared to deal with some of the underlying causes of this growing disparity throughout the years as a result of the energy crisis, we are not going to eliminate regional disparity.
Quite frankly, I think the government has not been willing to recognize that it cannot solve these problems on its own with ad hoc programs. They cannot simply toss in RDIA here,
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or Canada Works there, or an announcement by the previous minister of finance with respect to some special tax rate, unless all of these are included in some kind of comprehensive approach.
Those of us who come from Prince Edward Island, such as the Minister of Veterans Affairs of the hon. member for Malpeque (Mr. Wood), can say something about comprehensive planning. We have seen one aspect of it since 1969 with the Prince Edward Island comprehensive development plan. Unfortunately, Mr. Speaker, if one was to gauge one's reaction to comprehensive planning only from that experience, one would have to opt in some instances for anarchy rather than for order and planning.
While the Minister of Veterans Affairs waxes eloquently about the great things that have happened under DREE, with the consolidation of the school system, the rapid change in the educational system in Prince Edward Island, I know the hon. member for Malpeque and myself as well as many others would want to add words of caution as to the enormous difficulties that have been created in rural communities and in the educational system itself in trying very quickly to adopt unilaterally an educational system and model which made very little sense for the present or future social and educational needs for the people of Prince Edward Island.
Of course, the comprehensive development plan was a classic example of unilateral intervention by the government. One of the great things about the modern era is that if anyone wishes to check out what really happened with respect to the P.E.I. comprehensive development plan they can see it all on film. The National Film Board has provided an actual record of the process of negotiations that led to the signing of the P.E.I. plan. It underscored the way in which provincial priorities and imperatives were constantly battled and set aside by a federal bureaucracy that had almost no imagination and less sensitivity to the needs of the people living in Prince Edward Island. Talking about the Prince Edward Island development plan is like talking about history, and despite the remarks by the Minister of Veterans Affairs about a second phase, Finding that second phase is like finding the Peking man. We know that it existed once but somehow was lost in the course of a voyage, never to be heard from again. There really is no plan as such today. What does exist, however, are bits and pieces of programs that are the holdovers from the years of the P.E.I. development plan.
What was the reason the plan, which at the outset seemed like a marvellous idea in its basic terms, in terms of development to achieve social and economic goals, seemed to fall so short of success? When it comes right down to the basic reason, it is that the federal government to a large degree, and the provincial government to a lesser degree, did not have faith in the people themselves in terms of their own judgment and participation.
It is now a point of considerable analysis for sociologists and others. However, one aspect of the plan that could have made
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February 16, 1978
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it work, both in its formative stages and in terms of its implementation, was the opportunity for real public participation. Unfortunately, as anyone from Prince Edward Island knows, there was no participation in the formation of the plan. In fact, we played a game of "blind man's buff' during 1968 and 1969 trying to decide what was actually going to be done.
During the months preceding the unveiling of the first phase of the plan, there were leaked portions of the plan that would more or less titillate public opinion on the island to let them in on what would actually happen when the great government decided what their plan would be all about. When it was unveiled, it said a great deal. Unfortunately, however, it was not a plan which the people themselves had an opportunity to formulate and feel they were part of.
Between the years 1969 and 1972 or 1973 there was participation, chiefly through the agency of the rural development council. Even that agency, which basically had been a voluntary association, felt it was a kind of divided house. On the one hand, they felt they had some role to play in terms of community development because that was their basic mandate. On the other hand, they were receiving considerable funds provincially and federally and therefore felt almost in a public relations job for the development plan. That made life extremely difficult for the staff and officers of the rural development council. Of course, even the RDC was able in some way to effectuate public participation, so much so that when the second phase was on the eve of being signed, the provincial government acted quickly to cut off any further funding.
Now, of course, such a thing as public participation being an integral part of the second phase of the plan is simply a non-existent factor. This means if people are not consulted at every stage of the planning and are not involved in preparing for, and participating in, their own future, that which is imposed upon them will obviously be of very superficial duration and effect.
We have profound problems in the Atlantic region. I noticed an article in the local paper the other day regarding a meeting with the Maritime Farmers Council. Dr. Gordon MacEachern, president of the Canadian Agricultural Economics Research Council, a very distinguished former Prince Edward Islander, uttered very sad words of warning. Quoting from a Canadian Development Association prediction he said, and I quote:
-the Atlantic region will lose 50 per cent of its farmers over the next six to seven years and 80 per cent within about 20 years.
He said there were about 10,000 farmers in Nova Scotia in 1966 but there now are only 5,400. By year 2000 the number would shrink to 1,600.
Nowhere had there been more land taken out of agricultural production in the last 20 years than in the maritimes,-
That is an incredible statement when you think how important agriculture is to the economy and the society of the maritime region. He went on to say:
In New Brunswick, farmland was down 52 per cent in the 20-year period, in Nova Scotia 42 per cent and in Prince Edward Island 22 per cent.
That kind of statistical analysis tells us, especially with growing food needs in our country and in the world, that we

must reverse the trend. We must not simply subsidize and basically create efficient units in agriculture. We must turn the agricultural industry into a dynamic, important development component of the Atlantic region. It can and must be done. However, given the direction and the trend of this government's performance, one cannot be greatly encouraged.
In the area of transportation, the hon. member for Dart-mouth-Halifax East (Mr. Forrestall) has repeatedly reminded the Minister of Transport and members of this House that we cannot have any kind of overall development strategy unless transportation plays a constructive and useful role.
1 know the minister who is here this evening would echo those words very strongly. He knows that his principal problem in some ways is not the effective administration of his own department but trying to get a useful measure of co-operation and co-ordination from other key departments, whether it be transport, finance, energy, or any other departmental policies which have an impact upon the five eastern provinces.
The sad fact is that when this department was established under the minister's predecessor in 1969, hundreds and thousands of words were echoed in this place and in committee about the importance of this new ministry which would, in effect, be a kind of super ministry. It was going to ensure there was a co-ordinated, effective, over-all development strategy. What has happened? All we have now is the minister trying to achieve some kind of bilateral agreement with each of the provinces in turn, trying to shore up an RDIA program that seems increasingly irrelevant to the process of the development of the Atlantic region, Quebec and elsewhere.
What we need is a refreshed mandate that will be committed to a comprehensive program of development. If this debate achieves nothing else, I hope it will remind this minister and the government that they have a major role to play, at least as major as it is possible to play given their performance to date, or until they can be succeeded by a government that will surely do it!


Mr. Albert Bechard (Bonaventure-Iles-de-la-Madeleine):: Mr. Speaker, I must admit that I was surprised by that sudden interest and astonishing fondness shown by the Progressive Conservative party for Quebec, especially for eastern Quebec. However, 1 am not so surprised when 1 consider and realize that the sponsor of the motion is not the Progressive Conservative party, but the hon. member for Halifax (Mr. Stanfield). Indeed, Mr. Speaker, the hon. member for Halifax is, in my opinion, the only former leader of the Progressive Conservative party who has tried to learn and understand Quebec and its inhabitants.
If I could be allowed to make a suggestion-which evidently will not be followed-to the present Leader of the Official Opposition (Mr. Clark) and his supporters, it would be to listen carefully, as he did during his speech, to the hon. member for Halifax and act upon his advice on Quebec, because I think he is the best adviser the Progressive Conservative party and
February 16, 1978

more especially the Leader of the Opposition could have at the present time.
Mr. Speaker, after this short departure from the subject, I want to say that I am glad of the opportunity given to me by the hon. member for Halifax to talk about regional economic expansion, the expansion of regions where economic progress is slower than elsewhere in the country, my region among others.
None of the legislation put forward by the various governments, be they federal or provincial, none of the measures they have taken has given perfect results; perfection, as we all know, is not of this world. But, Mr. Speaker, no one can deny that the act of 1969 creating the Department of Regional Economic Expansion has resulted in benefits and important advantages for the communities it was meant to help. So it was to be expected that this legislaon would come up against certain obstacles which would prevent it from reaching its objective-improving the economy of those regions where economic growth was long overdue and did not allow the people to find the proper means to pull themselves up to the same level as other parts of the country.
Besides being isolated from large centres, one of the obstacles which preclude economic growth in some parts of our country is that industry itself, well set up in large centres with all their opportunities as a marketplace and so on, was not naturally attracted by our designated areas. Yet, in spite of this, regions such as Montreal and Quebec city were designated later in an attempt to decentralize towards peripheral areas.
Mr. Speaker, we have no doubt whatsoever about the beneficial effects generated in our regions with the creation of the Department of Regional Economic Expansion. When I first came to the House in 1962, at the same time as Your Honour, I was concerned over the lower economic conditions of the area which I have always represented and maybe because of the negligence of preceding governments, our region was in an underdeveloped state and did not benefit from programs available to the rest of Canada.
That is why we had insisted during the campaign on the fact that under a Liberal administration, financial assistance would contribute to the economic development of areas such as ours-and I know there are a great many other such regions in Canada and especially in the Atlantic provinces-and provide our people with decent living conditions.
So it is that following our assuming power in 1963, we adopted for instance the industry incentive policy, which encouraged corporations to establish their operations in areas such as ours. As early as 1963 or 1964, a corporation came to my riding to develop very significantly the forest industry. Without the incentives provided by the then Department of Industry, Trade and Commerce, this industry would never have started its operation in the Gaspe area. That was only the beginning, and later, in 1969, we witnessed the creation of the Department of Regional Economic Expansion, and the first incumbent of this portfolio unless I am mistaken, the Hon.
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Jean Marchand, now a senator, then a very distinguished hon. member from the province of Newfoundland, and now benefits from the efficiency of the hon. member for Lac-Saint-Jean (Mr. Lessard), the present minister of the Department of Regional Economic Expansion whom, leaving aside all political considerations, I want to congratulate for his interest in regional development and all he had done to date under difficult circumstances to help the development and economic progress of my province.
Not so long ago I was very unhappy to hear that the abolition of DREE was being considered, just as I do not like to hear the opposition say it has served no good purpose, that regional disparities still exist and that the department has done nothing. Well, it is easy to say nothing has been done, but taking the province of Quebec, I have given a few examples in my riding of subsidies to industry. Taking them by area, the Gaspe Peninsula, the St. Lawrence River and the lower St. Lawrence-of course, one always starts with an area close to one's heart-well, where subsidies to industry are concerned the Department of Regional Economic Expansion, therefore the federal government-which is being blamed lately of doing nothing, and again not long ago, a few days ago as a matter of fact here in Ottawa, through the premier of Quebec-has made quite a few grants. As of December 31, 1977, the Gaspe Peninsula and the lower St. Lawrence received grants from the federal Department of Regional Economic Expansion in the amount of $10,849,717; the Saguenay and Lac-Saint-Jean area, $14,000,942; the Quebec city area, $44,116,150; the Trois-Rivieres region, $65,381,078; the eastern Townships, $16,604,976; Montreal, $87,707,848; the Ottawa Valley region, $2,713,989; northwestern Quebec, $30,446,784; the north shore, $20,593,354, for a total of $292,414,838; which would make on an acceptable investment of $1,501,446,952 for a total job production of $72,507.
The FODER agreement, which deals mainly with the problems of the Gaspe Peninsula and the lower St. Lawrence, had invested, as of October 7, 1977, $148,575,576 in agriculture, forests, fishing, mining, leasure, tourism, business, urban planning, transportation, social development, administration and participation in forest redevelopment, under an ancillary agreement, revised and signed June 22, 1977, an estimated $3,950,000, $2,370,000 being from the federal government, in land treatment, including drainage, $4,750,000, including $3,000,000 from the federal government.
So it cannot be said, Mr. Speaker, that the Department of Regional Economic Expansion has not done anything for regional disparities. As for the lower St. Lawrence and the Gaspe Peninsula, it is only since the creation of the department, since certain incentives are given to companies for settling there that we have known renewed growth in economic activities. In the field of transportation, for example, we have established a roll-on roll-off ferry system, which has developed the tourist industry in the Magdalen Islands, whose only industry was fishing. Today, the islands enjoy a fairly good revenue from tourism, due to this ferry which is part of the regional economic development program.
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February 16, 1978
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I would like to come back to the question of air transport about which everyone has been talking for a long time. For my part, I have been talking about it for ten years in relation with the Magdalen Islands. It is the only means of transport available from December until April in the Magdalen Islands.
I have been requesting improvements to the airport since 1968; some improvements have been made, but they still do not meet the needs of the population for adequate transportation. At the present time, the Magdalen Islands cannot be assured of regular service because we do not have the necessary equipment, that is instrument flights, since the present runways and the many hills prevent installation of proper instruments. We have been asking for improvements for ten years and nothing has been done. Numerous studies have been made. The Eastern Quebec Planning Bureau has made certain studies and we have of course kept the Magdalen Islands airport in mind, but we have still not received an answer.
Today I had the pleasure-and for this I would like to credit the Minister of Transport (Mr. Lang)-to hear that a private firm, which says that its experts know everything about the socioeconomic conditions of our area, has been commissioned to study the best location for a regional airport in the Gaspe area-SOme will say that it is just another study, but this one will be made by an independent firm and not the Department of Transport. Some may wonder what this has to do with the Magdalen Islands, but it has a lot to do with the islands since the company now providing service from the province of Quebec to the Magdalen Islands would like to develop the airport at Havre-aux-Maisons in the Magdalen Islands, but this can not be done before a regional airport is built or the Gaspe airport is improved.
This is why we applaud the decison made by the department, following repeated requests on our part, to commission an independent firm to study the most economically and sociologically suited location for this airport within three months. Transport is a major factor of economic development. In this regard, I must thank the Department of Regional Economic Expansion for listening to our complaints and finally accepting to assist in the construction of a road to the Gaspe area. We are satisfied with what has been spent through its financial participation with the province of Quebec to the construction of this road which, we hope, will soon be completed. We are satisfied with this participation but we will be even more satisfied when Gaspe will be able to have an air transportation system meeting its needs for 1978 as well as its future needs, as far as economic development is concerned.
A salt mine has been discovered in the Magdalen Islands. Several of my colleagues in the House have asked me questions after the release of reports in the press and on the radio, people who seem to be against the development of this salt mine. Those who are opposed to it are people from outside who went to the Magdalen Islands to try to convince people that from an environmental and aesthetic point of view the development of a mine in the Magdalen Islands could be detrimental to the tourists who would visit the islands.
(Mr. Bdchard.]
Tourism is a part of our economy and lasts two or three months of the year, but Magdalen Islands residents have to earn a living all year long. So the question is: Are the people from the islands opposed to the development of the salt mine? No, they are not. The opposition coming from the Magdalen Islands originates from a group of fishermen who are rightly wondering about the site which will be chosen as the harbour used to get the salt off the islands. It might have harmful effects on the lobster grounds, as I mentioned some time ago when I asked a question to the Minister of Fisheries and the Environment (Mr. LeBlanc) and to which the Prime Minister (Mr. Trudeau) gave me an answer.
I am therefore asking for a serious study to be undertaken, but I want to stress the fact that the people from the Magdalen Islands are not opposed to the development of that mine. On the contrary, it will represent a welcome boost to the economy of the islanders, given the present state of fisheries which is getting somewhat better. Such a development could allow a good many people from the Magdalen Islands to earn a living all year round and expect a sizeable income, not to mention other side effects that it may bring about.
The development of that mine depends on another important project in the continental Bonaventure riding which would create from two to three thousand new jobs in the area of Port Daniel. This is why I am making a request tonight to the Minister of Regional Economic Expansion while paying homage to him for the magnificent job he is doing for the country and for his province. That reminds me of the premier from that province who was complaining this week of the lack of consideration his province is getting, in his opinion-we saw that Premier slam the door, but any other attitude on the part of Mr. Levesque would have been surprising for when he comes to Ottawa, it is to laugh at people. He comes to laugh at the federal government because he has made up his mind, he has been a separatist since the November 15, 1976, election. He already considers Quebec as a separate state, so why should he not slam the doors? He comes here to make an act of presence and then drowses off, as it has been reported in some newspapers.
My request then to the Minister of Regional Economic Expansion is for him to continue his efforts in favour of the economic development of our province as he has done up to now and I am asking him to answer positively any requests that the government of Quebec might submit to him and particularly with regard to the issue in which I am interested, namely the assistance required for the development of the salt mine and any other industry which will come in addition to the development of that mine in the riding of Bonaventure, at Port Daniel.


Fred Alward McCain: Mr. Speaker, it is plain to be seen that the hon. gentleman from Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) has learned some of the courtesies of this House, unlike the hon. member for North-
February 16, 1978

umberland-Miramichi (Mr. Dionne). I compliment the hon, member for Bonaventure-Iles-de-la-Madeleine for his constructive and positive remarks on behalf of his constituency.
Let me say, Mr. Speaker, that the $100 million mentioned by the hon. member for Northumberland-Miramichi came from two sources: Fifty per cent came from the provincial treasuries and 50 per cent from that which was not to be paid out from the federal treasury in the subsidies to be sacrificed by the maritime treasuries, specifically transportation subsidies. Therefore, the $100 million does not cost the federal treasury one farthing in the long run, and that is not much to brag about, sir.
Secondly, that hon. member remembered that there was a premier by the name of Robichaud in the province of New Brunswick, and well he should, and as I do. But what he did not say or would not acknowledge was that when Mr. Hatfield became the premier of New Brunswick, the deal then in existence with the outgoing premier was no longer applicable to the province of New Brunswick and had to be renegotiated on terms imposed by Ottawa different from those which had been conceded to a Liberal premier, namely, Premier Robichaud. That does not make it sound very much like what the hon. member for Northumberland-Miramichi said, and that is why I was perhaps a little rude to you, Mr. Speaker, in trying to correct the record.
I want to be constructive in respect of the Atlantic area. Unlike the hon. member for Northumberland-Miramichi, I am interested in its wellbeing and its promotion. I am not interested in petty politics. I am interested in the things which can make the area great and become self-sustaining, and this can be done.
The area is rich in renewable resources and is primarily dependent upon them; that is, forestry, fishing and agriculture. The fishing industry under the direction of successive ministers in Ottawa has had its assets traded away in international agreements with no known return to any part of Canada in any way, shape or form. This resource was depleted in the reckless dealing which took place. We did not impose the 200-mile limit even as early as Iceland, and by the time we did it was almost a matter of locking the door after the horse was literally and completely stolen. There have been steps taken to try to reconstruct this in an eleventh hour repentance, I might add. There are a few things which I think can still be done.
We are losing a generation of fishermen by virtue of regulations in respect of licensing which have been imposed by the government of Canada. On behalf of the Atlantic area, I plead with this government to do one of two things; either restore the licensing privilege to inshore fishermen so that the sons of the present fishermen may also fish, or assess the impact of the renewal of these licences on the species of stock, and explain why they cannot do so.
Even though the catch of the handliner and other inshore fishermen is minuscule, because of the present price of fish this catch is important as a source of income for tens of hundreds
Regional Disparities
of Atlantic fishermen. It is important to restore the licensing fee, or measure the impact upon the stock and justify the restrictions which are presently in place. Perhaps some will not be liberalized, perhaps others can be. In any case, any relief would be helpful. I have proposed this on several occasions. I have asked for an official estimate of the impact, but I have received no answer.
The employment and income possibilities which the fishing industry presents is well worthy of federal investment. Though this is a time of austerity, it is not the time for austerity in investment. There is a difference. Investment in an industry with the potential of the fishing industry will furnish dividends to all Canadians. I am proposing more expenditure of the investment type. Failure to invest will express economic ignorance of the fishing fact. Boats, wharves and processing plants are becoming outmoded. All of these things require federal assistance for replacement. Neglect over the years has put the fishing industry in a dependent position. It can recover and pay dividends to Canada.
This applies as well to the fields of agriculture. Because of time constraints, I have to be extremely brief. In the field of agriculture, the Atlantic area is not self-sufficient in many of the products it is capable of producing. It is not self-sufficient in meat, butter, poultry products and grains. Perhaps it is a little over self-sufficient in the production of potatoes and apples.
The maritime provinces need research. One of the threats the department has held over agriculture in the Atlantic area is the withdrawal of freight rate subsidies on cereal grains. This subsidy goes on only from budget to budget. It cannot be withdrawn unless the livestock and poultry industries in Atlantic Canada fall dead, or until such time as there are alternative grains to grow on a viable basis. To date those grains have not been discovered.
I have pleaded with agriculture to try varieties from foreign sources, because the native varieties are not viable on the east coast. This is not being done. I have pleaded for research in the agricultural industry with respect to potatoes, grain, etc. This research could determine what the climate of the Atlantic provinces had to offer, and what would be required in engineering, farm buildings, farm storage, animal husbandry in the barns, poultry houses and hog pens. What may be applicable in Idaho, Maine or New York State does not necessarily lend itself to the climate of the Atlantic area. We require research into the storing of potatoes and the proper housing of livestock.
It is to this field that the Department of Agriculture and the government of Canada have not directed any attention. Research can help to make the Atlantic agricultural industry self-supporting. It requires leadership and investment. We cannot continue with the uncertainties of a budget to budget subsidy for feed and cereal grains, and at the same time fail to expand the research structure which is necessary. We must explore the world for varieties to find those which will grow viably in our country.
Forestry is perhaps the most important of all our renewable resources. Historically it has been plagued by fire, parasites

February 16, 1978
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and disease. Added to this in the last few years has been the economic impact of inflation, the high cost of money, high capital costs and increasing labour costs. No single one of the economic forces is totally to blame, but the industry finds itself in a position where it is difficult to compete in the international markets which are necessary for its prosperity.
For some 25 years the spruce and fir forests have been plagued by budworms. Initially the federal government recognized that it was a specific and isolated program which deserved support. It assisted financially for a short period of time, but research for an alternative was not commenced. That is the key: research to determine the specifics of prosperity in renewable resources. The province of New Brunswick was left to take all the environmental criticism aimed at it for spraying the budworm. The government had pictures in its files that it did not bother to show. Those were pictures of test plots which were not sprayed. As a result of that, there is not a live spill on a coniferous tree in those areas. Therefore, if spraying had not occurred, New Brunswick would have been as fiery red as the deadest tree.
The government did not indicate that there was no known way to control budworm other than by insecticide. The only ways it has evern been controlled is when the budworm eats itself out of house and home and starves to death, or is consumed by the fire which follows the devastation. But the government did not bother to inform the public of those facts. That is not fair to the Atlantic region. That area requires the support of the federal government in this regard.
The government has very gently, and not very effectively, advertised some of Canada's natural attractions. The hospitality of people in Atlantic Canada is unexcelled. Atlantic Canada is where the history of Canada was started. Canada was developed from east to west. Settlers arrived on the east coast for various reasons. Some were starved out of Ireland during the potato famine, some arrived as Quakers because they were unable to practise their religion in their native land.
There is an historic Indian campsite and battleground at Fort Meductic. There is adequate material available to establish a small museum there. Can the island where Champlain spent his first winter be found on a map depicting Canadian historic sites of interest? I do not think so. It is not on the map. The government has done a poor promotional job. If the government developed and expanded Canadian historic sites as part of its make work projects, thousands of tourists would be attracted to the Atlantic area. The opportunity is present. Does Canada want to fulfil its responsibility for developing these sites for the tourist industry?
Two things are necessary for income to be derived from renewable resources. First, there must be a fair trade policy. We cannot accept the position of the Tariff Board when it reported that it would reduce tariffs on potatoes and potato processed products imported into Canada to a level roughly equal to the tariff levied on the same products exported to the United States. Atlantic Canada requires a fair trade policy if agriculture, fisheries and forestry are to survive.

Second, we cannot accept the ever increasing rate of freight rates on products going out. This is particularly unacceptable when we find that the forest industry today is trucking its product from mills in New Brunswick across the border of the state of Maine, putting it on American railroads and shipping it at their freight rates at a saving to the industry. We must be competitive in U.S. markets, and when the freight rate is so far out of line that all goods must go across the CNR and the CPR over into Maine to be loaded on American lines, there is something wrong with our transportation policy.
The other day the minister laid the blame on the MacPher-son report. MacPherson put in a report years ago, but today the minister is responsible for policy and for freight rates, air traffic rates, ocean rates and ferry rates in Canada. That is his baby. But, like the Minister of Justice (Mr. Basford), the Postmaster General (Mr. Lamontagne) and all other ministers, he accepts no responsibility but rather finds a head on which to lay the blame.
We need positive action, as an investment in Atlantic Canada, in creating competitive and fair freight rates. The Prime Minister (Mr. Trudeau) went into the first ministers' conference without a single positive recommendation on what could be done for any part of Canada. I suggest that we should adjust our freight rates to a fair and competitive rate, have a policy of free trade, make an investment in our Atlantic ports, invest in our shipyards, and adjust our policy in respect of the export of energy, particularly as it relates to petroleum products. Because every refinery in eastern Canada, from Come-By-Chance to Saint John, New Brunswick, is subject to unfavourable regulations in respect of our exports of refined products, which are an important source of the revenue of virtually all refineries. But the Minister of Energy, Mines and Resources (Mr. Gillespie) has created regulations in respect of the export of any petroleum product from eastern Canada, so that from month to month and from year to year the products are exported on an unpromised renewable basis. We are now considered in the United States as another unreliable foreign source of energy.
I ask that we become a friendly and reliable source of energy so that the Atlantic area becomes a refining centre and a centre of employment and income for all of Canada. That does not exist there today. Let us expand our shipyards, let us get a merchant marine subsidized by the government, let us build our naval ships in Canada and expand our shipyards so that we can do that. I only wish time would permit a further expansion of positive ideas for the government because Atlantic people are proud people and we want the proper policies to make us self-supporting.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, being allowed the last five minutes is a dubious honour in this debate, but I would like to participate as a non-maritimer and point out several things which I think should be said. One of them is that many maritime members have spoken today of their individual problems in their individual ridings. Perhaps it
February 16, 1978

is good to have had a mini-throne speech debate-each of the members being first time members they can make that kind of speech-but it does indicate that one problem we have in Canada is having a large disadvantaged area which all Canadians wish to assist and which cannot be assisted by giving everybody everything they want.
For that reason 1 was particularly interested in the contributions of hon. members regarding the Department of Regional Economic Expansion. Government members said they appreciated the work which the minister had done, and opposition members said he has not done enough. DREE was set up to assist the disadvantaged regions in our country. Certainly northern Ontario should not have been left out, because although we are part of the richest province in Canada, the wealth has not rubbed off on northern Ontario. We still have many resources, but they have taken our wealth and given us very little in return.
This raises a problem which is quite self-evident. It seems to me the Minister of Regional Economic Expansion (Mr. Les-sard) will have to give consideration to making more effective use of his department and his officials. The many experts in his department should not try to make agreements with the provinces and the regions that satisfy solely the political ambitions of these provinces and regions. Rather the department should have enough scope and brain power to decide how best to spend the money provided in the area and how to make the longest term agreement which will produce the most advantage. Undoubtedly we want to help the maritimes. There is some doubt about Quebec, about whether we want to engage in long term projects there. Many of us want to see what will happen there before we do so, but that is not true of the maritimes.
We have had problems with the maritime provinces ever since they became part of confederation. Some of them may be solved and some may not. Many times they have been victims of what the hon. member for Northumberland-Miramichi (Mr. Dionne) and others have referred to as patronage. When the government changes, the minister must immediately negotiate a new DREE agreement with that province. I say nuts to that. We should spend our Canadian money in the most effective way so as to produce the most jobs.
I should like to point out one other problem which exists not only in the maritimes but also in my area. This afternoon I attended one of the committee meetings and listened to a discussion about Syncrude. The Minister of Energy, Mines and Resources said that Syncrude would not have existed had we not put money into it. If we put money into any DREE project, what excuse do we have for not taking equity in the industry we assist? In the provinces of Ontario and Quebec, or, for instance, in the Ottawa Valley a year or so ago, 50 per cent of the projects in which we put money went bankrupt. What did we do with our share of money which we put into equity? We did nothing with it. If we had had brains in the department we could have said that management was not operating properly. Management does not want to lose money and go
Adjournment Debate
bankrupt, but we could not assist them where assistance was absolutely necessary.
This is true all across the maritimes with regard to projects in which we become involved, such as the steel plant, the heavy water plant and the coal mines. In many cases we must give them more than money, we must give them the assistance of our federal and provincial experts. We should not be scared of acquiring equity. We are doing this in many other fields today where we know we will have to give additional assistance and advice. We have started many projects in the maritimes which have failed. They have failed because of the squabbling of the provincial government, the squabbling of the federal government and the squabbling between one region and another. The national government is big enough to provide assistance, direction and leadership, but all too often federal leadership is non-existent.


Mr. Deputy Speaker:: Order, please.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Douglas Charles Neil: Mr. Speaker, on January 30, as recorded at page 2394 of Hansard, I posed a question to the minister in charge of the Canadian Wheat Board asking him whether he was prepared to carry out a feasibility study to determine whether the Canadian government elevator facilities at Moose Jaw could be used to service the port of Churchill. I followed that question with a supplementary question to the Minister of Agriculture (Mr. Whelan) asking whether he had discussed with the minister in charge of the Canadian Wheat Board the feasibility of using the drying facilities at the Moose Jaw terminal to dry damp grain from the northern part of our province so that there could be sales for that grain.
Neither minister gave a satisfactory answer to my questions. In the Hall commission report it was recommended that a new government elevator be built at Yorkton. That elevator would be capable of cleaning and storing some 25 million to 30 million bushels of grain per year, which could be shipped to Churchill. The minister in charge of the Canadian Wheat Board subsequently appointed one Rod Bryden to do a study on the recommended Yorkton terminal, and although I have not seen the Bryden report, it is my understanding that it recommends against construction of such a terminal.
In view of the fact that the Moose Jaw terminal is only about 150 miles further from Churchill than Yorkton and that

February 16, 1978
Adjournment Debate
the elevator at Moose Jaw is capable of a throughput of some 30 million bushels of grain per annum-and that is grain cleaned to export standards, I might add-it seems to me that the Moose Jaw elevator could be utilized to service the port of Churchill. Unfortunately, the minister in charge of the Canadian Wheat Board would not undertake to carry out a feasibility study.
The Moose Jaw terminal has a capacity of about 5.5 million bushels. It has up to date cleaning and drying facilities and is capable of loading enough hopper cars in a 24-hour period to make up sufficient unit trains to load a one million bushel grain ship. Yet in the 17-year period from the fiscal year 1959-60 to the fiscal year 1975-76, car shipments from the terminal at Moose Jaw averaged less than 1,000 or, on the average, shipments of about two million bushels per year. Compare that with a possible throughput of 30 million bushels; approximately 7 per cent of the capacity. What a waste!
The annual reports of the Canadian Wheat Board over three crop years, 1973-74 to 1975-76 inclusive, show that demurrage charges in the three-year period totalled some $19,190,808. Admittedly, some of these charges were incurred as a result of rail strikes, derailments of trains or rock slides in the Fraser Valley, but in many instances they were incurred because the proper grade of grain was not available at the coastal terminals. These demurrage charges are a direct charge to the grain producer.
A ship does not suddenly turn up in a harbour looking for a load of grain. A ship is in transit for many days and sometimes for two or three weeks. Its estimated time of arrival at port must be known many days in advance by the Canadian Wheat Board. The estimated time of arrival would be changed only as a result of storms, which are predictable, and news of any delay would be transmitted by radio. If it is known in advance that a boat is coming and what grade of grain is required, and if the grain is not available in terminal position, why would it not be possible to utilize the facilities of a government inland terminal such as Moose Jaw to place the required grain in export position in a matter of a few days?
The Minister of Agriculture, in response to my supplementary question, states as follows:
We must also keep in mind that there is a private elevator system in the western provinces. This is a government elevator. If the hon. member is suggesting that we put it in direct competition with the private elevator system, he should suggest that and we will bring in an amendment to the bill immediately to allow just that.
While the private grain trade is interested in making its system pay, I am sure that the producer-owned companies are also interested in seeing that their producer members realize as high a price as possible for the grain that they sell. It seems to me that an elevator such as the Moose Jaw terminal, which has a capacity of 5'/2 million bushels, could be filled to capacity and grain shipped when it appeared that there might be a delay at a coastal terminal because of the lack of the proper grade of grain, and that a ship might have to wait in port with the resultant demurrage charges to the producer.

I know the employees of the government elevator in Moose Jaw. The are keen and anxious to work and are frustrated by the lack of utilization of their elevator. It seems a shame to me that the excellent facilities that are available there should be underutilized year by year when there could be a saving to the taxpayer and more money in the hands of the producers if the facilities were properly utilized.
I am sure that if the ministers who responded to my questions would sit down and discuss the use of the Moose Jaw terminal and other inland terminals, as I have suggested, with members of the producer-owned grain companies, some agreement could be arrived at. It is my belief that the officials of these grain companies are sincere and interested in putting as many dollars into the pockets of the western grain producers as is possible.


Donald Paul Wood: Mr. Speaker, unfortunately the Parliamentary Secretary to the Minister of Transport (Mr. Lapointe) had a previous commitment this evening so I am happy to reply to the hon. member for Moose Jaw (Mr. Neil.)
We are continually looking at all the ways in which we can improve the use of the port of Churchill. Before considering the economic feasibility of various proposals for collecting grain on the prairies that is destined for export via Churchill, we must make an assessment of several other matters. We must consider, for example, the relative rail costs of shipping grain to Churchill versus other ports. Maintaining a rail line over permafrost such as the line to Churchill poses difficult problems not experienced elsewhere in our grain handling system.
In our current program of rehabilitating prairie rail lines the federal government has allotted $1,610,000 to the line to Churchill. The work involved includes bank widening and drainage, rail relay and extending the sidings. It is likely that large sums of money will have to be spent on this line just to maintain its current capacity, let alone to increase it.
The government of Canada has also allotted significant sums of money to improving Churchill port facilities. In 1978, $5,575,000 in capital expenditures have been allocated to Churchill. This work includes scale automation and metrication, port lighting, winter berthing facilities, repairs and dredging.
In a period when we have limited amounts of capital to spend on upgrading our handling and transportation system, we must ask where our money will be most profitably spent. When one considers that the port of Vancouver can export as much in one month as Churchill does in a season, it becomes apparent that a careful analysis of the market potential for Churchill must be done before large capital expenditures are committed.
A careful economic assessment of this marketing route will have to be conducted. Although the port is closer to some of our European customers than Thunder Bay, insurance rates are higher while the shipping season is shorter.
February 16, 1978

It must be observed that the present system of primary elevators collecting grain on the prairies for Churchill has performed adequately. The port has approached its practical maximum capacity in each of the last two years. The elevators have done a good job and can be expected to be even more effective in the future as they continue to modernize their facilities. The government can also be expected to construct the necessary facilities to service the future needs of the port of Churchill.


SOCIAL SECURITY-DENIAL OF PENSIONS TO WIDOWS UNDER AGE 65-GOVERNMENT ACTION
Jack Marshall: Mr. Speaker, the question to which I address myself tonight concerns the spouse's allowance for those citizens who are given the opportunity to qualify for the old age pension at the age of 60 if their spouse is 65.
We have discussed regional disparities tonight, and we have discussed the situation regarding the five million poverty stricken Canadians in the country. Thus it is very difficult to understand the direction the government is taking regarding senior citizens who qualify for the pension on reaching the age of 65 years. If a spouse happens to be 60 years of age, he or she also qualifies. God forbid, though, if the spouse who is 65 dies at 66 and the other spouse is 61! Then he or she is completely cut off from the old age pension. Where is the reasoning for this in this supposed prosperous country of ours?
In my province that particular survivor has to revert to welfare. The amount of welfare could vary from $140 to $191 a month, depending on assets owned. However, the average fuel bill for a single family home-and I believe there are around 11,000 single family homes in Newfoundland-is from $60 to $120 a month, depending upon the condition of the home.
Let me read a letter from a senior citizen to give the House an example. This letter is from a lady who is 64 years of age.
I am writing to you with another problem. 1 worked as a gas attendant right up until July, 1976 when I reached the age of 64 years. I filed for my unemployment, but did not receive any moneys until the middle of September. I then sent a form in to St. John's for my spouse's allowance and all I got a month (spouse's allowance) was $36 a month-
Now, Mr. Speaker, here is a person 64 years of age working as a gas attendant in order to earn extra income to provide the basic necessities of life. She was turned down, and I have since learned that she was refused. But this is the situation that exists. It is difficult to understand. I am sure that every member in this House, other than the particular minister responsible, will recognize this is a glaring inequity. I am pleased to collaborate with my colleague, the hon. member for Winnipeg North Centre (Mr. Knowles), who has the same concerns as I about this matter.
Hopefully the very capable hon. member who is to reply will impress upon his caucus, or through other means which are available to him, this extremely serious plight of our pension-
Adjournment Debate
ers. Let me quote some words of Benjamin Disraeli which are apropos to this situation. They appeared in the National Enquirer.
Two nations, between whom there is no intercourse and no sympathy; who are as ignorant of each other's habits, thoughts and feelings as if they were dwellers in different zones, or inhabitants of different planets; who are formed by different breeding, are fed by different food, are ordered by different manners, and are not governed by the same laws-the rich and the poor.
I ask the parliamentary secretary who will reply that some consideration be given to those people who, through no fault of their own, cannot manage with the high cost of living. I hope we can impress upon the government in this session the needs of those who depend on us to help them.


Mr. Frank Maine (Parliamentary Secretary to Minister of Public Works and Minister of State for Science and Technology):: Mr. Speaker, whereas I am very sympathetic to the problem described by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall), I must report that the spouse's allowance was introduced because the government of Canada recognized the plight faced by many older couples trying to manage on only one pension. To help these couples, the government now provides a spouse's allowance to a person 60 to 64 years of age whose spouse is receiving an old age security pension. The amount of this allowance varies according to the other income of the retired couple, and for couples with substantial income, no such allowance is payable.
A spouse's allowance ceases when the pensioner dies. It has been argued that once a spouse qualifies for the spouse's allowance, it should be paid until that spouse qualifies for the old age security pension in his or her own right, to avoid hardship that would arise from terminating the allowance on the death of the pensioner. However, it would be difficult to explain in the case of a pensioner's death why his or her surviving spouse would continue to receive the spouse's allowance, whereas other surviving spouses who never qualified for the allowance are denied it.
The spouse's allowance is also terminated when the spouses separate, is suspended if either or both spouses leave Canada for a period greater than six months, or if either spouse is imprisoned for longer than 90 days. Essentially, the spouse's allowance is paid when the couple are living together on the same income. When these circumstances no longer apply, the allowance is either terminated or suspended.
The spouse's allowance is not available to widowed, single, divorced or separated persons in the 60 or 64 years age range. If the allowance had been made more generally available, this would have, in effect, led to a general reduction of the retirement age in Canada from 65 to 60, and it was not felt that the country could afford such a reduction. Therefore, it was decided that this program should deal with the one specific problem, so that older married couples, with one spouse already on pension, could meet their financial requirements through the old age security program rather than through other programs such as the Canada Assistance Plan.
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February 16, 1978
Adjournment Debate


SOCIAL SECURITY-SUGGESTED PROVISION OF PENSIONS FOR PERSONS IN NEED BETWEEN AGES 60 AND 65
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, if my opening sentence is one of criticism, I should like to make it clear that it is not directed to either of the two parliamentary secretaries who are here tonight. I must point out that in my view the practice is developing, almost to the point of abuse, of ministers not being here to respond to questions on the late show; and too often it is not even the minister's parliamentary secretary but some other parliamentary secretary who is called on to do the job. That is not a criticism of either of the two Liberals who adorn the government benches tonight, but I hope the point will be noted.
My question is in the same area as the one dealt with by my friend, the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). It was asked on Monday, November 28, and appears at page 1291 of Hansard for that date. The gist of the question was in these words:
In view of the growing number of persons between 60 and 65 years of age, most of them spinsters and widows, who express utter disbelief that there is an allowance for spouses but nothing for persons of single status, will the minister take the necessary steps to see that an equivalent allowance is made available to all persons between the ages of 60 and 65 who need it, regardless of their marital status?
The Minister of National Health and Welfare (Miss Begin) gave me an answer which indicated that she understood the question. However, the best she gave me was an assurance that the whole matter, and even more than that, was being studied.
Like the hon. member for Humber-St. George's-St. Barbe, I am not at all satisfied with the answer the parliamentary secretary gave to my hon. friend's question. But I will say for him that he did repeat the basis upon which the spouse's allowance was introduced, as stated at that time by the government. He said the whole philosophy was that the government had realized that two persons could not live on one pension. So the government said that where one spouse was over 65 and the other one was between 60 and 65, it would provide two pensions.
We agreed then, and we agree now, that two persons cannot live on one pension. But we asked then, and we ask now: If the government agrees that two people cannot live on one pension, how does it think one person can live on no pension at all? It is usually women between 60 and 65 who get no pension, because they are in that age bracket and are single or widowed. Yet if they happened to have a husband who was over 65, they would get it.
We still feel that basing the spouse's allowance on the basis of marital status is unfair. The parliamentary secretary is quite right when he says that some of the things we advocate would seem to open the door to lowering the pensionable age to 60. Mr. Speaker, I have been trying to push that door open for some time and I shall keep on trying to do so. But until we reach that point I stress that the present system is grossly unfair, especially to women.
The government talks about this legislation being equal. It is defined as for the spouse. You get it whether you are a female or a male spouse. Nevertheless, in our culture most wives are younger than their husbands, and when we look at the employment picture we find that most of the single persons between 60 and 65 who are getting no allowance are women. Most of those who find their allowance cut off because the older spouse has died are also women. The letter of sympathy which the department sends out is one of those "either/or" documents which apply whether it is sent to a widow or a widower.
I am not pleading tonight for an overall program. I shall do that on another occasion. I want the pensionable age to be brought down to 60, but I am pleading that in the meantime the government should not be so unfair to single women and to widows. People who encounter this legislation for the first time ask me: Is it possible? How could parliament ever have passed a bill which provides for an allowance to the spouse of an older person but not to a woman in the same age bracket who has no spouse?
The parliamentary secretary came up with another argument-and I agree with him-that to continue a payment to the spouse who has been receiving it and who has become a widow raises the question: What about the woman who is a widow over the age of 60 and who never got it? In my view, this underlines the justice of my whole case-that all women in that bracket who need an allowance should get it regardless of their marital status.
The parliamentary secretary is looking at me, saying he knows what 1 think. He is right. I want to see the pension paid at age 60 to all persons out of the labour market. But at this stage I think those who need it between 60 and 65, women in particular, should get it without regard to marital status.
I hope the parliamentary secretary will take this matter up with the minister, who is a woman herself. Surely there is someone over there with the heart and the compassion to deal with this issue.


Francis William (Frank) Maine: Mr. Speaker, I am sure there is the heart and the compassion. There is just not the money.
The hon. member has asked about the possibility of providing a benefit on the same basis as the spouse's allowance to those persons between 60 and 65 years of age who do not qualify for the allowance because they are not the spouse of an old age security pensioner. The Minister of National Health and Welfare (Miss Begin) has earlier expressed her sympathy and concern for this group of people. As she said, the department is in the process of examining the priorities which must be set when determining where the limited funds available for groups of Canadians in vulnerable situations should be allocated.
It may be of interest to the hon. member that current estimates suggest that the cost of providing a benefit equiva-

February 16, 1978

lent to the income-tested spouse's allowance for all persons in the 60 to 64 age group, as he suggested, would be approximately $635 million in the first year alone. This would be in addition to the cost of the current spouse's allowance benefit, and would be five times the present expenditures on this allowance.
The department advises me that the spouse's allowance was introduced to cover the situation of married couples with little or no other income who were trying to get by on the single pension. It was considered appropriate to use the spouse's allowance for cases like this, because the married couple already had a connection with the old age security program through the one spouse who had reached retirement age.
It is recognized that many other people in the age range 60 to 65 have need for income assistance also. However, it was considered that these needs would be met through another program, the Canada Assistance Plan, under which the government of Canada shares in the cost of income support granted to people in need under the general assistance program of each province.


Stanley Howard Knowles: Welfare.
Adjournment Debate


Francis William (Frank) Maine: Of course, when these people reach age 65, they too normally become eligible for the old age security program.
Possibilities for improving income support programs are under review by the federal and provincial governments. The government of Canada is also studying possibilities for providing some form of income supplementation to Canadians who are working at inadequate levels of income. Program changes along these lines may lead eventually to improvements in the income security system for Canadians in the 60 to 64 age range, as well as for other Canadians in vulnerable circumstances. In the meantime, the existing provisions of the Canada Assistance Plan will continue to operate.
In other words, it is our intent to meet the income needs of people under one program or the other, hopefully as effectively as possible.


Stanley Howard Knowles: When does "eventually" come?


Mr. Deputy Speaker:: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly this House stands adjourned until tomorrow at 11 a.m.
Motion agreed to and the House adjourned at 10.28 p.m.
80031-46y2

Friday, February 17, 1978