1978-03-03

ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, 1 rise under the provisions of Standing Order 43 and ask for the unanimous consent of the House to move a motion relating to a matter of urgent and pressing necessity.
Considering on the one hand the very large number of projects presented under the Young Canada Works program and, on the other hand, the insufficient funds provided for this program; given the high rate of unemployment and since the private sector is incapable of creating summer jobs for all students, I move, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That the House urge the government to increase the funds earmarked for the Young Canada Works Program in order to subsidize a larger number of projects.


Mr. Speaker:: Order, please. The House has heard the hon. member's motion. Pursuant to the provisions of Standing Order 43, this motion can be debated only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, under the provisions of Standing Order 43 1 would like to present a motion of urgent and pressing necessity. In view of the increasing tension, as evidenced by the demonstration on Parliament Hill today, in the long drawn-out contract negotiations between the government of Canada and the Canadian Union of
Postal Workers which threatens further work stoppages in the Post Office, and the growing demand for action by members of parliament from both sides of the House, including government members, as evidenced by a question directed to the Prime Minister (Mr. Trudeau) by the hon. member for Van-couver-Kingsway (Mrs. Holt) on February 23, 1 move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That the government set up immediately a special committee of parliament to investigate the Post Office to bring in recommendations for solutions and, in particular, to consider the advisability of converting Canada Post to a Crown corporation.


Mr. Speaker:: The presentation of such a motion, pursuant to Standing Order 43, requires the unanimous consent of the House. 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 to move a motion of urgent necessity and national significance. The Ottawa Journal of March 2 quotes Mr. Al Johnson, president of Canadian Broadcasting Corporation, as having said before the Task Force on Canadian Unity: "I believe the Canadian people are not searching for absolute truth in the news media". That would be a futile search. I therefore move, seconded by the hon. member for Madawaska-Victoria (Mr. Corbin):
That this House, through Mr. Speaker, inform the president of the CBC that the people of Canada are intelligent and sophisticated enough to make their own decisions if the CBC and other news media provide them with the facts, and that he show more respect for the intelligence and judgment of Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

March 3, 1978
Oral Questions


PRIVILEGE
Mr. Speaker:: Order, please. Before beginning the oral question period, and because it might influence questions put during the question period, I might take a moment to indicate that since yesterday's rather extensive discussion I had conversations this morning both with the hon. member for Leeds (Mr. Cossitt) and with the Solicitor General (Mr. Blais).
I am happy to advise the House that the matter appears to be resolved in the following way. Pursuant to the undertaking that was given to the House yesterday by the hon. member for Leeds, which he repeated to me in respect of the safekeeping of the document or documents, that they would not be moved or touched or used in any way during the course of the weekend, and that while it will be necessary for the Solicitor General to serve the hon. member with a document of some sort, pursuant to the Official Secrets Act, and that having been done some time today, the matter will stand in abeyance until Monday morning.
This will permit the hon. member for Leeds to pursue legal advice which he began yesterday. But, reasonably, having found a solicitor who is expert in these matters, the solicitor requires some time to properly advise the hon. member for Leeds after service of the document by the Solicitor General under the Official Secrets Act. The matter will stand in abeyance until Monday morning so that the hon. member for Leeds can communicate to the Solicitor General or to me the position he proposes to take in respect of it.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Needless to say, 1 should like to thank both hon. members and the House for their extensive contributions yesterday to a most important, fundamental matter and to a very vigorous and useful discussion. This will form part of our deliberations, no matter how this question is resolved. I want to thank all members who co-operated throughout in this rather difficult matter.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, 1 have a question for the Minister of Finance. Yesterday, the minister issued a press release announcing the intention of the government of Canada to go to the United States on a

borrowing venture. What is surprising about that is the amount of money the government proposes to borrow.
As the minister must surely know, if we wanted to maintain our traditional reserves in United States dollars, we would need to borrow almost $5 billion U.S. Can the minister tell the House why he is seeking to borrow only the token amount of $750 million, in light of what has happened to the Canadian dollar?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, we decided that was the appropriate amount of money to borrow, in the circumstances.


Charles Joseph Clark: A supplementary question, Mr. Speaker. My question was why this amount was decided upon. There is a very real question about whether the decisions that this minister calls appropriate are appropriate in fact. 1 should like to ask the minister whether he considered indulging in the normal practice of trying to place this proposed issue privately, and whether he was turned down. I should also like the minister to tell the House whether the original request was for a larger amount than $750 million.


Joseph Jacques Jean Chrétien: Mr. Speaker, we had both options, and we decided to go public. The amount was the amount discussed between my agent, the governor of the Bank of Canada, and the institutions. It is a public issue. More details will be made public later on.


Charles Joseph Clark: Once again, the minister did not answer the question, Mr. Speaker. He said they had both options. My question was whether they decided to go public because they were turned down privately. I hope the minister can address himself to that question. Since he has made this decision to go to the Securities and Exchange Commission of the United States, he must surely know it will be necessary for the government of Canada to file a registration statement with the SEC. This will mean the Minister of Finance is proposing to give the Securities and Exchange Commission of another country more information about our economic situation than he is giving the House of Commons of Canada.
Will the minister give us a commitment now that he will file on the floor of the House of Commons and make available to the people of Canada exactly the same information he is going to make available to an agency of another government, before he makes that public declaration to the SEC?


Joseph Jacques Jean Chrétien: Mr. Speaker, 1 knew I had to file a prospectus like any other institution that goes to the American market. I was aware of it and I have no problem with it at all. 1 think the story we can tell about Canada is a very good one. When I said I had the two options, I hoped the hon. member would have realized that when you have an option you can choose either way. We decided to go public. We were not turned down on a private placement, but we felt it was better in the present situation to go public.
March 3, 1978


Charles Joseph Clark: Mr. Speaker, will the Minister of Finance tell us what reasoning led the government of Canada to take the quite unusual step of going public in this matter, rather than making a private borrowing? It may be unprecedented-I have not had a chance to check the record-but why did the government of Canada choose that option, rather than the more normal option?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have chosen that avenue because we thought is was the best at the moment. If we make a private investment, our options are more limited. We wanted to have different blocks of bonds over various periods of time and we thought it would be easier to operate this way because the investments will thus be more diversified than if they were invested in one or two American institutions.
I also would like to add, with leave of the House, that the interest rates are generally better when one goes public.


GOVERNMENT INTENTIONS RESPECTING FUTURE BORROWINGS
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. Bearing in mind that we have lost about $750 million in United States reserves since the end of January, and the minister has indicated he is only proposing to borrow $750 million in the United States market, would the minister indicate if they intend to borrow still more in some future month?


Joseph Jacques Jean Chrétien: Mr. Speaker, when we decide to borrow more, if we decide to borrow more, I will be glad to advise the public and the House of Commons.


Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is directed to the Minister of Finance. Bearing in mind that it is widely speculated that the dollar may go still lower, with the faint effort put forth by the government in raising foreign funds, bearing in mind that the inflationary impact of the falling dollar is much more severe in Canada than it is in the United States, and bearing in mind that our dollar has fallen 31 per cent in relation to the Japanese yen since October 20, 1976, and 28 per cent in terms of the West German deut-schemark, for example, would the minister indicate if he still believes that he will achieve a 6 per cent inflation rate in the current year, bearing in mind the heavy inflationary impact his falling dollar is going to have on Canada?


Joseph Jacques Jean Chrétien: Mr. Speaker, I think there is some problem, when the Canadian dollar loses some value, in terms of imports. Imports are increasing, costs are increasing, and it could put some pressure on inflation; I recognize that. But I am not advised to change the forecast for the end of the year. At the same time, I would like to report to the hon. member that 1 receive telephone calls and telegrams every day from many manufacturers in Ontario who tell me that they like the dollar the way it is at present, because the export position of Canada is improving considerably.
Oral Questions


Sinclair McKnight Stevens: Mr. Speaker, my final supplementary question is directed to the Minister of Finance. Bearing in mind the consequences of our falling dollar, and bearing in mind that any foreign funds the minister may borrow is simply stalling the inevitable, would the minister indicate what concrete proposals he intends to put before this House to reduce the balance of payment deficit which this country is incurring? By the end of the year it will be $20 billion that we have lost in foreign exchange. What does the minister propose to do to end this steady outflow of our funds?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, we have a floating dollar at present and the level of the dollar is determined by the market. Our interventions in February were made to ensure an orderly floating of the dollar, since it is the responsibility of the Governor of the Bank Canada to do so, and the value of the dollar is fluctuating. We do not know exactly at what level the dollar should be. The market will determine that. The hon. member is always giving the impression that we have huge losses when we are losing American dollars in our reserves but at the same time, we are improving our own liquid assets as it is possible that we will be borrowing less on the Canadian market if we borrow on the American market. I wish the hon. member would not give the impression that we are losing $700 million, because such is not the case. We have exchanged American dollars for Canadian dollars.


INVESTMENT AND JOB-CREATION PROGRAMS TO IMPROVE ECONOMY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Finance. Considering that the steady decline in the value of the Canadian dollar is due to circumstances here, as it is due to circumstances in other countries that are badly managed, namely, an economy that is persistently bad in terms of the rate of inflation and one that has more than one million unemployed, can the minister tell us why he took the $750 million, costly step that he has taken, instead of bringing forward measures that would lead to higher levels of investment and more job creation in the Canadian economy? Surely that is what the Canadian economy is looking for.


Joseph Jacques Jean Chrétien: Mr. Speaker, we presented a budget on October 20, 1977.


An hon. Member:: What budget?


Joseph Jacques Jean Chrétien: Or, if hon. members prefer, a mini-budget or economic statement; I am not fussy about words. I have stated the tax incentives we have given to Canadian taxpayers. We have cut taxes for individuals to the tune of more than $2 billion since the beginning of the year and $900 million for corporations. These are the most stimulative economic policies put forward by any western country.

March 3, 1978
Oral Questions


Some hon. Members:: Oh, oh!


John Edward Broadbent: Mr. Speaker, the minister knows that the reports produced by Statistics Canada on Friday of last week and on Monday of this week flatly contradict all the predictions made at the time of his mini-budget last fall, and all the predictions he made in documents for the first ministers' conference. If current investment patterns and job creation patterns are not borne out the way the minister forecast, as a result of the measures he has taken, why does he not have enough common sense to announce changes in those measures now, in order to get the economy moving?


Joseph Jacques Jean Chrétien: If the hon. member will check what I said in my statement of October 20, he will see that what I predicted for the full year 1977 was less than the end result published on Monday. I said on Tuesday that I was disappointed with the last quarter report of Statistics Canada. However, I was not the only one who anticipated a very strong quarter. A few hours ago 1 had a discussion with a private group which has a good reputation in Canada. Mr. De Cotret of the Conference Board had in his predictions forecast 1.2 or 1.3 for the third quarter. They are puzzled, as are many other experts in this field, with the end result for the fourth quarter. In speaking with the retail business sector, the prediction was that all indications were very good for the fourth quarter.


Sinclair McKnight Stevens: But you were wrong.


Joseph Jacques Jean Chrétien: The private sector made the same forecast as the government. The end results were disappointing. Even the hon. member has stated that Statistics Canada can make some adjustment after reviewing their first round of calculations. 1 say that the predictions I made in October for the year 1977 were exactly the same as those shown on Monday.


John Edward Broadbent: Mr. Speaker, only the minister's colleagues and backbenchers could believe that bundle of nonsense he has just come out with.


Some hon. Members:: Hear, hear!


John Edward Broadbent: The central requirement of an economy that is going to grow is an investment pattern. The minister predicted less than three weeks ago, just days before the first ministers' conference, that we had to have a 7 per cent investment rate increase in the coming year. Statistics Canada shows it is likely to be a negative 3 per cent. In light of the figures produced yesterday, which disclosed there are only 32,000 jobs available in Canada for the more than 1 Vi million looking for them, will the minister immediately bring in measures to stimulate growth in the economy, instead of waiting in cynical fashion for the election campaign to make an announcement which ought to be made now?


Joseph Jacques Jean Chrétien: If the hon. member would check the record, he would find that at the conference of first ministers we recognized that growth for 1978 was not predicted to be

extremely good. That is why we undertook, with the provinces, to push forward big projects in the energy field. And, of course, there is the pipeline which will come very soon if the bill is passed in the House of Commons. We have taken a great many initiatives in terms of the creation of activity in the immediate future. At least the Premier of Saskatchewan is smarter than the leader of the NDP has shown himself to be in the House.

[ Translation]


MANPOWER
Joseph Adrien Henri Lambert: Mr. Speaker, I should like to direct a question to the Minister of Employment and Immigration.
In view of the fact that the time limit for submitting projects under the Young Canada Works program was February 17, could the minister advise the House whether he is aware of the number of projects which have been submitted this year? If so, is this number greater than the number of projects submitted last year? Also, by how many millions of dollars would the funds required exceed the credits currently earmarked for this program?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, our Young Canada Works program was tremendously successful last year and so it is again this year. 1 do not have the figures the hon. member is seeking, but I shall obtain them for him.


Joseph Adrien Henri Lambert: Mr. Speaker, I have a supplementary question.
Since the minister is aware that this program has been quite successful for many years, I should like to call his attention to the fact that, in my own riding at least, the number of projects submitted has doubled this year, which is an indication of its popularity. However, the credits available being inadequate, could the minister advise the House whether he will recommend increasing the funds earmarked for this program, so that many more students may secure employment for the summer?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I am grateful to the hon. member for his representations.


INQUIRY WHETHER STUDENT EMPLOYMENT PROGRAM AVAILABLE IN ALL PROVINCES
Joseph Adrien Henri Lambert: Mr. Speaker, I have a supplementary question. Can the minister tell the House whether there is a student program in all provinces of Canada? If so, is this program consistent with the federal program so as
March 3, 1978

to increase employment opportunities for students during the summer?


Jack Sydney George (Bud) Cullen: Mr. Speaker, in most provinces we obtain the greatest co-operation from provincial authorities to promote youth employment during the summer.


THE CANADIAN ECONOMY
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is directed to the Minister of Finance. The hon. gentleman suggested a moment ago that the figures on which economic policy in this country has been based are wrong. Is it not prudent-indeed, is it not essential-today, particularly when we propose to borrow large sums of money from the United States, that the minister bring in a budget based on the realities which are now confronting us?


Joseph Jacques Jean Chrétien: The hon. gentleman should realize that before we bring in a budget we should wait to see the effect of the measures which were taken only two months ago. We have stimulated the economy to the tune of $3 billion, starting January 1, 1978. If the hon. member is advocating that we should stimulate it still further, he should not encourage his colleagues to get up in the House and complain that we are running too big a deficit. This is the type of thing I have heard in the House so many times. In 19771978 we have to cope with a deficit of $8.5 billion.


An hon. Member:: It is $10 billion.


Joseph Jacques Jean Chrétien: We are taking an extremely stimulative stance. We went further, starting in 1978. I am sure the hon. member will want to know exactly, in a few more weeks or months before we move again. We had a budget at the end of October.


Charles Joseph Clark: That was not a budget.


Joseph Jacques Jean Chrétien: We will have a budget after we see the results of the stimulation we have given to the economy for 1978.


James McPhail Gillies: Mr. Speaker, I appreciate what the Minister of Finance has said. 1 am sure he will recognize, as most people in Canada recognize, that economic policies are an integrated set of propositions and that some of the results will be incorrect. It is quite apparent that the level of inflation which will take place in this country is quite different from the minister's forecast. I should like to ask him very specifically: what exchange rate was used in calculating what the level of inflation would be by the end of this year?
Oral Questions


Joseph Jacques Jean Chrétien: Mr. Speaker, I replied to this question many times in committee. I think the assumptions made during preparation of the forecast do not have to be changed at this time. An hon. member of the NDP asked me for a prediction respecting growth in 1977. In a statement I made in October I said that growth would be around 2 per cent: I will check the record and report back, but it was less than 2.6 per cent. Thus, I do not have to change my prediction at this moment. In the last month the dollar has not changed much; it was 90.13 cents at the beginning of February and it it 89.33 cents now. We have lost only one point. That is not enough to change our prediction.


Mr. McGrath:: What's a couple of points?


Joseph Jacques Jean Chrétien: I think we are in a very complicated situation, but there is no reason to change the prediction we have made. One problem we are faced with is that while we have been able to convince the various premiers across the land that we must co-ordinate our economic policies-and they agreed-it is only the opposition in the House of Commons that is promoting doom and gloom propositions all the time.


James McPhail Gillies: Mr. Speaker, the Minister of Finance knows very well that in committee he would never say what the basic assumptions were on which the economic forecasts were made: he never made that clear. I would ask the minister, did they make their assumptions on inflation rates and growth in the economy based on the 90-cent dollar?


Joseph Jacques Jean Chrétien: Mr. Speaker, what the hon. member is in fact asking is whether we have decided to peg the Canadian dollar. There is no fixed rate that we have in mind for the dollar. We are floating the dollar and the economic situation will adjust accordingly. When you are floating the dollar, you cannot tag very precisely what will be the level of the dollar during a year.


LABOUR CONDITIONS
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, not only is the Canadian dollar declining, but the opportunities for employment in this country are declining more rapidly every day.
My question is of grave importance. It is for the Minister of Labour and arises as a result of a wire 1 received from the president of District 26 of the United Mine Workers of America, Mr. William Marsh. It concerns the announcement of the closure of the new Prince coal mine on Cape Breton Island and the loss of 300 jobs. Is the minister prepared to meet with the president and his executive-they are prepared to meet with the minister in Ottawa at a moment's notice-to see what can be done? Previously, the minister has been most co-operative on matters of this nature regarding safety, and so

March 3, 1978
Oral Questions
on. He has worked with myself previously and with the union on a series of matters.
This situation comes on the heels of the announcement by the Iron Ore Company of Canada, in Labrador City, of a loss of 350 jobs, and the linerboard plant in Newfoundland with a loss of 2,100 jobs. How soon can the minister meet with the executive of the United Mine Workers of America in order to discuss this very important situation?


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, I appreciate the hon. member giving me notice of his question. I have also received a wire from Mr. William Marsh, president of the United Mine Workers of America. Most certainly, I am prepared to meet with him at the earliest possible opportunity. My office is letting him know that right now. 1 would be pleased to have the hon. member for Cape Breton-The Sydneys there, and other hon. members involved, if they desire to attend.


REGIONAL ECONOMIC EXPANSION
Robert Muir: Mr. Speaker, my question is directed to the hon. Minister of Regional Economic Expansion who reports to the House for the Cape Breton Development Corporation. Is he, also, prepared to meet with the United Mine Workers of America as soon as possible in order to ascertain if there is not some way this mine can be kept in operation? It involves approximately 300 employees. God knows what they are going to do. The situation is very serious. Every day we hear announcements of unemployment, unemployment and lay-offs. Is the minister prepared to meet with the union tomorrow? They will come to Ottawa tomorrow, or Sunday, and meet with him if he wishes.


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, the decision to close, as the hon. member referred to it, has not been taken in the sense he alluded to. The people are not going to be laid off. What the situation needs, as the hon. member already knows, is the question of security, first, and also the question of the very high cost which is involved right now in trying to mine the coal with the present system at the new Prince mine. An alternative to the present system of mining this coal is now being contemplated. Obviously, we will look for a different system of reaching the coal. We might have to go deeper, implement a safer system and a less costly one.
To attain a regular standard of security in the present system, we are required to work at a very high cost of operation, which makes the entire operation not viable. We intend to keep all the workers at work, but they will not necessarily be involved in the same operations as they are now. I understand all of them will be retained at work, but they will be doing different work in different places for some time until
[Mr. Muir.l
the present difficulties in the pillar and wall system, which is in operation, have been resolved.
[ Translation]


QUEBEC-REQUEST FOR PROGRESS REPORT ON NEGOTIATIONS FOR EXPANSION OF TOURISM
Mr. Alexandre Cyr (Gaspe):: Mr. Speaker, my question is directed to the Minister of Regional Economic Expansion. Many representations from hon. members have been made to the minister for launching a program to stimulate the tourist industry in the province of Quebec, particularly in the Gaspe area. Would he tell the House whether he is still negotiating a subagreement with the province of Quebec for developing the tourist industry in that province and more specifically in the Gaspe area?


Marcel Lessard: Yes, Mr. Speaker, we are still negotiating and as I indicated a few weeks ago when I was in Quebec City, we hope to be able to finalize those negotiations soon and ratify this agreement which is very important as hon. members know already, since some of them have been consulted and informed to some extent of the promising results which could be achieved through this proposal. So, I hope we will be able to sign this agreement during the coming weeks.


NATIONAL SECURITY
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question is directed to the Solicitor General, who confirmed yesterday the accuracy of certain statements regarding foreign intelligence activities in Canada. One such statement was made in the House on February 21, to the effect that 28 out of 61 Soviet officials in Canada were engaged in intelligence activities. Of course, we know that 13 of these Soviet nationals were expelled. With regard to the remainder, who allegedly continue to be engaged in intelligence activities in Canada, can the Solicitor General tell the House how long he or his predecessor knew about this, and what action they have taken?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, the matter has not been changed: the nature of the replies I made previously is not going to change as a result of the events which occurred yesterday. I am sure the hon. member recognizes that, indeed, matters of national security are not subject to public comment, no more today than they were yesterday or the day before.
I regret having had to pursue the matter in the way it was pursued yesterday, because in fact even that was detrimental
March 3, 1978

to the question of national security. I did it in that way in order to be helpful to the hon. member for Leeds. I am not in any way going to be commenting on the question put to me by the hon. gentleman.


ISSUANCE OF TRAVEL PERMITS TO SOVIET INTELLIGENCE AGENTS IN CANADA
William Herbert Jarvis: Mr. Speaker, I should like to ask the Solicitor General about travel permits issued to Soviet intelligence agents. This question has absolutely nothing to do with national security in the context in which the minister just put it. Does it remain the policy of this government to continue to issue travel permits to Soviet nationals whom the Solicitor General, on the basis of information received from his security forces, has reasonable and probable grounds to believe are members of the KGB or some other foreign intelligence unit? Is that the continuing policy of this government?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, if I recall correctly, that question was asked of the Secretary of State for External Affairs and a full reply was made at the time.


ACTION OF GOVERNMENT TO EXPEL SOVIET SUBVERSIVE AGENTS IN CANADA
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a supplementary question for the Solicitor General. By his own statement, there are 15 nationals of the Soviet Union here in Canada acting against the interests of national security in a subversive fashion. Is he taking any action, or is his government, to expel those 15 subversives who are still conducting such activities, by the minister's own statement?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, the hon. member refers to information that was made public by the hon. member for Leeds.


An hon. Member:: No, that was your information.


Mr. Blais:: The hon. gentleman from Leeds did not indicate when that information was compiled or whether, indeed, that situation has since changed. That, surely, is not a question the hon. member wants me to comment on.


Erik Nielsen: Mr. Speaker, I am referring to the minister's own statement, not in respect of any event that occurred yesterday involving the hon. member for Leeds. It was his statement that there are still 15 such agents in Canada, after the expulsion of 13. By simple arithmetic, if we deduct 13 from the 28 whom the minister said were here, that leaves 15. It is those 15 I am asking about. What action is the government going to take in respect of their expulsion, if they are engaged, as he says, in subversive activities?


Jean-Jacques Blais: I cannot recall ever having made that statement, Mr. Speaker.
Oral Questions


WARREN HART-INQUIRY AS TO RECRUITMENT FOR INTELLIGENCE WORK IN CANADA
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, this is a matter that is supplementary, in that it involves the security of other countries. When will the Solicitor General know the complete story of who arranged the recruitment of FBI operative, Warren Hart, whose bureau number was S4- in case there is any doubt as to what his connection was- and who arranged for him to come to Canada, keeping in mind that his file was red-flagged and inquiries and information went directly to the PMO?


Hon.   J.-J. Blais@Solicitor General: Soon, Mr. Speaker.


Elmer MacIntosh MacKay: Who authorized this man, Mr. Speaker-and I direct this question to the same minister-to make forays into the Caribbean, not only to infiltrate but to train revolutionaries, a seeming contravention of this country's stated policy of non-offensive intelligence operations? Was the House misled or is it our policy to conduct offensive intelligence operations in areas where we have a legitimate sphere of influence?


Jean-Jacques Blais: Mr. Speaker, I have indicated to the House before that there is no policy of offensive intelligence-gathering. I maintain that position. I told the hon. gentleman that the information I had received to date would indicate that this policy has not been infringed. I am getting additional information, and 1 have indicated to the hon. gentleman that I will provide him with that information when it is available.


Elmer MacIntosh MacKay: Mr. Speaker, I say to the minister that sending a trained agent to another sovereign state to train revolutionaries sounds rather offensive to me. Does the minister not agree with that?


Jean-Jacques Blais: Mr. Speaker, the hon. gentleman makes an allegation that we are dealing with a trained agent. The hon. gentleman fully knows that the role of Mr. Hart was always that of a source and never that of a trained agent.


TRANSPORT
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, my question is for the Minister of Transport. I have given him notice of it. Can he explain the delay in cabinet reaching a decision on the future of the Canadian ship canal at Sault Ste. Marie? Is it because new evidence has been drawn to the attention of the minister, namely, that a significant increase in western coal shipments through the locks contradicts the minister's assumption that there will be no capacity problems until after 1995 and, therefore, a cost-benefit analysis on improving the existing lock should be undertaken?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I can assure the hon. member that a decision with regard to the

March 3, 1978
Ora! Questions
Sault canal and the development of that area is being made on the basis of all the available facts and information. There is no special reason for a conclusion not having been reached except that we want to do a very thorough job of analysis.


Reginald Cyril Symes: Mr. Speaker, I hope the minister does study the new evidence about 4 million tons of coal moving through that system by 1980, because that does not seem to me to justify reducing or closing the lock. By way of a supplementary question, can the minister explain the budgetary reduction of $336,000 for operating costs for the fiscal year 1978-79? Does this mean the government has decided to reduce one work shift, which was an option suggested in its preliminary report on the future of the Sault lock?


Otto Emil Lang: With regard to the second part, I would want to check that. I think probably if the time estimates are being considered, 1 would be able to give that information. I can tell the hon. member that as far as the proposed or suggested movement of coal is concerned, we had projections of possible movements of coal far greater than that which we have been taking into account in terms of the development of the Seaway.


AIRLINES ISSUING FREE TICKETS SO CUSTOMERS MAY AVOID INCOME TAX
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, my question is for the Minister of Transport. There have been news reports this week that airline companies and travel agents are handing out free airline tickets to help customers avoid paying income tax, and there are so many free tickets around that they are like money.
In light of the statement made by Mr. Claude Taylor at committee meetings last spring, that Air Canada has 80,000 tickets it cannot account for, I would ask the minister whether he has contacted Mr. Taylor to see if they have found these 80,000 tickets, or are they part of the free tickets that are floating around Canada?


Otto Emil Lang: Mr. Speaker, I have no reason to think there is any relationship between these two matters, and I do not think anyone suggested that at any time. I have not had a recent report from Mr. Taylor on this matter, but I would be glad to obtain one.


A. Daniel McKenzie: Mr. Speaker, will the minister contact Mr. Benson, of the CTC, to make sure he allows no more air fare increases until he has complete assurance that airline companies can account for all these missing tickets and have proper accounting systems, instead of having this rip-off of the Canadian public?


Otto Emil Lang: Mr. Speaker, 1 will take note of that representation.


PROPOSED WITHDRAWAL OF GOVERNMENT FROM INTRAPROVINCIAL FERRY SERVICES
James Aloysius McGrath: Mr. Speaker, 1 have a question for the Minister of Transport of which I have given him notice. Given the government's stated intention to withdraw from all intraprovincial ferry services in the country, and given the settlement that was successfully negotiated with British Columbia in this regard, 1 should like to ask whether the minister or the government is prepared to offer the same terms and financial conditions to the province of Newfoundland in this regard that it gave to British Columbia?


Otto Emil Lang: Mr. Speaker, broadly speaking, it is our view that the administration of local ferry services, particularly when they may be competitive with roads or, indeed, are being replaced by the construction of road services, are better managed and better to be managed in provincial hands. Toward that end we are discussing with Newfoundland an appropriate fiancial arrangement, and perhaps an arrangement to assure improved facilities where they are required to provide the ferry services. These discussions have been ongoing for some time. I think they may have taken a change for the better fairly recently; I say that as a result of my first discussions with the new minister of transport for Newfoundland.


James Aloysius McGrath: Mr. Speaker, although the minister did not say so, can I assume that Newfoundland can expect the same terms given to British Columbia? Can the minister give the House, and certainly the people of Newfoundland, the assurance that the vessel which has been designated to replace the William Carson on the Labrador-Newfoundland service will be adequate in terms of accommodation and safe in terms of its ability to navigate the ice situations off Labrador?


Otto Emil Lang: Mr. Speaker, the principles which were at work in developing a solution to the ferry situation in British Columbia are the same principles at work in the case of Newfoundland, although different circumstances and different arrangements in law might well lead to appropriate results rather than identical results. The information I had was that the vessel being prepared for the substitution of the William Carson was chosen because of its suitability. It has to undergo certain changes to permit it to fit the service exactly, and those will be undertaken.


EXTERNAL AFFAIRS
Maurice Adrian Dionne: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. Will he inform the House what further developments there have been in respect of the question of compensation by the Soviet Union for costs incurred in the search for the parts of the Cosmos satellite?
March 3, 1978


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, the question may be prompted by press reports that the Soviets did not accept our proposal at the United Nations. That is correct, although we did get a good deal of support for it during the debate, which I believe concluded yesterday. We will continue to pursue the matter there.
On the specific point of the collection of costs as they relate to the work of recovery of the satellite, we have submitted to the Soviet Union a further note which indicates quite categorically Canada's view that the Soviet Union is responsible and that it is our intention to seek to recover the funds that were expended in this regard. I may say that I would have no objection to tabling it-this may cut off a supplementary question-if that note is desired by members. I would be glad to do so.


REPORT ON SHCHARANSKY CASE
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is for the Secretary of State for External Affairs. It arises out of the motion which was made in the House and adopted unanimously, presented by the hon. member for York Centre and seconded by the hon. member for Grenville-Carle-ton, to the effect that the Shcharansky case and the offer of landed immigrant status which Canada has extended to Shcharansky be raised at the earliest possible moment at the Belgrade meeting. I ask the minister if that has been done. Also, perhaps he could report to the House, if it has not been done, on the difficulties that might be encountered and what we can expect to be done in this regard.


Donald Campbell Jamieson: Mr. Speaker, the last word that 1 had from the delegation in Belgrade-by the way, it was a report which embraced some of the views of members of parliament and members of the other place who were there at the time-was that up to that moment there had not been an appropriate phase in the discussions at Belgrade which would permit the actual presentation of this resolution.
Our ambassador was looking for alternative means through which it could be done, and will advise us when he has reached the appropriate conclusion as to what the best technique would be. I think there are members of parliament and members of the other place in Belgrade who are following this as well, and I will be governed by the general conclusion. In other words, we will follow whatever conclusion the total delegation comes to as to the best way to proceed.


John Allen Fraser: The Secretary of State for External Affairs was not here yesterday-undoubtedly, he was engaged in other duties-but a motion was presented to the House by the hon. member for Edmonton-Strathcona, seconded by myself, which was also unanimously approved with respect to the Shcharansky case, directing the House to urge upon the Soviet Union that we have an observer at the trial, and also repeating
Oral Questions
the offer of the Canadian government to grant Mr. Shcharansky landed immigrant status. My question to the minister is whether he can tell the House, first of all, how soon this direction given by the House to him will be carried out, and when will we have a report on the action taken on this unanimous resolution?


Donald Campbell Jamieson: I hope you will permit me a moment here, Mr. Speaker, to illustrate, in a completely non-argumentative way, the difficulty which these two motions present. I will answer by saying that of course they will be submitted at the earliest opportunity to representatives of the Soviet Union. However, 1 would point out with the best of intentions, 1 have no doubt the two are mutually exclusive unless we can find an effective way of putting them together.
One suggests that there should be an immediate release of Mr. Shcharansky; the other anticipates the trial of Mr. Shcharansky. This makes it extremely difficult for us to argue that the gentleman ought not to be tried and that we should continue with the initial course which we pursued, namely, of asking that he be released from the Soviet Union and that we will take him into custody. I make that point, 1 repeat, not in any debating sense but to illustrate the difficulties of debating these tremendously sensitive issues in public.
1 will be glad to consult with hon. members opposite who have an interest in this case, and with members on this side of the House, in private or in any other way so we can reach a suitable approach to this matter which will illustrate that we all have a concern for this gentleman and for human rights in general, and so we can do it in a manner which will effectively advance our goals rather than being self-defeating which, regrettably and with the best of intentions, often turns out to be the case.


John Allen Fraser: I would like to ask the minister, again in a non-argumentative way, whether in view of his remarks he would give careful consideration to the representations that have been made to him, to members of his own party and to members of my party, which give a very strong indication that publicity in these areas is not self-defeating but, in fact, brings about-on certain occasions-some very positive results. Having said that, 1 recognize the difficulties to which the minister is referring, but I would ask him to consider-


Mr. Speaker:: Order, please. Perhaps the subject is being overworked.


MINISTER'S DISCUSSIONS WITH SOVIET OFFICIALS ON QUESTION OF HUMAN RIGHTS
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct my question to the Minister of National Defence: it is concerned with human rights. Last Wednesday evening, the Estonian Central Council, the Latvian National Federation in Canada, and the Lithuanian community met in Ottawa for the Balkan evening. Since the Minister of National Defence addressed this group, 1 wish to ask him-because some Estonian immigrants have settled in my constituency-in view of the

March 3, 1978
Oral Questions
desire of these people to establish free democratic governments in their homelands, whether during his recent trip to the Soviet Union the minister raised the question of freeing the Balkan states and permitting them to hold free, democratic elections with all political parties participating. Has he raised this question with the Soviets and, if so, what was their response?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I have not been to the Soviet Union recently, nor do I have any immediate intention of going. They are sending enough guests over here.


ADMINISTRATION OF JUSTICE
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, my question is directed to the Solicitor General. It arises by virtue of the chairman of the Waterloo Police Commission stating that he is going to write to the Solicitor General to ask him to consider changes in our parole laws to prevent the recurrence of an incident in which the police spent something like $85,000 to prevent sexual offenders from repeating their offences. My question is-


An hon. Member:: 1 can't hear a word you are saying because your colleague is making such a racket.


Lloyd Roseville Crouse: On a point of order, Mr. Speaker-


Mr. Speaker:: Order, please. The hon. member for Saskatoon-Biggar.


Lloyd Roseville Crouse: The minister misled this House when he said on Wednesday evening he has been in the Soviet Union.


Mr. Speaker:: Order, please.


Lloyd Roseville Crouse: Tell us the truth.


Mr. Speaker:: Order. In spite of the allegation which the hon. member now makes, the minister gave a clear answer to the House. I am not under any impression that it could mislead the House in any way.


Ramon John Hnatyshyn: Mr. Speaker, I will readdress my question to the Solicitor General. It arises by virtue of the report that the commissioner of the Waterloo Police Commission is writing to the Solicitor General with respect to changes to be considered in the parole laws to prevent the recurrence of an incident there on which the police spent something like $85,000 to prevent a sexual offender from repeating his offences. Is the Solicitor General now giving consideration to changes in the parole laws and regulations which might avoid recurrence of this type of situation and, if so, when will these changes be brought before parliament?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I have not seen the letter from the Waterloo chief of police and I do not know about the event referred to. I will have to look at the record, see the letter and perhaps provide some additional information to the honourable gentleman later.


AIR TRANSPORT
Walter Gilbert Dinsdale: Mr. Speaker, my question is for the Minister of Transport. The hon. gentleman is aware of the promise made by the government four years ago to provide first-class air service to western Manitoba and eastern Saskatchewan. I would like to ask the minister if he is also aware that an application is now before the Air Transport Committee from Great Lakes Air Lines to provide jet service to this area at the earliest possible date, and would he use his good offices to get this service into operation as quickly as possible in 1978, as he promised he would during a visit to the Westman area last fall?


Otto Emil Lang: Mr. Speaker, I was aware that the application by Great Lakes was going forward. I would not, of course, want to comment on that application, which must first be dealt with by the Canadian Transport Commission which has been charged by parliament to determine whether any particular application is in the public interest.
At the same time, I should say that I am awaiting a decision by the commission on a number of other applications which have been before it and which would offer service under a variety of different forms to Brandon and the area of Yorkton and Dauphin, as well, in Manitoba and Saskatchewan. As soon as the CTC decision is made, I will be able to act and provide service if the CTC so recommends.


Walter Gilbert Dinsdale: Mr. Speaker, can the hon. gentleman be optimistic and give us the encouragement that, after all these years, the service will be in operation in time for the winter games early in 1979? The Minister of State for Fitness and Amateur Sport is in Brandon today making a contribution of $750,000, so obviously the government regards this question as top priority.


Otto Emil Lang: Mr. Speaker, 1 am very optimistic that all the steps required to put the service in place can be completed well before the date of the winter games.
March 3, 1978


POINT OF ORDER
Donald Campbell Jamieson: Mr. Speaker, I rise on a point of order. 1 did not hear whether hon. members opposite wished me to table copies of the notes with regard to the Cosmos satellite.


Mr. Speaker:: I presume it is the desire of the House that the documents be tabled. With permission, the Secretary of State for External Affairs (Mr. Jamieson) could table the documents forthwith.


Some hon. Members:: Agreed.


Mr. Speaker:: So ordered.


BUSINESS OF THE HOUSE
Mr. Baker (Grenville-Carleton):: Mr. Speaker, you will recall that yesterday an arrangement was made for consultation among House leaders as to when the allotted day scheduled for yesterday would be rescheduled. 1 understand that it has been arranged to have that allotted day scheduled for Monday, which is the only time it could be reasonably scheduled, that there will be a vote, and that the order will be the matter raised in the name of the Leader of the New Democratic Party on the status of women and the government's failure with respect thereto, which latter is well known throughout the country.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, I was rising on the same subject. There were discussions yesterday, and I believe it is agreed that the allotted day we were to have had yesterday will be re-scheduled for Monday. It is true that if the deputy government House leader will designate Monday as an allotted day the motion which was filed yesterday will be filed again in the name of the hon. member for Oshawa-Whitby. It does concern the status of women, and we shall be asking for a vote at 9.45 Monday evening.
While I am on my feet, I believe it is also understood that Tuesday will be an opposition day. I believe it is the official opposition which will have the day. However, if that is the case, both Monday and Tuesday need to be designated.


Mr. Cafik:: Mr. Speaker, I agree that there has been an accommodation reached with respect to the designation of Monday as an opposition day to replace the one which was set aside yesterday. 1 gather it will be assigned to the New Democratic Party. As I indicated yesterday in the House of Commons, Tuesday will also be designated as an opposition day, and I gather it will be assigned to the official opposition.


Mr. Speaker:: That designation having taken place is it agreed that Monday will be an allotted day, that the motion will be the subject matter which was to have been raised
Question Period
yesterday, that that will lead to a vote at 9.45, and that Tuesday will also be designated an allotted day?


Some hon. Members:: Agreed.


Mr. Speaker:: So ordered.


POINT OF ORDER
Robert Muir: Mr. Speaker, earlier today you very graciously and kindly allowed me to pose a question to the Minister of Labour (Mr. Munro). I received what I thought was quite a reasonable answer. I then pursued my question further with the minister in charge of the Cape Breton Development Corporation, who replied but did not say whether he was prepared to meet with the union concerned. I do not question Your Honour's wisdom, but in your wisdom you did not allow me a further supplementary, as you do many others in this House.
I just want the record to show that in my almost 21 years here I have not abused the rules of this House. The Chair can check that with its advisers. I speak on behalf of my people. When problems occurred in Sudbury, we heard about them day after day, and rightly so, but we also have serious problems on Cape Breton Island. I want the record to show that I attempted to do what I could but was prevented from following up my question by Your Honour.
I wanted to see if the minister, who is a very cordial and usually co-operative minister, is able to meet with the United Mine Workers of America.


Some hon. Members:: Order!


Robert Muir: Canada does not stop at Montreal. There is a lot of country beyond Montreal.


Mr. Speaker:: Order, please. I hope the hon. member will realize that the questions he put forward today took the form of representations.


Robert Muir: No.


Mr. Speaker:: The first question was whether the minister was prepared to have a meeting, and the hon. member asked a second question. Both of those questions in their very basic form were representations. I still let them go because I thought the hon. member was proceeding, with the best of motivations, to pursue a difficult problem in his own constitutency. I allowed both questions to go, and although they were in fact representations asking the minister to meet, they were both answered at some length, particularly by the minister responsible for DREE.
I thought it was a rather long and complete answer and that, in fairness, other hon. members ought to have a chance to put their grievances, particularly since 1 thought the hon. member

March 3, 1978
Order Paper Questions
for Cape Breton-The Sydneys (Mr. Muir) made his position very clear and delivered a rather complete plea for help. I regret very much that the hon. member takes the view that he was unfairly treated, but he occupied almost ten minutes of the question period, and I thought that was very fair.


Robert Muir: Mr. Speaker, I rise on a question of privilege. My rights are being abrogated by the Chair.


Mr. Speaker:: Order, please. The hon. member raised this matter. I simply indicated my regret at his view. However, the matter is now closed.



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today : Nos. 1 30, 795, 822 and 1,210.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Munro (Esquimalt-Saanich): 1.	Is the Canadian Home Insulation Programme (CHIP) available to residents in all the provinces and, if not, which provinces are excluded and for what reason?
2.	In what city is CHIP Headquarters and in what constituency is it located?
3.	Who is the Member of Parliament for the constituency?
4.	What Minister is responsible for the CHIP Programme?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: am advised as follows by Central Mortgage and Housing Corporation: 1. The Canadian Home Insulation Programme is available to the residents of all provinces and territories with the exception of Prince Edward Island and Nova Scotia. A more generous programme has been in effect in these two provinces since February 1977, because they are highly dependent on imported oil for electricity generation and for home heating.
2.	CHIP Headquarters are located in the Town of Mount Royal, in the Constituency of Mount Royal, in a building where CMHC has occupied space since January 1963 and where vacant space was available.
3.	and 4. See Beauchesne's Parliamentary Rules and Forms, Citation 171 (ff).


Mrs. Pigott: Have professional consultants been hired as advisers in connection with the LeBreton Flats development project and, if so (a) what are their names (b) what is the category or designation of the consultants (c) what is the fee of each consultant (d) what is the total cost of all consultants hired for the project (e) what is the starting and finishing date for each consultant hired?


André Ouellet: In so far as the Central Mortgage and Housing Corporation is concerned:
Consultants-LeBreton Flats Demonstration Project
Contract Period
Consultant	Category of Work Performed	Fees*11 $	Starting Date	Finishing DateJ.L. Richards Associates	Infrastructure	106,146	May 1975	PresentInstitute of Environmental Research	Social Planning	149,723	September 1975	MarchSocial Planning Council of Ottawa-Carleton	Social Planning	24,395	January 1975	PresentRealty Research Inc.	Market Research	126,466	May 1975	July 1977DCH Consultants	Financial Planning	126,447	May 1975	May 1977Zoltan Kiss	Housing Design	2,001	April 1977	May 1977Peter Barnard Associates	Land Tenure Study	9,920	May 1977	August 1977Shawinigan Engineering	Environmental Study	37,605	August 1975	March 1976Damas & Smith Associates	Transportation	183,976	May 1975	January 1977A.J. Diamond Associates	Urban Design	262,144	May 1975	January 1977Clement, Large, Paterson	Solar Engineering	9,135	October 1977	PresentJerol Wheeler Associates	Landscape Design	1,430	July 1977	October 1977
O To December 6, 1977.
In so far as the National Capital Commission is concerned:	Planners, Transportation; (c) $64,000; (d) See Parts (c); (e)
(a) Damas and Smith Limited; (b) Consulting Engineers &	January 31, 1976 to December 1976. (a) A.J. Diamond &

March 3, 1978

Associates; (b) Architects & Planners, Urban Design; (c) $16,100; (d) See Parts (c); (e) December 1976 to March 1977.


Mr. Howie: On November 1, 1977, how many women held the position of (a) Deputy Minister (b) Assistant Deputy Minister?


Hon. Robert K. Andras (President of the Treasury Board):: On November 1, 1977, one woman held the position of Deputy Minister and two the position of Assistant Deputy Minister. In addition, three women held the position of Head of Agency, which is considered to be equivalent to Deputy Minister.


Mr. Epp: 1.	Did the government grant the Fort Alexander Indian Reserve monies to fly to Copenhagen, Denmark for the purpose of playing hockey and, if so (a) in what amount (b) how many persons are going?
2.	What is the cost of travel by air, rail and/or bus?
3.	What will be the cost of food and lodging paid by the government?
4.	What amount was allotted for expense accounts?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: 1. Yes, in part, (a) The Fort Alexander Band is providing the Saogeeng Oldtimers Hockey Team with $7,000 from the Band recreation budget, which is made up of federal funds transferred to the Band. However, the total project cost is $39,000. The balance of the funds was raised through community fund raising ventures, (b) 26.
2.	The total airfare costs are $21,000.
3.	and 4. The Band advises that food, lodging and expenses will amount to $17,200.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, March 2, consideration of the motion of Mr. Lang that Bill C-17, to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in
Railway Act
consequence thereof, be read the second time and referred to the Standing Committee on Transport and Communications.
Reginald Cyril Symes: Mr. Speaker, I want to participate in this debate on Bill C-17 to comment briefly on some of the concerns 1 have about this CNR refinancing bill, in the context of our national rail transportation policy in general and the problems we encounter in many areas of Canada because we do not have a national transportation policy due to the lack of initiative of the Liberal government under the current Prime Minister (Mr. Trudeau) who, over the past decade, I am afraid, has allowed the situation to go from bad to worse.
This bill is an attempt to recapitalize $808 million of the CNR debt which stands at approximately $2 billion. We support the concept of trying to reduce the debt of the CNR. We think it has to be brought on to a more equal footing with the CPR, and therefore we say this recapitalization is long overdue. As a Crown corporation the CNR has carried this burden for a number of years while competing on an unfair basis with the CPR.
It should not be forgotten that the CNR was formed when private railway companies went bankrupt. In 1919 the government of the day acknowledged that rail service was an essential service and that railways should not be allowed to fold up and leave communities stranded. The history of transportation and of other areas of endeavour in this country shows that the government stepped in to maintain an essential service and, in doing so, of course saddled itself with a huge debt and committed itself to paying off the private owners and shareholders in the company. As a result the CNR has been burdened with that debt over the years.
We should not forget that the government has helped the private railway company as well. I am sometimes amused at the distortion of history that we see in the advertising of private groups in this country. 1 think of the Insurance Bureau of Canada and, to some extent, of the CPR. They like to glorify private enterprise and imply that it developed this country all on its own. Anyone who reads Canadian economic history realizes, of course, that is only half the truth. There is a long tradition of government involvement in Canada through direct subsidy, taxation measures, and Crown corporations, which did what private capital and industry was unable or unwilling to do. We should remind ourselves that at the close of the 19th century the CPR received $25 billion in outright grants from the federal government and a grant of 25 million acres of land, a very handsome subsidy in those days.
When we talk of private and public transportation we should not forget the context in which both were developed. It was considered that transportation was a service very important to Canada. Although that concept has been accepted from time to time, I am afraid that under the present administration the idea of service taking precedence over strict profit is being diminished. That is regrettable and will only serve to exacer-
3436

March 3, 1978
Railway Act
bate regional inequities and the friction that contributes to the problem of national unity.
In economic and geographic terms this country does not make sense. We have tried to combine various regions of North America on an east-west axis, when all lines of geography, communication and trade run on a north-south axis. We are going against the natural trend in trying to get an entity called "Canada" together by combining east and west. It is essential, therefore, that our transportation system be strong and vital in order to preserve the fragile unity that we hold to be Canada. It is important that we have a transportation policy that does not exacerbate the division between east and west but that helps bind the country together. Where this breaks down, of course, is in the way the government has designed transportation policy. It assumes that competition is essential to an efficient transportation system and that through competition prices will be reduced and more efficiency result to the benefit of the consumer.
Another key objective of competition is to maximize profits. We run into this dilemma when we try to apply the concept of free enterprise or maximum profits to a transportation system. If that is the primary goal, and a transportation system begins to lose money on a certain section of its operations, the logic of free enterprise and the idea of user-pay demand that service on the section that is losing money be reduced or disbanded. In an ordinary business operation, the consequences of such action are usually not too severe to the consumer, as another business will take up the slack. With transportation, however, another mode of transportation is not immediately available to the area affected. If you tear up a railway line you cannot assume that an efficient highway or air service will come in to move goods and people.
The dilemma is whether you leave regions and communities isolated or with reduced transportation service in order to balance the books or make a profit. If we followed that philosophy, which I hear again and again from the Minister of Transport (Mr. Lang) in his talk about user-pay and phasing out losing parts of a transportation system, then we would contribute to national disunity. It would exacerbate the problems of people in Atlantic Canada, in northern Ontario and in parts of western Canada.
Surely we should look at our transportation system as a means of bonding the country together, as a means of removing the inequalities faced in less developed regions or regions with less natural advantages than others. I know what it is like. I come from a relatively disadvantaged region of northern Ontario where we rely on resource based industries. We have to cope with a freight rate structure that discriminates against us and prevents us from becoming independent of mining and forestry as our sources of employment and business. We cannot get secondary industry into northern Ontario, as is the case in Atlantic Canada, because freight rates discriminate against the movement of manufactured goods from secondary industry.

Freight rates are designed to move raw materials cheaply to parts of southern Ontario or to the United States where they are manufactured and resold to us as finished goods. It is always cheaper to move that kind of bulk material in its raw or semi-processed form than it is to move manufactured goods to other parts of Canada. That, of course, means that so long as we have those discriminatory freight rates we will not solve the perennial problem of boom-bust economy or high unemployment in these regions of Canada which cannot attract secondary manufacturing industries.
That is a long-term problem which has never been solved by the government. It could be solved if this bill went further than it did. The bill should look at the totality of railway transportation and financing and bring about a rationalization of the system. If the bill brought about an amalgamation of the CNR and CPR into one publicly owned and directed Crown corporation so that we could end these persistent anomalies, the problems of freight rate discrimination which continue to give advantage to certain parts of the country and disadvantage to other parts could be solved.
The community of Sault Ste. Marie has the Algoma Steel Corporation. Steel is manufactured goods, and one would assume we could move it to any part of Canada and be able to compete in the market. However, we found that freight rates work in a reverse sense, even on some of our manufactured goods. Most recently we found that it is cheaper for the steel fabricators of British Columbia to use steel produced in Japan, transported across the Pacific Ocean and landed in British Columbia. That steel is moved more cheaply than by moving steel from Algoma along the railway system to British Columbia.
Indeed, Algoma Steel has experimented with putting the steel on ships moving it through the St. Lawrence seaway, via the Atlantic Ocean, the Panama canal, the Pacific Ocean and along the coast of British Columbia. This was an attempt to discover if this method is a less costly way of moving steel to the west coast than by putting in on flatcars and transporting it by rail. What a ridiculous situation, Mr. Speaker, that we are forced into that kind of long sea route in order to land goods on the west coast of Canada so as to compete with foreign steel. It points out the problem of rail transportation in this country.
We have heard from western members in this House of Commons as to how they can never get manufactured goods out to their part of the country cheaply, or indeed set up factories in the west and move goods to the east. That is certainly a problem that the refinancing of the CNR is not going to solve. I fault the government for not bringing in a more comprehensive transportation policy in this sense.
We have to look not only at freight and the movement of it but at the movement of people by a passenger service. Those of us who live in sparsely populated parts of Canada are worried about the changes that are being made by the government in rail transportation. We know the new transportation system called VIA Rail will soon be in effect. That has meant
March 3, 1978

reducing parts of the transcontinental service on the CNR line through northern Ontario. Certainly the small communities that service that passenger train will feel the effects of its reduction in lay-offs of railway workers.
My community has felt the effects of the transport minister's attempt to cut back on his budget by cutting back on subsidies paid to the railways on their passenger rail service. The passenger service between Sault Ste. Marie and Sudbury no longer exists because of the government's decision a year or so ago. Again we find ourselves discriminated against because of this irrational policy. We know rail passenger service has a good future in this country in terms of its energy efficiency as well as in its cost of moving people. Yet this government seems so preoccupied with air service, with tremendous capital investment going into airport expansion et cetera to the neglect of designing a fast and efficient rail service.
We see a similar kind of policy by the present government that discriminates against smaller communities as a result of cutbacks in its transportation budget. I think of the question I raised today with the Minister of Transport on the government's attempt to reduce the operation of the ship canal and the lock at Sault Ste. Marie, Ontario. We have been waiting for months now for the final decision of the government on whether it will spend money to improve and upgrade this lock. We can then continue to have our workers employed and continue to have the $1 million worth of revenue or more the lock generates and that is pumped into the economy of Sault Ste. Marie.
When I think of the new evidence we have before us of increased coal shipments from western Canada to Thunder Bay, and then via ship to the St. Lawrence Seaway, it would appear to me this is an argument not to let the Canadian lock continue to be degraded and to lose its commercial viability. Here we should be thinking of expanding and upgrading it and building a new superlock at Sault Ste. Marie to handle this increased tonnage which will result from the increased coal shipments through the St. Lawrence Seaway system.
All these factors point to a transportation system that is not developing on a rational basis. It seems to me that this bill only goes part way in trying to make the CNR more viable. I say we should have a comprehensive piece of legislation which looks at both railway systems and reorganizes and refinances them both.
We must maintain the principle that profit-taking alone cannot be the primary function of a transportation system that is by any sense national. We have to have the concept of service very high in our policy formulation, and I do not see that happening with the cutbacks and policies that this government and the minister are undertaking.
1 am concerned about the Minister of Transport promoting the concept of user-pay. In the smaller areas we do not have the volume of use, either through the movement of freight or the passenger service, that can justify the service receiving enough revenue solely from those who use it. They will have to continue with subsidies to the various rail and other transportation systems in order that small communities which do not
Railway Act
have the volume can still have that essential service in their daily lives.
Any movement toward a strict concept of making a system viable only on the concept of revenues generated from those who use it will surely exacerbate the problem in the various regions of Canada. 1 am concerned too that part of the thinking by the minister in moving this bill was shown in his statement that at times we should sell off the more profitable parts of the CNR to private industry. He implied that once we make certain sections profitable the government should not be concerned with managing and operating those sections. They would then be attractive to private investors and we should sell off parts of our Crown corporation to them. If we move in that direction, we will be in the predicament I mentioned at the beginning of my speech.
If private operators buy the profitable parts of CN, their way of thinking and primary policy will be that their operation must always make a profit. If there are times when that operation begins to lose money, the private operator, working on the principles of free enterprise, and I do not fault him because only logically can he come to this conclusion, will reduce parts of that service in order to make a profit. That will mean certain areas of the country will be disadvantaged.
The history of transportation in this country has shown that we have to keep the concept of service on an equal footing with the concept of sound business operations in an attempt to have a most efficient and, where possible, profitable operation. Therefore I have to conclude that only by maintaining public control over our transportation system can we guarantee for all Canadians, no matter where they live, that the concept of essential service will be maintained.
In a sense, the bill is a bit of a move in the right direction in trying to reduce the burden of debt that the CNR is facing. However, I worry about what this means for the future in terms of over-all transportation plans of this government and this minister. As I stated before, my fear is that we will end up with a transportation system that does not bind our country together, providing equality of service and opportunity, but one that gives advantages to certain parts of the country because they are more blessed with markets and resources than other parts. No government worth its salt can move in that direction if it is serious about national unity and developing a sound economy.
With those reservations, we will support the bill, but we will be watching very carefully and be very critical of the minister if he moves in the direction of reducing service and privatizing parts of this very important Crown corporation.
[ Translation]


Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, I am happy to have this opportunity to make some comments on this bill at the second reading stage. First I want to commend the Minister of Transport (Mr. Lang) for bringing this bill before the House. It is not very voluminous but indeed it will have
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March 3, 1978
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far-reaching consequences for the whole country. I think everybody had been expecting such a bill for a long time; we have been expecting it for many years, and I figure it is a good start towards a reorganization of our rail services throughout Canada. Also 1 want to say that unlike some of the previous speakers of the opposition, I will not begin my comments by saying that the government favours one province over another, or Montreal over Winnipeg, or Toronto over some other city in some other province. In my opinion, that is not the way to enter the debate, because if I speak favourably of the bill, I will do so talking about my region since it is the only one I know, just as people from western Canada do not know much about Quebec when telling us whether they are for or against the bill.
I will not say a word about other regions because I know people out west also have needs. They have to talk about their needs but not to the extent of running down or belittling certain needs in some other province they know nothing about. That is why, Mr. Speaker, I will limit my comments to my area and what the bill will mean for it. You can be sure that we support the bill wholeheartedly. This bill is entitled: "An Act to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in consequence thereof'. In summary, Bill C-17 provides in Section 6:
. . . would authorize the Governor in Council to cancel not more than eight hundred and eight million dollars of debt owned by the Company to the Crown, together with any interest falling due thereon after December 31st, 1977 . ..
And Section 7, I quote:
. . . would provide for the surrender to the Company for cancellation of all four per cent preferred stock held by the Minister of Finance on December 31st, 1977.
And finally, and I quote:
Section 9 would establish the authorized and issued capital stock of the National Company at six million common shares of no par value and provide for the value those shares are to have in the accounts of the Company.
In return, the CN shall pay the Receiver General of Canada a dividend of 20 per cent, which will leave it, finally, with 80 per cent to manage the company business. In short, Bill C-17 simply cancels the debt of the Canadian National with the government-capital and interest-roughly $20 billion, in order for the company to get back on an even keel.
Often the people are misled for lack of an explanation. Unfortunately, when a member puts pertinent questions trying to better enlighten the people, the government, through the minister responsible, often answers that it is a matter of internal administration for the Crown company and that it cannot give out the information requested. The people wonder, and rightly so, why the CN ends up in the red every year whereas CP reports net profits at the end of each fiscal year. Would it be easier to control the expenditures and the administration of a private company than those of a Crown corporation? Would it be that in a private company there are officials
(Mr. Gauthier (Robcrval).]
who have a financial interest to protect whereas in a Crown corporation there are no such people in fact and that the directors have just their salary to protect? But I shall not be that sadistic.
I owe explanations to the population, and the government should give these explanations it has in fact. We only have to check the CN balance sheet to see that the deficit of the administration would not be so high if it were not for the interests which take out a good part of its budget. The CN has in fact an operating surplus. But the CN has an old debt accrued over years, on which it pays interest which are too high. I see the reason for these loans in the fact that we force CN to maintain deficit producing lines in remote areas. 1 would even say that very often CN plays the part of a stop-gap. Where CP does not want to venture or withdraws because it is not as profitable as they expected, CN is ordered to go by the government. Therefore it is the government which is in fact responsible for this deficit. And to make things worse, the same government requires CN to pay interest on these loans instead of simply subsidizing it. There should be at least special supplementary assistance in non-profitable areas but, instead of that, CN has to borrow from the government and when it gets free assistance, CP takes equal advantage of this government assistance to transportation.
1 think it is a kind of underhand protectionism towards CP. All this passes unnoticed. Both companies get subsidies as if both had the obligation to serve profitable as well as non-profitable areas. But if we look at our two railway systems, we realize that CN has to serve undeveloped and remote areas much more often than CP. We should beware of this in the new organization.
I also believe that over-centralization is one of the reasons for the CN deficit. I remember that when there was a minor breakdown on an engine, in my Saguenay-Lac-St-Jean area, it had to be sent to Montreal to be repaired, even if it meant just an hour, an hour and a half or two hours of work. Can you imagine that? The engine had to be sent to Montreal for repairs which meant 32, 36 or 40 hours before it was back. Then they put in servo-centres to follow the moves of coaches and know at every moment where each of them was.
It is all very well to sit in an office and admire the movement of railway cars, but what is important is that these cars can travel in all safety on the railroad. And for that, it is necessary to have adequate maintenance personnel, not people who sit in offices. This is of no use when it comes to repairing the railroads, Mr. Speaker. And there are now too many people in the offices and not enough on the lines. I believe that 50 per cent of all derailments which have caused losses amounting to millions of dollars in the last few years could have been avoided had there been maintenance teams on location and had there been enough employees to maintain the railroads. 1 hope that the new organization will create new maintenance sectors.
March 3, 1978

As concerns decentralization, I believe that we have just made a giant step by creating two separate organizations for the transport of goods and the transport of passengers. We are therefore very happy about the creation of VIA Rail and we have high expectations about this new agency, this new VIA Rail company as concerns quality and service. I hope that in all meetings and discussions, priority will be given to the quality of service instead of profitability. Those appointed are already at work.
I have been able to speak with a few of them and I can tell you that they seem quite prepared to provide adequate passenger service in our area of the Saguenay-Lac-Saint-Jean. If we have a modernized transportation network, well-maintained railways, orderly traffic, priority of passengers over freight and schedules acceptable for the majority of customers, you can be sure that the estimates of those now responsible will be met, that is doubling the number of users in two years. This is what the promoters now want to do.
I have assured them that they will be surprised if they do as they now plan because there are customers waiting for this service in our area. Our area has a population of more than 300,000, which means that there are many potential customers for an adequate service. I have always urged consultation with the local authorities, otherwise, the population of the Sague-nay-Lac-Saint-Jean will lose interest. I am now certain that the dialogue will be helpful for the expansion of VIA Rail and to provide more adequate service to our population. Of course, we are satisfied with Bill C-17 and we would like it to be referred as soon as possible to the standing committee of the House so that it may be studied in depth and improved if required to provide better service and improved safety.


Mr. Cecil Smith (Churchill):: Mr. Speaker, in speaking on Bill C-17 today I will begin by pointing out that those ribbons of steel which run into northern Manitoba known as the CN rail lines are really the basis of the economic life and future of my part of the country. I think of the line which runs from the top of Lynn Lake to carry out iron ore and serve the communities along the route. I think, too, of the 500-mile line which runs from Le Pas to Churchill. The rail lines in northern Manitoba are just like milk to a baby. Without them our economic future would be bleak indeed.
I see that the Minister of Transport (Mr. Lang) is here. I know he is interested in the Port of Churchill and is following this discussion with interest. The bill before us was introduced in the House on December 19, 1977. The Prime Minister (Mr. Trudeau) urged the opposition to pass it immediately. Its effect will be to cancel, as of December 31, 1977, $808 million of debt owed by the CN to the government. According to the Minister of Transport this would give the company a capital structure appropriate to a mature corporation and provide it with a realistic debt-equity ratio.
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After the recapitalization of 1952, the debt-equity ratio of the company was comparable to that of the Canadian Pacific. But since 1952 CN has been carrying a huge debt burden, though in different circumstances, CP rail has earned a profit every year and never missed a dividend.
This is the third time the CNR has come to parliament asking to be relieved of debt. The Prime Minister is asking us to pass quickly a bill which will erase CN's debt to the people, for the third time. That will put a service in the black which belongs in the red. How can the government expect taxpayers to refinance a transportation system which causes only frustration and hardship, which reorganizes attitudes and services to improve profit ratio, only to become more inefficient and inoperable?
In 1974 the transport committee promised CN $20 million for rebuilding the railway from Gillam to Churchill. When the Hudson Bay Railway was constructed, 80 pound steel was used, that is, 80 pounds per foot steel. What has been taking place over the past number of years is the upgrading of this rail line to 100 pound steel in order to enable trains to carry heavier carloads and so on.
The line which commences at Gillam, Manitoba, has now been upgraded as far as the Herchmer subdivision. The balance of that rail for 200 miles is 80 pound steel, which is causing a real problem with the movement of grain, especially to the Port of Churchill. This is because of the 100 ton hopper cars which are being used. In spile of the rail facilities into Churchill, fortunately last year during the grain shipping season there were very, very few accidents on this particular part of the line. I give a lot of credit to the running crews who have a dedication and responsibility to get grain to Churchill. They attempted to set an all-time record of some 30 million bushels. This was not quite achieved for the simple reason that two of the last ships, which were to haul grain out of Churchill, did not arrive. They were diverted to Montreal.
The rail was to be upgraded to the tune of $20 million. It was to be completed by 1978. Due to a problem as to jurisdiction or classification of the remaining mileage which required upgrading, the entire plan fell by the wayside. On that same piece between Gillam and Churchill, there is no passing track in that 173 miles. That means trains leaving Churchill and heading back into Gillam must complete the run before they meet another loaded train which is going to Churchill. It is important for the lifeblood of the north, Churchill, and that entire 510 miles of line that this last portion be upgraded to 100 pound steel in order to eliminate the possibility of severe spills because of light rail; and also in order to be able to accommodate the 100 ton hopper cars which are now being used for the transportation of grain.
In 1978 northerners are still not sure whether this portion of track will be upgraded. There could be something in the estimates at this particular time, but I have not seen any indication that the line will be upgraded to accommodate the new aluminum hopper cars which will be replacing CN's fleet

March 3, 1978
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that is presently handling grain. If the track is not upgraded in order to handle hopper cars, then the entire mechanism of hopper car dumping at the Port of Churchill will be thrown out. The present system was designed for dumping boxcars. By 1986 boxcars will no longer be used, and only hopper cars will be used to transport grain.
This should be a priority of CN. The remaining 173 miles should be upgraded. Actually, it is closer to 180 miles of track between Gillam and Churchill. It is a case of trying to sort out the priorities of the government as to which project should be carried out. When one looks at the potential of this 510 miles of railway to northern Manitoba and many parts of Saskatchewan, where the grain is produced which is shipped through the Port of Churchill, then one realizes it must be a priority. 1 hope the government will make an announcement. It would be a good area to be included in an election campaign, that is, the completion of that 180 miles of rail with 100 pound steel. It would not gain the Minister of Transport any votes, but certainly it would assist the economy of that particular area. Since the Minister of Transport comes from Saskatchewan, I am sure he will be interested in satisfying some of the grain producers who ship through Port Churchill by upgrading the track.
The Hall Commission report recommended very strongly that the government immediately upgrade the 180 miles of track in the Herchmer subdivision north of Gillam. Also it was recommended that it be designated development, rather than a grain dependent line. This is where the problem arose: the interpretation of development or grain dependent line. This is where the problem still lies. As far as 1 know, it still has not been ratified.
Originally CN assumed this line would be eligible for federal subsidies. They had already invested $6 million in upgrading some parts of the line. Some 85 per cent of the traffic on this particular line is for the Port of Churchill in line with the grain handling, yet CN cannot justify a further expenditure of $15 million which is necessary for the completion of the line. I cannot understand the rationale here.
May I call it one o'clock?


Mr. Deputy Speaker:: It being one o'clock, I do now leave the chair until 2 p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Cecil Morris Smith: Just prior to one o'clock, Mr. Speaker, I was talking about the upgrading of the rail line between Gillam and Churchill from 80 pound to 100 pound steel. Considering the investment the CNR and the government have made in respect of the railway, the town and the port of
[Mr. Smith (Churchill).J
Churchill, it seems to me that to stop now when a total of two thirds of the job is completed just does not wash. I cannot understand how the government can justify spending that large amount of money to upgrade certain portions and then, all of a sudden, stop the project because of a change in policy or a change in heart.
What does this upgrading of the railway facility really mean to the port of Churchill? I suggest it means the life or death of that port, and I would ask the government to give very serious consideration to putting up the money to finish this upgrading process, because Churchill is a viable grain handling port and, in fact, has the most efficient grain handling operation in Canada. That has been clearly spelled out.
Let me point out that the government, in its wisdom and planning, has just spent something like $50 million to redevelop the town of Churchill, including an $11 million expenditure on a recreation complex. No one is really arguing about whether this upgrading is essential, but at the present time, due to government cutbacks in Churchill, with a reduction in the number of people working for the National Research Council and the CBC, following its pull-out, Churchill is now left with a total population of about 1,500 people. They can no longer afford the upkeep on an $11 million recreation complex.
The CNR has refused to commit the final expenditure on the line between Gillam and Churchill because it does not appear profitable to them, and the reason is that the government will not give a decision to CNR on what the future of the port of Churchill will be. Of course this jeopardizes everyone's livelihood and leaves people in the area with a feeling of exasperation and helplessness, not really knowing what their future will be. They thought there was a future there when they saw the line upgraded, when they saw the community redevelopment program and $50 million spent there. That gave them some hope that there was a future, but unless that line is upgraded there will be absolutely no future.
I want to get into another area regarding cutbacks and what has happened in the CNR. Perhaps what 1 will talk about should be classified as cutbacks, but let me comment on how the redevelopment or the reorganization of the CNR has affected northern Manitoba and the Churchill constituency.
At one time northern Manitoba produced some of the best fresh fish in Canada. This included whitefish, pickerel, and jackfish. At that time all fish were shipped out on CN rail. What we have seen taking place over the past couple of years has put this industry in jeopardy, and all because of increased freight rates. The communities out there do not have an opportunity to transport their goods by any means other than by rail. They are totally dependent on the railway. There are no roads leading to them and only the odd one has a small airstrip which it can use for emergency services. So what has happened?
Some 250 to 300 fishermen are now out of work for the simple reason that they can no longer afford to ship their fish by rail. It seems to me that the railway is bound and deter-
March 3, 1978

rained, I suppose following the minister's user-pay concept, to stop serving them. However, there are certain circumstances in which it is the obligation of a corporation such as the CNR to provide service to areas requiring it. Therefore they should be providing this service to the communities.
I should like to give you some examples. In 1974, continental whitefish sold for 24 cents a pound, or maybe in some cases a cent or two less. At that time the freight rate from Ilford, Manitoba, to Winnipeg was 11.33 cents a pound. This left the fishermen 12.67 cents a pound for themselves. On January 20, 1975, the fish was still selling on the market for 24 cents a pound. This was the Fresh Water Fish Marketing Corporation in Winnipeg. But freight rates jumped to 12.18 cents a pound for the same fish. On May 5 of the same year, with prices unchanged, the freight rate has increased to 14.3 cents a pound. This left the fishermen 9.7 cents a pound, an amount which made it virtually impossible for them to meet their commitments. But until that time at least, the CNR would transport the fish, even though the fishermen could no longer afford to transport the fish.
At today's fish prices and with the increased cost of transportation, northern commercial fishermen are hard pressed even to pay for their food bills, let alone to pay for their equipment. We must realize that the railway provides the only link that many of these communities have with the outside world, and when the Hudson Bay Railway built the railway- it was completed to Churchill in 1931-someone had a concept regarding the development of the economy in the area and serving the small communities that had sprung up because of the railway.
What we have seen happening in the fishing industry is an increase in prices, so the fishermen got together and started to ship larger shipments of fish, in that way achieving a more reasonable rate for the shipments, carload lots, and so on. Also, what fishermen had to do was to go to the province of Manitoba, which is now paying a freight subsidy in order to keep these fishermen working. When the freight subsidy was put into effect, fishermen could survive on the return they were getting after freight. But lo and behold, in 1977, the CNR, in their wisdom, tried to cut costs and services as much as they possibly could. This case was brought here to the floor of the House of Commons and to the minister, as well as in committee. What had taken place was that an arbitrary decision was made by someone-certainly not someone in northern Manitoba-that the railway would stop hauling fresh fish. I will tell you, Mr. Speaker, how quickly this decision was put into place.
A fisherman at Arnaud, which is about mile 237 on the Hudson Bay Railway, had been out commercial fishing in the fall and had made some shipments of fish. He arrived at the track at 3.30 one morning to load his fish on to the train which comes from Churchill to the spot where he can put it on a truck and move it to Winnipeg by that means. However, he was at Arnaud where usually he is forced to load his fish on the train because there is no other means of transportation. This time when he arrived at the train at 3.30 in the morning-here is a man who is trying to make a living doing
Railway Act
something he has done all his life-he was told by the conductor, "I am sorry, we have been issued orders now that we are not to haul any more fish."
The train left and the fisherman was left standing on the side of the track with his 35 boxes of fresh fish. We all know that fresh fish must be kept fresh if it is to ever reach the consumer in an edible state. Can you imagine what that has done to the fisherman! We have the highest unemployment in northern Manitoba next to that in Newfoundland. This fellow was so dejected that he was ready to quit right there and go on welfare, collect unemployment insurance, or do something else.
1 am citing this one example but there are many, many other examples such as this. However, through efforts made in the House of Commons, talking to the minister and getting in touch with the regional people of the CNR, we were successful in getting that fish picked up by the next train two days later. This meant that the fish had to be held on ice for that length of time. However, the fisherman was able to complete his fishing season.
We thought that everything was in place and that the CNR would continue to transport fish. When I went to CNR officials and presented the problem to them, the answer that 1 received was, "We are sorry, we do not have any facilities or any equipment for hauling fish". 1 said, "Sirs, you have been hauling fish out of Manitoba since that rail line has existed, so don't give me that hogwash because it certainly does not wash with me." This is the attitude which seems to be taken every day now. When services are cut back, it is hoped that people will not say too much, but those ribbons of steel which go into northern Manitoba are the economic future not only of Manitoba but of much of the rest of Canada.
When we consider the extraction of Arctic gas and oil which is taking place we must bear in mind that these rail lines will be very important. Road construction in the north at today's prices and because of muskeg and permafrost costs about $1.5 million to $1.75 million per mile.
When I spoke about the 250 to 300 fishermen affected by the increase in freight rates and the refusal to handle fish, I did not mention other people who are put out of work. People on shore who handle fish, packers and others, are involved. Seven hundred people are actually affected just along that portion of track alone.
This is not the only cutback we have seen. Recently it was arbitrarily decided to discontinue the service at Pikwitoni, which is a small community of about 350 people. It was decided to take the agent out of that community. There are no banks there. The people there depend entirely on the CNR to send money orders out. Many of the people have their groceries brought in by the railway. With no agent there a person cannot buy a ticket to get on the train. There is no one there to receive any shipments, but a dear price is charged for shipments into that community whether those shipments contain oil for stoves, gas for boats, which are used for fishing, or groceries.

March 3, 1978
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When the decision was made to close Pikwitoni, people argued desperately for the retention of the agent so that their goods could be received. However, in the wisdom of whoever it is who decides, the station was closed.
As recently as February, 1978, a decision was made by CNR not to close places like Ilford, Thicket Portage, Cranberry Portage and Sherridon. That decision was arrived at after some consultation with those communities. At first it was decided to close those stations, but then the CNR went to the various communities and held meetings. 1 want to compliment those communities because their mayors, councils and advisory committees met with officials from the CNR. They presented a good case and told the railway in no uncertain terms that those stations should remain intact and that the agents should remain at those stations, not only for the good of the communities but also for the simple reason that it would be a safety measure if trains would actually use the track. It is good for those communities to have someone to handle the goods being shipped in and out.
I would like to read some of the comments of the mayor of Thicket Portage when it was decided to withdraw these services from the community of Thicket Portage, as follows:
Dear Cec.,
We listened to your recent broadcast outlining the joys of having the CNR increase its grain shipments through the Port of Churchill. . .
I was referring then to the Hall Commission report.
In order to provide some goodies to northerners the CNR was saying it would increase grain shipments to Churchill. At least that is what the Hall Commission report said, but I do not know how we are going to get this government to act on some of the Hall Commission recommendations. In a statement not too long ago the Minister of Transport said he had still not determined whether the Port of Churchill is a viable operation.
The mayor of Thicket Portage went on in his letter to explain how discouraging it is for a community which is totally dependent on the railway. Thicket Portage is a community of some 400 people. It has started a market gardening project so that it can ship vegetables to other communities in the north. This is a first for Thicket Portage and a first for the north. The community did not know what to do with the goods it produced, because if there was no agent at the station, there would be no way to load goods onto trains. One shipment of potatoes was made. The shipment had to go only 55 miles, but that took two weeks. By the time the potatoes arrived they were sprouted and soft, but the full rate had to be paid. There was no discount.
The mayor also pointed out that when the CNR was first established in that part of the country, people became totally dependent on it. They have no other means of transportation. The mayor of Thicket Portage lives in the north. He and many other people have survived there for a number of years. They are trying desperately to find jobs. They are not satisfied with living on welfare and on Canada Works projects. They want to contribute to the tax base of this country. I for one can vouch that people in the north are able to work and want to work. I
[Mr. Smith (Churchill).l
wish I had the time to read this whole letter from Mayor Bob McCleverty of Thicket Portage, because it is a masterpiece.
Circumstances similar to the ones I have just outlined jeopardize living in northern Manitoba. As I said before, the CNR is to blame for much of this because it does not appear that there is any consultation with the communities involved whatsoever. Arbitrary decisions are made and people become involved after the fact. It is about time the CNR and the government realized that we have more than polar bears in the constituency of Churchill. We also have many people who are very concerned Canadians and who want to contribute to Canadian society.
I would like to speak about a couple of fishermen at Pukatawagan. I am sure, Mr. Speaker, that you do not know just where that is, but it is about 99 miles north of the Pas on the way to Lynn Lake. The people of Pukatawagan must move from lake to lake on the CNR. They have no choice. In this particular case these fishermen loaded their two boats onto the train and were transported about 35 miles. The fishermen unloaded the two boats themselves. They received a bill from the CNR for $294, or 1.96 cents per pound. In the face of that how can people who depend on the railway and who have no other means of transportation possibly survive? They just give up in frustration. They wonder what is the sense of trying to do anything. Because of some new policy regarding cubic footage, if a person has a full carload he must pay on that basis. It does not matter whether you have one box of fish or fifty-you pay the same price. That is fine if you are gathering from a large area, but many of these fishermen gather from a very small area and this sort of thing is hard on them.
The mayor of Ilford, Manitoba, Mr. Kip Thompson, depends totally on the CNR, and if I had time to read some of his letters into the record 1 am sure they would bring this government down tomorrow.


Stanley Howard Knowles: Read them!


Cecil Morris Smith: Of course the government is coming down very shortly anyway. One way to make sure to get rid of them would be to put them all on a train to Churchill.
Ilford, Manitoba, is a centre for shipping goods to places like Oxford House, Split Lake or York Landing. What has happened over the years is that the CNR delivers the cars to a siding where the goods are unloaded and then transported inland. In the last two years whole carloads of goods have been lost on that 510-mile railway. Mr. Speaker, they do not run off the track into the bush. Many of the goods lost are perishables.
I should like the government to check on the demurrage charges and the claims along the Hudson Bay Railway because I am sure the amount paid out is astronomical. There does not seem to be the will to deliver a piece of equipment or a box of groceries intact-any more. It seems as if the CNR is doing everything in its power to discourage people from using it but, of course, where there is no other means of transporta-
March 3, 1978

tion, people have to use this line in order to get the goods through.
The Railway Transport Committee Order No. R-25988 reads in part as follows:
IN THE MATTER OF the application of the Canadian National Railways to discontinue their passenger-train service between Winnipeg, Thompson and Churchill, in the provinces of Manitoba and Saskatchewan, comprising Train Numbers 90, 91, 92-94, and 93-95,
The next paragraph begins the same way and continues as follows:
. . . passenger-train service between Wabowden and Gillam and between Gillam and Churchill, in the Province of Manitoba, comprising Train Numbers 294 and 295,
It goes on in the next paragraph:
. . . between The Pas and Lynn Lake, in the Province of Manitoba, comprising Train Numbers 290 and 291, and
The next one reads:
. .. their passenger-train service between Flin Flon and Osborne Lake, in the Province of Manitoba, comprising Train Numbers 280 and 281,
What this amounts to is an application to discontinue the passenger service into northern Manitoba in total. Thank goodness the committee decided that the trains that ran between The Pas and Lynn Lake, The Pas and Churchill and also up to Osborne Lake, should not be discontinued. Even though the CN pointed out that they are running at a deficit, they are still providing an essential service. There is an obligation on the Crown corporation to provide these services even though they may be operating at a loss for the time being. Perhaps the present type of service is not the best one and we should be looking for a better and faster means of transportation such as dayliners and other things.
Mr. Speaker, I should like to thank you for giving me time to point out why I feel the bill should be discussed. 1 think people from all parts of the country should give their views on the recapitalization of the CNR.


Some hon. Members:: Hear, hear!


Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker, we have before us this afternoon Bill C-17 which has come to be known as the CNR bill. The main thrust of the bill is the removal of some $800 million of debt from the CNR. This does not eliminate the debt, however, because before the bill came down there was a long term debt of $2,238,000 of which there is $1,438,000 remaining.
The minister said in this House that this $800 million debt should be removed so that he will not have to come back to the House for regular assistance to the CNR. A number of years ago a debt was removed which was supposed to fix things so that the government would never have to come back to the House requesting assistance for the CNR, and over the years there has been a total tax relief of debt to the CNR of some $6.7 billion. I would not be too unhappy about that if we had a transportation system, especially in western Ontario and the Atlantic provinces, doing what is necessary to enhance transportation in this country. Instead, we find the CNR trying to follow the lead of its competitor, the CPR, which has become
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one of the biggest industries in Canada although not completely in the field of transportation. The CPR is widely and strongly assisted by the coffers of the federal government which, of course, means the taxpayers of Canada.
We had a prize example when the CN tried to build one of the biggest edifices in Canada, the CN Tower in Toronto. Large amounts of money were probably blown which really did not have anything at all to do with transportation in Canada. CN has other similar interests. It has tried to follow the CPR. But it is not really providing a rail service of transportation that we need in Canada. It should not be trying to follow the CPR. It should be out showing the CPR what transportation is all about. It should be an example for transportation in Canada. It should become the best. It should be doing all of the things necessary to become one of the top transportation companies in North America.
1 have to say that I think CN management have fallen into the same trap that government bureaucrats do. They have become top heavy at the executive level. They have not really put out the effort which is necessary in the transportation field and that is vital to Canada. We have many transportation problems in western Canada. Whenever we have a first ministers' meeting it is one of the top items on the agenda as far as the western premiers and the premiers from the Atlantic provinces are concerned.
Last year I travelled with the transport committee into the Atlantic provinces. I was astounded to find the same problems exist in Atlantic Canada that exist in western Canada. The railways were charging what the traffic would bear. This is the way they use what we might call "the two ends of Canada". They charge whatever rates the traffic will bear, whatever they can get. There is neither rhyme nor reason to their transportation rates.
There is an obligation on the railways because of the large amounts of money which have been transferred from the taxpayers to the CNR and, of course, to the CPR over the years. They have an obligation to ensure that we have a good and proper transportation system in Canada.
I have a brief here that was written by the Canadian Transport Commission concerning the fruit industry of the Okanagan valley. Over the years the Okanagan valley has been under the gun from the transportation companies because they charged and they still charge what the traffic will bear. They do not begin to compete with their railway counterparts in the United States, bearing in mind that the fruit producer, the farmer, has to compete with the producer in the United States. Apples are allowed to enter Canada duty free. There is no tariff. We do not mind this sort of thing. It is only when we find ourselves being discriminated against as far as charges are concerned as well as some of the other related industry costs that we begin to wonder what is happening to us.
We have made many representations to the railways, and quite a few to the Minister of Transport (Mr. Lang). We have made them to the Canadian Transport Commission. This is a
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fairly thick document but it does not really say too much about transportation. That, Mr. Speaker, is in my opinion what the CTC should be concerned about. They spend more time telling the fruit growers in the Okanagan valley what is wrong with them. They are not really researching to find out what is in effect wrong with the transportation companies, wrong with the rates, and wrong with the charges that we have imposed on us by the CNR and the CPR in freight rates. It was so frustrating to the fruit growers because of the difference in rates between the Canadian railways and the American railways that they have practically turned to truck transportation.
A few years ago I was heavily involved in that industry, and with the agreed charges on rail rates we had to consent to send 60 to 70 per cent of our produce over the railways to get a lower rate. What happened was the railways would not, did not, could not supply the cars. They did not hold up their end of the bargain. They were the ones who said, "If you want a lower rate we will have an agreed charge. You must agree to send most of your product through us". But they could not deliver the goods when it came right down to it. They did not have any intention to deliver. We had frustration after frustration. We saw our competitors' produce coming into western Canada and going into our export markets. We were not able to compete because the transportation facilities were not there.
When I look at the $6.7 billion which the taxpayers have transferred to the CNR over the years I wonder why they have not been able to deliver the goods and become a top transportation company in Canada. That is one example. There are many other examples in western Canada of exactly the same kind of treatment that industry producers and farm products have received. We can talk about them over and over again. A former minister of transport got up in this House and I was here when he did so, threw up his hands, and said that transportation in Canada is in a mess. He was right.


Mr. Woolliams:: They sent him to the Senate.


George H. Whittaker: My colleague from Calgary North says they sent him to the Senate. That is exactly what happened. That is exactly what he got for identifying the fact that transportation was in a mess. Then they brought in the big man from Saskatchewan to become the Minister of Transport. He is pretty good at covering up; however, we do not have a better transportation system. We are not getting better service. Nothing is any better than it was before, even though the Minister of Transport said the other day that the mess in transportation in Canada has been cleaned up.
I do not know who the minister is trying to fool. 1 do not know why he would try to kid the people of Canada unless it is because there will soon be an election.
Every time 1 fly into Vancouver 1 can see 22 vessels in the harbour waiting to be loaded with grain. It is great that we have these grain sales. Without them, our balance of trade deficit would be much greater. Our imports would be much greater. Grain is the one item that makes our agricultural

exports look good. However, it is deplorable that the grain cannot be delivered to the harbour at Vancouver and that the ships must wait there. They must pay demurrage costs of up to $500 a day. Who pays that? It is the farmer of western Canada. This is only because the transportation companies cannot make their deliveries.
If the mess has been cleaned up, why did the Liberal premier of Nova Scotia say to the minister, "For God's sake, forget user pay", something the minister has been pushing very hard? He is transferring $800 million in debt from the CNR and then talking about user pay. Over the years this has involved $6.7 billion of the taxpayer's money. Instead of user pay, why not do what is necessary to deliver the wheat from the prairie provinces to the coast?
Why did the western premiers circumvent the Minister of Transport and call on the Prime Minister (Mr. Trudeau) to implement the crucial provisions of the Hall report? Of course they were rebuffed by the Prime Minister.
The other day we heard what wonderful things the Liberal government is doing with the Hall report. Of 90 recommendations, it is going to implement five or six. The government is making a lot of the fact that it might accept five or six recommendations. Is it a coincidence that the western ministers of transport are meeting with the Minister of Industry, Trade and Commerce (Mr. Horner) rather than the present Minister of Transport? The Prime Minister could not give the Minister of Industry, Trade and Commerce the transport portfolio because the present minister wanted to retain it. That hon. member walked across the floor from this party because he had been promised a cabinet post. He is now taking on part of the job of the Minister of Transport as well.
It is cheaper for Canadians to travel abroad than to travel within their own country. I can fly to London for less than it would cost me to fly from my home to Ottawa.
The Minister of Transport says that he has cleaned up the mess. Many areas are just as messy or even more messy than when the former minister of transport-


Otto Emil Lang: Mr. Speaker, will the hon. member permit a question?


George H. Whittaker: Yes, Mr. Speaker.


Otto Emil Lang: Mr. Speaker, I appreciate the hon. member allowing me to ask a question. It is important for me to ask whether the hon. member recognizes that he is referring to something of old when he refers to fares abroad being cheaper than fares in Canada. Today if one compares schedule fares to schedule fares, they are on a rough par. If he compares charter competition fares to charter competition fares, the rates in Canada are in fact the same as those abroad. That is an example of how we have cured a problem which previously existed.
The hon. member referred to the CNR and the capacity of the rail system, making critical comments about it. Does he recognize that just yesterday CN announced the completion of calculations for 1977, that it has carried more freight than
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ever before in its history and has made the highest profit, after payment of full interest on debt, since 1943? That is further evidence he might take note of in seeing how things have changed in the last few years.


George H. Whittaker: I thank the hon. minister for his interruption. He wanted to ask me a question, but instead made two statements. He said that if you compare air fares, you will find they are about equal. He is talking about charter flights in Canada that have just been introduced. There would be no problem for me to get a charter flight out of Canada to almost anywhere in the world. However, it would be a big problem for me to get a charter flight in Canada between my home and Ottawa. The government is only trying to kid the people into believing that it is doing something.
The minister also stated that CNR is handling more traffic today than ever before. We heard the same statement last year in committee. Canada is bigger today, with more people and more things happening than ever before. The percentages are not that great. The transportation services that are required are not being provided. I would not be a bit surprised if the figures which were released included the truck traffic which has come about as a result of both CNR and CPR buying out trucking companies and taking over that traffic. So they don't really have to keep their rail lines going. Once they get into that area of activity the cost falls mainly on the provinces and the municipalities which supply and keep up the roads.
Today the railways are hauling large quantities of coal and other products of heavy industry. The lumber industry in western Canada has picked up considerably, another development which has been helpful to the railways. But any increase in activity which has taken place is in spite of the railways, not because of them. The situation with regard to the transportation of apples is typical. We can haul our produce out of Okanagan across the border into the United States, load it into U.S. cars for transportation east and still end up with a rate which is much better than that quoted by Canadian railways. Of course, it costs us more than our competitors have to pay because they are not obliged to spend money trucking produce across the line. The brief 1 have here tells us all about that situation. It also tells us what is wrong with the fruit industry; labour costs are too high, and so on. But it does not tell us why the rates charged by the CN and the CPR are so high.
That is what the CTC's job is. It is not to tell the fruit grower what is wrong with his industry. One of the reasons that fruit growers are finding it hard to compete is the much higher rate of transportation between western Canada and cities such as Toronto and Montreal. The Commission should get down to doing its job. The Commission should take its responsibilities more seriously, take charge of what is going on and stop cozying up to the railways. As we know, the minister brought in a bill last session having a bearing on this question of supervision. He withdrew it quickly, of course, after only a few speeches had been made on the subject; maybe too many people thought that if the minister were to take the responsi-
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bility into his own hands things would be even worse than they are now. As I see it, we need to strengthen the CTC and ensure that it does the job it is supposed to do. It is not the minister's job to become a kind of dictator in this area. If my proposal were followed, maybe we would get more sense and better service.
1 had intended to say a few words about rail line abandonment even though it is not directly involved in the bill before us. When the CN and the CP abandon rail lines, as they are prone to do, the corridors, the rights of way, should revert to the Crown. I have put forward a private member's bill on this subject. When I use the term "revert to the Crown" I have in mind the federal Crown. That is really the only way in which I can present the case to this House because, after all, we are the federal parliament. But I would have no quarrel with the idea of the rights reverting to the provincial governments or to the municipalities concerned. When I first introduced this idea to the House-and I believe the Minister of Transport (Mr. Lang) would agree that I was the first to introduce it, whether he likes it or not-rights of way which had been abandoned went back to the railway companies, which meant, in effect, to one of their real estate subsidiaries; the CNR has one and Canadian Pacific has a big one. As soon as that happens, everybody had better look out.
Mr. Speaker, the corridors the railways are using today should not be closed, particularly in cities or areas where it would be very expensive to buy them back if and when the supply of fossil fuels comes to an end and we are obliged to place far better reliance on rail transportation. I do not know whether this will happen in my lifetime, probably not; but it may very well happen in the lifetime of my children or my grandchildren. Suppose the rail corridors through Penticton were sold. There would be just no way of getting them back at anything like reasonable cost. The railway companies do not care. They do not have a sense of responsibility any more, but the government will be back where it started so many years ago when it faced the responsibility of setting up communications from one end of the country to the other.
The Minister of Transport wants to make a deal with the municipalities and the provinces. I think he should warn them that if they sell off this property the responsibility for restoring it, should railway communications be needed again, should be theirs. The taxpayers of Canada as a whole should not be saddled with the cost. In my view it would be much better to make sure that these corridors are left open.
I realize it is the intention to forgive the CNR some $800 million more of its debt. 1 say to the management of the company and to the Minister of Transport: Get busy and live up to your responsibility, which is to provide good transportation. We need it desperately. We need much better service. If we have to have some shake-up in the CTC and in the management of the railways to get it, then let us do it. Let us get on with cleaning up the mess. Let us not try to kid people into thinking it is cleared up.
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Sinclair McKnight Stevens: Mr. Speaker, in joining the debate on the bill before us, I do so not only with a national interest in mind but also with the interest of my area, the riding of York-Simcoe, very much in mind. We have lived for some time with this question of our transportation problems, and the question of inadequate ministers in the portfolio of the Minister of Transport (Mr. Lang) in this decrepit government that we have in Canada. Perhaps there is no place where the inadequacy of this government shows more than with respect to its operation of Crown corporations.
Fundamentally what the government is proposing now is the third sequence of burying previous mistakes with respect to previous activities of Crown corporations. Most of us realize that the excuse given by the government for this refinancing and recapitalization bill is that the CN is carrying too heavy a load of debt in relation to its equity, if that can be believed; and if the CN is relieved of its burden of debt, somehow it will go on to even better and more profitable heights. In short, relieve them of their debt and they will do better. That seems to be the message of the government, if one believes its spokesman and if one reads what the bill proposes.
In the few brief moments I have at my disposal I should like to touch on how that debt occurred. What in fact has caused the ratio between debt and equity which the CN now complains about? How does that ratio compare to its main competitor, CP? Why does CP happen to have a better ratio between equity and debt? I will deal with these areas in more detail shortly. The short answer is that CP has been able to make better earnings and better profits. In turn, that has allowed CP to build up its equity, which of course means less debt and a better ratio between debt and equity.
Also I should like to touch on the point why a government directed Crown corporation has to run in the loss position which we have experienced in CN over so many years. What goes wrong? What goes wrong that operations under the direction of government are not able to remain viable or profitable? It is partly because in the government's mind there is never a bottom line to the operation of a Crown corporation. There is never any feeling that somehow that operation, if it is to run efficiently, probably should be showing a profit.
The basic ingredient found in most businesses in the private sector is that those who invest expect to make a profit on their investments. If they do not, they start asking where the inadequacies are. They demand changes and they get changes. In short order, if they are running substantial losses, they are bankrupt. The reason I refer to this is that we deal in government in a never-never land. The government of the day for political expediency, as has been followed by the Trudeau government so religiously, agrees to non-viable ventures or activities, realizing that money will be lost, but somehow having a vague feeling that the results will be buried in the over-all estimates for the cost of government doing business and that no one will feel the pinch. The hard fact is we all eventually feel the pinch.

The pinch we are feeling was dramatically brought out during oral questions today. We asked the Minister of Finance (Mr. Chretien) a very simple question. We asked him what he proposed to do to reverse the balance of payments deficit in this country, which has been running chronically in a deficit position since 1973. Also we ask him what he intends to do to reverse that position, which is causing our dollar to collapse on international markets and is causing us to borrow more and more funds that will have to be repaid, including interest, some day. The Minister of Finance did not have the slightest suggestion to give to the House as to how he proposed to correct that fundamental error. He could have suggested that he would start running some of our activities, such as the CN in a more efficient manner. He could have suggested making them more productive in order for them to deliver better service to their clientele, at the same time as saving Canadians a huge amount of outgo in loss.
It is very, very nice for the government of the day to represent that the write-off it is asking the Canadian public to digest is simply a write-off of previous years' losses, or depreciations which should have been declared in earlier years. Also it is nice of the government to indicate, if that is cleared away, that somehow the CN will do better. When it is indicated that the depreciation should have been written off in previous years, the other side of it is that the government, in tolerating that lack of proper accounting, deliberately distorted the balance sheets of the CN in order to show a better picture over those years. That is the truth. The government tolerated an accounting principle which allowed CN to look somewhat better than otherwise, because it did not want to accept the complication of the adverse deficit position which the CN would show if proper accounting had been applied. That is a classic public service move. It is classic in the sense that it helps for the political future to disguise the facts. If that had been done in the private sector, it would have been damned from on high by the government of the day.
For political expediency, the government chose to distort and falsify, from an accounting standpoint, the statements in order to make them look better; accumulate what we are now being asked to write off, and who knows the difference? Unfortunately one can play with figures and his accounting approaches, but someone has to end up paying. If it was the Prime Minister (Mr. Trudeau), I would not feel so badly. Unfortunately it is not. He pays very little in taxes. The people who pay for the sheer, reckless, irresponsible mismanagement of this government are Canadian taxpayers. It is you, Mr. Speaker, I, and millions of others. Now we are being asked to agree to a new patchover in the case of CN.
Having spoken about that, I think no one should join in a debate touching upon the CN and the entire question of transportation without dealing generally with the whole question of the lack of proper commuter urban transit facilities in Canada. That brings me to what was one of the most colossal misrepresentations that any prime minister has ever come out with in the history of Canada. Of course, I am referring to the fact that our Prime Minister, in the midst of the 1974 election
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campaign, solemnly vowed to inaugurate a $290 million program to aid urban transit in Canada.
Many who at that time still trusted the Prime Minister accepted his word. I can only assume that some even voted for him because he had spoken so forcefully about assisting urban transit in this country. That trust has been breached. In Toronto on June 17, 1974 the Prime Minister said:
-the federal government will pay 100 per cent of the cost of new commuter vehicles manufactured in Canada and 50 per cent of the cost of new stations and platforms forming part of the system . . .
He also promised "a Liberal program which would pay 25 per cent of the capital costs of all vehicles purchased for public transit". Those were the promises and many people put their trust in what was being said. The Prime Minister assured us that these promises were not pie in the sky. However, we soon realized that the immediate past minister of finance, the former member for Rosedale of all places, knew different. He told a Toronto press club conference that the government, after having spent more than $110 million to date on the stillborn Pickering airport development, and after spending another $400 million on air transport related industries, has no money left to carry out its election promises that had been so solemnly given by the Prime Minister of this country.
To me this is a clear example of the mistaken priorities of this government, and this augurs poorly for the tens of thousands who commute in the Toronto area each day. In my own area alone nearly every major urban transit project is now in jeopardy following the broken promise of this Prime Minister and his little servant, the Minister of Transport.
1 recite these things because I think the day has come in Canada when politicians must realize that such broken promises are unacceptable to the Canadian public and will no longer be tolerated. In my area in particular there has been great concern in respect of the activities of our rail transit facilities and the activities of the CNR, particularly in view of these broken promises of the Prime Minister.
I have received in the form of petitions and letters over 600 requests from constituents asking me to urge the government to reconsider its priorities and to honour its vital commitments to assist commuter interests in the Toronto area as well as in the York region and Simcoe county. I have the addresses and the names of these people who have written me recorded in the 600 petition forms, all available for delivery to Mr. Speaker on Monday. In short, we have 600 concerned Canadian voters who have indicated complete disdain for the broken promises of our Prime Minister and who intend to press their request for better commuter service in the Toronto area with all the means at their disposal. Let there be no doubt; between now and the next election, whenever it occurs, I intend to write each of those constituents bringing them up to date on the activities of this government with regard to commuter travel in the Toronto area.
Let me deal with another specific. The CNR, as most of us know, has a main line that runs from Toronto up through
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Maple, King City, Aurora, Newmarket, Bradford, Lefroy, Stroud and Barrie. This was one of the earliest established rail lines in what was then known as Upper Canada. At one time it was a busy passenger route for people going to and from Toronto. This line was used at one time by many passengers who lived in the area and worked somewhere in Toronto or immediately north of the city. Then through lack of foresight on the part of this government and the inefficient operation of the CNR, we found that systematically that passenger service was phased out of operation. Systematically the passenger services on that line were downgraded so that eventually there was no railway at all. The hard fact is that as a result of the dissatisfaction the people who live in that area and their rather vehement, if you like, demands, we did get the promise of a commuter train. When did we get it? We got it on the eve of the 1972 election.
The Secretary of State (Mr. Roberts) who then represented the riding of York-Simcoe, in an eleventh hour repentance, somehow got someone at the government level to state the CNR would run a trial run on the line I have referred to, beginning a few days after the election on October 30, 1972. It was very fortunate that the constituents of York-Simcoe were discerning enough to realize that this was nothing more than a ploy; that it was just a base, disreputable, political ploy on the part of the government of the day to help the sitting member who was having difficulty being re-elected in that riding. The fact was that the government did not get re-elected with the majority it anticipated and the sitting member was defeated. That is why I am here. They did start a trial run and found it was amazingly successful. The government then tried to kill it, but having a minority government it did not have the guts to do so in face of the protest of those who still lived in the constituency.
The reason I refer to this is that we are now hearing ugly rumours from the bowels of this decrepit government, that somehow it thinks it may now be politically acceptable to kill that commuter train which has been running from Toronto up to Barrie. What I want from this Minister of Transport before this bill is passed is an unqualified commitment that the government will reverse its plans to end that commuter service which now runs between Toronto and Barrie. There is no reason to discontinue that line. We know it is marginally profitable-even those at CN will tell you that privately-and the figures speak for themselves.
Nevertheless this line has been carrying ever increasing numbers of commuters to and from Toronto. For example, in 1976 the total number of passengers who rode that train was 128,884. In 1977 the number was 146,037, or a percentage increase of 13.3 per cent. Most significantly, we find that in January 1977 there were a total of 309 who travelled south on the train and 301 who came back on an average each day during the month. Those are daily figures. In January, 1978, the figures down to Toronto were 388 and up from Toronto 379, in each case an increase of over 25 per cent. What those figures show is that the commuter line is becoming more and more popular with rising energy costs. With the congestion on

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roads leading to Toronto, more and more people are starting to use the train service. 1 think this is not the time for the government to be considering the termination of that service, as has been rumoured.
What is unbelievable is that while the government quibbles about running that line, they have absolutely no quibble about the foolish idea of trying to establish a second airport at Toronto, namely, the aborted Pickering development which still lies in disarray to the east of my riding. Think, Mr. Speaker, of the money that they poured into that development, the good farm land that they destroyed by forcing out various farmers. Some $10 million has been devoted to purchasing land alone. The reason I emphasize this is that clearly we have a government whose priorities are completely out of whack.
Twenty years ago perhaps it made sense for them to be concentrating on aircraft and airport type development; but today technology has changed, people's thinking has changed and energy is becoming much more costly. We are in an era when commuter train travel should be particularly encouraged, not discouraged. The day has come when this government must be convinced to stop pouring hundreds of millions of dollars into white elephants such as Mirabel and other airport developments when those people who are going to and from work on a daily basis need better facilities to get them to and from work. That is the hard issue, and it is time that this cold, politically oriented government realized the facts. We do not need a Pickering airport in the Toronto area, we need better commuter transit facilities, and if this government will not give these to the Toronto area people, it is time that they were removed from power.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: 1 say that because 1 think it is absolutely intolerable that we have a government which has refused to pay for the expenditure needed to realign the rail lines in the western part of the marshalling yards near Union station in Toronto. They have refused to put up the $50 million that is needed to realign those rail lines, which of course is their responsibility, and as a result of that refusal they have frustrated the GO train development throughout the northwest and western part of Toronto.
I notice the presence here of the hon. member from Mississauga, the Minister of State for Small Business (Mr. Abbott). If he were honest, he would take part in this debate and say there is considerable concern in his area, in his riding, regarding the inadequate commuter facilities to and from the western part of the Toronto area. Let there be no doubt that the reason for the lack of facilities-the Ontario government is willing to provide them and it has reserved the cash to pay for them-is that the federal government refuses to spend approximately $50 million for the realignment and development of the lines. Those are the facts. At the same time, the federal government is tolerating a loss on the virtually stillborn Mirabel airport project of over $50 million a year.

It is time that priorities were straightened out. Surely those who wish to get to and from work should be given a relatively high priority. At a time when we are trying to save energy and we are asking people to use smaller cars, we must enable them to use the railways and the rail cars which are available to get to and from work as opposed to frustrating them and even resisting the development of that type of commuter transit.
If hon. members read the history of CNR they will find that it is a classic example of a Crown corporation being said to be giving great service but in fact steadily downgrading the most meaningful service of all, in this case passenger service for the use of those who need it on a daily basis to get to and from work.
I know our time is limited, Mr. Speaker, but 1 would like to go through some of the quotations we have heard in the past of others speaking on behalf of the CNR who have said to the government: "If you will just relieve us of the debt we have run up, we will be better boys in the future. If we can somehow or other get away from the debt load, we will become profitable in the future".
Surely members of the House have every reason to start suspecting such statements. If there was any evidence-and I hope if the minister has it he can give it to the committee- which would show that if we can go along with this refinancing or recapitalization of CN, they will provide better commuter transit service in Montreal, Toronto, Winnipeg, Vancouver, Edmonton or Calgary, I would say let us get this bill through with virtually no debate-because we are doing something that the Canadian public need badly. What 1 am nervous about is that we will be asked to give another carte blanche and, if this bill goes through, allow them to sweep under the carpet the mistakes of previous years. Then when they have a nice clean book to work on they will be up to their old tricks of cutting down service, increasing their costs, and sticking the Canadian people with a never ending increase in their deficits.
Those are the facts. If this government was serious in trying to orient the CN to a more businesslike approach, why will they not let the private sector buy into the CN? Why will they not make available at least a portion of the CN stock to the private sector? I will tell you, Mr. Speaker, why they will not do that. It is because Michael Pitfield, who sits at the right hand of the Prime Minister, says he does not like the idea; he does not think the private investor in this country should have a piece of any Crown corporation. His voice is much louder with the Prime Minister than that of our poor Minister of Transport. The fact is that we are being run not by a Cabinet but by an elite sitting around the emperor's quarters upstairs, and they have much more influence with the emperor, our Prime Minister, than any paltry minister, including the Minister of Transport.
In committee I hope to explore some of these items a little more fully and to have some questions answered with respect to the operation of CN. Also I would like clearer explanations why this depreciation item was run up in the first place and, secondly, why the CN thinks it can now be virtually dissolved simply by the rather convenient recapitalization to which they
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refer. But, above all, I want to get some hard evidence of what they intend to do for commuter travellers in our major Canadian centres, including the Toronto area.
I think it is time the government was called to task for, first of all, making the promises which the Prime Minister made in the 1974 campaign, and, secondly, for so ruthlessly ignoring those promises, knowing the plight of the many commuters in the Toronto area.
With regard to this plight, Mr. Speaker, 1 would like to extend an invitation to the Minister of Transport. If the minister is willing, I will ride with him on a commuter train into Toronto during the rush hour. I will watch him being jostled into a car. I will watch him standing for 20 to 30 minutes in a hot, crowded car going into Toronto in the morning and back at night, and I will see if he still has that little grin on his face which is like that of a Cheshire cat. The minister knows exactly the problems Torontonians are living with.


Otto Emil Lang: Mr. Speaker, I rise on a point of order. 1 certainly do not mind being jostled, but the idea of being jostled with the hon. member is a little too much.


Sinclair McKnight Stevens: Mr. Speaker, I assure the minister that I do not want to jostle too closely with him either, so we can go on separate cars. It is nice for us to be in this lofty ivory tower atmosphere of parliament and it is nice for the minister to be surrounded by his great bureaucracy, but I wish he would get down to where the action is with the people who are earning the money to pay the taxes to keep this bureaucracy in its splendid condition both here and elsewhere.
I know my hon. colleague would like to participate so 1 will have more to say in the committee. I will have more to say at report stage and at third reading. I repeat, this government has much to answer for with respect to its handling of commuter transit in major Canadian cities.


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, the hon. member for York-Simcoe (Mr. Stevens) and the Minister of Finance (Mr. Lang) were jostling back and forth. The hon. member said he would like the minister to be jostled on a commuter train. I am sure my colleagues from Newfoundland join me in wishing we had a train in which to be jostled.
I am pleased to have a few minutes to discuss Bill C-17 and the refinancing of the CNR. 1 can relate to some of the remarks made by my colleague, the hon. member for Churchill (Mr. Smith). In many ways the northern part of Canada has the same problem we have in northern Newfoundland.
I would like to refer to something which was said by a former minister of transport, Senator Marchand. On March 17, 1974 he noted that transportation policy in Canada was based on the principle of competition. He stated that this principle was in part wrong for Canada because, if we looked at the size of the country and the distribution of its population,
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we could see that we cannot have a transportation network which is economic everywhere. For example, we cannot have an economic system of transport in the north or in those regions of the country which are thinly populated. We cannot have an economic system in regions which are remote from the centre. The former minister went on to say that the principle of competition can apply where there is competition, but it will not work in places where there is no competition.
Over the years my colleagues have made the plea in this House for a good transportation policy in Newfoundland. In a submission presented by a union to the Sullivan commission we find the following words:
Transportation as is the case in all other regions of Canada is fundamental to that particular region's economic, social and cultural development. Railway systems in particular have shaped Canada.
I think the same thing applied when at the time of Confederation it was agreed that a great railway would span Canada from west to east in order to develop all parts of Canada and to take advantage of our resources. Section 31 of the terms of union back in 1949 stated the following:
At the date of Union, or as soon thereafter as practicable, Canada will take over the following services and will as from that date of Union relieve the Province of Newfoundland of the public costs incurred in respect of each service taken over, namely,
(a) the Newfoundland Railway, including steamship and other marine services;
Section 32 (1) states:
Canada will maintain in accordance with the traffic offering a freight and passenger steamship service between North Sydney and Port aux Basques, which on completion of a motor highway between Corner Brook and Port aux Basques, will include suitable provision for the carriage of motor vehicles.
Much history has taken place. Many studies and commissions have been carried out with regard to the transportation system in Newfoundland and in Canada. If we were to recycle all the paper used by those commissions and studies we would probably drive the paper mills out of business.
There are only a couple of points I want to make. The minister knows there is a need to upgrade the Trans-Canada Highway, if it can be called that, in the province of Newfoundland. Anyone who has driven over the Trans-Canada Highway in Newfoundland knows it has deteriorated. The minister knows it needs upgrading. I do not criticize the minister when he indicates that for this purpose we are going to get only $25 million, but 1 do not think that is enough. I realize it is the responsibility of the province to put up the remainder, but we will never do it. I appreciate the fact that $30 million to $50 million has been spent on a highway to the Great Northern Peninsula so that advantage can be taken of the natural resources there, but that highway must be coincidental with the Trans-Canada Highway from Port aux Basques to Deer Lake, which starts in the Great Northern Peninsula.
I hope the minister and his colleagues in cabinet will recognize that if we want to take advantage of the natural resources we have and if we want to contribute to Canada as a whole, we must have an economic base, and part of that is a proper transportation system. There can be no justification for the

March 3, 1978
Railway Act
present condition of the Trans-Canada Highway on the island of Newfoundland.
Mainland Canada, God bless it, has a Trans-Canada Highway and a rail system built to a higher level of performance than those in Newfoundland. We cannot accept a lower standard for the Trans-Canada Highway or for the rail system on the island of Newfoundland. The Trans-Canada Highway must be brought up to a standard which will permit the safe and efficient movement of private automobiles, trucks and buses for passenger movement. We need a standard to meet the requirement for the short and medium term for the movement of passengers.
The present road cruiser service does not come close to providing a satisfactory passenger service. I am sure that the only part of the Trans-Canada Highway in all Canada which is below standard is found in the province of Newfoundland. 1 think it can be said without any fear of doubt that the CNR, which is responsible for maintaining rail freight and express service, has now abandoned that service and is moving toward using rubber traffic. The increase in the use of rubber traffic in Newfoundland on the Trans-Canada Highway has increased by 424 per cent. The number of trucks using the highway has increased from 200 or 300 to 2,800 in just the last five years. I hope the minister recognizes that and that to contribute to Canadian society and the Canadian economy we must build up the Trans-Canada Highway in Newfoundland.
Another problem which has arisen in my district concerns the coastal service. The city of Corner Brook has been the port and distribution point for goods and services going to the Great Northern Peninsula, the northern part of Newfoundland, and Labrador further north. Through some agreement made in 1968 or 1969, this service was to be abandoned in favour of a service between Blanc-Sablon in Labrador and St. Barbe. The subsidy provided is adequate and will give a much needed service across the Strait of Belle Isle, but we should not trade off that service for the greater service from Corner Brook up the Great Northern Peninsula and to Labrador. Now the wholesalers and sellers of goods and services in that area will have to use the Trans-Canada Highway to transport goods to Lewisporte and then transship them down the coast, which is more costly and inefficient.
I understand there is a commitment to get second reading of Bill C-17 and Bill C-7 through, Mr. Speaker. I am willing to go along with that and postpone my further remarks until report stage or third reading. 1 want to repeat that I hope the minister will consider very carefully these two vital needs of Newfoundland. The first is that there should be reconsideration of the amount of money necessary to upgrade and strenghten the Trans-Canada Highway for the future; and the second is that he consider the appeal to the water transportation commission from certain community leaders and businessmen about the coastal service from the west coast of Newfoundland which is so necessary to transport goods and services to northern Newfoundland and Labrador.


James Aloysius McGrath: Mr. Speaker, I should like to take a few minutes to support the excellent remarks of my colleague the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). Perhaps I could pick up where he left off.
I realize that the three maritime provinces have just signed an agreement with the federal government on a 50-50 cost sharing basis for the upgrading of the Trans-Canada Highway. If the minister were honest about this, I think a special case could be made for Newfoundland receiving greater federal participation in the upgrading of the Trans-Canada Highway. He knows as well as I that CN has been downgrading and withdrawing its rail services in Newfoundland since 1968 when it withdrew the rail passenger service, notwithstanding the provisions clearly set out in the terms of union. That is another argument, however.
It can be argued, and perhaps one day will be, that what the federal government is doing with respect to railways in Newfoundland is illegal and unconstitutional. But they are doing it. They are phasing out rail service in the province of Newfoundland, rail service which was given to them in trust by the people of Newfoundland in 1949 to operate for them as part of the agreement of the terms of union. We lost the railway passenger service and we are losing the freight service. They have allowed the roadbed to deteriorate to the point that it is not economic to upgrade it.
The consequence of that is that more and more traffic is being diverted to the Trans-Canada Highway. More and more freight is being hauled across the province on the Trans-Canada Highway by CN trucks. This is causing rapid deterioration of the highway because it is being used to an extent that was never planned. It was never designed to carry that amount of freight.
It was an inadequate road at best because it was hastily built. We are grateful that it was built, of course, because it was the first road across the province, but it is in desperate need of upgrading. It pays the CN to divert traffic from the rail service to the Trans-Canada Highway because they do not have to pay a cent toward maintaining that highway, whereas they have to bear the total responsibility and cost of maintaining the rail roadbed.
For that reason, Mr. Speaker, I think a case can be made for greater federal participation in the agreement to upgrade the Trans-Canada Highway in Newfoundland. The province has held out for a 75-25 sharing agreement and I think this can be more than justified. We do not expect, certainly under this administration, to see any move toward upgrading the roadbed by making the necessary repairs, eliminating the curves and making it an efficient rail line. It has become an expensive proposition as a result of almost ten years of neglect and deterioration. The federal government should recognize it assumed an obligation by allowing CN to downgrade its rail service, both passenger and freight; by diverting freight to the Trans-Canada Highway it has assumed a responsibility toward the cost of maintaining that road.

March 3, 1978

My colleague has described the condition of the road. There are places in the province now where the road is virtually impassable. The province is on the verge of imposing strict load limits because the deterioration is so bad. We do not know what to expect this next spring but we can expect the road will be seriously undermined to the point that it may be necessary to halt traffic altogether in order to make necessary repairs.
That brings me to the next point, Mr. Speaker, the withdrawal of another essential service, CN marine. I see my colleague, the hon. member for St. John's West (Mr. Crosbie) in the House. He has written about this, and so have I. Contrary to the spirit if not to the terms of union, we see in Newfoundland a withdrawal of the administrative branch of the CN marine service from Newfoundland to either Moncton or Halifax. The minister can deny this if he will but the facts speak for themselves.
Notwithstanding the fact that a royal commission was appointed by this government to examine all phases of CN operations in Newfoundland and the undertaking given at the time of setting up that royal commission-that no substantial decisions would be made affecting the service until the commission had completed its hearings, today the CN is withdrawing the administrative branch of its marine service to the mainland. When about 78 per cent of CN marine operations, either the coastal service or the ferry service, arc in Newfoundland, it makes no sense to have the administration in Moncton which is not even a seaport.


The Acting Speaker (Mr. Ethier):: Order, please. It being four o'clock, pursuant to the order made Thursday-


Mr. Crosbie:: Mr. Speaker, I rise on a point of order. We have not had any discussion or debate yet on Bill C-7, to amend the Corporations and Labour Unions Returns Act. Yesterday the House leaders made some arrangement that they were going to have these two pieces of legislation dealt with by four o'clock today. I want to protest against the fact that they did not make any arrangement to assure some time was spent on Bill C-7, which is important enough to deserve some debate on second reading. I include our own House leader; 1 did say "House leaders''. I do not think a bill like this should go through the House to committee without a speech from the government and at least one from the opposition. I want to put that on the record, Mr. Speaker. 1 think it is intolerable.


Yvon Pinard: Mr. Speaker, I rise on a point of order. I want it on the record that it was indeed up to members opposite, particularly members of the Conservative Party, to make sure that the time be fairly divided between the two bills. They had full control over the time allotted to both bills and I ask that
Labour Unions Returns
the motion for second reading of Bills C-7 and C-17 be put immediately as ordered by the House yesterday.


The Acting Speaker (Mr. Ethier):: Order. That was precisely what the Chair was going to do.

In answering the point of order raised by the hon. member for St. John's West, the Chair has no choice but to act according to an order passed yesterday by unanimous consent. Therefore it being four o'clock, and pursuant to an order made Thursday, March 2, 1978, it is my duty to interrupt the proceedings and to put forthwith every question necessary to dispose of the second reading stage of Bill C-17 and Bill C-7.
The first question is a follows. Mr. Lang, seconded by Mr. Jamieson, moved that Bill C-17, an act to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in consequence thereof, be now read a second time and referred to the Standing Committee on Transport and Communications. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Transport and Communications.

Otto Emil Lang: that Bill C-7, to amend the Corporations and Labour Unions Returns Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.


[Stage Direction]
Motion agreed to, bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
The Acting Speaker (Mr. Ethier):: It being four o'clock the House will now proceed to the consideration of private members' business as listed on today's order paper.
[ Translation]


Yvon Pinard: Mr. Speaker, I ask for the unanimous consent of the House to proceed to consideration of Bill C-227 and that all preceding bills be allowed to stand. But meanwhile the hon. member for Winnipeg North Centre (Mr. Knowles) has a point to make about two other bills on which there is unanimous consent.


Stanley Howard Knowles: Mr. Speaker, you will find there have been discussions and an agreement, and my friend from Calgary North is part of the agreement, to

March 3, 1978
Private Bills
take about one minute to finish the proceedings on two private bills that were reported from committee yesterday, Bills S-5 and S-6. One of them is in the name of the hon. member for Regina-Lake Centre and the other one in the name of the hon, member for LaSalle-Emard-Cote Saint-Paul.


The Acting Speaker (Mr. Ethier):: Order, please. Is there unanimous consent that we do proceed to Bill S-5 and bill S-6?


Some hon. Members:: Agreed.


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


PRIVATE BILLS
Stanley Howard Knowles: that Bill S-5, to provide an exception from the public general law relating to marriage in the case of James Richard Borden and Judy Ann Borden, be concurred in.


[Stage Direction]
Motion agreed to.
Stanley Howard Knowles: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.


MARRIAGE LAW EXEMPTION-EUGENE WADDELL AND MARGUERITE BENOIT
Mr. John Campbell (LaSalle-fimard-Cote Saint-Paul) moved: that Bill S-6, to provide an exception from the public general law relating to the marriage in the case of Francois Eugene Arthur Waddell and Marie Anne Marguerite Benoit, be concurred in.


[Stage Direction]
Motion agreed to.
John Campbell: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.


The Acting Speaker (Mr. Ethier):: The House has heard the recommendation of the hon. parliamentary secretary. Is it agreed we waive all private bills and proceed with Bill C-227?


Some hon. Members:: Agreed.


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



PRIVATE MEMBERS' PUBLIC BILLS


Eldon Mattison Woolliams: that Bill C-227, to amend the Criminal Code (invasion of privacy), be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker, I thank the House for permitting this bill to come up at this time because it is very timely. Bill C-227 is a private member's bill to amend the Criminal Code in reference to the invasion of privacy. I will divide my argument into two parts. I will deal with the contents of this bill. However, before 1 do so I want to say this bill has to do with one of the most important questions in reference to civil rights before the Canadian people today.
1 want to read from a book by John M. Carroll entitled "The Third Listener". When I refer to privacy 1 am talking about wiretapping, bugging or any other kind of form of electronic surveillance. This is what the writer says in his book which was written 10 years ago, and the situation is far worse today:
Even when there's no great hurry, getting a court order is a bother, involving a showing of probable cause to believe that the wiretap or bug will produce information about a crime. And, although law enforcers will argue this point by the hour, the fact is that very few taps or bugs produce firm evidence or hot leads. For police officers to go to court time after time for wiretap permission and then never turn up any valuable wiretap permission is embarrassing after a while. It's far easier for them to pool their own money and buy their own private equipment, tap one suspicious phone after another without an order till they find a live one, then get the court order-
With a device the size of the emblem on my ring today one can wiretap at 200 feet or more an hour's conversation between parties, it is therefore with great pride that I move this bill today having to do with a very serious amendment to the Criminal Code.
In 1972 when we had a minority government it was men like Ron Atkey from the Toronto, St. Paul's riding, Gordon Fair-weather, myself and others who pressed amendments to the Criminal Code with reference to privacy of the individual in Canada. Following that, as soon as this government gained a majority they repealed those sections and took away what 1 say has eroded the civil rights of people in this nation.
What does this bill do? It amends sections dealing with the question of electronic surveillance, wiretapping and bugging. It proposes six or seven factors. It outlaws all authorizations, all wiretapping and all types of electronic surveillance in reference to solicitors' telephone consultations with their clients.
1 hear it said over and over again that if you have nothing to hide, what have you to worry about from a wiretap?


An hon. Member:: That's right.

March 3, 1978


Eldon Mattison Woolliams: The hon. member says that's right. I am sorry to hear him say that because the whole idea of confidentiality between solicitor and client is eroded. There are many cases in which this type of electronic surveillance has taken place. I will be quoting later in my address this afternoon very important lawyers, Queen's counsel in Toronto, the Advocacy Society of Ontario, Mr. Chapel and Mr. Cooper.
The whole of the law in reference to electronic surveillance as it pertains to voluntary statements made by any person regarding charges laid, alleged or proposed, goes out the window. In fact, telephones are no longer your friend in Canada, they are your fink. These important trial lawyers say that if you are going to interview your clients, it is safer to go into the park in Toronto or drive out to a farm field in the country. Because no longer can you do business over the telephone, one of the most important instruments for a lawyer and his client.


Some hon. Members:: Oh, oh!


Eldon Mattison Woolliams: Let's be serious for a moment. This is a very serious subject. I do not mind being interrupted, but not with nonsense. Under the Canadian Bill of Rights and under the common law of this country, every person in Canada is entitled to a solicitor, even the hon. member for Leeds (Mr. Cossitt). I want to thank the Chair for agreeing to extra time.
I pay a great compliment to the Chair for granting extra time on so important a subject.
This bill would also prevent the Solicitor General (Mr. Blais) from issuing warrants authorizing wiretaps and, therefore, interceptions by way of warrants against candidates after the writ is issued calling for a federal election. Why do I emphasize that? Under the Protection of Privacy Act, the Official Secrets Act was amended.
The Solicitor General may issue a warrant authorizing the interception or issue of any communication if he is satisfied by the evidence or on oath that such and such may be true. But under what conditions? We are all candidates for one party of another. The act refers to "activities directed toward accomplishing governmental change within Canada''. Good gracious I have been in eight elections, in two of which I advocated a change and we got it. Since then the Liberal party has been in power. Are we going to have a law in Canada that permits the Solicitor General to wiretap candidates' telephones because they advocate a change in government? I say to my friends across the way, what may work for them on one occasion will work against them on another. 1 say in this bill that we must have an amendment to protect political candidates seeking public office so that conversations between them and their supporters or those who may oppose them will be kept confidential. Surely that is the very art of electioneering.
Let me refer to section 6(2) of the Protection of Privacy Act as it pertains to the Official Secrets Act, and also section 6(3) of the Protection of Privacy Act as it pertains to the Official Secrets Act, which refers to activities directed toward accomplishing governmental change within Canada or elsewhere. Of late we have seen three solicitors general come and go. Words
Criminal Code
they utter on Wednesday, speaking metaphorically, with reference to electronic surveillance and wiretapping contradict information on Friday coming from people giving evidence under oath before commissions and from other sources.
The Prime Minister (Mr. Trudeau) stated the RCMP would not have been able to conduct a proper investigation and obtain proper evidence and information with reference to Japanese terrorists if it had not been for opening mail. We have seen solicitors general come and go as quickly as 1 change my clothes. We have heard them say that members of parliament were not wiretapped, yet we find that even the former solicitor general was wiretapped. Electronic surveillance was used against him, and the hon. member for Nickel Belt (Mr. Rodriguez) and we do not know how many others. As the book "The Third Listener" states, we will never know unless it comes out through a witness or a commission. You cannot pry the facts out of the government. Having seen three solicitors general come and go, I would say with that record, beware.
Fourth, this bill declares that all interceptions made illegally that is, by the bugging of telephones-which produce evidence of any kind will be inadmissible as evidence in any court of law against any person unless such interceptions are the result of legal authorization granted by a judge. The reason for raising this question is that the Supreme Court of Canada has set out that the following is the law. In their Lordships' opinion, the test to be applied in considering whether evidence is admissible is whether it is relevant to the matters in issue. If it is relevant, it is admissible and the court is not concerned with how the evidence was obtained.
That is the judgment of the highest court of our land, outside of parliament. In other words, the Supreme Court of Canada has ruled that even if evidence is obtained surreptitiously, by plots, illegal wiretaps or the beating of prisoners, if it is relevant to the issue, it goes in. That is against all the fundamental rules governing jurisprudence and the common law that we have in Canada and, indeed, in the United Kingdom.
I repeat, the Supreme Court of Canada rule as the law stands today is that, even if the evidence is obtained surreptitiously, if it is relevant to the issue it is admissible as evidence. The court has stated that it does not matter how the evidence is obtained. I see some good lawyers across the way. We have a very good Standing Committee on Justice and Legal Affairs. Some members of that committee are not lawyers, but it is a good committee. 1 do not think that any Canadian is prepared to accept that kind of law. On the other hand, many Canadians do not think about this unless they, or their son or daughter, are in trouble.
A few years ago 1 defended people getting three or four years for simple possession of marijuana. I was criticized in my constituency for doing that; I received a letter of criticism. Not long after, the very man who wrote to me said that his son had gotten in trouble as a result of a soft drug, marijuana, and was sentenced. The shoe was then on the other foot.
Time and again the courts have said that if the law goes too far, if we usurp the civil rights of the individual, it is up to

March 3, 1978
Criminal Code
parliament to correct the law. That is what I am recommending today, that parliament correct the law. It is not for the courts to interpret the law the way they wish it to be. When the law is weak, you do not require the order which the law calls for because you can get the evidence in through the back door. As the writer of this book says, you can buy wiretap equipment as small as the insignia on my ring. Then once you find something, you rush to the courthouse to get an order. Even worse, you do not need to obtain an order but can apply to get the evidence in. If it is relevant to the issue, in it goes. I think it is high time we changed that kind of law, which was brought in by people who maintain, as they have with respect to other matters, that they are the great foundation of the Civil Liberties Association.
Further, all evidence obtained as a result of the use of an electronic device, whether lawfully or unlawfully, must be destroyed within two years of the trial and appeals being completed. In other words, after the due process of law has been carried out, evidence obtained as a result of electronic surveillance must be destroyed.
We are building up in this era of technical know-how information banks, which mean that the whole privacy of individuals has been eroded. We shall soon be able to press a button and find out how many times people go to the washroon or how many times they have gone. The time has come to take a look at the law of privacy. I am not only seeking the support of members of my party but of members generally. I see some here today who have spoken out in the Standing Committee on Justice and Legal Affairs; 1 shall not name them because I do not want to leave any impression that I am criticizing people because they have different ideas. If we all think alike, there is no thinking.
I never could accept that if the Tories or Liberals happened to disagree among themselves on some issue there was something sinister about it. I do not always agree with my party and I do not expect the party will always agree with me. I think that is healthy. I am not a trained seal. This amendment is designed to protect a person who has been subject to interception, and anyone violating this rule would be subject to prosecution for an indictable offence and liable to imprisonment for two years. I think we have to put some teeth into this thing.
The bill also restores to the Criminal Code the 90-day notice requirement. Notice must be given to any person who has been the object of electronic surveillance. Nevertheless, a judge is permitted to extend the 90-day period if evidence is produced that longer time is needed to look into offences such as syndicated crimes and conspiracies, especially in the field of drugs. I go along with that, but 1 say that in ordinary cases everyone who is the object of electronic surveillance should be notified after the event. And I go further. 1 say that if there is no legal authorization, then evidence should not be used; neither should evidence obtained as a result of listening in be used. In the absence of such protection, every day an ounce of

freedom goes. There are only so many onces of freedom in this nation, freedom which is being eroded every day. We saw an instance this week in what took place with reference to the hon. member for Leeds.


Mr. Douglas (Bruce-Grey):: Ha! Ha!


Eldon Mattison Woolliams: The hon. member says "Ha! Ha!". Well, 1 shall have something to say about that in a few minutes. I knew a donkey which used to "Ha! Ha!" too.


Crawford Douglas: He ended up practising the law.


Eldon Mattison Woolliams: Well, he may have done so. I have met donkeys in law practice and I have met donkeys in business. And 1 have seen donkeys over there, and I suggest that from the way you talk and heckle sometimes you don't get far off the track.


Crawford Douglas: Takes one to know one!


Eldon Mattison Woolliams: Lord Sankey said in the Woolmington case in 1935:
Throughout the web of the English Criminal law, one golden thread is always to be seen, that it is the duty of the prosecution to prove the prisoner's guilt. . . the principle that the prosecution must prove the guilt of the prisoner is part of the common law of England and no attempt to whittle it down can be entertained.
This principle has been asserted time and time again by the courts of Canada. Therefore, any evidence which is obtained by plots, plans or lies, or secured surreptitiously, should not be admitted. The intention underlying this rule is to ensure that the evidence is true.
Let me remind the hon. member who interrupted me that I have served as counsel during many serious cases and I have found, through interrogation of officers, that sometimes confessions have been obtained which were subsequently shown to be untrue. Suspects had confessed rather than put up with interrogation. 1 have not time to give many examples, but here is one. A Canadian was being beat up in jail in Chicago and he confessed to the Henderson murder which had taken place five years earlier in Calgary and which was still unsolved. What happened? When the police checked the story they found the statement was not true.


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


Some hon. Members:: Agreed.


Eldon Mattison Woolliams: I shall try to be brief, Mr. Speaker. I just want to make one more point to show the House how this matter has got out of hand. I want to quote from Hansard of March 2, 1978, in which the hon. member for Leeds is reported as having said:
I must mention another thing. 1 do not like to do this, but 1 think it is necessary. In that document there was included a statement by Superintendent Bentham of the RCMP in which he summarized a conversation he had with me a few days ago. It is quite true that I had a conversation with him. His statement was accurate with the exception of one point. I think this is a very serious interfer-
March 3, 1978

ence with the privileges of Members of Parliament. 1 am paraphrasing again. Superintendent Bentham reported to the Solicitor General and his superiors that I asked him whether he was recording or bugging our conversation, and that he replied yes. I must tell the House that that is an absolute falsehood. I did ask him whether he was bugging or recording our conversation, and he replied "No". He said, "If you mean I am making notes of what you are saying, yes I am. Do you mind?" I said, "No, of course not."
Mr. Speaker, 1 have had police superintendents back down in similar circumstances under cross-examination. "Recording" is not "taking notes". That is no excuse for that misrepresentation. The report continues:
However, the report he handed to his superiors-which I saw with my own eyes because it was handed to me by the Solicitor General-said that Superintendent Bentham said that my telephone call and the words I was using were being recorded . . .
What manner of nonsense is that? Is it not time we had a law which says that that kind of misrepresentation, that kind of evidence, if it got into a courtroom, should be declared inadmissible? The hon. member for Leeds continued:
I questioned General Dare about this and he said it was just a matter of terminology. I think it is much more than just a matter of terminology. The main point I am trying to brin out is that I feel any Canadian has the right to legal advice.
He asked whether he was being recorded, and he was told he was not. Then he was told yes, by Dare. So the House can see what a frightening situation we are getting into. In fact, we are getting into a very unusual and poisonous climate in this country when these things can go on in reference to even a member of parliament and when we find they are almost condoned and accepted. If this matter should go beyond this great court, this parliament, I hope that any judge would declare such a statement inadmissible on the ground it had been obtained illegally. This was bugging-illegal bugging. No notice had been given, no authorization. There was a complete lie as to whether he was being bugged or not.
Therefore, with all the spirit I have and with all the intelligence at my command, I ask parliament to change the kind of law which is whittling away the privacy of Canadians every day. If the law is not serving the public, no one will have respect for it-and no one will obey it. The law is an ass.


Mr. Ian Watson (Laprairie):: Will the hon. member for Calgary North (Mr. Woolliams) permit a question?


The Acting Speaker (Mr. Ethier):: Will the hon. member for Calgary North (Mr. Woolliams) permit a question from the hon. member for Laprairie (Mr. Watson)?


Eldon Mattison Woolliams: Certainly, Mr. Speaker.


Ian Watson: Mr. Speaker, my question relates to clause 2 of Bill C-227. In the instance where a lawyer is mixed up with the Mafia or any illegal organization, what would the hon. member for Calgary North do? We know that in Canada there is a handful of lawyers who work hand in hand with the Mafia and are part of the Mafia's planning process. For example, in West Germany a group of lawyers acted illegally with a group
Criminal Code
of terrorists. What would the hon. member do in that instance? How would he handle it?


Eldon Mattison Woolliams: Mr. Speaker, first of all I would require proof that these lawyers or solicitors are part of the Mafia. Even the Mafia is entitled to a fair trial and counsel. Everyone is. If the hon. member has any information which indicates that a lawyer is a member of the Mafia and is breaking the law, he should report it to the Law Society of the area in which the lawyer is practicing, whether it be Quebec, Ontario, Alberta or British Columbia. That question is very easy to answer.
Regarding consultation between lawyers and clients, there must be confidentiality. Lawyers cannot operate any other way. That is a fundamental rule. It did not come in just because of someone's whim. It has been the rule for 400 years under the British system of jurisprudence.


Mr. Claude-Andre Lachance (Lafontaine-Rosemont):: Mr. Speaker, I am pleased to take part in this debate because I am interested in the matter, as the hon. member for Calgary North (Mr. Woolliams) realized during the sittings of the Committee on Justice and Legal Affairs last year. That committee was studying the Criminal Code amendments suggested by the government to clear up the Criminal Code provisions governing the protection of privacy and the use of wiretapping when its use is deemed to be necessary.
In any event in spite of my comments on his bill, I am convinced that the hon. member for Calgary North will not think that I am ill-intentioned. Indeed he is well aware of my own concern about those extraordinary investigation procedures when used indiscriminately. He remembers the very specific questions I had then put to the Minister of Justice concerning the use of those extraordinary investigation procedures and safeguards available to individuals involved once those means must be used.
Mr. Speaker, first we must understand why the government of Canada has considered it necessary to include in the Criminal Code provisions specifying circumstances and conditions when wiretapping or electronic surveillance may be used to fight the criminal elements of our society and particularly organized crime. Let us not forget that some years ago, there was no such provision in the Criminal Code. With the development of technology and particularly the increasingly elaborate devices at the disposal of criminal elements and particularly organized crime, it was essential that the government be able to fight the systematic erosion of our society by criminal elements through the use of similar devices just as elaborate, 1 admit, but necessary to help Canadian police forces to bring those criminals to court so that they be judged and sentenced to ensure a better protection of our society. This is the background of the inclusion of these provisions in the Criminal Code. Yet, after four years of implementation, we realized that criminals became more and more sophisticated in their

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attacks against our society and that the existing provisions of the Criminal Code no longer allowed our police forces to fight organized crime efficiently because of the extremely severe restrictions included in the legislation to protect the civil liberties of Canadians.
In all that wiretapping issue, Mr. Speaker, it is absolutely essential that we try to balance as much as possible the protection of civil liberties and the possibility of giving our police forces the investigation tools needed to bring those very well organized criminals before the courts and convict them. This is the issue, the balance between the protection of civil liberties and on the other hand the war, I said "war", against organized criminals who are infiltrating our society to destroy it.
Mr. Speaker, we shall remember that the then minister of justice suggested to expand the scope of the legislation on the invasion of privacy, commonly referred to as the wiretapping law, in order to give the police forces of our country adequate means to fight organized crime. At the time, as recorded in Hansard, I had voiced the most serious reservations about those new possibilities provided to the police. I had expressed the wish that at second reading stage the Committee on Justice and Legal Affairs could examine that question in depth and try to strike that desirable balance between the two elements I just mentioned.
With leave, Mr. Speaker, I will limit myself to purely legal considerations. I somewhat deplore that when discussing a rather technical bill-and I know the hon. member for Calgary North has an obvious interest in that question, and I respect him all the more for that interest and the way he has in the past upheld his ideas in that area-he added at the end of his remarks some considerations that in my opinion have absolutely no bearing on the bill before us today, particularly when he referred to the problems we have had this week in the House when the hon. member for Leeds (Mr. Cossitt) raised a question of privilege, on which has not yet been decided upon.
So, except for this comment which I think shows that the question raised by the hon. member for Leeds has nothing to do with this bill, which is of an extremely technical nature, 1 shall proceed to simply explain the impact one of the clauses of Bill C-227 would have on our legal proceedings and also on the investigation methods available to our police forces.
Mr. Speaker, I refer to section 178(16) of the Criminal Code as worded now, and to the amendments proposed in clause 3 of Bill C-227 concerning this section 178(16). Section 178(16) clearly specifies the cases in which a judge can or cannot accept evidence obtained directly or indirectly by the bugging of a private communication. Mr, Speaker, the hon. member for Calgary North mentioned earlier the case law and the state of the law in common law as far as direct or indirect evidence obtained illegally is concerned. I respect him highly as a lawyer and a jurist and I wonder whether I misinterpreted his remarks, but he suggested that the present state of the law

in common Law is that, as a rule, evidence obtained directly or indirectly by an illegal bugging device could not be admitted evidence.
Mr. Speaker, I feel that it is the opposite and that in 1972, when we introduced these provisions in the Criminal Code ...


The Acting Speaker (Mir. Ethier):: Order, please. Would the hon. member for Lafontaine-Rosemont allow the hon. member for Calgary North a question?


Eldon Mattison Woolliams: Mr. Speaker, I would just like to rise on a point of order, without intending to delay. 1 know the hon. member would not want me to misquote him. I quoted directly from Mr. Justice Martland's judgment. I said that anything which is relevant to the issue is admissible. I was applying that to the common law. What I did say was that to have another law would be contrary to the principles of the common law that governed. 1 am not saying that under the common law the evidence is not admissible. There is the distinction.


Claude-André Lachance: Mr. Speaker, I thank the hon. member for these details concerning his intervention. 1 think it was important because he had given the House a different impression from what he has just explained. But Mr. Speaker, if I may, 1 want to come back to the matter 1 was discussing. In 1972, the government deviated from Common Law tradition by not allowing in wiretapping cases the submission of evidence obtained directly or indirectly through illegal wiretaps, and that was not in compliance with the Common Law at that time.
In 1977, the government did want to realign wiretapping practices with the Common Law tradition and once again I expressed very serious reservations at that time. And in the course of the debate within the Standing Committee on Justice and Legal Affairs which lasted several weeks, the Minister of Justice (Mr. Basford) explained why according to the Department of Justice and law enforcement agencies, it was important to return to the traditional rules of Common Law concerning evidence resulting directly or indirectly from illegal wiretapping. And that evidence was not subjected to legal voir dire, so that any judge could accept or reject such evidence in order that justice be done.
The reasons were quite simple Mr. Speaker, because those so-called voir dire instances during which the judge had to listen to illegal tapes on which the disputed information was recorded, would determine whether submitting, not the tape itself-because it cannot be accepted according to our present law when it is illegally obtained-but indirect evidence, that evidence was not allowed, would prevent doing justice and that therefore he would authorize at that time by law allowing that evidence, if he thought that justice could not be done if he did
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not accept it. Which caused absolutely unbelievable legal delays and slowed down the normal process of justice, and 1 am only quoting facts, I am not making a judgment on the point in question and the soundness or not of the allegations that were made at the time. In any case, that was the reason for wanting to come back to the common law as it existed. At the time I raised a point of great concern to me, namely that from the time a judge must admit as evidence evidence obtained directly or indirectly from an illegal wiretap, the wiretap itself becomes irrelevant in the trial if the Crown decides not to introduce it as evidence. Consequently this opened the door to extremely dangerous police abuses, potential abuses, I admit, but still abuses. And here 1 agree with the hon. member for Calgary North that it is extremely important to protect our society against potential abuses, abuses that I do not fear in the present context of our society but, once again, the law is often there for difficult cases, crisis situations, and who knows when a crisis situation occurs if we can really rely on the established institutions.
Well, I had said, Mr. Speaker, this matter of the relevance of the tap itself was the crucial point of that whole issue because, on the one hand, once again, we want criminals to be sentenced. We do not want a relevant piece of evidence to be ruled inadmissible in a trial on the pretence that it was obtained from an illegal tap or any other means not provided for in the law and consequently for criminals to be able to get away with it and justice not being done. That is not what we want. We want to protect civil liberties and know how to protect them and be quite certain that if that evidence is accepted and a criminal is convicted on the introduction of that evidence, that on the other hand the person who acted illegally in the exercise of his duties, the policeman, the RCMP or anyone else, will not be able to get away with it since in any case as a result the introduction-and here I come to the basic point-of a small provision-it is quite small but it is fundamental-under section 178 (16) of the Criminal Code as it now stands, an amendment that was introduced by the minister before the Committee on Justice and Legal Affairs at my instigation, an amendment which reads as follows, and I quote:
Notwithstanding subsection (1) (which provides for the cases of admissibility), the judge or magistrate presiding at any proceedings may refuse to admit evidence obtained directly or indirectly as a result of information acquired by interception of a private communication that is itself inadmissible as evidence where he is of the opinion that the admission thereof would bring the administration of justice into disrepute.
Here are four words which are absolutely fundamental to this debate. Why? Because they enable the court to call prosecution witnesses to the stand and to ask them: How did you obtain your evidence? Surveillance becomes relevant to the trial and I am convinced-and this may not be the opinion of other members-that we have inluded in the Criminal Code sufficient protection to prevent police forces or unscrupulous individuals from misusing the law and tainting our whole legal
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system. I know that this provision has not yet been tested before the Supreme Court and I am impatient for this to happen. For the moment however, what the hon. member for Calgary North (Mr. Woolliams) seems to want is the guarantee that henceforth the institutions no longer be free to commit inadmissible abuses. If this is what he wants, Mr. Speaker, and I also want it, I believe the provision in section 178 (16), as it now stands in our Criminal Code, is sufficient assurance on this, because at the trial stage evidence that is illegal in itself remains pertinent. Therefore the judge, although he must allow indirect evidence, will be in a position to ask the Crown: Where did you get that evidence? So he can find out whether it has been obtained illegally or not. And through this, the policemen or other law-breaking person that will have willingly abused the law to tarnish our image of justice can be charged at a later hearing, so that improprer practices may be denounced.
Were it not for that provision, Mr. Speaker, 1 would be in total agreement with the hon. member for Calgary North. He will not doubt remember that at that time, 1 cross-examined the minister for more than two months on the implications of the original proposals that would have allowed a judge to accept either direct or indirect evidence from illegal wiretapping. He could never satisfy me on the issue of the pertinence of wiretapping as such, and this is why this provision was finally introduced to meet my own objections and concerns.
Mr. Speaker, I would conclude on this. There are many other things in the bill. It is an interesting legislation, because it deals with two things of concern to Canadians, namely the protection of basic freedoms and the fight against organized crime. I commend him for discussing this today, but I feel that the concerns be voiced while commenting on the bill do not justify the suggestion that the door is now open for police forces to do as they please. Because judicial protection remains, and I myself as a member of this House am confident that our courts can enforce the law while protecting our basic liberties.


William Herbert Jarvis: Mr. Speaker, I welcome the opportunity to speak on this bill because, as my colleague the hon. member for Calgary North (Mr. Woolliams) said, it is a serious question. I also welcomed the contribution, as I always do, of the hon. member for Lafontaine-Rosemont (Mr. Lachance). 1 do not always agree with him-I do not think that is always important-but I think the thoughtfulness behind his remarks is a good indication of how important it is that this be a subject matter which continues to be examined most appropriately in the Standing Committee on Justice and Legal Affairs.
Before I get to that, I want to make a remark on the intervention of the hon. member for Laprairie (Mr. Watson) because he put a very important question and I want to

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enlarge on it, if I may. I do not remember his exact words, but 1 think he referred to solicitors or barristers who may be acting hand in hand with the Mafia. I think we are on dangerous ground when we talk about that. I am sure my colleague would know that there are barristers of great integrity and ability who might attract a series of clients of this nature. But 1 dare say he is not accusing that type of barrister of being part of the Mafia operation, and that was not what 1 took from his remarks. I would point out to him that it is darned hard to tell the difference sometimes.
I do not think the parallel would be a good one, but I will relate to the hon. member what happened to me when 1 was a very new barrister. I had the fortune-I am not sure whether the ill fortune or the good fortune-of securing an acquittal on a sex perversion charge. The next 15 months 1 had every sexual assault, indecent assault, incest and rape case in my county, until some other young solicitor managed to secure an acquittal on a similar charge and, thank heavens, they all went to him. Perhaps the comparison is not a remarkably good one, but I would hate to think that because I attracted all these cases, I was acting hand in hand with that type of criminal.
Let me come to what I believe is the importance of this bill. I believe in its substance but, more important, I believe it is a vehicle in which the matter can become the subject matter of discussion in the appropriate forum, namely the standing committee.
Much has been said about how well and diligently that committee has operated. 1 will not repeat that because it is almost trite now, and anyway, that is the way a committee should operate. 1 do not think we have to brag about that, and I hope it will continue. But 1 want the bill before the committee for one very important reason-at least to me it is important-and it is very seldom that 1 use the Prime Minister (Mr. Trudeau) as the basis for my argument. Among other things, at his press conference yesterday he said he detected a cynicism, a skepticism or suspicion-I cannot remember the exact words he used and I do not know in what context he put it. Well, I detect the same cynicism, skepticism or suspicion. I do not want to be overly partisan about it, but if we look at the national security side, at least one reason for that cynicism is that assurances which were given-perhaps with complete integrity, I do not know; perhaps in all good faith, I do not know-had to be withdrawn, changed or modified. I take no partisan satisfaction in saying that and 1 am sure 1 felt for the various solicitors general much the same as did my colleagues opposite. It is a very serious thing when you are giving assurances to the House and the Canadian people about a
matter of national security and then several days later you have to withdraw them.
With respect to this type of legislation, obviously it can lead to suspicion and cynicism. On the side of the Official Secrets Act, the reporting is very limited. We have all received the report days or weeks ago and we know it is one page long because those are the provisions. One may say, and I might agree, that you cannot have a full report on national security matters because it would not be secret; but I say that we have no assurance whatsoever-as a matter of fact, we have evidence to the contrary-on such matters as wiretapping or the Official Secrets Act, that even the Solicitor General (Mr. Blais) knows of evidence to the contrary. No wonder people are suspicious.
On the criminal side, with respect to organized crime and such things, of course we have to fight sophisticated crime with sophisticated method. But there is a danger in thinking that a husband and wife taking bets in a cigar shop are part of organized crime. Only a vigilant, diligent study of the report that we receive annually will help. That report will have to be studied in committee. I am referring to the report required under the Criminal Code and the Protection of Privacy Act.
I commend this bill to the House as a good vehicle with which to put a serious and important matter before the proper forum, that forum being the Standing Committee on Justice and Legal Affairs.


Maurice Adrian Dionne: Mr. Speaker, in joining the debate on Bill C-227 1 wish to say that the hon. member who sponsored the bill has done a service by bringing it forward because it gives us another opportunity to debate this important matter.
In the very short time available to me, I want to look at the bill from the point of view of a layman rather than a practitioner of the art, so to speak. The reservations expressed by those who are solicitors with regard to the present statutes are understandable when you listen to their arguments, but 1 do not think the majority of the Canadian people who happen not to be lawyers are particularly impressed by these arguments. Obviously if a lawyer is in the business of defending people in a court of law, he will use every avenue open to him.


The Acting Speaker (Mr. Ethier):: Order, please. The hour appointed for the consideration of private members' business has now expired. Its being five o'clock, this House stands adjourned until next Monday at 2 p.m., pursuant to Standing Order 2(1).
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, March 6, 1978