1978-05-30

ROUTINE PROCEEDINGS


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. My motion concerns the critically high electricity rates now being paid by residents of the province of Nova Scotia. The Nova Scotia Board of Public Utilities has received an application from the Nova Scotia Power Corporation for a rate increase of 25 per cent which, if approved, would take effect this July and make the cost of electricity in that province the highest in Canada. Therefore, I move, seconded by the hon. member for Central Nova (Mr. MacKay):
That this government take immediate steps to expedite the formation and funding of the Maritime Energy Corporation; and that this government consult with provincial governments in Atlantic Canada on an urgent basis to get construction started on a power grid to utilize the resources of Newfoundland and Labrador for hard-pressed Nova Scotia.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The introduction of such a motion for debate at this time requires unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


OFFICIAL SECRETS ACT
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I offer a motion under Standing Order 43 which I earnestly hope will receive the unanimous support of this House. I move, seconded by the hon. member for Oshawa-Whitby (Mr. Broadbent):
That this House associates itself with the hon. member for Peace River (Mr. Baldwin) in his insistence that the trial of a public servant in secret is intolerable
and that the Official Secrets Act should be amended forthwith to make secret trials thereunder impossible.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to introduce a motion dealing with an important matter of pressing necessity.
Considering that all political parties in the Quebec legislature, all members of the opposition as well as several Liberal members strongly object to the formula suggested by the Minister of Finance (Mr. Chretien) concerning the provincial sales tax, and considering that the Prime Minister (Mr. Trudeau) has stated that he was prepared to meet his provincial counterpart to find a fair solution to that dispute, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That this House urge the government to accept the amendment moved by the hon. member for Oshawa-Whitby, namely that Bill C-56 be not now read a second time, but that it be read a second time this day one month hence, so as to pave the way for a solution between both governments concerning that dispute about the provincial sales tax.


Mr. Speaker:: Order. The House has heard the motion of the hon. member. Under the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

May 30, 1978


INDIAN AFFAIRS
Mr. Ken Hurlburt (Lethbridge):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In light of the fact that the Peigan Indians are denying the Lethbridge Northern Irrigation District access to the head gates of a southern Alberta irrigation system, that as a result 800 farmers on 114,000 acres of land in the area do not have the water they desperately need, and that the Peigan Indians have broken the law by defying an Alberta Supreme Court injunction forbidding the band from interfering with, obstructing or molesting employees of the Lethbridge Northern Irrigation District, I move, seconded by the hon. member for Lambton-Kent (Mr. Holmes):
That the Minister of Indian Affairs and Northern Development (Mr. Faulkner) notify Chief Nelson Small Legs, Sr., immediately that under no condition can he condone the actions of the Peigan band in defying the law, but that he is willing to participate in negotiations aimed at settling the dispute to ensure that the band's claims are given fair consideration.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Order.


Mr. Speaker:: Order, please.


URBAN AFFAIRS
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I move, under the provisions of Standing Order 43, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House urge the Minister of State for Urban Affairs (Mr. Ouellet) to direct CMHC to reinstate the old co-operative housing program with capital mortgage funds and operating subsidies at least equivalent to the 1977 level until such time as the co-operative sector is satisfied with the new program.
That the Minister of State for Urban Affairs and CMHC meet with co-operative housing and non-profit housing organizations in order to discuss necessary revisions in his proposed programs.


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


Some hon. Members:: Agreed.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: No.


CANADIAN TRANSPORT COMMISSION
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rise under the provisions of Standing Order 43 to ask for unanimous consent for the following. In view of the fact that since the Minister of Transport (Mr. Lang) kidnapped the CN buses in Newfoundland and brought them under federal regulatory jurisdiction, the CN immediately received a fare increase of 8 per cent, followed by a second increase last November 1 and a further 15 per cent on a so-called interim basis until the Canadian Transport Commission made a decision on the fare increase application, and in view of the fact that the CTC held its last hearing on the fare increase on May 2, 1977, at St. John's-seven months ago-while bus users are paying the 15 per cent increase under the Otto user-pay principle and interim, like demand, may be forever, I move, seconded by the hon. member for South Shore (Mr. Crouse):
That the Canadian Transport Commission be awarded the "Rip Van Winkle, Sleepy Hollow Award" for turtle-like slowness in decision-making at Ottawa, that the bus users of Newfoundland remember that while "interim" bus fare increases may be for ever, Ottawa is not, and will not be if Liberal candidates are discarded as a result of-


ENVIRONMENTAL AFFAIRS
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the fact that the Garrison diversion project has serious environmental implications for Manitoba's rivers and lakes, and in light of the undue delay by the Minister of State (Environment) (Mr. Marchand) to refer the IJC's final recommendations to the appropriate committee, I move, seconded by the hon. member for Brandon-Souris (Mr. Dinsdale):
That this House direct the Minister of State (Environment) (Mr. Marchand) to refer the Andras plan, the IJC's recommendations, all studies and related correspondence to the Standing Committee on Fisheries and Forestry for its immediate consideration.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

May 30, 1978



ORAL QUESTION PERIOD


Charles Joseph Clark: Mr. Speaker, my question is directed to the Deputy Prime Minister. It relates to a contradiction between the policy of the Government of Canada and the policy of the government of the United States concerning NATO, policies apparently in each case based upon different interpretations of the same NATO document regarding growth of the Soviet threat.
President Carter, on the basis of that document, has said that the military lead the west once enjoyed has been reduced, whereas the Prime Minister, presumably on the basis of the same document, said that he does not think worry about the threat is supported by documents before NATO. Will the Deputy Prime Minister explain that contradiction?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, I do not have either document before me, but I did attempt to reconcile what the hon. member regards as a contradiction. In the one case, obviously, the President of the United States was referring to the growth in the military capability of the Soviet Union. NATO itself has undertaken a study of the long-term trends in that respect.
I believe what the Prime Minister was talking about-which is quite a different matter-was the political atmosphere, or whether there would be a return to the atmosphere of the cold war. I think there is quite a difference between those two points. That is the distinction I draw between the threat in terms of military capability and the threat in terms of political atmosphere or the cold war atmosphere, and I believe it is to the latter the Prime Minister was addressing himself.


Charles Joseph Clark: Mr. Speaker, that is a nice attempt at a distinction. The Deputy Prime Minister spoke of two documents. There are not two documents, as nearly as we can gather; there is only one. The difference does not occur in the documents; the difference is between the interpretations of the significance of those documents by the government of the United States and the Government of Canada.
Just to clarify to the House, can the Deputy Prime Minister tell us whether it is the official position of the Government of Canada that the Soviet arms build-up in central Europe does not indicate that the Soviet Union is moving toward a harder line in its dealings with the west? Is it the government's position that there is nothing in the Soviet build-up for Canada to be concerned about?


Allan Joseph MacEachen: Mr. Speaker, that would not be the position of the Government of Canada. The position of the Government of Canada would be that any build-up in Soviet strength would be a very serious matter indeed, and it is for
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that reason that Canada has within the past several years taken a number of important decisions in order to maintain its contribution to NATO at a very high level.


Mr. Hees:: You mean, like half of what we promised originally.


Allan Joseph MacEachen: At the present time, there is before the summit leaders in Washington a long-term review which was previously put before a meeting of the defence ministers, and that military analysis is one with which Canada will concur in a statement to be made by the Prime Minister in Washington today.


Charles Joseph Clark: Mr. Speaker, that leaves open why the Prime Minister is saying one thing in television interviews and another thing in official statements. The advantage of that is that it is getting the international community accustomed to what we have had to put up with in Canada for a long time.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Deputy Prime Minister spoke about the build-up which the Soviets have established not only in Europe but also a build-up of Soviet activity, directly and through the intermediary of Cuba, in Africa. What we want to know in this House of Commons, because the Deputy Prime Minister characterizes this as very serious-


An hon. Member:: You are speaking for yourself.


Charles Joseph Clark: A member on the Liberal side says I speak for myself. It may well be that Liberals on that side are not worried about Canada and its role in NATO, but we on this side of the House are.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: What we want to know, here in this House of Commons, from the Deputy Prime Minister is, what does the Government of Canada intend to do? What steps does it intend to take in face of this very serious, to use the Deputy Prime Minister's words, build-up of the Soviet threat in Europe and in Africa? Will he tell the House of Commons what steps Canada intends to take, or do we have to wait again for word from Washington where the Prime Minister is speaking?


Allan Joseph MacEachen: Mr. Speaker, it is not necessary to wait for word from Washington, either directly or indirectly.


George Harris Hees: You will make up a story here.


Allan Joseph MacEachen: Canada has continued to give its support to the NATO alliance as an absolutely indispensable deterrent and an absolutely indispensable assurance of our security. That view will be reiterated today by the Prime Minister and his colleagues in Washington. My hon. friend will realize that over the last several years we have taken some very important steps in order to strengthen our participation in the NATO alliance. At the NATO summit, which I attended with the

May 30, 1978
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Prime Minister two or three years ago, a declaration was made by the Prime Minister that our contribution would be effective and it would be in accordance with the obligations which our allies expected of us. It is because of that, for example, that we have purchased the new battle tank and undertaken our commitments with respect to the long-range patrol aircraft.
At the present time, of course, whatever the new military long-term plan is, Canada will play its part, as each and every member of the NATO alliance will be expected to play its part.


POLICY RESPECTING NUCLEAR WEAPONS ON CANADIAN SOIL
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my supplementary question is for the Deputy Prime Minister and President of Privy Council: it concerns the Prime Minister's speech to the United Nations in New York. The Prime Minister left the impression, at least with UPI, that Canada was in the middle of a nuclear disarmament program right now.
Could the minister correct the false impression left by the Prime Minister, and confirm that none of the nuclear missiles in Canada will be leaving in less than five years and that it will be at least three years before the program is completed?


Allan Joseph MacEachen: Mr. Speaker, I believe the situation with respect to Canada's nuclear position is very clear. We do not produce nuclear weapons. In so far as our participation in Europe is concerned, we do not have nuclear weapons. At the present time, nuclear weapons are installed or are available for use on the Voodoo aircraft.
As my hon. friend knows, it is our intention to move out of that field with the acquisition of new aircraft which will not be equipped with nuclear weapons of any kind. There is no ambiguity. The Prime Minister, in fact, stated the situation which was fairly well known and which I am glad is now clearly and generally known.


Allan Bruce McKinnon: I have a supplementary question, Mr. Speaker. In New York, the Prime Minister heaped fulsome praise on President Carter for postponing the development of the neutron bomb. This morning, the Chief of Canada's Defence Staff supported the deployment of the neutron bomb, stating that it was less ominous than the alternatives and, further, that it would raise the nuclear threshold, that is, make nuclear war less likely. As this opinion is clearly divergent from that of the Prime Minister, could the Deputy Prime Minister clarify the confusion?


Allan Joseph MacEachen: Mr. Speaker, I have not examined the testimony of the Chief of the General Staff before the committee. I have been told, however, that the press reports of his statement do not reflect accurately what the Chief of the General Staff said before the committee. Quite apart from his statement, I can repeat what I said earlier in the week, that is, that Canada supports the decision of the United States in

postponing the production of a special battlefield nuclear weapon.
I believe that decision by the President of the United States was a right one, and it is supported by the Government of Canada. It is hoped that the Soviet Union, about which the Leader of the Opposition spoke earlier, will show equivalent restraint in its own deployment of forces and its own force levels. In this case, the action of the President of the United States has put the Soviet Union clearly on the defensive.


Allan Bruce McKinnon: Mr. Speaker, perhaps I could put a very simple question that has been asked in this House before. Would the Deputy Prime Minister tell the House if Canada is in favour of, or against, the use and deployment of the neutron bomb?


Allan Joseph MacEachen: Mr. Speaker, the policy statement made last Friday by the Prime Minister is the policy of the Government of Canada.


INDUSTRY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. Considering that the number of permanent jobs lost to Canada because we do not have our share of investment out of the auto pact is in the neighbourhood of 20,000, or enough to support a community of 60,000 Canadians, and considering that the Canadian ambassador in the United States has now joined the critics of the government in pointing out that our deficit in automobile parts "far outweighs the Canadian surplus" in automotive vehicles, could the minister, now, at long last, tell the House if he has managed to obtain from the automotive companies investment commitments which will redress this deplorable loss of Canadian jobs?
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, in answering that question I would like to point out that I certainly do not agree with the preamble of the hon. member's question. We are not losing 20,000 jobs. I have said repeatedly that we have a deficit of probably 5,000 jobs in the total automotive industry which applies to the automotive agreement.
We are negotiating with the three major companies and I hope to be able to make an announcement some time in June with regard to one, if not all three, of the major companies and their plant investments in Canada.


John Edward Broadbent: Mr. Speaker, the minister not only disagrees with the Canadian Automotive Parts Association, a business group, the United Auto Workers, a trade union, the government of the province of Ontario, which is a Tory government, but he also disagrees with the Canadian ambassa-
May 30, 1978

dor in Washington. 1 do not know who supports him on that side of the House-


Charles Joseph Clark: It is pretty lonely over there.


John Edward Broadbent: -but if he has their support, they are the only Canadians that are on his side. He told us a few days ago-in fact, a few weeks ago-that he will be announcing soon some commitment by one or more companies.
Could he tell us specifically, considering the last time we got new investment proportionate to our share on this side of the border was in 1965, when we got written commitments from the three companies, that what he will produce for the House will be the written commitments for the next three years by the leading companies, to make sure we get the compensation and investment that will produce the jobs we are entitled to?


Mr. Horner:: Mr. Speaker, in attempting to negotiate with the automotive companies the building of parts plants in Canada, we run into-as the House is aware-a great deal of competition from some of the southern states where there is a difference in wage rates of perhaps $1, $2 or $3 an hour from wages in Canada. If one took a look at a plant employing something like 3,000 people, by calculating wage rates at over $1 an hour less it would come to, relatively speaking, in the neighbourhood of $12 million a year difference.
That is a real bargaining power through which the companies are trying to negotiate assistance from all levels of government to counteract the advantages in locating their plants in the United States, particularly in some of the southern states. These are the conditions under which we are attempting to negotiate. When I make the announcement, I hope to have written confirmation of plants to be built in Canada.


John Edward Broadbent: Mr. Speaker, I know the minister has only had that portfolio for about eight months now, but I ask him, is he not aware that clause 1 of the pact-near the end of the clause, the last sentence-prohibits governments on either side of the border from using a variety of means, among which would be tax incentives, because the principle of the pact is to get a fair share of growth on both sides of the border? The hon. member for Windsor West has pointed that out to the minister a number of times. If he is aware of that, has the Government of Canada objected to the United States in terms of the pact being violated in this regard?
I come back to the commitment point. Will the minister tell the House that he will have for us, in the next two or three weeks, commitments from the industry for investment to redress the loss of jobs? Failing that, will he finally acknowledge what the rest of us have recognized, that he has failed to do the job, and will he submit his resignation?


Some hon. Members:: Hear, hear!


An hon. Member:: They need him in the cabinet.


John (Jack) Henry Horner: Mr. Speaker, in 1970 there was a great deal of confusion with regard to the figures being used concerning the automotive agreement. In 1970, Canada and the United States
Oral Questions
agreed upon a specific set of figures. So the hon. member can use any kind of figures he wants, but Canada and the United States are attempting to use comparable figures.
The job loss, as I have said, is in the neighbourhood of about 5,000 in this country today: that is in the total automotive trade. The unique thing is that we have a surplus of $2 billion in vehicle assembly. In assembling these vehicles, we need parts. Therefore, if one cut back on assembly, one would automatically cut back on parts; and we have to really increase our parts production in Canada.
I have said repeatedly that nothing would make me happier than to be able to announce three or four more plants to be built in Canada. I hope to be able to do that some time in June. I cannot say anything more than that.


FINANCE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is directed to the Minister of Finance. Last week, in reply to the question put to him by an hon. member of the opposition, the right hon. Prime Minister said that the problem posed by the retail sales tax was not understood by hon. members, and he indicated that only the right hon. Prime Minister and the Minister of Finance understood the problem. Referring to an article published in today's Le Droit, I have a feeling that hon. members of the opposition are not the only ones who understand nothing: there are others as well. Speaking of the Minister of Finance, this is what the article says, and I quote:
We want to reduce our taxes and Quebec is willing to increase theirs. That is what we have been telling them to do for several weeks.
Here is my question: can the minister explain very clearly to this House what the advantages are for the Quebec taxpayer if, on the one hand, the federal government reduces its taxes, while on the other hand the provincial government increases its taxes by a comparable amount?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, we have explained repeatedly that that is precisely the technique we followed on budget night. In the other provinces, federal taxes were reduced for every taxpayer. At the same time, the provincial governments of those provinces increased their personal income tax. With the profits thus made, it was decided to reduce the sales tax.
Here is what we did, which is very clear in my mind: on budget night, we reduced the federal income tax in the case of the other provinces which then increased their own income tax; this is what Quebec refused to do, like the other provinces.

May 30, 1978
Oral Questions


Joseph Adrien Henri Lambert: Mr. Speaker, I have a supplementary question.
In terms of money, what advantage does the taxpayer have if the federal government cuts its taxes while the provincial governments raise theirs at the same moment? What difference does it make to the taxpayer? That is what we would like to understand.


Joseph Jacques Jean Chrétien: Mr. Speaker, on budget night all provinces except Quebec agreed with the federal government. They increased their provincial income tax, an increase which was offset by a corresponding cut in federal income tax, and they used the profits they made with their increase to cut the provincial sales tax following the proposal I had put forward. In other words, the taxpayers of these provinces have benefited from a cut in the provincial tax which is called sales tax in the provinces.


Joseph Adrien Henri Lambert: Mr. Speaker, I would like to ask another supplementary question.
To conclude this debate, which I believe has lasted long enough, would the Minister of Finance be willing to act as negotiator between the Prime Minister and the premier of Quebec in order to come to a final agreement on this matter? I understand that Bill C-56 places him in a certain dilemma, everybody understands that. But I think that everybody would also accept that two responsible men meet in order to bring this dispute to an end. Would the minister be prepared to act as a go-between to organize such a meeting?


Joseph Jacques Jean Chrétien: Two weeks ago I believe, Mr. Speaker, the right hon. Prime Minister and myself stated in the House that we hoped the Quebec government would make us a counter proposal. The Prime Minister said that he would be ready to meet with Quebec representatives if progress were to come about. The day after the budget, when the Quebec government reduced its sales tax in a different way, we made some counter proposals, as the hon. member is well aware. The only replies that the Quebec government gave to our counterproposals were categorical noes, and last Friday the Quebec minister of finance said that he was beginning to change his position. As I said yesterday in the House, and I repeat today, if he wants to meet me I am at his disposal to try and come to a solution, but in the meantime we must continue with our own parliamentary procedures to pass this budget. I must add, Mr. Speaker, that I repeatedly contacted the Quebec minister of finance, and exactly two weeks ago last Monday I spoke to him over the phone. He told me that he might phone back. I am still waiting for his call.


RESULTS OF ANTI-INFLATION PROGRAM
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. As it is now 31 months

since the government announced its anti-inflation program which it stated was designed to ensure that we would be down to 4 per cent inflation in this country by October, will the Minister of Finance now indicate what went wrong with this program, bearing in mind that, year over year, we are now at an inflation level of 8.4 per cent? Judging from current price increases, our inflation is flourishing, rather than going down to the 4 per cent level we were told it would reach in October of this year.


Joseph Jacques Jean Chrétien: Mr. Speaker, we have stated in this House many times that the controls program was very useful in reducing the level of inflation in Canada. When we started the program, we were faced with 11 per cent inflation. We have reduced it to 6 per cent. Unfortunately, it has moved back to 8 per cent, due to food prices and the fact that the Canadian dollar is not at the same level as it was at that time. However, our costs in Canada are much more in line with our competitors.
Generally speaking, the export performance in Canada, in relation to the situation we were in during 1975, is much better. I think the program has been useful. When it was not needed any more, we phased it out: the program began to be phased out last month, on April 15. I am very surprised that the hon. member asks this question when we phased out the program only a month ago.


Sinclair McKnight Stevens: Mr. Speaker, I am certainly surprised, as are members of this House, by the minister's reversal of the question. In the first year's report of the Anti-Inflation Board, they pointed out:
The essential element of the program is gradual monetary and fiscal restraint. Without some moderation in the growth of the money supply and a somewhat more restrictive fiscal policy, the program could not be a success.
With that warning in mind, will the minister now indicate to the House if, in fact, the fiscal policy of this government which allowed a growth in federal spending of 12'/2 per cent in the last four years, including the current year, has been a contributing factor to the inflation levels we are now living with?


Joseph Jacques Jean Chrétien: Mr. Speaker, in 1974-75 the increases from year to year in the spending programs of the government were 25 per cent a year. We have reduced it since that time to around 10 per cent. That has been a very significant change in the policy of the government in terms of monetary policy. As everyone knows, the governor of the Bank of Canada has very significantly reduced the increase in the money supply. He is within the target he set for himself last fall when this matter was discussed in this House.


Sinclair McKnight Stevens: Will the Minister of Finance indicate to the House if the 25 per cent spending spree he referred to in 1974 was a contributing factor with respect to the inflation we felt in Canada? Can he advise why we should anticipate 3'/2 per cent inflation in 1981, when the 4 per cent target for this year has been so badly missed?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not think that is a question. The hon. member is making a commentary. He is talking
May 30, 1978

about a program that was dismantled a month ago. That is not really the purpose of the question period as I understand it.


IMPACT OF INFLATION ON THE POOR AND ELDERLY
Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is for the Minister of Finance. Certainly, nobody expects the government to exercise restraint at the expense of the poor and the pensioners of this country. For example, the Canada Pension Plan has so far this year fallen behind by almost $4 a month, in real terms, and OAS payments continue to fall behind in spite of indexing. The current round of inflation is leaning very heavily on these people, as evidenced by surveys in Toronto by Statistics Canada and other sources showing that half the old age pensioners of this country are falling below the poverty line.


Joseph Jacques Jean Chrétien: We have a system in Canada whereby pensions increase in line with the CPI. There is a formula in the legislation. This is a system we have used for some years, and I do not intend to change it at this time.


James Aloysius McGrath: I regret the minister does not seem to be aware that in spite of indexing, old age pensioners and people receiving pensions under the Canada Pension Plan are falling behind. Does the government intend to bring in a measure prior to the adjournment for the summer recess to provide for a continuation of spouses' allowances to make provision for those who are hardest hit, female pensioners, and to provide for an adjustment in the income supplement which obviously is inadequate since indexing does not seem to meet the demand?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have to deal with two different lines by opposition spokesmen: a few minutes ago the hon. member for York-Simcoe said we were spending too much, and now the hon. member for St. John's East wants us to spend even more.


ROYAL CANADIAN MOUNTED POLICE
[Stage Direction]
McDonald commission-examination of cabinet

Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, my question is addressed to the Deputy Prime Minister: it relates to the activities of the McDonald commission and the investigation it is carrying out. In light of the statements made last week by the Deputy Prime Minister, and in view of the fact that the scheduling of the commission apparently parallels the vacillation of the Prime Minister in the calling of an election, can we have a definite assurance that the ministers of the Crown will be examined by the McDonald royal commission this September, and that there will be no further delay regardless of whether or not the Prime Minister gets up the nerve to call an election?
Oral Questions


Allan Joseph MacEachen: I am sure the commission has not rearranged its schedule to take into account the possibility of an election. As I have indicated, as the Prime Minister has indicated and as the interested ministers have already stated, the ministers are prepared to appear before the commission when the commission decides to call them as witnesses. That is entirely up to the commission. If they had called the ministers this week, they would gladly have gone; and that will be the case in September. We shall make no effort to influence the timing of the appearance of ministers one way or another.


Ramon John Hnatyshyn: The fact is that the delay has not been commented upon by the minister. They have not shown any indication that they want to be examined by this commission. In light of a statement made by a former cabinet minister, the Hon. Mitchell Sharp, in which he indicated that deputy ministers should be held accountable, in the parliamentary sense, for their actions, and in view of the sorry record of this government of ministers not taking responsibility for any actions which may have been taken by themselves or their deputy ministers, I ask the Deputy Prime Minister one simple supplementary question, whether the Minister of Consumer and Corporate Affairs, the former solicitor general, is legally responsible for the actions he and his department took following the warning that the former minister of national revenue had given that these actions may be illegal? Is it the position of the government that he is legally responsible, in view of that warning by the minister of national revenue?


Allan Joseph MacEachen: The hon. member is laying on the table, so to speak, a whole series of allegations and I have no intention of commenting on the accuracy or otherwise of several of them. All I know is that the matter is before the McDonald commission, which has very wide terms of reference, that ministers are ready to appear when called, that the matters which are of interest to the hon. members will obviously be brought forward, that questions will be asked of them, and that ultimately the commission will reach a conclusion.


JAPANESE TARIFFS ON IMPORTS
Mr. F. A. Philbrook (Halton):: Mr. Speaker, I wish to direct my question to the Minister of Industry, Trade and Commerce. In view of a continuing policy by Japan of protectionism and the erection of trade barriers, many blatant examples of which could be provided, and the stated interest of the hon. gentleman's department in Canadian trading companies, will the minister inform us whether any new measures are being taken by the government to persuade Japan to truly open its markets to Canadian businesses, especially small business?


John (Jack) Henry Horner: Mr. Speaker, only recently Japan reduced its tariff barriers on a whole host of articles and has expressed an

May 30, 1978
Oral Questions
intention at Geneva and in the MTM agreements to continue to reduce its trade barriers and its tariffs so as to better assist the realignment of the trading world. At this time, especially, our currency having depreciated by some 35 per cent in relation to the Japanese yen, we are in a position to do a considerable amount of business with that country.
The House might be interested to learn that one of the items upon which Japan has reduced its tariff is Canadian maple syrup. They have reduced their tariffs on 318 articles in all.


FINANCE
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, my question is for the Minister of Finance. As the real domestic product for the first quarter advanced at a disappointing annual rate of 2.4 per cent, does the minister still hold to his forecast of 5 per cent real growth for the year, especially as many competent observers consider the economic performance will be weaker in the latter half of the year than in the first half?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, I make a regular review of these forecasts with the officials of my department, and 1 do not have any reason to change those we made to the effect that we are going to achieve an economic growth of close to 5 per cent for the year 1978.


William Gordon Ritchie: The $100 tax cut of January-February having failed to accomplish its purpose of restoring consumer confidence, as evidenced from poor retail sales figures and the sharp decline in manufacturing output, is the minister now ready to admit the failure of this cut?


Mr. Speaker:: Order, please. The hon. member for Yorkton-Melville.


CONSUMER AFFAIRS
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. It concerns the price increase of skim milk powder partially brought about by the Scrooge-like personality of the Minister of Agriculture-


Some hon. Members:: Oh!


Lorne Edmund Nystrom: -who on April 1 removed the 34 cents a pound subsidy from this product, adversely affecting consumers. We have now seen that the average price increase is around 45 cents to 46 cents per pound, not 34 cents per pound. Is the minister aware of this and, if so, what steps does he plan

to take in the face of what appears to be blatant profiteering by some of the companies? Does he intend to demand a rollback? Will he inquire into the reason for this price increase?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I am continually working with the Minister of Agriculture to provide better food for Canadians at lower prices. He is a very co-operative minister.


Some hon. Members:: Hear, hear!


William Warren Allmand: I shall be pleased to look into the allegation which the hon. member has made, and to consult with my colleague.


Lorne Edmund Nystrom: I want to know whether the Minister of Consumer and Corporate Affairs will demand that the companies roll back this increase, rather that profiteer at the expense of the ordinary people of this country. At the same time, as the minister representing consumers in cabinet, will he demand of his colleagues that they reinstate the subsidy on skim milk powder which is so badly needed by the poor, by children and by older people?


William Warren Allmand: I shall be pleased to examine this subject, and if there is profiteering we shall take appropriate action. I might say that my officials and I are continually making representations on behalf of consumers before cabinet and committees.


FINANCE
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of Finance. In a report published recently, the Department of Industry, Trade and Commerce states that 122,000 of the 262,000 workers in the four industries of textiles, clothing, footwear and furniture work outside Quebec and that the proposal to abolish the sales tax on those four products in this province will increase employment and stimulate purchases throughout Canada. The question I want to ask the Minister of Finance is this: how can the minister and the right hon. Prime Minister maintain that the proposal made by the National Assembly helps only the province of Quebec?


Joseph Jacques Jean Chrétien: Mr. Speaker, in this respect we are only echoing the claims of the Parti Quebecois. When Mr. Parizeau announced that measure, he said he was concerned only with the interests of Quebec. In the advertising sent out by members of his party, the premier quoted part of a publication to the effect that all that has been done was with the single purpose of stimulating only the Quebec economy and not the Canadian economy.
May 30, 1978


INDUSTRY
William Heward Grafftey: Mr. Speaker, my supplementary question is directed to the Minister of Industry, Trade and Commerce. Since a report emanating from his ministry states that 122,000 of the 270,000 jobs in textiles, shoes, clothing and furniture are outside the province of Quebec, and that the policy announced by the national assembly in the province of Quebec to abolish the sales tax in these four sectors will aid employment and stimulate consumption all over Canada, has the minister informed the Minister of Finance of these facts and, if so, how can he possibly support the policy of the federal government which is refusing to negotiate this proposition with the province of Quebec?


John (Jack) Henry Horner: Mr. Speaker, the Minister of Finance is well aware of the number of measures taken by this government to help the textile and the shoe industries all over Canada, and if the provincial government of Quebec wants in its own way to help those industries, certainly we appreciate that as well.


ROYAL CANADIAN MOUNTED POLICE
[Stage Direction]
McDonald commission-evidence on security and tax

Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question for the Deputy Prime Minister: it relates to a statement made last Friday that the government was reluctant to table information which consisted of fragments of matters before the McDonald royal commission. In view of the fact that the government has tabled on several occasions matters such as the allegedly secret memo from late superintendent "Larry" Forest to former security director, John Starnes, a letter concerning Warren Hart from Mr. Justice McDonald to the Minister of Employment and Immigration, and for that matter the controversial agreement of the 1972 understanding about matters of national revenue and the RCMP, what is the reason for the apparently illogical conclusion, now, that no further information of this type will be tabled?
Will the Deputy Prime Minister reconsider and on reflection table this letter between these two cabinet ministers which has such an important bearing upon matters of illegality or impropriety affecting tax and security matters?


Allan Joseph MacEachen: Mr. Speaker, I believe there is no lack of logic in the decision taken by the government. It has to do with the fact that there is a royal commission before which witnesses appear and evidence is being produced, and it seems to me that it would be very illogical to begin the process of feeding into the House of Commons or to the media bits and
Oral Questions
pieces of the over-all evidence that will have to be examined by the McDonald royal commission.
If the House of Commons or a committee of the House had established itself as the body to undertake the inquiry that is being conducted by Mr. Justice McDonald, then I would take a different attitude; but at the request of members of the opposition we established the McDonald inquiry and it seems to me that we should make use of it in the proper way. In my view, it would be improper to select one piece of evidence and table it, to the neglect of all the other oral and written testimony that has to be considered.


LEGALITY OF USING INFORMATION CONTAINED IN TAX FILES
Elmer MacIntosh MacKay: Mr. Speaker, I will not give in to the temptation of reminding the Deputy Prime Minister how illogical his position is. I will ask the Solicitor General if he now knows, having had the benefit of checking his Files and checking with his predecessor, why, in view of the doubts expressed on one occasion or another about the propriety, if not the legality, of this arrangement in 1972 between National Revenue and the RCMP, this matter was allowed to proceed, and if at any time the government obtained a legal opinion sanctioning this affair. If that is the case, would the Solicitor General consider tabling this legal opinion, for the benefit of the House?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, the question was aired fully on Friday and the Deputy Prime Minister made the position quite clear with reference to the proceedings before the McDonald inquiry. The Deputy Prime Minister has indicated quite clearly that the matter is to be dealt with in that particular form. As to the other aspect of the hon. member's question, perhaps he might repeat it; I have forgotten what it was.


Elmer MacIntosh MacKay: Mr. Speaker, if you will permit me, I will address a very brief question to the former solicitor general, now the Minister of Consumer and Corporate Affairs. Does the minister acknowledge now, having had a chance to check his files, receipt of the letter which was referred to on Friday from his former cabinet colleague expressing doubts as to the legality of what was going on?


Some hon. Members:: Order.


Some hon. Members:: Answer the question.


Some hon. Members:: Cover-up.


CABINET REPRESENTATION OF TORONTO AREA
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, I have a question for the Deputy Prime Minister arising from the televised interview on Sunday given by the

May 30, 1978
Oral Questions
Minister of State for Small Business. In view of the fact that the minister said he felt the growing dissatisfaction with the Trudeau government in the Toronto area resulted from the public's feeling that their part of the country is not adequately represented in the cabinet, may I ask the Deputy Prime Minister whether the Prime Minister has been made aware of the minister's statement, and does he intend to take appropriate action?


Allan Joseph MacEachen: Mr. Speaker, I am sure that the Prime Minister is always interested in hearing about political comment.


FINANCE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I had intended to ask another question but I will restrict myself to putting a question to the Minister of Finance on whose shoulders so much blame has been laid in connection with this tax bill, although apparently he is just a boy who has to produce what the Prime Minister and the Minister of State for Federal-Provincial Relations require.
In view of the divisions in this country, certainly unequalled since the days of the war, and having regard to the fact that in the province of Quebec there is almost unanimity against this tax bill and in other parts of Canada there is uncertainty in the hearts of people as to what is happening to this country, is the government giving consideration to making a respectable retreat and withdrawing this bill which, if it is carried out, will divide this country irreparably?


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Mr. Speaker, I have established very clearly that I am open to discussions, but to have a discussion there must be two people and the other party is not interested in talking to me.


John George Diefenbaker: Mr. Speaker, according to the press, even though the government generally does not admit the press is ever right, when the Prime Minister returns from Washington he will meet the Premier of Quebec or the Quebec minister of finance to determine what alterations might be made in this bill in order to bring about agreement. Is such a meeting to take place and, if so, how far will the federal government go in its desire to remove the strong criticism from the province of Quebec which covers all areas, including the newly-elected leader of the Liberal party in that province? Will there be a meeting and, if so, what are the terms of the Government of Canada in order to bring about agreement with the province of Quebec?


Joseph Jacques Jean Chrétien: Mr. Speaker, I would like to repeat what I said previously, that more than two weeks ago the Prime

Minister said that if a meeting would be useful, he would be willing to talk. But since that time we have not heard from the Quebec government except at the press conference on Friday when Mr. Parizeau said that he could perhaps begin to change his opinion. We have been waiting since that time to receive a formal proposition from him. I called him two weeks ago asking whether it would be useful to meet, and he said he would call me back. I have to inform the right hon. gentleman that he has not called me back as yet.


PRIVILEGE
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I rise on a question of privilege of which I gave Your Honour notice. I indicated that in fact I would be raising this at the appropriate time today. My question of privilege is in connection with a public statement issued by Acting Chief Court Sessions Judge Mayrand of Montreal. I understand this public statement was issued yesterday.
I do not have the statement, but I have copies of some of the wire, press, and radio comments. Included in those are several statements. One of the most repugnant to me is the statement by Acting Chief Court Sessions Judge Mayrand indicating that he "cannot tolerate criticism of the trial of Alexander Peter Treu made in the Commons last week by Alberta M. P. Gerald Baldwin".
Some of the radio comments suggest that not only will he not tolerate, but his court will not permit criticism, apparently in this House, of the trial of Mr. Treu. He bases this on statements made by myself in the House. His reference is to statements I have made in the House.
I made statements on three occasions. On Friday, May 12, under the provisions of Standing Order 43 I moved the following motion:
That this House, as the elected branch of the ultimate and highest tribunal in the country, concerned that justice should not only be done but be seen to be done, and that judicial and bureaucratic officials shall not make improper or unexpected use of laws enacted in parliament, requests that the Minister of Justice and the Solicitor General inquire into and report to the Standing Committee on Justice and Legal Affairs on certain facts relating to the case of Peter Treu who, after being under charge and trial for approximately four years under the Official Secrets Act, behind a strict curtain of secrecy, was recently convicted and sentenced to imprisonment and, in particular, the allegation that Treu was commanded not to discuss the case even after the conviction and was granted bail on appeal only on the same basis, and that the committee be required to consider the provisions of the Official Secrets Act which permit this kind of Star Chamber proceedings, with a view to recommending suitable changes.
Of course that proposal received the same attention from government members opposite as most good proposals do under Standing Order 43.
On May 15 I asked a question of the Minister of Justice (Mr. Basford), which read as follows:



May 30, 1978

Mr. Speaker, I have a question for either the Minister of Justice or the Solicitor General, whoever has the ultimate responsibility. It deals with the case of one Alexander Peter Treu recently convicted after a secret trial under the Official Secrets Act and sentenced to two years' imprisonment.
Can the hon. gentleman advise of the nature of the restrictions placed on Mr. Treu to prevent him from discussing any aspects of the facts of this case, this having taken place at the time of the conviction, the sentence and the application for bail on leave to appeal? Were such instructions given by the government to counsel to press for such restrictions? Would these restrictions have the effect of prohibiting myself or any other member of parliament from discussing the facts of the case with Mr. Treu?
Following the answer of the Minister of Justice I posed a supplementary question, which read as follows:
I suppose the latter part of that answer might properly mean inquiring what facilities might be available to members of parliament. I would like to ask this supplementary. At the time of the conviction, the judge stated that Mr. Treu was not a criminal in the regular sense of the word. After the investigation commenced, Dr. Treu was continuing to receive the documents. After the trial commenced, NATO awarded to Dr. Treu and/or his company a contract dealing with classified communications sytems.
Will the minister obtain and table in this House a transcript of the comments of the trial judge at the time of the conviction and at the time of the sentencing, so that we can determine whether there was a case of security or whether there was an element of bureaucratic bungling?
As far as I know, there has been no tabling of those documents. My instructions are that they have not been tabled.
Finally, on May 23, I rose to present another motion under the provisions of Standing Order 43. I was encouraged to do so by the fact that the House gave unanimous consent to a motion moved by the hon. Leader of the Opposition (Mr. Clark) dealing with the kind of proceedings in a case in the Soviet Union. It was not a question of fundamental law, but it was a question of the type of proceedings which were taken in respect of certain dissidents in the Soviet Union. Then I moved the following motion:
That this House deplores the dangerous form of secret trial and the continuing restrictions involved in the case of Alexander Peter Treu which are contrary to the usual practice of Canadian justice.
That motion also was rejected. Acting Chief Sessions Court Justice Mayrand was critical of myself, because I made comments about the manner in which this trial was conducted under the provisions of the Official Secrets Act.
I have practised law for nearly 50 years. During part of that time I have had the honour of being a bencher of the Law Society. It is the right of every barrister, if he is going to appeal, to be critical within the terms of the law and the convention and conduct of a trial. I am sure the right hon. member for Prince Albert (Mr. Diefenbaker) had occasion to study some of the appeals in which he was involved. I used them as precedents in my own trials. Any competent lawyer going to appeal, from time to time has the necessity of being critical of the conduct of a trial, doing so within the limits of convention and custom.
The examination of a witness by a judge, and the manner in which the judge presents the case to the jury, are subjects of logical criticism by a member of the bar. That has been my experience over the years. What I have read and what I have
Privilege-Mr. Baldwin
said outside the House were not in any sense personal criticisms of the trial judge.
I should like to refer to a decision of the Quebec Court of Appeal which affects this House. It deals with the case of the present Minister of State for Urban Affairs (Mr. Ouellet). At that time Quebec Chief Justice Tremblay, as indicated at page 97 of the Dominion Law Reports, Volume 72, third edition, said the following:
Certainly, the decisions of judges are subject to criticism as are the decisions of all other public men.
Then he went on to indicate that there must be some moderation of criticism. It would be monstrous if members of the House were not entitled to be engaged in reasonable criticism of the conduct of judges in the carrying on of judicial proceedings.
What I have read indicates that I did not exceed what I believe to be fair and reasonable comment. As a member of this House I would be in dereliction of my duty if, upon finding those facts, I failed to do anything. I would count myself as having failed to discharge my responsibility if I did not call attention to what could be an injustice because of improper, unusual or unexpected use of the laws of this land.
Judge Mayrand went on to make further comments. He said:
He also complained that even the judgment is secret because it refers to trial proceedings.
Well, I am in good company. A number of newspapers made the same comment. I have before me a copy of the Friday, March 17, 1978, edition of the Globe and Mail. Its headline reads: "Even verdict will be given secretly at Montreal trial". If the Globe and Mail can say it, even I can repeat it. Also Judge Mayrand indicated the following:
Baldwin should not set himself up as a court of appeal, all the more so because he is in complete ignorance of the facts placed before the court.
Of course I am in ignorance of the facts, as are 99.9 per cent of the people of Canada.


Some hon. Members:: Hear, hear!


An hon. Member:: That includes the Minister of Justice (Mr. Basford).


Gerald William Baldwin: I would be perfectly willing to take the chance of talking to Dr. Treu. But as I understand the situation, if I was to talk to him he might well forfeit his bond and be sent back to jail. For that reason I have never talked to him. All the information I have is from instructions given to me by people who, I hope, know something about the situation.
The Acting Chief Judge went on to say, speaking of myself:
We advise him respectfully to be satisfied with doing his work; namely the improvement of the Official Secrets Act if it appears unjust and abusive.
For some four years, Mr. Speaker, that is just what I have been trying to do. At a meeting of the Standing Joint Committee on Statutory Instruments and Other Regulations that was

May 30, 1978
Privilege-Mr. Baldwin
dealt with when we had before us the Secretary of State in connection with the question of freedom of information. This Act is notorious not only in this country but in Britain where a case tried against Jonathan Aitkens of the Sunday Telegraph and Colonel Cairns was thrown out by Mr. Justice Coulfield who said it was about time Section 2, which corresponds to Section 4 of our Act, was pensioned off. I, and other members of my party in this House, have for years been trying to do exactly that in respect of the Official Secrets Act.
Finally, the judge went on to say he deplored the use of parliamentary immunity by members of parliament to question and criticize the manner in which Judge Luc Trudel handled the trial. I never mentioned Judge Luc Trudel's name. I have not taken advantage of parliamentary immunity. I have spoken outside this House, and I intend to keep on speaking outside this House when I see injustices of this kind.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: Mr. Speaker, I spoke about being a barrister. I am not here as a barrister but as a member of parliament with duties and responsibilities to mark injustices, no matter in what form they come. I can only seek to improve bad laws by calling attention to the application in individual instances of those laws. I, and any member of this House and of the other place, ought not to be frustrated or inhibited by threats or other similar action on the part of anybody, whether he be a justice of the courts, an individual, the Prime Minister-no matter who, barring only yourself, Mr. Speaker.
My problem here, of course, is that I do not have the actual written statement issued by the trial judge who, I understand, is a provincial judge. If I did I might move a motion, and I reserve the right to do so. When I receive that document, if it appears to constitute a direct threat of intimidation as far as I and other members of this House are concerned, to refrain from being critical of or dealing in any way with this particular trial, I will see fit to bring in a motion, if your Honour should hold there is a prima facie case, which might well seek the appearance of the judge before a committee of this House, or even before the Bar of the House, if necessary.
If, on the other hand, there seems to be simply a misapprehension on the part of the judge as to what are our responsibilities, as Your Honour knows, there is a special committee considering this issue, and I would ask in my motion that the matter be referred to that committee.
I would hope that I and other members of this House, of the other place, and of the press, and the people of Canada will not sit quietly by allowing proceedings of this kind to take place without public remonstrance.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I know there are other hon. members, including the hon. member for Winnipeg North Centre (Mr. Knowles) and the hon. member for Central Nova (Mr. MacKay), who have indicated a willingness to participate in this discussion. The hon. member for Peace River (Mr. Bal-

dwin) has indicated he is holding open his rights and wants to get a transcript of the exact language to see whether in its actuality or its potential it raises a threat or intimidation against him in the carrying out of his duties as an elected member. That would seem to me to invite comment when that step has been taken, rather than now when the exact text of the pronouncement by the Acting Chief Judge is not known. I would recognize the rights of those hon. members to participate at that time. However, I will not refuse them the right now to speak, but it would seem to me to be preferable to have the text in our hands before carrying the matter further.


Stanley Howard Knowles: Mr. Speaker, I completely agree with Your Honour that the time for us to speak in greater detail on this matter is after we have, in our hands the text of what the judge has said. Even so, I should like at this moment, if I may do so without losing my right to speak again when the matter arises later on, to indicate my full support of the position taken by the hon. member for Peace River (Mr. Baldwin). Of course I indicated that at two o'clock today by attempting to move a motion under Standing Order 43.
I would also say that I dare to hope, from the preliminary comments you have made from the chair, that you may be persuaded in this instance that we could be very close to a classic case of privilege. It is true that we shall have to wait to see what the judge actually said, but if it turns out to be the fact that he has said something which inhibits or intimidates a member of this House from pursuing what he believes to be his duty, that would be pretty close to, if not dead on, a classic case of privilege.
Before I presented my motion today under Standing Order 43 I went back and read the motions under Standing Order 43 and the questions which the hon. member for Peace River had posed earlier this month. It seemed to me they were all in very careful and restrained language. It seemed to me that what he was seeking was an inquiry as to what is in the Official Secrets Act which makes this secret trial possible, and that in fact he was doing what the judge in one of the quotations attributed to him says he ought to do, namely, try to win improvements to the Official Secrets Act. However, for the judge to go on and say that the hon. member's comments are intolerable, that he does not know what he is talking about and so on, is, I suggest, an intimidation of a respected and distinguished member of this House, which this House ought not to tolerate.
I hope, therefore, you will agree to hear a few comments now, and allow this subject to be reopened when we have the text of what the judge said. At this point I hope I am expressing the views of all members of this House when I say we are on the side of the hon. member for Peace River.


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I hesitate to intervene, because I think one of the issues involved is not only the independence of members of parliament but obviously also the question involving the independence of the members of the judiciary. While they are not accountable to this House or to me, I feel I should make some comment, if
May 30, 1978

even very brief. Beauchesne's and other authorities have comments and citations in respect of reflections on the judiciary which are not to be made in the House, except by way of substantive motion. While I, obviously, as Minister of Justice, am accountable to this House for the conduct of the Crown and the conduct of any prosecution, I am not accountable to this House for the conduct of judges.
I only have press reports of the Acting Chief Sessions Judge's comments and, like the hon. member, I would want to read them before being extensive in my comments. I take it, even on the basis of press comments, that there is some exception taken to the reference or suggestion that we are back in the days of the Star Chamber of King Charles I. I would caution hon. members, and point out to your Honour, that to accuse or suggest a judge of this country is running a Star Chamber is a reflection on members of the judiciary.


Some hon. Members:: Oh, oh!


Stanley Ronald Basford: If one goes back into the history of the Star Chamber he will find it was an administrative court established by Henry VIII which ran for a number of years. It was a meeting of the Privy Council, a meeting of the court; it was a government court in effect, an appearance without written argument. There was no appeal from its decision, and there was no right to appear before the court. That, Mr. Speaker, is not the situation in this country, and therefore I would caution members that there is, while also obviously a need for members of parliament to maintain their privileges and their right to speak freely, the equally important right that members of the judiciary retain their independence from parliament and from me, and be free to comment also.


Elmer MacIntosh MacKay: Mr. Speaker, very briefly in follow-up to what the minister has said, and I intervene because I was one of the members in this House who directed questions to the Minister of Justice (Mr. Basford) some time ago as to the disposition of the Treu case, just as the minister said that the judiciary is independent of the House of Commons, in that respect so are members of the House of Commons independent of the judiciary in exercising their parliamentary immunity, and I suggest there is a very good reason for that.
Again, referring to the reported comments by Judge May-rand who reportedly deplored the way that other members of the House have used their parliamentary immunity to question and criticize the manner in which Judge Luc Trudel handled the Treu trial, I suggest to you, with respect, and by way of brief comment to support the position taken by the hon. member for Peace River (Mr. Baldwin) and the distinguished member for Winnipeg North Centre (Mr. Knowles), that it would be appropriate for this distinguished jurist to use his position as did another distinguished colleague in the Quebec judiciary, Chief Justice Jules Deschenes, to speak out on some of the inequities of the Official Secrets Act, as Chief Justice Deschenes did when he had some very scathing things to say
Privilege-Mr. Baldwin
about section 41(2) of the Federal Court Act which was used to inhibit the efforts of the Quebec Civil Liberties Association to press the case of Sylvia Roche and Cathy Curtin. These two girls were discharged from their positions on Olympic preparations, and it was used by the government to withhold information that would have assisted in their case.
I suggest, sir, in closing, that it would be very appropriate for Mr. Justice Mayrand to adopt a position in defence of civil liberties and the court system in the same way as Chief Justice Deschenes did on that occasion.


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I listened with some amazement to what the Minister of Justice (Mr. Basford) said. I believe everyone can agree with his general proposition with respect to his position vis-a-vis the judiciary and its independence. These are platitudes and statements that have been with us since the first lawyer came off the ark.
The fact of the matter is, and on careful reading of what the hon. member for Peace River (Mr. Baldwin) said, and in his motions and questions that he has advanced on previous occasions, and what he said in the House today, it indicates one thing, if it indicates anything at all, that the hon. member for Peace River was not casting reflections on any judge or any court. He was casting some serious reflections on a form of trial which this parliament enacted many years ago, which allows that which he described as a Star Chamber tactic to take place. That is the important thing.
When this matter is concluded later on there ought to be the message that in this day and age we cannot abide in a free society an act that is as oppressive as is the Official Secrets Act. Rather than casting aspersions on the hon. membdr for Peace River, I would like to hear the Minister of Justice come forward and suggest some changes that would bring that statute in line with the principles of freedom of speech and freedom of association, while still protecting the state in matters of national security. To that end I would commend to you, sir, and to the Minister of Justice, who may have forgotten about it, that there is a private member's bill standing in the name of the hon. member for Peace River on the order paper today, which incidentally I have had the honour of seconding the motion with respect thereto, that perhaps the Minister of Justice might look to, so there will never again be an occasion for a minister of the Crown to stand up and utter the platitudes that the Minister of Justice uttered just a moment ago with respect to an honest submission made by a courageous member of the bar and a member of this House of Commons.


John George Diefenbaker: Mr. Speaker, I listened with interest to the Minister of Justice (Mr. Basford). One must conclude that it will be his final song in the House. He is leaving now because he does not like any suggestion of criticism.


Mr. Paproski:: He can't stand the heat.
5876

May 30, 1978
Privilege-Mr. Baldwin


John George Diefenbaker: Yes if you can't stand the heat, then leave the kitchen.
The doctrine as enunciated a few minutes ago by the Minister of Justice is the antithesis of jurisprudence and of freedom. I have appeared before many judges over the years. I am a member of my own bar of Saskatchewan, the bars of Alberta, British Columbia and Ontario, and an honorary bencher of Gray's Inn, and I have had some experience. I have known some judges who fully place themselves in the position, and I believe the Minister of Justice now occupies the same, that "there but for the grace of God goes God". That is the attitude that dictates.
There was nothing in what the hon. member for Peace River (Mr. Baldwin) said that in any way casts aspersions at the judge himself. The judge should not have rushed into print, and he should not have made the statements he did. In doing so, he departed from the independence of the bench which is expected of judges everywhere within our country.
As far as the hon. member for Peace River is concerned, I have listened to him over the years and the expression of his views, and they are singularly objective at all times. If I had been in his position I could not have restrained myself to the extent that he did, because in the law the pathways of today become the highways of tomorrow.
My mind goes back to 1945, the time of the Gouzenko investigation, when every principle of jurisprudence-the right of individuals to freedom under law,-habeas corpus was ended-was swept aside. When I raised this with the distinguished former president of the Canadian Bar and subsequent prime minister, Mr. St. Laurent, who was president of the Canadian Bar when I was one of the vice-presidents, I said, "You have abolished habeas corpus", and he said, "We haven't." The section that abolished it was simply this; that no one imprisoned could challenge his imprisonment. With that section man after man was imprisoned, night and day with lights on to keep them awake. Of those individuals, two or three were convicted and the rest were acquitted. At that time we said this has all the earmarks of the Star Chamber to the "nth" degree, and it had.
What has been said here, if the judge is permitted to regard what he says as the basis for the interpretation of parliament, would mean you cannot say anything about anything that happens in the courts. As the hon. member for Peace River said, in the courts he has appeared in on appeals the language is far stronger than anything used here. Indeed, this is remarkable for its clarity and simplicity when you go into a court of appeal and say, "This judge was wrong on this, this and this." There is no complaint surely in the supreme court at Ottawa, parliament, that the denial of the right of members of parliament to point out what they believe to have been wrong and unjust is something intolerable, something that cannot be accepted.
Parliament is supreme. Members are responsible. If they go beyond the field of responsibility they become liable. There was nothing in what the hon. member for Peace River said that went beyond responsibility and reasonable comment. It is

the judge who should be apologizing to parliament for having intruded his immodest view that because he is now a judge any mention concerning a trial that took place before him should not be made in parliament.
As a matter of fact, the Official Secrets Act is wrong in many of its sections. It permits tyranny to be enthroned. Changes must be made, but that is not the problem today. The problem here is, did a judge not himself exceed those realms of responsible observation that, in the case of judges, should always be silence?


Some hon. Members:: Hear, hear!


Ramon John Hnatyshyn: Mr. Speaker, the eloquence we have just heard has, I think, put in perspective precisely what is the issue. I want to make a modest contribution with respect to the statement made by the judge about the activities of my colleague, the hon. member for Peace River (Mr. Baldwin), regarding the Peter Treu case.
I think it is important for us to recall, as the right hon. member for Prince Albert (Mr. Diefenbaker) pointed out, that we have had many trials in Canada under the Official Secrets Act. Some of the trials referred to were precipitated by the disclosures of Igor Gouzenko. The hon. member for Peace River has pointed out, in questions in the House of Commons and references outside this House, the aspect of secrecy in this particular instance. It is interesting to recall that in the Gouzenko trials, as important as those were occurring immediately after the second world war when there was great concern about Russian activity in Canada and about spy activities, that each and every trial that arose out of those disclosures was open to the public, and every trial was heard and understood by every person in Canada interested in following the proceedings. That is an important consideration when we think of the way the law is and of ways in which it should be changed.
I was incredulous when the Minister of Justice (Mr. Bas-ford), who in the parliamentary tradition is the chief legal officer in the executive, stood up and put forward what I consider to be a misinterpretation of what the hon. member for Peace River has done in the course of his questioning of the particular trial proceedings. After listening carefully to what he has put on the record, and after reading what has happened over the last few weeks, it is evident that there has never been any suggestion of a personal attack on the competence of the judge in any way. It has clearly and simply been a question of the inadequacy of the law as it stands, and a plea for some changes that are long overdue in the Official Secrets Act.
I think it would be helpful to Your Honour to recall your own decision in the case that was raised with respect to the House of Commons and Chief Justice Evans. He made comments outside the House with respect to deliberations going on concerning the uranium cartel. If Your Honour looks back at your own remarks in that instance, I think you will be reinforced in taking a strong stand on behalf of parliament with
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respect to any attempted interference in the deliberations of this Chamber.
I want to make one final point, Mr. Speaker, about one of the pieces of information that has come our way with respect to Mr. Treu. Mr. Treu was tried by a secret trial-the kind of trial for which we have all indicated our abhorrence in this House. It is the kind of thing that takes place in other countries. After the charge was brought against Mr. Treu he was offered another contract in the same area of endeavour that he had been pursuing, by NATO. The trial was so onerous it bankrupted him so that he was not in a position to accept the contract. It is that kind of pressure and that kind of secrecy that make it quite legitimate for any member of this House to make reference, by analogy, to Star Chamber proceedings. In doing that we are not being critical of any judge. The judge has his duties to perform, and that is quite separate and apart from any allegation of impropriety on the part of any individual judge.
I stand in my place today in strong support of my colleague, the hon. member for Peace River, who has done a service to the improvement of laws in this country, particularly the laws governing secrecy, the laws pertaining to disclosure on the part of government, and in this case with respect to the provisions of the Official Secrets Act. I am proud to do so.


Mr. Speaker:: Order, please. As I indicated earlier, the matter will be pursued further when the precise text of the judge's remarks is available to us.



ROUTINE PROCEEDINGS


[Stage Direction]
Second report of Standing Committee on Agriculture-Mr. Smith (Saint-Jean).
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Mr. Ed Lumley (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, pursuant to section 17(2) of the Anti-Inflation Act I wish to table, in both official languages, copies of two reports referred to the Administrator by the Anti-Inflation Board.
Order Paper Questions


EXPORT DEVELOPMENT CORPORATION
John (Jack) Henry Horner: Mr. Speaker, I have the honour to table in both official languages, the report of the Department of Industry, Trade and Commerce and the Export Development Corporation on the question of international economic boycotts.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, the following questions will be answered today: Nos. 126, 127 and 782.


Mr. Herbert: Has the government considered the suggestion of the Official Languages Commissioner that aid to second-language teaching in the provinces might best be implemented through the Council of Ministers of Education and, if so, have any negotiations been commenced with the provinces?


Hon. John Roberts (Secretary of State):: The council of ministers of education is already actively involved in two federal-provincial programs designed to promote a knowledge of both official languages. They are the summer language bursary and second-language monitor programs. Both these programs are funded by the federal government and administered by the council of ministers of education, in collaboration with the provincial departments of education. At the request of the council of ministers of education, the federal government has agreed to fund in 1977-78, two pilot projects under these two programs. The pilot projects will: (a) offer 100 bursaries to enable Francophone students from minority milieus to take a six-week immersion program to perfect their knowledge of French; and (b) provide 40 Francophone monitors to French-language schools in minority milieus to assist teachers of French as a first language and teachers of other subjects in French. In 1976, for the first time, a special project was submitted by the council of ministers of education and accepted for shared-cost funding. This project provided for short courses for school administrators and other educators involved in the teaching of English or French as a second language and for the compilation of a handbook for school administrators, outlining the administrative implications of the teaching of English or French as a second language. The project is intended to cover fiscal years 1976-77 and 1977-78. The present agreement concerning the federal-provincial program for bilingualism in education will expire on March 31, 1979. Discussions have already begun between the Secretary of State and the council of ministers of education as a preliminary stage to the negotiation of a new agreement. This is the first time that the council of ministers of education has taken an active role in
80045-5V2

May 30, 1978
Order Paper Questions
the formulation of a federal-provincial agreement for bilingualism in education. Negotiations for the original agreement, which came into effect in 1969, and its renewal in 1974 took place on a bilateral basis between the federal and the ten provincial governments.


Mr. Herbert: Were the governments of Alberta and Quebec invited to participate in the land task force to study the supply and cost of serviced residential land in Canada and, if so, did they participate and, if not, for what reason in each case?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: am advised as follows by Central Mortgage and Housing Corporation: the governments of Alberta and Quebec were invited to participate in the land task force to study the supply and cost of serviced residential land in Canada. Alberta has not participated and Quebec participated until the provincial election of November 15, 1976. Alberta wished to include in the study all cost components of housing.


Mr. Joyal: Since 1970, did Quebec provincial ministers participate in any international conferences as members of a Canadian delegation and, if so (a) how many (b) in what conferences (c) in each case, what amount of (i) living (ii) travel (iii) representation allowances were paid by the government?


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: (a) Twenty-four, (b) Conference des ministres de l'education, from 1970 to 1977. Conference des ministres de la jeunesse et des sports, from 1972 to 1977. Conference constitutive de l'Agence de cooperation culturelle et technique (ACCT), 1970. Conference gene-rale de l'ACCT, 1971 and 1975. Reunion des ministres de l'Artisanat (ACCT), 1977. Conference des ministres de la Fonction publique (ACCT), 1971. United Nations Food Conference 1974. Habitat Conference, 1976. United Nations Conference on the Human Environment, 1972. Commonwealth Law Ministers Conference, 1977. United Nations Water Conference, 1977. (c) (i) and (ii)-Provincial ministers attending international conferences are entitled to a fixed allotment for meal allowances, which is based on the cost of living in the city where the conference is held. The federal government also pays for transport, hotel and other incidental expenses. For example, at the U.N. Water Conference at Mar del Plata, which lasted 11 days from March 11 to 25, 1977, the air ticket Ottawa/Mar del Plata/Ottawa was $1,159; the hotel $28.37 per day; the meal daily allowance $13.04. All in all, the average cost of a delegate amounted to $1,750. The Quebec government did not accept that the federal government pay the cost of its minister's participation in conformity with its policy of assuming itself the travel expenses of its participants who are members of a Canadian delegation, (c) (iii)-Representational allowances are not for the members of a delegation, but for the delegation itself. Therefore, representational expenses are accounted against the delegation.


Roger Carl Young: Mr. Speaker, if questions Nos. 357 and 469 could be made orders for returns, these returns would be tabled immediately.


Mr. Speaker:: The questions enumerated by the parliamentary secretary have been answered. Does the House agree that questions Nos. 357 and 469 be made orders for returns?


Some hon. Members:: Agreed.


Mr. Orlikow: 1.	For each year 1971 to 1976, what amount did the government contribute to each province for post-secondary education?
2.	For the same years, what amount did the government contribute to post-graduate studies in Canada or foreign universities?
Return tabled.

Question No. 469-Mr. Schellenberger:
1.	Is the government, in conjunction with the provincial authorities, considering the establishment of a Canadian Council on Education to co-ordinate the education activities of the various government authorities and, if so, what steps have been taken to date?
2.	What programmes has the government undertaken with respect to assisting elementary and secondary education and, in each case, what was the (a) cost, by province, in each of the past Five years (b) basis for the programme being initiated and funds allocated?
Return tabled.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, May 29, consideration of the motion of Mr. Chretien that Bill C-56, to amend the statute law relating to income tax and to authorize payments related to provincial sales tax reductions, be read the second
May 30, 1978
[Stage Direction]
time and referred to the committee of the whole, and of the amendment (Mr. Broadbent) (page 5548).
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, last night in closing the debate I had been dealing with what I consider to be some of the worth-while clauses of Bill C-56, namely, those dealing with Registered Retirement Savings Plans. I think I have given due credit to the government for those changes, as did the hon. member for Esquimalt-Saanich (Mr. Munro) and others on this side of the House who have been trying to get these changes for the last several years. I went on to discuss the philosophy of the RRSP and how it was changing now due to the needs of the nation to collect larger pools of capital, and to hope that individuals could share in this capital pooling and use the benefits from it to enhance their economic situation in their declining years.
Now I should like to move to what I think is the lost opportunity in Bill C-56 to do what would have helped the nation immensely at this particular time. The subject I am referring to is potential budgeting.
Our advisers to the ministers of finance for the last 30 years have held to a theory of fiscal budgeting that has now been demonstrated to be wrong in quantity and wrong in principle. There is a religious, fervent, stubborn inflexibility on the part of the people in the Department of Finance to send minister after minister into this House to bring in budgets which they know, before they bring them in, are wrong both in theory and in quantity.
We have been in a state of stagflation now for four years. Everyone in Canada knows that this country is strong in every way. People keep asking why, with all our strength of resources of the material sort, and resources of the human sort, should this nation be dragging behind when it should be leading the world in growth and in individual wealth accumulation and enjoying that wealth. Because of the people's need to have that question answered, I make the statement again that this budget, particularly the resolution in the budget dealing with income tax, failed to grab an opportunity to use the device of potential budgeting, which I think would have helped the country. It certainly would have helped the personal political fortunes of the Minister of Finance (Mr. Chretien).
The Minister of Finance is aware that I suggested proposals to him in the mini-budget debate of last November. To be fair, he was extremely interested in a favourable, constructive way. As a result I wrote a letter to him and put some of these ideas into written form so that he could take them before his officials, so they could look them over. The general sense of these proposals was that if he could pick certain items that the people of this country needed and wanted, and were not being produced and used in Canada, and if he reduced the tax on these particular items-and I am referring to the income tax tax-then there would be no loss to his balance of ways and means in his budget. In other words, since the tax collector is not collecting anything on these particular items, there is no
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loss of taxes if the tax is reduced, because there is no tax collected now.
On the contrary, if the income tax is reduced on the utilization of these particular objects, a large number would be purchased, which would mean a large number of people would go to work and a large number of people would be earning money. In turn these people would be off the social welfare list, and certainly off the unemployment insurance list. Because of the phenomenon of not having to reduce income from existing taxes, by reducing the taxes on these items that have a potential for the development of the nation and in bringing benefits to the people, this is called potential budgeting.
Last fall I pointed out that the only country I know of that has ever tried this method was the United States in 1964-1965. At that time the United States reduced taxes on a number of items, amounting roughly to $10 billion. They expected a drop in the income to the tax collector of the $10 billion. But because these were items not being utilized a great deal, and because people then bought them in great numbers, when the year was over the tax revenue had not dropped $10 billion, as was expected, but had gone up $19 billion.
I pointed out at that time that this technique of potential budgeting will only work if there is unused plant capacity and unused labour supply. Those are the two conditions that are needed. Of all nations in the world Canada has those two things in abundance. We have over a million unemployed and we have 18 per cent to 20 per cent of our plant capacity lying unused. All the items I listed can be manufactured in Canada.
To make absolutely clear that the record shows what those proposals were, I will list them. In a letter which I wrote to the Minister of Finance dated November 30, 1977, I suggested that a 100 per cent write-off under the Income Tax Act be given for proven hardware in the production of renewable resources. That means those types of energy sources that could be renewed each year, such as the wind, the sun and so on, and thereby encourage people to buy this type of hardware-to use the renewable sources of energy rather than the non-renewable sources such as natural gas and oil.
I will now list the items for which I propose a 100 per cent write-off. First of all is insulation. I do not think there is any argument about that. Insulation can save 20 per cent, 25 per cent or 30 per cent of the heating costs of the homes and buildings of this nation. Secondly, flat-plate collectors, air or liquid. There items are coming on to the market. They are expensive and make the shift over to flat-plate collectors marginal, but they still are proven items. Therefore they would only qualify under the proposal which I made of 100 per cent write-off. Thirdly, solar furnaces. Fourthly, sealed stoves, fireplaces and furnaces.
If one takes a drive around the country near Ottawa one would see almost one place in ten in the rural areas with wood piles in the yard. This would indicate that individuals on their own are going ahead with the new type of efficient sealed stoves, fireplaces and furnaces to get this form of renewable energy.

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The fifth item was heat exchangers. These are a vital part of the utilization of solar energy, whether it is directly assisted solar energy forms or whether it is indirect.
The sixth item is a solar designed greenhouse. These are showing up all across the country. I would think that there is hardly any question that these six items which I have listed can be qualified as proven hardware. They help the individual to shift from non-renewable types of energy to renewable.
The eleven points which I put forward and which I suggested should receive a grant of 150 per cent are items which are not only marginal in cost in the sense of the amount of money a person will save is hardly worth the expenditure, but because they are still in an uncertain stage of proof I say they should have a 150 per cent write-off. This percentage figure which I have taken of 150 per cent is roughly equivalent to what private industry or business gets when they are trying to go into new research operations. I know it is roughly 160 per cent for business, but I have picked 150 per cent for this list of 11 items. I have suggested that this type of deduction only be possible to the year 1985 on the grounds that by that time there will be proven equipment and a return should be made to the 100 per cent write-off.
1 will read these 11 items into the record, which will make sense to most people. First of all, heat pumps, whether they are from an air source or a water source. Secondly, concentrator collectors, solar thermal energy conversion, or STEC for short. Thirdly, heat storage facilities. This is vital in northern climates where storage must take place for a few cloudy days or for long periods of cold weather. Fourth, methane production. Fifth, vertical axis windmills. Sixth, solar absorption air conditioning. Seventh, residential photovoltaics. Eighth, individual water recycling and conversion of waste to energy. Ninth, conversion of cow manure to protein. Tenth, energy plantation; and eleventh, production of hydrogen.
That is a first draft. I could add quite a number to it. I think I have made my point, first that any individual in Canada who spends his own money to buy any proven hardware should have a 100 per cent write-off under the Income Tax Act. Secondly, any individual who buys something in the experimental stage and tries to make it work should get 150 per cent write-off. That was the essence of that proposal.
I cannot give with assurance the amount of business that would arise from this. I know the projections made by various associations and societies in Canada run as high as $1 billion a year on this type of transaction. A billion dollars worth of new items produced in Canada each year would yield a very sizeable income increase to the government, not to mention the wages and all the other benefits that would go through the system.
I think, and I think I am right in this, that the Minister of Finance is in agreement with that proposal. His letter came back to me dated March 2, 1978, four months later. I am not going to read it all. It is a very sad letter. Hon. members will

see why in a moment. I am just going to quote the key parts. I quote:
In your memorandum you suggest that any type of capital expenditure to reduce utilization of traditional energy sources by an individual, be accorded a fast write-off under the capital cost allowance system. The capital cost allowance system permits a taxpayer to deduct the cost of a depreciable asset in computing income where that asset is used to produce income from a business or property. Your proposal would represent a major departure from the general policy of only permitting deductions with respect to assets used for the purpose of gaining or producing income.
I might read one more line because I think it illustrates the type of thing the civil servants write for ministers.
In my view, allowing deductions for such personal expenditures would create a dangerous precedent and might seriously erode the tax base.
Translated into plain terms, the Minister of Finance signed a document, written by civil servants, which states that you must not give to the individual in Canada the same tax rights and privileges that business gets. If business spends money to make money, they get a 100 per cent write-off. If they spend money on experimental equipment and research, they get a 160 per cent write-off. However, to do that for the individual to make money by reducing his heating costs or electrical energy costs is a dangerous precedent and would erode the tax base.
Such a statement in the last sentence is completely false. Under the tax laws of parliament which have been put through in the last three years, we give individuals the right to get 166 2/3 per cent write-off if they invest in Canadian exploration or if they invest in Arctic exploration combined. That means if an individual taxpayer in this country wants to get a write-off against his income tax under the law passed in parliament, he can get 166 2/3 per cent write-off against any form of income as long as he puts it into helping to find more non-renewable oil or gas resources. However, he does not get one cent write-off if he puts even one dollar into trying to get some utilization of renewable energy resources.
That is the crime this government has committed. It is the crime to which the Minister of Finance signed his name when he signed that letter. It is an issue which the people of Canada have to make very clear to future governments, namely, that they want to make use of these renewable energy resources, particularly when they are going to save themselves a great deal of money, when it will make money for the government and when it will help the nation by not having to buy so much energy from offshore.
That issue destroys the whole budget presentation of the minister. He brought in a neutral budget with a few changes like RRSPs, the question of rollover for capital gains tax for farmers, small business people and so on, all of which are good. However, why ruin a budget containing a few good things like that with a decision to turn down something substantially bigger, something that would help the minister balance his budget and get this country out of the stagflation that now exists?
This issue of letting civil servants who have been consistently wrong for 30 years or more run every minister of finance has to be the main issue in all our democratic forms of
May 30, 1978

government. I do not mind confessing, and I have said this before, that no person was better liked for his essential honesty than the present Minister of Finance. He has been around this House for 13 years now.


Steve Eugene Paproski: He should know better.


Francis Alvin George Hamilton: He should know that even if you are honest yourself, when you take over the job as Minister of Finance you have a job to do, that is, to face up to the fact which everyone knows, that the advice civil servants have been giving their ministers for 30 odd years has been consistently wrong, because it is based on a theory not supported by quantitive evidence. We have found a failure in the theories for the past 15 years, particularly for the past five.
The government resists many new ideas when it deals with advice given to it where it affects the Department of Finance. I am not the only one putting forward this concept of potential budgeting. The Economic Council of Canada, which was set up to give alternative advice to the government, over and over again has appealed to the government to use some form of potential budgeting. It is not the answer to everything, but it is a help.
We have been in a classic situation for the past four years with rising unemployment, rising inflation, and rising deficits in the budget. The minister could have helped balance his budget, helped people get jobs, and helped get the country going again, but the civil servants in that department forced this minister, well liked and honest as he has been, into a position where he is down on his knees exactly the same as his predecessors. He walked into this House with a neutral budget which ignored this principle to move forward.
Coming from Shawinigan in Quebec where people are known for their common sense and their disregard for experts, I had hoped he would stand up for his proposal that he was personally in support of and say, "I am the Minister of Finance. I want this done. Get me the details and make it work".
Whether he had the support of the Prime Minister (Mr. Trudeau) or not, I do not know. However, that poor Minister of Finance has been forced to come into this House in the two or three weeks since his budget to defend himself on a hopeless issue of trying to start a political fight with the province of Quebec. This is the tragedy we have witnessed here.
A fine person, a nice person, has been forced to accept the will of the civil servants on this question, not taking advantage of the opportunity to balance the budget and to use a better idea, namely, potential budgeting and, second, to fight on the grounds that he was not going to do anything to help the country economically, but going to start a political fight with the province of Quebec, hoping to create a division between Quebec and the rest of Canada, then walk around and pretend he is the only person who can get us out of the mess the Prime Minister got us into.
It is a tragedy to see a very fine human being destroyed, not only by civil servants but by the Prime Minister who seems to
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have only one motive for being in this House, to keep a glorious fight going between various parts of this country. With all this opportunity to help the country economically and to get people working again, the Prime Minister chooses this particular time to start a political science fight with his old friend and buddy, the premier of Quebec. When you get down to it, they will end up the same buddies they have always been, running that phony fight on both sides, all in the name of keeping in the headlines.
The province of Quebec is part of Canada. The province of Quebec wants to be part of Canada. The province of Quebec is suffering more than most parts of Canada in this present stagflation. They would give anything if the government in Ottawa would grapple with the problems of agriculture and industry in the province of Quebec and get at the great development opportunities which exist in that province.
Resource wise, that province is one of the richest places in Canada. They are hard working people with great resources and great opportunities for markets, and all they get from their politicians in that province is a fight, and name calling, or something that does not even count.
This pretence that our country is disunited because people speak a different language in Quebec is as phony as a three-dollar bill and worth as much. The people in Quebec are united with us in believing we have a good country, and they would like to make it even better. But the minister did not take the opportunity of the budget to use the income tax provisions to get the country rolling again.


Mr. Hugh A. Anderson (Parliamentary Secretary to Minister of Fisheries and the Environment):: Mr. Speaker, perhaps I could comment on the remarks made by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). By the end of his speech I felt that the only thing he left out was that Mr. Levesque had become a Father of Confederation. It seems the premier of Quebec has become a folk hero to the conservative opposition.


Steve Eugene Paproski: That is what you would like people to believe.


Hugh Alan Anderson: This is an historic budget. It is historic because it is the first time since Confederation that the federal government has brought in a budget in co-operation with the provinces of Canada, the first in which a common approach was taken in deciding the best means to stimulate the economy. This is sometimes overlooked, perhaps for political reasons, but as I say, I believe the budget will be marked by historians as a turning point in federal-provincial relations very similar to what happened earlier this year when the provinces sat down with the federal government, not in a spirit of confrontation but regardless of party, realizing they were engaged in an attempt as leaders of the country to chart a course which would benefit the people of Canada.
It is, indeed, a turning point when politicians can forget political grandstanding and look at the good of the electorate

May 30, 1978
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rather than at their personal fortunes; when they can make speeches not on behalf of their own parties or of themselves but in the interest of providing a better economic life for the people. In this context the February conference will be a historic turning point in Canadian life, as will the April 10 budget. It shows that, contrary to what Mr. Levesque, Mr. Parizeau and others say, Confederation can work if we have leaders who are interested in the electorate rather than in their own political fortunes.
The April 10 budget will be assessed by future generations of Canadians not on the issue of who is right and who is wrong in the context of the two or three cents at issue for Quebec. They will look at the April 10 budget in the light of the fact that an agreement was reached with nine provincial premiers in the course of a further evolution of the federal concept. Future historians will note that this evolution occurred during a time of crisis. But do you sincerely believe, Mr. Speaker, that anyone could now take a step backward and argue that the provinces and the federal government do not have an interlocking goal? Do you think that in future years when the subject is brought up at conferences between the federal and provincial governments, or discussions on the budget, people will not realize that a historic step has been taken in the development of Confederation?
There are some-and they should know better-who say this was a bumbling effort on the part of the federal government. They say this because, obviously, Quebec has not accepted the proposal contained in the budget. What they do not admit, though, is that nine other provinces agreed to it and that the tenth province did not make it known whether it was for or against the proposal advanced by the Minister of Finance (Mr. Chretien). I can only compliment the Minister of Finance for risking federal prestige knowing very well that Quebec under its present leadership is not one of the strong backers of co-operation-that the province at this point in its history would surely not be the first to approve of the federal government's position in this area.
No one in this country or in the House was so naive as to expect Mr. Parizeau and others like him to compliment the federal government on its initiative in assisting the provinces to reduce their sales taxes.
Does anyone in this House feel surprise if this issue, like others in the past, is used to the advantage of a party which is, to say the least, not devoted to the idea of one nation based on equal partners? Would it be fair to say that what happened after the April 10 budget might have been predicted? But the way events have turned out is not the fault of the Minister of Finance who took the initiative. It is better to have taken this step forward in the development of joint federal-provincial relations, risking what has happened as a result of the reaction in the province of Quebec, than to have done nothing.
What was not so unexpected was the reaction of some of the members of the opposition to use this issue to cudgel the federal government, blaming the Minister of Finance rather than the failure of one province to make up its mind on the issue until the day of the budget. That was the surprising

thing. Surely at this point, when a referendum cannot be many months away, we as federalists should not be sticking knives in each other's backs for political gain.
When honest mistakes are made, criticize us. But in the circumstances I have outlined there ought to be more integrity than to lay the blame upon the federal government and claim that nice chaps in Quebec have been raped and walked over. That is not the case. If a rape occurred, it was a rape with consent. But I suggest that rape did not occur. Advances might have been made, but no consent was arrived at with the province of Quebec.
I said this legislation was historic. It was historic in another sense also, and I am surprised that members from British Columbia have not brought out the fact that in the April 10 budget one of the most contentious issues, in the last four years at least, has been resolved, a point that we have discussed with various ministers of revenue and ministers of finance over a period of four years. It is a point on which reports, briefs, and submissions have been made by the International Woodworkers of America and the Forest Council of British Columbia over a period of four years. Now it has been resolved, but very little has been said about it. I have seen very little in the media, in the press, and on television advising people in British Columbia of the fact that this matter has been resolved. If I may, Mr. Speaker, I should like to quote from a brief presented to the Government of Canada by the International Woodworkers of America, Regional Council No. 1, and the Forest Industrial Relations Board Limited. It states:
On April 22, 1977, Revenue Canada taxation officially confirmed in letters to Forest Industrial Relations Limited and to the International Woodworkers of America that effective January 1, 1977, the minimum valuation on board and lodging in the British Columbia forest industry is $6 per day ... The letters established that where room and board are not supplied free, there is a benefit equal to the difference between the amount charged the employee and a reasonable valuation. In addition, the letters point out that there may be reason to review the minimum valuation of $6 per day from time to time as changes occur in "fair market value" or "cost to employer". The effect of this ruling has been to increase the taxable income of logging camp residents in the amount of $3.50 per day since the cost per day assessed employees by employers has been $2.50 per day under the Coast Master Agreement.
This recent ruling will generate considerable uncertainty, unrest and apprehension in the minds of logging camp residents. Moreover, it will seriously affect their morale as employees and as taxpayers. The basic reason for this situation is the fact that the Canadian tax system has never included as taxable income for logging camp residents the difference between the cost paid by the employee and the reasonable valuation of the benefit. Historically, the Canadian tax system has recognized the social realities of life in isolated logging camps, and in practice has not applied the "none shall escape" philosophy to this important segment of the work force in British Columbia's primary resource industry. The significance of the recent ruling cannot be assessed in economic terms alone. It must be measured in historical, psychological and sociological terms because of the unique nature of life and work in logging camps. In short, what may appear as a loophole and an inequity, may in fact be an equitable situation which recognizes social reality and social needs and which would create an inequity if it were rescinded.
I should like to continue with a short quotation again from the same submission to the Government of Canada, in full realization of the fact that this submission was made prior to the October 10 budget. It reads:
May 30, 1978

Forest Industrial Relations Limited represents 122 companies engaged in logging and the manufacture of forest products in the coast area of British Columbia ... In addition, there are many companies in other parts of the province who are also obliged to operate cookhouse and bunkhouse facilities. There are approximately 40,000 members of the IWA in British Columbia of which 5,000 reside in remote camp sites . .. The impact of the ruling in economic terms must be evaluated from several standpoints.
From the standpoint of each individual affected, the increased taxation will be in the order of $335 per annum. In order for camp employees to maintain their take-home pay, an inflationary increase of 35 cents per hour will be necessary. As we have stressed earlier, the impact of the ruling would be a reduction in take-home pay for loggers, who amongst other things have uncertain work years, work under changing and often adverse weather conditions, spend time travelling to and from remote locations, and often are required to maintain another residence for family. These are but a few of the additional factors that compound the problem.
I said in my opening remarks that it was an historical budget in several respects. The second historical aspect of the budget is the fact that on April 10, 1978, the Minister of Finance announced that it is expedient to amend the Income Tax Act and to provide, among other things-this is the part I consider to be important-that for 1978 and the subsequent taxation year an individual be entitled to exclude from income the value of board and lodging received in respect of employment at remote work sites at which he could not reasonably be expected to maintain a self-contained domestic establishment.
As a result of the April 10 budget there will be no requirement for an inflationary escalation in the wage rate in the forest industry in British Columbia. We will recognize by law that individuals at work in remote camp sites, those who are engaged in what is sometimes a dangerous occupation, those who are employed in an occupation which demands rigorous physical standards, those who work in mud and rain and other equally hard circumstances, will be exempt from taxation on those parts that the employer contributes to the room and board of those who cannot be expected to maintain a residence in a remote area. I say to that, hallelujah.
Many of us from British Columbia have worked hard to have this exemption made into law. A year ago at this time we were discussing this with the forest industry, with the IWA, with MacMillan Bloedel and with various other companies, and there was great concern that those people who were working at remote camp sites, if charged additional taxes, would ask themselves why they should not go to work in cities like Nanaimo, Vancouver or Victoria if they cannot have this exemption, and why they should be separated from their families and not even be able to watch television. It sounds strange, but many of those areas do not have radio or television, so that the loggers, apart from being separated from their families, cannot even listen to radio or watch television. We as members of parliament cannot do much so far as their love life is concerned, we cannot provide some of the amenities because of the isolated location, but we have recognized that their situation was unique and we have given it some credit. For that reason I thank the government, members of the cabinet, and especially the Minister of Finance, for listening to the pleas of these people.
Income Tax Act
Also I should like to thank two people with whom I worked very closely. I am referring to Mr. Earl Foxcroft, the President of International Woodworkers of America, Local 1-85, who lives in Port Alberni, and Mr. Joe Standell, who is on the management side of MacMillan Bloedel in Port Alberni. Their recommendations, support, and pressure were appreciated greatly by myself. The decision by Mr. Guay not to implement the policy in January, 1978, and the subsequent decision, were in no small way achieved because of the efforts of these two fine gentlemen. I thank them for their efforts.
There have been other comments regarding Bill C-56. Aside from having a very strong forest industry in my constituency of Comox-Alberni, there are many people engaged in the dairy business and truck garden fruit and vegetable operations. As a result of amendments to the act, I am pleased there will be a change regarding the transferring of property in family farm corporations. A family farm corporation can be transferred to a farmer's children without immediate tax on any capital gain.
Many hon. members of the House are to be congratulated, especially those from the prairie provinces who have worked very hard on that section. If we are to have a viable agricultural industry, concessions must be made regarding the transfer of family farms to sons, daughters, etc. It must be done in a manner which does not force sale in order to pay taxes on capital gains. Farmers in the dairy business in my constituency will find that section and another one which deals with transfers to children who have an interest in a family farm partnership will provide immediate relief in order for farms to remain in the family without a sale taking place to pay capital gains on the increase in the evaluation of the property.
Over a number of years a number of progressive budgetary measures have been taken. Sometimes it is forgotten, although at the present time there is a budgetary deficit, that one of the reasons for the deficit is that since 1974 it has been the policy of the federal government, through indexation of taxation, in fact to collect less than it would have normally collected. Since 1974 the federal government has given up approximately $5 billion in taxes which it would normally receive as a result of its indexation policy.
Sometimes it is difficult for Canadians to perceive what the solutions are if deficits are to be avoided. Obviously if a deficit occurs, one of two things can be done. The taxing power of the federal government can be raised in order to make up for those deficits, if it is felt that those expenditures are required. In the four years I have had the honour of being here, for very obvious reasons 1 have not heard anyone stand and demand that the government raise the taxes of the people of this country. What has been said is that the government should reduce its spending. I have no disagreement with that. It is a manner of solving partially a deficit situation. What I have never heard in the House or in committee is where these savings should take place.
It is a fact of life that 60 per cent of government spending is done by the municipalities and the provinces. Approximately 40 per cent of the spending by governments in Canada was
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May 30, 1978
Income Tax Act
done by this august body, the Government of Canada through the House of Commons. Out of the 40 per cent spent by the federal government, we pay it back to the provinces in the form of cost-sharing programs.
If one looks at the budget of Canada in a similar manner to a housewife looking at her budget, one would indicate that before a dollar is taken in, 40 per cent of income has gone out in the transfer of payments. Very few people on the government or opposition sides would say that 40 per cent should be renegotiated and cut down. Over the years we have seen greater and greater amounts of funds being transferred to the provinces. I have a strange sense of humour, but it gives me a considerable laugh that some of the provinces which are very rapacious in taking and demanding more in the form of transfer of payments, use the federal government as an example of a wasteful child. They use their own healthy, balanced economies as models for the federal government to follow.
If the federal government could decrease its spending overnight by 40 per cent, it would become a model of restraint also. But it would mean the provinces would have 40 per cent of their incomes decreased, which would result in them being in either deficit positions or having to raise their taxes. I am not criticizing the provinces in their financial matters. I bring this up because I do not think the issues concerning where money should be spent and how it should be spent in Canada has been debated adequately. It is no longer good enough to say the government and the federalists are always wrong.


Mr. McKenzie:: But that is correct.


Hugh Alan Anderson: It cannot be said any more. One must say what is wrong with the government. Solutions must be proposed, and the provinces and their spending should be taken into account. Anyone who does not do that is being a charlatan, or a person I would not trust too much. It is not enough to indicate that it is necessary to cut down on government spending. One must say where the spending can be cut down.
If the Public Service of Canada is abolished, would there be a large saving to the people of Canada? Would taxes be reduced by several billions of dollars? Would the budget be balanced? Of course not.


Mr. Munro (Esquimalt-Saanich):: What about cutting down the number of civil servants?


Hugh Alan Anderson: If one civil servant was taken off the payroll, our problem would not be solved. Hon. members are aware of that. Are Canadians willing to have a cut in health and welfare benefits? Should there be a cut in the Department of National Defence? I have not seen many members jumping to their feet and proposing cuts in the Department of National Defence. Where can expenses be reduced?


Lorne Edmund Nystrom: The Senate.


Hugh Alan Anderson: The people of Canada have the right to hear from opposition members not only that expenditures should be reduced. It is not enough to indicate that alone. Opposition

members should make proposals which indicate the areas where expenses can be reduced by $2 bilion, S3 billion, or $4 billion. The people of Canada should be shown where reductions can be implemented, because they are not as dumb as hon. members opposite think they are. I have heard that story before.


A. Daniel McKenzie: I rise on a point of order, Mr. Speaker. I would point out that on February 2 of this year, on our opposition day, we presented a motion calling for a review of every government department and every government program.


An hon. Member:: That is not a point of order.


A. Daniel McKenzie: This was intended to introduce sunset laws, and it was turned down by this Liberal government and the NDP. They are not the least bit interested in reviewing anything.


Mr. Deputy Speaker:: Order, please. The hon. member will agree, I am sure, that this is a difference of opinion. I notice he has not participated in the debate. He can make these points and even pursue them if he seeks the floor.


Hugh Alan Anderson: Mr. Speaker, I can understand the reason for the hon. member standing to speak. He is right in one respect. He is one of the few members who has come up with a positive suggestion. He said what they would do would be cut off the deputy ministers. He was going to have a purge. The only problem is that the next day his House leader stood up and said that was not the case. I admire the hon. member for his intervention, but I must suggest there is a negative aspect to it.


Some hon. Members:: Hear, hear!


A. Daniel McKenzie: On a point of order, Mr. Speaker, if there is one thing the hon. member for the island has proved, it is that he reads absolutely nothing. I would refer him to the May edition of the Argus Journal in which he can read what civil servants are saying about the government's policies and all its lay-offs.


Mr. Deputy Speaker:: Order, please. I suggest to the hon. member that this is not a point of order but a point of dispute.


Hugh Alan Anderson: Mr. Speaker, I respect the intervention of the hon. member and, as he knows, I respect him. I gave him credit for the fact that he made positive suggestions. The only difficulty we have arises from the fact that his House leader took the hon. member to task and told him to be quiet.


A. Daniel McKenzie: Obviously you do not read anything.


Hugh Alan Anderson: I have no objection to the hon. member's statements. I am certainly not one who would attempt to increase the number of people in the civil service. However, this is not a simple matter. In the province of British Columbia we have a salmon enhancement program in respect of which the federal government will be spending $150 million over a
May 30, 1978

five year period. We do have constraints in respect of manpower years in the Department of Fisheries. While it can be said that we should not be increasing the number of people in the service of the Government of Canada, how does one bring forward a program of this type without having additional people in the employ of the government?


Steve Eugene Paproski: What has this to do with this bill?


Hugh Alan Anderson: I agree that there should be extreme care taken in respect of the number of people we bring into the civil service. If there are ways of having work done on contract which will not affect the quality of the product, I would accept them. I use this as one example in the province of British Columbia of tremendous expansion. That is one of the growth areas of Canada, just as is the province of Alberta. We have had a number of government programs in conjunction with the budget which have made a difference in the last ten years. This has resulted in growth in the gross product of that province by leaps and bounds. It has been a growth of sixfold or sevenfold in the past ten years.
I commenced my remarks and will conclude them in the same vein. In this situation we are dealing with a budget that is historic. It is a budget that recognizes Canadian unity by innovation, in the sense that even at the risk of budgetary secrecy we have consulted with provincial ministers over a period of time. We brought them into discussions with the Minister of Finance in order that a stimulus might be provided in quick order. This required the co-operation of provincial premiers. I think it is of credit to the premiers and the Minister of Finance that this co-operation did occur.
There is no question but that when people look at this event in time, when they look at this portion of Canadian history they will see an advancement or evolution of the consultative process. Surprisingly enough, this required no regulation except the bill now under consideration to confirm the action. It required no administrative or bureaucratic apparatus. It required only consultation, people talking with each other. History will record this particular budget as a milestone on which to peg one's hat in the evolutionary process. Perhaps it started a few years ago, but this is one of the signposts that historians will look to as an example of the consultative process.
Instead of arguing about the powers that belong to the provinces or the federal government, and instead of tearing the country apart through debates which basically solve nothing, and only enhance a certain position, be it federal, provincial or party, this will be seen as an attempt by the leaders of this country to accomplish through negotiation, crossing boundaries of purely conceived constitutional matters, amendments, and articles. Regardless of whether a matter is within provincial or federal jurisdiction, as a result of this consultative process we will not require a federal-provincial conference on constitutional rights in order to resolve it. We will not require such a conference in order to make decisions on matters that may rest in the provincial area or within federal responsibilities. We will be able to cut through those responsibilities by
Income Tax Act
negotiation with the provinces. This is important, regardless of budgetary measures brought forward.
Incidentally, those budgetary measures were welcomed. I suspect there are other areas in which we can do exactly the same thing without the formalization of a constitutional conference. I suggest that this may be one of the ways to resolve problems in Canada when we cannot obtain formal agreements among the federal and ten provincial governments. Perhaps situations of that kind can be resolved in exactly the same manner adopted in the budget on April 10. We can obtain a consensus on a short term basis, and will be able in this way to solve short term problems. This lesson will not be lost by the present leadership or any future leadership, be it of the Liberal or Conservative parties, because a model has been established.
We have proven with the aid of the provinces that this cooperation can exist, and through it we can accomplish many things in the future. If it has been done once, I suggest that it can be done in other areas, and that is why I say a milestone has been reached. With regard to the second subject which I brought up on the budget, I can only thank the Minister of Finance on behalf of the people of British Columbia, those especially in the forest industry who have had a long, outstanding grievance resolved, and who, I am sure, will reciprocate at some future date.


Mr. Gilles Caouette (Temiscamingue):: Mr. Speaker, I have been listening for about 40 minutes to the rather irrational remarks of my predecessor. To say in the House that lack of respect for the Canadian constitution should be a positive attitude towards the future and that it should be the corner stone of forthcoming discussions is, I think, reason enough to say that that person should not sit in this House and is wrong in using such arguments to justify a totally anticonstitutional attitude on the part of the government. I deeply regret that hon. members attempt to support such theories in the House. Concerning Bill C-56 generally, the proposed measures are positive; they result from the pressures exerted by intermediary bodies, by the opposition parties and, in some instances, by members of the government.
However, the bill in general reflects a little the attitude of the government which tends to encompass a variety of measures which are acceptable to the population as a whole, but we do find one which is not acceptable. For example, in clause 1 about deductions for board and lodging for workers in a remote location, I think that the opposition parties and some government members have been suggesting such a measure for a long time.


An hon. Member:: We did too!


Gilles Caouette: But what the hon. member opposite neglects to say is that it is precisely the same party in power which created those taxation measures a few years ago.
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But today the reaction sets in and they realize the time has come to bring about some changes.Clause 4 deals with corporation loans to enable an employee to buy corporate shares which are not to be included in income. While I was working in industry, I participated in the purchase of shares of the corporation capital stock, an indirect form of participation in company profits by the employee. At that time, this was not taxable but the present government has found a way to levy its share. Bowing to the pressures of some opposition members, of employees of corporations involved and, I must add honestly, of some government members, we see that the government goes back on decisions it has made a few years ago, but only after a lot of pressure, and particularly after having created the problems itself.
If one examines all the clauses in Bill C-56, one realizes that in every sector the present government itself has created the problems. It is now backtracking, due to opposition pressures for changes, trying to make people believe it is bringing about some changes while trying at the same time to make the same people forget that it should be held responsible for those problems.
Clause 6 talks about the 50 per cent allowance on the amount for research and development. How many years have Canadians been asking for better research and have we, of the Social Credit Party of Canada, suggested better or more direct assistance to our universities so as to have better research? It is not only a matter of helping the companies, but also of helping the research centers in our universities more adequately than at the present time. This is not mentioned in the bill. However, there is an acceptable concept which allows a tax deduction for research and development. Clause 13 concerns the revenue and the properties sold to the Crown. Clause 14 concerns farm transfers without capital gains.
Once again, this is an acceptable provision that the opposition has been requesting from the start. Here is another example: which government was it that implemented the capital gains tax if not the present one? At that time, representations were made to exclude the farming industry. It was included anyway. Perhaps because there is a possibility of elections, the Minister of Finance is now prepared to reverse the position of the government and to exempt farm corporations from the gains tax when the land is transferred to the children or the grand-children of the owner. This is certainly an acceptable provision, but it has resulted from the bad administration of the government which, after a few years, must now do something to correct the unfavourable effect of a provision that it implemented.
Clause 29 allows the Northwest Territories to instaure an income tax system so that in their present economic and financial system, the residents of the Northwest Territories will learn what public debt means, what it means to borrow from other countries and to pay interest on those loans in the form of income taxes. We are now showing the last area of the
[Mr. Caouette (Temiscamingue).l
country which is still ignorant of all this how to get into debt by allowing it to collect income taxes.
Clause 30 is certainly the one which should not be included in Bill C-56. As I was saying at the beginning, generally speaking the provisions of the bill are indeed acceptable because these are corrections brought upon in the wake of the disastrous administration of this government mainly since 1974. Clause 34 deals with retirement savings which one will be able to collect between the age of 60 and 71, and again contains rather interesting features. Clause 36 deals with the premiums on life insurance, clause 59 deals with the tax rebate to the provinces and the deductions provided in clause 30, this is a provision designed to confirm them. Yet above all I would like to go back to deal with clause 30 and that part of it which has been so highly debated since the presentation of the April 10 budget. As I mentioned earlier we have heard everything when the hon. member for Comox-Alberni (Mr. Anderson) suggests that the fact of criticizing the attitude of the government in its underhanded actions towards the rights of the provinces should be an acceptable pattern for future negotiations, and I find regrettable that such remarks can be made in this House.
I read the speech of the Minister of Finance (Mr. Chretien) and that part which deals with clause 30 of Bill C-56, about which the Minister of Finance takes pride in the speech he made on May 17 and which can be found at page 5519 of Hansard. With reference to the last quarter he said, and I quote:
In real terms, the sales in those two months were 6.1 per cent higher at an annual rate than in the fourth quarter of 1977. This suggests that the $100 tax cut early this year has helped boost consumer demand.
It is obvious that a tax reduction favours consumption and the Socreds have been calling for several years for such exemptions and tax reductions in order to allow a rise in the purchasing power of the population. We have also suggested a consumer compensated discount so as to increase the purchasing powers of individuals. Meanwhile, the Minister of Finance, the Prime Minister (Mr. Trudeau) and the members of cabinet have always repeated that we did not understand anything and that the theories of the Social Credit did not make any sense; yet, when the decision is finally made to reduce the federal income tax by S100, they automatically start boasting that they have increased the consumption for the benefit of the people. And that is the solution to the problem of inflation we now have. Not measures like those advocated in clause 30 whereby the ball flies back and forth to the provinces and the federal government, no, but direct measures under federal and not provincial jurisdiction.
A little further in his speech, the Minister of Finance tells us he succeeded in establishing higher import tariffs to preserve and protect the Quebec clothing and footwear industries. Heaven knows how many years we have been urging higher tariffs to limit imports and protect our own industries. Here
May 30, 1978

again this government had reduced import tariffs and so destroyed our industries in Canada, only to realize their mistake today after representations by opposition parties, particularly in Quebec by the Social Credit Party of Canada which indeed clamoured for stricter import controls to boost our production.
Today the minister is boasting about this. But what did he say? He said that the sales tax cut will increase consumer spending. It is a fact. But instead of acting directly under its powers the federal government reduces its taxes by forcing the provinces to increase theirs to pay for the sales tax cut which amounts to 8 per cent in the case of the province of Quebec or two or three points in other provinces.
In fact, as an electoral ploy at the federal level the Minister of Finance announced he was giving a sales tax cut to the people but he forces the provinces to pay for it, as the four premiers of the western provinces pointed out. The Minister of Finance has recognized this fact in his May 17 speech. He said himself on page 5524, that in spite of the answers he gave in this House, at the time of the negotiations he made that proposal but he never came to an agreement with Mr. Pari-zeau. Even before his budget he admits in his May 17 speech that he never came to an agreement with Mr. Parizeau.
I wish to raise a touchy issue concerning the statements made by the western premiers after that measure. Later they declared that this proposal had been forced upon them when there was an agreement and their cabinet had given its approval except for Alberta. The Minister of Finance recognizes that they never came to an agreement with the province of Quebec and that the four western provinces had been forced to accept an anticonstitutional measure which infringes on provincial rights. So we suggested that instead of asking the provinces to pay for the sales tax cut the federal government should issue a consumer discount, particularly on Canadian products. This would avoid the constitutional issue we are now creating. That example will be used in future to justify breaches of constitutional rights. I wonder what the federal government would do if overnight the province of Quebec were to encroach upon the federal government tax jurisdiction and levy custom duties at Quebec boundaries. I am not sure what the federal government would say. It would complain and scream blue murder. Quebec would be accused of eroding federal rights; yet the Minister of Finance does so directly in forcing the provinces' hand in an underhanded, hypocritical way. The provinces are forced to reduce or raise taxation to pay for the sales tax. The Minister of Finance says himself that he is acting hypocritically. On page 5524, he is recorded as saying, and I quote:
Each time I send a cheque, I consider it as an expense. To avoid any increase in government spending, since everybody complains about the level of spending,
we decided to leave some tax room-
Further on he said, and I quote:
-1 wanted to do without creating the false impression that we are spending money-
Adjournment Motion And further on he said, and I quote:
As we are collecting taxes, nobody has noticed what is happening.
That is acting hypocritically to force the provincial governments and make people believe that the government is giving them something.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Turner):: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Ottawa West (Mr. Francis)-Public Service; the hon. member for Pembina (Mr. Elzinga)-Post Office; the hon. member for High Park-Humber Valley (Mr. Jelinek)-Transport.
It being 5 o'clock p.m. the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, public bills, private bills, and notices of motions.
May I remind hon. members that the 40-hour limit for private members' business has now been reached, pursuant to section 6 of Standing Order 15, and that there will be no private members' business on Mondays and Tuesdays for the balance of the session.


Mr. Jacques Olivier (Parliamentary Secretary to Minister of Labour):: Mr. Speaker, all parties have agreed to set aside all bills and proceed tonight with consideration of Bill C-223 in the name of the hon member for Nickel Belt (Mr. Rodriguez).


The Acting Speaker (Mr. Turner):: Order, please. It has been suggested that we set aside all preceding bills by unanimous consent and proceed to Bill C-223. Is that agreed?


Steve Eugene Paproski: Agreed.


Stanley Howard Knowles: Agreed.

Canada Labour Code


PRIVATE MEMBERS PUBLIC BILLS
[Stage Direction]
May 30, 1978

Mr. John Rodriguez (Nickel Belt) moved: that Bill C-223, to amend the Canada Labour Code (certification of union), be read the second time and referred to the Standing Committee on Labour, Manpower and Immigration.
He said: Mr. Speaker, I suppose in these times, when inflation is as high as it is, that Canadians have been exposed to considerable propaganda that the contributing factor to high inflation in Canada has been the demands of the trade unionists in this country, the workers in Canada. One is left with the impression that indeed the vast majority of Canadian workers are unionized. The impression is left that in every work place, in every nook and cranny across this country, workers are organized into collectives and that, somehow or another, there is a juggernaut of big trade unions sweeping the country and engulfing workers, whether they are waitresses in restaurants or those people in the highest technological jobs. Maybe we ought to correct the record and set it straight with respect to the whole question of the extent of unionization in Canada.
In 1967 in Canada the percentage of workers organized into trade unions, excluding agricultural workers, was 32.3 per cent. In 1976 that figure rose to 37.3 per cent of the nonagricultural work force. As at the beginning of 1977, the latest figure indicates that 38.2 per cent of non-agricultural workers in Canada are indeed organized. So we see that the latest figures indicate a little over one third of the non-agricultural work force in this country organized into trade unions.
How does that compare with the European community? If we take 1972 figures, and remember that in 1972 34.6 per cent of non-agricultural workers in Canada were organized into trade unions, we find, for example, that Belgium had 71 per cent of its workers organized into unions; Denmark, 50 per cent; Luxembourg, 50 per cent; Great Britain, 48 per cent; Ireland, 43 per cent; The Netherlands, 41 per cent; Italy, 35 per cent; Israel, 80 per cent; Sweden, 70 per cent; and Austria and Norway over 60 per cent. So when we compare Canada to the other industrialized countries of the world we find that we are far short of the extent and development of trade union organization within those other countries.
What then should be the purpose of a federal labour code? Surely a federal labour code belongs to the workers of Canada? Surely the federal labour code ought to be for the benefit of workers, not for the benefit of employers? Employers have other statutes which provide them with certain protections in this country. A federal labour code therefore should speak of enshrining the rights of Canadian workers in law. One of the first rights is the right to organize. That is a fundamental right of a worker in this country. Indeed, it is the

very basic ingredient of democracy, the right of a worker to give his labour. That is really the only thing over which he has any control.
There are countries, of course, where workers are forced to work practically at the end of a gun. But that in a free society has never been the practice. The collectivity of Canadian workers is a fundamental democratic right. It seems to me that if we allow Canadian trade unionism to be destroyed, so can the basic rights on which this truly democratic system relies be destroyed.
What does this Bill C-223 intend to do? What is the purpose of the bill? At the present moment if the workers in a work place want to organize into a trade union, cards must be signed first of all. In the present code it requires at least 35 per cent of the workers within a local work place to sign cards. Those cards must then be submitted to the Canada Labour Relations Board, the CLRB. On receipt of those cards the CLRB decides a date for a vote on whether there will or will not be a trade union in that work place. That has been a serious drawback with respect to organizing workers into collectives for the purpose of protecting workers and extending the rights and improving the quality of life for workers.
In effect because of the requirement that 35 per cent sign the cards, a considerable amount of time elapses in an effort to have this requirement fulfilled. During that period of time much anti-organizing effort is put out by the employer. That is the historical fact in this country. We have a perfect example of that today, that of the Canadian banks. I will deal with that in some detail later. But we have a case in point where the employers, the Canadian banks, and in particular the local managers, the minute these managers sense that someone is organizing within a branch, the anti-union organizing forces come into effect. It is therefore very difficult to obtain 35 per cent.
In this bill we are saying that to expedite, to assist, to encourage the organizing of Canadian workers into collectives, the minimum number required to sign the cards ought to be 20 per cent. On the basis of 20 per cent of the workers in a work place signing those cards and having those cards submitted to the Canadian Labour Relations Board, a vote of certification can be called.
In this bill we go on to say that if, in the opinion of the Canadian Labour Relations Board, there are 50 per cent or more workers signed to cards, then in effect the board may waive a certification vote for the union within that work place. Furthermore, we say within the bill that there ought to be no decertification process in the Canada Labour Code. That is extremely important.
I can think offhand of three examples of precedents in the Canadian experience where no decertification vote is allowed. I go particularly to the schools administration act of Ontario and the teaching profession act of Ontario. When a teacher is certified and obtains a job, that teacher is a member of the Ontario Teachers' Federation and belongs to one of the five affiliates of the Ontario Teachers' Federation. There is no decertification process allowed in the teaching profession act
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of Ontario. Therefore teachers as a group do not have a decertification process. It is recognized that once you organize and are collective, you stay organized. If the teachers do not like who is running the outfit, they vote them out.
Another precedent in Canadian experience is the medical profession. Once you begin to practice in the province of Ontario or some other provinces in Canada, you become a member of the medical association within that province. There is no process for decertifying the Ontario Medical Association.
The same is true in the legal profession. If they do not like who is at the top, they can vote them out of office. However, they cannot abandon the professional organization.
We provide a tool within the Canada Labour Code for those who are opposed to collective action by workers. They are provided with the tool to destroy, to waste the time of the trade union and tie up the trade unions' resources, both human and financial, for lengthy processes of fighting decertification and going back in later years to certify a work place that had been decertified.
There is no doubt, in my mind, that the Canada Labour Code leaves all the loopholes for any employer or owner of a business who is determined to destroy the collective in that workplace to do that. The process is there. It is permissible. Our bill aims to speed up, encourage, and facilitate the organization of trade unions in Canada within the federal jurisdiction.
No one can say that somehow or other it is a myth that employers attempt to block the formation of a trade union. I mentioned previously the case of the banks. At the present time the banks have undertaken a program to fight the unionization of their branches within Canada.
Some time ago in committee we were dealing with Bill C-8, amendments to the Federal Labour Code. Representatives of the banks appeared before the committee. They were emphatic about their support for the organizing of workers within the banks. I quote some of their comments:
Despite our general support for the principle of the bill, namely, justice in the work place and improved working conditions, there are several clauses of the bill which we believe should be amended before the bill is passed back to the House by the Committee.
They agreed with the principle of Bill C-8. That was Mr. Macintosh, vice-president of the Canadian Bankers' Association. Later on he said:
It is our sincere belief that the objective of any amendments to the legislation should be to promote free collective bargaining and not to subsitute for it.
Later on he talked about the need for a ballot to verify the signatures of all persons purporting to be members of the applicant trade union.
Throughout the hearing the witnesses supported the principle of trade union organizing within the banks. However, when it comes to the practical application, we find there is a contradiction. What they said in committee is not practised in the work place.
Canada Labour Code
The latest example has to be a most fantastic situation at a branch of the Canadian Imperial Bank of Commerce in Gibsons, B.C. SORWUC, the Service, Office and Retail Workers Union of Canada, attempted to organize that particular branch. Mrs. Dulyk, one of the workers in the Gibsons branch, attempted to get members to sign cards so that there could be a certification vote in that branch.
The minute the manager found out that Mrs. Dulyk was trying to sign staff to cards, she was called in and offered a transfer to Vancouver. Here is a married woman with a family. Gibsons is only accessible by water from Vancouver. The management offered her a transfer to Vancouver, an offer he knew she could not accept. She could not accept it and was fired.
The union approached Mrs. Quigley, another employee in that branch. Mrs. Quigley then attempted to sign workers in that branch to cards. Again the manager found out, called in Mrs. Quigley and guess what? Right. He offered her a transfer to Vancouver. It was fairly obvious that Mrs. Quigley could not accept the position, and she too was fired. That is not an isolated incident.
The committee also had before it the Tweed branch case. In that case the manager found out the workers were signing cards to form a union. He called in the employees one by one and told them, "We are one great family here. We do not have to form unions to get anything. How can you do this to me? You are putting a knife in my back."
Everyone in that branch became extremely tense. There was fear in the minds of the workers, and the union was never organized. Because obtaining 35 per cent took considerable time, the employer was able to launch a counter-attack.
The Canada Labour Code is not for the employers. It is for the workers. The Corporations Act is for the corporations of this country. The Canada Labour Code should be a progressive document which facilitates the organizing of workers into collectives in order to improve the quality of life and the quality of environment in the work place.
To finish the story of the SORWUC incident, they took it to the Canada Labour Relations Board, accusing the employer of unfair labour practice. In the worst judgment in labour relations history that I have read, the Canada Labour Relations Board said in their finding that the union did not prove that there was an anti-union bias in the mind of the employer. How does anyone prove anti-union bias in anybody's mind? One has to judge the actions, and in the two cases in the Gibsons branch, Mr. Speaker, it was fairly obvious that the actions of the employer would by no stretch of the imagination be seen as divorced from the activities of the two workers in trying to organize the Gibsons branch of the Canadian Imperial Bank of Commerce.
That has been the sad history of union organizing in this country. I might mention, Mr. Speaker, that on Saturday a very historic event took place in my riding. At Laurentian University they honoured the man who was largely responsible

May 30, 1978
Canada Labour Code
for organizing the trade union movement in the Sudbury Basin, Mr. Robert Carlin. He was honoured on Saturday by having bestowed upon him an honorary doctor of laws degree. Mr. Carlin was the man who, in 1942, organized the workers of the Sudbury Basin in the Mine Mill Union. Mr. Speaker, our history is one of anti-union bias on the part of Inco and Falconbridge in the Sudbury Basin, the CIA participation in trying to use the red scare to paint everyone organizing workers in the Sudbury Basin as Communists or pro-Communists, and this history has pervaded the trade union movement in this country since the 1880s. There has been a concerted effort to try to prevent workers from organizing their collective strength in order to improve the quality of their lives, not only in the work place-


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


Some hon. Members:: Agreed.


John R. Rodriguez: Thank you, Mr. Speaker. I thank hon. members for their generosity, and I will not take long to complete my remarks. I recognize today the shift to the right which society is taking. I recognize that it is in times like these that governments-and this government is no exception-tend to look for bogeymen upon whom to place the blame for the problems facing society, never willing to bear responsibility for their own actions or inaction. So we find in our country a move to the right, one which has pinpointed the trade union movement as being something of a big monster. Indeed, in national polls we see the majority of Canadians expressing the thought that big labour is more dangerous to Canada's economic health than big government or big business.


An hon. Member:: Right on!


John R. Rodriguez: I see an hon. member over on the government side saying "Right on!" That is precisely the kind of example I am talking about. It paints an untrue picture of the true situation with respect to the conditions of our workers.
Do you realize, Mr. Speaker, that it was only this year that workers have had the right to refuse to work in places which are dangerous to their health and safety? A very timid step, in my opinion, and one which should have been taken a long time ago! Think of what happened up in Baie Vert. One has only to stop and think, to see just how powerful the trade union movement really is in this country. The Labour Code should be the centrepiece of trade union rights, workers' rights, and the ability of workers to facilitate their own organizations ought to be enshrined in the Canada Labour Code. That is what the bill before us sets out to do, Mr. Speaker. It is to facilitate the organizing of Canadian workers into collectives, to remove the decertification process, and to give to the CLRB the right to judge, in cases where there are 50 per cent or more signed to cards, that there ought to be no certification vote.


Mr. Raymond Dupont (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, I am pleased to participate in this debate on Bill C-223, an Act to amend the Canada Labour Code, and particularly and more specifically union certification.
On April 7 last the House of Commons passed an act amending the Labour Code and when I refer to Bill C-223 introduced by the hon. member for Nickel Belt (Mr. Rodriguez) who would like to see a union certified by 20 per cent of its membership, Mr. Speaker, let me say that we are talking about motivation and I would have liked him to say so, and the Minister of Labour (Mr. Munro) agreed earlier when he said that labour participation was clearly necessary to the proper management of the Canadian economy. However, when you talk of certification by 20 per cent of the membership, that makes you think twice.
Mr. Speaker, I would like to refer to the explanatory notes concerning clauses 127 to 129 which read as follows, and I quote:
127. (1) The Board may, in any case, for the purpose of satisfying itself as to whether employees in a unit wish to have a particular trade union represent them as their bargaining agent, order that a representation vote be taken among the employees in the unit.
(2)	Where
(a)	a trade union applies for certification as the bargaining agent for a unit in
respect of which no other trade union is the bargaining agent, and
(b)	the Board is satisfied that not less than thirty-five per cent and not more
than fifty per cent of the employees in the unit are members of the trade
union,
the Board shall order that a representation vote be taken among the employees in the unit.
(3)	Where the Board is satisfied that a trade union has an established practice of admitting persons to membership without regard to the eligibility requirements of its charter, constitution or by-laws, the Board may disregard such requirements in determining whether a person is a member of a trade union.
Clause 129 reads:
129. (1) Subject to subsection (2), the Board shall determine the result of a representation vote on the basis of the ballots cast by the majority of employees voting.
(2)	Where, on considering the result of a representation vote, the Board determines that less than thirty-five per cent of the employees who are eligible to vote have voted, the Board shall determine that the representation vote is void.
(3)	A vote by the majority of the employees voting in a representation vote is evidence that a majority of employees in the unit in respect of which the vote was ordered are of the opinion expressed in the vote of the majority of employees voting."
Mr. Speaker, I find the amendment to the Canadian Labour Code very liberal. In the bill introduced by the hon. member for Nickel Belt (Mr. Rodriguez), when a union applying for certification as the bargaining agent for a unit in respect of which no other trade union is the bargaining agent and when the Canada Labour Relations Board is satisfied that more than 50 per cent of the employees in the unit are members of
May 30, 1978

the trade union, the Board can certify the trade union as the bargaining agent without ordering a representation vote. Sections 118(1), 120.1 and 126(c) give more freedom to the Board concerning representation votes; they allow it to make temporary decisions to settle certain matters and postpone its decisions as concerns the other matters and they protect the right of the employees by providing that the computation of the number of employees must be made on the date of the application for certification. On the whole, these amendments give the Board the power to issue an order if it feels that the circumstances of the application justify it.
The amendment which would require the Canada Labour Relations Board to order a representation vote when it is convinced that at least 20 per cent and less than 50 per cent of the employees in the unit are members of the trade union seems hard to justify. First of all, it should be noted that the Board does not reject automatically the application for accreditation of a trade union which does not include at least 35 per cent of the employees in a bargaining unit. The board studies and judges each application for accreditation on its merits, and in certain cases, it has ordered a representation vote even though less than 35 per cent of the employees in the bargaining unit were members of the applying trade union. Also, CLRB representatives have pointed out that approximately 57 per cent of the certification applications submitted to the Board involve bargaining units of less than 20 members. If the percentage required for a certification vote were lowered to 20 per cent for any 20-member unit, a certification vote would be compulsory if four were members of the union, which seems a rather dubious procedure in labour relations. On this point, Mr. Speaker, I want to repeat that motivation is extremely important. When we talk about the democratic process and give as an example the certification of 20 members, how would it be possible for the Board to certify a union if four members within the same union applied? We know for sure-
The hon. member for Nickel Belt may well talk back. However, the fact is what would happen then to the active participation of the union and the workers?
Obviously, it is possible to make unionization easier, as evidenced by Bill C-8 passed by the House of Commons last April. I should like also to point out one thing to the hon. member. It is not enough, let us say, to sign a membership card to set up a union, and come what may, for the simple reason that if there is certification with no employee participation, it will be of little avail, and the employer will be able to take advantage of and abuse the same employees if a union were not effective.
So, Mr. Speaker, I should also like to mention that the report of the Woods task force on labour relations deals with certification and the percentage of employees who must belong to the union before its application is considered and a certificate granted to it. The task force recommends that an applica-
Canada Labour Code
tion for certification be turned down when the union which submits it cannot prove that it represents at least 35 per cent but less than 65 per cent of the employees.
So, Mr. Speaker, it is quite obvious from what I have said that if we want to have a participatory trade unionism, a trade unionism which stands up to the employers, the only way is to constitute a majority before applying for certification.
I wish to thank you, Mr. Speaker, for allowing me to express my views on Bill C-223. It is quite obvious that the member for Nickel Belt (Mr. Rodriguez) considers that the certification of a union makes it easier for the workers to function and join together, and I cannot disagree with the bill introduced by the member simply because of the percentage of representation at the level of the certification or of the application for certification which could be granted to them by the Board.
The hon. member for Nickel Belt (Mr. Rodriguez) had an opportunity to express his views which I understand quite well. However, I would like to express my opinion on Bill C-223 and, as I said earlier, I do not disagree with the member for Nickel Belt, but it is strictly a matter of logic when one talks about participation at the level of a union or of an employer, and of the efficiency both of the economy and the employees.


Joseph Mario Jacques Olivier: Mr. Speaker, first I should like to thank the hon. member for Nickel Belt (Mr. Rodriguez) for giving us the opportunity of discussing Bill C-223, and particularly for trying to promote a greater unionization through the amendments he is proposing. I believe that through his bill the member for Nickel Belt is about to succeed in doing what we, on this side of the House, have been trying to do for years, that is to show that our labour relations legislation is progressive in Canada, especially the latest amendments to the Canada Labour Code.
If we consider the principles contained in Bill C-223, and it might be advisable to quote the explanatory note:
"127. (1) The Board may, in any case, for the purpose of satisfying itself as to whether employees in a unit wish to have a particular trade union represent them as their bargaining agent, order that a representation vote be taken among the employees in the unit.
(2) Where
(a)	a trade union applies for certification as the bargaining agent for a unit in
respect of which no other trade union is the bargaining agent, and
(b)	the Board is satisfied that not less than thirty-five per cent and not more
than fifty per cent of the employees in the unit are members of the trade
union.
the Board shall order that a representation vote be taken among the employees in the unit.
I stop here, Mr. Speaker, then I would like to quote section 118.1 of the present act, the new Canada Labour Code.
Where the Board is required, in connection with any application made under this Part, to determine the wishes of the majority of the employees in a unit, it

May 30, 1978
Canada Labour Code
shall determine those wishes as of the date of the making of the application or as of such other date as the Board considers appropriate.
I fail to grasp the purpose of that section and I must say this in defence of the hon. member for Nickel Belt (Mr. Rodriguez) who was very active in the examination of the amendments to the Canada Labour Code. But I have the impression, Mr. Speaker, that something must have escaped him. The new Canada Labour Code significantly promotes unionization and the hon. member himself stated that earlier. Unfortunately there are many people who have not yet caught up with our times and find that the new Canada Labour code practically allows 100 per cent of people to be organized into trade unions. That is not the purpose of the Canada Labour Code. What is the purpose of the Canada Labour Code? It is to try to have orderly industrial relations because there are not strictly only unions and employers. There are not only bad employers; there can be bad unions.
You just have to look at the amendments which have been made and the hon. member for Nickel Belt is well aware of this. A year and a half ago we introduced a 14-point program to improve relations between unions and employers and to educate employees and employers so that they would stop tearing at each other. It was decided, Mr. Speaker, to create a committee where everyone would have his figures, which means data from the union and data from the employer, so that they might be compared, and that committee would help improve relations.
What has been done for the education of Canadian workers? What has been done about grants to labour bodies without any requirement on the educational program they should provide? I think the program which has been established has considerably improved the knowledge of labour issues and therefore paved the way for better and wider acceptance of unionization.
Mr. Speaker, we have just passed those amendments. There were and still are disputes. Very shortly, a large portion of the bill will be proclaimed and we were not afraid, Mr. Speaker, to deal in the Labour Code with the problem of the first collective agreement. It was decided that once and for all the problem should be solved. So what happened, Mr. Speaker? We said: when the Canada Labour Relations Board certifies a union, when a union negotiates in good faith and an employer also negotiates in good faith and it ends up with a lockout or a strike, we simply say, Mr. Speaker, that the minister may intervene to ask the Canada Labour Relations Board to appoint an arbitrator to settle the dispute. That, Mr. Speaker, increases both the strength of a union and the extent of unionization, which is the purpose of Bill C-223.
I fail to understand the philosophy behind Bill C-223 where it speaks specifically of 20 per cent of employees. Is that being militant? It is all well and good to have a union, but members must take an active part in their union.

Mr. Speaker, I spent nine years in the labour world. I was president of a union for eight years. I was treasurer of a federation representing 95,000 union members. But officers must try and help members to participate in the management of their federation.
The problem with the hon. member for Nickel Belt, Mr. Speaker, is that he thinks he speaks the whole truth and nothing but, and that everybody else is wrong.
Mr. Speaker, he is always long-winded in the House. He would like to speak day after day to say what? That is the problem.
On the other hand, if there laws are in effect, by what party were they brought before the House? Who is responsible for the structures within which central labour congresses are powerful in the country? Which party did that? It is surely not the New Democratic Party, because it has never been in power. It is a highbrow party, but the problem is that the workers must foot the bill.
Mr. Speaker, it is easy for the hon. member for Nickel Belt (Mr. Rodriguez) to try to blast the amendments which constitute, and rightly so, a renewal in union circles nowadays.
Mr. Speaker, I heard a while ago the hon. member for Nickel Belt tell us that a right-wing wind was blowing among the unions. Well, I fail to understand that. Either he has not stepped out of the House of Commons for a long long time or he has not taken part for ages in a union meeting. He will realize that unions are not going to take it lying down, that they are much more active than they used to be and that they are far from encouraging a shift towards the right.
The hon. member for Nickel Belt is telling us that our trade unions are too far to the right but I suggest he is insulting them. I think that the hon. member for Nickel Belt does not like to be told the truth. He does not like to be told what to do on subjects he deals with or interprets in his own way. As usual!
Mr. Speaker, trade unions in Canada have no lesson to take from the hon. member for Nickel Belt on how to manage their unions. If he finds they lean too much to the right, he could tell them so but I have the impression that the president of the CLC will tell him to mind his own business. I suspect that the president of the CNTU would tell him also to mind his own business.
I find that really amusing. He speaks to us of unionism and does not seem to know anything at all about it. Had he attended a union meeting, he would have learned something about it, at least at the meetings of the Confederation of National Trade Unions. I was reading again articles in La Presse which made front page headlines after a major conflict where, on the contrary, unions were called groups of communists. I cannot understand what is going on. Either the hon. member for Nickel Belt has a hard time understanding the situation, or else he does not want to understand.
May 30, 1978

On the other hand, Mr. Speaker, the purpose, the aim of his bill, Bill C-223, we understood way before he did through all the changes made in the Canadian Labour Code. A while ago he was telling us again that as far as we are concerned, job security and health hazards on the job are not important. Mr. Speaker, I think he did not really read the new legislation. I do not understand how such a brilliant member can venture to say such things.
Mr. Speaker, I would like to quote a study mentioned by my colleague, the Parliamentary Secretary to the Minister of Employment and Immigration (Mr. Dupont), who told us about the Woods task Force on the problems and the percentage of trade unionism, which bears a direct relationship to Bill C-223. Mr. Speaker, I will read some of the recommendations made in the Woods report:
(1) Unless a union can demonstrate at least 35 per cent membership, its application for certification should not be entertained.
These people have studied it well.
Where a union can demonstrate 65 per cent membership, it should be entitled to a certificate without a representation vote.
Where a union can show at least 35 per cent membership but less than 65 per cent membership, it should be entitled to a representation vote.
The hon. member wants to reduce that to 20 per cent. They took the time to consider things, Mr. Speaker, they took the time to diagnose the problem. He selected some figure at random, it could have been 15, or 12, or 10 per cent, or 25 per cent for that matter, I wonder. Unfortunately, he picked up 20 per cent. And although I try hard to read through his explanations, this is not consistent at all with his views.
Certainly I share his view on greater unionization, but I do not agree that where one individual wishes to have an union out of 20 working in a shop, everyone should have to join. 1 still believe in democracy. There will be the kind of employer tactics he referred to, and he is right as far as certain aspects are concerned, when he indicates there are employers wilfully preventing workers from joining a union, arbitrarily using legislation that may be improperly drafted. But this has just been amended, although there are continuous law suits to block further unionization. We should not generalize however.
I have known hundreds of unions, 99 per cent of which are excellent. There could have been the odd one less perfect than others, but this is by no means suggesting the whole group is bad. What 1 cannot understand is the hon. member for Nickel Belt's (Mr. Rodriguez) rationale.
And coming back to the definition given by Woods, the Woods group, to refute the points made by the hon. member for Nickel Belt:
Where at least 50 per cent of the employees voting, as distinct from 50 per cent of employees eligible to vote, vote in favour of the union, it should be entitled to a certificate; we considered recomending a minimum percentage of the work force that must cast ballots before the election would be considered valid, but decided against it on the ground that it runs contrary to normal electoral practice and would constitute an invasion of the free franchise inas-
Canada Labour Code
much as it would operate to the advantage of the employer or a rival union to discourage employees from entering the polling booth.
I believe that those arguments are valid, Mr. Speaker, and that we should take the time to study them. Consider now the fifth recommendation of the Woods task force:
A representation vote be conducted by the Canada Labour Relations Board at the place or places of employment.
Where there is no employment situs, Mr. Speaker, or if the vote is by mail, there is no problem. This has been checked so those provisions help. And I continue to quote:
There be provision for taking a pre-hearing ballot of employees at the request of the applicant to determine the wishes of the employees close to the time of application for certification should the results of a representation vote become relevant as the application is processed.
As I said earlier, Mr. Speaker, I refer to section 118.1 dealing with that problem in the amendments that have been made.
The Canada Labour Relations Board have power to determine whether a ballot should be taken with a show of less than 35 per cent support, and whether a union should be certified without the required demonstration of support by ballot on a consideration of the impact of any employer unfair labour practice.
Where a union can show over 65 per cent membership but there is evidence that the membership was obtained by misrepresentation or there is evidence of misrepresentation in the records, such as to cast doubt on the union's degree of support, the board should have discretion to order a vote or to deny a certificate.
Mr. Speaker, for many years the party I represent has tried to improve labour relations and to establish a Canadian Labour Code more adequate and more relevant to the present situation. What was the result of the latest amendments? Very simple. Earlier I heard the hon. member speak against the Bankers' Association. That is his right. However he knows that with the new provisions in the code, his arguments no longer stand. I always have the impression that he and I do not read the same thing. He is entitled to his own interpretation, but I still hope he will be able to look into this.
Mr. Speaker, even though Bill C-223 essentially aims at wider unionization I must say that it does not go far enough. We have a code which goes even further. Why change it? Why restrict the problem? I can hardly understand the hon. member for Nickel Belt (Mr. Rodriguez). We have succeeded in greatly improving labour relations this year, a 150 per cent improvement compared with the situation which prevailed last year as regards strikes and lockouts. What is the reason for that? As I said earlier, it is because the government took its responsibilities when it set up a 14-point program a year and a half ago. But it seems that my colleague opposite is not aware of these things.
The problem with opposition members is that all government actions are bad from the start. I do not want to have to give a definition of the conception the opposition members have on that matter, but I presume that from time to time we must certainly do a few things that make sense. 1 suppose that all those changes that have been made-

May 30, 1978
Canada Labour Code


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


Maurice Dupras: Mr. Speaker, I was hoping that my two colleagues, the Parliamentary Secretary to the Minister of Labour (Mr. Olivier) and the Parliamentary Secretary to the Minister of Employment and Immigration (Mr. Dupont) would leave me enough time to express my views about Bill C-223 in the name of our colleague the hon. member for Nickel Belt (Mr. Rodriguez). But first I would like to congratulate my two colleagues for the expertise they have shown in explaining to the House the loopholes of this bill, even its vices, shall we say, since this bill does not respond to the needs which have been really identified by the unions themselves. I trust the sound judgment of my two colleagues, in view of the great number of years they have given to trade unionism in the province of Quebec, of the role they have played in these unions and of their repeated contribution to get the government to improve the life of our workers throughout the country. I have had the privilege to witness their activities and to see the way they brought pressure to bear on the government, as is shown by the measures which my colleague the Parliamentary Secretary to the Minister of Labour mentioned and by the 14 points on which the government agreed to better the life of workers. I think, Mr. Speaker, that these measures are positive and valuable and that they will contribute to improve the future of workers.
But I cannot understand how Bill C-223 might improve the life of those who are already unionized. If we have only 35 or 40 per cent of workers holding a union card compared to-I hope, Mr. Speaker, that the member for Nickel Belt is going to let me finish-compared to the workers in Denmark, France, Germany, Austria and in other countries which he mentioned, there might be some reasons for that. It may be that trade unionism in those countries is not cut off from authority but rather that unions work with the established powers, without being militant to the extent of seeking to break the system and create fear and apprehension among employers. And this negative trade unionism, which unfortunately is a little too common in our country, may contribute to keep away the investments that are so much needed, especially in the province of Quebec. I cannot see, Mr. Speaker, how such a measure could help create jobs.


The Acting Speaker (Mr. Turner):: Order. It being six o'clock, the hour provided for the consideration of private members' business has now expired. I do now leave the chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Chretien that Bill C-56, to amend the statute law relating to income tax and to authorize payments related to provincial sales tax reductions, be read the second time and referred to the committee of the whole, and the amendment of Mr. Broadbent (p. 5548).
Mr. Bob Kaplan (York Centre):: Mr. Speaker, I want to be very brief and make a few remarks about one of the issues which is constantly raised in connection with the Income Tax Act and with budgets when they come up, namely, the allegation largely made by the business community, and small business in particular, that there are not enough incentives provided in the Canadian system to encourage business and investment. I want to make the point, giving some very specific examples, that there are indeed a tremendous number of very warm and very attractive incentives in our income tax system which at least compare with the incentives in the American system.
Before I come to them, it is worth making the point, because it is sometimes overlooked, that the purpose of the tax system is to raise revenue for public purposes. When it comes to raising tax revenue, it has to be borne in mind by everybody that the only place where we can raise taxes in this society is from those people and corporations that have the means. It should not be surprising that taxes are levied on those with means. One of the things we can take particular pride in in this country, and that I believe all Canadians do, is that we have a progressive system of income tax; that is, the higher your income is, the more taxes you pay.
The Income Tax Act contains a schedule with rates in it. Those rates can be somewhat misleading because they do not take into account the various deductions, exemptions and tax credits that are available. A recent analysis done on the subject by the Canadian Tax Foundation showed that even taking into consideration all those various benefits-the exemptions, deductions and credits-the Canadian tax system is still a progressive one. I sometimes think when we are being urged to consider a greater variety of so-called incentives that those who put forward the various proposals are tending to forget the importance in a democratic society of maintaining the "progressivity" of the income tax system.
May 30, 1978

I do not think we can ask the Canadian people to put up with a system that is not a progressive one, to put up with the system in which those who are very well to do and those who have very large incomes are able, because of devices in the act not available to the person of ordinary means, to reduce their incomes unduly. We want to encourage saving. We want to encourage risk taking, encourage people to build up businesses and to develop a stake in Canadian society, but at the same time to maintain as a fundamental principle a progressive tax system, one in which the more you earn the more taxes you will pay.
Having said that, I would like now to look over a few very specific incentives. I am not going to touch on the ones that have been announced in the last few days in the House that directly affect small business-the exemption of small manufacturing enterprises from the federal sales tax, the right to pass through without taxation the capital gain on a small family business, an incentive that matches the incentive that has existed for family farms being passed on from one generation to another. I am not going to refer to the proposals to encourage the formation of venture capital by further incentives. These will be brought forward and there will be legislation in due course, and we can take a look at them then.
I would like to talk about some of the existing incentives which are presently in the Income Tax Act. The first one I would like to look at is the general small business tax rate. I wonder if it is adequately recognized that the small businessman earning the same income as, for example, a doctor or a lawyer pays substantially less tax on it. This is also the case when comparing the small businessman to the working person who works for a firm and draws a salary. Small business, on the first $150,000 a year of income for a number of years up to a maximum of $750,000 in earnings, pays an income tax rate of about 25 per cent. I say "about" because the rate can vary from province to province, but it is approximately 25 per cent on the first $ 150,000 of income. That is half the rate that large businesses with over $150,000 of income pay on their income tax.
I should note that in the United States the benefit of a rate of about 25 per cent applies only to the first $50,000 of income. In Canada, therefore, small business gets three times the break on a tax rate of their United States counterpart.
If a business is incorporated it has the benefit of the 50 per cent tax credit in paying through the dividends to stockholders. I did a calculation out of the income tax rates grossing up a dividend. It looks to me as if a doctor earning $30,000 will actually pay $5,000 more in income tax than a small businessman who takes full advantage of earnings in his corporation and passes through to himself through the tax credit with the grossing up of the dividend. That $5,000 difference, which is an extra incentive in small business, is not very often discussed in this country. I think it is time that the availability of that tax incentive to small business was acknowledged.
Income Tax Act
I noted another incentive which has nothing to do with small business but rather with very big business. It is a particular incentive to encourage the development of northern energy resources. A prospectus was issued recently by Dome Petroleum to raise $62 million for exploration work in the Beaufort Sea. The only fair way of characterizing the extremely generous incentive provided in that proposal is that it represents a transfer of funds from the public sector to the private sector.
Depending on a person's income and the province he lives in, it is possible for someone in the right tax situation, in the right province, to make that investment not only without having to put up any money of his own, but to come out ahead.
The incentive provided is very generous. For example, if an individual in Newfoundland buys a $10,400 participation, which is a mixture of common and preferred shares, in this project, that money can be deducted from his income tax in the year of investment. It is entirely paid for by a transfer of taxes that he would have paid to the federal and provincial governments to the Dome Petroleum Company, in return for which he gets the shares. Not only does the tax pay 100 per cent of his investment, but by making the $10,400 investment he actually has his taxes reduced by more than $10,400. The individual in Newfoundland can make that $10,400 investment and end up with his tax being reduced by $924 more than the $10,400 he needs to make that investment. That is the benefit and the result of the very generous exploration allowances provided in the Income Tax Act.
In Prince Edward Island, in addition to getting all of the investment made out of taxes, you get a refund of $350. In Nova Scotia the refund is $525, in New Brunswick $625. Ironically, in Alberta it costs the investor something to make that $10,400 investment. It is not entirely paid by taxes but still it costs only $474. Saskatchewan is similar to Newfoundland; by buying one of these Dome Petroleum participation units your income tax is reduced by the amount of the investment plus an additional $945.
I will conclude, Mr. Speaker, with one other reference to the impact of the tax credit which is available on inter-corporate payment of dividends. I have noted in the banking community a growing trend to establish relationships with customers in such a way that in cases of very large borrowings they can take advantage of the tax-free nature of an intercompany dividend. Instead of collecting interest from the company to whom they would otherwise be lending the money, they invest the money in term or preferred shares or some other form of security so that the payment they receive gets enormously favoured income tax treatment. Several companies in my riding have been able to take advantage of this.
When people talk about our income tax system and allege that there are not enough incentives, I think it ought to be borne in mind that when one compares our situation with the situation in the United States, one finds that we have very generous incentives which in many cases exceed those available in the United States.

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I am not saying that small business should not constantly be making its case to government. We depend on the private sector basically for job creation and economic growth. I cannot accept at face value, however, the criticism that is constantly being made of government that incentive has been taken away or that there are not enough incentives in Canadian society for small business.


David Orlikow: Mr. Speaker, let me begin by saying a few words about the tax agreement with which one of Canada's largest provinces did not agree. It is a failure but I am not going to go into great detail on that. Members of this House know that every member of the Quebec National Assembly representing every spectrum of political opinion in that province-the Parti Quebecois, the Union Nationale, the Liberal party of the official opposition and the Social Credit member-opposed the deal imposed on the people of Quebec by this government.
We have heard it said by the Minister of Finance (Mr. Chretien) and the Prime Minister (Mr. Trudeau) that they gave the people of Quebec the same tax concessions that were accepted by all the other provinces. Nothing could be further from the truth, Mr. Speaker, for two reasons.
First of all, in the other eight provinces, for the six-month period for which the sales tax reduction will be in effect-of course, Alberta has no sales tax-the people will benefit to the extent to which they purchase goods on which there is sales tax. In the province of Quebec, where the sales tax has not been reduced, the bulk of income tax payers will get a tax rebate but people who do not pay income tax will receive no benefit at all from the proposal made by the federal government. I would remind hon. members it is precisely those people who need any kind of tax concession, any kind of rebate, any kind of break, the most-people who have so little income that they pay no tax at all. It is precisely these people who will not benefit from the deal being imposed on the province of Quebec.
The Prime Minister and the Minister of Finance have said that it works out in the same way. The people in the other eight provinces are getting the same amount of money in the form of a reduction in the sales tax. That may be technically true, Mr. Speaker. I suggest, however, that if the people of the other provinces had been offered a choice-because that is what people of Quebec have had; they have had one of two choices foisted upon them-in many cases they would have chosen to have a tax rebate rather than what they are getting. I say that the proposal made by the Minister of Finance is an unfair one, one which was made only for the political advantage of the federal government.
I want to spend most of my time discussing the economic situation this country is in and the lack of effect which these income tax changes will have on the sorry plight of this country. For the first time ever we now have more than one million unemployed. The last figures we have for the month of April, released by Statistics Canada, indicate that there were

999,000 people unemployed. That is 85,000 more than were unemployed in the same month of 1977. The rate of unemployment on an unadjusted basis is 9.3 per cent. That is not only the highest number ever unemployed, it is the highest percentage of the labour force which has been unemployed since before World War II.
That unemployment is prevalent right across the country. It is, of course, as usual in this country of ours, heaviest in numbers and percentage in the Atlantic provinces. The percentage in Newfoundland is almost 20 per cent. In New Brunswick it is over 16 per cent. In Nova Scotia it is over 12 per cent and almost 12 per cent in Quebec.
Those are the official figures. Those of us who have given any thought to the situation know that there are probably another 400,000 to 500,000 unemployed who are not counted because they are not actively looking for work. If a person lives in Cape Breton Islands, or some parts of Newfoundland or in some parts of eastern Quebec and does not have a job, he or she knows that there is virtually no use looking for work because there is simply no work to be found.
For the first time since World War II the unemployed are not just people who are poorly educated, who have not finished high school, or who have not gone to university or community colleges. They include substantial numbers of our young people who are unable to find work. These people include the best educated and best trained, the most expensively trained this country has ever had. It does not matter whether they are teachers, social workers or civil engineers, there is no work for them in this country.
Many people who got their training and did what they were urged to do by the Economic Council, the Conference Board and provincial and federal governments as well as the universities did so at great expense and after many years of study. These people took training in fields not only that they liked but in fields which governments told them there would be interesting work at relatively reasonable pay. They now find there is no work at all. I am told, for example, in my province that 50 of the graduate students in education last year have been unable to find teaching jobs. This year's class sees nothing but disaster ahead for them. And yet, what does the government, say? Here is what the Minister of Finance said in April as quoted in the Winnipeg Tribune:
Finance Minister Jean Chreien said Tuesday the economy cannot provide jobs for all those who want work.
"We're doing the best that we can do,'' he told opposition MPs-
I am here to tell him that the best he can do simply is not good enough.
My province and my city has a relatively low rate of unemployment. We do not have the booms that they have in some parts of Canada and that they have had on occasion in Toronto and Vancouver. We do not have the severe busts which they have experienced either. But, Mr. Speaker, the prospects in Winnipeg and Manitoba are indeed very dim. The prospects in my province, to put it mildly, have not been improved by a provincial Progressive Conservative government which believes that now is the time for governments to show
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restraint, that the best government is the government that does the least. So we find that summer job opportunities which the provincial government offers to students who are between study years in universities, community colleges and high schools, have been cut by 37 per cent.
We find as well that the hospitals have been told that they will have to manage in the coming year with a mere 2.9 per cent more money than they had in the last fiscal year. This means they will have a cut of about 6 per cent to 8 per cent in real dollars. They are doing the only thing they can do given the circumstances; they are either laying people off or they are not replacing people who retire. Hospital estimates indicate that by the end of the year there will be 1,000 fewer people working in the Winnipeg hospitals than worked up to this year.
We also have the situation that, up to the end of last month, according to an executive vice-president of the Winnipeg Construction Association in Manitoba, 49.8 per cent of the building trade workers in Manitoba were unemployed. The Association adds a note which says this number does not include many design professionals laid off or transferred out of the province, such as estimators, foremen, supervisors, office staff, or tradesmen including those in woodwork, tile and terrazzo, glass and glazing and acoustic tile workers. That is the situation in which we find ourselves.
Some people, including editorial writers, and some people in this House who should know better, like the Minister of Employment and Immigration (Mr. Cullen), who have on occasion lectured those less fortunate than themselves by trying to suggest the unemployment situation in this country is not really as bad as the figures indicate. What does the minister say? "It is not the primary earner who is unemployed". I wonder in what cocoon the Minister of Employment and Immigration has been living? Where has he been hiding? Does he not know that these days there are tens of thousands, particularly young people and newly married couples, who have learned to live in our consumer society in a relatively comfortable way? They have been influenced by the barrage of ads which appear daily, hourly, in fact almost every minute over television and radio and in the voluminous pages of our newspapers. Canadians are constantly being told to own their own homes, have two cars, own a summer home or take a vacation in Vancouver, England, Mexico or Hawaii. For people to own their own home, especially young people, it is almost essential that there be two wage earners in the family. However, we find that many of our best educated young people simply cannot find work.
On occasion, our new graduates have been told by the Prime Minister that if they are not happy being unemployed in Canada, they should go to another country. Which countries will accept them when they have their own problems with unemployment?
Every day that we have one million unemployed we lose one million man-days of productive work. Every three and a half days we lose more production through unemployment than we
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lost through all strikes in Canada last year. I do not see many newspaper editorials criticizing the government, the state, business or anyone else about the tremendous losses which occur to this country because of unemployment. However, let a group of workers go on strike for more than a few days and virtually every daily newspaper in this country will publish editorials condemning the strikers, pointing out the damage they create for our country when they are on strike.
Let me go back to the question of who are the unemployed and how serious it is when they are not the primary earners. The vast majority of the unemployed are not teenagers. They are adults. Of the one million unemployed, almost 800,000 are 20 years of age and older. The majority of these adults are men, about 464,000. More than half of them are married.
Compare the more than one million unemployed to the less than 50,000 job vacancies in this country and it will be clearly seen that the problem is serious. If every job vacancy were filled tomorrow, we would still have more than 900,000 people unemployed. The argument that our supposedly overly generous unemployment insurance has persuaded people not to look for work simply does not add up. As I indicated, even if every job vacancy were filled, we would still have more than 90 per cent of the unemployed looking for work.
The burden of unemployment is felt most by those who are unemployed. However, we all suffer as a result of unemployment. Dian Cohen, who writes a column which appears once a week in many Canadian newspapers, estimated that if the government had kept unemployment, not at 4 per cent unemployment which the Economic Council considered as full employment, but at 5 per cent instead of the average 8 per cent which we had in 1976, tax revenues would have increased by $4'/2 billion. Unemployment insurance benefits for 1976 would have cost $1 billion less than they did.
A Toronto economic consultant, Arthur Donner, who writes a column for the Toronto Globe and Mail, using a 4.5 per cent rate for 1974 to 1976 calculated that this country lost in production from unemployment $25 billion and 600,000 man-years of employment.
The Minister of Finance and the government have told us that the government really cannot do anything more than it is doing about unemployment because we have to wrestle inflation to the ground. Every year since 1975 we have been told that we were succeeding. We were told that in the first year of controls inflation would be at 8 per cent, the next year at 6 per cent and this year at 4 per cent. The government was lucky. The first year of the anti-inflation program, inflation was down to just over 6 per cent. What do we find now? As many of us predicted, both inside and outside this parliament, anything which the anti-inflation program could do to control prices would be of a very temporary nature.
According to calculations made at the time the program was implemented, the cost of living was only supposed to rise this year by 4 per cent. According to the Minister of Finance, as late as March this year we were only to have an increase of 6 per cent in the cost of living. According to figures released on

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May 16 of this year, the increase for the 12 months from April 1977 to March 1978 was 8.4 per cent.
This is not surprising to anyone who has the not so pleasant task of doing the family shopping for food. In the last year the cost of food increased by 14.7 per cent. Beef increased by 44.3 per cent. The cost of housing increased 7.7 per cent and fuel and utilities by 12.5 per cent.
Even the Minister of Finance has stopped predicting that the cost of living will only increase by 6 per cent this year. He knows that in April food prices jumped by 2.6 per cent in that one month. He knows that as part of government policy we will have another increase of $1 a barrel in the price of oil on July 1 and a further increase of $1 a barrel on January 1, 1979. Those two increases alone will mean an increase of between 2 per cent and 2Vi per cent in the cost of living.
In my own city we have been fortunate to have had provincial and municipal governments which tried very hard to keep down the cost of urban transit. Until recently, a bus ticket cost 25 cents. This has been increased by 40 per cent and the cost is now 35 cents per ticket. This is a very sharp increase for those who use the bus, but it is one small illustration of what is happening to the cost of living.
The policies of this government have had the dubious distinction of giving us one of the highest, if not the highest, rates of unemployment and rates of inflation in any of the industrialized countries in the western world. But the minister tells us he expects the economy to improve. I recall his replying to a question during the question period to the effect that he expects a 5 per cent increase in the gross national product this year. The minister has put forth arguments which have not been accepted to my knowledge by a single economic analyst in this country. All of them-the Economic Council, the Conference Board, the C.D. Howe Institute, the University of Toronto Institute-are predicting increases between 3 and 3.5 per cent. Don McGillivray, who has been pretty accurate in his analyses and predictions, had this to say in the Montreal Gazette yesterday:
The real domestic product (RDP) is a pretty good measure of how the economy is growing ... It dropped a smidgeon in March, instead of rising, And on the average, in the first three months, it was only up by six-tenths of one percentage point as compared with the previous six months. If that is the pattern of the year, growth will be a little slower in 1978 than it was in 1977. The economy will only show half as much growth as the federal government had been predicting.
The writer then goes on to look at an aspect of the economy in which the government has been taking a great deal of pleasure, that is, trade. He said:
Canada managed to export about $1.4 billion more in goods than it imported. But April's trade news, just released, is not so good. Exports rose by about 10 per cent but imports surged by nearly 30 per cent so the trade surplus was the poorest in five months.
That is the situation. Unemployment is up. The cost of living is rising very quickly. The government's anti-inflation program which limited wage and salary increases means that for most Canadians the increases they will get in 1978 will not permit them to live as well as they did in 1977. In this

situation, what we need is not phony, cosmetic tinkering with the tax structure, not a $100 cut in income tax such as we saw in January or February, not a six months' reduction of 3 per cent in the sales tax, but a sharp stimulus to benefit people in the low and middle income brackets. What we are getting are more tax gimmicks affecting people who are already doing quite well; more encouragement to people in the private sector to go into housing, to invest money in building and so on; more encouragement to industry in the form of accelerated depreciation allowances and tax write-offs for scientific research, which most of them do not use anyway because the multinationals find it more advantageous to pull their research efforts back to the head office, which is usually in the United States.
More has been given to corporations which have already done very well. Corporation taxes which have not been paid because the money was put into reserve now total in the neighbourhood of $9 billion. This, really, is a form of interest-free loan. Yet according to Statistics Canada there were more than 300 people in this country in 1976 with incomes of $50,000 or more who paid no income tax at all, and this at a time when the government says it cannot afford to cut income tax, or to put more money into job creation, or to finance the building of more than about 30,000 homes for use by people who cannot afford to buy or rent homes and pay commercial rates.
I say, as has been said by many including the Financial Times, that the budget and the tax resolution we are now being asked to vote have been a failure and will be a failure. They will not meet the requirements of the country, will not change the rate of unemployment, which is likely to get worse, and will not substantially change the rate of inflation we are experiencing.
So what the people have to look forward to is more unemployment and more inflation created largely by a government which has lost its will, a government which never had an understanding of the nature of the problems facing us or of the steps required to change direction and begin reducing the number of the unemployed and halting the rapid escalation in the cost of living. For these reasons I intend to vote against this budget resolution and continue to call on the government to take measures which are capable of meeting the problems before us in the form of unemployment and inflation, measures which it has so far declined to take.


Charles Joseph Clark: Mr. Speaker, my participation in the debate tonight will be brief. I rise not simply to support the amendment of the hon. member for Oshawa-Whitby (Mr. Broadbent) but to urge the government to support the amendment, and to do so very quickly in order that parliament can get on with the other urgent business which needs to be dealt with and the government can proceed with the changes it now knows it will be forced to make in Bill C-56 before it will be accepted by its own caucus, by the House and by the province of Quebec.
The situation is simple. The Minister of Finance (Mr. Chretien) made a very serious mistake in proposing a budget measure which required the agreement of the provinces with-
May 30, 1978

out having that agreement. That was a particularly foolish error since the one province that did not agree was the one that the Minister of Finance knew was looking for every available opportunity to embarrass the federal government and to undermine the cause of federalism.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: What happened here is that the Minister of Finance led with his chin, and the province of Quebec hit him. Then, having been caught in a trap, a trap that any normally observant minister would have foreseen and avoided, this government was too proud to admit that it had made a mistake. Instead, it acted in a way which violates the spirit of the constitution of Canada, violates the nature of the federal system, and violates the principle of equal treatment for all provinces.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: This bill provides a special deal for Quebec, a deal which Quebec does not want and which the other provinces were not offered. The Prime Minister (Mr. Trudeau) pretends he is treating everybody equally, but the truth is that he intends to send a cheque to every taxpayer in Quebec and not send a cheque to taxpayers in other provinces.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: If you, Mr. Speaker, are a taxpayer who lives in Quebec, you get a cheque; if you live in Ontario or British Columbia, you do not. That is not equal treatment. The offer made to nine provinces was confined to the sales tax. The offer made to Quebec in this bill deals with the sales tax and an income tax rebate. That is unjust to other provinces, particularly to Alberta whose citizens are not eligible for a sales tax cut but are eligible for an income tax rebate. No matter how the government may twist and turn, the fact is that it has introduced a double standard into the relations of the provinces with the central government.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Just as this bill is inequitable to provinces, so is it inequitable to people. It penalizes the poor in Quebec, sending a cheque to those Quebecers rich enough to pay income tax but denying to low income Quebecers the full benefit extended to lower income residents of eight other provinces.
Finally, this bill violates the spirit of federalism by denying a province the right to decide what the province will do with its own power. Ontario was not denied that right; Ontario agreed to a certain proposition and British Columbia agreed to that proposition. So, reluctantly, did Manitoba and other provinces. But there is no way to mask the fact that Quebec did not agree, and everything that Ottawa has done since budget night has been designed to force Quebec to use its taxing power in a way it does not want to and did not agree to.
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Mr. Speaker, the government could not care less about provincial jurisdictions. It will not accept that the provinces should fight tooth and nail for what belongs to them. It would have them fill the role of mere administrative agencies of the federal government, entrusted at the most with the care of applying unilateral decisions coming from Ottawa. It refuses to recognize in the provinces legitimate partners, sovereign in their own jurisdictions, and given the mandate, just like the federal government, of implementing authentic federalism.
For us in the Progressive Conservative Party, what moved us to support Quebec in the sales tax conflict is our historic concept of the nature of Canadian federalism, our traditional respect for provincial jurisdictions, and finally, a feeling of equity towards the thousands of workers in the industrial sectors of Quebec most severely affected by the slump in the sales of their products.

That measure is not directed against Quebec. It is directed instead against the idea of a federal state. If the central government today can ignore Quebec's right concerning sales tax, then what is to stop them tomorrow from using federal funds to dictate how urban communities should be developed in Ontario, despite Ontario's clear jurisdiction over that matter? What is to stop them from using federal tax dollars to dictate the kind of industrial development in Atlantic Canada, despite the constitutional right of those provinces to set those priorities themselves? What is to stop them from using federal taxing power-as they did four years ago-to dictate the pace and emphasis of resource development in British Columbia, Alberta, Saskatchewan or Manitoba, despite the jurisdiction of the provinces over those resources?
The Minister of Finance claims he has made a major breakthrough in getting federal-provincial agreement on federal policies in the budget. That is not the way the other partners see it. The four western premiers were so enraged at the way they were treated that they took the unprecedented step of issuing a unanimous communique of condemnation.
The Atlantic provinces were told about it on the telephone. As my colleague the hon. member for Kingston and the Islands (Miss MacDonald) recounted to the House, the so-called consultation with the provinces was so casual and incomplete that the Manitoba minister of finance did not know until he had begun his own budget speech just what the details of the federal proposition were.
But that speaks only of the federal government's lack of courtesy and lack of competence. The provinces have become accustomed to that. What is extraordinary about this bill is the federal government's lack of respect for the constitution. If that can happen to Quebec today, then it can happen to British Columbia tomorrow, and it can destroy the trust which is the basis of our survival as a nation.
That is why we oppose the sales tax portions of this bill, and I say to the government now that we will use every legitimate means at our disposal to stop this stubborn government from

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taking an action which breaks the trust which is the basis of this country.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The government knows that this defence of the constitution is not limited to the House, and indeed not limited to this side of the House. The Government's proposal has been unanimously rejected by the National Assembly of Quebec. It is opposed by members with a sense of conscience in the government's own caucus-and this debate will last long enough for this House of Commons to hear from the hon. member for Maisonneuve-Rosemont (Mr. Joyal), from the hon. member for Matane (Mr. De Bane), from the hon. member for Compton (Mr. Tessier) and from other hon. members on the Liberal side who know that they cannot in conscience support an invasion of provincial jurisdiction. We will assure them that so long as the rules of the House of Commons allow, we will provide a debate long enough to allow them the chance to stand up and speak in defence of provincial rights.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The other thing that this government knows which causes government members maximum discomfort now is that before very long they will have to back down on this bill. The question is: how much of the time of the House of Commons does the government intend to waste debating a bill it intends to change before it backs down?


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I repeat, Mr. Speaker.

This bill will not disappear as if by magic. The rights of the provinces have been flouted by the government, and we will see to it that the situation is remedied. Consequently, I advise the government formally of our intention of using all means at our disposal to force it to reverse its position and respect the fundamental rights of the provinces.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: 1 suspect that the government already has begun to prepare its retreat and is looking for ways to amend this bill. I hope it is. If the government does not change the bill, then we will introduce amendments to remove the rebate proposal and to respect the right of the province to use the jurisdiction of the province as it chooses. That amendment will come when we are at committee of the whole stage in two, three or four weeks' time.
I suggest that the government not cause that long delay. There is other urgent business before the House of Commons. The Deputy Prime Minister and President of Privy Council (Mr. MacEachen) the other day read off a list of matters

which he considers urgent. The amendment now before the House of Commons, the amendment of the hon. member for Oshawa-Whitby, gives the government the opportunity to buy the time it needs to amend the bill, and at the same time to let the House of Commons get on with other urgent business. If this government has its changes ready before a month has passed, I am sure that there will be unanimous agreement in this House to bring the changed bill back early. The ball is very much in the hands and in the court of the government side. If the government acts now and takes the opportunity to take this bill back for consideration, back for the amendment its own members want to see, the government can save the time of the House of Commons and perhaps help to save the future of the country. Thus the choice is with the government. I hope we might have the vote on the amendment very soon.


The Acting Speaker (Mr. Turner):: Is the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Turner):: The question is on the amendment (Mr. Broadbent) to the main motion. Is it the pleasure of the House to adopt the amendment?


Some hon. members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Turner):: All those in favour will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Turner):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Turner):: In my opinion, the yeas have it.
And more than five members having risen:


The Acting Speaker (Mr. Turner):: Call in the members.


Mr. Speaker:: I declare the amendment lost.
It being ten o'clock it is my duty, pursuant to Standing Order 40, to put a motion for the adjournment. The questions to be raised are three in number; the Chair will call upon the hon. member for Ottawa West (Mr. Francis), the hon. member for Pembina (Mr. Elzinga) and the hon. member for High Park-Humber Valley (Mr. Jelinek).
Adjournment Debate



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Lloyd Francis (Ottawa West):: Mr. Speaker, there have been a number of measures which have caused concern to public servants in Canada recently. I want to refer to the latest, the matter which was raised by my good friend on the other side of the House, the hon. member for Hamilton West (Mr. Alexander), concerning a study which allegedly showed that 16 per cent of public servants in a sample of some 2,000 in the Ottawa-Hull area were overclassified and that 4 per cent were underclassified.
This study has been projected by some people and in the press to suggest that nationally a massive program of red-circling is about to be undertaken. Mr. Speaker, the country will be ill-served if the public service is subject to consistent attacks which are not soundly based and whose purpose is misconstrued in many circles. I want to make it abundantly clear that no one is objecting to measures to improve efficiency in the public service, least of all public servants themselves. But in the case of this particular study I want to call attention to some of the considerations which will have to be borne in mind before any deductions are drawn concerning the public service as a whole.
I asked the President of the Treasury Board (Mr. Andras) whether these findings were based on internal data or whether they were based upon outside comparisons. The answer was that the data considered was basically internal. Mr. Speaker, there are more than 300,000 people in the public service. The suggestion that all these positions can be measured with scientific accuracy in a framework of job classification to produce such fine results is one which defies logical analysis. There is no way in which the public service can be run by the yardstick of purely internal consistency. Think, for example, of the difficulty attached to the hiring of medical doctors. In order to meet the salaries which such people command in outside employment the public service has to be competitive. The system is as internally consistent as possible but must of necessity reflect market realities.
I note that this study was conducted in the national capital region. Within that region there are only slightly over one quarter of all the public service positions in Canada. But over 40 per cent of the higher classifications in the various categories are to be found in this area, as was noted by Frank Howard in the Ottawa Citizen the other day. As one looks higher up the executive ladder, something like 60 per cent of the higher positions are found in the national capital region; the closer one is to the boss, the easier it is to get to the highest grades, perhaps. But if this sample was based upon the higher

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Adjournment Debate
positions in the public service in the national capital region then it is most unreliable as a basis of projection to the nation as a whole and the 75 per cent of public servant who are to be found outside Ottawa.
I know that in testimony before the Standing Committee on Miscellaneous Estimates officials of Treasury Board told us a little more about the staff who were doing this job. There are five in full-time positions engaged in job classification and the audit. There are perhaps 30 part-time employees involved- this to deal with 300,000 people in the public service. When I asked the President of Treasury Board what his intentions were, he said he would conduct more studies and I was pleased to hear him say he would enter into discussion with the staff associations before embarking on any program of red-circling.
I said at the beginning and 1 repeat, the public service of Canada will support all measures to improve efficiency. It is in their interest to see that classifications reflect internal consistency and market requirements, as much as it is in the interest of anybody in the nation. But it is in the interest of all Canadians that the morale of people who serve Canada be high, that they feel they can be proud of their jobs, proud of their responsibilities and proud of what they do, and they do not want to be subject to abuse, which in many cases is ill-founded. I am suggesting that this particular sample cannot be projected simply on a national basis. It will have to be fortified, re-examined and looked at again from many angles and with a substantially improved staff within the Treasury Board.
I noted in the questions raised by the hon. member for Hamilton West-who seems to have his own secret sources that leak information to him-that the very people who are responsible for the audit appear to be misclassified. Surely this is a matter crying for the attention of the Treasury Board and of senior public servants. Surely this kind of study has to be completed in a responsible way before there can be any public position taken with regard to overclassification of jobs and possible red-circling.


Mr. Thomas H. Lefebvre (Parliamentary Secretary to President of the Treasury Board):: Mr. Speaker, once again the hon. member for Ottawa West (Mr. Francis) has brought a subject of importance to the attention of members of this House. I would like to outline a few of the articles that went into the study pertaining to the question that he has brought forward tonight.
During 1976, the personnel policy branch of Treasury Board secretariat undertook a sample classification audit of approximately 2,000 positions in the national capital area. The positions were selected using a sampling methodology covering all departments, agencies and occupational groups in the national capital area. For some very small agencies the population size resulted in no sample selection being made. Similarly, certain employee-oriented groups were also excluded.

For each position selected, a written statement of duties was obtained from departments. Each employee was then interviewed and a determination made as to whether the duties actually performed corresponded to the written statement. The resultant evaluation process for each individual sample selection consisted of three aspects: first, a comparison of performed duties with the classification standard; second, a comparison of the written position description with the classification standard; and third, a comparison of the performed duties with the written position description.
The study report, dated October 1976, indicated that approximately 20 per cent of the incumbents were performing duties which were misclassified-16 per cent overclassified and 4 per cent underclassified or allocated to the wrong occupational group.
The study was experimental in respect to the sampling methodology. Each individual evaluation was completely consistent with normal classification evaluation procedures. The study was extended to the public service outside the national capital during 1977 using the same sampling methodology.
Follow-up action on the results of the audit for the national capital area has been delayed pending clarification, through the court, of the question of red-circling. When the Supreme Court denied leave to appeal in a test case in March of this year, it, in effect, confirmed the right of the employer to red-circle. As a result, the Treasury Board secretariat is in a position to proceed in this area as follows: continue the renegotiation of a memorandum of understanding respecting red-circling with the Public Service Alliance of Canada; raise the question of similar memoranda of understanding with the other unions; and proceed to discuss with departments specific cases of overclassification brought to our attention through the two audits, or through any ad hoc audits.
It is the government's intention to consider various options for improving the over-all administration of the classification system. Consideration is being given to such matters as early warning mechanisms which will assist in the identification of potential problems, and the development of control mechanisms to improve accountability in the administration of the classification system.


POST OFFICE-POSTAL CARRIERS-CONSIDERATION BY GOVERNMENT OF ALTERNATIVE SERVICE
Mr. Peter Elzinga (Pembina):: Mr. Speaker, on March 10 I asked the Postmaster General (Mr. Lamontagne) in the House of Commons whether there were any plans to lift the present freeze on hiring additional postal carriers. The Postmaster General replied by indicating that, in line with federal policy, expanded letter carrier service and the extension of existing service has been deferred for an indefinite period of time. Many of the rapidly growing areas of my constituency are presently without door to door mail service. Since the people in my constituency are now paying for such postal service, they are entitled to receive it.
May 30, 1978

Postal service in Canada has been going downhill steadily for the past ten years. Immediate steps must be taken to restore the system to its former efficiency. If I were the head of a Canadian government and wanted by one single act to win back public confidence in parliament and the government, I would take every step necessary to restore the postal system to its former efficiency.
Complaints about inefficiency of the post office are too numerous to be dismissed as normal weeping and wailing. Each of us has a list of examples of horror stories. Because of the frustration surrounding the delivery of weekly papers in my constituency via second class mail, my office sends a supply of first class envelopes to the circulation departments of the newspapers which kindly print my column regularly. This is a convenience which is available to me as a member of parliament. Mailing privileges ensure that communication is maintained with my constituents. The parliamentary reading room subscribes to an airmail copy of the Edmonton Journal, and reasonably good service usually is available. But even so, the papers occasionally arrive at least four or five days late.
This is not an attack on the efficiency and dedication of smaller post offices and rural carriers in Pembina and other parts of Canada. I can testify to many acts of kindness and neighbourliness which are performed without fanfare by numerous rural mail drivers.
What bothers me is that, despite increased mechanization and increased rates of all classes of mail, the delays are getting longer. Many people have dropped subscriptions to magazines because they are stale before they reach their destination. In addition to public frustration, many business people are taking drastic action and have stopped using post office facilities. They are transferring their patronage to the new private courier service which has sprung up to fill the vacuum. A front page story in the Financial Post indicated that millions of dollars of potential post office revenue is being diverted to private parcel and letter carriers because these companies can offer the one thing the post office apparently cannot-reliability. What a sad abdication of responsibility by a once proud service which 50 years ago inaugurated airmail service down the mighty Mackenzie River delta because the horses and dog sleds took too long.
The post office used to rank with the armed forces and the Department of Transport as a basic function of government, a visible and tangible return for our taxes. Although breaking even was a goal of the post office, it was never a primary obligation. As citizens we expected service paid for in part when we bought postage stamps, with the balance coming from the general revenues of the government. I cannot believe there are not thousands of dedicated postal employees who have a sense of duty to get the mail to its destination. Unhappily, their ethic is not shared by all of their colleagues.
It is both sad and paradoxical that, in an age when almost anything seems possible, a basic right of citizenship-an efficient postal system-is beyond the competence of this govern-
Adjournment Debate
ment. The Progressive Conservative party is dedicated, in the event that we form the government after the next election, to offering the Canadian people an efficient postal system.
A chap who is running for our party during the next election, Mr. Ron Ritchie, recently conducted an inquiry into Canada's postal service. I wish to share with the House at this time recommendations brought forward by Mr. Ritchie. Among them there was recommended a return to purchasing services from the private sector for the pick-up and distribution of mail in major urban centres and consideration of the cost and advantages of other private sector contract operations.
A second recommendation was that the responsibilities and authority for providing mail services to the Canadian public should be given to a Crown corporation.
He recommended that the package of wage, salary and other benefits for Canada Post employees should not exceed those in the private sector so that appropriate comparisons might be made.
His next recommendation was that strikes by Canada Post employees should be illegal and we should provide conciliation and arbitration mechanisms and procedures for settlement of normally bargainable issues. He also suggested that maximum postal rates should be approved by a regulatory authority designated for this purpose.
It should be remembered that these recommendations were brought before our party for discussion and are not necessarily representative of policy.
When one considers the situation as it has been in the post office over the past ten years, one will find we have had seven different postmasters general. Is it any wonder that the individuals who are employed in this department of government are not concerned about the directions they are receiving? They have gone through four deputy ministers, and the post office deficit has undergone a 750 per cent increase in the ten-year period from 1968 to 1978. The deficit has risen from $67 million in 1968 to $567 million in 1978. Next year it is expected to go to some $650 million. This is not very comforting to the Canadian taxpayers.


Hon. J.-Gilles Lamontagne (Postmaster General):: Mr. Speaker, 1 have already replied, on March 10, to the hon. member for Pembina (Mr. Elzinga) on the subject of the letter carrier freeze. I will be pleased, however, to expand upon my remarks at this time but avoid getting drawn into a debate on the efficiency of our post office, which is improving constantly despite our numerous problems.
1 am very conscious of the fact that I have a great responsibility to provide Canadians with a high standard of mail delivery service. I am also very conscious of the fact that door to door delivery has existed for a long time and the public has grown to accept this service as a matter of course. Furthermore, I believe that every member of the House will agree that the letter carrier has a very high reputation and is recognized as a friend in every neighbourhood, and we have great collaboration and understanding from their union, the LCUC.

May 30, 1978
Adjournment Debate
At the same time I must be very conscious of the fact that in 1972 the post office had a $90 million deficit. In 1978 the projected estimated deficit was to be $717 million. Our decision to increase the rate to 14 cents, still the lowest rate in the world, has enabled us to lower that projected deficit for the current year to $505 million.
Always keeping in mind sound business administration principles, this action was taken in order to share more equitably our portion of the deficit among postal users and the general taxpayers. This is why we decided in 1976 to put a freeze on the extension of letter carrier door to door delivery services, and on the inauguration of the letter carrier delivery service in new towns.
In place of new door to door service it was decided then to provide alternative delivery service through the use of group mail boxes located on the side of the streets adjacent to the new houses. Under these circumstances no Canadians were deprived of an adequate delivery service.
However, I am sure members will agree that this level of service to new suburbs had to be viewed in light of the then financial situation. Naturally, this policy is under constant review and we must always keep under consideration the financial situation and service objectives of the post office.
Our past policy on this subject has always been a responsible one in view of our budgetary restraint and the will of our government to prevent any undue growth in our work force. If in the unforeseen future these two prerequisites can be reasonably attained, we will be only too happy to review our present policy and give our postal users still a better service by giving them door to door delivery. Let us hope we can do this soon.


TRANSPORT-GOVERNMENT ASSISTANCE FOR URBAN TRANSIT SYSTEMS
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my comments this evening are based on a series of urban transit questions I put in this House, the latest being May 2 when the Minister of Transport (Mr. Lang) was his usual evasive self, while the Prime Minister (Mr. Trudeau) at least said he would look into the matter to see if I had a point. The point is not whether the government is prepared to further a much needed urban expansion program in our nation's growing urban communities, but rather whether it would reconsider its position and abide by its 1974 election promise of $290 million for urban transit, a promise that was assumed to have been made in good faith and then quickly withdrawn once the Liberals were returned to power.
There are many such examples of election promises which turn out to be outright political lies. The most famous, of course, is the government's vehement opposition to wage and price controls, also made during the 1974 election campaign- and we all know the history of that broken promise since it was made to the unsuspecting public.
The example I would like to deal with this evening, however, is the promised urban transit funds. It was during the last

couple of weeks in that 1974 campaign that the Prime Minister, a clutch of his cabinet ministers and a veritable array of executive assistants and hangers-on gathered in Toronto in order to beguile residents of that city with a promise of $290 million to support urban transit. The Ontario government naturally welcomed that initiative.
As a result of that promise, the Ontario government, for example, ordered 80 double-decker railway cars for its GO commuter system in the metropolitan Toronto area. The cost of the contract with Hawker Siddeley for the cars was $40 million. About one half of the $40 million was to be paid by the federal government.
Unfortunately, as we have learned far too often with this government, it is not above bribing voters with their own money, because once the Liberal administration was returned to power in Ottawa, it began to renege on the promises made during the heat of an election campaign by announcing that the urban transit money proposed was no longer available. As a result, the Ontario government was forced to pay the whole shot itself so that the residents of southwestern Ontario would not have to go without a vital improvement to an important facility.
Another quick example, Mr. Speaker, as a result of this same promise, is the much needed alteration to Toronto's Union Station as part of a package to improve the over-all surface transportation facilities in and around Toronto. The federal government promised to provide $100 million of the total cost of $258 million. For Union Station, the federal share would have been $26.5 million. Unfortunately, once again this Liberal government reneged on its promise and the government of Ontario just last month was forced to begin alterations to Union Station on its own, alterations that cannot be as far reaching as originally proposed because of the backdown of federal funds.
The promises, of course, prompted other improvements, including the possibility of improving and extending the GO system to various parts within the reaches of metropolitan Toronto. Quite clearly, promises should not be made if there is a chance they cannot be kept. Because without those promises the Ontario government could possibly have created plans of their own which may have gone beyond the efforts which they are now trying to achieve on their own. If this government is going to back down from promises made, then perhaps it should not involve itself beyond the reaches of federal jurisdiction in the first place and let provincial governments deal with provincial matters on their own.
Help is naturally welcomed at all times, but not when it cannot be depended on. In this instance of urban transit support, the government's excuse for reneging on its promise was fiscal restraint. But it is quite obvious that the priorities are somewhat confused because we still have a government which continues to hand out taxpayers' money in the form of grants for such things as the following. There was well over $6,000 to investigate uses of the translation of human bio-electrical signals into music. There was a study on the fertility of families in Quebec which cost $48,000. There was $5,000 to

May 30, 1978

study the role of the harmonica in the social culture of each region of Canada. The list goes on and on and includes hundreds of millions of dollars of taxpayers' money.
These are the wrong priorities, Mr. Speaker. It is bad enough to be deceived by a government that bribes you with your own money, but it is calumny of the worst sort to promise money that it has no intention of giving out in the first place. That tactic will only work once. Like the little boy who cried wolf once too often, the whole thing comes back to haunt.
Now that the Prime Minister has backed down calling the expected election, and because an improved and expanded rapid transit system is all important to Toronto and surrounding communities like Oakville, Oshawa, Milton, Burlington, Hamilton and many other places, I urge that the government change its priorities by curbing many of its disgraceful and wasteful expenditures, some of which I have quickly pointed out this evening. The minister knows that there are many others. The government should at least fulfil the promises made during the last election campaign so that they will have a thread of credibility left once the election is called and so they can start making promises again. They should keep the last promises first, however.


Mr. Alan G. Martin (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, with reference to the $290 million election promise of 1974 referred to by the hon. member, in addition to the $100 million of new money already made available on the commuter side I am pleased to draw to his attention that on October 26, 1977, the government established a $230 million urban transportation assistance program to provide funds to provinces and municipalities for improvements to the urban transportation infrastructure and for railway relocations and grade separations.
This is a five-year program which has received approval by the governor in council. The $230 million will be distributed to the provinces on the basis of $10 per capita. That means, for example, Mr. Speaker, that the province of Ontario will receive a five-year allocation of $82,646,000.
The program has four main objectives: first, to improve the efficiency of the urban transportation system; second, to improve the standards of the urban environmental quality and land use efficiency; third, to conserve energy; and fourth, to improve safety at railway crossings, including construction of grade separations.
Adjournment Debate
A few words are perhaps necessary on the selection of projects for urban transportation assistance program funding. It was decided early on that the best people to decide on what sort of projects should be funded were the more local transportation people who understood local needs and priorities. Accordingly, the main responsibility for the selection of projects put forward by the municipalities was given to the provinces. Under the administrative processes which will govern the program, the provinces will determine their priorities and will submit a list of the proposed projects which will be considered for acceptability.
Most provinces are still working on their submissions but I am pleased to report that Ontario has been fast off the mark and has submitted an extensive list of grade separation projects and two railway relocation studies for which it has requested funding under the program. Twelve of these grade separation projects chosen by Ontario have already been approved and an announcement to this effect was made on May 24. I am pleased to note that four of these are slated for metro Toronto at Runnymede Road, Pape Avenue, Kingston Road and Main Street. One of them, I am more particularly pleased to note, is scheduled for my own borough of Scarborough where open level crossings continue to constitute a major community issue in spite of continuous federal approval and funding of numerous such grade separation projects over each of the last several years.
To expedite the construction schedule the minister has indicated to the government of Ontario that he has asked the Canadian Transport Commission to issue preliminary construction orders. This would temporarily leave in abeyance the allocation of project costs while allowing for the preparation of final cost estimates and for calling tenders for approved projects without further delay.
In closing, I should like to suggest that this program indicates to the extent possible, given the fiscal restraints that we are now operating under, the concern of this government for the urban transportation needs of Canadian municipalities and for the election promises made in 1974.


Mr. Deputy Speaker:: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock p.m.
At 10:32 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, May 31, 1978