1978-11-08

ROUTINE PROCEEDINGS


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the fact that since the first of this year eight police officers have been killed in the line of duty, and during this time several others have been wounded seriously, I move, seconded by the hon. member for Provencher (Mr. Epp):
That immediate steps be taken by the government to do whatever is necessary, through legislation or other means, to assure that all members of all police forces in the country be issued with bullet-proof vests so that each and every one of them has some measure of protection at all times while protecting and defending the citizens of our country against all unlawful and criminal elements.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POST OFFICE
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I have a short motion under Standing Order 43. In view of the decision of the Post Office to break the laws of Canada, namely, the Holidays Act, chapter H-7 of the Revised Statutes of Canada, and the Armistice Day Act of Newfoundland, by directing the Post Office to operate a normal-day service on Saturday, November 11, despite section 3 of the act, thus also showing disrespect for our veterans, the Canadian Legion and their fallen comrades, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the government direct the Post Office to observe Saturday, November 11, Remembrance Day, as a holiday, and that the Post Office apologize to the Canadian Legion and all veterans for this ignoring of the laws of Canada and for the disrespect shown veterans of Canada's wars.


Some hon. Members:: Hear, hear!


Mr. Lamontagne:: Mr. Speaker, a point of order-


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Pinard:: The Postmaster General (Mr. Lamontagne) wants to raise a point of order.


Mr. Speaker:: Order, please. The hon. member for Cape Breton-East Richmond (Mr. Hogan).


LABOUR CONDITIONS
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the fact that the adjusted unemployment rate for the province of Nova Scotia for October, as revealed by Statistics Canada, shows an adjusted seasonal rate of 10.2 per cent, and in view of the serious government expenditure restraints, plus the high interest rates policy, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That special capital works projects be immediately planned for Nova Scotia and the rest of the Atlantic region, to be implemented as soon as possible to avoid extremely serious conditions for the unemployed in these areas during the coming winter.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

November 8, 1978


THE CANADIAN ECONOMY
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I rise under the provisions of Standing Order 43 and ask for the unanimous consent of the House to move a motion relating to a matter of urgent and pressing necessity.
In light of the accusations made against certain American banks which are under investigation by the United States Securities and Exchange Commission, given the fact that the accusations are to the effect that some banks lower the value of the dollar by selling large amounts and buying them back at a lower price a few hours later, and also given the fact that these banks once they have made a profit, use their subsidiaries in the Caribbean, where taxes are not as high, to evade the revenue department, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the House request the Minister of Finance (Mr. Chretien) to proceed to an investigation to determine the responsibility of Canadian banks in the fall of the Canadian dollar.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXPORT SALES OF GRAIN-MOTION UNDER S.O. 43
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, two weeks ago the United States Congress passed emergency legislation to provide credit for export sales of grain to China. This action by the United States government will, without doubt, endanger Canadian exports of grain.
I move, seconded by the hon. member for Regina-Lake Centre (Mr. Benjamin):
That this House instruct the Minister of Industry, Trade and Commerce to immediately reverse his decision to cut back the interest subsidies on export sales of grain and the market incentive program for grains and oilseeds.


Mr. Speaker:: The presentation of such a motion for debate at this time would require unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


HEALTH AND WELFARE
Mr. Mike Landers (Saint John-Lancaster):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the fact that provincial facilities for children with learning disabilities are presently inadequate, and in view of the fact that the learning disability of a child is often health-related, I move, seconded by the hon. member for Vancouver East (Mr. Lee):
That this House urges the Minister of National Health and Welfare to investigate the possibility of a federal-provincial conference with a view to providing adequate facilities for children with learning disabilities.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FISHERIES
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise under the provisions of Standing Order 43. This motion concerns the proposed massive development of the Roberts Bank superport in British Columbia.
In view of the serious impact to future enhancement of Fraser River salmon runs and other foods fisheries by the degradation of the Fraser estuary in this project, I would move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That a moratorium be announced in respect of this project until the following take place:
(1)	A full public inquiry dealing with the need for rationalization of all west
coast ports, including Roberts Bank;
(2)	A proper estuary authority, composed of federal, provincial and municipal representatives, be formed to prevent destruction of the Fraser estuary.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PRESENCE IN GALLERY OF PRESIDENT OF SPAIN
Mr. Speaker:: Before beginning the oral question period, I know that all hon. members will want to join with me in
November 8, 1978

signalling the presence in our gallery of a very distinguished visitor and welcoming the first official visitor and leader of a delegation from Spain since the very recent passage of their new constitution, one of the principal architects of that new constitution and the President of the Cortes and of the Council of Realm, Dr. Hernandez Gil.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. James Gillies (Don Valley):: Mr. Speaker, my question is directed to the Minister of Finance. Given the fact that the bank rate has now gone to its highest point in Canadian history, and there is general agreement that this will cause greater unemployment and more inflation, I should like to ask why, when there were other policy options, including allowing the dollar to float, the minister did not choose to allow the dollar to float?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I think I have replied to that question. The governor of the Bank of Canada made a recommendation to me to the effect that in order to keep the Canadian dollar stable in relation to the difference between the interest rate in the United States and the interest rate in Canada, we had to increase the bank rate by one-half a point, and I did not disagree.


James McPhail Gillies: Mr. Speaker, given all these facts, including the traditional relationship between the Canadian and the United States economy, with their unemployment rate around 5 per cent and ours around 8 per cent-the differential is usually only about 1 per cent-could the minister be more explicit in saying why he rejected, or turned away from the traditional policy of allowing the dollar to float?
The reason one allows the dollar to float is to allow the government to operate a domestic economic policy that is appropriate for the times in one's own country. If there was ever a policy that seems to be wrong for the time, it is one of raising interest rates. Why did the minister move away from using a floating dollar as a way of permitting the government to follow a domestic economic policy which would be appropriate for the country at this time?


Joseph Jacques Jean Chrétien: Mr. Speaker, I reiterated in my answers that according to our monetary policy and to our policy of floating exchange rate, the interventions of the governor of the Bank of Canada were designed to see that the market operates normal-
Oral Questions
ly and that the fluctuation is not so abrupt as to cause a disastrous effect on the level of inflation in Canada.


James McPhail Gillies: Mr. Speaker, it seems to me that the Minister of Finance has missed the entire point. If a country has a policy of a floating exchange rate, it has that policy so that it can do domestically what it needs to do. Will the minister tell the House, quite directly and irrevocably, whether the government has rejected the policy of a floating exchange rate, because if it has, it makes no sense whatsoever to follow the policy the government is following with respect to interest rates?


Joseph Jacques Jean Chrétien: Mr. Speaker, the Canadian dollar is a floating currency and therefore its exchange rate varies in the marketplace from day to day. The intervention by the banks is made according to the policy I outlined a few moments ago.


James McPhail Gillies: Mr. Speaker, I do not know how to raise this question more directly, but an answer such as the minister gave is just incredible. A floating exchange rate is used by a country so that it can follow its domestic economic policies. Is the minister telling the House that he has a floating exchange rate, but still is not willing to follow a corresponding economic policy for the nation?
Is the minister saying, today, that the policy of the Government of Canada is to float the exchange rate, but at the same time it is to have high interest rates in the face of high unemployment and high inflation?


Joseph Jacques Jean Chrétien: Mr. Speaker, I cannot add much more to what I have already said. The Canadian dollar is a floating currency. Intervention by the Bank of Canada is to make sure that fluctuation in the market occurs in a rational fashion and is not so abrupt as to cause too much inflation in the Canadian economy.


ECONOMIC POLICIES-REMARKS OF MINISTER OF INDUSTRY, TRADE AND COMMERCE-RATE OF ECONOMIC GROWTH
John Carnell Crosbie: Mr. Speaker, my question is to the Prime Minister. Yesterday, the Minister of Industry, Trade and Commerce said, as reported in the Globe and Mail, that the economy is ready to move ahead. He said the Canadian-
-economy is posed to move ahead strongly "if our biggest purchaser, the United States, can only get its economics right." He did not elaborate.
Would the Prime Minister advise the House whether he intends to send the minister to the United States to advise them on their economic policies, and would he tell us which of the Canadian policies have been so successful that the United States will be advised to adopt them to get their economics right?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, there is no need for the minister to go to the United States.

November 8, 1978
Oral Questions
The United States have an ambassador here, and he has obviously informed the United States of our policies which are then being imitated by President Carter.


John Carnell Crosbie: Mr. Speaker, God help poor old President Carter of the United States. Just when the president was having a comeback, he is doomed again!


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


John Carnell Crosbie: My supplementary is to the Minister of Finance. The chairman of the Federal Reserve Board of the United States, Mr. William Miller, says that the economy of that country is revising its estimates of growth for next year down to between 2.5 per cent and 3 per cent, as compared to earlier estimates of 3 per cent to 3.5 per cent, and because of the monetary tightening of the Federal Reserve Board which went into effect three or four days ago, they are now up to 9.5 per cent.
Would the Minister of Finance state to the House, now, his estimate of what our economy's growth will be and how much it will be slowed by his increase in monetary tightening as a result of the United States increase? How far will our growth rate fall, over the minister's earlier projections for next year?


Hon. Jean Chr6tien (Minister of Finance):: Mr. Speaker, I will answer that question when I present the budget to this House.


John Carnell Crosbie: Mr. Speaker, economists generally say that for Canada to have real growth in its economy next year it will have to be export-led.
I would like to ask the Minister of Finance, in view of the fact that the United States economy will drop in growth and that our main export market is the United States, does he still expect Canada to have any stimulus next year that it will be export-led, considering the possible consequences on the United States economy of this tightening policy?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, I shall answer these questions with full details when I table my speech on the budget.


EXTERNAL AFFAIRS
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question is to the Solicitor General. Serious allegations were made last night on the CBC program "Fifth Estate" regarding three specific illegal shipments of shells and other military equipment from Space Research Corporation of Canada to South Africa via other countries. Since it has been reported that the RCMP has investigated at least one of these

allegations, could the minister inform the House of the results of such an investigation?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, the hon. gentleman well knows that it has been the practice of solicitors general past and present not to comment on the progress of an investigation that is going on, but to keep their comments until it has been completed.


EXPORT OF MILITARY EQUIPMENT TO SPAIN
John Edward Broadbent: Mr. Speaker, since the Minister of National Revenue is in the other place, I shall have to ask the Minister of Industry, Trade and Commerce the following question: since the Government of Canada authorized the shipment of shells to the government of Spain-that, I take it, is beyond question-during the present year, could the minister tell the House whether the government ascertained that those shells had, in fact, been requested by the government of Spain before it gave approval for the export permit?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, I really do not think this matter should be dealt with in the House of Commons. As the Solicitor General has suggested, it is under investigation now and we want that investigation to go ahead as fruitfully as possible.


John Edward Broadbent: A final supplementary question, Mr. Speaker. We certainly have to get a report in the House at some point on this very serious matter, so I shall put my question to the Secretary of State for External Affairs. Considering that the allegations are extremely serious, carry heavy penalties and involve the credibility of Canada living up to international agreements, will the minister assure the House that in terms of his responsibility to other countries as well as Canada, at some point he will bring in a full report on these serious allegations?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Yes, I can give that assurance, Mr. Speaker. I think my colleagues have indicated that the investigation is under way, but I want to emphasize that it did not come about as a result of these most recent news reports. This matter was first brought to light some months ago during the visit here of Mr. Nkomo. It was at that time that the investigation was launched. So far, we have not had an official report or, in my case, any report from this investigation. But it is clearly government policy to ensure that the maximum amount of assurance is provided that no shipment goes to South Africa. If there has been a problem, obviously it will be dealt with. I shall certainly take the House into my confidence as soon as I have anything to report.


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I should like to direct a question to the Minister of National Defence on this important issue. He will remember that some
November 8, 1978

months ago I made a very specific inquiry about the status of Space Research Corporation and he gave assurances at that time, by letter, that as far as he knew this corporation was quite all right. I should like to ask him today, in view of the questions raised and recent developments, whether that assurance still stands.


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I have no reason to change the answer I gave at that time, subject to whatever the investigation of the Solicitor General might disclose, if anything.
Oral Questions
interventions by the banks of Canada to have the Canadian dollar fluctuate.


Mr. Aliard:: Mr. Speaker, could the minister inform the House on when we will have the results of those investigations?


Joseph Jacques Jean Chrétien: Mr. Speaker, I shall have an answer if the inspector found something abnormal but up to date there is no indication of any problem in his preliminary report.


THE CANADIAN ECONOMY
[Stage Direction]


Eudore Allard: Mr. Speaker, I should like to put a question to the Minister of Finance.
As accusations have been made against certain American banks which are now the object of an inquiry by the United States Securities and Exchange Commission; as those accusations involve banks which force the decline of the dollar by selling huge quantities of dollars and buying them a few hours later, making profits through tax evasion achieved by selling the dollars through their Parisian office to a branch in the Bahamas where the tax rate is lower, so the dollars come back from the Bahamas at a higher rate after having evaded French taxes; as Canadian chartered banks have many branch offices in the Caribbean, can the minister tell the House whether or not he is considering holding an inquiry into the activities of our chartered banks with regard to the devaluation of our dollar?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have had the opportunity of discussing that problem with the governor of the Bank of Canada as well as the inspector general of banks. I asked them whether or not the same thing could have occurred in Canada. They assured me they did not think it had. The inspector general of banks told me, however, the he would look into the matter further. For the time being, L have no reason to believe the problem could have arisen in the case of Canadian banks.


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I want to direct a question to the Minister of Transport: it arises out of a very serious issue between his department and Canada's largest seafaring union, the SIU, centering around the question of safe-manning regulations at sea.
The union has charged that there is an inadequacy of regulations and rules and that this is a result of the government having left to the companies the identification maintenance of such safety standards. Is the minister in receipt of this petition, and has he responded to it? Could he indicate whether or not the government, his officials and the appropriate branch of the department are satisfied or otherwise with respect to safe-manning regulations on ships at sea?


Hon. Otto E. Lang (Minister of Transport and Minister of Justice):: Mr. Speaker, the particular issue has been brought to my attention, and in a preliminary way I was given the information that this was an approach consistent with our approach in other areas with respect to inspection and licensing. We quite often depend upon the participant operators to assure that standards are met from time to time and then determine by assessment, occasionally, that they are, indeed, carrying out their responsibilities. I am having the matter looked into further. That is as far as I can go at this time. But the preliminary assurance was that this system was working well.


Eudore Allard: Mr. Speaker, the minister informs me that he has asked the governor of the Bank of Canada. I would like to know if in fact he is investigating now or if the minister is prepared to go further in his inquiries?


Joseph Jacques Jean Chrétien: Mr. Speaker, the banks of Canada have a supervisor called the bank superintendent who communicates with them. I raised the matter with the superintendent who told me he was investigating. His preliminary report indicated that he had no reason to believe that there were undue


J. Michael Forrestall: Mr. Speaker, I am not sure that I want to interpret or put words in the minister's mouth, but are we to take from what the minister has just said that he is personally satisfied that there is, in fact, a system of regulations with respect to safe manning in effect at sea which negates any serious question of danger to ships, crews, life and property? Is that what I understood him to say? If it is, when can we, on the basis of that, expect him to reply in some detail to the petition which has been forwarded to him by members of the SIU?

November 8, 1978
Oral Questions


Otto Emil Lang: Mr. Speaker, the answer was that in a preliminary way I was satisfied. I would want to be more fully satisfied before making a formal reply.


TRANSPORT
Mr. David Crombie (Rosedale):: Mr. Speaker, my question is for the Minister of Transport. The hon. gentleman will recall that in Toronto in 1974, at the Toronto Dominion Centre, the Prime Minister announced a major promise with respect to funding urban transportation systems in the order of 25 per cent of capital funding. The hon. gentleman will also recall that in 1975 a further commitment and a reiteration of the commitment was made by the then minister of transport, Mr. Marchand, and in 1975 the Canadian Federation of Municipalities indicated that they wanted that commitment carried out. Finally, in 1977-


Some hon. Members:: Order.


Mr. Speaker:: Order, please.


David Edward Crombie: Mr. Speaker, all the municipalities of this country are waiting for the answer.


Some hon. Members:: Hear, hear!


David Edward Crombie: Were these hollow promises, or does the government intend to live up to its commitment to support the urban transportation systems of this country?


Otto Emil Lang: Mr. Speaker, the long premise of the question contained reference to a number of statements which I might have some doubt about and which I might want to check.


Some hon. Members:: Oh, oh!


Otto Emil Lang: The hon. member has already fallen into two traps of his colleagues, new as he is: one is not to give notice when he is going to refer to statements that go back three or four years; the other is to put a preamble to a question which ordinarily should not be tolerated in the question period.


Some hon. Members:: Hear, hear!


Some hon. Members:: Shame!


Otto Emil Lang: In addition, it would be well known-and should be well known even to the hon. member-that a very firm answer has been given to this question, that we had to reexamine our contribution to urban transportation programs in the light of a fiscal restraint situation on the federal government. When we had to cut programs-and we had to cut many good programs across this country in the last three years- within federal responsibility, obviously the first place in which

we had to exercise restraint was those areas where we were simply spending the money but where the responsibility was clearly that of the province and the municipality. That is what we did. We did not eliminate, but we limited the amount which we would spend. We created the urban transportation assistance program. I am sure the hon. member has known that for a year or so.


David Edward Crombie: I am sure the minister is aware that all of the municipalities in this country, particularly the largest municipalities, have major deficits with regard to an urban transportation system. When they do their budgeting, the question they have to consider is whether the government's commitment will be there for capital funding. Will the minister tell the municipalities of this country, and this House, whether there was a commitment to capital funding from the federal government? That is the simple question.


Otto Emil Lang: Mr. Speaker, the simple answer, which has been given for at least a year now, is that the exact amount of our funding available for urban transportation purposes of a broad nature with a good deal of flexibility is-


An hon. Member:: Zilch.


Some hon. Members:: Hear, hear!


Otto Emil Lang: -the urban transportation assistance program. A total of $10 per capita is available on the basis of provincial populations so that there will be equity across this country for all provinces. That fund is available. Beyond that, it is recognized, I think by everyone, that this is a provincial and municipal responsibility. If the hon. member is suggesting that the municipalities have a deficit to face, I trust he also knows that the federal government has a significant deficit to face in its manner of attempting to inspire further growth in the economy. On the other hand, many of the other provinces are not faced with such deficits.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


AIRPORTS
Mr. Ross Milne (Peel-Dufferin-Simcoe):: Mr. Speaker, in 1968 the government announced a decision to build a second airport in the Toronto area rather than expand Toronto international to provide additional air facilities. That decision was confirmed a number of times in this House. I now view with alarm reports of a study and proposed recommendation of a fourth runway at Toronto international airport.
Will the Minister of Transport clarify this apparent contradiction and assure the residents of Brampton, Etobicoke and Mississauga that a fourth runway is not in the immediate future?
November 8, 1978


Otto Emil Lang: Mr. Speaker, I am very glad to assure the hon. member that, there has been no change in our position against the fourth runway and the expansion of that facility at the Toronto international airport.
We had, of course, assessed a long time ago the costs to people in the area of much further expansion of the international airport. We had been willing to go to the cost of a second major airport in the area in order to avoid that cost. That, of course, has been frustrated by the action taken by the Ontario provincial government.
At this point in time, we are looking at every possible option in the way of trying to accommodate passengers into and out of the Toronto area, with the least inconvenience to them. It is a difficult question. As I said at the time Pickering was stopped, there is no assurance that convenient ways of solving the problem will be found. However, I do give the hon. member assurance that there is no change in our policy not to build a fourth runway. We are studying the feasibility of every option, including that one, because those who favour-


Some hon. Members:: Order.


TRANSPORT
Mr. Arnold Malone (Battle River):: Mr. Speaker, my question is for the "umbrella" minister under his responsibilities as Minister of Transport. I would like to read one sentence from a newspaper quote and ask whether the minister subscribes to it. It relates to comments by professor Fred Anderson of the Prairie Rail Action Committee. The report, is "the chairman of the Prairie Rail Action Committee declared the process for doing a real rationalization on the basic prairie rail network is probably impossible." Does the minister subscribe to that position?


Otto Emil Lang: Mr. Speaker, if the hon. membr had the whole of Professor Anderson's statement and views here, he would see that what Professor Anderson is really saying is that, because this government insisted on retaining a significant number of branch lines for the service of people and communities, the maximization of simple economic benefit based on transportation measurements alone is not being met. To that, we certainly do plead guilty.
We have taken into account the community benefits and the benefit to grain farmers. In that sense, we have a branch line system and rail line system that in simple, economic terms does not measure up as the best possible one available. I think, however, it is proper to take these other social matters and the farmers into account in these matters.


Some hon. Members:: Hear, hear!
Oral Questions


Arnold John Malone: Mr. Speaker, if Shakespeare were here, he would say "Such a foul or fair-haired boy I have never seen." Does the minister subscribe to the position of Fred Anderson that there is already too much mileage in the basic network that was recommended by Justice Emmett Hall? Is that the position of the department and the minister?


Otto Emil Lang: Mr. Speaker, obviously, it is not because instead of simply measuring the question in economic terms, we are also measuring the question in terms of benefit to communities and farmers. Measured in those terms, we believe the number of lines that have been retained is justified and that we are developing the right kind of grain handling system which balances properly the needs of farmers and communities with the interests of the taxpayer as a whole.


SALES TO PEOPLE'S REPUBLIC OF CHINA
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, may I ask the Minister of Transport, who is also in charge of the Canadian Wheat Board, a further question arising out of questions raised yesterday. The United States recently passed legislation to provide short-term credit for grain sales to the People's Republic of China. They have recently landed their first contract of 3.2 million tonnes because Canada could not take on anything larger than we have.
Would the minister prevail upon the government and his colleagues to reverse the restraint program of cutting back $5 million for programs of interest subsidies on export sales of grain and $900,000 on the grain oilseeds marketing incentive program? Will he also assure the House that any credit arrangement by the Canadian Wheat Board which may be needed to meet this additional competition from the United States will be made available to the Wheat Board?
Hon. Otto E. Lang (Minister of Transport and Minister of
Justice): Mr. Speaker, I can assure the hon. member that there is no problem in terms of sales by the Canadian Wheat Board and the kind of credit they can extend to China in order to accomplish those sales. Those sales to China-which have been very major and important these many years-have traditionally been on credit, credit guaranteed by the federal government in the usual way. We will continue to do that. I have no indication of any need for a subsidization payment in relation to that interest. Therefore, I can tell the hon. member, as he should know, that the Chinese still consider the Canadian Wheat Board the prime supplier of wheat to them. The Wheat Board expects to continue to be that supplier and on arrangements that are perfectly satisfactory to them.


Leslie Gordon Benjamin: In view of the fact that China has on occasion borrowed money somewhere else to pay off an advance for grain purchases, and since one of the commission-

November 8, 1978
Oral Questions
ers of the Wheat Board, Mr. F.M. Hetland, has stated that
4.000	more rail cars in grain service would generate more than $700 million a year in additional foreign sales and foreign exchange for Canada, may I ask the minister whether he will now require the railroads to repair and put into place at least
5.000	more cars for grain movement so that we can enlarge our export capacity to China and other countries?


Otto Emil Lang: The House knows that we have held discussions with the CNR and entered into a successful arrangement with them to repair 1,000 boxcars, half at the cost of the government and half at the cost of the railway. We have sought a similar arrangement with Canadian Pacific and initially received a negative reply. I have supplied CP with some further argument and I am now awaiting an early response from them in relation to the same proposal.


GOVERNMENT EXPENDITURES
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is to the President of the Treasury Board. He will recall that the Speech from the Throne indicated that parliament would be given an opportunity to review all evaluations of major programs undertaken by the government. The Comptroller-General is presently conducting such a review, but the President of the Treasury Board has indicated that such reviews will be confidential. It seems to me there is a conflict here, and I hope the minister can clear it up. Are these reviews presently being undertaken by the Comptroller-General confidential, or will the public be allowed access to the findings? After all, we are talking about waste and inefficiency.


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, the statement in the Speech from the Throne represented, I thought, a good advance. I thought the hon. member, along with others, would welcome it. This is something we have all wanted to see. Evaluations of major programs, as indicated in the throne speech, will be available to parliament.


TRANSPORT
Mr. John Wise (Elgin):: Mr. Speaker, my question is directed to the Minister of Transport: it relates to the proposed 20 per cent increase in freight rates affecting food and food-related items moving between Ontario and Quebec. This latest increase would be in addition to the increase of an identical amount imposed one year ago. I am sure the minister is aware of the objections which have been lodged by the Ontario Food Processors' Association and I would ask him whether any decision has been made to prevent this freight rate increase.


Otto Emil Lang: The minister has very limited power in relation to freight rate increases. These are filed by the railways, under the law, with the Canadian Transport Commission and there are certain narrow grounds on which they may be challenged there. I have no doubt the usual procedures will be followed in relation to this proposed increase.


John Wise: Is it the minister's intention to accept, or to impose, another rate increase of such magnitude, particularly in light of the effect such a measure would have on consumer prices, especially in Ontario and Quebec?


Otto Emil Lang: For reasons which were fully set out by the MacPherson royal commission on transportation, the government was not given power to oversee individual rates imposed by the railways from time to time. In areas where competition was seen as being an adequate way of controlling rates-and this was seen as applying particularly in highly populated areas of Ontario and Quebec-the theory was that competition would have a restraining influence upon the imposition of rate increases.
As I indicated in my earlier answer, it is not a matter of my imposing a rate: that is a silly thing for the hon. member to say. Indeed, even my dislike of a rate can have no impact, because I do not have power in relation to that rate.


INDUSTRY
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, 1 should like to address a question to the Minister of Industry, Trade and Commerce. As the principal reason for this country losing manufacturing jobs at the rate of 11,000 a month is that productivity here remains well below the level in the United States, thus causing our costs to be higher than theirs and making our products uncompetitive with those of our principal competitors, would the minister advise us when he intends to introduce productivity incentives to be paid in direct proportion to increases in productivity, so that we can stop this serious loss of manufacturing jobs which is going on at an annual rate of more than 100,000 jobs?
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): I want to thank the hon. member for his question, and assure the House that I shall be here for a long, long time.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: I am very confident that my services as Minister of Industry, Trade and Commerce will reflect beneficially upon the economy of Canada.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!

November 8, 1978


John (Jack) Henry Horner: I also want to thank the hon. member for his question with regard to manufacturing jobs. Today, for the first time, Canada has developed a new aircraft for civilian use employing new technology, Canadian technology. Over 125 of them have been sold. It made its initial flight this morning.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: It flew for an hour-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member for Prince Edward-Hastings.


George Harris Hees: As I am advised that this airplane was built despite the Minister of Industry, Trade and Commerce, and as he knows perfectly well that these manufacturing jobs are being lost at the rate of well over 100,000 a year-he has not denied it-was not the minister's answer a clear indication of the reason he is being moved to another department where it is estimated he will do less harm to the economy?


John (Jack) Henry Horner: I am pleased to see television in the House of Commons, Mr. Speaker.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: I was not always in favour of it, but it allows the people of Canada to see the humorous way in which members over there take our economy. Canadair's "Challenger" flew: this morning it performed all the tests the pilot asked of it. It performed so well that they are taking it up again this afternoon.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: I think I should say it is a tremendous day for the Minister of Finance because it was he who convinced me, the Minister of Industry, Trade and Commerce, that the government would put support behind that industry which has led to the creation of something like 5,000 jobs in the city of Montreal alone. In all, it has created 100,000 more jobs in manufacturing.


Some hon. Members:: Order.


George Harris Hees: The minister will be carried to his new job in his new airplane.


THE CANADIAN ECONOMY
Hon. Martin O'Connell (Scarborough East):: Mr. Speaker, my question is for the Minister of Finance-[DOT]
Oral Questions


George Harris Hees: You'd better warm up that airplane, Jack, and be ready to move.


John (Jack) Henry Horner: You are not moving anywhere yourself, only back to the House.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


Mr. O'Connell:: Mr. Speaker-


George Harris Hees: If you want me to go and shut him up, I will, Martin.


Mr. Speaker:: Order, please.


Martin Patrick O'Connell: Mr. Speaker, my question is for the Minister of Finance. In view of the fact that, in spite of five increases in the interest rate by the Bank of Canada in the past eight months, unemployment as measured by Statistics Canada actually fell by 28,000 persons-


Some hon. Members:: Hear, hear!


Martin Patrick O'Connell: -and fell also, as a percentage of the work force, from 8.6 per cent in March to 8.2 per cent in October-


Some hon. Members:: Hear, hear!


Martin Patrick O'Connell: -could the minister advise the House whether, in light of this Canadian experience with unemployment not rising in line with Bank of Canada increases, this latest increase in the bank's interest must, in his opinion, inevitably result in increased unemployment, as some allege; and can he assure the House that, in the interest of further lowering unemployment in Canada, he is giving serious consideration to the recommendations now made to the Government of Canada by labour and business representatives from the 23 task forces, and could he tell us when he intends to bring in his budget?


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Mr. Speaker, of course, managing the economy is a very complex problem, but I am glad the hon. member mentioned the good results. Many factors are intervening and one cannot judge the trend of the economy by one factor alone, as the opposition members do so often. Yesterday, the Leader of the Opposition took an hour to make up his mind to ask me when the budget will be brought down. Today, he wants to take another hour, so perhaps it might be better if I told him right away. The budget will be brought down on Thursday of next week, November 16.


Some hon. Members:: Hear, hear!

November 8, 1978
Oral Questions FINANCE


PROPOSED REDUCTION IN TRANSFER PAYMENTS
Hon. Robert L. Stanfield (Halifax):: My question is for the
Minister of Finance, who yesterday indicated he was abandoning any effort to reduce the established programs he had undertaken with his colleague, the President of the Treasury Board, to reduce transfer payments to provinces by some $220 million; and having abandoned whatever percentage was to come from the established programs, he is now reducing the $220 million he was going to cut back, or will he make that up from some other source? Also, would he indicate the amount of the reduction of where he is going to make it up?


Alexandre Cyr: Mr. Speaker, I answered that question yesterday when I said we had decided to postpone two programs and make some changes to the equalization formula. Thus, we will have managed to save through those programs the funds we had set ourselves to save when we published our conclusions last September 8.


Robert Lorne Stanfield: Mr. Speaker, I would really like a simple, non-flexible answer from the minister. I heard what he said yesterday and I want to know, quite frankly, whether he is reducing the $220 million he was going to save, or whether he is making it up some other way. It is a very simple question. I do not want to know whether he is as flexible as the Minister of Transport, but will he give me an honest answer to that question?


Joseph Jacques Jean Chrétien: Mr. Speaker, we do not intend to reduce the $220 million that was mentioned.


GOVERNMENT EXPENDITURES
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, some time ago the President of the Treasury Board announced that as part of the cuts in expenditures proposed by the administration there would be a repeal of the act which is known as the public utilities income tax refunding act. I want to put a question to the Prime Minister with regard to this act. Has he secured the support of the Minister of Industry, Trade and Commerce to this particular act in so far as it applies to the province of Alberta?


Joseph Jacques Jean Chrétien: Mr. Speaker-


Marcel Joseph Aimé Lambert: My question is directed to the Prime Minister.


Pierre Elliott Trudeau: It would have been nice if you had said you directed it to the Prime Minister rather than to the Minister of Finance.


Some hon. Members:: He did.


Joseph Jacques Jean Chrétien: This question was debated last week at the meeting of the ministers of finance. I intend to discuss it at the cabinet meeting tomorrow and will give an answer before the end of the week, as I said to the Alberta government I would do.


UNEMPLOYMENT IN SUDBURY, ONT.
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the President of the Treasury Board. In view of the fact that we who live in the Sudbury basin are suffering crushing unemployment of 11.1 per cent, according to the Department of Employment and Immigration, and in view of the fact that the government has announced that it will construct a taxation data centre-construction to start this fall-and in view of the fiscal restraint program this construction has now been put off until next year or possibly later; and in view of the fact that we have very serious unemployment in the trades in the Sudbury basin, and there is possibly a close correlation between crime and unemployment, can the President of the Treasury Board-since he has had five days to review the decision-tell the House and the people in the Sudbury basin that he is prepared to withdraw the restraint program as it affects the construction of the taxation data centre?


Robert Knight Andras: gave the hon. member an answer to this question the other day, and the answer I gave him still prevails. My colleague, the Minister of Public Works, myself and the Minister of National Revenue, are looking at this question, but I cannot give the hon. member any such guarantee at this moment.


John R. Rodriguez: Mr. Speaker, my final supplementary is, again, to the President of the Treasury Board. In view of the fact that recently the government was able to find $25 million to purchase Nordair from Air Canada-possibly owing to a lot of pressure from the provinces, etc.-can the President of the Treasury Board assure the House that he will look as assiduously as possible in his budget for financial arrangements to find $10 million to go ahead with the construction of that essential project in the Sudbury basin, and stop pussy-footing around?


Robert Knight Andras: The method of financing the Nordair transaction, when announced, will indicate that it is not in the same category whatsoever. The answer I gave the hon. member about our concern respecting unemployment in the Sudbury basin and in northern Ontario is also shared by a very prominent person in the House, Mr. Speaker himself, who represents Sudbury, and this problem is being given very serious consideration indeed.
November 8, 1978


REMOVAL OF RADIOACTIVE WASTE
Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources who has accepted the responsibility for, and given priority to, the removal of radioactive thorium from its current storage site in Surrey, British Columbia. In view of the fact that the minister and the AECB have not been successful in establishing that priority, will the minister state a priority target date for the removal of radioactive wastes from Surrey?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: The hon. member knows that the Atomic Energy Control Board has licensed the interim storage of the materials to which he referred, that they have found this to be a safe interim storage and, further, that the responsibility for finding another site which might be licensed under applications to AECB remains with the province of British Columbia. I believe that one or two departments in the government of that province are at present seeking another site for that material.


Robert Lloyd Wenman: I regret that the minister appears to be trying to wriggle out of the responsibility he has accepted on his own behalf of the board, but it just points out that the problems are jurisdictional in nature and the difficulty of storage, not only of radioactive waste but also of low-level active wastes and, in fact, toxic wastes which can be found across this nation. In view of that problem, will the minister sponsor an order of reference to the Standing Committee on National Resources and Public Works so that it might study the matter and make recommendations on the disposal of low-level radioactive wastes and toxic chemical wastes, and on the jurisdictional issue?


Alastair William Gillespie: Mr. Speaker, there is no question of wriggling away from any responsibility. I am quite prepared to accept my full responsibilities with respect to this particular question. Unfortunately, at the present time the act does not give me the kind of responsibility which the hon. member asks me to undertake. I think he made a useful suggestion when he talked about the standing committee. Perhaps the standing committee will look at this particular problem. I will discuss that with the House leader to see whether, under that reference or some other reference, this question might be considered by the committee.
Post Office



ROUTINE PROCEEDINGS


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, since Remembrance Day this year falls on a Saturday and that according to what I have been told public servants are to have a holiday on Monday the 13, I would like to ask the President of Privy Council (Mr. MacEachen) whether he has considered the possibility of asking that the House do not sit on that day in order to grant the same holiday to House of Commons employees.


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, I have had informal consultations, and as a result of those consultations I have concluded that the House should sit on the Friday and the Monday, which are the working days before and after the celebration of November 11. I believe it will be possible for all members to travel to their constituencies to participate in commemorative ceremonies. On Friday the House of Commons will pay a tribute to those whose memory we commemorate on the following day.
I believe it was the conclusion of members of the House that it would be more fitting for them to continue their work as prescribed under the Standing Orders, rather than take a day in their constituencies.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I rise on the same point of order. Because of the wide protest from the public and the Royal Canadian Legion respecting the decision of the Post Office Department to operate on November 11 as a normal day-


Marcel Joseph Aimé Lambert: Shame!


Walter Gilbert Dinsdale: -I wonder whether the Postmaster General (Mr. Lamontagne) would rescind the order, thereby allowing postal employees to pay their respects to those who gave their lives for the country.


Some hon. Members:: Hear, hear!


Hon. J. Gilles Lamontagne (Postmaster General):: Mr. Speaker, I thank very much the hon. member for Brandon-Souris (Mr. Dinsdale) for asking me that question on a point of order. 1 had many inquiries concerning this question when I attempted to seek the floor during motions under Standing Order 43.

November 8, 1978
Estimates
I never gave orders to work on Saturday. Some of our workers have to work on Saturday. Being a veteran myself- and I know there are many veterans in this House and across the country-I have full respect for and know the significance of Remembrance Day. However, there are many regulations prevailing across Canada concerning official holidays, and there are different rulings according to different collective agreements. To entitle everyone to do their work and perform their duties, and at the same time to pay their respects, I have instructed the deputy minister of the Post Office Department to make arrangements to accommodate those of its work force who wish specifically to honour Canada's war dead on Remembrance Day, November 11.


Some hon. Members:: Hear, hear!

[ Translation]


PRIVILEGE
Mr. Speaker:: Is the hon. member rising on a point of order?


Mr. Raynald Guay (L6vis):: Yes, Mr. Speaker, and also on a question of privilege. I had a very important question to ask the Minister of Industry, Trade, and Commerce (Mr. Horner) concerning representatives of shipyards, in my riding, who are waiting to sign contracts. A grant was reduced from 20 per cent to 12 per cent since the end of October, and the future of our shipyards and the creation of new jobs there are contingent on the minister's announcement. These contracts must be signed within the next few days, Mr. Speaker.


SUPPLEMENTARY ESTIMATES (A) 1978-79 REFERENCE TO STANDING COMMITTEES
[Stage Direction]
A message from His Excellency the Governor General transmitting Supplementary Estimates (A) of sums required for the service of Canada for the fiscal year ending March 31, 1979, and in accordance with the provisions of the British North America Act, 1867, was presented by Hon. Robert K. Andras (President of the Treasury Board) and read by Mr. Speaker to the House.
Allan Joseph MacEachen: Mr. Speaker, pursuant to the provisions of Standing Order 59, I move:
That the Supplementary Estimates (A), 1978-1979, tabled this day, be referred to the several standing committees of the House as follows:
Because there is a detailed allocation of the estimates to various committees, I should like to dispense with boring the House by reading the details. They have been circulated to opposition parties for perusal. If that is agreeable, I will not

read the list, and I ask that it be printed in Hansard as if it had been read.


Mr. Speaker:: In accordance with our usual practice, Supplementary Estimates (A) were just tabled by the President of the Treasury Board (Mr. Andras). The motion is accepted for introduction in this way. I presume it is the will of the House that the content of this motion not be read at this time, but that it be printed in Hansard as if it had been read. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
[Editor's Note: The remainder of the motion is as follows. ]
To the Standing Committee on Agriculture:
Agriculture votes la, 20a and 50a
To the Standing Committee on Broadcasting, Films and Assistance to the Arts: Secretary of State votes 15a, 20a, 30a, 45a, 65a, 100a and 105a To the Standing Committee on External Affairs and National Defence:
External Affairs votes la, 10a, LI5a, 25a, 30a and 31a To the Standing Committee on Finance, Trade and Economic Affairs:
Finance votes la, 6a and 16a
Industry, Trade and Commerce votes la, L32a, L33a, 45a, 47a and 50a Privy Council vote 20a
To the Standing Committee on Fisheries and Forestry:
Environment votes la, 15a, 20a and 30a To the Standing Committee on Health, Welfare and Social Affairs:
National Health and Welfare votes 50a and 60a Urban Affairs votes 10a and L25a
To the Standing Committee on Indian Affairs and Northern Development
Indian Affairs and Northern Development Votes la, 5a, L20a, 25a, 35a, L50a, L52a and 74a
To the Standing Committee on Justice and Legal Affairs Justice Vote 5a
Solicitor General Votes 5a, LI6a, LI7a and LI8a To the Standing Committee on Labour, Manpower and Immigration Employment and Immigration Votes 10a and 15a Labour Vote 15a
To the Standing Committee on Miscellaneous Estimates Privy Council Votes la, 5a and 30a Science and Technology Votes 5a, 10a, 25a, 45a and 50a Treasury Board Votes 20a and 35a
To the Standing Committee on National Resources and Public Works Public Works Votes 5a, 20a, 25a and 45a
Energy, Mines and Resources Votes 5a, 6a, 10a, L26a, 35a, 40a, 45a and 80a To the Standing Committee on Regional Development Regional Economist Expansion Vote 30a To the Standing Committee on Transport and Communications Transport Votes 10a, L63a, 85a, 101a and 102a To the Standing Committee on Veterans Affairs Veterans Affairs Votes la and 10a


[Stage Direction]
Motion agreed to.
November 8, 1978

Otto Emil Lang: Mr. Speaker, under the provisions of Standing Order 41(2), I should like to table, in both official languages, a paper entitled: "Legislation Governing Liner Conferences Serving Canada". A bill on this subject is being introduced today in the other place.


SOCIAL SECURITY
[Stage Direction]
Hon. Monique B£gin (Minister of National Health and Welfare): Mr. Speaker, pursuant to Standing Order 41(2) and sections 22.2 and 22.3 of the Old Age Security Act, I am pleased to table, in both official languages and also in Italian, the agreement on social security between Canada and Italy, signed in Toronto on November 17, 1977, by the Right Hon. Pierre Elliott Trudeau, Prime Minister of Canada, and the Hon. Giulio Andreotti, President of the Britannica Council of Ministers of the Italian Republic.

Joseph Jacques Jean Chrétien: that the subject matter of Bill C-15, to revise the Bank Act, to amend the Quebec Savings Banks Act and the Bank of Canada Act, to establish the Canadian Payments Association and to amend other acts in consequence thereof, be referred to the Standing Committee on Finance, Trade and Economic Affairs, and that during its consideration of the aforementioned matter the committee be empowered to engage expert assistance.


Mr. Speaker:: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
Order discharged, bill withdrawn and subject matter referred to committee.
Order Paper Questions


QUESTIONS ON THE ORDER PAPER
Yvon Pinard: Mr. Speaker, the following questions will be answered today: Nos. 44 and 252.
I ask that the remaining questions be allowed to stand.


Mr. Orlikow: 1.	For the Fiscal year 1976-77, what contracts for professional services were let for studies, surveys and analyses into (a) present or future policies, programmes or information analysis and their efficiency and effectiveness (b) the examination of the administration or internal operation of the Department of Indian Affairs and Northern Development?
2.	How much was committed on each contract and to whom?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: 1. Name of		Value of
Contractor	Description of Contract	Contract(a) Parker, Elyse	Feasibility study of "Les Forges du St. Maurice", P.Q.	$ 4,106Potvin, Claude	Feasibility study of Artillery Park, Quebec city, P.Q.	4,136Watson, Marilyn	Feasibility study of Artillery Park, Quebec, P.Q.	4,145Koester, G. D.	Implement and administrate the Canadian government policy on Indian treaties and reserves in the prairie region	5,000McGill, V.	Study of social impact of pipeline	21,986Roberts, A. B.	Reorganization planning	650Reilly, G. P.	Analysis of Mackenzie Valley pipeline inquiry	3,000Statistics Canada	Feasibility study on expanding the national labour force survey to include information on the Yukon, and associate costs.	16,365Davidson, D. A.	Political/constitutional development in the territories	2,000Woods Gordon & Co.	Study of Indian economic development fund to assess its effectiveness	98,000Laventhol & Harwath, Management Consultants	Percentage rental study-Hospitality industries in national parks	8,500A.R.A. Consultants	Research into the Indian housing program	23,920Crabbe, W. E.	Research for Financial management manual	16,484D.S.S.	Evaluation of the arts and crafts program	20,500Dockstader, J.	Review, analyse and report on arts and crafts program proposal	3,500Human Behavior Research Group	Assess the effect of programs on the social, political and economic environment of native people	20,000
November 8, 1978
Order Paper Questions
Name of Contractor	Description of Contract	Value of ContractMcDowall, A.	Financial research into the arts and crafts program	4,700Milne, C.	Study regarding Indian policy proposals	housing	2,750Quasar Systems	Systems specification for ment information system	manage-	29,625Roberts, C.	Review of the off-reserve program	housing	1,600Kubiski, W.	Studies in organizational analysis and development	25,000Southam Marketing Research Services	Report on the goals and objectives for interpretation and extension division, Parks Canada	3,960Network for Developing Organization Inc.	Analysis and planning of the objectives, national parks branch, Ottawa	360Stevenson & Kellog Ltd., Management Consultants	Animator for internal dialogue to review and strengthen organization, Parks Canada	7,000de Jong, Dick	Study regarding establishment of an evaluation division within the policy, research and evaluation branch	6,400Knox, R. H.	Advise on operational improvement in economic development branch	23,000Malouf, N.	Study re Indian education administration	10,000Quasar Systems	Investigation of systems in the Indian and Inuit affairs program	38,000Spence, A.	Special projects and studies for the assistant deputy minister, Indian and Inuit affairs program	20,000Woods Gordon & Co.	Report on project management	17,850
2. See 1(a) and (b) above.


Mr. Epp: From June 1, 1974 to date, what lawyers in the Constituency of Provencher were given work by the Department of Justice and what amount was each paid per year?


Mr. Claude-Andre Lachance (Parliamentary Secretary to Minister of Justice):: In so far as the legal agents of the Minister of Justice are concerned: None.


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


Some hon. Members:: Agreed.

[ Translation]


Yvon Pinard: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Is that agreed and so ordered?


Some hon. Members:: Agreed.


PRIVILEGE
Mr. Speaker:: Order please. Before calling orders of the day I should state that I said earlier I hoped to dispose of the very interesting question of privilege raised by the hon. member for Northumberland-Durham (Mr. Lawrence) no sooner than today. I have found it is not possible to bring together all of the considerations involved. Indeed, it is a question of privilege which touches upon six or seven very significant aspects of our procedure. I hope to be able to dispose of this matter tomorrow.



GOVERNMENT ORDERS


Mr. Joe Clark (Leader of the Opposition) moved:: That this House lacks confidence in the government because of its failure to bring better air service to Canadians through the implementation of a competitive air policy, and condemns the state takeover of Nordair.
He said: Mr. Speaker, I am pleased to note that the very flexible Minister of Transport (Mr. Lang) is in his place in the House-the Minister of Transport, the Minister of Justice and the minister in charge of the Wheat Board. Indeed, as I saw him give instruction to you today, sir, I thought perhaps he had aspirations in respect of your chair as well.


Some hon. Members:: Oh, oh!


An hon. Member:: A great guy.


Charles Joseph Clark: The purpose of this motion is quite straightforward, Mr. Speaker. What is quite remarkable about it is, that this motion appeared last night and I suppose several minutes afterwards we suddenly received a statement from the Minister of Transport and Minister of Justice, his first statement in some time about national air policy. I naturally would not suggest there was any relation at all between the minister's
November 8, 1978

choice of last night to announce some element of national air policy and, the fact that our motion was set down for debate today, just as I would not suggest there was any relationship at all between the fact that the government was condemning the program of restraint, that we had proposed and then began to adopt a pale imitation of it; or, indeed, any relationship at all between the fact that the Prime Minister (Mr. Trudeau), standing in this place not long ago, condemned the Kingston conference of myself and various premiers, and then at the first ministers' conference the other day proposed what he had condemned; or indeed any relationship at all between the likely conclusion in the budget to come down next week and, the proposal calling for deductibility of mortgage interest payments. Those are all, of course, simply remarkable coincidences.
We have in this statement of yesterday the latest in a series of quite desperate acts by this government, all leading away from the development of any kind of comprehensive national air policy upon which Canadians can count or upon which the airlines can count. I should say in passing, sir, that this is simply one more act of indifference, to use a mild word in this House; this policy statement was issued outside this House of Commons, instead of here where it should have been issued by the Minister of Transport and Minister of Justice speaking on motions. I know why he did not do that. He chose to go outside the House because he did not want to face questions here in parliament on the policy matter he was revealing. Nonetheless, this is an affront to this House and something which should not be indulged in, and it should not be the continuing practice of this government.
What we have here is not the first air policy of this government that has been brought down in an election atmosphere. I can recall another, as can my colleagues from Winnipeg, all of whom now sit on this side of the House. There were two members after the last election of the other side, but they are no longer there, and that is due in some measure to the fact that there was a promise made and deliberately broken in relation to the establishment of maintenance facilities at the Air Canada hangar there. Indeed, the government promised that the facility would be used for wide bodied aircraft, sir. One wide bodied aircraft showed up in that hangar, and that was on the day it was officially opened. Since then there has been nothing back of any width greater than the credibility gap between what this government says and what it does.
There are various elements I want to address in dealing with this country's air policy today. One element is overriding, and that is that we still have no coherent, long-range national air policy. I would hope that the minister will today at least do the House of Commons the honour of trying to explain his latest pirouette in the name of policy. I would like him to tell us, and I am pleased to see that he is taking note, the detailed nature of the consultations between his ministry and Air Canada before this policy was brought down. I suspect there was none, and unless the minister wants to let that suspicion stand on the record he will have to answer it by telling us precisely the
National Air Policy
nature and the detail of consultations with Air Canada relating to a matter which touches Air Canada directly.
We would like to know from the minister today, when he speaks to answer, the nature of the recent conversations between his officials, himself and representatives of Quebecair or of Eastern Provincial Airways, which are most directly affected by one element of the minister's statement in which he talked about the movement "towards the development of a smaller number of strong regional lines than are operating now."
The question we want an answer to is, who is going to absorb whom? What mergers is the government talking about? What has been discussed with the companies proposed to be merged, or is the government simply going to buy them all out-naturally not on a permanent basis, but just for a little while in order to sell them again, which appears to be the minister's program in respect of Nordair?
This government has frequently intruded into almost every other business in the country in the name, of course, of non-intervention-the policy announced by the Prime Minister the other day. It has now become involved in the airline business. I should say to the minister, if I can get his attention, that we would be particularly interested if he would tell us his plans and the plans of the government in regard to Quebecair. We would like to know particularly if it is Quebecair that is the favoured purchaser of all or of part of Nordair and, indeed, if this policy which was created and announced last night is designed for some reason which the House has not seen to serve some interests of Quebecair, or to meet some concerns that the Government of Canada might have in relation to that particular company. I hope the minister will be forthcoming in all of those particular matters.
I want to take in order some of the questions which arise here. First I want to deal with the very novel idea of the Minister of Transport and Minister of Justice, and presumably of his government since he occupies so many of its portfolios, that the best way for the Government of Canada to protect the private sector is for the government to buy an airline that members of the private sector themselves want to buy. The minister knows that Great Lakes, at least, was ready to match the Air Canada bid, and he knows there was at least one other private sector industry in the Hamilton area prepared to buy Nordair. He knows that these offers exist already and he does not have to wait or to shop around for somebody to buy what the government is buying. He knows these offers exist already.
I must say, sir, that only this government could pretend to protect the private sector by bidding against it. The minister says in his release that it is his objective to return Nordair to private ownership within a year. We in this House of Commons have heard that line before, sir.
In 1974 the then minister of industry, trade and commerce, who was I think also in orbit although perhaps not quite as high or as briefly as the present minister, told us that de Havilland and Canadair were being purchased by the govern-
926

November 8, 1978
National Air Policy
ment on an interim basis so that they could be resold to private investors. That was four years ago and there has been no action whatsoever on that undertaking. I feel very safe in predicting that as long as this government is in office there will be no action either to return Nordair to private ownership.
If it was the government's real intent to return Nordair to private ownership, it had a very simple, very direct course of action open to it. It could have ordered Air Canada to withdraw from the initial attempt to purchase control of that company and allow new, private owners to bid for its shares. After all, it was not exactly a fire sale in this case. The company has been a profitable carrier. There were at least two, and there may well have been more, private groups ready to bid for its shares.
Air Canada, acting with this government's blessing, did not act to save an airline, it acted to increase its share of the Canadian market and thereby to further restrict competition. The minister's action yesterday in putting Nordair into direct government ownership simply serves to make a bad situation worse. The government's action yesterday helps put its restraint program in the proper perspective. In the name of restraint it has been cutting out research projects and provincial programs. They have been aiming at programs where they know there will be very strong resistance, so that the velocity of the resistance will make it look like this government is in fact taking a strong stand in the name of restraint. Indeed, relating to the air industry, the government proposes to increase the taxes on Canadian passengers, but with all of this they still go out and buy an airline which they do not need and which does not need to be the subject of government spending.
I am sure that most Canadians will remember and contrast the statement by the Prime Minister on television in early August when he said he was going to reduce government intrusion into the private sector. Now, three months later, in the name of reducing intrusions into the private sector the government buys a private sector airline for which there were private sector purchasers.


An hon. Member:: That is called flexibility.


Charles Joseph Clark: My colleague says that is called flexibility. It is also called an absolute inability to keep its word to the Canadian people which sets in very clear context just how hollow and how much of a sham is the commitment by the government to restraint. Indeed, it underlines once again that this is a government which has very little respect for the partners in the Canadian economy or the Canadian community. This is a government whose instinct is to intervene and to attempt to control. We are talking about the air industry here today, but the interventionist attitude which has injured the air industry in Canada is the same attitude which has caused an atmosphere of conflict within this country, whether it is with the provinces, the private sector, voluntary groups or among ordinary Canadians.
This attitude on the part of the government corrupts the idea of government involvement through Crown corporations or other means in the private sector economy. It corrupts the

idea of the Crown corporation being established as a last resort. This is another classic case of the government moving into the private sector, not because it needs to-because there were other purchasers and alternatives-but simply because the Government of Canada wants to own another airline. They have said that they will divest themselves of it, as they said four years ago they would divest themselves of Canadair and de Havilland. Their word is as good today as it was four years ago, which is to say it is not worth the paper on which the minister has stated his intentions, as his colleague did some four years ago.
We on this side of the House understand, as this government very clearly does not, that there is a very real threat in terms of both cost and unfair competition when a government unnecessarily creates state-owned ventures that are not subject to the same kind of financial restraint as private industry. We understand, too, as this government obviously does not, the inherent conflict of interest in having a state-owned company competing with privately owned corporations in a field like transportation, where the government sets the rules and regulates so much of the activity. Indeed, there are occasions, as there have been in the past, when it makes sense for the government to establish Crown agencies or Crown corporations.
I am privileged to be the leader of a political party that in its past has had the courage to recognize that because the private sector could not meet particular needs it was essential for the public sector to move in. It also requires courage and imagination to recognize that there are many times when activities are best left to the private sector. This is clearly one of those circumstances.


An hon. Member:: Why?


Charles Joseph Clark: A member on the other side, I think a member who is interested in transportation issues, asks why. The answer to the question is quite simple. There were private sector purchasers available and therefore there was no need for the government to intervene.


An hon. Member:: What about Pacific Western Airlines?


Charles Joseph Clark: Another member has asked about Pacific Western Airlines. It is my understanding that the government involved with Pacific Western Airlines does intend to divest itself of that corporation. More to the point, there was a substantial difference between the acquisition of PWA and the acquisition that is proposed here of Nordair, and that is a matter to which I hope members on the government side will pay some attention.
I want to make our position very clear. On September 15 in Winnipeg I said that this party opposed the acquisition by Air Canada of Nordair. We oppose this acquisition at arm's length of Nordair by the Government of Canada, and as a government we are certainly going to do all that we can to reverse any takeover that is approved by this government. That remains our position today.


Some hon. Members:: Hear, hear!
November 8, 1978


Charles Joseph Clark: I would like to say a word about Air Canada in the context of the policies which this party supports with regard to the direct role of the state in the Canadian economy. There was justification, without question, for the initial creation of Air Canada, and there remains justification today especially in regard to the international air services and for maintaining a strong national flag carrier for Canada. This, however, is not a justification for stifling competition within the Canadian air industry to the serious detriment of private carriers and the people of Canada, who are the ones in the final analysis who will pay the real cost of expensive or inadequate service.
Air Canada is a mature and successful airline. It is one of Canada's major corporations with assets in excess of $1 billion. Just recently it reported nine-month profits of some $50 million. The company has excellent staff and high quality management, and it can stand on its own without the comfort blanket of excessive government protection. It does not need the Government of Canada to prop it up. What it does need, what regional carriers in this country need, and what third level carriers in this country need, is a government which establishes a clear and coherent policy framework in which all of the airlines of this country, all of the carriers of this country, all of the people who want to use air service in this country, can plan with some sense of clarity and certainty.
Because we respect Air Canada's ability to stand on its own feet in a competitive environment, it will be the policy of the Progressive Conservative government after the next election to expand and diversify the air services available to Canadians.
[ Translation]
That is something truly essential and important to the whole country. For instance, Quebeckers are right in complaining about the quality of air services. In the Lac-Saint-Jean area, for example, air service was not maintained on a continuing basis and schedules are no longer convenient since Air Canada cancelled its regular service two years ago now. Trois-Rivieres is not being serviced by any airline company although the demand is there. If we had a well coordinated national air transport policy those centres among others would be served by third-level carriers or existing regional carriers. However, you cannot plan services for Bagotville or Trois-Rivieres without considering the rest. You have to plan on the basis of national transportation systems.
The minister made the grandiose gesture last night of saying he has no objection to allowing the Canadian Transport Commission to consider extending Canadian Pacific Air routes east of Montreal. This sounds very strange coming from a minister who has delayed that very request by Canadian Pacific Air for at least two years, a minister who still refuses to face his responsibility-and it is his, not that of the Canadian Transport Commission-to lay ground rules for airline competition in this country. There are no ground rules now; there are none
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that touch regional air carriers and that gives those carriers a sense of confidence in planning to serve the communities and the people they want to serve.
The House may remember that in October, 1966, the then minister of transport, the Hon. J. W. Pickersgill, outlined the role that regional airlines would be permitted to play in Canada. Regionals would provide regular service to the north as well as operate local and regional routes that would complement the main trunk carriers. That 1966 policy envisaged, where appropriate, the transfer of routes operated by the mainline companies to regional airlines.
To date, the intent of that policy has been ignored. The mainline carriers have entrenched themselves into the role of regional carriers. Air Canada has been unwilling to give up its routes in southwestern and northern Ontario, where regionals should be operating under the government's 1966 policy. Regional carriers identified a need for trans-border flights to the United States as well as charters to warm weather locales in the southern United States and the Caribbean. Both of these services allowed regionals to use their aircraft during off peak periods.
However, part of this market has been turned over to United States competition as a result of a bilateral air agreement between Canada and the United States. This was a bilateral air agreement in which any of the gains that came to Canada came to the large carriers, the mainline companies, but the regionals fared very poorly, losing their share of a lucrative market without any compensating return.

I would now like to deal with the burden imposed by the great many regulations in the air industry. The Carter government made substantial progress when it came to abolishing unnecessary regulations in the air industry in the United States. That proved beneficial to all parties involved. For the first half of this year, the number of passengers traveling on U.S. airlines increased 16 per cent and Americans who could never afford to fly can now use that means of transportation if they want to.
Contrary to what the Government of Canada has been saying, stiffer competition strengthened rather than weakened the economic position of airlines in the U.S. Finally, as a result of stronger competition, profits will reach record levels this year despite reduced fares.
Mr. Speaker, let us compare that policy to help the industry and consumers with the old outdated protectionist approach of this government. This government stifled competition at the national level and prevented regional carriers from developing both within this country and in the area of chartered flights.
In spite of the promise made in this House by the Minister of Transport five years ago, he has yet to set out a policy for third-level carriers. As in anything else, the policy of the federal government is devoid of imagination, orientation, and fails to take Canada's potential into account.
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We intend to change that. A Progressive Conservative government will empower the Canadian Transport Commission to ensure safe and reliable air service for Canadians; it will not empower the CTC to stifle competition.
We will encourage more competition on major national routes, starting with CP Air's request to serve eastern Canada.
We will significantly increase the routes open to regional and third-level carriers. It makes sense to have major trunk routes served by national carriers; it makes no sense to allow them to dominate regional and local services. Our general approach will be that regional routes of up to 300 miles and turn-around routes of up to 500 miles will be reserved for regional and third-level carriers.
As a further step toward increased competition-so that Canadian consumers can enjoy the widest and most economic choice of air travel plans-we will loosen the totally unrealistic restrictions this government has placed on charter and other special package fares.
There is a basic element of Canadian air policy virtually neglected by this government and which we, as the government, will correct. I refer to the need for the closest possible integration between Canadian air services and Canadian aerospace manufacturing. This government has no policy to ensure that the market from an expanding Canadian air travel industry is available to Canadian aircraft manufacturers. We will have such a policy. We in this party, when it is our responsibility to form the government after the next election, will insist on such a policy on a priority basis.
One aspect of it will be to encourage the maximum use of STOL aircraft like the Dash-7 to service local routes. Expanded competition on such routes will expand that market. We will further support it-as recommended by the Air Industries Association-by assisting the development of short take-off-and-landing facilities at regional airports instead of wasting the taxpayers' money on more white elephants like Mirabel.
Those will be the major elements of our domestic air policy. It is a policy based upon competition, based upon the evidence that the role of the Government of Canada principally should be to set the rules and not to intrude automatically by reflex simply because government wants to control everything in the private sector.
It is quite clear that we have a long and admirable history of innovation and risk-taking by many people involved in the airline industry in this country. Recently I was in Gander, Newfoundland, with one of my colleagues. I had an opportunity denied most Canadians, because this government has sealed it off, to see the air museum at Gander airport. In passing, sir, it might be of interest to the House to know that the museum can be seen by foreign visitors to Canada, but unless one has a special pass or happens to be leader of the opposition, it is not seen by ordinary Canadians for some reason known only to this minister. The Government of Canada has sealed this museum of Canada's past from the eyes of Canadians present.

It was an interesting experience to go through some of the displays at Gander. By virtue of its location as the easternmost extension of this continent, Newfoundland was deeply involved in the earlier flights across the Atlantic. Much of the aviation history of this continent touched on that province and its coast. Looking at the displays I became aware again of the high qualities of innovation that existed through time in the Canadian airline industry and with the people associated with it. One becomes aware of the imagination, the willingness to face risks and to rise to the risks that exist in that industry on the part of the people associated with it.
Those of us who come from different regions of the country, certainly those of us who have a respect for the private sector of this country, know that Canadians involved in regional airlines, Canadians involved in private airlines and, indeed, many Canadians involved in the management of Air Canada, are themselves still seized with that sense of innovation, that ability to imagine, that ability to build. The problem is that they have been literally flying blind as an industry because there has not been any context of national air policy established by this government. That lack of policy has cost Canadians in terms of the fares they pay, in terms of the service they receive, and in terms of the possibilities that could exist in this country for Canadian airlines to take advantage of Canadian manufacturing.
That is a failure that lies squarely at the doorstep of this government. It is one of the policies we, as a new government, intend to change. It is a failure that this motion and this debate in the House of Commons today is designed to help draw to the attention of the Government of Canada and to the people of Canada so that they will know that they need not put up much longer with the incompetence and the continuing refusal to establish a context for national air policy which has been characteristic of this government and of this minister.


Some hon. Members:: Hear, hear!


Mr. McRae:: Mr. Speaker, I rise on a point of order. Would the Leader of the Opposition (Mr. Clark) accept a question?


Charles Joseph Clark: Certainly I will accept a question.


Paul Edmund McRae: Mr. Speaker, the Leader of the Opposition indicated in his speech that he saw some difficulty about and was opposed to the notion of Air Canada remaining in some points of northern Ontario. Is it the policy of the Leader of the Opposition to remove Air Canada service from North Bay, Sudbury, Sault Ste. Marie, Timmins and Thunder Bay? Because those are the only points where Air Canada is in contact with northern Ontario.


Charles Joseph Clark: Mr. Speaker, I must say that that question is in the character of the attempts to sow fear and indeed sow confusion and almost hatred among Canadians which has become so marked among members of the other side-
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-in both official languages, and perhaps particularly members from New Brunswick who speak from time to time in this House. But-

If I might reply directly to the question put by the hon. member, we are interested in providing the citizens of northern Ontario with a much wider mix of air services that will be available to them together with strong regional air carriers and strong local air carriers that will serve not only the large centres of northern Ontario, but also the smaller centres of northern Ontario. And that is clearly possible if, but only if, there is a change in the approach by government to the climate in which regional and third level carriers have to operate in this country. That is the change this party believes is essential now and to which we will give high priority when we are elected as the government.


Otto Emil Lang: Mr. Speaker, I am indebted to the hon. member for Fort William (Mr. McRae) for asking that question of the Leader of the Opposition (Mr. Clark). It is noted all around that the Leader of the Opposition did not answer the question. He did say during his remarks that he was in favour of Air Canada getting out of certain routes in northern Ontario and southwestern Ontario. It is now apparent from his refusal to answer the specific question that he is in favour of their getting out in general, but he will not be in favour of their getting out in any specific case. Community interest in maintaining service by Air Canada has very often restrained Air Canada from moving in the direction of giving over those services to the regionals, and many of these communities feel very strongly about retaining that particular link and service.
I noted that the Leader of the Opposition began in a manner that is fairly characteristic of him-and I would have to call it a in small-minded way-by discussing first of all the timing of our announcement. I would think cabinet procedures are well known to him. He might have calculated that the decision which was announced yesterday was indeed taken on Thursday in cabinet and that the announcement was made before I had any knowledge that this subject was chosen by him and his party for debate at this time.
The Leader of the Opposition will go on making points like that. Quite often he manages to persuade at least the press, and perhaps thereby some of the public, that certain things may be true when they have no basis in fact at all. I noticed the CBC decided yesterday to pick up that in some fashion our policy was really a complete steal from the policy of the Leader of the Opposition. I find it passing strange that he can both adopt that position on the one hand and criticize our policy vehemently on the other. He goes both ways. He tried the same thing by making reference today to the Kingston meeting he had with certain premiers and likened the events to a first ministers' conference.
In fact many of the substantial matters which in specific terms were contained in our proposals at the first ministers'
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conference referred back to proposals we had made in 1969, 1970 and 1971. The specific proposals on individual powers which might be transferred to the provinces were indeed new, and I think less than half of those had any relationship to things which the Leader of the Opposition has said. But the important thing, and the fundamental difference between the policy this government will continue to fight for and put in place and that of the Leader of the Opposition, is that the Leader of the Opposition believes in giving away important powers to the provinces which would prevent the federal government from operating in a Canadian economic context at all.


Some hon. Members:: Hear, hear!


Otto Emil Lang: In that he joins the premier of Alberta who believes that the Canadian government need not have the major economic and important power to assure freedom of trade and freedom of movement of people, and indeed even principles of equalization of opportunity which are so closely tied to financial equalization in this country.


An hon. Member:: That is not correct.


Otto Emil Lang: The premier of Alberta has taken that position. He is an outstanding separatist in taking that position and I am delighted to see that in recent days the papers in Calgary and Edmonton have taken him on specifically on that issue. I would hope now the Leader of the Opposition would see the sense of avoiding that particular policy and form of action.
The Leader of the Opposition also made some serious critical comments about the existence, still in Canadian ownership, of Canadair and de Havilland. Then he had the strange ability, later on in his remarks, to argue that we should have far more manufacturing ability in the air industry in this country than we do have. In fact, the stories of Canadair and de Havilland are the beginnings of great success stories. The Minister of Industry, Trade and Commerce (Mr. Horner) featured that in answers today as the Challenger begins to go into its tests.
Hon. members opposite amaze me with their lack of understanding of the development of an aircraft. They were so critical and amazed that the Minister of Industry, Trade and Commerce found it important that on its first test everthing had gone well. The aircraft had gone through an hour of tests and the opposition found that amusing. If they knew anything about the interesting challenges facing new aircraft and the importance of what this aircraft is starting to prove to the people who envisioned it and said could happen, they would not laugh in that way.
In fact, Canadair and de Havilland were a rather special case in that federal involvement in financing was essential even to maintain them before they were taken over and retired by the government. The question facing the government at that time was how much further we would go to help without taking on the equity ownership and control so that the eventual benefits which we thought would come could also be proved to the people of Canada. It is still our intention to do this when

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they have proved and established themselves and do not need that kind of federal help any more.
This kind of industry in the private sector would once again give full value to the Canadian people for what they have financed and developed. As a result of these enterprises and our various programs of government purchases and, indeed, as a result of insisting with regard to Air Canada that there be Canadian content and offset in Canadian purchases which are made, we have developed a much stronger and healthier industry in the whole area of aviation than ever existed before, at least for many years. Back in the days when the right hon. member for Prince Albert (Mr. Diefenbaker) was Prime Minister, a strong industry existed until he dealt it a near death blow at that time. It has now at last begun to recover.
The Leader of the Opposition spoke about the role of Air Canada and Canadian Pacific in this country. There is existing the oft-stated policy in relation to them as the mainline carriers in the country. These are statements which have stood the test of time and do not have to be modified and changed from day to day.
Air Canada has gradually had removed from it the special privileges and position in which it found itself under the original policy through which it came into being. It was the policy of this government which removed the monopoly position of Air Canada in relation to post office carriage. It removed the position of Air Canada before the Canadian Transport Commission and, through legislation adopted last year, made it an airline like other airlines in terms of most of these rules. Indeed, it was this government which saw the sense of gradually allowing Canadian Pacific more freedom and room to compete. Accordingly, last year the government gave CP the opportunity for taking a larger share of the growing market. It has for several years been considering the question of the new arrangement and the removal of restrictions, perhaps altogether or in a different way.
I have to say to the hon. member that in thinking that a completely competitive airline industry would be possible, that he would somehow benefit from having everything wide open, he is making a fundamental mistake about the nature of the problems which face the provision of regularly scheduled service efficiently, safely and at as reasonable a rate as possible. He simply fails to see the dangers that throwing the situation wide open would create. He looks south and says it is possible there. The Carter government is looking in this direction more and more. I advise the hon. member to wait and see what that experience may bring.
While we are affected by, and in some cases have to alter our own policies to reflect or react to, some of the policies adopted in the United States because of the continental nature of some of the markets, we have grave concern about what it may mean to the real provision of good, efficient and safe service in this country and cannot pretend that unregulated competition is possible.

The Leader of the Opposition asks us to move in that direction with regard to air policy. In the area of trucking it is easier to move because of the greater volume of traffic involved. The Carter administration has moved in that regime as well. The responsibility in Canada is that of the provinces. Do we find the Conservative governments with whom he likes to try to have an affinity moving to deregulate? He does not see that in Ontario. He does not see it except in one specific place in this country where it existed before that Conservative government came into power, and that is in Alberta.
In the case of air policy, it is necessary to combine competition and a significant degree of co-operation. The hon. member referred to the statements in 1966 of Mr. Pickersgill. In his statement setting out the basic role and place of the regional airlines, Mr. Pickersgill said there would not ordinarily be expected to be competition between the regionals and the mainline carriers, because indeed there would be serious problems with the regionals in trying to stand up to straight and direct competition.
What is needed, and what we have provided, is some assurance of co-operation as well as certain limited forms of competition where it is possible for both carriers to serve the same route. Even there we must remember the concern and warning of Mr. Pickersgill, that the Canadian Transport Commission must see to it that competition between the regionals and the mainline carriers is fair and reasonable in cases where they are on the same routes, because of the different position they are in.
We have therefore progressively moved to remove the advantages of Air Canada, to remove the restrictions from Canadian Pacific and to enlarge the scope of regional carriers. We helped quite directly in ensuring discussions last year between Air Canada and Eastern Provincial Airways, allowing for the exchange of certain routes between them as the policy of 1966 had intended. That was to the benefit of both airlines.
Air Canada is now making a profit. That is something that should be welcomed on all sides. Indeed, as long as Air Canada is competing in any way with airlines in the private sector, it is important that it be asked to achieve the same kind of profit level, which would be required in the private sector in terms of providing cash flow and return on investment so as to allow for the acquiring of new equipment and the ongoing operations of an airline.
I say to the Leader of the Opposition that it may be well if he restrained some of his colleagues at a particular point in time when they ask that we oppose a certain rate increase which Air Canada may be putting in place. Then they will be citing profits as a reason for not going ahead with that increase. I ask him to commit himself to the principle that until the profits arrive at a level that is adequate, so that if it were a private carrier it could attract further investment in order to re-equip and expand, he not support that kind of request from his colleagues. If he does that, we will arrive at a very important place indeed.
With relation to freeing restrictions on Canadian Pacific with regard to cross-country traffic, I have had one serious
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concern. That was to ensure that, as a result of competition, we did not move into a situation where extra capacity was put in place and, an attempt made to meet particular competition without concern for the convenience of the travelling public.
We do not want large numbers of empty seats being flown across this country. Those must invariably be flown at a cost to Canadians, either through the fares which are charged or a payment to the airlines in any way by the government. It is therefore our policy to move progressively toward an atmosphere of competition, in which other techniques are in place to ensure that over-capacity does not occur at the expense of the travelling Canadian public.
It has been one of my strongest drives to have airlines, regionals as well as mainlines, look at their capacity and not offer so much that in the end their profit position was worse and they needed help in some other way in order to provide service to the Canadian public.
In the case of the mainline carriers, we will be seeing a removal of the remaining restrictions that exist in terms of competition between them, but with the substitution of certain other restrictions, likely in the hands of the Canadian Transport Commission, to ensure that that competition does not do disservice to the travelling public in terms of higher costs and higher fares.
We have seen competition increase through the loosening of charter rules. Even before today, the Canadian Transport Commission had before it certain other proposals as to whether more should be done in that direction. Again, however, we do not believe that a wide open, unbridled situation with regard to charters is possible. That would mean a taking of the routes by charter service where that taking is profitable, and a failure to offer service in many other areas where service is required.
It is significant that the carriers have been speaking very kindly of me and of the changes in policy which have been coming about in relation to the opening up of our charter regulations to the extent we have. However, it is significant that when the charter proposers were before the Canadian Transport Commission a year ago, they proposed charter service on the routes that are easiest to handle, the Vancouver-Montreal, Vancouver-Toronto kinds of routes. They did not show any great interest in relation to Grande Prairie to Saskatoon and other places of like size throughout this country. It is important that we continue to have scheduled services, and that we protect sufficiently the mainline carriers and the regional and third level carriers so that service can be provided adequately.
In the case of the extension of CP and the possibility of their service into Halifax, I believe I heard the Leader of the Opposition say quite flatly that he would see to it that they extended service into that region. We rather more cautiously said we would remove a restriction to that happening but would not interfere with a function which I believe is very important, that of the Canadian Transport Commission to
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consider whether at a particular point in time this would be in the public interest. Before the Canadian Transport Commission one may hear from other carriers and the implications to them of having a third carrier on the routes. That question would be decided from the point of view of public interest before the commission where we could all be aware of the arguments and analyses and see the right decision arrived at.
In 1966 Mr. Pickersgill, and later other ministers, were able to contemplate a country in which five regional carriers would serve. With a growing boom in air travel it seemed for a while that this might be a sound and solid policy. It has appeared through the last several years, however, that there are significant challenges and difficulties for the regional carriers. Existing as five regional carriers attempting to supply very often jet service to the routes which are appropriate to their operations, and to which the Leader of the Opposition referred as though it was new, although it is the exact standard route analysis which was part of the policy these last many years, it has been difficult for the regionals with reasonable fares to obtain the necessary return on capital, thus to assure they could restructure and acquire new equipment as necessary.
A couple of years ago the same difficult circumstances faced Transair. We know, also, that Pacific Western Airlines, after a good deal of discussion with me, moved to acquire shares in Transair, looking toward the more effective operation of regional service in western Canada.
I may say, also, that some were surprised that at the same time I was moving in the House a bill whose effect was to change the Aeronautics Act to give us the chance to prevent provincial governments from acquiring airlines and air services, and at that point we did not object. We did not object because the structure of the new airline and the joint operation seemed to be a very useful one in terms of future service. As well we did not object because, in discussions 1 held with the premier and deputy premier of Alberta, they indicated to me that the long-term holding of controlling interests in that airline was not a necessary part of their philosophy and that they could progressively divest themselves of a lot, if not the greater part, of their interest in the airline. So Transair had its difficulties.
In various ways other regional carriers have been facing the problem of getting adequate returns which would assure that they could reinvest. A couple of years ago major shareholders in Nordair began to seek buyers. It was not easy for them to find a buyer at that time who would offer a satisfactory price even when measured in terms of the value of equipment that the airline owned. At that time it was partly my concern whether or not the airline would continue to operate at all and I did encourage Air Canada to take a direct interest in the possibility of acquiring those shares and assuring the future of Nordair.
It was that acquisition which was confirmed by the announcement yesterday and by the decision arrived at by cabinet last Thursday. At the same time the government was concerned about the public worry that the combination of ownership of Air Canada and Nordair would lead to a removal

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of competition in certain places where it has been possible between the two, and that it would possibly result in an even larger single airline with certain disadvantages such as at times of labour unrest and strikes. Therefore, we made clear yesterday our determination that Nordair would be operated separately, as the Canadian Transport Commission had recommended in its decision.
We do not, however, wish to remain the owners of that airline for long. In view of the number of policy questions which arise in trying to produce a restructuring of airlines in eastern Canada, it did seem appropriate that we play a more direct role in the ownership question itself. The fact of the matter is that in the days when the sale of these shares were first being discussed I began to work on the process of bringing the airlines in question together in an attempt to work toward a combination of actions-a merger or joint action-which could, in accordance with figures which have been analysed, produce a far better return on investment than is possible as long as they are operating separately. That had not succeeded and I had no way of knowing whether it would easily succeed if the purchase were thrown out and the question of ownership of the shares was up in the air and in doubt once more.
It is important to note, I think, that between the time that Air Canada first offered to purchase these shares in Nordair and the time of our final approval of that purchase by our decision last Thursday, the assets of the company had increased in value fairly significantly. It is true that this arose directly as a result of changes in the value of currency but nonetheless that was a significant factor in our decision to move forward with this acquisition and to having the airline in our hands to continue the process which was already far advanced of seeking out investors who might be able to operate these airlines in a joint fashion.
Yesterday I indicated my interest in seeing whether Great Lakes has an interest in this operation and certainly we will again be speaking to other regionals. There are Canadians who are interested in the economic, financial prospects of the airline in its merged form who would not have been interested in the operation of particular parts of it alone.
We will see regionals operating as efficiently as possible and therefore capable of providing as low fares as possible to the people in the eastern part of Canada which they serve. That is fundamental. The efficiency we seek is not efficiency for its own sake, but surely through that efficiency, through a better return on investment, it is possible for the fares to be lowered without the taxpayer having to intervene to pay for the acquisition of further equipment and the continuation of the line. That is the kind of intervention I would like most to avoid. That is what I see continuing to happen.
The Leader of the Opposition speaks of competition as his guideline in this area. And yet at every step of the way it is sensible to balance a reasonable amount of competition with a good deal of co-operation. It is essential that airline schedules mesh and that the regionals come together with mainline schedules so that passenger convenience is best served. It is important to have co-operative analysis of fare structure so

that both can live side by side and the sharing of the revenue when there is a link is fair and just. These will continue to be our guidelines in air policy. We will try to find as much avenue for competition as is possible.
We will try to provide service which is as good as possible and fares which are as low as possible. Through charter changes and the introduction of charter services, Air Canada and Canadian Pacific are now offering charter rates, throughout the season, on their regular services. That means they are offering them to Grande Prairie, Saskatoon and Timmins as well as simply to Vancouver and Toronto, which would have been the way if only charter lines had been offering this service. That is what we will continue to see. In other words, we will see strong management operating our airlines, competition where that is possible, co-operation where that is necessary, and a close watch through the Canadian Transport Commission on such activities which, if allowed under the name of competition, would lead to higher cost operation directly at the expense either of the taxpayer or of the travelling public.
Not only do we have in this country a good and solid policy with regard to airlines-one that has stood the test and needs modifications of a gentle, steady nature, not violent or abrupt ones-but we also have in this country service at prices which compare favourably to those anywhere else in the world, for travel both at home and abroad; and we have a quality of service on our main airlines which is second to none in the world and of which we can all be proud.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, we have heard two very interesting speeches indeed, at least interesting to my party. According to the official opposition, their position on the takeover is that it should be private enterprise today, and according to the government, as befits the time and the spirit of August 1, it should be private enterprise tomorrow. There is no difference in principle; the question is entirely one of time. The Tories would do fast now what the Liberals will put off, presumably at a cost to the public, to one year from now.
Normally I address my comments in such a debate first to the government because it is ultimately responsible for policy, but we have known for many months now that the government has abandoned any pretence at determining any policy itself; it takes it directly from the research staff of the Tory party or from the speeches of the Leader of the Opposition (Mr. Clark). So I want to begin with the case of the Leader of the Opposition. I must say that in listening to him I thought of the first prime minister of our country-


Some hon. Members:: Hear, hear!


John Edward Broadbent: I am not sure they will applaud when I conclude my observation, Mr. Speaker. I thought of the first prime minister of Canada because in the nineteenth century, to
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a Canadian Tory no idea was good unless it came from Great Britain. Now, to the twentieth century Tory no idea is good unless it comes from the United States. That is the gist of the Tory policy today. I suggest that Alberta is having more influence than normally on the Tory party. What functions for that country of more than 200 million souls to the south of us, with a set of very different historical circumstances, now dictates Tory policy, whether it is transportation or anything else.
However, I also thought of other Tory ideas when I heard the Leader of the Opposition. To have heard him speak you would never have thought that the Conservative party of Canada brought in Hydro as a public enterprise in Ontario, and you would never have thought that Bennett was the father of the central bank, the CBC and the Wheat Board. There was a time, I say in all seriousness, when the Conservative party of Canada did indeed recognize that, for a variety of historical reasons, the public sector was to be used not only as an inferior variant of the private sector but that it had a legitimate, important and independent role to play in the development of our country. Those days are gone, Mr. Speaker, because now for the Tories it is private enterprise all the way, as if the 100 years of history-including a good part of the history of the Conservative party-did not exist.
I listened with care to most of the speech of the Leader of the Opposition and I noted that there was no reference at all in it to the judgment which was handed down by the Canadian Transport Commission and to the argumentation which had been put forward by the very body which the motion put forward by the official opposition is calling into question. I find that, to say the least, passing strange. If you are going to deal with such an important and complex matter as transportation, it seems to me you should deal with the arguments that have been put forward in favour of the decision which you are opposing. However, I will return to that point in a minute. The reality is that the Conservative party is attacking the Air Canada takeover because it rejects holus-bolus any serious argument for the public sector in Canada.


Some hon. Members:: Hear, hear!


John Edward Broadbent: We should not be put off-I say that frankly to the Leader of the Opposition-by his passing comment that he seemed pleased to see Air Canada was making a profit, and he implied that the current Conservative policy presented no threat to Air Canada.
I want to quote the financial spokesman for the Conservative party, or at least one of their spokesmen because they vary from day to day. The hon. member for York-Simcoe (Mr. Stevens) is normally thought to be the Conservative party's financial spokesman. This is what he said about Air Canada, and I think the people of this country, especially in regions which depend on Air Canada, should keep these words in mind. I quote from page 6020 of Hansard of May 27, 1977. It reads:
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-when successive news reports indicated the minister was investigating means of turning over Air Canada to private hands, we thought this would be the logical place to begin a constructive diminution of government control.
If that does not mean phasing out Air Canada, I do not know what it means. But just in case it was not clear, the financial spokesman for the Conservative party of Canada stated, as reported in Hansard two pages further on:
I suggest it is time to stop counting and to start subtracting.
He is talking about public enterprises. He went on to say:
It is time to begin divesting ourselves of some of these Crown corporations, rather than creating new ones.
He referred specifically to Air Canada.


An hon. Member:: Shame.


John Edward Broadbent: So let us have no illusions about the Conservative party's position with regard to Air Canada because their financial spokesman, at least when he is speaking for the party, says they would like to get rid of it. The leader of the party, as is frequently the case, did not make his case clear at all. He made a passing reference to the possibility that the Tories would accept Air Canada. Let me emphasize that he did not say that, he made a passing reference to it, so the only explicit comment we have is from their financial spokesman, which is that they would get rid of Air Canada. That is where they stand.
I want to return to our arguments, which will be positive and in favour of Air Canada's action, but I cannot forgo this opportunity to make two central points. The Conservative party of Canada is now rejecting its own historical commitment to the independent need for public enterprise in certain sectors and is now trying to come down on both sides of the fence in this debate, pretending, on one hand, that it is for Air Canada, and on the other hand, that it is not. You cannot have it both ways.


Mr. Dionne (Northumberland-Miramichi):: You are right, for a change.


John Edward Broadbent: The Liberals are cheering. Now I am going to turn to them. If we think the Conservative party is presenting us with some problems in understanding where they really stand, what about the government of the day?


Mr. Woolliams:: I knew you would come to them.


John Edward Broadbent: As I said, until August 1 there was a pretence, if I understood the Liberals at all, that they did believe, perhaps reluctantly, in a mixed economy and that they would use public enterprise, if necessary, but not necessarily public enterprise, and they would grudgingly do certain things.
Certainly since August 1 the spirit of R. B. Bennett has drifted up from his grave and moved out not only into the shadow cabinet but right across the chamber to take over entirely the Government of Canada. It is privatization with a small "p" on the part of the Tories, but if Your Honour will excuse the expression, it is a big "P" when applied to the Government of Canada. We have no policy at all which
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indicates serious thought on the part of the government. It is responding to what it perceived to be an economic drift in the country which required them to move in a conservative direction. Holding to a principle, even if the principle is the government's particular version of a mixed economy, rather than abandoning any claim to a principle, accounts for the government's tumbling month after month in the Gallup poll.
The present position of the government on this issue demonstrates this reality better than anything else. What is the policy of the government? It has had an ongoing study for two years. It was my impression that the minister's department had finished the study, and that we would have the benefit of looking at it, but it has not been produced.
When the takeover bid by Air Canada in its attempt to buy control of Nordair was before the Canadian Transport Commission, did the Government of Canada make its view known? Did it state its views regarding competition in clear terms? Did it make a case for private versus public sector? Did it have a clear or coherent policy on regional carriers? Did it put any of these matters before the commission? No, the government was silent, because such action would have demonstrated leadership. We know the government has not had leadership for many years.
I should like to refer to the press release of the minister. It consists of one page containing two paragraphs. That is the new air transportion policy on the part of the Government of Canada. What is this policy? It boggles the mind to make any sense of it at all. The first point is that the government will allow Air Canada to purchase Nordair. A lot of people will nod their heads and say that it is a fine idea; others will say it is not. At least that is clear.
The second point of the Liberal policy is: after Air Canada buys Nordair, Air Canada must sell it immediately to the Government of Canada at a negotiated price. Presumably that will cost Canadian taxpayers more money. On the one hand, a Crown agency will buy it, but then the government will force that agency to sell it to the people of Canada via another agency, the Government of Canada, at a higher price.
The third point is: the government announces its intention to sell it back to the private sector within a year. Socialists are supposed to be the dialecticians, but we have been outdone on this one. It begins as a private enterprise; a Crown corporation is permitted to buy it; the government then purchases it from the Crown corporation; and then a year later it will be sold once again. Is that a brilliant policy? The would-be purchasers of this airline have been told a year in advance to sit around and wait. They have been told not to increase their bids, to keep their bids down, to put in the lowest possible bids because at the end of the year the government is committed to selling.
My question is not facetious or rhetorical. Is the government now saying that whatever price it receives at the end of the year from the private sector for this airline will be sufficient to sell Nordair? Surely Canadians have the right to know that. If the government does not receive a reasonable price or offer,

even in terms of its sense of management, which is bad enough, the government should say that it will not be selling it regardless of the price. But the minister said, "Yes, within a year it is going to go back to the private sector". If the government believes that it should be in the hands of the private sector, the whole thing should have been left alone in the first place, instead of going through the ridiculous process announced in the minister's one-page press release.
In the brief time I have remaining, I should like to state the position of my party on this issue. We do not have any qualms about saying that certain sectors of the Canadian economy ought to be publicly owned.


Some hon. Members:: Hear, hear!


John Edward Broadbent: We do not have any qualms in saying, along with two-thirds of the nations in western Europe, Australia, New Zealand and a good part of Latin America, that the public sector can make not simply contributions which the private sector has failed in, but independently worth-while contributions which are better in many cases than those offered by the private sector.
There are certain human activities which provide good cause for the government to move forward proudly on behalf of its people, rather than timidly and shamefacedly. Frankly we believe a good part of the transportation industry is one of these.
We approach the question of this takeover with a philosophical commitment that in the transportation sector, which requires much capital investment, it makes a lot of sense to have public enterprise.
The hon. Leader of the Opposition did not think it was worth-while to read the evidence before the Canadian Transport Commission. In reaching its decision, the CTC pointed out associated problems. Because I am only allowed 20 minutes to participate in this debate, I cannot go on at length. In fact, books have been written concerning what lies behind the commission's decision on this point. In part the findings and conclusions of the commission were as follows:
I am of the opinion that if the Canadian industry had been subject to the full forces of competition, that we would not have the air industry we have today with the sophisticated equipment and service that is provided to the Canadian public. It has only been as a result of the limitation of competition that the regionals have grown and extended their routes and acquired the pure jet equipment which now serves most areas of Canada.
If we are debating a complex matter seriously, we should pay attention to a commission which is based on expertise in looking at the experiences in other countries as well as our own before reaching a conclusion.
One conclusion in our country, as well as other countries around the world, pertaining to air transportation is that competition in such a capital intensive industry has not been an advantage to the public ultimately, but rather a disadvantage. Basically that is why my party is fully committed to Air Canada as a public enterprise. Through Air Canada, with all the difficulties which arise from time to time, we believe we can obtain the best benefit for Canadians.
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In the remaining minutes I should like to deal with the competition argument. Briefly I made reference to the fact that in such a complex activity as modern transportation, particularly air transportation, the diminution of competition makes a lot of sense if we are to obtain maximum benefit.
The hon. Leader of the Official Opposition has moved a motion which dealt with the area of competition. If he had read the ruling of the commission, he would have realized in most areas that Nordair and Air Canada are not competing at all. In fact, only two routes overlap in terms of air service. Even if competition is a central ingredient in an air transportation policy, one should remember that it is virtually absent from this particular case. On general and particular grounds, certainly the case of the official opposition falls down.
The absurd position of the government of buying today from the private sector and selling back tomorrow does not merit any more than two minutes of consideration.
In conclusion, I want to say we support the recommendation as originally handed down by the Air Transport Committee. I would point out to the House that in making its recommendation it underlined-and I could quote at length in support of this-that Air Canada was not given the right to destroy the subsidiary, it was not given the right to remove competition, and that the functions which are currently permitted Nordair by regulation will have to be maintained or it will have its permits taken away.
The concerns expressed by some people, I think genuinely, about regional services not being lived up to in terms of expectations, or charter services being reduced, are legitimate concerns. There is no doubt about that. But I want to suggest that they are misplaced in respect of this particular ruling, because the ruling makes it clear that Nordair itself cannot become a subsidiary of Air Canada, but that Nordair is expected to carry on with its traditional mandate.
I conclude by saying that the opposition case in this debate is bad, the government's case is worse, and I am proud to speak for my party in support of a recommendation handed down by a regulatory body established by the Government of Canada.
[ Translation]


Eudore Allard: Mr. Speaker, I have read the motion of the hon. Leader of the Opposition (Mr. Clark) and feel it is timely. Though I do not accept its tenor word for word, I feel it does allow us to draw the attention of Canadians to the lack of leadership in matters of transport policy in this country.
Mr. Speaker, first of all I should like to go back to the month of June 1975, when the then minister of transport and hon. member for Langelier, now a senator, revealed the prin-cipales that would guide the government in its transport policy. At that time, three main points emerged from his statement, namely accessibility, profitability and active government pre-
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dominance in the establishment of the transportation system in Canada. Mr. Speaker, I shall quote one of the basic principles found in the statement of the minister:
The transportation system should be accessible, equitable and efficient rather than economic, efficient and adequate.
That meant very simply that the government no longer relied on the mechanisms of competition to guarantee services to the people as a whole. The government intended to make of transportation a political tool of national scope rather than an instrument of passive support for private enterprise.
As usual, in the three years following this statement of intent, little was done except for the establishment of VIA Rail. I have always supported the VIA Rail project because the duplication and in many cases the multiplicity of railway passenger services was contributing to the deterioration of services and the putting of trains to another purpose. Because of the railroad policy of the government, passenger trains nearly suffered the same fate as our merchant marine. As a matter of fact, Mr. Speaker, I shall certainly have the opportunity to come back to the merchant marine in the next few weeks. Today, I shall limit my comments to the issue mentioned in the motion.
Everyone knows, Mr. Speaker, that air transport is vital for this country because of the great distances that separate our various regions. Many times last year I requested improvements to the utterly inadequate air services, especially in the Lower Gaspe area and the Magdalen Islands. Airports in Gaspe and the Magdalen Islands still do not have the facilities required for instrument landing. To come back to the specific case of Nordair which is mentioned in today's motion, this company serves northwest Quebec mostly and also operates chartered flights. Of course, it is a viable company. What I find reprehensible is the fact that the government simply went over the head of Quebec, which is the province most concerned by this takeover. Quebecair played an important role in the improvement of regional transport in Quebec by acquiring several small regional carriers which could provide only incomplete if not mediocre services.
As the former minister of transport stated in 1975, it has become necessary to integrate regional air services so that these services will be available to all centres in a region. The case of Nordair has been outstanding for a few years. Quebecair made an offer to buy it. Unfortunately, it did not have the required financial support; according to Quebecair, the price of shares was higher than their real value. The intentions of Air Canada certainly contributed to increasing the price of Nordair shares, and since Air Canada had the support of the federal government, it was able to take over the company.
Today we learn that Air Canada will give its shares back to the Canadian government which intends to reintegrate Nordair into the private sector later. My God, Mr. Speaker, I am really confused by the inconsistency of this government! Why all this bargaining and fiddling about to end up back on square
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one? We should ask ourselves the following question: In whose hands will Nordair finally land? I would like to know why there was no co-operation between the federal government and Quebec which has a thick file on Nordair. There had been contacts between Nordair management and Quebec government officials. However, they were not ready to take over Nordair. As concerns private enterprise, particularly Quebe-cair, it appealed the decision of the Canadian Transport Commission.
If the federal government really wants Nordair to stay in the hands of private enterprise, why did it contribute to eliminate Quebecair from the running? It is important that regional transportation in Canada be integrated on a provincial or interprovincial basis. The Maritimes are serviced by Eastern Provincial Airlines and western Canada by Pacific Western Airlines in which the government of Alberta has interests. If this integration is necessary as a result of a stronger demand and efficiency requirements, the federal government must support this reorganization instead of doing the contrary. If we decide to leave regional transportation to private enterprise, we should not authorize Air Canada to establish itself where it should not. Air Canada has mainly a transcontinental and international transportation role.
As concerns the return of Nordair to the private sector, I wonder on what basis it will be done. Are we going to sell back Nordair for peanuts at a loss of several million dollars to the taxpayers? In any case, I sincerely hope that the province of Quebec which is particularly concerned will not be forgotten when the time comes and that throughout the province of Quebec and the rest of our country we will get an air integrated and well administered transportation system.


The Acting Speaker (Mr. Turner):: The hon. member for Hamilton-Wentworth (Mr. Scott). I would like to point out that this is the hon. member's maiden speech.


Some hon. Members:: Hear, hear!


Mr. Geoff Scott (Hamilton-Wentworth):: Thank you, Mr. Speaker. May I, through you, sir, express my sincere thanks to hon. members on all sides of this House for their warm good wishes in welcoming me back to Parliament Hill. It is a high honour to be back here in my new capacity and to be speaking on behalf of the people of Hamilton-Wentworth.


Some hon. Members:: Hear, hear!


Geoffrey Douglas Scott: Everywhere I go these days people keep asking, "How does it feel to be sitting down here after watching the scene for so long from the press gallery?" I guess it is like jumping from the frying pan into the frying pan, but I must say that the greatest major difference that has struck me has involved you, sir. There is, unquestionably, a difference in viewing the Chair from below and in front

rather than from above and behind. One quickly acquires a sense of pre-eminence of your office from this vantage point, a backbench seat in the House of Commons. I assure you, sir, that I will try to demonstrate in this chamber the spirit of restrained behaviour accompanied with good humour which, as you know, has always been a hallmark of both members of parliament and members of the parliamentary press gallery.
Today's subject matter does not permit me to give the House a travelogue on the beauties of Hamilton-Wentworth riding, which I understand is a traditional feature of a member's maiden address. Besides, given the sprawling and diverse nature of my constituency, it would take the rest of the afternoon. I would, however, like to pay tribute to my young and dedicated predecessor, Sean O'Sullivan. He was a good MP for the people of Hamilton-Wentworth. He has now gone to a higher calling for which, as a Presbyterian, I am entirely ineligible.
What brings me close to home, both to my constituents and to this debate, sir, is Mount Hope airport, which lies within the newly defined boundary of Hamilton-Wentworth. Mount Hope, or Hamilton Civic Airport, has to be the most intensively studied airport in the country, and still there are questions and concerns on the part of many thousands of my constituents about this government's plans for it.
What will surely heighten concern about the future role of Mount Hope and raise many more questions is the federal government's non-solution concerning the takeover of Nordair. People in the Hamilton area have come to rely heavily on Nordair's first rate service in and out of Mount Hope airport. Since Air Canada indicated its interest in acquiring this highly successful and aggressive private company back in the early summer, there has been a very real concern that, with Nordair owned and controlled by the government airline but competing with Air Canada on southern Ontario routes, Nordair's service to Hamilton could be placed in jeopardy. Some reduction in the number of flights, and certainly in efficiency, is almost inevitable.
Yesterday's announcement by the Minister of Transport (Mr. Lang) that the government is indeed taking over Nordair, that hopefully a private buyer can be found within the year, but that Nordair might emerge in a "new form" after the government arranges things with other regional airlines, will come as cold comfort to those who have been thrown into confusion by this government's recent moves in Canada's airline industry.
I should point out that I have always viewed the government's acquisition of Nordair as potentially harmful to the interests of the area I have the honour to represent in this chamber, Mr. Speaker. Any further intrusion by this or any other government in the free marketplace goes against the better judgment of the people of Hamilton-Wentworth.
What makes the Nordair takeover difficult to understand is that this government set down its own clear policy guidelines in the late 1960s to leave Canada's regional air carriers in the hands of the private sector. The government has now contradicted its earlier position by allowing Air Canada to buy
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Nordair. That decision also goes against the government's own Combines Investigations Act, against the Consumers' Association of Canada, against the governments of Ontario and Quebec, against even a Canadian Transport Commissioner who flatly called the takeover "against the public interest."
This was after the Prime Minister (Mr. Trudeau) went on nation wide television pledging less government intrusion in the private sector. Now, in the face of high and heavy flak from all sides, the government is admitting it was a bad move at the outset. I can see a government becoming involved in this kind of venture if there is a groundswell of public opinion that it should do so, or if the company has a national security problem, or if the government is a buyer of last resort. None of these factors, to my knowledge, determined the Nordair purchase by Air Canada.
1 take similar exception to the takeover of Pacific Western Airlines by the government of Alberta, and particularly to PWA's takeover of Transair. In the Alberta government's case, as my leader has pointed out, there is a substantial difference; PWA was financially hard pressed and Transair even more so. Premier Lougheed is committed to reprivatizing PWA and to that extent the Minister of Transport is following in his footsteps.
In the case of Nordair, however, as my leader has already pointed out, there were other buyers in the private sector. I fail to see why the government had to put everyone through this confusion and uncertainty in the airline industry in the first place by authorizing the sale to Air Canada. For the first time in my memory I found myself agreeing with the hon. member for Oshawa-Whitby (Mr. Broadbent). Maybe it was because Air Canada wanted to flex its muscles as a separate Crown corporation, independent of Canadian National Railways. Certainly Air Canada cannot be blamed for seeing a good investment and grabbing it, along with a smart Nordair charter operation and northern expertise in the cargo field which is second to none.
I am well aware, Mr. Speaker, of the traditional restraint that should guide a new member in his maiden address, so I do not want to appear too critical of the government in what I know is a highly complex area. I get the feeling though that the government is running its domestic airline policy on a wing and a prayer; they are taking over the wings, now all they need is the other half.
There are many more questions raised by the minister's announcement that really concern me as a new member interested in the direction Canada's regional and national air policy is to take. While the government is buying time in order to straighten out its policy, what happens to those Nordair flights which are in a head-to-head or wing-tip to wing-tip competition with Air Canada? What will be the actual effect of this so-called competition? Will not direct service to Toronto from western Canada, or from Montreal, necessarily mean a reduction in the number of daily flights and a lessening of efficiency into and out of regional airports like Mount Hope?
What happens to Nordair's pilots, who want their seniority list amalgamated with Air Canada's list? Because Air Canada
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pilots fly a higher percentage of higher paying routes, does this mean the government will be paying Nordair pilots the 15 per cent more, as requested by the Canadian Airline Pilots' Association? Will this in turn not result in greater cost to the Canadian taxpayer in the long run?
What is behind the rumour raised by the hon. member for Peel-Dufferin-Simcoe (Mr. Milne) of a fourth runway and a third terminal building at Toronto International Airport, as reportedly recommended by Ministry of Transport planners? The minister is now calling the report "just another interdepartmental feasibility study." The result of that expansion could also have an impact on Nordair's Hamilton service.
If there is to be no expansion at Malton, and since the new Pickering airport has been indefinitely shelved, and since Toronto International will be thoroughly congested handling some 14 million passengers a year by 1980, what kind of spinoff of carriers might result in greater use of the regional airports? Because if Hamilton's civic airport-even with its $100 million expansion-may be expected to accommodate jumbo charter jets, then thousands of my constituents and I want to know about it.
So you can see, Mr. Speaker, that this government must come up with a sensible transportation policy. In my view it should leave the regional carriers to carry out their roles with government guidelines, not government ownership and control. And the government must decide on the kind of competition it will allow between CP Air and Air Canada on a transcontinental basis.
I am afraid that in view of the way this government has been proceeding lately with its patchwork, haphazard approach to our domestic airlines, some pretty firm policy directives will need to be forthcoming soon if the people are to have any confidence at all in the Department of Transport's air planners.
This whole exercise of the Nordair takeover-by a giant Crown-owned airline or by the Government of Canada itself- goes right to the heart of why 1 entered political life. More and more, I have become concerned with the extent of government involvement in the lives of Canadians. I do not believe in government takeover simply for the sake of government takeover. I believe that nothing functions like free competition. It was competition that built this country to the second highest standard of living in the world. It is the erosion of competition and government intervention in the marketplace that has contributed to reducing Canada's standard of living to seventh place. This Nordair takeover negates competition, Mr. Speaker, and I feel it is about time that the Government of Canada stopped interfering with the marketplace and with the lives of Canadians and got out of areas where it has no place.
In the area of regional air carriers which is under discussion here today, I want to assure the Minister of Transport again that I am aware of the highly complex nature of Canada's domestic airline policy. I know it takes time to integrate routes-national versus regional versus local services-always

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keeping in mind that the people who have to foot the bill for all this, whether they are paying fares in the air or paying taxes on the ground, are the consumers of Canada.
I also wish to serve notice on behalf of the people of Hamilton-Wentworth that there are answers we must get from this government, and I will be pressing the Minister of Transport for these answers in this House and in committee.
In closing, sir, may I pay tribute to my new and distinguished colleagues from the by-election wars of October 16. Several of the new members have launched their parliamentary careers with the tension and excitement I have experienced this afternoon. Good luck, gentlemen. And now, Mr. Speaker, we have work to do for Canada.


Some hon. Members:: Hear, hear!


Hon. Herb Gray (Windsor West):: Mr. Speaker, I should like to begin by congratulating the hon. member for Hamilton-Wentworth (Mr. Scott) on his election and on his maiden speech. I hope, however, that it will not be taken as an unfriendly or unkind remark if I say there are those on this side of the House who hope that one result of the next election will be that he will be continuing his work in this chamber but from a seat above and behind the Speaker.


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: Mr. Speaker, in opposing this motion I want to speak primarily of the government's decision on Nordair yesterday and about its present meaning and its implications for future government policy. I look on yesterday's decision as a victory for myself and for those who have opposed the Air Canada's takeover of Nordair, as I did from the time Air Canada's intentions first appeared in the press. The decision means success for my efforts and the efforts of groups like the Consumers' Association of Canada who did not want Air Canada to be able to direct the operation of Nordair.
The approach used by the government to bring this about is certainly novel and complex. It will allow the controlling shares of Nordair to be sold to Air Canada but, as I understand it, they will immediately be transferred to the government and the government will hold the shares with the objective of selling them to a non-government body within twelve months so that Nordair will continue as a private sector operator.
As I understand it, however, the twelve-month period, contrary to what was suggested by the leader of the New Democratic Party, is not a deadline; it is an objective. The government is not locked into selling at whatever price it offered within the 12-month period.
As I see it, the government is, in effect, acting as trustee of the controlling shares of Nordair while a satisfactory purchaser other than Air Canada is found for it and while a general restructuring and reorganization of regional air services in eastern Canada is worked out.
By proceeding in the manner announced yesterday the government has at one and the same time achieved two

important objectives that would not have been accomplished simply by rejecting the Canadian Transport Commission's decisions to allow Air Canada to take over Nordair. What are these objectives, Mr. Speaker? On the one hand, the group presently controlling Nordair will be able to sell their shares and get out of the picture. On the other hand, this would be done without the result being that Air Canada would be involved, directly or indirectly, in the operation of Nordair. The group presently controlling Nordair suggested that if they could not now sell their shares on the terms set out in their agreement with Air Canada, they would begin selling the planes used by Nordair since they could gain a very good price on world markets for aircraft.
I must say that I have always been skeptical about this. I say this since the operating licence awarded Nordair imposed on it legal obligations to provide scheduled services in the terms set out in the licence to the routes listed. I had always doubted that Nordair could simply abandon these routes without facing legal sanctions by the Canadian Transport Commission.
It appears clear, however, that the Nordair control group are not interested in having their capital involved in Nordair. If they are not fully interested in doing so, keeping them in place against their will for some period of time could mean some deterioration in the level of management, efficiency and quality of service offered by Nordair, plus a possible lack of aggressiveness in seeking and building additional business for it.
Also, simply rejecting the Air Canada-Nordair transaction would mean that efforts by private groups to buy Nordair would start from scratch. The Nordair control group could begin bargaining afresh, asking for different terms and conditions than those in their agreement with Air Canada. Time would be lost in ending any present uncertainty about Nor-dair's future, while leaving in place an ownership group not totally committed to its most active and efficient operation.
By having Air Canada carry out its existing agreement with Nordair shareholders, the transaction would be completed relatively soon on terms and conditions which the controlling shareholders are already committed to accept, and the government, in acquiring the shares immediately thereafter, could move more quickly than would otherwise be the case to carry out the sale of Nordair to other interested groups or another interested group in the private sector.
The government decision on Nordair and the announcement yesterday is part of the process to renew and update the present regional and national air carrier policy. In his press conference yesterday following his announcement of the Nordair decision the Minister of Transport (Mr. Lang) appeared to suggest he had in mind that as part of the development and implementation of the new policy there would be changes in the present pattern of service on some routes. He appeared to be saying that on some routes service may not be provided in future by both Air Canada and the regional carrier once the restructuring he has in mind is in place.
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I would like to remind the House and the minister of the principal reason for my opposition to the takeover of Air Canada by Nordair. It was this: I did not want to have people in the Windsor area and Canadians generally lose the benefit presently available to them through having both Air Canada and Nordair offer competitive service between Windsor, Hamilton, Ottawa and Montreal.
The leader of the New Democratic Party is quite mistaken in saying in his speech a few moments ago that Air Canada and Nordair do not compete except in a limited way. In fact, they compete in the main population corridor of Canada which is between Windsor and Montreal. Allowing the acquisition of Nordair by Air Canada could not in my view work in the best interests of the travelling public or the public generally.
This competition presently existing between Air Canada and Nordair over the past several years has meant better service for travellers. It has kept Air Canada on its toes. Nordair has broadened the range of scheduled flights between Windsor, Hamilton, Ottawa and Montreal and has offered fares in a number of cases lower than those of Air Canada. I have argued that if the takeover were allowed it would take away these benefits of competition and generally would not be in the best interests of the Canadian public. In my view, any restruct-ing the minister may have in mind must not mean any lessening of the present level of competitive air service presently available to the people of Windsor and the travelling public in that corridor. I will be following developments in this area closely and I will be opposing any moves which would mean a lessening of service presently offered in the area I have mentioned. I say this even though I commend the government for the effect of yesterday's decision, that of preventing Air Canada from being involved in the operation of Nordair.
Air Canada's president argued during the Canadian Transport Commission hearings that it would be possible for Nordair to operate independently of Air Canada if Air Canada bought control of it. But, at the same time, his evidence at the hearings indicated that this would not really be possible. He said that Air Canada would be appointing the board of directors of Nordair and would be giving directions to Nordair by way of guidelines for its operation. After the Canadian Transport Commission's decision, Air Canada agreed with its pilots to have a merged seniority list for both airlines, once Air Canada took Nordair over, and not the other way around, as the hon. member for Hamilton-Wentworth suggested. I think this further added to the scepticism of myself and many others about Nordair ever being able to operate truly independently of Air Canada if a takeover had taken place, especially in cases where they competed directly along the same routes, as they do between Windsor and Montreal. The government's evolving national and regional transport policies must ensure that to a greater extent than at present the benefits of competition are available to air travellers in Canada, and those travelling to and from our country.
National Air Policy
Achieving this through lessening regulation of the industry and allowing more competition, for example between Air Canada, Canadian Pacific and other carriers, would be welcome in my view in so far as it leads to Canadians being able to use a wider range of scheduled services at fares equivalent to those they would pay to fly the same distances in the United States and overseas.
We need to take steps to end situations in which it appears to cost Canadians less to fly on scheduled routes outside of Canada, sometimes even on Canadian carriers, than it does to fly within Canada unless people make reservations and pay fares many weeks in advance on a special charter class basis, that is, assuming such special charter class seats are available, which is not always the case. But at the same time deregulation should not proceed to the extent that it means a withdrawal of scheduled air services from certain communities because of their size or because of their distance from the core of Canadian population making these routes less profitable for air lines and other routes. There must be a balance in our national air policy between measures to maximize rates of return for airlines and the legitimate need for air service throughout our country.
The regulations should not mean simply providing additional competing scheduled service to some areas and its withdrawal from others. Our new policy as it is implemented must have this necessary degree of balance between competition and service. I would like to say, Mr. Speaker, even though I commend the government for its objective in its announcement yesterday-the objective of preventing Nordair from being taken over by Air Canada-that there is need for improvement in the method by which appeals to cabinet from decisions of the Canadian Transport Commission and other regulatory tribunals are carried out. At present there is uncertainty about the exact nature of the process involved and how it works. There is need, therefore, for the cabinet to set out at the very least a minimum set of rules by which it will consider itself bound to make that process more open and to ensure that members of the public involved in such appeals will always get a full and fair hearing.
A federal court judgment now under appeal suggests, I understand, that this is not necessary because of what the cabinet does in considering that an appeal from a decision by the Canadian Transport Commission is essentially political. In my view, however, there is as great a need for guidelines to ensure a fair hearing in appeals to cabinet as in other kinds of government decision making.
I recall not one word of complaint made by the official opposition in past months about the takeover of Pacific Western Airlines by the Alberta government. I hope that there is no double standard here. The Leader of the Opposition (Mr. Clark) suggested today that he and his party accepted the takeover of Pacific Western Airlines because the Alberta government intends to divest itself of it at some future date. But I recall no date being set for this by the Alberta government, not even as an objective to be met, as was done by the Minister of Transport in his Nordair announcement yesterday.

November 8, 1978
National Air Policy
The Leader of the Opposition gave us none today. Instead of divesting itself of Pacific Western Airlines, the Conservative government of Alberta has been extending its involvement in the private sector. Under Alberta ownership, not long ago Pacific Western Airlines went on to acquire Transair-not that this should not have happened under the circumstances, but it still does mean another form of extension of government ownership.


Mr. Hnatyshyn:: We do not have an air service in Saskatchewan.


Herbert Eser (Herb) Gray: I think Canadians could well be troubled at seeing the official opposition remaining silent at a time when a Conservative provincial government gets involved in the air travel industry and, also opposes decisions made by the federal government that involve efforts on a national basis in the interests of all Canadians. After all, much of the past history and future of Canada are based on the development of its transportation systems.
This provided a reason, one important reason, for the regions of Canada coming together as one country in 1867 and afterwards. Transportation systems on a national basis are essential strands in the fabric holding this country together. The expertise of Canadians in transportation provides one of the key areas for the industrial strategy we need to make our economy more innovative and more competitive in domestic and international markets. The valuable and useful transportation policies we have had in the past, the necessity and the ability to improve them to meet the needs of Canada today and tomorrow show us why we must continue to have a strong federal government, which is not just one out of 11 governments within the land mass called Canada, but instead is a strong national government working in the interests of all the people of this country as Canadians.


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: To conclude, the opposition motion, as explained by the Leader of the Opposition, conflicts with this essential objective for this country and its people. Therefore, I say it should not be supported. We should defeat it and go on to put into effect policies maintaining a strong central government, one which responds to the challenges and potential of this country and its people.
U)


Mr. Thomas Siddon (Burnaby-Richmond-Delta):: Mr. Speaker, I count it a great privilege to address this House today, sparsely populated as it is. I had hoped the minister would be here to hear my remarks because I have some things to say to him. It gives me great pleasure to be here together with the Leader of the Opposition (Mr. Clark) and with my highly respected colleague from Hamilton-Wentworth (Mr. Scott), and to speak in support of the motion before the House.
This motion of non-confidence cites a failure by government members opposite, a failure to implement a competitive air

transportation policy which recognizes the legitimate and rightful aspirations of our private sector airlines. Indeed, this motion indicts the government for its repeated refusal to pay more than lip service to the common-sense principle that private sector airlines be allowed far greater freedom to compete with Air Canada. To be more specific, we believe that privately financed airlines should be entitled to a much greater share of the air transportation business in Canada, and that future growth must be directed almost entirely toward these privately-owned industries.
Today I will discuss the long and frustrating struggle of CP Air, formerly known as Canadian Pacific Airlines, which, as members know, is Canada's only privately-owned international flag carrier. In spite of its outstanding record of service to Canadians for more than 36 years, CP Air is restricted today to only one third the service volume of its major competitor, the government-owned Air Canada.
These unfair and inequitable policies of discrimination against private airlines such as CP Air must be laid squarely at the feet of the present Minister of Transport (Mr. Lang) and his predecessor, Mr. Marchand. These ministers have, since 1973, demonstrated a remarkable dexterity. On the one hand, the ministers have repeatedly announced new initiatives which created the appearance of favouring CP Air's case for greater access to air routes.
On the other hand, and in each case, these same Ministers of Transport have reversed their earlier public commitments by giving approval to CTC recommendations and policies which were highly favourable to Air Canada and generally detrimental to the future of CP Air. The record bears close examination on this score and I intend to return to this point later to cite specific instances.
Mr. Speaker, as this occasion might be deemed my "maiden speech" in this House-I do not feel much like a maiden at the moment, but I will not go into the technical details of that-I beg your indulgence to allow me to digress for a few moments. It is certainly a great honour and a great obligation to be elected to this House as the representative of more than many thousands of people in the British Columbia riding of Burna-by-Richmond-Delta. I look forward to a healthy and productive fellowship with all members of this House and intend to conduct myself with diligence, decency and dignity in the prosecution of my duties here.
However, it would be remiss of me if I did not underscore the nature of my mandate for the next few months. I have been elected to bring the strong feelings of my constituents to bear on the deliberations of this government during its final days in office. I have been elected to help reveal the ineptitude, the inefficiency, and the callousness exhibited by the present administration during its ten years of dominance over this House.
The people of my riding have spoken, as did many other Canadians in at least ten ridings across this nation on October 16. Canadians are demanding a return to integrity and efficiency in the management of Canada's economy and of our human and natural resources. Canadians are fed up with this
November 8, 1978

rudderless, bankrupt government. They are fed up with a persistent erosion of individual rights and freedoms by an increasingly authoritarian, centralist power. They are fed up with socialistic over-regulation of the private sector, excessive taxation, and irrelevant, wasteful spending from the public purse, a purse which is now empty save for some staggering IOUs. They are frightened by a growing tendency for a guilty government to cover its tail in secrecy, by a breakdown in parliamentary traditions, and by a dwindling lack of optimism in the future of this country. My constituents are frustrated with a government run by back-room empire-building bureaucrats who have had their job security guaranteed by decades of Liberal dominance in Ottawa, a dominance which attaches very little importance to the problems and aspirations of western Canadians.
The people of Canada spoke out on October 16. They are calling for new leadership from a new national government. They want leadership which reflects the hopes and dreams of all Canadians, not just a narrow few. They want relief from the burden of excessive taxation, over regulation and regimentation which has so stifled the independent spirit of Canadians these past ten years under the leadership of the present Prime Minister (Mr. Trudeau). They want an elimination of waste, bureaucratic red tape and palatial extravagance as practised by the present government. Make no mistake about it; there is only one political philosophy which recognizes that productivity and prosperity can only be achieved by hard-working individuals, freed of the heavy hand of government. There is only one national leader today who can build a team to implement that philosophy, indeed who has built a team to implement that philosophy.


Some hon. Members:: Hear, hear!


Thomas Edward Siddon: 1 look forward to serving with that leader, as a member of a new government, in a new era for Canada.
Thank you for your indulgence, Mr. Speaker. The point I was making was that the October 16 indictment, the appallingly weak record of this government, is reason enough for members present to support the motion of non-confidence which is before this Elouse. Elowever, I wish now to return to the question of a more competitive air policy, a concept which has been denied to Canada's privately-owned airlines for far too long.
I submit that if Canadian airlines had greater access to competition with Air Canada, if Air Canada would stop growing at a faster rate than any other Canadian airline, indeed if Air Canada would consider the possibility of zero growth for a while, we would have far less trouble and conflict among the privately-owned regional and third-level air carriers. We would not have shutdowns, lay-offs or squabbles with Time Airways, Transair, PW Air, BC Airlines, West Coast Air, Great Lakes Airways, Quebecair, Eastern Provincial Airways, Nordair and all the rest. These Canadian airlines would have more room for growth and more opportunity to flourish. These private airlines must already operate with greater efficiency than Air Canada, not having the benefit of the public
National Air Policy
purse to bail them out, as was the case with the recent recapitalization of Air Canada to the tune of about $1 billion.
I turn now to CP Air and place it in special focus for two reasons. First, CP Air has maintained its home base of operations for many years on Sea Island, in the municipality of Richmond, a part of my riding. In 1978, CP Air will pump more than $280 million into the B.C. economy. Of this, $106 million will be the payroll of CP Air employees in the Van-couver-Richmond area. These persons account for 4,400 of the total work force of 7,100 people employed by the CP Air system, which spans five continents. CP Air also makes a significant contribution to local property taxes raised by the municipality of Richmond.
Secondly, Mr. Speaker, CP Air is a spirited industry, built on the dreams of the late Grant McConachie, one of Canada's bush-flying pioneers. There is a family-like quality among the employees of CP Air. At all levels of responsibility there is a high degree of mutual support, a pre-occupation with excellence of service, and an instinct for corporate survival on the part of everyone who works for the airline. Would that the same could be said about the government airline. Air Canada.
As I indicated earlier, CP Air has had its share of false optimism from the present Minister of Transport, and his predecessor, Senator Marchand. Now the minister has tried it yet again, in his press release of yesterday, November 7, wherein the minister stated, and I quote:
The government is considering the manner in which current restrictions on CP Air Limited should be eased and how CP Air and Air Canada, along with regional airlines and Wardair, a major charter operator, may continue to be strengthened as our major airline operators in Canada and abroad.
Such a statement probably sounds impressive to the average voter, at whom the minister's press release is obviously aimed. However, in the eyes of private sector airlines these statements are little more than meaningless, hollow, baffle-gab. They have heard the song before somewhere, and it usually means "watch out, there's trouble coming!"
Experience has taught the private airlines that a one night stand with the Minister of Transport generally leaves nothing more than a headache the morning after. I would like to elaborate, Mr. Speaker. In its international aviation policy of 1965-66, the government clearly established the right of CP Air to serve the low volume, long range routes to the Pacific rim nations-Asia, Australia and New Zealand-southern and southeast Europe and South America. To Air Canada were assigned the more lucrative routes to the United Kingdom, western, northern and eastern Europe and the Caribbean. Subsequently, CP Air found a way to make many of its marginal routes productive.
Then in a major statement on air policy in November of 1973, the minister at that time, Mr. Marchand, said:
While Air Canada remains the pre-eminent carrier in terms of its very significant domestic role as well as its international role, there is room for a substantial expansion of the second, privately-owned airline.

November 8, 1978
National Air Policy
Hon. members should remember those words "there is room for a substantial expansion of the second, privately-owned airline".
As part and parcel of this 1973 air policy the minister then proceeded to reassign many areas formerly in CP Air's territory to Air Canada. Thus, Air Canada picked up access to Venezuela, Colombia, the former Guianas, Yugoslavia, Lebanon, India and Pakistan as well as popular destinations in Southeast Asia such as Hong Kong. Together with Brazil, these were reassigned to be serviced either by Air Canada or CP Air, or both. All these destinations had formerly been the exclusive right of CP Air and many had been developed successfully into paying ventures. The 1973 policy also assigned all of Africa to Air Canada with the exception of a few sparsely populated North African countries which were cast off to CP Air. So much for CP Air's share of Air Canada's world.
In his 1973 policy statement, the former transport minister, Mr. Marchand, also stated:
This transcontinental policy, favouring 75 per cent pre-eminence by Air Canada, is basically to be retained although I have asked for a report on the feasibility of relaxing certain restrictions on CP operations which now oblige them to originate and terminate all flights in Vancouver and Montreal.
Some five years have now passed, Mr. Speaker, but that promised report has never reached this House. CP Air is still required to turn around its transcontinental flights at Vancouver and Montreal resulting in sections of some flights being forced to operate at times when the public does not want to travel. Because of government interference, CP Air is unable to provide a completely competitive product to the travelling public. Indeed, CP Air has to absorb the costs of this inefficiency against its operating margin, all because of this redicu-lous government regulation.
What would be the practical solution to this turnaround problem? To use the words of Mr. H. D. Cameron, a vicepresident at CP Air, it would be-
-to have the same type of licence as Air Canada: all their Canadian points are licensed without restrictions against turning flights around at any point.
CP Air has repeatedly attempted to obtain such a consolidated licence which would serve to integrate several of the point to point domestic licences the airline has obtained over the years.
On June 28, 1977 the present minister was quoted in a press release as saying:
The government will have no objection to consolidating all CP Air services in Canada under one licence to allow it to operate flights between any two points named in the consolidatd licence.
Well, Mr. Speaker, CP Air subsequently made formal application for such a licence and the request was turned down. So much for the public commitment by the Minister of Transport.
Perhaps the most incredible injustice of all occurred as a result of the Canada-U.S. air agreement of 1974. In his 1973 policy statement the minister of transport announced he would "encourage more co-operation between CP Air and Air Canada in the context of benefits to Canada." I ask members
to listen carefully to one example of such co-operation as described by the president of CP Air, Mr. Ian Gray, in his recent address to the Men's Canada Club of Ottawa:
We recognize that it has been government policy to assure the pre-eminence of Air Canada. But in the case of the allocation of the new trans-border air routes as a result of the Canada-U.S. air agreement of 1974 we believe there was a serious miscarriage of justice.
Both carriers had to make costly concessions in the form of new competition from U.S. carriers as part of the agreement. It was understood that each of the two Canadian carriers would be compensated proportionately in the award of the new routes. Certainly, few anticipated that the division would be anything less than the 25/75 ratio which exists between CP Air and Air Canada on the transcon route. To our astonishment and chagrin, however, Air Canada was handed 11 of the 12 non-regional type trans-border routes and CP Air got only one-Vancouver to Los Angeles.
Mr. Gray of CP Air went on to state:
Air Canada was assigned Montreal-Toronto-San Francisco giving them an additional competitive entry into the Pacific rim market and further encouraging the flow of Canadian traffic across the Pacific by means of inter-line connections with foreign carriers to the detriment of the Canadian economy.
Also damaging to us was the award to Air Canada of direct services from Edmonton and Calgary to San Francisco and Los Angeles. This has the effect of diverting substantial traffic from our services to California.
Such decisions are certainly not in the national interest. I understand that Air Canada is now actively promoting Pacific Rim travel packages from Eastern Canadian points to the Orient and Australia via Los Angeles and San Francisco. Air Canada flies the 20 per cent portion across North America while various foreign air lines fly the remaining 80 per cent portion across the Pacific. What does this do for Far-Eastern tours operated by CP Air out of Vancouver? Indeed, what does such foolishness do for the Canadian economy generally?
I could go on and on, Mr. Speaker, giving examples of questionable commitments by the Minister of Transport. However, I will close with just two more bafflegab utterings by the hon. gentleman. On June 28, 1977, he said:
CP Air is currently allowed 25 per cent of the trans-continental market capacity between Vancouver and Montreal and while this base ratio will be continued for current capacity the airline will be allowed a slight increase through a larger share of growth in traffic to 35 per cent in 1978 and 45 per cent in 1979.
This statement does not say what it appears to say. It does not make any commitment to increasing Canadian Pacific's share to 35 per cent or 45 per cent of the total pie. Given a fairly healthy rate of air traffic growth at 4 per cent per year, the minister's statement merely allows for an increase in CP Air's share of the transcontinental market capacity to about 28 per cent by the end of 1979. My recommendation would be that CP Air should enjoy 100 per cent of the growth on transcontinental routes each year for the next few years until it has achieved an equitable 50 per cent of the trans-continental service. We could then begin to talk about true competition between our two flag-carrying national airlines.
On a final note, Mr. Speaker, I refer to yesterday's press release by the Minister of Transport in which he announced that the government "has no objection to CP Air applying to the Canadian Transport Commission for permission to operate into the Atlantic provinces in conformity with the CTC's regulatory requirements." The truth of the matter is this: CP

November 8, 1978

Air has requested the minister's permission for access to Atlantic Canada on a number of occasions during the past two years. Competitive service is justified now between Vancouver and Halifax via Toronto. The applications have been put in for some months. What we have here, as so aptly put in a recent edition of the Halifax Chronicle-Herald, is a case of "Too Lang a delay".


An hon. Member:: Oh!


Thomas Edward Siddon: To sum up, Mr. Speaker, we hope this House will tell the government what it thinks about its creeping socialistic takeover of private sector industries. I appeal to members on the opposite side of the House who truly believe in the principle of private enterprise to join with us today in support of this motion of non-confidence in this most incapable government.


Mr. Charles Lapointe (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, thank you for allowing me to speak at this time. Having heard the Leader of the Opposition (Mr. Clark) and a few members of his party who spoke on the motion, 1 admit that we could easily be led to believe that they are arriving today from some unknown planet and that they have never opened a Canadian history book. All we heard, Mr. Speaker, are the words competition and private enterprise as if it were a cure-all, as if they did not know that Canada-the second largest country in the world-is sparsely populated and without state intervention as far as air services are concerned, hundreds of communities in our country would be without them.
I wonder, Mr. Speaker, how the Leader of the Opposition sees our country. He voices approval at Alberta's purchase of an airline, but is suddenly shocked because we have a successful national airline, Air Canada, and because the government buys a regional carrier on behalf of Canadians. Why should we be shocked, Mr. Speaker, because Canadians are the owners of air lines? In that respect I think I share the view of the leader of the New Democratic Party (Mr. Broadbent) who feels that we do not have to be ashamed because we have spent public funds to provide essential services for Canadians scattered throughout the country. And if we take a look at the way things are done in several other countries, be it in France, in Italy, in Germany, in Switzerland or in Australia, we can see that these countries do not hesitate to have only one national airline responsible for both domestic and international services. We can see, therefore, that we should not hesitate to do our utmost to protect Air Canada and other regional air carriers in Canada.
In his speech, the Leader of the Opposition said that it does not make any sense that national carriers should take over the regional markets; he also complained about the fact that Air Canada has flown right out of Bagotville. Mr. Speaker, I
National Air Policy
cannot think of a more obvious contradiction. When one of my colleagues asked him whether he thought Air Canada should abandon the service in northern Ontario, for instance North Bay, all he could say was that he did not know if it was better to maintain competition with local, regional, third- or fourth-level carriers, but as he mentioned in his speech he did not want to commit himself and say whether Air Canada or any national airline should withdraw from regional markets.
He also said in his speech that if he were to take office he would develop a whole new policy involving the utilization of the short take-off and landing aircraft. He probably took his ideas from the report published by the Department of Transport under this minister on the future utilization of the STOL aircraft between Toronto, Ottawa, Montreal and, eventually, Quebec city and Windsor. He also said in his lengthy speech in support of his motion of non-confidence in the government that once in office he would set up a policy governing chartered flights, as if he was not aware that last spring this government, at the suggestion of the Minister of Transport, set up a chartered flight policy in Canada which is most advantageous for Canadian people who want to visit their country from east to west.
Mr. Speaker, commenting on the takeover by the government of Canada of Nordair shares, the hon. member for Rimouski (Mr. Allard) said that we wanted to cut the ground from under Quebecair's feet. I think this is the rrcst frivolous allegation made during the debate this afternoon, because we know very well that Quebecair made no offer for the purchase of Nordair when the company decided to sell.
Mr. Speaker, in light of this debate, I think it is important to have an idea of what kind of country we want. Do we think that by opening all valves on behalf of sacrosanct competition and private enterprise we shall eventually have ten or fifteen airlines, all the while applauding any province anxious to buy its own airline and forgetting the national interest, Mr. Speaker, which, I believe, should override all regional interests?
Mr. Speaker, I would like to state clearly and unequivocally that Nordair will remain a regional carrier and that, in the next twelve months, when we will be trying to find a better way of ensuring a coalition of regional carriers in the east, we will be able to maintain all air routes now served by this airline. We are trying, through this measure, to strengthen in some way the position of regional air carriers in eastern Canada. We are considering some changes at the regional as well as the national level. By strenghtening the activity of regional air carriers, we are hoping to improve service as well as to increase competition between carriers. This must be achieved, Mr. Speaker, without the participation of the government and of Nordair's management and operation. What the government would want to see is some form of regional merger to improve commercial operations on a greater number of routes in eastern Canada.

November 8, 1978
National Air Policy
When it comes to merging, eastern Canada airlines such as Quebecair, Great Lakes and Eastern Provincial Airways immediately come to mind. However, one must not exclude any other group which would eventually be interested in purchasing the shares now held by government. Although the government now owns these shares, it must be pointed out that the company will continue under the present management team. For example, the president, Mr. Lefran<jois, will not quit. Quite the contrary, during this interim period the management and the operation of the company will continue as they were in the past. Taking over the financial aspects of Nordair for the next twelve months will enable the government to ensure the funding and merging of regional carriers. Quite obviously, too much dissipation of efforts on a regional basis will not give good results. By acquiring Nordair, the government takes advantage of an excellent opportunity to review the whole network of airlines in eastern Canada, on a current as well as future operational basis.
In reorganizing regional air transportation, I do not see any problem in there being both competition and co-operation between regional and national carriers. So there can be competition for routes and co-operation with regard to schedules, the main objective still being to provide an efficient service at a reasonable cost. Mr. Speaker, last week I had the pleasure of a discussing this problem rather specifically with representatives of the Miramichi economic society and representatives from Chatham who complained for instance of a lack of co-ordination between EPA schedules on flights between Chatham and Fredericton and asked for a connecting Air Canada flight to Montreal. So I think there is much room for greater co-operation among airlines and for competition.
Mr. Speaker, there is another thing I want to point out and which the Leader of the Opposition (Mr. Clark) mentioned in his speech, namely his shocked attitude when he spoke about Canadair and de Havilland operations. One might have thought the Leader of the Opposition was jealous of Cana-dair's unprecedented success, and I would have liked him to say to the 500 Canadair skilled workers and technicians that, in his opinion, it was high time this great state-owned and highly successful corporation be handed over to the private sector. He forgot to mention also the role of the government in the expansion of the Fleet company in southern Ontario which manufactures parts for long range patrol aircraft and how, as a result of government intervention, the number of employees has gone from 200 to 1,000 within 18 months.
To want to sacrifice everything for the sake of free enterprise and competition in this country is, as I said earlier, to disregard the entire history of this country which was first developed, if we go back to the beginning of the railways, thanks to the CNR and also, of course, because the fabric of
our history could be protected precisely by keeping a strong government hand in business while at the same time promoting a free enterprise system which could also make profits.
So I think that the motion before us today should be unequivocally rejected by all members of this House.
I think we picked up today in the statement of the hon. Leader of the Official Opposition (Mr. Clark) the most obvious contradiction that could be expected from a party which wrongly hopes-and very much so, Mr. Speaker-to replace us. On the one hand they argue that national airlines should not fly regional routes, but on the other hand they complain about the fact that national airlines no longer serve cities such as Bagotville and they are unable to say whether the national airlines or rather, in this case, Air Canada, will continue to operate in northern Ontario. Mr. Speaker, I do not think that by talking on both sides of the fence, as did the Leader of the Opposition today, we will succeed in setting up sensible guidelines in the field of air transportation.
The present policy of the government is to continue to have two main regional carriers and two main-


The Acting Speaker (Mr. Ethier):: Order, please. It being 5.45 p.m. it is my duty to interrupt proceedings and to put forthwith every question necessary to dispose of the supply proceedings now before the House under the provisions of Standing Order 58(9).
Therefore, the question is on the motion of Mr. Clark. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Carried.


Some hon. Members:: No.


The Acting Speaker (Mr. Ethier):: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


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


Mr. Speaker:: I therefore declare the motion defeated.
It being after six o'clock, this House stands adjourned until tomorrow at two o'clock.
At 6.15 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, November 9, 1978