1978-04-20

ROUTINE PROCEEDINGS


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I rise on a matter of great urgency and pressing necessity. Yesterday the House of Commons unanimously concurred in the fourth report of the Standing Joint Committee on Regulations and Other Statutory Instruments, declaring that the raising of postal rates other than by amendments to the Post Office Act is invalid. Inasmuch as the joint committee is the watchdog of the rights of parliament, I move, seconded by the hon. member for Brandon-Souris (Mr. Dinsdale):
That the House direct the Postmaster General to obey the will of parliament by introducing amendments to the Post Office Act to legalize the arbitrary action taken in raising postal rates on April 1, and table the judicial decision on which he says his decision is based.


An hon. Member:: Hear, hear!


Mr. Speaker:: The House has heard the terms of the hon. member's motion. Pursuant to Standing Order 43, presentation of such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


HEALTH AND WELFARE
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to Standing Order 43. Given the fact that funding for family planning in Canada has been frozen for the past five years, and that live births to teenage girls in the last year that statistics are available for increased by approximately 30 per cent to 12,956, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House direct the Minister of National Health and Welfare to increase the amount of funds allocated for family planning by at least the amount of inflation for the five-year period in which their grant was frozen.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CULTURAL AFFAIRS
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a matter of urgent and pressing necessity. In view of the fact that the Selkirk marine museum is a voluntary, non-profit, community effort, and in view of letters from the Department of Supply and Services threatening the removal and sale of the S.S. Bradbury, which is now an integral part of the marine museum, I move, seconded by the hon. member for Portage (Mr. Masniuk):
That the Minister of Supply and Services, as a symbol of the cultural heritage of the people of Selkirk, donate the S.S. Bradbury to the museum or, alternatively, send a fleet of warships up the Red River to lay siege to this apparently invaluable Government of Canada asset.


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.

[ Translation]


THE BUDGET
Mr. C. A. Gauthier (Roberval):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to introduce a motion dealing with an urgent matter.

April 20, 1978
Considering the federal proposal for a 2 per cent refund on the 3 per cent reduction of the retail sales tax, a decision which the Quebec government has found quite questionable at the economic level and repugnant as far as provincial autonomy is concerned; and considering the second federal proposal for a 2 per cent refund of the retail sales tax levied on all products not affected by the withdrawal of the 8 per cent tax, I move, seconded by the hon. member for Richmond (Mr. Beaudoin):
That the Minister of Finance seriously consider the following suggestion: Maintain its compensation proposal under the form of an aggregate budgetary cover for each province, leaving them entirely free to apportion those $260 million granted to Quebec thus enabling the federal government to respect the autonomy of the provinces and leaving them free to determine their priorities within their jurisdiction.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


REGIONAL ECONOMIC EXPANSION
Mr. John C. Crosbie (St. John's West):: 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 National Sea Products Limited, operators of a small fish plant at Arnold's Cove, Placentia Bay, Newfoundland, processing fresh fillets, herring and fresh lobsters and employing 18 people on a full year basis, with an additional 32 people during the spring and summer groundfish seasons and during the winter herring season, during October, 1977, applied to DREE for assistance in constructing an extension to their fish plant at Arnold's Cove, with a major investment by themselves, with the result that if approved there would be required some 67 additional men and women to be employed each year with a market for all fish that can be caught by fishermen in that area, and in view of the fact that there is very heavy unemployment in the Arnold's Cove area, particularly due to the closing down of the oil refinery at Come-By-Chance, Newfoundland, I move, seconded by the hon. member for Dauphin (Mr. Ritchie):
That the Minister of Regional Economic Expansion approve immediately the application from National Sea Products and authorize DREE loans and grants for the extension of the fish plant at Arnold's Cove with no further delay in approving this application, bogged down now for six months in the bureaucratic jungle in Ottawa, when approval should have been given in time for construction to commence early in 1978 for the 1978 fishing season.


Mr. Speaker:: Is there unanimous consent for the presentation of such a motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL REVENUE
Mr. Leonard C. Jones (Moncton):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Whereas senior officials of the Department of National Revenue are studying the possibility of taxing free transportation passes to employees and their families in transportation companies, and whereas such transportation passes are not abused and create little, if any, additional costs to the transportation companies, and whereas every employer has from time immemorial given certain privileges and fringe benefits to employees as a part of the free enterprise system to encourage production, initiative and loyalty for the benefit of both employer and employee, and whereas any interference with the giving of such privileges is likely to cause great confusion and inconvenience, I would move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That this House requests the Minister of National Revenue to instruct his staff to halt any further study of the possibility of taxing free transportation passes, and that this House strongly objects to taxing fringe benefits such as transportation passes.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ELECTIONS
Mr. Maurice A. Dionne (Northumberland-Miramichi):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. Whereas Her Majesty's Loyal Opposition and their leader have tried to portray themselves as protectors of public morality, and whereas their publication the official newsletter of the PC Party of Canada contains such headlines as "PC candidates go to finishing school", "campaign notes", "PC caucus very much alive" and was distributed across the country in House of Commons' envelopes-


Mr. Speaker:: Order. The hon. member for Surrey-White Rock (Mr. Friesen).


Mr. Andre:: People who live in glass houses! You turkey.
[Mr. Gauthier (Roberval).J
April 20, 1978


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


TOURISM PER CAPITA BASIS GRANTS FOR ALL PROVINCES TO PROMOTE TOURISM-MOTION UNDER S.O. 43
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, I rise under the provisions of Standing Order 43. Recently, the minister for DREE-which now stands for "department for re-election expenses"-announced a $45 million grant to help the Quebec tourist industry. In the interests of equity and national unity, I move, seconded by the hon. member for Okanagan Boundary (Mr. Whittaker):
That equal grants on a per capita basis be extended to British Columbia and all the other provinces to aid tourism all across Canada, and that the Minister of Industry, Trade and Commerce, who has allowed the $45 million to be administered totally by the province of Quebec, be instructed to maintain a federal presence in the use of those funds and that the Minister of Industry, Trade and Commerce, who is responsible for tourism, be instructed that all facilities that benefit from the use of those funds conform to federal bilingual regulations.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I would like to direct a question to the right hon. Prime Minister. It is based on a report released today by the C. D. Howe Institute which states:
The empirical evidence demonstrates that the federal government has not improved the economic position of the poor relative to the highest income families.
And further:
-that federal measures did not in any way substantially alter the distribution of income.
What an indictment, Mr. Speaker, of a government that came to power ten years ago to this day with the promise of a just society!


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


Some hon. Members:: Order.


James Aloysius McGrath: I ask the Prime Minister, since it was ten years ago today that he promised us a just society, why did the budget brought down by his colleague a few days ago not address itself to the problems of the poor in this country, a situation that is extremely aggravated by the fact that 1.6 million Canadians are unemployed and do not benefit from the reduction in the sales tax since a large proportion of their income is spent on food?


Some hon. Members:: Order.


Mr. Speaker:: Order please. In view of the fact that we are engaged today in the sixth day of a budget debate, I wonder if the hon. member might want to put a question rather than make an argument on the budget.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the hon. member is quoting a report of one institute. I have not had the benefit of seeing that, but I have quoted in this House statistics from Statistics Canada. I can repeat them for the benefit of the hon. member. In 1968, some 19.5 per cent of Canadians were beneath the poverty line. When you adjust that poverty line to take into account the increase in the cost of living, ten years later only 10.5 per cent of Canadians are beneath the poverty line.


James Aloysius McGrath: A supplementary question, Mr. Speaker. It is obvious from the answer of the Prime Minister that the government's statistics are badly outdated. I would remind the Prime Minister that the chairman of the Senate committee on poverty revised his estimates of the poverty line in Canada to mean a family of four earning less than $12,000 per year. This independent study by the C.D. Howe Institute would indicate that 20 per cent of the population of this country are beneath the poverty line-a disgraceful situation in a country like Canada.
I ask the Prime Minister, on this his tenth anniversary-the tenth anniversary of the just society-in the absence of the budget of his colleague addressing itself to the problems of the poor in this country, what measures we can expect from this government in its dying days to redress this great injustice to Canadian society.


Pierre Elliott Trudeau: Mr. Speaker, it seems to me this is a repetition of the previous question; therefore, I will repeat my previous answer. The hon. member may not agree with the figures of Statistics Canada. He may argue, as he seems to be saying, that poverty is a relative question and the standard of poverty is changing over the years. If that is the case, he is really saying Canada as a whole has become richer. I see that the hon. lady laughs, because she would not understand it-


Mr. Clark:: The "hon. member".


Pierre Elliott Trudeau: The Leader of the Opposition corrects me; he says I should say "hon. member." We often say "hon. gentle-

April 20, 1978
Oral Questions
man", and maybe that is an abuse when we address the other side. If we can say "hon. gentleman", I do not understand why we could not say "hon. lady" without the hon. gentleman taking offence.


Charles Joseph Clark: You would not understand.


Pierre Elliott Trudeau: All I am saying is that if you adjust the poverty line as defined by the Economic Council of Canada in the early 1960s, and if you take that poverty line as it was in 1968 and move it upward to take into account the increase in the cost of living, 10 per cent of Canadians are below that line now as opposed to some 20 per cent ten years ago.


James Aloysius McGrath: Mr. Speaker, my final supplementary question to the Prime Minister is more in sadness than in anger, because I can assure him that to the five million Canadians beneath the poverty line this question is more than relative; it is a daily problem for them.
In view of the fact that the statistics the government is using have been brought into question by an independent and respected authority and by the Senate committee, will the Prime Minister at least accede to the request we have made on a number of occasions from this side of the House and introduce a poor persons' index, so that we will at least have a proper measurement of exactly what this government's economic policies are doing for the poor of this country?


Pierre Elliott Trudeau: The hon. gentleman is quoting what one professor said, and he says this dismantles the statistics of Statistics Canada. I say each person can have his own definition of poverty. Of course, it is a varying concept and the poor in a poor society are apparently less to be blamed than the poor in a richer society who have a similar standard, because of comparative figures.


An hon. Member:: Who is blaming the poor?


Pierre Elliott Trudeau: This is possible. I am just answering the hon. gentleman's challenge that in the past ten years there has been no progress. I am telling him that if he takes the concept of poverty as it was defined in the sixties and adjusts it for the increased cost of living, he will find the percentage of Canadians below the poverty line has been halved. I say that is progress in ten years.
*
* *


SOCIAL SECURITY
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is to the Minister of National Health and Welfare. Unfortunately, all too many people in this country understand the meaning of poverty and it is a sad commentary on the government that the Prime Minister does not.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: I would like to ask the Minister of National Health and Welfare a question relating to the fact that two recent reports, first the report on Women and Pensions and now the report on Women and Aging, have vividly shown that the financial plight of elderly women is a very severe one. When will the minister correct the iniquitous legislation introduced by her predecessor which cuts off the spouse's allowance after the death of the elder partner in marriage?
In addition, is the minister aware of the very real hardship that this measure causes annually to some 2,500 Canadians, mostly women, and that the government is saving the $400,000 involved on the backs of what one of these reports called "the poorest of the poor"?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, the hon. person opposite and myself were elected-


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


An hon. Member:: 
Some hon. Members:: Hear, hear!


An hon. Member:: That is not true, and you know it.


Flora Isabel MacDonald: Mr. Speaker, the legislation in question has nothing to do with a guaranteed annual income or with the provinces.


Some hon. Members:: Hear, hear!
April 20, 1978


Flora Isabel MacDonald: The legislation is federal legislation. I am asking the minister a question with regard to a piece of federal legislation which involves women in the age category of 60 to 65 whose spouse's allowance is cut off at the death of the marriage partner. I am asking the minister, who seems to understand that problem, if she will reconsider the decision with regard to the spouse's allowance, in view of the fact that it would involve no new expenditure on the part of the federal government: these funds are already allocated and they are withdrawn by the federal government. That is what I am asking her to reconsider.


Monique Bégin: Mr. Speaker, I wish the hon. member were minister of finance. With that kind of reasoning-


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Monique Bégin: -maybe she should be president of the treasury board. However, we would all go bankrupt. With regard to the spouse's allowance, the hon. member should read the Speech from the Throne where it was announced, and the Prime Minister's speeches which indicate very clearly the spouse's allowance would be a first step toward a guaranteed annual income. I repeat, that proposal was rejected by the provinces: in my opinion, wrongly. There are new expenditures involved in new programs or extensions of existing programs such as spouse's allowance. I repeat that I am looking into mechanisms to help older people in need, especially those between the age of 60 and 65. If the hon. member's party would stop travelling around the country mouthing cliches against social policy, we would be further ahead.


Some hon. Members:: Hear, hear!


Mr. Paproski:: Back to national revenue.


Mr. Hees:: I just saw Pierre put a line through a name.


REQUEST FOR LEGISLATION TO ATTACK PROBLEMS OF POVERTY
Mr. Stanley Knowles (Winnipeg North Centre):: 
Some hon. Members:: Oh, oh!


Steve Eugene Paproski: Watch out, Allan.


George Harris Hees: You are blushing.


Monique Bégin: On a more serious note, since I have been in this parliament I have witnessed constant progress in the field of social policy to cover the most economically vulnerable Canadians. Contrary to tradition, the C.D. Howe Research Institute did not send us a copy ahead of time; therefore, I have not read it. I will, of course, read it. From the way it is described in the media, the thrust of it speaks of the proportion of national wealth, incomes and revenues in Canada and the way they are distributed. It states that although everyone in Canada is richer than a few years ago, distribution of revenues in this country has remained the same. While 20 per cent of Canadians at the top of the economic scale receive 40 per cent of the income revenues, the bottom 20 per cent still receive between 4 and 6 per cent.
I would like hon. members to note that and to stop trying to misuse the Prime Minister's statistics which indicate a decrease in poverty in Canada by approximately 50 per cent, no matter which measure you use, and try not to oppose those in the government who have made progress in easing poverty.


Stanley Howard Knowles: In view of the minister's statement in the Standing Committee on Health, Welfare and Social Affairs that poverty is a black mark on this country, whether it is relative or absolute, and in view of her own expressed concern to do something about reducing poverty in Canada, I repeat my earlier question: will she not now take advantage of the extra three weeks which have been given to this parliament to make an attack on poverty, either by doing something for those below standard income levels or for that seriously disadvantaged group in our society, our older women?


Monique Bégin: I repeat, that as soon as we are ready to proceed with measures to help these most vulnerable groups- as I have identified them in the past, including the one to which the hon. member referred-I shall, of course, proceed.

April 20, 1978
Oral Questions
[ Translation]


SMALL BUSINESS
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, we can see that today is the day of small people in the House of Commons; I mean people whose income is below the poverty line.
Mr. Speaker, my question is directed to the Minister of State for Small Business. Given the fact that several months ago the minister told us that standards and criteria would be set to help small businesses which would request it, could he very seriously tell the House today whether those standards and regulations are established and whether we might know them in order to enlighten the very numerous small businesses in Canada, particularly in Quebec and most of all in the Bellechasse riding, so that they might take advantage of that legislation as quickly as possible?


Hon. A. C. Abbott (Minister of State (Small Business)):: Mr. Speaker, I would refer the hon. gentleman to the speech I made Tuesday night. 1 think he will find there a wonderful resume of all the progressive measures we have taken with respect to small business. I will send him a copy of a letter I recently sent to my Liberal colleagues outlining some of the things we have been able to achieve and forecasting certain measures which we intend to carry out in the future.


Joseph Adrien Henri Lambert: Mr. Speaker, is the minister feeling he is a minister only for his Liberal colleagues or for all Canada? 1 ask him the following question: would he also undertake, as I have already requested several months ago, to send his release to all members in the House so that we might serve adequately all Canadians regardless of their political affiliation or that of the minister?


Anthony Chisholm Abbott: I can assure the hon. member that I am attempting to serve all Canadians and all Canadian small businessmen. Again, I would encourage the hon. member to read my speech of the other night. If he does so, he will see that much of the criticism which has been directed against the record of this government over the past ten years is manifestly false. He will also find that many of the measures we have carried out have been of particular benefit to Quebec and to small businessmen in his area.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General. In light of unanimous

approval by this House yesterday of the fourth report of the Standing Joint Committee on Regulations and Other Statutory Instruments which, as my hon. friend from Parry Sound-Muskoka has indicated, is the watchdog of the rights of parliament, expressing grave doubts as to the validity of relying on the general power in section 13 of the Financial Administration Act to set postal rates-a position which was supported by all the hon. gentleman's predecessors-will the Postmaster General now respect the will of parliament and the advice of his predecessors by bringing in amendments to the Post Office Act legalizing what he did illegally on April 1 ?
[ Translation]


Hon. J.-Gilles Lamontagne (Postmaster General):: Mr. Speaker, I read carefully the report of the Joint Standing Committee on Regulations and Other Statutory Instruments. I think the opinion of the committee must be seen as the expression of an opinion. Of course, when it comes to legal advice, there are as many views as there are lawyers, but I feel, in that regard, that the Post Office has always acted legally on the advice of the Department of Justice. Mr. Speaker, I must also point out that we acted under the terms of one of the sections of the Financial Administration Act, namely section 13, on several occasions in 1976-77, and the opposition never questioned the legality of those measures. We did the same thing in 1978, feeling that the advice we got was what we should follow. If there are any other possibilities from the legal point of view, I shall consult the Department of Justice on the matter.


Walter Gilbert Dinsdale: The Postmaster General seems to be unaware of the significance of unanimous concurrence in a report of the House and of the other place condemning the hon. gentleman for what he has done. In view of this continued defiance of the traditional rights of parliament on this issue, and the minister's refusal, by his failure to bring down amendments to the Post Office Act, to allow parliamentary discussion of the drastic deterioration in postal affairs, will the Postmaster General make a statement in the House explaining his defiance of the will of parliament, and will he also table the judicial decision upon which he bases this defiance? Otherwise, I see no alternative but for the minister to resign.


Some hon. Members:: Hear, hear!


Mr. Lamontagne:: I have no intention of resigning, because pretty soon-I hope-there will be an election, after which I think I will come back here. I have defied no one. I did not defy the House. We increased postal rates in the same way as was done previously. I very much respect the opinions of the committee and of the House, but I have nothing further to say and no documents to table unless I am advised to do so by the Department of Justice.
April 20, 1978


ALLEGATION INCREASE IN POSTAL RATES ILLEGAL
Stan Darling: In view of the fact that parliament has not empowered the Govenor-in-Coun-cil or anyone else for that matter to increase postal rates, is the Postmaster General aware that by going beyond his legal authority he has made himself personally liable for the millions of dollars he has collected from the public by overcharging them for stamps and other postal services?


J. Gilles Lamontagne: Everything which has been done by the Postmaster General has been done on the assumption that it was legal, on legal advice. It was done in the interest of Canadians, too, because we had a deficit of $600 million and we collected from the users of the postal services $125 million through increased rates, thus achieving a much better balance between the users and the taxpayers generally. I think the questions put to me today may be intended to put a smokescreen over the Ritchie report which was not approved by the opposition. This report, as one reads it, is very violent against the worker. Mr. Ritchie himself recommended that increases in postal rates be imposed by a board and not by the House.


Stan Darling: A final supplementary. Will the Postmaster General confirm that the real cost of mailing a first-class letter in Canada today is 28 cents, 14 cents of which is presently being borne by the heavily overburdened taxpayer?


Maurice Lamontagne: Mr. Speaker, we could discuss for a long, long time the cost of mailing a letter. I know that we charge 14 cents for first-class mail and other rates for other classes of mail, and that we have a deficit of about $500 million. Such a deficit could warrant charging 28 cents. I think we should put to ourselves the more serious question of trying to have more efficient delivery of mail everywhere, instead of wasting our time arguing if the rates are legal or not.


Some hon. Members:: Oh, oh!


REQUEST LEGALITY OF RATE INCREASES BE REFERRED TO SUPREME COURT OF CANADA
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I have a supplementary question for the Postmaster General. The Postmaster General just put his mouth where his mind is. He does not really care whether matters are legal or illegal; that is what he said. On the assumption he has made that the charge is legal-that is what he said in his earlier answer-he has assumed, and the government, and the Postmaster General's department has worked on an assumption.
It is time the issue was settled, since the House of Commons has concurred unanimously in the report of the joint standing committee. I ask him, so that we do not deal with this matter from the point of view of assumptions, whether he will arrange to have this matter referred to the Supreme Court of Canada for a decision, so that the question of the legal priority of this whole issue and, indeed, the minister's position, can be settled?
Oral Questions


Hon. Ron Basford (Minister of Justice):: Mr. Speaker-


Some hon. Members:: Oh, oh!


An hon. Member:: "Here come the judge".


An hon. Member:: The godfather.


Stanley Ronald Basford: The question relating to a reference to the Supreme Court of Canada properly falls within the purview of my responsibility, and therefore is for me to answer. With regard to the substance of the question, the present and past postmasters general have acted on the advice of the Department of Justice that the use of section 13 of the Financial Administration Act is a proper and valid use of that section. Whether it is an unusual or unexpected use of it, as reported by the committee, of course does not affect its legality. In any event, in relation to the hon. member's question, the validity and legality of the use of section 13 of the Financial Administration act is currently before the courts, who will, of course, decide whether or not it is valid.


Walter David Baker: Mr. Speaker, whether the Minister of Justice knows it or not, parliament yesterday concurred in the report unanimously-and that includes the Minister of Justice. How can the Minister of Justice sit there in his capacity and call himself Minister of Justice and Attorney General when he has such a flagrant, almost unconscionable view of the law? If he is prepared to rely on that opinion of his officers-it is his right if he so wishes-is he prepared to submit the issue immediately to the courts by way of motion to the Federal Court of Canada, or by way of reference to the Supreme Court of Canada, so that the matter can be settled once and for all and so we are not interminably delayed by a private law suit?


Stanley Ronald Basford: The hon. member, by his previous question, obviously acknowledges that the committee's report, whether or not it was concurred in by parliament, does not determine by itself-


Charles Joseph Clark: Parliament means nothing and the law means nothing to you.


Stanley Ronald Basford: -the legality or illegality of the action. The hon. member acknowledges that by asking that the question be referred to the Supreme Court of Canada.


Walter David Baker: Then refer it.


Stanley Ronald Basford: I am saying that the question of section 13, its legality and its use, is presently before the courts and therefore there is no need for a reference at this time.


Some hon. Members:: Hear, hear!

April 20, 1978
Oral Questions AIR TRANSPORT


NORTHERN ONTARIO-CALL FOR INQUIRY INTO AIR SAFETY
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, my question is for the Minister of Transport. The Association of Treaty Indians, located in Timmins, Ontario, have compiled a rather lengthy document on air transportation problems in northern Ontario, particularly air safety. They have presented this document to the Prime Minister and to myself. They are calling for an inquiry into air safety irregularities in northern Ontario. They have listed eight fatal accidents and point out that pilots are flying without mandatory inspections, they are falsifying records and planes are overloaded. I ask the minister if he is aware of this submission and will he be taking action and calling for an inquiry into air safety problems in the north?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I am not aware of that particular submission. There has been a good deal of action with regard to aviation safety in the north. I must say I am not aware of that particular report and I would be glad if the hon. member would let me have a copy of it, because most often his references are to matters which have taken place in the nineteenth century.


A. Daniel McKenzie: This report happens to be dated March 21, 1978, which is in this century. The minister's department does not agree that action is being taken. I have here a letter from an employee of MOT who says:
The recent crash of a Pacific Western Airlines aircraft-


Mr. Speaker:: Order, please. If the hon. member has a question, would he put it forthwith.


A. Daniel McKenzie: He is challenging irregularities with regard to that plane crash and he has provided me with an internal document which points out:
During the past year in the Atlantic region alone more than 600 instances are on record-
He is referring to aircraft landing and taking off when the officially reported weather at the airport was worse than that required. I will present these documents to the minister. Will he inform the House whether he will start a full-scale public inquiry into all these charges regarding air safety irregularities?


Otto Emil Lang: Mr. Speaker, I referred to the hon. member using old material because certainly the last time he engaged in this sort of question he continually switched back and forth to things that had happened, two, three or four years before, even though there had since been a very careful investigation and a very sharp report had emerged from it to put to rest any fears he might have had about the facts. It was an investigation carried out by some of our own people who, after all, are pretty good. As a result of that report, we acted upon the recommendations and have added to the number of inspectors and improved their techniques in line with the recommendations.
Obviously, one expects to see improvements in safety take place. I would emphasize, however, that by and large the smaller carriers in this country adopt very high standards indeed, and I would not like to see them smeared in this way. Generally, we try to work in a co-operative way with them, because it is not a matter of their having to be forced to do something. They want to be helped to do the things that make aviation safe. They are generally that sort of person, and no comments of the hon. member should lead to the contrary conclusion.


ADMINISTRATION OF JUSTICE
Stuart Malcolm Leggatt: Mr. Speaker, my question is directed to the Minister of Justice: it concerns the evidence given over the last two days by assistant commissioner Thomas Venner, head of the criminal investigation department of the RCMP. That evidence indicates that more than 400 break-ins have taken place without warrant. I should quote briefly from the evidence. Mr. Venner said:
If a policeman did not have enough evidence to obtain a search warrant from a judge, a warrantless search could be in the public interest because it could help detect crime.
That was the evidence given before the McDonald inquiry. Can the minister advise, in view of his responsibility as the chief law enforcement officer, whether any directives have gone out from his office or from the Solicitor General's office pointing out that this kind of conduct will not be countenanced by either the Minister of Justice or the Solicitor General and that the rule of law will be upheld for everyone in this country?


Stanley Ronald Basford: Mr. Speaker, we have been saying for many years, certainly since the conduct of the RCMP was brought into question or the conduct of some members of the RCMP was questioned, that the mandate of the RCMP, its members and officers, was clearly to live within the law and under the rule of law. The McDonald commission is inquiring into incidents where the law might not have been followed; that is the purpose of the inquiry. I do not think that as a result of each day's revelations it would be useful for me or the Solicitor General to send them a new directive to live within the law: it has been made very clear that that is the government's instruction to members of the force.


Stuart Malcolm Leggatt: I take it from the answer that there has been no specific direction by either the minister or his counterpart. My question is this: In view of the fact that there has now been sufficient admission, not merely in the Venner evidence but in the evidence of many other senior officers in the RCMP, that a prima facie criminal act has taken place, and in view of the minister's responsibility as the chief law enforcement officer of Canada, why has he not moved to lay charges against those persons who have admittedly broken the criminal law, since
[Mr. Basford.1
April 20, 1978

evidence is available to him? Is this not a breach of the minister's duty to the country?


Stanley Ronald Basford: Mr. Speaker, we are following the practice which has been followed in inquiries of a similar nature in the past, such as the Norris royal commission and others. As a result of completing their work, or at any time before, when commissioners have before them evidence which they think should be referred to an attorney general for action, they will do so. That is the practice we are following in this inquiry. In the case of the Norris inquiry, for example, there were allegations each day of criminality or alleged criminality. At the conclusion of the Norris inquiry, that evidence was referred by the law officers of the Crown to the appropriate provincial attorneys general for action.


SOCIAL SECURITY
Charles Joseph Clark: Mr. Speaker, my question is directed to the Minister of National Health and Welfare, who I think has now been briefed by her predecessor on the matter which my colleague, the hon. member for Kingston and the Islands, questioned her about and regarding which she was misinformed in her answers.


Some hon. Members:: Oh, oh!


Monique Bégin: It was a different matter.


Charles Joseph Clark: Now the minister will know that the federal policy regarding the spouse's allowance means that for 2,500 of the poorest people in the country, when their spouses die their pensions will stop. It would cost the Government of Canada approximately $400,000 to stop this injustice. That amount already has been allocated and it is approximately half of what the Minister of Transport spends to fly himself around.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Charles Joseph Clark: My question for the minister is very clear and it is as follows: Why does the government continue to take money away from these underprivileged Canadians?


Mrs. Campagnolo:: It is financial logic.


Hon.   Monique@: Mr. Speaker, the question the hon. person just asked me is based upon false economic assumptions which I should like to correct. Otherwise, it is extremely easy for the hon. member to make representations without knowing what he is talking about.


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


Monique Bégin: Probably because of the time lag, a misunderstanding or bad mail-I do not know-today he read the Le Devoir editorial of Madame Lise Bissonnette from approximately a month and a half ago.


Flora Isabel MacDonald: Who? I have never heard of her.


Monique Bégin: She made a mistake which I indicated to her. She spoke of $400,000, when we were talking of a few million dollars. I am not accustomed to receiving questions from the hon. Leader of the Opposition because he does not talk about social policy too much.


Some hon. Members:: Hear, hear!


Monique Bégin: How can he make representations like that, or the members of his party, when we voted for the spouse's allowance bill in the House?


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, hon. members opposite will continue to shout because they are trying to protect their minister.


An hon. Member:: She does not need protection.


Charles Joseph Clark: The fact is that the minister talks a great deal about social policy-


Flora Isabel MacDonald: But does nothing.


Charles Joseph Clark: Faced with the obvious injustice affecting 2,500 people in the country, the minister is prepared to do nothing at all. She knows the present federal policy is taking money away from spouses whose husbands or, in a few cases, whose wives die.
Why is the Government of Canada continuing this heartless policy? When the money is already allocated and no new expenditure would be involved, why does the government not act now to ensure there will not be a double blow dealt Canadians who lose their spouse and then the Government of Canada comes in to take away their pension right after the funeral?


Some hon. Members:: Hear, hear!


Monique Bégin: Mr. Speaker, the Leader of the Opposition excels in melodrama. If he really wants to help Canadians who are in need, and the aged in particular, he should quote accurate figures. First, we looked into the practical problems of needy persons and couples. To give them greater assistance, more than higher expenses alone must be taken into account, because no money has been set aside for that. I'm hanged if I know what economic principles he applies. No funds have been set aside in government expenditures, which would be contrary to the law voted by this parliament since the latter stipulates that the pension must be cancelled when the spouse dies. To remedy that situation, I am very happy to see that the hon. gentleman is discovering the mysteries of life and becoming
4690

April 20, 1978
Oral Questions
interested in the needy among the old. But we must not forget all the other needy persons who do not have the luck to have husband. That means $600 million. I am especially happy to see that we have the unanimous support of the House and that they will no longer be able to criticize the government deficit.


Charles Joseph Clark: Mr. Speaker, the minister is aware that this party proposed and her government opposed an amendment which would have resolved this situation.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: She knows that. As much as the minister and her colleagues might want to blame Le Devoir for whatever problems are facing the country, they should know the figure of $400,000 did not come from Madame Lise Bissonnette but from the minister's departmental officials. If she does not know that, perhaps her predecessor can brief her on that matter as well. My question is simple. It has to do with social justice, very clearly. It would not cost any more than would be saved by grounding the Minister of Transport. My minister is this-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Mr. Speaker, my minister would be considerably more competent than this government's ministers.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Why does this minister, who travels around the country talking about compassion-


Some hon. Members:: Order.


Charles Joseph Clark: -continue to refuse to help 2,500 of the poorest people in Canada who are in urgent need of help right now?


Walter David Baker: She is a hypocrite.


Monique Bégin: Mr. Speaker, she does that in order to see the day when hon. members of the Tory opposition have a motion of non-confidence on a budget which proposes to bring into force exactly what he is asking in oral questions.


Flora Isabel MacDonald: Right now.


Walter David Baker: Bring it on.


INDUSTRY
Hon. Martin O'Connell (Scarborough East):: Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce. In view of the importance of the auto parts industry to employment, and in light of the $3 billion Canadian deficit in auto parts, has the government come to a decision

with respect to the third country remission order? If so, when will it be announced? Furthermore, what response is the government giving to the request of the auto parts industry for a special investment fund within the enterprise development program to assist this industry in Canada to retool and re-equip so that it can play a full part in the manufacture of parts for the new generation of automobiles?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, with regard to third country remission orders, we have agreed to go ahead with them. We are proceeding one company at a time in order to work out exact agreements with each company as to how the remission order will apply. With regard to the second part of the hon. member's question concerning the auto investment corporation, that matter is being given a great deal of consideration within the department.
I might add that the Enterprise Development Corporation has and will continue to guarantee a number of loans for auto parts manufacturers. One that comes to mind is Anaconda. Recently, we went out on a limb to quite a large extent with a Canadian company to buy Anaconda. Anaconda is a manufacturer of radiators and contributes a great deal to the auto parts business. I assure the hon. member that we are considering the setting up of an auto investment corporation which would greatly benefit auto parts manufacturing as well.


TRANSPORT
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, my question is directed to the minister in charge of the Canadian Wheat Board: it has to do with rail line abandonment, specifically the line from Euston Junction to Colonsay. In view of the fact that the Prairie Rail Action Committee made a recommendation to abandon a portion of the line from Liberty to Dilke, contrary to the wishes of the grain producers-many of whom will have to haul grain more than 20 miles-contrary to the wishes of the elevator companies and the railways involved, and without any hearings, and in view of the fact that the committee refuses to give any reasons for their recommendations, will the minister personally intervene and direct that hearings be held to reconsider the decision? Or, alternatively, will he undertake to reject the recommendation of the PRAC and direct that the operation of the line continue?


Otto Emil Lang: Mr. Speaker, I am sure the hon. member knows that the Hall commission left in doubt the long-term future of the Amazon to Dilke line. They left it in doubt because they said its future should be determined between now and 1990. Also there was some construction between Amazon and Watrous, and for that to the done, it was important to determine the future of the line.
April 20, 1978

The Prairie Rail Action Committee has made very positive recommendations that we go ahead with the several million dollars of construction on the link and with the several million dollars of construction on the line as far as Liberty is concerned. I am prepared to recommend both those steps to my colleagues and, therefore, fully expect the transfer to the basic rail network of that stretch of line as far as Liberty.
The Prairie Rail Action Committee recommended that the stretch between that point and Dilke should have a time limit put upon it, and then be prepared for abandonment. That, of course, is a decision which can only be made by the Canadian Transport Commission. In the ordinary course, long before that happens, the parties in question-the farmers in the area-will have an opportunity before the Canadian Transport Commission, or a new western arm of the Canadian Transport Commission which is envisaged, to make their views known about whether the line should be maintained further.
I hope the hon. member will not only emphasize the difficult part of these decisions but will emphasize the very positive point of the $4 million or $5 million in investment in that area in branch lines.


Douglas Charles Neil: Mr. Speaker, it would seem to me that the people involved should at least have the opportunity of making representations to the Prairie Rail Action Committee. I am wondering if it is within the terms of reference of the PRAC that they do not receive representations. If this is the situation, would the minister change those terms of reference so that in future any decisions they make will be based on hearings and recommendations that they receive from concerned parties as well as the railways?


Otto Emil Lang: Mr. Speaker, the Hall commission, of course, heard a great many representations and the Prairie Rail Action Committee still has these available to them. I hope the hon. member is not suggesting that we should not have gone forward, as a government, in firming up the future of the line as far as Liberty is concerned and making that permanent. I thought that was very useful to the people of that area.
As far as the other part of the line is concerned, apparently the hon. member missed the point I was making to him, which was that the Canadian Transport Commission, under current law, only has the power to decide whether the balance of the line should be abandoned. I hope that before that date in 1983 there will be an opportunity for hearings, not just by the Canadian Transport Commission but by a western arm of the commission which the government hopes to set up in the next session.



THE ROYAL ASSENT

['Mr. Speaker, I do not want to debate with the hon. member about who knows what is going on, but I can\nApril 20, 1978', 'assure him he has been mistaken in his assessment of the situation. The Minister of Veterans Affairs (Mr. MacDonald) and the Minister of National Health and Welfare (Miss Begin) have been considering these questions with members of the government. It may be possible in whatever time is available-the hon. member says a short time, and that is his opinion-to deal with some of these matters.']
Mr. Speaker:: I have the honour to inform the House that the following communication has been received:
Privilege-Mr. Dionne
Government House Ottawa
April 20, 1978 Sir:
I have the honour to inform you that the Honourable Wishart F. Spence,
O.B.E., Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate chamber today, the 20th day of April, at 5.45 p.m. for the purpose of giving Royal Assent to certain bills.
I have the honour to be,
Sir,
Your obedient servant Edmond Joly de Lotbiniere Administrative Secretary to the Governor General



Maurice Adrian Dionne: Mr. Speaker, I rise on a question of privilege which arises from an action of the Leader of the Opposition (Mr. Clark), and which appears to be an abuse of the franking privileges of the members of this House.


Some hon. Members:: Oh, oh!


Maurice Adrian Dionne: This paper called "Bulletin", which describes itself as the official newsletter of the Progressive Conservative Party of Canada, and which has such partisan political headlines as "P.C. Candidates Go To Finishing School", "Campaign Notes", "P.C. Caucus Very Much Alive-


An hon. Member:: Which is very much in doubt.


Maurice Adrian Dionne: -was distributed in a House of Commons envelope, marked "first class," and bearing the postmark of the House of Commons and the frank of the Leader of the Opposition.


Some hon. Members:: Oh, oh!


Maurice Adrian Dionne: Mr. Speaker, it is obvious that that represents an electoral benefit to the Tory party which should amount to several thousands of dollars. Not only does it appear to be a violation of the franking privileges of the members-while they are very good at throwing bricks, they are not very good at catching them.


Walter David Baker: Throw a brick.


Maurice Adrian Dionne: Mr. Speaker, this is the paper if they wish to see it, and this is the envelope.


Some hon. Members:: Oh, oh!
4692

April 20, 1978
Business of the House


An hon. Member:: Where are your nephews, Huey, Dewey and Louie?


Maurice Adrian Dionne: And phooey yonder.
It would also appear, Mr. Speaker, to be a violation of the spirit of the Election Expenses Act because it provides that party with a clear electoral advantage. Therefore, it seems to me that the Leader of the Opposition and the P.C. party should be prevented from that parasitic practice, and, to quote the Leader of the Opposition, "should come clean with the Canadian people" and reimburse the public treasury for the benefits they have received.
If you find, Mr. Speaker, that this is indeed an abuse of the privileges of the House, I am prepared to move the appropriate motion of reference.


Mr. Speaker:: Order, please. The matter was raised just recently in an opposite context, but it had to do with fund raising and the use of the frank. The House is aware that the frank replaces the postage stamp for members of the House of Commons, and the same privilege extends to the public in communicating with their elected members. Where the public is concerned, however, it is not necessary to affix postage. That privilege simply replaces the ordinary postage stamp. It is not within the authority of the Chair on procedural grounds to intervene in that mail, which is considered as private, as if it had a stamp. Thus, the sanction, as we have discovered in the past, it not one of a procedural nature but rather one of propriety in the general sense, to be judged by the public, which is the way this instance shall also be judged.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, it is Thursday, and I wonder if the government House leader could inform us as to what the House will be about next week.


Mr. MacEachen:: Mr. Speaker, today the House will conclude the budget debate. Tomorrow, I would like to call Bill C-39, the currency and exchange amendments-which I understand will be sent to committee rather quickly-followed by Bill C-36, the Export Development Act; C-10, the Comptroller General; S-8, the fugitive offenders; C-42 the language of trial; S-9 tax conventions, and C-4, aeronautics. I may vary that order, but for Friday the first two I have suggested, currency and exchange, and the export development measure, will be called. I would like to designate Tuesday, April 25, as an allotted day.


Walter David Baker: Will the government House leader inform the House when it is the intention of this government to bring forward the Bank Act for first reading, because we understand from the answers of the Prime Minister (Mr. Trudeau) that the Bank Act includes references to the

caisses populaires and to credit unions. Will he undertake to put that bill down on his order paper at the earliest possible opportunity so we can determine, before we go to the country, the intentions of the government with respect to the revisions to the Bank Act, particularly as it relates to those two institutions?


Allan Joseph MacEachen: Mr. Speaker, I will discuss the matter with the Minister of Finance (Mr. Chretien) and advise the hon. member. I am not quite sure of the stage at which the bill rests at the moment, but I shall check.


Stanley Howard Knowles: Mr. Speaker, I rise on the same point of order. A news report last night indicated that the Deputy Prime Minister (Mr. MacEachen) filed notice of a number of bills that have not yet seen the light of day. I gather he must have filed notice rather late last night because they do not appear on the notice paper today. Could the minister tell us whether there are several new bills, and whether they are substantial?
My other question grows out of an exchange during the question period. In view of the fact that there seems to have been a change in plans, which means we may be here for another two or three weeks, will the government House leader have serious talks with the Minister of National Health and Welfare (Miss Begin) and the Minister of Veterans Affairs (Mr. MacDonald) concerning the possibility of legislation attacking poverty or doing something for our veterans which, as the minister knows, the House would attend to very quickly?


Allan Joseph MacEachen: Mr. Speaker, I am not aware of any news report about bringing forward new bills. I do recall I was asked what bills I would call in the ordinary course. I think I referred to a number of bills that I have enumerated today. I do not know the basis of a special report about a series of new bills. Additional bills will be brought forward, and some of them will be substantial. I must say I am at a loss to understand why the hon. member refers to a change of plans. There has been no such change to my knowledge.


Stanley Howard Knowles: Mr. Speaker, my friend, the Deputy Prime Minister and President of Privy Council, in his pristine purity is probably the only member of the House who does not know that there were plans for an election to be announced today. I ask him again, will he give serious consideration to discussions with the two ministers I named to see if something can be done in the field of poverty? There is also reason to believe that the Minister of Veterans Affairs is anxious to bring on a bill that would either upgrade the basic rate of the war disability pension or do something about the 48 per cent rule as it applies to widows. Why not deal with these kinds of legislation in whatever time we have left?


Allan Joseph MacEachen: Mr. Speaker, I do not want to debate with the hon. member about who knows what is going on, but I can
April 20, 1978

assure him he has been mistaken in his assessment of the situation. The Minister of Veterans Affairs (Mr. MacDonald) and the Minister of National Health and Welfare (Miss Begin) have been considering these questions with members of the government. It may be possible in whatever time is available-the hon. member says a short time, and that is his opinion-to deal with some of these matters.



ROUTINE PROCEEDINGS


Otto Emil Lang: Mr. Speaker, under Standing Order 41(2) I should like to table copies of the Primary Highway Strengthening Improvement Agreements with the Provinces of Prince Edward Island, Nova Scotia and Newfoundland, under the Atlantic Highway Agreement. I expect to be able to do the same for New Brunswick shortly.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: 951, 953, 1,177, 1,187, 1,189, 1,254 and 1,323.


Mr. Howie: Since January 1, 1977, what amount was (a) loaned (b) granted for the repair or improvement of existing housing accommodation for native people in New Brunswick?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: am advised as follows by Central Mortgage and Housing Corporation: CMHC made loans totalling $5.2 million in 1977, under section 34.1 of the National Housing Act, to finance the repair or improvement of 1,071 existing housing units of rural and native people in the province of New Brunswick.
Order Paper Questions


Mr. Howie: Since January 1, 1977, how many existing housing units for native people in New Brunswick were repaired or improved by CMHC funding?


André Ouellet: am advised as follows by Central Mortgage and Housing Corporation: see answer to question 951 answered this day.


Mr. Andre: 1.	What is the Crown's precise Financial interest in Consolidated Computer Incorporated as administered by the Department of Industry, Trade and Commerce and on what date was such interest acquired, at what cost and for what reason?
2.	What was the book value of the Crown's equity on the date of acquisition and what is its latest estimated book value?
3.	To date, what is the Crown's total investment, including equity costs, contributions to operating funds, debt forgiveness and what is the Crown's total realized profit from such investment?
4.	In what manner is the Crown's interest represented (a) on the Board of Directors (b) in its senior management?
5.	Did the government make a policy decision in regard to the future disposition of its interest?


Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: In so far as the Department of Industry, Trade and Commerce is concerned: 1, The Crown's precise financial interest in Consolidated Computer Incorporated as administered by the Department of Industry, Trade and Commerce is as follows:
(a)	Date Crown's Interest Acquired:	
	No. of Shares	Date
	Held by Crown	Acquired
(>)	60,000 special non-voting shares	March 28, 1972
	565,000 common shares	March 28, 1972
	375,000 common shares	March 23, 1973
	100,000 common shares	January 2, 1974
(ii)	10.869.333	common shares 11.969.333	December 30, 1976
	2 543,665 Note: Transferred to FUJITSU for technological,	
	9,425,668 manufacturing.	marketing and financial
assistance to be provided to CCI
(b)	Cost:
(i)	3,126,000
(ii)	16,304,000
Total:	$19,430,000
(c)	Purpose:
To provide the company with a solid equity base and to ensure its long-term viability.
Note: The Crown is also providing insurance on operating loans in the amount of $10,692,330.35.

April 20, 1978
Order Paper Questions
2.	(a) On the date of acquisition, the book value of the Crown's equity was: (i) Negative $1,858,378; (ii) Negative $1,332,850; (b) The latest estimated book value is negative $906,149.
3.	The Crown's total investment in Consolided Computer Incorporated is $19,430,000.00. The company has received some contribution assistance under the Program for the Advancement of Industrial Technology in the amount of $5,082,674.27 and under the Program for Export Market Development in the amount of $1,937.20. It has also received assistance under the General Adjustment Assistance Program for consulting services in the amount of $263,610.37. The Crown's total realized profit from such investment is nil.
4.	(a) The Crown's interest is represented on the Company's board of directors by two officers of the department, (b) The Crown is not represented in the company's management.
5.	In regard to the future disposition of its interest, the government has stated that it intends to dispose of its interest in the company provided a suitable purchaser can be found to ensure an on-going computer industry in Canada.


Mr. Andre: 1.	What is the Crown's precise financial interest in The Belt Railway Company of Chicago as administered by the Department of Transport through Canadian National Railways and on what date was such interest acquired, at what cost and for what reason?
2.	What was the book value of the Crown's equity on the date of acquisition and what is its latest estimated book value?
3.	To date, what is the Crown's total investment, including equity costs, contributions to operating funds, debt forgiveness and what is the Crown's total realized profit from such investment?
4.	In what manner is the Crown's interest represented (a) on the Board of Directors (b) in its senior management?
5.	Did the government make a policy decision in regard to the future disposition of its interest?


Otto Emil Lang: The Management of Canadian National Railways advises as follows: 1. (a) Financial interest in Belt Railway: 7.69 per cent of the outstanding capital stock is owned by Grand Trunk Western Railroad Company. G.T.W. is a wholly owned subsidiary of Grand Trunk Corporation which itself is a wholly owned subsidiary of Canadian National Railway Company, (b) Date of acquisition, November 22, 1882. (c) Cost, $240,000. (d) Reason, to participate in the expanded connection with railroads entering Chicago, particularly western railroads; to enable the extension of the system to the sources of western traffic.
2.	Book value at date of acquisition $240,000. At December 31, 1977, the CN system's share of share-holders' equity was $507,571.
3.	The original investment of $240,000 was the only investment made. The G.T.W. received approximately $400,000 in dividends during the years 1923-1948 equal to 6.4 per cent per
[Mr. Loiselle (Chambly).l
annum on the cost of the capital stock. Our records do not indicate that any dividends have been received since 1948.
4.	The company is controlled jointly by the thirteen owners. Each company has one representative on the board of directors. Senior management employees are appointed by the board.
5.	Not applicable.


Mr. Andre: 1.	What is the Crown's precise financial interest in the Grand Trunk-Mil-waukee Car Ferry Company as administered by the Department of Transport through Canadian National Railways and on what date was such interest acquired, at what cost and for what reason?
2.	What was the book value of the Crown's equity on the date of acquisition and what is its latest estimated book value?
3.	To date, what is the Crown's total investment, including equity costs, contributions to operating funds, debt forgiveness and what is the Crown's total realized profit from such investment?
4.	In what manner is the Crown's interest represented (a) on the Board of Directors (b) in its senior management?
5.	Did the government make a policy decision in regard to the future disposition of its interest?


Otto Emil Lang: The Management of Canadian National Railways advises as follows: 1. (a) Financial interest in G.T.M. Car Ferry Company. The $200,000 capital stock of the Grand Trunk-Milwaukee Car Ferry Company is owned by Grand Trunk Western Railroad Company. G.T.W. is a wholly owned subsidiary of Grand Trunk Corporation which itself is a wholly owned subsidiary of Canadian National Railway Company, (b) Date of acquisition, November 9, 1905. (c) Cost, $200,000. (d) Reason, to carry on the transportation of cars between Grand Haven, Michigan and Milwaukee, Wisconsin.
2.	The book value of the acquisition to CN system was not less than $200,000. At December 31, 1977, there was a deficit of $64,722. It should be noted that under Grand Trunk Western Consolidation Agreement dated May 9, 1928, and as authorized by I.C.C. Order of November 8, 1929, the Grand Trunk-Milwaukee Car Ferry Company sold and assigned all its physical and other assets to the Grand Trunk Western Railroad Company as at January 1, 1929.
3.	At December 31, 1977, the Grand Trunk-Milwaukee Car Ferry Company had assets of $73,700 and liabilitie of $ 138,422. This deficit of $64,722 covers the period 1937 to 1954. Financial statements prior to 1937 are not available. Since 1954, revenues and expenses have been combined with those of Grand Trunk Western and separate income statements have not been made.
4.	The board of directors of the company is made up of officers from the holding company Grand Trunk Western and one outside director. Senior management is also made up of G.T.W. officers.
5.	Not applicable.
April 20, 1978


Mr. MacKay: During the first week of December 1977, did any members from the office of the Minister of Energy, Mines and Resources travel to Vancouver and, if so (a) what was the purpose of their trip (b) how many made the trip (c) what were their names and positions (d) did any of them attend, as voting delegates, the nominating meeting of the Quadra Liberal Association in Vancouver on December 5, 1977?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: The Minister of Energy, Mines and Resources reports as follows: see Beauchesne's Parliamentary Rules and Forms, citation 171 (dd).


Mr. Mazankowski: 1.	Since 1951 to date, were outbreaks of scrapie recorded in Canada and, if so (a) how many (b) in what breeds was the disease actually diagnosed, not including contact sheep?
2.	Was the policy of slaughtering only the infected sheep and their progeny changed to one of slaughtering the whole flock and any other breed that might have been in contact with the diseased sheep and, if so, for what reason?
3.	From 1951 to date, what was the full amount of compensation paid for sheep that were slaughtered?
4.	From 1951 to date, what was the cost for the administration of the scrapie policy?


Hon. E. F. Whelan (Minister of Agriculture):: 1. Prior to 1956, records on scrapie do not differentiate between actual outbreaks of the disease and contact flocks. However, from 1956 to date, the following is available: (a) 39. (b) Suffolk.
2.	When the scrapie program was first introduced the infected flock, sales from that flock, and progeny of diseased sheep were slaughtered. In 1963, research on scrapie indicated that the disease was mainly hereditary. Therefore, the program was modified and only the progeny of the suspect sheep were slaughtered. However, in 1976-77 the causal agent of scrapie was isolated and classed as a virus which indicates that the disease is spread by contact, although certain herds, families and blood lines may be more susceptible to the disease than others. Consequently, the program has been amended and, effective May, 1978, the infected flock, sales from the infected flock, and certain progeny will be slaughtered.
3.	$757,686.50 (from 1956).
4.	$850,000 (from 1956).


Yvon Pinard: Mr. Speaker, if question No. 1,293 could be made an order for return, this return would be tabled immediately.
Point of Order-Mr. Cossitt


Mr. Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered.
Is it the pleasure of the House that question No. 1,293 be deemed to have been made an order for return, with the return to be tabled forthwith?


Steve Eugene Paproski: Agreed, Mr. Speaker.


Mr. Speaker:: Agreed and so ordered.


Mr. Jones: 1.	Has the province of New Brunswick been awarded any grants under the Citizenship Branch of the Department of the Secretary of State and, if so, please give details?
2.	Has the province of New Brunswick been awarded any grants under the Official Languages Minority Groups Branch of the Department of the Secretary of State and, if so, please give details?
Return tabled.


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


Some hon. Members:: Agreed.



POINTS OF ORDER


Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise on a point of order. I have risen a similar type of question at least four or five times before to ask the Parliamentary Secretary to President of Privy Council (Mr. Pinard) what has happened to the answers to questions Nos. 30 to 54, many of which have been on the order paper for two years. A week or ten days ago I asked for an assurance that these questions would be answered before the House was dissolved for an election.
When I look at the questions I feel that probably the answers would be extremely embarrassing to the government, and that may be the reason for the hesitation. Nevertheless, in fairness to the people of Canada I think they are entitled to have the information I have asked for and that other members have asked for here in the House of Commons. We should have the right to have the questions answered, in spite of what the hon. member for Northumberland-Miramichi (Mr. Dionne) said a few moments ago.
I specifically draw attention to question No. 43 which involves the Minister of Transport (Mr. Lang) and his use of his frank-I have asked questions about this before and they are unanswered-to send letters to all Liberal members of parliament telling them how to explain to other Liberals why he spent three quarters of a million dollars of taxpayers' money travelling on public aircraft. That question has been on

April 20, 1978
The Budget-Mr. McKenzie
the order paper for over a year, so it is taking a long time to be answered. I think those members on the other side in glass houses, who have been throwing stones this afternoon, might take a lesson from the Minister of Transport who committed the same offence.
Can the parliamentary secretary give an assurance to the House that questions Nos. 30 to 54 will be answered before the House is dissolved for a general election campaign? I do not want to hear explanations like, "We have been good to you and have answered a lot of your questions." I am referring to questions Nos. 30 to 54.



MR. JONES-DELAY IN ANSWERING QUESTIONS NOS. 143 AND 145

Leonard C. Jones: Mr. Speaker, I rise on a point of order. I have brought this up several times. Starred question No. 145, which was on the previous order paper, still has not been answered. I brought this to the attention of the parliamentary secretary several times and asked that he use some type of boxing glove to get some of those fellows out of the corner. This information should be easily available, likewise with respect to question No. 143.


Yvon Pinard: Yes, as far as the previous statement is concerned, Mr. Speaker, I see that question No. 1,293 which has been made an order for return today is very substantial, and in that sense the hon. has an answer. As to his question indicated by an asterisk, I shall check, and I hope the hon. member will be able to abtain an answer as soon as possible. As for the hon. member for Leeds (Mr. Cossitt), if I am not mistaken, I think that in the previous session we answered 264 of his 281 questions on the order paper-94 per cent of his questions, Mr. Speaker. I happen to know that in this present session a great number of his questions have been answered. I simply ask him to be a little patient. In spite of what he says, I can assure him that parliament has always been good to him, and that we shall continue to be so.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, April 19, consideration of the motion of Mr. Chretien that this House approves in general the budgetary policy of the government.
A. Daniel McKenzie: Mr. Speaker, last evening I referred to a document put out by Peter Henry

Jerch and Associates of Winnipeg, a financial consulting firm, which assists Canadian businesses to move out of Canada. At the present time they are acting on behalf of 64 businesses that are planning to move due to the political climate created by the Liberal government over the last ten years. In a document he sent to me, Mr. Jerch writes as follows:
Countries or for that matter provinces which have nationalistic, leftist or extremely strong bureaucratic tendencies make striving and successful entrepreneurs feel uncomfortable.
They do not feel comfortable in Canada. That is why Canada is the greatest boost to the United States economy today. States are fighting among themselves as to which one will be called the eleventh province. Kentucky was first to ask that they become the eleventh province. In today's paper the State of Florida says that they are the eleventh province. These states will have to get in line, Mr. Speaker. Kentucky claimed first that they were the eleventh province, and Florida will have to become the twelfth province.
Mr. Jerch points out that, through the loss of investment, jobs are lost. He gives incidents here of the number of firms which moved out of Manitoba and states that this cost 4,000 jobs in that province. In a second document supplied to me by Mr. Jerch he points out that, of the 42 firms he is dealing with, the amount of investment which is moving out of the country will cost Canada up to 13,000 jobs. These are small and medium-size businesses. Mr. Jerch is just one investment counsellor. It would be interesting to get statistics from all investment counsellors and lawyers across Canada in regard to the exact amount of money leaving Canada, together with the number of businesses which are leaving also.
Since I spoke yesterday there are more articles in today's newspapers regarding this mass exodus of capital and business leaving Canada. As I pointed out yesterday, this budget is doing nothing to keep anybody here. It is a useless document. This particular article I am looking at is headed "Florida's Sunshine Is Canada's Rain In Construction Industry". The article states:
Several Ottawa firms are among a growing number of Canadian developers providing employment for Florida construction workers.
This is occurring at a time when 166,000 Canadian construction workers, about 23 per cent of building trades work force, collect unemployment insurance.
But it's unlikely the Canadian worker would be any better off if those firms stopped their foreign projects.
"If a company deals from the heart and ends up bankrupt in five years, staying home is a worse decision" than moving to Florida, William Nevins, chief economist for the Canadian Construction Assoc., said Wednesday.
Construction companies heading south, he said, reflects a weakness in the Canadian economy. In the corporate supermarket, there are 10 times as many items in the U.S. as there are in Canada and profits are better.
This article appeared in the Ottawa Citizen, today.
As I pointed out yesterday, the Liberal members who have spoken on this budget so far have made absolutely no mention of the mass exodus of capital and business.
There is nothing in the budget. The Minister of Industry, Trade and Commerce (Mr. Horner) contributed absolutely
April 20, 1978

nothing when he spoke yesterday in this regard. He told us investment is on the increase in Canada. It is the exact opposite. Canada is no longer an attractive country in which to invest. We cannot even hold businesses or money here, never mind trying to attract additional investment funds.
When the Minister of State (Small Business) (Mr. Abbott) spoke on this subject, all we got was a lot of smart alec cracks in his speech. He made no contribution at all on what the government will do regarding this serious problem. I have compiled considerable statistics concerning this matter over the past year.
There is another article which appeared in today's Globe and Mail. It is a report from Washington. We get more statistics on the outflow of investment from the United States than we do from Canada. The article is headed "Canadian Investments In U.S. Show A Dramatic Move Upward". The article says:
A dramatic rise in Canadian investment in the United States is indicated by figures just published by the U.S. Commerce Department.
Maybe a lot of Canadians do not understand how this affects them. It is also one of the reasons we have such record high unemployment and why unemployment is costing Canadians $8 billion a year. This amount will increase yearly, and it is because of the policies of this government and the political climate which the Prime Minister (Mr. Trudeau) and his cohorts have created in this country over the last ten years. Many people, when they see the opinion polls and they see there is a chance that this government will be returned, will accelerate this movement of business and capital out of Canada. This is evidenced by the articles appearing daily in newspapers.
As well, the CTV television network sent a film crew to the southern United States recently, and interviewed Canadians who are moving there with their businesses and money. These people were asked why they left Canada. They answered that they left Canada because of the political uncertainty here. They put the blame on the Prime Minister. If he is returned to office in the next election, this trend will continue.
I guarantee that if this government is returned to office, Mr. Speaker, it will bring in exchange controls. Heaven help us if this government is returned to office. Canada is a country with the greatest potential in the world, and it is being destroyed by this socialistic government and its bureaucratic tendencies. This was pointed out by the investment counsellors who are assisting businesses to move out of the country. I see the hon. member for Pontiac (Mr. Lefebvre) is getting a chuckle out of that.
The United States commerce department statistics show Canadian direct investment in United States companies jumped by more than S500 million in 1976 to $5.9 billion. This accounts for about 10 per cent of all foreign direct investment in the United States. Only the Netherlands has a larger stake in American industry. Canadian companies and individuals had $10.67 billion invested abroad at the end of 1975. In addition to the United States, other big recipients are Brazil and Australia.
The Budget-Mr. McKenzie
In Florida alone, Canadian property ownership is in excess of $450 million state wide, and Canadian development consortiums plan to spend in excess of $1.3 billion more in the next 15 years.
Here is an article from the Miami Herald. It states:
"The Canadian dollar is buying up Florida in an escalating and often frenzied scramble to find a haven from political and economical uncertainty at home ...
If we have this political uncertainty now, we will certainly have it if this government is returned again after the next election. The article goes on to say:
... Canada's largest financial and development corps alike are exporting their savings and surplus capital in a classic flight to find sanctuary.''

from this government.
In 1977 B.C. Forest Products Ltd. spent $70 million to take over a Minnesota paper company plant. Alcan Aluminum spent $140 million to take over Revere Copper and Brass in Alabama. It is too bad we could not get them to expand here and take something over in Canada.
Although statistics are hard to come by, California financial experts agree Canadian capital is flowing south in unusual volume, continuing a two-year trend that shows no sign of slackening.
The chief economist of the Royal Bank of Canada, Mr. Ralph Sultan, stated:
We have to get our house in order and make it more attractive for private capital, or else Canada will become a sleeping backwater. Capital lacks loyalty and there's not much government can do.
There is lots that the government can do. Mr. Sultan goes on to say:
Capital goes where returns are most attractive.
They are most attractive in the United States at the present time. Mr. Frank Augsbury of the St. Lawrence County Economic Council (New York), who is in Canada assisting Canadian business moving south of the border, stated:
We aren't trying to raid Canada, but if they're moving out we'll welcome them with open arms . . .
When Olympia and York Developments Ltd. of Toronto laid out $350 million in April, 1977, to buy nine skyscrapers in New York city, it became overnight the largest Canadian investor in American real estate. In addition, 26 per cent of the assets of the Trizec Corporation of Montreal ($192 million) are invested in U.S. real estate. Cadillac Fairview has invested approximately $100 million in U.S. real estate.
In Texas, and maybe that state will be the thirteenth province, a Dallas broker estimates that a quarter of a billion Canadian dollars are invested in Texas alone. In 1976, for example, the Canadian Imperial Bank of Commerce paid $25 million for an apartment complex in Houston. Moreover, Canadian life insurance companies have acquired a half billion dollars worth of U.S. property in the last five years in Atlanta, Chicago, Denver, Los Angeles, and Philadelphia.
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April 20, 1978
The Budget-Mr. McKenzie
The governor of Louisiana was in Toronto yesterday speaking to Canadian businessmen, encouraging them to move to Louisiana. He pointed out that about $7 million or $8 million of a $2.3 billion investment in Louisiana recently came from Canada directly, and maybe $100 million indirectly. The greatest portion by far went into oil and gas ventures, he said, and most of the rest into chemical plant developments.
Next week representatives from Tennessee will be in Toronto, speaking to Canadian businessmen, assisting and encouraging them to go to the United States. The Memphis area chamber of commerce will be in Toronto next week to speak to businessmen to encourage them to move out of Canada.
I have another recent article entitled "Western Canadians Buying Into Texas, Colorado". It can easily be seen how widespread this is. We are on a disaster course in this country, but all we get is this ridiculous budget. There is absolutely nothing in it about how they are going to tackle this very serious problem and trend. Where will it end? The way we are going, all that will be left here will be the working people, the peasants and the Liberal government. The article states that they are going to Texas and Colorado as a result of political uncertainties. That is the reason behind the money exodus. All we have had in the last ten years is a lot of uncertainty in this country through the total and complete mismanagement of the nation's business by this government.
Here is another reason why many of the businesses are leaving this country:
Related to the preceding point is the problem of too much government. The ever-increasing size of the federal public service and the problems created by such expansion are factors which hinder business activity. Businessmen are forever hassled by federal regulatory agencies, boards, departments, bureaus, offices and councils with their myriad of rules, regulations, laws, edicts, orders, decrees and statements. In short, they are inundated with paper work. Moreover, should a businessman disagree with a ruling, it is extremely difficult to appeal to these bodies and the time and effort involved usually preclude an appeal anyway.
That is not the way they operate in the United States. That is why they are clearing out of Canada. In the February 28 edition of the Ottawa Citizen, Neil Wood, president of Cadillac Fairview Ltd., is quoted as saying:
We're not selling out Canadian assets, nor turning our back on good Canadian opportunties, but they are few and far between. Government delays in getting approvals continue to frustrate us in Canada compared with U.S. where development is welcome.
This matter has been raised a number of times. The Prime Minister, the Minister of Industry, Trade and Commerce, and the Minister of Finance were questioned about what action they were going to take to encourage business and investment to stay in Canada. We did not get cut answers. They will not even sit down and talk to these people to encourage them to stay here. They bring in a meaningless budget, thinking that will be the answer.
Government involvement in the economy has increased to the point where 42 per cent of our gross national product, the sum of all goods and services produced in Canada, is produced by the government. If present trends by provincial and federal

governments continue, 88 per cent of all goods and services produced in Canada by 1990 will be under the state, and only 12 per cent will be left for private enterprise. In policy making, the only thing the Trudeau government can think of is socialism. For example, if oil prices rise, they set up a national petroleum corporation. The solution to the problem is to reduce the size of government slowly, not through mass layoffs of dedicated civil servants, but by attrition. In addition, wasteful make-work projets could be eliminated. If governments want to make work, the best way to do it is through proper incentives to private industry. That is something this government does not want to do.
It is very strange when we question the Prime Minister and others on this. What are their motives that they do not want to deal with this problem or talk about it? When they bring in a budget, there is nothing in it to indicate how they intend to deal with this very serious trend.
With regard to our very serious inflation which has been caused by this government, Milton Friedman, Nobel Prize Laureate in Economics, stated:
There is only one place where inflation is made in Canada and that is Ottawa. The unions don't make inflation for a very simple reason; the unions do not own a printing press on which they can turn out those multi-coloured pieces of paper called money. The reason you have inflation is because the government has been printing too much and spending too much.


Mr. Deputy Speaker:: Order please. I regret to interrupt the hon. member, but his time has expired.


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: At this early stage of my intervention, Mr. Speaker, I should like to deal briefly with some of the remarks which the hon. member for Winnipeg South Centre (Mr. McKenzie) has just made, for he is well known in the House for his severe criticisms of the government generally, but more specifically of the right hon. Prime Minister. I suggest that his repeated attacks against our Prime Minister form a personal vendetta against him; for this reason, I do not think he will gain much support from the Canadian public because politicians seeking revenge are not likely to convince a great many people.
If I have a piece of advice for the hon. member for Winnipeg South Centre, it is to limit his criticisms to the course of action people take and not to the people themselves, because behaving the way he does now will not improve his position.
Mr. Speaker, we are going into the last day of the debate on the budget brought down on April 10 last by the Hon. Jean Chretien, an occasion on which I should like to congratulate our colleague for his first budget, which we all recognize as having been difficult to prepare. Indeed, Mr. Speaker, few Canadians expected to receive great gifts; aware as they are of the economic situation of their country, Canadians expected the Minister of Finance to be responsible and present them with adjustments to the fiscal situation as it stands; they did not expect him to make any great concessions, neither in the field of taxes nor in that of new programs requiring additional
April 20, 1978

government expenditures. That, Mr. Speaker, because Canadians realize that in years past the Canadian government made considerable effort to increase expenditures to give new impetus to our economy, and those substantial expenditures, added to tax cuts, personal and corporate, resulted in the growth of our national debt.
For the year just ended we have incurred a deficit of more than $8 billion. For the year which begins, with the new budget brought forward and the few concessions made, the deficit of Canada will probably exceed the $11.5 billion mark. It is obvious that with so little elbow room the Minister of Finance could not, and the Canadian people recognized this, give substantial income tax cuts to Canadian consumers in particular nor could he increase substantially the expenditures in the areas which could have contributed to reduce unemployment. He did so, however, by rearranging some existing measures in order to increase their impact on the development of our economy.
This budget, Mr. Speaker, was well received and perceived by responsible people both in the press and in industry as a whole. It was well perceived because it has been seen as the result of both an in-depth study by officials from the Department of Finance and of an objective decision from the minister and the government in the face of our responsibilities. Even though an election will probably be called soon, we did not want either to take measures which could have been interpreted as a step aimed at gaining the electorate's favour, because it would have increased our deficit. We are aware that Canadian voters recognize the work that has been done by this government and we are sure that they will make the right judgement when the election is called. I am personally aware of it and so are my colleagues. And as even the previous speaker said, the polls that have been taken indicate beyond any doubt that the Liberal party and Pierre Elliott Trudeau's government will be returned to office.
Mr. Speaker, we can say about this budget that, in spite of the financial limits the minister was facing, he succeeded in proposing measures likely to increase the general demand of our economy. On one hand, federal participation in the sales tax cut would increase consumption and benefit all Canadian consumers. On the other hand, other measures such as those related to research and development, to energy development activities, to investments in the railway system would represent incentives to the general industrial growth of Canada. Finally, maintaining for another year the tariff reductions established in 1973 on a wide range of consumer goods would avoid the higher retail prices those goods would otherwise have shown, and therefore would benefit all Canadian consumers.
Following the discussions held during the recent meetings between federal and provincial governments, meetings which, as you are aware, were held in December and January and
The Budget-Mr. Lessard
have culminated in a federal-provincial conference of first ministers in February, it became apparent that the involvement and co-operation of all sectors were a necessity in a number of areas.
The budget introduced on April 10 represents an important step toward sharing responsibilities between the two levels of government in so far as the stabilization policy and, more particularly at this time, the stimulation of the economy are concerned. Of course, measures like those related to research and development activities as well as the development of energy can potentially benefit all parts of Canada and might possibly benefit some provinces more than others. However, it is through more specific action, and I am thinking here of the grants for the retail sales tax cut, that the federal government, despite financial constraints and the need to boost the economy in general, has shown its concern with the importance of regional problems. On the one hand, this action is indeed very favourable to the Atlantic provinces, which will have nothing to pay for the sales tax cut and will therefore not bear any additional tax burden. On the other hand, this action will also be greatly beneficial not only to Quebec consumers but also to the producers of that province where a high percentage of Canadian manufactured goods are produced.
I hope, Mr. Speaker, that during the current negotiations, the Quebec government will recognize the usefulness of the proposal put forth by the federal government and the Minister of Finance, and that it will agree to take part, with the other Canadian provinces, in the effort to reduce the impact on consumers of the provincial retail sales tax. And I do think that the fact that this proposal was accepted, and the Quebec decision to cut even more the sales tax on certain products, is a direct recognition of the negative impact the rentail sales tax has on the general economy. When one considers that first analyses on the potential impact of that tax cut, and indications are that in Quebec more than 10,000 jobs would be created rapidly following those sales tax reductions, one realizes, Mr. Speaker, the impact the role of the provinces has on the development of the federal and provincial economies, the responsibility as a result of the tax tool they have to influence the creation of jobs in Canada and on their territories. They have proven, Mr. Speaker, that they have a role to play in fighting unemployment and that it is not only the responsibility of the federal government to come up with measures to create jobs and get the economy going again.
I think it is obvious that provincial governments through their budgets, their tax measures, their expenditures and their actions, also have a role to play and a very important responsibility in the performance of our economy and the rate of unemployment which is now afflicting Canada and which we here in Ottawa denounce. But the means of intervention at the federal level also have their limitations, and we want to indicate to Canadians that we are prepared to recognized and take our responsibilities and to take the necessary means to
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The Budget-Mr. Lessord
counter unemployment; but that responsibility is not incumbent only upon the federal government and must be recognized and shared by the provinces which are ever more anxious to see the federal government decentralize and give the provinces greater powers and greater revenues.
It is quite obvious that if the provinces are given greater powers and greater revenues, they will have to recognize more fully the responsibilities they have with respect to the conduct of the economy and the creation of jobs to fight unemployment. They will not be able to get more powers and then continue to believe that only the Government of Canada will be responsible for the problems and they will get the credit for the accomplishments.
The minister of finance of Quebec has just tabled his budget, and as was noticed, he anticipates in the budget that the federal government's contribution through tax transfers from the federal treasury to Quebec will exceed $3.3 billion. That is a contribution of over 25 per cent to the provincial budget, Mr. Speaker, not to mention other transfer payments from the federal government to the province of Quebec and its residents. We can be sure, Mr. Speaker, that, as some hon. members, some colleagues in the House have said before, if we compare Quebec's contribution to the Canadian economy and to the federal budget with the federal government contribution to the Quebec economy and Quebecers, I feel that, generally speaking, they are the winners. As recently as last night, when speaking to a group of citizens of Quebec, I said that when an agreement is concluded-and recently I have signed auxiliary and joint agreements with the government of Quebec-our provincial colleagues from Quebec remind us that it it a fair return of all taxes paid by Quebecers to the federal government.
I would like to take this opportunity to recall that we are at the end of April and that, as Canadian citizens, we must fill our income tax returns. As I have noted myself once again a few days ago, we all know that we pay more income tax to the Quebec government than to the federal government. And I do not know of any contribution by Quebec to federal government expenditures. Quite the opposite. Rather I note very large contributions from the federal government to the expenses of the province of Quebec and transfer payments to Quebec residents, and I pay more income tax to Quebec than I do to the federal government. And when I sign an agreement with Quebec, under all DREE programs, the minimum federal contribution is always at least 60 per cent, Mr. Speaker.
Contributions from the federal government amount to 60 per cent while those of the province are only 40 per cent. This is proof that we are pouring back more money into Quebec under our tax programs and shared cost programs than we are collecting from it. Mr. Speaker, in the October 1977 budget the finance minister also included an investment tax credit aimed at increasing the stimulating effect in DREE designated areas. The 5 per cent credit which was already in force then
[Mr. Lessard.l
and which was to expire on June 30 has been extended for three years. That credit has been raised to 7.5 per cent in certain provinces, such as Saskatchewan, Manitoba, northern Ontario and the designated areas of Quebec. In the Gaspe peninsula and the Maritime provinces their credit has been brought up to 10 per cent. Furthermore, the finance minister once again has listened to certain recommendations which we from DREE make regarding the regions. Last January he announced an employment tax credit program which is higher in DREE designated areas. In his budget, when he says that the Atlantic provinces will not have to pay back that temporary cutback of the retail sales tax, he recognizes once again the contribution of DREE toward designated areas and I think that in the name of these areas, I must thank the minister for having paid attention to the recommendations which we made to him in favour of designated areas, the areas in need of help.
Despite the financial constraints which face the government, my department has continued to undertake significant regional development initiatives. In the last fiscal year, for example, 13 new subagreements were signed, representing federal commitments of more than $377 million, and a number of amendments were made to existing subagreements. Fourteen of them increased the funding under those agreements. These amendments represent additional federal commitments of $362 million. If you add both amounts you will find that in 1977-78, under the general development agreements signed with the ten provinces, more than $739 million was committed in federal funds.
Included in the above agreements are: a new subagreement on tourism in Newfoundland; on forestry, and tourism with Sysco in Nova Scotia; an agreement to provide for further development in northeastern New Brunswick, and a second agreement on the development of agriculture in that province; major amendments to existing agreements with Quebec on agriculture, key highway networks, forest development, industrial infrastructure, and a substantial new agreement for sewage treatment facilities in Montreal; a new agreement with Alberta respecting the development of the northlands in that province; and important new agreements on industrial development, agriculture, and rural development with British Columbia.
Recently, in the current fiscal year, I signed a significant new agreement on tourism with Quebec, and other new initiatives are under discussion with various provinces at present. In fact we signed agreements with practically all the provinces. Tomorrow we will be signing an agreement with the province of Manitoba. This is the kind of collaboration and support DREE is prepared to give to provincial governments to help develop their economies.

Mr. Speaker, the department is committed in each one of the areas. Our department allocates its budgets depending on
April 20, 1978

the needs of the region. It cannot of course cover everything, but in addition to giving more to the provinces which need more, one must also consider the fact that within the framework of these agreements, we are also contributing to an extent which varies, for instance, when we commit $50 million in a province and that this amount represents 90 per cent of the expenditures, the federal effort in this province is clearly superior to what it does in another province where it also spends $50 million, but where this sum represents only 60 per cent of the expenditures, as is the case for Quebec.
Mr. Speaker, I am saying this because we sometimes hear criticism from the opposition and outside the House to the effect that the departments do not allocate funds objectively in accordance with the needs of the various regions. They are forgetting that two factors are involved: the total amount allocated and also the proportion that this represents of the total expenditures of both governments under these agreements. I believe that when we consider this factor, we can better appreciate the substantial effort made in the areas which have greater disparities than others.
Since the time at our disposal is limited, I shall unfortunately have to limit my comments because I would have liked to talk about many other factors. We spent a substantial part of our budget in the Atlantic provinces, but this is because this area has much more obvious needs than other areas of Canada. I recognize that other parts of Canada also have needs, but in co-operation with the provinces, we are at least able to take care of the major priorities.
I would like to come back to Quebec in particular, Mr. Speaker, because two attitudes prevail from time to time in the House and elsewhere. Some say that the federal government is doing nothing to help Quebec fight against unemployment, to develop its economy, that we are content to observe Quebec fighting against its difficulties and that we are even pleased when we see a government like that of the Parti Quebecois have problems and that we are not in the least sympathetic to the problems and the proposals that are made.
On the other hand, when we help certain regions-and I shall prove that we do help them-others blame us and say that all federal government funds go to the province of Quebec. Mr. Speaker, those two positions are wrong. They are wrong because on the one hand we help the province of Quebec, this is true, but on the other hand we do everything in our power with the money at our disposal to help the government of Quebec and Quebecers particularly to get out of their present difficulties, especially as concerns unemployment.
Mr. Speaker, since I have been responsible for DREE, I have looked at what we have done in the province of Quebec. If we consider the agreements with the province of Quebec alone, on March 29, 1976 I signed four agreements with Quebec; if you sum up the share of each government they amount to a total of $162,700,000. The share of DREE or of the federal government, was $97,428,000. Those are long-term
The Budget-Mr. Lessord
commitments. On April 21, 1976 we signed another agreement in Quebec for the development of a pulp and paper mill and the federal government has committed $30 million for that project, an investment amounting to about $300 million. On June 16 another agreement was signed, this time in Mirabel for the development of the industrial park called Spicam, another $13 million commitment from the two government levels, including $8 million from the Department of Regional Economic Expansion. On June 27, 1977, under the PQ government, both government levels earmarked $440 million for three agreements concerning highways, agriculture and forestry. The DREE contribution was $200,880,000.
On January 24, 1978, $77,600,000 for the industrial infrastructure, including $46 million from DREE. Recently Montreal has received $150 million for three projects. On April 6 we signed an agreement on tourism development at a cost of $76 million, including $46 million from the Department of Regional Economic Expansion. So when I hear remarks to the effect that we do nothing for the province of Quebec or that we give everything to the province of Quebec, believe me, Mr. Speaker, that lack of understanding on both sides puzzles me-


Steve Eugene Paproski: May I ask the minister a question? [Translation]


Mr. Deputy Speaker:: An hon. member is asking if the minister would allow him a question.


Steve Eugene Paproski: I would like to ask the minister whether the figures which he has just given for the different projects in Canada are for one fiscal year or are they for continuous programs? I did not get it, because my translation was not on.


Marcel Lessard: All those amounts were committed during the fiscal year, but the spending of the cash flow is being spread, depending on the agreement signed, over a period of one to five years.

In addition to those agreements, Mr. Speaker, everyone knows there is the special area of Montreal where it has been acknowledged that there was a specific situation in the sense that over half of the Quebec unemployed are concentrated there. The cabinet has recognized that under the circumstances, in addition to the activities of other departments, my department could intervene. We have done so and to this day we have assisted more than 80 companies, new ones or older ones seeking help to expand or modernize. We are not ashamed of it, first because we are contributing to economic development and second because we are fighting against unemployment. It is part of our responsibility, but we are not the only ones involved. There is a provincial government which should play its part. Right now, I really wonder if they do so.

April 20, 1978
The Budget-Mr. Lessard
I see, Mr. Speaker, that the time allotted to me is slipping by and I would like to deal with other areas and not only with Quebec. In western Canada, we have signed agreements with each province. In the three prairie provinces, we have programs regularly in place to develop local infrastructures, for example in some forty communities through the prairie provinces, because we want to strengthen the structure of those communities to become growth centres through the prairies in order to hold back the population and provide services to them for the benefit of the farm industry first of all, which is very important, because when a farmer must drive 50, 60 or 100 miles to get a little service he gets discouraged and we often have seen farms deserted because of that situation. That is why the agreement on the development of local infrastructure in the prairies is a very valuable one which was signed in 1972, amended in 1975 and is presently going on. As I said, we have concluded five agreements in British Columbia during the last fiscal year and negotiations are still going on with that government. We have also concluded some agreements in Ontario as we also did in the maritimes. Before concluding, Mr. Speaker, I would like to talk about a corporation which is under my responsibility as a minister, the Cape Breton Development Corporation.
I would be remiss if I did not mention the valuable contribution to regional development made by the Cape Breton Development Corporation. Devco took over mines which were in terrible condition in 1968. It was felt then that the only future was humane phasing out of coal mining in Cape Breton. We in the government are proud of the creative and flexible mechanism which we created. I think it is fair to say that we all owe a debt of gratitude to the present Deputy Prime Minister and President of Privy Council (Mr. MacEachen) who ensured that Devco would be a flexible tool. How flexible has Devco been?
Devco was able to react very quickly to changes in the world energy market, able to change policy from a phase-out of worn mines to stabilizing coal production, able to seize an opportunity to sell metallurgical coal, and able to move toward coal industry expansion to meet strong future thermal and metallurgical coal markets.
Instead of closing mines, Devco will further rehabilitate No. 26 mine and develop a major new mine over the next five years, if final feasibility and viability studies are positive. The total cost of these and related developments will be close to $265 million. The new Donkin mine will add about 1,200 jobs in industrial Cape Breton. Instead of the extremely poor condition of the mines prior to Devco, while we are not without problems, this government is proud that Devco miners and management have developed the Lingan mine into one of the most efficient, perhaps the most efficient, long wall coal mine in the world.
In an age when it is claimed people do not want to work, Devco management and miners volunteered by the hundreds to go down five miles of tunnels out under the ocean to fight a fire in No. 26 mine several years ago. Why? Because they wanted to save their mine and their jobs.
What began as a welfare operation is transforming itself into a viable, proud industry. That is a result of the regional development policies of this government. There is work still to be done before the caterpillar becomes a butterfly, but we on this side know it will succeed. We know Cape Bretoners can do it, and we will support their efforts.
We stand now on the brink of over $265 million worth of new development in the coal industry. We got here not because someone said you should do this and that, but because DREE, working hand in hand with the province of Nova Scotia and Devco, found the coal reserves to make a new mine and to make the rehabilitation of No. 26 mine possible. These accomplishments are not accidents. They are the result of foresight, planning, hard work, co-operation within the federal government, and co-operation with the province of Nova Scotia. This government delivers. Also I refer to Devco's bed and breakfast program in tourism, Devco's revitalizing of sheep farming operations, Devco's oyster farming development, Devco's trout development, and many other things in which it has been engaged. Devco has a new president, Mr. Bob Matheson. Personally I have full confidence in him. He is competent, and I am sure he will lead Devco to more successes.


Steve Eugene Paproski: Which constituency is he running in?


Marcel Lessard: Mr. Speaker, I think that Mr. Matheson is not in the race. He heads Devco. He comes from Cape Breton. He is the son of a miner who has made a career as a lawyer, just as my hon. colleague of the opposition, and who wants to take up the challenge of contributing to revive the economy of the area where he was born and where he grew up. Mr. Speaker, I could go on, but I see that you are about to interrupt me so I will close by saying that the budget presented by the Minister of Finance (Mr. Chretien) is an excellent one, that it has been well received by the general public and that it will certainly win the support of the majority of members of the House when the question will be put for the last time, and I wish to thank him.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I have not participated in too many budget debates in the past, but I am privileged to do so on this occasion. The single item in this budget rated by most people as being the most important was the provincial governments' involvement in their provincial sales tax reductions. Certainly it has provided most of the after-budget news commentary and comments in this parliament.
However, the single item which appealed to me was the inclusion of an amendment to the capital gains tax law that provides for the deferral of capital gains in intergenerational

April 20, 1978

transfers of family farms and partnerships. I am sure hon. members on both sides of this chamber will recall that I was somewhat enthusiastic over this specific item in the budget. Perhaps they will recall also that this same item provoked the greatest spontaneous applause in the House over any other budget item. It marked the successful culmination of over five years of persistent, personal effort, commencing in 1973 with Mr. Turner, followed by Mr. Macdonald, and finally by the present Minister of Finance (Mr. Chretien).
In retrospect, this change in the capital gains tax laws had to come, or we would have seen the end of our family farm and ranch way of life due to the ravages of seven years of galloping land inflation and the availability of foreign capital. In any event, I thank the hon. Minister of Finance and his policy advisers for this particular budget item. I know of many long-established family cattle ranch units which would join me in expressing this appreciation to the minister. I hope that his parliamentary secretary will convey that personal message to the minister. I am sure that the minister and his parliamentary secretary will understand when I suggest quite seriously that I feel that I can take considerable credit for this tax change in this budget.
I would like now to make some remarks about various energy aspects of the budget, in particular respecting remarks made by the Minister of Energy, Mines and Resources (Mr. Gillespie) in this debate on April 13. The minister was speaking about a Canadian strategy to establish an energy policy, and he had pointed out that it had three basic elements. The third element was of interest to me, which "was to develop our own indigenous supplies of oil, particularly the non-conventional sources-the tar sands and the heavy oils of western Canada." I mention this reference to draw attention to a new source of heavy crude that exists now in my Medicine Hat constituency, and that is on the Suffield military reserve.
I am sure members are aware that there is now substantial production of natural gas from this field. It is being produced by the Alberta Energy Company that is owned almost totally by the people of Alberta. This Suffield gas production will increase steadily as the present drilling program continues. What is not generally known is that heavy crude is also being produced in modest quantities in that same Suffield area, and there are now about 30 heavy crude wells in various stages of drilling and production.
Heavy crude oil, of course, is more expensive to produce and is priced below conventional oils. Thus there is a very valid reason for that extra world price provision provided for in Bill C-19, which is the Petroleum Administration Act that was passed last Monday night.
At the end of that debate I made a short intervention in support of the inclusion of these Suffield heavy crudes in the group of heavy crudes that will enjoy these higher world prices. The Minister of Finance has recognized the need for heavy crude production in this budget by extending the manufacturing and processing tax incentive to upgrade heavy oil.
The Budget-Mr. Hargrave
This does not include plants established in relation to bituminous sand mining projects. This incentive in the budget should apply to the Suffield heavy crudes.
The economics of producing both gas and oil at the shallow Suffield depth can be appreciated from a comparison of average drilling costs in western Canada to offshore costs based on 1976 figures. These comparisons were recently published in the bulletin entitled "Energy Update 1977" which was put out by the Department of Energy, Mines and Resources. I wish to give a few quotations from pages 13 and 14 of that bulletin. On page 13 it says:
The combination of higher well-head prices and provincial drilling incentives resulted in a dramatic increase in exploration spending in western Canada. This drilling activity paid off in a significant expansion of our gas reserves as 80 per cent of the record 6,300 wells drilled were for natural gas exploration and development.
Additions to our natural gas reserves from shallow producing horizons such as those found in the Suffield Block in southeastern Alberta have been well ahead of the annual consumption rate. These drilling successes have spurred additional programs across the prairies.
I should point out, Mr. Speaker, that this very positive comment is mainly due to Alberta's excellent incentive policies.
There is an interesting table of costs listed in this same bulletin on page 14, which is headed "Average Drilling Costs in Western Canada and Offshore, 1976" and gives the costs of four locations, Alberta; other western provinces; Northwest Territories, Yukon and the Arctic, and the fourth one, east coast offshore. I would like to quote two costs. One is the cost per total foot and the other is the cost per total well. First of all, the cost per total foot: Alberta $33.98; other western provinces $57.16; Northwest Territories, Yukon and the Arctic $770.70, and east coast offshore, $243.14.
Going to cost per total well, we get into the big money: in Alberta again, $108,129; other western provinces $283,482; in the Northwest Territories, Yukon, and Arctic $7,848,444. And on the east cost offshore, $4,818,200. It should be noted that these are actual total costs per producing well and do not include development and exploratory costs, which are usually much higher.
It will surprise no one in this chamber that I want to make a few comments about our Canadian cattle industry. I want to make a brief review of the financial side of our total Canadian beef cattle industry, and I want to say quickly that that side is certainly not the panacea that the Minister of Agriculture (Mr. Whelan) suggested in his budget speech a couple of days ago. In my opinion, the last three years-1975, 1976 and 1977-have been the most difficult years in the modern history of our cattle industry, and that includes the 1930's. This is about a 40-year period.
The single worst year was 1976. This is in relevant terms, of course, in relating market prices to production costs. Probably the most factual record and research in this critical three year phase of Canada's cattle industry is contained in a recent publication entitled "Economic Research Report", and it goes on in the title with a little more detail, "An Analysis of the Costs and Returns in the Canadian Beef Industry, 1970-

April 20, 1978
The Budget-Mr. Hargrave
1977" rep0rt was pUt out by a firm named Broadwith, Hughes and Associates Ltd. of Guelph, Ontario, and was dated September, 1977. This report was completed at the request of the Canadian Cattlemen's Association.
One of the authors, Mr. David Hughes, was a former senior staff officer of the Food Prices Review Board. I would like to give some very significant quotations from the chapter entitled "Summary and Conclusions":
-aggregate net income in Canadian feedlot operations showed generally increasing returns between 1970 and 1973 with 1971 and 1973 being exceptionally good years. A dramatic reversal of fortunes occurred in 1974 when net income fell from plus $77 million in 1973 to minus $46 million in 1974. A partial recovery was experienced in 1975 but a further dramatic fall in net income occurred in 1976 from a position of plus $19 million in 1975 to minus $84 million in 1976 ...
Western cattle feeders appear to have had a comparative advantage in feeding cattle over their eastern counterparts during the 1970 to 1973 period. However, relatively greater increases in feed costs in the west in 1974 and 1975 completely eroded this advantage in those years.
It goes on as follows:
Net income returns to Canadian cow/calf operations showed a similar increasing aggregate net income picture to the feedlot sector over the period 1970 to 1973 but experienced an equally dramatic change in fortunes in 1974 when the net income level fell well below those achieved between 1970 and 1973. The decline in aggregate net income in the cow/calf sector has been sustained through 1975 and 1976. Net income has moved from a positive of plus $390 million or plus $78 per cow in 1973 to a position of minus $246 million or minus $40 per cow in 1976. It is interesting to note that the full impact of depressed prices for slaughter cattle were not felt until 1975 or 1976 in the cow/calf sector and that the size of the Canadian beef cow herd was still increasing in 1975.
On the next page appears the following short sentence:
In summary the dramatic change in fortunes in the beef industry in 1974 resulted from a coincidental sharp decline in slaughter cattle prices and a sharp increase in feed costs.
Later there occurs this sentence:
The most startling revelation of the analysis is the dramatic changes in net income returns from quarter to quarter and from period to period in the feedlot sector and to a certain extent the cow/calf sector.
Later on the report states:
As an adjunct to this it seems incongruous to us that the beef cow herd in Canada was still increasing in 1975, given that industry signals of impending losses in the industry were apparent in early 1974.
I remind hon. members that the decline in the cattle herd actually started in September, 1975. Mr. Speaker, that concludes the quotations from that interesting analysis of the difficult period from which we have just emerged.
The report clearly identifies a total Canadian industry loss in equity over the last three and one-half years of over $400 million. What this very factual report does not comment on or identify are the deep scars that are now apparent in our cattle industry. Many cattle producers, particularly young cattlemen, and perhaps some of those who got into the exotic side of the industry, are no longer with us. In the United States it is estimated that 200,000 cattlemen are no longer in the industry-that is 13 per cent of their producers. There are no comparable figures that I am aware of for Canada. At the usual ratio of 1 to 10, however, we could have 20,000 less cattle producers in Canada today.

In addition to these scars, there are other significant changes in our cattle and beef industry and in beef consumer preferences. It was the liquidation phase of the cattle cycle beginning in September, 1975, that saw a 15 per cent drop in cow numbers in both Canada and United States; it was this liquidation phase that spawned the present hamburger craze. In 1977, 54 per cent of beef eaten in the United States was in the form of hamburger. The Canadian figure is probably just a little lower. Now that the big cow selldown is over in both countries, consumers will probably not want to return to the much higher percentage of choice steaks and roasts of former years because our society has become accustomed to and is satisfied with the fast food service so readily available on the North American continent. This is a logical and progressive development in our beef eating habits which should bring fed cattle prices and non-fed cattle prices, that is, cows and grass cattle, closer together. Fed cattle prices would come down and non-fed cattle prices would probably move up. This would be good for both the cattle industry and for consumers.
Most important of all, however, in the industry's recovery process from those three years of disaster, is the deep concern of cattlemen that our industry will have the opportunity to recoup that $400 million odd equity loss through the market place.
Over the last two months our North American cattle and beef markets have clearly strengthened, and strengthened rather quickly. Our industry can recover through the market place if the government allows our market system to function without political interference. It is only common cow sense that the good market price years have to carry the bad years.
Two days ago, during the rambling remarks of the Minister of Agriculture in this budget debate, he conveniently stuck to vague generalities instead of making at least a few specific comments about such things as his beef import law that we used to hear about. It now seems obvious that the great competition between this minister and the Minister of Industry, Trade and Commerce (Mr. Horner) about who would sponsor this new legislation has been called off completely and replaced by that very deliberately vague joint statement on March 30, indicating that the Export and Import Permits Act would continue to set quotas, but only for the next three years. These quotas, they pointed out, are to be based upon the base period of 1971-1975.
There was a very interesting phrase in that statement of March 30 which referred to those quotas. The phrase "adjusted for changes in domestic beef consumption since this base period" referred to the quotas that could be set under the Export and Import Permits Act. Canadian beef consumption for the base period 1971-75 was approximately 94 pounds per capita; last year we probably ate about 113 pounds per capita, and the estimate for 1979 is 95 pounds per capita. There are indications that our Canadian cow numbers are already too low to produce the ideal domestic supply of between 90 and 100 pounds per capita. We know, for example, that the next cattle cycle will peak approximately in 1985. Today, our industry has already determined the beef supply, that is, our
April 20, 1978

domestic beef supply for 1980 and 1981. It is here now, on the ground.
Our producer concern is, quite bluntly, that this vague phrase "adjusted for changes in domestic beef consumption since this base period" could be interpreted by the two ministers as an appropriate excuse to increase those offshore beef quotas-perhaps even this year but certainly over the next three years. Surely our Minister of Agriculture would not stoop so low, but it is a matter of concern. This is the reason cattlemen will continue to insist on a Canadian beef import law that would establish the rules by legislation and not be subject to change by this minister, future ministers of agriculture, or orders in council.
Another specific item that the Minister of Agriculture might have remarked upon-perhaps it was deliberately omitted-is the matter of a possible fed cattle payout for the first quarter of 1977. Both the minister and his staff have deliberately teased us with hints that there may be one, depending on what percentage figure, 90 or 95 per cent, is to be used. Now, almost 13 months after that period has ended with no final statement being made, we can only assume that this payout depends not on the stabilization legislation but on how much money the minister can get from Treasury and the political advantage he can get from a late announcement just before the election.
I must say I find it regrettable that the minister's original concept of stabilization with its stop loss approach seems to have all but disappeared. It has disappeared in favour of a cost of production index approach which is never explained or divulged, and the minister's power of discretion in varying that percentage figure used. We have already seen a percentage figure of 90, 95, 100; and in one instance up to 105 per cent.
There are some very obvious lessons which all of us, cattlemen and politicians, should have learned from this critical three- to four-year crisis from which our Canadian cattle industry has just emerged.
First of all it is appropriate to point out that in 1972 our Canadian Cattleman's Association in a beef seminar warned of an over-supply situation from a too rapid cow build-up, which continued to its peak in 1975. As a producers' organization we warned back in 1972 that that situation would surely develop, and it came about just as we predicted. However, no one, especially governments, listened to us at that time.
Today, when we are on the up side of the market price cycle, I want to remind all concerned that the Canadian Cattleman's Association has initiated a new "Beef Watch" policy to try to anticipate the cattle and beef cycle and then to project trends and advise accordingly. Some encouragement and attention to this new approach by cattle producers themselves are surely warranted, especially by consumers and governments.
Finally, there is no question that our Canadian cattle industry has survived perhaps the most difficult price-cost phase in our history, but at a cost which we do not yet really know. That $400 million figure which I pointed out is the actual cash
The Budget-Mr. Cullen
cost as near as anyone can find, but there is much more of a cost than that.
In the west the drought, and the severe winter which is only now just over, have added to that cost, especially across southern Alberta and southwestern Saskatchewan. Hopefully we, as producers, and particularly politicians, will learn from this experience. I sincerely hope so.


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, it is always a pleasure to follow the hon. member for Medicine Hat (Mr. Hargrave). Debates in this House are improved when we hear from him and from the Minister of Agriculture (Mr. Whelan) on a significant part of the agricultural community. It is a little unfair from the standpoint of the Minister of Agriculture because he has to cover the whole spectrum of agriculture in Canada and could not deal in a specific way with all of the items which the member for Medicine Hat suggests. I know that his speech will be very carefully read by the minister and he will call out that which should be taken.
In addition to being Minister of Employment and Immigration for Canada, it is also my privilege to be the member of parliament for Sarnia-Lambton. On behalf of my constituents I want to say to the Minister of Finance (Mr. Chretien) that the budget was very well received in my region of the country. I listened to a radio broadcast from Ottawa on that particular night, I believe it was radio station CKOY, and its business consultant said that the senior citizens of Canada should stand up and cheer at the announcement made by the Minister of Finance in connection with the registered retirement savings plans, the options which are available to senior citizens, and the Registered Retirement Investment Fund referred to in the budget.
I think it is an appropriate move made by the minister so that senior citizens will now have a better opportunity to deal with the money which they have saved over the years, and still maintain the basic principle of the RRSP, which is, after all, meant to be retirement income.
The large concession made regarding research and development will sit well with the petrochemical industry in my area.
The sales tax cuts have won unanimous approval from citizens across the country, not only in my riding. We have heard some criticism of the fact that this was an invasion of provincial rights, or that it was not the appropriate way to deal with it. When one looks at the number of meetings and the number of times which the Minister of Finance travelled across Canada and met with the ministers of finance of the various provinces, on a multilateral and bilateral basis always bearing in mind the concern about secrecy respecting the budget, as there should be, I think we have to adopt a little bit more of a practical approach. In the final analysis the decision taken was adopted by nine out of the ten provinces of this country.
Certainly it is right that maybe we should be looking at other avenues of approach such as specific types of sales tax, and in this particular way we can work in conjunction with the

April 20, 1978
The Budget-Mr. Cullen
provinces. But most assuredly we must applaud the Minister of Finance for being able to meet with his provincial counterparts and come up with a program which is acceptable to nine out of the ten provinces.
In Lambton County, my riding, which was the former historic riding of Lambton West, there is a large rural element. All of us who have concern for people in that particular region, and I have some knowledge of that having spent some 12 years as solicitor for the County of Lambton, welcome the fact that the Minister of Finance saw fit to deal with incorporated farms and allow them to move from one generation to another without penalty of taxation. I think that move was appropriate. Obviously there was concern by the Minister of Finance that it might set some kind of precedent for other small businesses and the like. He took this step forward and I think it was an appropriate one, given the contribution that the primary producer makes to the people of Canada. Whoever deserves the credit, Mr. Speaker, in the final analysis the time must be chosen and the amount of money must be found so that this particular move can be made. It was a very grave move considering all of the other pressures that were being brought to bear at that particular time.
There is a genuine, legitimate concern by all members of this House, whatever their political persuasion, about the level of unemployment in Canada. Fortunately this government's employment measures, carried out on a significant scale, are geared to stimulating the economy without rekindling inflation and, most important, are targeted to groups in areas of the country particularly hard hit by unemployment. This is especially so, of course, in the case of direct job creation.
Over the past ten years, the Canadian labour force has increased by almost three million people, some 37 per cent. In total, some 2.3 million more people were employed in 1977 than ten years ago. But the continuing population growth and the continued influx of new entrants into the labour force have contributed to the present high levels of unemployment.
Unfortunately for the Canadian public, and in dealing with the problem of unemployment, the opposition parties' response has been poorly researched, sometimes reprehensible and on most occasions it will not work, at least it will not work as claimed by the opposition parties.
The misrepresentations and distortions perpetuated by a number of members of the opposition have contributed to a serious misunderstanding not only of the nature of the unemployment in Canada but also of the scope and the rationale of the government's programs to combat unemployment.
The comments of the members of the NDP have been singularly inaccurate. Their spokesman even has a hard time reading statistics correctly. It is a fact that Statistics Canada, and they use Statistics Canada, has estimated the actual numbers of unemployed in March, 1978, to have averaged one million. Admittedly, this number is higher than any of us would like to see, and the matter is of great concern. Nonetheless, the NDP insists on distorting these figures arbitrarily by adding over 600,000 individuals and referring to the over 1.6 million unemployed Canadians, an exaggeration of some 60

per cent. Furthermore, it attempts to rationalize these irresponsible statements by alleging that the difference of 600,000 is made up of discouraged workers, when the facts produced by Statistics Canada indicate that only 64,000 individuals in March could legitimately be classified as such. Even after making allowances for this, one can readily see that the NDP exaggerates the unemployment rate by some 50 per cent over the true figure. It is a very small example of the loose way in which that party bandies statistics around to suit its own purposes.
The trumped-up analysis of the opposition does not stop with misstatements about the labour market. It also includes concoctions with respect to the impact of recent changes in the unemployment insurance program on the labour market. A number of municipalities have recently experienced increases in their social assistance case loads. This situation has led to a number of unfounded allegations about the extent to which recent legislative changes to the unemployment insurance program have been responsible for those increases.
These allegations have been based upon data deliberately selected out of context, and this has left a misleading impression as to the potential impact of unemployment insurance on social assistance case loads. The allegations have been based on data from a few municipalities relating to only a small portion of social welfare recipients who are defined as "employable". In fact, no consistent data or definitions of types of persons on welfare exist across provinces, and the statistical evidence cited to support these allegations is totally misleading.
In fact, those increases in social assistance which have occured are primarily the result of slack economic conditions. In these circumstances many Canadians are having difficulty in finding or maintaining jobs. This has resulted in large and continuing increases in unemployment insurance benefit expenditures. However, it has never been intended that the unemployment insurance program should act as a total and eternal security blanket for all Canadian workers. Responsibility for income maintenance is divided among a variety of programs and jurisdictions.
I suspect, Mr. Speaker, that the opposition knows all too well the real facts about the employment picture, but that it is to their advantage either to distort them or ignore them altogether. In doing so, they deliberately rob people of hope. Let me put before you the true employment picture.
From 1970 to 1976, the latest period for which international comparisons are available, the number of Canadian jobs actually increased by 21 per cent, double that of the United States, which recorded the next largest increase of 11 per cent in the same period. France and Japan experienced a growth of only 5 per cent and 4 per cent respectively, and Germany's work force actually declined by 2.5 per cent. No other country has been as successful in meeting the challenge of providing additional employment opportunities for such a rapidly growing labour force.
April 20, 1978


Some hon. Members:: Hear, hear!


Jack Sydney George (Bud) Cullen: Regardless of these facts, the opposition still speaks of unemployment as if we were back in the thirties. Although the unemployment rate is high and, indeed, too high, it can no longer be regarded in the same light as that of a generation ago when the unemployment rate was rising due to numbers of jobs decreasing rather than numbers of workers increasing. A case in point: over the past 12 months, although the Canadian economy created some 330,000 jobs, some 432,000 workers entered the labour force.
This is a phenomenal increase in the number of people actually working in the course of a year. The fact that we have something like 62.4 per cent of people in the labour force as compared to 50 per cent many years ago, in the sixties and thirties, indicates where our problem is.
In any job creation we attempt, we cannot keep up with the numbers of people entering the work force. For instance, it has resulted in a situation in which there is a significant number of families with multiple earners. In fact, almost two thirds of the unemployed are in families with at least one other wage earner, so that the families are not altogether without income. I would not want to suggest that these additional sources of income are unimportant, or not required. But I do suggest that unemployment no longer means what it used to mean: a complete loss of all family income with resultant hardship and despair.
The Minister of Agriculture stated in his address the other night that to make a comparison with the thirties is absolutely ludicrous, considering at that time there was no unemployment insurance, no mobility grants, no training allowance and, in fact, no medicare. To compare unemployment and the unemployed person today with the thirties is not kosher, which is as charitable a word as I can think of.
There is no doubt that this still adds up to a situation where unemployment is at a level considerably higher than we would like it to be, and the Government of Canada shares the responsibility with the provinces and with the private sector to move to alleviate this problem. To some members of the opposition parties, the solution is simple, "spend our way out of it". Let us turn for a moment to some of the official opposition's proposals.
Personally, I looked forward with some expectation to the results of the three-member task force of the official opposition, about how they would cope with the unemployment situation. To be as charitable as I can, Mr. Speaker, I found the report pathetic. Someone referred to it as so much warmed over soup. The Conservative opposition sent three hand-wringers across the country and, after a great press release, much hyperbole, obviously altogether too much rhetoric, the pusillanimous result has been embarrassing to the official opposition, to the extent that they hoped that any press comment on it would be buried on page ten. One of their more ridiculous proposals tells how they would solve the problem of university graduates by putting them into debt or further into debt by lending them unemployment insurance benefits for a period of
The Budget-Mr. Cullen
time, which benefits would have to be, of course, paid back later and so, I assume, would the premiums. Hardly adequate, Mr. Speaker. One might equally argue that fire insurance can be purchased after the fire! I very much doubt that those employees and employers who are currently paying premiums and who share the risk of benefit costs would accept this proposal to create a special class of citizens who would be exempt from the rules which apply to everyone else.
The NDP proposed measures to prevent unemployment would involve the launching of programs whose impact is highly questionable. In particular, I refer to the NDP proposal to launch $400 million for a municipal capital works program, on the misguided assumption that it would create some 60,000 new jobs. Indeed, one common and irresponsible feature of the NDP employment proposals is the completely unrealistic and inflated estimates of the number of additional jobs they would create. Note, Mr. Speaker, I said additional jobs.
Our experience with a capital works program in the municipalities in 1971 convinced us that this was not the most effective way of creating additional employment. That was a Liberal party program. If we thought it had done the job suggested for it by the NDP, we would have implemented it at the present time. We would have been great heroes with all the municipalities. We would have been perpetrating a fraud by suggesting to those who want to work that this program would creat 60,000 new jobs when we knew, after studying what we had done, that that program just does not work in that way. Having said that, we say there are other programs. The NDP will not lend us one iota of support for any innovative approach that we suggest.
The irony of it all, and one has only to pick up Hansard on any day this House is sitting for proof of what I am saying, is that the opposition is continuously assaulting this government. The fact of the matter is that whenever this government does come up with new and innovative approaches, the opposition's attitude has constantly been to shoot them down on sight and dismiss them out of hand. Let me point out one instance, Mr. Speaker, when the government has been able to overcome the critics of the opposition and implement, after countless hours of arguing and debating, what may well turn out to be the innovation of the decade in changing conditions in our labour market. I am talking about the developmental use of unemployment insurance funds, which was bitterly opposed by members of the opposition during consideration of Bill C-27.
Work sharing was the subject of particular opposition attack. This is what the hon. member for Nickel Belt (Mr. Rodriguez), had to say in the House of Commons on June 23, 1977, about the developmental use of unemployment insurance funds for work sharing:
One of the so-called progressive ideas offered in this bill is work-sharing. That was very prevalent in the days of the depression. It is not a creative approach to employment, and the government knows it.
For his part, the hon. member for Egmont (Mr. MacDonald) concluded, and I quote:
-organized labour and indeed the industrial community do not look with any great amount of favour or interest upon this proposal. It is somewhat useless for

April 20, 1978
The Budget-Mr. Cullen
the government to say this is a part of a new employment strategy, if in fact there is little interest or co-operation on the horizon from these significant groups.
However, even now, before we have envisaged embarking on pilot projects, initiatives have been and are being taken by workers and employers to establish work-sharing arrangements. As a result, we have already launched 14 work-sharing agreements in which approximately 1,900 workers have participated or are participating in. To date, the lay-offs of nearly 770 individuals have been averted. Companies, supported fully by their employees, have approached us in such numbers that the pilot phase of the program is very heavily booked. Whatever the results of these pilot programs, they will certainly not fail from lack of interest on the part of employers or employees. If we had listened to the members of the opposition, these, and undoubtedly other individuals in the future, would be on our unemployment rolls instead of actively working.
Again, if we had heeded the NDP, we would not have pressed forward with the developmental use of UI funds for training. But, by introducing this feature, we managed to free up some $42 million in 1978/79 to provide full-time training for an additional 17,500 Canadians in areas and occupations where unemployment needs can be identified. The total number of Canadians in full-time training will now be approximately 234,000 in 1978/79.
The government's employment measures are vigorous ones. While the government has moved to stimulate the economy, it has had to recognize that the serious danger of inflation remains with us and that expansionary measures must take account of this reality. Consequently, we have adopted a series of specific programs and activities designed to alleviate or reduce unemployment. However, it seems that whenever I speak of my department's programs, like Canada Works and Young Canada Works, the opposition quickly dismisses them as insignificant and trivial. Let the opposition tell this to the more than 185,000 individuals who got a job in 1977/78 because of employment measures brought in by this government.


Some hon. Members:: Hear, hear!


Jack Sydney George (Bud) Cullen: The following are among the government's recent measures designed to stimulate the economy and alleviate unemployment-some $1.2 billion dollars have been allocated for the two fiscal years ending in 1979. These include $458 million for the employment strategy for the fiscal years 1977/78 and 1978/79, including $50 million allocated to the new economic growth component of Canada Works to stimulate growth in the private sector; $150 million for the federal labour intensive program; $200 million allocated to the new employment tax credit program for this year and next. It is expected that this will result in 100,000 new jobs. In addition, there are the clear employment-creating effects of the recent
budget in the area of sales tax reductions which it is expected will directly yield 25,000 new jobs.
Given the magnitude and complexity of our unemployment problems and our budgetary constraints, there are limits to the extent to which we can allocate additional financial resources to our labour market programs. In these circumstances, we simply cannot afford the option of buying our way out of difficulties. Government spending on job creation must be kept in careful balance, in order not to increase inflationary pressure which would eventually result in even higher levels of unemployment. Prime Minister James Callaghan of Great Britain expressed what I consider a tremendously logical view of this problem. Remember, he is a member of the Labour Party-in this country he might be in the NDP. The only difference is that he happens to be in power and that he happens to accept responsibility for fiscal measures. This is what he said:
We used to think that you could spend your way out of recession and increase employment by cutting taxes and boosting government spending. I tell you, in all candor, that that option no longer exists and that insofar as it ever did exist, it only worked by injecting bigger doses of inflation into the economy followed by higher levels of unemployment as the next stop.


James Aloysius McGrath: Then why did they reduce taxes by two billion pounds?


Jack Sydney George (Bud) Cullen: I would never in my wildest dreams try to determine what the Labour Party might do in Britain. But here is a Labour Prime Minister who has stated that that policy does not work.
The measures introduced by the Minister of Finance in his budget are designed to stimulate the economy in such a manner that we will achieve our projected targets of real growth while, at the same time, have a minimum effect in stimulating inflation. Economic growth is, of course, in the long run the answer to our problems in the labour market. These problems are not going to be fully resolved this month or this year. But those who predict nothing but doom and gloom are not facing the facts. As I have said, our major cause of unemployment is not our inability to create jobs-during the past 12 months the economy generated no less than 330,000 new jobs. Our problem is that the labour force has grown with such great speed, and for so long a period.
But that growth is unlikely to continue into the indefinite future. A few years from now, it is entirely likely that growth rates will be far less than our present 21 per cent, and new entrants to the labour force will have far less difficulty in finding jobs. What we have to do now-and I submit what we are doing now-is to maintain a reasonable pattern of steady economic growth, backed up by a sound program of job creation and training. Supplemented by an effective placement service and supported by a comprehensive income-maintenance program, we will remain one of the most prosperous and economically healthy countries of the western world.
[Mr. Cullen.)
April 20, 1978


James Aloysius McGrath: Would the hon. minister permit a question?


The Acting Speaker (Mr. Turner):: Does the minister accept a question?


Jack Sydney George (Bud) Cullen: Yes, Mr. Speaker.


James Aloysius McGrath: I listened with great interest to what the minister had to say. He seems to be suffering from amnesia or, at least, his reading was selective. I am sure he did not intend to mislead the House deliberately with regard to the recommendations made in our report to the Leader of the Opposition (Mr. Clark). We recommended that in dealing with the serious level of youth unemployment-


The Acting Speaker (Mr. Turner):: Order. I suggest the hon. member get to the point of his question-fast.


James Aloysius McGrath: Mr. Speaker, I will get to my question if you give me time. I will raise it as a point of order, if you like.


The Acting Speaker (Mr. Turner):: The hon. member asked if he might put a question to the minister and I permitted him to do so. So I ask him to get to the point of his question.


James Aloysius McGrath: I rise on a point of order, then, in order to correct the record. I said the minister misled the House.


The Acting Speaker (Mr. Turner):: That is not a point of order. That is a point of debate. I gave the hon. member the floor for the purpose of asking a question of the Minister of Manpower and Immigration (Mr. Cullen). Now, would he get to the question?


James Aloysius McGrath: Mr. Speaker, with the greatest respect, I am allowed to rise on a point of order and I think you have to hear my point of order first before you rule on it. I want to correct a deliberate misrepresentation by the minister. The minister said we recommended that graduating students be given unemployment insurance for six months and that afterwards they would have to pay it back. That is not true, and the minister knows it. He did not refer to our principal recommendation which was to scrap the discredited Canada Works and Young Canada Works programs and pay prevailing rates, and work through the municipalities, which would be much more productive.


The Acting Speaker (Mr. Turner):: Order. I suggest to the hon. member that that is a point of debate.


Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, throughout the minister's peroration I wondered what it reminded me of. It was Trevor Roper's tale about the last days of Hitler- about Hitler moving around imaginary armies from his bunker in Berlin. The minister is moving around imaginary jobs he thinks he has created, but the fact remains there are more than a million Canadians who cannot find those jobs.
It is nice to be able to rise in this chamber today. A few days ago we thought we might be away from Parliament Hill at this
The Budget-Mr. McKinnon
time, taking our case to the people. That is what seemed likely after the Prime Minister's performance last Monday when he stamped out of the House in a well acted fit of pique which followed a familiar pattern. When the Prime Minister (Mr. Trudeau) cannot answer a question, he aggravates the opposition into heckling him and then, when he is heckled, he claims he cannot be heard because of the heckling and he walks out. He did it again last Monday. Last Monday's petulance was of a kind most often found in youngsters. Anyway, the question of when an election will be called is getting to be a bore. I think the Prime Minister has wrung all the media attention out of it that he can.


Jack Sydney George (Bud) Cullen: On a point of order, Mr. Speaker, the hon. member for St. John's East (Mr. McGrath) raised a point of order with regard to a statement I made concerning the recommendations contained in a report to the Leader of the Opposition (Mr. Clark). So that there might be no doubt as to the words which were used, I will read the recommendation, which is as follows:
A special unemployment benefit should be established for university students entering the labour force in areas where the unemployment rate exceeds the national average. During a three year trial period, new workers would be able to receive benefits equalling the average benefit of their province for up to six months. The premiums necessary to establish a benefit period would be paid after employment had been found.
That is a reimbursement of the premiums, as I have indicated. They are moving students into further areas of debts, and this is inconsistent with the universality of the program and inconsistent with the people who are already contributing.


Allan Bruce McKinnon: Mr. Speaker, it is not often that we have an example, which the minister has demonstrated, of the arrogance of this government. The minister seems to feel justified in interrupting other members' speeches to go back to previous speeches.
Right now what we are concerned about is Canada's situation. I should like to read a few words from the New York Times of Sunday, April 16, in the days following our budget. It is headed "Canada and Britain Unveil Budgets". It reads:
Significant steps to faster growth in two of the world's weakest economies were taken last week as Canada and Britain announced their budgets for the coming year.
How does it feel after ten years to be one of the world's weakest economies? Are you members opposite proud of your record? The article goes on to read:
Of the two, Canada's program is more stimulative, reflecting the more serious economic problems facing that country.
I guess that makes us the worst in the world. The article goes on to read:
The budget of the Canadian government calls for record spending of $46.9 billion in the fiscal year that began April 1, with a deficit of $11.5 billion-by far the largest in Canada's history ... Judging from first reactions, however, the Canadian public is skeptical as to whether all this can do much to combat their nation's persistent unemployment-

April 20, 1978
The Budget-Mr. McKinnon
Which is, incidentally, the responsibility of the department of the minister who has just spoken. The article goes on to read:
-now at a post-depression high of 9.7 per cent. S. F. Hughes, executive director of the Canadian Chamber of Commerce, was wary lest temporary treatment be followed by new headaches.
You will recall that Mr. Hughes, at least in the five years that I have been listening to these budgets, has approved of every one of them, to my recollection. He always thinks they are good budgets that will improve things. If any member opposite can tell me of any budget in the last six years that has put the economy at the time of the next budget in a better state than it was in, I would like to hear it.
The article goes on to read:
The budget proposals, he said, "may only serve to encourage consumer spending in the shorter term, at the expense of 1979".
But by then, I guess, the election will be over. The article goes on to read:
Worse, many observers fear that Canada's budgetary stimulus, combined with the imminent lifting of the strict wage and price controls imposed at the end of 1975, could lead to a new wave of inflation. As if in anticipation, the value of the Canadian dollar slipped to a 45 year low of 87 U.S. cents after the budget was announced. Only 18 months ago the Canadian was worth $1.03 in American currency.
In Britain, the mood is far more optimistic.
That is as close as we can get to an objective viewpoint of our economy if we go to other countries and read what their papers, which have no axe to grind, have to say about it.
It seems to me that the question is one of tax rates and of tax revenue. I have been reading an interesting book which deals with a system of a university professor in California, Professor Laffer. Professor Laffer is a very intelligent man. There are two rates of taxation at which the revenue is zero. If you charge zero tax, then the revenue will be zero; if you charge 100 per cent tax, the revenue will also be zero because nobody will produce anything. There is a variable point at which revenues and production are at their maximum. If you can find that point, then you will have an economy that is high in production and high in revenue. The location depends largely, strangely enough, on the wishes of the people, a point which is often missed by politicians and by governments which seem more interested in maximum revenues.
During wars, for example, taxes can be very high, without losing productivity, and revenues will be high. When the war ends, the people no longer want massive government interference or provision of arms and services. They want to be taxed at a lower rate. History shows that the results of lowering taxes can increase revenues. This is the point that the Leader of the Opposition (Mr. Clark) was making in his speech on the budget.
I will give you a few historic examples. In the United States there was a recession in 1919 to 1920 when they were operating under the philosophy that wartime taxes should be left high, ostensibly to pay off the massive debts they had incurred during World War I. Warren Harding, who was not the world's greatest president, was elected in a landslide on a
(Mr. McKinnon.]
"return to normalcy" platform, and the subsequent cut in taxes led to the prosperity of the 1920's.
After World War II the Americans, who had learned the lesson from World War I, reduced taxes immediately and had a prosperous transition to the post-war period. Japan and Germany left their taxes high for the first few years, and stagnated. In 1948 Ludwig Erhard lowered taxes and the German recovery began. In 1950 Japan reduced taxes, and her economic recovery is now history. Reduced taxes increased their productivity and revenues.
I should like to read a short quote from The Public Interest about taxes, revenues and the "Laffer curve". It reads:
Andrew Mellon became a national hero for engineering the rate reductions of the 1920's, and was called "the greatest treasury secretary since Alexander Hamilton". The financial policies of Ludwig Erhard were responsible for what was hailed as "an economic miracle"-the post-war recovery of Germany. Throughout history, however, it has been the exception rather than the rule that politicians, by accident or design, have sought to increase revenues by lowering rates.
Finally, we should note that in 1962-1964 under John F. Kennedy, the U.S. cut taxes sharply and the U.S. economy promptly expanded and produced more revenues. What I am saying is that the recommendations, spelled out by the Leader of the Opposition earlier in this debate, for important tax cuts have a sound basis and have been proven successful in many countries in the modern era. Income tax directly affects the incentive to work.
I have one more quote out of The Public Interest. It reads:
The idea behind the "Laffer curve" is no doubt as old as civilization, but unfortunately politicians have always had trouble grasping it. In his essay, Of Taxes, written in 1756, David Hume pondered the problem:
"Exorbitant taxes, like extreme necessity, destroy industry by producing despair; and even before they reach this pitch, they raise the wages of the labourer and manufacturer, and heighten the price of all commodities.
David Hume knew that in 1756, but this government does not know it yet.
Now I would like to go to the second part of my speech which is on defence, the area for which I am responsible to the Leader of the Opposition. I would like to point out that if defence is ever to be discussed or spoken of in the House, it is up to the opposition to do it. The Minister of National Defence (Mr. Danson) is following what is getting to be a short tradition, established by his predecessor, of practically never speaking on defence in the House of Commons. We have had the new minister for a year and a half, during which time he has not spoken to the House on defence, except in answer to questions. It is a government that will not speak publicly about defence, and it falls upon us in the opposition to do the job for them. This is a sorry state of affairs in itself.
What is the state of Canadian defence? What is the state of our alliances? Alliances constitute the framework of Canada's defence policy, that is, NATO and NORAD. Let me turn first to our problems with our NATO policy. Recently the Minister of National Defence woke up to the difficulties inherent in our reinforcement roles to the northern flank of NATO, that is, Norway. We have had this commitment since 1968, but neither he nor his predecessor noticed the problem before,
April 20, 1978

despite the fact we were constantly reminding him of it. We understand now that the minister on his trip to Norway was talking over the reinforcement of the northern flank to which we were committed, and he found he had to ask for Norwegian naval assistance to convoy our troops.
Let no one be surprised that we have had to ask for help. In the last eight years we have managed to raise federal spending from $16 billion to $46 billion without finding enough money to lay down the keel of one new ship. No new ship in the equipment replacement program will be ready for service before 1985 at the earliest. If we start moving right now to get those six frigates for the Canadian navy, they will not be here until 1985 at the earliest, and by then our fleet will be composed of venerable antiques.
The new program will produce six frigates by 1989. At that time there will be only four ships under 25 years of age, plus the six frigates, for a total of ten ships. At the present time we have 23 ships. This is the type of hard knocks one receives because of the program the government has followed for so many years. The government has not given any increases in the capital budget of the Department of National Defence.
I should like to refer to the age of Canadian ships. We have heard about the program of the Minister of National Defence via press releases. In answer to questions he indicated that six frigates would be built, and that they will be completed by 1989. At that time we will have our four DDH 280s. They will be 16, 17, 17, and 17 years of age. By 1989 they will be getting fairly well on. Most countries think 20 years is the optimum life of a ship in the navy.
If one takes the life span of a ship and stretches it to 25 years, Canada will have two ships in the Annapolis class. They will be the Annapolis and the Nipigon, both 25 years of age.
In the Mackenzie class, we will have the Mackenzie at age 27, the Qu'Appelle at age 26, the Saskatchewan at age 26, and the Yukon at age 26. All the ships in the Restigouche class are in reserve already, but by 1989 the Chaudiere will be age
30,	the Columbia will be age 30 and the St. Croix will be age
31.	In the improved Restigouche class, there will be three ships: the Gatineau at age 30, the Kootenay at age 30, the Restigouche at age 31 and the Terra Nova at age 30.
Next is the St. Laurent class, which is the oldest of them all. Sometimes I feel parliament needs a new St. Laurent, speaking in a political sense. In the St. Laurent class there will be the Saguenay at age 33, the Skeena at age 32, the Ottawa at age 33, the Margaree at age 32, the Fraser at age 32 and the Assiniboine at age 33. There is no secret about this. The fact is that the government did nothing about the replacement of ships, and is now moving slowly to replace them. By the time the first six are built, we will have only four that will be less than 25 years of age, and those are the DDH 280s.
I do not have a great deal to say with regard to the army situation. The army procurement for this summer will be a Leopard I tank. As I mentioned before in the House, it would have been preferable to continue renting the Leopard I, which
The Budget-Mr. McKinnon
we are renting at the present time from Germany, for another year or so, and then purchase the Leopard II, which will be improved vastly over the Leopard I. At the time I propounded the idea in the Standing Committee on External Affairs and National Defence, I was told we would have to wait until well into the 1980's for the Leopard II, but my information is that the Leopard II will be in use by the German forces in 1980.
I should like to refer to the main differences between the Leopard I and the Leopard II. The Leopard II is armed with a 120 millimetre gun, instead of a 105 millimetre gun, and it has Chobham type armour. Thus, it will have a new gun and new armour. Unfortunately, Canada is purchasing a Leopard I with the old gun and the old armour. I suspect they will be the last models off the assembly line, thus we will have a tank which is not the newest within a year after purchase.
Now I should like to deal with our air force. We have a NATO and a NORAD commitment. We require new aircraft for both of them. The importance of the role in determining what aircraft should be purchased must be stressed. In no way am I satisfied that this is understood by the government. NORAD is the difficult aspect of this problem. The Voodoos, or the CF 101s, obviously need replacement, yet their role is not as clear as when they were acquired.
I should like to refer to a new book which was written by Dr. Cuthbertson. It is entitled, "Canadian Military Independence in the Age of the Superpowers." Those who are interested in Canada's military future might be well advised to read it. One does not have to accept Dr. Cuthbertson's recommendations, but certainly it is a well-researched book. Page 86 refers to NORAD and what the Americans are doing about it. It reads as follows:
The United States plans to reduce its present 405 interceptors to 212 F-106s by mid-1980 ...
A principal reason why NORAD was renewed in 1973 without amendment for only two years was United States uncertainty about the relevancy of anti-bomber defence to its strategic requirements. Once anti-bomber defence was declared strategically redundant, the United States moved as rapidly to reduce and re-organize its air defence system as it had previously moved to establish it.
Against this very uncertain background, Canada is moving forward to purchase $2.3 billion worth of new fighter aircraft. The planes fall into two price classes: over $20 million each or under $20 million each. In the over $20 million, one will find the Toronado, which is made by the Panavia consortium of Britain, Italy and Germany; the F-14 and the F-15, which are two American planes. The F-14 and the F-15 are worth over $20 million each. Generally they are said to be multi-role fighters, they can shoot anything out of the skies, they have long ranges and very, very sophisticated equipment. In the under $20 million, one will find the F-16, F-18A and F-18L, which are American planes. The F-16 is a single-seater and has a single engine, compared to the others which are two and two.
I find it easy to support an immediate purchase for the NATO role, which is a ground support role for our troops in Germany. The role is there. It must be supported. We know what the troops and the planes are doing. It is quite a different

April 20, 1978
The Budget-Mr. McKinnon
role than the NORAD role. Perhaps a good case could be made in favour of the purchase of the more exotic fighters such as the F-14 and the F-15 for the NORAD role, or the Toronado; but the need for such a plane for this anti-bomber role has not been proven to me, nor to the public.
The Americans consider the anti-bomber role to be declining. In fact our second last minister of national defence said that it was declining. Approximately 20 years ago ministers of national defence indicated that the anti-bomber role was becoming less important. Yet this role is put forward as a reason for acquiring new aircraft in support of NORAD. The forces would be wiser to point out the need of aircraft to see-off intruders. We require sovereignty of our air space. When one refers to the scenario concerning the manned bombers which will come over Canada and bomb our cities, one soon runs into difficulties attempting to carry through that scenario to its illogical conclusion.
There are other problems regarding NORAD, such as the AWACS, which is the Airborne Warning and Control System plane. It is particularly with reference to North American Air Defence. Where does the government stand in this? For months we have been asking what Canada intends to do with the AWACS. Are we going to participate or not? We have heard from one source that we will spend $180 million, and from other sources we have heard that it will be $300 million. The price of these planes has risen astronomically in the last while. The cost which will be entailed is almost beyond belief. We have not planned to get into it, but we might.
A year ago last January we heard a very interesting presentation by the then vice-chief of the defence staff, Admiral Falls. At the present time he is the Chief of the Defence Staff. When he was speaking to the Conference of Defence Associations he presented a very interesting chart which showed where and when the money was to be spent. The tank was budgeted for first and then the long range patrol aircraft. The long range patrol aircraft were to be purchased at the same time as the tanks, which has been the case. That was to be followed by the new fighter aicraft, and then the ship replacement program. You could see from the chart that that was going to happen. However, when you consider the cost of the AWACS that might well be thrown in there, it changes the picture.
Quoting from the New York Times, April 14, 1978:
West Germany and the United States would bear the largest part of the cost if NATO decides to acquire the AWACS,-
That is the airborne warning and control system. The secretary for defence in the United States is quoted:
-Mr. Brown said. As now conceived, acquisition would involve 12 aircraft at a total cost of $2 billion-
You may recall that we thought that the cost of long range patrol aircraft was high at $1 billion for 18, but this is $2 billion for 12 aircraft.
-The price for each aircraft would be more than $120 million at present prices with support cost included, Mr. Brown said.

The charts of Admiral Falls showed us at the time three things of particular importance to be noted, and they should be recognized at this time. First, there is no provision for the airborne warning and control system, so if we get into AWACS more money would be needed. Secondly, the amount of money is based on an annual increase of 12 per cent in real terms in the capital budget. This was an introduction that was brought in by the former minister of national defence before he quit his portfolio in October, 1976. He had managed, however, to wring out of the cabinet an agreement that he would be allowed to increase the capital budget of the Department of National Defence by 12 per cent per annum on a real basis, that is, they would add the inflation costs in and then add 12 per cent to the capital budget.
The third thing to be remembered is that this acquisition plan of the Admiral was drawn up bearing that in mind, and at the present time no allowance has been made for the devaluation of the dollar. If we follow our plans at the present rate, even if our dollar stayed exactly where it is now, we would need an additional $125 million to make up the extra money to buy the more expensive American currency or German deutschmark.
I come now to the most disturbing news of all, to those interested in national defence in Canada. The government has broken its promise concerning the 12 per cent real growth in the capital budget. This year's estimates call for only an additional 2.8 per cent in real terms. Strangely enough, the Minister of National Defence cannot accept this. He hates to leave that wonderful speech where he said there would be 12 per cent each year. On March 21, 1978, in an External Affairs and National Defence Committee meeting, I asked Mr. Davies, who is the associate deputy minister of finance for DND:
Could Mr. Davis tell us exactly how much the percentage increased, the real growth percentage increased, in the capital budget this year after you had deducted the $60 million?
This $60 million offered by the Minister of National Defence to the President of the Treasury Board (Mr. Andras) as an Easter present or something.


Mr. Davies:: Mr. Chairman, I believe that worked out-


Allan Bruce McKinnon: What did it leave?


William Rupert Davies: -to 2.8 per cent.


Allan Bruce McKinnon: I see. What a comedown from the 12 per cent that everybody expected. So it was actually the inflation rate plus 2.8 per cent.


William Rupert Davies: That is the way it worked out, sir.


Allan Bruce McKinnon: Thank you very much, Mr. Davies. It is nice to talk to an objective person.
Strangely enough-there may be some logical answer for it, but it has certainly escaped me so far-on April 18 the Minister of National Defence was speaking at the committee meeting, and I quote from those minutes:
Well, first of all, the increase is one that was committed of 12 per cent increase per year plus the escalating factor on capital equipment.
This indicates that there is a bare-faced difference between what the associate deputy minister of finance for DND said and what the Minister of National Defence said at that time. I

April 20, 1978

presume that the minister will correct it at the first opportunity.
Perhaps the most blatant of the broken promises of the government as far as defence is concerned is this failure to provide funds for the formula announced by both this minister and his predecessor, that 12 per cent real growth in the capital budget. Let me say once again that the real growth for 1978-79 is only 2.8 per cent. This is going to have an exaggerated effect down the pipe a little bit because next year we will not only be missing the $60 million we are missing this year but we will be missing the inflation rate, plus the $60 million, plus the 12 per cent that $60 million would have accounted for in next year's budget. Over the four year program the total difference that $60 million will make amounts to a quarter of a billion dollars. The failure to provide these funds calls into question the whole viability of the re-equipment program.
If the capital budget does not get the funds to grow in the early years of the five year program, then there will be insufficient money to buy either the new fighters or the new ships for the navy. The minister a year ago said, when he was talking about this 12 per cent and it was in the estimates that we were discussing, that by careful housekeeping he expected he would be able to get through the year with only a 12 per cent increase. Well, he does not have 12 per cent, he only has 2.8 per cent, and obviously something is going to be cut short, particularly if we go for the more expensive airborne warning and control system and we continue to have exchange problems that eat up part of the budget. It makes the statement made by the minister about spending between $3 and $10 billion on new ships over the next 15 to 20 years appear completely ludicrous. If he cannot keep a program on course for the second year of its five year life, how can anyone be expected to take his remarks seriously for the longer term?
In closing, there are a couple of other items I feel I would be remiss if I did not mention. One is the advent of such modern weapons as the neutron bomb and the cruise missile. If the cruise missile is accepted by the various nations in the world, particularly our nation, then one has to consider a defence against the cruise missile, which the Warsaw Pact nations will have in a very short space of time. The same thing applies to the neutron bomb. However, there is no room in our acquisition plans to have a defence against the cruise missile. It might be a good reason, if the services are looking for a reason that makes more sense than the manned bomber, to have fighter aircraft that could be used against cruise missiles brought in by bombers but fired from offshore, which they are quite capable of doing. It is called stand-off firing.
The neutron bomb, which the minister likes to refer to as enhanced radiation and reduced blast, is a very, very dirty weapon. It kills people by radiation, and any advantage it might have we will lose in a couple of years. We cannot expect to stay ahead of the U.S.S.R. for very long on neutron bombs. France has claimed to have exploded one just yesterday, and someone-probably someone from the media-said that that put them ten years ahead of the Russians.
The Budget-Mr. Neil
This reminds me of the attitude just before Russia put the first Sputnik around the earth. Everybody thought that the Americans were ahead of Russia only to find that, indeed, they were a little bit behind. I would be very surprised if we were more than two years ahead of the Soviet Union in the neutron bomb area. From what I know about the neutron bomb, it is not difficult to make, and I am sure if the western allies were to accept this weapon they would not hold the advantage for very long.
I personally hope that President Carter will keep up his stand on it. His allies have told him to prepare it and build it and then give it away as a negotiating item. That may make some sense, but arming ourselves with it is not something I would like to see Canadian troops do. We have been opposed to nuclear weapon armament for quite some time now, and I do not think that the neutron bomb is worth losing our reputation over.
I would like now to say a few words about the peackeeping force which has gone to the Middle East. It was sent off by the government, and I expect it is filling a desperate need there as a communications unit. Canadians are very, very skilled in this area of providing administrative troops.


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


Douglas Charles Neil: Mr. Speaker, my remarks will be relatively brief as I want to cover only two topics. The first is the provisions regarding family farm corporations and the second concerns registered retirement savings plans.
Under the rules that exist at the present time, there is provision for a roll-over on the death of a farmer of land to his child or children and also an inter vivos roll-over during the lifetime of the farmer provided the property was used, immediately before the transfer, by his spouse or any of his children in the business of farming.
The budget that was presented on April 10 provides for a roll-over in the case of family farm corporations. This is a welcome provision and one which members on this side of the House have sought for several years. On the prairies there are many, many family farm corporations. They take different forms and were set up for various purposes. What the budget does is provide for the transfer of shares in family farm corporations either on death or during the lifetime of the farmer to a son or daughter or, of course, any child, which includes grandchildren. This is a welcome amendment.
One thing which gives me and members of the accounting and legal professions some concern, as well as members of family farm corporations, is the uncertainty of the interpretation of this change. There is no problem where the family farm corporation owns the land, but there is a problem where the corporation, which is owned, say, by the father and one or more of his children simply rents the land from the father or a member or members of the corporation.

April 20, 1978
The Budget-Mr. Neil
This is a fairly common situation in corporate set-ups, particularly within the province of Saskatchewan. Because of capital gains tax and other features, in many instances it is deemed wise that the father retain ownership of the land and rent it to the corporation. Where the grey area exists is in the interpretation. What is the position if the father and his sons are members of the corporation and that corporation is farming rented land, is the property in question immediately before death or transfer being used by the farmer, his spouse or his children as a farming operation?
This situation has caused a great deal of concern since the budget was introduced. From the interpretation made by some top tax experts, I understand their feeling is that the way the budget reads and the ways and means motion reads, in instances where the land is being rented by a corporation then there can be no tax-free roll-over.
I would ask the Minister of Finance (Mr. Chretien) and the government to give this matter careful thought with the idea of clarifying the situation. It places the farmer in a situation where, if he is renting land and wants to dispose of it, he has no alternative but to cancel the lease with the corporation. He or his child or children would then operate it for one year and at that point would effect the roll-over. It seems ridiculous to have to go that route but that is the situation. I would urge the minister to take steps to see that the matter is clarified and, if necessary, changes are made to provide that the regulations will be equitable.
I should like to say a few words now about registered retirement savings plans, Mr. Speaker. Many individuals throughout Canada who have an RRSP appreciate the changes proposed in the budget which would provide more flexibility than there has been in the past. They allow for an annuity to be purchased till age 90 rather than a life annuity to be purchased at age 71. They also provide for some flexibility with respect to the type of RRSP that an individual can have.
A number of people have expressed concern to me about being tied to this age 90 annuity or the life annuity at age 71. They say, in many instances, that they have been saving all their lives anticipating that when they retire they will be able to take a trip with some of the money they have saved. Many people do travel at age 70 to 75 when their health is still good. They want to know why it is not possible to have flexibility in the plan that would enable them, when they reach age 70, to draw larger amounts out of the plan for, say, the first three or four years in order that they could take a few trips and enjoy their retirement.
It cannot be said that the government would lose any tax as a result of a flexible program such as this. If the moneys were withdrawn from time to time they would be taxable. If the government is concerned that the individual who withdraws the money might not pay the tax or might spend the money and have none with which to pay tax, they could deduct, say, 15 per cent of the amount withdrawn in each of the years and the company could remit that amount to the tax department.

These people are concerned because in many cases they have saved all their lives in anticipation of getting some enjoyment out of their twilight years. I suggest that the Minister of Finance look carefully at the regulations to see if he can make some arrangements for greater flexibility to allow these people to determine the amount they can withdraw from the program, at least in the first three or four years after reaching age 71.


Iona Campagnolo: Mr. Speaker, in view of the fact that there is a request for royal assent at 5.45 p.m., I wonder if I might ask for unanimous consent to call it six o'clock at this time?


The Acting Speaker (Mr. Turner):: Is it agreed that we call [DOT] it 5.45 p.m. rather than 6 p.m., since we have royal assent at 5.45?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: Order, please. I have been advised that the gentleman from the other place will be here at about 5.55 p.m. I would suggest that the hon. minister carries on with her speech.


Iona Campagnolo: Mr. Speaker, I had hoped that it would be possible for me to give my speech all at one time. However, I am certainly willing to commence and use the remaining three minutes.


Stanley Howard Knowles: You have 13.


Iona Campagnolo: In this particular budget there are certain items of interest to people in British Columbia. I think the item most in demand is the one concerning board and lodging benefits and tax-free benefits for all employees at remote work sites. Remote work sites are sites where people cannot be expected to build or maintain a home in the ordinarily considered way. People live on these sites and as well they have homes in various parts of the country. They maintain their families and they put their children in school and then go off to the remote site. This particular provision has made it possible for employees in these remote areas to receive tax-free benefits.
Of course, there were other items in the budget to stimulate the economy and assist the recovery of this country. Because of this industrial growth will be increased. To strengthen consumer buying, to get goods moving and to create more jobs is really what everyone is seeking in a budget in an admittedly difficult time. To do this it would be advisable to cut taxes, and cutting taxes is a popular art especially just before an election. There are those who cynically believe that one would do just about anything before an election in order to have a favourable result. I think that the Minister of Finance (Mr. Chretien) has put that to rest in a very outstanding way by gaining the co-operation of the provinces, even if it has been made into a somewhat politicized issue.
I feel that my colleagues and indeed many Canadians are willing to congratulate the Minister of Finance for his respon-
April 20, 1978

sibility and clear-sightedness in preparing this budget for us. I am particularly impressed as a northerner from the far west of this country that the budget did include, as I stated, a number of measures that will be of direct and immediate benefit for the kind of Canadians 1 represent.
It is from that perspective that I wish to enter this current budget debate, from the perspective of one who cares deeply about the people who live in the far reaches of Canada outside of our major cities. There are two matters that I wish to draw attention to. First, I would like to highlight what this budget, together with other economic measures taken by this government, will mean for the far west and north, areas of critical importance to Canada because of the part their vast mineral and other wealth plays in our balance of trade. Second, I want to look at economic performance in these areas during the tenure of our current Prime Minister (Mr. Trudeau) and under the influence of comprehensive Liberal economic policies.
For the benefit of members of the opposition with short attention spans, and sometimes I am afraid minimal comprehension, let me give short answers first. On the impact of this budget, I say that its measures will mean increased activity in many sectors of the economy which are particularly important to the west and to the north. This is true for logging, farming and for exploration sectors, as it is for many others.
On recent economic performance, I can say that the west and north have seen excellent progress and performance in most sections, even in the face of global economic upset during part of the last decade. In this regard, almost every economic indicator of importance shows significant real advances. In addition, the federal government has co-operated with the provinces in undertaking projects that will build the infrastructure of this nation. The positive results are obvious for anyone who looks objectively at the figures available.
I will come back later to these points about healthy economic performance in the west and north and will fully document them for you, Mr. Speaker, and for hon. members of the House. First, I want to deal with the positive impact which many of this budget's measures, together with accompanying measures that augment the budget's effectiveness, will have on the economy of this part of Canada over the coming years.
I think it is important that we see this budget in its context of other economic initiatives taken by this particular government. A budget is an important tool of economic management. I remind hon. members, however, that it is, after all, only one tool. Its many positive programs and elements serve to support and advance a whole range of programs designed to build this country and to increase the prosperity of Canadians everywhere. The opposition makes the dishonest ploy of selectively focusing on certain elements of the budget, when it is the rest of the budget and the rest of this government's far-reaching economic programs that are really part of the whole picture. It is fashionable on the other side to make selective statements as if other things did not exist.
The Budget-Mrs. Campagnolo



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable Deputy to the Governor General desires the immediate attendance of this honourable House in the Chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate Chamber. #
[ Translation]
And being returned:
Mr. Speaker informed the House that the Deputy Governor General had been pleased to give, in Her Majesty's name, the royal assent to the following bills:
Bill C-45, An Act to provide for the continuation of regular postal service operations-Chapter 23.
Bill C-19, An Act to amend the Petroleum Administration Act and the Energy Supplies Emergency Act-Chapter 24.
Bill C-46, An Act relating to the discounting of overpayments of tax under the Income Tax Act and related payments-Chapter 25.
Bill C-18, An Act to amend the Anti-Inflation Act and guidelines-Chapter 26.
Bill C-8, An Act to amend the Canada Labour Code-Chapter 27.
Bill C-29, An Act to amend the Farm Credit Act-Chapter 28.
Bill C-35, An Act to establish the Canadian Centre for Occupational Health and Safety-Chapter 29.
Bill C-2, An Act respecting the administration and development of certain Fishing and recreational harbours in Canada-Chapter 30.
Mr. Speaker:: It being six o'clock, I do now leave the chair until 8 p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Chretien that this House approves in general the budgetary policy of the government.
[Stage Direction]
April 20, 1978
The Budget-Mrs. Campagnolo
Iona Campagnolo: Mr. Speaker, as I was saying just before six o'clock, I think my colleague the President of Treasury Board (Mr. Andras) did a particularly good job of showing up the opposition on the budget when he joined this debate last week. While the hon. member for York-Simcoe (Mr. Stevens) argued that the total economic stimulus in the form of tax cuts for the coming year amounts to something under $1 billion, the President of the Treasury Board listed a comprehensive list of tax cut stimulants which will amount to $4.5 billion in 1978. The Conservatives are uncomfortable with these figures because they dwarf the $2.2 billion Tory tax cuts over three years which they propose.


Mr. Lambert (Edmonton West):: Would the hon. lady deliver here own speech?


Iona Campagnolo: Mr. Speaker, hon. members opposite bray and yell but I will deliver my speech as others have done.


Harvie Andre: The minister of fun and games is playing games with parliament.


Iona Campagnolo: The hon. member opposite forgets that he reads almost everything he utters except his ad libs, and I wish he would stand up when he makes them.
Let me be more specific about the positive impact of measures contained in this budget and in current programs to stimulate the economy and build for the future. In remote logging and construction camps such as I mentioned earlier in my remarks before six o'clock, wage earners will receive higher after-tax income as a result of the measure to remove the value of board and lodging in relation to earnings. Not only will this put more money into the pockets of a sizeable number of men and women, people who are consumers as well as workers, but it will help employers to attract and keep those employees engaged in these projects which contribute so substantially to Canada's industrial growth.
There is also a particularly good bit of news in the budget for the many farmers who have steadfastly maintained the tradition of family farms and who have incorporated their holdings. The announcement that tax-free roll-overs will be extended to include incorporated family farms means that the tradition of family-owned and operated farms is being protected and encouraged. This provision will be very significant for the many farmers outside the large acreage farm belts of central Canada, but in my part of the country it is only the most recent of a whole range of government initiatives designed to facilitate agricultural development.
In July of last year the Prime Minister and Premier Bennett announced a joint program aimed at agricultural and rural development which will pump more than $80 million into agriculture in the province of B.C. over the next five years. It is a comprehensive program which will help small agricultural communities develop facilities for serving the farm community. It will rehabilitate extensive range lands, provide money for market and other research and fund such projects as new irrigation systems. This, together with the budget announcement, is a convincing commitment to the future of small scale agriculture in Canada as well as to large scale corporate agricultural groups.
But the commitment to agriculture in the west and north and Canada at large does not end there. The Minister of Agriculture (Mr. Whelan) and the Minister of Transport (Mr. Lang) recently announced plans to build additional grain handling facilities in Prince Rupert to take the pressure off Vancouver and to facilitate the movement of grain from northern Alberta to a northern export port. The commitment to rail upgrading, to the provision of additional rolling stock, and to aggressive overseas marketing-an effort that has consistently produced record sales-all form part of the comprehensive plan for economic development in this sector.
The current budget makes brief but telling reference to mining. I know it is popular to deride the future of mining among the doomsayers across the way. It is a sector on which much of this country's wealth is built. I believe the federal and provincial financial and resource ministers are in the process of reviewing the taxation of the mineral industry, with an eye to its continued health and importance.
This process of careful review is taking place against a background of active involvement by governments in developing the infrastructures that will make rapid mineral development possible when world markets inevitably draw on Canada's huge potentials in this area. Two examples of this approach can be found in the joint agreements between the federal government and the government of B.C. in developing coal and uranium resources in the province. In January, 1977, we signed an agreement that put $3 million into transportation, manpower, community resources, and environmental studies. It was followed in May, 1977, by a second agreement that will make available $10 million for the same purpose over the next three years. These agreements are in addition, Mr. Speaker, to projects such as Roberts Bank-in which I know the hon. member in the back row opposite is interested-which has already made a huge contribution to the B.C. economy.
In April, 1976, we joined with the province in funding regional geochemical exploration in B.C.-specifically aimed at identifying and developing uranium resources.


An hon. Member:: Good old Social Credit.


Iona Campagnolo: The Social Credit government would not have undertaken this without the federal government's share, which I would think hon. members opposite of whatever political stripe would welcome.


Mr. Deputy Speaker:: The hon. member for Surrey-White Rock (Mr. Friesen) is rising on a point of order?


Benno Friesen: Yes, Mr. Speaker. The minister made reference to me as "the member in the back row". I wonder if she would permit a question.

April 20, 1978


Iona Campagnolo: Yes, I would welcome it, but I would prefer to have it at the end of my speech rather than now.


Marcel Joseph Aimé Lambert: Because the speech is too well written.


Iona Campagnolo: The hon. member from somewhere in Edmonton sits there like an old gentleman at a tea party. I wish he would await his turn quietly, as he usually does.


Stanley Howard Knowles: What is wrong with old gentlemen who drink tea?


Iona Campagnolo: About $600,000 will be spent on the program as a seed investment that may result in a whole new industry in that part of the country.
In a few moments I will be putting figures before the House that attest to the strength of that industry in B.C. and to its remarkable growth during the tenure of this government, but let me point for the moment to the impact government monetary policies are having on the mineral industry this year. The devalued dollar has made most of our mining products particularly attractive to foreign consumers, with the result that the value of mineral production in the province of B.C. alone rose by about $290 million last year to a record $1.89 billion. The federal government has moved to make new export facilities available for bulk commodities like coal and sulphur with the announcement of the Ridley Island, B.C., port development over the next three years-a development fueled by close to $20 million from the federal treasury. This is the sort of comprehensive approach needed to keep such industries competitive and healthy well into our future.
My colleagues have gone into some detail in explaining the positive impact that can be expected subsequent to a cut in sales tax. In British Columbia the federal government will fund a 2 per cent cut in the cost of consumer items. That, I believe, will be a signal to consumers to buy, with a range of spin-off benefits for retail merchants, wholesalers and manufacturers.
But again, if one were just to look at this element of government economic measures, one would not see their comprehensive and integrated nature. To use the example again of the more remote parts of B.C., the federal government is co-operating with the province in funding an ambitious five year industrial development program that will pump up to $110 million into its economy. The money is available to help fund the construction of such things as industrial parks to assist municipalities in attracting businesses. Other money is directly available to manufacturing, service and small business ventures and other similar industries. The money will fund industrial commissions, which in turn are eligible for money for market research, research that will help to establish the potential of these remote areas in British Columbia.
To aid the fishing industry on the west coast, there has been a considerable amount of funding, research and a great deal of work undertaken. My colleague the Minister of Fisheries and the Environment (Mr. LeBlanc) has undertaken an ambitious
The Budget-Mrs. Campagnolo
multi-year program to restore depleted fish stocks, especially depleted salmon stocks.


Benno Friesen: So that Americans can catch them.


Iona Campagnolo: The hon. member fails to note, I suppose, that last year Canadian fishermen had the highest return in many, many years.


Some hon. Members:: Hear, hear!


Iona Campagnolo: The $100 million plus salmonoid enhancement scheme has already yielded results in the form of above average catches on the Nass and Skeena rivers in the past year. This is a fact that augurs well for the future of this most important industry, an industry that is currently valued at more than $300 million at the wholesale level.
The introduction of the 200-mile fisheries protection limit, together with the reduction of the number of foreign vessels in our waters, promises to increase the volume of the catch for Canadians, the numbers of jobs for Canadians, and the strength of the Canadian economy as a result of the increasingly significant contribution this industry will make to our balance of trade.
These elements of the budget and related economic measures, as I said at the outset, will mean increased activity in all of the sectors I have mentioned, certainly in the short run but, more important, over the long run. These are measures that build for the future-and that is what good government rather than opportunistic government is all about.
I also promised in my introductory remarks to look at the economic record of B.C. over the sweep of the last ten eventful years. I am pleased to be able to say that according to most indices, the economy in that part of Canada has paralleled the growth of the economy in all of Canada-it has steadily advanced. In the last couple of years, B.C.'s economy has actually outpaced that in the rest of Canada because it has been the direct beneficiary of a number of federal government programs I have already touched on, and because certain B.C. industries have benefitted from the very phenomenon the Conservatives are so strongly denouncing-the devaluation of the dollar.
I will speak more about our current economic status and about our immediate prospects in a few moments, but first let me dig into the past. The Conservatives would have Canadians believe that we are all a lot worse off than we were when the Prime Minister came to office ten years ago. If one were to believe those prophets of despair, Canadians are less productive, less well fed and less prosperous than before. One would expect less investment, lower production volumes and a lower standard of living. But that is not the case, and I will present a few figures to make my point.
First, let me indicate some sweeping indicators as guides to our economic progress: gross provincial product, new capital investment and the value of exports. In 1967 British

April 20, 1978
The Budget-Mrs. Campagnolo
Columbia's gross national product was an acceptable $7.1 billion, but in 1977 it stood at over $24 billion, which is a 350 per cent increase, fueled largely by an increasingly buoyant export market.


Marcel Joseph Aimé Lambert: Constant dollars?


Iona Campagnolo: "Constant dollars" is what the hon. member is saying. In any dollars a 350 per cent increase is a very large amount.


Marcel Joseph Aimé Lambert: Oh, oh!


Iona Campagnolo: I hope the hon. gentleman is not bubbling over with good humour because of his dinner.
New capital investment in 1967 was about $2.6 billion in British Columbia. Last year it was $7.2 billion, which is roughly a 250 per cent increase. With the exception of 1968, real investment figures have increased every year, jumping by close to a billion dollars a year over the last two years, each year. It is jumping by close to a billion dollars each year.
The value of exports leaving British Columbia was about $2 billion in 1967. Last year it was $8.4 billion, which is a 430 per cent increase. Also this figure has taken enormous strides during the last couple of years.
The record in these three critical areas puts the lie to Conservative babblings about hard times. Of course we have problems, all nations have problems, but what are we doing? We are doing a lot more than just coping. We are advancing at a rate that most other countries would like dearly to emulate.
If hon. members think I have deliberately stacked the deck by choosing just a few especially good figures tonight, while more gloomy ones go unmentioned, let me point out significant advances on other scales as well. Retail sales advanced from $2.6 billion in 1967 to $3.3 billion in 1970; to $4.6 billion in 1973; to more than $7 billion in 1977. This is more than a 200 per cent increase in ten years. Mineral production values jumped from $380 million in 1967 to $530 million in 1971; to $1.3 billion in 1974; to $1.8 billion in 1977. This is another 400 per cent increase. The landed value of British Columbia fish catches has recorded a 300 per cent increase in the decade. It advanced from $50 million in 1967 to $150 million last year. Remember this is the landed value of the catch. At the wholesale level the value of the catch passed the $300 million mark last year.
The lumber industry has been more variable over the decade, because it is more subject to market conditions in other countries than most. When building starts are down in the United States, the Canadian lumber industry suffers as a result. But in that decade the number of board feet of production advanced from about 7.1 billion board feet to roughly 12 billion. The industry has more than recovered from the bad years of 1974 and 1975 and is looking forward to an excellent year in 1978.


Marcel Joseph Aimé Lambert: Thanks to Bill Bennett.


Iona Campagnolo: Thanks to Bill Bennett? The hon. member must forget when British Columbia had its last election. There was an interregnum, which the hon. member for Winnipeg North Centre (Mr. Knowles) will also take credit for.
Investment in primary industry has marched from $390 million in 1967 to $1.1 billion in 1977.


Mr. Nystrom:: Why the hon. member for Winnipeg North Centre (Mr. Knowles)?


Iona Campagnolo: Because the hon. member for Winnipeg North Centre is my friend. That is why I mentioned him.
Investment in manufacturing has taken place at roughly the same rate, going from $430 million in 1967 to $1.3 billion last year. I could refer to all sorts of other great and magnificent increases, as multi-percentage increases are certainly there in British Columbia and in the western provinces in general.
I can see some hon. members opposite starting to wince, as they do when they hear some true figures for a change, so let me conclude my numbers by pointing to progress in British Columbia in a field the opposition has chosen as its very own-employment. If we were to believe the Conservatives and members of the New Democratic Party, no progress should have been made in securing livelihoods for British Columbia residents or, in fact, from listening to them during question period, for any Canadians whatsoever.
The figures indicate the following: between 1967 and 1977 more than 354,000 jobs were created in the province of British Columbia. Employment is currently at an all time high, with 1,065,000 men and women gainfully employed in that province. The rate of job creation shows every sign of soon outstripping the truly phenomenal rate of increase in participation in the work force. When that takes place, as it will because of the promising national and world economic picture a few months and years down the road, then the economic stimuli wisely implemented by this government will ensure that unemployment rates return to the very low levels all Canadians have a right to expect.
If hon. members still think I am overly optimistic or perhaps a little selective, let me conclude by pointing to the economic prospectus for British Columbia which was prepared by the Employers Council of British Columbia. This was prepared for the coming year. That council is predicting a real growth rate of 5 per cent for 1978. It foresees strong markets for our products in all nations, but most importantly, those nations which are on our specific list, such as Japan. There are other nations which are of interest to our western economy, such as the countries of the European Economic Community and the United States. The council predicts strong years for the fishing industry, the tourist industry, the oil and gas industry and for a number of key mineral industries. The legacy of the controls program is part of the significantly improved labour scene, and it will make the predictions possible. The Employers Council thinks this will continue for another year, and we will see
April 20, 1978

vastly fewer days lost to strikes and lockouts, as we have experienced since the program of anti-inflation began.
I am proud of the record of this government. As I have said and supported, I have particular cause for satisfaction as a resident of northwestern Canada. I ask Canadians to look at what the record really contains, and to give the doom and gloom portraits of the oppositions the scorn they deserve. Once again, I make mention of the hon. Minister of Finance. As I said a few moments ago, good government rather than opportunistic government is something special. Good government is what we have. It has done and will do more for the average Canadian than the nay-saying, crepe hanging of hon. members opposite. This government is led truly and surely by a rational, logical, intelligent leader; not someone who has to bear the indignity of a teeny, tiny perfect threat to his opposition leadership.
We are a team on this side of the House. We have a leader of whom we are very proud and one whom the world respects. Respect is what I am talking about tonight. I am not only speaking of leadership, I am also speaking of the solid, year-in, year-out service to human beings that members of the government spend their time on. Hon. members on this side of the House stand for service to the people of this nation, whether an individual in Canada, a group with special interests, be they large or small, or a lot of Canadians seeking changes to adapt to a new and sometimes very frightening future. This is a government of service, as well as a government of leadership.
This was a budget of service, and the budget debate on this side of the House has shown what kinds of services are offered to hundreds of thousands of Canadians.


A. Daniel McKenzie: As Your Honour is apparently giving special privileges to hon. members on the other side-


Mr. Deputy Speaker:: Order, please. I would hope the hon. member would withdraw that remark.


A. Daniel McKenzie: Well, explain then, Mr. Speaker.


Mr. Deputy Speaker:: Order, please. I would ask the hon. member to resume his seat. I keep the count in co-operation with those at the table, and the hon. member would be the first one to object if I took a minute away from him. The hon. member might not have been in the House when the proceedings started this evening. I do not know if he was here, but he did not check the time. In any case, I think his remarks are not appreciated by the Chair at this time.


Iona Campagnolo: Mr. Speaker, I only have one more minute and I was mentioning that this is a budget of service; service to all Canadians, even the hon. member opposite. It is perhaps only a question of time, sir, before people in this chamber address not only you but all those who are looking in to see what kind of a House this is. We will address both you and the nation at the same time. I should like to emphasize that those of us who are British Columbians-
The Budget-Mr. Epp


Mr. Deputy Speaker:: Order, please. I have to interrupt the hon. lady as her time has expired. I did allow half a minute for the intervention.


Benno Friesen: Mr. Speaker, on a point of order.


Mr. Deputy Speaker:: Order, please. I should mention to the hon. member that the hon. lady's time having expired, she could not answer a question.


Mr. Jake Epp (Provencher):: Mr. Speaker, I have been listening very carefully to the speech that has been read by the hon. minister. She read very quickly during the entire length of her speech, in fact so quickly I was not sure whether she did not quite believe it herself or-


An hon. Member:: Have you got a speech to give?


Arthur Jacob (Jake) Epp: -she wanted to get over the material as quickly as possible.


An hon. Member:: Why don't you give a speech?


Arthur Jacob (Jake) Epp: Mr. Speaker, that hon. member has just made the longest speech and the least intelligent of his career. I was wondering why she was going over the speech so quickly and whether she did not quite believe it herself. I should like to make one suggestion to the hon. minister. If she paid anyone to write that speech, on behalf of the taxpayers of Canada she should ask for a full refund.


An hon. Member:: You are sick. Make a speech yourself.


Arthur Jacob (Jake) Epp: If she does not, then the treasury will have been very sorely done in by paying for the speech she made today.


An hon. Member:: Why don't you make a speech yourself?


Arthur Jacob (Jake) Epp: Mr. Speaker, I will get to my speech as soon as-


An hon. Member:: You have been recognized to make a speech.


Arthur Jacob (Jake) Epp: Mr. Speaker, I will get to it as quickly as there is order in the House.
We have been listening to various government members during this budget debate, and one might think one was not living in the reality that is known as Canada today. For example, it has been mentioned time after time that investment in this country is not being made in order to create the number of jobs that we need, first of all simply to maintain the present unemployment rate, to say nothing of reducing it.
The hon. minister spoke for half an hour and at no time did she ever refer to the crisis that is now facing us in Canada as a result of the one million unemployed. She acted as if the situation did not exist, and as though there were not one million unemployed. She never mentioned that. Nor did she mention that there are young Canadians under the age of 25 today who, upon entering the labour force, have doubled the national unemployment average. Never did she mention that there were students coming into the labour market at the end

April 20, 1978
The Budget-Mr. Epp
of the academic year, this month or at the beginning of the next, who cannot find jobs.
Let us look at the facts as presented by impartial observers-for example, the Conference Board of Canada. Its report today stated that barely three months ago, in January, Canada's real growth after inflation was estimated at 4.7 per cent.
It is generally regarded that we need 5 per cent real growth just to maintain present growth, and with that we will not even have started to reduce the unemployment rate. Three months after making that projection the Conference Board today lowered that projection to 3.9 per cent. The fact of the matter is that we do not have enough growth in this country at this point in time to give to our young people and our unemployed the opportunities they deserve.
We could look at the loss of investment capital in Canada. At no time did a member of the cabinet get up and say what the government was going to do simply to reduce the exodus of investment capital from this country. Every time investments of this kind are made outside the country two things are obvious: the first is that many Canadians do not have confidence in this government and are, therefore, investing outside Canada; they do not have confidence in the economic leadership of this country. That is simple.
Even more important-and this is a long term effect-is the fact that as we invest outside Canada we do not invest to create the jobs we need now. Right now we are exporting jobs. As western Canadians we have chafed for a long time over this situation. We have said that in our view we have not realized our economic potential because of exporting raw materials without enough processing at home. Members from western Canada regardless of their political persuasion have put this argument forward. The situation has gone even further in that we have now reached the point where we are exporting jobs not just out of western Canada but simply out of Canada. That is a very tragic situation.
What I want to do today is bring to the attention of the House some of the realities of Canada and some of the opportunities that I believe exist. Earlier the Minister of Employment and Immigration (Mr. Cullen) quoted from a statement by the Prime Minister of England, Mr. Callaghan, in which he stated that one cannot create prosperity by government spending, and one cannot create prosperity by spending oneself out of trouble. I agree with that statement. You cannot spend more than you produce for a long period of time without reaping the negative effects of that economic approach.
This is the situation we are facing in Canada today. The huge deficits being rolled up by this government will not be paid by any member of this House. They will be paid through lost jobs lost opportunities and high taxes on our children and their children. The legacy of spending by this government is now becoming a legacy of debt for future generations. The future generations will be saddled with this debt. There is no point in minimizing that fact. It is simply a fact that exists.
We have seen from the British Columbia and Manitoba experiences that it is very difficult for a provincial or a federal government to cut back. I am not suggesting for a minute this is easy or that it is a panacea. However, it does take leadership, and this government has not shown leadership in putting in place those programs needed to create expansion. It has in fact continued a process that has cost great amounts of money, but from which we have received very little in long term economic benefits.
The government has not emphasized the spending of public funds on job creation on a long term basis within the private sector. Every government that is now faced with deadlock- whether a federal, provincial or municipal government-is faced with the startling reality that they cannot continue spending the amounts of money that they have been spending in the past. What the government intends to do, according to the budget statement of the Minister of Finance (Mr. Chretien) is spend $1 billion a month more than it takes in in any given month over the next year. The government expects to have a deficit of SI 1.5 billion, roughly a $1 billion shortfall a month. They intend to over-spend this year more than the total budget for the first year of the government of the right hon. Prime Minister (Mr. Trudeau) when it stood at $9.9 billion. Today the over-spending exceeds that by one and a half million dollars.
I ask the members of this House, is that economic leadership? Is that courage? Is that an economic statement that is worthy of praise, or economic leadership that one can go to the Canadian people with and say "Look how well we have led"? The point that I am making is that it will be difficult for any government to cut back. Why is it difficult? The minute a program is established it creates within itself a dependency factor which benefits certain areas but does not necessarily benefit the total economy or all of the Canadian people. I challenge every government in Canada today to get their economic house in order. It is going to mean difficult decisions. There are going to be negative reactions from many people who feel that they are being done in by that kind of program; but it is a program that is extremely necessary if we are to give to our children and grandchildren a heritage that will allow them to develop the potential that I believe is Canada.
I would like to spend some time on the matter of farm income. One of the most incredible statements that I have heard in this House was made by the Minister of Agriculture (Mr. Whelan) the other day. I quote him from Hansard at page 4641, April 18, 1978:
I am so tired of hearing talk about farmers who have lost their net income. I wonder how many are honest enough to admit why farm land is higher in value in Canada than it is in the United States. The answer should be plain and simple to them. It is because farm income is generally better in Canada and because farmers, if they are efficient producers, are provided more security in this country that they are in any other nation of the world. None of our programs provide any kind of income for an inefficient producer who is lazy and does not want to work. He or she must work or they will not get that kind of living or that kind of net income I have just talked about.

April 20, 1978

He further said:
I am so tired of listening to politicians and even some farm leaders who talk about farm income going down. I received a letter from a so-called farm leader from British Columbia pointing out that the farmers' incomes had dropped 9 per cent. Mr. Speaker, do you know how much farm income went up in 1975? At that time it had an increase of 187 per cent.
That is what is recorded in Hansard, but what are the facts. The Canadian Federation of Agriculture in its statement to members of parliament dated April, 1978 said:
If the 1978 figure is reduced 19 per cent to 1975 dollars, it becomes $1,562 billion, a drop from 1975 of an horrendous 54 per cent.
How can the Minister of Agriculture say there is an increase of 187 per cent when the Canadian Federation of Agriculture-and I would think that those members who have a rural riding know that the Canadian Federation of Agriculture is a very credible organization-comes out with this report?
I went a little further, Mr. Speaker, because I wanted to find out what was happening in Manitoba. Here are the figures, taken from Statistics Canada data as compiled by the Manitoba Credit Union Federation. They are not my compilation, so it cannot be argued I used wrong addition or sleight-of-hand. In 1976 the gross income of Canadian farmers was $9,975 million. The expenditures of farmers in 1976 in Canada gave them a net income of $3,706 million. In 1977 that net income was reduced to $3,372 million, and in 1978 it is estimated that there will be a further drop to $3,082 million. Even a zero growth I would understand, but not 187 per cent.
Let me now go to Manitoba, because that is the province I was most interested in. In 1976 Manitoba farmers had a gross income of $897 million and costs of $570 million, for a net income of $327 million. In 1977 their income was $892 million, and costs of $611 million gave them a net income of $281 million, a drop from 1976. The estimate for this year from the same statistics is that income will escalate to $904 million with a comparative cost increase of $656 million. It is estimated, Mr. Speaker, that their income will drop even further to between $248 and $260 million. How can the Minister of Agriculture say that there has been an increase? He cannot use the figures of gross income without looking at input costs, because surely, every person in this House and every farmer in this country must look at income as income after expenses. Surely no other figure is valid. I say to the Minister of Agriculture, almost in disillusion rather than anger, that Canadian farmers are in desperate straits because of the cost-price squeeze they are in.
Let us look at some of the solutions. In Manitoba we have a program in the Interlake region known as the ARDA program. The ARDA program, and I say this quite openly, I believe had beneficial effects in the Interlake. The program in the Interlake was used for drainage and land clearance, with a general approach to expanding the agricultural base. At that time we in southeastern Manitoba were hoping that our area would also be included in the special ARDA region. Conditions were similar. Unfortunately, this was not to take place.
The Budget-Mr. Epp
What has happened, not through my leadership but through that of farmers and local municipal officials in the far southeastern corner of Manitoba, is that they have created a development corporation known as the Stuartburn-Piney Agriculture Development Association. A large portion of the land mass of this area is Crown land, and primarily provincial Crown land. The province is working on a plan in conjunction with the farmers so that they can sell some of this bona fide Crown land to farmers in order to expand the agricultural base. I hope that plan will be put into effect shortly.
A survey was done in that area by these constituents and it showed some very interesting facts. It showed that there was not enough developed land for an agricultural base that would have economic viability. It showed that people in the area were interested in land development and in making the investment, and that what they needed was an incentive program. Three-quarters of the respondents to the survey indicated that drainage and water control was a problem. The underlying argument, however, was that they needed to expand the tax base and create an infrastructure.
I think a few facts should be put on record about the findings of this committee, Mr. Speaker, and I should like to quote from the study as follows:
The farmers of the L.G.D. of Stuartburn and Piney suffer from the lowest farm incomes and poor agricultural services in the province of Manitoba ...
65 per cent earn $1200 to $5000 gross. There are several reasons for this:
(1) Very small percentage of total land, only 4 per cent and 7 per cent respectively in Piney and Stuartburn is developed crop land. In most cases, a lot more land can be developed and put into agricultural production ...
What they propose-and I want to present this to the Minister of Regional Economic Expansion (Mr. Lessard) and the Minister of Agriculture-is the following. I believe the first recommendation is the critical one. It reads as follows:
First we propose that this area be designated for assistance under a long term federal-provincial ARDA-type program bearing some of the following points in mind:
Then they clearly spell out the various advantages that program would have and the areas of development they would like to see take place.
I listened to the Minister of Regional Economic Expansion state today that he would be signing an agreement with the government of the province of Manitoba tomorrow. I urge and recommend to him that first of all we need a general development agreement for the southeastern part of Manitoba. That agreement should not only include tourism, which is an attractive option for that area, but should definitely include a program similar to the special ARDA area that was used in the Interlake. At the present time the minister of agriculture for the province of Manitoba has associated himself with this report. He wants to move ahead and we look forward to the co-operation of the federal minister in this program. I ask the minister not to worry about press releases and announcements that an agreement will be signed tomorrow, but to put into that agreement terms which will allow for the development of this area and the growth that these people deserve.
4722

April 20, 1978
The Budget-Mr. Epp
I also want to mention that tourism in that part of Manitoba as well as eastern Manitoba must be expanded. This is a job creator. The spin-off affects the area substantially. I made numerous representations to the former minister of national revenue-wherever he might be today-and to former ministers of national revenue-


Miss B6gin:: What is wrong with us?


Arthur Jacob (Jake) Epp: Mr. Speaker, I suggest to the Minister of National Health and Welfare (Miss Begin) that she was better in her former portfolio than the present one. I also say to the Minister of National Health and Welfare that if she is still interested in the problem, highway 59 should be open for a longer period of time as a port of entry. This is important. Communities along that highway have asked for it. Chambers of commerce such as St. Pierre have asked for it, but there has been no positive response from the federal government.
There are other areas of eastern Manitoba where I believe potential exists and can be developed. There is the old question of the northlands agreement. That was signed and was to be a general development agreement to expand economic activity in the north. We have seen very little positive effect from it. I say to the government and to the Minister of Regional Economic Expansion that a development program is needed throughout eastern Manitoba. We must get a program that does not just spend money on research and more studies. We have been literally studied to death. I say, use some of the money for development.
Let me give an example of what I mean, Mr. Speaker. I mentioned to the Minister of Industry, Trade and Commerce (Mr. Horner) that research and development should be expanded, for instance, into tantalum mining in eastern Manitoba. We have at least 66 per cent of the world's reserves of cesium tantalum. We were exporting some to the U.S.S.R. so we placed it on the export control list. I am not arguing the point that it should be placed on the export control list. We have a potential there. But instead of expanding research and development, instead of expanding opportunities for ancillary manufacturing that could come from that mining, we literally closed the place down and said that if we cannot export it to our traditional markets, nothing will happen.
I should like now to speak of small business, and this takes me to the matter of taxation. A great deal was said in the budget about the reduction of sales tax by the federal government. I say quite openly that it is hoped the reduction of sales tax will have a beneficial effect on retail sales in Canada, at least for the next six months. What will happen when we go into the winter period and the tax comes back is another question.
I want to point out what happens between the time something is presented to us in the House and the person back home is faced with the regulations which flow from decisions made here. In the March 31, 1977, budget there was a provision for a roll-over if a person sold his farm or small business and used the full amount of money to buy another farm. In that case there was to be a deferment of capital gains

tax. That was really the essence of the program. I announced it in my riding and in the budget debate I supported the provision. Indeed, most hon. members commended the government for that action.
I find things a little strange now, however. First the government puts on a capital gains tax and then removes it in certain instances in two subsequent budgets. A case was brought to my attention of a farmer who had land and a poultry operation. He decided to sell the poultry operation and rolled the total proceeds over to purchase more land to expand his grain operation. Revenue Canada taxed him. It was never mentioned in this House that if a farmer-let us say a hog producer- should sell his hog operation and buy a larger operation that was not a hog operation, he would be taxed. That is trickery. That is what creates the cynicism that we find about government throughout Canada.
The Parliamentary Secretary to the Minister of Finance (Mr. Lumley) is here this evening. I have mentioned this situation to his minister and to the Minister of Agriculture. I thought last week that we were making some progress and that that regulation, which I found out in fact does exist, would be modified. I had high hopes that common sense would prevail. But what do I find out this week? I found out that a farmer can sell a farm, say a dairy farm, and use that money for a rollover only if he buys a larger dairy farm. If he buys a grain farm, he will be taxed.
Was that the way it was presented to the people of Canada on March 31, 1977? No way. I say to them, Mr. Speaker, that is the ignominy that this government will have to face with the farmers and the small businessmen of Canada. No matter how you cut it, it was not presented to them in that way. I say to the farmers and the small businessmen of this country that if that regulation is not removed with the provisions that were in the March 31, 1977 budget and this recent budget, then they had better be careful before they make any move whatsoever.
I notice that the Minister of State (Small Business) (Mr. Abbott) is in the House tonight. He has made a few pronouncements that small business is going to get the government off its back; less red tape, less bureaucracy, more return. I say to the minister that I hope he is right. I hope that what he has said will in fact take place and that I will not have to come back to him a few months later-


Steve Eugene Paproski: You won't have to because they won't be in power.


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. member that his allotted time has expired.


Otto Emil Lang: Mr. Speaker, the hon. member for Provencher (Mr. Epp) closed his remarks by touching on a particular interpretation of a regulation and its enforcement. He then immediately drew from that example a conclusion, the wrong one. But instead of waiting and pursuing the interpretation, pursuing it not only through gov-
April 20, 1978

ernment but also through the various processes which are available, he drew an interpretation of skepticism and cynicism which is so common in those who constantly oppose.
The record of this government is clear as being sympathetic to the various needs and situations in which our Canadian farmers find themselves in regard to their taxes. This budget included a new move in relation to the extension of the rollover of the capital gains tax to the corporate farm structure. Those of us on this side of the House who saw the need for the rollover for farmers in the first place thought that it would apply fairly broadly. We found as a matter of interpretation that the way the law was written it did not apply to corporations. We were first told there might be some difficulties in applying it in that regard. We persisted and we saw that the change was in fact extended.
That is not the first example by any means of the extension of tax advantages to farmers. I would remind the hon. member for Provencher that when it came to the question of delivery of grain and how that grain would be delivered, it was this government which quickly responded to a need on the prairies, where the quota system exists and where farmers were in the position of not necessarily being able to control deliveries, for a new device-the idea of preferred tax credit where they could deliver their grain and have the grain counted in the following year for tax purposes, if that is what they chose.
Those are just small examples, but important ones, of the way this government has been responsive to the needs of that sector of agriculture to which the hon. member for Provencher most recently referred.
It is extraordinary that the hon. member today would talk about agriculture and its needs when the record of the Conservative party, even when it was represented by large numbers of members from the west, was such a sorry story in the area of agriculture. It is most extraordinary indeed.
Hon. members opposite, including several from Saskatchewan and other prairie provinces, were critical when an analysis of all the developments which have taken place in agriculture in the last eight or nine years went out not long ago from this government. It was a long document with many items in it of tremendous importance to farmers, and particularly to grain farmers to whom it was addressed. It included such things as hopper cars, with an expenditure of $250 million for that item. It included the introduction of two-price wheat. It included grain stabilization which the Tories have so long fought to stop from coming into existence, not because in their hearts they thought it was unwise, but because they did not want to see a program of that quality put in place by a Liberal government with the Liberals taking credit for it.


Some hon. Members:: Hear, hear!


Otto Emil Lang: The story goes on and on, list after list.
Two-price wheat is significant because that is an item which was asked for by prairie people long before the Conservative government was in power with all its prairie strength in the years 1957 to 1963. What would that prairie story of the
The Budget-Mr. Lang
Conservative government have shown if they had printed it at that time? There would be one item of permanence and merit and that item would be cash advances. There would have been one other item and that is two pre-election $100 payments on an acreage basis, to a maximum of $200, which were pure election gimmicks and which the Conservatives have looked for ever since. Their grain story for six years, with a prairie prime minister and prairie members in the Conservative party, could have been printed on two pages, and one of those pages would have been blank.


Some hon. Members:: Hear, hear!


Otto Emil Lang: Perhaps not blank because, as hon. members have noted, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) would have insisted on his picture being printed, showing him signing a sales agreement in a boat off the shore of China, an agreement which he was pretending to sign because in fact it had been signed and completed by the Canadian Wheat Board weeks before he got there to put his pen to that agreement.


Steve Eugene Paproski: You wouldn't say that to his face.


Otto Emil Lang: I have said that to his face in Regina many a time. The opposition-


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order, please. The hon. Minister of Transport has the floor and I suggest we listen. We have all had our day; let us give the Minister of Transport his day.


Some hon. Members:: Hear, hear!


Otto Emil Lang: Mr. Speaker, the opposition are in a sorry state when it comes to making suggestions to deal with what are difficult questions in today's economy. They are difficult economic questions and recognized to be that by everyone, particularly by this government. They are also the kinds of questions which require sensible and sensitive solutions, not a lot of rhetoric such as we have heard today.
The budget which the Minister of Finance (Mr. Chretien) brought in clearly did the right things for today, for this week, for the economy of this country, in striking the right balance between further encouraging economic development and yet taking very careful note of the need to restrain the financial spending of the federal government because of the dangers of inflation. We had had a target of 5 per cent growth. It began to look as though that might not be achieved in real terms. The hon. member for Provencher referred to a Conference Board figure of 3.9, but he failed to say that the Conference Board said that their figure did not take into account the recent stimulus put into the economy by the Minister of Finance.


Some hon. Members:: Hear, hear!
80038-9'/2

April 20, 1978
The Budget-Mr. Lang


Otto Emil Lang: The budget of the Minister of Finance was a courageous budget, one which was welcomed by economic experts across this country as being the right thing for today,
The extraordinary testimony about the quality of the budget of the Minister of Finance is the fact that some members suspect, probably with some correctness, that we are fairly close to election time. It could have been very tempting for the Minister of Finance to accept a suggestion that more be done in the way of tax cuts, that he not restrain himself to the $1.2 billion in total tax cuts being accomplished in these next six months by his reduction in sales tax, whereby he helps the provinces to create those reductions. He could have done more about that if he had not been careful about the advice of his best advisers or not cared about the comment and advice of reasonable experts everywhere.
What in the face of that budget do the opposition parties come up with at a time when there are challenges and you might think they would be dreaming solutions of their own? The hon. member for York-Simcoe (Mr. Stevens) comes in with a motion that suggests there be a tax cut of $2 billion on the income tax side. Essentially the New Democratic Party through the hon. member for Waterloo-Cambridge (Mr. Salts-man) said that a sales tax cut is the right cut. In neither party were there imaginative ideas about what the government should do in the way of further job creation. There was no criticism, particularly of our Canada Works programs, our other major ventures and all the rest.
There were a few comments by the opposition about matters chosen from the first ministers' conference and the background papers, such as the economic development which we see ahead and where 11 first ministers agreed that the course the government was on was right. Hon. members opposite then say there should be a tax cut of $2 billion a year. What the Minister of Finance came up with was a tax cut of $1.2 billion in six to nine months, which is a greater tax cut than they with their best imagination are able to come up with as economic advice today.
The evidence was clear that this was the right thing to do. Economic advice clearly indicated that was the best course available to this government. The banks, the senior civil service and all outside advice agreed as well, so much so that the opposition did not dare to suggest, even in their own position of opposition, that much more should have been done in that regard.
One might well ask where the Leader of the Opposition (Mr. Clark) gets his economic advice. The hon. member for Don Valley (Mr. Gillies) is now moving out of that scene, probably because he sees that not very much in the way of economic quality and advice is required or wanted by the Leader of the Opposition.


Some hon. Members:: Hear, hear!


Otto Emil Lang: When I think of the Leader of the Opposition and his advice, I am reminded of a premier of Saskatchewan
some years ago who, looking across at one particular member of the opposition, referred to him as a yahoo. That word created some parliamentary difficulty in those days. Things are different now. Hon. members may not know what a yahoo is; he is a close relative of "Joe Who" when it comes to his economic advice. Where does he get this economic advice?
Look at what he thinks of advice inside the government. Whereas the Minister of Finance was accepting the best that was available, the Leader of the Opposition was sneering at it, just as he sneered at the RCMP and police of this country a few months ago when his party, instead of calling them in or having the key sleuth in his party call them in, fearing their offices were being bugged, did not trust the police. In all their attacks on the police, they could not get away from the fact that they have not trusted the best possible advice available in that circumstance, just as they do not here in economic circumstances.


Some hon. Members:: Hear, hear!


Otto Emil Lang: They called in a group from outside, a group the quality of which is now a matter of public record. I remember one great day in Saskatoon. The morning edition of the Star Phoenix had a picture of the Leader of the Opposition peering at his telephone. There were some words to the effect that "Clark finds some listening device there". It turned out to be a top head diode, a regular part of the equipment. The afternoon edition of the Star Phoenix had much the same picture, much the same front page. It changed the headline. It read "Clark device normal". That was very reassuring to many of us. Those who believe in a healthy opposition were certainly delighted to see that bit of evidence.
The sales tax was the right tax. One of the delightful things in the Minister of Finance's introduction of this particular sales tax is that once again he was able to demonstrate the way this government seeks the support of all the country in taking what is indeed a differential approach in the way a tax is handled.
The Atlantic provinces have less financial capability than many others. In complete keeping with the spirit of this government's putting very high priority on the development of the Atlantic area and promoting causes there, the minister said there would be a 3 per cent sales tax reduction without any cost to them, fully reimbursed by the treasury. In this Liberal party, members from the west, central Canada and the Atlantic area support that kind of program, in that regard and in every regard, showing that we believe in the development of this country.
I look at the programs of this government from one part of the country to the other, programs which are designed to spur development by taking action when it is required to allow the free enterprise side of the economy to operate, which is what hon. members opposite ask.
I look at the west coast and I see our development in the ports. I see the Vanterm terminal, Lynterm, the Fairview terminal in Prince Rupert coming to a conclusion, the investment we propose to make in Ridley Island, our willingness to

April 20, 1978

co-operate through DREE in the northeast coal development. You see there, step by step, the laying of the groundwork for investment by Canadians which will mean many jobs in the future right across the country.


Mr. Smith (Churchill):: What about Churchill?


Otto Emil Lang: The hon. member asks what about Churchill? There too we have millions of dollars going into dredging and lighting programs, and $l'/2 million going into rail improvements during the course of the next year to build the capacity of Churchill, because we have confidence in it. So would everyone else in that area if they did not have a member who constantly "hoo-hoots" gloom and doom in the face of our programs.


Some hon. Members:: Hear, hear!


Otto Emil Lang: In the prairie provinces, I mentioned our developments in assuring grain transportation in the sense of $255 million worth of hopper cars. There are members opposite who go into other regions of the country and use that as a negative example against this government. Of course, they very much hide that from people in the prairies whom they want to support them. That is the kind of division they go through. One of their members says "Everything is done for the prairies and nothing is done for us here". They are always dividing the country instead of trying to see the positive side of good action in every region.
The stabilization program was an example of recognition by this government on the tariff structure in this country, which we are trying to improve by lowering the burden it traditionally imposed upon our prairie farmers. There was built into our structure such things as the Crowsnest rate on grain, built in and maintained because of the problems the grain farmer faces in this tariff world. We carried through on that, instead of doing nothing, as the Tories had done in their years of power, with, I say again in astonishment, a prairie prime minister and a House full of prairie Conservatives. They did nothing of note for that particular farmer.
It is a monument of credit to this country and to real democrats within it, like my Liberal colleagues from central Canada and the Altantic provinces, that when we come forward with one, two, three or four voices alone from the prairies, they do not ask whether, in providing hopper cars and $60 million a year for grain stabilization, and now $75 million a year for rail rehabilitation, there would be political consequences in our favour. They only asked whether it was right for the regions, and they were then willing to do it.


Some hon. Members:: Hear, hear!


Otto Emil Lang: The railway rehabilitation program is a positive example of our moving forward in an optimistic way in the prairie region in terms of the grain handling program. This program means that, with the Hall commission report and the Snavely commission report and the action now being taken,
The Budget-Mr. Lang
we shall in the course of seven or eight years have transferred to the basic rail network the bulk of the prairie grain lines and rehabilitated every one of those miles of lines with ties where required, stones to lay the ties upon which will last for half a century, and with rail which will carry those fully loaded hopper cars. That is the kind of action which is forthcoming from this government in the prairie region.
This budget also recognized the need for further railway investment. This is important in many parts of the country but particularly in the west where so much freight traffic will increasingly move. The last budget made provision for easier investment by the railways. There were cash flow advantages to the railway companies through increased depreciation allowances. One further step in that regard was taken by the Minister of Finance in this budget.
You know, Mr. Speaker, you could not at this time of restraint have implemented immediately and in full the recommendation of the Hall commission to pay the total of $200 million a year as an additional sum to the railways. But we did the important thing. We paid that part of it which could assure railway rehabilitation in getting a contract agreement with the railways and assure that every penny was spent on equipment for those rail lines. Though not being able to go the whole distance as the commission recommended, we did put the railways in a better position be giving them depreciation advantages, and this, too, will be reflected in terms of rail development by improving the cash position of the railways.
I could go on to mention the development of a heavy oil processing plant in the Lloydminster area. Concessions in the budget make this possible now as soon as the provincial government in Saskatchewan comes forward with some certainty in this area. The plant is ready to go. The investment would be there if the provincial government would move. Once again we have seen a significant and sensitive approach by the Minister of Finance in the field of economic development affecting our western provinces.
The Atlantic area is one to which the government constantly attaches extremely high priority as far as development is concerned. We have seen in that region advances in the development of ports, highways, airports, and now also of bus transportation, which signify the importance we attach to this area. In the last two weeks I have had the privilege of visiting several of the cities in the Atlantic region. I have seen an additional forest products terminal being put under way in Saint John, New Brunswick.


An hon. Member:: Did you fly there?


Otto Emil Lang: Yes. The small-minded Conservative from I know not which constituency asks me: Did I fly there? Indeed I did. And, indeed, that record of transportation costs which they like to allege and criticize from time to time is made up over the years of trip after trip after trip by myself and my staff to places all over this country to talk transportation to people who want to hear.


Some hon. Members:: Hear, hear!

April 20, 1978
The Budget-Mr. Lang


Otto Emil Lang: I do not back away from the fact that in this country members of the government have to fly frequently when they want to meet with people far from the centre of administration. I have met with hundreds and hundreds of groups of farmers from throughout the prairie provinces by doing just that, and by flying to those meetings I have been able to go there and back in one day and also attend to cabinet matters which affect the prairies and the rest of the country, which is, of course, what I am expected to do.


Some hon. Members:: Hear, hear!


Otto Emil Lang: Still dealing with the Atlantic region I would refer to a couple of transportation initiatives we have taken, such as the development of the ports. In Halifax, only two days ago we turned the sod for a new container terminus which will meet the needs of the port and which will be ready just as the terminus is ready for completion. It is not, as some Tories have suggested, a part of the country which would be neglected by us because we favour some other region. Again I refer to speeches they make in their own areas spreading this divisiveness and terrible negativity in which they constantly engage.
I was also in Charlo and Wabush and Gander visiting new airport developments which would encourage regional development in a major way by providing important transportation links between those areas and the rest of the country. In the last two weeks I have signed highway agreements with all four Atlantic provinces which involves an expenditure of $100 million of federal money joined with $100 million of provincial money to develop highways and strengthen highways across the Atlantic region. This means there will be uniformity of truck rates so that the most economic handling of trucks will be possible in the region, thereby furthering the development we want to see.
The development of the Atlantic region in particular, of course, through the department of my colleague the Minister of Regional Economic Expansion (Mr. Lessard), has always received a very high priority from this government and will continue to do so. We do not think we have found all the solutions, but it is very evident that we have the will to try to develop the Atlantic provinces and find a way to allow people who go there to stay there and find jobs. The will is present and we will keep searching for new, different and better ways of helping development there. I say again on behalf of all of us on this side, including those from the west, and I say this proudly of myself: we in this government put very high priority on Atlantic development.


Some hon. Members:: Hear, hear!


Otto Emil Lang: Mr. Speaker, I have mentioned a number of regions of Canada and outlined what the government is doing for them-the effort it has made to understand their varying problems. I could say the same about central Canada where port development at Hamilton, Montreal and Quebec is under way. Almost unnoticed, $125 million is being spent on Toronto International Airport. These are important developments to meet particular needs.

I should like, however, to say something about another issue which is not directly economic. It concerns my colleagues from Quebec and the desire of my Francophone friends to see promoted in this country a place for themselves and their culture. This government has responded, initially with the support of parties opposite, and I hope we can count fully and firmly on their support today, too. We responded because Liberals in all parts of the country felt it was an important priority which had to be taken into account. We did so because, whether we came from the west or from Ontario, we wanted to provide for our friends who were interested in Francophone development in this country what we ourselves would want if we were in such a minority position.
Time and time again the government has been able to find ways of meeting needs, and in speaking of this issue, just as in the case of economic issues, it has never expressed itself in one way in one part of the country while putting forward a different view elsewhere. That is of fundamental importance.


Some hon. Members:: Hear, hear!


Otto Emil Lang: I hope the Conservative party will dedicate itself to controlling its many members so that they follow the principles for which they voted several years ago. Of course, I am not sure that one can expect a great deal from a leader of a party who has, after all, succeeded at nothing else but hopes to succeed at being prime minister.


Some hon. Members:: Oh, oh!


Otto Emil Lang: I suppose I should make an exception because of the fact that he won the leadership by being the third choice of everyone present on that particular occasion.


Some hon. Members:: Hear, hear!


Otto Emil Lang: The way he chooses his advice, by going away from the RCMP and the police to an outside source for excellent advice, is another example of his quality of leadership and his judgment. He said the other day, however, that he has accomplished one thing, and that is unity within his party.


Walter David Baker: You have the ethics of an alley cat.


Otto Emil Lang: He loses members here, there, and everywhere and says he has unity within the party.


Some hon. Members:: Oh, oh!


Walter David Baker: You are disgusting.


An hon. Member:: If he is the only one left, he will have unity all right.


Otto Emil Lang: I see, Mr. Speaker, that he has just managed to come through with a major constitutional proposal which he puts on the desk and then quickly says: "Of course, this is for discussion." I see three Conservative comments noted in the
April 20, 1978

paper today. One of the outstanding senators in the Conservative party says that that would lead to a house of obstruction; the second one says it is a half-baked idea. The Conservatives might say these are just senators, but then I could refer to the right hon. gentleman from Prince Albert (Mr. Diefenbaker), who has sat in this House for some 37 years now, when he was faced with the proposals of the Leader of the Opposition (Mr. Clark).


Walter David Baker: Mr. Speaker, I rise on a point of order.


Some hon. Members:: Oh, oh!


An hon. Member:: You cannot take it.


Walter David Baker: May I just say that for this speech, the Minister of Transport (Mr. Lang), who has been known to misuse aircraft-


Some hon. Members:: Oh, oh!


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


Walter David Baker: -and has shown himself to have the morals of an alley cat, ought to be ashamed of himself. He ought to know that his government is the cause of the great difficulty that our country faces, and I would like him to address himself to the problems in the country.


The Acting Speaker (Mr. Turner):: Order, please. I would like to suggest to the hon. member for Grenville-Carleton (Mr. Baker) that that is not a point of order.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the minister that his allotted time has expired. The hon. member for Yorkton-Melville (Mr. Nystrom).


Otto Emil Lang: Mr. Speaker, I rise on a question of privilege.


Some hon. Members:: Oh, oh!


An hon. Member:: Sit down, turkey.


An hon. Member:: You're finished.


Otto Emil Lang: Mr. Speaker, I will want to look at the rules to consider further what course of action I ought to take because I had some difficulty hearing the hon. member for Grenville-Carleton (Mr. Baker), if I may call him that, but I heard some rather distinct slurs. It seems to me he took a bit of grievance out of some reference I made to the Leader of the Opposition. It happens to be true, which is why, no doubt, he grieves even more.
He has some nerve, Mr. Speaker-and this will be my question of privilege-to use slurring language in regard to me when over these many months and years he has, from his place, tried to make it appear that I was somehow doing something unfair, indecent, in doing my job. He constantly made it appear, in a despicable way which should be beneath
The Budget-Mr. Lang
contempt, except that the hon. member for Grenville-Carleton has no standards at all with which to restrain himself-


Some hon. Members:: Hear, hear!


Otto Emil Lang: The hon. member for Grenville-Carleton is giving one of his big, broad smiles because he does not take seriously what he does to the political system and to people who work within it. I may say, to the credit of some of his colleagues and I think also to some of mine, that there are many members in this House who give a great deal of effort and dedication to politics and who do not deserve the standards of politics which the hon. member for Grenville-Carleton is showing when he takes them into the mud and makes slurs upon them the way he has again tonight.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Turner):: The hon. member for Grenville-Carleton is rising on the same question of privilege.


Walter David Baker: Mr. Speaker


Some hon. Members:: Oh, oh!


An hon. Member:: Apologize.


An hon. Member:: That is the only course you have.


Steve Eugene Paproski: Go to a judge.


An hon. Member:: Go call a judge.


The Acting Speaker (Mr. Turner):: Order, please. The Chair would like to hear the response of the hon. member for Grenville-Carleton.


Walter David Baker: Mr. Speaker, if I have in any way slurred the Minister of Transport in an unparliamentary way upon his examination of the record, he knows and I know that I would withdraw it. But I am going to say to the Minister of Transport that I believe-


An hon. Member:: Resign.


Walter David Baker: I would suggest to the Parliamentary Secretary to the President of Privy Council (Mr. Pinard), who said the minister should resign, that perhaps he should.


An hon. Member:: You should resign.


Walter David Baker: I will examine the record, but I hope that, with respect to ethical conduct by the government, the Minister of Transport in that government would not hold up as a model to Canadians the conduct of this government and those who have been associated with it. Never in the history of this country has there been a government that has been so involved in the courts as a result of-


Some hon. Members:: Oh, oh!

April 20, 1978
The Budget-Mr. Nystrom


The Acting Speaker (Mr. Turner):: Order, please. The hon. member for Yorkton-Melville.


Harvie Andre: Otto, that was good practice for the opposition.


Lorne Edmund Nystrom: Finally, Mr. Speaker, I have a chance to say a few words, but I will be brief because the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack) wants to say a few words to the House tonight, which will be his last in the House after serving here, I believe, some 16 years. His anniversary will be on June 18. I will try not to take up too much time to enable him to say a few words of farewell to the House.
I will briefly mention three items-


The Acting Speaker (Mr. Turner):: Order, please. The Minister of State for Small Business (Mr. Abbott) wishes to rise on a point of order.


Anthony Chisholm Abbott: Mr. Speaker, I rise on the same question of privilege. I do not think it is quite enough for the hon. member for Grenville-Carleton (Mr. Baker) to rise and describe a minister of the Crown as having the personal ethics-


Some hon. Members:: Oh, oh!


An hon. Member:: Come on!


Steve Eugene Paproski: Raise it tomorrow morning.


Anthony Chisholm Abbott: -the personal ethics of an alley cat, then try to make a speech about it, then sit down and for the debate to move on. I think that that was a disgraceful moment.


Some hon. Members:: Oh, oh!


An hon. Member:: And you are a pussy cat.


The Acting Speaker (Mr. Turner):: Order, please. I would like to remind all hon. members that in his comments the hon. member for Grenville-Carleton suggested that, after he has taken a look at the written record tomorrow, if he finds he said anything unparliamentary he would be willing to withdraw it. So I consider the case closed.


Otto Emil Lang: Mr. Speaker, I rise on the same question of privilege. I indicated earlier that I had not heard the precise words due to the noise, but I gather that one of my colleagues did hear them and he has now referred to them. Presumably the hon. member for Grenville-Carleton would know himself whether he used those words. If he did, surely the words are clearly unparliamentary. Perhaps he would have the good grace to confirm whether or not he did use them and, if so, withdraw them without further ado.


Some hon. Members:: Oh, oh!


Walter David Baker: Mr. Speaker, I think that I have made myself fairly clear to the minister. I think it should be understood clearly that I have very little regard for the Minister of Transport-


Some hon. Members:: Hear, hear!


An hon. Member:: Who does?


An hon. Member:: Nobody in Canada does.


Walter David Baker: -whether as Minister of Transport or otherwise, together with the government. I have very little regard for this government. If the minister would like me to read into the record tomorrow other things about the government, and to waste the time of the House doing that, I will do so. The public already knows these things.
I respect this place. Sometimes it is a place of harsh words. Those words, harsh or not, always should be parliamentary. If I have offended the rules, then he knows and I know. Indeed, all hon. members should know. If that is the case, I will withdraw those words; but I want an opportunity to examine them tomorrow.


Otto Emil Lang: Mr. Speaker, I am sorry I am having difficulty with the hon. member for Grenville-Carleton. It seems to me he would know if he used those words. If he used those words, it should be very clear to him, as well as to Mr. Speaker, that those words are unparliamentary. If he has any respect for this place at all, he should not wait any further. I put that to him very directly. Perhaps he can end the matter by withdrawing those words, and I will not get into a speech about my respect for the hon. member.


Walter David Baker: I think the hon. minister should look at the record to see what I said.


The Acting Speaker (Mr. Turner):: Order, please. Perhaps we should wait until tomorrow to see the written report. The hon. member for Grenville-Carleton has indicated that if he used unparliamentary language he would be willing to withdraw it. At this time the Chair considers the incident closed.


Lorne Edmund Nystrom: Mr. Speaker, ethics of a tomcat or not, I think the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack) and I are being short-changed.


An hon. Member:: I think we all are.


Lorne Edmund Nystrom: Perhaps we all are. I want very briefly to touch on three issues, because I have only approximately seven minutes.
The economy of this country is in real rough shape. Many people indicate that Canada is in good condition, especially when one considers what is happening around the world. We in this country have a lot of resources such as oil, gas, potash, iron ore, lead, zinc or what have you. Our people are highly educated. We have all the technology in the world that we need. If those three things are put together, it seems to me a society could be developed in Canada which would be second to none in the world. It is a real crime that the government is not entertaining that type of plan.
April 20, 1978

Back in the days of the second world war, I am told by hon. members of the House, such as the hon. member for Winnipeg North Centre (Mr. Knowles)-


Mr. Parent:: Before the second world war? Perhaps the first world war?


Lorne Edmund Nystrom: Not the first world war.


Gilbert Parent: What about the Boer War?


Lorne Edmund Nystrom: No, not the Boer War. I am referring to the days prior to the second world war.


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order, please. It being 9.45 p.m., the Chair recognizes the hon. member for Grenville-Carleton on a point of order.


Walter David Baker: Mr. Speaker, there has been an agreement arrived at among all parties that Your Honour ought not to see the clock at 9.45 in order for us to continue until ten o'clock.


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


Stanley Howard Knowles: That is agreed, Mr. Speaker.


Lorne Edmund Nystrom: Perhaps I should quit.


Some hon. Members:: Hear, hear!


Lorne Edmund Nystrom: I meant perhaps I should quit speaking. At any rate, prior to the days of the second world war, Canada was faced with a situation similar to that of today. There was a lot of unemployment in this country. People were told that money could not be found to put them back to work, to build schools, hospitals, roads and other necessary things. The government of the day indicated that it could not find a money tree. Suddenly a war broke out, and within a few short weeks, the government found money. They took men off the rails and took men out of the unemployment lines. They bought them uniforms, shined their shoes, filled their teeth and put them to work fighting a war, working in munitions factories or various factories across the country that were building tanks, boats and things for Canada's war effort. If that can be done during the time of war, surely it can be done during peacetime. We could declare war on the unemployment situation and the inequality which is present in Canada.
Many people ask what unemployment really means. It is said that it only affects a few of us, but that is not true. In the last year, unemployment has cost Canada approximately $8.5 billion. Approximately $4 billion of lost productivity, $3 billion in welfare and unemployment insurance payments and $1.5 billion in lost taxes make up that total. Instead of that money being spent on welfare and lost productivity, perhaps that amount and more should be spent on putting people to work. That would create a much better and wealthier nation for each and every one of us in the long run.
The Budget-Mr. Nystrom
The Minister of Transport (Mr. Lang) referred to the question of rail line abandonment, which is something important to the people of the prairies. The Hall commission determined that approximately 2,000 miles of rail lines in the prairies should come under the prairie rail authority. That was suggested because a decision could not be reached as to whether or not the 2,000 miles of rail should be preserved in the basic network or abandoned. The Hall commission thought the matter required further study, and that the PRA be established for that purpose between now and 1990.
Instead of establishing a prairie rail authority, the Minister of Transport established a small advisory body composed of his friends. It is known as the Prairie Rail Action Committee. Apparently it does not have a mandate to go into various communities and hold hearings. I am referring to the communities which the Hall commission could not make a decision on. A number of those communities happen to be situated in my riding on two rail lines, namely, the rail line which runs from Preeceville to Kelvington, and the other one which runs from Canora to MacNutt. The people in those communities have set up Save Our Rail Lines committees. They want the prairie rail authority, the CTC or someone who is able, to make a decision. They want those authorities to come out to their communities to see the reason why those rail lines must be preserved. They have strong, solid arguments, and they want to present their cases to the government. The least the government can do is to instruct the Prairie Rail Action Committee, if the prairie rail authority is not going to be established, to go to those communities and hold hearings in order to provide those people with a chance to fight.
If they were provided with a chance to fight their cases in front of federal officials, I am sure they would save those rail lines. The rail lines which are placed inthe category recommended by the Hall commission deserve to be transferred to the basic rail network. I am sure the hon. member for Assiniboia (Mr. Goodale) could point out other cases.
Before I give the hon. member for Frontenac-Lennox and Addington a chance to participate in this debate, I should like to refer to the question of farm incomes. The other day the Minister of Agriculture (Mr. Whelan) indicated that Canadian farmers are enjoying quite a bit of affluence. When he quoted his figures, he forgot to mention that he was referring to farm income jumps between 1971 and 1974. He picked 1971, which was one of the worst years Canada has ever had in relation to farm incomes, and 1974, which was one of the better years.
If one refers to those two years, of course there will be a substantial increase in farm incomes. But in the last three years, farm incomes have dropped drastically. From 1975 to 1977, in fact farm incomes went down by 73 per cent in Canada. I am referring to the net farm income which goes into the pockets of farmers. At the same time farm costs have risen by 18 per cent. Farm incomes have dropped by 23 per cent at the same time as farm costs have risen by 18 per cent. Canadian farmers deserve better, but they have not received such from the hon. minister. When one looks at other statistics
4730

April 20, 1978
The Budget-Mr. Alkenbrack
concerning farm incomes, it is evident that the trend is continuing downward rapidly, despite the programs which are in effect today.
For example, in Saskatchewan, the cash receipts of farmers between January 1975 and 1978, according to the minister's own department, have dropped by 55 per cent. During that same period of time, the cost of operating prairie farms has risen by some 23 per cent. How can a farmer be expected to pay his bills, if the costs are rising by 23 per cent and his income is dropping by 55 per cent?
There are many other things I could say, but out of courtesy I will conclude my remarks at this point in order for the hon. member for Frontenac-Lennox and Addington to have an opportunity to say a few words of farewell before he retires.


The Acting Speaker (Mr. Turner):: Order, please. I should like to point out to hon. members that this could be the last speech of the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack). He has served his country well for the past 16 years. On behalf of the Chair, officers of the table and hon. members of the House, I wish him well.


Some hon. Members:: Hear, hear!


Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Thank you, Mr. Speaker, thank you my colleague, the hon. member for Yorkton-Melville (Mr. Nystrom), thank you ladies and gentlemen, colleagues in the House of Commons. I am pleased to make my contribution to the debate on this budget, although it will be brief.
The best definition of this budget is that it is a short term election device of the Liberal party.


An hon. Member:: There goes the goodwill!


Some hon. Members:: Hear, hear!


Almonte Douglas Alkenbrack: It is regrettable, sir, that the policy makers of that party did not find themselves able to look beyond the next election. Sir, the Prime Minister (Mr. Trudeau), in marking the end of his decade in power, having been first elected to the high office in 1968, marks the end of this decade at this time.
In 1968 when the first Trudeau government came to power, the Prime Minister campaigned under the slogan "The Just Society". If the just society meant anything in 1968, it was a clear mandate to Trudeau and the Liberals to attack regional disparities across our country, to work to alleviate poverty in our society and to improve employment conditions and fight unemployment in our society.
The slogan "The Just Society" would imply a fair system of taxation. In order for the just society to prosper, inflation should have been controlled. Again, a just society would expect the wise spending and administration of tax moneys levied from that society by this government, in whom that so called
[Mr. Nystrom.l
just society had pinned its hopes. Our society of 1968 expected continuation of healthy trade relationships with other countries and the usual measure of necessary tariff protection for Canadian industry that would be vulnerable to unfair competition from countries employing cheap labour.
That once strong society of 1968 expected that our government would be a good neighbour among the comity of nations, helping those less fortunate than ourselves as long as it was not at the expense and dire hardship of unemployment of our citizens. That just society expected a reasonably strong economy that would sustain itself if it were left alone and was not over taxed or dictated to by a federal government.
That 1968 just society I mentioned implied good co-operation and good relationships between the so-called two founding races of our country; the French and, for want of a better description, the English. We expected bilingualism would be encouraged only wherever needed in our public service, and wherever numbers warranted this and it was expected.
We anticipated that all these principles and ideas, if put into effect, would maintain the unity we had always enjoyed before this country ever heard of Prime Ministers by the names of Pearson or Trudeau. But, alas, none of those great expectations ever materialized. We are now all asking the question here this evening, even some of those on the government side, as a result of a surfeit of so-called Liberalism and ten years of Trudeau: Where is that just society? It is a myth; it simply does not exist.
Both national unity and justice have been withering and dying over the past decade. The so-called charisma that the Prime Minister was supposed to have possessed is also a myth. The Liberal administration has been a total failure and all that remains at the present time is the Prime Minister's obsession with power and the exercise of power.
To go back over the list of implications I have just mentioned in the meaning of a just society, we see that Liberalism under the Prime Minister has totally failed in this country, and we see where that failure has led us.
Sir, I must now dispense with further remarks I had ready regarding this budget and say to you and to the House that my final remarks during this budget debate tonight pertain to myself, my family and, one might say, "my budget".
As most hon. members know, after 16 years in this House as representative of the former federal riding of Prince Edward Lennox and the still existing riding of Frontenac-Lennox and Addington-that is, it still exists until an election writ is issued-I am voluntarily retiring from federal politics.
I was first elected on June 18, 1962 and I am the last remaining Progressive Conservative member of what we call the "class of '62", although there are several other members remaining in this House from other parties of that class of '62.
My working career began here in Ottawa in 1931 when I was employed by the government of that day, the Bennett government, as a clerk, grade 2, in the Dominion Bureau of Statistics. I was employed on the agricultural census for two years, and the offices of the bureau were on Green Island,
April 20, 1978

down on Sussex Avenue, directly opposite the present City Hall.
My working career as far as this House is concerned also ends here in Ottawa, in this House of Commons, where I was a frequent gallery visitor as a boy in 1931 and 1932, never thinking I would occupy a seat here for sixteen years.


Some hon. Members:: Hear, hear!


Almonte Douglas Alkenbrack: My friends, I have seen quite a bit of the Canadian Kaleidoscope pass in review in this chamber. Although I have sat on the opposition side for the past 15 years, with the goodwill and help of colleagues from both sides of this House I have been able to accomplish many things in the service of my constituents, and I thank you, Mr. Speaker, and other Speakers under whom I have served, as well as members on both side of the House.


Some hon. Members:: Hear, hear!


Almonte Douglas Alkenbrack: I want to thank all hon. members of this present House and that vast throng of other members and colleagues of the past who are no longer here, many of whom have gone to their just reward. My appreciation and commendation also go out to all those who work on Parliament Hill, which of course includes the security staff, the secretaries and
The Budget-Mr. Alkenbrack
the executive assistants, all of whom I remember and recognize with magnanimity and gratitude. My deep appreciation also goes to the public service and all the various departments of government that throughout the years have assisted me in representing my constituents.
I deem it time to return to Napanee, my home in Lennox and Addington county. I invite all my colleagues in any of their journeys throughout our area, or near it, to visit me in Napanee. I can assure them that they will certainly be welcome.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. The question is on the main motion. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


An hon. Member:: On division.


Mr. Deputy Speaker:: Motion agreed to on division.
Motion (Mr. Chretien) agreed to.


Mr. Deputy Speaker:: It being ten o'clock p.m., this House stands adjourned until tomorrow at 11 a.m., pursuant to Standing Order 2(1).
At 10 p.m. the House adjourned, without question put, pursuant to Standing Order.
80038-10'/2

Friday, April 21, 1978