1979-10-23

ROUTINE PROCEEDINGS


Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the energy shortage and the fact that the province of Nova Scotia has substantial coal reserves, and whereas the Minister of Industry, Trade and Commerce stated that the government is committed to increasing research and development, I move, seconded by the hon. member for Cape Breton Highlands-Canso (Mr. MacEachen):
That the Treasury Board give immediate approval to the financing required to set up a coal development centre at the College of Cape Breton to do research into the liquefaction of coal and other research which could ultimately lead to increased uses for coal and to reduced dependency on foreign oil in the Atlantic area of Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN EGG MARKETING AGENCY
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my motion concerns the ongoing problems at the Canadian Egg Marketing Agency and the resignation of its chairman, Murray McBride.
I have been informed that the remuneration of CEMA's general manager, Max Roytenberg, is $105,000 a year plus expenses, which exceeds the salary of the Prime Minister by many thousands of dollars; and, further, that Mr. Roytenberg has made his wife and a company called Roygold Marketing Systems Ltd., which Roytenberg owns in whole or in part, the
beneficiaries of translation contracts with CEMA. Because of that, I wish to move, seconded by the hon. member for Oshawa (Mr. Broadbent):
That this House immediately call for an investigation of CEMA by the House of Commons Standing Committee on Agriculture.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SOCIAL DEVELOPMENT
Mr. Jim Fleming (York West):: Mr. Speaker, I, too, rise on a matter of urgent and pressing necessity under Standing Order 43.
Considering that, in his own words in the House almost a year ago, the new Secretary of State charged that federal cultural institutions were being neglected, and considering that, while the minister attempts to address cultural problems, he is also responsible for the critical communications and social policy fields, and considering that meanwhile Canada's largest urban community has virtually no representation in the inner cabinet, I move, seconded by the hon. member for Trinity (Miss Nicholson);
That this House urges the Prime Minister to relieve the Secretary of State of his social responsibilities to concentrate on vital cultural and communication issues in the inner cabinet, and at the same time urges the Prime Minister to consider appointing the Minister of National Health and Welfare to the inner circle to take over the social policy area and also give representation to more than two million Torontonians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

October 23, 1979


SOCIAL SECURITY ACT
Mr. Raymond Savard (Verdun):: Mr. Speaker, I rise under the provisions of Standing Order 43 and ask for the unanimous consent of the House to discuss a motion relating to a matter of urgent and pressing necessity.
My motion deals with Bill C-6 and the amendments to the Old Age Security Act which have been proposed in the House. Given the fact that there will be discrimination against persons whose spouse died in the six months preceding the date of royal assent, I move, seconded by the hon. member for Saint-Leonard-Anjou (Miss Begin):
That the House direct the government to make eligible for the spouse's allowance all persons whose pensioned spouse has died after the introduction of the legislation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC WORKS
Mr. John McDermid (Brampton-Georgetown):: Mr. Speaker, 1 rise, under the provisions of Standing Order 43, to put forward a motion on a matter of urgent and pressing necessity.
In view of the previous administration's signing of a $14 million lease, four days before the general election, for space it did not require, since the said property at 219 Laurier Avenue West, Ottawa, is owned by a company whose vice president is reported to be the hon. member for Laurier (Mr. Berger), and so that the people of Canada may be assured the contract was not, in fact, political patronage, I move, seconded by the hon. member for Saint John (Mr. Ferguson):
That the Minister of Public Works immediately launch a complete investigation into the negotiations and signing of a lease between the Government of Canada and the Montreal Alouettes Football Club Inc. regarding the space at 219 Laurier Avenue West, Ottawa, Ontario, and report the findings of the investigation to the House.


Mr. Speaker:: The introduction of such a motion for debate at this time would require the unanimous consent of the House. Is there unanimous consent?
[Mr. Speaker.!


Some hon. Members:: Agreed.


Some hon. Members:: No.


RESEARCH AND DEVELOPMENT
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I rise, under the provisions of Standing Order 43, to present a motion of urgent and pressing necessity.
In light of the fact the present government stated that it aimed to increase research and development spending to a target figure of 2.5 per cent of the gnp, and in view of its severe cutbacks in a number of research programs, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the Minister of State for Science and Technology make a statement shortly as to what steps will be taken to meet this target of 2.5 per cent of the ONP for research and development.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSIONS
Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. It arises out of the hardship being caused at the present time to several poor persons and recently bereaved persons.
I move, seconded by the hon. member for Glengar-ry-Prescott-Russell (Mr. Ethier):
That the government cause to be discontinued immediately the practice by which a surviving spouse is automatically expected to reimburse the treasury in the event of an overpayment of a pension to a person who subsequently dies, when that overpayment has been due to an error by a public servant: and, furthermore, that henceforth any attempt to recover an overpayment to a person afterwards deceased, no matter for what reason, should be directed exclusively to the estate of the deceased person.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
October 23, 1979


HEALTH AND WELFARE
Mr. Dan McKenzie (Parliamentary Secretary to Minister of National Defence and Minister of Veterans Affairs):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the fact that since the time medicare was instituted in Saskatchewan, many doctors traditionally have not participated in the medicare plan, that 30 per cent of doctors in that province now are billing patients directly, that less than 5 per cent of doctors in Manitoba are operating outside the plan, and that there is a significant decrease in the budget for hospital insurance and medicare programs in Saskatchewan, I move, seconded by the hon. member for Dauphin (Mr. Ritchie):
That the Minister of National Health and Welfare advise the recently appointed Hall commission to study immediately the reasons for the deteriorating budgetary contribution by the Saskatchewan NDP government for medicare, as well as the significant increase of extra billing by doctors in Saskatchewan.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


OIL PRICES-REQUEST PRIME MINISTER AND PRESIDENT CARTER ACT TO PREVENT UNNECESSARY INCREASES-MOTION UNDER S O. 43
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the fact that President Carter is coming to Canada next month, and that the multinational oil companies dealing in spot markets in Rotterdam, the Caribbean and Singapore are an important cause of the world oil price crisis, I move, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That the Prime Minister try to encourage President Carter to call a meeting with Japan and Germany to bring pressure to bear on these multinational companies to strictly forbid their dealing in this spot market.


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.
_	493
Oral Questions



ORAL QUESTION PERIOD

[Stage Direction]
[ English ]

Hon. Allan J. MacEachen (Cape Breton Highlands-Canso):: Mr. Speaker, I should like to address a question to the Secretary of State for External Affairs based upon the aide-memoire which her government delivered to the American government on Saturday last, a copy of which we received today.
In view of the fact that the aide-memoire refers to preference as stated last April 16 by the former government, preference as expressed on September 28, 1979, by the new government, and no reference to any expression of interest or concern in the intervening period, will the minister not agree that it would have reinforced the Canadian position had she referred to the alleged representations that were made throughout the summer according to the Prime Minister or, alternatively-as I believe-that her aide-memoire is a very clear indication that the government lost the summer in making its views known to the United States government on this very important question?


Hon. Flora MacDonald (Secretary of State for External Affairs):: Mr. Speaker, I am sorry that the hon. member was not here the other day-or, at least, if he was here, he was not listening-when the Prime Minister very clearly outlined the number of contacts which this government had with the government of the United States over the summer concerning this matter.
It was raised on a number of occasions by Canadian officials at the embassy in Washington; it was raised on a number of occasions by direct representation from Ottawa, and the aide-memoire which was sent to Washington last weekend confirmed the position that this government had taken throughout and had stated, namely, a strong preference for the Foothills option, and that it was very concerned-and reiterated that concern-about the possibility of increased tanker traffic on the west coast.


Allan Joseph MacEachen: Mr. Speaker, I would tell the hon. minister that I was present and listened to the answer by the Prime Minister, in which he failed to indicate that the contacts made had anything to do with stating preference for the Foothills pipeline.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: He said meetings were held; but the Prime Minister, in reply to a question by the hon. member for Hamilton East, said the American government understood, and there was no doubt. But never did he say these meetings had to do with Foothills.

October 23, 1979
Oral Questions
1 would follow up by referring to an answer given in the other place last Wednesday by the Minister of Industry, Trade and Commerce and Minister of State for Economic Development in which he said that throughout the summer, members of the government had strongly encouraged and urged-and these are his words-"this preference on the American government". He included the Secretary of State for External Affairs as one of those who had strongly urged and encouraged the American government. I should like to ask whether she did this with Secretary Vance or, more generally, will she tell us to whom she made these representations, and where?


Miss MacDonald:: Mr. Speaker, I would like to say to the hon. member that, obviously, I seem to have more faith in the officials of the Department of External Affairs-


Some hon. Members:: Oh, oh!


David Samuel Horne MacDonald: -to convey messages to the government of the United States than he has; and that is a sad reflection on the time that he was there in that position.


Some hon. Members:: Hear, hear!


David Samuel Horne MacDonald: I may also say that 1 raised this question, along with a number of other matters, when I had discussions with Secretary Vance.


Mr. Trudeau:: When?


Allan Joseph MacEachen: Mr. Speaker, I want to tell the minister that I also have faith in the officials of the department, but 1 see that the government now, instead of undertaking its ministerial responsibilities, is relying on officials in order to carry a message to the American government-and we find that unacceptable.
1 would direct a final question either to the Secretary of State for External Affairs or to the Prime Minister, also related to the aide-memoire,he which seems to leave an escape-hatch to the government of Canada on the question of environmental damage on the west coast which might arise from a tanker route. Is the Prime Minister, or the Secretary of State for External Affairs, now prepared to tell us that under no circumstances will the government consider, support or recommend a proposal that involves tanker traffic on the west coast of Canada?


David Samuel Horne MacDonald: Mr. Speaker, the hon. member, I am sure, will be interested in knowing that this topic will be one of the major issues that will be discussed with the President of the United States by the Prime Minister of Canada when the President visits here on November 9 and 10.
There is no question of the position that will be put forward by the Canadian government, which will be that we do not want increased tanker traffic on the west coast because it would endanger the very precious environment along that coast. That is the position which will be put forward very strongly.


ALTERNATE ROUTE-GOVERNMENT POSITION
Pierre Elliott Trudeau: Mr. Speaker, I am wondering if that position can be interpreted to mean that the government will not support the Trans Mountain route.


Flora Isabel MacDonald: Mr. Speaker, I would think that the Leader of the Opposition-


Mr. Lalonde:: Yes or no?


David Samuel Horne MacDonald: -would want to know that the Government of Canada will accept a position that will make sure that there is no-


An hon. Member:: Yes or no?


David Samuel Horne MacDonald: Members opposite would like a yes or no answer to a position like that. It may be-


Some hon. Members:: Oh! Oh!


David Samuel Horne MacDonald: -that the opposition will be putting forward, as its position, the northern tier route, but that is not the one that this government will put forward. 1 would like the Leader of the Opposition to know that our position, following the outcome of the NEB hearings, will depend on whether or not there is an application continuing from Foothills. That would be the one to which we would give our foremost support.


Pierre Elliott Trudeau: Mr. Speaker, surely, since the meeting will be in a couple of weeks, the government will have to tell President Carter whether or not they support a route which involves tankers.
The government has said that all summer they have not ceased supporting the route for which we indicated a preference, but now the hon. lady cannot seem to answer whether or not she will support another route which does involve tanker.


David Samuel Horne MacDonald: Mr. Speaker, I realize that the Leader of the Opposition has been out of office for a few months and therefore does not quite remember the way in which these regulatory processes work. However, in the case of the Foothills application or the Trans Mountain application, the hon. member should remember that they must go before the National Energy Board. When we see the outcome of that particular decision, we will then be in a position to decide the question which he poses.


Pierre Elliott Trudeau: So it has not been decided?


Allan Joseph MacEachen: It is a possibility?


Mr. Chretien:: The "maybe" minister.


David Samuel Horne MacDonald: I would say to the Leader of the Opposition that the preference which this government has stated throughout is for the Foothills pipeline, and I would hope that that is still a matter which will be before the government for
October 23, 1979

endorsation. I should also say to the Leader of the Opposition-


An hon. Member:: Order.


Joseph Jacques Jean Chrétien: Yes or no?


David Samuel Horne MacDonald: -that if he had given as much support earlier on as his government should have to this matter, then it might have been quite a different proposition.


Allan Joseph MacEachen: Ten o'clock.


Mr. Baker (Nepean-Carleton):: You will be asleep at ten o'clock.


OIL PRICES-GOVERNMENT STEPS TO AVOID PROFIT RIP-OFFS
Mr. Edward Broadbent (Oshawa):: Mr. Speaker, my question is to the Prime Minister. Given that the first nine months' profit figures of the oil industry, which were released today, show that Shell, Imperial Oil and Texaco had an average increase in profits of 52 per cent, precisely at a time when another government report indicated that real incomes of most Canadians were going down, can the Prime Minister indicate to the House what precise steps the government intends to take to stop these profit rip-offs; or does he still believe that even further tax handouts are required for the oil industry?


Right Hon. Joe Clark (Prime Minister):: Mr. Speaker, our view is that the Government of Canada should take every measure it can to ensure as much as possible the investment of the returns of oil companies operating in Canada in energy development in this country. That will be reflected in steps we will be taking as a government.


John Edward Broadbent: A supplementary question, Mr. Speaker. It is very clear that the oil companies will continue to get the hand outs and the poor will get the crumbs from this government.
Considering that by the end of the year the five major companies in this industry will have accumulated $5 billion in profits in the last five years-precisely during the time they were under investigation by an agency of this government for price collusion and manipulation-can the Prime Minister assure the House that before the government takes any action that gives one further penny to these oil companies, it will make the formal investigation report public to the people of Canada and to this House?


Charles Joseph Clark: Mr. Speaker, the Leader of the New Democratic Party knows that there are certain legal processes that must be gone through in relation to the potential charge to which he made reference. I am sure he did not intend the implication that we should hold back any measures that might encourage
Oral Questions
further energy exploration until those legal procedures, which might take some time, are finished. I say "might take some time" because I do not know exactly how long they would take.
I can certainly affirm to this House and to the Leader of the New Democratic Party that it is a matter of very real concern to this government to see that as much as possible of the revenues that come to energy companies operating in this country are reinvested in Canadian energy development. Indeed, we want to see measures taken that will encourage a wide number of Canadians who are not now investing in the energy industry in a position where they can put their investments into that industry in a way that can move this country toward self-sufficiency.


John Edward Broadbent: Mr. Speaker, a final supplementary question-and the Prime Minister knows that he did not answer the question at all. Considering that, presumably, his government and the preceding government would not have maintained a five-year investigation into these companies unless they believed there were very good grounds for suspecting collusion on prices, it is not a frivolous matter. They made $5 billion in profits, when their taxes have been going down and those of Canadians of ordinary income have been going up.
Given the circumstance of multibillion dollar profits in this industry by a handful of firms, would the Prime Minister not agree that it is precisely at such a time Canadians need a publicly-owned and controlled petroleum company like Petro-Canada, over which they have control, to ensure some fair practices in the marketplace?


Charles Joseph Clark: Mr. Speaker, we will resist the temptation of the Leader of the New Democratic Party to rush to a conclusion on this question before the evidence gathered by the Government of Canada suggests that we should lay a charge. What he is suggesting is that because he thinks it might serve his interest in defending a particular concept of state ownership of an energy company, instead of citizen ownership of an energy company, we should move ahead quickly, pressing charges before it would be appropriate according to the law officers of the Crown to move forward with those charges.


SOCIAL SECURITY
Hon. Monique Begin (Saint-Leonard-Anjou):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. In light of the report which has just been made public by Statistics Canada and which now provides facts on distribution of income in Canada and loss of purchasing power, especially for older persons living alone, is the minister, after having introduced yesterday that bill which helps only 60,000-odd senior citizens, ready to tackle the real problem, that is,

October 23, 1979
Ora! Questions
create a special allowance for single individuals receiving a guaranteed income supplement-600,000 Canadians-to make them rise above poverty level?


Some hon. Members:: Hear, hear!


Hon. David Crombie (Minister of National Health and Welfare):: Mr. Speaker, indeed, the report yesterday concerned all of us. I should like to suggest to the hon. member that the review, of which I am sure she is aware, we are undertaking with respect to the pension review-as well as the general review the department has been undertaking which was started by her-is still under way. We hope it will bear some fruit that 1 can bring before the House.
* V *
[DOT] (M30)


FINANCE
Monique Bégin: Mr. Speaker, my question is for the Minister of Finance. 1 am so familiar with the review that when I left we already knew the cost of the special allowance needed for senior citizens living alone and receiving GIS, and it is only $200 million.
Is the Minister of Finance not ready to earmark $200 million from, say, the super-depletion allowance to oil companies in order to offset the effects of inflation for seniors by creating that special allowance for all those receiving the GIS?


Hon. John C. Crosbie (Minister of Finance):: Mr. Speaker, it is too bad the hon. lady did not make the suggestion to her own minister of finance a few months ago.


Some hon. Members:: Oh, oh!


An hon. Member:: Joker.


An hon. Member:: You are in office.


John Carnell Crosbie: I am open to any suggestion from the mothea-ten ranks opposite, and 1 will consider this one too.


SOCIAL SECURITY
Mr. Jean-Claude Malepart (Sainte-Marie):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. To help meet the requirements of small wage earners who are getting poorer, could the minister tell the House

whether he has considered favourably the request of the Quebec Minister of State for Social Development who was asking the federal government to make a financial contribution to the income supplement plan in effect in Quebec for small wage earners. If so, what amount was granted by the department and what are the arrangements?


David Edward Crombie: Mr. Speaker, I assume the hon. member is talking about the Quebec income supplementation plan. If he is, there were two requests from the province of Quebec with respect to that plan. First of all, would the federal government accede to their need to have the income so directed, tax exempt? That request was acceded to by the federal government.
The second request was in relation to whether or not we could participate in the funding. We advised the province of Quebec that we would do so only in relation to its ability to come under the terms of the Canada Assistance Plan. Discussions are being carried out in that sense as of this moment.
[ Translation]


INQUIRY WHY GOVERNMENT DOES NOT NEGOTIATE WITH QUEBEC AGREEMENT SIMILAR TO SASKATCHEWAN'S
Jean-Claude Malépart: Mr. Speaker, I should like to put a supplementary question. Could the minister tell the House why his department is unable to reach an agreement as beneficial for Quebec as that concluded with Saskatchewan under existing programs?


David Edward Crombie: Mr. Speaker, actually there are two or three programs other than the one for the province of Quebec which were talked about in terms of income supplementation. The specific problem with the province of Quebec is trying to find a way in which we could, indeed, participate legally under the Canada Assistance Plan.
In relation to whether or not the federal government ought to participate above and beyond the Canada Assistance Plan, that is a discussion we are having in November with respect to the other interested provinces as well as the province of Quebec.


CANADA ASSISTANCE PLAN
Mr. Ray Chenier (Timmins-Chapleau):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare. Since women's employment is supposed to be a priority of the new government, is the minister now ready to cost-share under CAP the new Ontario work incentive program for single mothers and other welfare recipients, so as to get them out of poverty?
October 23, 1979


David Edward Crombie: Mr. Speaker, my answer is the same as the one given to the hon. member on the other side.


An hon. Member:: A no-answer.


David Edward Crombie: It is a good answer, because it is a very important program to both the province of Ontario and the province of Quebec. It is, indeed, one that will serve the population of those two provinces. We have been caught by the way in which the Canada Assistance Plan was drafted in that we are not able to participate except only in cases of need. Consequently, we have to redefine the matter, and that is to be the purpose of having the discussion in November with appropriate ministers from the provinces.


THE CANADIAN ECONOMY
Hon. J. Gilles Lamontagne (Langelier):: Mr. Speaker, my question is for the Prime Minister. Statistics Canada has reported that the average income for Canadians has dropped by 3 per cent because of inflation and that the number of poor people or those in need in Canada is rising dramatically. Yet this government will be introducing a mortgage tax credit plan which will do nothing to assist Canadians in real need, such as tenants, and which will cost the country billions of dollars over the next three or four years.
Considering the apparent lack of concrete plans by the government to defeat inflation-which has been increasing since these statistics came out-will the Prime Minister tell the House if he will recommend modifying his expensive election promise in order to assist Canadians in need? In addition, will the Prime Minister tell us where he will find the funds to provide social assistance, if he is not going to help needy Canadians in his housing give-away of billions of dollars?


Charles Joseph Clark: Mr. Speaker, we are not proposing to amend that bill, which will be introduced into the House of Commons later this week.


COMBINES INVESTIGATION ACT
Hon.   J.-J. Blais@Nipissing: Mr. Speaker, my question is to the Minister of Consumer and Corporate Affairs. It relates to the trucking affair. I might indicate that as the issue progresses, it becomes one for the protection of the director of investigations under the Combines Investigation Act.
In the Senate, on Thursday of last week, a statement was made by the Minister of Justice that, indeed, the meeting that
Oral Questions
took place was not at his initiative, but was at the initiative of his own officials, and he did not know even the nature of the problem prior to the meeting being called that he had to be told to attend.
I ask the minister whether he knows the director of investigations, for whom he is responsible in this House, and I trust he takes his responsibility very seriously and will seek to protect the interests of the director-


Some hon. Members:: Order.


Mr. Blais:: -was instrumental in calling that meeting, or whether he was a reluctant participant, and whether he agreed with the subject matter of the discussions that took place?


Hon. Allan Lawrence (Solicitor General and Minister of Consumer and Corporate Affairs):: Mr. Speaker, in my view- although I had no hand in calling that meeting-the purpose and the motivation for calling the meeting was absolutely essential.
The hon. ex-minister appreciates that I am under some inhibition as to just what 1 can publicly indicate respecting the purpose of the investigation, ll is a piece of legislation that was not presented to the House by this government, but under that piece of legislation I cannot explain fully the purpose of the investigation and its status at the moment.
Nevertheless, because there has been so much misunderstanding about this particular matter, and because many items have been raised in this House which should not have been raised in the House-


Some hon. Members:: Oh, oh!


Allan Frederick Lawrence: -I feel that I am free at least to tell the hon. member that a meeting of that type was absolutely essential. That particular meeting had to have, as part of it, the Minister of Transport so that that particular minister could be informed of the purpose of the expected prosecution and, indeed, so we could obtain information from that particular minister about certain provincial government regulations and interference in the whole question of rate-setting and route-setting for transport companies in western Canada. For goodness sake-


Some hon. Members:: Order.


Mr. Speaker:: Order, please. The hon. member for Nipissing, on a supplementary question.


Jean-Jacques Blais: Mr. Speaker, 1 am so pleased with the hon. gentleman's very lengthy explanation, but I am asking him whether, in effect, the information he sought from the Minister of Transport relating to very technical procedures within the province of Alberta could not have been obtained from the Minister of Transport-


An hon. Member:: You mean, Minister of Justice.


Jean-Jacques Blais: -and while he is replying to that question, would he also indicate whether he has ensured that his responsibility

October 23, 1979
Oral Questions
under the statute to protect the independence of the director of investigations has been discharged? Also, could he assure this House, now, that at all times the director of investigations was completely independent in the pursuit of his responsibilities under the statute?


Allan Frederick Lawrence: Mr. Speaker, first of all, the director of investigations certainly knew about that meeting ahead of time. He was at the meeting, obviously. He knew about it, and at no time was there any hint to me-or, as far as 1 know, to anybody else by the director of investigations-that that meeting should not have taken place. The director of investigations was there. He took part in that meeting fully, as I expected he would.
The hon. ex-minister has just misinterpreted, again, something I have just said. 1 did not say that the meeting was called for my information. The meeting was called for the information of the Attorney General of Canada, who has a perfect right, in his discretion, before he authorizes any type of a prosecution like that to get the fullest information that is possible.
As it turned out, the information that was desired was not presented to the Attorney General because it was not within the knowledge of any federal government official. Therefore, we shall have to carry this consultation process even further and consult with provincial governments before the prosecution is permitted.


AIR TRANSPORT
Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, my question is directed to the Minister of Transport: it relates to the very dangerous and chaotic situation that exists in many of the nation's airports due to the withdrawal of service by the flight service radio operators.
Those services were withdrawn because of a number of recent directives from the Ministry of Transport. In all probability, if those directives were withdrawn the workers would resume service. In light of that, is the minister prepared to give this House his assurance that he will remove those directives and allow the bargaining process with Treasury Board to continue without interference?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, as I am sure the hon. member knows, the Public Service Staff Relations Board ruled last Saturday that the designated duties as prescribed by Transport Canada were, indeed, upheld by the Public Service Staff Relations Board. I am informed that where the prescribed duties are being carried out by the designated employees as per schedule, there are no difficulties. I have been informed, as well, that there has
(Mr. Blais.]
been no recorded case where flight safety has been knowingly compromised.
Management did issue a directive indicating the responsibilities of the designated employees and indicating that there are prescribed duties which they are required to perform. It reminded them of the importance of discharging that responsibility: failing that, they could face possible disciplinary action.


Raymond John Skelly: Mr. Speaker, the situation is not quite as I hear it from the Minister of Transport. What is actually occurring, and I would take one of a great many examples I received today, was a case where-


Mr. Speaker:: Order, please. If the hon. member has a supplementary, he should put it.


Raymond John Skelly: In light of the fact that we have a number of incidents, can the minister tell us what he will do to ensure that flight safety is taking place at airports where the service has been withdrawn?


Donald Frank Mazankowski: Mr. Speaker, officials of Transport Canada are, indeed, monitoring the matter at all times. We are committed to ensuring that safety and security are preserved and not compromised. If the hon. member has any specific examples, 1 wish he would give them to me.


PUBLIC WORKS
Mr. Don Cameron (Kamloops-Shuswap):: Mr. Speaker, my question is for the Minister of Public Works. I would like to find out from him, regarding the lease on the building at 219 Laurier which still has several months to run until the end of this year-if, in fact, a new lease has been negotiated-


Some hon. Members:: Order.


Donald Niel (Don) Cameron: -at over a 100 per cent increase.


Some hon. Members:: Order.


Hon. Erik Nielsen (Minister of Public Works):: Mr. Speaker, I have that matter currently under inquiry.


CANADIAN EGG MARKETING AGENCY
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Minister of Agriculture. It has been alleged that the Canadian Egg Marketing Agency collected at least $3 million last year in unnecessary surplus. What is the minister doing to ensure that this $3 million of excess, unjustified collections from the public are returned to the consumers and the farmers?
October 23, 1979


Hon. John Wise (Minister of Agriculture):: Mr. Speaker, I appreciate the hon. member's question. It does not come as any surprise to me, knowing the hon. member's feelings regarding marketing systems in this country. I remind him that to protect the public interest as it relates to all national marketing systems, particularly the Canadian Egg Marketing Agency, we have in place a supervisory body, the National Farm Products Marketing Council. I am certain that because of the very capable chairman we have in that position, the public interest is being safeguarded.


Herbert Eser (Herb) Gray: Mr. Speaker, my feelings toward marketing systems in this country are very positive, provided they operate in a way that is balanced in the interests of both consumers and producers. The minister has to demonstrate that is the case.
Inasmuch as CEMA has announced it is raising the price of eggs in order to pass on to consumers the additional interest costs to egg producers because of higher interest rates supported by his government, can he report to us, now, how much there will be in increases in the over-all cost of food generally that will result from these high interest rates paid by primary producers? What will he and his government be doing to alleviate this additional burden on consumers, especially low income consumers?


John Wise: In response to the hon. member's supplementary question, I want to remind him that the annual report of the Canadian Egg Marketing Agency has been tabled. It was tabled in the House on October 9, I believe. We want to make certain that we are not only tabling these reports but are making them available to the Standing Committee on Agriculture.
If the hon. member feels that concerned about the situation, I invite him to make an appearance before the Standing Committee on Agriculture when the annual report of CEMA is before the committee.


REPORTED SHORTAGE OF EGGS-EFFECT ON FOOD PRICES
Miss Aideen Nicholson (Trinity):: Mr. Speaker, my question is for the Minister of Agriculture. In view of reports that the Canadian Egg Marketing Agency is controlling the domestic supply so tightly that there are now shortages in the supply of eggs for processing in baked goods, does the minister have a plan to ensure that this shortage will not drive up the price of food items for the holiday season?


John Wise: Mr. Speaker, hon. members opposite might take some comfort in the fact that as late as this morning I met with a representation from the board, the chairman of the National Farm Products Marketing Council and the general manager of the board. We discussed these matters. It would appear that we do not have a shortage. I think it could be accurate to describe the situation as being a rather tight one in that the demand for eggs has increased greater than that forecast. However, after my dis-
Oral Questions
cussions of this morning I feel quite satisfied that we can overcome this situation without any serious problems.


NATIONAL DEFENCE
Hon. Judd Buchanan (London West):: Mr. Speaker, my question is for the Minister of National Defence. It has become clear during the last several months that there is no effective competition between the two contending fighters for our new fighter aircraft and that the potential industrial benefits package does virtually nothing for Canada's high technology industry. .
In view of this, will the minister indicate whether it is his intention to proceed with acquisition of the F-16 or F-18A, or is he prepared to add the F-18L to the short list?


Hon. Allan B. McKinnon (Minister of National Defence and Minister of Veterans Affairs):: Mr. Speaker, it is not our intention to add the F-18L to the short list at this time. As far as the industrial benefits are concerned, we are rather pleased with the package that has been offered by those two companies. There is very active competition right down to the final offers that were made and are at present being reviewed in my department.


J. Judd Buchanan: In an article that appeared in this morning's Washington Post, Representative Jack Edwards of Alabama, the senior Republican on the house appropriations defence subcommittee, stated that by the end of this year there will be a great deal of F-15s or F-16s delivered with holes where the engines should be, that because of persistent problems only half of these aircraft are flying at the time, and that if he were a member of a NATO nation considering the acquisition of this aircraft, he would be very nervous. In view of that, does the minister consider this a sensible aircraft to acquire for the Canadian forces?


Allan Bruce McKinnon: Mr. Speaker, I thank the hon. member for his first question as defence critic of the official opposition. 1 point out to him that these two aircraft were put on the short list by his government. I believe he is aware of that.
I want to tell him that I have not read the article in question. I will be pleased to read it. I will ask for advice on such allegations. I know there is a lot of speculation as to which aircraft will be selected. I would not want to say anything in this House that would show any favouritism toward either one.

October 23, 1979
Oral Questions
[ Translation]


UNEMPLOYMENT INSURANCE
Mr. Charles Lapointe (Charlevoix):: Mr. Speaker, my question is for the Minister of Employment and Immigration.
In view of the fact that the majority of Charlevoix workers must resign themselves to seasonal work, which seldom lasts longer than ten weeks, thereby depriving them of unemployment insurance benefits, could the minister urge the task force, set up in his department to review economic boundaries, to report as soon as possible and demand that new boundaries be proposed for the Charlevoix region so these people will be eligible for unemployment insurance benefits?


Hon. Ron Atkey (Minister of Employment and Immigration):: Mr. Speaker, 1 believe the task force in question is due to report to me some time at the end of November. I would be pleased to make the report of that task force available as soon as it is given to me.


REQUEST FOR REPORT OF TASK FORCE
Charles Lapointe: Mr. Speaker, on a supplementary, I should like to remind the minister that under the previous government that task force was to report and make its recommendations at the end of May. Could the minister speed up the process because, the tourist season being over, hundreds of persons are denied unemployment insurance in the riding of Charlevoix?


Ronald George Atkey: Mr. Speaker, 1 am hardly about to provide an excuse for the delay of the previous government. I would be very pleased to provide the report of this task force as soon as it is available.
1 can assure the hon. member that individuals in my department are working very hard on this very difficult question.
I take this opportunity to offer the hon. member a chance to provide input into that particular process, because this is an extremely complex question of importance not only to his riding but also to many other ridings throughout eastern Canada.


THE CANADIAN ECONOMY
Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, my question is for the right hon. Prime Minister. In view of the

distressing figures mentioned already by other hon. members which show the rich getting richer, the poor getting poorer and middle income earners falling behind, can the Prime Minister indicate to this House whether he intends to keep his promise of June 4 that his government will provide a $2.2 billion tax cut for middle and low income Canadians to provide stimulus for the economy and to help these important groups cope with inflation's effect on their standard of living?


Charles Joseph Clark: Mr. Speaker, we hope to keep that promise, but we are not sure when.


Some hon. Members:: Oh, oh!


An hon. Member:: You sound like a Liberal, Joe.


COMMUNICATIONS
Hon. Jeanne Sauve (Laval-des-Rapides):: Mr. Speaker, I should like to put a question to the Minister of Communications. It deals with the meeting of the communications ministers held in Toronto recently. Little news has filtered through about it, only enough to conclude that it was not an outstanding success.
1 should like to know how it is that, as a member of a government that claims to be so well disposed towards the provinces, he managed to stifle the enthusiasm that existed in negotiations and co-operation to such an extent that a member of the group accompanying the Ontario communications minister is reported to have said: "We were better off with Jeanne Sauve. At least we had a deal with her".


David Samuel Horne MacDonald: Mr. Speaker, 1 want to report to the former minister of communications that I think we had a very useful two-day session last week on a number of communications matters, which she would understand well. In many instances we made a considerable amount of progress.
I know the hon. member would welcome that, particularly in areas which have been most difficult in the past, having to do with the development of new technologies in satellite utilization, some further practical approaches with respect to cable regulation, industrial research in telecommunications and some of the competition industry questions which concerned her in office and very much concern this government as well.
October 23, 1979


Jeanne Sauvé: Mr. Speaker, I think that, with regard to the industrial aspects of the department, there is little controversy between the federal and the provincial governments. But the minister did not attend the press conference right after the meeting of the ministers. He delegated the deputy minister. Of course, 1 have nothing against the latter; he manages very well in everything he does but, in my time, the minister himself gave press conferences. For the benefit of the House, 1 should like the minister to tell us, a bit more specifically, what he offered the provinces, for instance with regard to the delegation of authority in the case of cablevision, pay television, the interconnection between systems and especially legislation which I would rather have seen discussed in the House instead of with communications ministers in another city.


David Samuel Horne MacDonald: Mr. Speaker, as you know, under the rules I would not be allowed to give a detailed answer to the hon. member's question. I do want to indicate to her that 1 think we have achieved a number of practical solutions in the areas to which she has referred. Specifically, just to mention two, in terms of developments with respect to pay television and satellite utilization we have a proposal before the provinces now which we would like to implement, and they are very seriously examining it.
In terms of cable jurisdiction, we have decided to take a practical route by working together through the means of a task force for an acceptable interim solution before some constitutional or other agreement is arrived at.


LABOUR RELATIONS
Mr. Jacques Olivier (Longueuil):: Mr. Speaker, I should like to put a question to the Minister of Labour.
Today the minister released the Adams report on paid education leave and productivity. Could he say, first, whether he intends to implement the main recommendations and, second, which he intends to implement first?


Hon. Lincoln M. Alexander (Minister of Labour):: Mr. Speaker, 1 want to thank the hon. member for that very important question. As he knows, the report was just a release and it is our intention to hear from the interested parties, whether they be labour, management, provincial ministers or academics. There has been no position taken. We are looking for input, and after that it will be up to the government to decide in which direction it should go.
Oral Questions


INQUIRY WHETHER RECOMMENDATIONS ADVERSELY AFFECT EDUCATION PROGRAM FOR WORKERS
Joseph Mario Jacques Olivier: Mr. Speaker, could the minister tell the House whether he intends to integrate the recommendations of the report and the input of the consultations by the Adams commission in Bill C-8 that was introduced last week by the government? Further, could he tell the House if there is contradiction between these recommendations and the millions of dollars provided for the education of workers throughout the country?


Lincoln MacCauley Alexander: Mr. Speaker, if that is a representation and a matter of concern, 1 will certainly give it immediate consideration and get back to the hon. member, particularly when he indicates that there is a contradiction. The extent of this contradiction is now known by me, but it is a point which I will have to consider.


EXTERNAL AFFAIRS
Mr. Walter McLean (Waterloo):: Mr. Speaker, my question is to the Secretary of State for External Affairs. In view of the news report of a major human tragedy taking place in Cambodia, 1 wonder if the minister can report on the accuracy of the report. Second, would the minister indicate to the House what initiative Canada is seeking to take diplomatically and in the provision of food aid?


Flora Isabel MacDonald: Mr. Speaker, as hon. members will know, the Canadian government announced over the weekend a contribution of some $5 million to the International Relief Fund to be distributed to those who are suffering from malnutrition- indeed, from starvation-in Kampuchea. The amount which will be distributed will be distributed through the aegis of the International Red Cross and UNICEF, the two groups which have been able to make a preliminary study of this major tragedy which is taking place in Kampuchea.
1 should report to the House that the initial report by the Red Cross indicates that the disaster and the malnutrition which have affected that country have almost entirely wiped out the total population under the age of five, and that the age group between five and ten is now seriously threatened. We are, therefore, working with the United Nations, the International Red Cross and UNICEF to try to ensure that this contribution, which is in the form of medical supplies and food aid, will be received by those people who most need it.

October 23, 1979
Oral Questions


RESEARCH AND DEVELOPMENT
David Orlikow: Mr. Speaker, I would like to direct a question to the Minister of State for Science and Technology. Before the election, his party advocated the expenditure of 2.5 per cent of the gross national product on scientific research and development. This would have required an increase in the number of scientists by 1983 of 40,000.
In view of the restraint programs initiated by his government and most of the provincial governments, which have led to cutbacks in university research programs rather than increases, I would like to ask the minister what steps he intends to propose to reverse this very dangerous trend.


Hon. Heward Grafftey (Minister of State for Science and Technology):: Mr. Speaker, I would like to congratulate the hon. member on his nomination as official critic for his party. [Translation]
May 1 take this opportunity to extend to him my best wishes.

The 2.5 per cent ratio between research and development expenditures and the gross national product remains a goal and a challenge to this government. Before the government at this point are propositions for tax incentives to industry, as well as the five-year council grants for universities. I am sure that when we arrive at a decision in this regard, very shortly, the hon. member will recognize that we are keeping the 2.5 per cent ratio figure as a goal for this government and he will be completely satisfied.


David Orlikow: Under the much more modest proposal of the former government for reaching 1.5 per cent of the gross national product for R and D by 1983, we ought to have required from industry an increase in their annual expenditures of about 27 per cent. Given that the increase in industry this year is less than a third of that projected by the former government, which was in itself inadequate, what steps does the government propose to take to persuade industry, so much of which is foreign controlled and dominated, to play the role in this country which it plays in virtually all the other industrialized countries in the world?


William Heward Grafftey: 1 can assure the hon. member that I have already met with officials of NRC and of the industry branch of my department. I have consulted and am consulting the President of the Treasury Board and the Minister of State for Economic Development and 1 have put all plans of our ministry before the cabinet committee.
1 am sure that a decision in this regard and in all these areas will be reached in the very near future, and I repeat what 1 said in answer to the original question, that the hon. member

will be satisfied that the 2.5 per cent goal is a very serious goal for this government in terms of its economic plans.


PENITENTIARIES
Mr. Mark MacGuigan (Windsor-Walkerville):: Mr. Speaker, my question is for the Solicitor General, to whom 1 have given notice. It concerns the use of gas against an inmate named Renaud in his cell in the Laval institution on September 3.
Since the use of gas against a single inmate in a confined area is, to put it in the most neutral way, not normal, what investigations have the Solicitor General or his officials caused to be made into this incident?


Allan Frederick Lawrence: There is no question in my mind that the use of gas under the circumstances referred to by the hon. member was quite contrary to departmental policy, and also quite contrary to one of the recommendations contained in the all-party committee recommendations which came before the House.
The incident occurred on September 3 of this year, I believe. On September 7, an internal investigation was carried out into the matter. As a result of that investigation, the conclusion was pretty direct: the inquiry had the opportunity of either firing the officer concerned or of severely reprimanding him. They took the latter course. I am convinced that that particular officer will not do the same thing again.


POINT OF ORDER
Mr. Speaker:: Order, please. Yesterday, the hon. member for Beauce (Mr. Roy) raised a point of order alleging that the House passed a motion which was out of order. He requested that that motion be declared null and void. The hon. member for Beauce quoted a few precedents to demonstrate that it was possible to declare some proceedings of the House null and void; it should be noted, however, that in such a case the presence of some irregularity should be clearly demonstrated. In this instance such a demonstration would require the determination by the Chair of a point of order concerning a motion which is not before the House at this time. The hon. member will understand that the Chair cannot make a ruling on such a matter.
Even if the Chair could take such a point of order into consideration, it could not make a decision in favour of the hon. member for Beauce. As a matter of fact, all we need to do

October 23, 1979

is read some of the precedents in the House which are exactly similar to the situation to which the hon. member for Beauce is objecting. Among those numerous precedents, I refer more particularly to the precedent of September 12, 1968, describing an identical situation. Furthermore, it is important to note that the House did not object when the right hon. Prime Minister's motion was moved on October 9, 1979.


Mr. Lambert (Bellechasse):: Mr. Speaker, there is so much noise that 1 can barely hear you. What you are saying is extremely important.


Mr. Speaker:: Order, please. Order.
Of course, the hon. member for Beauce stressed then some difficulties with the language of Standing Order 65(1), but he did not raise the matter through a point of order on a procedural irregularity. Rather, he chose to move an amendment to the motion. Moreover, the hon. member for Beauce (Mr. Roy) seemed to accept the procedure followed when he said, and I quote:
This is quite in order as it concerns a motion now before the House. The Standing Orders provide-
It is the hon. member for Beauce who was saying so.
-that a motion can be moved.
The Chair then accepted the motion as follows, and 1 quote:
There is no reason not to accept the motion under our procedures. So 1 must rule the motion in order under our procedure.
The motion was therefore debated and the hon. member for Beauce himself moved a motion which was later voted upon by the House. The Chair could not therefore find then any procedural defect with this motion when it was moved in the House, and neither can it now. Needless to say, such a defect would be necessary to allow the hon. member for Beauce to move a motion to declare null and void the motion which the right hon. Prime Minister (Mr. Clark) moved on October 9, 1979.



ROUTINE PROCEEDINGS


John Carnell Crosbie: Mr. Speaker, pursuant to Standing Order 60(1) I wish to table six notices of ways and means motions regarding the Customs Tariff Act, the New Zealand Trade Agreement Act of 1932, the Australian Trade Agreement of 1960, the Union of South Africa
Supply
Trade Agreement of 1932, to amend the Income Tax Act and finally to amend the income tax application rules, 1971.
Pursuant to Standing Order 60(2), I request that an order of the day be designated for Thursday, October 25, for the consideration of the ways and means motions just tabled.


PRESENCE IN GALLERY OF SPEAKER OF NEWFOUNDLAND LEGISLATURE
Mr. Speaker:: Perhaps it is an appropriate moment, just after the presentation of the Minister of Finance (Mr. Crosbie), to ask hon. members to join me in welcoming in our gallery a distinguished visitor in the person of my colleague, the honourable Mr. Speaker Len Simms of the Newfoundland legislature.


Some hon. Members:: Hear, hear!


BANKS AND BANKING LAW REVISION ACT, 1979 MEASURE RESPECTING BANKING INSTITUTIONS
John Carnell Crosbie: for leave to introduce Bill C-14, to amend the Quebec Savings Banks Act and the Bank of Canada Act, to establish the Canadian Payments Association and to amend other acts in consequence thereof.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.

Walter David Baker: That each standing committee to which the supplementary estimates (A), 1979-80 are referred, shall report, or shall be deemed to have reported, the said estimates to the House not later that Monday, November 5, 1979; and
That, each standing committee to which the main estimates, 1979-80, are referred, shall report, or shall be deemed to have reported, the said estimates to the House not later than Friday, December 7, 1979.


Mr. Speaker:: The motion can be introduced and dealt with at this time only upon the consent of the House.


Allan Joseph MacEachen: Mr. Speaker, we have had consultations over a period of time with the House leader for the government, and we agreed to take this step. Of course, we reserve our full rights as to how we deal with the estimates and the
Supply
appropriation bills when they are returned to the House of Commons.


Mr. Knowles:: Mr. Speaker, we have taken the same position with respect to these two proposals contained in this one motion. Perhaps it might be indicated to the House that the reason one set of estimates has to come back so soon is that we are under a legal requirement to deal with the measure confirming expenditures by Governor General's warrant one month after the House has met, namely, by November 9. It is only because of that position that we agreed to the short time on the one set of estimates. The other provision seems reasonable.


Joseph Adrien Henri Lambert: Mr. Speaker, I would like to make it clear that there has been in fact consultations on an understanding for unanimous support to the motion that has just been put forward by the President of the Privy Council (Mr. Baker). We shall not renege on our word. It has been given before the House opened, during a meeting of House leaders. But in view of the statement made a moment ago in this House by the Chair, and since the Chair does not interpret the rules the same way as we do on the procedure followed until October, 1 feel there is a most contentious situation in this House. I would not for any consideration-never in my life did I do such a thing and 1 do not intend to start now, I do not expect to do so unless obliged to-renege on my word. But so long as . . . Mr. Speaker, let me explain-


Mr. Speaker:: There is one matter only before the House at this point, the motion put forward by the hon. the President of the Privy Council (Mr. Baker), namely a request for unanimous consent. Is there unanimous consent?


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: Order, please. 1 have allowed as always a very brief statement from every House leader on the matter of consent. But this is no occasion for debate. It is simply a request for unanimous consent. If the hon. member for Belle-chasse (Mr. Lambert) is looking for an opportunity to discuss the motion, he can do so later. But right now it is simply a matter of exploring whether there is unanimous consent that the motion by the President of the Privy Council (Mr. Baker) be put forward. If there is, the motion may be put forward. If not, this is impossible. 1 then ask once more if there is unanimous consent for putting the motion by the President of the Privy Council before the House.


Joseph Adrien Henri Lambert: Despite tyranny and oppression, I agree.


Mr. Speaker:: Is there unanimous consent?


Some hon. Members:: Yes.

October 23, 1979


Mr. Speaker:: There being unanimous consent, the motion stands in the name of the President of the Privy Council (Mr. Baker). Is it the pleasure of the House to adopt the said motion?


Harold Thomas Herbert: Mr. Speaker, I agree to the unanimous approval to put the motion. On the motion itself I want to state that I will be opposed to the passing of it unless we have the agreement of the government or the Minister of Finance (Mr. Crosbie) to withdraw his refusal to appear before the Standing Committee on Finance, Trade and Economic Affairs at this critical time when we want to question him. We have been unable to make arrangements with him to appear before the committee at his time and disposition.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, the hon. gentleman is talking through his hat. I have not refused to appear before the finance committee. 1 am quite willing to appear before the House of Commons finance committee.


Some hon. Members:: When?


John Carnell Crosbie: 1 will appear when I am in town and after the governor of the Bank of Canada has been heard by the committee.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: Arrogance.


John Carnell Crosbie: There is no one opposite whose questions I hesitate to answer. When I come before the committee I hope the hon. gentleman is there to ask a few questions.


Mr. Speaker:: Order, please. The House has heard the terms of the motion and the two very short speeches. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Carried on division.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Kilgour (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following question will be answered today: 214.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.

October 23, 1979


CONSUMER AND CORPORATE AFFAIRS-NUMBER OF EMPLOYEES
Mir. Herbert: How many (a) permanent (b) term employees were on the Department of Consumer and Corporate Affairs' payroll on March 31, 1979?


Allan Frederick Lawrence: (a) 2269, (b) 136.


Mr. Speaker:: Question 214 has been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


John Carnell Crosbie: that Bill C-10, to provide supplementary borrowing authority for the fiscal year 1979-80, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, I would like to thank my colleagues on this side of the House for their thunderous applause.


Joseph Jacques Jean Chrétien: You feel alone.


John Carnell Crosbie: It is a particular pleasure to introduce this legislation today because it was three years and five days ago that 1 was elected to this House, on the birthday of the former prime minister, October 18. I was never asked to introduce a bill by the former government, so this is my first opportunity to do so. This bill has to do with borrowing. I am afraid I am not following in the Shakespearean tradition because as 1 remember Shakespeare said, "Never a lender nor a borrower be." When one follows the previous government, certainly you have to be one or the other. In this case it is as a borrower that one follows the last government.
I want to approach this matter in a statesmanlike and dignified fashion.


Allan Joseph MacEachen: That is impossible.


Joseph Jacques Jean Chrétien: It is going to be difficult for you, John.


John Carnell Crosbie: Mr. Speaker, I know that hon. gentlemen opposite want to get on with the serious business of this country and with cleaning up stuff left over from the former
Borrowing Authority
government's days in power, and that we are going to whistle it through this House in a respectable period of short discussion.


An hon. Member:: You are whistling in the wind.


John Carnell Crosbie: This bill seeks borrowing authority of $7 billion for the remainder of the 1979-80 fiscal year.


An hon. Member:: That is terrible. You have lost control.


John Carnell Crosbie: I know that the former minister of finance is not used to these little figures. When the former minister of finance was over here he wanted $10 billion. He was not satisfied with $7 billion, as I am satisfied with $7 billion. He wanted $10 billion.


Joseph Jacques Jean Chrétien: For two years; this is for only four months.


John Carnell Crosbie: This is for the remainder of the 1979-80 fiscal year, and the bill provides that this new borrowing power will come into force, if the House passes this bill, on November 1, 1979.
It also does one other thing, Mr. Speaker. The bill would seek explicit authorization for the government to borrow in foreign currencies as well as in Canadian dollars.


An hon. Member:: Oh, no!


John Carnell Crosbie: The only currency the hon. gentlemen opposite did not try when they were in power was the Zambian kwacha.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: They tried everything else. They borrowed in deutschemarks, they borrowed in lira and they borrowed in yen, but they never got to the kwacha. Luckily they were defeated before they got to the kwacha. This bill will enable us to borrow in kwacha, if we have to.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: It does two things. Mr. Speaker, you will recall because of your very sharp mind that the borrowing authority the House was last asked to pass was contained in a bill relating to income tax for 1979-80 introduced by the hon. gentleman for Shawinigan.


Joseph Jacques Jean Chrétien: Saint-Maurice.


John Carnell Crosbie: I am delighted to see him back in the House.


Joseph Jacques Jean Chrétien: I am always here.


John Carnell Crosbie: He can learn how things should be done. That bill died on the order paper when Parliament was dissolved on March 26. That bill contained a request for $10 billion in borrowing authority which reflected the $10,750 million in cash requirements estimated at that time that was going to be needed by the hon. gentlemen opposite to run the country for a further year. This $7 billion is $3 billion less. I am not a

October 23, 1979
Borrowing Authority
mathematician, but I am pretty sure it is accurate to say that it is $3 billion less.
Why are we seeking $3 billion less than the last government that sat in this House, Mr. Speaker? It is not only because we have got the world's greatest President of the Treasury Board (Mr. Stevens), although that is one of the reasons.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: I tell you now, Mr. Speaker, those who have cost overruns are shaking and shivering in their boots when they know they are facing this President of the Treasury Board.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: I doubt that we will need any money in future years.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: He is going to set new targets for whomever succeeds him. Why do we only need $7 billion? It is because we have been using unused borrowing authority carried over from prior years. This is a little secret that the government had hidden behind its back, that it had unused borrowing authority from prior years. Those powers obtained earlier were not subject to the automatic cancellation rule at the end of the fiscal year. However, Mr. Speaker, these unused borrowing authorities, secreted away for many years by hon. gentlemen opposite, were discovered by us, but they have been rapidly used up. If they were not rapidly being used up we would not be before you today with this bill, I suppose.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: We require new borrowing authority to enable us to complete financial programs for this fiscal year and to provide a margin for contingencies.
Never in the history of Canada has a government announced so much in such a short time, particularly in the financial area. On July 26 I announced that the financial requirements for this year were then forecast and would likely be $10 billion, not the $10,750 million that the hon. gentleman opposite for Saint-Maurice (Mr. Chretien) had predicted. So far this year, and we hope this will still be true, we have raised $4.3 billion in new funds through the issuance of marketable debt. Now, do not ask me what that is.


Some hon. Members:: Oh, oh!


An hon. Member:: What an admission!


Joseph Jacques Jean Chrétien: Is that the way you were running things in Newfoundland?


John Carnell Crosbie: It is made up of $1.1 billion in treasury bills and $3.2 billion in marketable bonds issued in the domestic market. The borrowing authority now being requested-


Joseph Jacques Jean Chrétien: What an admission.


John Carnell Crosbie: Mr. Speaker, the difference between me and my predecessor is that I admit when I do not know something and he never did.


Joseph Jacques Jean Chrétien: I knew what I was talking about.


John Carnell Crosbie: I have had to make very few such admissions in my long life.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: The borrowing authority that we are now requesting, together with the remaining portion of the unused borrowing powers obtained in prior years and still available, should be sufficient for us to complete the financing program left to us by the hon. gentlemen opposite for the remainder of this current fiscal year with a margin for contingencies, such as the use of the standby lines of credit that the hon. gentleman arranged. The debt program for the rest of this year includes the 1979-80 Canada Savings Bonds campaign which is now under way.
All outstanding and unused borrowing authority provided by this new act for this year and in respect of which the cabinet- the governor in council-has taken no action to borrow pursuant to section 37 of the Financial Administration Act will be cancelled on March 31, 1980. We are not trying to get $7 billion in borrowing authority to leave it hanging around forever. It will expire on March 31, 1980, so we will have to come back to this House and ask for authority again, Mr. Speaker.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: We are not afraid to come back to this House, because we know that hon. gentlemen opposite, having been 16 years in government, well know that the business of the country must be carried on and will not attempt to delay unduly any matter that we bring before the House.


An hon. Member:: No more than the Tories did.


John Carnell Crosbie: I spoke last year on a borrowing authority bill that came before the House, but it was not this kind of a borrowing authority bill. I felt a sense of outrage when that bill was before the House because the then Minister of Finance-recalcitrant apparently; they were laughing about this tramping on the rights of Parliament, and I just saw him laughing and snickering-asked the House for borrowing authority for a year ahead when there were no estimates before the House. There was not one estimate before the House and there was no way of our assessing whether his financial requirements projections were accurate. Now I see that he is morose and his pangs of conscience are attacking him now.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: I was critical of that last year. When we are the government we do what we said in opposition. We are not inconsistent, and that is why I am bringing in a piece of
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legislation that ties my hands so I have to come back here again. I wish 1 had not spoken last year, but there you are.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: We have to be consistent. As somebody in the other House has said, we have to be consistent, Mr. Speaker. We are asking only for specific authority for this year and on March 31 it will automatically be cancelled. Next year when we need borrowing authority for our next financial year we will have to return to hon. gentlemen. This carries out our campaign pledge to return more control over the financial operations of the government to the House of Commons.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Subsection (3) says that the new borrowing powers will come into force on November 1, 1979. The purpose of that is to ensure that we have sufficient borrowing authority on the effective date of the new Canada Savings Bonds campaign. We think we do have sufficient, but this is to make sure.
Hon. gentlemen and ladies should note that it is only the net amount of any increase in outstanding debt that is charged against the borrowing authority, and we anticipate that at the end of this month the amount of unused borrowing authority the government has available should cover net sales of Canada Savings Bonds. As hon. gentlemen know, these sales are quite volatile and you can easily make an error in predicting net sales. That is why we are asking the House to give us this borrowing authority as of November 1 so there will not be any question about whether we have the authority for that Canada Savings Bonds campaign. [DOT]
The members of the House might be interested in some figures just to show some of the authorizations that have been given to Parliament heretofore. In 1970-71, $3 billion in borrowing authority was authorized. The same amount was authorized in the fiscal years 1971-72, 1972-73 and in 1973-74, $3 billion each year. In 1974-75 there was $5.5 billion in borrowings authorized. In the fiscal year 1975-76, $6 billion was authorized, and the same for 1976-77. But now the hon. gentlemen opposite were getting warmed up to their work. In 1977-78 and 1978-79, $28 billion in borrowing was authorized by this House, an amazing amount.


Joseph Jacques Jean Chrétien: Three years.


John Carnell Crosbie: It was over two financial years. There were four acts passed which authorized those total amounts, some of which have now expired. This year, the net debt that we have borrowed to date is $5,595 million. We are expecting that the gross public debt charges, the interest charges on our debt this year, will be $8,350 million; or 15.9 per cent of total government expenditures will go toward interest on our debt, a huge amount, an astounding amount of money, going to interest.
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This, of course, is something that my hon. friend the President of the Treasury Board cannot control. He cannot control the interest on public debt.


Herbert Eser (Herb) Gray: You can.


John Carnell Crosbie: 1 cannot control the interest on the public debt because I am left with a huge budgetary deficit for this year, and it will take three or four years to bring that down to a satisfactory level. Because of the debt racked up in the last few years, including the debt that we are left with this year, the difference between revenue and expenditures next year will likely have an interest cost of $10.5 billion. It is truly an astounding amount, and the difference between this year and the next year is something which the government can do nothing about. It depends on what happens with interest rates; and it depends on our past debt, because the past debt is what we must pay for next year in interest charges.
If those are the kinds of interest expenses we will have next year, somewhere over 18 per cent of our total government outlay in this country will be interest on the debt. That is why the President of the Treasury Board, the Prime Minister (Mr. Clark), myself and all of us on this side of the House are so aware of the fact that reducing our budgetary deficit and reducing our financial requirements is essential if we are to get inflation and our economic system under control in this country. That is why we are convinced that the only stimulative deficit now is a deficit that is reduced from what it has been in past years.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Flip-flop.


John Carnell Crosbie: We have many financial bills coming before the House, and if the House passes, as I hope it will, the debris left over from the last budget, the November 1978 tragedy, and if the House passes this left-over business, then we can get on to the new government's budget and with the business of Canada.
Therefore, 1 appeal to the hon. gentlemen opposite to help pass through the House their debris so that we can get on with our bright new future for Canada, so that we can get on with our own budget and can get on with dealing with this country, as the people of Canada showed on May 22 they wanted us to do.


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: Mr. Speaker, the Minister of Finance (Mr. Crosbie) said a few moments ago that he wished he had not spoken last year. I say that the people of Canada, after hearing him this afternoon, will say that they wished he had not spoken today because instead of serious ideas and serious analysis of the needs of the country, he has given us nothing but empty jokes. The minister said that he wants to get on with the business of Canada, but he and his government wasted the first five months after the election

October 23, 1979
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when they could have been getting on with the business of Canada.
The Minister of Finance may want to take credit for himself and the new government, through Bill C-10, for asking for the power to borrow $7 billion for the fiscal year ending April 1, 1980; whereas in Bill C-7 as it was originally presented by the previous government last fall, authority was sought to borrow $10 billion to cover cash requirements for the same period. This portion of Bill C-7, as the House will remember, was dropped at the insistence of the Conservatives. They said that there should be no authority granted by Parliament to borrow for the 1979-80 fiscal year before a budget for that period has been presented.
The bill as passed, therefore, authorized additional borrowing only for the 1978-79 fiscal year. But are the Conservatives in this Bill C-10 showing greater restraint in the borrowing they asked to have authorized by Parliament for the 1979-80 fiscal year than did the previous bill of the Liberal administration? I submit they are in fact not showing more restraint at all.
1 will tell the House why 1 make this submission at this time. Let us start by noting that more than six months of the current fiscal year have already gone by and yet this new Parliament first sat only two weeks ago. There has been no Parliament since the election was called last March. How did the government get the money it needed for its operations, the money required to fill the gap between its revenues and its expenditures during this period, almost all of which, except for a few days, was part of the current fiscal year beginning April 1, 1980? After all, Parliament, before it was dissolved, had not approved any supplementary borrowing authority for the 1979-80 fiscal year.
Did the government make use of authorities to borrow previously authorized by Parliament and which it could still use? The minister suggests that they did. Did the government use cash balances on hand and borrowings carried out in the previous fiscal year? 1 am told that at the beginning of this fiscal year, April 1, 1979, the government had cash balances on hand of $6.4 billion. As of August 1, 1979-the latest date for which figures are available-these cash balances had declined to $2.7 billion. This means that $3.7 billion of these cash balances were used to finance government operations over the past six months. I am also told that during that period there was, in addition, total new net borrowing of $2.8 billion. This means a total of $6.5 billion from government cash balances and new borrowings were used to finance the cash requirements of the government since April 1, 1979.
This new Conservative government in Bill C-10 is asking for authority to borrow $7 billion to finance its operations for the balance of the fiscal year. This means that a total of $13.5 billion will have been either spent or borrowed by the government or will be available to be borrowed by it to finance its operations and to meet its cash requirements during this current fiscal year. However, the Minister of Finance last July, in his major economic statement, said he was forecasting cash

requirements for this fiscal year of only $10 billion, and he confirmed this again today.
Therefore, I submit that in asking for $7 billion in this bill, the minister is asking for $3.5 billion more than he has so far demonstrated he and his government require. That is a lot of money, especially when one calculates the interest at 11 per cent to 13 per cent to be paid on this $3.5 billion-all of which will have to come from the pockets of individual Canadian taxpayers-because of the high interest rates consented to and supported by this Minister of Finance and this government.
Why has the government in Bill C-10 asked for borrowing authority which, when added to the $6.5 billion I have mentioned, would give it $3.5 billion more than it needs to fill the gap that the Minister of Finance forecast last July would exist between government revenues and expenditures? If I am correct in my analysis, Bill C-10 is not an example of new Conservative restraint, it is just the opposite. In effect, it is asking for $3.5 billion in excess of any requirements the Minister of Finance has forecast and, as a result, there is $3.5 billion in padding.
This is the request he made in the bill he presented to us. This is $3.5 billion for which the new Conservative government does not have to account to Parliament through seeking new express authority for that amount of borrowing. The Conservatives have professed to stand for and be committed to treating Parliament with more respect, to making government more accountable to Parliament. Yet the first bill concerning financial matters that they have presented to Parliament, if my analysis is correct, appears to have done just the opposite. They have not been open. They have not made themselves more accountable.
The Minister of Finance just showed his contempt for Parliament and its committees by saying that if the Standing Committee on Finance, Trade and Economic Affairs wants him, he will come when he is in town and after the governor of the Bank of Canada appears. As far as he is concerned, the committee and this House have to dance to this tune. That is a fine way to show respect for Parliament. It is just the opposite to what they profess, Mr. Speaker.
One can ask, Mr. Speaker, exactly why they are seeking to follow a course of action which gives them more than $3 billion in padding-an authority to borrow for which, as yet, they have given no justification or accounting. 1 can see two possible reasons. One is that the government now has forecasts, which it has not given us, that economic growth for the balance of the fiscal year will be lower than what the Minister of Finance said it would be in his economic statement last July. If this is the case, it means that government revenues also will be lower for this period than he has forecast. This means the government will have higher cash requirements and a higher deficit than it predicted. Therefore, it will have to do more borrowing than originally intended.
There is another possible explanation of why the government is asking for borrowing authority of $7 billion, even
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though it seems to be more than it needs on the basis of the minister's forecast of requirements. It may be giving itself a cushion of several billion dollars in borrowing authority so that in the coming months it may borrow abroad if it desires to maintain the dollar at current levels, if there is new pressure against it on the foreign exchange markets because of this government's mismanagement of the country's affairs, or even to force it upward above current levels. After all, the Minister of Finance said at one time in the last Parliament that he thought the dollar should be at 90 cents U.S. In short, to achieve either or both these purposes, the government could carry out some additional borrowing up to the amount of the $3.5 billion cushion. It could do this without going to Parliament for approval of another supplementary borrowing authority.
Rather than using what appears to be a device to enable it to borrow to finance the activities of government if revenues fall because of economic growth being lower than predicted for the balance of the fiscal year, the government should move more quickly than it intends to present a budget. It should be a budget that contains measures of a focused and specific nature to help our economy become more productive and efficient and to deal with our deficit in current account.
While the government may argue it does not have a lot of room for manoeuvre-it has just given us a new explanation of its stimulative deficit, just the opposite of what it said before and during the election-I believe it does have some room in a budget for measures of the kind I have suggested, measures which would at least blunt and contain the adverse effects on the economy of the slow-down, the recession which is likely to be, unfortunately, already under way.
But there is another serious flaw in the way the Conservatives are proceeding with this first financial measure they have called for debate in this new Parliament. They are seeking this $7 billion in borrowing authority in Bill C-10 without first presenting their own budget to Parliament. We do not have from the Conservatives a statement to this House, in the form of a budget, on what they expect the revenues and expenditures of this new government to be, and what will be the resulting deficit and cash requirements to be financed by borrowing for the balance of this fiscal year.
The minister might say that it is not necessary for the House to have his budget statement before it makes a decision on Bill C-10 because the previous Liberal government presented a budget for 1979-80 last November and the Conservatives-he is suggesting this-are bringing it back to the House and asking that it be adopted. However, I say that is not good enough; that is not the whole story. The Conservatives are not saying they are going to leave everything unchanged in the areas of fiscal policy, of government spending and programs and of economic policy generally, from what they were when they took office some five months ago.
The Minister of Finance has already said that he is going to present a new budget some time before the end of this calendar year. He has hinted it will be presented this coming November. The new government has made clear this first budget will
Borrowing Authority
reflect its own approach to government spending and priorities of government activity generally. The Conservatives have said that the new budget will be used to confirm and implement changes in direction from what was in place when they took office five months ago.
Mind you, Mr. Speaker, the Conservatives obviously did not find too much wrong with the economic policies put in place by the previous Liberal government, because they left them unchanged for almost half a year. They could have called Parliament and presented their own budget months ago. They did not do so. In this way, they gave an endorsement to these Liberal policies-an endorsement which those people who might have been impressed by Conservative criticisms of the policies before and during the election likely found surprising, to say the least. So much for the validity of those Conservative criticisms.
However, I am sure that the measures of the previous government's economic policy in the new Conservative budget expected next month will not, once announced, be kept in suspended animation; they will not be in a deep freeze till April 1, 1980, when the new fiscal year begins. They will, I am sure, come into effect on budget night or at the beginning of the next calendar year, January 1, 1980. In fact, some may even apply retroactively to the current 1979 calendar year.
One measure, which is really a budget measure, the Conservative mortgage and property tax credit scheme, had already been announced by the minister before Parliament met. When he made his announcement, he said he was doing so in order that it would apply to the current calendar year. We now understand it to be the subject of a separate bill to be introduced even before the budget itself. This mortgage and property tax credit scheme, as the minister has admitted, will add more than $500 million to the Conservative government's deficit. The Minister of Finance has admitted this but he has not been willing to take the people of Canada into his confidence and tell them how the revenue loss created by this new plan will be made up.
In spite of claiming to be a leader in a new crusade for open government, he would not tell and still will not tell the Canadian people what taxes would be raised or what useful government services would be cut to pay for that tax credit plan. So I think that I can adopt the words of the President of the Treasury Board (Mr. Stevens), another claimant to the right to wear the virtuous cloak of open government, when he was talking about Bill C-7 on October 19, 1978. He said:
The minister chose not to explain why the bill included an authority to borrow $10 billion in fiscal 1980. We know nothing about fiscal 1980. The House has been furnished with no figures. We do not know what the expenditure and revenue forecasts are, or what the budgetary deficit will be for that year.
That was the President of the Treasury Board speaking in a somewhat different incarnation. Referring to the then minister of finance, he went on:
Why should we be asked to hand him blindly an authority to borrow $10 billion during that year?
Surely these sentiments remain valid today if they were valid last fall.
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We also do not know how the forthcoming budget will affect government revenues and expenditures or what forecasts will be in it about the level of the economy. We do not know what the budget will say about the state of the economy, about the oil price agreement the government is seeking and the effect a rapid increase in oil prices will have on the new cash requirements that have to be met.
This is strange conduct by a new government professing a new standard of openness in dealings with the Canadian people and Parliament and professing a new standard of accountability to Parliament. They are asking for the authority to borrow $7 billion in a way which may be giving them a cushion of borrowing room in the amount of several billion dollars without first presenting their own budget to show why all the borrowing authority sought in this Bill C-10 is actually required.
The minister's forecast at this point continues to be that the cash requirement for 1978-79 is $10 billion, and if this cushion I mentioned exists, he should not be asking for the authority to borrow $7 billion but instead a figure in the area of $4 billion. If the new Conservative budget shows a higher deficit for 1979-80 because of Conservative neglect of the economy-a higher deficit than the Conservatives have been forecasting- or if the government wants to borrow to support the dollar, it should come back to Parliament after presenting the budget to get specific authorization for the borrowing required.
Let us not forget that the Minister of Finance in his economic statement of last July admitted that, contrary to what he and the Conservatives were saying before and during the election, the actual deficit for the last fiscal year turned out to be less than had been forecast even by the previous Liberal government.
The President of the Treasury Board admitted in the House yesterday that the higher interest rates the government was now paying on Canada Savings Bonds to meet the over-all increase in interest rates his government had allowed the Bank of Canada to bring into effect would cost the taxpayers $215 million over the term of the new Canada Savings Bonds issue. He admitted that the extra cost to the taxpayer of these higher interest rates would be $62 million in the first year of the term of the new Canada Savings Bonds. Yet last October 19, 1978, in tones of outrage and indignation, the present President of the Treasury Board said in this House:
The Canada Savings Bonds issue is now at over 9 per cent annually. Do you know that at a 9 per cent interest the cost of what we are now approving will double every eight years? That is the cumulative effect.
Where is that indignation today? Where is the President of the Treasury Board on this crucial issue?
While the President of the Treasury Board gave me the additional cost to the taxpayer of the higher interest rates on Canada Savings Bonds caused by the higher general level of interest rates approved by his government, he did not answer my second question of last Friday. In it I asked about the additional burden on the taxpayer of the extra cost to the

government of all of its borrowing in addition to the Canada Savings Bonds loan in order to finance its cash requirements as a result of the three increases in interest rates by the Bank of Canada that it allowed to go into effect since it took office five months ago.
Last October 24, the present Minister of Finance when he was still only the hon. member for St. John's West said in this House:
Does anyone care what all this does to interest rates? ... Last March 8 the central bank rate was 7.5 per cent. That was the bank rate just seven months ago. That is what the central Bank of Canada charged, and probably the banks charged one half, three quarters or 1 per cent more. ... Now we have had five increases, and in seven months it is up to 1014 per cent. How does this correspond with the Prime Minister's great program of industrial and economic expansion and growth which was brought back by him from Bonn via Morocco?
The Prime Minister cannot explain. He throws his hands up and says, "Look, we have to do whatever the United States Central Bank does. If they go to 814 per cent or SV2 per cent, we go to 10V4 per cent."
If the Americans increase their interest rates once again, which they may well do-and it is being forecast down there right now-the central bank rate in Canada will go up again, and the interest rate at banks will go up to 12, 13 or 14 per cent.
How right he was, Mr. Speaker, and how quiet he is about what he said then and how it still seems to suit present conditions. But he is singing a different tune today.
On that occasion, the hon. member went on to say:
Where will it end? Where will it stop? How can we have economic expansion in light of these interest rates? What will the small businessman do? .. . What will they do to meet these heavy, additional expenses?
Is it not correct that one of the factors which make us uncompetitive compared to the United States is the much higher interest rates in Canada? Who is considering all this? Who cares?
Obviously the hon. member, now that he is Minister of Finance, has not done anything to show that he cares. He has not explained why those words of last fall are not equally valid today, as they are. Today, the hon. member for York-Peel is the President of the Treasury Board and the hon. member for St. John's West is the Minister of Finance. In spite of what they said before the election, they and their Conservative government allowed the bank rate and interest rates generally since they took office to go up three times to record levels, to the range of 13 per cent. This has happened as a result of their decision, their action or inaction. No amount of talk by the present Minister of Finance about the policy of the governor of the Bank of Canada being the governor's personal policy changes the reality that in law and in fact the Minister of Finance and the President of the Treasury Board and all in this new Conservative government bear the responsibility for the damage these interest rate increases are doing and will do to the economy, particularly to small business, the farmer and the consumer. The minister and the government are accountable for what is happening and what will happen, and they will be held to account by the Canadian people.
I think there are many questions that remain to be answered about this bill but I think enough is already clear from what is in it and what is not in it, and from the manner in which it is being presented, that the new government is not living up to its promise of more openness, accountability and good management. It is operating, instead, on a basis of evasiveness,
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ineptness and downright sloppy management. All this is not unexpected in light of the fumbles we have already seen from this government in the first five months it has been in office.
Therefore, we will be examining this bill in detail when it goes to committee. We have an obligation as the official opposition while this Conservative government remains in office-and I suspect the people of Canada will decide it will not be too long-to try to ensure that this Conservative government does the least possible damage to the Canadian people and to the Canadian economy.


Miss Pauline Jewett (New Westminster-Coquitlam):: Mr. Speaker, in listening to the speaker who has just sat down, the hon. member for Windsor West (Mr. Gray), I realized once again how little difference there is between the Liberal party and the Progressive Conservative Party on economic policy. Nothing was said by the hon. member to suggest alternative routes that might be taken by the present government to get the economy out of the mess in which the Liberals left it, not a word. The hon. member quibbles about a lot of minor matters which I found tedious to listen to. There was not a single suggestion for the Conservative government-and it needs suggestions-as to how it can rectify the economic situation in this country.
The Minister of Finance (Mr. Crosbie), whom 1 have never had the pleasure of listening to before, is undoubtedly delightful, but he reminds me a bit of the captain of the Titanic-you know, laughing as the ship goes down! He says he is being consistent in his position, and yet it was the Conservatives in the election campaign who promised lower interest rates, who promised to stimulate the economy and who promised tax cuts for middle and low income groups. In other words, they promised those things the Liberals had failed to do. They promised to give a different direction to Canadian economic policy. Whether one entirely agreed with them, one had the feeling we would have a government in power, should the Conservatives win, that would put the economy more sturdily on its feet and take directions different from those pursued by the previous government.
What happened? It is not good enough for the Minister of Finance to say that he will get rid of all the mess and, as soon as he can, bring down a budget that will put us on our brave new path. There is nothing to prevent the Minister of Finance bringing down a budget earlier. There is nothing to make him wait until the end of November, as I think it now is. We would have been glad to see the government's financial and economic plans generally for the next year.
One of the reasons for the delay, and there are no doubt many, is that there is no chance for the government to implement the economic policies it outlined before and during the election campaign. It does not wish to implement them. It made a commitment that there would be lower interest rates. As we all know, interest rates have gone up and up. The Minister of Finance could have taken action on that and he knows it, but he failed to do so.
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I am sorry to have to say this, but 1 understood the steering committee of the Standing Committee on Finance, Trade and Economic Affairs had agreed that the Minister of Finance would be heard prior to the governor of the Bank of Canada.


Mr. Lambert (Edmonton West):: So what?


Pauline Jewett: The Minister of Finance stated today he would appear when he was able to be here, after the governor of the Bank of Canada, and only then when he is in town. That puts the governor in the position of having to meet the committee first.


John Carnell Crosbie: It was his preference.


Pauline Jewett: The government is hiding behind the governor of the Bank of Canada on its interest rate policies.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: Talk about the bill.


Pauline Jewett: 1 am sorry to have to raise this, but it is a very important point if we are going to get from this government clear directions on its economic policies, including interest rate policies. We were told they would lower interest rates, but they have not done that. Nor have they given any guidance to the bank on that question. They are hiding behind the governor of the Bank of Canada.
It is a similar situation with tax cuts. We have not seen tax cuts. In fact, as was mentioned in yesterday's report from Statistics Canada, average family income has dropped in real purchasing terms for the second year in a row. Average pre-tax family income was $21,346 in 1978, up only 6 per cent from 1977. As inflation was up 9 per cent last year, the real purchasing power of family income actually dropped by 3 per cent. That follows a drop of 2 per cent the previous year. Where are the tax breaks for the average and low income earner in Canada which were to have been a part of this party's new economic policy?
There is another avenue the Conservative party might well have taken but declined to do so and is therefore following in Liberal footsteps once again. This is in relation to what some people have called our hidden welfare system. Our tax system is supposed to be basically progressive. You tax those with more income more than you tax those with less. It would do a great deal if the present government would find more money through the tax system, and therefore have to borrow substantially less. That is bang on the subject of this bill.
Our tax system is a haven for those with really ingenious accountants. It rewards the greedy, punishes the hard worker, favours certain companies, notably oil and gas companies, mining companies and banks, and penalizes the average worker. If the Conservative party really wanted to show a new direction for the Canadian economy, particularly our fiscal system within that economy, it would take a serious look at some of these tax breaks.

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In the oil and gas industry, as hon. members know, the Liberals created the super-depletion for what it called frontier exploration. This is a write-off, not only for companies, but for individual taxpayers who invest in frontier exploration accounts. Dome Petroleum Ltd. has not paid any tax in ten years. Shell Oil did not pay any last year.
The money the government does not collect because of the exceptions and loopholes in our tax system we call tax spending. It means the public revenue is losing money that has to be made up by taxes somewhere else-that is, from you and me, Mr. Speaker. How much is it costing us? In the oil and gas industry last year it was about $3 billion. Some went to oil and gas companies, some to private investors who can write off their investment 140 per cent. The Tories pick on PetroCan which costs us $350 million a year and which we all own, and give billions to private corporations in which we have no stake at all.
The same is found in the mining industry. In Sudbury, Inco reaps the same kinds of benefits as Dome. As of 1978, Inco had accumulated a total of $318 million in deferred taxes. Add to that the benefits of tax legislation and they get another $10 million in tax credits.
What of the banks? We have all heard about the banks. Even they get tax credits. Last quarter the Royal Bank did pay tax, at 2.9 per cent. While Imperial got a tax credit in the second quarter, last quarter it actually paid 12.8 per cent. Banks used to pay 50 per cent. Five years ago the banks were paying tax at 50 per cent. The average rate for all banks last year in the last quarter was just over 10 per cent. Our tax system is leaking like a sieve.
One way in which the government could prevent future debt from accumulating would be to close some of these leaks in our tax system that so highly benefit the private sector, or are they so enamoured of every single aspect of the private sector that they are not prepared to take steps to ensure a more equitable distribution of the tax burden in our society?
Increasingly the Conservative government seems to be planning to depend on foreign investment to recoup itself. The Minister of Finance said that is his purpose, that one of the reasons for the increasingly high interest rates is to encourage more foreign investment in Canada. The services bill we are paying on that foreign investment is nowhere near compensated for by our merchandise trade surplus. Hon. members know that, and the situation is getting worse; 1973 was the last year that the surplus on merchandise trade came close to balancing our services account. The services deficit then was $3 billion. In 1974 it grew to $3.7 billion. In 1975 it was $4.7 billion. In 1976 it was $5.8 billion. In 1977 it was $7.4 billion. Last year it was $8.7 billion, and this year it is more than $10 billion. This is the amount of our deficit in what is generally called the services area, which includes, as hon. members know, dividends and business-service charges paid to foreign parent companies by Canadian subsidiaries and also the interest paid on foreign borrowings.

This year's merchandise trade surplus will fall short of balancing the service account deficit by at least $8 billion. This total current account deficit of $8 billion is the amount which must flow into Canada as short-term or long-term capital to keep the Canadian dollar from declining. It becomes a vicious circle. The more one borrows, the more one has to pay out. What is the government planning to do to encourage Canadian investment by Canadians? Does it have any plans, for example, or strategies?
If it is going to give tax breaks, will it ensure that the companies getting those tax breaks sign planning agreements with the government as to where new investments should go? For example, in the pulp and paper sector the Canadian government could require companies to buy Canadian machinery. MacMillan Bloedel in my own province of British Columbia signed such an agreement concerning its Dutch operations. It signed that kind of agreement with the government of The Netherlands. Does the Conservative party have any ideas at all for developing this kind of agreement in Canada to encourage investment here, or is it just going to go on taking in more and more from outside?
Has the government thought of a public investment fund? As it probably knows-I am sure the Minister of Finance knows-in Sweden companies which receive tax breaks have to put some of their profits into a public investment fund, and this money is used where the government feels investment is needed. Has the government given any thought to that kind of proposal?
Finally, has the government any strategy or plans for dealing with what, after all, is the real problem at the root of all these other problems, that is, the development of high technology Canadian industry? Does the government have any plans for helping this branch and perhaps certain other branches of Canadian industry to survive and advance? I mention the new high technology area because it is highly competitive. This is where Canada ought to have a natural advantage but it is a new and still fragile industry. It does need government support.
At the moment we are losing ground and losing it fast. This happened under the Liberals, but are the Tories just going to continue the pattern? Between 1970 and 1975 trade statistics in high technology industries showed Canada importing more than it was exporting in 18 out of 19 industries. A report on the telecommunications industry in Canada published late last year said that Canada's trade deficit in the electronics manufacturing sector was running at between $1.5 billion and $2 billion a year. This report went on to warn, and I quote:
We believe that the telecommunications and information industries in Canada will be dominated by foreign interests or crippled by imports if nothing is done.
If there was some indication of a commitment by the government to help in the development of this industry, increased borrowings to help finance this commitment might make some sense. However, there was no suggestion of such a commitment as recently as last week's federal-provincial conference on the communications industry. Similarly, we have

October 23, 1979
heard, both before the election and in the Throne Speech, that this government plans to expand research and development- we heard that again in answer to a question today-but have not seen any concrete action on this.
As hon. members know, right now Canada spends .9 per cent of its gross national income on research and development. The U.S. spends 2.3 per cent. West Germany spends 2.2 per cent. The results show, of course, in lack of productivity. Right now Canada's level of productivity in the manufacturing sector is about 20 per cent less efficient than that of the United States. Part of the reason lies in Canada's fewer economies of scale, but as everyone knows, nowadays technological advantage is the most critical factor affecting productivity, and that is where we are falling short.
1 remind hon. members that we pay twice over for this. First, Canadian companies are not able to compete effectively and therefore do not grow as fast as they ought and do not employ as many Canadians graduating from our universities with high technology skills. Secondly, we increase our manufacturing trade deficit by the increasing levels of our high technology imports.
I have already mentioned the telecommunications industry. Let me give one more example. The computer data processing industry is a glaring example. The federal Department of Communications estimates that Canada will buy $300 million worth of data processing services from the United States this year. This is equivalent to exporting 7,000 highly skilled jobs, and the losses would be several times higher if the data processing business which foreign parent companies sell to their Canadian subsidiaries were included in the totals. In the absence of an industrial strategy to help the Canadian data processing industry develop and to prevent its systematic takeover by foreign interests, the deficit is likely to increase. Indeed, the Department of Communications suggests that by 1984 we will be exporting 23,500 jobs in this dynamic industry and increasing our trade deficit in it to $1.5 billion.
As hon. members know, this is the last thing we need. Because even with our trade merchandise surplus the emphasis is still entirely on raw materials. One of the things 1 did agree with was the paper of the Conservative party on economic development policy which was written in 1975. The Conservative party then said, and I quote:
Canadians should not consider the merchandise account to be in a balance or a surplus position unless the balance or surplus is achieved on a basis that excludes trade in raw resources.
We are at the moment running an $11 billion trade deficit in end products. The fact that we have an over-all surplus is made up for by the fact that we are doing exactly what this paper proposed we should not do, namely, relying on export of raw resources. We have an $1 1 billion trade deficit in end products. We desperately need to turn that trade deficit around. We already know that trying to do so by increasing foreign investment and increasing raw material exports to finance that investment is a futile exercise. It amounts to chasing your own shadow, with the added factor that the more you chase it the longer the shadow becomes.
Borrowing Authority
In my final remarks 1 would like to urge this government to reassess this tendency of its following along with the same tired out policies the Liberals followed for so many years. 1 remind this government that locking ourselves into high interest rates to attract foreign investment increases our foreign debt load. There is no stimulating policy for our high technology industries in Canada, and that is a direct foreclosure on Canadians being able to invest in their own country.


Marcel Joseph Aimé Lambert: Mr. Speaker, I wondered what kind of a speech I was hearing while listening to the hon. member for New Westminster-Coquitlam (Miss Jewett). I thought we were dealing with a bill to increase the borrowing authority of the government based upon Bill C-37 of earlier this year which was not passed and which actually covers the borrowing authority for expenditures which have largely been consummated. Yet we have heard a run down, prepared I do not know where, of all sorts of dribs and drabs concerning economic policy which have nothing to do with this bill.


An hon. Member:: Let us hear yours.


Marcel Joseph Aimé Lambert: 1 would prefer, if the financial critic of the NDP is not here, that whoever substitutes would stick with the bill. This is a very limited bill and I do not think 1 should have to lecture a former university president about relevance and about not trying to throw all sorts of mud and water against the wall in the hope that a minuscule quantity will stay.


Pauline Jewett: Let us have some positive policies.


Marcel Joseph Aimé Lambert: It was poor quality mud and very little stuck.


Andrew Hogan: Mr. Speaker, I rise on a question of privilege on behalf of my party about not throwing dirt at our party. Surely the hon. member for Edmonton West (Mr. Lambert) can see that if there are failures in the borrowing position of this government, as we are pointing out, it is primarily due to their economic policies. This was the meat of the address of the hon. member for New Westminster-Coquitlam (Miss Jewett) and she is as free as anyone else in the House to use this occasion to introduce that.


Mr. Deputy Speaker:: I think the hon. member will agree with me that the point he has raised is certainly not a question of privilege but rather a difference of opinion.


Marcel Joseph Aimé Lambert: Mr. Speaker, 1 wish to revert now to Bill C-10. The Minister of Finance (Mr. Cros-bie) has been asking for authority to extend the borrowing power of this government to borrow $7 billion. If one goes back to the news release issued at the time of Bill C-37-and I invite the hon. member for Cape Breton-East Richmond (Mr. Hogan) to do so-then one sees that at that time the govern-

October 23, 1979
Borrowing Authority
ment was seeking authority to borrow $10 billion for the fiscal year 1979-80.
This bill, some eight months later, seeks borrowing authority for only $7 billion. In other words, there has been some progress. Perhaps in the hon. member's mind $3 billion is little because his party has no ceiling on expenditures it will make when it wants to make them, regardless of where they are going to get the money. That never enters their mind.
Hon. members will recall that in November of 1978 supplementary authority for $7 billion had been obtained, but those of us on this side are very conscious of the fact that $7 billion was obtained by the presentation of a bill by a government that had been embarrassed into trying to slide through surreptitiously a borrowing authorization under a $1 item in a supplementary estimates appropriation bill. The Chair, of course, had, quite properly, when this was drawn to its attention, disqualified the item, and therefore the government had to come forward with a separate bill. At that time they got $7 billion. Most of the borrowing powers obtained prior to November, 1978, have been used but, as 1 pointed out in the debate on February 15, 1979:
Last year the government tripped itself up over its own ineptitude in attempting to increase a borrowing authority in an appropriation bill under a one dollar item or some similar procedure. Of course, the Chair rejected it. Last November the government had to introduce a borrowing authority bill in which it sought authority to increase its borrowing capacity by $7 billion. Approximately four months later the government is back saying, "we have to borrow another $10 billion."
Now we say, just a minute-and we did say so-how is it that so much money is required? Any attempt by my colleague the hon. member for York-Peel (Mr. Stevens) to get information from the former minister of finance ran into a stone wall. Finally, the information did come out. There was then $2 billion worth of borrowing authority under legislation which expired on March 31, 1979. There was a further $3.8 billion worth of authority which was made valid under previous legislation. With the $7 billion sought in the bill for the fiscal year 1979-80 there was authority for approximately $13.8 billion.
Why was this money needed? It was needed for one reason and one reason only. The program managers of the government in 1978-79 ran out of control totally and utterly over the spending program of that government, and the only recourse was for the poor former minister of finance to come forward in the House and admit failure on the part of the government to control expenditures. The problem was the rate of increase in government deficit. They were financing borrowings to pay interest; not to repay capital but to pay additional interest as time went on.
Frankly, that is one of the most serious problems that my hon. friend the Minister of Finance has inherited from the previous administration. Instead of $10 billion, the amount has been reduced to $7 billion, and on top of that the Minister of Finance has said that there is a terminal date on the credit and he will have to come back by March 31, 1980 to get any additional borrowing authority at all. That is a lot more honest

than what prevailed heretofore. It seems to me that hon. members should recognize this fact.
1 hope we are going to get far more details and a far more open disclosure by the Minister of Finance through the changes that have been implemented as a result of his examination of the problems he inherited as well as the examination of programs by the President of the Treasury Board, so that hon. members on both sides of the House will be able to understand the control that is required on the spending programs of the government.
I can tell you, Mr. Speaker, that we are going to get a very explosive report from the Comptroller General. There is item A in the First section under the Treasury Board where the purpose, under the function of program activities of the Treasury Board, is to examine government programs, to assess their performance and to report. Time and time again I questioned the secretary of the Treasury Board before the Standing Committee on Miscellaneous Estimates and asked him to produce some of these reports. If they are of any value to members who are supporting government programs, surely to goodness they require the evidence of these reports to show their performance. But none was forthcoming, even though the secretary of the Treasury Board agreed it was desirable that they be available. But he is no longer there. The then president of the Treasury Board (Mr. Andras) agreed with me that this should be so, that it would be highly desirable, but "don't catch me doing it" was all he would say.
The point was that not one program was being assessed. The Treasury Board was totally deficient in its duties. However, their duties have now been pointed out to them and processes have been organized whereby these programs are being assessed, and we will find out about them. That is the question which faces the Government of Canada today, not all the little matters which were referred to by the hon. member for New Westminster-Coquitlam. The prime task of the government has been to gain control of its expenditures. That is not done overnight, but already we see the effect of what has been done in the interim.
Instead of coming to us for $10 billion or possibly more, taking into account inflation and increasing interest rates over which the minister has no direct control-anybody who wants to come and sit in and listen is welcome. I can assure the House that there will be a lot of pupils to listen to the Minister of Finance and to the governor of the Bank of Canada on that particular point. Talk about people not having cracked the book but being very ready to criticize! The louder are their protestations, the more evident it is that they do not know anything about the subject. We will see what will result from these steps taken by the government. The members in the opposition and the people of Canada will be in a position to judge my hon. friend the Minister of Finance and the administration which is being put into place under his direction in this particular field, if next March or shortly thereafter he comes before this House and, in the absence of any extraordinary
October 23, 1979

circumstance, admits that he has to borrow more money in excess of what he is seeking now. In other words, if the demand for borrowing authority is greater than it is now and if no extraordinary circumstances exist therefor, then the Minister of Finance will have to admit to the House that he has failed in his mission. But I do not think he will.
1 am satisfied that the people of Canada have recognized the fact that the prior administration had lost control completely over its expenditures and they told the incoming government: "That is your first task." Reasonable people will say, "We will give you a certain amount of time to do it". The proof of the pudding will be in the eating next year, at the end of the authority granted by the bill before us. The concept of the bill is very narrow and it does not cover the whole economic field.
I wish the New Democratic Party would come along and tell us what they see as the requirements for borrowing. Of course, they would want to borrow maybe $20 billion, $30 billion or $40 billion as they let go with some of their more irresponsible programs. No way, Mr. Speaker.
I recommend to hon. members that we accept this bill. It will go before committee where hon. members will be able to examine the Minister of Finance and his officials in greater detail. Then it will come back to the House. But it is required and I would therefore ask hon. members, in a spirit of fairness, to accept it. We are not playing games over the election, over what was said and what was not said. The former minister of finance, the hon. member for Saint-Maurice (Mr. Chretien), and 1 have verbally crossed swords many times across the floor of this House. He knows that I knew what he was trying to do. Sometimes I caught him out, but he knows that what I have said this afternoon is absolutely right.
Because he is a good Canadian, I am sure he will want to join us in getting after this particular problem. He knows it was there, that it was recognized at the time of the election. Unfortunately, it had been blown up too big and too fast and had gone beyond the control of the previous administration. 1 commend the bill to hon. members and would seek their affirmative vote.


Joseph Jacques Jean Chrétien: Mr. Speaker, 1 do not intend to make a very long speech because I know of the problems facing the Minister of Finance (Mr. Crosbie). 1 went through this kind of experience when it used to be that these borrowing bills were just an item in the estimates and we did not have to present official bills and so on. I was forced for days and days to sit in the House listening to gloom and doom speeches for nothing. So 1 do not intend to do that. 1 just want to make a few points which in my judgment are important at this time.
The hon. gentleman knows I have a lot of sympathy for him because I too have been minister of finance in difficult times. I think sometimes we have to have fun but I did not find it too funny this afternoon when the Minister of Finance treated this problem in a very light way, trying to make a joke out of a very difficult situation. 1 think that he will gain nothing by
Borrowing Authority
trying to be funny in the face of the problems this nation is encountering at the moment.
1 would like to make reference to a few points which are worring me very much. When one is under pressure, as the Minister of Finance is at the moment, I think it very important that one get as much support as possible. I feel very sorry for him when I see his present situation, because in order to have stability in the Canadian economy we need to have confidence in our Minister of Finance.
At this moment when the Canadian dollar is still under extreme pressure, the present government is facing many problems. They made brave speeches during the summer, especially the President of the Treasury Board (Mr. Stevens), to the effect that they would bring expenditures under control and so on. Now we realize after only a few months that the Minister of Finance has to admit, as he did last week, that his predictions of last August were not right. Two months after making them, he has to admit that his predictions of August were off the target by $500 million. He gave me hell for the type of difficulties with which 1 had to cope. I do think that this situation is not one which calls for the Minister of Finance to be making funny speeches.
Everyone in the business community knows that the Minister of Finance wanted to keep his deputy minister because Bill Hood was a competent man. 1 heard what the minister said when he was a member of the committee in the spring after the prime minister had appointed Mr. Hood on my recommendation. He said to Mr. Hood in my presence that he was very competent, and that if there was a change of government in the coming months he would have an easier time with the new minister of finance. The first thing that Mr. Hood heard from the Prime Minister (Mr. Clark) was that he was fired and that it was against the wishes of the Minister of Finance. I have never seen such a thing and 1 feel very sorry for the present Minister of Finance.
As I said in the House the other day, there is another problem that is in my mind very much at this time, and that is the future of the governor of the Bank of Canada. It took some time for the Minister of Finance to realize that, after all, he was responsible for interest rate policy and he could not just say that it was the responsibility of the governor of the bank, because since the Coyne affair it has been very clearly established that the ultimate responsibility is vested with the minister of finance.
When 1 was minister of finance I never tried to run away from my responsibilities. 1 know it is not pleasant for any minister of finance to accept a recommendation to increase the interest rate. That is not fun, but very often we have no choice because the alternatives are more difficult. I was pleased to hear the Minister of Finance say that he had complete confidence in the governor of the bank. That is the way things should be because the Minister of Finance has full responsibility. But if you are in the marketplace today and you look at the

October 23, 1979
Borrowing Authority
present situation, you will hear rumours that the government is planning to replace the governor of the bank.


An hon. Member:: So they should.


Joseph Jacques Jean Chrétien: The market should know what the view of the government is. It is not good for the stability of Canadian currency and the Canadian economy at this time to see the Prime Minister of Canada go to a press conference and say he does not know if he will or will not keep the man. When a man has responsibilities like that and has to be seen all the time he has to have the confidence of the government. If he does not have the confidence of the government, he should be told so and replaced.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: That is the way the system should work, and I urge the Minister of Finance to start taking his responsibilities seriously. Of course, he and I can have a lot of fun on other subjects. I like to laugh once in a while. I am from rural Canada just as he is, and a good joke makes me feel good, but when we are dealing with this problem it is not the time to make fun of our institutions.
1 understand his problem and 1 urge him to talk to the Prime Minister and make sure that the oil and gas pricing problem is resolved very quickly. 1 understand his frustrations. Members of the opposition who formed a new government in the spring were asking for a budget in March. We are now at the end of October. I know there is not much work that can be done on a budget, but how can the Minister of Finance predict the deficit for next year? How can he predict the inflation rate for next year if he does not know what the compensation program for oil prices in eastern Canada will be? With the huge increase in the price of oil internationally, this uncertainty puts a lot of pressure on the Minister of Finance in preparing his budget. He has to know these things.
What happened this past summer? Those first ministers were among friends, Mr. Davis and Mr. Fougheed. How come they did not manage to resolve this? When I felt last year it was my duty to ask Alberta not to increase the price of oil by $1 in January, 1979, I gave them five months' notice. We entered into negotiations. Now we are at the end of the period. My budget came in in November and now we are at the end and the poor Minister of Finance is sitting there alone not knowing what the government will do. That is terrible and 1 feel very sorry for him.
1 hope members of the government will realize that they cannot leave the Minister of Finance high and dry like that. He needs the backing of the government, because what is essential in that role is to have some credibility. Yet in a matter of weeks the Prime Minister has pulled the rug out from under him by changing his deputy minister without his consent. He is now putting him in the position of having to say in the House that he supports the governor of the bank, while 24 hours afterwards the Prime Minister in a press conference indicates he does not know if he will keep him. The governor of

the bank has a very difficult job to do. I know there are other things he could do.
If the government is determined to move on the deficit, and do something about it, we need more than grandiose speeches by the President of the Treasury Board, who does nothing but pretend he is going to kick 60,000 bureaucrats out in three years. He claimed he would cut the civil service by selling Canadair and de Havilland. 1 hope Canadair will have 20,000 employees. They are not bureaucrats, they are people who make planes. The same thing is true of de Havilland. This kind of nonsense does not satisfy those people who have put their faith in those responsible for managing the economic affairs of this nation.
What we need to know is what the inflation rate will be next year. There is a lot of planning being done at this time. Fast year I said in my budget of November that we should move the date of the budget, always having it in the fall rather than the spring, so that the people could make plans for the year to come on the basis of a budget that would be known to everybody. How can they prepare against inflation next year without knowing the government's budgetary intentions?
The price of oil has to increase. That has been the policy of our government and our party, but it should increase in relation to certain standards. This idea that the price of oil has to be set side by side with the international price set by the OPEC cartel makes no sense. 1 was in Iran, in Saudi Arabia, in Venezuela and in Ecuador and none of those nations charge their citizens the price for oil which they charge the foreign market. Why do we have to do this in Canada? Not even the Americans do that. In Texas the independent oil producers still get $5.35 per barrel for old oil. It is not sold at the international price. People in the west sometimes complain about our policies on oil pricing. If you go to Texas, Mr. Speaker, and talk to the producer there, he will tell you that they hope to get the same generous treatment that is given in Canada. Why should we run the risk of having four or five more points of inflation next year? Who made that commitment for the nation? I hope the Minister of Finance will resolve this difficulty very quickly because very soon we will have been 13 months without a budget.
I remember when I had been the Minister of Finance for a week and members were up on their feet asking me when I would present a budget. Within a month I made an economic statement in the House. It was kind of a mini-budget in which I changed some of the policies. I presented another one in April and one in November.
We have to get ready to move now rather than pushing back all the problems until later. Of course, the Minister of Finance will be late. When I presented my budget in November of last year I based my predictions and my policies on the best information I had on increases in the price of oil. It was information I had gathered at the World Bank meeting, the IMF meeting in Washington. The increase was to be about 15 per cent, according to the consensus, but OPEC nations decided otherwise and the price went up in certain instances 40 per cent. That immediately led to a big change in the situation in
October 23, 1979

the United States. My forecast was made on the prediction that there would be growth in the United States for 1979-80, but that it would be less than in previous years. Because of the OPEC increase in prices the United States is already in a recession.
In answer to those people who ask what is the difference between our economic policy and the Tories' economic policy,
I would take as an example the statement made by the Minister of Finance the other day when he said that we were wrong in 1974 and 1975 in not letting the Canadian economy go into a recession. That is what he said.
That is the basic difference in our approach. We do not think it is necessary to let the Canadian economy go into a recession as the Americans have. We managed to prove that point in 1974 and 1975, and I hope that the Minister of Finance will keep that in mind. But at this point I have the impression that the government would be satisfied to see a recession in Canada. This, very often, has been their approach, and some would argue that it is the right policy. I see a smile on the face of one of the so-called red Tories, the Secretary of State (Mr. MacDonald). 1 know that there are problems within his party, but we Liberals do not think that Canada needs to be driven into a recession.
Of course, it is not easy to move at the right time, but since 1970 our government managed to run the economy in such a way that there was no recession.


Marcel Joseph Aimé Lambert: You went into wage and price controls.


Joseph Jacques Jean Chrétien: Yes, we knew that wage and price controls were necessary.


Marcel Joseph Aimé Lambert: Inflation was so wild.


Joseph Jacques Jean Chrétien: We got out of the controls at the right time. When we introduced the wage and price controls, the members on the opposition side were telling us that when we took the controls off there would be a huge bubble in inflation. That is why I, as Minister of Finance, decided to end the controls; I felt that after two and a quarter years the conditions were right for getting out. In fact, when we left the government this year inflation in Canada was still four or five points below the American inflation rate, in spite of the fact that we went out of controls the previous year.
Perhaps it was pure luck. I do not think that it was entirely good judgment, but it was the right timing. That is why at this moment the delays caused by the inability of this government to make up its mind about an oil and gas policy, due to the difficulty of arriving at a consensus among Mr. Davis, Mr. Lougheed and this government, will force my successor to be too late with his budget. Already the minister is late by three to five months because the circumstances are not the same due to the American recession.
Borrowing Authority
I hope that the minister will tell us when he intends to have a budget. It is very nice to make jokes, but the nation must know when he intends to tell us where we are. If there is an increase of $500 million more in the deficit, it means that there are influences affecting the economy, and we want to know what they are. We want to know where the government will be making its cuts. We hear the statements by the minister, and the same day we hear statements by other ministers telling us that they are going to be giving so much to that program and so on. We would like to know where the cuts are.
My party has been very kind to the government since it took power. We were not one of the parties pressing for Parliament to come back in May or June. In retrospect they might have been well advised to do so, just as Margaret Thatcher did in England, but they were too confused by their election promises which are now coming back to haunt them. I do not want to bicker on that matter, but we faced the electorate too and my party came along with the policy that it was not to make any promises. Of course, we did not win the election and even had we made exactly the same promises, we still might not have won. The point is we have tried to be specific and honest with the public at that time.
I urge the Minister of Finance to find other occasions on which to make his jokes because it is time he told the nation where he stands in terms of the economy, where he stands on oil and gas pricing, what the deficit will be next year, what the level of inflation will be next year, what the forecasts for unemployment will be for the next year and so on. This is what the nation needs at this time, not the flip-flop statements which he made at the beginning of his speech today.
1 do not believe that the minister should be saying that he will go to the cabinet committee when he feels like going. I do not plan to keep the minister in this Flouse for seven weeks at a time on bills, as has happened to me. I know that this is unfair to the Minister of Finance, and we do not plan to do the same thing. I will try to be serious and to the point. It is not important that I score petty points and so on. It is important that the nation know where it stands, and I hope that the Minister of Finance will tell us what he is thinking and what he intends to do.
1 hope that the minister will get the support of his party when he states that he is supporting the governor of the Bank of Canada. I hope that the minister will get the support of the Prime Minister when he requests a particular deputy minister and that one hour after he has expressed his confidence in that individual, that person will not be fired. That was a shame. The Minister of Finance deserves more than that, and I will support him in his efforts to do the best for our nation.


David Orlikow: Mr. Speaker, we are indeed witnessing a very strange debate. For years while the Liberals formed the government, the Conservatives opposed higher interest rates. The government of the day said that they were necessary and that it would create difficulties for the people of this country. Now we find the Liberals opposing the increases of the Conservative government, which had previous-
80074 -34

October 23, 1979
Adjournment Motion
ly opposed the rise in interest rates and which is now defending increases in interest rates by saying that they are necessary and something over which we have no control. When the Conservatives were in opposition they attacked the Liberal government almost monthly because the cost of living was increasing regularly and rapidly. They were calling on the government of the day to do something about the increased cost of living. Now we have the spectacle of the Conservative Prime Minister (Mr. Clark) and Minister of Finance (Mr. Crosbie) arguing, as the Liberals did when they were in office, that there is nothing which can be done about the increased cost of living.
I found it interesting that the lead speaker for the Liberal party in this debate was good enough to be the lead speaker for that party today, but was not good enough to continue in the cabinet when the Liberals were in office. It was also interesting to hear the former minister of finance tell the House how successful their policies were and how they were able to protect Canadians against a recession when we have had more than three quarters of a million people unemployed for the last two years, and it will get worse as the American economy moves into recession. It was interesting to hear the former minister of finance tell us how successful the wage and price controls were. What the former prime minister ignored so carefully and so deliberately was the promise of his government when they instituted wage and price controls that inflation, which was running at 10.5 per cent when controls were implemented and which obstensibly was the reason for implementing them, would be brought down to somewhere around 4 per cent in the third year. The former minister of finance forgot to tell us in his speech that when his party left office inflation was almost back to the rate it was when they implemented wage and price controls.
What the Minister of Finance and the other representatives of the Conservative government are refusing to tell the people of Canada is that as the cost of living goes up-and we have almost double digit inflation right now-the policies which they propose to implement in moving this country to world crises-
May I call it five o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. McCain):: Order please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Surrey-White Rock-North Delta (Mr. Friesen)-Public Service-Review of personnel management and the merit principle-Application of princi-
[Mr. Orlikow.)
pies in report; the hon. member for Mercier (Mrs. Hervieux-Payette) Canada Mortgage and Housing Corporation- Inquiry whether underprivileged will benefit from housing policy; the hon. member for Cape Breton-East Richmond (Mr. Hogan)-Regional Economic Development-DREE commitment respecting Sydney Steel Corporation.
It being five o'clock the House will now proceed to the consideration of private members' business as listed on today's order paper, namely notices of motions.


PRIVATE MEMBERS' MOTIONS
David Kilgour: I believe, Your Honour, that it is well understood that items Nos. 1 and 3 cannot proceed at this time. Accordingly, the motion of the hon. member for Belle-chasse (Mr. Lambert) will be dealt with now by unanimous consent, if that might be put to members of the House.


The Acting Speaker (Mr. McCain):: The hon. Parliamentary Secretary to President of Privy Council (Mr. Kilgour) has asked for unanimous consent to deal with motion No. 4 standing in the name of the hon. member for Bellechasse (Mr. Lambert) and to stand motions Nos. 1 and 3. Is there unanimous consent?


Some hon. Members:: Agreed.

[ Translation}


SOCIAL SECURITY
Joseph Adrien Henri Lambert: That, in the opinion of this House, the government should consider the advisability of having Parliament adopt a measure authorizing payment of an allowance to housewives who remain at home to take care of their family instead of joining the labour market, the purpose being to ensure a global income corresponding to the family's needs by providing an additional family income to that earned by the father.
He said: Mr. Speaker, do I have the floor? I have difficulty being heard, and I hope I can succeed in getting heard.


The Acting Speaker (Mr. McCain):: The hon. member for Bellechasse has the floor.


Joseph Adrien Henri Lambert: Mr. Speaker, first I would like to thank Divine Providence for doing everything right and allowing us to draw the lessons. When motions were drawn, at the beginning of the session, my group was favoured, and every group was favoured, by which I mean that four motions were drawn and each political party was favoured in turn. What
October 23, 1979

men did since the beginning of the session took another turn. At any rate, if other members have something to say, I would invite them to do so later, they will have a chance to be recognized. For now 1 have the floor, and if there is any respect for democracy, we should be allowed to express ourselves. It is not that often that we have a chance to do so.
First I would like to pay tribute to Canadian women for their tremendous input in the building and development of our country. This week, under a motion by the right hon. Prime Minister (Mr. Clark) we had an opportunity to commemorate the recognition of the rights of Canadian women on the 50th anniversary of that event. It takes us Canadians a long time to get the picture and to recognize people's rights. That is what we did about Canadian women. Still, Mr. Speaker, it is a great honour and a duty for me to move a motion to favour the family by a policy of equity and justice toward the basic cell of society-the family-to whom we owe our being here tonight. Since the first debates in this House more than 100 years ago, the representatives of Canadians did not consider family policies many times. Sure, the House passed the Family Allowances Act and later on improved it through amendments, but changes made to it in the last session of the Thirtieth Parliament are still a controversial issue.
Mr. Speaker, it is hard to believe in 1979, in a free, democratic and developed society, that we did not more often give a chance to the basis of our society to grow and become stronger, in order that the family, the basis of our society, could benefit from the recognition of the law, with all its rights and also to be in a position to assume all its responsibilities.
We are all guilty, we can beat our breasts when we see the divisions within our families, because we have always ignored their importance or even their existence. And yet we all mention the importance of family life in our speeches at the time of an election. Yes, in the last election campaign we saw that the party which is now in the official opposition, and which was then on the government side, had included in its program the recognition of the rights of the housewife in the following sentence: "that a value be set on the work of housewives and added to the gross national product". I was very happy to hear the then prime minister say that this would be included in our legislation, in our statutes, that it would be officially recognized through legislation so that a value could be set on the work of the woman who decides to work at home.
Mr. Speaker, twice already I have had the opportunity to present the same kind of motion in this House. Last year, when 1 introduced that motion, a government member of that time made the following remark: This motion is exactly the same one moved by the hon. member in the previous session. At that time, the hon. member for Winnipeg North Centre (Mr. Knowles) rose and said that he agreed that it was the same motion but he added: it proves that the hon. member for Bellechasse has a good memory, that he is convinced of the merits of his views and is ready to solicit again the support of
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all hon. members and to convince the government of the urgency of such a proposal so that we can at last recognize the rights of women working at home. Mr. Speaker, Canadians are watching us more critically than ever.
1 hope that those who control the frail levers of power will work to this end. As for us, we hold the balance of power or whatever you want to call it. I recall the old balances used by our grandfathers with an arm on which you only had to move the beam to the extreme right to lift the weight at the other end. The balance is now going down! We used this balance not so long ago in the House on the amendment motion on the Address in Reply to the Speech from the Throne. We used it freely and objectively and we shall continue to play our role of opposition in the same way.
This is why I say that we are in a very special situation and that whatever the obstacles placed in our way, we are determined that the wheels will continue to turn. We have a duty and a mission to fulfil in the House and that is what we are doing tonight during this debate.
Mr. Speaker, in amending the basic motion that was tabled earlier-since we amended it somewhat to enable all our colleagues in the House to unite in making this a reality-we took into account the fact that this policy should be applied on a voluntary basis so that, as several members and ministers noted, women will not feel that they all have to leave the labour market. This is freedom. If a woman wants to work outside her own home, it is her business. On the other hand, if a woman decides to stay home, it is also her business. On this point, Mr. Speaker, we are proud to recognize wholeheartedly the principle of equality and freedom for both men and women in Canada.
This policy is one that gives access to the family, not only from a quantitative point of view, meaning its monetary aspect, but even more from its qualitative point of view, in recognizing the importance of housework. In my opinion, we should seriously think about it.
As everyone knows, the family is the first free enterprise in our country and we must recognize it as such. It has become evident that we must consider as a member of the labour force in our country each person who assumes the responsibilities of a family. Also, our duty is to ensure the profitability of the family enterprise, as we do every day for small and medium businesses and for the multinationals. We also must take an important step forward by including housework in our gross national product.
As indicated by Mr. Hawrylyshyn in his "Review of some recent propositions to modify and extend the measure of the GNP", 1 quote:
Such an imputation must be included in the GNP as a measure of means since very important services come from this activity outside the market.

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At page 56 of a brief addressed, I imagine, to all Canadian parliamentarians and entitled,"Women and Work-Five Million Women-A study of the Canadian woman at home", by Monique Proulx, one can read at page 56, and I quote:
That step would constitute solid quantitative evidence of the role of women in the productive activities of our economy, a role that has been reduced in the past because of the market criteria to which the GNP is geared ... the officialisation of those estimates in the national accounts would even contribute to a certain extent to the legal recognition of women's contribution and consequently their rights to the economic value of the family heritage.
Mr. Speaker, we are not the only ones considering that question. All women's associations across this country have seriously examined at various conventions this step which should be taken by the Government of Canada. Those associations of Canadian women put forward considerable arguments which should draw the attention of all members in this House so we will really be taken seriously when we want to legislate to give all sectors of society, all social classes, the tangible recognition of their rights. Also, Mr. Speaker, at page 38 of the report of the Royal Commission on the Status of Women in Canada, published in 1970, one reads, and I quote:
The housewife who remains at home is just as much a producer of goods and services as the paid worker, and in our view she should also have the opportunity to provide for a more financially secure future. Canada has given some of its workers an opportunity to do this through the Canada and the Quebec Pension Plans. To neglect to do the same for some three and one-half million other workers in the home is to ignore the essential nature of their work.
It is all very nice, Mr. Speaker, on Mother's Day, to give them nice bouquets of flowers, to make beautiful resolutions and praise their merits if the day after everything is forgotten and we do not act like responsible people who can do better than tell them we love them and then forget about them. What is important is not just to hold out bright prospects to them, but give them the full means to fulfil themselves, and that means adopting that motion today. I would urge the government to introduce a bill which would give them the recognition I just referred to.
When we know that the workers' average income is $15,000, would it not be logical, Mr. Speaker, that through a housewife allowance that policy would guarantee to our families the Canadian average income as if it were the vital basic income? As for the families where the father's income exceeds the average income, the father could for the same reason benefit from a tax credit equivalent to the average allowance granted. That policy, Mr. Speaker, would thus help give a correct evaluation of the cost of such a measure and ensure its indexation. 1 know that on the government side they will ask me how we propose that could be evaluated. It is not up to me to make evaluations, but I am prepared to indicate which criteria to use to warrant that amount.
We can base ourselves on the three following criteria: first, the potential salary of the person; second, the cost of hiring one servant; they are hard to get nowadays; even millionaires have difficulty finding servants. Because we failed to recognize the fact that they perform an essential role in our country, we

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created that situation. And, third, the cost of paying for each job, separately. What would that cost be, Mr. Speaker? Every day we pay for work that is considered helpful for production as a whole, and is part of social, economic and cultural evolution and justice. Sometimes we forget to recognize the worth of those who choose the fundamental work of guiding the education of the children and running a home smoothly.
I remember how, last June, during a debate in this House, the hon. member for Kamouraska at the time, Mr. Dionne, whom almost everyone knew at least by name, a respected hon. member to whom I pay homage for having served his people and country very well, gave the following example: If a man hires a woman as a servant, he pays her a weekly salary; after weeks and months, if love steps in and he marries her, he no longer pays her a salary. Automatically, her work is no longer recognized as such, which it had been previously; after marriage, that falls through.
We should reflect on that behaviour and realize there is much to be done to change that state of affairs. Much could be added to this but time flies, I see. I should very much like my motion to be adopted. I do not want my colleagues to say that the hon. member himself killed his motion. I merely want to give an outline of it, hoping that it will be accepted and referred to a committee for further study.
I know there are some who will say it would cost us an eye and a tooth, that it would cost a lot. Mr. Speaker, let us face facts: those very same hon. members may have been the first in the past, and may be in the future, to vote blindly for budgets for arms, ammunition to destroy lives; not their own, mind you, but those of others: not me, oh! no, the others. So billions of dollars to make arms, that is not too costly. But billions for mothers, for the women who work at home, who deserve to be recognized by voting funds designed to pay her an allowance under a guaranteed annual income? They are going to waver but they will be the first to cast a blind vote in favour of the estimates in order to give billions of dollars to those who cash in on the credit of the nation to their advantage and put us into debt to the tune of billions of dollars. We only need to study our budget deficits of the last few years to realize that we are paying up to $9 billion a year in interest on borrowed money because there exists an institution, a monetary system parallel to that of the state. On that subject most people do not pay much attention. All they say is that the system is as it is and that we must bear with it. Yet it is that system which is driving us closer to bankruptcy and which we must change. While doing so we must recognize that we ought to grant to the woman who has chosen to stay home and carry out that splendid mission I referred to earlier, the recognition of her rights. I urge the present government which in the past gave the impression of endorsing that policy to show proof of their sincerity so that the motion be carried and a bill introduced to that intent.
October 23, 1979


Mr. Stan Schellenberger (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the hon. member for Bellechasse (Mr. Lambert) has brought this motion before the House at least twice before that 1 know of, and 1 was here both times. He is so eloquent that he has almost convinced me 1 should support the motion. When he gets to the full height of his speaking abilities, there are not many in this chamber who can equal his good voice and debating abilities.
The hon. member stated we should recognize the contribution of women in the building and development of this country.
I compliment him on bringing forward this subject. He fully believes we are not recognizing the work done by mothers in this country in the fashion it should be recognized. He has strong feelings about this legislation and about the hope that this legislation should come before the House and he brings it before us at every opportunity. Hon. members must recognize these strong feelings about a piece of legislation. Many times I have had strong feelings about various subjects and from time to time have received welcome support from other members in these areas.
The hon. member referred to certain problems that could result from this proposed legislation, such as the fact that it could cost an arm and a leg. However, he stated there are many programs put forward by government that cost a lot of money but seemingly are not in the best interests of the people of this nation and, if they were cancelled, the money could be made available for such a proposal. I believe that is true.
Many members of Parliament become very discouraged over the fact that this is so because they have programs they believe are good for their constituencies and for the nation, but there is never enough money for them because it is being spent in ways which they would rather defer. I realize that money could be found for these programs if we were to cancel some of those we do not think are of benefit. However, as we participate in this chamber we realize the government has priorities, that there is only so much money and it has to be put to the best use that can be found for it.
I find difficulty in supporting the motion at the present time and 1 wish to outline a few of the reasons why. It is becoming more and more difficult for families to make ends meet. In my riding of Wetaskiwin, for example, the average home costs in the neighbourhood of $75,000 to $90,000. Many of those in my riding are commuters. They must provide food and clothing for their families as well as education for their children. It is very difficult for them to make ends meet. 1 realize one way to help them would be by accepting the very motion the hon. member is presenting.
1 again emphasize that I believe the hon. member is bringing this motion forward because the government is not recognizing mothers in the way we feel they should be recognized. We are always reviewing the subject of what value to put on labour. It is not only the mothers of this country who do not
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believe they are getting adequate recognition for their labour, but how do we as politicians or as a government decide what value to put on labour? This can be done in many ways and it is a question that should be debated in this House. 1 realize our time is short but it is a very important subject that should be dealt with by the members of this House.
Is the proper manner of recognizing the work of mothers to give them a salary paid, I suspect, by the taxpayers? That proposal is not outlined in the hon. member's motion, but as I listened to his speech I think he meant that it should be paid by the taxpayers.
I propose that our money be moved to some areas that are more essential, and 1 wish to outline those areas. During today's question period in the House, the hon. member for Saint-Leonard-Anjou (Miss Begin) questioned the Minister of National Health and Welfare (Mr. Crombie). She stated that the bill discussed yesterday and given second reading did not go far enough and that the government should find $320 million, I believe was the figure, to increase benefits for the needy between ages 60 and 65, regardless whether they are single or married. Of course, we would all like to do that. She mentioned, as did the hon. member for Bellechasse, that a program could be done away with in order to find the money.
There are many statistics to show that elderly women are the poorest people in this country. Those statistics were again referred to yesterday in this House, and 1 want to emphasize them again.
There are many in this House and, I am sure, across this nation who would object to the term "housewife". That leaves out a group of people who are very important and should be looked at. 1 refer to the single parent and the fact that many times a man is in that role. Many have a definite need to help support their family resulting from, say, a family tragedy. In our material society families are breaking up for various reasons. Perhaps the most tragic is the loss of a partner.
Many single people are now demanding that they be allowed, through adoption, to have families as well. They are trying to remain in the labour force while supporting families.
I do not think that we as members of this House of Commons should limit this motion just to the housewife. We should broaden the motion somewhat, if we contemplate passing it.
Many studies have been done on this very subject, and one to which I would like to make reference is the report of the Canadian Council on Social Development entitled "Women's Pension". 1 want to quote two of the early parts of this study to emphasize how this council felt. I believe this study was undertaken last year. One quotation is on page 126, and it deals with the concept and valuation of work. It states:
-the pay for housework proposal does nothing to solve the sexual division of labour inside and outside the home. Indeed, it may simply serve to make it more rigid and legitimize it.
After reading the rest of the report, I think what the council was saying was that if we have such a proposal as the one before us today, we would put women in a position where they

October 23, 1979
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would feel that they could not enter the work force, and more and more women want to do that. They do not want any restrictions on them. We all hear very strong representations in this field, and many hon. members brought forward this very argument yesterday.
The report goes on:
-the energies of those with an honest interest in establishing sex equality may simply be diverted by this argument and should be directed to more meaningful reform.
I think this brings us to a discussion of reform which should be brought forward to allow families to redistribute incomes between husbands and wives. We in this House all remember the Murdoch case in my own province of Alberta. In a divorce settlement a woman who had worked on the family ranch, raised the family and participated in the running of the ranch, was unable to realize anything for her labour. There is a definite need for Parliament to deal with that kind of thing. The province of Manitoba and many of the other provinces have contemplated this matter but have not been able to come to grips with it. It is something with which we as parliamentarians should be dealing, and it is of major significance.
I realize that the matter of the opportunity for women to contribute to the Canada Pension Plan while being married was brought forward in an amendment last year. This is something with which we must deal. We must deal with changes in the family allowance, the child tax credit plan, and day care facilities. I spoke with an hon. member about this motion today, and he suggested that perhaps the government should amend the tax law-I know the hon. member raised this matter in his speech-to allow the sole earner in the family to divide his income. If he makes $20,000 and his wife contributes by raising the family, perhaps $10,000 could be her share of the income and $10,000 his share. By doing that they would pay less tax. The wife would be able to contribute to pension plans so that as she grows older she has some security.
As has been mentioned over and over again in debates-and I am not sure why this is-women tend to outlive men. At the far end of the scale many women are in the poorest categories because they have not been able to set aside any income for private pensions for their golden years. We as members of Parliament should debate this and examine whether there is room for legislation to deal with it.
This brings me to the matter of the government's looking seriously at making it possible for housewives and, more important, for women generally to plan for their old age. Wives who stay at home are often completely financially dependent on their husbands. However, only in the province of Manitoba are husbands not obligated to give any money at all to their wives upon separation. Many men are finding it increasingly difficult to manage on one salary. Because of this, in families where husbands earn low wages it is important that their wives work to keep their families above the poverty level.
I point out that 51 per cent more two-spouse families would be poor if wives did not work outside their homes. In other words, wives are no longer working for pin money. They are contributing actively to the maintenance of their families. Because of that I think the government is obligated to help those women find roles in the labour force, particularly women from single parent families, as I mentioned before.
The increasing participation of women in the labour force is no longer regarded as a temporary phenomenon. Increasingly women who participate in the labour force are mothers of pre-school children, and the overwhelming evidence is that mothers enter the work force either as sole providers for their families or because one salary is insufficient to meet the rising cost of living.
This brings me back to the need for the government to look at such things as day care to facilitate the participation of women in the work force. The government should examine information and referral services to facilitate the access of women to community services. Perhaps there should be a crisis intervention service so that women who are victims of certain crises can be sheltered temporarily, and so that their children can be cared for. Perhaps there should be home support services for women whose family responsibilities include the care of the disabled, such as a disabled husband, a disabled child or elderly family members.
The Prime Minister (Mr. Clark) has stated over and over again that this government is devoted and will be devoting considerable attention to the development of an employment strategy for women. That brings me to the point of why I have difficulty supporting this motion. I fully believe that there are many pursuits into which the government can put its financial resources in order to work toward bettering opportunities for women in this country. I would like to see us develop such a process in the programs I mentioned, rather than put aside a great deal of money for financial contributions by way of salary.
With that, 1 will let other hon. members contribute to this debate, and 1 will be very interested in the points they bring forward.


Joseph Adrien Henri Lambert: Mr. Speaker, I rise on a question of privilege. I did not want to interrupt the member for Wetaskiwin (Mr. Schellenberger) during his intervention. I listened carefully to what he said and he referred at one time to things I did not say. When he said I had not mentioned the role of the woman in single parent families, I would have to say that it is obvious that when I referred to women who work at home it was an all-encompassing motion. I could not let these remarks go into the record uncorrected because there was here a case of misinterpretation, and the persons concerned could feel attacked or even neglected by me. That is the correction I wanted to make.


The Acting Speaker (Mr. McCain):: I think the hon. member has raised an item which is more or less an item of

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debate. 1 think he has made his point and I hope he is satisfied with the results.


Jean-Claude Malépart: Mr. Speaker, first I would like to congratulate the member for Bellechasse (Mr. Lambert) on his praiseworthy intention, namely, that the government grant allowances to women who intentionally stay home to attend to family chores instead of entering the labour market, the purpose of the measure being to ensure a supplementary income to that earned by the husband and thereby matching the family needs.
Unfortunately, Statistics Canada shows that in the present context a certain category of citizens in Canada is becoming poorer and poorer while the rich are getting ever richer. 1 am afraid that we would harvest precious little from a new housewives allowance program and 1 think that housewives deserve much better than that. In fact, there are more than 700,000 unemployed in Canada, most of whom are women. There are also 2 million old age citizens of whom 54 per cent, that is
1,166,000,	have no income other than their old age security pension and their guaranteed income supplement, which amounts to $325.95 a month or $602.44 for a couple. There are also seven million Canadians whose income is lower than $10,000 a year, while we notice in all provinces that more and more people depend on welfare assistance, 59,000 recipients of social assistance in Newfoundland, 10,000 in Prince Edward island, 73,000 in New Brunswick, 61,000 in Nova Scotia,
511.000	in Quebec, 395,000 in Ontario, 59,000 in Manitoba,
49.000	in Saskatchewan, 100,000 in Alberta, a rich province,
179.000	in British Columbia, 6,000 in the Northwest Territories for a total number of 1,508,400 individuals who receive social assistance in Canada and among them we note a high percentage of women and single parent families.
Mr. Speaker, I think that to assist women remaining at home, it would be advisable that the government set up at once a guaranteed income program and to ensure that such program would really assist the citizens with average incomes it will be necessary to consider first all administrative costs of our various social programs at the federal as well as at the provincial level, for example, the veterans' pension, the old age security pension, the income supplement, the federal and provincial family allowances, the child tax credit and social welfare. There is also a policy for public housing such as low-rent dwellings to assist low income-families. There is also in Quebec and other provinces the school tax. We note that most of those programs are useless.
It would be much better to review immediately all those programs to set up a guaranteed minimum income program which would enable us to cut heavy expenditures at the administration and management levels. The amounts recovered could provide some remedies to citizens. In addition, it would be urgent-to assist immediately that group of citizens-that the Progressive Conservative government as well as
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the hon. member for Bellechasse help the Liberal members prevent the government from increasing oil prices, because we know how important fuel and gasoline prices are for citizens with average incomes.
The government should also be made to establish rental aid programs. Third, Canada Mortgage and Housing Corporation programs designed to make homeownership easier for families should be maintained and improved; fourth, the government should set up a guaranteed income program encompassing the needs of housewives who remain at home, and of all low income Canadians.


Stanley Howard Knowles: Mr. Speaker, I can assure the hon. member for Kent (Mr. Holmes) that my remarks will be brief enough to leave him some time to make his contribution.
I find it somewhat interesting that while we in this chamber are debating a motion which has to do with the rights of women, across the street from us a building, that for many decades has been a male bastion, is on fire. I heard the rumour and I went out to see if it is true that the Rideau Club across the street is on fire. It is only recently that women have been admitted to that place. I wonder if it means that some of the men are so upset about women getting into that club that they decided they had better do away with it. However, the Ottawa Fire Department is out there in force, so the building may possibly be saved.
I want to indicate my support for the proposition put forward by the hon. member for Bellechasse (Mr. Lambert), and I do not intend to qualify that support with a lot of ifs and ands and buts such as we have heard during this debate. There still ring in my ears the speeches we heard last week in celebration of the fact that 50 years ago women were declared by the Privy Council to be persons. Surely if they are persons, one of the things they should have is equality with men. I believe we have a long way to go before we establish equality for women.
References have been made to statistics about the level of incomes, both in working years and in retirement years, which would show what a disadvantage women suffer. Those statistics are there staring us in the face. Indeed, if we are going to do anything about equality in retirement, we have to start by having equality all along the way.
The hon. member for Wetaskiwin (Mr. Schellenberger) quoted a report which raised the question of whether paying women allowances to do work in the home might regularize that kind of employment, and might do something to the social structure. My view is simply that women should have the choice. They should be free to go out to work in the labour market outside the home or to choose to stay in the home, raise their children, and serve the family that way. Everyone says that women are free to do that, but in a world in which economic problems are so great, they are not free if the economic situation is such that they have to go out to work in order to supplement the family income. I should like to see, in

October 23, 1979
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addition to equal pay for equal work for women working outside the home, an arrangement whereby they get paid for their services if they stay in the home, raise their children and care for their family.
This is not some futuristic hope that will never come to pass. We complain about the slowness of our progress in establishing women as persons, in establishing their equality, but it is on the march, and I submit that the day will come when they will have the kind of equality that is expressed in the idea that a woman should be free to go out to work or to work in the home but should not suffer economically if she chooses to work in the home. I should like to see something like this developed.
It can also be said that this is not completely foreign to our way of doing things. The family allowance which we now pay is, in effect, a payment to mothers to help them raise their children. We can turn that into an allowance to mothers or to homemakers. We can put it on a different basis and make it a much larger amount. All this can be worked out, but the main point I want to make is that in this House where there are so few women, it behooves the rest of us to face up to the fact that women do not yet have equality-they lack it in many ways. This is one of the key ways in which they lack that equality. They are not free to choose whether to work in the home or out of the home. We would increase that freedom, that equality, if there were allowances for those who stay at home.
As 1 said, in addition to establishing equality in the working years of our people, men and women, we would also improve the chances of equality in pensions on retirement if women had this kind of income during their working years and, since pensions are still somewhat related to earnings in the working years, their pensions would also be better.
1 am happy to congratulate the hon. member for Bellechasse on bringing this matter once again before us. 1 hope the overwhelming number of men in this chamber will some day face up to the fact that if we think of women as persons, if we think they are wonderful, we should support equality for them down the line.


Some hon. Members:: Hear, hear!


Mr. J. R. Holmes (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am delighted to have the opportunity to participate for a few minutes in this important debate. Initially, 1 wish to compliment the hon. member for Bellechasse (Mr. Lambert) on introducing the motion before us, one of great importance and one which he has placed before this chamber in the past. 1 must say I was a little surprised that the hon. member for Winnipeg North Centre (Mr. Knowles) would give his unqualified support to the particular motion before us. I say that in the context that he made a very important and pleading argument for equality for women across Canada. In my view there are important ingredients missing from the motion before us. It does not encompass some of the qualities I believe

are important if we are really to see equality of women across Canada.
1 know I am limited as to time. With respect to my background, I want to view the matter from the standpoint of a particular medical problem. I would like to speak specifically about the emotional health of women. I say this because it is very relevant in terms of the context of the motion and relevant, in my view and in my experience in the community, in terms of the situation and the reality which exist in Canada today.
If I may I will take the liberty of referring to some scientific journals, something which may not come as much of a surprise to Mr. Speaker. I would refer, first, to a recent study which was carried out at the University of Michigan. This involved a group of some 1,143 women and their transition from school to the working world. It has some very interesting results to report. An article appeared in the January 1, 1979, issue of Behaviour Today and I think it important to quote from that particular study as follows:
Working outside, the home increases a woman's self-confidence and feelings of worth. The same is true for women who think of themselves as having or planning a career, whether or not they are currently employed ... When we included age, educational attainment, marital status, number of children, length of employment, and salary, the salary variable proved to be the most important predictor of self-esteem. Marital status was a close second.
Given the results of that study, how large would the allowance proposed in this motion have to be to compensate for the loss of self-esteem that would be felt by women who gave up their jobs to become housewives?
Let me refer to a particularly important piece of work which was done by Dr. Janice Wetzel of the University of Texas. She found that women in general are three times more likely than men to suffer from acute depression, and that women now constitute three quarters of those living in American nursing homes. I am sure any hon. members in the House who have had experience in this area are acutely aware and conscious of this particular fact. It is not unreasonable to assume that this difference in the incidence of acute depression is closely related to differences in life patterns as between men and women. An adult life spent as a housewife may well lead to a greater likelihood of experiencing severe depression.
It seems unlikely that the proposed allowance would overcome this particular aspect of the problem. Another study which 1 felt was most important, and which 1 believe to be relevant to this debate, showed benefit to women's mental health of a move away from the traditional role as housewives. This was conducted by Dr. Srole and Dr. Anita Fischer in New York. It is rather interesting because this study showed that when men and women in the age groups of 40 to 49 and 50 to 59 were interviewed in 1954, women were found to be mentally impaired to a significantly greater extent than were men in the same age groups. But what is important is that when the research was repeated 20 years later among the same age groups, it was found that the mental health problems of women who had grown up in the latter, less restrictive years, were lower than previously and proved to be quite close to the level experienced by the men interviewed.
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It is important to review the conclusions of these researchers. The change was attributed by them to the "radically different social climate", which the latter group of women had experienced. It had enabled them to escape the fate of their "briefly, premaritally, liberated mothers who had become quickly reined-in and subdued by the traditional halters of male dominance". In most cases the researchers reported most women growing up after the twenties "never again reverted to unquestioning acceptance of the submergence of their identity and autonomy with that of their husband and their own domestic role." If the connection is sustained, Dr. Srole and Dr. Fischer concluded that between the higher rates of wellbeing in later life and the sense of opportunity prevailing among women in childhood and adolescence, this would add weight to the case for extending women's rights to live their lives on a basis equal to that enjoyed by males. This is the very point the hon. member for Winnipeg North Centre was trying to make.
It seems to me we must let the families choose their divisions of responsibilities. Children need both mothers and fathers. We do not automatically assume that one is the breadwinner. In my opinion that encourages the exploitation of women who are in the labour force, suggesting that they should not be there in the first place and therefore they are not entitled to equal pay and to equal opportunities. I am sure it is obvious to all in the House that only women can bear children and bring them into the world. But children benefit from parental guidance and attention by both parents when they are fortunate enough to have both parents.
Even if one looks at situations where divorce has occurred, one will find there is increasing evidence that divorced parents, in choosing who shall have custody of the children, both feel they have an important role to play in the life of their children, despite the divorce proceedings. Why should the government tell a mother it is only her job to devote herself to the care of her family? Are we trying to discourage young men and young women from training to fulfil their vital roles in society, telling them it is a waste of their time because the government will only recognize the housewife role as the legitimate one? I do not think that is the reality of today.
1 would like to say, with great respect to the hon. member for Bellechasse, that recognition of the vital role women play in the family as mothers, grandmothers, wives, sisters or daughters cannot be given by the token gesture proposed by the hon. member. Young people of both sexes, and fathers, need more encouragement in the training and care of the young, of the infirm and aged, and all household tasks so that responsibilities for the care and well-being of family members and household tasks can be shared and enjoyed with pride of contribution, rather than by loading all of these duties on a woman no matter what else she may do, whatever else she might like to do or no matter what her interests may be.
In my view the majority of women are not asking for wages for housework, but they are asking for equal opportunities and for recognition and support service to families.
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The Acting Speaker (Mr. McCain):: The hour provided for the consideration of private members' business having expired, 1 do now leave the chair until 8 p.m.
At 6 p.m. 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. Crosbie that Bill C-10, to provide supplementary borrowing authority for the fiscal year 1979-80, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
David Orlikow: Mr. Speaker, before the five o'clock adjournment I pointed out that the present ministers are now following the policies previously carried out by the former Liberal government, policies which they opposed vigorously when they were in opposition. The Prime Minister (Mr. Clark) and the present Minister of Finance (Mr. Crosbie) attacked the former government for permitting higher interest rates. They attacked the former government for not implementing a program of tax cuts to the extent of $2 billion, as proposed by the present Prime Minister, for low and middle income earners. These are policies that are now being forgotten.
If I remember correctly, the present Minister of Finance indicated that in his opinion the people of Canda should not take promises made by political parties when they are in opposition too seriously. In other words, he was indicating that a very large number of the promises made by his party when it was in opposition would not be implemented by his government.
The Conservatives were opposed to deficit financing. It seemed to many of us, not just those of us in the NDP, that Conservative members of Parliament had not read a thing about economics since Adam Smith wrote his very good book on economics more than 100 years ago. Now they come here and ask for permission to borrow $7 billion.
We are not opposed to deficit financing. Indeed, we have spoken frequently about the need in certain circumstances to follow a policy of deficit financing, indeed a policy which has been followed for many years by many of the provincial Conservative governments. I need just point to the Ontario

October 23, 1979
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government which has been a Conservative government for more than 30 years and which, this year and last, has projected budget deficits of more than $1 billion.
We are not opposed to deficit financing if that deficit financing is part of a well thought out economic policy designed to meet the needs of Canadian citizens, and if that policy is part of a plan to develop an industrial strategy, so badly needed particularly in our manufacturing industry. We are not opposed if it is designed to meet the energy needs of this country without inexorable, sharp, and regular increases in the price of energy, such as the government is proposing and which we believe will have a very immediate adverse effect on the rate of inflation.
The rate of inflation is now running at just below 10 per cent. It has been accepted by most economists that the $4 per barrel increase in the price of oil, which it is pretty certain the government will announce in the very near future, will add at least 2 per cent to the cost of living. If we have an excise tax added to that, we can think in terms of at least a 3 per cent increase in the cost of living. That will give us an increase in the cost of living on an annual basis of somewhere between 11 per cent and 13 per cent by the middle of 1980. That is a sad prospect for the Canadian people who look to the new government to change the basic policies that were being carried out by the former Liberal government.
In asking Parliament to permit this $7 billion borrowing, the government is doing so without providing any answer to the basic problems facing the country. After all, those hon. members have been the government since May of this year. During the election campaign, and before that time, they told the Canadian people they had worked out policies which would better meet the needs of Canadian people. Yet here we are, six months later, with no definite policies. All we get are promises that studies are being done and policies will be announced in the near future.
One of the most serious problems we face is that the country has no industrial strategy. There is also the problem that the work force in the manufacturing industry, which is so basic to any modern economy, is gradually being reduced. The Canadian manufacturing industry cannot, has not been able and is not now able to meet the competition of foreign producers. Not only are we not able to compete for international markets, we are increasingly unable to meet the needs of Canadian people in competition with countries outside Canada. So the number of people working in the manufacturing industry has declined from 26 per cent of the labour force of some years ago to about 20 per cent of the labour force at present.
We believe that one of the most fundamental reasons for that decline, a decline for which there is no indication that it will be arrested, is the failure of Canadian governments in the past, both Liberal and Conservative, to establish a research and development program in the government, our universities and our industries, which would meet the needs of our Canadian people.
In June, 1978, the then minister of state for science and technology made what he considered to be an important announcement. He said that by the year 1983 the governments proposed research and development expenditures in Canada would increase from the level at this time of 1 per cent of the gross national product to 1.5 per cent. In proposing that, the minister knew that most of the industrialized countries of the world were already spending 2 per cent or more of their gross national product on research and development.
That announcement was criticized by the official opposition at the time and, indeed, by the present Prime Minister, as well as by our party because we said, and quite correctly, that that objective would not meet the needs of the Canadian people. Within one or two months of that announcement, the then government, seized by the supposed necessity for restraint, whatever that meant, made substantial cuts in the already planned research programs in government, and because of the restraint imposed on its expenditures to universities through the provinces, it meant a further erosion of university research.
There is no indication that the plans of the former government and the plans of the present government will provide for the very sharp increase in research and development required from the private sector, and especially the industrial sector, to reach even the modest goal proposed by the former government, not to mention the higher goals endorsed by the present government when it was in opposition, and by our party.
Let me summarize the situation with regard to scientific research and development in this country at the present time. According to the OECD data, Canada ranks in the middle of ten industrialized countries in education variables conducive to scientific research, but it ranks near the bottom in terms of research and development employment expenditure and research production. While other countries were expanding their employment of R and D personnel at rates of up to 8 per cent per year, Canada's R and D employment per 100 population has fallen since 1968. In terms of 1970 dollars, total R and D expenditures in Canada have declined from $980 million in that year to $910 million in 1977. I am sure that when we get the figures for 1978 we will see a further decline.
The ratio of R and D spending to gross domestic product has declined steadily since the peak of 1.8 per cent in 1967. It is now probably less than 1 per cent. The attrition of scientific research goes back to at least 1971, well before the time of fiscal restraint in the federal sector. From 1971 to 1979 the increase in the Medical Research Council and the National Research Council budget in current dollars was less than twofold, whereas the total of federal expenditures in the same period increased by nearly fivefold. In terms of 1969 constant dollars, the average operating grant for medical research funding scientists has declined from $24,900 in 1971 to $18,700 in 1977.
It is no wonder that there is a steady and constant stream of the best trained medical researchers in Canada to other countries, particularly the United States. There is not a member here who has a university in or around his constituency, regardless of which party he belongs to, who cannot with a

October 23, 1979

phone call prove to himself or to his constituents that what 1 have just said is true.
According to an ad hoc committee convened by the then minister of state for science and technology, the federal government's stated goal of increasing total R and D expenditures in Canada from .92 per cent to 1.5 per cent of the gross domestic product by 1983 would require annual increases of 27 per cent in industrial research development, 10 per cent in government research development, and 30 per cent in university research. This implies a growth in research and development spending of from $1.9 billion in 1977 to between $4 billion and $5 billion in 1983. None of these goals are anywhere close to being met.
Instead of university research increasing, it is decreasing. Research in government laboratories at best has been frozen in the last year or two, and industrial research and development are growing at not even a third of the figure which the ad hoc committee felt was necessary. Statistics Canada has calculated that federal cutbacks in science and technology totalling over $129 million in the next 18 months will mean that industrial research and development will only increase by 8.4 per cent instead of the 27 per cent which 1 indicated.
I could go on, Mr. Speaker, but the fact is the situation is not improving as the people of Canada had hoped. It is not improving as this government proposed it should when it was in opposition. In fact the situation is getting worse.
Let me spend a couple of minutes on the situation with regard to our universities. We all know that persuading industry to increase its expenditures on research and development is a very difficult thing, particularly when we realize how much of industry, especially our largest industries, is controlled by multinational corporations which traditionally want to do their research and development near head office, which usually means the United States.
The government plays a major role in deciding how much research and development will be done at our universities. It is obvious to anybody who has looked at the question, as it is obvious to most of the research organizations and researchers at universities, that in recent years the governments have had a very poor record of support for basic research at our universities. There seems to have been almost a deliberate attempt on the part of the former government to scuttle university research completely.
As was documented in a recent study by the Royal Society, there has been a dramatic deterioration of funding for basic research at Canadian universities. In 1974 funding in real dollars by the National Research Council dropped to 60 per cent of the 1969 level and by the Medical Research Council to 80 per cent of the 1969 level. The record since 1974 is not any better.
In trying to assess what our universities should do regarding scientific research, the Science Council of Canada in its eighteenth report stated that it is generally accepted that research is an indispensible element of the university for development of
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both teachers and students, and that Canadian education requires research in Canadian educational institutions. It stated that research at the universities need not and should not be limited to basic research alone and that, nevertheless, the search for new and deep understanding of the world which is inherent to basic research makes it particularly important to higher education.
In the years from roughly 1950 to the late 1960s, enrolment in Canadian universities was increasing steadily and regularly. In those years the funding arrangements made for financing the universities permitted an increase in funds given to faculties to conduct the scientific research they felt they should be doing. That was of tremendous value to this country. Since 1972, however, the number of students entering our universities has declined, and this is likely to continue for some years. The result is that the universities have been squeezed more and more with regard to funding. One of the first things to go has been support for scientific research and development. This has had a very adverse effect on our universities and the research they can do. The result has been less and less research.
As I have indicated, Mr. Speaker, the same claim about medical research can be documented in every university in this country. The situation will not change for at least ten years, or probably longer. We need to look again at funding for scientific research and development in Canadian universities. They need more money if they are to continue doing the job they are doing and to help us meet the needs of the 1980s and 1990s. We have waited and, I think, patiently, and the university communities have waited patiently, for six months. There is no sign, however, that this government has developed a new policy. I have heard of no consultations between government and the universities about how to meet that situation. The prospects for our universities are indeed bleak.
Some hon. members may believe that the record I have recounted is not factual. Members on the government side may believe 1 am following the usual opposition party practice of damning everything a government, of whichever party, brings forward. 1 think I can verify that what I have said is true by summarizing some of the recommendations made by an ad hoc committee appointed by the former minister of state for science and technology. That ad hoc committee came to the conclusion that the 1.5 per cent target for research and development would require a tripling of research and development expenditures over the next five years. I should like the present minister to tell the House at an early date how close we are to that goal.
The committee suggested that federal tax incentives were inadequate to meet the announced target. The report stated as follows:
We are convinced ... in view of the enormous size of the challenge, that current incentives will not affect the major intensification of effort, and the major change of attitudes that are needed.
The committee also stated that present policies placed too much emphasis on promoting incremental research and development expenditures, and may penalize firms whose

October 23, 1979
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research and development effort fluctuates widely from year to year.
When this government was in opposition it said again and again, as it does now, that it was interested in improving the position of small business, yet that ad hoc committee reported to the minister of the day-and I am sure nothing has changed since-that since the incentives had no immediate value for funds without taxable income, the cash flow problems of small business were not recognized by the present policy of trying to encourage industry to do more in the way of research and development. The committee held that if the 1.5 per cent target for scientific research and development was to be achieved by 1983, real growth in industrially funded research and development of some 24 per cent per year must be attained over the next five years. What we are getting this year is about one third of that 24 per cent goal they recommended.
The committee also recommended that the federal government and Crown corporations should make better use of procurement policy to further technological advances in Canadian industry. It suggested that Canada will have to reduce the foreign investment induced technological dependence of Canadian industry by changing the way it imports technology.
These are just some of the recommendations made by a committee of experts appointed by the former minister, and nothing has changed since. 1 indicated earlier, Mr. Speaker, that Canada lags far behind other industrialized countries in the percentage of its gross national product devoted to research and development. While most other countries have been increasing funds for research and development as a percentage of their gross national product and nearly all of them are already substantially ahead of Canada, ours has been steadily declining. Since 1965 it has dropped from about 1.1 per cent to about nine-tenths of one per cent of the gross national product in 1978.
One of the reasons we believe there is less industrial research in Canada and that the amount of research done by the private sector in Canada is considerably less than in other industrialized countries, is because of the very high percentage of our industries, particularly large industries, which are completely controlled by the multinationals. If we examine our major national corporations, particularly the Canadian branches of the large multinational corporations which almost without exception prefer to do their research and development at home rather than in Canada, we can see how that works.
About a year ago the Toronto Star conducted a survey and published the results on October 12, 1978. This documents what I have said. Some of the largest corporations in this country were surveyed. The results showed that the Ford Motor Company, which in 1975 had sales of $4,400 million and employed 34,000 people in this country, spent well over $1 billion on research and development. But when a representative was interviewed by the Toronto Star this was said about its Canadian research and development program:

Most of our research and development is done in the U.S., Britain and Germany. We do some here but there are no figures available.
In another survey 1 saw it was reported that Ford Motor Company did not have a single person with a Ph.D. degree working in its research programs in Canada. Is it any wonder that researchers in Canada, when they finish university training, hightail it to the United States?
Let us take a look at General Motors. This company did over $4 billion worth of business in Canada in 1975. It spent about $1,400 million on research and development. When queried about its Canadian program, this is what was said:
We don't have any Canadian figure, partly because we are still trying to find out how Ottawa defines research and development.
Let us take a look at Canadian General Electric which had sales in Canada in 1975 of $822 million. In 1977 this company spent $463 million on research and development around the world and said this:
We spent $9 million on R & D in Canada compared with $463 million in the

Let us now look at Kodak Canada which did $182 million of business in Canada in 1975. In 1971 this company spent $351 million on research and development. What did this company say about what it was doing in Canada? It said this:
All pure and applied research is done at our Rochester N.Y. facility. We do some product development in Canada but no figures are available.
I could go on and on, Mr. Speaker, but this is the situation which this government has to face.
Let me deal with one more illustration which the hon. member for New Westminster-Coquitlam (Miss Jewett) dealt with briefly earlier this afternoon. Surveys prepared for the government have indicated that the research intensive industries outperform low research and no research industries in providing a higher growth of employment, in increased output, in a higher growth of productivity for workers, and in a lower growth of prices. Yet what we now see, according to the most recent report tabled by FIR A, is that while we have been talking about the need to strengthen our manufacturing industry, and particularly our higher technology industry, the multinational corporations have been busy buying out our high technology industries. We are permitting them to be sold off to foreign investors.
Despite the supposed desire of the Canadian government expressed by the establishment of the Foreign Investment Review Agency, we find in its fifth annual report published last week that we have lost control of more than $1.6 billion of assets to foreign interests in the last year or two. The five industries in which foreigners have been most active, according to the FIRA report, are metal fabricating, machinery, transport equipment, electrical and chemical products, and the food and drink industry. These are precisely the industries which we ought to be encouraging to become increasingly Canadian and efficient if we are to meet the objective which I think all political parties should have, and that is to try to aim for full employment. And yet we are permitting their being sold out.
October 23, 1979

We are permitting sales in precisely the very areas that have been proven by government surveys to be the most efficient, the most likely to provide employment and the most resistant to inflation.
What did the Minister for Science and Technology (Mr. Grafftey) say, commenting on the recent F1RA report, from which I have quoted, as reported in the Toronto Star for October 18, 1979? He said this:
I'd be less than frank if 1 didn't say I was worried about these takeovers... But the only solution is to try to ensure that more research and development is done in Canada in the long term and then there will be fewer takeovers.
That is the kind of statement that governments have been making for as long as I have been a member of Parliament, and that goes back more years than I like to think of.
The tax incentive programs of the former government and the tax incentive programs promised by the present government when it was in opposition will fail, just as the tax incentive programs of the former government failed in meeting the needs of the Canadian people. The multinational corporations will not devote increasing effort to research and development voluntarily. They will not devote increasing effort simply because the government asks them to do so or because we give them a few more carrots in the way of tax incentives. They will not do that unless the government has the courage to tell them that if they intend to operate in Canada, they must act as good corporate citizens here. That is something which they have not been prepared to do.
If we want the large corporations of this country, and particularly the multinationals, to play the role which they should be playing, then we need the kind of tax measures which no government in Canada has been prepared to implement up to now. We need a system of tax surcharges whereby those large corporations which refuse to do research in Canada would be taxed at a certain figure and the money so collected would be returned to them only if they were prepared to finance research and development here.
1 suggest to the minister that he look at the tax program in Sweden which does precisely that, in that part of the corporation tax which companies pay in Sweden is set aside in a special fund which can be drawn out by those corporations only when they are prepared to expand their facilities and employment in Sweden. That is the kind of program that we need to apply to research and development in Canada.
In closing, I say to the minister that we have no objection to deficit financing if there is any indication-which we have not seen-that the government has an objective of meeting the needs of this country, or if the government has an objective of seeing that there is full employment or that our manufacturing industries, which have been employing a smaller and smaller percentage of the work force, are re-equipped, re-invigorated, and can begin to play the role which they ought to be doing. Until the government devises programs and policies which will ensure that Canada takes its place with other industrialized countries in expanding manpower and finances, and makes an effort to meet our needs in scientific research and development-which has not been done for the last 15 or 20 years-
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until that is done we see no real purpose in permitting or encouraging the government to continue with deficit financing.
Despite the words of encouragement expressed by the hon. member for Edmonton West (Mr. Lambert) earlier this afternoon, we believe the deficit will be just as large next year as this year, and just as large under a Conservative government as it was under a Liberal government because this government, just as the Liberal government before it, does not have the desire or program to meet the needs of Canadians.


Mr. Paul E. McRae (Thunder Bay-Atikokan):: Mr. Speaker,
1 enjoyed the brief remarks of the Minister of Finance (Mr. Crosbie) when he introduced Bill C-10. If you do not have much else to do, a bit of humour can help while away the time.
I find it difficult to understand why this should be the first bill the Minister of Finance brings before this House. The hon. member for Windsor West (Mr. Gray) made it quite clear that the need for this borrowing authority at this time is dubious, and perhaps it is not needed at all since there is some borrowing authority left over from the previous Parliament.
It was almost seven and a half months that Parliament was not sitting, and it has been almost five months since this government took office. At times during the Twenty-ninth and Thirtieth Parliaments our ministers made small local announcements, possibly in Regina, Skeena, Prince Rupert or somewhere else. Usually it was an announcement that only had local significance. The Tories would stand up; including their leader, their former leader, and the one previous to that, the Right Hon. John Diefenbaker, saying how we had mistreated and insulted Parliament by making statements away from the House of Commons. That certainly went on for the six and a half years I have been here. I am sure it went on before that.
The four and a half months that Parliament was not sitting was the longest such period when any government was in power. What happened during that time? We had no budget for the eighties. We still do not have that. There was a whole series of announcements. Three substantial increases in interest rates were announced. It was announced there would be no tax cuts, even though the Tories promised during the election campaign they would implement a $2 billion tax cut when they came into power.
There was an announcement that the government's main fiscal measure would be the mortgage deduction scheme, which would cost half a billion dollars in the first year and probably $2.5 billion when fully implemented. There were several other announcements which tended to weaken the whole federal fabric. A board was set up to advise the government on PetroCan and it was announced the government would break up that corporation.
It was announced that several Crown corporations would be sold, and there were several announcements regarding transfers to the provinces, including the transfer of offshore resources. Even though Parliament was not sitting, they announced they would do away with the constitution in terms

October 23, 1979
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of offshore resources. They also announced they had given up lotteries.
There have been all kinds of leaks from this government which likes to leak things such as oil prices and large cuts they intend to make in social services. Last night 1 stated that 1 believe these leaks are deliberate. If the public is informed that gasoline prices will rise to $1.45 and then the increase is only to $1.20, the government believes that the Canadian people are a lot better off. Of course, the public is not fooled.
I asked the President of the Treasury Board (Mr. Stevens) about cuts that would be made. He said there is no truth in the story that there is going to be $1.5 billion in cuts. I knew that without asking the question. 1 should have asked what about $1.4 billion, $1.3 billion or $1.2 billion. I suspect there will be some severe cuts, but they will not total $1.5 billion and the government will look like a kind benefactor of the Canadian people.
There is discussion in Parliament about oil price hikes. There are all kinds of rumours. These hikes can be massive transfers to the private sector or to one or two provinces, again weakening the fabric of this country.
There is a major debate going on in this country because of the actions of this government. As Richard Simeon, the director of the intergovernmental affairs study group at Queens University, Kingston, indicated, there are two factors here. One is a sort of provincial building group, that party across the aisle; and the other is the federal building group, the party here. That major debate began before this Parliament came into being. However, the first bill this Minister of Finance brings forward does not deal with any of these major matters. It is a borrowing authority.
That is the party which prided itself on its adherence to, belief in and love for Parliament, yet this is what ministers hand us, a borrowing bill which is really not needed for the next few months. We do not get a budget which will tell us where we are going. Perhaps the government has no idea where it is going. What they do is try something and, if it does not go well, they try something else. Perhaps they want to listen to the NDP, and the Liberals will tell them where to go. Maybe that will help.
I wish to look more seriously at the world economic scene. I wonder where we should be going and what concerns we should have before making some of these very large moves. 1 mentioned three factors many times in the Twenty-ninth and Thirtieth Parliaments. First, most industrialized countries are facing massive problems that they never faced before, massive in both size and quality. These are problems that never arose before.
There is, for example, a global inflation rate of 5 per cent plus. We do not talk about zero, but about 5 per cent plus, sustained over four or five years and possibly the next ten years. We have high unemployment at the same time, something that has not occurred before. There is a whole series of social problems related to this.
Second, solutions that were traditional, such as the Keynesian solution, the use of fiscal and monetary policies, no longer apply. There is not sufficient strength to solve these problems, possibly because they are too large.
I think about the $2 billion tax cut which the Tories promised during the election campaign. This $2 billion tax cut was to stimulate the economy. In the fifties and early sixties- and I think the New Democratic Party should be criticized for this also-we used to think that $2 billion or $3 billion might really have some effect on the economy. It probably would have, when the gross national product was $45 billion or $50 billion, but when we have a gross national product of $250 billion, we are talking about an increase of something in the order of 1 per cent, not a very stimulative increase.
When the Prime Minister (Mr. Clark) was leader of the opposition during the election campaign, when he talked about what John Kennedy had done and when he said that he would do the same thing, he was talking about a totally different period, and what really worries me is that I do not think this government senses the difference between 1960 and 1979 and 1980. The earlier techniques do not work today because they are either too small or they are counter-productive. How can we use a stimulative deficit to deal with inflation on the one hand and unemployment on the other? It would not work.
The third factor which I think should cause a very significant change in our thinking is one of the principal causes of many of the problems we are facing. The idea that we are all of a sudden going to run out of energy, or that energy is a scarce commodity, is unique. We functioned until the early seventies on the basis that energy was a very cheap commodity and that all we had to do was use more of it. Of course, that does not hold today, so some very significant shifts have occurred. This government, the government before it, and all the governments of the world have to face up to the fact that there is a new set of factors which they just have not come to realize and with which they have not come to grips.
I dealt with one of the government's solutions to the present situation. Hon. members opposite talk about a stimulative deficit with a $2 billion to $3 billion tax cut. I think the government was wise in forgetting about that one. With an annual deficit of $11 billion or $12 billion, the extra $2 billion will not do much except add to the annual deficit.


Walter David Baker: Tell that to Herb Gray.


Paul Edmund McRae: I tell that to everyone all the time. Hon. members have heard it three or four times in this House. This is the third or fourth time I have said it.
Hon. members opposite decided that maybe we could do something with a fancy scheme called mortgage interest deductibility. I do not want to use the evening to deal with that, but one of the things which really bothers me about the scheme is that the government has very little room to move. It chooses to put all its eggs in one basket for the next three

October 23, 1979

years, and that really does not deal with the basic problems we are facing.
What was the next thing this government decided to do? Maybe it could stimulate the economy by handing out a little green paper labelled "one share of Petro-Canada" and worth perhaps $100 to each Canadian. The government could give away another $2.5 billion because, of course, it will be giving away the assets of Petro-Canada. The Leader of the New Democratic Party (Mr. Broadbent) said that the government is going to privatize the assets, and that the government is going to assume all the debts of this company. At this point in time the debts are being discharged by the cash flow from the assets-


Some hon. Members:: Oh, no!


Paul Edmund McRae: Oh, yes! But that is not the way it is going to happen. The government is going to give away the assets and assume the debts. That is another little $2.5 billion item. Perhaps that is the way to stimulate the economy without giving a tax break; 1 do not know.
I would like to deal with another thing the government has brought in, and that is increased interest rates.


An hon. Member:: You didn't do that?


Paul Edmund McRae: 1 will say it again: increased interest rates. There have been three increases in the last three or four months, an all-time high, to something in the order of 13 per cent. I think this was the government which, when it was the official opposition, was condemning us for doing this kind of thing in the past.
There is a very marked difference in the times between when we were allowing interest rates to rise and today. Let me explain that. The difference may be subtle, but it is very important. Perhaps it is too subtle for the government to understand, but when interest rates were rising last year there was a relationship being kept between interest rates and the inflation rate. If the inflation rate was 9.5 per cent and the interest rate was 11.5 per cent, the actual rate minus inflation was about 2 per cent.
When the American inflation rate and our inflation rate were roughly the same and we needed a little difference between our interest rates and their interest rates to bring in capital, we had to keep our interest rates at least the same as, or a little higher than, American rates. However, that is not the situation today, and this is why I think this government does not understand the world in which we are living. Our interest rates today are 4 per cent to 4.5 per cent above our inflation rate.


Pauline Jewett: It will soon catch up.


Paul Edmund McRae: The American interest rate is roughly the same as the American inflation rate, so there is a big difference, a spread of about 4 per cent to 4.5 per cent. That is about the interest rate one would find in Switzerland. Now the minister says, "But we have to keep raising our interest rates to keep up
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with the Americans''. However, there is a very important distinction between the two times to which I referred earlier. We do not have to keep raising our interest rates if there is a substantial spread between our interest rate and our inflation rate. There is a substantial spread today, and that is why the government should reconsider what it is doing.
We have a major deficit problem. We have a major problem when we raise interest rates. The Canada Savings Bond rate was brought up to 11 per cent. The interest the government has to pay is rising very rapidly. I think the minister used the figure of 15 per cent to 18 per cent. We will have to pay 18 per cent of the government's take to discharge interest charges on government debt. That will be within the next year, and this is the cause of high interest.
High interest rates are having a very bad effect. In addition, very high profits are having a very bad effect on the service part of our current account. I think it was stated by a member of the New Democratic Party that the service part of the account would be in deficit about $10 billion next year and would leave the whole current account in a deficit of about $8 billion. That is much more serious, I think, than the internal deficit. Some of these things are affected very severely by high interest rates.
What are we doing with high interest rates? The name of the game is to bring more capital in and eventually to send a great deal more out; borrow more, bring it in, and then have to pay interest on it. 1 feel that the government has to think very seriously about the times in which we are living and not just respond in traditional ways. It should not just ignore the fact that there is a relationship in most nations today between their current inflation rates and their current interest rates. These are extremely important factors, so I think the government must consider its position carefully.
I am very disturbed that the Minister of Finance comes into this House and brings in a borrowing bill. It is not one of the important bills he should be introducing. He should be bringing in a budget, but he brings in a borrowing bill. The major factor is the high interest rate for which he has been responsible. The governor of the Bank of Canada is not responsible for interest rates; the Minister of Finance is. He may get advice from the governor of the Bank of Canada, but at any time he can stop interest rates from rising.
There was a motion under Standing Order 43 that a committee meet with the governor of the Bank of Canada. The motion was accepted by all concerned, but we on this side ask a very simple thing of the minister. We ask that he appear. As the responsible person dealing with interest rates and with the financial structure of this country he should appear first, not the governor of the Bank of Canada. It was my party, when it was on the other side of the House, which always insisted that our minister be the first one to have anything to do with anything referred to a committee, yet this minister today comes into the House and says, "Well, I will go there some day when I am in town". Now this is the Minister of Finance speaking about what is perhaps the most important committee

October 23, 1979
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to meet here in the next few weeks. Certainly it is the most important thing he has to do.
So, as a result of this indifference to Parliament, to the body in which this party professes to believe so strongly, I should like to move an amendment, seconded by the hon. member for Timmins-Chapleau (Mr. Chenier), which reads as follows:
That this bill be not now read a second time but be stood until the Minister of Finance agrees to appear before the Standing Committee on Finance, Trade and Economic Affairs at the pleasure of that committee and preceding the appearance of the governor of the Bank of Canada.


The Acting Speaker (Mr. Scott (Victoria-Haliburton)):: Order, please. I have some reservations as to the wording of this motion and I reserve the right to let Mr. Speaker make a ruling on it tomorrow.


Mr. Mark Rose (Mission-Port Moody):: Mr. Speaker, I was wondering for a moment, when 1 saw the Minister of Finance (Mr. Crosbie) stand up, whether or not I would have an opportunity to speak this evening.


An hon. Member:: Why don't you stand up?


Mark Willson Rose: The hon. member for Okanagan North (Mr. Whittaker) asked me why 1 do not stand up. I would like to advise him that he could see me if he would return to me that orchard ladder he once borrowed when I lived in the Okanagan.


Some hon. Members:: Oh, oh!


Mark Willson Rose: 1 would like to say that this is the first opportunity I have had to speak since I was resurrected and allowed to return to this House.


An hon. Member:: He even looks like Lazarus.


Mark Willson Rose: I suppose it is impossible to give a second maiden speech. However, if one can be maiden more than once, it would probably be a miracle, and if it were a miracle, then 1 would be all for it.
As I have been away for a number of years, it was interesting to see the changes in Parliament. I would say that the changes I see are most revealing. The people who are offering the solutions to our country's problems are sitting in the opposition and are called Liberals, and the people who are sandbagging what the Liberals are trying to suggest as solutions to our problems in this country are now sitting in the government. It is almost the same old gang-new faces but the same old policies. I am not, of course, the first one to have noticed that.
We hear the government claiming that they have a mandate for restraint, and 1 will congratulate the new government for winning a minority Parliament. But if winning a minority government is a mandate, then I do not know what it means not to have a mandate, because if you look at the particular voting pattern in this country, you will find that more people in this country did not want that government than voted for it. So

what kind of a mandate is that? It is artificial, it is an assumed mandate, and it does not have the backing of even 40 per cent of the Canadian population.


Stanley Howard Knowles: It has only 36 per cent.


Mark Willson Rose: As a matter of fact, the hon. member, who has been here since 1860, says that the mandate amounts to about 36 per cent.


Stanley Howard Knowles: Parliament did not start until 1867.


Mark Willson Rose: I am sure you were here then, Stanley.
Anyway, I think a number of other people over this past couple of weeks during the throne speech debate have noticed the irony, almost the cynicism, of what has happened since the Conservatives have gone over there. The party across the way voted against cuts to UIC during the last Parliament. On July 1 they allowed them to come into operation. People notice those things, you know. People notice that there is a facade of new morality which is nothing more than a repetition of the old morality.


An hon. Member:: They call it consistency.


Mark Willson Rose: Yes, 1 suppose you could. We have the nattily attired member who is the Minister of Finance. He is suggesting that maybe UIC has been too generous, that UIC competes with employment, that certain kinds of benefits discourage the incentive to work, and that unemployment is not as devestating as it used to be because a number of members of families have jobs when perhaps only the male breadwinner was unemployed. It is interesting to hear that coming from a member from the maritimes, or a member from the Atlantic provinces. I would imagine that the minister would prefer being called a member from the Atlantic provinces than a member from the maritimes.
We have heard a similar statement from the President of the Treasury Board (Mr. Stevens). Since those two men are responsible for the direction of this country and we expect from them a lot of hard discipline and diligent work, I would like to ask everyone whether the fact that they have a good deal of backing in terms of finances or, to put it in plain terms, the fact that they are rich men, lessens their incentive to work?
I think they would be the first to deny it, but certainly for the Minister of Finance, as the representative of a part of the country which has the highest unemployment in Canada, to go on television and suggest that UIC benefits should be cut down, or that perhaps we should look at them with a view to cutting them down because they destroy the incentive to work, is hypocrisy. It is unbecoming to the very humorous Minister of Finance.


An hon. Member:: Humorous?


Mark Willson Rose: His friends are laughing all the way to the bank.
Another matter is the raise in interest rates. Many hon. members have spoken about that and I do not intend to beat it to death, but 1 will tell you what it is doing to my riding. If you
October 23, 1979

think it is odd or ironic that 1 should be talking about constituents who sell real estate, let me say that the mortgage interest rates today are causing a slowdown in that industry as well as limiting the opportunity for young people to acquire homes because they cannot make the monthly payments. To say the deductibility will help them is stretching the imagination, because you must at least have the down payment and you must have the mortgage before you have the opportunity to get the benefits of deductibility or the tax credits.
These are the problems affecting the country, problems which many people look to the new government to solve. But if the government is not committed to governing, how can it solve any problem? The government is committed to standing back and letting some other agency, usually the private sector, look after the problems of the country.
Members of my party sitting here tonight and members of the Social Credit party sitting opposite us are here because of the failure of the old line parties to deal with problems in the past 30 years.


Some hon. Members:: Oh, oh!


Mr. Breau:: Are you just a reaction to us?


Mark Willson Rose: Your reaction to us is zilch.


The Acting Speaker (Mr. Scott, Victoria-Haliburton):: Order, please. The hon. member should do us the courtesy to carry on with his speech.


Mark Willson Rose: Thank you, Mr. Speaker, for your intervention and protection, but I am accustomed to catcalls. I know that at least over there is a party of principles. 1 do not like their principles, but at least they have some.
I do not like the Gallup poll party opposite. Where will they go next? When they thought restraint was in, they moved to the right. Approximately ten years before that when they thought the new ethics, politics or counter culture was in, they moved to the left. Where will they go now? They will fall between two stools. They will get slivers. That is what will happen.
The third point I should like to make-


Mr. Kempling:: What happened to the first two points?


Mark Willson Rose: I will go over my first two points again. 1 know the government whip has a very short attention span. So, for his benefit 1 will repeat what I said. Tories are going to cut UIC. They were against it. Tories are going to raise interest rates. They were against that too. They are going to cut short-term programs like Canada Works designed for people who need to work this winter, in spite of the fact that we have record high unemployment in nearly every municipality. Especially central Canada, Quebec and the maritimes are suffering high unemployment, including most of the constituencies located in the maritimes.
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The government has presented us with a bill to authorize the borrowing of $7 billion for public works and general purposes. Just read the bill. We have not been told what public works nor even to what general purpose the bill refers. That is left deliberately vague. 1 assume what they are intending to do during the life of this Parliament-or at least this session-is to reveal these public works one by one and dazzle us with their revelation. It is rather like Pandora's box.
My hon. friend, the hon. member for Winnipeg North (Mr. Orlikow), made a comment about the government's belief in deficit spending and that they will borrow up to $7 billion. We do not know to what general purposes the money will be put, nor do we know why Canada needs to borrow this money at all right now. I was not able to hear the justification for this borrowing, but 1 assume it is for some worthy purpose. But before dealing with question two as to what use this money is to be put, let me deal with questions one and three.
The government's answer to question one is to go futher into deficit spending and to borrow seven thousand million dollars to make up and to overcome the deficit caused by that spendthrift, drunken sailor govenment which just preceded them. That is not a bad line. In other words, they blame the previous government for all their own financial woes. Premier Bennett in British Columbia and Premier Lyon in Manitoba have been using this very effectively, so I take it that it is quite a good line. 1 expect we will hear more and more of it, as we have already heard it from the Minister of Finance several times.
The general philosophy of the government goes something like this in very, very folksy terms,"Folks, we did not want to be big meanies, we didn't want to be tough guys. We are sorry for the shape you are in because of that awful previous government that you elected. But you folks want too much. You want to take too much out of the economy and you do not put enough back in, so consequently all of us have to tighten our belts so that our government can make certain hard decisions in order for our system to survive."
1 think that is true. It is important for the government to make tough decisions in order that the system we have lived under survives. In order to have it survive we have to cut health care. We have to cut human resources. We have to cut day care. We have to cut out the lunch program in day care in British Columbia, and we have to cut out the outreach programs for women. And as less money filters down through the provinces to the universities we have to cut educational spending. Why do we do all these things? We do it so the system can survive. Sure, it is said to be for our own good. Now, what is this system we are trying to preserve? It is a system which accords special privileges to the well-heeled sector of Canadian society.


An hon. Member:: Like Bill Kempling?


Mark Willson Rose: Well, I would not be as gross as to name a particular member on the opposite side.
Anyway, certain segments of society certainly will survive
because they are accorded certain privileges. Our system sur-

October 23, 1979
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vives to help the greedy, notably the oil and gas companies, the mining companies, and the banks. Let me give a few examples.
Because of super write-offs Dome Petroleum Ltd. has paid no tax in ten years. That is why we have to borrow money. That is why we have seen heavy taxation loaded on to the middle and lower income earners. That is why we cannot give them the promised cut of $2 billion that the Prime Minister (Mr. Clark) promised during the campaign. It is because we give fast write-offs, depreciation allowances, and 100 per cent and 150 per cent write-offs to certain segments of our economy.
An lion. Member: Because they supply wealth.


Mark Willson Rose: Because they provide wealth? Partially, certainly. Because they supply employment? Partially, certainly. One would think those companies which are largely foreign-owned supply more in terms of the economy and jobs than small companies where similar kinds of write-offs are not accorded. The heart and soul of small town Toryism is in the small businessman. It resides within the main street businessman. What we see here is that our government will borrow $7 billion mainly to provide subsidies to the major corporations, most of them foreign-owned, and at the same time it is not willing to accord that incentive to the small businessman who employs far more people than do the large corporations in total. I think we should remember that. When people are concerned about what the Conservatives are doing as far as improving the economy and providing more jobs are concerned, they should have a look at their policies and see if they do that.
What we found in the past was that fast write-offs for machinery and equipment merely provided greater automation, and in fact did not produce jobs. If I had my druthers, if I wanted my own prejudices to apply here, I would say, "Sure, we will give you the money, all the tax money you want, and you just give the state an equivalent amount of equity. If we are going to give you that kind of money to run your business in terms of incentive, when you strike it rich then we expect to have that percentage of your equity owned by the people who gave you the money."


An hon. Member:: Good idea.


Mark Willson Rose: Why should corporations get a free ride with the public taking the risks and the resource industry taking the profits? On top of that why should they pay no taxes? Shell paid no taxes last year. If one looks at the write-offs and wants to borrow $3 billion, $4 billion or $7 billion, the money not collected here amounts to $3 billion.


Marcel Joseph Aimé Lambert: You are off your beam.


Mark Willson Rose: I beg your pardon? The hon. member said balderdash, or a similar and equivalent outburst, but I notice he is not in his seat. He is standing behind the curtain and making rude sounds.


Marcel Joseph Aimé Lambert: I made my speech earlier.
[Mr. Rose.)


Mark Willson Rose: Yes, he is making rude sounds. I wish he would go away and sit down somewhere.


Marcel Joseph Aimé Lambert: The hon. member should be ashamed of himself.


Mark Willson Rose: Well, that is half the amount of money that the Minister of Finance is attempting to have us agree to tonight.
The Tories say we should sell PetroCan, that it is costing too much. But not $3 billion. The annual cost of PetroCan is $350 million. Besides, PetroCan has the potential of earning a great deal of money. It reduced our foreing-owned petroleum resources from 96 per cent to 80 per cent, and I call that progress. Inco, the International Nickel Company, has had taxes deferred to the tune of $318 million since 1978. Can one imagine that ? I asked an IWA woodworker in my riding the other day if he had had any taxes deferred lately. This is a bit of a tear-jerker I suppose; some people might call me one of those dewy-eyed, sentimental New Democrats.


Jean-Jacques Blais: Resurrected.


Mark Willson Rose: A resurrected, dewy-eyed New Democrat. Someone suggests that perhaps we weep too long and too loudly for those people who are less well off than ourselves.
The President of the Privy Council and Minister of National Revenue (Mr. Baker) sits over there in his seat looking prim, true and blue.


Some hon. Members:: Hear, hear!


Mark Willson Rose: At the same time that we have an income tax permitting fast write-offs and give-aways amounting to maybe $3 billion in tax breaks last year, the Department of National Revenue is hounding a married woman in my riding who filed an income tax return seven years ago and she was informed only a month ago she owes the treasury $200. It is all right to defer taxes for some outfits, but it is not possible for the average individual!
People make these comparisons. They know these things happen and they feel they are unjust. As far as this party is concerned there are times when we are not perfect. That is not very often.


Some hon. Members:: Oh, oh!


Mark Willson Rose: We tend to be like all ideological parties, frequently a bit self-righteous about things, but not often.
I think you will recognize, Mr. Speaker, that when you give billions of dollars in tax breaks to corporations that do not necessarily provide taxes ultimately, or employment, and in contrast you hound and harass a young family for $200, that is unexplainable, unjust and unforgivable.
Let's take the banks.


An hon. Member:: Good idea, let's take them.
October 23, 1979


Mark Willson Rose: I think the banks in general are run by nice people. Of course we have finance companies and credit unions flourishing and proliferating, if people like big words, in our country. We have the near-banks in Alberta. They are socialistic enterprises and the Albertans sort of tolerate them. Despite credit unions and finance companies, the banks are still the major financial institutions in our society. They have a near monopoly. I know there are some amendments to the Bank Act to sort of increase the competition coming up-that is if you believe that competition in a cartel is really competition. Anyway, we have this monopoly and we have that nice collection of members in the other place, strategically located as directors of most of the chartered banks. They are not doing too badly. We have been raising interest rates ten and 11 times in the last year, and the banks-


An hon. Member:: There may be another one coming along.


Mark Willson Rose: Do you think so? I have just been told by my hon. friend beside me that we can expect another interest increase tomorrow. If the Minister of Finance had been as true to his convictions while in government as he was in opposition it would be "bye, bye, Bouey".


An hon. Member:: That sounds like the title of a song.


Mark Willson Rose: As a matter of fact, it is an old song, but then we have heard nothing but old songs from members opposite.
Anyway, let us have a look at the way banks have been doing lately.


Mr. Nowlan:: The last rose of summer.


Mark Willson Rose: I would think that when the member has an interesting riposte I will pause long enough to listen to it. If he would get his hand out of his mouth 1 would hear him more clearly. Even if I did I do not think it would be worth listening to.
What I want to tell you, and remind members opposite of, is that we are authorizing the Minister of Finance to go and borrow $7 billion. He is going to borrow $7 billion for what purpose? It is for public works and general purposes. One of the reasons we have to borrow all this money is that the banks are not paying their fair share in income tax. We have made that point a number of times, but it seems to me that people opposite are impervious to this fact. I think they are well to ignore this because, as long as the people in Canada keep electing Conservatives in large numbers, they are going to ignore it. That is the only lesson they will ever understand.


An hon. Member:: They should vote Liberal.


Mark Willson Rose: They might. Most politicians are deaf to the cries of injustice. Many have a very bad set of hearing bones in their ears. It seems that while politicians cannot hear the cries of injustice from 20 feet away they can hear a paper ballot falling in a ballot box from 200 yards. That is probably the nature of the beast. I do not think that kind of disease escapes any of us because we are responsive to what people want when they
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express their views electorally, aside from all the debate and the most convincing arguments put forward by this member and other members on this side of the House.
Let us get back to the banks. In the third quarter of 1979 the Royal Bank earned profits of $57 million and some small change, with after tax profits of $56 million, paying a tax rate of 2.95 per cent.


An hon. Member:: They own PetroCan.


Mark Willson Rose: If they own Petro-Canada, does that account for the fact that it has made so little money?


An hon. Member:: That is right.


Mark Willson Rose: The member knows something I do not know. I did not know they owned Petro-Canada. I know the Royal Bank spends a lot of its money financing foreign takeovers in this country by American concerns. That is the part that bothers me, not whether it finances Petro-Canada. Good for them if they are. As a matter of fact, I will go down there tomorrow and make a deposit just on the hon. member's recommendation.
The Canadian Imperial Bank made a profit of $49 million, $42 million after taxes, with an effective tax rate of 12 per cent. The Bank of Montreal made a profit of $57 million in the third quarter, with an after tax profit of $58 and a tax rate of 14 per cent. That is not bad. The average person, of course, pays up to 50 per cent when he reaches a certain level of income. Certainly the small business tax on other segments of our society is much greater than what banks pay. I could go on and tell you about the Bank of Nova Scotia and the Toronto-Dominion, but the average tax rate on earnings for all chartered banks averaged 10.4 per cent for the third quarter of 1979.
1 know this is very tiresome to members opposite. They think it is the same old song, attacking the banks. We have to sing the same old song because we have the same old injustices, and that is the problem.
Let us talk a little bit about the $2 billion the Minister of Finance is going to use over the next four years to subsidize mortgages, the banks I talked about, and the development industry generally. This was promised during the by-elections and confirmed the other day. I do not think the Minister of Finance is all that happy about it. Probably a subsidy of that kind is defensible under different times and under different circumstances, but when coming from a government that is constantly and publicly committed to restraint it is hypocrisy.
Whether we spend this $2 billion on mortgage interest deductibility or not, the fact is that if you add the $3 billion in giveaways through tax incentives, plus a number of other things I have discussed and the $2 billion in predicted mortgage interest deductibility you come close to the $7 billion the minister wants to borrow.


An hon. Member:: Order.

October 23, 1979
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Mark Willson Rose: I did not see the Speaker stand; 1 know I was being called to order.


An hon. Member:: He didn't stand.


Mark Willson Rose: 1 should like now to return to question number two that 1 posed earlier, and that is precisely for what public works and for what other purposes does the minister need this money? I have not heard him discuss this at all, so I am naturally interested.
1 have a suggestion. We have cut out Canada Works for most of Canada by a manipulation of the labour surplus rate to change it from 7 per cent to 9 per cent. That will affect many ridings in Canada, and it has completely precluded my riding from getting any of the former benefits. That means that some $350,000 and from 30 to 40 jobs that we had in Mission-Port Moody, parts of which have a youth unemployment rate of something near 20 per cent, will be denied this kind of economic boost next year.
I am quite familiar with the arguments against band-aid programs, such as Opportunities for Youth, which we had about ten years ago, and various other kinds of make-work projects, including Canada Works. 1 am well aware that many people think that these programs have a lot of shortcomings and that make-work programs do not provide anything of a lasting value frequently because nobody picks up the funding after the short-term financing is over. Consequently, the people who were working on those projects are cast adrift again.
I would like to make one point relating to that matter, and that is that these programs do provide jobs for young people who have difficulty finding work because they have no experience. Therefore they provide young people with first job experience and some hope. I believe that this winter especially, since the government has withdrawn Canada Works without notice and without giving us any other kind of program in its place, the government will be forced to institute some kind of emergency program to deal with unemployment throughout Canada before the winter is out.
1 do not think that I will impress the government in this way particularly, since they seem to be absolutely stubborn about putting a complete stop to give-away programs when they apply to people. When these programs apply to industries, resources and banks, however, they cannot give them away fast enough. But when the give-away programs apply to people, there is a great reluctance on the part of the government to put their money where the voters' needs are.
Certain parts of my riding are desperately in need of a crash employment program this winter, and we in this party think that it should be administered through the municipalities. 1 notice that the Minister of Public Works (Mr. Nielsen) has just sat up and is listening-I thought 1 might have put him to sleep by now-and 1 would like to suggest to him that he discuss this matter with his cabinet colleagues because

although there are a number of public works programs needed some are not necessarily federal.
The municipalities are equipped through their own experience, administrative capabilities and so on, and knowledge of the needs, to employ a great deal of money very quickly in programs such as pollution control and programs for roads, streets, lighting, sewers, and you name it, buildings, arenas, and the list goes on. These sorts of projects across Canada would provide great incentive to improve our municipalities and at the same time provide some hedge against the extremely destructive unemployment level this winter. 1 put that forward for the minister's consideration. It is a positive suggestion, but not a new one. I know that a lot of people will say that it is the same old nonsense and they have heard it before.
We are told we have to bite the bullet. The point is who will bite the bullet? Are MP's going to bite the bullet? Are corporation directors going to bite the bullet? Of course not. While we are in the Parliamentary Restaurant biting the filet mignon, the unemployed people in the street will be biting the bullet. 1 think that the government should consider those things and not be so hard and cruel and so bottom-line, because it makes people sick and it makes all of us on this side of the House sick, that the government could give away millions of dollars to pirates and buccaneers.


Lorne Edmund Nystrom: Buddies.


Mark Willson Rose: Yes, somebody has said buddies. The government gives away billions of dollars to these pirates and buccaneers while at the same time it is hard, cold, and unyielding to people who really need opportunities for work.
We need Winter Works projects and responsiveness from the government. I ask the government to restore these programs until they can develop the $300 million job-creating program for youth that they promised during the election campaign, and about which we have not heard a sound since the election.
1 would like to discuss clause 2, briefly, which allows the government to borrow abroad in foreign currency and to repay that money in the same currency. It allows the government to borrow up to $7 billion. It allows the government to borrow almost the precise amount which the former minister of finance, the hon. member for Saint-Maurice (Mr. Chretien) used a year ago to prop up the Canadian dollar. I do not want to argue at the moment about whether that was a wise decision. I happen to think that it was not a wise decision, but there are a number of people in this House who believe otherwise.
Nevertheless, we borrowed $7 billion to prop up the Canadian dollar and it did not work. So what it means is that we have $7 billion to repay at the rate of $10 million a year, adding to our balance of payments deficit. Some economists are saying that it is not the money that is owed by the nation, the national debt which is the problem. While our children will be responsible for that debt, if we borrow from ourselves, they are also beneficiaries of the profits accruing from that debt's interest.
October 23, 1979	_______ COMMONS
For example at the end of World War II we had the highest national debt in history and subsequently the greatest prosperity. But we owed it to ourselves. The point that I am making here is that the $7 billion which was borrowed abroad by the former minister of finance, and the $7 billion borrowing which is proposed through this bill by the current Minister of Finance, constitute a very dangerous step because it means that massive amounts of money will be flowing out of the country to service that debt.
At the same time the argument is being used all the time that Canada's interest rate must be higher than that of the United States so that investment capital will flow into Canada. That theory has not worked either because if one looks at the figures of the last year, he will find that, despite our high interest rates, more money in terms of investments has gone out of the country than has come into it. I suggest that the $7 billion which the former government borrowed and the $7 billion which this government proposes to borrow could have been used to purchase the majority of the petroleum industry in this country for Canadians. If one is ideologically opposed to have that industry owned by the state, it could at least have been purchased through the use of that money from foreigners and owned by Canadian entrepreneurs.
I serve this as a particular warning to the Minister of Finance, and plead that he does not rush out to the money markets of the United States to borrow this $7 billion even though this bill would authorize him to do so.
We in this party would feel much better if this money were used to buy back our country, to stimulate development or, as the hon. member for Winnipeg North (Mr. Orlikow) suggested, for R and D to create jobs. If that were the case, my party could support it with some, if not a great deal, of enthusiasm and despite the concerns which I have expressed. But at the moment with all the information before us tonight, which is meagre at best, we are not really enchanted with the bill.
I hope that when the minister does get around to telling us how he intends to use this money, it will be used in a way that this party can approve of because, regardless of the fact that we are sometimes critical, we too want this country to go ahead, we too want to create full employment, we too want to see our country owned by Canadians, and we too want to see this government succeed in improving our nation. With that, 1 will conclude my remarks and prepare the way for someone else who might have at least 20 minutes to speak, and I hope that it is the minister.


Mr. Deputy Speaker:: Order, please. Some time this evening the hon. member for Thunder Bay-Atikokan (Mr. McRae), seconded by the hon. member for Timmins-Chapleau (Mr. Chenier), moved a reasoned amendment while the Acting Speaker was in the chair. The latter did not make a decision but suggested that a decision should be made tomorrow. 1 have therefore arranged to be here early, before the minister takes the floor, so that a decision can be made before we conclude the debate on second reading of this bill.
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The motion of the hon. member for Thunder Bay-Atikokan reads as follows:
That this bill be not now read a second time but be stood until the Minister of Finance agrees to appear before the Standing Committee on Finance, Trade and Economic Affairs at the pleasure of that committee and preceding the appearance of the Governor of the Bank of Canada.


Mr. Pinard:: 1 rise on a point of order, Mr. Speaker.


Mr. Deputy Speaker:: The hon. member for Drummond (Mr. Pinard) on a point of order.


Yvon Pinard: Mr. Speaker, are we to understand that you are ready to make a decision without hearing the arguments on the admissibility of the amendment?


Mr. Deputy Speaker:: I was not there yet. I should say that even if the Acting Speaker who was then in the chair suggested that he had some reservations, he did not mention what they were. As for myself, I had the opportunity to consider the precedents and I want to advise hon. members that on four points at least I can hardly accept the amendment now under consideration. I could refer hon. members to the various sources of reference, but first I will merely indicate that, in my opinion, the amendment now under consideration is inconsistent with different principles which are the basis of reasoned amendments and the first principle which should identify such an amendment is that it should be declaratory and adverse to the bill.

Hon. members are referred to two different citations, Erskine May's nineteenth edition, and Beauchesne's Parliamentary Rules and Forms, fifth edition. The first condition that has to be attached to a reasoned amendment is that it may be declaratory of some principle of the bill or adverse to the bill. That is found at page 499 of Erskine May and citation 744 of Beauchesne. On that ground alone the amendment could be rejected.
There is another reference that suggests a reasoned amendment should not set a condition for second reading of a bill. At page 500 of Erskine May's nineteenth edition paragraph (2) reads as follows:
The amendment must not be concerned in detail with the provisions of the bill upon which it is moved, nor anticipate amendments thereto which may be moved in committee (k); nor is it permissible to propose merely the addition of words to the question, that the bill be now read a second time, as such words must, by implication, attach conditions to the second reading.
Hon. members will find similar citations in Beauchesne who referred to more recent times, as reported in Canadian Journals. At page 226 of the fifth edition of Beauchesne, citation 745(3) reads as follows:
It is not permissible to propose merely the addition of words to the question, 'That the bill be now read a second time', as such words must, by implication, attach conditions to the second reading.

October 23, 1979
538_______
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Beauchesne cites this decision from the Journals of February 17, 1970, and April 23, 1971.
If hon. members read citation 749 on the next page they will find it is more precise and reads as follows:
An amendment to defer second reading of a bill until the subject matter has been considered by a committee is out of order in that it does not oppose the principle of the bill but merely attaches a condition.
To my mind, by proposing that the bill be not now read but that it be read only on a certain condition, such amendment does not indicate to me that it opposes the principle of the bill but merely that it attaches a condition. At the same time, however, the amendment anticipates the committee stage where such a decision could be made. I do not think that the hon. member by his amendment can give that kind of direction to the committee.
This being said, I am ready to hear opinions from hon. members, but 1 am sure I will have great difficulty in accepting the amendment on the basis I have just stated.


Paul Edmund McRae: Mr. Speaker, 1 should just like to raise one small point. We realize, of course, that this is not a substantive amendment. We did not intend in any way to change the bill. We realize we cannot do that on second reading. We feel that it is very important, however, in a borrowing bill that the Minister of Finance (Mr. Crosbie) should explain what he is doing. We think at this particular point that the most vital part of the background to this borrowing bill is his appearance first before the committee, so that he can explain the events of the last several months which led to this borrowing bill. It is because he refused to come to the committee before the Governor of the Bank of Canada that we made this motion.
[ Translation]


Yvon Pinard: Mr. Speaker, the hon. member who has just spoken could well have proposed by way of an amendment what is commonly called, in Beauchesne's terms, a six months' hoist. Now, we have to know who proposed that six months' hoist during the second reading of the bill and its referral to committee?
It seems to me it would have been irresponsible to do so at this time, given the circumstances, because we on this side of the Flouse do not intend to delay the passage of the bill. We do not want at all to prevent the government from having authority to borrow the funds which are needed to administer, except that the hon. member who moved the amendment acted in a much more responsible manner than permitted by the Standing Orders and by the tradition. When he suggested in his amendment that second reading of the bill be deferred until the Minister of Finance finally appears before the Standing Committee on Finance, Trade and Economic Affairs, we presumed that the latter would have the courage to do so before six months. But when we heard his answer today, Mr. Speaker, when he said that he would appear before the finance committee when he is in Ottawa, we thought that it did not sound very serious from a government which administers public funds.

The purpose of this amendment was, on the one hand, to avoid postponing the second reading of this bill to six months from now and, on the other, to show we are responsible people by requiring that before this bill is passed on second reading the Minister of Finance have the decency not to refuse to appear before the finance committee-


Mr. Deputy Speaker:: 1 must nevertheless interrupt the hon. member for Drummond (Mr. Pinard). I could have intervened when the hon. member for Thunder Bay-Atikokan (Mr. McRae) was making his remarks. In brief, what he has just said is somehow a continuation of what the hon. member for Thunder Bay-Atikokan suggested, meaning that they are debating the substance of the matter, not the point of procedure before us. I think 1 do not have to make a ruling on the appearance or non-appearance of the minister before the finance committee at such and such a time, but 1 must at this time make a ruling as to whether the amendment being proposed by the hon. member is in accordance with the rules and practices of this House. If the hon. member reads certain citations by our authors, he will note that in recent years proposed substantive amendments were more and more intended in their form to postpone passage of a bill for six months. They took that form because it is about the only one allowed in our system. As long as the procedure remains unchanged, 1 must apply the rules, and if I refer to Beauchesne's citation 744, as I already suggested in English, substantive amendments that must be introduced in the form of a motion may take various forms, and the first one is that they must constitute a declaratory resolution on some principle contrary to those in the bill itself. So the amendment introduced by the hon. member does not run counter to any part of the bill. It quite simply lays down a condition requiring the minister to appear before the committee over which I, as Speaker, do not have jurisdiction, that committee being also able to call the witnesses it wants and organize its work as it wishes. So as far as I am concerned, unless the hon. member for Drummond has other points to make, I would tell him that what he just said does not convince me at all to accept his amendment.


Yvon Pinard: Briefly, Mr. Speaker, my argument is as follows: you have quoted from Beauchesne, citation 744, but if we read from the fifth edition, citation 740-

-there are three types of amendments that may be proposed at the second reading stage of a bill. These are, first, the six months' hoist-

follows: if the Minister of Finance agrees to appear before the committee before six months, then we remain within the spirit of what is allowed under the rules to move an amendment, and I wonder why the Chair favours or seems to favour that form of amendment and fix a six-month time limit. If, according to the rules, we are allowed to delay the second reading of a bill up to six months, 1 do not see why we cannot be allowed to move an amendment to suggest a condition under which second reading could take place before the six months. We on this side of the House have presumed that the Minister of Finance will be courageous enough to appear before the finance committee well before those six months.
Now, as a solution, it would be that much simpler if the Minister of Finance were to stand up tonight and say that he is prepared to appear before the finance committee ahead of the governor of the Bank of Canada.


Mr. Deputy Speaker:: I realize that it is not easy to move a reasoned amendment according to Standing Orders. I have been in the chair many times in recent years and very few hon. members, except perhaps the hon. member for Edmonton West (Mr. Lambert), once, and also I believe the hon. member for Peace River (Mr. Baldwin) on another occasion, have managed to find a way to move such an amendment which was acceptable.
However, 1 must still apply our Standing Orders, which are based on the fundamental principle that the amendment must oppose the principle of the bill, and secondly, that the amendment must not include any condition aimed at preventing second reading of the bill. In the present case, the amendment does exactly what it should not do on both counts. There are also the other questions that 1 have examined concerning the operation of the committees and the fact that the hon. member has not succeeded in convincing me and did not even work very hard at it. 1 must therefore reject this amendment.


Herb Breau: Mr. Speaker, 1 would like to take a few moments to speak about Bill C-10, but first of all I wish simply to say that I hope that the Minister of Finance (Mr. Crosbie) and the government will learn something from what has happened in the House today. Indeed, Mr. Speaker, if the Minister of Finance and the government think that they will be able to play the clowns and give replies such as the one they gave this afternoon to the hon. member for Vaudreuil (Mr. Herbert), who had asked a very legitimate question after our party had stated that it was ready to grant unanimous consent to allow a motion to be moved which would really have helped the President of the Privy Council (Mr. Baker) to administer better the affairs of the House, then they are wrong. We said that we were ready to agree to that motion. We had granted unanimous consent even though we had not been notified beforehand. A private member, the hon. member for Vaudreuil, rose because he wanted to ask the following question: can the Minister of Finance now say whether he will
Business of the House
testify before the finance committee and accept his responsibility for the financial policies of this country? Will the Minister of Finance tell the committee what he will do about the monetary policy of the governor of the Bank of Canada?
The Minister of Finance only played the clown and replied, "1 shall come to the committee when 1 have the time and when 1 am in town". 1 must tell the Minister of Finance that if he wants to make some progress in the House, if he wants his colleague, the President of the Privy Council to be able to administer the affairs of the House efficiently, he should treat the members of Parliament as equals and reply to the questions asked by members on this side of the House like a Minister of Finance should do. I would also like to tell him that because of this, I have noted this evening that Bill C-10 requests the approval of the House to borrow $7 billion. I believe that if this is the attitude the government will adopt when myself, having been a member for eleven years and having taken part for five or six years in the works of the Standing Committee on Finance, Trade and Economic Affairs,
1 had the opportunity to see the hon. member for York-Peel (Mr. Stevens), the hon. member for St. John's West himself and other Conservative members at the time when they formed the opposition, come before the Standing Committee on Finance, Trade and Economic Affairs and, facing a bill as simple as this one, after the House of Commons had already accepted the principle of giving authority to borrow the money, spend hours, days, and weeks in discussions, I want to tell the Minister of Finance today not to think that other members on this side of the House and myself are going to accept stupid answers, answers from a Minister of Finance who thinks he can afford to show arrogance in the House of Commons like the Prime Minister (Mr. Clark) last week who arrived-


Mr. Deputy Speaker:: Order.


Herb Breau: Mr. Speaker, may 1 call it ten o'clock?


Mr. Deputy Speaker:: Order. Perhaps it is a good time to call it ten o'clock.


BUSINESS OF THE HOUSE
Mr. Lefebvre:: Mr. Speaker, 1 rise on a point of order. I should like to put a question to the government House leader.
Can the government House leader tell us what the order of business will be for tomorrow?


Walter David Baker: Mr. Speaker, we will be proceeding with amendments to the Post Office Act tomorrow. 1 presume we will not have the intemperate display of obstruction we observed from hon. members just a few moments ago,

October 23, 1979
Adjournment Debate
given the fact that what the House is really doing now is dealing with the former government's own bill. It is like spanking your mother; it is not supposed to be done.


Thomas Lefebvre: If the Minister of Finance (Mr. Crosbie) has learned anything tonight and he makes a commitment, he will see that his clowning days are over. Now that he is in a responsible position, he should start acting as such.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Deputy Speaker:: Order. We are already proceeding with the adjournment motion and perhaps the House would allow the hon. member for Mercier (Mrs. Hervieux-Payette) to speak to the question before us this evening.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mrs. Celine Hervieux-Payette (Mercier):: Mr. Speaker, I come back to a question I put in the House, last Friday, to the minister in charge of the Canada Mortgage and Housing Corporation (Mr. MacKay). When I asked him for information of the Matthews task force report, he answered that the report would be politically neutral and objective because Mr. Matthews had married his daughter to a Liberal. I am sorry, Mr. Speaker, but 1 cannot accept that as a serious answer to so important a question. 1 therefore ask the minister, this evening, when he will release that report and what groups were heard, since 1 asked Friday who on the task force or what groups spoke on behalf of the humble people, and not in favour of both contractors and big business? I have heard rumors, Mr. Speaker, to the effect that the minister intended to change the president of the Canada Mortgage and Housing Corporation, very persistent rumors indeed which are working havoc again in Quebec and continue the witch hunt about political appointments in senior positions within Crown corporations. Mr. Speaker, I ask the minister whether the incumbent president has completed his term and fulfilled his mandate with the Canada Mortgage and Housing Corporation, or else whether he is leaving to make room for a future president from Quebec.

Rumor has it that Mr. Mario Beaulieu would be offered the job. I ask the minister whether he could confirm that Mr. Beaulieu will be the next president of the Canada Mortgage and Housing Corporation. From there on, one obviously wonders whether the Canada Mortgage and Housing Corporation will remain as we now know it today.
1 should like to go back briefly on the important role played by the CMHC on the social, economic and national level. We in the Liberal party recognize that for many years, together with the private sector, the government has developed a housing policy which is endorsed by OECD as one of the best in the world.
It enabled low-income families as well as senior citizens to find decent housing, even if this task is not quite over. It also made it possible to draft national standards guaranteeing the quality of construction in Canada. In this respect, Mr. Speaker, the possible elimination of the Canada Mortgage and Housing Corporation makes me wonder about the necessity for the National Building Code. As you know, enormous efforts and intensive negotiations have taken place to standardize building materials as much as possible. Would it not be possible that the disappearance of the Canada Mortgage and Housing Corporation would create even more regional disparities and increase building costs by eliminating the important function of the National Building Code?
We should remember that the corporation was created in 1946 to administer the National Housing Act. Its responsibility was to co-ordinate and support housing programs after some very gloomy years. At that time we had been through a depression. Now we have a recession and I think that the role of the Canada Mortgage and Housing Corporation is even more crucial now than at any other time in the last ten years.
As I said earlier, Mr. Speaker, there is still much left to do in the social housing field. About 400,000 Canadians have yet to find decent housing. What are we going to do in the absence of Canada Mortgage and Housing Corporation if we place the faith of those 400,000 Canadians in the hands of the private sector? I believe that it is in conjunction with the government that we can elaborate a national housing policy.
The Canada Mortgage and Housing Corporation did a tremendous job. Let me recall, Mr. Speaker, that in 1950 it had some 2,000 employees. In 1978, some 30 years later, it had 3,800 employees to serve all of Canada. Realizing that the corporation manages $10 billion and that some three million houses are covered by its services, I feel it is very well' managed and for this reason it should remain a basic tool of development for our economy.
As you may know, the previous government channelled private funds, integrating as it did the role of private enterprise with that of government. On the other hand, housing policy
October 23, 1979

was not one of laissez-faire and letting things go adrift. It was planned by the government.
Suffice it to mention, Mr. Speaker, that in the case of housing mortgage insurance alone the Canada Mortgage and Housing Corporation charges only $35 while the private sector is currently charging between $200 and $400. Is this the way small-income citizens and the 400,000 Canadians who need better housing will achieve ownership? Does the minister know that in the last few years a quarter of a million new housing units were built, and those 250,000 units created 250,000 annual jobs?


The Acting Speaker (Mr. McCain):: Order, please. I regret to advise the hon. member that her time has expired.


Céline Hervieux-Payette: Mr. Speaker, may I have another moment? I have just one more sentence.


The Acting Speaker (Mr. McCain):: Well, just seconds, yes.


Céline Hervieux-Payette: Would the minister now tell us whether or not he will dismantle CMHC?


Hon. Elmer M. MacKay (Minister of Regional Economic Expansion):: Mr. Speaker, I welcome the opportunity to come here this evening and respond to the hon. member's questions.
I will tell her at the outset that we are certainly not going to dismantle CMHC.
I want to explain to the hon. member that I do not want her to think I was being facetious the other day when she asked her question. I thought she was putting her question in a rather facetious way herself when she referred to the fox in the chicken coop metaphor, and I am sorry she did not have a chance for a supplementary.
I want to assure the hon. member that, as I said at the outset, we will not do anything to seriously impair or damage CMHC. Quite the contrary, we hope to strengthen the organization. The hon. member, who obviously knows a bit about housing, will recognize that the projections for future demand for housing will have changed, as demography has shown. In future we may be looking more on the question of rehabilitation or renovation of housing, questions such as revitalizing the urban core. The days of urban or suburban sprawl are gone because of energy conservation.
The matters she raises with respect to the task force report and when it will be made public, I can answer as follows. I have not yet seen the final report. When I do, 1 intend to study it carefully. It will be submitted to cabinet, and indeed so will the considered opinions of CMHC with respect to the housing strategy. It is my intention to make this report public as soon as it has received the proper evaluation.
Again I want to assure the hon. member that both we in the government and CMHC recognize our social responsibilities, and in no way do we intend to de-emphasize or diminish this
Adjournment Debate
commitment of providing and sustaining affordable shelter to those Canadians who do not have access to it.
I agree with her that there are nearly one half million families who pay over 30 per cent of their income for shelter. This group includes elderly people, single parent families, and young Canadians.
Hon. members, including the hon. member who raised the question, will have an ample opportunity to contribute their thoughts and their expertises to this government's housing policy. I think she would agree that my predecessor last year in Edmonton started the process of disentanglement, but what we are doing-


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


REGIONAL ECONOMIC DEVELOPMENT-DREE COMMITMENT RESPECTING SYDNEY STEEL CORPORATION
Andrew Hogan: Mr. Speaker, in reply to my first question concerning the matter of $50 million promised for Sysco during the last election, the minister mentioned the following:
Considerable moneys in the past, which were allocated, were not managed or used too wisely.
The minister, of course, is correct in his observation, but there is a danger that newspapermen and others will think the federal government has given much more money than it actually has to the provincial publicly-owned steel plant in Sydney since Black Friday on October 13, 1967. The fact is that for almost 13 years what the federal government allocated in grants to the steel plant until the recent $6 million from the present government, amounted to a combined sum of $25 million to $30 million. Before the 1974 election, the federal government gave a loan guarantee of some $70 million to the steel plant which, while very helpful, is not the same as a grant.
Of course it can be argued that the Nova Scotia government owns the Sydney Steel plant, but it was obvious to some of us that the logical buyer, once Hawker Siddeley pulled out, should have been the Cape Breton Development Corporation which was set up to rehabilitate Cape Breton's economy. With all of Devco's faults, it would have done a better job than the provincial government of Nova Scotia which appeared not to know which end was up in the hiring of top management personnel for the steel plant.
The minister is, of course, quite right, as everybody in Nova Scotia now knows, about the waste and mismanagement at the steel plant which has brought it literally to its knees, with an albatross of some hundreds of millions of dollars in debt.
I should like to ask the minister if he could find out for me what the actual debt is and how much of it is a result of strictly operating deficit and how much is interest payments for the loans by the corporation. On April 28, 1979, Mr. Tom Kent, the then Sysco president, was quoted in the Cape Breton Post as saying that the debt was $166.4 million. Sysco's loss for the last fiscal year was alleged to be $64.2 million, which
542

October 23, 1979
Adjournment Debate
included $29.2 million in operating losses, $22 million in interest charges, and $12 million in depreciation.
In passing, Mr. Speaker, I want the minister to know that many of the supervisory, middle management personnel and union members at the plant want to know why one whom they consider as very largely responsible for the present situation at Sysco is still kept on as a member of Sysco's board.
In my supplementary question I asked once again about the use of the submerged injection process at Sydney. It was a failure in the past and has been rejected by Stelco and U.S. Steel. Is it not true that the Davy-Ashmore report of 1971-72 recommended the tried and true basic oxygen furnace technology? The modified type is called Q-BOP and can cook a batch of steel faster and cheaper because, among other things, it does not need a special building and certain auxiliary services which a complete basic oxygen furnace shop would need.
The continuous casters are a later technology and assume the use of either of the above oxygen processes. Sydney Steel, to my understanding, is the only steel plant in the world with continuous casters tied to open hearth-hardly a way, 1 would think, to rehabilitate such an operation and attempt to make it competitive. I realize that we have lost the golden years since 1971 in an attempt to turn the plant around. The debt composition has to be rearranged or it will surely go under.
My understanding is that there was a request by the province of Nova Scotia to have the previous federal government absorb or wipe out at least the $70 million loan mentioned earlier, and they refused to do that. Is that correct? Some say there are no precedents for doing such a thing. It is my understanding that the provincial government of Premier Buchanan had promised to guarantee the borrowing of $100 million by Sysco if Ottawa were to write off the $70 million. I am sure an argument could be made to support the no precedent conclusion. It is my understanding-and the minister can correct me if I am wrong-that the last minister responsible for DREE negotiated from that position. However, the fact is there is ample precedent. In 1978 some $800 million of CNR debt was transferred by the government into common shares. Thus the debt and interest charges were cancelled.
In March, 1977, $625 million was cancelled from the St. Lawrence Seaway debt principle. Bill C-3 authorized the cancellation of some $600 million of Air Canada debt. The cancellation of airport debts for revolving fund airports-for example, Dorval, Pickering, Malton and Mirabel-is to be done in a new supply bill and will cost $660 million. Finally, the government is planning to cancel $742 million in debts accrued by the National Harbours Board. Of course this has not yet happened.
The net result of these debt cancellations is that all areas of transportation are more profitable and thus would be easier to privatize. The debt cancellation is accomplished by having the

Treasury Board absorb the debt. All the operations noted here are owned by the federal government which makes debt cancellation a simpler process. Sysco is provincially owned, but I cannot see how the assumption by the federal government of the debts of a provincially-owned company should cause serious problems. I think the minister will recognize that Sysco has been the subject of much study. In fact it has been so studied that the reports would fill a section of a normal library. It is time for all concerned to get off the pot and to modernize the plant, instead of continually keeping the people in uncertainty and despair in that area. They deserve better.


Elmer MacIntosh MacKay: Mr. Speaker, I welcome the opportunity to receive in the House of Commons this evening the comments of the hon. member opposite who is very concerned with the subject he has raised, as I am myself. We both recognize that there is perhaps no greater concern to our province from an economic standpoint.
First, I am glad to give to the hon. member my assurance that I will obtain a complete breakdown of the debt structure and meet with him to discuss it. It is not as straightforward as it might seem, because of the nature of the debt. But I certainly agree with him that there is ample precedent for writing off debts of various kinds in the jurisprudence of the federal government over the years.
The hon. gentleman did raise in his question specifically the submerged injection process. Perhaps I should put on record at this time that this process, as the hon. member knows, relates to introducing oxygen below the surface of the hot metal as opposed to introducing the oxygen or air from above on to the hot metal. Apparently this has caused difficulties in the past. I am assured, as a result of inquiries I had made, that none of the $7.2 million was used for any purpose related to the submerged injection process, but rather to rebuild certain parts of the open hearth furnaces and other structural work.
I should like to assure the hon. member opposite that, as far as our administration is concerned, we have a continuing commitment to doing what we can to modernize and improve conditions at Sysco. I think he would recognize that while it might be desirable to do so quickly, from a physical point of view it is not quite that simple, either.
First of all we must try to undo and, to some extent, rehabilitate some of the symptoms which were caused during the past few years of mismanagement. Once this is accomplished I am certain that we will, in accordance with the knowledgeable requests from management, and in accordance with the advice received from the work force, which is equally important, which is a very dedicated work force and which has in effect subsidized that plant over the years, as indeed the work force has in Trenton, Nova Scotia, at another important heavy industrial undertaking, and with the best advice we can get from that management and the work force, and under the instructions of the Nova Scotia government, undertake our responsibilities to the people of Cape Breton and of Sysco.
October 23, 1979

I am not so sure, although it is a matter for future discussion and debate, that Devco would necessarily have been able to effect what the hon. member suggests it might have, but conditions in Devco are improving because of the increased prospects for the use of coal. It may be that the member is correct. In any event, 1 want to assure him again that he has my co-operation in making available to him the kind of
information he wants and, indeed, to all members of the House. 1 share his concern for the rehabilitation and eventual modernization of this very historic and necessary steel mill.


The Acting Speaker (Mr. McCain):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock p.m.
Motion agreed to and the House adjourned at 10.21 p.m.

Wednesday, October 24, 1979