1979-02-14

ROUTINE PROCEEDINGS


Mr. David MacDonald (Egmont):: Mr. Speaker, I rise in conformity with the provisions of Standing Order 43. In light of the inability of the federal government to explain its unilateral termination of support for the land registration and information service, and its failure to complete its obligations to the three maritime provinces for an up to date land registry system, I move, seconded by the hon. member for Dartmouth-Halifax East (Mr. Forrestall):
That the Prime Minister immediately indicate the increased cost to these three provinces to complete the changeover to this new system or the reversal to the former one, secondly, the lost revenue which would have been forthcoming in the development of a new export technology for the region and, finally, the number of jobs lost in the exodus of many highly trained personnel.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I have a motion under Standing Order 43. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House, in light of the failure of the Argentine to subscribe to the nuclear non-proliferation treaty, the fact that the Canadian government seems to be entirely dependent on the information from the government of the Argentine, without any system of monitoring infractions, and the AECL now proposes to provide additional reactors or components of them which can be used for the production of plutonium or nuclear weapon material, urges the Canadian government to refrain from authorizing AECL to proceed with any further sales of reactors or components thereof until the Argentine has accepted the nonproliferation treaty or provided an adequate means of monitoring the use of reactors and components provided by Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL SECURITY
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, my motion under the provisions of Standing Order 43 involves the security procedures policy of the federal government.
In view of requirements and procedures involving security as set out in a government security administration manual, section 11-3, which is several years old, and in view of the obvious need to rethink security matters because of the conditions over which several solicitors general have presided during the past few years, I move, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That the Solicitor General or the Prime Minister indicate on motions, soon, to what extent change of marital status or residence within the past ten years in foreign countries, or having close relatives living within the borders of foreign nations, still impedes an individual obtaining security clearance, so that at least Canadians will know some of the rules which can affect them so drastically.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Paproski:: Norm Cafik said no.


CENTRAL MORTGAGE AND HOUSING CORPORATION
Mrs. Jean E. Pigott (Ottawa-Carleton):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.

February 14, 1979
In light of the growing reports in all areas of the country about alleged violations of the National Building Code and charges that CMHC is being forced to operate on a system of patronage, and in view of the serious lack of control in the financial and management procedures of Central Mortgage and Housing Corporation, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House immediately call on the Auditor General of Canada to undertake a detailed inspection of the financial management and controls of CMHC for the last fiscal year and, further, that this House direct the Minister of State for Urban Affairs to make an immediate reference to the standing committee to investigate and examine the reports of the series of articles in the Hamilton Spectator entitled "CMHC, the greatest national drain".


Mr. Speaker:: Such a motion can be presented for debate only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Steve Eugene Paproski: Pierre said no.


BILINGUALISM
Mr. Rene Matte (Champlain):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to introduce a motion dealing with an important matter of pressing necessity.
In view of the consequences of the Official Languages Act and since for years this government has based its reputation in Quebec and in French Canada on its intention to implement bilingualism; in addition, since there was no possible justification for the substantial cuts to the budget of the language branch and that such a decision was necessarily interpreted as an admission of the government failure in that endeavour, I move, seconded by the hon. member for Villeneuve (Mr. Caouette):
That the President of the Treasury Board explain the major reasons which prompted him to reduce the staff of the language programmes branch by 33 per cent while the reductions for the entire civil service were set at 2 per cent, and that this House direct the minister to suspend that decision until a proper inquiry shows that it is sound.


Mr. Speaker:: Pursuant to the provisions of Standing Order 43, such a motion can be presented only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CANADIAN CONSTITUTION
Mr. Donald J. Johnston (Westmount):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
Considering that the major socioeconomic change in Canada since 1867 has been industrialization and urbanization, that the majority of people of Canada are metropolitan dwellers and that the Science Council has estimated that 90 per cent of the Canadian population will live in an urban environment by the year 2000, that municipalities are required to provide an ever-increasing number of essential services to our population, and that municipal governments are closer to the people and provide more essential services to their respective populations than any other level of government, I move, seconded by the hon. member for Stormont-Dundas (Mr. Lumley):
That this House call upon provincial governments to invite the Canadian Federation of Mayors and Municipalities to participate in the ongoing process of constitutional reform with a view to entrenching powers in the constitution so as to provide municipalities with the powers and revenues necessary to permit them to effectively discharge their responsibilities and to provide the services expected of them by the Canadian public.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Trudeau:: Paproski said no.



ORAL QUESTION PERIOD


Mr. Howard Crosby (Halifax-East Hants):: Mr. Speaker, I have a question for the Deputy Prime Minister, in the absence of the Minister of Energy, Mines and Resources.
In the wake of reliable reports that there are to be substantial cutbacks in imports of crude oil and that Imperial Oil will be reducing supplies to the east coast refineries by 25 per cent, and having regard to assurances given in the House by the Minister of Energy, Mines and Resources that the situation is under control, will the Deputy Prime Minister tell us whether cutbacks in imports of foreign crude have occurred or are likely to occur? In any event, what action has been taken by the government to ensure that there are adequate oil supplies?
February 14, 1979


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: 1 regret 1 must advise the hon. member that I am not Acting Minister of Energy, Mines and Resources, nor am I his parliamentary secretary.


Howard Edward Crosby: May I, then, ask the Deputy Prime Minister whether he and his hon. friends are sufficiently organized over there to answer the question either through the acting minister or some other minister? I directed a question to the Deputy Prime Minister, Mr. Speaker, but if he is unable to answer perhaps he could suggest another member of the ministry who might be able to answer.


Mr. Forrestall:: Mr. Speaker, I shall raise a question of privilege on this at three o'clock.


Mr. Pierre Bussieres (Parliamentary Secretary to Minister of Energy, Mines and Resources and Minister of State for Science and Technology):: Mr. Speaker, in answer to the question of the hon. member, the Minister of Energy, Mines and Resources clearly indicated in the last few days what our various plans of action are to remedy our import difficulties, and more specifically the plan for oil swaps with the United States. That plan is being applied.


Howard Edward Crosby: I will direct my supplementary question to the parliamentary secretary. I appreciate that plans have been outlined, but I am asking whether there have been cutbacks and, if so, what is the extent of those cutbacks? Are there likely to be cutbacks in delivery of foreign crude oil to east coast refineries in the near future?


Pierre Bussières: Unfortunately, Mr. Speaker, I am not in a position to give the hon. member exact figures. Still, 1 can tell him that the negotiations are going on, the situation is being monitored and the plan is being applied.


Hon. Robert L. Stanfield (Halifax):: I should like an assurance, preferably from the Deputy Prime Minister, if not from the Parliamentary Secretary to the Minister of Energy, Mines and Resources, that this announced reduction of between 25 per cent and 30 per cent in crude oil being imported by Imperial Oil into Nova Scotia and Quebec is, in fact, being made up from other sources.


Pierre Bussières: Mr. Speaker, I am unable to give that assurance to the hon. member. I shall obtain the information requested and the minister can give it to him tomorrow.


Robert Lorne Stanfield: Nobody over there is able to give any assurance. I should like to ask who is responsible in the government for making certain that Nova Scotians and other Canadians will receive a fair allocation when oil imports are cut back by a
Oral Questions
multinational corporation like Exxon. Is anybody over there accepting responsibility for this?


Pierre Bussières: Mr. Speaker, as I just said and as the minister already indicated the department is closely monitoring the situation and we are sure that there will not be any shortage of crude oil for the Canadian people.


GOVERNMENT INTENTIONS RESPECTING EXPORTS OF NATURAL GAS TO UNITED STATES
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Prime Minister. Yesterday, in New York, the Minister of Finance indicated that the Government of Canada might be prepared to increase its commitment for sales of natural gas to the United States following the significant gas discovery at Elmworth, Alberta.
Can the Prime Minister tell the House if the Minister of Finance was stating government policy in New York? In short, is the government prepared to increase exports of natural gas to the United States on anything other than an emergency basis?


Pierre Elliott Trudeau: Mr. Speaker, that would depend on the report to be made by the National Energy Board. As the hon. member knows, it is the policy of the government to export only that which is surplus to present and foreseeable Canadian needs. Once we have a report on that from the National Energy Board, we will be able to make a policy decision. However, we have in the past and will in the future have a policy to export what is surplus to our needs, particularly if it is needed by our American friends.


John Edward Broadbent: Mr. Speaker, quite apart from what the National Energy Board might conclude after the hearings it has to have on this subject, and after its meditation, I would like to obtain a specific commitment from the government.
Is the Prime Minister aware that the amount of resources leaving Canada in raw form increased from 15 per cent in 1951 to 49 per cent in 1977, representing a net loss, if we had been processing those resources here, of thousands of jobs; and, if so, will he agree that quite independent of what the NEB recommends, the Government of Canada should not agree to increase our exports of natural gas to the United States but should, instead, at long last establish a policy which will maintain that natural resource here and develop a secondary petrochemical industry based solidly on it?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member goes back some years to show a statistical trend. I remind him that the premiers of Saskatchewan and Alberta were in the city toward the beginning of this decade, begging the federal government to help them export to the United States, which we did. So, naturally, those figures have to be viewed in the historic context of the premiers of those western provinces wanting to export.
3216

February 14, 1979
Oral Questions
We now have a different view of the energy picture following the OPEC crisis, but our basic policy remains the same: we do not export energy unless it is surplus and in excess of Canada's present and future needs. This policy is established by a quasi-judicial body, the National Energy Board, whose report we await.


John Edward Broadbent: Mr. Speaker, I am sure the Prime Minister will agree that, by definition, surplus is arbitrary in nature. It used to refer to a 25-year period. It may or may not have included reference to the establishment of a petrochemical industry in this country. According to my definition of surplus, we do not have natural gas to export if we take the view that we should be keeping it at home for the development of secondary industry.
Would the Prime Minister agree that we should use any so-called surplus either for the establishment of a petrochemical industry here in Canada or for the rapid replacement of oil on the east coast with gas, so that we can have an assured supply of energy for Canadians living in that part of our country-but not export it?


Pierre Elliott Trudeau: Mr. Speaker, by referring to the transmission of gas to eastern Canada, I am happy to see that the New Democratic Party is espousing a policy which is promoted by my party, the building of an Atlantic and Quebec pipeline.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The hon. member says he does not accept the idea that there is a surplus, and he says that therefore we should not export. That is our policy, too. If there is no surplus, we will not export. But whether there is a surplus or not will be determined by the National Energy Board. If the hon. member's hypothesis that there is no surplus is correct, then there will be no exports. But if there is a surplus, we will consider what we will do with it.


EXTERNAL AFFAIRS
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. A few days ago, I asked him this question, and he told me he would take it as notice and he would answer later. My question was as follows: on January 1, 1979, an agreement was conclud-

ed between Canada and the United States whereby any Canadian who has a police record, no matter how trivial or how old, is forbidden to enter the United States unless he obtains a special authorization certificate. Can the minister substantiate this agreement with the United States and is it a one way agreement or does the same apply to an American citizen who wants to come to Canada?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, the hon. member should have by now a written response to that question. I regret the fact he has not got it. I suggest it is too complex a matter to describe orally, but if it is not in his hands by later this afternoon, I will look into it personally.


Léonel Beaudoin: Mr. Speaker, I thank the minister for his answer, but to clarify the situation further can he tell us whether he intends, if it exists, to re-evaluate that situation which has been going on for long enough with regard to Canadian citizens who want to go to the United States?


Donald Campbell Jamieson: Yes, Mr. Speaker, if the hon. member is basing his question on an incident which I think occurred in the last few months, it is being looked into and evaluated now and I will be glad to include that in my response to him.


PUBLIC ACCOUNTS
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I have a question for the President of the Treasury Board, but he is not here. He is never on time. I see the Deputy Prime Minister is not here and he cannot answer any questions. So if I may, Your Honour, I will direct my question to the Prime Minister. It comes as a result of the very serious condemnation-


An hon. Member:: Where is your leader?


Lincoln MacCauley Alexander: -uttered by the Auditor General when he indicated that as a result of the spending information he now gets, it is really a big gamble for him to certify at the end of the year that the government really spent what it said it would.
I put it to the Prime Minister in this way: this is a crisis situation; it is a matter of chaos. I would like to know what immediate steps the government is planning to take in order to rectify this serious situation which is embarrassing not only to the Canadian people but, more important, to the watchdog of the public purse.
February 14, 1979


Pierre Elliott Trudeau: Mr. Speaker, it was very ungracious of the hon. member to mention the absence of the Deputy Prime Minister-he was in his seat a moment ago and had to leave the chamber on House business and will be back in a few minutes-particularly when so many members from the Conservative front bench are absent, including the hon. member's own leader.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I notice that even their financial critics are away today.


Some hon. Members:: Oh, oh!


An hon. Member:: All the good ones are here.


Some hon. Members:: Hear, hear!


Some hon. Members:: Here he is.


An hon. Member:: Hurrah, here is the Deputy Prime Minister.


Lincoln MacCauley Alexander: There it goes again, Mr. Speaker: there is another minister who cannot answer a question, and it is the Prime Minister in this case. I tell him that the Leader of the Opposition has gone to Vancouver to one of the biggest fund-raising dinners ever held in this country.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: Let me ask the Deputy Prime Minister a question on a very serious situation, a question which I just posed to the Prime Minister.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. Will the hon. member put the question.


Lincoln MacCauley Alexander: Thank you, Mr. Speaker; I just do not understand what is going on there. I would like to put a question to the Deputy Prime Minister regarding the serious allegations and severe condemnation which the Auditor General put before the Canadian people yesterday when he indicated that as a result of the spending information he now gets, it is really a big gamble for him to certify at the end of the year that the government really spent what it said it would.
All I am asking the Deputy Prime Minister to do is tell us what steps the government is thinking about taking in order to bring some order out of the chaos and minimize the embarrassment which the watchdog of the public purse is now experiencing.


Pierre Elliott Trudeau: Mr. Speaker-


An hon. Member:: Now the Deputy Prime Minister will not answer the question.


Pierre Elliott Trudeau: In answer to the second part of the question, the very subject mentioned by the hon. member is now being
Oral Questions
discussed in front of the Standing Committee on Public Accounts.
In so far as the first part of the question is concerned, I can tell the hon. member that I agree with him: I am sure that if the Leader of the Opposition's trip is like any of his recent ones, it will be a "fun" dinner.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


An hon. Member:: Who wrote that for you?


RESPONSIBILITY OF COMPTROLLER GENERAL IN FORM OF GOVERNMENT ESTIMATES
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, my supplementary question might also be put to the President of the Treasury Board, whom I saw in the restaurant at lunch, but in view of his absence I will address it to the Prime Minister.
Yesterday, before the Standing Committee on Public Accounts, the Auditor General reiterated the absolutely vital importance he attaches to having the Comptroller General responsible for the form of the estimates-the kind of information that is presented to parliament and to the public. This is absolutely essential if he is to restore some semblance of financial management control to the government's profligate spending program.
My question to the Prime Minister is this. On behalf of his minister, will the Prime Minister instruct the President of the Treasury Board that the Comptroller General indeed is to have responsibility for all facets of financial management control in accordance with the type of commitments made by the previous president of the treasury board, the current President of the Board of Economic Development Ministers?


Mr. Thomas H. Lefebvre (Parliamentary Secretary to President of the Treasury Board):: Mr. Speaker, in answer to the hon. member, who stayed for only part of the meeting yesterday-


Some hon. Members:: Oh, oh!


Thomas Lefebvre: -the Auditor General also said in committee that he is quite happy with the arrangement which has been made, with the trio set up within the Treasury Board secretariat, including the Comptroller General and himself, to bring forth recommendations to the Standing Committee on Public Accounts which, incidentally, is being chaired by a member of the Conservative party.


Some hon. Members:: Hear, hear!


Thomas Lefebvre: The Standing Committee on Public Accounts has set up a schedule of meetings on this very important

February 14, 1979
Oral Questions
subject. As the hon. member knows, we hope to bring in an interim report in the next two or three weeks.


Some hon. Members:: Hear, hear!


FUNCTION OF COMPTROLLER GENERAL IN OVERSEEING GOVERNMENT EXPENDITURES
Harvie Andre: Mr. Speaker, I should like to direct my supplementary question to the Parliamentary Secretary to the President of the Treasury Board, since the Prime Minister seems to know very little about the government's spending program.
As the parliamentary secretary is aware, the Auditor General has made it abundantly clear that he feels he will have failed if he is not able to convince the government of the absolutely vital importance of the Comptroller General being responsible for supplying the data and the kind of information necessary for parliament and the public properly to assess the government's spending plans. When will the parliamentary secretary, if he is able, commit himself to a positive response to the request of the Auditor General? If not, will he at least explain to the House why?


Thomas Lefebvre: Mr. Speaker, again in answer to the hon. member, it is quite apparent the former president of the treasury board, who is sitting in the chamber, made a commitment to that same program. Incidentally, I should like to explain to the hon. member, who does not seem to understand, that this has been the result of a five-year study by the Auditor General of Canada-


Harvie Andre: It is about time something was done.


Thomas Lefebvre: -in conjunction with his very competent staff. Does the hon. member expect the Standing Committee on Public Accounts to make a report within four or five days on this subject after being told that it was a study which took place over a period of five years?


Some hon. Members:: Hear, hear!

[ Translation]


EXTERNAL AFFAIRS
Mr. Irenee Pelletier (Sherbrooke):: Mr. Speaker, my question is for the right hon. Prime Minister. Following the visit to Canada of the Prime Minister of France, Mr. Raymond Barre,
I would like to know from the right hon. Prime Minister whether in the explanation the French Prime Minister gave of the French policy about Canada and Quebec, namely a policy of non-interference and non-indifference, as well as during the private conversations he had with his French counterpart, he

discussed whether that policy clearly set out by Mr. Raymond Barre will also be maintained during the referendum period?


Pierre Elliott Trudeau: Mr. Speaker, first, no one knows when the referendum will be, so I cannot deal with that aspect of the question. But as far as the visit itself is concerned, I can say it met our expectations in every way, it was a complete success from the point of view of the Government of Canada and, I believe, the government of France. We talked a lot, of course, about economic matters, and particularly in the area of exchanges of high technology, I believe France and Canada both realized we have a lot to learn from one another. But what pleased me most during that trip was to see the French government through its Prime Minister recognize the French fact all across this country, in a preponderant way in the province of Quebec of course, but also among Francophone minorities in other provinces. Talks were held with the government of France and three provinces to get discussions going in three English provinces toward the establishment of French secondary schools for the minorities in those provinces.


ROYAL CANADIAN MOUNTED POLICE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Justice: it concerns the announcement which has been made that there will be a large reduction in the percentage of recruits for the Royal Canadian Mounted Police.
I ask the minister what has been decided in that connection. What is the justification for this course, at a time when holdups and violent crime are so much on the increase and when the services of the Royal Canadian Mounted Police can be so beneficial to the country as a whole?


Hon. Marc Lalonde (Minister of Justice):: Mr. Speaker, the right hon. member is perfectly aware that the Minister of Justice is not responsible for the administration of the RCMP. Consequently, his question should be put to the minister responsible for the RCMP, namely the Solicitor General.


John George Diefenbaker: Mr. Speaker, normally that would be a good answer; but as far as the government is concerned it does not seem to matter who is responsible, nobody has any information available for the House.
Now I will ask whoever is responsible for the Royal Canadian Mounted Police, what is the reason for this course being taken at a time when violent crime is on the increase? The Royal Canadian Mounted Police, through the years from the day it was the Northwest Mounted Police to the present, have done so much to preserve Canada from crime waves.
February 14, 1979


An hon. Member:: Who is the responsible minister?


An hon. Member:: Oh, it is the Solicitor General.


Some hon. Members:: Hear, hear!


Mr. Hnatyshyn:: This is a big surprise.


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I am pleased to be able to reply to the right hon. member. I know he is very far away from me at most times and therefore has not been able to recognize the alacrity with which I have provided information to the House on previous occasions.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Mr. Blais:: I point out to the right hon. member that he is not accurate in his basic premise to the effect there has been an increase in the rate of violent crime in Canada. Quite to the contrary; both in 1977 and 1978 there was a decrease.


Some hon. Members:: Hear, hear!


Jean-Jacques Blais: There has been a decrease per 100,000 of population. There has been a slight increase in the total number but because of the increase in population, per 100,000 of population there has been a decrease. I am very pleased about that, because there is no question it is the result of some very progressive policies adopted by the government and by my predecessors.


Some hon. Members:: Hear, hear!


Jean-Jacques Blais: In terms of the right hon. member's question, I fully agree with him that the RCMP has been a very salutary force of law enforcement within the country and will continue to be so. There has been a reduction in the percentage of increase as a result of government limitations in terms of its own man-year increase and expenditures. I can assure the hon. gentleman that in most contract provinces there has been a readjustment, so there will not be a demand for an increase in the number of man-years within the RCMP.


John George Diefenbaker: Mr. Speaker, if verbosity is the measure for providing information, the minister is a master in this House. I asked him what was the reduction in the number of trainees for this year. What percentage reduction is taking place? At a time like this, when crime is increasing-I am speaking of violent crime, not ordinary crime-why should we reduce the number of trainees to the extent that has been decided upon by this government, and what is the percentage of that reduction?


Jean-Jacques Blais: Mr. Speaker, again let me say that I will send the hon. gentleman the figures published recently by Statistics Canada. I am pleased that he has drawn the attention of the country to the fact that there has been a decrease in the rate of
Oral Questions
violent crime, in terms of percentage. It is true there will be a substantial decrease in terms of total hirings.


John George Diefenbaker: How much?


Jean-Jacques Blais: Mr. Speaker, we will be hiring during the year, I believe the exact figure is 247 new recruits for the RCMP. That is a substantial decrease, I believe, in that last year the total number was in the vicinity of 500.


John George Diefenbaker: That statement is false.


Some hon. Members:: Oh, oh!


An hon. Member:: Withdraw.


HAZARDOUS SUBSTANCES
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I should like to direct my question to the Minister of State (Environment). It has been reported that 300 tons of arsenic trioxide are being shipped by truck from St. Pierre, Manitoba, to Cobalt, Ontario, where it is reported it is to be used in a water process to produce crystallized arsenic and silver.
The citizens of the Cobalt area are naturally very upset by the fact that the Manitoba government is paying part of the shipping charges to dump this arsenic in their community and that the process may contaminate the water levels and their drinking water as well as the lakes and rivers in that area.
What steps can the department take to ensure that the transportation and processing of the arsenic trioxide, a deadly poison, will not endanger the lives and the environment of the community, as well as being a potential disaster during interprovincial transportation?


Hon. Len Marchand (Minister of State (Environment)):: Mr. Speaker, the disposal of this arsenic trioxide is really the responsibility of the government of Manitoba. Certain of our officials have been working with them in an advisory capacity only, so I do not know all the details as to how things are being carried out by the Manitoba government.
I would be very happy to look into the situation, but I have been assured by my officials that the methods used by the Manitoba government to dispose of this arsenic trioxide will be safe.


William Arnold Peters: Mr. Speaker, they are favourable to Manitoba because it is being dumped in Ontario. We have always had some arsenic there, but we do not need any more. I should like to ask the minister whether a permit has been obtained to move this large tonnage of arsenic by highway, and what safeguards have been demanded by his department in issuing a permit for this interprovincial shipment?

February 14, 1979
Oral Questions


Len Marchand: Mr. Speaker, I will look into that. I should remind the hon. member that the Department of Transport has a measure which was introduced not too long ago, which hopefully will be passed by the next parliament, dealing with hazardous products. We have been concerned for some time-


An hon. Member:: Bring it on today.


Some hon. Members:: Hear, hear!


An hon. Member:: We will pass it now.


Len Marchand: You would not pass it today, don't give me that kind of bull. We would be happy to bring it on today. 1 am sure my colleague would be happy to bring it in, if you want to pass it now.


An hon. Member:: Through all stages.


Len Marchand: Yes, all stages, right now. The bill is ready to go.


Some hon. Members:: Hear, hear!


Len Marchand: We could pass it now.


An hon. Member:: Bring it in now.


Len Marchand: I think it is a very good bill that will deal very specifically with the transportation of hazardous products.


PUBLIC ACCOUNTS
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to direct my question to the President of the Treasury Board.
Considering that the government has plans to write off some $655 million arising primarily from losses incurred at Mirabel and Pickering and, further, that it will incorporate some additional 19 airports into the airport revolving fund-which will have the tendency of hiding the operations of white elephants-and, further, that it is the intention to transform present airport taxes into higher user fees which will, in the process, have a tendency-if it is not the fact-to circumvent parliamentary control, will the minister reconsider this action, particularly in view of the Auditor General's recent comments? Will the minister reconsider this matter and revoke this plan, since it will certainly undermine and further erode parliamentary authority over the public purse?


Hon. Judd Buchanan (President of the Treasury Board):: Mr. Speaker, my understanding is that this is not a case of writing these funds off. I gather there is a change in interest rate being effected, but this does not involve, as the hon. member alleges or suggests, a writing-off of the funds.


Donald Frank Mazankowski: Mr. Speaker, I see the minister conferring with his colleague, the Minister of Transport. It is obvious he has not looked into this.
In view of the fact that the plan to convert the airport tax to a user fee has the potential of creating a significant fund of money, resulting in a $100 million annual slush fund which would be completely beyond the ability of parliament to control and which could be used by the government in further misadventures like Pickering and Mirabel, does the minister not consider this to be totally contrary to the traditions of parliament and the pleas of the Auditor General?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, the question of whether to collect certain amounts of money by way of airport tax, as well as having things like landing fees and other charges, is something which we propose to discuss further with the airlines. Indeed, some of the key people in Canadian airlines have indicated a probable preference for that course of action.
Hon. members should appreciate that this is, in fact, a price for particular services being provided. If a different arrangement, such as having airports as private or Crown corporations, were in place, this sort of charge would ordinarily be negotiated, in terms of the benefits being provided, as an appropriate cost; so there is nothing very exceptional about that procedure.


GOVERNMENT EXPENSES RELATED TO MIRABEL AIRPORT-REQUEST FOR COMPLETE REPORT
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is also for the President of Privy Council. In view of the fact that one of my main functions in the House of Commons consists in scrutinizing government expenses and that the Auditor General said yesterday in committee of the House that his office, and I quote:
... could not do its work adequately because reports on government expenses were inaccurate and incomplete.
As the hon. member could see a while ago I cannot even scrutinize, for example, the construction expenses related to Mirabel airport, I would like to know from the minister what immediate steps he intends to take to settle that problem which is very serious for us opposition members?


J. Judd Buchanan: Mr. Speaker, we are very concerned by the problem raised by the hon. member and, as my colleague has indicated a few minutes ago to the hon. member for Calgary, it is a matter which the Auditor General as well as the Comptroller General and the President of the Treasury Board have discussed deeply, and I hope to be able to indicate next week what steps we are going to take as a government in relation with budget estimates.


William Heward Grafftey: Mr. Speaker, I have a supplementary.
February 14, 1979

The Auditor General complained about the fact-and this is hard to believe-that half of the funds administered by the federal government do not appear in the budgetary estimates. I would like to know if the government will soon publish estimates that can be understood by members of the opposition and by average citizens so that the elected representatives of the people can examine government expenditures. I am not talking about the studies. I am asking the minister what specific and immediate action we can expect on the part of the government to correct this situation.


J. Judd Buchanan: Mr. Speaker, there is no truth in all this. Indeed, all the details are in the blue book and all the information is available to hon. members. The only thing is that the approval of the House is not required for transfer payments because approval is provided in the appropriate statutes. The figures are available to all members of the House, but what is at issue is the question of approval because the government has already received approval for these transfer payments under the legislation passed by parliament.


OFFICIAL LANGUAGES
Mr. Rod Blaker (Lachine-Lakeshore):: Mr. Speaker, my question is for the Secretary of State. I advised him this morning of reports circulating in Montreal to the effect that the federal government is cutting back on aid to education funds, particularly second language funds, in the province of Quebec. I referred to the article which appeared in this morning's Montreal Gazette.
I would ask the Secretary of State to confirm to the House, first, that the report is wrong and, second, that contrary to the statements made by the Parti Quebecois minister of education, the federal government is not cutting back but is, in fact, continuing to make funds available but on the basis of accountability. In other words, the fact is that we are demanding-


Mr. Speaker:: Order, please. It sounds as though the hon. member is trying to answer the question at the same time as asking it.


Hon. John Roberts (Secretary of State):: Thank you very much, Mr. Speaker, for protecting my right to answer. It is true that in the proposals we have made to the provinces, we are prepared to permit more funds for the duration of the next five-year agreement than were utilized in the past five years. In fact, we have made a commitment as a floor to the expenditure of over $850 million in comparison with $1 billion back in 1970.
The dispute, or the point of contention, between the provinces and the federal government is not basically over amounts
Oral Questions
of money but over the question of whether there will be true accountability, not to the federal government, but to the citizens of the provinces and the citizens of Canada, to ensure that those funds transferred to the provinces are directed to the expansion of second language and minority education in this country or to extra costs which may flow from providing services in education in both languages in the provinces.
Any attempt to use the proposals of the federal government as some excuse for withdrawing existing educational services would be just that, an excuse, and I might say it would be a form of intellectual terrorism.


OWNERSHIP OF SHIPPING ENGAGED IN EXPORT TRADE
J. Michael Forrestall: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce which arises from his trade negotiations and recent talks with the Chinese and Mexicans, particularly in the area of bulk cargoes such as grains and oils.
In these conversations, did the minister raise the matter of the usefulness, particularly to Canada, of cross-trading or using Canadian carriers in these bulk trades and, if so, with what result?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, in my talks with the Chinese, the question of in whose ships the goods would move was not raised. Of course, in the past China has gone out on the market and hired ships to move Canadian grain. I suppose it was expected they would do that in the future.


J. Michael Forrestall: Mr. Speaker, I apologize if this is a representation, so I will put it in the form of a question to the minister. In future negotiations, would he keep in mind the benefit to Canadian carriers who have demonstrated expertise with bulk carriers in hauling some of our own resources in and out of this country?


John (Jack) Henry Horner: Mr. Speaker, I am a strong proponent of creating as much Canadian content in our exports as possible and that would mean in any case, where it is possible, to move it by Canadian ships if there are Canadian ships.


CANADIAN NATIONAL RAILWAYS
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, may I put a question to the Minister of Transport? On May 4, 1978, the minister accepted a motion that I made to appoint a firm of independent auditors to audit the CNR pension fund. Could the minister now name the firm doing the independent

February 14, 1979
Oral Questions
audit and tell the House when they will be presenting their first report to parliament?


Otto Emil Lang: Mr. Speaker, I will have to check on the progress being made.


A. Daniel McKenzie: A supplementary question. Due to the low pensions being paid by the CNR, and the small increases, will the minister make, or has he made, representations to the president of the CNR to make some kind of cost of living adjustment to CNR pensions for the coming year?


Otto Emil Lang: Mr. Speaker, I hesitate to depart from the long-standing policy of treating this as a matter which is discussed by other parties and not by us in the House.


LABOUR RELATIONS
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, may I put a question to the Minister of Labour? In view of the fact that the loss of man-days resulting from strikes and walk-outs more than doubled in the first ten months of 1978 compared to 1977-in fact, there was an increase from 2.7 million man-days lost, to 6.4 million man-days lost in the first ten months last year-and because a great number of these strikes are a direct result of the fragmentation of union power, could the minister explain when he intends to act or why he has not acted on the many recommendations dealing with sector bargaining, the most recent being the Bairstow report?


Hon. Martin O'Connell (Minister of Labour):: Mr. Speaker, first of all, I should like to express my gratitude, and I think that of my predecessor, for the good work done by the Bairstow commission. I have invited the parties involved in the two industries mentioned in the Bairstow report, the air transportation industry and the grain handling industry, to meet with me soon to discuss an appropriate approach to the recommendations of that commission. I am waiting for their response to my invitation so that we can discuss those recommendations.


Otto John Jelinek: A supplementary question, Mr. Speaker. Surely the minister knows that there were many reports dealing with the subject prior to the Bairstow report. There was the Finkelman report, which was a confidential document, with the same suggestion; so this has been in the works for years and years but strikes continue to increase at an unprecedented rate. 1 wonder when this government will finally stop studying reports on top of reports and take some steps-


Mr. Speaker:: Order, please.


TRANSPORT
Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to address a question to the Minister of Transport. The report of the Prairie Rail Action Committee made two fairly specific recommendations, one being a government subsidy for farm trucking of grain which would amount to approximately one cent per bushel per mile on anything over 20 miles, and the other for federal government assistance to municipalities where upgrading of rural roads is required.
What has the federal government done about these two recommendations which were put forward one or two months ago?


Otto Emil Lang: Mr. Speaker, we have been analysing the implications of these recommendations. I have, personally, been discussing them with farmers and farmers' representatives in order to gauge their reaction, particularly in the context of several of the recommendations of the Prairie Rail Action Committee that these be substitutes for retaining certain lines. The analysis is being completed. I will soon be discussing with my colleagues the appropriate approach to be taken.


Jack Burnett Murta: A supplementary question, Mr. Speaker. The federal government's assistance to municipalities where upgrading of rural roads is concerned is possibly a positive recommendation. Does the minister agree with the other recommendation, that government subsidies for farm trucking of grain taken, as an arbitrary figure, anything over 20 miles, is really fair to the farming community? What specific changes is he considering in that particular recommendation?


Otto Emil Lang: Mr. Speaker, I think there are recognized difficulties with the proposal, in light of the fact that certain farmers have for several years, or for a long time hauled their grain distances greater than that. I think the context of the Prairie Rail Action Committee recommendation is that these farmers now being affected are having something new suddenly created for them and imposed upon them.
The Prairie Rail Action Committee was guided generally by the principle of not allowing hauling distances to increase beyond 20 miles and their decision on which lines to abandon. It is in that context that this program would have to be reviewed. I would appreciate the hon. member's further opinion after reflecting on that answer.


FISHERIES
Mr. Fonse Faour (Humber-St. George's-St. Barbe):: Mr. Speaker, the minister is aware of the importance of capelin
February 14, 1979

stocks to the cod fishery on the east coast and, as such, he will be aware of the serious overfishing of capelin that has taken place over the last couple of years. Can he explain to the House why he did not follow his own scientists' advice to lower last year's capelin quotas?


Hon. Romeo LeBIanc (Minister of Fisheries and the Environment):: Mr. Speaker, I do not know where the hon. member got the impression about this year's quotas. I know that the whole issue of the capelin fisheries is the subject of an international meeting of scientists which if my memory is accurate, is taking place in Tokyo right now.


Alphonsus Faour: Mr. Speaker, I know the minister is aware of the situation that along sections of the southeast coast of Newfoundland there was no capelin run last year and the inshore fisheries sufferred as a result. I know he is aware that the overfishing has been done mainly by foreign seiners along the Grand Bank and Hamilton Bank.
Will the minister assure the House and the Newfoundland fishermen who were seriously hurt last year that foreign seining of capelin will be curtailed on the Grand Bank and Hamilton Bank, and that proper management measures will come out of the meeting in Tokyo and the government will take serious measures to support the cod fishery in this way?


Derek Vincent Lee: Mr. Speaker, I do not believe the problem is as simple as the hon. member has indicated. I am sure he did not want to mislead the House. The fact is that capelin stocks have been fished much, much less than they have been over the past decade. The problem of the past year is one which the scientists have not yet fully explained. However, I tell the hon. member and the House that if required for conservation reasons, we will do what we did this year, that is, interrupt the fishery before the quota has been taken, and bring it to an end.


PRIVILEGE
Mr. Allan B. McKinnon (Victoria):: Mr Speaker, my question is one of privilege. It affects all hon. members, but most particularly members of the opposition in that they ask more questions in the House than members opposite.
This question of privilege relates to an answer given to me by the Minister of National Defence (Mr. Danson) with supporting evidence given by the Prime Minister (Mr. Trudeau), and another answer which I received to a written question. The variance between the answers is such that it is quite apparent one or another of the answers is false.
To get to the evidence, Mr. Speaker, I received an answer to written question No. 649 from the President of the Privy Council (Mr. MacEachen) or his representative. The question reads:
Privilege-Mr. McKinnon
Did Chancellor Schmidt personally or some of the other bidders ask for a few more months beyond the August 1 deadline to improve their bids on the new fighter aircraft contract, and, if so, which companies submitted additional proposals after August 1 ?
The answer to that question reads:
I am informed by the Department of External Affairs and National Defence as follows: No.
So the written reply was, "No, Chancellor Schmidt did not ask for an extension nor did any of the other companies." When I saw that answer I set about the necessary research to find written documentation of the opposite approach. May I now present two conflicting pieces of evidence, one from a press conference and one from Hansard.
First I quote from a transcript of the Prime Minister's press conference dated November 14, 1978 held in Ottawa. Mr. Jack Best asked a question of the Prime Minister concerning the new fighter aircraft and wanted to know, in view of the postponement of the contract process, how firm and total the government's commitment was to purchase. The Prime Minister answered as follows:
Completely firm and total. If there has been a slippage, it has been at the demand of those who are making bids. When I saw Chancellor Schmidt this summer, he had heard about our inclination to reduce the, I think, seven options to a smaller number and he personally, but this is true of some of the other bidders, asked for a few more months so that they could improve their bids. And, the Department of Defence in agreement with the government just felt that if the bids could be improved even in terms of off-sets to Canada, in terms of the number of planes which could be purchased for a given amount of money or in terms of their efficiency in the performance of certain tasks we would willingly give them a few more months.
As can be seen this is a direct contradiction of the written answer I have received. One must be false. Incidentally, the Prime Minister and Chancellor Schmidt conferred on July 16 and 17, 1978.
In the event a transcript is not enough evidence, I wish to draw Your Honour's attention to page 867 of Hansard dated November 7, 1978, where the Minister of National Defence, in answer to a question put by me concerning the new fighter aircraft, said:
As hon. members know, the vendors asked for additional time to submit, we have given them that additional time to submit-
Further along in his statement the minister said:
-if I may state the status now; there has been a deferment to give the vendors an opportunity to resubmit.
So the Prime Minister said yes, the companies, and Chancellor Schmidt personally, had asked for additional time. The Minister of Defence stated yes in the House of Commons.
Now in the House of Commons I have been informed that the answer is no. It is not easy, Mr. Speaker, to determine in this case who is responsible for the falsehood, but certainly there has been a falsehood, and it is my understanding that that means my privilege in this House, and indeed the privileges of all members, have been abused.
The precedent in a case such as this is fairly clear. The nineteenth edition of May's Parliamentary Practice states at page 141:

February 14, 1979
Privilege-Mr. McKinnon
It is a breach of privilege to present or cause to be presented to either House or to committees of either House, forged, falsified or fabricated documents with intent to deceive such House or committees or to subscribe the names of other persons or fictious names to documents intended to be presented to either House or to be privy to or cognizant of, such forgery or fraud.
I might say that the Chair used this citation in reaching a decision in the case raised before Christmas by my colleague, the hon. member for Northumberland-Durham (Mr. Lawrence), which confirmed that provision of false information to a member of parliament can be an infringement on his ability to carry out his duties. The reply to my question, signed by the parliamentary secretary, was obviously and demonstrably false, unless the statement by the Prime Minister at his press conference and the statement by the Minister of Defence at page 867 of Hansard were themselves fabrication.
It is difficult to believe that neither the Department of External Affairs nor the Department of National Defence was not aware of requests from bidders about which both the Prime Minister and Minister of Defence appeared to be completely knowledgeable. I wonder, therefore, what kind of process these written questions go through. Perhaps this answer I received reflects an attempt to mislead me by directly contradicting other information given publicly. Perhaps it reflects the incompetence of those providing the answers, or the impossibility of providing factual replies consistent with those given in the House. In this respect I would ask you to note the brevity of the reply.
We all realize that the government does not have to provide an answer to written questions, but if it does reply surely there is an obligation to make an honest effort to avoid deceptive or completely untrue responses.
In the ruling of December 6, the Chair asked:
Does that lead us to the conclusion that, by virtue of an act or omission, the House, or a member, has directly or indirectly been impeded in the performance of its functions or his duty, or that there has been a tendency to produce such a result? If I so find, then I really have no choice but to find, prima facie, that a contempt has been committed.
I believe in this case, sir, my attempts to follow up and ask questions about the fighter acquisition program have been impeded by the untruthful reply to one of my questions.
If you find I have a prima facie case of privilege, I would move:
That the reply to written question 648, containing an assertion demonstrably at variance with the facts as stated by the Prime Minister and the Minister of Defence, be referred to the Standing Committee on Privileges and Elections for investigation and report.


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I could not quite follow the logic of the hon. member's remarks, but that is not unique.


Mr. Baker (Grenville-Carleton):: For you.


Barnett Jerome Danson: I tried to follow the sequence of what he was endeavouring to say. Obviously there is no intention to mislead on a fairly straightforward question. I had hoped that since the Christmas recess he would have been asking questions about

defence matters, but apparently he has been concentrating on this important point of privilege. Therefore, I would like to take notice of this question and go through the record because it is difficult to follow the written questions on the order paper and the answers given in the House by myself and by the Prime Minister (Mr. Trudeau). Certainly there is no intention to be misleading. We have been as straightforward as one possibly can be on this entire program. I only want to clear up the matter to the satisfaction of the Chair, and possibly some day to the satisfaction of the hon. member.


Mr. Speaker:: It is certainly not unexpected that the minister would want some time to examine the matter, to examine the transcripts and deliver his contribution on this question, which is obviously a very important one, at a later date. The matter will stand in abeyance to give the minister an opportunity to do that.


POINTS OF ORDER
William Arnold Peters: Mr. Speaker, I rise on a point of order. During the question period the minister of the environment indicated that he was willing to proceed with second reading of Bill C-17 to provide a guarantee of safety to the residents of northern Ontario against the shipment of arsenic into that area. I have discussed this with my House leader who has agreed that we will give second reading to the bill without debate in order that it can go to committee and this protection will be available for the people of Cobalt. The members of the Conservative party are very interested in this matter and I am sure they will give second reading to the bill so that the people of Cobalt can be protected against this very deadly and toxic material.


Otto Emil Lang: On the point of order, Mr. Speaker, I welcome the suggestion from the hon. member for Timiskaming (Mr. Peters). I would ordinarily have given a speech on second reading of this bill. However, I can make my remarks at the committee. As well, this bill represents a very high degree of co-operation with the provinces. It is one they would welcome. We have had discussions with them on the regulations. This is an extremely good example of federal-provincial co-operation on a very important matter. If the Conservatives and the other parties join in agreement to pass this bill forthwith, we can deal with it effectively in committee and do a great deal of good for the country.


Mr. Jake Epp (Provencher):: Mr. Speaker, I do not want to reply with regard to the bill, but as a member of this House I find it somewhat difficult to see this kind of procedure take place on the basis of information that was given by the minister which simply is not in total keeping with what has transpired.
February 14, 1979


Mr. Speaker:: Order, please. We have a point of order raised by the hon. member for Timiskaming (Mr. Peters). He is making a suggestion regarding the passage of a bill. There is no vehicle by which we can debate the matter and disagree. If the House is of a disposition to take the bill through all stages when we get to orders of the day, I will be glad to follow the direction of the House and call it. If there is no agreement to do it at that time under the conditions then set forward, and if the hon. member for Provencher (Mr. Epp) wants to disagree with any statements made during the course of the debate, he is not in any way constrained from doing so. All I can do is determine whether there is agreement to take it. When we come to orders of the day, I will be glad to examine in order to see if there is consent to deal with it in that way.


Walter David Baker: Mr. Speaker, I feel bound to indicate that this is a matter that we will certainly take under consideration in a most positive way.
While I am on my feet, and since we are dealing with House business, there is a matter with regard to the National Transportation Act which has been on the order paper for some time. I wonder if the Minister of Transport (Mr. Lang) could now indicate whether he is prepared to arrange to refer the subject matter of that statute to a committee where it could be discussed. It is a matter we have been requesting for a considerable period of time. It could be quite helpful.


MR. DIONNE (NORTHUMBERLAND-MIRAMICHI)-STATEMENT MADE BY MEMBER FOR VICTORIA
Mr. Maurice A. Dionne (Northumberland-Miramichi):: Mr. Speaker, in introducing his question of privilege the hon. member for Victoria (Mr. McKinnon) stated that the question he was raising affected more the members of the opposition than members on this side of the House because the members of the opposition asked more questions. He left a clear impression that members of the opposition carry out their tasks more diligently than members on this side.


Some hon. Members:: Hear, hear!


Maurice Adrian Dionne: He did not
explain that the very nature of the question period makes it possible for many more members of the opposition to be recognized than members of the government backbenches. That should be on the record.


MR. EPP-ANSWER GIVEN BY MINISTER OF FISHERIES AND THE ENVIRONMENT DURING QUESTION PERIOD
Arthur Jacob (Jake) Epp: Mr. Speaker, I want to raise a point of order in the sense that information can be given to the House in the course of the question period which reduces or removes the freedom of individual members because the information given is simply not correct. That happened again today when the minister of the environment indicated that there was a provincial responsibility to move the arsenic from St. Pierre, Manitoba.
Point of Order-Mr. MacKay
I would like to point out to the hon. member for Timiskaming (Mr. Peters) that originally those 300 tons came from northern Ontario, his area of the province. The fact is the arsenic that is there was deregulated by this government. Promises were made by members of this government to remove that arsenic. Those promises have not been lived up to. This minister has not lived up to his obligations. He now says it is a provincial responsibility.
What is the vehicle that an individual member can use to get at one member of the cabinet who makes some statements which are totally denied by another member of the cabinet? Here we sit as members of the opposition. We cannot bring this government to task. They take the privilege and the opportunity to say whatever suits them at any given time and in any circumstances.


Mr. Speaker:: Order, please. That is not a point of order. The hon. member will recognize at once that he has a disagreement with or some kind of a criticism of what has been said. It does not constitute a point of order. If he dislikes the quality of answers given or remarks made during the question period, he knows there must be some procedural basis other than simply the occasion to disagree and criticize. There must be some procedural basis of an attempt, as he would have to allege, to mislead the House.
The hon. member for Victoria (Mr. McKinnon) raised a question of privilege which at least in its general terms raises a question of sorts which he has identified and put that to the House to see whether or not, once a contribution has been made from the other side, a question of privilege exists. Certainly it does not exist either in privilege or in order to complain about the quality of answers given in any question period. That is well known. I cannot receive other commentary on that.


MRS. HOLT-STATEMENT MADE BY MEMBER FOR VICTORIA
Mrs. Simma Holt (Vancouver-Kingsway):: Mr. Speaker, I rise on a point of order. I feel there was a misleading representation made in this House that maligns my reputation in the west. It was made by a western member. My reputation in the House has been damaged. It indicates that I am not acting, questioning, and challenging my own ministers on issues-


Mr. Speaker:: Order, please. The hon. member will have to identify the representation to which she is referring.


Simma Holt: The hon. member for Victoria (Mr. McKinnon) said in this House that the opposition asks more questions than we do.


Mr. Speaker:: Order, please. The fact is that very much by deliberate design and by constant practice opposition members do ask more questions. The House knows at once that that statement, whether or not members may wish to take it up and explain it, is not an inaccurate statement. It is not in any way out of order. There is no procedural basis upon which I can

February 14, 1979
Business of the House
now entertain disagreement or an attempt to take issue with that statement as though it were a procedural point.
MR. MacKAY-GUIDANCE SOUGHT FROM CHAIR


Elmer MacIntosh MacKay: Mr. Speaker, I am seeking your guidance as a result of a remark that you made in the course of this deliberation on the point of order or nonpoint of order. It is simply this. If I understood the Chair correctly, you indicated that there really is no basic amount of information required in an answer from the other side. It is on this that I seek your guidance. If you will bear with me for a moment, I raise this not in a quarrelsome way but as a matter of seeking information.


Simma Holt: Don't bear with him, Mr. Speaker, if you can't bear with us.


Elmer MacIntosh MacKay: Mr. Speaker, I will resist the temptation to say that some people are easier to bear than others.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: I do not want to take very much of the time of the House. My point is simply this. Your Honour was dealing with the quality or content of written questions. In the late show the other evening, the hon. member for Victoria (Mr. McKinnon) was asking a question about the bill to be sent to the Soviet Union for the cost of the clean-up. In return, he received an answer that had nothing to do with that. I had an expression-


Some hon. Members:: Order.


Mr. Speaker:: Order. I have made my disposition and I suggest the hon. member ought to investigate the facts and the background of the matter he is now raising before he takes it any further.



ROUTINE PROCEEDINGS


Otto Emil Lang: first reading of Bill S-6 (from the Senate) to exempt certain shipping conference practices from the provisions of the Combines Investigation Act.
Motion agreed to and bill read the first time.


BUSINESS OF THE HOUSE
Mr. Nielsen:: I rise on a point of order, Mr. Speaker. The other day the House unanimously passed a motion to concur in the second report of the Standing Committee on Justice and Legal Affairs to expand the committee's terms of reference so as to enable the reconstitution of the subcommittee on penitentiaries in order that the maximum security institutions of this country might be revisited. Now that the government has had an opportunity of studying that motion and that report, can the President of the Privy Council (Mr. MacEachen) give the House any indication when a motion will be brought before the House to give effect to that reference?


Allan Joseph MacEachen: I shall need to have a word with the Solicitor General (Mr. Blais) as to what the next step ought to be, and I will take the hon. member's representations into account.


Mr. Foster:: Would the House leader consider referring, "The Management of Canada's Nuclear Waste" to the Standing Committee on National Resources and Public Works? There have been some discussions around the House in this connection, and a number of members on the other side would like to see this reference made. I wonder whether there would be unanimity about having it referred. If that is the case I should like to see the President of the Privy Council (Mr. MacEachen) introduce the appropriate motion because a lot of work has been done by the standing committee and, if the reference were made, the work could go forward.


Walter David Baker: I have not had an opportunity of discussing this matter with the government House leader. Perhaps he and I might be given an opportunity to consider it together. I am aware of the representations which have been made. Some discussions have been carried on with members of my caucus, and I would expect that if the government House leader is interested in taking the matter up with me I would be very pleased to talk to him about it.


Mr. Knowles (Winnipeg North Centre):: I should be happy to join in this conversation. I might say I would do so as one who favours the idea of sending this matter to the committee as quickly as possible.


Allan Joseph MacEachen: Having been so warmly invited to meet with my colleagues I shall be happy to arrange a meeting, probably tomorrow, with a view to dealing with this item and a number of other items which have been raised today in this House, as well as items which are on my own mind in connection with the business of the House.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to Deputy Prime Minister and President of Privy Council):: Mr. February 14, 1979

Speaker, the following questions will be answered today: Nos. 523, 556, 722, 726, 782, 851 and 898.


Mr. Epp: 1.	Has Canada established a Consular mission in Vietnam and (a) if so, are immigration officials attached to the office (b) if not, in what manner and in which locations are interviews for immigration purposes conducted?
2.	How many applications for Vietnam were (a) received (b) approved in (i) 1975 (ii) 1976 (iii) 1977?
3.	What was the number of applications approved under terms of family reunification and how many were accepted as refugees?


Hon. Bud Cullen (Minister of Employment and Immigration):: 1. (a) No.
(b) Arrangements for interviews are made through the Hong Kong office; some are processed in Singapore or Seoul and a large number have been processed in the U.S.A. Negotiations are currently being conducted with the authorities in Hanoi with a view to establishing an immigration program in Vietnam. These negotiations have been ongoing over the past two years and it is expected that an agreement could soon be reached whereby immigration examinations may be conducted in Ho Chi Minh Ville (Saigon) and in Hanoi.
2.
(i)	5,627	(b) (i)	2,993(ii)	425	(ii)	2,184(iii)	250	(iii)	530Total	5,707 admitted under the
special movement as refugees
Although we received 5,627 applications in 1975, not all of them were approved that same year. This is why the totals in 2(b)(iii) are higher than those in 2(a)(ii) and (iii).
3.
Special movement from Vietnam
	Family Reunification	Other Refugees
1975	1,374	1,6191976	790	1,3941977	148	382BILL C-12	
Question No. 556-Mr. McCrossan:		
1. Did the government undertake an actuarial valuation of the combined Public Service Superannuation Account and Supplementary Retirement Benefits Account on the basis of the amendments proposed in Bill C-12, An Act to amend the Supplementary Retirement Benefits Act, the Public Service Superannuation Act, the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act and the Members of Parliament Retiring Allowances Act, using either the actuarial assumptions used by Tomenson-Alexander or other appropriate actuarial assumptions and, if so, what is the estimated amount
Order Paper Questions
of indexing that will be available for the (a) Public Service (b) Canadian Armed Forces (c) RCMP in the three year period 1979-81 and in subsequent three year periods up to the year 2030?
2.	If the Tomenson-Alexander actuarial assumptions were not used, what actuarial assumptions were used?
3.	Over the same period, what is the expected annual increase in the cost to the government with respect to the Public Service Superannuation Account resulting from the proposal in Bill C-12 to transfer excess interest on the retired employees share of the Public Service Superannuation Account to the Supplementary Retirement Benefits Account?
4.	Will the interest credited to the retired employees share of the Public Service Superannuation Account continue to be based solely on government
securities or will it be based on a fairer interest market reflecting investment opportunities available in the market?
5.	Has the government considered investing part of the assets of the Public Service Superannuation Account and the Supplementary Retirement Benefits Account in non-government securities because of concern over phantom funding of government insurance plans and, if so, what portion of the funds is the government considering investing?
6.	For each year 1972-77, what was the average age of retirement under the Public Service Superannuation Act and how does this average vary by annual salary level at retirement using the salary categories (a) $0 to $10,000 (b) $10,001 to $20,000 (c) $20,001 to $30,000 (d) $30,001 to $40,000 (e) $40,001 and over?


J. Judd Buchanan: 1.
No. The basic change to the indexing portion of the program being proposed by Bill C-12 is to remove the currently automatic guarantee of full indexing of pensions to the consumer price index with a system whereby indexing would be limited to the amount of funds available for that purpose; namely the pensioners' share of excess interest earned by the public service superannuation account along with the contributions made by and on behalf of pensioners to the supplementary retirement benefits account. In this way, instead of the funds required depending on the level of benefits, the level of benefits would depend on the funds available for indexing.
In effect the supplementary retirement benefits plan is being converted from a defined benefit to a money purchase type of program. The actuarial implications of the bill for the Public Service, Canadian Forces and RCMP superannuation accounts would be reflected in the regular actuarial valuations the department of insurance is required to make of these accounts.
2.	See No. 1.
3.	The over-all effect of Bill C-12 would be to reduce the combined government budgetary requirements for the Public Service Superannuation Act and the Supplementary Retirement Benefits Act. Current estimates indicate that the longterm effects of Bill C-12 would likely increase annual budgetary requirements for the Public Service Superannuation Act by 2.5-3.5 per cent of payroll and decrease budgetary requirements for the Supplementary Retirement Benefits Act by a greater amount. More precise estimates of the effect on budgetary requirements would be determined by the department of insurance in their regular valuations of the public service superannuation account.
4 and 5. Operations of the public service superannuation account with regard to the interest earnings and investment media are governed by statute and any proposals to alter the

February 14, 1979
Order Paper Questions
current arrangements would require legislative action and would be announced in the normal manner.
6.	The average age of retirement of contributors under the Public Service Superannuation Act from 1972 to 1977 was as follows:
$0-	$10,001-	Final Salary $20,001- $30,001-	over	Overall10,000,	20,000,	30,000,	40,000,	$40,000,	Average1972	63.18	62.3	62.44	62.43	66.21	62.931973	63.06	62.07	61.79	62.09	64.59	62.661974	63.05	61.79	61.10	61.74	60.34	62.331975	63.30	62.02	61.13	60.66	60.93	62.241976	63.33	62.03	60.93	61.14	62.36	62.051977	63.31	62.23	61.00	60.81	61.07	62.06


Mr. Howie: 1.	Were applications received for financial assistance under the Enterprise Development Programme of the Department of Industry, Trade and Commerce from the Province of New Brunswick and, if so, how many (a) for the fiscal year ended March 31, 1978 (b) from April 1 to December 1, 1978?
2.	How many of the applications were approved and what was the total dollar value?


John (Jack) Henry Horner: In so far as the Department of Industry, Trade and Commerce is concerned: 1. Applications for assistance under the EDP are received through the programs branch of Industry, Trade and Commerce, the IT&C regional offices across Canada as well as the individual branches of the department. Due to the wide dispersement of applications it is not possible to determine the number of applications received in a particular province.
2. During fiscal 1977/78, two applications were approved from the province of New Brunswick for a total dollar value of $55,132. From April 1978, to December 1, 1978, four applications were approved from the province of New Brunswick for a total dollar value of $71,000.


Mr. Howie: Were any community courses funded in Fredericton, New Brunswick by the Department of Employment and Immigration since January 1, 1978 and, if so, what were they and what was the extent of the funding?


Jack Sydney George (Bud) Cullen: There were 46 full-time institutional occupational training courses purchased under the Canada Manpower Training Program between January 1, 1978 and October 31, 1978 in Fredericton, New Brunswick. Attached is a list of the courses and their corresponding purchase cost. (Total purchase costs for courses with the same name vary according to the number of trainees enrolled.) The cost of income maintenance paid to trainees is not included.
Canada Manpower Training Program Courses Purchased and Purchase Cost Fredericton, New Brunswick January 1, 1978 to October 31, 1978
Type of Training	Course Name	Purchase Cost (S)
Skill	Artificial Insemination Technician			
	Business Education	98,280
	Carpentry	33,892
	Carpet Laying	10,411
	Carpet Laying	25,264
	Cashier Training	3,712
	Dairy Breeders Course	1,000
	Farm Management Training II	1,125
	Forest Ranger	231,660
	Pipefitting	33,892
	Upholstery-Furniture Repair	23,287
	Skill Total	$462,523
BTSD	BJRT (Basic Job Readiness Training)	56,433
	BTSD (Basic Training for Skill Development)	124,152
	BTSD (Native People)	18,811
	Career Orientation For Women	12,135
	Career Orientation For Women	8,694
	BTSD Total	$220,225
Apprentice	Construction Lineman I	4,293
	Construction Lineman II	3,434
	Construction Lineman II	2,642
	Construction Lineman III	2,509
	Construction Lineman III	2,377
	Construction Lineman III	1,981
	Electrical Mechanic I	3,163
	Electrical Mechanic I	2,952
	Electrical Mechanic II	2,952
	Electrical Mechanic II	2,244
	Electrical Mechanic III	2,244
	Electrical Mechanic IV	2,094
	Electrical Mechanic IV	3,163
	Electrical Mechanic V	3,163
	Lineman I	9,919
	Lineman II	4,668
	Stationary Engineer II	1,360
	Stationary Engineer II	2,040
	Stationary Engineer III	1,800
	Stationary Engineer IV	2,160
	Switchboard Operator	2,023
	Switchboard Operator I	1,654
	Switchboard Operator II	3,034
	Switchboard Operator III	1,203
	Switchboard Operator IV	1,820
	Switchboard Operator IV	2,023
	Utility Lineman I	4,822
	Utility Lineman I	4,668
	Utility Lineman IV	3,909
	Utility Lineman IV	3,501
	Apprentice Total	$89,815
Grand Total		$772,563


Mr. Janelle: Did the government contribute to the cost of bringing Sino-Vietnamese refugees to Canada from the Hai-Hong and, if so, in what amount?


Jack Sydney George (Bud) Cullen: The Canadian government did contribute to the cost of bringing 604 Sino-Vietnamese refugees (140 families) to Canada from the Hai-Hong. A fund of $500,000 was approved

February 14, 1979

by Treasury Board for this project. The total amount spent will not be known before the end of the fiscal year 1978-79.


Mr. Beaudoin: 1.	Since 1968, did the Department of Agriculture finance projects in the Constituency of Richmond and, if so (a) what were the projects (b) what was the (i) total amount (ii) amount in each case (c) what were the areas?
2.	Is the Department planning to do so in the near future and, if so (a) what will be the amount (b) in which areas?


Hon. E. F. Whelan (Minister of Agriculture):: 1. No. (a) to
(c)	Not applicable.
2. No. (a) and (b) Not applicable.


Mr. Howie: 1.	For the fiscal year 1977-78, how many persons were assisted through employment and immigration in job training programmes in New Brunswick?
2.	(a) What were the names of the programmes (b) how many participated in each (c) how many were served through the Fredericton, New Brunswick Office?


Jack Sydney George (Bud) Cullen: 1. During the fiscal year 1977-78, 12,845 trainees entered into training in New Brunswick, under the Canada Manpower Training Program.
2. (a) and (b) Following are the types of training undertaken and the number of 1977-78 participants for each: Institutional Training:
Skill-3,529 Language-0
Basic Training for Skill Development (BTSD)-
1,156
Job Readiness Training (JRT)-72 Work Adjustment Training (WAT)-4 Apprenticeship-3,202.
Industrial Training: 4,882.
2. (c) A total of 1,344 trainees were served through the Fredericton, New Brunswick office.


Yvon Pinard: Mr. Speaker, if question No. 550 could be made an order of return, this return would be tabled immediately.
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motion put forward under Standing Order 43 by the hon. member for Westmount (Mr. Johnston) this afternoon that we on this side agreed with the motion.


Mr. Jones: 1.	What is the purpose of the visit to Canada of His Excellency Colonel Moussa Traore, President of the Republic of Mali; His Excellency Leopold Sedar Senghor, President of the Republic of Senegal; and Mr. Mohammed El Mocktar Ould Samel, Minister of Planning and Mines of Mauritania and representatives of the President of Mauritania early in November 1978?
2.	Is the Canadian government participating either directly or indirectly in a number of development assistance operations in the countries of the Sahel region and if so, what are they?
3.	What is the cost of each of the above projects? What portion of the total cost is being borne by the Canadian government? What portion is being borne by other countries? Name those other countries involved with their respective portion.
4.	For what purpose is this assistance being given? What benefit will Canada receive from this assistance? Will there be new jobs created for Canadians with respect to this assistance?
Return tabled.


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


Some hon. Members:: Agreed.


Yvon Pinard: Mr. Speaker, 1 ask that all notices of motions for the production of papers be allowed to stand.
I thought I heard a few "nos" on the side of the opposition concerning the motion of the hon. member for Westmount (Mr. Johnston).


Mr. Speaker:: Is that agreed?	Mr. Speaker: Is that agreed?


Steve Eugene Paproski: Yes, Mr. Speaker. While I am on my feet may I say with regard to the


Some hon. Members:: Agreed.

February 14, 1979
Pensions



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, February 12, consideration of the motion of Mr. Buchanan that Bill C-12, to amend the Supplementary Retirement Benefits Act, the Public Service Superannuation Act, the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act and the Members of Parliament Retiring Allowances Act, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
J. Michael Forrestall: Mr. Speaker, I rise to take part in this debate on Bill C-12 not only because of its significance and importance to all of us, especially to those who have dedicated their lives to the public service, not only because I come from the metropolitan area of Dartmouth-Halifax where, next to Ottawa, we have perhaps the highest per capita share of public servants in the country, but for a particular reason. Within my constituency lies one of the largest military establishments in our country. It embraces many thousands of active members of the Canadian armed forces, as well as thousands who are living out their lives on pensions.
I enter the debate with mixed feelings. If the bill does represent a sincere and serious effort on the part of the government-and here I quote the words of the President of the Treasury Board (Mr. Buchanan)-"to firm up the financial underpinnings of the program to ensure we are not stirring up future trouble for taxpayers and public service pensioners" then perhaps it can be welcomed. Certainly it would be needed. There is very real concern abroad in the land with respect to the whole subject of indexation. Concern has been expressed both by the taxpayers and by the public servants.


An hon. Member:: You've made it.


J. Michael Forrestall: I've made it. Somebody has taken my picture. It is disturbing to see a flash bulb go off. Perhaps it is because the Minister of Justice (Mr. Lalonde) is just leaving the chamber that we are celebrating by taking pictures. Anyway, the taxpayer feels that he or she will be left to pay for what has been described by some over-zealous partisans on this question as overly generous public service pensions. For his part, the public servant feels that protection against the ravages of inflation may now, or at some time in the future, be removed. As I see it, Bill C-12 was intended to dispel both these fears. Even more to the point, I believe the bill will destroy the basis upon which some of these fears have grown- the distortions which have been placed in front of us all. It strikes me that intrinsically this is what faces us.
What concerns me in any event is that the bill may merely represent another government exercise in "ad hockery" and camouflage. I am concerned because I suspect the government

does not know what it is going to do about indexation and is merely trying to buy time with the legislation which is before us. It may be that information available to the government and its actuaries and senior financial advisers is such that they cannot come to a firm decision at this time. What they have done on the eve of an election is to introduce a measure and let it proceed to a certain stage in the process of its becoming law, knowing well in their hearts and minds that nothing will be done about it until after the next general election.
I have been concerned for some ten or 12 years about the relationship of the government as an employer to its employees in the public service of Canada. On questions of pay and pensions perhaps it is time that the cabinet recognized that there is no longer a need for a direct relationship between the policy-making structure, the cabinet, and the employee. Perhaps it is time we began to examine the usefulness of an extended concept of the Treasury Board which allows it such authority and stature as to make it the employer, and not this parliament.
If we look to those areas of this country where there is a concentration of public servants, for whatever reason-perhaps it is the longevity of the present government; 15 or 16 years is perhaps too long for one group of individuals to lead effectively-we find that the majority of public servants are represented by members of this side of the chamber. I do not put that forward or postulate it as too serious a matter, but it seems to me that, given present circumstances and the lateness of our parliamentary mandate, perhaps none of us, including members of the government, has any right to be meddling with the affairs of those who serve the public in this country. We should not be dealing in an ad hoc manner with amendments to the Public Service Staff Relations Act or any of the seven or eight acts which affect directly or indirectly the careers of the public servants of this country, certainly not in the dying months, weeks or even days of an already tired parliament. I think the public servants of this country deserve something a little better than that.
I said that I am concerned that we might be dealing with this matter on an ad hoc basis. We do not have the answers to the questions of concern to my parliamentary colleague, the hon. member for Hamilton West (Mr. Alexander). There are literally dozens of questions with respect to this matter which need to be examined in depth. That is why my colleague said that we are prepared to let this matter go to committee where we can conduct the type of scrutiny and review which is required, and I hope that can be done today.
I have some fear about legislation which enables the government to appear to the taxpayer as if it is getting tough with the public service, and to the public service as if it is getting away with a good break. That seems to me to be the wrong way to approach the matter. Much more thought and study have to be given to the relationship between this institution and the employees of the Government of Canada. To have parliament regulating the relationship between employer and employee in
February 14, 1979

the 1970s and 1980s is wrong. We cannot do it efficiently. As I have suggested, I think we should look much more seriously at the extended concept of a treasury board, not only in fact but also in appearance, assuming the responsibilities of employer. We should look seriously at removing from this chamber control over the constant ups and downs which face every member of the public service when issues of this sensitivity come before us.
I do not want to deal at any great length with the specific content of this bill as it relates to the 200,000 or 300,000 public employees in the country, but I would like to make a few comments about a segment of the public service which I think needs some special recognition. I refer to members of the Canadian Armed Forces.
I remind hon. members of the unique position of members of the Canadian armed forces in our society. It is unique in the sense that they do not enjoy the privilege of freedom with respect to their tenure. In fact most of them are forced to retire. The vast majority of them are forced into retirement at age 55. Many are forced to retire at ages even younger than that. I am talking about a particular group of public employees in the military category, the pensions of these individuals as they are affected by unique circumstances, and the relationship they have with us.
Canadian forces annuities are paid by the Department of National Defence from either the old defence services pension continuation account or the Canadian forces superannuation account, not out of the usual public service funds. The average retirement age for Canadian forces personnel is significantly lower than for public servants generally. 1 bring to the attention of the House again the involuntary or statutory nature of retirement from the forces of armed forces personnel.
I am aware that some form of Treasury Board-DND committee was established a few years back to make representations on matters regarding personnel compensation, including pension concerns. One cannot be certain of what real input this committee has. I hope this will be dealt with when this bill comes before the appropriate committee.
The Minister of National Defence (Mr. Danson) was in the chamber earlier today. Undoubtedly he is now out about his departmental responsibilities. I hope he will participate in this debate. The minister suggested snidely that the hon. member for Victoria (Mr. McKinnon) has been preoccupied with the question of privilege he raised this afternoon since the beginning of the year instead of asking questions about the military and the posturing of this government. I thought that to be beneath the minister and the usual attitude for parliament he displays. I thought the minister to be somewhat contemptuous. I wish he were here now so that I could say that to him. Very few have been as diligent in support of the Canadian military as has been the hon. member for Victoria.
While the minister makes comments and observations of the kind to which I referred, he does not bother to get on his feet to make a contribution on behalf of the 75,000 or 80,000 men and women in this country he represents and for whom he has a responsibility and obligation. I suggest to him, just as I
Pensions
would suggest to the President of the Privy Council (Mr. MacEachen), that if he wants to enjoy the title of deputy prime minister he should get up in the House and speak to members if for no other reason than to recognize that a member has the right to be heard and that his constituents have the right to air their grievances. His attitude is typical of the government's attitude in the dying months of this government. This afternoon, the question of the security of those retiring from the public service of Canada, and the security of oil supplies for a major oil refinery process in Atlantic Canada drew from him not even an utterance. I know he must consider the question seriously, but, being Deputy Prime Minister he should keep himself advised and he should rise in the House and participate in the debate so that we will know what is going on.
I say the same thing to the Minister of National Defence. Where is he in this debate? Perhaps in what is left of the afternoon he will join us, and I hope he does. I hope the minister will not only address himself to the concerns of those serving in the forces, but also, either here or before the committee, personally or through his parliamentary secretary, will address himself to the concerns of those who have already retired. The minister will be aware that many of these people have been what you could only call long forgotten and neglected individuals.
There are 60,000 annuitants receiving Canadian forces pensions today. My own province of Nova Scotia has more Canadian forces pensioners per capita than any other province and, indeed, only Ontario and British Columbia have more actual service pensioners than Nova Scotia. However, I am sure that all hon. members, regardless of the constituencies they represent, are familiar with some of the difficulties which these individuals face. It is interesting to note that the average pension paid to ex-servicemen is approximately $3,400 a year. Even with full indexing, I do not think anyone should fear that these people are suddenly going to be living in the lap of luxury.
I enjoy listening to my colleagues. I listened with interest to my distinguished colleague, the hon. member for Winnipeg North Centre (Mr. Knowles), when he voiced his concerns on this bill, and I agree with him. We should not only be talking about protection of income for public servants, the military and the RCMP; we should be talking about the extension of this principle to every Canadian, the right of these people to enjoy, as he so well stated it, not only protection against inflation but to enjoy with the rest of our society the increases in our standard of living.


Stanley Howard Knowles: Hear, hear!


J. Michael Forrestall: I differ with him because I think only the private sector should provide the means to do it. I do not think that the assumption by government of the means of production would in fact satisfy that. But at least at the end we are on the same track. How can a pensioner receiving $3,400 a year cope on that? That is absolute poverty, not relative poverty. If you

February 14, 1979
Pensions
even gave him only 10 per cent, you are only giving him $340 a year-plus $30 a month-plus $1 a day. Will that put him in the lap of luxury? God knows, the old 85 rule was a cancer on our concern for our retired forces personnel. Now they have made it even worse.
At present less than 45 per cent of Canadian forces pensions are indexed in some form. However, this percentage will almost certainly decline with the removal of the 85 rule and the gradual raising of the indexing age from 55 to 60. To a certain extent I can understand and appreciate the rationale for this change. There is no doubt that present regulations encouraged early retirement and provided opportunities for abuse, to the extent that some former well-paid public servants are able to receive indexed pensions while drawing top salaries in the private sector at a relatively young age. But it is one thing to take away the option of early retirement with indexing for those who have the choice, and it is altogether different for those in the Canadian forces who are forced to retire at an early age. For these servicemen there is no option of serving beyond the age of 55, except in the rarest of circumstances.
It will mean that some servicemen will have to go as long as 20 years on a static pension, with inflation rising as high as 10 per cent per annum during some of those years. Now we have in front of us a step being taken, ostensibly for the purpose of inducing one group of public servants to remain employed beyond the age of 55. It will have a deleterious and serious effect on the serviceman who has been waiting patiently for the increase in his pension that would normally come at age 55. Now this is denied him. It seems to me that not only has the serviceman been under a specific disadvantage but he will be under an even greater disadvantage under the provisions of this bill. Very much the same special case can be put forward for members of the RCMP.
There are those who will argue that the early retirement age of Canadian forces personnel, voluntary or not, provides them with an opportunity to add significantly to their pension income by taking on a second career. However, this is more easily said than done. The Canadian forces long serving pensioners association claims that up to 75 per cent of ex-servicemen cannot find gainful or meaningful employment once they have retired. I strongly suspect this figure is even higher today, with the general economic slowdown and the high rate of unemployment. Even in the best of circumstances there are profound difficulties for an individual attempting to start a second career at the age of 45 or 50.
I am convinced that the serviceman, like the vast majority of other public servants, in no way wants to be viewed as a drain on the taxpayers of this country. He is more than willing to pay his fair share to a financially sound pension scheme. Indeed, this is what most forces personnel assumed they were doing when they elected to pay an additional contribution toward indexing under the 85 formula. We remember the afternoon when that was sneaked through when we were ostensibly recalled to debate a railway matter, and were told that while we are here we might as well do something else. This was some years ago.

As members of parliament we have a very strong responsibility, in dealing with this bill, to ensure that we lay a truly solid foundation which will guarantee some measure of protection for all public servants against the continually rising cost of living, but I suggest to hon. members that we have a particular responsibility to those who serve us within the parameter of a very strict and rigid discipline. We order the lives of members of the Canadian armed forces in virtually every way. We do the same with our national police force. We tell them under what circumstances they can enter, and precisely under what circumstances they will leave. We thrust, into an other than a sound economic environment, men who have unique training capabilities and capacities. We pay them an average of $3,400 or $3,500 a year in terms of pension. That is all they get on the average. It is very easy to find the exceptions, the $25,000 a year pensions in all sectors of the Canadian public service, but the average is only $3,400. As I say, we thrust them into the labour market in an unique era in our economic development when job opportunities are rare and jobs are difficult to come by, and we expect them to find gainful and meaningful employment. What do we do in the private sector with an expert on torpedoes? We have a very particular responsibility to our Canadian armed forces personnel on their retirement.
I am in complete disagreement with the provisions of this bill which extend indexing yet another five years to age 60. I regret the minister has seen fit to mix all of these pension matters in one omnibus bill. They should have been dealt with separately. They have unique characteristics, and we tend to downplay the importance of one or another because they are lumped together.
We welcome the opportunities which lie ahead in committee to pursue, with every bit of our energy and talent, the many, many questions before us. We welcome the opportunity to hear the concerns of all professional organizations which come before the committee. Also we welcome the opportunity to take a look at the several reports which are in existence and on which we must arrive at some conclusion.
I have very little reason to believe that the bill will ever become law prior to a general election. In that context I return to the camouflage and the ad hockery of this measure. I do not think the government wants to do anything at this point in time. The government believes it has captured the best of two worlds. In fact it has got the public thinking that the government has given the public service a good swift kick, and public servants think they are protected. In reality neither of those two situations exist. The government is uncertain of itself in this particular area. The matter has not been studied sufficiently. Perhaps we have no right at this time in the life of this parliament even to consider tinkering or playing around with the superannuation accounts.
When this matter is before the committee I hope the Solicitor General (Mr. Blais) and the Minister of National Defence will encourage or send their parliamentary secretaries so that the ministers' views respecting members of the national
February 14, 1979

police force and Canadian armed forces can be made known to the members of the committee, and through them to the House, as well as to the members of the police force and the armed forces. I add that particular note to the remarks of my colleague, the hon. member for Hamilton West. In its consideration of these two particular aspects of the public service,
I urge the government not to overlook their uniqueness and the characteristics of their relationships with us. Also I urge the government to recognize the added responsibilities and difficulties which particularly members of the Canadian armed forces have when they attempt to obtain gainful and meaningful employment outside the services.


Some hon. Members:: Hear, hear!


Mr. Leonard Hopkins (Renfrew North-Nipissing East):: Mr. Speaker, I rise to speak on Bill C-12 because it affects many people in the upper Ottawa valley. I represent a large number of Crown employees at Atomic Energy of Canada, Ltd. in Chalk River, a large number of military personnel in one of the largest bases in Canada at Petawawa, and a large number of public servants in various departments located throughout the area.
We must remember that we have one of the best personally disciplined armed forces in the world. We have a lot of talent in the scientific field and in our public service generally. In the entire region of eastern Ontario which I represent, I appreciate and the region appreciates, what these people and these employment factors really mean to our over-all community. Without these people, our community would have to fall back on the timber trade, the limited number of factories that we have, and the commercial community, which latter of course would be much smaller.
During the last few years there have been many upsetting events throughout the world, not only of a military nature but certainly to a very large degree of an economic nature as well. Among these have been the uncertain conditions in the Middle East and the supply of energy to the western world. These uncertainties seem to be increasing as time goes on and, as a result, they have a very direct effect on the economies of western countries and inflationary trends. World conditions, along with the difficulties we have faced at home, have had far-reaching effects on many facets of our economic and social life. Bill C-12 is one example of how pressures have been brought to bear in one area of our domestic life as Canadians. There seems to be one assumption which we hear a great deal about today, that inflation is here to stay and everything will continue to rise for years to come.
Unsettled conditions in the past few years, and the unpredictable events which have happened in the world, have caused many problems for us and other nations. At the same time we must not rule out the possibility that certain events may lie ahead in the world picture today which can very well have a different effect on the economies of the western nations and, as a result, have a reverse effect on inflationary trends. For example, what will happen when the so-called third world countries become more self-supporting? What will happen
Pensions
when certain potential giants in the world today which are not highly industrialized become so in the immediate years ahead and goods and services become more available to all?
I was glad to hear the President of the Treasury Board (Mr. Buchanan) and others in the House mention the past diatribes of the National Citizens' Coalition which seems to look upon the Canadian scene as its own personal domain, and which is trying to mold public opinion to suit its own purposes. The one thing which can be said about the National Citizens' Coalition is that one can realize readily its membership has not suffered very much by the inflationary trends of the past few years. Otherwise, they would not be able to produce the full-page newspaper ads and the other means they use to snowball the public. Perhaps they should be looking at their own various company pension plans and indexing in order to find out just how they are treating their own employees in this day and age. The fact that Bill C-12 places the various public pension plans discussed in the bill on a self-financing basis, automatically should withdraw it from such vindictive and unjustifiable comments.
As long as I have been around Parliament Hill I have never ceased to wonder why bills in the House cannot be written up in legal jargon on one side of the page and in layman's language on the other. I have a perfect example of what 1 mean before me at the present time. I have had many inquiries with regard to this bill from public servants, employees of Crown corporations and from members of the Canadian armed forces.
The question that keeps cropping up from the Canadian armed forces is, just where do they stand with the annual rate of inflation having regard to their pension at sixty years of age, if in fact they are required to retire, say, at the age of 44, 47 or 51 etc? The answer to that question is buried in the legal jargon found on page 7 of the bill starting at paragraph (b) of proposed section 4(1), sub-clauses (i) (ii) (iii) (iv) and (v). The latter sub-clause to be found at the top of page 8.
If a corporal retires at age 44, he will receive at age 60 the cumulative rate of inflation for the total 16 years, and his pension will go up accordingly at age 60. As for the immediate indexing of his pension, this does not come into question, because when he retires now he does not receive the indexing at the age of 44, and will not under this present legislation, so nothing has changed for his immediate future. But the fact that the indexing is cumulative for him during those 16 years means that his pension will, in fact, be worth something to him at age 60, in the event the inflationary rate continues.
For brigadier generals, who are classified as general service, they will retire at age 55 so this bill will affect those who are retiring immediately or in the next few years. A general who is classified as, say a specialist, such as a chaplain, dentist, legal, medical, music, nursing, or personnel development, have a compulsory release age of 60, and generals who have reached that position by virtue of being commissioned from the ranks have a compulsory release at age 55. A full colonel in the

February 14, 1979
Pensions
general service retires at the age of 55. A colonel under the specialist title must retire at 58, and a colonel who was commissioned from the ranks must retire at 55. A lieutenant-colonel who falls within the specialist field must retire at 55, and a major who falls in the specialist field must retire at the age of 55. These are the people who would be involved immediately if they are about to retire. Those who retire within the next five years will be doing so on a prorated basis.
Under Queen's Regulations and Orders Table A, article 1531, it is stated that a sergeant retires at age 50, and could have up to 30 years' service. In a case such as this, his indexing will accumulate for the next 10 years and he will get the lump sum increase at age 60 added to his pension.
Because of the earlier age that most military personnel are. required to retire, as opposed to those people in the public service and those who work for Crown corporations, it would be unfair to a service man if he had to wait until age 55 before his pension even started to become indexed. By that time he would be far behind those who retired at age 55 today. This is why indexing starts for him on the very day he retires. We get into the old argument with some saying we should be keeping these people in the armed forces longer because they are trained and still active, while others say we must keep a younger armed forces and these people must retire at certain ages. Even within the military community itself this is a debatable point.
Proposed section 4.1 of this measure on page 10 provides for a three-year review of pension funds by the chief actuary of the Department of Insurance, who will then report to the minister whether the pension fund is viable to meet the rate of inflation of the day. If the report is positive, the cabinet of the day has no choice but to allow full indexing in accordance with the viability of the fund. If in the opinion of the report the fund is not viable, then the governor in council sets the rate for the next three years. As has been said many times before, this bill prevents anyone from retiring very late in the year and getting the full indexing for the entire year. If a retiring person has the "85" formula and retires at the end of June he will receive the indexing for one half of that year, and similarly for other fractions of any one year.
In order to offset some of the innuendoes raised by the National Citizens' Coalition, it cannot be said often enough that approximately 85 per cent of today's retired public service personnel and armed forces personnel retired on a pension of less than $7,000 per year.


Walter David Baker: What was that figure?


Leonard Donald Hopkins: I said that 85 per cent retire on pensions of less than $7,000 per year. I put that figure on the record last fall when the former president of the treasury board made his introductory remarks. Therefore it is important that these people receive more supplementation than those in the much higher categories. You will recall that last fall full indexing would have been allowed on earnings up to that $7,000 mark, and above that the figure in the proposal was 8 per cent in 1979, 7 per cent for 1980, and 6 per cent in 1981. However, because this particular bill did not pass last year, this item will

come up for review once again and later this year we will find out whether the amount is going to be around $7,500, or somewhere around $8,000 for full indexing. These figures are very familiar to me as I have many neighbours who have retired from the armed forces or the public service and find themselves in this particular pension income bracket.
Even though this debate today is related to pensions in the public sector, I feel, Mr. Speaker, that there is a real need to take a good look at some of the private pension funds as well. Ministers of labour at the provincial levels and the federal Minister of Labour (Mr. O'Connell) should discuss the problems faced by those who do not have a portable pension plan, in this day and age. In today's world, we find people in their 30's and early 40's by necessity moving around to find other jobs. In many cases a person might have 18 years with one company but, because he is laid off his job, or his position has become redundant, and he has to find another source of employment, he or she may lose that 18 years in the pension plan, and simply be given the amount he or she placed in the fund. Many of these pension plans fall under provincial jurisdiction, but our federal Minister of Labour, who is a very humanitarian type, could do a lot of good for private citizens across this country if he were to initiate such meetings with the provincial ministers of labour in order to provide portability of pension plans for every Canadian citizen across Canada who spent a reasonable amount of time working for one particular company and then found it necessary to move or, indeed, saw a chance for promotion in another area.
Again I wish to return to discuss a very serious problem that today faces many of our military personnel who retire at an early age. In many cases the trades that personnel in the armed forces practised for many years are not recognized once they arrive out on "civvy street". In many cases provincial departments of labour refuse to license mechanics, plumbers, carpenters and so on without further apprenticeship training. As a result they find themselves on the labour market with no qualifications of a legal nature but they do have the experience and knowledge of their field. I have had many people in my office discussing this very subject.
At the present time there is a military-civilian training accreditation committee working on this problem, but it still has a long way to go; even though it has made a very good start. In view of the considerable lapse of time between the time a member of the armed forces is pensioned off and the time he will reach 60 years of age for indexing, and under present conditions the age of 65 for the old age security, it becomes very necessary to provide him with a legal recognition of his skills so he can supplement his income during those crucial years.
In the United States forces, they quite often use the last year of a military person's career, if it is their wish to do so, to train them for a job when they get out of the service. I can only strongly recommend to the Minister of National Defence that this type of program be seriously looked at by the
February 14, 1979

Department of National Defence in Canada, and also that he might solicit the support of our good friend, the Minister of Labour, to deal with the provinces on civilian accreditation for the skills that members of the armed forces already have.
I wish to thank hon. members for their attention during my remarks. There are many other items I would like to discuss but I shall save them for committee stage.


Some hon. Members:: Flear, hear!


Mr. Eudore Allard (Rimouski):: Mr. Speaker, I welcome this opportunity to speak on Bill C-12, legislation aimed essentially at reducing the level of benefits afforded to federal civil servants. Its main objective is to reduce the widening gap between public service and private sector pension funds. Pressured by representatives from the private sector, the government decided to reverse course on something that was apparently recognized for all civil servants, the indexing of their pensions.
As many of my colleagues in this House, I feel that pay differentials between the private and the public sectors are becoming a source of injustice. How many private sector workers toiled all their lives to get a meagre pension after 40 years? The government showed leadership when it put forward the indexing of retired public servants' pensions, and it believed the private sector would follow suit. We are now backing out, we are taking away full indexing from public servants and substituting this new system. A part only of pensions will now get automatic indexing. The minimum could be $7,500 or $8,000 a year, when some 80 per cent of pensioners are getting less than $7,000 a year.
Citizens once again will fall victim to this shortsighted government. By the same token bilingual public servants who had been promised the bilingualism supplement until 1983 were told last summer that would not be the case. Starting from April 1, they will stop getting it. And unemployment insurance claimants are now getting a maximum of $144 a week instead of $160, since January 1, 1979.
Mr. Speaker, the unemployed suffer a loss of revenue of some $16 a week, although a great number of them have obligations and often many dependents, with consumer prices on a constant increase. The Health Resources Fund schedule to end in 1980 was retroactively cancelled as of 1978, without consulting with the provinces.
The new provisions contained in this bill will cost between $38 million and $48 million less a year. This saving is very much in the spirit of the hatchet policy, as I call it, under which they cut expenses as much as possible without knowing exactly why and without too much concern for future consequences and especially for the people who are left in need. And all this is done to respond in one way or another to the industrial and financial lobbies.
Pensions
Mr. Speaker, I believe that all Canadians would support the government wholeheartedly if they were asked to cut down on their expenditures to have a healthier economy. Unfortunately, these drastic cutbacks will not improve the problems of unemployment and soaring price increases. Last summer, when he announced his decision to cut back expenditures, the right hon. Prime Minister said that this was the policy of the three r's which were restraint, renewal and reallocation. He was the only one to sing this tune. Indeed, he is still the only one. Everyone understood immediately what he meant by restraint, or budgetary restrictions. Indeed, we did not have long to wait for the axe to fall. Our unemployed know this better than anyone else because they were the first victims. But what concerns me most is that we still do not know when, how, why and where the other two r's, renewal and reallocation, will come in. We are still waiting. Nothing much has happened since then.
Bill C-60 made everyone unhappy and the Pepin-Robarts report will probably be left on the shelf since it does seem to please the Quebec premier a lot more than the Prime Minister of Canada. As for the reallocation concept, which was supposed to involve a reorientation of government funds towards employment programs, it seems to have been applied on a very small scale for a country which has more than 8 per cent of its manpower on unemployment, or nearly one million unemployed, and mostly among people. Where is the employment strategy that we have been demanding for many years? The unemployed are yelling at the top of their voice, but can the government hear them? The government is doing nothing, and that right before an election. What then will it do after the election?
The big problem resulting from the budgetary cuts, at least immediately it seems to me, is the decrease in the purchasing power of the citizens, whether they be retired or unemployed. Indeed, those steps will result unfortunately in reducing the standard of living of many citizens who will progressively become less and less able to buy consumer goods, the effects of which will be felt throughout the economic system, and that at a time when the Canadian dollar keeps sliding down.
Mr. Speaker, I am not criticizing the government for realizing that the gap between pension plans in the private sector and the public sector was leading, over the long term, to a completely unbalanced and inequitable situation. I am only insisting on the fact that the needs and hopes of civil servants were built up, and now the means of meeting them are being withdrawn. The public sector must not tag along behind the private sector. Instead, the gap between the two must simply be reduced to fairer proportions.
There is precious little awareness of the fact that budget cuts will have unfortunate socio-economic repercussions. I have repeatedly spoken-God knows how often-about adopt-

February 14, 1979
Pensions
ing the guaranteed annual income. Even the Minister of National Health and Welfare (Miss Begin) recognizes that such a program is desirable, though impossible at the present time. I say that a guaranteed annual income is not too heavy a load to bear when one considers the amounts already spent on unemployment insurance benefits and welfare. That would be a much fairer solution, a solution that would apply to the whole population and would not encourage disproportionate gaps, such as those we now know, between the public and the private sectors.
I wonder how much electioneering there is in this bill as we approach a federal election. Indeed in introducing this bill the government is trying to look good before bankers and financiers and part of the people. Those measures are only a first step toward the pure and simple abolition of escalation clauses in all federal plans. And, given those measures, private businesses will be very happy not to have to improve the escalation provisions in the pension plans of their own employees. Among other points of dispute between the government and civil servants, the principle of early retirement was mainly criticized. The civil servant who must retire involuntary because of a cutback in staff or his age cannot find another job and is helpless to fight inflation. There again, as always, private sector employees in the same position will face new restraints from the employers.
This bill starts from an entirely understandable purpose but uses means not likely to maintain harmonious relations in the public service. If the government backtracks too much on this, as it is doing with Bill C-12, the abolition of bilingual bonuses and the lay-offs of language teachers, we will soon have an explosive climate in the federal public service. That would be unfortunate because our public servants are competent and well organized.


Walter David Baker: Mr. Speaker, as I understand the situation I am the last speaker from this side of the House and this matter will be going to the committee shortly.
I want to reiterate on behalf of the official opposition, the Progressive Conservative party, that it is our intention to get this bill to committee as quickly as we can so that the examination that was spoken of so eloquently by the hon. member for Hamilton West (Mr. Alexander), in opening the debate for the official opposition, can continue. That kind of examination is absolutely essential in terms of this legislation.
The hon. member for Ottawa West (Mr. Francis), in the course of his speech the other evening, asked what the position of this party was with respect to the idea of pension indexing in the public service of Canada. He made some very flattering remarks about me, which I appreciate, and given the appropriate opportunity I will reciprocate. I do not like to quote myself, but in 1973 during the course of a debate I spoke on behalf of the Progressive Conservative party with respect to the position that was put before the House by the then president of the

treasury board. This was referred to by the then hon. member for York-Scarborough. The bill passed through all stages of the House within a few days. In fact I think second reading commenced on September 7 and it was back in the House on September 12, which was a very short period of time for a significant piece of legislation.
As you know, the amendment that was before us at that time respected full indexation on public service pensions, that is the range of the public service we speak of in the Public Service Superannuation Act. I said at that time:
Members of the government certainly are draftsmen of the bill, but if you examine the history of public service legislation you find that this government and its predecessors were really dragged, kicking and screaming, to the point where they finally gave in to what, over the years, were the reasonable demands of public service staff associations, the officers of public service associations, retired public servants and others who have written to people like myself and the hon. member for Winnipeg North Centre (Mr. Knowles).
As I say, the government has finally given in and seen the reason for positions that have been taken by my party and, for that matter, the NDP with respect to this matter.
What happened on that occasion? Let us cast our minds back to that time. The president of the treasury board came into the House of Commons and indicated to us in a short, succinct statement that it was the intention of the Government of Canada to move in the direction of full indexation of pensions. He did not indicate to us in any way that there was any problem with respect to funding. He did not indicate in any way that we would be facing a bill in 1979 which changes the principles that were accepted by the House of Commons in 1973.
I believe the House of Commons and I at that time relied on a few things. First, I relied on the proposition that the president of the treasury board of that day knew what he was talking about. That may have been my first mistake. Second, I relied on the fact that behind that statement of the president of the treasury board there had been sufficient studies undertaken by the Government of Canada and they were prepared to come to the House with respect to that matter. That position was put by me on September 7, 1973, and later on September 12, 1973.
On third reading of the bill at page 6472 of Hansard I said this:
-it is my intention to be the only spokesman for my party at this final stage, and to expedite the passage of the measure.
That was the position put in 1973. With respect to the plight of people who are retired and who are no longer in the work force, people who cannot bargain for themselves, people who are subject to the ravages of inflation and other things, that has to remain the position. That must remain the principle that would guide any reasonable person looking upon individuals who may well be otherwise unprotected with respect to inflation. That is something I want to point out to the House. Why? Why is the principle of indexation relating pensions to the cost of living a reasonable one? It can be put in many ways.
I do not think it is appropriate in a reasonable society to adopt a position that people who cannot fend for themselves
February 14, 1979

ought to be left treading water in a stream which flows backward. That is akin to going downhill. I know the hon. member for Welland (Mr. Railton) is anxious to tell the House that he knows which way water flows, and I commend him for that.
To come back to the subject, this is an important provision. That is the long and short of it, why we discuss indexing at all.
I looked at the speech made by the hon. member for Winnipeg North Centre (Mr. Knowles). In the course of his speech on this bill in the House on February 12, 1979, he said this:
I begin by saying I would be happy if the bill were not before us at all;-
What he is saying is that he would like the principle of indexing established in 1973 to continue. He is also saying that he would like it if the economic circumstances of the country were such that the government would not feel moved to dispense with the principle. He would like to say that he did not want to stand in this House and say that the public service is fortunate that it did not suffer worse.


Stanley Howard Knowles: Would the hon. member permit a question?


Walter David Baker: When I am finished. Let me continue:
-1 would be quite happy if we continued with the present plan which calls for full indexing of the various pensions covered by the Supplementary Retirement Benefits Act. However, there has been a vicious campaign and many people have been taken in by arguments that certain individuals are being favoured as opposed to others.
If there is a fear in the mind of the hon. member for Winnipeg North Centre about the figures that might be produced in the future, that is something he can articulate. There is a nagging fear in his mind about what the future may hold.
In his speech the President of the Treasury Board (Mr. Buchanan) branded as false the position of the National Citizens' Coalition. I share his views with regard to the campaign that has been launched. Notwithstanding that, the hon. member for Winnipeg North Centre is harbouring some doubt as to whether the government may have succumbed to the siren song of the National Citizens' Coalition.


Thomas Lefebvre: No.


Walter David Baker: The Parliamentary Secretary to the President of the Treasury Board (Mr. Lefebvre) says no. If the government says no then it is saying that the National Citizens' Coalition is wrong, and it is important that at the committee the government demonstrate where it is wrong. If the National Citizens' Coalition is in fact wrong and if that can be demonstrated, that there is no need for a change in the law, the law should not be changed.


Mr. Harquail:: What is your position?
Pensions


Walter David Baker: The hon. member for Restigouche (Mr. Harquail) asks what is my position with respect to the National Citizens' Coalition. I will tell him my position. It has been a callous campaign, a campaign of half-truths. Hon. members will recall that it has been a campaign similar to that conducted on another occasion which brought disapprobation upon this House of Commons and its members. They have done exactly the same with the public service.
I would be the last one in the House to say that every public servant is not lazy, is not polite, and is not working his full share. There are public servants who tell me that there are others in the public service who are that way. For every one in the public service like that, it brings disapproval by the public. However, in general the public service of this country is reasonably good.
What public servants want is the opportunity to express themselves, to feel the challenge that others feel in various aspects of the community. There is nothing wrong with that. However, when I receive clippings from the National Citizens' Coalition I have to regard that as a result of some dishonest advocacy, something I flatly condemn.
There are some real changes to be made with regard to the public service. There ought to be a challenge for public servants. They should work to capacity. There should be changes in the bargaining procedures and a whole host of things that affect public servants. The cause of a public service and its respect for itself are not advanced in any way by the kind of attack that has been made by the National Citizens' Coalition. It is a matter of prejudicial guesswork at best, and I am being lenient when I call it that.
The hon. member for Restigouche wants to know my position. I will tell him. A public servant has told me directly what he thinks about the national coalition. This is what he said:
Dear Sirs:
I'm mad as hell about this type of misrepresentation with respect to the public service indexed pension-civil servants indexed pensions.
He went on to add, and I commend this to the Minister of Finance (Mr. Chretien):
-and government use of my pension contributions at ridiculously low interest rates.
The Minister of Finance might want to take that message to heart when considering this matter. Other speakers in the debate have pointed out the questions that should be asked in committee and the inquiries that should be made. The hon. member for Hamilton West did a service by laying out those questions.
This House should never again fall into the trap of accepting what this government says about anything. The government has in effect said that this is the best it can do. We must examine that. There is a difference of opinion in this House. In fact there is a difference of opinion on the government side as to whether this is the best it can do.
I suggest that hon. members reread the speech of the hon. member for Ottawa West. If the figures that he gave are true,

February 14, 1979
Pensions
then he drove a horse and cart through the speech made by the President of the Treasury Board. On the other hand, if the position of the President of the Treasury Board is correct and we have to change the law so that we fully index for 85 per cent of members of the public service who retire, then his predecessor, the Hon. C. M. Drury, when speaking in this House in 1973 misled this House, the public service, and the people of Canada. That is why we need to have this kind of examination. We can no longer accept at face value what the government says.
We have to examine ourselves with regard to how we feel on these principles. We must ask ourselves whether this bill is fair and proper in light of circumstances revealed at that committee, and given the difference of opinion with regard to changing the law and therefore the benefits. Eighty-five per cent is not a bad batting average for any government. I concede that. That is one of the reasons we will send this bill to committee.
Yesterday I received a call from someone who will be just outside the 85 per cent, just above the $8,500 figure with regard to his pension. The other evening the President of the Treasury Board was optimistic enough to say that indexing may go up to $8,000 or $8,500 on the fully indexed portion. This man is just above that. I cannot bury a constituent in statistics any more than 1 can bury an old age security recipient in statistics and advocate a means test for OAS. Nobody on the other side will do that, and I hope nobody expects us to do it. That is why we must examine what the hon. member for Ottawa West says to see whether there is an embarrassment of riches in that plan, whether the bill is really necessary, and whether the level of benefits should fall. That is the examination which is to take place. That is the position taken by the hon. member for Hamilton West. We are entitled to these answers. The public service is entitled to these answers.
It is important that we do not follow with respect to this bill a process of perfunctory consideration and quick passage through committee. It is important that public service organizations, and those outside the public service as well, should have an opportunity to give evidence before the committee. It is important that what happens in the committee is not a repetition of what happens in committees from time to time when full examination is not allowed. We cannot get to the truth completely in the House of Commons even though members do their best; everyone knows that the major work of parliament is not done here but in committee where matters can be pursued in detail.
I have another cautionary word to add. It may be satisfactory that we can accept that things look pretty good for the next biennial period, and, who knows, that they may well look good for the triennial period after that. I hope this is the case. But we are not really looking to the next triennial period, we are talking about a succession of other triennial periods down the path. I don't think we can grasp this bill to our bosoms and

accept it as the last word. We have to understand that we are not looking just to the next election or beyond the next three years or the triennial period after that. We are looking well into the future. What we are doing here affects the situation and the future of very large numbers of people.
We are prepared to accept this bill today provided there is to be the careful examination of which I have spoken. I am not prepared to fall gratefully into the arms of the government with respect to this measure. As far as the government is concerned, I am from Missouri; I have got to be shown. I have joined the host of Canadians-or they have joined me-who feel the government has mishandled the economic situation. I join with the 62 per cent of Canadians who feel the government has mishandled the economy. That is the result of the latest Gallup poll. That's good news for the Liberal party. That figure is more than double the 27 per cent who approved of the way in which the government has acted. That is the latest report; it appears in the Citizen if anybody wants to read it. It is dated February 14, 1979.


An hon. Member:: Valentine's Day!


Walter David Baker: There is a myth about the economic performance of this government. There used to be some economic management. I am sure the late and venerable Louis St. Laurent must roll over in his grave when he considers the economic performance of the present government compared with his.


An hon. Member:: May he rest in peace!


Walter David Baker: Yes, may he rest in peace. Do not associate him with the Liberal party of today because if you do you will tarnish the memory of a fine public man.
The poll is a very interesting one. It shows that a hefty 71 per cent of the people in western Canada are unhappy about the government's economic management. So are 70 per cent in Atlantic Canada and 65 per cent in Ontario. Given the percentage of error attached to Gallup polls, a rate of 4 per cent, this amounts to a condemnation of the ability of the government to convince the Canadian people that it can handle anything. It is most important the government should realize that with respect to this kind of legislation which affects the future plans of public servants as well as the plans and lives of public servants who have retired, not to mention their families, the widows and the children of public servants-and I define the public service broadly here as including both the RCMP and the military-that we must examine very carefully the statements which have been made in this House and the statistical data behind those statements.
Given the government's track record with regard to public service pensions, let alone other things, I do not think we ought to accept at face value that what the government says is really the case. Not that they lie. I am not suggesting they lie, but they have been known to be grossly mistaken.


Lincoln MacCauley Alexander: And less than honest.
February 14, 1979


Walter David Baker: I was not about to make that suggestion, but since my hon. friend has made that interjection I will say that it might be appropriate. The House of Commons, on behalf of the public we serve and on behalf of the public service, which is part of our responsibility, should examine this plan so that we are not required to go through this kind of exercise again.
I want to say something, now, with respect to the future of this country. A number of people have made known their views with regard to that future in terms of pension payments and the way in which governments at various levels are able to consider at least providing "hedges" in pension plans for their retired workers. There has been a great outburst in the community because it is felt that similar provisions are not possible on the private side. That is a matter of debate. It is a question we all have to ask ourselves as public men and women, people who are here for a time to represent others, to represent the community. We have to be prepared to assess the truth of these assertions-to consider whether it is, in fact, impossible. If we do not examine them there are others in the community who will do so.
Is it the case that in a country as rich as ours, with a population as ingenious as ours, with corporations whose leaders are as ingenious as they are, that it can be said without doubt that we are not capable of devising ways in which those who are not relying on public sector pensions and who are relying to a large degree on private sector pensions can find some ways to build into their pensions provision against the ravages of inflation? I might point out that this would not be necessary if governments could control inflation. This is a situation which places a tremendous onus on governments everywhere. That is the bottom line in the pension business. If inflation is contained to a small amount the argument about indexation loses its force.
If people outside the work force face the inflation which can be called ravaging inflation-those are the words which have been used to describe inflation as it affects those people today-and if they are relying to a great extent on pension plans which are not related in some way to the cost of living, then the fact is that those people are falling further and further behind. I believe it was the hon. member for Ottawa West-someone did-who put some figures on the record in this debate with respect to the fact that our population is aging. The aging constituency of all of us in this House is growing. The sheer political power of that constituency is growing. As it grows, its voice within the country will grow along with it. That constituency will put upon us a responsibility which we may not be prepared to look at now, but a responsibility will be put on us and others like us to protect those who are less fortunate in that broad economic sense because they are not in the work force. That is something with which we will all have to deal.
I think it is important that this debate be conducted in that atmosphere. Let us face the fact that those in that constituen-
Pensions
cy face a major problem. Let us not think that the critics of indexation are able to silence the debate in the country merely by saying that as far as they are concerned it does not exist and that they will not look at it. That debate is going to go on in this country. It is being carried on now. It has been carried on, and if hon. members have not read it, I commend to them the brief which was filed before the Royal Commission on the Status of Pensions in Ontario by Eckler, Brown, Segal and Company Limited, in which this question was addressed and in which the question of costs was addressed. We will eventually have to address this matter.
I also commend to hon. members an article published in 1979 in papers on "Canadian Public Policy" by Professor James E. Pesando of the Institute for Policy Analysis of the University of Toronto, because he addresses the question of the ability of the private sector to maintain itself in times of inflation. He argues that indexing is a feasible although challenging objective. He had something to say about the Tomen-son-Alexander report, which I think should be taken with an appropriate grain of salt and subject to examination by the Standing Committee on Miscellaneous Estimates.
Professor Pesando said this, and I am quoting from page 84 of the article:
To sum up, the procedures employed by Tomenson-Alexander have the effect of artificially (and, ultimately, arbitrarily) reducing the liabilities in respect to the real benefits and increasing those in respect to the indexing provisions by an equivalent amount. This result is of crucial importance if the cost of the indexing provisions as identified by Tomenson-Alexander is used as an argument against the indexing of private pensions.
I hope the two representations to which I have referred will be considered by the committee because we have to consider this bill while recognizing the realities of Canadian society. I cannot believe that the pension industry in Canada, which is reasonably and appropriately led by men of wisdom and business acumen, despite their reluctance to address the problem-and there is some reluctance-is in fact not looking at the problem. I suspect that over the next ten or 15 years as the clamour develops, whether we like it, whether they like it, or whether anyone likes it, we will be driven to consider how this can be accomplished and, in its accomplishment, what the role of the government will be in this undertaking.
In the context of this debate I do not think we can forget that there is editorial opinion. It may be wrong. I do not know. Within the last year or two an opinion was expressed in an editorial which appeared in a newspaper in the United Kingdom. That editorial commented on a speech made by the head of the United Kingdom Actuarial Society. In that speech it was stated that we must regard pensions less as an actuarial problem and more as an economic problem, and that we ought to look more at the ability of a country to bear the pension burden, and examine it from that point of view.
If we do not get inflation under control in this country, I suggest that we will not be able to withstand the pressure applied by those who find themselves exposed more greatly than they are today and who will come to legislatures for remedies. That is a long-term issue from which this parliament and succeeding parliaments cannot turn away. What will these
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February 14, 1979
Pensions
people ask for? They are going to say that the gross national product is growing at a certain rate. They are going to look at the portion of that gross national product which is taken up by old age security and other pension payments, and they are going to say that that portion is quite small.
They are going to say that as the gross national product grows their benefits should certainly also grow, because they will not be in a position to protect themselves. They are going to say to us that something must be done to ensure that they are not exposed. I just wonder what our argument will be. What will we say to them? Will we say that working Canadians will have the benefit of increased salaries to meet inflation but that these other people will not have those benefits? I just put the unfairness of that proposition to the House as we look down the road at a problem which will gradually drive us down into the bottom of the funnel. We are going to have to face this problem. Part of the solution, of course, is to wrestle inflation to the ground. The wrestling match with this government is over, and the government has been carried out of the ring, out cold.


Ramon John Hnatyshyn: Kayoed.


Walter David Baker: That is one battle this government is perhaps incapable of fighting, and the people will make that judgment, but the issue to which I have been referring will still be there for us to face. If governments are not yet thinking about it, they should begin to think about it because I am satisfied that in the bowels of the insurance industry and in the bowels of the pension industry people are thinking about it.
I had the privilege today of sitting down for lunch with prominent Canadian businessmen, the same group some hon. members opposite met with for dinner last evening. Next year it will be our turn to go to dinner, and it will be their turn to go for lunch. A question was put to the president of a prominent Canadian company.


Stanley Howard Knowles: We were not invited.


Walter David Baker: That demonstrates their good taste.
The president of that Canadian company was asked what his company does for its executives on the company pension plan with respect to the cost of living.


An hon. Member:: They give them shares.


Walter David Baker: That is one of the things the company does. That is common with large corporations. Some people are given shares, share options, hedges and benefits of that kind. However, in the case of people who retired some time ago, this officer admitted that if they were ad hoc adjustments and if there were no adjustments in their pensions for the cost of living some of these people would be living in genteel poverty. I ask the House to consider this. That was a discussion with an executive about executives. I ask the House to consider how that is multiplied again and again by

those who are not executives, who do not have the opportunity of indexation by stock option. When you consider that, sir, I think you realize how important this debate is. It is certainly important to the public servants of this country.
As my constituent put it to me last night, "I want to know why in 1973 I was promised one thing and in 1979 I am given something else". They are entitled to that answer, sir. Eventually this House and our successors in this House will be faced at the gates of this place with those people outside who are not in the public service an who will ask the very same question with respect to themselves. I hope that there is something going on within the government of this country that will help-


Mr. Railton:: We are looking after it.


Walter David Baker: I am not so sure they are looking after it. They have not looked after anything else, but I do hope they are looking after that and that there is something going on within the government, because in retrospect, if you consider it carefully, it can be legitimately argued that if there is not some way that everyone can share in the growth of the national economic pie, assuming that it grows, then those who do share in the growth of that national pie are really robbing those who do not. That is the simple case that has to be made as we look at this legislation. I do not think this House can afford to look at it in any other way, and if we have any sense of balance that is exactly the way we will look at it, and our deliberations in the committee will be aimed at getting at the truth.


Mr. Deputy Speaker:: Is the hon. member for Winnipeg North Centre (Mr. Knowles) seeking the floor to ask a question?


Stanley Howard Knowles: May I, sir?


Mr. Deputy Speaker:: The time allotted to the hon. member for Grenville-Carleton (Mr. Baker) has expired. The hon. member may ask a question with consent of the House. Does the House allow the hon. member to put his question?


Some hon. Members:: Agreed.


Stanley Howard Knowles: Mr. Speaker, in view of the generosity of the House in allowing this extra time, I will not ask the question I was going to ask about 1973 being the year of a minority government. Rather, I will put a question to the hon. member arising out of the telephone call he said he had from a constituent who is just over the $8,000 figure.
I wonder if the hon. member would join me, and I am sure that members on the government side would join me too, but I think it is more useful if it comes from the opposition side of the House, in asking the press to make it clear that even if Bill C-12 goes through, there still is escalation for that portion of
February 14, 1979

pensions above $7,500 or $8,000. It has been clear, but I am getting the same phone calls and the same letters. I had a letter this morning from a pensioner who was afraid that once he reaches the $7,000 level there will be no more escalation.
Will my friend join me in making it clear that the bill, as we understand it, provides for full escalation up to the threshold of $7,500 or $8,000, and that the portion of pensions above that, which pensioners have now or which they will get after escalation, will be indexed by a figure slightly less than the full cost of living index?


Walter David Baker: Mr. Speaker, I think it is very important that that statement was made by the hon. member for Winnipeg North Centre (Mr. Knowles). I certainly join in that statement and I am certain that other members in the Flouse will join us, because we do not want that kind of confusion to continue.


Thomas Lefebvre: Mr. Speaker, I have no hesitation in joining the two hon. members in affirming that fact.


Mr. Gauthier (Ottawa-Vanier):: Are we on a point of order, Mr. Speaker?
[ Translation]


Mr. Deputy Speaker:: Order. I must point out that the hon. member for Winnipeg North Centre (Mr. Knowles) was recognized to ask a question. We are not in committee of the whole; if the hon. member wants to put a question accepted by the hon. member for Grenville-Carleton (Mr. Baker), he should put it.

Is the House ready for the question?


Some hon. Members:: Question.


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

Hon. Jean Chretien (Minister of Finance) moved: that Bill C-37, to amend the statute law relating to income tax, to amend the Canada Pension Plan and to provide other authority for the raising of funds, be read the second time and referred to Committee of the Whole.
He said: Mr. Speaker, this bill, together with the bill to amend the Excise Tax Act, implements my budget measures. The major objectives of those measures are, first, to maintain and accelerate growth in demand through fiscal stimulus; second, at the same time to put downward pressure on prices and costs in order to protect our renewed competitive position; third, to provide further stimulus to capital spending and research and development so as to improve industrial productivity and efficiency and to ensure continued growth; fourth, to assist particular sectors in overcoming structural problems;
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fifth, to provide more support for regional development; and sixth, to take action to maintain the integrity of Canada's tax system. My budget has been described as a responsible budget. The tax measures before us implement the budget objectives in a responsible way.
The bill reduces taxes for working individuals. It does this by doubling the limit for the employment expense deduction, increasing it from $250 to $500 a year. Being related to employment income, this measure provides additional incentive and reward for working Canadians. It will reduce federal and provincial tax by some $365 million in the 1979-80 fiscal year.
But this is not the only element acting to spur growth in disposable incomes of Canadians in 1979. You will recall, Mr. Speaker, that tax indexing will result in a $1.6 billion reduction in federal and provincial income taxes. I also announced a reduction in the contribution rate for unemployment insurance. I have reduced the federal sales tax from 12 per cent to 9 per cent, thus boosting purchasing power by about $1 billion. For a married family earning the average industrial wage, these measures taken altogether should raise real after-tax disposable income by over two and a half per cent. Canadians will pay a lower share of their total income in taxes in 1979 than they did in 1978. The stimulus provided by these measures will support consumption demand over the coming months. As well, strong stimulatory forces are at work as a result of a more competitive dollar. More demand means more capacity utilization and more incentive to investment.
I would like to refer to two other tax changes affecting individuals. They are not as large as those I have just mentioned but, in their own way, are just as important. Hon. members will recall the concern expressed at the time of the last budget over the taxation of RRSPs in cases where both parents die leaving minor or disabled children. I have found that this is a valid concern. This bill provides that, in these cases, specified amounts may pass to dependent children or grandchildren without being taxed in the hands of the deceased. The amounts will qualify for forward averaging for tax purposes in the hands of the children. The allowable amounts are larger for younger children than for older ones, with a maximum of $125,000. In the case of disabled children, the limit is a flat $125,000 regardless of age. The tax benefits from this can amount to tens of thousands of dollars. This bill also includes provisions to permit those who are disabled or whose spouse is disabled to mature their RRSP funds before they reach age 60. Such persons will now be able to purchase an annuity or an RRIF at any time.
'
A strong industrial structure is vital to Canada's future. A more efficient industrial structure means lower costs and increased competitiveness. The government has put in place a large number of tax measures to spur industrial development, to help particular sectors, and to promote activities which are of importance to industry. Hon. members are familiar with the two-year write-off and low federal tax rate on manufacturing. The budget papers indicate that, as a result of these measures,

February 14, 1979
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corporate income tax on Canadian manufacturing as a per cent of profits is some 10 per cent lower than is the case in the United States. The federal tax incentives for mining result in a preferential federal tax environment. Past budgets have provided tax incentives which make investments in research and development much more attractive. These are but a few examples of the many ways the tax system plays a role in economic development and support.
Prior to formulating my budget I talked with representatives of many sectors. The recommendations of the sectoral task forces were thoroughly reviewed within my department. 1 benefited greatly from these efforts. Many of the sectoral task forces made recommendations concerning the investment tax credit. I have responded to those recommendations. This bill provides an indefinite extension of the federal tax credit past June, 1980. Now business will be able to plan and develop even their largest projects in an orderly fashion. Moreover, the measure will give them benefits amounting to $500 million for investments made after June, 1980.
This bill also enriches the tax credit. The basic rate of credit will be increased from 5 per cent to 7 per cent. Also other rates are increased. The benefits from the increased rates of credit apply from November 16, 1978.
These changes to the investment credit promote investment in some very important sectors. The benefits go to manufacturing and processing businesses, the petroleum and mineral industries, logging, farming, fishing and grain storage. As a result of the extension and enrichment of the investment tax credit, I look to measurable improvements in Canada's productive capacity, better growth, productivity and cost performance over the medium term.
Provisions of this bill extend the 7 per cent credit to apply to long-haul transportation equipment. Items such as aircraft, inter-city buses, long-haul trucks and trailers, vessels and railway rolling stock, track grading and other equipment will qualify. The tax benefits involved amount to about $30 million annually. Canada's transportation system is one of the sinews of the country. It will be stronger and more efficient as a result. Efficiency will mean lower costs. Also this measure will promote better services to passengers, with more modern equipment.
Regional development is a cornerstone of Canada's structural economic policies. Regional development grants are a prime example of our commitment. Fiscal equalization has long been a part of federal-provincial financial arrangements. The equalization program will provide some $2.6 billion to qualifying provinces in this fiscal year.
We have used the tax system to foster a better distribution of economic activity across Canada's regions. This bill adds to the regional tax incentives already in place. It doubles the investment tax credit in the Maritimes and Gaspe from 10 per cent to 20 per cent. This is equivalent in its effects to a cost reduction of 20 per cent of the price of eligible machinery, equipment and structures used in these areas. In other desig-

nated areas the credit rises from 7.5 per cent to 10 per cent. These areas cover most of Quebec outside the Gaspe, northern Ontario, Manitoba, Saskatchewan, parts of northern British Columbia and northern Alberta, as well as the Yukon and Northwest Territories. While it would be wrong to expect immediate results, I believe this type of distinction by region can lead to significant improvements in economic potential over time.
Also I should like to emphasize that these regionalized credit rates strongly support our sectoral policies. Mining and pulp and paper, two of the sectors toward which my budget was directed, both will benefit generally from the higher credit rates of 10 per cent and 20 per cent. As a result of the enrichment of the investment tax credit and its indefinite extension, the private sector will earn over $1 billion in benefits in respect of their investment in the first full year in which the changes are in effect. Some $500 million will be claimable immediately in the year while the remainder, mostly representing credit earned by non-taxable firms, will be carried forward to reduce tax in subsequent years.
Let me turn to research and development. Over the recent past the government has taken a range of substantial tax actions to promote R and D. Adequate incentives for R and D have been stressed by the sectoral task forces and others. Canada must ensure a first class R and D effort. More R and D in Canadian industry is essential for good economic performance over the medium term. This government is committed to doing its part to achieve this goal through a variety of measures including tax incentives, direct grants and subsidies. The bill adds to the support already in place. The basic investment tax credit for R and D now will be doubled. It will be higher than for other investments. Since 1977 the after-tax cost of R and D has fallen by half. This is a result of measures taken by me and my predecessors.
While it is too early to evaluate the full effects of these measures, preliminary indications are that firms are showing interest. They are looking to stepping up their R and D effort. Some firms which have not made a commitment to R and D are starting to do so.
I want to direct Your Honour's attention for a moment to R and D of small firms. It is a matter which has been raised in the House before. Unfortunately small firms do not themselves engage in an adequate amount of R and D. For the health of the future Canadian economy they must be encouraged to do so. This bill addresses that problem directly. It contains an R and D credit of 25 per cent for small firms. It is the richest of any tax credit applying to investment. I know of no analogous measure in another industrialized country. What matters for ensuring improved R and D performance is that R and D be made more attractive relative to other investments the firm might undertake. It is noteworthy, therefore, that for small manufacturing firms the relative cost advantage in favour of R and D over other investments is greater than is the case for large firms.
February 14, 1979

As a result of these measures the after-tax cost of R and D can be as low as 15 cents in several provinces. This is without taking into account any grants that may also be available. The R and D tax measures will provide a tax reduction of $100 million over and above the value of the immediate fast writeoff for R and D that has been in place for some time. Several of the measures also reduce provincial taxes. Successful R and D has a high rate of return, higher than many other investments. Research and development is, however, risky. I believe that these tax incentives ensure that the risk does not lead to underinvestment. They produce a tax environment that is very favourable to attaining Canada's R and D goals.
This bill contains other tax cuts to aid important sectors of the economy. I turn first to resource taxation, and mining in particular. Federal and provincial ministers have finished a review of mining taxation. Let me say in passing that this review, in my opinion, represents a prime example of the kind of co-operation the Canadian federation can and should accommodate. The review report makes instructive reading, and I commend it to hon. members.
As I said in my budget, the report shows that the federal tax system is basically sound. In 1975, the latest year for which actual data are available, the federal tax was only some 14.4 per cent of industry profits. In the same year the federal tax rate on manufacturing was 23.6 per cent, which itself was a preferential rate compared with other industries. Under the federal system, no tax is generally payable on new mine investments until capital is recovered.
The federal share of total government revenue from mining is only some 33 per cent. This compares with our share of over-all corporate income tax from all sectors of some 70 per cent. And the federal share of revenues from mining has been declining. I do not believe, therefore, that an unbiased observer would claim that the onus was on the federal government to reduce its taxes dramatically even if further tax reductions are in order.
Nonetheless, I did decide, in framing my budget, that some additional incentives for new mine development were warranted, and I wanted to provide leadership to the provinces in this matter. Accordingly, this bill contains three major changes affecting mining. First, development expenditures will now be written off at 100 per cent immediately. Second, townsite and other social capital expenditures at new mine sites will earn the depletion deduction of one third of their cost. Third, mining will be a major beneficiary of the investment tax credit and of the indefinite extension of the pollution abatement incentive. The total value of all of these measures to mining is some $60 million per year.
I am pleased that I was able to take the lead in acting upon the principles put forward in the resource taxation report. While I, of course, cannot be sure, I expect and hope that provinces will take up this lead. I want to reiterate that the federal government will pursue the spirit of co-operation established during the review. This government will seek to avoid tax system changes that create undue uncertainty, and it will
Income Tax
not take tax action to offset the benefits from any tax reductions that provinces introduce.
There are other measures in the budget directed to particular sectors. In oil and gas this bill provides for continuation of drilling fund incentives. They have been very successful. The amount of funds going into exploration and development m oil and gas annually, through these funds, has grown from nothing to up to $500 million currently. As a result of the extension of the measure a continued high level of exploration activity will be encouraged.
The pulp and paper industry will receive significant tax benefits over the coming years from the extension of the two-year write-off for pollution abatement equipment. This will be accomplished by changes to the income tax regulations. Reducing pollution is an important goal. This measure acts to lessen costs to industry of installing pollution abatement equipment. The pulp and paper industry will also benefit from the enhanced investment tax credit. The credit applies to pollution abatement investments as well as other investments in this sector.
Housing is benefited by extension of the preferential tax treatment of multiple unit residential buildings. It also benefits from the reinstatement of deductibility of interest on property taxes on land awaiting development. Conditions in the housing market are different than in 1974 when this deductibility was denied, and it is time to reinstate it.
[ Translation]
Mr. Speaker, the bill under study includes important amendments which will affect businesses. The amendments I already referred to would reduce corporate taxes. Others, would have the effect of amending our tax legislation according to the development of our economy. They would allow us to make sure that federal taxes will remain fair and equitable for all Canadian taxpayers. One of the main responsibilities of a finance minister is to make sure that the taxation system will remain equitable. Bill C-37 would allow us to achieve that goal. In that context, I would like to have a look at the provisions of the bill which are related to income bonds and term preferred shares. Traditionally any income originating from such shares was considered as dividend. That was the practice, without taking into account that those shares were actually proofs of debts. It made some sense in the case of some businesses which used those shares, more precisely income bonds, when they were facing serious financial difficulties.
As a matter of fact, this is why income bonds were created in 1930. But now, this form of financing is used mainly by multinational or national companies which are in a sound financial position. For some borrowers, the fact that the financing costs are in the form of non-deductible dividends does not matter very much. Some have more tax incentives than necessary to ensure that they have no tax to pay, whatever happens. Their non taxable situation does not mean that they are in a difficult financial position.

February 14, 1979
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This type of financing attracts industrial lenders because their investment income in the form of dividends is not taxable. In fact this financing system means that tax incentives which are not claimed by industrial firms can be used to reduce the tax which would otherwise be payable by banks and other financial institutions. Of course there would be no problem if the amounts were small. If the funds were going into productive investments, there would be no great difficulty, but such is not the case. Chartered bank assets in the form of income bonds or debentures and term preferred shares in the 12 months ended October 1978 went from $3 billion to $7.2 billion.
I have indicated that Canadian government and provincial revenues are eroded to the tune of some $500 million a year. Because of this, the tax rate on bank earnings plummeted from 40 per cent to some 30 per cent. Tax revenue from bank earnings remained roughly constant from 1977 to 1978, although their profits increased some 20 per cent. Further, a significant part of those funds did not go into new productive investments. Takeovers were thus made easier. Those funds were used to re-finance existing standard loans in order to derive maximum benefits from fiscal savings. In the period ending October 1978, the volume of that type of securities in bank portfolios increased tremendously. Also, most of their total assets used in any form of industrial financing were settled.
I could not let the situation go on. This legislation therefore provides that the revenue from shares issued after budget night will be taxed the same way as interest revenue. Revenue from that source will be taxable when received by banks and other lenders. The new issues of term preferred shares with a term higher than 10 years are more in the nature of shares than loans. For this reason they will not be affected. Borrowers facing financial difficulties will still be entitled to existing fiscal status.
I would now turn to the second major initiative of a structural nature involving the corporate tax structure. It concerns the reduced tax rate available to small businesses. As I indicated in my budget, Mr. Speaker, small businesses are afforded very generous tax provisions. This is mainly due to the lower tax rate available to those companies and the dividend. A businessman who is incorporated and earns $50,000 pays in fact $4,000 to $5,000 less in federal and provincial tax than as a wage earner or as a professional who is not incorporated, at this salary level.
The fiscal benefits of incorporation are greater at the top of the income scale. It is to the advantage of the businessman whose small business is incorporated because he can save by not distributing his business income. The income tax rate is only 20 or 25 per cent. Any additional tax payable on personal

income is deferred until the businessman distributes the undistributed income. In the meantime the taxation rate for personal income tax may be less. Individuals can save on an income which is sometimes subject to much higher rates of taxation, and the opportunities for tax returns are much more limited.
The lesser taxation rate for corporations represents a reduction of $900 million a year in corporate income tax. There is an annual tax saving of $5,000 per corporation. In addition to these measures, shareholders of small companies are subject to a special tax system as regards capital gains. The study I have published and which compares the Canadian and American tax systems clearly illustrates that our tax system is much more advantageous to the small businessman.
Mr. Speaker, I firmly believe that we are justified, through our tax system, in favouring small business as such. It needs this edge to cope in the business world and with economic risks, to get the necessary capital for growth and job creation, as well as to be able to compete with larger Canadian and foreign firms.
On the other hand, I do not believe that these tax privileges must extend to activities where the characteristics of small businesses cannot be taken into account. By allowing this we would simply increase the fiscal burden of everyone else and cause a general lack of respect for the fairness of the taxation system. In this regard, certain situations in the past have caused serious problems.
Members of professional classes in certain provinces can form a corporation or a company, but they cannot do so in others. This does not provide for fairness. For instance, in the past a doctor or a lawyer living in a province where the members of this profession can form a corporation or a company paid much less federal income tax than another member of the same profession in another province. On principle, I do not believe that the provincial legislation governing incorporation should cause such major differences in the amount of federal income tax payable.
In the provinces where the members of a profession cannot incorporate, they set up management companies whose only aim was to siphon off professional income or fees as administrative, management or financial services. This income could then entitle them to the reduced taxation rate. Such management companies often belonged to the wife of a man in a professional class. Thus, the benefits of the reduced taxation rate provided for small businesses were added to those of income sharing.
The financial situation of professional classes is not the same as that of the small business. Their income is much more stable. Access to these professions is justifiably carefully controlled. The deduction offered to small businesses was implemented when incorporation by professional classes did not constitute a problem. This deduction was never aimed at providing these people with a privileged taxation status.
February 14, 1979

Other workers, such as managers, have begun to incorporate to take advantage of the reduced taxation rate. Court rulings have also entitled investment and rental income to this reduced rate. As I said in my budget speech, it would be unfair to allow such practices to go on because in so doing, Mr. Speaker, we are in fact imposing a heavier tax burden on those who are not incorporated.
The provisions of the bill and the draft regulations that accompany it are aimed at four types of businesses: first, doctors, dentists, lawyers and accountants; second, businesses set up to offer managerial, financial, administrative or similar services to an associate company; third, businesses set up to manage the investment portfolio of an individual; fourth, the employee who incorporates himself. The details that apply will be found in the draft regulations I have had published. I am still receiving useful observations with regard to the specifics of those regulations. I promise to examine any question submitted to me by hon. members in the course of this debate. 1 shall put the finishing touches to the regulations in light of all the comments I shall have received.
Mr. Speaker, I should like to mention four specific points to hon. members: first, those provisions do not alter in any way the right to incorporate when there are valid reasons to do so and when provincial laws allow it. I expect that some members of the professions, management businesses and others will continue to incorporate. Second, the provisions stipulate the same rate of income tax for all groups concerned, as is the case in a good many other businesses: no more, no less. Finally, those who are already incorporated can, in many cases, see to it that their income tax is no higher than if they were not incorporated and received their income directly.
Third, my measures provide small incorporated businesses with a privileged fiscal system when compared to what exists in the United States where incorporation provides much fewer tax advantages. They have nothing comparable to our dividend tax credit. It is therefore impossible in the United States to pay less tax by having the income pass through a business instead of getting it directly. There are tax fines levied on income from professional service businesses and personal assets businesses. Therefore, the U.S. tax system tends to discourage the practice of deferring income tax by not distributing funds. Fourth, those measures concern more than a few of the 300,000 small incorporated businesses eligible for the reduced tax rate.
Businesses in the manufacturing, processing, construction, agriculture, fisheries, resource mining and development, wholesale and retail trade sectors continue to benefit from the provisions for small businesses. It will be the same for nearly all businesses in the service industries, including hotels, motels, businesses providing personal, particular or teaching services, driving schools and general insurance agencies.
Finally, Mr. Speaker, this bill requests a borrowing authority of some $10 billion for fiscal year 1979-80. Hon. members
Income Tax
will recall that in November, 1978 additional authority for $7 billion was granted. Most borrowing authorities obtained before November, 1978 have been used, except for a part that remains available for the next fiscal or subsequent years. Any unused amount of the $7 billion borrowing authority granted last November will be cancelled on March 31, 1979.
We anticipate for 1979-80 cash requirements of some $10,750 million, excluding exchange rates. The borrowing authority requested at this time should be enough to meet our cash requirements and a margin for contingencies like foreign borrowings. The government is expected to begin fiscal 197980 with rather high cash balances part of which could be used to meet cash requirements.
All unused borrowing authorities provided for in this new legislation for 1979-80 in respect of which the governor in council has not taken any action will be cancelled on March 31, 1980, under section 37 of the Financial Administration Act. Mr. Speaker, those are the remarks I wanted to make in introducing this bill which flows from my budget.
I was not in the House yesterday when I was blamed for being absent. I want to apologize to the House-
If I was not here it was because I had a long standing engagement to make a speech in New York before an important forum. Suddenly yesterday the opposition decided that it was a good time to have a motion. This motion could have been debated during other opposition days earlier on. In any event I was working in New York yesterday, and today I was speaking in Quebec. I have not had time to read the speeches and comments that were made in my absence. I have been informed of a few points and perhaps I can talk about them now.
Questions were asked yesterday. By the way, I would be glad, Mr. Speaker, if you would stop me at this point. If you can guarantee that during the debate on this budget bill, no one will speak about the dollar, I will shut up right away.


Mr. Deputy Speaker:: Order. I do not want to prevent the minister from making the comments which he may deem necessary. However I think the only weakness in his preliminary comments is a reference to yesterday's proceedings, a debate which has already been concluded. If he wants to deal with general budgetary matters which he could link up with the bill under consideration, I have no objection. I am prepared to listen to the minister and judge as time goes on the acceptability of his statements.


Mr. Lambert (Edmonton West):: On a point of order, it was my intention to rise and not to go back to yesterday's debate but to discuss the present bill, in particular clause 70 dealing

February 14, 1979
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with the $10 billion and the money borrowed to support the Canadian dollar. This subject is opened for discussion, so let us hear from the minister. I would be interested in knowing his answers on this question. I will reply. His statements could be applicable to yesterday's motion, but I think it is a sensitive issue. The problem exists. It was not as obvious in the past.


Joseph Jacques Jean Chrétien: Mr. Speaker, I am happy to be able to say a few words. However, I will not refer to yesterday's debate too much.
I am glad the hon. member is a gentleman and he recognized that I had good reason to be absent yesterday. I hope that he will read the speech made by the hon. member for Don Valley (Mr. Gillies). He did not speak well of me because I was not here. In my opinion I was doing a lot of good for Canada yesterday.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: I want to raise a few points because some of the comments from yesterday make me laugh. The Leader of the Opposition (Mr. Clark), when he was talking yesterday about the dollar, asked a series of questions. It was obvious that he did not propose any solutions. When he put forward solutions during the last few months he fumbled them all, from sovereignty association to the referendum and so on, even the phantom deficit. It is all related to the budget.


Mr. Deputy Speaker:: The hon. member for Edmonton West (Mr. Lambert) on a point of order.


Marcel Joseph Aimé Lambert: Mr. Speaker, I am prepared to listen to the minister's statements on the value of the dollar because that is an important issue. But if he wants to get involved in politicking, and repeat the same old rehash you hear at every street corner and which is reported by the press, which is more interested in cigarette butts and chickenshit, fine, but not in the House. I am interested in the $10 billion. I want to hear his statements on that and nothing else. He can save that for the St. Maurice region or anywhere else, if he wants.


Joseph Jacques Jean Chrétien: Mr. Speaker, a week ago the opposition was telling Canadians that we have no more reserves. We have $5 billion in our reserves. Yesterday the Leader of the Opposition got up in this House and asked why the minister was not revaluing the gold reserves.
The market knows that we have $1 billion worth of gold carried on the books at its old value of $40 an ounce. If I said that that gold will now be valued at its market value of $220 an ounce, then I would show $4 billion more in reserves. The opposition would then be the first to get up and state that the Minister of Finance is trying to fool the public by revaluing the gold reserves.

A few days ago the Leader of the Opposition was talking about the fact that we have no reserves, and now he is saying that I am underestimating the reserves because I have $1 billion which has been carried on the books at $40 an ounce, and he says that we should probably revalue it to $220 an ounce. It seems to me the opposition should make its mind up about this matter, because the public will certainly have some questions to ask.
Relating to the level of the deficit, people on the other side are always talking about the deficit of this government and saying that the debt level is so fantastically high. I would like to tell hon. members that in 1962 under the last Conservative government-and I believe the hon. member for Winnipeg North Centre (Mr. Knowles) was here at that time-the public debt in Canada was 33.4 per cent of the gross national product, and today it is only 18.9 per cent.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: It is quite obvious that we have a drop in our debt in relation to the GNP.
I would like to place some more facts before the House because I expect to hear some funny theories coming from the other side.


An hon. Member:: Too bad their members are not here.


Joseph Jacques Jean Chrétien: Yesterday the Leader of the Opposition and members of the opposition, during the course of asking bright questions but not offering any solutions, asked why I was not going to the IMF. It is very simple. One goes to the IMF when one is broke. Canada's credit is good. We can go to Germany, Japan and the United States any day for credit. Yesterday I was in New York and I could have borrowed $1 billion just like that. So I am not going to the IMF, and for a very good reason. When one is forced to go to the IMF it is because there is no more credit available. As well, if one goes to the IMF, the IMF will then run the country for you more or less, because they set down the guidelines. If we can go on the open market and borrow money, it is because Canada's credit is pretty good. If the Leader of the Opposition did not know that, I will tell him today.
The professor from Don Valley asked why we do not force the Bank of Canada to reduce its secondary reserves. We could do that. However, what would be the effect? The effect would be to push the interest rates higher. It would reduce the money supply in Canada. That is the same member who got up and complained about the high level of interest rates in Canada.
I would like the public to reflect on the policies they propose. I could give the whole list, one after the other. They are laughable. There will be other occasions for that. Tomorrow I will be before the committee.
I do not want to take much more of the time of the House. As all members know, I would have loved to have been here yesterday to reply to the Leader of the Opposition and to have
February 14, 1979

talked about the phantom deficits that come and then disappear. However, 1 had a long-standing obligation to be in New York to speak about the future, the potential, the wealth, and the-FPeedom of Canada. That is why I was there.
One of the problems in Canada is that too many people are negative. You do not have to travel far to realize how well off we are in Canada. One need only look at the present crisis in Iran. How many countries can face the oil and gas problem the way Canada can? We have a lot of potential. In the budget bill introduced today we give more incentives to the oil and gas industry to invest in order to find more oil and gas in Canada. We have put forward many propositions of that nature.


Marcel Joseph Aimé Lambert: It is not for that reason.


Joseph Jacques Jean Chrétien: We have been the government lately. Some say too long. We have helped to escalate development of the tar sands. We have given great incentives so that exploration for oil and gas will be carried out in the north and in the Beaufort Sea.
When I see the troubled world in which we live today, I see that we are a very fortunate people. Of course this country is not perfect. After all, we are all human beings. But Canadians do not realize how fortunate we are.
Some say we do not have good economic policies in Canada.
I was privileged to be in Argentina on a business trip during the recess. I was amazed at what I was told by the minister of finance of that country. He told me that right after the war Canada and Argentina were equal in terms of population, GNP, resources, and potential. We have followed two different courses. They became extremely nationalist, protectionist, and intervened a lot. We did not. We became the traders of the world. Per capita, we are the biggest trading nation in the world, almost $100 billion of trade both ways, export and import, and a gross national product of $250 billion. They followed the course of closing their borders, intervening in efficient industries, and becoming protectionist.
Look at the results after 30 years. Our GNP in American dollars is about $220 billion. Theirs is about one fifth of that. We buy and sell about $85 billion U.S. every year. Argentina buys and sells on the international market about $10 billion or $11 billion. Our figure is eight times as much because we have followed the course of an open society in trading with the world with no exchange controls, importing and exporting capital and dealing with all nations of the world. When I hear all the gloom and doom speeches, I think there is nothing better than what we have here.


Some hon. Members:: Hear, hear!
Income Tax


Marcel Joseph Aimé Lambert: Mr. Speaker, we have had a very interesting winding up speech on the opening of an income tax bill. In the last ten minutes the minister reopened many a debate. He has fashioned the hair shirt and he will have to wear it. The hon. member for York Centre (Mr. Kaplan) has been travelling as well. However, we have been sitting in the Standing Committee on Finance, Trade and Economic Affairs. My colleagues are now at the committee discussing precisely the points about the state of the Canadian dollar with the governor of the Bank of Canada.
I had hoped the minister would not get into "politicaillage" irrelevant, cheap political jibes. However, they did not bother me. I have heard far more-


Mr. Stollery:: Where were you yesterday?


Marcel Joseph Aimé Lambert: I sat in committee for seven hours, far more than the hon. member ever does.


Peter A. Stollery: I was here in the House of Commons listening to all the cheap jibes from the other side.


Marcel Joseph Aimé Lambert: It was one of the few times you were here. I suggest to the minister that as a result of these interventions there will be replies. The minister talks about gloom and doom. He should have been here to hear the four horsemen then on this side, when the dollar was at 95 cents, and we had the audacity to peg it at 92Vi cents because we were then under a controlled exchange set-up with the world monetary fund.
The situation is now a lot different. Today the dollar is at 83 cents, the lowest it has ever been in my lifetime, and I am sure in the lifetime of the hon. member for Welland (Mr. Railton), and even the hon. member for Winnipeg North Centre (Mr. Knowles). I am not being disparaging when I say that, but I am sure it is longer than the lifetime of any person in this House. When the dollar went from 95 cents to 92'h cents, you should have heard the doom and gloom. Gracious me, this is nothing! Nothing is being said in comparison to what was said at that time. If the Minister of Finance (Mr. Chretien) wanted to open the debate on this, that is fine. I will continue for the rest of my time in discussing the bill.
May I call it six o'clock, Mr. Speaker?


Walter David Baker: On a point of order, Mr. Speaker, I wonder if the Minister of Finance (Mr. Chretien) could tell us if it is the intention of the government to carry on this debate tomorrow.


Joseph Jacques Jean Chrétien: Yes, Mr. Speaker.


Mr. Deputy Speaker::