1979-10-30

ROUTINE PROCEEDINGS


Mr. Arthur Phillips (Vancouver Centre):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
Two hundred Canadians protested in Vancouver yesterday against the Czechoslovakian government's demands that they pay for legalized exit from Czechoslovakia. These citizens who left in the forties, fifties and sixties are being contacted by letter from the Czechoslovakian government. An interview with the Czechoslovakian consul to discuss the "buy-out" clause costs $60-that is just for an interview-and final payment ranges from a few hundred dollars for labourers to as much as $8,000 for professionals. 1 move, seconded by the hon. member for Spadina (Mr. Stollery):
That the government immediately take steps to prevent this harassment of Canadian citizens.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


UNITED NATIONS
Mr. Bob Rae (Broadview-Greenwood):: Mr. Speaker, in view of recent statements that the Canadian government might withdraw its troops in the United Nations' contingent on the island of Cyprus, and in view of the long-standing commitments of the Canadian government to the integrity of the Republic of Cyprus and the need for occupying Turkish troops to leave the island and for the refugee problem to be settled, I move, seconded by the hon. member for Humber-Port au Port-St. Barbe (Mr. Faour):
That this House urges the Government of Canada to keep Canadian troops active in United Nations' peacekeeping efforts in Cyprus until all foreign occupying troops have withdrawn from the island.


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.


COASTGUARD
Mr. Russell MacLellan (Cape Breton-The Sydneys):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity with respect to the ever-increasing importance of the coastguard to eastern Canada.
Whereas the government has cut back on the construction of the facilities at the coastguard college at Point Edward, Nova Scotia, thereby risking the development of the qualities of graduating officers and the coastguard in general, I move, seconded by the hon. member for Cape Breton Highlands-Canso (Mr. MacEachen):
That the government proceed to construct that portion of the coastguard college the plans for which have been already approved but for which the government refuses to commit financing for construction, thereby refusing needed training for the students.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HEALTH AND WELFARE
Mr. Rod Murphy (Churchill):: Mr. Speaker, in view of the fact that the federal government has hired an insufficient number of nurses for northern regions-over half of the nursing positions in northern Manitoba are vacant, including a number of communities having no professional health person-

October 30, 1979
nel at all-and considering that the accident rates and disease occurrence rates in remote communities are much higher than the provincial and federal norms, I move, seconded by the hon. member for Nunatsiaq (Mr. Ittinuar):
That the Minister of National Health and Welfare take immediate action to hire necessary staff and to reinstate the initial training program removed by the previous government which gave nurses, unfamiliar with life in these communities, more adequate preparation and increased the likelihood of these nurses remaining where they are so badly needed.


Mr. Speaker:: The provisions of Standing Order 43 require unanimous consent of the House for the introduction of such a motion for debate at this time. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]


PETRO-CANADA PROPOSED DISBANDING OF CORPORATION-REQUEST HON. ROBERT STANFIELD CONDUCT INTERIM INQUIRY-MOTION UNDER S.O. 43
Mr. Claude-Andre Lachance (Rosemont):: Mr. Speaker, under the provisions of Standing Order 43 I ask for the unanimous consent of the House to move a motion dealing with a matter of urgent and pressing necessity.
Considering the success of the Stanfield mission, at least in light of the beneficial effect it seems to have had on the decision announced by the Prime Minister (Mr. Clark) yesterday, to delay the implementation of his previous intention to transfer the Canadian embassy in Israel from Tel Aviv to Jerusalem, I move, seconded by the hon. member for Sainte-Marie (Mr. Malepart):
That the government give Mr. Stanfield a similar reference about the proposed disbanding of Petro-Canada.
*
* *


FISHERIES
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, under the provisions of Standing Order 43, 1 rise on a matter of urgent and pressing necessity.
As the major fish processors in the maritimes, the Nickerson Company, refuse-according to the representatives of the Maritime Fishermen's Union-to purchase any more than 500 pounds of squid per boat, and in view of the fact that some fishermen are throwing overboard valuable squid catches

because they cannot sell it, I move, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That the Minister of Fisheries and Oceans bring the parties concerned together before a more serious confrontation develops.
And it is going to, if he doesn't.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


LOSS OF MIDDLE EAST CONTRACTS-MOTION UNDER S.O. 43
Mrs. Margaret Mitchell (Vancouver East):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the fact that close to 100,000 Canadian jobs related to our markets in the Middle East are still in jeopardy, and since only yesterday we learned that Zenith Steel Fabrications, in the riding of the member for Richmond South-Delta (Mr. Siddon), lost $43 million in Middle East contracts due to the bumbling of this government, I move, seconded by the hon. member for Mission-Port Moody (Mr. Rose):
That the Minister of Industry, Trade and Commerce intervene personally to re-establish confidence in Canada's impartiality in order to recover lost contracts and jobs.
Should he fail in this, I move that the government establish a program of compensation-


Mr. Speaker:: Order, please. Even with the unanimous consent of the House, I think the motion has to remain on one topic. The introduction 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.



ORAL QUESTION PERIOD


Right Hon. P. E. Trudeau (Leader of the Opposition):: Mr. Speaker, I would like to ask the Prime Minister a question arising out of the statement yesterday by the Premier of Alberta-a statement of policy, as he described it-to the
October 30, 1979

effect that the people of Canada would have to buy oil at a price which Alberta decided to be fair, or not get it from Alberta.
Will the Prime Minister give his assurance to the people of Canada that Canadian oil, whether it be produced in a province or offshore, will continue to be available to Canadians?


Some hon. Members:: Hear, hear!


Right Hon. Joe Clark (Prime Minister):: Mr. Speaker, 1 have not seen the text of the speech of the Premier of Alberta. He has not made that position known to me in conversations that we have had. But I can certainly give the right hon. gentleman the assurance that he seeks.


Pierre Elliott Trudeau: Mr. Speaker, I wonder if the Prime Minister would care to elaborate on his own policy and assure the House that he has the means to carry out that assurance. The Prime Minister will recall that last Wednesday, in this House, he said he would not under any circumstances use the declaratory power or emergency power.
How can he give the assurance to Canadians that they will get a continuous supply of Canadian oil, in circumstances such as the Premier of Alberta described? What power would the Prime Minister use under the constitution, or would he invoke the Petroleum Administration Act?


Charles Joseph Clark: Mr. Speaker, the right hon. gentleman has cited two options that are open to the Government of Canada in the event of that kind of emergency. 1 say to him, and 1 assure the House and the country, that I do not think we are facing that kind of emergency. 1 do not intend to react to a proposal that might have been made but certainly has not yet been made to me.
I do not think we are yet at a stage in this country where oil pricing matters are going to be resolved by long-distance accusations. I remain confident that we can work out an agreement involving the federal government and the various provinces.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I understand the Prime Minister is saying that long-distance confrontation, presumably between the Premier of Alberta and the Premier of Ontario, is a matter which does not present cause for serious concern. But I question the Prime Minister on the answer he gave to my question when he said those options were available to the Government of Canada-the declaratory power, the emergency power and, of course, the trade and commerce power. He told me last Wednesday, as reported at pages 553 and 554 of Hansard, that these powers would not be used by the government. Is he telling us now that in certain circumstances he would use them?
Oral Questions


Charles Joseph Clark: What I am telling the House is that I do not anticipate the Government of Canada having to use those powers.

[ Translation]


RESOURCES
Hon. Jean Chretien (Saint-Maurice):: Mr. Speaker, I should like to put a question to the Prime Minister. In light of the problems which he is now experiencing, does he intend to convene the premiers as soon as possible to discuss that problem and carry on the discussion undertaken in February, when the first item on the agenda was the distribution of powers for resource ownership and interprovincial trade to solve as soon as possible that problem threatening the future of Canada?


Charles Joseph Clark: Mr. Speaker, it is not our intention, at least not for the moment or in the immediate future, to call a first ministers' conference to deal with the issue raised by the hon. member. As I indicated the other day to the hon. member for Outremont, there may be a first ministers' conference on oil pricing and other related issues, but in answer to the hon. member's question on the constitution, I must say that we do not intend to call a conference in the near future.


REQUEST ALL CANADIANS BENEFIT FROM NATURAL RESOURCES
Joseph Jacques Jean Chrétien: Mr. Speaker, on a supplementary. Does the right hon. Prime Minister not believe that at this time when a province wants to secede from confederation, it would be extremely important for all Canadians to realize that a federal government must have the powers necessary to ensure that our natural resources will benefit all Canadians?


Charles Joseph Clark: Mr. Speaker, it is well known and understood throughout the country that the federal government already has the powers referred to by the hon. member. What all Canadians must now know, I believe, is that the present federal government wants to solve the country's problems through dialogue rather than by unilateral action.

October 30, 1979
Oral Questions


REQUEST THAT COMMISSION INVESTIGATE PRICES AND PROFIT INCREASES IN OIL INDUSTRY
Mr. Edward Broadbent (Oshawa):: Mr. Speaker, one aspect of the oil question is, of course, the matter of supply. The other aspect, one which has deeply concerned both Americans and Canadians, is the question of profiteering in the industry.
Considering that in the United States the President has responded swiftly and imaginatively by proposing a $300 billion excess profits tax on multinational oil companies in the United States, I should like to ask the Prime Minister, bearing in mind that Imperial Oil, Shell, Texaco and Gulf have reported profit increases in Canada for the first nine months of this year of approximately 55 per cent, for a cumulative total of about, $1 billion in profits, whether he will follow the American lead in dealing with this serious question by immediately establishing in Canada a commission with authority to investigate prices and profit increases in the oil industry and to order roll-backs in prices and profits should such action be justified.


Charles Joseph Clark: Mr. Speaker, the proposal of the Leader of the New Democratic Party of such an agency was brought to my attention outside the House. In our view, it would duplicate powers which are already in place. It would be unnecessarily bureaucratic and would not accomplish the goals the Leader of the New Democratic Party appears to hope it would, so we have no intention of establishing such a commission.


John Edward Broadbent: Mr. Speaker, 1 would like to know what powers are in place. So far the government has refused to act. The people of Canada would like to know what powers the Prime Minister has used to keep profits and prices in the oil industry in line.
One oil company in Canada, Imperial Oil, through proceedings which became clear in a civil court, is on record as having overcharged the consumers of Nova Scotia. It is also on record as having avoided paying federal income taxes by creating a dummy corporation in Bermuda. What, specifically, does the Prime Minister have in mind to deal with these problems, or is he simply content to talk tough to the Canadian people about dealing with inflation but not to act tough at all with multinationals?


Charles Joseph Clark: Mr. Speaker, we naturally intend to act tough, as the hon. member says-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: -with the multinationals, but not in such a way that the severity of the action or the crescendo of rhetoric will drive out of this country Canadian or foreign companies whose exploration activity is necessary for us to continue to bring on stream supplies this nation needs.

The hon. member asked about taxing policy. He knows that his questions about taxing policy can be answered only in the context of a budget, and a budget will be brought down later on.


An hon. Member:: When?


Charles Joseph Clark: The hon. member also made reference to a specific case which he knows is under investigation.


John Edward Broadbent: Mr. Speaker, quite apart from the six-year old investigation which is taking place-and the Prime Minister is right about that-he knows that we already have evidence of one of the major multinationals, Imperial Oil, deceiving and cheating the people of Nova Scotia.
The extraordinarily high profits of these companies this year is on record. I do not ask my question in a rhetorical way. Why is the Prime Minister describing my proposal as extreme, when all it has in it are the powers to investigate price and profit increases and to take action only if profit and price increases are out of line? Why is that an extreme proposal and not a reasonable one?


Charles Joseph Clark: Mr. Speaker, I do not think I suggested it was extreme. I suggested it was unnecessary and bureaucratic. We in this Parliament and in this government have the power to control price. Indeed, the price of oil is controlled by the Government of Canada. We have the capacity to monitor what companies are doing with their profits. Indeed, I am advised that in 1977, 84 per cent of the industry's internally-generated cash flow was re-invested in capital expenditures.
1 can say to the hon. member that final 1978 figures will be available, and I would be delighted to table them in this House of Commons so that if there are grounds for the hon. member's concern and the concerns others share, the whole country will know the facts and will be able to come to conclusions on them.


MEASURES GOVERNMENT WILL ADOPT TO CURB INCREASES IN OIL PRICES
Hon. Marc Lalonde (Outremont):: Mr. Speaker, I am sure Canadians would like to believe the assurance the Prime Minister is trying to give us, but because of the inaction and the inertia of this government, that confidence is lacking.
In particular, my question is directed to the Minister of Energy, Mines and Resources who stated last week that the situation was fragile, those were his words, with regard to energy supplies. Last week it was reported that the industry made profits like never before in its history, and yesterday the Alberta premier stated that he was ready to cut off supplies to the rest of Canada if he did not get his price. Under those circumstances, will the minister set up immediately the Energy Supplies Allocation Board provided for in the energy supplies emergency bill passed by the previous government or, at the very least, will he convene immediately the interprovincial
October 30, 1979

committee on energy supplies that was set up by the provincial energy ministers in Calgary about 15 days ago, because of the inaction and inertia of the present government in that field?


Hon. Ray Hnatyshyn (Minister of Energy, Mines and Resources):: Mr. Speaker, there are a number of questions raised by the hon. member in the context of his rather long question. I simply want to say that I do not think it is appropriate for me-


Some hon. Members:: Oh, oh!


An hon. Member:: Answer it.


Ramon John Hnatyshyn: 1 will answer it for you, Daffy Duck. I want to point out to the hon. member that in terms of answering the question with respect to any response as to any legal interpretation of what has been said by the Premier of Alberta, I would simply not indulge in that. We are now involved in consultation with respect to the whole question of pricing, and that will continue.
In terms of our supply situation, 1 want to say that 1 have indicated that we feel confident we will be able to get through this winter. It is a fragile situation, but we have taken measures, through the department, by which we are planning for any emergency situation. I have given consideration to the establishment of the board, and in due course I will come before the House with possible amendments to the legislation. At that time I think it might be appropriate to bring forth a name on the board which might serve a purpose with respect to a dialogue.
The final point is with respect to the technical advisory committee which was raised in the question of the hon. member. There are some legal questions and impediments which stand in the way of the establishment of that board. They are being looked at in connection with the director of the Combines Investigation Branch. The whole question of having that board in existence might be interpreted as being a combine in terms of the industry, and I know the hon. member would want to make sure that those legal impediments are considered before any technical advisory group is put into place.


Marc Lalonde: Mr. Speaker, the situation may be fragile, but in this flood of words from the minister we see that the government and the minister are even more fragile in this important situation.


Some hon. Members:: Hear, hear!


Marc Lalonde: Will the minister at least recommend to the Minister of Finance, in his forthcoming budget, the introduction of a windfall profits tax to collect some of the large profits being reaped by the oil companies at present, rather than punishing Canadian consumers with substantial increases in the price of oil and gas which are the equivalent of taxes?
Oral Questions


Ramon John Hnatyshyn: First of all, Mr. Speaker, I appreciate the observation that during the time the hon. member was a minister in the preceding administration they allowed what he calls excessive profits to be made by the corporations.


Some hon. Members:: Oh, oh!


Ramon John Hnatyshyn: I simply want to say that when the budgetary provisions are announced by the Minister of Finance, at that time he will be able to assess exactly what kind of representations have been made.


FURTHER INCREASES IN OIL PRICES-DETRIMENTAL EFFECT ON THE ECONOMY
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Minister of Finance. Has he calculated, and can he tell us now, the additional burden on Canadian consumers and the Canadian economy generally if the Conservative government caves in to the excessive oil price demand by the Premier of Alberta as was reported yesterday?


Hon. John C. Crosbie (Minister of Finance):: Mr. Speaker, I have not calculated any increased cost of any speculative demands. There is a process under way in this country of negotiation and discussion as to what should be the proper range of energy prices next year.
The Premier of Alberta, who represents a producing province, has one view which represents the aspirations of his own province, which wants to get the value of its resources-a province that has given a lot to Canada in the last four or five years. Other premiers who represent other jurisdictions have different views. If these views cannot be reconciled, the government will make a decision which will be announced in the House in due course.


Some hon. Members:: Hear, hear!


OIL PRICES-REPORTED REMARKS OF PREMIER OF ALBERTA-GOVERNMENT ATTITUDE
Herbert Eser (Herb) Gray: Mr. Speaker, I want to put my supplementary question to the Prime Minister. Because of the importance of this matter to Canadian consumers and to the entire economy, I want to ask him if his words today about Premier Lougheed's speech in fact suggest we are seeing a form of Conservative play-acting in order to give the Prime Minister an excuse for giving in to the Premier of Alberta on oil prices in a way that is contrary to the interests of the Canadian public? In other words, has the Prime Minister's "fresh face of federalism" been turned by the Premier of Alberta into a slap in the face of federalism?


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Mr. Speaker, I should like to answer that extemporaneous question by saying to the hon. member, no.


Some hon. Members:: Hear, hear!
742

October 30, 1979
Oral Questions THE ENVIRONMENT


HARMFUL EFFECT OF CERTAIN FLUOROCARBONS- GOVERNMENT ACTION TO ALLEVIATE
Mr.   Chas. L. Caccia@Davenport: Mr, Speaker, my question is for the Minister of the Environment, to whom I have given notice of it. Considering the threat fluorocarbons are posing to the environment, does the minister intend to bring into effect on December 1, 1979, the proposed regulations to ban certain fluorocarbons as spraycan propellants in hair-sprays, deodorants and similar products, as intended by the previous Liberal government?


Hon. John A. Fraser (Postmaster General and Minister of the Environment):: Mr. Speaker, as the hon. member knows, already there has been a significant reduction in the use of fluorocarbons on a voluntary basis. There are regulations pending, but under the Environmental Contaminants Act a notice of objection has been filed by one corporation. Under the act, and under those circumstances, a board of review is to be established and that board is being established now.


Mr. Caccia:: Mr. Speaker, does the minister have a deadline he would like to announce for further regulations to completely phase out the use of PCBs in Canada?


John Allen Fraser: Mr. Speaker, the hon. member said PCBs. I do not know whether he is now talking about the same matter.


Charles L. Caccia: No, it is another matter.


John Allen Fraser: With respect to PCBs, as the hon. member knows, there is a board sitting at present because there are regulations presently to go into effect which, again, have been challenged by two corporations, 1 think, and we will await the results of those hearings.


THE CANADIAN CONSTITUTION
Mr. Mark MacGuigan (Windsor-Walkerville):: Mr. Speaker, my question is for the Prime Minister. In his statement of October 3 respecting offshore mineral rights, the Prime Minister made clear his intention to transfer to the provinces both property rights and legislative jurisdiction.
Since, in his own timetable, subsequent confirmation of the intergovernmental agreement by legislative action belongs to stage one of his proposed negotiating sequence, what kind of parliamentary action does he intend, and when; and, in particular, when does he plan to bring forward a joint address for constitutional amendment?


Charles Joseph Clark: Mr. Speaker, 1 cannot give the hon. member an exact date. As is the habit of this government, certainly we will honour the rights of Parlia-

ment in bringing to the House of Commons such matters that Parliament should consider. At this stage, the discussions with the various provinces have not reached a level where legislative action is contemplated.


Mark R. MacGuigan: Mr. Speaker, in order to avoid any excess of executive federalism, will the Prime Minister assure the House that no effective transfer of jurisdiction will be taken before parliamentary approval is obtained?


Charles Joseph Clark: Mr. Speaker, the hon. member should know that we will not act in a way which would limit the rights of Parliament. Certainly, I can give the undertaking to the hon. member that there will be an opportunity for Parliament to consider proposals we would introduce which would, in effect, amend the constitution.


CONSUMER AFFAIRS
Mr. Gary F. McCauley (Moncton):: Mr. Speaker, in the absence of the Minister of Consumer and Corporate Affairs, I will direct my question to the Prime Minister. It concerns the government's intentions regarding the severe economic disruption and hardship presently being experienced by the soft drink industry as a result of the government's handling of the 1.5 litre container problem.
Recognizing that jobs have been jeopardized, and that indeed in New Brunswick, in the community of Woodstock, 32 employees have been laid off, I would ask: Can the Prime Minister report on the progress being made toward finding a solution to the problem of glass retention from 1.5 litre containers? Specifically, can he confirm for the House that the Japanese technology of plastic coating has been found to be too costly for use by the Canadian industry? Will he tell the House what alternate solutions are being considered?


Charles Joseph Clark: Mr. Speaker, I will draw those questions to the attention of the minister.


REQUEST REVIEW BE UNDERTAKEN OF INCENTIVES FOR OIL EXPLORATION
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Given the fact that Canadian taxpayers are providing, on the average, 65 cents out of every dollar which oil companies put toward exploration under the present tax regime, and given the record profits of oil companies, will the minister conduct a review of these incentives and make recommendations for reform so that taxpayers no longer end up financing this corporate rip-off?
October 30, 1979


Ramon John Hnatyshyn: Mr. Speaker, I can give the hon. member the assurance that we are in fact, reviewing, in consultation with the Minister of Finance, the whole question of tax incentives, not only in the context raised by the hon. member but, more importantly, we want to look at the kind of tax incentives which might bring in greater supply and provide greater inducement for further exploration.


Some hon. Members:: Oh, oh!


Ramon John Hnatyshyn: Of course, the members of the New Democratic Party support this wholeheartedly.


NATIONAL REVENUE
Reginald Cyril Symes: Mr. Speaker, if we are to believe the Prime Minister's election promises, we will see more corporate hand-outs to the overly rich multinationals.
My supplementary is directed to the President of the Privy Council and Minister of National Revenue, on the issue of these tax incentives. Can the minister tell us whether his department has now completed an investigation of Imperial Oil which over a five-year period used a token Bermuda company, Albury Co. Ltd., to skim off $35 million in profits to avoid paying Canadian taxes? If so, will he indicate what action his government will be prepared to take on this matter?


Hon. Walter Baker (President of the Privy Council and Minister of National Revenue):: Mr. Speaker, an investigation like that, if one was being carried out, is not the kind of thing which one would want to discuss on the floor of the House of Commons-


Some hon. Members:: Oh, oh!


Walter David Baker: -any more than one would want to discuss the tax returns of any members of this House on the floor of the House of Commons. But I want to assure the hon. member that the results of any investigation with respect to the matter would be appropriately dealt with by the government and would be something to study by the government. 1 want to assure him that the department is well aware of the problems raised in the hon. member's question.


VETERANS AFFAIRS
Mr. Tom McMillan (Hillsborough):: Mr. Speaker, my question is directed to the Minister of National Defence and Minister of Veterans Affairs. There is growing concern in some quarters of Canada, particularly in Prince Edward
Oral Questions
Island, that the government may be reneging on its commitment to relocate the Department of Veterans Affairs from Ottawa to Charlottetown. These concerns have been made worse by recent utterances of the previous minister of veterans affairs who continues to act as though he were the minister. Is the government still committed to a full and timely relocation of the Department of Veterans Affairs from Ottawa to Charlottetown?


Hon. Allan B. McKinnon (Minister of National Defence and Minister of Veterans Affairs):: Mr. Speaker, as far as I am
concerned, and as far as the government is concerned, the move of DVA to Charlottetown is going on. Very recently, we received Treasury Board approval to exchange the site we expropriated in downtown Charlottetown for one known as site 15, on the waterfront. We are negotiating some administrative matters with the provincial government at the present time.


TRANSPORT
Mr. Ed Lumley (Stormont-Dundas):: Mr. Speaker, my question is directed to the Minister of Transport. During the last Parliament, and during the election campaign many, if not all, western Conservative members of Parliament not only called for the retention of the Crowsnest Pass rate as a Fixed statutory freight rate for the movement of grain, but also suggested that the Crow rate should apply to the shipment of beef and other grain products.
Will the minister advise the House if this clearcut and unequivocal position still applies now that his party is in government, or is the government contemplating a subtle but important new arrangement which might preserve some Crow benefit but not the Crow rate for prairie farmers?


Hon. Don Mazankowski (Minister of Transport):: Mr. Speaker, the hon. member might be well advised to read this party's policy in the last election campaign, which indicated-


Some hon. Members:: Oh, oh!


Mr. Lessard:: Before or after?


Donald Frank Mazankowski: Before or after, it really does not matter. It indicated that there was reason to believe, as far as we were concerned, that there should be some increases in remuneration to the railways for the movement of grain. But we indicated that the benefit of the Crow rate would remain in statute form in the hands of the producers.
We are considering this matter at the present time. Any changes or any modification to the implementation of the benefit of the Crow rate will be conducted in full consultation with the farmers and interested producer groups. I must indicate that we are receiving many representations from producer groups, farm organizations, producers themselves,

October 30, 1979
Oral Questions
and members of Parliament in the Liberal party and, indeed, in the New Democratic Party.


Edward C. Lumley: Mr. Speaker, the reason I asked the question is that the government has flip-flopped on so many other things, that I just wanted to make sure it was not going to flip-flop on this one.
I would direct my supplementary question to the President of the Treasury Board. Can the minister confirm that the Treasury Board is presently conducting an internal study on the cost of maintaining the Crow rate and, if so, does that study include an analysis of the cost of extending the Crow rate per se to beef and other grain products?


Hon. Sinclair Stevens (President of the Treasury Board):: Mr. Speaker, I cannot confirm what the hon. member has asked.


RAILWAY BRANCH LINES-GOVERNMENT INTENTIONS RESPECTING ABANDONMENT
Mr. Pierre Deniger (Laprairie):: Mr. Speaker, my question is also for the Minister of Transport and it relates to the one-man task force established by the minister, in the person of the hon. member for Moose Jaw, to examine and report on those prairie branch lines not yet addressed by the CTC but frozen by the minister until at least tomorrow.
Notwithstanding the fact that the previous government acted to guarantee at least 80 per cent of existing prairie branch lines now serving about 90 per cent of western farmers, can the minister say to this House and the people of Canada if he has: (1) received the report; (2) if he intends to tabic it; and (3) what are his intentions in relation to the branch lines that he has frozen and that will become unfrozen tomorrow?


Donald Frank Mazankowski: Mr. Speaker, the report is being drafted at the present time and I understand it is in its final stages. The hon. member is somewhat incorrect in his assessment that 80 per cent of branch lines were going to be retained. The 1,900 miles of branch lines that were being examined by the hon. member for Moose Jaw are, indeed, lines that were going to fall under the Liberal axe and they obtained a reprieve as a result of the change in government.
The hon. member for Moose Jaw will produce his report, and 1 will certainly make it public. We will act upon its recommendations. 1 can assure the hon. member that of the 1,900 miles that were destined for the axe under the Liberal government, a good portion will remain and will be used by the producers of western Canada. This is something we need in order to move the record amount of grain that we intend to deliver to export positions.


Some hon. Members:: Hear, hear!


Pierre Deniger: Mr. Speaker, my supplementary is again to the Minister of Transport. Retaining branch lines as rustic

relics is simply not good enough. I think we need those branch lines rebuilt and upgraded now. Will the minister say whether he intends-


Some hon. Members:: Oh, oh!


Pierre Deniger: Will the minister say whether he intends to honour our commitment and ensure that every line in the permanent network is able to fully handle grain hopper cars year-round at top speed?


Donald Frank Mazankowski: Mr. Speaker, I am very pleased to note that the hon. member now is a supporter of the retention of the prairie branch lines that were going to fall under the Liberal
axe.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: We in this government have taken the position of providing transportation services to those elevators which will remain in existence and providing service to the producers of western Canada, and I can assure the hon. member that we will fulfil that pledge.


MOVEMENT OF GRAIN-AUTHORITY OF GRAIN TRANSPORTATION CO-ORDINATOR
Mr. Robert Bockstael (St. Boniface):: Mr. Speaker, my question is for the Minister of Transport. The government has removed the control of grain transportation co-ordination from the Canadian Wheat Board and transferred those responsibilities to the new grain transportation co-ordinator. To date that new co-ordinator has not been given any legislative authority to deal with our grain movement problems. He has apparently assumed responsibility, without any clout.
Will the government introduce legislation conferring such authority on the co-ordinator, what will his powers be and, if it will, when specifically will such legislation be brought forward in the House of Commons?


Donald Frank Mazankowski: Mr. Speaker, the required powers for the grain transportation co-ordinator have been established by a government order in council. If any additional requirements are necessary, we certainly would be glad to bring in legislation. The co-ordinator is in place, he is now in the process of establishing staff, and I am pleased to report that he is conferring with all components of the industry.
I should also indicate that he is working in very close collaboration with the Canadian Wheat Board. I think that is very important. The job of the grain transportation co-ordinator will be to see that grain is moved. The job of the Canadian Wheat Board will be to see that we explore and pursue every available market potential we have available to us.


Robert Theodore Bockstael: Those are not the same impressions that are given by senior members of the Canadian Wheat Board's transportation committee.
October 30, 1979



Meanwhile, we are told that the senior committee on transport at the Canadian Wheat Board has been deprived of its responsibilities and that its members wash their hands clean of any ensuing problems. The vacuum resulting from the fact that neither the co-ordinator nor the Canadian Wheat Board can accelerate the delivery of wheat to our customers, and the erosion of the powers of the Wheat Board cause serious problems to small and medium-sized producers in this country.
Hence, I ask what other steps the government intends to take to assure Canadians, and particularly the prairie provinces, that significant upgrading of the transportation and delivery of our goods will be achieved?


Donald Frank Mazankowski: Mr. Speaker, 1 should advise the hon. member-and I am sure he knows-that the terms of reference that were established for the operations of the grain transportation co-ordinator were developed in full consultation with the Canadian Wheat Board. If the hon. member is not aware of the functions and the duties of the grain transportation co-ordinator, 1 would be very happy to supply him with a copy of the terms of reference.
Indeed, 1 am happy to report that the establishment of the grain transportation co-ordinator, with the addition of some
7,000	hopper cars which are now going to be coming on stream between now and 1981, and with some 5,000 additional rehabilitated boxcars-which are coming on between now and the middle of next year-has given us the opportunity to express a great deal of optimism about the future in exports of grain. I am also happy to report that as of this date, the total unloads at Vancouver and at Thunder Bay amount to 109,000 as compared to 103,000 last year. As far as Churchill is concerned, we have moved in excess of 500,000 metric tons, the same as last year but somewhat under the target we had anticipated.
* *
*


THE CANADIAN ECONOMY
Mr. John Evans (Ottawa Centre):: Yesterday, Mr. Speaker, the Prime Minister indicated that a number of factors were unknown to the government prior to the election which, once revealed, have prevented the Prime Minister from delivering on his election promises.
In view of the fact that the promises were made at a time when the Prime Minister and his advisers were predicting a $17 billion deficit, and since the actual deficit will be in the range of $11 billion to $12 billion, clearly the deficit cannot be the reason, and will the Prime Minister now tell the House clearly and concisely what new factors were revealed to the Prime Minister after the election?
Oral Questions


Mr. Speaker:: Order, please. With respect, that is almost precisely word for word a repetition of a question which has already been answered.


An hon. Member:: Ten o'clock.


NARCOTICS
Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, on May 1 of this year a Supreme Court of Canada judgment was brought down which, in fact, not only decriminalized the possession of marijuana but also the possession of or trafficking in all narcotics. The judgment stated that all laws controlling narcotics in Canada were not passed under the criminal law-making power of Parliament and that the Narcotic Control Act is not, in fact, a criminal law but a federal statute under the jurisdiction ol the Attorney General of Canada, which puts all narcotic offences in the same category as income tax violations, violations of the Food and Drugs Act and many other regulatory federal statutes that deal with non-criminal offences. This means that law enforcement officers-


Some hon. Members:: Question.


Constantine George (Gus) Mitges: I should like to ask the minister what action, if any, has been taken to change the law to make sure that narcotics violations will be dealt with under legislation passed under the criminal law-making powers of Parliament?


Hon. Bill Jarvis (Acting Minister of Justice):: Mr. Speaker, 1 will answer on behalf of the Minister of Justice. I thank the hon. member, and I believe he is referring to the Hauser case before the Supreme Court of Canada.
There has been a great deal of misinterpretation of the nature of that judgment. The Supreme Court decided that the Narcotic Control Act was enacted constitutionally under the residual power rather than criminal law. The misunderstanding was that administrative processes following arrest would not be valid, and they would include arrest, processing, recordkeeping and extradition. That is not the opinion of the Department of Justice. It is the opinion of the department that all of those processes remain in full force, and that the Hauser case in no way detracts from or minimizes those powers.


GOVERNMENT CONTROL OVER OIL PRICES
Mr. Svend J. Robinson (Burnaby):: Mr. Speaker, my question is for the right hon. Prime Minister. Earlier in the course of this question period, the Prime Minister told this House that the government has sufficient power to control oil prices in Canada, so that no further action would be required either

October 30, 1979
Oral Questions
along the lines raised by the leader of the NDP or which have been proposed by President Carter.
Will the Prime Minister confirm to this House that aside from controls on the wellhead price of oil, no controls whatsoever exist on prices at the refining level, for transportation of oil and, most important, for the thousands of consumers and small businesses no controls exist in Canada at the retail level on the price of oil and gas?
Will the Prime Minister tell the House what action he intends to take, in view of this, to protect those consumers and small businesses from excessive price increases?


Charles Joseph Clark: Mr. Speaker, just to clarify my answer to the Leader of the New Democratic Party, which is quite clear on its face, I said 1 did not think it was necessary for us to assume to the Government of Canada all the kinds of powers proposed in the commission proposed by the Leader of the New Democratic Party. I also indicated to him that actions in relation to budgetary matters would, naturally, have to await the budget.
The hon. member is asking if we have, in fact, a system of controls that is so complete that it controls prices at every level having anything to do with any aspect of petroleum. The answer is no, we do not, and we do not intend that kind of control.


Svend Johannes Robinson: Mr. Speaker, the Prime Minister has not answered the question of whether controls exist. My supplementary question is for the right hon. Prime Minister. It relates to the six-year inquiry, by the bureau of competition policy, into alleged price-fixing and market manipulations by the major oil companies, which is nearing completion.
Will the Prime Minister support the demand of the Minister of Consumer and Corporate Affairs, speaking in this House as opposition critic on October 24, 1973, that the contents of the inquiry report be made public at the conclusion of the inquiry? Second, will the Prime Minister assure this House that at least until the inquiry has been concluded, no action will be taken on the Conservative threat to dismantle the only effective competitors to the multinational companies, Petro-Canada?


Charles Joseph Clark: Mr. Speaker, I assume the hon. member is posing questions that are to be taken seriously, and I will treat them in that way. In relation to Petro-Canada, the hon. member knows that the government is considering a report from a task force. We will make that consideration, independent of other inquiries that might be under way in the Government of Canada. I believe I gave that answer to the hon. gentleman's leader the other day.
Secondly, with regard to the inquiry that is under way, 1 can certainly assure the hon. member that if there is to be a prosecution, and if there is evidence that should be in the public domain in relation to a prosecution, that information will be in the public domain.


NATIONAL DEFENCE
Mr. Maurice Dupras (Labelle):: Mr. Speaker, my question is directed to the Minister of National Defence. It relates to a first-page story published by a Toronto daily paper concerning legal action taken by Northrop Corporation against McDonnell Douglas arising from the participation of that company in an eventual contract with DND. Given the size of the contract, I would like to know whether the minister intends to suspend his assessment program as well as any decision in this regard before making sure, first, of the good faith of the McDonnell Douglas company, and second, that there will be a significant Canadian participation in this huge market.


Allan Bruce McKinnon: Mr. Speaker, McDonnell Douglas have been in touch with us to assure us that they will replace this offset work with another contract to us and make the necessary amendments in their offer.
Essentially, this is a legal dispute between two aircraft manufacturers. I do not think that it is going to have any lasting effect on our situation. Fortunately, at the present time there is a hiatus of about three weeks as I have asked the department to provide me with more information and to provide some other departments with information before 1 am prepared to take the project to cabinet.


FISHERIES
Mr. William Rompkey (Grand Falls-White Bay-Labrador):: Mr. Speaker, my question is for the Minister of Fisheries and Oceans. It concerns the oil spill from the tanker Kurdistan which broke up west of Cabot Strait last March.
In view of the fact that oil from this tanker has clogged fishermen's nets, has fouled beaches from Burgeo to Fortune Bay, in addition to Nova Scotia, in view of the fact that the company in question, Nile Shipping Company, claims that the federal government may be partially responsible for the damage, and in view of the fact that further oil was discovered as recently as several days ago in another section of Newfoundland, can the minister tell the House whether it is under his responsibility under the Fisheries Act, and whether it has been decided who is to be responsible for the tens of thousands of dollars of damage to fishermen's gear, and when these fishermen can expect to be compensated?


Hon. James A. McGrath (Minister of Fisheries and Oceans):: Mr. Speaker, I thank the hon. member for giving me notice of the question. Responsibility, of course, is shared with
October 30, 1979

my colleague, the Minister of Transport. The initial responsibility for payment of claims rests with the owners of the Kurdistan. In this regard, we have had teams consisting of federal transport officials, federal fisheries' officials and provincial fisheries' officials visiting the affected communities. We have taken sworn statements from fishermen and gathered evidence of damage to gear.
These claims have been presented to the solicitors for the company and I understand processing of the claims is under way. To the best of my knowledge, there do not appear to be any difficulties with this procedure.


AIR TRANSPORT
Mr. Remi Bujold (Bonaventure-IIes-de-la-Madeleine):: Mr. Speaker, my question is directed to the Minister of Transport. In an interview he gave to Transpo '79 magazine, the minister explained his wish to promote the use of the Dash-7. Could the minister tell the House whether he went through an independent report which was submitted to his department at the end of 1978, recommending the use of the Dash-7 in eastern Quebec? Further, could he tell the House whether he had meetings with the chairmen of the companies serving eastern Quebec and, more particularly, of IPA and Quebecair in order to encourage them to buy the Dash-7?


Donald Frank Mazankowski: Yes, Mr. Speaker, I am aware of the report. There have been some discussions between myself and departmental officials. I regret to inform the hon. member that I have not had any discussions with any of the officials of the companies to which he referred.


INCREASES IN OIL PRICES-EFFECT ON MANUFACTURING INDUSTRIES
Arthur Phillips: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. A couple of weeks ago, in answer to a question, he indicated and confirmed that his department had done a study of the regional disparities and the regional effects of a sharp increase in the price of oil.
I should like to ask the minister if the same study included the effect on the over-all manufacturing industries of Canada and if it included the effect on inflation and interest rates?


Ramon John Hnatyshyn: Mr. Speaker, I think in answer to the hon. member's question I indicated that the department had, in fact,
Oral Questions
been carrying out investigations with respect to the consequences of price increases in terms of the oil price increase that might be contemplated. These are wide-ranging investigations to look at the macro-economic effects in terms of increases in the price of oil. They covered, essentially, the areas to which the hon. member referred.


Arthur Phillips: Mr. Speaker, in the spirit of freedom of information, could I ask if the minister plans to make that study public?


Ramon John Hnatyshyn: Mr. Speaker, it is my intention, after the consultative process has taken place and been concluded, to bring down and table for the benefit of hon. members the results of all these investigations and the results of the consultative process that has taken place, so that assessments can be made of the material and information gathered.


FISHERIES
Mr. Ted Miller (Nanaimo-Alberni):: Mr. Speaker, my question is for the Minister of Fisheries and Oceans. One of the things that we expect for the Atlantic fishery from the 200-mile limit is increased quality.
In view of the minister's expression of support on the Atlantic coast for improving the quality of the fishery, does he have any word for the people of Newfoundland with regard to the policy of the Treasury Board to curtail or cut back, to the tune of $1.3 million, assistance to small craft harbours which are crucial in improving the quality of fish that we expect to export? Has the minister been able to get any action from Treasury Board?


James Aloysius McGrath: Mr. Speaker, certain projects have had to be deferred because of spending restraints which the government has had to adopt because of the mess we inherited from our friends across the way.


Some hon. Members:: Oh, oh!


James Aloysius McGrath: I would be very pleased to provide the hon. member with further details when my estimates come before the standing committee tonight at eight o'clock. In any event, I will be glad to let the hon. member have full details.


THE ADMINISTRATION
Mr. Maurice Harquail (Restigouche):: Mr. Speaker, in view of the absence today of the Solicitor General, I would like to

October 30, 1979
Oral Questions
direct my question-which has to do with the administration of justice in Canada-to the Parliamentary Secretary to the Minister of Justice. It has to do with a question I posed earlier when we were discussing the whole question of the statement made by the Leader of the Government, in this House, in which he indicated that he was looking for a novel way to execute illegal acts legally.


Donald Frank Mazankowski: Mr. Speaker, I will certainly take that question as notice and consult with the minister responsible.
Does the parliamentary secretary know whether or not any such acts have been carried out in this country, and whether or not his minister-who is not in this House-has had any discussions with the Solicitor General with respect to the question 1 am posing today?


Mr. George Cooper (Parliamentary Secretary to Minister of Justice and Attorney General):: Mr. Speaker, I will take that question as notice and provide a reply in due course.

[ Translation]


EMPLOYMENT
Mr. Dennis Dawson (Louis-Hebert):: Mr. Speaker, my question is directed to the Minister of Labour. Can he confirm that he received the report of Chief Justice Laurent Cossette concerning the harbour of Quebec, and tell us what the government intends to do with its recommendations concerning the lay-off of 102 longshoremen in addition to the dismissal of 32 other workers?


Hon. Lincoln M. Alexander (Minister of Labour):: Mr. Speaker, I can confirm that the report has been tabled. As a matter of fact, it has been released to the parties involved.
In terms of what the government will do, we are now awaiting replies from the other parties involved before we can take any position at all. But for the hon. member's information, the report has been released to the affected parties.


INQUIRY AS TO ACTION GOVERNMENT WILL TAKE TO ASSIST VICTIMS OF INDUSTRIAL DISEASE
Dennis Dawson: Mr. Speaker, my supplementary is addressed to the same minister or to his desk-mate, the Minister of Transport. Will the minister tell the House what he intends to do with this report in light of another one which indicates that several of the same longshoremen in the port of Quebec are suffering from industrial disease?


MOTION TO ADJOURN UNDER S.O. 26   FISHERIES PROBLEMS OF LARGE TRAWLERS IN GULF OF ST. LAWRENCE
Mr. Alexandre Cyr (Gaspe):: Mr. Speaker, seconded by the hon. member for Gloucester (Mr. Breau), I ask leave to move a motion for the adjournment of the House under Standing Order 26 for the purpose of discussing a specific and important matter requiring urgent consideration since a decision made by the Minister of Fisheries and Oceans (Mr. McGrath) will be implemented starting November 1. The government is now allowing vessels exceeding 100 feet to enter the Gulf of St. Lawrence and capture 6,000 metric tons of codfish normally reserved for the costal fishermen of the interior of the Gulf.


Mr. Speaker:: Order, please. Pursuant to Standing Order 26, the hon. member for Gaspe (Mr. Cyr) has given the Chair notice of his intention to move an adjournment motion to deal with an important issue. I suggest that the importance of the issue which the hon. member for Gaspe has raised cannot be questioned. However, one of the conditions which our Standing Orders require before such a debate can be held is that a real state of urgency exists, and I quote: "a genuine emergency calling for immediate and urgent consideration". The Chair has serious reservations concerning this aspect of the motion, suggesting that this is rather a permanent problem which has been raised in the House on a number of previous occasions. On October 24, 1979, for instance, there were two motions dealing with this issue which were moved pursuant to Standing Order 43 by the hon. member for Gloucester (Mr. Breau) and the hon. member for Westmorland-Kent (Mr. LeBlanc). This latter motion was, as a matter of fact, supported by the hon. member for Gaspe. Moreover, the hon. member for Gaspe himself dealt with this question in the House on October 25 at the time of adjournment.
Considering that the question raised today by the hon. member for Gaspe was dealt with recently in the House; considering also the difficulty which exists now in connection with a distinct and separated element which must now be identified by the hon. member for Gaspe not merely as a subject of permanent difficulties but as an emergency; and considering finally that the hon. member has failed to identify such an element in his notice of motion, I feel that this is not

October 30, 1979

an issue which could now be dealt with properly under the provisions of Standing Order 26.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation)

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. David Kilgour (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 65, 147, 148, 150, 197, 277, 282, 291, 358 and 367.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Orlikow: 1.	Who (a) is the president (b) are the vice presidents of the National Harbours Board?
2.	What is the annual salary in each case?


Donald Frank Mazankowski: 1.	(a) Mr. Pierre A. H. Franche (b) Mr. Jacques Auger
2.	(a) $45,000-550,000 (b) $40,000-$45,000


Mr. Herbert: Is it the government's intention to limit the use of the social insurance number with regard to its use as a registration and account number for many government plans and, if so, what measures is the government taking?


Hon. Perrin Beatty (Minister of State (Treasury Board)):: The government will shortly be proposing legislation to restrict the use of the Social Insurance Number within the federal government where provision of the SIN by individuals may be mandatory, along with some initial steps to limit the use of the Social Insurance Number outside the federal government.


Mr. Herbert: Is it the government policy to promote the use of the social insurance number as a singly identifying number for all Canadians in as many departments and agencies as possible?


Henry Perrin Beatty: No. it is the government's intention to reverse the trend towards the use of the Social Insurance Number as a single
Order Paper Questions
identifying number in departments and agencies of the federal government.


Mr. Herbert: Has the government taken measures to protect the confidentiality of information filed in government computer banks and, if so, in what way?


Henry Perrin Beatty: After introducing its electronic data processing (EDP) policy in 1972, Treasury Board subsequently issued directives to departments on computer security matters in 1974. At the same time a Security Evaluation and Inspection Team (SEIT) was created within the RCMP to review security measures in computer installations, including private sector service bureaux handling government information.
Departments report back to the RCMP on the implementation of SEIT recommendations. The RCMP reports annually to the Treasury Board Secretariat on the state of computer security in government. Computer security standards are now being developed. For computer work performed on private sector computers, security requirements are part of the contractual arrangements with the supplier. Part IV of the Human Rights Act requires that the use of computer banks containing personal information be strictly controlled, including new uses of existing data.
An area of considerable concern is the linking of computer banks, for instance using SIN numbers to obtain more complete information on individuals. The government is preparing legislation that will ensure greater legal protection against unauthorized disclosure of personal information and put constraints on the ability to link files using SIN, by limiting the number of uses for the SIN number. This legislation will be introduced in this session of Parliament.


Mr. Herbert: How many (a) permanent (b) term employees were on the Department of Transport's payroll on March 31, 1979?


Donald Frank Mazankowski: (a)
19,067; (b) 1,909


Mr. Herbert: In each of the past five years, what amount was deducted by individuals on their income tax forms as (a) charitable contributions (b) medical expenses (c) political contributions (d) capital losses?


Walter David Baker: In each of the past five years, the following amounts were deducted by individuals on their income tax forms as (a) charitable contributions; (b) medical expenses; (c) political contributions; (d) capital losses.

October 30, 1979
Order Paper Questions
'(a)	Charitable	1973	1974	1975	1976	1977Contributions	392,867	439,693	505,553	598,700	659,478'(b)	Medical Expenses Allowed	112,420	119,512	169,102137,851	155,642	(c)	Federal Political Contributions	1,273	2,394	2,800	3,114'(d)	Allowable Capital	Losses	47,645	83,311	71,673	68,115	86,549Notes:	(i) All figures are in thousands of dollars.(ii)	1977 is the last tax year for which date is available.(iii)	(a) & (b) do not include claims for the standard deduction of $100(iv)	c) These figures are the amount of credit allowed each year for
the federal political tax credit. We do not have figures on the actual amounts of the federal political contributions. This program began in 1974.
* These figures are available on a yearly basis in the publication, "Taxation
Statistics".


Mr. Herbert: As at March 31, 1979, how many (a) Anglophones (b) Francophones occupied bilingual positions in the public service for which they did not meet the language requirements of the position?


Henry Perrin Beatty: As of Friday, March 30, 1979, there was a total of 55,985 occupied bilingual positions. Of this total, 16,532 were occupied by employees (10,095 Anglophones and 6,437 Francophones) who did not meet the language requirements. Of this 16,532, there were 14,953 employees or 90.4 per cent (8,825 Anglophones and 6,128 Francophones) who were exempted from meeting the language requirements of their positions because of incumbent's rights, long service or age entitlements. A few others were exempted on compassionate grounds due to health or personal circumstances.
The remaining 1,579 employees or 9.6 per cent (1,270 Anglophones and 309 Francophones) were appointed to bilingual positions on the condition that they undertake language training in order to meet the language requirements of their positions. These employees are, therefore, either on training or scheduled for training.


Mr. Herbert: By province, how many public servants are presently receiving the bilingualism bonus?


Henry Perrin Beatty: The following presents a breakdown by province, or by region where applicable, of the number of public servants presently eligible to receive the bilingualism bonus.
British Columbia	112
Alberta	109
Saskatchewan	52
Manitoba	238
National Capital Region	28,463
Ontario	1,708
Quebec	14,571
New Brunswick	1,444
Prince Edward Island	23
Nova Scotia	303
Newfoundland	27
Northern Canada	16
Outside Canada	205
Total	47,271


Mr. Herbert: 1.	(a) What percentage of income tax deducted from a resident of the province of Quebec working in Ontario, is transmitted to the Provincial Government (b) on what date is it transmitted?
2.	Is the taxpayer able to opt to have the percentage increased?
3.	Did the Minister of National Revenue receive complaints that Quebec residents working in Ontario must remit additional taxes to Quebec while, at the same time, they claim a rebate from the federal authority?
4.	Will the option to increase deductions, increase the amount transmitted to Quebec and what percentage of the additional amount deducted will be added to the amount eventually to be claimed as a federal rebate?
5.	Did the Minister discuss the problem with his provincial counterpart?


Walter David Baker: 1. According to Section 154 of the Income Tax Act and regulation 3300 to a prescribed tax transfer rate of 45 per cent is authorized. The amounts are transmitted semi-monthly to the provincial government.
2.	The actual rate cannot be increased by the taxpayer as it is prescribed by regulation. A taxpayer may however increase the total amount of tax deductions, in which case 45 per cent of the increased deductions would be remitted to Quebec. (See answer to part 4).
3.	Isolated complaints have been received on this matter.
4.	An increase in deductions at source will increase the amount to be transmitted to Quebec by the 45 per cent transfer rate. The remaining 55 per cent will either be used to reduce the balance of federal tax payable or will be refunded to the taxpayer. If the taxpayer wishes he may remit additional moneys directly to the provincial government involved rather than increase his withholdings at source.
5.	No. However, discussions at the official level are held periodically to discuss these matters.


Mr. Cossitt: 1.	Does the Holy Spirit Association for the Unification of World Christianity have a Department of National Revenue taxation number permitting receipts for income tax deductions and, if so (a) is the number 0362517-47-13 (b) on what date was it granted and for what reason (c) who applied for it and specifically who signed the application?
2.	What is the address of the organization?
3.	To the knowledge of the government, is the organization the same one which is sometimes known as the "Moonies" or the "Unification Church"?
4.	Is the government investigating the granting of income tax numbers to extremist religious groups often referred to as cults, etc. and (a) if so, what are all the details (b) if not, will the government make such an investigation?

October 30, 1979


Walter David Baker: 1. (a), (b) and (c) Registration No. 0362517-47-13 was assigned to the Holy Spirit Association for the Unification of World Christianity when that association was granted the status of a registered charity effective September 7, 1969. The association is therefore entitled to issue official receipts for income tax purposes to its donors. Its registration was granted by officials of the department, acting on behalf of the minister at that time, in accordance with the Income Tax Act and regulations. Registration was granted to the association because, on the basis of information available, it qualified as a charity in accordance with common law principles and met the requirements of the Income Tax Act for registration as a charity. An officer of the association signed the application for registration. The secrecy provisions of the Income Tax Act do not permit disclosure of the name of that officer.
2.	The address of the association, as shown on its 1978 public information return, is 80 Admiral Road, Toronto, Ontario.
3.	The only name by which the association is identified in documentation submitted to the department is the Holy Spirit Association for the Unification of World Christianity, although in correspondence the names "Unification Church of Toronto" and "Unification Church" have been used.
4.	As is the case with any taxpayer, a registered charity may be audited at any time for taxation purposes and every year selected charities are included among taxpayers audited by the department. The department does not propose to institute a special program for the audit of "cults".


David Kilgour: Mr. Speaker, if question No. 149 could be made an order for return because the answer is too long to be printed in Hansard this return would be tabled immediately.


Mr. Herbert: What departments and agencies are using social insurance numbers as a requirement for participation in their 1978 programs and, in each case, what specific use is being made of the numbers?
Return tabled.


Mr. Speaker:: The questions enumerated by the parliamentary secretary have been answered. Is it the pleasure of the House that question No. 149 be deemed to have been made an order for return as suggested by the parliamentary secretary?


Some hon. Members:: Agreed.
Income Tax Act


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


Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, I would like to thank the parliamentary secretary for replying to some of the questions today. Before he gets too euphoric about my compliments, I would like to draw his attention particularly to three questions, Nos. 133, 134 and 136, as examples of questions which refer to companies that are proposed for sale by the government. These questions appeared on the order paper in the past session. I would imagine that since these companies are actively on the "for sale" list it should be fairly easy for the parliamentary secretary to provide replies. I would like him please to give his attention to my request.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, October 29, 1979, consideration of the motion of Mr. Crosbie that Bill C-17, to amend the statute law relating to income tax and to amend the Canada Pension Plan, be read the second time and referred to Committee of the Whole.
Mr. Lloyd Axworthy (Winnipeg-Fort Garry):: Mr. Speaker, like other members on this side in the official opposition 1 was quite content to stay satisfied with the well-crafted Liberal legislation which had been presented by the Conservative party. But after listening last evening to the rather poetic description given to us by the hon. member for Edmonton East (Mr. Yurko) on Tory economic policy as being similar to someone's exposed backside ascending toward heaven, I was so inspired by that particular description of how Conservatives carry out their economic analysis that I felt it deserved at least some reply from members on this side. I suppose by way of corollary we could say that if that is a description of the way in which the Tories measure their economic performance, we can say the devil takes the hindmost in these circumstances.
Listening to the debate on this particular tax bill demonstrated to me one very clear reason why it is that this country needs a Liberal party. As we listen to the exaggerations from the left and the right, each expressing his or her own form of pristine power theology, it becomes clear that if this country were to be allowed to polarize between the extremes, such as is being advocated by members in this group and that group, what would happen is that the country would become so totally confused and overwhelmed by hyperbole of these orthodoxies

October 30, 1979
Income Tax Act
that nothing practical or realistic could be done in the way of tax policy.
There is perhaps no more important debate that takes place in this House than the analysis and estimate of how we want to allocate our taxes. It is the basic foundation document of our economic order. It determines very clearly who pays and who gets the benefits in our society. If we were simply to follow the preachments and teachings of those on the left and the right, we would find out we have a society which is carved into two totally discrete, disparate groups in which there is no common ground.
I was interested last night to hear the hon. member for Broadview (Mr. Rae) talk about the two teams of tight money.
I tended to agree in part with his analysis. There are two teams in this House. There is also a group of kibitzers on the left, the armchair quarterbacks who will never be in the game. They say they never have the opportunity to make decisions. They can afford to exercise their particular form of virtue. Someone once said you can have a lot of virtue if you have never been subject to temptation. That is certainly the case with the New Democratic Party. Of course they can express themselves with sanctimonious, virtuous statements about how to run the world. However, when have they ever had the opportunity to do anything about it? They are the classic eunuchs. They are very adapt at talking about sex because they never have to participate in it. They are really the grand observers in our economic order. They know they will never have to govern. If they want to be the kibitzers, the armchair quarterbacks observing the scene and offering their soapbox preachments, that is fine with us, but let us get back to serious debate.


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Scott, Victoria-Haliburton):: Order, please. We should extend the hon. member the courtesy of the House to continue his speech. Can we have order.


Lloyd Axworthy: What happens with soapbox artists, Mr. Speaker, is they are able to produce a lot of noise but no light. That has been their basic practice in this House. As long as they can keep yelling, screaming, pounding and clapping, no one will really bother looking at what they have to say, which usually adds up to nothing anyway.
What should concern members of this House is not so much what is happening with the rump group in the corner, but that many of the same bad habits are being picked up by members opposite. They think in this time and age the only way to combat the purities of the left wing is to ascribe a purity to the right wing.
We had a perfect example in the speeches last night when we were raised to elevations by the theological purity of the hon. member for Edmonton East (Mr. Yurko) regarding the free market, that wonderful mechanism that has done so much for so long. As a result we have this basis of total domination
[Mr. Axworthy.)
versus the free market. It is beginning to sound as if this is a college common room. We are not talking about practical things any more.
We have the theorists and philosophers on the right now combining with the theorists and philosophers on the left. I am afraid that theology is not what is in order in Canada today. We need hard economics. The only exception to that is the Minister of Finance (Mr. Crosbie) who does not believe in theology but thinks he is Johnny Carson. He thinks that rather than worry about economic policy, he should practise his new comedy routine.
The question we have to pose is, when do we get serious about the economic conditions of this country? When do we start looking at taxation policies which are going to make some practical sense? If I still have a moment or two, perhaps I can provide some illustrations to these philosophers to the left and the right. I do not want to confuse them with the facts; I know that would interfere with their particular sort of music.
It is important to recognize certain facts about the way the economy has been working in this country. Let us deal with these gentlemen on the right. They seem to feel there is an enormous burden hanging around the necks of the Canadian taxpayer, that everyone is walking around overburdened by this enormous government expenditure. They like to parade in front of us glorious examples, such as a country like West Germany which is so free of these kinds of burdens and whose economy is so forceful.
I wish to point out that according to a recent report by the OECD the percentage of expenditure in Canada of government taxation related to the gross national product is less than in West Germany. How does that fit with the facts that are constantly paraded before us, that the amount of taxation that is dispensed in this country is less than in West Germany? It is only one percentage point above that of the United States, the home of free enterprise. Therefore, this enormous burden we have been told about simply does not exist in terms of the facts.
What does exist is that there is a large cluster of countries, all of which have a percentage between 30 and 35 per cent of their GNP. Obviously that suggests there are more complicated and more real factors at work in the economy than the hyperbolic situation of this enormous government albatross bearing down upon the backs of the people.
The Tories simply do not look at where the economy is going or what it has been doing. They prefer to deal in the areas of vision and fantasy rather than look at the facts. The facts are here in the Department of Finance report. I suggest that the Minister of Finance, who so conveniently provides memoranda for members of the finance committee, should provide some of the same literature from his department to his own caucus and recommend that they start reading these facts.
On the same kind of account, I listened with a great deal of amusement to the hand-wringing, teeth-gnashing and caterwauling of the NDP last night about how for yeaifs those nasty Liberals had really put it to the poor people. That is the kind
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of sob story we received about how awful the tax system would be.
I refer members of the NDP to the same report, which points out in terms of lower income groups that they have a much higher degree of discretionary income than almost any other country in the OECD. In fact, it has improved by close to 50 per cent in the past three or four years. When you look at the number of tax exemptions that are available to low and modest income Canadians, they have far more tax exemptions than are available to the West Germans, Americans or those in most any other country.
All of a sudden we have found that rather than have the previous government in the back pockets of the big corporations, as they like to testify, the fact is they have far more discretionary income and there have been far more initiatives taken to lower taxation for those groups. As a result, there is far more income available to the very group about which they are concerned.
A member from one of the Vancouver ridings, I forget which one it is, used a term which 1 do not think is considered parliamentary under the Hansard arrangement. 1 would not want to repeat it. I would suggest to her, if that is so, that she take a course in straight reading of English. I am prepared to do that for her. I know it is not printed in the language that she is prepared to use as it does not include those kinds of phrases, but it does suggest that for the income group under $5,000, discretionary income for a family of four has gone up 8.3 per cent over the past year; and for the income group between $5,000 and $10,000 it has gone up 9.4 per cent in the last year. Again, 1 know they do not want to be confused by the facts. I know that is not the socialist way to live. They do not want to look at what is real or effective. They simply want to go by the theories learned at the knee of some U. of T. professor. It is about time they looked at the facts so that their economic comments could be more effective and useful.
Once we get away from the political dialogues coming from left and right we can start looking at the real problems in taxation policy, and there has been no more real problem apparent than the whole issue of what we should do about interest rates, because those rates are directly related to the tax policies we have in place. When we look at the statements being made by members of the government the first thing we should discount is their constant survival technique of saying "It was your fault." The fact is that many of the measures now being introduced were not the fault of those previous Liberals but are initiatives taken by this government.
I point out one particular concern. We find the Minister of Finance and the Prime Minister (Mr. Clark) pledging that they are going to stand in the trenches and fight the good battle against inflation. They are going to be Horatio on the bridge and get tough and do all the things that are required. They say, "Boy, if it's going to hurt the people it's going to have to hurt because eventually we are going to get a solution." And how do they propose to solve this problem? They
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are going to cut back government spending. They are going to reduce the deficit.
Well, members on this side may be excused if we have the odd note of skepticism in our voice. Frankly, we do not know what to believe from members opposite. We heard during the election campaign that the best thing for the Canadian economy was to have a bigger deficit, a stimulative deficit. Apparently those words have disappeared from their vocabulary because we do not hear about a stimulative deficit any more. But that is exactly what they are intending to do, because while they are reaming the Canadian public by the increasing acceleration of interest rates, they are doing absolutely nothing to control deficit spending.
How can they with any honesty or candour stand up and say they are fighting the good economic fight when day after day they bring proposals before the House which would have the result of increasing spending and deficits? While they are talking about the need to hold firm and reduce government spending they are proposing an outlay of an additional $500 million through their mortgage tax program. Where will they get the money for that? Is it going to be concocted out of thin air or do they intend to cut back other worth-while programs? In fact, what they will do is increase the deficit, which will increase the inflationary pressure.
Along the way, Mr. Speaker, we had that grand report from the task force on PetroCan. What does it advocate? It advocates an additional $2.3 billion deficit. Could there be anything more inflationary than suggesting that the way to solve our economic problems is to add $2.3 billion to the existing $11 billion deficit? This really makes the words of the Minister of Finance turn to ashes in his mouth. How can he tell the finance committee he is fighting the good fight when his colleagues in the government are talking about adding billions of dollars to an already substantial deficit? That goes under the definition of total contradiction. You cannot have it both ways. You cannot be talking and plighting your troth about the need to restrict government spending and then have ministers say that if Petro-Canada were privatized it would be the best thing that could possibly happen.
We listened to the hon. member from Winnipeg-Assiniboine (Mr. McKenzie) give us his version of how the economy works; that is something that is probably a cross between Lewis Carroll and Walt Disney in terms of the way in which it develops fancies about the future. He was saying the Tories were going to strengthen Petro-Canada. They would strengthen it first by cutting it in half and turning it over to the private sector, which would be far better managers but would cease to do many of the things that Petro-Canada does, and strengthen it by adding a $2.3 billion deficit to the public treasury. That is a curious way in which to describe the strengthening of this oil agency. It does not add up according to even the simplest economic axiom the Conservatives appear to be using.
The fact of the matter is there is a substantial opportunity to strengthen PetroCan if the government only had the courage to take it, and the way the government could acquire that courage would be to tackle the question of oil pricing, which

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they keep pushing further and further away from resolution, simply apply a windfall profits tax, and then turn the major proceeds of that tax over to PetroCan so that it could use that money for investment in energy to the benefit of all Canadians. Let us not go through the mental gymnastics in which the hon. member for Winnipeg-Assiniboine and the Minister of Finance constantly engage.
Let us talk about an option which makes some sense. Large pools of capital are being pulled out of the economy of this country and allowed to sit fallow in certain large heritage funds. These funds are not being used for investment in major energy projects, major transportation projects or for major agricultural purposes; they are simply being allowed to go unused. We have the paradox of a government which says they are good economic managers when in fact what they are doing is simply delaying the inevitable and allowing themselves to be used by a provincial premier, one who last evening had the audacity to declare his independence, in effect, from any form of common weal in this country. How the Prime Minister can calmly turn the other cheek to the challenge and threat posed by the statement of the premier of Alberta is beyond me. It simply means that the Prime Minister thinks his way of dealing with the provinces, of avoiding a fight by giving away his lunch all the time, will somehow bring about a peaceful solution. 1 have news for the Prime Minister: he has given away his last piece of lunch, he has nothing more to give. All he has done is set up a self-fulfilling prophecy, because these premiers will go after him with all the more ferocity and all the more ambition, knowing he is not prepared to stand up to them.
It is a form of betrayal of the Canadian people that we do not have a Prime Minister who is prepared to stand up to the Premier of Alberta and say: "It is absolutely necessary that on the matter of oil pricing you do not speak just for 8 per cent of the population; someone has to speak for 100 per cent of the population". I am amazed, Mr. Speaker, that the Prime Minister would allow that kind of declaration of economic separatism to be announced and not be prepared to respond with any form of strength or effectiveness. It was one of the sad moments in the history of this country when the Prime Minister once again backed away from living up to his responsibilities.
There are economic answers available; it is just that the government does not want to tackle them. Let us talk for a minute about a favourite topic of the Minister of Finance who has told us he has some choices available to him when it comes to the problem of high interest rates. He said: "1 have to hold firm on monetary policy but I do have the opportunity to make some choices fiscally". What is the choice he has made? He has made only one choice, and that is to introduce the mortgage tax credit program which he thinks will be salvation for all that ails Canadians. He stands up in the House with a great deal of flourish and says: "Think about the 3.8 million households which will get benefits under this program".
What he does not mention are the other 3.8 million households which will get no benefits under the program. Are

they somehow immune from inflation? Will they somehow be able to avoid the problem of high interest rates? What the minister is really saying is that he only cares about 30 per cent or 40 per cent of the population and that the rest of the population can be forgotten. But it is quite obvious that they, too, are affected by high interest rates.
It is not just homeowners who are faced with the problem of escalating mortgages. One of the major problems we are facing today is in the rental market. Many of those rental units were introduced under the ARP program and carry five-year mortgages at 8 per cent which are coming up for renegotiation. The rate will now be 14 per cent, a 6 per cent increase, and they will either have to declare bankruptcy or suffer substantially ballooned rents far beyond the means of most people living in them. Are they to be forgotten? Is the minister excluding that section of the population which for one reason or another decides to rent rather than own accommodation? Is the Minister of Finance saying he is prepared to forget all those who do not have mortgages and therefore will receive absolutely no benefits whatsoever other than the property tax credit, which this year will be $62.50? Is he forgetting those people who are going to find, as they face increases in oil prices which will add up to $300 or $400 on their housing bills, that somehow they are going to be included in this magic mortgage credit program? Who speaks for them? Where are choices being made for them?
The fact is that what the minister is introducing is bad economic policy. He has himself caught in the campaign commitments of his leader and is now trying to wriggle out by putting as pleasant a face on a bad proposition as he possibly can. However, it is bad economic policy because he has committed major expenditures for this year of $575 million. Next year they will be well over $1 billion and ultimately closer to $3 billion over the long term, when he has no ability, according to his own confession, to forecast what the economy will be like.
The Minister of Finance is introducing a structural economic change when what we are in desperate need of are shortterm responses to real and immediate problems. I am sure the minister's economic advisers have told him that he cannot introduce an economic instrument which has a four-year fixed term to it when the economy is gyrating like a crazy top, partly because of the decisions taken by the Bank of Canada, which is under the jurisdiction of the Minister of Finance. The minister is creating a problem and avoiding solutions.
Solutions are obvious and available to him. He could be taking that $575 million and using it to deal with some of the immediate consequences of those 14.5 per cent and 14.75 per cent interest rates on mortgages and prime loans. For example, he could be providing some emergency assistance for those who have to renegotiate their mortgages. He is condemning thousands of Canadians right now because he is not prepared, as I understand it, to make directives to the banks or the lending institutions. Thus these Canadians are locking them-
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selves into mortgage rates of 14.75 per cent. If those rates go down six months from now, those people will be left in the wash. They will be high and dry up on the shore, because if interest rates recede they will still be paying 14.75 per cent carrying costs. Is that a fair and equitable kind of system? Is this a government which is really concerned about the problems of all Canadians, or is this Minister of Finance simply saying once again that he does not care and that he is not concerned about that group of people?
Is it also true that this Minister of Finance is not prepared to provide any assistance to the housing market? The volume is falling out each hour which goes by. It is in total chaos. Building starts have now fallen close to 30 per cent in the rental field. There is going to be an enormous shortage of rental accommodation come next summer. As a consequence, demand will grow and prices will go up. I think economists would call that counterproductive, and yet the minister says he has choices. Why does the minister not start exercising his choices? Why does he not come out of his comic corner now and start doing something effective to help deal with the economic problems in this country? Let him do something now. Let us not wait. What is going to happen at the end of November?
We are now going through a period in which people daily have to suffer the ravages of high interest rates. It simply is not fair for the minister to say he is going to hold the line and hold tough. It is not the Minister of Finance or the Prime Minister who is holding tough. They are forcing many very ordinary Canadians to hold tough, and those ordinary Canadians are the ones who will continue to suffer under the present circumstances.
So when it comes down to the way in which tax policies can be organized and arranged, there is much left to be said about the present state of our tax system. The only conclusion we can come to when we look at the tax policies which so far have been the product of Tory economic thinking is that the Tories are going to add substantially to the deficits of this country. They will add substantially to extended government spending, to the point where estimates are that maybe the Prime Minister was right in the election campaign that there will be a $17 billion deficit. But it will not be a deficit caused by Liberals; it will be a deficit caused by Conservatives. That is the real issue.
Maybe the Prime Minister does know something. We have asked him questions and he does not want to 'fess up, but maybe he really does know something we do not know. Maybe he knows that a big deficit is coming around the corner. With all the commitments he has made regarding allowing new tax write-offs to professional consultants, his tax credit program and his Petro-Canada proposal, we have already counted up $2 billion, $3 billion or $4 billion in additional government spending. I suppose the unstated proposition is that this government has its spending plans, and it is the unspoken conditions which the government is not prepared to disclose. That is what we are really after. The government pell-mell is going to increase deficits. At the same time it is raising interest rates. If there ever was a crazy quilt economic strategy, this one has to be it.
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The government is increasing interest rates while at the same time allowing deficits to rise. How one justifies that contradiction in economic stance I simply do not know, and it is going to be a fascinating experience to watch the verbal exercises of the Minister of Finance as he tries to climb out of that particular maze. That is exactly what he is climbing into. That is the trap he now finds himself in, and it will be fascinating to watch how he manages to get out.
However, I do not think he will get out. I think what he is prepared to do is to make one simple trade-off. To satisfy the economic purists, those Adam Smith theoreticians about whom we were lectured this morning in the Standing Committee on Finance, Trade and Economic Affairs, the minister is prepared to force this country into a serious recession. That apparently is the trade-off this Minister of Finance is prepared to accept.
When we are debating tax bills I think the conditions and features of this economic theory and strategy should be more revealingly disclosed in this House. That is why I welcome this opportunity. I thank the hon. member for Edmonton East for his inspiration. I think he described Mabel the maid's backside ascending to heaven, which is probably the best description of Tory policy I have heard yet since it is simply a fantasy and a vision and has no grounding roots in the reality of the economic world.
As we use this tax bill to sell certain propositions, we say to the Minister of Finance that we would like to see some very immediate short-term steps to cushion the impact of his high interest rates and to help those people in the Canadian economy who are caught and squeezed to the point where they are simply not going to be able to recover. That is the kind of requirement the minister should recognize.
In the area of housing there is a requirement to undertake some immediate rescue operations, to provide for some stability in that market and to take a look at the phony-boloney figures the minister produced today. He said there will be only limited and negligible impacts of high interest rates. My head, Mr. Speaker! That is simply not the case. The escalating costs in these areas are close to 30 per cent to 50 per cent as a consequence of the minister's high interest rates, and he apparently is not prepared to do anything at all about them.
The minister does have choices to make. The problem is that he is refusing to make those choices, and while he refuses to make those choices, the country suffers.


Mr. Bill Blaikie (Winnipeg-Birds Hill):: Mr. Speaker, I would like to begin my remarks by saying how happy I am that Providence has provided me with this opportunity to follow the hon. member for Winnipeg-Fort Garry (Mr. Axworthy), which gives me the opportunity to respond, in the opening part of my remarks, to some of the things the hon. member had to say.
I was interested in the hon. member's disparaging remarks about theology and, presumably by association, philosophy and any other attempt to think structurally and coherently about policy. It strikes me that this is an indication of the fundamen-

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tal weakness of the Liberal party when it comes to making any kind of policy.
It strikes me also that perhaps the introduction of ideas, whether they be theological or ideological, into political debate is, on the one hand, an embarrassment to the Liberal mind because it calls to their minds the fact that they never saw fit to be guided in this way over the years when they were in government; and on the other hand, it is an indication of the extent to which they do not understand the situation in which we find ourselves at this point in history where, because of the smallness of the planet-not to mention the country-it is indeed a matter of serious political concern that we get down to talking about ideas, about theology and about how we are going to organize ourselves.
No amount of facts by which the hon. member suggests we are confused will help us out of the darkness in which we now find ourselves, Mr. Speaker. In fact, the whole question of facts is an illusion. We cannot have facts without perceiving them in some structural framework. That is where the hon. member goes wrong. I do not always agree with the theologies I hear from the other side of the House. Nevertheless, because of that I would not be moved to say that these questions with which we deal are not theological or philosophical in nature.
The routine argument of the Liberals when confronted with serious political debate is that somehow people who want to talk about ideas are inferior to those who would sort of meander along, taking the easy political route or taking the road of expediency. I think that this is an indication of the bankruptcy of potential leadership which we find in the caucus immediately to my right. I recommend that they do the House a favour and take a sabbatical from trying to be pragmatic and from filling their minds with statistics, and they get back and do a little reading. Perhaps a little Plato would help or some biblical study.
What I want to speak about this afternoon is the question of tax write-offs on pollution controls. I now come to what I intended to say before I was provoked by the inadequacy of the arguments being advanced by the hon. member for Winnipeg-Fort Garry. I want to speak to the provisions which we find in this bill for tax write-offs on pollution controls. My concern is that this method of seeking to control pollution is woefully inadequate, for a number of reasons on which I should like to elaborate at this time.
First, the amount of money involved, even if this were the right way to go about controlling pollution, is so small as to suggest that this government is hardly serious about pollution control. It hardly represents a massive effort and is revealing in that it appears that this government is not willing to have the corporate sector bear even the cost of a token effort to control pollution. The toughness and the tough decisions that the Prime Minister (Mr. Clark) likes to talk about as being so characteristic of his government are reserved for the Canadian people alone, with weakness being the characteristic of the government on all other fronts.

Second, this way of seeking pollution control is really not a method of control at all. It leaves the responsibility for pollution control with the companies involved. The problem with this is that these companies have no incentive to use their control mechanisms responsibly once they are in place, or indeed if they are put in place. Neither has the private sector, I submit, an honourable record in this area of concern. Its ability to take initiative and responsibility in this area is not one that inspires confidence, in me at least.
Furthermore, this country has too often been held to ransom by corporations which have threatened to shut down their operations rather than comply with environmental standards. What this provision for write-offs means is a further capitulation to this kind of blackmail, capitulation which establishes once again the principle by which this government lives, and by which indeed the former government lived, and that is the principle of the people of Canada being made to bear the social costs, and in this case the environmental costs, of economic development while the profits from such activities are left to the disposal of private interests.
Third, and following from this observation about social and environmental costs and their relationship or lack of it to private profits, the provision for write-offs is wrong in that it acts as if the corporate sector were too improvished to afford pollution control, and must therefore be the object of government handouts. In addition to the fact that this is another case of handouts that this government does not mind, as opposed to all those other handouts to people who are really in need, which they do mind, it is also a case of corporations being rewarded for not instituting pollution control on their own by government money to do what they should have done in the first place. Hon. members opposite are the people who talk about the true cost of things, about realistic accounting. Yet every attempt to have comprehensive pollution control integrated into the cost of things is resisted. Why is that? Because the market might adjust itself in such a way that they would have to lower the percentage of profits which results from these activities.
I submit that in the absence of public ownership, where cost and profits are born by the same body, that is to say the public, environmental goals and standards should be figured into the real cost of products and ways should be found to do this. Companies should be required to meet these goals and standards out of profits, unless, of course, that is completely impossible and there is a pressing environmental danger.
Mr. Speaker, questions of the environment are too important to be dealt with by measures designed to rely on voluntary actions which absolve governments of responsibility. There is the responsibility of the government to protect the environment, because by doing so it lives up to its undisputed responsibility to protect the people of this country, and living up to this responsibility will mean more than a few tax write-offs.


Mr. Donald J. Johnston (Saint-Henri-Westmount):: Mr. Speaker, the hon. member for Winnipeg-Birds Hill (Mr. Blaikie), in discussing Bill C-17, has taken the position that his party has theology and ideas to offer, but that we Liberals are
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very pragmatic. 1 am certainly not ashamed of pragmatism. In fact, I think it is one of the hallmarks of Liberalism. I would also like to say that we too have a number of, not necessarily philosophical ideas, but certainly theoretical ideas which a debate on a bill of this kind gives us the opportunity of putting forth.
Unfortunately it is not providence, I do not think, which permits me to follow the last speaker, the hon. member for Winnipeg-Birds Hill, or the hon. member for Broadview-Greenwood (Mr. Rae) who spoke on this bill last night. In fact, it was the whip. Nevertheless, 1 have a number of points which 1 should like to clarify in terms of the presentation made by those gentlemen, particularly the hon. member for Broadview-Greenwood.
During the debate last Thursday night, I raised some question with respect to the entire area of the taxation of corporations. The bill with which we are concerned here also touches in a very important way upon corporate tax, particularly with respect to the small business deduction of those corporations which people commonly refer to as professional corporations or service corporations. My concern for this area of corporate taxation goes back many years. This is a philosophical or theoretical argument. The other night I made the point that one cannot tax a corporation. I recall having said that one cannot tax a corporation any more than one can tax a dog, much to the snickering of some members around me. Subsequently a number of people raised the issue with me. Certainly we have a corporate tax, but also there is a dog tax in many municipalities of the country. My point is that a corporation is not a person. A corporation cannot consume goods or services. A corporation is simply a legal fiction which I recall from my studies in law school was defined as existing only in contemplation of the law.
This is very significant in terms of this bill and in terms of the entire area of corporate taxation, because a corporation cannot in fact pay tax. The only people associated with a corporation which can pay tax are the shareholders who must suffer a diminution of their return on investment, or the persons who deal with the corporation, namely, those who buy goods and services from the corporation and to whom the tax inevitably must be passed on. Of course, a corporation is a vehicle for the collection of taxes, as is a trust or a partnership. There is no question about that.
As I pointed out during my comments the other night, the Carter commission fully endorsed that particular concept of taxation. That is why it recommended a full and complete integration of corporate taxation with the taxation of shareholders. In typical fashion we have not gone far enough. We have partial integration. We have a dividend tax credit, but we have never really come to grips with the problem of corporate taxation. We have never recognized sufficiently in our law the economic reality that there is no economic activity in the declaration of a dividend from a corporation to its shareholders.
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That brings me to another point raised by the hon. member for Broadview-Greenwood. I see he is not in his seat; he has joined the ranks of the members across the way. That is complete conversion in short order. Perhaps I need not raise these points with him. In any event he made a practice of attacking the banks. In his comments last night he refrained from drawing his recent analogy of the banks and workers. In fact, according to his allegation, the banks paid a lesser rate of tax than the average worker in the country.
Perhaps the collecting mechanism is not appropriate. Perhaps there are areas which should be adjusted in terms of how taxes are collected, but let us bear in mind whom we are taxing when we are taxing banks. We are taxing the shareholders of banks. If one were to look at the shareholder list of any major bank, one would find a very substantial representation of pension funds and pension trusts of syndicates and of other people, the workers in the country and even people in the constituency of the hon. member for Broadview-Greenwood. It is completely unfair, and in fact misleading, to look at a bank and say that the bank is paying only 10.7 per cent. The bank is paying nothing in either case. It is the shareholders who are paying. That is the central theme of my comments this afternoon.
Also the hon. member attacked the question of preferred share financing which would include income debenture financing. This legislation is designed to change or basically terminate in many respects that kind of financing. The history of that financing is not all black. The hon. member said that many large corporations have benefited from this financing. The corporation did not benefit from that financing. The shareholders of that corporation benefited and the employees of that corporation benefited, as well as the people who bought goods and services from the corporation. I dare say that a large number of businesses might not even exist in the form they do today had it not been for the availability of that financing. It is the problem of trying to personify the corporation as if it were a person, which it is not.
Pursuing this question somewhat further, I should like to point out that the corporation tax system in the country has had the effect of destroying, or at least not creating or sustaining, tax neutrality. The members on my left and those across the floor can sit here and debate whether rates are appropriate, whether one group or class of people should be paying more or less tax. I am quite prepared to enter into that kind of debate. But what I am concerned about is that which is part of our law today, that which has been institutionalized for many years. I am referring to the fact that the very existence of corporations and their treatment as taxpayers has meant that people in the same financial circumstances are not paying the same amount of taxes.
I am disappointed with the Minister of Finance (Mr. Cros-bie). Perhaps he will attack this problem in his November budget; we have not seen it yet. But he has not addressed himself to this problem in an attempt to iron out some of the fundamental inequities which exist.

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I do not see how anyone could argue my position that it is the shareholders who effectively bear the tax, not corporations. Carrying that analogy further, I should like to look at the situation of a professional group of lawyers, for example, in the province of Alberta where I understand they can incorporate and benefit from the small business deduction. That would reduce their effective rate of tax on the first $150,000 to 25 per cent, or perhaps 33 per cent under this bill. I am not sure technically how it would apply to that situation. But a similar group of lawyers in my constituency in the province of Quebec are subject to marginal rates of 70 per cent.
How can that discrimination be justified? It exists not because of the federal tax law per se, but because of the fact that the federal law and its application is dependent in large measure upon the provisions which exist under a wide range of provincial statutes. Some may permit incorporation, some may not. The Department of National Revenue has been very firm in its position that if a province does not permit the incorporation of a particular kind of business, obviously it will not be entitled to enjoy corporate status for tax purposes, and hence full individual personal rates will apply. I do not want to say which rate should apply, whether it should be 25 per cent or 40 per cent. That is not the object of my intervention this afternoon. My point is that the entire area of corporate tax law must be rationalized in some sensible manner. We must look to full integration of corporate and individual taxes. It is long overdue.
The amendment to Bill C-37 of the last session of Parliament brought down by the minister is another band-aid. It is another plaster strip on this act. It has created a third class of corporation. Now we will have a group of corporations paying 33V5 per cent. This was in order to pacify those many doctors, lawyers, accountants and other persons who were very concerned about their so-called loophole being removed, as was indicated by the hon. member for Broadview-Greenwood. Now we have another scheme or device which creates more complication in our statutes. It does not address itself to the fundamental problem of trying to rationalize the entire area of corporate taxation. I am disappointed in the bill from that point of view.
I hope in the very near future, in November or shortly thereafter, the minister will bring down amendments to the Income Tax Act designed to attack this basic inequity. There are a host of others, but I can think of none more clear or more apparent than where a profession can incorporate in one jurisdiction and not in another; hence the profession pays a completely different rate of tax, a very substantial one, between two jurisdictions, both of which are in Canada.


Bob Rae: Pity the poor doctor.


Donald James Johnston: I heard what the hon. member said. He said that we should pity the poor doctor. He has already taken on the banks, and now he is attacking doctors. In a few minutes he will be after the lawyers, but I understand the hon. member is a lawyer himself.


Mr. Reid (Kenora-Rainy River):: Obviously he picks his target.


Donald James Johnston: In any event, Mr. Speaker, there are people in this country, if I must address myself to tax rates, who justifiably feel they should not be paying 70 per cent of their income at a certain level in taxes to provincial and federal governments. I for one happen to be very sympathetic toward those people. I do not think they should be paying 70 per cent to provincial and federal governments. I have suggested in the past, and I will continue to suggest in this House, that this government opposite should take it upon itself to revise those rates, if we are going to discuss rates, so that nobody pays more than 50 per cent of their earned income, combined provincially and federally, in personal income tax.
The United States has taken initiatives in this regard, as you may know, Mr. Speaker. The result has been, I am advised, that tax shelters, the kind of deals that so many people like to indulge in, both in the United States and in Canada, and the incentive to engage in those kind of transactions is removed. The result, if one were to do a study on it, which has not been the case in this country, would be that the over-all net revenues of government would probably increase. That would be true if no one paid more than 50 cents on the dollar in personal income taxes in Canada.
Since the hon. member for Broadview-Greenwood has raised this question in respect of doctors, I would suggest that one would see no necessity for these service corporations and a host of other vehicles, be they MURBs, be they films, be they oil wells or be they other things, about which basically I have some reservation in terms of being used to stimulate development in this country. Certainly that has been the case in the United States. I think we would find that more people would step up and pay their taxes without hesitation and without indulging in avoidance schemes, and this would probably also reduce the number of tax evasions which we are advised and read are on the increase in this country. This is the situation simply because people feel they are being ripped off at every level of government.
The blame is not to be laid simply in respect of federal income taxes. We have provincial income taxes and in addition we have municipal taxes. I can assure the hon. member for Broadview-Greenwood that no one is more sensitive to the inequities of the onerous tax system to which we are subjected than residents of my riding, Saint-Henri-Westmount, and other ridings in the province of Quebec.
I would simply terminate these remarks by saying to the Minister of Finance, who 1 see is still in the House, let us not indulge in these band-aid schemes. We have enough band-aids in the Income Tax Act. It has become enough of a patchwork quilt. The tax reform exercise is dotted with thousands of amendments. If I were to add them up, I think they would come to something like 2,000 since 1971. We have adjusted, we have tinkered and we have played with the system, but we have not sat down and rationalized the entire area of corporate


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taxation in the particular way in which it should be rationalized. We have not dealt with this issue basically. We have suffered from the inequities of a system which does not support tax neutrality the way it should, that principle being that taxpayers in the same circumstances should pay the same amount of tax.
We hear from the department that this is just too complicated; that it is necessary to have these kind of devices; that it is necessary to have this and it is necessary to have that. This reminds me of a statement by William Pitt back in the 18th century, when he said: "Necessity is the plea for every infringement of human freedom. It is the argument of tyrants; it is the creed of slaves". Those words ring so true when 1 look at the inequities that exist in the tax system of this country in the name of necessity.


John Mercer Reid: Would the hon. member permit a question?


The Acting Speaker (Mr. Scott, Victoria-Haliburton):: Will the hon. member for Saint-Henri-Westmount (Mr. Johnston) accept a question at this time?


Donald James Johnston: Yes, certainly.


John Mercer Reid: Mr. Speaker, I direct my question to the hon. member in view of his definition as to who pays corporate income taxes. He put the argument that it was the shareholder who paid the income tax. Later on in discussing other activities of corporations he indicated that the customers of the services provided by the corporation also paid a share of that income tax because they are the persons who provide the revenue by purchasing the services of that corporation. Would the hon. member not say that a corporation can be looked upon as a mechanism for flowing through funds to a variety of purposes, to the shareholders, to the tax collector, to the employees, etc., but that the burden for paying income tax falls upon all the people who seek sustenance from the corporation and not just the shareholders?


Donald James Johnston: Let me answer that question. I thought I had made that point. The hon. member is quite right, the shareholders pay the tax and the persons who receive goods and services from the corporation pay it. If a tax is levied on a corporation, even if it is 98 per cent, and the return on the investment of the shareholder does not decline, then it is clear that the only people paying at that point are basically the people who receive the goods and services from the corporation. That is another reason why some of these unduly onerous rates of tax have created what is called "tax-push inflation". No matter how much you apply these taxes to one vehicle, as long as that vehicle is capable of passing them on-perhaps I should not use the term "vehicle" as I am starting to personify the corporation. The fact is those taxes are passed on, and that can result in tax-push inflation just as increased wage demands can result in increased inflation.


Mr. Orlikow:: Mr. Speaker, might I ask the hon. member a question?
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The Acting Speaker (Mr. Scott, Victoria-Haliburton):: Will the hon. member for Saint-Henri-Westmount (Mr. Johnston) accept another question?


Donald James Johnston: Yes.


David Orlikow: Mr. Speaker, the hon. member seemed to be arguing against corporation taxes altogether. Corporation taxes are fundamental. I should like to ask the hon. member how he can justify, as it seems to me he tried to do, the 10 per cent rate which banks pay in the form of corporation taxes, or a similar rate for the resource industries, the mines and oil companies, when labour-intensive industries such as manufacturing are in fact paying taxes at the rate of about 40 per cent?


Donald James Johnston: The point I made during my remarks was that a corporation is a vehicle for the collection of taxes. I am not suggesting it be eliminated as a vehicle for the collection of taxes, but a corporation itself is a legal fiction. It does not pay any tax, it does not consume any goods or services. Who is bearing that tax, if you like? As I said, when you put a tax on a dog you can rest assured that the dog is not paying the tax, but rather the owner of the dog. Hence here, in this instance, when we are talking about corporations it is the shareholders of the corporation who pay the tax. The hon. member is saying that initially the revenues of a corporation are being collected from the corporation at a rate of 10.7 per cent, so if anything, the most he can be saying is that there is an undue deferment of the tax that somebody is going to pay on the profits of that corporation.


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, I am very pleased to have the opportunity of making a few brief remarks on the present bill before the House today. I should like first of all to deal with two small aspects of the legislation that relate to the fairness of this tax system and the amendments being proposed, and as well to take a look at some of the aspects of taxation as a tool to shape and strengthen the Canadian economy.
Let me suggest at the outset that the present bill is in no way fair. In the second instance, it does not present any coherent plan to strengthen the Canadian economy.
There are some aspects of the bill that can be supported. We might quibble with the mechanisms that are used, but certainly the expansion of research and development is a very desirable goal within the Canadian economy, as is the development of pollution controls. We have had many days of discussion about the acid rain problem in this country, and it is imperative that we begin to take action on it.
The other thing that will be of particular assistance in rural ridings like mine is the employee expense deduction. There are a few aspects of this bill that can be supported and that will provide constructive help to Canadians, but by and large this is an ad hoc approach to solving a lot of the problems in this country. In some cases the amendments are counterproductive; they are not fair and they do not represent a constructive way

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of dealing with many of the economic problems that face our nation.
On the subject of fairness, the first thing I should like to examine is the business of shifting the tax burden from corporate taxation to personal taxation. I noticed with interest the remarks of the previous speaker on this fiction, but nevertheless the business of a corporation exists. They earn income and in some cases, as with foreign corporations, they export a tremendous amount of income from this country. What has occurred over the years is a rising burden of tax on low and middle income taxpayers. This is to the benefit of many of the corporations in this country.
The bulk of this legislation and its amendments is concerned with providing tax savings for corporations in the hope that they will achieve in some way the goals desired by most Canadians. This is extremely unfair. Taxation has to be seen to be fair; otherwise the credibility of the government will be eroded.
I think the Conservative party realized that prior to the last general election when they suggested that they would be prepared to introduce a $2.2 billion personal tax cut. That particular suggestion would have made for a much fairer tax system in the sense that it would have reduced the burden of tax on personal income and started to bring it in line with lightened load on corporate taxpayers.
As we examine this bill, Mr. Speaker, we see a number of provisions designed specifically to relieve the burden of taxation on corporations. These tax savings for corporations will mean higher rates of tax on personal incomes. The first of these, the investment tax credit, will probably not create jobs in this country, and I think this has been mentioned before in this House. We are probably going to see investments made on the basis of long-term profitability and market conditions. The prospect of having an investment tax credit in a very indefinite form means that it will probably wind up as a side benefit to the original decisions on investment.
There is an aspect of this business of investment tax credits and, generally, tax savings that accrue through investment that affects people in my riding and many others along the coast of British Columbia, as well as other areas of the country. This is the situation where a corporation can realize a tax saving by making an investment, usually in technological improvements which result in unemployment. There are examples on the B.C. coast of three major corporations-not small businesses that are usually the single industry in a community where, through technological improvements paid for by tax savings, in the neighbourhood of 750 or 1,000 jobs will be removed. This is the long-term projection. So we have paid with our tax dollars for investments that created unemployment. Not only that, but they remove disposable income from small communities and, indeed, destabilize a very delicate local community economy, which in turn has had some drastic impacts on small business.
Another proposal for tax savings is the blanket approach to providing tax credits for research and development. Certainly
[Mr. Skelly.)
this is a desirable goal within the context of the Canadian economy where research and development is being rationalized by taking it out of the country-a sort of goal of trans-national corporations to centralize research and development.
I suggest to the Minister of Finance (Mr. Crosbie) that perhaps we should begin to consider research and development in terms of providing specific directions within this country. It would be desirable to see an industrial strategy and national economic goals defined for Canada to improve research and development, government joint ventures and other instruments and to encourage this in specific areas that meet our national needs. I am thinking here of things like energy conservation. This is a very critical area and one that we should be moving into.
Another area is the development of transportation. So much of the development of industry and small business in this country depends on effective transportation. Because of the nature of this country we should be leaders in this field.
One aspect of transportation that the government has embraced is marine shipping. There will be a proposal, we hope, for the creation of a deep sea fleet. We have put forward the suggestion that Canadian resources in the Arctic should be transported by Canadian shipping. There is a proposal for the acquisition of naval ships and icebreakers. It is to be hoped that these initiatives can be undertaken in Canadian shipyards. Tremendous amounts of research and development in these areas will be needed if we are to remain competitive with the rest of the world.
I suggest, Mr. Speaker, that if we are to provide tax credits for research and development, these should meet our national goals through a very clearly stated industrial strategy. Such a strategy has not appeared as yet.
The hon. member for Winnipeg-Birds Hill (Mr. Blaikie) spoke about pollution control equipment. This is a very serious matter in my riding as it is in many others. Unfortunately, as far as taxes are concerned, there is only another blanket proposal respecting pollution control equipment.
I am joined by others in asking why corporations which are earning large incomes, especially foreign corporations, are allowed to deduct the cost of pollution control as a cost of doing business. Why is that being paid for out of the public purse? We should be providing tax benefits to those corporations that must be improved and that have a base of necessity in local communities, but we should also look carefully at the substantial tax savings available to profitable corporations. We should demand a reduction in the cost to the public purse and see to it that those corporations share or shoulder the cost of pollution control.
We have spent some time examining the question of fairness in terms of the distribution of taxation between corporations and personal income. Over the years we have seen a shift in that distribution. We have heard a great deal in this House about how oil companies today are receiving windfall profits, how they are manipulating prices to their benefit and how they are seeking tax savings outside this country. We have heard
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about the earnings of banks. They have literally a licence to shovel money due to increasing interest rates. Then there are the major foreign corporations that earn profits within this country and export the funds. Some of the incomes are earned as a result of tax savings. Before the election the government put forward the idea that it is very desirable, within the Canadian context, to begin to shift the burden of tax back to the corporate taxpayers and to relieve the burden on individuals.
The second aspect of fairness deals with a problem that was also brought up last week. Statistics Canada suggested-and this is fairly clear from the evidence that has been gathered and supported over the years-that the gap in income between the top income earners in this country and the bottom income earners is growing. In fact the rich are getting richer and the poor are getting poorer. That is undeniable.
One of the things creating that situation is our tax system. The mechanisms proposed in this bill to attack certain problems are further widening the gap. About 20 years ago the Carter commission enunciated a number of proposals to form the foundation of a fair tax system. The first proposal was "a buck is a buck" and it ought to be taxed. The second proposal was that the income tax system should be progressive.
In the legislation submitted for consideration today and during this week, there are principles opposed to those two ideas. The benefits of tax avoidance such as registered retirement savings plans, incorporation of professional practices and reorganizing the timing of business costs for tax purposes accrue principally to upper income Canadians. Most middle and lower income Canadians do not have enough disposable income to take advantage of the tax savings within those systems, so relief and benefit is provided for the top groups. The principle has been reversed to the point that the income tax system is becoming regressive. Not only do we extract a very high level of tax from middle and low income earners in Canada, but also the business of direct regressive taxation through land tax, through sales and excise taxes and such things, cannot be passed on as a business expense or through tax avoidance. Low and middle income Canadians have to take up these burdens as well. Thus we are placing a very heavy burden of taxation squarely on low and middle income Canadians. The desirable goal would be to move and shift it more fairly on the income range to re-establish the progressive nature of the tax.
For a few moments 1 would like to examine the tax system within the context of a tool to strengthen and shape our national economy and develop an industrial strategy. Unfortunately, our tax system has fostered tax savings which have allowed companies to come here, develop our resources and export those resources for processing in other countries. The maximum advantage from that tax saving has been obtained by those countries and earnings within this country have also flowed out.
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The major problems in terms of shaping the economy in this country which were defined before the election were unemployment and the lack of an industrial strategy, which saw Canada more heavily dependent upon the development of natural resources and export for processing outside the country. This led to other problems such as the devaluation of the dollar and rising inflation.
The present income tax amendments that we are being asked to consider do not in any way look seriously at using that tax system as a tool to shape and strengthen our economy. We are clearly too heavily dependent on taxation. We have given up other financial instruments in favour of taxation in an effort to control our economy. Taxation appears to be too imprecise in achieving our goals and too cumbersome and imperfect a system to realize them. It weighs very heavily upon middle and low income tax groups.
What we need is co-ordination of economic policy. We need a policy which sees a fair redistribution of the burden of taxation among all sectors of the economy and a restatement or a bringing forward of progressiveness in the tax system. I would suggest that many of the programs which have been developed in this House are unco-ordinated. We see tax proposals that we hope will create jobs and give some direction to investment in this country to strengthen the economy, remove the weakness of the dollar and control inflation. Yet we put one tax program in place and then allow interest rates to rise to the point where investment is discouraged.
Over the last few weeks I have had a number of phone calls from businessmen in my riding. These people would like to take advantage of the proposals which the government has put forward in tax savings, but they have had to forgo making investments because interest rates have put financing beyond their reach. A fellow phoned, most concerned, and mentioned that his project which would have hired 60 people could not now be put forward because of the cost of financing. What we find is that in attempting to achieve one benefit through the tax system, we are destroying it by other manoeuvres in the economy.
I suggest that when that tax bill is put forward-or other manoeuvres in this House-it should be put forward within a context of a very clear industrial strategy in this country, and with it a sense of direction of where we are going. That is something we lost with the previous government. I believe that is what this government was elected to do-to give us a sense of direction and put forward co-ordinated policies that will tell us where we are going.
To summarize, I suggest three things. First, that this bill be examined in terms of fairness. Is a fair burden being placed on the lower and middle income taxpayers by providing tax savings for the corporate sector without a clear statement of what those tax savings are designed to achieve? Second, a complete reduction in the tax system aimed at other fiscal instruments, such as the Bank Act, controlling energy and various other things within the country. Third, we need from the government a clear statement of where we are going in

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terms of shaping and strengthening the economy for the next generation.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I cannot let this bill go without saying a few words.


An hon. Member:: Or any other bill.


An hon. Member:: Say it again, you will say the same thing.


Lorne Edmund Nystrom: Perhaps I can say it a few more times at the committee stage, Mr. Speaker.
What we are doing today is debating some old Liberal leftovers which the Minister of Finance (Mr. Crosbie) is dragging up before the House. These are part of the leftovers he wants the House to swallow. 1 do not think we should be swallowing some of these leftovers quite as quickly as the Minister of Finance wants us to do. A debate on income tax measures gives us a chance to ask the question: What kind of a country do we really want and in which direction do we want to go?
Earlier in the House today we received a sermon from the member for Winnipeg-Assiniboine-1 believe that was the members' riding-


Mr. Knowles:: It was Winnipeg-Fort Garry.


Lorne Edmund Nystrom: The hon. member for Winnipeg-Fort Garry (Mr. Axworthy). I am sorry, 1 get them mixed up. They are sometimes similar in their political ideology. As the hon. member for Winnipeg North Centre (Mr. Knowles) says, there is not too much difference. Anyway, he was complaining there was a bit too much ideology in the House coming from this side. One of the complaints I have had as an MP since coming here in 1968 is that we have not had enough ideology, we have not had enough sense of direction or enough leadership in this country. I think this country is looking for some courageous leadership.
The Prime Minister (Mr. Clark) has been talking about making some tough decisions. About the only thing that 1 have seen that is tough coming from the government so far is that Tory times are tough times for ordinary, little people. We do not need that kind of direction, Mr. Speaker. 1 would like to see the government redistribute income and wealth in this country so that the ordinary citizen-the ordinary Joe, and no pun intended-will get a greater share of the national wealth and pie.
It is about time we did that, yet the bill before us is confirming a lot of the old Liberal diet which was fed to the oil companies. A couple of minor changes were made to give high income people a bigger tax break. 1 ask when will this government live up to its promise of giving a major tax break to ordinary citizens? I can look at a speech made by the Prime Minister when he was leader of the opposition during the throne speech debate a year ago and was proposing a major tax cut for low income Canadians. He campaigned on that during the election. In my riding I recall my opponents saying that the ordinary people of this country deserve a tax break,

and that if the Conservative party was elected it would give them a tax break. Is this government doing another Jerusalem on the tax break for the ordinary citizen? Is it doing another Jerusalem on that tax break just as it has done so many Jerusalems already and turned so many flip-flops in policy?
When these people were in opposition they used to scream, bitch and holler in this House that the government was not respecting the rights of Parliament. Yet across the way we had a government in power for five months before Parliament was recalled. Across the way we have a government that has such a lack of respect for Parliament that one of its most powerful cabinet ministers is sitting in the other place, a man defeated by the voters of Ottawa Centre and who was rewarded by being given a senior cabinet portfolio to sit in the other place.
Is this the respect the Conservative policy has propounded? Is this the message we get from the Conservative party? Can we trust that party across the way? I ask these questions because I think this country needs new leadership. This country is crying out for new leadership, as are many parts of the world. There is a real vacuum in the society in which we live. It is not just ironic that the programs watched today by children are "Superman", "Batman", the "Bionic Woman" and the "Six Million Dollar Man". People strive to attach themselves to something "super", something to take away their problems.
The Canadian people have a new government that has promised many things. We do not ask the Prime Minister to be a superman. All we ask is for him to live up to his promises. One of those promises was a major tax cut for the ordinary Canadian citizen. When can we expect that tax cut, or is the Minister of Finance going to have another Jerusalem? Is he changing his mind? I see the Minister of Finance smiling with his big Cheshire cat smile. Perhaps he will reveal something when he gets to his feet in a few minutes' time.


John Carnell Crosbie: Right on.


Lorne Edmund Nystrom: When discussing the tax system, it is important to realize that it can be used to make a fair and equitable society. As I said before, we are criticized by the hon. member for Winnipeg-Fort Garry for being ideological, theoretical or perhaps too dogmatic in our arguments. However, this is a democratic socialist party that believes we have to share the wealth and resources of this country.
We need more equity in this country so that every person, regardless of his background or economic status, is a more equal recipient of the fruits that Canada has to bear. One way of achieving this is to get rid of many of the loopholes and to implement many of the recommendations in the Carter commission report of many years ago, long before a lot of us were in the House of Commons. I refer to write-offs for large companies, write-offs for the business community, entertainment expenses, fringe benefits and privileges given to the wealthy of this country, and deferred taxes for large corporations and companies.
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When is this new government going to end some of these privileges? They are not rights but privileges. When will these be ended and the money redistributed so the ordinary Canadian citizen can get a real tax break? By the time the high interest rate policy or, as the hon. member for Broadview (Mr. Rae) called it, the tight money policy, gets finished with the economy, those few middle income Canadians who can now afford to buy a home will not be able to do so. The few ordinary income Canadians who are living quite easily will not live so easily with the economic constraints being imposed by this government, be it high interest rates, world energy prices or any of what the Conservative party is introducing to this country.
As 1 said, Tory times are tough times. We should not forget that. I remember my grandfather talking about the days of R. B. Bennett and the old Bennett buggy on the prairies. That was not "Grandfather Knowles" but a different grandfather.


Stanley Howard Knowles: I remember those days very well. That's why I'm here.


Lorne Edmund Nystrom: When a person could not afford to drive his car, he would take out the motor and hitch the car to a horse. Those were the tough days of the Tory party. The Tory times were tough times. We are getting a bit of that now at the end of the seventies and it will continue into the eighties.
I ask the Minister of Finance not to forget the commitment of the Conservative party to give a significant tax break to ordinary and low income people in this country. 1 ask him to use the taxation system as a tool, a method to redistribute income and wealth in this country so that the ordinary people can harvest a much greater proportion of the national economic pie.


Maurice James Harquail: Mr. Speaker, while we do have an opportunity to pose questions in the question period and there are means of parliamentary procedure in this House, this is my first opportunity to speak on this particular bill. I am going to touch on a few points with respect to this bill of the Minister of Finance (Mr. Crosbie) to borrow $7 billion.


John Carnell Crosbie: No, no, that's past. This is a different debate. This is the income tax bill.


Maurice James Harquail: Income tax. I guess what 1 wanted to comment on on the other bill was the attitude and performance of the minister when he introduced that bill.


John Carnell Crosbie: That is old stuff. I am changed now!


Maurice James Harquail: Are you changed? Is that a change of shirt you are wearing? Is that the new look?


John Carnell Crosbie: Yes, this is the new me.


Maurice James Harquail: Is that the new look for the minister? He has the Bay Street look with his Bay Street shirt. He has been swallowed up by the wolves of Bay Street. The minister has shed his old skin and the positions he took when he sat on this
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side of the House. He has also shed the positions he held when he was minister of finance under the hon. Mr. Smallwood of Newfoundland.
It is always a very interesting exercise to look at the history of Parliament and what has been stated previously by members in this House. In this case I am speaking particularly of the Minister of Finance and some of the things he said when dealing with the linerboard problem in his province and the millions of dollars that went down the drain as a result of that project. An article was written not too long ago by former premier Smallwood about the mishandling of that project and the role played by this minister. Now he sits here acting as though he has all the magical answers. He comes in here and says he wants to borrow $7 billion.


Mr. Taylor (Bow River):: On a point of order, Mr. Speaker. The hon. member is speaking to the wrong debate. He is one week behind in his debate, as usual.


Maurice James Harquail: Mr. Speaker, I want to put on the record this afternoon the denial by the Progressive Conservative Party of my motion the other day with regard to income tax. I asked them if they had any charity left in their hearts. I think of the other member from St. John's, the Minister of Fisheries and Oceans (Mr. McGrath), who stood on this side and begged, pleaded with and berated the government of the day. He talked about the insensitivity of the government and their lack of compassion and concern for the people of Atlantic Canada.
During this afternoon's question period the Minister of Finance said Treasury Board will not give them the money needed with regard to small craft harbours. All of a sudden there is a complete about face with regard to their concern for the citizens of Atlantic Canada. Now that they are in a position of responsibility and have the power and the ability to make changes, they do not make changes. Why not? What are they waiting for?


Mr. Elzinga:: Speak to the bill.


Maurice James Harquail: I come back to the income tax proposal with regard to galloping inflation, the high cost of living and no control over food prices, with no relief to the consumer in the supermarkets of this country. I am speaking specifically of people on fixed incomes. In my motion under Standing Order 43 the other day, I asked the government to give some consideration to these people on fixed incomes who are hit the hardest. They have no relief, they have no way of overcoming the dire straits they are left in by this government with the fooling about we have witnessed with respect to the price of oil-they won't come clean and tell the people what they are doing. The minister of energy says he is waiting to see what is going to happen with the Premier of Alberta. Now we know why the Premier of Alberta is called the blue-eyed Arab; he says he will dictate to Canadians what we will have to suffer in the months to come. He will not communicate with the Prime Minister (Mr. Clark).

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We are told by the Minister of Energy, Mines and Resources (Mr. Hnatyshyn) that he is waiting to meet with the Premier of Ontario. When will these Conservatives get together? They said it was all going to be rosy once they got into power, that they would all be able to have friendly discussions and friendly negotiations and that we would all be able to see progress. Where is it?
I come back to these innocent Canadians who are caught in the bind of being left to cope with fixed incomes and galloping inflation. This insensitive government will not even give consideration to requests that persons who are over the age of 65 should not be called upon to pay income tax if their income is below a certain fixed amount-the suggestion was $15,000 a year. If you like, maybe we would reduce it to $ 12,000, $ 1,000 a month for persons at the age of 65 with no other income, no other means of support, who are living at what would be considered today, with the cost of rent, food and fuel being so high, to be at the poverty level or below. The government could at least address itself to the needs of people in this sector and give them some consideration.
The minister became excited when 1 referred to how proud he was of introducing his bill to borrow $7 billion. When I referred to that a moment ago, his attitude was: No, no, don't talk about that, we want to sweep that under the rug. You know, Mr. Speaker, they used to be concerned when one talked about millions, and now $7 billion means nothing at all to this minister. He says: "Just give us the power, give us the borrowing authority, but don't question it, though. We are going to be an open government, but don't ask us what we are doing while we are doing it, just let us go". Not at all, Mr. Speaker. I do not think the opposition parties are going to allow members over there to get away with it. They are the same people who sat here previously making wonderful suggestions as to how they were going to solve all the economic ills of the country. Well, they have had five or six months and we have not seen much by way of action.
I certainly wanted to take the opportunity on this income tax bill to register my remarks about the performance of the minister the other day. When he presented his bill he used the word "outrageous". I would say his performance was outrageous. I found it totally unacceptable. The tone and the attitude of some of the things he had to say at random on such a serious matter as borrowing $7 billion was such that the word I would use would be the word he used the other day, that is to say, outrageous. It was an outrageous performance for any minister of finance. Everyone in this House wants to have respect for a minister of finance and I would want to continue in that tradition, but when we see his hilarious attitude almost bordering on being a joke, I think we cannot let this type of thing pass without underlining it and making a comment about it.
If the minister wants to be gracious enough to take these remarks in the way they are intended, we may see an improvement in his attitude in introducing bills in the future. I would implore him in the coming weeks and months when he is with his cabinet colleagues, specifically the President of the Treasury Board (Mr. Stevens) and the Minister of National Health and Welfare (Mr. Crombie), to take a hard look at taking some action to find ways and means to alleviate the heavy burden on persons in this country who are retired, senior citizens on fixed incomes, who desperately need assistance at this time.


Andrew Hogan: Mr. Speaker, I think it is obvious that as an economy grows it becomes more possible to redistribute income. When an economy within a capitalistic framework or a mixed economy framework or what is called a "command economy" fails to grow, acute problems are developed in redistributing the wealth or income of that nation. So the small "c" and the capital "C" Conservatives in this country are trying to tell us now that before we can get proper redistribution of income the economy must grow. They are thinking largely in terms of the 1960 type of growth; that is, growth of the gross national product, an index which, in our terms and value judgment, is often as much "gross" as it is national product. But in economic terms, although it is a weak form of estimate it is one of the best we have.
One of the great difficulties with a mixed enterprise system controlled by the invisible government of the large multinationals, as we saw once again during the question period today when the Prime Minister (Mr. Clark) did so much to defend his friends and the old friends of the Tories and of the Liberals, especially the oil companies-


An hon. Member:: Same old story!


Andrew Hogan: It is interesting to note that under the guidance of the hon. member for Windsor West (Mr. Gray), after meeting out in Winnipeg the Liberals decided to reform and go back to what they called their reformed status before the last five, six or seven years when they were copying everything from the NDP. So they have this little man from Windsor West to be the David attacking the Conservative Goliath under the guise not only of the NDP philosophy but of the programs and suggestions my party has put forward down through the years, and in the four years just gone by when that government failed to adopt so much of what we were suggesting. Why? Because they could not get the economy going.


John Carnell Crosbie: Shame!


Andrew Hogan: We now have a government of so-called Progressive Conservatives who, as my leader has said, are progressive before an election when they are promising tax cuts and so on but become very, very conservative after the election. They are, in fact, regressive conservatives under the leadership of the present Prime Minister and Minister of Finance (Mr. Crosbie), who as everyone in the House knows is an honourable gentleman, one to one. But they are absorbed
[Mr. Harquail.1
October 30, 1979

with the idea that they must bring us back to the time equivalent of the thirties.
Mr. Speaker, if it were not for all the things the NDP and the social democracies of the western world have built up in the meantime, God help us now. Even they have to admit that what is keeping the whole system from collapsing now is what has been built up by the party in this corner. Where now are those voices which were raised from Liberal and Tory benches against the children's allowance legislation, calling it a bonus for procreation? Where are those who denounced unemployment insurance on the grounds that it would make us a nation of weaklings and lazy people? This is now re-emphasized by the right-wing Tories who have gotten a grip over the half dozen or so so-called red-necked Tories from the maritimes. They seem to have caved in before the onslaught of the Alberta Tories and some of the other extreme right-wing, doctrinaire free-enterprisers such as the President of the Treasury Board (Mr. Stevens).
Look at the contradiction. The Minister of Finance defends restraint and says that everybody has to suffer, and so does the Prime Minister. The Minister of Finance protects and favours the wealthy so that self-employed individuals and professionals can have their own corporations and pay a much lower rate of taxation. Using Liberal tactics, this same government comes along and gives the Atlantic region the investment tax credits which are explicit in this bill, knowing darned well that to the small business community of the Atlantic region this means nothing, given the increases in interest rates which have been adopted since the Conservatives were elected.
Mr. Speaker, those increases in interest rates wipe out all advantages. There will be little or no gain. What gain there might be will be marginal as far as development in the Atlantic region is concerned and as far as the manufacturing sector is concerned. We have a situation where the government is protecting high-income professionals as well as the multinational corporations 1 mentioned, which are the invisible government. Let us face it, oil companies in the United States and here, as well as banks, form a link. It is not a conspiracy but there is a definite link between the other place and the large institutions which govern our way of life. Anyone who attacks that type of incestuous relationship, for want of a better term, which has grown and which has been nurtured in this country is considered extreme. If that is so, I am happy to be called an extremist because it is time these powerful institutions were whittled down to size and put in their proper place. We have amendments to this tax bill which is presently in favour of the "well to do."
Getting back to small business and the fisheries sector, it is especially sad to see the Minister of Fisheries and Oceans bow his head and say the government had to slash $10 million from the small crafts and harbours program in order to carry out its restraint program. Where to a large extent is the slashing taking place? It is taking place in Newfoundland, Nova Scotia and the other maritime provinces.
Income Tax Act


John Carnell Crosbie: Not Newfoundland.


Andrew Hogan: One and a half million dollars was slashed in Newfoundland. That is a very substantial amount for inshore fisheries. In my constituency the former government and an entrepreneur, using vehicles which had been established, succeeded in building three boats at $1 million each. Under an agreement with the fisheries minister there was to be dredging of the Glace Bay harbour this year. We expected changes but within five months they cut moneys allotted for the dredging of that harbor. The government did not consider how a cut would affect small businessmen and processing plants there.
The result was that the boats, which cost $3 million on a shared basis and which could have created jobs in the inshore fishery and in processing, cannot even get into the harbour. There are no funds for dredging harbours, but this government is now prepared to give special tax concessions to professional self-employed people. It will not look after the inshore fishermen of the Atlantic region. There is contradiction and inequity.
Surely to God there must be a majority of hon. members opposite who feel conscience-stricken about this type of thing. We could not get the former government to move in a significant way on a better redistribution of income, but how can the minister not bring forward any changes today after the release just recently by Statistics Canada showing that the number of poor, those spending 62 per cent of their earnings on food, clothing and shelter, has grown? That number has grown substantially.
I would like to quote from a study undertaken by Statistics Canada and released just three weeks ago:
In 1978, the poorest fifth of the population, those families and unattached individuals getting less than $6,288 for the year, received 3.9 per cent of pre-tax income in the economy, up a little from 3.8 per cent in 1977, but well below the 4.2 per cent it received 11 years ago.
The wealthiest 20 per cent, those with annual incomes in excess of $26,792, received 42.5 per cent of pre-tax income last year, up from 42 per cent in both 1977 and 1967.
The Carter Royal Commission on Taxation recommended that the top personal income tax rate be reduced from 90 per cent, including provincial taxes, to 50 per cent so that "economic doers" and "risk-takers" would have an incentive to earn more money. The tax rate was lowered, but some of these "economic doers" and "risk-takers" such as accountants, doctors and lawyers, felt that they needed a further break. They sought to be protected under the old Liberal bill, and now, to show that there is no difference essentially between the Liberals and the Tories, the Minister of Finance backs up what the Liberals wanted to do. We know the contributions these professionals make. Many here belong to the legal profession. There are a number of doctors and others here, but this is a time when we are demanding that people lower their expectations. The government is preaching that day in and day out, just as the former prime minister did. Surely to the Lord the people who should make sacrifices are the professionals and not the ordinary people of Canada. Surely the poor who were
766

October 30, 1979
Adjournment Motion
mentioned in the study from which I just quoted should not have to make the sacrifices.
There is essentially no difference between the Liberals and the Tories in this matter. They want to protect large multinational corporations almost exclusively, despite new protests and the so-called reform of the Liberals, which we suspect is not genuine. We saw the Liberals in action here for a long time, and they protected large multinational corporations. The same thing is going on now. Even though the friends of the Prime Minister are in the oil industry, it seems as though he will not be doing enough for them when he dismantles Petro-Canada. Why should he have to give them special protection when the American Congress now has some seven bills before it which are attempting to establish a national oil corporation in the United States? When will there be a government in Canada which says something different?
We now have Tweedle-dee and Tweedle-dum, and there seems to be little difference between them. When they come together collectively, they can always be counted on to protect large corporate interests and certain special interests. As 1 have said before, there has not been a word from this government about people in the Atlantic region and small businesses whom it says it loves so much. By allowing interest rates to rise to the extent they have risen, people in the Atlantic region and in small businesses there are going to suffer greatly. Individual consumers are going to suffer greatly.
Mr. Speaker, may I call it five o'clock?



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Mississauga North (Mr. Jupp)-Airports-Possible development of airport at Pickering-Expansion of Toronto International; the hon. member for Algoma (Mr. Foster)-International trade-Possible move of Canadian embassy from Tel Aviv to Jerusalem-Effect on trade; the hon. member for Laval (Mr. Roy)-Transport-Will government give priority to improvement of service between Montreal and Mirabel.
[ Translation]
Order. It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely public bills, private bills and notices of motions.


PRIVATE MEMBERS' PUBLIC BILLS
[Stage Direction]
[ Translation]
David Kilgour: Mr. Speaker, I think it would be acceptable to proceed with Bill C-217. Bills C-209, C-213 and C-214 have already been printed, but I doubt that we are ready to discuss them today. We could perhaps get the unanimous consent of the House to proceed to the consideration of Bill C-217 and let the other bills stand.


Mr. Deputy Speaker:: Is there unanimous consent that we proceed to the consideration of Bill C-217 and that all other bills preceding it stand?


Some hon. Members:: Agreed.


PUBLIC SERVICE
Mr. Deputy Speaker:: Order, please. Without precluding the consideration of the bill which is before hon. members at this time, may I be permitted to bring to the attention of the House the fact that there is a deficiency, to my mind, in the title of this bill. As hon. members know, the bill received first reading on October 24 together with a group of other bills that have been presented at the opening of this parliamentary session, which did not really give sufficient time for the Chair to see whether the bill has met all the requirements. My concern is that the title of the bill should be phrased in such a way as to cover all the provisions in the bill.
Citation 361 in Beauchesne's fourth edition confirms my contention. It reads:
(1) In framing the title care must be taken to make it wide enough to cover all the provisions of the bill,
May 1 also refer hon. members to Erskine May's nineteenth edition at page 465, which refers to long titles. It states:
The long title sets out in general terms the purposes of the bill, and should cover everything in the bill.
Hon. members will notice that the bill before us is meant to amend two different acts. One is the Canadian Human Rights Act and the second is the Public Service Superannuation Act. To my mind the title given by the hon. member for Grey-Simcoe (Mr. Mitges) to this bill is deficient in that the bill is presented as a new act.
My suggestion to the House is that Bill C-217 be entitled "an act to amend the Canadian Human Rights Act (age of retirement) and to amend the Public Service Superannuation Act". I believe the House should consider giving unanimous consent to this modification of the title, following which hon. members may proceed with the debate of the bill. Is there

October 30, 1979

consent from the mover of the motion and from hon. members for the suggested modification?


Some hon. Members:: Agreed.
Mr. Gus Mitges (Grey-Simcoe) seconded by Mr. Nowlan moved that Bill-C-217, to amend the Canadian Human Rights Act (age of retirement) and to amend the Public Service Superannuation Act, be read the second time and referred to the Standing Committee on Health, Welfare and Social Affairs.


Maurice James Harquail: Mr. Speaker, I rise on a point of order. While no question was put in terms of the necessity for any vote, and you, Mr. Speaker, are satisfied with the phrasing of the title of the bill, are you also satisfied as to there being no conflict in this bill amending two acts?


Mr. Deputy Speaker:: There are many precedents for this. Such bills are often called omnibus bills, and this could be one of them. I believe it would qualify.


Stanley Howard Knowles: It is art which was finely developed by the Liberals.


Constantine George (Gus) Mitges: Mr. Speaker, 1 am indeed happy and grateful to have this opportunity to speak on a subject which 1 have always espoused and supported, not only in the House but in many other places and areas. 1 am referring to voluntary retirement and the right of every worker or individual, as he chooses and if he is physically able to do so, to work beyond the mandatory retirement age set down by the legislation.
I am fully aware of the fact that the issue of mandatory retirement has been discussed previously in the House and that many important points have been brought out. However, I should like to add to the debate by expressing my deep concern over the tremendous waste of human resources resulting from a policy of compulsory retirement, a waste both in terms of the work force and of the Canadian society as a whole.
1 am distressed more particularly by the debilitating effect that mandatory retirement can have upon the individual's physical and mental health. 1 agree wholeheartedly with U.S. Congressman Claude Pepper when he said:
Mandatory retirement is an extravagant waste of people. It severs productive men and women from their livelihoods, lowers their sense of self worth, and squanders their talents.
In the past it has been largely assumed that most people wish to retire at the age of 65, and further, that for reasons of physical and mental health people should retire at that age and perhaps even before they reach the age of 65. The view that people should normally retire at the age of 65 has been so widespread in our society that it has been embodied in various government acts and legislation. For instance, the Public Service Superannuation Act sets the retirement age at 65. Then there is our new Canadian Human Rights Act which prohibits discrimination on the basis of age, except in the case of the individual who is 65 or over. Apparently the Canadian Human Rights Act does not consider compulsory retirement to be a form of discrimination.
Age of Retirement
I realize that in our society with its accent on youth there is a tendency to underestimate the capabilities of people beyond middle life. However, as far as I know there is no sound scientific basis for setting retirement age at 65, or even at 70, because most people at 65 are at the peak of their mental powers. They have more experience, more balanced judgment and generally are more persistent and loyal, more tolerant and patient than their younger co-workers. If they have good health also, they are more likely to have a steady work record.
Considerable evidence has been amassed indicating that older workers are not necessarily the incompetent, deteriorating deadwoods that personnel managers sometimes imply. Two studies referred to by the United States senate committee on human resources made this point. A New York survey conducted in 1974 compared workers over and under the age of 65 with regard to absenteeism, punctuality, on the job accidents and over-all job performance. It concluded that older workers were about equal to, and sometimes noticeably better than, younger workers.
The University of Illinois came to a similar conclusion in its study, which reported that there was no specific age at which employees became unproductive. Also this report expressed the view that satisfactory work performance may continue into the eighth decade. The director of a creativity program in the United States found that fully 80 per cent of the most workable and worth-while new ideas were produced by employees who were over 60. Younger employees had a tendency, as he put it, to reinvent the wheel. There is no question that these studies should cause us to pause and re-examine the discriminatory practices prevalent in the whole area of mandatory retirement. We must begin to judge people on the basis of competency and not on the basis of age.
If we continue to subscribe to the age 65 policy, we will find that an increasingly larger share of our population is being considered-and are considering themselves-as second class citizens; the unproductive old. It seems to me our present focus on age 65 as the age of retirement is based more and more on tradition than on any rational motives.
Let me briefly examine the history of the age 65 policy. The modern history of a mandatory retirement and the use of the figure 65 as the magic number are both traced to Germany's famous chancellor, Otton von Bismarck. Hoping to stave off socialism in his country, the chancellor initiated the social security pension system in 1889 at which time he proclaimed 65 as the appropriate age for retirement.
Bismarck's model has been followed ever since in much of the western world. Over the years it has become ingrained in our society to the point where age 65 is considered the line of demarcation between middle age and old age. Ironically Bismarck himself was 74 years of age when he introduced his pension scheme and was at the height of his spectacular career as iron chancellor. Perhaps Bismarck's choice of 65 was quite appropriate for his time and may even have been stretching things a bit, because in Bismarck's day only a small percentage

October 30, 1979
Age of Retirement
of the population lived to be 65; life expectancy at that time was 37. Our average life expectancy today is over 71, and many more of us make it to the age of 65 in a state of better physical and sound mental health than they did in Bismarck's time. Therefore, we must ask ourselves whether it still makes sense in this day and age automatically to retire a person at 65. Is it fair to do so?
For those members who still have doubts, I would recommend that they take a look around and remind themselves that several of our colleagues in the House are well past the traditional retirement age. Personally I am grateful for the expertise that they continue to offer in our day to day proceedings. However, in this House we are fortunate in that we do not have to face the threat of forced retirement simply because we have reached some arbitrary age limit. It is only right and proper that this privilege be extended to the rest of Canadian society. Ability and not age should be the determining factor in deciding whether a person should continue at his or her job. 1 realize that there are many who look forward to their retirement at 65 or even earlier, but the important point is that there should be a freedom of choice.
Now let us assess some of the supposed benefits of the current retirement policy. One of the arguments pro-mandatory retirement is that the age 65 policy "frees up" scarce positions for unemployed youth. However, it has been found in studies done in the United States that the number of jobs freed by mandatory retirement appears small compared to the physical, psychological and social benefits gained by permitting the older worker who is willing and able to remain in the work force.
Also there is the argument that after 30-odd years of productive labour, society owes its older workers a number of years of blissful retirement. This may be so, but we do have a responsibility as well to those who have no desire to stop work and to the many who are able to work, need to work and want to work.
In our society where so much emphasis is placed on the work ethic, work gives form, dimension and meaning to the life of the average citizen. The American medical association has indicated that there was considerable medical evidence that the sudden cessation of productive work and earning power of an individual caused by compulsory retirement at the chronological age of 65 often led to physical and emotional deterioration and premature death. It was indicated further that few physicians deny a direct relationship exists between forced idleness and poor health, and that chronic complaints develop more frequently when a person is inactive and without basic interests. These disturbing statements alone should compel us to rethink the whole issue of mandatory retirement.
Of course, there are familiar arguments in favour of retaining a compulsory retirement policy in industry and government. One is the contention by large companies that retirement pension plans would be greatly disrupted by eliminating the retirement at age 65 tradition. This suggests to me that actuarial computations are somehow more important than the fulfilment of human lives. I totally reject such a proposition.

Such contentions also overlook the fact that where optional retirement is available and pension plans are adequate, many workers elect to retire before they reach 65. But to postulate from this that all should leave productive employment at a given age is illogical, wasteful and immoral. If as some authorities maintain we are destined to experience a shrinking national economy, then the economy itself must be economical, particularly of talent and experience.
Those are the few remarks I wanted to make. I welcome input from other hon. members. Hopefully my bill will be voted on.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Speaker, I welcome the opportunity to say a few words on the bill introduced by the hon. member for Grey-Simcoe (Mr. Mitges). Naturally I was quite pleased to hear him say that persons over 65 should not be considered as dead wood.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Indeed, I looked around and I saw that I was not the only one smiling. Also I enjoyed his reference to age 65 as being the dividing line between middle age and old age. That dividing line shifts. When one is 20, somebody at 30 is middle aged, but when one gets along a bit that line shifts. That led me to be curious as to how old the hon. member was. I sent for the "Canadian Parliamentary Guide", and I see that he has not got his age in it. So it is not only female members of the House of Commons who try to hide their ages.
Speaking of old age, middle age and so on, I think a remark I heard the other day covers it very well. There are three stages of life; first there is youth, then there is middle age, and then is "My, you are looking well!"
1 want to say in respect of this bill that I have no objection to its basic philosophy, namely, that older persons should have a choice whether to continue working or to retire. But there are some aspects of this campaign that concern me. Indeed, I am far more concerned about the freedom to retire early than 1 am about the freedom to keep on working. I will go along with the hon. member that persons should not be forced to retire at age 65 if there are contributions they can make, and I support the element of freedom that is included in that proposition. But I represent a constituency in which thousands of people work in heavy industry. They work in the railway shops, the packing plants and the steel mills, and the plea I get from them time after time when I meet them at the shop gates is: "Can you not get the retiring age down? That rat race is too much to endure until age 65". They want to retire at age 60. I look at some of them and ask them their ages, and to my surprise they are 58 or so and they look older than I think I look. I agree with them that what is more important in terms of pension policy is the freedom to retire early, rather than the campaign for freedom to go on working until one is 90 or 100.
October 30, 1979

One might say that anyone can retire when he wants to, but the freedom to retire is not a freedom unless there is economic security. That means the major concern in all of this should be to get pensions available at age 60.
I am not arguing now, as I was a few years ago, for the old age pension to be brought down from 70 to 65 for everybody on a universal basis. I am not arguing that pensions should be paid automatically to everyone who reaches age 60. But I do say that persons who reach age 60 should have the opportunity to apply for old age security and for Canada Pension Plan benefits, providing they are out of the labour market, and to retire at that point.
I realize that this will also call for increasing the amount available under old age security, and that it will call for an upward revision of the terms of the Canada Pension Plan. 1 think we should not stay much longer with a scheme that provides a pension based on 25 per cent of what one's earnings were. 1 believe we should do these things and give the lead at the government level by making pensions available at age 60 so that this would put some meaning into the concept that people should have the right to work when they want to, or to retire when they want to, within certain reasonable limits.
Let me say to my friend that I have no objection to his carrying on this campaign, one that is similar to a campaign which has been carried on in the other place in a committee headed by Senator David Croll, but the far more important issue is to get the pension age down, at least on a voluntary basis, so that our people can have real freedom as to how long they work or when they retire.
The hon. member spoke as though retirement at a fixed age, such as 65, has the effect of robbing people of something for which to live. I sympathize with the idea and I understand it, but 1 think it is a false notion that the only way to have dignity beyond 65 is to be at a job or remunerative piece of work. There are other things in life that people can live for, there is a far better chance for people enjoying those other things, or getting into a retired life that has meaning to it, if they retire early rather than late. I suggest that the very concern the hon. member has expressed about people having dignity in their old age can be met even better if people have a chance to retire at 60 with enough years ahead of them that they can get into pursuits and interests that give them something to live for. I do not quarrel with this campaign, but to me it takes second place to the campaign for making pensions available at age 60.
There is one other concern I feel about these efforts to delay the retirement age, and that it could lead to pressure to delay the age at which old age security is paid. It took us a long time to get it down from age 70 to 65. I do not want people jumping up with supplements to this bill and arguing that if we are going to let people work to age 67, 68 or 70, we should not pay old age security until those ages. That is something I want to see nipped in the bud. The age at which the pension is paid is high enough now and, quite to the contrary, we should be getting it down.


An hon. Member:: To 29.
Age of Retirement


Stanley Howard Knowles: My friend, the young minister, wants it down to 29. I did not think he was that old.
One should not take much time on this and I only wish to refer to one other aspect I had in my mind, and that is the discrimination that women suffer in their older years. The age when they begin to suffer discrimination starts at about 55. They have a rough enough time as it is. They get paid less when they are working and they have less in the way of retirement income to live on, and all the statistics tell that story. 1 suggest that if we accept this idea of people working until they are 70 or 75, it will be even harder on women.
What we really need is a pension available on a voluntary basis at a lower age. 1 suggest age 60, and certainly this does not represent any conflict of interest on my part because it is a long time since I was that age.
[ Translation]


Hon. Monique Begin (Saint-Leonard-Anjou):: Mr. Speaker,
I am somewhat embarrassed to speak so soon on the private bill proposed by the Progressive Conservative member for Grey-Simcoe (Mr. Mitges) because, if 1 may remind the House, the government of the right hon. Prime Minister said it would let certain private bills pass. We have not been advised as to the fate of this bill. If I overextend myself, please stop me because 1 would, of course, be glad to take part in a collective decision in favour of this bill. I will, therefore, simply start stating my position on this piece of legislation until the government indicates that it is in favour of having this bill passed tonight by all members.
The measure proposed in Bill C-217 concerns only the federal sector and in particular the public service and the agencies which seem to reflect its employment policies, and would allow any employee who so desires to continue working past age 65.
I would now like to be more specific and come back to the concept of an over-all retirement income policy. The desire expressed by Canadians at this time on the age of retirement seems to me to be conflicting or two-sided. 1 had an opportunity last year at about the same date to submit a brief to Senator Croll's Senate committee to which the hon. member for Winnipeg North Centre (Mr. Knowles) referred a few minutes ago.
The debate on retirement reflects two opposing, or at least different, attitudes. Some, and there are many of them, and we know them all irrespective of their party, want the government to lower the age of retirement for all to 65. Some introduce an element of choice and suggest that only those who would choose for various reasons to leave the labour market-I think that is the position of the New Democratic Party-would be entitled to a pension at the age of 60. And that is the wish of a great number of Canadians. It also has a high cost.
Other Canadians in the past few years and probably as a result of the movement that started in the United States want

October 30, 1979
Age of Retirement
to have the choice, namely, to be able to work past the age of 65, if they wish to do so. I believe that, idealistically speaking, pensions will have to become personalized, meaning that the ideal situation for me would be for the government to offer people approaching the age of retirement a number of choices instead of the mandatory universal program that we have now and under which at the age of 65 a universal pension is paid to everyone, with 55 per cent of our people in need getting a supplement called the income supplement.
A survey was made of Canadians around the age of retirement-and the government has access to this-to see how many would choose to retire past 65. Of all the people surveyed, 15 per cent expressed the desire to work past the age of 65. This was not a behavioural study, only an expression of opinion, but still 15 per cent said they would continue to work. Now, 15 per cent of all Canadians who have reached 65 is not a big proportion but it surely represents enough people that the government could move in the direction of an optional age of retirement.
I am very sympathetic with the thrust of this bill, Mr. Speaker, and would be interested in the percentage of civil servants who would be covered if the bill were passed, since it does apply to the civil service only. 1 should like to add, however, that any decision of the government regarding future public service personnel management of the retirement age will have a profound effect, sooner or later, on the private sector. We already know that. We should be-and I hope my English is correct-in tune with the various players in the business world or in the economy on the policy of retirement age in Canada.
Although I have been speaking for a good five minutes, I have not seen any signal from the government that the bill will pass tonight. That may be because we are all waiting for Senator Croll's report to be tabled. I think the hon. member for Grey-Simcoe (Mr. Mitges) is alerting the population to a debate that should, sooner or later, become a national debate.
In the past when we created old age pensions, and the hon. member for Winnipeg North Centre (Mr. Knowles) was a witness to and a player in the event. First, pensions were selective, then made universal; next, the age was lowered slowly from 70 to 65 and, finally, they were indexed. This, in a nutshell, has been the development over the last 25 or 30 years of the retirement policy on public pensions of Canada.
Let me take a few minutes to point out to the Minister of National Health and Welfare (Mr. Crombie), and maybe to the Minister of Finance (Mr. Crosbie) more than anybody else, the very serious concern many of us have regarding the retirement age in Canada.
It is all very well to suggest that we immediately permit people to retire when they want. If we offer a choice upward, we have to offer a choice downward as well. If, tomorrow morning, the public service were to offer the choice of staying

in the public service to whatever age a person wants, provided the person is competent and capable of fulfilling the requirements of the job, then, of course, a similar mobility and option of choice should be offered for the years below 65. That is where the proposal is revealed as not so simple and easy.
It is all very well to say that important deputy ministers and top civil servants have huge pensions and at the present time can elect to retire at age 59, 60 or 61 and still live with almost as much retirement income as they enjoyed when on salary in their active life. The majority of civil servants are not deputy ministers nor VIP's in the high salaried brackets, however. The bureaucracy is made up of small people, and by "small people" I mean the hundreds of thousands of secretaries, clerks, typists, receptionists-the young men, messengers, and people in different types of occupations who, unfortunately, do not and will not benefit from the important retirement income that the public service superannuation fund provides to some.
The same applies to the private sector in even worse proportions. Lots of the so-called "small jobs"-and here I add salesladies and salesmen in stores and such categories of employment-do not enjoy a private pension like the good one the civil servant has. It becomes almost theoretical to discuss the freedom of choosing the age of retirement.
In the minutes I have left I should like to stress that if I were the Minister of National Health and Welfare, if I may put it that way, and if I saw money floating around, the first moneys that would be available-


An hon. Member:: You were.


Monique Bégin: That is not for the Minister of Finance nor the President of the Treasury Board (Mr. Stevens)-they would have a fit-but other members who, if they listen with honesty to this debate, will surely see my point. When the economic situation gets better, or whenever the government has the guts to tighten its belt and cut God knows where-maybe on its commitment to the military sector or any other sector-in other words, whenever moneys are "freed" for allocation somewhere, I firmly believe that the first priority in the field of pensions should be those people actually retired, those who today are in receipt of pensions and GIS but who fall into the category of "unattached" individuals.
A strange incident happened today when a young, new member of the Conservative government told me to continue to speak of the $200 million needed for the old-that it was very good for them, the Conservatives, because it makes them look good and makes mileage out of the extravagance that I seem to be pushing by referring to "only $200 million" needed to bring the pensions of today, not for those below 65, but for those more than 65, just above the poverty line. I was quite surprised to hear that from the new member. I recognize him, but I do not know his name yet. However, I will learn it. If these people continue along that avenue, they will lose touch with real people. One cannot only listen to chambers of commerce and to representatives of any single dimension of society.
October 30, 1979


Some hon. Members:: Hear, hear!


Monique Bégin: It is not that they should not exist but they "belong" to the minister of finance or to so-called "economic ministers". It is essential that other ministers represent other voices in the cabinet. Between these conflicting positions come programs going to the various clientele of the government.
I will repeat, but with explanations, that for the senior citizens of Canada, 55 per cent of those who get part or full GIS-which means the majority of them-are in need of an additional pension. The majority of those, which is approximately 75 per cent, are unattached individuals. Because of that, these individuals still fall below the poverty line.
Last year we increased the GIS by S300 million in order to bring those couples receiving the GIS above the poverty line. For the first time we discriminated positively in favour of the single people, those divorced, separated, and widowed who were receiving the GIS, but it was not enough. We gave them a break and brought them a little closer to the poverty line, but we are still lacking in that respect.
In Canada, a person alone used to receive half the pension a couple received. It is now well known that to live alone costs approximately 66 per cent of a couple's budget. The basic one bedroom apartment, along with the electricity bill, etc., amounts to exactly the same thing whether that apartment is occupied by a person alone or a couple. We have brought people living alone up to 55 per cent approximately of the couple's pension. That is where the $200 million is needed per year in order to bring all Canadians, already in receipt of the government pension, just above the poverty line.
To come back to the subject of the bill, which could pass easily-since it concerns only the federal public servants-it should be noted this move will have an effect on the whole retirement policy in Canada, including the private sector and numerous small and medium-size employers. It makes sense and remains in line with what is needed right now regarding the public pensions for those already over the age of 65. In other words, 1 think I am saying to my colleagues in the House that surely we must be in favour of this bill and also of other bills, not just for the civil service, but for all Canadians who would like freedom of choice of their age of retirement. I find that is fundamental. And surely it will be the future that we will shape in this House of Parliament for Canadians.
Of course, 1 take it for granted that we will not abolish universal public pensions and that indexation will be maintained fully the way it is now.


Stanley Howard Knowles: Hear, hear!


Monique Bégin: However, if those already in receipt of pensions do not get enough, how can we start pushing the idea, which almost becomes a luxury, of one being able to choose the age of retirement, either before the age of 65 or after.
Age of Retirement

Mr. Speaker, I think I have succeeded in giving a brief outline of what I believe to be a very serious weakness in the system. It is not that I refuse to consider such a bill because I am in complete agreement with its principle and I especially hope that this principle will be extended to another area, that of the private sector. However, first of all I believe that we should urgently try to find the $200 million necessary to help single people who receive the guaranteed income supplement because they still live below the poverty line. Of course, I have said that I believe that we should maintain universal pensions, and I was very happy to note ten days ago that the right hon. Prime Minister (Mr. Clark) had confirmed in the House that the policy of the new government would be to maintain the universal aspect of old age pensions.
I could say a lot more, especially about the fact that women as well as men, but particularly women in the private sector, who work in small or medium businesses or hold part-time jobs or do not belong to a union, have historically very little entitlement to private pension plans. This is certainly a priority and I am sure that eventually Canadians will be entitled to a personalized pension plan. This is my fondest wish.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, it is a pleasure for me to follow two distinguished members in this debate, mentioning the hon. lady first, the former minister of national health and welfare, who speaks from experience because of her recent responsibilities and, of course completely disinterested because she is nowhere near retirement age. On the other hand, the hon. member for Winnipeg North Centre (Mr. Knowles) also speaks from great experience, and even though he has a vested interest in the subject matter of the debate, he was pressing for lower retirement rather than later retirement.
I wish to make another personal reference, about the hon. member for Winnipeg North Centre. He has certainly demonstrated that people who live and serve beyond that magical age of 65 certainly lose nothing in the process of aging, because he has been Chancellor for three successive terms of that great institution of higher education, Brandon University. He has served with distinction not only in this House but also in that extra curricular capacity.


Stanley Howard Knowles: A university of which the hon. member is an honorary doctor.


Walter Gilbert Dinsdale: Thank you. The hon. member for Grey-Simcoe (Mr. Mitges) should be congratulated for bringing on this debate because it reflects a growing concern and pressure. The pressures with respect to age of retirement, of course, reflect the changing demography of the land. We are living at a time when the baby boom of the post-war period is in full swing. In this chamber, for example, we have seen the average age drop considerably since I first arrived here in the early part of 1951. In those days the member for Brandon, who died in office, had reached the ripe old age of 83. He did not get

October 30, 1979
Age of Retirement
into politics until he was 65 years of age. That is exactly the way it was. When I had the audacity to attempt to replace that venerable old gentleman who had served with such distinction, I was referred to as the boy politician even though 1 had crept over the age of 30 years.


Stanley Howard Knowles: Now you are venerable yourself.


Walter Gilbert Dinsdale: Now I am venerable. However, there is a changing pressure. It will not be long. The baby boom has already gone through the system. That is why we are having so much discussion these days with regard to the demographic changes that are taking place. For example, by the end of the century 15 per cent of our population will be over 65 years of age, a substantial percentage. No wonder this debate has been precipitated here today. Pressure has come because of deliberations in the other place and because of recent legislative action on the part of the Congress of the United States.
I want to speak specifically to the bill and talk about the situation that exists at present under the Public Service Superannuation Act because, as was indicated, this is really what we are discussing today. It is possible for the mandatory age of 65 to be extended. This extension is at the discretion of the manager of the particular department under whom the employee is serving. That usually refers to the manager of the branch or the deputy minister. Usually the decision to extend the age of useful service of 65 depends upon the demand for the service or talents of the particular employee.
It is to be noted that this is only extended in cases where the maximum salary authorized to be paid as an SX-1 has not already been reached. This decision is, of course, in the hands of Treasury Board. It is not an absolute prohibition at the moment, but it almost amounts to that because in practice very few departments have used the flexibility that is permissible under the present superannuation act.
It should be noted that one of the reasons for this fair amount of rigidity in the exercise of the act is because of the problems that have already been pointed out by previous speakers, particularly the hon. lady who just spoke. The whole proposition of mandatory retirement at 65 came about when comparatively few people lived to be 65. At the time of Bismarck, or even earlier, the average longevity would be in the forties rather than the sixties. There were not too many people who lived long enough to draw a pension.
The superannuation act is quite specific with regard to the privileges and the benefits that are available to those people, even though they might be extended beyond age 65. For example, they are allowed full participation in the Public Service Superannuation plan. They enjoy the supplementary death benefit plan, the group surgical-medical insurance plan, and the life insurance features of the public service management insurance plan. However, as is common with almost all Canadian employers, coverage under the disability insurance plan or the public service management insurance plan and long term disability plan is not available to anyone over age 65.

If you contemplate removing any mandatory restriction, you have to make major changes in the social security plans applying to government employees. It should be noted, by way of observation, that it is possible for a person to be hired beyond age 65 under the existing legislation where special talents and qualifications are involved.
Everyone realizes further extensions and flexibility will have to be introduced. This matter has already been taken under consideration by the new Government of Canada. As a result of the pressure that has been outlined here, the Treasury Board secretariat, on behalf of the government as employer, is now reviewing public service policy with respect not only to the question of mandatory retirement age, but also greater flexibility in retirement ages with a view to determining whether policies might be reversed.
There is a series of other studies that are already under way which relate to this important matter. This includes the Conference Board in Canada survey of Canadian employers' views on mandatory retirement age, and the Finance, Health and Welfare study of retirement income policy for Canadians.
At this stage we are all concerned about the problem, and we are all interested in bringing public policy into line with the demands of the demographic changes that are under way. I am sure that as soon as the results of all these studies and this discussion are known, the government will take the necessary action to bring public policy in line with the actual social circumstances existing.


Some hon. Members:: Hear, hear!


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, it is a privilege for me to say a few words in this debate. The hon. member for Winnipeg North Centre (Mr. Knowles) is the dean of this House, not in continuous service however, because it is the previous speaker, the hon. member for Brandon-Souris (Mr. Dinsdale), who is the dean of this House when it comes to continuous service, having been here since 1951.


Some hon. Members:: Hear, hear!


Stan Darling: However, I believe the hon. member for Winnipeg North Centre has the longest service having come to this House in, I believe, 1942. He took a brief holiday from 1958 to 1962. I had the impression he came here before the Right Hon. John Diefenbaker, and that cost me a dollar because I said the hon. member was here first. I too can be classed as a senior citizen. I am one of the few members in this House of Commons who is entitled to extra indemnity because of my age. 1 might say the taxman gets a good bit of it back.
1 commend the hon. member for Grey-Simcoe (Mr. Mitges) on bringing this bill before the House because it certainly is worth while and deserves serious consideration. As was pointed out by a previous speaker, there are a great many men and women who have attained the age of 65 who continue to work in a very worth-while fashion. In fact they probably do better than some of those many years younger. I do not believe the chronological age is all that important. I myself have worked

October 30, 1979
for a great number of years and I have not been on a 40-hour week during that entire period. 1 believe I still put in a pretty good week's work even though it is late in my chronological life. 1 can tell you, Mr. Speaker, that I hope to continue to do so for many years to come despite my age, as long as the fine people of Parry Sound-Muskoka wish to return me to this House.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: The hour provided for the consideration of private members' business has now expired. 1 do now leave the chair until eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Crosbie that Bill C-17, to amend the statute law relating to income tax and to amend the Canada Pension Plan, be read the second time and referred to Committee of the Whole.
Mr. Deputy Speaker:: Order. When the debate was interrupted at 5 p.m., Bill C-17 was under consideration, and the hon. member for Cape Breton-East Richmond (Mr. Hogan) had the floor.


An hon. Member:: He is not here.


Mr. Lefebvre:: Mr. Speaker, 1 am sorry, but I did not hear what you said. Could you repeat it?


Mr. Deputy Speaker:: In French or in English?


Thomas Lefebvre: As you wish, Mr. Speaker.


Mr. Deputy Speaker:: When the debate was interrupted at 5 p.m., the debate was on the motion for second reading of Bill C-17, to amend the statute law relating to income tax and to
Income Tax Act
amend the Canada Pension Plan, and the hon. member for Cape Breton-East Richmond (Mr. Hogan) had the floor. [English]
The hon. member for Burnaby (Mr. Robinson).


Svend Johannes Robinson: Mr. Speaker, my speech this evening will be my first speech as the member of Parliament for Burnaby, and it gives me a great deal of pride to be the first member of Parliament for the new constituency of Burnaby. I might add that this is the first time in the history of my province that the community of Burnaby has had its own member of Parliament.
If I might just beg the indulgence of the House for a moment, I would like to point out that Burnaby is a very unique municipality in a number of ways. Within our borders we have great diversity. We border on the mighty Fraser River and an ocean inlet. We have rich agricultural land, heavy industry, two large post-secondary institutions, many lovely residential neighbourhoods, as well as a strong commercial area. I am proud to represent the constituency of Burnaby, and 1 am pleased that my constituents have placed their confidence in me.
The bill before the House this evening is a bill which would amend the statute law relating to income tax, and amend the Canada Pension Plan. The bill, of course, is a holdover, in a sense, from the previous Liberal government. It basically would continue the same kinds of loopholes and inequities, in my view, that the previous Liberal government brought into effect, or wished to bring into effect before it was turfed out of office on May 22 last.
The people of Burnaby, and I am sure the people of the rest of Canada, are tired of the kinds of games which are being played with them through the economic system, and the tax system in particular. The people of Burnaby voted for a change. I was elected as their representative, and the people of Canada as a whole thought that perhaps the promises which had been made by the Conservative Party during the election campaign would be kept. However, that was not to be. There are many examples, but 1 point to the example of the $2.2 billion income tax cut about which this government has been strangely silent so far.
Surely the constituents of my riding and the voters of Canada have a right to expect integrity in the political process in terms of the promises which have been made. There was a number of foolish promises which were made, and the government has quite properly turned its face from them. Of course, only yesterday we saw the example of the proposed embassy move.
However, what concerns me is the fact that in this bill which is presented to us today, and which seeks to bring in some more loopholes and some more incentives, as they have been called, to the taxation system, it does nothing to deal with the basic inequities which exist within our tax structure. The share of taxation which is borne by corporate interests today is approximately 17 per cent. The share which is borne by individuals is some 41 per cent. Twenty-five years ago the
774

October 30, 1979
Income Tax Act
corporate share was far greater than the individual share, and surely the people of this country have a right to ask whether equity exists in a system in which the corporate sector is getting away with lower and lower taxation, and ordinary Canadians are being subjected to higher and higher taxation.
At the same time that this taxation is increasing, the government is slashing important social programs and not meeting its commitment to assist in a number of key areas. For example, there is nothing in this bill which deals with the essential concerns of people in urban areas who want some federal government assistance for urban rapid transit. Promises were made by the previous Liberal government. Those promises, as so many others, went unfulfilled. However, one would have hoped that in this bill, or in other legislation tabled at the earliest possible time, one would have seen some recognition of the fact that municipal taxpayers in urban areas cannot be expected to bear the tax load that is required to construct an urban rapid transit system.
The whole area of urban rapid transit has been given lip service only by members of the government opposite. They have indicated that they recognize its importance in terms of its energy consumption, and the savings in implementing a system of rapid transit, yet they have indicated nothing in terms of their willingness to deal with the serious financial problems that face local taxpayers who must finance urban rapid transit programs.
This bill will continue the present tax system which has been called, and properly so, by the National Council on Welfare, "the hidden welfare system." Loopholes and tax expenditures in the system do not assist the ordinary worker in Burnaby, the teacher, the labourer, the government employee. There is not opportunity for them. They assist primarily those persons who are making a lot of money, and a lot more money than most of us in this chamber are making. Concern has been expressed on the part of all members of the House about the size of the federal government deficit. This year it is something in the order of $11 billion, I believe, and I think we all agree that this unconscionable burden on the Canadian taxpayer must be lifted at the earliest possible time. This bill does nothing to close that gap.
We recognize, of course, that there are quite a number of serious structural changes which have to be made in our economy: the high degree of foreign ownership which plays a major role in the size of the budgetary deficit, and the fact that we are paying millions and millions of dollars in rent to foreign owners of the Canadian economy, and forgoing millions of dollars in revenues through the hidden welfare system to which I have referred.
There are some 60 deductions, exemptions, credits, exclusions, and loopholes which make up Canada's hidden welfare system, the tax expenditure budget. 1 think the Minister of Finance (Mr. Crosbie) deserves full credit and I commend him for suggesting that in future he will be tabling annually a proper list of the extent to which various interest groups in our

society are benefiting from this welfare system. I understand he will be tabling, as is done in the United States, the level of various tax expenditures. That is good, and we welcome it on this side of the House.
Both individuals and corporations, of course, benefit substantially from the various loopholes, tax credits, and exemptions which characterize our income tax system to date. In 1973, for example, some $2.5 billion worth of these various loopholes went to corporate interests. The question of these various loopholes and tax incentives is completely separate from the fact that in some cases those people and those corporate interests which can well afford to pay are not paying their fair share of taxation. We are dealing solely with the tax base itself and how that tax base has been eroded in an inequitable manner through the various loopholes within the tax system.
Let no one be deceived. These various tax expenditures are, in every sense of the word, true spending, and one must question why it has been for so many years that the Liberal government has disguised the extent to which this spending in fact has taken place. I can give as an example the whole area of DREE grants. My own constituency has a very large corporate interest which has received substantial amounts of funding in terms of DREE grants, regional development incentive grants, as they have been called. Millions and millions of dollars have been spent under the terms of this program, and we do not know today what effect they have really had in terms of the corporate decision-making process. Would these corporations have located in those areas in any event? How many new jobs have really been created? I will give the example in my own constituency of Lenkurt Electric which received a substantia! grant under the terms of a loophole, an incentive similar to those that have been continued under this bill. What they did was to open a new plant in Manitoba. Instead of creating new jobs, the plant in Manitoba was opened and, lo and behold, an entire production line in my constituency of Burnaby was shut down and many persons lost their jobs. The company, of course, continued to receive its DREE tax incentive.
It has been well established that these tax expenditures, these loopholes of which I have spoken today, are worth far more to high income earners, to the fat cats so to speak, than to middle and low income earners, and of course they are worth nothing whatsoever to those persons who are too poor to pay any income tax at all and to those many people, such as old age pensioners and others, who are living on the very edge of subsistence. There is nothing in this bill for the over two million women in Canada who are living below the poverty line, as was so eloquently shown recently in the report on women and poverty published by the National Council on Welfare.
There has been some talk in various circles that family allowances may perhaps be eliminated. I suggest that far from eliminating family allowances, we should instead close some of these inequitable tax loopholes which exist at present. There

October 30, 1979
are quite a number of these. I indicated there were some 60 loopholes, exemptions, and credits of various sorts.
One example I would give, separately from the question of corporate DREE incentives, is the example of the registered retirement savings plan. This boondoggle has been an annual tax benefit in that the benefits which accrue to those persons who are in the highest tax bracket can be as large as those which accrue to a low income pensioner from his old age security pension and guaranteed income supplement in the course of an entire year. In other words, the tax break that those persons in the top ten per cent of the income bracket receive is greater than the amount of money which we are telling our elderly people they have to live on from old age pensions and guaranteed income supplements.
The statistics are indeed disturbing. In 1976 the top 10 per cent income bracket received some 69 per cent of all benefits from the RRSP. So we see that these benefits are concentrated at the very top of the income scale, and in fact some $7 of every $10 went to the top 10 per cent of tax filers. 1 refer to tax filers, of course, because those persons who did not file income tax returns received nothing.
I would also draw to the attention of the House that in fact in terms of the over-all tax expenditures, the entire package of loopholes and boondoggles that exist and that are being continued by ministers on the other side of the House, by and large go to those in upper income levels and do not benefit to the same extent those persons who are middle and low income earners in our society. Of the $1.8 billion increase in tax expenditures between 1974 and 1976, only $1 in $10 went to the lower income 50 per cent of the tax filers, and $4 of every $10 found their way into the already stuffed pockets of the top 10 per cent of income tax filers.
One rationale which has been given for these particular incentives, as they have been called, is that we should be directing funds into certain desirable areas. No one can quarrel that there are areas in the Canadian economy which should be developed. But there has been no indication that these programs, these loopholes, have had any significant effect in terms of directly channelling money into weak sectors of the Canadian economy.
Why should it be that the rich-and I say "the rich" because they are the only persons who benefit-receive tax breaks for making films in Canada, films which may flop completely? Why should the rich receive tax benefits for drilling for oil? Why should ordinary Canadian taxpayers have to pay for Shell Oil's oil drilling programs and receive nothing whatsoever in terms of a benefit?
Why should the ordinary taxpayer in my constituency of Burnaby, or anywhere in Canada, have to pay substantial amounts of money to provide incentives for the building of apartments through the MURB program which once again is being continued by this bill? Why should the ordinary taxpayer have to pay to assist the rich to invest in various stocks and bonds?
Income Tax Act
Why should it be that the corporate sector in our country should be paid to instal pollution control equipment in its factories and places of manufacture? Why should Canadian taxpayers have to bear the burden of that kind of expense? Surely pollution control equipment is required wherever there is a hazard to the environment. Surely it is up to the corporation involved. The corporation concerned should not delve into the public purse. It should be considered as a cost of doing business.
For far too long the Inco's of this country have been dipping into the public trough, and the ordinary Canadian taxpayer has had to pay the shot for their pollution control equipment, minimal though it may be. Why should Canadians have to prop up an inefficient corporate structure in this way? Why should we have to pay for films that flop? Who can afford these so-called incentives? Not many of my constituents in Burnaby, not many people in Canada. A very small number of people will benefit from these incentives.
There are incentives in the area of dividend tax credits and so on. The government made some suggestion when it was on the campaign trail that perhaps it might remove the capital gains tax. That would be some $50 million in a giveaway to those persons who are at the very top of the income scale. Those are the people we are talking about, the top 1 per cent of tax filers. These are 1976 figures. It is the top 1 per cent of tax filers, those persons with incomes of over $40,000, who receive 99.3 per cent of all capital gains in the country. The top 1 per cent receive 99.3 per cent. Instead of removing this boondoggle, this loophole to the top 1 per cent, the wealthy 1 per cent, we should adopt the recommendations in the Carter Commission and say that a buck is a buck is a buck. We should tax capital gains at the same rate as any other income.
In closing I should say that there must be some ongoing parliamentary process whereby Canadians, through their elected representatives, can know exactly what are these legislative loopholes, these boondoggles to the rich of which so few of my constituents and other Canadians can take advantage. The same programs are being continued by the Conservative government which, in many cases, they bitterly protested when they were in opposition. It has been said before, and I say it again: progressive in opposition, conservative when it comes to government.
There have been a number of suggestions that perhaps things are getting better over the course of the years. I conclude by pointing out that income distribution has not changed significantly since 1951. I speak only of income distribution, not of wealth. In 1951 the bottom 20 per cent received 4.4 per cent of the income, and the top 20 per cent received 42.8 per cent. The most recent figures show that in 1976 the bottom 20 per cent's share had dropped to 3.9 per cent, and that the top 20 per cent's share had gone up to 44.0 per cent. The top 20 per cent is receiving ten times as much as the bottom 20 per cent, despite all the so-called income security programs which have been brought into play.
The concentration of wealth in our economy has never been adequately studied, but recent studies in the United Kingdom

October 30, 1979
Income Tax Act
show, for example, that the top 1 per cent of all income earners own over 60 per cent of the wealth in that country. The situation is no different here.
It is rather sad that we should be put in a situation of basically having the same document with the same policies from the same old bunch recycled under the name of a different minister. Surely the time has come when the people of Canada will say, "A pox on both your Elouses".


Some hon. Members:: Oh, oh!


Svend Johannes Robinson: Surely the time will come in the very near future when Canadians will recognize that both the Conservatives and Liberals are bankrupt when it comes to economic policy. It is only by electing a New Democratic Party government that there will be any real equity, any fundamental changes which will assist the ordinary people of Canada instead of the corporate friends of the ministers opposite and of the Liberal members on this side of the House.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Scott, Victoria-Haliburton):: 1
must inform the House that if the minister speaks at this time he will close the debate.


John Carnell Crosbie: Mr. Speaker, I do not intend to give any ringing endorsement to this piece of legislation before us. This legislation will speak for itself. If it speaks at all, it will speak for itself. It arises out of the last budget of my predecessor. I can agree with many of the provisions. In any event, the law was considered to be changed in most of these items as of the date the budget was brought down. The taxpayers of Canada have been assuming that many of these provisions have been the law since November 16, 1978. Unfortunately the legislation was not brought before the House sooner. Unfortunately it was not dealt with last November or December, January, February or March before the House dissolved.
It was our duty to decide whether we should go forward with it. We decided that we should go forward with it because it would be unfair to the taxpayers of Canada not to go forward with it, in addition to the fact that many of the measures in any event will be beneficial to many taxpayers.
I want to congratulate the hon. member who just finished his maiden speech. Certainly he has a maiden pair of lungs. 1 can assure him of that. I am sure he will make himself heard with great distinction in this House. He already has in question period. It is always of interest to see a new young ideologue come before the House with such certainty as to what is right and what is wrong with the tax system of Canada.
Certainly I agree that we need a lot of clarification of the tax system. If we could ever get the time, certainly it would be very helpful to have a major reform of the provisions, exceptions, subexceptions and distinctions which litter the Income Tax Act so that it is a monstrosity at which one is even afraid to glance. It gives me the cold shivers and the cold shakes to

even contemplate the Income Tax Act, much less the amendments we are now moving before the House. What can be done about it? If one adopted the cool, methodical, logical approach of members of the NDP, of course we would have a very simple Income Tax Act. We would just make out a cheque every year and turn our income over to the government.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Indeed that would have the great virtue of simplicity, but I do not know what kind of an economic system we would have in this country afterwards.
As for me, I prefer the system we now have, even though it is littered with many imperfections, to a system of simple perfection whereby we entrust everything to the social democrats of this country to spend as they see fit, and they know better how to spend it than the ordinary individual in this country who earns the income, the private sector which creates the income we are now spending here. I cannot say that I agree with the views expressed by that gentleman, although there is lots of area for reform and change in our Income Tax Act.
I really do not have any more to say in this connection. I do not want to arouse members of the House, because that seems to induce them to speak to inordinate lengths, as I used to do when I was on the opposition side. I simply say that if members have suggestions to make that we can adopt, we would love to adopt them. If we cannot adopt them now we will consider them for the future. As we go through this bill in the Committee of the Whole House I am sure we are going to hear some suggestions, particularly from our brethren to the- is it the right there; to my right, those left-footers over in the corner. I am sure they will have many worth-while suggestions.
I hope we can give them the information that they will be seeking to prove their points. I must say that sometimes they do have a point. On that tone, Mr. Speaker, I hope we can get through the Committee of the Whole this evening, and I would urge second reading.


The Acting Speaker (Mr. Scott, Victoria-Haliburton):: Is
the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Scott, Victoria-Haliburton):: Is it
the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Stanley Howard Knowles: On division.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Laniel in the chair.
Gérald Laniel: The House in committee of the whole on Bill C-17. Shall clause 1 carry?
On clause 1-
October 30, 1979


Mrs. Sauve:: Mr. Chairman, it is with a certain astonishment that I heard the Minister of Finance state in his opening remarks that he did not intend to give any ringing endorsement to the bill he is sponsoring in the Elouse tonight. 1 was astonished and 1 even found that it was not very becoming for the minister to say that. 1 want to ask him whether he is taking responsibility for this bill or whether he is speaking to it for the sake of it. Just what is his attitude concerning this bill?


John Carnell Crosbie: Mr. Chairman, I do not want to sink into that trap; a trap that can be sunk into. If we are presenting this bill to the House, that means we are supporting the bill. 1 am still entitled to say that I am not supporting it with full enthusiasm. It has not got my full enthusiasm and backing as though 1 was the author of this bill. I am not the author of this bill. This bill arises out of the last budget. Some sections of it I agree with enthusiastically, and in respect of other sections my enthusiasm is muted. Or course 1 will not be disclosing to members of the House which parts are muted and which are not. This bill has my support or I would not be introducing it, but 1 am not claiming pride of authorship. I am not the author of this bill.


Jeanne Sauvé: Mr. Chairman, 1 think the minister's answer is still more astonishing. Since he is introducing the bill, he is presumed to be the author. Yet he seems to be trying to dissociate himself from the bill in this debate. I must remind him that his feelings and enthusiasm are irrelevant and it seems to me that if he takes responsibility for a bill he should spare us his enthusiasm or his lack of it. Let him simply introduce it to the House and ask us with all the conviction he can muster to vote either for it or against it.


John Carnell Crosbie: Mr. Chairman, perhaps the hon. lady does not understand. When this government came into office on June 5, 1979, it was faced with a situation where the previous government had introduced a budget on November 16, 1978. That budget made certain changes in the taxation laws affecting all Canadians, particularly those who pay taxes, and those provisions were set to go into effect the night of the budget. The people of Canada thereafter conducted their affairs on the basis that the provisions of that budget had become law, so that when we took office on June 5 we were faced with the situation where for December, January, February, March, April, May and June the taxpayers of Canada had assumed that the provisions in the budget of my predecessor of November 16, 1978, had become law.
As a matter of fact, there are still some thousands of tax returns from 1978 which have not yet been dealt with by the Department of National Revenue because those taxpayers chose to take an option that they be assessed on the basis of the budget that was delivered on November 16, 1978. The Department of National Revenue cannot now deal with those
Income Tax Act
particular income tax returns until the House passes this particular legislation, if the House does pass it.
Some thousands of Canadian taxpayers have acted on the basis that this bill is already passed, as they were entitled to do after the budget of November 16, 1978. I therefore had the task of deciding and recommending to the government whether we should go forward with the provisions and measures that had not been gone forward with by the previous government from November 16 until the House was dissolved in March. We had to decide whether we should go forward with them. We took the responsible course that we would go forward with those provisions, that we owed a duty to the Canadian taxpayer who was conducting his affairs on the basis that the budget of November 16 meant what it said, and that these provisions would be carried into the law as had always been the case. Therefore we decided to go forward with these provisions, with two exceptions.
There are some minor changes in this legislation. We have made a change in the small business treatment for certain corporations, and I will come to that later on in this bill. In the excise and sales tax legislation there was a change. However, we made the decision that since the people of Canada were proceeding on the assumption that the budget of November 16 was in effect we would carry on and ask the House to pass it. We assumed that in undertaking that duty and responsibility the official opposition would assist us because it was their legislation and their budget we were asking the House to pass.
1 am still assuming that members of the official opposition will assist us.
I am not expecting that members in the other group down in the corner, members of the New Democratic Party who did not prepare the budget, who had nothing to do with it and who obviously do not agree with much of it, are going to assist or help in passing this bill at all. Nor am I expecting them to understand that I am carrying out a responsibility 1 did not have to carry out, or that I could have caused confusion throughout the tax system in Canada by saying last July that we were not going to carry out some of these provisions in the budget of the past Liberal administration.
We are asking the House to go forward with this legislation, which means that 1 am supporting the legislation. If I did not I would not introduce it to the House. 1 certainly have the right to say that I am doing that with some muted enthusiasm, that I am not the author of this bill, and only in some technical sense could I be called the author of it. I am carrying out a responsibility to the proper functioning of government in Canada by putting this before the House and asking the House to pass it, and that is all I am doing.


Jeanne Sauvé: 1 simply want to indicate to the minister that I understand everything, and even a little more than he does. Since he made two changes to that bill, he could have made some others. Consequently, he is the presumed author of that

October 30, 1979
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bill. He gave very long explanations to dissociate himself once again from the bill he brings forward in the House without enthusiasm. I should like to make one last remark. The Minister of Finance is now fulfilling his responsibilities but without any enthusiasm, just to give the people of Canada what they expect.


Gérald Laniel: The hon. member for Drummond.


Mr. Pinard:: Can the hon. minister say why he made only two changes?


John Carnell Crosbie: Mr. Chairman, there are a number of reasons. Some of these provisions I would support in any event. Changes in the others would cause a lot of confusion in the tax system of Canada and to Canadian taxpayers, and so on. The simplest thing to do is to pass these bills with as few changes as possible. That is what we are now asking the House to do.


Yvon Pinard: Mr. Chairman, are there any particular changes the minister could have made which would have given him reason to smile a little and be a little happier and which would have enabled him not to say to the House that he is putting forward a bill which he has to support because it is his bill but that he is not very happy to do so? Are there any changes he could have made to that bill which would have encouraged him to say that he supports it without any reservations?


Gérald Laniel: The hon. member for Labelle.


Maurice Dupras: Mr. Chairman, I would also like to remind the minister that he could show a little more enthusiasm about introducing these tax measures. It is probably the only time they will be worth some enthusiasm because the next time he introduces tax measures in the House they will really be his own.


John Carnell Crosbie: Mr. Chairman, I am saving my real enthusiasm for my own budget. Why should I exhibit some enthusiasm for the budget of another minister of finance in another party? I am not going to. My enthusiasm will be saved for the budget I bring down before this House, naturally.
[ Translation]


Maurice Dupras: Mr. Chairman, in that case, I wonder why the minister does not take the trouble to tell us which provisions of this measure he finds unacceptable, which ones he does not agree with, which ones prevent him from showing some enthusiasm as expected, since he is the one responsible for them?


Gérald Laniel: The hon. member for Drummond.


Yvon Pinard: Mr. Chairman, when we put questions to the minister, we expect to get some answers. If he does not feel up to answering our questions he must understand that this cannot go on very long at the committee stage. The member for Labelle has asked a very precise question: which provisions of this measure does he consider satisfying and which ones does he hesitate to endorse. It is a very simple question and it deserves an answer.


John Carnell Crosbie: Mr. Chairman, I would have thought that the hon. gentleman on the opposite side has been here long enough to know that if I am sponsoring this bill, I am sponsoring all the clauses of the bill. I have no intention of telling him what I am enthusiastic about and what I am not enthusiastic about. I am sponsoring this bill, and the clauses go before the House with my support as they have to. I have explained why I am doing it.
Clause 1 agreed to.
On Clause 2-


Bob Rae: Mr. Chairman, before the party opposite brays this bill through, I wonder if it might be possible to explain to hon. members present in this committee precisely what the purpose of this particular clause is, what its effect is, and what the cost is to the treasury. We have some objection to it. It provides for a partial write-off of certain charges on land which are incurred by developers. I think it would be of interest to the House to have an explanation from the minister on what is in this particular clause, rather than having these things go through without the Canadian public understanding them at all.


John Carnell Crosbie: Mr. Chairman, Section 10 of the act deals with inventories. Subsection 10(1.1) deals with land included in the inventory, for example, the land of a land developer. This particular subsection provided that interest and property taxes relating to undeveloped land or included as part of the cost of the land held as inventory-such expenses will not be deductible in the year they are incurred. As a part of the cost of the land, interest and property taxes were deducted only in the year in which the land was sold. The budget proposed a change in the treatment of carrying charges on land. After November 16, 1978, such costs are to be deductible on a current basis. This is dealt with in the amendment to subsection 18(2) of the act, in clause 6 of the bill. As a result of that amendment subsection 10(1.1) of the act is no longer required. It is clause 6, however, that really deals with this particular manner.


Bob Rae: While we are here, Mr. Chairman, could the minister tell us what this will cost?


John Carnell Crosbie: About $30 million.


Bob Rae: Thirty million. Is the minister saying that that is going to the developers of this country? Is that right?
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John Carnell Crosbie: This will be a tax concession to land developers so that they can deduct the carrying charges on their land.


Bob Rae: Of $30 million?


John Carnell Crosbie: It will cost the Canadian government $30 million in the full year. 1 should clarify that, however. It is not that they are going to get something new; they are going to get it quicker.


David Orlikow: Mr. Chairman, one of the most important factors in the increased cost of living in the last 10 or more years has been the very dramatic increase in the price of housing and the cost to the ordinary citizen of buying or renting a house. In the cost of housing, the cost of land has gone up substantially more than the cost of the actual house.
If there is one group in this country that has done very well, it is the large land developers. Their profits have increased astronomically. I cannot understand why we are extending their privileges so that they need not pay taxes on money borrowed to buy land which they will not use for three, five or ten years from now. By that time the land will be worth much more than it is now. We are permitting them to do that by allowing them to charge the interest on the money borrowed as a legitimate business expense.
I cannot think of any way better calculated to encourage them to expand their operations so that they can milk the people of Canada more than they have done in the past, than the kind of amendment the minister is proposing. It is just another rip-off in the long list of rip-offs we have permitted to developers in this country.


John Carnell Crosbie: Mr. Chairman, that is not the case at all. This amendment is in response to the findings of the Greenspan report. I think I mentioned Mr. Greenspan in the House yesterday. He is the Liberal lawyer from Toronto who did a report for a federal-provincial task force studying the land development process in Canada. He is supportive of the mortgage interest and tax credit plan that we have proposed. He had an excellent article on this in the Globe and Mail which I can recommend to hon. gentlemen. He made the finding that this should be done.
If these costs are made currently deductible, they should afford the land development industry an increased cash flow and give them the opportunity to plan and carry out more projects in Canada.
If hon. members of the NDP are interested in getting more housing, getting land developed and having Canadians housed at an economic cost, this is an amendment that they will support. It is not a rip-off, nor any of the things they have described. It is assistance to the land development industry to improve their cash flow. It is something they would have received in any event but they would have had to wait longer for it. It is not in the category of a rip-off. The same kind of tax treatment is given to developers in the United States.
By the way, Mr. Chairman, clause 6 ensures that carrying charges on land held by speculators do not get similar treat-
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ment. It is only on land held by a land developer, somebody who is developing land, that gets this treatment.


Mr. Rodriguez:: Mr. Chairman, because the so-called developers are taking their money, going to California and investing it in other countries where they can make big bucks,
I do not see how the minister can stand up and tell this House that by giving this $30 million away to these developers it will put low income Canadians into housing. The problem is not the fact that they are going to build a house, it is whether people can afford to pay for the bloody homes. That is the problem. 1 know this is lifting mortgage interest deductibility to new heights; it is a mortgage interest deductibility for developers. It seems to me this is one way that they can write off the cost of the money borrowed to buy the land under the guise of developing it. As far as I am concerned I do not see how that will be helpful to Canadians.
The minister said that he feels somehow morally committed to this particular budget brought in by his predecessors, and we must all keep in mind that the minister is a recycled Liberal so it should not be difficult for him to make this quantum leap of credibility. Can he tell us that if he drops that particular clause, for example, that somehow or other we will not get housing for Canadian people? I do not think he should go along with a rip-off scheme that his buddies in the Liberal party designed for their corporate friends. I think he should come clean with the Canadian people on that one.


John Carnell Crosbie: Mr. Chairman, the hon. gentleman speaks with his usual moderation, and I note his comments. However,
1 do not believe the hon. gentleman understands the situation. If you are a real estate developer, the money does not just leap into your hands. You have to take risks, you have to invest, you have to put your money out, you have to pay interest on the money borrowed, and property and municipal taxes have to be paid. These are costs to you in your development.
If this clause is not passed the situation is this; these costs can generally only be deducted when you have made a sale of the land, that is, when you have developed it and divided it up and sold it. These costs interfere with cash flow and you can only recover them when the land is sold. This provision simply provides that you can deduct these currently. In other words, you do not have to wait until the land is sold to deduct them. You can deduct them earlier than that. All you are doing is deducting something that you had to wait a longer time to deduct. This enables you to sell your land cheaper and to sell lots for less.
It is not any rip-off. There is no crime involved. The real estate developers of this country are not all criminals, frauds or crooks-there might be one or two who are not 100 per cent, as there are in every group, but I do not see why they should be attacked as rip-off artists and all the rest just because there is a suggestion that provision should be made to help them to improve their cash flow position in order to lower the cost of developed land.

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John R. Rodriguez: Mr. Chairman, nobody said that they were doing anything illegally. It is fairly obvious that this is legalized pickpocketing.
Since the minister said all of these things, which he has described in this particular clause, have resulted in these people developing land and turning it back to people at reasonable costs, has his department done any study to see if that is happening, that land is coming into production in terms of house building at reasonable costs? All indications are that they have gone out of sight. For example, in the municipality of Toronto you cannot get a house under $70,000. Even in an area like my own, you do not touch a home for under $55,000. How can a person making $13,000 a year afford to own a home in Canada? Yet, we find that that is still one of the great incentives in this country of ours, that home ownership is still very attractive to Canadians. If that is not doing what it is supposed to do, then all we are doing is allowing legalized pickpocketing of Canadian taxpayers as a whole.


John Carnell Crosbie: Mr. Chairman, as far as I know the Department of Finance has done no additional studies on this. A study was done by a federal-provincial task force headed by Mr. Greenspan, a Toronto lawyer who is very familiar with the real estate business. He studied this question, and it is his recommendation. So the hon. gentleman can relax. Everything is all right. There was a royal commission study and a report made. I do not think he needs to worry himself any more about it. Let us get this provision passed so the hon. gentleman will not have indigestion.


John R. Rodriguez: Mr. Chairman, I think the minister has said it there is nothing like getting Mr. Greenspan, a man who is a friend of the developers, to do the study. It is like giving the Avon route here in Kanata to the son of Sam. It seems to me that is exactly the kind of thing that concerns us on this side of the House. Since developers have been operating under this particular clause, has the minister studied the effect this clause has had on the housing market? In effect, is it doing the things that Mr. Greenspan said it would do for his friends?


John Carnell Crosbie: Mr. Chairman, we have done no studies. If the House passes this provision then we will certainly be keeping an eye on it to see whether it is effective or not, and what the results of it are.


Svend Johannes Robinson: Mr. Chairman, I have a couple of questions for the minister. It is interesting to note that the minister is taking his advice from Liberal economists who are friends of the real estate industry.
I spoke earlier about the question of tax expenditures. Can the minister tell this House whether he feels the $30 million which this program will be costing the people of Canada is best spent in this assistance to land developers, or does he think that perhaps the $30 million would not be better spent, for example, in making retroactive the provisions for spouse's allowance, for assisting the fishermen of Newfoundland, or perhaps assisting in defraying the costs of urban rapid transit?
I ask the minister to confirm to this House that it is his view

that this assistance to developers takes a higher priority than that particular aid?


John Carnell Crosbie: Mr. Chairman, that has all the appearance of a loaded question to me. I think there are many, many thousands of demands upon the revenue of Canada. If I had my way 1 would like to see billions upon billions spent on the needs and requirements of the fishermen of Newfoundland. If I had no one else to bother me, that is where all the money would be going. We would be putting it right into Newfoundland and forgetting the rest of the country. The first priority would be St. John's West; second, the province of Newfoundland, and after that the rest of you. That is, if I did not have to consider anything else and if I could only consider the real priority. But there are thousands of other priorities. One is metropolitan areas, and land development in metropolitan areas, urban areas, and land development across the country.
All the industries we have in this country have to be considered along with the co-operatives, the credit societies and the unions. The whole mosaic has to be considered in our taxation system. In a budget of $52,600 million-and there would be a lot more if we included the tax expenditures but I do not have the figure ready tonight-we would have to add on another $8 billion to $10 billion in tax expenditures. As a result of this particular provision, $25 million to $30 million is the amount by which federal revenues would be reduced in 1979-80. That revenue would have been lost eventually under the present system. This is only to help improve the cash flow of the land developer.
Whenever you ask should "X" have priority over "Y", I can think of a lot of "Y's" that I would like to see have priority over this, but it is a balanced taxed system and it has to be a balanced government. There are a whole lot of provisions in this tax act, and you can ask me the same questions, but everytime I will tell you I think it should be spent on the fishermen, that this would have top priority for them. However, my views cannot carry the day. We have to have a balanced system.


Svend Johannes Robinson: Mr. Chairman, would the minister please indicate again, and I will ask the question again because it was not answered, whether he is prepared to agree that instead of giving $30 million to assist land developers, he is prepared to put this money into programs that would make the spouse's allowance retroactive?


John Carnell Crosbie: Mr. Chairman, I thought I had just answered the question. If I have not answered the question, I apologize to the hon. gentleman. But no, I do not think it should go into retroactive payments of the spouse's allowance. I do not think it should go into retroactive payments of salaries for members of this House, or into doubling of salaries. I do not think it should go into anything else. I think it should be exactly where it is in this bill and, if we pass it, this revised treatment will reduce our revenues. We are not spending the money. It will reduce the revenues we take in by $25 million to $30 million in an attempt to help the development of land throughout Canada. Therefore, lots will cost less and developers will be
October 30, 1979

encouraged. They will get the same treatment as in the United States, and we will carry out the recommendations of a royal commission report.


Svend Johannes Robinson: One final question, Mr. Chairman. This question was asked previously in another fashion. Can the minister tell us what evidence, if any, he has that this money which is being forgone, the $30 million, will produce the effect he says it will produce? What evidence does the minister have for that?


John Carnell Crosbie: Only time will tell.


Svend Johannes Robinson: Is the minister prepared to answer the question?


John Carnell Crosbie: Mr. Chairman, only time will tell.


Bob Rae: Mr. Chairman, I think there is a legitimate philosophical difference of opinion between the minister and this party.


Some hon. Members:: Hear, hear!


Walter David Baker: We agree.


Bob Rae: I hear from the intelligentsia on the other side that 1 am right. That difference is very important.
In the development industry, the picture in the minds of members opposite is obviously of a highly competitive industry which needs to be assisted in terms of cash flow, and recommends the assistance of the government and taxpayers of Canada. It is very clear from studies commissioned by Canada Mortgage and Housing Corporation that the facts are quite the reverse. The question is very' fundamental-whether we give $60 million to Ford to set up a factory in Windsor, whether we give substantial sums of money in super depletion allowances to the oil industry, or whether we give speedy, exaggerated depreciation of capital cost allowances such as we are doing in the development industry.
There is a very legitimate difference of opinion on this side of the House. We say this is a very lousy way to spend public money. If we are to have a free enterprise system, let's put a little freedom back into it. Let's get you free enterprisers out of the public trough. Let's see the freedom put back in the system. Let's see that initiative and urge to provide for the competitive system.
We do not see that. We see a highly concentrated, highly oligopolistic system with a few large companies controlling more and more, whether it be land, automobiles, oil or whatever. We see those same companies coming back to the government saying, "Give us another handout, another favour, another $30 million, another $60 million, another speed-up of our depreciation.'' They want to wipe out their costs in two years. They do not want to pay more taxes.
We are hammering this. The minister can shake his head and others can say this is ideological clap-trap. We are not
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being ideological. We are looking at this increasing concentration in our society and looking at these large economic units, whether or not they have a personality, as the hon. member for Saint-Henri-Westmount, who gave us a learned discourse on corporate personality this afternoon, said. I do not care if they have a personality or not. All I know is that our tax system is being pillaged by these people.
This is a legitimate question which we will raise in this and other instances. We will insist that it be brought to the attention of the people. We will not allow the bill to go through without it being brought to their attention. If we believe in freedom of information, some of this information should come out. The Canadian people should decide whether we want to have doctors and lawyers putting money into development and not paying taxes. That is a very important question.
We want to have information on the development industry, how it works and where it goes. We are perfectly entitled to have that. With great respect to the minister, we have a different point of view. Our point of view is that it is increasingly senseless for the tax system of this country to be used to subsidize those people who should be able to stand on their own two feet. I used to think there were people in the Conservative party who had that same view, but they do not seem to be around any more. The doctrine of corporate welfare seems to have taken over from the doctrine of free enterprise.


John Carnell Crosbie: Mr. Chairman, 1 see nothing wrong with the hon. member having his point of view, or his party having a point of view. This is good. Let us get it on the record. You are against the real estate developers being given any kind of break at all in order to lower the costs of their land. You are against them being allowed to deduct their costs in the year they incur them. They have interest costs. They pay taxes. Why should they not be allowed to deduct those costs in the year in which they incur them? It would help their cash flow. They would be able to buy raw land, develop that land and bring lots on to the market. 1 understand you are against that.
I am in favour of you bringing out these points so that we and everyone else will know where we are opposed and where we disagree. I congratulate you for doing that. I understand your position exactly. In this case you are not correct, but it is a legitimate difference.


Mr. Rose:: For the edification of the minister, and for clarification as far as this party is concerned, we are not ignorant of the fact that land costs need to be lowered. What we are concerned about is that despite the gifts out of the public treasury to a fat cat group of developers, we have seen no evidence that the cost of land has been lowered over the years as a result of this.
Large developers control most of the land around our major cities. Viable farmland is constantly being threatened. These are among the most profitable corporations in our country, so profitable that they have money to invest outside our country, yet this government and the members of the official opposition are constantly rushing around in almost feverish disarray to

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give them more tax benefits. That is what we find unacceptable.
We are not against lowering the cost of land. The minister has already admitted he has no evidence, although he claims this might bring down the cost of land.
I see the government whip. Ele is making all kinds of rude, obscene gestures as he waddles his way back and forth behind the curtains. Has he ever stood up in this place and made one knowledgeable comment? Not since I have been here, and 1 have been here as long as he.
What we are concerned about is not whether the government gives the real estate industry some $30 million as a gift for past favours or whatever, but does it or does it not lower the cost of land in this country? Will the purchaser of land receive a direct benefit from this? If the minister can assure us of that, we will be very pleased to vote for this clause.


John Carnell Crosbie: In my opinion, Mr. Chairman, the man or woman who purchases the land will have a benefit from this. It is not just for the developer. It will help development and those who buy lots. That is our opinion. We will have to wait and see if it has that effect.


David Orlikow: Mr. Chairman, I find it interesting that the minister continues to tell us the developers need this extra benefit or incentive in order to operate; that they need to improve their cash flow. We are told they are paying their fair share of taxes.
After we started discussion on this clause, I walked over to the Parliamentary Library to get a book which 1 would recommend to the minister, entitled "The Developers", by James Lorimer. I want to put on record some of the facts this author obtained from public records that are available. Let me refer to some paragraphs in this book. Mr. Lorimer said, and I quote:
-developers who own income properties are able to avoid paying corporate tax on the profits they make in all the various aspects of the land development business.
They do this precisely through the kind of proposal we find in the bill we are discussing. Mr. Lorimer goes on to illustrate what he means in the following way. He says:
Following its own prescription, Daon-
That's one of the big land developers around the city,
declared profits of $21,558,000 in 1977. It paid no corporate tax at all on these profits. Cadillac Fairview declared profits of $31.5 million in 1977 and paid taxes totalling $1.7 million, an effective rate of tax of about 6 per cent. On declared profits of $8.6 million in 1976, Trizec paid a minuscule $130,000 in tax.
He says:
Since it was established, the land development business has benefited from an arrangement that means that most developers do not now and never have paid substantial amounts of corporate tax on their profits. The actual rate of tax paid by the industry over all is much less than 10 per cent, probably 5 to 6 per cent. Most other industries, of course, pay corporate tax on profits in the range of 40 to 50 per cent.

That is precisely the point we are trying to make. Nobody in this party calls the developers criminals, as the minister tried to imply a few moments ago. The developers are doing only what they are permitted to do under the law, and if we have governments which are stupid enough to permit them to pay corporate tax of less than 10 per cent, then, of course, they are going to take advantage of the laws we pass. And going to a lawyer who was appointed by another party when it was in power, going to a lawyer who has intimate connections with the real estate and development industry, seems to me the last place to which a government should turn for advice, not the first place. It is like inviting a fox into a chicken coop and asking him to protect the chickens.
Mr. Lorimer goes on to give a few more illustrations. I should like to put part of what he says on record.
Daon is one developer that reports both its operating profit and its appraisal surplus profit every year. In 1973, Daon reported that it had accumulated appraisal surplus profits totalling $17 million. In 1974, the figure was $21 million, up $4 million in the year. By 1976, the amount was $55 to $60 million, an appraisal surplus profit of about $35 million in two years. In 1977 it was $126 million meaning an appraisal surplus profit of an amazing $66 million that year. Daon's operating profit in 1977, for comparison, was $21.5 million.
The same would be true of Trizec and Genstar and all the other financial wizards who have entered the housing development market and who are making their profit, taking it out of the hide of the ordinary citizen who is trying very hard to do the things he is told every day on the radio, on television and in the newspapers, that he should do-buy a decent, comfortable house for himself and his family.
Keep in mind what the developer does. He goes to the suburbs, he goes to the farmland around a city. I can speak with some personal experience of this, because while Winnipeg has not grown as much as Toronto, Vancouver, Calgary or Edmonton, I know that about a quarter or a third of the people living in houses in my constituency were not there when I was first elected. There were no houses; there were empty fields. There were farmlands there when I was first elected, and that is not so long ago.
Mr. Lorimer calculates that the developer who buys the raw land and puts in the sewers, the water and so on, is making a profit in most cities in Canada of about $20,000 on each lot by the time he sells. Who is paying that money? It is the home purchaser who has to pay-anywhere from $60,000 for a moderately priced home in most Canadian cities to $80,000 or $90,000 or $100,000.
People are putting themselves into debt for their whole lives because of the high cost of housing, and one of the major factors in the high cost of housing in this country is the developer. The developers have done very well, thank you; they have been treated very generously by the people and the governments of Canada. Yet we find the minister coming to this House today and telling us: we have to try to persuade them to do a little more so we are going to give them another tax concession, another $20 million. I say to him that this will not show up in the cost of housing because it has probably been 20 years since there was a year in which a house did not
October 30, 1979

cost between 5 per cent and 10 per cent more than it cost in the previous year.
The minister is compounding the mistakes of former ministers. He is following in the footsteps of former governments. We in the New Democratic Party are not surprised, because we have always felt there is no difference between the Liberals and the Conservatives; the minister is merely demonstrating in this clause that we are correct. What he is saying is that we ought to give more concessions to people who have already done very well. We believe there are better ways, more direct ways, of providing housing for people at prices they can afford than by giving further, and unnecessary, concessions to developers.


John Carnell Crosbie: The hon. gentleman cited as his authority Mr. Lorimer. I seem to have heard his name before; I think he belongs in the pantheon of NDP saints and it is therefore no more apt for him to call on Mr. Lorimer as his authority than it would be for me or the former minister of finance to call on Mr. Greenspan-it is one man's opinions against another's, it is one study against another. All 1 can say to the hon. member is that he has made the point he wants to make well, but we just don't happen to agree with him.


David Orlikow: I do not want to prolong this debate, but 1 say to the minister that he and 1 may, of course, disagree as to the conclusion we draw from factual material-the hon. gentleman will undoubtedly disagree with Mr. Lorimer about what we ought to do. But the figures 1 quoted from Mr. Lorimer's book were obtained from official records of the companies concerned, annual reports which the companies publish showing the profits they make, the taxes they paid, the surpluses, the undistributed reserves, and so on.
If the minister wants to disagree with Mr. Lorimer or with the conclusions we draw, that is quite legitimate, but I do not think he should suggest that the figures 1 have cited are not based on the facts. The figures I used and which I cited from Mr. Lorimer's book are based on the records the companies have made public.


Rodney Edward Murphy: Mr. Chairman, from what 1 have heard so far, I understand that the minister does not like to hear from experts, whether they be Liberal or people who support my party. Perhaps I can give the minister a concrete example of how he can do something to help lower the cost of housing. Maybe I can use an example in the city of Thompson. The minister should know that city well because in April of 1978 he went there and gave a good nominating speech for the incumbent Conservative candidate. Over at Government House the other night 1 thanked the minister for that speech because I think it gave me at least 3,000 votes.


Stanley Howard Knowles: Was that the pussycat speech?


Rodney Edward Murphy: That was the pussycat speech, a very famous speech.
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Since the minister knows the city of Thompson so well, he should also know that there is land banking in that city. We have had it ever since the city became a city. As a result, two years ago, in the face of all the cost of developing a lot in the north we were in a position to sell our lots for $8,700. Try to do that in other cities. Try to do it where the government is giving developers all this money. It cannot be done.
Do not bring in Liberal policies. Do not bring in policies which are just as bad as Liberal policies. Bring in something new, something which has been tried in such places as Thompson. Do something for the people of this country. Do not give us a bunch of boloney. 1 would not use the words of the hon. member for Nickel Belt. Give us the truth, something we can really use to lower the price of houses.


Herbert Eser (Herb) Gray: Mr. Chairman, the minister has pointed out that the provision we are now discussing is in this bill to permit the deduction of interest and property taxes on land held for development or resale by taxpayers in the ordinary course of their business. 1 would be interested in knowing just how much these interest expenses will be increasing in the next year because of the higher interest rates which have come into effect since the Conservative government took office and, as a result, what the additional revenues lost to the federal government will be because of the higher deductions which will be claimed by developers because of these higher interest costs.


John Carnell Crosbie: Mr. Chairman, if the hon. gentleman would ask the hon. member for Saint-Maurice what those figures were when he was minister of finance and when he was originating this bill-and interest rates went up 3.25 per cent during 1978-I dare say he would find that the figures would come out about the same because interest rates have gone up 3.25 per cent in 1979 just as they went up in 1978 when the hon. gentleman was in my position. 1 think the hon. member should be able to get that information quite easily.
With respect to the suggestion of the hon. member for Churchill, the purpose of this change, which was recommended by the Greenspan task force and which caused this change in the law making the law as it was before, was to help the small developer. This is a provision which is to help small developers in Canada, not large developers. Large developers do not need any help. They already have ample cash flow. They can already do very well. This is a provision to help hundreds and hundreds of small developers in Canada get the cash flow necessary to carry on their businesses. If hon. gentlemen are against the small developer, they should vote against this provision.
If hon. gentlemen are against this provision, let us have a vote on the matter and settle it one way or the other. We believe it is necessary and legitimate and that it will help the small developers of Canada.


Herbert Eser (Herb) Gray: Mr. Chairman, is the minister telling us that he does not have figures he can give us at this time regarding the revenue lost to the government which will be created by the increase in interest rates since his government took office? It is

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Income Tax Act
not enough to tell us what happened before the election. Let us hear what has happened since the minister took office. That is what we have to talk about now.


John Carnell Crosbie: Mr. Chairman, I do not have the figure. How could I possibly know how much real estate development there will be this year, how much activity there is going to be, what loans are going to be like, what property taxes they have to pay, or how much they are going to have to pay in interest? If interest rates have gone up, and we know they have, presumably their interest costs will be a bit higher, and the figure here might not be $25 million to $30 million. It might be a bit more; I have no way of knowing.
I am not a fortune teller, so 1 cannot answer that question, as the hon. member knows. He thinks he is making some clever point about interest rates. He knows that interest rates have gone up because we have no reasonable alternative. He has not been able to suggest a reasonable alternative, so what is the point of his question? The point of his question is that the hon. gentleman thinks it is smart. Well, fine. If he thinks it is smart, he has made his point.


Herbert Eser (Herb) Gray: Mr. Chairman, there is a reasonable alternative. It is the one which was presented by his leader on March 2 when he spoke as leader of the Progressive Conservative Party. He said that a Progressive Conservative government would bring interest rates down. I suggest that the Minister of Finance and the Prime Minister ought to get together. I think they are both in the inner cabinet; or have we missed something? Is the Minister of Finance no longer in the inner cabinet? Surely the officials in the department at the time this budget was presented made some forecasts of the revenue effects. It is my understanding that they do that with respect to all proposals in a budget. Surely it is possible to update those forecasts. Can the minister not give us the information?


John Carnell Crosbie: Mr. Chairman, the estimate which was prepared by the department is that it might cost $25 million to $30 million, and I think that is still a good estimate, despite the increases in interest rates. So, I stick by the estimate, $25 million to $30 million.


Herbert Eser (Herb) Gray: Mr. Chairman, I just want to note that while the minister wishes to stick by that estimate, 1 am sure that some elementary calculation by his officials will show that the revenue lost to the Canadian taxpayer will go up substantially because of the interest rate increases which have gone into effect since the minister became Minister of Finance.


John R. Rodriguez: Mr. Chairman, first I must comment on the arrogance of the Minister of Finance. 1 know that that was the favourite tune hon. members opposite sang when they were in opposition. They sang about the arrogance of the government across the way at that time, yet I find the minister's attitude arrogant and disinterested. He asks us to get on with it, pass the thing and "Let's go". He tells us not to enter into any meaningful discussion about the implications of this $30 million handout. 1 think that is very important to keep in mind.

When the Minister of Finance sat on the opposition benches and as he, the happy hacker, and a few others, were official critics of the finance portfolio, they all condemned this budget when it was presented. They even introduced motions of non-confidence. Now the minister is responsible for the finances of this country, and he starts off by saying he wants to be known as Mr. Tough Guy and no more Mr. Nice Guy. This is his first chance to be the Mr. Tough Guy who is concerned about the shekels of this country. Why does he not say to his corporate friends in the development world that they cannot have this $30 million and that it is not in Canada's best interests at the moment? We have a stagnant housing market because of interest rates. Therefore, in effect, we should not be giving the minister's corporate friends something we cannot afford at this time. When the minister gets tough with little people, he has some credibility.
I want to call a spade a spade. We know well that the real estate developers in the city of Toronto wasted considerable amounts of money for the Tory campaign in the last federal election. In effect, that is where that interest lies.
It is not that the minister thinks that for eight months the government went on the old budget and he feels morally committed to continue it. Good heavens, the Conservatives waged a whole campaign against unemployment insurance changes. They were down in eastern Canada arguing against the Liberal government's changes in Bill C-14. When they came to power, the first thing the Conservatives did was to allow the changes to go into effect. How can that be called credibility? How can we say that the Canadian people should not look at this House of Commons as a pile of hypocrisy? The minister has the reins of power in his hands. He can be Mr. Tough Guy with Trizec. The minister says this is for little developers. How can we separate the little developers from the big developers?


Bob Rae: With a crowbar.


John R. Rodriguez: My colleague, the hon. member for Broad-view-Greenwood, says, "With a crowbar".


An hon. Member:: You can't pry them apart.


John R. Rodriguez: In effect we are getting a concentration of developable land in few hands, and in many parts of this country there is no legislation to protect farmland. There are no laws to ensure that farmland is protected. That is a very important problem, and 1 challenge the Minister of Finance to show how tough he is. There is more than just this $30 million. There is a whole pile of giveaways in this bill which we will be dealing with in Committee of the Whole tonight. I want the minister to live up to the image of Mr. Tough Guy he has cast for himself. I want to see him go to town on these particular giveaways in this budget.


Mr. Foster:: Mr. Chairman, the Minister of Finance indicated that the benefits of this tax concession for developers would go to small developers. I wonder if he is aware of the fact that most of the major oil companies, with the tremendous revenues
October 30, 1979

they have been generating this year in the United States and Canada, are going into housing developments, and whether he has taken that into consideration. Proposals have already been made by the Conservative energy caucus, by the Canadian Petroleum Association, and last evening by the Premier of Alberta, that they want to move energy prices up dramatically. The Premier of Alberta suggested that they go right to world prices this next year.
In the United States, with the rapid increase in energy prices, the oil companies have shown profits of up to 211 per cent over the same quarter in the last year. This is building up as the rapid increase takes place. Is any other consideration being given to the fact that large amounts of these petro revenues will be syphoned off into urban and land development and whether it is really in the best interests of the country to be giving special concessions to oil companies which are generating these huge revenues?
In the third quarter of this year we see that the profits of oil companies have gone up from 38 per cent to 66 per cent for four of the majors. All the argumentation that has been brought forth regarding increased oil revenues is that it is going to be ploughed back into the high Arctic and the frontier areas, and it seems to me that if that is not going to take place we can hardly justify the massive increases in the price of crude oil and products from the refining processes.
I wonder if the minister has taken that into account in putting before the House tonight this special concession for land development, whether an excess profit tax will be brought in if the government goes ahead with the massive increase in the oil price of $3, $4, $7 or $8, as has been suggested by his caucus and by the Premier of Alberta. Can the minister tell us just what has been taken into account in that regard?


John Carnell Crosbie: It is the first time I have heard any suggestion that oil moneys are behind this clause in the bill. This clause originated in the budget of November 16, 1978, which was brought by the hon. member for Saint-Maurice. Whether he had in mind the oil industry at the time he brought it in, whether he had it in mind that oil money was going to go into the real estate development market, I do not know. It has not crossed my mind for one minute that this was a sinister plot for the oil industry to get some tax concessions. I certainly never imagined that.
What it is is that real estate developers up to now were only allowed to deduct the cost of interest on their loans and the cost of property taxes when they had sold the land in question. When they have sold the land in question, they are allowed to deduct these as costs. They have to carry it the rest of the time, so it is an added burden on them. Small real estate developers, as was found by the Greenspan inquiry, had to carry that burden, which interfered with their cash flow. Their business is developing lands and lots for sale, and therefore interest and municipal taxes are a legitimate expense of that business. This clause proposes that those taxes and interest expenses be recognized as ordinary expenses and that they be
Income Tax Act
allowed to deduct them on an annual basis, which would help their cash flow position.
Clause 66 in the bill ensures that the current charges held by speculators be maintained and that they do not benefit from that kind of treatment. If you just bought some land hoping it will go up in value and if you hold on to it for a few years, you will not get this treatment. But if you are in the business of developing real estate, it is legitimate. If you are a speculator, you will not get it.
I know of no evidence or suggestion that this will in any way be of help to the oil and gas industries, or that the revenues will have anything to do with them. This provision is to help the small real estate developer improve his cash flow position. If there is a better way of developing real estate, that is fine. Perhaps hon. gentlemen opposite believe the government should develop it all. They believe in the state doing it. That is an option, but it is not an option we will take. When hon. gentlemen take over, when they get the reins into their hands, the old reins in their paws, they can eliminate the private real estate development industry, do away with it, squash it flat, knock it out, make sure it cannot survive, make sure it has no cash flow, make sure only the state and public agencies have the ability to carry on real estate development. When that time comes, they can do so, but at present for the most part it is in private hands in Canada, and this is a legitimate amendment to help the small real estate developer.
I do not know how much more reasonable I can be about it. If hon. gentlemen opposite want to vote against it, I say, fine, vote against it, and those who want to vote for it, let them vote for it, and those who want to discuss it, let them discuss it. In no way are we trying to force this thing through. We could not do it any way, and therefore it is a dialogue and I am delighted to hear from the hon. gentlemen. I wish I had realized I had the reins in my hand. There are a lot of things I would have done if I had known it then.


Bob Rae: Mr. Chairman, there must have been a reason why, as the minister has told us, the situation has now reverted to the way it was before. Can the minister tell us the reason why the situation was changed and now it has to be brought back? Was there some purpose in the earlier change?


John Carnell Crosbie: 1 cannot tell the hon. member, except that the Liberal administration had it one way before and they changed it to another way. Then they introduced a budget reverting back to the original way. My colleague, the hon. member for Saint-Maurice, is not here to help me with this bill. Where is he when I need his assistance?


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: It's your baby now.


Bob Rae: Has it occurred to the minister that perhaps he is helping more by staying away than by being here?
Obviously we are going to vote against this clause and against clause 6-I do not think it is a secret to the minister- but I want to put the minister on notice that, first of all, we

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Income Tax Act
look forward to intensive study by this government as by the previous government, on the question of inflation in land prices. We look forward with eager anticipation to the minister's coming to this House and telling us what the inflationary developments in land have been over the past years, and we look forward with eager anticipation to his confirming his thesis that he is giving assistance to a highly competitive industry and that the immediate impact of these measures will be to reduce the cost of land to the average Canadian consumer, and of course, this will be reflected to lower housing costs which we can also anticipate as a result of the proposals.
Earlier we had spoken about the nature of the development industry and the concentration in the housing industry. The minister is saying that here he is giving something for the smaller developer. That is not what is happening because there is no selectivity here, and this is the problem with the whole tax spending system. There is no selectivity, no direction of tax dollars, no control over whether this provision will have the effect the minister says he wants it to have. It is going to everybody.
I would be willing to place a moral wager with the minister that the result of this measure will be that the amount of concentration in the development industry will be increased and not decreased, as sure as it snows in the wintertime. If the minister thinks he will increase competition in any industry by giving a tax incentive which applies right across the board, he is dreaming. If he did it in the car industry, he would be laughed out of Detroit, Windsor, Oakville and Oshawa. If he is serious about increasing competition in our society, he would not be serving under a Prime Minister who in a May, 1979, interview in Executive magazine said that competition was not a priority of the Conservative government, that competition was being put on the back burner by his government. It was not something which was causing him a great deal of concern.
I do not think competition is something which gives this government concern at all.
The minister is shedding crocodile tears when he talks about giving help to the small developer. He is not being realistic about the structure of the development industry. He is kidding himself and members of his party if he thinks this will do anything for the little person or the little developer in our society. It will not work that way. I think the minister should realize it.


Rodney Edward Murphy: Mr. Chairman, earlier on in reply to a question the minister referred to the fact that for some reason we wanted government ownership of the land. That is what we were talking about when giving an example of how land can be cheaper in northern cities, even without the type of giveaway the minister is presently presenting. I should like to remind the minister that the mayor of Thompson is a Conservative, that the majority of the council is Conservative. He should know. He met them all. Those people do not want to privatize our land. They know what is a good deal. They do not have to sell everything to private ownership. They want to find good,

cheap land for the people of Thompson. I wish the minister had the same concern here.
In reply to a question which I did not ask, the minister said that he was helping small developers by the presentation being made at this time. Does the minister have the facts at his disposal to prove that this is not another giveaway to large corporations? Can he prove that it will not do what the hon. member for Broadview-Greenwood said? Will it not help to increase the concentration of ownership? Does he know the incomes of the developers who are presently using this giveaway? Does he know what the breakdown is?


Svend Johannes Robinson: Mr. Chairman, I have a question for the minister. He has indicated his concern with the small developer, as he calls him. Can the minister indicate to the committee what proportion of the entire land development industry is made up of what he calls small developers? If the hon. minister is so concerned about small developers and not the big ones, can he indicate whether he is prepared to introduce an amendment to this particular provision so that it will apply only to small developers?


John Carnell Crosbie: Mr. Chairman, this clause stands by itself. What is correct for one developer is correct for another. The people that this will help most are the small developers, because they have more difficult cash flow problems than the few large developers. As to what the respective numbers are, I would have to make an educated guess. I would say there are many thousands of small real estate developers in Canada and that there are a few dozen large developers. That is my guess. I do not have the statistics here. I did not come supplied with them tonight. 1 do not know whether we could even obtain them. There are many thousands of small developers. The large developers would number in the dozens. The numbers do not matter because we are amending the law for all real estate developers so that they can deduct on an annual basis legitimate business expenses for developing their land.


Mr. Fulton:: Mr. Chairman, I have sat here listening with some interest over the past hour or so. A couple of matters popped into my mind. A lot of people in my riding have been without housing for some time. Under neither previous administration or this one, the federal government has not made any distinctive attempt to deal with the housing situation nor with any ongoing income supplements such as unemployment insurance.
Looking back at the comments made by a number of members on the government side and the comments just made by the minister that there are a few thousand developers, why do we not put it in a nutshell so that the Canadian public can understand? Why do we not say that the government is planning to send out cheques to every developer in Canada for $10,000 or $15,000? But the people who need $150 or $160 every two weeks from their unemployment insurance do not get it from the very same government. I think we should deliver the facts to the Canadian public and be quite frank. It is not for small developers. It is not necessarily for big developers. It is for all of them. It is very, very obvious to me
October 30, 1979

that it is patronage. Let us put it in cheque form and mail it from the House today. I think we are quibbling on a clause which should not be passed in a country which is facing economic difficulties.


Svend Johannes Robinson: 1 have a couple of questions which have been opened up by the great concern expressed by the minister for the small developer. What does the minister mean by a small developer? How big is small?


Gérald Laniel: The hon. minister.


Svend Johannes Robinson: The hon. minister is not answering the question.


An hon. Member:: Was that a question?


Svend Johannes Robinson: Since the hon. minister does not seem to know how big is small when he talks about small developers, aside from the numbers involved-and there may be many thousands-what proportion of the development industry in terms of percentage do these so-called small developers actually hold? 1 know in my own constituency of Burnaby over 80 per cent of the development land is controlled by the five big land development companies. What proportion in terms of percentage do these so-called small developers occupy of the land development market?


John Carnell Crosbie: How big is small? How small is big? How big is little? How little is big? The hon. member's guess is as good as mine. We could adopt the definition of small business and say that real estate companies are less than the definition of a small business in the Income Tax Act; that that is a small developer. That would probably be suitable.
1 really do not see the rest of the point of the hon. member. If the hon. gentleman has five big developers in Burnaby or wherever it is, and if he does not have any small ones, that is unfortunate. I am sorry. I know down in Newfoundland we have a lot of small developers. We do not have too many big ones. But we are not as big as British Columbia. We are little. Where British Columbia is big, we are little. Where it is great, we are small. What is small? What is great? The small is greater than the big in my opinion in the province of Newfoundland.


Svend Johannes Robinson: Mr. Chairman, the people of Burnaby will be interested to hear that this proposal does nothing for them, but helps the big developers in Burnaby.
I ask the minister whether he is prepared to limit this particular benefit to small developers, however he defines them? Is the minister's answer "No"? The minister says no.


An hon. Member:: It should be answered for the record.


John R. Rodriguez: Mr. Chairman, I just want to get down to specifics with the minister. Can he name a small developer that would go out of existence if he did not get help from this $30 million handout? Can he name one small developer?
Income Tax Act
1 think the minister said that the developer does not have to sell the property, that he does not have to sell the land in order to enjoy the write-off. Can he confirm that? Will he get it before the sale of the land or after the sale of the land?


John Carnell Crosbie: I cannot name one small developer that will go out of business if this does not pass. No, I am afraid I cannot do that. There are hundreds of people who will get their building lots hopefully at lesser prices if this goes through, because the land developers' costs will be a bit less and the cash flow will be a bit better. I would suspect there would be hundreds, if not thousands, who might be helped to buy lots. Could the hon. member remind me of his second question?


John R. Rodriguez: Do they receive the benefit of this concession after the sale of the land?


John Carnell Crosbie: No, no. That is the purpose of this concession, as the hon. member calls it. The way it works is that these companies are in business. Every year they have their accounts as they have their year endings. Every 12 months they have a financial statement, they have their revenues and their expenses, and each year they have the interest on the inventory of land. They have their tax expenses in relation to that land although they have not sold the land yet, and they would be allowed to deduct that as a present current expense. That is the only difference. Under the present system they can only deduct those kinds of costs as they sell the land out of their inventory. This helps them with the cash flow situation. They would still have this deduction at a point in time. It is just that they get the deduction at an earlier point, as long as they continue to stay in business.
That is the way I understand it to work. Perhaps I am all wrong, but I think that is how it works. All we are doing here would be allowing them to get this deduction earlier than they are now able to get it, unless they are able to turn over their inventory of land every year. Of course, a lot of them are not able to do that and they have it longer than that.


Gérald Laniel: Shall clause 2 carry?


Some hon. Members:: Agreed.


Some hon. Members:: No.
Clause 2 agreed to; yeas 35; nays, 12.
Clauses 3 and 4 agreed to.
On clause 5-


Gérald Laniel: Is the hon. member for Broadview-Green-wood rising on clause 5?


Bob Rae: I am standing in respect of clause 5, Mr. Chairman. Could the minister explain this clause?


John Carnell Crosbie: I will try it once. This section 15 of the act deals with a number of shareholder benefits. This particular amendment affects income bonds and income debentures. It is

October 30, 1979
Income Tax Act
a technical amendment and is not directly related to the major change proposed in the budget in the treatment of those income bonds and term preferred shares dealt with in clause 6. The two subsections that would be affected by this amendment refer to "annual or other periodic amount payable on an income bond". The amendment substitutes the words "interest or dividends" for the expression "annual or other periodic amounts". The change is to clarify the scope of the two subsections. It ensures that only the dividend or the interest and not any repayment of the principal will be treated as a dividend in the hands of the recipient. That is what the change is about.


Stanley Howard Knowles: What does it mean?


John Carnell Crosbie: That's a good question. It is to ensure that you cannot get repayment of the principal, but that you can only get under this section of the act the dividend or the interest, and the repayment of the principal of an income bond or a term preferred share is not treated as interest or dividend.


Bob Rae: I do not want to make a long speech on this subject, Mr. Chairman, but-


An hon. Member:: But I will.


Bob Rae: The hon. member for Saint-Henri-Westmount gave an interesting speech this afternoon, some of which I agreed with and some of which I disagreed with, and the minister commented on the complexity of the Income Tax Act.
I will be quite blunt with the minister. My concern is that this House sitting as a Committee of the Whole is unable to understand what it is passing. The minister reads out of his brief from his officials. I do not blame him for that. If any one of us on this side were in his chair we would be in exactly the same position, but he is unable to explain to the Canadian taxpayer in simple words the meaning of the changes on which we are all voting. I am not prepared for my part, and I cannot speak for any other member of my party, to accept this package. I am very reluctant to say "ready; aye, ready" to a series of amendments that are extremely complex, which can hardly be understood, and even when we read them with the Income Tax Act are almost impossible to comprehend. Many of us do not understand the instruments that are being described.
The average Canadian does not know what a term preferred bond or an income bond is, and does not have a clue as to what they are or precisely what we are voting on. I am not ashamed to profess ignorance, and I think it would be healthy if all members of this House asked; what the hell is this instrument we are talking about and what are we doing here? I think we all might learn something from this exercise. We are going to end up putting in several pages of amendments to the Income Tax without being able to justify to our constituents what we have been doing. I think we owe it to ourselves to have an explanation as to why we are saying "ready; aye, ready" to a bunch of clauses which have gone through the Department of Finance and which have not been sifted through or homoge-

nized by the Minister of Finance. I think we deserve that process of homogenization by him.


John Carnell Crosbie: Mr. Chairman, let me try again to homogenize. The amendment is to replace the expression "an annual or other periodic amount" with the expression "an amount paid as dividend". This has been the wording in this clause, in line with other provisions of the act, and it is to ensure that this subsection does not apply to any repayment of the principal amount of the security. It could be argued, for example, that the annual repayment of principal on a sinking fund issue would constitute "an annual or other periodic amount", and would thus qualify as a dividend. In other words, if this wording is not changed there is a possibility of a mistake in interpretation, and when you pay an annual amount on principal on a sinking fund issue that could be taken to mean "annual or other periodic amount", treated as a dividend and received by another corporation exempt from tax in their hands. The note goes on to suggest that as such a repayment would be exempt from tax in the hands of the corporation, and the corporation would have a loss on the disposal of the income debenture, and this result is clearly unintended. This amendment now before the committee is proposed to do away with the possibility that this unintended effect could occur. It is to clarify this. It is a technical amendment to the act which only lawyers could draft, and I doubt that most of them could even understand it.
Clause 5 agreed to.
On clause 6-


Bob Rae: Mr. Chairman, 1 want to indicate to the minister that, as I said before, we look forward to the evidence, which was so lacking with the Liberal government and which we consistently looked for, to deal with the problem of concentration in the land and housing industry. We needed a series of clear proposals that would deal with the problem of concentration.
The one point the minister made that I want to respond to, Mr. Chairman, is that somehow we are going to march Canada into some totalitarian future, where all Canadians would wear the same clothes, where there would be no diversity and the state would do everything. That is not the point. The point is that some resources, such as land, might be publicly owned-owned by municipalities, by provinces, by co-operatives, and some might be owned privately. We are the party that wants diversity; we are in favour of diversity. All we are saying is that this determination to give everything to the private sector is a guarantee that there will be concentration and not diversity.
It is precisely because we want diversity in the housing industry, because we want things to be owned by the provinces, by the cities, by co-operatives, by trade union co-operatives, by many many different kinds of groups, that we believe there must be an active public sector-an active government. Merely giving a series of tax benefits to private corporations
October 30, 1979

and private developers does not deal with the problem. It will not lower the price of a single piece of land, and it will not be passed on to the Canadian consumer.
There is no free market that is working in the Adam Smith world which seems to inhabit the minds of hon. gentlemen opposite. It does not exist and it is not working.
May 1 call it ten o'clock, Mr. Chairman?


Gérald Laniel: Order, please. It being ten o'clock it is my duty to rise, report progress, and request leave to consider the bill again at the next sitting of the House. Is it agreed?


Some hon. Members:: Agreed.
Progress reported.


BUSINESS OF THE HOUSE
Thomas Lefebvre: On a point of order, Mr. Speaker, I should like to know if the hon. member for Burlington or some other member on the other side of the House could tell us if the government intends to bring forth Bill C-17 again tomorrow and if it will be followed by Bill C-18 and Bill C-3, as appears on today's order paper.


Mr. Kempling:: Mr. Speaker, it is the intention of the government to proceed tomorrow with Bill C-17 in Committee of the Whole. Should that bill be completed we will probably move to Bill C-18. In any event, we will give plenty of notice if we are going to move to Bill C-18. I rather suspect, though, that we will spend the better part of tomorrow on Bill C-17.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Alex Jupp (Mississauga North):: Mr. Speaker, on October 25 I asked a question of the Minister of Transport (Mr. Mazankowski) arising from the southern Ontario multimodal passenger studies. My question related to the possible expansion of the Toronto International Airport and maintenance of the lands at Pickering. I would like to take this opportunity to expand upon my concerns on this matter and the concerns of my constituents in Mississauga North.
The Minister of Transport gave his assurance "that there will be no decision taken on any airport expansion without full consultation with the municipalities involved." I very much
Adjournment Debate
appreciate this assurance, Mr. Speaker, for it is all that my constituents as neighbours of the airport could reasonably expect. We recognize that the ultimate decision on the future role of the present airport must be based largely on the national and the regional interest. All we say is that we wish to have the opportunity to provide input to the decision-making process because, as neighbours, we must live with the consequences of such decisions.
Hon. members will appreciate that living beside Canada's busiest airport is not an unmitigated blessing. Many of the homes in Malton, Cooksville, and Streetsville were built before the airport was located on its present site in 1937. Many others were built within the present airport affected areas of Peel region and Etobicoke before the airport was declared an international airport in 1954.
Last year the Toronto International Airport experienced over 270,000 flights, on an average of about 740 flights per day. For citizens living directly under the flight paths, the environmental damage, particularly in the summer when people are outdoors and windows are open, is more than a simple inconvenience. The noise, especially when only one runway is used for prolonged periods, because of wind conditions, is hazardous both to conversation and one's nerves.
As well, Mr. Speaker, the airport is subject to restricted use during the period from midnight to 7 a.m. However, many people have noticed that these restrictions are honoured more in the breach than is the observance, with the result that their sleep is disturbed.
The major issue of environmental concern, especially to citizens living north and south of the airport, is the possibility of an additional runway. I am pleased, therefore, that the study finds the existing runway system will likely be adequate through to the late 1980s, subject to certain changes in traffic management, procedural measures, and a constraining of general aviation.
The reason that the prospect of a fourth runway is of such concern to these citizens is that the necessary flight paths would affect the homes of some 80,000 people. Many of these citizens have lived in their homes for twenty years and more on the assumption of a certain degree of neighborhood quietude. The construction of a fourth runway in the foreseeable future would be hazardous to their health, to say nothing of my health, and that of my colleagues, the hon. member for Mississauga South (Mr. Blenkarn) and the hon. member for Brampton-Georgetown (Mr. McDermid).
I think it is generally recognized that the question of a third terminal is a different matter. The decision on terminal capacity, as the study reports, can be deferred for a few months. My concern is that the decision be based on the present structural viability of the facilities as they now exist and not be contingent in any way on any additional runway facilities. We appreciate as well that additional terminal requirements will require internal structural changes in parking facilities, baggage handling, ground transportation, and traffic manage-

October 30, 1979
Adjournment Debate
ment. I do not anticipate any serious objections on any such improvements, again as long as they are integrated into the present runway system of the airport.
We in Mississauga North are the first to recognize the vital importance of a viable airport to our community. The airport provides direct employment to 12,000 of our citizens, and secondary employment to many more thousands. As well, many citizens have chosen to live where they do because of proximity to the airport, and others work for companies that are located in Mississauga because of the location of the airport. The Toronto International Airport is important, therefore, to the economic well-being of Mississauga. We are also conscious of the technological improvements in each generation of aircraft, which have resulted in less noisy aircraft engines. Aircraft design engineers forecast even quieter aircraft in the future. It is against these considerations, Mr. Speaker, which we hope the future decision on the airport will be weighed.
In conclusion, I would like to say a few words about the lands at Pickering. I am delighted that the study recommends maintenance of these lands to protect the long-range option of developing a major airport at Pickering. The justification of the former government for the selection of Pickering is a decision which is now very open to question, when one considers the allegations by Walter Stewart in his book "Paper Juggernaut: Big Government Gone Mad". Nonetheless, the taxpayers now have an investment of over $110 million in the lands at Pickering. It is imperative that the long-range options, which Pickering provides to the Ministry of Transport, not be jeopardized. Whatever is done with the lands over the next several years, whether they be used for agricultural or park purposes, it is important that those options be kept open for the future.
To sum up, Mr. Speaker, I applaud the preparedness of the Minister of Transport to seek out a suitable vehicle whereby local consultation can take place. We do not need any more studies on our transportation in southern Ontario. The walls of the ministry are white with studies undertaken by the previous government. What we now need is dialogue, consultation, and then decisions to be followed by actions based on the long-term interests of the country, the region and the affected communities.


Mr. Otto Jelinek (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I share some of the concerns expressed by the hon. member for Mississauga North (Mr. Jupp). Let me first provide some background information regarding the discussion paper jointly released by the Minister of Transport (Mr. Mazankowski) and the minister of transportation and communications of Ontario.
This paper, called "Southern Ontario Multimodal Passenger Studies", was released to the public on October 15. What I would like to emphasize here is that, first, we have completed a joint study with the province to produce this paper, thus assuring their very valuable participation from the start and

their concurrence with the method used to arrive at decisions in the future. With the province, we have insisted that the paper be released publicly so that all interested parties, whether they be municipal authorities, other government groups, representatives of road, rail or air transportation interests, the academic community, or whatever, be given ample time to review the studies and submit comments. This process has been under way since October 15. I want to be sure everyone interested has had a chance to voice their view, and that this view has been taken into account in the decision-making process.
In this regard, the minister will be announcing in the very near future the make-up of a vehicle which will allow all interested parties, be they municipalities, citizens groups, etc., to be heard and express their views.
This brings me to a very important aspect of the work to date. I am sure we all realize that there are many expenditure options to consider inproviding a passenger transportation system in southern Ontario, including large or small improvements in every mode. It seems to me that we should, as the studies to date suggest, look carefully first at how we can maximize the use of existing facilities to foster fiscal restraint as much as possible, something the previous government ignored, to say the least. We must at the same time keep our eyes on other objectives like conserving energy, encouraging economic development, and protecting the environment. Some of these objectives conflict. However, I am certain that it is wise to retain as much flexibility as possible with respect to the type and timing of transportation expenditures. That is why the Minister of Transport hesitates to throw out any options until full consultation is achieved. The minister wants to be sure every mode of transport is given a fair, effective and efficient role.
I can assure the House and the hon. member that we will not give up any short or long-term option until we, with the province, along with the municipalities and other interested groups, have evaluated the consequences of such a decision and come up with the best course of action.
The Minister of Transport has been assured that no major decision need be taken regarding the Malton facilities or Pickering land for six to 12 months. Within that time we are providing for the public consultation process mentioned earlier, the evaluation of comments, review and updating most recent forecasts of traffic, a closer look at cost of various incremental improvements in corridor rail, bus, STOL, etc.
I might add, Mr. Speaker, that the various options for the future management of Pickering lands are being analysed and the results of the analysis will form part of the decision-making process.


The Acting Speaker (Mr. Scott, Victoria-Haliburton):: Order, please.
October 30, 1979


INTERNATIONAL TRADE-POSSIBLE MOVE OF CANADIAN EMBASSY FROM TEL AVIV TO JERUSALEM-EFFECT ON TRADE
Maurice Brydon Foster: Mr. Speaker, last Wednesday I put a question to the Minister of State for International Trade (Mr. Wilson) on whether the estimate which had been made recently by some experts as to the amount of trade opportunities which had been lost due to the government s plan to move the Canadian embassy in Israel from Tel Aviv to Jerusalem actually amounted to some $5 billion. The minister indicated at that time he was not able to respond precisely to that estimate. I hope he will be able to do so tonight.
He went on in the course of the discussion that day to indicate that there were no studies of a general nature which he could make available to the House-no such studies had been done. I found that strange because that was the day on which we were starting to debate the freedom of information bill and I thought that since it was being introduced he would surely want to make those studies available. If they were not available it seems incredible we would have this situation where billions of dollars worth of trade opportunities were being lost to Canadian businessmen and the department had not carried out studies. I hope the minister will be tabling those studies tonight, knowing full well that eventually we will have the freedom of information bill and that they will be available at that time in any event.
It was interesting that two days later the hon. member for Ottawa-Carleton (Mr. Pepin) suggested to the Secretary of State for External Affairs (Miss MacDonald) that perhaps the question of the foreign policy review of the Middle East situation could be separated from the question of the location of the Canadian embassy in Israel. The minister indicated that this could not be done because Mr. Stanfield had to complete his study, he had to travel across the country and engage in further consultations and finally make a recommendation. But yesterday the Prime Minister (Mr. Clark) did another flip-flop and announced he would be doing exactly what the member for Ottawa-Carleton had recommended, that is, dividing the two questions, with Mr. Stanfield making his report in January on foreign policy review, and the embassy staying in Tel Aviv.
I think we should look back over that sorry four months of confusion and loss of sales to Middle East countries. Back on April 13, 1978, the hon. member for Rocky Mountain as he was at that time, said:
In this country we have companies like Atco which have succeeded in this kind of world market despite the obstacles that governments have put in their way. We would get behind more Canadian companies that have the experience and expertise to serve these markets.
It is incredible how they have got behind Atco, for instance, because they have been sitting with a potential sale to the Middle East worth some $10 million. That deal has been in limbo for the past four months. If that is the way the Prime Minister is getting behind a company, we certainly would not want him to get any closer to them.
Adjournment Debate
It seems to me that what we have to concern ourselves with now is how long term the effects will be. We know that Iraq has an embargo against oil coming into Canada which varies between 15,000 and 30,000 barrels a day. We know that a company in British Columbia, Zenith Steel Fabricators, announced over the weekend that it had lost a $43 million order from one of the Middle East countries. Will those sales be retrieved? We know that Bell had a $3.5 billion order with Erickson and Phillips, and we know that Erickson and Phillips have been asked to extend the contract but Bell has not. All these questions will be answered in the long run, but when we have a government which is facing a $7 billion deficit this year in foreign trade and a suggested $10 billion deficit next year, surely this is a very sorry record for a government which came to power saying it was going to help private enterprise, to help business.
We have a minister of trade who was too late going to the Argentine to get that contract for $1.8 billion for Canadian industry. Now he has to start to try to recoup this estimated loss of $5 billion worth of trade with the Middle East, and we will be very interested and hoping that he will be successful in that, because it means a lot to Canadians in terms of exports, dollars, and jobs.


Hon. Michael Wilson (Minister of State for International Trade):: Mr. Speaker, I appreciate very much the advice and information the House has been provided by the hon. member. Let me just comment briefly on the trade picture with which we are faced today. This did not happen just over night. This is something which has been developing over a long period of time, and it must be stopped right now. That is one of the reasons this government has identified one person to work solely on the problem of our trade picture.
Let me first get to the specific question the hon. member raised. I said at the time he asked his question, and I say again, that no over-all studies of this particular aspect of the movement of the embassy to Jerusalem have been undertaken. There have been summaries of conversations by me and by officials in the department on the particular experiences of people in the Middle East, of contracts that they are working on and of the relationships we have with Arab clients. These are confidential matters. They are confidential statements. I said that I do not propose to make them public, and I say it again. These are confidential, and if we make these studies public we are not going to receive the benefit of the information these people gain in their work in the Middle East.
1 would like to dispute the statements the hon. member made in connection with lost business. During the course of the period since the early part of June when the statement was made by the Prime Minister (Mr. Clark), we have had the summer months. There have been two holiday periods in the Arab countries. As a result, not a lot of business was done over there, so it is fortuitous that this happened at that time, but it is also a fact of life.

October 30, 1979
Adjournment Debate
I might point out that during the course of this period business has been going on. Contracts have been signed. Merchandise exports to Saudi Arabia in August totalled $11.5 million; to Algeria, $15.5 million; to Libya, $2 million; to Egypt, $3.2 million; to Kuwait, $1.1 million; to Iraq, $9.1 million; and so on. So, business is being done and will continue to be done with that part of the world.
I am confident that the businessmen of this country will move quickly to secure the business that they have been negotiating over the past few months. Negotiations have been continuing, and I am confident that they will move quickly and recover any ground which might have been lost during that period.
The hon. member mentioned ATCO-


The Acting Speaker (Mr. Scott, Victoria-Haliburton):: Order, please. I regret to interrupt the hon. minister, but his time has expired.
[ Translation]


TRANSPORT-WILL GOVERNMENT GIVE PRIORITY TO IMPROVEMENT OF SERVICE BETWEEN MONTREAL AND MIRABEL
Mr. Marcel Roy (Laval):: Mr. Speaker, last Wednesday I asked the Minister of Supply and Services (Mr. La Salle) whether the government would give priority to the improvement of ground transportation between Mirabel and Montreal when he meets with his Quebec colleagues on November 5 next. I mentioned, Mr. Speaker, that this matter was an urgent and necessary priority and that the construction of a public transit system between Mirabel and Montreal would provide jobs.
The minister explained to me that there were other projects among his priorities but some Liberals considered rapid transit between Mirabel and Montreal more important than Place Guy Favreau. I am one of those who have always advocated public interest in that area rather than the other project.
At any rate, I would repeat for the benefit of hon. members that we want to hear the recommendations and submissions of the Quebec government, after which we will decide.
Mr. Speaker, this answer concerns me due to the indifference shown by the PQ government and during the time allotted to me I will try to show why I am concerned about the outcome of the project to make Mirabel airport a profitable operation.
Mr. Speaker, if I may 1 will refer to a statement made by municipal affairs minister Tardif, in an item published in the newspaper La Presse, who is in favour of a subway line to Laval rather than a metropolitan express system. Lie points out that the Quebec government has already done its part to connect the two airports efficiently. Mr. Tardif is of the opinion that the central government must assume responsibility for the metropolitan express system if it feels that it is a

priority. So we see exactly the attitude of the Parti Quebecois government and how indifferent it is to this project.
I have here in my hand the official report of the Debates of the National Assembly of April 27, 1977, when transport minister Lucien Lessard mentions it once again, and I quote;
It should also be remembered that it is up to the Department of Transport of the federal government to make Mirabel profitable.
Once again mention is made of the lack of interest on the part of the Quebec government in making the metropolitan express system a profitable undertaking.
Mr. Speaker, another attitude worries me even more, considering the situation in the byelection in Prevost, where the Liberal candidate, Mrs. Solange Chaput-Rolland, gave priority in her program to the development of the Mirabel airport and specifically the metropolitan express system while the PQ candidate, Mr. Harvey, was again totally indifferent to its importance.
It is a matter of showing how one must never get discouraged. You have to persist and persevere when you are in earnest about as important a matter as that on the development of the Mirabel airport. I have here, Mr. Speaker, letters dated December 11, 1974, from the Chamber of Commerce of Ville-de-Laval, asking me to continue my efforts toward achieving that objective; so I am speaking here of something that goes back five years.
I have in front of me another letter from the joint commission on urban development for Sainte-Therese centre, and this was done in co-operation with my colleagues in the region. First, the hon. members for Terrebonne (Mr. Comtois), Labelle (Mr. Dupras), and Duvernay (Mr. Demers), and myself have tried to meet with the aldermen, the city councillors, the mayors, in order to gain their support to develop this project. 1 have received a resolution from the joint commission on urban development, dated May 13, 1977, supporting hon. members' action concerning the development of this type of road transportation system.
I have here another resolution which says that Mirabel affords Montreal the opportunity to remain one of Canada's large urban centres, and which comes from eight executive presidents of the Trucking Association of Quebec Inc.; it also supports fully the development of this means of transportation between Mirabel and Montreal. I have still another resolution from the Mirabel Chamber of Commerce dated June 20, 1977, supporting this project, by unanimous approval of its members. And there is support from Rosemere, Sainte-Therese and Blainville which are all in favour of developing this metropolitan express system as a way of stopping the accumulation of huge deficits for this airport.
Here is more evidence, Mr. Speaker, and not the least; it is a statement made by the minister, Mr. Mailloux, at a weekly
October 30, 1979

luncheon at the Chamber of Commerce of Montreal which says, and I quote:
Mr. Mailloux indicated that the government of Quebec-
-the Liberal government of the time-
-expressed its general agreement with the principle of building a rapid transit system between Montreal and Mirabel, according to the main lines of the report, provided there is adequate financial participation from the various levels of governments.
Mr. Speaker, on December 5, in Montreal, the Liberal caucus of the area of Montreal met with the executive of the city of Montreal. At this joint meeting which had been organized by my colleague the hon. member for Terrebonne and myself, Mayor Drapeau emphasized for cabinet members as well as ordinary members the necessity to build a metropolitan express system to develop Mirabel airport. In view of all these testimonies, Mr. Speaker, and the indifference of the PQ government, I feel that this project should be given top priority in order to limit the deficit of the Mirabel operation. I feel also that the Minister of Supply and Services, who represents a constituency north of Montreal, should support the efforts of his colleagues of the former government to develop Mirabel airport. If the minister remains indifferent to this request, Mr. Speaker, I am sure that the voters will not soon forget it.


Otto John Jelinek: Mr. Speaker, although the hon. member directed his original question to the Minister of Supply and Services (Mr. La Salle), it concerns transport and that is why I am taking the liberty as Parliamentary Secretary to the Minister of Transport to reply to the hon. member. I am surprised that after all the years he has been in the House he does not realize this matter concerns transport primarily.
I can assure the hon. member that indeed consultation will take place with the Quebec government, the city of Montreal, as well as other municipalities and interest groups on any matters pertaining to Mirabel and other areas in the province of Quebec, just as consultations will take place with other municipalities and cities in other parts of Canada before any decisions are made by this minister.
Adjournment Debate
Also I should like to answer the hon. member's question related to ground transportation service between Mirabel and downtown Montreal via Laval. Since the Mirabel airport opened in 1975, there have been adequate bus transportation services provided between Montreal and Mirabel. The Montreal Urban Community Transport Commission has been providing service from the CN central station to Mirabel and from Dorval to Mirabel. The Laval Transport Commission has been providing a service from the Henri-Bourassa metro station to Mirabel. This service carried 83,000 passengers in 1978, of which more than 90 per cent were Mirabel employees.
The level and the quality of service provided by these two transport commissions, the MUCTC and LTC, is very adequate, especially if we consider the actual level of patronage at Mirabel and the characteristics of the airport users who are mainly international passengers with flying time of many hours. Within the context of international travel the extra time required to travel by bus from Mirabel to Montreal, approximately 15 minutes, is minimal indeed when compared to the more than $100 million it would cost to implement a Mont-real-Mirabel highspeed rail system at this time. Therefore, the outlay of an expenditure in the area of $100 million, especially in this time of restraint, would be difficult to justify. I want to remind the hon. member of that fact. As for any service of this nature, ways of improvement are constantly the subject of examination and analysis, which is something the previous government did not take the time to do. With respect to this specific issue, I might add that provincial, municipal and federal officials are presently studying means to improve the downtown terminal.
Also the hon. member for Laval asked if it is the minister's intention, when he meets with the Quebec government, to consider that service as a priority. The hon. member may be assured that the minister recognizes the importance of an appropriate ground transportation system to Mirabel, particularly in the future, and that necessary steps will be taken in due course.


The Acting Speaker (Mr. Scott, Victoria-Haliburton):: The
motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at two o'clock p.m.
Motion agreed to and the House adjourned at 10.34 p.m.

Wednesday, October 31, 1979