1979-02-23

ROUTINE PROCEEDINGS


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, under the provisions of Standing Order 43, I rise on a matter of urgent and pressing necessity.
In view of the use by some Liberal members of parliament of a pamphlet from parliament, at public expense, containing photographs of Their Excellencies and observations concerning His Excellency, a document that is patently designed with the intention of implying their association therewith, thereby placing the Queen's representative in a potentially invidious constitutional position, I move:
That this House direct that such constituency reports have deleted therefrom the references to which I have already referred.


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


Some hon. Members:: No.


CRIMINAL CODE
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I rise, under the provisions of Standing Order 43, to seek the unanimous consent of the House to discuss a motion relating to a matter of urgent and pressing necessity.
The cities of Vancouver and Toronto, and other major urban centres, have requested an amendment to the Code in reference to solicitation and prostitution to restore order on their streets. All parties have agreed to have this amendment severed from omnibus Bill C-21.1 therefore move:
That the government bring forward this bill forthwith without delay, and in consequence that it be approved by parliament expeditiously, so as to prevent the
error made by the Prime Minister when he was minister of justice, of removing a similar clause dealing with the same when the vagrancy section of the Code was totally repealed.


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.


Eldon Mattison Woolliams: How can you say no when your party wants it done? They have approached us.


AIR TRANSPORT
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I rise under the provisions of Standing Order 43.
The city of Yorkton neither needs nor wants the air route awarded to Norcanair by the Canadian Transport Commission. Considering that Norcanair has failed to inaugurate this service, violating the CTC's requirement that service commence within six months of July, 1978, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the Minister of Transport provide at once the necessary assistance to improve the maintenance and runways at Yorkton airport, and that he assist the city in attracting east-west air service from Transair to the extent, if necessary, of providing operating subsidies on this route.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

O)


NATIONAL UNITY
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I rise, under the provisions of Standing Order 43, to move a motion of urgent and pressing necessity.

February 23, 1979
In view of the depressing statement by the Minister of Justice that "four-fifths of the Parti Quebecois program can be implemented within the federal system and the remaining fifth can be negotiated", I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House direct the Minister of Justice to make a statement on motions to explain the government's intention with respect to item II, subsection 4 of the Parti Quebecois' program, namely, Quebec's admission to the United Nations.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


GAMBLING
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, under the provisions of Standing Order 43, I wish to move a motion on a matter of urgent and pressing necessity.
Now that the Minister of Agriculture has evaded his responsibility by asking a committee of the other place to report on what to do about off-track betting, the same minister, by way of a statement in this House, should explain his change of attitude about the other place in view of his reported observation a few months ago when, on being asked if he would like an appointment as a senator, said, "Lord save me. I would never want to be a senator"-


Mr. Speaker:: Order, please. The hon. member for Provench-er (Mr. Epp).


CRIMINAL CODE
Mr. Jake Epp (Provencher):: Mr. Speaker, I rise under the provisions of Standing Order 43.
In view of the fact that section 166 of the Criminal Code more adequately protects female children than male children against sexual exploitation, and in view of continuing incidents of sexual exploitation of children, I move, seconded by the hon. member for Selkirk (Mr. Whiteway):
That the government move swiftly to implement the provisions of Bill C-211, an act to amend the Criminal Code, which the government included in Bill C-21.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN NATIONAL RAILWAYS
Mr. B. Keith Penner (Thunder Bay):: Mr. Speaker, I rise under the provisions of Standing Order 43.
Being fully aware of the urgent need for more railway boxcars in western Canada for the movement of grain, especially wheat, but believing that it is totally unacceptable to impoverish other regions of the country in order to meet this need, thereby causing industrial disruption and lay-offs in those regions, I move, seconded by the hon. member for Ottawa-Vanier (Mr. Gauthier):
That this House requests the Government of Canada to instruct the Canadian National Railways to maintain their full commitment of boxcars to the forest products industry of northern Ontario for the movement of wood chips and other forestry products such as lumber.


Mr. Speaker:: Such a motion can be introduced 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.


EXTERNAL AFFAIRS
Mr. Bob Rae (Broadview):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43.
In view of the increasing evidence of a systematic, pervasive boycott by many Arab countries against Canadian companies that continue to trade with and invest in Israel, and in view of Canada's friendship with Israel and concern for her future economic and political security, as well as our opposition as a country against discrimination of any kind, I move, seconded by the hon. member for Oshawa-Whitby (Mr. Broadbent):
That the government introduce legislation for second reading providing for sanctions against companies that comply with such a boycott without further delay.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIRPORTS
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In light of the fact that over one year ago the ministry of transport promised a foam truck for firefighting at the Castle-gar airport, and promised ten months ago new navigational aids-neither of which have been delivered-and in light of the fact that in the past year the only addition to the firefighting equipment at Castlegar airport has been two pairs of snowshoes, without operating instructions, I move, seconded by the hon. member for Pembina (Mr. Elzinga):
That the Minister of Transport consider and correct the inadequacies of the existing equipment consisting of one ancient fire truck, one fire axe, two fire extinguishers, three pairs of rubber boots, two pairs of snowshoes, and a second rubber ducky for the minister.


Mr. Speaker:: Order, please. Oral questions.



ORAL QUESTION PERIOD


Mr. John C. Crosbie (St. John's West):: Mr. Speaker, in the absence of the Prime Minister, who is in Toronto looking for help-he did not find any, I do not believe, either-my question is to the Minister of Science and Technology who is the Minister of Energy, Mines and Resources, because I do not think he realizes he is the Minister of Science and Technology.
The minister has just had a report presented to him by the Science Council of Canada, called "Forging the Links-A Technological Policy for Canada", in which it is pointed out that Canada is faced with a serious economic crisis and that its share of world manufactured exports dropped from 5.6 per cent in 1970 to 3.8 per cent five years later. In addition, it points out that if we had been able to maintain our exports at the 1970 level, we would have an additional $8 billion worth of exports and we would have trimmed our unemployment in this country by one-third.
In view of this report to the minister, by an independent, non-political body appointed by the government, would the minister tell the House whether he believes the analysis of this report and will act on it, or does he believe the Minister of Transport who said last Tuesday that this country is in excellent economic shape? Whose advice has he taken? Is he going to act on this report?
Oral Questions


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources and Minister of State for Science and Technology):: Mr. Speaker, if the hon. member had looked at the figures, he would know that there has been a very substantial increase in employment in the manufacturing industry: something in the order of well over 100,000 new jobs were created in the manufacturing industry last year. But that is not to say the government is complacent about the health and promise of the manufacturing industry. Indeed, I think the Science Council's report will be a helpful report to the government and to industry as well.
The hon. member should know that the 23 sector task forces, which were composed of both industry and labour, reported to the government and the government has been able, through what is really a massive review of policy with respect to the manufacturing industry-


Some hon. Members:: Oh, oh!


Alastair William Gillespie: -to agree to a very substantial number of those recommendations, recommendations which should strengthen the manufacturing industry in the years to come.


John Carnell Crosbie: Mr. Speaker, the figures for last year show that our deficit in fully manufactured products internationally, with the world was $12.2 billion and that our deficit with the United States in fully manufactured goods was $8.9 billion, up $700 million from the year before.
The Science Council of Canada has pointed out that our deterioration is worse in advanced industrial sectors. They conclude that Canada is moving away from an industrialized economy back to one based on the export of raw materials. In light of the conclusions of this eminent group which is very familiar with the Canadian manufacturing industry, will the minister stop his flippant replies, forget that he was on the program last night on Global TV, "Snow White and the Seven Economic Dwarfs"-


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


John Carnell Crosbie: -and tell the House what steps the government intends to take to reverse this desperate situation that has grown up since 1970 under their jurisdiction? What steps does he intend to take-not flimflam and nonsensical replies?


Alastair William Gillespie: Mr. Speaker, I think the Canadian people and, indeed, industry would expect government to work with industry. That is why my colleagues and I have emphasized the importance of labour-management-government co-operation.
I referred a moment ago to the massive review of policy; that something in the order of close to 1,000 personnel from industry and from labour participated in these task forces. The hon. member seems to want to ignore the fact that the largest part by far, the majority, of the Canadian manufacturing

February 23, 1979
Oral Questions
industry was covered by these task forces. These task forces examined the strengths and weaknesses of our manufacturing industry and they made a number of recommendations, the vast majority of which I have already indicated the government has accepted.


John Carnell Crosbie: Mr. Speaker, let me give the minister one other statistic. From 1970 to 1977, the proportion of the Canadian market served by imports grew from 26 per cent to just over 31 per cent. We are losing our exports and we are not displacing the imports.
Will the minister tell us, does he agree with the conclusion of this study, which reported to him, that our industry has weakened since the 1960 merger of the department of industry with trade and commerce? Is he now considering separating these two bodies again, in view of the fact that industry seems to have been smothered and has never recovered since this merger?


Mr. Speaker:: Order, please.


John Carnell Crosbie: Is the minister taking this seriously? After all, three years' work went into that report.


Alastair William Gillespie: Mr. Speaker, the hon. member is confused with imports and exports-


Mr. Whelan:: That is normal.


Alastair William Gillespie: -and whether we should be increasing our imports or reducing our exports. That is the way the question came across. Let me assure the hon. member that if he looks at the figures, which I suspect he does not do very often-


Eugene Whelan: Right on.


Alastair William Gillespie: -he will find that we had a record merchandise trade surplus last year, and he will see that the manufacturing industry in many sectors of Canada right now is performing virtually at full capacity.
He would also recognize that the science and technology R and D incentives of last year resulted in a major, new incentive program for industry which we hope will help to produce the kind of Canadian research and development activity in the future which will build a more innovative manufacturing industry in this country.


INDUSTRY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in the absence of any minister who is even remotely an economic minister, I will go to one of the Seven Dwarfs, sometimes referred to as Smiley: I refer to the Minister of National Revenue.
As a dispute seems to have broken out between the President of the Board of Economic Development Ministers and the Minister of Labour as to whether it is desirable in this country to have anything called an industrial strategy, will the minister indicate where he falls in this debate: is he for an industrial strategy, or against it?


Hon. A. C. Abbott (Minister of National Revenue and Minister of State (Small Business)):: Mr. Speaker, the hon. member says I am referred to as Smiley. I think it would be unparliamentary of me to mention some of the names by which he is referred to.
I attended the conference at which both ministers expressed themselves on the question of industrial strategy. I dispute very much that they had any severe difference of opinion.


Mr. Clark:: They were four-fifths together.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, I hope I did not misname the minister: there are several other names applied to the Seven Dwarfs, such as Dopey, Sleepy, and a few others; perhaps one of those is more fitting.
My further question to the minister centres on this important question which came up in the task force Overview; that is, that the commodity tax review has been stalled, notwithstanding the fact Overview recommends that the important advantage that is being given as a result of commodity taxation in this country be ended. We have been trying to get a reference to the finance committee on this matter. Will the Minister of National Revenue indicate whether he is aware of the anxiety concerning this imbalance and, second, will he take some steps to get proper reference to the finance committee so that some type of a report can be forthcoming?


Anthony Chisholm Abbott: Mr. Speaker, to the minister of finance that cannot be, I would simply say that when the Minister of Finance returns to the House, the hon. member should ask him that question: it is entirely his responsibility.


Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I wish to direct a question on the same subject matter to the Secretary of State for External Affairs, in the absence of the Prime Minister and the Deputy Prime Minister.
The acceptance or non-acceptance by the government of an industrial strategy is absolutely central to the question of the industrial future of this country. Considering that the President of the Board of Economic Development Ministers flatly rejected such an approach yesterday in Toronto and, contrary to what we have just heard from one of the minister's colleagues, the Minister of Labour said what we are doing now is not going as far as he would have liked and that this piecemeal approach is not enough-that is a flat disagreement between the senior minister and the Minister of Labour-I would ask the Secretary of State for External Affairs: who was speaking for the government on this matter? Does the government accept, or not accept, the need for an industrial strategy?

February 23, 1979


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, there have been many statements made in this House by present ministers and their predecessors, including myself as minister of industrial development and also as minister of industry, trade and commerce. The issue may well hinge on whether we are talking in the singular in terms of an industrial strategy, or talking, as the sectoral report suggests, of having a number of related strategies, each of which is moving ahead within a general, over-all framework.
If we look at the statements which have been made with regard to industrial strategies on, for example, the shipbuilding industry and the forest industry within the last few weeks, it can be seen that the Board of Economic Development Ministers is in fact pursuing a series of industrial initiatives in all of the key sectors. Whether one wishes to put an umbrella definition on that as being a total industrial strategy or whether, as the responsible minister has said-and I agree, and I am sure all our colleagues on this side agree-one goes at it on the basis of analysing each individual key sector and developing it in the way which is now being done is, I suggest, more a matter of semantics than anything else.


John Edward Broadbent: Mr. Speaker, I say, with respect, to the minister that the question is much greater than a semantic one.
1 will go back to the Minister of Energy, Mines and Resources. The Science Council correctly pointed out that dealing with different sectors of the Canadian economy or different aspects of our economic difficulty, whether it is inflation on the one hand or unemployment on the other, is not enough. The Science Council says that these have to be seen as symptoms of a larger structural difficulty.
I would like to ask the minister who has responsibility for the Science Council why the Government of Canada cannot do what France, Japan, Norway, Sweden and most other industrial countries have done, that is, have an over-all industrial strategy which integrates economic policy. That is the only way, as the Science Council has pointed out, that we can achieve long-range full employment in this country.


Alastair William Gillespie: Mr. Speaker, it has already been made very clear by my colleagues, the Secretary of State for External Affairs and the President of the Board of Economic Development Ministers, that we are approaching this in key sectors. We are approaching it from the point of view of the interests of both management and labour. Labour and management in each of these sector task forces made recommendations.
The government was not sitting there saying, "We are going to decide what should be done". We were saying, "We would like to hear from you." To each of these sector task forces government personnel were attached, but government personnel were not writing the rules; they were listening and taking notes; they were part of the process. I am sure the hon.
Oral Questions
member would agree that labour has something very important to say about the development of an industrial strategy for Canada.


Mr. Fraser:: When did you ever listen to labour?


Alastair William Gillespie: If the hon. member does believe that, he should be supporting the government's efforts to involve the labour movement in the enunciation and articulation of separate strategies for separate industries.


John Edward Broadbent: Mr. Speaker, the minister really should go out and have another glass of sherry.


Some hon. Members:: Oh, oh!


John Edward Broadbent: Will he, just for once, deal with the substance of the matter? The Science Council points out that the government has never had a coherent industrial strategy because it has, and I quote, "an ideological aversion" to planning in a sensible way. Why is it that other industrial countries can recognize that there is a need to match resource development with industrial output, that there is a need to integrate inflation policy with full employment, and that there is a need not simply to have a shipbuilding industry in one part of Canada and a plastics industry in another part, but to integrate the two?
Why is it that other industrial countries are able to do this, but this government-which has been around for many years-has not been able to do that in the past and is refusing to do it for the future?


Alastair William Gillespie: Mr. Speaker, let me go back to the key performing parts of the Canadian economy, the industries themselves. The government believes that labour and management should work together. The forest products industry is a very good example. It is a massive industry. It is one of our most important exporting industries. As a result of the consultation which took place between labour, management and the government with respect to problems and opportunities, the government announced a program of support for the industry which will help it become competitive and modernize for the future.
We believe in a selective approach like that and in dealing with each of the key sectors. The automotive sector is another important one, as the hon. member knows. He has also mentioned the shipbuilding sector. We believe in working with the parties involved. We would be more likely to develop a viable and strong shipbuilding industry through consultation that by working in some back room as perhaps some of the hon. member's supporters believe we should.
3530

February 23, 1979
Oral Questions
B0)


SHIPBUILDING
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is directed to the Minister of Supply and Services.
In view of the fact that last week the Davie Shipbuilding Limited in Lauzon had to lay off some 100 workers for lack of contracts, could the minister advise the House whether he has been asked by the Minister of National Defence to call for tenders to repair or build ships in shipyards located in eastern Quebec?


Hon. Pierre De Bane (Minister of Supply and Services):: Mr. Speaker, I am pleased to advise the hon. member that I shall be visiting this shipyard personally on Monday of next week. I want to remind him that, especially due to the difficulties both Canadian and foreign shipyards are experiencing, there are problems indeed. That is why Mr. Andras, the president over a conference of the Board of Economic Development Ministers, announced two months ago an accelerated program of ship repairs. As for us, in order to indicate to the House an interesting date, I should like to advise the hon. member that on April 19 we shall complete the assessment of the proposals we received in December, 1978, for the building of six new ships costing $1.5 billion. We hope to have the assessment of these proposals completed within the next two months. Following that, there will be, of course, a full schedule to adhere to before a contract can be awarded.


INQUIRY AS TO POSSIBILITY OF GIVING PRIORITY TO LAUZON SHIPYARDS
Joseph Adrien Henri Lambert: Mr. Speaker, I see from the reply of the minister that things are improving. I should like to ask whether contracts are awarded after calls for tender or after negotiations with the shipyards themselves? Can the minister also tell us whether he has the authority to give some priority to the Lauzon shipyard which, to my mind, is the most affected of all shipyards in eastern Canada?


Pierre De Bané: Mr. Speaker, where building is concerned we proceed through calls for tender. Naturally, when we do we realize that some shipyards are already filling out orders, and because of that they cannot tender while others, as the hon. member mentioned himself, like the Davie Shipbuilding Ltd., are going through extremely difficult times and are operating below capacity.
Personally, as a Quebecker and for the sake of fairness, I sincerely hope that the Davie Shipbuilding Ltd. can soon get some of the contracts awarded to the best bidder.


REQUEST FOR STUDY ON IMPROVING FACILITIES AT LAUZON SHIPYARDS
Joseph Adrien Henri Lambert: Mr. Speaker, the minister certainly knows-if he does not, he will on Monday when he goes to the shipyards-that the yards need to be expanded, according to my information, in order to allow the company to build larger ships. Would the minister be willing to urge his cabinet colleagues to give very serious consideration to that matter and would he authorize the upgrading of the shipyards if these works are deemed necessary, which would obviously give quite a good deal of work to a few hundred people before the implementation of the projects which he referred to?


Pierre De Bané: Yes, Mr. Speaker, I would truly be willing to discuss the matter when I go to the Lauzon shipyards on Monday and the hon. member can be sure that if it is established that upgrading operations would make the yards more efficient and productive, I will talk about it with my colleagues in the government.
While I am on my feet, Mr. Speaker, I would like to tell the hon. member for Bellechasse that a few months ago my department awarded a $12 million contract to the Lauzon shipyards for repairs to the Protecteur, a contract which I think will come to an end in June.


NATIONAL REVENUE
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I should like to ask the Minister of National Revenue for what reason it is necessary to allow complete income tax returns of Canadians, or copies thereof, to be placed in the custody of Statistics Canada, when presumably it is only certain statistical data that is required.
Why is it necessary that tax forms leave the care and custody of Revenue Canada, particularly in view of the heavy responsibility placed on the cabinet and on this minister under section 23 of the Statistics Act?


Anthony Chisholm Abbott: Mr. Speaker, the Statistics Act allows Statistics Canada to have access to returns and requires Revenue Canada to make them available in accordance with section 23. Section 16 of that act stipulates that the returns, when given to Statistics Canada, are subject to the confidentiality provisions in that area. I can assure him that so far as the Department of National Revenue is concerned, our files are kept in the strictest confidentiality.


Some hon. Members:: Oh, oh!

February 23, 1979


Anthony Chisholm Abbott: I can also assure the hon. member that if he comes snuffling around our place with his cameras and listening devices, we will throw him out on his ear.


Some hon. Members:: Oh, oh!


Elmer MacIntosh MacKay: Now I know, Mr. Speaker, why there have been so many ministers of national revenue: it is a refuge for mediocrity.


Some hon. Members:: Oh, oh!


Elmer MacIntosh MacKay: I want to ask the minister, seriously, whether he has had any discussions with the other minister specifically responsible for Statistics Canada, namely, the Minister of Industry, Trade and Commerce, and whether anybody to his knowledge is taking any interest in this statistical agency, because I would remind him that statistics can be used to support anything, especially statisticians.


Anthony Chisholm Abbott: Mr. Speaker, I am not sure that the hon. member's inane discourtesies require an answer, but he knows which minister has the responsibility for Statistics Canada. On this particular subject, the Secretary of State for External Affairs, I believe, is prepared to answer questions concerning Statistics Canada-


Some hon. Members:: Oh, oh!


Anthony Chisholm Abbott: I say that he is prepared to do so in the absence of the Minister of Industry, Trade and Commerce.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: Thank you very much.


Anthony Chisholm Abbott: I simply thought I would point out, in the clearest English possible, that under the act we are required to turn over tax returns to Statistics Canada and that once turned over, they remain their responsibility. I do not know what further answer the hon. member would require.


INVOLVEMENT OF RCMP IN INVESTIGATING SECURITY AT STATISTICS CANADA
Mr. Bill Jarvis (Perth-Wilmot):: There is absolutely no obligation to turn over those tax forms with names, addresses, and social insurance numbers-none whatsoever.


Some hon. Members:: Hear, hear!


William Herbert Jarvis: We have a situation where I and dozens of members of the House have farm constituents whose confidential tax returns are lying around in rooms with absolutely no security, and this is the minister's responsibility. Now may 1 ask him: can he confirm the reports emanating last might and this morning that the RCMP has been directed to investigate and hunt down the source of the information that led to the revelations by my colleague yesterday? Is that accurate? Has the RCMP been directed to hunt down that public servant?
Oral Questions


Anthony Chisholm Abbott: Mr. Speaker, the hon. member started his question by giving a selective list of those items that he says do not need to be on the returns when they are forwarded to Statistics Canada. That is perhaps his opinion. What other items he says do not need to be on the returns is another matter.


An hon. Member:: What do you say?


Anthony Chisholm Abbott: I simply repeat that the returns are sent to Statistics Canada in accordance with the act. Whether or not investigations have been ordered by the RCMP is not within my province to answer.


William Herbert Jarvis: The forms are sent under conditions established by the governor in council. That is exactly the provision in section 23. But to get back to the RCMP investigation, if the minister really wants to be cutting, will he cut out right now the RCMP investigation into the source of the leak, and in its stead devote an equal number of RCMP man-hours to teaching his officials and Statistics Canada officials the very basics of security to protect confidential information?


Some hon. Members:: Hear, hear!


Anthony Chisholm Abbott: Well, Mr. Speaker, if I could cut out anything, it would be stupid questions like that.


Some hon. Members:: Oh, oh!


Anthony Chisholm Abbott: I made it clear to the hon. member that we guard the confidentiality of tax returns with real care. There is no question that Revenue Canada has disclosed any information concerning tax returns, and under no circumstances has Revenue Canada ordered the RCMP to do anything. So I suggest to the hon. member that if he wishes to ask questions concerning the management of Statistics Canada, he should ask the questions. I am telling him of the responsibilities I have under my departmental area.

[DOT] (U40)
[ Translation]


AGRICULTURE
Mr. Claude Tessier (Compton):: Mr. Speaker, could the minister of Agriculture tell the House to what extent government policy with regard to marketing boards could cease to serve its original purpose, namely to ensure the right to participate in national production and evolve into a commodity traded to the highest bidder, which will be reflected at the level of production costs and eventually be passed on to the consumer? My question is this: who is responsible for the increase in the price of those quotas? Could the minister

February 23, 1979
Oral Questions
indicate whether he will take the necessary steps to remedy this situation which seriously distorts the aim of existing and future marketing boards, considering some producers will not be able to afford that security and consumers will have to foot the bill later on and what is worse, the future of these farms is in jeopardy as it becomes increasingly expensive to buy the right to produce.


Eugene Whelan: Mr. Speaker, I am sure the hon. member knows that the quota values are worked out and managed by provincial marketing boards under the jurisdiction of provincial authorities. We do have a provincial-federal committee studying quota values. I have deep concern about what is happening here, but there does not seem to be any great trend to do much about it.
I do not know what the report is going to bring in, but every province has a different system. 1 believe the province of Manitoba-if I could mention that province's name without somebody getting up on a question of privilege-has quota values in some instances, at least, for some products under marketing boards with no value in return to the marketing board but a redistribution to the people who need them, and the present government has not seen fit to change that.


ADMINISTRATION OF JUSTICE
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question for the Minister of Supply and Services. I am pleased to be able to ask this question of him because as a member he was quite open. I hope he still is, in spite of having joined the cabinet.
My question has to do with the case of Peter Treu and the matter of compensation. Having in mind that this prosecution was only launched with a fiat of the Attorney General, which in turn was given on information provided to the Attorney General-and we have had some experience in this House, in the case referred to by the hon. member for Northumberland-Durham, of information placed before ministers by security forces-and having in mind that this particular investigation and prosecution was continued and carried on in a very virulent and savage way by security people attached at one time to his department, will the minister investigate the circumstances under which this investigation took place and the information which was placed before the Attorney General in respect of which the fiat was given for prosecution, and report to this House so we can consider the question of reasonable compensation for this man who has been very grievously wronged, in spite of what the Minister of Justice said?


Pierre De Bané: Mr. Speaker, first of all, with regard to being open I am very happy that members of the official opposition have accepted
[Mr. Tessier.l
my invitation to meet twice with senior officials in my department, in my absence, to ask them any question they wish about the department, because I think that if we cannot withstand the closest public scrutiny, that is not a mark of good management.


Some hon. Members:: Hear, hear!


Pierre De Bané: Because the matter of classification of security clearance is within my department, I have asked my department to get in touch with the Department of Justice to review this practice. We know from this case that Mr. Treu lost his security clearance without even knowing about it. When we are asked in our department to check and give an opinion as to security clearance, we do so and we give that opinion only to the employer, but there is no standard of practice for the employer to advise someone that he has lost his security clearance, or what have you. As I say, I have already asked my department to get in touch with the Department of Justice to review this practice.
In essence, I am disturbed that when we are asked to give a security clearance in respect of someone, the results of that inquiry are not communicated to the person involved, and for that reason I should like to review the whole policy.


Some hon. Members:: Hear, hear!


LOTO CANADA
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, I, too, have a question for the Minister of Supply and Services but it relates to the responsibility of his department in acting as consultant, and the loss of some $13 million on the abortive Loto Select program.
In the interests of open government, while the minister's department was advising Loto Canada in respect of contracts that it entered into, did his department also advise Loto Canada that it should include in those contracts cancellation clauses which would allow the government to get out of the contracts, if that was necessary, at a minimal cost to the people of Canada?


Pierre De Bané: Mr. Speaker, my department acted as the contracting authority in some of the minor elements of the whole matter, for instance, concerning furniture, adverstisements, signs, etc. As the contracting authority, we made purchases on behalf of Loto Canada to the extent of about $500,000. We have managed, in about two months, to dispose of about 70 per cent of that at 100 per cent of the price we paid for it.


Some hon. Members:: Hear, hear!


Pierre De Bané: As for the contracts signed by the Loto Canada corporation and not by us, we did lend someone from
February 23, 1979

our department to give advice on its operation, not on operation of DSS.


Henry Perrin Beatty: Mr. Speaker, I appreciate the minister's anxiety to give us information. I want to get some clarification from him. In view of the fact that the president of Loto Canada indicated in a letter to the minister that it was Supply and Services that acted as consultant in the negotiation of these contracts, a fact which has been confirmed by the minister, I should like to ask the minister this specific question: Did officials of the minister's department advise Loto Canada to include in its contracts cancellation clauses which would allow the Government of Canada to escape from the provisions of those contracts at a minimal cost to the people of Canada?


Pierre De Bané: If I may, Mr. Speaker, I should like to take notice of that question because it is very precise. I would hope to be able to give my answer on Tuesday at the latest, as I will be absent on Monday.
What I can tell the hon. member is that my department did receive a letter from the president of Loto Canada thanking the department for the dedication of that single employee we did send and who worked, as the president said in the letter, "under extremely difficult conditions".


HEALTH AND WELFARE
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, if I may, I should like in one question to ask the Minister of National Health and Welfare whether she has followed through, as she said she would, in respect of two questions I put to her recently. On February 5, I asked her about the continuation of the grant to the National Assistor of Canadian Rape Crisis Centres. She said she would follow that personally. Has she done so?
On February 20, Mr. Speaker, I asked the Minister of National Health and Welfare if she would try to find some way to stop the practice of the Winnipeg Housing Authority of requiring housing tenants who are in arrears to assign their child tax credits even before they get them. Has she done anything further in respect of that matter?
[DOT] (U50)


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, on the first part of the question, I can report that I have looked into the request for funds by the Ottawa Rape Crisis Centre to my department. In fact, it is a request for two demonstration projects. One is a continuation of the three-year demonstration project and it is being studied by the department in the usual way, as I have said. I would remind hon. members, however, that there are very limited resources.
Oral Questions
The other project is a new one which would lead to the creation of a national association of Rape Crisis Centres in the country. It, too, is being studied by the department and I hope to have the recommendations before the end of March. Let me just say that according to an early analysis of the project, it will be given high priority.
As to the other aspects of the problem of crisis centres like the ones which we are studying, the provincial governments can apply for assistance under CAP. There are two such centres which are already cost-shared under the CAP agreement. One is the coalition of British Columbia Rape Relief Centres and the other one is the Saskatoon Rape Crisis Centre. This is the direction which we will take for the future.
As to the Winnipeg Housing Authority and their interference in the tax system, perhaps I could ask my colleague, the Minister of National Revenue, to give the answer.


Anthony Chisholm Abbott: Mr. Speaker, it is my understanding that an assignment of a federal tax refund is prohibited by the Financial Administration Act. My department will not honour such assignments: they will make the cheque out to the taxpayer and send it to the address given by the taxpayer. An official of my department has advised the Winnipeg Housing Authority of that fact.


PUBLIC SERVICE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker,
I would like to direct a question to the President of the Treasury Board. On December 19, 1 believe he indicated that he was looking very closely into the delegation to departments to classify. As I understand it now, that delegation has been withdrawn from at least the personnel officers, the economists and the administrators. Does that mean that the inquiry has been completed, or can we expect to hear from the minister with respect to further withdrawals; and if so, when?


Hon. Judd Buchanan (President of the Treasury Board):: Mr. Speaker, it does not mean that it is completed but, on the other hand, it does not necessarily mean there will be further withdrawals. As I have indicated, we are examining the eight groups which we felt had the greatest shortcomings as far as classification was concerned. As the hon. member has indicated, we have withdrawn from three groups the classification delegation. That may not happen with the others, but it has not yet been completed.


Lincoln MacCauley Alexander: Mr. Speaker, as 1 understand it, the minister is giving very close study, is monitoring the situation and certain procedures have been set in place. One thing which the minister has not told us is the anticipated savings. Right now we are wasting some $50 million as a result of overclassification. Could he indicate to the House, now, what the anticipat-

February 23, 1979
Oral Questions
ed savings are and the time-frame within which this will happen?
Has the minister any information in this regard, given the fact, once again, that with every passing moment we are wasting a good deal of the taxpayers' money.


J. Judd Buchanan: Mr. Speaker, on previous occasions I have explained to the hon. member the situation on the positions that were overclassified: we would anticipate, approximately in a year hence, downgrading those positions, or earlier if the occupant moved out for some other reason. So the action is in fact in train right now to do a substantial amount toward removing these misclassifications.
I have made it quite clear to the hon. member, as well, that we are not happy with the degree of misclassification in the public service, but that it is not something which we can correct overnight. It will become an ongoing and regular part of our process to monitor the program of delegation extremely closely.


LOTO CANADA
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I have a question for the Minister of Supply and Services relating to the questions asked by my colleague, the hon. member for Wellington-Grey-Dufferin-Waterloo.
The minister has referred to a letter which his department received from Loto Canada. Would the minister consider tabling that letter, since he has already referred to it? In giving his reply on Tuesday, if he cannot table the letter today would the minister be in a position to inform the House as to what were the "difficult circumstances"-I think I am quoting him correctly-which were referred to in the letter which apparently related to difficulties that one of his public servants had in the matter of a Loto Canada contract? If the minister could answer that question today, I would be grateful; but, if not, I would be quite prepared to wait until Tuesday.


Pierre De Bané: Mr. Speaker, I do not see why I should have any reservations in tabling that letter.
With regard to the difficult circumstances, I understand that the corporation wanted, for reasons which are already public knowledge, to perform that procurement on an urgent basis, and we sent them that official from our department, who worked under very difficult conditions. I shall send a copy of that letter without delay.
(Mr. Alexander.]


IMMIGRATION
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is to the Minister of Employment and Immigration. It deals with a recent directive sent to all immigration offices in Canada by Mr. J. Hucker, director general of the minister's enforcement branch, which reads in part, "an officer must grant admission or allow all alleged or admitted prostitutes to remain in Canada." In other words, establishing an open-door policy for prostitutes from around the world into Canada.
I would like to ask the minister, firstly, if he is aware of this directive and, if so, could he provide this House with the bare facts behind this memorandum which at first glance seem to fall under the Minister of Transport's user-pay policy.


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, I have not had the hon. member's experience in being able to spot what is and what is not a prostitute, so I am at somewhat of a disadvantage there.


Some hon. Members:: Oh, oh!


Jack Sydney George (Bud) Cullen: The hon. member indicated to me that he would be posing a question today, and I thank him for that, but unfortunately he did not tell me what the subject matter would be.


An hon. Member:: That is the kind of information you need.


Mr. Danson:: It got laid aside.


Jack Sydney George (Bud) Cullen: As my colleague, the minister of defence, has said, "It got laid aside." I will check into the particular memo, because I have a feeling that perhaps the hon. member is misinterpreting its intent.


Otto John Jelinek: Mr. Speaker, in view of the fact that law enforcement agencies in Canada generally support the view that prostitution and the evils surrounding it are not only immoral but tend to be surrounded by an atmosphere of crime, can the minister now assure this House that he will take every necessary step to advise his immigration officers around the country to disallow the entry into Canada of prostitutes, be they alleged, admitted or otherwise?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I do not know if the hon. member is suggesting that we should ask each woman or, for that matter, man who enters the country whether they are in fact a prostitute. I wish that the hon. member would have had the courtesy of letting me see the memo so that I could have checked it out to determine whether he in fact is giving the correct interpretation.
February 23, 1979


PARKS CANADA
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development in his responsibility for parks.
Just over two months ago I asked one of the members of the minister's caucus to contact him to secure permission for a Film producer to use the facilities of Fort Langley to shoot a Film, at a cost of approximately $1.5 million. To this day the minister has not answered the member of his caucus, nor the Film producer, with the result that this $1.5 million job has gone to the United States.
Is it the minister's policy to ignore a member of his own caucus the way he ignores us? In view of the fact that the Department of National Revenue would like to get rid of the policy of capital cost allowances to the film industry because it is too successful, is this the minister's way of co-operating with that impending policy of the Department of National Revenue?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I have in fact replied to the hon. member. He may not have had a chance to read the reply, but it is on his desk now.


SCIENCE AND TECHNOLOGY
Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, I have a question for the Minister of State for Science and Technology.
Last June, the minister announced the government's intention to develop important regional centres of excellence, and last July the province of New Brunswick made proposals for a centre of excellence at the University of New Brunswick that would lead to a forestry complex with an important stimulative effect on the whole forest industry. When will the minister indicate his response and explain the long delay in implementing this important program?


Alastair William Gillespie: Mr. Speaker, this is a very important program and a very big one, too. The hon. member will realize the importance of the forest industry to the province of New Brunswick.
I can assure him that I am interested in trying to develop the kind of complex which I think might well serve the interests of the people of New Brunswick and the interests of Canadians. A week ago I had conversations with the Premier of New Brunswick with respect to such a complex. I hope it will be possible to make an announcement in the near future.
Privilege-Mr. Friesen POINTS OF ORDER


MR. DANSON-FREE MAILING PRIVILEGES FOR ARMED FORCES-CLARIFICATION OF ANSWER
Barnett Jerome Danson: Mr. Speaker, I rise on a point of order. In answer to a question put by the hon. member for Pembina (Mr. Elzinga) the last time I was in the House, on February 21,1 gave an answer which was technically accurate but which might not have been precise. It related to free mailing privileges for the armed forces. The Canadian government and the Department of National Defence do not provide free mailing privileges, as I indicated. I understand however, that the United Nations Emergency Force in the Middle East has free mailing privileges provided by the United Nations for five letters per week of up to one ounce each. My answer might have been somewhat misleading in light of the hon. member's question as I read it in Hansard.
I will pursue the matter of other United Nations forces having the same privileges, but each force has its own rules of procedure.


MR. BAKER (GRENVILLE-CARLETON)-REFERENCE OF ESTIMATES TO STANDING COMMITTEES
Walter David Baker: Mr. Speaker, I rise on a point of order in which I think the Acting Prime Minister will be interested. There was some indication from the government House leader yesterday that the government would introduce a motion today to refer the estimates to the appropriate standing committees so that we could get to the discussion of them. It does seem an unusually long time to leave the estimates in limbo before referring them, but I do not see the motion on the order paper. Is a particular minister going to do that today?


Miss MacDonald:: They cannot Find a minister today.


Donald Campbell Jamieson: Mr. Speaker, I understand that the Minister of Employment and Immigration (Mr. Cullen) has the matter in hand. I want to advise the opposition House leader that unfortunately at the last moment the Deputy Prime Minister (Mr. MacEachen) was taken ill with a relapse of his very bad bout of influenza and is not able to be in the House.


PRIVILEGE
Benno Friesen: Mr. Speaker, I had given you notice earlier this morning that I wished to raise a question of privilege relative to the language used last night by the Parliamentary Secretary to the Minister of Industry Trade and Commerce (Mr. Loiselle). I see that he is not in his place so I should like to reserve that point until he is here.

February 23, 1979
Gold Coins


MR. FRIESEN-LETTER FROM MINISTER OF INDIAN AFFAIRS AND NORTHERN DEVELOPMENT RESPECTING FILM CREW
Benno Friesen: The second point I would like to raise Mr. Speaker, is a question of privilege relative to the answer just given me by the Minister of Indian Affairs and Northern Development (Mr. Faulkner) that the letter he had written to me was already on my desk. I would point out there is no way that could be so because he did not know I had made that request. I suggest that the minister is misleading the House and 1 would leave it to him to decide whether it was deliberate or accidental. There was no way he could have known that I made a representation to a member of his caucus and so there was no way he could have written to me.


James Hugh Faulkner: Mr. Speaker, I hope I did not misunderstand the hon. member, but last week I signed a letter to him which dealt with a film crew going into a national park. I assumed that was the question he was raising-unless it had to do with another film crew and another national park. That letter was sent across to him last week, as my memory serves me, because I remember reading it carefully.
I can tell him now that the answer is negative. I am not entirely satisfied with the negative response and if he wants to pursue it with me later I will be pleased to do so, but I did send that letter last week.



ROUTINE PROCEEDINGS


Pierre De Bané: Mr. Speaker, I am pleased to inform the House, on my behalf and on behalf of the President of the Board of Economic Development Ministers (Mr. Andras), of the government's decision to undertake a three-year program for the sale of gold bullion coins. This decision stems mainly if not exclusively from the request made to that effect by our Canadian gold mine operators. The gold mining industry, which is concentrated mainly in Ontario, Quebec and the Northwest Territories, employs 4,700 people. Canada, which is the third largest gold producer in the world, will thus be following in the footsteps of the two first producers, South Africa and the U.S.S.R., which are also selling gold bullion coins, and will be slightly ahead of the United States which will likely undertake a similar program next year.
To give an idea of the extent of this over a billion dollar program, at today's rate of exchange, need I only say that it will require, over the next three years, a total of five million

ounces of gold, equal to the amount of gold extracted from Canadian mines in the last three years. It is our hope that this program, a first in the history of the Royal Canadian Mint, will be an incentive to our industry, as it has been indicated to me. It is certainly my most heartfelt wish.
In other words, my dear colleagues, the government's sole interest in the sale of such gold bullion coins, is to help our gold mines. Accordingly, during this three-year trial period, the five million ounces of pure gold will be supplied exclusively by our Canadian gold mines or from government reserves. Also, to limit and even preclude any risk of deficit, the government has decided to give the Royal Canadian Mint total and exclusive responsibility over all aspects of this gold bullion coin program, both in Canada and abroad.


Henry Perrin Beatty: Mr. Speaker, at the outset of my brief remarks I want to thank the minister for his courtesy in making available to me and my colleague, the hon. member for York-Simcoe (Mr. Stevens), an advance copy of the text of his remarks and also a copy of the press release.
If I can be forgiven for digressing slightly, Mr. Speaker, I should like to say that both in question period today and in his general conduct since assuming this portfolio the minister has indicated a conscious desire-which is perhaps conspicuously in conflict with the attitude of a number of his colleagues-to share with parliament information about the activities of his department and to allow parliament an opportunity to have input into his department's activities. On behalf of my colleagues, I should like to indicate our appreciation of his willingness to give us that opportunity.


Some hon. Members:: Hear, hear!


Henry Perrin Beatty: The minister's statement and the press release contain the bare bones of the policy he has announced today. We will want more information about the specific policy, such as the timing of the introduction of the coins, the distribution system and various other mechanisms which will be put in place, but I want to indicate this party's general support for the policy.
Progressive Conservative members of the Standing Committee on Finance, Trade and Economic Affairs helped expedite passage of the legislation which set up the mechanism for the issuance of these gold coins. We also urged the government to expedite the sale of the coins, and if our advice had been followed they would be on sale now. Progressive Conservative members of the committee proposed amendments for greater controls on the program and for better reporting to parliament about the activities of the Mint in this regard.
In his statement the minister suggested that the sale of these coins will be a shot in the arm for the gold mining industry in Canada. On this side we sincerely hope that is the case, because at a time when one million Canadians are unemployed and the economy is sluggish we strongly support any action by this government to get the economy back on the rails.
February 23, 1979

It is clear from the experience of South Africa, with their equivalent of this coin, that the program can work well. Although we would want to follow the introduction of the coin and the marketing of it closely, in summary we think basically it is a good idea. We will be looking forward to receiving more information from the minister as to exactly what the government's activities will be in this area.


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I would like to congratulate the minister for making this information available to hon. members. I would also like to congratulate him on his manner of handling questions in the House. May I add that I have appreciated the work done by the minister's predecessor in this field, Mr. Goyer. I know that Mr. Goyer and the present Minister of Supply and Services (Mr. De Bane) have stood pretty well alone in their department by giving approval to this type of assistance to the gold mining industry. The department did not want to get involved in the area and its representatives said so at the committee hearings. They set up a number of roadblocks, but I am pleased to see that the government has decided to go ahead in any event.
As the minister has said, this is a billion dollar market. When the Americans put gold bullion on the market, hundreds of thousands of bids were made, far surpassing the amount of gold which was made available. The program has turned out to be a hedge against oil price inflation and inflation in general. It is also a hedge against bankruptcies in the business world and against bank bankruptcies, which are a fact of life in various countries around the world. For that reason gold bullion coins which are backed by the Mint, sold by the Mint and handled by the Mint will assure buyers around the world that they are getting exactly what they are paying for. This will enable buyers to trade these coins without any question as to value.
Some resentment was felt by people buying Kruger rands because of South Africa's policy. The Canadian coin overcomes one difficulty in that we are making it a coin of the realm. Certainly the $50 face value has no relationship to the purchase price because to buy this coin at today's market price cost Canadians $300. So it is not what you call a face value coin; it is a coin of the realm. The Kruger rand is not.
From the 23 lode mines in Canada in 1977 only about 1,717,000 ounces of gold were produced. To produce this gold the employment of about 5,000 miners in those 23 gold mines was needed. These mines produce an export value for Canada of about $239 million. If Canada enters this field where we are producing only 1.7 million ounces of gold per year, production must increase if we are to meet the requirements; otherwise, any shortfall will have to be made up from the reserves in our treasury.
I hope, along with other members of the House, that the government will assist the gold mining industry to find a ready market, a market that is available to the small producers as well as the large ones who do not have a marketing agency of their own. In effect the government through the Mint is going
Gold Coins
to act as the international agent for the distribution of much of our newly produced gold.
Along with other forms of assistance that the government can provide and is providing to places like Kirkland Lake, where a grant has been made available for surveys in the amount of $2.5. million, I hope that instead of only 5,000 miners in the gold mining industry next year, perhaps we will see 7,000 or 8,000. It seems to me that we will be producing more than the two million ounces which the minister has agreed to produce in the two years following this year.


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, first I would like to join with two of my colleagues in the opposition in thanking the hon. Minister of Supply and Services (Mr. De Bane) for providing us with a copy of his statement early enough for at least a cursory study of it. I would also like to congratulate him for the straightforward manner in which he attempted to give us the information we wanted. We have experienced it once again today, and it speaks well for him.
Mr. Speaker, that decision of the hon. minister to promote the production of gold bars is intended, according to what he said, to help gold mines in the Northwest Territories. Gold mines are mostly in Quebec and Ontario. I come from a gold producing area. Some produce gold mines only and others only marginally but they still produce some.
Now, I remember, Mr. Speaker, that no more than ten years ago when the price of gold was set at $35 an ounce, the government had to subsidize gold mines to enable them to produce and provide some jobs to miners and today, when the price of gold has risen to almost $246 an ounce, we have to help them in another way by producing gold ingots worth $50 and selling them to the public. Such system, Mr. Speaker, is no doubt better than direct subsidies, because it will enable those who want to make secure investments to buy those gold ingots which could hardly depreciate in view of the price at which they are marketed.
It remains, Mr. Speaker, that the production of a new gold coin in Canada is undertaken at a time where the government is experiencing some hardship. It has just been announced that the government has incurred a deficit of some $6 million for the production of the one cent copper coin. Now, Mr. Speaker, all kinds of devices have been used to try to make up that deficit. They thought they could reduce the size of the one cent coin, but they soon realized that there would be some problems with vending machines when that lighter one cent coin would be substituted for a dime. They also thought that a hole could be bored in the centre of that one cent coin. But since there were obviously so many holes in our monetary system they did not dare make fools of themselves with that method. The fact is that they have failed to find a solution and that our coin production shows a deficit. Mr. Speaker, I hope the production of that gold bullion coin which will sell for $50 will not show a deficit.

February 23, 1979
Gold Coins
The minister says that in order to avoid this, the government gave the Royal Mint the total and exclusive responsibility for every aspect of that program. If there is any risk of running into a deficit in this case, I do not think it could be avoided by giving such a responsibility to the Royal Mint. Well, I think, Mr. Speaker, that on the whole it is a good decision because it will first of all enable our gold mines to survive, and our miners to find stable and paying jobs, and also because it will make it possible for Canadians to invest money in that form of investment which seems fairly sound.


Henry Perrin Beatty: Mr. Speaker, as I indicated to the minister in my brief remarks, the statement which was read by him today and the accompanying press release contained only the bare bones of the proposal being made by the government. I would like to ask him, specifically with regard to the distribution system that will be followed, what sort of marketing system will be used? Does the minister intend to have the Mint serve as a retailer of coins and sell directly to individuals or sell through wholesalers? If he intends to sell through wholesalers, what method will be used to select the wholesalers?
[ Translation]


Pierre De Bané: That, Mr. Speaker, is a very important and sensitive question. For the time being, I can tell the hon. member that it will be the responsibility of the board of directors of the Royal Mint. Since the government's decision has just been taken, the board of directors has not yet reached a final decision as to the course to be followed. However, according to my preliminary discussions with the president of the Royal Mint, it seems that the marketing methods used by South Africa, which, of course, is a much bigger producer than Canada, will be followed rather closely. South Africa issues some eight million gold coins every year. As for us, we will issue some two million.
Apparently, various aspects will have to be considered. Firstly, the dealer should already be in the gold business, he should be able not only to sell gold, but also to buy it back from investors wishing to sell it, and should meet other criteria which will be defined by the Royal Mint.
So, the various details pertaining to distribution have not yet been worked out by the Royal Canadian Mint whose responsibility it will be. What we know for sure is that huge amounts of money will be involved, over a billion dollars, and that profits will be almost non-existent for the Mint; in other words, on the one hand very little profit is expected, while on the other hand, the risk involved is pretty high. That is why the Royal Mint has agreed to implement this program provided it is given the sole responsibility for it, from A to Z. Let us not forget that the price of the coin will vary on a daily basis, depending on gold market prices. Already, in the two major nations involved in this field, the U.S.S.R. and South Africa, there is in operation a system of sales to the wholesalers, which

we cannot change, and which is based on the day to day price of gold plus three per cent.
Therefore, it is with that 3 per cent that the Royal Mint will have to defray all its costs and also the current price of gold plus 3 per cent charged to the wholesaler. So the Mint cannot afford to make any mistake, otherwise we would incur tremendous losses.


Henry Perrin Beatty: Mr. Speaker, the minister alluded to the situation where similar coins are being marketed by the Soviet Union and South Africa. Although I was not a member of the committee at the time, my colleagues inform me that when the officials came before the standing committee, they were unclear. They had few details as to the marketing of the South Africa Kruger rand. Since the systematic study done following the hearings held by the committee, has the minister been able to come up with more information about the marketing policies of the Kruger rand and whether sales are in fact taking place?
With regard to any marketing studies that have been done by the Canadian Mint, what does the minister consider to be the breakdown of domestic sales versus international sales? Does he expect that the vast majority of these coins will be sold in the United States? What percentage does he expect will be sold domestically and what percentage does he expect will be sold in the rest of the world? Also, the minister indicated that he expects that a million will be sold this year and two million per year in 1980 and 1981. What marketing studies have been made to determine that those markets are in fact there?


Pierre De Bané: Mr. Speaker, in the first instance, since the decision of the cabinet was taken a few days ago the Royal Mint sent two high ranking civil servants to South Africa to meet with the people in charge of the program in that country. South Africa, which is by far the largest exporter of gold, has only 16 distributors throughout the world. This distribution is done through the largest banks, those that are in the gold business.
As to the second question, we expect to sell about 10 per cent of the gold bullion coins in Canada and the rest throughout the world, essentially in West Germany and the United States. I do not have the authority to give formal instruction to the board of the Royal Mint. However, they are convinced they will not be able to meet the demand. If that is so, I have asked them to ensure that we serve those Canadians who would like to invest in pure gold before selling abroad. However, I understand that traditionally those who are interested in investing in gold are essentially the West Germans and the Americans. I might point out that the United States secretary of the treasury has already announced that that country will be proceeding on a bigger scale than us in the next year.
February 23, 1979


William Arnold Peters: How does the Mint intend to purchase from the mines? Second, the minister may find that there is an immense market for this production. If that market develops, does he intend to have the mines supply the newly minted gold?


Pierre De Bané: Yes, Mr. Speaker. I have received letters from different gold mining companies assuring me that they will be selling to the Royal Mint. I will not read them all. However, I might read a portion of the letter 1 received from John L. Bonus, managing director of the Mining Association of Canada. I quote:
The association will now proceed to approach all Canadian gold producers alerting them to the nature and requirements of this program and suggesting that they make available to the government as much of their production as possible for this purpose.
If by chance something should happen in that regard, I have an agreement with the Department of Finance that they are prepared for the first three years to supply out of their reserves of 22 million ounces a maximum of five million ounces. I might point out that I have no interest in the program unless it is to produce gold bullion coins from gold which comes from our gold mining industry. I do not think there is any interest in doing this with gold from foreign mines.


Sinclair McKnight Stevens: Mr. Speaker, the minister has read from a letter from an officer of the Mining Association of Canada. I wonder if he would care to table that letter now.


Pierre De Bané: Agreed, Mr. Speaker. '
[ Translation]


Mr. Deputy Speaker:: Order. Is leave granted to the minister to table the letter he referred to?


Some hon. Members:: Agreed.


Sinclair McKnight Stevens: Mr. Speaker, if my understanding is correct, the person writing that letter in effect said, "We will now deliver gold to the Mint". I believe the minister is indicating that that is correct. Was the Mining Association or any member companies of the Mining Association advised of the minister's announcement previous to his making it in this House? The letter appears to indicate that the person writing it had knowledge of the minister's announcement today. The letter in effect says, "We will now deliver gold to the Canadian Mint". Would the minister confirm whether member companies of the Mining Association or the Mining Association itself were advised of the minister's announcement today previous to his making the announcement?


Pierre De Bané: In no way, shape or form, Mr. Speaker. When I was appointed minister of my department, I was told about this matter. I told my officials that I would have no interest in such a program unless it were desired by the gold mining industry. I said that I would not pursue the matter in cabinet unless I had the assurance that it was according to the wishes of the gold mining industry. I received that letter in January,
Gold Coins
and I proposed this program to the cabinet only a few days ago.
However, before taking this matter to the cabinet, I wanted to have letters from the mining industry to be sure that this is really what it wanted, because it is my belief that whatever the bureaucracy thinks, if the private sector has ideas which are not contrary to the common good, we should listen, especially if no cost to the treasury is involved.


Sinclair McKnight Stevens: Perhaps we will deal with the letter later. I should like to shift to another line of questioning. In the minister's announcement he indicated that the five million ounces of fine gold required over the three-year trial period will be drawn exclusively from Canadian gold mines or from Crown reserves, meaning foreign exchange reserves. As this matter has been the subject of quite a lot of debate in this House-the question of gold reserves in relation to our foreign exchange-would the minister indicate whether a commitment has been made by the Minister of Finance (Mr. Chretien) or by the Bank of Canada that they will supply gold from the foreign exchange reserve fund? If that commitment has been made, to what extent are they willing to sell part of the reserve, and at what price will that gold be sold?


Pierre De Bané: Mr. Speaker, as I told the House, the raison d'etre for the program is to help the gold mining industry. The gold mining industry made representations to me, but I must also consider what would happen if industry were to lose its traditional customers. As I said, I object to gold coming from foreign mines, so for the three-year trial period-and this program is only for three years-I have the firm commitment of the Department of Finance that for the entire program of five million ounces it is prepared to sell us that maximum of five million ounces from its own reserves.
Of course, I do not think we will need to buy gold from other than our own Canadian mining industry, but so that we can be sure of supply, we can buy gold from Crown reserves. At what price? The price will be the going price on the day of sale. I do not remember if the price is to be wholesale or retail; I think it is to be retail. Whether we buy from the mining industry, the Bank of Canada or the Department of Finance, the mechanics will be the same. The seller of the gold will earn about 0.5 per cent of the value of the gold, not the usual 8 per cent, 9 per cent, 10 per cent or whatever interest rates are current.
The seller will be paid on a retail basis. I am told that this is the way it is done in the gold trade. The procedure will be exactly the same regardless whether the gold comes from the gold mining industry or from the Bank of Canada. This is why I can assure the House that if, because of the requirement of working capital, more than SI billion is required, special financing for this program will not be needed by the Mint. However, there is a danger because gold is sold at its value plus 3 per cent. This is the way it is done with South Africa, and we have to work under that system. As long as gold is valued as it is today, at $249 plus 3 per cent, the cost of selling will be $7 or $8. That amount covers expenses and a small

February 23, 1979
Gold Coins
profit. However, if the price goes down to $150 plus 3 per cent, the industry will be losing money. I assume that if ever that happens the program will be stopped, because unlike the numismatic program under which we know in advance that we will sell at a certain price with a large profit margin, we are dealing here with the daily price plus 3 per cent.


Sinclair McKnight Stevens: Is the commitment the minister has received from the Minister of Finance an unlimited commitment? If for some reason Canadian producers are unable to supply enough gold for the minting of these gold maple leaf coins, would the Bank of Canada be willing to sell its entire reserve of gold? Is it a total commitment with no limitation?
Second, why has only one coin been chosen? The Mining Association recommended that there be a one ounce coin and a half ounce coin. As the minister probably knows, it is expected that in the United States there will be four gold coins minted, and they might compete against our one ounce coin.


Pierre De Bané: Mr. Speaker, we have a commitment for five million ounces for the entire program, if that much is needed. I am not in a position today to answer the second part of the question.


Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, maybe I am a little uneasy when looking at a picture of that gold coin, but it is engraved on the coin: 50 dollars, 1979. The press release says that the gold coin will have a face value of $50 and the price will be the current market price for gold, plus a charge for transfer, coining and delivery costs. Is it possible to engrave 50 dollars on the coin if it is sold at the market price?


Pierre De Bané: Mr. Speaker, I had exactly the same reaction when I saw that coin, but here are the reasons: first of all, that is the definition of the Department of Finance, since the Government of Canada is per se the final guarantor of the coin; second, according to all experts consulted throughout the world, a gold investor is not concerned about the amount engraved. The best example is that South Africa as well as the United States do not issue gold coins but one ounce medallions. There is absolutely nothing engraved on it and it is not currency. So, for gold investors, this does not matter at all and the Department of Finance, for very complex reasons, has decided that 50 dollars would be written on it.


Léonel Beaudoin: Mr. Speaker, I appreciate the minister's answer. Since the Minister of Finance has decided to determine a face value for very complex reasons, would it not be to attract potential buyers who are not used to buying metal in bulk?


Pierre De Bané: No, it seems it is a matter of money supply and other considerations, especially because all gold dealers we have consulted, the Deutsch Bank, the Dresden Bank and

others, have told us: A gold buyer does not care what is written on it; that is immaterial.


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I have two brief questions for the Minister of Supply and Services. Does the minister believe there will be a larger market for gold coins than for fine gold?


Pierre De Bané: Is the hon. member asking me about medallions or coins in gold? Actually, there are two systems, the Kruger rand of South Africa and the U.S. medallion. We will have coins in gold. The investor who wants to buy pure gold will not be, as I was told, influenced by whether it is a coin or whether it is a medallion because what he wants primarily is that it be pure gold, and that is what we will have.


William Hillary (Bill) Clarke: I would like to ask, Mr. Speaker, why would the government want to make a gold coin instead of letting private industry make a medal, for example?


Pierre De Bané: Mr. Speaker, we are doing so at the request of the Canadian gold mining industry which thinks it would be more prestigious if those gold coins were legal tender money in Canada. As, for very obvious political reasons, a lot of people do not want to buy the coins put out by the two largest producers, South Africa and the U.S.S.R., because of Canada's image, all the specialists we consulted tell us that demand for Canadian gold bullion coins will be excessively strong.


William Hillary (Bill) Clarke: Mr. Speaker, I understand from the letter to the minister that the gold mining industry was given the information that the program was approved over a month ago. I see the minister is shaking his head, so I will let him respond.


Pierre De Bané: When I was faced with that proposal, I told my officials that I would not take this matter to the cabinet before obtaining the opinion of private industry. My rationale in supporting the program is whether it will help the gold mining industry of Canada. So I wanted to know, first, what the industry thought about it.
I received in January the letter to which the hon. member referred and I tabled it a few minutes ago. In it I was told that the Mining Association supports such a program. It was only then that I decided to go to cabinet, which I did just a few days ago. That letter was one of the main elements of my decision to support the program, my philosophy being that when private industry asks us for something which is not contrary to the common good, and when we can manage to do it without incurring supplementary expenditures, we should listen to them and do it.
February 23, 1979


William Hillary (Bill) Clarke: I am referring now directly to the letter written by the managing director of the Mining Association of Canada. Does the minister not think that the phrase-
-chairman of the gold committee of the Mining Association of Canada, has informed the executive committee of the board of directors of the association that the interdepartmental committee studying the proposed gold bullion coin program has concluded its assessment on a positive note.
-informs the industry that the program will go ahead?


Pierre De Bané: That was done on my instructions. I told the officials of several departments that I was not ready to bring that project to the government for its consideration unless I had the assurance that it would benefit and be to the liking of the industry, and I wanted the officials to meet with the industry and bring me back their reactions. I wanted to know exactly what the industry thinks about the program before going further, because, as I said, there is no point in having such a program if it is not to the liking of the gold mining industry of Canada. The risks are enormous and the benefits are almost nonexistent.
The working capital for such a program, at today's price, would be over $1.25 billion, and if the Mint could manage to make $1 million or $2 million in profit, that would be great. The risk of loss is enormous. The only reason I am undertaking such a program is that the industry have asked for it and I agreed with their reasons. But let me point out again that I brought the matter to the cabinet just a few days ago.


Mr. Ian Watson (Laprairie):: Mr. Speaker, I would like to congratulate the minister and his department for the initiative he just took. Advisers seem to be saying that demand will come mainly from gold investors, and I believe that is true, but in view of the price I also believe that there is going to be rather considerable demand for that money as a piece of jewelry or a Christmas gift and so on. So I ask this. I just received from my colleague a picture of the coin in question and it seems to me the reverse with the maple leaf looks a little too commercial-fine gold one ounce. That looks commercial and I am wondering whether it would not be preferable to have only a maple leaf instead of that writing which does look commercial. It is a suggestion.


Pierre De Bané: Not being an expert, Mr. Speaker, I would of course be happy to convey the learned observations and technique preferences of the hon. member to the board of directors fo the Royal Canadian Mint.


Mr. Deputy Speaker:: This concludes the questions to the Minister of Supply and Services.


MAIN ESTIMATES, 1979-80 REFERENCE OF ITEMS TO STANDING COMMITTEES
Jack Sydney George (Bud) Cullen: Mr. Speaker, I wish to move a motion pursuant to Standing Orders 58(14) and 59. I might say at the outset that
Estimates
the motion is rather lengthy. It refers the estimates to several standing committees. Copies of the motion have been distributed to hon. members opposite and I believe there is an agreement that it will not be necessary to read the whole motion. If there is consent, could we take it as read, Mr. Speaker?


Mr. Deputy Speaker:: Is it agreed that the motion of the minister be taken as read?


Stanley Howard Knowles: And printed.


Some hon. Members:: Agreed.
[Editor's Note: The motion is the following:]
That the Estimates, 1979-80, tabled Monday, February 19, 1979, be referred to the several Standing Committees of the House as follows:
To the Standing Committee on Agriculture:
Agriculture votes 1, 5,10, 15, 20, 25, 30, 35,40, 45 and 50 To the Standing Committee on Broadcasting, Films and Assistance to the Arts: Communications votes 1,5,10 and 15
Secretary of State votes 1,5,10, 15,20, L25, 30, 35,40,45, 50,55,60,65, 70, 75, L80, 85, 90, 95, 100, 110 and 115 To the Standing Committee on External Affairs and National Defence:
External Affairs votes 1, 5, 10, LI 5, 20, 25, 30, L35, L40, 45 and 50 National Defence votes 1,5, 10 and 15 To the Standing Committee on Finance, Trade and Economic Affairs:
Economic Development vote 1 Finance votes 1, 5, 10, 15, 20, 30 and 35
Industry, Trade and Commerce votes 1, 5, 10, 15, 20, 25, L30, L35, L40, 45, 50, 55, 60, 65, 70, 75 and 80 National Revenue votes 1, 5 and 10 Privy Council vote 20
To the Standing Committee on Fisheries and Forestry:
Environment votes 1, 5,10, 15, 20, 25 and 30 To the Standing Committee on Health, Welfare and Social Affairs:
Consumer and Corporate Affairs votes 1 and 5
National Health and Welfare votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45 and 50 Public Works votes 45, 50, L55 and L60 To the Standing Committee on Indian Affairs and Northern Development: Indian Affairs and Northern Development votes 1, 5, 10, 15, L20, 25, 30, 35, L40, L45, 50, 55, 60, 65, L75 and L80 To the Standing Committee on Justice and Legal Affairs:
Justice votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 45 and 50 Solicitor General votes 1, 5, 10, 15, 20, 25 and L30 To the Standing Committee on Labour, Manpower and Immigration: Employment and Immigration votes 1, 5, 10,15, 20, 25 and 30 Labour votes 1, 5,10 and 15
To the Standing Committee on Management and Members' Services:
Parliament votes 5 and 10
To the Standing Committee on Miscellaneous Estimates:
Finance vote 25
Governor General and Lieutenant Governors vote 1 Parliament vote I
Privy Council votes 1,5, 15 and 30
Science and Technology votes 1, 5, 10, 15, 20, 25, 30 and 35
Secretary of State vote 105
Supply and Services votes 1, 5, L10 and 15
Treasury Board votes 1, 5, 10, 15, 20, 25 and 30

February 23, 1979
Order Paper Questions
To the Standing Committee on National Resources and Public Works:
Energy, Mines and Resources votes 1, 5, 10, 15, 20, 25, 30, L35, 40, 45, 50, 55, 60, 65, L70, L75, L80, L85 and 90
Public Works votes 1, 5, 10, 15, 20, 25, 30, 35, 40, 65, 70, L75, 80 and 85 To the Standing Committee on Northern Pipelines:
Privy Council vote 25
To the Standing Committee on Privileges and Elections:
Privy Council vote 10
To the Standing Committee on Regional Development:
Regional Economic Expansion votes 1, 5, 10, LI5, L20, 25 and 30 To the Standing Committee on Transport and Communications:
Post Office votes 1 and 5
Transport votes 1, 5, 10, 15, 20, 25, 30, 35, 40, L45, L50, L55, 60, 65, L75, 80, 85, 90, 95, 100, 105, LI 10, LI 15, 120, 125 and 130 To the Standing Committee on Veterans Affairs:
Veterans Affairs votes 1,5, 10, 15, 20, 25 and 30


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Roger Young (Parliamentary Secretary to Solicitor General):: Mr. Speaker, the following questions will be answered today: 32, 776, 1,037, 1,038, 1,039 and 1,117.


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


Mr. Yvon Pinard (Parliamentary Secretary to Deputy Prime Minister and President of Privy Council):: 1. (a) None, (b) None.
2. Not applicable.


Mr. Mazankowski: 1.	Does the government have a policy on the use of government and armed services vehicles for personal or recreational use and, if so, what is it?
2.	(a) With which department or armed service base is the car with Canada licence 19214 registered (b) is this vehicle assigned to one person and (i) if so, to whom (ii) if not, what procedures are followed for controlling use of the vehicle?
3.	Was this vehicle signed out on October 13, 1978 and, if so, to whom and for what reason?


Yvon Pinard: I am informed

by the Departments of Supply and Services and National Defence as follows:
1.	Yes. The policy on personal use of government motor vehicles is detailed in the publication entitled "Policy and Standards on Motor Vehicles", issued under Treasury Board circular 1976-27.
Significant policy points are as follows:
(a)	Use of a government vehicle for essential private purposes may be authorized if tied in with government business or in remote areas.
(b)	If in the interest of the government, limited private use may be authorized, normally for such purposes as economy of safe custody.
(c)	Exceptional private use of a government vehicle must be authorized in writing by the minister or deputy head of the department or agency involved.
The use of armed services vehicles in support of authorized recreational activities is also permitted.
2.	(a) Canadian Forces Base Penhold.
(b) No.
(i)	Not applicable.
(ii)	Its use is controlled by the base transport officer.
3.	Yes. The vehicle was signed out to 743 communication squadron, CFB Penhold who were participating in exercise Pen North XI in the Valleyfield, Alberta area. The vehicle during the day in question was despatched to Valleyfield, Alberta for a supply run.


Mr. Cossitt: What was the entire cost of maintaining all aspects of the Privy Council Office for each of the past six years and what was the total cost for these years?


Yvon Pinard: The information requested is available in the Public Accounts of Canada.


Mr. Cossitt: What was the entire cost of maintaining all aspects of the Federal-Provincial Relations Office from the date it came into existence?


Yvon Pinard: The information requested is available in the Public Accounts of Canada.
February 23, 1979


Mr. Cossitt: What was the entire cost of maintaining all aspects of the Prime Minister's Office for each of the past six years and what was the total cost for these years?


Yvon Pinard: The information requested is available in the Public Accounts of Canada.


Mr. Roche: Did CIDA recently sign an aid agreement with Algeria and, if so (a) in what amount (b) for what projects (c) with what kind of control and monitoring of the expenditure?


Mr. Louis Duclos (Parliamentary Secretary to Secretary of State for External Affairs):: No.


Roger Carl Young: Mr. Speaker, I would ask that the remaining questions be allowed to stand.


Mr. Deputy Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered today. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



POINT OF ORDER


Mr. Dean Whiteway (Selkirk):: Mr. Speaker, I want to bring to the attention of the House and to the attention of the appropriate minister the fact that question No. 580, standing on the order paper in my name since November 16, has yet to be answered. I raised this matter two weeks ago and the answer I received from the parliamentary secretary on February 9 as reported at page 3071 of Hansard, is as follows:
Mr. Speaker, I believe that it is not true that the minister will not allow this question to be answered. The question will be answered correctly, but it is not quite as simple as the hon. member indicates.
Then he said, and this is the operative part:
I will look into the matter to make sure that the question is answered.
I then asked him "when", to which he did not reply. The government has still not said when it will answer, as indicated by the fact that it has yet to answer question No. 580.
My question is one of some importance in that it has to do with the unity information office. On November 10, 1978, the then minister of federal-provincial relations answered a question in the House, and that answer is to be found at page 1011 of Hansard for that date. It relates in part to the same information. My question is simply supplementary to that question, but requires more detail. I would like to know why it is that the minister could give that answer, yet some three months later has failed to answer the detailed question I have on the order paper.
Housing
I just wanted to bring to the attention of the government that this important question relating to the cost and the number of periodicals or publications of that propaganda office, more commonly known as the unity information office, has not been answered and the Canadian people still do not have that information regarding the expenditures of the government for its own propaganda purposes.


Mr. Paproski:: There is nobody there to answer.


Mr. Deputy Speaker:: There does not seem to be any comment. I would take it that the hon. member has made his point or grievance which eventually will be noted.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Wednesday, February 21, consideration of the motion of Mr. Ouellet that Bill C-29, to amend the National Housing Act and the Central Mortgage and Housing Corporation Act and to make other related amendments, be read the second time and referred to the Standing Committee on Health, Welfare and Social Affairs.
Hon. Andre Ouellet (Minister of Public Works and Minister of State for Urban Affairs):: Mr. Speaker, when I was interrupted the other day at six o'clock I was explaining that Canadians, by any standard, are among the best housed people in the world, and that this was not only conjecture, it was the fact. This fact has been confirmed recently, as I was explaining to the House, by a Gallup poll taken across Canada last October. It showed that more than 85 per cent of Canadians were satisfied with their housing. Even in the Atlantic region where economic problems are more severe, more than 78 per cent of the people indicated satisfaction with their housing. The question asked of Canadians at the time was: "Are you satisfied, dissatisfied, or have no opinion about your housing situation?"
It was very interesting to note that this satisfactory response was given consistently by people of all ages, of all economic groups and in all parts of the country. Without question, the majority of Canadians are satisfied with their housing.
It is particularly reassuring, as I was indicating in my earlier remarks, that the degree of satisfaction has grown during the course of the last ten years. When a similar Gallup poll was conducted ten years ago the degree of satisfaction was only around 60 per cent and it is now over 85 per cent. The degree of dissatisfaction expressed at that time was 34 per cent, and this has now declined to 13 per cent.

One of the main reasons why people are satisfied with their housing is that an ever increasing proportion of this production consists of good quality housing of relatively small size which middle income families can afford. With our Assisted Home

February 23, 1979
Housing
Ownership Program and our rental housing program, we have managed during the last few years to decrease the production of highly priced homes and to increase that of accommodation which meets the need of the average Canadian family. From the inception of those two programs, from 1973 to 1977, 240,000 good units have been built at reasonable prices. The success of those programs not only helped a quarter of a million families to get good housing but also helped stabilize the prices of new and older dwellings. In fact, in 1977, the price of new housing units increased by 3.3 per cent only while the personal available income increased by almost 9 per cent.
Not only did we produce a larger number of housing units, Mr. Speaker, but we also improved on the quality of these units. Whereas in the early 1950s, 52 per cent of homes did not have central heating or electricity, this percentage has now fallen to less than 10 per cent. The percentage of homes without running water, hot or cold, was 43 per cent of all existing homes 25 years ago and is now down to 4 per cent only. The situation keeps on improving rapidly. Meanwhile, through our rehabilitation program, we have spent some $225 million to repair more that 50,000 units located in urban and rural areas, in order that they meet acceptable sanitary and security standards and that their usefulness be extended for another 15 years.
All those policies have been launched, needless to say by officials of the Central Mortgage and Housing Corporation. Obviously these directives come from the management of the Central Mortgage and Housing Corporation.
Before the House takes recess for one hour, I would like to draw the attention of the House and of Mr. Speaker to the presence in the gallery of the Speaker of the five members of the private sector who sit on the board of directors of the Central Mortgage and Housing Corporation: Mr. McGloan, a lawyer from Saint John, New Brunswick; Mr. Jacques Plante, a businessman from Quebec city; Mr. Conrad Pinette, a businessman from Williams Lake, British Columbia; and, a noticeable fact of which I am proud, two most competent ladies: Mrs. Christine McKee, an urbanist at the University of Winnipeg and Mrs. Sylvia Sutherland, a journalist and member of civil organizations in Peterborough, Ontario.


Mr. Deputy Speaker:: If 1 did not interrupt the minister it is certainly not because he was not out of order. It will be understood that hon. members who rise in the House cannot be permitted to identify people sitting in the galleries; this is allowed only in special cases for official government representatives. In any case, it being one o'clock, I do now leave the Chair until 2 p.m.
At one o'clock the House took recess.
[Mr. Ouellet.l


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
André Ouellet: Mr. Speaker, this is my third contribution in this debate in support of the bill before this House. Obviously, our rules do not allow a member to speak three times at the same stages of a debate, but the public and the members of this House will understand that, on the two previous occasions, I have been interrupted by the adjournment of the House.
When we adjourned at lunch time, Mr. Speaker, I was referring to the many reasons why 85 per cent of Canadians are satisfied with housing policies in Canada. This morning, I explained with a series of figures, the reasons why they are satisfied and those figures show outstanding progress as concerns the building of housing units for low-wage earners and senior citizens who need adequate housing.
Mr. Speaker, the figures I quoted this morning are important because they give the exact picture of the housing situation in Canada. They clearly show, I think, that in most cases, Canadians are living in relatively high quality housing. I am not suggesting, Mr. Speaker, that such a high quality was reached only through the efforts of the federal government. Obviously, private builders and private financial institutions have played an essential role, as did other government levels. Mr. Speaker, I will unhesitatingly say that it would have been impossible to reach such a high level of performance without the help of the National Housing Act and programs and policies administered by the Central Mortgage and Housing Corporation which is an agency of the Canadian government responsible for housing and community planning.
More than half of Canadian householders own their houses. And out of this number, half do not have mortgage debts nor is it necessary that they have any as the Progressive Conservative proposal made by the Leader of the Opposition would have them in order to benefit from this reactionary mortgage tax credit.
Mr. Speaker, I do not claim that we should rest on our laurels and be complacent about the housing situation in Canada. Obviously there is room for improvement. But as we now meet the needs of most Canadians as far as housing is concerned it becomes increasingly urgent to direct our efforts and resources toward the minority of Canadians who cannot provide for their own needs and who do not find help in the existing programs.
In this regard, the recent Gallup poll asked Canadians whether they were satisfied with the present housing situation in Canada. It is very interesting to analyse the motives of the few who declared themselves dissatisfied. As I was saying previously, this poll taken at the end of 1978, showed that 85 per cent of the people were satisfied and only 13 per cent were dissatisfied with the housing situation in Canada.
February 23, 1979

A breakdown of this 13 per cent of dissatisfied people shows that the major problem is high cost and-
I have some statistics that I would like to give to hon. members. Out of the 13 per cent who declared they were dissatisfied with housing, 17 per cent said their living accommodation was too small, that there was not enough space, that the kitchens were too small and there were not enough bedrooms; 8 per cent who were living in rental accommodation said they would prefer to live in houses of their own; a big chunk of the dissatisfied, representing 33 per cent of the 13 per cent of Canadians not satisfied with their housing, said that their housing was too expensive or hard to heat; 9 per cent complained of rundown accommodation, the need for repairs, inadequate plumbing and so forth, and 10 per cent said they felt they were living in an unsuitable neighbourhood. All this dissatisfaction must be looked into.
We are not without housing problems, Mr. Speaker. It is certainly clear that many Canadians are not well housed. It is an urgent concern of the federal government that our efforts and resources be directed to improving living conditions for those people who cannot provide for themselves.
Federal housing policies and programs have always been developed in response to the need that prevails at any given time. As market and economic conditions change, as the wants, needs and even the tastes of the Canadian people change, so does the federal approach to housing. In order to respond realistically to change CMHC must continue to fill a useful and effective role as a national housing agency.
We know that in metropolitan Canada about 155,000 households have inadequate or unsuitable dwellings and cannot afford better accommodation without spending over 30 per cent of their income to obtain it. Of these households only about 73,000 live in dwellings that could be improved; the rest would have to move in order to have adequate shelter.
In addition, about 283,000 households pay more than 30 per cent of their income for suitable and adequate shelter. Most of these people live in the older, central areas of cities and towns. In many cases these areas extend outward from the city core along railway tracks, are near airports or are mixed with or adjacent to industrial areas. In these central neighbourhoods housing stock is usually of poor quality while the level of community services is consistently inadequate. These problems are well known and obviously they are known to the opposition.

When we made this report public, showing that there are over 150,000 families living in unsatisfactory housing in Canada, the Progressive Conservative critic on housing cried shame. Here is what Professor Lawrence Smith said in an interview over the CTV network on Canada AM about the indignation of the Progressive Conservative critic on housing
Housing
matters. Professor Smith was interviewed by the commentator Norm Perry.

Part of Mr. Perry's interview with Lawrence Smith, who is a professor at Toronto University, went as follows:
-Jean Pigott, the Conservative MP, she made public a report by the Central Mortgage and Housing Corporation, and she quotes from that report and she says, "Look, according to this report, CMHC says 150,000 households in this country are in inadequate housing." Now, that sounds pretty frightening. Is she right?
Smith: -well, I would look at it just the opposite. I can't say that the number is wrong, but I wouldn't think that's frightening at all. I would think that that's a great endorsement of the housing policy and the housing industry. Because there's about 7% million households in Canada, so what that says is that there's two per cent, or just under two per cent of the households that are in inadequate housing, and that's a phenomena] compliment to policy-makers over the years and the housing industry.
Perry: -So that's really a taking out of context thing, then, isn't it? In other words, when you say 150,000 inadequate housing it sounds bad. You say it's only two per cent of the houses in this country, and it's pretty good.
Smith: -That's right. It's about, oh, six or eight months' construction.
Perry: -Okay. She also claims (and again she's quoting from CMHC) 438,000 households are spending more than 30 per cent of their income on housing, which suggests that houses are very expensive. Now, I don't think that's any surprise to anybody, but for 438,000 people to be spending more than 30 per cent of their income on housing, that sounds pretty scary.
Professor Smith replied:
Well, once again, you have to put all this in context. That comes out to only six per cent of the total households in the country, which then isn't a staggering amount. Second of all, you have to look at who it is that's spending this. For example, if a young family buys-stretches and buys a house and they end up spending 30 or 35 per cent of their income in the First year or two because they expect their incomes are going to rise, and Five or 10 years later it will be down to 25 or 22 per cent, that's not scary at all. On the other hand, if it happens to be elderly or people on Fixed incomes, where they have no hope of rising incomes and maybe will face rising housing costs, then there's a hardship problem for them.
But, again, the interpretation of this shouldn't be that there's problems in the housing industry. The interpretation of too high a proportion of income going to housing could well be that there are some families and households that have too low an income.

Mr. Speaker, there is a summary of what Professor Smith said in this television interview while commenting on the criticism passed by the Progressive Conservative opposition on housing in Canada. That is what I would have said myself. It is obvious, when one considers the whole housing situation in Canada, putting it back in its true perspective, that not only housing production at an acceptable level and at an acceptable cost must be taken into account, but also the financial capacity of those who live in those homes.
There is no housing crisis in Canada. There may have been at the beginning of this decade, in the early seventies, ten years ago, a hint of crisis, but the Trudeau government did a remarkable job during the last ten years to remedy this problem and solve in an outstanding way the deficiencies and difficulties which existed in the early seventies. Assuredly, the

February 23, 1979
Housing
job is not finished. There are certainly adjustments to be made. There are certainly improvements to be made yet.
And precisely, Mr. Speaker, this bill that we are considering today deals with such matters in amending the National Housing Act, first, to increase the building of public housing by non-profit organizations, second, to encourage much larger investments by the private sector in the housing area, third, to extend to all of Canada the Housing Rehabilitation Assistance Program.
Fourth, to set up an efficient housing program for our people. Five, to encourage and support co-operative housing in Canada. Six, to offer the borrower with lesser means another option through mortgage with graduated payments. And seven, to provide a community services program that will help the provinces and the municipalities give better service to their people. Those, Mr. Speaker, are seven actual measures to be found in this bill and which are designed to help those who are poorly housed, and those who are most in need of assistance, namely our low-income workers and our older citizens.
Naturally, those measures provide for the construction of a larger number of housing units for the needy. But, on the other hand, there are also those who are paying too much for their housing. But in their case, and I say it again, theirs is not so much a problem of housing as one of income. For them, as hon. members know, I announced earlier this week, in a speech I made in Toronto, that there was another solution to their problem, which strikes me as infinitely more just than that proposed by the loyal opposition in this House.
Now, Mr. Speaker, commenting on this bill gives me an opportunity to draw a parallel between the approach taken by the Progressive Conservative party and that taken by the Liberal party of Canada as regards the housing issue. There are obviously many differences between us and the Progressive Conservative party. Once again, when it comes to solving the housing problem in Canada we can see that the Progressive Conservative party is the party of the rich and well off while the Liberal party is the one which cares about the average citizen and the working class in Canada.


Mr. McGrath:: Like the luxury hotels of William Teron.


André Ouellet: Mr. Speaker, I see that 1 have just touched the nerves of Conservative party members in this House. They do not like it when we tell Canadians the truth and expose the fundamental difference that exists between the two parties in Canada.


An hon. Member:: Vive la difference!


André Ouellet: I did not intend to elaborate on this but because hon. members have objected and do not like what I am saying, I shall. On the one hand we have the Clark proposals, the deduction of municipal tax and mortgage interest payments from the taxable income of home owners. This

scheme is too expensive. This country cannot afford such a scheme at this time. It is a scheme which is wasteful because it does not meet head on the housing problems of today. Above all, it is a scheme that is unfair because it is the redistribution of wealth to the rich of this country.


An hon. Member:: What about Les Terrasses de la Chaudiere?


André Ouellet: They do not like it when we talk about their scheme because they are stuck with it-


Some hon. Members:: Hear, hear!


André Ouellet: -unless, as they have done on numerous occasions, such as on the question of deficits and the sovereignty-association issue, they have flip-flopped. They might flip-flop on the Clark proposals for housing.
An. hon. Member: Like the four-fifths and the one-fifth?


André Ouellet: Before they flip-flop on it, Mr. Speaker, I would like to say that if the Conservative party scheme- which is a proposed scheme of full deductibility for mortgage interest and municipal tax-had been in effect in 1976, it would have cost Canada $2.1 billion in lost revenue. If we look at this scheme today it will cost much more.


An hon. Member:: Not true.


André Ouellet: And its cost will further increase as mortgage borrowing increases to take advantage of the scheme. The disadvantage of such a scheme is evident. It would cause the diversion of mortgage funds from new construction projects to refinance loans on existing properties, either to settle consumer debts or for purposes of sale. This would cause added pressure on mortgage interest rates and the availability of mortgage funds for new building purposes would be impaired.


Walter David Baker: No more Rideau Centre.


André Ouellet: The hon. member for Grenville-Carleton (Mr. Baker) has just gone on record as opposing the Rideau Centre.


Walter David Baker: On a point of order, Mr. Speaker. That project was announced before the last three general elections. I hope it will again be announced for completion. I can say that it will certainly have the support of our party. The only problem is that the minister has not announced anything.


André Ouellet: Steady progress is being made on that project. The former mayor of Ottawa has been instrumental, along with the hon. member for Ottawa-Vanier (Mr. Gauthier), in putting forward this project. I am sure it will come to fruition in due course.


Mr. Munro (Esquimalt-Saanich):: It will come to attrition.
February 23, 1979


André Ouellet: It will be of great benefit to the citizens of Ottawa. It will be to the credit of the hon. member for Ottawa-Vanier and other members of parliament who will be elected on the Liberal platform in the Ottawa region at the time of the next election.


Allan Frederick Lawrence: The "Gauthier memorial centre".


André Ouellet: To return to the bill, I was discussing and explaining the fundamental difference in approach between the Conservatives and the Liberals. I was saying that the Conservative scheme would be much too expensive, a waste of good taxpayers' money. While the present government has adopted a firm policy of restraint in government expenditures, this does not mean that it has closed off the possibilities of initiatives to serve employment purposes in an efficient way and which offer relief to people who are in difficult economic circumstances.
Our primary objection to the idea of deductibility is that it is wasteful and inefficient as an employment generator. Above all, it is unfair and regressive in its income distribution effects. To generate employment through the housing market, it is necessary only to stimulate the construction or repair of housing. Funds expended for these purposes put people to work. It is not necessary or efficient from an employment point of view to attach subsidies to the entire occupied housing starts at enormous expense.
On the other hand, if the purpose of deductibility is simply to offer relief to people who cannot afford to occupy housing, then there is no reason to exclude the entire tenant population and no reason to accord aid to home owners in a deliberately perverse manner which tends to increase the aid with the level of income of the beneficiary household.
Let me elaborate quickly on this. I just mentioned that if deductibility had been in effect in 1976, it would have cost $2.1 billion. Of this amount tenants, who constitute 38 per cent of households and who have lower income on average than home owners, will get nothing. Households making less than $5,000 income, who constituted 21 per cent of all households in 1976, would also get nothing. Those earning from $5,000 to $15,000, who made up almost half the population in 1976, would get just over one-third of the benefits. The remaining 31 per cent of households, those earning over $15,000, would receive two-thirds of the entire benefits.


An hon. Member:: A Tory program.


André Ouellet: Indeed a Tory program. It clearly differentiates the approach to housing of Liberals and Conservatives.
A further point has to do with the interprovincial impact on deductibility which tends to favour provinces which have high income and high home owner propensity. The evidence is that on mortgage interest deductibility, only Ontario and British Columbia will gain relatively in the sense that the benefit to their citizens would be higher than their relative share of the number of households. All of the other provinces will benefit less than their share.
Housing
It is very interesting to see that the Housing and Urban Development Association of Canada, HUDAC, decided that they cannot endorse the proposals of the Leader of the Opposition (Mr. Clark) unless certain conditions are included, conditions that obviously cannot be met. A Canadian Press report of February 20, 1979, stated:
HUDAC said the resultant loss of tax revenue would have to be matched by cuts in government expenditures so that the government deficit would not be adversely affected as a result of the program.
It is impossible for the Conservatives to meet that point. Their scheme will only add substantially to the deficit of the Canadian government.
It also wanted assurance that the supply and price of mortgage money would not be adversely affected and that the "cyclical instability of the industry would not be aggravated".
Indeed, the builders of Canada have every reason to be frightened by these tremendous effects on the cyclical instability of the industry that would be hurt by such measures.
It is also interesting to look at the report of a member of parliament who went to the United States along with other members of this House to study their system. The purpose of the discussions was to assess the merits of their fiscal system which permits the deductibillity of mortgage interest and real estate taxes in computing incomes. The hon. member for Westmount (Mr. Johnston) had this to report on his return to Canada:
The deductibility feature certainly favours upper income earners, not only because of the progressive nature of the rate structure in the United States but also because home owners in 1976 had an average of $16,000 while renters had an average income of $7,400.
The average price per home in the United States at the present time is approximately $61,000 and 63 per cent of U.S. housing is owner-occupied with a high of 69 per cent in some areas to a low in New York State of 47 per cent. It is important to note that in Canada in 1976, 63 per cent of all households were owned, which is identical with the U.S. experience and yet no mortgage interest or real estate taxes are deductible in this country.
So without such a beautiful scheme, our performance in Canada is very good, and we do not need regressive measures to complicate the situation.
The third matter reported by the hon. member for West-mount is the following:
The recommendation of all government officials and all independent economists with whom we met was to the effect that a system of mortgage interest and real estate tax deductibility is to be avoided at all costs... The problem which they all recognized is that once incorporated in a fiscal system, the deduction is impossible to eliminate.
Then it creates all kinds of embarrassment. I have explained the so-called miracle solutions to housing problems offered by the official opposition. On the other hand, the Liberal government has come forward with the series of measures included in this bill to tackle head on some of our main housing problems.
Our approach has been discussed with and approved by the provinces. Our solutions are eagerly anticipated by municipalities, co-operative movements and various non-profit organizations in Canada. What we want to do is economically sound, fiscally responsible, relevant and 100 per cent socially just. I

February 23, 1979
Housing
do not pretend that this bill will solve all problems, but there is no doubt that it will go a long way toward doing that.
I admit that the government will soon have to be concerned about the still large number of families which live in inadequate and unsuitable housing because they cannot afford satisfactory accommodation. We will have to consider the possibility of a more general kind of aid for people who have difficulty obtaining decent accommodation. This type of aid might be in the nature of shelter allowances. I recognize that this will require a very substantial commitment of government funds, and in a period of restraint such a scheme can hardly be implemented; but the reason I am talking about such a scheme today-while I recognize that funds are not presently available-is that I want to warn Canadians that there is a better way of solving housing problems in Canada than by adopting the proposal of the Leader of the Opposition, which would be detrimental.
There is no doubt that there is a better way of solving housing problems when money is available. It seems to me that the right direction has been taken by the governments of British Columbia and New Brunswick in the introduction of their shelter allowance programs for the elderly. Those programs assist the elderly with their rental payments, to the extent that those payments exceed 25 per cent of their incomes, and it is thus possible for those people to solve their housing problems better by choosing freely in the marketplace. I sincerely hope that in the near future and as soon as our economy permits we will adopt shelter allowance systems which will provide assistance to home owners and tenants alike through payment of tax credits for shelter expenditures exceeding a certain percentage of income.
Until then, the bill now under consideration will authorize the implementation of a new non-profit housing program which has been designed to increase the housing stock for low-income Canadians and eliminate many of the disadvantages of traditional federal-provincial housing programs.
I would like to take a few more minutes to outline this program, Mr. Speaker. First of all, it will operate through non-profit organizations, whether private church organizations, philanthropic clubs, unions or other similar organizations, or public organizations set up by municipal or provincial authorities.
These organizations, when they wish to build or buy low-cost rental housing, will be privately financed by banks, trust companies or credit unions recognized under the National Housing Act. To ensure that the organizations will be able to obtain easily such mortgage loans, the federal government will provide mortgage insurance under the provisions of the National Housing Act. This insurance will cover the whole value of these properties, not only in the case of the units to be built,
[Mr. Ouellet.)
but also in the case of existing housing to be purchased and repaired.
Everyone will be allowed to reside in these dwellings. Those with higher income will pay the rental rate necessary to make the project profitable. Those who cannot afford to pay the whole amount will pay a rent proportional to their income. Since many tenants will pay a lower rent than the viable economic rent, the residential projects will operate at a loss. These operational losses will be covered by a new system of federal grants which will provide a significantly higher contribution than the one previously provided through public housing programs.
I would now like to give a brief explanation of the mathematical methods used to set the amount of federal grants and rental rates. Firstly, under federal-provincial public housing programs, it is the provincial governments which set the rentals and administer the rental projects. This is not the responsibility of the federal government which has never set rentals and has no intention of doing so, either within the existing public housing programs or under the new non-profit housing program. Earlier this year and also at the end of 1978, it was falsely suggested that the federal government was gearing to increase rentals for tenants of public housing projects, which created some concern over the disastrous effect that such increases would have on low income families. As I said, Mr. Speaker, the Canadian government does not set rentals and has no intention whatsoever to do so either in the public housing or in any other sector. Indeed, we could not increase or lower these rentals even if we wanted to, because we do not have the authority to do so, since this authority belongs primarily to municipal and provincial governments.
It is the provinces which set rentals, usually according to income-based scale. This scale varies greatly between provinces. In some, tenants pay a flat rate of 25 or 30 per cent, in others, the provincial government sets the percentage of income paid in rent. Also, the method of calculating household incomes and child benefits differs, as well as additional heating, electricity and parking costs.
Ever since 1970, the federal government has put out as guidelines for the provinces, rent scales which are based on what is considered as family income. Some provinces have made use of some of these guidelines, but not a single one of them is using them to their full potential. The rents thus proposed for housing units fully serviced, vary on the federal scale from 16.7 per cent in the case of the very low income people to 25 per cent for those with a slightly better income.
Hon. members are certainly aware of the fact that under the traditional programs of social housing, the federal government makes up jointly with the provinces for the operation deficits incurred when housing low-income people who are unable to pay commercial rates. The rent scales vary considerably from one province to the next, and so do the operation deficits. Therefore, the provinces which require their tenants to pay a
February 23, 1979

smaller share of their income for rent, run up deficits which are generally greater than those which require them to pay higher rents.
In order to treat all provinces equally, the Canadian government routinely pays, as a form of grant, any amount, however small, shown either on the provincial rent scale or on the proposed federal scale. As this scale has not been adjusted since 1970, whereas incomes, even that of the most underprivileged, have increased considerably since then, a very high proportion of tenants are receiving allocations based on 25 per cent of their income.
Mr. Speaker, most Canadians spend at least that much of their income for housing and some, especially the low-income earners who provide for their own needs without the benefit of public housing programs, spend a much greater share of their income on housing. While discussing the content of the new non-profit housing program with my colleagues, the provincial housing ministers, last year, I pointed out that there would be some advantages if they could all agree to phase over a period of time a uniform rent scale across Canada based, for instance, on a fixed rate of 25 per cent of gross income.
The provinces undertook to look into the matter and have in fact met several times in the past months to discuss this. From what transpired from their last meeting, I understand that they were unable to agree on the matter and a general consensus is therefore out of the question. This will have a very simple consequence: existing provisions will continue to be applied and each province will continue to use the scale it deems appropriate. As in the past, the federal government will pay the lesser of either the grant based on its proposed scale for public housing or the grant based on the current provincial scale. In any case, the grants should never exceed the actual operating deficit.
As provided by the new non-profit housing program, the total federal subsidy, for a particular project, will be sufficient to bring the interest rate down to 2 per cent. It will be the responsibility of the particular province to pay the other required subsidies. If a province pays a contribution which is equal to that of the federal government, the subsequent subsidies will be paid on a 50-50 basis by both governments.
The formula proposed by the Government of Canada is no doubt quite significant and very interesting, Mr. Speaker. One of the major problems faced by a non-profit organization interested in building and operating public housing units, is the interest rate it will have to pay over the years on the capital borrowed for such a project. So the decision of the Government of Canada to use its subsidy to bring down the prevailing interest rate to a fixed rate of 2 per cent is a considerable progress. It could substantially assist non-profitable organization in building and developing a greater number of housing projects.
There is no doubt that it will help if we say to those non-profitable organizations: Do not worry about the high rate
Housing
of interest you have to pay and which may go up over the years; no matter what it is, whether it be 8 per cent, 9 per cent, 10 per cent, 11 per cent, 12 per cent or even 14 per cent, I guarantee that for the duration of the project, until such time as you have reimbursed the capital, there is no doubt that we will grant you an annual subsidy to reduce that rate of interest, which may be 10 or 9 per cent, as I said, to 2 per cent. The difference between that 2 per cent and the 10 per cent or 11 per cent the market may be asking, you will receive each year in federal government grants.
Mr. Speaker, I feel that this proposal will be of considerable help, not only to the non-profitable organizations in the private sector, but also, and especially, to those in the provincial and municipal sectors. To my mind, this program is equitable from the point of view of the tenants of housing sponsored by non-profitable organizations as well as from that of both federal and provincial governments. It respects in every point the stand I have taken during consultations with the provinces and the long-term policy of the Canadian government with regard to cost-sharing housing programs set up through joint federal and provincial initiative.
All the obstacles to the integral implementation of such a program have, to my mind, been removed, and I am optimistic about the achievement of its ultimate goal, namely, the annual construction of 30,000 good housing units for those in greatest need. I could add, Mr. Speaker, that one of the main instruments in getting this new housing program under way will be the housing co-operatives that played such an important role in the last few years in giving many Canadians access to decent housing which they could not have had without their help. From the start, we were concerned about seeing to it that those co-operatives would have every opportunity to participate fully in the program, and that nothing in the administration of the program would run counter to the principles on which the co-operative movement is based.
I am pleased to announce, Mr. Speaker, that following very extensive discussions with the Canadian Co-operative Housing Foundation we have reached an agreement which will help us achieve our respective objectives concerning the administration of grants and the Financial burden of the occupants. In addition to helping these housing co-operatives, we also want to open a new avenue to make housing available to low income individuals, and that is the rationale for another important principle contained in the bill. Indeed these amendments to the act will support and give more strength to our policy of relying as much as possible on private investment for housing construction and saving public funds for the kind of help only the government is able to offer.
Obviously, neither the federal government nor provincial governments have the resources required to meet all the needs in the area of housing in Canada. We believe the private sector

February 23, 1979
Housing
has financial resources that we must utilize in a more useful way, precisely to channel private funds into the implementation of the housing program.
Mr. Speaker, my colleagues are no doubt aware that mortgage insurance under the NHA is the major tool to stimulate private investment in housing, protecting as it does the lender against losses. The legislation put forward extends the provisions of the mortgage insurance program in a number of important ways to promote private sector investments and reduce government expenditures, which indeed is in line with our policy of reducing the Canadian government deficit.
The legislation would amend mortgage insurance provisions under the National Housing Act to make graduated payment mortgages more popular in private sector lending circles. Such a loan technique is a normal development of house ownership and rental housing programs. It would enable borrowers to reduce their monthly payments during the first year of occupancy, with later stabilization in the remaining payment period. Although this type of loan might not be the universal solution to housing problems, where put to proper use by lenders and borrowers it could indeed be most useful, particularly in the case of young people who start in life with limited revenues, as most people in similar circumstances, but who have every reason to believe their financial resources will increase as they advance in life.
I am pleased to indicate this new mortgage tool is finding increasing acceptance among both borrowers and financial people. As stated in the latest CMHC report, the corporation had insured graduated payment mortgages covering some 5,000 units. The legislation further provides that where a borrower defaults on his payments under an insured graduated payment mortgage, the Central Mortgage and Housing Corporation will retake the loan and proceed with quick settlement with the lender.
Of course the Tory housing critic feels our experience in house ownership programs met with difficulties. She referred to defaults and foreclosures.
Some members opposite have asked me in the House about the percentage of defaults. They underlined the fact that according to them, about 10 per cent of those who took advantage of the Assisted Home Owership Program had defaulted. They remind me, Mr. Speaker, of that individual who complaints that his glass is 10 per cent empty when he should rejoice that it is still 90 per cent full.
There is no doubt, Mr. Speaker, that the Government of Canada took some risks with its Assisted Home Ownership Program when it encouraged certain people whose income were rather low and whose chances of becoming home owners were perhaps somewhat remote. Of course the Government of Canada took some risks, just as it is prepared to do when it offers the graduated payment mortgage and states that in case of default it will assume the debt and proceed quickly to settle with the lender. But we are prepared to take some risks,

because unlike the Conservatives who want policies for the benefit of the rich, we are prepared to implement policies which could endanger in some way the financial security of those transactions. We are prepared to take some risks for the benefit of middle income and even low-income people to allow them to take advantage, like any other Canadians, of the privilege and the opportunity to own their own house.
I do not hesitate to say that whatever criticisms the Progressive Conservative opposition may make on that issue and whatever percentage is involved, be it 2 per cent, 4 per cent, 5 per cent, or even 10 per cent, I prefer to let them play with those percentages concerning defaults and arrears. I am satisfied that we brought forward an outstanding program. Even though 10 per cent of those who benefited from those programs have failed to meet their payments, there are still another 90 per cent who did. We can be proud of that, because without this program 90 per cent of Canadians would not be home owners at present. We did not pass that motion.
In short, Mr. Speaker, I think that this bill will allow us, if it is adopted, to increase considerably the federal assistance to low-income people for the improvement of their housing. I heard the hon. member for Ottawa-Carleton (Mrs. Pigott) say that this assistance program to promote the purchase of houses was badly administered. By whom? Badly administered by that poor young couple who, some years ago, borrowed money in the hope of owning their house but who, for personal reasons, are no longer able to meet their payments, because they did not get the wage increase they expected to get, or because there was sickness in the family, or for any other personal reasons which prevented them from meeting their commitments. This has nothing to do with the Canadian government.
We said that we developed a program to promote home ownership and entered into an agreement with banking institutions so that they make funds available to Canadian borrowers while the Government of Canada granted subsidies to reduce the borrowing costs for new owners. If, unfortunately, some people could not take full advantage of the program, it is not our fault since we did not manage the program as the hon. member for Ottawa-Carleton (Mrs. Pigott) is suggesting.
We did not manage the program, we are only granting subsidies to reduce the cost for new owners. All we do is guarantee the loan made by the bank which normally, if we had not agreed to guarantee that loan, would not likely have loaned money to small or medium-income people. I think this attitude of the Progressive Conservative party which attacks such a fair and socially generous measure for small-income people to help them own their home shows clearly the true nature of that party in that they would never take a financial chance to help small-income people in Canada.
February 23, 1979

Mr. Speaker, the bill before us will, of course, contribute to increase the number of housing units. It is one of the prime objectives of the government. Furthermore, we want also, through this bill, to facilitate the restoration of Canadian residences. How many Canadians are living in an older house, that is not as comfortable and adequate as it was 10, 15, 20 or 30 years ago. But how many Canadians want to stay on living in that house because their father or grandfather lived in it, because it is located in a small town or a district where they know many people, where they feel at home!
Under its Residential Rehabilitation Assistance Program, the government has already spent millions of dollars to promote the rehabilitation of those residences. And we want to expand that program, because we believe that there is in Canada a large number of residences that are worth repairing and might be used for another 15, 20 or 30 years. It will be a cheaper way and probably a more humane way to answer the needs of those Canadian families who do not want a new house and choose to fill some holes or some cracks in the doors, the windows or the frame of their old house, who want to instal a new heating system and modernize their beautiful old house to make it more comfortable. And this bill, Mr. Speaker, specifically provides for a series of measures that will prompt the private sector to invest more in residential rehabilitation in Canada.
This bill will enable us not only to reach our goals in the housing field but also to obtain an even wider objective. It will enable the government to co-operate with other government levels so that all Canadians may live in a safe and pleasant environment. The community services program referred to in this bill is designed to carry out the second part of that commitment made by the Government of Canada which is to provide not only a good home for all Canadians, but also to give them a pleasant and secure environment. The federal aid to attain that objective will be provided so as to respect fully the levies made by municipal and provincial authorities to meet their needs and priorities and will remove most of the waste due to duplication of administrative procedures.
The community services program was discussed with the provincial minister concerned. It merges the federal assistance provided until now for neighbourhood improvements, water supply and sewage treatment facilities and for the construction of low rental and medium density housing. The federal government will continue, of course, to provide help in the form of direct grants for all those activities but it will extend from now on its assistance to a whole list of social, cultural and recreational services.
If I suggested extending the scope of the community services program it is because I realized that previous programs did not fully meet the needs of all Canadian municipalities and they needed precisely the flexibility required to allow them to have, if they so want, community and recreation centres, parks, ice rinks, child care centers, libraries, to allow them to improve
Housing
their municipal buildings as a municipal investment and to build plants for conversion of garbage into energy power and carry out all capital works considered priorities by those municipalities.
The new program, Mr. Speaker, is in line with the concept of block financing that was agreed upon by the provincial ministers at our meeting in Edmonton in February. The program provides that the federal government funds will be used for cummunity services in accordance with the purpose of the program but they will be distributed according to provincial and municipal priorities. I want to say that the various projects will not have to be approved by the Government of Canada, as was the case previously for the neighbourhood improvement program or the municipal infrastructure program. We are withdrawing all public servants in charge of the implementation, the monitoring or the administration of those programs. Finally, we are taking out one level of government in the use of those programs. We believe it is not necessary to have three levels of government represented in the management and administration of those programs. We trust municipal and provincial authorities to take care of that program by themselves. And, of course, we believe this program will meet the true priorities of Canadian municipalities much more adequately.
Mr. Speaker, I would like to conclude my remarks by saying that in general this legislation is one of the important aspects of the Canadian government's position on housing in Canada. We can indeed be proud of our past accomplishments, but we want a better future still, because we are aware that there remain housing problems in Canada and that Canadian municipalities have major priorities which must be met. It is in this spirit of co-operation with provincial and municipal authorities as well as with public or private social housing agencies that the Canadian government wants to have a part in improving the production of Canadian homes, in a better environment, in all areas of our country.
I am not suggesting that this bill meets all the needs. As I have said, there is still progress to be made, and we will be able, in time, to meet other objectives, given the proper financial resources and to the extent, of course, of our financial capability.
Also, amendments to this bill may yet have to be brought in.
I do not pretend that we have solved everything. I have already received a few recommendations for amending certain minor aspects of the act, particularly with respect to the Residential Rehabilitation Assistance Program where private financing should be made easier to obtain in order to get better results from that program.
1 know that the opposition parties will probably make proposals and introduce amendments to improve this bill. As for me, Mr. Speaker, and I say it now, any useful, constructive and worth-while proposal will be welcome and I am anxious to sit on that committee to deal with this bill clause by clause in

February 23, 1979
Housing
order to analyse it even further and if necessary to amend it in the best interest of all Canadians.
To conclude, I wish to say that it is the result of lengthy discussions with the provincial authorities. I know that they approve of this bill and 1 urge hon. members to do the same.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. I do not ask for a decision at this moment, but I wonder if I could alert the House to the fact that I have asked my friend, the Progressive Conservative House leader, whether there might be some possibility of his getting his friend, the hon. member for Burnaby-Richmond-Delta (Mr. Siddon) to postpone his private member's discussion today so that we could continue this debate and let the hon. member for Ottawa-Carleton (Mrs. Pigott) have all the time she needs, and for the spokesmen for the other parties to make their statements today. It might be useful to have all four parties on record in the same Hansard. As I say, the hon. member for Grenville-Carleton (Mr. Baker) may be able to give me an answer now or later.


Walter David Baker: Mr. Speaker, I shall certainly speak to the member who has a private member's bill but I do not think this is necessary, having regard to the continuing function of Hansard, to have the debate continued in that way. I am a little concerned about the kind of bargaining that my friend has just done in public. He came to me privately and asked if I would see whether I could arrange that, and I told him I would do my best. I do not really think it is the responsibility of opposition parties to make up for the fact that the minister perhaps went on a little long.


André Ouellet: On that point of order, Mr. Speaker, the hon. member said he felt I went on too long. I waited for almost an hour and one-half last Wednesday before starting to speak. The study of this bill was due to start at three o'clock, but I had to wait until almost 5.45 p.m. before starting to speak. I have since been interrupted twice because of adjournments. I think it is fair to say that I have done my best to deal with this bill as quickly as possible.


Mrs. Jean E. Pigott (Ottawa-Carleton):: Mr. Speaker, we on this side of the House are pleased to participate in second reading of this bill which embodies legislation to amend various sections of the National Housing Act. It is with great relief that I can finally rise in my place today on behalf of the thousands of municipalities in the provinces and the various third-sector groups who waited, some impatiently, for almost a year for this legislation to be debated and passed in this House. The minister has announced the various new programs four, five or six times-I have lost count.
Following release of the minister's new directions on housing last year, his attention, it would appear, has been on every direction except housing. He has either been preoccupied with planning an election that his leader is afraid to call or, as he
(Mr. Ouellet.]
stated this week in Toronto, he would prefer the value of the Canadian dollar to rise before doing anything except philosophize on housing problems. That includes the plight of 800,000 families who pay more than 25 per cent of their income for shelter. Everyone knows that if we waited for the Canadian dollar to rise under this government, our urban problems would multiply. A high priced dollar would make our exports more expensive, besides. Presumably his deputy minister would then have to peddle his grass huts internationally.
As I indicated earlier, it is almost a year since the minister announced his new direction. The government has deliberately contrived to schedule second reading of this bill at a time when municipalities are planning for funding following the termination of the old NIP program, and the non-profit and co-operative sectors have programs and prospects which have been unnecessarily delayed by this government's attempt to orchestrate quick passage of this bill without adequate examination and debate. But then again, careful examination and prudent lending are something that can be ignored particularly when luxury hotels are being financed with NHA money, or when the ministry directed CMHC to work on a system of patronage. The question is not so much the evolution of the policy of the lender of last resort but is a question of CMHC financing which resort. Mr. Speaker, we are not misled by this orchestration of a short time span on this bill. The minister has given a verbal commitment to the provinces that this legislation will be retroactive. He does not need to have quick passage and we intend to take as long as we can to debate this bill.
I should like to assure the Minister of Public Works and Minister of State for Urban Affairs (Mr. Ouellet) that our unqualified support could be extended, but now I cannot.
The House and the people of this nation should have an opportunity to review the history of the ministry. The minister took quite a few diversions in the last hour so I shall spend a little time on the Ministry of Urban Affairs. I believe what has happened to the ministry symbolizes the failure of this government to assume its catalytic role in the determination of a national urban strategy. From its proclamation in this parliament in June, 1971, its mandate has been unfilled.
This government, lacking in any real commitment or sustained responsibility in the urban environment, has finally played this ministry as a card in the constitutional shuffle. The minister was never more accurate than when he stated before an audience Monday that "federal housing policies and programs have always been developed in response to the needs that prevailed at any given time." What resulted from these changing responses, to any given time on which the urgent drove out the important, was considerable confusion as to what assistance was available, what assistance had been withdrawn, and what the implementation dates were that were constantly being revised.
I wonder, sometimes, whether the minister has ever gone to see the mess he has created in some of the regions of the country. In more cases than not, "urgent" meant "elections" or "empire reorganization". There was never any continuity and stability in program operation. This prompted one provin-
February 23, 1979

cial official to state that Ottawa should get out of the numbers game and commit themselves to supporting longer-term principles and goals. He commented that the numbers can change or be reviewed every year, but the principles should remain.
The ministry was established to co-ordinate between federal agencies. It was to initiate policy proposal and evaluate both established federal policies affecting urban Canada, and proposals for change. It was to foster co-operative relationship in respect of urban affairs with the provinces and, through them, their municipalities, and with the public and private organizations. Certainly not least, it was to initiate, conduct, co-ordinate and recommend research related to urbanization.
It is interesting to note what transpired. In 1973 the government directed that a senior interdepartmental committee on urban affairs be established at the deputy minister level to co-ordinate government involvement in urban affairs. That committee, from all accounts, never met.
The policy research function of the ministry which is central to its mandate, hardly exists, if it exists at all. This led one former director general of the ministry to state publicly:
There is an irresistible presumption in the events of the past eight years that Trudeau rationalism, in so far as the urban policy field is concerned, has gone full circle, and we are back to politics as usual.
Indeed let us hope that the research people in the ministry can come up with some answers for the minister's new found concern for shelter allowances.
I have so many studies here. They are all the studies that have been done for mortgage interest deductibility. I have another one here for property tax. It is too bad. They were all ready to put in the budget, but the Leader of the Opposition (Mr. Clark) took them first.


Some hon. Members:: Hear, hear!


Jean Elizabeth Pigott: These studies are all from the minister's department. Some of them are from the Minister of Finance (Mr. Chretien).


Some hon. Members:: Oh, oh!


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


André Ouellet: Mr. Speaker, I rise on a point of order. I want to remind the hon. member that indeed a government which has-


James Aloysius McGrath: Mr. Speaker, that is debate. It is not a point of order. You cannot interrupt the speech of an hon. member like that.


The Acting Speaker (Mr. Ethier):: Order, please. In all fairness hon. members should allow the Chair to hear what the minister has to say, and I will make the decision based on his submission.


André Ouellet: Mr. Speaker, I will say it in French because it will be easier for me and I will be able to say it more directly.
Housing
The hon. member speaks about studies made by my department. It is obvious that my department carried out a great number of studies and there is a basic difference between studies and a government decision. If this matter has been studied it was precisely to find out after the study that it was a bad solution to this problem.


Jean Elizabeth Pigott: Mr. Speaker, I have more on this one and I will come back to it.
If the minister would remove his people from working on the polls and surveys that should more properly be done by Mr. Goldfarb, he would produce those figures or numbers which he could not elaborate on on Monday. Perhaps I could read what the Citizen reported last night under the heading "Ad Hoc Largesse on Housing."
The federal Liberals are clearly stung by the popularity of the Tories' mortgage-interest deductibility plan. Nothing else can account for Urban Affairs Minister Andre Ouellet saying that the government hopes to introduce a tax credit for home owners and tenants-
This was not a bombshell from Ouellet. It was more like a puffball, full as it was of equivocation and pre-election resentment of Joe Clark's success with his scheme.
The Liberals will not get far by denouncing the Conservative deductibility plan as "expensive, unfair and wasteful," when the vast majority of Canadian
home owners and aspiring home owners think it's the greatest thing since insulation.
Ouellet's pious venture into generalities about this form of housing subsidy falls flat when compared with the Tory idea for the simple reason that it will contribute little to revitalizing the important sectors of the economy that mortgage-interest deductibility will help.
That is what our plan is all about. It is to get this country back to work again.
The article goes on to say:
Furthermore, Ouellet's concept duplicates some of the programs already in existence at the provincial level-
They are always trying to steal provincial material. The article continues:
-and therefore looks like just a piece of ad hoc Liberal largesse in time for the electoral onslaught.
I have another article here. I think these are very good articles for the minister to hear. This is from the Journal for February 22, 1979. It appears in the editorial section under the heading Tax Credit 'concept'-Yes, Please, No Details":
'I'm not going to give you any figures. I'm talking about a concept and I'm not going to get bogged down in detail,' said Andre Ouellet, the federal urban affairs minister-
The article continues:
Mr. Ouellet was right about one thing. There was no need to get bogged down in detail because he was already bogged down in general. The 'concept' is just not airworthy, and it should be left on the ground where it belongs or, better still, buried.
In conclusion, the article reads:
Mr. Ouellet should stick to his vow about no details on his idea. Enough has already been heard.


An hon. Member:: Well said.


Jean Elizabeth Pigott: Yes, it is well said.
3554

February 23, 1979
Housing
One of the hallmarks of this ministry has been management by the revolving door.


Some hon. Members:: Oh, oh!


Jean Elizabeth Pigott: It seems that the Minister of Employment and Immigration (Mr. Cullen) is interested in these articles. I have some for him too.
There have been four ministers and there has been a cavalry of directors and employees of the ministry who have resigned in frustration or who have been fired during the course of the numerous reorganizations under the minister's deputy minister. One thing is clear. Anyone may disagree with particular details about the workings of this ministry and may deliver their own judgment about its failure, but I am confident that no amount of manipulation can get around the stark conclusion that it has been politics as usual at the ministry and that our urban policies are unfulfilled. When leadership and a commitment to an over-all national urban policy were called for, the government failed to appreciate the complexities of modern municipal administration and the participatory requirements of our evolving democracy. The "just society" under this government was characterized by programs just too little, just too late, just too complicated, and damned expensive.
The way this minister worked out participatory democracy was characterized by these nocturnal news releases and government by the eleven o'clock news. A flurry of telexes-


Some hon. Members:: Oh, oh!


Jean Elizabeth Pigott: My remarks seem to be hurting the hon. member for Welland (Mr. Railton). There has been a flurry of telexes to provincial capitals after the fact, and informing rather than consulting provincial governments of federal intentions.
It is interesting to note that the Prime Minister (Mr. Trudeau) has given at least several different reasons for disbanding the Ministry of State for Urban Affairs. One wonders to what extent the Auditor General's criteria of effectiveness, efficiency and economy affected the analysis and decision to disband this agency. It is most surprising that no studies that I am aware of regarding the basis of this decision have been made public. There is no word from this minister in all of his speeches about what is going to happen regarding the concerns for urban policy. But we will take care of that later, of course. It probably would not matter anyway considering the view of the assistant secretary of the urban analysis branch who is quoted as saying, "I'd hate to see an audit done on everything ordered by cabinet".
Regardless of this, Mr. Speaker, I think I speak for most members of the House and a number of persons and agencies outside government when I say we are waiting most anxiously for a summary of seven years' of work by our best urban experts at a cost of millions of dollars. I think it is important following the eventual transition of government to this party that we avoid any duplication of research projects. The minis-
[Mrs. Pigott.l
ter has proposed various amendments to the National Housing Act that pertain to this government's new direction in low income and social housing.
Central Mortgage and Housing's 1977 capital budget approved by this government totalled $1.8 billion. Actual commitments for that year amounted to $1.3 billion due, in part, according to the annual report, to a lack of response to the social housing programs already in play. So it is not surprising that the programs have been revamped. In many respects the new low income housing programs are singular examples of meeting the growing backlog of need in this sector. It seems very strange the Liberals only quote figures when they go the way they want them to go, but never when we are on the winning side.


Jack Sydney George (Bud) Cullen: It happens so seldom.


Jean Elizabeth Pigott: We have been doing very well. Do not worry. All you have to do is take a look at what is happening in the Toronto area.
There are an estimated 155,000 households in Canada with very serious housing problems, paying too much for substandard, crowded accommodation. An additional 438,000 are paying over 30 per cent for shelter. I am so glad the minister and I agree on these figures.
If we consider the normal expenditure ratio employed today, which is 25 per cent, that figure then balloons to 800,000 persons. However, it is revealing to note that one of the principal suggestions contained in a confidential study by the interdepartmental committee on social policy on shelter is that poor people living in public housing may soon have to pay 30 per cent. I hope that it does not make the minister uncomfortable to hear this so close to an election, but he must admit that it was a policy which was announced early last year and then quietly dropped in the summer. A lot of people have not forgotten.
The government makes a big deal out of the fact that it has met provincial requests to disentangle from overlapping administration procedures. Let me make it quite clear that it is only in those areas where principal funding has been shifted to the private sector that the federal government has withdrawn.
I hope that many of the Liberal backbenchers who live in the province of Quebec will realize how unfair this is going to be. It will not affect the Montreal or Quebec city market, but it will definitely affect the rural areas.
In a single area where the federal government retained a capital commitment under section 40, provincial governments still view this as an intrusion into their jurisdiction. Moreover, to qualify for federal contributions, loans and insurance, provincial and municipal housing agents are required to expend enormous resources to provide the mountain of information still requested by Central Mortgage and Housing.
February 23, 1979

The specific instruments for achieving disentanglement, and hence the programs, would be federal and provincial master agreements which would be prepared and signed annually with each province. To date there is anything but unanimous agreement, and only three or four provinces have actually signed.
While recognition of the value of the third-sector groups is long overdue, it is imperative that management skills and training be provided and insured through an adequately funded community resource fund program. A national urban policy must be sensitive to the fundamental social ties that bind human communities together by placing a clear new emphasis upon restoration of a sense of community through the reinforcement and preservation of communities.
Neighbourhood and voluntary non-profit groups have made impressive efforts to renew their communities in many parts of this country. Despite lack of funds and at times a lack of support from outside the community, neighbourhood-based revitalized activities have shown great signs of progress and must be encouraged.
The federal government has failed to help strengthen and expand neighbourhood and voluntary group efforts at selfhelp. It has failed to encourage cities to grant neighbourhood and non-profit voluntary groups the opportunity to participate in planning and implementing community-oriented programs. It should begin to encourage cities more actively to use the knowledge and energy of neighbourhood volunteers and the expertise of neighbourhood group leaders and staff. From all appearances, it is evident that the government is still intent on subsidizing the housing unit when it would be more useful to explore the possibility of extending federal funds, particularly as regards senior citizens, to the provinces via the global funding formula for the purpose of subsidizing incomes on the British Columbia or New Brunswick model. I was grateful to hear the minister speak of both these models which are ways that we must go in the future with other programs such as these.
One thing was made clear this week when the minister philosophized about his shelter allowance scheme. He stated that if the dollar improved, if government revenues increase, and if everything else was just ideal, he would commit his government to a housing program to alleviate the present problem. What is clear, Mr. Speaker, is that housing is not a priority of this government and that urban planning is not a priority of this government.
As stated by Mr. Hellyer, who is a former Liberal cabinet minister and a member of the federal housing task force:
If the federal government were really serious about housing costs it would move heaven and earth to assist municipalities, including the provision of cheap money for the installation of municipal services. But it proposes, instead, to concentrate on treating the symptoms rather than the disease. And that is the reason for the mushrooming bureaucracy and astronomical subsidies that have failed to do the job.
The Residential Rehabilitation Assistance Program has been to a large extent one of the more innovative and successful programs administered by CMHC. The program has been applauded from all areas of the country. The government has
Housing
recognized and responded to its biggest challenges. It was formerly extended only to those areas and neighbourhoods designated within a neighbourhood improvement program area; the NIP program. So what has this government done? First of all, the minister has announced publicly in this House and in committee that the program would now be universal, open to everyone. The Federation of Canadian Municipalities were moved to extend laurels to the minister for proposed changes which would enable this program to exist on a nationwide basis. However, this respected federation and the Canadian public succumbed to one of the biggest deceptions ever perpetrated by this government. In a confidential memo between the minister and the president of CMHC it is clear that the RRAP program is anything but universal.
I have here a memorandum addressed to the minister from Mr. R. V. Hession, the president of CMHC, the rationing of funds for the Residential Rehabilitation Assistance Program. I quote:
I am writing in regard to the availability of funds under the Residential Rehabilitation Assistance Program. Since the announcement of December 12, 1978 about the proposed removal of statutory area constraints on the program, we have been receiving calls from the media and members of the public at large on this subject, and it is important that we know how best to respond.
In 1978, we committed $82 million in urban NIP and special designated areas. Of this, $45 million was for rental RRAP, for which we will have no need for capital provisions in 1979. The other $37 million committed last year was for home owners.
The 1979 capital budget is $56 million. We will need $37 million to maintain activity in the existing designated areas where work has already begun. A further $3 million will be needed to deal with areas already designated but where work has not started. This leaves $16 million of the 1979 budget for new initiatives. However, 68 areas have submitted final applications for designation under the 1978 rules. After the new law comes into effect, they will not need order in council designation, but they will warrant some priority attention. These 68 areas will require at least $7 million. Thus only $9 million for some 2,250 units remains for work under the terms of the new program criteria once the bill is passed. This is a fairly modest amount and we should avoid raising expectations which we cannot satisfy.
You realize I am sure that neither the industry nor the municipal delivery system nor the present and projected RRAP budget permit the operation of a universal program in the specific sense that anyone, any day of the week can walk into a municipal office and be served. If people interpret universal to mean this, they are bound to be disappointed.


André Ouellet: Read the next paragraph.


Jean Elizabeth Pigott: All right, I will read the whole thing.
There can and should be a universal program in three senses, however:
1.	any one of the over two million housing units in need of modernization aid should be able to secure a loan at reasonable interest insured under the National Housing Act;
2.	based on the criteria already in place, these units and others should be able to receive federal grant assistance-
3.	based on a phased program addressing the worst conditions first over a ten-year period, the 200,000-400,000 dwellings in need of serious upgrading and occupied by lower income people should be brought up to maintenance and occupancy standards-
Of course, that will be under our government so we will do it. I will read the last one:
What it means in the briefest terms is that while a considerable number of people can take action in the near future, because their areas and homes are in bad shape, others will need to wait for a while. It also means that rehabilitation

February 23, 1979
Housing
effort will continue to be concentrated in specified action areas as in the past, but as a matter of policy, not formal legislation.


An hon. Member:: And not universal.


Jean Elizabeth Pigott: Don't you love those universal programs? In summary, then, in view of the minister's own figures that 25 per cent of the Canadian housing stock is over 20 years old and in light of his reduced-and unmentioned-budget of $56 million, I can only assume that this minister and this government live in a universe of their own. What is necessary is a long-term strategy combining housing needs, financial resorces, and the capabilities of government and industry in an effort to redress the inadequate housing policies of this government.
With respect to native people on reserves, total new construction to eliminate the present backlog and meet the next five-year needs is 23,000 units, while the total number of major renovations in the same period is 30,000 units. These requirements represent an annual construction rate of 4,500 new units compared with a recent average of approximately 2,400 units per year, and a need for approximately 6,000 major renovations per year compared with a recent rate of 1,800 units per year. During the debate my colleagues will comment much more on the great need for housing for Indians.
With all due respect to the minister, I realize he has very much on his mind while getting ready for the election. I think that is why he is in a hurry but, please, let us be realistic, and let us commit ourselves to a long-term strategy for renovation which in many ways would act as the cornerstone in any urban renewal project. We all realize it cannot be done overnight, but in committee we intend to discuss additional avenues open to the government to adopt such a strategy.
Finally, with regard to RRAP, I question why we should discriminate against the landlord when the success of this program has been that it has ensured a steady increase in the number of renovated units in some of our older neighbourhoods. More about that in the committee.
One of the remaining elements in the bill emphasizes new and expanded use of NHA mortgage insurance. In point of fact the aggregate maximum of loan insurance has been increased to $40 billion. In the committee we will want the minister to give us much more information on this clause.
AHOP has been dropped in favour of a graduated mortgage payment. The minister knows, and I know, that major lending institutions do not support this financing technique, and to gain this support the government proposes to implement a quick settlement package. In the words of one analyst, and I quote:
There are no longer any checks and balances; no rules for circumspection. The borrowers can borrow with hardly any money down. The lenders can lend with scant attention to risk. And CMHC can subsidize with magnanimous indifference.
On the one hand, we have the Minister of Finance who wants to continue to wrestle inflation to the ground and, on the

other hand, we have the Minister of State for Urban Affairs phasing in a graduated mortgage payment based on future inflationary increases in prices and incomes. The minister is putting people in an incredible bind. Under this government that is all that has been achieved. The 1971 housing dollar is worth 48.2 cents.
The cost of housing has not even been addressed in this bill. That is very serious. This week the minister announced to an audience of Toronto home builders that he was increasing the maximum NHA lending price to $70,000. Imagine, $70,000! The mayor of Toronto spoke prior to the minister that day, and he indicated that under the old price-lending structure less than 10 per cent of the families in metro Toronto had incomes which would permit them to purchase new housing. The minister has lived in a vacuum somewhere. He criticizes our leader's mortgage interest deduction proposal, but he forgets that of the 67 per cent of the Canadian people who had incomes under $18,000 in 1976, only 5 per cent could borrow $25,000. The minister and his rich! He forgets. I am very eager to see what happens to the minister when he goes out to union halls and into poor districts and talks against our mortgage interest deductibility proposal.


André Ouellet: I will.


Jean Elizabeth Pigott: On Wednesday Liberal candidates in Toronto begged the government to bring in a property tax deduction, remove tax from building supplies, or at least do something about ARPs and MURBs to relieve the rental situation. The minister did not do a thing. On whatever night it was the minister returned I overheard two Liberal backbenchers out in the lobby saying, "Ouellet just hammered nails in our coffins in the Toronto area."


Donald W. Munro: You are a great
carpenter.


Jean Elizabeth Pigott: Poor Toronto!


Some hon. Members:: Oh, oh!


Jean Elizabeth Pigott: Hon. members opposite should not quote figures given by the Minister of Finance. He has not yet in this session been right about a figure. He has never been right. I have some good studies too. I have one wonderful study entitled "The Mid-Term Implications of Mortgage Interest and Property Tax Deductions for the Government" by one of the learned people in our country. We said $1.6 million. This person is saying that at the end of the first year it would cost $63 million, $259 million the next, $684 million the next, and then $1.77 billion. The figures are getting better for us all the time. Those poor Liberals. Let them go to Ontario; I do not mind.


Mr. Douglas (Bruce-Grey):: What did they tell you when you were in Washington?


Jean Elizabeth Pigott: The minister is always talking about Mr. Smith. Mr. Smith went to Washington. Something happened to him there, too, but we went to Washington, and it was just
February 23, 1979

great. Every economist and every revenue fellow said, "Don't do it, but-"


Crawford Douglas: "Don't do it".


Jean Elizabeth Pigott: No, they did not say that. They told me that the American dream is to own your own home, no matter what bracket you are in.


Bob Rae: You said that.


Jean Elizabeth Pigott: Just a second. Marjorie Nichols, the politicians, and all the economists said it too. The hon. member can go anywhere in this country asking what the Canadian dream is, and he will find that the Canadian dream is to own. The hon. member's party does not care. It does not recognize that. It just wants to give away. The Minister of Industry, Trade and Commerce (Mr. Horner), with his big ranch, said that owning a home is a luxury.


Dean Waldon Whiteway: It is a dream to own a house, and the nightmare is this government.


Jean Elizabeth Pigott: The Minister of Finance claimed some months ago that the money which was spent under the present government was spent to build houses and increase supply, not to create expectations and demand for higher prices. In fact, scarcities of serviced lots and high carrying costs due to zoning delays, combined with this government's own demand initiatives, have resulted in unparalleled housing inflation in the past four years. The average resale price for housing for the period-and this is the period of this government-from 1973 to 1977 increased by $21,000, or 67 per cent. The average cost of a new NHA single attached dwelling in that four-year period increased $16,600, or 39 per cent. As I indicated earlier, the net effect is that the purchasing power of the 1971 housing dollar-the dollar of the Prime Minister and the Minister of Finance-is less than 50 cents today.
This problem is compounded by the fact that residential construction activity is bound to decline if the current large inventory of newly constructed but unoccupied dwelling units is not absorbed. To compensate for this decline in residential building activity the minister has encouraged the home building industry to become actively involved in the new co-operative and non-profit form of housing. However, in a speech in Windsor late last year Mr. Robert Adamson of the Central Mortgage and Housing Corporation indicated that, and I quote:
While the new non-profit program promises to do a better job of bringing adequate accommodation-


The Acting Speaker (Mr. Ethier):: Order. It being four o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions, public bills and private bills.
________________________________3557
Air Transportation


PRIVATE MEMBERS' MOTIONS
The Acting Speaker (Mr. Ethier):: Item No. 7, the hon. member for Renfrew North-Nipissing East (Mr. Hopkins). Shall the item stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand by unanimous consent.
Item No. 9, the hon. member for Ottawa-Carleton (Mrs. Pigott). Shall the item stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand by unanimous consent.


AIR TRANSPORT
Mr. Thomas Siddon (Burnaby-Richmond-Delta) moved:: That, in the opinion of this House, the government should take steps to end the near-monopoly of major national air routes by Air Canada and permit private airlines to compete on a more equitable basis with Air Canada, and, that permission should be granted to CP Air to extend its transcontinental service to Halifax.
He said: Mr. Speaker, it gives me pleasure to present this motion this afternoon and to discuss for a few moments the three portions of the motion in sequence.
This motion cites the failure by the government opposite to implement a competitive air transportation policy which would recognize the legitimate and rightful aspirations of our private airlines. Indeed, this motion indicts the government for its repeated refusal to pay more than lip service to the common sense principle that private sector airlines be allowed greater freedom to compete with Air Canada.
To be more specific, we in the Progressive Conservative party believe that privately financed airlines should be entitled to a much greater share of the air transportation business in Canada and that future growth mut be directed almost entirely toward these privately-owned enterprises.
At the outset I want to make it clear that the thrust of our argument should in no way be construed as a criticism of Air Canada. In fact in my own riding of Burnaby-Richmond-Del-ta, Air Canada personnel are very active, and I and many of my colleagues on this side of the House enjoy travelling with Air Canada personnel on a weekly basis for many hours. I know the local management of Air Canada in Vancouver, and we on this side of the House are extremely pleased with the senior management of Air Canada as represented by Mr. COMMONS DEBATES
February 23, 1979
Air Transportation
Claude Taylor. Indeed, we could do well with more people like Claude Taylor in this government.
I single out CP Air in the first part of my motion because it is tremendously important to western Canada, but also because it has been identified, as a consequence of transcontinental air policies introduced in the mid-1960s, as the sole second transcontinental air carrier in this country.
CP Air pumps over $280 million annually into the economy of British Columbia and over $1 million of tax revenue into my constituency. It employs over 4,500 people there. By comparison, Air Canada employs 800 people in British Columbia, roughly speaking, and approximately 15,000 in and around the city of Montreal. So if we from the west tend to have some affinity for CP Air, I suppose we have a legitimate reason for it.
The thrust of this motion is not to advocate a reduction of Air Canada's services but rather to ask: should the regional and transcontinental air services in Canada be dominated by one large and centralized national airline? We have only to look at the crippling effects which strikes impose upon our air services to conclude that we should not allow a dominant role to be played by one large nationalized airline in providing air services in this country. The thrust of this motion is that CP Air and regional airlines should enjoy virtually 100 per cent of the future growth at least for the next few years.
I indicated that there were three parts to the motion, and I would like to speak to them in turn. The first section of the motion reads as follows:
That, in the opinion of this House, the government should take steps to end the near-monopoly of major national air routes-
By that I mean the monopoly of transcontinental routes enjoyed by Air Canada. Indeed, I note that recently Mr. Claude Taylor told the press that Air Canada did not enjoy a monopoly. But under the transcontinental policy for the division of services between Air Canada and CP Air as set out in 1977, CP Air was granted only 25 per cent of transcontinental services and Air Canada was granted 75 per cent. If that is not a near-monopoly, I do not know what is.
I should like to read now from a press release put out by the Air Canada information services in September of 1978, a document which surprised me indeed because it sounded more political than factual. In fact there are a few games with numbers here, which surprise because my engineering and scientific background has taught me to trust numbers. But having sat in the House for some weeks and having heard the comments of my colleague, the hon. member for Ottawa-Carleton (Mrs. Pigott), and having witnessed the introduction of the estimates by the President of the Treasury Board (Mr. Buchanan) on Monday evening, I have to believe that numbers do not always tell the truth. There are many games that can be played with numbers, as all hon. members well know. I will read, from this press release issued in September of 1978, a statement relative to CP Air. It is entitled "Air Canada/CP Air Transcontinental Share" and it reads:
[Mr. Siddon.1
-they haven't mounted the full capacity to which they were entitled under government regulations.
In fact they haven't put up their allowable capacity in the past five years.
That is absolutely untrue. CP Air has produced approximately 95 per cent of their allowed capacity in terms of seat-mile service each year since 1975. So any suggestion that they have not put up their allowable capacity is patently untrue. No airline regulated by the Canadian Transport Commission would risk putting up 100 per cent of its capacity because if it put up one extra flight a week, it could well go over the allowed limit and thus contravene their operating licence.
Recently the Minister of Transport (Mr. Lang) has announced an increase to CP Air of some 35 per cent of the growth in transcontinental air traffic for 1978, and 45 per cent of the increase in 1979. That has allowed CP Air to enjoy slightly more of the pie. They now enjoy 27 per cent as opposed to 25 per cent.
I would like to read another portion of the same press release as follows:
Taking only the two companies' major pairs of points, Air Canada currently provides about 60 per cent of the capacity while CP Air provides 40 per cent.
That too is a game with numbers, and it is patently untrue. The next statement reads that if all of Air Canada's services are added, they enjoy 77.5 per cent of the services. So it all depends on how you play with the numbers.
I would like to refer now to the final paragraph of this press release from Air Canada which states:
It should be noted that CP Air picks and chooses the routes it will serve at a frequency giving maximum return.
This is an old chestnut. It is sometimes claimed that Air Canada must serve small traffic centres, while CP Air has been accused of not serving its share of the small traffic generating points in Canada compared with Air Canada. In fact the direct opposite is true. CP Air serves only eight of the top 20 cities in Canada versus Air Canada's 19 of the top 20 cities, and CP Air serves seven of the 45 smaller cities, versus Air Canada's service to only four of them. So of the smallest served, the least frequently served of the 85 airports in Canada, CP Air serves twice as many as does Air Canada. So much for the old chestnut.
Another statement from this presumably correct press release is the following:
For example CP Air provides absolutely no service to Saskatchewan.
Indeed, they do not provide any service to Saskatchewan. They have never been asked to or invited to apply for a licence. In fact at present I understand the volume would not justify it.
I submit that CP Air is the only other transcontinental airline which should be allowed to provide at least 50 per cent of the transcontinental traffic in Canada in the future, and that increase should be gradually phased in over a reasonable period of time.
CP Air is ready to provide service to Halifax, which is the essence of the third portion of my motion, and is also interest-
February 23, 1979

ed in the possibility of providing competitive air service into Thunder Bay.
There is another statistic that might be very interesting to this House. Since 1955 CP Air has transferred 5,700 route miles to regional carriers in Canada, whereas on the other hand Air Canada has transferred only 1,600 route miles. Something is out of whack here, Mr. Speaker. The airline which enjoys prominence in Canada's transcontinental route gives up 1,600 miles, and the airline which enjoys only one-third as much traffic volume gives up more than three times that many route miles. I think something is rather unbalanced, and I believe that statistic to be true.
The second part of my motion states that:
-the government should take steps to ... permit private airlines to compete on a more equitable basis with Air Canada-
Here 1 am referring to regional policy and third-level air transportation policies which we ought to have in this country. Indeed, in spite of the promises made in this House by the Minister of Transport five years ago, he has yet to set out a policy for third-level air carriers, and the policy relative to regional air service is old and outdated, having been introduced in 1966.
The regional air carriers in Canada are operating in a vacuum. What does the future hold in store for Transair, Pacific Western, Wardair, Great Lakes, Nordair, Quebecair and Eastern Provincial? What does the future hold in store for those airlines? The Minister of Transport is not telling them, and neither is the Canadian Transport Commission.
One thing is certain, and that is the following, the regionals called recently for an immediate review of government policy affecting the future of regional airlines. Something else these regional airlines have suggested is that transcontinental carriers give up some of their route miles to regional carriers on a responsible phase basis.
If you look at the statistics they suggest that CP Air has already given up three times as many route miles as Air Canada. Which should be the first airline to give up some route miles?
I note a headline in a February issue of the Globe and Mail with a picture of Claude Taylor beneath it, which states:
Air Canada president Claude Taylor believes that competition is a two-way street and warns that his airline will be a tough competitor.
That sounds good, but then we start picking up ads in different newspapers. Here is one that says "There's no better choice from Ottawa", and goes on to state:
If your business takes you west, take one of our business machines for the fastest, most frequent service.
Of course that is true because only Air Canada gives you one-stop through service each morning and evening to Vancouver. The ad goes on to state that only Air Canada gives you daily non-stop service to Calgary, and to Edmonton only Air Canada offers daily non-stops. To Winnipeg only Air Canada offers three daily non-stops.
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Let us look at another recent advertisement with a picture of a large fleet of 20 DC9s flying from Ottawa to Toronto. The heading below the picture states "Up to 20 flights a day to and from Toronto". The ad itself goes on to state:
Flights every hour, every week-day, so it's easy to remember the schedule.
I am not attacking Air Canada. I am trying merely to point out here that the Toronto-Ottawa route should properly be viewed as a regional route, as should the Toronto to Montreal route. In fact on the Montreal-Toronto route Air Canada has 30 daily flights, CP has four, and other airlines offer four. On the Toronto-Ottawa flight on the daily "Rapidair" service Air Canada offers 20, once per hour, while other airlines offer four, and CP Air is allowed two. Something is very disproportionate here. This is not a transcontinental airline operation; this is a regional air service and ought rightly to be performed by a private sector airline.
We were all pleased to note that Air Canada is thinking of going private and, indeed, is about to pay or has recently paid its first return to the public purse, amounting to a 4 per cent return on the recent recapitalization of $330 million. I take Mr. Taylor at his word, and I think his record and performance as president of Air Canada have been outstanding, when he suggests the government might want to sell Air Canada. I submit that it should sell Air Canada immediately. It should sell the government's equity through recapitalization, that is, the $330 million used under the restructuring legislation approved by this House in the past year. I suggest that $330 million in capital equity ought to be sold to the private sector in the form of shares to let all Canadians have the chance to own a bigger piece of Air Canada at their discretion rather than by decree.
Finally, the third part of my motion recommends that permission be granted to CP Air to extend its transcontinental service to Halifax. In fact the minister responsible, the Minister of Transport, made a grandiose gesture last November to the effect that he had no objection to allowing the CTC to consider extending CP Air routes east of Montreal. This is very strange coming from the same minister who has delayed repeated requests from CP Air to have its applications received. Be that as it may, the minister has now condescended to receive the application from CP Air, but for the present CP Air is going through the monstrous task of filling out innumerable forms and filing innumerable affidavits in order to prepare itself to appear before the CTC to advance its cause. There again is an example of the problems which our private sector airlines have to contend with when they are dealing with transport regulations in this country-tedious, copious quantities of form filling and red tape.
Referring to the Halifax connection, as I understand it there is absolutely no potential conflict with services into Halifax provided by Eastern Provincial Airways out of Montreal. CP Air is applying for the right to serve Halifax from Toronto only, so it can, indeed, enjoy the title with Air Canada of a transcontinental airline, which means from one side of the continent to the other.

February 23, 1979
Air Transportation
The petitions that CP Air has forwarded to the minister over many recent months have been supported by strong appeals from the chambers of commerce and the city council of Halifax. Indeed, there is no objection and, in fact, there is a strong desire on the part of locals in Halifax that this application be approved. Indeed, the people of Halifax were concerned during a recent Air Canada strike because they lost their service, and it is high time there was an alternative direct connection with Toronto.
In the long-term, CP Air envisages flights to Europe via Halifax. I believe the citizens of Halifax would welcome as long overdue the opportunity to fly to Europe without flying back to Montreal first.
Those are the three elements of my motion. I see I have about one minute left. I would just like to summarize by indicating that on this side of the House we believe that the Canadian Transport Commission has no clearcut regional air transportation policies, and the decisions it makes appear to be based on ad hoc guidelines. There are no specific operating guidelines. The onus seems to be on the applicants to devote tremendous time and cost to the preparation of copious forms and documents to support their applications.
We in the Progressive Conservative party when we form the government will undertake a program of controlled de-regulation. We do not advocate overnight de-regulation along the lines of the recent experiment in the United States, but when one looks to the success of that experiment one has to feel that perhaps there is a lot to be said for allowing much more competition among private sector airlines.
[ Translation]


Mr. Raymond Savard (Verdun):: Mr. Speaker, I am pleased to reply to the hon. member for Burnaby-Richmond-Delta (Mr. Siddon) who has moved a motion advocating greater competition for Air Canada. It has been moved that the government should take steps to end the near-monopoly of major national air routes by Air Canada; that private airlines should be permitted to compete on a more equitable basis with Air Canada, and, finally, that permission should be granted to CP Air to extend its transcontinental service to Halifax. I want to say, immediately, Mr. Speaker, that I consider the steps the hon. member for Burnaby-Richmond-Delta has proposed the government take have merit. Indeed, they have such considerable merit that the government has already taken the very actions proposed by him.
As long ago as 1976, it was recognized that certain changes of the kind proposed in the first part of the member's motion could and should be made with respect to Air Canada's role. That is why the government prepared new legislation concerning Air Canada. On October 28, 1976 a new "act respecting the reorganization of Air Canada" was given first reading in this House. The Air Canada Act, 1977, was subsequently assented to on February 2, 1978. That legislation served, among other things, to put Air Canada on the same basis as other carriers in obtaining licence authority for new routes
[Mr. Siddon. 1
before the Canadian Transport Commission. Or, as the hon. member has expressed it, this act permitted private airlines to compete on a more equitable basis with Air Canada. I will explain this in some detail later.
Having said that, Mr. Speaker, I would like to challenge the allegation that Air Canada has a "near-monopoly of major national air routes". I believe that the facts suggest otherwise and I will present some in a few moments to show why. Finally, Mr. Speaker, the hon. member moved that permission be granted to CP Air to extend its transcontinental services to Halifax. In fact, on November 7, 1978, the Minister of Transport (Mr. Lang) announced that the government has no objection to CP Air applying to the Canadian Transport Commission to operate into the Atlantic provinces, in conformity with the CTC's regulatory requirements.
I would like to examine the three parts of this motion in some detail, Mr. Speaker. I will begin with the first part of it: that the government should take steps to end the near-monopoly of major national air routes by Air Canada. I suggest that this part of the motion is more an allegation than a proposed action. It is an allegation that Air Canada does, in fact, have "a near-monopoly on major national air routes". I suggest that we should examine this allegation closely.
What is a "near-monopoly"? A monopoly is, literally, exclusive possession or control. So I suppose that a "near-monopoly" is exclusive possession or control of most, but not quite all, the major national air routes.
Next, we must try to determine what a "major national air route" is. There is no single accepted definition of a major national air route and I do not know what definition the hon. member may have in mind. I would therefore like to suggest three different ways in which "a major national air route" might be defined and to discuss these with reference to Air Canada's alleged monopoly of them.
One definition of a national air route-perhaps almost too facile a definition-is a route which stretches across the entire country, a route from sea to sea that links major cities on the east coast with major centres on the west coast. Let us look at a few examples of such routes to see just what kind of a monopoly Air Canada has. First, St. John's to Victoria: no carrier, of course, offers a direct flight between these two cities. It is necessary to make connections. Air Canada, as the national carrier, naturally provides a service between these two provincial capitals, connecting in Montreal or Toronto. But it is also possible to fly on Eastern Provincial Airways to Montreal-though, granted, not on a direct flight-and the rest of the way on CP Air. The same possibilities exist between Halifax and Vancouver.
Certain other east to west coast linkages are not, in fact, totally served by Air Canada. From, say, Charlottetown or Moncton to Prince Rupert or Kamloops, it is necessary to
February 23, 1979

travel on carriers other than Air Canada part of the way. This is because Air Canada is not intended to serve all centres. Under Canadian air transportation policy, other carriers are intended to serve such centres. This means that Air Canada cannot possibly have a near-monopoly on all east to west coast routes. More will be said about the roles of Air Canada and the other carriers later.
A second way of defining "major national air routes" would be to look at those city pairs which generated the greatest numbers of passengers travelling between them. In 1977, the latest year for which complete figures are available, the following city-pairs, in the order of their ranking, experienced the highest traffic volumes: Montreal-Toronto, Ottawa-Toronto, Calgary-Edmonton, Toronto-Vancouver, Calgary-Vancouver, Edmonton-Vancouver, Toronto-Winnipeg, Calgary-Toronto, Halifax-Toronto and Edmonton-Toronto.
1 would like to examine each of these high traffic routes to see whether they are served by other scheduled air carriers or whether Air Canada has a monopolistic grip on the most highly travelled routes. First, Montreal-Toronto: this route is served by CP Air, Air Canada and Nordair. Second, Ottawa-Toronto: served by CP Air, Air Canada, Nordair, Great Lakes Airlines and Otonabee Airways. Third, Calgary-Edmonton: served only by PWA. Fourth, Toronto-Vancouver: served by CP Air and Air Canada directly and by Transair and PWA on an indirect service. Fifth, Calgary-Vancouver: served by CP Air, Air Canada and PWA. Sixth, Edmonton-Vancouver: similarly served by CP Air, Air Canada and PWA. Seventh, Toronto-Winnipeg: served by Air Canada and Nordair. Eighth, Calgary-Toronto: served directly by CP Air and Air Canada, and by Transair and Nordair on an indirect service.
Ninth, Halifax-Toronto: served by Air Canada at present, but both CP Air and EPA have expressed interest in serving this route. And, as I mentioned earlier, the Minister of Transport has specifically announced that the government would have no objection to CP Air applying to the Canadian Transport Commission to operate into the Atlantic provinces.
Tenth, Edmonton-Toronto: like Calgary-Toronto, served directly by CP Air and Air Canada, and by Transair and Nordair on an indirect service.
Mr. Speaker, I have just described the scheduled air services available on the ten most travelled air routes in the country. On nine of those routes Air Canada has at least one competitor. On the tenth, Toronto-Halifax, there is a good possibility that Air Canada will soon have competition. I ask: is this evidence that Air Canada has a near-monopolistic grip on major routes in this country?
If some members of this House remain unconvinced that Air Canada does not have competition on "major national air routes", let me cite a third way of defining such routes. This definition is in terms of route length. Those routes which it is
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most appropriate that the national carriers-Air Canada and CP Air-serve are obviously the long-haul and medium-haul routes, say, all those over 500 miles, as measured by great circle mileages. Although I might mention, parenthetically, that under Canadian air transportation policy, the regional air carriers have been given authority for certain long-haul routes, notably in the north.
I would like to cite a random selection of medium and long-haul routes, excluding those I have already mentioned, and to indicate, as I just did for the most travelled routes, which carriers serve these routes.
First, Gander-Halifax; 506 great circle miles: served by Air Canada and EPA.
Second, Montreal-Windsor; 509 great circle miles: served by Air Canada and Nordair.
Third, Edmonton-Winnipeg; 738 great circle miles: served by Air Canada and Transair.
Fourth, Wabush-Montreal; 600 great circle miles: served by Quebecair.
Fifth, Yellowknife-Edmonton; 633 great circle miles: served by PWA.
I could continue with examples, Mr. Speaker, but I believe the point is made once again. On what might logically be defined as "major national air routes", Air Canada simply does not have a monopoly-or a near-monopoly. It has competition.
Mr. Speaker, having pointed out that Air Canada does have competition on major national air routes, I would like to provide some background concerning Air Canada and its evolving role and the evolving nature of the air transportation industry in general. I believe that this background may provide some explanation as to why the hon. member felt that Air Canada has a near-monopoly position on major air routes. Certainly this was the case at one time but, as I am going to explain, there were valid reasons for this situation.
Air Canada was, of course, originally known as Trans-Canada Airlines and incorporated under the Trans-Canada Airlines Act, passed in 1937. Trans-Canada Airlines was established as a Crown corporation specifically to serve as the national air carrier-a leader, a pioneer and developer in making air services available across the country. TCA was also to provide efficient services without a government subsidy.
The history of TCA-which became Air Canada in 1965- has been one of almost continuous growth. In 1939, TCA linked Vancouver and Montreal for the first time with a scheduled passenger air service, using small Lockheeds. The next year, it extended its budding transcontinental services to Moncton. In 1941, it achieved sea to sea service with the start of flights to Halifax. After the war, TCA continued its development of domestic services as well as transborder and international services. In the 1950s, it had acquired the Super
3562

February 23, 1979
Air Transportation
Constellation, seating 75 passengers and in 1955 became the first North American airline to introduce the comfort and speed of propeller turbine aircraft when the first of 51 British-built Vickers Viscounts was introduced on Canadian routes. In 1960, Air Canada introduced the commercial jet age to Canada when it started using the DC-8 from Vancouver to Montreal.
During the 1960s, Air Canada retired many of its early piston-engine aircraft and became the first airline in North America with an all-turbine fleet. In 1971, Air Canada introduced the first wide-body jet on its routes, the Boeing 747.
I have mentioned these vignettes of Air Canada's history in order to convey a sense of how it has changed in the forty years since it was established. At the same time, the entire Canadian air transportation industry has evolved as well.
After a study in the late 1950s by a British transport expert, Mr. Stephen Wheatcroft, competition was allowed on certain routes. But in a policy statement in 1964, the then Minister of Transport, Mr. Pickersgill, stated that:
In the domestic mainline field, while the principle of competition is not rejected, any development of competition should not compromise or seriously injure the economic viability of IC As main line domestic operations which represent the essential framework of its network of domestic services. In other words, there must not be the kind of competition which would put TCA into the red; and, in the event that competition continues, the air transport board should ensure an opportunity for growth to both lines above this basic minimum.
These words may sound unnecessarily cautious, but I think that we should remember that, if one airline can handle the available business-as Air Canada was generally doing-and another carrier is introduced in order to provide competition, it follows that the profits of the original carrier will decline. Indeed, profits would decline sufficiently to "put TCA into the red", as Mr. Pickersgill mentioned.
The mid-1960s were a time of substantial change in the Canadian air carrier industry. During this period, the regional air carriers started to become an increasingly important force within the aviation industry. In 1966, this role was clarified in a policy statement by the Ministei of Transport, who stated that:
The role of regional carriers is to operate regional routes to supplement the domestic mainline operations of Air Canada and CPA and to provide regular and scheduled service into the north. They will not become directly competitive on any substantial scale with the two mainline carriers. Routes which because of volume of traffic, size of airports and related facilities, or suitable type of aircraft, do not fit the type of mainline operations of Air Canada or CPA will be reserved for regional carriers or, in some cases, may be transferred to them. The principal deciding factor should be the nature of the route. The Air Transport Board will be responsible for determining what routes are suitable for the regional carriers. Regional carriers will be expected to operate on a regional basis and will not be authorized to expand as potential transcontinental carriers. While rigid definition of boundaries for any one regional carrier is neither practical nor desirable, the main operations of each carrier will be carried on in one region.
Economic and efficient operation of a regional route pattern may in some cases involve competition with Air Canada or CPA on a mainline route segment. In such cases, the regional carriers can be authorized to be operated in competition with Air Canada or CPA.
{Mr. Savard.l
I would now like to refer to the second part of the hon. member's motion, in which he asked that private airlines be permitted to compete on a more equitable basis with Air Canada. It is correct that, at one time, other carriers were not on quite the same footing as Air Canada. This is because Air Canada's behaviour was governed by the Air Canada contract with the federal government. By virtue of this contract, pursuant to section 14 of the Air Canada Act, Air Canada provided domestic service outside the Canadian Transport Commission normal regulatory powers.


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


Mr. Ellis:: I rise on a point of order, Mr. Speaker. I realize this is an indulgence. The hon. member made a list of things and there was one that did not come through to me very clearly. I wonder if I could have that information.


The Acting Speaker (Mr. Ethier):: This could be granted with the unanimous consent of the House, since the hon. member has taken his 20 minutes.


Mr. Lachance:: On that point of order, Mr. Speaker, if I understood the hon. member, he did not specify what sentence he was referring to, and I suggest the hon. member who just spoke could give a copy of his speech to the hon. member opposite.


Stanley Howard Knowles: Mr. Speaker, if there are other members who are anxious to speak in this debate, I assure them that my remarks will be very brief. In other words, there will be time for others before five o'clock.
Let me say it comes as no surprise to me when a member of the Progressive Conservative party wants to expand the role of private enterprise in our airlines system, and in so doing to cut down on the role of the publicly owned line known as Air Canada. That is in keeping with the philosophy of that party, and it is to be expected that that point of view would be presented by them in this House.
As a matter of fact it was when the present member for Prince Edward-Hasting (Mr. Hees) was the minister of transport that, for the first time, a line other than Trans-Canada Airlines, as it was known then, was given rights on the transcontinental route. So the proposal being put forward today is simply an extension of Conservative philosophy. However, I must say that I feel quite disturbed and unhappy when I hear a spokesman from the Liberal side of the House say that there is merit in this motion and that there is much in it that the government is already doing.
I am even more disturbed when I read in newspapers and when I hear the hon. member for Burnaby-Richmond-Delta (Mr. Siddon) quote a statement made by Mr. Claude Taylor,
February 23, 1979

president of Air Canada, that maybe the time has come to sell off the publicly-owned airline.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: I trust that some way or another, and I will see to it right now, that the applause in response to what I said was not applause for me; it was Tory applause, for the idea that Air Canada should be sold. We, in this party, are thoroughly opposed to that. The reason I decided to take a few moments during this hour is to make my plea to the members of the Liberal party not to go Tory, not to go back on what they have done in building up a national airline in Canada.


John Raymond Ellis: With Bryce Mackasey in charge?


Stanley Howard Knowles: I realize that my friend hits me at a weak point when he mentions Bryce Mackasey. But he has not stayed in any job very long, so let us not worry too much about that.
Members are used to my getting into debates and reciting ancient history, but it is usually in my favourite field of pensions that I do this. But there was some other ancient history going through my mind this afternoon. My friend from across the way referred to the organization of Trans-Canada Airlines in 1937-that was before I was here in this House- but in the middle 1940s we had quite serious discussions about post-war civil aviation policy. We had a policy laid down by the then prime minister, the Right Hon. William Lyon Mackenzie King, and we had some interesting contributions made by the minister who was in charge, namely, the Right Hon. Clarence Decatur Howe.
I remember very well-I am trying to think what year it was but I cannot recall if it was just before the end of the war or just after it, but it was certainly in the middle forties-Mr. Howe standing up and telling us he had tried his best to get the Canadian Pacific Railway to come in with the Canadian National Railways on the organization of Trans-Canada Airlines. But, said Mr. Howe, Canadian Pacific was not interested. Why? Because there was no money to be made in the operation at that time. That is what drove C. D. Howe to a form of public ownership, namely, establishing Trans-Canada Airlines under full public ownership.


An hon. Member:: C. D. Howe was a great man.


Stanley Howard Knowles: He was a great man in many ways. We who sat opposite him fought him, but we had great respect for him. In this area he was absolutely right. Recalling that attitude on the part of Canadian Pacific when they refused to come in to help build up an airline or give service to the country, I am not greatly impressed by CP Air's desire now to serve the country by getting additional routes and becoming a transcontinental airline challenging the position of Air Canada. So I say, Mr. Speaker, that my worry today is not at all what the Tories say. They are being true to form. But my worry is that the Liberals might pay some
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attention to what Mr. Claude Taylor has said. I hear a Liberal member say no to that. That is good.
I am also worried about the legislation that was put through last year and which my friend, the hon. member for Fort William (Mr. MacRae), disliked as much as some of us did, which put profit as a major element in the operation of the airline. The Minister of Transport (Mr. Lang) said yesterday that he hoped he would not offend us over here in the New Democratic Party by saying Canadian National Railways and Air Canada are now making a profit. That does not offend us at all. But what does worry us is the notion too many Liberals seem to have, that because these lines are making a profit mabye we should now turn them over to private enterprise. No, Mr. Speaker, a thousand times no! Public ownership in this area has served the people in this country tremendously, and we think it should stay that way.


An hon. Member:: 1 agree.


Stanley Howard Knowles: That is one member, and I hear one over here. Let me count. There are six votes.


An hon. Member:: Name those Liberals.


Stanley Howard Knowles: I have six Liberals, all good members of the Friday afternoon club, who agree with me. There are not six Tories here to say no, only five. So, six Liberals and I make seven. There are only five Tories, so we win the day-


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: -for public ownership of Air Canada.


Mr. Geoff Scott (Hamilton-Wentworth):: Mr. Speaker, as a new boy, and one of the members of the Friday afternoon club-


An hon. Member:: Welcome! We have being doing it for 15 years.


Geoffrey Douglas Scott: -I rise with some trepidation when I follow such a distinguished veteran member of the House of Commons as the hon. member for Winnipeg North Centre (Mr. Knowles). But I have to say that I will look in Hansard at the first paragraph in his intervention in this debate because it expresses precisely what the Progressive Conservative party stands for and precisely our opposition to this stand that our frieds to the left take in this case.
However, I rise to support in principle the spirit of this motion by my colleague, the hon. member for Burnaby-Rich-mond-Delta (Mr. Siddon) specifically, and very briefly, because it is rather late on Friday afternoon, but I want to deal with that section of his motion which reads:
Permit private airlines to compete on a more equitable basis with Air Canada.
Hon. members will know, since I am sure that all my [DOT] colleagues read all speeches made in Hansard as diligently as I

February 23, 1979
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do, that I have voiced concern in this Elouse about Air Canada taking over Nordair, a highly successful privately-owned regional airline and one which provides an essential service to southern Ontario and to my own area of Hamilton. Indeed, it has now been extended to the city of Winnipeg, the home of the hon. member for Winnipeg North Centre.
Hon. members will also recall the high and heavy flak which the government received from many sources, such as the airline industry, the private sector, employees of Nordair, and especially the media whose editorials roundly condemned the idea of a big government airline which has enough of its own troubles, diluting the effectiveness and crippling the entrepreneurial efficiency of a privately-owned regional operation like Nordair. There were even fears in my area that Hamilton's service would not only deteriorate with Air Canada's absorption of Nordair, but that the government-owned airline might one day need to consolidate its operations and we could lose the kind of valuable service that Nordair provides to our area, altogether. I have since had those fears put to rest by persons I trust who are knowledgeable in the field. As the industrial capital of Canada, Hamilton and its civic airport will continue to enjoy some ongoing and perhaps expanded regional air service to serve southwestern Ontario, northern New York State, and perhaps a direct Hamilton-Winnipeg route.
The question that still remains, and it is very germane to this debate, is what is Nordair's future now that Air Canada has been given a mandate by the government to reprivatize the regional carrier within the space of a year from last October. What will the eventual role of Air Canada be as the government agent in this sale? How will Nordair, and in the larger context Air Canada, fit into the government's over-all rationalization of the several regional carriers in central and eastern Canada?
With this government's recent stampede to the right, and its determination suddenly to honour the private sector of this country's economy, I cannot believe that it will not use every chance to continue its inevitable encroachment on free enterprise in Canada. The thinking of this administration has always been that the government can do better. What the Liberals and our friends to the left do not tell us is the corollary of this, that it is the extended version of Murphy's law. If something can go wrong, it will, only the Canadian taxpayer has to foot the bill. I am not saying that any government involvement is wrong. In the case of Air Canada's participation and Ottawa's over-all plan for rationalizing the airlines, a limited role is desirable.
For many years I have been a supporter of Air Canada in the national role that this parliament has given it to perform. It does not always do that well. Until recently, labour-management relations have been lousy.
I approve of some Air Canada participation in our national airline transportation system. For example, some of the applicants who want to buy Nordair, such as Great Lakes, Quebe-

cair, plus other regional airlines in eastern Canada such as Eastern Provincial Airways and Nordair itself-all have their reservations systems run by Air Canada. My information is that almost without exception every applicant for Nordair has stipulated that they want Air Canada's participation to the extent of 10 per cent to 15 per cent to 20 per cent. Therefore, there is a desire to see Air Canada maintain a role in regional and third carrier operations for the sake of continuity, experience and, to a certain extent, security. However, I emphasize that whatever emerges from the hot and heavy negotiations now going on in Montreal, I would be concerned about the over-all Air Canada involvement in a regional air service.
Like my colleague from Burnaby-Richmond-Delta I too take Air Canada president Claude Taylor as a straightforward, objective, and tough negotiator. The problem I am told that Mr. Taylor faces, and something that should concern our party and indeed the Canadian people, is this. None of these applicants really have enough money to put together a whole regional airline which stretches from Newfoundland to Winnipeg. The capital base for such a carrier with common equipment, 737 aircraft, could be in excess of $100 million. However, the Minister of Transport (Mr. Lang) still thinks there should be a great megalopolis of a regional carrier which stretches from Newfoundland to the Great Lakes and beyond. On the other hand, people I have talked to feel there is a definite autonomous desire on the part of Ontario interests, Quebec interests and Atlantic Canada.
In conclusion, I intend to ask the Minister of Transport at the earliest opportunity, on Monday if he is back in the House, whether he will allow his rationalization of regional airlines to proceed along a regional and geographical basis, that is, autonomously owned and operated regional services in Ontario, Quebec and Atlantic Canada, or whether the minister is determined to go with one single regional carrier with the commonality of equipment from St. John's to Winnipeg. I will also be asking the minister about the widely rumoured merger of Quebecair and Nordair, to be headquartered in Montreal.
There is one other fear that has been expressed to me and which I voice to the House at this late hour. Given this government's financial and labour management record with many of its Crown corporations, there is a fear on the part of many people that if Air Canada cannot find a satisfactory buyer, the Government of Canada might resort to setting up yet another Crown corporation to oversee all the regional airlines in eastern and central Canada. That would be tragic.
In short, we on this side look forward to hearing before this parliament comes to an end the transport minister's long promised and eagerly awaited policy on just how much scope the government will allow private regional operations in eastern and central Canada to carry on, and just how much competition Nordair, Quebecair, Great Lakes and Eastern Provincial Airways from whatever emerges out of this rationalization policy will be allowed with the very firmly established government-owned airline, Air Canada.


Mr. Paul E. McRae (Fort William):: Mr. Speaker, there are only two or three minutes remaining, but I am very anxious to
February 23, 1979

take part in this debate. I do not know how often I have stood on the floor of this House over the past six years to defend Air Canada against those who would nationalize, privatize it, or just disband it. The hon. member for Winnipeg North Centre (Mr. Knowles) need not worry that we are going to let Air Canada disappear as the Tories would have happen.
We never hear from those on the other side that the province of Alberta had no business nationalizing an airline, that it had no business buying enough pieces to put together the better part of a national airline. That kind of socialization and nationalization is fine.
When PWA bought out Transair, which serviced Thunder Bay, because of the idea of only having two national carriers, this almost forced Nordair into government hands. The Tories must decide whether theirs is a party for the good of this country or just to deal with and support provincial aims.
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I have a great deal of concern about the statement attributed to Mr. Taylor. It is not the kind of thing that should be said by the president of a Crown corporation. He was in fact stating policy, which should be stated by the government. If the minister has not already done so, I hope he will speak to Mr. Taylor and put him straight on this point. I am also sure that Mr. Mackasey, a close personal friend, will speak to Mr. Taylor along this line.


The Acting Speaker (Mr. Ethier):: Order, please. The hour provided for the consideration of private members' business has now expired. It being five o'clock, this House stands adjourned until Monday at 2 p.m., pursuant to Standing Order 2(1).
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, February 26, 1979