1979-12-11

ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Hon. Marc Lalonde (Outremont):: Mr. Speaker, under the provisions of Standing Order 43, I ask the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
In view of the fact that some multinationals have reduced the volume of oil made available to independent distributors and, in some cases, have already warned those independents that they would no longer supply them, thus driving them to bankruptcy, in view of the fact that the Minister of Energy, Mines and Resources (Mr. Hnatyshyn) has failed to obtain from those multinationals a firm commitment that no independent gas station would experience a reduction or cut in supplies which would not also be applicable to gas stations under their control, in view of the fact that the Prime Minister (Mr. Clark) has failed to honour his public commitment of November 6 to the effect that independent distributors would not suffer any supply cut, 1 move, seconded by the hon. member for Notre-Dame-de-Grace (Mr. Allmand):
That the House condemn the Minister of Energy, Mines and Resources for his lack of energy in protecting independent distributors against the activities of multinationals, condemn the Prime Minister for having reneged on still another promise, thus adding to the long list of broken promises made by his government, and finally condemn the member for Beauce for having been naive enough to believe in such a promise made by the Prime Minister.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ENVIRONMENTAL AFFAIRS
Hon.   J.-J. Blais@Nipissing: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to Standing Order 43. Farmers in southern Ontario may be comforted by the conclusion contained in a recent study conducted at the University of Guelph, indicating that acid rain does not harm farm crops in southern Ontario. However, recognizing that northern Ontario has potential farmland totalling more than 12 million acres, and that northern Ontario farmers face high acidity levels in their soil caused by sulphur emissions in the United States and Canada, I move, seconded by the hon. member for Thunder Bay-Nipigon (Mr. Andras):
That this House urge the Minister of the Environment to advise his Ontario counterpart as well as himself that northern Ontario represents 90 per cent of the total provincial land mass and that it should be given top priority in the formulation of environmental policies dealing with the problem of acid rain.


Mr. Speaker:: Standing Order 43 permits the presentation of such a motion for debate only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXPENSES OF CONSERVATIVE CAUCUS ON GRAIN TRANSPORTATION-MOTION UNDER S O. 43
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I have a motion under Standing Order 43 which I hope is supported by the Prime Minister (Mr. Clark). It arises out of Your Honour's words of wisdom in the House yesterday, when Your Honour commented that the practice of supporting from public funds a committee composed of members of only one caucus was a rather dangerous practice to embark upon. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House calls upon the Progressive Conservative Party of Canada to reimburse the federal treasury the $9,161 of taxpayers' money which was spent on the grain movement task force which was composed of only three members, all three of whom were members of the Progressive Conservative caucus in this House.


Mr. Speaker:: This motion can be introduced for debate only upon unanimous consent. Is there unanimous consent?

December 11, 1979
5.0.	43


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL ENERGY BOARD
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, in view of the fact that the National Energy Board has misled this House by indicating in a letter that the hearings on B.C. Hydro's application for an export licence would be held in the spring, in view of the fact that the hearings commenced this morning in Vancouver, and since the ridings of Kootenay East-Revelstoke and Kootenay West may be seriously affected by the decision of this hearing, I move, seconded by the hon. member for Kootenay East-Revelstoke (Mr. Graham):


O 0410)
[Stage Direction]
That this House recommend to the National Energy Board that the hearing be adjourned until the spring of 1980, as promised.
Mr. Speaker:: This motion can be presented at this time, pursuant to Standing Order 43, only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
[Stage Direction]
5.0.	43
Mr. Arthur Phillips (Vancouver Centre):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. It has come to my attention that Judge Marjorie Cantryn of the Citizenship Court in Vancouver has received a letter signed by the Secretary of State notifying her that her appointment had been terminated. No reasons were given by the minister.
Since she has served the community well as executive director of the Vancouver Indian centre, a member of the Vancouver police commission and in many other ways as an active native Indian citizen, I move, seconded by the hon. member for Notre-Dame-de-Grace (Mr. Allmand):
That the government immed'ately reconsider its decision on this matter.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PETRO-CANADA CALL FOR RETENTION OF CORPORATION AS VEHICLE FOR CANADIAN INVESTMENT-MOTION UNDER S.O. 43
Mr. William Rompkey (Grand Falls-White Bay-Labrador):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the fact that an additional 2,400 barrels of oil a day has been discovered at the Hibernia well off Newfoundland, in view of the fact that this is very close to a commercial find, and in view of the fact that Petro-Canada is the only Canadian-owned investor in that well, I move, seconded by the hon. member for York West (Mr. Fleming):
That this House calls upon the government to immediately renege on its promise to dismantle Petro-Canada and retain that organization as a vehicle for Canadian investment in its own resources.


Mr. Speaker:: The introduction of this motion for debate, pursuant to Standing Order 43, requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


HEALTH AND WELFARE
Mr. Peter Ittinuar (Nunatsiaq):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity. In view of the fact that the state of medical services for people in northern Canada is well below that of the general Canadian population, and in view of the fact that this government has not moved to upgrade medical and health services in the north, I move, seconded by the hon. member for Skeena (Mr. Fulton):
That the Minister of National Health and Welfare undertake immediately to conduct a comprehensive, in-depth study of the needs of northern people relating to health care, with a view to improving the accessibility of medical services throughout the north.


Mr. Speaker:: This motion can be presented, pursuant to Standing Order 43, only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Peter Stollery (Spadina):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the problems which the Secre-
December 11, 1979
tary of State for External Affairs is having meeting Canada's commitment to the United Nations of $15 million for Cambodian relief, and the fact that a substantial part of this money is being taken from the boat people to whom it was given after it was taken from Canadian employment programs, I move, seconded by the hon. member for Sherbrooke (Mr. Pelletier):
That the President of the Treasury Board reconsider the efforts of the Secretary of State for External Affairs to get such a relatively small amount of money appropriated, and not pursue his present course of telling her to take relief money from one group of starving people so that she can give it to another group of starving people.


Mr. Speaker:: This motion can be presented for debate only with unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


REQUEST FOREIGN AID BE WITHHELD FROM TANZANIA- MOTION UNDER S.O. 43
Mr. Bill Wightman (Scarborough West):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity. Given that the government of Tanzania has confiscated the property of S. Hassanali, a Canadian citizen, and that, despite having acknowledged this debt in writing, the government of Tanzania has withheld payment for more than three years. 1 move, seconded by the hon. member for Scarborough East (Mr. Gilchrist):
That the Government of Canada withhold foreign aid from the government of Tanzania until restitution has been made to Mr. Hassanali and any other Canadian citizen who has suffered confiscation of property and funds at the hands of the government of Tanzania, and that in determining which countries shall receive assistance, Canada's foreign aid policy take full account of unlawful actions perpetrated against Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PRESENCE IN GALLERY OF SPEAKER OF LEGISLATIVE ASSEMBLY OF NORTHWEST TERRITORIES
Mr. Speaker:: Before beginning the oral question period, I invite hon. members to join with me in signalling the presence in our gallery of a very distinguished visitor in the person of my colleague from the Legislative Assembly of the Northwest Territories, newly-elected Speaker Robert H. MacQuarrie.


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



ORAL QUESTION PERIOD


Hon. Jean Chretien (Saint-Maurice):: Mr. Speaker, in the absence of the Minister of Finance, I should like to direct a question to the right hon. Prime Minister. In light of the very serious speculation on television last night to the effect that there was to be a serious change in the level of corporate taxes in the budget tonight, can the Prime Minister assure the House that the necessary measures were taken for tonight's budget to ensure that there was no leak, because these things can lead to a lot of speculation in the market?


Right Hon. Joe Clark (Prime Minister):: Mr. Speaker, the Minister of Finance was concerned about any speculation upon the contents of the budget. He has looked into the matter and he is satisfied that, in fact, all the traditional precautions have been taken to prevent any advance leak of elements of the budget.


Joseph Jacques Jean Chrétien: Mr. Speaker, can the right hon. Prime Minister assure this House that there was absolutely no discussion about the level of the increase in gasoline tax that, it is speculated, will be implemented tonight, in view of the fact that the oil industry decided to jump the gun on the government last week and increase its prices before the government in its budget tonight increases the level of prices of gasoline in Canada?


Charles Joseph Clark: Mr. Speaker, I can assure the House and the hon. member that there has been no discussion of the level of any increases although, as the hon. member will know, there has been extensive speculation for some time about price increases of various kinds.


BUDGET SECRECY-NEWS REPORTS ON INCREASE IN PRICE OF GASOLINE
Mr. Mark MacGuigan (Windsor-W'aikerville):: Mr. Speaker, my question is for the Prime Minister and follows on those asked by my colleague. At the very least there is a general expectation of a hefty raise in the excise tax on gasoline this evening. In light of the very precise news reports this morning that the increase will be 25 cents a gallon, and in light of reports that some service stations across the country-perhaps many-already are raising their prices today in anticipation of this tax increase tonight, can the Prime Minister tell us what steps the government will take to protect consumers in this situation?


Charles Joseph Clark: Mr. Speaker, I am not really quite sure what information that question was designed to elicit. Naturally, I will not comment upon speculative stories which have appeared. I think it would be wise as a general rule in the case of this budget, as in the case of past



December 11, 1979
Oral Questions
budgets, that Canadians let their actions be guided by what is said in the budget at the time of its presentation rather than by speculation about it.


Mark R. MacGuigan: Mr. Speaker, will the Prime Minister at least assure the House that if profiteering occurs on the part of service stations in parts of the country today, an investigation will subsequently be conducted?


Charles Joseph Clark: Mr. Speaker, that is a very hypothetical question. I have indicated already to the first questioner who raised the matter in the House today that we have been looking into the question as to whether the traditional protections against budget leaking have been put in place. They have been put in place, and to our understanding they have been respected.


Mr. Speaker:: On a supplementary, the hon. member for Windsor West.


Mr. Gray:: Mr. Speaker, my question is not supplementary.


ORGANIZED LABOUR
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Labour. In view of the fact that the government of Nova Scotia has introduced the infamous Michelin bill, which in effect indicates that all workers in interdependent plants must be organized by the same union and at the same time, that this legislation is contrary to convention 87 of the ILO, of which Canada is a signatory, as well as contravening all labour legislation in this country, including the federal Labour Code, could the minister tell the House what his reaction is to this sort of legislation and whether he intends to use this as a model for future changes in the Canada Labour Code?


Hon. Lincoln M. Alexander (Minister of Labour):: Mr. Speaker, surely the hon. member would not want me to make a comment on something that is purely within provincial jurisdiction-and there is no question about that. I think what the hon. member has referred to is broader-based bargaining. As the hon. member may recall, a report was handed down in the past year or so, the Bairstow report, that indicates this is a matter that should be under intensive study by the federal government.
I can assure the hon. member that this matter, in terms of wider-based bargaining, is under intensive study but we certainly do not intend to take any leadership from any province. In short, I know the hon. member was just playing jokes when he asked me to make a comment on a subject that is purely within provincial jurisdiction.


John R. Rodriguez: Mr. Speaker, my supplementary question is directed to the Prime Minister. In view of the fact that ILO convention 87 was signed by Canada, not the province of Nova

Scotia, in view of the fact that the federal government is involved with the Michelin Tire Company in that it has given considerable amounts in DREE grants, in duty-free concessions and in accelerated depreciation on capital costs to Michelin company, and in view of the fact that this same company has an application for more of the same from this government, can the Prime Minister assure the House that he will not sign any agreements with the company which is so obviously flying in the face of civilized labour legislation, not only in Canada but in the world?


Charles Joseph Clark: Mr. Speaker, in his enthusiasm the hon. member has, I am sure, noted that jurisdiction for signing international agreements rests with the federal government; but, as the Minister of Labour indicated, the jurisdiction in this particular matter in dispute rests with the provincial government.


John R. Rodriguez: Mr. Speaker, I asked the Prime Minister a specific question and I repeat it because I did not get an answer the first time. In view of the fact that the federal government has been very generous with Michelin Tire Company in the past, vis-a-vis DREE grants and all sorts of other concessions, in view of the fact that this company now has an application before this government for more grants of the same kind, and in view of the fact that what is being perpetrated in Nova Scotia is a blot against the escutcheon of Canada in respect of labour relations, I want to ask the Prime Minister whether he will use that leverage to get some concessions from the company in respect of the signing-up of workers outside the interdependent plants.


Charles Joseph Clark: Mr. Speaker, many of us wonder what kind of Draconian regime might be brought in by the New Democratic Party were it to form a government.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Speaking for this government, I can give the unconditional assurance to the hon. member that we will not deny federal aid or assistance to Canadian individuals, Canadian trade unions or Canadian companies simply because they might be involved in disputes within provincial jurisdictions.


John R. Rodriguez: A final supplementary question, Mr. Speaker.


Some hon. Members:: Oh, oh!


Mr. Speaker:: The hon. member for Windsor West.


LABOUR CONDITIONS
Herbert Eser (Herb) Gray: Mr. Speaker, I have a question for the Prime Minister, in the absence of the Minister
December 11, 1979

of Finance. When the unemployment figures came out last month, the Minister of Finance said he was not concerned about seasonally adjusted Canadians out of work, but only about actual Canadians. The latest figures show that, although the total working force is smaller, the number of what the finance minister calls "real Canadians" out of work has increased by 28,000 over the past month.
I would like to ask the Prime Minister why the government is accepting this so easily, or are 28,000 Canadians too "squee-zly-measly", to use the term of the Minister of Finance, to merit the government's real concern?


Charles Joseph Clark: Mr. Speaker, we are very much concerned about the number of actual Canadians who are out of work, and we will be indicating in the budget tonight another major step taken by this government to bring a sense of confidence to the Canadian economy so we can get Canada back on a growth track.


Herbert Eser (Herb) Gray: Mr. Speaker, when the Prime Minister was leader of the opposition he said that the way to get the country on a growth track was to have a stimulative deficit or, in olher words, a larger deficit. Now the Minister of Finance is saying that the only deficit appropriate for Canada is a reduced one. Can the Prime Minister provide projections today on how many more real Canadians will be stimulated out of work within the next year by Conservative action or, more likely, non-action?


Charles Joseph Clark: Mr. Speaker, in distinct contrast to the practices followed by the former government when the hon. member was a bit player in that government, we intend to publish tonight significant forecasts as to the nature of economic performance in the country, and we intend to indicate our expectations of the impact the new policies indicated in the budget will have upon those projections.


PETRO-CANADA RETENTION OF CORPORATION FOR NEGOTIATIONS WITH MEXICO
Marc Lalonde: Mr. Speaker, I would have liked to have addressed my question to the Minister of Energy, Mines and Resources or, in his absence, to the acting Minister of Energy, but in his absence and the absence of no less than ten other ministers, I will address it to the Prime Minister.


An hon. Member:: He's a real sweetheart.
Oral Questions


Marc Lalonde: in light of the statement made in Toronto yesterday by the Mexican ambassador to Canada, to the effect that Mexico would prefer to deal with Petro-Canada in its future sales of oil to our country, can the Prime Minister tell us whether his government will finally come to its senses on the question of Petro-Canada, abandon its plans to castrate that corporation and use it fully as the government's instrument to negotiate with Mexico, or will the government again prefer to send the president of Imperial Oil on such matters, as it did last summer?


Charles Joseph Clark: Mr. Speaker, it has been made abundantly clear in discussions with the Mexicans and, indeed, the Venezuelans that Petro-Canada is not essential as an instrument of negotiation in relation to oil between Canada and those countries. Instead of sending representatives of Crown corporations or private corporations, we intend to send the ministers of the Crown to Mexico and Venezuela in January to carry on negotiations which are close to being concluded in a way that will bring to Canada access to Mexican and Venezuelan oil supplies that eluded the former government.


MEASURES TO BE ADOPTED TO ENSURE SUPPLIES OF GAS AND HEATING OIL TO QUEBECKERS
Mr. Pierre Bussieres (Charlesbourg):: Mr. Speaker, in the absence of the Minister of Energy, Mines and Resources, I should like to direct my question to the Prime Minister. As the Prime Minister surely knows, there has been a lockout at the Petrofina Canada Chemicals Ltd. refinery in eastern Montreal, which jeopardizes the supply of gasoline and heating oil in eastern Canada. I therefore want to know what action the government is considering today in order to truly ensure oil supplies for the people in Quebec, in light of the recent agreement?


Charles Joseph Clark: Mr. Speaker, as the hon. member indicated, it is a lockout, a work stoppage which has caused this disruption. To date, the federal government has only stepped in to stress to all concerned the threat that this oil production stoppage poses to the Canadian people.


ELECTION PROMISE OF OIL SELF-SUFFICIENCY
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is to the Prime Minister. Does he agree with the statement made by the Minister of Energy, Mines and Resources on December 6 before the Standing Committee on National Resources and Public Works, that the minister expected that imported oil into Canada would continue to be about 250,000 barrels a day in 1990, or roughly equivalent to what it is now, which amounts

December 11, 1979
Oral Questions
to an abandonment of the Conservative election promise of oil self-sufficiency by 1990? Has the Conservative government abandoned this election promise of oil self-sufficiency?


Charles Joseph Clark: Mr. Speaker, we have certainly not abandoned that goal. We hope that there will be some enthusiasm among members on the other side of the House in supporting some of the measures including measures that will be difficult in the first instance but which will be essential to bring Canada to a position where we are self-sufficient in oil and in energy.


PLANS TO ACHIEVE ENERGY SELF-SUFFICIENCY
Maurice Brydon Foster: Mr. Speaker, I have a supplementary question for the Prime Minister. The statement released today concerning the Minister of Energy, Mines and Resources meetings this week with the International Energy Agency in Paris indicated that great stress would be put on conservation. In view of the fact that in committee last week the Minister of Energy, Mines and Resources indicated that the government hoped to reduce dependency on foreign oil by 250,000 barrels per day through conservation techniques, can the Prime Minister indicate what the minister will say at the meetings this week in Paris, and what specific plans will the government introduce to achieve this goal, beyond hiking the price of gasoline by 30 cents or 50 cents in 1980?


Charles Joseph Clark: Mr. Speaker, the Minister of Energy, Mines and Resources will be in a position to answer more detailed questions on his representations in Paris upon his return.
The hon. member will recall that we raised with the premiers the very real need for a combined approach by the federal and provincial governments to putting in place not only programs of conservation but also programs that will help to find substitutes for expensive oil. Federal government officials are now in direct contact with officials of all provincial governments in order to continue the work on detailed proposals for conservation and for substitution. This will be on the agenda for further discussion when the first ministers meet on December 17 and 18.


IMMIGRATION
Mr. Duncan M. Beattie (Hamilton Mountain):: Mr. Speaker, my question is for the Minister of Employment and immigration. A Southam News report has indicated an admission by John Sheardon, head of Canadian Immigration in Tehran, that only 15 per cent to 20 per cent of student applications for courses in Canada were likely to be screened. Can the minister tell me, first of all, if the news report is factual and, also, what his conception of screening entails?


Hon. Ron Atkey (Minister of Employment and Immigration):: Mr. Speaker, there was a slight inaccuracy in the news report. All Iranian students coming to Canada from either Iran or the United States are subject to the usual medical and other screening procedures. If there is any suggestion of impropriety, alleged terrorism or other activities, of course they are then regarded as inadmissible.
There are, of course, other requirements that apply to all students no matter what country they come from, including proof of financial capability and proof of readmissibility to their home country, as well as valid acceptance from a Canadian institution. Those instructions have been communicated by officials in Tehran.


Mr. John McDermid (Brampton-Georgetown):: A supplementary question, Mr. Speaker. I should like to ask the Minister of Employment and Immigration why at the present time Canada cannot disallow the entrance of students until the situation with the United States embassy is over.


Some hon. Members:: Hear, hear!


Ronald George Atkey: Mr. Speaker, each individual student application is treated on its individual merits. As a government, we have no interest in singling out Iranian students as a group. By virtue of the conditions which I explained a moment or two ago, some students will be inadmissible for those reasons. In fact, Mr. Speaker, I would suggest that for practical reasons many Iranian students coming either from Iran or Washington would be inadmissible under the conditions I have stated. The government has no intention of excluding all Iranian students as a group just because they happen to be Iranian students.


EMPLOYMENT
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, my question is also for the Minister of Employment and Immigration. As the minister knows, today in the Atlantic region there is an increase in unemployment amongst those aged 25 and over. Can the minister tell us what his plans are to tackle this serious unemployment in the Atlantic region, especially amongst young people but in general amongst all people, because we have been suffering for so long?


Ronald George Atkey: Mr. Speaker, unemployment is always a problem in this country, but I am pleased to say that unemployment among young people decreased rather than increased in the last month. Nevertheless, it represents a serious and continuing problem in the Atlantic region. 1 would urge all hon. members to listen very carefully to the budget address of my colleague, the Minister of Finance, tonight.
December 11, 1979


STATISTICS CANADA
Andrew Hogan: Mr. Speaker, I have a supplementary question for the President of the Treasury Board who has announced an inquiry into the credibility of Statistics Canada figures. Is the minister directing the expert involved to make a special study of figures as they relate to the labour force in Atlantic Canada where there is so much underemployment now that is not captured by the so-called official unemployment figures? There is a great number of discouraged workers in that region, and we feel that the Atlantic region's official unemployment figures do not give the true picture.


Hon. Sinclair Stevens (President of Treasury Board):: Mr. Speaker, I cannot tell the hon. member at this time that such a study is under way, but I shall certainly take his representation into consideration and report back.
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INDUSTRY
Mr, Hal Herbert (Vaudreuil):: Mr. Speaker, my question would normally be directed to the Minister of Industry, Trade and Commerce and Minister of State for Economic Development, but in his absence perhaps one of the junior ministers will reply. The Canadian sweater industry, in its brief of December 5, requested the minister of trade and economic development to "advise the major retail stores that Canada needs a viable sweater manufacturing industry and suggest that they purchase at least three-quarters of their needs from Canadian manufacturers."
Does the minister intend to take specific action to ensure that the major retailers will act like good corporate citizens, support Canadian industry and ensure jobs for Canadians in this coming winter?


Hon. Ron Huntington (Minister of State for Small Businesses and Industry):: Mr. Speaker, my department received a brief from the Canadian Apparel Manufacturing Association on the subject of sweaters. We have asked the branch responsible within the department to study the matter and report back to the ministers at the earliest opportunity the recommendations they anticipate.
I can advise that of the 11 bilateral agreements that we have with countries from which we import, 10 cover sweaters. I think it is up to consumers and retailers to solve the rest of this problem, except that we do have a Buy Canadian program in place.
Oral Questions
[ Translation]


REQUEST SWEATER IMPORTS BE REDUCED
Mr. Arthur Portelance (Gamelin):: Mr. Speaker, my question is supplementary to that of the hon. member for Vaudreuil and directed to the Minister of Industry, Trade and Commerce and Economic Development.
Within the next few months, some 2,000 jobs will be lost in the knitted wear and knitted sweater industry if the underdeveloped countries make full use of their import quotas. Would the minister submit this case forthwith to the Textile and Clothing Board for a decision to reduce the number of imported sweaters and distribute these imports over equal periods during the year, as recommended in the brief dated December 5 which the minister mentioned?
Moreover, would it be possible to know when the House of Commons, as well as the textile and clothing industries and their 200,000 employees, will be advised of the findings of the Textile and Clothing Board, following the investigation it is currently carrying out to streamline the recommendations of 1977 which brought about the decision concerning the quotas and the bilateral agreements?


Arthur Ronald Huntington: Mr. Speaker, I have met with the officials concerned. They are working on this whole area in order to give immediate advice to the ministers not only concerning sweaters but jeans as well.
A total review of the program is in place. I have had meetings with the responsible official about the reporting system, the permit-issuing system and the information-gathering system so that we can get a total handle on this whole area and so that we can improve the communication medium and the protection needed for Canadian manufacturers, without putting the complete imposition on the Canadian consumer.


REVENUE CANADA
Mr. Irenee Pelletier (Sherbrooke):: Mr. Speaker, my question is for the Minister of National Revenue. The officials of his department undertook, some time ago, an investigation of the valuation of imports of wearing apparel from Hong Kong. Despite the fact that these imports were found to be sold at dumping prices by Customs Canada, no action has been taken by the minister. Could the minister indicate to us today if he is ready to act on this pressing matter?


Hon. Walter Baker (President of the Privy Council and Minister of National Revenue):: Mr. Speaker, I thank the hon. member for giving me notice of the question. It is not fair to say that no action has been taken by the department. The fact

December 11, 1979
Oral Questions
is that Revenue Canada is presently studying all wearing apparel originating from major exporting countries. To date, measures have been taken to evaluate properly all wearing apparel originating in Korea and Taiwan.
A study is under way in the department with respect to wearing apparel from Hong Kong, and a decision is expected shortly. 1 can assure the hon. member that 1 shall act upon the results of that study.
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INDUSTRY
[Stage Direction]
Hon, Jean-Luc Pepin (Ottawa-Carleton): Mr. Speaker, one of the many reflections forced upon us by the series of questions we have just had is on the importance of import substitution in the development of an industrial policy. The minister of state responsible for industry mentioned in one of his first speeches that this was going to be one of his five priorities. Is he in a position today to tell us in general terms what he has been able to do and what he has been able to add to the existing capacity of the Department of Industry, Trade and Commerce in this area?

Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is to the Minister of the Environment. Given the recent Mississauga accident as an example of the danger when transporting hazardous substances, and in view of the fact that the Ontario government is planning to establish a major PCB storage facility with a capacity of at least 5,000 tons near Middleport, Ontario, which is only 15 kilometres from Brantford, where I live, can the minister assure this House and the people of that area that there will be no transportation of these highly toxic chemicals into this very productive agricultural area?


Hon. John A. Fraser (Postmaster General and Minister of the Environment):: Mr. Speaker, in answer to the hon. member, 1 cannot guarantee that there will be no transport at any time in the future. What 1 can say to the hon. member is that under the Transport of Dangerous Goods Act which was recently before this House I will consult with my colleague and ensure that his department and mine are monitoring these plans, and every effort will be made to ensure that there will be no lack of safety in the transport of PCBs if, in fact, the site which my hon. friend has mentioned is chosen. 1 am sure that all members of the House realize that the selection of this site is not a matter within federal jurisdiction.


Arthur Ronald Huntington: Mr. Speaker, in reply to that question, we are naturally placing emphasis on the Shop Canadian program that was already there. There is a business opportunity sourcing program which is of benefit primarily, in its present stage, to industrial operators in both Ontario and Quebec. Further to that, I think the important matter that has to be developed is co-ordination of the information-gathering system within the Government of Canada.
I am speaking specifically of the computer program in the department for imports and exports, and tying that in with the information-gathering system of Customs and Excise at National Revenue. We are working down that avenue in order to improve the information and statistical data base that will be available to guide both importers and exporters in Canada.


Mr. Pepin:: Mr. Speaker, in order to improve the quality of information on imports-because, obviously, this is what needs to be done-what has the minister been in a position to do? Has he had conversations with the minister responsible for StatsCan to this effect?


Arthur Ronald Huntington: No, Mr. Speaker, I have not had direct communication with the minister responsible for StatsCan, but I can assure the hon. member that I have had discussions with my officials as to the quality of the program that exists within Industry, Trade and Commerce. I am assured that it is really a Cadillac program and that it should be the nucleus of the information-gathering system in this general area, using both StatsCan and data available in National Revenue.


Derek Nigel Ernest Blackburn: I would like to ask the same minister if he has been able to determine whether it is the federal Department of Transport, the federal Ministry of the Environment, the Ontario ministry of transportation and communications or the Ontario ministry of the environment that is responsible for the transportation of hazardous chemicals, because it appears to me at this time that this whole area is not only muddied but it is a mess.


John Allen Fraser: Mr. Speaker, the hon. member has indicated that the whole area is muddied or a mess. 1 can assure all members of the House that very considerable concern must flow from the fact that there is in this particular, very important field an overlapping of jurisdiction which makes it very difficult for any particular government, department or agency to be completely in control. It is my own view that there is federal authority to ensure that the transportation of dangerous goods be done in a safe manner, and I can assure the hon. member that that is the position I will be maintaining in this particular case.


CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION BROADCASTING OF QUEEN'S CHRISTMAS MESSAGE TO COMMONWEALTH
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is for the Secretary of State through whom the

CRTC reports. According to information appearing in the press today, the CRTC has instructed radio and television stations that, in preparing their itemized reports on foreign and Canadian content in their programming, our Queen's Christmas message to the Commonwealth is to figure as "foreign content".
Would the minister inquire into the accuracy of this particular information? If it should prove to be correct, would he ensure that that instruction is withdrawn, because surely the new chairman of the CRTC, because of his academic background, must know the position of the Queen in Canada and of Canada in the Commonwealth.


Some hon. Members:: Hear, hear!


Hon. David MacDonald (Secretary of State and Minister of Communications):: Mr. Speaker, I am not aware of that instruction. I would be very surprised if, in fact, it were true. But I would want to check the accuracy of it first, so I will immediately inquire of the CRTC and see what necessary action can be taken to correct it.


INTERNATIONAL TRADE
Hon. Robert K. Andras (Thunder Bay-Nipigon):: My question is for the Prime Minister. In the week of November 26 there took place in Guanajuato, Mexico, an important bilateral trade meeting among the Canadian Association for Latin America and senior ministers of the Mexican government- considered extremely significant by the Mexican government-hosted by the minister of patrimony, with the delegation to be received by the President.
In light of his answer to my colleague, the hon. member for Outremont, about ministers going there on the oil agreement, could the Prime Minister explain to the House why, despite the insistence of the Canadian ambassador to Mexico and the insistence of the Mexican ambassador to Canada that a senior economic minister head our delegation to that meeting, the Minister of Industry, Trade and Commerce refused to go, the Minister of International Trade refused to go, and we in fact sent a junior official with the rank of director general, further indicating the incompetence and indifference of this government to international trade and to Mexico in particular?


Charles Joseph Clark: Mr. Speaker, I will look into the allegation regarding the specific matter raised by the hon. member. I can assure the hon. member that the language he has used to describe relations between Canada and Mexico, if it ever applied-and I doubt that it did apply with accuracy-certainly does not apply to the relations between this government and the government of Mexico, as will be indicated by the visit of senior ministers of this government to Mexico for significant and wide-ranging discussions next
Oral Questions
month, and the visit of the President of Mexico here later next year.


An hon. Member:: In the Christmas holidays.


Charles Joseph Clark: I hear one member opposite talking about Christmas holidays. I should take the opportunity to warn him that unless the obstruction stops on the other side of the House, there will not be any.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Peter A. Stollery: He is warning us. I am not afraid.


ENVIRONMENTAL AFFAIRS
[Stage Direction]
POLICY RESPECTING USE OF PCBs IN CANADA
Mr.   Chas. L. Caccia@Davenport: Mr. Speaker, I would like to ask a question of the Minister of the Environment in connection with the hearings completed yesterday by the review board responsible for polychlorinated biphenyls, PCBs. It stems from the fact that PCBs do pose a threat to human health because of their toxicity, their persistence in the environment and the fact that they accumulate in the food chain. I would like the minister to tell this House what his policy is and that of his government with respect to discontinuing the use of PCBs in Canada and the disposal of existing PCBs in the near future.


John Allen Fraser: Mr. Speaker, the objective of the government is to discontinue the use entirely of PCBs and the regulations will forbid any new use of PCBs. With respect to PCBs that are presently used in transformers, the policy is to phase them out through a process of attrition.


REGIONAL ECONOMIC EXPANSION
Mr. Jean-Louis Leduc (Richelieu):: Mr. Speaker, my question is directed to the right hon. Prime Minister. It concerns the Laprade plants and the $200 million the former government granted it in compensation. I should like to know whether the present government, in its negotiations with the Quebec government, insists that those $200 million be used mostly in the Becancourt industrial park.

December 11, 1979
Oral Questions


Charles Joseph Clark: Mr. Speaker, the matter of the Laprade plants is still under discussion by the Canadian government and the Quebec government, as it was indeed by the former government and the Quebec government.

f English]


AIR TRANSPORT
Mr. Maurice Harquail (Restigouche):: Mr. Speaker, my question is for the Minister of Transport. Because of apparent delays in the sale of Nordair, which is now in the hands of Air Canada, and because of the importance of this sale to the Atlantic region, could the minister advise the House when the CTC and the government will reach a decision on this matter? Hopefully, then we will get some service in the future in the four Atlantic provinces. We are particularly interested in the application by Eastern Provincial Airways.


Hon. Don Mazankowski (Minister of Transport):: I, too, am interested in resolving the disposition of Nordair, as is the government. The matter is currently before cabinet, and when a decision is reached the wheels will be placed in motion for the disposition of Nordair subject to CTC approval.


METRICATION
Mr. Ray Chenier (Timmins-Chapleau):: Mr. Speaker, my question is for the Minister of State for Small Businesses and Industry. Has the cabinet approved the hon. gentleman's proposal to delay the metric conversion of retail scales which he has been threatening us with for the last two weeks, to the consternation and alarm of retailers?


Arthur Ronald Huntington: I am aware that the matter has passed one cabinet committee. I have not been made aware of the decision of the inner cabinet on that recommendation. 1 might take this opportunity to clear up the confusion which exists: what we are specifically concerned about is the weighing and the marking of individual measurements at point of sale.


PETRO-CANADA CALL FOR RETENTION OF CORPORATION AS VEHICLE FOR CANADIAN INVESTMENT
Bill Rompkey: My question is to the Prime Minister, in the absence of the Minister of Energy, Mines and Resources. Can the Prime Minister tell the House whether the Premier of Newfoundland has been in touch with him to confirm that an additional 2,400
[Mr. Leduc.)
barrels of oil a day has been discovered at the Hibernia well, off Newfoundland? Can he confirm that this is, in fact, a find of commercial importance, and in view of the fact that Petro-Canada has a 25 per cent interest in this well and is the only Canadian company with such an interest, does he not think this is an adequate argument for retaining Petro-Canada as an adequate vehicle for investment by Canadians in their own resources?


Charles Joseph Clark: Mr. Speaker, to my knowledge, the Premier of Newfoundland has not been in touch with me on this matter and 1 cannot confirm the details of the rumoured find. We naturally hope that it is correct and that there will be more extensive finds yet to come. I am delighted that a spokesman for the Liberal party has now changed his attitude toward Petro-Canada and is accepting our view that Petro-Canada should be an instrument for investment by individual Canadians instead of simply being a static instrument of the state.


THE ENVIRONMENT
Mr. Girve Fretz (Erie):: Mr. Speaker, my question is for the Minister of the Environment and concerns proposals contained in a study by the International Joint Commission on water levels in Lake Erie. It has been suggested that the flow of water from Lake Erie into Lake Ontario via the Niagara River, around the town of Fort Erie, be increased. As this area is heavily involved in tourism, and since many tourists and residents use Lake Erie and the Niagara River for boating, sailing and fishing, would the minister assure us that the increased flow would not adversely affect this area?


John Allen Fraser: The study to which the hon. member refers is being carried out by the International Joint Commission on behalf of the Canadian and the United States governments. It will be the first stage of an investigation; no work will take place until after that. I can assure the hon. member that there will be sufficient time between his concern as expressed today and any definitive plans to ensure that the concern to which he has drawn the attention of the House will be met.


TRANSPORT
Mr. Stan J. Hovdebo (Prince Albert):: Mr. Speaker, I have a question for the Minister of Transport. The Conservative task force on grain movement recommends a change in the car allocation formula which would encourage the private purchase and leasing of rail cars by companies. Can the minister assure us he will reject a proposal which would give a great
December 11, 1979

advantage to large corporations such as Cargill at the expense of farmer-owned wheat pools?
Elon. Don Mazankowski (Minister of Transport): We are
looking at various ways and means of increasing the grain hopper carrying fleet. They will all be used as part of the grain carrying fleet under the direction of the co-ordinator. I welcome the opportunity to clarify that matter in response to the hon. member's first question in this House.


Stanley J. Hovdebo: Recommendation No. 14 in the same Conservative report suggests that supplementary quotas should be allowed to terminals capable of cleaning grain for export. Will the minister assure us that such a decision, which would favour Cargill and the Weyburn terminal at the expense of co-operative elevator companies, will not be implemented?


Donald Frank Mazankowski: The recommendations to which the hon. member refers are those which came from within the grain industry after extensive consultation with over 30 groups in western Canada associated with grain transportation and handling. All the recommendations will be considered in due course.


REGIONAL ECONOMIC EXPANSION
Mr. Gilles Marceau (Jonquiere):: Mr. Speaker, my question is directed to the right hon. Prime Minister. It deals with the construction of a tax data processing centre at Jonquiere.
During the election campaign, the Prime Minister met the representatives of the Saguenay-Lac-Saint-Jean regional development council to whom he promised that if he came to power that construction project would remain unchanged. Now, the writer of an editorial published in a newspaper of the Saguenay-Lac-Saint-Jean region last weekend claims that the government is holding the people hostage, and that the tax data processing centre will not be built before the Quebec referendum is held. May I ask the Prime Minister to deny that information categorically and to give us an indication of recent developments with regard to that important matter, that is, to tell us whether he intends to do something in the very near future about the representations made to him, including the petition signed by 22,000 persons?


Charles Joseph Clark: Mr. Speaker, I can deny absolutely the allegation published in the newspaper mentioned by the hon. member. I thank the hon. member for letting me know last night that he intended to put a question about the tax data centre at Jonquiere. As the hon. member understands, I am sure, that project has not been cancelled by the government; it has only been postponed until such time as
Oral Questions
the financial resources of the government allow that kind of expenditure. The President of the Treasury Board has had meetings with the representatives from Jonquiere. A representative of the minister visited the area and discussed the project with the citizens. We hope to be in a position to reach a final decision in that regard as soon as possible, but I cannot do so today, nor can I indicate to the hon. member exactly when I expect to be able to do so.


CONFLICT OF INTEREST
Hon. Jeanne Sauve (Laval-des-Rapides):: Mr. Speaker, my question is to the right hon. Prime Minister. It has to do with a short editorial which was published in The Gazette this morning about the conflict of interest rules which the Prime Minister imposes on his ministers. Contrary to that article, 1 sympathize with Jane Crosbie. It is more than sympathy, because the rules the Prime Minister is about to impose on his ministers are of a nature which would incapacitate the spouses of politicians.
Will the Prime Minister side with these spouses-in most cases, women-allow them to operate as free citizens, not to be bundled up with their husbands-


Some hon. Members:: Oh, oh!


Jeanne Sauvé: -and be satisfied that they divulge their interests? And will he express some confidence in the oath taken by his ministers that they will not reveal the dealings of cabinet and allow women not to have to sacrifice their careers to the political ambitions of their husbands?


Charles Joseph Clark: Mr. Speaker, the hon. member raises a very important question. As she knows, the problem is posed not simply for spouses who happen to be women, but also to a degree, which we hope will increase, to spouses who happen to be men.
We believe that conflict of interest guidelines have to deal with two important and combined problems: one is the reality of any conflict; the second is the appearance of any conflict, it was precisely because of the appearance of any conflict that we included in the regulations which we brought down-and which, 1 admit, are more stringent than those brought down by the former government-the provision relating to spouses.
As I have indicated in a press conference, 1 also share absolutely the concern expressed by Mrs. Crosbie. 1 am delighted to report to the House that, as a consequence of the sympathy 1 have shown for the case she has made, Mrs. Crosbie has now sold her shares and is in a position where she is free of any conflict. However, I think the obligation very clearly rests upon the government to continue a review of conflict of interest guidelines which will deal with the fact and
2230

December 11, 1979
Oral Questions
the appearance of conflict with an eye to bringing in guidelines which are fairer to spouses as soon as we can.


Jeanne Sauvé: Mr. Speaker, I would express the opinion that Mrs. Crosbie is not free, but she has had to be subservient or bow to the interests of her husband and to rules which do not make any sense in this century but which were brought down by the Prime Minister.
To continue his reasoning, would the Prime Minister then say that a person who is employed, for instance, as a nurse in a hospital could not keep that job if her husband, or his wife, happened to be a cabinet minister?


Charles Joseph Clark: Of course not, Mr. Speaker. Of course the rule would not apply in that way.


Jeanne Sauvé: Why not?


Charles Joseph Clark: The problem has to do with holdings which might be felt to influence public policy, and 1 should simply say to the hon. member that if she knew Mrs. Crosbie as well as I know Mrs. Crosbie-


Some hon. Members:: Oh, oh!


An hon. Member:: Shame.


Mr. Dawson:: Details?


Mrs. Begin:: Explain.


Charles Joseph Clark: 1 rather regret that in this age, if 1 may quote the hon. member, a comment of that kind should excite this kind of reaction from hon. members on the other side of the House of Commons.


Some hon. Members:: Hear, hear!


Dennis Dawson: It is the people behind you who are laughing.


An hon. Member:: Your own members.


Charles Joseph Clark: Mrs. Crosbie is a very strong individual in her own right. She is respected by me, by my government and by members of the House who know her in that capacity. She has raised an important public question. By the manner of her raising it she has caused us to review a difficult and delicate conflict of interest guideline.


Mr. Breau:: She showed you that you are stupid.


Charles Joseph Clark: By the manner in which she acted independently to bring herself into accordance with the guidelines, she has kept alive the necessity to review those guidelines and has yet allowed the government and her husband to adhere to a standard of freedom from conflict of interest which is probably without precedent in the country.


Some hon. Members:: Hear, hear!


PRIVILEGE
Mr. Speaker:: I have a notice of privilege from the hon. member for Nickel Belt (Mr. Rodriguez).


John R. Rodriguez: Mr. Speaker, my question of privilege arises from an "answer"-and I put that in quotation marks-which the Prime Minister (Mr. Clark) attempted to give to me this afternoon in the House to a question I asked. I think the answer he gave was misleading to this House. I think it may be misleading because of the fact that he does not understand the manner in which federal programs such as DREE interface with provincial programs and corporations which apply for these grants under the federal program.
My concern this afternoon dealt with the actions of the Michelin Tires Company in relation to the Nova Scotia government and the legislation which was introduced into that provincial house regarding the manner of organizing workers in the Michelin plant. The concept which was introduced there was one of the interdependent plant. It runs contrary to article 87 of the ILO of which Canada as a nation is a signatory. In response, Mr. Speaker-


Mr. Speaker:: Order, please. The hon. member will have to move quickly to indicate the nature of the question of privilege. If it is simply to take issue with the answer or to grieve about the extent to which his question was answered, obviously, as he knows from previous days and several rulings, I cannot be permitted to extend that to him without doing the same for every member every day.


John R. Rodriguez: Thank you for that comment, Mr. Speaker, and I will get quickly to the point.
I realize that that is a provincial legislature, and 1 asked the Prime Minister, in view of the fact that DREE is a federal agency and that it has entered in the past into agreements with the Michelin Tires Company with respect to DREE grants, accelerated depreciation, duty-free importation of tires-and, in fact, the new plant is coming before the federal government for the same sorts of agreements-whether he could use that leverage as means of getting the legislation withdrawn or to get the company to impress upon the provincial government that it does not want the government interfering with the legitimate right of the workers to organize.
1 put that question to the Prime Minister. He replied that he cannot interfere in what is obviously a relationship between a provincial government and corporations or individuals in the province of Nova Scotia. I am not asking him to interfere with the provincial government and its relationship with its citizens. 1 am asking him on behalf of Canadians to indicate by reason of that leverage that we as Canadians are not prepared to see a step back into the past, 1948, with respect to labour legislation in Canada.
December 1 i, 1979


Mr. Speaker:: Order, please. I am sure the hon. member will realize that he is simply continuing the argument which his questions raised during the question period and that that does not fall within the grounds of privilege.


MR. BRISCO-NATIONAL ENERGY BOARD HEARING IN VANCOUVER, B.C.
Mr. Speaker:: 1 have a notice of privilege from the hon. member for Kootenay West (Mr. Brisco).


Robert Hylton Brisco: Mr. Speaker, my question of privilege relates somewhat to the question of privilege raised by my colleague, then the hon. member for Northumb-erland-Durham, on November 3, 1978, when that member, now the Solicitor General (Mr. Lawrence), stated that he was misled in a letter from a minister of the Crown. 1 have not been misled by a minister of the Crown, but I have been misled by the secretary of the National Energy Board. 1 have been misled to the extent and degree that 1 am unable properly to represent the concerns of my constituents with regard to a hearing on an application by British Columbia Hydro for renewal, with modification, of its existing export licence. This hearing commenced this morning in Vancouver.
On the basis of correspondence from constituents and on the basis of editorial comment in the Nelson Daily News of July 27, 1979, I wrote to the National Energy Board and requested that hearings that it was contemplating here in Ottawa be held in Vancouver or in British Columbia where the majority of interveners were located. In a reply to me from the National Energy Board the following was indicated, and I quote only the two concluding sentences:
As a matter of interest I might mention that B.C. Hydro has applied to the Board and has been granted six months' extension on its current licence, thus, the hearing will not be held until some time next spring. 1 am placing your name on the Board's mailing list to receive a copy of the hearing order which the Board will issue concerning this application.
That was signed by the secretary of the National Energy Board.
In the question of privilege raised by my colleague, it was alleged at that time that he was intentionally misled. I cannot make that statement in all honesty and fairness with regard to the National Energy Board's secretary. However, I have acted as a member of Parliament with regard to these hearings on the basis of this letter from the National Energy Board. Therefore, at this moment I am placed in the position of having little, if any, time to prepare the type of intervention which would be expected of me by my constituents. Indeed, when I spoke to the secretary of the NEB this morning, he admitted the board's error, if it can be called that, and assured me that all pertinent information and application forms for intervention would be sent to my office immediately by messenger. 1 received them only five minutes ago.
If a member of Parliament from a riding not directly affected by possible NEB decisions in regard to B.C. Hydro's application were a victim of this error, I would not view the
Privilege-Mr. Bujold
matter with the same degree of seriousness. However, of all the constituencies in British Columbia, Kootenay West and Kootenay East-Revelstoke are the ones that are most materially affected in both a positive and a very negative sense by the Columbia River Treaty and by B.C. Hydro, which has the authority given to it under the treaty to implement the conditions laid down in the treaty. Other official and quasi-official bodies in my constituency have, in the last 48 hours, raised their voice in protest over the fact that the hearing before the NEB commenced today in Vancouver at 9.30 a.m. without adequate notice having been given to them.
How can I conceivably represent the people most affected by the decision of the NEB when 1 have been so seriously misled by the board established by Parliament for the purpose of giving direction to Canada and to Canadians on energy related issues?
I seek your indulgence and advice on this matter.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Since the hon. member has indicated that it appears to be an error on the part of the board and as the board, of course, is not a government agency for which a minister has direct responsibility-I am not entirely sure of that but it is likely an independent agency for which a minister reports to Parliament-it seems to me likely that the hon. member has disqualified his problem as being a matter of privilege. However, it would seem to be that he has a grievance which is very important and for that reason 1 did not interrupt him in the course of his remarks, although it became clear early in his remarks that the likelihood of developing a question of privilege was not very great.
The hon. member has raised a point which is a matter of great concern to him, and I think to all hon. members, that when we seek information about matters which comes as part of our responsibility in representing constituents it is important that that information be accurate and that in the end the constituency or constituents not be penalized by the failure to have adequate representation through their elected representative.
It seems to me that the hon. member has raised the point publicly to the House at this time and he should pursue it probably with the minister who reports to Parliament for the NEB to see whether or not directly under the circumstances the minister is able to intervene to make such arrangements as would permit the hearings to be conducted in such a way as to permit adequate representation by the hon. member. I leave that to him. If that fails, he might want to raise the matter again.
[ Translation]


MR. BUJOLD-OPEN HOUSE CANADA PROGRAM-ALLEGED LACK OF INFORMATION ON GRANTING OF CONTRACT TO CP AIR
Mr. Remi Bujold (Bonaventure-Iles-de-la-Madeleine):: Mr. Speaker, my question of privilege relates to the question I asked yesterday of the hon. Secretary of State (Mr. Mac-

December 11, 1979
Point of Order-Mr. Dick
Donald) concerning the excellent program called Open House Canada. The minister alleged that 1 was misinformed on the policy of his department regarding that program, believing that CP Air had been selected to provide transportation for the young participants in that program. Knowing the integrity of the minister and his wish to provide true and correct information in the House, I think that he did not have the information and that he misled the House.
My information is that the civil servants who are responsible for that program left it to CP Air to approve all applications for reservations from groups wanting to travel in Canada, and that the company should share with Air Canada in all fairness.
Now, Mr. Speaker, always according to the information I have, from July to November 1979, CP Air transported 54 youth groups compared with 22 for Air Canada, in western Canada only, namely to the cities of Vancouver, Calgary, Edmonton, Winnipeg, Regina and Saskatoon.
Therefore, Mr. Speaker, I feel the minister did not answer my question, and that is why I ask that the whole matter be referred to the Committee on Communications and Culture in order to obtain clarification of this case.


Mr. Speaker:: I am sure the House would prefer to wait until the minister has had the opportunity to take part in the discussion.


POINT OF ORDER
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, 1 would like to raise a point of order which may be a question of privilege. It seems to me that this afternoon people from the media will be going over budget documents which will be seen later this evening, and indeed the spokesmen of the various parties will have that opportunity as well. When we come to the House this evening, the Minister of Finance (Mr. Crosbie) will be on his feet and by about 8.10 p.m. everybody in Canada will know the highlights of the budget which will have been broadcast on their television set.
The practice in the past has been that members of the House do not receive their copy of the budget until after the minister has spoken, and although this party was in the opposition last time, we requested copies of the budget speech so that we could read it along with the Minister of Finance and perhaps mark our copies. 1 wonder whether Your Honour, through consultation with the House leaders, might see whether or not we could have copies, which we normally get in the lobby after the budget speech is made, placed on our desks. We would not open them until the Minister of Finance starts to speak, but we could follow along and mark our copies on the points we think are valid and important.

Perhaps the government House leader might respond to this, but 1 see he is not here at present and that is why 1 am addressing you, sir, as the person who is the custodian of the privileges of members. 1 think it is an important point and I wonder if Your Honour might see whether or not there is some concession that can be made.


Mr. Speaker:: The hon. member may be making a very worth-while suggestion, but it is not my responsibility. The document remains the possession of the government, the Minister of Finance and the government House leader. If they wish to distribute it in some way, that is their responsibility not that of the Chair.



ROUTINE PROCEEDINGS


Sinclair McKnight Stevens: Mr. Speaker, as the Acting Minister of Finance and pursuant to Standing Order 41(1), I now table a report in both official languages entitled "Public Accounts of Canada" which details the financial transactions of the Government of Canada for the fiscal year 1978-79.


PRIVILEGE
Hon.   J.-J. Blais@Nipissing: Mr. Speaker, yesterday the hon. member for Glengarry-Prescott-Russell (Mr. Ethier) rose on a question of privilege relating to the application of the Official Languages Act as it dealt with the publication or preparation of a report by a special caucus committee of the Conservative party in the matter of agricultural studies. As I understand, the hon. member for Glengarry-Prescott-Russell is seeking recognition from Your Honour on a question of privilege, and I rose in order to indicate that I will follow his intervention in order to join in that particular question.


Mr. Speaker:: I have no notice of any question of privilege. The hon. member for Glengarry-Prescott-Russell (Mr. Ethier) raised a question of privilege on which I decided yesterday, both in respect of the practice of using government funds to support committees of one caucus and also in respect of the risk that that entails. The way in which I dealt with it yesterday was that that activity entails a risk of producing a report which has been publicly funded or supported and yet retains its identity as an internal document, and therefore faces the conflict of the requirement that since it was partly funded with public moneys it should be produced in both official languages. Because of that risk, I indicated that 1 thought the practice was most unwise, but I did not found a
December 11, 1979

question of privilege upon past experience. Whether I might do so in the future is another question, but that matter is now closed on both accounts. It has been decided. I have no notice of any question of privilege from the hon. member for Glen-garry-Prescott-Russell, and without notice of such a question of privilege I am not in a position to entertain it at the moment.


Mr. Denis Ethier (Glengarry-Prescott-Russell):: Perhaps Your Honour has received notice of my question of privilege. 1 served your office notice at 11.35 a. m. today. My assistant personally brought it to the executive in Mr. Speaker's office at 11.35 a.m. this day. It was informing Mr. Speaker that I wanted to raise this question of privilege today. Now, I should like to be guided.


Mr. Speaker:: The hon. member has given the office notice. That is sufficient. Perhaps I could hear the nature of the question of privilege.


MR. ETHIER-ALLEGED ALLOCATION OF FUNDS TO POLITICAL GROUP
Denis Éthier: Thank you, Mr. Speaker. I have some hesitation in coming back to the question of privilege I raised last November 5. Following the ruling you delivered yesterday, I would like to make the following comments, that it was a sad day for French Canadians, if I am to understand-


Mr. Speaker:: Order, please.


Denis Éthier: -but I have new facts to introduce-


Mr. Speaker:: Order, please. The hon. member is seeking to raise a separate aspect of the same question of privilege. Surely he will realize that what he is seeking is the opportunity, by way of a fresh notice of a question of privilege, to review the decision which l have already taken on the point he raised. I simply cannot permit him to do that. There are no appeals of the rulings of the Chair; they have been abolished for some time. The hon. member seeks to reopen the matter or to have treated anew something based upon a matter which he has raised already and upon which I have adjudicated. I am simply not able to permit him to do that.


Denis Éthier: Mr. Speaker, following the remarks I made yesterday, Your Honour asked me to read carefully what you said. 1 sat down and I did not give an answer to that. I have read precisely what Your Honour has said. It is on that that I am raising my question of privilege today. I should like to be heard on that.
[ Translation]
And that is when you invited me to examine Hansard to ascertain whether I was giving the correct interpretation of
Privilege-Mr. Ethier
what you had said. Having read the question of privilege many times over and notwithstanding all the debate that took place since then, I want to introduce new facts. These facts relate to two statements made in the House last November 5, and on December 10, that is yesterday afternoon. First, I quote your remarks of November 5, as reported at page 943 of Hansard;

He raised one point about language to which the minister made the preliminary answer that this was an internal document, that it was used in the English language for English speaking members...

Now, Mr. Speaker, when you gave your ruling yesterday you said, and I quote from Hansard for December 10, page 2180:

There was an additional grievance advanced by the hon. member for Glengarry-Prescott-Russell, namely that the committee work resulted in a report which was essentially for internal use and was published therefore only in the English language, the language of the members involved, and that since it was supported by public funds it ought to have been published in both languages.

Very well. But here I wish to point out that you were still referring to a paper for internal use.


Mr. Speaker:: I am sure the hon. member will realize that he is embarking upon a course in which he is asking me to review again a decision I have already made. I simply cannot permit him to do that by way of a notice of a question of privilege. Whether or not that decision raises another problem, or a disagreement with him in the interpretation of the circumstances in the decision, I am afraid he will have to wait for another occasion or another opportunity to raise afresh the point he wants to raise. But I have no opportunity to review that decision, and the House has no opportunity to attempt, by way of a question of privilege or otherwise, to appeal the decision which I made yesterday. The matter is decided, final.


Denis Éthier: Mr. Speaker, I am simply answering what you asked yesterday.


Mr. Speaker:: Order, please.


Denis Éthier: I cannot accept that, Mr. Speaker. I want to be heard on this.


Mr. Speaker:: Order, please.


Denis Éthier: Your Honour invited me yesterday to read his comments.


Mr. Speaker:: Order.


Denis Éthier: I want to be heard on this.


Mr. Speaker:: Statements by ministers.

Order Paper Questions


Denis Éthier: I would certainly like to be heard, Mr. Speaker.
December 11, 1979


Mr. Speaker:: Order.


Denis Éthier: I think I have a very valid question of privilege and I would like to be heard.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
William Hannum Wightman: Mr. Speaker, the following questions will be answered today: Nos. 4, 14, 177, 410, 412, 468, 504, 590 and 669.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.
[ Text]


Mr. Cossitt: 1.	Since April 20, 1968, did the government pay for legal services to Mr. Hugh R. Hart, Solicitor, Brockville, Ontario, or to the firm with which he is associated and, if so (a) what was the total amount (b) what was the amount by fiscal or calendar year (c) for which departments did he act and, in each case, what is the breakdown of the amounts received (d) what is a general description of each case he has handled?
2.	What are all the reasons that Mr. Hart has been or is employed by the government and specifically, is one of these the fact that he is a member of the Executive of the local Liberal party?


Hon. Bill Jarvis (Minister of State for Federal-Provincial Relations):: 1.	The Department of Justice: Yes.
(a)	$58,251.15 (to September 30, 1979).
(b)	See list below.
(c)	See list below.
(d)	See list below.
2.	In reply to the first part of this question, Mr. Hart competently carried out the mandates assigned to him. The reply to the second part of the question is no.
H. and W. C. R. C. T.


[Stage Direction]
T.and C.
6,717.50(0
305.00(C)
4,637.49(0
10.224.79(C)
477.99(C)
4,593.75(0
142.50(C)
35.00(C)
262.48(C)
78-79	79 to 30 Sept. 79
6.199.22(C)	3,758.05(0
376.25(C)
Environment Canada
C.	C. A.
[Stage Direction]
D.	V. A.
E.	M. R.
I. and N. A.
506.00
175.00(C)
1,703.50(P)	359.75(P)
58.33(C)
Secretary of State
75.81(C)
Total
7,022.50	5,143.49	12,406.28	5,208.73
6,693.11	4,134.30
C-Criminal Prosecutions D-Property
Grand Total-58,251.15
20 Apr. 68-69	69-70	70-71	71-72	72-73	73-74H.	and W. C. R. C. T. R. C. C. E. T.	and C. Environment Canada C.	C. A. U.	I. C. D.	V. A. E.	M. R. I.	and N. A.	616.00(C) 260.55(C) 30.00(C) 225.00(C) 1,608.50(P) I21.80(P)	435.00(C)	2,615.50(0 40.00(C)	1.848.28(C)	1,689.46(0 285.00(C) 977.50(C)	6.890.15(C)Secretary of State	Total	2,861.85	435.00	2,655.50	1,848.28	2,951.96	6,890.15

C-Criminal Prosecutions P-Property
December 11, 1979
Mr. Orlikow: In each of the past five years, by department, for each occupational group earning $20,000 or more in 1978 and 1979, how many (a) public service positions were reclassified upward (green-circled) and/or downward (red-circled) (b) individuals continued to hold a public service position after the position had been reclassified?


Sinclair McKnight Stevens: To
provide a complete reply would entail a costly and time-consuming examination of all personnel and incumbent files in all departments and agencies. The cost of this study would be prohibitive in terms of both manpower and time.


Mr. Herbert: 1.	(a) What was the total CAST commitment to NATO, in numbers of men, agreed to by Canada when it was first entered into (b) which units were tasked to provide these men (c) what equipment was committed to this force?
2.	What have been the changes in the commitment in (a) numbers of men (b) the units which were tasked to provide the men (c) the equipment which was committed to this force and, in each case, what was the date that a change was made?
3.	(a) What was the total CAST commitment in numbers of men, as of January 1, 1979 (b) which units were tasked to provide them (c) what equipment was committed to this force?
4.	(a) What is the planned total CAST commitment by Canada in numbers of men, effective September 1980, in light of the Minister of National Defence's statement on October 31, 1978 (b) which units are earmarked to provide them (c) what equipment is it planned to commit to this force?


Hon. Allan B. McKinnon (Minister of National Defence and Minister of Veterans Affairs):: 1.	(a) Approximately 5,300
(b)	Two Canadian Brigade Group including:
Second Regiment Royal Canadian Horse Artillery Eighth Canadian Hussars-Princess Louise's-Regi-ment
Two Combat Engineer Squadron
Two Canadian Brigade Group Headquarters and
Signals Squadron
Second Battalion Canadian Guards First Battalion Royal Canadian Regiment Deuxieme Bataillon Royal 22' Regiment Combat Service Support Units Two Tactical Fighter Squadrons
(c)	This type of detail is classified
2.	(a) No significant change
(b)	Two Canadian Brigade Group July 1,1969 Cinquieme Groupement de Combat July 1, 1977
(c)	This type of detail is classified
Order Paper Questions
3.	(a) Approximately 5,300
(b)	Cinquieme Groupement de Combat including:
Le 5' Regiment d'artillerie Legere
Le 12' Regiment Blinde
Le 5' Regiment de Genie de Combat
First Battalion Royal Canadian Regiment
Les 2' and 3' Bataillons du Royal 22' Regiment
Combat Service Support Units
One Helicopter Squadron
Two Tactical Fighter Squadrons
(c)	This type of detail is classified
4.	(a) Approximately 4,300
(b)	The Special Service Force including:
Second Regiment Royal Canadian Horse Artillery Eight Canadian Hussars-Princess Louise's-Regi-ment
Two Combat Engineer Regiment
Special Service Force Headquarters and Signals
Squadron
First Battalion Royal Canadian Regiment Canadian Airborne Regiment
One Battalion Princess Patricia's Canadian Light Infantry (specific battalion not yet designated)
Combat Service Support Units One Helicopter Squadron Two Tactical Fighter Squadrons
(c)	This type of detail is classified


Mr. Lambert (Bellechasse): On March 31, 1979, what was the total number of married women holding jobs in Canada and what was their average weekly income?


Sinclair McKnight Stevens: Statistics Canada reports: Estimates from Statistics Canada's monthly labour force survey, which refer to the week ending March 17, 1979, indicate that the number of married women employed in Canada at that time was 2,393,000. Data regarding their average weekly income is not available.


Mr. Lambert (Bellechasse): On March 31, 1979, what was the average income of Canadian families?

December 11, 1979
Order Paper Questions


Sinclair McKnight Stevens: Statistics Canada reports: The information for March 31, 1979, is not available. However, according to preliminary estimates, the average income of Canadian families in 1978 was $21,346.
1974-75	S 284,425
1975-76	$2,820,476
1976-77	$1,098,540
1977-78	$1,257,233
1978-79	$1,451,856


Mr. Herbert: In each of the past five years, what amount was transferred to the Fisheries Prices Support Account?


Hon. James A. McGrath (Minister of Fisheries and Oceans):: Pursuant to section 10(3) of the Fisheries Prices Support Act, the following are the amounts transferred to the Fisheries Prices Support Account for the past five years:
Fiscal Years
Amounts
1976-77
1974-75


[Stage Direction]
Nil
Mr. Herbert: What was the total of capital losses indicated on tax returns in each of the past Five years and, of these amounts, what was the estimated percentage considered applicable to Canadian companies?


Walter David Baker: The total of capital losses, in thousands of dollars, indicated on the tax returns of individuals was as follows:
	$000
1973	293,827
1974	506,162
1975	409,712
1976	376,653
1977	400,830
This data is provided in table 18 of the annual publication "Taxation Statistics". No data is yet available for the 1978 tax year. The department does not compile this information for corporations.


Mr. Herbert: Has the Department of Public Works carried out any work for the Department of National Defence and, if so, what was the dollar value for each of the past five years?


Hon. Erik Nielsen (Minister of Public Works):: Public Works Canada has made the following payments from its working capital advance on behalf of National Defence:

This does not include capital costs, maintenance or other services for recruitment centres or other space that National Defence may have in buildings owned by Public Works including National Defence headquarters.


Mr. Cossitt: 1.	How many telephone operators handle incoming and outgoing calls in Ottawa, on the government telephone network?
2.	What is the total cost per year paid for all telephone services rented in Canada by the government?
3.	What is the average length of time that operators, presently in service, have held such jobs and what instructions do they receive before commencing work?
4.	Is it the policy of the government to insist that such operators be as polite and courteous in giving services to customers as requested of regular Bell operators and, if so, have there been occurrences when operators have spoken rudely to customers and purposely disconnected them, etc?
5.	What steps will be taken to improve the current attitude of Bell Canada operators working for the government by the Department of Communications?


Mr. Scott Fennell (Parliamentary Secretary to Minister of Communications):: In so far as the Department of Communications is concerned, the answer to the above question is as follows:
1.	A staff of approximately 100 operators are available on a 24-hour basis, seven days a week, to handle incoming and outgoing calls in Ottawa, on the government network. From this staff complement, 25 to 30 operators are required for normal work days to meet our service objective which is to respond to 95 per cent of all calls within ten seconds. The number of operators on duty is adjusted to forecasted and actual call volumes.
2.	The total cost of rented telephone services to the government in the fiscal year 1978-79 was approximately $110,000,000.
3.	The contracted operators for the switchboard serving the government in Ottawa have an average of approximately ten years of operator experience. Operators receive standard telephone company training supplemented by special instructions applicable to government switchboard operations.
4.	It is the policy of the government that operators provide as polite and courteous a service as required from regular Bell Canada operators. Telephone operator manuals and practices require that all difficulties that may arise, whether reported in progress or after the fact by the caller or the operator, be referred to the supervisory level. Procedures are provided for the resolution of all such occurrences. Only very few complaints concerning operator service have been reported.
5.	My departmental officials carry out an active program, in order to achieve and maintain the highest possible level of
December 11, 1979

operator services. This program includes the continuous update of the Telephone Operator Practices Manual, maintenance of bilingual services in accordance with the Official Languages Act, improvement of sensitivity and responsiveness to the public including the provision of information services such as the government index of programs and services.


Lorne Edmund Nystrom: Mr. Speaker, I wonder if I could ask the parliamentary secretary when we can expect an answer to question No. 576 on the order paper. It concerns the budget to the beef import consultative committee which was just referred to in the question of privilege. I think it is very important for us to receive an answer as soon as possible. I received an answer to a similar question last week which caused a very interesting ruling in the House.
While I am on my feet, I wonder whether the parliamentary secretary can tell us when we will have an answer to question No. 578 which deals with the special Conservative adviser on prairie branch lines. Also can he tell us when we can expect an answer to question No. 579 which deals with other Conservative task forces. I know of at least two which are in existence. One was headed up by a member from Dartmouth, 1 believe; it dealt with energy self-sufficiency. I believe that task force is no longer in existence. Another one was headed by an Ontario member; I forget his riding, but it involved seasonal farm workers. Also I heard through the rumour mill that perhaps it involved a trip to the Caribbean. I am not sure of that, but I think it is very important to receive the answers to those questions.
In addition to the question of privilege with which we dealt the other day, and the four Conservative caucus committees which we already know exist that are possibly being funded by the treasury, perhaps many, many more exist than those we know about. When can we expect those answers?


William Hannum Wightman: Mr. Speaker, certainly I will take notice of the three numbered questions to which the hon. member referred. I will undertake to give him a reply as soon as possible.


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


Some hon. Members:: Agreed.


Mr. Speaker:: Pursuant to Standing Order 54, I do now leave the chair for the House to go into Committee of the Whole.
Mortgage Tax Credit



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Monday, December 10, consideration in committee of Bill C-20, to amend the Income Tax Act to provide a tax credit in respect of mortgage interest and home owner property tax-Mr. Crosbie-Mr. Scott (Victoria-Haliburton) in the chair.
The Assistant Deputy Chairman:: Order, please. When the committee rose on Monday, December 10, 1979, clause 1 of the bill was under consideration.
On clause 1-


Mr. Watson:: Mr. Chairman, last evening I outlined a number of the inequities in Bill C-20 that undoubtedly will give rise to the second thought which the sunset amendment proposed by the hon. member for Winnipeg-Fort Garry is designed to act upon.
Surely hon. gentlemen opposite must now recognize that the program outlined in this bill will be horrendously expensive. It will be uneven and unfair in its application to various regions of Canada. It will distinguish, in a most unjust way, between home owners and renters and between home owners with large mortgages and those home owners without mortgages, most of whom are in the older age brackets.
There is another aspect of this bill which is unfortunate. As unfair as it is to so many taxpayers in Canada, the bill has another major defect which has gone largely unmentioned in this debate. The hon. member for Mississauga South summed up what I mean by that last night when he referred to what this bill would do to help the sale of houses; in other words, what it would do to help the real estate industry. The brutal truth is that this bill is a continuation of Conservative policies which reflect the tremendous influence land developers have with that party.


Some hon. Members:: Oh, oh!


Ian Watson: Just listen to the facts. The land banking provisions of the National Housing Act have been on the books since 1953. The use of those provisions could have avoided fantastic inflation in land costs around Toronto and even around Ottawa, but those land banking provisions were ignored by the Conservative government of Ontario to the benefit of Ontario land speculators.
Let me give two or three other examples. What happened to Pickering and what happened to South East City? They were sabotaged by the Conservative government of Ontario. If that is not caving in to land speculators, then those opposite who are heckling should check their facts.


Some hon. Members:: Oh, oh!
80079 68

December 11, 1979
Mortgage Tax Credit


Ian Watson: Those are the facts. Disheartening as well is the fact that-


Some hon. Members:: Oh, oh!


Fred Alward McCain: Order, please. I think the committee should give the hon. member some consideration by remaining quiet until he has finished his remarks.


Ian Watson: Disheartening as well is the fact that the tremendous sums of money which are involved in the tax loophole that this bill creates, at least $3 billion by the end of the fourth year, will make it extremely difficult, if not impossible, for a government that has been boasting about its intention to reduce the federal deficit to spend money in many other areas where money spent now would mean tremendous savings in the future for all Canadians.
Let us consider conservation as an example. Here are some of the things we should be doing but are not doing. There should be additional funds for home insulation available to everyone over the age of 65, regardless of the age of their homes. These people should be eligible for complete insulation updating at a cost to the government.
There should be subsidization of the conversion of our heating facilities from oil to natural gas. This is not going to be an inexpensive program, but it is one that is desirable. We do not even have sufficient numbers of people trained to do this job. New manpower programs will be necessary to train those people who will be needed to encourage and speed up this conversion from heating oil to natural gas for home heating purposes.
There should be new metering systems to encourage and permit diversification of the timing of electricity loads. Surely this should be feasible. I understand these new type meters have been in use in Europe for many years. They permit, at a reasonable cost of installation, somewhere in the $200 range, the possibility of electricity loads for those who want to benefit from cheap electricity. Those who use electricity from eight in the evening till midnight get a special rate, and those who want to use electricity after midnight get an even better rate. This sort of evening out of electricity demand would save a fantastic amount of expenditure on the new facilities which continue to be necessary to increase our electrical production capacity.
Instead of the luxury of this bill there obviously should be shelter allowances, fuel allowances or a combination of both. Perhaps the budget tonight will contain something along this line, but the vast expenditure being proposed by this bill will make it extremely difficult for any government to put into effect this kind of necessary and, in the long term, sensible money-saving proposals.
There should be encouragement by tax incentives of company van-oriented pools and other methods of reducing transportation energy consumption. Consideration should be given to electrification of our railway systems, and we should be encouraging conversion to coal use-


Mr. Blenkarn:: I rise on a point of order, Mr. Chairman. We are in Committee of the Whole discussing a sunset amendment proposed by the hon. member from Winnipeg. This whole question of vans, electricity and subsidization of insulation have absolutely nothing to do with the amendment. The hon. member was called to order by the Chairman the other night on this very issue. He continues to break the rules of the House. Surely he should stay within the limits.


Some hon. Members:: Order, order.


Ian Watson: Mr. Chairman, this particular sunset amendment will be useful simply because the bill, as I have been trying to explain, is such that there will be second thoughts. I have been explaining what some of these second thoughts are going to be. I have been giving examples of these second thoughts, and the necessity of doing these things that will in the long term save Canada a lot more money. Perhaps you would permit me to finish my remarks in the few minutes I have left.
1 would like to suggest that another matter we should be considering is encouraging by subsidy conversion to coal use in accordance with the highest environmental standards to ensure that such conversion does not contribute further to our already serious acid rain problem. There is a great deal to be done in the area of urban transit.
We should be looking as well at the living conditions in urbanized areas of Canada where 85 per cent of our population lives. Statistics have shown that Canadians spend 70 per cent of their lifetimes either in their own homes or in their own neighbourhoods. Surely we should be considering the quality of life in those neighbourhoods and the types of programs that can increase and improve that quality of life. Hon. members opposite are putting themselves in a position where it will be almost impossible to find money to deal with these very urgent, pressing and necessary activities to permit Canadians to achieve the kind of quality of life in their own municipalities, cities and towns to which they have a right to aspire. [Translation]
It is a fact that the quality of life in the core of cities and in suburbs suffers from a lack of long-term planning and of co-ordination among the various departments and levels of government. It is a fact that a lack of long-term planning and co-ordination has given rise to many mistakes and deficiencies in municipal and regional services which are now extremely costly at all government levels and it is especially costly for municipal ratepayers to correct them. It is also a fact that the huge cost of some planning mistakes have a negative effect on the efficiency of the Canadian economy and the capacity of Canada to compete on the world market. Mr. Chairman, I wish to say in English that-

In spite of the fact that 85 per cent of our population lives in Canada's urbanized areas we have still not achieved the kind of federal involvement necessary to improve the quality of life of that tremendous percentage of the population. It is unfortu-
December 11, 1979

nate that the former government caved in to, at that time, Conservative opposition recommendations that we abolish the urban affairs department. As far as I am concerned, that was one of the most foolish things the previous government did, and this is one of the areas where the need remains and expenditure requirements are going to be increasing. Federal government involvement will continue to be necessary.
The United Nations, the North Atlantic Treaty Organization, the Council of European Parliament and other such organizations all feel that they have a role to play in urban affairs, but the federal government feels that it does not have such a role to play. That is pure nonsense. Further expansion is necessary.
What the present government is doing by putting all their eggs in one basket through a tremendous burst of expenditures is tying their hands well into the future and inhibiting or preventing any future government from becoming involved in these matters which are so necessary to the future well-being of Canadians, particularly those in our urban areas.


Mr. Herbert:: Mr. Chairman, if one cannot persuade this government to withdraw this extraordinary, discriminatory and unjust bill, then we must at the very least ensure that there is a day of reckoning where maybe common sense will prevail. That is why I support a sunset clause in a measure which, even if it had any redeeming features, is far too expensive in these difficult times. If the full cost of the program as given by the Minister of Finance is distributed, we see that the cost of the mortgage interest deductibility proposal is equivalent to almost 20 per cent of the tax load of the individual taxpayer. That means that one dollar in every five dollars of the taxes paid by everyone-the poor, rich, young, old, single family parents, including all renters and all those who do not have mortgages on their homes-goes to pay for the program.
The Minister of Finance when speaking on this bill made the extraordinary statement that in 1974 with this bill 230,000 tenant householders could have become householders. Surely, this is the most absurd statement that has ever been made in this House. He also said that only 1.5 million people will get the property tax credit, which means that these people have homes that are not mortgaged. The Minister of Finance also said that this bill will help city housing to compete with suburban housing. Even if it were true, is that a desirable objective?
The Minister of Finance says that the plan is the same in every province. He forgets the difference in living style in Quebec. He also chooses to forget that this bill is the most discriminatory that has ever been presented in this House. One member suggested that one of his objections to this bill is that it is racist in nature. Well, I will let everyone judge on that, as I repeat that any bill that gives $2 to those who list English as their first official language while giving only $1 to those who use French as their official language is at least biased in favour of one language group.
Mortgage Tax Credit


An hon. Member:: Explain that.


Harold Thomas Herbert: This extraordinarily iniquitous distribution of public funds derives initially from the fact that there is approximately 70 per cent home ownership among the nominally English, compared to 45 per cent among the Francophones. Taking into account the difference in property values and the lower average mortgage level in the Francophone group, it is easy to see that the $2 for the Anglophone group compared to the $1 for the Francophone group is discrimination of the worst kind and is not likely to be a unifying force in this country.


Fred Alward McCain: Order, please. I would ask the hon. member to relate his remarks to the amendment to this bill. 1 think he is straying from that amendment.


Harold Thomas Herbert: Mr. Chairman, my reason for making these remarks, the reason I want to see this amendment pass and why I want to see an end to this legislation, is because the proposed amendment would ensure that when the government is changed in the foreseeable future there will be a vehicle for the new government automatically to end this discriminatory legislation. 1 am giving my reasons why it is important that this legislation be ended. I am sure that it will be ended via the passing of this clause, which will put a termination date on this bill and stop a situation which is at the present in force in the United States, even though it is undesirable, because it is impossible to stop.
The Tories have talked about putting sunset clauses in legislation, but they oppose a sunset clause in the first major measure which they introduce in this House. Let us examine the effect of this legislation on those who rent. The Minister of Finance in his remarks was critical of those who rent, inferring that one is less than Canadian if one does not have a burning desire to own a home. The person who rents pays for the higher cost of financing apartment buildings. The renter also pays when single family lodgings are given a tax advantage because it means a relative decrease in the value of apartment buildings and, therefore, a lessening of incentive to construct such buildings. Or, to compensate, it would be necessary for the building owner to increase the rent.
Let me read a short extract from a letter dealing with this subject which was written in November by the chief economist of the Canadian Construction Association:
To understand ownership and renting, one has to view the home owner as a business person very much like the owner of rental property. The only difference is that the home owner engages in a 'not at arm's length' transaction, meaning that he sells housing services to himself. High rates of ownership relative to renting indicates that the return from an investment in home ownership is more than the return to the owner of rental property. The deductibility of mortgage interest for the home owner simply enhances an already better than average return he realizes. The ultimate net effect has to be again in asset value, which is an obscure way of saying that the prices of housing units for ownership will rise relative to the price of rental properties. The home owner realizes a capital gain but at the expense of the owner of rental property. This is discrimination, pure and simple, against the owner of rental property. Furthermore, in terms of altering the ownership-rental rates, nothing is accomplished.
The basic issue is the use of the tax system to allocate resources in a way different than what would result from the market system. There is not only no

December 11, 1979
Mortgage Tax Credit
need to allocate more resources to housing, but even if there was, the vehicle chosen will not accomplish that objective. On this basis, the policy is inefficient.
I reiterate that that letter is from the chief economist of the Canadian Construction Association, in another letter from this same association but written by the director of public affairs to another individual can be found these words:
-the government is about to let a measure expire that could have helped a rental situation. Many contractors have expressed concern over the expiration of the capital cost allowance on multiple-unit residential buildings.
This, I fear, is likely what the government will introduce tonight. The letter goes on:
In the budget speech of November 18, 1974, the Minister of Finance announced that the owner of a new multiple unit residential building.. . would be permitted to deduct capital cost allowance against any source of income at any time.
The allowance terminates on December 31, 1979. Further on in the letter we come to the words:
If the capital cost allowance is not extended, a further bias against the construction of rental units will be introduced into the system. The Government's mortgage interest deduction scheme will, in the opinion of the Canadian Construction Association, cause a one-time drop in rental construclion. The combination of these two factors-elimination of capital cost allowance on MURBs and mortgage interest deductibility-could have a serious negative impact on rental construction.
To try to head off this eventuality, I proposed a motion in this House on November 20, but it was negatived by the Tories. We will know from tonight's budget how serious the Minister of Finance is about assistance to the housing industry. When speaking in this House on November 26, I was not accorded the usual courtesy of being allowed to finish my remarks. I wanted to quote from an editorial in the Canadian Builder which reads:
The mortgage interest deductibility scheme, which raised such high expectations during the election campaign, has become as explosive as other hastily improvised 'promises' of that time such as the embassy move to Jerusalem and the privatization of Petro-Canada. The reasons are the same: mortgage interest deductibility was a badly conceived idea, proposed for the wrong reasons, and introduced at the worst possible time.
Mortgage interest deductibility has been condemned by virtually every serious study. Benefits are limited and temporary, but the costs are massive and perpetual. It is a cumbersome, discriminatory and counterproductive allocation of capital resources. It will distort the tax structure, rental sector and the money markets. And it will increase house costs, interest rates, property taxes, inflation, individual debt and federal deficits.
The reason for this massive subsidy is unadulterated political patronage-the purchase of a few votes in the last election, and a stubborn insistence on paying the 'debt' with public funds.
To keep this one promise, Mr. Speaker, the government has been forced to renege on three much more important promises. The article in the Canadian Builder goes on to say:
The federal government must implement its crucial economic promises and set aside election bribery.
Another construction organization, the Housing and Urban Development Association of Canada, reports in a June newsletter, when speaking of 1979 housing construction starts, that a major drop in dwelling units will occur in multiple dwellings with single detached types slightly ahead of 1978 but not
[Mr. Herbert.)
sufficiently to make up the difference. Then the newsletter says that 1980 looks like a better year.


John Horton McDermid: A point of order, Mr. Chairman. I find it very interesting to listen to the hon. member quoting from all those magazines. However, the hon. member for Winnipeg-Fort Garry must be getting a little uneasy, as none of his colleagues is discussing the amendment he has proposed to the bill. The opposition has complained that the committee will not listen to their amendments, and now the amendments are before us they do not discuss them. I think you should order the hon. member to discuss the amendment to clause 1.


Fred Alward McCain: Order, please. 1 have been following the remarks of the hon. member for Vaudreuil. While he has strayed very slightly, he has returned to the subject. The hon. member for Vaudreuil.


Harold Thomas Herbert: Mr. Chairman, quite obviously members of the government do not like to hear the few words of wisdom we offer in our effort to convince them that they should approve their own suggestion that there be a sunset clause in such bills.
1 was quoting another construction organization, the Housing and Urban Development Association of Canada, which reports in a June newsletter, when speaking of 1979 housing construction starts, that a major drop in dwelling units will occur in multiple dwellings. The newsletter also says that 1980 looks like a better year.
The key point is that it is the multiple dwellings that need help. The government is going to take away whatever assistance presently exists and is pouring billions of dollars into the sector that least needs assistance.
In conclusion, Mr. Chairman, I should like to refer again to a letter written in October by the minister responsible for the Canada Mortgage and Housing Corporation. He writes as follows:
In the view of the lending institutions, an NHA insured mortgage backed by the guarantee of the government, represents a lower risk than a privately-insured mortgage.
Let us not, then, hear any further word about turning over the highly lucrative mortgage insurance business to the private sector.
The minister also writes-and this comment is worthy of repetition-that home ownership is a desirable goal for Canadians, and few will dispute that statement. But then he adds:
A sunset clause in the program could only be justified if home ownership were to cease to be a social goal at some future time.
If we applied that reasoning to every program, then surely it would be rare indeed that a sunset clause would be included in any bill. The minister says, and I quote again as follows:
I would not be in favour of including a sunset clause in the program at the outset.
I emphasize those last three words "at the outset". That very phrase acknowledges the principle of the sunset clause,
December 11, 1979

and at what other time should it be included than at the outset? It is when a bill is introduced that we want to be assured that it includes a time limit, not automatically to end the bill or necessarily to end the bill, but to guarantee that action must be taken to review or extend the life of the law.
This has been a long-standing and loudly-professed plank of the Conservative party. Why are they turning their backs on it now when the first major measure of this government is before the House?
May I make one last suggestion, Mr. Chairman. If the government maintains its refusal to include a sunset clause, will it consider changing the year in clause 1 to read 1980 instead of 1979? There is surely something inherently unjust in backdating a tax measure. If the first effective year is next year, then at least the population of this country will be able to take maximum individual advantage of the Tory bill. It will also take some of the pressure off the government, which is forced to use closure in order to rush through this discriminatory, useless and highly undesirable measure that Canadians simply cannot afford.
A sunset clause is an absolute "must", and I plead with the government to reconsider its position.


Peter A. Stollery: Mr. Chairman, I do not appreciate the opportunity too much to listen to the remarks of the hon. member behind the curtain, but he may not be here for too long. I do appreciate, however, the opportunity to say a few words at this stage of Bill C-20 and to speak on the amendment put forward by my party. Of course, I speak in support of the sunset clause.
An hour or so ago I was a little taken aback to hear the Prime Minister issue a threat. In the seven or eight years I have been here, I have never seen a prime minister threaten members that if they do not do something right away, he is warning them. I have never been warned before, Mr. Chairman. I think this is something that members should take note of for possible discussion tomorrow. It is a dreadful display of parliamentary practice for the leader of the country to warn members of Parliament-


Fred Alward McCain: Order, please. 1 cannot really relate this to the amendment before us to clause I of the bill. I would ask the hon. member to please deal with the amendment.


Peter A. Stollery: Mr. Chairman, I thought it was in order to remark on that because it relates to the time of the House that is being occupied with the amendment and, in a way, refers to what we are discussing.
I hope the government will accept this kind of amendment which will give them an opportunity to review in one year what is basically a bad law. This is a bad law that is before the committee, Mr. Chairman. This is a law that was intended by this government to make a $3 billion commitment before we even saw the budget. The opposition has been accused of obstructing Parliament because it thought we should see a budget before we approved a $3 billion tax expenditure.
Mortgage Tax Credit
The cost of this bill is to be paid for by all taxpayers but the money will go to a selected minority of taxpayers. We have taken the position that that is a gross misspending of the taxpayers' money at a time when Canada, like many countries, has severe economic problems with too much unemployment and too much inflation. Before this expenditure is made, we think the Canadian people should have an opportunity to see what kind of a budget the government is proposing.


Some hon. Members:: Oh, oh!


Peter A. Stollery: I ask the member across the way please to be quiet and control himself so that I can finish my remarks.


Fred Alward McCain: Order, please. That is the position of the Chair and I ask the hon. member for Spadina to carry on speaking about the amendment to the bill.


An hon. Member:: Get to the point.


Peter A. Stollery: Mr. Chairman, thank you. I am trying to stay on the subject matter as closely as possible.
We are proposing an amendment that gives the government-whoever that government may be next year and it may not be this one-an opportunity to review a bad law. We are giving the government of the day next year, and I repeat it may well not be this one-


An hon. Member:: You are not too sure.


Peter A. Stollery: 1 just heard a comment from a member who wins every other election. I think we are giving the government an opportunity to re-examine this bad law. It is a sort of hare-brained scheme that has been proposed to try somehow to persuade the people of Canada that the government is living up to its commitment. We want to give the government an opportunity to assess the situation. Hopefully it will take advantage of it. There may be a time-I would not say its members would try to buy their supporters-when memories may have dimmed of wild, extravagant promises, almost all of which are being reneged on, and when they fell they may be able to manage the country and get rid of this very bad law. That is the point of the amendment. It is a good amendment because it gives the government a chance to get rid of a bad law that is being rammed through the House of Commons.
At this stage of the operation, I do not want to review the comments that I made about this bad law approximately two weeks ago. It is bad because it commits a large amount of money to a minority of Canadian taxpayers. It is a bad law because people who have paid for their own homes, for example, older people who often sell their homes because the upkeep is so expensive, and move into apartments, are being fined or penalized. They will have to pay their taxes to a minority of Canadian taxpayers who are living in homes on which there are mortgages.
It is a total disgrace to propose this kind of thing when we have the American experience in evidence only a few miles

December 11, 1979
Mortgage Tax Credit
from Ottawa across the St. Lawrence. Places in New York state have enormously high property taxes partly because of the provision of claiming deduction of taxes from federal income tax. We all know, including members on the other side, about this situation. I cannot imagine how members of Parliament from the Conservative party could go to Washington, as I believe they did in the spring, and be told by everyone that this is the worst kind of law and yet still present it. Once something like this is put in the tax system, it cannot be taken out. To be told that fact by people in Washington who have interested themselves in this type of a tax law and then to return to Canada and present a bill such as Bill C-20 here in the House of Commons, I cannot understand.
There must be members in the Conservative caucus who speak independent'y. I cannot believe that in the group we see across the way there is not an independently-minded person. 1 cannot believe in that entire grey and rather rapidly aging group of monotonous blue suits-


Some hon. Members:: Oh, oh!


Peter A. Stollery: 1 cannot imagine that they would not like to have an opportunity to get out of a bad law. Since we are talking about limiting the term of this law for a year, I believe it will become the subject of renewal by an order in council. I think members opposite would welcome this opportunity to get out of a $3 billion commitment and perhaps a year from now they may well be thanking us for the amendment. If they happen to be the government, and I suspect they will not be, they will be happy to get out of a $3 billion bad law.
I notice that the Parliamentary Secretary to the Minister of Finance has one or two officials with him. This law is so simple, I doubt that a lot of questions will be directed at those officials. However, it is an enormous commitment. It is a law that I am sure Conservative members will want to review in one year. I am sure they will want to get out of this expensive commitment even if the social significance escapes them-and it probably will.
Under this bill, everyone is paying taxes so that a minority of Canadian taxpayers will get the money. Apparently that point does not bother hon. members opposite at all. Surely after one year, members opposite, if they are still here, will want an opportunity to take a second look at a $3 billion commitment. I can see the enthusiasm on their faces because of their interest in being able to get out of this commitment a year from now. I know they are interested in not passing bad laws. They have painted themselves into a corner. They have come up with a bad law. And here we are, giving them an opportunity to get out of that situation. I hope they will take the course of courage and accept this amendment.


Mr. Richardson (Humboldt-Lake Centre):: Mr. Chairman, we are dealing with sunset law amendments. The hon. member for Mississauga South last night mentioned the fact that we have a sunset law every year in the budget. The hon. member who just spoke told us we ought to have a sunset law amend-

ment because of the cost of this program. I shall deal with that aspect and with the deficit which opposition critics have mentioned as likely to arise. I say there will be no such deficit. It is true the government is faced with an $11 billion annual deficit and with the problem of balancing the budget. The hon. member says we should not be passing this bill because eventually it will cost the federal government billions of dollars-he said S3 billion but we believe it will be $2 billion. We maintain that this selective tax cut will eventually increase government revenue.
This is the way we believe it will work. Last year, 16 per cent of those engaged in the construction industry in Canada were unemployed. Last year 70,000 housing units were unsold and this year there were 60,000 fewer housing starts. It has been estimated that this plan would help an additional 600,000 Canadians to own their own homes. It has also been estimated that if we can get those 70,000 unsold units off the market and increase housing starts this year by 60,000, an additional 105,000 man-year jobs would be created; in other words, a year's work for an additional 105,000 Canadians.
At the moment, the government is subsidizing the unemployment insurance program to the extent of some $2 billion a year. If we can take people off unemployment insurance and put them to work we will save money on the unemployment insurance program. Increasing the work force by 105,000 automatically broadens the tax base. Government revenue is thereby increased because there is an increased number of taxpayers even though they are taxed at the same rate. What we lose at the beginning we more that make up for in the end. That is why I say we shall not be increasing the federal deficit.
It should also be remembered that 100 per cent of the labour used in house building in this country is Canadian. Some 95 per cent of all materials going into houses here is Canadian. What better way could there be to help the economy than by using 100 per cent Canadian labour and 95 per cent Canadian materials to build houses for Canadians in Canada, while at the same time helping the construction industry, 16 per cent of whose work force was unemployed last year?


An hon. Member:: What about the amendment?


George Clough Richardson: I am dealing with the amendment-the sunset law. We do not need a sunset law to reduce public expenditure.


An hon. Member:: Sunshine for everybody.


George Clough Richardson: Right. We want to help the construction industry and this plan will do so. That is why we do not need this amendment.
My third point is this: There are tax cuts and there are selective tax cuts. This is a selective tax cut because it is designed to encourage people to invest in their own future. We do not want a sunset law for that. It encourages the private sector to invest in itself so as to get the economy of the country moving. Instead of using taxpayers' money to finance non-pro-
December 11, 1979

ductive make-work programs, private investment money will be used to increase employment and build up this country. We want to reduce the use of public money and increase the use of private investment capital.
Let us suppose for a moment that this selective tax cut had been an ordinary tax cut. Let us suppose, for example, that we had removed the 5 per cent sales tax we have in Saskatchewan-it is 7 per cent in Ontario. An individual is not likely to go out and buy a dozen shirts simply because he gets a reduction of 5 per cent in the price. But it is not at all unlikely that an individual might decide to buy a car because he can get 5 per cent off the price. And where are our cars produced? They are produced outside Canada for the most part. Perhaps half the cars sold in Canada are foreign cars. In other words, if we remove the sales tax the chances are we would be stimulating the economy of a foreign country just as much as our own and the beneficial effect of such a tax deduction would be lost. With a selective tax cut such as our mortgage interest and municipal tax deductibility plan, the main effect will be to stimulate the Canadian economy, and that is one of our prime objectives.
We already have pension plans for the aged, baby bonuses for the young and unemployment insurance for the unemployed. Renters are charged lower rents because landlords are able to deduct interest on capital investment as a straight tax deduction. DREE grants are provided for industry. The fact is, we already have plans for practically every other sector of the economy. This program is designed to give the hardworking, average Canadian taxpayer a break while at the same time stimulating the economy by turning it around and getting the country working again. We do not need a sunset law on a policy of that kind. We plan to give the taxpayer a break.


Mr. Rae:: Whenever I listen to a speech by the hon. member for Spadina I realize why he fought so hard against the introduction of a turkey marketing board. It is because if we did have such an institution he and many of his colleagues in the Liberal party would be in danger for their lives.


Some hon. Members:: Oh, oh!


Bob Rae: Whenever I listen to a speech by one of these born again Liberals, 1 cannot help asking myself where they were over the past 16 years. Where have they been? The hon. member for Spadina spoke as if the Liberal party was ever the least bit concerned with the concept of a tax expenditure. In 1976 my leader, the hon. member for Oshawa, questioned the then prime minister, who is now soon to be once again the one and only member for Mount Royal. In 1976 he asked the prime minister, as he then was, why he did not bring in a tax expenditure budget so that we could have a look at the expenditure side of the budget and could see what kind of benefit he was giving to the men and women of this country, what kind of benefit he was giving to corporations, what he was doing about the oil depletion allowance, how much the oil depletion allowance was going to cost us, how much the investment allowance was going to cost us, how much the fast write-off of capital cost allowance was going to cost us, how
Mortgage Tax Credit
much the research and development benefits were going to cost us and how much were the undeferred taxes were going to cost us.
What was the answer of the prime minister, as he then was, the leader of the Liberal party? The answer he gave was that that is something which takes place in the United States and that he was sure that people up here would not be interested in knowing how much all that was costing us.
I think it is worthwhile pointing out that if we had these new-found warriors over here to my right and my far right, the members of the Liberal party, still in charge, we would not know what we know today as a result of the publication last week of the tax expenditure figures which the Minister of Finance gave us last week. I will have ample opportunity to disagree with the Minister of Finance tonight and tomorrow, but I want to say that this is something that we in our party have called for for ten years. My predecessor, formerly the hon. member for Waterloo-Cambridge, Mr. Saltsman, was in favour of this idea. I want to make it clear that we were calling for it right through the summer, and I am delighted that the Minister of Finance has seen fit to bring forward tax expenditure figures which allow us to see, once and for all, the costs not only of personal welfare and the tax credit system but also the cost of corporate welfare to each and every Canadian taxpayer.
I want to say to the House that we will not be supporting this amendment for a very simple reason. The simple reason is not that we do not support the concept of a tax expenditure and not that we do not support the concept of a sunset law on tax expenditures.
However, as is typical of the left wing of the Liberal party, the final word as to whether this measure will go ahead in future years is not left to the House of Commons. No, as we might expect from the left wing of the Liberal party, the final word on whether we will have a tax expenditure worth some $3 billion in 1980 does not rest with the House of Commons. The final word rests with that indoor relief department of the Liberal party, right, centre and left, the Senate.
I think it is worth noting that the first amendment which the left wing member for Winnipeg-Fort Garry brings forward is in defence of the right of the Senate to hold control over supply, a doctrine which is absurd in constitutional notions and which has no relationship to the democratic concerns of the Canadian people.


Some hon. Members:: Hear, hear!


Bob Rae: We in Canada are walking on one leg as far as our Parliament is concerned. We have one body which truly represents the Canadian people, and we have another body which remains the last unreformed, unreconstituted, unrepresentative and undemocratic representation of the Canadian federation. It was designed by the fathers of confederation to represent the federal principle in our government, but there is sad proof that that body has come to represent the final resting home of Liberal and Conservative politicians, proof indeed

December 11, 1979
Mortgage Tax Credit
that there is life after death but proof of nothing else as far as a democratic principle is concerned.
I think it is extremely important that we make it perfectly clear as to why we in this party are not going to be supporting this amendment. The simple reason is that although we are in favour of a sunset provision on this matter and although we are not in favour of the mortgage tax credit as it is presently designed-nor are we in favour of a filibuster and the kind of malarkey we have been hearing from the Liberal party all afternoon which has had nothing to do with the amendment put forward-we are concerned about the fact that the last word in this matter would be left not to a resolution of this House but to a resolution in the Senate, which is completely unacceptable, 1 suggest, to any member of the House of Commons who is concerned about control of supply. For that reason and for that reason alone we shall be voting against the amendment.


Herb Breau: Mr. Chairman, I was very interested in hearing the speech-or the semblance of a speech-by the hon. member for Broadview-Greenwood. While he may be concerned about turkey marketing boards, he should remind himself that we do have on the books an egg marketing board, and he may want to be concerned about that.


Andrew Hogan: You are laying one now, Herb.


Herb Breau: I recognize that at this time in our political history the New Democratic Party is on its way down. It is obvious from its popular vote in Ontario last time that it does not have anywhere to go. Members of the New Democratic Party say they are for good legislation and that the House of Commons should have an opportunity to review legislation once in a while. The Tories have decided to ram this bill through the House and not provide for more than one day's debate in Committee of the Whole on such important legislation. After the Tories complained for years that when we were in government we were stifling Parliament and bringing in the guillotine, on the first important legislation they bring forward they do the same thing.
That once again is a sign of Tory hypocrisy, and to see the hon. member for Broadview-Greenwood supporting the Tory party in opposing this kind of amendment is really something which is disconcerting to me. Even if the New Democratic Party is going to be wiped off the political map of Canada, 1 thought that at least its members would go down with their heads high. However, obviously in their old days-


Fred Alward McCain: Order, please. I think the hon. member is certainly straying away from the amendment which has been proposed, and I suggest he follow the wording of the amendment, please.


Herb Breau: Mr. Chairman, I want to speak about the amendment of my colleague, the hon. member for Winnipeg-Fort Garry, to clause 1, which would give the House of Commons and Parliament an opportunity after the first year
(Mr. Rae ]
of operation of this legislation to review it and provide that the government would have to pass an order in council and have Parliament either approve or reject the application of this legislation for subsequent years. I find it very difficult to understand-and this is what I was saying-that the NDP could support the Conservative party, the government, in opposing such an amendment.
The reason we want this kind of amendment to this bill is that we are very concerned-contrary to what one hon. member of the Conservative party said a while ago-that this bill will not be a bill which will stimulate construction. This is not an effective stimulative instrument at all. If the Tories want to stimulate housing construction, stimulate the economy or stimulate any kind of construction, the most effective way to do that is through a reduction either in sales tax or an across-the-board tax cut. That is the way effectively to stimulate the economy of Canada in a real way. It is not done through this kind of legislation because the people probably are not going to get this tax credit before next May, June or July. Can the government say right now what the state of the economy is going to be in June or July? This is not an effective way at all. The Minister of Finance should have brought down a budget last June or July, and he could have included in it an effective instrument of economic stimulation, but he did not do that.
Another reason we want this act reviewed under the sunset provision is that we want to make sure that in the second, third or fourth years this kind of push to the construction industry does not do exactly the opposite of what the hon. member of the Conservative party said this afternoon it would do. It might happen that at that time there will be increasing inflation in the economy and therefore, as the Minister of State (Treasury Board) apparently said a couple of days ago or said in the statement which was issued from the office, that is why he was in favour of a sunset provision in such cases. How can a minister of the government, a member who used to speak so independently and so eloquently on any subject when he was on this side of the House, now be tamed so quickly by the Minister of Finance? Apparently he agrees with this kind of provision.
Speaking about ministers, let me point out that one of the reasons we want this matter reviewed by Parliament in subsequent years is that we are very concerned about the injustice and the inequity that this system will bring about in our taxes. Throughout the time I have been active in politics I have thought that the role of government in society was to help those who need help the most. Some of us were encouraged by the fact that members like the hon. member for Egmont made it to the cabinet, even to the inner cabinet. We are happy that members like the hon. member for Kingston and the Islands became Secretary of State for External Affairs or that a member like the hon. member for St. John's East was made a member of the cabinet, or that the member from Newfoundland was made Minister of Finance. However, these people have been completely shut out by the real people who run the Tory party, such as, presumably, the President of the Treasury
December 11, 1979

Board, because how could the member from Newfoundland and the hon. member for Egmont accept such an unjust system?
While the House of Commons has agreed to give second reading to the bill, which is acceptance in principle, and we are in Committee of the Whole under the guillotine-to use the term of the Tories when they were in opposition-the only possible thing we can do is to suggest that the provision at least be reviewed.
Let us look at the effects of this provision. Newfoundland, which has 2.4 per cent of the households of Canada, will receive only 1.2 per cent of the benefits under this bill.
P.E.I., the province of the Secretary of State who wants to be the defender of his province, which has 0.6 per cent of the population, will get only 0.3 per cent of the benefits.
Take the province of the hon. member for Central Nova, who is Minister of Regional Economic Expansion. Some of us thought that this man would be able to fight not only for Nova Scotia but for the Atlantic provinces, and we were happy to see that such an important portfolio was given to a member we thought to be sincere. We still think he is sincere but he is being controlled by the President of the Treasury Board and the barons of Bay Street. That province, which has 3.9 per cent of the population, will get only 2.8 per cent of the benefits.
My province of New Brunswick has been ignored in the real cabinet because we have a Minister of State who does not even have a portfolio, for the first time since confederation. My province has 2.9 per cent of the population of Canada-


Donald W. Munro: Mr. Chairman, 1 rise on a point of order. I am not sure that this litany of households in the various provinces of Canada has anything to do with the sunset law amendment which was put forward by the hon. member's colleague.


Herb Breau: Mr. Chairman, 1 am explaining the injustices of this bill. The hon. member does not like to be confused by facts, and 1 can very well understand that, but I am trying to put some facts on the record to show that this bill is an unjust piece of legislation, that it is inequitable, and therefore I want it reviewed by Parliament next year.


Some hon. Members:: Hear, hear!


Herb Breau: The hon. member does not wish me to prove to the House and to the Canadian public, that the Tories are a party which does not want to use the resources of the government to help those who need help, they want to use the resources of government to help those who do not need help. 1 suppose that what they want to do is to help those who have complained for years that they could not buy homes. Now they will give them a tax credit so that they can go to Florida and buy a condominium there.
I am trying to show that in my province where we have 3.1 per cent of the households in Canada we will only get 1.7 per cent of the benefits.
Quebec, with 21.6 per cent of the households, will receive 18.7 per cent of the benefits.
Mortgage Tax Credit
Ontario, that poor province-I know that this government is making Ontario poor because obviously the Prime Minister and the premier of Alberta have decided that Ontario was no longer important to confederation and had nothing to say- look at how Ontario is being shafted. That province has 37.8 per cent of the households, but they will get 45.4 per cent of the benefits. Could this be the trade-off between being shafted by higher oil prices and getting benefits under this bill? The taxation structure and the property tax base in Canada are not uniform throughout the country; they are not the same everywhere. In my province, for example, school taxes are not collected on the basis of property value but on the basis of a central assessment by the provincial government.
For that reason, I would ask you, Mr. Chairman, to put the question on this amendment now because we would very much like to have it approved.


Some hon. Members:: Hear, hear!


Some hon. Members:: Question.


Mr. Ritchie (York East):: Mr. Chairman-


Some hon. Members:: Filibuster.


An hon. Member:: Obstructing the House.


Herb Breau: Are you for or against the amendment?


Ronald Stuart (Ron) Ritchie: I rise to discuss the amendment, and it does need some discussion because of all the things that have been said in its alleged support that are highly questionable. The principles of this bill have been put before the Canadian people and have been the subject of intense discussion for more than a year. They are, moreover, closely related to a practice which has been in effect in the United States for 50 years. We are not dealing with something that is new and unknown; we are dealing with something that is known.
During the period in which the principles of this bill have been debated, not just in the House but in the country, we have heard the charge made by people who opposed it that the trouble with it is that once you put it in, you cannot get it out. To me, that is one of its greatest assets. If you analyse that statement, what is being said is that the will of the people will keep this law in place once it is in.


Some hon. Members:: Hear, hear!


Herb Breau: If you want it passed, let us vote on it.


Some hon. Members:: Question.


Ronald Stuart (Ron) Ritchie: The argument is that the will of the people should not be allowed to be effective.


Some hon. Members:: Question.


Herb Breau: We speak for the people, so let us vote on it.

December 11, 1979
Mortgage Tax Credit


An hon. Member:: Obstructing the House.


Ronald Stuart (Ron) Ritchie: Mr. Chairman, I have sat politely while the supporters of the amendment made their case. I would now like to make mine.
One of the strong points to be said about this proposal is that it meets the will of a large number of people in this country. I am amazed at the kinds of things which have been said which obviously cannot be believed as some of them are so Alice in Wonderlandish. Surely they cannot be believed about proposals of this kind.
We hear that this bill represents a commitment of expenditure. What this bill really does is that it proposes to leave in the hands of the taxpayers of this country some of their income.


An hon. Member:: Some of it?


Some hon. Members:: Hear, hear!


An hon. Member:: It benefits only Ontario.


Ronald Stuart (Ron) Ritchie: It is a form of arrogance which I find hard to accept that taxpayers are lesser judges of the interests of this country and themselves than we in this House.


An hon. Member:: Bring back Crosbie.


Ronald Stuart (Ron) Ritchie: If this were a very limited group that was affected, then there would be some substance to that argument. But I ask the committee to consider that this is a long-term commitment. It affects not only the people who have mortgages today but those people who will have mortgages. It affects the renters who will buy houses.


An hon. Member:: We will change it in six months.


Ronald Stuart (Ron) Ritchie: Today in this country more than 50 per cent of householders are living in owned accommodations. Not all of them have mortgages, not all of them are in taxable brackets. This is not a proposal for this year and next year; it is proposal which will go on for 50 years. Therefore it is important to future home owners and future mortgage holders, as well as present ones.


An hon. Member:: Filibuster.


Ronald Stuart (Ron) Ritchie: As a result of this bill and its effects over time, I believe in due course that at least 60 per cent of the people in this country, in a normal situation, will benefit from this kind of tax relief. If one includes the people who at one time or another in their lives are householders and own their homes, it will be more than 60 per cent. This is not a class bill.


Some hon. Members:: Oh, oh!


An hon. Member:: Say that with a straight face.


Herb Breau: Only the people of Ontario and British Columbia will benefit.


Ronald Stuart (Ron) Ritchie: In my riding there are a great many senior citizens whose chief asset is their home.


An hon. Member:: We want John Crosbie.


Ronald Stuart (Ron) Ritchie: I am referring to senior citizens who are in relatively straitened circumstances but still pay some income tax. These people are looking forward to this arrangement under which they as householders will receive more from that single asset that they possess.


Some hon. Members:: Question.


Ronald Stuart (Ron) Ritchie: There are some things which should be told about this bill.


An hon. Member:: The NDP will save your lives.


Maurice James Harquail: Mr. Chairman, I rise on a point of order. 1 move, seconded by the hon. member for Gloucester, that the question be put forthwith.


An hon. Member:: You cannot do that on a point of order.


Some hon. Members:: Hear, hear!


The Chairman:: Order. It is not the prerogative of members of the committee to move such a motion. Motions can be moved only when the Speaker is in the chair.


An hon. Member:: Then call in Mr. Speaker.


Gérald Laniel: Order. The only proposal which can be moved is that the committee rise and report progress.


An hon. Member:: It was not a point of order in any event.


Ronald Stuart (Ron) Ritchie: 1 should like to report to the committee some of the experiences I have had with some of my constituents who are renters and hope to be home owners. They see this law as a definite advantage to them because it will enable them to become home owners sooner. Can Mr. Chairman imagine the effect of putting a one-year life on such a proposal? How attractive would it be to potential home purchasers to have the benefit of this law for just one year, and just the first stage of it?


Herb Breau: You forced us into it. The House approved it on second reading.


Ronald Stuart (Ron) Ritchie: Effectively this amendment will kill all the attractions this bill has for potential home owners. This amendment is not in the interests of home owners.


An hon. Member:: Question.


Ronald Stuart (Ron) Ritchie: The law which is proposed is in the interests ultimately of at least two-thirds of the population of this country, and probably more. This amendment would defeat the whole proposal which is now before the committee in terms of any reality. Therefore I urge that this amendment be defeated.

December 11, 1979


Some hon. Members:: Question, question.


Gérald Laniel: Order, please. The hon. Minister of State (Treasury Board) on a point of order.


Mr. Beatty:: Mr. Chairman, 1 am not rising on a point of order. I am rising to speak briefly.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Henry Perrin Beatty: I am delighted to hear the response by hon. members opposite. It was not my intention to take part in the proceedings of the committee this afternoon until the hon. member for Gloucester mentioned my name in the context of sunset legislation. I think probably it is appropriate to put a few comments on the record with respect to the amendment proposed by the hon. member for Winnipeg-Fort Garry.
This government is very much committed to the concept of sunset legislation.


Some hon. Members:: Oh, oh!


Henry Perrin Beatty: Indeed, we will be putting before Parliament a bill which will give it the opportunity to have reviews of programs taking place on a regular basis, including programs similar to this one, to determine whether or not programs that have been put into place by Parliament are serving the purposes for which they were designed. 1 will be looking forward, at the time I table that bill, to having the support of the hon. member for Gloucester and his colleagues on the other side. We believe it will be a fundamental parliamentary reform which will allow Parliament to do the job for which it was designed.
The question remains, with regard to this particular bill before the committee, as to whether it is necessary to incorporate a special sunset clause which will have a potential lapsing provision in it that will remove from Canadian home owners the tremendous benefit that allows them to finance their homes, and in many instances that allows senior citizens to hang on to their homes, when their ability to hang on to them is being challenged by ever-rising property taxes and the cost of housing in Canada.
The government believes very firmly that the bill before the committee today is in the substantial interest of the vast majority of Canadians, both Canadians who own their homes and those who want to continue to own them, those Canadians who find themselves pressed by rising interest rates, rising housing costs and rising property taxes at the municipal level. Also we recognize the fact that for millions of young Canadians this bill represents the best opportunity which they have.


Maurice James Harquail: Mr. Chairman, I rise on a point of order. It is more than just passing strange that a government which introduced Standing Order 75C for closure on this bill now has a minister of the government talking out the bill.


Some hon. Members:: Oh, oh!
Mortgage Tax Credit


Maurice James Harquail: I think that is a terrible, disgraceful performance. We have a motion; we want to vote on it.


Mr. Knowles:: Question.


An hon. Member:: The minister can make his speech another day.


Henry Perrin Beatty: Is it not a curious anomaly that this opposition, which just a few minutes ago argued there was not enough debate about the provisions in this bill, is now attempting to gag Parliament and to prevent members of Parliament on this side of the House from speaking to the bill?


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Henry Perrin Beatty: It is curious behaviour for an opposition which complains about the rights of Parliament.


An hon. Member:: Sit down.


Henry Perrin Beatty: It is curious behaviour for an opposition, which complained that there has not been enough justification for the principles in this bill, not to allow members of the government to make a comment or two. How particularly curious it is, Mr. Chairman, that when I sat here this afternoon I noticed six, seven or eight members of the opposition speak while I am the second or third member from the government side. What a curious anomaly, Mr. Chairman, that freedom of speech should be reserved only for members of the Liberal party.


Some hon. Members:: Oh, oh!


Henry Perrin Beatty: I want to come back to this amendment because I think it is essential that the House give consideration to the proposal made by the hon. member for Winnipeg-Fort Garry. The assurance I can give to the House today is that if Parliament acts speedily on the bill which I will be introducing shortly to provide for sunset legislation, Parliament will once again have the power and the responsibility to keep an eye on the public purse and to ensure that programs which are put in place continue to discharge the responsibilities for which they were designed in the first place. I hope that the sort of interest in having speedy consideration which members of the opposition have shown today will continue at that time.


Maurice James Harquail: On a point of order, Mr. Chairman, how can this minister, similar to that minister from Toronto, the former tiny, perfect mayor who is in the outer cabinet, promise this House or this country anything? He is not in the inner cabinet, so how can he promise the House anything?


Some hon. Members:: Hear, hear!

December 11, 1979
Mortgage Tax Credit


Henry Perrin Beatty: Mr. Chairman, I am grateful that the proceedings of the House of Commons are now carried coast to coast on television, because 1 think it is instructive that Canadians should have the opportunity to watch their parliamentarians in action and to make a judgment as to the behaviour of members of the government and members of the opposition, and then ask themselves whether the opposition is being responsible in this instance. What we have seen in the course of the last several days has been a concerted attempt by the opposition to deprive millions of Canadians of a badly needed tax break and to deprive millions of young Canadians of the only opportunity they may have to own homes, particularly if they lose this tax break and this opportunity to make housing in Canada affordable.


Some hon. Members:: Oh, oh!


Henry Perrin Beatty: Day after day after day in this House we have seen every single parliamentary manoeuvre possible undertaken by this opposition. If they could not defeat the bill then they would drag it out and attempt to obstruct, to do everything possible to deny Canadians of that opportunity.


Some hon. Members:: Oh, oh!


An hon. Member:: Question.


Henry Perrin Beatty: Mr. Chairman, is it not curious that as soon as members of the government begin to defend this bill which will give a tax break to Canadians, suddenly the opposition do not want to hear us? Suddenly they want silence in this House.


An hon. Member:: We do not want silence, we want the question.


Henry Perrin Beatty: Mr. Chairman, clearly the job of the opposition is first of all to convince their own members of their case. The hon. member for Winnipeg-Fort Garry was incapable of convincing three of his own members-


Marc Lalonde: On a point of order, Mr. Chairman, surely the hon. minister knows it is not the opposition that has closed the debate on this subject, but this government.


Some hon. Members:: Hear, hear!


Henry Perrin Beatty: I am delighted, Mr. Chairman, that the former minister recognizes that members of this House should have the opportunity to debate the proposition that has been put forward by his colleague, the hon. member for Winnipeg-Fort Garry. I intend to avail myself of that opportunity despite the shouts from the other side.


Some hon. Members:: Oh, oh!


Henry Perrin Beatty: What the hon. member for Winnipeg-Fort Garry has conspicuously failed to do is convince three of his own colleagues that the case he was putting to deprive Canadians of this tax break could be justified. Three of them stood up and voted against him. Yet what we find today is speech after speech after speech by members of the official opposition who

claim that somehow Canadians can be convinced of something that hon. members over there could not convince their own colleagues of. They are suggesting that somehow Canadians should be deprived of this right and opportunity to spend their tax dollars as they see fit.


Gérald Laniel: Order, please. I am ready to recognize the hon. member on a point of order, but 1 hope it is a point of order this time and not just an argument.


Maurice James Harquail: Yes, Mr. Chairman, it certainly is a point of order, and it has to do with the delaying tactics of the government in this place. The minister used the figure three; he has delayed the vote three times this afternoon in less than ten minutes.


Some hon. Members:: Hear, hear!


Robert Hylton Brisco: On the same point of order, Mr. Chairman-


Some hon. Members:: Order, order.


Robert Hylton Brisco: Mr. Chairman, I would ask if this is Parliament or is it a zoo? Because those are the animals over there, and I am damned well ashamed of them. If they do not know how to behave in Parliament, then l suggest they go back to their constituents and ask them what they think about their performance in this House.


Some hon. Members:: Hear, hear!


An hon. Member:: Look at the Gallup poll.


Some hon. Members:: Oh, oh!


Gérald Laniel: Order, please.


An hon. Member:: Go back to the zoo.


Some hon. Members:: Hear, hear!


Gérald Laniel: Order, please.


An hon. Member:: Withdraw.


Some hon. Members:: Oh, oh!


Gérald Laniel: Order, please. Hon. members will agree with me that such exchanges are not improving the standard of our deliberations. I think these false points of order should be limited as much as possible. I would like to hear what the minister is trying to say.


Henry Perrin Beatty: Thank you very much, Mr. Chairman, for your courtesy. My comments will, indeed, be brief.


Gérald Laniel: The hon. member for Madawaska-Victoria on a question of privilege.


Mr. Corbin:: Mr. Chairman, our rules state that the language used in the House of Commons must remain within
December 11, 1979

certain limits. The hon. member who has just raised a point of order called members of the opposition animals. 1 would ask you, Mr. Chairman, to request that the hon. member withdraw his comments.


Gérald Laniel: I must admit that the comments of the hon. member for Kootenay West were rather strong and spicy, but 1 do not believe they were addressed to any one member in particular. If we consider the exchanges, the provocations and the heat of the debate, 1 do not think it can be said that the hon. member for Kootenay West wanted to attack any one member in particular. It is not easy to control the words used during the debates of the House when hon. members do not want to control themselves. However, even though the comment of the hon.-

Although 1 feel that the remarks of the hon. member for Kootenay West were not of the best standard, 1 do not think they reflected that much on members.


Some hon. Members:: Question.


Mr. Loiselle:: Mr. Chairman, I do not want to question your interpretation of the facts, but since I have had to withdraw certain comments made in the House which were less insulting than those of the hon. member opposite, I consider that, since members of the official opposition have been called animals, this does not concern only us but also all our constituents, and I do not believe that the 75,000 residents of Vercheres would accept or appreciate hearing their representative being called an animal in the House.


Gérald Laniel: For my part, I do not intend to change my ruling. The only possibility for the hon. member would be to appeal my decision or at least to wait until tomorrow and read Hansard. At that time, if we see that there has been a violation of our privileges, and if the hon. member feels personally concerned, he can rise on a question of privilege.


Henry Perrin Beatty: Mr. Chairman, I regret that the interventions of hon. members opposite have taken so much time. Suffice it to say that this government is prepared at any time to justify this proposal, whether here or on the hustings. I would ask that the question be now put.


Some hon. Members:: Hear, hear!


Gérald Laniel: Is the House ready for the question?


Some hon. Members:: Question.
Amendment (Mr. Axworthy) negatived: Yeas, 46; nays, 86.


Gérald Laniel: I declare the amendment lost.
Public Bills
It being five o'clock p.m., it is my duty to rise, report progress and request leave to consider the bill at the next sitting of the House. Is it agreed?


Some hon. Members:: Agreed.
Progress reported.


David Samuel Horne MacDonald: Mr. Speaker, I believe that there is the general understanding, with reference to the Standing Committee on External Affairs and National Defence, that we will revert to motions at this time.


Mr. Deputy Speaker:: Is there unanimous consent that we revert to motions for the purpose of allowing the Secretary of State to introduce his motion?


Some hon. Members:: Agreed.



ROUTINE PROCEEDINGS


David Samuel Horne MacDonald: That the Standing Committee on External Affairs and National Defence be empowered to receive and examine reports from official Canadian Parliamentary delegations which have met with delegations from foreign Parliaments or attended inter-parliamentary meetings, and to report from time to time thereon.


[Stage Direction]
Motion agreed to.
Mr. Deputy Speaker:: It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely public bills, private bills, notices of motions.


PRIVATE MEMBERS' PUBLIC BILLS
Robert Jarvis: Mr. Speaker, I would ask for the unanimous consent of the House to stand all items before Bill C-212.


Mr. Deputy Speaker:: Is there unanimous consent that we stand items 1, 4, 5, 7, 8, 9, 10, 11 which appear before Bill C-212 in the name of the hon. member for Spadina (Mr. Stollery)?

December 11, 1979
Public Bills


Harold Thomas Herbert: Mr. Speaker, you were to look into the possibility that we would have a recording as to whether or not the bills have been printed. Are we at the stage where it could be recorded whether or not the bills preceding Bill C-21 2 could be printed?


Mr. Deputy Speaker:: 1 do not have the list with me at this time but 1 checked it today. From memory, I know that item No. 1 in the name of the hon. member for Esquimalt-Saanich (Mr. Munro) is not ready. 1 know that item No. 4 in the name of the hon. member for Notre-Dame-de-Grace (Mr. Allmand) and item No. 5 in the name of the hon. member for Davenport (Mr. Caccia) are not ready. The hon. member for Davenport is seeking the consent of the House to have one of his other bills called in place of item No. 5.
Item No. 7 in the name of the hon. member for Skeena (Mr. Fulton) is not ready. I know that items 8, 9, 18, 19 and 20 are ready, but the hon. members concerned are not ready to proceed today. Item 11 is not printed. I am satisfied that the only member ready to proceed with his bill at this time is the hon. member for Spadina.


Mr. Lefebvre:: Mr. Speaker, this matter was brought up in the House weeks ago, and we still do not have an answer as to why it has taken so long for these bills to be printed. Could you, sir, inform the House of the reason?


Mr. Kempling:: Mr. Speaker, it is my understanding that while the titles of many of the bills are ready the, shall we say, guts of the bills in many cases have not been drafted. In other words, some members have submitted the titles to their bills and that is all. The opposition whip is quite right that this matter was brought up in the House two weeks ago. The Speaker in the chair at the time said that he would look into the matter and report back to the House. As yet, we have not had that report.


Mr. Deputy Speaker:: I can give the House part of the answer. I know that the hon. member for Esquimalt-Saanich has a very complicated bill. The hon. member has received from the legal branch either one draft or two drafts of his bill, and they did not quite satisfy him. I have been in touch with the parliamentary branch, which is doing its utmost to satisfy the requests of hon. members. For example, the hon. member for Notre-Dame-de-Grace wishes to introduce a bill that was a government bill, but to adapt it to the present circumstances means a great deal of research. It is not only a question of drafting the bill but of considering all other acts that it might affect, and this would take quite a bit of time.
The bill standing in the name of the hon. member for Davenport is not ready and no instructions have been given to the legal branch. The hon. member for Davenport submits, and I think he has a good case, that he had given notice that his preference was not for that bill but for another, Bill C-299, I believe. By the time the notice was processed, the list of bills was printed. He hopes that when the bill is ready for consider-

ation he can get unanimous consent to substitute it for another, so now he is waiting for Bill C-299 to be printed.
I have spoken to all hon. members concerned. I am satisfied that there was a great deal of research to be done and that the legal branch could not be blamed for the first 20 bills on the list.
The hon. member for Skeena has put down a bill concerning the boundary between Canada and the United States. Maritime boundaries have great implications and hon. members who know the subject will realize that. Bill C-208 is ready but 1 do not know why the hon. member for Timiskaming (Mr. Peters) is not ready to proceed. Bill C-209 in the name of the hon. member for Cariboo-Chilcotin (Mr. Greenaway) and Bill C-210 in the name of the hon. member for Beaches (Mr. Richardson) are ready, but 1 do not know why those hon. members are not ready to proceed. Bill C-211 in the name of the hon. member for Burnaby (Mr. Robinson) is not ready because the hon. member is waiting for a draft of the bill which he says is very complicated.
This brings us to Bill C-212. I guess the House gave consent so I shall put the question on the bill standing in the name of the hon. member for Spadina (Mr. Stollery).


PETRO-CANADA ACT AMENDMENT RESPECTING WIDER PARTICIPATION OF PARLIAMENT IN ROLE OF CORPORATION
Peter A. Stollery: that Bill C-212, respecting Petro-Canada, be read the second time and referred to the Standing Committee on National Resources and Public Works.
He said: Mr. Speaker, I recognize that because of the information that was required, some of the time available to discuss Bill C-212 has elapsed. This is a very simple bill which calls for an amendment to the Petro-Canada Act. It would do something which I am sure hon. members will agree is necessary. There has been great controversy about Petro-Canada and the government has said that it would in some way abolish it. A lot of people in the country think that would be unwise and that it would be increasingly unwise as energy crises increase. Just today we learned from the hon. member for Grand Falls-White Bay-Labrador (Mr. Rompkey) that Petro-Canada has been actively involved in the successful well that has been drilled off the coast of Labrador.
This bill provides that before the government alters the role of Petro-Canada, the approval of a special joint committee of the Senate and the House of Commons would be required. The committee would travel across the country and seek the opinion of Canadians. This would be a way for Canadians to participate in this very important decision that the government seems to have made, although now we are not sure just what the decision is.
I am sure hon. members opposite would be interested in this kind of resolution of the impasse they find themselves facing.
December 11, 1979

They know that decisions on petroleum and the energy question change almost weekly. They will appreciate that a way out of the dilemma would be for a parliamentary committee to hold hearings across the country, as was done on the immigration question and the constitutional question in 1970-71. I think it is most important that Canadians have direct access to their members of Parliament in any discussion on the future of Petro-Canada, and this would be a simple way of achieving that end.
I will not take up any more time of the House, Mr. Speaker, and I hope hon. members will support second reading of this bill.
1 notice that hon. members opposite treat anything that is objective or that tries to be constructive with ridicule. This perfectly innocent bill, which is a way out of an impasse, is treated with ridicule. When they give the matter a little thought, however, they may see that it follows parliamentary tradition and that it would be a good way to get direct input from the average Canadian who cannot afford to come to Ottawa to try to influence a decision on Petro-Canada.
Quite a bit of time was taken up with the point of order, so in the spirit of generosity in this Christmas season I hope hon. members opposite will quickly see the wisdom of sending the bill to committee.


Lorne Edmund Nystrom: Mr. Speaker, I hope no one will ask me what this bill means as I am still not sure. I get the impression from what the hon. member for Spadina (Mr. Stollery) has said that if the Conservative party moves to change PetroCan, we should have some kind of a travelling committee, a road show or travelling circus, go around the country.


Peter A. Stollery: I am right here.


Lorne Edmund Nystrom: Now my adviser is next to me, perhaps I can be straightened around. 1 want to say that I am not sure of the usefulness of the bill at this stage.


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: The position I take, and I believe it is unanimous among my two colleagues and myself, is that Petro-Canada should not be changed. Any invitation to consider a road show where people can have input about the future of Petro-Canada is weakening the position that we are taking. Therefore, we should not be setting up a travelling committee to study the different ways that PetroCan could be changed.
I think the hon. member for Spadina is admitting defeat before he has even stepped into the ring. That is something Muhammed Ali would not do when he stepped into a ring, but the hon. member for Spadina has done just that. I am not willing to be that defeatist. I have seen my friends in the Conservative party across the way change their minds on many things these last few months.


An hon. Member:: Name one.
Petro-Canada


Lorne Edmund Nystrom: Someone suggests that I name one. The move of the embassy from Tel Aviv to Jerusalem is one.


An hon. Member:: Another one.


Lorne Edmund Nystrom: We were promised a massive tax cut. I understand from everyone, including the Prime Minister (Mr. Clark), that there will not be a massive tax cut tonight. That is the second one.


An hon. Member:: How about a third one?


Lorne Edmund Nystrom: In the election campaign, at least according to the leaflets of the Conservative party that I have here, we were promised that the statutory Crow rate would remain as a statutory rate. The Minister of Transport (Mr. Mazankowski) is now saying-


Mr. Elzinga:: Mr. Speaker, I rise on a point of order. 1 do not understand how what the hon. member is saying relates to this legislation. I understood we were dealing with a bill that suggested a committee be struck by Parliament to travel across Canada to gain input from Canadian citizens as to what we should do with Petro-Canada. I cannot see how this relates to what the hon. member opposite is saying in regard to this specific legislation.


Lorne Edmund Nystrom: Mr. Speaker, the hon. member is absolutely right. 1 was totally out of order. I got into trouble because my Conservative friends enticed me.
The bill before the House is a little premature. In my opinion, there is no need to set up a travelling road show or a travelling circus until we see what the government has in mind for the future of Petro-Canada. For all 1 know pressure from the able backbenchers on the government side will once again force it to change its mind and keep Petro-Canada as it is. I am fully confident that that will happen. I know how persuasive these members are. I know how concerned the Social Credit party is and the influence it has on the Prime Minister of this country. The real power sits on your extreme right, Mr. Speaker. Therefore, I think the hon. member for Spadina is being a defeatist. He is being premature and admitting defeat before we get on with the show.
I want to take about five minutes to tell the House why we should keep Petro-Canada. I will do this instead of talking about the merits of having a committee receive input from the public. There are approximately five important reasons why Petro-Canada should be saved.
First, PetroCan gives us a window on the oil industry. That is something I think is most important. As the House knows, the oil industry is almost totally controlled by five large companies. One of the problems we have had in the past is that we do not know as a Parliament a lot of what is happening in the oil industry today. We do not know about the impact of certain tax cuts or giveaways. We do know whether or not the oil industry needs certain grants. The only way of finding out is to be involved in the business ourselves.

December 11, 1979
Petro-Canada
Some Conservative members across the way are shaking their heads negatively. However, I am convinced from travelling across this country that the majority of people agree with us. One can quote Gallup poll after Gallup poll but the majority of the people want to keep Petro-Canada. They want to keep a window on the oil industry. Unfortunately at this stage, it is only a small window. I do not know why members of the Conservative party should be so concerned about having a company that is publicly owned. It will be able to give us all sorts of valuable information on that industry.
I would remind hon. members that in 1973 the oil industry told us, the energy minister and the prime minister of the Liberal party that we had an ample supply of oil in this country. We were exporting all kinds of oil to the United States. We were told that we had dozens and dozens of years of supply of oil in this country and that we had no problem whatsoever. Then all of a sudden, we ended up with a shortage of oil. 1 am saying to my friends across the way that surely we need that window on the oil industry so that we know what is happening.
If hon. members want a more recent example, let them look at the information we have received about natural gas from the oil and gas industry. First of all, we were told that we would not have enough, that there would be a shortage. Now there is so much that we have to export gas to the United States. I say that if we had a company like Petro-Canada, not only the size of Petro-Canada but much bigger and more involved in the industry, then we would have that policeman in the industry that we so vitally need.
Second, 1 believe we need Petro-Canada as a tool for national policy-making. It would be a policy-making tool to develop the industry and plan its energy needs rationally with a view to the future.
Petro-Canada is now involved in the northern part of Canada and off the coast of the Atlantic provinces. It is starting to do research and development in Canada. That is something that should have been started a long time ago. That is one of the real advantages of having Petro-Canada owned by the Canadian people.
Third, before Petro-Canada came along over 95 per cent of the Canadian oil and gas industry was owned by foreigners. Now with PetroCan we have a small chunk of the Canadian oil and gas industry that is owned domestically by the people of Canada. I believe that is very important.
Fourth, with so much foreign ownership of the oil and gas industry in Canada, the immense profits of that industry went abroad to the investors. That is the normal result. A lot of money for research, development and exploration was going abroad to help develop the resource in the North Sea and elsewhere in this world. At least by having PetroCan we have control over those profits. These profits can stay in this country and be reinvested in Canada.
The fifth reason for keeping PetroCan concerns what has happened in Iran. Along with the crisis in Iran, there was a diversion of oil last year by one of the large multinationals.

With Petro-Canada, we can have state to state deals such as one attempted by Petro-Canada with the government of Venezuela through its public oil company. There were deals arranged with the government of Mexico. We could have state to state deals and commitments. If there was a shortfall of oil, as in the case of Exxon being cut off by Iran and it wanted to divert some oil from Canada to the United States-a situation like that could happen, in fact it did happen just last year-if there was a deal between Petro-Canada and the government of Iran, then that type of arrangement would not happen. Those types of diversions would not occur.
If PetroCan was given a chance it would be only too willing to make those kinds of arrangements with Mexico and Venezuela. I remind the House that almost every country in the world, be it Britain, Germany or Mexico, have large publicly-owned corporations in the oil and gas business. Most countries have these companies because they feel it important that a non-renewable resource be under the control of and developed by the public sector.
I remind the House as well that President Carter and the Senate of the United States is now looking at PetroCan as a possible model for them. Once again, it seems to me that the Prime Minister of this country is the only person out of step with what is happening in the world around us. I suggest that the button that the leader of this party came up with a few weeks ago with the slogan "Keep PetroCan and sell Joe Clark" is a lot more appropriate than the approach that the Conservative party across the way wants to use.
In addition to those five reasons, 1 believe it is very important that, along with the need for a window on the oil industry, a role in policy making, Canadian ownership, keeping the profits at home and having the power to make state to state deals, we realize in this country the obsolutely immense power of the five multinational oil companies.
1 am now referring to the five great multinationals-Imperial Oil, Gulf, Texaco, Shell and BP. Mr. Speaker, in our country over the last four years those five big oil corporations reported $4 billion in profits and during the first half of 1979 they made profits of $530 million, an increase of 32 per cent since last year. For example, Gulf Oil profits were up 1 per cent, but BP increased its net earnings by 44 per cent over last year.
[ English ]
In addition, Mr. Speaker, we have immense deferred profits. In the case of the oil industry they now amount to some $1.5 billion. I therefore do not see how a member over there can argue that PetroCan is too big, that PetroCan is going to be destructive in terms of the gas and oil industry in this country. I wish the government would, in co-operation with Alberta, British Columbia and Saskatchewan, the energy-producing provinces in this country, do something similar with gas and oil
December 11, 1979

to what the government of Saskatchewan has done so successfully with respect to potash.
Somebody over there says "Here we go". The government of Saskatchewan now has public ownership of over 40 per cent of the potash in the province. They are doing very well in expanding that industry, in amassing and keeping for the people of Saskatchewan huge profits, in controlling the industry. The headquarters of the company are in Saskatchewan. The research and development takes place in the province of Saskatchewan.


An hon. Member:: What does Canada get?


Lorne Edmund Nystrom: Canada, Mr. Speaker, is getting a guarantee, first of ail, that the industry will be owned by Canadians, that the profits will be kept here in this country, that the decisionmaking and policy-making power rests with Canadians. In this case they happen to reside in the province of Saskatchewan but still we are all Canadians. It also gives us control of the potash industry, something, I think, which is very important.
If hon. members across the way are concerned about the loss of the potash market because it is publicly-owned in Saskatchewan, they do not need to be concerned. Sales have gone up. The price of potash has gone up, and expansion in Saskatchewan has been going very well. 1 think this demonstrates, Mr. Speaker, that the ownership of an industry by the people of this country through the governments of this country can be very efficient and decisive in the future development of any province, or of the country as a whole.
I suggest that PetroCan should become the major oil company in Canada in co-operation with the provinces which are producing gas and oil in a similar way to that being followed by the potash company in Saskatchewan. I know the premier in my province would be in agreement with that type of position. There are already some joint ventures being undertaken between Saskoil, which is publicly owned in Saskatchewan, and PetroCan at the federal level.
I do not know what hon. members across the way are afraid of. Why are they so intent on protecting Imperial Oil? They are afraid of government. They are afraid of their own Prime Minister. At least the Government of Canada is accountable in the House of Commons. At least the Government of Canada can be questioned by committees of this House. Governments can be defeated and new ones elected, if they are not carrying out the wishes of the people. But what can the people do about Imperial Oil or about Shell, Gulf Oil or British Petroleum?


An hon. Member:: Tax them!


Lorne Edmund Nystrom: Somebody says "Tax them". But how can you effectively tax some of these large multinationals? If you start doing that, perhaps they will decide not to invest in the country to the extent we need. We need a lot of investment to take place in the future, and perhaps if you tax these corporations too heavily they just will not invest. It is a double-edged sword. Anyway, Mr. Speaker, we have not been taxing them. If 1 had a guarantee out of the government across the way that they
Petro-Canada
would tax the multinationals, then perhaps 1 would be more willing to listen to some of their ideas on PetroCan.


John Horton McDermid: On a point of order, Mr. Speaker, the hon. member is misleading the House. I have facts here that show that Shell Oil, in 1978, paid other taxes of $138 million and production royalties of $205 million, for a total of $342 million-


Mr. Deputy Speaker:: Order, please. This is not a point of order. It is a difference of opinion. The hon. member will be recognized as the next speaker and will have the opportunity to correct whatever part of the debate he feels is not right.


Lorne Edmund Nystrom: Mr. Speaker, I am glad the hon. member for Brampton-Georgetown (Mr. McDermid) made that intervention because I have before me all the tables and statistics of the taxation of oil companies in this country. I have here those figures for the Big Five. I do not think I have the time, now, to read them into the record. I do know, of course, that some of the companies are paying taxes, but the effective taxation rate is very low in the case of many of the large companies.
I refer to Shell Oil, for example, and I find that they have not paid many taxes to the federal government. If hon. members would like me to go over all the statistics I would be very happy to do so, Mr. Speaker.
The point 1 have been making is that I do not see why the government across the way should be afraid of making sure that a little piece of our gas and oil industry is publicly owned. That is the position with respect to PetroCan right now. The position of our party, of course, is that PetroCan should be expanded, should be involved in all aspects of the gas and oil industry, and should become the major oil company in this country. That is precisely how we feel, and I maintain that the majority of the Canadian people support us in that position. I would be willing to debate with any member of the Conservative party in any part of my province or in my constituency on that topic at any time. It is what the people of our country want and I do not see why the Conservative government is so adamant in turning the gas and oil industry back into private hands.
The government has already done so many flip-flops, as was said earlier today, on Jerusalem, on tax cuts, on grain issues and so on. I am appealing to it to do a major flip-flop on PetroCan and keep the company for the benefit of all Canadians.


John Horton McDermid: Mr. Speaker, I welcome the opportunity to rise and discuss the private members' Bill C-212 introduced by the hon. member for Spadina (Mr. Stollery) whose intellect and wit are highly respected by dozens.


Some hon. Members:: Oh!


John Horton McDermid: Here, Mr. Speaker, is an example of the type of government he would like to see. Government by committee, government by hearings, government by spending

December 11, 1979
Petro- Canada
the taxpayers' money foolishly. I can imagine that at night he dreams of getting on his white charger and heading across the country with a joint committee, not to discuss the facts, but to foul up the system of government which we enjoy in Canada.


Maurice Brydon Foster: On a point of order, Mr. Speaker, I do not think the hon. member should really be criticizing my hon. friend from Spadina for referring something to the Standing Committee on National Resources and Public Works, especially the PetroCan bill, because the PetroCan bill is the work of that committee and, incidentally, he should realize that his leader, the Prime Minister (Mr. Clark), has appointed many, many committees-more than is possible for this House of Commons-


Mr. Deputy Speaker:: Order, please. Again, this is a point of debate. The hon. member for Brampton-Georgetown.


John Horton McDermid: Mr. Speaker, that point is well taken and I am getting to it. Here is what the PetroCan act says:
In the exercise of its powers the corporation shall comply with such policy directions as may from time to time be given in writing by the Governor General in Council.
That is, by the government. Right? What the hon. member has proposed is that a House of Commons standing committee make the policy for Petro-Canada, not the government. Well, read his amendment. It is all there. He proposes a committee which would make policy decisions for the government, the committee being in this case the Standing Committee on National Resources and Public Works. That is completely unrealistic. Why do we have a government? Why do we have a cabinet? Why do we not just govern by committee?
1 will refer to the second proposal contained in the bill, to answer the hon. member's question further. The act reads:
No law relating to the insolvency or winding-up of any body corporate applies to the corporation and in no case shall the affairs of the corporation be wound up unless Parliament so provides.
The learned member has brought in an amendment which says:
No law relating to the insolvency or winding-up of any body corporate applies to the corporation and in no case shall the affairs of the corporation be wound up, unless a Special Joint Committee of the Senate and House of Commons, following public hearings held by it in at least one place in each province and territory of Canada, recommends that such law apply or that the affairs be wound up, as the case may be.
The second proposal contained in Bill C-212 would change that section 28 drastically, and I think the hon. member will admit that. Instead of coming to Parliament for a wind-up of the corporation, the hon. member for Spadina would again have a committee make the decision, not Parliament.
A joint committee of the Senate and House of Commons would travel the length and breadth of this country holding hearings and spending taxpayers' money and, if you can imagine, have the power to hold only one meeting per province or territory, and then the committee would be allowed to make the decision, not Parliament. Well, you read it.
[Mr. McDermid.J
This is another example of how the Liberals would abuse the power of Parliament. This is an example of the philosophy of the Leader of the Opposition (Mr. Trudeau) that members of Parliament are nobodies: "Do not leave the decision-making power with Parliament, give it to a committee.' This government plans to strengthen Parliament, not weaken it, as proposed by this ill-conceived Bill C-212.
If the hon. member were frank with this House and the people of Canada, this is a tactic-and a poor one at that-to prevent a decision on Petro-Canada. The Liberals and the NDP have used Petro-Canada to try to smokescreen some of the real problems which face this government and this country. They are trying to convince Canada that Petro-Canada is the answer to all our energy problems. It is unfortunate that the Petro-Canada issue has received so much attention in the last few months as compared with the far more serious problems of future energy supplies and the size of our trade and fiscal deficits.
There is a lot of confusion about Petro-Canada these days. I have spent a great deal of time looking into the Crown corporation, and it is time to state the hard, cold facts.
The original mandate of Petro-Canada was to explore and develop new sources of oil and gas supply for the country in areas where the oil companies were not prepared to gamble. Another key role Petro-Canada was supposed to fulfil was to import, transport, and refine oil and gas. This is a very difficult thing to do, as Petro-Canada does not own a ship or refinery.
It was supposed to give Canada security of supply and reserves. Petro-Canada bought Pacific Petroleums, a company which was, by the way, 37 per cent Canadian owned. The government bought Canadians out with their own money. Did this result in any additional reserves being made available to Canadians? No. These reserves were already secure to Canadians. Security of supply is achieved when new oil reserves are found by hard work and expertise. They are not found by buying companies which already have these reserves. There are 700 oil companies in Canada, not five, as the hon. member from out west suggested.
The members of the opposition parties said that with the formation of Petro-Canada we would have a window on the oil industry. That is what we heard. It is nonsense. The Department of Energy, Mines and Resources employs 4,000 people, at an annual cost of $160 million, to observe every aspect of the oil industry. Governments control oil prices. They control wellhead gas prices, exports, rate of production and so forth. Petroleum monitoring legislation compels all oil companies to provide volumes of information to the government. The oil and gas industry is probably the most highly regulated industry in Canada, so Petro-Canada is not required to do the same job that the Ministry of Energy, Mines and Resources is doing.
Petro-Canada was created by placing an additional tax burden on Canadians, $800 million in cash. This money comes out of the pockets of Canadians in the form of taxes which they otherwise would not have had to pay. The taxpayers also have the ultimate liability of $1.5 billion of debt incurred by
December 11, 1979

Petro-Canada. As it now operates, Petro-Canada is like a medical patient who can stay reasonably healthy as long as he gets frequent blood transfusions. These take the form of money either directly from the federal treasury or money borrowed on the strength of the federal government's credit.
We hear about how well Petro-Canada is operating. In the first six months of 1979 it lost $7.6 million on assets of $3.3 billion. That is quite a feat. When almost every oil company is enjoying success, the state-owned Petro-Canada is losing money. In fact the financial structure of Petro-Canada as it now exists is over-burdened with debt in relation to its equity. Debt exceeds 250 per cent of equity versus a ratio of between 25 per cent and 40 per cent for other petroleum companies.
An executive vice-president of Petro-Canada said, and I quote:
When we screw up, it is because of the government intervention; when things go well, it is a good business decision.
It has never been the intention of the Progressive Conservative government to dismantle Petro-Canada. We have never said we are going to dismantle it. It is the ownership we quarrel with, not the role of the company. Rather than public ownership through the government by way of a Crown corporation, the government wants a private company that Canadians will own shares in so that everyone can benefit from the potential Petro-Canada profits.
If one advocates an independent Canada with a true meaning of the word "independent", where does government intervention stop or start? Trying to protect a company like Petro-Canada from the free enterprise system is not independent; it is socialism. If there is a time for government to step in and take over an industry, then conversely there is a time when government should step out of an industry.
The proposed restructuring of Petro-Canada sets up a situation where a wholly-owned Canadian company could grow more quickly than under its current form. By transferring Petro-Canada to private ownership we will be providing it with the opportunity and the incentive to become the largest oil company in Canada, and the task force has recommended that only eligible Canadians-eligible Canadians-should be permitted to own shares in Petro-Canada and only eligible Canadians-Canadians, I repeat-should be entitled to buy shares in the after-market. I have stated many times that the shares must go to and remain in Canadian hands.
The new privatized Petro-Canada would have almost all the assets and responsibilities Petro-Canada has now-97 per cent of its responsibilities, to be exact-but it would be reorganized and strengthened to a degree that would enable it to play a far more important role than it does now in the Canadian energy industry.
The key public sector responsibilities of Petro-Canada would be transferred to the government. The government would have three essential functions: the negotiations of any necessary state to state oil contracts; the promotion of increased frontier exploration by Canadians; and the promotion of oil sands and heavy oil research. Our government favours a strong private sector energy industry managed by Canadians. We believe in
Petro-Canada
Canadian citizenship ownership rather than Canadian-state ownership. A Petro-Canada owned directly by Canadian citizens would be more effective and efficient and would contribute more to Canada's objective of energy self-sufficiency. Share ownership in Petro-Canada is an opportunity for our children and their children to participate in the immense economic wealth of Canada.
There is no issue about which I feel more strongly than our freedom which exists under the private enterprise system. Our liberty is directly linked to private enterprise. If private enterprise is destroyed, we lose our political freedom. If we believe in the freedom of the individual from state domination, we must not allow any government to dominate our economy through unnecessary government ownership.
So, to sum up, Bill C-212 is another Liberal attempt to usurp the powers of Parliament. The Prime Minister (Mr. Clark) has already stated that any changes to Petro-Canada will be approved in this House. He will bring it to this House. He has made that statement. We do not need the suggested committee to cross this country. A dastardly deed would be done to the Canadian people if this bill ever passed, and I for one oppose this proposal most vigorously.


Some hon. Members:: Hear, hear!


Mr. Jake Froese (Niagara Falls):: Mr. Speaker, may I take this opportunity to thank the hon. member for bringing Bill C-212 before us because that gives us on this side of the House an opportunity to clarify some points that have been misconstrued so far as PetroCan is concerned.
I was delighted with the opening remarks of the hon. member for Spadina (Mr. Stollery) when he acknowledged the fact that Petro-Canada will go into the hands of Canadians. I am delighted with this, and I hope that as time goes on he will give up the struggle. In fact when I was preparing to speak on this bill this afternoon I thought I should be very careful with what 1 said.


Peter A. Stollery: Mr. Speaker, I rise on a point of order. I apologize, and I do not wish to take up the hon. member's time, but 1 would like to ask him a question. Where in this bill have 1 admitted or suggested that the privatization of PetroCan is a fait accompli? This bill is clearly nothing more than a simple and specific recommendation that if PetroCan is to be abolished by this government, the people of Canada should at least have the opportunity to have some input.


Mr. Deputy Speaker:: Order, please.


Jake Froese: I was just referring to the hon. member's opening remarks in which he spoke of the time before the government does anything, and I challenge him on that remark.
Let me come back to what I was saying. In the time I have been in the House I have heard people talk about Petro-

December 11, 1979
Petro-Canada
Canada, and my impression is that in the minds of some members it has become so sacred that it can be compared to the golden calf in the Bible. They just about worship Petro-Canada. I feel that any time we are so taken up with anything, we are in tremendous danger.
I am sorry the hon. member from Saskatchewan has left the chamber, because time and time again I hear members of the NDP talk about the potash industry which has been nationalized in Saskatchewan and what a great thing that is. If anything scares me, it is that Petro-Can can become like the potash industry in Saskatchewan. It scares the daylights out of me, because when the government of Saskatchewan took over the potash industry-every year I use great amounts of potash-what we found was that the price of potash doubled. If it means that when a government takes something over, the result is that the price doubles, then that scares me.
There is no control when the government takes anything over, there is no one who has the right to question government. Has anyone ever had the right to question the government of Saskatchewan with regard to potash? When I think about Petro-Canada staying in the hands of government, the way it was started, I am appalled.
Let me put something on the record. In August of 1976 Petro-Canada purchased Atlantic Richfield for the sum of $340 million. I am not so much concerned with the sum as with the principle. Then they also bought Bay Petroleum Limited. The purchase of Pacific Petroleum in November of 1978 was accomplished differently. Rather than use government cash, it used government credit. Petro-Canada issued redeemable, non-voting preferred shares at the bank to raise the required $1.4 billion for the takeover. The Petro-Canada Act prevents Petro-Canada from issuing preferred shares, so it was done through a subsidiary. If any private business in this country ever attempted to act in this manner, the opposition parties would raise a big outcry at what was going on. But when the government does it, nobody has the right to cry out except the opposition, and that does not change. I am sure that when our government was in opposition they cried out against such a principle which is contrary to every business principle. This is what I am afraid of.
They talk about PetroCan being a window for the industry. If that is so, then let us compare it with business. Tell me what business would ask a person with whom they were involved to be their window? Would the government be unbiased in such a situation? In every other area there are rules and regulations to control this, but all of a sudden we are talking about an industry that the government owns, and all business principles fall aside.
I imagine that PetroCan could change-and that is another possibility that I see-with the whims of government. I say that the Conservative party is as much in danger here as are the opposition parties. It does not matter what party is in government. My reason for saying this is based on the experience I have had with government since 1968. I realize that perhaps this government is not to be compared with any other

government, but in principle it operates in the same way. So long as civil servants control an industry for which they are not responsible, it suffers. If a person is not directly responsible for the spending he does, he is not as interested. That is why it is so tremendously important that we allow Canadians, who will be directly responsible, to own shares in PetroCan. I find that most exciting.
Also, I know that PetroCan, the energy industry in Canada, is a most lucrative business and will be so for years to come. I cannot imagine why the opposition would want to stop Canadians from having an opportunity to become shareholders in the most lucrative business in the country. It is most exciting to own and be part of this country, and I can imagine the enthusiasm with which the Canadian public will want to buy shares in the greatest industry in this country.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: The hour provided for the consideration of private members' business has now expired. I do now leave the chair until eight o'clock at which time, may I remind hon. members, the House will consider the ways and means motion of the Minister of Finance (Mr. Crosbie).
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


Hon. John C. Crosbie (Minister of Finance) moved:: That this House approves in general the budgetary policy of the government.
He said: Mr. Speaker, as I begin my first budget speech I wish to express my thanks to the Prime Minister (Mr. Clark) for entrusting me with this heavy responsibility, and to express my thanks to my colleagues and to the officials in my own department and in the other departments involved for their assistance to me in this budget. I also wish to take the opportunity to express my appreciation to the members of the government caucus for their support.


An hon. Member:: Up to now.


John Carnell Crosbie: Do not worry, gentlemen.
As well, I wish to express my appreciation to the electors of St. John's West who have given me their confidence in four
December 11, 1979

provincial elections since 1966 and who elected me on October 18, 1976, and on May 22, 1979, to represent them in this national institution. My three years in this House have been active and rewarding. I have come to know the country and members on all sides of this House in a way that convinces me beyond all doubt that Canada has immense possibilities. What do we need to realize them? All we need is the initiative, the willingness to work hard, the spirit of enterprise and the risk-taking and vision of our forefathers, whether English or French, or of other nationalities who came to settle in our part of the new frontier of North America.

My dear friends, a new era is opening before us. We will meet an extraordinary challenge. We will achieve the potential of the most beautiful country in the world.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: This is an "achieve our potential" budget. This is a realistic budget that faces the facts and sets out our view of how Canada can realize its potential. Laurier said that the 20th century belonged to Canada. That prophecy may not yet be realized. But if our fiscal and energy policies are adopted, the 1990s will indeed belong to Canada.
This budget is a "first" in several respects. It is the first which it is my privilege to present to this House; the first of the new government; the first federal budget ever presented by a Newfoundlander; and the first Progressive Conservative budget in 17 years. Perhaps most important, it is the first budget of a new era in the economic and financial affairs of this country-an era of new realism and an economic climate to provide improved opportunities and incentives for Canadians.
Since last May, I have met with finance ministers from many countries. I have discussed our economic and fiscal problems with my provincial colleagues. I have listened to the views of business and labour leaders throughout Canada. 1 have sought advice from economists in universities, research institutes and business corporations.
All these contacts and the independent advice offered at the Tokyo Summit by the IMF, the OECD and the Economic Council of Canada-


Some hon. Members:: Oh, oh!


John Carnell Crosbie: Hon. gentlemen do not know what those initials represent. All these contacts have strengthened my conviction that four overriding considerations should guide this budget.
The first is that the Canadian economy has great potential and offers brighter prospects than almost any other country in the world. Second, our economic performance, which has been disappointing during the 1970s, can be improved substantially by improving the framework of economic incentives for private
The Budget-Hon. John C. Crosbie individuals and firms. Third, to be successful our policies must face realistically the problems posed by energy costs and shortages and the huge and swelling budget deficit which we inherited from our Liberal predecessors. And finally, our policies must focus more than in the past ten years on the medium and longer-term potential and opportunities of the country and less upon fine-tuning in the short run and the political subterfuges of the moment.
The need for a new approach is apparent from our experience during the 1970s. In broad terms, the performance of the economy has been about half as good on average as during the 1960s. Our rates of price inflation and unemployment have been roughly twice as high and our rate of productivity growth has fallen by half. Over the past five years, productivity growth, the essential source for increases in the living standards of Canadians, has approximated zero.
This deteriorating performance reflects a number of factors, some beyond our control. These include international developments such as the huge increase in energy prices and the unhappy combination of slower economic growth and general price inflation found in most countries, including the United States. In addition, domestic developments such as changes in the composition and location of the population and changes in labour force participation have been outside the control of government.
In addition to these unavoidable influences, however, part of the reason for our disappointing economic performance during the past decade has been the failure of governments, particularly the federal government, to face up to economic reality and to make the most of the country's opportunities. In my view, one of the main reasons Canadians elected a new government last spring was to set a new and realistic course for this country. This I and my colleagues are determined to do even if it means risking some unpopularity, hopefully short-term. We are committed to the proposition that in the longer run good economics is good sense and thus good politics.


CHALLENGES FACING THE NEW GOVERNMENT
[Stage Direction]
What are some of the challenges we face as a government charting a new course? There has been little or no productivity growth during the past five years. This year prices have been rising at almost 10 per cent. This is the seventh year in a row in which prices have been rising in the range of I'A to 11 per cent. Unemployment is about 7'/2 per cent, below the rate in 1977 and 1978, but still high, especially in certain regions of the country, such as my own native isle, Newfoundland.
in addition, two yawning "gaps" large or Liberal gaps, have emerged in the economy, the Government of Canada deficit and the deficit in the current account of the balance of international payments. At present, federal government expenditures exceed revenues by 25 per cent and the size of the deficit exceeds the total size of the budget in our centennial year of 1967. Our current account deficit is equal to over 2 per cent of the Gross National Product, that is, over 2 per cent of
[Stage Direction]
December 11, 1979
The Budget-Hon. John C. Crosbie
the total value of all the goods and services produced by our country. This is the highest deficit ratio among the major industrialized countries. As a country and as a government we must face the fact that we have to pay our bills and cannot continue by borrowing ever more at the expense of our future.
Because of these deficits our interest rates have increased excessively, private borrowers have been crowded out of the domestic market for funds and our Canadian dollar has depreciated. Our ability to undertake new initiatives to promote the development of the country would be all but eliminated if we were not acting to reduce these deficits.
Our recent experience proves again that simply printing money and increasing government expenditures and the deficit does not help. Such actions only make our difficulties worse. A disciplined and realistic fiscal and monetary framework is essential. It is evident that a system of incentives in both the private and public spheres is critical. Individual choice in response to positive incentives is much more effective than attempts by governments to persuade, dictate and direct. A major priority in this and our subsequent budgets will be to create a system of incentives that will encourage Canadians to work, to save, to invest, to take risks in Canada, to become more efficient in production and to conserve energy and other scarce resources.

[Stage Direction]
Tonight, I fulfil our election promise by providing detailed projections of our revenues, expenditures and deficits out to 1983-84. Hon. gentlemen opposite are shocked. They are not used to hearing the truth. I am also releasing a paper which sets out and describes the economic assumptions on which the fiscal projections are based.
[Stage Direction]
Mr. Speaker, tonight I achieved what I most dearly wanted to accomplish. As promised, I reduced the budget deficit and the financial needs of the government dramatically. 1 am confident that this courageous action on the part of our government will give our economy, at long last, a new lease on life.
[English |
Some hon. Members:: Hear, hear!


John Carnell Crosbie: They are going to be crossing the floor before I finish, Mr. Speaker.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: I will now set out the main elements of this budget.
The fundamental objective of our fiscal plan is to bring about a steady reduction in our deficits. Our cash requirements will be cut in half from almost $10 billion this year to less than $5 billion by 1983-84.
To achieve this objective, a tight ceiling is placed on our expenditures. We will limit growth to 10 per cent a year. This means little growth in expenditures after allowing for inflation.

I now refer to a series of major new measures in the energy field to achieve our goal of self-sufficiency in oil by the 1990s.
Let me make the situation as clear as I can. The revenue and expenditure figures relating to 1980-81 and the following fiscal years are based on the assumption that we will conclude an agreement with the oil and gas producing provinces on our new energy policy and on oil and gas pricing. The agreement involves oil and natural gas price increases over the years 1980-84 so that prices rise at a measured pace toward 85 per cent-only 85 per cent-not the old 100 per cent of the previous regime-of the lesser of U.S. levels at Chicago or the international price.
The Government of Canada intends, in connection with any increase in oil and natural gas prices, to ensure that excess profits are not made by the industry as a result of accelerating prices but that the industry has an adequate rate of return and retains the necessary revenues for continuing exploration and development of new energy sources. We intend to ensure, through our new energy tax, that the Government of Canada obtains roughly half of the returns from oil and gas price increases that exceed $2.00 per barrel and 30 cents per thousand cubic feet per year. On this basis the Government of Canada will have sufficient revenues from the increases in oil and gas prices to carry into effect energy programs, conservation programs and offset programs to assist the regions and people of Canada.
The exact form of our energy tax has not yet been fully worked out-


An hon. Member:: Why?


Joseph Jacques Jean Chrétien: After seven months? Why are you having a budget?


John Carnell Crosbie: It has not yet been fully worked out. Because this is a process of consultation, not of running roughshod over the provinces as did the last government.
But it will be a tax sufficient to give the Government of Canada the revenues we have indicated we need from oil and gas price increases to carry out the programs we consider necessary. 1 have every confidence that the agreements now being reached will go forward and that a new energy tax will be in place before July, 1980.
Because of the absolute necessity of further encouraging our people to use fewer oil products, to conserve oil products now having to be imported in ever larger quantities and at ever greater prices as our own domestic supplies dwindle, and in order to raise badly needed revenues for the Government of Canada in a manner that also serves another vital national purpose, an excise tax of 25 cents a gallon is imposed on gasoline, diesel and other transportation fuels effective tonight.


An hon. Member:: Deals all over the place.


Some hon. Members:: Oh, oh!
December 11, 1979


John Carnell Crosbie: After the crocodile tears are over, 1 will carry on.
This tax will not apply to heating oil in the home or elsewhere.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: The tax will apply to all users of transportation fuels and will replace the current tax of seven cents a gallon on gasoline which applied only to non-commercial users. Thus the increase is 18 cents a gallon for those using gasoline for personal use only. Farming, commercial fishing and urban public transit systems will be entitled to a rebate of ten cents per gallon and so will be taxed effectively at 15 cents.
All federal proceeds from the new energy tax and a substantial part of the proceeds from the excise tax will be returned to the economy in the form of direct measures to assist in developing alternate energy sources, conservation methods and to assist regions and people in Canada in absorbing these higher costs.
The former government stated that it was never its intention to maintain indefinitely the present regime of cheap energy in Canada while the rest of the world was adjusting to the new realities. They said then that there was no practical alternative to continuing a phased adjustment to higher energy prices. They stated that this was essential to provide for future supplies and to conserve this scarce resource. The problem that they left us is that they did not have the courage to carry out their own policy. We have to act now so that Canada can be self-sufficient in all energy sources, including oil, by the 1990s and to protect Canada from chaos whenever international oil supplies are interrupted. Unlike the previous government we will not declare a policy and then fail to act.
1 am announcing tonight an income-tested, refundable, energy tax credit of $80 per adult and $30 per child per year, phased in over two years, for the benefit of lower and middle-income Canadians. The cost of this measure when in full effect will be $1 billion each year.
If the opposition parties permit our mortgage interest and property tax credit legislation to be passed into law, reductions in federal personal income taxes will be $1.2 billion in 1980, rising to $2.9 billion in 1982. Federal income taxes will also be reduced in 1980 by $1.4 billion through indexing.
Investment in common stocks of businesses in Canada will be encouraged by a new investment plan, the Canadian Common Stock Investment Plan, and by changes in the Registered Retirement Savings Plan rules.
To assist small unincorporated businesses, and to recognize the contribution many wives make to running them, salaries paid to wives or husbands by such businesses will be deductible. This will be another step along the continuing road towards equal status for Canadian women.
Tax measures will be introduced to reduce the borrowing costs of small business corporations during the present high-interest situation by means of a small business development bond.
The Budget-Hon. John C. Crosbie
New tax incentives will encourage regional development and promote investment in Atlantic fishing vessels built in Canada.
Farmers will receive substantial relief from problems caused by the taxation of capital gains on farm land.
Income tax changes of importance to family law reform will be introduced.
A surcharge of 5 per cent on corporate income taxes will be imposed for a period of two years as a contribution from the business sector to our overwhelming need to reduce the deficit.
The super depletion allowance for frontier drilling will be extended at a reduced rate to the end of 1980 and then replaced. The write-off for Canadian oil and gas property, including land bonus payments, will be reduced from 30 per cent to 10 per cent.
Taxes on alcoholic beverages, tobacco and some other products will be increased.
Measures will be taken to eliminate certain abuses in the tax system.
Unemployment insurance contribution rates will be increased while the employment tax credit will be enriched.


THE ECONOMY
[Stage Direction]
Before turning to our specific objectives for reducing the deficit and a fuller discussion of the budget measures let me review our current economic situation and the general economic environment we face over the next several years.
Output and employment in the Canadian economy were stronger in the third quarter than had been generally expected. Gross national expenditure in real terms is likely to increase by something like 3 per cent in 1979. Over the past four quarters, business investment in particular has been growing strongly, showing an increase in real terms of 12 per cent.
Job creation has also been impressive. About 440,000 more people were employed in October, 1979, than in October, 1978. More than 135,000 of the new jobs were in the manufacturing sector.
But the news has not all been good. Of particular concern was the deterioration in our balance of payments on current account. During the first three quarters of 1979, imports of goods and services exceeded exports at an average annual rate of $6.1 billion, compared to $5.3 billion in all of 1978. Export growth slowed because of the slowdown in the U.S. economy while import growth accelerated, reflecting the high level of expenditures in Canada for machinery and equipment, most of which is imported.
Consumer prices continue to show year-over-year increases in excess of 9 per cent, despite some slowing of the rate of increase in food prices. At the same time, energy and other non-food prices increased at above average rates.
Our prospects for 1980 are clouded by the recession which now appears to be under way in the United States. Although their output may actually fall, we estimate Canada's will rise about 1 per cent. This means that fewer jobs will be created in
[Stage Direction]
December 11, 1979
The Budget-Hon. John C. Crosbie Canada in 1980 than in this year, and that our unemployment rate is likely to increase to about 8 ¥t per cent.
The rise in energy prices will put upward pressure on the Consumer Price Index. This will tend to be reflected in continuing upward pressure on wages. There is already cause for concern in the rising trend now showing up in wage settlements.
We must look beyond 1980 even though forecasting is hazardous. Our policies are geared to improving the longer-run outlook for the Canadian economy and they are based on a realistic assessment of potential economic performance.
With recovery in the United States we believe that a growth rate of 316 to 4 per cent in Canada for 1981-85 is attainable. This will mean some reduction in unemployment. But changes in the composition of the labour force, together with the influence of unemployment insurance and other social programs, have made unemployment rates in the 4 or 5 per cent range a thing of the past.
Our major challenge is to bring down the rate of inflation. This government fully endorses the Bank of Canada's policy of gradually reducing money supply growth. The government's over-all fiscal plan, and the tax measures I am presenting tonight, indicate our determination to reduce our deficit. Fiscal policy will now share in the task of reducing inflation and so provide a better balanced restraint than is the case when monetary policy is left to attempt the job alone. More funds for investment will be available for the private sector, hopefully at lower interest rates.
if confidence in our determination to reduce inflation can be fully established then the public's expectations may adjust downward. Future price and wage increases may then be lower than could normally be expected given the recent history of price inflation, the rather high levels of capacity utilization which prevail in many sectors and the impact of increases in energy prices.
The other main challenge is to improve our balance of payments position. Most projections suggest that the current account deficit will continue to widen, mainly because of the growing burden of interest payments, although it does not increase as a percentage of GNP. To do better than this we must export more and import less. We need more investment and we need more skills in order to increase our share in both foreign and domestic markets.
A major contribution to improving our balance of payments can come from energy through our new oil pricing and conservation policy which will lessen our imports of oil. As hon. members know, my colleague, the Minister of Energy, Mines and Resources (Mr. Hnatyshyn) has announced approval of the additional exports of natural gas recommended by the National Energy Board. The Board's findings are good news indeed. The intensive exploration and development effort in the Western Basin has paid off. We now have greater security of supply for our expanding domestic gas market and can increase exports. The effect on the balance of payments will be
[Mr. Crosbie.)
substantial. At today's export price, the 3.8 trillion cubic foot surplus would be worth about $15.5 billion, and this figure will be a good deal higher as export prices rise.
Let me return now to a more detailed discussion of our plans for deficit reduction.

[Stage Direction]
We plan to cut the government's financial requirements from about $10 billion this year to $4.8 billion in 1983-84. There will be a reduction of $1% billion next year to bring the 1980-81 level to $8.2 billion, and further reductions each year thereafter. Relative to the size of the growing economy the reduction in financial requirements will be even more dramatic, falling from 3.9 per cent of GNP this year to 1.1 per cent by 1983-84. By that year we will have accomplished a substantial, if not complete, repair of the damage of the fiscal position incurred over the last five years when financial requirements were allowed to rise from $2 billion, or 1.4 per cent of GNP in 1974-75, to this year's $10 billion.
The most fundamental element in our plan to lower the deficit is severe restraint over government expenditures. We are planning to hold total expenditure growth to 10 per cent in each of the next four years. In real terms there will be no growth at all. To achieve a lower deficit next year we have had to reinforce this expenditure strategy with the tax increases introduced tonight. Continuation of this degree of expenditure restraint under conditions of more normal economic growth will bring substantial further reductions in the deficit without further tax increases.
The decrease in financial requirements of about $5 billion over the next four years results both from an increase in the government's non-budgetary sources of funds and from a reduction in the budgetary deficit. The budgetary deficit will decline each year, from $11.2 billion, or 4.4 per cent of GNP this year, to $9.1 billion, or 2.1 per cent of GNP in 1983-84.
That is an amazing decrease, Mr. Speaker, when one takes into account inflation and other expenditures. With the current level of the budgetary deficit the government's net debt is increasing at an annual rate of 20 per cent. Imagine, Mr. Speaker, 20 per cent. This, of course, implies a rising ratio of debt to government revenue and to GNP, and is a major contributor to rapid growth in interest costs which would sooner or later have to be met by higher taxes. It is not a sustainable position. This progressive reduction in deficits will bring the growth rate of net debt below 10 per cent by 1983-84. Government debt will then no longer be increasing relative to the size of the economy and public debt charges will no longer be pre-empting a larger and larger share of government expenditures.
The deficit on the national accounts basis declines very much in line with financial requirements. It is projected to fall from $10.2 billion in 1978-79 to $4.4 billion in 1983-84. On this accounting basis the consolidated position of all governments in Canada, federal, provincial and local, taken together, is expected to be in balance by 1983.
[Stage Direction]
At this point I wish to make an announcement with respect to Canada's gold holdings. The great rise in the price of gold in the last three years, at a time when the other components of our official international reserves have been declining, has led to a substantial shift in the composition of our reserves portfolio. At the current market price the 22 million ounces of gold held by the Exchange Fund now constitute almost 75 per cent of our reserves. This is a far higher proportion than we have held in the past. It is also higher than the proportion now held by other industrial countries, with the exception of the United States which holds only small amounts of foreign currencies. From the standpoint of the efficient management of our reserve assets, 1 think it would be more appropriate if this proportion were reduced somewhat. This would provide a more balanced portfolio and allow us to invest more funds in interest-earning assets. Accordingly, 1 plan to sell up to one million ounces of gold in the relatively near future if the market for gold continues to be firm. Part of this may be purchased by the Mint in connection with its "Maple Leaf' coin program. The balance will be sold in the market.

[Stage Direction]
The 10 per cent planned expenditure growth rate is well below the nominal growth rate projected for the economy as a whole. It will mean that the ratio of federal government outlays to GNP will decline from 20.6 per cent in 1979-80 to 18.2 per cent in 1983-84. Relative to the size of the economy federal expenditures will be brought back to the level of the late 1960s.
An increasing portion of the fixed expenditure total will be devoted to new energy initiatives. Expenditure growth in all other areas combined will have to be restricted to about 9 per cent per year.
It is estimated that spending under existing major statutory programs will increase, on average, by 9.3 per cent over the next four years. The public debt charge component would be increasing much faster were it not for the reductions in deficit we are planning. Even so, public debt charges are expected to increase by 19.5 per cent or $1.7 billion next year. That is our legacy from our predecessors. Excluding this item, growth in outlays will be held to 8.1 per cent in 1980-81. Our commitment to provide substantial funds for new energy initiatives over the next several years, our desire to mount some new programs in other areas and our need to maintain reserves for contingencies mean that significant cuts will be required in existing programs. In general, new initiatives will have to be financed by reductions elsewhere. But the basic Progressive Conservative principle of support to less well off people and regions will be maintained, though programs will be re-examined and may have to be more selective.
In order to improve our control over expenditure, the government has put a new expenditure management system in place. This is described in a paper 1 tabled last week. I have also tabled an analysis of tax expenditures to draw attention to their importance and to the need for their control.
The Budget-Hon. John C. Crosbie

[Stage Direction]
Mr. Speaker, energy has become an issue of fundamental concern to every Canadian. This government, under the leadership of the Prime Minister, has pursued extensive consultations with provinces on energy policy. Our objective is clear. It is to move Canada rapidly away from dependence on oil imports and towards self-sufficiency by 1990. Our goal is to achieve this in three ways:
-constrain demand for oil;
-encourage substitution from oil to other forms of energy; and
-bring on new oil supplies.
This reminds me of the Hibernia announcement today which is an example of bringing on new oil supplies.
In 1979 imports of oil will exceed our exports by about 50 million barrels a year and without new action this gap will widen rapidly. If no action is taken, by 1985 our net imports will be about 200 million barrels which valued even at today's prices would seriously undermine our balance of payments. These are the figures; these are the facts.
As long as Canada is so dependent on oil imports we will be vulnerable. Recent events in the Middle East have underlined that point for us. We must protect ourselves from international oil politics. If we do not, despite the fact that we are one of the few industrialized nations that has this potential, our children and our children's children would be right to scorn us for the desperate straits we had left them in.
We believe that the best way to begin to reach our goals is to establish realistic prices. Crude oil prices must ensure an adequate return to producers to finance needed exploration and development. Retail prices to consumers must encourage conservation. Both must be high enough to eliminate our oil trade deficit by 1990. Our own Canadian conventional oil reserves will be seriously diminished by the late 1980s. In the next 7, 8, 9 or 10 years they will be diminished and gone. We cannot wait for a cataclysm to occur.
As the Government of Canada we have a responsibility to all Canadians. The effects of more rapid increases in oil prices will be felt in every corner of the economy and by every Canadian. The Government of Canada must have the ability to soften the impact of higher prices where it is essential to do so. We want to take steps to ensure that those hardest hit by energy price increases are helped. There are interregional consequences to be addressed. The rights and aspirations of producing provinces must be respected. Industry must havt an adequate cash flow. The federal government must have a fair share of the increased returns flowing from energy price increases to discharge our national responsibilities. These are the elements that we have balanced in developing an energy policy.
We are prepared, once full agreement is reached with the producing provinces, to permit oil prices to rise in stages, by $4 a barrel in 1980 and by $4.50 a year thereafter, subject to
2262
[Stage Direction]
December 11, 1979
The Budget-Hon. John C. Crosbie
further adjustment after 1982 if necessary. Gas prices on existing flows of natural gas will rise to maintain the present 85 per cent relationship with oil but, to encourage substitution of gas for oil, distributors will pay a lower price on additional volumes calculated at 65 per cent of the commodity value of oil. The difference will be used by distributors to aid householders and industry in converting from oil to gas.
The new energy tax, to be introduced by a tax bill in this House in 1980 with a request for passage before August 1, 1980, will recoup amounts roughly equal to half of the return from oil price increases in excess of $2 per barrel annually and natural gas price increases in excess of 30 cents per thousand cubic feet annually. The technical details of this tax have still to be worked out in a co-operative effort. The additional price increases to commence on July 1, 1980, over and above the $1 increase already scheduled for January 1, 1980, will not take effect before the new tax is in place.
Producing provinces would levy their royalties on the full price increases and receive additional revenues. Over the next four years, under this projection, from 1980 to 1983 the total net revenues from oil and gas would amount to $90 billion. Of this, the provinces would receive about $40 billion and the federal government $17 billion. The industry would receive $33 billion net of all production costs and taxes. The funds flowing to the industry should be ample to support all needed new energy investments. If this does not turn out to be the case, adjustments will be made to ensure sufficient cash flow to the industry for all needed energy projects.
We need immediately, however, an added incentive to conserve our petroleum resources. Consumption of motor gasoline over the first nine months of 1979 was up 4.3 per cent. In contrast, in the United States, gasoline use was down about 4 per cent. Canadian prices of gasoline, diesel fuel, and heating oil are low by international standards. Indeed, our prices for gasoline are substantially lower than those of all major industrialized countries. They are now 30 to 35 cents per gallon lower than those in the United States. The United Kingdom is an oil producer and its prices are just about double our prices. The difference is all the more significant when it is realized that, historically, our prices have been higher than those in the U.S. by a few cents per gallon. Canadians now pay less for gasoline, when allowance is made for general price inflation, than they did 25 years ago. For example, in 1954 the price of gasoline was about 45 cents per gallon. If gasoline prices had risen as much as consumer prices in general, the price today would be about $1.20 per gallon. In fact, in large Ontario cities the price today is around $1.07 per gallon.
Some hon. Members:: Oh, oh!


John Carnell Crosbie: We all have to face the facts, Mr. Speaker.
Low prices have led to excessive consumption. Canadian energy consumption, per capita, is the highest in the world. Our oil supply picture is tight and fragile. Stocks of fuel are lower than last year. Any major disruption of international or domestic oil supply, or an abnormally cold winter, could lead
[Mr. Crosbie.J
to major difficulties. It could raise the possibility of rationing. To sit back and do nothing would be criminal.
In order to further energy conservation efforts and to increase revenues, I have announced tonight a federal excise tax on transportation fuels. Even with this tax, the price of these products will generally be lower than in the United States.
These measures taken in total will produce tangible results.
I expect that by 1985 they will result in import savings of 100 million barrels a year, or some $2.5 billion even at today's prices.
All of the revenues from the envisaged energy tax and a substantial part of the revenues from the excise tax will be used to finance a number of energy-related measures and offsets to the impact of energy price increases. These form an integral part of our energy program. I would like to provide some examples of the programs we envisage, some of the details of which are in the supplementary budget material.
First, we will be moving quickly to set up a national energy bank. It will help fund a wide range of energy-related projects.
Second, we will provide increased funding for the Canadian Homes Insulation Program.
Third, we will be mounting a major effort to ease the burden of adjustment to higher prices in the Atlantic region. We will provide grants to compensate for the additional costs of electricity generation resulting from oil price increases in excess of $2 per barrel per year.
Lower and middle-income Canadians need some protection from the price increases. A good deal of protection is already afforded to many by the indexing of social programs and the income tax system.
In addition, the refundable energy tax credit I announced tonight when in full effect will return about $1 billion to Iower-and middle-income Canadians. The credit will commence with the 1980 tax year. It will be phased in to reflect the fact that the full impact of energy price increases is not felt until later next year. One-half of the benefit will thus be claimable in 1980, with full benefits claimable in 1981 and subsequent years. Credit benefits will be reduced for families with incomes over a threshold amount. For 1980 the threshold is $21,380. For every $100 of income in excess of this threshold, benefits will be reduced by $5. When the plan is in full effect a family of four will receive the full benefits of $220 each year as long as their income is below the threshold amount. If benefits exceed a family's tax otherwise payable, the excess will be refundable to them.


OTHER TAX MEASURES IN THE ENERGY FIELD
[Stage Direction]
I will now give more detail on other significant tax changes in the energy field.
The depletion allowance for frontier drilling, the so-called super depletion, expires in April of next year. It has been attracting significant Canadian participation in frontier exploration. To achieve our energy goals, it is important that
December 11, 1979
[Stage Direction]
efforts to find new supplies not slacken. However, under the current system, high-income individuals can receive tax benefits that are actually larger than the costs of their investments. This is not tolerable. 1 propose to reduce the richness of the incentive. This modified incentive will terminate at the end of 1980, at which time a new policy of the Minister of Energy, Mines and Resources for encouraging frontier exploration will be put in place.
I propose also to modify other aspects of resource taxation. Two types of schemes have recently developed that are resulting in undesirable tax leakage. Some non-residents have found ways of escaping tax on income from sales of resource properties. Measures are proposed in this budget to preclude this possibility. As well, rules are to be introduced to ensure that tax-exempt institutions cannot be used as vehicles to circumvent the income tax rules relating to resource taxation. Ingenuity is a wonderful thing.
Currently, amounts paid to acquire leases to explore, including bonus payments to provinces, can be written off at 30 per cent per year. The generosity of this provision has contributed to aggressive bidding up of prices for exploration rights, making it harder for small, new companies to compete. I am therefore reducing the write-off for Canadian oil and gas properties from 30 per cent to 10 per cent per year.
Finally, there is a serious anomaly in the federal sales tax on gasoline and diesel fuel. This tax is now a specific amount per gallon. It does not rise as prices rise. It will now be converted to 9 per cent of sale price to retail outlets. This change will ensure that the sales tax remains at 9 per cent on gasoline and diesel fuel as prices rise.
The two-year write-off provision for energy conservation equipment will be extended for five more years. At the same time I propose to broaden its scope to include certain solarheating equipment, small-scale hydro projects and other conservation equipment. Solar heating is very valuable in Newfoundland, Mr. Speaker.
To encourage Canadians to experiment with fuel substitutes 1 am relaxing the licensing requirements under the Excise Act for the experimental production of alcohol. It is better known as gasahoil. 1 think that's what the name is.

[Stage Direction]
Let me now turn, Mr. Speaker, to other tax matters.

[Stage Direction]
I believe that the economic goals of this country can best be served by a revitalized private sector.
Some hon. Members:: Hear, hear!


John Carnell Crosbie: That has not been heard too often in budget speeches recently. Enterprise has to be rewarded, equity investment encouraged and incentives restored.
The Budget-Hon. John C. Crosbie
The new tax incentive measures I am announcing tonight are fully consistent with and reflect the commitments we have made to the Canadian people.


EQUITY INVESTMENT
[Stage Direction]
It is our policy to promote equity investment by Canadians for Canadians. 1 have announced tonight two important tax measures to achieve this goal.
First, I am removing the impediments to investments in common stocks by Registered Retirement Savings Plans. After 1979, capital gains realized in an RRSP will no longer be fully taxed as income when distributed but will only be taxed at half rates upon withdrawal at retirement. Dividends on shares held in an RRSP will also be taxed at half rates when the funds are withdrawn. This tax treatment will be roughly equivalent to that available if the dividends and capital gains were received directly. The measure will apply to dividends and capital gains on common shares of public Canadian companies listed on Canadian stock exchanges. The changes should result in a significant shift of RRSP funds toward common stock investments.
Second, a Canadian Common Stock Investment Plan is created for investment in the common stock of Canadian companies listed on stock exchanges in Canada. The plan is structured so that it can be administered by investment dealers and stockbrokers-the acknowledged experts in this field.
Each investor will be able to contribute up to $10,000 per year to the plan, with a lifetime limit of $100,000. In order to give the plan a good start an investment of $20,000 will be permitted in 1980. Contributions will not be deductible when going into the plan and will not be taxable when withdrawn. Capital gains on eligible amounts invested in public company shares will not be taxed as long as the investor remains in the market through his plan.
These measures will significantly lessen the impact of the tax on capital gains on common stocks. They will mitigate the impact of inflation on taxation of capital gains. Canadians will have increased incentives to own a wide range of Canadian companies.
I want to announce yet another measure concerning capital gains. Capital gains on farm land are one of the major sources of retirement income for farmers. Farmers and fishermen are, of course, the backbone of the country. Tax on those gains is now deferred as long as the farm remains in the family. But farms are not always left to family members. Starting tonight bona fide farmers may put $100,000 of taxable capital gains on farm land into an RRSP without tax consequences. This will mean that on the sale of his iand a farmer will be able to receive $200,000 in a capital gain without incurring any immediate tax liability. Farmers will then also be able to take further advantage of the various options for deferring tax when their RRSPs mature. They will of course continue to be able to place up to $5,500 annually in RRSPs out of income and to acquire an income-averaging annuity contract with capital gains proceeds not rolled into an RRSP.
[Stage Direction]
December 11, 1979
The Budget-Hon. John C. Crosbie
We now have some seven years of experience with the taxation of capital gains. In 1980 I estimate that federal and provincial revenues from that source could amount to over $1 billion. A number of proposals have been made, and a number of concerns expressed, regarding taxation of capital gains. 1 have reviewed them all. 1 intend to table shortly a discussion paper on the tax treatment of capital gains and will refer it to a parliamentary committee for consideration. It will deal comprehensively with this whole issue, including the question of indexing capital gains and providing special exemptions for certain gains such as those on farm land and publicly-traded Canadian shares. After I have heard the views of the committee I will consider what further action should be taken in my next budget.
Some hon. Members:: Hear, hear!


John Carnell Crosbie: My grandfather had five, and I expect no less.


SMALL BUSINESS
[Stage Direction]
The small business sector is one of the great strengths of this country.
For the 1980 and subsequent tax years unincorporated businesses will be allowed to deduct salaries paid to spouses who work in the business. This measure is costly. It will reduce federal revenues by some SI50 million a year. But, in addition to aiding small business, the measure is sound tax policy. It properly recognizes the contribution that many wives make to running small businesses and which has recently been denied.
Some hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, I have recently been reminded that wives are not chattels.
I recognize, Mr. Speaker, the impact of recent increases in interest rates. I want to do what I can to alleviate the situation for small business corporations. As a temporary one-year measure, small Canadian-controlled private corporations will be able to issue up to $500,000 of special bonds. Interest paid on these small business development bonds will be treated as dividends. It will not be taxable to the lending institution nor deductible to the borrower. This form of after-tax financing will substantially reduce the borrowing costs of small business corporations. I emphasize that this is a temporary measure of special benefit and so it is proper to apply a "sunset" provision to it. It will be limited to indebtedness issued before the end of 1980 with a term of at least one year and no more than five years and each borrower will be eligible for only one such bond issue at any time.


REGIONAL AND SECTORAL DEVELOPMENT
[Stage Direction]
Mr. Speaker, 1 want to encourage further the important contribution that the private sector can make to regional development. I am proposing to do this by facilitating the use of selective tax incentives. They will take the form of tax contracts with firms for investment projects in the Atlantic
[Mr. Crosbie.)
Provinces and the Gaspe region of Quebec. This stimulant will add to the range of federal incentives now available in the designated regions of Canada. The nature of the tax incentive will be determined on a project by project basis and will be administered by the Department of Regional Economic Expansion in consultation with the Department of Finance. This selective approach will provide the flexibility to promote those economic activities which are most promising.
I also have particular measures to announce concerning the Atlantic fishing industry. After tonight, capital cost allowance on leased fishing vessels, newly-built in Canada for use in the Atlantic fisheries, may be used to reduce other taxable income. This will draw new sources of private financing into the sector and will permit an improvement in the quality of the fleet for vessels ranging in size from the long-liner to the freezer trawler.
Some hon. Members:: Hear, hear!


John Carnell Crosbie: For those hon. members opposite who do not know, a long-liner is a vessel of anywhere from 40 to 60 feet in length. It has nothing to do with National Sea or anyone else.


REVENUE-RAISING MEASURES
[Stage Direction]
There is need for a short-term temporary tax increase to ensure that the deficit comes down. There will be a simple, straightforward corporate surtax of 5 per cent of federal taxes otherwise payable by all corporations. The measure has an explicit "sunset" clause. It will terminate at the end of 1981. It will yield some $370 million in the 1980-81 fiscal year. The advantage of this simple surtax is that it leaves intact the structure of tax rates and tax incentives. For example, small businessmen and manufacturers who pay tax at lower rates will pay a smaller amount of surtax.
1 have reviewed the federal commodity tax structure. The federal levies on alcohol products have not been increased for a number of years. With inflation, the real burden of these taxes has fallen significantly. Moreover, the taxes on alcohol need to be rationalized. The tax per unit volume of absolute alcohol varies dramatically from product to product. I am proposing a series of tax changes that will reduce this disparity and will, over all, yield some $130 million in 1980-81. Taxes will rise on spirits, brandy, fortified wines, table wines and regular and light beer. Taxes will fall on sparkling wines and on malt beer. The tax increases amount to about 11 cents on a bottle of spirits, 13 cents per bottle of table wine, and 1 cent per bottle of beer.
An hon. Member:: What about screech?


John Carnell Crosbie: Eleven cents on a bottle of screech!
There will also be an across-the-board increase in specific excise taxes and duties on tobacco and tobacco products of about 10 per cent. These taxes have not been increased since 1974 and their real value has also fallen. The increase on cigarettes will amount to 2.5 cents per pack of 20.
December i 1, 1979


OTHER TAX CHANGES
[Stage Direction]
Let me outline briefly some changes needed to tighten the law or to relieve tax burden. Details are contained in the Notices of Ways and Means Motions I will table tonight.
On the income tax side, I am introducing a number of important relieving measures in the area of taxation and family law. In future, new attribution rules will ensure that income on property transferred from one spouse to the other will not be attributed to the spouse transferring the property after the date of a written separation agreement. The deduction for maintenance payments will be extended to cover amounts paid under a court order on account of illegitimate children and common-law spouses.
For the 1980 and subsequent taxation years, the tax exemption for allowances paid to volunteer firemen will be raised from $300 to $500.
Some hon. Members:: Hear, hear!


John Carnell Crosbie: I have to admit that there is a slight conflict of interest here. 1 am an honorary member of the Goulds fire department.
The government attaches great importance to the voluntary sector. We have referred the whole matter of encouragement of the voluntary sector to a special parliamentary committee chaired by the hon. member for Fraser Valley West (Mr. Wenman). I have undertaken a review of this area, including the tax treatment of charitable donations, and will provide a paper to that committee. The recommendations of the committee will be carefully considered before my next budget.
I have also considered the vitally important matter of providing adequate and effective incentives for research and development. Our future growth is heavily dependent on how we handle this issue. Some rather complex tax incentives for R & D have only recently been legislated and I want to study these more closely before 1 introduce any other tax changes.
I will immediately introduce relieving measures for overseas remuneration of Canadians temporarily employed abroad. This will help the competitive position of Canadian corporations that obtain certain export contracts including construction, installation and engineering projects abroad.
I am going to introduce a number of technical changes relating to prepaid expenses, the so-called capital gains strips, deferred employee compensation plans, term preferred shares, corporate partnerships, transfers of corporate residence, options to acquire control and certain others. Many of these are designed to check tax avoidance arrangements.
Finally, I have reviewed the special capital cost allowance provisions for multiple-unit residential buildings. This tax shelter was introduced in 1974 and has been extended many times since. The pressure on vacancy rates is not now as serious as previously. Thus, I am letting this provision expire, as currently provided, on December 31 of this year.
There are also a number of tax structure changes in the federal sales tax. Manufacturers of cosmetics are not paying
The Budget-Hon. John C. Crosbie
their fair share of tax. 1 am proposing that the tax on cosmetics apply to the full sale price to retailers. I am also moving to ensure that the photo-finishing industry pay its fair share of sales tax.
Amendments will be made to ensure that the exemption from sales tax for transportation equipment does not extend to service equipment mounted on the vehicles. The exemption for aircraft will exclude aircraft used for recreational purposes and flight training and put them on the same basis as automobiles. The exemptions for containers and coverings will be modified to confine them to manufacturers only.


EMPLOYMENT PROGRAMS AND UNEMPLOYMENT INSURANCE
[Stage Direction]
This government considers it essential to increase employment. We strongly believe that the jobs created should be of a permanent nature, be in the private sector and be available to those who are most vulnerable to unemployment.
The central feature of our approach will be an improved tax incentive to increase employment opportunities, particularly for the young. This will replace the current Employment Tax Credit Act and a number of other programs. It will include an $80 per week tax credit to help create jobs in the private sector for more than 100,000 people.
When this program is fully implemented, about $250 million per year in tax expenditures will be made available to the private sector for job creation for young people and for the long-term unemployed. This represents a substantial expansion from the $100 million set aside by the previous government.
We also wish to ensure that our programs respond to the differences in employment opportunities across the country. In addition to the tax credit, an amount of $50 million will be made available to initiate new measures, or to supplement existing programs, aimed at stimulating employment and economic development in Eastern Canada.
This government is committed to achieving greater consistency with insurance principles and to bringing greater financial integrity to the unemployment insurance program. To this end, effective in 1980, the costs of unemployment insurance benefits, except those associated with high regional rates of unemployment, will be financed by employer and employee premiums. The costs of job referral and related employment services will also be financed by premiums.
The weekly employee rate of unemployment insurance contributions for 1980 will be increased from $1.35 per $100 of insurable earnings to $1.60. The employer rate will be increased from $1.89 to $2.24.
This is only the first step in a comprehensive review of the unemployment insurance program started last June. Further proposals are now being developed in full consultation with provincial governments, labour and business. When these changes become effective, the premiums will be re-examined.

[Stage Direction]
In the Multilateral Trade Negotiations (MTN) we reached agreement with our trading partners on tariffs and on a number of non-tariff measures. In most cases implementation
[Stage Direction]
December 11, 1979
The Budget-Hon. John C. Crosbie of these agreements will not require changes in legislation. With respect to customs valuation, we have not yet concluded negotiations with our trading partners.
We hope the results of these negotiations will provide important incentives to improve Canada's over-all economic performance. Clearly, if Canadian producers are to be exposed to increased competition at home and abroad, it will be important that we have the means to act at least as quickly and effectively as other countries to deal with unfair trading practices and imports which injure Canadian producers. This means that we should strengthen our emergency procedures, particularly on anti-dumping and countervailing duties and safeguards generally. I intend to issue early in the new year a White Paper proposing a number of changes in Canadian legislation and practice in these areas. The government will be asking that the Finance, Trade and Economic Affairs Committee be empowered to hold hearings on the White Paper.
1 intend to introduce tomorrow a notice of ways and means motion to give effect to the tariff reductions agreed to in the MTN. The motion will include full details of the phase-in schedule for the reductions. The ways and means motion will also provide for the withdrawal of the benefits of the British Preferential Tariff system from the United Kingdom, Ireland and the Republic of South Africa.
Meanwhile I am introducing tonight a separate notice of ways and means motion setting out a small number of tariff changes not related to the results of the MTN.

[Stage Direction]
Mr. Speaker, this government is committed to open government and to ongoing appraisal of the effectiveness of existing programs and policies. I am determined that this include the budgetary process and programs based on tax incentives.
Excessive budget secrecy should be eliminated. To facilitate this process, I am taking the following steps. First, by publishing the major study on tax expenditures I am enabling Canadians to gain a better appreciation of how their government is using public funds to provide special tax incentives to particular industries and groups.
Second, I am undertaking to refer special studies on tax policy and tax system problems to a parliamentary committee for detailed review, beginning in the near future with a paper on the taxation of capital gains. 1 will also be referring the Report of the Commodity Tax Review Group back to the Committee on Finance, Trade and Economic Affairs so that it may complete its deliberations.
Third, in future, prior to tabling tax bills I will make available to the public a draft of the legislation so as to enable tax practitioners to make technical suggestions for improvement.
Fourth, I am undertaking a general review of tax measures to which "sunset" provisions might be attached. I have taken such action already in this budget.

1 am convinced that a more open budgetary process is desirable. 1 think it can be achieved and still ensure that sensitive tax changes are not revealed in advance of the budget.
Mr. Speaker, 1 would now like to table projections of the government's revenues and expenditures together with explanatory notes, the notices of ways and means motions, supplementary information giving details of the measures 1 have proposed tonight, background material on our energy situation and strategy, and a paper setting out the economic assumptions underlying the fiscal projections. I would ask the consent of the House to include in Hansard the tables which provide four-year projections of the government's fiscal position on the public accounts and national accounts bases, and of the principal components of budgetary revenues.
Mr. Speaker:: Order, please. Pursuant to Standing Order 41(2), the minister asks for leave to table documents, but he seeks the agreement of the House that they be printed in Hansard as read. Is there agreement of the House to that?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.
[Editor's Note: For text of the above tables see Appendix.]


John Carnell Crosbie: I thank hon. members for being so patient.


IN CONCLUSION
[Stage Direction]
Mr. Speaker, 1 would like to conclude on a personal note. Fifty-one years ago my grandfather, Sir John Crosbie, delivered his fifth and final budget speech to the House of Assembly of what was then the Dominion of Newfoundland. The revenue of that dominion in the previous year had been $8,932,000. The expenditures had been $10,533,000. There had been a deficit of $1,601,000. In that framework, Mr. Speaker, they had administered a dominion government, built and operated a railway, created the fishery, commenced mining projects and industrial development in pulp and paper mills, started a highway system and had that year completed a drydock in St. John's. They had little in the way of resources but they had vision, confidence and courage.
How much more do we Canadians have today and how much better off are we in comparison to our own country 51 years ago. How much better off are we in comparison to nearly all of the other nations of the world today. Few have our potential or our resources, especially in energy.
An hon. Member:: Your grandfather was a Liberal.


John Carnell Crosbie: We have doubters opposite.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: I have great faith in Canada. The people of Newfoundland share that faith today with renewed confidence in the fisheries and with offshore energy resources. The members of this government believe the possibilities for the future
December 11, 1979

in Canada are tremendous and we are determined to create the conditions which will achieve these possibilities.

My dear friends, I trust you will see in this budget a step in the right direction. This budget faces facts. We have the choice: either Canada achieves its potential of which we can all be proud, or we go back to our bad habits of spending without concern for tomorrow. I beg of you to support this wonderful project, the achievement of the potential of our beautiful country.

I believe that with the measures announced tonight we are at a new beginning for Canadians. I hope that you will agree that this is a budget that faces the facts and a budget that will help Canada achieve its potential. The future truly can belong to Canada. It is up to us.
Some hon. IMembers: Hear, hear!


Herbert Eser (Herb) Gray: Mr. Speaker, after listening to what the Minister of Finance (Mr. Crosbie) had to say tonight, I am sure that the people in Canada in general would not want to shake hands with him. I do not think it would be parliamentary for me to try to say what middle and lower-income people would like to do to the minister and the Conservative government after hearing his speech tonight.


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: What we have heard this evening is not really a budget-it is the Minister of Finance's biggest joke yet, a cruel joke on the Canadian people. How can this be a budget if it is based on an energy agreement on oil and gas pricing that does not yet exist and which may never exist?


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: How can this be a budget if it is based on an energy tax that does not exist, whose form is unknown, and which is not even described in the budget speech or in the ways and means motion accompanying the budget speech? The government will have to bring in another bill to implement the proposed new energy revenue tax. So much for the minister's desire to do away with fine tuning.


Some hon. Members:: Oh, oh!


Herbert Eser (Herb) Gray: To the extent the budget is a real one, it is still a cruel joke on the Canadian people. The increase in energy prices and excise taxes proposed in the budget will bring inflation back to double digit levels in Canada.


Some hon. Members:: Shame!


Herbert Eser (Herb) Gray: It will increase unemployment by at least 1 per cent, and certainly will not do anything for employment except reduce it. It will reduce the gross national product next year in Canada by at least one point. All Canadians will be hurt by this budget, especially lower and middle-income Canadians.
The Budget-Mr. Gray
They will be hurt by the higher excise taxes and the higher energy prices. These are regressive taxes and the burden of them will be most severe on the lower and middle iacome Canadians. But this Conservative government are willing to drive the Canadian economy into the ground in order to carry out to the utmost their commitment to their Conservative doctrinaire policy. That is more important to them, than the growth of the economy or fighting unemployment and creating more jobs. None of that matters to them except that doctrinaire commitment, that doctrinaire fear of the word "deficit".
This budget, to the extent that it is a budget, is one of broken promises. Remember the promise of the $2.5 billion tax cut promised by the then leader of the opposition before the election and during the election on the hustings and in this House. It is not in this speech. Instead of that $2.5 billion tax cut promised, we have an increase in taxes for lower and middle income Canadians of close to $5 billion.
This energy package is really a disguised tax increase, a mammoth tax grab on the part of the Conservative government from the Canadian people, especially lower and middle income Canadians. A few days ago the Minister of Finance said that the promise of the Prime Minister (Mr. Clark) of a $2.5 billion tax cut was a temporary aberration. After seeing this budget, I think the Canadian people will hope that it will be nothing more than a temporary aberration, a temporary aberration carrying the Canadian economy away from the path of growth and development it was on at the time the government changed on June 4.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: In this budget speech the Minister of Finance talked about his concern for government spending and controlling government spending. But when in this House a few days ago he was asked about the cost of this mortgage tax credit plan, all he had to say was, "Don't worry about it. It is just a squeesly-measly couple of billion dollars". In order to pay for this plan-and he would not admit this during the debate on Bill C-20-obviously he has chosen the route of higher taxes on lower and middle income Canadians, higher taxes cancelling out benefits to people who are still hoping, in spite of Conservative higher interest rates, to benefit from the mortgage interest tax credit plan, and adding to the burden of taxes on the many more Canadians who do not benefit from this plan at all: the renters, the people with no mortgages, the people with incomes too low to pay income tax against which a tax credit can be claimed.
This is really just a "squeesly-measly" budget for Canadian workers, farmers, consumers, and small business people, when it comes to helping them to have better standards of living and to secure a chance for success in their chosen endeavours. This budget gives a little with one hand and takes away a lot with

December 11, 1979
The Budget-Mr. Gray
the other. The Conservatives in this budget are taking a lot more than they are giving.
The total tax grab of some $5 billion in this budget is a lot more than they are giving back through tax credits to lower income people and the other modest, and in some cases, useful changes offered, for example, to small business. In fact this budget will bring about an increase in inflation of more than 2 per cent; a loss in Canadian gross national product of more than 1 per cent; an increase in unemployment of some 1 per cent. All of this was set out in the Conservative government's own background budget paper.
The increase in energy prices, and the tax increases set out in this budget, will cost Canadians some $5 billion in 1980. This is the equivalent of at least a 14 per cent increase in personal direct taxes for individual Canadians. Imagine the burden of that on people already struggling with the burden of Conservative high interest rates. As a result of this Conservative "hard times" budget, it is likely that the real gross national product in Canada will decline in 1980, the first such decline in output in the last 26 years.
Let us take a quick look at the impact of what is in the budget-the higher energy costs proposed, the excise tax on gasoline-on average Canadian families. These increases will not be cancelled out by the special tax credit or anything else in this budget. I am told that the increase for an average family in Atlantic Canada will be $398. I am told that the increase for an average Ontario urban family will be more than $400, and for an average Ontario rural family in the dairy farm area, it will be an increase of some $621. For a family grain farm in Manitoba, there will be an increase of some $453, because of this Conservative budget.
This is a budget that is bringing hard times for Canadians who face higher taxes through the revenue grab in this budget, a revenue grab disguised by the government in its budget as an emergy self-sufficiency policy. These higher prices for energy will mean more inflation and fewer jobs, as Canadians companies draw back from their efforts in the economy because of the lesser competitive advantage than the one they would have had previously through lower energy prices.
This is no way to develop an industrial strategy for Canada, something our country needs, something we Liberals are working for and want to see implemented. Such a strategy means policies to create a more productive and efficient economy. It means capitalizing on the basic strengths we have in Canada. These strengths include our actual and potential energy supplies, and the justifiable fact that up until now, at least, we have had prices much lower than world prices. But these Conservative budget policies will greatly eliminate these natural advantages for economic development which we have in Canada. We have here an unreal attempt to bring our energy prices close to, if not right up to world prices.
To conclude for this evening at least, I want to say that, contrary to what the Minister of Finance tried to say at the
beginning of his budget, this is not an "achieve our potential" budget. It hits at Canada's potential, it harms Canada's potential. The late R. B. Bennett would be proud of this new Minister of Finance this evening, but I do not think Canadians generally, especially middle- and lower-income Canadians, would be proud of the minister or of the Conservative government. They will be hoping for an early opportunity to get rid of that government. So, we will be accepting the invitation of the Minister of Finance to cross the floor. This party will cross the floor a lot sooner than many think; it will be the government once again.

I now move, Mr. Speaker, seconded by the hon. member for Ottawa-Carleton (Mr. Pepin):
That the debate be now adjourned.


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


Some hon. Members:: Agreed.
On motion of Mr. Gray, debate adjourned.

[English |


PRIVILEGE
Joseph Jacques Jean Chrétien: Mr. Speaker, I should like to raise a very serious question of privilege at this moment. Yesterday in the media there was what I would consider a very serious leak about the budget which was read by the Minister of Finance (Mr. Crosbie) tonight in the House. I would like to give notice to the Minister of Finance and to the Prime Minister (Mr. Clark) that we on this side of the House consider it a very serious matter and that it should be treated by the Prime Minister in the best tradition.


Walter David Baker: Mr. Speaker, I gather my friend has given notice of a question of privilege. In that event, 1 move:
That the House do now adjourn.
[ Translation]


Mr. Speaker:: Order. The hon. member for Saint-Maurice (Mr. Chretien) has raised a question of privilege, that is he has given notice that he will raise tomorrow or in the near future a question of privilege concerning information given in advance about the budget presented this evening.


[Stage Direction]
Motion agreed to.
Mr. Speaker:: The House stands adjourned until tomorrow at 2 p.m.
On motion of Mr. Baker (Nepean-Carleton), the House adjourned at 9.30 p.m.
December 11, 1979


APPENDIX
[Stage Direction]
Table 2
Government of Canada Fiscal Position
Public Accounts Budgetary Revenues
	1978-79	1979-80'" 1980-81*"		CNJ 00 i 00	1982-83'"	1983-84'"
			($ millions)
[Stage Direction]
Personal income tax
[Stage Direction]
14,048
[Stage Direction]
16,455
[Stage Direction]
17,805
[Stage Direction]
19,705
[Stage Direction]
22,045
[Stage Direction]
24,890
[Stage Direction]
Corporation income tax
[Stage Direction]
6,262
[Stage Direction]
7,740
[Stage Direction]
8,920
[Stage Direction]
10,620
[Stage Direction]
12,210
[Stage Direction]
13,830
[Stage Direction]
Non-resident tax
[Stage Direction]
568
[Stage Direction]
655
[Stage Direction]
740
[Stage Direction]
800
[Stage Direction]
895
[Stage Direction]
985
[Stage Direction]
Customs duties
[Stage Direction]
2,747
[Stage Direction]
3,205
[Stage Direction]
3,395
[Stage Direction]
3,680
[Stage Direction]
3,990
[Stage Direction]
4,285
[Stage Direction]
Sales tax
[Stage Direction]
4,729
[Stage Direction]
4,405
[Stage Direction]
4,805
[Stage Direction]
5,525
[Stage Direction]
6,355
[Stage Direction]
7,180
[Stage Direction]
Oil export charge
[Stage Direction]
328
[Stage Direction]
735
[Stage Direction]
630
[Stage Direction]
435
[Stage Direction]
305
[Stage Direction]
210
[Stage Direction]
New energy tax
[Stage Direction]
0
[Stage Direction]
0
[Stage Direction]
415
[Stage Direction]
1,640
[Stage Direction]
2,650
[Stage Direction]
3,630
[Stage Direction]
Gasoline excise tax
[Stage Direction]
516
[Stage Direction]
935
[Stage Direction]
2,945
[Stage Direction]
2,895
[Stage Direction]
2,870
[Stage Direction]
2,855
[Stage Direction]
Other excise duties and taxes
[Stage Direction]
1,453
[Stage Direction]
1,580
[Stage Direction]
1,805
[Stage Direction]
1,890
[Stage Direction]
1,975
[Stage Direction]
2,065
[Stage Direction]
Total tax revenues
[Stage Direction]
30,651
[Stage Direction]
35,710
[Stage Direction]
41,460
[Stage Direction]
47,190
[Stage Direction]
53,295
[Stage Direction]
59,930
[Stage Direction]
Non-tax revenues
[Stage Direction]
4,564
[Stage Direction]
5,010
[Stage Direction]
5,375
[Stage Direction]
5,850
[Stage Direction]
6,420
[Stage Direction]
6,710
[Stage Direction]
Total budgetary revenues
[Stage Direction]
35,215
[Stage Direction]
40,720
[Stage Direction]
46,835
[Stage Direction]
53,040
[Stage Direction]
59,715
[Stage Direction]
66,640
[Stage Direction]
<" Numbers in these forecast columns should be interpreted as mid-points of ranges of estimates.
2270
[Stage Direction]
December 11, 1979
Table 3
Government of Canada Revenues and Expenditures National Accounts Basis
	1978-79	1979-80'"	-L CD CD 0 1 00	1981-82'1'	1982-831"	1983-84'1'
			($ millions)			
Revenues
[Stage Direction]
Direct taxes, persons
[Stage Direction]
18,136
[Stage Direction]
20,910
[Stage Direction]
23,320
[Stage Direction]
25,955
[Stage Direction]
29,155
[Stage Direction]
32,955
[Stage Direction]
Direct taxes, corporations
[Stage Direction]
5,996
[Stage Direction]
7,230
[Stage Direction]
8,455
[Stage Direction]
10,090
[Stage Direction]
11,510
[Stage Direction]
12,925
[Stage Direction]
Direct taxes, non-residents
[Stage Direction]
636
[Stage Direction]
725
[Stage Direction]
815
[Stage Direction]
880
[Stage Direction]
980
[Stage Direction]
1,075
[Stage Direction]
Indirect taxes
[Stage Direction]
9,904
[Stage Direction]
10,925
[Stage Direction]
14,245
[Stage Direction]
16,205
[Stage Direction]
18,290
[Stage Direction]
20,370
[Stage Direction]
Other current transfers from persons
[Stage Direction]
16
[Stage Direction]
15
[Stage Direction]
15
[Stage Direction]
15
[Stage Direction]
20
[Stage Direction]
20
[Stage Direction]
Investment income
[Stage Direction]
3,973
[Stage Direction]
4,275
[Stage Direction]
4,870
[Stage Direction]
5,490
[Stage Direction]
6,180
[Stage Direction]
6,700
[Stage Direction]
Capital consumption allowances
[Stage Direction]
651
[Stage Direction]
730
[Stage Direction]
815
[Stage Direction]
935
[Stage Direction]
1,070
[Stage Direction]
1,210
[Stage Direction]
Total revenues
[Stage Direction]
39,312
[Stage Direction]
44,810
[Stage Direction]
52,535
[Stage Direction]
59,570
[Stage Direction]
67,205
[Stage Direction]
75,255
[Stage Direction]
Expenditures
[Stage Direction]
Current goods and services
[Stage Direction]
12,315
[Stage Direction]
12,700
[Stage Direction]
13,950
[Stage Direction]
15,450
[Stage Direction]
16,950
[Stage Direction]
18,600
[Stage Direction]
Transfer payments to persons
[Stage Direction]
14,670
[Stage Direction]
15,000
[Stage Direction]
16,725
[Stage Direction]
18,375
[Stage Direction]
20,550
[Stage Direction]
23,050
[Stage Direction]
Subsidies
[Stage Direction]
2,335
[Stage Direction]
3,450
[Stage Direction]
3,250
[Stage Direction]
3,075
[Stage Direction]
2,925
[Stage Direction]
2,875
[Stage Direction]
Capital assistance
[Stage Direction]
470
[Stage Direction]
625
[Stage Direction]
900
[Stage Direction]
950
[Stage Direction]
1,000
[Stage Direction]
1,075
[Stage Direction]
Current transfers to non-residents
[Stage Direction]
732
[Stage Direction]
715
[Stage Direction]
775
[Stage Direction]
825
[Stage Direction]
875
[Stage Direction]
900
[Stage Direction]
Interest on the Public Debt
[Stage Direction]
6,869
[Stage Direction]
8,450
[Stage Direction]
10,200
[Stage Direction]
11,400
[Stage Direction]
12,650
[Stage Direction]
14,050
[Stage Direction]
Transfers to provinces
[Stage Direction]
10,441
[Stage Direction]
11,750
[Stage Direction]
12,925
[Stage Direction]
14,325
[Stage Direction]
15,750
[Stage Direction]
17,175
[Stage Direction]
Transfers to local governments
[Stage Direction]
371
[Stage Direction]
400
[Stage Direction]
450
[Stage Direction]
500
[Stage Direction]
550
[Stage Direction]
600
[Stage Direction]
Gross capital formation
[Stage Direction]
1,285
[Stage Direction]
1,150
[Stage Direction]
1,200
[Stage Direction]
1,250
[Stage Direction]
1,300
[Stage Direction]
1,350
[Stage Direction]
Total expenditures
[Stage Direction]
49,488
[Stage Direction]
54,240
[Stage Direction]
60,375
[Stage Direction]
66,150
[Stage Direction]
72,550
[Stage Direction]
79,675
[Stage Direction]
Surplus or deficit (-)
[Stage Direction]
-10,176
[Stage Direction]
-9,430
[Stage Direction]
-7,840
[Stage Direction]
-6,580
[Stage Direction]
-5,345
[Stage Direction]
-4,420
[Stage Direction]
|1) Numbers in these forecast columns should be interpreted as mid-points of ranges of estimates.
December 11, 1979
[Stage Direction]
Table A1.1
Growth Rates of Budgetary Revenues (Public Accounts Basis)
1978-79 1979-80 1980-81 1981-82 1982-83 1983-84 (Per cent per year)
[Stage Direction]
Personal income tax
[Stage Direction]
4.5
[Stage Direction]
17.1
[Stage Direction]
8.2
[Stage Direction]
10.7
[Stage Direction]
11.9
[Stage Direction]
12.9
[Stage Direction]
Corporation income tax
[Stage Direction]
7.4
[Stage Direction]
23.6
[Stage Direction]
15.3
[Stage Direction]
19.1
[Stage Direction]
15.0
[Stage Direction]
13.3
[Stage Direction]
Non-resident tax
[Stage Direction]
12.9
[Stage Direction]
15.3
[Stage Direction]
13.0
[Stage Direction]
8.1
[Stage Direction]
11.9
[Stage Direction]
10.1
[Stage Direction]
Customs duties
[Stage Direction]
18.8
[Stage Direction]
16.7
[Stage Direction]
5.9
[Stage Direction]
8.4
[Stage Direction]
8.4
[Stage Direction]
7.4
[Stage Direction]
Sales tax
[Stage Direction]
6.8
[Stage Direction]
-6.9
[Stage Direction]
9.1
[Stage Direction]
15.0
[Stage Direction]
15.0
[Stage Direction]
13.0
[Stage Direction]
Oil export charge
[Stage Direction]
-24.1
[Stage Direction]
124.1
[Stage Direction]
- 14.3
[Stage Direction]
-31.0
[Stage Direction]
-29.9
[Stage Direction]
-31.2
[Stage Direction]
New energy tax
[Stage Direction]
n.a.
[Stage Direction]
n.a.
[Stage Direction]
n.a.
[Stage Direction]
295.2
[Stage Direction]
61.6
[Stage Direction]
37.0
[Stage Direction]
Gasoline excise tax
[Stage Direction]
- 13.7
[Stage Direction]
81.2
[Stage Direction]
215.0
[Stage Direction]
-1.7
[Stage Direction]
-0.9
[Stage Direction]
-0.5
[Stage Direction]
Other excise duties and taxes
[Stage Direction]
2.3
[Stage Direction]
8.7
[Stage Direction]
14.2
[Stage Direction]
4.7
[Stage Direction]
4.5
[Stage Direction]
4.6
[Stage Direction]
Total tax revenues
[Stage Direction]
5.8
[Stage Direction]
16.5
[Stage Direction]
16.1
[Stage Direction]
13.8
[Stage Direction]
12.9
[Stage Direction]
12.5
[Stage Direction]
Non-tax revenues
[Stage Direction]
17.4
[Stage Direction]
9.8
[Stage Direction]
7.3
[Stage Direction]
8.8
[Stage Direction]
9.7
[Stage Direction]
4.5
[Stage Direction]
Total budgetary revenues
[Stage Direction]
7.2
[Stage Direction]
15.6
[Stage Direction]
15.0
[Stage Direction]
13.3
[Stage Direction]
12.6
[Stage Direction]
11.6
[Stage Direction]
n.a. = not applicable
[Stage Direction]
Wednesday, December 12, 1979