1979-02-27

ROUTINE PROCEEDINGS


Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise on a matter of urgent necessity pertaining to public funds given by the Department of Secretary of State as revealed in answers to my recent order paper questions concerning the Canadian Council of Christians and Jews, and particularly the grant of over three-quarters of a million dollars in recent months and the fact that there has been a rash of resignations of prominent Canadians from this organization, including the hon. Paul Hellyer, Jerry Yanover, legislative assistant to the Deputy Prime Minister, newscaster Max Keeping, CBC official Ludovic Hudon, and the reported impending resignations of other prominent Canadians, including the member for North-umberland-Durham (Mr. Lawrence).
I move, seconded by the hon. member for Oxford (Mr. Halliday):
That this House requests the Auditor General of Canada to immediately institute a full audit of public funds given to this organization, with the full force of the law being used to determine the disposition of such funds, including a reported 4.5 per cent interest, $57,000 mortgage and a $9,000 interest-free loan to Peter Jones, president of the organization, the removal from the board of directors of such respected-


Mr. Speaker:: Order, please. It seems to me the hon. member is going on to support his motion. The motion the hon. member wishes to put, can be put, pursuant to Standing Order 43, only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


DONATIONS BY TORONTO CITIZENS FOR TREATMENT OF HERBIE QUINONES-MOTION UNDER S O. 43
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I would like to move a motion, under the provisions of Standing Order 43, regarding an urgent matter.
In view of the successful operation in Toronto yesterday on the little boy, Herbie Quinones, who was unable to obtain medical services in his own country due to his parents lack of financial resources, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House recognize and applaud the citizens of Toronto for their generosity and, furthermore, that this House urge the United States to adopt our medicare system so that there will be no more little Herbie cases in the United States.


Mr. Speaker:: Order, please. This motion seems to be a little beyond our administrative jurisdiction.


ADMINISTRATION OF JUSTICE
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a motion of urgent and pressing necessity under the provisions of Standing Order 43.
In light of the reasons for judgment of the Quebec Court of Appeal in the case of Peter Treu, in light of the fact that the prosecution could only be launched under the Official Secrets Act by special order of the Attorney General of Canada and the granting of this order shows either gross carelessness or negligence in permitting the charge to be laid, in light of the fact that the charge was deliberately laid as an indictable offence, rather than a summary conviction, so the government could seek a heavier penalty, in light of the fact that the government has agreed to assist a former minister of the Crown with his legal costs in an action against him by a civil servant, and having in mind that Dr. Treu's ultimate acquittal followed after five years of harassment, I move:
That this House urges the government to give sympathetic consideration to the case of Dr. Treu to receive some reparation.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

February 27, 1979


PENITENTIARIES
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the conflicting forecasts that have been made by the Department of the Solicitor General regarding the future of the prison for women in Kingston, and in view of the build-up of tension and unease that such uncertainty is bound to create in any penal institution among members of the staff, as well as among those who are incarcerated, I move, seconded by the hon. member for Oxford (Mr. Halliday):
That this House instruct the Solicitor General to make a statement on motions at the first possible opportunity clarifying the position of the government in relation to the prison for women at Kingston.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[DOT] (MIO)


UNEMPLOYMENT INSURANCE
Mr. Gilles Caouette (Temiscamingue):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to introduce a motion dealing with an urgent question of pressing necessity.
Given the statutory 30-day limit for any unemployment insurance beneficiary to file an appeal, and considering that those limits are not respected by the Unemployment Insurance Commission, I move, seconded by the hon. member for Rober-val (Mr. Gauthier):
That the House enjoin the Minister of Employment and Immigration to compel the commission to expedite its decisions, finalize any application or settle any dispute in a period of time equal to that granted to beneficiaries.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HUMAN RIGHTS
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to Standing Order 43.
In view of the action taken yesterday by the Minister of Justice (Mr. Lalonde) and the Minister of Employment and Immigration (Mr. Cullen) in commencing legal proceedings against the federal Human Rights Commission seeking to prevent their investigation into the violation of the human rights of Elizabeth Lodge, Carmen Hyde, Elizabeth Cox, Elaine Peart, Rubena Whyte, Gloria Lawrence and Lola Anderson, I would move, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That this House instruct the Minister of Justice to abandon his attempt to muzzle the Canadian Human Rights Commission so that an appropriate investigation may continue.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL REVENUE
Mr. Gordon Towers (Red Deer):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of grave importance.
In view of the revelation of the hon. member for Central Nova (Mr. MacKay) that income tax returns placed in the custody of Statistics Canada by the National Revenue minister were not given adequate security, an abuse of trust of the general public that such information is treated as strictly confidential, and in view of the fact that the revenue minister must have a record of those whose files were released to Statistics Canada, a majority of whom appear to be farmers who, understandably, suspect they are being subjected to unwarranted attention, I move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
That the Minister of National Revenue personally communicate in writing to all persons who have been so betrayed, and give an explanation as to the purpose for which Statistics Canada requested their income tax files and the circumstances under which these forms were left unattended.


Mr. Speaker:: Such a motion can be introduced for debate at this time only with the unanimous consent of the House. Is there unanimous consent?
February 27, 1979


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC WORKS
Mr. Art Lee (Vancouver East):: Mr. Speaker, I have a motion of urgent and pressing necessity under Standing Order 43.
In view of the government's commitment to federal spending restraint and the desire for a higher degree of cost effectiveness in federal government projects, I move, seconded by the hon. member for St. Catharines (Mr. Parent):
That this House requests the Department of Public Works to undertake a periodic review of the efficacy of the $10,000 wall of secrecy built of lead which has been installed between the research offices of the NDP and Conservative parties, which was requested by those two parties to avoid mutual contamination.


Mr. Speaker:: Order, please.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Minister of Employment and Immigration.
The minister will know that the Canadian Human Rights Act was passed by this parliament and that it applies explicitly to all government departments and agencies. He will also know that he, or his officials on his instructions are now asking the Federal Court of Canada to declare that the Human Rights Commission has no jurisdiction over his department and over the dealings of his department with the millions of people who come to this country each year.
Will the minister tell the House on what grounds he can justify his position that the Human Rights Act applies to everybody else but not to his department?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, we asked for the declaratory order because we did not, in fact, think that this legislation applies. The fact is we would have a series of appeals that are provided for under the immigration legislation. Having gone through all those appeal procedures, we would have another follow-up at the taxpayers' expense, a whole new procedure instituted by the human rights legislation.
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Mr. Fairweather himself has some doubt. He is quoted as saying that if the department wins the case, he will ask parliament for legislation clearly saying the department is subject to his anti-discrimination powers. Therefore, we have asked for the declaratory order. Mr. Fairweather himself has some doubt on the basis of the quotes attributed to him.


Charles Joseph Clark: It is bad enough for the minister to try to cut the powers of the Human Rights Commission; it is worse for him to try to misrepresent the position taken by the commissioner. If he has the courage of his position, he will table the whole of the letter from the chairman of the Human Rights Commission and not quote selective extracts from it.
The question I am putting to the minister, who knows full well it was the clear intention of parliament to give the Human Rights Commission the power to stop his department as well as any other agency which abused human rights in this Country-


Some hon. Members:: Question.


Charles Joseph Clark: I ask him again, why is he seeking to have his department exempted from the human rights provisions which apply to all other agencies and activities in this country?


Jack Sydney George (Bud) Cullen: First of all, Mr. Speaker, I was not quoting from a letter; I was quoting from a press report.


Some hon. Members:: Oh!


Jack Sydney George (Bud) Cullen: Well, the opposition very often gives the impression that what is said in the press is correct. I am saying I was quoting from a report, a Canadian Press article by Juliet O'Neil who has gained a splendid reputation here, that the Human Rights Commissioner had said that should the department win the case, he would ask parliament for legislation clearly stating that the department is subject to his anti-discrimination powers. I simply indicated that Mr. Fairweather is prepared to concede that there might be some doubt. I was not criticizing him for it; I was simply quoting what was said.


Charles Joseph Clark: The minister refuses to deal with the question why he thinks his department has special status. Let me ask him a further question. Since he knows the Commissioner for Human Rights has said he intends to pursue his investigation into the situation involving this group of Jamaican women while the Federal Court is arriving at a determination of the question before it, would the minister tell us whether he will assure parliament that there will be full co-operation on the part of his officials with the Commissioner of Human Rights in his declared intention to pursue that examination; or will he and his officials continue to obstruct the work of the commission?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I do not blame the Human Rights Commissioner for taking this particular course-if you can't get them on first, get them on second. We are asking the court

February 27, 1979
Oral Questions
for a declaratory order as to whether we are bound by this particular piece of legislation.
Notwithstanding that application to the court, if Mr. Fair-weather proceeds-and it is hypothetical, I suppose-we shall have to take whatever action we deem to be appropriate at that time. We shall not back away from a declaratory order until we hear the judgment of the court.


Charles Joseph Clark: A supplementary question to the Minister of Justice who should be conscious, since the Human Rights Commission lies within his jurisdiction, that what is at stake here is a fundamental guarantee of human rights in this country.
What action does the Minister of Justice intend to take to ensure that the exercise of its proper responsibilities by the Human Rights Commission will not be frustrated by the action of his colleague, the Minister of Employment and Immigration?


Hon. Marc Lalonde (Minister of Justice):: What is at stake here is the interpretation of two laws passed by this parliament, the interpretation of which appears to be in some doubt. What has taken place is an appearance before the court to ask that the matter be clarified. That is where the matter stands at present. I am sure the Human Rights Commission will do what it considers best within its jurisdiction.


Mr. David MacDonald (Egmont):: Mr. Speaker, my supplementary question is to the Minister of Employment and Immigration. May I preface it by saying it is unfortunate he did not read the whole of the press release referred to, because in the last part the Human Rights Commissioner is reported as saying he was certain that the powers of the commission were intended to cover immigration as well as other fields. In addition, a year ago the Human Rights Commission indicated that it had jurisdiction in this very area.
I ask the Minister of Employment and Immigration why it is that since this was the very first case to come before the Human Rights Commission-almost a year ago to the day, on March 1, 1978-and that on March 9 the Human Rights Commission indicated publicly that it would investigate this case, for over a year the department frustrated the honest attempts of the Human Rights Commission to investigate these complaints and now, when it has lost on every count, the department is appealing, thus frustrating attempts to have justice not only done but seen to be done. I am sure this must concern the minister, even if only a little.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I am surprised that the hon. member should misinterpret what took place in this case. These particular individuals were subject to a deportation order. Notwithstanding that, they wanted to go to the courts for an interpretation. They took an appeal to the Federal Court. They lost that particular case. Notwithstanding that, they wanted to take the matter to the Federal Court of Appeal. They in fact took that action. We held off taking any

action with regard to issuing the deportation order until they had exhausted all their rights.
In addition to that, I met with both the National Action Committee on the Status of Women, which made some representations in this case, and with the individual women concerned, in the presence of their counsel and, I might say, in the presence of their children. I have undertaken to have another look at these particular cases and I am going to do so in a very sympathetic way. But I have to deal with the court proceedings which were initiated in the first instance, not by us but by the individuals represented, properly enough, by the Human Rights Commission. I think we have been very fair in this procedure.


David Samuel Horne MacDonald: Mr. Speaker, I will direct a supplementary question to the Minister of Justice who, I am sure, must be concerned about these matters. He has indicated that there is now apparently some doubt as to whether the Human Rights Commission has jurisdiction. Could he indicate where, in the act or in the regulations which were promulgated after the act, this doubt is created or what possible arguments he can make as Minister of Justice which would exclude the responsibilities of the Human Rights Commission for investigating one of the major departments which deals with millions of people, Canadians, immigrants and visitors who come into this country?
Can he indicate what possible shred of legal support there is for taking these simply unacceptable actions respecting the exclusion of human rights jurisdiction from a major government agency?


Marc Lalonde: Mr. Speaker, the hon. member is asking me for a legal opinion. He knows that is against the rules of this House. The matter is going before the court for an interpretation and the court will advise which interpretation is the right one in the circumstances.


THE CANADIAN ECONOMY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the President of the Board of Economic Development Ministers.
Statistics Canada figures released just a few hours ago show that gross national product increases in 1978 were at an alarmingly low level of only 3.4 per cent, well below what the Minister of Finance forecast. Statistics Canada points out that this has been largely due to the significant increase in the outflow of dividend payments to countries outside Canada, that profits were up by 24 per cent and that dividend payments going out increased to $2.2 billion. Statistics Canada states that price increases have been unusually large.
Would the minister not agree that in ordinary language this means that foreign-owned firms are overcharging Canadians
February 27, 1979

and taking excessive profits out of this country and into others?


Hon. Robert K. Andras (President of the Board of Economic Development Ministers):: Mr. Speaker, we will have a debate this afternoon on the whole subject of inflation. I have not seen the evidence of excessive profits to which the hon. member is referring, whether they be excessive profits in the hands of Canadian-owned corporations or foreign corporations.
I had some difficulty with the arithmetic at the beginning of the hon. member's question. He was talking about a 3.4 per cent growth in the gross national product and he said that that was attributable to the passage of dividends from Canada to foreign countries. I am really at a bit of a loss to understand what his reference was, but on the general subject I do not think the premise on which the hon. member based his question is actually accurate.


John Edward Broadbent: Mr. Speaker, I hope before the debate takes place at three o'clock the minister will have a chance to look at these truly alarming figures. They were released publicly just a few hours ago and they point out that profits were up about 24 per cent, year over year, for 1978. They point out that there was a $2.2 billion flow of dividend payments outside the country. These are facts and they are connected.
Almost 60 per cent of Canadian manufacturing is owned by companies with head offices outside Canada. I would like to ask the minister, given the serious economic consequences of this situation and the Prime Minister's own promise to do something about it back in 1974, when will the government be prepared to implement that promise as it pertains to resource ownership in this country?


Robert Knight Andras: Mr. Speaker, I know the hon. member has said on other occasions that his party would espouse a policy of controlling the flow of capital outside this country. This is one of his answers to the passage of dividends, or anything else I supppose, outside Canada. In my view, that would be the most destructive policy possible for a country that depends for 25 per cent of its gross national product on export and on trading, because it would totally isolate this country from trade back and forth between nations. I think it would be an outrageous and disastrous policy to espouse.
There are many developmental programs in trade now working in consultation with the private sector to increase our GNP, to increase our export competitiveness, and indeed this involves talking to multinational corporations to see that they honour the principles of corporate responsibility within this country, and I am encouraged by the response we are getting.


John Edward Broadbent: One way of turning the problem around is to get a much higher degree of Canadian ownership of Canadian industry. That would be pretty self-evident, even to the minister.
Oral Questions
Considering that, at least in the context of an election campaign, the Prime Minister recognized this in July in the minister's part of northern Ontario-in Sault Ste. Marie, to be precise-when he said that all future resource development projects in this country would be at least 50 per cent Canadian owned, and since then that promise has been systematically ignored, can the minister tell us if the government intends, before the next election, to start implementing the last election's promises?


Robert Knight Andras: Mr. Speaker, the hon. member always goes too far. He said it has been systematically ignored, as though nothing has been done. I would put before him the increasing success of Petro-Canada in that whole field.


Some hon. Members:: Hear, hear!


Robert Knight Andras: Once again, it is a matter of the method of implementation of policies toward these objectives, rather than the absolute question of whether the objectives are shared by us or others. We certainly want to see an increase of Canadian ownership. It is a question of whether we do it in a reasonable, sensible way by incentive rather than with a stick.


UNEMPLOYMENT INSURANCE
Gilles Caouette: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. About a dozen employees who were laid off last October by Brazeau Transport in Rouyn have had to wait two months for a decision by the Unemployment Insurance Commission finally to entertain an application concerning this problem, although such lay-offs may be considered as a collective conflict. These 12 employees submitted an application early in January and today, as February is about to come to an end, they are still waiting to Find out whether the appeal will be accepted to go to the board of referees. Could the minister indicate whether this is normal procedure and, if not, what he intends to to do to solve this four-month old problem?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I am grateful to the hon. member for his representations. This is certainly not normal procedures, and I shall have to look into these special circumstances before I can reply to the hon. member.


Gilles Caouette: Mr. Speaker, as this is normal procedure in our area and, for the benefit of the minister, as it is not the fault of local civil servants but because decisions are made in Montreal from where they are transmitted to the office in Rouyn or Val d'Or, I should like to ask the minister whether he would be willing to decentralize that
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February 27, 1979
Oral Questions
system of operation which delays decisions, seeing those twelve persons have just been advised that their files will be ready at the end of March or even perhaps in April. Would the minister be willing to decentralize those decision-taking powers and transfer them to the areas where the problems exist?


Jack Sydney George (Bud) Cullen: Mr. Speaker, we have already done so in all provinces; now, a civil servant, man or woman, is responsible for each province. We have also made each area responsible for itself. However, at the present time it is not possible to decentralize every riding or city in Quebec or in Canada. But I shall have to look into the situation. If there is a problem, we will find a solution to it.


Gilles Caouette: Mr. Speaker, the minister says that a few persons analyse such situations in each province: as the case I put to him today occurs in the hundreds in isolated areas, I do not ask him that the system be adopted in each community, but only that the decision-taking powers be given at the regional level. As the problem exists at the provincial level, in this case in Montreal, where decisions are delayed, is the minister willing to redistribute the powers of decision in the vicinity of Montreal, instead of keeping the current system that delays unduly the payment of benefits for over four months? If the minister wants other examples, I can give him hundreds of them which have been pending for two and a half years.


Jack Sydney George (Bud) Cullen: Mr. Speaker, it seems to me the hon. member is repeating his representations: I shall have to look into the matter.


THE CANADIAN ECONOMY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in the absence of the Prime Minister and the Minister of Finance, I should like to direct a question to the President of the Board of Economic Development Ministers, sometimes known as the BED board.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: My question centres on the gross national product figures just released. First, has the minister read these rather alarming figures? Second, in view of the fact the fourth quarter GNP now is seasonally adjusted at an annual rate of only 1.8 per cent, only 3.4 per cent for the entire year last year, would the minister indicate why the Minister of Finance predicted only last November that the real growth would be 4.5 per cent? Why was a commitment given in Bonn that we

would achieve 5 per cent real growth in the country, when the record has been so dismal?


Robert Knight Andras: Mr. Speaker, the Minister of Finance has dealt with this issue on many occasions. Certainly, the 3.4 per cent growth was less than we had hoped for. But I would point out to the hon. member that probably we are the only country among the senior industrial nations which has had a real growth trend in every quarter of every year since the OPEC crisis took place in 1973.


Some hon. Members:: Hear, hear!


Robert Knight Andras: The hon. member can point out the differences between forecasts, realizations and capacity, but also he should put before the Canadian public the true perspective by indicating that this country has had the best real growth performance along with Japan, of any of those nations over the last seven or eight years.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is directed to the same minister. I refer him to the United States President's economic report to Congress which certainly indicates that the real growth in Canada is much different, compared to that of the United States, from what the minister indicated.
My follow-up question centres on the fact that durable goods and personal expenditure on consumer goods generally, on a real basis, actually declined in the fourth quarter. Could the minister indicate why that occurred notwithstanding the fact the government embarked upon a $1 billion manufacturing sales tax reduction starting with the last budget? Why should sales actually drop off, as opposed to some type of a stimulant result from the expenditure made in that budget?


Robert Knight Andras: Mr. Speaker, regarding the reduction in the federal sales tax which has been explained many times in the House, the effect does not take place the day after in terms of its impact on consumer spending or, therefore, growth through that aspect of the economy. Existing inventories must be worked through, and those inventories are being worked through now.
My own view is quite optimistic for the year 1979, and I might say that optimism is shared by many hundreds of businessmen to whom I have talked in the last two or three months. They seem to have a much more bullish view and much more faith in Canada's economy than certain members opposite or certain theoretical economists. Certainly, I know where I will place my bets.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, again my question is directed to the same minister. Certainly, I know where the voters of Canada will place their bets in the next election.


Some hon. Members:: Hear, hear!
February 27, 1979


Sinclair McKnight Stevens: In view of the unsatisfactory real growth figures revealed this morning, and the fact the trade deficit actually widened in the fourth quarter, would the minister tell us what he anticipates for real growth in the current year?


Robert Knight Andras: Mr. Speaker, that is the prerogative of the Minister of Finance. I think he has set forth some targets. If the hon. member wants to speculate and place bets on the electoral results, I would like to have Jimmy the Greek give odds on the 60 seats the hon. Leader of the Opposition suggested he would get in the province of Quebec.


Some hon. Members:: Hear, hear!


ADMINISTRATION OF JUSTICE
Gerald William Baldwin: Mr. Speaker, I should like to direct a question to the Minister of Justice, having in mind the facts set out in the reasons for judgment given by the Quebec Court of Appeal.
In light of the fact the Minister of Supply and Services, quite honestly and openly, said in the House that he had some doubts as to the security procedure which must have been used in the case of Dr. Treu, that in this particular case prosecutions could be launched only under the direct order of the Attorney General, and that the prosecution launched was directed toward an indictable offence, is the minister prepared to review the facts in this case and give consideration to the provision of some form of compensation for Dr. Alexander Peter Treu?


Marc Lalonde: Mr. Speaker, I have reviewed all the facts in this case very carefully. Also, I read the judgment of the Court of Appeal very carefully. I would remind the hon. member that the principle of making ex gratia payments to persons accused of criminal offences who are acquitted, whether at the trial level or on appeal, is not a principle which is part of criminal justice in Canada.


Charles Joseph Clark: Ask Jean-Pierre Goyer.


Marc Lalonde: The matter of compensation in general is one which the Law Reform Commission is studying at the present time and upon which it will report. Also, I must remind the hon. member that the provinces will have to be involved very closely with this, because they would be the ones to bear most of the burden of such a situation if such a decision was reached, that compensation should be established as a practice. Thus, that is the general principle.
As far as this particular case is concerned, as I indicated to the hon. member, I have reviewed this case very carefully. I have come to the conclusion, without any doubt, that the charge made against Dr. Treu was not a frivolous one. He was charged with a very serious offence. There was a preliminary inquiry in which a prima facie case was found which allowed
Oral Questions
the case to be taken to trial. There was a trial before a judge at which Dr. Treu was convicted of the offence, and then it went to appeal where he was acquitted. As far as I am concerned, that man has been acquitted by the courts at the appeal level and he should be recognized as innocent; but I do not think in those circumstances there is any basis for compensation.


Gerald William Baldwin: Mr. Speaker, this charge followed only after a 1 '/2-year investigation which proved to be fruitless and cost the government several hundred thousand dollars. Last summer, when this case was at its height, there was an attempt by suggestion and innuendo to prevent members of the press and even myself from pursuing it. There were elements of the government at different levels which hinted that there was much more involved in this case and, "If Baldwin only knew, he would shut up."
Forgetting the question of justice, and on the question of equity from a government which once professed to believe in a just society, does the government not feel this man merits some recognition?


Some hon. Members:: Hear, hear!


Marc Lalonde: Mr. Speaker, I should like to remind the hon. member that according to press reports, one of the reasons-I do not know what the hon. member is referring to when he refers to innuendo-


An hon. Member:: Trudeau.


Marc Lalonde: -I read was that counsel for Mr. Treu is considering a civil lawsuit alleging, among other things, that an officer of the RCMP would have provided a Conservative member of parliament with information that would have brought before the public this issue that they wanted to keep out of the glare of publicity. I do not think the hon. member is well founded in his argument.


GOVERNMENT PLANS TO MAINTAIN SECURITY OF SUPPLY
Mr. Paul E. McRae (Fort William):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources.
Given the report yesterday from Associated Press that Iranian oil field workers are controlling the oilfields and demanding that the product be sent where they want, what plans has the government to replace our share of the 20 per cent of the world's oil supply that could be lost to the west and, specifically, what plans have we to replace oil by natural gas in the Atlantic provinces?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources and Minister of State for Science and Technology):: Mr. Speaker, I have answered questions in the House indicating that western crude is now replacing a good deal of the

February 27, 1979
Oral Questions
shortfall in Iranian fuel, and other reallocations of oil in the Atlantic provinces. I believe that particular option available to us has been an important option. I also believe that western Canada natural gas can play an increasingly important part in displacing foreign crude oil, particularly in the markets of Quebec and, to some extent, Ontario and even farther afield into the maritimes. I very much hope it will be possible to advance measures which will bring natural gas into these markets.


An hon. Member:: When?


Alastair William Gillespie: I believe the potential there may be up to 100,000 barrels a day of oil by displacement from natural gas in Canada's future.


EXTERNAL AFFAIRS
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and concerns Canada's role in the negotiations going on today at the United Nations to end the China-Vietnam conflict.
Is it the view of the government that a compromise resolution is possible and acceptable to the three veto powers and, if so, is Canada co-ordinating this approach to the negotiations with other countries, particularly our NATO allies?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, the question is to some extent hypothetical because, I suppose, the answer would depend in large measure upon the particular wording of the resolution. I can only tell the hon. member that the resolution presented before the Security Council is apparently not acceptable to at least the Soviet Union, which has already indicated that it intends to vote against it or to veto it, whichever is the most appropriate method.
As to co-ordination, we have been in consultation with various other parties. We are not now a member of the Security Council, but we have been in discussion with other parties at the UN. I think our position was made very clear in a quite excellent statement by Ambassador Barton which no doubt the hon. member has seen.


Douglas Roche: Mr. Speaker, the U.S.S.R. keeps warning or suggesting that Peking should withdraw "before it is too late". Given the Soviet military activity in the Southeast theatre today, has the Government of Canada expressed its concern to Moscow or suggested that Soviet rhetoric and activity ought to be reduced in order to give the rest of the world an opportunity to find a proper and acceptable solution to this conflict?


Donald Campbell Jamieson: Mr. Speaker, I indicated six or seven days ago that we had, in fact, made representations not by way of

note but by way of personal intervention, on my instruction, to our ambassadors to Moscow and Peking and also indirectly to the Cambodians and Vietnamese that we feel that the four parties-certainly three of them, anyway-the Russians, the Chinese and the Vietnamese, ought to withdraw from their various incursions and, in the case of the Soviet Union, which has not made incursions, that it ought to be temperate in its remarks.
We indicated that, indeed, the only solution possible in our view-a view I am sure is shared by all members-is in the form of talks and negotiations taking place, and that it would be advisable that all parties withdraw their forces from those various places in an effort to get these kind of talks under way.


PUBLIC SERVICE
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question for the President of the Treasury Board is based on government statistics that came out just today, showing another form of gross discrimination against women in the public service.
In view of the fact that, for example, in the professional and scientific category 23 per cent of the employees are women, the other 77 per cent being men, but with recent lay-offs under the restraint program 56 per cent of the lay-offs have been women with the other 44 per cent being men, what steps does the President of the Treasury Board propose to take, in view of the declared policy that the government is in favour of women's rights, in order to reverse this trend and to make sure at least that it does not continue to happen?


Hon. Judd Buchanan (President of the Treasury Board):: Mr. Speaker, the hon. member is correct in pointing this out. It is a fact that occurs. It is the positions which are declared surplus, not the individuals, and I think really we should be turning that on its head and focusing on the situation to see if we have been making any headway in these particular categories over the last few years.
1 was particularly encouraged to note that when you break them down into the senior, intermediate and junior levels for the scientific catefory, the administrative and foreign service, we have been making significant headway, particularly-and I think this is encouraging-at the junior levels. These younger women are coming into the public service and they will be gradually moving up into the more senior positions. I could quote figures here, Mr. Speaker, but in fact we are, and I can demonstrate quite clearly to the hon. member, making significant progress in this area.


Stanley Howard Knowles: Mr. Speaker, I am glad the minister has the same table I have in my possession. May I point out to him that in every one of the seven categories on this table, the percentage of lay-offs of women is
February 27, 1979

greater than that of their percentage of the work force. That being the case, surely there is a need for some correction.
Let me put my question to the minister this way. In view of the fact that his colleague, the Minister of Employment and Immigration, has a task force out trying to sell private industry on the idea of an affirmative action program for employment of women, will he not borrow some of the members of that task force and put them to work in the public service itself?


J. Judd Buchanan: Mr. Speaker, we have been making significant headway in this area. In the four years from 1974 to 1978, some 21,443 women entered the public service, as opposed to 16,800 men. There was an improvement, certainly, and as I indicated in reply to the hon. member a few days ago, we would like to see more rapid progress. We have moved up from a little over 31 per cent to about 35 per cent women in the public service. I think we are moving by trend and direction in the right way. We intend to continue in that direction.


Flora Isabel MacDonald: Mr. Speaker, my question is also for the President of the Treasury Board. I should like to point out to him that what we are speaking about is not what has taken place in the last four years, but present moves under the lay-off program which will reverse that whole trend. That is what women are concerned about.
I would like to ask the minister why, indeed, the government is now abandoning its supposed commitment to proportional representation in the public service, because that is what these figures indicate. If it is not abandoning that principle, will the minister produce the figures relating to the lay-offs which are now taking place? Will he table those figures which will show how many men and how many women are being laid off by the federal government in each of the categories, so we will know exactly whether the discrimination that the figures now before us show is indeed true?


J. Judd Buchanan: Mr. Speaker, I am not quite certain what my two colleagues opposite are advocating. I have told them we have been making significant headway in hiring more women in the public service over the last four years. I have given the figures. Naturally, if we have hired more, unfortunately there are more of them at the junior level.
Are the hon. members advocating that we lay off the more senior public servants and keep the latest hirees on staff? If that is their idea, it is a most peculiar personnel policy to recommend for the Public Service of Canada.


Flora Isabel MacDonald: Mr. Speaker, the figures show that in the professional and scientific category more women are being laid off than men in the current round of cutbacks. That is what we are protesting, Mr. Speaker. I want the minister to produce his figures which show, individual by individual, where cutbacks have taken place, so that the discrimination of the government in relation to all its policies about women are put on the table once and for all.
Oral Questions


J. Judd Buchanan: Mr. Speaker, I would reiterate for the hon. member that we have been making significant headway, particularly at junior levels, in bringing women into the scientific and professional categories and the administrative foreign service, but we are not doing so well in the technical area although progress is being made. These are the people who are the latest hirees and, naturally, if there is some restriction in the public service it is normal policy that the people most recently hired are the first laid off.


HUMAN RIGHTS
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I want to put a question to the Minister of Justice relating to questions that were asked a few moments ago about the Canadian Human Rights Commission and the opinion expressed by the commissioner.
Could the minister tell the House whether it is now the policy of the government to distinguish between the statutes and agencies to which the Canadian Human Rights Act applies? I have in mind Bill C-22, wherein clause 7.1 reads:
Nothing in this act shall be construed as limiting the application of the Canadian Human Rights Act.
The government has laid that out. The Canadian Human Rights Act, section 63.1, reads as follows:
This act is binding on Her Majesty in right of Canada-
It would seem that these sections are precisely the same, in effect, in law.
Is it now the position of the government that it will choose when the Canadian Human Rights Act will not apply; that it will apply when it is convenient but it will not apply when it is inconvenient to the government?


Marc Lalonde: Of course not, Mr. Speaker. The role of the government is to try to apply the law, but when there is a genuine doubt or apparent conflict between statutes the normal course is to ask for an interpretation by the courts. If the courts find that there is no contradiction, there would be no problem, but if there is a problem then the task would be to clarify the law; to come in the normal way before parliament to get the law clarified.
I think the best interpreters of the law are still the courts of this land. I am surprised that the hon. member would raise objections to going before the courts to get clarification of the law as soon as possible so that the intention of parliament can be made quite clear. If it needs to be clarified any further, then we can come back with further amendments to the law.


Walter David Baker: Mr. Speaker, I think the Minister of Justice is suffering from a conflict of interest between his position as Minister of Justice, on the one hand,

February 27, 1979
Oral Questions
and Attorney General of Canada on the other, which puts him above merely standing up for his colleague in the ministry.
I put this question to him now as Attorney General of Canada. Given the fact that the Canadian Human Rights Act says, "This act is binding on Her Majesty", and given the fact that the Canadian Human Rights Act also says that the purpose of the act is to extend the present laws of Canada to the purview of matters coming within the legislative authority of the Parliament of Canada-which certainly covers immigration-will the minister ask the House for consent to table those documents which he says the rules of the House make it impossible or improper for him to table? I can give an undertaking that we on this side of the House are prepared to give our consent.
Will the minister take advantage of this, in his capacity as Attorney General, and table the documents so that not only will the courts be apprised some day with respect to its position but this parliament, which passed a law believing it was of universal application, will have a chance to look at it as well? Will he do that?


Marc Lalonde: Mr. Speaker, I heard the hon. member's argument. The rules of this House strictly forbid my giving legal opinions before this House.


Walter David Baker: I asked for your consent.


Marc Lalonde: If I am advised there is a genuine argument or disagreement as to the interpretation of the law in this respect, the law should be clarified by the courts. That is the normal process to follow.


IMMIGRATION
Mr. Jake Epp (Provencher):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. I should like to point out to him that he would not be in the same difficulty if he had accepted the amendments to provide for representation of these people before the commission.
Has the minister received evidence within the last few days from the ethnic communities of Canada about cases where members of those communities, having established themselves as immigration consultants, have used their position and their association with ethnic communities to rip them off? Their credentials as immigration consultants are, at best, illusory and they have given out very wrong information that has hurt people who thought they had a case before the Immigration Appeal Board but in fact did not. Large sums of money have been given to these immigration consultants by people who are very vulnerable.


Jack Sydney George (Bud) Cullen: Mr. Speaker, it has not come to my personal attention ihat the ethnic communities have made that representation. It

should also be pointed out that there are many bona fide, excellent consultants in the immigration field who can get that information if they wish from departmental officials. Some people prefer to go to immigration consultants. Many of them have been in business for many years. They are not lawyers, but they are very competent. I think that using the broad brush of criticism for all of them does a disservice to many immigration consultants who do a first-class job on behalf of immigrants.
I am concerned about those who are "ripping off' and I should like to see what we can do about that. I do not want to do it to the detriment of the many people who are not lawyers but who are providing an excellent service to immigrants on the immigration laws.


Arthur Jacob (Jake) Epp: A supplementary question. I do not believe I said that I was painting all immigration consultants with that brush. However, the minister knows, and I know, that there are people posing in that way who are doing exactly what I pointed out.
I am asking the minister if he has examined the representations of immigration lawyers and the question whether immigration consultants should either be licensed or certified. It could be made known to persons who need this type of service that in fact these people have certain qualifications related to the advertising they are doing.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I have received representations from lawyers who provide legal advice on the act and who represent immigrants before the various tribunals that are available to refugees or immigrants. There may be some conflict in licensing, because lawyers, for example, are licensed within a province. It would be difficult to make the determination within provincial jurisdiction that someone is or is not entitled to practice law and, if they are entitled to practice law, that they can perform these other services.
In so far as consultants are concerned, not being lawyers I am not sure whether we would have that jurisdiction alone at the federal level, or whether we might have to work in concert with the provinces to try to weed out the bad and maintain the good. I am concerned with the problem, and it is a matter of finding the administrative mechanism to deal with it.


HUMAN RIGHTS
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, may I put a question to the Solicitor General which is along the lines of human rights in the country? I should like to point out to the minister that it is not only the ministry of immigration and the ministry of justice that claim immunity from the Human Rights Act, but his own department as well.
I should like to ask whether the minister is aware of a directive dealing with security clearance, called 11-3, which
February 27, 1979

denies basic human rights not only to immigrants and women but to one out of three Canadians not born in this country.
One paragraph in the directive refers to "close relatives living within the borders of such foreign nations as may cause him to be subject to pressures." Canadians who have such relatives in other countries would not be able to get a security clearance in this country either in the public service or in other sensitive positions in private industry.
Is the minister aware of this directive, and is he prepared to examine it and withdraw this most offensive document that exists within his department?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I am aware of the general principle that is reflected in the directive. I have already asked for a review of the directive and also a review of the document to which the hon. member refers.


Frank Oberle: Mr. Speaker, I ask the minister, through you, whether he is prepared to make a statement in the House with regard to this very serious matter, as it clearly establishes one-third of Canadians as second-class citizens, not being able to advance into a confidential position in the civil service; and, of course, every immigrant in this country falls into that category.


Mr. Blais:: Mr. Speaker, I am ready to take the representations of the hon. gentlemen very seriously indeed. As he well knows, the document to which he refers finds its origin back in 1965, or thereabouts.


PRIVILEGE
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I rise on a question of privilege. The Minister of Justice (Mr. Lalonde) in answering the distinguished member for Peace River (Mr. Baldwin) in reference to the Treu case, used the term as an excuse for non-payment of compensation that a prima facie case had been made out in the preliminary hearing. The Minister of Justice has said on another occasion today that he does not quote the law. I would like to give the Minister of Justice a chance to correct this statement because the Saskatchewan Court of Appeal said this in dealing with what is necessary in a preliminary hearing:
For committal for trial the Crown merely has to show that the accused is probably guilty and there is sufficient evidence ... in favour of the Crown.
It is a matter of sufficiency. That has been upheld by the Supreme Court of Canada in the following words:
The "justice", in accordance with this principle, is, in my opinion, required to commit an accused person for trial in any case in which there is admissible evidence which could, if it were believed, result in a conviction.
My point is that in a preliminary hearing a prima facie case does not have to be made out. It is a question of sufficiency of
Privilege-Mr. Abbott
evidence and if believed-if it could be believed by a judge and jury or a judge alone-then that person could be sent up for trial. The Minister of Justice left the impression that there was a prima facie case made out against Mr. Treu. That is an error in law and an error in fact.


Marc Lalonde: Mr. Speaker, you can see why it is not proper to give legal opinions in the House.


An hon. Member:: Table a document from a real lawyer.


POINT OF ORDER
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, having read through a document which was tabled in the House on Wednesday and having it come to my attention with some other information given by a minister in reply to a question, at the first opportunity I will supply you and the minister with a copy of a notice of privilege. This is my first opportunity to indicate that I will bring forward a question of privilege regarding Loto Canada and dealing with the Minister of State (Fitness and Amateur Sport) (Mrs. Campagnolo). I will supply proper notice of that tomorrow.


PRIVILEGE
Hon. A. C. Abbott (Minister of National Revenue):: Mr. Speaker, on a question of privilege arising from a motion pursuant to Standing Order 43 today made by the hon. member for Red Deer (Mr. Towers), and also one yesterday made in the same context by the hon. member for Okanagan Boundary (Mr. Whittaker), the inference by both these members has been that tax forms under the guardianship of Revenue Canada have somehow been revealed by a wide variety of people, and we should be informing certain farm groups of their concerns. I just want to reiterate that I take exception to the hon. member's being able to communicate to the public at large that Revenue Canada does not guard its income tax returns with great care.


An hon. Member:: That is not true.


Anthony Chisholm Abbott: At the same time I think it is important, Mr. Speaker, to take note of the fact that on February 23 the Globe and Mail reported in connection with the hon. member for Central Nova (Mr. MacKay) that he showed a Globe and Mail reporter copies of four 1977 tax returns that he had been given with social insurance numbers, taxable income, income

February 27, 1979
Privilege-Mr. Abbott
tax paid and spouses' names in full view. He then went on to say that he was in possession of some-


An hon. Member:: Order.


An hon. Member:: What is your privilege?


Mr. Speaker:: Order, please. The nature of the minister's intervention on procedural grounds is a little uncertain to me. I thought he began taking issue with some statement that was made during the question period. The hon. member for Central Nova (Mr. MacKay) did not participate in the question period today, and I do not know how his activities got into the point that the minister was on originally. I thought he was taking issue with some statement that was made during the question period and I think he has to confine himself to that.


Anthony Chisholm Abbott: Mr. Speaker, I am still on my point of order-


An hon. Member:: It was a question of privilege.


Anthony Chisholm Abbott: -my question of privilege to confirm that it is not this government or the Minister of National Revenue or the Department of National Revenue that stands in risk of revealing tax forms to the public. It is the hon. member for Central Nova possessed of stolen tax returns-


Mr. Alexander:: Stolen?


Anthony Chisholm Abbott: -and this "private dick" in residence in the Tory party has been revealing these forms to the public-


Mr. Speaker:: Order, please. The hon. member for Grenville-Carleton (Mr. Baker).


Walter David Baker: Mr. Speaker, aside from the doubtful validity of the minister's rising on a point of privilege and then in the middle of it saying that it was a point of order dealing with some motion made in the House under the provisions of Standing Order 43-to which somebody on the other side probably said no, or we would have heard about it, and maybe the minister himself said no-first of all I think that is a dubious point of privilege, to say the very least, and he ought to be cut off immediately in that respect.
The second matter that I want to raise, now that my friend has gone into the merits of it, is that no amount of rhetoric or debate or skirting around will absolve the government from the responsibility which the Deputy Prime Minister (Mr. Mac-Eachen) took for the government himself when he was at least straightforward and honest enough to say that it was the government's responsibility to maintain records, and the government had failed in that responsibility. That is the bottom line in all of this, Mr. Speaker, not the minister's nonsense.


Mr. Erik Nielsen (Yukon):: Mr. Speaker, I rise on the same point of privilege. We are entering here an entirely new area with respect to questions of privilege as they relate to motions made under Standing Order 43. If you, sir, are going to allow debating points to be smuggled into our proceedings by spurious points of privilege in answer to motions under Standing

Order 43, then this whole procedure is going to fall into a gross abuse of the rules of this House.


Mr. Speaker:: Order, please. The procedural grounds here are very clear. I have allowed two members on my left to contribute to the discussion. There is no decision to make. I stopped the minister when he wandered into some other area. But the intervention he has made is one that is attempted in this House very often. If it is the sense of the House that I should stop these interventions right at the start, I will be only too happy to do so because they invariably lead us into difficulty. However, I must say that we must all be aware that if I am to stop a particular hon. member before letting him go on for a couple of sentences, I will have to stop everyone. These interventions come from all sides of the House.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I am quite prepared to do that. In any event, I will reaffirm now that taking issue with a statement up to three o'clock, whether it be during the presentation of applications pursuant to Standing Order 43 or in the placing of questions or in answering them, taking issue with anything done up to that time by way of a question of privilege is a misuse of the question of privilege procedure. If it is the sense of the House that I cut that practice off much more sharply than I have, I will be only too happy to do so.


POINTS OF ORDER
Lincoln MacCauley Alexander: Mr. Speaker, having heard the minister responsible for Revenue Canada either imply or state that the hon. member for Central Nova (Mr. MacKay) and/or "private dick" stole documents, I just want to advise Your Honour that I am reserving the right of the hon. member for Central Nova to have an opportunity to look at the blues in order to pursue a question of privilege.


Mr. Speaker:: The record will have to be examined. My memory is that the minister in his intervention said that the hon. member for Central Nova was possessed of stolen documents. That was the language used; at least, that is my recollection. Like the hon. member for Hamilton West (Mr. Alexander), I will examine the record, as I am sure the minister will, to see whether he made an accusation of a member having committed an offence. If he did, that will have to be withdrawn. We will have to examine the record. The minister, of course, is on notice to that effect.
February 27, 1979


MR. TOWERS-RIGHT TO RAISE QUESTION OF PRIVILEGE RESERVED
Thomas Gordon Towers: Mr. Speaker, I wish to reserve the right to raise a question of privilege tomorrow after having looked at the blues, as the Minister of National Revenue (Mr. Abbott) used my name in his statement today.



ROUTINE PROCEEDINGS


Hon. Pierre De Bane (Minister of Supply and Services):: Mr. Speaker, as requested by the official opposition, I would like to table in both official languages, under Standing Order 41(2), the letter dated October 12, 1978, which my department received from Loto Canada.


JOURNAL OF PUBLIC COMMENT
[Stage Direction]
MEASURE TO ESTABLISH DAILY REGISTER Mr. Bob Kaplan (York Centre) moved for leave to introduce Bill C-463, to establish the Journal of Public Comment.
Some hon. Members:: Explain.


Mr. Kaplan:: Mr. Speaker, when members of parliament are misquoted or misinterpreted they have elaborate protections under our parliamentary procedures. No such protection exists for private citizens who may be misrepresented or misquoted in this House. My bill will establish a new journal in which citizens at their own expense can tell in writing their side of the story if they are directly referred to and feel that they have been misrepresented in parliamentary debate.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to Deputy Prime Minister and President of Privy Council):: Mr. Speaker, questions Nos. 220, 241, 651, 802, 881 and 882 will be answered today.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Jones: 1.	Is there a project underway at present to redevelop the old harbour of Montreal? Who has undertaken this project? How large an area is encompassed by this project?
Order Paper Questions
2.	What is the expected cost of this project? What department or departments, either provincial or federal, are responsible for the cost of this project? How much of the cost is the province responsible for and how much is the federal government responsible for? What monies have been spent to date on this project? Give a breakdown of each department's contribution to date.
3.	Has there been any public participation in the redevelopment of the old harbour of Montreal and if so, what form has it taken? What civic groups are involved in this project?
4.	What goals are to be achieved by redevelopment of the old harbour of Montreal? Have any of these been achieved to date and if so, what are they?


Hon. Andre Ouellet (Minister of Public Works and Minister of State for Urban Affairs):: 1. There is a project under way to redevelop the old port of Montreal. It is an initiative of the federal government and the general plan for the area is being prepared by the Ministry of State for Urban Affairs in conjunction with other federal departments and the other levels of government. The study area is 450 acres (180 ha).
2.	At this early stage of planning it is impossible to estimate what the cost will be. The MSUA research and demonstration group are responsible for the planning in co-operation with CMHC, Parks Canada, Public Works, NHB, and the provincial, MUC and city governments. The ultimate responsibility for carrying out specific projects within the over-all development plan will be determined as part of the planning process. The only monies spent to date have involved:
demolition of an unused grain elevator and dismantling the unused autostade by CMHC ($1.15 million), and
the opening of a project office and the beginning of planning by MSUA, $1.35 million.
acquisition of properties on St. Pierre Street to be renovated as housing by CMHC, $0.94 million.
3.	There is a public participation program in the planning of the area. It involves an association of interested individuals and groups with public meetings and workshops, as well as questionnaires and the solicitation of briefs and public suggestions. The civic groups who have so far chosen to become actively involved are: Association des locataires de Habitat 67, Association des proprietaires du vieux Montreal, Chambre de commerce du district de Montreal, Comite quebecois des sentiers de randonnee, Guilde de la marine marchande, Jeune Chambre de Montreal, Monde a bicyclette, Sauvons Montreal, STOP, Societe pour vaincre la pollution, Syndicat des initiatives du vieux Montreal.
4.	The planning objectives for the project as outlined by the federal cabinet are:
(a)	Conserve and promote the Canadian cultural heritage.
(b)	Improve urban living conditions and facilitate public access to the water's edge within the constraints created by the presence of the harbour.
(c)	Contribute to the efforts for an economic recovery.
(d)	Maintain certain harbour functions that are congruous with the urban and historic environment.
Although the project has only been under way for a few months, a major barrier between old Montreal and the river, namely grain elevator No. 2, has been removed opening a vista on the St. Lawrence. It is anticipated that by next summer,

February 27, 1979
Order Paper Questions
other actions will have taken place which will improve public access to the water and promote the cultural heritage.


Mr. Epp: 1.	How much is the advertising campaign entitled "Welcome to the Energy Efficient Buildings" costing the government?
2.	How widely is the campaign being publicized and for how long?
3.	How much will the entire programme of building analysis cost?
4.	Are the analysts government employees and, if not (a) who are they and what firms do they represent (b) how much are they being paid (c) on what basis were they hired?
5.	How much did the production of the primary picture of the Minister of Public Works in the campaign cost?
6.	How much did the hard hat cost which the Minister is wearing in the picture?


André Ouellet: 1. $ 132,000.
2.	The campaign was publicized in the National Capital area for three months.
3.	An accurate cost figure cannot be given. The estimated costs are based on doing a preliminary assessment on all buildings in the inventory. The estimates are based on $.55 square metre with a Crown-owned inventory of 5.3 million square metres, or approximately $3 million.
4.	(a) The analysis is being carried out by both public servants and private sector consultants (see list of consultants below).
(b)	The consultants are paid in a range from $5,000 to $20,000 depending on the size of the building.
(c)	The consultants are hired where no Public Works Canada staff are available to do the job. They are hired on the basis of their professional skill, knowledge of the area of operation, availability of staff and proven performance.
5.	$20.
6.	$2.83.
List of Private Sector Consultants
Wood, Banani and Assoc.
Ottawa
Chorley & Bisset,
London
Acres Consulting Services,
Burlington
Pageau, Morel & Lefebvre,
Ottawa
Brais, Frigon, Hanley & Assoc.,
Ottawa
Smith & Anderson,

Ottawa
Rybka, Smith & Ginsler Ltd.,
Toronto
McKee, Lockhart & Assoc.
Ottawa
Reid Crowthers & Partners Ltd., Ottawa
Giffels Assoc. Ltd.,
Toronto
Nicholas Rusz & Assoc.,
Toronto
Mechanical Consultants Western, Toronto
Clemann Large Patterson & Assoc., ECE Group, Toronto Synergy Systems Ltd.,
Toronto
Moffatt Engineering,
Toronto Quist & Assoc.,
Hamilton
Associated Eng. Consultants Ltd.,
Edmonton
Smith & Anderson,
Ottawa
M. M. Dillon Ltd.
London
J. D. Henderson Engr. Ltd.,
Edmonton
H. W. Klassen, Engr. Ltd.,
Calgary
J. J. McCartan Engr. Ltd.,
Saskatoon
Angus Butler Engr. Ltd.,
Saskatoon
Saskmont Engr. Ltd.,
Regina
Klien & Dashevsky Ltd.,
Winnipeg
Mechanical Western Consultants Ltd., Winnipeg
Scouten Mitchell Sigurdson Ltd., Winnipeg
Reid Crowther Ltd.,
Winnipeg
February 27, 1979

Keen Engineering Co.
Vancouver
D. W. Thompson Ltd.,
Vancouver McKenzie Snowball Skalbania & Assoc.,
Vancouver
Territorial Projects Ltd.,
Vancouver Park and Djwa,
Vancouver.


Mr. McKenzie: 1.	What was the date of occupancy promised to Host Car Rentals for concessions at (a) Winnipeg (b) Edmonton (c) Calgary (d) Vancouver (e) Halifax (0 Ottawa (g) Montreal (i) Dorval (ii) Mirabel (h) Toronto (i) Terminal 1 (ii) Terminal 2 Airport as a result of their successful tender acknowledged October 21, 1976 and, in each case, on what dates were the concession counters actually made available?
2.	Was Host allowed entry into the terminals on the dates specified by DOT and, if not, for what reason?
3.	What was Host's rank with respect to other successful bidders in October 1976?
4.	Was Host promised a choice of counter location in respect to their rank among the successful bidders and was Host in fact granted such space commensurate with their rank?
5.	What was the length of the contract agreed to by DOT with respect to Host's successful bid in October 1976?


Hon. Otto E. Lang (Minister of Transport):: 1 to 5. This question is presently the subject of litigation and as such, no comment can be made.


Mr. Howie: 1.	Since April 1, 1978, how much assistance has been made available to the Province of New Brunswick to assist with urban transit?
2.	Is the allocation of funds during this five year programme still based on the formula of $2.00 per capita according to the population of the Province as recorded in the official Census of 1976?
3.	To date, what community and privately operated bus systems have received assistance?


Otto Emil Lang: 1. Under the Urban Transportation Assistance Program, New Brunswick will receive $6,774,000 over the five-year period commencing on April 1, 1978. None of this money has yet been transferred.
2.	No. The allocation is based on $10 per capita over the five-year life of the program.
3.	No bus systems have yet received assistance from the Urban Transportation Assistance Program. It is expected that agreements will shortly be signed that will provide assistance to municipality owned urban bus systems in Fredericton, Moncton and Saint John. Under the Atlantic Provinces Trans-
Point of Order-Mr. Cossitt
portation Program $309,906 has been contributed for the acquisition of three intercity buses by SMT Eastern Ltd.


Mr. Howie: For the fiscal year ended March 31, 1978, what amount was spent by the Department of Energy, Mines and Resources on wind generated electric energy projects?


Mr. Pierre Bussieres (Parliamentary Secretary to Minister of Energy, Mines and Resources and Minister of State for Science and Technology):: The Department of Energy, Mines and Resources reports as follows: $16,000.


Mr. Howie: For the fiscal year ended March 31, 1978, what amount was spent by the Department of Energy, Mines and Resources on solar energy projects?


Pierre Bussières: The Department of Energy, Mines and Resources reports as follows: $358,000.



POINT OF ORDER


Thomas Charles Cossitt: Mr. Speaker, 1 rise on a point of order. I refer to question No. 19 which was placed on the order paper on October 11 in this session and is outstanding from previous order papers. It concerns the use, or perhaps I should say misuse, of the Unemployment Insurance Commission computer in Montreal, allegedly by public servants after hours.
When I first raised this matter in the House, the RCMP subsequently ordered an investigation. I was contacted by the RCMP and co-operated to the fullest extent with them. I have been assured that this investigation has long since finished, yet no answer has been given as to whether Key Data Canada got use of this computer and paid kickbacks to public servants, including the installation of a swimming pool in the back yard of one public servant in the city of Montreal.
As the question has been outstanding this long, and since the investigation of the incident has been completed by the RCMP and this question is still sitting on the desk of the minister or whoever is responsible, I feel it is time that we now have some indication of what is going on. They were passing around free swimming pools and, it is alleged, $20 bills in envelopes to public servants in order to draw them into this scheme. Fortunately many of them refused. It is time we knew exactly what happened in the city of Montreal at the time when Mr. Kingsley and Mr. Mainville were involved in directing the computer centre. Mr. Mainville was regional director at the time.

February 27, 1979
Unfair Price Increases
Can the parliamentary secretary tell us when this question is going to be answered? Do we have to wait another two years? Are they going to keep hiding crooks in the public service and not let the people of Canada know that their money is being embezzled?
[ Translation]


Yvon Pinard: Would the hon. member repeat the question to which he refers.


Thomas Charles Cossitt: Question No. 19, Mr. Speaker.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


John Edward Broadbent: That, given the government's failure to hold down rising prices, which have increased the cost-of-living burden for Canadian families, this House calls on the government to establish a fair prices commission, with powers to investigate and, where necessary, to roll back unfair price increases.


Mr. Speaker:: Hon. members will note that not later than 9.45 o'clock p.m. every question necessary to dispose of proceedings shall be put forthwith in accordance with Standing Order 58(9).


John Edward Broadbent: Mr. Speaker, the debate we are going to have this afternoon is one of the most important in the history of this parliament.


An hon. Member:: Oh, oh!


John Edward Broadbent: A Conservative member laughs. I hope he is as concerned about prices as most Canadians. I say it is one of the most important because the subject matter affects every Canadian. It affects pensioners, married couples, single people, trade unionists and non-trade unionists. The reality is that at this point in 1979 we are facing the clear prospect of a major new inflationary cycle.
The Prime Minister (Mr. Trudeau) has expressly said that he has not called an election because the Parliament of Canada has things to do. I cannot think of a subject matter that the people of this country would like parliament to deal with more than prices. If the Prime Minister is going to continue to hold off having an election on the ground that

parliament has things to do, I would like to see soon on the order paper a measure from the government, even just one, indicating that it wants to come to grips with this very serious matter.
In 1978 prices went up by some 9 per cent. The most recent figures show that that 9 per cent figure is continuing in 1979 and is in fact likely to worsen. That is on the price side. If you look at wages and salaries, the pay of Canadians, what do you find? Figures released on the weekend by Statistics Canada show that the average weekly earnings of Canadians increased from $252 a week to $269, an increase of only 6.4 per cent.
If you subtract the increase in the cost of living for 1978 from the increase in earnings, what do you find? I am sure even members of the cabinet can understand this reality. In 1978, the average Canadian worker had a net loss in his income of $340. His standard of living did not increase at all in
1978.	With price increases exceeding salary increases, the ordinary family is falling behind in an economic sense.
I am not so much concerned with 1978 as I am with what is going on right now in terms of what is in store for the rest of
1979.	Looking at the trends for the last quarter of 1978, the alarming conclusion one has to reach is that the net loss of income which became apparent in 1978 will be even worse for Canadian workers in 1979 unless something is done. The reality is that real incomes are falling behind.
Wage settlements continue to fall behind the increase in the cost of living. I learned of one settlement over the weekend affecting 18,000 hospital workers in Ontario. Hospital workers in every province are among the most poorly paid Canadians. Their settlement amounted to 4 per cent, or even slightly less. It does not take an economic genius to realise what is happening; even without briefing notes the Minister of Consumer and Corporate Affairs (Mr. Allmand) could calculate that an increase of 4 per cent set against an increase in the cost of living conservatively estimated at 9 per cent for this year means a significant loss of income for those hospital workers. The fact is that thousands of workers who have been subjected to a wage control program for the past three years are now accepting similar settlements. It is time a measure of economic justice went in the direction of the workers. That is what this debate is all about.
The AIB report which came out over the weekend showed that food prices went up by some 21 per cent in the past year. Again, I should like the cabinet minister who will be replying in this debate on behalf of the government to consider the impact of this increase on a typical family. It is not so serious in its impact on members of parliament because compared with most Canadians we are well paid. It is not so serious in its impact on a civil servant who has just got a $5,000 increase in pay. But it is very serious for pensioners and low income earners who spend a much larger proportion of their incomes on food than do the rest of us. The price of hamburger meat, I heard not long ago, had reached $2 a pound and I am told it is now in excess of $2. A head of cauliflower in Ottawa costs
February 27, 1979

$1.98. Last week, in the same store, the price was $1.49. Vegetable prices have risen so high that a Liberal senator, a member of that other august body which joins us from time to time in assessing legislation, thought we should remove vegetables from the consumer price index. That is the Liberal way of dealing with the high price of food-remove it from the statistical accounting system. I am sure the hon. senator does not speak for the government in that regard but I should like to hear what members of the cabinet intend to do about the high cost of vegetables as well as of other food.
Today a loaf of bread costs 69 cents or 70 cents. Every food item is costing more day after day, as housewives know-they do not need politicians to tell them. Lumber prices are going up as well as steel prices which affect so many consumer needs. Car prices are going up. Prices in every sector of the economy are increasing, not declining. I asked my research staff to try to find evidence of some falling off in prices somewhere because it seemed to me that if we were getting increased efficiency as a basis for increases in profits some falling off in prices could be expected. But I am told there are no such reductions in prices. In the old days firms cut the prices of some of their products in order to win a larger share of the market; but nowadays prices are not reduced, they are set and then they are kept up.
So we are confronted by this reality. On one hand, wages and salaries have been controlled by the AIB for three years; controls have now been removed and there is every indication that the demands being made by workers are reasonable. On the other hand, prices and profits are going out of sight and it is obvious that something has to be done.
Something has to be done in terms of fairness for its own sake. What I want to emphasize today, however, is this. If we are to head off a new round of inflation in 1979, we must take action today for the Canadian worker on the price side of the ledger. If we expect men and women who will be coming to the bargaining table in 1979 to do what they normally do, which is to make reasonable wage demands, then we have to confront them with a reasonable price situation. As sure as we are sitting in this chamber today, Mr. Speaker, if the price escalation continues at its present rate, continues to rise in 1979 as it did in 1978, Canadian men and women who are bargaining for wages to ensure that their families have a reasonable existence will demand increases later this year which are at least equivalent to the increase in the cost of living. So the more the cost of living goes up, the more we can expect wage and salary demands to go up. And that is just, Mr. Speaker.
If you look at the period from 1945 to the present time you will find almost without exception, not only in this country but in the United States as well, wage and salary demands have invariably followed price increases, not the other way around. I read a report in the New York Times on Sunday which made the same case as I am making here.
The inflation we are now experiencing certainly has nothing to do with wage and salary demands. It has everything to do
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with demands on the economy by the other side of the ledger. So what can we do? What has been the response of the government? The government, led by the Prime Minister, who says he does not want an election because parliament should be doing something, has not done a thing about increasing prices. In general, it has made three responses to questions my colleagues and I have been putting since Christmas in the House about price increases. On the one hand, when the government could get away with it, it has said that price increases are not real, that they do not exist and that we are making things up. That has happened from time to time. The Minister of Consumer and Corporate Affairs typifies that by his mobilized inaction. The typical response has been to say that the situation will be studied but that there is nothing the government can do. That has been the twofold response of the Minister of Consumer and Corporate Affairs. The response has been to set up another study and to say in advance that there is nothing the government can do-and I am waiting to hear a report on at least one of these studies-even if the study concludes that there is price gouging.
There has not been one rollback ordered by this government, which is crucial if we are addressing our concern to the typical worker in Canada. Not one price has come down as a result of action by this government. Quite the contrary, by lifting subsidies recently on bread and milk and by allowing oil companies to get what they could in the market, this government has been directly responsible for many of the price increases which have taken place. I say on behalf of my colleagues that something can be done, and something must be done.
Before I indicate what must be done, I want to mention half a dozen examples because I think one example is worth a thousand generalizations. The people who are out there in the country certainly deal with concrete examples. They do not deal with annual figures put out by Statistics Canada, and I hope when the minister speaks on behalf of the government today he will deal with these cases because they point very clearly in one direction. This has caused me to conclude that we have to propose to this government a specific method for dealing with prices because the government has not been able to come up with one on its own.
First I want to deal with the general question of food prices. We know the government's response in this regard. Its response is that the low level of the Canadian dollar has meant that food prices are inescapably higher. Let me concede right off the bat that that is true in many cases. If we import orange juice or vegetables from Florida or California and our dollar is low, prices will be higher. Anyone who is honest must acknowledge that reality.
However, there is another reality about which the government does not like to talk, and I want to draw attention to it. The report issued by the AIB last week indicated that food store profits jumped 37.9 per cent in the third quarter of last year over the third quarter of 1977. In the same period-and this is the issue which concerns me-sales increased by only 17.4 per cent. In terms of elementary arithmetic, profits

February 27, 1979
Unfair Price Increases
increased at twice the rate of sales. We want to know the reason for that. It may be that there has been some remarkable new efficiency introduced by the food chains. It may be that there have been some devices or managerial actions which have led to profit increases twice that of sales. Perhaps some creative genius has been at work at the middle man level in the food sector.
If that is the case, I think Canadian consumers would like to know about it. All I am saying is that on the basis of past performance and trends there is good reason for us to conclude that food prices are too high because profits in large measure are too high in this sector, and that consumers are being charged much more than they ought to be charged. We say we would like that to be investigated. We would like to have some answers. I want to stress that we are not assuming that conclusion, but at least we have the honesty to look at the evidence and not just to ignore it.
Another example is flour. A five pound bag of Five Roses flour increased in price by some 44 cents from the first week in December to the middle of this month. A five pound bag is a relatively small amount, and it is very interesting that its price should increase 44 cents in a two-month period. The federal subsidy which had been on until the middle of December, when it was removed, was only 22 cents per five pound bag of flour, and the consumer was charged twice the amount he should have been charged if the removal of the subsidy were simply passed directly on. We say that that bears investigation. Why is the removal of the subsidy being compounded in its impact on the consumer?
Bread prices are seriously affected by the removal of that subsidy. We felt that subsidy should have been left on, and we urged that because bread is a basic food for Canadians. However, the government removed the subsidy. That ought to have increased the price of a loaf of bread three cents to four cents. Instead, the price went up between eight cents and ten cents. Now a family spends 69 cents or 70 cents when it buys a loaf of bread.
Then there is chicken. In view of the performance of the Minister of Consumer and Corporate Affairs yesterday one is tempted to say that the chickens have come home to roost in terms of the government's lack of policy on consumer items. What is the reality regarding chicken prices? The AIB reported recently that poultry prices increased by some 33.5 per cent during the past year. However, the farmer got only 12.5 per cent of that. I think a legitimate question again arises: Where did the rest go? We are paying all that money for chickens; where did the rest go? The farmer does not have it.
The Minister of Consumer and Corporate Affairs does not like what he calls obscure questions. I find it difficult to understand why he regards questions about chicken prices and flour prices as obscure. However, that is his problem, not mine. The minister said in the House yesterday that the price of chicken went up because there was an increase in demand. Anyone who looks at the real world of economics knows that increase in demand is related to the question of supply and price. At one point in yesterday's question period the Minister

of Consumer and Corporate Affairs said to me that if I really understood reality I would know that when demand is increased prices go up.
Some 20 minutes later the Minister of Agriculture (Mr. Whelan) let the truth be known when he revealed that during the past year the amount of frozen chicken increased. We have some four million more pounds of poultry frozen in storage- taken off the market-in 1979 than we had in 1978. That is the reason for the increase in price. Farmers have done their job, as they have traditionally done in Canada. One of the most efficient agricultural sectors of any country in the world exists in this country. Farmers have produced the chickens, but somehow the middle men have managed to take them off the market. They have kept four million pounds more in frozen storage instead of putting them on the market so that the Canadian consumer could pay a reasonable price. That is the real reason chicken prices have increased in response to demand.
With regard to lumber prices, there has been a 70 per cent increase in lumber prices over the past two years, with a further 10 per cent increase last month. This has added about $1,200, in terms of its economic impact on the economy, to the construction cost of a single family home with 1,800 square feet of floor space. One board foot of two-by-four spruce now retails at 23 cents, compared to 17 cents last year. Plywood prices are up to $14.25 from $11 for a four-by-eight foot sheet of half inch spruce sheeting. The big six of the pulp and paper industry, the companies which have benefited so recently from another multi-million dollar handout from this government, have recorded a 123 per cent increase in profits, from $182 million in 1977 to $407 million in 1978. I suggest that perhaps there is some exaggeration in the profit there, that perhaps there is some slight overcharging to the consumer. I suggest that if the government is interested in heading off potentially inflationary demands coming on the wage and salary side in 1979, lumber prices, among others, are areas in which the government should be zeroing in and, more than that, areas in which they should be turning around those price increases.
What about the poor banks? The major banks in Canada, that handful of financial entities protected by government legislation from outside competition, that small group of Canadian banks, had almost a $1 billion net profit last year. They in turn are increasing charges now for everyone-farmers, small businessmen, everyone who has an account-for the services they get. At the same time their profits are going right out of sight.
Finally, I will turn to the farmer. What about his input costs? Right now, a 100 horsepower tractor sells for some $28,000, up 16 per cent over last year. A combine, which is rather essential for our farmers in western Canada in particular but by no means exclusively there, went up in price in the past year from $32,000 to over $41,000, up some 30 per cent in one year. I stress again that this has come about precisely at a time when wage and salary increases were going up slightly
February 27, 1979

in excess of 6 per cent. In this case it is not the worker who is getting more than his share; it is someone else who has come between the industrial worker and the farmer. It is someone else who is getting that 30 per cent rip-off.
Therefore, it seems to me that farm input costs have to be considered rather seriously, and I say that particularly in the context of 1979 when the federal Department of Agriculture forecast that net farm income in 1979 will go down compared to 1978, not up.
Very clearly, something has to be done. I have given a number of examples. I could without any difficulty have given a dozen more examples which would require any fair-minded person or any fair-minded government to take action.
What are we recommending? We are saying that the pressures on the economy at this time very clearly are not on the wage and salary side; very clearly they are on the price side from sources other than wages and salaries. Very clearly they are up and going higher. Both in terms of present justice to the consumer and in terms of having a favourable impact on wage and salary settlements in 1979 further down the road, something must be done now about prices.
Therefore, we are proposing-so that the Minister of Consumer and Corporate Affairs will not have to rise day after day to say that the government has no authority to do this- the establishment of a fair prices commission. We say that the commission should have the following powers. First, on a selective basis, it should investigate prima facie unfair prices for food, essential household services, basic industrial commodities and farm input costs.
Second, it should have the power to delay price increases while these investigations are under way.
Third, it should have the power to obtain full information from corporations in sectors in which it is investigating a particular price increase.
Fourth, it should have the power to order rollbacks when unfair prices are discovered.
In our view, this commission should consist simply of five or six members, with a staff seconded to it by other departments that are relevant to financial concerns. There is no need to create an elaborate bureaucracy.
The way we see this commission functioning is exactly analogous, in terms of federal government authority, to the kind of influence exercised in the U.S. economy in the past by presidents Kennedy and Johnson. In the past, both those U.S. presidents singled out the steel sector which, during their respective presidencies, was proposing unjustified price increases. They had the presidential authority and the moral authority that the leader in any country should have but that we have lacked in this country. Those two presidents took on the steel industry and said that their price increases were unjustified and should be stopped. This had a significant impact on prices throughout the economy because other firms were made aware of the fact that the government meant business.
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This is precisely the purpose of this commission. We see it functioning on a selective basis and zeroing in on particular targets, taking particular examples and, when it finds unfair price increases ordering rollbacks. With that kind of action we do not think it at all necessary to have across the board controls. Not only are they cumbersome and unworkable, as we have seen they are unnecessary. That is the point I am making. A selective approach at this time could have major effect because, when it rolls back a few prices, all those in the economy who had the temptation in the same year to levy unwarranted prices will not do so. That is what we think should be the effect. We think that action is overdue. We think this fair prices commission, which by no means would guarantee perfectly just prices to Canadians, would at least provide them with something they have lacked for a long time, and that is fair prices.


Robert Knight Andras: Mr. Speaker, I welcome this debate today on the subject of inflation, a matter of deserved concern to all of us, and certainly a matter of overriding concern to the government. Our policies have been directed for quite some time toward trying to alleviate and bring inflation under control while avoiding other kinds of adjustments across the economy. It is always a finely balanced and difficult action to take.
I will not pretend today that we have succeeded totally in meeting our goal of reducing the rate of inflation, but I think there is good evidence, if people want to examine objectively the record, that we are on the road to a better price performance and that we are doing better in that area than most other industrialized nations. There have been some setbacks on the road, there is no question about it. They come mainly as the result of elements beyond our domestic control. But even here we are trying to meet and overcome them. We have a long haul ahead, as does every country that we can examine, but I think I want to stress the need in this country, and I think the justification, for having confidence.
1 believe there is a mounting sense of optimism that I detect in our economy, perhaps not among members on the benches opposite or among some of the theoretical economists. Let us look for a few minutes at what has been happening on the inflation front. It was approximately five years ago that Canada was hit, as other countries were hit, by the shock of double-digit inflation with price increases in 1974 and 1975 touching close to the 11 per cent mark. That situation forced introduction of the anti-inflation program in the fall of 1975 and the imposition of anti-inflation controls which helped to bring down prices and to bring about a gradual turnaround in the price situation. But I think we all realize that a control program of that nature is a psychological weapon in the main and is consistent only with the market economy if it is in place for a limited period of time. Thus, the process of decontrol was put in motion approximately a year ago, in April of last year.

February 27, 1979
Unfair Price Increases
During that same month in his spring budget, the Minister of Finance (Mr. Chretien) said that the increase in the consumer price index during 1978, in his opinion, would be approximately 7 per cent. It turned out to be 9 per cent, in the main because of unexpectedly high food prices and a further devaluation of the dollar, the other side of that coin, which pushed up the cost of all goods which we import.
Given no surprises, this year we expect the CPI to rise between 7 per cent and 7.5 per cent, but again food and imports will be the main contributors to that price increase. I am not saying for a moment the size of that increase is acceptable to us, but it will be significantly below the rates experienced in the past few years.
The motion before the House in the name of the hon. leader of the New Democratic Party purports to be a solution to the increased burden which inflation places on Canadian families. It would create a new agency which would apparently oversee pricing practices in this country, but in our view it does not address the basic problem. Indeed it would be irrelevant to many of the most important sources of current price increases. In addition it deals only with prices and ignores the basic cost elements, which are the essential foundations of the price structure, as though they do not exist. Time and time again it has been proven in this country and elsewhere that prices cannot be controlled in isolation from costs, wages, profits and dividends.
I imagine the hon. leader of the New Democratic Party would expect the agency to go to work first in the areas where prices are rising fastest, some of which he pointed out today. After all, when one is hunting elephants it is wise to go into elephant country. I suspect the hon. member would want that agency to look at food prices first, particularly beef, which are the main concerns of Canadian shoppers today. Although the leader of the New Democratic Party carefully avoided this, I wonder if he is prepared also to confront the cattleman and tell him that his prices are too high.


John Edward Broadbent: The answer is no.


Robert Knight Andras: After suffering through several years of depressed prices and rising costs, I can imagine the response the hon. member would get from the cattle farmer. Thus, the hon. member wants to cut in at some other level. He has been critical of the food processing industry over the last several weeks, but conveniently ignored the extensive investigation of the food processing and food retailing industry which was carried out just a few months ago by the Anti-Inflation Board and updated last week on the basis of third quarter data. The study concluded that profit margins in the industry varied very little from historic norms during the first nine months of 1978.
The AIB found that the profit margin was increasing, but it found that the profit margin was 3.3 per cent in food processing which was identical to the same period in 1977. In the food wholesaling area, profit margins moved up slightly from 1.21 per cent to 1.30 per cent in the periods under comparison. For

food retailers, the profit margin was 1.88 per cent in the 1978 period and 1.80 per cent in 1977. Profit margins in the beverage industry declined between 1971 and 1978.
Perhaps the New Democratic Party through this agency would be prepared to tackle the number two villain on the price scene-imports. Approximately 30 per cent of the goods consumed by the Canadians come from outside the country. Foreign producers are facing price increases of their own, and the devaluation of the Canadian dollar against foreign currencies means that it costs us more to import foreign products.


John Edward Broadbent: Right.


Robert Knight Andras: I do not know whether the NDP is suggesting that this agency would roll back the prices paid to California lettuce producers or Florida orange growers.


John Edward Broadbent: Did the minister listen to my speech? I said no.


Robert Knight Andras: The hon. member has one precise point at which he cuts in, and the entire sequence of the food chain, food pricing and its mechanics seem to be a mystery to him. In any event, the hon. member thinks this is a magic wand he can wave and our exchange rate problems will disappear and all those factors will be settled.
I should like to remind members of the House that in the spring of 1974 the government presented a bill to parliament. It was an amendment to the Combines Investigation Act which would have enabled the government temporarily to freeze prices on goods where there was evidence of profiteering and to roll back prices in those circumstances. When the then minister of consumer and corporate affairs introduced the bill he said that it was designed to "stop business from taking advantage of current economic conditions to unduly enhance profits." The bill was opposed by the same opposition critics who sit across the floor today. It died on the order paper when parliament was dissolved for the general election of 1974. Following the election, the government re-examined the whole question of prices, particularly food prices, and decided that the bill introduced previously was no longer effective in the changing economic situation.


Some hon. Members:: Oh, oh!


Robert Knight Andras: From that study we developed the concept of the anti-inflation program which was put in place in the fall of 1975. That policy on prices included guidelines which limited price increases to the recovery of added costs. Profits were restricted to margins no higher than 95 per cent of a firm's pre-tax net profit margin in the average of the previous five years. That policy worked well during the period of the anti-inflation program.
At the end of the controls it was decided at a conference of first ministers to ask the Economic Council of Canada to continue an analysis of price and cost developments. That request led to the establishment of the Centre for the Study of Inflation and Productivity. That agency was assigned the task
February 27, 1979

of monitoring prices and incomes to inform the public of developments which appear to threaten our ability to reduce inflation. As well it was instructed to investigate structural problems which may add to costs or prices and leave the economy more vulnerable to inflationary shocks. Just recently the executive of CSIP wrote to the major corporations for additional information on costs and prices to expand its work of analysis.
That is the extent of its mandate, but I should like to point out that the original proposal put forward by the federal government to the premiers of the provinces at the time of the federal-provincial conference in February, 1978, was a stronger agency with greater powers, not roll-back powers but greater investigative and mandatory powers to demand information and so on. Frankly, it was the provincial premiers who resisted that and asked us not to go ahead. The premier of New Brunswick said that he would support a lesser powered agency. He suggested in reviewing the changes which have been made in it that we should stop calling it a monitoring agency because it implies a certain amount of compulsion. He said he would like to see this set up and have it operate on a voluntary basis. That is the view of New Brunswick.
Mr. Davis of Ontario had great reservations about having this-


An hon. Member:: Leave it to the provinces again.


Robert Knight Andras: Mr. Speaker, there is going to be a very interesting bit of information in a minute. Mr. Davis said that what he is looking for is to get out of involvement as government and, as much as we can, allow the business community and the collective bargaining process to function in its normal fashion. He said there should be a very clear understanding that this is a transitory sort of thing and that we are not just moving from one phase of controls to another for an unstated period of time.
I have a more definite, more positive and more precise description of concern expressed by one premier, Premier Blakeney of Saskatchewan. He clearly said that he wanted to make a very precise comment. He said that in its present form, the stronger form that was presented by the federal government to that conference, they oppose the monitoring agency, and they have no doubts about that at all. He suggested that we are in a world of psychology, and it seemed to him that if we are to foster an economic recovery we need the psychological benefit of a definite end to control, a clean break and not any haphazard return to a food prices review board. He went on to say that he really thought what we needed, in his judgment, was a clean break so that everybody will know that the control program is over and that we are all back into the business of setting prices and incomes by the market forces.
The premier of Saskatchewan went on to indicate his clear opinion that it seemed to him we have to face up to the fact that we will have to establish prices and incomes by market forces sooner or later, and it may as well be sooner. He did not
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think putting off the inevitable would do anything except prolong the confusion.
There is dissension. The provinces do not want us to proceed with a stronger agency than the present Centre for the Study of Inflation and Productivity. I want to indicate that the Minister of Finance, along with the cabinet, is seriously looking at the centre, and there is serious consideration as to whether there are additional monitoring powers that may or may not be necessary clearly to establish before the Canadian people whether there is profiteering. Whatever is decided on, it will fall definitely short of rollback. We do not intend to go that route. There are many reasons why we feel that would be the wrong thing to do. In the end the real key to controlling inflation is a strong and a growing economy functioning under responsible monetary and fiscal policies. That has to be the basis for full recovery and expansion in the private sector.
We took the decision a few years ago, along with the provinces, to begin to control our spending, holding it below the rate of growth in the GNP, and this is being accomplished. Monetary policy is reflecting our concern about inflation. There are a great number of other strong influences at work stimulating private sector activity. Our improvement in the international competitive situation is capable of documentation. Our domestic costs have come down at a time when the external value of the Canadian dollar has declined. We have seen a dramatic gain in jobs, more than 440,000 in the past 12 months, and we have seen a record $3.5 billion surplus in merchandise trade for 1978. Manufacturing has been recovering strongly over the past year with output up by 9 per cent and employment up by 7 per cent. We are confident that real growth this year will be about 3.5 per cent, and investment intentions which are already known suggest there will be growth in real investment of 4 per cent to 5 per cent for the economy as a whole.
The word "profit" was mentioned. I think it is a very important aspect of the recovery that this country has seen in economic terms that profits are improving. People can play games with percentage increases. One dollar profit this year on a million dollar investment is not very much. You can double that to $2 profit next year and you have a 100 per cent increase. You really have to dig a lot deeper than the leader of the NDP is digging to indicate a true pattern there.
Quite frankly, profit is not a dirty word to me. It is the main source of the capital investment that we need to produce jobs, protect jobs and create the growth this country really needs. It is something that should be welcomed by every sector of the economy, by labour as well as business, because without profits the money available for labour for decent wages and for the protection of jobs is simply not there.
We think the pieces are in place for sound expansion of the economy. We are admittedly concerned about the surge in imported food prices which is squeezing the real income of workers. We do not deny that, or that this is making the transition to lower inflation that much more difficult. But it is a serious question as to whether we can protect the people of this country from all aspects of imported inflation. Most

February 27, 1979
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certainly any over-zealous attempt to interfere with the workings of the marketplace, where there is no evidence of a scapegoat, as there is not in respect of food prices, could be a response in the wrong direction. We could respond the wrong way and turn back the progress which has been so painfully established over the past few years.
Finally, there are real and technical difficulties with regard to the hon. member's proposal for a rollback. I think he is well aware of the constitutional position and that the federal government would have no such powers, except perhaps in a few areas of federal jurisdiction, such as the banks which he suggested. In the rest, a rollback power legislated by us would have to take place only on the basis of an emergency, as the anti-inflation program itself. It is very, very doubtful whether that could be proven is a case of law, and it is very doubtful in my mind whether that degree of urgency does in fact exist.
I have indicated the reaction of provincial governments. I have indicated the reaction of the government of Saskatchewan, which was most forceful of all, surprisingly, in saying it is time to let the market forces work. We are not about to embark on an agency with rollback provisions. We are not going into controls. We are coming out of those controls and it is somewhat painful. We are looking to the responsibility of the main actors in the marketplace to realize that we cannot, all or any of us, take more out of this economy than we are prepared to put into it.
I sense a great deal of responsibility on the part of labour groups. I agree with the leader of the NDP and his comments in that regard because I have been talking to labour and I see a much greater degree of rapport between business and labour. I am just back from British Columbia where there was a very encouraging recognition of much better dialogue between the main forces in the economy there. I hope that spreads. I hope these profits which the leader of the NDP is so ashamed of do get ploughed back into plant expansion and into competitive modernization so they can stay competitive in international markets particularly and protect and expand job creation. To knock them and to denigrate profits, and to start opting for artificial interventions in the marketplace when the facts do not yet warrant it, is the fastest way to turn off this return to profits and job creation that we see taking place.
I repeat that we are looking very carefully at the activities of the agency now in place; the Minister of Finance is taking this very seriously indeed. I think he will have some comments to make within the next few days, but I assure you that these activities will not be expanded, nor will we include the power of rollback.


Mr. Janies A. McGrath (St. John's East):: Mr. Speaker, what is significant about the speech that we just heard is the fact that it was made by the President of the Board of Economic Development Ministers (Mr. Andras) and not by the Minister of Consumer and Corporate Affairs (Mr. All-mand). I would expect him to speak but my point is that I fully expected him to lead off this debate for the government since it

is he who has the statutory responsibility within government. I intend to come back to that in a few minutes, Mr. Speaker.
The motion put forward by the hon. member for Oshawa-Whitby (Mr. Broadbent) is simplistic and, on the surface, commendable. This kind of simplistic approach is quite typical of the New Democratic Party. They come up with what is a reasonably adequate diagnosis of the symptoms but then they provide a remedy that amounts to a band-aid. We do not want another band-aid, Mr. Speaker. What we want is a cure. What this country wants is a cure.
I hope that the Parliamentary Secretary to the Minister of Finance (Mr. Martin) who makes a positive contribution to this House from time to time, Mr. Speaker, will make one on his feet during the debate and not from his seat.
The President of the Board of Economic Development Ministers referred in his speech to the parliament of 1972-74 and the amendments to the Combines Investigation Act introduced at that time by the then minister of consumer and corporate affairs. Those amendments, of course, were to provide, where necessary, the kind of rollback power called for in the motion put forward by the hon. member for Oshawa-Whitby in setting up his fair prices commission.
Of course, as the minister indicated in his speech, the amendments died with the dissolution of that parliament when we had a general election. I look forward to hearing the hon. member for Halifax (Mr. Stanfield) in this regard, because what is interesting is that when the government came back with a renewed mandate, they did not introduce the amendments to the Combines Investigation Act, which would have been the decent, honest and consistent thing to do, but proceeded to introduce that which they had campaigned against, namely, wage and price controls.
We all remember that campaign and the Prime Minister (Mr. Trudeau) going about the country saying "Zap, you are frozen", speaking against any kind of controls. And then when we came back he forgot about the previous parliament and the need to amend the Combines Investigation Act, competition policy and all the things that would have a meaningful effect in the marketplace. Instead we got a controls program.
I suppose that is all we can expect from this government but we are getting a little tired of hearing the government, in debate after debate, regardless of the issue, parading statements by provincial premiers and socking it to the provinces instead of hearing clear statements on where the government stands and what it proposes to do about the economic situation in the country today. We certainly did not get it from the President of BED Ministers as he attempted to speak for the government in replying to the hon. member for Oshawa-Whitby. We got from him, however, a hint that if this parliament lasts that long they are going to-I hesitate to use the word- "beef' up the Centre for the Study of Productivity and Inflation. What they propose to do about that toothless, useless agency whose credibility has already been destroyed is beyond me.
February 27, 1979

The problem in the first place was the failure to establish that agency under the aegis of the Inquiries Act which would give it the authority to act that it does not presently have. In consequence of some of the incorrect pronouncements it has spouted, it has lost whatever credibility it may have had as it sets out to monitor the marketplace. I suppose one can draw from the fact that the President of the Board of Economic Development Ministers spoke for the government, instead of the Minister of Consumer and Corporate Affairs or the Minister of Agriculture (Mr. Whelan), the conclusion that finally the government is beginning to get its act together with respect to some kind of strategy on prices. Perhaps the President of the Board of Economic Development Ministers is finally emerging as the minister who will be responsible for co-ordinating that food strategy we have heard so much about from the Minister of Consumer and Corporate Affairs, the Minister of Agriculture and others.
Perhaps that is what the Minister of Consumer and Corporate Affairs was referring to last week when he stated to the press what he has tried to correct or deny in the House, namely: "There is going to be a statement-something is happening. I cannot tell you very much but things are happening. We are going to have a statement on co-ordinated food strategy. All I can tell you is that I will not be making that statement, it will be some other minister."
It will not be the Minister of Agriculture; obviously he lost the battle too. That is how we can explain his absence from the House today. Obviously it is not going to be the Minister of Consumer and Corporate Affairs. Perhaps the President of the Board of Economic Development Ministers will finally have something to co-ordinate. Let us hope that at last he will be able to bring it all together.
What do we mean when we speak of co-ordination in terms of food strategy, Mr. Speaker? We mean the co-ordination of various government departments that are the responsibility of divers government ministers. We mean somebody to co-ordinate the policies of the Minister of Agriculture on the one hand, who has a responsibility to the producers of this country, and the policies of the Minister of Consumer and Corporate Affairs on the other hand, who has a very definite statutory responsibility to the consumers of this country.
Bringing up the rear is the Minister of Industry, Trade and Commerce (Mr. Horner) who has some say with respect to imports into the country. We are told that a large part of food inflation at the moment is represented by imports. Then there is the Minister of Transport (Mr. Lang) who controls the Canadian Wheat Board. He rises in his place in this House without regard to the consequences and in one fell swoop eliminates the consumer subsidy on domestically consumed wheat, notwithstanding the fact that this means a minimum 15 per cent increase in the price of a loaf of bread, an increase in the price of flour, some of which increase cannot be justified, an increase in the price of pasta products and all the things made from wheat.
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Then we have the Minister of Fisheries and the Environment (Mr. LeBlanc) representing a major food ministry of this government.
I do not know what the hon. member from New Brunswick is trying to say from his seat, Mr. Speaker. I hope he says it on his feet before the debate is over.
The Minister of Fisheries and the Environment has a definite responsibility in this House. The price of fish is good. The price of fish is too high for the same reason that the price of beef is too high. This is because it is priced on the American market and because of our sinking dollar. That is the reason we have to pay so much for fish in Canada. I hope the hon. member would address himself to that question. But when one talks about the price of fish, it speaks to the fact that we, as one of the great and most important fishing nations of the world, have one of the smallest per capita consumptions of fish. I believe we consume somewhere between 13 pounds and 15 pounds of fish per capita per annum. Something that should be addressed by government policy is how we can increase the consumption of fish in Canada.
All of these things have to be brought together in some kind of a co-ordinated strategy. On the one hand the Minister of Agriculture talks about supply and management with the various marketing boards that are able to control supply. On the other hand we have the Minister of Industry, Trade and Commerce who has to react to whatever the Minister of Agriculture says every time there is a request to limit or increase the supply of chickens coming into the country. The same holds true for eggs and turkeys.
I want to make this very clear just in case it has not been made clear before. The last thing Canadians want is another commission. We are fed up with commissions. What we want is action. We want a government that is prepared to act. We do not want another bureaucracy. Look at what we have had. That is all we have had from this government. Now all we are getting from the NDP is this cry of "set up another commission; set up another agency." How many commissions and how many agencies have we had since 1968 when the Prime Minister promised or told us that he had wrestled inflation to the ground?
Let us look back and recall some of them. As I recall, we had the prices and incomes commission, of late and unlamented memory. This was a useless agency which put together a substantial and expensive bureaucracy only to be disbanded.
Then as a response to the politics of the food situation which was getting to be a hot political issue in 1972, the government opened parliament with a big announcement in the Speech from the Throne that it was concerned about food prices and the effect of rising food prices, and that it was going to do something about it. But what did the government do? It set up another commission. This was the special commission on trends in food prices. It is interesting to note that the Minister of Employment and Immigration (Mr. Cullen) was the distinguished chairman of that committee. He has since been resur-

February 27, 1979
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rected in a new incarnation, somewhat more partisan and somewhat less objective than his role at that time, and that is the more to be pitied; but he was the chairman and knows what 1 am talking about.
That committee recommended, among other things, when it made its final report in 1973, a ten-year food strategy for Canada. That was in 1973, six years ago. Instead of having government action on food strategy for Canada, as recommended by an all party committee of this House, we had that special committee, the food prices review board under the guidance of Mrs. Plumptre. We know that happened to the food prices review board. It was able to identify the problems but it could do nothing about them. Nevertheless, that was the government's response at the time.
What it did next was to establish another commission. That commission was followed by the Anti-Inflation Board which grew out of the "Zap, you're frozen" policy of the Prime Minister in the 1974 election campaign.


Lincoln MacCauley Alexander: Another flip-flop.


James Aloysius McGrath: That was followed by yet another commission. This is the one which was announced with such fanfare a year ago last February by the Minister of Agriculture and the then minister of consumer and corporate affairs-the only time the old gobbler and Chicken Little have ever been able to get together on anything. They jointly announced the convening of a special conference to formulate a food policy or food strategy for Canada. So there was this big conference in Ottawa in February. It was held at great expense and brought a lot of people together, but that, Mr. Speaker, is the last we heard from them.
Then we had the royal commission on corporate concentration, but this was just another study. Finally comes the agency that we are now going to have beefed up, according to the speech made by the President of the Board of Economic Development Ministers today, and that is the Centre for the Study of Inflation and Productivity, which is supposed to look after our interests during post controls.
Certainly the people of Canada do not want another commission, even one that has the very commendable feature of being called a fair prices commission. I suspect we will be hearing a lot more about that fair prices commission as the hon. member for Oshawa-Whitby mounts his campaign whenever this government screws up the courage to call an election.


An hon. Member:: They are screwing up everything else.


James Aloysius McGrath: There is only one thing that we need right now, Mr. Speaker. We need this government to screw up its courage to get us out of here and go to the people of Canada. I suspect that is the only way we will get action. We will not get any action from this tired, old, worn-out government over there which is gasping its last breath.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: The only time we will get action is whenever the Prime Minister screws up his courage to go to the people of Canada. Then we will get action because there will be a change of government so fast that the Prime Minister and his colleagues will not know what has hit them.
We are all in favour of fair prices. What I find rather interesting about this proposal put forward by the hon. member for Oshawa-Whitby is that, no matter how he tries to talk about it, it is just another form of controls, the very controls which day after day he has spoken against in this House. Now he intends to set up another controls mechanism. By listening to the hon. member's argument very carefully one could hear the hon. member arguing against his own proposal.
If we examine the experience of the Anti-Inflation Board- the controls program which is now supposed to be deactivated-what do we find? We find that in the first year of the setting up of the AIB the rate of inflation was 7.5 per cent. The reason it was 7.5 per cent had nothing to do with the controls program. During the first year of the Anti-Inflation Board there was a fairly substantial drop in food prices, which were not controlled in any case by the AIB at the time. Then in 1977 the rate of inflation rose to 8 per cent. Again in the final year of the controls program, 1978, the rate of inflation was at 9 per cent. At the rate we are going this year we are heading into double-digit inflation. All of this was happening at a time when the government's target for inflation at the time it set up the AIB was 4 per cent. We should now be at an annual rate of inflation of 4 per cent. That is not bad, Mr. Speaker. If you look at the figures, I estimate they are out about 125 per cent, which is not bad for this government given some of its other forecasts. The rate of inflation for the final year of the controls program was the third worst in our history and the second worst in the industrial world. Only Italy had a worse rate. Now we are going to have another controls mechanism.
I do not understand the hon. member for Oshawa-Whitby. He has identified what has happened. He identified that prices have gone ahead and wages are falling behind. He knows that during the last two years of the controls program wages fell behind by an average of $520.
It boggles the mind to understand how the hon. member can get up in this House and with a straight face put forward this kind of proposal which is not worth the paper on which it is written. We do not want another controls program. We do not want another commission. What we want is a change in government and the sooner the better.


Mr. Herb Breau (Gloucester):: Mr. Speaker, I am happy to take part in this debate and, in particular, to deal with some of the comments made by the hon. member for St. John's East (Mr. McGrath) in his speech. I have said before that whenever the Tories cannot make up their minds on an issue, they use the eloquence of the hon. member for St. John's East. They know he is sensitive to the needs of the people because of the province and the constituency with which he identifies.
February 27, 1979

Today the hon. member for St. John's East was used unfairly. In defending or explaining a position on behalf of his party today he was used unfairly to the point where he got carried away. Above all else, and this is on the record, he used the words in this House that the price of fish is now too high. In trying to defend and explain the position of the Tory party the hon. member for St. John's East got up in this House and said that the price of fish is too high.


Some hon. Members:: Shame.


James Aloysius McGrath: Mr. Speaker, I rise on a point of order. I apologize for interrupting the hon. member, but I must do so because of what I consider to be a gross misrepresentation of what I said. I did not say that the price of fish was too high. What I said and clearly implied was if we got our monetary situation in shape, because of the attack on the dollar and because fish, like beef, is priced on the American market, Canadians have to pay too much for fish consumed in Canada. That is what I said. That is not what the hon. member represented me as having said.


Herb Breau: The record will speak for itself. I challenge the hon. member to show me in Hansard tomorrow that he did not say the words "the price of fish is too high." It is true that he said the price of beef is too high, but he also said that the price of fish is too high. If he can prove to me through the tapes, the blues or Hansard that he did not say that, I will withdraw the allegation. However, I heard him say that.
I have heard members of the Tory party suggest that the currency situation today is dangerous and bad for the Canadian economy, and this at a time when the price of fish, lumber, wood products, peat moss and minerals makes the Canadian economy more competitive and gives us a better edge in penetrating markets, some of which we have lost over the years. I have heard Tories, including the hon. member for St. John's East, complain about that in the House. Fishermen and those who work in the woods and in the peat moss industry, when purchasing equipment such as outboard motors, chain saws, trucks or mill equipment, have to pay the North American or world price. However, the Tories suggest that fishermen or those in the lumber industry should not get the world price.
People who work in the resource industries have traditionally had lower salaries than those who work in central Canada or in secondary manufacturing. The philosophy of the Tories is that because we have a currency exchange situation which benefits those people because the industries in which they work can better penetrate the market and receive better prices, that is bad. I find it terrible that a Newfoundland member would suggest that kind of policy.
A week or ten days ago the Leader of the Opposition (Mr. Clark) said that he generally agreed with the energy policies of Premier Lougheed. The hon. member for Halifax (Mr. Stanfield) is in the chamber. When he was leader of his party in
Unfair Price Increases
1973 and 1974, I remember his suggesting that the price of oil in Canada should more or less follow the international price. When it comes to oil, the Tories think we should have the world price. However, when it comes to fish, lumber and peat moss, they say we should not follow the world price. What hypocrisy! That is a double standard. They say that Ontario should get the world price for the cars, tractors, chain saws and outboard motors which they manufacture, but the fishermen should not get the world price. I say the fisherman and the lumberman has every right to the world price.
Coming from New Brunswick, I would not for one minute accept a government that would say otherwise. I have defended the government policy we are now following. I would not accept any policy that would restrict the profits of the fishing or lumber industry to the point that their prices or penetration of the market would be diminished. If this went on for a long time, those industries could possibly be asked to make a sacrifice or follow a policy of reinvesting in their mills, plants or whatever they have.
Look at the losses from the bankruptcies that have occurred over the past seven or eight years in the fishing industry in Newfoundland, New Brunswick and the rest of the Atlantic provinces as well as those in the forestry industry. How can anyone suggest that these people should not benefit for a certain period from the currency exchange market?
The policy being followed by the government is a fair policy. I have never heard the leader of the New Democratic Party say that wages in the auto plants in Oshawa should not be at the North American level. Neither have I heard him say that the wages of those who manufacture outboard motors in Peterborough should be lower than the North American wage. The same is true with regard to the manufacture of all kinds of equipment and with regard to the resource industries. Why is it that the fisherman, the man working in the woods or the woman working in the fish plant, should not benefit from the advantage they now have because of the currency exchange?
For the first time in ten or 12 years the pulp and paper industry is operating at 100 per cent capacity. In the hon. member's province a mill that had been closed has been or will be reopened.


James Aloysius McGrath: No thanks to this government.


Herb Breau: The hon. member is wrong there. Everyone knows that if it were not for the advantage derived from the 83-cent dollar, that mill could probably not have reopened. In my constituency the pulp and paper industry is working at 100 per cent capacity and there is every indication that next summer they will want to increase inventories, cut more wood and create more jobs. The Tories do not like that. I wonder if the Tories know what the hell their policy is.


Stanley Howard Knowles: Order.

February 27, 1979
Unfair Price Increases


Herb Breau: Do they want more credibility when they suggest something or do they just want to create confusion? I do not believe they are malicious. They are nice people. They are just naive and confused.
The hon. member for York-Simcoe (Mr. Stevens) comes from a riding which does not benefit from the high price of lumber or minerals or fish. He comes from a constituency which can protect itself, a place where labour and business are highly organized. What in Ontario is being manufactured but not being sold at the world price, at the North American price? I have not seen a car, a chain saw, an outboard motor or any piece of equipment that a fisherman or a lumberman uses which was bought in Ontario at a price less than the North American price.
So when I hear the hon. member for York-Simcoe and other Tories who speak for Bay Street argue against the 83-cent dollar, I can very well understand them; they are not benefiting from this situation. But when I hear the hon. members for St. John's East or St. John's West (Mr. Crosbie), along with other members from regions which for a long time have not been able to benefit from the North American economy, make the same criticism, I think it is really unfair. I am surprised they should support the policy of confusion which we find coming from the other side.
[ Translation]
Mr. Speaker, for at least 15 years the Atlantic provinces have not had the advantages industry can benefit from, for example a better penetration of American markets, be it in the area of fish, building lumber, pulp and paper, peat moss and minerals, fine paper or generally all areas of resource. One of the reasons for this situation is that the international exchange market presently benefits from Canadian exports.
Mr. Speaker, I think it is fair policy to let those industries expand and create more jobs. Pulp and paper as well as building lumber companies are said to be anticipating one of the biggest years in terms of the number of jobs created, in terms of salaries, in terms of everything. It is going to be one of the biggest years we have had.
Mr. Speaker, I do not see why the Progressive Conservative party and the hon. member for St. John's East would want to oppose that. I do not understand. I told the government on several occasions that I could not support the restrictive measures which could result in those products being sold in Canada at lower prices than on the North American market, and for a very simple reason.
I have never heard the leader of the New Democratic Party and member for Oshawa-Whitby (Mr. Broadbent), who comes from a riding where cars are manufactured, say in this House that car workers in Oshawa should earn less than the average North American salary. On the contrary, they are paid more than North American salaries, and I find it fair because the market allows that.
If the market today allows fishermen, woodworkers and peat workers to have better wages, Mr. Speaker, I cannot understand why they should not be given a chance. Why come up and say: You, no. You have the advantage because of the Canadian dollar standing at only 83 cents. The Progressive Conservatives would say: No, you are not going to get that. But that would be grossly unfair.
I would like to say a few words about the comments of the hon. member for Oshawa-Whitby who recommends yet another control policy. However, Mr. Speaker, from his very first days in the House the hon. member for Oshawa-Whitby, like the former leader of his party during the 1972 election, has always submitted all types of distortions and made-up figures to show that when certain companies make big profits, this necessarily means that they are ripping off Canadian consumers.
Mr. Speaker, this is a naive concept of the operation of our economy and does not correspond to reality. If there are no profits in a company, how can this industry or this company keep up with modern technology? Where will it take the necessary funds to expand, to implement modern methods, to protect the jobs and all the other economic benefits that the community in which it is established can enjoy because of it? Where will it get this? The Leader of the New Democratic Party never talks about this. Socialists never answer this question. They simply say that all investments should come from the public sector or that the public sector should borrow for everything. In other words, we should use the taxpayers' money because the public treasury must provide all the funds. We collect taxes or else we borrow on behalf of the taxpayers. What these people are suggesting is that all investments in a society should come from the public sector. How can they expect the private sector to finance the development and modernization of their own plants if they do not make a profit?
An hon. member is shaking his head to show that this is not so, that the public sector can finance everything. I would like to ask him how we can expect banks, financial institutions or those who buy shares on the market to invest in these plants or production units if they are not profitable?
Mr. Speaker, if an industry, sector or plant is to modernize, protect jobs and safeguard the community, as indeed our Canadian communities derive direct and indirect benefits from industrial activity, how can they remain in business without showing a profit? Every time profits increase we are faced with that naive NDP reaction. But members from that party of course never quote direct figures. They never refer to such or such a corporation increasing its profits from say $100,000 to $200,000, which may not be excessive in certain cases. The reference is to say profits soaring 100 per cent.
A 100 per cent increase may be obtained by putting $10 on top of $10, but the increase is still only $10. Mr. Speaker, playing with percentages is really dishonest. It does not give

February 27, 1979

parliament or the public the true picture. It is misleading the public. When I hear people like the NDP leader and his colleagues comparing 1978 profits, those in the last quarter of 1978 and projections for 1979, with those in 1976 and 1977, this is really dishonest. Truly it is trying to mislead the House and public, because we all know profits were low over that period. Was it not normal then that the increase be significant percentage wise? What counts is the increase in absolute terms. And looking at the profit increase in absolute terms, there may be cases of profiteering, but the broad point cannot be made that all profit increases in Canada over 1978 have been excessive in any given sector. As I say, there may be individual cases, but the broad point cannot be made that all profits have been excessive.
True, Mr. Speaker, food prices have been going up rapidly. True, there has been abnormal increase in that sector right now. Take the case of fish for instance. Fishermen today sell their catch to processors who in turn sell most of their finished product in the United States and Europe. When they sell in the U.S. and Europe they are paid in U.S. or European currency and can command higher prices. What are hon. member asking for? According to the NDP leader, it is unjust that fishermen should have this advantage for a certain time. When a Canadian citizen buys fish, if he can afford it, does he say that fishermen must subsize his food bill? What does he say? As I said a while ago, I have never heard the NDP leader claim that the unionized workers who make cars or outboard motors for the Fishermen should subsidize car prices.


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. member that his allotted time has expired. He may continue with unanimous consent. Does the hon. member for Gloucester (Mr. Breau) have unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Hon. Robert L. Stanfield (Halifax):: Mr. Speaker, I am very happy to be here listening to this debate because I have finally learned why we have an 83-cent dollar. It is because the hon. member for Gloucester (Mr. Breau) is in favour of an 83-cent dollar. He told the government that we must have an 83-cent dollar, and he would oppose any effort to stop the dollar from going down to 83 cents.
I have heard no one from any party in this House take exception to producers getting world prices for their produce except for oil, in which case prices have been held considerably below world prices. The hon. member for Gloucester must feel he has a weak case; otherwise he would not put up such a straw argument. No one is opposed to producers getting world prices for their fish or lumber, but some of us are concerned about what the Prime Minister (Mr. Trudeau) seems to be
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concerned about, if I understand him, and that is that the falling dollar has substantial inflationary effects and causes about one-third of the inflation we have been experiencing in recent months. I think that is something to be concerned about.
The hon. member said the Conservative party is confused. I daresay from time to time we get confused, but we try not to be dishonest. I have to categorize the anti-inflation policy of the government for the last number of years as lacking in frankness, being inconsistent and being opportunistic and basically dishonest. No doubt the hon. member for Gloucester will go to his part of the country taking credit for the advantages of the discount of 17 cents on our dollar. The Prime Minister and others will try to persuade people in other parts of the country that while the government is maintaining somewhat of a dirty float, it is concerned about the declining dollar. They will be saying that this came about in spite of their best efforts to pursue policies which would ensure the strength of the Canadian dollar, because they are concerned about inflationary effects. The Liberal party and the hon. member for Gloucester cannot have it both ways, and they might as well stop trying now because they are going to be exposed.
I understand the reaction of the leader of the New Democratic Party. Going into a supermarket these days is a rather chilling experience, about the same thing as listening to the Minister of Finance (Mr. Chretien) present a budget in this House or hearing about the size of the deficit he is predicting. The leader of the New Democratic Party suggested in this House this afternoon that the way to deal with this situation at the present time is to establish an investigatory commission with power to roll back. I am disappointed in my hon. friend, the leader of the New Democratic Party, because this is really nothing more than a gimmick unless it really amounts to controls.
I suppose in fairness one has to conclude that it does amount to controls. It is easy enough to talk about fair prices and rolling back unfair prices, but what is a fair price and what is an unfair price? We would have to establish some criteria. If a commission is to be established to roll prices back, it has to be given some criteria by this parliament under which to operate. Such a commission would be a form of control. The leader of the New Democratic Party says it really would not be a general control but a selective control.
How in justice can we operate selective controls? When we talk about selective controls, do we mean that some people would have their prices rolled back if they were caught by the commission but other people could gain bigger margins if they could get away with it? Is no one to be subjected to any specific kind of regulation? There must be some concept of fairness, and in all frankness I do not feel it helps the case of the New Democratic Party to talk about selective controls. That would be no more advantageous than general controls.
I do not think there is any way the New Democratic Party can get away from the controls aspect. If this commission is to be something more than a gimmick, it has to control prices effectively. It has to keep price increases within some concept

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of fairness to be defined by the Parliament of Canada, and that is surely a form of control.
It seems to me that what we are experiencing here this afternoon is to some extent a replay of 1973 and 1974. In that era, as I recall it, the New Democratic Party was calling for some form of control on prices. The government introduced the profiteering legislation to which the minister referred earlier this afternoon.
I do not want to go through all the history of those days but, as the minister said, that policy was not considered to be appropriate when the government came back with a clear majority and it was not beholden in any way to my friends in the New Democratic Party. The profiteering legislation was clearly a concept adopted by the government of the day in 1973 and 1974 to maintain the support of the New Democratic Party members of this parliament for a limited period of time. When the government came back after the election of 1974 and did not need that support, it dropped the whole idea.
I am not prepared, and I do not believe the members of my party are prepared, to support a return to controls at this time. We have just been through all that with regard to the AIB. It is true that I and my party advocated short term, general controls on prices and incomes back in 1973-74 because we considered them appropriate at that time. We saw the development of a strong degree of inflationary psychology and we advocated controls at that time for the only purpose for which controls are really useful, and that is to curb and deflate inflationary expectations. However, the government, in its wisdom and for electoral purposes, said that controls never work, that they were unalterably opposed to controls, and they fought the campaign on that issue. As we know, after the election we heard no more about the profiteering legislation and the government resorted to controls.
When the control measures were brought in, the government predicted that by the fall of 1978, that is last fall, inflation would be down to some 4 per cent. We know that that has not happened. I do not want to spend too long on the government's record.
I notice all hon. members on the other side are busily engaged in writing and do not want to hear what I am saying. I do not blame them; I would not want, if I were on their side, to listen to a recital of their cynical behaviour either. But regardless of how busy hon. members may keep themselves, the fact is that they have behaved in this way and this is one of the difficulties which the government confronts at the present time.
One of the main difficulties that the country has been facing in terms of inflation, following the removal of the AIB controls, has been the devaluation of the Canadian dollar. This has been recognized by the Prime Minister and by members of the government. The Canadian dollar has been falling because people in the rest of the world do not have confidence in the government or in the Canadian dollar. As the governor of the Bank of Canada said in the Standing Committee on Finance,

Trade and Economic Affairs, he was very concerned that we were getting near the point where any significant further fall in the value of the dollar would trigger the kind of wage demands and general cycle that Great Britain and some other countries have experienced. He emphasized in the committee the grave importance of the Canadian dollar's not taking any further significant drop.
When we consider how we are going to fight inflation, one of our aims surely must be to prevent that drop from happening. The leader of the NDP made his proposal here today. He said the fact that prices are going up may well trigger substantial wage demands. That may well be, but what is the most significant reason that prices have been going up? There may be some profiteering in the country, I do not know, but I do know and I can see there has been a significant fall of the Canadian dollar with consequential effects on price increases. I can see this kind of thing making the working man in this country very nervous about his standard of living and causing him to think twice about the wage settlement he is prepared to accept.
This is not the whole story but I think that to a very substantial extent one thing we have to establish, if we are going to get anywhere, is that we will deal with these problems in a straightforward way. We are not going to go around one part of the country saying that the devaluation of the dollar is a great thing for our exports, and in another part of the country telling some kind of story about doing the best we can to prevent the dollar from falling and indeed to strengthen the dollar. We are not going to introduce a policy, such as the 1975 policy, that "we are going to wrestle the inflation rate down to 4 per cent", and then fail. I do not know if members on the other side have noticed that we have failed, but we on this side of the House see the failure. The realization of that failure is not confined to this House; it is seen all over the world. Anybody trading on the Canadian dollar can see the difference between the promises of this government and the actual performance.
When we first introduced the controls, the government was against any severe fiscal restraint. That was in the fall of 1975. In the summer of 1978, I think, the Prime Minister, perhaps off the top of his head, announced severe fiscal restraint. What kind of consistency is that? Why did he change his mind? Possibly because he figured it was popular in the summer of 1978 to be in favour of fiscal restraint.
When "The Way Ahead" was published and released in the fall of 1976, the government announced its determination to head off any further inflation. I think it claimed the rate of inflation was down to 6 per cent and predicted it would soon be down to 4 per cent. We all know it is up around 9 per cent.
One of the substantial problems that the country faces in maintaining respect for the value of our dollar, in maintaining any respect outside our country for the future of our economy, is the lack of credibility of the government. Yet the government announced a year and a half or so later that it is following a policy diametrically opposed. You have a government making firm predictions as to what effects its policies
February 27, 1979

will have on the rate of price increases in the country, and the actual rate of inflation is more than twice as high as was predicted.
I do not believe there are any easy answers to the economic problems this country faces, economic difficulties which have been brought about in substantial measure by this government. But when you have people playing games, as did the hon. member for Gloucester today, and when you have a Minister of Finance presiding over a budget deficit of some $12 billion, up $1 billion or so from the previous year, and trying to blame that on the Leader of the Opposition (Mr. Clark) and saying the Leader of the Opposition was talking about big deficits, what kind of games are these? The members opposite and their ministers have a serious responsibility to tell the people the truth, even in election time.
We have had on the part of the government a sequence of deception and change, and even when the government is trying to be honest, which is not too often, and making predictions about the effect of its policies, it has proved to be incredibly wide of the mark, so wide of the mark as to destroy any confidence on the part of anybody watching this country that the government has the slightest idea as to what it should be doing or what is going on.
A restraint program was introduced when there was a rate of inflation of something over 10 per cent. Three and a half years later we are operating at an inflation rate of over 9 per cent. We have a dollar which has been drifting downwards and the government pretending that the market might determine the level of the dollar when in fact the dollar is floating on a sea of foreign borrowings. Even with all those borrowings, the dollar has drifted down to close to 83 cents. Despite the grave concern the governor of the Bank of Canada expressed about this process, the hon. member for Gloucester stood up in the House and said that this is a terrific thing and tried to invent a straw man to attack.


Herb Breau: It is good for the resource industry.


Robert Lorne Stanfield: Hon. members opposite cannot have it both ways. I thought they were supposed to be the government of the country. I thought they were supposed to be looking after the interests of the country as a whole and not trying to play one part of the country off against another.


Some hon. Members:: Shame, shame!


Robert Lorne Stanfield: I wish the hon. leader of the New Democratic Party had put forward a resolution of substance on the subject of inflation this afternoon because I would have loved to support him and to vote against the government on the matter of inflation. The record of the government is tortuous and incompetent. There is a complete lack of confidence in the government's record. I came into the House this afternoon and witnessed the performance of the hon. member for Gloucester. I would have thought members of the government who supported eleventh hour conversion would have looked at the
Unfair Price Increases
interests of the country as a whole and thought in terms of an anti-inflation and development program in the interests of the country as a whole.
I do not dwell on this, but I do not think Canadians have forgotten the change in position of my friends opposite since 1974 and 1975. That has created a basic lack of confidence in the government which has affected the acceptability and effectiveness of all its programs since that date. I regret to say I have no confidence in the intentions of the government to pursue a consistent program of development and anti-inflation. Also I regret that I cannot support the motion put forward by the hon. member for Oshawa-Whitby (Mr. Broadbent) which is either a gimmick or an inappropriate form of control. I look to my leader and hon. members of my party to go into the next election with an honest and frank statement to the people of the country-


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. member that his allotted time has expired. He may continue with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Robert Lorne Stanfield: Thank you; I will just end my sentence. We will go into the next election with an honest and frank statement to the people of the country. We will not promise the moon and we will not promise the impossible. We will tell Canadians what the facts are and put forward realistic, honest policies. When the people of the country place their confidence in my leader following the next election, I am confident he will not introduce a year later a policy diametrically opposed to those he will advocate during the election campaign.


Some hon. Members:: Hear, hear!


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I have been listening to this debate this afternoon, contrary to what was suggested by the hon. member for Halifax (Mr. Stanfield).
I can sympathize with the motivation which has led the hon. leader of the New Democratic Party to place this motion before the House today. I am fed up and the consumers whose interests I represent are fed up with the seemingly unending increase in prices. All of us in the government want to do something to help consumers, be they business consumers or individuals. We have done much in recent years to ease the burden of rising prices.


Some hon. Members:: Oh, oh!


William Warren Allmand: We have subsidized eastern consumers of oil. My colleague has recently increased the guaranteed income supplement and developed a child tax credit of $200 per child to help lower and middle income groups. We have lowered sales and personal income taxes both directly and via indexing. As a matter of fact, the recent consumer price index indicated that the federal sales tax reduction announced in the November budget is being passed on, and that the non-food element
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February 27, 1979
Unfair Price Increases
of the recent CPI showed a very slight increase due to that tax cut. As a matter of fact, in some cases there were decreases in the index respecting clothing and furniture.
Foremost in our initiatives to control inflation in recent years was the establishment of the Anti-Inflation Board in the fall of 1975. I want to point out to the House and remind Canadians that that occurred 15 months after the 1974 election, at a time when there was escalating inflation. Contrary to the statement made by the hon. member for Halifax, there was no deception.


Robert Lorne Stanfield: Oh, oh!


William Warren Allmand: I was a member of the government and of the House much before the 1974 election when we said that we had a contingency plan for price controls but that we did not think controls should be applied at that time. We did not apply them after the election, but they were applied 15 months later. It was not because we wanted to do it; it was a situation similar to a person requiring a serious operation to cure a very drastic medical problem. We felt we had to go ahead with the controls in the fall of 1975.
In comparing the provisions of that proposal in 1975 with the provision before the House today, it is interesting to note that the Anti-Inflation Board was given the power to investigate and to roll back prices. But what did the NDP do at that time? They voted against the measure unanimously. More than that, half way through the program they attempted to terminate the AIB mandate by circulating a petition. Of course, at that time NDP members said that the AIB program was a program to control wages and not prices and, of course, that was not true. There were guidelines respecting wages, prices and profits. As a matter of fact, there were rollbacks in all areas. Even recently the AIB ordered rollbacks respecting prices and profits in the food industry, in a prominent food chain. Also that was done respecting insurance and other industries. The controls applied to profits and prices as well as wages, but the NDP did not support this policy.
Today the NDP is proposing a system where there would be a rollback similar to the roll-back power in the AIB program, and they want us to support it. I agree with the hon. member for Halifax that it is a gimmick.
When we introduced the AIB program, we did so reluctantly and only on a limited basis for a three-year period. At that time we said that its principal purpose was to break the rampant inflation psychology and to implement some structural changes in our economic system. Among those changes that were pursued were reforms of our competition policy, of which I will say more later, the development of an industrial strategy, some of which has been announced in recent weeks by my colleague, the President of the Board of Economic Development Ministers (Mr. Andras); changes in the international trading system, which are now being pursued in the multinational trade negotiations; and extensive measures taken by the government to curtail its growth and to cut out fat and waste; in other words, to streamline our governmental system.

There is no doubt that there has been an alarming increase in food prices, but it certainly has not been to the extent alleged by the NDP leader and, to my knowledge, not for the reasons stated by him. Yesterday he said that a recent AIB report stated that food prices had increased by 21 per cent over the past year. All I can say is the CPI index put out by Statistics Canada reported a year over year increase of 13.5 per cent for food, and this compared with the general index of the year over year increase for all items of 8.4 per cent. On a monthly basis, last month food increased by 1.9 per cent compared with a general increase in the index of 0.8 per cent.
However, these increases are still too large. They are not as large as stated by the leader of the NDP but they are still too large. We expected large increases at the beginning of this year, particularly due to the cost of imported vegetables and fruits and the removal of the wheat subsidy. With regard to the removal of that wheat subsidy, when we removed it we said we only had limited amounts of money and we felt we had to put it where it was needed most. We took the money we had in such universal subsidy programs as the skim milk program and the wheat subsidy program and put it into programs put forward by my colleague, the Minister of National Health and Welfare (Miss Begin), to channel more money to the middle and lower income senior citizen and the middle and lower income families.
The leader of the NDP also referred to increased profits. Once again he distorted the picture. It is true that there have been increased profits certain segments of the food industry, but on the whole these increased profits are welcomed. In 1976 there were very low if any profits in food processing and distribution have been in accord with historical norms. To see a recovery of this nature is certainly a good thing.
Furthermore, to compare increases in profits, as the leader of the NDP has done, without referring to a base I think is dishonest. As he knows, in the food industry there is very erratic behaviour in respect of profits. Profits are continually going up and down in the food processing and retailing industries and, consequently, if you take the profits from a very low base and judge them with a high period, of course you will get in that period a high increase. But, I put it to the NDP and other hon. members, have they seen one occasion since the war-and I think this is a good thing-when our general wage level has decreased? It has not. We continue to see an increase in wages. I say that is a good thing-


An hon. Member:: In real income?


William Warren Allmand: In real income. But to compare that with the increase in profits for limited periods of time without defining your base is dishonest.
Generally an increase in profits heralds a resurgence in the economy. The NDP suggests that these profits are unreasonable and in fact that they are the cause of the rapid price rise. That is what I got from the speech of the leader of the NDP. I have been examining the profit reports in recent months and I have not been able to find any evidence to support this
February 27, 1979

contention. Last summer the Minister of Finance (Mr. Chretien) asked the Anti-Inflation Board to conduct a study of profit margins in the food processing and distribution industries. The AIB report in the fall concluded that the profit margins were not out of line with historical norms in these industries.
Just a few weeks ago the Anti-Inflation Board published an update of its fall report and stated once more that, although profits had increased in the third quarter of last year, they were still not out of line with historic norms.
I think I should refer further to some of the wording of the report. It concluded that in the first nine months of 1978 profit margins in the Canadian food processing and retailing industries had varied little from historic norms. This conclusion is similar to the one presented in the earlier report in the fall in respect of the first six months of 1978. The report went on to say that in the food distribution industry the rate of increase in profits had been more than in food processing, but still that it was not out of line with historic norms.
I doubt if there is any industry in Canada which has been investigated as much as the food industry. I have here a list of some of the inquiries and investigations that have been carried on recently. In 1966 to 1968 we had the royal commission on consumer problems and inflation in the prairie provinces, the Batten commission. In 1967 we had the special joint committee on consumer credit and consumer prices, of which I was a member. In 1957 to 1960 we had the royal commission of price spreads of food products, the Stewart commission. In 1948 we had the royal commission on food prices, the Curtis commission. Then we have in Ontario at the present time the Leach commission. We had in British Columbia in 1977 to 1979 the select standing committee on agriculture which studied the B.C. food industry. We have the Anti-Inflation Board and before that we had the food prices review board. There has been study after study of the food industry, and generally these studies have concluded that there is no one level, no one group of companies, which is ripping off the Canadian consumer.
It is true that from time to time we have prosecuted and had convictions recorded against certain food companies under the combines act. That will always be the case. There will always be some bad actors in the field. But generally speaking there has been no evidence and no conclusion in any report that I know of that any one sector of the food industry is ripping off the consumer.
I should also like to put on record that we have been very active in my department in pursuing action under the combines act regarding such things as price fixing, price discrimination, market rigging, predatory pricing, misleading advertising, double-ticketing and so on, which are all marketing offences and illegal under the Combines Investigation Act. We have been extremely successful in gaining convictions against many companies for these things.
I could give a whole list of activities and initiatives taken by my department to attack price fixing, unfair pricing and misbehaviour in the marketplace. What further can we in government do to deal with escalating prices, especially food prices?
Unfair Price Increases
This afternoon my colleague, the President of the Board of Economic Development Ministers, stated that we are examining ways to strengthen our price monitoring capabilities so we can do a better job. That is already in the works; but it will not involve a control mechanism, nor will it have rollback powers. We are also examining measures to increase food supply where appropriate to moderate food prices, and to encourage Canadians to move to other more reasonable food alternatives.
Recently the government appointed a new chairman of the national food products marketing council, a chairman who has had experience not only in agriculture but also in the consumer movement. She will give a more fair hearing to all elements of the food industry. There were new guidelines produced for the food products marketing council which instructed the council to give a more extensive hearing to, and greater flexibility in the consideration of, these elements. In my department we have several programs to help consumers get the best value for their food dollar. We distribute to many daily and weekly newspapers in the country what is called a "food backgrounder" which provides information on the best way to spend money on food. For example, last week many columns carried information about the price of pork which was a good buy in many parts of the country. At other times protein alternatives have been suggested such as eggs, poultry, fish and so on. This information has been helpful to consumers. We are also establishing as an experiment a phone-in service in Vancouver and Victoria where consumers can call a published number and get information on their problems concerning food and food prices.
During the summer we bring together experts on nutrition and food and then send them to areas of the country where help is needed most-the poor areas of the cities, Indian groups, Indian reservations and remote rural areas, to instruct people on good food, nutrition, and the best value for money.
We are encouraging the development of "no name" generic foods and "no frills" stores. I have visited these stores and tasted and examined the food. This has been a very successful program in selling good food at lower prices. If consumers take advantage of these types of marketing they can save money.
Finally, Mr. Speaker, we intend to bring in very shortly once again, reforms to our competition legislation. If anything will really assure fair prices for the consumer it is a truly competitive and open marketplace. If the opposition parties, in particular, the NDP, really want to see fair prices in the marketplace, then I challenge them to give quick passage to the competition bill when it is brought forward in a few days. It is significant, Mr. Speaker, that no opposition party has approached the government to co-operate on the passage of the competition legislation which would, among other things, move it from a criminal type legislation to civil legislation. This would allow us to proceed with a great deal more flexibility than the present law, and to outlaw and convict on many practices which lead to higher prices and inferior products in the marketplace.

February 27, 1979
Unfair Price Increases
Inflation is a matter of great concern to the government, but the government is also concerned about the flexibility and responsiveness of the Canadian economy. The government is confident that businesses and labour union leaders have the same concern that we not fritter away the gains that we have made through the AIB program over the past three years. Government expenditure is under control; wage demands and negotiated settlements are more realistic; the outlook for our exports is excellent, and there is a strong possibility that food price increases will be more moderate as time goes on.
In these circumstances, to return to confrontation and controls, as the motion before the House proposes, rather than to place greater emphasis on self-restraint and responsibility, would be a move in the wrong direction. Canadians know that they cannot increase their competitiveness and their standard of living simply by raising prices. The government will, of course, not tolerate an irresponsible attitude toward wage and price escalation, nor will it use its control of monetary policy to underwrite such inflationary increases.


Some hon. Members:: Hear, hear!


Mr. Cyril Symes (Sauit Ste. Marie):: Mr. Speaker, today we are dealing with the New Democratic Party motion to set up a fair prices commission to provide some kind of protection to consumers against alarmingly high price increases. I have listened to the spokesmen for the government trying to paint a picture showing that all is well with the world and that all we have to do is practise some self-restraint to prevent an escalating inflationary cycle for the rest of this year.
I think this confirms what many of us in the real world believe, that cabinet is living in a "Never Never Land." Anyone who has shopped for food or paid the home heating bill knows that prices are going up. The picture is not as rosy as the government tries to convey. For the minister to say that the way out of this dilemma is to practise self-restraint, is ludicrous.


William Warren Allmand: I did not say that.


Reginald Cyril Symes: How do we practise self restraint on food prices? Do we give up eating meat, poultry, or fresh vegetables? Are we to do as a Liberal senator advised, and treat vegetables as a luxury, taking them out of the consumer price index? Apparently Canadians should not use fresh vegetables in their daily diet. That is the kind of nonsense we are offered as the solution to our problems. The minister does not mention self-restraint in the pricing policies of business in this country, especially the large corporations.
I want to analyse why we in this party think prices are going up and that the only real way to help customers is to establish an investigative body with power to roll back unrealistic price increases. We all know from published statistics that prices went up by 9 per cent last year over the year before but wages only went up by 6.4 per cent. Workers today have suffered a loss in real income of some 3 per cent in terms of purchasing power. As my leader said, if this trend continues, with prices going up faster than wages, it is inevitable and reasonable that
workers will ask to catch up. There is no reason why they should be the victims of an economy that is increasingly charging them higher prices in their daily lives. There will be a great impetus to catch up. The scenario will be very much like the high inflation we faced in 1973-74.
Let us examine some price increases that affect most Canadians. The most obvious is food prices which have increased by 21 per cent over a year ago, especially in the area of beef and fresh vegetables. We can only find a solution if we examine the causes. The cost of imported food is a tremendously important factor. Because of the lack of a sound national agricultural and food policy we have to rely on more and more food imports, especially fresh vegetables. As our dollar has declined to some 83 cents U.S., we find that we pay more for U.S. vegetables. The lower Canadian dollar pushes the price of food up.
We agree that little can be done immediately about the price of imported food. The long-run solution is to make Canada more self-sufficient in some of the important foods. Good agricultural land is being taken over for industrial development. Farmers are not receiving adequate prices and are being driven out of business. All of this can be attributed to the lack of a food and agricultural policy.
What has the government done in recent months about a food policy? The Conservative party has proposed cutbacks in government spending. The government has been doing flip-flops regarding certain policy changes but it has accepted the idea that restraint and cutbacks are necessary. Consumers feel the consequences of such action. First of all, the government removed the subsidy on wheat used for bread. This should have meant a three to four-cent increase in the price of a loaf, but somewhere along the line the price went up by seven to ten cents. If the subsidy amounted to three or four cents, surely when it was removed consumers had the right to expect the increase in the price would be no more than three or four cents. But something went wrong along the way. We say that as consumers we need some kind of protection against that unfair escalation in price. We have received no answer from the government because there is no economic tool and there is no investigative body to ensure that that kind of price rip-off does not occur.
The same thing happened when the government, again in response to the Conservative concept of government restraint and cutback, took off the subsidy from skim milk powder. As a result the cost of skim milk powder went up some 50 cents a pound. It should be recalled that it is usually low income families who use this milk powder. They are the ones who are faced with the big burden of cost increases.
Government policy on removing subsidies has contributed directly to recent price increases on certain commodities. We, of course, oppose that kind of policy.
There is another reason why prices are going up; farmers are now able to get higher prices for their products. For example, a few years ago we know that the beef raisers were not getting

February 27, 1979

enough money for their product. It was costing more to produce beef than they were getting for it. So they began to slaughter their herds to avoid bankruptcy. That situation caused a shortage. The demand is still with us and the shortage is there in terms of the actual product, and that drives up prices. What is the solution to that? Surely it is to institute a beef marketing program, some kind of a price support program so we will not have this dramatic fluctuation of prices for beef over the years. This has been avoided in the egg industry by having a regulation of production. Surely we could use the same model for the beef industry to even out the ups and downs and to ensure cattlemen will at least get an adequate price and steady income for their product.
As I said, the farmer is getting a higher price for his product and that is another reason for higher prices. Let us take a look at a specific area and try to determine how much is going to the farmer, how much is going to the retailer and to the other people in the food chain line. Let us look at chicken prices. For example, take a frozen full chicken under four pounds. We find that in February, 1979, the price increase over February, 1978, went up from 46 cents a pound to 53 cents a pound. This was a 15 per cent increase to the farmer. However, the retail price over the same period went from 69 cents a pound to $1.18 a pound, or a 71 per cent increase in price. It seems to me that any rational person examining what is causing food price increases would want to zero in on what caused that 71 per cent increase at the retail level. If we examine that we will realize why price increases are rising so dramatically.
Although the Minister of Consumer and Corporate Affairs (Mr. Allmand) protests, every consumer who goes into the supermarket knows that day by day and week by week prices are going up. People want to know if these price increases are justified.
Let us now look at the food dollar. For every dollar spent on food we find that 37 cents goes to the farmer and about 32 cents goes to the retailer. The rest goes to processors, wholesalers and transporters.
The AIB has continued to study some of these retail price increases. It has shown that food store profits increased 37.9 per cent in 1978 over the same period in 1977. Now, the NDP accepts that in the private sector profits have to be made. The point is, are the profit increases justified on sound economic grounds which anyone would accept? Has productivity increased thereby justifying a profit increase of that magnitude? Have sales increased, thereby justifying that kind of profit increase?
Again, when one looks at the retail food sector study done by the AIB, they said that profits increased over 37 per cent but the sales only increased by 17.4 per cent. In other words, their profits more than doubled their sales increase. So unless there was a dramatic increase in the productivity at that level, I think we are justified in raising the question, as consumers: is there an unjustified price increase taking place in order to account for that tremendous profit increase, despite a lower sales increase? Surely that is something a fair prices commission which we are advocating today could look at and deter-
Unfair Price Increases
mine whether the consumer was being ripped off by unjustified price increases. The price increases in the food industry are only one symptom of what is happening to the economy.
In the House I have raised the question of lumber price increases. These prices have gone up 70 per cent over the past two years, 10 per cent in the month of January, 1979 alone. I have tried to get the Minister of Consumer and Corporate Affairs to investigate that problem, and where necessary bring in representatives of the companies and force a moderation in price or even a rollback, but this has been to no avail. Let us not fool ourselves. This price increase for lumber will cause a tremendous increase in the cost of housing. With this increased price for lumber I have estimated that it will cause about a $1,200 increase in the cost of an ordinary single family dwelling consisting of 1,800 square feet of floor space.
The minister says that it is the old case of supply and demand; that there is a tremendous demand for lumber products; that the Americans are buying our lumber and this is pushing the price up. He says we are exporting so much because our dollar is low and that we are making a good buck when the Americans buy our lumber. This was supposed to be a rationale for the lower dollar to help Canadians in terms of exports. But what has it done? It has pushed up the price of lumber in Canada for the Canadian consumer. This government has not taken the logical step of introducing a two-price system for lumber so that Canadian domestic consumers would pay a lower price. The lumber exported could fetch a price at what the market would bear on the world market and so allow that price to increase. I see no justification why Canadian consumers should face a 71 per cent increase in the cost of lumber when we all know the cost of production has not gone up by any kind of percentage relationship to that price increase.
Steel prices are another example. The price of steel is so important to our economy it touches on items all the way from pots to automobiles. The big three steel companies have recently increased their prices anywhere from 5 per cent to 18 per cent. As a result, these steel companies have recorded a 46 per cent profit increase, from $196 million in 1977 to $285 million in 1978. Last August, of course, steelworkers who are employed by these companies, and whose hard work contributed to this profit, had to accept a 6 per cent to 7 per cent wage increase, despite 9 per cent inflation and record company profits.
The Liberals and Conservatives in this House like to blame workers' wages as the main cause of companies raising prices. I disagree fundamentally with that. My argument is that companies today are able to manipulate prices upwards because our supposed free enterprise or competitive system in reality is no longer working. We do not have effective competition to hold down prices in Canada today. What we do have is a state of oligopolies or near monopolies. We have a few large companies controlling their particular sector of the economy. When they are able to control it through supply, they are able

Unfair Price Increases
to control it through price. We have some 200,000 corporations in Canada, but a mere 500 of them accounted for 51 per cent of the sales, 59 per cent of the assets, and 63 per cent of the profits. Can anyone tell me we have effective competition in our economy when that kind of situation occurs?
If we do not have effective competition, we will not have fair prices to the consumer. Where is the competition when only four companies in Canada control 70 per cent of all flour and cereal production, four companies control 75 per cent of our iron and steel production, four companies control 93 per cent of our motor vehicle production, four companies control 71 per cent of all agricultural machinery production, four companies control 53 per cent of all slaughtering and meat products industries, and four companies control 79 per cent of all petroleum refining in this country?
There is no effective competition when you have that kind of control by the few over these important sectors of our economy. As John Galbraith, the economist, said, if the market fails, so does the case against government intervention. That is why the NDP wants a fair prices commission set up by the federal government, with powers on a national scope to investigate price increases on a selective basis where it becomes apparent to the consumer that there are tremendous increases, and this commission should have the power to roll back unjustified price increases.
The market will not do it for us because there is no longer effective competition in the major sectors of the market. If that will not work, the only protection we as consumers have is for the government to step in and act on our behalf through the commission we are advocating in this debate today.
As I said, we recognize that private companies have to make a profit, but where the market is not working it is incumbent upon government to analyse and see whether the profits are excessive or not, and whether they are justified in relation to the costs of production. Until we have a fair prices commission we will not be able to counteract the natural temptation of these large and powerful corporations which control so much of our economy to jack up prices arbitrarily, charging whatever they figure the market will bear.
If prices go up, inflation goes up, and workers demand more in wage increases. The vicious cycle repeats itself. The corporations have done very well since 1972. When you subtract the effect of inflation over the period 1972 to 1978, you find that corporate profits have increased in real terms by 55 per cent while wages have only increased by 10 per cent in real terms.
Throughout the debate here the Liberals and Conservatives have indicated they oppose the NDP motion to set up a fair prices commission to protect consumers. I regret the stand of the two old line parties, although it does not surprise me. The Conservative answer to the problem of rising prices is to call an election and get rid of the government. They do not propose any alternative solution other than the time-worn idea of wage and price controls. The Liberals stole the idea from the Conservatives. We know how ineffective that program was and how it disrupted the economy and penalized workers. The

President of the Board of Economic Development Ministers (Mr. Andras) says that profits are good, that he agrees with what is happening, leaving the consumer to the mercy of a market controlled by these near monopolies. I consider that unfair.


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the hon. member but his allotted time has expired. He may continue only with unanimous consent. Does the hon. member have consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Sinclair McKnight Stevens: Mr. Speaker, I am pleased to join in this debate on the NDP motion before this House. I am not one to suggest there should be greater federal spending, but perhaps for the sake of the Canadian public it would pay us to send this little contingent of NDPers to England to learn the new message of the Labour government in that country. The prattle that we are continuously subjected to in this House from this little group is something that the Labour party in all innocence, ten to 15 years ago in England, thought was the gospel. It has been proven to be wrong. It is unfortunate that they do not go there and find the error of the Labour party's ways in the past, and quit making these silly suggestions as solutions to inflation and other things in Canada.
It is odd that the hon. member for Sault Ste. Marie (Mr. Symes) finished his remarks by saying, and these were his words, how ineffective the wage and price controls program of the government was. We agree it was ineffective. In fact this is the only party that consistently fought against that program. The NDP repeatedly joined with the Liberals when we made various moves to try to terminate that program. Think of how inconsistent they are. The speaker on behalf of the group to my left, presumably supporting the motion, ended by saying how ineffective the wage and price controls program was, and yet the thrust of their motion is to give us another controls program. Does it really make sense?
The reasons for our inflation today are due to three problems. First, our diving dollar has added one-third to our rate of inflation in the past two years. The Centre for the Study of Inflation and Productivity, established at the Prime Minister's (Mr. Trudeau) request, has said:
Canada has experienced more inflation because of the depreciation of the dollar. By the end of 1978, the CPI was 6xh per cent higher than it would have been without the dollar depreciation. So the dollar decline has been responsible for about one-third of the total inflation measured by the CPI in this two-year period. In 1978 the CPI rose 9.0 per cent from the year before. Without depreciation of the dollar the increase would have been about 6 per cent.
The second reason we have inflation is that while most other countries have been following a relatively tight money and public spending position, our government has been trying to hang loose.
Third, our spending deficit with the rest of the world is the worst in relative terms of any industrial country. In fact OECD countries, on balance, had a surplus on this account
February 27, 1979

last year while our problem worsened. This drove up our interest rates, which adds to our costs and inflation.
I mention those three points because they are the fundamental points that are causing the inflation that is so incomfortable in the world today. The proposal of the NDP would be nothing but a eunuch. May I call it six o'clock, Mr. Speaker?


The Acting Speaker (Mr. Turner):: It being six o'clock I do now leave the chair till eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Sinclair McKnight Stevens: Mr. Speaker, just before the dinner break I was making a few comments concerning the motion put before the House by the Leader of the New Democratic Party (Mr. Broadbent) today. I think it is important that we read the wording of the motion once again. It states:
That, given the government's failure to hold down rising prices, which have increased the cost-of-living burden for Canadian families, this House calls on the government to establish a Fair Prices Commission, with powers to investigate and, where necessary, to roll back unfair price increases.
The reason I read that motion, Mr. Speaker, is that until we can think of the true import of what he is saying we cannot conceive of the total inconsistency of the socialists to my left. Here we have them saying that the government has failed- which we agree-to hold down rising prices, and in turn these prices have increased the cost-of-living burden to Canadians. Certainly nobody on this side of the House would disagree with that. But how the leader of the NDP can fail to realize that his group was instrumental in triggering the government into the spending programs and deficit programs which have resulted in the inflation we are now living under in this country, I find hard to understand.
The motion then goes on to call on the government to establish a fair prices commission with powers to investigate. If such a commission were ever set up, the first thing it should start investigating is why the NDP voted so often to support the government during the minority days of the parliament between 1972 and 1974. If that commission was ever established I hope it would analyse why the NDP, in spite of the fabulous monetary and fiscal growth on the part of the government, continued to support it if, at that time, they were worried about inflation. The fact is, anybody could have predicted then that this alliance between the socialists and the near-socialists was going to trigger the inflation we are now experiencing.
We do not need a commission to tell us there is inflation in our country. Any housewife can go into a corner grocery store and see the price increases. If he cannot afford the 25 cents it now costs to buy a copy of the Globe and Mail I will give my copy to the Leader of the NDP and perhaps he could read the
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livestock reports which appear there. He could see, for example, that in Omaha the price for No. 1 cattle is between $65 and $67 per hunderweight live weight. If he looks at this, he will find that in Montreal the same type of animal sells for $75 to $80. If he does some arithmetic, he will find that it takes 120 cents to buy one American dollar. If he multiplies the Omaha price by 120 Canadian cents, he will get exactly the price beef is trading for in Montreal, Toronto or Calgary compared with Omaha. In short, as far as live beef is concerned, our prices are 20 per cent higher because the dollar is 17 per cent below par with the American dollar. It is as simple as that.
How these fellows can seem to be so mystified and run around saying they do not know where inflation is coming from, and how they can say they want a commission to explain it is not hard to understand. The truth is that they want a decoy. They want to be able to go to the Canadian electorate and pretend that they have in mind the setting up of a fair prices commission which somehow would do something meaningful about inflation. That is just a blind. It is not fair to the Canadian public. They know this might help some of their bureaucratic friends to get new and high paying jobs, but we will not do one thing to solve the problem of inflation until we can convince the government of the day, hopefully a Joe Clark government, that prices can be controlled only by restraint in government spending and monetary growth.
It is the government which has the control, but is it not interesting that when this same NDP group was given a chance in November of 1975 to change the AIB reference so that the board could investigate government spending, the NDP voted against us? Hon. members might recall that at that time I moved a motion that the AIB should have power to make explicit, and I quote:
-such implications of the failure of the federal government to co-operate in combating inflation by monitoring the respective main and supplementary estimates of expenditures for each fiscal year of such government, and publicly commenting, within 21 days after any such estimates, are made public, upon any failure, disclosed in such estimates, by such government to combat inflation.
That is what we in this party proposed in November of 1975. We voted for that, but the grand old alliance between the socialists and the near-socialists ganged up on us so there could be no inquiry into the increasing estimates of government expenditures. It is not difficult to understand what has happened since that time. That was in 1975, and in that year total federal government spending was $34,357 billion. Just last week the President of the Treasury Board (Mr. Buchanan) revealed that estimates of government spending are now up to $52 billion.
On budget night, November 16, the deficit predicted for this year by the Minister of Finance (Mr. Chretien) was $12.1 billion. The minister revealed that for fiscal 1980 the deficit would be $12.9 billion. In two short years, the minister tells us, the total deficit is to be $25 billion on an expenditure of roughly $100 billion. In short, for every dollar the government now spends it receives only 75 cents in revenue. The remaining

February 27, 1979
Unfair Price Increases
25 cents have to be found some place, either through debt or through the printing of more money.
That is what is contributing to inflation in this country because, to the degree the government is over-inflating our money system, it causes pressure on prices. To the degree that the deficit is viewed around the world as irresponsible fiscally, that brings our dollar under pressure. And when I say that the dollar is under pressure, let us not forget that since December, 1976, it is not just that our dollar has fallen 16 per cent in relation to the American currency; it has fallen 37 per cent in relation to United Kingdom currency, 47 per cent in relation to the German Deutsche mark, and 74 per cent in relation to the Japanese yen.
That has been the consequence of the irresponsible fiscal and monetary policies this government has put in place in the last four to five years. That is why we are saying we do not need any more decoys. We do not need more commissions to tell us the obvious. What we need most of all is a new government.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: If we cannot get rid of the emperor and his hordes, at least let us talk some sense to them. It is the diving dollar which is causing the inflation which is now so objectionable in the country, and let there be no doubt that we do not need a commision to tell us what the full impact of that falling dollar will be. We can talk to any merchant today. I was talking earlier to a manufacturer and distributor in Vancouver. He told me that only now is he starting to pass on the total cost of the goods he has been purchasing from Taiwan, Japan and other oriental countries, and translating the fall in the value of our dollar into higher prices to the Canadian public. Those prices are still to be felt in Canada.
I spoke to a shoe manufacturer in Quebec city at noon today. He said that the public will not believe the prices it will be required to pay for shoes as a result of our collapsing dollar. He pointed out that leather prices have doubled because, since our dollar started to fall, leather became more attractive to buyers in, for example, Japan. They have been buying our leather, and the result is that the price of leather has doubled. The net result is that when we come to buy shoes-which the chap from Quebec city pointed out were manufactured 15 years ago for less than $15-retailers will be paying $60 and, it is anticipated, consumers will be paying $100 per pair. Those are the facts. A head of lettuce today costs 20 per cent more, simply because this government has irresponsibly allowed our dollar to collapse. Let us tell the public the truth and stop pretending some fair prices commission will discover why prices are going up. Prices are going up because this government has failed to run our economy in a responsible way.
I could go through any number of items which are produced and consumed in Canada, but they are priced on a continental basis, and the result is that to the degree our dollar continues to fall Canadian workers are expected to pay American dollar prices, yet they get Canadian dollar wages. That is the dilem-

ma, and surely even this government can realize that it has toyed with a falling dollar. The Minister of Industry, Trade and Commerce (Mr. Horner) once said that a 90-cent dollar was a good thing. The government should have had the courage to structure our monetary and fiscal position to ensure that the dollar did not fall below 90 cents and down to the 83-cent level it is at now.
I think every member in this House should go out and start telling the Canadian public the way it is. It is time the public understood that wage and price controls did not work. If we compare our record with that of the United States, we find that in each of the three years when we had wage and price controls and the Americans did not, they performed better than we did as far as inflation control was concerned. Here are the figures. In 1976 the United States had inflation of 5.8 per cent, and we had 7.5 per cent. In 1977 the United States had 6.5 per cent, and we had 8 per cent. In 1978 the United States had 7.6 per cent inflation and we had 9 per cent. With wage and price controls we lost every year.
Hon. members will recall that October day when the Prime Minister announced his wonderful program to control inflation in this country. He said that he would do four things. He was going to bring in wage and price controls. He was going to have government expenditure restraint, monetary restraint, and a massive deregulation of industry. Unfortunately, once the government put its wage and price control program into effect, it forgot, in any meaningful way, the other three points of its restraint program. Government spending, as I have indicated, continued to rise. Certainly the monetary growth continued, and there has been nothing but verbiage so far as deregulation is concerned. That is why we have inflation.
For the NDP to be suggesting now that they want still another commission to control something further shows how out of touch they are with reality. It is not just that they are out of touch with Canadian reality. I referred earlier to the fact that initially they took their approach from the Labour party in England. That is in effect from where they pirated most of their thinking. But unfortunately the lines of communication seem to have broken down because the English Labour party has at least come to its senses, while the NDP charges on in its usual irresponsible way. I say this because I find it is interesting now that when you look at the economic progress report published by the treasury in Great Britain you find that they are taking a meaning approach to expenditure restraint. They have accepted that the growth should be limited to 2 per cent on a real base year over year, and they have projected ahead to 1983 to show that in fact they will keep a lid on their expenditures, they will have a smaller deficit and, in short, that is why the U.K. pound is going up and our dollar is going down. We are the last of the western nations to accept the basic principle that you have to run a prudent economy if you want to lick inflation.
February 27, 1979


Mr.   C.-A. Gauthier@Roberval: Tonight, Mr. Speaker, the motion before the House deals with the creation of a fair prices commission with powers to investigate and, where necessary, to roll back unfair price increases. To me, Mr. Speaker, this motion is not complete. We are wondering whether it proposes to freeze wages and prices like in the past or whether it is simply designed to study rocketing wages and prices. And we, too, are wondering how to achieve that goal. The mover of that motion did not specify how he intended to reach the objectives contemplated in his motion.
Tonight I would like to make three or four brief proposals which have already been made here and which our party puts forward to stop ever higher prices and wages and so on. This would be done first through the consumer discount, second by the establishment of a commission which would be called the national credit bureau, and third, the reduction of interest or the stoppage of debt accumulation and the control of monopolies.
Most Canadians, Mr. Speaker, have heard of the consumer discount, mainly from us who advocate the reforms of social credit. However, few understand the mechanism. What is the consumer discount? It is simply something that would make prices a reflection of the true economic conditions of the country. In other words, if production is abundant and easy, the purchase of that same production would become easy. So you see that it is not necessary to restrict or even reduce production as is being done today to stabilize prices.
What is wrong with the present make-up of prices? Prices are too high compared to the incomes to pay for them. The imbalance between what is sold and what people can buy leads to economic bottlenecks, waste and material insecurity. That frantic race after higher salaries because prices keep going up produces galloping inflation which will stop only when governments will take the means to stop that rise.
Where do prices come from? Consumer prices come from the total cost of production to which profits and interests must be added. Today the manufacturer says that salaries are too high, the materials he needs to make the end products are also too high and consequently his profits are too low. If he has to raise the cost of his product, the worker in turn will not have the necessary salary to purchase that same product. The fair prices commission as proposed tonight at both the consumer and producer level might probably to able to roll back certain unjustified and unjustifiable price increases.
But in addition to that monitoring board, the hon. member for Oshawa-Whitby (Mr. Broadbent) would have been better off including in his motion the consumer discount to reduce injustices. The consumer discount would work this way: prices paid by consumers for their purchases would be discounted by the retailers who, after submitting to a government agency the necessary proof that the sales were actually made, would
Unfair Price Increases
receive credits to compensate the difference between the discounted prices and normal sales prices. Here is an example. Let us say that you want to buy a pair of gloves at the regular price of $20. The retailer who is registered under the consumer discount program will give you a discount of 25 per cent, $5 which the government would pay back to the retailer, or still it would be possible to purchase directly from the retailer if he agreed to reduce his prices.
Ever since we have been sitting in his House, we have been advocating the consumer discount. From the early days of social credit, we had an item in our election platform which reads as follows: a social credit government would reduce consumer goods prices through subsidies paid to retailers provided they lowered their prices by a percentage equivalent to the amount of the subsidies.
This mechanism will eliminate inflation while guaranteeing fair prices. Of course, we would need a commission, which could be called for instance the national credit commission, and which should be quite independent from political influence, as are now Statistics Canada and the Supreme Court of Canada. This commission would be responsible for collecting all the data and figures required for a national account book where it could find all the information necessary to issue credit.
These national accounts would give credit value to all valuable goods in the country whose total could be evaluated in dollars. This evaluation would cover lands, businesses, farm industries, public buildings, houses, mines, all means of transport, including railroads, ships, airplanes, cars, roads, bridges and canals, as well as our semi-finished and finished products. In other words, it would include as far as possible all material wealth. It should be noted in passing that the census of nearly all these values is already done by Statistics Canada. If we go back to the year 1929, which was more normal than all the others that followed, and if we consider that the figures do not include the value of our undeveloped natural resources, the total of our tangible resources was still evaluated at $30,276 million. This independent commission would be strictly responsible for keeping the national accounts up to date. This means that it would have to register regularly all increases and decreases in our total wealth.
Let us suppose that in a six-month period, we produced or imported $4 billion worth of goods and that improvements costing $200 million were made to our commercial or industrial equipment. This would mean an increase in our national wealth and would be added on the credit side of our national accounts. Let us suppose, on the contrary, that during the same six-month period, consumption and exports amounted to $3.5 billion and that the depreciation of the same equipment amounted to $150,000. This would mean a decrease in our national wealth. This amount would therefore have to be
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February 27, 1979
Unfair Price Increases
subtracted from the national accounts or debited to the country.
Mr. Speaker, how could we achieve a balance between the amount of the wealth produced and the amount of money needed for distribution? The Social Credit Party of Canada would suggest the creation of a commission or central bureau responsible for achieving this balance. A federal office of the Social Credit Party of Canada compiles the total wealth produced during the last period on the basis, let us say, of the previous year. It also evaluates total consumption during the same period. The difference provides the available assets which are registered under the available national credit. Mr. Speaker, I have here a chart which gives concrete examples of all this, but I will simply mention a few figures since I cannot table the whole chart.
Let us suppose a production of $7 billion with imports of $1.2 billion and an appreciation of $4.6 billion for a total of $12.8 billion. On the other hand, the consumer account shows $5.5 billion for consumption, $1.2 billion for exports and a depreciation of $1.3 billion, for a total of $8 billion. There is therefore $4.8 billion in the national account for redistribution to consumers. I quote:
A few additional remarks to clarify this. Imports and exports were set at equal levels, although this will not always be the case, but this must be the ultimate goal in a sound system. The purpose of international trade is to give consumers access to a greater variety of goods, not to draw the last cent out of customers. The money-grubbing merchant whose aim, in international trade, is to pocket his neighbour's gold is the unnatural fruit of a twisted tree.
This gives you an idea, Mr. Speaker, of the second reform we propose, the national credit office, which would have control over investments and especially over consumer prices as well as control over production costs.
Our third suggestion-and I see that my time is fast running out-would be to reduce interest. I think, Mr. Speaker, that we have many times stood before this House to request that interest be either reduced or frozen, especially in the residential construction sector.
Imagine a young man who dreams of building a house nowadays. He must first pay taxes and then, because the value of the dollar drops, he loses another 17 per cent. He must pay a building tax, excise tax, and sales tax, so that before thinking of building a house he must think of the 48 per cent in taxes alone that he must pay. He buys building materials and builds himself a $40,000 house which in reality is worth only $20,000. The cost includes $20,000 worth of taxes. He then goes to a a loan company and obtains from the Central Mortgage and Housing Corporation or any other agency a 30-year loan at 10 per cent, 11 per cent, or 11.5 per cent. At the end of 30 years, he will have paid four times the nominal value of his $40,000 house which in fact contains only $20,000 worth of materials. He will have paid $40,000 to build his house and $160,000 to financial institutions because he will have succeeded in building it.
This is why I suggest that a young man who wants to build a house today must be realistic and say: I am going into debt today not for $40,000 but $160,000. Mr. Speaker, if on top of that we add municipal taxes, school taxes and insurance coverage, we realize that it is costly nowadays for someone who wants to build a home.
Well, I think that if the government decided once and for all to use the credit of the Bank of Canada to finance those houses and desisted from making those young couples pay two, three or four houses to own one after 30 years, we would not need urban development and housing programs to encourage young people to build, although I say to encourage young people to get into debt, because we know ahead of time that 50 per cent of those young people will never overcome their debts. That is why I ask and propose today, while we are debating this motion, that the government pass a legislation to allow those who want to build a single family dwelling to do so, and to pay one but not three or four houses in interest. Only then, Mr. Speaker, could we urge people to build their houses.
Finally, I would like to say a few words on debts, as long as the government continues to get into debt and set such an example. In the fourth quarter of last year we borrowed $7 billion, again we are borrowing $10 billion, and that is over and above our $12 billion deficit, and the bigger the better.
It is raining billions around here, but billions of dollars of debts, and until such time as we have put an end to that type of indebtedness, and as long as the Minister of Finance (Mr. Chretien) keeps on saying, as he did recently in reply to a question: "We are not that deep into debt; we have committed only 33 per cent of the gross national product," the situation will not change. Moreover, the minister is not telling the truth to the people. He compares the debt of the federal government with the gross national product. Let him compare eggs with eggs, and apples with apples. When he speaks of the gross national product, let him compare it with the national debt.
Mr. Speaker, if we take all the debts of the federal government, the provinces, school boards, municipalities and individuals, we will find that our national debt exceeds by perhaps $25 billion our gross national product. To be sincere, frank, and in order not to mislead the population, when we speak of the gross national product, we must compare it with the national debt and not with the debt of a single municipality or a single province. I see that I have run out of time.


Miss Aideen Nicholson (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, I welcome the opportunity to take part in this debate on a subject which is extremely important to all Canadians, and particularly to Canadians of low income. I welcome particularly the very practical measures announced in the course of today's debate by the President of the Board of Economic Development Ministers (Mr. Andras) and by the Minister of
(Mr. Gauthier (Roberval).]
February 27, 1979

Consumer and Corporate Affairs (Mr. Allmand), which of the many remedies available place emphasis on a strengthened monitoring group, on increased competition in the market, and also on increasing the food supply and the information about alternatives. Information to consumers about alternatives is perhaps a counter-inflationary measure which is not generally as well perceived as it might be, but quite clearly the better informed the consumer, the better he or she can protect himself or herself.
The concern being expressed by Canadians about high food prices at the present time is very understandable. Food is a necessity of life. Escalation of food costs faces people day in and day out when they shop for their families. Consumers on the average spend 13.2 per cent of their disposable incomes on food for the home, but about 17 per cent of the population which makes up the lowest income sector spends nearly one quarter of its income on food. This is the group for whom recent price increases create a grave problem, the people who have little discretionary income and little flexibility.
In the search for solutions I think it is important to think of future supply as well as costs in the here and now. Intelligent consumer advocacy requires a concern for supply as well as for costs. For example, at the present time butter, skim milk powder and cheese are showing some price increases, but since these reflect increased prices to the farmers who produce industrial milk as of January, 1978, these prices should promote confidence among producers and provide stability in the industry so that all Canadians can benefit from a steady supply of dairy products.
The high cost of beef at the present time is related to supply problems. Beef prices have risen again and are expected to do so in the future because supplies of beef in North America are declining as cattlemen retain animals to rebuild their herds.
Farm prices have risen rapidly since December and this is being reflected in retail prices. Low prices are not necessarily in the consumer's best interests if they are reached at the expense of prejudicing supply in the future. In the past the Government of Canada has intervened to keep prices down in the short term by subsidies on flour and skim milk powder for instance. The difficulty with the subsidy route is that it is universal and benefits equally those with very high incomes and those whose incomes are very limited. With present government emphasis on restraint and relocation, the decision has been made to help those who need help most by, instead, trying to put more disposable income into the hands of people with lesser incomes so they are better able to withstand increases in food costs and other things related to the necessities of life.
As part of this emphasis we have seen the indexing of personal exemptions under the Income Tax Act, the child tax credit, increased family allowances, and increases in the guaranteed annual supplement. Putting money into the hands of those who most need it in order that they can meet the necessities of life is my preferred method of dealing with this kind of inflation in respect of basic necessities.
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It is a matter of regret to me that a couple of years ago when the then minister of national health and welfare wanted to introduce a system of subsidy for the working poor, the province of Ontario blocked that measure, just as Ontario blocked the proposal made to allow housewives to protect their Canada Pension Plan contributions during the years when they were at home with children, receiving low or no income which would allow them to protect their buying power in future years when they are retired.
However, basic to any increase in social service payments is, of course, a strong, healthy economy. That is why I welcome the structural changes in the economy that have been made in the last year or two and with which we are now progressing, the industrial strategy measures, the current negotiations with GATT, the reduction in government expenditures in order to leave more room in the private sector and, particularly, our decision to go ahead with some amendments to the competition bill.
The food industry is one that has been investigated more than any other, and this afternoon the Minister of Consumer and Corporate Affairs listed some of the many investigations we have had, none of which has produced serious or pervasive evidence of price gouging. There have been some rollbacks under the AIB program of food prices, and there have, indeed, been some convictions for double ticketing or misleading advertising, but essentially as one looks at the long history of investigations into the food industry, and the comparatively small amount of evidence of dishonest practices that ran afoul of present legislation, one has to ask oneself why the public continues to be so suspicious of retailers and distributors in the food industry. I think I can see two or three reasons for this.
When a worker, a union, or a consumer looks at profit in the manufacturing sector, there is perhaps less tendency to regard it as necessarily negative. There is more of an assumption that profits in the manufacturing sector may go into plant expansion or something that will create more jobs. When profit is made by a large supermarket it is not so easy to assume it will be used to benefit Canadians generally, and to create jobs. Most people would think that the logical place for supermarket profits to be reflected would be in reduced prices.
There is also the fact that people are faced with food costs every day. There is not the same opportunity for discretion as there may be with some manufactured items. In the food industry, practices which are not dishonest in themselves can distort the market. There are practices against which we have no legislation at the present time, and the commission which the Ontario government now has investigating the question of volume discounts is perhaps a response to this kind of concern.
Profit recovery has traditionally heralded a general economic recovery, but profits in the food industry are generally regarded not as an indicator of good things to come but as an indicator of lack of adequate competition.
I would suggest that the most useful thing members of this House who are concerned about food prices could do, is to

February 27, 1979
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support the new competition bill, if they consider as many Canadians do, that the companies do not appear to be operating in a healthy competitive marketplace.


Some hon. Members:: Hear, hear!


Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I want to make a few remarks about this very wise and admirable motion which we have put forward today. I think it is important to have a good memory around this House of Commons. When one hears what is being said today and compares it with things said previously, one just has to laugh.
I cannot help but think back to 1975, Mr. Speaker. Indeed, it really started with the Tory party in the 1974 election campaign when they said they wanted wage and price controls. They said there was an inflation psychology, that wages were chasing prices. Their method of dealing with this wage inflation psychology was to bring in controls. The Liberal party and the Prime Minister (Mr. Trudeau) ran around the country saying controls would not work, and that what the Tories really wanted to do was control the wages of workers. There are many members on the other side of the House who ran their campaigns strictly against wage and price controls.


An hon. Member:: They lied.


John R. Rodriguez: Yes, they lied, Mr. Speaker. People voted for them believing that-


Lincoln MacCauley Alexander: Mr. Speaker, I rise on a question of privilege. I know that the hon. member for Nickel Belt (Mr. Rodriguez) becomes overly excited at times, but I certainly take exception when he says that this party lied. We were honest-


An hon. Member:: He said the Liberals.


Lincoln MacCauley Alexander: I do not know who he was talking about, but I know there was a reflection on me, which I do not accept. Of course, if he was not referring to this party, or these members, then I am wrong, but I hope he will clear it up. If he is saying that the Liberals and the government lied, then I share his views, because that is exactly what happened in 1974.


Some hon. Members:: Shame!


Mr. Deputy Speaker:: I am sure the hon. member would not want the Chair to have two sets of standards. If the word lie is not parliamentary, then it is not parliamentary.


Lincoln MacCauley Alexander: Mr. Speaker, if I have offended anybody, then I will say that during the 1974 campaign the Liberals misled the Canadian people and they were less than honest. I know that is parliamentary.


John R. Rodriguez: Mr. Speaker, I recognize a paid commercial when I hear one. I wish the hon. member for Hamilton West (Mr. Alexander) would not be so sensitive. His turn will come. I will make it very clear to him, when he has uttered a verbal obfuscation. In the meantime, it is members on the other side

who have verbally obfuscated the Canadian people. They told them that if this government were re-elected, there would be no wage and price controls. We know they turned around that Thanksgiving night in 1975 when the Prime Minister said on television that what he was going to do with this program was break the inflation psychology of anticipating further price increases.
I did not hear very much from the government benches today about the price increases which are coming hot and heavy every week to the consumers of this country. They blame labour for fuelling the fires of inflation. They waged a campaign in this country blaming labour for fuelling inflation, and got the public on their side in that kind of witch hunt campaign. The facts are out, however. In 1978 the average weekly wage only increased 6.4 per cent while the cost of living increased 9 per cent, and now we are having another run of price increases.
This evening I spoke to a gentleman in Toronto. He told me that he bought bread at Food City on Gerrard Street in Toronto four weeks ago at three loaves for $1, for a house brand bread. Today he gets two loaves for $1. What justification is there for an increase of 17 cents in the price of a loaf of bread? What justifies the increase in the price of chicken? I was touring my riding yesterday, and I was amazed to hear the Minister of Consumer and Corporate Affairs (Mr. Allmand) on the radio saying that chicken prices went up because there is a demand for it created by the price of beef going up. What is he doing about it?


William Warren Allmand: Increase the supply.


John R. Rodriguez: What does he suggest, Mr. Speaker, that people switch to pork? What happens when the price of pork goes up?


William Warren Allmand: Increase the supply.


John R. Rodriguez: They have all these people on the string, Mr. Speaker. I am amazed at the speed with which an increase in price at the farm gate results in an increase in price at the retail counter. But the other way takes months and months for a decrease in the basic price to be reflected in the retail price.
At the moment prices are rising at the pre-controls pace. But what do we hear? We hear the Prime Minister talking about bank settlements. He said the bank workers are getting settlements which are too big, and that this was inflationary. Can you imagine that, Mr. Speaker? Fancy saying that to the tellers and clerks who work in the banks. I know of a man in my riding who was working for the Banque Canadienne Nati-nale earning $8,760 a year. He has a wife and child to support, but he could not make ends meet. He had to go to the Manpower Office to try to find another job because he could not live on $8,760 a year. And this person should get a 6 per cent increase? These are the friends of the two old line parties; the bankers. They love it when the Prime Minister says that
February 27, 1979

they should hold the line on increases and wages for bank workers.
On the other hand, what about the service charges the banks charge their customers? For example, the Toronto-Dominion Bank increased the interest rate to their Chargex customers to 21 per cent. They did this just by one snap of the finger. Who did they negotiate with? They did not negotiate with anybody. They decided that the price was going to go up to 21 per cent, and that is the way it happened.
I could understand the sensitivity of the Tories, but we do not hear them getting up from day to day talking about price increases. They talk about the falling dollar. They do not talk about price increases. I could understand why the hon. member for York-Simcoe (Mr. Stevens) blames everything on the falling dollar. He does not talk about the banks at all. But the bankers have spoken to his leader about him. I understand there is a little promise that he is not going to be the finance minister should the disaster happen that they form the government. We will see the proof of the pudding tonight, because these Tories are going to vote with the Liberal gang over there.


Some hon. Members:: Hear, hear!


John R. Rodriguez: I say that that in effect shows the Tories are also verbally obfuscating the public. They are not prepared to challenge the corporate sector. The corporate sector must be challenged. And what do I mean by that? I mean in effect that the government instead of standing back on the sidelines and reacting in a neutral sort of way, must involve itself in planning this economy and directing it. It has left it to the multinational corporate sector.
As I observe the scene today, mergers are taking place and the corporate giants are getting larger and larger. They are getting more powerful than those who are elected to govern the country. The corporate sector must be challenged in this country. For example, when Inco made a $300 million net profit in 1973 there was nothing incumbent upon them to invest that profit in Canada. What did they do? They bought a battery company in the United States. They did what they felt was in the best interests of the corporate structure, and they were taken to the cleaners by their stockbrokers. Corporations are not in business to create employment. They are not some sort of social agency to look after the welfare of Canadians. They are there to maximize profits.
It is in the interest of the government to make sure that the resources of this country are so dispersed, so invested as to create a healthy economic climate for our people. We are not the servants of the multinational corporate structures. It is the reverse, and roles have been changed in this place. For example, a cabinet minister takes the same plane with bankers to Toronto. So how do you expect him to take a tough stand with them, Mr. Speaker? What happened to the legislation that would amend the combines act, and the Small Loans Act?


William Warren Allmand: Will you support it when I bring it in next week?


John R. Rodriguez: You bring it in and we will have a look at it.
Unfair Price Increases


William Warren Allmand: That is what you did last time.


Some hon. Members:: Oh, oh!


John R. Rodriguez: This government brought in Bill C-13 which would allow banks to lend money under the Small Loans Act at up to 70 per cent.


William Warren Allmand: It is Bill C-16.


John R. Rodriguez: Seventy per cent was the criminal rate. That is what the government wanted for its banking friends. How could we support that? We said no way. Seventy per cent was the criminal rate at which prosecution takes place.


William Warren Allmand: That is the wrong rate.


John R. Rodriguez: The argument is that the rate must be made high enough for banks to lend money. These are the people who made a billion dollars in profit last year. I am talking about the big five. They have all sorts of money to invest in sound investments in Chile and Guatemala. They really have good credit ratings. And yet the banks do not have money to lend to Canadians at 34 per cent or 24 per cent interest; instead, they wanted 70 per cent. I say to the minister, bring in a bill that is void of all those sorts of give-aways to the corporate sector and we will give it passage.
Where is the bill which demanded that the banks pay interest on a minimum daily balance? As hon. members know, the banks at present only pay interest on the minimum monthly balance, and that is paid on a quarterly basis. Where is the bill? Where is the bill that said that banks must pay on a minimum daily balance?
Where is the bill directing the banks to take part of their portfolios to set aside for the building of homes for low income and middle income Canadians? Where is that? The government does not dare touch the banks. There is a conspiracy of silence in this House of Commons, and the Tories, who are supposed to be the official opposition in this House, are silent on these matters which affect the welfare and the well-being of the Canadian people.
We have been hewers of wood and drawers of water. As long as people in Canada keep electing Liberal governments, or Tories as alternatives, we will continue to be enslaved in that fashion. Look at what is happening with the falling dollar. Sure our raw resources are now very attractive. To balance our accounts this country is going to sell off more and more resources, forever locking us into that pattern of hinterland development. That is shocking and shameful on the part of this government. If it had any guts at all it would plan the economy so that the investment would be directed into those sectors which are job-creating and which hold some future for Canadians.
We are not going to go on ripping nickel out of the ground. We do not have any research and development for copper and nickel in the Sudbury basin, but the price of nickel is going up and so is the price of copper. The price of cobalt is going up too. Who is getting the benefit from these rising prices?

February 27, 1979
Unfair Price Increases
Certainly not the Canadian people, because mining of minerals is capital intensive not job intensive. The job intensive area is in the manufacturing sector.
What kind of planning does the Canadian government have? There is no planning. So as the foreign demand for our resources rose because of the drop in the value of the Canadian dollar, we have to ship more minerals out of the country. The multinational corporations jacked the price up and Canadians pay more as well. We do not have a two-price system.
We do not have a two-price system for lumber. The demand is high because the Japanese want more of our first-class lumber, but Canadians are the ones who pay. Canadians have witnessed a fantastic increase in the price of lumber. That adds to the cost of building a home. However, the friendly banker is right there waiting to give you a mortgage that will be amortized over 40 years. If you wish to retire the mortgage, however, there is a prepayment charge. Where is the bill to eliminate prepayment charges on mortgages?
There is a silent conspiracy. If credit unions can give a no prepayment mortgage, why can the big five not do the same when you retire your mortgage? Why have they hidden that bill? I challenge the Minister of Consumer and Corporate Affairs to bring forward that bill tomorrow, without cooking it up with his banking friends, and we will give it quick passage.


William Warren Allmand: I will remember that.


John R. Rodriguez: We have now reached the stage where Canadians pay these high prices because of the increased prices for lumber. Is there any rationale for that? How can we expect the worker, faced with these increasing prices, to settle for 6.7 per cent or 6.8 per cent? Last year the cost of living rose 9 per cent. Therefore with a 6 per cent increase in wages that worker lost $340 last year. He still has to go to the store to buy these items, and in order to build his home he must pay the same price for lumber as the Japanese. This government is totally and absolutely useless in its approach to this. Consumers are beginning to boycott.
Incidentally, I did not mention the fact that the Economic Council of Canada had Professor Mintz do a study and write a paper. The taxpayers paid for that. What happened? It was not until after 10,000 copies had been printed that it was discovered it was something we should not see. I do not want to get into the cost of that blooper on the part of government agencies for which we pay. What was done about it? I suppose some bureaucrats were paid double time and a half to shred the bloody thing. That paper could have been recycled. With
10,000	reports, which probably averaged 12 pages each, that would be a lot of paper that could have been recycled.
Why was it stifled? I suppose there was a telephone call to the Prime Minister's good friend, Mrs. Ostry. Maybe it came from one of the big five. I was going to say Mr. McLaughlin, but he is a friend of the Tories. I suspect that after the telephone call that paper was taken out of the report, even

though such papers traditionally carry a disclaimer on the bottom.


An hon. Member:: It had a disclaimer.


John R. Rodriguez: That is why it should have been published. In fact, not so long ago the Prime Minister said to my leader that there are always disclaimers on reports by the Economic Council of Canada. Again, that is part of the conspiracy of silence in this country. These two old line parties are committed not to interfere in the economy. Those on this side would get rid of Petro-Canada, the one feeble attempt which this party pushed the government to become involved in in the minority period.


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the hon. member, but his allotted time has expired. He may continue with unanimous consent. Is there consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I believe the motion before the House tonight is deceptive. I think it is cruel and hypocritical. Therefore I will vote against it. It is deceptive because it is designed to appeal to everyone when it speaks of and rightly condemns unfair prices. Obviously in a time of great hardship, high taxes, high inflation, high prices and high unemployment, any unfair price is one of many elements that may be present in our economy which a thinking people and all MPs are against. I do not care what side of the House the member sits on, everyone in this House is obviously against unfair prices.
As a political slogan or a conscientious and compassionate citizen, all of us in this House and every thinking citizen are against unfair prices. All of us are against the very idea of those who may be able to manipulate the marketplace to their advantage and to the detriment of everyone else. Make no mistake about it. These are very general and genuine concerns today. There may well be abuses in the marketplace.
When one goes food shopping, for instance, and sees week after week large increases in some of the food items in the stores and supermarkets, some of them seasonal items but many of them of the non-seasonal variety, any shopper in Canada today has to wonder whether some of the increases can be justified or whether somewhere, in the long and complex food industry chain from basic producer right through to you and I, the ultimate consumer, there is not someone who is using some unseen and unknown advantage to make an undue profit and produce an unfair price.
Just last weekend in the golden horseshoe area of southern Ontario, which has the reputation of having the most competitive supermarket and grocery industry in the country, resulting in the lowest prices for most food items in the country, I had to worry, along with the mover of the motion, when I noticed that a single fresh imported cauliflower cost me, while doing the family shopping, $1.89. That price was mentioned earlier.
February 27, 1979

What was not mentioned was that when I went to buy four unripe tomatoes, it cost me over SI, more than 25 cents each. We are great salad fans. When I went to buy a single lettuce imported from Holland, of all places, it cost me 89 cents. For three Florida grapefruit the price was 99 cents, and at that I think it was a special, 33 cents for each grapefruit. There are other items with which I shall not bother the House tonight. But I hope no one will go away believing that right now the people of Canada are not concerned about high prices, prices which many of them immediately translate, rightly or wrongly, into the proposition that they are unfair prices.
I repeat, however, that I feel the motion before the House is deceptive. It is misleading, and therefore it is cruel to many people who will be taken in by the type of argument we have just heard from one of the members of the New Democratic Party. Why? Because it was based upon the undeniable fact that the prices of many commodities are higher than most of us have ever seen in our lives, and it is easy to believe that those higher prices could be unfair prices.
Why is the motion deceptive? It is deceptive because, after describing the symptoms correctly, after diagnosing the illness in the Canadian economy, it holds out as its shining beacon, as its gleaming hope, as its cure, a solution which is not only incorrect and ineffective but which is unnecessary-a phony answer, a phony solution. What is the solution it proposes? It is the setting up of yet another restrictive board or commission.
I don't care whether it is called an anti-inflation board or a prices review board, or a centre for the study of inflation and productivity; I don't care whether it is called a fair prices commission or an unfair prices commission, it is certainly not the way to cure the sickness in Canada's price structure or in the nation's economy. I suspect the mover of the motion knows this as well as you and I know it, Mr. Speaker. How can you roll back prices unless you roll back profits and dividends?


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: Now we are getting to it. How can you roll back prices unless you roll back costs? How can you roll back prices unless you roll back wages and salaries-


Some hon. Members:: Oh!


Allan Frederick Lawrence: -and materials, labour, energy, the million and one other inputs which finally result in the price paid by the consumer?


An hon. Member:: Spoken like a Liberal!


Allan Frederick Lawrence: To determine what is an unfair price, the prices of all ingredients, all the prices involved, would have to be determined. Whether you like it or not, this process has eventually to become a full-fledged control program, a program of control over wages and costs as well as prices. In my naivete, in my innocence of what goes on here, in my belief that there should be some standards and principles in Canadian politics, I thought that the New Democratic Party,
Unfair Price Increases
mainly at the urging of organized labour, was against programs of that type. But here they are, contrary to the expressed wish of the Canadian Labour Congress, the UAW, the steelworkers, CUPE and many others in the organized labour movement, defending a policy which has not worked in the past and which will not work in the future, either.
The mover of the motion says his commission could be operated by five or six board members using existing staff from government departments. That is nonsense. It is as inane as the speech we heard from the Prime Minister (Mr. Trudeau) during the debate leading to the setting up of the Anti-Inflation Board when he said the board would remain a small agency employing about 200 people. As we all know, by the spring of 1978 the staff of the AIB had grown to more than 1,000. And it didn't work. It didn't work then, and it certainly cannot work today.
Let us get back to those imported cauliflowers, to those lettuce imported from Holland. How about those tomatoes, those grapefruit? The hon. member may laugh, but these are one of the biggest factors in the jump in food prices over the last few months. Would a Canadian government board be able to arrive at the truth when examining the chain of items accounting for the high cost of imported food? Even if it did, would it be able to do anything about it? I cannot believe that even the members of the New Democratic Party take the view that it could. It would be powerless in respect of these imported items and, this being the case, it would become nothing more than a phony facade behind which the real culprit in this whole mess, the present government with its lack of fiscal and economic policy, could hide and take shelter.
Let me take hon. members back to a debate which took place on September 13, 1973. Speaking in this House in a debate on food policy, the hon. member for Oshawa-Whitby (Mr. Broadbent) said, and I quote him, that controls had been "an utter disaster" and that wherever they had been tried they had failed. They were, he said, merely a "convenient political gimmick." I say to you, sir, that the NDP motion before the House today is precisely that. It is a convenient political gimmick because, if they cannot nationalize a thing, they want to set up another board to oversee it. That is their answer to everything.


Some hon. Members:: Oh, oh!


Allan Frederick Lawrence: There is one thing I can honestly say I have not heard from them. They have not advocated setting up "FoodCan" or "GroceryCan" in an effort to control the industry.
What is the cause of the high prices of almost everything which is imported-food, cars, energy, textiles? Don't take my word for it, let's see what the latest of these ineffective expensive boards and commissions that both the government and the NDP are so fond of setting up, says. Within the last few days the Centre for the Study of Inflation and Productivity said in its own publication, "The Monitor":
Canada has experienced more inflation because of the depreciation (of the Canadian dollar). By the end of 1978, the CPI was 6V: per cent higher than it

February 27, 1979
Unfair Price Increases
would have been without the dollar depreciation. So the dollar decline has been responsible for about one-third of the total inflation measured by the CPI in this two-year period. In 1978 the CPI rose 9.0 per cent from the year before. Without depreciation of the dollar the increase would have been about 6 per cent.
Liberal member after Liberal member can rise in his place and say, as we heard earlier today, that the fall of the dollar- Canada's sinking dollar, not Canada's floating dollar-is a good thing for Canadians. Because of the large amount of imported foods, imported goods and imported materials we have to import, the drop in the dollar has added one-third, on the average, to the total inflation from which this country is suffering. Those cauliflowers, those tomatoes, that lettuce and that grapefruit would have had one-third cut off their normal seasonal price increase if Canada's dollar had remained constant.
What would another board or commission be able to do about the dollar's drop? Would it roll back the value of the dollar to parity or to where it should be? Would it prosecute the Government of Canada for imposing high taxes, causing loss of investor confidence, the high cost of government, the bungling of an inept Minister of Finance (Mr. Chretien) or the inability of the Prime Minister to control his bureaucracy or his policies, all of which have added to this country's shaky dollar dropsy? Of course, no Canadian board or commission would be able to do that. Earlier today we heard from the Lord High Poobah of economic ministers. His post was set up, I suspect, because the Prime Minister really did not have the political courage to fire the Minister of Finance. The President of the Board of Economic Development Ministers (Mr. Andras) says that CSIP is going to have increased monitoring powers. Big deal! With all the force I can muster I say that tinkering with government commissions and playing around with government boards will not cure the illness the government has caused in this country. Substituting a board or commission for the work and jurisdiction of an incredibly weak Minister of Consumer and Corporate Affairs (Mr. Allmand) also will not do it. The only answer is a clean, fresh broom.


Some hon. Members:: Oh, oh!


Allan Frederick Lawrence: The only answer is an election. Lord knows we have tried, but we cannot possibly change the attitude and the policies of this government, and we cannot change the effects of having a bunch of bungling government ministers. If we cannot change their policies, opinions and characteristics, the obvious answer is to change the government.


Some hon. Members:: Hear, hear!


Mr. Alan Martin (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, as I rise in the closing minutes of this interesting debate I must first make some reference to the closing remarks of the hon. member for Northumberland-Durham (Mr. Lawrence). He spoke about illnesses in the economy, and I think we all accept that there are certain areas, particularly unemployment, where indeed we do have

problems. We recognize that, but the hon. member talks about illnesses, and his financial spokesman recommends a deficit which would be 50 per cent greater than the one we already have. The hon. member did not tell us about what that would do to our balance of payments and to our exchange rate.
It was interesting to hear from the hon. member for York-Simcoe (Mr. Stevens) tonight. The hon. member seems to have toned down somewhat with regard to an increased deficit. He tells us now that he is not in favour of higher deficits. Other financial critics are, but he is not. He indicated earlier that he is quite happy with a 2 per cent growth rate. He commended the British Labour government for realizing the kind of growth rate it can expect in coming years. Earlier today he was criticizing Canada for having achieved a 3.4 per cent growth rate last year. However, that is typical of the varying opinions we hear from time to time from the variety club of five financial critics opposite.
The basic subject of the debate which has been going on here today has been the matter of inflation and its effect on families. We on this side obviously welcome such a debate because in recent years inflation has been an overriding concern of this government. The policies of the government have been directed toward bringing it under control while minimizing the adjustment costs to the economy.
We all recognize that there have been some setbacks, chiefly the result of elements beyond our domestic control, but they are being met and overcome. We still have a long, hard haul ahead, but this is a time for confidence and not gloom. In fact I believe that a mounting sense of confidence is now apparent in our economy, if not on the benches opposite.
I would like to move for a moment to the matter of food prices because I think that is the paramount issue on the minds of Canadians at this time, bearing in mind that the big increase in the rate of inflation last year was due in large part to increases in food prices. The hon. member for Nickel Belt (Mr. Rodriguez) referred earlier to increases in wages, and 1 think it should be noted that increases in the non-food sector were about in line with average figures for the increases in wages he mentioned.
Food prices are extremely sensitive to increased costs for energy, transportation and labour. The rate of increase in the total cost of living for non-food items has been considerably less than for food and has been trending downward until very recently. At the same time, over-all increases in average annual wage settlements have been on a distinct upward trend. As a result, the number of hours of work required to feed a family has continued to decrease remarkably. Recent price increases, though substantial in percentage terms, are less striking in terms of actual dollar costs for average annual consumption. The present upward movement in prices does not reflect a general pattern of profiteering by farmers, producers or retailers. On the contrary, no element of the food system has secured a rate of return higher than its historic average. Some of these points were made earlier this afternoon in the address by the President of the Board of Economic Development Ministers (Mr. Andras), but some of them need to be repeated.
February 27, 1979

More than one-third of the rate of increase in food prices reflects cyclical shortages in certain products, weather conditions and crop failures which are unusual and unavoidable.
Another third of the rate of increase in food prices reflects, as has been mentioned earlier today, the devaluation of the Canadian dollar, reductions in subsidies as a result of government restraint and supply management directed at ensuring reliable and stable domestic sources of supply, all of which are policies with more than offsetting advantages to Canadians in terms of increased employment, reductions in government expenditures and sound markets.
While the causes of increased food prices are therefore defensible and unavoidable, the government has been concerned about protecting the poor and the aged from their effects. To this end the government has modified the child tax credit program and increased the guaranteed income supplement in addition to the protection already afforded by indexing to these groups and to recipients of unemployment insurance and social assistance. Further measures to deal with food price increases are under review, but the government is determined to avoid steps which, in order to achieve allusory short-term improvements, in fact add to the bureaucracy, create inefficiencies, build in unacceptable longer-term costs, and simply tend to shift price burdens for consumers from one visible area to other less visible ones.
With regard to profits in food and beverages processing compared with all manufacturing for the years 1975 to 1978 there are a few points which perhaps should be registered. Food industry profits as a percentage of sales are lower than for all manufacturing. If the alcoholic beverage industry is deleted, the Department of Consumer and Corporate Affairs estimates the profits to be 4 per cent of sales, which is slightly higher than the 3.3 per cent estimated by the AIB for the first three-quarters of 1978. Profits as a percentage of equity for all manufacturers vary slightly from those of food and beverage processors. From the low point in 1976 the ratio of profits to equity in all manufacturing grew by 20.7 per cent, while that for food and beverages grew by only 13.4 per cent. For retailing, AIB sample data can be compared with Statistics Canada data for 1975 through 1977.


James Aloysius McGrath: Don't read that stuff, Alan. You can do better.


Alan Gray Martin: Some of these statistics are important. We see that pre-tax profits as a percentage of sales for all retail profits are 2.6 per cent, and for food are 1.8 per cent.


An hon. Member:: Who is the author?


Alan Gray Martin: I think the conclusions need to be noted. I know that the official opposition does not like to hear these statistics any more than does the NDP.


Some hon. Members:: Oh, oh!
Unfair Price Increases


An hon. Member:: We don't like to read the department's briefs.


Alan Gray Martin: The following conclusions may be reached: Profits as a per cent of sales are lower in food than for all retailing.


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order, please. The parliamentary secretary has the floor for the purpose of making a speech. I suggest we all listen.


Alan Gray Martin: Second, retailers in food receive higher returns on equity than for all retailing. Food retailers have experienced a more rapid recovery from the low profit levels of 1976 than other retailers. Though profits have recovered from the 1976 low, the share of the consumer food dollar retained by retailers is still around 4 cents.


An hon. Member:: You read very well.


Alan Gray Martin: The only reason I read these statistics is that they are important to the Canadian public as they listen to the kinds of arguments put forward by the NDP and their motion. If we are going to rebut that kind of motion it is important, I suggest, that the rebuttal be based on facts, and these are facts that need to be noted.


Some hon. Members:: Hear, hear!


Alan Gray Martin: The real key, as mentioned earlier today on this side, to controlling inflation, is indeed a strong and growing economy functioning under responsible monetary and fiscal policies, one thing that the Canadian public would be sure not to have, if they ever made the fatal error-which I am sure they will not-of putting people in the official opposition in power.
Recently the executive of CSIP wrote to the major coprorations for additional information on cost and prices to expand its work of analysis.
Hon. members will recall the decision taken a year ago with federal and provincial governments to hold down the growth of their spending below the growth rate of GNP. Again I want to repeat that the premier of Saskatchewan, a staunch member of the NDP, was not in favour of any stronger mechanism than the type of organization that was brought into effect with CSIP in this area, and I think it is important that federal members of the NDP appreciate that point.
The President of the Treasury Board (Mr. Buchanan) presented his main estimates for the Fiscal year which begins next April 1. They show an increase in federal outlays of 8.9 per cent over the current fiscal year. This will be significantly below the growth of the GNP for 1979-80, now expected to be somewhere around 11 per cent.
Just four years ago, the federal spending amounted to 21.7 per cent of the GNP; for the coming fiscal year it will be down to 19.9 per cent. Meanwhile there are other strong influences at work stimulating the private sector activity. Probably the

February 27, 1979
Unfair Price Increases
most important is the marked improvement in our international competitive position which has occurred in the last four most important is the marked improvement in our international competitive position which has occurred in the last four years, largely due to the impact of AIB and its ability to control the runaway type of inflation which we were experiencing in late 1975.
We have brought our domestic costs down at a time when the external value of the Canadian dollar has declined. We have seen a dramatic gain in jobs. Figures have been stated over and over again showing some 450,000 new jobs in the last 12 months. We are the only country in the industrialized world to have a year over year increase in new jobs since the OPEC crisis in 1973.


Some hon. Members:: Question.


An hon. Member:: This is a recording. Nobody believes you.


Alan Gray Martin: I am confident that the real growth this year will be in excess of the 1978 rate, which turned out to be about 3.4 per cent as confirmed by-


The Acting Speaker (Mr. Turner):: Order, please. It being 9.45 p.m. it is my duty to interrupt the debate and put forthwith any questions necessary to conclude the proceedings now before the House, in accordance with section 9 of Standing Order 58.
AH those in favour of the motion will please say yea.


Some hon. Members:: Yea.
All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Turner):: In my opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Turner):: Call in the members.


Mr. Speaker:: I declare the motion lost. It being after ten o'clock this House stands adjourned until tomorrow at two o'clock.
At 10.14 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, February 28, 1979