1979-02-12

ROUTINE PROCEEDINGS


Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, pursuant to the provisions of Standing Order 43, I rise on a matter of urgent and pressing necessity.
In view of the fact that internal bickering by Hockey Canada and the Canadian Amateur Hockey Association has caused postponement of the scheduled Canada Cup series this fall, and because this announcement comes on the heels of the impressive Soviet victory over the NHL, thereby creating a somewhat non-sportsmanlike impression around the world, 1 move, seconded by the hon. member for Hastings (Mr. Ellis):
That this House not only compliment the Soviets for their brilliant Challenge Cup Victory, but instruct the Minister of State (Fitness and Amateur Sport) to take all necessary action in resolving the differences between the two hockey bodies which fall within her jurisdiction, namely, Hockey Canada and the CAHA, in order to give Canadians the opportunity to recreate the emotional and unifying Canada Cup series of the past, as scheduled.


Mr. Speaker:: Order, please. The congratulatory part being secondary, as it is, I will ask whether there is unanimous consent of the House for the presentation of this motion.


Some hon. Members:: Agreed.


Some hon. Members:: No.


GRANTS FOR DEVELOPMENT OF AMATEUR HOCKEY-MOTION UNDER S.O. 43
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise, under the provisions of Standing Order 43, to make a similar motion under the same subject.
In view of the results of last night's hockey game in New York between the Soviet national team and the NHL AllStars, and in view of the government's offer to squander some $18 million on privately-owned professional hockey teams, I move, seconded by the hon. member for Regina-Lake Centre (Mr. Benjamin):
That this $18 million give-away be withdrawn and be replaced with additional funding for genuine amateur hockey coaching which would include a close study
of the Soviet and European hockey programs; and, further, that a special award be given to Mr. Roger Doucette for winning the battle of the national anthems.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL UNITY
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker,
I rise, under the provisions of Standing Order 43, to move a motion of urgent and pressing necessity.
In light of statements by the Prime Minister (Mr. Trudeau) which warned that the loss of Quebec would spell the loss of Canada, and considering the contradictory nature of those statements when compared to recent remarks by the Minister of State for Federal-Provincial Relations (Mr. Reid) and the Minister of Supply and Services (Mr. De Bane) whose comments suggested that if a strong majority of Quebeckers voted for separation, the Liberals would have no choice but to let Quebec go, which again appear diametrically opposed to remarks by the Secretary of State for External Affairs (Mr. Jamieson) who said that the government would not negotiate sovereignty association, I move, seconded by the hon. member for South Shore (Mr. Crouse):
That this House direct the government to clarify these contradictory statements by various ministers which breed uncertainty and lend legitimacy to the separatist cause in Quebec.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


STATISTICS CANADA
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I rise, under the provisions of Standing Order 43, to move a motion of urgent and pressing necessity.

February 12, 1979
In view of the announcement by Statistics Canada that they will no longer publish the wholesale price index, which is the leading indicator of the cost of living trends in the Canadian economy, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House condemns the federal government for blatantly attempting to cover up any embarrassing figures reflecting its failures to deal with inflationary trends prior to the federal election, and calls on the government to reinstate this very important survey.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC WORKS
Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing importance.
In view of the fact that the Department of Public Works are planning a further demolition of sound, usable buildings at Fort Churchill, and in view of the fact that over $1 million has been spent on the demolition of usable buildings at Fort Churchill over the past three years, I move, seconded by the hon. member for Selkirk (Mr. Whiteway):
That the government cancel plans to demolish the remaining buildings at Fort Churchill, and that these buildings be turned over to the local government district of Churchill for their future use.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, under the provisions of Standing Order 43, I rise on a matter of urgent and pressing necessity.
In view of legal action taken by the Minister of Transport in 1977 against Southstar Publishers Ltd. concerning a feature article on him in the Canadian Magazine, which article was not read in Saskatchewan because the minister threatened the Regina Leader-Post and the Saskatoon Star-Phoenix, who did not carry the offending magazine, and the obvious threat

to freedom of information this action involved, I move, seconded by the member of parliament for Calgary Centre (Mr. Andre):
That the minister explain on motions why he has not proceeded to trial with the action, despite filing of the defence in February, 1978, a year ago, and explain further how any article could have lowered any further his reputation in the estimation of right thinking people.


Mr. Lang:: A point of order, Mr. Speaker-


Mr. Speaker:: Order, please. The hon. member for Regina-Lake Centre (Mr. Benjamin).


CANADIAN WHEAT BOARD
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I also have a motion under Standing Order 43 concerning the same minister, but it has nothing to do with bluffs; it has to do with policy.
In view of the fact that right now the Canadian Wheat Board is obtaining for farmers 58.5 cents per bushel more for barley, and 65 cents per bushel more for feed wheat, than the private enterprise open market, and in view of the fact that if all domestic feed grains had been handled by the board during the first four months of this crop year, $60 million more would have been put into the pockets of prairie farmers, I move, seconded by the hon. member for Yorkton-Melville (Mr. Nystrom):
That the minister responsible for the Canadian Wheat Board, who took feed grain marketing away from the board, return feed grains to the sole jurisdiction of the Wheat Board.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. Jack Hare (St. Boniface):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity.
In view of the fact that the Canadian Wheat Board has calculated that another 10,000 grain hopper cars will be required for the delivery of western grain by 1985, and in view of the fact that previous contracts for the manufacture of hopper cars have gone overwhelmingly to firms located in central and eastern Canada, I move, seconded by the hon. member for Selkirk (Mr. Whiteway):
February 12, 1979

That the CNR repair yards in Transcona, Manitoba, be upgraded to enable the manufacture of at least some of these required hopper cars, in the interest of creating linkages to the grain industry on the prairies where the grain is grown.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CANADIAN ECONOMY
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to move a motion dealing with an extremely urgent motion of pressing necessity.
In view of the fact that the Government of Canada has obtained from a syndicate of American and European banks a credit margin of $3.5 billion whose security is based on the productive capacity of Canadians and considering that such financing operations in the public sector make our debt heavier from year to year, something which cannot go on without dangerously affecting our national economy and prosperity and jeopardizing the survival of generations for whom we are now sacrificing ourselves, I move, seconded by the hon. member for Roberval (Mr. Gauthier):
That, as a solution to that serious problem, the Minister of Finance introduce in the House a bill aimed at amending the Bank of Canada Act to enable it to grant long-term loans to federal and provincial governments, such loans being based on the real credit of the country, as is the case for the security of loans granted by chartered banks in Canada and by foreign banks, but whose excessive interest rate is burdening the country for generations to come and compelling Canadians to reimburse $5 in capital and interest for each $1 borrowed, and that those loans be granted at a rate equivalent to administration costs.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions



ORAL QUESTION PERIOD


Mrs. Jean E. Pigott (Ottawa-Carleton):: Mr. Speaker, I ask the Minister of State for Urban Affairs whether any studies have been done on the feasibility of assisting underdeveloped countries through the export of prefab shelters, particularly in light of our Habitat experience and the Habitat desk at MUSA following our international commitments at Habitat.


Hon. Andre Ouellet (Minister of Public Works and Minister of State for Urban Affairs):: Mr. Speaker, a series of studies have been made in relation to Habitat. I will have to check to find out if there is a specific one on this subject. As you know, Mr. Speaker, this conference took place some years ago, the preparatory work for it is now about five or six years old, so I will have to refresh my memory on this matter.


Jean Elizabeth Pigott: Mr. Speaker, the minister knows that under the conflict of interest guidelines affecting public servants, it is also obligatory to take great care to avoid the appearance of conflict of interest.
Would the minister give an assurance to this House that Mr. William Teron, in his dual capacity as chairman of Central Mortgage and Housing Corporation and as president of an international prefab company, will not be given preferential treatment by his ministry?


André Ouellet: Yes, Mr. Speaker, indeed. The guidelines are there, and we will make sure they are obeyed.


CENTRAL MORTGAGE AND HOUSING CORPORATION
Jean Elizabeth Pigott: Mr. Speaker, in a recent paper there was a statement made by Mr. Lorenz Schmidt, the assistant secretary to the minister, who said:
I'd hate to see an audit on all things ordered by cabinet.
In view of the alarming reports of millions of dollars being wasted, lost or stolen, is the minister prepared now to make an immediate reference to the standing committee to investigate these reports, or to call in the Auditor General?


André Ouellet: Mr. Speaker, I do not know what object or product the hon. member means when she says that some objects were lost or stolen. The only thing I know is

February 12, 1979
Oral Questions
that some documents, prepared by civil servants in my department, are transferred as if by magic into the hands or some Conservative members. I shall be pleased if she can help me find them again.


COMPENSATION FOR FAULTY WORKMANSHIP UNDER AHOP
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I would like to ask a question of the Minister of State for Urban Affairs with respect to some of his domestic responsibilities.
Earlier in this House, under repeated questioning with respect to faulty inspections and the use of inadequate building materials in AHOP projects-specifically under the AHOP project at Virginia Park in St. John's-the minister said many times that CMHC is only responsible for inspections to ensure construction process for mortgage purposes. Yet, according to a confidential document prepared for the minister and CMHC, this statement is made:
Provision of insurance entails appraisal and inspection of units and this served to provide a kind of guarantee to purchasers on the quality and workmanship of these units.
I ask the minister if this assurance to the purchasers on quality and workmanship with respect to AHOP units applies to the unfortunate people who bought AHOP houses in Virginia Park and now find they have depreciated in value because of deteriorating brick and inadequate inspection.


André Ouellet: Mr. Speaker, in relation to the people who live in Virginia Park, an offer has been made to them in an amount sufficient to repair deficiencies. These disbursements will be made as repairs are carried out.
The increase in the monthly payment which will eventually occur will be delayed for a number of months to make it easier for these borrowers to repay the amount. Therefore, the net increase in monthly payments will be postponed until the end of the first five-year loan. With regard to these people, a concrete offer has been made to help solve their problems.


James Aloysius McGrath: The minister is all heart, Mr. Speaker. These people have, rightly, declined that offer because on a house that has depreciated in value their liability would increase by increasing the mortgage. Therefore, they turned it down.
Virginia Park is merely the tip of the iceberg: we know of other faulty inspections and faulty materials being used in AHOP projects across the country. The minister will have to face up to this sooner or later. People in Virginia Park, through their solicitor, have rightly declined this offer which would merely add to their liability.
What are the minister and the department prepared to do for the people who bought these houses through CMHC in good faith, with the assurance they had had adequate inspection? The houses have now deteriorated because of inadequate inspection and because of faulty brick. We know there is an

investigation under way into allegations of pay-offs respecting CMHC inspectors. What is the minister going to do for these people. Why does he not tell us now, instead of giving us all this rhetoric?


André Ouellet: Mr. Speaker, there are basic errors in the remarks of the hon. member, which was not a question at all. First, he stated that these houses had been bought through CMHC. That is absolutely untrue. Second, he said there has been wrongdoing by some officials of CMHC. I think he is too quick in his conclusion. The investigation is not complete. Everyone should have the opportunity of a fair trial before being condemned, and not as the hon. member is trying to imply. Third, the hon. member gives the impression that this is only the tip of the iceberg.
During the last 15 years, housing worth millions of dollars has been built under guarantee by CMHC. This program has been a success all over Canada. Because there is a small problem in one project, we should not do as the hon. member is trying to do and create the impression that these homes built with the assistance of CMHC are bad and our program should be reprehended.


THE CANADIAN ECONOMY
David Orlikow: Mr. Speaker, my question is to the Minister of Finance. In view of the fact that the wholesale price index, which is the leading indicator of cost of living trends in the economy, published on Friday showed a 12.5 per cent increase, can the minister indicate why the government at this time, prior to a federal election, is cancelling this very important index reflecting cost of living trends in Canada?
[ Translation]


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, that question concerning Statistics Canada should be directed to my colleague the Minister of Industry, Trade and Commerce. I shall inquire and give an answer to the hon. member.


David Orlikow: Mr. Speaker, I know Statistics Canada comes under another minister, but it is the Minister of Finance who has the greatest responsibility for what the government does about the economy. This is the second important index that is being cancelled by the government, the other being the job vacancy survey.
In view of the importance of evaluating both unemployment and price trends in the economy, why is the government cancelling these important surveys just prior to a federal election?


Joseph Jacques Jean Chrétien: On the first part of the question, Mr. Speaker, a great deal of explanation has been given in this House
February 12, 1979

with regard to the labour survey. We are provided with very good information by Statistics Canada. Sometimes the information makes it difficult for us, like everybody else, but we have to live with that. We do not want to hide anything; we want to discuss all aspects of the problem.
I hope that one day some members will report to the House some of the good statistics that come from Statistics Canada, such as the fact that we created 450,000 new jobs in the last 12 months.


David Orlikow: The wholesale price index rose half a per cent in December and was 12.5 per cent higher than in December, 1977. Can the minister indicate what action he intends to take, in view of the fact the minister provided $1 billion in sales tax reductions in his last budget, which should have meant a decrease in the wholesale price index and not windfall gains for Canadian business?


Joseph Jacques Jean Chrétien: I am very pleased with the question, Mr. Speaker. If the hon. member is saying that the half billion dollars' tax cut was not good, I remind him that the program of the NDP recommended $2 billion.


RATE AT WHICH CANADA OBTAINED LOAN OF $3 BILLION FROM AMERICAN AND EUROPEAN BANKS
Joseph Adrien Henri Lambert: Mr. Speaker, my question is for the Minister of Finance who has now become the most important minister in light of the present economic situation of Canada. Could he tell the House the rate of interest on the loan of more than $3 billion Canada has obtained from an American or European bank consortium and against what collaterals did the country obtain such a credit margin?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have obtained that $3 billion credit margin from two groups. First from a Canadian group, but in American dollars, second from international banks under the leadership of an American bank. We obtained those loans by accepting to pay a certain rate of interest to maintain that credit margin, a rate I mentioned several times in the House. I do not have it here but I could provide it to the hon. member along with the collaterals we have given to our creditors. These of course are always the same, that is to say the country itself. That is the very best guaranty we can offer. Canada's credit is excellent everywhere in the world.


Joseph Adrien Henri Lambert: Mr. Speaker, I have a supplementary question. The minister has just given a formidable reply, except that he forgot to mention the interest rate, and Canadians will certainly wonder whether it is 10, 9 or 8 per cent. Of course the minister need not quote interest rates from memory, but in view of the fact that at the same time the province of Quebec, through Mr. Parizeau, its finance minis-
Oral Questions
ter, has obtained a credit margin of several hundred million dollars, could the minister indicate to the House whether this credit margin from the same banks, from the same American or European consortium, has been granted with the same guarantees which the minister has just spelled out.


Joseph Jacques Jean Chrétien: Mr. Speaker, the government of the province of Quebec goes to the market like all the other provincial governments, and it borrows money from bankers which are constantly offering loans to Canadian institutions based on their credit ratings; I think that the interest rates paid by the provinces and especially by Quebec are higher than that paid by the federal government; to reply to the first question, I should add that as a rule the interest rate is already set when we borrow the money and that the interest rate in the case of international loans was less than half of one per cent over the rates charged by London banks.


Joseph Adrien Henri Lambert: Mr. Speaker, in view of the importance of the question, which you recognize as such since you allow me to ask a little supplementary question, I would like to ask the Minister of Finance if he could tell the House, since the government of Canada gets loans based on the Canadian credit and the government of Quebec also gets loans based on Canadian credit-can he tell us earnestly, I would like an earnest answer, whether it would not be advisable for our country to use profitably our Canadian bank, the Bank of Canada, to finance our country's credit at a lower interest rate than we have to pay when we have it financed by foreign banks. Would the minister be prepared to examine seriously that suggestion with a view to introducing legislation to amend the Bank of Canada Act and allow the bank to play this role at a lesser cost than we pay to foreign banks?


Joseph Jacques Jean Chrétien: Mr. Speaker, the hon. member is proposing the theory his party has been advocating for a long time, that it would suffice to print money for all problems to be settled across the country. We have had the opportunity to discuss it very often since 1962, and I think the system proposed by the hon. member could not work in the present circumstances. No country in the world uses its national bank for that. When money is printed that way, the direct result is a very swift increase in the inflation rate.


AGRICULTURE
Mr. John Wise (Elgin):: Mr. Speaker, my question is directed to the Minister of Agriculture, and its purpose is to establish the progress or lack of progress the minister has made on developing a national food strategy or a national food policy.

February 12, 1979
Oral Questions
About a year ago, the Minister of Agriculture and his colleague, the Minister of Consumer and Corporate Affairs, left at least the impression that great achievements and great accomplishments would be made toward the development of a national food policy. Since that time there appears to have been little, if any, progress. What action, if any, has been taken toward the development of such a strategy or policy which would encourage the growth and development of Canadian production, Canadian processing and Canadian distribution?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I am a little surprised at the hon. member's question because the question period does not give me the time I would need to deal properly with this question. I could cite to the hon. member about five pages of action we have taken as a result of what the food strategy conference said we should do. I believe that over half the requests made by those at the strategy conference have been put into action.
If the hon. member wants me to do so, I can have my office bring the five pages to me so that I can read them to him; or I could send them to him.


John Wise: Mr. Speaker, I would be satisfied if the minister would just give me one or two quick examples.


Mr. Speaker:: Order, please. The hon. member for Lisgar.


CHAIRMANSHIP OF NATIONAL FARM PRODUCTS MARKETING COUNCIL
Mr. Jack Murta (Lisgar):: Mr. Speaker, I would like to direct a question to the Minister of Agriculture. Knowing the minister's opposition to anyone outside the immediate farm community playing a prominent role in farm policy decisions, was it the minister's own decision to remove Mr. Paul Babey from the chairmanship of the National Farm Products Marketing Council and to replace him by Mrs. June Menzies, formerly of the Anti-Inflation Board, and is this part of the government's over-all food strategy proposals?


Eugene Whelan: Mr. Speaker, one of the things we said we would do was put people from other parts of society on the National Farm Products Marketing Council. Mrs. June Menzies is from the province of Manitoba, another part of Canada. She has knowledge both of agriculture and of the consumer sector. I had a meeting with Mrs. Menzies this morning about the program of the National Farm Products Marketing Council.
Mr. Paul Babey, the former chairman of the National Farm Products Marketing Council, has a tremendous history of service to the rural community of Canada and to our whole society. He will make a tremendous contribution in the Farm Credit Corporation which is going through a reorganization at the present time. The knowledge Mr. Babey has will not be lost; it will be helpful to the agricultural industry in Canada and all around the world.


Jack Burnett Murta: Mr. Speaker, it is widely known that a national chicken marketing agency will be announced only after changes to the National Farm Products Marketing Council. That is the reason Mrs. Menzies is there, and that is also why Mr. Babey is in a different position.
Since the changes imply incomptence on the part of the marketing officials, and certainly some failure in terms of the minister's own policies, can farmers in this country assume that until an election is called, agricultural policy will be made in the office of the Minister of Consumer and Corporate Affairs and not in the Department of Agriculture?


Eugene Whelan: Mr. Speaker, the hon. member makes many accusations and insinuations which are not true, because the chicken broiler people themselves could not agree on how many of them should join. I am sure the hon. member is happy that Manitoba saw fit to join on about the last day before the meeting was called here. I met with all representatives when they were in Ottawa. The hon. member should also have met with them: if he had, he might understand that they are not as unhappy as he tries to imply.
I am just saying that this organization will go ahead. It will be as healthy as the Canadian Egg Marketing Agency, which is one of the most successful marketing agencies in the world at this point. The cost of eggs has contributed less to the inflationary factor than the cost of nearly any other food we eat in Canada.


POSSIBILITY OF NORTH AMERICAN COMMON MARKET
Mr. F. A. Philbrook (Halton):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce.


John Carnell Crosbie: He is not here; he is never around.


Mr. Speaker:: Order. The hon. member for Halton.


Frank A. Philbrook: My question is directed to the Minister of Energy, Mines and Resources. Recently, in the New York Times, Mr. James Reston indicated that the President of Mexico told him that he will discuss with President Carter the possibility of a North American customs union or a common market.
Considering that our three North American countries, Canada, the United States and Mexico, can help each other a great deal in terms of energy, economic development and population work, can the minister indicate whether any such discussions are going on and whether he considers this to be a good idea and a constructive approach?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources and Minister of State for Science and Technology):: Mr. Speaker, I am not aware of any discussions going on with respect to a customs union or a common market: I think those were the phrases used by the hon. member. Nor am I aware of

February 12, 1979

any discussions with respect to a common market in energy, which might be part of the reason the question was asked.
There may be an interest in some quarters in the United States, but I think Canadians would want to be very chary about getting into any discussions on that kind of proposal because it seems to me that such a proposal would perhaps be no more than a disguise for a continental energy policy of a different kind.


AGRICULTURE
Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, 1 have a question for the Minister of Agriculture respecting the production of white beans under irrigation in southern Alberta. White bean production there on irrigated lands is new and very promising.
In view of the fact that bean producers there are very conscious of the recent stabilization pay-out in southwestern Ontario for reasons which also exist in the west, namely, low yields, spoilage losses due to bad harvest weather, and low prices, will the minister now authorize the same stabilization pay-out to white bean producers in southern Alberta?


Eugene Whelan: Mr. Speaker, the hon. member brought this matter to my attention in a conversation last week. 1 have asked for a report from the stabilization board. I have not received a formal report, but 1 have received a verbal report to the effect that we have never paid on seed beans, and there have never been any formal requests about which I know. That is the information I received in a verbal report, which might be incorrect.
When I receive a written report, I will let the hon. member know; but the information I have given was the information as of this morning at about nine o'clock. I have not been able to check this matter further.


Herbert Thomas (Bert) Hargrave: Mr. Speaker, it is my understanding that there has been a pay-out in southwestern Ontario for white navy beans. So far, a similar pay-out for the same type of beans has not been authorized for southern Alberta. Also, there has not been an authorization for other varieties such as Pintos, Great Northern, and so forth.


Eugene Whelan: Mr. Speaker, I am sure the hon. member knows that there never is a pay-out unless an official request comes from a particular province or from a producer organization. 1 will have to find out whether an official request has been made. But I point out that it is not uncommon that payments are not made if returns from different areas meet the formula used by the stabilization board.
Just because there is a pay-out in one place does not mean that there automatically will be a pay-out in another region. We recently made payments for potatoes in the maritimes, but
Oral Questions
no payments were made for potatoes in central or western Canada. A payment was made in British Columbia because the price received by producers there was below the price set by the formula used by the stabilization board.


TRANSPORT
Mr. Arnold Malone (Battle River):: Mr. Speaker, 1 should like to put a question to the Minister of Transport. As the minister is aware, the Canadian Wheat Board has purchased a number of grain hopper cars. Has he checked fully the authority of the Canadian Wheat Board to make those purchases, and can he tell us whether or not there is any limit to the number of hopper cars that could potentially be purchased under whatever system there is authority to do so?


Otto Emil Lang: Mr. Speaker, the question of their authority was checked both by the board's legal advisers and by government legal advisers as related to the kind of activity involved, and obviously is not related to any specific number.


Arnold John Malone: Mr. Speaker, I put my next question to the same minister, in great concern for the use of farmers' money.
I should like to ask him what distinction might be made between the hopper car, the freight engine that pulls it, the railway beds on which it runs, or the terminal ports to which they deliver. In other words, simply put, can the Canadian Wheat Board use all the farmers' money potentially to purchase anything it wants for the use of hauling or servicing of the grain industry?


Otto Emil Lang: The answer to that question is no, Mr. Speaker; and, of course, it is completely out of the context of any reality to put it, except perhaps to create worry.
The fact of the matter is that in this particular instance, when there was an argument among reasonable people about whether or not there was the right number of cars or slightly less than the right number of cars available in late 1979 and into 1980, the Wheat Board concluded it was better from the point of view of the farmer to be on the safe side in order to have cars, particularly for the three key months of June, October and November. They may save as much in demurrage charges at that time or in the ability to make spot sales in the annual cost of these cars, and that is the reasoning they employed. I am sure that they and I would want to insist in general upon the obligation of the railways to provide adequate equipment to carry the goods.

February 12, 1979
Oral Questions


PROPOSAL OF CANADIAN WHEAT BOARD FOR ADDITION OF 10,000 HOPPER CARS-GOVERNMENT POSITION
Leslie Gordon Benjamin: Mr. Speaker, on the same subject, I have a question for the minister in charge of the Canadian Wheat Board, and I use the word loosely.
Since the Canadian Wheat Board has made a proposition that 10,000 new hopper cars have to be added to the grain fleet during the next six years, and the board says that unless these additions are made over and above the 2,000 cars they are purchasing with farmers' money, exports could decline by one million tons a year, which would represent a loss of over $4 billion in the western economy, and in view of the fact that the board has said that lack of railway cars is the number one problem affecting grain exports, what action does the government intend to take about this Wheat Board proposal?


Otto Emil Lang: Mr. Speaker, I do not know how the hon. member can constantly turn what is a great story of progress into a pessimistic one. What we are talking about is expanding exports by one million to 1.5 million tonnes a year from a current record level of 21 million tonnes to a level of 30 million tonnes in 1985. That is what the cars are required for.
There is, of course, room for argument about whether by that time we will need 8,000, 9,000, 10,000 or 11,000 cars. But I want the hon. member to know that I immediately responded positively to the suggestion of the Wheat Board, and indeed I will be taking up the direct suggestion of the government of Saskatchewan that we set up a ministerial task force on the subject. It looks as though the messages from the premiers of Manitoba and Alberta may be read as being positive as well, provided we broaden the subject from just the hopper cars to the whole question of dealing with the over-all grain and transportation problem.
Certainly, at the Winnipeg meeting on January 8 and 9, all the premiers saw the facts. They emerged from that meeting positive that we could do the job of carrying this grain, exporting it and selling it, and that the important thing is confidence on the part of the producers so that they will produce it. So we will get that job done, Mr. Speaker.


Leslie Gordon Benjamin: Mr. Speaker, the whole point is that the projections are for a 50 per cent increase in grain exports provided there is the capacity to move it. That is the whole point of the proposal of the Wheat Board for 10,000 more hopper cars.
Since it is not good enough for the minister to say we are doing as well as we did last year, and since the system is strained now, I should like to ask the minister whether or not he will implement the Hall commission recommendation for the Government of Canada to pay the difference between the Crowsnest or statutory grain rates and the compensatory rates, and require the railroads to purchase the rolling stock, hopper cars and locomotives, or anything else that is necessary, and save the money that he will spend on improving branch lines, save the money he is spending on branch line subsidies and on

numerous other matters and require the railroads to do what section 262 of the Railway Act says he should do.


Otto Emil Lang: Mr. Speaker, once again I find the logic of the hon. member for Regina-Lake Centre to be extraordinary. He suggests we should save the money we are spending on branch lines, save the money we are spending on hopper cars by giving the railways twice as much money, according to that suggestion of the Hall commission. What kind of logic that is, I do not know. At least the hon. member should not call it saving.
The fact of the matter is that the Hall commission has left us with a very serious dilemma still in relation to all of the products made from grain, and more and more people in the prairies are realizing that the discrepancy between freight rates on grain and freight rates on products, including meat, means they are at a disadvantage from the point of view of processing in the prairies. Indeed, studies which governments in the prairies have had commissioned have demonstrated this to them, although they have kept those studies secret. They have demonstrated that the prairies are being disadvantaged by this discrepancy, hence the suggestion by Mr. McMurtry- during an election campaign, it is true-that the province of Saskatchewan will be prepared to pay part of the cost in relation to products.
That is the issue which I will want to discuss further with him. I made the point to him that it seemed to me important that we solve the problem in the same way in Manitoba and Alberta as in Saskatchewan, but I was delighted that he recognized at this point-as the hon. member for Regina-Lake Centre has never recognized-that the whole future of processing meat and products on the prairies depends on solving the whole problem, instead of responding to simplistic cries for giving the railways more money, thereby saving the money we are now giving the railways.


REGIONAL ECONOMIC EXPANSION
Mr. B. Keith Penner (Thunder Bay):: Mr. Speaker, my question is for the Minister of Regional Economic Expansion. Is the minister aware of the concern expressed by the northern Ontario independent sawmill operators as a result of the plans announced by the federal and Ontario governments to give massive assistance to the pulp and paper industry? These independent operators, who employ a significant number of people and are the economic backbone of many northern Ontario communities, are fearful of being caught in a squeeze play by the big pulp and paper companies.
Can the minister assure these independents that they will continue to have a key role in the emerging new strategy for the forest products industry, and can he tell us what steps are being taken now to take into account their interests along with those of the big corporations?
February 12, 1979


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Yes, indeed, Mr. Speaker, we are well aware of the concern expressed by sawmill operators and quite few other people in forestry-related industries. I can reassure them that what we have done, and what we are prepared to do, is in line with trying to cope with the difficulties which they have expressed to us.
In fact, the agreement dealing with forestry we have just signed with the government of Ontario is directly in response to the concern expressed to us regarding the threatening short supply of wood in Ontario, particularly threatening the existence of sawmill operators as well as the whole pulp and paper industry. So both programs have been developed in response not only to the concerns expressed by the operators in Ontario but also concerns throughout Canada.


POST OFFICE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker,
I should like to address my question to the Postmaster General. I am pleased to note that he can flip-flop, in that previously he thought the problem in Hamilton was an internal matter and on Friday he indicated he was going to seek the advice of his legal advisers, of the Minister of Justice and the Minister of Labour, and at the same time hold an inquiry into the matter. I ask the Postmaster General whether this inquiry has taken place and what he has found out.


Hon. J. Giiles Lamontagne (Postmaster General):: Mr. Speaker, I stated clearly enough in the House the other day that utmost fairness is indicated with both management and workers, and that one should not become anti-union or antiemployer because of a case like that in Hamilton or similar ones. With regard to the allegations of harassment and abuse on the part of union leaders towards their members, I think that normal procedure, and indicating a certain amount of confidence in the sense of responsibility of certain unions, would be first of all to appeal to the regional leaders, then to the national ones and if they are not happy with the answer of the national leaders, they can then go to the Canadian Labour Congress with whom they are affiliated. But, Mr. Speaker, there is no reason to get upset if perchance they do not get what they want either from the national leaders or the Canadian Labour Congress. As the Minister of Labour said, we can see what should be done when that time comes.


Lincoln MacCauley Alexander: Mr. Speaker, no one is nervous on this side: we just want to find out whether the government is prepared to
Oral Questions
keep the commitment it made to postal workers when it introduced the back-to-work legislation.
With all the gobbledygook, the minister still has not answered my question. I asked whether he has obtained advice from the legal advisers to the Post Office, whether he has discussed this matter with the Minister of Justice, and whether in fact he has gone further and discussed the matter with the Minister of Labour and has caused an inquiry to be made. That was the position we were left with on Friday, and I would hope the minister would stand up now and answer that question.
Has he taken the initiative to determine what can be found out in this regard, in order that we may be able to see whether anything can be done so that the government can keep its word; or is the government going to leave these postal workers out to dry? That is all I am asking.


Mr. Lamontagne:: Mr. Speaker, when it was time for the government to take its responsibilities, we took them, and Bill C-8 is proof of that. When the hon. member asks me when we will take the initiative, I would ask, in respect of what? Actually, disciplinary action has not yet been taken against Hamilton letter carriers, so what is he referring to in respect of which we have to take initiative? Let the unions take their responsibilities; if they do not take them, we will see what we can do.


PENITENTIARIES
Mr. Alex Patterson (Fraser Valley East):: Mr. Speaker, I should like to direct my question to the Solicitor General. In view of his recent statement regarding penitentiary services, will the minister advise the House whether he has rejected the submission of the subcommittee on the penitentiary service that institutions housing a maximum of 200 persons would be the most efficient and desirable in future planning?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I made a statement in Kamloops, 1 believe in the second week of December-if the hon. gentleman is not aware of it, I will send him a copy-in which I indicated what the present policy was in terms of penitentiary construction.


Alexander Bell Patterson: Mr. Speaker, will the minister report to the House on the results of his meeting with the mayors of central and upper Fraser Valley a week ago when the announced changes as they relate to penal institutions in that area were discussed?


Mr. Blais:: Mr. Speaker, I am very pleased the hon. gentleman has drawn attention to that particular meeting. Indeed, I was in Harrison Hot Springs roughly two weeks ago and met with mayors of the Valley at that time. In addition, I had the opportunity of observing for the first time the upper Fraser

February 12, 1979
Oral Questions
Valley, and I would congratulate hon. members here from the area for having such a lovely area in which to live.
Having said that, this was a meeting not only with myself but with my officials. From the report I received during the occasion of a luncheon 1 had with the mayors, I understand that all the differences there might have been prior to the meeting have now been ironed out.


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, my question is for the Minister of Fisheries and the Environment. As the minister is aware, four members of the European Economic Community who are members of ICNAF, namely, West Germany, France, Denmark and Great Britain, served notice that they would be withdrawing from ICNAF effective December 31, 1978, on the assumption that NAFO would come into force on January 1, 1979.
Will the minister assure the House that fishing in 1979 beyond the 200-mile limit is being carried out by these countries in conformity with internationally agreed regulations and, if not, are these countries conforming to any regulations and is he still licensing them to operate within our 200-mile limit?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, I will have to check on the number of signatories to the NAFO agreement to see to what extent it is operative at the present time. I apologize to the hon. member, and I will check and give him the information.


Lloyd Roseville Crouse: Mr. Speaker, I thank the minister for that answer. While he is checking his figures on the EEC fishing activities inside as well as outside the 200-mile zone, will he also check and give the House an up to date answer on quotas that have been arranged for Norway in respect of shrimp fishing off the Labrador coast, as that is a question which is still unresolved in so far as agreements are concerned with Nova Scotia, New Brunswick and Newfoundland-in fact, with the entire Atlantic coast?


Roméo LeBlanc: Mr. Speaker, Norway is one of the countries-in fact, it was the first-with which Canada signed a bilateral agreement in respect of fisheries matters. There may be Norwegian vessels involved under charter, but I will have to check the exact facts. I know Norway could be a player in the Davis Strait. This is where Canada also has some interest.


OIL SUPPLIES FROM MEXICO AND WESTERN CANADA TO EASTERN CANADA-GOVERNMENT PLANS
Mr. Maurice Foster (Algoma):: Mr. Speaker, I would like to direct my question to the Minister of Energy, Mines and Resources. In view of Iranian oil supplies being cut off to Canada during the last couple of months, which amounted to about 24 per cent of our supply of oil from offshore, is the government planning to provide greater supplies of oil from western Canada? I should also like to know whether negotiations for Mexican supplies of oil are going on rapidly enough for those supplies to be available to eastern Canada this summer and fall without shortages.


Alastair William Gillespie: Mr. Speaker, Canadian supplies from western Canada have been increased recently under temporary arrangements. These Canadian supplies are displacing crude to the Chicago market; that is, crude which otherwise would have been supplied from offshore to the Chicago market. That crude is now going to eastern Canadian refineries. So, in fact, additional quantities of Canadian crude are being moved into eastern Canada through this exchange arrangement.
As to the Mexican situation, a Canadian delegation was in Mexico last week to conclude the arrangements that were negotiated by myself early in January. This delegation, composed of Canadian officials including representatives of Petro-Canada, who are dealing with the national oil company of Mexico, have reported to me that negotiations are going very well and I am optimistic that it will be possible to announce an agreement in respect of a major contract with Mexico very shortly. I would expect that supply should begin to run by the end of this year.


PUBLIC ACCOUNTS
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, my question is for the President of the Treasury Board. The minister will be aware of a controversy at the public accounts committee meeting of last week in respect of a question as to whether the Secretary of the Treasury Board or the Comptroller-General would be responsible for implementing the Auditor General's recommendations on the form of the estimates.
Given the commitment made by the minister's predecessor during the debate on the comptroller-general bill, that the form of the estimates would be the responsibility of the Comptroller-General, will the minister indicate why the commitment was altered between that time last year when the bill was debated, and the recent past?

February 12, 1979


Hon. Judd Buchanan (President of the Treasury Board):: Mr. Speaker, I do not believe that the commitment, in fact, has been altered. Obviously, there are overlapping concerns here. The question of resources is very crucial as far as the form of the estimates is concerned and this is a responsibility of the Treasury Board secretariat.
As the hon. member points out, the Comptroller-General is very concerned from the point of view of financial management, and form as well. These two gentlemen are discussing the matter and I am certain it will be resolved satisfactorily.


Harvie Andre: Mr. Speaker, I would refer the minister to the testimony of his predecessor before the committee on miscellaneous estimates at the time the comptroller-general bill was adopted. At that time his predecessor, while refusing to have the responsibilities of the Comptroller-General written into the act, did make certain commitments as to his responsibilities.
What assurance will the minister give us now that there will not be any further erosion of the responsibilities that the Comptroller-General must have if he is to fulfil the important job outlined in the Auditor General's report?


J. Judd Buchanan: Mr. Speaker, there is absolutely no intention to erode or undermine the responsibilities of the Comptroller-General. I would like to state very clearly that there is an overlapping of interests in the form of the estimates as they relate to the use of resources and financial management.


Lincoln MacCauley Alexander: Who is boss?


J. Judd Buchanan: So both the secretariat, in other words, the Secretary to the Treasury Board, and the Comptroller-General have a very vital and ongoing interest in the form of the estimates.


NORTHERN PIPELINES
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I would like to add a question to the one asked by the chairman of the Standing Committee on Northern Pipelines. I have been waiting for two weeks to address this question to the minister responsible for northern pipelines, but in his absence and in the absence of the Minister of Indian Affairs and Northern Development I will direct it to the Minister of Energy, Mines and Resources.
Given the minister's answer to an hon. member on his side of the House with respect to energy sources, and given the positive statements which have been made recently concerning delays in the construction of the Alaska Highway pipeline, can the minister confirm that there will, in fact, be a delay reaching into 1983, 1984 and 1985 before that pipeline is on stream? If he can confirm, on behalf of the government, that there will be at least a year's delay, will he inform the House
Oral Questions
whether it is the intention of the government to effect an exchange of notes between the Government of Canada and the government of the United States in order to amend the terms of the international agreement respecting that pipeline?


Alastair William Gillespie: Mr. Speaker, I understand the hon. member's concern over the pace of events. We, too, are concerned with the regulatory difficulties south of the border. Recently, I received advice that the federal energy regulatory commission had made a finding with respect to the processing costs of Prudhoe Bay gas, and this is one of the first steps which must be settled. This deals with what the net effect will be on producers of gas produced in Alaska.
That process has not yet been completed. I am told that the finding is reviewable up to, I believe, March 9 and then there is a further period of some two weeks available for further representations.
I very much hope that it will be possible for the United States authorities to settle on this basic question of what the price will be to the producers in Alaska, but until that issue is settled and until the issue with respect to the price to the consumers is settled, there will be difficulties and delays and it will not be possible for a financing plan to be put into place.


Mr. Speaker:: I was in the process of recognizing the hon. member for Winnipeg North Centre to conclude the question period when I allowed the previous question which, quite legitimately, took a little longer than I expected. I wonder if I could ask the hon. member for Winnipeg North Centre to conclude the question period with one question.


VETERANS AFFAIRS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is to the Minister of Veterans Affairs. Last Thursday, I put a question to the deputy House leader, urging him to use his persuasive powers with the government House leader and other members of the cabinet to get time in this session for some legislation relating to veterans affairs. I was told to present my case to the minister.
Therefore, I now put my question to the minister. In view of the fact that there are three or four outstanding items, such as the 48 per cent rule as it affects widows, revising the War Veterans Allowance Act, keeping the disability pension rate in line with the composite wage in the public service, and so on, with which it would be desirable to deal before this parliament ends, will the minister do his best to bring before cabinet one or more of these issues so that parliament can deal with them in the name of our veterans before this session ends.


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, I know that the hon. member has a deep interest

February 12, 1979
Privilege-Mr. McKenzie
in veterans affairs, and I certainly appreciate it. With regard to the items the hon. member has mentioned, they are all under consideration and if anything can be done within the time he has mentioned, we will be more than glad to do it.


Stanley Howard Knowles: Ten o'clock.


PRIVILEGE
[Stage Direction]
mr. McKenzie-use of picture of governor general and

Mr. Speaker:: Order, please. Last Friday the hon. member for Winnipeg South Centre (Mr. McKenzie) gave notice of his intention to raise by way of a question of privilege a matter dealing with the printing of a document, which he then produced in the House, to determine first of all whether or not there was a question of privilege and, secondly, whether there was some responsibility in the administration of the House of Commons for the printing of the document. The hon. member followed up by giving me the text of a proposed motion which he would move in order that I could make a finding that the matter on a preliminary basis did touch the privileges of a member. His draft motion is as follows:
That the publication by the Liberal party of the pamphlet entitled "Parliamentary Report" be referred to the Standing Committee on Privileges and Elections with instructions that the said standing committee study the format and subject matter of the said pamphlet and report back to the House as to whether the said pamphlet offends the office of the Governor General according to traditional usage and custom.
According to the hon. member's remarks on Friday, matter in question appeared to be election material used by the Liberal party and containing a picture of the Governor General and his wife. In addition, the hon. member indicated that this would appear to be a blatant misuse of the office of the Governor General. The hon. member asked whether the printing of the document was done by the House of Commons facilities or whether it was authorized by me, and if not, by whom.
I can dispose immediately of the matter as a proposed question of privilege. It has been said time and time again that the law of parliamentary privilege is restrictive in nature in that it consists in the main of rights which are necessary for the execution of the powers of parliament, that privileges are enjoyed by individual members in order that members may carry on their functions in an unimpeded way. In order to constitute interference with that privilege, there has to be an obstruction of the basic ability of a member to perform those duties or, alternatively, there has to be some kind of contempt.
Whatever else it may be, it is clear to me that the production and circulation of this particular document would not appear to constitute a breach of parliamentary privilege as such.
That having been said, the hon. member also asked me to determine the authorization for the printing of the document

and interesting and important questions with respect to the provision of services by the House of Commons raised by this matter, in that the production of what we refer to as householder mailings is carried on as a service of the House to its members. I think all hon. members understand that this is a service to them to be taken advantage of up to four times a year in order that the member may provide information to his constituents, constituents of all political persuasions, about the events taking place here in parliament.
Bearing in mind that the function is informational in nature, that it is for constituents of all political persuasions and that it is provided not at party expense but at public expense through the estimates of parliament, it is obvious that the document must have certain guidelines which fulfil the expectations of this kind of program. Indeed, these guidelines have been established, and I believe that most hon. members are familiar with them, although it has been some time since they have been discussed here in the House.
Perhaps it would be useful to repeat that there are restrictions with respect to the size of the document, the number of pages in each and the total number to be authorized over a fiscal year. I will not go into details, but those are some of the basic requirements set down in the guidelines available.
In general, under these criteria a householder mailing is acceptable, provided it does not include a text which (a) requests adhesion to a party, (b) invites constituents to attend national or constituency political meetings or functions, (c) requests monetary contributions, or (d) contains election campaign material including election speeches, poll activities and lists-in other words, material which is more specifically the responsibility of party or constituency headquarters.
These guidelines, which are reviewed from time to time, have been put in place after the most thorough consideration by the Standing Committee on Management and Members' Services and, in general, seem to have fulfilled their purposes well. I do not need to remind hon. members that the membership of the Standing Committee on Management and Members' Services consists of members of all parties in the House.
There is a continuing consultation between the committee and the offices of hon. members on the one hand, the printing service on the other hand, and, of recent years, between the party research units and the printing units along the same lines. In that respect the practice of consultation between the party research units and the printing units in terms of doing something of a general nature which might be used to the advantage of an individual member or of a particular party is not an uncommon practice.
I have inspected the document referred to by the hon. member carefully. It is a proposed constituency mailing which begins with a photograph of His Excellency the Governor General and Her Excellency on the occasion of the installation of the Governor General, with a space for a photograph of the member sending the document. It is followed by a further photograph of His Excellency together with a short biograph-
February 12, 1979

ical sketch and some opinions concerning the proposed attitude to be taken by Elis Excellency on the question of national unity. The remainder of the proposed mailing is quite in accordance with the usual reports made by members to their constituents dealing with topics such as the federal-provincial conference, various committees of the House, the legislative proposals before parliament and so on.
I was interested to find that this is not the first occasion in which mailings by members have alluded to the office and person of the Governor General and of Her Majesty the Queen.
The question I have to determine is whether or not the proposed mailing is in contravention of the guidelines as they exist at the present time. In my opinion, it is not. By definition, parliament is composed of the Governor General, the Senate and the House of Commons, and it would seem to me therefore that the publication is in essence parliamentary in nature. It seems to me, on inquiry, that the official in the printing unit who did not feel that the proposed publication contravened the established guidelines which would have resulted in his bringing the document to the attention of his superiors was acting within the guidelines as he understood them, and as I understand them.
As I have previously said, these guidelines, which have been most helpful to hon. members, are in existence as a result of careful consultation with the Standing Committee on Management and Members' Services. The committee may, in its wisdom, wish to consider the guidelines again and be more restrictive, if that is their desire; but for the time being I must tell the hon. member that, according to the criteria now in force, the mailing is acceptable.


Erik Nielsen: Mr. Speaker, I rise on a question of privilege, not for a moment questioning the Chair's ruling that has just been given but merely to express my disappointment that you, sir, did not invite submissions on the question raised by the hon. member. It is, in my submission, a long standing custom of the Chair to hear submissions on the question whether or not there exists a substantive question of privilege for the Chair to rule upon.


Mr. Speaker:: Order, please. Obviously, I do not want to prolong this, but I did indicate to the hon. member on Friday when he raised the point that I did not, in a preliminary way, see any way in which it came within the privileges of the House. I did undertake to look at it, however, and see if it did. I thought in the circumstances that there would be no point in indicating that I did see some way in which this appeared to come within privilege.
There may be other arguments about the content of the document and whether it conforms to the guidelines in the way that I have said, but I cannot see that it constitutes, even in a very basic sense, a question of privilege. I thought I ought to set that argument aside right away.
I put the other remarks on the record in terms of the printing of the document because it and other matters have come up from time to time about, perhaps, taste, quality and
Point of Order-Mr. Diefenbaker
things of that sort. I think it falls squarely within the ambit of the Standing Committee on Management and Members' Services and the guidelines as we know them. I could not in any way pretend that it constituted a question of privilege.


POINTS OF ORDER
James Aloysius McGrath: Mr. Speaker, I rise on a point of order. I am sorry that the Minister of Public Works and Minister of State for Urban Affairs (Mr. Ouellet) is not in the House because my point of order relates to his reply to my question, or what appeared to be a reply, although in fact he evaded my question. In replying he accused me of making accusations that there was wrongdoing on the part of officials of CMHC.
I have since checked the record, Mr. Speaker. I did not accuse anybody of wrongdoing; rather, I referred to the serious allegations of wrongdoing. The minister is supposed to be a lawyer and he knows the difference. I am sure that upon reflection he would probably want to correct the record.


André Ouellet: Mr. Speaker, I will check the record myself. The hon. member said he checked it. If indeed it has to be corrected, I will correct it gladly.


MR. DIEFENBAKER-USE OF PICTURE OF GOVERNOR GENERAL AND FAMILY IN LIBERAL PARTY COMPAIGN LITERATURE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, arising out of your decision today, and in no way challenging it in so far as it went, I am very deeply concerned about this whole question.
I speak as one who has been here a long while. I have never brought up a matter like this before. I am the only living Canadian member of Her Majesty's Privy Council. The last was the Right Hon. Mr. Pearson. During his period of office he brought about a change whereby thereafter there would be no such award available to Canadians-he had already secured it-and that the title "right honourable" would apply to all prime ministers, the Chief Justice of Canada and the Governor General.
It is not with regard to the matters your Honour has dealt with that I wish to speak. This document is a shocking example of endeavouring to place the Governor General of Canada in a position of being-


Some hon. Members:: Order, order.


John George Diefenbaker: They know they are wrong and that is why they are starting to groan. It is music to the gambler's ear to hear the suckers roar!
3112

February 12, 1979
Point of Order-Mr. Diefenbaker
Since 1867 there has never been another example-and I have looked through the records-in which the governor general has been placed in the invidious position that he will be as a result of this document. It is entitled "Parliamentary Report", as your Honour said, and has a photograph of the Governor General and his lady on the front page. On the next page it reads as follows:
Dear Constituents:
Canada's new Governor General has announced that his first official action will be a tour across Canada to discuss national unity.
We Liberals applaud his decision. Unity is, of course, a pressing national concern. More importantly, though, we like his way of tackling the problem: by asking average Canadians what they think.
The Governor General is the representative of Her Majesty the Queen. No monarch of Canada or of the United Kingdom has ever been able to ascertain by personal inquiry and public visitation the thought of the people. The document goes on:
We call it "consultation".
1 call it deception. It goes on:
It's something we've been practising for quite a while.
If they had, Mr. Speaker, this is the first time it has been revealed. The next page is headed "Canada's dynamic Governor General" and under a photograph the text reads:
Governor General Edward Schreyer promises to give a very different look to the highest office in the land.
He is the representative of the Queen and cannot do what the Queen cannot do.


Some hon. Members:: Hear, hear!


John George Diefenbaker: Let that be clear and definite.


Mr. Speaker:: Order, please. I just want to make sure that in proceeding on this subject we are in order. The hon. member raised it first as a question of privilege. I think the House can understand that I had an obligation to set it aside as a matter of privilege. It does not touch on a matter of privilege. The right hon. member now has the floor and I shall soon have to determine the basis upon which he is bringing it again to the attention of the House. He seems to be indicating that the text refers to some things that the Governor General may have undertaken to do which he cannot do. I do not know, but, if so, I must have some basis upon which I can, in the Chair of this House, receive these kinds of arguments in an orderly way.


John George Diefenbaker: Mr. Speaker, I realized the difficulty when I rose. Parliament consists of the Queen, the Senate and the House of Commons. The Queen has as her representative the Governor General, who cannot be brought into party politics. Otherwise parliament would be destroyed.


Some hon. Members:: Hear, hear!


John George Diefenbaker: The point I make is this. I realize the difficulty with the rules, but if the government is allowed to get away with this, it amounts to an endeavour on the part of the Government of Canada, by inference or suggestion, to lead

people into believing that the Governor General is a close ally of the Liberal party.


Some hon. Members:: Hear, hear!


John George Diefenbaker: That is what it amounts to.


Mr. Speaker:: With respect to the question of the right hon. gentleman regarding the recent installation of the Governor General, as he has pointed out, and as I said in my remarks, parliament consists of three institutions, the Governor General, the Senate and the House of Commons. If as part of a householder mailing a member of the House had proposed to put the picture of this installation on the front page and to report as a parliamentary event the entire installation proceedings, I think the House will realize that, if that is acceptable, then to indicate that some reference to that is not acceptable puts us in a position of making an editorial decision, which is an extremely onerous responsibility for the House officials to accept.
In my opinion, that is the crux of the problem. I do not see the procedural basis upon which we can interfere, unless there is some suggestion that we editorialize.


John George Diefenbaker: Mr. Speaker, I realize that, but I come back to this point, that I cannot believe that the Governor General of Canada agreed to this.


Some hon. Members:: Hear, hear!


John George Diefenbaker: After all the pamphlet quotes the Governor General as saying:
In accepting the office, Mr. Schreyer promised to be a travelling governor general, "the kind you'll see less in Ottawa and more in towns like Corner Brook and Meadowview."
It goes on to say:
On these trips, he will speak out on national issues-


Some hon. Members:: Hear, hear!


John George Diefenbaker: Applause comes from those who are ignorant of the powers of the monarchy and its representatives. I repeat, the article goes on to say: "On these trips, he will speak out on national issues-such as unity"-he has no right to do that.


An hon. Member:: Why not?


Some hon. Members:: Hear, hear!


John George Diefenbaker: It continues: bilingualism-he has no right to do that-"and energy." This is the subject of controversial debate in every part of the country. The article concludes by saying: "-from the non-partisan perspective of a concerned Canadian."
Allow this unchallenged, sir, and you have the Governor General as a participant in political considerations which dare not be permitted; and I feel absolutely sure that the Governor General never consented to this. Who asked him whether this would be proper? What was his response? Sir, allow this and
February 12, 1979

the Governor General is no longer the representative of the Queen. He will no longer occupy the position that governors general have exercised throughout the years. He has become an instrument where, by subtle wording, he is placed in the position of being an ally to one of the political parties.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Once again I have to restate that I am unaware of any procedural basis on which we can have this matter before us. In the interests of equal time, I will allow the minister to make some short contribution.


Hon. Norman A. Cafik (Minister of State (Multiculturalism)):: Mr. Speaker, I rise with great deference to the right hon. member for Prince Albert (Mr. Diefenbaker), a person and parliamentarian for whom I have a great deal of respect, as he and I think all members know. He finds it rather shocking to think that use was made of the office of the Governor General to acquaint Canadians with him and his office and his swearing in ceremony. That is considered a partisan approach. I find that difficult to understand.
I would like to point out to the House through you, Mr. Speaker, that this is not the first time, as you have already pointed out, where householder mailings have used photographs and references to the monarchy of Canada. In front of me I have a photostat of a householder mailing put out by the hon. member for Hastings (Mr. Ellis) dated December 1977. At the bottom of the page there is a photograph of the hon. member, others and the Queen. Below the photograph, in what I think are rather presumptuous terms, it says:
Her Majesty enjoying a few moments with the Member from Hastings and others after the Official Opening of Parliament.


Some hon. Members:: Oh, oh!


Norman Augustine Cafik: I am not sure the Queen authorized the use of the photograph or would admit that it was a few moments of enjoyment to be with the hon. member for Hastings.


Some hon. Members:: Oh, oh!


Norman Augustine Cafik: In addition to that, on the same page under the heading "The Queen's Visit" it says:
It was a pleasure and privilege to welcome Queen Elizabeth and her husband, Prince Philip, to the nation's capital for this great and historic ceremony.
I would suspect that it was not the hon. member for Hastings who unilaterally extended that welcome to the Queen and her husband.


An hon. Member:: He did not appoint them either.


Norman Augustine Cafik: Of course he did not appoint them. I should point out that it was not the Government of Canada that appointed the present Governor General of Canada; it was the Queen of Canada who made that appointment.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!
Point of Order-Mr. Hogan


Norman Augustine Cafik: And we happen to think that she made a very wise choice in choosing the person she did.


An hon. Member:: Are we expected to believe that?


Norman Augustine Cafik: To say the use of such photographs or references to Her Majesty or her representative is drawing either the Queen or her representative into partisan politics, I think is doing a disservice to both of them. They would not be drawn into partisan politics in their lofty positions. I think the right hon. gentleman from Prince Albert realizes that. There is nothing in this report, in my judgment, that makes any kind of suggestion that the Governor General is a Liberal. I believe traditionally everyone would suspect that he was not prior to taking office. There is no attempt whatsoever to draw the Governor General into any partisan role. It is the opposition that is attempting to draw the monarchy into a partisan role on this occasion, not the Government of Canada, and certainly not any member on this side of the House.


Mr. Speaker:: Order, please. I think we have gone as far as we can in the interests of equality. If the matter is to come back before the House it will have to be on some regular, procedural basis. I do not see any way within our practices that we can carry on this discussion any further at this time.


MR. HOGAN-LABOUR FORCE SURVEY-REPLY BY MINISTER OF FINANCE DURING QUESTION PERIOD
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I am sure that the Minister of Finance (Mr. Chretien), who has left the chamber, would not want to leave the impression he did leave with the people of Canada today when he answered a supplementary question put by the hon. member for Winnipeg North (Mr. Orlikow) concerning the wholesale price index, which had shown a 12.5 per cent increase. The hon. member said that this was the second type of survey that had been dropped by the government prior to the election, the other one being the job vacancy survey. In answer the minister said there has been a lot of discussion and debate about the labour force survey.
The minister is not in charge of Statistics Canada, but the Minister of Industry, Trade and Commerce (Mr. Horner) is. He should know as the chief policymaker-if he still is; it is not quite clear what role he has in view of the establishment of the Board of Economic Development Ministers, although he is an ex-officio member-the distinction between the labour survey that was changed this year in which the population sample was increased and the job vacancy survey.
While there have been a lot of questions concerning the labour force survey, very few members have brought up the job vacancy survey, which is exclusively the measure of the demand side of labour. This survey was cut out. During the debate we had on unemployment insurance, as a member of the committee I asked the deputy minister of employment and immigration why the government cut out this job vacancy survey at this particular time. His answer was that he did not know, that he and the Department of Employment and Immi-

February 12, 1979
Order Paper Questions
gration had wanted it and that it was a decision of Treasury Board. Therefore, the minister should clear up for the House the distinction between the labour force survey that was changed, the taking out of the job vacancy survey and the taking out of the wholesale price index, both of which can be and have been very embarrassing to this government in the last year.
[ Translation]


Mr. Yvon Pinard (Parliamentary Secretary to Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I understand the hon. member does not agree with the Minister of Finance (Mr. Chretien); however, I fail to see how this constitutes a point of order.



ROUTINE PROCEEDINGS


J. Judd Buchanan: Mr. Speaker, on behalf of the Prime Minister (Mr. Trudeau) I wish to table under the provisions of Standing Order 41(2) copies in both official languages of the second list of items for study in the continuing constitutional review as well as explanatory notes on the 11 items in the second list.


TRANSPORTATION ACCIDENT INVESTIGATION ACT
Otto Emil Lang: for leave to introduce Bill C-40, respecting the establishment of the Office of the Commissioner of Transportation Accident Investigation.


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

I ask, Mr. Speaker, that the remaining questions be allowed to stand.

Mr. Holmes: 1.	Has the construction of Ingamoo Hall been completed and (a) if so, what was the total cost (b) if not, what is the cost to date?
2.	Which funding agencies contributed to the project and in what amounts?
3.	Has an audited statement of the project been prepared and, if so, by whom?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: 1. Yes, the completion date was
December 31, 1977.
(a)	$429,531.58.
(b)	Not applicable.
2. Funding was contributed to the project by:
Department of Indian Affairs and Northern Development $198,000 Department of Secretary of State	95,000
Territorial Government-N.W.T.	10,000
C.O.P.E. (local donors)	60,000
Band loan	80,000
Total contributions:	$443,000
3. An audited statement of the project, dated January 31, 1978, was prepared by: Walter A. Dawson, Chartered Accountant, Fort Nelson, British Columbia.
1979-INTERNATIONAL YEAR OF THE CHILD


Mr. Howie: Has the Minister of National Health and Welfare established a commission or committee to perform any function related to the United Nations Declaration of 1979 as the Year of the Child and, if so (a) what amount is budgeted for this purpose (b) what are the names of the members?


Hon. Monique Begin (Minister of National Health and Welfare):: In so far as the Department of National Health and Welfare is concerned: Yes. The Canadian Commission for the International Year of the Child has been established to coordinate Canadian activities for the year.
(a)	A contribution of $250,000 is being made by Health and Welfare Canada toward the administrative expenses of the commission. The commission will also administer and distribute a $1,000,000 grant from the federal government for IYC projects and activities.
(b)	A list of commission members is given below.
Chairperson


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Yvon Pinard: Mr. Speaker, the following questions will be answered today: 590, 778, 789, 834, 883, 884 and 897.

Judge Doris Ogilvie
Executive Committee
Judge Doris Ogilvie (Chairperson)
Peter Lea
Ian Lithgow
Pat MacKay
Mona Nelson
Finance Committee
Stewart Sutcliffe (Chairperson)
Ian Lithgow
Leo Duguay
David Hahn
Rick Ryan
February 12, 1979

Landon Pearson	
Phyllis Yaffe	
Communications Committee	Project Funding Committee
Landon Pearson (Chairperson)	Phyllis Yaffe (Chairperson)
Madeleine Dubuc	Louise Gosselin
Betty Nickerson	Hannah Polowy
Barry Flemming	Doris Ronnenberg
Ernie Steele	Mary Wilson
Ruth Bell	Jane McKinnon
Norman G. Campbell	Lucille Mercier
Leah D'Argencourt	Mona Nelson
Mary Jo Dawe	Betty Nickerson
Dolores Denault	Landon Pearson
Frank Dornstauder	Hannah Polowy
Fred Metlewsky (alternate)	
Madeleine Dubuc	Shirley Post
Leo Duguay	Monique Proulx
Bob Barker (alternate)	
Barry Flemming	Doris Ronnenberg
Eva Goldenberg	Robert Roy
John Green	Rick Ryan
Louise G. Gosselin	Dr. John Schaller
Audrey Griffiths	Frank Simms
	Marvin McNutt (alternate)
David Hahn	Ernie Steele
Connie Hawley	Trudy Usher
Jean-Jacques Jauniaux	John A. Walker
Peter Lea	Dr. Norman Watts
Ian Lithgow	Bea Williams
Pat MacKay	Mary Wilson
Lawrence McArdle	Phyllis Yaffe


Mr. Howie: What is the current status of the RCMP regional headquarters planned for Fredericton, New Brunswick?


Hon.   J.-J. Blais@Solicitor General: Treasury Board approval will soon be sought to proceed, in 1979/80, with the drafting of the plans and specifications. Actual construction is planned to begin in 1980/81.


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


Hon. Iona Campagnolo (Minister of State (Fitness and Amateur Sport)):: In so far as the Minister of State (Fitness and Amateur Sport) is concerned: 1. Because Fitness and
Order Paper Questions
Amateur Sport Branch contributions are directed primarily to national sport governing bodies and national recreation associations, it is impossible to attribute such contributions to specific constituencies. Our athlete assistance program does involve direct payments to individuals, but to date there have been no contributions to individuals in the constituency of Richmond, Quebec.
2. Direct support is provided to high performance athletes who achieve "carded" status with their respective national sport governing body. The value and beneficiaries of such support cannot be predicted.


Mr. Howie: For the fiscal year ended March 31, 1978, what amount was spent by NRC on projects related to solar energy?


Mr. Pierre Bussieres (Parliamentary Secretary to Minister of Energy, Mines and Resources and Minister of State for Science and Technology):: In so far as the National Research Council is concerned the reply is as follows: $1,890,552.


Mr. Howie: For the fiscal year ended March 31, 1978, what amount was spent by NRC on wind generated electric energy projects?


Pierre Bussières: In so far as the National Research Council is concerned the reply is as follows: $692,134.


Mr. Howie: For the fiscal year ended March 31, 1978, how many Firms were assisted under the DREE-New Brunswick agreement under the Small Industries Financial Assistance Programme?


Mr. Donald Wood (Parliamentary Secretary to Minister of Regional Economic Expansion):: The reply for the Department of Regional Economic Expansion is as follows: 79.
[ Translation]


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


Some hon. Members:: Agreed.

February 12, 1979
Pensions



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, February 8, consideration of the motion of Mr. Buchanan that Bill C-12, to amend the Supplementary Retirement Benefits Act, the Public Service Superannuation Act, the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act and the Members of Parliament Retiring Allowances Act, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Stanley Howard Knowles: Mr. Speaker, when I got to my feet in this debate Thursday night, there were only about ten minutes left so I was not able to do much more than make some introductory remarks. I hope that even in those remarks I made it clear that we feel very strongly that the principle of the indexation of pensions is sound. We are glad that we have won the implementation of that principle, at least to some extent. We hope the day will come when it will apply to all pensions, both in the public and in the private sector.
So far as the public sector is concerned, we have full indexation of old age security, the guaranteed income supplement, other pension programs such as the Canada Pension Plan, the disability pension that is paid to war veterans, and the war veterans allowance. We also have it with respect to the family allowance, even though we lost some of the indexation when in January of this year the basic family allowance payment was put back to $20.
The fact is that we have a fair amount of indexation of pensions that are available, if they meet the conditions, to all the people of Canada. The indexing of pensions of retired public servants, retired personnel of the Canadian Armed Forces, the Royal Canadian Mounted Police and so on, is not the only example of indexing of pensions in the public sector.
As I say, we take very strongly the position not only that indexing of pensions is sound, but that, without indexing, pensions are not really pensions. What point is there to a person being given a certain amount to live on at the time of his retirement if the amount has to stay at that level no matter what happens to the cost of living? In the course of a few years, a pension that is not indexed can become no pension at all.
I urge very strongly that the direction in which we should be moving should not be to respond to the campaign that wants to cut out the indexing of public service pensions. We should be moving in the direction of finding ways to guarantee that the pensions of all Canadians, whether they are public or private, are subject to indexation.
As I said the other evening, another direction in which we should be moving is that of making indexation something that

is related not just to the rise in the cost of living but to the rise in the standard of living. It is my view that it is not good enough to say to a person who has retired that he will get enough money to buy for the rest of his years the basket of goods and services he can buy at that point, when everybody else in society is winning wage increases and an opportunity to share to some extent in the nation's increasing productivity.
I know that once we talk about pension indexing of that sort there are those who come back and ask us what it will cost. We are shown long advertisements and given long treatises on the amounts of money that are in various funds and so on. After the years that I have been studying and dealing with pensions, I have come to the conclusion that these funds are really a myth. After all, in most cases so-called pension funds are figures on pieces of paper. What really counts when pensions are being paid is the productiveness of the economy at the time those pensions are paid.
If you grant to a person a pension of $1 million a year and there is no economy producing goods and services in which that money is worth anything, the pension is worthless. Pensions are paid out of current production.
What we do in our whole scheme of pensions is to set up machinery whereby the part of the economy that is working produces enough for itself, for its children who have not yet gone to work and for the older people who have done their share of the work and have retired.
This attempt to fall back on myths about funds is a false view of the whole thing. What we should be concerned about is the fact that it is our responsibility as a society not only to provide for the retirement years of all our people, but to provide for that retirement on a basis that will enable them not just to keep up with the cost of living, but to continue to share in the rising standard of living.
I used the phrase the other night that I wanted all Canadians to be part of the Canadian family. In any family situation, you do not distinguish between the different members of that family by age or any other characteristic. You do as well as you can with what you have for all the members of that family. We should do as well as we can for all members of the Canadian family. That means that our retired people are entitled not only to pensions, but to have those pensions escalated to enable them to share in the growing productivity which, after all, they helped to make possible through their years of work.
We are proud of the role we have played-and I had something to say about this in a reflective mood the other night-in getting the escalation of various kinds of pensions established. We decry as strongly as we can the campaign that some are waging to try and turn back the clock.
Having said that, may I make a few comments about the bill before us. In so doing, I should like to deal with some of its specific provisions. I begin by saying I would be happy if the bill were not before us at all; I would be quite happy if we continued with the present plan which calls for full indexing of
February 12, 1979

the various pensions covered by the Supplementary Retirement Benefits Act. However, there has been a vicious campaign and many people have been taken in by arguments that certain individuals are being favoured as opposed to others. So there is a campaign to do something. This bill is an attempt on the part of the government to answer that criticism, to retain the principle of indexation as applied to the pensions of all those covered by the plans under the aegis of the government, and yet to relate the payments in some way to the figures on the books which correspond to what persons have contributed out of their wages and salaries toward their retirement. In the light of that campaign which has gone on, I think the bill has to be described as one which it would be reasonable for us to accept.
There are some changes I should like to see made and there are some comments I wish to make during the committee stage, but one of the reasons 1 accept this measure is the suspicion that, if we fail to do so, then down the road we might get something worse. So we had better grab while we can a way of preserving the principle of indexation even if it means a slight reduction of the amount which some of those in the upper reaches of the public service are able to enjoy.
The bill covers three main areas affecting pensions of public servants, armed forces personnel and retired RCMP personnel, but perhaps I might say before going into this aspect that the other provisions in the bill are quite acceptable. I refer to the part of the bill which sets up pension arrangements for air traffic controllers and to the clauses which iron out a few technicalities in the Supplementary Benefits Retirement Act and related pieces of legislation.
Now to get to the three main things which the bill does with regard to pensions covered by the Supplementary Retirement Benefits Act. They are, first, a change with respect to the amount of indexation one gets in the first January of his retirement. Then there is something with respect to those who are able to retire at age 55 after 30 years of service; and then there is the triennial scheme which is at the heart of this proposal.
As far as the change to a monthly or pro rata basis for the first pension indexation is concerned, I think this has to be regarded as reasonable. I know that some of the public service organizations which have produced briefs in connection with this bill have objected even to that. I read the briefs closely to see what those objections were. One was along the line that there are shortcomings in the plan as it is because pensions are based on a six-year average instead of three years or less, and that in a time of inflation retiring public servants do not get the amount of pension they should enjoy. In these circumstances it is argued that the ability to retire in October, November of December and benefit from indexation in January makes up for some of the shortfall they have suffered.
For my part, Mr. Speaker, I think it would be far better to correct the mistakes and make changes where the amount of the pension itself is not good enough than to continue with a system which seems to involve a degree of unfairness as between employees who retire at different times during the year. I am certainly prepared to listen to those who want to
Pensions
argue against such a change, but on the face of it I think it must be said there is some argument in favour of it. The proposal is that persons who retired during the latter part of the year should get indexation in January on a pro rata basis in respect of the number of months they have worked in that last years. That seems reasonable.
The second thing this bill does raises some complications. A few years ago a provision was made that if a person was 55 years of age and had 30 years' service he could not only retire but could get immediate indexation. We understand, of course, that people can retire early under other conditions as well. The provision to which I have just referred has been in effect for a few years and there have been some rather notorious cases. I shall not put names on record; some of those names are too well-known. However, a few favoured persons with 30 years' service have been able to retire, get immediate indexation and then go straight off to other jobs.
It is to correct this abuse that the government has decided that from now on indexation will begin only at age 60. Even that statement has to be qualified. Persons already getting indexation at an earlier age will continue to receive it and people who would be getting it during the next year or so will be covered by a notch formula. It is still true, and will be true, that persons retired for medical reasons will receive indexation right away, as will widows of pensioners even though the person getting the pension is under 60. Nevertheless, public servants generally will not have the right which a few already enjoy. There were abuses there and it is not unreasonable for the government to take account of them and to correct them.
At the time we brought in this provision for retirement at age 55 after 30 years of service I had a good deal to say about the position of retired members of the RCMP and the Canadian armed forces. Though the same rule applied to them, many retired personnel from these two groups had not completed 30 years of service; retirement in their case was not voluntary, they were under contracts which made it necessary for them to retire, some of them as young as 49 or 50. So there was no possibility of their getting indexation until they had reached the age of 60.
I have argued for several years now that, it having been made possible for some top public servants to get indexation at 55, at least we ought to make the same thing possible for retiring RCMP and CAF personnel, especially if they are retiring involuntarily or because of the nature of their contract. I suppose there will be some hon. members opposite who will say that now that we have taken away the right of top public servants to retire at 55 and get immediate indexation, that ends the argument about RCMP and Canadian armed forces personnel.
I do not think it ends the argument at all. I think it still stands, and one of the things I want to look very hard at when we get into committee on the bill is this whole business with respect to persons who I think have a claim to early indexation. Let us not in the process of getting rid of one abuse create

February 12, 1979
Pensions
another piece of injustice. As I say, I plead the right of these people to be considered. If we do have delegations before the committee, I am sure there will be delegations representing the armed forces and the RCMP, and I hope we will listen very attentively to their case.
I now move on to the main subject of the change with regard to public service pensions, and that is this triennial scheme which is being proposed. The way it stands now, it is a full indexation guaranteed and automatic for life for everyone once it starts, but the new proposal is that every third fall there should be an assessment of how much money is on the books, not in the fund. There is no fund. There are just figures out there on the books, but how much is there, how much of it really belongs to pensioners who are out of the service and out there enjoying their retirement, how much interest is that money earning and how much extra interest is it earning because we are in a time of high interest rates and so forth? A calculation is to be made each third fall as to how much could be charged against the books in the next three years, and on that basis what pensions will be paid.
We are told that had this bill come into effect at the beginning of 1979, the calculations last fall were such that there would have been a guarantee of the first $7,000 of everyone's pension being fully escalated but that the amount in excess of $7,000 would be escalated at 8 per cent this year, 7 per cent next year and 6 per cent in 1981.
I welcome the statement made by the President of the Treasury Board (Mr. Buchanan) the other night that conditions have altered a bit since last fall, and he says it is likely that when that kind of assessment is made this fall for the years 1980, 1981 and 1982, those who do the calculating may be able to do a little better. I think he said, for example, that what might happen is that the threshold might be $7,500 or $8,000. I hope it will be, and I hope that if the figures are better that is how it will be applied, and rather than a higher rate of interest on the upper increments of pension it will be applied to raise that threshold.
That is the scheme which is being proposed, and I wish the bill were not before us at all. I would rather leave it exactly as it is, but rather than run the risk of some drastic change in the whole scheme I would say that this bill is a protective piece of legislation and that on that basis it ought to be accepted. The other night the minister pointed out that if the estimates made every three years in the fall were too optimistic and too much money was paid out in the next three years, more than should have been, then that would be corrected the next time around.
I asked about the reverse situation, supposing there was too pessimistic an estimate, and the minister gave me an acceptable answer to the effect that if not enough was paid out in a three-year period, that would mean there would be more money on the books-let us not talk about funds; we know there are no funds around at all-and that it would be possible to pay better pensions later on. I am accepting all of this as a piece of protective legislation, and I hope public servants will see it that way.

By the way, we have been told that the scheme which would have come into effect this year-something like that which will come in next year-would have covered about 60 per cent or more of the retired public servants themselves and about 90 per cent or more of the survivors and those who are out on disability pensions. Of course, the reason it is 90 per cent in the latter case as opposed to 60 per cent in the other case is that those pensions are that much smaller. But we are talking about an arrangement under which pensions of $7,000- perhaps $7,500 or $8,000-are protected with full indexation, and I am glad that that is true. Let it also be clear that the person who has a pension of $10,000 will get full escalation on the first $7,000, but then a little less escalation on the portion above that amount.
I am talking about all these figures and calculations, this triennial business and so forth, as though I regard them as fully valid, and no doubt before this debate is over figures in the millions, billions and trillions will be cited as though something really sacred attaches to them. We are moving on. When I first came here we talked of $500 million as though it was a terrific sum of money. Now we are getting into trillions.
I think these funds and these accounts are all a myth. I remember seeing in Hansard where C. A. Dunning told J. S. Woodsworth that we could not afford to pay a pension of $20 a month to our old people because it would break the country. But what are we doing now? Some would say we are breaking the country now. Not at all, as far as I am concerned. By providing these things we have made the country. I suggest that if we made up our minds that all our retired people on pensions of whatever kind were entitled to indexation, we could afford to do it out of current production. That is what we have to look at, not figures which are off in some musty books. What counts is the will to do it and the realization that we pay pensions out of current production because we believe our people are entitled to them.
One of the things I am hoping is that what we are now doing is simply going through a phase. It is a phase because, although we have indexation of public service pensions, old age security and the others I named a while ago, we do not have indexation of private pensions in the main but ought to. That day will come. Maybe there will have to be some sort of a tax element or government subsidy to make it possible, just as people pay into the supplementary retirement benefits account for public service pensions. Maybe there will have to be an account people pay into for the other, but I would say that the day will come when we will have extended the principle of indexing of pensions across the board. When that day comes we will be able to revise this triennial scheme which we have been forced to go into because of the kind of campaign we face, because of arguments about restraint and all the rest of it.
As I say, I wish the bill were not before us. I wish this triennial part were not proposed at all, but I think it is protective and has to be looked at favourably. I think we have to have hope and confidence that when we get beyond this
February 12, 1979

period and move into the protection of all pensions by proper indexing, we will put this one back on the full basis as well.
There are two or three other things I would like to say, and if my time is running out I hope that if I make the point that we do not have any other speaker for this debate today, the House will give me an extra minute or two if necessary.
One of the things 1 would like to speak about is a touchy subject which is thrown around, and that is the extent to which persons who want to kill the indexing of public service pensions talk about the pensions of members of parliament. We are accused of having had some complicity in the indexing of our pensions. This is always a touchy subject to deal with but I think it should be brought right out into the open.
No one in the House has any doubt where I stand on the subject of what we receive as pay and as pensions. I happen to think they are out of line with what we ought to be getting. I am not arguing that point at the moment, but I am establishing it as the basis for what 1 want to say. I think there are some things wrong with the pensions available to members of parliament. I think they are too generous. I object to the fact that the provisions for our widows are greater than for other widows. That is not fair. I also think the business of members of parliament being able to get a pension at any age once they have been here six years is preposterous, and I will come back to that in a moment. But the one thing in the members' pension plan that I think is not-


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.


Stanley Howard Knowles: I thank you, sir, and I thank the House. I am afraid I put the House in a spot a moment ago, so that hon. members could not deny me extra time. What I want to say is that the one thing in the members' pension plan that I do not think is wrong is the business of indexing members' pensions, just the same as anyone else's pensions, provided that it starts only at the age of 60. Many people still have the notion that members' pensions are indexed as soon as the member of parliament leaves office. That indexing does not start until the age of 60.
As I said, I think there are things wrong with members' pensions that should be corrected, and I will indicate one or two of them right away, but that does not deny the right of members-just as I insist the right of public servants and elderly people, war veterans and people in the private sector- to have their pensions indexed in accordance with the rise in the cost of living. What we should be doing is to correct some of the things that are wrong.
The name of His Excellency the Governor General was dragged into debate a while ago in another context. I was pleased when the Prime Minister (Mr. Trudeau) tabled some
Pensions
days ago copies of correspondence he has had with the Governor General, when he was just Mr. Schreyer, about his potential pension. Apparently the then Mr. Schreyer made the plea to the Prime Minister that he did not want to be in the position of being a retired Governor General at the age of 48 on full pension. He thought that instead that pension should be delayed until the age of 60. The Prime Minister's reply indicated that he was in agreement with that. He had some qualifications about disability or the possibility of his death and the leaving of a widow, but he agreed with the then Mr. Schreyer that it did not make sense for the Governor General to have a full pension at the age of 48 and that it should be deferred to the age of 60.
I think we should be doing that to our pension plan. If the Prime Minister is going to bring in legislation to correct the pension plan of the Governor General, 1 think we should correct this business of a member of parliament being able, once he has had six years of service, to draw a pension at any age.
There are a few other things which should be put closer into line with other pension plans, but it is these other things which stand to be corrected, not the right to pension indexation. I think that anyone, whether he is a member of parliament, a retired RCMP officer, a governor general or a CNR or CPR pensioner, if he is going to have a pension, should have one that would enable him to keep abreast of the rising cost of living and with the standard of living.
So, sir, I decry the kinds of attacks that have been made on the plans that are now in effect. But for the errors that I have just referred to in our own scheme, I think the plans generally are pretty good. There are a few things that are in the public service plan which should be corrected, and I am sorry they are not in the legislation before us now. A while ago I referred to the fact that the public service pension is based on the average of one's six best years. In a time of inflation that can rob a retiring public servant of a great deal of security. Certainly it should be reduced to three years or perhaps even fewer.
I raise again, as I have, not only for public servants but, especially for the RCMP and the armed forces personnel, the question of marriages which take place after one goes on pension. The present law in this respect is as archaic and outdated as it can be. If a woman marries a retired public servant or a retired army officer who has served his day and age, and he is in the 50s or approaching 60, she can be his wife for 20 years, he has paid into the fund, but there is no pension for his widow because he married after he became a pensioner. As I said, that situation should be corrected.
I have already referred to the case of indexing for RCMP and armed forces personnel in cases where they have to retire early because of the nature of their contract. I think also their particular superannuation acts should be corrected.
We still have left over the problems relating to the buying back of earlier service or the buying back of years spent in the armed forces. There are instances where this was made possible but the person affected could not afford it and passed it up,
3120

February 12, 1979
Pensions
and then at a later date wanted to buy back earlier service to improve his pension position but the cost had become prohibitive. I think that also should be corrected.
There are still a few old timers around who transferred from one pension plan to another more than 50 years ago. I do not mean they were pensioners then; they were public servants in those days. They call themselves the "old originals." They do not have the advantage of the modern arrangements that are in our pension plans. I think we should not be drawing these kinds of lines. When people are retired, older people who have served their country in the public service, in the armed forces, in the RCMP or in the private sector, they should not be treated differently depending upon the time when they came into the plan, the time they retired, or what-have-you.
So there are all these various improvements that should be made in the Public Service Superannuation Act, in the Royal Canadian Mounted Police Superannuation Act, in the Canadian Forces Superannuation Act and in the Members of Parliament Retiring Allowances Act, and I hope we will make them. Perhaps I am asking the government to bite off too much between now and the end of this session, which has not many months to run, but that seems always to be the problem. Some of the things I have talked about, such as the six years' average, the late marriages, the buying back, and so on, have been talked about ever since I came here, and there is always some excuse why we cannot act on them. Sometimes the excuse is that the session is about over and it is time for an election. All right, some things are going to be done, if the session lasts long enough, and they are set out in this bill. We will have to look at them pretty closely, but I think these other things should be done as well.
With these comments, I say on behalf of my party that we are prepared to agree to the second reading of this bill so that it can be referred to the committee. Generally speaking, we approve of its tone because, as I said, it is a protective piece of legislation, protective in the sense that it keeps alive the principle of indexing of pensions. That is a principle which, in my view, must not only be kept alive but must be extended until it applies to all pensions in this country, whether in the public or the private sector.


Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, I was not going to take part in this debate because I had been told that Bill C-12 should be referred to the committee as soon as possible. But I have only a few words to say since the previous speaker simply stated our agreement to have this bill referred to committee as soon as possible for further study as it concerns the indexing of early retirement pensions and the public service monthly rates.
With this bill, the government answers the criticisms of certain financial groups who have stated that the public service pension fund greatly exceeds that of private companies and that, in the long term, the cost of the program will exceed its revenue. Certain financial circles have progressively escalated

their fight to the death with the government on this issue since the end of 1976. This is a sensitive question because on the one hand, some of the arguments of the private sector seem justified while, on the other, the Public Service Allia'nce has achieved a master stroke by obtaining the cost of living indexation of pensions to protect the purchasing power of their members and retired employees. To a certain extent, Mr. Speaker, the bill aims at reducing the pressures exerted upon many private retirement programs for which the benefits are much inferior to those offered by the public service. Indeed, it is a recognized fact that the public sector generally supports pension plans in which the benefits are 9 per cent higher than those of the private sector.
The proposals of the government mainly affect three areas: early retirement, the monthly rate and indexation. They amend two different statutes: the Supplementary Retirement Benefits Act and the Superannuation Act. The government wants to reduce progressively over a period of five years the age for early retirement. This amendment would affect mainly employees between 55 and 60 who have or wish to retire before the maximum eligible age. Of course, we believe that this must remain optional. Contributors must still have the option to do as they wish. As for the monthly rate, those who retire in January would receive eleven-twelfths of the authorized annual cost of living indexation adjustment. Those who retire in June would receive only half and those who retire in November would receive an automatic adjustment of one-twelfth of the inflation cost devaluation. At the present time, the person who retires receives the total amount of the indexation whatever the time of the year of his retirement.
At the limit, an individual could retire on December 31, 1977, for example, and on January 1, 1978 get the full indexing for the entire preceding year. Ad hoc indexing would allow the federal government to take automatic indexing out of the pension plan. The adjustments required as a result of the increase in the cost of living would from now on be made on an ad hoc basis. The public service pension board would set the indexing over a three-year period and in direct relationship with the amounts of money available in the government's pension funds. More specifically, the interests collected on pension funds would be distributed to eligible pensioners. Full indexing would take place only when the interests on the capital accumulated in the funds would be sufficient to cover the costs. As far as unions are concerned, all hon. members know their position.
Early retirement relieves more or less older federal employees who must retire for reasons of health. That is where one of the biggest problems lies. The new legislation would deny workers the right to compensation in the form of early pensions. It would also affect people who in this time of budget cuts are forced to take an early retirement because of our personnel cutbacks.
February 12, 1979

Indeed, we know very well that a person 57 years of age, for example, will have great difficulty finding a new job because of his or her advanced age compared with a younger person who still has several years of employment ahead of him or her. So for certain people early retirement becomes an insurance that will allow them to continue to receive a salary even if they find themselves out of a job because of our cutbacks. So we say that that policy includes benefits for the older worker while it is futile for younger individuals who usually find themselves another job sooner or later. So the act as it now stands takes care of employees who need it most, because those who get a new job, although they are now getting their pensions, would not benefit because the difference would be taken away by income tax.
Mr. Speaker, I believe the adjustment of pension plans according to age is a coming thing, and the government will have to move toward lower pension age, that is 60 for all Canadians. Later on this will come down to 55. However, the time is ripe in my view to realize that the pension age should be lowered to 60 for everyone. During the last election, we obtained help for pensioners' spouses. This is not enough this year in my view to clarify the situation for those who get married with old age pensions.
I hope that during studies on this subject the government will seriously consider alleviating the heavy burden on our shoulders, with a reduction of eligibility age to 60 for everyone, perhaps with help at 55 for spouses and normal pension at 60. Mr. Speaker, those were the few remarks I had to make. I hope we can refer the bill to committee as soon as possible.


Mr. Lloyd Francis (Ottawa West):: Mr. Speaker, the basic purpose of this bill is to make some change in the provisions for the indexing of pensions of public servants. It is true that the bill does some other things: it progressively increases the age at which full escalation can take place on retirement from 55 to 60, it reduces the incentive to retire on December 31 in each year, it makes some changes in the period of time over which the government must amortize deficiencies arising from general adjustments in salaries, and it does something with pensions for air traffic controllers. But I repeat, the main purpose of the bill is to deal with the indexing of pensions, and this is what I wish to speak about today.
As hon. members will know, 9 per cent of the people of Canada are retired. These people take up roughly 5 per cent of the national income. The only possible way that they may continue to get the same cut of the national pie is to have their purchasing power maintained, and that means that their pensions must be indexed. If the pensions are not indexed these retired people, people living on pensions, widows, orphans and dependants, are robbed a little each year.
The suggestion that indexing pensions to maintain the same purchasing power will bankrupt Canada is so ludicrous that one wonders how people of good sense could give it a second
Pensions
thought. I am not talking about increasing the pensions according to the standard of living. That point was raised by the hon. member for Winnipeg North Centre (Mr. Knowles). For the moment I am talking about maintaining purchasing power. If there was any evidence that inflation led to a decrease in national income in real terms, there might be a case for such an idea, but the reverse is true. Even though there is inflation, there is real growth.
Canada's real growth for this year will probably exceed 4 per cent, and there is no reason to believe that we cannot adapt our policies in such a way that we can still live with inflation and have real growth. This has taken place in Brazil and a number of other countries for some time. It is an affront to the intelligence of the average human being to suggest that it will bankrupt the country if we try to maintain the purchasing power of people who are retired.
The public service superannuation plan was adopted over 40 years ago. At that time the actuaries made their usual assumptions about age of retirement, rates of interest, contribution rates expected as a result of life expectancy and so on. They assumed that the average earning rate for the plan would be 4 per cent, and I am sure that they assumed that the benefits paid would represent stable purchasing power. In retrospect, those assumptions turned out to be erroneous because the cost of living has eroded benefits paid out and interest earnings have escalated.
Let us look at the problems dealing with supplementation. In 1970 the supplementary benefits retirement fund was set up by an act of parliament in order to establish a separate fund to deal with escalation. The anticipated rate of escalation was 2 per cent per year. The employees would contribute one half of 1 per cent of their payroll and the employer would match it. That was subsequently raised to a contribution of 1 per cent by the employee and 1 per cent by the employer. It is quite clear that this fund, while adequate for a 2 per cent or 3 per cent inflationary increase, is not adequate for a 9 per cent, 10 per cent or 11 per cent rate of inflation.
It is no great exercise to attack this fund and say that it is bankrupt or inadequate, or to make other derogatory comments with regard to it. We must admit that the fund by itself is inadequate and cannot deal with the problem. But we must also look at what has happened to earnings. The earnings of the other fund are now approaching 8 per cent per year and rising. The average rate of interest is a weighted average of the long-term Government of Canada borrowings. The last borrowing by the Government of Canada had a nominal interest rate of 10>/4 per cent, and it was sold at a slight premium. The effective interest rate was in excess of 101/4 per cent. This means that the fund will continue to earn money at an even higher rate than was anticipated in the original calculation by the actuaries, which was 4 per cent. Indeed, this 4 per cent rate continued up until 1969. In the 1950s and 1960s the fund, in effect, was subsidizing the management of the public debt of Canada because it was an account in the books of Canada.

February 12, 1979
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In response to a question I placed on the order paper, the President of the Treasury Board (Mr. Buchanan) has filed some replies which were tabled in this House on October 10, 1978. I wanted to know the amount of money credited to the public service superannuation account as of March 31, and then I mentioned certain years. In 1965 it was $2,161 million. In 1970, the fund had grown to $3,600 million and in 1975 it had grown to $6,420 million. In March, 1976 there was $7,312 million in the fund and by 1977 it had $8,147 million. As of March 31, 1978 the fund had increased to $9,053 million and probably by March 1 of this year it will have exceeded $10 billion. That is an enormous sum of money.
There are those who say that the amount of money in the fund is negligible. I believe that the hon. member for York-Scarborough (Mr. McCrossan), who is alleged to be an expert in this area as an actuary, has a question on the order paper referring to the phantom funding. The public service superannuation account is an account in the books of Canada. It is part of the national debt. It is not generally recognized that the public service superannuation fund and the armed forces superannuation account together represent over one quarter of the entire gross public debt of the Government of Canada. It is reported in the public accounts and interest is accrued to it. I suppose that the hon. member who asked this question would have been much happier if the government had issued bonds, hired a clerk to clip the coupons and put them in the bank regularly once or twice per year. Somehow this would make him feel that he was meeting the test of actuarial soundness.
To me these sums of money are so large that what the government is doing with them is all that can be done. The hon. member for York-Scarborough has asked in one of his questions not yet answered whether the government has considered investing in the private sector. If the government put, for example, $10 billion into the private sector it would make Petro-Canada look like peanuts. Who would be the first to cry about socialism if we were to buy private equities? The official opposition. The simple truth is the sums of money are so large and the problems of debt management if these funds were diverted to some other use so great that the government of the day would have no alternative but to deal with the account as this government is doing now.
It is worth noting that, with a fund of $10 billion and a rate of interest which is credited at 8 per cent, the annual interest earnings on that fund are approximately $800 million. I put some questions on the order paper for the benefit of the hon. member for Winnipeg South Centre (Mr. McKenzie)-


Mr. Baker (Grenville-Carleton):: You put them on for your own benefit as well.


Cyril Lloyd Francis: -who says he does not have much information in this regard. I suggest that he look at Hansard for October 10 and January 23. I believe that the question he put on the order paper was answered last Friday. One of the reasons why questions are answered the way they are is because of the manner in which they are asked. If one asks a straightforward question, one gets a straightforward answer. If one asks a

complicated question, such as actuarial evaluations and so on, a great deal of time and effort is involved to produce an understandable answer.
The cost of basic pensions for the fiscal year ending March 31, 1978 was $252 million plus the cost of escalation, which was $113 million, a total of $365 million. As far as most people are concerned, when interest earnings are of the order of $800 million per year and total disbursements for pensions and escalation are of the order of $400 million per year, this does not project a disaster. Most people would say that is a fair margin of security.
The government hired Tomenson-Alexander Ltd. to do a technical study. There is no secret about that report although somebody suggested it was hidden. Mr. Colin Brown, in a full page newspaper advertisement, said that you could not get it. The minister answered that many copies were distributed. I have a copy and every member of this House has a copy.


Stanley Howard Knowles: He can have mine.


Cyril Lloyd Francis: I suggest the hon. member keep it, because it may be useful for a certain curiosity value. He might even find it more interesting when I am through with my comments today.
The people who did that study said the $10 billion is not enough, that it should have been increased by something like 70 per cent to be actuarially sound. Now, what does "actuarially sound" mean? Well, Mr. Speaker, it means that the actuaries tell us what the future is going to be-from the year 1990 to the year 2025. One of the great things we all have to learn, Mr. Speaker, is our limits. I recognize that an actuary can study the tables of life expectancy and mortality. I know actuaries have great skill and fine mathematical formulae. But when they project the rate of interest, not today but 25 years from now, 35, 45 years from now, may I suggest that that is not within their professional competence. When they have to project the rate of increase of wages in that period, they have no special claim to an expertise. When they have to project the rate of increase for the consumer price index, there is no special wisdom in their hands.
In making their projections and in stating that there was a $5.8 billion deficiency as of March 31st, 1978, they made the assumption that the average rate of inflation would be 6 per cent per cent, compounded, that the average rate of salary increase would be 8.5 per cent per year compounded, that the average rate of interest earnings would be 8.25 per cent compounded, and they assumed that the average retirement age would be 61.5 years. Well, Mr. Speaker, I wonder if there is a reputable economist in Canada who is prepared to say that the rate of interest is going to be 8.25 per cent and the consumer price increase 6 per cent between now and the year 2025? Tomenson-Alexander Ltd. did not hesitate to say it and made it absolutely basic to their conclusions.
I put a question on the order paper using these assumptions, and they are all contained in the notes of the Tomenson-Alex-
February 12, 1979

ander firm in the department. I asked, using their projections and these assumptions with no change in the public service superannuation plan, how much money would be in the account in the year 1990. The answer was just about $40 billion, and if there were no change, in the year 2025 it would be $1,200 billion. They said that was not enough, that we had to increase the base by 70 per cent to make it actuarially sound. They would have had $2 trillion in the account by the year 2025, and $70 billion in the account by the year 1990; then it would be actuarially sound.
A question of professional integrity enters at this point. I question the professional integrity of a firm that puts in a $5.8 billion scare figure. When it came to writing in the projection for 1990 and the year 2025, they deleted that from their final version. They thought it might impair public trust, and they were right. It certainly would have impaired confidence in their work, Mr. Speaker.
I hope these experts will come before the parliamentary committee, and that Mr. Colin Brown will come before the parliamentary committee. I hope they will tell us why they feel these astronomical sums have to be even more astronomical. 1 hope they will tell us on what great scientific basis they can make these constant predictions of interest rates, changes in the consumer price index, average salary rates and even age of retirement, Mr. Speaker.
I am not at all sure that we are going to face this continuing decrease in average retirement age. I always look to my friend the hon. member for Winnipeg North Centre, who tells me he cannot afford to go to the Senate as he would have to retire too soon! I admire him. Sir, that is not a derogatory remark. My hope is that when I am his age I will do as well. The right hon. member for Prince Albert (Mr. Diefenbaker) still carries his load in this House. The fact is, Mr. Speaker, that there are members who contribute to society in a very real way. The pressure that is on to retire at an earlier age is tempting for some and a matter of real concern to others.
I simply wish to raise the question in a time of falling birth rates, a time when Canada is going to have to think of the people who are employed and creating a standard of living for all of us. The hon. member for Winnipeg North Centre said it eloquently not so very long ago. Whether or not that age might stabilize, I think there are good reasons why 65 should be an average retirement age for a person in good health and in possession of his or her faculties.
I am simply saying to you, Mr. Speaker, that there is nothing terribly scientific about these figures thrown at us. When the actuaries claim to be experts on those matters in which they are not competent any more than anyone else, then they are being deceitful, and there is a question of professional integrity when they do not give us their working figures.
The hon. member for Hamilton West (Mr. Alexander) says that I said we did not need the bill. It was the member for Winnipeg North Centre who said we did not need the bill.
What this bill does is change the basis of paying indexation. It takes the surplus earnings out of the big account-above 4
Pensions
per cent-and makes them available to pay part of the cost of indexing, in addition to the money in the supplementary retirement benefit fund. Mr. Speaker, if we do not do that then we are going to look foolish. The hon. member for Winnipeg North Centre knows very well that the program is a target for completely false criticism-shallow criticism-if we do not do something like this to rationalize the two plans and put them together. One fund is earning excessive interest and is growing at a rate that is going to create an embarrassment of riches for the government, and the other is inadequate. There is a logical thing to do, and that is put the two together, and that is one of the essential elements of this bill. That is why we have to have the bill, Mr. Speaker.
I listened with a great deal of interest to the argument of the hon. member for Hamilton West. He said we would have to have a large number of witnesses. The list seemed endless. I hope that he is not saying that this is something of a filibuster on the bill. I hope that a reasonable number of witnesses will be called. I hope all the staff associations come; that goes without saying. I hope Mr. Colin Brown comes. He earned it, and I hope he has the courage to come and defend his point of view. I hope the experts who said all those dreadful things about the future of the superannuation plan, on the basis of the most incredible assumptions, will be there.
It is interesting to see how private industry is changing its points of view. I think there are two basic problems in the pension field that have not been properly examined. The first relates to the disposition of excess interest earnings. I can understand why a private employer without a plan would say, "This is an expensive business and we cannot afford it; there is no means by which I can put aside enough money to anticipate the possible changes in the cost of living". But where a fund exists, Mr. Speaker-and the case of the public service is a clear one-that fund will then gain from the changes in interest rates, and those windfall gains in interest rates provide a basis for paying for the indexing of public service pensions.
The bill says we will look at the situation every three years.
[ Translation]
With this legislation the intent is to examine every three years the funds available for indexing pensions. This includes the amount on which interest exceeds 4 per cent. I am referring to moneys invested in Canada's national debt. This also includes the moneys contributed by civil servants as a percentage of salaries, and an equal amount contributed by the employer. The indexing rate will be lower than the interest rate. If it can be ensured that the interest rate exceeds the cost of living increase, the inflation rate, the public service superannuation fund will provide for this.
I would like to quote from a speech made by a spokesman from private industry, the president of the Crown Life Insurance Company of Canada. It is a most interesting speech and

February 12, 1979
Pensions
there are parts of it which I found fascinating. Mr. R. C. Dowsett in his speech of January 18 said:
Post-retirement inflation is a frightening prospect for anyone living on a fixed income. Private sector employers have been reluctant to put in place automatic indexation schemes to increase pension payments in line with the consumer price index increases in the future because of the unknown future drain on future business profits.
In recent years, many employers have granted ad hoc, after the fact, ex-gratia enrichments of pension payments to compensate in part, at least, for past inflation from time to time if, in fact, current company profit levels are big enough to allow such enrichment.
But retired employees-gratefull for ex-gratia enrichments-still don't feel very comfortable about the future when the employer may not be inclined to be generous.
Mr. Dowsett then went on to say:
-there is an inflation premium built into the rate of return earned currently by pension assets. Interest rates earned on pension fund assets in recent years have included such an inflation premium.
What has happened to the earnings generated on pension plan assets by this inflation premium? They have been used to offset the cost of plan improvements-that is, to help improve level starting pensions for long service employees. They have been used to improve starting pensions for those employees retiring early.
They have not been used to enhance the benefits payable after retirement to correct for inflationary erosion then occurring-


Stanley Howard Knowles: Shame!


Cyril Lloyd Francis: I say it is a shame especially when I read about the earnings of the Crown Life Insurance Company of Canada in Saturday's Globe and Mail. Crown Life Insurance Company reported $1.32 a share for the year ending 1977. But the Department of Insurance said that that was not revealing their earnings fairly. They required a different basis for revealing earnings. If the new basis had been adopted they would have earned $6.22 a share in 1977. But for the year ended December 31, 1978 they are reporting $13.33 a share.
In the case of this company it is quite clear what has happened. It is not a mutual company. The funds invested have now earned at much greater rates than the actuaries had forecast. But those funds, the surplus interest earnings, have not been used to pay the extra to those who are drawing pensions from that company-


Stanley Howard Knowles: -whose money it is.


Cyril Lloyd Francis: Whose money it is. I wonder if Mr. Colin Brown has any questions for the Crown Life Insurance Company. I wonder if he is prepared to go to them and say, "You have to find a means by which extra earnings on your investment as a result of the windfall increases in interest are going to be paid to people who are retired". That is all the Government of Canada is doing. It is saying that the windfall interest earnings on that huge sum invested of $10 billion are going to pay the cost of indexing pensions.
There is a basic doctrine in law, that you come with clean hands. Those who tell us that it is going to make the country bankrupt to pay an increased pension according to the cost of living to people who are retired at a time when they are

pocketing such immense sums of money as this cannot have a clear conscience.


Some hon. Members:: Hear, hear!


Cyril Lloyd Francis: I will listen with a great deal of interest to the person who will speak for the official opposition in this House. I know the opposition House leader, who is a very busy and humane man, the hon. member for Grenville-Carleton (Mr. Baker), has an understanding of this matter and is sympathetic to the plight of retired civil servants. I know that it is also true of the hon. member for Ottawa-Carleton (Mrs. Pigott). I believe the people of this area have the right to know where the hon. member for Ottawa Centre (Mr. de Cotret) stands. Before coming into this House, he was chief executive officer of an organization that attacked escalation of pensions. That organization was the Conference Board in Canada. He said that it would break Canada if we paid for indexation and subscribed to the point of view of Mr. Colin Brown. During the recent by-election that same member for Ottawa Centre had a bit of a change of something; he said he was for indexation during an open line program. I invite the hon. member for Ottawa Centre to come into this House and tell us what he believes.


Some hon. Members:: Hear, hear!


Cyril Lloyd Francis: I know his constituents are anxious to know what he believes. Does he subscribe to the viewpoint of Mr. Colin Brown, that the fund is not actuarially sound, that there is not enough money in it, that we cannot afford to pay for indexation, that we have to cut it back? Who are the spokesmen for the official opposition? What is their position?
When I listened to the hon. member for Hamilton West last Thursday night, I was not sure what the position of his party was. On one hand they denounce Colin Brown, and on the other hand they say they do not know. They say there are not enough studies. They say there have not been enough actuarial reports. Members have the right to know what their policy is. Does the policy of the official opposition support indexation of public service pensions by putting together these accounts in the way roughly suggested in the bill before us? Does the official opposition have another way? Are they prepared to say to those people who are retired in this area that they agree Canada can afford to pay a constant amount to keep abreast of the purchasing power of the dollar after retirement?
We are saying that if there is inflation then pensions will be adjusted according to the cost of living. We know when a fund the size of the public service superannuation fund exists and that fund is earning money according to current rates of interest that there is more than sufficient money to do the job.


Some hon. Members:: Hear, hear!


Mr. Paul McCrossan (York-Scarborough):: Mr. Speaker, it is an honour to rise here today to address one of the most emotional and misunderstood areas of government operations, amendments to the public service pension plans.
February 12, 1979

I referred deliberately to amendments to the public service plans in the plural because, as an actuary, I believe, along with the hon. member for Ottawa West (Mr. Francis), that the Public Service Superannuation Act and the Supplementary Retirement Benefits Act are merely separate parts of the whole. They must be viewed together to get a clear picture of what is happening.
For example, the changes proposed in Bill C-12 are only changes to the Supplementary Retirement Benefits Act. However, I believe that if these changes are put into place a significant extra annual cost in the order of $100 million may be incurred under the Public Service Superannuation Act. The cost to the PSSA is not mentioned in the bill; it is hidden. That is why the actuaries and I who reported to the government in the spring on these plans urged that no change be made to either plan without examining the effects and cost of the change on both plans.
On all sides we, as members of parliament and as members of the public, are being bombarded with facts. Most of these facts are one-sided presentations of the actual situation. Many are downright misrepresentations of the actual situation. Indexed pensions are available to the Canadian public as a whole. Both the old age security and the Canada and Quebec Pension Plan payments are indexed for the cost of living. However, very few private pension plans are fully indexed. The actuarial survey tabled in parliament last spring indicated that only .6 per cent contained a full indexing provision. On the other hand, 80 per cent of the plans in the private sector have some form of post-retirement adjustments. These average 66 per cent of the change in the CPI.
It is obvious that if the public service is to be treated equitably in our society there must be provision for some indexing. However, we in parliament have two publics to represent, the general public and the public service. We have an obligation to see that the public service receives a first class pension, a pension that we can be proud of providing in recognition of service to the state. However, we also have an obligation to the general public to ensure that we do not create a preferred class in society, a class with benefits so far beyond what is available to the general public as to create serious social inequity.
Fully indexed pensions for civil servants were introduced in 1973. I must admit that in reading Hansard quite frankly I was amazed to find out that from introduction of the bill on first reading the royal assent of the bill took a grand total of ten days. On second glance, Mr. Speaker, this probably was not all that extraordinary because even though the then president of treasury board indicated that a contribution of "one-half of 1 per cent to go with the government's matching contribution will almost certainly be insufficient to cover the cost of escalation", there was a clear implication in his remarks that the cost was unlikely to be too much greater. 1 say there was a clear implication. I certainly would draw that conclusion from the remarks. However, a close reading shows
Pensions
the president of treasury board did not state that the funding was almost adequate.
Last April we had an estimate for the first time of what the indexing provision would cost. The indexing suggests that the employer contribution is of the order of 8.5 per cent of payroll. In other words, the initial contribution was one-seventeenth of what was required to be set aside. The original provision missed the mark by some 1,700 per cent.
We now know that in those ten days we approved measures which established an initial unfunded liability-that is, the cost of the benefits granted-of approximately $6 billion. The total budget for the Government of Canada in the fiscal year 1973-74 was $23 billion. In this one bill we spent the equivalent of one quarter of the total government spending in the year without seeing so much as an estimate or projection. I suggest that presenting a bill of this magnitude without any serious financial warnings was either dishonest or seriously negligent.
Public opposition to these pensions developed over several years and much criticism, informed and uninformed, was aired. In October, 1976, Treasury Board released the "Basic Facts" paper. The stated purpose of the "Basic Facts" paper was "to assess the retirement benefits of federal public servants ... To review how these benefits are financed and inform the House of Commons ... of some preliminary conclusions".
This document sought to establish both the reasonableness of benefit levels and the soundness of funding procedures. However, this "Basic Facts" paper contained several of those misrepresentations that I referred to. It stated that the impression that public service pensioners typically received pensions greatly exceeding those of most working Canadians was a misunderstanding. It stated that recent allegations that public servants live in a pension paradise are devoid of factual basis. It also stated that basic pensions are financed with the same actuarial principles which generally apply to private sector plans.
Actuaries are a wary breed. They are not easily excited. They are noted for their sang-froid. However, when that basic facts paper was published the Canadian Institute of Actuaries representing all actuaries in Canada, including all federal government actuaries, took an unprecedented step. It decided to issue an unsolicited public statement. If I may quote in part:
This document which was tabled ... purports to defend the public service pension system ... What is ironic is that the spuriousness or dubious validity of so many arguments ... aroused the suspicion or outright condemnation of practically every professional actuary who has examined the document.
We believe it is more constructive to address ourselves to two key questions.
1.	Is the system being properly financed?
2.	How do the benefits provided by the system compare with those of other Canadian employers?
No attempt is made to recognize the currently accruing cost of indexing ... In our opinion the value or cost of the indexing adjustments is systematically concealed and deferred for payment by future generations of taxpayers and public servants.
The benefits provided by the public service system ... are more generous (and in most cases much more generous) than those provided by ... private sector employers ... given a thorough ... understanding of these benefits ... Most

February 12, 1979
Pensions
private sector employees would be only too happy to contribute at a comparable rate if their employers would agree to provide comparable benefits.
In view of the furore created over this issue, the actuarial firm of Tomenson-Alexander was commissioned on March 23, 1977 by Treasury Board to determine the future cost implications, advise on the extent to which the compensation policy takes account of benefits under PSSA and SRBA, comment on the "Basic Facts" paper, assess other actuarial considerations and make recommendations regarding future actuarial investigations and reports. The report was sent to the then president of treasury board on November 30, 1977 and released on March 9, 1978, at which time several amendments to the act were indicated.
The report was very interesting. It indicated that no valuation of the plan had been made since December 31, 1972, before unlimited indexing was introduced. Not only had the government not found out what the plan was going to cost before they introduced it, but they had not found out what the plan was actually costing after they introduced it. This surely is the height of folly. If we are ever to convince the general public that public servants do not regard the public purse as virtually bottomless, as the Auditor General alleges, we must begin to subject ourselves at least to the rudimentary discipline of finding out what on earth these programs we have adopted cost or will cost.
The actuarial commission pointed out that the government was not funding its pensions in anything like the manner accepted in the private sector. In making comparisons with the private sector the government was even confusing the true cost incurred by the program with the smaller amounts that it was setting aside year by year.
In his introductory remarks to the House, the President of Treasury Board (Mr. Buchanan) referred to the $490 million that the government is setting aside each year as the cost of these benefits. The point is that $490 million is not the true cost. They are not reporting the cost according to generally accepted accounting principles; that is the point. The government sets one set of rules for itself, rules that the private sector cannot possibly match, and then tries to pretend that the cost is much lower.
Another point in the initial address by the President of Treasury Board was that the government felt that private sector employers should be encouraged to introduce benefits along the same lines as public service pensions. If the private sector did that, it would have to conform to the rules of accounting for costs of pension plans available in the private sector. They would have to charge through an extra 10 to 20 per cent on salary. In other words, if they adopted these plans it would be equivalent to a 10 to 20 per cent salary increase on top of the regular salary increase.
A week ago we had the spectacle of the Prime Minister (Mr. Trudeau) hectoring the banks for giving bank tellers a total increase of 11.5 per cent. The President of the Treasury Board is suggesting they should get an additional 10 to 20 per cent on top of their normal increase to bring them up to the govern-

ment's level. Who is directing the economic policy of the country? On one hand we have people saying-


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



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
SUBJECT MATTER OF QUESTIONS TO BE DEBATED The Acting Speaker (Mr. Turner): Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows; the hon. member for Algoma (Mr. Foster)- Central Mortgage and Housing Corporation-Community services program-Signing of agreement with Ontario; the hon. member for Central Nova (Mr. MacKay)-Government Expenditures-Policy respecting ex gratia payments; the hon. member for Winnipeg North (Mr. Orlikow)-Labour Conditions-Request for details of wage settlements.
It being five o'clock the House will now proceed to the consideration of private members' business as listed on today's order paper, namely notices of motions, public bills.

Yvon Pinard: Mr. Speaker, there seems to be unanimous consent for the House to proceed with the debate on notice of motion No. 15, and for the other notices of motions to stand and retain their rank.


The Acting Speaker (Mr. Turner):: Is it agreed that motions Nos. 7, 9, 13 and 14 are allowed to stand by consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: Agreed and so ordered.

[ Translation]


SOCIAL SECURITY
Joseph Adrien Henri Lambert: That, in the opinion of this House, the government should consider the advisability of having parliament adopt a measure authorizing payment of an allowance to housewives who remain at home to take care of their family instead of joining the labour market, the purpose being to ensure a global income corresponding to the family's needs by providing an additional family income to that earned by the father.
February 12, 1979

He said: Mr. Speaker, in February 1978, I had the honour to command the attention of this House by introducing a motion dealing with the subject matter that has just been stated. That motion, like the one now under consideration, was intended to provide a means for increasing family incomes by paying an allowance or whatever to recognize the merits of our Canadian mothers and thus increase the total family income.
Mr. Speaker, 1 recall that the majority of members who had participated in the debate on this motion agreed on the principle. They recognized the rationale of the motion and none of the members had said anything against it or found a way to oppose to it. However, the solutions suggested to achieve that purpose were somewhat different. Mr. Speaker, if I am back this year with the same subject, it is because the problem has not been solved and because 12 months later, I am more convinced then ever that this parliament must make a financial effort to acknowledge that housewives in our country play a very important part not only within the family itself but within the community at large and also because they contribute to the increase in our gross national product. It is a fact we must acknowledge. Mr. Speaker, this year is the International Year of the Child. When there is a child, there is a mother. Sure, we must recognize the children's rights but mothers have rights too. Their rights are recognized in well-off families with an adequate income to meet the needs of each member of the family. But we cannot and should not separate the rights of the child from the rights of the mother.
My main concern, Mr. Speaker, lies with families whose income is inadequate to meet the needs of all their members, with families with income below the poverty line. Mr. Speaker, we must be consistent and honest with ourselves. A few years ago the Canadian parliament itself set up a Senate committee under the chairmanship of Senator Croll to study the situation of Canadian families, the poverty level, the lack of money in a country as prosperous as Canada blessed by God with enough natural resources of all kinds to meet the needs of all its inhabitants.
Mr. Speaker, in the report from the Senate committee, poverty is defined as follows, and I quote:
The time has come to stop blaming the mirror for not being a window-
The French translation of that quotation reminds me of the story of the ostrich which sees the storm coming but pretends there is no storm and puts its head in the sand until the storm is over. We, in parliament, are not ostriches, and we would like to take our responsibilities. The quotation continues:
The time has come to stop blaming the mirror for not being a window, for presenting us with things we would rather not see.
Obviously, everybody would like to see a higher level of confort for all. But all cannot be equally well off. Even the communists who preach the theory of economic equality do not have that. That is a fact. But as democrats, as people who believe in a distribution system which is as fair as possible, we should concentrate on helping those in the lowest income
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brackets. We should make sure that at least the basic needs of the weakest in our society are met. So much the better if some people are better off. If my neighbour is well off while I am in dire straits, I can ask him for help. But let us least make sure the basic human needs are not. That must be our goal, and Canada can achieve it. The inquiry report said, and I quote:
The time has come for a little common honesty.
I believe that all together we are able to do that.
The poor, after all, are not poor of their own accord.
Of course, it must not be very funny! I was extremely poor once, and I was not so of my own accord. I accepted my situation because I had no choice. Like many of my fellow citizens, I experienced the depression years. Everybody remembers those extremely difficult years. It was far from pleasant. Since we did not know any better, we accepted our situation. But today, with all the media, with television which shows us all kinds of things, pleasant and less pleasant things as well as hateful things, everybody is well informed.
And further on:
The poor, after all, are not, as some still pretend, poor of their own accord. The poor have no uncommon moral flaw that sets them apart, let alone condemns them. They are casualties of the way we manage our economy and our society-and that fact is increasingly obvious to the poor themselves.
Mr. Speaker, there was a reason for spending money in trying to find out what the situation is and how to remedy it. So, in our society of 1979, we must do everything possible to discover the means to ensure poor families additional income and so enable them to live a bit more decently, without it impoverishing us collectively.
Last weekend-all the hon. members have seen similar cases I am sure-the head of a poor family came to my office to explain his situation. There are five of them in the family. The mother is sick; now sickness is not a fault; no one tries to be sick but when sickness comes it has to be accepted. And the father went on explaining how much medication costs him each month. Finally, I asked him what his income was. He works for an agency . . . now, what is it called ... a security agency. In any event, he earns $3.37 an hour. On the basis of a 30-hour week, how much income does that make? Deduct from that the pension plan and unemployment insurance contributions, and what have you left? About $122 a week. That is not much more than $6,000 a year.
It is easy therefore to understand how difficult it is for him to meet his obligations. His wife worked and still does as best she can. If the state, in an effort to distribute more equitably the gross national product, helped to raise the living standard of those families whose income is below the poverty line, if an attempt were made to grant those mothers some allowance that could supplement the income of the father who goes out to earn his family's keep we would be no worse off for it.

February 12, 1979
Housewives' Allowance
Last year, when this motion was discussed, one hon. member said: Well, listen here, if the hon. member wants to pay his wife a salary, it's okay by me. But it isn't up to the state to do so. To talk like that is to distort voluntarily the real meaning of the motion I had presented. Obviously, if I were president of a company and had a salary of $50,000 a year, I could pay $5,000 to my wife to help her look after her household duties, if I wanted to. However, this is not the situation of the unemployed, nor is it the situation of the welfare recipient. And they are in great numbers today, Mr. Speaker, in our society. The essence of the motion is purposely being clouded. What does the hon. member for Bellechasse intend to achieve with his motion? He simply wants to implement in our country the altogether practical idea of a minimum family income to ensure that each and every member of a given family has at least the opportunity to satisfy his or her fundamental needs.
Mr. Speaker, in the spring of 1978 the Minister of Finance (Mr. Chretien), the right hon. Prime Minister (Mr. Trudeau) and the cabinet introduced a measure to reduce the sales tax in order to help families with their budget and remove this burden of the sales tax on all items which are required in everyday life. Those were the arguments given by the Minister of Finance at the time. He submitted this was designed to exempt the largest families, those that consume most, from that sales tax burden in order to increase their net revenues. Second, it was meant to help this country's economy, because the increased purchasing power given to those families might boost consumption and thus allow our economy to perform at a more normal rate, through wider use of domestically produced goods. Such was the aim, to increase the purchasing power of individuals and families.
Mr. Speaker, last week I attended part of the first ministers' conference, between the Prime Minister (Mr. Trudeau) and the provincial premiers. There was a consensus, and I welcome this, that it was important for a new Canadian constitution to include in the first chapter the rights of individuals and families. Indeed, Mr. Speaker, the individual is entitled to sufficient revenues from work and other sources where he is unable to support himself. The same thing goes for families, Mr. Speaker. Families are the cornerstone of our society, the basic cell created by the Lord, because as I said if it were man's invention it would have long since disappeared.
Therefore, Mr. Speaker, in the name of Canadian mothers who really contributed and are now contributing to this country's development by giving our society boys and girls to fill important functions, I say we have an obligation, a duty to them, and I feel this is the time to try and show them that we, as managers of this country's affairs, recognize their important role in our society through economic and financial provisions.
Mr. Speaker, I am quite willing to support alternative measures if they fulfil that objective. But my insistence is that we make an effort to compensate for the purchasing power lacking in families at or below the poverty line.

As I said, Mr. Speaker, whether she be poor or a millionaire, the mother giving birth to a child contributes just the same. She puts the same effort and deserves the same recognition. If the millionaire mother has advantages, so much the better. But we as legislators should strive to compensate for the low income of families where the provider earns a mere pittance, or is unemployed.
Heaven knows if there are jobless now in this country. I do not want to blame anyone but I say that today it is disappointing for mothers who made sacrifices to enable their young daughters to attend high school, the CEGEP or university so that they may earn a decent living, when those young girls- and it must be the same thing for everyone in this House- when those young girls after completing their education apply to an employer with their diploma, whether in the federal government or the provincial government or in the private sector, and they are asked: Do you have any experience? Since the young girl has just finished school, she can only answer: No, sir, I do not have any experience but I am willing to try. The employer tells her: We only hire experienced people here. Those young girls make their way back home and tell father or mother: It's too bad, he would have hired me, but I have no experience.
Well, Mr. Speaker, I would like the government, the Parliament of Canada, to be aware enough of those situations- there are hundreds of them-I would not want my words to be distorted-to allow those mothers who voluntarily want to stay home, because their role is to stay there, not to be penalized, not to be punished for choosing that role as opposed to those who decided to go and work in industry, in business or elsewhere. We now have in the province of Quebec-I say so because I know what I am talking about-young girls, registered nurses, who are refused jobs because other people without a degree are being hired to do the same work for less. I see, Mr. Speaker, that you are about to tell me that my time is up.
I would have had so much to say in favour of mothers, but I want all mothers in Canada to understand that I wanted by my motion to show them that they are performing an important role in this country and that we have a duty to them. I urge all my colleagues in the House to consider that we should fulfil our obligations to them by recognizing a right-the right to a decent family income.


Frank A. Philbrook: Mr. Speaker, I should like to extend the customary commendation to the hon. member for Bellechasse (Mr. Lambert) for bringing forward motion No. 15 respecting the payment of an allowance to housewives. Unfortunately, I cannot support the motion, although certainly I support the principle, as I am sure all members of the House do, of assisting families to meet spending needs which result from the presence of children within the family unit. I believe, however, that the measure recently enacted by this parliament
February 12, 1979

to assist the lower middle income families in the form of a refundable child tax credit is far superior, both conceptually and practically, to the specific means of support suggested in the motion before us.
The hon. member would have the government consider a way of ensuring a global income corresponding to a family's needs. This is precisely the process that has been under way for several years and which led to the refundable child tax credit.
It surprises me that the hon. member would bring before this House a motion that is word for word the same as one he introduced previously and which was discussed in the House on two occasions last year, in one case by myself. The motion before us reflects none of the useful and constructive comments that were made by members of all parties in previous discussions. Most of all, it ignores the significant change which the new child tax credit represents in the way the federal government gives financial support to families with children.
In his motion and his remarks, the hon. member appears to recognize that many women have entered the labour force so that they and their families will be able to enjoy a decent standard of living. I wonder if he has considered how much money it would take to replace the lost earnings if these women were to stay at home as the hon. member would like them to. The figure would be in the billions of dollars. Where would the hon. member suggest we get this money? In December of last year, married women made up almost one quarter of the Canadian work force. Can the hon. member imagine the disastrous effect on the economy of this country if the contribution of these millions of women was lost?
Quite aside from any financial need to work outside the home, this government believes strongly that women as well as men, regardless of their marital or family situation, have an undeniable right to seek remunerative employment outside the home if they so choose. Suggestions such as the one implicit in this motion, that "a woman's place is in the home", particularly if reinforced financially as the hon. member suggests, lead to the creation of an atmosphere in which this basic right to a job can be questioned or denied. This is deplorable.
The motion would have us pay allowances to all "housewives who remain at home to look after their families." They are not even to be restricted to those with young children or to families in financial need. Clearly this is a measure aimed at keeping married women out of the work force. It is not clear why, in the absence of children, the performance of housework should by itself merit financial support from the government.
The hon. member has not yet given us any indication of how this allowance would be financed. Perhaps he would do this by taking away the family allowance and the child tax credit. He would be able to give those who stayed at home a bit more than they are getting now unless all the eligible women stayed home. Whatever increase he could finance in this way would not be large. It would not be large enough to persuade women from low income families to give up their jobs.
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[ Translation]


Joseph Adrien Henri Lambert: Mr. Speaker, I rise on a point of order-


Mr. Deputy Speaker:: The hon. member for Bellechasse on a point of order.


Joseph Adrien Henri Lambert: Mr. Speaker, I am quite prepared to respect the hon. member's time, but I would not like the population to be misled. The hon. member is saying that perhaps I would like to see the family allowances disappear and so on. I never said that; I never even thought about that. I said and I repeat that I would like people to be free to decide whether or not they will go out and look for a job.


Mr. Deputy Speaker:: Order, please. I can understand that the hon. member does not like the comments made by the hon. member for Halton, but the fact is that one of his colleagues can rise and refute the hon. member's arguments later. The Chair cannot allow simultaneous and repetitive interruptions which can prevent other members from carrying on the debate.


Frank A. Philbrook: Mr. Speaker, may I just say, in the interest of saving time, that the first speaker suggested these things. I am asking questions, such as where would the money come from, and so on. But I would like to carry on.
As I said, many of these women will not give up their jobs, and their families would not have enough to live on. How would the hon. member explain to these women that he had taken away their baby bonuses and their tax credits to give the money to those who stayed home, if in fact that is what happened?
When the same motion was discussed in the House on February 27 of last year, the hon. member for Vancouver-Kingsway (Mrs. Holt) expressed a view which I believe is shared by most Canadians. She said, as reported at page 3265 of Hansard:
If there is work to be done in the home it should be paid for by whoever is earning the living, be it the man or the woman.
There must never again be a Murdock case in Canada.
"Women and Pensions", a report produced last year by Kevin Collins for the Canadian Council on Social Development, adopted a similar view, concluding that the recognition of the value of housework should be enhanced through fundamental reform of the family law as it affects property. The report pointed out that current financial obligations between spouses are largely based on concepts on dependence and survival needs, rather than on a recognition of the value of housework or other unpaid contributions to the building up of family assets.
The principle of joint contribution to the acquisition of assets regardless of who pays the money out has not been widely established. This is, of course, an area which falls within provincial jurisdiction.

February 12, 1979
Housewives' Allowance
Pay for housework, the report also points out, does nothing to solve sexual division of labour inside and outside the home; it may simply serve to make it more rigid and to legitimize it. I would not want to see government interfere in family decisions in the way this motion suggests. To paraphrase an earlier statement of some renown, the state has no place in the kitchens of the nation.
I believe that the hon. member for Halton, that is me, Mr. Speaker, raised a very valid point in relation to this motion when it was last discussed in the Flouse. It is a point which well bears repeating. Rather than trying to keep women in the home, he suggested the need for much greater variety in the organization of our work life. In particular, a greater use of regularized part-time employment could benefit parents and enable them to utilize their skills and contribute to the family income while sharing in housework responsibilities. In this way, one parent, usually the woman, would not be forced into the lonely, isolated existence which too often characterizes the lot of the housewife.
As I pointed out, many mental health experts recommend part-time work for young mothers to help them overcome the sense of deprivation of not using their education and prior training, and to cope with the lack of contact and stimulation which they experience when they become new mothers. If society and employers were to recognize the legitimate place of regular part-time work in the work world, this isolation could be reduced and, along with it, problems such as alcoholism, and emotional disturbances which are too frequently experienced by housewives. Greater availability of part-time work on a continuing basis would also allow more fathers to share more equitably in the performance of household tasks.
The motion presented by the hon. member for Bellechasse refers to an allowance for housewives which would provide "an additional family income to that earned by the father." The proposal neglects the plight of single parent families which are predominantly headed by women. I might add, however, that an increasing proportion of these families are being headed by men. As with most existing welfare systems, the proposal would evidently exclude such men from assistance. Even in the case of sole-support mothers, the proposed measure would be inadequate. Even though the member for Bellechasse has acknowledged in his motion and earlier statements that two incomes are often necessary these days to meet the expenses of a family, he would say to sole-support working mothers, "Sorry, if you want help from us, you will have to quit your job and stay home."
In contrast with this attitude, the child tax credit which has been enacted by parliament will result in about $106 million in payments to single parent families this year. These sole-support parents, of whom over 90 per cent are women, will not have to stay at home in order to receive this assistance. Of the money going to this group, $35 million will be a net gain to the lowest income single parent families, who are almost all headed by women.

In total, $810 million will be paid to women in the form of the refundable tax credit entirely to those in middle and lower income families. Despite the reduction in family allowance payments, women, as a group, will be getting $120 million more this year in payments than they would have under the previous system. The measure proposed by this motion is intended "to ensure a global income corresponding to the family's needs."
Successive governments in this country have recognized for over thirty years that there is a need for intervention in the way in which the free market system distributes its rewards. As impressive as it is as a generator of wealth and income, the market system, if left to itself, does not ensure that all of our citizens will receive income adequate to their needs and those of their families. Wage rates are set without regard to the financial needs of their recipients. This is as it must be if the system is to operate efficiently. Clearly there is a role for the government in compensating for this market failure.
The Marsh report on social security in Canada recognized this over thirty years ago when it recommended the introduction of family allowances. The then prime minister, the Right Hon. W. L. Mackenzie King, stated that society had a responsibility to assist in the costs of child rearing.
Child benefits delivered by means of the income tax system have an even longer history in Canada than family allowances. Child tax exemptions were introduced in 1918 only one year after the start of the income tax system itself. It is interesting to note that for a brief period during the Second World War the exemptions were replaced by non-refundable child tax credits.
Family allowances were introduced in 1945 to complement the tax benefits. The federal child benefits system grew in importance to the extent that, last year, it distributed about $2.7 billion to Canadian families, with most of this being paid directly to mothers.
It was recognized, however, that despite this assistance, there were still nearly 600,000 families with over 1 million children living in poverty. Studies of the children from such families have shown that they are more likely to be sick than children from other families. They are also more likely to be severely retarded in their physical development. As a result of these difficulties, children from poorer families are less likely to perform well in school and hence are too likely to end up in low paying dead-end jobs. They, in turn, are unable to provide adequately for the needs of their children, and the cycle begins again.
The social and economic costs of this tragedy are enormous. Pressures on government-provided social and health services are increased. The connection between poverty and crime and violence is also well recognized, particularly in our urban areas. We are all losers when thousands of our fellow Canadians live in poverty.
It was with these considerations in mind that the recent changes to our child benefits system were enacted. The effort was made to get more assistance to those families which most
February 12, 1979

needed it. The government was looking for ways to reduce the level of government spending, and yet at the same time it recognized the need to help low and middle income families. The introduction of the refundable child tax credit combined with other changes was seen as a way of achieving greater fairness and doing a better job with the resources at our disposal.
As hon. members are aware, the child tax credit is refundable. This important feature will mean that benefits will be received by families whose incomes are too low to be taxable, as well as by those in the middle income ranges. Two thirds of Canadian families will receive benefits from this new measure.
There are admittedly some additional administrative costs associated with this new approach. Compared to alternative ways of concentrating the benefits at the low and middle ranges of the income scale, however, the approach adopted is a sensible one. Furthermore, the benefits to be derived more than justify the additional costs.
For recipients of the child tax credit who have not previously been required to fill out tax returns, there may be some initial confusion. The measures announced by the Minister of National Flealth and Welfare (Miss Begin) to assist people in applying for these benefits should go a long way toward overcoming this problem. Ways of simplifying the procedure are being examined for application in future.
It is interesting that the motion before us speaks of the global family income, because this is precisely the concept that is being used to determine the amount of benefit each family will get from this measure. This approach was adopted because the government wanted to make the benefit correspond more closely to a family's need for assistance than would have been the case with a universal payment or if only the income of one parent had been considered.
Despite the reduction in the level of family allowances, this program will remain the largest single federal child-related program and will continue to be the foundation of the federal system of benefits. It will also remain fully indexed to the cost of living, as will the new child tax credit.
The new system that we have adopted is significantly fairer than the one in place previously. Low income families will now receive greater federal benefits than will high income families. This was not the case in the past and was the object of justifiable criticism from several quarters, including the National Council of Welfare in their report called "The Hidden Welfare System".


Mr. David MacDonald (Egmont):: Mr. Speaker, I think we are indebted once again to the hon. member for Bellechasse (Mr. Lambert) for bringing this particular motion before us. In the previous debate which took place in this House a little less than a year ago the matter received support from all sides of the House, with a number of very definite reservations. I do not think that, in the main, these reservations have changed very much.
I am most intrigued by the government's response this year as compared to last year, at least if that is the one that can be
Housewives' Allowance
measured by the remarks of the hon. member for Halton (Mr. Philbrook). I think that hon. member has, at least in some ways, improved the response from the government side in respect of this measure. He needs a bit more practise, perhaps, in reading, as indicated by the fact that when he started to quote himself he began by saying "he". I think, more seriously, he should do a bit more research in the area of child tax credit, particularly when he asserts, as he did almost as the main part of his speech, that the child tax credit meets a particular situation in recognizing the economic and social benefits of women in the home. I think that we need to do more research in terms of its impact with respect to women.
I was interested to note that the major concern of the hon. member for Halton was that the motion would have an impact on taking women out of employment situations outside the home, that it would create pressure to take women out of the market place and the mainstream of the economy, thereby forcing them back into a home-making situation. If the hon. member thinks that that is a problem, I suggest that he look at the principle which was adopted in the child tax credit bill. I will not repeat it because it was dealt with at some length both by myself and the hon. member for Kingston and the Islands (Miss MacDonald).
There are problems which are created by the principle which the hon. member referred to, in terms of the global family income assessment. From the standpoint of making a determination of greatest need, one can find little fault with the approach. But it is not a matter of dealing with the husband and wife in a position of equal equity at this point, because it is well established that the average income of women in our society for the same kind of employment that a man might do is only 60 per cent of that earned by the male counterpart. This is an indication that we still have a long way to go with respect to any kind of income equality.
The implication which is very much a part of the child tax credit plan is that there will be subtle and, perhaps, not so subtle pressures created to take women out of the work force and to force them, against their will, back into a domestic situation. I think it would have been useful if the hon. member for Halton had raised as well the problems in connection with the amendments to the Unemployment Insurance Act. We are still hearing the repercussions of that exercise.
If the hon. member had read the briefs by the National Action Committee on the Status of Women and the National Advisory Council on the Status of Women he would have found a number of reasons why they object to the approach which is being taken and which was creating a number of problems for women in the work force. However, that is not the substance of the motion before us this afternoon.
Since the hon. member for Bellechasse presented his motion, there has been more up to date information which has attempted to put a value on the work created in the home. In a study done in May, 1978, by Queen's University, they came up with a value of $60 billion, or one third of the gross national

February 12, 1979
Housewives' Allowance
product on work created in the home. A report by the Advisory Council on the Status of Women which came out in June, 1978, entitled, "Five Million Women, a Study of the Canadian Housewife", concurred with the finding, that the figure for work done in the home was very substantial.
The important aspect of the motion before us today, and which was before us last February 27, as I see it, is the recognition by society of the importance of the work done in the home. Quite obviously, this is the problem with which society and, up until now, the major organs of society, such as this House of Commons, have not adequately wrestled. As I said almost a year ago, I agree that more adequate economic and social recognition must be given to women who remain at home, indeed, not just to women, but men or women who remain at home.
I went on at some length in previous remarks on this same motion about the way in which lifestyles are changing to the point that increasingly men as well as women are taking on the domestic responsibilities in the home when they move out of the work force. Ideally, at some future point this is the kind of equilibrium we would like to achieve.
The hon. member for Halton quoted from a section of the Canadian Council on Social Development report having to do with women's pensions. His quotation bears repeating because it is the nub of the problem which we presently face, and that is that the pay-for-housework proposal does nothing to solve the sexual division of labour inside and outside the home. So far in this debate, this problem has not been referred to, but there is an acute and present problem having to do with elderly women in poverty as consequence of the many earning years they have spent at home raising families, looking after spouses and, as a result, not being eligible to contribute to pension plans.
According to recent statistics, the percentage of unattached women living in poverty jumped from 41.2 per cent to 45 per cent as of November, 1978. The percentage of unattached elderly over 70 living in poverty jumped from 58.1 per cent to 63.2 per cent, most of these people being women. Obviously there is a very pressing need to initiate some action with respect to the desperate straits in which older single women find themselves in our society, whether they are women who have worked for the greater part of their lives as single women, or women who have cared for families and who have been left in a destitute state in their later years.
In the advisory council report which was produced in June, they came up with a figure of some five million Canadian women who are performing up to 60 hours of work in the home per week. It should be recognized at the outset that the people who work in the home are not in a normal employment situation where they have an opportunity to report for work at a specific time, coffee breaks at mid-morning and mid-afternoon, or time off for lunch, personal duties, responsibilities, and so on. When we talk of women in the home, we are talking about women who work longer hours than in any other form of employment in our society, people who must work sometimes under extreme pressure, particularly during those years of

heavy responsibility while raising a young family. Yet in no way have we tried to look at the responsibility of society with regard to people in the home.
The June report of the advisory council said that housewives should be compensated for their contributions and that economic ways should be found, including such things as guaranteed annual incomes, special provisions within the Canada Pension Plan or inclusion of housewives in general social insurance plans.
We are far removed from reaching that achievement. The closest we have come was in the discussions we had in this House last year with respect to the problems of taxation affecting farmers who, in many instances, employ their wives, or small businessmen who employ their wives and they are not allowed to make the proper income tax deductions which recognize the real contribution that spouses make in those forms of industry and activity regarded as small business. There has been a real failure by governments to examine their responsibilities with respect to the largest form of employment that exists, and that is the home. As the advisory council stated in June, "pension policies should take into account that pensions are assets and therefore should be included in the splitting of the marital assets based on the equal contribution of each spouse." The contribution would come from work performed both outside and inside the home. In other words, the advisory council on the status of women suggested that the time has come to place an economic value on housework to give it the basis which it deserves.
It is interesting to note that so far in the efforts to achieve recognition of the importance of housework to society, even the most minimal kinds of recognition have been ignored. Some members will recall that just a few weeks ago the National Council of Women was here to meet with the cabinet and respresentatives of all parties. One of their major requests which they have put forward on previous occasions was that homemaking be included as a recognized occupation under the occupational index of the Canada Employment and Immigration Commission. Surely, Mr. Speaker, we can go that far. I am sorry that so far this has not been referred to by the government side, but I would think that this is one matter on which all members can agree-a beginning of recognition of the importance of homemaking to the economy so that it could be included as one of the recognized occupations in the occupational index.
There is very basically an issue here which I think the hon. member for Bellechasse has quite rightly brought to our attention with repeated emphasis, and that is that women in the home make a contribution that in no way has been recognized, either in terms of any kind of allowance or compensation or tax recognition, or even in terms of the recognized pension programs that deal with the plight of elderly women in our society.
I think, Mr. Speaker, we must also recognize that if we were to enact this particular provision by itself, without recognizing
February 12, 1979

the particular problems that women are presently encountering in maintaining their right to be a part of the over-all work force of our society, we might at this period cause a very serious dislocation.
As members will know, I and other members in this House have been troubled by the increasing references by members of the government to the problems that are created by the economy when women are increasing their participation in the work force. I think this does no credit whatsoever to the over-all economic strategy of the government in terms of trying to achieve greater employment opportunity for both men and women. I think that again this motion by itself would add only further momentum to the kind of misunderstanding and misdirection created by the government with respect to its attitude to women in the work force. However, Mr. Speaker, I think the essential principle-and that is the recognition of the contribution, both economically and socially made by people in the home, whether it be women or men-is rightfully brought to our attention. I would hope that in a further debate on this matter not only will we hear from the member for Halton, who is very interested in the issue, but also from the minister who has the responsibility for the status of women.


Mr. Deputy Speaker:: The hon. member for Ottawa-Vanier (Mr. Gauthier) on a point of order.


Mr. Gauthier (Ottawa-Vanier):: Mr. Speaker, I would like to ask a question of the hon. member. Since he is constantly referring to the report, I might specify that it is entitled: "Women and Work-Five Million Women: A Study of the Canadian Housewife" by Monique Proulx, published in June 1978. Is that right? While reading the report one of the things-


Mr. Deputy Speaker:: First the hon. member must get the permission of the hon. member for Egmont.

Does the hon. member allow a question?


David Samuel Horne MacDonald: Yes, Mr. Speaker.


Jean-Robert Gauthier: Mr. Speaker, what I am interested in, what is of concern to me, is to know what exactly does the hon. member think of the famous question asked of a woman: Madam, do you work? That question is of concern to me because it has a rather difficult and embarrassing impact when statisticians are canvassing neighbourhoods and asking that question of housewives, or mothers as the hon. member said. Could the hon. member tell us what his position is regarding that question which is, I think, basic? Does he consider that the housewife, the mother, is doing unpaid work in the proper sense of the word? What is his own definition and how would he answer such a question asked of every Canadian woman?
Housewives' Allowance


David Samuel Horne MacDonald: Very briefly, I think that given the fact that work in the home is the most prevalent occupation exercised by any individual in our society, and since I believe there are many occupations outside the home which are a lot less precise in terms of both their responsibility and activity which are defined in the occupational index, there could be devised basic criteria which would meet the question put forward by the hon. member for Ottawa-Vanier (Mr. Gauthier). I see no problem with that whatsoever, and I think that that would be the first step towards some real recognition in terms of its importance to the economy and to our society.


Mr. Deputy Speaker:: The hon. member for Winnipeg North Centre (Mr. Knowles).


Stanley Howard Knowles: Mr. Speaker, I do not want to see this motion talked out. Therefore my contribution will be very brief. The hon. member for Halton (Mr. Philbrook) criticized the hon. member for Bellechasse (Mr. Lambert) for putting down in exactly the same wording, the motion he has put down on previous occasions. May I congratulate my friend for doing just that, for staying with it. That has to be done around here, I can tell the hon. member that.
One of the other reasons why it is not necessary for me to speak more than a moment is because the issues have been well discussed by the hon. member for Egmont (Mr. MacDonald). I agree with him that it is good to have this motion before us because it brings into focus the whole thrust of recognizing the work that women do in the home. There are various ways it should be recognized. One is by an allowance which, after all, is the family allowance made larger, and another is by proper pension recognition for work done in the home. The other points raised are also important.
At any rate, Mr. Speaker, we have begun to move on this issue. We have moved slowly thus far, and I am glad the hon. member for Bellechasse is making a crusade of it. He has my support.


Mr. S. Victor Railton (Welland):: Mr. Speaker, in the few minutes that I have left I will take the opposite side. I feel that the changes in the benefits for children which have occurred since the motion was put on the order paper, and the changes which are going to assist low and middle income families, will pretty well do what the hon. member for Bellechasse (Mr. Lambert) requests.
Contrary to the opinion of the hon. member for Egmont (Mr. MacDonald), I would say that the problem is not a case of recognizing the obvious. All of us recognize the very important work of the housewife or the woman in the home. The problem is not so much financial reward, because I am sure we have other and better ways of ensuring they have enough on which to live. The main thing is to give the women a chance to get out of the house, to engage in work of a gainful character outside the home. The woman in the home is generally not so anxious for financial reward as to get out among other people.

February 12, 1979
Housewives' Allowance
There are a great many people in the low income category who never get a chance to go out and have a good time. As the hon. member for Egmont says, they do not even have a chance for a coffee break or to discuss what is going on in the world. They are absolutely house slaves. Just giving them an income and money would not get them out of that enslavement. They should have a chance, when they have finished bringing up the three or four children which is the family target in society, to engage in a gainful occupation so that they can hold up their heads with the male members of society.
At the same time, because of their restriction to the home and housework, we must recognize and admire their devotion. Of course it is obvious too, that some put in long hours but do not accomplish very much.
Because of their restricted life, I think women have a greater tendency to retire into senior citizens' homes than men do. As a consequence, they suffer a greater amount of mental depression than their male counterparts. I think this is due to the fact that they have not had the chance for wide contact with other human beings at all levels of society and with varied interests. This is because of the narrowness and bleakness of our culture, and their cultural possibilities. They would be far better off working 60 or 70 hours outside the home and all of them, as has been mentioned before, would do very well indeed to have at least part-time work for a certain portion of their lives.
Mr. Speaker, I see it is six o'clock. I am sorry I have had to give such a condensed summary of some of my points.


Mr. Deputy Speaker:: Order, please. The hour appointed for private members' business having expired, I do now leave the chair until eight o'clock tonight.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Buchanan that Bill C-12, to amend the Supplementary Retirement Benefits Act, the Public Service Superannuation Act, the Canadian Forces Superannuation Act, the Royal Canadian Mounted Police Superannuation Act and the Members of Parliament Retiring Allowances Act, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
The Acting Speaker (Mr. Turner):: At five o'clock the hon. member for York-Scarborough (Mr. McCrossan) had the floor.


Some hon. Members:: Hear, hear!


William Paul Joseph McCrossan: Mr. Speaker, as I was saying this afternoon, not only did the actuarial commission find out that the government had confused the true cost of the plan with the amounts it was setting aside, but the actuarial commission reported that the assumptions in the government's valuation were not realistic. In particular, they pointed to one specific pair of assumptions. First, even though pensions will be paid based upon final salary, no salary increases will occur, and second that although the fund was earning 7.6 per cent, it would only earn 4 per cent interest. In other words, the chief actuary was implicitly assuming that some of his assumptions offset each other. He was explicitly underestimating the cost of the plan by assuming that no future salary increases would take place, and hoping that this would be balanced out by explicitly underestimating the amount of interest earned by the fund.
I am sure individually these assumptions do not make sense. They do not reflect reality. It is even questionable whether taken together they make sense. But I would like to stress that at no time did the chief actuary ever indicate that the only interest required to be earned by the fund to provide the benefits was 4 per cent. He merely used this low interest rate, together with no provision for future salary increases, to simplify the calculation.
The consultants found that on the basis of their best estimates the combined cost of the Public Service Superannuation Act and the Supplementary Retirement Benefits Act for current employees was 15.3 per cent of payroll, and the current year's cost for past service benefits amounted to an additional 19.1 per cent of payroll. This 34 per cent compares with an average employer current service cost in the private sector of 5 to 6 per cent of payroll.
The consultants also found that no conclusion could be drawn as to whether the total compensation of the public sector was greater than the total compensation of the private sector, for a rather interesting reason. In spite of the fact that total compensation comparability was explicit government policy, and we still have a bill before this House saying it is explicit government policy, the government had never made a study to find out what the facts were. According to the actuarial report, the impression created by the basic facts paper that the value of pensions for federal public servants was no better than that found in the private sector was false.
The consultants made several specific recommendations; several of these affect this bill directly. They recommended that a valuation of the combined plan be made with each plan change. They recommended that these valuation assumptions be made as realistic as possible. They recommended that a valuation of the combined plan occur at least every three years. They recommended that the contributions to the plan

February 12, 1979

should be made in line with the results of the valuation as is required in the private sector.
In response to the actuarial report, the then president of the treasury board indicated that he was going to make changes which were "just and fair in terms of their impact on taxpayers", however at the same time "the principle of maintaining the purchasing value of pensions ... is a principle to which the government is committed and remains committed." It is rather interesting how he married these conclusions. He started by stating that there are experts who feel that we can count on seeing a long-term situation in which interest rates will be 3 per cent to 4 per cent ahead of the rate of inflation.
1 find that interesting because the only five-year period over the past 55 years in which the real return was 4 per cent or above was the first five years of the great depression. I will admit that there are many experts who believe that this government's economic policies are leading us inexorably into the next depression, but surely that is not something the government wants to count on in setting up its pension plans.
On the other hand, it is possible that those experts reside in the Department of Finance. In fact, it may be that one of the so-called experts is the Minister of Finance (Mr. Chretien). After all, he has been feeding out highly optimistic Financial estimates to this House since he took over the portfolio.
The fact is, there are experts and there are experts. Some, like the finance minister, have no credibility. Others are well respected. I believe we have a duty to find out just what well-known economists are predicting real returns at this level. In fact the only period that we have seen of real returns of over 3 per cent are years in which we had changes in the consumer price index of less than 4 per cent. This 4 per cent was the original objective under the anti-inflation program, but then that was just another of this government's over-optimistic forecasts.
In any case, having introduced these experts, the President of the Treasury Board indicated that he saw two basic choices; one was to continue the current plan and see which of these so-called experts were correct; the other was to introduce immediately a set of ad hoc adjustments. The minister of that time said that in his view the stakes, namely, the welfare of future taxpayers and pensioners, are just too high to gamble on continuing the current arrangements.
When the government introduced the new arrangements it was gambling as well, gambling with the lives of our public servants. Yet the implication in what was said is that somehow it has reduced the risk.
What we have before us now is something even more nebulous than what we were presented with in 1973. In 1973, we at least knew half of the equation, we knew what level of benefits our pensioners were likely to get. We did not know what it would cost.
With this legislation we do not have the cost estimates once again. But this time we do not have any idea what level of
Pensions
benefits will be provided in the future. The government is asking us to buy a pig in a poke, to pay an unknown price for a series of unknown benefits. We owe our public more than this. We have to find out what the price of these benefits is for the general public, and similarly we ought to ensure public servants that they will receive a decent pension, a pension reasonably related to future changes in the cost of living.
That is the purpose of the two questions that 1 asked in the House on November 3. I am concerned that these ad hoc arrangements will not deliver adequate benefits to our retired public servants. I am particularly concerned because of the way the plan is divided into the three groups consisting of the RCMP, the armed forces and the public service. Before we adopt any plan which changes this multi-billion dollar plan, we owe it to ourselves and to our public to ensure that in the future the plan produces reasonable benefits at a reasonable cost.
The hon. member for Winnipeg North Centre (Mr. Knowles) earlier today spoke of his willingness to accept slight reductions in benefits at this time. We know that over the first three years the public servants would not be entitled to full indexing. However, we have no idea from this government what level of indexing will be provided for in the future. Will it be one half the cost of living or one quarter? Just what is the government proposing? What are the public servants likely to receive under inflationary conditions in the future? That is a question that must be answered before we vote on this bill.
The second part of my question of November 3 had to do directly with the cost of the program. As I indicated, it appears to me, and certainly I am willing to be corrected by the President of the Treasury Board, that the changes which have been introduced will place a greater burden on the public treasury to support the public service superannuation account, a burden which could be in the order of a hundred million dollars each and every year.
This transfer arises because of the use made of that arbitrary 4 per cent interest assumption. I mentioned earlier the fact that the chief actuary assumed a yield of 4 per cent on the money to offset the assumption that there were going to be no future salary increases. This did not mean at all that he only needed 4 per cent interest. He needed the excess interest earnings to offset the deficiency in the salary assumption. Yet what the government is proposing to do, Mr. Speaker, is to give these so-called excess earnings from retired pensioners' accounts to support their indexed pensions.
We heard the hon. member for Ottawa West (Mr. Francis) taking just one side of the equation today. He talked about the excess interest earnings, the windfall gains in interest that are made. If there are high interest rates in the future, it will likely be because inflation is out of control again. If there are high interest rates, there are high rates of salary increases. If there are windfall gains in interest, there are windfall losses because of the salary increases, because we guaranteed to pay a pension based upon the final salary. That is a very simple idea. One offsets the other. He cannot do what the government has just done and take the excess earnings on the interest, say that

February 12, 1979
Pensions
is for the pensioners, and the excess losses, because of future inflation, are for the taxpayer, yet that is what this government is trying to do in this bill.
We had serious questions raised in this House about the cost of the total plan, and particularly the cost of indexing. What the government appears to have done is primarily to transfer an unknown amount of money over from the Public Service Superannuation Act to support the Supplementary Retirement Benefits Act and somehow pretend that everything is all right if the matching contributions plus these additional transfers make the indexing portion work. I think this is just a sham; it is a flim-flam. You cannot just transfer money from one side to another and say, "Look, the other side is now fine." That is Dagwood and Blondie economics. It reminds me of a situation where Dagwood and Blondie each have $30 and they both need to buy a $40 item. Blondie says to Dagwood, "Give me $10, then I will have $40 and at least one of us will be better off." In other words, forget what is happening on the other side. There is no more money created by this little exercise.
We have to look at both plans in combination and find out what is the additional public liability as a result of transferring these earnings out of the PSSA. Certainly it appears to me that what it will do is to increase the experience deficiencies of the PSSA dramatically.
In any case we do not know if it is still proposed to credit the pensioners with the excess over 4 per cent, since it is my understanding that the valuation which is being prepared will be made using realistic assumptions and the 4 per cent may not itself appear in the valuation any longer. We do not know, because the report due December, 1977, has still not appeared in spite of our requests that it be produced. Besides these two specific items, what the benefits will cost and what the benefits would look like, I have other reservations with the bill.
The bill should contain a provision to value the plan every three years, or prior to any subsequent plan amendment. This valuation should also include benefit projections.
In addition, question No. 556 that I placed on the order paper on November 9 was designed to give us essential information to judge this bill. How can we comment on the bill with no financial data presented by the government? In particular, I feel it is necessary to look at a projection on the amount of future indexing available for each of the three categories of employees separately, the armed forces, the RCMP and the civil service. I believe that what the government is doing in this bill is intrinsically weakening the funding basis for retired pensioners. It may well be that the ad hoc arrangements of their indexing come unhinged for one group before the others. If there is one group going to come unhinged, it will be the veterans. The House must find out when the indexing is going to break down.
Another question was designed to raise the point about the rate of interest credited to the fund. This has been a point of contention with public servants for some time. They feel they have not been credited with the rate of interest they could get

if investments in private securities were allowed. Of course it is not necessary actually to invest in outside securities at all to credit a higher rate of interest. The current plan, after all, doesn't invest in real securities either; a hypothetical fund is set up to determine the amount of interest payable. The hypothetical fund could just as soon assume some other type of investment.
However, many Canadian actuaries have expressed great concern about our country's ability to pay for these phantom-funded plans because of the significant demographic changes which are going to occur in Canada over the next 50 years as the baby boom passes through into retirement. This is a point the hon. member for Ottawa West raised today. What is the difference? The difference is that with the phantom-funded plans we have now there are no real assets. The only asset we have is the future taxing power of the government.
With the demographic changes which will take place in this country, with the rapid increase in retirees as compared with the working population, I think we should give very serious consideration to the-


The Acting Speaker (Mr. Turner):: The hon. member for Ottawa West on a point of order.


Cyril Lloyd Francis: I would like to ask the hon. member if he considers the public debt of Canada to be absolutely insignificant and worthless. Is not the asset of a Public Service Superannuation Fund just as real, just as valid, just as good as any security of the Government of Canada?


William Paul Joseph McCrossan: That is exactly what I have said. The point is that the rate at which we are building up debt is a source of concern to me because future taxpayers will be called upon to make good those obligations. And we owe it to the people of Canada to investigate just what that tax load is going to be in the future to pay off these obligations when they come due. For these reasons I ask whether any consideration is being given to setting aside some portion of the liability in real assets, not just hypothetical funds.
Again, the hon. member for Ottawa West said we had no choice, that we couldn't interfere in the private sector. Well, Mr. Speaker, I am sure that if the hon. member takes the time to investigate he will find out that a reasonable portion-a small but growing one-of the Quebec pension plan is invested in the private sector. It is doing so without unduly influencing the private market. I am not suggesting that the whole fund should be invested in the private sector. Not at all! That would be quite another matter. But I think there is some merit to building up some portion of the fund in real assets.
I would like to make one final point in relation to this bill, Mr. Speaker. In Bill C-56, the amendments to the Income Tax Act, brought before the House last spring, the Minister of Finance restricted the rights of an individual citizen to retire before age 60 if they were funding their retirement plan with an RRSP. I talked today about the public perception that public servants have been set aside as a special breed in society. Here is another direct example. Public servants are
February 12, 1979

allowed to retire on full pension at age 55. Individuals outside the public service are prohibited from having access to their retirement funds-their RRSP fund-for pension purposes until age 60. Not only that, the public servant receives a thousand dollar annual tax exempt income from age 55, while the RRSP policy holder, even if he takes money from age 60, does not get his tax exemption until age 65.
I am not for the moment suggesting that public servants should be restricted from retiring at age 60. However, I do believe the two acts should be brought into harmony. We cannot continue to have one rule for the public servants and another rule-designed by public servants-which is more restrictive for the rest of the public. We would be perpetuating an unfair discrimination between the retiring age at which members of the general public can have access to their pensions in the form of RRSPs and the age at which public servants can have their pensions. This House should consider directly harmonizing RRSP provisions with the early retirement provisions granted public servants.
This is a period of wide-scale cynicism and skepticism on the part of the public with respect to the government. What we have before us today is another bill to change the public service pensions, a bill for which so far we have no cost-estimates for the changes contemplated. On the contrary, we have what might be construed as a deliberate concealing of the cost effects of the PSSA. We have been provided with no benefit projections so that that public service might have some idea what they are paying for. The sort of cynicism 1 mentioned will only be magnified if the government continues to lay important financial bills in front of this House without providing any financial data.
In summary, Mr. Speaker, what I have been saying is that we face two obligations when considering any bill of the sort before us. We have an obligation to the general public, and we have an obligation to the public servants. In order to fulfil these twin obligations we must have some figures presented to us upon which to make an intelligent decision. In addition, we should ensure that from this point on such figures are provided us regularly, every three years, or upon any planned amendment, to ensure that parliament retains financial control over substantial expenditures. In the absence of any financial information how can we approve this bill? How can we commit the public of Canada and the public servants of Canada to this plan when we have no idea of what the plan actually is?
No wonder our economy under this government is in such dire straits today. Today we know that in 1973 we spent $6 billion. But we found that out only last year. Almost without thought we committed ourselves to spend that money. Today we are being asked to make future plans in the dark once again. Why? The real problem underlying this bill lies with inflation, not indexing. What we need to do is direct our attention to bringing down inflation. The hon. member for Ottawa West said today we have to learn to live with inflation. That is not something the party to which I belong accepts at all. That is Liberal philosophy. We have to take control of our
Pensions
financial expenditures in this country, and this bill is a good place with which to start.
I believe we must support this bill on second reading, if only to get it into committee. Then in committee the government will, hopefully, present us with some information on which to base our consideration of the bill. I cannot believe the government would present such a bill to parliament without evaluation, without benefit projections. Surely we have a right to see them. The public must be served. If we do not have the right to see them, if the government denies us this essential information, surely the public will condemn this government once more for its economic flim-flammery.


Mr. Ross Milne (Peel-Dufferin-Simcoe):: Mr. Speaker, I intend to speak extremely briefly on Bill C-12. I intend to do so because I support the bill strongly. I support the comments made on Thursday evening by the President of the Treasury Board (Mr. Buchanan), the speech by the hon. member for Winnipeg North Centre (Mr. Knowles), and the excellent speech made this afternoon by the hon. member for Ottawa West (Mr. Francis).
My reason for rising to enter this debate is the fact that early on when this became a public issue and the National Citizens Coalition started their campaign, I replied that I disagreed with their approach and that in my view it was full of error. I put together and distributed a statement, and some of the organizations within the public service which came across the statement thought it had a good deal of merit. They, in turn, circulated it across the country because it was supportive of adequate public service pensions and, indeed, of adequate pensions in general. I suppose it was because of this that the National Citizens' Coalition decided they should apply a lot of pressure to myself and they did so through a variety of means.
Therefore, I thought I should stand in my place this evening and put on record the essential points which were made in the statement I read some time ago in response to their original misrepresentation. I regret the National Citizens' Coalition did what they did. It developed a good deal of ill will toward public servants which they in no way deserve. In my opinion Canada is well served by its public servants, and the kind of insinuations made about them were very disagreeable for the public servants to bear.
At a meeting after this became a public issue I asked some people what they thought the average pension of a public servant really was. Some of the responses were $15,000, $16,000 or $20,000 a year. I think I am fairly accurate in saying that the average number of years a public servant works is 25 and that after that length of service his retirement pension is about $5,100 a year. When people understand that, they begin to think that the issue raised by the National Citizens' Coalition is pretty phony.
I think the National Citizen's Coalition is running a stalking horse in its intervention so that people in the private sector

February 12, 1979
Pensions
who resist setting up an adequate pension plan for employees in the private sector will not have to begin thinking in terms of putting together a pension plan which would provide adequate benefits for employees.
So far in this debate spokesmen for all parties-at least the principal spokesmen-essentially agree with the provisions of the bill. More importantly, they have joined in opposing the National Citizens' Coalition. However, 1 am not sure 1 can say that in all sincerity about the previous speaker, the hon. member for York-Scarborough (Mr. McCrossan).
The hon. member for York-Scarborough represents the opinion which is expressed very often by supporters of his party. I hope hon. members opposite follow the lead of the hon. member for Hamilton West (Mr. Alexander) and attempt to convince their supporters that his is the stance they should be taking. I am sure there are many supporters of the official opposition who will be amazed that the hon. member for Hamilton West should take such a moderate stand. I think he has taken a rather progressive point of view on this bill.


Lincoln MacCauley Alexander: That is what I am, a Progressive Conservative.


William Ross Milne: I congratulate the hon. member for Hamilton West for doing that, but I am sure his stand is not in tune with some of the things which are being said by some of the supporters of his party who try to pursue the argument that somehow the public service has a very rich pension plan, that the private sector could in no way afford such a plan, and that somehow that would amount to a tremendous liability for the taxpayer.
There are really two basic questions at stake here. One is support for good pension plans, both private and public. The hon. member for York-Scarborough seemed to be putting forward the argument put forward vigorously by the National Citizens' Coalition, that we should be pulling down public service pensions rather than that in the private sector there is a need to increase pensions so that people working in that sector have adequate protection. It seems to me that many of those who associate themselves with that school of thought have never worked on farms or known the rural communities in that part of Canada where I was born and grew up years ago. People who were not owners of farms and who worked out as hired men did not enjoy favourable retirement conditions because they were very poorly paid during their working years. It was very difficult for them to put money aside for retirement. Anyone from that kind of environment has to be a strong supporter of adequate pensions.
I am delighted that the hon. member for Hamilton West and the hon. member for Winnipeg North Centre argued that point. They did so very well. The issue is adequate pensions for all Canadians, not tearing down the public service pension system which has been established.
The President of the Treasury Board established in his speech that the basic pension plan is very sound actuarially and that Bill C-12 would make the indexing provision of the plan actuarially sound. In the statement I prepared, a condi-

tion upon which I said I would support public service pensions is that there must be an adequate pension, but it must be actuarially sound. There must be a decrease in the pay-out to accomplish that, and Bill C-12 does that. That was the part of the argument of the previous speaker which I did not follow. He said that somehow there was no information available as to what this would cost if parliament should commit itself by passing this bill.
I think the President of the Treasury Board was very clear when he said in his speech that the question now would be how much pension could be paid with the money available, not how much it would cost, and I invite the hon. member for York-Scarborough to read the comments of the President of the Treasury Board because the answer to the very questions the hon. member was raising is the basis of the bill.
Another point I made in my statement is that, for the life of me, I cannot follow the line of argument which essentially says that we should not have good pensions. In the absence of good pensions the needs of people in their retirement years will have to be funded from the tax base. I am amazed that the National Citizens' Coalition should not support the argument that it is better to have employees contribute to an adequate pension plan for their retirement years during their employment years. If we argue against pension plans, then we must also argue that after retirement, when there is great need, the government will have to help in a substantial way.
I am sure we all remember that a few years ago the pensions of teachers, nurses and other groups were very modest and not indexed. After a period of inflation those pensions became very inadequate. There were strong representations to governments about how inadequate those pensions were, and after a time governments were obligated to put very large lump sum payments into those plans in order to improve them so that people on those pensions could go on. That is not a good way to go about supporting Canadians in their retirement years. However, that seems to be exactly the argument the National Citizens' Coalition has been making.
The major provisions in this bill regarding indexing not beginning until age 60 are fair. The proportioning of the amount of indexing available to a person at retirement, given the date of retirement, is very fair. We all know about the advantages enjoyed previously by those retiring in the last days of December. On January 1 of the following year they had the advantage of a full year of indexing. I think that is very unfair to those paying into the plan. I think it is taking advantage of the plan, and changing that should surely be accepted by the public service and supported by all hon. members.
The basic theory of the bill regarding the amount of pension the plan can afford is also good. I am pleased that the President of the Treasury Board feels that there should be a basic amount available so that people who earned low salaries and wages throughout their working lives can have at least a base upon which to operate rather than a completely comparative type of pension plan.
One question raised by the hon. member for Hamilton West the other night was the question of why there has not been an
February 12, 1979

opportunity for the public service to increase their contributions, given the fact that as an employee group they do contribute, on a percentage basis, as high a percentage as any employee group of which I am aware. That is a good point, but I think even the public service recognizes that the indexing provision of the plan at the present time cannot be actuarially sound and therefore there are two options, one to gear down the pay-out so that it balances, and another to contribute voluntarily over a year or so a higher percentage of salary so that there can be full indexing without any liability to the taxpayer. There may very well be good reasons why both those options were not offered, and I think when this bill is in committee this might be explored to see whether there is in fact a possibility in that regard.
I represent a very large number of air traffic controllers in my riding by virtue of the fact that Toronto International Airport is located on the boundary of my riding. I think the special provision in the bill for air traffic controllers is fair and just. It is a provision for which they have argued over the years, and I was glad to see that provision in Bill C-12 in terms of their indexing procedure.
I just wanted to make the point that for quite some time I have been upset by the approach of the National Citizens' Coalition and the kind of half truths which they have put forward. This has done a great deal of damage to the credibility of the public service. I want it to be put on the record that 1 support the provision of adequate pensions for all Canadians. The issue should be whether or not all Canadians have adequate pensions, rather than the argument that because public servants have contributed more than any other group on a percentage basis they should have a good pension. I wonder why the National Citizens' Coalition, and some of the people in the business community who support their argument as strongly as they do, do not see the value of my argument. It is far better to have an employee contribute to an adequate pension plan during his or her working years than to give him a small pension and have him look to the government to supplement it from the tax basis during his retirement years.
Mr. Speaker, I appreciate the opportunity I had to contribute to the debate briefly.


Erik Nielsen: Mr. Speaker, I intend to confine my remarks tonight to the RCMP and the manner in which this bill affects that force. I will be somewhat critical of certain aspects of it in so far as it concerns the force. I happened to hear the hon. member who has just resumed his seat refer to air traffic controllers. The bill contains a provision to establish a special pension program, which was agreed to by the government in 1976, I believe, for air traffic controllers in operational or tower service. In effect, the provisions bring them increased pension benefits, in addition to the 2 per cent of salary which is contributed by controllers once the bill takes effect and is matched by the employer in order to pay for these benefits.
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There is a good reason behind those special provisions. Air traffic controllers in operational or tower duties operate, particularly at heavy density traffic aerodromes such as Toronto, Montreal and others, under very heavy stress. They have in their hands the lives of crews and passengers of literally hundreds of aircraft coming in and out of those airports daily. So there should be special provisions for them. They burn out.
A somewhat similar argument can be made with respect to those who serve in maximum security penitentiaries in the country, and indeed that is one of their annually recurring submissions with respect to their retirement plans. The stress factor applies even more forcefully to members of the police forces, not just the RCMP but any police force, particularly those in the larger metropolitan centres. I will quote briefly now from the Canadian Police Chief issue of January, 1979, from an article by inspector Charles Massey, police chaplain with the Ontario Provincial Police. The article begins as follows:
The evening news has just ended. It's 11.30 p.m. She went in to check the kids and re-tuck them in. She returned to the living room, sat sleeping in front of the late movie and waited for Jack to return from the 4-12 shift. It was a good movie and she didn't notice the time passing. Later, glancing at her watch, she saw 1.30. "Where's Jack?... must have had a late call", she thought. Fifteen minutes later she heard a car pull into the driveway and its door close. Then the doorbell rang. " ... must have forgotten his key." She opened the door and there stood the Detachment Commander and the Chaplain. "Mary, there's been an accident. .. Jack's been shot... he's dead . . ."
That is not an isolated sort of occurrence. That has happened so far, during 1978 at any rate, some 50 to 60 times in Canada. Just last week a member of the force was killed in the Yukon. What happens? There is a separate pension fund for dependants of members of the force, but the Royal Canadian Mounted Police Pension Continuation Act, which has to be considered when considering this kind of legislation, is still in the dark ages so far as the treatment of dependants of officers of the force is concerned.
Consider this other example of an officer who was killed on duty who had over five years of service. Under the pension continuation act, the widow and children of that deceased member of the force are entitled to 50 per cent of his entitlement. If we refer to the pension superannuation act, we find that if a member of the force dies with less than ten years service, his widow and/or children receive a return of his contributions or an amount equal to one month's pay for each year of pensionable service, whichever is greater. Contribution of single members are payable to their estate. That certainly would not take a widow with three or four small children very far.
Let us consider another example, and I purposely avoid names here. This is an example of a member of the force in the maritimes who had served 21 years in the force and died of a heart attack. He left a wife and five children, the oldest was 16 and the youngest was two years of age. That widow and her five children are living on a pension of $490 a month. I believe-and I believe that that belief is shared by all members of the House-that that is a disgraceful way to treat members of a fine force such as the RCMP and their dependants in circumstances such as I have outlined. There is no way that a

February 12, 1979
Pensions
widow with five growing children can survive on $490 a month.
This is current data from which I will quote now. I am not going back to the days when my father received a grand total of $93 a month as his pension after 30 years of service. That sort of a situation cannot be allowed to continue, I suggest. Adequate provision must be made for the special nature of the force and for the dependants of the deceased members of the force who meet their end while serving or while on duty.
I want to say a word or two about the stress factor, but before that let me just quote one or two significant statistics from the force. During 1975 and 1976 there were 747 members who left the force of their own volition. They chose to do so prior to becoming eligible for a pension. Only 286 received a pension in the same period. In other words, it is more attractive to leave the force than to remain in until pensioned. There is no real incentive, pensionwise, for members to serve out their period in the force and go to pension.
The statistics are also significant for another reason. They show that the force cannot, I submit, be compared to other facets of the civil service, with the odd exception such as air traffic controllers in operational tower duty or, perhaps, prison guards. The force cannot be compared to other facets of the public service precisely because of the stress factor, shift work and the days off situation, particularly where families are concerned.
It is far too easy to say that a person knew the situation before he got the job, but complete understanding cannot be gained until one is completely immersed in the job. The police force job is not the same as an industrial job. A man in industry does not have to face the problem of having to stop a car in the middle of the night looking for a dangerous criminal, not knowing whether he will be met with a sawed-off shotgun. That man's wife is not wondering if he is coming home at shift end, two, three, four, 24 hours later, or never.
The stress factor is very well documented and I do not have the opportunity of going into it in any great detail now. The force, indeed, has commissioned a study which should be completed by now and should be made available to members as rapidly as possible in order that this kind of legislation will not appear before us again without some adequate remedies for the situations I have described.
At the present time in the force the pension of a member is based on the average salary over the last six years' service, but to state that at 35 years' service one is eligible to receive 70 per cent of salary as pension is very misleading. That, indeed, is not the fact. If one is to consider a sergeant retiring after 25 years' service with six years in the ranks, one is led to believe he is eligible to receive 50 per cent of his salary, when in fact he receives only 41 per cent of his salary at retirement. Similarly, at 35 years' service he in fact only receives 58 per cent of salary on the day of retirement.
The theory behind pensions, as I understand it, is that having given the best years of their lives to the service, their

country and their government, they are entitled to a minimum of security at retirement. They do not have that now, and certainly it is glaringly apparent that their widows and dependants do not have that now.
We have heard opinions about the effects of inflation here tonight. It is my view that inflation is caused by the government, and members of the force have absolutely no way of defending against it. The inducement of a pension when a member of the force was recruited was an influencing factor in many cases of those joining the force. Most members leave the force with 24 years' service, not because they want to but because they must in order to take advantage of their youth in gaining other employment to meet the needs of their families at a critical time in their lives. They are fully aware that the pension they are to receive will not sustain them in any dignity or standard of living.
Most police forces in the United States permit members to retire on 20 years' service with half salary. There are other advantages as well. I want to draw for members some very startling comparisons. For instance, in the state of Alaska state troopers operate under this plan. The contributions are 5 per cent of salary; contributions earn 4.5 per cent interest; pension benefits are available at any time after five years' service; normal retirement is at 20 years' service at half salary; salary is averaged over the past three years, and that is the way it used to be in the force and the way they want to return to now; thirty years is maximum service, or 55 years of age; pension cost of living is indexed at 4 per cent if the fund is solvent; benefits are tax exempt; there is a 10 per cent increase in benefits if the receiver is a resident of the state of Alaska, an inducement to stay there; benefits are stacked to social security; no-cost medical insurance to the receiver and dependants; when the plan is fully funded the administrator can make investments in the private sector, with funds realizing current interest rates; and there are three separate operational survivor plans for dependants.
Contrast that with the treatment we accord in our pension legislation to members of one of the finest, if not the finest, police forces in the world. Are the United States pension funds being bankrupted? I suggest that is not the case.
Police work is an occupation requiring the stamina of youth, and that is particularly so of the RCMP. Many recognized authorities on police administration and psychology take the position that the stress factor in the police profession is the symptom of higher rates of suicide, marriage breakdown, alcoholism, and a shorter life expectancy.
Indeed, I just read today in that same "Canadian Police Chief' of January, 1979, that current statistics show 225 suicides per 100,000 police force population in Canada as opposed to 16.5 per 100,000 in the general population. No one can convince me that the major difference between the suicide rate in the average population and the police population is not directly attributable to that stress factor, a factor which is being studied more and more by psychiatrists and psychologists today.
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Authority is readily available, I suggest, to support these statistics in United States law enforcement agencies. However, none is immediately available in respect of the RCMP, save those which might have emerged in the study commissioned by the force which, if not completed, should be completed shortly.
I suggest to hon. members that the argument here is that if the psychological "stress disutility" can be substantiated, and it would certainly appear to be substantiated, this creates the strongest possible argument for separating the force from the public service pension plans, thus entitling members of the force to more generous treatment in respect of their retirement benefits.
From information available it would appear that the RCMP is the only police force that uses the last six years averaged salary for pension computation. No other police force in the police universe uses that formula. Indeed, the RCMP itself did not use it in the past. Most use the three year formula, and some are based on the last year of earnings.
I submit that the force is a unique organization. As a unique organization the force should not be equated with the public service in so far as their pension schemes are concerned, but rather equated with the police universe. Under the Pension Contribution Act an officer's pension is based on his last day of service. In other words, the pension is calculated on whatever his annual salary might be on the last day that he serves. This is a unique pension plan for a unique organization. It seems most persuasive that on the merits in maintaining this type of pension program, based on the last day's salary, then the force would be truly unique and would attract the best possible candidates because of the salary range and the pension benefits.
No one can convince me that the calibre of candidates being attracted to the force today, while still high, is as high as it was 20 years ago. Let us compare a member of the force with the private sector. Through initiative and entrepreneurial ability, an individual in the private sector usually amasses considerable wealth over his business career. Most members in the force are unable to accumulate wealth because of transfer, career cycles and so on which take them to every part of Canada in the performance of their duties. If it is truly the desire of the Canadian population to maintain a unique police organization like the force, then recognition should be enshrined in the salary benefits and pension package so that after a long and trying career members can live in dignity and independence, and so that widows and dependants need not worry in this regard. Of course, they will worry anyway if the breadwinner of the family meets with a fate which all police members face every day.
As for superannuation deductions, members of the force would likely welcome contributing more over their careers if it meant a better pension, in the same way in which the bill provides for an increased contribution by air traffic controllers on operational or tower duty. Conversely, a member can burn out by the time he or she achieves 20 years' service, in which
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case it would be beneficial to both the member and the force that he be allowed to leave at a reduced scale, as is now in effect for NCOs, but without penalty. I certainly saw this burned out effect in spades when I went around to the penitentiaries of this country and observed prison guards, and the same argument can be made with great force for those who serve in Canada's penitentiary system.
Another invidious provision of pension legislation as it is now applicable to the force is the 35 year lock-in clause which is applicable to officers. This lock-in clause does not sit well with commissioned officers in the force when other ranks within it have the option of leaving the force after 20 years' service, on a graduated scale. Indeed, many NCOs simply will not take a commission because of that lock-in clause, particularly those who are close to their 20 years. A strong argument, therefore, might be made that this should be changed to include all ranks, with the proviso that a commissioned officer must give six months' notice prior to superannuation.
1 would also mention here that the Marin royal commission recommended that the lock-in clause in the pension legislation for the force be removed. I would like to quote from the Marin report commencing at page 169, which reads:
First, the criterion for pension benefits and other entitlements should be the same for officers and other ranks. Second, the Royal Canadian Mounted Police may find it beneficial to make representation to the Solicitor General and the Treasury Board to adopt a policy that some other police forces have instituted with respect to flexible pension schemes allowing full pension for all ranks after 25 years with the option to remain in the force for a maximum of 15 years.
The Royal Canadian Mounted Police Superannuation Act is at best a very complicated piece of legislation. It is most difficult to read with any degree of comprehension, and in several sections there are references made to, "a member, a regular member, a contributor, an officer," and I could go on. References are made to "on duty" and certain sections are co-ordinated with sections of the Income Tax Act for purposes of the Pension Act. One might interpret the act in its present form as saying that an officer who has completed 20 years' service, but less than 35, and dies from natural causes, leaves his wife half of what he would have been entitled to under the act, that is, a return of contributions, deferred annuity or an annual amount. An officer who dies with more than ten years' service but less than 20 years' service could only be entitled to a return of contributions. In other words, the widow would be absolutely destitute.
I hope that I have succeeded in pointing out some of the discrepancies which exist with respect to the treatment of members of the Royal Canadian Mounted Police in so far as their pensions are concerned. I could go on and point out great discrepancies in their salary rates which are even more glaring than the serious shortcomings which exist in their pension legislation. But if we are to attract a high calibre of recruit and maintain a high calibre of member within the force, something must be done if we are to arrest the rate of attrition which, as I said, exceeded over 700 members leaving last year. Many of these members left because of the stress factors or because they became acquainted with the glaring discrepancies, some of which I pointed out today.

February 12, 1979
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There must be some meaningful and constructive changes in the pension legislation of the RCMP. I would hope with respect to its relevancy to the treatment which is accorded to the air traffic controllers on operation and tower duty, that some of the amendments which I have attempted to describe, might well find their way into the bill when it goes to committee, so as to provide for these shortcomings.


Jean-Robert Gauthier: Mr. Speaker, I am glad to participate in this debate because it is a subject that concerns and puzzles me very much. Bill C-12 was given first reading on October 26, 1978. It followed up a statement made by the President of the Treasury Board on March 9, 1978 in which he announced that the government intended to change certain aspects of the public service superannuation plan, especially as regards the indexing of benefits on the fluctuations in the cost of living.
To me, Bill C-12 is one of the most complicated pieces of legislation I ever had to study. It is intimidating because of its technical character and its mathematical jargon. For a layman like me, and many others in the House, actuarial questions are not the easiest to understand. This bill, Mr. Speaker, calls for an intellectual process which may leave us with a feeling of perplexity and confusion.
So I do not mean to deal with the actuarial aspect of Bill C-12. I leave that to the expert members who spoke before me or will probably be speaking after me. I would rather deal with relatively more simple objectives. In other words, Mr. Speaker, the main objectives of the bill are, first, to implement the amendments relating to the indexing of the pensions of retired civil servants; second, to implement the agreement reached by the government in 1976 with the Canadian Air Traffic Controllers Association and, third, to amend the present arrangements for amortizing actuarial liabilities and to deal with certain other questions of a technical nature. So I will be dealing with the first objective, Mr. Speaker, namely the amendments relating to the indexing of pensions of retired civil servants. Mr. Speaker, I do not hesitate at all to state my position. I am of those who believe that it is socially just and fair for an indexing formula to apply to pensions. I am glad the public sector should lead the way and I am confident the private sector, which has been doing it in certain cases, will follow suit in a few years.
Indexing means the pension is geared to the cost of living as it goes up. That means more money for the pensioner but not necessarily an increase in his purchasing power. That means some 100,000 civil servants now receiving a pension-and that includes all pensions, whether disability pensions, retired pensions, and armed forces pensions-that means those people with a purchasing power which is being maintained can buy the same goods, not more, they can keep a standard of living

based on a pension they paid for with their work, with their lives.
Let us examine closely what Bill C-12 proposes to do with respect to the indexing of pensions. The most important under its principle proposes to amend the agreements providing for the indexing of civil servants' pensions to the increase in the consumer price index. Bill C-12 does away with the automatic provisions now in effect. It also abolishes the need to make automatic adjustments based on the consumer price index as has been done since 1971. So it comes from a commitment made in 1971 by the federal govrnment that pensions of public service employees will be automatically indexed to the cost of living. It proposes changes which I believe will be fair and equitable. Those changes might put an end to a controversy that has been going on now for over three years. That controversy, of course, is about the financial capacity of the pension fund to finance the outlays required to pay for both the pensions of retired civil servants and indexing-two things, pensions and indexing. Nurtured by a group called the National Citizens' Coalition the controversy continues, and you can be sure, Mr. Speaker, that it is going to be with us during the next election campaign.
On the one hand, the argument has been that there is enough money to pay the pensions. This is the position of the Public Service Alliance and certain other experts or groups, and up to a point I agree with it. On the other hand, the Citizens' Coalition Movement says the opposite. Those who say that there is enough money in the fund to pay indexation as concerns the capacity of existing funds to finance the pension benefits, also state that until now indexation of pensions has cost nothing to the taxpayers. They argue that the funds paid out as benefits in the last 50 years do not amount to the sum contributed by the employees. This is quite true.
For its part, the coalition states that this is not an accurate way to examine the financing of pension funds. According to the coalition, pensions must be fully financed by the fund, which means that a pension plan must always have enough money to pay all eligible pensions as well as the future pensions of all employees. The coalition argues that in this way, if the pension plan were abolished or if the employer ceased to exist, which is very unlikely, the pension plan would have enough funds to face its present and future commitments.
The situation was explained during this debate by certain hon. members, and I am thinking especially of the hon. member for Ottawa West (Mr. Francis), an expert in actuarial matters, who made an interesting speech and gave, in my opinion, a very understandable explanation. During this debate, he explained the situation quite clearly and precisely. In any case, Mr. Speaker, this man knows what he is talking about as he is a well-known economist. I salute him. An economist is not an actuary; there is a difference. Mr. Speaker, the hon. member spoke about people whom he knows, and as I was saying, he explained that the basic pension benefits are
February 12, 1979

totally financed on a full capitalization basis. This is a fact. It means that if present commitments are met by the contribution of employees, the amounts required to meet future commitments must come from the government, who is the employer in this case, as well as from interest benefits.
Once again, Mr. Speaker, I believe it was explained quite well during this debate that the funds were invested at a weighted interest rate based on the borrowings of the federal government and that the funds were earning enough money to make all the necessary payments. Contributions and interest benefits cover the costs. No financing by the Canadian taxpayers is required at this time and future commitments will be met by the government, which is now proposing a new formula. This formula constitutes the main thrust of Bill C-12. The government is proposing a formula according to which, for a given period, the indexation rate of public service pensions will be announced in October for the next three years.
The minister told us a few weeks ago that if he had announced this rate in October 1978, he would have set a ceiling of $7,000 under which the pensions would have been fully indexed, even if this meant that the difference between the amount of the pension and this ceiling of $7,000, would have been indexed at a reduced or lower rate.
Mr. Speaker, I asked today exactly what is the average because we often hear about it. People say that retired public servants have large pensions, and it has already been suggested to me that this was not quite accurate. I therefore wanted to know the average pension paid to retired public servants and their survivors. The average disability pension amounts to $4,250 a year. Far from being a fortune, this is below the poverty line. Those who receive a pension based strictly on the retirement element, that is former public service employees, receive on the average $5,152, which is a bit higher. As I said earlier, 100,000 former public servants now receive a pension of some kind from the federal government. Yet 85 per cent of them receive a pension of $7,000 or less, or 85 per cent of all former public servants.
We have often heard about those who receive large pensions of $20,000 or more. Mr. Speaker, there are at best 100 people in Canada who receive a pension of $20,000 or more from the federal government. It would therefore be false to suggest that these pensions are exorbitant, that they will push the government into bankruptcy and that, because of this, we shall have to pay exorbitant taxes and premiums. I believe that all these Figures confirm what many of us already know, which is that on the whole, public service pensions do not bring instantaneous wealth and are on the contrary quite modest and reasonable.
Mr. Speaker, I spoke earlier about two positions which are based on two completely different matters. There are those who maintain that the contributions paid to this date covered all payments already made under the federal government's pension programs. That is true. The Coalition, on the other
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hand, maintains that the employees' contributions do not cover future benefits. So there are people who say: we have the money needed to pay for it now, and others who say: you do not have the money that will be needed to pay for it in the years to come. And that is also true. In other words, there are those who are referring to the financing capability and others to the actuarial financing. As I have said, Mr. Speaker, I do not intend to deal with the actuarial aspect because I am not familiar with it, and I am confident that in committee we will be able to consider all the related terms and conditions.
Rather, I would like to come back, Mr. Speaker, on the proposed objectives of Bill C-12. It makes the indexing of pensions subject to purchasing power, in other words, the question will not be the cost of indexation but rather the rate of indexation. As I have said, this rate will be set every three years by the minister, who will announce it at a given time, this year, in October 1979.
I was recently drawing my colleagues attention to the fact that there are people in the media who are interpreting Bill C-12 as a measure to put an end to pension indexing. I do not know how they came to such a conclusion, but that is certainly not the purpose of Bill C-12, and I would like to repudiate these comments by stating that we do not intend, with this bill, to abolish pension indexing.
We are asked with Bill C-12 to establish a system that would be much more easily controlled, according to experts, and that will be of real advantage to pensioners because they will know exactly where they stand for at least three years, this is ensured by provisions covering the minimum applicable and the indexing rate.
In conclusion, I would like to refer to the basic reasons for indexing pensions. The debate on indexing revolves around risks. Of course indexing involves risks, and the only point that can be made is that a society cannot agree on how to spread those risks. On the other hand, once an understanding is reached on how to spread the risk, there sometimes are implications making implementation difficult.
I believe we are all agreed on the need to protect our pensioners against their being robbed by inflation. Inflation steals assets away from people with fixed revenues, including pensioners. No active and industrial society such as ours is exempt from a degree of inflation. Inflation equally harms various groups of pensioners and increases the gap in revenue between Canadians in the work force and retired Canadians. In the newspaper Le Droit, editorialist Pierre Bergeron describes inflation as follows:
-that refuge for small-income people against the predations of inflation ...
This is a very clear and precise explanation. Any deserving society must protect the small, and if pensioners who retired some years ago are not afforded by us who are still in the
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labour force and by governments the kind of protection that will maintain their purchasing power, they will sink into poverty while everything around them will point to how unjust this society of ours can be.
I would like to give the case of a 75-year old pensioner who retired 10 years ago, as against that of the 65-year old Canadian who leaves a similar job today. If both are getting an unindexed pension, the former will get much less than the latter by an amount that will probably be commensurate with the inflation rate over the last 10 years. Both would receive the same old age security pension; the Canada Pension Plan for the individual aged 65 would be better since it would take into account the salary increase during that period. In other words, the non-indexed pension of a retired person who is 75 and performed comparable work will perhaps be 50 to 60 per cent of that received by a younger man of 65. Therefore the first principle is that indexing protects the pension by adjusting the income to the cost of living as it increases. It does not allow pensioners to purchase more, Mr. Speaker, but merely to purchase as much.
The governments have often been criticized because they ran ahead of the private sector when they fully indexed the pensions and, according to those same critics, the private sector does not have the same resources as the public sector. During a debate held in the House not long ago the Minister of National Health and Welfare (Miss Begin) indicated that 60 per cent of Canadian pensioners were financially dependent on the old age security program.
It means that the public sector as a whole has to assume through its taxes the financial burden of its workers. Of course the private sector makes a significant contribution to replenish public funds so those pensions can be paid. However, if the same private sector says that it is unable to pay pensions comparable to the indexed pensions in the public sector, it should not criticize the fair distribution of common assets. It is not the pension costs but the inflationary risks which concern the private sector.
It is possible to make all sorts of assumptions, and I admit the complexity of the problem. But if the employee puts so much emphasis on the indexation of his pension, he must be willing to assume the costs. As a matter of fact, the purpose of collective bargaining is precisely to deal with such issues. If the employer can demonstrate that his costs are too high because of indexation, and if the employee demands indexation, the salaries could reflect this desire, either through a reduction or duly negotiated concessions between the employer and his employees. As to the risks involved, no actuary or economist can predict the future, and it is clear that a private firm is faced with a dilemma when it has to decide its actuarial projections. In conclusion, Mr. Speaker, I should like to say that solutions to this problem do exist. Private employers can and should do better. The related negotiations will be difficult and complicated.
[Mr. Gauthier (Ottawa-Vanier).J
We do not have a magic formula to solve that problem. What we need is a will to find a mechanism that will protect both the employer and the employee against those risks of inflation while at the same time maintaining the basic principle of protecting those who cannot protect themselves against inflation. Bill C-12 provides for a review every three years of the rate of indexing based on the capacity of the fund to pay. That is an approach which seems right in a difficult economic period.
Mr. Speaker, I am anxious to see this bill in committee because we will have an opportunity to question the minister on the amendments he proposes to update this bill which was read for the first time in October, I believe, last year. The minister will bring in technical amendments to correct certain dates in the bill, and I will be interested, like all my colleagues, to hear the witnesses who will be appearing on this bill, particularly the unions representing the civil servants who provided us with a lot of documentation on this question. I examined attentively the arguments put forward and I think certain clauses of the bill will be amended if we can be convinced by the witnesses of the advantages that would represent.
I for one believe that Bill C-12 is an acceptable compromise in a difficult economic period. I am prepared to improve it with my colleagues in the House when it is considered in committee and to listen attentively to all witnesses. In concluding, Mr. Speaker, I would like to thank the House for its attention.


Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, I am speaking on Bill C-12 tonight because of the implication it has for the Canadian forces long service pensioners. The bill makes some remarks on the forces' pensions. It is absolutely beyond me why the government would bring in a bill that deals with two major pension funds and try to make them fit into the same box with the same regulations.
The life that is led by civil servants in their normal positions in Canada is not exactly the same as that led by service people. Nothing could have made the point more clear than what was said by the former president of the treasury board, the superminister, the nanny for the Minister of Industry, Trade and Commerce (Mr. Florner) and the Minister of Finance (Mr. Chretien) who need a guiding light of some sort.
When introducing this bill in the House, the minister stated he wished to have the 85 rule abolished in order to encourage serving people to continue until age 60 or 65 rather than leave their employment at age 55 to take advantage of the 85 rule. I imagine most members understand that means if you have 35 years of service, you can qualify for an indexed pension at age 55. Actually, you can do that at age 55 if you have 30 years' service. If the total of your service plus your age equals 85, you can start indexation at the present time. The former president
February 12, 1979

of the treasury board seems to think that is uneconomic, inefficient, and wants it stopped.
I was somewhat surprised that the minister brought in Bill C-12 which works a real disservice to the armed forces. The former president of the treasury board wanted senior civil servants to carry on until age 60 or 65. That is only reasonable because they have acquired a great deal of expertise and knowledge which could be of benefit to this country. But the Minister of National Defence (Mr. Danson) does not give the serviceman an opportunity to serve until age 60 or 65. Ele must leave at 55, and in many cases at a younger age. Junior officers must retire at age 47. Those in other ranks are required to leave as early as 40 or 45. At age 55, they were able to have indexation. That is no longer going to be the case. It is unfair. It discriminates against the service personnel vis-a-vis the civil servant. That kind of inequity should not be built into this bill. One has the option of serving beyond 55, and the other has not.
The part that seems to make it irrevocable is on page 18 of the bill, subclause (3), and I quote:
There shall be credited to the Canadian Forces Supplementary Retirement Benefits Operating Account in each fiscal year an amount representing such portion of the interest on the balance to the credit of the Canadian Forces Superannuation Account as the Minister estimates is required to ensure that there are sufficient funds available in that Account to meet all payments of supplementary retirement benefits from that Account for the year.
I did not realize anybody could write a sentence that long and hope to have the ordinary person understand what he is talking about. It means that they will have an indexation on a three-year basis. To enable them in their mythology to have sufficient funds to do that, the minister will determine that a portion of the interest on the balance will be credited to the Canadian Forces Supplementary Retirement Account as the minister estimates is required to ensure that there are sufficient funds available. He will determine how much he wants to spend. Then he says the percentage he has to credit to the superannuation supplement portion will have to be a certain percentage. I hardly know how to describe that kind of mathematics. It starts with the answer and works back to the problem. That is what he is doing.
That kind of attitude indicates that this bill serves two purposes, both partisan in nature. It is no secret there will soon be an election. I swear that this bill is designed to make those taxpayers not on pension think that the government is capping pensions and taking a hard line with pensioners, while at the same time saying to pensioners that it is really not hurting their pensions very much. The government is trying to satisfy both sides.
On February 8 the President of the Treasury Board (Mr. Buchanan) stated the figures planned to be used for the indexation for the next three years. I quote from page 3040 of Hansard for February 8 where he stated:
There would be full indexation up to earnings of $7,000, and above that the figure proposed was 8 per cent in 1979, 7 per cent in 1980, and 6 per cent in 1981.


Walter David Baker: Does that move back a year now?
Pensions


J. Judd Buchanan: Mr. Speaker, the hon. member asks if that now moves back a year. It moves back a year in the sense that the triennial period will be 1980, 1981 and 1982.
That simply means it was moved back one year. It gives the government the opportunity to say it is not cutting pensions this year. It had intended to, but was not able. For reasons totally mysterious to me, the government did not think it could get this bill through the House on time. It brought in a lot of rather foolish little bills which it found impossible to get through the House before Christmas. Thus it was able to postpone this bill for this amount of time.
The government is now saying the figure for 1980 will be 8 per cent, that it will be 7 per cent in 1981, and 6 per cent in 1982. But who believes the government any more? I suppose these figures bear some relation to its estimates of what inflation will be, but we recall that the Minister of Finance predicted that it would be 5 per cent, and the Prime Minister (Mr. Trudeau) when he brought in wage and price controls after promising not to do so, said that by 1979 the rate of inflation would be 4.5 per cent. Now they think in 1980 it will be down to 8 per cent. But does anybody believe that any more? I cannot really say they are trying to mislead anybody; they are just trying to cheer themselves up a little.
I should like to deal with the status of these two funds, the public service fund and the armed forces fund. To ascertain the exact situation one has to put questions down on the order paper-it is no use relying upon the government for information. We can be grateful to the hon. member for Winnipeg North Centre (Mr. Knowles) for putting down the questions he did on April 11, 1978-


Stanley Howard Knowles: Every year.


Allan Bruce McKinnon: -and to the hon. member for Ottawa West (Mr. Francis), who obviously looked over the questions asked by the hon. member for Winnipeg North Centre, thought they looked pretty good, and more or less duplicated them on October 10, 1978. In any case, the answers are worth reading into the record.
I am speaking on this bill because the services pension fund is administered by the Department of National Defence, not by the people who pay the civil service pensions. The armed forces have paid into a pension fund for longer than I can remember, in the expectation of a reasonable pension when they retire. Many of them made no effort to accumulate savings of their own; upon retirement they lived, for the most part, upon their pensions. They were paying into a fund on a matching basis.
What happened was that 20 or 25 years ago the government decided there was no sense setting up a fund to look after this plan because the government needed the money. It decided to borrow the money from the pension funds of the civil servants and the armed forces. I can tell you that nobody asked any serviceman I know of whether he wanted these funds to be borrowed by the government and put into savings bonds or

must change their name or they cannot have a charter to conduct the business of their association any longer.
I suppose they could do something simple which probably even this Liberal government could understand. I suppose they could change their name to the "Long Service Pensioners Association, Formerly the Canadian Forces Long Service Pensioners Association", but I think the members of the forces would say that this is so chicken that a person hates to talk about it. Flowever, this has come up, and I think it would be wise, proper and appropriate if the government were to back off. If these pensioners are still willing to allow their names to be associated with this government, the government ought to be thankful for it, instead of vice versa.
The Canadian Forces Long Service Pensioners Association has been operating from its headquarters in London. I went there to speak with members of the association a few months ago and to see what their problems were. We had a very interesting meeting, and I suggested that they might be better off if they gave up trying to get the government to account for the $7.5 billion which is in the fund and which should belong to the pensioners instead of the government. Perhaps the best thing to do would be to start a funded fund for their pensions. They would have to face the loss of what is in their pension fund, $7.5 billion, which I do not think the government will ever acknowledge.
I do not think the government will give those pensioners any more than it absolutely has to give. I do not want to make invidious comparisons and compare anyone to this government, but the members of the association were willing to go to the extent of forgetting all about this $7.5 billion if they could have a government guarantee that they could continue under the present system for a given period of time, say ten or 15 years, and have the extra interest which is not needed to pay into their fund to keep it even. Let us remember that the interest itself pays in $24 million a year more than is needed for the pensions and the indexation.
However, we must also remember the amount the serviceman pays in and the government pays in. If that could be done for ten or 15 years and if there could be a funded fund, which is the honourable way, the association would be quite happy to forget about the $7.5 billion already put into the fund on their account, which the government will not recognize. I think that might be the way out. The serviceman certainly does not want anyone to think that he is beholden to the taxpayer or to the government at this time for something to which he is not entitled. The impression which is being created by the government across this country is that servicemen are lamprey eels on the big fish, the government payroll. This is not so. They put in sufficient money to pay their pensions and their indexation, and they are entitled to a better and fairer deal than they have been getting. With that I will conclude, Mr. Speaker.


Mr. Fernand E. Leblanc (Laurier):: Mr. Speaker, the hon. member who rose before me spoke mainly, and I understand that since he is the official critic on national defence for the
Pensions
Progressive Conservative party, of the personnel in the armed forces, present, past and future. I appreciate his interest in those classes of individuals who are also very important to us. But, if you examine the title of the bill, you will see that it applies to a much wider variety of people than the personnel in the armed forces. The title of the bill reads as follows:
the Supplementary Retirement Benefits Act...
which applies to all those who fall under the bill.
... the Public Service Superannuation Act...
which includes perhaps 200,000 or 300,000 employees.
... the Canadian Forces Superannuation Act...
which the hon. member has just explained.
... the Royal Canadian Mounted Police Superannuation Act...
which includes a good many individuals.
... and the Members of Parliament Retiring Allowances Act.
Hon. members here, of course, are directly concerned by this bill since it also affects the retiring allowances of hon. members who for one reason or another retire from politics or who will be defeated in the next election which will certainly take place in 1979. I think I can assure the population that an election will be held in 1979.
So when we examine the purpose of the bill we find that it is rather simple but it does have technical aspects where we need consultants and most of all actuaries to help us figure out what is good and valid in this bill. And it seems, according to the speeches I have heard, that opposition parties agree to proceed as soon as possible with the consideration of the bill in committee. Of course we will have to call on experts to enlighten us further and advise us in the consideration of a bill which has many technical aspects.
May I call it ten o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION

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

Maurice Brydon Foster: Mr. Speaker, a few days ago I raised with the minister responsible for CMHC, the Minister of State for Urban Affairs (Mr. Ouellet), the question of the community services program. This program was announced last spring and was supposed to come into effect in 1978. But

February 12, 1979
Adjournment Debate
there have been delays, and this has had an effect on the municipalities because the community service program will provide about $400 million for important and needed community services such as sewer and water facilities and other municipal infrastructure programs. Apparently the delay has taken place because the minister has not been able to negotiate a suitable arrangement with the Ontario government for the provision of this service to the municipalities.
The program, besides providing sewer and water facilities and funding for the services, will provide assistance for neighbourhood improvement, for cultural and recreational facilities, for insulation programs, for community buildings, and for facilities to convert waste into energy. The funding will be in the form of grants rather than loans. These grants can be used for debt servicing.
In my constituency, in the Algoma district, for instance, municipalities such as Sault Ste. Marie are looking forward to building large sewage treatment facilities and they need to know what kind of funding will be available under this program. Communities like Elliot Lake with new towns of 20,000 people need to know what kind of funding will be available under this program. Another town in my constituency in the Manitowaning district, the town of Little Current, applied last year for a municipal infrastructure grant. It was not able to have it funded, but it now has the approval from the provincial government to go ahead with the program. They need to know what kind of financial assistance will be available for the community service program in 1979, because they want to go to tender.
The federal government sets down the criteria for the program, and then the actual approval needs to come from the provincial government. But the question I want to put to the minister, and which I would like to have answered on behalf of these municipalities, is how soon final agreement will be reached with the province of Ontario on the community service program so that money can be made available to the municipalities to get on with these important and needed community facilities and services. I think that the time for action is now, and there should be no further delay because it is not only the municipalities in my constituency but many others across the province of Ontario that are waiting to know how soon this program will be implemented in Ontario and funds made available to the municipalities to proceed with these important community services and capital work projects in this fiscal year.


Mr. Thomas H. Lefebvre (Parliamentary Secretary to President of Treasury Board):: Mr. Speaker, 1 wish to thank the hon. member for Algoma (Mr. Foster) for bringing this subject to the attention of the House and once again showing the interest which his constituents have in the many benefits that can come to his riding from the program announced by the Minister of Public Works and Minister of State for Urban Affairs (Mr. Ouellet).
When the minister replied to the question put by the hon. member he said that he was meeting with the minister and officials of the province of Ontario and that this meeting would

be attended also by officials of CMHC. The results of that meeting, and of meetings earlier in the day between officials of the province of Ontario and CMHC, gave both ministers reason to believe that the negotiations which have been ongoing for several months would be brought to a successful conclusion with the signing of the required federal-provincial agreement very early in the new year.
There would seem to be every reason to expect that the benefits of this new program, which involve extensive grants of federal funds to municipalities, will be available to Ontario commencing early this year. A few weeks are required to allow the provincial minister to complete the necessary process of obtaining provincial authority to sign the agreement on behalf of the province of Ontario.
This is an appropriate time for me to remind the hon. member that this new program has been introduced to provide provinces and municipalities with a maximum degree of flexibility in the utilization of federal funds for a broad range of community projects and services. It will replace the assistance previously available through the Neighbourhood Improvement Program, the Municipal Incentives Grants Program, and the Municipal Infrastructure Program, all three of which had proved successful while in effect but were perceived in some quarters to be unnecessarily narrow and restrictive in application.
While there are criteria applicable to the acceptability of projects under this new community services program, they are sufficiently broad to offer the opportunity of participation to a larger number of municipalities to sponsor a broader variety of projects, at the same time including the types of projects eligible under the former programs. Within the terms of the criteria the provinces and municipalities have the responsibility for setting general priorities and selecting specific projects to be assisted out of funds budgeted each year. This represents no change from the manner in which the Neighbourhood Improvement and Municipal Infrastructure Programs were administered previously.
The negotiations with all provinces on this program are moving into the final stages, and the Minister of Public Works and Minister of State for Urban Affairs is expecting to have agreements signed with all provinces early this year.


GOVERNMENT EXPENDITURES-POLICY RESPECTING EX GRATIA PAYMENTS
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, on the opening day of this part of the session I asked the President of the Treasury Board (Mr. Buchanan) certain questions relating to the government's policy on ex gratia payments. I specifically mentioned four instances where it seemed to me, based on the definition of what is normally considered the basis for ex gratia payments, having reference to the government authorities manual, and other authorities, clarification was needed.
February 12, 1979

I hope that tonight, sir, the minister will personally, or through his spokesman or parliamentary secretary, take the opportunity to provide answers not only to the questions I asked on January 23, but also in respect of additional information I requested in a letter addressed to the minister last Wednesday. Unfortunately I have had no response to that either.
The definitions of ex gratia payments, either in the government authorities manual, or the statutes setting out the basis for such payments, appear to have one major criterion, and that is that it is one for which no liability is recognized and it is made as an act of benevolence in the public interest. Implicit in this, sir, I take it to be that there will be no ex gratia payments where there are statutes in existence under which a payment can be made in the regular fashion, that is to say, one would not settle by an ex gratia payment a matter involving land, because that could be paid under an expropriation act. The authorities manual itself says:
Where there is no statute providing for payment of compensation for damages, authority of the Executive is required for settlement of claims against the Crown without resorting to litigation procedures. The Treasury Board has directed that a statute which simply authorizes a Crown agency to determine the manner in which money made available to the agency is to be spent is not to be interpreted as authorizing payment of claims.
Perhaps I might outline my concerns very briefly, Mr. Speaker, with reference to four of these payments, the ones about which I previously asked the minister. For example, let us start here in Ottawa with the item listed in this year's public accounts as compensation for guard services at L'Es-planade Laurier Building, Ottawa, charged to Vote 10, Olympia and York Developments. Why was this payment authorized and by whom were negotiations initiated? By definition, obviously there could have been no legal liability, or it would not have been an ex gratia payment. Which officers of this company came forward with the claim? What did the property management personnel for the department and Mrs. Tissot have to say about all of this? Incidentally, were payments of this sort made in other cases, say, for example, at Place du Portage when she was there?
Could I have an answer from the government representative with respect to the compensation for the expropriation of land at Mirabel which amounted to $2,391,145? Were all proper, legal and statutory steps followed under the Expropriation Act? How could one go beyond or outside the statutes so specifically tailored for this remedy and stay within the bounds of ex gratia payments? Was the fine academic mind of the Minister of Transport (Mr. Lang) brought in to engineer this situation? Did he specifically authorize it? Did he have the authority to authorize it? What does the spokesman for the government say about this?
The interpretation or definition section of the Expropriation Act is very broad. Land includes "buildings and structures and other things in nature of fixtures, mines and minerals whether precious or base, above or below the surface." It goes on to say
Adjournment Debate
that interest in land in relation to land in Quebec includes "the interest of a lessee therein." The government apparently really had to stretch on this one. I would like to have more information about this item.
The amounts themselves are extraordinary. Sandwiched in between the two I have just mentioned is an incident which is more conventional. It appears that Kenneth MacEwan was paid $600 for the loss of tools. That is more like an ex gratia payment. But here is another. Payment was made to MacGregor Travel Company for legal, accounting, transcript and other costs incurred and arising out of an inquiry and report upon the financial administration of Air Canada which amounted to $39,374. I recall very well the circumstances and the part played by this company. They received a $100,000 payment from Air Canada, which was one of the major items that triggered the inquiry into Air Canada by Mr. Justice Estey.
It is very strange, prima facie, I would say, to have an ex gratia payment under these circumstances. I would think that the budget of the original commission of inquiry would have been a more appropriate vehicle, but if no legal obligation existed to pay this company and if no other way could be found, let us hear about why this company should get such a gift and, incidentally, whatever happened to the $100,000 they were paid by Air Canada? Did our national air carrier ever get that money back?
It is interesting to compare that sort of ex gratia payment's concept with the case of John Danch, an RCMP officer who contested a case in the federal court of appeal successfully about an unjust dismissal. The Solicitor General (Mr. Blais) has the discretion to pay his legal costs, which are far less than $40,000. He has not received a penny, even though the discretion is there.
I see that I am running out of time, but I would like to mention the fourth example. It involved $500,000 which was paid out, again on an ex gratia basis, to Ste Marie Air Services. Again, I quote from the public accounts:
To compensate for loss of earnings due to operating restrictions resulting from the opening of Mirabel airport.
There are no other comparable payments to other air services, and that is a lot of money for a little company incorporated in 1964 and turned over to the children of the incorporating individual and into which a professional land surveyor, Mr. Verdier, in 1976 bought a substantial interest. This half a million dollars to compensate for loss of earnings is almost five times the assessed value of the land and buildings of Ste Marie Air Services. This air strip is not even in the "Tersa" of Mirabel, and there is some question as to whether it should ever have been licensed in the first place because of the elevation of its runways. What is the story behind this payment? I have information that Mirabel was not the reason at all for the suspended operations of this little air service.
I would like to hear further details about these particular ex gratia payments which stand out in such a dramatic way, not only because of their amounts, but because of the definition and the circumstances.

February 12, 1979
Adjournment Debate


Thomas Lefebvre: Mr. Speaker, I am not in a
position to give the hon. member answers to the specific subjects he has brought up, but I will attempt to explain the government's policy in regard to these ex gratia payments.
I would like to point out that by "ex gratia payment" I mean a payment which is an act of benevolence in the public interest, is wholly gratuitous, and is approved as an act of grace in an area of government operations not already regulated by legislation. The Crown, in making such payments, does not therefore admit liability for them and as a matter of law is not liable for them, indeed the Crown makes such payments only where it is clear that there is no legal liability to do so.
The making of these payments is regarded as being an exercise of benevolence or a prerogative of the Crown. The authority of the governor in council, acting as the Queen's representative in Canada, is therefore necessary for each payment unless the governor in council has made other arrangements. One such other arrangement was made in 1974 in the form of the Ex Gratia Payments Order, 1974. Under that order in council deputy heads are authorized to make ex gratia payments not exceeding $1,000, mainly to employees, in respect of damage to or loss of real or personal property suffered by an employee in the course of his duties.
All such payments in excess of $1,000 and all other kinds of ex gratia payments are authorized individually by the governor in council on the recommendation of the Treasury Board following the consideration of a submission from the minister of the department concerned.
In most cases ex gratia payments are made for the purpose of compensating someone in part for a loss or harm already suffered but for which the Crown is not legally liable.
The Treasury Board, in reviewing recommendations to the governor in council for the making of ex gratia payments, looks at each case on its merits, taking into account such factors as the need for the equitable treatment by the government of groups or individuals, the public interest, fairness, the receipt by the Crown of services or claims against the Crown for which the Crown is not legally liable to pay, and the degree of hardship that would be imposed upon individuals and groups by failure to act ex gratia.
Finally, Mr. Speaker, I would like to remind hon. members that all ex gratia payments are listed annually in the public accounts of Canada.


LABOUR CONDITIONS-REQUEST FOR DETAILS OF WAGE SETTLEMENTS
David Orlikow: Mr. Speaker, in the third week of January the Prime Minister (Mr. Trudeau) warned against too large wage increases which he said could trigger double digit inflation. On January 26 the Minister of Finance (Mr. Chretien) warned business leaders that it would be crazy to go back to the kind of wage settlements that
[Mr. MacKay.J
prevailed before the wage control program in 1975. The chairman of the Board of Economic Development added his two cents worth. He told businessmen that non-government workers were getting settlements about 1.5 per cent above those of workers in the public sector.
What is the government worried about, Mr. Speaker? Is there in fact an explosion in wage settlements? Is there in fact a danger that wage settlements are of such a size that they could trigger double digit inflation? The facts show exactly the opposite. Wage and salary increases are averaging just 6.4 per cent, 2 per cent less than the increase in the cost of living in the last year, so that workers in 1979, if they follow the advice of the Prime Minister and other members of cabinet, are going to be asked by the government to accept a reduction in their real standard of living.
Let us compare the attitude of the government with regard to wages to its attitude with respect to an increase in profits of Canadian corporations. On February 7 the Globe and Mail reported that after tax operating profits of 110 corporations grew at a faster pace in 1978 than in any year since 1973. Profits of the 110 companies surveyed rose by 25.6 per cent in 1978, which is more than double the 12.2 per cent recorded in 1977.
It is interesting to look at these corporations by classification. They show that bank profits increased by 33.2 per cent, in the base metals industry they increased by 44.1 per cent, in the paper and forest industry profits they increased by 86.2 per cent, and merchandising profits increased by 68 per cent.
These facts were brought to the attention of the Prime Minister, and the substantial increases in profits were compared with the Prime Minister's strictures placed upon workers. What did the Prime Minister say about these profits? He said, "We are glad there are profits." That is the attitude of the government. Increased profits regardless of their size are fine, but wages must not go up more than 6.4 per cent.
What has happened? The cost of living increased by 8.4 per cent last year. Beef prices are going up by 18 cents per pound. Recently the Anti-Inflation Board reported that food prices went up by 19 per cent in 1978. The government was urged to take action because price increases are substantially higher than necessary. In the case of food, the increase is much higher than the increase obtained by the farmer. The middleman, the processors and the retailers, are skimming off exorbitant increased profits as a result of the increases they have been allowed to adopt.
When that situation was brought to the attention of the Minister of Consumer and Corporate Affairs (Mr. Allmand) not once, not twice, but many times, all the minister would say is that the government is looking into reports of profiteering by food companies. We have had experience with studies done by the government. We know that they take two or three years and lead to no action. No one on behalf of the government, not the Prime Minister, not the Minister of Finance, nor the Minister of Consumer and Corporate Affairs, who are the ones calling for restraint on wage increases and are pointing to the
February 12, 1979

direction they want the private sector to take by pointing out the tough line they are taking with public servants, will lift a finger to restrain the business community.
Need I remind hon. members that in a similar situation, United States presidents Kennedy and Johnson called in representatives of the steel and aluminum industries and made it clear to them that they would not accept the exorbitant price increases which they were proposing to implement at that time? Will the Prime Minister do that? No, of course not. He is too busy lecturing workers on the need for them to show restraint. It seems to us that if the government is concerned about inflation, which it talks about incessantly, and if it wants to keep prices from escalating too much, and if the government wants to dampen inflationary forces, then it ought to be calling on all sectors of the community to practise the same restraint.
It seems unfair for the Prime Minister and his cabinet ministers to be giving the lectures they have been giving to the workers of this country. These people have not been receiving exorbitant wage increases, partly because they have been trying to be good citizens, and partly because the economy has not permitted them to be as demanding as they can be, have been, and should be when the economy is booming.
I would hope that the government would apply the same kind of thinking to prices and profits as is applied to the legitimate requirements of the working people of this country. Until it does that, the government is not dealing with Canadians in a just and equitable manner.


Donald Paul Wood: Mr. Speaker, I am pleased to reply to the hon. member for Winnipeg North (Mr. Orlikow). It is correct that wages increased at a lower rate than the consumer price index in 1978. Therefore real wages declined. Much of the increase in prices resulted from higher food prices and the lower value of the Canadian dollar. It should be recalled, however, that real wages were increasing in preceding years and, even with the decline of 1978, were some 6 per cent above their 1974 level.
With some moderation in food price increases in 1979, workers should realize a further gain in real terms. Increases
Adjournment Debate
under new wage settlements decelerated considerably over the period in which real wages were increasing and this deceleration continued into 1978. The historical record demonstrates that real gains are possible with moderation in cost and price increases.
It is not unreasonable that some workers might attempt to recoup some of the loss in real wages of the past year. However, it is desirable that this adjustment should be gradual, and that wages would not rise substantially and erode the gains we have made in our international competitive position. This applies not only to wages but to all costs, including profits.
Increases in average weekly earnings in the industrial composite decelerated from a high of 14 per cent in 1975 to over 12 per cent in 1976, and to 9Vi per cent in 1977. Complete data for 1978 are not yet available, but January-November figures suggest an average 1978 increase of about 6 per cent.
The consumer price index increased almost 11 per cent in 1975, 7.5 per cent in 1976, 8 per cent in 1977, and 9 per cent in 1978. Real wages increased, therefore, by a little over 3 per cent in 1975, a little over 4 per cent in 1976, 1.5 per cent in 1977, and in 1978 declined by about 2% per cent.
Wage settlements in major collective agreements decelerated from 17 per cent in 1975 to 10 per cent in 1976 and 7.8 per cent in 1977. For the year 1978 as a whole, the average increase should be about 6% per cent. The first year increases in agreements were not substantially higher than increases for subsequent years in agreements. In the first quarter of 1978 they were 7.1 per cent, in the second quarter 6.6 per cent, and in the third quarter 7 per cent.
It should be emphasized that wage settlement data are for agreements signed in a given period and cover a limited proportion of all agreements in existence, and an even lower proportion of total wages for all employees.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the parliamentary secretary, but his three minutes have expired.
Motion agreed to and the House adjourned at 10.29 p.m.



~y.







Tuesday, February 13, 1979