1980-12-12

ROUTINE PROCEEDINGS


Mr. Bill Yurko (Edmonton East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The proposed constitutional patriation and amendment resolution, supplemented by the National Energy Program, has fostered and is continuing to foster apprehension in Canada, giving rise to questioning of the inherent values of the confederation bargain. Much of this apprehension is caused by the repeated suggestion that loss of provincial ownership of resources is at stake. To reduce such apprehension, I move, seconded by the hon. member for Bow River (Mr. Taylor):
That Parliament, through the appropriate action of this House, reaffirm that natural resources within the boundaries of each and every province shall remain the property of the provinces, and furthermore, that the final address to Her Majesty on constitutional patriation shall contain a section affirming that no existing natural resources ownership rights shall be taken from or abridged in any province without the expressed consent of the affected province.


Madam Speaker:: Presentation of such a motion for debate requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Arnold Malone (Crowfoot):: Madam Speaker, the value of grain on the market has been down to the maximum allowable limit for each of the past nine days, forcing a 25 per cent decrease in value of grain; the price of feeder cattle this past week has dropped to $10 per live hundredweight; the price of farm machinery may escalate by 20 per cent within the next 12 months; interest rates for farm loans are now between 17
per cent and 25 per cent. Therefore 1 move, seconded by the hon. member for Portage-Marquette (Mr. Mayer):
That the federal government develop economic strategies which will immediately protect Canadian farmers, so as to ensure their survival and to guarantee an adequate food supply for all Canadians.


Madam Speaker:: Presentation of this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


BREAKDOWN OF VOTES HELD-MOTION UNDER S O. 43
Mr. Jim Fulton (Skeena):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Whereas there have been 38 votes in the House so far in 1980 under the Liberal administration, and keeping in mind the distorted and misleading statements made by Conservative members of the House regarding those votes, let the following figures act as reference points for truth in the future: the Tories have voted with the NDP 14 times; the NDP have voted with the Liberals seven times; the Tories, however, have voted 16 times with the Liberals.


Mr. Baker (Nepean-Carleton):: The NDP are feeling the heat.


James Ross Fulton: In view of the fact that the Tories vote with the Liberals twice as often as the NDP, 1 move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this day be recognized throughout Canada as tweedledec and tweedledum day, keeping in mind the dangers for Joe and the gang when caught by the Canadian public marching heel to toe, nose to cheek, and eye to eye with Pierre.


Madam Speaker:: I fail to see the urgent and pressing necessity of such a motion.


NEW DEMOCRATIC PARTY
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam
Speaker, I rise under the provisions of Standing Order 43. On December 12, 1979, the hon. member for Broadview-Green-wood (Mr. Rae) introduced a motion which led to the defeat

December 12, 1980
of the Clark government. The motion stated that the Progressive Conservative government was doing nothing about high interest rates, while the NDP-Liberal coalition in fact was participating in an all-party committee called to look into a solution to the interest rate problem. On December 11, 1980, the hon. member for Broadview-Greenwood and the hon. member for Winnipeg North Centre (Mr. Knowles) introduced substantially the same motion. Therefore 1 move, seconded by the hon. member for Yukon (Mr. Nielsen):
That this House unreservedly condemns the NDP for deliberately misleading the Canadian public into believing nothing was being done by the Clark government regarding high interest rates when in fact they were participating in this all-party committee, and condemn in particular the two socialist hypocrites who introduced the two mischievous motions.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Madam Speaker:: Presentation of such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

[DOT] (mo)


FINANCE
Mr. John Gamble (York North):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. When the Trudeau administration resumed office in March the Canadian dollar was trading at 87.2 cents in terms of the U.S. dollar, but is now trading at 83.15 cents, devalued by 4.05 cents, causing an increase in the cost of living of 1.6 per cent as the result of higher costs of imports, particularly of food. Considering that in March the Bank of Canada rate was 14 per cent and is now 16.14 per cent, an increase of 2 per cent, with the prime bank rate now 17 per cent and small businesses and others paying interest rates of up to 20 per cent, I move, seconded by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie):
That this House request the Trudeau administration to resign, since if they serve their full term in office and the above rates continue at the pace which has been described, the Canadian dollar is likely by then to be worth 16 cents and the bank rate to have gone up to 83 per cent.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL PARKS
Mr. Sid Parker (Kootenay East-Revelstoke):: Madam Speaker, I rise under the provisions of Standing Order 43 to propose a motion of urgent and pressing necessity. Due to the heavy snowfall in southeastern British Columbia, including Yoho National Park, which has caused a serious grazing problem for elk and other wildlife to the extent that many of them will starve if this situation is not corrected, 1 move, seconded by the hon. member for Kootenay West (Mr. Kristiansen):
That the federal Ministry of the Environment immediately meet with provincial officials to take steps to protect these animals before they die from exhaustion and starvation.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL REVENUE
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, I also rise on a matter of urgent and pressing necessity with respect to interest rates. In view of the Liberals' disastrous high interest rate policy which will result in the cashing in of billions of dollars worth of Canada Savings Bonds and other government obligations, I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the Minister of Finance be required to make a statement on motions explaining what increases in taxation he plans in order to refinance his government's horrendous public debt.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SCIENCE AND TECHNOLOGY
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, I too rise under the provisions of Standing Order 43. Whereas job security, job creation and the future of the youth of our country are so heavily dependent upon our efforts in research and development, I move, seconded by the hon. member for Scarborough East (Mr. Gilchrist):
December 12, 1980

That this government immediately create a full scale senior ministry for science and technology under a minister who can give this vital portfolio his undivided attention and the priority it deserves.


Madam Speaker:: For presentation, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. John C. Crosbie (St. John's West):: Madam Speaker, my question is directed to the Minister of Finance. Since his budget was brought down on October 28, the Canadian dollar has declined in value by 2.07 cents to 83.15 cents, the lowest level since 1933. The Bank of Canada rate has gone up over 4 per cent to 16.14 per cent and the prime bank rate has gone up to 17 per cent. The inflation rate has had to be revised to 11.4 per cent for next year and the unemployment rate has been revised upwards by the Economic Council of Canada. Real wages will decline in both 1980 and 1981. It is the most disastrous budget since Herbert Hoover-a monumental flop.
My question is this. The minister said on Wednesday that he had decided not to launch any new programs or change any budgetary measures. Yesterday he said he had not yet decided-he started to weasel and qualify-and outside the House he said that he was looking again at the adverse impact on potential home owners, small businessmen and farmers.
In view of these statements, would the minister make an announcement on Monday-we cannot afford any more delay-on what his new policies will be to assist home owners, potential home owners, small businessmen and farmers? They cannot afford to wait any longer.


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: No, Madam Speaker, it is not my intention to make a statement on Monday.


Walter David Baker: That is the first definite statement you have made.


John Carnell Crosbie: Madam Speaker, when the Prime Minister said on February 18 "Welcome to the eighties", did he mean to the 80-cent dollar? Is that what he was welcoming us to? I refer the minister to the Prime Minister's report, the report of the Economic Council of Canada, at page 33. They pointed out in their review last year there were two driving forces in the Canadian economy which could help us in the eighties, the U.S. and world outlook and high domestic energy
Oral Questions
investment. Now they say that only the latter remains, because the world outlook is poor, to move the Canadian economy forward in the period 1981-83. They also said in their prebudget statement that all that was left was energy investment.
In view of the budget and the fact that the budget energy policy has caused cancellation and delay of the Alsands tar sands projects and the heavy oil project at Cold Lake, in view of the dispute with Newfoundland which prevents the development of east coast offshore oil and gas resources, and in view of the fact that there will not be any massive energy investment in the eighties if these disastrous policies continue, is the minister prepared to announce changes which will start these projects up again so that Canada can have some economic hope for salvation in the eighties?


Allan Joseph MacEachen: Madam Speaker, I want to repeat the answer 1 gave yesterday to the hon. member, or at least to an hon. member in the opposition, that we have established in the National Energy Program a comprehensive framework, for energy development in Canada and that we have provided the basis upon which these energy projects can and will go ahead.


John Carnell Crosbie: Madam Speaker, my supplementary is this. The Prime Minister, through his agency, has condemned the minister's budget, both in this report and in the report brought down since their annual report was tabled on Wednesday, condemned the energy policies and has shown what will be the effect of the budget. They say that they have had to revise their forecast and that there will only be growth of 0.5 per cent next year.
In view of all this and the minister's weaseling outside the House yesterday that he is considering changes to help small businesses, home owners and the like, would he tell us when we can expect an announcement from him as to some change in policy in order to give hope to Canadians as they approach the Christmas season?


Allan Joseph MacEachen: Madam Speaker, first of all, I disagree totally with the hon. member when he says that the Economic Council of Canada denounced the budget. In fact, in the review which was prepared before the budget-and it is made quite clear in the introduction that it was prepared before the budget-there is considerable support for a very large number of the main elements in the budget statement itself.


John Carnell Crosbie: Where?


Allan Joseph MacEachen: In fact, the only major difference that I can find in the policy thrust of the Economic Council of Canada and that of the budget is that the Economic Council of Canada recommended a considerably higher price for energy in the next several years.


John Carnell Crosbie: Read the supplement.


Allan Joseph MacEachen: That is a clear difference, but in terms of macroeconomic policy and in terms of the posture of the budget, the Economic Council of Canada gives considerable support.

December 12, 1980
Oral Questions
The hon. member has asked whether, in light of the impact that higher interest rates will have on particular groups in the community, I will be undertaking any new measures. I want to explain to the hon. member, as I did in the spring when we were facing a similar situation, that we did undertake a very deep analysis of the impact, for example, of those interest rates on individuals in the country who might be renegotiating their mortgages. We had consultations with the lending institutions. As a result of that analysis we were able to develop the conclusion that those cases that were adversely affected would be dealt with and were dealt with effectively by the lending institutions.


John Carnell Crosbie: By personal bankruptcy.


Allan Joseph MacEachen: The same process is ongoing at the present time. I am confident that the lending institutions, including banks, will take into account the particular impact of these high interest rates on small businesses and on home owners.
I repeat, while it may be popular for hon. members opposite to relate the high interest rates to the budget, they ought to understand, and do understand deep down, what is happening. I have great respect for the intelligence of the hon. member for St. John's West, and hon. members opposite do know deep down in their intelligence-


Miss Begin:: It is really deep.


Allan Joseph MacEachen: -that what is happening now, not only with respect to interest rates in Canada but with respect to interest rates in most other industrial countries, is the result of policies that are being followed-


John Carnell Crosbie: By you.


Allan Joseph MacEachen: -by the Federal Reserve Bank in the United States. I happen to believe-


Some hon. Members:: Order, order.


Allan Joseph MacEachen: -that these policies in the current circumstances are causing considerable harm, not only to Canada but to other countries, and that the United States ought to be encouraged to take another look at these damaging policies which are being followed.


Some hon. Members:: Oh, oh!


An hon. Member:: Blame the U.S.


THE ECONOMY
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, I should like to address a supplementary question to the Minister of Finance. This is the first time that we have heard in this
House the Minister of Finance saying that interest rates are not the concern of the government. The economy is in a tailspin. The horrendous interest rates are going to cause serious consequences for low and middle-income earners. The poor in this country will be lacerated. Today we have the news that the food price index has risen 1.05 per cent in November because poultry, eggs, fish and fresh vegetables have increased in price. The consumer price index shows 12.7 per cent for food, 13.8 per cent for home consumption, 29.8 per cent for fresh vegetables and 67.1 per cent for sugar and food preparations. This is an ominous Christmas present from this government to the people of Canada.
1 should like to ask the minister what he is going to say to his constituents in Cape Breton when he goes back at the Christmas recess. More particularly, what specific undertaking is he going to give the people of Canada regarding relief from this onerous inflation and the high interest rates that we have in Canada today?


Allan Joseph MacEachen: Madam Speaker, I can assure the hon. member that when I speak to my constituents during the Christmas break 1 will make more sense than he is making in his question.


Some hon. Members:: Oh, oh!


An hon. Member:: Scrooge!


Ramon John Hnatyshyn: Madam Speaker, the Minister of Finance suffers from delusions of adequacy; that is all I can say about him. Immediate relief is required for a wide spectrum of interests in this country today. For example, farmers and fishermen are required to plan for next year. For taxation and other purposes, they have to make their purchases of equipment and supplies. For small businesses, the high carrying cost of Christmas stock will cause widespread bankruptcies and the quiet closing of over 50,000 small businesses in Canada.
Yesterday the minister promised the press that he would look at the adverse impact on potential home owners, small businesses and farmers. We need action now, before Christmas. When is the minister going to make a statement? When can we expect him to come forward with the promised measures regarding these segments of our economy which are very seriously affected?


Allan Joseph MacEachen: Madam Speaker, 1 want to make it clear, first of all, that no such measures have been promised. When any decision is taken it will be announced in the House.


Mr. Nielsen:: It will be announced "in due course".


Allan Joseph MacEachen: Madam Speaker, what 1 have undertaken to do is to monitor very carefully the impact of these high interest rates on various groups in the community. The hon. member, in common with all members of his party, each day is calling for immediate relief, for increased expenditures, at the same time as the official critic, the former minister of finance,
December 12, 1980

is calling for a reduced deficit and restraint in public expenditures.
If hon. members will recall, it was a year ago today that they had an opportunity, if they had put their heads together, to stay in office. They ought to get their heads together in their economic thinking and discover whether they want more spending, less spending, a greater deficit or a lesser deficit. Because you cannot have a lesser deficit by launching new spending programs, as advocated by the hon. member.


FINANCE
Mr. Edward Broadbent (Oshawa):: Madam Speaker, I noticed the Prime Minister clapping at the reference to "a year ago today". I correct the Minister of Finance; it is a year ago tomorrow.


An hon. Member:: A year ago today.


Mr. Knowles:: A year ago tonight was the Liberal party.


John Edward Broadbent: A year ago today the Prime Minister, then the leader of the opposition, expressed support for a motion which condemned the then Conservative government for its high interest rate policy. Does the Prime Minister remember that he promised during the campaign "not only to deal with interest rate policy, but to bring interest rates lower". Since interest rates are now 2.5 percentage points higher than they were when the Liberals voted against the Conservatives, what plans does the government have in mind to live up to its election promises, or does the Prime Minister plan just to sit there and completely doublecross the people of Canada who voted for him?
Right Lion. P. E. Trudeau (Prime Minister): Madam Speaker, 1 answered this very question the other day. I told the hon. member that I had no recollection of that statement or the context of it. 1 asked him if he could perhaps send it over to me and I will refer to it.


John Edward Broadbent: Madam Speaker, the quotation is from the Toronto Star. I would have thought the Prime Minister's staff, which is reasonably substantial, would have brought it to his attention by this time. The quotation is there. The people of Canada know how the Liberals voted a year ago. They know the Prime Minister promised to do something about interest rates.
Since the Prime Minister was talking about changing priorities on food the other day, and given the fact that Canadians still want to own their homes and that mortgage rates are now 17 per cent to 20 per cent, I ask the Prime Minister what specific measures does he have in mind for Canadians in terms of their human priorities in regard to being able to buy a home? Alternatively, is he saying to the people of Canada now that they have to give up the dream of buying their own home?
Oral Questions


Mr. Trudeau:: Madam Speaker, the hon. member says the statement was in the Toronto Star. 1 say it was not in our election platform and it was not part of the statement I made based on the election platform. We did not promise that we would lower interest rates and 1 challenge hon. members to point to any section of our program which said that we would.


John Carnell Crosbie: Why don't you do something about it anyway?


John Edward Broadbent: Madam Speaker, the Prime Minister was interviewed during the campaign by the Toronto Star; 1 will send a copy of the article to him.


Pierre Elliott Trudeau: You should have done it the other day when 1 asked.


John Edward Broadbent: He may not consider that a commitment, but most other parties consider when they have an interview during a campaign which is published in the largest daily in Canada that that is part of the campaign. But the Prime Minister has a rather perverse view about what the truth actually is, and we all know that.


Some hon. Members:: Oh, oh!


John Edward Broadbent: Since bankruptcies are increasing, since farmers' debt loads are increasing and since the cost of living for Canadians coast to coast is going up, does the Prime Minister have any intention of telling the man, who is sitting to his right, to bring in a budget, which recognizes the disastrous state the Canadian economy is in, and do something about it?


Pierre Elliott Trudeau: Madam Speaker, the Leader of the New Democratic Party must be joking. There was a budget brought down just about a month and a half ago.


John Carnell Crosbie: It was a joke, and a bad one.


PRESENCE IN GALLERY OF THE MINISTER OF POLICE AFFAIRS FOR NIGERIA
Madam Speaker:: I would like to draw the attention of members in the House to the presence in our gallery of the Hon. E. C. Osammor, who is the Minister of Police Affairs for Nigeria.


Some hon. Members:: Hear, hear!

December 12, 1980
Oral Questions


THE ECONOMY
Miss Pat Carney (Vancouver Centre):: Madam Speaker, I would like to address my question to the Minister of Finance. In view of the statements he has made here today, one gathers that he does not grasp the connection between his economic policies and the economic war zone that has been created in the Canadian economy. Is the minister aware that his policies are bankrupting some businesses, increasing food prices, costing some people their jobs and pricing homes out of the reach of people? Does he lack that basic understanding or is it simply a lack of compassion?


Allan Joseph MacEachen: Madam Speaker, the hon. member has prefaced her question by linking the current interest rates to policies pursued either by this government or by the Bank of Canada. In that statement she is wrong, because we are not pursuing policies that are bringing about these interest rates. These policies are being pursued by the Federal Reserve Bank in the United States. Everybody who is observing the situation knows that. 1 do not think it adds to the understanding of the Canadian people of the current serious economic situation to falsify and distort the record in the way it has been by members of the opposition yesterday and today.


Pat Carney: Madam Speaker, the finance minister has just proven that he has no understanding of the basic facts of Canadian economic life. While interest rates are partially affected by outside influences, as the minister has stated in the past, they also reflect the policies followed here with regard to inflation and the budget deficit.
I would like to give a specific example of Canadian policy to the Minister of Finance. I am advised by members of the investment community that the small business development bond, which offers some refuge to small businessmen and gives them some shelter from interest rates, is too inflexible and for too short a period of time to be useful. Will the minister direct his officials to review the legislation under which this bond has been introduced and possibly make revisions to offer more aid to the small business community?


Allan Joseph MacEachen: Madam Speaker, 1 should point out to the hon. member that despite the pressure that is existing on Canadian currency and on Canadian interest rates, current Canadian prime rates or short-term rates are about three points lower than they are in the United States.


John Carnell Crosbie: So what? They are still intolerably high.


Allan Joseph MacEachen: There is no way the Canadian economy can drop off the planet-


John Carnell Crosbie: Why don't you try it?


Mr. Kempling:: Without a parachute.


Allan Joseph MacEachen: -or that the Canadian people can drop out of the world economy. That seems to be the sort of primitive economics that we are hearing from members of the opposition who ought to know better and who want to be making repentance on this twelfth of December, 1980, for their misdemeanours of a year ago and their lack of intelligence.


SOCIAL DEVELOPMENT
Mr. John Kushner (Calgary East):: Madam Speaker, my question is for the Minister of Finance. It has to do with the federal social services program for native peoples in Canada. Is the minister planning to withdraw social services programs, in so far as benefits are concerned, from native peoples who do not live on the reserve, and indeed pass the buck to the provincial governments to pick up the tab, and, if so, why?


Allan Joseph MacEachen: Madam Speaker, it is not the intention of this government and certainly not the intention of the Minister of Finance to withdraw from a basic priority social programs in Canada. The hon. member will realize that under this government and previous Liberal governments, social programs have been expanded from an expenditure of about $11 billion to $33 billion within a period of ten years, a very dramatic increase which attests to our concern about social development for all groups in the country. I want to assure the hon. member there is no lack of interest or concern in this party about social programs. However, if the former government had been in office, with the 10 per cent expenditure rule that had been espoused by the former minister of finance we would have witnessed deep cuts in social development.


John Kushner: Madam Speaker, I wonder if the minister really knows what is happening in this regard. It is quite clear that the minister is confirming the statement in the Auditor General's report which says that the government has lost control and that the department's bureaucrats do not even know what their role is. What is this government planning on taking away next as a result of its inability to control spending? Is the minister denying that the government is not going to take away the program from those native peoples who do not live on the reserve?


Allan Joseph MacEachen: Madam Speaker, 1 have no particular knowledge of that item of our social program. The hon. member ought to address that question to the minister of Indian affairs.
December 12, 1980


THE LATE JOHN LENNON
Mr. Stanley Hudecki (Hamilton West):: Madam Speaker, my question is directed to the Right Hon. Prime Minister. On behalf of hundreds of thousands of young and not so young Canadians who are sad and grieving the untimely death of one who put into his music and song that yearning for love and peace, would the Prime Minister express their feeling of sorrow and sympathy to the family of the late John Lennon?


Pierre Elliott Trudeau: Madam Speaker, I thank the hon. member for the suggestion. He will recall that a similar motion was put to the House the other day and it was not adopted. I think it would be a nice gesture if we could get unanimous agreement to adopting such a motion. Failing that, I will gladly write a letter in that sense to the widow of Mr. Lennon. I have already written a private letter but 1 would be glad to write another on behalf of the government and people of Canada.


Some hon. Members:: Hear, hear!


HOUSING
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, my question is directed to the Minister of Finance. One of the canons of the monetarist policy which the minister's party has been following, as did the Conservatives in their brief occupation of government, is that high interest rates help to fight inflation. I ask the minister to focus his mind for a moment on the housing problem in Canada and to consider that housing costs have gone up as much as 22.2 per cent in St. John's and 35.5 per cent in Vancouver. The head of HUDAC has estimated that a house which now sells in Toronto for $98,000 will in 1990 sell for $250,000 and in the year 2000 for $750,000. Housing starts are now down to the lowest in 15 years in Canada.
Will the minister explain how policies which have the effect of cutting off supply at the source can do anything other than cause the price of houses to escalate? Will the minister comment on the fact that high interest rates, rather than help to fight inflation, simply pour fuel on the problem and make it much worse?


Allan Joseph MacEachen: Madam Speaker, the hon. member made what in essence was a little economic homily and has asked me to comment on it in reply to a question. It is obvious to me and to the hon. member that high interest rates, especially the kind we are now experiencing, are bound to have an effect on the ability of persons in Canada to acquire a home. That is clear. The hon. member now asks me to go on and comment, presumably upon the monetary policy now being pursued by the Federal Reserve Bank in the United
Oral Questions
States in an effort to control the money supply, which is the object of that policy, and to arrest inflation. I expressed concern a few moments ago about that policy. The Governor of the Bank of Canada has also expressed concern to authorities in the United States about the wisdom of the current policy being pursued in that country, because, in our view, it is not a proper application of monetary policy in the current circumstances. That is my homily in reply to the hon. member's.


Bob Rae: Madam Speaker, if it takes a homily in order to get the minister to tell us that the Governor of the Bank of Canada has launched a protest to the Federal Reserve Board, that is fine. That is information which I certainly did not have before and nor did anyone else. Perhaps I will continue to ask homilies if it manages to elicit a response from the minister other than the ones we normally get. Perhaps the minister would consider establishing diplomatic relationships with the Federal Reserve Board to make our representations known on a permanent basis.
Given the fact there is now a president-elect of the United States who appears to be subject to this disease of monetarism, and is not going to be able to shake it for a number of years, does the minister not consider it is now necessary for the government to start looking at alternative policies in Canada on a long-term basis, not simply on a short-term basis in response to particular crises and upward waves in interest rates? There is a need to look for alternatives in fiscal policy, in monetary policy, in dealing with capital flows and so on, so we can establish in Canada an independent monetary policy as well as policies which will not strangle the housing industry, small businesses, farmers and the average consumer but will get our economy going again.


Allan Joseph MacEachen: Madam Speaker, I have absolutely no quarrel with what the hon. member says. I have been searching in my own mind and among the views expressed by economists of this country for fresh alternative policies. I have not heard them from members of the opposition, members of the New Democratic Party or from members of the economic profession, who have been, in my view, unable to describe a policy which could be implemented and would not worsen current circumstances in Canada. That is my conclusion. I am still waiting for a revised policy from the New Democratic Party. Every proposal it has made with respect to interest rates, if adopted, would worsen inflation and make our difficulties greater than they are at the present time.


NORTHERN AFFAIRS
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, my question is for the Minister of Finance. Once

December 12, 1980
Oral Questions
again, I want to remind him of the very exceptional and compounded difficulties which Canadians who live in the mid-Canada section, the northern part of the provinces and the northern regions of Canada, are facing with respect to the high cost of living and the energy package. We have situations where people have to walk away from their homes. They cannot afford to buy heating oil at $2 a gallon or to buy gasoline which costs $3 and $5 a gallon in some areas of northern Canada. Does the minister have any compassion for these exceptional problems in Canada? Is there any plan, such as an energy tax credit or any kind of emergency plan, which the government is intending to implement to mitigate against these very serious difficulties in the north?


Allan Joseph MacEachen: Madam Speaker, obviously the government is concerned about the impact of energy prices on Canadians and, of course, on northern Canadians. It was because of that concern that the government brought in a pricing regime which placed a less onerous burden on Canadian consumers than that put forward in the budget of my predecessor.


John Carnell Crosbie: Rubbish. Tired excuse.


Allan Joseph MacEachen: Again, the hon. member has referred, as have other spokesmen in the opposition, to an energy tax credit and a mortgage tax deductibility program as solutions. I remind him that the imposition of the 18-cent tax on gasoline in their budget, which is fresh in our memory because of the anniversary date, would have virtually wiped out all the benefits proposed in these programs.


REQUEST FOR EMERGENCY MEASURES TO RELIEVE HARDSHIP
Frank Oberle: Madam Speaker, I should like to address my supplementary question to the Prime Minister, who seems to be very preoccupied these days with the North-South dialogue. I wonder if he could project himself to the North-South problems in our country. Is he aware that there are small children and old people living in the north who are starving, who are deprived in a way comparable to Third World conditions, because of the harsh realities of the economic situation in our country? People of the north cannot transport themselves by way of a transit system. They are restricted to the use of their cars or to aircraft. Most part of the year is very cold, they must heat their homes and the situation is desperate. Will the Prime Minister undertake, with his cabinet, to attempt to work out a program which will address itself to this rather serious emergency situation in the north?


Pierre Elliott Trudeau: Madam Speaker, I recognize that life in the north entails many difficulties and even hardship. I have made several trips into the north and have indeed tried to introduce policies and measures which would alleviate some of those hardships. If anyone is actually starving, as the hon. member suggests, I wish he
would communicate their names immediately to the government so we could take emergency measures.


INQUIRY RESPECTING CONTINGENCY PLANS TO ASSIST UNEMPLOYED OIL WELL DRILLERS
Mr. Bill Wright (Calgary North):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. Canadian oil well drilling contractors reported in November that 120 drilling contracts had been cancelled and that 60 more rigs were scheduled to leave the country. According to the drilling contractors, approximately 10,800 jobs will be lost in western Canada. This information was provided to the government one month ago. Could the minister tell the House if he has any contingency plans to help these workers?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, I have had a very fruitful meeting this morning with representatives of the drilling contractors association. During the discussions it became clear that the best solution was an early agreement between the government of Alberta and the Government of Canada. The drilling contractors recognize this requires the willingness of both governments to sit down, negotiate and compromise. They indicated they would make similar representations to the government of Alberta in order to arrive at an early agreement.


Frederick William Wright: Madam Speaker, 1 am sure all these workers will like the minister's answer. In addition to the 10,800 workers who will be out of work this spring in western Canada, there are many workers in central Canada who also will be out of work. Could the minister tell us how many workers will be affected in Ontario and what plans he has to help these workers?


Marc Lalonde: I have to remind the hon. member that the best solution is one whereby an agreement will be reached that would be fair to the Canadian public in general as well as to the industry. I have to remind the hon. member that every dollar increase in the price of oil means that Canada loses 20,000 jobs; that is, 20,000 more unemployed, on a net basis, result from this increase in the price of oil. This is based on figures provided by OECD which apply to all other industrialized countries. We see the results in the western world of the impact of high increases in the price of oil which have now taken place together with a tremendous increase in unemployment in the whole industrialized world, whether it is in Europe, in the United States or in Canada. One has to bear in mind those factors. The price of oil cannot be increased very much without having a negative impact, both in terms of inflation and in terms of unemployment, and I invite my friends to reflect on that also. That is why we are trying to arrive at an agreement which will provide for fair prices to Canadians, as the budget did at the end of October.
December 12, 1980


CONFERENCE OF PACIFIC RIM COUNTRIES-ABSENCE OF REPRESENTATION FROM TAIWAN
Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, I wish to direct my question to the Minister of State for Trade. The minister has recently returned from a Pacific rim conference in Vancouver where he and his officials hoped to make Canadian companies aware of the tremendous economic potential in what is one of the world's fastest growing regions. Therefore, 1 should like to ask the minister the following question. Since recent statistics show that employment is down by 15,000 in manufacturing, by 13,000 in construction and by 11,000 in finance and real estate, why was Taiwan not invited to the trade conference in Vancouver since the Taiwan Power Company, the country's largest electrical power producer, has indicated it is willing to invite Atomic Energy of Canada to bid on two nuclear reactors which the company plans to buy, the sale of which would bolster our chaotic economy?


Hon. Ed Lumley (Minister of State, Trade):: Madam Speaker, as the hon. member knows, we had a very productive meeting in Vancouver at the Pacific rim conference.


Some hon. Members:: Oh, oh!


Edward C. Lumley: About 200 of the leading businessmen from across Canada were there.


Some hon. Members:: Hear, hear!


Edward C. Lumley: Probably the most important thing that happened following the conference was that our trade commissioners from the region, when travelling from St. John's, Newfoundland to Vancouver, B.C. had excellent response from the business community in every province.
The reason that Taiwan was not discussed specifically at the conference is that, as the hon. member knows, Canada does not officially recognize Taiwan. However, there were businessmen there who do have commercial interests with the Taiwan business people and their discussions were not restricted at the conference.


GOVERNMENT POLICY RESPECTING TAIWAN
Lloyd Roseville Crouse: Madam Speaker, 1 wish to direct my supplementary question to the Right Hon. Prime Minister. Since Japan's Toyota motors is currently planning to build a 100,000 unit per year car factory in Taiwan, while supplying mainland China with vehicles, and large U.S. multinationals, such as General Motors, Citibank and Chase-Manhattan Bank, are pursuing their own deals with Peking despite an already sizeable commitment in Taiwan, my question to the Prime Minister is whether the Canadian government is considering revamping its policy toward Taiwan, since it is obviously out of date as Peking has made it clear
Oral Questions
that it does not object to foreign companies doing business with Taiwan?


Pierre Elliott Trudeau: Madam Speaker, I did not understand anything said by the Minister of State for Trade to contradict that. Canadian businessmen are free to establish themselves and do business with Taiwan. 1 believe these are the words the minister used, and that is government policy. The fact that there are no Canadian businessmen building motor plants in Taiwan does not prove that there is anything wrong with our policy. There are no Canadian businessmen building motor plants in Saudi Arabia either. There are many occasions for Canadian businessmen to establish themselves in many countries. The fact that they cannot be everywhere does not reflect on government policy.


AGRICULTURE
Mr. Vic Althouse (Humboldt-Lake Centre):: Madam Speaker, my question is directed to the Minister of Agriculture. Yesterday the House learned that small business bankruptcies were up about 20 per cent over the previous year. By comparison, farm bankruptcies this year are up 82 per cent over last year, which is clear evidence of the damage being done by the high interest rate policy of both this government and the previous government. It has been calculated that the recent increases in rates will add between $300 million and $500 million to farm costs in 1981. Since this has a devastating effect on food prices as the cost of credit must eventually be returned to farmers, processors and retailers, what is the minister planning to do for the farm sector to keep farmers in business and to keep consumer costs down?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, 1 am sure the hon. member knows that you cannot isolate the farming community from the same economic factors that the other part of our business community deals with every day. I would rather see the agricultural community able to stand on its own two feet, economically speaking. The hon. member uses figures. There has never been a time when the agricultural community, over all, has been better off, regardless of what the hon. member says. He has referred to interest rates. The rate of interest of the Farm Credit Corporation is still 12.75 per cent, an enviable interest rate for any part of our society at present. Even in the hon. member's own province, the provincial loan program subsidizes interest rates for agriculture. The same is true in Alberta, Quebec and Nova Scotia. They even subsidize our farm credit lending rates at times so that for those farmers who are involved in supply-management types of systems, which we have worked with them to develop, the interest rate is covered in their cost-price formula. They can still supply food to Canadian consumers in a fashion that is more reasonable than in any other place in the world that I can think of.

December 12, 1980
Oral Questions


Victor Fredrich (Vic) Althouse: 1 think the minister's answer indicates part of the reason why the number of bankruptcies is higher than in other business sectors. In spite of the subsidized rates which are available, it appears that not enough is being done for agriculture and for farm producers. The amount of debt being carried by farmers is estimated by the minister's department to be over $20 billion this year. So it is strange that an industry in such great shape keeps incurring greater and greater debts.
In view of the fact that farmers would welcome more dollars from the Farm Credit Corporation which, as the minister said, is money borrowed at the government bond rate, can the minister explain why FCC has actually reduced the amount of funding available in 1980 over the previous year, especially in light of the fact that it was the Liberal party which promised, in the most recent election campaign, that it would increase the funding to the Farm Credit Corporation?


Eugene Whelan: Again the hon. member uses impressive figures, but he does not go further to say that the vast amount of the money which farmers have borrowed is below the 10 per cent interest rate on long-term loans. A tremendous amount of the borrowings is at that rate. The reason we do not have as much money to re-lend is that the Farm Credit Corporation uses a program whereby as payments come in as farmers pay off their mortgage before it is due the corporation recycles that money. But this is not being done because farmers can get mortgage rates at 7 per cent or 8 per cent, so instead of paying off their mortgages, even if they have only three or four years to go, they reinvest the money in trust companies, credit unions, etc., making 12 per cent to 14 per cent on the money instead of paying back the corporation as some others were doing until last year.
However, if the hon. member has any amazing suggestions to make other than criticism, let him bring them forward. He has made no constructive suggestions even when we were discussing the estimates of my department the other day. He said we have created no new programs. Let me tell him that we have created 12 new programs for farmers in the Department of Agriculture and, as I said, we still have one of the healthiest agricultural industries in the whole world.


Some hon. Members:: Hear, hear!


CANADIAN NATIONAL RAILWAYS
Mr. Eymard Corbin (Madawaska-Victoria):: Madam
Speaker, my question is directed to the Minister of Transport and I shall put it in English.

Since the Minister of Transport is well aware of Canadian National's decision to cease its express services in many medium-sized Canadian communities, including Edmundston, New Brunswick, can he inform us today if that decision will be
revised, revoked, reviewed, retrorsed, retracted or otherwise retired? If not, will the minister order an inquiry into the mess, above and beyond a parliamentary committee examination, with special attention being given to the cosy sweetheart deal between the union leaders and CN Express over pension arrangements?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I have already stated my position with respect to CN express action, the effort it is now making to retrench away from small parcels. I have already stated what CN intends to do with respect to its employees, and I will not repeat it. It also intends to maintain a good relationship with the communities. This is more difficult than the relocation or pre-pensioning of employees. Discussions are ongoing with communities in Nova Scotia, New Brunswick and Prince Edward Island. It is my understanding that CN Express will try to see what accommodation can be reached in a very difficult situation. In the meantime, CN Express is not going to abandon communities in which it has fulfilled roles that no one else can fulfil.


AGRICULTURE
Hon. Roch La Salle (Joliette):: Madam Speaker, my question is directed to the Minister of Agriculture. Yesterday I had the opportunity of advising his parliamentary secretary of a telegram from the Quebec Potato Growers Association asking the minister to recommend to the Agricultural Stabilization Board that a survey be made on the income of Quebec potato growers in 1979-80. Can the minister tell the House today whether or not he will indeed make that recommendation to the board and when he can report to us on whether Quebec potato growers can benefit from the advantages offered by that board?


Eugene Whelan: Madam Speaker, I can tell the hon. member that several members on this side of the House from la belle province as well as from the provinces of New Brunswick and Nova Scotia have made similar representations. We are now receiving representation from the producers, and I have authorization from the government to go ahead with the stabilization program for the potato crop of 1979-80.


Roch La Salle: Madam Speaker, the minister advises me that several government members made representations to that effect, but the Quebec potato growers sent me a telegram precisely because they have as yet received no answer to their representations. Under those circumstances, with a view to
December 12, 1980

replying to a serious telegram, I must ask the minister again when he can give us an answer because it seems the producers need a reply on whether or not they will get financial assistance with regard to their 1979-80 crop whose proceeds are inadequate.


Eugene Whelan: Madam Speaker, the potato growers in eastern regions who have suffered because of low prices should receive some information before too many days or weeks go by. I believe the payment per hundredweight is being tabulated now, but I do not have the figures with me because I do not think they are finalized at the present time. It all depends upon what percentage we use, whether 90 per cent of the average of the last five years using current input costs, or 100 per cent of the average of the last five years using current input costs. That has yet to be decided.


POINTS OF ORDER
John Edward Broadbent: Madam Speaker, I rise on a point of order pertaining to an exchange which I had with the Prime Minister (Mr. Trudeau) earlier in reference to quotations from the last election campaign. The Prime Minister is correct that I first raised the issue last Friday in reference to the Toronto Star. In the February 11, 1980, edition of the Toronto Star, the Prime Minister was reported as saying:
I would want to manage the economy in such a way that interest rates would in fact come down-
Two days later they rose by 2.5 points.


Marc Lalonde: They have gone down.


John Edward Broadbent: I point out to the Minister of Energy, Mines and Resources (Mr. Lalonde) that they have not come down. Two days later, just to indicate that it was not a slip, as reported in the February 13, 1980, edition of The Globe and Mail, the Prime Minister was quoted as saying:
-we would keep interest rates down and we would make sure that they go lower by controlling inflation.


Pierre Elliott Trudeau: Madam Speaker, I accept the quotations of the hon. member. I think that the thrust of the interview-and, of course, I will dig it out-was that there was no direct way in which we could promise low interest rates, but we could take various measures such as having lower energy prices and a sound budgetary policy which would work toward lowering interest rates. In fact we had lower interest rates following that election, as the hon. member will recall. The situation since then on the international sphere has developed, as the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) indicated, where there is a very strong upward pressure on interest rates
Point of Order-Mr. Clark
which has nothing to do with our management of the economy-


John Carnell Crosbie: Don't be foolish.


Pierre Elliott Trudeau: - but with events developing in other parts of the world.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: So, I think the hon. member has established what I said, that we did not promise lower interest rates.


John Carnell Crosbie: Why don't you read the report of the Economic Council of Canada?


Pierre Elliott Trudeau: We promised to manage the economy in a manner which would tend to lower the pressure on interest rates. In fact, as the Minister of Finance indicated, we have managed in that way-


An hon. Member:: Herb Gray promised to resign.


Pierre Elliott Trudeau: [DOT]-and the proof is that the interest rates in Canada are substantially lower than those of our major trading partner.
[ Translation]


Madam Speaker:: I cannot see how that intervention can possibly be interpreted as a point of order. In any event, there has been an exchange between the Prime Minister (Mr. Trudeau) and the hon. member for Oshawa (Mr. Broadbent) which, I imagine, further enlightened the citizens of Canada.


MR. CLARK-ALL-PARTY AGREEMENT ON EXPRESSION OF CONDOLENCE TO FAMILY OF THE LATE JOHN LENNON
Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, I rise on a new point of order. During oral questions the Right Hon. Prime Minister (Mr. Trudeau) referred to seeking the agreement of the House of Commons to express its condolence and sadness to the family of the late John Lennon. Our party was consulted on this matter earlier this week by the hon. member for Regina East (Mr. de Jong), and we agreed to support such a motion.
I simply want to indicate now that our House leader would be most pleased to meet with his counterparts to arrange a suitable expression of the sadness of the entire House of Commons at the sudden death and passing of a great and creative world artist.


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, under the circumstances, I would like to be allowed to move the same motion which has already been put and with the unanimous consent of the House I take it for granted that the motion will be presented by the Chair and passed by the House.
5712

December 12, 1980
Committee Report


Madam Speaker:: I suppose the minister is referring to the motion introduced by the hon. member for Regina East (Mr. de Jong) and which had not received the unanimous consent of the House. The motion is therefore as follows:
That this House pay tribute to the outstanding cultural contribution of John Lennon and express its condolences to his wife Yoko Ono and his family and friends.
I must again ask the House whether it gives unanimous consent to the motion of the hon. member for Regina East. Is there unanimous consent?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Pat Carney: Madam Speaker, I rise on a point of order regarding a statement made about myself in the House, when I was in my riding. On December 1, the hon. member for Vancouver-Kingsway (Mr. Waddell) rose on a question of privilege and quoted from an article which appeared in the Ottawa Citizen on October 11, 1980. As reported in Hansard at page 5195, the member quoted the article as follows:
A few members of Clark's B.C. caucus have come dangerously close to endorsing separatism . . . Vancouver Centre MP Pat Carney has expressed similar sentiments in the House of Commons, despite pleas from some Tories that she hold her tongue.
My dispute is not with the hon. member for Vancouver-Kingsway, as he was quoting a newspaper article. The newspaper article regarding myself is in error, as I have never expressed separatism sentiments in the House and no members of my party have ever cautioned me on this topic or any other.
1 should like to establish for the record the inaccuracy of this statement and the inaccuracies it contains.


Madam Speaker:: Since the hon. member for Vancouver Centre (Miss Carney) was not in the House at the time when this discussion took place, nor at the time when I ruled on it, she is entitled to make these comments for the record.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

[Stage Direction]
Second report of Special Committee on North-South Relations-Mr. Breau.
[Editor's Note: For text of the above report, see today's Votes and Proceedings.]

Mr. Geoff Scott (Hamilton-Wentworth) moved: for leave to introduce Bill C-622, to establish the Hazardous Products Recall Act.


Some hon. Members:: Explain.


Geoffrey Douglas Scott: Madam Speaker, the purpose of my private member's bill is to introduce formally the possibility of a hazardous products recall act. It is my view that we in Canada should have legislation in place which would empower the government to require manufacturers and retailers to remove from their shelves and their showrooms products which are demonstrably dangerous to the consumer. 1 feel consumers must have protection from obvious hazardous products, be they Corningware coffee pots with handles which come unglued, Pintos with rear gas tanks which explode on impact or, the latest example, Cuisinart food processors where the machine can switch on automatically when the high speed cutting blades are exposed.
It is my view that the Canadian government, in the interests of the fundamental protection of the consumer, should seriously consider a limited form of legislation, but one with teeth, to remove products which even manufacturers occasionally openly admit can be potentially dangerous to the health and lives of Canadians.


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

[ Translation]

Mr. Herb Breau (Gloucester) moved: that the second report of the Special Committee on North-South Relations, presented this day to the House, be concurred in.


Madam Speaker:: The House has heard the terms of the motion, is it the pleasure of the House to adopt the said motion?


Walter David Baker: Madam Speaker, there were discussions with respect to this. I think all parties in the House are anxious to see these select committees of Parliament work. The request is a reasonable one. It was unanimously concurred in.


Stanley Howard Knowles: That is also our position.
December 12, 1980

[ Translation]


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 1,528, 1,664, 1,671 and 1,701.


Mr. Mazankowski: 1.	Does the Minister of Transport intend to take action to resolve the discrepancies in sea freight subsidies between Montreal and Newfoundland and, if so, in what way?
2.	Does the minister intend to raise subsidies, make subsidies generally available or eliminate them altogether?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: 1. Yes, the minister has asked that the matter of a direct shipping subsidy on the freight service between Montreal and Newfoundland be examined and discussed within the federal-provincial committee established to review transportation expenditures in Newfoundland.
2. Any adjustments to this subsidy will depend upon this review and discussion.


Mr. Herbert: In each of the past five years and for the current year to the end of September, how many tourists entered (a) Quebec (b) Ontario from (i) the United States (ii) other countries and what percentage of all tourists are believed to have spent the most of their stay in the two provinces?


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of State, Small Businesses):: In so far as the Department of Industry, Trade and Commerce is concerned: Following are the number of visitors to Ontario and Quebec from the U.S. and overseas for the year 1976 to August, 1980 (September figures not available). Included is the percentage of all visitors to Canada who stayed in the two provinces. The numbers are for overnight visitors only.
	Number	Percentage
1976	of visits	of visitsTotal visitors to Canada	13,017,000	100Total visitors from U.S.	11,658,000	89.6Total visitors from other countries	1,359,000	10.4Visitors to Ontario	7,694,000	59.1Visitors to Quebec	2,890,000	22.1
Order Paper Questions
	Number	Percentage
1977	of visits	of visitsTotal visitors to Canada	12,673,000	100Total visitors from U.S.	11,451,000	90.4Total visitors from other countries	1,222,000	9.6Visitors to Ontario	7,637,000	60.3Visitors to Quebec	2,661,000	21.01978	Total visitors to Canada	12,689,000	100Total visitors from U.S.	11,277,000	88.9Total visitors from other countries	1,412,000	11.1Visitors to Ontario	7,472,000	58.9Visitors to Quebec	2,744,000	21.61979	Total visitors to Canada	12,979,000	100Total visitors from U.S.	11,273,000	86.9Total visitors from other countries	1,706,000	13.1Visitors to Ontario	7,693,000	59.3Visitors to Quebec	1,787,000	13.8January to August 1980	Total visitors to Canada	9,902,000	100Total visitors from U.S.	8,527,000	86.1Total visitors from other countries	1,375,000	13.9Visitors to Ontario	5,888,000	59.5Visitors to Quebec	1,337,000	13.5


Mr. McKinnon: Has the Department of National Defence placed a $33,700 contract with the Phactory Phresh Phytness Corp. for writing and editing services and, if so, for what purpose?


Hon.   J.-J. Blais@Minister of Supply and Services: No.
The contract referred to by the honourable member was awarded by the Department of Supply and Services on behalf of Fitness and Amateur Sport. Its purpose was to develop, write and assist in the preparation of the "Phacts of Life" project materials, and to provide writing and editorial consultation to Fitness Canada.


Mr. Herbert: Between the age of 65 to 70 years, by year of age, how many persons are working full time?


Hon.   J.-J. Blais@Minister of Supply and Services: Statistics Canada reports: According to Statistics Canada estimates, based on the Labour Force Survey of October, 1980:
Age Number of persons employed full time
65	27,000
66	19,000
67	17,000
68	14,000
69	10,000
70	11,000


David Michael Collenette: I ask that the remaining questions be allowed to stand.

December 12, 1980
International Conventions
[ Translation]


Madam Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered. Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS

[Stage Direction]
[Translation)

Hon. Pierre Bussieres (for the Minister of Finance) moved: that Bill S-2, to implement conventions between Canada and Spain, Canada and the Republic of Liberia, Canada and the Republic of Austria, Canada and Italy, Canada and the Republic of Korea, Canada and the Socialist Republic of Roumania and Canada and the Republic of Indonesia and agreements between Canada and Malaysia, Canada and Jamaica and Canada and Barbados and a convention between Canada and the United Kingdom of Great Britain and Northern Ireland for the avoidance of double taxation with respect to income tax, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, be concurred in.


[Stage Direction]
Motion agreed to.
Pierre Bussières: that Bill S-2 be read the third time and do pass.


Bob Rae: Madam Speaker, I would like to thank my colleagues for letting me for once speak first on third reading.


Stanley Howard Knowles: It gives you unlimited time.


Bob Rae: I have unlimited time, Madam Speaker, but I can assure you that I do not intend to use it on this occasion. Unfortunately, one only gets the chance to use unlimited time on those occasions when one does not want to use it.
However, I want to indicate to the minister and to the House some of our concerns with respect to these particular treaties and the process which the government is engaged in at the present time. Perhaps as an introduction I can say to the minister that we on this side are concerned about other treaties which we feel should be given equal status and equal importance by the government with respect to relations between Canada and other countries. I am thinking, in particular, of the lack of pension and social security agreements with a number of countries. This causes us a great deal of concern. I know the government has entered into an agreement with the
government of Italy. I know that this reciprocal social security arrangement is one which works to the advantage of Italians who have come to Canada, and it works to the advantage of Canadian citizens who have returned to their native country.
1 can repeat to the minister and the government that it is a subject which gives us tremendous concern. It causes great hardship to Canadian citizens and to landed immigrants from many other countries. 1 know from discussions 1 have had with ministers of the government of Greece, when I was in Greece in September, that the question of a social security treaty between the government of Greece and the Government of Canada is a matter of great importance to the government of Greece. It has taken them some effort to finally get the Government of Canada to recognize that this is a legitimate claim. I add that if it is a legitimate claim for the government of Greece then it is of legitimate concern for the government of the United Kingdom and many other countries where travel between us is such a way of life. It is so important, particularly for senior citizens who are coming to Canada to join their families, to transfer their payments readily and to receive the same kind of security and the same type of dignity which we want extended to all our citizens. Concerns and hardships are created by many people having to wait ten years in Canada until, in many cases, they reach the age of 75 or even 80 before they are eligible for a Canadian pension. This is a concern which causes a great deal of hardship to senior citizens who were not born in Canada.
I say to the minister that this is a subject which we regard with the same importance as the signing of tax treaties. I am well aware that the pressure to sign tax treaties comes, as it does, from our largest multinational corporations and it is one that the Liberal government is so ready to listen to. Those louder voices receive greater priority at the cabinet table than the voices on behalf of pensions and social security.
As 1 have said in private conversations, in correspondence with the Minister of National Health and Welfare (Miss Begin), on many occasions in question period, and through a motion under Standing Order 43, we regard the signing of social security treaties as a matter of great importance and, indeed, of greater immediate urgency than some of the tax treaties which have been put before us. Bill S-2 contains a number of treaties with a number of countries-Austria, Barbados, Indonesia, Italy, Jamaica, Malaysia, Roumania, South Korea, Spain, and the United Kingdom.
The alleged purpose of these tax treaties is to avoid double taxation and to ensure that companies and private individuals-although we are dealing here mainly with corporate taxation-who have business arrangements in these countries will not be taxed twice for the same income, that is, they will not be taxed once in the foreign country and once in Canada. If that were the only question raised by these treaties, one could hardly object to them, but unfortunately the problem of tax treaties, international corporate taxes, and the avoidance
December 12, 1980

of these taxes is a subject which is a little more complex than these treaties would lead one to believe.
The one-dimensional presentation which is frequently given to this type of legislation is, "It is good for the corporation and it is good for Canada, and what is good for the corporation is good for Canada, and what is good for the corporation and good for Canada is good for the world." This is the sort of argument that has been put forward.
I would like to raise some questions concerning the impact of these treaties. Some of the answers which we received in committee, where we spent some time considering these matters-and I am glad that we spent that time because I am sure we were all educated to some extent by the hon. member for Willowdale (Mr. Peterson), the hon. member for York-Peel (Mr. Stevens), the minister and the officials in the minister's department-did not satisfactorily deal with the main problem. The two aspects which I would like the minister to consider will have a long-term impact.
Many of the countries with which we have signed treaties are countries with which we are in direct competition. We are in direct competition with these countries in a double sense. In many of these countries manufacturing is beginning to take off and, as a result, has become an important source of competition to Canadian manufacturers. For example, in South Korea many North American companies are now establishing branch plant operations because of the fact this is more profitable to them. Of course, these companies are now in direct competition with companies in Canada. This should be a source of concern.
Another source of concern is the fact that many of these countries are countries with which we directly compete in resources. I am thinking in particular of the government of Indonesia, and in some ways of the government of Liberia, which the government has agreed to drop from the list of treaties. But if one looks, for example, at a global corporation like Inco and considers its relationship to Canada, and the fact that it is now engaged in extensive activity in Indonesia, one must recognize that these global corporations are able to play off countries such as Canada and Indonesia and compare the relative tax rates in each country and the fact that we have now entered into tax treaties with these countries. This allows these corporations to deduct from Canadian taxes any taxes payable in Indonesia and, furthermore, it allows them to deduct taxes which are deemed payable. That is the central problem with which we must deal.
As was pointed out very clearly in committee, what has happened with respect to these treaties is that a number of countries, and Canada is among them in terms of some of the tax write-offs which we have allowed here, have very generous tax arrangements with respect to foreign investment. The treaties allow not only deduction of the tax which has actually been paid in foreign countries from Canadian taxation-in other words, it is a form of tax credit for taxes payable in Canada-but it also provides that the tax which should have been paid, but was not paid because of a tax haven arrange-
International Conventions
ment, will have been deemed to have been paid for the purposes of Canadian taxation.
When a global corporation is allowed to play off governments such as the Government of Canada against the government of Indonesia, or the Government of Canada against the government of South Korea with respect to, let us say, electronic investment, it raises some extremely important questions. They are not questions which say that international trade is good or that anything which makes it convenient is good, because the situation is a little more complex.
What we are looking at is the way in which a global corporation can so reduce its effective level and rate of tax in each home country as to be able in a sense to pass on those additional costs, for example, the revenue not paid to the Canadian government, to the average Canadian taxpayer. In committee I referred to several American studies which show that the foreign tax credit has worked to give exactly that effect. The foreign tax credit has effectively reduced the level of taxation which is paid by these global corporations.
A number of studies conducted in the United States have attempted to give an estimate of the precise amount of money lost as the result of these play-offs. When I posed the question in committee to a very able public servant about whether there had been any studies conducted in Canada to compare the effective rate of taxes in countries with which we are signing tax treaties and to determine whether the effective rate of taxation in Canada was reduced as a result of these tax treaties by these global corporations, this public servant, who was the chief witness before the committee, indicated that the Department of Finance did not have that information available and that, while he would like to do those kinds of studies and agreed they would be a good idea, there was no data available with which to conduct such studies. If this is the case, I suggest that we are entering into a number of tax treaties in response to pressure from certain groups and corporations and, indeed, certain governments.
1 recognize that there are a number of developing countries which would desperately want this kind of investment, but I believe that we, as Canadians, must be a little bit concerned.


Mr. Peterson:: Oh, no.


Bob Rae: I will come to the expressed views of the hon. member for Willowdale, which he is expounding in his usual constructive way in a moment. We must be concerned in Canada about the effective level of corporate taxation because we need to know how the reduction of the over-all taxes paid by a corporation affects the taxes that are paid by everybody else. The hon. member for Willowdale has said that these countries need investment.
We cannot be imperialistic, and we cannot impose our standards on other countries. The government also has to consider the question of equity among Canadians. All governments in the world have to find a way that goes well beyond these tax treaties of dealing with the power and ability of multinational corporations to make their decisions on the basis of the best tax arrangements possible, and of getting govern-

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ments to sign tax treaties which work entirely to their advantage.
One could give any number of examples of this. 1 mentioned Inco. An example which is frequently brought up in committee is that of the Moore Corporation which produces business forms and office equipment. It is the twenty-first largest corporation, by sales, in Canada, has over 28,000 employees, and operates 132 manufacturing facilities in 37 countries. It has subsidiaries in three countries with which we have signed tax treaties, Jamaica, Barbados, and Malaysia. Its 1979 annual report shows that its effective level of taxation is now at a ten-year low. The government must ask itself whether it is in the interest of Canadians to allow this level to continue to decrease. There are other questions as well, such as where some of the Moore Corporation subsidiaries are located.
It seems to me that we have to deal with this whole matter in a way that is not destructive and that does not decree there shall be no international trade or treaties with other countries. We must analyse and understand the impact of these treaties on Canadian jobs and taxation, however.
The hon. member for York-Peel brought up the fact that one of the main companies in Barbados is now the Cooper Corporation, which produces hockey equipment. We are now entering into a tax treaty with Barbados, a country which has particularly generous tax arrangements respecting foreign investment. This generosity will encourage Cooper Corporation to expand its activities there, so we must ask if that means it will not expand its activities in Canada.
I do not raise these questions because I think there are easy answers to them, but because I do not think they can be brushed aside. I do not think it is enough to engage in this kind of international "boosterism" and claim that anything that encourages global corporate trade is good and anything that encourages corporate investment in Third World countries is also a good thing.
To put it another way, I do not think that allowing corporations to play off workers in Canada against workers in Barbados, to play off the Government of Canada against the government of Barbados, the Government of Canada against the government of Spain, or the government of Ontario against the government of Quebec, is very healthy. Unfortunately, however, that is the world we live in. That is why we have these tax treaties, but let us not be under any illusion about the forces to which we are responding.
The other main principle contained in these tax treaties is that they will allow Canadian corporations that invest abroad to bring back dividends-to bring back payments to Canada on which they will not have to pay tax. This is what is called the "exempt surplus". With regard to this payment of dividends, the tax treaties effectively do two things. First of all, they reduce the withholding tax paid to the other country on the dividends leaving that country. For example, when Cooper wants to pull out some dividends from Barbados or Inco wants to pull out some dividends from Indonesia, the governments of
Barbados and Indonesia will deduct less withholding tax. That does not work to their advantage, of course, and as far as I can tell there will not be much investment by Barbados or Indonesia in Canada. It is something that works to the advantage of Canadian-based corporations.
The other thing is that it allows these corporations to bring back all this surplus to Canada without tax. I know the arguments that were made so well in committee by the hon. member for Willowdale, who was defending these treaties. He pointed out to the committee what a good thing they are for the international economy, for Canada, and for the corporations concerned. But, Mr. Speaker, the equity problem raised by allowing large sums of what is in effect income to be returned to Canada, on which Canadian corporations will pay no tax, must also be considered.
I know it is claimed that if those dividends are given back to individual Canadian citizens in the form of dividends, then there is a dividend tax credit, a mark-up, and so on. There is an element of taxation there, of course. I would point out to the hon. member, however, that we all know that the dividend tax credit is now generally regarded by people who have studied it as giving an unfair advantage to dividend holders as opposed to average taxpayers. It is not a particularly equitable tax.
The real problem is that from the standpoint of equity between Canadian taxpayers, money that is income and is not being taxed at the corporate level, on which the government receives no revenue, has the unfortunate effect of increasing the load of taxation on the average citizen.
In conclusion, Mr. Speaker, I must say that the government has, in a sense, got its priorities wrong. I am glad the Minister of National Health and Welfare is in the House. I will not repeat my entire opening remarks, but I should like to indicate to her that this party encourages the efforts which she and her department are making with respect to social security treaties with other countries. They are of great concern to us and we would like to see them given a priority as high as those tax treaties that work to the advantage of corporations. I know she has made some progress and that negotiations are under way. We follow those negotiations with interest, and support the efforts to have the treaties signed as quickly as possible.


Monique Bégin: Mr. Speaker, I rise on a point of order, since my name was invoked in these financial discussions. On Monday in Toronto we will sign another treaty of reciprocity of all social programs with Portugal.


Some hon. Members:: Hear, hear!


Bob Rae: Mr. Speaker, I say bravo to the minister. I began my speech by indicating that this was a subject of great concern.


James Scott (Jim) Peterson: It was because of your intervention that she did it!


Bob Rae: Mr. Speaker, not even I would go so far as to claim that. I would say to the minister, however, that these
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treaties with countries with which we have such close relationships, and so much travel, and whose people come to live in Canada, are of great concern to all members of this party. 1 congratulate the minister on her success and look forward to further efforts with respect to other countries with which we have these agreements. They should be given the highest priority. I was not aware of the signing of the treaty on Monday, perhaps because I was not invited to it. I am sure that is something that can be arranged, however.


Mr. Blais:: Send your pin.


Bob Rae: I was invited to the other one, and that is why 1 was not aware of this one.
In conclusion, Mr. Speaker, it seems to me that the government is entering into these tax treaties without being fully aware of the impact they will have on domestic taxation in Canada, and without being fully aware of the equity problems created by allowing corporations to play one country off against another. There have been a number of American studies which indicate the way in which this has been done and which show the impact the global corporation is having on the domestic American market. It seems to me that we desperately need to have those same kinds of studies done here in Canada. Simply to engage in the signing of tax treaties without being aware of the domestic impact is engaging in what I call a kind of economic boosterism which says that a treaty is good because it aids trade, and it is good if it helps the corporation, and if it helps the corporation it helps a Third World country, and if it helps a Third World country it helps us, and so on. It is slightly one dimensional. It does not deal with a number of problems which are created by our engaging in treaties in this way.
[ Translation]


Pierre Bussières: Mr. Speaker, at the outset of my remarks I would like to comment briefly on the conclusion drawn by the member for Broadview-Greenwood (Mr. Rae). It is quite obvious that although these conventions are aimed at avoiding double taxation they will certainly contribute to complicate still more the taxation jungle which is already inextricable at times. Still I hardly think that such difficulties should prevent us from using that tool which benefits all Canadians, while keeping in mind the appeal made by the hon. member in committee and repeated here to the effect that the government should undertake a serious consideration of the consequences of such conventions on Canadian taxation, on Canadian business and on employment in Canada.
Mr. Speaker, we are now resuming discussion on third reading of Bill S-2 to implement conventions whose purpose is to avoid double taxation, a treaty which we have signed with several countries. It rests with Parliament to legalize those agreements between Canada and about ten other countries which had agreed or requested to negotiate such conventions.
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Some might wonder what is the purpose of these treaties and why we have to sign conventions to avoid double taxation.
I believe we should perhaps begin by describing the phenomenon of double taxation. This phenomenon of legal double taxation at the international level can be defined generally as resulting from the collection of a comparable tax in two or more states, from the same taxpayer, on the same taxable item and for the same time period. The unfavourable effects of such a phenomenon on the development of goods and services, exchanges and the movement of capital and individuals are well known, too much so for me to have to underline the importance of eliminating the obstacles laid by double taxation to the development of economic and commercial relationships between countries.
It is vital that bilateral agreements between countries clarify, unify and guarantee as much as possible the taxation position of taxpayers in countries where residents have commercial, industrial or financial activities in several countries. In signing these agreements, the Canadian government has tried to make this clarification and establish these solid and unified foundations, and the House is now called upon to ratify these conventions.
I have just described the general advantages of these treaties. I would now like to say a few words about the special benefits of such agreements for Canada. Many Canadian individuals and corporations do business in other countries and have to compete in these countries with companies from other countries. For instance, a Canadian subsidiary can do business in Austria in competition with a French, German or Italian company. If Austria has a double taxation avoidance treaty with France but not with Canada, the Canadian company will be badly off compared with its French competitor. This is an important aspect of these agreements to avoid double taxation, in the sense that they allow Canadians to compete on an equal footing with other countries which do business abroad.

Most other developed countries have a substantial network of tax treaties which often provide for substantial reductions in the rates of withholding tax, and which establish conditions under which taxes would be levied. For a Canadian entrepreneur to be able to win foreign contracts, he has to make a bid which is as low as the foreign competitors' and the taxes he would have to pay could be an important element. That is why Canada has sought to obtain as good a deal in its tax treaties with other countries as foreign competitors, and no more.
[ Translation]
It will be noted that some conventions are the result of first time negotiations while others are the product of renegotiated treaties. It must be understood, Mr. Speaker, that these treaties cover fiscal or tax systems applicable in the countries that are party to the treaty or convention. Hon. members will remember that in 1972 Canada undertook a major review of its income tax legislation which, by way of consequence,

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required also the review and often the renegotiation of certain existing conventions.
It has been mentioned in committee that such double taxation agreements could become loopholes and a pretext to tax evasion. The hon. member for Broadview-Greenwood has indeed raised that possibility a few moments ago. I want to make it abundantly clear that it is not in a particular convention that tax loopholes or tax evasion potential are to be found when a commercial or financial institution covered by the convention is guilty of such tax evasion. The faults or weaknesses that make such evasion possible are most often found in the Income Tax Act and it is therefore this act that should be corrected. It has been clearly demonstrated in Canada that our Income Tax Act is impervious to these conventions.
Mr. Speaker, in closing I should like to indicate that consideration of the bill in committee led the government to cut out temporarily the convention with one country. When the bill was referred to committee, it contained 11 conventions which have now been reduced to 10. In view of the objections expressed in committee and the urgency of getting the House to pass the bill giving effect to those conventions, the government agreed to withdraw temporarily the convention with Liberia. During that time, the government will look at the text of the convention very carefully again, and discuss it once more with the other party to it, and if need be, will reintroduce it when a new bill is brought in to implement other conventions for the avoidance of double taxation.
1 want hon. members of the House to know that the Liberian government expresses disappointment about this turn of events. It has reiterated its wish and will to see this bilateral convention ratified as soon as possible. The Canadian government is also of the opinion that it is justified but it wants to make sure that the details of the convention meet the requirements of the Canadian people and their parliamentarians. Mr. Speaker, it is in that spirit that we worked in committee. I should like to take this opportunity to thank the members of the committee for their excellent performance on the occasion of the study of this bill in committee and thank all hon. members in the House for allowing us to pass it this afternoon.


John Carnell Crosbie: Mr. Speaker, this piece of legislation is not greatly contentious. It is not one we are going to vote against. In addition, the minister was quite reasonable and very co-operative, in his usual way. The Minister of State for Finance (Mr. Bussieres) is co-operative and diligent. I cannot say the same of the Minister of Finance (Mr. MacEachen). I do not want to imply that the Minister of Finance is not diligent. I am just not going to say that about him. The assistant minister of finance has been quite diligent and co-operative in committee.
My colleague, the hon. member for York-Peel (Mr. Stevens) is not here today and neither is the hon. member for Mississauga, both of whom have been active in this matter. The minister has agreed to delete the treaty with regard to Liberia because of some of their concerns. We appreciate that kind of treatment. That is why we are not going to speak on this bill longer than several days, or at least until this afternoon.
There are other important tax treaties. Perhaps whoever closes the debate on the government side can bring us up to date. These are not unimportant, of course-the United Kingdom, Jamaica, Barbados and the like. Jamaica, by the way, is an interesting one. Since this discussion started there has been a change of prime ministers in Jamaica. There has been some suggestion that we have the last prime minister, Mr. Manley, come to Canada for a scholarship or something like that from some government agency. That will be gone into at another time.
There are some very important treaties negotiated with countries like that, as well as Indonesia and Spain. The one in particular I would like to hear about, from some authority on the other side, is the treaty recently negotiated with the United States. That great coup was finally achieved while 1 was still a minister, although under heavy pressure during the election campaign last January. That is quite an important treaty, particularly with reference to its effect on the transfer of income from the oil and gas industry to the United States and the effect of taxes on profits in that connection. 1 presume that is now all signed and concluded and the government will be bringing it forward in short order.
Since this is a treaty to deal with international taxation and the effects on Canada, and taxation in other countries and citizens from other countries, we are dealing here with international finance. I want to spend three or four minutes on an aspect in international finance which the Minister of Finance referred to today. Today in his remarks in the House the minister suggested, with respect to interest rates, which is a matter of international finance, that these questions were not within the power or capacity of the Government of Canada to deal with. He said this government was handcuffed, totally under the control of economic conditions and what happens to interest rates in the United States. He said in this respect Canada is completely powerless, it does not matter what government we have, what will or desire that government has, or what policy it introduces. He said he can do nought about interest rates in Canada, that they must simply follow those in the United States.
Let me point out to the House that the day before yesterday the minister made an exactly contrary point in the House. He said that Canada has little control over interest rates, but thanks to steps taken by the Governor of the Bank of Canada, Canadian rates are not locked to U.S. rates. He praised the government's policy. He said it was successful. He stated that interest rates in Canada are 3 per cent or 4 per cent less than in the United States.
That was the minister's story two days ago. He then looked around in his usual humble way for a kind word or glance from members over here because he had kept interest rates 3 per cent or 4 per cent lower than in the United States. Today
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he got up in the House and said he had no control over interest rates, that he cannot do anything, that he is powerless that they went up yesterday 1.38 per cent. He said he could do nothing about it.
The minister cannot be right on both occasions. We know that he has tremendous flexibility. He is the most flexible of the Liberals. To be the most flexible of the Liberals is the same as being a boa constrictor greased with vaseline. You are really flexible if you are the most flexible of the Liberals. He cannot have it both ways. If the government can keep Canadian interest rates lower than U.S. interest rates, obviously it could have acted yesterday to keep rates from going up, if that were the policy the government wanted to adopt. There is free will in this area.
What prevents Canada from having the rational possibility of many other choices is the lack of policies of the government over the last 12 years. That is what makes it difficult. There are alternatives, but they do not include wage and price controls. Our flexible Minister of Finance cannot stand up in the House one day, say how, through his efforts and those of Mr. Bouey, our rates are being kept behind U.S. interest rates by 3 per cent and then, a day later, look across the House and ask for sympathy. He will get no sympathy from us. A year ago he acted to get himself back into power. Now that he is there, he does not know what to do. He looks around beseeching the House to grant him a dispensation of mercy.
The minister now wants us to ignore advice that he and the government's financial critic gave last year. Here is what the Minister of Industry, Trade and Commerce (Mr. Gray) said last year when he was finance critic. By the way, a portion of his leg is damaged. He is not with us any longer. He has been gone during these trying days. We hope he will get better soon and that the next time he breaks something, it is more important.
He said on March 10 last that he was pleased with the new floating rate approach to interest policy of the Bank of Canada. He was pleased with the new floating rate policy. What was he so pleased about? Is the Minister of Industry, Trade and Commerce still pleased today with the new floating rate approach? It is not a floating rate, it is a flooding rate. It is too bad he is not here to tell us that.
What happened to the Minister of Energy, Mines and Resources (Mr. Lalonde) who, on November 13 last year, page 1251 of Hansard, said the PC government seemed to have "adopted Mr. Volcher's economic Malthusianism approach in the United States". What approach is being adopted now? Mr. Volcher is still in charge of the Federal Reserve Bank in the United States.


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


John Carnell Crosbie: May I call it one o'clock?


The Acting Speaker (Mr. Ethier):: It being one o'clock the House stands adjourned until 2 p.m.
At one o'clock the House took recess.
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[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
The Acting Speaker (Mr. Ethier):: Order, please. When the House rose at one o'clock the hon. member for St. John's West (Mr. Crosbie) had the floor.


John Carnell Crosbie: Mr. Speaker, I want to conclude my remarks by giving a piece of advice to the Minister of Finance, and it is that he stop being the Uriah Heep of western finance ministers and that he stop getting up in this House, wringing his hands, alleging he has no power or control over Canadian interest rates, bank rates, the Canadian dollar, or Canadian economic policy generally. A year ago he tricked and connived his way back into power and it ill behooves him today to try to blame everything that is happening on United States policy. He has the authority in his hands. He can do it if he wants to exercise that authority. He needs to bring in a new budget and put behind him this cop-out which he brought in on October 28.
It is the worst budget since Herbert Hoover. It is the Boulder Dam of balderdash in the financial world. This document he brought in was dictated by the Minister of Energy, Mines and Resources, the sinister Svengali, the Rasputin of the government, who is controlling everything. I commend to the Minister of Finance his companion, the Minister of State for Finance. The Minister of Finance should take notice that the Prime Minister (Mr. Trudeau) is depending on that gentleman to answer all his questions for him in the economic area. If I were the Minister of Finance I would feel a cold shiver going up my spine at the sight of the Prime Minister so heavily dependent on the Minister of State for Finance. I think this augurs great things for the Minister of State for Finance, and the Minister of Finance might well watch his own back during the next few months.
We have an agreement here. We do not want to hold this up; it has been held up for something like ten years. Now the Liberians are being cast aside for another period of one or two years. I will sit down so my companion from Vancouver Quadra can bring to bear his share of intelligence on this bill.


Mr. Bill Clarke (Vancouver Quadra):: 1 want to thank my colleague, the hon. member for St. John's West (Mr. Crosbie), for that introductory remark. Mr. Speaker, my colleague is quite right about the length of time the debate has been going on. I suppose one of the reasons it takes so long to consider matters like this is that everybody thinks taxation is confusing, and it is, to a lot of people. When you get to a tax convention, that makes it all the more confusing.
Let us take a look at the history of conventions. The basic purpose of tax conventions was to eliminate the problem of double taxation for individuals who might live in one country and earn income in another. They might thereby become subject to regular taxation in the country where they earn
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their income, and then if they lived in a country like Canada where world income is taxed, they would be faced with another burden of income tax on those earnings. So the original conventions were designed simply with that in mind.
I do not even know how long ago it was, but it was many decades ago that we had our first convention. There are now, significantly, 24 conventions in force with various countries, and another 13 that have been signed but are not yet in force. A number of those are covered by Bill S-2. There are a further 31 which will be renegotiated. Each of these agreements or conventions has had to be renegotiated, revamped, or at least restudied in connection with the revision to the income tax law which took place here in Canada in 1971.
One of the requirements for other countries which will have a treaty with Canada is that they must have a similar taxation system. 1 will say a word about that later on when we look at the various countries with which we have treaties. We are having some problems with countries which may not have system taxation similar to ours, and it may be undesirable for Canada to have treaties with countries that are considered tax havens, yet I think I may show that Canada may be considered a tax haven in some areas.
The purpose of the present bill is, as I said, because of the 1971 tax review, to expand the policy and to have more tax treaties than we had in the past. This bill, of course, is quite similar to the one which was introduced by the previous government as Bill S-4, but which never passed the House. In addition to the nine countries in the other bill, we now have Barbados and the United Kingdom included. The treaties will limit the tax rate on income transfers between the countries, that is, the withholding tax, so that individuals and corporations will not have the burden of double taxation upon them. Significantly, I think, the treaties will also deal with methods of amending those treaties in the future so that, when there are changes within a country, the kind of exercise that we are going through here today will not necessarily be required.
It was expected, when we had our tax reform in 1971, that we could have all the new tax treaties in place by 1976. Well, we know now, four years later, that we still have 11 tax treaties to ratify in this bill and another 31 under negotiation. It has certainly taken a lot longer than was expected. We have already renegotiated treaties with France, Switzerland and Belgium. We are also considering Morocco. Liberia and Rou-mania are being dealt with. The United States, one of major trading partners, is missing from the list today, although we are now considering Great Britain, New Zealand and Austria.
In some of these agreements which are being negotiated, the one with Germany, for instance, Canada is actually on the receiving side from the point of view of being seen as a tax haven. Although in 1976 we did reach an agreement with West Germany, the West Germans had their tax reform in 1977 and our treaty was not ratified. There are a few problems still at the bargaining table.
The problem is that the Canadian tax system is seen by the Germans as offering unfair advantages to some German taxpayers. As an example, there is mortgage interest earned in
Canada by Germans. While it is subject to a 15 per cent withholding tax here in Canada, it is subject to no further tax in West Germany. Similar concessions are available on rental income from real estate. There is a tremendous amount of money being invested from West Germany in Canada in the way of exploration for minerals in Canada, because there is a particular advantage to German investors when they invest in mineral exploration in Canada. In fact, I suspect it is another one of the cases where foreigners are actually given a better tax treatment in Canada than are Canadians.
The old treaty with Germany allows Canada to tax capital gains on immovable property such as land but not on other property, so that a West German resident can hold real estate through a corporation and escape Canadian tax on gains realized from the sale of shares of the corporation. Compare that with a Canadian resident holding a substantial interest in a similar corporation in West Germany where he may be taxed by that country. I think it is important that this treaty with Germany which had its origins in 1956, be ratified, but I think there might be some trade-offs.
I am sometimes concerned with the policies of other countries on apparently unrelated issues when we are renegotiating a tax treaty. In the case of West Germany, I refer particularly to the extradition provisions which they have for German-born naturalized Canadian citizens. I had a personal involvement in a case where the German authorities had convinced the authorities in the United States to arrest a Canadian citizen in the U.S. on some outstanding complaint that the West Germans had against this Canadian. You might say, okay, he should have been brought to justice. The fact was that Canada was powerless because this man was being held in the U.S. at the request of West Germany.
It was the United States authorities, without any help from Canadian authorities, who decided that the claim that Germany had on this Canadian national was not valid. They released the Canadian citizen who then returned to his country. When he returned to Canada, he found that he might be in jeopardy again because the treaty which Canada had with West Germany could make him subject to arrest, seizure, and extradition to West Germany. All right, we have extradition treaties with other countries, so why not with that one? The fact is that as part of that treaty and part of the German national law, no German national can be extradited by any other country if he is in Germany. Canadians do not offer the same protection to Canadian citizens at this time.
I am happy to say that this particular individual has not been arrested and extradited and, at the moment, he is safe, but he thinks he should have the protection of his own country. Perhaps when his adopted country, of which he is a citizen, is negotiating with his old country, a balance should be achieved to ensure that nationals of each country are treated equally.
Earlier I mentioned the similarities in the tax systems of the various countries with which we are dealing. One of the
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countries on the list is Roumania. Roumania has been in the news a lot lately because some of its athletes are very good. It is a communist state, and its citizens are not free to come and go as they wish. Some of them have defected when they have been absent from Roumania on athletic missions. How much do we really know about the tax system of Roumania? Should we associate ourselves in tax treaties with countries such as Roumania when we do not have sufficient knowledge of the workings of their tax systems, although we know a certain amount about their political systems? I think there is room for more study to see whether this is desirable and is the kind of thing we should continue.
Canada appears to be a tax haven for Germans. Canada must be careful about tax treaties with tax havens. It is fairly easy these days to shift large amounts of cash out of Canada into a tax haven from where it can be reinvested, perhaps even back in Canada, and be subjected to a much lower rate of tax even though it is falling into the hands and control of a Canadian resident. This is not the kind of situation which legislators have in mind, but I am afraid it could slip through the system in proposals such as the one before us.
Tax havens are not the only gimmick available to tax planners. For example, the present treaty with New Zealand appears to allow Canadian taxpayers to finance, in large measure, the merchant shipping fleet of New Zealand. One might ask what the tax treaty has to do with that? The existing tax rules have allowed large amounts of money, some $50 million, to be raised in Canada for the Shipping Corporation of New Zealand, Limited. In any event, that money has been used to increase the merchant shipping fleet of that country. Would it not be nice if Canadian taxpayers, investing that amount of money and losing tax on that amount of money, could receive some of the benefit flowing from it to establish a merchant shipping fleet in Canada?
Ever since I came to the House of Commons, there has been much talk about Canada's merchant shipping fleet; how great it would be for Canada to have one and is it not an awful thing that Canada relies on foreign bottoms instead of its own merchant shipping fleet? Yet this tax treaty allows a gimmicky arrangement which sees Canadian taxpayers largely funding the fleet of another country.
I suppose one of the most notorious shipping fleets in the world is the Liberian one. The Liberian flag is always seen as a flag of convenience. If one spots the dirtiest ship in the harbour of Vancouver it is bound to have the Liberian flag and be based in Monrovia. One might say that that is their industry; but I am pleased to say that through the pressures of the official opposition in committee, particularly of the hon. member for York-Peel (Mr. Stevens), the government has agreed to eliminate Liberia from this bill. Before the government considers entering into treaties with countries such as Liberia and other countries carrying on activities of which we would not approve, I hope we will be able to have a close look at them.
Another country on the list is Korea. We do a lot of trade with Korea. A friendship society is being established with
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Korea, yet there are many differences between Canada and Korea. For example, through the sale of Candu reactors by Atomic Energy of Canada to that country, we know that enormous commissions were paid to non-nationals of Canada and non-nationals of Korea. The explanation given to Parliament, when it was called upon to investigate the situation, was that they do things differently over there. Certainly they do things differently.
I have visited Korea. Its people are very industrious. The people of Korea have done a fantastic job building up the economy through hard work and their different habits. But we must look at its political system as well. Not so long ago the House passed a motion dealing with the sentencing to death of the Korean leader of the opposition, Kim Dae-jung. Mr. Dae-jung is still under sentence of death and his limits, as far as appeals are concerned, are running out. He may be subject to the mercy of President Park Chung Hee before too many days have gone by.
I do not suppose anyone looking at the treaty with Korea and its tax aspects is very concerned about Mr. Dae-jung, but I do not think he is guilty of anything more serious than what the Right Hon. Prime Minister (Mr. Trudeau) might have been guilty of when he was leader of the opposition, or of what the Right Hon. Leader of the Opposition (Mr. Clark) might have been guilty.
There are basic differences in some of these countries. I do not think we are covering any European countries today, but tax evasion is a great sport in Europe. It is not seen as a criminal offence; one can be quite proud if one manages to evade taxes in some European countries. We should be concerned about those things when entering into agreements with these various countries.
Also I must recognize that Bill S-2 has been passed by the Senate. It has received second reading in the House, approval in principle, and the committee has examined it in some detail. Now it is back for third reading, and perhaps this is not the time to make changes. But I appeal to the government and members of the House to ensure, when we negotiate sensitive agreements with countries about which we might wish to know more, that we take a little more care and that the countries have many similarities to our country so that treaties will work in the way expected and in the way they have worked with the United Kingdom, and with the United States, our major trading partner and neighbour to the south.


Some hon. Members:: Hear, hear!


James Scott (Jim) Peterson: Mr. Speaker, I should like to begin my remarks concerning Bill S-2 by complimenting the hon. member for St. John's West (Mr. Crosbie) for the very deft manner in which he was able to piggyback a discussion of Canada's monetary policy on to the back of a bill dealing with international tax treaties.
Because the member raised these points, I feel I am quite entitled to deal with them. He attempted to throw stones and bricks at us. They were not bricks and stones, nor pebbles and sand. He was throwing confetti at our monetary policy. I say

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that because he did not once offer any concrete alternatives to the policies pursued by this government. He might have implied it, but he did not say that we should peg the value of the dollar. He would not say that we should peg the value of the dollar because he knew very well that if we were to peg the value of the dollar it would drive up inflation, it would hurt those people in Canada who must import food and fuel this winter. It would hurt those people in St. John's West and those people in Willowdale who are on fixed incomes. He did not have the courage to say what the alternatives were.
I will give the member for St. John's West credit because he, at least, has risen from his pew to object to the marriage which has been arranged in our country between world economic realities and the Canadian economic realities. But I certainly cannot give him any credit for any more than his weak, plaintive voice. He rose from his pew to criticize this marriage, but it was not the voice of a Lochinvar who was proposing alternatives, it was the voice of a plaintive suitor who had lost out. It was the voice of a suitor who realizes that had he been more understanding, more compassionate, and more realistic a year ago toward the Canadian people, it would be he who was the bridegroom.
1 would also like to compliment the hon. member for St. John's West on his comments dealing with the Canada-U.S. treaty. This is a treaty which has been in the making for eight years, and for whatever role he played during his sojourn in government in advancing those discussions, which have now been completed, we compliment him. I also applaud the tremendous work of our own officials. This treaty melds two very diverse and complex tax systems.
I would like to make a few remarks about the myopic, Alice-in-Wonderland view of the world which was expressed by the hon. member for Broadview-Greenwood (Mr. Rae). The hon. member in his remarks again indicated a knee-jerk reaction to business. He seems to think that if it is business it must be suspect, and if it involves international business, shame on it! The hon. member for Broadview-Greenwood is a very intelligent person. We know that he is a lawyer, he is a disciple of Dennis Healey, but just because he joined a socialist party which does not have the courage to call itself by that name-they have gone through a number of name changes and they do not have the courage to put that in their title-it does not mean he must check his intelligence with the Sergeant-at-Arms at the door of this chamber when he enters it.
I would like to refer very briefly to a few of the points he made in his remarks. Number one, he criticized these treaties on the basis that a multinational corporation can use them to reduce taxes by avoiding double international taxation. This is through the foreign tax credit mechanism. I would like to explain it in this way. The foreign tax credit mechanism works so that if a company operating in a foreign jurisdiction pays taxes there, then Canada says it will not tax those profits, it will give a credit for the foreign taxes which have actually
been paid. This is the approach of recognizing that the primary taxing jurisdiction must go to the foreign jurisdiction.
1 do not know what is the hon. member's suggested alternative. Is it that we should again tax these profits, for example, $100 of profits which have been taxed at 50 per cent abroad, and tax them again, imposing another 50 per cent of tax, thus taxing away all the profits? If this is his alternative, let us discuss it. The approach of recognizing the primary taxing jurisdiction of a foreign country is the proper one. This is the one which is exemplified in these tax treaties.
The second point he made was that these tax credits will enable Canadian multinational corporations to do business abroad, which means they will be exporting jobs from Canada. This, to me, is a narrow view of world economic realities. What makes him think that a Canadian company can manufacture everything in our jurisdiction here, within our own borders, and export it to every country in the world? It is the NDP, of which he is a member, which has spoken most vehemently against the role of multinationals in Canada and what they are doing here. Is he saying, on the one hand, that multinationals in Canada must come here, create more jobs, do more research and development, employ more people and train more people in our country? Then, on the other hand, is he telling us that we must stop our companies from going abroad and meeting these legitimate development needs of other countries in the world? Establishing some subsidiaries in foreign jurisdictions is often the only way we can compete in those markets. We are subject to the competitive forces. We are doing a job there.
The hon. member for Broadview-Greenwood said he also objects to the inequity which arises when dividends can come back to Canadian companies from abroad on a tax-free basis. He says it is not fair. He says it is not fair that foreign income should not be subject to taxes when it comes back here. I do not know on what he is basing his standard of equity. I am sure he realizes that dividends flow tax-free between two domestic Canadian corporations. Is he saying we should discriminate against the company which goes abroad? I do not think he is saying that, but he seems to be raising this objection. So his equity argument is one which I cannot understand.
The last point I want to comment on-and he raised a number of them-is one which bothers me very considerably. It is one which arose from his remarks when he said he objects to these treaties because they permit the deductions for foreign taxes notionally payable in developing countries. This is a concept which is referred to in tax jargon as "tax sparing". What it means is simply this. Foreign developing countries have needs for capital infusion for know-how, development, and industrialization. These are priorities which they set out on their own. Every developing country in the world has development objectives, to industrialize and to create jobs to make their economies less dependent on the vicissitudes of world trade and world fortune, to give their people a stake in their economies to develop. The way they do this is to offer limited tax holidays. They say, "If you come in and establish
December 12, 1980

an industry which will employ people, create new jobs here, give us know-how, train our people and bring them up to western standards, then we will grant you a tax holiday of up to five, or sometimes ten years." These are development objectives. This is the way they do it in the developing countries.
The hon. member for Broadview-Greenwood has objected to us giving a tax break when those dividends come back from those companies dealing in these developing countries. The alternative, if we are to tax the income which comes back to Canada from these new and necessary development projects, would be to wipe out and negative every development objective which is being offered by a host country. It would amount to the transfer of tax revenues from the foreign jurisdiction into Canadian coffers. This would be economic imperialism at its worst. This is the naivete which was expressed by the hon. member opposite.
In conclusion, Mr. Speaker, these tax treaties are part of a regime of taxation which recognizes the reciprocal advantages that two countries sitting down together can work out to their mutual benefit from the sharing of tax revenues where business cuts across international borders.
Canada is at the heart of international business, and international trade is part of Canada's lifeblood, even more so than any other country in the western industrialized world. We need to get on with these tax treaties. We need to have more of them. I compliment the minister on what he has achieved, and I ask the co-operation of the House in concluding many more such treaties.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Speaker, I shall take only a moment or two at the third reading stage of this bill. First, I should like to join with the hon. member for Broadview-Greenwood (Mr. Rae) in expressing the hope that we will soon see an increase in the number of reciprocal agreements in the pension field, along with these reciprocal tax treaties. I am glad that the Minister of National Health and Welfare (Miss Begin) was able to announce today that another one is about to be signed, namely, with Portugal. I know she is working on agreements with other countries such as Belgium, the United Kingdom, France, Germany and perhaps others. I realize that concluding these agreements requires some give and take on both sides, so we cannot always blame the government because it does not get an agreement with another country. These matters are very important to many persons living in Canada, and I hope that she will stay with it.
At the same time, I would like to impress upon the Minister of State for Finance (Mr. Bussieres), the urgency of continuing the tax treaty negotiations with West Germany. When this bill was at second reading we had a bit to say about it, and the minister agreed with our contention that something should be done and that the blame should not all be put on West
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Germany. I am interested in this matter because the tax arrangements between these two countries also have a bearing on the pensions and the pension income of many former German citizens living in Canada.
In view of what the minister said at second reading, I was hoping that by the time we got to third reading a convention with West Germany might be in the bill. I see that it is not there yet. I urge the minister to keep working on the matter as, again, I urge the Minister of National Health and Welfare to keep working on reciprocal pension agreements.


[Stage Direction]
Motion agreed to, bill read the third time and passed.

[Stage Direction]
The House resumed, from Monday, December 1, consideration of the motion of Mr. Chretien that Bill C-34, to amend the Judges Act and certain other acts in consequence thereof, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
Mr. David Kilgour (Edmonton-Strathcona):: Mr. Speaker, when the debate last adjourned, I was making the point that the bill was abusive of taxpayers and insulting to past, present, and future judges. It is abusive of the taxpayers because the salary increase of up to $16,000 per judge is unreasonable in the circumstances in which the country finds itself, and it is unreasonable with respect to pensions because the 1 per cent contribution rate, considering the richness of the benefits to be conferred, is unreasonable. To put it in stronger language, it is bordering on the obscene, and is what I call a rake-off at the public's expense.
1 will attempt to amplify some of these points, but before doing so I would point out that my wife and I, both lawyers, may suffer for this intervention in due course. I believe that what I am saying is true, and I hope that some judge will not in the distant future take it out on my wife if she should appear in court.


Mrs. Appolloni:: Oh, oh!


David Kilgour: To the hon. member for York South-Weston (Mrs. Appolloni), I have no doubt that should I go back to court work some judge, and I hope not many, will take it out on me. I am simply making the point that judges should not apply guilt by association to my wife.
The Minister of Justice (Mr. Chretien), who is not here today-in fact, looking around I do not see anybody who was here the last time when we had something of a free-for-all on this matter-made the point that I was denying judges what he called "decent increases". The Minister of Justice is also the Minister for Social Development, which is a role which demands some concern for the public at large as to the use of

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public funds. He should not be here as an apologist for the lawyers or the very few judges who think that the increases should go through in the form which he has proposed them.
I would remind the Minister for Social Development of a couple of things in this regard. First, fully half of the older Canadians who receive the old age security also receive the guaranteed income supplement because they have no other income. The OAS and the GIS together amount to $4,350 which is enough to live in poverty. The OAS plus the CPP, the Canada Pension Plan, in total amounts to $5,296, or almost exactly what is considered to be the national poverty line. In that context, what we are doing for the judges is patently unreasonable. There are many other misjudgments in this bill.
The Minister of Justice appears to think that being a superior court judge is such an unattractive job that these people must be paid very large salaries and pensions in order to attract better people to the job. That is an insult to the 650 men and women who are section 96 judges across Canada. Has the minister found it difficult to obtain first-class men and women to appoint to the bench? With the present salary level, and to this point, I doubt it very much. In fact, I am certain that he is not finding it difficult at all.
But if someone needs $70,000, $80,000 or up to $88,000 per year before they will take a judicial appointment, perhaps that person is not the type who should be sitting on the judicial benches across Canada. It is an honoured position, and salaries do not need to be as high as have been proposed. Members opposite cannot tell me that hockey players, rock stars and businessmen receive salaries in this range, because for one thing, that is money which is earned in the private sector, whereas these increases will come out of the pocket of the Canadian taxpayer.
Second, the pension proposal is altogether too rich. Federal public servants, and I was one once, can receive a pension of 70 per cent of their best six years' salary after 35 years of contributing to the fund 6.4 per cent of their salaries. Under this bill judges will pay 1 per cent of their salaries and will obtain two-thirds of their income in pension after ten years. The premise here is that the judges in receiving an appointment to the bench, at say, age 50, have made no preparation for their retirement and must, therefore, receive supra-special treatment.
I suspect that the vast majority of the 650 judges would agree with me that the contributions in this bill are totally unwarranted. Does it accord with reality to suppose that judges have done nothing to prepare for their retirement? I submit that it does not. Surely the benefits of any pension plan should have a reasonable relationship to any contribution if justice is to be done and to be seen to be done. This principle of justice is cited every day in courts across Canada. It should also apply in the cases of the judges' pension plans.
Somebody may say, "What about a case where a judge is perhaps killed by a bus and his wife has no pension fund?" The answer there is that an order in council can be passed, as has been done, I believe, in all the provinces and at the federal level for many years, providing for an ex gratia payment to
help in a difficult situation. Again, I also suspect that the vast majority of judges and lawyers in this country would agree with me on that point.
Third, I am told that salary increases will aggregate about $4.5 million yearly. A one shot payment of $3.5 million is to cover the pension scheme, and $800,000 annually is to cover increases in judges' allowances. This total, as surely as tomorrow's sun comes up, will be added to the $17 billion deficit that is predicted for next year. If past practices are followed, a large part of that sum will simply be monetized, which is a polite way of saying that the Bank of Canada will print money for the amount of the increase in the deficit.
Of course, the government hopes that most Canadians will not realize how this monetized or freshly printed money affects inflation. But I submit, Mr. Speaker, that more and more Canadians know that such gross financial irresponsibility results in ever-increasing catch-ups and ultimately results in what I call "wheelbarrow" money. It has been said that in terms of purchasing power it is becoming cheaper to eat dollar bills than lettuce. I, for one, believe that MPs, judges, business executives and everyone in the public sector, should show a little restraint in such matters.
A retired constituent came to my office last week and told me that he and his wife have a total income of $408 each month from old age security and the Canada Pension Plan. After paying for rent, gas and light, they have $100 left for food, transportation, clothing and everything else for the two of them. He said he is desperate because his wife is ill. Cases like this are one reason why I speak against this bill in terms of equity across Canada.
My fourth point is that the unspoken premise of this bill is that it can be used later as a ratchet for other salaries in the public sector. In fact the salaries of the Auditor General and the Official Languages Commissioner are already tied to it. If things proceed next year as they have in the past, a judge will be appointed to study the salaries of public servants. He will probably decide that they should be paid at least the same as judges. Perhaps MPs will even come under the same brush. This seems obvious, from recent reports. So it goes, Mr. Speaker. Every year someone gets an increase, then someone gets a larger increase. I suggest that the Canadian people are going to become very fed up with this, if they are not already.
The last time this matter came up, two or three members of the NDP asked that it be sent to committee, and they were supported by a few Liberals. Then they accused this party of filibustering. Do those hon. members really think that when this bill goes to committee one comma or one word will be changed? It is similar to what I call the NDP fallacy with respect to the constitution. Do they think that by voting to send the constitutional package to a committee dominated by Liberals-I see the hon. member for Winnipeg North Centre (Mr. Knowles) nodding in agreement-that one phrase in the constitutional proposal be affected? I suggest that the same thing applies to this bill. There will be no changes in commit-
December 12, 1980

tee if we can judge by past experience, because party discipline applies in committee just as much as it does here.


An hon. Member:: What about your party?


David Kilgour: I hear some comments, Mr. Speaker. I am almost at the point where I feel badly if hon. members opposite do not heckle. I enjoyed this much more the last time.
I am sorry that they are only starting to heckle because I have come to the end of my remarks.


Walter David Baker: That is not a heckle; that is a guffaw.


David Kilgour: In conclusion, Mr. Speaker, I intend to vote against this bill because it is unreasonable, and I hope that members on all sides of the House will consider doing likewise.


Hon. Bill Jarvis (Perth):: Mr. Speaker, I wish to make a few comments on this bill. I am inspired by the hon. member for Willowdale (Mr. Peterson) who, all of a sudden, is an international fiscal expert. Perhaps I could therefore be considered an expert on the judiciary.
A number of things in this bill bother me, Mr. Speaker, as well as some that are not in the bill. I find it very hard to accept the delay in bringing the bill forward, as it was drafted long before this party formed the last government. It bothers me, as well, to have to go through this exercise every year, or two years, or three years. I find that most unseemly, just as I find it unseemly for us to debate our own pension schemes or pay raises. Surely that tradition is not so firmly rooted in this country that we have to accept it as inevitable.


Jean-Luc Pepin: You are such a gentleman.


William Herbert Jarvis: I think I have some support from the Minister of Transport (Mr. Pepin). At least he is not shaking his head but is smiling at me.


Jean-Luc Pepin: You are such a gentleman, I said, that it is not proper to discuss your own salary.


William Herbert Jarvis: I can find much to agree with in the propositions advanced by my colleagues on all sides. There is no uniformity in the approach to this matter. In parts of my riding, in Ontario, it is much easier to attract applicants for the judiciary than in other parts. In the short period that this party formed the government there was an opening in Mus-koka and every Toronto lawyer of every political persuasion who had a cottage there, wanted to be the judge. At Thunder Bay and the Lakehead, however, where workloads are heavy and travel is difficult, there was no interest.
It is a little difficult to understand why the legislation recommends salaries higher than those recommended by the various committees and commissions that study these matters.
Judges Act
There may be a rationale for this, but it was not contained in the minister's speech when he introduced the legislation, and that troubles me. In a moment I would like to deal with pensions, Mr. Speaker.
I am delighted that the Parliamentary Secretary to the Minister of National Defence (Mrs. Appolloni) has remained in the House, Mr. Speaker, because I may have done her an injustice. I interpreted her intervention when my colleague from Edmonton was speaking-although it was not a formal one-as possibly taking his remarks as chauvinistic. I hope I do not do her a disservice, as I have the greatest respect for her, but when my colleague mentioned that his wife might appear in the courts I thought she took it the wrong way.
This leads me to my main point, Mr. Speaker. It is a minor point, yet I find it absolutely unacceptable that the annuity of a judge's widow is suspended if she remarries. That is a terrible thing to put in legislation. Even in the dark ages when I was practising law and I was asked to put in what we called the dum casta or chaste clause in separation agreements or wills, although I did it on a client's instructions, l found it repulsive. That was in the sixties; now we are in the eighties, debating legislation that provides for the annuity of a judge's widow to be suspended upon her remarriage. What on earth is the rationale for that, Mr. Speaker? I fail to understand why we should inscribe a deterrent to a judge's widow in this legislation. It makes no sense unless we want to return to the dark ages.
I realize this is a minor point and I do not want to take up the time of the House with it, but why in 1980, do we introduce legislation to discourage a widow-young or old, it makes no difference, whether she is 80 or 20-from remarrying?


Jean-Luc Pepin: It is the puritanical concept of punishment.


William Herbert Jarvis: The Minister of Transport says it is a puritanical concept of punishment. I think he puts it much better than I do. If the parliamentary secretary wants to do a service, I say introduce an amendment to get rid of that absolute nonsense. I will not go on any longer because we do not want to make a big issue out of that. But surely in the interests of decency, if nothing else, we would reject that kind of a provision in a bill drafted in 1980.
There is one other minor point which troubles me. I do not know why we relate salaries of other public servants in the judges bill. I do not find that acceptable. Why would we relate salaries of the Chief Electoral Officer or the Commissioner of Official Languages in the same legislation as judges? There may be a rationale, but if there is, I would certainly like to know. However, I do not want to stand up here every two or three years and have to debate not only the judges salaries, which is bad enough, but also the salaries of the Chief Electoral Officer or the Commissioner of Official Languages. If there is any sense behind that, why don't we include every other public servant?

December 12, 1980
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Jean-Luc Pepin: They are officers of Parliament.


William Herbert Jarvis: The minister says they are officers of Parliament. That begs the question: why are we not debating the salary of the Clerk of the House or the Sergeant-at-Arms and heaven only knows who? 1 do not accept that as a rationale. I do not understand it.
My chief concern is the pension aspect. The Liberal government got us into this situation in 1975. The government created two classes of judges by its 1975 legislation and now it stands the victim of its own making. You created two classes of judges and now you are coming back to try to restore what was an obvious mistake in 1975.


The Deputy Speaker:: I would invite the hon. member to address his remarks to the Chair.


William Herbert Jarvis: Mr. Speaker, 1 am sorry. I was taking liberties on a Friday afternoon which I should not have expected, and 1 thank you for helping me. More speakers should point out that omission to us because I notice members are slipping into a bad habit by not addressing the Chair. 1 stand corrected, and 1 deem it is a pleasure to address you, sir, rather than my colleagues across the way. 1 deem it a much greater pleasure, 1 might say.
Having put us into that situation the government is now trying to correct it in 1980. Looking at it in the abstract, I find that non-contributory principle likely unacceptable. Why do we create a distinct class of judges, vis-a-vis the contribution aspect when we compare them, as was done by my colleague, the hon. member for Saskatoon West (Mr. Hnatyshyn) on December 1 at which time he pointed out the same aspects with respect to the armed forces, the RCMP, public servants, members of Parliament and senators? It is very hard to understand and accept the rationale for that. I would think that deserves our serious attention. Do we regard it as a precedent, which we do not want to be adopted in terms of these other classes? We might regard the rationale as unacceptable because of the shifting back and forth from the pre-1975 situation to the 1975 situation to the 1980 situation. Surely in monetary terms the rationale cannot be supported because, as the parliamentry secretary and my colleagues opposite know, that can be compensated for in terms of salary. The pension and the salary are not apples and oranges. They are a package. There is absolutely no difficulty in rationalizing it in a monetary sense. It may mean an increase of a minor nature in the salary effect to compensate for the contributory portion of the pension.
Mr. Speaker, I had only intended to speak for seven or eight minutes and I have already spoken for longer than that. However, 1 appreciate the opportunity to put some of my thoughts on the record.


Ursula Appolloni: Mr. Speaker, I rise on a point of order. I appreciate your courtesy in allowing me to explain my intervention, which was referred to by the hon. member for Perth (Mr. Jarvis). The hon. member felt that in my intervention I was referring to a chauvinistic attitude. I hasten to say that I was not. With your permission, Mr. Speaker, 1 would like to explain why I intervened in the first place.
I referred to the speech made a few moments ago by the hon. member for Edmonton-Strathcona (Mr. Kilgour). I believe the hon. member in his opening remarks-I do not have them before me, obviously, because Hansard has not yet been delivered-he implied that because he was speaking against this particular bill there was the possibility that judges or any judge could retaliate in kind or in any other way against him or his wife, who I gather is a practising lawyer. That statement shocked and appalled me, particularly now when cynicism toward public figures is rampant in this country. I believe that such an impression as left by the hon. member, who is himself a member of the legal profession, is totally unworthy of him. That is why I said it was shocking. I repeat, I still think his statement was shocking.


Stanley Howard Knowles: Mr. Speaker, when I have occasion to speak in this House I usually try to develop what I have to say in some orderly sequence. Sometimes I even have a plan, but 1 am altering that pattern somewhat today. 1 want to say that I am persuaded to start first in a field to which a fair amount of reference was made by the hon. member for Perth (Mr. Jarvis), namely, the position of widows. I am glad he raised the point that there does not seem to be any place in the 1980s for a provision that a judge's widow who remarries must lose her pension. I support both the hon. member for Perth and the Minister of Transport (Mr. Pepin) in their objection to that.
One of the reasons I want to say this right at the beginning is because in my view that kind of provision ought to be removed from all of our pension laws. For instance, the Public Service Superannuation Act, the Canadian Forces Superannuation Act, and the Members of Parliament Retiring Allowances Act all have the same provision. All through our legislation we find this eighteenth or seventeenth century idea that a woman is taken care of by a man. If he dies, she gets a pension, but if she finds another man to take care of her, out goes her pension.
It really is for the birds and I hope my hon. friend from Perth, and my hon. friend, the Minister of Transport, will agree that it ought to be taken out of all other pieces of pension legislation as well. By the same token I dislike very much another provision in those pension plans. Since the hon. member for Perth spoke, I have been unable to check back to the original act to see whether it applies in the Judges Act, but it probably does-if it does not, we are giving judges' widows preferential treatment. In most pension plans a widow does not qualify for a widow's pension if she married the person of whom she has become the widow after he left the job. That is certainly true in 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.
December 12, 1980

I have heard from some former colleagues in this House who got married after they left here; they discovered that in the event of their death they had no widow's pension to leave to their widow. How nonsensical can we be that we do not recognize a woman's rights as a woman rather than on the basis of her attachment to a man and as to when that attachment took place. Let us get to the point where we treat men and women equally.
By the same token, there is something else we do to widows which is quite unfair. Like the hon. member for Edmonton-Strathcona (Mr. Kilgour), i think this whole package in Bill C-34 is too rich. He was probably speaking for himself rather than his party. 1 may not have the support of all my colleagues in saying this bill is too rich.
Again with the judges, and it is the same with members of Parliament, public servants, armed forces people, retired railway workers or what have you, if the man dies first, the widow gets only a portion of that pension. However, if she dies first, he receives the whole pension, 100 per cent. Maybe that was something to boast about when society first began establishing survivor benefits, but surely it cannot be defended in a day when we insist on equal rights between men and women.
I would like to see all of these inequalities and unfairnesses to widows corrected or removed, not only from the Judges Act but from all our of our pension legislation.
Still on the subject of widows, I am glad to see in this bill a provision to increase the pensions of widows of judges. I support that in principle. However, when 1 look at the amount, the minimum of $13,900 a year, subject to indexation down the road, I think of the fact that not long ago we passed a bill to provide pensions to the widows of disabled veterans, but the amount is nothing at all compared to this figure. What is worse, and in fact scandalous, is the fact that we provided that in some cases those widows should have to wait six and a half years before they draw the pensions to which Parliament has now said they are entitled.


Mr. Robinson (Burnaby):: Shame!


Stanley Howard Knowles: My colleague says shame. The whole House of Commons ought to say shame.


Walter David Baker: Shame!


Mr. Roberts:: Shame!


Stanley Howard Knowles: Now it is unanimous. I have a "shame" from each of the three parties in the House.


Walter David Baker: Move a "43" on Monday.


Stanley Howard Knowles: Seriously, when are we going to come up to date? One of the arguments will be that if we give this kind of lead in Parliament, private pension plans will have to do the same. So what? One of the things Parliament should do is give the lead. As I said, the amounts in this bill make it look like something totally different from the normal pension statutes
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with which we deal. I am glad to see a little something by way of principle for widows, but I wish we would apply that principle in all pieces of legislation.
1 urge that throughout the whole gamut of pension arrangements the widow's pension should be the same amount as the husband would get if she had died first. I argue as well that the person who is usually referred to as a second wife-she might not be, she might be the first wife of the old chap- should get the widow's pension despite the fact she may have married him after he left the bench or retired from whatever employment he had.
1 know of cases where the so-called second marriage has lasted longer than the first. I know of many cases where in the so-called second marriage the wife had a great deal to do by way of attending to her husband in a period of illness and when the illness ended in his death, there was nothing for her. She may have been married to him for 25 years, but there was no pension for her because she married him after he went on pension.
I am glad the hon. member for Edmonton-Strathcona said what he did in this area. It prompted the Parliamentary Secretary to the Minister of National Defence (Mrs. Appol-loni) to make an interjection. That prompted the hon. member for Perth to spend a good portion of his remarks on the question of how we treat these widows.
We have come a long way since I came to this place some years ago. However, we are still so far behind that we do not have the right to say we apply equality between men and women in terms of pension arrangements.


Miss Jewett:: Or anywhere else.


Stanley Howard Knowles: As my colleague appropriately adds, or anywhere else. She is on the list to speak in this debate and may have something to say on this score.
Having picked the middle or latter part of my speech out in order to give this matter the importance it deserves and because it followed on what had been said by others, I commend the hon. member for Edmonton-Strathcona on the statement he made on December 1 and again today with respect to this bill on the ground that it is rather rich. It is. The salary proposals, as I understand them, are such that although at the present time federally appointed judges draw salaries ranging from $47,000 to $69,000 a year, the new range will be $65,000 to $88,000.
I know all the arguments for high salaries-the need to get competent people and the fact that judges are lawyers who could make a great deal more in private practice. I also know that this is a time of restraint. Every day some motion under Standing Order 43 calls for something to be done for some needy group, and the government says no. In the Speech from the Throne, the government said it planned help where help is needed.
Certainly salaries have to go up. That is the course of history. When I first came here on a salary of $4,000 a year and discovered that cabinet ministers of the day were getting

December ] 2, 1980
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an additional $10,000 and Mr. King was getting an additional $15,000, 1 wondered what they did with it all. I wondered what Mr. King did with a total of $19,000, plus a few other things.


Jean-Luc Pepin: He gave it to the state after.


Stanley Howard Knowles: He gave it to the state to make sure the state would not forget him.
Salaries do increase, partly because we produce a much greater volume of goods and services and partly because of inflation. However, when we talk about increasing salaries, those increases should start where they are most needed. We should not always bow to the proposition that those at the top should get the increases first. If someone says this may have a bearing on what I will be saying about increases for members of Parliament when that piece of legislation is brought in, my reply is that members know where 1 stood the last few times. 1 will be taking the same stand again.
I say this about judges. They themselves should say that they could get along and could be given lesser increases than are provided in this bill. I quite agree with the member for York South-Weston, the Parliamentary Secretary to Minister of National Defence, that maybe it was a bit of an insult for the member for Edmonton-Strathcona to say that a judge would take it out on him or his wife before the courts. 1 am sure he did not mean it that way and that no judge would act that way. 1 think judges have the respect of the citizens of this country because of the positions they hold and because of their impartiality; they do not need high salaries to get respect. I am looking across the way at a friend of mine. 1 will not name him in case he does not want to own up to it, but he is one who agreed with me in the elevator the other day that position in society is not necessarily marked by the amount of salary one receives.


Jean-Luc Pepin: 1 also said we should not impose our virtue on other people.


Stanley Howard Knowles: My hon. friend has identified himself and has added that we should not impose our virtue on other people. 1 do not think it is a matter of virtue. 1 think it is a matter of fairness, justice and common sense.
Let us go back to the widows of disabled veterans whose pensions were below the 48 per cent level and who have finally been accorded those pensions. Some of them must wait six and a half years. Judges' widows get it right away. I think of the people who are waiting, and who keep waiting, for salary increases. I find in this bill the increases are to be retroactive.
There are two stages of retroactivity but they will be retroactive whenever the bill is passed. As I read the bill, a judge who may have retired will still get the increase for the time he was on the bench, which is quite different from what happens to employees of the public service when there is an increase in salaries; it goes only to those who are on staff at the time it comes into effect.
I am just pleading for some fair play and justice in the whole thing. 1 know the arguments in defence of salaries as
high as $88,000 a year. That is a lot of money. Ian Sinclair of the Canadian Pacific Railway receives a lot more than that.


An hon. Member:: Half a million dollars.


Stanley Howard Knowles: The only way we found out the amount of his salary was because the parent people in the United States had to reveal the information down there.
The other day one of my friends mentioned how much school teachers make compared with what members of Parliament make. I said, "Which do you want to be?" He did not hesitate for a moment. He said he would rather be in Parliament. 1 still believe there is some sense to Edward Bellamy's concept in "Looking Backward" when he suggested that the people who do the meanest, hardest and dirtiest work should be paid or compensated for it because those who are doing the kind of work we are engaged in have far more satisfaction in doing it. Now the hon. member is shaking his head, no doubt in disbelief.


Jean-Luc Pepin: I am virtuous, but not to that extent.


Stanley Howard Knowles: It seems to me the satisfaction that judges, members of Parliament and others get out of their jobs should be taken into account. We do not always have to put them first. There are too many people out there today wrestling with the prices of butter, milk, bread, tea and coffee, prices the Prime Minister (Mr. Trudeau) had to admit the other day he did not even know. These people worry from day to day. People are having to renegotiate their mortgages at 16 per cent, 17 per cent, 18 per cent and 20 per cent and are worrying about how far things will go. Yet, we can do what is in this bill, make it all retroactive and tidy it up.
There is something about all of this I want to propose, and 1 am going to propose it particularly in relation to the pension provisions in this bill. It has often been suggested in the House of Commons, when dealing with procedural matters and so on, that the practice we have of governments bringing in legislation in its final form, meaning that all the House can do is accept it or reject it, is not sacred. Maybe there are times when members of the House of Commons should have some input before a bill is put in its final form. We have done that a few times. We did it with respect to the National Transportation Act a few years ago; we have done it with respect to our divorce legislation and at other times as well. We have given a bill first reading and then, before it was given a second reading, had its subject matter sent off to committee so the whole thing could be looked over. This ought to be done with the bill before us. Instead of giving this bill a second reading, which is approval in principle, it would be far better if we sent the subject matter off to the Standing Committee on Justice and Legal Affairs and let hon. members like the hon. member for Edmonton-Strathcona, the hon. member for Perth (Mr. Jarvis) and the Parliamentary Secretary to the Minister of National Defence have some say precisely because there are all these salary figures allowances, widows' arrangements and pension arrangements.
December 12, 1980

At the end of my remarks 1 shall seek to move an amendment to the effect that the bill not be read a second time but that we send the subject matter off to committee. I am doing this not only because 1 think there should be that kind of discussion with respect to these salaries and what we do for widows-and my friend, the hon. member for New Westmin-ster-Coquitlam would like to have something to say about how few women there are on the bench-but 1 do it particularly with respect to a major principle involving pensions contained in this bill. It is the decision of the government that judges' pensions are now to be non-contributory. 1 remember well from years ago when the pensions of judges were non-contributory and, incidentally, were paid only to the judge. I remember when judges came along to Mr. Ilsley when he was the Minister of Justice and complained there was nothing for the widow. A very happy solution was reached. The judge's pension was divided into two parts. One part was two-thirds, the other part was one-third. The two-thirds was considered as the judge's pension and the one-third was considered as the wife's pension. If she died first he lived on two-thirds of the pension and if he died first she received the third. They were all happy for a while but not happy ever after.
As they wanted better pensions, the government came in with the proposition that they should be put on a contributory basis and, on that basis, be made better off. Who was the minister who brought that into effect in 1975? None other than the person who is now the Minister of Justice. He was then the President of the Treasury Board. He proposed to put the pensions of judges on a proper basis-on the basis of a principle which was defensible-and mainly that they should be on contributory basis. Now that same individual, having been transplanted or transmigrated from the Treasury Board to the Department of Justice, says we should end the contributory principle. The argument is that it created two classes of judges-some on non-contributory pensions and some on contributory pensions. If you want to put it on the basis of equality, those who are out there should be required to pay for the pensions they received. That is a form of retroactivity which would be a bit rough. But it is really unfair to the whole public to pick out this one group of people and say "Your pensions shall be non-contributory". The bill goes even further than that. It not only proposes that from here on they shall be non-contributory, but that those judges who have contributed under the laws as applied since 1975 should get all their money back plus interest. You do not find very many examples of that in any pension plan.
I urge very strongly that that be reconsidered. I think it is too complicated for us to study here on the floor of the House of Commons, and that is why I think it should be looked at in the standing committee. The hon. member for Edmonton-Strathcona objected to our sending this bill to committee on the grounds that once it gets there, it is not likely to be changed by either a comma or a semicolon, and he is right. That is why I am suggesting, not that we send the bill to the committee carved in stone, but that we send the subject matter
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of the bill to the committee and let the members of that committee go over it before it is put in the final form in which it will come to this House.
I think that there are many aspects of the bill which should be considered, but I think that non-contributory pension provisions should be considered very carefully before they are put before us as something on which to vote in its final form. I believe that many members feel that way. I think the hon. member for Edmonton-Strathcona in that part of his speech speaks not just for himself but for a number of members in his own party, and I suspect that he and I are speaking for a number of Liberal members on the other side of the House as well. All of the other pension plans in this country are on a contributory basis. The only one I can think of that is not is the pension of the Governor General and the special pension for a prime minister who has been in office for four years. Poor Joe did not make it. There is some defence for that. The Governor General's salary was fixed in the British North America Act way back to begin with, and increasing it has apparently been difficult. The Prime Minister, of course, has provided a rather generous pension for governors general, but the present Governor General, before he took office, said he wants that act amended so that if he leaves that job before he reaches the age of 50, he would not get the pension at that point but it would be deferred until a later date. I believe the Prime Minister promised Mr. Schreyer, before he took the office, that this would be done, but he did want to look at something to protect his widow in case anything happened to Mr. Schreyer while he was Governor General. With these exceptions, and no doubt there are some others, I have no doubt there are big corporations which provide-


An hon. Member:: What is that noise?


Stanley Howard Knowles: I thought it was the reference to big corporations which produced that bang. It is not a bing-bong, bing-bong, is it? At any rate, there are so few instances of this that I think we should stand by the principle, and the judges themselves should be the first to want to be in that class.
There was an editorial in one of the national newspapers of this country the other day which said some of the things I am saying now, but it went a little further and I do not agree with that part of the editorial which says that there should not be indexing, there should be no indexing of public servants' pensions, or MPs' pensions or judges' pensions, until we are able to index all pensions. I think we should be going the other way. We have started. We have done some indexing of these pensions. We indexed old age security, the guaranteed income supplement, and the Canada Pension Plan. There are a few firms out there which index their plans, but I think what we should be working for is indexation across the board. So I do not quarrel with that part of it. The only comment 1 make is that it depends on the base, it depends on where you start. If you start way up in the stratosphere, you hardly need the indexing. These are the things we should consider.
I may be rambling a bit, Mr. Speaker, but I hope 1 have made the points I wanted to make. I should now like to present

December 12, 1980
Judges Act
an amendment which I hope Your Honour will see fit to accept. It proposes that we do as I said a while ago, that instead of voting for this bill as a bill, and thus entrenching it in the process, we send the subject matter to committee for study and for particular study of the pension provisions. Therefore, I move, seconded by the hon. member for New Westminster-Coquitlam:
That the motion-
The motion, of course, is that the bill be read the second time and referred to the committee.
-be amended by deleting all the words after the word "that", and by substituting therefor the following words:
"Bill C-34, an act to amend the Judges Act and certain acts in consequence thereof, be not now read a second time, but that the subject matter thereof, particularly the subject matter of the clauses relating to non-contributory pensions, be referred to the Standing Committee on Justice and Legal Affairs."


Mr. Deputy Speaker:: The House has heard the motion. It appears to be in order.


Mr. Maurice A. Dionne (Northumberland-Miramichi):: Mr. Speaker, 1 want to speak but I will be very brief, as is my usual fashion in this chamber.
There are good reasons, of course, for this bill being before the House. It is obvious that if we are to have the best people from the legal profession willing to accept positions on the various courts of the country, we will have to give them remuneration which though it may not be comparable to what they could earn in private practice, would give them a standard of living at least roughly equivalent to what they have become accustomed to. It would be a mistake, it seems to me, to fill the courts with the least successful lawyers in the country, and therefore I support-


David Kilgour: Mr. Speaker, I wish to rise on a point of order. Would the hon. member permit a question, a very short point, now, or does he wish to wait until the end?


Maurice Adrian Dionne: I would prefer to wait until the end. At that time the question might not be necessary. As I was saying, I think it would be wrong and harmful to the judicial system if we were not able to attract the best legal minds to sit on the various courts of the country. Having said that, however, I want to go on to say that I, too, believe it is wrong for us as the Parliament to provide for the judges of this country a pension plan to which they do not have to contribute. I think it is important to remember that when anyone contributes to a recognized pension plan, those contributions are non-taxable and therefore the burden on anyone contributing to a recognized pension fund is eased by the fact that those payments are exempt from income tax.
So I want to make it clear that I support an increase in salaries for members of the judiciary in this country, but I do not support that portion of the bill which would make it possible for them to have their pension plan without making contributions to it. That is all I want to say, Mr. Speaker.


David Kilgour: May I pose a question to the hon. member, Mr. Speaker?


Maurice Adrian Dionne: Please do.
[ Translation]


David Kilgour: At the beginning of his remarks, the hon. member stated that increasing judges' salaries would attract the best lawyers in Canada to the bench. Is he casting aspersion upon the judges who are now sitting on the bench? Does he mean to say that the judges we have now are incompetent?


Maurice Adrian Dionne: Mr. Speaker, I am glad the hon. member asked that question. I think it would be an interesting exercise if I were to put it back to him. However, I had no intention of implying any such inference in my remarks. I think one's imagination would have to be very active to come to that conclusion.
Of course, many judges are highly competent, have made great sacrifices upon accepting appointments to the bench and have made great contributions to jurisprudence.


John (Moody) Roberts: Hear, hear!


Maurice Adrian Dionne: On the other hand, I actually wonder about some judges.


Walter David Baker: Mr. Speaker, I will not occupy the time of the House for long, but I listened to the comments of members on all sides of the House with respect to the question of the pensions of judges, particularly the contributory aspects of them.


Stanley Howard Knowles: Non-contributory.


Walter David Baker: Well, the contributory or non-contributory aspects of them. Particular concern has been expressed that there is an implication in the bill that they will become completely non-contributory pensions, which the distinguished hon. member for Winnipeg North Centre (Mr. Knowles) indicated was not within the purview of what he would like to see; he made that very clear. Also the hon. member for Northumberland-Miramichi (Mr. Dionne) indicated that it was not satisfactory from his point of view. I know he speaks as a member of the Liberal party. He would not want me to say he was speaking in any other capacity, although I might question him on it. From the point of view of the official opposition, it also concerns us very much.
The reason 1 raise this at the outset is that in my respectful submission it renders somewhat questionable the necessity of supporting the amendment put forward by the hon. member for Winnipeg North Centre. I think his amendment was put forward on the basis that once the position had been completely adopted by the government, if the bill passed second reading stage, there was no hope that it could be changed in committee. As a matter of fact, there is a good likelihood that it could
December 12, 1980

be changed in committee, given the opinions voiced on all sides of the House.
The government House leader is present in the House. He knows 1 have spoken with him privately about that aspect of the pensions. It is the part which really concerns me, and I pass that comment to him. He has made no comment to me with respect to it, and I do not suggest that the hon. member for Northumberland-Miramichi is speaking for the government House leader or for the government. But, it is an indication of support on the government side of the House with respect to a concern which we share as well. We should all take it into account when considering the amendment of the hon. member for Winnipeg North Centre.
I would not engage myself in this debate if I did not think it was important. A number of opinions were expressed in the House about judges on December 1 and today. As the Minister of Justice and Minister of State for Social Development (Mr. Chretien) said, sometimes we forget that there is a peculiar responsibility in the Parliament of Canada respecting the appointment of judges to ensure that the emoluments are sufficient to invite or entice the best in the profession to accept an appointment to the bench and not cast some doubt on the independence of judges because their emoluments, salaries and benefits may not be acceptable, having regard to modern day standards in the profession.
We must remember that judges are peculiar. While they are a special class of people by virtue of their work, they are also a special class of Canadians in the sense that when a federally-appointed judge accepts a position on the bench, he loses some of his most fundamental civil rights. He loses the right to speak publicly on a matter of public interest, even with respect to the operation of his own court except in a most peripheral manner. He loses the right to vote; he cannot choose his member of Parliament.
Indeed there is some doubt as to whether he can even approach his member of Parliament. Given that set of circumstances, this Parliament or any Parliament owes a particular duty to those individuals who accept that special brand of public service to treat them appropriately, but not overly kindly or meanly. We should not talk about them meanly because they cannot speak for themselves. It is important to remember that.
The hon. member for Winnipeg North Centre said something in the course of his speech to which I listened and which verified by asking someone else. He admitted that the judges should have some increase, but his quarrel seemed to be with respect to the amount. He thought the package being offered to judges was a bit rich in the circumstances.


Stanley Howard Knowles: Too rich.


Walter David Baker: I see the hon. member nodding his head. It is a matter of opinion. I was the member of a government which considered the question of the pay package for federally-appointed judges. While the pay package we proposed during the life of our government was somewhat less than this one, I think it could be argued, if one wished to do so,
Judges Act
that there has been a passage of time and that perhaps some adjustment should have been made to it.
But I say to my friends in the House that it is not a matter of principle; it is a matter of degree. When this bill goes to committee, as it is bound to, that issue will be discussed and evidence will be heard which I hope will move the minds of right-thinking members one way or the other as to whether the pay package should go up or down. I have to be honest with this court, the highest court in the land. I do not think the pay package is inappropriate. I am not prepared to quibble with $1,000, $2,000, $3,000 or having it stretched over three years. The fact of the matter is that judges, because of circumstances in this place and other places, have not received an increase, especially when we consider what most of them could earn outside. It is very difficult to arrive at a differential.
The principle which I try to apply in my own mind is that the pay package, the emoluments or the salaries of judges or their families ought to be such that they do not become an attraction for persons to accept appointments to the bench or a deterrent to persons accepting that particular public office. It is a difficult standard.
Another aspect is the independence of the judiciary. It is absolutely important to ensure that Her Majesty's judges are independent, that their minds are not moved by any other consideration than doing their jobs. They sit alone and judge the freedom of subjects, or whether one wins or loses a lawsuit or a dispute between two citizens. I do not know of any higher form of public service, including this House, which casts a greater responsibility on one individual than the responsibility which is cast upon a judge. Given that position, given the position we had when my party formed the government in Canada, and from what I know is happening in the United States, from discussions I have had with officials there with respect to their position, there is some difficulty in attracting the best people to the bench. And government justice ministers must make choices. I know that money will not be the complete attraction to the bench. Of course it will not be. But it ought not to be the deterrent to the excellence which we want to have on the bench. That is the principle which ought to guide us when we are considering this bill.
The hon. member for Burnaby (Mr. Robinson) in the course of his speech-some of which I enjoyed and some of which I say with respect to him was somewhat unfortunate-talked about the appointing process of judges. He said there was something wrong with a political party's minister of justice, who must belong to a political party, whether mine or someone clse's, making appointments to the bench and that those appointments might be questioned because they might have a partisan ring to them. In other words, a person who has been prominent in the community may be known as a Liberal or a Conservative. That is always a problem. That is the great responsibility which falls on successive ministers of justice in this country, certainly since we have been in confederation. I think generally ministers of justice over the years, whether of

December 12, 1980
Judges Act
the party which now forms the government or my own party, have been very conscious of the importance of attracting the best men and women to the bench-the best that were available. 1 think the court has excelled itself with the federally-appointed judges, which is what we are talking about now. They have excelled themselves and excelled even the expectation of some of their staunchest supporters in their sense of fairness, justice, impartiality and in the unbiased attitude which they have brought to their work. 1 do not think there is anything terribly wrong with our process. I do not think there is anything wrong with the minister of justice consulting with the Canadian Bar Association. And I say "consulting" the Canadian Bar Association. 1 do not think there is anything particularly wrong with the minister of justice consulting the community in which the judge has practised before being considered for an appointment. I think that is appropriate. It is like everything else, it is a judgment call which the minister of justice makes when the invitation is put forward or an application to serve is accepted. I think that kind of discussion must go on.
The fact of the matter is our system has thrown up some fine judges. Our system has also thrown up judges who were not so fine. There used to be a story that every time 1 lost a case 1 always thought there was something wrong with the judge and when I won a case I thought the judge was a fine man, that he had a wonderful legal mind. In any event, our system has thrown up some pretty good judges. It is a fine judicial system which ranks with the best in the world. We want to make sure it continues to rank with the best in the world.


James Scott (Jim) Peterson: Liberal appointments.


Walter David Baker: The hon. member missed the implication of what I said just a few minutes ago or he would not have interjected in the way in which he did.
It is exceedingly important that we have the best of the Bar come to the bench. It is in that respect that I commend the Minister of Justice. I commend his predecessors on both sides for the appointments they have made. Unfortunately, we did not have an opportunity to make as many but that was because of the time constraint. I hope that will be remedied as time goes on.
There is one other aspect of the bill which concerns me. I believe the judicial function is so unique that it ought not to be linked with respect to salary or with any other function. 1 notice the bill includes the Chief Electoral Officer, the Official Languages Commissioner, the Auditor General and other officials who do a great job, but their jobs are different from those of the judges. 1 think we must deal with them in a separate way. The member for Edmonton West (Mr. Lambert) commented with respect to an independent commission based on the Australian model with respect to the matter of salaries for judges, members of Parliament, senators, senior public servants and others. I think that is something the government should consider. 1 want to tell the ministers who
are here that it is what we were considering when we were in government. I think it is worth while doing it.
Mr. Speaker, I do not intend to take up too much time but 1 felt, as a member of the Bar, and as a member who feels very strongly about the important responsibility which falls upon a government with respect to the appointment of judges, that I ought to speak in the course of this debate. I want to thank hon. members for the attention they have paid to what I have said.


Pauline Jewett: Mr. Speaker, the part of the bill 1 would like to begin addressing this afternoon, and which 1 will address at some other time since there are only five minutes left, is the part relating to the provision for 20 additional judges. It occurs to me how desirable and necessary it is that those 20 should be women. This bill gives us a good opportunity to start this process.


Stanley Howard Knowles: It will still be a small minority.


Pauline Jewett: Indeed, it would still be a small minority. There are now 657 federally-appointed judges in this country.


Yvon Pinard: Mr. Speaker, I rise on a point of order. It is not often that we ask that the rule of relevancy be applied. But there is an amendment on the floor which is asking to send a subject matter to committee. The hon. member wants to speak about the number of women judges to be appointed, which is fine with me. Maybe we could agree to dispose of the amendment now and then speak on the second reading, when it would be more relevant for the hon. member to speak about the number of women among judges. Everyone knows, Mr. Speaker, that the kind of amendment which is proposed is a pure dilatory measure. It has nothing to do with the seriousness of the subject matter to be studied in committee. In committee we can look at the bill clause by clause and discuss every aspect of it, including pensions. 1 would like the record to be clear, that this kind of motion is a dilatory measure. If not then-


Pauline Jewett: They do not want women in the courts, that is all.


Yvon Pinard: -then the hon. member would not object to proceeding in the way 1 suggest, namely, that we dispose of the amendment and then come back on second reading when she will have the opportunity to make her point. That is the point of order I wished to raise, Mr. Speaker.


Stanley Howard Knowles: I am sure that my good friend, the President of the Privy Council (Mr. Pinard), would not expect me to remain silent in the face of his point of order. A week or so from now he would not be talking that way, he would be wishing us all a merry Christmas.
Whatever he may think is the purpose of the amendment, I say to him that we feel very strongly about the things which are in the bill. We think they should be discussed in the terms of their subject matter rather than in terms of being passed at second reading.
December 12, 1980

As for the amendment, Mr. Speaker, you will note that it calls on the committee to pay particular attention to the subject matter of the clauses having to do with non-contributing pensions. It also refers the subject matter of the whole bill, and since the whole bill includes appointments it seems to me that the member for New Westminster-Coquitlam (Miss Jewett), if there is any time left, has just as much right to speak on that now as she will have when we come back to it next week or next year.


Pauline Jewett: I refer you to the speech of the hon. member for Nepean-Carleton (Mr. Baker).


Mr. Deputy Speaker:: Order, please. The President of the Privy Council is rising on the same point of o'rder^)>(i
,	*[DOT] i -
| Translation]	'


Yvon Pinard: Mr. Speaker, the hon. member for Winnipeg North Centre (Mr. Knowles) did not, in fact, refute the argument I put forward with regard to the dilatory nature of the amendment; I do not hold it against him: he is exercising his privilege.
Now, I want to point out to the House the fact that the hon. member who was scheduled to take the floor on motion for consideration of private members' business at four o'clock is unable to attend. The opposition parties have been advised accordingly and with their agreement we could pursue the debate on Bill C-34 until five o'clock. We would then have a good indication of whether or not the NDP really have any dilatory intentions.
May I offer them, at this point, to sit until five o'clock to study Bill C-34, seeing it is impossible for hon. members to proceed with consideration of private members' business?


Mr. Deputy Speaker:: The hon. minister has suggested that the House pursue consideration of Bill C-34 until five o'clock. Is there unanimous consent?
Judges Act


Stanley Howard Knowles: 1 am sure the President of the Privy Council would be surprised if 1 agreed. He knows I do not agree. It is four o'clock.
[ Translation]


Yvon Pinard: As it is four o'clock, Mr. Speaker, and as 1 have explained the absence of the hon. member who was supposed to introduce motion No. 20, it would be very difficult to proceed with another motion on the order paper. We tried to contact at least 15 members at the last minute to replace the one who was to have moved motion No. 20, and it was impossible to find someone who was willing to do so. In all fairness to those who would like to take part in the debate, I believe that it is now quite impossible to use this hour for the usual purpose.
In view of the circumstances, and also of the refusal on the part of the hon. member for Winnipeg North Centre to proceed further with consideration of Bill C-34 today, I am forced to ask for the adjournment of the House. I therefore move, seconded by the hon. member for Winnipeg North Centre and the hon. member for Nepean-Carleton (Mr. Baker):
That this House do now adjourn.


Mr. Deputy Speaker:: The President of the Privy Council (Mr. Pinard) has moved that the House do now adjourn. Is the motion of the hon. minister agreed to?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. Deputy Speaker:: Accordingly, this House stands adjourned until Monday next at two o'clock p.m., pursuant to Standing Order 2(1).
At 4.03 p.m., the House adjourned, without question put, pursuant to Standing Order.

Monday, December 15, 1980