1980-07-14

Mr. Girve Fretz (Erie):: Madam Speaker, I rise, under the provisions of Standing Order 43, on a motion of urgent and pressing necessity.
Given the fact that Canadian chiefs of police are concerned about leniency in sentencing for drug offences, a perception borne out by statistics which showed that in 1978 there were 20! convictions for trafficking or for purposes of trafficking in heroin, yet only 18 of those convicted received sentences of over five years and only three received sentences of over ten years; five years earlier, however-in 1973-there were 524 similar convictions for heroin and that year 211 of those convicted were sentenced to terms of over five years, 61 of which were over ten years and seven were given a life sentence, 1 move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That this House urge the Minister of Justice to make a full report to the Standing Committee on Justice and Legal Affairs on the prosecutions, convictions and sentencing for trafficking or possession for the purposes of trafficking in heroin, and the advisability of greater minimum sentences for such offences.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NORTHERN PIPELINES
Mr. Gordon Taylor (Bow River):: Madam Speaker, 1 rise, under the provisions of Standing Order 43, to present the following urgent and pressing public matter.
Whereas Senator Bud Olson, the Prime Minister's appointed Minister of State for Economic Development, three times rejected by Alberta voters, has failed miserably to persuade
the Liberal cabinet to proceed under present legislation with his proposal for the construction of the pre-build section of the Alaska Highway natural gas pipeline, and whereas Senator Olson, hurt by the indecision of the cabinet, is wiggling, fumbling and bumbling in an attempt to erect a smoke-screen to protect the Liberal dictatorship, and whereas the Progressive Conservative members en masse are, and always have been, willing and ready to assist in this endeavour through proper reference to the House of Commons, I move, seconded by the hon. member for Western Arctic (Mr. Nickerson);
That this House challenge Senator Bud Olson to either get our surplus of natural gas moving to the United States market, or resign from his position and give the people the real reasons why progress is being delayed.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ALASKA GAS PIPELINE-CONSTRUCTION THEREOF-MOTION UNDER S.O. 43
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, my motion under Standing Order 43 is in response to a desperate appeal to the opposition for help over the weekend by pipeline minister and Senator Bud Olson, who says he is prepared to give formal approval for commencement of construction of the western leg of the Alaska highway gas pipeline, but finds his colleagues in cabinet reluctant to acquiesce for the reason that a decision in favour of commencement at this time could produce the mistaken impression in western Canada that the government is softening its approach to the west, and that a discovery of the real facts relating to the pipeline has been made and taken into account.
1 move, therefore, seconded by the hon. member for Bow River (Mr. Taylor):
That the House instruct the hon. senator to render his decision respecting the Alaska highway gas pipeline in accordance with instructions and advice offered to him by the Leader of Her Majesty's Loyal Opposition.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
[Stage Direction]
July 14, 19:

Mr. Doug Anguish (The Battlefords-Meadow Lake):: Madam Speaker, I rise, under the provisions of Standing Order 43, to ask the unanimous consent of the House to deal with a matter of urgent and pressing necessity.
Madam Speaker, the children of the Thunderchild Indian Band, near Turtleford, Saskatchewan, up until the summer holidays had been attending a school which has been condemned both by provincial fire officials and federal health offices since 1974. Not 100 feet from the school there is an open cesspool. I am sure hon. members opposite and the President of the Treasury Board would not want their children to fall into a cesspool at the school they attend.
In spite of these severe hazards, and the fact that money for a new school has been approved in the Indian Affairs capital budget for this year, Treasury Board has not consented to release the funds, which means these children will face these conditions for at least another two years. I therefore move, seconded by the hon. member for Regina East (Mr. de Jong):
That this House instruct Treasury Board to make the budgeted funds available so that the work necessary to build a new school may begin immediately.


Madam Speaker:: Such a motion requires the unanimous consent of the House. Is there unanimous consent?
[DOT] (MIO)


Madam Speaker:: Such a motion requires the unanimous H consent of the House. Is there unanimous consent'.'	H


Some hon. Members:: Agreed.	*


[Stage Direction]
Motion agreed to.	H

[Stage Direction]
RESTRICTED USE OF AIR-CONDITIONERS IN MINISTERS' CARS * MOTION UNDER S O. 43	*
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker. H I rise, under the provisions of Standing Order 43. to propose a H motion of urgent and pressing necessity.	H
In view of the pressing need for gasoline conservation in this country, in view of the fact that Canadian gasoline consumption increased 2 per cent in the first five months of this year, compared to a decline in most other countries, and in view of the increased consumption of gasoline caused by the use of car air-conditioncrs, I move, seconded by the hon. member for Burlington (Mr. Kempling):

That this House instruct all ministers to put the long-term interest of this country ahead of their personal comfort and advise their drivers that it is not mm necessary to leave the air-conditioners of their cars running for long periods m& while they foul the atmosphere as a result of interminable cabinet meetings this Wm
summer.


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HUMAN RIGHTS
Hon. Marcel Lambert (Edmonton West):: Madam Speaker, under the provisions of Standing Order 43, I seek the unanimous consent of the House to introduce a motion dealing with a matter of urgent and pressing necessity.
The motion concerns Danylo Shurnuk, who is considered by many to be the longest-term political prisoner in the Soviet Union. Mr. Shurnuk, whose nephew lives in the constituency of Okanagan North, whose member joins me in sponsoring this motion, is 65 years of age and serving the last two years of a ten-year sentence in a special regime corrective labour colony to be followed by five years of internal exile.
In view of the fact that he is a man suffering extreme ill health, this House passed a similar motion on November 3, 1978. I move, seconded by the hon. member for Parkdale-High Park (Mr. Flis):
That this House reiterates its deep concern and strongly urges the Soviet Union to immediately release Danylo Shurnuk from imprisonment.


PROJECTS IN GASPE AND ATLANTIC CANADA-MOTION UNDER S.O. 43
Hon. J. Robert Howie (York-Sunbury):: Madam Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity for which I seek the unanimous consent of the House.
Whereas the December 11 budget provided $50 million for development projects in the Atlantic provinces and the Gaspe, and whereas this additional $50 million would give DREE the largest budget in its history, and whereas the Minister of Regional Economic Expansion has indicated his department is not sufficiently funded to meet the development needs of Canada's underdeveloped regions, I move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That the government be directed to immediately implement the provisions of the December 11 budget, making an additional $50 million available for regional development projects in Atlantic Canada and the Gaspe, and that these projects be identified by the minister responsible for Regional Economic Expansion.

*
July 14, 1980


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL ANTHEM
[Stage Direction]
PROVISION OF COPIES OF PROCLAMATION TO MPs FOR

Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. For years, members of Parliament have been able to encourage knowledge of the fundamental rights of Canadians by distributing copies of the Bill of Rights, and have been able to promote the use of the Canadian flag by sending out copies of that proclamation.
Since "O Canada" has now been confirmed as our national anthem by the passage of Bill C-35 on June 27 and by proclamation by the Governor General on July 1, I believe members of this House will want to promote the widest possible enthusiasm for the anthem by sending copies of the proclamation to schools, organizations and individuals in their ridings, I therefore ask leave to move, seconded by the hon. member for Simcoe South (Mr. Stewart)-and I am sure the hon. member for Winnipeg North Centre (Mr. Knowles) would second it if he could by the rules-


Mr. Knowles:: Hear, hear!


Walter David Baker: That Madam Speaker undertake to arrange the printing of facsimile copies of the proclamation officially making "O Canada" our national anthem, and that these facsimiles be available under suitable conditions to members of Parliament for distribution to the people of Canada.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


An hon. Member:: The NDP said "No".


KU KLUX KLAN
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, I rise, under the provisions of Standing Order 43, to move a motion which I very much hope will have the unanimous consent of the House.
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Whereas the Ku Klux Klan has opened an office in the east end of Toronto, and whereas this group has throughout its history preached doctrines of race hatred and religious bigotry and has engaged in systematic violence and intimidation against thousands of groups and individuals, I move, seconded by the hon. member for Skeena (Mr. Fulton):
That this House reaffirms its commitment to Canada as a multicultural and multiracial society, whose foundations are political, racial and religious tolerance, places on record its opposition to everything the Ku Klux Klan stands for, and its conviction that this organization is not welcome anywhere in Canada, and calls upon all levels of government to ensure that all Canadians are protected from racial attack, harassment and intimidation wherever and whenever they occur and prosecute the perpetration of these attacks with the full force of the law.


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


Some hon. Members:: Agreed.


Madam Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.


Hon. Sinclair Stevens (York-Peel):: Madam Speaker, in the absence of the Minister of Finance, perhaps I could direct my question to the Prime Minister. My question is, again, with respect to the proposed deindexing with regard to which this government has been doing some kite-flying.
In view of the fact that the OECD, in their current publication, are anticipating that the real growth in this country will be a negative, in the current six months, of 1 per cent, or $2.5 billion, and bearing in mind that Dr. Stewart, before a committee of this House, testified that deindexing will increase unemployment by .3 of 1 per cent, or perhaps 30,000 more people will be out of work in this country, will the Prime Minister indicate why his government persists in studying the possibility of deindexing personal income tax in this country, and goes to the extent of having the Parliamentary Secretary to the Minister of Finance in effect defending deindexing before an audience in Toronto?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, the parliamentary secretary took exactly the same view as the minister, myself and other members of this government in saying that deindexing was a technique of a budgetary nature and it was being studied. 1 do know if it is
2848

July 14, 1980
Oral Questions
continually being studied. I think it has been studied and now the minister and the officials are waiting for a time, when budgetary preparation comes, to raise it with their colleagues or not to raise it with their colleagues.
If the term "kite-flying" used by the hon. member applies, it is to the opposition which is constantly raising this question as though it was something that was with us. We do not know. We are in exactly the same position the opposition was in when it formed the government, in looking at various budgetary techniques. We have the admission that they also looked at that one. We did not make-


Walter David Baker: And rejected it.


Pierre Elliott Trudeau: We knew on budget night that it was rejected, and the opposition will find out on budget night whether we reject it or not. Certainly, when it was admitted that they were studying this technique, we did not spend all our efforts and energies telling them to stop studying. It is something that they looked at, and we are interested in the net results. When the budget comes down, the opposition will have every chance to say whether it agrees with the budget or not.


Sinclair McKnight Stevens: The Prime Minister could stop this discussion today by simply saying they are ruling out any suggestion of deindexing. He made it abundantly clear that they are considering it. He asks, what is the cost? The cost is $1.5 billion as far as federal revenues alone are concerned.
My supplementary question is this: because at the federal level they are persisting in their study of deindexing federal income tax in the country, has he at least consulted the provinces, which have tremendous revenue at stake with respect to this question; and if not, does he propose to do so before introducing this in his coming budget?


Pierre Elliott Trudeau: Madam Speaker, the hon. member enjoined us to stop studying this matter. I will make a proposition to him and to the members of his party: we will stop studying it if they stop talking about it.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Madam Speaker, when the Prime Minister says something like that, you can be sure it is going to be in the budget, whenever the budget comes down. Speaking about the budget, last Thursday, in reply to a question put by myself as to when we might expect a budget, the Prime Minister stated:
We shall try to do as well as the opposition in presenting a budget within a given date of the day on which we were elected.
Madam Speaker, I checked that out. It took us 29 weeks- 203 days-to bring in a budget. This means that unless he is going to fail in what he said he would do last Thursday, his budget has to be in by September 8. Can we have that commitment today?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: 1 indicated we would attempt to do that, and we shall.


POSSIBILITY OF DE-INDEXING-EFFECT ON LOWER INCOME CANADIANS
Mr. Bill Wright (Calgary North):: Madam Speaker, my question, too, is directed to the Prime Minister. In a statement before the finance committee last week, Dr. Ian Stewart, the deputy minister of finance, stated that the poor would be more affected by deindexing than would those in higher income brackets. Considering this, how can the government be contemplating such an onerous move?


Pierre Elliott Trudeau: Madam Speaker, I know we are all aware of the rules which preclude us from commenting on what happens in committee. I understand that even the opposition is aware of these rules.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: 1 think we now see the reason for which the rules are thus conceived; it is because ministers, officials, appear before committees; in this case the deputy minister of finance has appeared before a committee and tried to answer questions of a theoretical nature, because in practice he does not know what the budget will contain because even the government does not yet know, and now, in a sense he is being quoted in the House for being frank and candid and saying, yes, there are many ways of levying taxes, and this is one of them.
I repeat, the government's position has been that until the budget is finally decided, the Minister of Finance and myself, let alone the deputy minister of finance, do not know whether there will be deindexing or not.


Frederick William Wright: My supplementary to the Prime Minister is this: someone said in the finance committee meeting that everything is fair game in looking at indexing, whether it be personal and corporate taxes, whether it be sales and excise tax-


Some hon. Members:: Order.


Frederick William Wright: -whether it be the consequences of various forms of deindexing. Does the Prime Minister agree with this statement that someone made? 1 am not allowed to quote him.


Pierre Elliott Trudeau: I do not understand the question. Madam Speaker, I will give the hon. member another chance.


Frederick William Wright: Dr. Stuart also said in the finance committee meeting that everything is fair game from the government's standpoint in considering deindexing, whether it be sales taxes, whether it be personal income taxes, whether it be corporate taxes or the various consequences of deindexation. Does the right hon. gentleman agree with that statement?
July 14, 1980

Mir. Trudeau: Yes, Madam Speaker. I do not know if "fair game" is the proper expression, but I have told the House many times, as has the minister, that when you are preparing a budget, you have to look at the panoply of instruments which are available to you. Sales tax is one, indexing is another, and direct taxes is another.


Mr. Nielsen:: Petroleum taxes is another.


Pierre Elliott Trudeau: Petroleum taxes and excise taxes. If the minister was not looking at all these instruments to determine which would help the economy best, at least cost to the people, then he would not be doing his job either.


Sinclair McKnight Stevens: Cut your spending; that is all you have to do.


INCREASE IN PRICE OF ENERGY PRODUCTS-DETRIMENTAL EFFECT ON CONSUMERS
Mr. Edward Broadbent (Oshawa):: Madam Speaker, 1 have a question for the Prime Minister. The Prime Minister knows that the 2.5 cents per gallon increase imposed by the government on Friday on consumers of gasoline in Canada involves multinational oil companies in tar sands projects, and guarantees virtually the world price to these companies.
Considering that Imperial Oil, in its application for the Cold Lake project, said specifically-and not very long ago-that $14.75 a barrel would be sufficient to make that project profitable, how does the government now justify imposing the $1 million a day additional charge on Canadian consumers which is involved in bringing the price up to $36 a barrel? How has the government reached its estimate? Why is it so charging Canadian consumers?


Pierre Elliott Trudeau: Madam Speaker, there are two questions involved in the problem posed by the Leader of the New Democratic Party. The levy is not there in order to help the multinationals; the levy is there to ensure that Canadian consumers of oils produced from the Syncrude project are compensated for international prices.


An hon. Member:: What?


Pierre Elliott Trudeau: It is for the same reason that we have oil compensation payments for oil which is imported from abroad. We also have oil compensation payments for oil which is brought out of Syncrude because of its higher cost. That has been the policy which was established by this government when it was the government in the past: I think it was some five years ago. So much for the meaning of the levy.
As to why this is happening now, the reason is that the new policy which this government fought for during the campaign, and which it is attempting to negotiate with the provinces, has not yet been adopted, but I can assure the Leader of the New
Oral Questions
Democratic Party-and he knows this-that when we bring it in, our policy is a blend of prices, and that there is no intention to pay world prices for oil which does not cost anything near world prices. When that times comes, I hope we will have the support at least of the New Democratic Party, which is doubtful because it is usually on all sides of the fence.


John Edward Broadbent: Madam Speaker, I can tell the House that we are listening to the master on that one. The Prime Minister was vociferous and active in the campaign in saying that the Liberal pricing policy on oil would be that the replacement cost includes both the cost of production and a reasonable profit, if I understood the Liberals clearly on something. The Prime Minister is nodding in agreement.
If this is still the policy, could the Prime Minister tell us what the replacement cost is for tar sands oil, and where he got this estimate; or does the government have no criteria at all for the tax it imposed on Friday, other than giving unneeded additional profits to the multinationals involved?


Pierre Elliott Trudeau: Madam Speaker, I thank the hon. member for describing me as a master. I have not been masterful enough in explaining what I thought was a rather simple point. We are presently under a pricing policy which had been established by this government some years ago.
During the campaign we indicated that we would want to change this pricing policy. We are in the process of attempting to change it now by discussions mainly with the oil producing provinces. We have not yet been successful. Until we are successful, we are acting under the old policy which made some conditional commitment to pay to Syncrude world prices. I repeat that we have not yet been successful in bringing in our new policy because the debate and discussions are going on with the provinces.
1 am saying that when the new policy is brought in, we hope with the agreement of the provinces, then the kind of preoccupation mentioned by the hon. member will not be justified because we will have a pricing policy which we hope will bring the NDP in agreement with us. I understand that during the campaign we were saying more or less the same thing on this subject. Even the Tories concede that. I hope that members of the NDP will recognize in all humility that they were following us during the campaign.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Madam Speaker, we all notice on this side that the hon. member for Broadview is smiling broadly. I think he is looking forward to the prospect when his party will ally themselves with us in this debate.


Some hon. Members:: Hear, hear!


John Edward Broadbent: The Prime Minister did, indeed, hear me correctly when 1 described him as a master, but he did not hear the rest. I said he was the- master of the non-answer and vanity, and he has demonstrated both here today.

July 14, 1980
Oral Questions


Some hon. Members:: Oh, oh!


John Edward Broadbent: In all humility, as the Prime Minister would say, I would like to suggest that he has not answered the question. Would he, in his final answer, tell the House of Commons and the people of Canada what was the criterion used in justifying the $1 million a day increase which was imposed on the people of Canada on Friday, in light of what I thought was his straightforward commitment during the campaign that the pricing policy would be based on replacement cost, which is the cost of production and a reasonable profit? That must have been the criterion which was used in arriving at the figure on Friday?
I should like to ask him, in that context, why he does not use the force majeure provision which the government can use under existing authority to insist that the original commitments made by the oil companies to produce oil at their submitted prices be adhered to and that the government not provide windfall profits which it is moving toward.


Pierre Elliott Trudeau: Madam Speaker, I am really sorry that I have not been able to make the Leader of the NDP understand what I have been saying. I will make an effort, and then accept that his judgment is justified that I have been unsuccessful. We have not yet brought in, legislated or announced the new policy for which we fought during the election: it has not been done yet.


An hon. Member:: You do not know what it is.


Pierre Elliott Trudeau: We are trying to do it-


An hon. Member:: Piece by piece.


Pierre Elliott Trudeau: -not by applying the force majeure clause, as the NDP suggests, but with the agreement of the provinces of Alberta and Saskatchewan. In the meantime, we would prefer not to use force majeure or unilateral clauses to impose our will on them.


An hon. Member:: What about the oil companies?


Pierre Elliott Trudeau: We are trying to get agreement on the new policy. Until that new policy is agreed upon, I regret that we are not carrying out our election promise. But I hope that within a short period of time we will be carrying it out, and I am saying that there may be some disturbance in the country when we do it. I hope that at that point we will have at least the courageous support of the NDP.


Some hon. Members:: Hear, hear!


INCREASE IN PRICE OF ENERGY PRODUCTS-ACTION TO CUSHION IMPACT ON CONSUMERS
Hon. Bill Jarvis (Perth):: Madam Speaker, my question is also for the Prime Minister. Perhaps he could help me to educate the Leader of the NDP, who believes that last Friday's increase only affects gasoline, whereas it affects all petroleum
products, including home heating oil and electricity generation.
As the Prime Minister knows, the government's price increase of last Friday will have a direct impact upon those Canadians who can least afford such an impact, namely, the poor, the aged and, in a regional sense, Quebec and Atlantic Canada which rely so overwhelmingly on oil for both home heating and the generation of electricity. Setting aside, temporarily, the questionable legality of the increase of last Friday, will the Prime Minister acknowledge that the lowest 20 per cent of Canadian income earners are, in fact, the most vulnerable to home heating oil increases? Consequently what measures does his government propose to cushion the impact upon these defenceless Canadians?


Pierre Elliott Trudeau: Madam Speaker, that argument is a little more difficult to understand, coming from the Conservative party and with the vocal support of the hon. member for Kingston and the Islands, because twice when the Tories formed the government they increased that levy, once on August 30 and once on November 1-


An hon. Member:: By 75 cents.


Pierre Elliott Trudeau: Yes, by 75 cents. That is exactly the point. Now they are objecting to an increase which they perpetrated twice without thinking of the poor, the lame and the halt, and so on. I suggest that they then understood the reason for this, and they understand it now. They are just playing games.


Some hon. Members:: Hear, hear!


William Herbert Jarvis: If the Prime Minister wants to talk about games, will he admit that he has embarked upon the strategy of a series of price increases, be it excise tax, refinery tax, special levies and heaven only knows what else, particularly when Parliament is in recess, and will he give us his firm undertaking that the policy will not be implemented, and that the policy will result in higher energy prices than was ever proposed in the Crosbie budget; and he knows it full well?
Will he give us an undertaking that those measures will not be implemented to the detriment of the poor, the senior citizens and those in regions of the country which rely so heavily on oil, without corresponding measures of compensation or tax credits which will minimize the growing disparity between the groups I have mentioned and others in our society?


Pierre Elliott Trudeau: Madam Speaker, we had already anticipated it, in conformity with our election promise, when we had this House adopt the $35 a month increase in the guaranteed income supplement. This was a good beginning.


Some hon. Members:: Hear, hear!
July 14, 1980


NORTHERN PIPELINES
Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, my question was originally directed to the Minister of Energy, Mines and Resources, but since he is probably resting up after his activity last Friday I should like to direct it to the Prime Minister.
Apparently Senator Olson, the Minister of State for Economic Development, in an effort to get his pipeline proposal through, has called for a write-in campaign by Alberta residents in order to assist him in persuading cabinet with respect to this proposal. The poor fellow needs help.
I should like to ask the Prime Minister, so we can better understand what kind of write-in Senator Olson wants to encourage out west, whether he would tell us what Senator Olson's proposal is with respect to the pipeline.


Pierre Elliott Trudeau: Madam Speaker, with regard to the Minister of Energy, Mines and Resources, I can assure the hon. member that the minister is not resting: he is meeting in Victoria, B.C., with his counterpart.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: As to the question concerning Senator Olson, I have not heard what he has said. I have a clipping in front of me, according to which he expressed surprise that the Tory opposition, and particularly their leader, is not supporting this project. I am not sure whether or not he is right, because I do not think anyone knows what the Tories think on this. But apparently Senator Olson was telling Albertans that it would be useful if they helped their members of Parliament-of which, unfortunately, we do not have any on this side-to make up their minds on this, rather than just to criticize the government if they did and if they did not.


Some hon. Members:: Hear, hear!


Ramon John Hnatyshyn: Madam Speaker, I think that if the Prime Minister wanted to get some members from western Canada, he would not be sending the Minister of Energy, Mines and Resources to Victoria. The Prime Minister has raised the question of getting representation from western Canada. If he is really serious about it, maybe he would come clean with the House of Commons and the people of Canada as to what the policy is about the pipeline, and what position the government takes with respect to the pre-build.
If the Prime Minister really wants to carry out the proposals made in such glowing terms in the Speech from the Throne about consultation with western members, will he arrange a meeting between Senator Olson and western members of Parliament to discuss the pre-building of the pipeline, so we can give him some assistance in getting this matter to cabinet?


Pierre Elliott Trudeau: I will be happy to ask the senator to arrange such a meeting. I think it would be helpful if we had some
Oral Questions
unified view from the Conservative opposition as to what they think on this. The hon. member for Yukon says we have had it.


Erik Nielsen: Yes, since 1977.


Pierre Elliott Trudeau: He wants it. I know you people have had it; but I am not sure if the hon. member is referring to the policy.


Erik Nielsen: The policy.


Pierre Elliott Trudeau: Madam Speaker, then I think I can assume from what the hon. member for Yukon said that the Conservative party stands undividedly behind the pre-build. I see them all indicating "Yes".


Miss MacDonald:: Where does the government stand?


Pierre Elliott Trudeau: So I take this as a matter of record; they are all nodding their assent.


Walter David Baker: Where do you stand?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: If hon. members bear with me, I will tell them-


Mr. Paproski:: Tell us where you stand.


Pierre Elliott Trudeau: That is what I am going to do; just hold your horses. It may take a little bit of time, but 1 will tell them exactly where we stand.


Some hon. Members:: Order.


Pierre Elliott Trudeau: The law passed by this Parliament in the summer of, I believe, 1978 indicated that we should not proceed with any part of the pipeline unless it was an integrated part of the whole. That is still the position of this government. However, we do not think that one is going against the spirit or the letter of that law by building a section of that pipeline, provided one has the guarantees that it will be part of the whole. That is exactly the position of this government, that one can proceed in stages-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I do not think we have the support of the NDP on this. We are losing them on this.


Bob Rae: No.


Pierre Elliott Trudeau: At this point we are working with the Tories.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I think I can say-


Madam Speaker:: Order, please.

July 14, 1980
Oral Questions


Pierre Elliott Trudeau: I think 1 can say that we are also working with the United Steel Workers of America.


Ramon John Hnatyshyn: And we are working with the devil!


Some hon. Members:: Oh, oh!


Madam Speaker:: Order, please. The hon. member for Vancouver-Kingsway.


Pierre Elliott Trudeau: 1 did not finish, Madam Speaker.


Madam Speaker:: if the right hon. Prime Minister had not finished his answer, then 1 will allow the Prime Minister to finish his answer.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: So we have the policy that the pipeline can proceed in stages, provided we have the guarantee that that stage will be followed by the completion of the full pipeline. The sole purpose of the government at this time is to ascertain whether we have these guarantees or not. This is a judgment call. We are trying to get increasing evidence before-


An hon. Member:: Bring it before Parliament.


Pierre Elliott Trudeau: -proceeding with this decision. The nature of that evidence, once again, will be a judgment by this government-hopefully, as I understand it now, supported by the Conservative opposition-that we have or do not have the sufficient guarantees. That will be the decision taken by cabinet, I believe, on Thursday of this week when we will be weighing the evidence to make a decision as to whether a pre-build will prevent the building of the whole thing or, on the contrary, will encourage it.


Some hon. Members:: Hear, hear!


ALASKA GAS PIPELINE PRE-BUILD SECTION-EFFECT ON ENERGY SECURITY
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, I understand that ironclad commitments now have become judgment calls; that is a change. My question is directed to the Prime Minister and concerns the pre-build.
Last week, the Prime Minister said that the pre-build would not go ahead if it threatens Canada's future energy security; those were his words. Is the Prime Minister aware of a backstop agreement dated October 25, 1979, whereby Trans-Canada PipeLines Ltd. guaranteed that Canadian gas will flow through the eastern pre-build, actually, for 15 years if Alaskan gas is unavailable? Would he not agree that this agreement really is a threat to Canada's energy security?


Pierre Elliott Trudeau: Madam Speaker, the hon. member is quoting from a document of which I do not have any knowledge. I know the pre-build as presented to cabinet would be a scheme whereby there would
be a guarantee of some seven years' flow of gas, after which there would be absolutely no guarantee that Canadian gas continues to flow unless the whole thing has been built.


Ian Gardiner Waddell: Madam Speaker, may I respectfully suggest that before cabinet makes a decision, the Prime Minister should have a look at these documents? They are a matter of public record.
The backstop agreement means not just more exports of gas-which it means-more than the Prime Minister just said, but since they guaranteed the throughput, it could mean the bizarre situation that Canadian gas destined for Ontario may now have to go through the United States system and back to Ontario. That is bizarre. A government fell 25 years ago over that.


Some hon. Members:: Question.


Ian Gardiner Waddell: In light of this report, the questions raised today and the statements the Prime Minister just made, is the Prime Minister prepared to have a special debate here in the House of Commons on the pre-build issue?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Madam Speaker, of course 1 will make sure that the minister and the department are aware of the document to which the hon. member referred. If it is, as the hon. member said, a public document and not one which he just got privately from his capitalist friends, I am sure the minister has already seen it.


An hon. Member:: Husky Oil.


Pierre Elliott Trudeau: I just do not happen to have the answer myself. All I can tell the hon. member is that any undertaking made by the government will not be bound by some private hopes or aspirations of friends of the hon. member.


NATIONAL DEFENCE
Hon. Allan B. McKinnon (Victoria):: Madam Speaker, my question is also to the Prime Minister, but on a different subject. Yesterday, on the television program "Question Period'', the Minister of National Defence stated a major change in Canada's defence policy with regard to nuclear weapons and the neutron bomb. The minister stated:
I think we have to prove ourselves maybe a little bit wiser to build up a kind of deterrent, and the deterrent at the moment is not our tanks, our navy or our planes. I think the deterrent now is to try to find sophisticated weapons like nuclear weapons.
He went on to name the French neutron bomb as an example. Will the Prime Minister tell the House whether the minister was expressing government policy when he advocated the development and deployment of neutron weapons?
July 14, 1980


Pierre Elliott Trudeau: Madam Speaker, I have just received a transcript of the statement by the minister. I apologize, but I have not had time to have consultations with the minister. The way I read the statement, he is using-as did the hon. member-the first person plural, "we". It is not clear to me whether he is talking about Canada or whether he is talking about the west in general. I rather think the latter, because he is talking of nuclear deterrents. The House knows-we all know-that Canada does not have any nuclear deterrents and that we have always opposed them.


USE OF NUCLEAR WEAPONS BY CANADIAN FORCES IN NATO
Allan Bruce McKinnon: Madam Speaker, the Prime Minister got to the point right at the end: we have always opposed them and the Prime Minister has always opposed them. He has opposed countries such as France arming itself with a neutron weapon. After the display yesterday, I can well understand why the Prime Minister feels he needs a special adviser in National Defence other than the Minister of National Defence.
Perhaps I could ask the minister my supplementary question. If the minister succeeds in persuading his NATO colleagues to develop nuclear weapons of a sophisticated nature, including the neutron bomb, is it the minister's intention that the Canadian forces in Europe will be equipped with them, or does he wish us to act like Pontius Pilate, keeping our hands clean but encouraging our allies to do otherwise?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, it is true; this conversation occurred during the "Question Period" discussion on television. Obviously, I was talking about the alliance and about the west, because the question was about what kind of deterrent would be credible if by chance we wanted to promote a peaceful means for disarmament and limitation of arms.
I said at the time that the only way we could have a very efficient deterrent would be to have sophisticated weapons by which we could prove to the Russians that we are serious when we want to talk about peace and disarmament, and that we will talk peace and disarmament from strength, not from weakness.


POLICY ON NATO POSSESSING NEUTRON BOMB
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, my supplementary is to the Prime Minister and it follows on the comments made by the Minister of National Defence.
It seems to me that the Minister of National Defence, in his answer, once again reiterated his personal support for such sophisticated nuclear weapons as the neutron bomb. I would like the Prime Minister to state very clearly that there is no interest on the part of the government to support in any way the NATO alliance achieving the neutron bomb.
Oral Questions
The Prime Minister stated on June 27, in Sweden, in response to a question by a Canadian journalist, that he would vigorously protest to France the possibility of that country using a neutron bomb. It is my understanding that no such protest has gone forward from the Government of Canada. Given the statements of the Minister of National Defence, would the Prime Minister tell the House whether or not he has now gone back on that commitment; or, if he intends to send that protest, when will it be done?


Pierre Elliott Trudeau: Madam Speaker, the hon. member refers to a statement I made in answer to a question while I was in Sweden. The answer was conditional upon the question being justified in fact. I said if, in fact, France has tested a neutron bomb, we would protest.


Daniel Joseph MacDonald: It has.


Pierre Elliott Trudeau: The hon. lady says that we have not protested.
I say, in fact, we have no evidence that France has tested a neutron bomb. The statement by the President of France is to the effect that they now have the wherewithal or the know-how to proceed to another stage where they could build a bomb and test it. My information is that France has not tested such a bomb.


Daniel Joseph MacDonald: Madam Speaker, I go back to the speech made by the Prime Minister to the special session on disarmament, of the United Nations, in which he very strongly endorsed the decision of the President of the United States not to proceed with a neutron bomb. At that point the United States had not tested such a bomb either.
Because of the Prime Minister's equivocation on this question at the moment, will he tell the House whether or not he will undertake to protest to France the statement made by the President of France, that they have the capability and that they might proceed in that matter? Would he protest to the government of France and ask that they not proceed?


Pierre Elliott Trudeau: Madam Speaker, in the speech which I made at the United Nations, to which the hon. member has referred, I advocated in these matters of research and development the strategy of suffocation. That is still the policy of this government. We are hopeful that all the major powers will reach some form of agreement, perhaps in the international forum, whereby all of them will cease and desist from developing new techniques of nuclear devices. That is our position.
I have not protested research in the laboratories of France, the United States or the Soviet Union about various studies and aspects at which they are looking. However, it is the policy of the government that, hopefully, we will use the international forum to have these countries cease this type of, not experimentation because there has been no experimentation yet, but of developing new and more sophisticated weapons. That has been our policy. But it has not been the policy of our government nor, I believe, of the Conservative government, to protest what might or might not be in progress at the research

July 14, 1980
Oral Questions
level before even the knowledge of what they are doing, in fact, has come to us.
* *
*


NEW HORIZONS PROGRAM
Mr. Tom Cossitt (Leeds-Grenville):: Madam Speaker, my question is for the Minister of Supply and Services. It arises from a statement made July 2 by the Minister of National Health and Welfare who stated, in effect, that cheques for New Horizons Grants would be transmitted to the recipients through the member of Parliament for the ridings involved, regardless of politics, and the minister gave her assurance that no politics whatsoever had been involved in New Horizons grants.
Will the minister tell the House whether or not his department will be forwarding New Horizons cheques through each member of Parliament to recipients, according to the policy decision announced by the Minister of National Health and Welfare? In other words, have such arrangements been completed; and if not, will the minister be talking to his colleagues about completing such arrangements?


Hon.   J.-J. Blais@Minister of Supply and Services: Madam Speaker, there has been no conversation to date. I will look into the matter and report to the hon. member.


REGIONAL ECONOMIC DEVELOPMENT
[Stage Direction]
DISTRIBUTION OF PROJECT GRANTS THROUGH MPs
Thomas Charles Cossitt: Madam Speaker, I would like to direct my supplementary question to the Prime Minister, who I am sure-as he is the Prime Minister-will be fully aware of all new government policies.
In view of the new policy announced by the Minister of National Health and Welfare on July 2, that New Horizons cheques will be forwarded to recipients through their members of Parliament, regardless of political affiliation, could the Prime Minister tell the House whether this will apply to any other type of government grant, such as DREE, employment programs, Open House Canada, and so on; and if not, will it only apply to New Horizons grants or any other grants where the minister concerned is caught with his or her political hand in the patronage cookie jar?


Pierre Elliott Trudeau: That sounds like an argument, Madam Speaker.


NATIONAL DEFENCE
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, my question is to the Prime Minister. It stems from statements made by the Minister of National Defence which were touched on a little earlier.
The minister said, "You talk lately about the French proton bomb" and went on to say, in apparent reference to the high-radiation neutron bomb France recently said it had tested, "I know a lot of people don't agree with me, but it is the only deterrent we have at the moment". Those are very forceful and clear statements.
Judging from the Prime Minister's response to questions asked by hon. members of the loyal opposition a few moments ago, will he stand in the House and state clearly and unequivocally that he does not support the ludicrous statement uttered by the Minister of National Defence, that this is the only deterrent we have, and that the Minister of National Defence was not speaking on behalf of the government when he made that statement?


Pierre Elliott Trudeau: Madam Speaker, I thought that in answer to the first question I had made it clear that my reading of the quote I saw of the minister's words was that he was not speaking on behalf of Canada or its defence policy.


Thomas Charles Cossitt: You do answer questions now and then.


Pierre Elliott Trudeau: He was saying "we", in the sense of the alliance believing certain things, and that within the alliance we have SALT, the Strategic Arms Limitation Talks. Hopefully, it will extend to all forms of nuclear devices, certainly including this one. That is my understanding of what the minister said.
In so far as our policy is concerned, I also indicated that we had opposed proliferation in the past, we had signed the Non-Proliferation Treaty, and we have been active in the Nuclear Test Ban Treaty. We tried to extend that not only to atmospheric testing but also to underground testing. That remains our policy. We denuclearized Canadian forces.


Mr. Blaikie:: What is the minister saying?


Pierre Elliott Trudeau: I am talking about the Government of Canada.


William Alexander (Bill) Blaikie: What is he talking about?


Pierre Elliott Trudeau: I repeat, I believe that the minister was talking about the western alliance, of which the United States is a member, and they are involved in the SALT talks-I repeat, I have not had a chance to discuss the matter with the minister. I saw this text, which certainly would not indicate that "we" refers to "we, the federal government." If it refers to "we, the members of the alliance", it may be an opinion which he is expressing.


Bob Rae: Make up your mind.
July 14, 1980


Pierre Elliott Trudeau: It is not the policy of the federal government to propose to encourage either the testing or development of further nuclear weapons.


Mark Willson Rose: Madam Speaker, the Prime Minister's statement almost bristles with hundreds of supplementary questions. I take it that the Prime Minister has repudiated the statement made by the Minister of National Defence, that the neutron bomb is our only deterrent. Assuming that that is what the minister said, does the Prime Minister clearly intend to dissociate himself from that statement and immediately protest the development of the neutron bomb, if that is in fact what is taking place in France at the moment-immediately and as strongly as possible?


Pierre Elliott Trudeau: Madam Speaker, I just answered the second part of the question of the hon. member for Kingston and the Islands.
On the first part of the question, I repeat very clearly-this is my second to last answer-that it is not government policy to advocate any form of nuclear development of new arms or further deployment of old arms.


An hon. Member:: You said that about deindexing.


Pierre Elliott Trudeau: I have said that many times, Madam Speaker. Hon. members know that is a policy of the government. They know that this government denuclearized our NATO forces in Europe-the Canadian component of our nuclear forces. It is our government which did that.


Ramon John Hnatyshyn: You did more than that.


Pierre Elliott Trudeau: It is our government that is engaged in the purchasing of the F-18, which will not be a nuclear-armed airplane: that should be clear.


NORTHERN PIPELINES
Walter David Baker: Madam Speaker, I should like to put one question to the Prime Minister relating to a round of questions put earlier on the pre-build of the pipeline. The Prime Minister seemed to indicate that the government was looking at the question of guarantees, but he also indicated in his answers a rather close proximity to the date of decision.
Can the House understand that cabinet will be making the decision this week, and that there will be an announcement with respect to the cabinet decision prior to Friday?


Pierre Elliott Trudeau: Madam Speaker, that is my understanding of the timetable the minister has suggested. In his absence, I would not want to give a
Privilege-Mr. Domm
firm undertaking on his part. I can say, however-as 1 said earlier-that as of now we are planning to reach a final decision in cabinet Thursday.


RAILWAYS
Mr. Jim Peterson (Willowdale):: Madam Speaker, my question is directed to the Prime Minister. It concerns a proposal made at a recent joint meeting of the cabinet ministers of British Columbia and Alberta. As you are aware, Madam Speaker, the proposal concerned those two provinces taking control of the rail lines of CP and CN for everything west of Winnipeg.
In view of the importance of these two rail lines to the economic future of all Canadians, what is the government going to do to prevent any further provincial incursions into this type of federal jurisdiction?


Erik Nielsen: Double-track.


Mr. Andre:: One track each. .


Pierre Elliott Trudeau: Madam Speaker, I imagine that these proposals are being tentatively developed by the provinces with a view to the constitutional debates which have begun and which are being attended by the Minister of Justice.
I can assure the hon. member for Willowdale that under no circumstances will we give up federal jurisdiction on interprovincial transport and on railways.


PRIVILEGE
Hon. Francis Fox (Secretary of State and Minister of Communications):: Madam Speaker, 1 rose last week, as you will recall, to speak to this question of privilege but in the absence of the hon. member for Peterborough (Mr. Domm) I acceded to the suggestion made by the House leader for the opposition to await the presence of the hon. member for Peterborough in this House. I should like to provide you, Madam Speaker-


Mr. Bill Domm (Peterborough):: Madam Speaker, it is my understanding, and I stand to be corrected by the Chair, that when a question of privilege is brought before this House there is ample opportunity for anyone in this House to address that subject.
When I brought the question of privilege to the House about there being different classifications of members of Parliament and said that I had been given false documents from the
2856

July 14, 1980
Privilege-Mr. Domm
ministry in question, at that time he responded to my charges on the question of privilege after three or four members had spoken it. I stand to be corrected on the numbers.
At that time the minister admitted that maybe there was a mistake made. He also said he would look into my question of privilege. I supplied all my documents and all the foundation for argument to the Chair through Hansard. That is recorded in Hansard of July 3, when I rose on the question of privilege.
My concerns at this time, as a result of the minister rising on this question of privilege, are twofold. First, I would ask the Chair if it is customary that debate can follow while the Speaker of the House is deliberating on the motion I proposed, namely that this matter of discriminatory treatment of members of Parliament by the Department of Secretary of State through the issuance of false documents to me by the department and through the misuse of the citizenship courts for political purposes, be referred to the Standing Committee on Privileges and Elections.
If Your Honour should decide that the minister may again bring the subject up in the form of debate with new information of further elaboration on statements already made, then I would request that the eight or nine members who spoke to this question on July 3 be given the same opportunity. This would allow all members of the House to be treated equally and to elaborate further on the statements they gave or present any new information that might have come to their attention as a result of my question of privilege.
Despite the fact that this is an opposition day and that I would not like to see the time diluted by further debate on this subject while we are awaiting the Chair's decision, I suggest that as there obviously is to be debate, as evidenced by the minister offering further information, then that is all the more reason my question of privilege claiming that there are two classes of members of Parliament in this House be referred to the Standing Committee on Privileges and Elections. At that time any member of the House could present any information that might assist the Chair in determining whether I have a legitimate question of privilege. I think one speech should be sufficient to cover the point in question.


Madam Speaker:: Order, please. For the information of the hon. member, one day last week the hon. member for Peterborough (Mr. Domm) was not in the House and the next day the minister was not in the House, so we need a bit of co-ordination here. At one point the minister said in reply to the question of privilege that he would like to bring forward some information to the attention of the House on the question of privilege raised by the hon. member for Peterborough. The hon. member was not in the House at the time the minister wanted to make a statement and bring that information forward, so the House agreed that it would allow the information to be given to the House when the hon. member for Peterborough was present so that, if need be, he could reply to the information. The idea was that the minister would very briefly give the information which he had promised to bring to the House and the hon. member for Peterborough would be
allowed to reply briefly if he wished, and that would end the interventions allowed on this question of privilege.
I am ready to rule and I only delayed my ruling, as I did for the question of privilege brought forward by the hon. member for Bow River (Mr. Taylor), because there might have been some similarity. At any rate, I wanted to rule on both at the same time. I am in the hands of the House. If the House still wants to hear the minister's supplementary information, then we will hear the hon. member for Peterborough as well; otherwise I shall rule tomorrow on the question.


An hon. Member:: Let us have the ruling.


Madam Speaker:: The House will have to wait until tomorrow because I did not bring it with me. I shall rule tomorrow and that will save time for opposition day. However, as agreed the other day, the House now does not want the hon. member to make a further statement?


An hon. Member:: That is correct.


Madam Speaker:: That is correct.


Erik Nielsen: On the point of order raised by the hon. member for Peterborough, Madam Speaker, there are two points to be drawn to the attention of the Chair. When the minister who now seeks the floor rose and the hon. member for Peterborough was not in his place, that was subsequent to the time the original question of privilege was raised. The minister had already spoken on the question of privilege. On a subsequent day, he then rose seeking to elaborate on his existing contribution to that question of privilege.
Since you have been in the Chair, Madam Speaker, you have been in the custom of hearing members only once on a question of privilege. If you hear the minister twice on this same question, I submit that any member can be heard twice on the same question, and that should be incorporated in your ruling, if you hear the minister now.


Madam Speaker:: Indeed, that is quite correct. I did say that I would not allow the hon. minister to make a statement unless the House agreed, and the House did agree.
The minister had said the following in his intervention when the question of privilege was raised: "I am more than willing to look into the matter and bring back to this House this further information".
I am quoting from Hansard. However, if the House now does not want to hear the hon. minister, I am in the hands of the House and I will not allow the minister to bring forward that supplementary information. It is quite clear that a member cannot speak twice on a question of privilege.


Francis Fox: Madam Speaker, very briefly I have two points. First, all I was interested in was to bring the facts to the attention of the House to clear up the issue.
July 14, 1980

Second, I would now wish to reserve a second question of privilege until I have had an opportunity to verify the blues about what the hon. member for Peterborough (Mr. Domm) actually said this afternoon. The way I understood it, Madam Speaker, he has now modified his statement to say that the minister supplied him with a false document, whereas in his previous question of privilege he spoke about the department deliberately misleading him. Therefore, I want to verify the blues on this matter and reserve my question of privilege until tomorrow afternoon.


MR. GURBIN-DISTRIBUTION OF GOVERNMENT INFORMATION TO DEFEATED LIBERAL CANDIDATE
Mr. G. M. Gurbin (Bruce-Grey):: Madam Speaker, the basis for my question of privilege concerns a press release put out by the Liberal party in my constituency on behalf of a defeated Liberal candidate. I would like to table this press release, if I may, and I will leave it with the Clerk of the House.
The issue at large in this press release concerns a place called Dyer's Bay. The following is from the press release:
Tenders will be called next week for the reconstruction of the dock at Dyer's Bay-
Government information was given only to a defeated local candidate and his local party organization. It has still not been communicated to me as a sitting member of Parliament.


Some hon. Members:: Shame.


Gary Michael Gurbin: I have followed this particular issue through two governments. I have been talking to the small crafts and harbours branch of the Ministry of Fisheries and Oceans, and I was eagerly awaiting this information.
I believe that this breach of etiquette has affected the fundamental basis of parliamentary democracy. It has threatened my rights and responsibilities as a member of Parliament. 1 think it represents one party's influence that is spreading by using the financial resources of a government that has responsibilities to an entire country. A minister of the Crown has used his position to selectively distribute information to further the career of a defeated Liberal candidate.
Traditional Canadian patronage and Liberal appointments, as across Canada, are also seen in my constituency of Bruce-Grey. If you add to this the habit as represented in my point of privilege, you have a political tool to ensure that this country will be manipulated by one political party. This practice reflects on the ethics of those ministers, defeated Liberal candidates and local Liberal organizations that use this practice.
As the Minister of National Health and Welfare (Miss Begin) recently learned, members on this side of the House demand the respect that Parliament confers on members by virtue of having been elected. For the Minister of Fisheries and Oceans to expand partisan preferential treatment by giving government information first and only to a defeated candidate is an even more, if possible, serious breach of parliamentary ethics. It must stop.
Privilege-Mr. Cossitt
My constituency of Bruce-Grey has given me the honour of representing it in this House of Commons. The democratic process will freshen itself at another election at the call of Parliament. The attempt to manipulate this constituency shows both a lack of respect for the people I represent and a lack of respect for the democratic process. The constitutional difficulties we are experiencing now are not so much a problem with what is written, but the result of the ambitions of those who hold their own interests above the interests of our land.
This point of privilege has serious implications for the future of this Parliament. I ask you, Madam Speaker, to bring forward a judgment that will reflect the tradition and the spirit of parliamentary democracy.


Some hon. Members:: Hear, hear!


Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, I rise to ask that you permit the Minister of Fisheries and Oceans (Mr. LeBlanc) to reply to this question of privilege tomorrow, and that it be held over.
Second, with respect to the question of privilege raised by the hon. member for Peterborough, (Mr. Domm) and the hon. member for Bow River (Mr. Taylor), since they fall under a similar heading of rights of members of Parliament, I would ask you to defer your judgment until you have heard the Minister of Fisheries and Oceans on this particular question of privilege.


Madam Speaker:: Order, please, I will just answer the parliamentary secretary. I will take this question of privilege under advisement. Indeed, there are some affinities with the other two questions of privilege that have been raised previously in the House. I am not saying certainly that there are affinities, but at least on the surface there seem to be some affinities. I do not know whether I will rule on all three of them on the same day, but I will delay the ruling on this particular one and I will look at the other two to see when I can rule on them.


MR. COSSITT-ABSENCE OF REPLY FROM PRIME MINISTER DURING QUESTION PERIOD
Thomas Charles Cossitt: Madam Speaker, I have a very short question of privilege arising out of a question that I directed to the Prime Minister (Mr. Trudeau). I realize under the rules of the House that no minister, including the Prime Minister, is obliged to answer a question. Ministers can, as the Prime Minister did, decline to answer a question and remain seated.
I would like to make this point as my question of privilege, that when the government refuses to furnish information to a member of Parliament or to Parliament in general, and when a Prime Minister arrogantly, superciliously and pompously remains seated on his rump, then it is high time we changed the rules in this House so that ministers and the Prime Minister do have to give an answer when information is requested. We have seen case after case of information being

Business of the House
requested in this House, and the answers given are not information at all but simply the extreme example of what we saw this afternoon, namely, an arrogant man sitting on his rump and refusing to give information to the people of Canada.
[ Translation]


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, the Prime Minister (Mr. Trudeau) usually answers questions very honestly and at length. The member knows that quite well. It is not the trademark of this government to conceal facts. On the contrary, we are quite open. The percentage of answers provided, especially to questions appearing on the order paper, of which the member is an expert, is very high and there is no basis to the intervention of the hon. member.
Strictly from the procedural point of view, the hon. member is entirely right when he says that a minister is not bound to answer a question. It would also be right to say that from a procedural point of view there is no rule preventing a member from asking a stupid question and he has been a master of that more often than otherwise. I wanted to specify that there is no question of privilege, that we on this side of the House thoroughly and honestly answer questions and that the member on the other hand has acquired the unfortunate habit of asking questions which are not often very intelligent and cost a fortune to taxpayers, especially those appearing on the order paper.


Madam Speaker:: 1 do not have to remind hon. members who are acquainted with the Standing Orders that a minister may or may not answer a question, all the more so the Prime Minister. Consequently, he assumes, 1 suppose, the entire responsibility for the fact that he did not answer a question put to him during oral question period. The hon. member for Leeds-Grenville (Mr. Cossitt) is probably not satisfied with the situation but the Chair cannot force a minister or the Prime Minister in this case to answer a question.


BUSINESS OF THE HOUSE
Walter David Baker: Madam Speaker, I rise on a point of order. It might be appropriate, given the fact that we are entering what I think most of us hope will be the last week of this part of this session of Parliament, that we look at the order of business which the government House leader has in mind beginning tomorrow. If he could outline that for us, it might be helpful in expediting that business.


Yvon Pinard: I thank the House leader of the Progressive Conservative Party, Madam Speaker. He had the courtesy of giving notice of his question and I am in a position to give him
July 14, 1980
specific information on the order of business for the House as agreed upon, after discussion, with the House leaders at the end of last week.
First, I should like to state that tomorrow night, at 9.45, the deferred vote on Bill C-3 will be taken. It will be remembered that at the end of the debate on that bill it was agreed to postpone the vote to this week; after consultation it was agreed to proceed with it tomorrow evening at 9.45. Should there be other votes to dispose of at that time, we will be there to do so. Tomorrow, we think it will be possible to dispose of third reading of the following bills, in this order; C-5, C-26, C-4 and also, if possible, at least second reading and referral to committee of Bill C-31. That is what we are suggesting for tomorrow. I have been asked to postpone Bill C-31 till after eight o'clock tomorrow evening. Considering the order of business, 1 doubt that we could start the debate on Bill C-31 before that time.
With regard to the rest of the week, some bills are now being studied in committee and we hope to be able to obtain final passage of Bills S-2 and C-13. There again, those are the bills which I have had the opportunity of discussing with my colleagues. If time permits, we may also give notice of a bill to transform the Post Office Department into a Crown corporation, a bill which I am told is almost identical to that introduced by the previous government.
Later on, I shall consult my hon. colleagues and try to dispose of at least the second reading of that bill before the adjournment on Friday; it may not be possible and it is not an essential condition but I believe we could be reasonable and agree to discuss the matter after studying the bill on Thursday, or at least reach a conclusion on the matter.
Bills C-34, C-18 and S-6 will have been or could be put before the House before the end of the week, and depending on how business progresses, we could use Thursday as the eighth day allotted to the throne speech debate; Friday could perhaps be set aside to allow the parties to speak, on the motion for adjournment, on subjects of their choice.
So, to sum up, Madam Speaker, tomorrow, if possible, we shall proceed with Bills C-5, C-26, C-4 and C-31; on Wednesday, with the bills that come to us from committee, that is S-2 and C-13, if no other agreement is made on other bills; Thursday will be the eighth day on the throne speech debate, and Friday we can debate the motion for adjournment if we deem it advisable to give notice of it tomorrow or Wednesday depending on how business progresses.


Mr. Blenkarn:: Madam Speaker, my question is supplementary to the question directed to and answered by the President of the Privy Council. The President of the Privy Council will recall that a week ago today, Bill C-410 was introduced, a bill to abolish the Small Loans Act. At that time the President of the Privy Council said that he would like an opportunity to study the bill.
July 14, 1980

In view of the fact there have been consultations on this and similar bills to abolish the Small Loans Act, and due to the fact that this is already before the House, is it possible, particularly in view of the fact that we can put the bill through three readings without debate-


Mr. Darling:: Now.


Donald Alex Blenkarn: As the hon. member for Parry Sound-Mus-koka says, now. Is it possible we could get that bill through, debate it and dispose of it, certainly this week?


Yvon Pinard: Madam Speaker, I note the hon. member's suggestion to transmit his remarks to the interested minister and, should the need arise, we will follow his suggestion to the letter and dispose of this bill quickly. But I cannot give him the assurance he is seeking just now.


Donald Alex Blenkarn: Madam Speaker, I would be most delighted to turn over to the President of the Privy Council a letter from his colleague, the Minister of Consumer and Corporate Affairs, addressed to my colleague for Parry Sound-Muskoka, indicating that it is absolutely essential and a priority of the government to dispose of the Small Loans Act. Unfortunately, as the President of the Privy Council knows, the bill has not been introduced by the government. Naturally, we could accept it if instead it were made a government bill, the bill before the House being in exactly the same form that a government bill would normally be.


Thomas Charles Cossitt: Madam Speaker, I rise on a point of order dealing with House business. I would like to direct a question to the President of the Privy Council. About a week or so ago I received a letter from the Minister of Finance in which he confirmed that he was going ahead-I think the words were almost immediately, in the almost immediate future or something like that-with a bill concerning the garnisheeing of public servants' wages in order to put them on an equal footing with the rest of Canadians who do not have the privilege of being protected as public servants now do. When does the President of the Privy Council anticipate that that legislation will be proceeded with?
[ Translation]


Yvon Pinard: Madam Speaker, concerning Bill C-38 to which the hon. member is probably referring, if there is agreement to dispose of this bill without debate at all stages I have no objection whatsoever to its being approved before Friday. Quite the contrary.
Order Paper Questions



ROUTINE PROCEEDINGS


[Stage Direction]
On the order: Government Notices of Motions:
July 10, 1980-The Prime Minister:
That Madam Speaker send a Message to Her Majesty Queen Elizabeth, The Queen Mother, extending the congratulations of the House of Commons of Canada on Her completion on August 4, 1980, of Her eightieth year, expressing the gratefulness of the people of Canada for the many services Her Majesty has rendered them over the years, including Her many visits, beginning with the first in 1939 when she accompanied Her husband, His Majesty King George VI, on the first visit of a reigning monarch to this country, and wishing Her continued good health and long life.
Madam Speaker:: Pursuant to Standing Order 21(2), this notice of motion is transferred to and ordered for consideration under government orders later today or at the next sitting of the House.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David Michael Collenette: Madam Speaker, the following questions will be answered today: Nos. 156, 188, 269, 358, 710, 807 and 1,016.


Mr. Cossitt: Is the NORAD agreement due for renewal in May, 1980, and, if so (a) is it planned to re-draw regional defence boundaries (b) will Canada be given sovereignty over its own airspace and, if so, what steps will the government take to strengthen the air force section of the armed forces to meet such a commitment?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: The current NORAD agreement was extended for one year on May 12, 1980. There is mutual agreement between the United States and Canada to "reconfigure" the boundaries of the NORAD defence regions. This will mean that future NORAD operations in Canadian airspace will be controlled from NORAD region operations control centres located in Canada.
A major step in the modernization of the Canadian Armed Forces to upgrade Canada's contribution to NORAD was taken April 10 when the government decided to purchase the CF-18A as Canada's new fighter aircraft.

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Order Paper Questions


Mr. Herbert: 1.	For each fiscal year (a) 1977 (b) 1978, what was the total revenue and net earnings or deficits for the Canadian Film Development Corporation?
2.	For each year, what was the total (a) of direct or indirect subsidies or other benefits conferred by the government on the corporation (b) of loans, advances or guarantees extended by the government to the corporation (c) investment by the government in the corporation both before and after any write-off?


Mr. Peter Stollery (Parliamentary Secretary to Secretary of State and Minister of Communications):: I am informed by the Canadian Film Development Corporation as follows:
Revenue	Net Cost of Operations
1.	(a) 1977:	$632,399	$3,787,745(b) 1978:	$605,118	$2,624,755
2. (a) 1977: 1978:
(b) and (c):
$3,537,046 (parliamentary votes) $3,343,000 (parliamentary votes) None.


Mr. Herbert: 1.	What is the estimated total cost of the move of the Department of Veterans Affairs to Prince Edward Island?
2.	Does the sum include any amount for additional communications expenditures or for any additional costs resulting from decreased operating efficiency?


Daniel Joseph MacDonald: 1. The total approved funding for the relocation of Veterans Affairs is 23.6 million. This does not include costs for building and land which are under negotiation and may not be borne by the federal government.
2.	The Veterans Affairs portfolio does not anticipate a decrease in operating efficiency as a result of its relocation. The amount cited in part 1 does not include any operating expenditures, which will continue to be forecast and accounted for in the normal way.


Mr. Herbert: 1.	As of March 31, 1979 (a) how many persons in the SX classification were employed by the Department of Regional Economic Expansion (b) how many were (i) francophones (ii) females?
2.	What are the present totals?
3.	Was there a structural change in the Department since March 31, 1979 and, if so, what effect did such a change have on the number of SXs employed?


Hon. Pierre De Bane (Minister of Regional Economic Expansion):: The answer for the Department of Regional Economic Expansion is as follows:
1. As of March 31, 1979
(a)	40
(b)	(i)	10
(ii) 2.
2.	As of March 31, 1980
(a)	35
(b)	(i)	8
(ii) 2.
3.	No.


Mr. Clarke: 1.	With reference to accompanying note 1 of the financial statement of the Jacques Cartier and Champlain Bridges Incorporated detailed at page 120, Volume III of the 1978-79 Public Accounts of Canada, when the corporation was created, was one of its objectives that it should become self-sufficient?
2.	Are there plans at present to place the corporation on a self-sustaining basis and, if so, what are they?
3.	Are there changes in corporate structure or operating methods required in order to put the corporation on a self-sustaining basis and, if so, what are they?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: The Jacques Cartier and Champlain Bridges, Incorporated, a subsidiary of The St. Lawrence Seaway Authority, advises as follows: 1. Yes.
2.	The corporation was formed on November 3, 1978, and is striving to bring the structures up to an acceptable level of maintenance. This has involved abnormal expenditures. It is the intention of the corporation to take the steps necessary to become self-supporting after maintenance costs are stabilized.
3.	No.


Mr. Clarke: 1.	Has the Department of Transport determined if the deterioration of the surface of the overpass over the airport access road, at the Ottawa International Airport, reflects any serious damage to the carrying capacity of the overpass?
2.	Has the department any plans to repair the surface damage and, if so, what is the estimated cost and on what date are the repairs to be carried out?


Robert Theodore Bockstael: 1. It has been determined that the deterioration of the surface of the overpass over the airport access road at Ottawa airport does not reflect damage to the carrying capacity of the overpass.
2. The department has no plans to repair the surface damage.


Mr. Hnatyshyn: Has the government entered into an advertising campaign announcing the agreement with McDonell Douglas to purchase the CF-18 fighter aircraft and, if so, in what media and at what cost?


Mr. Gerald Laniel (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: In so far as the Department of Industry, Trade and Commerce is concerned: Soon after the new fighter aircraft contract was signed, the government
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sponsored a series of advertisements in daily and weekly newspapers in Canada. The advertisements were intended to inform Canadians on the suitability of the McDonnell Douglas CF-18 in meeting Canada's defence needs and the breadth of the CF-18 industrial benefits program and to encourage Canadian companies to take advantage of the new business opportunities the program offers. The advertisements provided the telephone number of the appropriate Government of Canada Business Information Centre from which additional information could be obtained on the benefits program.
This advertising campaign has been completed. The cost of the advertisements was $259,000 to be shared by the Department of Industry, Trade and Commerce and National Defence.


David Michael Collenette: Madam Speaker, if questions No. 929 and 1,037 could be made orders for returns, these returns would be tabled immediately. I ask, Madam Speaker, that the remaining questions be allowed to stand.


Madam Speaker:: Is it the pleasure of the House that questions No. 929 and 1,037 be deemed to have been made orders for return?


Some hon. Members:: Agreed.
[ Text]


Mr. Munro (Esquimalt-Saanich): 1.	What airports under the management of the Department of Transport are equipped with radar?
2.	What was the pattern of traffic over the past four years at the airports by (a) all types of aircraft (b) commercial (c) non-commercial users (d) jet and turbo propelled aircraft (e) piston-powered aircraft?
3.	What airports under the management of the department, with traffic exceeding 100,000 take-offs and landings per year are not equipped with radar aids?
Return tabled.


EXTERNAL AFFAIRS
Miss MacDonald: 1.	How many women were employed by the Department of External Affairs as a (a) foreign service officer (b) secretary (c) clerk for the year (i) 1975 (ii) 1976 (iii) 1977 (iv) 1978 (v) 1979?
2.	For the same years, in the department, what was the ratio of women to men in each of the foreign service officer categories?
3.	For the same years, how many women foreign service officers left the department?
4.	For the same years, how many Francophones were employed by the department as a (a) foreign service officer (b) secretary (c) clerk?
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5.	For the same years, what was the ratio of Francophones to non-Francophones in the department in each of the foreign service officer categories?
6.	For the same years, how many Francophone foreign service officers left the department?
7.	What is the ratio of "secretary" to "foreign service officer" in each bureau of the department?
8.	What is the ratio of "secretary" to "foreign service officer" in the department in the office of the (a) under-secretary (b) associate under-secretary (c) deputy under-secretary (d) assistant under-secretary (e) special advisers?
Return tabled.


Madam Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Harvie Andre: That this House condemns the government for its failure to develop and implement a coherent economic development policy.
He said: Madam Speaker, we have chosen to utilize this, perhaps the last opposition day before the summer recess, to debate the subject of economic development policy or, more particularly, the failure of this government to develop a coherent economic development policy. We intend to show during the course of today's debate that not only does the government not have a coherent or a consistent economic development policy, but this failure has had and continues to have very serious and detrimental consequences for the nation, not only in an economic sense but in a constitutional sense as well.
Last week the prestigious OECD released its economic projections for the coming year showing that Canada will witness its worst economic performance since 1954. When we consider that we enter the coming year with unemployment rates which are already outrageously high, the OECD paints a black picture indeed. At times like these we should be grateful to organizations such as the OECD because they do at least present us with an economic prediction for Canada-something the Minister of Finance (Mr. MacEachen) has been unwilling to do.
Some solace can be gained-and I am sure this will not escape the government-by noting that all the OECD nations, especially the big seven, face a slowdown in the coming year. It must also be noted, however, that this slowdown is primarily due to the recent increases in crude oil prices on the part of OPEC, increases which Canada has yet to absorb. Perhaps the most distressing aspect of the OECD prediction is that next

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year, on a per capita basis, Canada will have far and away the largest current account deficit of any of the big seven nations despite the fact that we are the only one of those nations to be a net exporter of energy. In other words, all the other nations import high percentages of expensive energy whereas Canada is a net exporter of energy. Notwithstanding this advantage, Canada's current account deficit with the rest of the world will be the largest of any of those nations. Somehow or other, those other countries have been able to absorb the increase in energy prices and do a better job of maintaining their payments accounts and their competitiveness vis-a-vis the rest of the world.
One might well ask: How is it that these nations are doing a so much better job than Canada given the advantages we possess? One reason, and maybe the principal reason, is that every other nation seems to have a plan, a sense of direction, a development policy, an economic policy or an industrial strategy-some goal against which it defines its own decisions and against which its businesses, corporations and unions can define their decisions and assess their progress. 1 defy anybody to examine the decisions made by the Liberal government over the last decade and describe the economic development goals or the industrial strategy of this country. I defy anyone to consider its record or its statements or its decisions and deduce from them what our industrial strategy or economic development policy has been as a nation.
For example, some years ago the government indicated that it was in favour of a better balance between the various regions of the country. They wanted all Canadians from coast to coast to be in a position to participate more equitably in the development of the country. As evidence of this desire, they created a new department dedicated to such a goal.
Since then, though, despite the existence of that department and the expenditure of hundreds of millions of dollars, regional differences in this country are more acute. In 1971 the Liberal government expressed a belief that science and technology were important to Canada and that it was necessary to increase our efforts in this area. As proof of their dedication to this proposition, they created a Ministry of Science and Technology. Since then, Mr. Speaker, the research and development done by Canada as a percentage of the gross national product has decreased from a dismal 1.4 per cent of the GNP to a disastrous .8 per cent of the GNP.
In 1973, the Prime Minister (Mr. Trudeau) signed a contractual link with the European Common Market. He was dedicated, he said, to reducing our dependence upon the United States and in consequence he intended to increase our trade with Europe. Since then, trade with Europe as a percentage of our total trade has actually decreased while our dependence upon the United States has increased.
In the course of the last decade during which the Liberal bunch opposite has been managing or mismanaging the economy, Canada alone among the OECD big seven has been going through a process of deindustrialization. When we started, our whole reason as a country was based upon the land. That is how the Canadians who came here originally from Europe
earned their living. They were engaged in agriculture, the fur trade, fishing, lumbering and, more recently, in mineral development.
In the course of time, particularly after the second world war, that reliance upon the land was reduced; we became increasingly an industrialized country. We joined the industrialized world with manufacturing and high technology industries, industries which utilized the skills and talents of the people instead of just exploiting natural resources.
That is the history of Canada, as it is the history of every developed country today; countries followed the pattern of development from total reliance on the land to increasing reliance on the skills of its people.
Since 1970, the trend in Canada has been exactly the opposite, so that today we have reached what is almost a position of crisis. In 1970, as for years and years before that date, Canada's trade imbalance in the area of high technology and manufactured goods was of the order of $1 billion, an amount which was more than covered by our trade surplus in agriculture. Since 1970, since the Trudeau Liberals assumed power or shortly thereafter, there has been a continuous straight-line deterioration in our position until today we have a trade imbalance on manufactured goods, the goods which produce the jobs, amounting to $17 billion. In other words, we have gone through a process of deindustrialization, the only western nation to have done so.
Why did that happen? Did the government follow a deliberate policy of deindustrialization? Was the government deliberately following a "back to the land" policy under which we would give up our factories and our manufacturing operations and live off the land again as we used to do? "The Land is Strong" was, we remember, the slogan of a past election campaign. Maybe this was what it was all about.
That is not what they said, of course; their policy was quite different. I have a big file of press releases and statements by various ministers, and what they said in 1971 was that they were dedicated to science and technology and to increasing the amount of research and development done in Canada. As proof of their commitment they created a new department; they were dedicated to eliminating regional disparity and as proof they created a new department. They were dedicated to increasing our trade with the rest of the world and to decreasing our dependence upon the United States. As proof they signed a contractual link with Europe.
An hon. Miember: They were dedicated to getting re-elected.


Harvie Andre: They were dedicated to industrial development and, as proof, they were working on an industrial strategy.
Mr. Speaker, in every case exactly the opposite happened. In fact, looking at the evidence, the best way to determine the direction in which the government is taking Canada is to observe what the Prime Minister and his ministers tell us and then conclude that the opposite will take place. In that way a far more accurate picture of where the government is taking the country emerges than if one listens to what they say. They
July 14, 1980

say that research and development must be increased. Exactly the opposite happens. They say that trade with Europe will increase. Precisely the opposite happens. They say that regional disparities are to be eliminated. Exactly the opposite will happen.
The government says it will develop an industrial strategy to make industry the backbone of this country; exactly the opposite will happen.
Looking at the record, one could be forgiven for concluding that the Liberal government is plainly dishonest. However, according to recent evidence, it is not a matter of dishonesty but, rather, a matter of incompetence. It is not that the ministers of the Trudeau government, and there have been many over the years, were dishonest about where they wanted the country to go but, rather, that the Prime Minister and his ministers lacked the competence to take us there.
Many of us have long suspected that that was the case, but a book has been published within the last month which verifies this view and this position. The book to which 1 am referring is entitled "How Ottawa Decides-Planning and Industrial Policy-making, 1968 to 1980". It conveniently covers the years of the Trudeau administration. It is written by a gentleman who is now a professor at McGill University but who had been for a number of years a highly placed member of the Prime Minister's personal department, the Privy Council office. The author describes how the Prime Minister, his cabinet and his government set about to plan the new nirvana or the Utopia Canada was to become upon the succession to power of this great new guru who currently leads us.
Mr. French describes the sophisticated, highly technical and modern decision-making processes put in place by this Prime Minister when he assumed office. He said to the Liberal party at a Harrison Hot Springs conference in, I believe, 1970 that we no longer had to be just chips of wood on a stream and going to wherever the universe takes us, but that we have control over our own future, that our own view of the future dictates what the future will be and that through these sophisticated planning techniques we would get there. They were sophisticated. There was a cabinet committee system, a Treasury Board system, an expenditure budget process and a finance planning system. They were marvellous systems, but they turned out to be an absolute and total disaster, according to Mr. French, an experienced officer who participated in the process and who now writes as an academic and not as a partisan of any political party.
In particular, Mr. French explains how an industrial strategy for Canada was a specific victim of this chaos which passed for planning in the Trudeau government and how instead of a coherent industrial strategy and a proper economic development policy we ended up with ad hockery and political opportunism, with the industrial strategy as its chief victim. Instead of coherent policy we have had ad hockery of the worst kind. Decisions have been taken or not taken based on short-term political exigencies, the influence of particular ministers, the
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imminence of an election or byelection or just plain lethargy. One has to wonder how different Canada's constitutional debate might be if, instead of this dismal failure of the federal Trudeau Liberal government with economic policy and industrial strategy, it had developed and stuck to a coherent policy.
The basic argument for a strong central government is that the federal government must have control over the main economic levers in order to manage the economy for the common good. The federal government states-and no one disputes it-that to be a country we must have, at the very least, a common market. There must be a fair and equitable distribution of the nation's wealth. There must be a coincidence of goals. We must have a coherence and a consistency toward common objectives; we must approach, react to or deal with the rest of the world as one strong entity and not be a loose coalition of ten smaller entities.
No one disputes as being a desirable goal that view of a strong central government. However, when we look at the record of the last ten years, we inescapably reach the conclusion that this Liberal government knows not or at least cannot deliver a coherent national economic development policy, and therefore there is great reluctance to extend to it more power than it already has.
1 know the Prime Minister and his apologists have a great deal of difficulty understanding people who say they want a strong and united Canada but do not support his position on more economic power for the federal government. If the Prime Minister wants an explanation for that, he need look no further than at his own performance and the performance of his government. The reality is that for ten years people in this country have been looking to this government and asking what are our national goals, what is our industrial strategy and what is our economic development policy. Do we have a coherent set of goals? None is available, as I have pointed out. In fact, the performance of the government and the economy has been in the opposite direction to that which the government indicated as the desirable goal.
Citizens observe this, and as constitutional questions come up and as they ask to whom they want more power to accrue- to the federal government, which has had this ten years of chaos, ad hockery and failure, or to provincial governments, which know and understand people a little better and under which there have not been ten years of ad hockery, chaos and failure-naturally there is tendency to suggest that perhaps we should give the provincial governments a chance, because obviously the federal government has failed dismally. If we want to find the reason for this apparent paradox wherein people are saying they believe in a strong, united Canada but that they want more provincial power, we really do not have to look any further than that, and I wonder how different the debate on constitutional questions might be today if, instead of this kind of failure in economic policy and industrial strategy, we had had a record of consistency, aggressiveness, fairness and so forth from this government and there had been a strategy which had been adhered to by the government.

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Economic Development
I know the Minister of Energy, Mines and Resources (Mr. Lalonde)-because he has said so publicly-and the Prime Minister cannot quite comprehend how it is that some of the Atlantic premiers are supporting the positions of the premiers of resource-rich provinces like Alberta, British Columbia and Saskatchewan. The Minister of Energy, Mines and Resources and the Prime Minister say that they do not understand. What they want to do is get hold of resource revenue so that they can distribute it more equitably across the country, and they wonder how the premiers of those at the receiving end of equalization, the Atlantic provinces, can object to that.
They do not understand how they can take that position, but it is very simple. Perhaps it is difficult for the government because it involves a degree of mea culpa on the part of the federal government. It involves admitting failures. But the reality is that the Atlantic region has had the experience of dealing with this federal government for ten or 12 years. It has had the experience of seeing the Department of Regional Economic Expansion apparently trying to balance the economic development of this country and seeing the Department of Industry, Trade and Commerce trying to do just the opposite. They balance out. It is very interesting. I see the Minister of Industry, Trade and Commerce (Mr. Gray) is here; he will be speaking later today. He should do the arithmetic some day. I did, and I found that the contributions of the Department of Industry, Trade and Commerce to central Canada just about balance out the contributions of DREE to eastern Canada. So that in fact if you average out the two departments across the country, you get about the same thing and we have no regional economic development policy at all. If in fact there had been some consistency and some coherence on the part of the government with regard to economic development or industrial strategy, you would see quite a different attitude on the part of the premiers than you see today.
Ad hockery has caused an incredible amount of inconsistency. I defy anybody in this country to define what our trade policy is. Perhaps the Minister of Industry, Trade and Commerce will provide some elucidation in his speech, but I am certainly unable to determine what our trade policy as a nation
is.
As I indicated earlier, the Prime Minister signed a contractual link with Europe which was supposed to decrease our dependence on the United States by increasing our trade with Europe. But our trade with Europe has gone down. It is a mystery to me and I defy anybody else in the country to clarify
it.	I would welcome clarification on whether we believe in free trade or protectionism in this country, because you can find examples on both sides of that question.
The only thing we have had from this government since the election is the announcement that we are going to get a new Crown corporation. Is that not marvellous! But that is their response to every policy issue affecting the nation. If you have a problem and do not have the answer, create a Crown corporation. That is great. We go out and hire some people,
presumably. I do not know where they are. If they know some people who will man this Crown corporation which will cure all our trade problems, why do they not hire them today? Why do they not bring them into government today and pick their brains now? What magic happens to somebody when you bestow on them the title of Crown corporation? How will they suddenly become geniuses and cure our trade problems whereas they are unable to do anything now? Perhaps there is some retired cabinet minister who needs a chairmanship somewhere, so we create a new Crown corporation to put him into it.
I defy anybody to tell me or the country what this government's policy is toward foreign ownership and foreign investment. Sure, they set up the Foreign Investment Review Agency. So far as I know, all it does is to make a lot of lawyers rich. If it has had an impact on Canadian ownership in this country, it escapes me. It certainly has had an impact on the legal profession because if you want to deal, you have to come to Ottawa with a $200-a-day lawyer and appear before the blooming board and fill out all the papers. So it is wonderful for that industry. But what effect has it had on foreign ownership?
The approach of the Minister of Industry, Trade and Commerce is also surprising. Almost in the same breath he rises and condemns the multinational resource companies in this country. He says they are awful, terrible citizens. Then he gives $200 million to Chrysler and says he will bring Toyota to Canada. Perhaps this afternoon he will stand up and give us his definition of a good multinational and a bad multinational. I hope he will go beyond the explanation that a good multinational is one which operates in Windsor and a bad one is one which operates somewhere else.


Some hon. Members:: Hear, hear!


Harvie Andre: It really is mind-boggling to me, a westerner. My constituents ask, how come that almost in the same day, in parts of the same newspaper, we see the statement: "Doggone it, we are going to force these multinationals and oil companies to become 50 per cent Canadian within a couple of years, or else", and then we see: "We have just given $200 million to Chrysler and $50 million to Michelin." What is the big difference?
Does this government have a coherent policy with regard to foreign ownership? Does it have in its tax system measures to encourage Canadians and give Canadians an incentive to invest in this country? For literally generations the tax system in this country was such that a Canadian could not invest in the Canadian oil business on the same tax basis as an American. In other words, Americans had an advantage over Canadians when investing in the oil business in Canada. For decades delegations came from the west to protest this. Literally, this was the response of one of the ministers of finance in the late 1950s, before 1957: "We do not care who owns the industry so long as we can tax it". Finally, that tax provision was changed, but only temporarily because on January 1, 1981, it lapses and we go back to the old system, unless changes are made, where an American can invest in Canada in
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the oil business with a tax advantage over a Canadian. If you were dedicated to the principle of Canadian ownership of the industry, Mr. Speaker, you would not tolerate that kind of uncertainty and absurdity.
How about the energy policy of this government? Energy should be an absolute key to economic development and investor policy. I have yet to read the writings of any expert, any think tank or economist who has not reached the conclusion that in the future that industry will come to those who have energy. That will be the key to industrial development in the future. We as a nation, unique among the Big Seven, the OECD nations, unique among the western world, have the opportunity to be energy self-sufficient, to have energy where some of our competitors might not have that option. In spite of that, what does this government do? Are they for self-sufficiency or are they not? Who can tell? It depends on what speech you read and at what time of the year you read it. One says yes, the other says no, and another one yet says maybe.
Even when they say yes-I think that is the recent signal- they do nothing to substantiate that apparent objective. If there were a coherent economic development policy and an industrial strategy in this country and it were based on going back to the land-that is, a coherent industrial strategy, if that is what they choose to have, to go back to the land and abandon the goals of industrial development, manufacturing, and high technology development-then let them state that, put it before the people of Canada and see if they want it. If it is not, if their policy really is what they say it is-that is, to develop industrially, to develop our manufacturing industry, to expand our trade with the rest of the world, to increase the job prospect of Canadians and to decrease regional disparities- then clearly an absolutely fundamental key to that is energy self-sufficiency.
This government could do nothing better for this country than to adopt immediately the policy of the Clark government: first, self-sufficiency; second, help for those Canadians who are least able to adjust to changes which will be necessary, and to provide for relief for those more adversely affected; and third, make sure that the benefits of the economic activity which will be generated from this pursuit of self-sufficiency are spread equitably across the country.


Steve Eugene Paproski: I hope that Bud Olson is listening.


Harvie Andre: Science and technology is an absolute key to the future growth of this country. I once heard an excellent speech made by an economist who said that the key to the future of any country in this world is like a three-legged stool, which is the foundation, consisting of food, energy, and science and technology. Without one of those legs, the stool topples and the country does not make it. We have done absolutely nothing in terms of science and technology-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member but his allotted time of 30 minutes has expired. He may continue with the unanimous consent of the House. Is there unanimous consent?
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Some hon. Members:: Agreed.


Harvie Andre: I am sorry, Mr. Speaker, but I assumed I had 40 minutes; otherwise I would have concluded my remarks. However, I will not prevail upon the House other than to add at this point that during the day we will elaborate on this issue. My colleagues, the hon. member for Etobicoke Centre (Mr. Wilson), the hon. member for Calgary South (Mr. Thomson), the hon. member for Scarborough East (Mr. Gilchrist), the hon. member for Erie (Mr. Fretz) and the hon. member for Halton (Mr. Jelinek), we hope, will all have an opportunity to elaborate on some of the points I raised. We hope that, at the end of the day, the government will have a better understanding of where they should be going in this area.


Mr. Lyle S. Kristiansen (Kootenay West):: Mr. Speaker, in addressing the motion before us today, one is immediately struck by the obvious conflict between employment-related political goals and a Canadian taxation structure, particularly in the corporate sector, which appears almost designed to provide incentives to those sectors of our economy least likely to create employment.
For example, for some years now the greatest write-offs and tax incentives have been provided to the capital-intensive oil and gas industry, an industry which perhaps provides the least jobs per investment dollar in Canada. Also it is the industry with the highest level of foreign control in this country, at least until very, very recently. This process continues on down the line with the next lowest taxation level to major resource industries. It continues until we finally come to the area of secondary manufacturing and the retail industry, the areas providing the highest number of jobs per dollar of investment and the highest degree of Canadian control and local ownership. They have the worst treatment under our tax structure. This is the sector where the highest level of taxation is paid.
Why? Surely two of the prime goals of any government, even this government and the previous government, must be to provide the greatest number of jobs for the least dollars and to encourage domestic control of our economy. I think all parties would agree with those over-all objectives, but the opposite is happening and it must be turned around. Not only must the emphasis, the weighting and direction of our taxation policies and strategies be changed to further the objectives of job creation and Canadian ownership, but our taxation structure itself must be altered in order that government taxation spending be seen and not hidden from public view; that visible grants replace hidden tax expenditures such as accelerated allowances and other invisible write-offs and incentives; that the recipients of these grants are then made financially accountable for such incentive grants as are proffered.
In other words, the government and the public should be in a clear position to demand performance and results for public moneys expended. I do not think that is a very revolutionary idea. I am sure other hon. members will agree that demanding value or performance in exchange for payment is hardly a

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revolutionary concept, but the federal government does not do it.
In spite of gutsy statements in the Speech from the Throne and welcomed ones by the Minister of Industry, Trade and Commerce (Mr. Gray) regarding performance reviews by FIRA, etc., that concept of value for payment is still foreign to our entire corporate taxation system. For us not to deal with the obvious imbecility, inequity and impotence of our current system is the height of public irresponsibility. The refusal of this government and the previous one to demand accountability and performance for taxpayers' dollars leads us to believe that in spite of their claims that they are non-ideological-I believe the President of the Treasury Board (Mr. Johnston) was on television this morning to that effect-I think they are really Tories at heart. In so far as guiding or directing our economy toward public goals is concerned, their slogan seems to be: "Praise the Lord and pass no ammunition at all". That may be all right in some circles, but certainly it does not do much when one is trying to deal with the very real problems facing Canadians.
Perhaps I am being too harsh in my judgment. The Liberal party, in its alternate on-years or on-periods, at least adopts the slogans and embarks ever so hesitantly on some positive courses of economic action. For instance, unlike the Tories at least they understood, even though under pressure, that a publicly-owned and publicly-directed instrument such as Petro-Canada was necessary if we were to achieve a national energy policy accountable to the needs of Canada.
Through its plans to dismantle, privatize, BCRIC or what have you Petro-Canada, the Tories would have continued to place our future completely in the hands of the oil multinationals. They would have continued to play poker with all their cards face up, with our future and our livelihoods at stake. Of course, the problem is that the big boys do not play the game that way, and traditionally Canadians have always lost the game as a result.
Now the Liberals have Petro-Canada-we all have Petro-Canada-but the government does not have the will to let it do the job. So now we play poker with some cards face up and some cards down, and we still lose. Is it any wonder? The Liberals say that they do not have the money and that the debt is too big. Some hon. members opposite made this point just the other day, that there are problems with the federal government's account, the deficit has grown already to $14 billion and we do not have the bucks to get on with the job. They still refuse to recognize the very vital difference between public spending and public investment. If a government is to enter the marketplace on behalf of the public interest, then it must be prepared to play the game the way it is played by the big boys or our shareholders, the people of Canada, will lose.
Let me refer for a few moments to what happened in this regard in the forest industry in the province of British Columbia under a New Democratic Party government between the summer of 1972 and the end of 1975. The period I want to refer to really starts late in 1973 up until December of 1975. With a direct public investment of only some $20 million
in the British Columbia forest industry, within only about two years the government of British Columbia gained for the people of that province several hundreds of millions of dollars in assets and several hundreds of millions of dollars in profits. It gained direct influence and invaluable experience in the most important and vital industry of British Columbia, all for about 20 million bucks. We easily sneeze that much away every day around here.
Very simply, once there is guaranteed access to and the use of a major resource at low cost, the corporation borrows on the strength of that asset. In British Columbia it used to be one cent per acre for what was called a tree farm licence. The corporation borrowed on the strength of that asset which it received from the public. It was a public asset, only one cent per acre then. Using the capital it borrowed on our assets and using the expertise the corporation hired, it went on to develop and expand its base thereby gaining equity and revenue. It served the public need and the public interest of that province. The government hardly needs to dip into its own resources at all.
The giants of the private sector do not. They have not done so for some years. One would not know it when one hears some Liberals and most Tories. I am sure it was true in the dark recesses of the past that, once upon a time when a company required capital, whether it was a public company or private company, but especially in the private sector, it went to the market, issued shares and gained its revenue in the somewhat democratic process of an open marketplace in order to get its investment capital.
Perhaps that is the way the game used to be played, but for years now, in the major segments of the corporate sector, the greatest amount of investment capital for expansion is generated from revenue. With the growth of giant corporations, particularly monopoly enterprises, and the kinds of procedures which are adopted in that area of our economy, the private sector has had for years what amounts to taxation without representation. Those revenues in no way perform the same role as internal corporate revenues played once upon a time many years ago.
This example of what happened in British Columbia is exactly what the corporate sector has done for the benefit of its shareholders, who are often foreign shareholders, for decades. We believe it is time the Government of Canada became as loyal in serving the interests of its shareholders, the people of Canada, as these other managers have always been. It is about time we stopped playing poker with all our cards or some of our cards face up. It is time we stopped going into the ring with one arm tied behind our back. Those are the rules of the economic game, and there is no reason on God's green earth why we should handicap ourselves, as representatives of the public interest, in dealing with the major segments and interests which currently dominate our economy.
It is not only in the area of taxation where we have had problems. It is not only the unwillingness of the government to
July 14, 1980

become directly involved in particular strategic areas. Reference was made earlier in the session to grants, to the extent of $140 million made by both the Ontario government and the federal government, to major integrated companies in the pulp and paper sector in the province of Ontario. According to the stories the DREE grants issued by both the federal government and the Ontario provincial government would eliminate 600 to 800 jobs.
A couple of weeks ago I asked some questions in committee of the Minister of the Environment (Mr. Roberts) who is responsible for forestry. I asked whether he did not feel the $40 million to $50 million expended by the federal government on those DREE grants to integrated companies, which are perhaps in the healthiest state of any corporations in the whole forestry sector in Canada today, would more properly have been expended in order to expand the role of the Canadian forest service and begin to do what all parties have been advocating for at least the last two years-a major program of reforestation and extensive silviculture in this country's forest industry, which is one of the major national dollar earners.
I asked the minister whether it would not have been better in accord with our national priorities if that investment were made in restocking our forest lands rather than have the federal treasury hand out between $40 million and $50 million, not to mention the $100 million from the government of Ontario, to those companies when they ought to have been helping themselves over the last several decades in any case. The amount concerned was almost exactly the same total amount as was allocated in the current budget for the entire Canadian forest service. Everyone admits that this service has been falling further behind in its ability to deal with the legitimate demands of that industry, in which the basic stock at least has belonged to the people of Canada for the last several years. As a matter of fact, almost since the election of the first Trudeau government the amount going into research in that industry has been declining annually. We have had brave words recently but little else.
The minister replied in that committee meeting, which was about two or three weeks ago, that did I not think it was a public responsibility and did I not think that it was the government's responsibility to ensure that our pulp and paper industry remained productive? I suppose that is all right, but is it not also part of that industry's responsibility? What is the record of that industry in looking after its own situation and keeping its own house in order? If we look at the remarks which were made by an official of the Ontario/government as they are reported in The Globe and Mail of April 21, 1980, with regard to the attitude of these companies which were given $140 million in public funds, about $50 million in federal funds and the balance in provincial funds from the province of Ontario, we find he said:
When things are good, we'll go like a son of a bitch and make good profits, and when they are bad we'll tough it out.
That is the kind of foresight shown by the private sector and we have rewarded them by giving them some $140 million.
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The Minister of Industry, Trade and Commerce said with regard to FIRA that he would like to see some guarantees of performance. That is a laudable objective. However, here we are rewarding this kind of performance in the forest industry, and surely that is incentive for initiative in reverse. We have the whole thing backwards. We are providing incentives to companies which have done an absolutely miserable job in looking after their own interests and our national interests. At what point do we say that enough is enough and look for another way? If the carrot does not work, then we must find another way, whether it be by direct intervention, returnable grants, demanding performance before the money is expended or whatever. Possibly, and God forbid, we could consider the alternative of doing it ourselves. Another alternative would be a mix with some equity from the guardians of the public trust to ensure that we get the performance to which our dollars are entitled.
This whole situation is almost unfathomable to me but, of course, I am only somebody who used to work in the industry. Maybe I do not understand the weird and wonderful world of finance, but it seems to me that, considering we have had governments over a long period of time with whatever education and background they have had, we would be hard pressed to see this country fall more and more into the hands of people and corporations outside our own control than we have allowed to happen over the past several years.
Certainly our basic plant facilities in the pulp and paper sector in eastern Canada are very bad. We have allowed the stock in our forest industry right across the country simply to go to heck. It is just not there. We require tremendous amounts of investment, from both the public sector and the private sector, to ensure that we will have enough of what should be a renewable resource remaining so that we can at least maintain the level of employment found in that industry today. But so far all we have had are words.
With the couple of minutes that I have remaining, I would like to comment on one other area which I know is dear to the heart of the Minister of Industry, Trade and Commerce, namely FIRA. That institution, combined with the Department of Regional Economic Expansion, contraction or whatever, has committed such unholy blunders, and I am only referring to the ones of which I am aware have occurred in my own constituency. I refer particularly to relatively small companies. I am thinking of a small company which does not make big headlines, a company which was once called F. R. Rotter Lumber Co. Ltd., which then became Salmo Forest Products Limited, then Idaho Forest Industries, and now is Louisiana-Pacific Canada Limited, which is part of the Georgia Pacific Corporation. And the story goes on and on. We found that hundreds and hundreds of thousands of dollars were being put into that operation in the form of DREE grants. The business was then sold to Idaho Forest Industries. FIRA approved the application, and instead of now having a planer mill operating on two shifts and a sawmill operating on two shifts, it is down to a sawmill operating on one shift.

July 14, 1980
Economic Development
It is not for lack of a timber resource. They are shipping raw logs across the border, largely pulp logs, and now they have been faced with intermittent lay-offs in the last couple of months. Apparently all they are going to be doing is chipping logs and sending them across the line to feed the Georgia Pacific empire. Maybe it is too late for the minister to get performance guarantees from that company. I do not know if anything can be done now but that is a typical example, Mr. Speaker.
Let me point out one other thing that happened at Salmo, Mr. Speaker. Lousiana Pacific made two applications. The first was rejected because FIR A said there was no tangible benefit to Canada. The owners at that time, Idaho Forest Industries, laid off one of the two shifts that were left in the sawmill. They had already laid off the planers. The company came back to FIRA claiming that Lousiana Pacific said that if they got FIRA approval there would be a tangible benefit to Canada because they would hire the workers back. So FIRA approved the application, Mr. Speaker. That is the kind of game they play-so shallow that children in kindergarten could see through it.


Hon. Herb Gray (Minister of Industry, Trade and Commerce):: Mr. Speaker, I very much welcome the opportunity this motion gives me to inform the House of some of the efforts and achievements of the new Liberal government in developing Canada's economic potential and specifically in fulfilling the commitment the government made in the Speech from the Throne to develop economic policies that will provide jobs, spur growth, improve regional balance and promote Canadian ownership of the economy.
Within the short space of four months this new Liberal government has demonstrated to the Canadian people both a strong willingness and an ability to act on the problems and opportunities that current economic conditions have confronted us with in all regions of the country. Individual industrial development opportunities have received top priority from the government, which has acted to ensure that the exploitation of those opportunities will result in maximum benefits for Canadians.
Just one example of these positive initiatives is the industrial offsets program. It is a central feature of the new fighter aircraft package and will bring enhanced economic activity as well as a large measure of specific industrial development, worth over $3 billion, to the country as a whole and in every one of our regions. This is a program which can create as many as 24,000 direct and indirect new jobs all across Canada. [ Translation]
Mr. Speaker, in the coming years that program of the federal government will have substantial impact on Canadian technology. The purchase of the new fighter aircraft for the Canadian armed forces was indeed calculated to offer our leading industries such as electronics and aeronautics close to 60 per cent of the over-all economic spin-offs valued at S3 billion. As a result it will foster our advanced technology and
allow it to meet foreign competition more effectively in the eighties.

Another example is this federal government's move to guarantee $200 million in loans by private sector financial institutions to Chrysler Canada Limited beginning in 1982. As a result, we have obtained a commitment from Chrysler that it will invest approximately $1 billion in this country over the next five years in addition to commitments on jobs, production, sourcing of parts and other important matters, all of which will be very beneficial to Canada as the restructuring of this major motor vehicle manufacturer is under way to meet the requirements of the 1980s and beyond.
Our agreement with Chrysler has helped preserve or eventually to restore some 40,000 jobs directly, 14,000 and more at Chrysler itself, 16,000 employed by dealers all across Canada,
10.000	jobs in supplier firms in all parts of Canada and, as well, at least three or four times as many indirect jobs-
100.000	and more.
That is not something the Conservatives want to see. They continue to criticize and to indicate that this should not be done. The Conservatives are saying to the Chrysler dealers and their employees-16,000 of them all across Canada in each and every corner of this country-that they want to see them out of work. The Conservatives say they want those-


Some hon. Members:: Oh, oh!


Herbert Eser (Herb) Gray: -small Canadian businesses to close down. They are saying they want the employees and the 2,200 suppliers-


Some hon. Members:: Oh, oh!


Herbert Eser (Herb) Gray: -selling $500 million worth of goods to Chrysler-


Some hon. Members:: Oh, oh!


Some hon. Members:: Shame.


Herbert Eser (Herb) Gray: No amount of hooting and hollering now will take away the reality that the hon. member for Calgary Centre (Mr. Andre) has put on the record.


Some hon. Members:: Oh, oh!


Mr. Jelinek:: I rise on a point of order, Mr. Speaker.


The Acting Speaker (Mr. Ethier):: Order, please. Is the hon. member for Halton (Mr. Jelinek) seeking the floor on a point of order?


Otto John Jelinek: Yes, Mr. Speaker. The minister is making accusations that he should either withdraw or back up.


An hon. Member:: That is not a point of order.


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Ethier):: Order, please. The House could not hear what went on before. I asked for order in the

*July 14, 1980
iHouse and I still do. I hope hon. members will be courteous lenough to allow the minister to address the Elouse.
|


An hon. Member:: Listen and learn over there.
|


Some hon. Members:: Hear, hear!
s


Some hon. Members:: Oh, oh!
! Mr. Gray: Mr. Speaker, what I have said is implicit in the I words of the hon. member for Calgary Centre and the words of I the hon. member for Etobicoke Centre (Mr. Wilson) in this I House.
; Mr. Munro (Esquimalt-Saanich): Mr. Speaker, a point of order. I feel that this point has gone too far. The minister has already said that it is implicit in something. I want him to tell the truth to the House and not go on lying to the House.


Some hon. Members:: Oh, oh!
'


Some hon. Members:: Withdraw.
; The Acting Speaker (Mr. Ethier): Order, please. It is very difficult for the Chair to rule on any question of order. We cannot hear from here if there is shouting from across the House like this. I would ask the House to please give the hon. minister a chance to be heard and the Chair will know if there is order or not.


Herbert Eser (Herb) Gray: Mr. Speaker, if the opposition cannot stand the heat they had better get out of the kitchen.


An hon. Member:: That's right.


Harvie Andre: That is the first time we have ever heard that.


The Acting Speaker (Mr. Ethier):: Order, please. Is the hon. parliamentary secretary seeking the floor on a point of order?


Mr. Harquail:: Yes, thank you, Mr. Speaker. The hon. minister was interrupted on two occasions by two members of the opposition when he was addressing the House. The last speaker used the word "lying" and imputed that the minister was lying. That was very clear and I am sure it will be shown in Hansard. I should like you to invite the hon. member to take the opportunity to withdraw that now, Mr. Speaker.


An hon. Member:: Right on.


The Acting Speaker (Mr. Ethier):: Order, please. Once again I must repeat that I did not hear the word "lie". I thought that what I heard was his asking the member who had the floor to tell the truth. There is a difference between a lie and asking someone to tell the truth.


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Ethier):: From what I heard, the hon. member for Esquimalt-Saanich (Mr. Munro) was asking the member who was addressing the House to tell the truth, and that is all I heard.
Economic Development


An hon. Member:: That is the last time you will get away with that.


The Acting Speaker (Mr. Ethier):: Order, please. Order, please. Is the hon. parliamentary secretary seeking the floor on the point of order?


Gérald Laniel: Mr. Speaker, 1 do not think hon. members can be allowed to continue to use unparliamentary language, and 1 distinctly heard the hon. member for Esquimalt-Saanich (Mr. Munro) ask the minister not to go on lying to the House.

The hon. member asked the minister-and he seems to say that he said it-to stop lying to this House. I think that is unparliamentary and should be withdrawn immediately.


Some hon. Members:: Withdraw.


The Acting Speaker (Mr. Ethier):: Order, please. The point is taken and Hansard will have recorded what was said. I repeat what I said before-I did not hear what went on. I thought 1 had heard the hon. member asking the minister to speak the truth. If there was any implication that he said that the minister had lied, it will be registered in Hansard and the question of privilege can be reserved for a later time.
Is the hon. parliamentary secretary rising on the same point of order? Nothing has been heard; it will be heard at a later time after consulting Hansard.


Maurice James Harquail: I rise on another point of order, Mr. Speaker.


The Acting Speaker (Mr. Ethier):: The hon. parliamentary secretary on a second point of order.


Maurice James Harquail: Mr. Speaker, notwithstanding the fact that you have told the House you did not hear it, the hon. member himself has nodded and agreed that he said it. A number of members have said that he said it.


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


An hon. Member:: That is the same point of order.


An hon. Member:: Respect the Chair.


Herbert Eser (Herb) Gray: I am glad there is such agreement on both sides of the House that the truth is important here. 1 will continue, as in the past, to respect that agreement.


Some hon. Members:: Oh, oh!


An hon. Member:: Bend it a little.


An hon. Member:: Listen and learn.

July 14, 1980
Economic Development


Herbert Eser (Herb) Gray: Our program for Chrysler is enabling the restructuring of what is Canada's seventh largest corporation of any kind in ways that will help it to operate, in areas such as purchasing of parts and research and development, that are much closer to Canada's industrial goals than may be the case at present.
We have also begun implementing a national program for the electronics industry, including a special electronics fund aimed at fostering expansion in our country of the already highly successful electronics industry. We are implementing a new national employment strategy aimed at bringing about realization of our people's legitimate aspirations for higher skilled employment and meeting the changing manpower requirements of the high growth sectors in the economy. These are also examples of the Liberal government's commitment to working energetically, to bringing the benefits of growth, increased international competitiveness, job creation and enhanced economic well-being to Canadians generally.
They also provide a solid demonstration to the Canadian people today that, unlike the Conservative government which preceded us, this government has adopted an approach to national economic development which is activist. In other words, we are not operating as a passive bystander in the industrial development of Canada but rather as an active player.


Some hon. Members:: Hear, hear!


Mr. Huntington:: Mr. Speaker, I rise on a point of order. This is the first time 1 have risen, but I would have to caution the minister, through you, sir, to not deliberately mislead the House. Because the statements he is making are misleading. There is not a program that he has mentioned here today as a Liberal program that was not-


The Acting Speaker (Mr. Ethier):: Order, please. If the hon. member has facts to prove that the minister is misleading the House, perhaps he should bring them forward; but he should not suggest, which is what he is doing.


Arthur Ronald Huntington: Mr. Speaker, on the same point of order, there is not a program which the minister has taken credit for as a Liberal program-


An hon. Member:: Order.


The Acting Speaker (Mr. Ethier):: Order, please. Members cannot all share the same opinion. I am sure all members would like to debate that point. However, I must say to the hon. member that his turn will come and he will be recognized, but right now the Minister of Industry, Trade and Commerce (Mr. Gray) has the floor.


Herbert Eser (Herb) Gray: Mr. Speaker, it is obvious from all the interest in truth here and from what the hon. member has just said that the truth hurts.


Some hon. Members:: Hear, hear!


An hon. Member:: That is why you have your hands in your pockets.


Herbert Eser (Herb) Gray: Because the announcement of the decision to adopt a proposal for new fighter aircraft and the industrial benefits program was made after the government changed. I participated in that announcement. I made the decision, not my hon. friend. The decision to provide loan guarantees to Chrysler was made by the present government and announced by me on May 10. It was not made by the previous government which dithered for five months and put jobs at risk. The electronics program was announced by the previous Liberal government and the previous Conservative government, but it was implemented only after the present Liberal government came into office.


Arthur Ronald Huntington: Not so, Herb. That is misleading.


An hon. Member:: Listen and learn.


Herbert Eser (Herb) Gray: What I have been talking about provides solid demonstrations, as I have said, that the present government is adopting an activist approach. As I have said, we are not operating as a passive bystander in the industrial development of Canada, but rather as an active player. This is the role we were elected to pursue on February 18. It is the approach to managing and developing the economy which the Government of Canada is pursuing and will continue to pursue in the interests of all Canadians.


An hon. Member:: Where is the budget?


Herbert Eser (Herb) Gray: 1 need hardly remind members of this House that during the nine months following the May, 1979 election when the official opposition formed the government, it specifically shunned, in my view at least, an active role for the federal government in the economy. In fact, it seemed almost incapable of any action at all. More than anything else that government's approach was to pull away from direct involvement in the creation of Canada's economic future.
For instance, it was that government's intention, if it had had the chance, to sell Petro-Canada and thus eliminate a powerful instrument of the government and the Canadian people to ensure the positive development of the petroleum sector, one of our most important economic sectors.
Similarly, its members would have removed the government from the position it occupies because of actions of previous Liberal governments of being able directly and positively to assist the aerospace industry through ownership of de Havil-land and Canadair as well as the nuclear industry through Eldorado Nuclear, along with a number of other important areas of economic activity.


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: I could say now that I rest my case, because while the hon. member opposite says they did everything and they were activist, the other hon. member who just tried to interject said that what I am talking about is not appropriate
uly 14, 1980

for government. Obviously, they did not intend to do anything worth while in these areas for the Canadian people.


An hon. Member:: Tell us about Trident.


Mr. Roy:: What about the Arrow?


Herbert Eser (Herb) Gray: It was also the Conservative government's decision and so, presumably, part of it stance on economic development, to follow the OPEC cartel and make the price Canadians have to pay for oil and gas susceptible to every move of those international oil producers. With one fell stroke they would have robbed Canada's industry of its competitive edge, an edge that we have a right to expect because of our rich energy resources which are virtually unparalleled among industrialized countries.
[ Translation]
In fact, this matter concerning oil prices was vital to our economic revival and it will remain so for a long time. To be competitive on foreign markets and stay in the vanguard of technological progress, Canadian industry must take advantage of everything likely to give it an edge over its competitors. We certainly have a highly skilled labour force. We have also an excellent technological base in most areas where markets are developing. However, we have a problem because of the small size of our market as opposed to our vast territory. We must therefore bank everything on what we have that is most precious, that is completely ours; in other words, our natural resources. This is precisely what the Progressive Conservatives did not want to do when they decided to raise the price of Canadian oil to the international level.

But what else was there in the Conservative program for Canada's economy? Of course, there was a Conservative budget which amounted to the biggest one-time assault on taxpayers' pocketbooks the country has ever seen, which was roundly defeated in this House and at the polls.


An hon. Member:: We do not sneak things in on Friday afternoons.


Herbert Eser (Herb) Gray: And there was the Conservative intention to cede essential jurisdiction with regard to resources and the economy through which the federal government, and in my view only the federal government, can ensure that Canada works well for all its people.
Finally, during the brief Conservative government there was talk of some kind of big conference that would be staged-and I use the word "staged" advisedly-so that the business community and government, perhaps others, could discuss Canada's economic problems and prospects. This talk persisted even as the need for action in the industrial development field grew urgent. As I have said, nothing was done to safeguard the
40,000	Canadian jobs directly dependent on the continued existence of Chrysler of Canada. While nothing was done definitively to launch Canada's microelectronics industry into the ultra competitive world of the 1980s, while nothing was
Economic Development
done to implement a coherent national industrial policy for all Canada, and while little else was done, the Conservative government tried to get ready to talk about all this, but only next fall.


Michael Holcombe Wilson: Who created the unemployment in the first place?


Herbert Eser (Herb) Gray: The approach taken by hon. members opposite in relation to their responsibilities as a government for the Canadian economy was consistent. It was consistent with that age old Conservative ideology which sees government involvement in the economy as meddling in the affairs of the private sector and places absolute faith in Adam Smith's concept of the invisible hand of market forces. Not surprisingly it did not and could not work. For the Conservative brand of nineteenth century laissez-faire is unrealistic and wholly out of keeping with present day requirements for substained and regionally balanced economic growth.
We are, after all, living in a time of economic uncertainty, a period when Canada, like every other country, is having to cope with persistent inflation, interest rates that are still high although certainly lower than they were at the time the Conservatives were in office, a slow rate of economic growth, increasing energy costs and the threat of shortages, as well as higher unemployment than anyone wants. Moreover, as we look to the immediate and medium-term future, Canada confronts the bleak prospects for the world economy laid out in last week's OECD report, we face growing competition in international markets in the wake of the GATT agreements, and we can expect to encounter the results of substantially increased government support for industrial development on the part of our major trading partners.
In these circumstances, probably more than at any time in our history, there is for the Canadian government an especially formidable responsibility to be an energetic participant in the economy and to vigorously promote and support optimal development and utilization of the country's human, natural and capital resources.
The Liberal government quite fully appreciates the number and magnitude of the problems which challenge our economy. We know there are no magic or simple solutions, particularly at a time when our major customer, the United States, is in a deep recession. However, we have assumed the responsibility which we believe to be incumbent on the federal government to use all practical means available to protect and enhance national economic and social well-being to the maximum realistic extent possible in our interdependent world.
This is the commitment which we have made to the Canadian people. It is a commitment which we intend to fulfil in accordance with the five principles of industrial development policy which were spelled out by the Prime Minister (Mr. Trudeau) during the last election campaign. Those principles are to capitalize on our energy base to build an industrial sector that is competitive worldwide; to ensure that the federal

July 14, 1980
Economic Development
government is an active player in industrial development; to strengthen our research and technology capacity; to encourage independent Canadian-owned enterprise; and to expand Canadian control of our economy and at the same time increase the benefits to Canadians from the foreign investment that is already here.
1 am presenting to cabinet very shortly a proposal for implementing these principles and for giving Canada a far more comprehensive and integrated framework for industrial development policy than we have had in the past. The elements of this policy framework will fulfil the commitments made by the Prime Minister during the election campaign and by this government in the throne speech. The approach which 1 believe in and which promises to deliver the greatest benefits to Canadian industry, workers and the economy is one which recognizes for government-in co-operation and in consultation with the private sector-an active involvement in the economy and in identifying and developing the strengths of this great country.
For example, through a made-in-Canada price for oil, we will make our energy resources more of an asset than ever before. We have rejected the international cartel price for oil and want to negotiate a fair price, a Canadian price which will ensure companies in every region of Canada a competitive edge in international trade. We want to ensure as well that the large scale energy and other projects which will be undertaken during the 1980s provide Canadian companies with a market for their goods and services-for instance, that the steel is sourced in Canada and that available Canadian workers and expertise are fully used. In this regard I want to say that the northern pipeline is a project with the potential to bring great industrial benefits to Canada. I believe that Canada should have the benefits of the pre-build and of the entire pipeline and a lot more besides.
Another of the methods which we will use will be to target federal government procurement more toward Canadian companies so that taxpayers' money can make a direct contribution towards creating industrial jobs, stimulating international competitiveness for our industries and spurring growth. Each year, the federal government spends billions of dollars on goods and services. We are making new and substantial efforts to increase the number and value of these government purchases that come from companies that operate in Canada and employ Canadians. This policy is already under way and will shortly be expanded and strengthened.
[ Translation]
Mr. Speaker, one of the ways in which we intend to participate in the development of our economy is by sparing no effort to increase our penetration of foreign markets. My department is in the process of setting up two new agencies which will allow us to expand considerably our participation in international trade; on the one hand, we will have an export development council composed of members from the private sector whose role it will be to make recommendations concerning our export trade policies. And it is my colleague the Minister of
State for Trade (Mr. Lumley) who is setting up this important initiative.
On the other hand, Mr. Speaker, we will have a national trading corporation which will help our exporters. This concerns large as well as small and medium-size businesses.

I want to confirm that one of the ways this government intends to take a very active participation in the development of our economy is through trade promotion. We are in the process, through the efforts of the Minister of State for Trade and Minister of State for Small Businesses (Mr. Lapointe), of developing the concept of a national trading company to improve the ability of Canadian industry to compete abroad. We are also actively developing more effective export financing programs.
Our economic development strategy will also emphasize support and encouragement of more advanced technology in Canada. We will promote and encourage our greatest resource-the well-trained, highly-educated and talented labour force in Canada.
Throughout the country, Mr. Speaker, high technology is recognized as the vital key to contemporary national economic growth and prosperity. That is why the throne speech reaffirmed the government's commitment to increase Canada's over-all expenditures on research and development to 1.5 per cent of the value of the gross national product. We will encourage the growth of high technology, not only in the advanced technology sectors, but also in those subsectors of the mature industries where there is substantial potential for growth.
Also, this government is committed to ensuring that foreign investment, to the extent we require it, adds to our ability to take full advantage of the opportunities that are opening up to us. We will both promote the development of strong Canadian-owned businesses and ensure that foreign-owned companies operate in accordance with Canadian economic goals. We will encourage small and large Canadian businesses to grow and become more competitive and ensure there is a maximum of significant benefits from the foreign-owned companies.
It is my intention to introduce to Parliament on behalf of the government, after Parliament resumes in the fall, a package of measures designed to strengthen Canadian participation in the economy and improve the performance of the foreign-con-trolled firms in that economy. These measures are, first, that FIR A be required to publish, in advance of a decision to allow or disallow, notice of larger acquisition proposals subject to review under the act. The present act precludes the government from making any information public until a decision is announced. This has often been seen to work against the national interest because there are instances where Canadians, if they were aware that a business was for sale, would be willing and able to make a bid which might be better all round for Canada than the foreign bid.
Second, the bill would provide that financial assistance be provided to Canadians seeking either to compete against bids
July 14, 1980

by non-Canadians to acquire Canadian businesses or to repatriate foreign ownership of assets.
Third, it will provide that F1RA undertake a program of periodic reviews of individual performances of large foreign-owned subsidiaries operating in Canada in key areas like research and development and export activity.
Add to all these government actions, and more, our favourable exchange rate, and I think you have the combination for a strong and vibrant Canadian economy; and this is our fundamental goal for the 1980s.
Moreover, unlike the Conservatives who congenitally prefer inaction and fumble badly when they do manage to act, we have not been content to wait until our industrial development framework was completed, but rather where measures made sense we have moved ahead. For instance, this was the case in the implementation we began of the program to assist the development of the electronics industry. Consequently, for the past four months we have provided decisive evidence to the Canadian public that they made the right choice in getting rid of the Conservative government and electing a majority Liberal government on February 18.


Some hon. Members:: Hear, hear!


Herbert Eser (Herb) Gray: I think we have given the public confidence that there is in office a federal government which is alive to its concerns, a government which does not intend to give away a central role, a national role, in the development of the economy and is prepared to take immediate action where necessary in the public interest.
Foremost among reactions by this government was our successful effort in joining with others in meeting the threat to our political union posed by the PQ referendum. That referendum clearly demonstrated that a majority of all Quebeckers want to be a part of this country and do not want to turn away from their fellow Canadians with whom they share a significant past and can share a brighter, prosperous future. To me this was the major message of the referendum and we should be pleased with it, especially since an important part of that victory was the role played by the federal Liberal statement of our economic future.
But the referendum has not by itself, nor could it have done so, answered a variety of other questions that are important to Canada's continued viability as a sovereign, strong and economically vital nation. For instance, it has not told us whether Canadians in every region want Canada as a whole to be greater than the sum of its parts or merely equal to the sum of its parts, although I think Canadians believe, as I do, they want a Canada with a national purpose and a strong national government. The referendum has not told us whether the very real differences among our people can be reconciled and accommodated in a renewed federal system that is strong enough to meet the political and economic challenges of the 1980s. But I, for one, believe they can. These are the challenges the government is addressing during this period of
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constitutional discussion. And the preservation and development of our economic union now becomes of major importance.
Mr. Speaker, I have already mentioned by way of example the industrial offsets of the new fighter aircraft and the assistance to Chrysler as indications of how this government is prepared to take decisions which the previous government was unable or unwilling to take in the interests of all Canadians.
To conclude, I want to say that with the achievements we have already carried out in industrial development we have laid a solid foundation for a great deal of further action within the framework of a comprehensive and integrated national development policy. With the policies we have put forward, with the policies we have begun to implement, with the action we intend to take, we shall be creating jobs and stimulating growth throughout Canada. We want to build, we will build, a better Canada for all Canadians, and I think we are well on our way toward accomplishing that goal.


Some hon. Members:: Hear, hear!


Gordon Edward Taylor: May I ask the minister a question?


The Acting Speaker (Mr. Ethier):: Would the minister permit a question?


Herbert Eser (Herb) Gray: I would be happy to do so, if there is time.


The Acting Speaker (Mr. Ethier):: This can only be done with the unanimous consent of the House. Is it agreed?


Some hon. Members:: Agreed.


Gordon Edward Taylor: 1 would ask the minister: is that not the same speech he made a few years ago, just before he was booted out of the cabinet?


Some hon. Members:: Oh!


Herbert Eser (Herb) Gray: No, Mr. Speaker. This is the speech 1 made which helped get the hon. member and his party booted out of office before they ruined the economy.


Some hon. Members:: Hear, hear!


Mark Willson Rose: Would the minister permit a further question?


The Acting Speaker (Mr. Ethier):: Again this would require unanimous consent.


Some hon. Members:: Agreed.


Mark Willson Rose: The minister talked about the great benefits of the $3 billion industrial offsets associated with the F-18A fighter aircraft. Since the figures which he released in a paper on April 10 stated that 47 per cent of the offsets went to Quebec and 41 per cent to Ontario, with only 12 per cent to the rest of Canada, how much of that benefit accrues to British Columbia in terms of industrial offsets?


Herbert Eser (Herb) Gray: The figures the hon. gentleman mentioned reflect an analysis of how benefits might be distributed in the light of

July 14, 1980
Economic Development
the present distribution of the aerospace industry in Canada, f am working to have all regions of the country, including ' British Columbia, play an active part in taking advantage of the industrial offset opportunities.
The exact distribution to British Columbia will depend to a major extent on how active British Columbian firms are in bidding for opportunities. I will be happy to see them take advantage of these opportunities and I am already working with them in this respect.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Dartmouth-Halifax East (Mr. Forrestall)-Shipbuilding-Reduction of subsidy; the hon. member for York-Sunbury (Mr. Howie)-Regional Economic Expansion-DREE grants for development programs in New Brunswick; the hon. member for Regina East (Mr. de Jong)- Health and Welfare-Health hazards in certain chemicals and pesticides.


BUSINESS OF SUPPLY
[Stage Direction]
The House resumed consideration of the motion of Mr. Andre:
That this House condemns the government for its failure to develop and implement a coherent economic development policy.
Maurice James Harquail: On a point of order, Mr. Speaker. This is an opposition day and we all agree that the opposition should have this opportunity. They have brought forward this motion, but I think it should be noted that throughout the minister's speech there were interruptions and they would not allow the minister to present his speech in a reasonable, normal fashion. 1 think it should be observed that those interruptions were brought forward by the very opposition party which brought in the motion today.


An hon. Member:: Brilliant!


Hon. Michael W'ilson (Etobicoke Centre):: Mr. Speaker, this afternoon we have seen a very good example of what we do not need in industrial strategy, industrial development and the industrial development debate in this country today. There is a very good reason why the minister was interrupted from
this side of the House. The minister in a very important area to this country chose to be blatantly partisan and, in addition,
' deliberately misleading to this House on a number of issues. That is something we do not need at this time. We need cool thinking and action on the very important issues which are facing the country today.
With respect to the new fighter aircraft there is a very good reason why action was not taken. The day before the Clark government was about to take that decision the government was defeated. That put the decision off for that three or four-month period and that is why we lost valuable time.
Things were moving along very well on the Chrysler decision but there was an awful lot of delay after the present government took office because of the dithering the minister who has just spoken chose to get involved in. This was in order to look after, the people in his own constituency as carefully as he could without having regard to the broader issue of the country, in a very important decision. But I will come to that in a few minutes. What I was concerned with, and the questions I was placing in the House, was not the validity of the decision but the impact of that decision on over-all economic development in Canada.
Two other matters which the minister raised in his remarks were deliberately misleading. I personally announced the formation of the Export Development Board which he, about five minutes ago, chose to take all for his own. That decision was taken by the previous government and was announced in January, and the hon. gentleman knows it.
The other matter I wish to draw to the attention of the minister is in the area of the electronics fund. My hon. friend from Capilano (Mr. Huntington), the former minister for small businesses, announced-


Gérald Laniel: Mr. Speaker, once again I rise on a point of order. I think the House cannot allow hon. members to continue using unparliamentary terms as those which the hon. member for Esquimalt-Saanich (Mr. Munro) used a little earlier and those which were repeated two or three times by the hon. member for Etobicoke Centre (Mr. Wilson) who persists in using the terms-
[ English]
-"deliberately misleading the House", which are words which are unparliamentary and which have been found to be unparliamentary for years. 1 want to refer you, Mr. Speaker, to Beauchesne's fifth edition at page 109 where this is made very clear. The hon. member might wish to use another expression which is permitted in the House. He might feel that the minister is misleading the House, but he cannot say in this House that the minister is deliberately misleading the House.


Otto John Jelinek: 1 think he is.
July 14, 1980


The Acting Speaker (Mr. Ethier):: Order, please. 1 think the parliamentary secretary makes a very valid point. 1 did hear the hon. member for Etobicoke Centre (Mr. Wilson) use the expression "deliberately misleading the House," and I think it would be very parliamentary and honourable if the hon. member were to withdraw those remarks.


Michael Holcombe Wilson: Thank you very much, Mr. Speaker. I did say "deliberately misleading". I admit that, and I would be very glad to withdraw that and agree that the minister was not deliberately misleading. He was misleading out of ignorance or stupidity or for some other reason.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: With regard to the other matter to which the minister referred about which he was misleading and incorrect, he said that the economic development conference we were going to be having was to be held some time this fall. He knows perfectly well that it would have been held in the early winter of this year. What we have seen happen as a result of this government's taking office is a loss in time which has amounted to billions and billions of dollars lost in economic development activity through a continuing deferral of a comprehensive energy policy which we had introduced and on which we were very close to having total agreement between all the provinces of the country. All we have seen over the past four or five months is continuing argument and disagreement between the different levels of government, with the result that everybody in this country suffers, and to me that is one of the most damaging elements of any industrial strategy or lack of strategy.
Finally, let me quote from "How Ottawa Decides" by Richard D. French who, I understand, used to be an official in the Privy Council office in the Trudeau government. Let me quote from page 145 as follows:
The Clark reforms represented a coherent attempt to resolve certain persistent flaws in the central decision-making process. The arrival of the new government, headed by a Prime Minister with the courage to innovate despite a precarious political situation, created a window through which a breath of fresh air ventilated the corridors of power. Significant features of the Clark reforms appear likely to be retained by the new Trudeau administration which arrived in February, 1980.
I am glad the minister has seen fit to accept many of the innovations brought in by the Clark government. I wish he had the courage and the good manners to give credit where credit is due.
Let me move from here to make a contribution to this debate in what I would regard as a non-partisan manner, in such a way as to bring forward some proper thinking in what 1 think we all agree is a very important area for the future of this country.
We are moving into some very difficult times in the 1980s. There are some great economic opportunities in the long run but, unfortunately, in the short run we have some very real problems and we have to face up to those today. We have heard from my colleague, the hon. member for Calgary Centre (Mr. Andre), about previous attempts at trying to reach some
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form of economic development strategy, and 1 would like to discuss some areas in which 1 feel this government should be moving today.
I think it is important that the government put its ideas down on paper because we have seen a clear change in direction from previous Liberal administrations. The Prime Minister (Mr. Trudeau) has said that his government will ensure that the federal government is an active player in industrial development rather than just a passive referee. He has also said that the government will be in active participation when the public interest requires it. The minister himself has indicated a clear direction toward economic nationalism in this country. What we do not know is how the government is going to achieve this, and for that reason it is critical that this be put on paper so that the people in the country understand which way this government is intending them to go.
Harking back to the end of 1975, the Prime Minister indicated very clearly the direction in which he wished to take this country. He said that we were going to have more government and that we had to get used to bigger government in our lives. What concerns me today is that this government is trying to sneak in this policy without proper debate, and I look forward to participating, hopefully this fall, in a debate in this area. Because I do not think it is right for the government to bring in ad hoc decisions such as the Chrysler bail-out, the extension of the shipbuilding subsidies, the extension of shoe import quotas and changes to the Foreign Investment Review Act, without our having an opportunity to discuss the total strategy which the government is proposing to follow.
From time to time during the earlier months of this Parliament I tried to elicit from the minister some of the ground rules and yardsticks by which he was going to be making decisions relating to the bail-out of sick companies or assistance to dying industries. To date the only basis on which I can see the Chrysler decision was made was that it was big and involved many jobs.


Daniel Joseph MacDonald: And it was in Windsor.


Michael Holcombe Wilson: My hon. friend says that it was in Windsor, and that is probably the most important basis. I can understand if jobs are involved, but there was very little else in the minister's statement to indicate the basis on which these decisions are to be made. If this government is going to become more and more involved with poking its finger into the workings of the economy, we must know the basis upon which the decisions are going to be made. Any proposal or request for help from the government will be very hard to turn down based on the merits of that particular proposal itself because there will be jobs at stake and there will be communities affected. What we need to have are some ground rules as to how we take those sick companies from the state they are in today at the time the proposals are made to a point where they can make a positive contribution to economic development in this country.
I would like to talk briefly about the proposals regarding the Foreign Investment Review Agency. The Clark government

July 14, 1980
Economic Development
was supportive of the Foreign Investment Review Agency and was in the process of implementing administrative changes to assist in the efficiency and effectiveness of its operations. Unfortunately, as I understand it, nothing has happened with these proposals. They are collecting dust at the back of a filing cupboard over in the C. D. Howe Building.
The other thing we had proposed was the formation of a special committee of the House of Commons to study the operations of FIR A against the background of foreign investment in this country today. Many things have changed since the minister, in a previous incarnation, did his report on foreign investment in this country. One thing is that we have one million plus people unemployed today, and it is for that reason that we have to take a very careful look at how the Foreign Investment Review Agency is to operate.
I urge the minister to state with greater precision the direction he wishes FIR A to take, because one of the problems we have seen in the past is that FIRA has been allowed to drift. There has not been sufficient political guidance as to the direction that the government of the day wished FIRA to take. Everyone-FIRA and Canadian and foreign businessmen- would benefit if the government made a clear statement as to how it interprets two words in the act. Those words are "significant benefit". The act itself is too general. Canada needs a qualitative statement which will shift depending upon the economic and industrial circumstances of the day and which sets out the interpretation of the government of the day of what "significant benefit" means.
The government has stated clearly its intention to strengthen FIRA in three areas. I would like to comment on each of these.
They would have FIRA monitor the operations of foreign owned companies in this country. I urge the government to move slowly on this new mandate. This is a most sensitive area of intervention since it involves government direction over the decisions of management. This would be a new departure for any government. Government should also limit its activities to the larger companies, since this is the area where, if there are problems, the greatest benefit can be achieved.
Prior to embarking on this policy, the government should advise the companies affected in a very clear fashion what the guidelines are. The current principles of international business conduct should be updated and, in areas, expanded upon. These should be submitted to the companies involved well in advance. It would also be useful if the government embarked on a degree of consultation with organizations, such as The Business Council on National Issues, the Canadian Manufacturers' Association and others, as to how to proceed from here.
When 1 was recently in Australia, I met with the foreign investment review board in that country to disucss with them how their approach to foreign investment differed from ours. One of the areas which I found fascinating was the fact that decisions are handed down by a tribunal, which includes retired businessmen as well as the commissioner for the government agency over there. The involvement of these businessmen was described to me as being "astonishingly successful".
I strongly suggest to the minister that this approach be used in the monitoring activities that he has in mind, because private sector representatives could assist greatly in developing the right approach and the proper tone for the monitoring process. In addition, where there are problems 1 believe a private sector individual will have much greater success in seeking action from the company in question than a bureaucrat who has no direct business experience. 1 say this because it is easy for a confrontation to develop between FIRA on the one hand and the business affected on the other.
The second area where the government proposed to move is in announcing publicly proposed acquisitions. Again I urge the minister to do so only with those large acquisitions and other forms of acquisitions where there is real significance to the economy. It is essential that the threshold level and other ground rules for such notification be announced beforehand so that the companies affected would be clearly put on notice.
The third area of proposed action is in making financial assistance available to Canadians wishing to take over foreign-owned companies. In this area, the government is putting itself in the position of being both banker and judge and, in certain cases, possibly be broker as well. It is obviously very difficult to be objective in these circumstances. So I recommend strongly that the government separate any such activities from FIRA and, if possible, from the Department of Industry, Trade and Commerce. Because I am concerned about the effects of this third policy, I suggest that the government put a clear limitation on the amount of loan guarantees they wish to make. We must not forget that this money would be disbursed without creating one new job in the country. It will also result in funds leaving the country to be invested elsewhere.
In addition to the dollar limitation, I suggest that the government require from Canadian companies a business plan which would set out how the Canadian company would operate in a clear way to bring significant benefit to Canada. There is no point in simply satisfying our nationalistic emotions if, at the same time, there is not a clear plan of how economic development would be improved in this country as a result of the buy-back policy.
Of greater importance, however, than strengthening FIRA would be policies to encourage a greater degree of Canadian ownership in this country. The Prime Minister, in his speech immediately prior to the election, spoke in a vague way of policies to encourage Canadian ownership. I urge the government to bring these forward at the same time as its policies to strengthen FIRA. In this regard the government might consider tax free financial instruments to finance takeovers of foreign firms. They might well embark on a policy of moral suasion in certain industries, seeking companies themselves to take action to reduce the level of foreign ownerhsip.
I have one final point to make. Since the government is looking to FIRA to take on an expanded role, I urge that proper funding support be provided to the agency. In recent months the workload has increased, the backlog has increased,
uly 14, 1980

nd funding support has been reduced. I do not know whether his is a deliberate attempt by the government to discourage foreign investors because of the slowness of the process. If so, that is a dangerous policy at a time of high unemployment. F1RA should be staffed adequately with professional people in order to ensure that its mandate is effectively and expeditiously carried out.
Another area of concern which I believed should be covered in an industrial strategy is the area of foreign exchange policy, particularly as it relates to the manufacturing industry. Some weeks ago I put a question to the minister in an attempt to ascertain his view on this important subject. Either he did not understand me at that time or he chose to ignore my question, because I did not get an answer. It is essential that a clear signal be given that the manufacturing industry in Canada will not be sacrified in favour of the development of energy megaprojects in this country.
In recent months we have seen a tendency for the government to allow the exchange rate to increase in response to investment flows for energy projects. The resource sector in this country has done extremely well in recent years, but the manufacturing industry has not, as witness the $17 billion deficit in trade and manufactured goods. Management in the manufacturing industry must be assured that the value of the Canadian dollar will continue to reflect the competitive position of the manufacturing industry in this country. Otherwise they will not proceed with investment decisions or trade development initiatives which will lead to an improvement in our manufacturing trade deficit. Again, let us not forget that these investment decisions and trade initiatives will lead to improved employment prospects in this country.
Last fall I asked officials in the Department of Industry, Trade and Commerce to develop a competitive index which would clearly show the competitive position of the manufacturing industry in this country relative to the United States and others competing with us. I had intended this to be issued on a quarterly basis to be used as an early warning signal if we were beginning to lose our competitive position. I also expected it to be useful in the management of our foreign exchange policy so that the level of the Canadian dollar would not get out of line relative to the manufacturing position of this country. There had been one confidential trial run on this index before the government changed, but since then 1 have seen nothing. I encourage the minister to see whether he can bring this forward.
On the question of our manufacturing deficit and foreign exchange policy, 1 believe it would be useful to consider the activities of the import replacement division of the Department of Industry, Trade and Commerce. One of the reasons Canada has a $17 billion trade deficit in manufacturing goods is that we are not purchasing sufficient manufactured goods in this country. I believe the government should place a considerably greater degree of importance on this division of the department. The previous industry, trade and commerce critic has expressed some interest in imports replacement, and I hope the minister will follow through on that interest.
Economic Development
In a number of speeches I made last fall I drew the attention of businessmen to the new trading environment as a result of the multilateral trade negotiations. I suggested there was a real opportunity for the operations of multinationals to become more specialized as a result of the reduction in tariffs and of the rationalization which was bound to occur as the MTN was implemented. Clearly one of the areas of opportunity for Canadian subsidiaries is to obtain world product mandates from their parent companies. There is no reason why in many industries Canadian manufacturers cannot be fully competitive with their counterparts in the United States and in other countries. There are many examples of this, the most prominent being Westinghouse, Canadian General Electric, Black and Decker, and the office equipment industry.
Last fall I requested the department to prepare a paper outlining the opportunities, problems, past case studies and operating guidelines of companies with world product mandates. I sought this paper because I felt it would be useful for Canadian management to develop a better understanding prior to the full implementation of the MTN in order that they might be better armed to go to their parent company seeking a world product mandate on certain products.
Also I ask the officials to consider ways in which the government might assist and support Canadian management who wish to make presentations to their parent companies. Again, I do not know what happened to the incentives-


The Acting Speaker (Mr. Ethier):: Order, please. 1 regret to interrupt the hon. member but his allotted time has expired.


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of State (Small Businesses)):: Mr. Speaker, I am pleased to be involved in this motion before us today. I suggest to the House that the motion is ill-conceived and shortsighted, in view of the fact this Thirty-second Parliament was only elected on February 18, 1980, or 146 days ago, and already is in its thirteenth week of sittings. By contrast, under the previous administration 146 days after the Thirty-first Parliament was opened the House had sat for only slightly over two weeks. These past weeks since April 14 have been busy and productive. As of this date, I am proud to note that 23 pieces of legislation have passed second reading and 18 pieces have received third reading.


Some hon. Members:: Hear, hear!


Ralph Ferguson: Further, it is interesting to note that our Canadian trade surplus for the month of May was $577 million. Of course, this is at a time when perhaps there is a reluctance to deal with some nations of the world that do not have the same sense of human or international values which we have in our society in this great nation.
As we look at the various comparisons against which we measure our performance, I will not say anything about this Thirty-second Parliament in comparison to the Thirty-first. Our legislative record to date speaks for itself. We will let

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history be the judge in the years to come. But the comparisons worth noting are comparisons relating to our economy, our standards of living, our system of social welfare, and of course, in relation to Canada itself, comparisons to other countries of the world.
Canada is the greatest country in the world, the envy of the free world. However, bearing in mind that we are a young nation in comparison to other nations and cultures, we are a vast nation in geographical terms and a nation blessed with a diversity of potential, human and natural potential. By comparison to other countries of the industrialized free world, Canada's national debt in relation to gross national product in
1979	stood third best, well ahead of the United States, Britain and Italy. Over the ten-year average from 1968 to 1978, we stood second best among the nations of the industrialized free world in comparing our national debt to gross national product. It is an envious record, but it is based on sound economic management and firm direction by stable government.
But we cannot sit and let technology pass us by; nor can we on this side of the House accept the doom and gloom projections from across the floor. It reminds me of the children's story and Henny Penny when they shouted, "Run, run for your lives, the sky is falling". In spite of all the gloom and doom, by further comparison our trade surplus from May 1979 to May
1980	is more than double that of May 1979. In May 1979 our surplus was $258 million; in May 1980 it was $577 million, or more than double.
If we are to build a better economy in Canada, the businessman, in particular the small businessman, is the backbone or linchpin of this approach, quite simply because among Canadians he is the most dynamic, the person with the ideas, the risk taker. Any society founded on such qualities is certain to be able to improve its lot. Consequently it is quite obvious that small and medium-sized businesses are extremely important in all this industrial strategy for economic nationalism. If we look at the economic picture of Canada, 95 per cent of the exclusively Canadian firms consist of small and medium-sized businesses.
The Speech from the Throne recognized the need for active direction of the Canadian industrial economy so that it responds vigorously to the opportunities and challenges of the eighties. Our intent was acknowledged in that speech to develop economic policies which will provide jobs, spur growth, improve regional balance and promote Canadian ownership of the economy. We intend to capitalize on our energy base in order to build a world-competitive industrial sector.
To those members of the House who saw the premier showing of the film last week on the new Canadian plane, the Challenger, this is the type of a world-competitive industrial sector at which we are looking. I am referring to Canadair and especially the de Havilland Aircraft company with their Dash series. These planes are distinctly Canadian and have returned a sense of pride to our aircraft industry which was destroyed back in the 1960s when the Avro Arrow was scrapped. The Liberal government has provided the incentives and the means
to rebuild this industry and restore the sense of pride that w Canadians are among the best in the world.
We intend to ensure the federal government is an activ player in industrial development rather than a passive referee. We do not intend to disband our Crown corporations which have developed expertise and technology and then sell them back to Canadians who already own them, or worse still, allow them to fall into private hands that could in turn sell out to foreign corporations which would capitalize on our investments in the future.
Canada's research and technology capacity will be strengthened. We will be encouraging independent Canadian-owned enterprise. It is in this area that we have an exciting contribution to make to the world. Among those pieces of legislation passed by this Thirty-second Parliament are amendments to the Small Businesses Loans Act, the Federal Business Development Bank Act and the Farm Improvement Loans Act that provide the background of financing for our small business people and our farmers. But the exciting contribution is the potential of our renewable resources being used to feed a hungry world and to provide leadership, not only in food, which is a renewable resource, but in energy in a renewable form as well.
When we examine the agribusiness sector, we have to include the small business sector which provides 42 per cent of our Canadian employment in the private business sector. We must relate these to those small businesses providing the services to the agriculture industry. The manufacturing sector, the processors and the transportation sector all service this primary industry which contributed almost $14 billion to our economy in 1979. But of our total exports in 1979, only about 10 per cent were agricultural, or about $6.1 billion worth. As indicated in the Speech from the Throne, we will establish a Canadian agricultural export corporation to focus on areas of export potential, to allow our producers of Canada to work together as partners within confederation, to seek out new markets and offer continuity of supply of a quality product to other nations of the world on a long-term basis.
We are one of the few nations of the world that is a net exporter of food. We are the only nation with the legislative mechanisms which will enable us to plan our production to specific markets, either domestic or exports. The spin-off effects of such a venture will benefit all society by providing new jobs and opportunities in the whole agribusiness sector. One of those effects is that, in the long term, we will be able to bring the grain combine manufacturing plant at Brantford, Ontario back into full production.
As noted earlier, our farm cash receipts for 1979 were almost $14 billion and we exported $6.1 billion worth of food. By simple deduction this indicates Canadians must have consumed $7.9 billion worth of Canadian grown food. Based on farm gate prices in 1979, if we assume that each Canadian eats three meals a day, the farm gate cost per meal is 30 cents for food produced and consumed in Canada. This simple illustration should verify that Canadian farmers are the most efficient in the world. Provided with the mechanisms to sell as
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Canadians, rather than as one province competing against another for foreign markets, we can expand our export sales and further increase our trade surplus.
I am pleased to point out that this concept, developed by people on this side of the House in consultation with producers and organizations, is endorsed by the Canadian Federation of Agriculture, and that endorsement is included in the submission which will be presented to members of the Standing Committee on Agriculture on July 16 of this week. This move alone is a step in the right direction to update our economic development policy.
Farmers in Canada are ambitious. They like to produce, and through the Canadian Agriculture Export Corporation we intend to give them that opportunity. Before i leave this topic of economic development, I would like to point out that the U.S. department of commerce has recently published a report on the investment intentions of foreign affiliates of U.S. companies. Evidently they intend to expend SI 1.3 billion in Canada in 1980. This fact alone indicates the confidence of other nations, brought about by the return of responsible and stable government in Canada. But we must exercise caution in this area to ensure that we expand Canadian controls over our economy while increasing the benefits to all Canadians.
In response to the hon. member for Kootenay West (Mr. Kristiansen), I believe that the minister has effectively outlined his intentions to beef up FIRA. Hon. members will recall that back in 1966 the U.S. government issued some direction for the guidance of U.S. multinationals and other investors. This led to the promulgation, partly as a defence measure, by the Canadian government of a set of guidelines for Canadian subsidiaries of foreign firms, the so-called Winters guidelines. In 1975 these guidelines were revised and updated and referred to as "New Principles of International Business Conduct". Both the 1966 and the 1975 versions outlined in general terms Canada's expectations of foreign-controlled enterprises in such matters as export effort, sourcing in Canada, and so on. Nor is Canada alone in this area.
Aside from the U.S. action in 1966, many other countries have from time to time provided guidance of this sort. Most significantly, the Organization for Economic Co-operation and Development which, as hon. members know, includes in its membership all non-communist developed countries, issued in 1976 guidelines for multinational enterprises. They place a good deal of stress on the need for foreign subsidiaries to observe and, as far as possible comply with, the policies and priorities of host country governments, that is to say, of the governments of the countries in which foreign subsidiaries carry on their operations. In a sense this provides a framework, if any is needed, for a measure of the type the Canadian government clearly has in mind and to which the minister so eloquently referred earlier today.
In closing, I would like to suggest that in total perspective Canada has a coherent economic development policy, and to those of us who have taken the time to make the comparison to
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which I referred earlier, and when we consider the proposals which I have included in these remarks today, Canada ranks among the leaders in the free world.


Mr. John Thomson (Calgary South):: Mr. Speaker, I find it strange that the hon. member who last spoke would end his remarks on the note that Canada considers itself a world leader.
In looking at a press quotation of the OECD which was published the other day, they say with regard to Canada:
As a result, some Canadian economists believe the OECD forecast to be slightly too optimistic, with a consensus developing that Canadian real GNP will actually decline by about 0.5 per cent in 1980.
Nevertheless, the OECD forecast presents a gloomy picture of Canada's economic outlook.
Canada is expected to be the only country of the seven major industrial nations, including the United States, Britain, France, West Germany, Italy and Japan, not to show a decline in its consumer price inflation rate over the coming 12 months.
The OECD expects the inflation rate to rise to 10 per cent in the second half of 1980 and stay at that level in the first half of 1981.
In addition, Canada will be the only one of the seven nations to show a deterioration in its current account balance during the 12-month period. Canada's current account deficit, which had narrowed to $4 billion at annual rates in the first half of 1980, is expected to be $7.4 billion during the 12 months ending next June 30.
It is hard for me to understand how the hon. member can say that this presents a very optimistic view as to where Canada is going. I heard the Minister of Industry, Trade and Commerce (Mr. Gray) say earlier what his government would do for Canada. I would like to ask him what this Liberal government has done to Canada over the last 15 years? I say that the Liberal government involvement in the Canadian economy over the last 15 years has ruined the Canadian economy. We are no longer competitive, and that is the problem with our trading position, which is deteriorating seriously and rapidly.
Our unemployment situation is deteriorating and is continuing to deteriorate through the policies of the Liberal government. It talks about economic nationalism. Economic nationalism is a sickness and a disease. The Liberal government believes that Canada can live as an island unto itself, that 24 million people can live in this world and be economic nationalists. That is absolute rubbish. This is the government which has given the Canadian people a national energy policy. What policy? It is a sham.
The only thing which the Liberal government, and particularly the Minister of Energy, Mines and Resources (Mr. Lalonde), have done is to fan the flames and to warn the provinces by comparing the actions of Alberta to the separatist motives in Quebec. That is certainly not a good way of going about getting the provinces to agree. The Minister of Transport (Mr. Pepin) has suggested that Alberta is engaged in a war over economic sovereignty and compared it with Quebec. Is it any wonder why westerners today cannot understand the federal government and its policies? W'hy is it that westerners must pay at least internationally competitive prices and, in many cases, more for commodities which are sold to them from eastern and central Canada, but they are not entitled to
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fair commodity prices for their wheat and oil? What is fair about that?
At the same time hon. members opposite deny oil price increases to realistic levels. As a result they are scuttling economic development in Canada. As a matter of fact, with regard to the two mega projects which Alberta is trying to get off the ground, the Alsands project and the Cold Lake heavy oil project in Alberta, I am advised that the delay in these two projects is costing the Canadian economy $25 million every day.
The Prime Minister (Mr. Trudeau) has said that sharing is what Canada is all about. Alberta must share. The producing provinces-Alberta, British Columbia and Saskatchewan- must share with the rest of Canada. Since 1973 Alberta has forgone in excess of $17 billion in revenue as the result of underpricing of its oil. That happens to be worth $8,500 for every man, woman and child in the province of Alberta. That is sharing? The government of Alberta has every right to insist on a fair deal and a realistic price for its energy. It has every right to receive its legitimate share of the revenue. Surely it is not un-Canadian to defend this position, a position which it was guaranteed under the constitution of this country. It is defined in the British North America Act that the producing provinces shall have the right and are entitled to those resources. Now the government wants to change the rules in midstream. The hard part of it is that oil is a diminishing resource. Once it is gone, it cannot be replaced. It is like a capital resource and very different from manufacturing something. When that oil and gas are gone from Alberta, there will be nothing left but bald prairie. That is what the Liberal government is asking us to do-to be farmers and cattle raisers. They are telling us that when the oil is gone we must get back to raising cattle and growing corn. But we want something better than that, Mr. Speaker, a lot better, and we intend to use those funds for the benefit of all Canadians. We want to be part of a Canadian economy and we want to have an industrial base in Alberta: We are going to have it, Mr. Speaker.
There is an opportunity ahead of us. The Canadian economy is in difficulty in terms of balance of payments, in terms of trade, in terms of fiscal deficit. There is no aspect of our economy that is not in serious trouble and deteriorating. The Liberal government must bear responsibility for that. We have had 15 years of Liberal mismanagement.
But we have a chance, Mr. Speaker. Today Canada desperately needs an economic shot in the arm. We simply cannot afford to underutilize any major asset of the country. Western Canadian gas can do for the country what North Sea oil has done for Great Britain. Our large and enormously valuable gas reserves must be utilized for the benefit of all Canadians. It is important that we do not fumble the ball because we may not get another chance.
The Alaska natural gas pipeline is of absolutely crucial importance to the Canadian economy at this time. There is no
project in the immediate future that has more economic significance for this country. It is absolutely essential that the pre-building of the western leg of the pipeline which is now being considered by the cabinet be approved immediately so that construction can proceed. With Canada moving quickly into a period of economic recession, and unemployment rising dramatically, and with a deteriorating balance of payments, we are fortunate to have the opportunity to build a pipeline at this time which is of such enormous importance to the Canadian economy not just in terms of the present economic impact but the future health of our economy for many years to come.
While the pre-build is vitally important in terms of the health of the oil and gas exploration industry, it is equally important in terms of jobs and economic activity in all parts of the country. It means a positive impact on our balance of payments amounting to $2 billion per year, and will reduce the federal fiscal deficit by an estimated $1 billion per year. In terms of employment the project will create, between 1980 and 1984, 150,000 man-years of employment. Out of this 150,000 man-years of employment, some 30,000 to 40,000 man-years will be in central Canada.
The new exports approved by the Conservative government in December, 1979, will improve Canada's balance of payments by $17 billion over eight years. Long-term results of this improved situation could be a strengthened Canadian dollar and lower interest rates.
The pre-build section of the line, the western leg, is estimated to cost $1.6 billion. Of this 90 per cent will be Canadian content. Distribution is as follows: B.C., $70 million; Alberta, $650 million; Saskatchewan and Manitoba, $360 million, and Ontario and Quebec, $360 million. Those are significant benefits at this time in the Canadian economy.
Natural gas exports are essential to make efficient use of our natural resource base. Opponents of gas exports express the view that exports are a threat to our future domestic natural gas supply. Opponents of new exports are concerned that additional exports could impair the future expansion of gas in the Canadian market. The Canadian market for gas is relatively small indeed compared to the enormous supplies of gas we have discovered.
As a result of increased gas prices between 1974 and 1980, substantial new discoveries of natural gas have been made. In the last six years drilling activity in western Canada and major improvements in technology have accelerated discoveries and substantially increased the amount of known reserves. Reliable industry sources claim that ultimate potential marketable gas will support a fifty-year supply from conventional producing areas of western Canada alone. The substantial increase in reserves has placed the gas industry in a surplus supply situation and the marketing of natural gas has become a major concern of the industry.
Because of these developments the National Energy Board has re-evaluated its figures for natural gas reserves in relation to foreseeable requirements. The National Energy Board estimated that 66.1 trillion cubic feet of established reserves remain in the conventional producing areas of Canada. We use
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approximately one trillion cubic feet of gas per year in Canada. If the National Energy Board is correct, and surely it is technically equipped to make the assessment, we have 66 years' supply in the conventional producing areas of Canada today. In addition the National Energy Board estimates that there are ten trillion cubic feet in the Arctic Islands, five trillion cubic feet in the Mackenzie Delta-Beaufort Sea area, and three trillion cubic feet off Sable Island. These are discovered reserves. This does not include the "tight-gas" pools in western Alberta.
In December, 1979, the National Energy Board declared a total of 4.25 trillion cubic feet over a period of eight years as surplus to our domestic needs. The National Energy Board's decision to grant this export volume was on the basis of its valuation that the net benefits to Canada in terms of direct cash flows resulting from the export sale weighed against the alternative of keeping the gas in Canada for future domestic use to be $6.6 billion. In arriving at its decision to allow exports, the National Energy Board stated that the substantial net advantages to Canada from the exports outweighed any uncertainty associated with the security of future energy supplies. The Board stated that these new export volumes would achieve a balance such that adequate supplies for domestic requirements would be assured for a reasonable period into the future but that the level of reserves retention would not restrain the achievement of an appropriate rate of exploration and development.
Approval of the pre-build portion of the pipeline is vital because it will contribute to the financing and completion of the whole project, and the National Energy Board considers it to be in the public interest to dedicate the necessary export volumes until such time as Alaskan gas begins to flow.
The exports allowed through the pre-build section will provide an additional stimulus to the United States to speed up regulatory procedures and financing moves for the over-all pipeline-the Alaska portion and the northern border portion. Pre-building will also extend the timeframe for the construction phase of the entire pipeline project, making it easier for Canadian industry to schedule labour and equipment to meet the project's over-all requirements, and thus allowing increased Canadian content.
In addition, the northern section of the pipeline offers to Canada the advantage of providing future access to Canadian frontier reserves when these reserves prove to be deliverable in economic volumes. Those reserves are in the Mackenzie Delta and the Beaufort Sea.
There are presently 700 firms actively engaged in natural gas exploration in western Canada. A high percentage are independents, almost all Canadian owned, and most are young companies with little or no present production or cash flow.
Concern has been expressed by some, including myself, that many of these small companies with their valuable reserves of marketless gas are susceptible to take over by large American firms. In the last ten years over 100 such firms have been bought out by foreign-controlled firms. Gas exports will allow these firms the cash flow necessary to continue to explore for
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more oil and gas reserves. In 1979, 70 per cent of the exploration wells drilled in western Canada were drilled by these independents. Canadian content in the industry is rising rapidly, not by government decree but through the energy and skill of Canadian explorationists. The only factor that can interfere with the growth of Canadian independents is lack of markets, resulting in restriction of necessary cash flow.
Young independent companies are disproportionately injured by the present restriction in gas markets. I say disproportionately because it is the major oil and gas producers who are selling most of the gas at the moment, and the independents are in a position where they do not have a market for their new-found reserves. Without markets, these small Canadian independents cannot survive in Canada. There is probably not a single Canadian independent oil and gas exploration company today that has not dedicated a very large part of its budget to the United States, or is considering doing so. I wish to emphasize that I do not exaggerate. Mr. Speaker, it is serious and the reason is very simple. Gas and oil discoveries in the United States are immediately saleable. It will be a tragedy if the young Canadian exploration companies are driven out of Canada because of an inability to market their gas and develop cash flows. They do not want to leave, but they have no choice. I do not see how anyone can blame them for leaving Canada in order to survive.
Fifty-eight companies out of some 364 companies involved in the National Energy Board gas export decision will be making their first natural gas deliveries to the pre-built section of the Alaska gas pipeline. In conclusion, the building of the Alaska gas pipeline and exporting gas, surplus to our requirements, will improve the Canadian content of our oil and gas industry by strengthening Canadian producers. This will enable our Canadian producers to sustain the high levels of exploration activity to prove up additional reserves. Additional reserves will allow us to continue to price natural gas domestically on a subsidized basis at something like half of the export price.


The Acting Speaker (Mr. Ethier):: Order, please. 1 regret to interrupt the hon. member, but I must advise him that his allotted time has expired.


John William Thomson: May I ask for unanimous consent to continue because I need one minute to conclude my remarks?


The Acting Speaker (Mr. Ethier):: Is there unanimous consent for the hon. member to conclude his remarks?


Some hon. Members:: Agreed.


John William Thomson: In summary, the pre-build project will create Canadian investment and jobs throughout Canada. It will improve security of Canadian energy supply by allowing the industry to continue to explore aggressively. It will enable us to continue to subsidize lower domestic gas prices and it will provide a return on investment to Canadian investors.

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The United States Congress has given Canada its assurance that the entire line will be built, and surely this should be sufficient for Canada to proceed immediately to approve the pre-build portion of the Alaska gas pipeline.
[ Translation]


Mr. Dennis Dawson (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, the debate today dealt mostly with the industrial aspects of the industrial strategy or the close relation between the field of energy and that of industrial strategy. The incentive to industrial growth and the promotion of energy policy are the two most important challenges which we will have to accept during the eighties and in the future.
I will remind the House however that the most important part of our over-all economic strategy for the eighties is not capital investments or the development of technology itself but human beings for whom cnr economy exists and without whom it would not operate.
The most important aspect of the directions we should adopt for the 1980s concern our endeavours in the field of human resources and manpower adaptation. Our studies have indicated that nothing is more crucial for the future performance of the Canadian economy than the means with which we adapt it so that it is possible to make efficient changes. That is essentially the role of the Canada Employment and immigration Commission.
Of course, the economic society we dream of rests on fundamental needs. It must have the necessary mechanisms to produce the skills needed to face the demands of our future growth.
It must also provide the necessary income and direct aid in cases of adjustment to facilitate inevitable geographic and occupational changes. In particular, it must work for a number of groups in our society which would otherwise lose ground or not fare well and thus cease to be full-fledged and productive members of our society. Wherever and whenever there is a high unemployment rate, it must provide jobs and formal as well as on-the-job training in fields in which skills are required, to ensure that we get maximum benefits from the efficient evolution of our industrial policy.
The House will recognize that it will not be easy to attain such goals. To do so, we must be sure of the direction we have taken, the problems we have studied and the chances of success. We must also foresee adequate planning on the national and regional scale, and be determined as well not to relinquish our objectives once these have been singled out.
Mr. Speaker, this is why the government has decided to create a special committee on employment opportunities for the eighties. This committee, chaired by my colleague from Notre-Dame-de-Grace, will concern itself especially with the dearth of personnel in skilled jobs as well as seeking the advice
of the greatest number of interested people on other aspects of employment in the future.

Within employment and immigration, the labour market development task force is undertaking a fundamental review of the nature of the labour market and will work closely with the Ui Review Task Force.
When these reviews are completed, the minister intends to establish the key directions for the remainder of the decade. It is, however, already clear that major changes are required. The government has already taken a number of steps to ensure that sound policies and programs related to human resources, people capital, are in place.
We have had, for over a decade, one of the strongest programs of adult occupational training in the western industrialized world. That program has provided retraining, and the upgrading of basic educational prerequisites to skilled training for many Canadians. It has provided language training to enable new immigrants to use the skills they bring to Canada, and it has played an essential role in assisting many, who would otherwise be condemned to poverty, to play productive and rewarding roles in our increasingly industrial society. Over the years the nature of the training provided has shifted toward a more industrial basis, and we expect that this year 55 per cent of the full time trainees will be undertaking apprenticeship or other forms of industrial training.
It is clear, however, that further changes and strengthening of the program are required. In too many of the trade skill areas Canada has been dependent on the now shrinking pool of foreign-trained tradesmen to supply our basic needs. We have been unable to ensure that our native people have the training required to take advantage of the economic opportunities which frequently arise in close proximity to them. We have found that our training programs have not been able to enable those women who wish to do so to break out of job ghettos.
That is why the Minister of Employment and Immigration last month announced new initiatives in these areas. The financial provision for the critical trade skills training program, which is designed to assist industry to generate the skills it finds in short supply, is being expanded from $20 million to $30 million this year. If industry is able to respond in the way we hope, that should constitute a significant step toward providing the high level blue-collar skills which we will need and people will require three, four and five years from now.
May I call it six o'clock, Mr. Speaker?


The Acting Speaker (Mr. Ethier):: It being six o'clock, I do now leave the chair until 8 p.m. this day.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
July 14, 1980
The Deputy Speaker:: When the House took recess at six o'clock, the hon. member for Louis-Hebert (Mr. Dawson) had the floor.


Dennis Dawson: Mr. Speaker, as 1 pointed out this afternoon just before recess, when we talk of industrial strategy, it is important that we never forget the question of energy and particularly, because of the area 1 am concerned with, individuals, or, in other words, manpower training.

An additional $10 million will be provided this fiscal year for training our native people in both urban and more remote settings. This will enable them to take advantage of the immense opportunities that will be generated by our industrial and energy developments. We are now working with representatives of native organizations to see how these funds can best be used to create the job potential of native people, and, more than incidentally, help to provide the skills which will be required by western energy and industrial expansion.
To help counter the serious underrepresentation of women in many male dominated occupations, the government has developed an initiative which has stirred the interest of manpower authorities in other parts of the world. Some $2 million has been added to our normal industrial training program budget for this fiscal year to provide employers with an experimental 75 per cent premium to train women in skills and trades in which they represent less than one-tenth of the labour force. We hope that this assistance will induce employers to train up to 3,700 women this year in occupations in which women have traditionally been underrepresented. The program will be expanded next year if it is successful.
These initiatives in the training area-to increase the proportion of our training which takes place in an industrial setting, to increase directly and sharply the provision of high level skills through training, to ensure that our native people can benefit from opportunities, and to begin to right the under-representation of women in important and growing skill areas-are key steps which will serve us well through the 1980s. 1 wish to emphasize, however, that they are not being carried out in isolation. Important discussions have been held with representatives of some of our most dynamic industrial sectors, the aerospace industry, the petroleum-related industries, etc.
The enhanced revitalized training to which the government is committed cannot take place without the co-operation and drive of the business sector. A skill training strategy which helps industry do necessary training must be and is being carried out with the active collaboration of our key industrial sectors. That collaboration, of course, is a two-way street.
For many years substantial segments of Canadian industry have relied on their ability to attract skilled immigrants from abroad rather than taking the steps necessary to train and develop our own young people and women to meet industrial skill needs. In recent years it has become apparent that such a strategy, even if it were desirable, can no longer work.
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Canada's expanding sectors and skill needs are frequently the same as those in other parts of the industrialized world. Rapid rates of productivity and real income growth abroad have brought standards of wages and living in many countries into the same range that we enjoy in Canada and the United States. Increasingly it is simply not possible to attract from abroad the skills that industry needs for the future.
We, and many expanding industrial sectors in Canada, face a dilemma. The types of skills which are most in shortage frequently take 3, 4, or even 5 years to produce. They must be planned for, and the investment in human resources made, long in advance of when they are needed. It is not possible or even realistic to suggest to firms that they should go without needed foreign skills now and wait for four years until they can properly train their own necessary workers.
The basic policy which has been adopted is not to deny firms the opportunity to recruit high skills abroad, but rather to ensure that firms which do seek to attract skilled people from abroad are also doing their fair share of training Canadians to meet future needs. We are, increasingly, asking firms to outline their future manpower plans and to demonstrate the adequacy of their investment in training as prerequisites to the recruitment of already trained persons from abroad. The result is that if the firm can attract persons in skill-short areas from abroad, it immediately gets what it needs, but it also makes provision to train unemployed or underemployed Canadians to fill whatever the future requirements may be.
I might add that, despite our need for skills, our growth is not always even. In a number of important technological areas the ability of Canadian post-secondary institutions to produce technically qualified people is, at least temporarily, running ahead of the ability of the private sector to utilize them. The new technology employment program is designed to fill that gap, by assisting private sector and non-profit research institutes to hire unemployed or underemployed recent technically qualified graduates in priority areas of endeavour. Through this program we expect to enable young Canadians to utilize the existing technological abilities they have developed and to further technological development and the application of technology. Among the priority areas for this program are microelectronics, biotechnology, communications technology, etc.
Training and development of Canadians is critical to our future industrial role and expansion but so is the ability to adjust to the changes which will be generated. Those changes will be considerable and far-reaching in their consequences.
We know that energy and related developments in western Canada will result in differentially rapid employment growth and rapidly-escalating skill needs in that area. We know that the altered pattern of growth between our industrial sectors will result in major changes in the level of opportunity which each can offer. And we know that those changes will not affect all Canadians equally. We know, further, that a wise and forward-looking society does not tolerate progress for some at the expense of others. Our employment and training and

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financial adjustment policies must enable all Canadians as much as possible to benefit from the opportunities which lie before us. The unevenness of growth, caused by differential rates of expansion, cannot be allowed to leave human accidents in its wake. A blind policy of growth for the sake of growth could not succeed: an economic and industrial growth policy must take full account of the need to enable all Canadians to make the contribution of which they are capable.
We have, for instance, at the moment considerable signs of externally generated recession in much of the country while parts of our nation have full employment. The nature of the American downswing suggests that this pattern may continue for some months and even intensify. It is imperative that we, as a society, make provision for the stimulation of employment in areas and during times of slow growth as well as ensuring that we have a labour force which is adequately trained for the future.
The government is taking very considerable steps this year both to stimulate the employment of additional persons in industry and to bring about the development of jobs in the non-profit sector, particularly in areas of the country where jobs are more difficult to find.
The government is making available, under the Employment Tax Credit Act recently passed by Parliament, a further twelve months of direct wage assistance to industry to help expand employment, particularly in small business. This program, as members of the House know, was extremely successful last year with over 50,000 Canadians getting jobs, mostly in small businesses, as a direct result. We hope that despite the late passage of the bill the measure will make a considerable contribution this year as well. The subsidy offered varies from $1.50 an hour to $2 an hour, depending on the part of the country, and has proven to be highly successful particularly east of the Ottawa River. We hope that, with the support of organizations such as the chambers of commerce, it will play a major role this year as well.
It is clear, however, that a general measure of that kind cannot itself do the whole job. To help fill the gap, to create jobs in places and for groups of people who can be relatively little helped through business-related measures, the government has established the Canada Community Development and the Canada Community Services Programs. Although the Community Development Program will fund projects in all parts of the country, the funds will be concentrated in areas and on groups which suffer most from unemployment. Jobs will be provided in a wide range of federal and provincial priority activities so as to maximize the impact of the expenditures on our longer-run national goals. The Minister of Employment and Immigration (Mr. Axworthy) expects shortly to announce the distribution of those funds, the priorities which have been developed, and the details of the new program. It will result in jobs for over 19,000 additional Canadians this fall and winter.
A companion program, the Canada Community Services Program, will be of particular assistance in providing worthwhile jobs for relatively recent labour market entrants in the
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provision of important community-based services. The planned expenditures of up to $11 million this year should enable the initiation of a wide range of demonstration projects which will both provide employment and serve to fill many of the gaps in a range of community-based social services.
Many, however, of our most serious employment adjustment problems relate not to temporary shortages of work but rather to the extremely work-disadvantaged problems of many Canadians in the medium to longer term. These disadvantages may be a result of our geographic development or may be the social result of generations of exclusion from the main stream of economic growth. A sensible medium-term policy must provide employment development and jobs for such people and in such areas over the medium to long term as well as in the short run. It must be focused to meet local needs for growth, for training in work, and for work itself.
To help achieve that, we have progressively shifted resources from short-term job-creation programs such as Canada Works into the Local Employment Assistance Program which provides medium and long-term employment and training for groups of persons and in parts of the country which are extremely employment disadvantaged. Our financial provision for the LEAP program stands at over $70 million this year, with approximately half that amount being allocated to help meet the employment development needs of our native people. The LEAP program has become a primary vehicle through which we are able to assist the development of small-scale local employment opportunities of long-term benefit to people who most need them.
We have not, of course, neglected the need for private sector employment development in the long term as well. This year the government expects to initiate up to 20 Local Economic Development Assistance projects. Largely in small to mediumsized slow growth communities, the program will initially offer an opportunity to assess and articulate the prospects and possibilities for stimulating private sector employment growth. In its operational phase the LEDA program will enable such communities to provide small-scale financial assistance to small and medium-sized firms to expand or initiate businesses to provide more employment locally. If the pilot projects are able to achieve the success which we hope, the government will give consideration to a possible expansion of the program next year.


Walter David Baker: How do you know that?


Dennis Dawson: If it is a success we shall make a commitment to try to give it a bigger budget and make it a better and a bigger program next year.
Employment policy thus provides assistance to adjust to change both through the provision of immediate employment to meet immediate needs and, increasingly, through the provision of medium and long-term employment, often in the private sector, when that is what is required.
I should like to go on, Mr. Speaker, but I see you are on the edge of your chair. Many of the speeches tonight will be dealing with the same problems. We have to be sure, when we
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talk about industrial strategy, that we give consideration to energy strategy and employment strategy as well.


Mr. Gordon Gilchrist (Scarborough East):: Mr. Speaker, 1 too, will be talking about science and technology and I hope members will stick around to listen because I might make a couple of prognostications and maybe even a wager to make before the night is over.
Research and development means economic progress through product innovations and improved productivity. It means social progress through new and improved medical techniques and through a better understanding of the world in which we live.
Total spending on research and development in Canada today is only .9 per cent of our gross national product, less than half the level of such industrialized nations as Switzerland, France, West Germany and the United States.
The evaluation of the Canadian dollar has given the scientific community an inflation rate that is significantly higher than the over-all national average, but in spite of this the government is contemplating removing the tariff protection on many research materials plus imposition of sales tax which will further add to the cost of research in Canada.
Many Canadian subsidiaries of U. S. firms are required to make payments to their parent companies for research and development done in the United States. In the automobile industry, for example, payments to parent companies for research and development amount to $375 million a year compared with the research and development spending they do in this country of only $5 million. Just think about that, Mr. Speaker; what a lovely free ride for foreign-controlled companies to employ their skilled people and scientists while Canadians pay their salaries! Oh, yes, we Canadians get to assemble their cars, cars which we did not design and which usually are not the best design for Canadian needs, but we do not get any of the real pay-back of world product mandate, royalty generation, and the things which add to Canada's real wealth. Not only does Canada have no part in the design of the cars, it is also prevented from getting its fair share of the manufacture of parts which go into the original models or even the repair parts which later keep them on the road.
In this case we are not hewers of wood and drawers of water, which is our normal situation; we are benders of steel and bolters of bolts, and that does not make us very much better.
It is very past due that we decide to take a firm position with foreign companies, not just to encourage them to do much more research in Canada, but even to force them to do so if they wish to continue enjoying the profits which accrue to them from their sales of products in Canada.
The history of this government, though, does not give us much encouragement to look forward to achieving such results. The Liberal record of research is as poor as the record of economic progress. Both are in the negative. If we were
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talking about inflation growth in Canada, we could point proudly to the government record. Even unemployment is something we could talk about, if we are looking for a high figure. We could find both in the 10 per cent range. When it comes to annual deficits, that is where this government is at its best. Its deficits are so big that even our ten times larger neighbour to the south has rejected them.
While the Liberal spending record is unsurpassed, the record of progress in economic development has been dismal. I suggest that the reason for this is that the massive spending which has been going on for years has been directed to the wrong things. Canada's wealth is being squandered on grants like LIP and FLIP, unemployment insurance payments and all the other things which help people to live without working, or to work in businesses which are not directly contributing to economic prosperity.
Research and development, which would create jobs instead of perpetuating unemployment, or which would produce goods and earn income for workers who produce those goods instead of paying them to sit idly while workers in other countries produce the goods for us, would be the way to direct spending. Isn't it interesting to look at the statistical evidence of the results of investment in high technology in countries which do that sort of thing rather than invest in the foot-slogging, back-breaking low technology areas and sectors such as we have in this country? For example, the high technology industry in this country which over the last 13 years have enjoyed an annual growth rate of 6.5 per cent compare very favourably against the low technology industries whose growth has been only 4.5 per cent. That is half again as much for the innovative companies. Another major help not only to those high technology companies themselves but also to the consumers of Canada is the ability of strong research-oriented companies to keep their prices down. Their prices in real terms grew at a rate of only 1.5 per cent per year compared with over double that, or 3.2 per cent, for non-innovative companies.
In summary, then, over a 13-year period research-intensive industries saw a 1.4 per cent greater employment growth, 2 per cent more real output, 9 per cent greater productivity-that is almost a whole percent-and yet they still were able to keep their prices down 1.7 per cent over low technology industries. Is it any wonder, then, that U.S. parent companies want to conduct substantial research and do it in their own country, particularly when they can even charge their Canadian subsidiaries to help pay the cost?
There is no point in the Minister of State for Science and Technology (Mr. Roberts) talking about carrying on the same old plans which have brought about the situation in the first place when research spending in Canada under successive Liberal governments has dropped from just below 1.5 per cent of gross national product to less than 1 per cent of gross national product. Now the government says it is targeting for 1.5 per cent of gross national product by 1985. Big deal! We had that much when the Prime Minister (Mr. Trudeau) took over the economic ruination of Canada.

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Economic Development
Even if this Liberal government could reach 1.5 per cent by 1985-and I will predict right here and now for the record, timelessly inscribed in Hansard, that it will not even come close to 1.5 per cent by 1985-how would that compare with research spending by other major countries, particularly those which we regard as economic world leaders? Our present level of .9 per cent compares very unfavourably with the 2.4 per cent spent in the United States, the 2.1 per cent in the United Kingdom, the 2 per cent in West Germany, and the 1.7 per cent in Japan.
All the economically successful nations spend at least twice as much on research as we do. Can it be a coincidence that we continue to sell off our resources to pay for a standard of living which we have not earned, that we export our muscle power in order to buy back Japanese brain power, and that we continue to bolt together big American gas-guzzling cars which the Americans generously allow us to produce and then have us experience the massive unemployment in Canada's automotive industry while we continue to purchase the far better designed products of Japan and Germany, the Toyotas and the Volk-swagens? It is not a coincidence that the countries which invest heavily in high technology create jobs for their citizens while ours are laid off.
Does our .9 per cent research spending compare well with other less developed nations? Well, you will be pleased to know, Mr. Speaker, that we are just clobbering some nations. For example, we are miles-sorry, kilometres-ahead of Spain, Portugal and Turkey. We have even managed to match Ireland and Italy, but that is where it ends. We do not even measure up to Iceland and Finland.
So, there you have it, Mr. Speaker. We have a disgraceful record of technological innovativeness by a bankrupt group of politicians, and it is this group to which the country looks for leadership in the next four years. The country looks for leadership from a group with a proven record of failure, from a group which must tinker with the constitution of Canada as a smokescreen to hide economic ineptness, a group which would rather argue about constitutional change instead of attitudinal change, about patriation while they deal in procrastination, about working formulas when they should be worrying about just plain working, and all of this in two languages, which probably will not work at all.
What can an opposition member say to a government which does not understand or cannot cope with the real problems of a nation? How can one get through to unimaginative or politically myopic minds which in the Trudeau years carried Canada to lower and lower levels of performance? Could I beg them to read the records and to learn from past mistakes? It is not my imagination; there are official records of lower technological growth, lower productivity, higher unemployment, bigger deficits and bigger debt, higher taxes, no plan for resource development, particularly in the critical area of petroleum energy, and perhaps most important of all, no development of a national will or purpose as exemplified by the appalling condition of our defence forces through lack of
good equipment and far too few numbers both in the permanent and militia forces.
Instead of using the American technique of stimulation of high technology research and beneficial spin-off through defence purchasing, this government will reduce purchasing under DIP, the defence industry productivity program, from $31.5 million in 1979 to $26.5 million in 1980. All of this is a sad commentary on a country which in its infancy built a transcontinental railway as a national dream, for a country which built an inland seaway of tremendous magnitude, or for a country which called out to the rest of the world at Expo '67, "Look at Canada, the up and coming world beater". However, all of this was "PT" development, "prior to Trudeau".
Is there any hope that the new Trudeau government will put an unhyphenated Canada first and take the strong and urgently needed steps to develop the country's future in a manner which will instil a national sense of purpose, create thousands of new jobs for Canadian young people who want to work but find a faltering economy, a government which, having misled the Canadian public by promising cheap energy prices could redeem itself by now being honest and admit it was wrong and which chose to pay Mexicans $36 per barrel for all the oil they will sell us but would not pay fellow Canadians more than half that price and at the same time create jobs and investment opportunities here in Canada? Mr. Speaker, when did the Mexicans last invest in Canadian jobs? I suspect if oil were found in Quebec today, we would soon be at world prices.
I hope the Minister of Energy, Mines and Resources (Mr. Lalonde) can see his way clear to deal truthfully with the country and bring in not only the proper pricing formula for oil but also implement the dynamic action needed to capitalize on increased resource revenue to launch the tar sands plants and frontier drilling which will make us self-sufficient in energy by 1990.
Another grey area is industry, trade and commerce. In opposition the present minister declared that increased research and development should be a condition of helping Chrysler but it remained to the Ontario Progressive Conservative government to implement that condition in the Chrysler bail-out.
When will we stop hearing partisan political platitudes instead of constructive job-creating action from the Minister of Industry, Trade and Commerce (Mr. Gray), who personally represents one of the country's ridings most seriously affected by the huge job lay-offs caused by past Liberal industrial policy ineptness?
The third minister of the strike-out is the new Minister of State for Science and Technology. He comes to the plate wearing two hats and carrying two bats. Environment is his first preoccupation and, by working at that, he has managed to keep out of trouble in the vital field of research funding and development, that is, up until this week he kept out of trouble. But now, consistent with the total lack of research policy of past Liberal governments, the new minister who is not a
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scientist, has voiced serious personal skepticism as to whether or not Canada should have anything to do with fusion energy development.
In spite of eminent scientists from the National Research Council declaring the great need for Canada to join other nations of the world in the costly but potentially highly rewarding field of cleaner, less polluting, renewable energy to be provided by fusion, the minister declares his doubts and Canada, instead of being inspired to another national goal, goes back to cutting wood.
The declared intention of the Ministry of State for Science and Technology is:
To encourage the development and use of science and technology in support of national goals.
The hon. member for Louis-Hebert (Mr. Dawson) has just alluded to the critical importance of technology to economic development and the creation of jobs.
But what are these national goals, other than the 1.5 per cent of gross national product which is only a spending benchmark and not a mission oriented or goal oriented one? Are these goals to be specific science goals such as putting a man on Mars, or developing the world's best information processing system, or solving the world's most pressing social problem, that of universal birth control?
Or are the goals financial ones, increased productivity in Canada and more efficient processing? Or will the long awaited industrial strategy define the goals as being the substantially increased processing of our natural resources and the Canadianizing of our industry by being the technological masters of it?
What are these lofty goals, the building blocks of a Canadian industrial and social purpose? To date the government has failed even to bring in a budget to tell Canadians what this year will hold for them, never mind this decade.
Mr. Speaker, you may well be asking if this criticism is not just talk. We are constantly reminded by the other side that we were the government for only seven months, under seven months, in fact. They told us that the $10.5 billion deficit we planned to bring in this year was a cruel joke on Canadians and would contribute to massive unemployment. They told us that our economic forecast of 1 per cent growth in the economy was terrible, and they criticized our energy pricing arrangements which would have started the greatest economic boom and job-creation opportunity which Canadians have ever seen. They did not notice the five-year science program to revitalize the training of Canadian scientists and the creation of home-grown innovation and technological upgrading which would have included 15,000 additional research opportunities and helped with our energy development.
You see, Mr. Speaker, unlike Liberal ad hoc, off the cuff, short range, expedient political action which varies with the changing political breeze, scientific planning and research requires long lead times and guaranteed funding. Such long-range planning will be of excellent benefit to the country in the vast technological development of new products and new pro-
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duction techniques which could make Canada an economic world leader with less than 5 per cent unemployment. What, may I ask, does 10 per cent unemployment relate to in this country of ours? Surely not to American unemployment, British, German or anyone else's unemployment. This is a country which has all the natural resources it could need, it has the energy to process those resources and the intelligence to do the whole job. Why should we be experiencing 10 per cent unemployment, even in these times?
But such long-range benefits do not pay off in votes at the polls, and this government's long-range plans seldom carry past the next election. Contrast the decade of decline in research spending under this government with the instant revitalizing done by the seven-month Conservative government which brought in a five-year plan for research funding and development and which has breathed new life into the Canadian science community.
Another accomplishment of the previous Conservative government which has gone unnoticed by the present government was the fact that unemployment had dropped almost a full percentage point, not seasonally adjusted, and that new housing starts, thanks to the mortgage tax credit scheme, coupled with the Small Businesses Loans Act, which has yet to be brought forward and may never be, which would have revitalized that extremely important job-sustaining element of our society, would have lowered unemployment levels even more.
They said they knew better how to run the country-and what has the government's first five months in office, after 18 years of tenure, produced? A $4 billion bigger deficit for 1980, higher and increasing unemployment, a first quarter growth- 1 should not call it growth, I should call it shrinkage-of 0.5 of I per cent, no energy-pricing agreement so that we may proceed with development and job creation, no industrial strategy, no comprehensive scientific policy to upgrade the skills of young Canadians and give them jobs, and no prospect of any of these in the foreseeable future.
Now they want the summer off. They want only to talk about constitutional change and hope that somehow the public of Canada will forget about Liberal failure during the next two summer months. Perhaps no one will notice the 2 per cent increase in home heating oil just sneaked through Parliament because they will not be buying it in the next two hot months. Perhaps they hope people will be so used to hearing about the increasing job lay-offs that they will not be furious with their government in the fall. Well, in two months' time when the House reconvenes, this government will have had seven months to achieve the miracles they have been unable to achieve throughout all the Trudeau years.


Mr. Deputy Speaker:: I am sorry to interrupt the hon. member but his time has expired. He may continue with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.
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Economic Development


James Gordon Gilchrist: You and I will be back, Mr. Speaker, to examine the record of another seven months of Liberal government. We will then be able to compare seven months of the Liberal government against seven months of the Conservative government. We will not mention that the Conservative government under the right hon. Leader of the Opposition (Mr. Clark) had to start from scratch. 1 have made these strong indictments in the hope it will shame or inspire the government to far better efforts for the good of Canada. We will just look at the seven months' record, and I will bet one hundred of highly inflated Liberal dollars after tax on the record of the big C. If you take that bet, Mr. Speaker, you will lose.


Mr. Russell MacLellan (Parliamentary Secretary to Minister of State, Mines):: Mr. Speaker, it is my pleasure this evening to address some remarks to the allegation that the government has failed to develop a coherent economic development program. I should like to refer to a speech made by the Prime Minister (Mr. Trudeau) on February 12, 1980, in Toronto. He stated that the Liberals would capitalize on Canada's energy base in order to build a world competitive industrial sector.
One of the first things necessary in order to have a strong industrial base is to have a strong central government. In the last few years we in Canada have seen our federal administration gradually lose its power. This has been a source of a very, very high degree of concern to most Canadians. It has led to things such as one province stating to other provinces that it will restrict tradesmen and workers from coming into its jurisdiction offering their services for available jobs at any given time.
It would seem that also it is the intention of energy producing provinces in this country to maintain a large portion of the energy revenues they are able to obtain. I for one would not, nor would the government, ever begrudge energy producing provinces obtaining a large return on their energy resources. It is important that these provinces and areas that have depleting resources are in fact able to keep the momentum of their economic development going by widening the scope of the development of their future. However, it is also important that the government not accept producing provinces retaining vast amounts of energy and resources which would restrict other sectors of the country from obtaining a fair share of the economic activity and from in fact remaining viable producing regions of the country.
Let me take the case of Alberta. Certainly there is no resentment by the government or by myself that this province should be, for instance, the wealthiest province per capita and per resource income in the country. This is not a factor. Certainly no one in the government or on this side of the House would ever suggest that the economic surge of the west should be in any way impeded. As a member from an Atlantic region of this great country, it is not something that would make me say that we in our area should have equal returns from ou- resources as would a province such as Alberta. But in the future it is the hope of provinces such as Nova Scotia and Newfoundland that they too will be blessed with resources
from energy potential. Certainly it would be the hope at that particular time that the federal government would assist these provinces in restructuring their manufacturing and processing to develop alternate sources of employment and enterprise to keep the momentum in these areas going.
Regardless of which provinces are the economic "have" provinces, we must never lose sight of the goal of reducing economic disparity and in fact hopefully doing away with economic disparity entirely. There are areas which were once sound financially. Industries were located in these particular areas. As these areas become more economically deprived, and as they went through times which were less fortunate economically, these industries became more vulnerable. Should these industries through some quirk fail to sustain the decline in economic activity in a particular region or in the country in general, then the industries which fail will not return to these areas when economic times become better. They will return to the larger urban areas, the more fortunate economic areas.
The areas which have suffered deprivation economically and whose privation in fact is accelerated by the loss of these very valuable assets will not get these assets back. This is one of the lessons we are learning from the monetarist theories in finance. If in fact we let happen whatever is going to happen, then we will encourage the centralization of economic activity in this country through ever-diminishing pockets of economic growth. In fact the rural areas will become diminished in their contribution to this country. The small community will diminish as an economic viability. This is something we cannot allow to happen.
The government has stated that it will use its energy wealth to create the basis for sustained and widespread industrial growth. To do this the federal government needs sufficient revenues and has developed two particular guidelines in this direction. The first one is that the price of oil in Canada should in some direct way reflect the costs of financing it. Second, the revenue-sharing system must be altered so as to ensure that the federal government now and in the future has sufficient revenue to allow it to carry out its basic responsibilities of economic stabilization and revenue equalization across the country. Certainly it is the government's aim.
The aim of increasing industrial prosperity across the country was stated in the Speech from the Throne. Energy-producing areas and economically successful areas, or areas which are increasing their economic strength, demand special attention from the federal government. This is realized by the government. In fact the federal government has acknowledged the needs of the west, the fact the west demands special attention and financing to meet its ever-increasing economic sphere of influence. I would go so far as to state in the House that if we as a country do not funnel more economic resources and financing into the western part of our country, then indeed we are making a very severe mistake.
The government indicated that increased industrial activity must take place in the west. Theirs is a depleting resource. Increased industrial activity in other fields is necessary if they are to achieve the required diversification to carry their eco-
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nomic expansion well beyond the exploration of their energy resources. The increased economic activity outside the resource field is happening already in the west but to a lesser extent than we would like. Head offices are moving into that area, developers and skilled labourers are moving to the west.


Mr. Nickerson:: Mr. Speaker, I rise on a point of order. I am trying to listen very carefully to what is being said by the hon. member for Cape Breton-The Sydneys (Mr. MacLellan). I find I am prevented from doing so by the incessant chatter of members of the NDP who seem to be holding a private conversation or a private caucus.


Mr. Deputy Speaker:: Order. I would ask hon. members of the House to observe order. The hon. member for Cape Breton-The Sydneys (Mr. MacLellan) has the floor.


Russell Gregoire MacLellan: 1 thank the hon. member and you, Mr. Speaker. The development of the west in areas other than resource activity is happening to an extent but less than we would like to see in the country at the present time. Head offices are moving to that area, as are developers, skilled labour and so on. However, I would think that it is the intention of the provincial government in that area-and I know that it is the intention of the federal government-that manufacturing and processing industries establish in that very vital area of our country. This shift will include more dynamic industrial activity in that area. It is the definite aim of the federal government to add secondary processing and manufacturing industries to the resource base of that area.
Along with the development of the industrial base in the west, the government also recognizes that all Canadians should benefit as much as possible from the success of the energy-producing provinces, be they east or west. This policy includes, wherever possible, not letting the investment of Canadians, be that investment in their homes, industry or capital, dissipate through high energy costs or resulting in increased inflation. We must be cognizant at all times of the investment of the average Canadian in this country. We must protect those investments as they exist at the present time. It is not always possible, but it is something of which we must be mindful at all times.
The average Canadian has, for instance, placed a great deal of investment capital in his home. Many of these people have paid off their mortgages and own their homes without having to account to any financial institution or person whatsoever. If that home were to be reduced drastically in value, then a person would lose a life of saving and work, and the only thing that perhaps he has of any monetary value in this world. This is something which we must not forget.
It is with these thoughts in mind that the federal government has introduced other programs along these particular lines, with the idea of developing a coherent economic development policy. The government has committed itself to developing a realistic pricing formula for energy for Canadians. The government wants a revenue-sharing system which is struc-
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tured in such a way that if the world price rises the national government has shares its needs in order to carry out its national responsibilities. The government seeks a price-incentive system which fosters rapid substitution of other forms of energy for oil. This is one of the reasons why the alternate energy committee was set up and mentioned in the Speech from the Throne.
This is why the government at the present time is fostering, as much as it possibly can, ways of immediately substituting natural gas for oil and of investing in coal areas in eastern and western Canada, to protect that valuable oil base. The government has also accelerated the development of indigenous supplies to develop supplies off the east coast of Canada and, until the supplies are brought ashore, to provide an assured foreign supply of oil to that region. That is why the government entered into the recent oil contract with Mexico and why it is so much concerned about ensuring that there is a definite oil supply for eastern Canada in any given winter. It will be monitoring the refineries to ensure that the information being provided to Canadians is in fact correct, and that incorrect information will not mean a winter of privation for eastern Canadians.
It is also important to ensure that the petroleum industry has the incentive to help achieve its energy goals, and that Canadian-owned and controlled firms play a larger role in the energy field of this country. This is why it is the target of the federal government to obtain 50 per cent Canadian ownership of that very valuable industry.
There has been a disturbing increase in company takeovers and the diversification of the oil companies into other economic activities and spheres of economic activity in this country. This is particularly alarming when one acknowledges that the energy-producing companies are in fact securing very valuable, very heavy and very much increased revenues from their source of activities, that they are not only in oil and gas but are now in coal and are branching out into other industries.
If one considers at the same time that the present economic climate has reduced the profitability in other areas of economic activity in this country, it is extremely easy for oil companies to buy up those companies when they are experiencing difficult times. That is why, along with the fact that a great percentage of the revenues from the oil and gas industry will funnel into other countries through dividend payments, we must as soon as possible strive to obtain a larger percentage of Candian ownership and control over our oil and gas industry.
It is also the reason why the federal government is putting such great emphasis on Petro-Canada. Petro-Canada is the foundation on which Canada will develop a large portion of its energy potential. This is why the federal government has granted to Petro-Canada an additional $80 million for investment purposes. Petro-Canada has played a large part in the development and bringing on stream of energy potential of eastern Canada, be it the natural gas off Sable Island or the oil and gas in the Hibernia region.
I submit that one cannot say that the government has failed to develop a coherent economic development policy. However,

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Economic Development
if we are not careful, this economic development policy, through inactivity, unco-operative other levels of government and indifference of Canadians, will not be successful.


Mr. Ian Deans (Hamilton Mountain):: Mr. Speaker, I know now that I am on the right track because the hon. member for Winnipeg North Centre (Mr. Knowles) is applauding.


Stanley Howard Knowles: It is the red face.


Ian Deans: It is the red face, is it? I have listened intermittently to the debate this afternoon and this evening. If one looks at the motion one cannot help but think how unfortunate it is that the vehicle which we use in order to discuss what Canada's future is likely to be is an opposition motion, before we get around to talking about the economic development which most of us would like to see, the way in which that economic development might be brought about, and the kind of benefits we would hope to derive on behalf of the people of Canada in the short term and the long term.
What we should be talking about and we have been talking about in part is the basic criteria which must be put in place in order to offset the problems which have arisen as the result of the attitude which has become evident through the succession of Liberal and Conservative governments over the last 20 years. It is time to say quite bluntly that we need no more tinkering with the economy, that it is time for us to look at the fundamental aspects of Canada's economy, to make some decisions about what we hope to achieve and how we intend to achieve those hopes.
There have been many changes over the past few years. I have listened particularly to government supporters enumerating the very many government measures which have been introduced. 1 am prepared to concede that some of these measures have resulted in a degree of success which makes them worth while. However, I think it is fair to say that if one were to judge the state of economy today as it affects the average individual, one would come to the conclusion that Canada's economy in 1980 is not as strong as Canada's economy was in 1970, and that in 1970 it was weaker than it was in 1960.
On balance, we have lost control, if we ever had control, and we have failed to put in place the long-term control mechanisms which are required if we are to derive the maximum benefits.
Why would we worry about the economy? Why not just let it take its course? Why bother? I think, to begin with, the reason is that we have the responsibility here in the House of Commons to put in place the policy measures which will bring about the long-term best results for the majority of Canadians. The economy is made up, I suppose in essence, of labour and capital. Labour does not really understand capital very well. Capital fails to understand the needs and the ambition of labour.
One of the primary cornerstones of any discussion, particularly any discussion about the future of the country, is that we have to set as a principal objective that all of the planning must include an understanding of the kind of community that we want. We want jobs. We want jobs that are safe and secure and reasonably well paid, rewarding both financially and personally.
From the point of view of capital we come to the conclusion-from what has been happening and in reading the financial pages of the many journals that are published, and many in the House of Commons see capital as an end in itself-that the making of money is in itself a worth-while endeavour.
As a nation and as a House of Commons I think we have to look at capital as a resource not unlike gold, oil or wheat. Capital is a means to serve a community's interest. The flow of capital is seen, therefore, like the flow of other raw materials. When we export capital, as we do in large amounts year after year, as opposed to exporting finished goods, we are exporting jobs. As we look at capital in all of its grandeur we have to recognize that it is only when it is put to use in Canada, to develop Canada for Canadians, that it serves a useful purpose.
It is a bit mind-boggling, as one who is not a financial expert, to read in the local papers day after day at times when plants are closing, when people are being laid off, when mortgage foreclosing is taking place and when small business is suffering considerably at the hands of large capital, that the major corporate sector is making more profit today than it ever has in its history. Why is this happening? What is it about the imbalance that has developed in our country? Why does this happen at a time when everyone is feeling the pinch and people are unable to find employment, for instance, the young people who cannot find employment, people who are laid off, where whole communities are down-Windsor is a good example of this-but there are many others all across the country? Why is it that as you read that on one page, you then turn over and read that the third quarter, the second quarter or the first quarter profit margins in industry after industry, sector after sector, are higher than ever before? We should ask ourselves the question are we using the capital generated in a way that will be beneficial for my children, your children, your grandchildren-children that we do not even know-who are going to have to live in a country that we leave for them?
As we begin to look at the economy and the development of Canada, we have to decide that all of the good intentions in the world will not change it. All of the wishing in the world will not change it either. A bit of tinkering by the government from time to time will prove beneficial in a marginal way, but in the long run it will not prove to be of any benefit.
We should approach a revitalization of the economy on a sectoral basis. For the purposes of my argument I have identified nine sectors that should be looked at. We must take a serious look at the depletable non-renewable natural resource sector. We must take a look at what I call, for the want of a better term, the accommodation sector. That includes commercial, industrial and private accommodation. We must take
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a look at the communications sector in Canada. We must take a look at transportation as a sector and all of its ramifications. We must look at manufacturing as a sector. We must look as a sector at agriculture, food, fishing and forestry because they are renewable resources. We must take a look at tourism as a sector. This is one of the least developed and yet it has considerable potential. We must look at what can be done about it. We must look at energy likewise. And finally we must look at finance as a sector of the economy. So we have nine of them.
In natural resources we have to look at what we have done over the years with the resources that were left to us, that belong to us, from which we are entitled to see some benefit. After years and years of Liberal and Conservative administration we see that we have received little if anything in the way of tangible benefits from the exploitation of our mineral resources. I tell members to travel across the northern part of this country or travel across northern Ontario, if you do not want to go very far, and you will see community after community that was reliant on a mine or on a sawmill which has long since gone by the way. One can see homes that were owned by individuals who lost everything that they had put into them. One can see communities that died because there was no effort made to put back into those communities something that would last and provide some stability for the future.
We have seen the exploitation by foreign interests of our resources, in other words, the taking of those resources from this country to other parts of the world in the raw and semi-raw state and manufactured into the very things that we ourselves must buy. We have seen the value added benefit that we should have received, because they were our resources, accruing to another part of the world. We have seen workers in those countries getting the benefit of the better paying jobs and the benefit of research and development, while our workers ended up working in the mines. This has resulted in our country putting up with pollution, facing the acid rain problem, facing the health risks and, in other words, Canada having to take the short end and receiving little, if anything, in the way of tax dollars from the very resource which belonged to us. For years, year after year, this has gone on. We have seen the export of capital in the resource sector. As Canadian ore deposits decline we see Inco using the capital which resulted from the development of Canada going into Indonesia, and using government capital to go into Indonesia to develop similar kinds of things in that part of the world.
In the area of accommodation, we have had numerous studies but no action on the question of land use, on the question of foreign ownership of land, on the question of adequate industrial use against agricultural land and the loss of agricultural land. We have had discussion and study on regional relocation, and in particular DREE's role, for example, in the relocation of industry. But what have we seen by way of concrete policy that defines what the government's role will be and how, if at all, we are going to try to develop new industry rather than simply shift the pieces around as one might in a chess game? By shifting the pieces around one
Economic Development
creates unemployment in one part of the country while trying to create employment in another. That is the kind of policy we are seeing. We have yet to see a statement from the government on housing. Housing is a right. It is the right of everyone to be able to have a decent place to live at a price he or she can afford.
1 heard my colleague in the Liberal party who sat down recently saying that people have this investment in their homes and therefore cannot afford to see the value of the home depreciate or go down. Yet the truth of the matter is that it was the policy of the Liberal government in the early and middle 1960s that drove up the price of housing. It was the policy of this government that floated interest rates and did away with fixed term mortgages that drove up the price of housing which caused immeasurable hardship. Today we are feeling the toll of it. Today we are suffering as a result of it.
Where are the policies to deal with that? We have seen the ongoing debate, ad nauseam perhaps in some people's view, but nevertheless necessary on the matter of interest rates and who should control them. It is quite obvious to me that the government must, through the Bank of Canada, if need be, but certainly through the Minister of Finance (Mr. MacEachen), have control over interest rates.
I come now to communication, an area of high technology and excellent potential for growth. We see Ottawa and Winnipeg battling over the computer chip industry at a time when there should be some direction and effort made to co-ordinate the industry and get our potential developed and into the world marketplace. We see the kinds of things Bell Canada has done as it affects CBC in communications where the more profitable parts are cut off and given to the private sector, thereby making it necessary for the taxpayer to carry a larger burden. TWe is no way that makes sense.

There is no rational approach to transportation, no attempt to use the public area in transportation to offset the very high costs of fuel. There is no attempt to electrify when electrification makes sense, and no attempt to use the indigenous transportation methods available to us such as the seaway that could be used to much greater extent than it has in the past. There is very little effort to develop a sensible and convenient passenger transportation system on ground rather than using private vehicles. We need a review of the transportation sector.
The manufacturing sector is the fifth of the nine sectors I want to discuss briefly. We see absolute failure in this sector. It is hard to believe that the government would watch while the auto industry decays before its eyes. It is disintegrating. The whole manufacturing sector of the auto industry is under severe pressure at the very time the Minister of Industry, Trade and Commerce (Mr. Gray) takes another jaunt to Washington. When he gets there he cannot find anyone who feels badly about what is happening to Canada. While he is there, however, the Ford Motor Company and American Motors are entering into agreements with Toyota, Mazda, and Peugeot to manufacture their products in Canada.

Economic Development
Where is our share, Mr. Speaker? Do you hear any talk about our share of manufacturing or our share of the components industry? We never hear of this from the government and you never hear it from outside either. If you do not push for it you do not get it. We do not push, therefore, we will not get it.
This is going to be the new way of doing things, however. You can see it coming. The Ford Motor Company has made it quite clear that they hope to enter into an agreement with Toyota in the near future. The agreement will mean that Toyota vehicles will be manufactured in the United States. The component parts will also be manufactured there. AMC has indicated that they have a similar agreement and are about to do the same thing. The small car will be manufactured on the North American continent-but where will our share be, Mr. Speaker? When will we hear the government address this and many other problems of the manufacturing sector? It is a sector that has been sorely neglected and which, to a large extent, is controlled by the subsidiary operation, or the parent company in other parts of the world but primarily in the United States. When things do not go well at home they do not look to Canada and say there is a good operation there that they want to keep going. Rather, they take the operation out of Canada and put it back near the parent company because they have an obligation to the government and the community in which the head office is situated.
We all know the end result, having seen it happen over the last few months. A number of companies closed down, not because they were not efficient and not because the workers were not producing-not because there was not a market for the product, but because they wanted to do the manufacturing at home. That was what was in the best interests of the United States economy. That is the kind of manufacturing sector we have, without any degree of economy or any opportunity to enter world markets. It is influenced, if not controlled, by the extraterritorial application of corporate law. I suggest that is another area we should be examining, Mr. Speaker.
Tourism is another area to which we must give some attention. We must learn to take advantage of the tremendous natural tourist attractions that we have in this country. The other day I drove from Ottawa to Hamilton. As I drove through the St. Lawrence area, past Brockville and on to Hamilton, I could not but remark how wonderful and marvellous it was. It is breathtaking, Mr. Speaker, yet we do not have a co-ordinated tourist promotion program. The government does not appear to be interested in it, yet it provides a grand opportunity for capital flow into Canada and a chance to reverse some of the trends.
The discussion goes on about energy, of course. Some of our colleagues, representing Alberta and other places, speak about the need to go to world prices. We have to ask ourselves why we should go to world prices. Just because someone in Saudi Arabia, Iran, Iraq or Egypt decides to hold us to ransom, does that mean we have to pay the same ransom to our own family? Surely to heaven it can be seen clearly that we ought to be doing the same thing these other countries are doing in an
effort to develop their industry and their economy. We should be using the money to make the transition that must be made from a heavy reliance on oil to other energy resources, but we are not doing that. We should be talking about a pipeline from west to east rather than from north to south.
We should be talking about an integrated energy policy that takes into account not only petroleum based products but also electricity and all the other methods of developing energy. We need an infrastructure that allows for the transition that must take place from our heavy reliance on petroleum based energy to a more readily renewable resource. We are not doing that and, indeed, we are not even talking about it. We are still caught up in the debate about whether we should be paying $36 per barrel, what we should be doing with the money, how much should be going to the companies, how much should be going to Alberta and how much should be coming to the federal treasury, without any discussion about what is in the best interests of Canada as a whole.
Then there is the question of finance and all the problems we have seen in the recent discussion of the Bank Act and the way interest rates have been manipulated. People have lost their homes because of that manipulation, and people have lost their businesses because they could not afford to pay for the inventory they had to carry.
The high cost of money has made it virtually impossible for expansion to take place in the industrial marketplace, because people cannot afford to pay the high cost. There is no clear direction from the government, however, on what its fiscal or financial policy is. We end up with a void caused by inaction. Inaction in itself breeds lethargy and lethargy means higher costs, because those who are not so scrupulous take advantage of the circumstances.
I want to suggest, Mr. Speaker, that there are some things we might do, and I shall be brief. There are nine areas of concern. We might divide the House of Commons into nine committees and give each of those nine committees responsibility-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but his time has expired. He may continue with unanimous consent of the House.


Some hon. Members:: No.


Mr. Roger Simmons (Parliamentary Secretary to Minister of State for Science and Technology and Minister of the Environment):: Mr. Speaker, as soon as the boys in the NDP settle their little row, we will get on with the evening's events.


Michael Holcombe Wilson: Mr. Speaker, could we go back to Ian?


Roger Simmons: I realize that what the NDP member was saying may be more pleasing to Tory ears than what they will hear me say in a few minutes. Even the NDP agrees with that, Mr. Speaker.
I have been forced to go back to the motion to find out what we are debating. I have listened with some interest this after-
July 14, 1980

noon and this evening to the opposition spokesman in this particular debate. It has been a very worth-while exercise to try to deduce what the subject is from what they are saying. Nothing has been said thus far that would indicate to me that we ought to be talking about the government's alleged "failure to develop and implement a coherent economic development policy."
The least the House could expect from hon. members opposite is that they address themselves to that subject at least once or twice during their remarks, but their batting average on that one tonight is absolutely zero. They have done all the right things, the Tory and the NDP spokesmen, without exception. They did the predictable this afternoon and this evening. They indulged in a veritable orgy of condemnation. They tell us that everything is wrong in this country, there is nothing right any more. Even one Tory agrees with me.


Michael Holcombe Wilson: No.


Roger Simmons: Do I see two?


Michael Holcombe Wilson: No.


Roger Simmons: They do the predictable, the usual business, the orgy of words, the orgy of condemnation, the wrath. They are all worked up, in true Pavlovian style. Once again they perform their little simplistic act to win the approbation of those in the seats next to them. What about the subject at hand? Where is the evidence? Why do they not give us some evidence? Why do they not cite some evidence about this alleged failure to which the hon. member for Calgary Centre (Mr. Andre) has drawn our attention? Where is it? Another thing I noticed this afternoon and this evening-


Michael Holcombe Wilson: When were you here?


Roger Simmons: I would not expect the hon. member to know what I am talking about.


Some hon. Members:: Oh, oh!


Roger Simmons: They are tender tonight. They have lost their leader.


Mr. Nystrom:: Which leader?


Roger Simmons: That is what we are all asking. Where is the hon. member for St. John's West (Mr. Crosbie) these days, the real leader?


Daniel Joseph MacDonald: Where is the Minister of Finance?


Roger Simmons: Up she goes!


Daniel Joseph MacDonald: Is he out sucking his sore thumb?


Mr. Kempling:: He is sucking his thumb again, is he?


Roger Simmons: Their heart is not in it.


William James Kempling: Your foot is in it.
Economic Development


Roger Simmons: That is what I noticed this afternoon and this evening. They stand up and go through the motions. We got them up to say a few words because they had to punch the day. It was an opposition day, one which the Leader of the Opposition (Mr. Clark) begged for last week. Where is he now if he wants to talk about so-called economic failure?


Daniel Joseph MacDonald: Where's MacEachen?


Roger Simmons: The Minister of Finance (Mr. MacEachen) has a very good reason to not be here, as the hon. member knows. I have finally found something to incite the hon. member for Kingston and the Islands (Miss MacDonald). This evening they stand and go through the motions, but their heart is not in it. Why, Mr. Speaker?


William James Kempling: That is three times you have said that.


Roger Simmons: I have to say it four, five, six, seven times for some people.


Michael Holcombe Wilson: On a point of order, I am really standing on a point of order to allow the hon. member opposite to get hold of his emotions. He started off on three, possibly four different points and he has not been able to continue any point to its proper conclusion. I would like to allow him the time to rethink his thoughts so that he might make that point which is so telling and so important.


Mr. Deputy Speaker:: Order.


Roger Simmons: I say to the hon. member for Etobicoke Centre (Mr. Wilson) that even the Speaker thinks he is making a fool of himself. He should keep his mouth shut so that some doubt will remain. If he opens it, there will be no doubt at all. I advise him to listen. He might even learn something.


Michael Holcombe Wilson: From you? Never!


Roger Simmons: Being in an instructive mood tonight, as I am, I will go over my three or four points again. I thought I was dealing with some reasonably intelligent people. I admit that I assumed that I had a fairly sophisticated group of listeners and would be able to move rather quickly. For the hon. member for Etobicoke Centre, and my apologies to the rest who understood, I will cover the points again. Then I will give to him, in writing, explanatory notes. Who knows, he might understand them.


Michael Holcombe Wilson: One.


Roger Simmons: One, where is the evidence of this alleged failure by this government to have an economic policy? Where is it? I have not heard one shred of evidence this afternoon or this evening. There were a lot of tactics, and I heard a lot of wind and hot air. However, I did not hear one shred of evidence about any lack of an economic development policy, not one.

July 14, 1980
Economic Development
I ask the hon. member for Etobicoke Centre, does he understand point number one before I move on to point number two?


Michael Holcombe Wilson: Two?


Roger Simmons: There are only two. I have said them twice. 1 say for the benefit of the hon. member for Etobicoke Centre, as I have given up on the hon. member for Burlington (Mr. Kempling) who is about to give up on himself, I believe-


William James Kempling: The golden age of b.s.


Roger Simmons: The second point, for the hon. member for Etobicoke Centre-


Michael Holcombe Wilson: You have not completed the first one.


Roger Simmons: Why is their heart not in it? Why are they going through the motions? The stomach has gone out of them; their heart is not in it. They cannot even get up for the fight any more. They are still living the night before February 18. They cannot accept what is the case. This is July. This government has been in power for a number of months, but they are still living in the past. They are still wishing their lives away. I finally said something the hon. member for Etobicoke Centre understands.
The hon. member for Hamilton Mountain (Mr. Deans) is gone. I had hoped to have a few words with him.


An hon. Member:: You are driving us out of here.


Roger Simmons: We are going to drive a lot more of you out of here next election day. In the meantime, stick around.


An hon. Member:: Come to Burnaby.


Roger Simmons: If that's an invitation, I will work on it. My good friend for Etobicoke Centre is still having trouble getting beyond one. Two comes next, then three. I will talk to the hon. member later about the rest of it. A few moments ago the hon. member for Hamilton Mountain, and I hope he is within hearing distance of my voice, attempted to rouse himself, to bring himself up for the occasion. He tried to give an example. What did he do? He dragged out good old tourism, good old motherhood. What did he say? With expanded chest and full height, he stood up and said, "We have not yet really explored all our potential in the tourist industry." Isn't that brilliant? Isn't that something new and novel? Should he not rush out and have it copyrighted? "We have not exhausted our potential in the tourist industry." That is clear evidence of our failure on this side, that we have not gone out and done all that we could do in the tourist industry.
The hon. member rested his case on that. That is our sin, that we have not done all the job yet, that we are only getting on with it. We have not done it all. That is the indictment he hurls our way. That was the most vile thing he could say about us over here, that we have not completely exhausted all the avenues in terms of tourism.


Some hon. Members:: Oh, oh!


Roger Simmons: They are happy tonight, Mr. Speaker. They look at me. They should be happy, their leader is not here. They are reasonably happy.


William James Kempling: Where is Trudeau? Where is MacEachen? Where is Gray? Where are all the economic brains?


Roger Simmons: I do wish, Mr. Speaker-


Some hon. Members:: Oh, oh!


Roger Simmons: As soon as they are ready. We have all the time in the world. I do wish the hon. member for Hamilton Mountain were here because I want to respond to a couple of the points he made. At one point he lamented the fact that this debate on economic development should be taking place on an opposition motion. I happen to agree with him there. It is unfortunate that the only time we hear a debate in this House-I say, "debate" as opposed to statements-is on a motion such as this about economic development. And why? That is what I ask myself every day during the question period when I sit here and watch, and watch-


Daniel Joseph MacDonald: And watch?


Roger Simmons: -and watch!


Some hon. Members:: Oh, oh!


Roger Simmons: The hon. member for Kingston and the Islands is trying desperately but not very successfully to make cheap political points. She does not even do that very well. Where is all her concern for economic development, then? Where is the concern of the hon. member for Hamilton Mountain? If they want to talk about economic development, let them raise some of these matters in the question period or inject it in any number of debates, for instance, on Bill C-30, the borrowing bill, or in discussion of Bill C-3. There are lots of opportunities.
Opposition speakers tell us tonight that the only time we can talk about economic affairs is on an opposition motion. That may well be the case because in very real measure it is the opposition in this House, as in any other, which to a large degree sets the tone and content of the debates. If they choose during the question period to attempt to make cheap political points, that is their problem rather than ours. We have a number of answers for them. We do not have them all, but we are working on those.


Some hon. Members:: Oh, oh!


Roger Simmons: We have a number of the answers but they are afraid to ask the questions.
According to the hon. member for Hamilton Mountain, if I may quote him, "It is time to say we need no more tinkering with the economy". This is a welcome announcement. I was glad to hear an NDP spokesman tell us we needed no more
July 14, 1980

tinkering with the economy. It is welcome news, because we on this side happen to believe the same thing.


William James Kempling: He meant making a mess of things.


Roger Simmons: The hon. member for Burlington (Mr. Kempling) knows all about making a mess of things. He would know a lot about that. The hon. member for Hamilton Mountain recommended no more tinkering with the economy. Here, once again, the batting average of the NDP is 1,000. They have managed to get on both sides of this issue, too, because during the election campaign they were advocating a great deal of tinkering-they wanted to take over everything and run the whole show. Even since, I have heard some of them imply that the government could do it better than private industry. They want to run the goose that lays the golden eggs clean out of the country.
Mr. Speaker, if we are to have any success with economic development policies the full co-operation of a lot of people is required, including industry which has not in any shape or form pulled its weight as far as research and development is concerned. We have goals which we should like to see achieved.


An hon. Member:: What are they?


Roger Simmons: 1 abjectly apologize to the fairly sophisticated members of the opposition who are sitting over there at the present time, but I am still pursuing my mandate of a few minutes ago when at the request of the hon. member for Etobicoke Centre I undertook to repeat everything two or three times. If it is no longer operative, would the hon. member release me from that obligation so that I could get back to some adult talk?


Michael Holcombe Wilson: What are these clearly stated objectives?


Roger Simmons: Aha! One of them clearly is to see to it that the national expenditures on research and development are raised to 1.5 per cent of GNP by the mid-1980s. Now there is an objective for you! That is a commitment. But, to carry it out, we need-and I will explain number one to the hon. gentleman first; we have discovered that we have to revert back to the game plan-to achieve that objective we need the co-operation of industry which has not been pulling its weight on this particular commitment, Mr. Speaker. We are hoping this will change. We are hoping to get the message out. I agree that it has to be said not once, but twice and several times so industry understands.


William James Kempling: Say something thoughtful.


Roger Simmons: 1 will give the hon. member for Burlington one single sentence, with thought. But he must give me an undertaking that he will get somebody to explain it to him.


Some hon. Members:: Oh, oh!


Roger Simmons: Now, Mr. Speaker, let me turn to the notes I have here.
Economic Development


Mr. Deputy Speaker:: The hon. member's time has expired.


Some hon. Members:: Hooray!


Stanley Howard Knowles: Does that mean I shall have no opportunity to ask him a question?


Otto John Jelinek: Mr. Speaker, it was not my intention to respond to the hon. member who has just resumed his seat. But I must.


An hon. Member:: There was nothing to respond to.


Otto John Jelinek: There was one thing he said in the 20 minutes allotted to him, and I wrote it down because he repeated it so often. He said that the official opposition does not have its heart in what it is doing because we cannot come up with any evidence which demonstrates a lack of an economic policy by the Liberal government. He nods his head in agreement. Well, I will tell him something. My heart is in it, and so is the heart of every member on this side.


Some hon. Members:: Hear, hear!


Otto John Jelinek: Our hearts are in it because we know that Canada, with all the potential it has, is the richest nation per capita in natural resources, the richest nation in human resources, the richest nation in economic possibilities. Yet what has happened? I will tell the hon. member what has happened. He says he wants facts. Well, in 1970 Canada was the third richest nation in the world, behind only Sweden and the United States. But by 1978 we had fallen to eleventh place under the Trudeau government, and we are falling even faster.
I will tell him a few more things. Federal government spending, for example, will be $60 billion this year. The spending deficit will be $14 billion. The total gross national debt is $105 billion. Interest on debt now costs the taxpayers of Canada $11 billion annually. These numbers are too large for many Canadians to relate to in a meaningful way. If they are broken down, however, their magnitude becomes more meaningful, and I will break them down for the hon. member and for the record because this is the incompetence of ten, 12 or 15 years of Liberal administration. These are facts and figures. The hon. member says our hearts are not in it. They are because we know the potential future Canada has. However, it has been demonstrated that that potential cannot be reached with a Liberal administration continuing to run the country to the ground the way it has been.
To break down those big figures which are so difficult for that hon. member to understand, government spending, for example, will equal $6,800 per taxpayer in this current year, 1980-81. This compares to only $1,600 per taxpayer just over a decade ago, the year before the Prime Minister (Mr. Trudeau) took office. On a per capita basis government spending this year will amount to $2,492 per man, woman and child in Canada, and it was only just over $500 ten years ago. Government spending is now almost five times greater than it was

July 14, 1980
Economic Development
when the Prime Minister first took office. These are some of the statistics.
The government's total debt is the equivalent of $11,970 per taxpayer. That is just the debt. I am trying to give that hon. member these facts and statistics. In private industry, an enterprise with revenue which only equalled 76 per cent of expenditures and gross debt that was more than double the value of its net assets would be forced into receivership. However, the federal government cannot declare bankruptcy. It has no place to file. The Liberal government just borrows more and prints more, which only goes to feed inflation. Yet what is the Liberal administration considering at this point in time? Well, the Trudeau government is considering an end to the indexation of the personal income tax system. In fact the Liberals want us to pay for their financial sins. A typical taxpayer earning $20,000 annually would see his taxes rise by $1,564 between now and 1985, and lower income families would proportionately suffer even more.
And for what? For the exorbitant spending habits of the government. That is for what. For example, in 1978 the federal government spent $7 million on food, booze and entertainment. That is almost $20,000 per day. Expressed another way, that is the equivalent-and perhaps the hon. member will be interested in this-of 70,000 cases of liquor. The list goes on and on, and I will drop that part of my statement right now.
I just wanted to satisfy the hon. member, who came up with those ridiculous statements during his 20 minutes telling us that there is no concrete evidence to show the mismanagement of the Liberal administration and the fact that the Liberal administration has not developed any economic development programs. It has not. In fact I had hoped that after the Quebec referendum was over and the constitutional debate got under way, which it now is, the Liberal administration would settle down and begin to deal with economic problems. Although constitutional changes are necessary and important, it is my belief that the economy is still the number one concern of every Canadian, and I also believe that unless and until many economic problems and questions are resolved, regional differences are going to continue to grow regardless of how many constitutional debates are taking place.
But what happens? There has been no budget. A budget is the basis for an economic development program, but there has not been one. On April 21 there was a so-called mini-budget, and that mini-budget leaped beyond all precedents and denied members of Parliament the right to debate and amend the motion of approval required for tax measures, and although labelled as an economic statement by the Trudeau government, the proposed measures began taking money out of Canadians' pockets at midnight that same night.
Not only did hon. members opposite try to sneak in tax measures in a mere speech in reply to the throne speech, but the Liberals also attempted to short circuit the parliamentary process by not allowing a proper debate on what are clearly budget matters. A budget-even a mini one-demands debate, especially when it demonstrates a spendthrift direction in fiscal policy. What about the profound arrogance of the Liberals in
introducing tax measures which, for the most part, were identical to those on which they defeated the former government just a few months ago?
The mini budget was, however, consistent with the Liberal's political philosophy. First, it stole many of the measures introduced in the budget of the hon. member for St. John's West (Mr. Crosbie), necessary tax amendments in which the Liberals had already indicated they had no confidence. Second, the Liberal document demonstrated a willingness to spend more and borrow more, as I have just stated, with no apparent concern for the consequences, and the new Minister of Finance (Mr. MacEachen) cribbed some of the Progressive Conservative spending programs and ignored, on the other hand, the balancing revenue-producing and cutback measures. Third, the budget of the Minister of Finance broke the Prime Minister's campaign pledge not to increase the deficit.
The Liberal fiscal policy projected a $14.2 billion deficit in 1980-81, an increase of 13 per cent over the projected deficit of the hon. member for St. John's West. In other words, it offered no help to farmers or small businessmen. It substantially increased government spending. It offered no help to home owners. It just stole some of the positive measures from the budget of the hon. member for St. John's West.
On a general basis, therefore, we can conclude very easily that there is no economic development program present right now or being considered for the future as far as we can see, as far as the Canadian public can see or, more important, as far as the Canadian businessman can see.
There are many areas which can no longer be overlooked. One of them is the ailing auto industry. Just to show the importance of the auto industry in Canada I will read a few paragraphs from a paper produced by the automotive parts industry in Canada. I quote:
The automotive industry is essential to Canada. The automotive industry has a significant economic history, having played a central role in the establishment of secondary industry in Ontario and the rest of Canada. There are over 120,000 workers directly employed in the automotive industry, over half of which are producing automotive parts. The automotive parts industry supports a great deal of employment indirectly by major purchases of goods and services and through the disbursement of income. It is estimated that the 120,000 industry jobs can be linked to another 520,000 workers in Ontario and 600,000 jobs in the rest of Canada.
The automotive industry supports one-third of the steel industry and a similar portion of the iron-ore industry. Plastic producers, aluminum casters, glass manufacturers and the specialty products industry are all dependent to a large degree on the industry. In addition, many Canadian cities are entirely dependent on the automotive industry and "live and die" according to the health of the industry.
The governments in Canada must recognize the importance of this sector in its economic framework and provide an environment in which the automotive industry can survive and compete in world markets.
That is from a Canadian automotive parts industry brief. Having said that, we have heard nothing specific, as evidenced by the minister's answers over the last few months-and I am glad he is in the House today-to questions from myself, from the hon. member for Etobicoke Centre (Mr. Wilson) and from other colleagues. I personally have asked the minister to give up specifics on April 16 and 24, on May 5, 13 and 23, on June 25, and as recently as last week, and the minister has yet to
July 14, 1980

come up with one specific program and proposal for the automotive industry in Canada. He had the gall and the audacity earlier today in the debate to tell us-I checked in the blues-that the Progressive Conservatives want 16,000 Chrysler employees out of work. He told us that the PCs want Canadian small businesses to close down. I suggest that if that is not a lie, then it is the furthest thing from the truth.


An hon. Member:: Watch it.


Otto John Jelinek: The minister dares, after sitting in the House for only three or four months, to try to turn the tables and blame the Conservative government for the loss of jobs, for the inaction in the automotive industry, when it was under his leadership and when he was Minister of Industry, Trade and Commerce that the Canadian labour force in the auto industry had decreased. The lay-offs did not begin to take place when the Conservatives were in government. They began to take place when the minister took over.
I realize that it is not solely the minister's fault, that a great part of the problem stems from the negative economic trends in the United States and the ailing auto industry in that country. I also realized, and perhaps it should be stated more often, that the big auto makers are greatly to blame for the problems they are experiencing within their own industry today for not having the foresight to look toward smaller and more efficient automobiles. I realize all those things, Mr. Speaker. But that is not to say that the government can sit idly by without taking any positive steps to assist the program.
The minister went to Washington to meet with his counterparts at a well-publicized, well-touted meeting a few weeks ago. What are the results of that meeting? I will read you from the minister's own press release. The main result of that meeting was that "they agreed to hold further discussions." I tell you, I am fed up with just discussions, the automobile industry is fed up with just discussions, and the unemployed are fed up with just discussions; they want action. There are things that could be taking place today. The minister did not outline an auto pact presentation that he was going to make to his U.S. counterparts. He has admitted that in his press release and in his answers to our questions over the past few weeks. Now he has the nerve to come here and try to turn the tables and blame us. I just hope that the minister will have enough sense either to explain the position he took earlier today, which I called the closest thing to a lie, or withdraw the statement.
There is no excuse, in my view, for the Minister of Industry, Trade and Commerce and the government to stand idly by and just hold discussions while tens of thousands of Canadians are hit with massive lay-offs. Perhaps the minister has been preoccupied until now with the $200 million package to Chrysler Canada which, as you know, happens to be located in his own riding in Windsor.


Walter David Baker: He is thinking about the Liberal leadership.
Economic Development


Otto John Jelinek: Perhaps the minister is thinking about the Liberal leadership, as my colleague says. He is certainly acting like that in the question period.


Some hon. Members:: Oh, oh!


Otto John Jelinek: Perhaps the minister does not realize that the auto industry is suffering in other parts of Canada as well, in such places as Oakville, Oshawa, Brampton, St. Catharines, St. Thomas, to name just a few. Even the Chrysler proposal seems to have been a sham since less than 48 hours after receiving the $200 million loan guarantee, Chrysler of Canada laid off a further 1,400 people without even a peep from the minister and this government. Yet, when the minister gave the loan guarantee, he knew that Chrysler would lay off 1,400 more people.


An hon. Member:: Does he care?


Otto John Jelinek: Does he care, my hon. friend for Etobicoke Centre asks. I do not think he can care because he has not taken any action. Why has the minister not taken some immediate, short-term steps while he has taken the long-term steps in renegotiating the auto pact with the United States? The short-term steps I refer to are steps such as removing the 9 per cent federal excise tax from cars assembled or manufactured in Canada. I know it is a small step, but at least it is a step in the right direction. That alone would reduce the cost of vehicles built in Canada and thereby stimulate sales to a certain extent. The loss of revenue from the tax to the government could easily be offset by the saving in unemployment insurance benefits which, as of today, have already reached the staggering sum of $5 million a week within the auto industry alone, not to mention the secondary manufacturing sector.
Why has the minister not taken up the suggestion of eliminating the $100 excise tax on vehicles with air conditioners? If he had talked to the dealers across the country he would know that that alone would help move inventory from dealerships in this country.
Why has the minister not adopted the recommendation to impose quotas on offshore imports of automobiles? It would not be a precedent-setting case. The same government imposed textile quotas when the Canadian textile industry was in trouble, and this side of the House approved that. It imposed shoe quotas when the Canadian shoe industry was in trouble, and we supported that. Why is there not some action? If the minister does not want to accept the recommendations we and other interested groups are making, why does he not come up with some solutions of his own? Lada cars are being sold in Canada and promoted by the minister. That is fantastic. We are buying cars from a country which has invaded Afghanistan and butchered innocent men, women and children. We are doing the right thing so far as the Olympic boycott is concerned and, hypocritically, on the other hand the government is supporting the sale of Lada cars when thousands of auto workers in Canada are unemployed.


Herbert Eser (Herb) Gray: Are you against selling wheat? Is that it?

July 14, 1980
Adjournment Debate


Otto John Jelinek: I can see that the minister is starting to become a little nervy over there when he hears the truth from this side of the House, when he hears that there are potential steps that can be or should be taken. 1 wonder how long he is going to go on meeting with his counterparts and not resolving anything.
It is not as if the government and the minister did not have any options. There are options, and I have just mentioned a few. However, if the minister is unable to deal with the problems affecting the auto industry in Canada, which seems to be the case, and if the minister is unable to improve the provisions within the Auto Pact for the benefit of the auto industry in Canada, which seems to be the case, and in short, if the minister is unable to take any action in this regard, which also seems to be the case, then I urge him at least to bring this whole matter before the Standing Committee on Finance, Trade and Economic Affairs forthwith for an immediate review of the state of the automobile industry in Canada, as well as an over-all review of the obsolete and inadequate Auto Pact in order that all concerned, namely, management, labour, government and opposition parties could come to a positive, fair and equitable solution in a much needed public debate. The minister and the government have options. For God's sake, let us not waste any more time and let us exercise some of those options.



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

Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, the question which brings me here this evening-and I am sorry to see the Minister of Industry, Trade and Commerce (Mr. Gray) leaving-has to do with an area in which from time to time he expresses concern, that is, the well-being of Canadian industry.
On July 7 I asked the minister whether or not he could give us some information as to where the comparable offsetting program stood which was to come in by way of replacement for the reduction in the national shipbuilding subsidy from 20 per cent to 9 per cent. It seemed to us at the time rather shortsighted for the government to reduce one program before it had completed work and put in place the subsequent program. At the time the minister indicated to me that he was not too concerned about it to begin with. I should like to quote him from Hansard-I do not have the page number-of Monday July 7, in response to my question when he said in part:
I am advised that most of the Canadian shipyards have relatively full order books to build ships that were eligible for the 20 per cent subsidy.
Elsewhere he argued:
I believe it is a fact that most, if not all, Canadian shipyards have relatively full order books providing them with work until 1982, in some cases, and in others well into 1981 -
The fact of the matter is that we have about 18 shipyards in Canada that are active in this program and in fact rely upon it.
What is the current situation today? For example, two Montreal shipyards are out of work. They have laid off 1,400 workers in the marine area in the last eight months. Approximately 700 of these employees were reassigned to the rail car division, but the work in that division as well will run out at the end of this year. By the end of 1980, six other shipyards in Canada will have run out of orders as well. Therefore, a total of eight out of the 18 will have no new orders by the end of this year.
In 1981 three shipyards will run out of work in the spring, two will run out of work in the summer, and two in the fall or early winter. By the end of 1981, 15 of the 18 shipyards will have no work. In 1982, the year in which the minister feels very confident that there will be lots of employment and lots of orders for work in these yards, two shipyards will run out of work by the late spring or early summer. Therefore, by the end of 1982 there will be only one shipyard in Canada with any work under way by way of new orders.
Again I will repeat my concern. The Canadian shipyard industry has come to depend in no small way upon the 20 per cent subsidy. It has been extended by successive governments over a significant period of time now. The subsidy was to run out on July 1, and in fact it was allowed to lapse. It reverted back to 9 per cent which was the level of subsidy and assistance in place some years ago. There are two things wrong with that. First, it was done without consultation with the industry. Second, not only was it done without consultation, at the time of the presentation of their annual brief to the Canadian government, to the minister and his officials involved, there was a clear impression left of support for further extension of that subsidy. That word was pretty well spread throughout the industry. The consequence was that yards seeking new orders and in the course of negotiating for new orders were proceeding at a regular, proper business pace. Matters were not being rushed. There was confidence that the subsidy would be extended and that new orders would be forthcoming for Canadian yards during the summer months and early fall.
Now, that did not happen. If one talks to those who are seeking ships from Canadian yards, their position is simply stated, "Why should we order now at 9 per cent when the Minister of Transport (Mr. Pepin) clearly indicated that there would be a replacement program?" They are not saying what the replacement will be, but why should they order at 9 per cent when they are expecting and awaiting a comparable program? The best information we have, which the minister was not able to correct the other evening, is that we would get
July 14, 1980

it at some point. He attached some urgency, but he did not say when.
Every week that goes by-it is now July 14-will be a week some point in the future when Canadian shipyards will be out of work. It takes time to negotiate contracts, to complete designs, to identify Canadian content and to put ships together, a lot of time. I wish that the minister were here this evening, and I hope that his parliamentary secretary will at least answer in some way the general question of when we might expect a comparative program and why the subject was not left in place until the comparative program, whatever that is, was brought into public view?
[ Translation]


Gérald Laniel: Mr. Speaker, it gives me great pleasure to answer the comments of the hon. member for Dartmouth-Halifax East (Mr. Forrestall) as it also allows me to stress that the hon. member for Levis (Mr. Guay) is also interested in this question of assistance to shipbuilding, as Hansard reports that the hon. member for Levis put a similar question about the negotiation of new programs on July 8, namely the day after the hon. member put his question.
Mr. Speaker, the 20 per cent shipbuilding subsidy was to expire on December 31, 1979, and the previous government extended it to June 30 of this year. This government does not want to abolish subsidies once and for all, but rather to put forward another long-term shipbuilding program, and to that end, it is considering holding consultations with all interested groups in the industry. The hon. member says the minister cancelled the program without warning the industry. Well, in developing a new program, the minister wants precisely to consult that industry, and the consultations will take place as soon as possible so that the government may make decisions on such a program by the end of the year.
The hon. member asks when the new program will be announced. The government intends to make that decision by the end of the year.

The hon. member repeated the affirmations of the minister, that most Canadian shipyards had in their books many contracts which would take some of them close to the year 1982. He did not deny the fact that these construction programs will cost the federal government over $250 million for ships, and some of these ships will not be out of the shipyard before 1982. In any case, the objective of the government is to put in place a new program which, as the Minister of Industry, Trade and Commerce (Mr. Gray) said in the House, "would be recognized as cost effective, in the best interests of the industry, its workers and the entire economy". At the same time, I must say to the hon. member that I have noted some of his remarks, and 1 will bring them to the attention of the minister.
Adjournment Debate


REGIONAL ECONOMIC EXPANSION-DREE GRANTS FOR DEVELOPMENT PROGRAMS IN NEW BRUNSWICK
J. Robert Howie: Mr. Speaker, on July 2 I attempted to have the Minister of Regional Economic Expansion (Mr. De Bane) identify for me the shortfall in respect to the $56 million which the province of New Brunswick hoped to receive from DREE. I suggested to the minister that the shortfall would be in the area of $10 million to $15 million. He indicated to the House that he understood that approximately $50 million would be allocated to New Brunswick, which would seem to indicate a shortfall of $6 million.
My next concern was that the minister take a look at all the estimates in his department and hopefully find some estimates which would not be fully consumed, some of the money of which could perhaps be reallocated to wipe out the shortfall entirely. I am hoping that perhaps tonight or in the next day or so I might get some answers to these questions from the minister.
I would like to refer briefly to the DREE budgets of the past three years. For the fiscal year 1978-79, the expenditures, excluding Devco, were $525 million. For 1979-80 the forecast ependitures are $588 million and for 1980-81 $550 million is shown in the estimates.
If we added the $50 million set out in the December 11 budget for development and expansion in the Atlantic provinces and in Gaspe, the Minister of Regional Economic Expansion would have available to him, exclusive of Devco, $605 million in the current year-more money than any other minister of regional economic expansion in the history of the department.
In the House today I proposed a motion under Standing Order 43 to provide that the $50 million be reinstated from the defeated budget and made available to the Minister of Regional Economic Expansion but, of course, it was not given unanimous consent. I noticed, however, that the minister shared my sentiments and he at least was nodding assent. I do not know where that $50 million has gone, Mr. Speaker, but I should certainly like to see it go to DREE.
The Devco allowance for 1980-81 would be $60 million. I should mention that the forecast expenditure for 1979-80 was $42 million and for 1978-79, $46 million. I would see, as an added attraction to DREE, a whole new exciting dimension if the selective tax incentives by way of tax contracts with DREE as the operative vehicle, were implemented by the government as was proposed in the December 11 budget. That budget contemplated these tax contracts taking the form of accelerated capital cost allowances for tax credits. I think that in addition to the Regional Development Incentive Act, this new dimension, as a continuing dynamic would be very valuable in the government arsenal in attacking problems of regional disparity.
At the moment the department has under negotiation with the province of New Brunswick three subagreements under the general development agreement. These subagreements involve

July 14, 1980
Adjournment Debate
fisheries, transportation, and the forest industries, three of the most important dynamics for economic development in the whole province of New Brunswick. I would plead with the minister to approve these agreements so that they have the greatest economic impact they can possibly have, and that they have it now. If the minister has to come to Treasury Board and eventually come before this House with supplementary estimates, he will have my wholehearted support.
In order for us to be successful in attacking the problem of regional disparity we have to ensure that every department and agency of government will focus on the problem. It may take the involvement of the Prime Minister (Mr. Trudeau) to bring that focus about. I would therefore ask the Prime Minister to vest in his minister the power to bring about that vital and very important clout so that we can make progress in this regard.
In the province of New Brunswick some of the departments of government that could have this development dimension and have it initiated now, should be mentioned. The Department of Industry, Trade and Commerce could initiate an expansion of the Saint John Shipbuilding and Drydock Company Limited. The Department of Public Works could get on with dredging the Miramichi River. The Minister of the Environment (Mr. Roberts) who also has charge of science and technology, could provide facilities and grants for the forestry complex at the University of New Brunswick. The Department of National Defence could play a development role by moving the $49 million facility for base Gagetown from 1985 to 1981 and thus create jobs today. The National Harbours Board could expedite the most valuable Dalhousie-Belldune study and the natural products potash terminal in Saint John. The Department of Transport could lengthen the runway at St. Leonard Airport by 2,000 feet. The Department of the Solicitor General could also play a role by starting building on the minimum security prison at Renous. And the Department of Energy, Mines and Resources, Mr. Speaker, has untold opportunity in capital intensive projects now under way in the maritime provinces to reduce the cost of electric energy.
The Prime Minister very wisely said early in the session that he would like to see bread for everyone before cake for some. I want to serve notice on the Prime Minister and the minister responsible for regional economic expansion that we in New Brunswick are prepared to get bread, but we are sick and tired of crumbs.


Maurice James Harquail: Mr. Speaker, I want to express my gratitude to the hon. member for York-Sunbury (Mr. Howie) for bringing this matter to the attention of the House this evening. Certainly he supports what the minister responsible for DREE has been saying, as quoted not long ago in The Telegraph-Journal, Saint John, New Brunswick. He said. "We can't do it alone." He has put forward the concept that we will have to have a broader base notwithstanding the fact that we have just passed the tenth anniversary of the structuring and the setting up of the Department of Regional

Economic Expansion. However, if one looks at a map of Canada, practically all regions now have been designated. Obviously there will have to be a reshaping and rethinking of the whole question of designated areas to correct the question of disparity.
The hon. member has touched on many important points this evening. I think, though, that he will also have to remember that his own government last year signed no subsidiary agreements with the province of New Brunswick during the nine months it was in office. In the last three months we have attempted to revive DREE activities in the province of New Brunswick. Indeed, negotiations are under way now which could result in a commitment of about $90 million by the federal government over the next five years. We have presently under consideration several proposed sub-agreements with New Brunswick relating to commercial development, that is, development of the market square in Saint John, the modernization of the pulp and paper industry, forestry development and industrial development.
If the negotiations arrive at a successful conclusion with the New Brunswick government, DREE's contribution under the Canada New Brunswick General Development Agreement will reach approximately $435 million. When one looks at the history of it, the federal government has committed $435 million in New Brunswick between 1974 and 1979. I think that is very significant and important. This was carried out through the signing of 17 agreements.
These funds have been allotted to the resources sector, to infrastructures, including the highway system, development agreements for underdeveloped areas and to other projects of specific interest and impact. However, as has been pointed out, the Department of Regional Economic Expansion continues to co-operate with the province of New Brunswick.
It is interesting to work on the standing committee of DREE because there is agreement that there be non-partisan debate and that we try to get along to help progress, to succeed, and to have the best results for the dollar spent between the federal and the various provincial governments, specifically in the area of Atlantic Canada. We agree that there must be co-operation. If we are going to accomplish all these things, we will have to have restructuring and co-operation of all the other departments, and we will have to have more money to do it.
As has been stated by a noted reporter, Mr. Surette, in Halifax recently:
DREE, I believe, deserves more encouragement at this point.
With that kind of co-operation we might be able to meet some of your needs.
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HEALTH AND WELFARE-HEALTH HAZARDS IN CERTAIN CHEMICALS AND PESTICIDES-REVIEW OF DRUGS, PESTICIDES, FOOD ADDITIVES-REQUEST FOR PROGRESS REPORT
Mr. Simon de Jong (Regina East):: Mr. Speaker, I rise this evening as a result of the answer I received from the Minister of National Health and Welfare (Miss Begin) concerning the
July 14, 1980

feasibility of having our own research and lab facilities in Canada in the field of toxicology.
I have brought to the attention of the government the ongoing study and review of the International Bio-Test Laboratories of the United States which, in 1977, were found to have deliberately falsified and shredded its tests on various chemicals. In fact most of the pesticides available in this country today were tested by the IBT labs, and those tests, which allowed for the registration of those chemicals in this country, were proven to be false and misleading. It was a very serious situation and it continues to be so because these particular pesticides continue to be used in Canada today. There does not exist comprehensive valid studies to show that these particular pesticides are not dangerous to the users and to the consumers in our country.
It seemed to me to be very logical to ask the question: why do we not develop our own centres of toxicology in Canada so that we are not dependent on labs such as the IBT laboratories which have shown themselves not to be very dependable? In fact, Mr. Speaker, in committee a member of the department admitted that it is costing SI00 million to redo the tests originally done by IBT. This is not $100 million that the Government of Canada is spending, but it is $100 million that the consumers of Canada will eventually have to pay. At the time the minister suggested I was a bit naive in asking for our own centres of toxicology as we are a small country. I admit that in population we are a very small country compared to the United States and a number of European countries. She suggested, therefore, that we had to continue to rely upon the data we got from these independent labs, mainly in the United States.
I understand it would come close to $8 million a year over a five-year period of core funding from the government to guarantee or to enable us to set up a centre of toxicology that could effectively run tests on many of the chemicals that come on the market in this country. I am sure that even with $8 million over a five-year period we could not establish a centre of toxicology that would do proper studies on all the chemicals that come on the market.
Every year hundreds of new chemicals are introduced. We have to take the studies which the manufacturers of these chemicals present to us. We have to accept their word very often that these chemicals are not hazardous to the Canadian consumer and to the user. We have seen that we cannot very well depend upon the reliability of these studies. It makes a lot of sense for us as a country to take an active part in developing centres of toxicology. If we as a country cannot afford to do the whole job ourselves, then we have to join with other countries, either through the United Nations or outside of it, to develop some international laboratory capacity so that we are not dependent upon private labs, so that we know there are laboratories whose results we can trust.
As we go further into the chemical society, if we cannot trust the labs which tell us whether these chemicals are safe
Adjournment Debate
for us, then we are in a very sorry state. If is up to the government, which in the long run has responsibility for guaranteeing the health and safety of the Canadian public, to ensure there are labs in this country or in the world whose results we can trust.
It might be a question of money, but as the case of IBT labs has shown, it is costing over $100 million to review and redo these tests. It is something that eventually the Canadian consumer will have to pay. Why not take the more logical step? Why not develop our own capacity for doing these tests? In the long run it would save the Canadian consumer money. If there were a centre of toxicology in this country I am sure that other countries would use our lab facilities. In fact, I assume that after five or six years such a centre for the study of toxicology would make money for this country.
I wish to use this opportunity tonight to urge the government to consider seriously problems that it has had with private labs in the past. IBT is not the only lab. I ask it to consider seriously recommendations which, I understand, its own bureaucrats have made; I ask it to consider seriously supporting one or two universities across this country so that we can have our own independent source of study and so that we, as Canadian people, might be assured that the chemicals we are using are, indeed, safe.


Mr. David Weatherhead (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, the member for Regina East (Mr. de Jong) has asked several questions recently on the safety of pesticides tested by Industrial Biotest Laboratories of Chicago, Illinois.
On June 23 the Minister of National Health and Welfare (Miss Begin) issued a press release outlining the problem and listing the chemicals tested by IBT. In addition the minister has informed the provincial ministers of health, environment and agriculture and their counterparts in the Territories regarding this problem.
I wish to inform the House that the minister and the Department of National Health and Welfare are acutely aware of the shortage in Canada of trained toxicologists and facilities to conduct studies to assess the safety of chemicals. As a partial solution to this problem the department has played an active role in the establishment of an international program on chemical safety under the auspices of the World Health Organization. The department is assisting through direct funding of this program, as well as playing a leading role in the safety evaluation of agricultural chemicals and certain food additives. This program will provide Canada with access to expertise in other countries and will permit international collaboration on the safety evaluation of chemicals.
The department is committed also to the work of the Organization for Economic Co-operation and Development which is involved in developing improved means of detecting potential adverse effects of chemicals and in ensuring that the quality of scientific investigations will be satisfactory.

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Adjournment Debate Industrial development of new chemicals occurs primarily in foreign countries. Extensive growth of private laboratories engaged in safety evaluation of chemicals has taken place in recent years in the U.S. and Europe. In comparison to Canada, which has fewer than five such laboratories engaged primarily in drug testing, the United States has in excess of 100. Since Canadian industries rely heavily on their U.S. or European counterparts to undertake safety studies, they have demonstrated only limited interest in developing Canadian expertise in toxicology.
The Department of National Health and Welfare has played a lead role in assessing resources required to develop and maintain Canadian expertise in this vital field. Develop-
July 14, 1980
ment of a first-class, internationally recognized research and training facility in Canada would involve financial commitments of up to $10 million per year for a minimum of eight years. In addition, an initial commitment of $20 million would be required to build adequate laboratories. These moneys are very difficult to find in times of fiscal restraint with so many other priorities in health and other Canadian government policies. In addition, sustained financial support from the public sector would also be required to sustain such a facility.


Mr. Deputy Speaker:: Order. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until two o'clock tomorrow afternoon.
Motion agreed to and the House adjourned at 10.29 p.m.

Tuesday, July 15, 1980