1980-11-14

HOUSE OF COMMONS DEBATES


[Stage Direction]
29 Elizabeth II

[Stage Direction]
Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada
Available from Canadian Government Publishing Centre, Supply and Services Canada, Hull, Quebec, Canada K1A 0S9.
[Stage Direction]
Friday, November 14, 1980


Mr. Don Blenkarn (Mississauga South):: Madam Speaker, 1 rise under the provisions of Standing Order 43 to move a motion. The consumer price index increase now stands year over year at 10.9 per cent. Food is likely to increase by 12 per cent next year, energy costs by nearly 22 per cent, the dollar is now in the 84-cent range-2 per cent less than forecast-and interest rates are at least 1 per cent higher than they were on budget day. Therefore 1 move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the Minister of Finance forthwith produce an amended budget background paper setting out projections that are more realistic for the coming years, so that Canadians will realize how badly they are served by this government and by its most inept Fiscal management.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HOUSING
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Whereas the consumer price index rose 0.9 per cent yesterday reflecting even greater hardship for Canadians on fixed incomes and those in lower income brackets; and whereas the Liberal government has no housing policies designed adequately to assist Canadians requiring shelter, I move, seconded by the hon. member for St. Catharines (Mr. Reid):
That this House urge the government to bring in a shelter allowance program designed to provide all Canadians with decent, affordable housing.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSION ACT
Hon. Stanley Knowles (Winnipeg North Centre):: Madam Speaker, under the provisions of Standing Order 43, and seconded by the hon. member for Beaches (Mr. Young), 1 move:
That this House notes that the cost of living increase in the basic rate of the war disability pension now scheduled for January, 1981, will still leave veterans behind the average take-home pay of the five categories in the public service that were designated in 1972, and this House therefore calls on the Acting Minister of Veterans Affairs to introduce an amendment to the Pension Act that will automatically tie the pensions of disabled veterans to the standard promised to them by Parliament eight years ago, a commitment this House must not fail to keep.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL UNITY
Mr. Pierre  Gimai@: Madam Speaker, I rise under the provisions of Standing Order 43 to move a motion of pressing and urgent necessity. Considering that during his visit in Chicoutimi earlier this week the Progressive Conservative leader mixed with the Quebec separatists; considering that the only Quebec Progressive Conservative Party member was conspicuous by his inertia all along the last referendum debate, I move, seconded by the hon. member for Chicoutimi (Mr. Dionne):

November 14, 1980
That this House direct the Leader of the Official Opposition to tell us whether his party is separatist or whether it is in favour of the survival and development of Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



GARRISON DIVERSION


Mr. Charles Mayer (Portage-Marquette):: Madam Speaker, I rise under the provisions of Standing Order 43. The Garrison diversion project in North Dakota, if completed as planned, will cause irreparable harm to the waters of Manitoba and result in serious damage to Manitoba's fishing industry. The project is moving closer to completion each year, and recently additional money has been allocated for further construction of this project. Since Canadians of all political parties are opposed to the construction of those sections of the Garrison project that will harm Canadian waters, I move, seconded by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie):
That the Government of Canada send a delegation of members of this House from all parties to Washington at the appropriate time so that we can let the new administration and Congress know in the strongest terms possible that Canadians are unified in their opposition to the construction of those parts of the Garrison project that will harm Canadian waters.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



REGIONAL DEVELOPMENT


Mr. Rod Murphy (Churchill):: Madam Speaker, I rise to present a motion to the House under the provisions of Standing Order 43. The Standing Committee on Regional Development last week unanimously passed the following recommendation, to be presented to the Minister of Regional Economic Expansion (Mr. De Bane):
That DREE be given a mandate to co-ordinate the spending and policy programs of line federal departments as they relate to regional development-
Considering that the Minister of Regional Economic Expansion has expressed his personal support for this concept, and
since the minister also admitted that it is his department's officials who act in a capacity as secretariat for the western committee of cabinet, I move, seconded by the hon. member for Comox-Powell River (Mr. Skelly):
[DOT] (mo)
That the Minister of Employment and Immigration immediately withdraw from the chairmanship of the new western development fund, to be replaced by the Minister of Regional Economic Expansion, in the interest of strengthening the federal government's commitment to the honest eradication of regional disparities in Canada without regard to political gain.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



THE CONSTITUTION


Mr. Bill Yurko (Edmonton East):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. As the B and B Commission report and the Pepin-Robarts commission report recognize the active presence and practice of many world cultures in Canada, and furthermore as federal governments past and present of different partisan views have appointed ministers of state responsible for multiculturalism, I move, seconded by the hon. member for Joliette (Mr. La Salle):
That this House officially accept that Canada embraces many practising world cultures and therefore that a general statement to this effect be included in the final address to the Queen on constitutional patriation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



THE ECONOMY


Mr. Joe Reid (St. Catharines):: Madam Speaker, the nation's number one problem today as perceived by people across this country is still inflation. I therefore rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity.
The budget recently presented projects inflation in the 10 per cent range, while in fact it is now running at the rate of 10.9 per cent. This means that a person earning $15,000 yearly will have to earn at least $26,000 five years from now just to maintain his standard of living; in ten years, not too long a
November 14, 1980

period of time in family planning, his earnings would have to be $40,000 and even then he would not be living in a style compatible with those earning $15,000 today. I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the Government of Canada put narrow, partisan considerations aside and direct its strength and effort in a fight against inflation, so that all Canadians will be able to live above the poverty line.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



THE CONSTITUTION


Mr. Howard Crosby (Halifax West):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The handicapped people of Canada have made progress in obtaining provincial legislation recognizing their special needs, but national progress will be impossible unless the special rights of the handicapped are recognized in the proposed constitution. 1 move, seconded by the hon. member for Brandon-Souris (Mr. Dinsdale):
That this House direct the Minister of Justice to consider inclusion in the proposed charter of rights and freedoms a provision recognizing the special rights of handicapped Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



NORTHWEST TERRITORIES


Mr. Jim Fulton (Skeena):: Madam Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. In view of the fact that the ninth assembly of the government of the Northwest Territories last week passed a motion supporting the division of the Northwest Territories into two new territories, subject to a plebiscite, I move, seconded by the hon. member for Nunatsiaq (Mr. Ittinuar):
That this House recognize the legitimate aspirations of the people of Nunavut by supporting in principle the creation of a Nunavut territory with its own Nunavut government.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
[DOT] (UI5)



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is to the Acting Prime Minister. It deals with the position of the government in the face of new cost of living figures which indicate a rate of inflation for this year of just under 11 per cent. The Minister of Finance forecast in the budget a consumer price increase in 1980 of 9.7 per cent. The Acting Prime Minister will know that this forecast can be met only if there are reductions in the consumer price index in November and December.
Will the Acting Prime Minister tell the House whether or not it is the position of the government that there will in fact be a reduction in the cost of living in November and December of 1980, or has the government abandoned the forecast set out in the budget earlier this year?
[ Translation]


Hon. Pierre Bussieres (Minister of State, Finance):: Madam Speaker, if the Leader of the Opposition studied the components of the consumer cost of living increase, he would see that by subtracting the energy cost increase the figure is reduced by 0.5 per cent. The Leader of the Opposition knows full well, as we do in government, that Canadians understand the need to participate in the exploration and development of our natural resources as well as in the conservation of energy, and even though it is no easy matter they agree to pay a bit more for energy. I can assure the Leader of the Opposition that the government is still determined to fight inflation and take the means necessary to stay within the forecast inflation rate increase.


Charles Joseph Clark: Madam Speaker, 1 can understand why the Minister of Transport refuses to accept the responsibility for the economic policies of the government, or any responsibility for constitutional policies in view of his stand on the Pepin-Robarts reform. But I want to put exactly the same question to the Minister of State since he gave no reply to my other questions. I asked whether the government is in a position to say whether or not the rate of inflation will go down in November or December and, if not, whether the government has dropped the forecasts made in the budget. The questions are simple and I would appreciate a simple answer.

November 14, 1980
Oral Questions


Pierre Bussières: Madam Speaker, I know the Leader of the Opposition has a gift for simplification. He carried his simplification to simplism, which explains why he so resoundingly lost his elections. I should like to point out to him that on the government side, whether it be the Acting Prime Minister, the Minister of Transport, a minister of state or any other minister, we are all of one mind with regard to the constitution and the economy. I should also like to remind him that, with any forecast, no matter which, and especially in the field of economy, one must be very prudent. By their very nature, forecasts are fragile. I indicated a while ago that the government is intent upon fighting inflation. 1 also said last week, in a reply to another hon. member, that the government does not want to do it alone but wants all other agents of the economy to join in its efforts, and in the effort to stay within the figures forecast.


ASSISTANCE TO LOW-INCOME CANADIANS TO MEET HIGH ENERGY COSTS
Charles Joseph Clark: Madam Speaker, 1 have noted that following the statement of opposition concerning the constitution, the hon. member for Montmorency failed to applaud, although I have not received a simple reply from the Minister of State for Finance.

In light of the fact that we have now had an increase in the cost of living which renders inapplicable the projections in the budget regarding the cost of living, and given the fact that those have occurred without feeling the full impact of energy price increases, I wonder if the Minister of Energy, Mines and Resources, either in his capacity as Minister of Energy, Mines and Resources or in his capacity as the author of the budget, will tell us whether the government is now in a position to accept the need for an energy tax credit which will help those low-income Canadians who are most severely affected by the increases in the cost of energy meet those costs. Can we have an answer from the Minister of Energy, Mines and Resources?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: I am sorry, Madam Speaker. The Leader of the Opposition went into a very long expose, and 1 did not know that in the middle of his expose he switched directions from the Minister of State for Finance to myself. I ask him, please, to repeat the question.


Charles Joseph Clark: Madam Speaker, there is no question that whatever length my question the minister will exceed it in his response.
1 would like the minister to tell us whether the government is now prepared to consider some equivalent of an energy tax credit for low-income Canadians, given the fact that the cost
of living has already gone up beyond the levels forecast by the budget and before the full impact of the energy price increases which this minister is intending for the people of Canada is felt.


Marc Lalonde: Madam Speaker, as the Minister of Finance has indicated in the House several times, the impact of the budget as far as energy costs are concerned will be very substantially lower than that which had been planned under the Conservative budget of last December. As a matter of fact, if we take the case of an average family in eastern Canada, for instance, in order to have an equivalent cost to the same family, including the tax credit proposed by the Conservatives, it would require a family with two parents and 16 children. That would reach the same level as will be provided by our budget, in the sense that budget costs in terms of families will be substantially lower than they would have been under the Conservative budget.
With respect to measures affecting low-income groups, the federal government took steps last summer, well ahead of the budget, to provide for a very significant increase of $35 a month, which is the equivalent of about-


Donald Alex Blenkarn: Ha!


Marc Lalonde: My hon. friend opposite laughs at the help being provided to senior citizens. I do not think senior citizens laugh at the situation. They have $35 a month under the G1S provided by this government as a first step.


Some hon. Members:: Hear, hear!


PROPOSED SHARED COST PROGRAM TO MEET RISING ENERGY COSTS
Hon. John C. Crosbie (St. John's West):: Madam Speaker, 1 do not think the senior citizens or any citizens of this country are laughing. They are crying over the pitiful performance which is going on here today. 1 will ask a question of the Minister of Energy, Mines and Resources in the absence of the Prime Minister, "Saudy-Trudy", in view of the silence of the Deputy Prime Minister, who will not answer questions.
Last year average family purchasing power fell 4 per cent, according to Statistics Canada, as a result of inflation, and there has just been a monthly increase of 9.2 per cent in the cost of heating oils from September to October and an increase of 24.5 per cent from October of last year to October of this year. In view of these facts and the very regressive actions of this government, is the government going to give a favourable response to the government of Ontario, which has called on the federal government to join it in a shared cost program to provide relief from rising energy costs for people on fixed and low incomes?
Will there be an affirmative response in light of these frightening facts? Never mind the nonsense about what went on in the PC budget. It was not passed. The people of Canada are interested in what is happening now under the Liberal budget and the Liberal government today.
November 14, 1980


Marc Lalonde: Madam Speaker, i remind the hon. member that in the preamble to his question he complained about the fall in the average income of families last year. I need not remind him who was in office last year and did nothing about it at that time.
So far as this year is concerned, and referring to the specific question raised by the hon. member, indeed we are quite ready to share in a joint program with the government of Ontario. As a matter of fact, we are quite ready to share with the governments of all the provinces. Not only are we willing to share in this program, there is a program in existence at present in which exactly this is provided for. Its name is the Canada assistance plan, for which the Minister of National Health and Welfare is responsible, and in this plan we are providing 50 per cent of all the costs of social assistance in this country for families in need. That has been provided by this government and this Parliament for many years and we are going to continue to support such programs to help families in need.
In addition, as I indicated, we took steps well before the budget was brought down to help senior citizens in need by adding $35 a month to the incomes of all senior citizens who are benefiting from the guaranteed income supplement.


John Carnell Crosbie: Madam Speaker, the minister's contempt for lower-income people in this country is stupendous. We are not just talking about people who are receiving assistance because they are on welfare. We are talking about lower-income people who make under $20,000 a year and who are working, as well as those who are receiving assistance under the Canada assistance plan. Our question to the minister is very direct. Given the fact that heating fuel oil costs, as one example, which strike the poor and lower-income people more than any other aspect of energy costs, have already risen 24 per cent this year and it is forecast in the budget of the Minister of Finance that energy costs will go up 21.95 per cent next year, is the government going to introduce a program, energy tax credit, call it what you will, either in association with the provinces or not-and it should not be because this should be a federal government program to help lower-


Some hon. Members:: Oh, oh!


John Carnell Crosbie: You were the people who caused the situation.


Some hon. Members:: Oh, oh!


Madam Speaker:: Order, please. I would ask the hon. member to formulate his question now.


John Carnell Crosbie: Madam Speaker, the people to our left scuppered the lower-income people of this country. Will this government now give an affirmative answer to the province of
Oral Questions
Ontario and introduce relief from rising energy costs for people on fixed and low incomes? Never mind present programs; I am referring to a new program today.


Marc Lalonde: Madam Speaker, I do not know where exactly the hon. member is getting his figures, but consumer price index figures for the month of October, 1980, indicate that the rise in energy costs in September was 6 per cent.


John Carnell Crosbie: It was 9.2 per cent for fuel oil.


Marc Lalonde: Since October, 1979, it has been 18.2 per cent. 1 am quoting Statistics Canada figures. I suggest the hon. member check his figures very carefully. Second, we have already indicated that for an average family the savings arising out of our budget as compared with the Conservative budget of last year amounted to as much as $1,000 per family.


John Carnell Crosbie: Who cares?


Marc Lalonde: These have been measures which have been taken in the last budget to help Canadian families. That amount is substantially lower than any benefit that would have been provided by the Conservative government. We have acted to provide for decreases in the price of energy which are fair to the consumers of Canada and to the families of Canada.


THE ECONOMY
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker-


An hon. Member:: Now you will hear the truth!


Bob Rae: -perhaps if the minister had a standard of comparison different from the last Conservative budget, he might find himself being a little less complacent about the finances of Canadians.
I should like to address a question to the Minister of State for Finance. The hard fact remains that with today's increase in the cost of living, which marks the third year in a row that there has been a real decline in the standard of living of the average Canadian, and with the statement in the budget by the Minister of Finance that Canadians will have to learn to accept the real income consequences of higher energy price increases, I should like to ask the minister-quite apart from comparing his budget to the budget which never happened- how he can justify over a three-year period, now a four-year period or indeed a five-year period, the lack of a cost of living tax credit for the average and lower-income Canadians in this country at a time when they see the cost of living going through the roof? How can he justify that in absolute terms, rather than in comparative terms with what may or may not have happened a year ago?
4696

November 14, 1980
OraI Questions


Pierre Bussières: Madam Speaker, in his question the right hon. gentleman failed to mention certain facts. For instance, he failed to mention that by indexing the income tax schedule the government makes it possible for Canadian taxpayers to recuperate millions of dollars in purchasing power, which is in fact recovered from the cost of living increase. He failed also to mention that the government regularly indexes such programs as the family allowance program. Again, in his question, he failed to mention that the government, through the Department of National Health and Welfare, has implemented the child tax credit program to assist families with many children. The indexing of the old age security pension and of the garanteed income supplement are steps the government has taken to assist Canadians to cope with the rising cost of living.


Bob Rae: Madam Speaker, the minister has failed to recognize the simple fact that for three years people have been falling behind the cost of living, and now we can anticipate another three or perhaps five years of exactly the same thing happening, with no compensation from the government.
My supplementary question is directed to the same minister. We are suffering an 11 per cent inflation rate and our economy is working at 80 per cent capacity. I wonder if the minister can explain to the House how a continuation of the same policies of high interest rates and stagnant tax policies will get Canadians out of the bog in which they find themselves, when it is exactly those policies which got them into the bog in the first place, policies which were continued by the Tories when they were in government and are being continued today by the Liberal government?


John Carnell Crosbie: They are your party; you put them there.
[ Translation]


Pierre Bussières: Madam Speaker, it is unfortunate that the hon. member has misread the excellent budget tabled by the Deputy Prime Minister and Minister of Finance. Had he read it properly, he would realize that we are continuing our fight against inflation, establishing a solid base from which to strengthen our economy and especially that we are inviting all Canadians to take up the challenge of energy self-sufficiency and, in that way, to activate our economic development through the injection of billion dollar investments in the field of energy.


Bob Rae: Madam Speaker, 1 have read the budget. We have all read the budget. The fact is that the government opposite has quite simply cooked the books. They produced figures in October which predicted a rate of inflation of 9.7 per cent, and it is running at 10.9 per cent. They said that energy increases would be 15.6 per cent, and they are running at 18.2 per cent.
They said that food would be at 10.1 per cent, and now it is at 12.7 per cent. A budget was produced in October with statements as to what the rate of inflation would be over the next two years, and a month later those figures have been shown to be totally and completely inaccurate. I see the minister shaking his head; they are completely and totally inaccurate. How could the minister expect any reputable person to expect any degree of honesty or credibility from the government, with respect to the economic statistics it is producing, when we see in fact that the figures are completely and totally inaccurate and do not reflect at all what is really going on in the Canadian economy?


Pierre Bussières: Madam Speaker, it is unfortunate that the hon. member feels that his need for rhetoric and for projecting a solid image as a politician must overshadow his knowledge and intelligence. The hon. member is trying to draw long-term conclusions from a Figure which applies to only one month or one quarter of a year. He must consider the figures for a longer period, and he should also know that, with the action it is taking, the government will stay within its projected limits because, contrary to the opposition, we believe that all sectors of the economy, all Canadians, will support the government's action and fight against inflation in order to bring the cost of living index back to more reasonable levels.


INCREASED COST OF FOOD-INQUIRY AS TO GOVERNMENT ACTION
Mr. Geoff Scott (Hamilton-Wentworth):: Madam Speaker, I should like to address my question to the Minister of Consumer and Corporate Affairs. It concerns the cost of food. What cost $100 in 1971 now costs Canadians $217.30. The minister claims that he does not understand macroeconomics, so I will keep it simple. What a dollar bought in 1971 now costs $2.17. Consumers have been hit that much in their shopping baskets in the past nine years. Since the energy prices have not had a chance to work their way through the system yet, I want to ask the minister what steps the government plans to take to offset these inevitable, further shocking increases in the cost of food?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs and Postmaster General):: Madam Speaker, it is clear that the hon. member like other members before him is trying to be selective in his choice of figures and to stress their incidence on the consumer price index in a devious fashion and with distortion. The hon. member should mention rising wages over the last ten years and he would realize that indeed the average Canadian worker still makes more money at the end of each month in spite of his expenses than he did some ten years ago.
November 14, 1980


Geoffrey Douglas Scott: Madam Speaker, I say to the minister, ask the consumers who are checking out at supermarket counters if the prices they are paying are a distortion. The minister can ask them what they think about the increase in the cost of living under this Liberal government. In 1972, when the Liberal government was faced with rapidly rising food prices, it introduced a consumer subsidy on milk and bread. The government responded then. If the Minister of Consumer and Corporate Affairs is really sincere in protecting the consumer, how will he help Canadians, especially those on fixed incomes, cope with 1980-style cost of food?
[ Translation]


André Ouellet: Madam Speaker, it is obvious that periodically the Canadian government announces programs designed to help Canadian consumers. I think that the budget of the Minister of Finance exemplifies the desire of the government to protect Canadian consumers. When we think of the disastrous consequences that could have resulted from the budget of the previous government, it is clear that the situation of the Canadian consumer today would be much worse than it is now.


UNEMPLOYMENT INSURANCE COMMISSION
Hon. Elmer M. MacKay (Central Nova):: Madam Speaker, I should like to ask a question concerning a matter which I think is quite serious and has probably received discussion in the full cabinet of the government, although the minister responsible is not here today. It concerns the implications of the testimony given at a trial here in Ottawa involving a man named Hawley Black who was charged with defrauding the UIC. I should like to ask a question of the Acting Prime Minister, the Acting Minister of Employment and Immigration, or whoever wishes to answer.
Mr. Yvon Charlebois, the executive director of the UIC, indicated in the course of that trial among other things that the Auditor General's projected figure of $290 million in overpayments of UIC benefits because of fraud or lack of control was only accurate, "give or take $100 million".


Mr. McGrath:: Unbelievable!


Elmer MacIntosh MacKay: He also indicated instances where 109 SIN cards were in the possession of a man in Calgary who had filed 59 claims with the UIC, two people in Montreal had 60 SIN cards and over two months collected $32,000, and there were other incidents. In view of those facts, I want to know what is being done in addition to the minister's statement on April 16.


Some hon. Members:: Question.


Elmer MacIntosh MacKay: I will come to the question. I want to ask the government, the Acting Prime Minister or some minister what
Oral Questions
is being done to ensure that fraudulent practice which is costing so much money is stopped and the money allocated to people who really need it.


Mr. Dennis Dawson (Parliamentary Secretary to Minister of Employment and Immigration):: Madam Speaker, as was pointed out by the hon. member, the case of Mr. Black does demonstrate that departmental security forces and inspectors can monitor such incidents and this is why Mr. Black is now before the courts and why there was a trial.
With respect to the efforts made by the department, last year's report from the Auditor General clearly indicated there was progress made by the Department of Employment and Immigration in monitoring frauds, and the case raised by the hon. member shows that the department can protect its interests.


INQUIRY WHETHER ALLEGED FRAUDULENT ACTS DELIBERATE
Elmer MacIntosh MacKay: Madam Speaker, I have a supplementary question for the Solicitor General, but before I put that question may I point out to the hon. member opposite that that is exactly what did not happen. Mr. Black was not caught by benefit control procedures; he was caught by accident as a result of another matter entirely unrelated to this one, as the hon. member will see if he reads the evidence.
Since Mr. Black is a journalist and used to work in the Solicitor General's department, and since there is some evidence that he did this in a deliberate way to expose this particular shortcoming of the UIC, I would like to ask the Solicitor General whether the hon. gentleman or the Minister of Justice is taking into account whether or not a public service was performed by Mr. Black. Will there be any representations made with respect to sentence in terms of an absolute or partial discharge, taking into acccount all the circumstances? I assume the Solicitor General, in view of the magnitude of this case, is familiar with it.


Hon. Bob Kaplan (Solicitor General):: I am familiar with the case and there will not be any special representation made on his behalf.


PETRO-CANADA CONSTRUCTION OF OIL DRILLING RIG
Howard Edward Crosby: Madam Speaker, my question is for the Minister of Energy, Mines and Resources and it is related to Petro-Canada and marine construction. The president of Petro-Canada announced in Halifax the construction of a $100 million offshore oil drilling rig and said it would be built in Atlantic Canada, but the people in Atlantic Canada are concerned about the ability of our east coast shipyards to perform such a project. Will the minister indicate what steps

November 14. I 980
Oral Questions
he is taking to ensure that this Canadian energy project will benefit Canadian shipyards and will not result in further exportation of marine construction work to countries like Norway?


Marc Lalonde: Madam Speaker, this is a subject which I have had the opportunity of discussing with the president of Petro-Canada on several occasions over the last few months. 1 indicated to him the very significant importance that the Government of Canada attaches to such equipment being built in Canada, in so far as it can be built in this country. The president of Petro-Canada indicated at the time that he would make sure this would, indeed, be a very high priority with the corporation. I think the announcement that he made in Halifax indicates clearly that Petro-Canada has that very much in mind. Again, it is another clear indication of the major role that Petro-Canada can play in the energy field, and in the oil and gas field in particular. I am glad the hon. member is supporting the role of Petro-Canada, contrary to the past attitude of his party in this respect.


NATIONAL DEFENCE
Howard Edward Crosby: Madam Speaker, time will tell whether the minister's assurances are worth while and if the work will be carried out in Canada.
My supplementary question deals with marine construction also and it is for the Minister of National Defence. People in eastern Canada are equally concerned about the progress of the Canadian frigate program. There are rumours that the program may be scrapped. Would the minister give us assurances that the Canadian frigate program is proceeding on schedule and that the course of action which he indicated earlier in this House with respect to a development program, followed by a construction date, will still be adhered to? Can he assure us that the work involved in the frigate program will go to Canadian shipyards?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, I am sorry. I was distracted and would ask the hon. member to repeat his question.


Some hon. Members:: Oh!


An hon. Member:: He doesn't even listen to his questions.


Howard Edward Crosby: Madam Speaker, I appreciate that the minister was deep in thought; I hope he was thinking about the Canadian frigate program. My question was: Will he assure the House that the Canadian frigate program is on schedule, and that the work involved will be done in Canadian shipyards by Canadians?


Mr. Lamontagne:: Madam Speaker, I can assure the hon. member that the frigate program is well under way. There has
been no undue delay. Decisions will be taken in the same way as they were taken with respect to the NFA and other matters related to defence.


HOUSING
Mrs. Margaret Mitchell (Vancouver East):: Madam Speaker, I hope the members opposite are awake for this question since Canadians are fed up with the high cost of housing.
In the absence of the Minister of Finance my question is for the minister responsible for CMHC. The Economic Council of Canada estimates that housing prices have increased 130 per cent over the last decade, while the over-all cost of living rose by approximately 86 per cent. It is forecast that housing prices will rise between 14 per cent and 19 per cent in this coming year, which is well above the over-all cost of living and is far too high. In British Columbia's lower mainland the cost of houses is going up $10,000 every month.
In the absence of the Minister of Finance, will the minister pressure and convince the cabinet and the Minister of Finance that a general lowering and stabilization of interest rates must be established in order to put downward pressure on mortgage costs, which will allow our construction industry to get back to work and produce affordable housing with lower interest rates for Canadians?


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, 1 would be happy to pass the representations made by the hon. member to the Minister of Finance. 1 would like to indicate that, in response to submissions made by hon. members opposite, including herself, the government has already acted in specific measure earlier this year to increase social housing starts by an additional 5,000 and to increase the subsidy in the rehabilitation program. In addition, there was the provision in the budget addressing the question of multiple unit construction with the $15 million MURBs subsidy program.


Margaret Anne Mitchell: My supplementary question is for the same minister. Since to date only 55 AHOP home owners have taken advantage of the government's graduated mortgage payment plan-this limited assistance is obviously not meeting the needs of Canadians-can the minister tell us how many homes are now owned by CMHC because of defaulted mortgages and the reclaiming of AHOP houses? Will he press the cabinet, which we know really does not care about housing, to take steps to correct this situation by ensuring that lending institutions set aside a certain proportion of their lending portfolios so Canadians can get mortgages at rates they can afford?


Paul James Cosgrove: Madam Speaker, 1 will take this opportunity to remind the hon. member that in May, at the recommendation of the Minister of Finance earlier this year, 1 met with the
November 14, 1980

representatives of major lending institutions, including banks, mortgage companies and private mortgage insurers, to communicate just that thought, that assistance to the home owners facing mortgage renewal should be accommodated. They have responded and a number of companies are extending amortization periods and dropping the term of a mortgage. So we are concerned about housing. We have taken steps to react to the representations that the hon. member has requested.


ENERGY CONSERVATION
Mr. Stanley Hudecki (Hamilton West):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. In view of the threat of diminished availability of oil supplied by Alberta, and in order to conserve energy while at the same time decreasing substantially injuries and death on our roads, would the minister, in conjunction with his provincial counterparts, consider lowering the speed limit, which although it is 100 kilometres per hour legally is not being respected on our highways?


Marc Lalonde: Madam Speaker, I thank the hon. member for his question. It is, indeed, a very valuable and worth-while suggestion. I must inform him, however, that this matter has been raised repeatedly with provincial ministers at federal-provincial conferences, and while the ministers of energy were generally supportive of such a move, it would appear that some other provincial ministers, whether provincial ministers of transport or from other departments, were not as eager to act on this subject as some of the provincial ministers of energy would wish them to be. I can only tell the hon. member that 1 hope the provincial governments concerned will reconsider the situation and give favourable support to his suggestion.



HOUSING


Miss Pat Carney (Vancouver Centre):: Madam Speaker, my question is addressed to the Minister of Public Works responsible for housing. A recent study by the city of Vancouver planning department estimates that 25 per cent of city housing, or 40,000 households, are experiencing some form of serious housing problem. In addition, with the effective vacancy rate at zero, some people are living on the beaches, on the steps of city hall and in buildings that are slated for demolition. Since the MURBs program announced in the federal budget will only offer relief to those people who can afford to pay $1200 per month rent-which is the average advertised price for a two-bedroom townhouse in my riding-will the minister tell the House what relief he plans in the form of shelter allowances for low and average income families?
Oral Questions


Paul James Cosgrove: Madam Speaker, in response to the hon. member's question, 1 should like to indicate that it was as a result of the conditions she has described that the Minister of Finance reintroduced the MURB provision, with the hope that it would address the problem directly or that there would be an indirect impact which would assist the people she has identified.
I would also draw to the attention of the hon. member a report that she should be thankful was not adopted by this government. It is a secret report prepared for the former Conservative government called the Matthews report which, in addition to recommending cancellation of the community services program, identified the non-profit and rental housing markets as areas to be totally dissociated from funding by CMHC. We should be thankful that the programs outlined in this document are not in place today because they certainly would not help the people that the hon. member appears to be concerned about today.


An hon. Member:: That is shameful.


Pat Carney: Madam Speaker, I have a supplementary question for the same minister. I can advise him that the report he refers to was not adopted. The report with which I am dealing shows that 28,000 of those 40,000 Vancouver households have inadequate income which, of course, is defined as 30 per cent of gross income spent on shelter, and therefore they cannot qualify for mortgages. Since the average price of a home on the lower mainland is $120,000 or roughly twice the national average, and since a buyer requires an income of $36,000 per year in order to qualify for a $75,000 mortgage at 14 per cent, what meaningful assistance does the minister propose to give first time home buyers?


Paul James Cosgrove: Madam Speaker, there is in place already, of course, a plan which permits first time purchasers of homes to set aside $1,000 per year for a five-year period with tax relief in order to assist them in achieving their first down payment. Secondly, in response to that target group, the 5,000 increase in social units that I announced this year was in addition to an existing 25,000 unit commitment across the country. That program is in place and it will continue over the next few years. From personal experience 1 know that it is addressing specifically some of the problems that the hon. member has raised today.



WHEAT-RELUCTANCE TO INCREASE INITIAL PRICE

Mr. Doug Neil (Moose Jaw):: Madam Speaker, my question is for the Minister of Transport who responds for the minister in charge of the Canadian Wheat Board. In response to a question put to him yesterday by the hon. member for Vegre-ville, the Minister of Transport indicated that it was not the intention of the Canadian Wheat Board to increase the initial price for Canadian red spring and durum wheat. I am sure the

November 14, 1980
Oral Questions
minister is aware that there is approximately a $3 spread between the asking price of the Wheat Board and the initial price. Can the minister assure western grain producers that the Canadian Wheat Board is in fact selling grain at or near the asking price and, if this is so, why is there a reluctance to increase the initial price?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, yesterday I tried to explain that there is a time lapse between the rise in the price of grain internationally-about which we are very pleased indeed-and the actual effect of this increase on the accounts of the Canadian Wheat Board. The Minister of State keeps reviewing these things constantly and it is believed that, with the final payments which are due in January next, there will be ample opportunity to make the necessary adjustment in an orderly way.



INITIAL PRICE-REQUEST FOR RECONSIDERATION

Douglas Charles Neil: Madam Speaker, that certainly does not help the western grain producer.


Jean-Luc Pepin: It is money in the bank.


Douglas Charles Neil: Madam Speaker, I have a supplementary question for the Minister of Agriculture. 1 think he was in the House yesterday and would have heard the exchange of questions on this subject. In view of the fact that the western grain producers have commitments to meet in the way of payments on land, equipment and other operating expenses, and are also faced with very high interest rates, will the minister make representations to the minister in charge of the Canadian Wheat Board and ask him to reconsider his decision not to raise the initial price?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, the Minister of Transport and the minister in charge of the Wheat Board and 1 have constant discussions about the problems we face. We will be discussing these matters, and as the Minister of Transport has stated, they will be considered at the proper time.



NORTHERN AFFAIRS


Mr. Peter Ittinuar (Nunatsiaq):: Madam Speaker, in the absence of the Minister of Finance I should like to direct a question to the Minister of Indian Affairs and Northern Development. Before the budget was introduced the Minister of Finance indicated that the government would help those who needed it most. Northern residents are paying four times as much for food as Canadians in the south. For example, a litre of not very fresh milk in Pond Inlet costs $3.60. This is in a part of the country where liquor is the only government subsidized consumer item!


Some hon. Members:: Shame!


Peter Ittinuar: What specific plans does the government have to help residents of northern Canada cope with the highest cost of living in the country?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, as the hon. member may be aware, we adopted a policy that would further extend the moratorium on the taxation of northern benefits for a period of one year. This was at the request of many people in the north. In addition to that, my colleagues, the Minister of National Revenue, the Minister of Finance and I indicated that we would use the period while the moratorium is in effect to try to work out other policies to alleviate high costs in the north. That study will go on while the moratorium is in existence, and 1 hope it will give some considerable relief.
There have been other benefits of a nature that I think the hon. member might be aware of in terms of fuel costs as a result of previous government policies.



COST OF OIL FOR NORTHERN RESIDENTS

Peter Ittinuar: Madam Speaker, I should like to direct a supplementary question to the Minister of Energy, Mines and Resources. There is nothing new in what the Minister of Indian Affairs and Northern Development has said. The only tax breaks for people in the north are those given to multinational corporations and not to northern residents.


John Carr Munro: No.


Peter Ittinuar: For instance, in the Yukon and Northwest Territories, and in fact in the northern parts of most provinces, oil costs over $2 per gallon. In these areas oil is used to generate electricity. Can the minister explain why oil prices are being cushioned in the Atlantic provinces while residents of northern Canada are left to fend for themselves?


Marc Lalonde: Madam Speaker, 1 think the hon. member is misinformed about the situation. The cushioning that is taking place in eastern Canada is exactly the same as that which takes place in the north. The basic price for oil across this country is the same, but obviously there are additional costs related to transportation and expenses of that kind. There is no special program for eastern Canada or one that does not apply equally to residents of the north.
I should also like to inform the hon. member that under the national energy program, which I hope he will support, we have provided for special measures to help the people of the north in terms of insulation programs and conservation. I have already announced that there will be special community projects through which will be developed high energy-efficient houses in the north.
November 14, 1980

I also want to tell the hon. member that the benefits in the north under our program are going to go to Canadian companies, not to multinationals. As a matter of fact, those which will be 75 per cent Canadian-owned will get tremendous benefits compared to the multinationals that are working in the area. I suggest to my hon. friend that he read "The National Energy Program", and once he has read it he will probably not rise to ask such misinformed questions.



NATIONAL ENERGY PROGRAM


Mr. Maurice Foster (Algoma):: Madam Speaker, my question is to the Minister of Energy, Mines and Resources. In view of the tremendous interest generated in the country by the national energy program, and especially the policy to provide grants of up the $800 to convert oil furnaces to natural gas, electricity or renewable energy sources, can the minister say when the details of this program will be spelled out so that home owners will be able to take maximum advantage of this imaginative program?


Marc Lalonde: Madam Speaker, there are discussions taking place with provincial governments at the present time. Some of those discussions have been going on for several weeks. I hope we will arrive at arrangements with all provinces very soon as to how the program will be worked out, especially concerning conversion to electricity.
As far as conversion to gas is concerned, it is quite clear that this program will be available to every house converting from oil to gas or to other forms of energy, such as wood. Commencing October 28 we are asking residents of the various provinces to keep their receipts. However, the details of the program have not been completely worked out with the provinces as yet, but if residents keep their receipts we will make sure that as soon as the application forms are available they will be able to apply and get the information.



IMMEDIATE AND FUTURE USE OF PROGRAM

Mr. G. M. Gurbin (Bruce-Grey):: Madam Speaker, my question is also for the Minister of Energy, Mines and Resources; it is actually supplementary to the question just posed. As well as waiting for the details which the minister is talking about in discussions with the provinces, there are two special parts to that program which people need to understand before they can take any advantage of it at all. First, so that people can start conversions now and take advantage of the program, can he tell us whether or not there will be an opportunity for people to make partial use of that program now and defer some of it to future years? Furnaces converted to gas do not make a lot of sense when we know that a year or
Oral Questions
two down the road there will be more efficient furnaces available. Maybe burner replacement is appropriate now.
Second, if a person just uses a heater-in other words, he only partially converts his home to electricity and so has an oil furnace as well-will this also qualify under the program?
Finally, I presume the minister of finance of Ontario has read the minister's energy program and the recently released budget papers, but he has asked for special consideration for the people of Ontario who are faced with increasing costs for heating oil this winter. Is the minister considering a special program as well at the present time?


Marc Lalonde: Madam Speaker, I am not in a position immediately to answer all the questions raised by the hon. member. As to the first two questions, I will inquire as to the state of discussions with the various provinces to find out whether the view of the provinces is that we could go for such partial conversion as the hon. member has mentioned, and I will be very happy to give him an answer some time next week.
As far as the latter part of the hon. member's question is concerned, we do not foresee any special program in addition to those we have announced in the budget.



PROPOSED SHARED COST PROGRAM TO MEET RISING ENERGY COSTS

Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, I have a supplementary question for the Minister of Energy, Mines and Resources. It concerns a contradiction which appears to exist between himself and the Minister of Finance over the question of additional assistance to low-income families hit by rising home heating costs. On November 4 when I asked the Minister of Finance whether or not there would be support for low-income families who would be further burdened by increases in the cost of home heating fuel, he said as reported in Hansard at page 4405:
We will do our part in co-operation with provincial governments, which have to take the initiative in the first instance. If the hon. member is concerned, she might join with the rest of us in asking various provinces to take a more accommodating attitude toward these particular groups.
"These particular groups" refers to low-income groups. The Minister of Finance has said that if a province would come forward with an initiative, the federal government would be prepared to respond. The Ontario government has done that. Is the minister of energy now about to contradict the position taken by his colleague, or will he announce this morning that he will indeed enter, into the shared cost program which the government of Ontario has proposed?


Marc Lalonde: Madam Speaker, there is absolutely no contradiction between what I said earlier and what the Minister of

November 14, 1980
Oral Questions
Finance has indicated. In fact, the minister stated that there were now certain programs to help low-income families. This is particularly true of the Canada Assistance Plan for which the government has a 50 per cent cost sharing agreement. The benefits granted under these programs are determined by the provinces and not by the federal government. The Minister of Finance clearly stated that if the provinces were to take action to improve the benefits under existing assistance programs for which the Canadian government pays 50 per cent of the cost, the Canadian government would of course co-operate fully with the provinces. However, this is obviously up to the provincial governments involved. As I stated earlier, the federal government has in addition taken certain initiatives to help people through the guaranteed income supplement by increasing the benefits last summer by $420 a year per family.



BANKRUPTCIES


Mr. Gilbert Parent (Welland):: Madam Speaker, my question is for the Minister of State for Finance. It has to do with the Astra Trust bankruptcy. We know that people who have investments of under $20,000 a year are covered by the guarantees of the government. However, will the people who have U.S. currency funds on deposit be covered in like manner? If not, what will be done for those people who are Canadian citizens and have deposits of U.S. currency?


Pierre Bussières: Madam Speaker, the Canada Deposit Insurance Corporation does not cover foreign currency deposits with institutions covered by Canadian deposit insurance, just as it does not cover the $20,000 supplement for such deposits. For people who have made deposits in foreign currencies or who have deposit supplements of $20,000, the hon. member should know that the Superintendent of Insurance is now disposing of the Astra Trust Company assets and that the revenues accruing from this disposal could eventually be used when the procedures are completed to cover, on the one hand, excess deposits over $20,000 and, on the other hand, the type of deposits mentioned by the hon. member, namely, foreign currency deposits.



TRANSPORT


Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, I wish to direct my question to the Minister of National
Defence. It is my understanding that a private commercial hydrofoil enterprise has operated successfully between Toronto and Niagara-on-the-Lake for the last two seasons. It has operated three hydrofoils, providing three flights a day, each having the capacity to carry 200 people. In view of these facts, would the Minister of National Defence give consideration to turning over the Bras d'Or, presently sitting in dry dock, to the CNR or to a commercial enterprise to be used as a commercial hydrofoil operating, say, between Shelburne, Nova Scotia and the New England states, realizing that modifications would have to be made to conform the military configurations to a design more suitable for commercial operations?


J. Gilles Lamontagne: Madam Speaker, I am not aware of all the details which the hon. member has mentioned, but 1 assure him that 1 will look into the matter and try to give him satisfactory answers to all of his queries.


Lloyd Roseville Crouse: Madam Speaker, would the minister inform the House whether the Toronto operators of the three hydrofoils have contracted his department about the possibility of purchasing the Bras d'Or for their commercial operations? If so, will he instead consider the possibility of making the ship available to Nova Scotia in order that we may assist our tourist industry by operating this ship on a commercial basis between Nova Scotia and the United States?


Maurice Lamontagne: This kind of request really does not come under my ministry, but I am interested in it. I think the question is important. If we can help in the matter the hon. member has brought forward, we will be glad to do so.



PRIVILEGE


Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, I rise on a question of privilege. I do so at the earliest possible time. It relates to the actions and the words of the Minister of Public Works responsible for housing (Mr. Cosgrove) during the question period today. I say actions in that the minister waved before this House some documentation which he referred to as a secret report prepared for a minister in a previous administration. He then attempted to summarize or make reference to some of the alleged contents ot that report.
My question of privilege is twofold. First, under those circumstances the Chair should now order the minister to table the report because he referred to it, referred to its contents, and referred in a brief way at least to a summary of it. My second point in rising at this time is to give you notice so that the rights of the Leader of the Opposition (Mr. Clark) and members of the Privy Council on this side of the House may be protected, and we can rise at a future time, relating to a far
November 14, 1980

deeper principle which is embodied in the traditions of British parliamentary democracy and, in fact, is even in written form as far as convention is concerned.
You, Madam Speaker, and the members of this House should be aware, if you are not, that the Prime Minister (Mr. Trudeau), the Right Hon. member for Mount Royal, undertook in writing to the Leader of the Opposition, the right hon. member for Yellowhead, as indeed did the previous holders of the office of Prime Minister of Canada to each successor as an administration changed between different political parties, to set up a system whereby certain reports, cabinet documentation and ministerial documents could only be released, indeed could only be shown to members of a new administration when certain procedures relating to representation by the previous administration could then take place.
This is an extremely serious matter where we have a member of the present administration not only referring to it but actually having that type of report, if it is the type of report 1 believe it to be, and the only way we can find that out is for the Chair to order the minister to table it, as under the rules of the House he should be required to do in any event. This is a very deep principle. Under these circumstances I want to reserve, on the part of my leader and members on this side of the House, the right to raise this question of privilege at a later date.


Madam Speaker:: If I understand correctly, the hon. member is deferring the questions of privilege on the more fundamental matter. He is now asking for the minister to table the report to which he referred in the course of an answer during question period. According to our rules, a minister referring to a document is not obligated to table it unless he quotes from it.


Allan Frederick Lawrence: He summarized it.


Madam Speaker:: A summary can be interpreted as a reference to the document. Under our Standing Orders 1 have no authority to force the minister to table the document. That is up to the minister if he wishes to do so. I do take notice that the hon. member will raise a question of privilege at a later date on the more fundamental question.


Elmer MacIntosh MacKay: Madam Speaker, on this question of privilege which was just raised, I only want to say on a point of order without in any way-


Paul James Cosgrove: On a point of order-


Madam Speaker:: Order, please. The hon. member rose on a point of order and that is why 1 recognized him before recognizing the minister who, I presume, wants to reply to the hon. member for Durham-Northumberland (Mr. Lawrence). I can entertain a point of order before hearing the minister, and I hope it is a point of order.


Elmer MacIntosh MacKay: I think it is a point of order, Madam Speaker. If I understand what my colleague said, this was referred to as a "secret report". 1 have some knowledge of this report as 1
Privilege-Mr. Lawrence
was the minister for whom it was prepared. There was never any intention to keep it secret. Indeed, it was about to be released. I believe it is already public. This in no way undermines the argument of my colleague who pointed out very correctly the conventions and restrictions which have been agreed upon.
The minister in charge of housing was not only exaggerating when he referred to a secret nature, he failed to emphasize it was just a component of a policy we were studying at that point. To that extent, I hope he inadvertently misled the House. To refer to this document as if it were the be all and end all on housing policy is simply not true, and the minister knows that.


Paul James Cosgrove: To
assist the House, Madam Speaker, I was indeed referring to the document referred to by the hon. member who spoke last. It is a document dated October 26, 1979. It came to my attention two days after assuming responsibility for this portfolio. It was published in the Ottawa Journal and has subsequently been discussed at length in many forms by the chairman who submitted the report, Mr. Matthews. It is commonly known as the Matthews report and is in wide circulation. My reference to it as a secret document was that it was prepared in October and not released by the government, but released by the press. I responded to it in a public way after it was brought to my attention in that fashion.


James Aloysius McGrath: Madam Speaker, will the minister permit a question since it is obvious he is not going to exercise his prerogative and table the report. He did indicate it is a public report, and he did say it was a secret report. My colleague said in that respect the minister misled the House. Will he now tell the House what is the classification, if any, on the document?


Stanley Howard Knowles: Madam Speaker, before this matter is finally settled, either by the Chair or by the minister, I invite those who might look into it to study a similar incident not long ago, in 1957.


Some hon. Members:: Oh, oh!


An hon. Member:: 1 was only nine years old, Stanley.


Stanley Howard Knowles: And you were smarter then than you are now.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: The then prime minister of the day, the Right Hon. John Diefenbaker, flourished what he called a secret report. I believe it had been prepared by Mitchell Sharp who, in those days, was a bureaucrat. It had to do with the economy. Because it was flourished and because the then prime minister was claiming that he had it, he was required to table it. It could be that he was required and it could be that he volunteered. Certainly I remember that it was tabled. When I went to the Hansard office to look at my remarks, I discovered that the top page, the page on which it had been marked "Secret and Confidential", had been torn off. Just a

November 14, 1980
Privilege-Mr. Lawrence
little bit of blue was under the staple. Both the minister and Your Honour might check the record of 1957 to see what was done then, whether it was done voluntarily by the prime minister, or whether the Chair ruled that the report had to be tabled. Of course, at that point the document was secret and it had not yet been leaked. But the leaking of documents seems to occur quite frequently these days.
While 1 am referring to leaked documents and reports, 1 must ask the question: why is it that leaked reports are always in English only?


Some hon. Members:: Oh, oh!


Madam Speaker:: 1 will look into the precedent and see whether this was done voluntarily or not, but for the time being it is quite clear from Beauchesne's that a public document referred to but not cited or quoted by a minister need not be tabled. That does not mean that the minister could not table that document at some later date. But if the House is now asking me-not the hon. member who just spoke but the hon. member before him-to force the minister to table the document, 1 do not have that authority.


Allan Frederick Lawrence: Further to my question of privilege, Madam Speaker-


Madam Speaker:: The hon. member cannot speak twice on a question of privilege. 1 understand that he will raise a more fundamental question of privilege at a later date. Is my understanding of the hon. member's position correct? That is the only question I will ask the hon. member to answer now, but I cannot hear him again on the same question of privilege.


Allan Frederick Lawrence: Madam Speaker, this may all amount to a molehill instead of a mountain, now that we have had a description of the report, but 1 would draw to your attention that in actual fact the minister quoted directly from the document in his second intervention. He stood up, lifted the document, turned the page, and said that he was referring to a report dated such and such. That must be a direct quotation.
If the minister referred only to the month or the year, then obviously it was not a quotation, but he referred to the specific date.


Mr. Kempling:: He read the date.


Allan Frederick Lawrence: Apart from that, Madam Speaker, this is the type of difficulty which we get into in this House when a minister makes a shoddy, cheap remark such as we have heard today, and waves or attempts to wave some documentation before you and this House, and refers to it generally as "a secret report prepared for the previous government". We now find that the particular document is not a secret report. We now find that it is a report of a task force about which there was a great deal of publicity at the time. It was not a secret report.
As you know, Madam Speaker, I am prevented under the rules of this House from saying to you that the minister lied. I
cannot say that, nor am I saying that, but I merely point out that by taking that type of shoddy, cheap action in this House by referring to a document in terms which are absolutely incorrect to the knowledge of the minister, we end up in this type of difficulty.


Marc Lalonde: You're making a fool of yourself, Allan.


Allan Frederick Lawrence: This situation occurred because there was not proper identification of the document by the minister. It is a serious matter. If the rules of this House do not call for the tabling of a report when reference is made to that report, particularly by a minister in terms such as we heard today, then obviously those rules should be changed and are wrong. I bring this matter to your attention, Madam Speaker, because otherwise no one in this House except the minister would know the particular report to which he was referring. Thank God we had an ex-minister in the House who was able to identify the report.
However, under such circumstances on another occasion there may not be someone to identify the particular document.
I merely bring that to the attention of the Chair. I continue to reserve the right, as a member on this side, to bring this matter to your attention at a later date as a question of privilege because it was a report which was obviously prepared by a previous administration for a previous minister, which the minister did not make public. Therefore, 1 reserve the right to bring this question of privilege to the House at a later date, as it may well be contravention of the undertaking given to the previous administration by the present Prime Minister (Mr. Trudeau).


Madam Speaker:: The hon. member's point is that because the minister indicated the date the report was written it constitutes a quotation. It seems to me that that is not a quotation. The date, as has been indicated, helps hon. members in the House to determine the report to which the minister was referring. It could be part of the title. The date of the report does not constitute a quotation, and on those grounds I cannot accept the hon. member's argument. But I take notice of his question of privilege which he intends to raise at a later date.


Paul James Cosgrove: Madam Speaker, in an attempt to assist you and hon. members of the House, I would like to table a copy of the report which has been referred to in the discussion. I do not have the English version with me. That will be filed later this afternoon.



MR. CROSBIE-STATEMENT MADE DURING QUESTION PERIOD BY MR. LALONDE

John Carnell Crosbie: Madam Speaker, my question of privilege deals with a reply to a question which I asked earlier today of the Minister of Energy, Mines and Resources (Mr. Lalonde). The minister made a misstatement, probably inadvertently. 1 have with me the Consumer Price Index from Statistics Canada for October, 1980. 1 refer to the
November 14, 1980

heading "Fuel Oil and Other Liquid Fuel" on page 12. It indicates there a 9.2 per cent increase in the cost of fuel oil and other liquid fuels for the month of October, and a 24.5 per cent increase from October, 1979, to October, 1980, just as 1 indicated in my question to the minister.
The minister said at the time that I was mistaken and that the costs had only risen by 6 per cent in the last month. What he was referring to is a 6 per cent increase in energy costs since September, and an 18.2 per cent increase in energy costs over the past 12 months. However, with reference to fuel oil and heating oils which particularly affect lower-income people who spend more of their income on heating fuel than on gasoline or other aspects of energy, the increase in the last month is 9.2 per cent. The increase over the last 12 months is 24.5 per cent.
The future seems extremely grave in view of these recent figures. Of course they point out the need for an energy tax credit or some kind of assistance for lower-income Canadians such as was proposed by our administration, so that they may meet these increasing costs. 1 would ask the minister to note that his figures were incorrect.


Marc Lalonde: On the same question of privilege, Madam Speaker, we are both correct because we are talking about two different sets of figures. My hon. friend was talking about the price of fuel oil, and I was talking about the total cost of energy. As a matter of fact, we are quoting from the same document, but we are probably looking at different columns. The record will speak for itself. It will be clear that the figures are correct in both cases. One set of figures refers to the total energy cost and the other set refers to fuel and oil.
With regard to the comment made by the hon. member, I can assure him that the government is very concerned about the impact of these increases on the cost of living and on the cost of energy. This concern was borne in mind when we developed our budget and our energy program, and that is why we have tried to keep the increased costs to the consumer at a lower level than was foreseen in the previous budget introduced by the hon. member. In that sense the Canadian consumer is protected in a very significant way as compared to what he would have paid under the planned budget of the hon. member when he was minister of finance, even with the tax credit.


John Carnell Crosbie: Absolute malarkey.


Marc Lalonde: However, that is more argument than it is privilege.


Madam Speaker:: Of course, there is no question of privilege. The hon. member for St. John's West (Mr. Crosbie) knows that he cannot correct any of the minister's statements in Hansard. That will have to be done by the minister. Through this exchange, the information of both the minister and the hon. member has now been recorded. I remind hon. members that the matter was a point of debate, not a question of privilege.
Order Paper Questions



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 1,060, 1,456, 1,549, 1,606 and 1,625.


Mr. Cossitt: 1.	Are conflicting answers being given by Canada customs officers to American tourists entering Canada drawing trailers with their vehicles for summer camping purposes and, if so, what are the exact requirements or guidelines that customs officers should follow?
2.	Is the government aware that many American tourists have found that they are having problems, particularly if they leave the trailer in Canada for an extended period of time?


Hon. William Rompkey (Minister of National Revenue):: 1
and 2. Under customs law, visitors are entitled to use their vacation trailers in Canada without customs assessment. A number of conditions are stipulated, the most prominent of which requires that the vacation trailer be re-exported at the conclusion of the visit. It has recently been brought to my attention that due to regional differences in interpretation of the term "visit", some American visitors have been allowed to retain their trailers in Canada on a seasonal basis, while others have been advised that the unit must be re-exported each time a return trip is made home. In an effort to achieve uniformity in instances of this nature, instructions are being issued to all offices across Canada outlining the procedure to be followed. Basically, vacationers who will make regular use of their trailers in Canada will be permitted to retain them in this country on a seasonal basis without having to re-export them each time they make a return trip to the United States. Under this procedure, written permission will be given in each instance in the form of a small blue permit which is to be displayed on the trailer while it is in Canada.


Mr. Cossitt: What is a full description of the methods and procedures for the hiring of (a) permanent (b) temporary or seasonal employees on the Rideau Canal?


Mr. Roger Simmons (Parliamentary Secretary to Minister of State for Science and Technology and Minister of the Environment):: Rideau Canal conducts its own recruiting for administrative support (clerical) and operational (maintenance) type positions.
(a)	Hiring of permanent employees-This includes seasonal employees as under the Public Service Employment

November 14, 1980
Order Paper Questions
Act and Regulations, there are only two types of employment tenure, term and indeterminate.
Closed or open competition
In the event that attempts to recruit qualified candidates from within the public service are unsuccessful or where it has been determined to be in the best interests of the public service, the responsible staffing officer may, subject to the conditions of delegation, consider recruitment from outside the public service, in accordance with the Public Service Employment Act and Regulations.
(i)	Open competitions (open to the public)
People wishing employment at the Rideau Canal must register with the local Canada Employment and Immigration Centre (CEIC), the canal office must go to the local CEIC office for referral of potential candidates. The referred candidates are then interviewed by canal personnel and rated against appropriate selection standards. Qualified candidates are then placed on an eligible list and offered positions as vacancies occur during the time the eligible list is valid, as governed by Public Service Commission Regulations.
Note: The Rideau Canal is divided into three administrative districts, e.g., the northern, central and southern regions. The northern region (from Ottawa to Mano-tick including the cities of Ottawa and Nepean, and the townships of Gloucester, North Gower, Osgoode, Marlborough, South Gower and Oxford) is served by the Canada Employment Centre in Ottawa. The central region (from Burritts Rapids to but not including the Narrows, and including the townships of Marlborough, Oxford, Wolford, Montague, North Elmsley, North Burgess, South Elmsley, South Burgess and Bastard, and the towns of Smiths Falls and Perth) is served by the Canada Employment Centres in Smiths Falls and Perth. The Southern region (from the Narrows to Kingston, the city of Kingston and the townships of north Crosby, south Crosby, rear of Leeds and Lansdowne, Storrington, Pittsburgh and Kingston) is served by the Canada Employment Centre in Kingston.
(ii)	Closed competitions (open only to federal employees)
There are two types of closed competitions; local and regional. A local closed competition includes only employees of Rideau Canal. A regional closed competition includes Parks Canada employees, Ontario region, which encompasses the province of Ontario. The area of competition for closed competitions is determined from the "Area of Competition Guidelines" as issued
by the Public Service Commission on the basis of three considerations; the organizational unit within which a candidate must be employed in order to be considered; the geographic boundaries of the area of competition; and the occupational group and salary of employees. Closed competitions for employees of Rideau Canal take place when the number of candidates is sufficient to meet the three considerations listed above. Closed competitions are widened to a regional scope when the canal cannot provide sufficient candidates. Closed competitions are extended to other regions and other departments when an insufficient number of candidates is available. The candidates are interviewed by canal personnel and rated against appropriate selection standards. Qualified candidates are placed on an eligible list and offered positions as vacancies occur during the time the eligible list is valid, as governed by the Public Service Commission Regulations.
(b)	Hiring of temporary employees (term)
The methods and procedures are the same as in (a) (i) and (a) (ii).
If there is a requirement to staff positions other than those in the administrative support or operational categories described above, it is referred to the regionl office which essentially follows very similar procedures using the Public Service Commission as a central agency instead of the Canada Employment and Immigration Centre.


Mr. Stevens: 1.	For the fiscal year ended March 31 (a) 1979 (b) 1980, what were the number of World War II disability pensioners by class (I through 21) for (i) Newfoundland (ii) Nova Scotia (iii) New Brunswick (iv) Prince Edward Island (v) Quebec (vi) Ontario (vii) Manitoba (viii) Saskatchewan (ix) Alberta (x) British Columbia (xi) the city of Calgary (xii) all World War II disability pensioners outside Canada?
2.	For the fiscal year ended March 31 (a) 1979 (b) 1980, what was the total cost of disability pensions for World War II pensioners, by class (1 through 21) for (i) Newfoundland (ii) Nova Scotia (iii) New Brunswick (iv) Prince Edward Island (v) Quebec (vi) Ontario (vii) Manitoba (viii) Saskatchewan (ix) Alberta (x) British Columbia (xi) the city of Calgary (xii) all World War II disability pensioners outside Canada?


J. Gilles Lamontagne: The Canadian Pension Commission does not maintain statistics as to the number of World War II disability pensioners by class (1 through 21) for each province or city. The statistics shown in table I have been compiled using information obtained from Canadian Pension Commission district offices. In some cases district office boundaries do not correspond exactly to provincial borders, e.g., southeastern British Columbia is served by the Calgary office, and the Thunder Bay area of Ontario is served by the Winnipeg office. However, any variation resulting from these overlaps is small. The number of disability pensioners by province, and the total cost of these disability pensions by province for the fiscal years ending (a) March 31, 1979; and (b) March 31, 1980, are
November 14, 1980

Order Paper Questions
shown in table E The total number of World War II pension-	Environment): 1. Two buildings at Jones Falls were disposed
ers by class (1 through 21) for the fiscal years ending (a)	of through Crown Assets Disposal Corporation.
March 31, 1979; and (b) March 31, 1980, are shown in table (a) CADC-1-K5801-0-0014 (Frame cottage 6.7 M x 6.7 IF	M)
Table 1
Total of World War II pensions by province and total cost by province
	March 31, 1979		March 31, 1980	
Province	No.	Annual Liability	No.	Annual LiabilityNewfoundland	1,022	$ 3,507,825	1,019	$ 3,821,803Nova Scotia	6,145	18,522,103	6,154	19,659,223New Brunswick	4,296	12,174,064	4,267	12,966,530Prince Edward Island	1,185	3,582,211	1,182	3,843,422Quebec	10,974	30,738,749	10,783	32,345,237Ontario	32,018	85,671,139	31,801	91,298,239Manitoba	7,155	22,078,817	7,021	23,320,330Saskatchewan	4,057	11,686,833	4,013	12,402,596Alberta	7,340	19,887,616	7,135	20,770,660British Columbia	14,866	41,677,635	14,936	45,213,913Outside Canada	3,814	10,760,327	3,716	11,335,457Total	92,872	$260,287,319	92,027	$276,977,410Table 11	Total of World War 11 pensioners by class	Class	Per cent	1979	19801	98-100	3,549	3,5142	93- 97	216	2223	88- 92	619	6324	83- 87	421	3895	78- 82	1,419	1,3886	73- 77	561	5587	68- 72	1,187	1,0978	63- 67	687	6619	58- 62	2,180	2,13710	53- 57	1,007	98511	48- 52	5,487	5,28512	43- 47	535	57213	38- 42	3,924	3,81714	33- 37	2,384	2,37715	28- 32	5,982	5,81416	23- 27	5,325	5,24017	18- 22	11,288	11,04118	13- 17	9,505	9,41519	8- 12	20.910	20,35420	5- 7	14,891	14,68921	1- 4	795	1,840Total 92,872	92,027


Mr. Cossitt: 1.	Did Parks Canada or any other branch of government recently dispose of two buildings adjacent to Jones Falls in the constituency of Leeds-Grenville and, if so, what are the names and addresses of those who obtained the buildings and, in each case, what was the cost?
2.	Were the buildings advertised for sale and, if not (a) for what reason (b) is the government aware that there were a number of persons interested in bidding on the buildings?
3.	Did an official of the Rideau Canal give assurances to some persons that the buildings would be sold by public advertisement?
Mr. Roger Simmons (Parliamentary Secretary to Minister of State for Science and Technology and Minister of the
DPW Sales Order 14521 Purchased by: Bruce Merriman R.R. 1
Elgin, Ontario Price: $1,010.00
(b) CADC- 1-K5801-0-0015 (Frame cottage 5.5 M x 11.0 M)
DPW Sales Order 14519 Purchased by: Brian Ready R.R. 1
Portland, Ontario Price: $1,510.00
2.	The buildings were advertised locally. Tenders for the sale of the buildings were placed in the following locations:
(a)	Kenney Hotel, Jones Falls
(b)	Jones Falls Lockstation
(c)	O'Hearns Shell Service Station, Elgin
(d)	Southern area office, Rideau Canal, Elgin
All persons who had previously inquired about these buildings were notified by telephone that the tender documents were available at the southern area office in Elgin, Ontario.
3.	An official of the Rideau Canal indicated that notices would be placed locally and this was done.


Mr. Dinsdale: Did the government provide funds for research on test tube babies and, if so (a) in what amount (b) in what location are the experiments taking place and who is conducting them?


Mr. Douglas Frith (Parliamentary Secretary to Minister of National Health and Welfare):: In so far as the Department of National Health and Welfare is concerned: No.
In so far as the Medical Research Council is concerned: No.


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

November 14, 1980
Bank Act


Madam Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, November 13, consideration of Bill C-6, to revise the Bank Act, to amend the Quebec Savings Banks Act and the Bank of Canada Act, to establish the Canadian Payments Association and to amend other acts in consequence thereof, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs, and motion No. 25 (Mr. Lambert).
Hon. Marcel Lambert (Edmonton West):: Madam Speaker, last night at the adjournment hour we were discussing the amendment which I proposed in motion No. 25. 1 was engaged at that time in a short historical review as to the origin of the provisions of the Bank Act allowing the banks to engage in mortgage lending on the security of real property. I had indicated that some of the banks had been dragged, kicking and screaming, to the table, because back in 1966 they adhered to the principle that bank liquidity required them to keep out of long-term investments. They were not even going to go into medium-term investments, in other words, anything from four to seven years.
After all, we must remember that in the context of bank financing in North America, or bank history, the American banking crisis in the early thirties had been caused primarily by thousands upon thousands of American banks engaging in that very dangerous practice of borrowing short and lending long. That principle still applies, and there is no question that our banking system will get into deep trouble if there is an over-emphasis on the capabilities of the banks to lend on long-term mortgages while they are borrowing short on the basis of demand deposits and short-term deposit certificates. I say short-term deposit certificates; I refer to those up to five years.
It is ludicrous for a bank to lend the money it gets on five-year term for 25 years beyond certain points. It can do that within certain margins. In order to guarantee that it will repay its deposit certificates of up to five years, it must have a renewable source of funds either by way of a sufficient volume of repayment of the long-term obligations due to it, or an actual inflow of cash by new certificates on terms up to five years. Outside of that the system is into a policy of bankruptcy.
There are safe limits and there are limits beyond which the banking system as such cannot go. It is not like trust companies. Trust companies can lend only those dollars which they
have either in their fiduciary capacity or dollars they get through deposit certificates. Those are the only moneys they can lend on a term basis.
On the other hand, the banks have their one-for-eight formula, and they can expand into loans. We recognize that; that is part of commercial banking, but in so far as mortgages on real estate on a long-term basis-and this is what the Canadian Bankers' Association complained about, in part I would say, back in 1966-Parliament in its wisdom imposed a 10 per cent limit of deposits. It did not talk at that time about deposit certificates. They did not have those as a source of funds. Therefore, in the 1967 act it was strictly an amount equal to 10 per cent of the deposit liabilities of the banks payable in Canadian currencies. The Canadian banks were not very deeply into foreign business at that time.
The act said "the banks", but there was a gap in the act, unfortunately, and we saw the growth of bank mortgage companies. Frankly, the banks have now engaged in an end run. Some of the banks do not even have 1 per cent of their deposit liabilities directly invested in mortgages. But one of a bank's subsidiaries, which is a mortgage company, may have up to 15 per cent of the deposit liabilities and, in addition, the liabilities under the deposit certificates as provided for in the proposed section.
The government is blithely letting this carry on. There is no change. The banks will clean themselves out. They will assign to their mortgage company subsidiaries all of the business under realty mortgages, whether they are residential or commercial, far exceeding, though, the guidelines and the principles insisted on by Parliament.
The minister will have to tell me now that the 10 per cent limit on the banking system is no longer valid, and he will have to take the responsibility for that because there is no difference between a bank and its subsidiary. All that happens, of course, is that a bank pumps funds into its subsidiary and lends them on long-term mortgages. Why does the government countenance the breach of the 10 per cent which was laid down in the former act? The purpose of my three amendments is to bring the banks back to that particular point, but I have brought that 10 per cent up to date.
* (1240)
1 do not insist in my amendment, which we are now discussing as the first one, that 10 per cent shall apply to the deposit liabilities unless the government adds the deposit certificate liabilities. I go further than that. I give the banks an additional cushion. I have heard our friends from the banks say, "Oh, you're trying to cut us back. You will cut back on the mortgage lending business." My answer to that, Mr. Speaker, is a plain and unadulterated "horsefeathers", and if they want me to add any other language to that, I will add it. They are talking poppycock. I am giving them an additional cushion but I maintain the 10 per cent.
Banking has evolved in the past 12 years. If you look at the formula which I have proposed, which is 10 per cent of the assets as indicated under schedule Q, you will find many other
November 14, 1980

new forms of flexibility which give the banks ample scope, without Parliament accepting the fact, as they do now-and the minister, the parliamentary secretary and members opposite who are part of the committee know this-that the banks can engage in an unfettered end run. They can simply pump their funds into a mortgage subsidiary. What sort of control can the minister have on this activity? The Liberal administration was in office at that time. Was that administration wrong? Was Parliament wrong 12 years ago in insisting on the 10 per cent limit? If so, the minister should stand up in his seat and say so. There is no other way around it, absolutely none. Either it is 10 per cent or it is not.
The language of the section as it now stands is meaningless because the banks can lend half a per cent of their deposit liabilities in their names directly, but the mortgage subsidiaries can lend up to 20 per cent or 25 per cent if they are so minded. We hope that the board of directors of the banks will resist that because there are practical applications to banking, rules of thumb which are as sound as all the rocks in Canada. The rule is that you do not borrow short to lend long, and that has to be a fundamental, basic principle, which I suggest to the minister through you, Mr. Speaker. Let him remember that if you allow all the banks to do this, not only the well-managed ones but some which are not in the best of shape from time to time as far as management is concerned, it will bode ill for the banking industry. It takes only a few transactions to get them into trouble. 1 will not say that I am going to be the big brother to the banking industry, but we owe it to the Canadian public to ensure that the financial system is as sound as possible.
The minister, in proposing the legislation as it stands now- and I am giving him fair and solemn warning at this point- has opened a hole in the wall through which a coach-and-four can drive many times. There are provisions whereby the minister of finance, through the Inspector General of Banks, may warn a bank that its practices may be unsafe. But what sanction has he? Again, we spoke yesterday of the toothless tiger. We know that many of the powers of the Inspector General of Banks and of the minister are there for cosmetic purposes.
On this score I am deadly serious. On a number of points I have been able to resolve my differences in interpretation of the Bank Act with the minister and the parliamentary secretary. I have given ground and so has the minister-we have come to an accommodation. But on this point I have found the government to be totally unresponsive. I warned the minister at the committee hearings that 1 would be coming back to this point. 1 have come back, and I am as insistent as I am on any particular point, in fact, far more than I am on the requirement of defining the business of banking. To me this is far more important.
I do not want the banks to complain. In my proposed amendment to section 25, I have given them a great deal more latitude. I have brought the provision up to date to 1980. The minister knows that I have often said that in the Bank Act we were legislating for the manufacturer of horse collars, that we
Bank Act
were behind the times, that we were merely bringing ourselves up to date, that we were not legislating for the future. I will admit that I am legislating for the manufacturer of horse collars right now, that I am only bringing us up to date in my amendment. But the minister is not even doing that. He knows that the banks are taking advantage of a loophole in the act by using their mortgage subsidiaries. The 10 per cent is absolutely and totally meaningless.
I am sorry, Mr. Speaker, if I sound so vehement about this and so difficult about it, but to me this is one of the sheet anchors. The Parliamentary Secretary to the President of the Privy Council (Mr. Collenette) can point to his watch all he wants. He does not care about this act.


David Michael Collenette: I am pointing to the table.


Marcel Joseph Aimé Lambert: Perhaps he is drawing attention to the fact that I have been speaking for 20 minutes. But the Parliamentary Secretary to the President of the Privy Council could not care less about this act. This is a fundamental point and I want to take my time on it. If I steal a minute or two, that is perfectly all right. The Chair will tell me if and when my time has expired. Again I make my plea to the minister. 1 want him to understand the banking system fully.
I have been exposed to and been involved in the banking system ever since I started out. On leaving school I was involved in the banking system. Subsequently at university 1 majored in studies in this particular field, and all through my parliamentary career I have been involved with the banking system. At this particular point the act bothers me. Not only are the banks able to get around a particular thing, but it is an invitation by Parliament to ingenious people to find a way around and run all the end runs they want, while we just stand idly by watching them pile up the score.
At this stage I should like to conclude my remarks on motion No. 25. I still have motions Nos. 24 and 26 to come back to later.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, we are debating the Bank Act. The figures released by Statistics Canada indicate that the cost of living increased in the last year by 10.9 per cent, that the cost of food increased by 12.7 per cent, that the cost of housing increased by 8.9 per cent, and that the cost of fuel and utilities, which are so important for anyone who owns or rents housing accommodation, increased by 15.3 percent.
If 1 understood correctly the amendment of the hon. member for Edmonton West (Mr. Lambert), he is proposing a further restriction on the opportunities of banks to lend money to people who want to buy houses and need mortgages. I am not rising to defend the banks, nor am 1 defending the government. I will deal with the banks a little later, but I think the policies of the Liberal government and of the short-term Conservative government with respect to housing have been disastrous. The effect of the amendment of the hon. member

November 14, 1980
Bank Act
for Edmonton West would be simply to dry up the mortgage market even more, and make it more difficult for people to obtain mortgages.


Marcel Joseph Aimé Lambert: They are not lending out money anyway.


David Orlikow: Yesterday the governor of the Bank of Canada gave the people of Canada another one of his economic sermons.


Mr. Evans:: Brilliant sermons.


David Orlikow: I remind the parliamentary secretary that the governor of the Bank of Canada has been giving the same kind of advice for the last six years. It is the same kind of advice which led the Liberal government in 1975 to impose wage and price controls. During the election in 1974 the Liberal party promised never to impose wage and price controls, at a time when there was an emergency and we were facing an increase in the cost of living of 10.5 per cent for the year before the Prime Minister (Mr. Trudeau) brought this bombshell to Parliament. The wage and price controls were imposed, they were supposed to solve our problems, and here we are five years later and the cost of living is increasing at just about the same rate as it was when the Prime Minister brought in those controls in 1975.
What did the governor of the Bank of Canada say to Canadians yesterday? 1 should like to refer to an article which appeared in the The Gazette. It reads in part as follows:
"I confess that I am somewhat disappointed with the results to date" of the past five years' monetary policies, Bouey told the Empire Club in Toronto.
It went on to indicate:
But Bouey forecast the recently restrictive monetary policy, which was aimed at a 5.9 per cent growth ceiling, will have a greater impact on total spending trends in the future than in the past and thus ease the inflationary pace.
He was wrong before, and of course he will be wrong again, because all government policies, such as the energy ones, call for sharply increased prices. Sharply increased prices for energy and food will mean a further increase in the cost of living. As reported in The Globe and Mail, governor Bouey was talking about business when he said:
"If they were to survive, employers simply had to keep their costs-including their labour costs-from rising, and employees could not press too hard for wage increases if they expected their employer to stay in business and their jobs to continue to exist."
The governor of the Bank of Canada is saying to the ordinary people of the country that the cost of living may have gone up 10.5 per cent, and it will probably go up between 11 per cent and 12 per cent next year, but they should not even ask for enough in the way of increases in their wages or salaries to keep pace; they should be prepared to sacrifice. 1 would not mind the governor of the Bank of Canada giving that advice to ordinary people if he gave it to everyone.
Let us look at the organizations with which we are dealing right now. Let us look at the banks.


John Leslie Evans: Oh, oh!


David Orlikow: Of course the parliamentary secretary is one of the team of people who will continue to give the kind of orthodox advice we have been receiving from the governor of the Bank of Canada and the senior officials of the Department of Finance. They continue to give that advice to the people even though the prescription has not worked, even though the illness is greater than it was before, even though the cost of living is substantially higher than before. I am asking them to apply that kind of advice in an even-handed manner. While the governor of the Bank of Canada urged workers to be moderate in their demands, he never said a word about the banks. Perhaps the hon. member for Ottawa Centre (Mr. Evans) does not want me to say these things because he does not want people to know how well the banks have done. I do not know why he would have any other reason.


John Leslie Evans: Mr. Speaker, 1 rise on a point of order. Quite frankly, 1 think the hon. member opposite knows why I am sitting here somewhat upset with his commentary. It is primarily because it has absolutely nothing to do with the motion before the House at this time.
May I call it one o'clock?


The Acting Speaker (Mr. Ethier):: Order, please. The parliamentary secretary may have a valid point. 1 know the Bank Act is quite wide in scope, but 1 think members should deal with motion No. 25 which is before the House.
It being one o'clock, I do now leave the chair until two o'clock p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
The Acting Speaker (Mr. Blaker):: Order, please. When debate was interrupted at one o'clock, motion No. 5 pertaining to the Bank Act was under consideration. The hon. member for Winnipeg North had the floor.


David Orlikow: Mr. Speaker, in the few moments 1 had before the noon adjournment I put on record some of the latest comments and views of the governor of the Bank of Canada, Mr. Bouey. I pointed out how, in my view, he had been wrong in the advice he has given to the people of Canada. I pointed out that, again, he was lecturing and preaching to the vast mass of Canadian citizens who have to live on the wages or salaries they earn, that they should be moderate in their demands on the economy because, if they were not, inflation would get out of hand. I was just about at the point of urging the governor of the Bank of Canada to make the same kind of speech to the banks of this country and to urge them to show some restraint.
November 14, 1980

When we look at the record of the banks, as reported in such journals as the Financial Post and the Financial Times, we see that they have not been as restrained as ordinary people, who would have been lucky in recent years if they could just have kept up with the increased cost of living. The people have been lectured in recent months because some of them have been getting wage increases of about 10 per cent or 11 per cent.
Let us look at the banks, Mr. Speaker, and we will see that Canada's five major chartered banks in the years 1974 to 1978 increased their profits from $404 million in 1974 to $904 million in 1978-a whopping increase of 123 per cent. Those increases have not moderated. Indeed, they have accelerated.
In the November 26 edition of The Globe and Mail last year it showed the change for the banks of this country in terms of their balance of payments, that their assets increased by 24.8 per cent in the period from 1978 to 1979. In another table on October 23 of this year it was shown that their assets had increased by 19.2 per cent from October of last year to October of this year. So we have an increase in the assets of the banks of Canada of 41 per cent in two years. There is not a skilled worker in this country who has the most needed of jobs who would not have been happy to settle for an increase of 41 per cent over the last two years. The governor of the Bank of Canada, or the government has not seen fit to say much about that, Mr. Speaker.
It is not bad enough that the banks made that kind of profit. When we look at the profits for the years 1974 to 1978, we see that for the three-month period ending January 31, 1979, the big five chartered banks reported total operating profits of $338 million but paid taxes of $68 million, or an effective rate of about 20 per cent, compared to the 30 per cent for manufacturing and the 35 per cent for service firms.
If that were not bad enough we now find that the banks are taxed on their operations, because of loopholes in the tax system set up by the Liberal governments of the past and not yet plugged, of an effective rate of something like 10 per cent.
What we need is more regulation of the banks, Mr. Speaker, not less. I speak about the banks because I am concerned about the kind of amendment moved by the hon. member for Edmonton West. He is not concerned about the profits that banks have made and the tremendous influence they have in this country with their over $200 million in assets, nor about the interlocking directorates that bank directors have with the boards of directors of most of the major corporations in this country. We have not heard a word on these matters from the hon. member for Edmonton West.
We are also concerned about the fact that the housing industry is suffering. It is in probably the worst slump that has existed since the end of World War II. Fewer houses will be built this year than in any of the last 20 years, and next year things will be even worse. That is not surprising, of course, with mortgage interest rates running at 14 per cent and more.
1 have some personal knowledge of this, Mr. Speaker, because it was my unfortunate necessity to refinance the
Bank Act
mortgage on my home at a rate of 14.5 per cent or 14.75 per cent. That means that by the time I finish paying off the mortgage-which is relatively small compared to that required for new housing-I will probably have paid 2.5 or three times the face value of the mortgage. I can afford all this better than most people in the country, I must say.
Why do I speak about banks and their profits in connection with an amendment relating to housing, Mr. Speaker? It is not because this party believes that the banks should do less to provide mortgage money-as the hon. member for Edmonton West suggested, if I understood him correctly-but we believe that the lending institutions should set aside much more money than they do for residential mortgages.
For several years we have advocated that the government require lending institutions to set aside a specific portion of their lending portfolio for residential mortgages which would be pegged at a rate lower than the prime rate and would be retained for the amortization period. The hon. member for Edmonton West would have us believe that the banks cannot afford to do that. I think the few figures I have put on the record today indicate not only that the banks could do it, but that they should do it. Their profits have been increasing.
I should like to spend a few moments now outlining our proposal on housing-which is that money should be allocated for people in low and middle-income brackets who want to buy housing at a rate which they can afford, and that much more money be allocated for social housing.
In a year when we need more money for social housing, what has this co-called, progressive left wing Liberal government proposed? Instead of social housing, it proposed more goodies for those doctors and lawyers who can save money on taxes and put it in the MURBs program. We think that is a disgrace, Mr. Speaker. I cannot understand how any minister responsible for housing who comes from a city where housing prices are out of sight, could come forward with such a proposal. I think the minister would resign his position if he had any concern for ordinary people.


Mr. Deans:: He is not even here to listen.


David Orlikow: Let us examine what has happened in the area of housing in the recent years that the Liberals have been in power. In 1967 the Liberals freed the bank rate for mortgages which had been set at 6 per cent. That is a dream world, Mr. Speaker-that mortgages should be available at 6 per cent.
In 1969, on the advice of the then Liberal cabinet minister, Paul Hellyer-my colleague from Comox-Alberni (Mr. Skelly) spoke of the Liberal-Conservative party of Sir John A. Macdonald, but we still have a Liberal-Conservative party which sits on both sides of the House-I should point out, Mr. Speaker, that that particular minister became a leading light in the Conservative party-on his advice, when he was still a Liberal, the 6.5 per cent ceiling on NHA mortgages was released and permitted to be established by market forces.
Let me pause here, Mr. Speaker, to say that since I started to speak before one o'clock I have recalled that Mr. Hellyer's

November 14, 1980
Bank Act
adviser on housing policy-when he was a Liberal-is today the Minister of Employment and Immigration (Mr. Axworthy). So we know how much attention we should pay to his advice.
On the advice of Mr. Hellyer, the 6.5 per cent ceiling on NHA mortgages was released and the rate was permitted to be established by market forces.
In 1969, again on Mr. Hellyer's advice, the five-year rollover on mortgages was introduced, allowing a renegotiation of the interest rate on a mortgage every five years. Prior to that, the interest rate on a mortgage was fixed for the entire amortization period, for example, 25 years.
In 1973, with Bill C-135, the Residential Mortgages Financing Act was passed by the Liberal government with Conservative support. The guiding principle of that bill was "enhancing the attractiveness of mortgage investment". By generating an increase in mortgage funds at unrestricted interest rates, builders and land speculators were encouraged to concentrate on high priced housing where profit margins were greater, and to destroy the moderate and low-income housing market. They succeeded in that, whether knowingly or unknowingly I cannot say, but they certainly succeeded.
In 1974 the Liberals introduced AHOP, a plan designed to give moderate and low-income people with higher earning potential a chance to get into home ownership by providing moderately priced dwellings at subsidized interest rates.
I do not have time this afternoon, Mr. Speaker, to go into detail about the disasters that have occurred. The newspapers have been full of them. A couple of days ago an article in The Globe and Mail stated that Canada Mortgage and Housing Corporation is becoming the biggest landlord in Canada, because tens of thousands of people either have or will, within the next two years, give up their homes purchased under AHOP because they simply cannot afford to meet the mortgage payments. That is what has happened to housing in this country, Mr. Speaker.
This morning's Globe and Mail carries an article which quotes the chairman of A.E. LePage Ltd., one of the largest real estate companies in Canada. The article begins as follows:
House prices will outpace inflation next year as the resale market benefits from a slowdown in new residential construction caused by high interest rates-
There is a slowdown, Mr. Speaker, because the brains in the Department of Finance and those associated with the governor of the Bank of Canada have told us that the way to beat inflation is to have higher interest rates. Of course, Mr. Speaker, that is precisely the way more inflation is created.
1 want to conclude by suggesting to the government that in the Bank Act and in our housing programs we should not increase mortgage rates, or give more concessions to the fast buck operators who want to get the "gravy" from the MURBs program. What we need to do is to provide money to Canada Mortgage and Housing Corporation and build social housing for the tens of thousands of families who cannot afford to buy or rent at the commercial rates existing almost everywhere in Canada at the present time. We need to provide manageable
mortgage money and interest rates for people in the low or middle-income brackets. These are the people who are now completely at a loss to know what they can do or what they will be able to do in the next few years given the fantastic increase in the price of homes and mortgage interest rates. These rates run anywhere from 14 per cent to 18 per cent depending on which side of the bed the governor of the Bank of Canada got up this week.


The Acting Speaker (Mr. Blaker):: Order, please. I gave the hon. member additional time because I thought he was concluding. However, I am obliged now to interrupt him and advise the hon. member that his allotted time has expired.


Ian Deans: Mr. Speaker, my remarks will be brief. I have tried to understand the impact of the proposal made by the hon. member for Edmonton West (Mr. Lambert). I listened to him with great care as he attempted to convince the House that his amendment would not in fact reduce the available number of dollars for mortgage purposes. He pointed out in his own comments the banks themselves believe that this amendment would do exactly that, that it would restrict the amount of dollars available for mortgages. He also pointed out, and I think it is fair to say, that it is true the government does not believe his amendment would do other than reduce the number of dollars available for mortgages.
As we look at the amendment, we cannot help but feel that through the amendment, whether implicit in it or simply as a result of it, there will be a reduction in the number of dollars available for mortgages. You can be sure that if the banks say it will happen, it will. There will be fewer dollars. If there are fewer dollars, then the dollars that are available will almost inevitably cost more. Therefore, this amendment, if one is to understand it clearly, and to understand the impact and import of it, you could not but come to the conclusion that if the banks respond in the way which the member for Edmonton West has said they will, then interest rates will be forced up. Fewer dollars will be made available by the banks. I see the hon. member shaking his head. It seems to me that it shows a rather unusual lack of knowledge for a man having spent so much time in this business.


Marcel Joseph Aimé Lambert: You are the expert?


Ian Deans: 1 am not an expert, although I try to understand them. One thing I know for sure is that if the banks say there will be less money available, whether there need be or not, 1 know there will be less money available. I also know that if less money is made available, that will inevitably lead to higher interest rates. Higher interest rates are something we just cannot afford in this country and that is the problem with an amendment such as this one, well intentioned though it may be. But if the banks believe that that will be the end result, then that will be the end result. The banks will make that the end result in order to prove they were right. That is just one of the difficulties we face in a situation such as this.
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We cannot afford to run the risk of driving interest rates even higher. 1 looked at some of the most recent statistics. For example a $50,000 mortgage in today's market is not a large mortgage, and it is very difficult to get a $50,000 mortgage given the size of the down payment one has to have at today's prices. At today's interest rates you would be paying $7,750 in interest alone.
According to statistics reported in the Financial Post, the average wage in Canada today at this point in time is $316.28 a week. When you calculate that out-and I am sure even the hon. member for Edmonton West could do it-it adds up to $16,446.56 per annum and that is before taxes.
Let us assume for a moment that we are attempting to provide housing for people who make average wages. There is not a single wage earner at the average level in Canada who would qualify for a mortgage at today's interest rates. If what is being said about this amendment happened, mortgage interest rates would continue to rise and that consequence would fall on the head of the hon. member for Edmonton West, and we would not want to see that happen.
Let us take a look at what we are talking about. Even if people who want to buy a home earn $20,000 a year, they do not qualify for a mortgage. They could not get a mortgage at $50,000, even though that would be the average they would be able to find at the lower end of the scale. These people just would not qualify. If a person earned $30,000 a year, that person would have great difficulty qualifying for a $50,000 mortgage as well. Out of their take home pay, they would have to pay in excess of 30 per cent of their income in interest payments alone. Imagine paying in excess of 30 per cent of one's income, and at $30,000 per year it is almost $8,000 annually out of that take home pay. Take home pay for a person earning $30,000 a year would range between $25,000 and $26,000, at the maximum. In the present circumstances that $8,000 would be about 30 per cent of their take home pay in interest payments alone, and that is shameful.
During question period earlier today we raised problems confronting people in this country, and I must say it is with a great deal of frustration that I sit in the House and listen to debates. While we sit and talk about other no doubt important things, there are people in almost every constituency who are making a decision today that they cannot afford to refinance their mortgage because they do not earn enough and they will not be able to meet their payments because interest rates have risen so dramatically in the last five years. People's incomes have not kept pace. That scenario is happening all across this country. Daily people lose their homes, but the government just says, "that is the price for fighting inflation".
There are families who have put all of their life savings into a down payment. They are struggling to meet their commitments, yet these people look to the House of Commons and think that surely to God someone in Ottawa will do something about this outrageous increase in costs we see happening day after day. They see us talking on and on about things which do not appear, at least on the surface, to address their problems in any way.
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I suppose the frustration I have is when I speak to these people on the telephone. I hear things such as, "Ian, I do not know what to do. The end of the month is only two weeks away and my mortgage is due. I cannot find another mortgage at a price I can afford. I cannot sell the house because other people who are likely to be in the business of buying and in the market cannot afford to take on the mortgage either. I will have to walk away and leave it and lose my investment. I will have to start all over again some day in the future if, as and when I achieve the level of income, or if, as and when the interest rates and mortgage costs are down to a point where I can cope with them."
Yet, we argue over whether or not, according to the amendment which the hon. member for Edmonton West is proposing, we are going to increase or decrease the amount of mortgage money. By the time we get around to making the determination, these people will have lost their homes. The problem is really here with the House of Commons where the responsibility lies for action in dealing with such things as interest rates. We are not dealing with them at all. We no longer deal with real things. We no longer deal with those things that affect people directly.
I do not know whether other hon. members feel it in their constituencies or whether it is unique to the place I represent, although I suspect it is not, but I think people are sick and tired of struggling day after day to try to achieve what we have said over the years they ought to be able to achieve in this country, a home of their own at a price they can afford. They have been struggling to do that only to find that we are complacent about the ever-increasing interest rate problem which confronts us.
My colleague from Winnipeg North spoke about the governor of the Bank of Canada. My God, only that he would be unemployed. He should have to go out and look for a job. He should have to live on the average weekly wage of the people in Canada, or even 25 per cent or 50 per cent above that. He should have to get a mortgage for his house at the interest rate levels he has allowed as a result of his policy to fight inflation.
This Bank Act does not speak to the real problems. That is what is wrong with it. People say to me that if we are dealing with the Bank Act, we will be dealing with interest rates. I have to tell them quite truthfully that the only place we can deal with that is an amendment offered by the hon. member for Edmonton West. In truth, that amendment will only serve to affect them detrimentally.
The government has decided to opt out of the business of controlling or influencing interest rates. It has decided it is no longer its responsibility and has given the responsibility to the governor of the Bank of Canada who sits across the street. It is time he got out of his ivory tower and into the constituencies of this country and saw the problems the people are facing. It is time he came before this House, not some committee of it, to explain why it is he thinks he has to ruin the ambitions of

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everyone in this country before a stop is put to these ever-increasing interest rates.


John Leslie Evans: Just what would you do?


Ian Deans: 1 would put a ceiling on interest rates for mortgages.


Robert Phillip Kaplan: They just took the ceiling off in the United States.


Ian Deans: That's right. They are going exactly the wrong way about it.


John Leslie Evans: You just voted to repeal the Small Loans Act.


Ian Deans: I did not.


John Leslie Evans: Yes you did. You are a laugh.


Ian Deans: I am not a laugh. Give us your responsibility for one year and we will have lower interest rates in this country. We are determined that there will be lower interest rates because we care what happens to people. We do not sit and smile when people go down the drain. We do not laugh when we cannot come up with an answer. That is their problem. What the hon. member is offering can do nothing but harm.
Whether it is intended or otherwise, there is no way the banks will respond in any other way than the way they said they would respond. They said they would reduce the numbers of dollars available. That will drive up interest rates even further. 1 quote the hon. member. The end result of all of that means that more and more people will find themselves unable to meet their commitments. The housing industry will deteriorate even further in terms of the number of starts. Many people will lose their entire life savings. In fact, that is now happening.
Instead of sitting muttering and gasping, I wish the parliamentary secretary would come forward with a proposal to bring about a reduction in interest rates which would satisfy the needs of low-income earners in this country so that they can afford to pay other people to work building the houses they are prepared to buy if only they were available at prices they can afford. That is the answer to the problem. That is how it should be dealt with. That is how to turn money over more quickly. If it had not been for actions of the Liberal party in 1966, we would not be in the mess we are in today.


Margaret Anne Mitchell: Mr. Speaker, I too wonder about this amendment. When we are in the position of having so little affordable money available for mortgages, it seems very strange that we should talk about cutting back. Indeed, the very party that talked about a strange mortgage interest deductibility plan talks about not enough money being available for mortgages. I wonder how that program and the deficit would have been affected had the Tories still been in power and we had even higher interest rates.
As my colleagues have said, this amendment appears to make less mortgage money available. It would increase competition among Canadians who want mortgage money. It would certainly increase interest rates. This would mean an even greater increase in the cost of housing.
On Monday I believe we will be speaking to an amendment which will take a different approach. It will ask the Minister of Finance (Mr. MacEachen) to require a portfolio of bank investment money for mortgages to be offered at reduced rates. That seems to be a more positive approach. I see no advantage to the amendment before us today.
Perhaps we might be able to support this kind of amendment if, as the hon. member for Winnipeg North (Mr. Orli-kow) did a few minutes ago, we look at the former role of what used to be called Central Mortgage and Housing Corporation, now Canada Mortgage and Housing Corporation. Instead of privatizing the whole mortgage system, what used to be the key government agency responsible for housing in Canada should return to a direct mortgage lending function. The role of CMHC prior to 1968 was just that. Long-term mortgages were offered so that people had a chance to plan, budget, and develop an equity with a 25 to 30-year mortgage.
We also know there was the preferential interest rate of 6 per cent in those days and that worked very well. At the same time in 1968 there was a deliberate approach to the Liberal government of the day and there was extreme pressure from the banks which today are interested in this Bank Act. What did the Liberals do? They freed all the controls and privatized the whole mortgage system, and we have had trouble ever since.
We now have a situation where CMHC is the bank for bankers. It has no direct investment in housing except in the increasing amount of real estate coming back from AHOP houses and as a result of other programs which have bombed completely. All it does is insure mortgage loans.
CMHC is not a tool for social policy. The Liberal government and Conservative government of last year did not look at housing from a consumer point of view, those Canadians who should have a basic right to decent and affordable housing. This is not the concern of CMHC. Their concern is to give MURBs tax incentives to rich investors, shooting up the cost of rental housing. The Canada Mortgage and Housing Corporation merely offers manipulative programs which put low-income people in very desperate situations. I refer to those people who are able to get into housing under the AHOP program. We believe that CMCH should play a stronger role. If it is not involved in direct lending, it should at least be made a federal financial institution which could control the movement of interest rates to a greater degree.
We do not support this amendment. We do support the idea of more control over mortgage interest rates and the control of moneys held by the banks. We are all aware of the rapidly increasing interest rates. A percentage point increase in the interest rate adds $10,000 to the cost of a mortgage. As I
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mentioned during question period earlier today, there is an extreme housing crisis in the lower mainland of Vancouver. This crisis will soon be felt in St. John's, Newfoundland, and even now is reaching critical proportions in cities such as Calgary.
The cost of an ordinary three-bedroom family house in my riding is increasing by $10,000 every month. That is a real shocker. The federal government must take some action through the Bank Act, and it must seriously review the current problems affecting housing as they are related to federal government programs. Some of my colleagues have talked about the fallacy of the floating interest rates. We will soon be at the rate of 17 per cent again if we are not careful. The rate for mortgages is very close to that now.
As a result of these increasing mortgage rates people cannot plan even if they are lucky enough to have saved the down payment for a house. This applies even in cases where there are two wage earners in the family. Short-term mortgage agreements and high interest rates cannot continue. Home owners, faced with having to refinance mortgages, are increasingly giving up their homes altogether. The rise in mortgage defaults, which end up in the government's hands under the AHOP program, is very alarming. The finger-in-the-dike, band-aid approach of the minister responsible for CMCH is really not helping these people.
The housing industry and financiers recognize that there is no point in amortizing house payments over a five-year period when costs are increasing over that period. These people will be further in debt at the end of the five-year period than when they took out their mortgage. The government's program of graduated payment mortgages is directly related to this subject. This program is a trap for lower-income people. Participants agree to pay a lower amount of interest and make lower monthly payments during the first five years of the mortgage. But by the sixth year the home owner, who thinks he is a home owner-and I say "he" because there are very few women who get involved in mortgage arrangements-owes more than when he first took out the mortgage. That is how the graduated payment mortgage plan works. This plan makes tenants of home owners for the first 11 years, and during this time their debts increase rather than decrease. We are opposed to this kind of program.
I spoke at some length the other day on the MURBs mystery which provides tax shelters for wealthy people and does nothing to provide affordable housing for low-income people. Certainly the program does nothing to create family housing for low-income people. It is a ridiculous plan and a complete misuse of budgetary funds. The government should be investing far more than the $15 million it has invested in this tax shelter in social housing. Social housing refers to affordable housing and has the effect of not increasing inflation. Such a program would prevent exploitation by developers and in some cases landlords.
Those great donators to and friends of the Liberal party, the real estate industry, even have serious doubts about the MURBs program. They do not think that it will help very
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much. Fictitious claims through depreciation saved the large corporations $450 million in unpaid taxes in the past year. It is not good enough for the government to allocate the same amount of money for social housing this year as it allocated last year. We worked hard for an increase, but it was not available early enough to be used, and there was no increase at all in the new budget.
Housing should be viewed as a social investment. Certainly the financial arrangements required to make mortgages affordable for people must be part of a well-thought-out social policy. It is far better to invest in non-profit housing on publicly owned leased land, which will be owned by the public for the lifetime of the house, than it is to invest federal funds in large tourist developments. For example, Vancouver has the development called B.C. Place which is now begging for federal funding. We will have a Transpo 86 nightmare similar to the occurrences in Montreal. I hope that the government will invest in housing rather then this kind of development.
This amendment as it regards the cutback of mortgage moneys will do nothing. Nor have the Liberal government policies done anything to control excessive inflation and speculation. The government should introduce programs which would provide some control over speculation, which is causing the price of housing to go sky high. It was once said that higher costs in housing were due to the price of land, but this is not the case in my community where the price of houses is increasing by $10,000 a month.
A local paper has suggested that the provincial government should introduce a sales tax which would take the form of a disincentive and prevent speculators from buying and selling homes. The government should be keeping a close watch on capital gains tax, as it affects housing in a very negative way. A report from the Ministry of Finance indicates that in 1979 over $2.5 billion was lost to the federal government due to non-taxation of capital gains. Then we wonder why we have such a high deficit. That loss would cover a good chunk of the deficit.
We also learned that during that same period-1 presume this was a 1978 or 1979 report-only about $300 million went into social housing, and that $115 million was lost through tax write-offs for the registered home ownership program. So really we need to have a reformation of our capital gains tax policy. This would certainly bring much more revenue to the federal budget. It would cut down our deficit, and I would hope it would also cut down much of the speculation which is going on with regard to the building of housing, particularly by developers.
1 want to refer to AHOP housing in a little more detail. My colleague referred to The Globe and Mail article of November 11, a great way to celebrate Armistice Day. As we know, the government subsidized builders initially to build AHOP houses, which kept the prices high, not lower, and many of the houses have decreased considerably in value. Many of them were not built well to begin with, and certainly were not built

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in desirable locations. However, the program, particularly in certain provinces which added piggy-back subsidies, had a devastating effect on low-income earners. This was so particularly in British Columbia and Ontario, and certainly throughout the country as well.
The assumption was that this would be another generous Liberal program which would help university graduates and people earning small amounts of money to start with, but who would have higher earnings later, and they therefore were able to get into AHOP houses for $1,000 or less. I think some were able to do so even at about $100. The interest rates increased after a period of five years or so, and suddenly after the end of five years the mortgages were due at the market rate. What happened with many, many people was that interest rates increased during that period phenomenally, so when it came time to renew those mortgages the cost was far in excess of that which was in the original contracts. Subsidies which were available for some people during the initial year or two were lost. In addition, during that period incomes had not increased. In fact real incomes went down for many people because of the inflated costs of fuel, food, and many other commodities.
According to the article to which I referred, in Peel, Ontario, 9,500 AHOP units were sold. Of these, 2,287 have come back to the Canada Mortgage and Housing Corporation. CMHC is now in the landlord business. About 75 more per month will be coming in. CMHC once again has to use dollars which should be going into housing, social housing, land banking and land leasing, to provide affordable housing for people to cover for past mistakes. We see example after example of bad management and misuse of money which should be going into housing.
My colleagues have also spoken about a reduction of mortgage interest rates through mortgage assistance plans. This is something we have advocated repeatedly. We feel that families earning under $30,000 or $25,000 must have mortgage assistance which would bring the rate of mortgage interest down at least to 9 per cent and 8 per cent respectively.
We also feel that it is important that the federal government carry out its shared responsibility for land banking programs and land assembly and also that it get much more involved with the provinces in public land assembly. Municipalities have begged the federal government to resume the program it had in earlier years. Even the president of HUDAC has said that this is absolutely essential to keeping the cost of housing down. I caution, however, that we do not favour public land assembly that is going to purchase and land bank land, and then give it over to developers to use for profit and to shoot up the cost of housing once again. What we want is land banking and preferably land leasing for housing that is non-profit housing, and which will be affordable for ordinary people and people in lower-income brackets.
As 1 said at the beginning, we also feel that instead of reducing the amount of mortgage money available to the banks we should be increasing it and controlling it. We should be making sure that the banks have money available at
reduced interest rates for housing. We will be speaking more about this.
In conclusion, the time is long overdue for a complete review of the function of the Canada Mortgage and Housing Corporation so that we have some kind of federal government agency which will produce housing instead of housing deficits as has been the case in the past.


John Leslie Evans: Mr. Speaker, I am afraid we need a respite from this exercise in the wonderland economics of the refugees from the-


An hon. Member:: The rump.


John Leslie Evans: The refugees from "Let's Make a Deal", but 1 think the respite would be to get back to what we are dealing with in regard to this piece of legislation. Let us get back to the motion.


Some hon. Members:: Hear, hear!


John Leslie Evans: The hon. member for Vancouver East (Mrs. Mitchell) is the housing critic for her party, and she is going to talk about housing irrespective of what is before the House. Alice in Wonderland!
This motion deals with what there should be, and whether there should be a restriction on chartered banks with regard to the proportion of their portfolios which can be held in mortgage loans. That is the question with which we are dealing. It does have some remote relationship to housing in that mortgages are usually what people use to buy housing, but housing is not the main issue. The main issue is mortgages.
The question the hon. member for Edmonton West (Mr. Lambert) raises is whether we should not be restricting chartered banks' lending with respect to the proportion they can put into mortgage loans. The hon. member raised several issues in that regard. For example, if banks are raising their money short term, should they be allowed to lend that money long term because of the imbalance that creates in their portfolios and the possible financial adversity which can result for the banks and the general financial system? The fact is that in 1967 for the first time banks were allowed to enter into the mortgage market in other than National Housing Act mortgages, which they had been allowed to be involved with for some years. The restriction was that they should not be allowed to have more than 10 per cent of their portfolios in conventional mortgages as opposed to NHA mortgages, which were separate from that. At that time there was also the possibility that banks could own mortgage loan subsidiaries which could also make mortgage loans, and the 10 per cent restriction applied to the bank portfolio itself and not to the portfolio of the bank with the mortgage loan subsidiary rolled in.
The hon. member for Edmonton West was a member of the committee which studied this whole issue. At the time the 1967 Bank Act was passed-and that is the act under which we operate right now until the new act is put into place-that
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was a provision. The hon. member for Edmonton West might call that a loophole, but it was certainly something examined by Parliament. Parliament examined this whole issue. As a matter of fact, subsequent to 1967 it turned out that this provision has not been to the detriment of borrowers in the marketplace or to savers. In fact it has been to the benefit of both borrowers and savers in the marketplace.
The hon. member for Vancouver East decried the fact that in 1967 the ceiling was removed from the interest rate banks could charge, which allowed them to get into the mortgage market subsequently, and to stay there. 1 wonder if the hon. member remembers that at the end of the first part of this session, before we recessed for the summer, her own party not only lobbied but also voted very clearly to remove a 12 per cent ceiling on rates which could be charged by credit unions and caisses populaires. That was not ripping off the public. But to say that the removal of the 6 per cent ceilings on banks- because they are banks, banks are big and banks are bad, that is the NDP slogan-is terrible, is utter nonsense, Mr. Speaker. The fact that the ceiling was removed, the fact that banks were allowed to expand their portfolios into mortgage and consumer loans, has meant that consumers have had more money available to them for consumer loans, more money available for mortgage loans. Over the last ten years, the spread between the cost of funds to an institution such as a bank, a credit union or a trust company, and the rate that is charged by those institutions to the consumer has narrowed consistently. In other words, a smaller margin is being taken by financial institutions today than in 1967, and the reason is that more institutions have entered the market. Therefore consumers are getting a much better deal today as a result of bank participation in the mortgage market and the consumer loan market-and that includes not only first mortgages but also second mortgages. Putting more money into the mortgage market meant that funds which the trust companies were making available for first mortgages was freed to be made available for second mortgages. As a result, consumers today have better deals from the point of view of the cost of borrowing and the lending rate on mortgages than has ever been the case in this country before.
The trust companies have lobbied us rather hard in committee to say that banks must be restricted in their mortgage lending, that we must prevent the banks expanding any further into mortgages because it would be detrimental to their financial health. The same argument was put forward in 1967 before the Bank Act was passed last time, and the same kind of provision was required that banks be held to a strict limit. The fact is that the banks have expanded as a result of the revised Bank Act. But has this hurt trust companies? No, indeed, it has not. If we look at the figures available to us from 1967 to 1979, we find that the chartered banks grew at a compound annual rate of 15.9 per cent; trust and mortgage loan companies grew at 16.8 per cent, and credit unions and caisses populaires grew at 19.2 per cent. So all the competing institutions have grown faster.
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Marcel Joseph Aimé Lambert: I rise on a point of order, Mr. Speaker. The fact is that the figures for the trust companies include bank mortgage operations outside of the banks themselves, and the bank subsidiary figures are included in the trust companies, so the representations are quite misleading.


John Leslie Evans: Mr. Speaker, that is correct. The loan company figure includes the bank subsidiaries. I might also add, in response to the hon. member for Edmonton West, that as far as the loan company portfolio is concerned, loan companies are federally chartered companies which have to comply with exactly the same regulations and restrictions as any other loan company. So they are operating as mortgage loan companies just like any other mortgage loan company.
If we are worried about the future of the trust companies, the position we must take, I believe, is not to restrict the flexibility of the chartered banks or of other financial institutions to narrow areas of business. What we have to do is to expand the areas of business of other institutions so they can diversify their portfolios and be less exposed to the risks of the market, which is the case right now for the trust companies because they are restricted to having at least 75 per cent of their portfolio in mortgage loans. If the bottom falls out of the mortgage market, the trust companies are totally exposed, their market is gone. As a result, what we should be doing, and what this government will be doing in bringing forward a new savings, trust and loans companies act, is to allow trust companies to expand their portfolios and diversify into other areas, such as perhaps consumer lending, which will give more competition in the marketplace and which will help trust companies to remain financially viable. Rather than restricting the banks, we should be trying to expand operations of trust companies, credit unions and caisses populaires and have a wider variety of full range financial institutions in this country to stimulate the kind of competition that has led over the last ten years to narrower spreads between borrowing and lending rates and better deals for consumers borrowing in the marketplace. These are the kinds of things we should be doing and the kinds of things this government will be doing.
Members of the NDP have made a very valid point with regard to the effect of putting this amendment forward. It would restrict the banks' ability to either continue or to expand their mortgage lending. That is the intent and the effect of the amendment. That being the case, I think it is noteworthy that chartered banks are represented in over 1,900 communities and cities in this country. If the beneficiaries of this amendment are the trust companies-by placing restrictions on banks, you protect trust companies, thereby affecting the earnings of trust companies, for example-then I think we should look at the number of communities in which trust companies are located. We find that there are trust companies in some 700 to 800 communities in Canada, meaning that there would be somewhere between 1,100 and 1,200 communities, small cities and towns in Canada where banks could no longer expand their mortgage lending and where the population would have to depend perhaps on other institutions, such as finance companies, credit unions or caisses populaires,

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assuming they were there. Let us presume, however, that there are many small communities where there is only a bank and that the bank comes up against the restriction which the hon. member for Edmonton West would have us place in the act. The banker concerned would have to tell a prospective borrower who wants to buy or build a house in a small community, "1 am sorry but I cannot make that loan." It seems to me that this takes us right back to the initial solution which is that the best way to run a financial system is not to restrict your institutions to narrow lines of business, not to specify whom they can lend to and what kind of loans they can make, but rather to expand their ability to operate in the marketplace and to encourage increased competition which will result in better served consumers, lower interest rates and a much more efficient capital market in this country. 1 think that must be the goal of this legislation and of legislation to come from this government in the future.


Some hon. Members:: Hear, hear!


James Ross Fulton: Mr. Speaker, I am pleased to have the opportunity to follow the parliamentary flunkey to Allan in wonderland. I certainly have the impression we are following the north end of a horse running south.


John Leslie Evans: Mr. Speaker, on a point of order. I say to the hon. member: withdraw!


The Acting Speaker (Mr. Blaker):: In the first instance, that is a question of privilege, I presume. At the moment, experience indicates that that kind of language is within the limits of debate. I would have to check Beauchesne to make sure of it, but I invite the hon. member for Skeena (Mr. Fulton) to consider the kind of language he has just used since it will lead inevitably to a ruling by the Chair on whether or not the language has to be withdrawn.


James Ross Fulton: 1 would like to deal at this point with the amendment put forward by the hon. member for Edmonton West (Mr. Lambert), which, in my view, and certainly in the view of the majority of speakers from our party, is a crudely disguised "perk" for the banks which will do nothing but accelerate the present housing crisis. We have to ask some serious questions of members of the House in relation to mortgages and to the amendment which has been proposed by the hon. member for Edmonton West. A very relevant question in relation to housing and mortgages would be: What kind of a loan shark in this day and age requires $35,318.20 interest to pay off a $1,521.80 principal amount? 1 am sure the hon. member for Edmondon West is well aware precisely who those loan sharks are, because the answer to the question is that they are our friendly banks, trust companies and loan offices. If we want to look at it more carefully in today's marketplace, we could take, for example, a below average priced house in the province of Ontario in the $58,000 range. Most buyers would be required to pick up a $50,000 mortgage at a minimum of 14.5 to 14.75 interest rate amortized over 25 years. The monthly payments of principal and interest would amount to approximately $614 per month, and taxes would add approximately $100 per month to that figure. By the time the mortgage came up for renewal in five years, the individual would have paid out $36,840 and he would find that the principal had been reduced by only $1,521.80; the rest of it went to the bank or the trust company as interest. It is on this very point that we must look very seriously at the amendment of the hon. member for Edmonton West. We must consider its ramifications on the housing market which is in a crisis situation. We must relate that amendment to what is happening to the Canada Mortgage and Housing Corporation. Some of the statements made of late were very germane to the debate this afternoon.
I should like to refer to the letter of transmittal dated March, 1980, contained in the 1979 annual report of the Canada Mortgage and Housing Corporation. It reads as follows:
The activities of the corporation in 1979 were significantly affected by prevailing economic conditions and by changes in housing policies and programs. The combination of a reduced rate of economic growth, continuing inflationary pressures, and rising interest rates, contributed to a decline in new house building activity for the third successive year. At the beginning of the year, inventories of unsold or unoccupied new dwellings in several centres also influenced the decline in housing starts which was entirely in multiple dwellings. Total starts of 197,049, compared to 227,667 units in 1978, were at their lowest level since 1970.
The hon. member for Edmonton West is proposing an amendment to limit the amount of capital which banks would be obliged to put out into the market for mortgages. Anyone who has even the most elementary understanding of marketing economics knows that the moment we start limiting any desired commodity in the marketplace, its essential value and its cost to the consumer go up. It is such a simplistic concept that it really surprises me that we would be asked to support such an amendment when there is such a serious problem in housing.
In a few moments I will deal specifically with my riding and with native people, but it is almost a ludicrous amendment for any member of the House to consider supporting.
I refer again to the March, 1980, letter of transmittal to the Minister of Public Works (Mr. Cosgrove). It states:
The reduction in housing starts was in those financed under the National Housing Act. These were down from 59,010 units to 33,467 units, representing declines in both new dwelling starts financed with direct first mortgage loans from CMHC, and in starts using other forms of NHA financial assistance.
It continues:
There was a decline in starts for which NHA financing other than direct first mortgages was provided from 44,250 units in 1978 to 23,444 units in 1979.
In every single area in relation to government programs we see declines in the number coming on to the market.
If the House were to consider the proposal of the hon. member for Edmonton West, we would simply see a further drying up of the available capital in relation to the housing market and further social problems. We must look at it even more carefully if we are to understand the implications of what the hon. member for Edmonton West has said and even the

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crudely disguised remarks of the hon. member for Ottawa Centre (Mr. Evans).
We should look carefully at the impact on families. That was touched on by the hon. member for Vancouver East (Mrs. Mitchell). There are serious problems showing up in the Canadian society because of crowding, young families having to move in with other families, and lack of access to various facilities in the home. A number of very good studies have been conducted on the psychological impact of that type of crowding in relation to the ability and capacity of a child in school, the capacity of a man or woman to carry on their employment. It affects the entire economy in very strange and indirect ways.
The impact of what is happening has a spill-over effect into the construction trade because housing is not coming on market. It would be even more severely limited by the proposal of the hon. member for Edmonton West. The spill-over effect goes back even further and results in a cumulative downturn affecting the largest single national income sector in the economy of Canada. This is something which was overlooked in the budget introduced on October 28. Also, I notice, it is something which members to my right and across the floor seem reluctant to talk about. I am referring to the forest industry which in the province of British Columbia represents about 50 per cent of our economy. As I said earlier, it is the largest single income sector of the Canadian economy with some $20 billion in exports expected this year.
The hon. member for Vancouver East made an important point not only in relation to the amendment but to the problems in the housing sector. She indicated that about 300,000 home owners will be forced into mortgage renewals this year and that about 32,000 of them will be put in a position where they will have to pay in excess of 30 per cent of their income for shelter. Members of this House, particularly those on the other side who sit in cabinet meetings and whatever, must keep this in mind. Perhaps members opposite have homes which are almost completely paid for, but they should remember that in the eyes of most Canadians the incomes they receive are very extravagant. As was pointed out by a number of speakers today, the average Canadian income is slightly over $300 per week. We are talking about very serious housing problems, the impact of higher and higher interest rates, the impact of higher and higher mortgages. As the housing crunch increases because of fewer homes, higher mortgages and higher down payments, we see on one side Conservative members proposing more severe limitations on the amount of capital going from banks into the market, and on the other we hear of unending cuts coming from the minister responsible for housing. The cumulative impact of those two proposals is very germane to the debate today, and I think it requires close scrutiny.
I should like to make one comment in relation to native housing in northwestern British Columbia, a subject which is frequently overlooked by a lot of members for a number of reasons. I will quote very briefly from a northwest British Columbia social perspective which was done a few years ago.
Bank Act
It points out one of the most seriously overlooked areas in relation not only to mortgage money-


The Acting Speaker (Mr. Blaker):: Order, please. I fear that perhaps I am stepping into my own trap and might be making a serious mistake in calling the hon. member to order. But for more than an hour the House has been considering section 176(2) of the Bank Act and motion No. 27. We have a rule of relevance which has been drawn to the attention of the Chair several times, sometimes sotto voce, sometimes through messages and whatnot. Along with every occupant of the chair I know the difficulty of dealing with the question of relevancy because the human brain is capable of making a relationship between any two thoughts whatsoever. If that is the definition of relevance the House of Commons wants to use then there is no alternative but for the Chair to observe it. As far as I know, the Chair is asked to attach more consideration to relevance and in that regard I think that if the hon. member wants to move toward a discussion of native housing and I understand the possibilities of relating that to the amendment before him, and I understand, in particular, in matters of economics, that relationships can be made, it would be helpful if he could relate that subject to the amendment from time to time. This would make it easier for the Chair. I draw this matter to the attention of every member and I say that if it is applicable to any one member then it is applicable to every member. The Chair has to make the same ruling all the time, regardless of the nature of the debate.


Bob Rae: On a point of order, Mr. Speaker. I would like Your Honour to clarify your ruling. Are we not to be permitted to speak on housing on an amendment that deals directly with the question of the share of the market that is going to be allowed to banks and to other institutions? And with relation to mortgages, are we not to be allowed to talk about mortgage interest rates on an amendment that directly affects what those interest rates will be? And are we not to be allowed to discuss the government's policy with respect to housing and interest rates on an amendment which directly relates to mortgage interest rates? I would like you to clarify your ruling please, Mr. Speaker.


The Acting Speaker (Mr. Blaker):: Ordinarily, the Chair ought not to be drawn into debate. That is why I suggested at the beginning of my remarks that I was walking into a trap set by myself.
I will try to cover the subject as quickly and as fairly as possible. First, to my mind it is self-evident that every occupant of this chair will have to consider what the rule of relevance is, and then apply it with an equal and fair hand at all times, to all members. Second, I do not think the rule of relevance can be defined in such a fashion that as long as an hon. member simply makes reference to the motion before the House, that constitutes relevancy. In my mind it does not. I do not think that can be accepted. Finally, I am well aware that particularly in the matter of economics-and I made this point to the hon. member for Skeena (Mr. Fulton)-that it is quite
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possible, logically, to relate many subjects to one another in that field. 1 do not think any occupant of the chair can bring down a particular ruling of relevancy on every occasion on every subject.
1 want to point out to the hon. member for Broadview-Greenwood (Mr. Rae) that I did not make a ruling. I did appeal to the hon. member to consider the rule of relevance and attempt to contribute to the debate with that in mind. The traditional role of the Chair has been not to rule on each and every point of order or on each and every question of relevance but to try to draw to the hon. member's attention that some effort ought to be made to stay within some semblance of a rule of relevancy. That is what 1 have done. 1 do appeal to the hon. member for Skeena in that regard. 1 understand the difficulties but I do want to make clear that it is possible, logically, to relate any number of subjects, one to the other. 1 can only hope that hon. members will see fit to try and relate them a little more closely to the subject matter before the House than has been done in the last hour or so.


James Ross Fulton: Mr. Speaker, before 1 carry on I would point out that most of my contribution is concerned with native housing. If it is to be your ruling that mortgage interest rates and the impact of the amendment by the hon. member for Edmonton West makes native housing and that type of issue irrelevant to the amendment or to the section of the Bank Act with which we are dealing, 1 would appreciate your ruling at this point because, quite frankly, that is the subject matter of the remaining speech notes which 1 have for today. It is the issue I intended to centre on.
I would like to quote briefly from a paper prepared by Mr. Graham Farstad several years ago entitled "Northwest British Columbia-A Social Perspective." It relates directly to reserve housing in my riding and I think it is relevant. It says:
By far the greatest incidence of housing without basic amenities comes from registered Indians on northwest reserves. There was no running water in 41 per cent of houses, no indoor toilet in 57 per cent of houses and no indoor bath in 61 per cent of houses. The percentage of existing houses in poor condition varied from 17 per cent to 23.9 per cent in the northwest Indian districts. These serious deficiencies also affect educational success, health standards and over-all motivation. Consequently improvement of existing housing must be an essential component of any program to assist Indians.
The relationship of families to housing is examined . . . Throughout the northwest, the number of persons per household is significantly higher than the B.C. average. With more persons per household in the northwest, one would expect more rooms per dwelling to accommodate them. In fact, the opposite is the case. The result is more people living in smaller houses.
In my view this is highly germane to the issue that is before us, because the proposal put forward by the hon. member for Edmonton West clearly has the intention and, in fact, would limit the amount of capital which would be available for housing. It runs parallel to the proposals and the legislative process that we see coming from the Liberal government at this time, which are limiting the amount of capital going not only to native housing but to low and middle-income housing across the country. It is creating a very serious crisis. It is important that we know precisely why members to our right are making proposals such as that. I have not heard any relevant statements from that side as to why they are so
interested in seeing that amendment go ahead. But I find the following somewhat germane to statements made by both of the previous speakers:
It is instructive to look at bank profits. Since 1973, the year when the Liberals passed the residential mortgage financing bill to "enhance the attractiveness of mortgage investment", bank profits have risen by over 250 per cent.
I do not know of very many working families in Canada who have seen their incomes increase by 250 per cent since 1973. I do not know of very many commodities in this country that since 1970 have not doubled in cost to consumers.
In concluding my remarks and in the interest of maintaining good relationships with the Chair I will stay away from going extensively into the problem of native housing, which in my view is one of the most serious and pressing issues in this country. So I will just say that I see the amendment by the hon. member for Edmonton West as being, really, a crudely disguised "perk" for the banks. I am surprised that the points which were raised by the hon. member for Ottawa Centre did not deal either with the serious problems within housing or the serious problems which would be created by the proposals of the hon. member for Edmonton West. Nor did he deal with the serious problems we will still face when the Bank Act is passed.


Howard Edward Crosby: Mr. Speaker, I rise to engage briefly in this debate and to support the amendment put forward by the hon. member for Edmonton West (Mr. Lambert). In pith and substance the amendment relates to the amount of mortgage funds that are available to the mortgage market through the chartered banks. But in the result the amendment is simply another method of calculating the amount that could be made available. I do not think it is intended to control or reverse the policies which relate to the mortgage practices in Canada. It is merely intended to put it on a sounder financial basis.
In effect, the amendment relates the formula to the assets of the bank rather than to the liabilities of the bank. That is in terms simple enough for all to understand. There is no intention to affect the amount of money which is available to natives or any other group in Canada but simply to put the whole matter of the Bank Act, and the provisions of it, on a sounder, sensible basis. I am sure the hon. member for Edmonton West had nothing more in mind than to put forward a change in the proposal to make it more sensible, more amenable to the business practices that should be applied to banking activities.
This points up another aspect, however, which is that the Bank Act and the provisions before us in this bill are not written in stone. They are not things that cannot be changed, that cannot be improved, that members here cannot influence in a way which would change them for the better in the conduct of the business of banking for the benefit, basically, of the people of Canada.
This is just one example and there are many more. We have seen in proposals before us under the Bank Act provisions which would allow banks to get involved in the leasing of
November 14, 1980

automobiles and other equipment. This prospect caused great concern to the automobile industry. Representations were made and we are all pleased that the minister saw fit to bring forward an amendment which would change that situation. This is just one more improvement which has been proposed. It is based on good sense and good judgment, and its intention, I am sure, in fairness to the hon. member for Edmonton West, is to have as the end result a better act providing for better control over our banks and our banking system.
As I have already indicated to the minister and to the House there are provisions that can be changed. The provision which would have allowed the banks to become involved in leasing from which they were formerly precluded, has been changed to allow the automobile industry and other businesses engaged in the leasing of autos and other equipment, to retain control of that field and not be subject to unfair competition from the banks. I am sure the objective of the hon. member for Edmonton West was simply to improve the bill.
The Bank Act is not written in stone, Mr. Speaker; it is not a perfect document. In my view, the main drawback is that the Bank Act is not subject to proper supervision and administration. There is no provision for officials to change some of the restrictions which have been placed on banks such as the percentage of assets or liabilities that can be used in the mortgage market. I believe this should be a function of the supervisor of the Bank Act, the Inspector General of Banks. Until now he has had the limited function of ensuring that banks operate on a sound financial basis. There should be a provision for such greater supervision and control of banks on a day to day basis to ensure that they become more responsive to the needs of the public, and that they can change with changing times.
1 have reviewed the provisions of the Bank Act which relate to the Inspector General of Banks who, after all, is the supervisor of banks. This official should be charged with some control over these changing aspects of the Bank Act- bearing in mind, of course, that the provisions of the act only change every decade. I think it is one of the drawbacks of the Bank Act that legislators are forced to make provisions that are binding for long periods of time. We should try to find a way of placing within the Bank Act the means to control factors such as the amount of money available for mortgages across Canada through banks and other lending institutions, as situations change. The only hope of achieving a provision for such change within the act lies with the office of the Inspector General of Banks. There is ample precedent for this in other legislation. As the office of the Inspector General of Banks is presently constituted, he may not be capable of assuming these responsibilities but if we want the Bank Act to be something that can grow and change as circumstances demand, this is the area we should be concentrating on rather than just trying to change the various provisions before us in the bill. We would have to reconsider the whole structure of the act.
Bank Act
We are faced with an imperfect document, Mr. Speaker. The hon. member for Edmonton West has tried to alter one of the provisions in a manner that we feel would be more favourable to the industry, to people who need the services of banks, to those in the mortgage field and other fields as well. As the act now stands, it does not have the flexibility that would allow for change from time to time. The only way this kind of flexibility could be achieved is through the proper supervision of banks and the banking industry by a properly constituted office under a properly constituted officer such as the Inspector General of Banks. At the moment, however, his powers are so limited that he can do nothing for people whose day to day lives are affected by banking activities. If we want the Bank Act changed so that it can reflect the needs of the Canadian community as conditions change, we should be looking for some technique that would allow those changes to be made.


Bob Rae: Mr. Speaker, I simply want to point out to the hon. member for Edmonton West (Mr. Lambert) that the inevitable consequence of his amendment would be an increase in interest rates, a reduction of competition in the mortgage market and a special deal for certain institutions such as trust companies and mortgage and loan companies at the expense of the consumer.
1 am not surprised at the position taken by the spokesman for the Conservative party in this debate but I think the consequences of the amendment should be made clear. An hon. member says, "That's what you think." That is true; that is why I am saying it. I know it is not traditional for a Conservative always to say what he thinks but that is how we in this party conduct ourselves.
The hard fact is that if hon. members were to seriously consider the problems that exist in the residential mortgage market, the idea of providing for less competition or of providing a special privileged position for certain institutions such as trust companies, makes little sense. In the first six months of 1978 the total of mortgage loans approved by all lending institutions was $6,590 million. In the first six months of 1979, the figure rose to $6,975 million. In the first six months of 1980, it dropped to an astonishing $4,158 million-a decline over the previous year of nearly $3 billion or almost 50 per cent.
The mortgage market has, in a sense, almost collapsed. In the first six months of 1980 the number of housing starts was at the lowest level since the early sixties as I pointed out yesterday in a question to the minister responsible for CMHC. It is down to 53,800 starts. The minister replied that on an annual basis the figures for October showed 187,000 starts. That is the October figure multiplied by 12. If we contemplate what the figures for 1980 will be, we can only conclude that starts are at the lowest ebb since the early 1960s.
Confronted with this situation and considering the fuel that has been poured on interest rates as a result of government policy and confronted with the tremendous uncertainty existing amongst borrowers and lenders about whether to make loans for five years, three years or one year, the result has been a virtual collapse in the housing market in new construction

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reflecting a tremendous downturn in the number of mortgage loans approved and the amount of loans approved in the last year. The drop from $7 billion for the first six months of 1978 to $4 billion for the first six months of 1980 is without parallel in history. It is a collapse such as we have not seen before.
Faced with this situation it is not surprising that the government is not prepared to contemplate the steps that are necessary. The measures suggested by the Conservative party would do nothing to provide greater competition, would do nothing to increase the size of the mortgage market and would do nothing to lower the rates. But, as I said before, they will do something to protect the privileges of a certain group of financial institutions-institutions which do nothing for the consumer.
There is a temptation for the government to return to home base and the kind of truths stated by the Parliamentary Secretary to the Minister of Finance (Mr. Evans). I call them truths, but I mean the sort of incantations of so-called free market economics which lead him to assume that if we return to that free market and let the banks do whatever they want about mortgages, rates would be lowered, the consumer would be protected, lenders would be protected, borrowers would be protected and we would live in the best of all possible worlds. The hon. member has accused us of being like Alice in Wonderland. The situation he is describing is not the situation which exists in the Canadian marketplace today. It is not what is happening in the mortgage field. There is tremendous uncertainty. The uncertainty is so great that I want to quote from an article in the November 6 edition of the Toronto Star headlined "Ottawa told to put legal lid on interest". I quote:
Canada is threatened by a "three-headed monster" of inflation, high interest rates and underutilization of industrial capacity.
Who said this? Was it a revolutionary cabal leader of some socialist organization talking about controlling our financial institutions? No. It was Ronald McKinlay of Toronto, president of the well-known socialist group, the 11,000 member society of Management Accountants of Canada. He went on to say:
inflation is destroying the ability of people in the middle-income bracket to save for retirement-
He talks about the fact that high interest rates are the main reason for personal bankruptcies and corporate failures. He calls for a re-enactment of a federal interest statute to force the rates down. I quote again:
For more than 100 years, banks in Canada were never allowed to charge more than 7 per cent interest.
If rates were kept down, investors would put their money into capital projects rather than high interest loans. We must encourage investment of Canadian money in Canadian industry and business.
1 would include under that heading the need to encourage the investment of Canadian money in the Canadian residential construction business, not only residential construction for middle-income Canadians on the commercial market, but for native Canadians, low-income Canadians, those Canadians who in a sense are outsiders, strangers in their own land.
Under our current system they are unable to be full participants in the economic life of the nation.
People talk about the increase in the value of houses, the fact that inflation in housing has gone up 130 per cent in the past ten years as the hon. member for Vancouver East (Mrs. Mitchell) mentioned today. There were many smiles around this chamber when that figure was mentioned. Many members in this chamber own houses. If you own a home, you are sitting pretty. If you do not own a house, you do not sit pretty. You are in a very difficult situation. In a sense, ownership of a home has become the criterion of full participation in Canadian society. There are far too many people excluded on that basis and even more will be excluded if we adopt the policy put forward by the hon. member for Edmonton West.
The solution is along the lines suggested by Mr. McKinlay. I have known Mr. McKinlay for a number of years. He is certainly not a supporter of the New Democratic Party. We must recognize that we are living in an extraordinary situation, a situation where we now have mortgage rates of 15'A per cent,
16I/2 per cent, 17'/2 per cent and 18 per cent. The Minister of Finance (Mr. MacEachen) comes into the House of Commons and tells us he does not know what mortgage interest rates are going to be. In October the government released figures which were supposed to be good for five years. They were not even good for one month. Inflation figures which were supposed to cover the next five years, supposedly predictions of what the rates will be for the next five years, are of no use.
Governor Bouey has told us time and time again that the rate of long-term interest rates is affected by what people's expectations of what inflation is going to be. A month after those figures were published came an indication from Statistics Canada that the current rate of inflation is not the 9.7 per cent predicted a month ago, but 10.9 per cent. All the figures contained in the medium-term economic predictions are meaningless and, in fact, misleading because they fail to indicate what is going on in the economy and how serious the situation is.
If we lived in a world of low interest rates, full employment and an economy going at full capacity, in short, if we were back in a world like the fifties and early sixties before we hit this period of tremendous uncertainty, reduced productivity, higher inflation and higher unemployment, I could understand the optimism of the Parliamentary Secretary to the Minister of Finance (Mr. Evans). I could understand him saying, "Take it easy. There is no need for us to disturb the eternal verities of marketplace economics. There is no need to get excited. There is no need to try to respond to what is going on. We simply have to let the banks and financial institutions compete. They will come up with the lowest mortgage interest rates possible. They will allow all those Canadians working and earning money to be able to provide for themselves. There is no need for any interference."
Talk about Alice in Wonderland. That is the wonderland of wonderlands because it is not the world in which we live. We live in a world where working people are on a treadmill and
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are continually falling behind. People are losing their homes because their mortgage costs have gone up 60 per cent in five years. The average Canadian can no longer afford to buy a home because interest rates are so high. The government has abdicated any sense of responsibility for what is going on in the economy.
Yesterday the Minister of Finance told us we cannot say there is a relationship between the budget and unemployment-that to do so was to presume a cause and effect which might not be there. That is a statement I would have expected from those in this House who seriously believe there is not very much governments can do. However, it came from a minister whose career has recognized the fact that we live in an activist world where governments have to play an activist role. For him suddenly to announce to the House there is nothing he can do about the situation creates tremendous uncertainty.
He said that if we have any crystal balls, would we please send them over. Well, the Liberal party has had a monopoly on crystal balls for many years. The fact is, we are not living in the secure, quiet, peaceful terrain occupied by members opposite. We are living in a hurly-burly world. The Toronto-Dominion Bank is paying tax at the rate of 0.7 per cent for the first nine months of 1980. Yet it is seriously argued that we should leave the whole setting of the interest rate pattern to the marketplace, that the government should not be directly involved in any way, and that we should leave entirely to the vagaries of the market what happens to the fate of working people.
It is a return to the world of the bailiff and the court. People are evicted because they cannot pay their interest rates and cannot pay their rent. It is an absurdity in the 1980s that we should be returning to the morality, economics and ethics that were discredited in the 1920s and should not have been allowed to rear their ugly heads again.
There has been a lot of talk about relevance. What could be more relevant when dealing with the Bank Act, and an amendment by the hon. member for Edmonton West which would give a particularly privileged position to our trust institutions, than to talk about what is happening to housing, mortgage rates and working people? That is what we have attempted to do in this debate this afternoon. 1 do not intend to make any apologies for it.


Mr. Ray Skelly (Comox-Powel! River):: Mr. Speaker, in the ten minutes remaining before four o'clock I am pleased to have an opportunity to discuss the amendments before us. It might be significant to pick up the discussion where my colleague left off. Our concern is for relevance. Let us make no mistake, the debate this afternoon is extremely relevant. Not only is our approach to this clause and the proposed amendment relevant, but it extends beyond that. It extends to the philosophy we would like to develop in the legislation and, beyond the legislation, in the government itself. It is no accident that both the Liberal party and the Conservative party have been silent today. The proposal by the hon. member for Edmonton West (Mr. Lambert) has the effect of turning the dials on a very technical clause which he thought was relevant to the Bank
Bank Act
Act when really it did not concern people in the way in which he thought they should be concerned. This demonstrates a tremendous lack of sensitivity. The hon. member was not able to look beyond his proposal, at the effect it would have on the act and the underlying statements which exist within it.
The proposal basically suggests that the banks should get out of the mortgage business. But then where would the money come from? Nobody has an answer. We need more money and more housing but at cheaper rates. There are a variety of problems. Both parties were silent on this topic this afternoon. When I asked some hon. members on the government side involved with housing programs what they thought the hon. member for Edmonton West was trying to achieve in his proposal, they said that they did not know. When I asked these same members if they would speak on the subject today, they said that they did not understand it. One hon. member, when I asked him what he thought the government was attempting to achieve with the Bank Act, said he did not know, that the only thing he knew about the Bank Act was that it weighed five pounds.
Such comments by members opposite would seem to confirm a general lack of knowledge on their part. We would like to know how this legislation will affect people. The banks are doing very well, and when we turn knobs or pull levers in this legislation, the important thing is the effect on people. I do not wish to bore the House with more statistics, but housing in Vancouver is in very short supply, as indicated by the hon. member for Vancouver East (Mrs. Mitchell).
There is an interesting article in today's Globe and Mail which describes a young family with children living in a skid row hotel because no other housing is available. They are forced to live there because of the policies of the government. Neither this government nor the previous administration have addressed housing problems squarely, but at least it should be recognized that we are facing a crisis and that if this crisis is left to fester, it will become a catastrophe.
Obscure as this clause may seem to some hon. members, the reason I have taken such an interest in it and why I was hurling the odd intemperate remark across the floor, for which I now apologize, is because there are people in my riding who are sleeping in cars. I am describing what is happening in the community of Powell River, but it is also true of other communities such as Courtenay and Campbell River. Prices on houses are just too expensive for many people in my riding. They simply do not earn enough income to qualify for a mortgage.
Some years ago the mill in Powell River was automated and as a result large numbers of people were laid off. Because this is an isolated community it was very difficult for people who were moving to sell their homes. With the surplus of unsold homes, housing development was at a standstill. Suddenly there was a major plant expansion, but no consideration was given to where new employees would live, and when they arrived in Powell River there was no housing available. Some

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families were crammed into motels, some employees lodged their families in other communities and others took to sleeping in their cars or their campers. It is a crisis situation.
Unless the government gets moving, we face a virtual catastrophe. Where is this legislation taking us? If I may digress for a few moments, some parts of the proposal by the hon. member for Edmonton West are in fact relevant, particularly that we should curb the government's obvious commitment to high interest rates, a commitment which prohibits young families from obtaining mortgage funds. The government in a desperate attempt to raise money in the private housing sector has reverted to old programs such as MURBs.
Housing is very relevant to this legislation. It has been relevant today, and it will be relevant on Monday when we discuss interest rates and the subject of foreign control in banking. There is also the topic of small business. 1 would like to know where the Tories stand when we begin discussing the provisions in the act which will be detrimental to small business. During the evening I would like to discuss the effect of foreign control on our industrial strategy.
1 am personally interested in the discussion scheduled for Tuesday which will deal with what is happening in the shipyards in Canada. I am progressing down my list. I realize that there are only two minutes left, so with the indulgence of the Chair, 1 would point out that re-establishing the merchant fleet and developing it for the future would give Canadians a brighter outlook. 1 am appalled by the fact that CP ships are registered in other countries. In addition, I would like to discuss the relevance of this legislation to Arctic resource development. This is not an opposition day. This topic is clearly related to the legislation before us. If we do not pace Arctic development so that Canadians receive full benefits, we will lose that development to Japan, Pacific Rim countries and countries in Europe. Many hon. members will be interested in these topics and the effect of this legislation upon them.
1 have made appeals to the Minister of Transport (Mr. Pepin) on many occasions regarding the need for improved transportation and housing for the native people. Certainly the Bank Act is relevant in this area. The subjects which I have mentioned are very relevant to this legislation, and what we do here will have an effect on those subjects. I recognize that timing is a factor and that in some cases we must take what is available today and leave other things for tomorrow. I hope that some ot the issues not presently open for discussion can be addressed on a future opposition day.
May I call it four o'clock?


The Acting Speaker (Mr. Ethier):: The question is on motion No. 25 in the name of the hon. member for Edmonton West (Mr. Lambert). Is the House ready for the question?


Some hon. Members:: Question.


The Acting Speaker (Mr. Ethier):: All those in favour of the motion will please say yea.


Some hon. Members:: Yea!


The Acting Speaker (Mr. Ethier):: All those opposed will please say nay.


Some hon. Members:: Nay!


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


The Acting Speaker (Mr. Ethier):: Pursuant to Standing Order 75(11), the recorded division on the proposed motion stands deferred.
It being four o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions.


PRIVATE MEMBERS' MOTIONS
The Acting Speaker (Mr. Ethier):: Shall motion No. 8 in the name of the hon. member for Wellington-Dufferin-Simcoe (Mr. Beatty) stand by unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: Shall motion No. 1 I in
the name of the hon. member for Waterloo (Mr. McLean) stand by unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: Shall motion No. 12 in the name of the hon. member for Prince Albert (Mr. Hov-debo) stand by unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: Shall motion No. 14 in the name of the hon. member for Levis (Mr. Guay) stand by unanimous consent?


Some hon. Members:: Agreed.


PENITENTIARIES
Mr. Svend J. Robinson (Burnaby) moved:: That a special subcommittee of the Standing Committee on Justice and Legal Affairs be established to monitor the government's progress on the implementation of the recommendations of the 1977 parliamentary subcommittee on penitentiaries, and to conduct such further inquiries and to travel as may be required.
November 14, 1980

He said: Mr. Speaker, I rise today in support of the motion before the House, which is a very straightforward and simple request and one which is of fundamental significance in looking at the penitentiary system of this country today. The motion is, quite simply, that the Standing Committee on Justice and Legal Affairs of the House of Commons strike a special subcommittee with representations from all parties to ensure that the recommendations of the special subcommittee on penitentiaries which was established in May of 1976 have been implemented or are in the process of being implemented.
I moved a similar motion on November 5 of last year. In fact, the wording was identical. At that time, I am very pleased to note, the representative of the Liberal party who spoke on that motion was the justice critic for the Liberal party which was then in opposition, the Secretary of State for External Affairs (Mr. MacGuigan), who was also the distinguished chairman of the special subcommittee on penitentiaries.
The hon. member for Windscr-Walkerville rose to support the motion which 1 put forward that day in words identical to the ones I have put forward today. He indicated that he felt this was a very important motion which deserved the support of the House. Now that the Liberal party is on the other side of the House, in government and no longer in opposition, I am confident its members will still see fit to support this motion just as they supported the motion on November 5 of last year. The motion today is in identical terms calling on the Standing Committee on Justice and Legal Affairs to establish a subcommittee. Conditions have not changed such as to warrant the government's reversing its position on this important question.


Stanley Howard Knowles: Don't hold your breath.


Svend Johannes Robinson: Just as members of the Liberal party supported this motion on November 5 of 1979, I am confident they will support it today because I know that they share the feeling of the Secretary of State for External Affairs that these recommendations must be implemented-not in part, not by picking one and choosing another, but implemented in full. Conditions have not become any better since November 5 of last year, a little over a year ago. Indeed, if one examines the record carefully, it becomes clear that conditions in the Canadian penitentiary system have deteriorated substantially in the past year. One need only look at the series of incidents which have taken place in various regions of the country. In the Pacific region, for example, there was the incident at Kent Institution. 1 refer to the hostage-taking at Laval and the incident at Dorchester in which a prison guard, Mr. Bill Morrison, was tragically killed. Since the beginning of this year there have been over 13 suicides in the penitentiary system in Quebec alone. The record is a sorry one, and it has become worse since November 5 of 1979.
This being so, surely it is incumbent upon the government not to reverse its position and not to reverse the position the hon. member, who is now a minister in the Liberal cabinet, took at that time. It is even more imperative now that this House call upon the Standing Committee On Justice and
Penitentiaries
Legal Affairs to establish a special subcommittee to review the recommendations of the subcommittee on penitentiaries.
It is important just for a moment or two to look back to what motivated the House of Commons to establish that special subcommittee. In September of 1976 it was decided that the situation in the federal penitentiary system had deteriorated to the point at which there had to be a comprehensive study of the Canadian penitentiary system. There had been a couple of very serious incidents at Kingston and Laval and, of course, a major incident at the B.C. Penitentiary. This all-party committee studied the Canadian penitentiary system, travelled to other countries to examine their penitentiary systems, heard from witnesses throughout this country and finally came up with a report.
Hon. members should note that it was a unanimous report, although the subcommittee was made up of representatives of all three parties. The first recommendation surely goes to the heart of the reason we are here today proposing that there be some form of review. That subcommittee reported that a crisis existed then in the Canadian penitentiary system and that it could only be met by the immediate implementation of large-scale reforms. Recommendation No. 1 finally said, "It is imperative that the Solicitor General act immediately on this report as a matter of the utmost urgency." During the time the committee was holding its hearings and doing its work-and a very thorough and comprehensive job it did-the atmosphere in the Canadian penitentiary system improved markedly because those persons who worked in the system, who were prisoners in the system, who were involved at the judicial level or who were in any way affected knew, or at least hoped, that there was a possibility of real change there was a real crisis in the penitentiary system, and they had confidence that after establishing this special subcommittee the government would take its recommendations seriously.
Well, that was not to be. Unfortunately, the response of the government to the subcommittee report was, essentially, that it would take this recommendation and that recommendation and perhaps look at another and maybe accept it for long-term implementation. Those recommendations formed a package, Mr. Speaker. They formed a very important and coherent package, and it was never the intention of that subcommittee that the government should pick and choose. At least, if the government was determined to pick and choose, there were some essential recommendations of that subcommittee which the subcommittee insisted be implemented. Many of those key recommendations have been totally ignored by this government and, I regret to say, also by the Conservative government during its brief term of office. Those recommendations were ignored by both administrations. What we saw was a document tabled before the Standing Committee on Justice and Legal Affairs called the report on the implementation of the recommendations of the subcommittee. The Conservative party had been very critical of the reports which had been tabled and I had hoped that when hon. members of the Conservative party formed the government there would perhaps be some changes.

November 14, 1980
Penitentiaries
However, it became very clear that it was not the government which was calling the shots in this matter. Indeed, it was very likely the commissioner of corrections who was calling the shots because the report which was tabled by the Conservative party was identical to the report tabled by the Liberal party. Those were the criticisms which were made by the hon. member for Windsor-Walkerville, and those are some of the concerns he has expressed often as to the need for an ongoing review process in the Canadian penitentiary system. If a crisis existed in 1977, it is not an exaggeration to say that a crisis exists in the Canadian penitentiary system today. There are many examples to illustrate that, and I have pointed to some of them already.
I would like to spend a moment or two dealing with some of the recommendations of the subcommittee and then turn to a specific example of a very serious crisis within the Canadian penitentiary system, that is, the recent occurrences at Dorchester penitentiary in New Brunswick. As I have said, the Commissioner of Penitentiaries-and, through him, the government-has been very selective in his approach to the recommendations of the special subcommittee on the penitentiary system. I would like to give a few examples of how he and the government have been not only selective but misleading. They have misled the Canadian public and the Canadian Parliament by suggesting that certain recommendations have been implemented when in fact no such thing has happened. As recently as a year ago the then hon. member for New Westminster-Coquitlam pointed out that in fact only some 14 of the 65 recommendations of the special subcommittee on penitentiaries had been implemented. I would like to give just three or four examples of the deceit-and I use that word advisedly-that is contained in this progress report on implementation.
What are some of the recommendations which have been allegedly implemented but which in fact have not been implemented at ail? 1 start at the beginning with recommendation No. 1 which is about a crisis existing. There is a statement that it is imperative for the Solicitor General to act immediately on the report as a matter of the utmost urgency. This recommendation is stated to have been implemented. That is simply false. The government did not act immediately upon this report as a matter of the utmost urgency. They picked certain recommendations with which they could live and threw the rest out. So to suggest that that recommendation has been implemented or that a crisis no longer exists in the penitentiary system is misleading the Canadian public.
Recommendation No. 8 is another one which has been allegedly implemented. It calls for a sufficient number of training positions to be established to allow for the full and adequate training and continuing professional education of custodial personnel. We are told that it has been implemented, yet not a single additional position has been filled. So to suggest that that recommendation has been implemented is again misleading the Canadian public and members of Parliament.
Recommendation No. 17 is another one. It recommends that women should be employed on the same basis as men in the penitentiary service. We are told that that recommendation has been implemented. Well, I suggest that any member of the public or any member of the House should go into a penitentiary in this country to see whether in fact that recommendation has been implemented and whether indeed women are employed on the same basis as men in the penitentiary service. That recommendation has not been implemented and once again the people of Canada and the members of this Parliament have been misled.
I could go on and on throughout the report, but I will only give one more example because 1 think that in many ways what has happened is typical of the shallow response of this government to the importance of these recommendations. Let us consider recommendation No. 25, surely one of the important recommendations in the subcommittee's report. It is a straightforward one and it states that the penitentiary service should be open and accountable to the public. We are told that that recommendation has been implemented. There is a little footnote which explains how it has been implemented, how the secrecy within the penitentiary service has been swept away and how the service has been made open and accountable to the public. They give an example which I will read from the report. It is stated:
Approximately 45,000 visitors toured B.C. Penitentiary during the week of May 4. 1980.
The B.C. Penitentiary contained no prisoners on May 4, 1980, and if that is an example of how the penitentiary service of this country is accountable to the people, then once again we see clearly that members of the public and members of Parliament have been misled.
I suggest that these implementation reports are a serious shortcoming of this government and that the government has a responsibility to come before the subcommittee on penitentiaries of the Standing Committee on Justice and Legal Affairs to explain exactly why they have chosen to reject some of the most important recommendations which the subcommittee made unanimously.
I said I would turn to Dorchester. Recently, as members of this House have become aware, some very serious allegations have been made about incidents at Dorchester. There has been the tragic death of a prison guard, there has been a suicide, there have been allegations of widespread beatings and gasing at the institution, there has been an allegation, confirmed by the Department of the Solicitor General, of an incident in June of this year in which 137 shotgun rounds were fired into a gymnasium full of prisoners, and there have been allegations that the prisoners' personal property and private belongings have been systematically destroyed. I emphasize that these are serious allegations and it is not for me or for the Solicitor General to determine, without hearing both sides fully, whether or not there is truth to these allegations. They must be weighed by an independent judicial inquiry. For example, an allegation has been made that, following the hostage-taking at Dorchester and following the tragic death of Bill Morrison,
November 14, 1980

prisoners on that tier were forced to strip, to lie down on the floors of their cells and put their arms through the cell bars; their hands were handcuffed together and they were repeatedly gassed and beaten. That is a serious allegation, one which has been made by a number of prisoners who were on that tier and substantiated independently by many of the prisoners who have since been segregated. There have been allegations that prisoners were dragged naked by prison guards downstairs, one guard holding one leg, another guard holding the other leg and a third guard kicking the head of the prisoner. These are serious allegations. With the history of problems at Dorchester institution, with the history of escapes, deaths and allegations of violence, with a history of allegations of destruction of personal property, what more does it take to get the government to move, to get the government to say, "Yes, we want to clear the cloud. We want to remove the cloud that now hangs over that institution."
1 met with the guards' union, with the acting warden and with the prisoners there. 1 found that the guards' union is as concerned as anyone else about all of them being under this cloud now. The rule of law does not stop at the prison gate in this country. The rule of law must surely apply throughout this land. If there has been criminal wrongdoing, those persons who are responsible should be brought to task and disciplined or they should be brought before a court of law, while those who are innocent should not be made to suffer as a result of allegations that have been made against all of them. The Solicitor General assured the House on October 14 of this year that the in-house report of the inspector general would be made public when it was completed. We await that report with interest. But there must be more, there must be a full judicial inquiry into all the recent circumstances at the Dorchester institution.
1 see that my time is coming to an end and I would just like to reiterate that I hope the support which the Liberal party gave to this motion last year, worded in an identical fashion, will not change today, and 1 hope that if there is some suggestion it will change, whoever speaks on behalf of the Liberal party will tell the House and the Canadian people how conditions have improved from November of last year to November of this year in such a way as to warrant the rejection of this reasonable motion now. As 1 said before, a crisis existed in 1977 in the Canadian penitentiary system and a crisis exists today in that system. It is incumbent, therefore, that a full and careful examination of the recommendations by the subcommittee on penitentiaries of the Standing Committee on Justice and Legal Affairs be carried out and, in addition, that there be a full judicial inquiry into the recent tragic events at Dorchester Penitentiary.


Mr. David Weatherhead (Scarborough West):: Mr. Speaker, it is a pleasure for me to speak today on the motion of the hon. member for Burnaby (Mr. Robinson) because I believe that the penitentiary system must respond to two fundamental concerns. The first concern is reform of the behaviour of the individual inmate which has led him to prison. The second concern is the security of the individual, both inside and
Penitentiaries
outside the prison walls. If, following the process of law, society is to deprive a person of his liberty, there must be a solid guarantee that while in prison he will not be subject to the jungle justice of fellow inmates or to arbitrary justice meted out by his keepers.
1 consider it astounding that prisons in a modern civilization cannot fully protect their wards from violence. Just as astounding, however, is the fact that prison guards and administrators are subjected to similar forms of violence. It is a tragedy that violence has almost become an accepted norm in any occupation, and it is doubly tragic that the most exposed persons in this regard are those charged with the responsibility of protecting society.
Acceptance of certain aspects of the MacGuigan report will go a long way in bringing stability to Canada's penitentiary system, and in many cases this has been done. The recommendations of the MacGuigan report came as a result of the considerable work done by that committee. It probed the conditions of 24 institutions across Canada and outside of Canada. It interviewed or received the submissions of 2,000 persons interested in prison life. After all this work, 40 of the 65 recommendations are now fully operational in the prison system of Canada and 16 more will be implemented over a longer period of time. Four detailed reports have been issued by solicitors general since that time describing the status of these recommendations up to the present moment.
In many ways the MacGuigan report represents a giant step in the evolution of correctional institutions in Canada. Paragraphs 29 to 81 of the report outline the history of prisons in Canada and the conditions which led to the system of today. I feel it is important to understand this history in order to appreciate the progress we have made to this particular point. Formerly it was felt sufficient to inflict simple punishment on the offender. Guards were there to ensure that prisoners did not enjoy the simplest of freedoms. Both groups were brutalized by the process and it is easy to see that violence was the simplest way to take out the frustration that such a system bred.
The MacGuigan report followed numerous examples of violence in penitentiaries in Canada. It seemed that there was a geometric increase in the number of these incidents in the early 1970s. Something had to be done. Penitentiary reform in a contemporary society is a large and onerous task. It must satisfy conflicting demands. Some seek more stringent control of inmates, seeing them as incorrigible societal misfits. Others would shift the blame for criminal behaviour to society itself, claiming that upbringing, economic status and education are responsible for crime. The reality lies very much in between, and the subcommittee recognized this when it indicated:
Even with today's advanced knowledge of human behaviour and human need, we still rely on harsh punishment, while knowing it is more dangerous and costly than humane, constructive prisons and alternative sentencing . . . Correctional programs are futile and wasteful if normalcy is not basic to them ... If the inmate is not trained and experienced in that free world to which he or she must
4728

November 14, 1980
Penitentiaries
inevitably return, it is naive to expect that person to come out of isolation and live well and productively in that world.
However, the committee also recognized that discipline was the tool in achieving normalcy. In the past, harsh punishment may have been seen as an end in itself, but our knowledge of human nature has progressed rapidly in the twentieth century. Attaining that normalcy requires a program of retraining and socialization that will make the former inmate more suitable to himself and society.
It has become a truism that many recidivists end up in prison again because there is nowhere else to go. Once out, there seems to be very little for the individual to do. Prison almost becomes a second family to the inmate. Like "Big Joe", a character in John Steinbeck's ironic novel "Tortilla Flat", he sees jail as a place where the food is reasonable and regular. It is a place where he can get shelter from rain and the elements, and, most of all, he knows the people there.
To counteract this, occupational and academic training must be provided to the inmate. Recommendation 43 of that report indicates that academic and trades training must be furnished in correctional institutions. On May 11 of this year, two inmates of Matsqui prison received bachelor of arts degrees. Apprenticeship programs exist in co-operation with local industries across Canada, producing worth-while goods ranging from furniture to printing. This is one step in the reform of prisoners. Other steps come from socialization skills learned in prison. One such step is the allowance of common dining in a majority of institutions across Canada. More significantly, the subcommittee suggested that contact visiting with family was an important factor in determining the success or failure of a newly released inmate. From this recommendation comes the result that all institutions, with the exception of Laval, permit contact visiting as of today and it will be instituted at Laval shortly.
Family visiting programs for visits of extended periods of time are planned for one of the major institutions in Canada before the end of 1981. So as to reduce the occurrences of violence, new procedures for dealing with discipline problems have been introduced. Specifically, the use of gas as a measure of restraint will be limited to only the most extreme cases. To arbitrate grievances in a better manner, an independent chairperson is in place in maximum security institutions and is being put in place in medium security institutions.


An hon. Member:: How about minimum?


David Bennington Weatherhead: Until 1978, there was an element of uncertainty in the entire parole system. This has been improved and regulations allow the inmate access to information on his case when it is before the parole board for review. Steps toward smaller living units and team concept facilities are being introduced in areas across Canada. The example of Kent Institution in British Columbia is a case in point. These are the steps to reform 1 spoke about earlier. Beginning with the Archambault report in 1938 and ending with the Mac-Guigan report in 1977, all reports on penitentiary reform came to the same conclusions. In order to reach the goal of reform,
the inmate must first acknowledge his responsibility in the crime which brought him to prison in the first place. Further, he must recognize that through his co-operation he can receive the necessary training to make himself more useful to the community.
Reform of the inmate, however, can be best accomplished in an environment which is conducive to such an aim. The inmate must have the assurance that he is not in an institution solely because he is being punished. He is not there to fill time, picking up the latest tips on how to break the law; this will only result in this being returned to prison. A person with such a low regard for his own liberty must be made to feel productive enough to fear the deprivation of liberty. I think the steps taken by the correctional service have gone a long way in this regard. Part of a conducive environment to reform is the assurance to inmates that there will be a standard, simple and straightforward set of rules governing the discipline and running of institutions. Progress toward this aim was begun in April of 1979, and such a code will make clear the responsibility of inmate and correctional officer alike.
Another move toward greater security can be found in the upgrading of educational and relevant outside experience for prospective correctional officers. Candidates for this occupation must now have the equivalent of a secondary school graduate's education. Further, to facilitate the officers' communications skills, they must also have had three years outside employment in a job which involved person-to-person skills.
The probationary period of a new corrections officer is now 24 months, giving the correctional service a better opportunity to assess the suitability of candidates, and five-day refresher courses for correctional officers are now required. In order to deal with problems, it is the policy of the correctional service that all non-officer personnel are trained to play key roles in emergency situations. When such problems arise, and are too great for the institution's personnel to handle, regional teams are in place to give assistance, augmenting the institution's emergency response force. Local police are advised of any situation which may require their assistance.
Perhaps the most important recommendation to be acted on with regard to prison security is the rule in place which provides that no deals will be made with prisoners while hostages are being held. This must remain an essential element of any system of penitentiary discipline. It must be made clear that human beings cannot be made tools in a bargaining process. Compromises can be reached without taking innocent people as prisoners.
The government's action in these reforms will ensure that greater security is brought to penal institutions. The points 1 made earlier concern the reform of the inmate. I think that these two aspects are firmly linked. Greater security within the prison system will lead to greater possibilities for the reform of prisoners. In a situation where all those involved understand their own responsibilities to themselves and others the co-oper-
November 14, 1980

ation necessary to achieve a future for inmates will prevail. In principle No. 4 the subcommittee states:
Only the wrongdoer can bring about reform in himself since he is responsible for his own behaviour; but the penitentiary system must be structured to give positive support to his efforts at reform by providing certain essential conditions: discipline, justice, work, academic and vocational training, and socialization.
I think 1 have demonstrated a few areas where the government's implementation of certain aspects of the report have met the principle enunciated above. The report also makes a distinction between punishment for a positive purpose and vengeance. Imprisonment in an environment which encourages reform from within the prisoner while at the same time imposing just and reasonable sanctions on the offender is punishment in its most positive form. Vengeance, on the other hand, seeks only to strike back at the offender with no view to the long-term consequences. While serving as a deterrent to that person contemplating a crime, simple vengeance would do nothing to reform the already-convicted offender.
In fact, merely incarcerating an offender with no concern for his future harms society itself in the long run. Society may have to face the prospect of retrying and reimprisoning the offender at a cost to the public purse and a heavier cost to society itself, one much harder to measure.
There are those who would argue that the recommendations have not been implemented quickly enough. On the contrary, 1 would say that significant action on 56 of the subcommittee's recommendations represents a very fast response. Many of the 56 items formed an important part of the subcommittee's report. Further, the action to date indicates the importance the government attaches to penal reform. One of the very positive results of the committee's report was the amount of study done by the government and other organizations.
I see that studies regarding recommendation No. 2 have been going on and that the government is considering alternatives to incarceration at this time. This is especially important to young offenders, first time offenders and those convicted of less serious crimes. The Solicitor General (Mr. Kaplan) in speaking to the International Conference on Alternatives to Imprisonment on June 8 last stated the current status of alternatives to incarceration. At their own initiative, and with the encouragement of the federal government, some provinces have initiated programs to establish options different from the traditional model. In Saskatchewan and New Brunswick fines are being considered as first options where appropriate. Ontario and British Columbia have examined and implemented programs which supplant imprisonment by community service orders. Through the federal law fund the federal Department of Justice is conducting research into the field of alternatives to incarceration. The minister pointed out that obstacles to the use of these alternatives may be found in the criminal law. Hopefully, when the Department of Justice completes its research into a criminal amendments omnibus bill these obstacles will be removed.
As the Solicitor General pointed out in his speech last June 8, alternatives must be considered, because in some situations alternative punishment may be more economical to society. No
Penitentiaries
one would suggest that dangerous criminals should be set free to save a few dollars. However, there are types of crime where it would be more appropriate to impose a sentence other than imprisonment. Last year the average cost of keeping a male in maximum security for the year was about $29,000. Surely, there are crimes which do not justify that kind of expense. But alternatives must not be used just to save money. It would be dereliction of duty to use that as a primary reason.
The Solicitor General pointed out in the same speech that alternatives which keep the offender in the community and functioning as a family and community member would be more humane and would hold more promise for the individual and the community. Alternatives other than simple fines exist. As 1 have mentioned, some provinces have instituted community service programs. These are useful for a number of reasons. First, community service programs provide manpower in areas where it is sometimes not available. Further, it brings home to the offender the impact of his behaviour on the community. This is an excellent way of learning to rid oneself of the behaviour which leads to law-breaking.
I discussed probation earlier in my remarks but I think it is worth discussing it in the context of its value as an alternative to traditional sentencing. Use of probation is widespread use in Canada, though certain technical difficulties in the law hamper the mobility of the offender. These difficulties can be overcome by a federal initiative.
The Solicitor General pointed out some rather unique problems with regard to intermittent sentencing. These are important steps in penal reform. They are just as important as penitentiaries reform. Penitentiaries are not dungeons where law-breakers are sent away to be closeted from the outside world, nor are they rest homes designed for criminals to while away the years. Neither situation is true. If one or the other system were to prevail our criminal problem would be insoluble.
Mr. Speaker, by enunciating 13 principles the MacGuigan report sought to address the crisis in Canadian penitentiaries. The actions of the government have been excellent to this point. The core of the program has been implemented. Justice cannot evolve in a vacuum. The very important work of the MacGuigan committee set the stage for reform of penitentiaries in Canada. Changing circumstances will dictate that some of the 65 recommendations will be altered or replaced entirely. The situation in Canadian prisons must be constantly monitored to take account of current needs. However, just as important will be the work of people studying alternatives to the expensive and sometimes inappropriate system which prevails now.


Svend Johannes Robinson: On a point of order, Mr. Speaker. Will the hon. member answer a brief question?


The Acting Speaker (Mr. Ethier):: The time would permit if the hon. member agrees.


Svend Johannes Robinson: Thank you, Mr. Speaker. I wonder if the hon. member could clarify something for me. A

November 14, 1980
Penitentiaries
year ago in this House the Liberal party supported a motion which was framed in the identical words of my motion today. Will the hon. member clarify whether, indeed, the Liberal party is still supporting that motion or whether they have reversed their position?


David Bennington Weatherhead: I was speaking on my own behalf in this particular debate and I have no instructions from the government regarding same.


Mr. Bruce Hallidav (Oxford):: Mr. Speaker, I want to commend the hon. member for Burnaby (Mr. Robinson) for introducing this motion today which reads as follows:
That a special subcommittee of the Standing Committee on Justice and Legal Affairs be established to monitor the government's progress on the implementation of the recommendations of the 1977 parliamentary subcommittee on penitentiaries, and to conduct such further inquiries and to travel as may be required.
Mr. Speaker, one could speak at length on this subject. My colleague from Bow River (Mr. Taylor) wants to say a few words on the subject before us as his constituency harbours one of the federal prisons. 1 have listened with interest to the hon. member for Burnaby who gave a very fine expose of why we should support this resolution. I, too, want to indicate my support for this motion. I am disappointed that the member for Scarborough West (Mr. Weatherhead), who gave a very good overview of the whole subject of our criminal justice system, really did not, in my opinion, direct his attention to the motion itself. I do not think he made any reference at all to whether or not the special committee should be reactivated. He refused to indicate whether or not he is for or against the motion when he was being questioned by the member for Burnaby.
I support what the member for Burnaby had to say. There was only one disappointment for me in the comments of the member for Burnaby. He began by giving an interesting history of the development of this special subcommittee known as the MacGuigan committee. But, unfortunately, he missed the very first point in the establishment of that committee. Maybe I should excuse him for that, since he was not a member of the House at that time.
This subcommittee developed as a result of the initiative of members of the Progressive Conservative Party who in 197677 decided in caucus to have a committee to study the problem. We were aware of the problem although the government of the day apparently was not. We established a committee, chose the personnel, began to plan an itinerary and then the government got wind of things. Apparently it thought it would be better to have a parliamentary committee and so began negotiations with all parties in the House. The result was a committee which involved the four parties in the House at that time, with a total of 13 members. The government had seven members on the committee, five of whom are still members of this House. Two of them are now ministers of the Crown. The Secretary of State for External Affairs (Mr. MacGuigan) was chairman of the subcommittee and the President of the Privy Council (Mr. Pinard) was vice-chairman. Two of the government members are now parliamentary secretaries and one just recently retired from the position of parliamentary secretary. That will give you an idea of the impact of the personnel from the government side on that committee.
As the hon. member for Burnaby (Mr. Robinson) pointed out, just a year ago all members were in favour of implementing recommendation No. 65 of the subcommittee report which suggested an ongoing reference of the subject matter to a committee of Parliament. Now, for some reason, these four fairly senior people on the government side seem to be impotent when it comes to doing something about this.
I cannot believe that the Solicitor General (Mr. Kaplan), who has taken the responsibility of denying us the opportunity to have the subcommittee reactivated, is personally against it. I have questioned him in committee and I am convinced, having seen how things go there and how things go in Correctional Services Canada, that he has been conned by his officials. I think they have advised him unwisely that in no way should this committee be reactivated. There is a lot of evidence to support that. From the day committee hearings began, we saw the efforts that were made by officials of Correctional Services Canada to block certain moves that the committee thought would be progressive.
On October 14, I raised a couple of questions with the Solicitor General in the House. The second question dealt specifically with the implementation of recommendation No. 65 in the report. I should read that recommendation into the record to show precisely what we mean. It was the last recommendation of the subcommittee and it reads as follows:
The Standing Committee on Justice and Legal Affairs should have a permanent reference during the rest of the Thirtieth Parliament and for the Thirty-first Parliament to enable it to review the implementation of this report in the context of the criminal justice system.
That is from the progress report dated May, 1980, issued by the office of the Solicitor General. That recommendation was subscribed to unanimously by the subcommittee. I happened to have some reservations about the propriety of the Thirtieth Parliament trying to commit the next Parliament to something of that nature but nonetheless I was in total agreement with the principle and philosophy of the recommendation. Because of that, on October 14, 1980, as reported at page 3626 of Hansard, I put a question to the Solicitor General as a result of the hostage-taking incident at Dorchester. My question was as follows:
Madam Speaker, my supplementary question is again directed to the Solicitor General. If the minister had read the report he would realize that the matter of accountability and responsibility was dealt with by the committee. Inasmuch as the minister has essentially refused to set up a public inquiry which would look into the affair at Dorchester, and at the same time has refused to implement the subcommittee report in toto, as recommended by that committee, will he now implement the intent of recommendation No. 65 of that report by making a special reference of this subject matter to the Standing Committee on Justice and Legal Affairs?
The reply was as follows:
As to whether or not I have read the report. Madam Speaker, I would remind the hon. member that I sat on the committee, I helped gather evidence and I worked on the preparation of that report.
November 14, 1980

1 want to interrupt the quotation with a comment, Mr. Speaker. The first page of the report lists the 13 members of the subcommittee, but the name of the Solicitor General does not appear there. On the next page, under "Acknowledgements" which run to roughly two pages, there is a list of 11 members of the House of Commons. His name is included in the list. The paragraph preceding the list reads as follows:
Other members of the House of Commons who served on the subcommittee from time to time but who did not participate in its deliberations and report are as follows:
I am sure it was unintentional, but the Solicitor General misled the House on October 14 when he suggested he had made some input into the report. His reply continued:
-I helped gather evidence and I worked on the preparation of that report.
The report shows that he did not. The reply goes on:
On the question of the reference, there is a tremendous volume of work for the justice committee-
We do not argue that, Mr. Speaker.
-and I would be happy to deal with questions like that when my estimates, which are now before the committee, are considered. Frankly, it would be for the committee to consider how much of their estimates time they would want to spend on that. There is other work for that committee which I think should have a higher priority.
The Solicitor General was mixed up. He stated that he had some sympathy for our concerns. He acknowledged the amount of work facing the justice committee but suggested that for that reason he should not refer this matter to another special committee. Mr. Speaker, that is why he should refer it, if for no other reason. He is acknowledging that there is no opportunity, when the estimates are before the standing committee, to ask a significant number of questions because of the shortage of time and the volume of work. At the same time, however, he refuses to refer this subject to a committee of the House of Commons.
It is incomprehensible to me that the minister should act in this way, Mr. Speaker. He has given good reason why the matter should be referred; the justice committee is overloaded with work and we do not have time to ask questions there yet at the same time the minister denies us the privilege of speaking on this very important issue.
I just want to speak for about two more minutes, Mr. Speaker, and touch on something in the report that I think is crucial. There are two recommendations which 1 do not think the hon. member for Burnaby mentioned. Recommendation No. 24 deals with setting up a five-man board to decide policy and recommend policy to the Solicitor General. Another recommendation deals with a comparable organization at the institutional level. If there is one thing that our present system needs, Mr. Speaker, it is some real input from the public in Canada and not the kind of phony input we are getting at present.
The prison system in Canada is the only public institution where there is no public input. Hospitals have hospital boards; schools have public boards, universities have boards and even police commissions are public bodies that interverne between the minister and the local police authorities.
Penitentiaries
I shall take time on another occasion, Mr. Speaker, to explain some of the ludicrous comments that have come from the Solicitor General, comments of which he should be ashamed. I know they are provided to him by Correctional Services Canada. Ludicrous arguments have been advanced as to why those two recommendations should not be implemented. The way they have done it is unbelieveable. In fact, by way of the grapevine, and the passage of time, I have found out why recommendation No. 62, which requested a feasibility study on the advisability of a board at one institution on an experimental basis was not implemented, as the hon. member for Scarborough West has intimated. That was a recommendation that we study the feasibility of it.
If the hon. member for Scarborough West is interested, he should ask the Solicitor General and/or the correctional services officials for the documentation by which they came to the decision not to accept that recommendation in terms of implementing it as an experimental model. One would be appalled, coming from the city of Toronto, as my hon. friend does, and knowing something about how the system of education works in Ontario, at the arguments advanced to dispose of that particular recommendation. It was just unbelievable.
Rather than get "het up" about this any longer, and wanting to save some time for my friend from Bow River who is concerned about this subject, I will conclude by expressing my full support for the hon. member for Burnaby. He deserves credit for again bringing this matter to the attention of the House. I hope that members on the government side, five of whom were in support of recommendation 65, and not one of whom spoke today, will also support this. When 1 came in at two o'clock this afternoon, the Solicitor General was in his seal. He stayed here until four o'clock. The moment this item was called, he disappeared. The hon. member for Rosemont (Mr. Lachance) was also in the chamber. He was one of the strongest proponents of this report. He has since disappeared from the chamber as well. Where are the other three members from the government side who felt so strongly about this report? When it comes to doing something about it, they are not here to present their case, whatever it may be. Maybe it has changed. In conclusion, I hope hon. members who are still here will see the wisdom of allowing this motion to pass this afternoon.


Mr. Gordon Taylor (Bow River):: Mr. Speaker, when a government spends several thousands of dollars, and members from all sides spend a lot of time and effort studying a problem, it is not satisfactory to simply put that book of recommendations on the shelf. This is another frustration for people across this country because it is being done far too often. Consequently, I fully support the motion of the hon. member for Burnaby (Mr. Robinson). 1 commend him on his excellent address, as well as the hon. member for Oxford (Mr. Halliday).
A number of items concern me because there is a medium penitentiary in the Drumheller area. I will not have enough

November 14, 1980
Penitentiaries
time to deal with all of the items, but I do want to deal with one or two. The hon. member for Oxford mentioned that if we need anything, we need input. That is certainly so.
At the recent hostage-taking incident in the Drumheller Penitentiary, it is hard to believe that not one of the chaplains was called during that trying time. They had no input, those people who have an intimate working relationship with the prisoners. That is one example of where there is no input in our penitentiaries.
Another item that bothers me greatly is that some of the guards who were involved in that hostage-taking incident still suffer from nervous, physical and mental stress. It seems that once a hostage incident is over, we forget about the effect it has on those who were involved.
Another item which calls for very careful consideration has to do with the conjugal visits recommended by the minister. This is opposed by the Public Service Alliance. They say it would threaten prison security and could result in escapes, violence, hostage takings, inmate unrest and wife beatings, more commonly known as domestic disputes.
1 recently met the mayor of the city of Drumheller and the ministerial association of that area. One of the first things we talked about was conjugal visits. Only one of the many ministers supported these, and he supported them only for younger prisoners. They are being confined to maximum security prisoners. It creates a real conflict among the guards and prisoners when we provide this for only maximum security inmates, murderers and so on, but not for those who are there for crimes not nearly as serious. This should be looked into before it causes another wave of activity in the criminal field in this country.
Another item concerns medium security. A medium security prison was built and then "lifers" and others who should be in maximum security were sent to that prison. That is the reason for the hostage-taking incident. There is a mix-up in all of this. The ministers were concerned about this as well. If there were better classification and segregation, there would be greater response to rehabilitation.
I am very anxious for this motion to pass. There is serious need to look into the recommendations that were made. 1 do not stop talking because there are not many more things to say, but because I am so anxious for this motion to pass today.
1 hope hon. members in this House will not undermine justice in this country by defeating this motion.


Mr. Bernard Loiselle (Vercheres):: Mr. Speaker, 1 hear my Progressive Conservative colleagues shout "shame" because, of
course, if we speak against this motion we give the impression that we support the idea of prisons which would be like fortresses. If we are for such a motion, of course, there is the danger that some would say-


Mr. Kilgour:: Mr. Speaker, could the hon. member for Vercheres tell us in advance whether he will waste the time of hon. members during the three minutes which are left-


Bernard Pierre Loiselle: Mr. Speaker, this same motion was debated in the House last November, but those who spoke against it were the hon. members for Edmonton-Strathcona (Mr. Kilgour) and Bruce-Grey (Mr. Gurbin). After these names, 1 see the initials PC, which mean Progressive Conservative in our country, For his part, Mr. MacGuigan was in favour of this motion.
Now, the question is very simple. Do we really need a subcommittee of the Standing Committee on Justice and Legal Affairs to review each one of these recommendations? From a very practical point of view, 1 say that we do not-


An hon. Member:: We do.


Bernard Pierre Loiselle: We do not agree, and this is precisely why there is a House of Commons. I submit that, when it considers the estimates of the Department of the Solicitor General, this committee has every opportunity to ask all its questions on this matter. In practice, this committee will review the Juvenile Delinquents Act in its entirety as early as January.
At the present time, when the House is very busy, when all the committees have much to do, when a special committee is considering the patriation resolution, when we have so many matters to discuss, I wonder how we could justify that a group of members be once again called on to travel throughout the country. I do not believe that we need such a forum or such an organization to go further than the recommendations contained in the MacGuigan report.
1 believe that there is a lot to do in this area-


The Acting Speaker (Mr. Ethier):: Monday, November 17, 1980