1980-10-31

ROUTINE PROCEEDINGS


Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, a company called Northwest Telephone operates as a subsidiary of CN Telecommunications. It is supplying telephone service for a large area of northeastern British Columbia adjacent to the Alaska highway. The company is charging individual Canadians a $680 fee for a simple hook-up and is not in a position even to provide such service. 1 therefore move, seconded by the hon. member for Fraser Valley East (Mr. Patterson):
That for reasons of total neglect and failure to provide even the most basic service dictated by the licence under which Northwest Telephone operates in northeastern British Columbia, the company be given six months from this day to implement a service which not only fulfils the requirement of the licence but is consistent with the company's widely advertised policy whereby their service to the public is not only a business but a responsibility; and that failing the company's compliance with this requirement, the licence will be revoked.


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. Girve Fretz (Erie):: Madam Speaker, given the fact that the Prime Minister (Mr. Trudeau) speculated the other evening in Regina that if Canada broke up under the strain of his budget and constitutional proposals, perhaps Canada deserved to die, 1 move, seconded by the hon. member for St. Catharines (Mr. Reid):
That this House urge the Prime Minister to put the shoe on the other foot and pass into that great MURB in the sky himself, thereby performing his greatest service ever to Canada.


Some hon. Members:: Hear, hear!


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.


IMMIGRATION
Mr. Walter McLean (Waterloo):: Madam Speaker, in light of many reports of embarrassing delays and inefficiencies in the Caribbean immigration office in Port-of-Spain, Trinidad, resulting in costly resubmissions of medical documents, since these complaints have increased dramatically since the government unilaterally introduced its foreign service consolidation program, and in light of the particular case of Mr. Seergobin of Waterloo who has waited one year and six months to have his wife join him from Guyana despite a guarantee by the Minister of Employment and Immigration (Mr. Axworthy) that she would join him by September, 1980, at the latest, I move, seconded by the hon. member for Fraser Valley West (Mr. Wenman):
That the Secretary of State for External Affairs report to this House regarding the inexcusable failure to deliver service in the Caribbean office.


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.


EFFECT OF INCREASED TAXES-MOTION UNDER S.O. 43
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, 1 rise to propose a motion of urgent importance under the provisions of Standing Order 43. On this Hallowe'en day and in view of this government's trick or treat budget which brings many tricks and no treats to all the people of Canada, 1 move, seconded by the hon. member for Vancouver Centre (Miss Carney):
That the government be directed to stop deceiving Canadians with charlatan trickery and to admit that the proposed natural gas tax is not only a tax on natural gas exports but is also a direct and discriminatory tax on every natural gas consumer in the four western provinces and Ontario; and to admit also that

October 31, 1980
this tax will increase the domestic heating costs of western Canadians by at least 16 per cent effective tomorrow, with the increase doubling to 33 per cent or more than $150 per home by next winter; and finally, to admit to the government's shame that there will be no program of compensation to the thousands of low-income Canadians who will be faced with these sharply increased energy costs.


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.


CANADA COUNCIL
Mr. Nelson A. Riis (Kamloops-Shuswap):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The recently released report of the Canada Council emphasises that in constant dollar terms the resources available to the arts through the Canada Council in 1979-80 were about the same as they were in 1975. Because of inflation and increasing operating costs, even our best publishing houses, theatres, orchestras and other basic arts institutions are in danger. I therefore move, seconded by the hon. member for Beaches (Mr. Young):
[DOT] (mo)
That during these times of culture building in Canada, this House instructs the Secretary of State to ensure that adequate funding is received by those individuals and organizations who have achieved stature in the arts community, and especially by new companies, younger artists and those working on the frontiers of arts and communications.


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.


CONVERSION FROM OIL PROGRAM-EARLY AVAILABILITY OF APPLICATION FORMS-MOTION UNDER S.O. 43
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I rise under the provision of Standing Order 43 on a matter of particular urgency for those Canadian home owners who anticipate converting from oil to gas or electricity. In light of the fact that the office of the Minister of Energy, Mines and Resources (Mr. Lalonde) has reported that the application forms for the new grant program will not be available until March or April 1981, I move, seconded by the hon. member for Prince Edward-Hastings (Mr. Ellis):
That the minister make every effort to guarantee that the application forms for the new program will be available within the near future in order that persons who wish to take advantage of the program can receive payment within a reasonable period of time.


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.


ENVIRONMENTAL AFFAIRS
Mr. Jim Fulton (Skeena):: Madam Speaker, I have taken the time to speak to a wide number of members of this House and 1 am sure that if they listen carefully they will support this motion.
Under the provisions of Standing Order 43 I rise on a matter of urgent and pressing necessity. The weather station Papa composed of the vessels Vancouver and Quadra lies 1,500 kilometres northwest of Vancouver Island. In view of the important scientific, oceanographic and meteorological work performed by these vessels on behalf of all Canadians, and also in view of the vital search and rescue role played by the Papa weather ships, I move, seconded by the hon. member for Mission-Port Moody (Mr. Rose):
That this House convey its unanimous support to the captains and crews on this special anniversary occasion.


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


Some hon. Members:: Agreed.


Madam Speaker:: It is moved by Mr. Fulton and seconded by Mr. Rose:
That this House convey its unanimous support to the captains and crews on this special anniversary occasion, the captains and crews being those of the weather station Papa.


[Stage Direction]
Motion agreed to.

Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, in light of the equivocation on page 78 in the budget energy statement about the natural gas pipeline to Vancouver Island, I move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):
That this House requests the appropriate minister, whichever it may be, to make a statement on motions clarifying the extent to which federal assistance will be available to the province to build that pipeline, and to explain as well why
October 31, 1980

any resident of the island would want to convert to gas when the cost of heating his home with gas will double over the next three years.


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.


SHIPBUILDING
Mr. Gus Mitges (Grey-Simcoe):: Madam Speaker, I rise under the provisions of Standing Order 43. In view of the fact that the 11 per cent reduction in the shipbuilding subsidy from 20 per cent to 9 per cent has resulted in the loss of many direct and indirect jobs in the shipbuilding industry, cancelled contracts and the loss of millions of dollars to our economy because of the cutbacks in production, I move, seconded by the hon. member for Carleton-Charlotte (Mr. McCain):
That the government take immediate steps either to restore the 20 per cent subsidy or come up with other equally stimulating legislation to ensure and maintain the viability of all our shipbuilding yards in Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, I have a question for the Prime Minister. Last night, in responding to the budget of the Minister of Finance, the Premier of Alberta indicated that Alberta will cut its oil production by 15 per cent, will challenge the federal tax on natural gas in the courts and put on hold the Alsands project, which is necessary if Canada is to achieve energy self-sufficiency, which all of us on all sides of the House seek.
Will the federal government, in the interests of all Canadians, take advantage of the three-month period before the first cutback and renew discussions with the province of Alberta?
Oral Questions


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, on the gas throughput tax we understand that Premier Lougheed does want to take the matter up in the courts. We think that is a very reasonable and rational approach, and we are anxious to see any differences as to the law on the constitution interpreted by the courts.
In so far as the tar sands are concerned, we are a bit disappointed because the budget did indicate a $38 per barrel price, which is about the world price now. It seemed to be reasonably acceptable on all sides. It did indicate that production could be financially viable, and we are disappointed that Premier Lougheed seems to have some reservations about that. But he did not indicate any precise response so, of course, we will have to wait to see what he has in mind, and we are anxious to discuss the matter further with him.
In so far as the cutbacks are concerned, as the hon. member says, they would not be effective until they begin three months from now, and we welcome this breathing space, perhaps to continue negotiations with the province of Alberta. We will see if any accommodation is possible. 1 hope it is and we will certainly bend every effort in that direction.


Some hon. Members:: Hear, hear!


Walter David Baker: Madam Speaker, I gather that the Prime Minister is moving in the direction of some discussion and conciliation. If he is saying that that is in the best interests of Canada, I just want him to know that we share that view.


Some hon. Members:: Hear, hear!


Walter David Baker: Can the Prime Minister indicate to the House if it is possible to say today or tomorrow, given the short period of time, when those discussions might begin and whether he will involve himself in these matters?
In order that the jurisdiction can be tested with respect to the gas tax, which 1 agree is a matter of law pure and simple, could the Prime Minister indicate whether he, in the course of early discussions, would use his offices or whatever his legal powers are to bring those matters to court quickly so that they can be settled?


Pierre Elliott Trudeau: Yes, Madam Speaker, as far as we are able we would be anxious to have the legal aspect of this matter decided as expeditiously as possible. 1 will be discussing with the Minister of Energy, Mines and Resources and the Minister of Justice the ways in which this can be done. It presumably will involve an early contact with Alberta to establish on what it wants to base its case and how it thinks it would want to proceed.
With regard to the tar sands, I hope that the Minister of Energy, Mines and Resources will be able to contact his opposite number reasonably soon because we are not clear what Alberta has in mind when it talks about increased royalties and so forth. If it is a regime which, in effect, prevents the private sector from exploiting the tar sands, we would think it a regrettable move because, as we know, all of

October 31, 1980
Oral Questions
Canada is relying on the tar sands and the heavy oils to reach self-sufficiency by the end of the decade.
On the third point, I am afraid I cannot indicate any particular response at this time. On the matter of the interruption of oil supplies, many questions arise. The first is whether it is constitutional. Is it within the power of a province to interrupt the free flow of commodities across the country? I will want to study that at some length with the Minister of Justice and perhaps in cabinet before indicating any response.


Walter David Baker: Madam Speaker, with regard to the last matter discussed by the Prime Minister I think there are very few Canadians who would view the courtroom as the appropriate place to settle a difference within the family, and I am talking about the Canadian family. I am talking about the last matter. 1 hope the Prime Minister might take an initiative in this matter with respect to those discussions.
Having regard to the history of matters, I hope the Prime Minister will consider that with respect to the tar sands it is a matter he himself might raise in initiating any discussions. The purpose of my question is to ask the Prime Minister, in the best interests of the country, to take the initiative in these discussions and to take it rather quickly.


Pierre Elliott Trudeau: Well, Madam Speaker, I do not think I can add anything to the previous answer. I fail to see how the hon. member can argue that, in one case, Premier Lougheed is right in taking us to court, but in the other case we would not be right in taking him to court because it suddenly becomes a family matter.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I apologize if I misunderstood the hon. member. Perhaps he could repeat the question and the preface.


Walter David Baker: Just so it is absolutely clear, Madam Speaker, let me point out that there may be some areas where the courtroom would be the appropriate place. The thrust of my question is that in most areas the courtroom is not the appropriate place if one has a substitute, and that substitute, in my judgment and in my respectful submission, Madam Speaker, is the bargaining table. I am asking the Prime Minister whether he would assure the House that he will take steps immediately to take the initiative to go back to the bargaining table so that a settlement can be produced in the Canadian family with respect to a matter which must be vexing to every Canadian.


Pierre Elliott Trudeau: Well, I did understand the hon. member correctly, Madam Speaker, and he did suggest that, in the case of the gas tax, the court is the proper route, but that in the case of the curtailment of production, the court was not the proper route. I am suggesting that we are examining all routes and I do not exclude either an appeal to the courts by Alberta or an appeal to the courts by us.
However, I do repeat what I said at the outset, that further negotiations are certainly appropriate and they will be embarked upon as soon as cabinet has had a chance to examine the real substance of Premier Lougheed's answer. Some of it can be ascertained by initial discussions; some may have to be ascertained in other ways.


NATIONAL ENERGY PROGRAM-INQUIRY RESPECTING FEDERAL INITIATIVES WITH ALBERTA
Hon. Michael Wilson (Etobicoke Centre):: Madam Speaker, I should like to pursue the line of questioning of the hon. member for Nepean-Carleton and I wish to direct my question to the Minister of Energy, Mines and Resources. It relates to the questions I was putting to him yesterday on the matter of security of supply.
In his document "The National Energy Program", the importance of non-conventional oils in the program is very clear. It will result in a greater degree of production than the conventional sources of supply, and that to me is the key area of concern and one on which we should be focussing our attention.
My question to the minister is, what initiatives is he proposing to take in the context of a broad energy negotiation with the province of Alberta which will result in those important projects in western Canada being brought forward, projects which will help security of supply in eastern and central Canada as well as create jobs, not just in the narrow context of the non-conventional projects but in the broad context of a total agreement?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, the hon. member is quite right that the non-conventional oil is our main source of growth of supply in the coming decade. Those projects have a long lead time. The next tar sands plant could not come into operation before 1987. This does not mean that we shall not attach a very high priority to those projects. In the last two weeks I have had meetings with representatives of both the Cold Lake project and the oil sands project and I am supposed to have further discussions with them before very long. Also, my officials are in contact with them.
As the Prime Minister has just indicated, as contained in our budget and as I indicated at the last meeting I had with the minister of energy of Alberta, we put forward an offer which we felt was not only fair but also high enough to ensure that the projects would be economically viable. There have been further representations from the industry. We are still in the course of discussions, but obviously these are major investments and, quite clearly, there is need for further discussions, not only with the industry but also with the government of Alberta, particularly in light of Premier Lougheed's statement last night about his plans for the oilsands.


Michael Holcombe Wilson: Madam Speaker, I have a supplementary question for the minister. In the proposal which the province of Alberta put forward toward the end of July, I believe they
October 31, 1980

allowed for a $7 billion investment in the next three oil sands projects, both in the debt and equity as well as the total commencement of the infrastructure. Since the province of Alberta is such a critical partner in bringing forward these projects, is it possible for the minister to broaden the sweep of these negotiations to include not just those projects themselves, but in the total concept of the energy policy to bring the province back as a willing partner in the very important developments we must have in the country?


Marc Lalonde: Madam Speaker, certainly I would have no objection to that. As a matter of fact, we have talked about those two projects because they are the ones currently on the table on which tens of millions of dollars have already been spent. But as the hon. member knows, Nova and Petro-Canada have a joint proposal for a fourth plant. Certainly we would be very interested in discussing further proposals, if there are any, with the government of Alberta, or industry, or both.
As for possible investment by the government of Alberta, obviously this is a matter for the government of Alberta to decide. At the present time, on those projects the problem does not appear to be essentially a shortage of money for investment; it is the assurance that there will be a good enough rate of return on whatever they will invest, and that is what is still being discussed.


INQUIRY WHETHER PRIME MINISTER WILL MEET PREMIER LOUGHEED
Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, my question is directed to the Prime Minister. Many Canadians find it unacceptable that we have a confrontation and deterioration in federal-provincial relations. I think last night was just a further stage in this process. I detect in the House today a feeling that what is needed is a calm and reasoned approach by both the federal government and Alberta because the people of Canada are caught in the middle of this dispute.
The Prime Minister appeared to indicate that he would keep the door open to negotiations, and then there was some talk from the Minister of Energy, Mines and Resources about officials meeting. Would he clarify for the House and for the country what specific plans he has in mind for further negotiations? More specifically, is he prepared to meet with Premier Lougheed personally, and when?


Pierre Elliott Trudeau: Madam Speaker, it seems to me that that question is something of a repetition of the question asked by the opposition House leader.


Ian Gardiner Waddell: No, not quite.


Pierre Elliott Trudeau: He has my answers. They might be more enlightened if I knew the position of the hon. member on this. He seems puzzled by the whole situation, as indeed he should be. The take of the producing provinces is reduced from something like 45 per cent to 43 per cent, which is not major.
Oral Questions
The take of the federal government is considerably increased, but it is at the expense of the producing private sector. It would be interesting to know if the NDP will support our approach on this, if it thinks we are hitting the private sector and the oil companies too hard, if it thinks as a consequence that the federal government should be getting less money from them, or if it thinks we should be hitting them harder. I await some help from the hon. member who has a distinguished record of thought on this matter.


Some hon. Members:: Hear, hear!


Ian Gardiner Waddell: Madam Speaker, I might say to the Prime Minister that we on this side of the House feel the provinces have legitimate concerns for their vast problems and costs. If one has been to Fort McMurray, as has the Prime Minister, one will know the cost of schools, housing, social services and so on. At the same time we recognize, as do most Canadians, that we must have a national energy policy.
The Prime Minister answered my question with a question, which I know is a favourite technique. But the point which 1 think the country wants to know is: will he personally continue negotiations with Premier Lougheed? Will he personally meet with Premier Lougheed and, if so, when?


Pierre Elliott Trudeau: Madam Speaker, I met with Premier Lougheed for a few days last summer and I was prepared to meet with him last Monday. I am prepared to meet with him again.


Miss MacDonald:: When?


Pierre Elliott Trudeau: Any time which would be useful from his point of view and mine. He can come tomorrow if he wishes. The point is that the hon. member seems to be making suggestions which do not have any substance to them. The real question is: is the sharing fair or not? If the provincial share is going down from 45 to 43 per cent, it is not a big stroke against the provinces, or against the schools in Fort McMurray, which seem to concern the hon. member. But there is a rather big take from the oil companies which is to the benefit of the consumers of Canada.


Mr. Blenkarn:: Oh, come on!


Pierre Elliott Trudeau: And to the federal government. I am prepared to meet Premier Lougheed. It would be of help to me if the hon. member himself-I know his party is divided on this- could tell me if he thinks we are taking too much from the oil companies or too much from the province when we are going down to 43 per cent. I am not asking a question; I am just suggesting that he might try to get his thoughts together and be helpful to the Canadian nation on this.


Ian Gardiner Waddell: Madam Speaker, the Prime Minister mentioned Canadian consumers, who appear to me to be the forgotten people in this dispute, if I can put my thoughts together.

Oral Questions
1 have a question for the Prime Minister. Canadian consumers are being hit by a $340 increase per family for energy costs, for the cost of heating their homes and being able to drive their cars next year as a result of the Prime Minister's budget. Would the Prime Minister consider introducing a cost of living tax credit to help these middle and low-income Canadian consumers?


Pierre Elliott Trudeau: The hon. member thinks the consumer is being asked to pay prices which are too high. Is he then siding with the federal government against the producing provinces and saying that, as Premier Lougheed is asking for even higher prices, 1 should meet him, as the hon. member suggests, and turn down his requests for higher prices? This is the kind of guidance I am asking for from the hon. member.


PRESENCE IN GALLERY OF MINISTER OF FISHERIES OF NOVA SCOTIA
Madam Speaker:: I would like to draw the attention of the House to the presence in our gallery today of the Hon. Edmond Morris, Minister of Fisheries of Nova Scotia.


Some hon. Members:: Hear, hear!


PRESENCE IN GALLERY OF PRESIDENT OF THE LEAGUE OF RED CROSS SOCIETIES
Madam Speaker:: I would also like to draw the attention of the House to the presence in our gallery today of the President of the League of Red Cross Societies, Mr. Justice A. F. Adefarasin.


Some hon. Members:: 
THE CONSTITUTION
Flora Isabel MacDonald: Madam Speaker, my question is addressed to the Prime Minister. 1 would like to ask him to confirm reports emanating from both London and from officials in Ottawa today that the government House leader has been in touch with his counterpart in the United Kingdom, Mr. Norman St. John-Stevas, concerning a scaling down of the Canadian government's proposals so that patriation could take place as quickly as possible, but that other constitutional amendments should be made in Canada. Would the Prime Minister comment on those reports?


Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, I should inform the House that it is not the usual custom to divulge private conversations which take place between individuals, but 1 can
confirm that a call was received earlier this week from the Lord Privy Seal by the President of the Privy Council which arose as a result of somewhat alarmist reports in the British press in connection with the progress of the constitutional resolution in the House of Commons. The Lord Privy Seal wanted some clarification from the President of the Privy Council.


Flora Isabel MacDonald: It is interesting to note that in connection with a matter as important and as crucial as this to the country the Prime Minister would not take the opportunity to respond to my question.


Some hon. Members:: Hear, hear!


PATRIATION-REPORTED VIEW OF UNITED KINGDOM GOVERNMENT
Flora Isabel MacDonald: I have a supplementary question for the Secretary of State for External Affairs. Since the exchange in the House yesterday The Times reporter has twice reiterated that two British cabinet ministers have informed him that the position of the United Kingdom government is that they would quickly pass a request for patriation but that other constitutional amendments should be straightened out here in Canada. In other words, there was a very clear indication that Canada is a grown up, mature and independent country and should be able to handle its problems on its own rather than asking another country to resolve them.


Some hon. Members:: Hear, hear!


Flora Isabel MacDonald: I would like to ask the Secretary of State for External Affairs if he would confirm that this is the gist of the message which he was asked to convey to Canada's government, or if perhaps this was the message which he conveniently forgot on the aircraft coming home, as other Liberal cabinet ministers have been known to do in the past?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, the hon. member opposite has had the privilege of sitting in a cabinet and she knows that a variety of views are found around the cabinet table-and perhaps sometimes they are even carried out afterwards. There was a press report this morning in The Globe and Mail which quoted the official spokesman for the British government as saying:
We will put legislation before Parliament when the Canadian government requests us to do so. There has been no change in our position for months.
That is the message we brought back and it was the message which we were given.
October 31, 1980


ENVIRONMENTAL AFFAIRS
Mr. Tom McMillan (Hillsborough):: Madam Speaker, my question is directed to the Minister of Finance. He will know that his colleague, the Minister of the Environment, has been lobbying very strenuously in the United States against American legislation designed to convert thermal power plants in the United States from oil to coal because of serious environmental damage which that would inflict on our country. The minister's budget now proposes to spend $175 million to encourage the conversion of electricity plants in the Atlantic provinces from oil to coal.
Will the Minister of Finance tell the House how he reconciles the government support for coal conversions in the Atlantic provinces which do not contain environmental safeguards with the government's opposition to similar measures in the United States, which would inflict very serious environmental harm not only on the United States but on Canada as well?


Marc Lalonde: Madam Speaker, the Government of Canada in its budget has announced the spending of some $175 million, as the hon. member has indicated, for conversion of electricity generation utilities from oil to coal. I suggest that the hon. member also looks at the national energy program, where he will see that we are also allocating tens of millions of dollars for research and development on ways of improving coal combustion and reducing any pollution which may result. In particular, we have already started financing a system called fluidized bed combustion, which will result in a very substantial reduction of sulphurous content in coal burning.


Thomas Michael McMillan: Madam Speaker, my question is directed to the minister of energy. As he will know, the technology is already there to include environmental safeguards in plants for the protection of the environment. So research and development is not the problem. Will the minister tell the House whether the government's funding of coal conversions in Canada is dependent upon the provinces meeting federal government environmental standards and, if so, what specific environmental conditions will be required?


Marc Lalonde: Madam Speaker, it is quite obvious that if we are to assume the cost of those conversions, they will have to meet federal environmental standards. That seems obvious to me, and I am amazed at my colleague's question.
Oral Questions


CONSERVATION AND DEVELOPMENT OF RENEWABLE RESOURCES
Mr. Mark Rose (Mission-Port Moody):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. While this party does not support the action taken by Alberta last evening, there can be no question that Premier Lougheed demonstrated to Canadians most dramatically and perhaps even for the first time that petroleum reserves are fast running out, proving the desperate need for conservation. Since we cannot do much about the supply side, certainly in the short run, will the minister tell the House when the government intends to attempt to affect more dramatically the supply side and assume greater leadership in conservation and the development of renewable energy in Canada?


Marc Lalonde: Madam Speaker, from the national energy program which the government tabled two days ago, my hon. friend will learn that the emphasis is on conservation and substitution. Of the many billions of dollars which the government has set aside in terms of direct programs in the area of energy, a very substantial portion of those dollars is allocated to conversion to and substitution for other forms of energy. Never in the history of this country has there been such a major program of conversion to and substitution for new forms of energy than is contained in this new energy program. I believe it compares favourably with any program 1 have seen in any industrialized country in the world, and I can vouch for that.


Mark Willson Rose: Madam Speaker, the minister knows full well that these are certain kinds of proposals and that they are not necessarily hard and budgeted facts. I have a report published by the minister's department through one of his own programs which indicates that out of $158 million to be spent this year on R and D and certain other support programs, $104 million will go for nuclear energy. Compare that to some other countries, notably Sweden which is one third the size of Canada and which is spending $1.2 billion on R and D and energy research. If the minister is satisfied, I would like him to know that some of us are not satisfied.
When does the government intend to get serious about things like rail electrification, energy-efficient housing and dozens of other things that Canada can and should do to lower oil demands? Or can Canadians expect a future either of rationing or, even worse, nuclear energy?


Marc Lalonde: Madam Speaker, again if my hon. friend will look at the program which was released by this government, rather than at studies which are already out of date-because he is referring to studies which were published a while ago, not to the most recent document which was released this week at the time of the budget-he will find that with regard to research and development the national energy program alio-

Oral Questions
cates an additional amount of $260 million to be used only for research and development.


Mark Willson Rose: Where?


Mr. Rae:: You're dancing.


Marc Lalonde: The majority of that money will be spent on non-nuclear research, new forms of energy and all kinds of research and development in alternative energy forms other than nuclear energy. This is in the national energy program. We have also announced programs in the area of conversion whereby, for instance, everybody who converts to something other than oil will be given a grant of up $800. Also, there are a number of initiatives in that program which will encourage citizens in the various regions of this country to get off oil.
I can only advise my colleague to look at the program which has been released., He will find that, indeed, at the end of this decade we foresee that Canada will be consuming less oil than it is consuming now under our proposals and programs.


FINANCIAL ASSISTANCE TO NATIONAL GAS PRODUCERS
Mr. Jim Peterson (Willowdale):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. In the spirit of the motion put earlier today by the hon. member for Parry Sound-Muskoka, I believe and I expect that most members of this House will support the national energy program in terms of aiding consumers to convert from the use of oil to natural gas. But as the minister realizes, there are many Canadian-owned firms that have shut-in or locked-in reserves and which are now experiencing problems. What does the minister propose to do to assist these Canadian-owned gas firms with their cash flow problems?


Marc Lalonde: Madam Speaker, I thank the hon. member for his question which raises a very serious problem which was of great concern to us in the preparation of the national energy program. As the House knows, we intend to set up a national gas bank-


Mr. Nielsen:: It is sitting on the front benches.


Marc Lalonde: -whereby Canadian gas producers, particularly small producers, will be able to sell their gas to or become involved through joint participation with the gas bank-


Mr. Crosbie:: It is a great thing for the Liberals because they have a surplus of gas.


Marc Lalonde: -or to obtain loans from the bank to allow them to do further exploration. We will also extend the gas pipeline to the maritimes and to Vancouver Island, if British Columbia agrees, so there will be a substantial increase in gas consumption in this country. For that purpose, we have allocated about $500 million.
Also, I just referred to a very extensive conversion grant program which will encourage all Canadians who are now
consuming oil for home heating to switch to other forms of energy, and to gas in particular.


HOUSING
Mr. Doug Lewis (Simcoe North):: Madam Speaker, my question is for the minister responsible for housing. The government, in the document to which the Minister of Energy, Mines and Resources referred earlier, refers to a vigorous conservation effort. On October 20, my colleague the hon. member for Mississauga South asked the Minister of Energy, Mines and Resources when the CHIP program would be extended to those Canadians who own homes built after 1961. The minister replied on that date that my colleague would have to wait for the budget and the announcement of the government's policy which was coming the following week for an answer. We have waited and we do not have an answer. Would the minister of housing tell the House when the three million Canadians who own homes built between 1961 and 1976 can expect to enter into the CHIP program?
Hon. Marc Lalonde (Minister of Energy, Mines and
Resources): Madam Speaker, under the national energy program we have increased by about 300 per cent the sum of money allocated to the CHIP program. I believe it will go from an amount of $85 million to over $230 million. There has been a very large increase in the number of requests for the CHIP program over the last year and particularly over the last few months. We believe that with the new program there will be a further increase.
I would like to indicate to the hon. member that we are, indeed, concerned with extending the availability of this grant to more recent homes, but we first want obviously to concentrate our efforts on older homes which have worse insulation problems than more recent homes. We recognize that there are also many more recent homes which have inadequate insulation and that the matter should be reviewed. But in terms of priorities, we are trying to reach the larger share of older homes first. I would hope that later-and I do not know whether it will be in the course of next fiscal year or in the course of the next budget-we will be able to extend the program to more recent homes as soon as it is feasible. I can assure the hon. member that we have this problem very much in mind.


THE BUDGET
Miss Pat Carney (Vancouver Centre):: Madam Speaker, I would like to direct my question to the Minister of Finance. In his budget the minister says that he will rebate Alberta and
October 31, 1980

Saskatchewan 50 per cent of the revenues from the oil export tax and that he expects oil exports to be phased out by 1985. Since 50 per cent of zero is zero, could the minister please explain his arithmetic?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, 1 would rather understand the question before 1 explain the arithmetic.


Pat Carney: Madam Speaker, I am quoting from the minister's own budget. May 1 direct him to page 37 of the national energy statement and to pages 23 and 27 of his budget, if he cares to review the matter and give me a written answer.


HOUSING
Donald Alex Blenkarn: Madam Speaker, my supplementary question is directed to the Minister of Energy, Mines and Resources. The minister said that the homes built after 1961 will have to wait until there is money available, but he obliquely promised these home owners some help. What do these people do? Will the minister tell the House what these people should do if they go ahead and insulate now, and thus save us a lot of oil? Will these people be required to pay the bill out of their own pocket and retain their receipts? These people have no assurance as to when the minister will do something for them. The minister knows that the standards for houses built in 1960 and houses built in 1970 were the same. Could the minister explain?


Marc Lalonde: Madam Speaker, I would like to say very clearly that I have given no guarantee as to when we will be in a position to extend the insulation program to more recent homes. 1 said earlier to another member that we were trying at present to meet as quickly as possible all the requests for insulation of homes built before 1961.
In the meantime, those with more recent homes can do a number of things, the first being to give up oil heating for gas or any other kind of heating as soon as possible. By resorting to such conversion right now, those people could save a lot of money. As for the availability of the insulation scheme at a further date, I am not in a position to predict when it will become available. There is always a cut-off date in such schemes and it happens to be 1961 in this case.


Donald Alex Blenkarn: Madam Speaker, is the minister saying to those Canadians who own homes built since 1961 that they would be wise not to insulate right now, that they could wait
Oral Questions
for a while and then perhaps they will get in on the $500 bonus a little later, and that all they can do is take advantage of a retrofit program with respect to oil? Is that the minister's attitude? Or is the minister going to end this most discriminatory program which looks after one person on a street but not the other person next door who had a house built maybe a year later? Is it the minister's proposal that those people wait and not insulate until the minister makes a grant available?


Marc Lalonde: Madam Speaker, the hon. member has the ability to distort the facts with the greatest ease. When it was first implemented, the program applied only to houses built up to 1946. Subsequently, it was extended to houses built up to 1961. Even at first, when the program applied only to houses built up to 1946, 10 per cent of the home owners who converted had houses built after 1946. They decided to assume these costs, because they realized that it was both advantageous and profitable for them to do so. Now, we have a program which will help people convert their home heating systems to alternate sources of energy, including gas. We are providing up to $800 to home owners who wish to convert to natural gas or wood. This extremely generous and new program is available to everybody. As to a possible extension of the deadline to apply for the grant under the home insulation program, we will wait until we have managed to process all the grant applications received for houses built before 1961.


THE BUDGET
Mr. Lome Nystrom (Yorkton-Melville):: Madam Speaker, my question is for the Minister of Finance. In his budget the other night, the minister referred to the imposition of a new tax of 8 per cent on net revenue from the production of oil and gas in Canada. My understanding is that this would apply to Crown corporations or Crown agencies in the production of gas and oil, companies such as Saskoil and the Saskatchewan Power Corporation, a practice in which the government has never involved itself in the past. I ask the minister whether or not he can confirm that this is a new tax that will be applied for the first time to Crown corporations owned by the people of the provinces?


Allan Joseph MacEachen: Madam Speaker, I understand that the tax would apply in the way the hon. member has described. For example, the province of Saskatchewan taxes Petro-Canada, so it seems to me that there ought to be a certain reciprocity in their approach to these matters.


Lorne Edmund Nystrom: Madam Speaker, under section 125 of the British North America Act it is very clear that no lands or property belonging to Canada or any province should be liable

October 31, 1980
Oral Questions
to taxation. That has been interpreted in the past to mean Crown corporations or Crown agencies owned by the provinces. I wonder whether the minister might reconsider the imposition of this tax as it applies to provincial Crown corporations, in light of some of the chaos which may result if provinces retaliate even further by trying to impose taxes on some of the federal Crown corporations, such as Air Canada, the CNR, or, indeed, Eldorado? Would the minister reconsider this in light of the possibility that some of the provinces may take this question to court, and in light of the growing concern in this country about the evolution of federalism being determined by judges and by the courts rather than by politicians?


Allan Joseph MacEachen: Madam Speaker, the hon. member may want to make a similar plea to the government of Saskatchewan to stop taxing Petro-Canada. That seems to me to be a logical outcome from his representations regarding Saskoil.

[ Translation]


INCENTIVES TO QUEBECKERS TO ABANDON OIL HEATING
Mr. Andre Bachand (Missisquoi):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. The Minister has often said in the past that users of heating oil must be encouraged to convert to gas. Since Quebec has an abundant supply of hydroelectric power, can the minister indicate whether there are provisions in the national energy program to give Quebeckers tax incentives or some other form of aid to encourage them to convert their heating systems to electricity?


Marc Lalonde: Madam Speaker, the national energy program clearly states that the government would subsidize, up to $800, home owners who would convert their existing oil heating system to an alternate source of energy. Those other forms of energy are especially natural gas and electricity.
We are quite willing to subsidize those two forms of energy and make them accessible to all. But we must do it in co-operation with the provincial authorities, and the provincial authority concerned must accept that its hydro company, Hydro-Quebec in this instance, make the conversions involved. That does not depend on us; each provincial government is responsible for deciding whether or not it is willing to encourage the use of its hydroelectricity to heat homes.
As for us, and that I want to repeat, we are willing to pay the same subsidies in Quebec as in the other provinces, except the maritimes for the time being, because they are using oil to produce electricity; but as soon as they have switched to coal, the same will apply to them. So with regard to Quebec, as far as we are concerned the federal government is willing to make those funds available to home owners who convert their heating systems either to natural gas or electricity, wood or any other source of energy. Of course, the Quebec government has its say in the matter, especially where electric heating is concerned.


NATURAL GAS EXPORTS TAX-ASSISTANCE TO LOW-INCOME CANADIANS
Thomas Edward Siddon: Madam Speaker, my question is directed to the Minister of Finance. The hon. minister knows full well that his announced natural gas tax is in fact a tax on natural gas exports, but it is also a direct and discriminatory tax on every consumer of natural gas in the four western provinces and Ontario.


An hon. Member:: And Quebec.


Thomas Edward Siddon: Does the minister realize that his natural gas tax will increase the domestic heating costs of western Canadians, who must heat their homes with gas, by about 16 per cent effective tomorrow, and that this increase will amount to about 33 per cent on next winter's heating bill or at least $150 for every home in western Canada using gas? What assistance does the minister propose for those low-income Canadians in the west, in Ontario-and, yes, to some degree in Quebec- who can ill afford a $100 to $300 jump in their heating bill this winter and next?


Allan Joseph MacEachen: Madam Speaker, I am fully aware of the impact of the tax which will apply to consumers in western Canada, in Ontario and in Quebec. It is not discriminatory in any way because it applies to all. Of course, I never thought anyone would argue in the House of Commons that we ought to tax a commodity which is used in Canada and not tax the commodity when it is used in the United States. That is what the intent of this tax is.
1 should add for the hon. member's information that the increased tax is in lieu of an increase in price which is not to take place and that the increases in gas prices that will take place over the next several years will be lower than those projected in the December budget.


John Carnell Crosbie: Nonsense. Try and be honest.


Allan Joseph MacEachen: For example, next year the increase will be 45 cents per 1,000 cubic feet rather than 67'/2 cents per 1,000 cubic feet projected last December. So the hon. member ought to give me a little hand for that.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Thomas Edward Siddon: Madam Speaker, I am not sure I can extract much sense out of that muddle. In fact, effective tomorrow the 30 cents per 1,000 cubic feet tax is being levied on the
October 31, 1980

residents who consume natural gas in their homes. To suggest a tax on exported natural gas is not a natural gas export tax is a childish form of deceit which insults the intelligence of every Canadian.
Will the Minister of Finance admit that this tax is clearly discriminatory to home owners using natural gas both in Ontario and in the western provinces? Has he calculated the tremendous inflationary impact which this tax will have on the production costs for many building materials, including concrete, wood products, plastics, paper and steel, all of which are manufactured in the provinces of Ontario and Quebec?


Allan Joseph MacEachen: Madam Speaker, 1 have given consideration to all the questions the hon. member has raised and have gone ahead with this federal tax on gas in order to meet the wishes primarily of the producing provinces which objected to an exclusive tax on exports. If the hon. member will reflect on the difference in the potential and the application of these two taxes, he will know that there is a very considerable difference indeed. Anyway, 1 want him to reflect on that. I will not make any further observations.


CANADA PENSION PLAN
Hon. Stanley Knowles (Winnipeg North Centre):: Madam Speaker, may I direct a question to the Minister of National Health and Welfare. It relates to a report attributed to her a while ago to the effect that the government would be bringing in amendments to the Canada Pension Plan so as to provide pension coverage for certain persons not now covered, including women who work in their homes. I want to ask the minister if she will make a statement at an early date concerning this legislation, and will she make it clear that any coverage for spouses, women who work in their homes, will be universal, not just a case of something made available to those who can afford to pay the premiums?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, the hon. member underlines the challenge we are facing, which is to open up the Canada Pension Plan to housewives who want to contribute on a voluntary basis. The consequence is that if they have to pay at the maximum rate, which would be about $35 a month, only women in a certain social economic group will be able to participate. That is not bad and it is why we are going towards that route.
However, it does not cover the problem of those women in families with low or no income. Because of that problem, 1 will not be able to come to the House in the near future, and by that I mean in the coming months, with any proposal. We are still working on it. On our trip to Europe we checked all pension schemes known to European countries to cover housewives.
Oral Questions
As to the other point, the amendments to the CPP regarding women who are partners of their husbands in small family enterprises, we will be bringing a proposal before the House very soon.


Stanley Howard Knowles: Madam Speaker, I have a supplementary question for the Minister. In view of what I take to be her commitment not to discriminate against those who cannot afford to pay premiums, and I refer to women in their homes, when the minister works on that problem, will she also try to do something to end the discrimination against single, divorced and widowed women between 60 and 65 who are denied pensions in that age bracket, even though they may need them, because they do not have a spouse?


Monique Bégin: Madam Speaker, I will certainly look into that question which was part of a general discussion we had in recent days and which is part of the mandate that I gave to my officials.


BILINGUALISM
Mr. Andre Maltais (Manicouagan):: Madam Speaker, my question is for the Minister of Transport. A few years ago the Canadian government set up a commission of inquiry on the languages used in the nation's air space. One of the recommendations of the commission chaired by Messrs. Sinclair, Choui-nard and Heald was to extend bilingualism in Quebec air space. Now, in the October 27 issue of the newspaper Le Devoir Mr. Pierre Pourchelle of the Association des Gens de Pair du Quebec stated that the proposed schedule aimed at establishing bilingual services in Transport Canada in Quebec has been or would be delayed. So my question is this: first, will there really be a delay in the schedule proposed by the commission headed by Messrs. Sinclair, Chouinard and Heald, second, to what is this delay due and, if such is not the case, can the Minister of Transport confirm whether or not the deadlines for implementing bilingual services will be respected in Quebec air space?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, the answer is yes. The program is being implemented according to a schedule which had been set after the previous government endorsed the Chouinard report. Phase I is now complete and concerns the airports at Dorval, Mirabel and Quebec City. Phase II covers the northern part of the province and is now under way. Phase III on eastern Quebec will come later. The Association des Gens de Pair would like to change the program which, of course, is very difficult, but we are trying to accommodate them as much as possible.

October 31, 1980
Oral Questions


BANKRUPTCIES
Mr. Bill Kempling (Burlington):: Madam Speaker, 1 have a question for the Minister of State (Finance). On October 10 I asked the minister two questions regarding the bankruptcy and winding up of Re-Mor and Astra Trust. The minister did not answer the questions at that time; he skated all around them. Has he now had a chance to look at my questions and reflect on them? Will he advise if the government will undertake an investigation and inquiry into the circumstances surrounding the bankruptcy and winding up of Re-Mor and Astra Trust, in view of the substantial losses suffered by innocent victims who were misled by questionable advertising and by bait and switch tactics?
[ Translation]


Hon. Pierre Bussieres (Minister of State, Finance):: Madam Speaker, of course I continued to study the Astra Trust and Re-Mor case after the question put to me by the hon. member. As I told him the first time, I would like to point out to him that from a legal standpoint we ought not to link unconditionally, as he seems to be doing, the cases of Astra Trust and Re-Mor. As he knows, and it would seem that I have to remind him of this, Astra Trust comes under federal jurisdiction whereas Re-Mor comes under provincial jurisdiction. In the case of Astra Trust the hon. member knows that the Superintendent of Insurance has launched bankruptcy proceedings so that the people who have filed claims will be paid up to $20,000 through the federal mechanism. As for Re-Mor, which is under provincial responsibility, claims must be filed with federal authorities. In his question the hon. member said something about an inquiry. He ought to know that last August the Superintendent of Insurance had already asked the Royal Canadian Mounted Police to inquire into the administrative procedures and the way the Astra board of directors managed the company. I understand that the Ontario Provincial Police is doing the same thing as regards Re-Mor. 1 am convinced therefore that if the police inquiries into one or the other of these two companies uncover administrative irregularities, proceedings will be taken before the courts.


William James Kempling: A supplementary question, Madam Speaker. Will the minister inquire into the quality of communications between the Department of Insurance and the Ontario provincial authorities? Because the view persists that had the quality of communications between the federal government and the provincial government been of a higher level, most of the losses, if not all of the losses, on the Re-Mor side could have been avoided.
Would he at the same time look into the allegations that are being made in the street of political interference and pressure
applied to the approval of the Astra Trust application after it had been turned down three times within the department?


Pierre Bussières: Madam Speaker, in the first part of my reply I took time to indicate clearly and categorically the nature of the inquiries being made into each company: the Royal Canadian Mounted Police is investigating Astra, the Ontario Provincial Police is investigating Remor. I am convinced that these very serious investigators will cover all angles and all aspects referred to by the hon. member.


PETITIONS
Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the Table the twenty-third report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Cowichan-Malahat-The Islands (Mr. Manly) and finds that it meets the requirements of the Standing Orders as to form.
Order, please. I have a notice of a question of privilege from the hon. member for Skeena (Mr. Fulton).


PRIVILEGE
James Ross Fulton: Madam Speaker, I shall be very brief. My question of privilege arises from question period last Tuesday, October 21, when I put questions to the Minister of Fisheries and Oceans (Mr. LeBlanc), the Minister of Indian Affairs and Northern Development (Mr. Munro), and the Prime Minister (Mr. Trudeau).
I shall quote briefly from pages 3870 and 3871 of Hansard. The Minister of Fisheries and Oceans indicated that he had received the report that I was questioning him about and that he would "-have a fuller answer for the hon. member early next week." In my view, Madam Speaker, that would be Monday, Tuesday or Wednesday.
The Minister of Indian Affairs and Northern Development said, within the text, that he was seriously considering a public inquiry and that "-discussions will be going on before I will be required to make any decision of that kind."
The Right Hon. Prime Minister said "-we asked for a review-".
I will give a very brief preamble, Madam Speaker, to the concerns that I have in my question of privilege. In 1977 the effluent mining liquid regulations were passed by this House. In mid-election last year, when Parliament was not sitting, regulations which strayed dramatically from legislation passed
October 31, 1980

by this House, were made by order in council. These regulations are disputed by independent scientists, lawyers, fishermen, native people, the Anglican and Catholic Churches of Canada, environmental groups, the public, and members of this House. The passage of this special order in council infringes on the rights and privileges of myself and, in my view, of all members of this House.
Yesterday I gave the minister 24 hours' notice of this question of privilege, precisely where it was in Hansard, and the nature of it.
I believe that you should rule on two specific things, Madam Speaker, the first being in relation to orders that are passed when this House is not in session that give extraordinary rights or unique rights, as in this case, to major industrial developments. Part and parcel of that is whether the privileges of this House have been tampered with by the special order in council.
The second part of my question of privilege, and 1 believe the minister is prepared to respond to it today, is whether the statements made on October 21 in this House by the Prime Minister, the Minister of Indian Affairs and Northern Development and the Minister of Fisheries and Oceans, are misleading to this House. The Minister of Fisheries and Oceans indicated that a statement would be forthcoming regarding a full public inquiry into the dumping of toxic tailings into Alice Arm, British Columbia. In my view that statement should be made in this House, Madam Speaker.


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, I tried to take notes as the hon. member was speaking, so I hope that I did not mix up the dates he used.
I remember when the hon. member asked me about a report but I think I misunderstood. He was referring to the McCart report; I was referring to the report of my officials, of whom I had asked a review of the recommendations that had come forward in April, 1979.
Be that as it may, Madam Speaker, the officials in the Pacific region did make a review as I requested. They have now made it clear that nothing has emerged from their reexamination to lead them to change the recommendations they had made and which were eventually put into the order in council which was passed. The recommendations were that the tailings would be more safely stored at a very deep part of the Alice Arm bay and, in fact, in their judgment this was a safer approach than locating the tailings in a land-locked or land-based site where there would be very considerable bleaching.
I discussed the report with my officials at the beginning of this week when I was in British Columbia. The conclusion is the same as that arrived at some year and a half ago.
The new information is that I have written to the company stating exactly what monitoring devices would be required and what monitoring plan would be required before final approval was given.
In one of his questions the hon. member referred to the McCart report. A preliminary examination of that report
Privilege-Mr. Rose
seems to indicate that no substantive new information is provided. I am of the view, however, that the only way that the fears which exist can be contained or alleviated is by clear participation in the monitoring process. I have started discussions with my colleague, the Minister of Indian Affairs and Northern Development, to see how we can involve the Nishga tribe, which is worried about this issue, in a monitoring operation, and also how we can make information fully available. That has always been my approach.
In this case, my review of the situation leads me to think that this was a matter of what was, on balance, the best judgment. Until I have been given further information I think that would still be my position.
Obviously, Madam Speaker, I would like to see the situation where there is participation and full knowledge of the monitoring operation that would be required to make sure how these tailings are being disposed of and how the situation evolved. I hope I have answered some of the hon. member's worries.


Madam Speaker:: I am sure that this exchange between the two hon. members has allowed both of them either to seek or to obtain further information, but certainly, even if there is a question of orders in council that are passed outside of sessions, that being a matter of government administration, I cannot see a question of privilege in the matter raised by the hon. member for Skeena (Mr. Fulton).


MR. MUNRO (ESQU1MALT-SAAN1CH)-INTENTION TO RAISE QUESTION OF PRIVILEGE
Donald W. Munro: Madam Speaker, I merely wish, with your permission, to indicate my intention to raise a question of privilege when I have checked the blues, following a reply given by the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) to a question put by the hon. member for Yorkton-Melville (Mr. Nystrom) which, by my hearing, left the misleading impression that PetroCan pays taxes. I should like to check the blues and some other material which is in Hansard so that I may determine whether there is a question of privilege. If there is, I shall raise it.


MR. ROSE-INTENTION TO RAISE QUESTION OF PRIVILEGE
Mark Willson Rose: Madam Speaker, I rise to give notice that I intend to raise a question of privilege in greater detail at another time. It concerns a reply I received from the Minister of Energy, Mines and Resources (Mr. Falonde) to the effect that Canada was among world leaders in renewables and conservation. Intentionally or not, I think the minister misled the House, because while Canada is spending a great deal of money on the supply side, it certainly is not a world leader on the demand side or the conservation side.


Madam Speaker:: Order, please. I want to remind hon. members-and this is also for the hon. member for Mission-

October 31, 1980
Order Paper Questions
Port Moody (Mr. Rose)-that they should give me written notice with a brief statement of what their question of privilege is about. It is not sufficient to raise it in the House.


IMMIGRATION ANNUAL REPORT
Bob Rae: Madam Speaker, 1 rise on a point of order. The Minister of Employment and Immigration (Mr. Axworthy) indicated to my colleague, the hon. member for Winnipeg North (Mr. Orlikow), that he intended to table today a document concerning the annual report to Parliament of immigration levels for 1981.
First, I am a little surprised that he did not table the document. Second, I am surprised that he would choose to table the document rather than answer questions in the House.


Madam Speaker:: Order, please. For the information of the hon. member, that report has been sent to the Clerk's office. As he knows, there are two ways of tabling these documents. They are either tabled in the House or sent directly to the Clerk, and my information is that this document has been sent in.


Bob Rae: Madam Speaker, if I might just make my point of order, when a minister of the Crown does not even table in a direct manner, on a matter as fundamental as what the future or projected level of immigration will be for 1981, and when that minister does not choose to answer a few questions in the House of Commons but chooses instead simply to call a press conference and be questioned by members of the press but not by members of this House, I think it is a disgraceful performance, and I think it is something to be commented upon.


Madam Speaker:: Order, please. Standing Order 41(1) allows the minister to do exactly what he has done. There is nothing in the procedure used by the minister which contravenes our standing orders, so I fail to see that there is a point of order.



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
David Michael Collenette: Madam Speaker, the following questions will be answered today: Nos. 58, 225, 890 and 1,433.


Mr. Cossitt: 1.	To the knowledge of the government, did Mr. Leslie James Bennett, formerly with the security services of the RCMP, arrive in Toronto from Australia on or about February, 1979, and did he testify at an Examination for Discovery in connection with a civil action against novelist Ian Adams?
2.	To the knowledge of the government, did Mr. Bennett state in his testimony that in 1972 he was taken by RCMP personnel headed by then superintendent and now assistant commissioner Murray Sexsmith to an apartment in an Ottawa highrise commonly referred to by the security services as a "safe house"?
3.	Was he questioned for a period of four days at the location by Mr. Sexsmith and/or others on the subject of whether or not he was a double agent and, if so (a) what was the conclusion drawn by the RCMP (b) did the RCMP suggest that he leave his RCMP post and depart from Canada as quickly as possible and, if so, what arrangements were made, if any, for such departure, financial or otherwise?


Hon. Bob Kaplan (Solicitor General):: 1. It is a matter of public knowledge that Mr. Leslie James Bennett was in Canada in February, 1979, and that he participated in an Examination for Discovery in connection with a civil action against Mr. Ian Adams. Newspaper reports of November 15, 1979, reflect that libel action hearings did take place in Toronto last spring.
2.	Yes.
3.	Mr. Bennett was debriefed by the RCMP in line with the normal procedures of all western intelligence services. It would be inappropriate to comment further on the results of that debriefing as the issues involved are now before the courts in a civil action.


Mr. Herbert: 1.	Did Statistics Canada issue the questionnaire "Survey of the Offices of Architects, 1977" and, if so (a) for what reason (b) what is the object of the questionnaire (c) what will be done with the information received in response to the questionnaire (d) was the questionnaire sent to all architects (e) how many were sent out?
2.	Are (a) all architects in a partnership (b) salaried architects employed by governments, required to complete the questionnaire?
3.	How many replies (a) were received (b) included an unanswered question?
4.	What is the penalty for not returning the questionnaire and is there a penalty if one or more of the questions are unanswered?
5.	Have any fines been imposed in the past two years, on professional persons, for not completing similar questionnaires and, if so, how many?
6.	What was the cost of producing the questionnaire?
7.	What will be the cost of (a) processing (b) reporting on the questionnaire?
8.	How many man-months of employment will be created by this project?
9.	Will a report be produced and, if so (a) on what date (b) to whom will it be sent (c) by what means will the architects completing the questionnaire become aware of the availability of the report (d) who will distribute it (e) will it be listed in the daily checklist of Canadian government publications?
10.	Approximately how many items are listed per annum in the daily checklist and what is the annual cost of a subscription to the checklist?
11.	Were all (a) provincial governments (b) provincial associations of architects, contacted before the form was compiled?
12.	Did all provincial governments and associations agree to the production of the questionnaire?

October 31, 1980

13.	Is any part of the control of the conduct or activity of the profession of architecture that is unique to this profession, considered a responsibility of the government?
14.	Is Alberta the only province in which architects are protected from completing such questionnaires by provincial legislation?
15.	Did any person in the profession request the indepth knowledge of the expertise available in Canada and, if so, by whom was the request made and what was the capacity of that person?
16.	Is an architect allowed to report his expenditures in the same groupings in which they are recorded in his accounts?
17.	How many returns did not have question five completed in precisely the form requested?
18.	Was there any prior warning to architects that they might be expected to complete such a form?
19.	Was there any letter of explanation sent to architects to advise them for what reason such a form was considered necessary?
20.	Will Statistics Canada have access to the individual tax returns of architects and, if so (a) on what date (b) will architects be made aware of such a request?
21.	In what manner was the language of the architect determined?
22.	Were English language forms, without accompanying French language forms, sent to architects in the province of Quebec and, if so, for what reason?
23.	What professional groups received similar questionnaires in 1977?
24.	What professional groups received similar questionnaires in 1978?
25.	What professional groups will be questioned in 1979?


David Michael Collenette: I am informed by Statistics Canada and the Department of Justice as follows: Statistics Canada reports the following:
1.	Yes, the "Survey of the Offices of Architects, 1977" was issued by Statistics Canada.
(a)	This profession forms one of the survey responsibilities of the merchandising and services division at Statistics Canada.
(b)	This survey is made in order to provide the profession as well as the Department of Industry, Trade and Commerce with more detailed information. There are also requirements for this information for the system of national accounts division at Statistics Canada.
(c)	Once the information is received it is aggregated, analysed and published.
(d)	The questionnaire was sent to all architectural practices.
(e)	1,707.
2.	(a) No. One questionnaire per partnership had to be
completed.
(b) No.
3.	(a) At the close of the survey, 1,648 responses had been
received.
(b) Less than 10 per cent included an unanswered question.
4.	The penalty for not returning the questionnaire (i.e., 'refusing or neglecting to answer') is a fine not exceeding five hundred dollars or imprisonment for a term not exceeding three months or both. No penalty is imposed if one or more of the questions is unanswered.
Order Paper Questions
5.	No.
6.	The cost of producing the questionnaire was approximately $2,000.
7.	(a) and (b) The estimated cost of processing and reporting on the questionnaire was $43,000.
8.	The number of person-months created by this project was 12.
9. (a), (b), (c) A report was produced in June, 1979. Reports were sent to the Royal Architectural Institute of Canada, L'Ordre des Architectes and the Department of Industry, Trade and Commerce. Architects who had completed the questionnaire were notified of the availability of the report through their associations. It also may be requested directly from Statistics Canada.
(d) and (e) The distribution was made by Statistics Canada. The report was listed in the Statistics Canada Daily Bulletin.
10.	The checklist is a Department of Supply and Services publication. Due to budgetary cutbacks the checklist is now produced weekly. Approximately 4,000 items are listed per annum and the cost is $52 per year per subscription.
11.	(a) Provincial governments were not contacted directly
before the form was compiled but representatives of provincial governments in attendance at the federal-provincial conference in May, 1977, were informed that the survey was planned for 1978. Subsequently, an agreement was arranged to exchange information with the Alberta Bureau of Statistics.
(b) Yes.
12.	(a) See answer to 11(a).
(b) All provincial associations of architects agreed to the production of the questionnaire.
13.	See Justice's reply.
14.	Statistics Canada is not aware of the existence of such provincial legislation. The agreement with Alberta stipulates that any firm which does not wish Statistics Canada to share information with the province of Alberta concerning that firm, must say so in writing to Statistics Canada. No details of this firm would then be released to the Alberta Bureau of Statistics. (This information is printed on the questionnaire).
15.	The Royal Architectural Institute of Canada, L'Ordre des Architectes du Quebec and the Ontario Architect Association expressed interest in the extent of architectural expertise available in Canada. Requests were not received from individuals.
16.	Yes.
17.	Less than 10 per cent of returns did not have question 5 completed in precisely the form requested.
18.	The Royal Architectural Institute of Canada contacted all component associations in December, 1977, to announce the forthcoming survey. Associations were informed of the mail-our date in March, 1978, and were requested to inform their members. In addition, 32 firms randomly selected across

Order Paper Questions
the country were advised of the proposed survey and sent an early draft questionnaire for their comments.
19.	No. The objectives of the survey were printed directly on the form.
20.	(a) The Statistics Act, 1971, section 23, provides Statistics Canada access to income tax returns. For the calendar year 1977, returns are available from September, 1978, onwards.
(b) Architects will be informed only on request.
21.	The language of the architect was determined by matching the list supplied by the associations against the business register. Where a language indicator was available on the register, it was used.
22.	No. When a language indicator was not available, firms in Quebec were sent both a French and an English form, as were firms in Quebec which appeared either on the association's list or the business register but not on both.
23.	In so far as Statistics Canada is concerned: none.
24.	In so far as Statistics Canada is concerned: none.
25.	Engineering and scientific services.
Department of Justice reports the following: 13. No.


Mr. Flis: 1.	What amount was spent by the government for the school year (a) September, 1977 to June, 1978 (b) September, 1978 to June, 1979 for (i) French language instruction (ii) heritage language instruction (iii) teacher training (iv) elementary education (v) secondary education (vi) post secondary education?
2.	What percentage of the funds allocated towards education were spent for the purpose intended?
3.	What accountability do the provinces give to the government as to the expenditure of such moneys?


Mr. Peter Stollery (Parliamentary Secretary to Secretary of State and Minister of Communications):: Note: All amounts in the following text are provided by federal fiscal year (April 1, 1977 to March 31, 1978, and April 1, 1978, to March 31, 1979) which is the basis of accounting for such expenditures.
1. (i) The amounts contributed by the Government of Canada to the provinces in support of French under official languages in education excluding teacher training were:
French as a second French as a minority
language	language	Total1977- 78	$17,587,909	$43,839,327	61,427,2361978- 79	21,355,151	50,690,274	72,045,425
In addition, the sums of $18,300,950 and $19,925,362 were contributed for programs of support towards French as a second language, French as a minority language, and English as a second language in 1977-78 and 1978-79 respectively. These figures cannot be broken down into separate categories of minority language education and second language instruction.
(ii)	The amounts contributed by the Government of Canada to voluntary ethno-cultural organizations for heritage language instruction including expenditures for learning aids were:
1977-	78	SI,011,0001978-	79	1,097,520
These expenditures were essentially made at the elementary level.
(iii)	The amounts contributed by the Government of Canada to the province under the official languages in education programs and to voluntary ethno-cultural organizations under the multicul-turalism programs for teacher training were:
1977-	78	$3,299,6401978-	79	3,473,390(iv)	(v) Statistics for official languages in education are not maintained in a manner which would enable the department to provide data on contributions to the provinces in respect of elementary and secondary levels separately without an inordinate amount of work, time, and cost. Total combined contributions to provinces for elementary and secondary levels of education under official language in education were:1977- 78	$160,312,4511978- 79	142,009,689
See (ii) for heritage language training.
(vi) The amounts contributed by the Government of Canada to the provinces at the post-secondary level under the official languages in education program were:
1977- 78	$46,468,131
1978- 79	50,091,519
The amounts transferred to the provinces for post secondary education under established programs financing in tax and cash were:
1977- 78	$2,114,870,000
1978- 79	2,422,097,000
Note 1: For parts IV, V, VI of question 1 the following amounts were contributed under official languages in education for minority official language education and second language instruction but cannot be attributed to any specific level of the education system.
1977- 78	$15,895,023
1978- 79	17,869,194
2. It is judged that 100 per cent of the funds provided to the provinces by the Government of Canada under official languages in education was spent for the purposes intended. The formula payments contributions, which are based upon information provided by Statistics Canada regarding student enrolments and provincial costs of education, in fact, constitute
October 31, 1980

partial reimbursements for costs already incurred by the provincial governments. Contributions for non-formula programs take the form of reimbursements for provincial claims which are submitted in accordance with predetermined guidelines for expenses paid for the programs involved. Similarly it is judged that 100 per cent of the funds provided to voluntary ethno-cultural organizations by the Government of Canada under the multiculturalism programs was spent for the purposes intended. This information is not available for transfers under established programs financing.
3.	As stated in question 2, for official languages in education, the formula payment contributions were paid to the provinces, based upon information provided by Statistics Canada. More specifically, data regarding student enrolments in minority and second official language programs and the provincial per student costs of education at the elementary and secondary levels, and the actual provincial operating grant to eligible institutions at the post-secondary level are used to calculate payments. The federal contributions represent a proportion of costs already incurred by the provincial governments in providing minority official language education and second language instruction, and no further accountability is provided. Payments for non-formula programs are paid on a reimbursement basis based on provincial claims for costs incurred. Payments under the multiculturalism program are made on a grant basis and are not further accountable. The legislation governing the transfers under the established programs financing arrangements does not require provincial governments to account to the federal government concerning the expenditure of funds.


Mr. Crosby: Was the study and master plan for the port of Halifax commissioned by the Canadian Marine Transportation Administration in September-October of 1979 completed and (a) if so, on what date will it be made available to persons interested in the port (b) if not, on what date will it be completed?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: As far as the National Harbours Board is concerned: No.
(a)	Not applicable.
(b)	Early November, 1980.


David Michael Collenette: Madam Speaker, if question No. 765 could be an order for return, this return would be tabled immediately.
Science and Technology


Mr. Shields: Since August 1, 1978, how many (a) administrative (b) policy consultants were under contract to the Department of the Secretary of State and/or any boards, commissions or corporations reporting to the minister and, in each case, what amount was paid to them?
Return tabled.


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


Madam Speaker:: Is this agreed?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Mr. Simon de Jong (Regina East) moved:: That this House condemns the government for having failed to harness the energies and talents of Canada's scientific and technological community in the development of an industrial strategy which would draw on Canada's traditional resource base, on our manufacturing strength, and on our new high technology industries.
He said: Madam Speaker, when preparing this motion our caucus stood back and had an over-all look at the ups and downs of the Canadian economy over the last decade or so, and the dismal inability of the budget which was presented earlier this week to come to terms effectively with the problems with which the people of this country have been trying to wrestle and find solutions. Surely we do have one of the best endowed countries in terms of resources and wealth in the world today. Surely we have a country which, compared with most other countries in the world, is one of the least developed.
We have a very young population. Our development is only 100 or less years, and we have a very thin population. There is still very, very much to be done. Yet what we have found in the last decade or so is an unemployment level which is unacceptable. It is even higher than those in more developed countries with larger populations and fewer resources. 1 think of the Scandinavian countries, Great Britain, Holland, Germany, etc. We must wonder how it is possible that a country with so much going for it can find itself in such a crippled, weak, and second-class position. Obviously the government seated opposite, which is the party which has dominated this country for the last two decades, must surely accept the major responsibility for the fact that the strength of this country has

October 31, 1980
Science and Technology
been drained and has not been utilized, co-ordinated, or brought together to bring solutions to the problems we face.
One of the important areas of the failure of this government is that of research and development, and the failure to utilize the technological know-how of our trained university graduates. In fact, over the last decade or so we have seen continuous erosion as young people, not being able to find employment in this country, leave it and go mainly to the United States. That represents a loss of our public investment in their education. If we are going to stop the erosion of Canada's manufacturing base and improve our competitive position in the international high technological market, it is essential that we have a coherent policy on research and development.
The benefits of research and development have been well documented. They include increased employment, greater output of growth in that particular sector of the economy, improved market penetration, and lower costs to the consumer for goods with high research and development components. In a study of the performance of Canadian manufacturing industries between 1961 and 1974 the Ministry of State for Science and Technology found that research and development intensive industries had almost triple the growth rate, twice the productivity, significantly greater rates of employment and less inflation in prices than industries not engaged in research and development. It has been shown as well that for every dollar spent on research and development a return of at least $30 is produced.
Yet despite the fact that even government studies have shown the effectiveness and importance of research and development, the record of this government in that area is dismal. It is cynical. If I were a little more paranoid and thought in terms of international espionage, I would come to the conclusion that this government has deliberately sabotaged research and development in this country and weakened this country's position. How cynical this government is!
In 1968 the federal cabinet set a goal for expenditure on research and development of 2 per cent of the gross national product. The Lamontagne Senate committee in 1972 recommended that 2.5 per cent of the gross national product go to research and development by 1978. In actual fact, in that decade research and development in this country fell by some 36 per cent. Again we find that in June of 1978, the then minister in charge, Judd Buchanan, set a goal of 1.5 per cent by 1983, and this year, lo and behold, in the Speech from the Throne we have another great Liberal promise that by 1985 we will achieve the goal of 1.5 per cent. Consistently the government has paid lip service, and that is about it. That is in fact what the Liberals are known for, their lips. It is all promises and no action. The present budget is a great example of this.
What is it in the present budget that was presented to us which would bring us one step closer to the stated goal? There are no plans in place, there is no strategy outlined. It is a continuation of the same policies that this government has
followed for years and years-that is, the policy of 'do nothing', to allow the resources of this country to be shipped out, to allow the continuation of high industry and high technology being imported into this country, and to allow the continued weakening of this country, deepening our inability to make it on our own.


An hon. Member:: And they call themselves Canadians.


Simon Leendert de Jong: All we have is the trappings. Yes, we have a flag, and yes, we are going to have the constitution, but the guts of the country have been sold, shipped out and drained off. We do not have the ability to determine our own economic destiny. We do not have the ability to train and employ our young people in the field of technology. All we have is lip service.
The major problem in our country today, in terms of achieving the goal of 1.5 per cent of the gross national product for research and development-which I think is even too low- is our industrial make-up. The fact is that most of the important industries in this country are nothing but branch plants, that most of the important industry in this country, such as the manufacturing industry, is controlled from outside this country. The multinationals in this country have a dismal record of research and development. It is not necessarily the fact that we have not had sufficient public funds going into this area that has caused the problem. In fact on that score we do relatively the same as other countries. But the fact is that the private sector has not been able to pull its weight in terms of research and development.
It is not the Canadian owned public sector, it is the multinational sector of the private industry that has not pulled its weight. This was admitted this year in June by the Minister of State for Science and Technology (Mr. Roberts) when he spoke to the Canadian Manufacturers' Association and said that if we are to meet our medium-term objective in research and development it will have to be through the efforts of foreign-controlled companies in this country. He went on to suggest that it will require a $2.4 billion increase in outlays on research and development, most of which will have to come from the foreign private sector. Foreign ownership is highest in Canada's research intensive industries, and it is these industries that have the highest profits. In other words, the industries which show the highest profits in this country are foreign owned and make the least contribution to research and development.


Some hon. Members:: Shame!


Simon Leendert de Jong: If we had a proper research and development program we would not have the unemployment problem or the inflation problem we have in this country. For example, Mr. Pocock, who was research director of the Lamontagne Senate Committee on Research and Development, suggested that if Canada had a research and development figure of 1.5 per cent of the gross national product in 1978,-and assuming that in order to reach that figure, 85 per cent of it would have come from the private industry-there would have been an extra
October 31, 1980

10,600 jobs for scientists and engineers, we would have had a total of 1.52 million new jobs created in the new industrial activities, and we would have had an extra $15.4 billion in exports. It would have solved our balance of payments problems and our unemployment problems.
Government studies have shown this, so why the inaction? Why not look at the obvious facts that all the highly paid mandarins and research people whom the government has hired have been telling it over all these years? Yet there has been no action, no results. Indeed, there has been a continuation of the 'do nothing' government. If anything, the Trudeau years will be remembered as the years when the essence of this country was drained, when the strength of this country was drained, making Canada more and more impotent.
There is nothing in the budget on how to deal with multinationals, how to force them to invest a decent amount of money in research and development in this country. There is talk, as there is always from across the benches. It is always being studied, it is always being considered. We have another committee, most probably a parliamentary committee or a royal commission, but no further action. There is talk about some tax incentives to industry. Already we have some very decent tax incentives for industry in order to encourage research and development, but they have not worked. The main reason is that the multinationals do not need them. They have access to cheap technology from their mother company and from their head office. The Canadian companies, the smaller businesses, which need it, very often do not have the income to benefit from the tax deductions.
What this party suggests is that more direct grants be made to Canadian industry and Canadian business and that the government and private industry make a deal, saying, "We will give you X amount of money to develop new technologies, provided that you guarantee that the jobs remain in this country." In other words, this party suggests that the government stop handing out the money, as they all too often do, and start making public money useful and working for the benefit of this country. All the money that has gone down the drain in this area, if used in an enlightened way, could have produced a much stronger research and development component in this country.
We object to tax incentives for research and development. I think there are wiser and better ways of doing it. Also, studies have shown that tax incentives will not work and have not worked in the past. It is shown as well that when you create tax incentives, essentially employment is created for lawyers and tax experts, and in too many cases employees, who would normally be doing other work in the company such as quality control, all at once are put on the payroll of the research and development section. In other words, there are too many loopholes and you do not achieve the desired affect.
We are suggesting, first, that direct grants be made to industries; and second, that we use a little bit of coercive power on the multinationals, in other words, that the government put into place an over-all tax and use that money in a special fund for research and development. Any company should be able to
Science and Technology
draw on that fund, provided again that they do the research and development in Canada and keep it here.
It is often asked: what can we do? We are such a small country, we just do not have the resources or the population base to produce effectively in this country a proper research and development component. Let me cite again from the research study by Mr. Pocock of the Lamontagne committee. He compared us with a group of countries which he called Norden-consisting of Norway, Sweden, Denmark and Finland-in 1975. The total population of the northern group was 27.4 million. Canada's population at the time was 23.3 million which was relatively comparable. They have the same topography, the same climate, and some of the same resources as we do here. Yet the industries in the Norden countries in 1975 spent $1.26 billion in U.S. dollars on research and development. What private industry in Canada spent at that time was only $681 million, roughly half of what was spent in those countries. The labour force employed in those countries in industry was some 33.4 per cent. Here it was only 26.6 per cent of our labour force. Smaller countries like Norway, Sweden and Denmark are able to do it. Why can we not do it here?


Mr. Deans:: There is a lack of initiative.


Simon Leendert de Jong: There is a lack of initiative, foresight and imagination.


Ian Deans: There is a lack of caring.


Simon Leendert de Jong: There is nothing in the budget which deals with how we will force the multinationals to do proper research and development in the country. The budget totally ignores the fact that any viable national economic strategy must emphasize two closely related objectives. The first would be the policies which must be formulated to channel capital and human resources together so that we can start tackling the technological problems this country faces, to channel capital and human resources together to bring business, labour, universities and government together to work out and develop coherent research and development policies and initiatives. Second, in order to fulfil the competitive requirements for improving Canada's industrial productivity, efficiency and employment, the federal government must through its policies vigorously promote the expansion of indigenous high technology manufacturing and the research efforts of our universities.
Specifically, the budget fails to address three key questions. What physical incentives are most likely to increase industrial research and development and technological innovation in Canada? How can government procurement be utilized more effectively to increase the demand for Canada's technology? How can we increase the export sales of Canadian made technology and reduce our traditional and very costly dependence on foreign imported technology?
I have been in touch with the Canadian Medical Research Council and it is very concerned about the implications of the
4314

Science and Technology
budget. The council would like to know if the government will adopt the medical research proposals for support of biomedical research in Canada, and if so, what level of support will the MRC receive, particularly in view of the proposed spending restraints in the social affairs envelope. There were some ominous noises by the Minister of Finance about the social affairs envelope. There were suggestions of moneys being saved.
Concerning the agreements with the provinces on cost-sharing, especially of higher education in the universities, the Prime Minister (Mr. Trudeau) in 1976 promised that these programs were permanent, and if they were to be changed, they would only be changed subject to three years' notice. No three years' notice has been given, but it sounds from the budget as if these agreements will be changed and that the universities will end up with the short end of the stick. We cannot afford this any more. We have had too much of a brain drain already. Our universities are at the end of their ropes. They cannot continue with further cutbacks and slashes in their budgets. Young Canadians going into universities see no promise for employment at the end of the road. That is why they are now either not doing postgraduate studies, or are leaving the country. This drain must be stopped and stopped fast, if we are to meet the requirements five or ten years down the line, if we are to meet the requirements for trained people. The budget gives no assurances whatsoever that the drain will be stopped, that the government is prepared to tackle this problem and come up with some decent solutions. There is no hope in the budget at all. Throughout the universities across the country there is uncertainty.
It is not that we do not need trained people coming out of the universities. For example, 1 have been quite concerned with the whole area of pesticides and the testing thereof. Recently it has come to light that a number of the major American chemical testing firms that test our pesticides have deliberately falsified their results. There is a tremendous need for trained toxicologists in this particular field. I brought this matter to the attention of the government and they said, "Oh, no, we cannot do it. It will cost at least $8 million in core funding for the next five years; it is an impossible task". What a phony answer; what a phony answer!
There are decent programs throughout the country which are starving for funds. They are not asking for $8 million. Scientists at the University of Ottawa are trying to get a centre of toxicology together. They have their building, yet they have spent the last year or so scraping here and there for funding. They need some $30,000 to $40,000 to hire a director. There is no money for this, so the program is idle. It is not that we do not need toxicologists. Hundreds of new chemicals enter the market every year. We know a lot of these chemicals are not properly tested. We do not know what effects they are having on the health and welfare of Canadians. They must definitely be tested, yet the government opposite will not give the University of Ottawa some $30,000 to go on with the job of training toxicologists so that, five or six years down the road, there will be some trained toxicologists in the country
who can at least deal with the amount of chemicals entering the market. It is not that we will not pay the price. Of course we will pay the price. Every time there is Love Canal, or a thalidomide enters the market, somebody must pay. Generally it ends up that the government opposite is quite willing to hand out public funds to pay for mistakes, as it has done over and over again.
It is the insanity of the government opposite that it is not willing to spend a dollar today in order to save some $40 and $50 down the road. It is crazy thinking. It is thinking which arises because there is no coherent plan or policy. There is no coherent five-year projection in terms of what is needed and what is coming down the road. It is a government that reacts, reacts all the time.
I remember sitting in the Standing Committee on Communications and Culture when the estimates were before it. I indicated to the minister in charge that there were various new technologies coming down the road. I indicated that they would have a tremendous impact on the work force and on Canadian people generally. I asked him what was being done in order to direct this type of technological innovation and make certain that it benefited people rather than people simply reacting to it and it creating havoc in our society. The minister said-and I think it sums up the philosophy of the whole Liberal party and the Liberal government-"our role is not to initiate, our role is but to react". In other words, those particular technological innovations will come down the line, they will affect people, they will disrupt the work force and people's lives, and then the government will try to pick up the pieces. Surely in these times an ounce of prevention is what is needed.


An hon. Member:: They would rather have beaver and goose ads.


Simon Leendert de Jong: determining and shaping its own destiny. We need a national science and industrial policy.
We must put some of the things together and develop some coherent planning. We need a Department of Science and Technology with a full-time minister. I congratulate the Conservatives, at least they had a full-time minister. We do not, or at least the present government does not.


An hon. Member:: Watch those Freudian slips.


Simon Leendert de Jong: When I said "we" I meant this country. We do not have a full-time minister. He is running off to England and doing other things. We need a Department of Science and Technology which can begin to co-ordinate all the research done in various government departments. We do not have a minister who is on top of it. We do not have a department which is on top of it. Some research gets done in health, agriculture, and some here and some there. There is duplication and wastage.


Stanley Howard Knowles: And some not at all.


Simon Leendert de Jong: Then there are other times when the budget is cut and, of course, research is one of the first things which gets cut. There is no priority and no sense of wholeness.
I would like to quote from Dr. B. Cinader, who is from the University of Toronto. He describes what is really needed in the area of research and development. He says:
In short, one needs to initiate a process by which industrial innovation and applied research are defined by long-term national objectives, and in which strategy can be refined through processes of model building and of projections of future supplies in raw materials and international and national demands for them. The process of determining attainability of objectives and of choosing, ultimately, the paths by which the scientific components of national objectives is to be reached, will clearly have an important formative effect on our vision of Canada and will help us develop our national aspiration for the future.
That is what a national policy should be. It should have some notion of the future, some objectives regarding what we can be and how to get there, instead of floundering around as the members opposite do all too often.
I am reminded of a little verse by Melanie, who was one of the popular singers of the seventies. She had a very nice line, which was "You only pay a nickel, but you want a dollar song." That sums up the government opposite.
In closing I would like to quote T. S. Eliot's somewhat pessimistic but I think very accurate poem, "The Hollow Men." It aptly describes the record of the government. Here are a few of the key verses:
We are the hollow men We are the stuffed men Leaning together Headpiece filled with straw. Alas!
Our dried voices, when We whisper together Are quiet and meaningless As wind in dry grass Or rats' feet over broken glass
Science and Technology
In our dry cellar
Shape without form, shade without colour.
Paralysed force, gesture without motion;
Those who have crossed
With direct eyes, to death's other Kingdom
Remember us-if at all-not as lost
Violent souls, but only
As the hollow men
The stuffed men.
Mr. Speaker, the way in which T. S. Eliot ends his poem is again very apt when applied to the government opposite. It calls attention to the difference between the lip service and the promises, the fancy dancing, which the members opposite want to do, and the actual product-the end results. He ends the poem this way:
Between the idea And the reality Between the motion And the act Falls the Shadow
Maybe instead of "Falls the Shadow" we should say "Falls the Liberal party".
The poem continues:
Between the conception And the creation Between the emotion And the response Falls the Shadow Between the desire And the spasm Between the potency And the existence Between the essence And the descent Falls the Shadow
There falls ten, 20-how many years of Liberal governments' wasted opportunities, and with it the sapping of our strength. Mr. Speaker, we have moved this motion because of what we feel has been a total neglect of our strength, our human strength, our manufacturing and resource strength. It is a motion which condemns this government and it must surely stand and be held accountable for that.


Some hon. Members:: Hear, hear!


David Michael Collenette: Mr. Speaker, there have been discussions among the parties with respect to allowing the Minister of State for Science and Technology (Mr. Roberts) to speak a little later this afternoon. He is now on his way back to Ottawa. So we have agreed to call it one o'clock now.


Stanley Howard Knowles: One o'clock.


The Acting Speaker (Mr. Blaker):: Is it agreed?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Blaker):: It is so ordered.

October 31, 1980
Science and Technology
It being one o'clock I do now leave the chair until two o'clock p.m.
At 12.56 p.m. the Elouse took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Mr. Gordon Gilchrist (Scarborough East):: Mr. Speaker, the official opposition is, of course, very pleased to participate in the debate today on research and development. I would like to say debate, but perhaps the word "charade" would be more appropriate. We welcome any opportunity to prod, push and shove a reluctant government closer to the realization of the vital need to overhaul its attitude to research and development drastically and its priorities in spending and investing in technological upgrading.
I say investing rather than spending because there is a vast difference between spending massive amounts, multimillions of dollars on ongoing support programs, schemes and make-work situations, as opposed to heavily investing in legitimate job creation of an ongoing nature. By legitimate job-creating programs, I refer to those that result in lifelong career opportunities for young Canadians and long-term job opportunities for all Canadians in an industrial society which can take its place among the high technology, industrial societies of the world and not be gunned down by the Japanese, Germans, French and Americans, our industrial competitors who can out-produce us and undercut us in price and innovativeness.
Recent newspapers indicate the high priority that research is getting with such headlines as "Medical Researchers Issue Urgent Call for Funds", "Scientists Urged to Fight", "Ottawa Plans to Move Soon to Spur Research and Development", and "It's High Noon for High Technology". All these articles urge the government to get with it and develop our industrial capability. But what is happening to Canada today is what has been happening to Canada for years. This government has been warned for over a decade, by extremely knowledgeable and concerned scientists and industrialists, that our resource export strategy, if I could call it a strategy, unreinforced by higher technology processing, would cost us dearly in future years. At best we would become laminaters of wood and pumpers of water. That is one step up from the hewers of wood and drawers of water. One step up is about where we are.
Have you ever visited, Mr. Speaker, Upper Canada Village? Many Canadians visit Upper Canada Village each year to view the grain mills grinding wheat, the spinning wheels spinning yarn, and the saw mills cutting logs into rough boards. We go there to see how things were done in Canada 100 or 200 years ago. Things were simple and straightforward then, and we chuckle to ourselves and marvel at the slowness of the operations and the patience of the craftspeople of the day. We also recognize that such operations could not exist
and compete with the much faster and more efficient operations of today in milling, spinning, and lumber. But I wonder how many of us realize that if we walked into many of Canada's manufacturing plants today we would be looking at operations designed and carried on 50 or 100 years ago. Some of the equipment is bigger and faster, but the processes themselves are technologies of the past century. They are technologies which would be better passed on to Third World countries with their lower labour rates. Like the spinners and weavers of Upper Canada Village, these technologies are the slow and obsolete processes of the nineteenth century in a world which has almost passed out of the twentieth century.
And how do we get away with such obsolete planning and processing, backed up by obsolete government thinking? Why is there not a demand by Canadians for action to make Canada the most resource rich country in the world, the world leader in technology? Certainly Canada's scientists have spelled it out for us, both the pitfalls and the benefits.
It is very clear that Canadians do not realize that their high standard of living, bought with money raised through the sale of natural resources, is declining and will continue to decline as the world passes, in fact, rockets by us, with technological development of new products and processes which will make Canadian industry obsolete and deprive us of jobs.
Now this is not long-range future stuff. This is the stuff of the 1990s, the 1980s and even today. It is the provable, urgent message which industrialists, scientists, economists and researchers from all facets of Canadian industry have been telling this government for over a decade. To enjoy the benefits of higher technological manufacturing, you must be prepared to invest in research. From research comes design, invention, and innovation. From these come useful products and processes which will not only benefit Canadians through job creation, but which can be sold to other nations for other benefits. This means fewer imported goods, more exported goods; improved balance of payments for Canada, investment opportunities for Canadians, and career opportunities for young Canadians entering the work force. High technology companies do all these things. They have a higher rate of growth in employment than low research industries. They have higher productivity and they have annual price increases about half as great as those of low technology companies, so they benefit the consumers as well.
Knowing all these facts, what has the Trudeau government done about leading Canada forward through the decade of the seventies to world leadership in technology? Surely Canada's all-time biggest spender would be able to invest handsomely in vital research? For a man who claims to have a vision for Canada, perhaps a socialist one, but a vision nevertheless, surely his vision would include funding the most obvious and necessary component for national and social benefit, namely, research.
But instead, let us look at the record. In 1967 Canada invested 1.4 per cent of its gross national product in research
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and development. In 1968 the new Trudeau government established a goal of 2 per cent GNP, definitely good news. But a decade later where has all the talk led us? We now have a new low of less than 1 per cent, .9 per cent to be exact, and we find ourselves on a par with other non-industrial nations like Ireland, Italy, and Iceland.
Now what is the government saying? The new minister of state for science, technology, environmental and constitutional affairs is once again talking sweet talk about new and high goals. By 1985, he says, we will be spending 1.5 per cent of GNP on research. But the federal government accounts for less than one third of total research spending in Canada. Provincial governments do some, but it is the private sector which must carry the load, and foreign firms, which used to do more research than Canadian firms, since 1975 do less. They are not treating us as sales opportunities for their foreign bases and they do not do research in Canada to a sufficient degree. How will the government encourage them or force them to do their fair share of research and grant world product mandate to Canada?
And even if we did reach 1.5 per cent by 1985, and I say to the minister we will not, where will that put us relative to our international competitors? Already our biggest competitor to the south is at 2.4 per cent. West Germany is at about 2.2 per cent, and Japan the world leader in technology is over 2 per cent and aiming to double that by 1985. So you see, Mr. Speaker, even if this government did reach its target-and 1 repeat that it will not-it will be too little and too late.
You will recall, Mr. Speaker, that the ill-fated Conservative government-by that I mean ill-fated for Canada-had set a target of 2.5 per cent research spending. With the serious commitment of government, backed by tax incentives, grants and strong government purchasing policies, that figure could be reached. It requires the understanding and the will of government to do it, not just to talk about it.
Take, for example, the massive contribution which research has made to the petroleum industry in enhanced recovery techniques. Instead of being able to extract about 20 per cent from an average oil well, we can now get about 35 per cent. It leaves a lot of oil in the ground, but it gets a lot more out, and all of that as a result of research. Think what that does for Canada's energy future, and think what such an increase in wealth accrues to Canada as a result of direct research.
Earlier I mentioned Japan's 1985 objective of 4 per cent research investing. Let us look at that country's progress over the past 35 years since its devastation by military defeat. Let me cite some examples given to a high technology conference here in Ottawa-a conference which, unfortunately, the minister did not attend-where 200 of the country's highest technology presidents and chief executives talked about the problems of technology in Canada. At that conference the minister might have learned something about the desperate need for technology in Canada. Mr. Walter Light, President of Northern Telecom, Canada's largest private research and development establishment, spoke at that conference. He is a man who, for years, has been trying to get this government to see
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the errors of its ways and its attitudes toward research. He gave us some very good examples of Japanese programs.
Japan, rising from the depths of almost total industrial devastation, is in the process of surpassing the United States as an industrial power. Think about that. Japan, a nation virtually without natural resources, a nation no bigger than the state of Montana and with only half the population of the U.S. is, because of determination and technological development, about to surpass the world's industrial leader.
Even though Japan's unionized labour costs have risen to par with those of the U.S., Japanese companies have consistently raised productivity and expanded their ability to produce quality products at the most competitive prices in the world, using our natural resources.
So, all you trade unionists in the NDP take note. We are selling our coal, steel, nickel and aluminum to Japan at an average price of about 50 cents a pound, and we are buying back Toyotas and Datsuns at about $3 a pound and more. It is that six, seven and eight times multiplier which is the job-creation program of the present government. That is what this government is doing in job creation. It is creating many jobs, jobs in Japan, Germany, Sweden and the United States. That is not just illogical, it is not just lack of direction and leadership, it is just plain stupid. It is bungling and inept government. It is a government which is selling Canada short.
Japan is now producing ten million cars annually, about 100 times what it produced 20 years ago and the equal of a good year in the United States.
What country do you think of, Mr. Speaker, when you think of precision tools and equipment, or watches? Switzerland, I suggest. Well, last year Japan produced ten million more watches than the Swiss. This is a classic example of how quickly a country can lose its world leadership if it ignores the new electronic technologies. The Japanese have long since overtaken and replaced the United States as the world leader in television and radio production. Japanese steel plants have the same capacity as the U.S. and almost as much as the entire European common market, and they are so technologically sophisticated that the U.S. uses Japanese standards as the base for measuring its trigger price for dumping.
In 1978, Japanese investment in new plant and equipment equalled that of the United States, but remember, with half the population the investment per capita was twice that of the U.S., and in the early 1980s it will surpass the U.S. in total research and development.
Very soon Japan will be a world leader in computers as it is in motorcycles, machine tools, copying machines, semi-conductors and even, perish the thought, snowmobiles.
What do we have to do to get this government to listen, to think and to discharge its duty and responsibility to lead Canada back into the technological age, to make Canada technologically competent, competitive, independent and capable of developing its own vast resources in order to sell

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finished products to the world and lower its dependence and vulnerability to world prices?
Will we forever maintain a back seat in the growth technologies of electronics and biotechnologies? These are not mysterious mumbo-jumbo words and unattainable objectives for a land such as Canada. They do not require large industrial complexes and vast populations. What they do call for is commitment; long-term, steady, determined commitment and large investments in money, as well as trained people and specialized industrialized resources. They are perfect for a resource rich, educated and skilled population such as Canada's.
In order to obtain large quantities of investment dollars, Canada should employ the same techniques it has used so effectively on frontier oil drilling and film making. Why should there not be a "super depletion" type of tax incentive for people willing to invest in high risk high technology companies just as in high risk drilling and high risk movie making? Certainly many films have recently been made in Canada, and not even this government could be so blind as to see the far greater benefits to Canada in having its citizens invest in high technology companies rather than in movie making.
Biotechnology is another new buzz word, a research field pregnant with possibilities for energy development, new manufacturing processes and greatly increased agricultural production. Canada should be getting in on the ground floor in order to enjoy the excellent returns just a few years down the road. Unlike unemployment insurance funds spent this year, next year and every year as an ongoing cost and burden to taxpayers of the future, biotechnology investment will return the money invested 20, 30 and 50-fold, while providing ongoing jobs to coming generations of Canadians.
Is this too much to ask of government? Is it too much to ask of the members opposite to take the time to acquaint themselves with the facts, the appalling record of Liberal government performance to date and the unquestioned opportunities which lie ahead, if we have the will and the resolve to grasp them? Well, regrettably, Mr. Speaker, it probably is too much to ask. This government is too involved with constitutional bickering, resource stealing and land grabbing, in between rounds of fighting with all the provinces and regions of Canada.
If we look at the record of the past Liberal decade we can read clearly of the decline of a once dynamic nation which could have had the world by the tail as far as economic prosperity is concerned. Instead, thanks to non-leadership, Canada is going backwards in technology, productivity, and relative standard of living. We are going upwards, boy are we going upwards, in government wasted spending, in annual deficits and in national indebtedness. All of these problems could be greatly aided by a serious effort to raise our level of technological competence.
We could start by having a full-time minister of science and technology, a full-time senior minister who understood, believed in, and would fight to convince a tired and
unimaginative cabinet of the desperate need for greatly increased funding of vitally needed research. The economic and social benefits to Canada would be just a few short years down the road, and they would be big benefits.
It is true they would come just too late to help this governm-nent survive the next election because research opportunities in Canada, when clearly plotted, show that a research company operates for five to eight years at a break even or loss position. However, the benefits beyond the eight years are clearly in the many times multiplier in profit generation for this nation.
If the government could see its way clear to fund past the next election, to give research and scientists a long-range opportunity to launch into these vitally needed long-term scientific projects, there would be great benefits down the road. While the government may not win the next election, it would certainly have the respect of the nation in that area, something which it does not have today.


Hon. John Roberts (Minister of State for Science and Technology and Minister of the Environment):: Mr. Speaker, I obviously welcome the opportunity to take part in this debate. I am pleased to see the motion put down. It gives us a chance to discuss matters which are of very considerable importance to this country and which are not discussed sufficiently in the House.
I was going to congratulate, and I still will congratulate, the hon. member who spoke before me for the generally serious tone with which he treated the issue until the last few moments of his speech. He knows full well we have not been distracted by our constitutional concern and other matters that are of importance in this government's policies, matters which are of concern and importance to this country. He knows we have not been distracted by those necessary efforts from moving ahead to meet the kinds of concerns which he has rightly expressed, the need to move towards a well based, long-ranging long-term economic, technological and science policy. He knows full well there are before cabinet for its consideration proposals from the Minister of Industry, Trade and Commerce (Mr. Gray) and myself to reach those objectives. He knows we are not distracted and, indeed, knows our record is one of considerable action.
I was a bit surprised when the hon. member suggested that the problem was not in defining the challenges, but in acting. He knows this government has acted. It has acted in expenditure terms far beyond the levels which the previous government, the Conservative government, had envisaged for this period. When he talks about inaction, if he thinks we have not responded, what must he think of the record of the previous government which, in comparison to ours, was a record of inaction and not providing sufficient funds for what is necessary to achieve? In a few moments I will detail in both absolute terms and percentage terms some of those expenditures.
I am sorry to say to my hon. friend opposite that I was not able to be here for his speech this morning. I was in the city of
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Quebec meeting with the provincial minister of the environment. I hurried back as soon as I could.
I know that on Fridays we often wax poetical in this House.
I gather there was a lot of poetry this morning, and he referred to us as hollow men. When I look at my colleagues, the Secretary of State (Mr. Fox), and the Minister of Transport (Mr. Pepin), I find it hard to believe that they are hollow men. When he refers to me as a hollow man, I accept it as a compliment.


Simon Leendert de Jong: Especially just after lunch.


John (Moody) Roberts: I was going to say that if we are poetical, I could have characterized his speech as one of "sound and fury signifying nothing". I gather I cannot say that. While there was considerable sound, there was not much fury. I look forward to reading his speech in Hansard. I have already been told some of the details of it.
1 would say this to the hon. member, and to the hon. member for Scarborough East (Mr. Gilchrist). There is common ground among us. There is a recognition of the importance of the problems. There is no doubt about the need for the definition of a long-term science industrial policy. There is no doubt that the present commitments in gross national product terms of the Canadian economy, to the support of research and development, are inadequate. There is no doubt in my mind that the private sector-both opposition parties mentioned that the multinationals are not pulling their weight in the area of research and development, and that is true-the private sector is not doing as much as we think it should.
The problem is not the definition of the problem; the problem is whether we are acting and whether we are responding. It is in that area that I differ with the arguments put forward by my two hon. friends opposite. They say, "Let's look at the facts", and that is exactly what I want to do this afternoon-look at the facts to see how we are responding. As I said earlier, our response far outpaces that of our predecessors so briefly in office.
We are firmly committed to raising the level of research and development in Canada and to using science and technology in the furtherance of our social and economic objectives. The target we have set for ourselves is 1.5 per cent of the gross national product. The hon. member for Scarborough East said that his party's target was 2.5 per cent at the end of the decade. The critical path for reaching that target at the end of the decade is the same as the critical path for reaching 1.5 per cent by mid-decade. That is our objective.
In judging the success of our policy it seems to me that two fairly objective tests can be applied. The first is to ask what has been happening in the economy generally as it relates to research and development and, more particularly, to technology-intensive industries. The second is to ask what the government has done to encourage and support those developments.
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There is evidence to suggest that the downwind trend in research and development expenditures as a percentage of gross national product has been arrested.
The Financial Post in its recent special report on science and technology estimates that spending for research and development by major Canadian firms will increase 17.5 per cent this year compared to 1979. Between 1977 and 1980, the Financial Post, although its data is partial, found an increase of 33.6 per cent in research and development employment and a 91 per cent increase in spending for research and development.
Developments in a variety of aircraft sectors where high technology is important are very encouraging. In the aircraft section, employment in Canadair since 1975 has risen from 1,800 to 6,300 persons, sales from $37 million to $135 million, and there are 183 firm orders for the Challenger aircraft.
At de Havilland, sales have increased from $29 million to $280 million, and employment has risen from 2,700 to over 5,000 people. The Dash-7 has found a steady market.
The next generation of STOL aircraft-the Dash-8-is being developed, and there are already over 100 orders for it. The government is supporting and will support the development of the Dash-8.
In the space sector, which not so long ago was non-existent in Canada, employment now amounts to 2,500 and output to $140 million. Both of these areas are expected to grow over the next several years.
The creation of a whole new service industry dedicated to the provision of resource management data based on remote sensing via satellite has been created. This industry is spread right across the country from Newfoundland to Vancouver.
The Telidon program has led to the creation of a whole new service industry for the provision of information for the Telidon system. Companies such as Infomart and Hempton have invested more than $6 million in the research and development necessary to develop and market the data base essential to the Telidon concept. These companies are also beginning to achieve export sales of expertise. It has encouraged established electronics companies such as Microtel Pacific, Bell Canada, Electrohome, Norpak and SED to invest several million dollars in the expansion of their product lines to include Telidon hardware and software. It has helped Canadian cable system companies to get franchises in United States cities.
Telidon is being tested in Europe and the United States by such agencies as the Smithsonian Institute and the Public Broadcasting System. Over 150 new direct high technology jobs have been created already, and this is just the start. All of this has occurred with a government investment so far of about $5 million.
Recent surveys show a very high level of employment for applied scientists, engineers, technologists and technicians. For university and college graduates, the rate of employment of recent graduates is very close to 100 per cent in the applied fields of study including business, computer science, engineering, health, earth sciences, and the applied physical sciences.

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Obviously, Mr. Speaker, I would not claim for the government all the credit for the major trends and developments which I have mentioned and which are but a sampling of everything that is happening in this country in the field of high technology. But there is every reason to believe that the policies and programs of the government have had a generally beneficial influence and, in some case, a decisive one.
The remarks of the hon. member for Regina East (Mr. de Jong) this morning notwithstanding, tax incentives for industrial research and development have been successful. Canada has very generous measures compared to other OECD countries, and from what Statistics Canada and Revenue Canada have reported, compared to the United States. Canadian industry is taking good advantage of them. Our most recent data is for 1978, showing that 468 companies claimed research and development tax incentives whose total value we estimate to be about $28 million. Bear in mind that new tax incentives had only been introduced in 1977 and 1978, and industry was only beginning to respond at this point. A late 1978 tax incentive was also introduced but its effect does not show in these numbers, although 1 am confident it will have a significant impact. I expect that when the returns for 1979 and 1980 are available, the total claims will exceed $100 million.
I want to dwell on the expenditure side because the hon. member for Scarborough East denounced us for not acting strongly enough. I announced, on June 5 of this year, that the federal government expenditures on research and development in the natural sciences and engineering were slated to grow by 14 per cent over the previous year, an increase of $155 million. Since that time research and development spending plans have been approved for this year which will add a further $56 million to that total. I expect the year-over-year increase will be in excess of $200 million, representing an annual growth rate of more than 19 per cent. The hon. member accused me of using sweet words. That is flattering, I suppose, Mr. Speaker, but 19 per cent is much more than sweet words; it is action.
The 1980-81 increase of over 19 per cent shows that this government takes its commitment to the target very seriously and is prepared to put up its share of the target and to set the example for private industry, provincial governments and Canada's universities.
These expenditures, Mr. Speaker, cover a wide range of government activities. They include the mission-oriented research of departments such as the Department of Agriculture, the Department of Fisheries and Oceans, and the Department of the Environment. They include support for university research. And they include support for industry through agencies such as the National Research Council and departments such as the Department of Industry, Trade and Commerce. Within this wide range of scientific activities I should like to point to some specific program increases-increases that effectively rebut the contention that we are not harnessing the energy and talents of our scientific and technological community.
I gather that the hon. member for Regina East who spoke this morning was critical of our efforts to help high technology
through the universities, with our funding for universities. He should know that among the increases included in the main estimates there is a major increase of $44 million for university support through the programs of the Natural Sciences and Engineering Research Council and the Medical Research Council, $30 million for industrial research and development support through the Enterprise Development Program of the Department of Industry, Trade and Commerce, and $13 million for energy research and development.
With respect to the supplementary estimates which will shortly be placed before the House, these contain a further increase in research and development expenditures of approximately $47 million above the $1,242 million contained in the main estimates. Included in this increase are such items as $13 million for space science and satellite development; $17 million for industrial research and development under the Enterprise Development and DIP programs; $12 million for a low head hydroelectric demonstration; about $4.5 million for communications research and development, and $2 million for the Medical Research Council.
In addition to these increases, Mr. Speaker, it is anticipated that a further $9 million will be spent this year as part of the national energy plan presented in the House this week by my colleague, the Deputy Prime Minister and Minister of Finance (Mr. MacEachen). As a consequence, the estimated expenditures on research and development by the government this year are now forecast at $1,298 billion, just under $1.3 billion, or 19 per cent higher than in 1979-80.
To some extent I apologize to hon. members for having gone on with statistics at such length, but the fact is that we should look at the facts, and the facts do not bear out the contentions of the two opposition members who have spoken before me.
Equally, I should draw the attention of hon. members to the research and development implications of the national energy program. That program fully recognized the importance of energy research and development in meeting our energy situation and the need to have more support for energy research and development measures at both the provincial and federal levels of government and in industry. Moreover, the program contains important new initiatives in research and development which will be undertaken to provide the technological base for long-term energy options.
The over-all research and development emphasis, however, must shift toward new energy priorities. The three priorities for this increased effort are, first, alternatives to gasoline as fuel; second, increased efficiency of energy use in all sectors of the economy; and third, new energy sources ranging from coal to hydrogen. In this regard the federal government will undertake new energy research and development initiatives totalling $260 million over the period 1980 to 1983. This will be a significant commitment in energy research and development expenditures in addition to the $160 million spent in 1979-80 under the panel on energy research and development.
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The government has a genuine concern about large-scale and efficient energy development in Canada. Yesterday the government announced the creation of a new Crown corporation, Enertech Canada, to enhance further Canada's energy position by giving a boost to renewable energy development. Enertech will operate under the guidance of Petro-Canada initially and will incorporate the Solar Energy Society of Canada and the Biomass Energy Institute. Petro-Canada will provide initial funding of $20 million to Enertech, which will be located at Winnipeg.
Canada is rich in a variety of energy resources. More and more emphasis will be placed on renewable energy resources and on public education to appreciate and wisely use this important national asset.
The government considers the large intellectual resource base within our universities as a major and basic building block of any vigorous and soundly based industrial policy. That is one of the main reasons why the government has increased the budget of NSERC by 35 per cent this year.


Thomas Edward Siddon: That was a Conservative initiative; you know that.


John (Moody) Roberts: Mr. Speaker, to correct the hon. member, we recognize there was vastly increased funding for NSERC in the 1980-81 estimates which had been provided on the initiative of the Conservative government of which the hon. member seems to be so proud.


Thomas Edward Siddon: No, sir.


John (Moody) Roberts: We greatly increased it, and we did so because we are intent on ensuring that the council is able to attract and train more young, high calibre talent for research careers in Canada.
The council has provided some 1,000 awards to third and fourth-year undergraduates for summer jobs in research, and 100 new senior research fellowships. This latter program has brought highly experienced researchers back to Canada from abroad.
The council has directed an increasing proportion of university research and development into areas of national need. Its strategic grants program has stimulated research in energy, environmental toxicology, oceans, communications, and food and agriculture. Particular priority in those programs is given to the transfer of research results to industry.
The government is also sponsoring new industrial innovation centres at the Ecole Polytechnique and at the University of Waterloo. These centres will aid industry, particularly small business and inventors, in the development of new products.
1 have described the ways in which we have harnassed-and harnassed effectively-the energy and talents of our scientific and technological community. I have pointed to a number of developments taking place across the country which have moved Canada into the forefront of international developments in space, in communications, in aeronautics, in electronics, and in energy, to name only a few.
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Some of these developments have taken place entirely in the private sector; others have been fostered or encouraged by the federal government. All are not only contributing now to our economic growth but they are also laying the groundwork for a healthy, competitive and high technology economy in the future.
I have also pointed to some of the key developments taking place in government. We have fixed a research and development target of 1.5 per cent of gross national product, including both public and private sector spending, as the objective for the research expenditures of our economy by the mid-eighties. We fully expect to meet what we feel is a reasonable share of that target this year. We are on track toward meeting that target. I am hopeful that we will do the same next year. The additional resources which we have received have enabled us to provide selective increases in some government research through the granting councils, and additional support for research and development in industry. That pattern embodies the main elements of our approach. They are maintaining a healthy scientific capability with government departments and agencies to permit them to carry out their missions, undertaking the kind of research which cannot readily be done in the private sector, or it is too expensive to be done in the private sector, or the returns are too long-term to be done easily within the private sector.
Our approach includes providing assistance to research at the university level, trying to ensure that curiosity oriented research will be supported, and training and developing in human resources the capacity to meet our objectives. Basically that support flows through the granting councils to ensure, among other things, as I have said, a flow of highly trained individuals to support science and research. Finally, our approach includes providing increased support directly and indirectly to industry, which clearly has a major role to play. We are counting upon greatly increased expenditures in the private sector to bring us to the 1.5 per cent objective.
These elements are in place, and the essence of my remarks this afternoon is that, contrary to the assertions of hon. gentlemen opposite, we are making considerable progress. We are devoting increased resources to these efforts, and we are moving in the right direction.


Ian Deans: Mr. Speaker, I am glad to take part in this debate. I want to try to broaden the look at the problem just a little bit and to take it from the research and development area just a little further into the entire area of industrial strategy, because I think it is important that we take a look at what is happening to Canada and what is happening to our industry and the value that we will hopefully derive from the kind of program my colleague, the hon. member for Regina East (Mr. de Jong), put forward if in fact the government were ever to get around to adopting that kind of program.
I listened with interest to the minister as he outlined the number of projects, project areas and companies involved in research and development of one kind or another and, without getting into a battle of semantics, there is the question of
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whether they are doing pure research or product research, or in fact in many instances market research.
There are serious questions in that regard, and I think that in order to break it down it might be useful to have a breakdown of the statistics to show where the research was done and what kind of research is being done. However, 1 am not going to play the game of trading in statistics. I will not do so because 1 think that the measure of the government's success is not whether 1 can come up with a statistic which shows that it is spending less, or the government can come up with a statistic which shows that it is spending more. The measure of government success can be found in the unemployment figures which come out every week and which show dramatic increases. The measure of the government's success can be found in the bankruptcy courts as more and more small industries, small companies, and not so small companies, are being faced with situations in which they are no longer competitive in world terms for one reason or another, or they are unable to meet their commitments because of an economy which has been allowed to get out of hand, and costs which are too large for them to bear.
The measure of success can be found in family courts as people try to find solutions to purely personal problems which are the direct result of the government's failure to move to rationalize this economy and come to grips with the problem areas.
It can be found in the social welfare offices as people who have been unemployed and looking for work, any kind of work, in almost every community all across the country, finally find themselves with no unemployment insurance benefits and forced to do what they in their own minds thought they would never have to do, and that is to go down to the welfare office to ask for help.
So I do not think that you can measure the success, in terms of the definition of the new economic strategy or the new industrial strategy, the appropriateness of the amounts made available for research and development, in statistics, not in financial statistics anyway. I think they can be found in human experiences, young people who walk out of universities or community colleges, young people who come out of high schools with diplomas which, not so many years ago, meant something, diplomas which gave them a reason to believe that there would be something for them if they applied themselves, young people who walk out today with a diploma in their hand and wonder what it is worth, where do they go, what value does it have.
The other night I listened as the Minister of Finance (Mr. MacEachen) explained to the House of Commons and to the nation the government's new approach to managing the economy of Canada, and I could not help thinking how wrong-headed it was, how this approach can do nothing but be counterproductive, and how this approach can do nothing but create more of the same kinds of problems with which we have been confronted over the course of the last half dozen years. What
the Minister of Finance did was to make it more expensive to do business in Canada. What the Minister of Finance did was to make it more expensive to provide the essential things for your family. What the Minister of Finance did was to reduce the amount of discretionary income for the majority of people. What he did, in fact, was to undermine an already imperilled economic sector by adding to the burden, a burden which even now is almost unbearable.
1 want to suggest today that it is, therefore, not easy to talk about industrial strategy without talking about the budgetary measures that must be put in place in order for this industrial strategy to have any meaning, to have any direction, to have any substance. What the Minister of Finance did was to say that much of what people are talking about, in terms of a new and dynamic Canada with a changed economy, a new manufacturing sector, new and better means of better production, could not be achieved. What he did in that budget was to determine effectively that our manufacturing sector would not be able to undergo the massive change that would have to be undergone if we are going to be competitive in this world's marketplaces.
Canadian industry is, in the main, quite small. It was set up for the purpose of meeting the domestic market of eight million or nine million households, and that is not a very large market. This means, therefore, that if the Canadian industry, small in scale as it is, is going to be successful, it has to be both very efficient and also be able to rely on a stable domestic market as the basis for its growth, so that it can then, with that sense of stability, go out into the world and seek the world's markets and thereby take advantage of additional dollars to provide for Canadians opportunities which until now have not been provided.
I want to suggest to you that if you were to stop and analyse this budget, you would have to come to the conclusion that the discussion we are having today, important though it is, pales into insignificance when you realize that all the goals and the directions we are trying to achieve are being undermined. They are being undermined by the actions of the financial advisers to the government. God knows why. I cannot understand it at all. I sat for two days puzzling, trying to see the rationale.
Here we are with resources in abundance; you name it, we have it. Here we are with natural resources, depletable and non-depletable, with energy resources sufficient to meet our needs if properly used, with manufacturing capacity and an infrastructure in place, although desperately needing to be updated, with perhaps the most highly educated work force in the world, with the ability to produce our own food, with a stable banking system, with stability in government, except for the last few years. And yet we have to ask ourselves what it is that we do not have, what is holding us back, why are we not in the forefront, why do we look to Japan, to Germany, to other parts of the world with envy when they have to come to us to get the very things they need? Why do we have to look to them? One of the reasons is the kind of budgetary measures that were brought in this week and that are not too much

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unlike the kind of budgetary measures that were brought in last year by the Conservative government.
If you reduce the number of discretionary dollars available in the consumer marketplace, that can do nothing other than reduce the amount of purchasing that will take place. If you reduce the amount of purchasing that will take place, it automatically follows that you will reduce the number of products required to be manufactured, and if you reduce the number of products required to be manufactured, you will no doubt reduce the number of people required to manufacture the products, and they will be unemployed.
If you create more unemployment, you will have fewer people paying taxes, and as you have fewer people paying taxes, those who are paying taxes will have to pay more, and as those paying taxes have to pay more, you will begin again the cycle because they will not have as many discretionary dollars, and the manufacturers who are desperately seeking ways to improve their productivity, to build up their manufacturing capacity, and to embark on product line research and pure research necessary to be competitive, not only in Canada but in the world, will not have a sufficient cash flow to put aside the dollars they must have in order to do the research, in order to undertake the engineering, and in order to do the work. Therefore, the whole process becomes self-defeating, and then becomes a major problem because it becomes in itself a destructive process.
It amazed me, therefore, when I listened to the government speaking, and remembered the time when the Minister of Industry, Trade and Commerce (Mr. Gray)-he is now in Paris, as I understand it, and I hope he is enjoying himself- God, I am glad he is not here.


Stanley Howard Knowles: So is he.


Ian Deans: I remember him talking about his industrial strategy. It was to put $2.7 billion into the rebuilding of the Canadian manufacturing sector. He was right. It will take a lot of money. What does the government come up with? It comes up with $44 million a year over four years. I am going to be honest with you. For most of the people whom I represent, $44 million is a sizeable sum, and I agree, although these days it is 44 Loto winners. Anyway, $44 million is allowed by this government to restructure Canada's manufacturing sector. That would not even be enough to undertake the redevelopment which must be undertaken at the Sydney steel plant. It would hardly pay for what must be done at Donkin Mines. It would be barely enough for a handout to Michelin. It would not quite match what we have to give to Ford. Certainly it would be only a quarter of what we guaranteed Chrysler. It would do nothing to help Massey-Ferguson. That is the measure of the government's commitment, that is what is available from the Manitoba border to the east coast for redevelopment.
I understand there is $2 billion for the western development fund. That should have been spent years ago. It is desperately needed, but for the balance of the country all we have is $44
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million. That is a way of measuring the commitment of the government and deciding whether the country is in good hands with or without Allstate.
In essence what I am saying is that we have a problem not unlike those faced by many other nations in the world, but in Canada we have a different approach. Our approach is to sit back and hope it goes away. Their approach was to meet it head on, to try to find solutions to the difficulties, to recognize where the weaknesses in their economies lay and to try to straighten out the problems.
1 do not deprecate for a moment the importance of the constitution. The minister said we were wrong, those of us who think that perhaps a little too much time and effort went there and a little less time and effort than was necessary went into the other measures. Be that as it may, the fact is that we cannot correct now what was not done six months ago. There is no mechanism now to do it. The budget has come and gone. The process I have described will without question undermine Canada's economy and make it even more difficult to do what must be done. It has already been put in place. I do not doubt for a moment that it was put in place by well-meaning people.
I do not question the integrity of the Minister of Finance. I am sure he believes what he is saying. I do not know how he can, but I know he must. I cannot understand how he expects to solve the real problems, the ones of which I spoke, the problems of the people of Canada, with this kind of budgetary measure.
One need only look at the statistics over the course of the last couple of years. I did some comparisons for the purposes of my speech this afternoon. I looked at external trade and took some of the figures of Statistics Canada for comparison purposes. I compared the first quarter of 1978 with the first quarter of 1980. Our exports in wood and paper are up 37 per cent, our imports are up 20 per cent. In iron and steel our exports are up 34 per cent, our imports are up 50 per cent. In non-ferrous metals, 74 per cent more were being exported but 364 per cent more were being imported. Industrial machinery was up 24 per cent over 1978, but in the same period for this year our imports are up 61 per cent. In agricultural machinery, our exports are up this year over two years ago by 70 per cent, but our imports are up by 52 per cent. In other words, in the overall we are not doing very well at all. A great deal of the export increase is attributable directly to the decrease in the value of the Canadian dollar, because these are dollar figures about which we are talking. So, it is an illusionary increase. It does not really exist in terms of product development and manufacture. We are in serious straits and, of course, the budget undermines our position even more.
One of my concerns about the province of Ontario-and I believe it is one of the concerns of the minister-has to do with this area. Exports of unprocessed or semi-processed crude materials are up in the first six months of 1980 over the first six months of 1978 by 54 per cent. That looks not bad. But imports are up 148 per cent, and that looks terrible. In end products in Ontario exports in the same period are up 2 per cent but imports are up 18 per cent. This reflects a weakness in

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our manufacturing sector, in our ability to meet the world demand, in our ability to utilize research and development capacity and in our ability to be competitive. Ontario faces extremely difficult times, and we still do not have in place any kind of strategy to deal with it.
I gather from the eagerness with which Mr. Speaker sits on the edge of his chair that I have reached a point where I should stop, but 1 want to say that the kinds of measures being proposed are not really good enough. In fact, they are counterproductive. The government had better get up off its collective butt and do something before there is no country left to save.


Mr. Herb Breau (Gloucester):: Mr. Speaker, 1 am very happy to take part in this debate this afternoon on the motion presented by the New Democratic Party. Its justification for any changes in economic policy or anything it ever suggests is that there is a strategy written somewhere. Because some thesis is written in a university or in the caucus research bureau of the NDP, it becomes a proposal of that party. It suggests that whatever needs to be done to prop up industrial sectors of the economy can be done in Parliament just because a group of politicians in Ottawa decides to do something which they believe will automatically solve every industrial development problem in the country.


An hon. Member:: Who said that?


Herb Breau: The member should read his own motion to which he did not refer when he made his speech. When one looks at the motion, listens to the speeches members over there made today and the ones they made in the budget debate, as well as other speeches made before, one draws that conclusion. I am not suggesting they are being dishonest or insincere. They just do not know any better. They believe it is possible for the government to do everything. They begin with their political aspirations and believe it is possible to repair everything that is wrong in the Canadian economy. That is just not the way it works.
It was interesting to hear a spokesman of the Conservative party earlier today advocating more government spending as a way of solving problems in the industrial sectors of the country. That party, whenever they had a chance to govern-thank God it did not last very long-immediately went on a rampage to cut every possible productive program which the federal government had. I see the hon. member for St. John's East (Mr. McGrath) is in the House. He must recall the humiliation he went through last year at about this time because the president of the treasury board at that time had cut back on every good program there was, including those in the Department of Fisheries. Of course he disagreed with that but there was not much he could do. The collective ideology of the Conservative party took priority. So to hear somebody from the Conservative party advocating more spending in order to prop up more research in our industrial sectors is really funny to somebody who sits on this side of the House. Last year, for a period of a few months, we saw them slash every possible program which was productive. I say, "Thank God it didn't last very long". Now we are back in power. We won the
election in February, and a lot of those programs are back onstream. They will help to develop sectors in the economy which are important and have a positive impact on people. The fisheries sector is one of these programs.

Now when members come out and say there are bankruptcies in the economy, lay-offs and some slow-downs they blame it on the fact that the government does not have another program. It is an indication that they are either not being honest with themselves or the House or that they do not understand any better. There is an awful lot of innovation happening in the economy now. Some of it is helped by government and sometimes it is helped through the taxation system. We have investment tax credits in place particularly for research and development. When some hon. members speak about the budget which was tabled this week they say every possible negative thing they can about it; they do not look at its positive aspects. The New Democratic Party does not look into certain designated areas of the country where there is a more urgent need for industrial development. For these areas we have provided a special investment tax credit of 50 per cent. The hon. member for Hamilton Mountain (Mr. Deans) shakes his head. He referred to the investment of Michelin as a handout when he spoke earlier.


Ian Deans: That is exactly what it is.


Herb Breau: He expects us to believe he is balanced and honest in his views and is not distorting the facts though he himself is advocating that the government should do more in the area of industrial development. Because Michelin happens to create competition in his area-they are a very aggressive company who go for the best products in the world, not only in Canada-


Ian Deans: Ask the hon. member for Hamilton West.


Herb Breau: The hon. member for Hamilton West (Mr. Hudecki) does not condemn it. The hon. member for Hamilton West can ask questions but I have not heard him refer to the Michelin investment.


Ian Deans: He was almost sick about it.


Herb Breau: The hon. member should make up his mind. He should advocate policies which the government should accept in order to create investment where research is done and where it is sound. Michelin has the best products in the world and here is the hon. member ridiculing it. He says it is a handout to Michelin. He should make up his mind. He should not object just because it creates competition in the Hamilton area and in southwestern Ontario. It does create competition, but it is healthy competition.


Ian Deans: It is going to defeat you in the next election.
October 31, 1980


Herb Breau: If there is to be industrial development in this country you must expect that there will be some healthy competition.


Ian Deans: What is healthy about that?


Mr. Guilbault:: Why don't you be quiet? We heard you out earlier.


Mr. Deputy Speaker:: Order, please. The hon. member should address his remarks to the Chair.


Herb Breau: I was addressing my remarks to the Chair, Mr. Speaker. I was saying to you, sir, that I do not mind those interjections. As a matter of fact, they do not make any more sense than when the hon. member is on his feet making a speech, so I have no problem in responding to them. He has been here for a little while and he has many shortcomings in proposing all sorts of programs. He says we should do this for the auto industry and we should do that for the other industries. In some cases he is right. The government should be attentive to some of those problems. But then when the government does do something which is productive and positive, he ridicules it, he says it is just a handout to Michelin or a handout to another company. He has to make up his mind and when he does his speeches will be a little more coherent.
Mr. Speaker, the NDP talk about an industrial strategy as if, in a country like Canada, you could have a blueprint, a strategy written somewhere by bureaucrats, academics or theoreticians. He seems to think something like that is possible in a country where there are at least five different economies-some people think there are even more different economies than that. At one end of the country we have a shortage of workers and at the other there is between 15 and 20 per cent unemployment. In some parts of the country we depend on resources only and in other parts we have a very productive manufacturing sector. There just cannot be a blueprint which will be adaptable to the whole country when there are these kinds of diverse economies. I can give some examples.

Mr. Speaker, here is an example of something which occurred in New Brunswick a few years ago. Everyone knows that the Saskatchewan government took special action concerning the potash industry, probably in the interest of the province, and I make no judgment on this issue. The authorities decided to get tougher with the companies and said: You will have to do certain things for the good of Saskatchewan, or else we shall take over these companies. In some cases, they did so. On the other hand, in New Brunswick, which also has a potash industry, the government decided not to follow the same development strategy nor to apply the same criteria as the Saskatchewan government because it wanted to see development in this area. Could the federal government and all the provincial governments agree on a strategy for potash development in this case? This would be impossible because one area would say that it prefers to have development under
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such terms or such conditions, while another area has decided that it does not want the same things. 1 respect these decisions. I make no judgment about this matter. It is up to the Saskatchewan government, with the people of the province, to decide what type of development policy it wants to apply.
In my constituency near Bathurst, for instance, there is a zinc mine and several other mines which are amongst the most productive in North America and probably the world and which belong to Brunswick Mining & Smelting. This is now a subsidiary of Noranda Mines Limited. At the present time, there is a zinc refinery, and in the last few years, the federal government and the government of New Brunswick have been trying through all sorts of incentives to help this company. The tax credit of 50 per cent announced Tuesday night by the Deputy Prime Minister and Minister of Finance (Mr. Mac-Eachen) will apply to this area, and it might very well encourage the company to build a second zinc refinery. Moreover, under the programs of the Department of Regional Economic Expansion and the agreement concerning northeastern New Brunswick, there are other means through which the federal government could contribute to this project.
But ten years ago, if we had had taken a leaf out of the New Democratic Party's book, if we had said we needed an industrial strategy in Canada, someone somewhere must draft a paper that says it will be a coherent policy, coherent is a nice word, we would probably have said: Canada as a whole must ensure that resources be processed right where they are taken out of the ground. That is one of the objectives of the federal government. That is the objective that has been followed in the case of uranium, for instance, when it was said that the refinery would be established in northern Ontario, very close to the uranium mines.
We can say that in some areas of the country, but if that was what had been said in my area some seven or eight years ago, the mine would be closed. Economically, the company had no reason to build a second refinery at that time, because opening the mine required the conclusion of an investment agreement with people who owned refineries in Belgium and used to get their supply from mines in the Congo when the Congo belonged to Belgium. So then we would have had to close the mine if we had wanted to follow the national strategy, which would have meant that the 1,800 people who have been working there since would have been unemployed. Therefore a national strategy is not possible, unless we say we are going to draft a national strategy, be dishonest and not follow it.
A country such as Canada needs sectorial and regional industrial development policies, and the same applies to the provinces themselves. It is impossible to have what might be called a coherent policy or strategy unless one was dishonest and outlined such a strategy which would simply set goals for the whole country, and then failed to pursue them. So, Mr. Speaker, 1 would rather be honest with the people and tell them that what we need are sectorial regional policies.

October 31, 1980
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To pretend like the Conservative member and the NDP member that the federal government has not been very active or enterprising, even with respect to regional development policies in the past 12 to 15 years, is to ignore the situation. I understand that the member is a newcomer from the Ontario legislature; that he is not used to sitting in the House of Commons, but if he cares to ask members who have been sitting here longer than him, such as the hon. member for Winnipeg North Centre (Mr. Knowles), that member will be able to tell him that the federal government has had regional development policies for a long time and that they are sectorial and promote development in various areas of the country. There are examples, and I just gave one, Michelin Tires, there are some in my own riding. There is a corporation-
1 observe that the hon. member does not listen when I give examples. Another example is a company in my constituency called SMI Industries which makes snowplow equipment, snow-clearing equipment, crash rescue trucks and the Zam-boni ice machines which are sold all over the world. This was only possible through federal-provincial development policies. It was only possible because this government has departments such as DREE, Industry, Trade and Commerce and the Department of Transport. These departments were interested in making sure that that particular sector became equal with the best in the world. It was all done by government encouragement through incentive programs.
Because there is no written document called an industrial strategy, it does not mean there is no industrial strategy. Perhaps the researcher who helps the hon. member would, from an academic point of view, like to see everything written down like a thesis. I do not suggest that the hon. member uses a researcher all the time.


Ian Deans: Don't get sidetracked, finish your speech.


Herb Breau: I am suggesting that it is possible to approach these problems from an academic point of view rather than from a practical point of view.


Ian Deans: Oh, oh!


Herb Breau: The hon. member talks about real people, but his party has been advocating an industrial strategy for Canada for some time.


Ian Deans: So has Herb Gray.


Herb Breau: The NDP say that because there is no document or piece of paper on which is written our industrial strategy, it means nothing is being done to promote industrial development in the country. What I am saying is that we have policies which are sectoral and regional in nature and which promote industrial development in this country.


Ian Deans: We'll talk again.


Herb Breau: Sure, we will talk again.

So, Mr. Speaker, coming back to the budget which was introduced on Tuesday, for the Maritime provinces, for areas in my constituency, it is a favourable budget because we are in an area which depends to a large extent on the power the federal government will have to develop not only energy but the whole Canadian economy. Because all eastern Canada, all the province of New Brunswick for instance, depends on a strong federal government and the federal government can only be strong if it retains a major part of the revenues produced by the economy of Canada. Unless the federal government has enough money it is no use saying that it will be strong enough to take care of the welfare of all Canadians, and that it will be able to deal with the interests and the economic development of the weakest parts of our country.
For my region it is important to emphasize that the philosophy underlying the government budget is favourable to us. In addition, the government is not following a fiscal policy which might be described as being regressive because it does not seek to slash overly drastically into government projects. So our region will be able to continue to progress without being subjected to a direct impact which might be disastrous because, when the federal government cuts expenditures, it means that regions whose growth depends on the federal government will suffer a lot more than other regions which have less urgent need for these expenditures. Then there is the fact that oil prices will not go up as rapidly as they would have if the December budget of the Progressive Conservatives had been adopted. Indeed, between now and 1984 there will be a striking difference between what the price of petroleum would have been under the Conservative budget of December and what it will be under the budget presented by the Minister of Finance (Mr. MacEachen) on Tuesday. In fact, according to the Tory budget the price of gasoline would have been SI.56 in 1981 and, I conclude on this, Mr. Speaker, $2.63 in 1984, against $1.36 in 1981 and $1.95 in 1984 as provided in the budget we are now considering. So there is a difference of 60 cents a gallon in the price of gasoline, not to mention the 18-cent excise tax which the Progressive Conservatives were suggesting last year.
In conclusion, Mr. Speaker, I would say that the government is introducing dynamic, active and positive measures in the field of industrial development and, in my opinion, the budget unveiled last Tuesday evening faithfully reflects that philosophy and that approach of the government, and that they will continue, I am sure, to meet the requirements of the regions which need them.


Thomas Edward Siddon: Mr. Speaker, it is not with pleasure, but with discomfort that I rise to
October 31, 1980

support my colleagues on this side of the House, including those in the NDP, who put this motion forward condemning the government for having failed to harness the energies and talents of Canada's scientific and technological community. I say it is with some discomfort because 1 have heard two speakers from the opposite side, most recently the hon. member for Gloucester (Mr. Breau), using slick rhetoric and simple examples, picked selectively, to make a case which is very, very difficult to defend.
I would like to put a couple of over-all figures on the record which members of the government have failed to address. The minister's departmental estimates for this year show that for science and technology the government will spend, over all, $400 million this year. That compares with a budget of $577 million for the CBC and with a budget of $2.3 billion for the operation of the Department of the Secretary of State. Science and technology is receiving 20 per cent as much attention as the Department of the Secretary of State. In fact the total science and technology research effort in Canada consumes about $2.3 billion out of a gross national product of $250 billion, or less than 1 per cent. That $2.3 billion spent by all industry and all governments in Canada is the same as the budget for the Department of the Secretary of State of this government.
I believe that this is atrocious. The future opportunity for our children, as they grow up, will depend primarily on jobs created by the technological advancement of our country. I speak with some authority on this matter because I grew up in a small prairie town in Alberta, and I make no apologies for that. We were without paved roads, natural gas and many of the conveniences which those who were raised in this more affluent, central part of Canada have enjoyed for decades.
My parents wanted to see that I got an education. They did everything to ensure that I got that education. They even went so far as to sacrifice a family car so that my brothers, sisters and I could have an education. I found a way to work for that education. I went to the University of Alberta where I studied mechanical engineering and to the University of Toronto where I studied aerospace engineering. I spent nine years in university obtaining advanced degrees to put myself in a position where I could be employed in a high technology area in this country. Then I looked around for a job. I had the choice of five jobs in the United States of America at 60 per cent higher salary than would be offered in Canada, where there were few jobs in the private sector in aerospace industries. I had the alternative of going into a Canadian university, to teach which I did, in 1969, at a much lower salary. I felt the future of this country was important. Teaching in that university and in my work over ten years I built a research program. I used the benefits of the National Research Council and the other aid programs of this country. However, I found to my great distress that the greatest support for my research effort came from American companies to whom I also provided consulting services. These were companies such as General Electric, General Motors, Douglas and Grumman. Those companies were willing to invest in the work I was doing in
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Canada at magnitudes five times as large as the Canadian government was willing to provide. Over that ten-year period at the University of British Columbia, the relative amount of money available for research was gradually in decline because of the policies of the government. This government has been under the leadership of one Prime Minister for 11 years. It has allowed research and development to deteriorate to a criminal state in Canada. I found that the graduate students that I trained had to leave Canada. Some of them are working in California today. There was no private sector opportunity for them in Canada upon their graduation.
I found I had to go to the United States for research contracts and support, and that there were no Canadian industries particularly interested in hiring the products of our program. In spite of the high-sounding rhetoric from former ministers of state for science and technology I must say that, as a consequence of the Lamontagne committee report of the early 1970s, the government has perpetrated the greatest charade of all times on this country by establishing a ministry of state for science and technology which is absolutely toothless.
I want to give some examples to illustrate that contention. I am here today helping to preside over the collapse of our scientific and technological base. I hope it will not collapse. But from what I have seen and heard from the minister today,
I am afraid that is the direction in which this country is going.
I want to read a letter from a former colleague of mine at the University of British Columbia. It is a letter to the Minister of State for Science and Technology (Mr. Roberts) written in September, 1980. This individual is a plasma scientist. He has been active in Canada for many years working on fusion research and plasma research. He now sits on the selection committee for the National Science and Engineering Research Council grants committee on energy. This gentleman said in his letter:
I attended my first meeting recently and came to realize that the resources of this agency,-
The agency he is referring to is the selection committee.
-are insufficient to maintain the fusion research of this country at its present awareness level, let alone raise it to a level comparable to other developed countries of similar size.
He went on to say:
Research and development for fusion energy requires a long lead time but it probably has a huge energy pay-off.
He continued:
The question comes down to this: Does Canada want to forfeit its hold on research in fusion, squander its expertise in the field and isolate itself from the technology which may provide the only inexhaustible and acceptable energy source in the long run? This question must be faced immediately and is far too important to be answered by default.
He says that he is faced with a choice and that physics researchers in Canada are faced with the choice of getting out of fusion research because Canada is not prepared to keep the fusion energy option open for the next generation.

October 31, 1980
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That is only one of the selective examples I will use today. There are many others.
Forestry research in this country enjoys the grand sum of $30 million of support. That product returns $18 billion to the people of Canada. So the sum I mentioned is less than 0.2 per cent of the value of that product. That is all this government is willing to reinvest in the area of science and technology. Total spending on forestry, including reforestation by provincial and federal governments, is somewhat less than 1 per cent of the $18 billion which that product returns to the nation much of which comes from my province of British Columbia.
I would like to put on record some other gross figures which are astonishing and appalling in their impact. I am quoting from a MOSST report of 1978. It is known that industries in other industrial countries are more heavily supported in research costs by their respective governments. In the United States, the U.S. government foots the bill for 37 per cent of research costs. In Canada the figure is 11 per cent, only one-third as much, and that is appalling.
In terms of percentage of research and development activity, we find that total expenditures on R and D in Canada are at the present time a little more than 0.9 per cent of GNP-that is, less than 1 per cent. By comparison, in Switzerland the figure is 2.2 per cent; in Germany 2.1 per cent, and in the United States 2.3 per cent. Canada is heading into an intellectual tomb if we keep this up. Expenditures by sector of performance show that in Canada business puts up only 40 per cent of the investment in research and the government puts up more, whereas in Germany business puts up 66 per cent. The private sector is somehow induced to put 60 per cent more of its revenue into research than is being done in Canada. Switzerland, the United States and Sweden all have more than 70 per cent of the revenue in research coming from the private sector. In Canada that figure is only 40 per cent. We are top-heavy in industrial laboratories and university establishments and far too light in the area of industrial research dollars.
I have one final figure. This deals with the number of Canadians employed in research per 1,000 persons employed. In Canada, 3.5 Canadians in every 1,000 are employed in research and development. In the United Kingdom the figure is 10 persons per 1,000. In Sweden the figure is 8.4 persons per 1,000; in France the figure is 7.5 persons per 1,000 and in Germany, 9.5 persons per 1,000.
We cannot have this minister standing hypocritically opposite telling us that everything is well in Canada, whereas in fact he is spending his time travelling to see the Queen and giving speeches prepared by bureaucrats to conferences and offending the scientific community. I know that for a fact, and in a few moments I will read for the record some of the choice selections from a recent speech he has given. He is not even here in the House; he does not have the courtesy to stay this afternoon for the rest of this debate.
In our short term in office, and under the leadership of the hon. former member for Brome-Mississquoi, the Conservative government took a number of positive initiatives. I will not sit here and hear the present Minister of State for Science and
Technology (Mr. Roberts) trying to take credit for a substantial increase in funding to the universities of Canada, because this was an initiative of our government under the leadership of that member from Brome-Mississquoi. Last November he announced an increase of some 33 per cent-some $40 million annually-of funding to research and development through the science and engineering research council. That amount is shown in this government's very estimates. It is an increase to a level of support of $160 million which was approved by our cabinet and our government, and they stand over there and attempt to take credit for it.
The Conservative government also approved the five-year plan which the present minister talks a lot about. It also commissioned and received the report on "opportunities for Canadian research and development directed toward the needs of the North American auto market". These are specific initiatives compared with the gobbledygook we get from the present minister, as reflected in his speech which he gave on October 21, 1980, to the first Canadian conference on astronautics. That, in a way of speaking, is my alma mater because that is the profession in which I was trained. The minister went before those scholarly gentlemen, well trained at the expense of the Canadian taxpayer and told them that the Prime Minister (Mr. Trudeau) had given him two very important tasks. First of all, he had been given the responsibility for space R and D, the first time a single minister had been given this role. His second important task was to aid in implementing the government's policy mandate, he says he is now responsible for co-ordinating all of the government's space activities. The minister then listed off a whole series of programs and studies that he was supposed to embark upon given those first steps. It is more programs, more talk, but no action. That is the record of this government over the past ten years which has brought this country to its knees in technological advancement.
I could get more incensed, but I will move to a slightly less intensive topic. I want to talk for a few moments about the federal budget. There is nothing in this budget for science and technology. There is only more deficit. In fact, there is $4 billion more deficit than we projected when the hon. member for St. John's West (Mr. Crosbie) presented his budget last December. If we are even going to get Canada up to the level of 1 Zi per cent of GNP in research and development, let alone 2Vi per cent, we will need to get over a billion dollars injected into research and technology in this country, right now. There were not even any scraps in the budget to come anywhere close to the billion dollar injection we need.
There were no tax policies which would encourage Canadian research investment by Canadian industries; no policies on foreign investment, including the implementation of world product mandates, and no incentives for foreign companies to reinvest a portion of their earnings in research and development in Canada, building laboratories and providing employment opportunities in this country. There was no direct injection of capital to serve the needs of industry and our universities. There was no recognition of the fact that the
October 31, 1980

moneys which universities have available for the pure sciences, engineering and social sciences, and medical science, is way out of proportion to what is required. Canada is slipping ever further into the levels of effort characteristic of Third World countries.
I wish to read a couple of quotations with regard to the budget-statements made by representatives of the high technology industry. They appeared in the Ottawa Citizen of Wednesday, October 29, under the heading "High Technology Industry Angry". I am angry too, Mr. Speaker, I quote:
Spokesmen for Canada's fledgling high-technology industry reacted with anger and frustration Tuesday night after learning that the federal budget contained virtually nothing to help them catch up with the rest of the world ... Canada, spending less than one per cent of the gross national product (GNP) on research and development, is already lagging behind almost all other industrialized countries-and the gap is growing.
"All these other countries have some sort of an industrial game plan," said Robert Long, executive director of the Canadian Advanced Technology Association, which represents 78 companies.
Jack Davies, president of Ottawa's Systemhouse Ltd., a computer consulting firm, said:
"It's truly a Canadian problem that the government just cannot see the inventiveness, the creativity and the technical ability of the people in this country," said a disappointed Davies-
"The government is nervous, so basically they've decided to do nothing for now," said Larry Clarke, chairman of Spar Aerospace in Toronto.
"But I get concerned as time passes because it's very expensive to stay on the treadmill."
There are thousands of opportunities in this country from which this government is abdicating. We have a quarter of a million dollar noise-monitoring system at Toronto international airport which does not work. Some bureaucrat went to Texas, was wined and dined, and decided an American company should get the contract even though four Canadian scientific firms put in competitive bids. That is not right.
We have satellite antenna receiving equipment being manufactured in this country and the Minister of Communications (Mr. Fox) is going around taking them down; this is equipment manufactured by Canadian technological firms. If he is not prepared to change the law to give people the right to freedom of speech and freedom of the press, then our country is headed for censorship and utter disaster. We are destroying our own technological and electronic industry by not allowing Canadian firms to manufacture these receiving stations and to sell them for use by Canadians.
1 have seen applications for research projects, such as using crushed wood fibres to build a substitute for plywood, turned down by the Department of the Environment, the Department of Supply and Services and the Minister for Science and Technology. They did not want to take a $200,000 risk on a project conducted by Canadians who knew their business.
Fusion technology is something to which this government is oblivious. A gentleman in Winnipeg has designed a new automotive cycle called the K-engine cycle, i am a technical person and I say that that cycle may have tremendous benefits in potential energy savings. It has a potential to produce a whole new industry for Canada which the government has
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neglected. There is also a potential particularly attractive in the province of Quebec to manufacture electric cars for commuter use and sell them to every city in North America. Who is picking up the ball? We are certainly not getting any leadership from this government.
Getting back to the budget, we are destroying the incentives of the energy industry. We are driving billions of investment dollars out of this country. That is going to mean lost jobs for our young people and lost opportunities in the future. Now we are going to nationalize the oil industry, or 25 per cent of it. What will happen to the auto industry? Are they going to get nervous next? If the government intends to nationalize the oil industry, why not nationalize General Motors, Safeway Stores, IBM, Xerox and General Electric? This government is destroying the instinct of the private sector and the freedom it has always enjoyed in this country to advance and prosper and employ our young people in jobs which are rewarding, and which allow them to earn in proportion to their individual efforts.
Now there is to be another Crown corporation to add to the list of some 440. We are to have Enertech. I have no objection to government laboratories, but until we redress the balance and get more funding for R and D by private sector corporations, why are we building more government Crown corporations to whittle and diddle and fiddle away with the taxpayers' money?
Before closing, I would just like to ask why we cannot afford R and D in this country? I believe it is a matter which involves waste by this government. I have two examples. The other day one of my constituents received a padded bag containing a whole lot of bumper stickers and buttons, bilingual, printed both sides, imploring him to come and get more of these free goodies to put up in his plant and on the bumper of his automobile. They would be free. He could get as many as he wanted-to promote metric conversion! I wish to read the note which came back with this envelope, written by my constituent. He said:
As a taxpayer in this country I find this disgusting and immoral, the way you so freely spend our tax dollars on such garbage.
That is why we cannot afford to pay for science and technology. Metric advertising, bilingual games, wasteful double printing of government documents in both official languages, funny flags and all kinds of gismos are being purchased when we should be using that money to support scientific initiatives and to put our country back on the right track.


Mr. Gerald Laniel (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, although the Minister of State for Science and Technology and Minister of the Environment (Mr. Roberts) has indeed replied to the criticisms of the New Democratic Party and of the official opposition on this resolution, the motion contains statements which, I believe, lead nowhere. I know the hon. Minister of Industry, Trade and Commerce (Mr. Gray) would have

October 31, 1980
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wanted to be in the House himself this afternoon to refute again and doubly so these statements made by opposition members.
I want to remind the House that the Minister of Industry, Trade and Commerce is presently in Paris where he is heading a delegation on trade co-operation between France and Canada and discussing such important issues as energy, raw materials, the automotive industry, aeronautics, telecommunications and other high technology industries. I will nonetheless do my best, Mr. Speaker, to show the House that the government's action in the areas of research and development and industrial strategy has been effective.

The government's record speaks for itself in harnessing the energy and talents of Canada's scientific community. We are indeed fortunate in possessing human resources in this country which are capable of undertaking research and development activities for the benefit of Canadian industry. However, when talking about research and development and its important role in the industrial development of the country, it is important to realize that research and development by themselves are not sufficient to create high technology companies which can face the competition which prevails in the international marketplace. It is important to view these issues in the full context of industrial innovation, including marketing and financing, which leads to the successful commercial exploitation of technology.
In many cases, Mr. Speaker, technological initiatives are bound to fail, not because of the technology itself or for lack of it, but rather because its marketing and financing aspects have been overlooked. Consequently, government programs and incentives must take into account the real possibilities of the market while encouraging technological development in Canada.

The federal government in general and the department which I represent, have long recognized this and over the past 20 years have introduced a range of incentive programs to encourage and support industrial innovation. 1 think it is fair to say that these programs are equal to, and probably better than and more generous than, those in many other developed countries. I wish to put before the House a few examples of programs that have benefited Canadian industry, most of which have been backed up at least at some time by government funding.
[ Translation]
Mr. Speaker, the facts are eloquent, they speak for themselves. What we have heard to date, and what we still hear often from the New Democratic Party in this House and across the country, is what we call "parlage" in Quebec, or "just talk". The hon. member for Regina East (Mr. de Jong) spoke of the "failure of the government". He also spoke of "lip
service", of a policy of pious wishes, of a "do-nothing government", of the government inertia. But, what do they do? All in all, not much to convince the Quebec electorate that their proposals, which are supposed to be serious, can fit into the context of a stable and solid development of the Canadian economy.

I should like to give a few examples of the results of good government policies. 1 am speaking first of AES Data- [Translation]
-a Montreal company launched five years ago whose sales now reach $140 million. The CDC is its major shareholder and it spends over 8 percent of its sales revenue for research and development. I attended in person the inauguration of a new plant of the company Neeco Circuits System Ltd. of Montreal, last May, a company which now holds, or is starting to hold, an important rank in the field of electronic and printed circuits in Canada.

I want to speak also of other companies. MICOM, recently purchased by Phillips of the Netherlands, has had similar results in microelectronics, a critical area of expertise where Canada's capabilities are small but growing. Mitel, a company in this region, is undertaking a multi-year investment program which will raise its annual sales from under $10 million at the present time to some $90 million by 1984. Northern Telecom Limited, another example, is expected to bring its annual Ottawa production to $20 million in custom integrated circuits.
In the transportation sector the results are even more impressive. Government support for de Havilland, for example, has given this country an outstanding lead in the STOL technology.

The Pratt & Whitney Company of Longueil is the world leader as a manufacturer of small gas turbine engines for small aircrafts. The Bombardier Company is presently making expertise in the area of urban and semi-urban transportation. They manufacture trains for subways, LRC trains for export and it is developing new technologies in the area of railway transportation. They are also talking about manufacturing tramways for some Canadian and North American cities again.
And what about the great results of Canadair and Petro-Canada, Mr. Speaker?

Canada is a world leader in heavy water nuclear reactors, Mr. Speaker, and in the production of radioactive isotopes and devices for use in medical and industrial application.
Dome Petroleum has developed the capability to carry out exploration in ice-infested waters and Panarctic to drill in ice islands in the far north. Development of recovery and refining of heavy oils is another area of Canadian expertise.
October 31, 1980

That expertise did not come alone, Mr. Speaker. It is the result of a mixture of Canadian support with private enterprise. Many of these Canadian companies are part of a welcome phenomena involving the start up and growth of a variety of high technology concerns which has already transformed the Ottawa area into a kind of "silicon valley" of the north. The companies range from the biggest private laboratory in Canada, Bell-Northern Research Ltd. with 2,500 employees to Dipix Systems Limited which is involved in satellite data systems and has sales of about $1 million.
Ottawa's many high technology companies already employ 15,000 people, have a payroll of $200 million and estimated revenues of $500 million. If the present growth rate continues, by the end of this decade there will be more people employed by these industries in the Ottawa-Hull area than by the federal government.
The bulk of these skills was created in the fifties and sixties with the setting up of a number of high technology companies to serve government defence markets. Much of the original research in these areas was transferred from government labs. The increased emphasis in the sixties and seventies to contract out government research and development to industry, later supplemented by the location of Bell-Northern Research Ltd. and other companies in Ottawa, has allowed a critical mass of technical, scientific, entrepreneurial and managerial skills to develop which has been able to take advantage of the opportunities in the new technology fields. This, in turn, has attracted investor interest and what appears to be growing supply of venture capital to finance existing and new companies in the Ottawa area.
We often speak of government money, government grants or government monetary policy, Mr. Speaker. Last week I was present at the official opening of the second research centre of Xerox in Mississauga where I was told that the establishment of that multimillion-dollar centre was due to the convincing actions of the Hon. Alastair Gillespie, a former Minister of Industry, Trade and Commerce, coupled with the good monetary policy of the government. That centre will serve Xerox all over the world and will undertake research which has previously been spread over other locations.
The federal government contributed some $221 million in grants and contracts to industry in 1979-80 for industrially initiated research and development and that figure is expected to increase to $243 million in 1980-81. In terms of specific programs, such as the Enterprise Development Program of the department, some 225 product development projects were supported in 1979-80 for a total commitment of government funds of $58.1 million. From this commitment we estimate product sales of 2.55 billion will result over a period of five years.
In addition to providing assistance to Canadian companies, the federal government, through the Department of Industry, Trade and Commerce, of which I am parliamentary secretary to the minister, has a program to utilize more fully the
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scientific and technological capabilities in universities and to strengthen the technological infrastructure in Canada through the establishment of industrial research institutes, centres of advanced technologies and industrial research associations. Parenthetically I might mention that next week I will represent the minister at the official opening of the Canadian Welding Institute in Toronto where advanced technology is carried out. This technology is in the field of weldings, and it is done with the help of private enterprise-Alberta private enterprise and also, I believe the Alberta government and the Canadian government. The institute has the support of the well-qualified people we can find in this country.
This program has been highly successful in establishing Financially self-supporting organizations which contribute significantly to industrial development by providing expert research and development, testing and technical training services to industry on a contract basis. These services are especially useful to small and medium-sized companies. Of the 25 organizations established under this program, 15 are now financially self-sustaining and are no longer receiving government grants. One of these organizations is the one whose opening I will attend next Tuesday, The Canadian Welding Institute.
The Department of Industry, Trade and Commerce has also financed the start-up of two industrial innovation centres. These centres are associated with universities with the objective of stimulating an increase in technological innovation and assisting private inventors and small and medium-sized technology-based companies to develop and commercialize inventions and technical ideas. Hon. members would be surprised how many people come to my office from different organizations who benefit from government programs or policies and who are very grateful for what we provide as a possible potential for development for the future not only for their associations but also for the industries they represent. [Translation]
Mr. Speaker, the Minister of State for Science and Technology and Minister of the Environment has clearly shown the determination of the federal government in the field of research and development. He reiterated the commitment to raise to 1.5 per cent of the gross national product Canada's contribution to research and development. Of course it is not the federal government contribution alone, it is combined with the private sector's contribution. Research and development lead nowhere unless they are carried out with the involvement of private industry. The budget provides for increases in the economic development envelope and the hon. member for Scarborough West (Mr. Weatherhead) will dwell on that in a few minutes.
Mr. Speaker, I think we can be proud of past accomplishments. There is still a long way to go. Industrial innovation will continue to be one of the key elements in developing and drafting future economic policies, although the details of these new policies are still in the preparatory stages, an aspect on

October 31, 1980
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new policies are still in the preparatory stages, an aspect on which the minister insisted here in the House recently when answering questions.
Funds have been earmarked for that purpose and it can be stated that these programs and these measures will be used at the right place, on the technological capacity of Canadian enterprise, on the availability of risk capital, particularly for small businesses, and finally on incentives to foreign subsidiaries to assume more autonomy and responsibility in developing operations on world markets for their new products.

This will involve an increased level of financial support for industry, including the possibility of increased support for major research and development projects. The emphasis will be on closer co-ordination with industry in order that Canadian companies can fully participate in the growing demand for the technological products of the 1980s.
It is clear that the federal government recognizes the need for Canadian industry to increase substantially its efforts in the development and commercial application of new Canadian technology. Industrial innovation will have an increasingly important impact on many of the critical decisions companies will be required to make not only regarding the design of products and services or the choice of equipment and processes but also in the planning of future operating facilities, distribution activities and information systems. The impact of new technology in Canada is of fundamental importance to the future of virtually every company, and those companies which are not dynamic will not be successful. This will be taken fully into account in the strategic planning process of this government, which has put forward not only in its budget but also in its energy policy programs which look to the future and not to the past as we have heard in much of the criticism this afternoon.


Mr. G. M. Gurbin (Bruce-Grey):: Mr. Speaker, I am glad this afternoon to have the opportunity to join in this debate on the motion presented by the New Democratic Party, which reads as follows:
That this House condemns the government for having failed to harness the energies and talents of Canada's scientific and technological community in the development of an industrial strategy which would draw on Canada's traditional resource base, on our manufacturing strength, and on our new high technology industries.
I was surprised and delighted to see that motion. I was surprised that the New Democratic Party would condemn the government, and I was delighted that its members would choose this very appropriate way to call attention to their dislike of the way the government is behaving.
I strongly support this motion. Examples of the ways in which technologies have been advanced by governments have been brought forward very well by other members this afternoon. Examples of technologies which have helped this country are Mitel, Spar Aerospace, heavy water plants and nuclear power facilities.
All these are areas in which the government has helped and in which through science and technology we have helped to advance our country and our industrial base. The problem is that too little has been done and without any sustained, programmed, controlled and organized approach.
1 would like to address this problem in a very specific way this afternoon by referring to the area of energy research and development. In this way I can give the best single example of the difficulties we experience in our research and development programs in Canada. I think this is the best single example to illustrate the absence of technical understanding on the part of the government, the best single example to show the squandering of our natural resources and the best single example to show the wasting of our human potential.
Our energy resource base has proved a magnificent endowment. We have tremendous potentials not only in renewable energy resources like hydroelectric power, and fossil fuels, but also in biomass that is renewable. We have uranium deposits which give us an almost inexhaustible resource, if we choose to tap it.
Even at this time we are a net exporter of energy. All the time we have been addressing our energy resources, and we have proved that we can consume, but to this point we have not shown that we can effectively reduce the consumption for which we are responsible.
Back in the 1960s about the time of the Sputnik there was a tremendous resurgence of interest in the technological field, and at that time the economy was very healthy. There was a glow about the technological community which was expressed by people cultivating scientific interests, going to university and taking scientific courses with the result that we were developing a research base in this country. It was a weak base, but it was developing at that time.
But then something happened. Back in about 1967 or 1968 things started to change and the resource and research base, which had been developing, started to diminish and dwindle. We started to experience increased costs for social programs and development of that type. Our economy, which was outwardly-healthy in the 1960s, started to fail and people stopped going to universities and entering into scientific programs which would give them the ability to undertake scientific endeavours in the country. At the same time, the Medical Council of Canada, the Canada Council and the National Research Council decreased their level of funding to universities.
One of the other consistent problems we have had in Canada, in addition to the lack of opportunities we have with our human resource base and our energy resource base, is a very low capital situation. Not much capital is available for investment. This has been a consistent problem through the 1960s, 1970s and on into the 1980s. This is something with which we have to live. We do not have the capital we need to invest in large energy developments and in our energy resources.
October 31, 1980

1 would like to quote a passage which I think is relevant. It goes like this:
"Would you tell me please which way 1 ought to go from here?" asked Alice. "That depends a good deal on where you want to get to" said the cat.
Some of my hon. friends may recognize that. Alice, 1 think, was addressing a problem which governments have to address.
I have no way of telling where this government wanted to get to, but there is no question about the course of action that was followed. It is expressed simply by the percentage of the gross national product devoted to energy research and development. In 1967, it was 1.4 per cent; in 1980, it was 0.9 per cent of the gross national product. We have been maintaining an unearned lifestyle on the base of the natural resources of our country.
Back in the early 1970s, the National Energy Board predicted that this country had an oil surplus. We found out, to our regret, back in about 1973, that that was not the case. Then came the oil imports. Instead of responding to the technological challenges, our philosophical wizard leaders either through neglect or ignorance, continued to shelter us from the realities of rising energy costs and, at the same unfortunate moment, kept our alternate energy resources and conservation technology from competing. The burst of federal research and development effort and scientific achievement which led to Candu and oil sands extraction was short-lived and it has been a long, dry decade since any major energy technological achievement.
In 1967, the Science Council recognized the importance of technological sovereignty and also, called for the development of sound programs for the use of conservation and the replenishing of resources. I would just like to quote briefly from its annual report:
We in Canada must extend, and, even more important, apply our advantages and overcome our special difficulties or even turn them into assets. Our resources of money and manpower are limited; therefore we must apportion them wisely, concentrating them in areas that are important to the nation, socially, economically and scientifically.
The folly of not appreciating the importance of these concepts demonstrates vividly the technological gap that has existed in the heads of successive governments. Where we stand today with energy developments is vivid evidence of the flaws in our political leadership.
Today, in energy research and development, conventional fuels research and development is done largely by provincial governments, with only $10 million in 1980 contributed by the federal government. The recent renewable energy agreements with the provinces seemed to be of some help, but they were late, and even with these we can expect to achieve only about 5 per cent of our energy resources in the renewable area, excluding hydro by the 2,000. So in spite of this immense potential, we are not developing our energy resources. In fact, we now have shortfalls in energy supply that would indicate rationing.
PERD is the panel for energy research and development which co-ordinates all the energy research and development in the country under EMR. There are five separate areas. I will not go through them now, Mr. Speaker, because of lack of
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time, but they include conservation, fossil fuel, nuclear energy, renewable energy, energy transmission, and transportation. They each have their own budgets. In six years they have spent a total of $760 million. That is their total investment, even though back in 1974 we had a pretty good idea of what was happening, both in terms of our oil supplies, the OPEC countries, and the oil embargo situation.
The long-term energy supply potential of this and every other nation rests either in solar, nuclear fission, or nuclear fusion. Only in one area, in the area of nuclear fission, have we in any way been able to achieve what we should have achieved in the area of research and development to help our energy supply situation. The National Research Council, with a total budget in six years of $44 million, has been expected to do the research and development in hydraulics, solar, biomass and wind. The National Research Council has a very special problem. It is a problem of management, and this is not a unique problem in terms of scientific communities in Canada. As a Crown corporation, NRC has been expected both to manage and to do the research with the funds it has available. At one and the same time, the scientists are expected to be managers. We have to appreciate now that this is a very important aspect of the difficulties we are having with research and development in this country because what has happened is that people who are normal scientific people have been thrown into a milieu where they are required both to manage the resources and do the research. There are very few people who have this double capacity.
One of the other problems which the NRC is facing is a lack of enthusiasm. This lack of enthusiasm stems from a number of causes. Funding is one part of it because it has been inconsistent; it has been up and down, programs have been switched and people have lost heart because of the difficulties in maintaining an effective program. People are unenthusiastic because there has been no understanding, at the level of government, of their problems and of the importance of the work they are doing. Finally, they are losing enthusiasm because even when the funding is available, because of regulatory restraints they are not able to engage people to take advantage of the funding. They cannot hire people when necessary even though the funding is there.
The final point, which has to do with political control, presents the National Research Council with a particular problem because of the technological gap which exists between their level of activity and people in the government, people at the ministerial level and at all government levels. This gap is widening today. The minister and the people in charge do not understand the technological achievements and therefore cannot keep up in terms of dealing effectively with management problems. So we end up with a situation where the technocrats are in control of science and there is very little relationship between scientists and the government.
Fusion is an example 1 am going to use in terms of the difficulties of NRC because it is a subject on which the minister made a statement. I should like to quote his comment

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before the Standing Committee on Miscellaneous Estimates of July 8 of this year. He said at that time, talking about fusion: When I say skeptical, I mean that literally-it does not mean I have taken a decision one way or the other. I think the case still has to be made that Canada should be involved in fusion research in a major way.
The history of fusion research in Canada is very interesting, but in the short time available to me I would just like to say that we have at least three separate areas in Canada which are competent in fusion research. We have people such as Dr. Skarsgard at the university of Saskatchewan who is respected in the international community as a very prominent fusion researcher. We have people in Canada in different provinces who have been very interested in trying to bring the INTOR project to this country; that project, I understand, may well be cancelled because of the situation in Afghanistan and the international climate. But that situation need not prevail indefinitely. It is a situation which may not, in fact, stop INTOR. We can still be involved in an international program if we have the desire. Hydro Quebec is another good example. They have a fusion project and a research reactor which they would like to develop and use. They are very concerned now, because of federal attitude, that they will no longer be able to do this.
In 1979 the National Research Council dedicated $3.1 million to fusion research. In 1980 the commitment was only $2.9 million. The International Energy Agency commented on this. It was concerned about the low level of funding to fusion research in Canada. We are concerned about fusion research because we will not be able to keep up with the international community. We will not be able to keep our hand in at the table when we are talking about technological advances which can help the country.
I should like to try to explain the importance of this. Look at some of the advantages of the fusion research program. Quite short of actually producing the electrical power of fusion, we have the advantage of development technology in a number of ways. Indeed it is a potential energy source, both at home and abroad. It is a potential complement to the Candu system- and this is something which is poorly understood-because it can help develop fuels for the Candu system. It can help with other technologies from electronics to the programs trying to achieve direct electrical energy conversion. It can help in developing special materials for use in reactors. Finally, it can help in the area of international co-operation.
I should like to refer to the Science Council of Canada Report of June 1979 which reads as follows:
International co-operation is essential to ensure that Canada remains at the leading edge of scientific and technological research, to avoid unnecessary duplication of work done by others, and to develop the capacity to adopt and adapt foreign technology to its own advantage. In selected instances, especially when dealing with complex technologies, Canada need not "go it alone" because of concern that co-operation would result in a secondary role. On the contrary, Canadians should systematically assure equity in international developments through practical and responsible sharing, and through comparative strenghts based on unique high leverage opportunities.
For whatever reasons, the Minister of State of Science and Technology (Mr. Roberts) does not understand.
The United States has a permanent science and technology committee with a number of subcommittees. It has a support staff of 80 permanent people for the committee and subcommittees. It dedicates 2.5 per cent of its gross national product to science and technology. It is surpassing us in all energy technologies with the exception of the Candu fission reactor and tar sands and heavy oil developments. It uses private enterprise management systems to manage the research and development effectively.
The government must identify the importance of science and technology to the country. As each year passes, we see there is an increase in societal dependence on technology, an increasing dependence on foreign technology with a branch plant mentality for technology being adopted and imports of technology into this country instead of developing them here. Each year there is an increasing gap between politicians and technology. In the end we are leaving our destinities in the hands of technocrats.
As each year passes, shrinking geographical boundaries and population expansion come close to the limits. If needs in energy and other resources are not met in the global sense, we run an increasing risk of global conflict. We can help meet many of these needs as well as provide important improvements in our own country. We can provide improvements in employment, in our balance of trade payments, environmental control and national self-sufficiency in energy.
I personally believe we can start this procedure by establishing an effective energy R and D program and an effective over-all R and D program. This effort would be significantly assisted by several measures. First, by providing independent private enterprise management systems for bodies such as the National Research Council. Second, by relieving R and D functions from any restrictive regulatory controls on personnel. Third, by aiming for continued research and development funding of at least 2.5 per cent or more of the gross national product. Fourth, by developing interacting effective liaison for business, university and government. Fifth, by expanding and maintaining international involvement and co-operation where appropriate. Sixth, by establishing tax and government financial assistance and procurement practices to assist private enterprise research and development and to provide markets for the purchase of first products. Seventh, by re-establishing the credibility of the scientific university community through financial support, project grants and constant co-operation. Eighth, by the establishment of a parliamentary standing committee on R and D. Ninth, by providing political leadership which is sensitive, informed and committed. Tenth, by providing a permanent full-time R and D minister.


James Ross Fulton: Mr. Speaker, I am pleased to take part in this debate today. I listened with some interest to members on the government side and I must say I have not been convinced of one single matter relating to either the budget or their position in relation to science and technology. This afternoon I intend to support, particularly in relation to the inherent problems of the forest sector, some of the state-
October 31, 1980

ments made by members opposite and explain why our motion is inherently correct.
Canada's scientific and technological sector is Canada's first industry. The forest industry is now in a rapid decline. The universities of this country are not producing anywhere near the number or level of experts required in the forest industry, and the low level of funds delivered by the federal and provincial governments is the reason.
This week's budget did not contain one word about Canada's largest single economic sector. By not placing a single word in the budget about the forest sector, it totally justifies the motion put forward by the hon. member for Regina East (Mr. de Jong). In my view the government condemned itself on Tuesday.
I should like to outline exactly what is happening in the forest sector before getting into some of my specific recommendations relating to R and D. Not many Canadians are aware that only 35 per cent of Canada is treed and that only a fraction of that area is still harvestable first growth. Forest products in Canada are the largest single net source of revenue, particularly to the federal government, with approximately $20 billion in exports this year. I must point out that it provides a livelihood for slightly over 10 per cent of the labour force in Canada and employs in excess of 1.3 million Canadian men and women.
Both the yield and supply of forest products are dwindling. For example, British Columbia produces about 80 per cent of the softwood lumber for Canada, 50 per cent of the pulp, and 30 per cent of the softwood lumber for United States market. Supplies are declining particularly in the province of British Columbia which is the largest single geographic region producing forest products. There will be shortages in every region of British Columbia within 5 to 20 years. Most of the largest, most productive areas will face shortages by the middle of this decade. By the turn of the century another 25 per cent of the forest land will have been shaved away for such uses as agriculture, urban and rural sprawl, rights of way and parks. Most of that land will be prime valley bottom, the most important and productive area for the growth of forests.
The public are the true stewards of forest lands, yet neither Ottawa nor any of the provinces have really accepted that challenge and set up public advisory committees to deal with the very serious question of what uses forest lands should be put to. Rather than accepting that challenge at the government level and allowing the public to become involved, they are allowing an increasing number of conflicts to arise. Rather than achieving some kind of resolution of these problems in advance, we will see conflicts between fishermen and loggers, between miners and foresters. Inaction will create serious social problems which really do not need to occur.
One serious question we have to face-and certainly the government has never faced it-is how to maintain volume without entering further into the regime of bad forest practices in which we are presently involved. The budget gouges western and northern Canada to the benefit of Liberal patronage programs in the United States. I do not make either of those
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statements lightly. The funds for research and development in the following areas are examples of where I feel a considerable number of dollars should have been placed. I am speaking of hundreds of millions of dollars. I think, for example, of the harvesting and utilization of trees down to the size of ten centimetres. Right now in Canada there simply is not the development, either at the university level or within the industry, for the types of technology required for harvesting and utilization. On the northern Pacific coast one of our most serious problems is the leaving of small trees in the bush under nine inches in diameter at the butt. A lot of the timber slightly larger than that, particularly hemlock and species such as that, are simply dumped into the ocean after being brought out because the industry finds it cheaper to allow those trees to go to waste. So they drift up on the beach where they have a very serious and damaging impact. This is another area where the federal government has clear jurisdiction and should be involved. As these trees wash in and out with the tide they break off the kelp, disturb intertidal life, break the barnacles and that type of life off the rocks, and cause a serious decline of the inner beach areas. This has an impact on fisheries on the Pacific coast and a general impact on our whole biological system in British Columbia. I would say a similar situation exists in the maritimes as well.
It is in these areas that research and development and forward-looking policies would benefit us all rather than allowing these problems to accumulate until very serious damage has been done. A government which had any sort of progressive or imaginative policies would be dealing with these things now.
A crucial problem which we have experienced this year, perhaps more than in most years, has been the serious forest fire problem. An area about six times larger than the area which will be cut this year was burned, particularly in Ontario and Manitoba. The government is doing nothing in terms of research and development to utilize and harvest those burned trees so that they can be put to a wide variety of uses, as has been demonstrated in other areas of the world. The national allowable cut in Canada is now 200 million cubic metres per year with about 150 million cubic metres per year actually being harvested.
The area that was burned this year was larger in size than Great Britain. It consisted of some 240,000 square kilometres. Interestingly enough, that is almost exactly the same size as the area which has been left. It is an area which was cut in the past several decades; it was formerly productive land and now it lies unsatisfactorily restocked. I think we should take a close look at that. The industry harvested generally the valley bottoms and heavy rainfall areas that had been cut. There are washouts, the soil disappears and the companies are not forced to go back in to do proper reforestation and silviculture. Those areas lie idle. History speaks for itself in relation to issues such as this. We can see enormous, barren areas, for example, in northern Africa and other parts of the world which were

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improperly harvested and never restocked and have turned into desert.
Where is the federal government? Where are the funds for R and D, for such things as hog fuel, briquettes and development for industrial use? Certainly the forests will become one of our major areas of energy production and we simply are not moving into that area at all.
Cutting, milling trades and training in the use of hardwoods are classic examples of small, almost cottage-sized industries which could be utilized in the maritimes, throughout Quebec, Ontario and very much so in western Canada for such products as furniture, wall and floor coverings. The reason you do not see a lot of cottage or small hand-logging operations in these areas is that the R and D has not been done and is not being done for that type of utilization, for providing practical small kiln operations, small milling operations for the individual tradesman and producer. Twenty per cent of the merchan-disable volume of timber in Canada right now is hardwood. Yet it is only 5 per cent of the harvest. That is a shameful thing for a country to be admitting when such woods as we see here in the House of Commons may never be seen again in this country if we do not get some decent silvicultural practices under way. Basic efficiency is what research and development should encourage.
In relation to milling, for example, some of the small countries which have no indigenous forest population are the ones which are moving the most quickly. In the area of laser and sonar the Japanese have moved very quickly. Last year, 30 per cent of the cypress or yellow cedar which was moved from British Columbia and sent directly to Japan was milled in Japan. There they make full use of laser and sonar production whereby the log is actually sized by sonar; they know where the knots, tapers and cracks are and they know where the bark is. It is completely sized, it is computerized and it is cut with almost no sawdust and almost no waste.
For a country like Canada to be simply mining our forests at a time when that kind of technology is being created is just not good enough. If we simply had the R and D to bring some of that fundamental technology here so we could expand it and make full use of the products we have here in Canada, making not only more jobs in R and D but more jobs within the industry, it would avoid the conflicts we are likely to see in terms of multiple resource use. The complexity of the situation is compounded by a government that simply will not act in an imaginative fashion and get the R and D money moving.
The great grab of prime first-growth in Canada is almost over, yet the forest sector still accounts for over 18 per cent of our exports. I am sure there are not many members sitting in the House today who recognize that it makes a larger contribution to the Canadian economy than agriculture, mining, fishing and petroleum put together.
Federal funds available last year were less than $130 million. I differ from my friends to the right here who say they made a dramatic expansion in last year's budget. They did make a number of progressive moves, certainly in relation to putting in place an assistant deputy minister to deal with
forestry at the national level. I certainly compliment them for that move, and not the members on the opposite side.
Less than $200 million will be spent this year on R and D in the forest industry. I would point out that this amount is exactly half of what was put aside for R and D in relation to forestry ten years ago. A decade ago we were putting in twice as much in terms of real dollars. I think that is a pretty shameful comment on the minister who rose in the House earlier today and indicated that he really was going to move hard in the field of research and development. Out of the $20 billion in relation to the export of products in the forest industry, only $35 million, as was pointed out earlier today, will be spent on research and development in this industry. This is less than two-tenths of one per cent of the economic value and is a shameful comment in relation to this industry, not only in Canada but anywhere in the world.
There is nothing in the budget, even with a national economic and unemployment disaster on our horizon. It is quite clear that the shaving away of forest land and the serious problems which are occurring now are caused by prime cuts which have come off and are being replaced by much smaller second growth. Quite frequently, for example, when red cedar or Sitka spruce or Douglas firs are cut down, the second growth you naturally get back is composed of alder or some of the less valuable species such as hemlock. This certainly happens in the province of British Columbia for which I can speak, knowing the forest industry in that region quite well. Yet such simple techniques as better reforestation-and when I say that I mean the entirety of silviculture from the collection of the seeds, to the growing of the small seedling, to planting it and caring for it, in terms of thinning processes and so on-is good investment. As my hon. friend from Regina East pointed out, investments of that sort are good investments. You invest a few pennies today and you collect many dollars down the line. It is only a very shortsighted government, interested in clutching and grabbing straws close at hand, which would overlook the importance of reforestation in Canada today. To invest a few million dollars in the next few years would create billions of dollars over the next 20 years. Forest management on the east slope of the Rockies in Alberta would do a number of very profound things, not only in relation to wildlife, the aesthetics of the area and the potential forest harvesting; it would allow more water to drain into the river systems, which provide Canada with its very strong and important agricultural base. But nothing is being done either in the budget or in policies of the government to deal with this very serious and pressing problem. Better processing would save a minimum of 20 per cent of the product yield.
Earlier I mentioned laser and sonar technology. It is an area in which Canada, of all the countries in the world, should be moving ahead the fastest, but we are not. At least 1.5 per cent of the forest industry gross product should be allocated to research and development. As I said earlier, the figure is presently only .2 per cent. We must move ahead by at least a multiple of 7 per cent or 8 per cent before we will even be on a
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standing with some of the very small countries which have no indigenous forest populations.
Increased expenditures on research and development will not only give us a better, more saleable, less expensive product, but will give us faster growing trees and more jobs. Again, it comes back to the energy sector. 1 recognize that the Canadian Forest Service and Federal Research Service are doing something in the area of small, rapid growth tree harvesting in their investigations of methanol production for possible replacement. 1 think it is an excellent idea. One of these days members of this House will wake up and realize that gas and petroleum were produced tens of thousands of years ago from growing plants. Ultimately, the light will go on in our minds and we will recognize that we will be required to obtain our energy from the sun, through plants and biomass. Research and development is an investment that would pay off handsomely. Instead, what we have is a Liberal policy, that, rather than pay-off, gives us lay-off, in excess of 1,000 people a day.
The staff decrease in the forest service is 138 this year at a time when we are not even approaching sustained yield. The forests of this nation are being mined, particularly by federal forest policy. Less than five cents of each dollar of tax revenue going to the federal-provincial coffers is being spent on silviculture. The Canadian Forestry Association, for example, estimates that 20 per cent of the land is receiving little or inadequate regeneration at the present time, and that is a 1980 figure.
That figure is quite different from the figure given by the minister earlier today. He said that 12 per cent of our prime forest land is inadequately stocked. We can quibble over the difference between the word "little" and the word "inadequate", but certainly he estimates about half of what is estimated by the Canadian Forestry Association. However, he does admit that we are falling back in restocking our forest lands by at least 500,000 acres a year. I took these figures from a recent speech made by the minister. Yet he wants to increase the cut by 50 per cent by the year 2000. In my opinion that is total, irresponsible Liberal hypocrisy. When one sees the figures on what is happening in the forest sector, to propose to increase the cut by 50 per cent without investing any R and D money is absolutely hypocritical. The Minister of State for Science and Technology and Minister of the Environment once said:
Knowledgeable opinion is unanimous that Canadians must spend more money to maintain our country's forests.
Then he went on to say that Canadian forest service has 50 per cent fewer staff than in 1968 when the Prime Minister came to office, and that the purchasing value of the budget this year is less than half of what it was nine years ago. It is a very shameful comment on R and D in the forest service in this country. The minister also said:
It is my intention to strengthen federal involvement in forestry.
That is an absolutely ludicrous statement. How can he strengthen investment by cutting research and development, cutting staff and cutting the budget in half? It is the ultimate in double talk and attempted public deception. It is time we
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matched the annual cut with annual production on those lands which have been and are being cut. Is that not sustained yield? For example, 13 per cent of our pulp now goes to newsprint and 30 per cent to wrapping paper. Where is the research and development in this country on recycling that paper or the government input to see that recycling becomes a real part of conservation in Canada? Think of the impact on jobs and conservation if the money used for the goose and beaver ads were used for conservation purposes instead of for sheer political propaganda.
This brings me to my concluding remarks concerning what I call the fall-down effect. First, the forest base is shrinking, as is demonstrated by scientific evidence. Second, second growth which is smaller in diameter and smaller in volume of wood will create an impact on the industry. Third, there are fewer R and D dollars coming from the federal government. Fourth, there are fewer innovations in silviculture, pest control and enhanced growth. Fifth, there are fewer new products for local and international markets-this, again, will have an impact on our balance of payments and industry within Canada. Sixth, there is less education for conservation and product recycling, and this comes at the same time as the government is cutting back funds to post-secondary education in the R and D field of forestry.
There are fewer scientists being produced due to the lack of these funds and there are fewer staff due to the Liberal cutbacks which I have already outlined and can be confirmed in this year's main estimates. There are lost jobs due to the economics of scale in the industry, and this, too, is creating a very serious problem. None of my information has been disputed in this House, nor do I expect that it will be in the near future unless the government completely changes its policies.
The Liberals are eager to get into the profits of gas and oil in western Canada. In my view there lies the true nature of that party. In relation to the forest industry and to R and D, it has put nothing into these areas even when they are on the decline. But because prices are beginning to move up in the oil and gas industry, the Liberal hand goes in to grab.
Today's message is not new. In 1871 Sir John A. Macdonald said:
We are recklessly destroying the timber of Canada and there is scarcely the possibility of replacing it.
That was said well over 100 years ago. I will conclude with two very short statements. In one area of my riding a Crown corporation ordered five million seedlings from Victoria this year, but only one million will be delivered and by no means will all those seedlings survive. A totally new, totally Canadian-owned operation to make pressboard in Smithers, in my riding, was turned down by this government through DREE in favour of a foreign-owned eastern Canadian operation. Those two statements speak for themselves, as does today's motion, and it is all because of the budget introduced on Tuesday.


Mr. David Weatherhead (Scarborough West):: Mr. Speaker, my hon. friend, the Minister of State for Science and Technology (Mr. Roberts), described earlier this afternoon the

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action of the government in spurring greater research and development in Canadian industry. Innovation and technical change are central to Canada's future manufacturing performance. They have and will continue to receive very strong government support. In addition there were excellent examples of practical results of the government's recent programs outlined earlier today by the hon. member for Gloucester (Mr. Breau) and the Parliamentary Secretary to the Minister of Industry, Trade and Commerce (Mr. Laniel).
But greater effort in R and D and innovation, however critical to our industrial strength, is by itself, not a sufficient response to the competitive pressures that Canada faces in the 1980s and beyond. Drastically higher prices for energy and changes in the international trading environment are only two of the most obvious of these pressures. Exposure to ever more aggressive competition and import penetration from the newly industrialized countries, in standard technology products, and from a number of developing countries in low technology, labour-intensive products and resource commodities are also extremely significant factors in the new economic environment that confronts the traditional industrialized world.
A successful response to this environment will call for imaginative government action and leadership on a broad front. Without such a government commitment, there is no assurance that Canadian economic performance will be maximized or that we can even keep pace. I want to take a few moments to sketch out the dimensions of this commitment.
An overriding government task is to seek to maximize efficient activity in all regions of Canada based on economic strengths and, especially, the resource strengths that can spearhead development in the west and Atlantic regions, although with benefits accruing to all of Canada. To achieve this, the government has recognized a need for developmental assistance to ensure that major growth opportunities, for instance, in advanced technology industries and in resource supply and further processing sectors, are captured, and measures to ensure that Canadian firms are able to participate competitively in supplying the engineering expertise, the equipment and the new technology required for the expected massive energy and resource development in the coming years.
These are necessary because it is far from assured that the development of our energy supplies will bring significant longterm industrial benefits.
Another overriding consideration, closely related to the constitutional reform process, concerns the strengthening and maintenance of the Canadian common market. In a world characterized by economic entities five to ten times more populated than our own, such as the United States, Japan and the European economic community, the last thing Canada needs is fragmentation of its own domestic market. On the contrary, we need to find the means for establishing and maintaining the largest possible domestic market as an essential prerequisite of a more efficient, more productive and more internationally competitive economy. This is one of the fundamental objectives of constitutional reform, yet it is an objective on which we have just begun to make progress.
The government is also committed to, first, adjustment policies focussing on productive investment rather than subsidy to encourage the movement of resources to strong and potentially strong industries and potentially strong subsectors in less dynamic industries at a rate sensitive to social considerations.
Second, it is committed to influencing firms with a significant impact on the economy to pursue innovation and product development in Canada, expansion of exports and sourcing of equipment, components and services on a competitive basis from Canadian suppliers.
Third, this government is committed to encouraging Canadian ownership and control of this country's productive assets and ensuring that foreign investment, to the extent that we require it, adds to our ability to take full advantage of the opportunities that are opened up to us. Fourth, the government is committed to assistance to firms to obtain access to and develop markets abroad, including the development of a concept for a national trading corporation and of more effective export financing programs.
These measures in industrial development, all of which, by the way, are consistent with the government's campaign and throne speech commitments, are not an exhaustive accounting of the elements of a national industrial policy. Nevertheless, they demonstrate the wide range of needs and problems which the government is addressing, and addressing imaginatively, flexibly and co-operatively with business and labour to stimulate the maximum realization of the country's economic potential.
The federal budget of last Tuesday states that the total increase in the economic envelope expenditures over a three-year period, from 1980-1981 to 1983-1984 will amount to $6.49 billion. Of the $6.49 billion, approximately $4 billion will be spent on new western initiatives. Particular attention in the western initiatives program will be directed to infrastructure development, such as grain handling and transportation, which is intrinsic to economic development in the west and also to industrial diversification in the west.
Over the three years, in addition to the $4 billion on the western initiatives program, there will be at least $2.49 billion allocated to research and development, expansion and modernization of industrial capacity, and other elements of the government's economic development plans.
The budget also pays special attention to the economic development problems of less developed areas. The speech announced a special allocation of $350 million to deal with the industrial restructuring and labour adjustment problems in regions of particular need. There is also a new investment tax credit which will pay to investors 50 per cent of manufacturing investments made in high unemployment and low income regions of the country.
The energy package is particularly important to the promotion of economic development. The made-in-Canada pricing schedule will ensure maintenance of a strong competitive edge
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for domestic manufacturers. The energy package also envisions the expenditure of enormous sums of money which will have multiplying economic development impacts. For example, the oil substitution component will comprise $1.6 billion of expenditures on things such as conversion grants and conversion of federal buildings, which imply great opportunities for industries suppling conversion equipment. Similarly, the $1.15 billion that will be spent on conservation and renewables will involve industrial development opportunities and government assistance to improve energy efficiency and so modernize and enhance productivity of a great number of industrial plants throughout the country.
Finally, the greater control the federal government is obtaining over the development of the energy sector through new regulations and the new regulations and the new treatment of Canada lands will ensure that Canadian industries in all parts of the country can share in the industrial benefits of energy development. For example, the new oil and gas act will ensure that a high level of Canadian goods and services is employed in oil and gas activities carried out on Canada lands. Applicants for exploration and production rights will have to demonstrate how their operations will bring industrial and employment benefits to Canada, both in the region of interest, and elsewhere in the country. Where applicable, companies will be expected to put in place special training and employment measures, particularly for native Canadians.
I want to stress that in the task of putting together the complex of policies and programs necessary to ensure a bright
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industrial future for Canada, the government has and will continue to rely on the advice and co-operation from the Canadian public, especially groups representing business and labour. Recent examples, such as the Tier I and Tier II committees and the Hatch committee, indicate that when business and government focus on specific problems or actions, wide areas of agreement can be found. Currently there is the important work of the Blair major projects task force which is examining the long-term contribution of major capital projects to the growth of the Canadian industrial and technological base. Mentioned as well should be the important but less visible contacts of ministers and government officials on an ongoing basis with government and labour.
We are now moving from agreement to action on many fronts. I expect that my colleague, the Minister of Industry, Trade and Commerce (Mr. Gray) will be in a position to announce some of these measures to the House in the near future. I am encouraged by the new interest expressed by the opposition parties in industrial policy and hope that when the government announces these measures it will have their full co-operation and support.
May I say again that I was pleased to take part in this debate. May we call it five o'clock, Mr. Speaker?


Mr. Deputy Speaker:: Order, please. It being five o'clock, it is my duty to inform the House, pursuant to Standing Order 58(11), that the proceedings on the motion have expired.
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, November 3, 1980