1981-02-24

ROUTINE PROCEEDINGS


Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam Speaker, 1 rise under the provisions of Standing Order 43. After considering the cumulative negative effects of the government's National Energy Program and the MacEachen budget, as well as allowing for the increase in information about the long-term effects on Canadian prisoners of war of prolonged incarceration, I move, seconded by the hon. member for Peterborough (Mr. Domm):
That this House direct the Acting Minister of Veterans Affairs to review the rate at which former prisoners of war are assessed and increase these rates to compensate for the present 12 per cent rate of inflation and the adverse effects of the budget and the energy program on their pensions.


Some hon. Members:: Hear, hear!


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE PRIME MINISTER
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, whereas the Prime Minister (Mr. Trudeau) made several misleading statements last weekend in Vancouver, including a claim that he would have liked to see the constitutional powers over communications and fisheries given to the provinces, and also that he personally would favour a different constitutional amending formula which does not grant a discriminatory veto to Quebec and Ontario, and whereas these statements are clearly contrary to his widely stated policies, I therefore move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That in accordance with the Prime Minister's public offer to resign if television personality Jack Webster would do likewise, this House hereby invites Mr. Webster to accept the Prime Minister's challenge and resign as an act of patriotism so that Canadians might be spared from further verbal contortions by this inconsistent Prime Minister who is so "exhilarated" over the divisions which he has produced in our country.


Some hon. Members:: Hear, hear!


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


HUMAN RIGHTS
Mr. Edward Broadbent (Oshawa):: Madam Speaker, considering that members of all parties in this House have expressed their abhorrence of all forms of racism, I hope this motion will receive the unanimous agreement I think it deserves.
In view of the fact that Canada is a country which was built through the co-operation of people from all ethnic and racial groups, and since Canada prides itself on its heritage of racial and ethnic tolerance, I move, seconded by the hon. member for Vancouver East (Mrs. Mitchell):
That the House expresses its horror at reports that the racist Ku Klux Klan is now organizing four camps in southern Ontario to provide military and arms training for its members.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


An hon. Member:: No.


Some hon. Members:: Shame!


THE MINISTRY
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I rise under the provisions of Standing Order 43. The publisher of the Windsor Star has recently indicated concern about the

February 24, 1981
quality of MPs representing that area. He stated on February
12:
Our MPs are run a little ragged, I hear, worrying about the Constitution, corporate assistance and surplus eggs.
He went on to say:
Windsor, Ontario is a forgotten city.
In view of this crisis I move, seconded by the hon. member for Peterborough (Mr. Domm):
That the federal government follow the precedent set in the Broadview-Green-wood affair and appoint competent cabinet ministers to be responsible for the ridings of Windsor West, Windsor-Walkerville and Essex-Windsor.


Some hon. Members:: Hear, hear!


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORTATION POLICY-MOTION UNDER S.O. 43
Mr. Charles Mayer (Portage-Marquette):: Madam Speaker, western Canada's problems with grain transportation are well recognized and studied. Recently four ministers of the Crown, the Minister of Transport (Mr. Pepin), the Minister of Agriculture (Mr. Whelan), the minister responsible for the Canadian Wheat Board, and the Minister of State for Economic Development have each stated different positions on when and how they believe the government should proceed with the solution to this urgent national problem. I move, seconded by the hon. member for Lisgar (Mr. Murta):
That the Prime Minister assume his responsibility for this very important national issue of grain transportation by getting his own cabinet to agree on one policy to take to the farm community on grain movement, thereby setting an example for the rest of the country on how to achieve consensus on pressing national issues.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FARM CREDIT CORPORATION
Mr. Vic Althouse (Humboldt-Lake Centre):: Madam Speaker, farm bankruptcies in Canada were up 78 per cent in 1980 over 1979, a fact which is clearly attributable to the unusually high interest rates. Therefore, under Standing Order 43, I
move, seconded by the hon. member for The Battlefords-Meadow Lake (Mr. Anguish):
That this House request the Minister of Agriculture to increase the funding of the Farm Credit Corporation immediately by an additional $150 million as requested by farm groups such as the Canadian Federation of Agriculture, and further, that the Minister of Finance investigate an assistance program for small businesses and farmers to help them get through this period of ridiculously expensive credit.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


COMPENSATION PAYMENTS TO FARMERS FOR EMBARGO ON SHIPMENTS TO RUSSIA-MOTION UNDER S.O. 43
Mr. Bill McKnight (Kindersley-Lloydminster):: Madam Speaker, under the provisions of Standing Order 43 I rise on a matter of urgent and pressing necessity to the farmers of western Canada.
In light of the many shallow promises made by various cabinet ministers on compensation announced for western farmers regarding the grain embargo to the U.S.S.R., and in light of the fact that the initial adjustment payments have been announced but so far the farmers have not received any money, I move, seconded by the hon. member for Assiniboia (Mr. Gustafson):
That this House instruct the federal government to announce compensation payments to farmers immediately, and that the Canadian Wheat Board be instructed to place the interim payments for this crop year in the hands of the farmers.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIR TRANSPORT
Mr. Lome Greenaway (Cariboo-Chilcotin):: Madam Speaker, I rise under the provisions of Standing Order 43. Since Transport Canada has announced that First Air, a southern Ontario airline, has been awarded a licence to service the first Frobisher Bay-Godthaab, Greenland, air route without even allowing Air Inuit to submit an application for the route, in view of this unfair procedure, and in light of the fact that it would be most appropriate for an Inuit-owned and operated airline to service the two largest Inuit communities in Green-

land and Canada, I move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):
That the Minister of Transport re-open the competition in order to give all licensed carriers an equal and fair opportunity to apply for the operation of a scheduled air service between Canada and Greenland.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


DEPARTMENT OF NATIONAL HEALTH AND WELFARE
Mr. Bill Domm (Peterborough):: Madam Speaker, the Minister of National Health and Welfare (Miss Begin), in a letter to the mayor of the city of Peterborough, dated May 22, 1979, said, and I quote, "I am pleased to advise that the date for the establishment of a regional office in your city is April, 1982. It is expected that approximately 150 Health and Welfare Canada jobs will be located in Peterborough. My officers are working with the department..." to see that this happens. I move, seconded by the hon. member for Durham-Northumber-land (Mr. Lawrence):
That the Minister of National Health and Welfare having given her word, now stand by that commitment, and allow the regional office of Health and Welfare to locate in the city of Peterborough.


Madam Speaker:: Is there unanimous consent to this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL DEFENCE
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, I rise under the provisions of Standing Order 43. Yesterday McDonnell Douglas of Canada announced that a further 248 workers would be indefinitely laid off at McDonnell Douglas' Toronto plant. This brings to 864 the number of workers laid off since Canada signed a $4 billion contract with McDonnell Douglas for the purchase of F-18 fighter aircraft, a contract that was supposed to create jobs for Canadians, not more unemployed. In light of this situation, I move, seconded by the hon. member for Beaches (Mr. Young):
That this House condemns the government for its failure to secure from McDonnell Douglas firm commitments of job creation for the Canadian workers
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it employs, and further, that this House instructs the government to renegotiate the F-18 contract so that firm job-creation commitments for Canadian workers are included in the industrial offset package.


Madam Speaker:: Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Madam Speaker:: Oral questions.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is directed to the Minister of Finance who spoke yesterday to a luncheon meeting of the Canadian Club in Montreal and indicated that it was the policy of the Government of Canada to, and I quote:
-encourage the movement of productive resources from those industrial activities with diminishing prospects to strong and potentially strong industries and subsectors.
I gather that this is the beginning of the much heralded, long awaited industrial strategy the government has been talking about for so long. Can the Minister of Finance tell the House of Commons, since he has spoken of industries with diminishing prospects, just what criteria the government has established, and will he identify those sectors of Canadian industry that the government considers to have diminishing prospects?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, in the budget speech I think I stated that there was bound to be, in a dynamic economy, changes in the composition of the labour force, and that certain industries would have to adjust to changing conditions. It seems to me that it is essential to the future strength of the Canadian economy that we take advantage of strong sectors and, where necessary, assist weaker sectors to adjust, not necessarily to go out of business but to adjust to new products and new lines of activity. It seems to me that unless we take account of that particular problem, the over-all strength of the economy will be weakened.
I would just add, in conclusion, that the adjustment program announced by the Minister of Industry, Trade and Commerce and the Minister of Employment and Immigration, addresses the question of adjustment and has adopted the approach of designating certain communities that might be eligible for particular adjustment assistance. I am not aware of the extent to which that process of designation has been implemented to the present time.
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February 24, 1981
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Charles Joseph Clark: Madam Speaker, the minister is the master of the empty generalization. We had his budget six months ago, the so-called budget-it was not one at all. We had the Minister of Industry, Trade and Commerce, shortly before he offered to resign, promising a national industrial strategy. Now we have the minister going before a national forum to indicate that there are specific industries the government has in mind which have diminishing prospects. Obviously the government is planning that kind of thing. Obviously it has decided which industries are going to be the victims. We want to know, and investors and employees across the country have a right to know, exactly which industries are on the government's hit list. Which industries does the government believe have diminishing prospects? What is it talking about? Can the minister please be specific and give the House his criteria and his list?


Allan Joseph MacEachen: Madam Speaker, we have no hit list. I believe the Leader of the Opposition ought not to take a destructive and despairing attitude about this approach. On the contrary, it seems to me that he ought to be supporting an approach that takes a positive attitude toward adjustment of the economy. We have a number of illustrations presently of a number of industries, for instance, the textile industry, in which the government, through its programs, is assisting and has assisted that industry to adjust to changing conditions. In my speech to the Canadian Club in Montreal I added that, for example, we have participated with the provinces and with the firms in the pulp and paper industry in assisting them to modernize and meet new challenges in the market. It seems to me that that is the positive light in which the right hon. member ought to look at these comments, instead of making the empty generalization that there is a hit list.


AIMS OF INDUSTRIAL DEVELOPMENT STRATEGY
Charles Joseph Clark: Madam Speaker, we are quite prepared to support any program and any attitude that is open and up-front with the Canadian people. What concerns us is that we have an industrial strategy being concocted in secrecy by this government for more than a year and having plans developed prior to that time, so there has been a lot of planning going on. Obviously there are specific industries which have been designated. The minister has moved himself to speak about certain industries with diminished prospects and certain industries that are strong. If he will not tell us the industries which he believes have diminishing prospects under his government, will he table in this House of Commons a list of those industries which he believes to be strong, or potentially strong? The whole country will then know what the aims of this industrial strategy are, so that we can bring it out in public and not keep secret an industrial strategy which should not be confined simply to bureaucrats in Ottawa but should be the result of the participation and the debate of Canadians across the country where concerned.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Madam Speaker, I draw to the attention of the Right Hon. Leader of the Opposition another aspect of the adjustment policy with which he ought to be familiar, because it was under his government that final approval was given to the General Agreement on Trade and Tariffs which, in the main, had been negotiated by the preceding government but which was approved totally by the succeeding government, despite the barrage of criticisms that we had received from the opposition benches during the negotiating process. He will recall that under that particular arrangement there is an adjustment provision by which industries affected by increased international competition, as we move into the GATT period, will be assisted and will be ensured of a place in the new marketing arrangements. The Right Hon. Leader of the Opposition ought not to try to shroud this particular approach in mystery. If he had just read his briefings when he was Prime Minister, I would not have to tell him about these things today.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


ADJUSTMENT AID FOR INDUSTRIES FACED WITH DIMINISHING PROSPECTS
Hon. John C. Crosbie (St. John's West):: Madam Speaker, my question is a supplementary one for the Minister of Finance. The Minister of Finance had a lot to say before he became the minister. Now he has become the silent minister. But he spoke yesterday.
The minister is going to encourage the movement of productive resources, that presumably is cash, from certain industrial activities with diminishing prospects. The businessmen and people of Canada want to know from what diminishing prospect industries is the minister going to move those productive resources because the private sector does not want to invest in the productive resources of industries which are going to diminish. Will the minister tell us this: is it textiles? Is it footwear? What are these industries with diminishing prospects? What are the strong industries? Perhaps he could inform the private sector so that it will invest also in the strong and not in the weak. Will the minister come clean with the House? I say to him, don't be so mysterious. Don't be afraid to give us details of your bold proclamation of policy yesterday which sounded so good at lunch time.


Allan Joseph MacEachen: Madam Speaker, it did sound well, and it was applauded by the discerning audience at the luncheon-


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: -an audience which was made up largely of businessmen who did not shrink in fear from knowing that the market from time to time indicates increasing demand for particular products and decreasing demand for other products. As a result of these market decisions, particular industries
February 24, 1981

have to adjust to new circumstances. That is what I am talking about. Where particular firms and industries have these problems, it will be the intention of the government to assist them to adjust to conditions which have been determined by the marketplace, not determined by the government, of that I want to assure you, Madam Speaker.


Some hon. Members:: Flear, hear!


John Carnell Crosbie: Madam Speaker, it would have to be a discerning audience to know what the minister meant when he won't tell them. I ask the minister: why don't you bring the people of Canada in on it? The people of Canada are discerning. Their jobs are the ones which will be lost, and it is their prospects which the minister is talking about. Silence is golden, but with this minister, silence is no longer golden. We want to know what is to happen, Madam Speaker. We do not want weak-kneed generalities, we want to know what the policy is.


AREAS AND COMMUNITIES AFFECTED BY GOVERNMENT POLICY
John Carnell Crosbie: Could I ask the minister my supplementary, Madam Speaker, and relieve your burdens? The minister also said that the process of adjustment will not be easy and the burden will fall relatively more heavily on particular areas and communities. On what particular areas and communities in Canada is the minister's policy to fall more heavily? What are those areas and communities? Is it Nova Scotia? Is it Cape Breton? Is it Newfoundland? Is it Windsor? What are the areas and communities which are going to suffer this heavy burden? Will he enlighten the people of Canada about that? Will the minister stop his weak-kneed, bafflegabbing and knee-flubbing and give the people the facts?


An hon. Member:: Yes or no?


Allan Joseph MacEachen: Madam Speaker, I am glad that the Leader of the Opposition supported the hon. member for St. John's West by a compliment on that rather concluding question which tailed off into obscure generality.


John Carnell Crosbie: That's the area you dwell in.


Allan Joseph MacEachen: If the hon. member for St. John's West knew anything about the national economy, he would know about certain areas in the country that are experiencing particular difficulties. Let me mention one particular area, namely, the part of Nova Scotia I represent, the island of Cape Breton.
The hon. member for Cape Breton-The Sydneys recently wrote to the Minister of Industry, Trade and Commerce and to the Minister of Employment and Immigration in recognition of the fact that there were special adjustment problems in that area, and asked that that area be designated for special assistance under the adjustment program. That is what we are
Oral Questions
talking about. Instead of trying to hide the weak areas of the country that require adjustment, we are prepared through an adjustment program to designate them upon their request, and then provide them with the necessary adjustment assistance. Therefore, let us have no more of the bafflegab, if that is the word, we get from the opposition.


DECLINE IN PRODUCTIVITY-EFFECT ON WORKERS
John Edward Broadbent: Madam Speaker, I have a question for the Minister of Finance. It also concerns his speech to the Montreal business establishment which he said was so well received. I can understand why it was well received. The minister said in his speech that, because of reduced levels of productivity, ordinary Canadian workers could not now expect higher wages, benefits or pensions. Since wages have fallen behind in each of the past three years as a percentage of the GNP while at the same time profits, dividends and other forms of unearned income have actually gone up as a percentage of the GNP, why did the minister single out ordinary workers as the people who would have to bear this burden? Why did he not single out some of the people who take all their income in the form of unearned dividends?


Allan Joseph MacEachen: Madam Speaker, if the hon. member reads my statement he will find that at no point did I refer to "ordinary workers" or suggest that for any particular reason they ought to be put in a category of those who are responsible for the decline in productivity in the country. The point I made was that for quite a number of years, for example, 1961 to 1973, productivity in Canada just about doubled. Instead of growing in the last number of years, productivity in Canada has declined. I want to add that if we expect to have a higher standard of living, the economy as a whole has to produce more in order that we may enjoy that better standard of living. It is a disservice to everybody to put our heads in the sand and ignore the fact that over the past number of years output per person in the labour force has decreased and, unless we turn that around, we have very little prospect of enjoying the rising standards of living which we had in the earlier period. That is the point.


John Edward Broadbent: Madam Speaker, what the minister said was long and some of it was actually accurate, but none of it answered the question I asked.
I read the minister's speech with care, if not with a lot of interest. On page one of his speech the minister said that working people's wages, pensions and social welfare, would have to be curtailed. Since it has been unearned income, profits and payments of dividends which have increased as a percentage of the gross national product for the last three years while workers' incomes have actually gone down as a percentage-and gone down in real terms-why has the minister singled out workers in this particular case to bear the

February 24, 1981
Oral Questions
responsibility for increased productivity and not some of the people in the blue chip audience to which he was speaking?


Allan Joseph MacEachen: Madam Speaker, as a graduate of the London School of Economics the hon. member for Oshawa is showing remarkable simplicity in his approach to this question of productivity. He knows perfectly well that productivity cannot be assigned exclusively to the activity of workers. That would be a stupid assertion.


John Edward Broadbent: It certainly would.


Allan Joseph MacEachen: It was not made by me. The productivity of the economy depends not only upon the work force but also upon the contribution of capital and many surrounding influences as well. What I did say, and what I will continue to say, is that if Canadians and the country as a whole want to provide for better pensions, higher wages, better social welfare and a better cultural life-these are laudable objectives, and I support them-and if we want to have all these things in greater measure, then we have to learn to produce more and increase productivity in the country. That is the simple question.


John Edward Broadbent: Madam Speaker, that was a simple answer. It was the second time in a row the minister did not answer the question asked. However, I will take a different tack. Speaking of the incompetence of graduates from the London School of Economics the minister just has to look to his left to see a living example.


Some hon. Members:: Oh, oh!


An hon. Member:: Left, Pierre.


STUDY OF WAGE RESTRAINT PROGRAM
John Edward Broadbent: Since it is obvious that the government has rejected a fair prices commission in the past and has turned down a tax cut for middle and low-income people, making it clear that ordinary workers will have to struggle for themselves if they are to get anything out of this economy, will the minister deny that right now his department is considering some form of wage restraint program which it might bring into play if the workers in this country should finally, after three years, manage to get wage and salary increases commensurate with the level of inflation?


Allan Joseph MacEachen: Madam Speaker, I certainly would not accuse the hon. member of incompetence. I have such a high regard for the institution where he studied that I thought he would have a much broader understanding of economic forces. I might add that I have noticed that some graduates are better than others.


Some hon. Members:: Hear, hear!


John Edward Broadbent: I have too.


Allan Joseph MacEachen: The answer to the question is that there is no plan in my department-if that is the question-to launch a program of wage and price controls.


John Edward Broadbent: That wasn't the question either.


Allan Joseph MacEachen: There is absolutely no plan, and I am not making any such recommendations to my colleagues. I encourage all members of the department to assess circumstances and brainstorm, but certainly if that storm reaches my desk it will be swept away mighty fast.


GOVERNMENT EXPENDITURES
Hon. Sinclair Stevens (York-Peel):: Madam Speaker, my questioning is also directed to the Minister of Finance. I want to take him back again to the speech he made in Montreal which he says was received with at least courtesy. Would the Minister of Finance indicate to the House why he did not reciprocate to the members of the audience and at least give them accurate information? I specifically refer him to the following statement he made:
The government's expenditure plan, in particular, was established to keep federal spending within the rate of growth of the economy in order to ensure a steady reduction in the deficit-
Bearing in mind that the minister released only two weeks ago the expenditure levels in Ottawa for the first nine months of this fiscal year, which indicated a 16 per cent increase in expenditures and a $1 billion increase in the deficit, would the minister indicate why he felt justified in misleading his audience in Montreal that in fact a 16 per cent expenditure increase is in line with the growth of the economy, which is actually below 12 per cent for the same period?


Allan Joseph MacEachen: Madam Speaker, I do not think the hon. member is justified in comparing a nine-month expenditure flow with the projections contained in the budget.


Sinclair McKnight Stevens: Look at your release of two weeks ago.


Allan Joseph MacEachen: With the release of a few weeks ago I stated a certain expenditure growth for a nine-month period to compare that with the objective of maintaining expenditures of the government within the trend line of the gross national product.


John Carnell Crosbie: You didn't say trend line.


Allan Joseph MacEachen: I want to tell the hon. member that my objective, as shown in the budget papers, is at 1983-84 not to take any more out of the economy than is being taken out at the beginning of the period. In other words, with the flow of income we will not take a greater share for the government. That is the principle on which I have been operating, and I do
February 24, 1981

not think the hon. member can test it on the basis of a nine-month expenditure flow released by the department.


Sinclair McKnight Stevens: Madam Speaker, I remind the Minister of Finance in asking my supplementary question that he did not refer yesterday to a trend line in the economy. He said he would keep expenditures within the rate of increase of the economy.
However, let me take the Minister of Finance back to the other statement he has referred to with respect to the hiatus point of 1973. He said that in the 12 years to 1973 real gross national product doubled. However, then he went on to state:
In the seven years since 1973 . . . our average annual rate of growth has been cut in half, and our rising expectations or sense of entitlement has served only to fuel the inflation that we have come to know all too well.
Would the Minister of Finance indicate why he then chose to go on to blame the workers, for failing to produce the productivity that he says is essential, without making it clear to his audience that in the same 12-month period the total aggregate federal deficit was only $5.4 billion compared with the last seven years when his government has run up a $48 billion deficit, a 750 per cent increase? Clearly that is what killed productivity. It is bloated, fat government at the federal government level, not the workers of this country.


Allan Joseph MacEachen: Madam Speaker, I cannot blame the London School of Economics for that outburst. I will have to find a different university.


Sinclair McKnight Stevens: Western.


Allan Joseph MacEachen: I am pleased that hon. members have paid some attention to the speech made in Montreal because I did want to focus the minds of people in the country and the House on the question of productivity. I went on, if the hon. member will permit me to say so, to analyse very carefully what I thought were major areas in which steps ought to be taken in order to increase growth and investment and, accordingly, productivity in the country.
At no point would I be inclined to point the accusing finger at the workers of this country because there is absolutely no evidence that workers are not putting out as much as they have in the past. However, there is evidence that there are other factors which are decreasing the productivity of the country. Some of them are irreversible. Some can be turned around, and the deficit is not very much a part of that over-all picture.
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sector of the petroleum industry and particularly on the stranglehold on supply that the independents in the province of Quebec are facing. What representations is he making to correct the situation?


Hon. Charles Lapointe (Minister of State (Small Businesses)):: Madam Speaker, my colleague, the hon. Minister of Energy, Mines and Resources, and myself have had several meetings with the independent oil distributors, especially those in Quebec, as well as with the Alberta independent exploration companies. All necessary action is being taken to ensure a regular supply to the independent distributors in Quebec and we are monitoring the situation daily.


Mr. Huntington:: Madam Speaker, I have a supplementary question for the same minister. I am wondering whether I could ask him if Petro-Canada, by any chance, will come to the aid of the independents? Will there be more or less competition now that Petro-Canada has joined the majors? Will there be an increase in supply for the independent sector of Canada, or will we see all the independents lost the way Merit was in Burnaby, British Columbia?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, this is a specific government policy which is clearly stated in the energy program and which aims at maintaining a strong and vigorous independent sector in Canada. In the specific case mentioned by the hon. member, I must point out that before it was taken over, Petrofina was already helping to supply the independent distributors of Quebec, and I am convinced that Petro-Canada will want to maintain this policy and perhaps even emphasize it if required. Discussions are now going on with the independent distributors and we shall determine their exact requirements.



EXPORTATION OF COAL FROM BRITISH COLUMBIA TO JAPAN


Arthur Ronald Huntington: Madam Speaker, I have a question for the Minister of State for Small Business. I wonder if he could update the House on the representations he has been making to his cabinet colleagues on the sorry plight of the independent wholesalers and retailers in the downstream


Mr. Ian Waddell (Vancouver-Kingsway):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources, although I should like to point out to the Deputy Prime Minister and Minister of Finance that the hon. member for Oshawa, the hon. member for Burnaby, and myself actually graduated from the London School of Economics, unlike the fellow to his left.
My question to the Minister of Energy concerns the Northeastern British Columbia Coal deal. The minister will recall that last week I asked him a question which revealed an internal document of the British Columbia government. Now I

February 24, 1981
Oral Questions
have that document in my possession and will release it to him. Will the minister agree that the public should be entitled to know the figures behind this very important deal? Will he agree to release publicly all the documents in the possession of the federal government with respect to this deal?


Marc Lalonde: Madam Speaker, the government contributions required under this agreement have already been made public by my colleague, Senator Olson, the Minister of State for Economic Development. As for the release of some other documents, I shall ask Senator Olson, and I am convinced that he will be willing to make public the documents which would be available under the bill before the House concerning public information.


Ian Gardiner Waddell: Madam Speaker, I am pleased the minister is prepared to make these documents available, including all telexes, hopefully. I hope Mr. Basford, the new director of the northeastern coal development, for the province of British Columbia, will do likewise.



PIPELINES


Ian Gardiner Waddell: My supplementary question concerns another megaproject in British Columbia. Last Friday the British Columbia government announced that it would approve the building of a gas pipeline by British Columbia Hydro to Vancouver Island. During the announcement there were some unfortunate comments by the minister of energy for British Columbia. In spite of those comments, is the federal Minister of Energy still prepared to give British Columbia a financial commitment to help with the building of this line?


Marc Lalonde: Madam Speaker, I will refer to my previous answer. I indicated to the hon. member that I would consult with my colleague in the Senate and that I was confident he would release the documents which would be available for publication under the public information bill being considered by the House at the present time. I would not like him to misinterpret what I told him in French.
As to his particular question, the decision announced by the government of British Columbia was obviously one taken by that government in its own wisdom. We have indicated that we were ready to negotiate or to discuss with the government of British Columbia the possible contribution for the building of a gas pipeline to Vancouver Island. However, the terms of those negotiations and the conditions under which there could be any federal contribution would be subject to negotiation. We would have to look at the exact plans of the government of
British Columbia, at why this particular option was chosen compared to another one, and then advise as to what amount of contribution, if any, is required in the circumstances. But we will be available for discussions.



DISASTERS


Mr. Marcel Roy (Laval):: Madam Speaker, my question is for the Minister of National Defence. In view of the alarming situation caused by flooding and the emergency this represents for hundreds of people who have to be evacuated, what is the policy of the federal government concerning available emergency services and equipment to help victims of the flood? Has the Quebec government already requested some assistance from the federal government?


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, I believe that the major responsibility of the Canadian Armed Forces is certainly to help Canadians when circumstances warrant it. We have provided such assistance in the past, in Manitoba, Ontario and elsewhere in Canada in the case of floods and forest fires. When we provide such assistance to a province, we have first received a specific request on the part of the provincial government. I must advise the hon. member that we have received as yet no such request from Quebec to give assistance to the victims of the floods. I may add, Madam Speaker, that our Armed Forces are always available if Quebecers or any other Canadians require any assistance.



CANADIAN NATIONAL RAILWAYS


Mr. Tom McMillan (Hillsborough):: Madam Speaker, my question is directed to the Minister of Transport. On February 4, 1981, the minister told the House that Canadian National Express on Prince Edward Island would continue to operate but with a reduction in staff from 41 to 19 positions. Contrary to what the minister told the House, CN officials have now informed the CN employees involved that no more than 11 of them will be kept and that the figure may be as low as two or three. Will the minister tell the House what he meant when he said that 19 positions would be saved? Are those 19 positions full-time, or do they include people who will be laid off and called back only on a relief basis at the discretion of CN ? In other words, have the figures been artificially inflated for political reasons?
February 24, 1981


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, the figure I mentioned, which was the 19 used by my hon. friend, is the figure which was guaranteed by CN Express to me. It represents full-time jobs, and I will see to it that it is honoured.


Thomas Michael McMillan: Madam Speaker, my supplementary question is directed to the Minister of Transport just so that the employees, the House and I will be entirely clear on what he is saying. Will the minister assure the House that he will not allow CN officials to reduce the number of CN Express employees on Prince Edward Island below the commitment of 19 full-time positions before 1983, when the entire matter is to be reviewed? Is it a commitment to save 19 full-time positions?


Jean-Luc Pepin: Madam Speaker, I can only say that I said about 19. There may be one or two more or less, but it does not mean ten more or less. It is about the figure I indicated. That is the commitment CN gave me, and I will see to it, as I said, that it is honoured.



INDUSTRY


Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, my question is directed to the Minister of Finance who earlier today mentioned government assistance to the textile industry. I will put a very direct question to him in the hope his response will not be all wrapped up in cotton wool.
As I am sure the minister is aware, the Textile and Clothing Board earlier this year made recommendations to the government regarding the extension of the quotas presently in effect on offshore imports. I would like to ask the minister very simply and very directly: when will the government consider these recommendations which were put forward by the Textile and Clothing Board, particularly in light of the fact that the arrangements are due to expire later this year?


Allan Joseph MacEachen: Madam Speaker, the intention of the government, if possible, is to have a response to the recommendations by the end of March of this year.



NATIONAL SECURITY


Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, my question is for the Solicitor General. In view of the public disclosure the week before last of the circumstances
Oral Questions
of a U.S. military attache in Moscow being entrapped by the KGB for blackmailing purposes, and in light of the public confession last weekend of a former British ambassador to Moscow of the same thing, which he said he publicized to alert the western world to the dangers of Moscow life and those same KGB policies, has the Solicitor General been made aware of any past occurrences of this type, or any potential blackmailing activity, which endangered Canadian or allied security?


Hon. Bob Kaplan (Solicitor General):: Madam Speaker, I have not been made aware of any such matters involving Canadian or allied security.


Allan Frederick Lawrence: Madam Speaker, would the Solicitor General make inquiries of his officials, now that other nations are exposing past occurrences, and report to the House some of these situations which have been hidden in the past on the grounds that these circumstances would endanger the security of those self-same allies?


Robert Phillip Kaplan: I would be glad to look into that matter and see whether there are any such matters which could be made public at this time.



PROPOSED REDUCTION IN ALBERTA OIL PRODUCTION

Mr. Maurice Harquail (Restigouche):: Madam Speaker, my question is for the Minister of Energy, Mines and Resources. It has to do with the Canadian supply of oil. In view of the announcement made by the Alberta government to cut back 150,000 barrels of oil as of March 1, could the minister inform the House as to the status of the negotiations and his assessment of what effect this will have on eastern Canada particularly?


Marc Lalonde: Madam Speaker, I have already indicated that I hope the government of Alberta will not find it necessary to resort to cutbacks, which would hurt all Canadians and Albertans in particular. Yesterday I wrote to the minister of energy in Alberta suggesting that since Alberta officials were not ready to make a report to their cabinet for at least another two or three weeks it seemed unnecessary to resort to the cutbacks at the present time. I also suggested that we should pursue the negotiations and discussions.
On the other hand, if the government of Alberta concludes that it wants to proceed with these cutbacks, then we will obviously have to find the necessary supply abroad. The necessary steps have been taken to ensure that Canadians will not suffer over the next few months in terms of supply.
Oral Questions NATIVE RIGHTS

February 24, 1981



LAND CLAIM SETTLEMENT IN WESTERN ARCTIC

Mr. Jim Manly (Cowichan-Malahat-The Islands):: Madam Speaker, my question is for the Minister of Indian Affairs and Northern Development. In October, 1978, the government signed an agreement in principle with the Committee for Original People's Entitlement. The agreement provided the basis for a land claim settlement with the Inuit in the western Arctic. The minister now wants COPE to make further concessions and compromises. With this kind of double-dealing, how does the minister expect any native group in the country to trust him? Are agreements in principle only one stage in the long process of stripping native people of their rights, or will the government keep its word?


Hon. John C. Munro (Minister of Indian Affairs and Northern Development):: Madam Speaker, there is an almost unending list of misinformation, misconception, and erroneous charges in the hon. member's question. How the dispute arose is quite simply that I, in an open fashion, sent a memorandum to my negotiators. I sent a copy of it to the COPE negotiators. In the letter I asked if they would address some concerns which were very real. They knew about these concerns, whereas we did not. Many of the people concerned with this matter in the north knew about them.
The letter was sent in order to see if the process of give and take and the process of negotiation would give us a solution. This procedure occurs in negotiation processes all the time. I dare say that the negotiators for COPE send memos back and forth to their principals also. There was no implication of any breach of any agreement in principle. It was not the basis for final agreement, which would be a breach of agreement in principle. It was simply saying that we should address some of these real concerns to see if we could not work out a solution. 1 see absolutely nothing wrong with any federal government minister sending instructions of that kind to his negotiators to see what can be done about problems of concern.


James Douglas Manly: My supplementary question is for the same minister. The Inuit people had already made great concessions at the time the agreement in principle was signed. Will the minister cease all further double-dealing and follow the 1977 recommendations of the Berger commission, the National Energy Board and the government's own agreement in principle? Will the minister guarantee to the House of Commons that he will respect the commitment to establish a wilderness park on the Yukon's north slope, free from any pipeline or transportation corridor?


John Carr Munro: Madam Speaker, I have already indicated to the hon. member that negotiations have been stalled for a period of time. I believe it is in everyone's interest that these negotiations be reinstituted. I do not think it is helpful to either side to carry on with the negotiations and stake out fixed positions in advance of negotiating. If the hon. member wishes to be a part of the negotiation process which
hinders a final result, that is his business. I think we should leave the process to negotiation.



IMPLEMENTATION OF MARKET ASSURANCE PLAN-SUGGESTED COMMITTEE STUDY

Mr. Jack Murta (Lisgar):: Madam Speaker, I would like to direct a question to the Minister of Transport in his capacity as the minister who answers for the Canadian Wheat Board. There is a new grain marketing plan being discussed in western Canada called the Market Assurance Plan. I believe the implementation of such a plan could produce major changes in western agriculture. Would the minister give consideration to setting up a special committee comprised of members from the three western provinces, farm organizations and the Canadian Wheat Board, to study this program fully so that all farmers and grain producers in western Canada will know exactly what the Canadian Wheat Board is talking about before any program is implemented?


Jean-Luc Pepin: Madam Speaker, as the hon. member has said, this is just a plan. It was developed by the Advisory Committee to the Canadian Wheat Board. I repeat again that it is only preliminary. My understanding is that the Canadian Wheat Board is consulting with farmers in district meetings which are now being held with members of the different committees. So, the process of consultation is on. The hon. member suggests another possibility, which I will bring to the attention of the minister of state responsible for the Canadian Wheat Board.


Jack Burnett Murta: My supplementary question is for the Minister of Transport. Since such a program does have some effect in terms of detracting from the solution of the real problem with respect to grain marketing in western Canada which is, of course, grain transportation, could the minister indicate at what stage the government is at in terms of either a resolution to the problem or a study of the Crowsnest Pass rates so that this issue which is of the utmost importance to producers in western Canada can now be resolved?


Jean-Luc Pepin: Madam Speaker, the Prime Minister answered this question two Fridays ago. He said quite frankly that he was looking for a feeling of support from western Canada on this subject. I think this feeling of support is coming up now and it is getting stronger and stronger. I am doing my very best to assist its development.



AIRPORTS


Mr. J. R. Ellis (Prince Edward-Hastings):: Madam Speaker, my question is for the Minister of Transport. It is about
February 24, 1981

landing fees which over the past number of months have been almost as repetitious as the minister's answers.
When an invoice in multicopies, run off the computer for a landing which took place on May 4, 1980, is not mailed out until February 9, 1981, is there any real justification for keeping those fees in place?


Jean-Luc Pepin: Madam Speaker, I believe that the increase in fees is justifiable. I am a believer in progression and regularity as opposed to confronting users of government services with increases of 30 per cent, 40 per cent or 50 per cent, as has happened in the past, usually due to electoral circumstances. So, if there has been a bit of a hang-up on this one, I will attend to it immediately.


John Raymond Ellis: Madam Speaker, the minister missed the point. Taking nine months to send out one single little invoice obviously does away with the need for any of them. Surely the whole process could be done away with, and we would all be better off.


Some hon. Members:: Hear, hear!



PRIVILEGE


Madam Speaker:: On Thursday last the hon. member for York-Peel (Mr. Stevens) raised a question of privilege alleging that the Minister of Industry, Trade and Commerce (Mr. Gray) misled the House on February 6, 1981, and moved a motion to refer the matter to the Standing Committee on Privileges and Elections.
The hon. member's complaint flows from a question put to the minister during Oral Question Period on February 6 in which he inquired of the minister if he had a statement to make with respect to the negotiations involving his department and Massey-Ferguson. The minister replied that the matter was under review.
The hon. member alleges that the minister misled the House in his answer because, in his view, "clearly the matter was settled". In support of his arguments, the hon. member for York-Peel mentioned that the relevant cabinet meeting had been held on the previous day. He further alleges that this decision having been made, the minister chose not to inform the House, stating that it was still "under active review."
In his remarks on Thursday last, the minister indicated that he had no statement to make at the time the question was posed to him by the hon. member since the final decision was not taken until after the question period. The particular point at issue at this time is whether there exists a prima facie case of privilege upon which a motion can be entertained.
Point of Order-Mr. W. Baker
I have reviewed with care the arguments presented by all hon. members who participated in the discussions on Thursday last in order to determine precisely if a prima facie case of privilege had been established.
It seems to me that we have before us a series of facts the interpretation of which is disputed by two hon. members. Hon. members are aware of Citation No. 19(1) in Beauchesne's fifth edition which reads as follows:
A dispute arising between two members, as to allegations of facts, does not fulfil the conditions of parliamentary privilege.
I also draw to the attention of the House Citation No. 322 which reflects a long-standing practice of this House that statements made by members in this House must be accepted.
I therefore find, in this instance, that a prima facie case of privilege has not been established.



POINTS OF ORDER


Ian Gardiner Waddell: Madam Speaker,
I rise on a point of order. I believe that the Minister of Energy, Mines and Resources (Mr. Lalonde) referred to a letter that he had written to Mr. Leitch, the minister of energy of Alberta, in response to a question. If that is so, I ask that the minister table that letter, it being on a very important matter to this country, the matter of energy pricing.


Marc Lalonde: Madam Speaker, if that is the will of the House, when you come to tabling of documents I will make it available.



MR. BAKER (NEPEAN-CARLETON)-INQUIRY RESPECTING ACQUISITION BY PETRO-CANADA

Hon. Walter Baker (Nepean-Carleton):: Madam Speaker, yesterday in the question period, as reported at page 7548 of Hansard, in answer to questions from the Right Hon. Leader of the Opposition (Mr. Clark) as to when Petro-Canada made the first offer to Petrofina, what the price of that offer was, and whether there were other significant terms or conditions, the minister later on when referring to that said that he would make an inquiry and, I assume, report to the House. Has that inquiry been made? Does he intend to table, later on today, the results of that inquiry? If not today, will he table those results later?


Marc Lalonde: Madam Speaker, I have indeed made the inquiry. I have asked to obtain the information in writing, and I would be very happy to make it available as soon as I have it.

February 24, 1981
Privilege-Mr. Crosbie PRIVILEGE



MR. CROSBIE-CANADA COMMUNITY DEVELOPMENT PROGRAM

John Carnell Crosbie: Madam Speaker, I gave you notice, I think last Thursday, of a question of privilege on a matter which affects my rights as a member of the House, and in connection with the Minister of Employment and Immigration (Mr. Axworthy) and his Canada community development program. Under that program the amount of $2,741,000 was allotted to the federal district of St. John's West, my district, for this year. A local advisory board was appointed to advise me, the minister and his officials, on what projects should go ahead. There were 110 projects submitted by groups throughout St. John's West. There were 43 projects approved which used up the moneys allotted. The local advisory board and the departmental officials gave a priority rating to all projects, using a scale of nine. So, these were the projects that had the highest priority. That was all done last fall. There were 67 projects which were not funded.
One of these projects was a recreation project at Mount Carmel, a community in my district, 1468 MA 2. That project had a score of .23 out of nine points. It ranked ninety-ninth of the 110 projects. Of the 67 projects not funded it ranked fifty-sixth in order of priority. The community of Mount Carmel already had a project awarded for the building of a wharf and repairing of a fisheries facility for the amount of $65,000.
The minister's office contacted me in January to ask whether I would agree to an additional $25,000 being awarded for this Mount Carmel project. I said I would look into the matter. The minister's office said he had an additional $25,000 that he could award for this project in St. John's West. I looked into the records. It just happened to be kicking around, that extra $25,000. 1 looked into this, and when I discovered that this project ranked ninety-ninth in priority of 110 projects, I did not give my consent.
I went outside Canada on a trip, and just before I got back the provincial Liberal member of the House of Assembly for the provincial district of St. Mary's-The Capes, which lies in the district of St. John's West, had made a public announcement that this project in Mount Carmel, MA 2, was going to be funded with $25,000. It was not announced by the minister's department. It was not announced by the member. The impression given to the people of St. John's West was that I had lost my senses and was misapplying public funds to fund the project that ranked ninety-ninth out of 110 projects submitted in my district.
This project did not warrant any funds being spent on it. I quote to you the guidelines of the minister's department in his letter of July 30, 1980, when he announced the program. On page 2 he set out that the applicants for these projects had to show, and 1 quote:
-an intention to follow a hiring plan aimed at the redressing of imbalances in employment opportunities for women, youth, native people and physically disabled persons-
These had to be factors in assessing proposals for funding.
The officials of the minister's department threw out this Mount Carmel project, on the grounds that it did not meet these guidelines, that it did not meet the affirmative action guidelines of the minister's program, giving two reasons for rejecting it:
i)	it is not supportive of the affirmative action principles laid out in the intentions of the program.
ii)	it only marginally meets the federal-provincial requirements (recreation).
But the Liberal provincial member for the district contacted the office of the Minister of National Revenue (Mr. Romp-key), who is the cabinet minister from Newfoundland, and that minister apparently contacted the minister responsible and persuaded him that for political reasons this project for Mount Carmel, sponsored by two Liberal co-workers, two Liberal campaign workers for the Liberal member, Mr. Hancock-who will be the ex-Liberal member when the next provincial election is called-convinced the minister to ignore the guidelines of the program and to misspend public moneys on this project in Mount Carmel.
In the provincial district of St. Mary's-The Capes there were 21 other projects which were not funded but scored higher in priority than this Mount Carmel project.


Walter David Baker: My goodness.


John Carnell Crosbie: North Harbour, St. Vincent's, O'Donnells, Gaskier's, St. Mary's, Branch, Point La Haye, Admiral's Cove, St. Bride's, Mitchell's Brook, Colinet, St. Stephen's, Harricott, Patrick's Cove and Mall Bay: all were, in order of priority, ahead of Mount Carmel. They were all in Mr. Hancock's district. He is stuck with them all. He turned his back on them. He ignored their greater priority, and he tried to favour his Liberal friends in Mount Carmel when the community already had a project.


Some hon. Members:: Shame!


John Carnell Crosbie: I will debate that gentleman, Madam Speaker. I am going to debate him in all these communities. If he shows his face in any of them in the future, he will need a bodyguard, I can assure you, for turning his back on his own constituents and favouring his Liberal friends in that community.
I referred to Hansard for June 4, 1980. The hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) asked the minister a question because he thought the minister's guidelines with reference to this program were unconstitutional. As reported at page 1476 of Hansard, the minister said:
We, as a government, have felt that the best source of advice as to local priorities in the various regions of Canada is members of Parliament.
He said Members of Parliament, not members of the house of assembly, not Liberal members of the house of assembly, but Members of Parliament. He went on to say:
-1 happened to conclude that Member of Parliament are the best sources of advice on our regional priorities.
Then our critic in this area, the hon. member for Calgary West (Mr. Hawkes) wrote the minister on November 4, 1980,
February 24, 1981

expressing his concern about how priorities were to be decided.
I am sorry, he wrote on August 18, and received a letter from the minister on November 4, 1980, which stated:
I propose to seek this advice from provincial governments, and from the staff of the commission. It is essential, in my view, that advice and judgment on local priorities be sought from the local level as well. In this context an important and valued source of perspective is the Member of Parliament elected to represent that area.
I do not want to take too much time on this, Madam Speaker. It was a political axe job by the Minister of Employment and Immigration who is unworthy of that office, in my view. He has approved a government program in a district where there is a local advisory board chaired by Mr. Walter Manning of St. Bride's with other members from the federal district of St. John's West. This is a district in which I have never interfered with the recommendations of the local advisory boards. They are asked to advise on local conditions and, I believe, their advice should be accepted. A project which rated 99th out of 110 received an award of $25,000 which was not in the program in the first place. It is additional money which the minister conjured up from somewhere, money that was not distributed across Canada as it was supposed to be. It was given to a project that scored .23 out of 9 points.
If I did not have this opportunity to bring the matter to your attention today, Madam Speaker, if I had not written to every newspaper in Newfoundland about it, if I had not written to every community that is involved in it, people might have thought that I had lent myself to this kind of prostitution in the spending of public funds for political purposes. But I have written, Madam Speaker, and I am going to tell every household in St. Mary's-The Capes and St. John's West just how serious the government is about unemployment and creating jobs and how they administer their programs without political favouritism and political interference. Every household in St. John's West will understand perfectly the minister's idea of the way he should carry out his public duties. They will know that because a Liberal member of the house of assembly has two Liberal friends who applied for a project, although it does not deserve public funds, and although the community already has a fishery project, an economic development project recommended by the local advisory board, the minister approves the spending of money on a program against the recommendation of his officials, against the recommendation of the local advisory board and without the concurrence of the hon. member.
I submit that this is a breach of my privileges as a member, Madam Speaker. It is disgraceful conduct on the part of the minister. It is a breach of my privileges as a member, and if you will find a prima facie case, Madam Speaker, I will move the requisite motion to have this sent to the Standing Committee on Privileges and Elections to which this gentleman should go to have his peers determine his fate. I have no doubt that if his peers do that impartially and justly he will be out of here within a fortnight.


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, this is a matter that can be dealt
Privilege-Mr. Crosbie
with very quickly. Before he rose to his feet, the hon. member for St. John's West (Mr. Crosbie) knew that there is no question of privilege whatsoever. Having been absent from the House for several days, however, I suppose he had to use up his air time and wanted to make sure that he got full exposure of his voluminous lungs.
The fact is that any decision in this respect is the prerogative of the minister. We have extended the courtesy to Members of Parliament of asking for their advice and guidelines, but we retain the discretion to make decisions.
The hon. member indicated that he intends to provide his constituents with some information about this case. I hope that he will provide some additional information about the case to make sure that they have all the facts. He has been known, from time to time, to neglect giving all the information that is required.
The first thing the constituents of St. John's West should know is that this is a program of direct employment creation. It is a program which was cancelled by the hon. member when he was a minister and a member of the previous government. All of a sudden he is standing here crying great crocodile tears and saying that the poor people of St. John's West are being denied the privilege, that his government denied to every single community across Canada when they cancelled every employment creation program. Furthermore, they totally denied the right of a Member of Parliament to any consultation whatsoever when, under a similar program, they cancelled the local advisory boards.
What kind of hypocrisy is this when the hon. member will stand here and claim the rights of democracy are being denied when he and his government have denied those very rights to every member of this House? On those grounds, every member of the House could claim a breach of privilege by the hon. member opposite and the government of which he was a member.


Mr. Paproski:: That is not true.


Lloyd Axworthy: Furthermore, Madam Speaker, I find it somewhat surprising that the hon. member for St. John's West should take umbrage at the government being prepared to give more money to his constituency and at the fact that in the reallocation we were giving priorities to communities which had heavy unemployment and we were prepared to assign money. He is saying, "It was not my priority." Let me remind the hon. member that under the project in question an application was sent out. We told them and the Members of Parliament that it was not acceptable under our terms. The project was redrafted to contain new proposals. Being a government with some flexibility and openness of mind, we were prepared to reconsider that project.


Some hon. Members:: Hear, hear!


Lloyd Axworthy: Obviously the hon. member is not of the same mentality. In the tradition of fair play, we contacted the hon. member's office and said, "Here is a reapplication for a

February 24, 1981
Privilege-Mr. Crosbie
project. Would you give us your opinion of it?". The hon. member said, "I would be glad to. Send me the project." Members of my office staff called his office several times over the succeeding four weeks only to find out that he was off gallivanting in South Africa-


Some hon. Members:: Oh, oh!


Lloyd Axworthy: If the constituents of the hon. member want the true facts, they should ask, "Where was he when he should have been doing his constituency work?" He was off in South Africa. It is not for me to judge why he was in South Africa: he has a right to go anywhere he wants. But if he is so preoccupied with and concerned about his constituency responsibilities, he should have given some advice to his staff before leaving so that they could have made a recommendation. He was not back in his office until February 1, and the final date for projects was February 2.
I submit, Madam Speaker, that the hon. member feels some guilt about not fulfilling his responsibilities and not looking after his constituency as he should have been doing at that time. That is why we gave approval, based upon the recommendation of a regional minister who was doing his duty and covering for the hon. member for St. John's West who was somewhere else.
I would like to see the report that the hon. member will give to his constituents. If they knew the true facts, I do not think the hon. member for St. John's West would be around this House very much longer.


Some hon. Members:: Hear, hear!


Madam Speaker:: Is the Right Hon. Leader of the Opposition (Mr. Clark) rising on the same question of privilege?


Charles Joseph Clark: Yes, very briefly, Madam Speaker. The point raised by my colleague, the hon. member for St. John's West (Mr. Crosbie) was that there has been a breach by this minister of the undertaking he gave on June 4, 1980, when he indicated:
-I happened to conclude that members of Parliament are the best sources of advice on our regional priorities.
That was the policy set down by the Minister of Employment and Immigration (Mr. Axworthy) on June 4, 1980. The substance of the question of privilege raised by my colleague, the hon. member for St. John's West, is that that clear guideline, publicly given, was departed from in this case. That is one matter which Your Honour will have to judge, but there is now an even more interesting question raised by the very anxious and nervous Minister of Employment and Immigration. It concerns his claim in the House today that a proposal which had been rejected, had been judged to stand ninety-ninth out of 110 projects. The proponents of that proposal were asked to submit their proposal again. They were asked to rewrite it and were given a second chance at having a proposal approved which had been rejected on its merits.
That raises questions as to whether the other 16 applicants who had ranked below this particular project in St. John's West were also invited to rewrite their submissions, or whether they did not have the appropriate political colouration to have this minister ask them to try again so that they might squeeze their way into the established guidelines. That is another question to be looked at.
What we are dealing with here, Madam Speaker, are two very important matters. They require a great deal of levity from the other side. One has to do with whether the word of the Minister of Employment and Immigration can be believed. He said one thing on June 4, 1980, then he acted in another way. That is one question on which your Honour will have to judge.
The other very important question has to do with the propriety of departure from guidelines in particular instances where the minister, or his political party, happen to be involved. We have an admission from the minister that he went back to these Liberal proponents of a Liberal project and asked them to rewrite their application, after the deadlines had passed and after the opportunity had passed for everyone else, in a way which might make it the expenditure of public funds acceptable. It is very important to know whether that has been a broadly practised procedure, whether everyone is asked to rewrite their applications, or whether that privilege is extended simply to friends of the minister and to political friends of the Liberal Party whose proposals are rejected on their merits but who are then asked to rewrite their proposals so they can become eligible for $25,000 of new-found public money.
What is at issue here is whether the same standards apply to everyone. It is clear from what the minister has said that the same standards do not apply to everyone. It is clear that there is one standard applied to Liberals and a different standard applied to other more responsible citizens in the country.
There is also the question as to whether or not there has been a departure by the minister from his solemn word in this House in a way that constitutes a question of privilege. Those, Madam Speaker, are both matters upon which you will have to judge.


Madam Speaker:: Judging from the discussion until now, it appears to me to be a complaint and a difference of opinion as to how the government reaches its decisions.
I will not hear too many members. I see the hon. member for Calgary West (Mr. Hawkes) is rising. I think the hon. member for St. John's West (Mr. Crosbie) mentioned him in his question of privilege. I would like the hon. member for Calgary West to be very brief in his remarks. I will recognize also the Hon. Minister for National Revenue (Mr. Rompkey). After that, I will determine whether or not to allow any further interventions on this question.


Hon. William Rompkey (Minister of National Revenue):: Madam Speaker, I do want to speak because the hon. member for St. John's West (Mr. Crosbie) indicated that I had a part
February 24, 1981

in this action. Indeed I did. As regional minister I did receive representation from that riding, as I do from ridings all over Newfoundland and Labrador. I pass those along to the respective ministers, and I will continue doing so. That is the job, as I see it, of a regional minister. If the hon. member for St. John's West did not follow that practice while he was on this side of the House, then I submit he was not doing his job.
We did make an attempt as my colleague, the hon. Minister of Employment and Immigration (Mr. Axworthy), has said, to contact the member for St. John's West, but he was in Africa.


Allan Joseph MacEachen: Africa!


Bill Rompkey: I would like to go to Africa, too, but I have a job to do here in this House. If someone is in Africa, then someone else still has to look after Newfoundland and Labrador. That is what I was trying to do, Madam Speaker.


An hon. Member:: No wonder it is such a mess.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Bill Rompkey: Third, the hon. member for St. John's West indicated that it was officials who had ranked this particular project and judged it. I want to tell him and this House that it is not the officials in the department who are running the department, but the Minister of Employment and Immigration, and that is as it should be.


Walter David Baker: That explains it.


Charles Joseph Clark: Calamusa knows that.


Some hon. Members:: Hear, hear!


Bill Rompkey: Fourth, the member for St. John's West has accused us of cutting off spending to Newfoundland. He said that this government is deliberately cutting off spending to Newfoundland for some reason or other. According to him, we are doing that for some nefarious reason. He said we are so stupid as to cut off spending to Newfoundland, in spite of the fact that the people of Newfoundland elected five Liberals. He is making that accusation. He has accused me particularly of interfering in a project called synchrolift. Some members of the House perhaps do not know what synchrolift is, but I have been accused of cutting off that project.
However, here I am accused of helping to allocate additional funds to the member's riding. The hon. member has to make up his mind. Does the hon. member want more funds for Newfoundland or does he not? Does he want more funds for St. John's West or does he not? The hon. member has to make up his mind. If he does not want funds going to St. John's West today, then he should quite clearly say to the people of St. John's West, "I do not want any more money going into St. John's West". We will not follow that advice, but he should say it if that is what he thinks.
This is a matter, Madam Speaker, on which you will have to judge, and clearly I think you will judge that there is no
Privilege-Mr. Crosbie
question of privilege and that the Minister of Employment and Immigration acted properly in the interests of Newfoundland and Labrador, and particularly in the interest of the people of St. John's West.


Some hon. Members:: Hear, hear!


Mr. Jim Hawkes (Calgary West):: Madam Speaker, I rise on this question of privilege because the letters I wrote on August 18 were mentioned by the hon. member for St. John's West (Mr. Crosbie). Those letters quoted an excerpt of Hansard for June 4. At that time the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) rose in this House to ask the minister if his guidelines for spending money in this fashion were legal. The minister did agree to consult the law officers at the Table. We do not know whether that consultation took place.
The issue being raised here today is sometimes obfuscated with rhetoric, but it is a question of whether or not privileges of the members of the House have been violated in the sense that a minister of the Crown has used his position to move outside of policy guidelines mandated by members of the House.
If we think by analogy of a minister of supply and services who deliberately spent money outside of the public tender process or of a minister in charge of the public service who deliberately avoided the competition process required in the law, we would have to conclude that they would certainly not be acting in a manner consistent with policy guidelines as laid down by members of this House.
What we are dealing with in this question is a set of guidelines regarding the spending of public money. It is very similar to a purchasing policy, or a public service policy, in that particular groups which supply labour services to the government for social purposes have to be selected. To be sure that competition is fair, they have to be selected according to a criterion which is public, which is known to all and equal.
The hon. member for St. John's West raises the issue that in this case those guidelines have not been followed. I believe the suspicion that they were not followed is clearly evident to members of the House and to the Chair. I would suggest that by referring the matter to the Standing Committee on Privileges and Elections there is an opportunity to call witnesses, to examine the situation and to draw a conclusion which might be fair. If the minister's decision is to be upheld, then any suspicion of misconduct should be laid to rest. However, if the opposite is true, then the House will have to deal with it.
I would urge you, Madam Speaker, to give serious consideration to referring this very important matter to the Standing Committee on Privileges and Elections.


Madam Speaker:: These decisions, which the hon. member for St. John's West (Mr. Crosbie) described in his intervention, obviously belong to the government. The alleged disregard which the government may have had of any advice which should have been forthcoming, or was forthcoming, in regard to that decision is also the responsibility of the government.

February 24, 1981
Point of Order-Mr. Nielsen
The way this subsidy was announced and who benefited from it might be objectionable to the hon. member for St. John's West. However, he can complain about it as much as he wishes. He said in his intervention that he was taking all means at his disposal, including raising a question of privilege, in order to have it known that he is not satisfied with the way the government has taken that particular decision, and it is open to him to do just that. As a member of the clerisy, I believe the hon. member for St. John's West knew in advance that this does not constitute a question of privilege. The government must take its responsibility for all these decisions. Governments live or die on the wisdom of those policies or decisions.
As for the point raised by the hon. member for Calgary West (Mr. Hawkes), I am informed that the officers at the Table did not receive the request that they should examine the legality of the way the government is spending its money. If anyone had, I am sure the officers at the Table would have told him that it is not up to them to express an opinion on the legality of government spending. The way the government spends its money is for this House and, eventually, for the population to judge. Therefore, this does not constitute a prima facie case of privilege. I must rule that the matter be closed.



POINTS OF ORDER


John Carnell Crosbie: Madam Speaker, 1 have a point of order in connection with the statements made by two ministers referring to my being in Africa. In my January householder bulletin I told my constituents where I was going, which is more than the Prime Minister (Mr. Trudeau) did. While he was stuck in the snow, I was on my way, and the results of my trip to Kenya, South Africa and Brazil were much more satisfactory than his.


Some hon. Members:: Order.


Madam Speaker:: Order. I believe the hon. member is arguing rather than raising a point of order.



MR. NIELSEN-TABLING OF LISTS OF MINISTERS RESPONSIBLE FOR RIDINGS

Hon. Erik Nielsen (Yukon):: Madam Speaker, I rise on a point of order. The Minister of Finance (Mr. MacEachen) will recall the exchange between himself and the hon. member for Broadview-Greenwood (Mr. Rae), not on the question of privilege but in question period following on a matter raised by him last Thursday. During that exchange, the Minister of Finance undertook to seek the consent of the Prime Minister (Mr. Trudeau) to the tabling of the list of ministers responsible for a riding or ridings in Canada. Has the Minister of
Finance sought that consent, and will that document be tabled today in anticipation of the notice given by the hon. member for Broadview-Greenwood that he intends to raise the question of privilege again tomorrow?


Allan Joseph MacEachen: Madam Speaker, there is no hesitation in making the list of such ministers available. The list is being assembled and it will be made available as soon as possible. I will welcome the opportunity to listen to the hon. member for Broadview-Greenwood tomorrow on his complaint.


Erik Nielsen: Madam Speaker, I merely rise to express the wish that the Minister of Finance table the list before tomorrow in order that the information might be available to judge the question of privilege that the hon. member will be raising. Members on this side may wish to participate in it. If any consent is necessary, I am sure we can agree now to the minister tabling that document at this time.


Allan Joseph MacEachen: Madam Speaker, I do not have the list and 1 do not undertake to table it before the hon. member raises his question of privilege. I do not think there is much of a question of privilege, but I will be glad to listen.



PRIVILEGE


Hon. Stanley Knowles (Winnipeg North Centre):: Madam Speaker, I rise on a question of privilege, notice of which I gave Your Honour at noon today. It is in a somewhat different vein than the question of privilege we have been discussing since three o'clock. I realize that what I am about to say will give all my colleagues in the House a splendid opportunity to laugh at my expense. I assure you, Madam Speaker, that I shall not complain. Sometimes I think we might try more often to arrange for laughter. It would be a good tonic to help us cope with some of the things we have to experience here.
In any case, yesterday afternoon I gave vent to a concern I have had for a number of months about the blackening of the Manitoba Tyndall stone over certain vents around the chamber. I asked the President of the Privy Council (Mr. Pinard) to investigate the matter to see if some sort of air is being pumped into this place which might be doing something to some of the members of this House.
Immediately after I raised that question, one or two hon. members applauded my concern. One or two others suggested that maybe there were no black spots there, maybe they were just shadows. That gave me some concern. I spent most of the day looking at them. The more I looked, the more convinced I was that those black spots are black spots. Even now there are members looking at them and realizing that those black spots are black spots.
I like to be very sure about these things, so last night I stayed a little later than I usually do.
February 24, 1981


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: I stayed in the chamber after all others had gone and until those bright television lights in the upper part of the chamber were turned off. Then, Madam Speaker, I found that the black spots were gone. I realized that they are in fact shadows cast by these chandeliers. Therefore, it is not a case of the walls being black, it is a case of my face being red.
Madam Speaker, I should like to apologize to the House for having created any concern. I hope any members who were coughing last night did not feel it was because of the air we were breathing. I am happy to assure them from my examination that there is no discolouration of the stone where those shadows are.
Since I raised this as a question of privilege, I suppose I should be presenting a motion. I am not going to move that the matter be referred to a shadow cabinet. But I should like to move:
That the member for Winnipeg North Centre be forgiven for his perceptual error, it being clear that this is not the first time that a member of Parliament has seen something that was not there.


Some hon. Members:: Hear, hear!


Madam Speaker:: I can see that the House is quite willing to applaud this motion. I must tell the hon. member that this morning I came to look at the wall.


Some hon. Members:: Oh, oh!


Madam Speaker:: Having observed that the black spots were no longer there, I thought it was because of the status of the hon. member in the House that his request had been executed overnight and that the spots had been removed.


Some hon. Members:: Hear, hear!



MR. MANLY-IMPUTING OF MOTIVES BY MINISTER

James Douglas Manly: Madam Speaker, I rise on a question of privilege. This is the first time I have felt the need to do so. I find this a rather difficult situation, following, as I do, on the comments of the hon. member for Winnipeg North Centre (Mr. Knowles). However, 1 hope you will find, without a shadow of a doubt, that 1 do have a question of privilege.


Some hon. Members:: Oh, oh!


Walter David Baker: There must be a full moon.


James Douglas Manly: In question period this afternoon, I raised concerns about the government reneging on a 1978 agreement in principle with COPE. In response, the Minister of Indian Affairs and Northern Development (Mr. Munro) imputed motives to me by suggesting that I was letting myself be used in the negotiating process. I suggest that my duties as a Member of Parliament require that I be able to raise a question of such fundamental importance without having motives imputed.
Tabling of Letter
May I remind Your Honour that in 1977 the report of Chief Justice Thomas Berger recommended that there should be a wilderness park established on the north slope of the Yukon Territory. When it was looking at the question of a pipeline corridor, the National Energy Board realized that a corridor going through this area would cause great damage to the environment. It recognized that a pipeline or transportation corridor would destroy the entire concept of a wilderness park on the north slope of the Yukon Territory. It would threaten the porcupine and caribou herds and the nesting area of hundreds of thousands of birds. It would threaten the traditional areas of the Inuit people and the people-


Madam Speaker:: Order, please. I will call the hon. member to order because he must expose to me in what way he feels his privilege has been breached, and not enter into a debate about the question he posed to the minister. If the hon. member can tell me in what way he feels his privilege has been breached, I would be glad to listen to him.


James Douglas Manly: Madam Speaker, I will endeavour to do that.
In his response, the Minister of Indian Affairs and Northern Affairs suggested that I was being used in the negotiating process and that instead of asking these questions with a sincere desire to have the minister commit himself to this House and come clean before this House, that I was a part of the negotiating process.
I ask that Your Honour look at this matter and find that there is indeed a question of privilege. If Your Honour does, I would be glad to move that the matter be referred to the appropriate committee for consideration.


Madam Speaker:: The hon. member is quite right. No one is allowed to impute motives to hon. members. He is also quite right that he should be allowed to raise a question of privilege if he feels that there is a breach of privilege, but it seems to me that he has had an occasion now to put the facts right and to explain to the House that he did not have these motives, whether or not they were imputed by the minister.
I feel that the hon. member has made his point, and I do not recognize that he has a question of privilege.



ROUTINE PROCEEDINGS


[Stage Direction]
Hon. Marc Lalonde (Minister of Energy, Mines and
Resources): Madam Speaker, following the request made a few minutes ago by the hon. member for Vancouver-Kingsway (Mr. Waddell), I am tabling copies, in French and English, of
[Stage Direction]
February 24, 1981
Message to the Queen
the letter I sent yesterday to Mr. Merv Leitch, the minister of energy and natural resources for Alberta.

[Stage Direction]
Hon J. Robert Howie (York-Sunbury) moved for leave to introduce Bill C-631, to amend the Criminal Code.
Some hon. Members:: Explain.


Mr. Howie:: Madam Speaker, the purpose of my bill is to substitute an independent voice in the imposition of sanctions for summary contempt of court, which now could put a judge in the difficult position of being the aggrieved party, the prosecutor and the judge at the same time.


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

Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I am sure all hon. members heard today with great pleasure the happy news from Buckingham Palace and would wish this House of Commons to send a message of congratulations to Her Majesty the Queen expressing our great happiness at the forthcoming marriage of Prince Charles and Lady Diana Spencer.

Therefore I move, seconded by the Right Hon. Leader of the Opposition, that a humble Address be presented to her Majesty the Queen, in the following words:

To the Queen's Most Excellent Majesty:
Most Gracious Sovereign:
We, Your Majesty's loyal subjects, the	House of Commons of
Canada in Parliament assembled, respectfully desire to express our great happiness to Your Majesty and His Royal Highness Prince Philip on the announcement of the engagement and forthcoming marriage of His Royal Highness the Prince of Wales and Lady Diana Spencer, and to assure Your Majesty that this happy announcement is greeted by the members of the	House of
Commons with great joy.
That the said Address be engrossed; and
That a message be sent to the Senate informing Their Honours that this House has passed the said Address and requesting Their Honours to unite with this House in the said Address.


Madam Speaker:: Hon. members have heard the motion moved by the Right Hon. Prime Minister. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed. Motion agreed to.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Madam Speaker, the following questions will be answered today: Nos. 1,449, 1,806, 1,807, 1,813, 1,839, 1,950, 2,002, 2,008, 2,085 and 2,086.


Mr. Beatty: 1.	Did the government hire Canadian Media Corporation to handle the purchase of space and time for government advertising?
2.	Did the Canadian Media Corporation exist prior to 1980 and, if not, on what date was it incorporated?
3.	Did the Canadian Media Corporation perform work for other clients prior to being hired by the government?
4.	Did the government have a company with previous private sector experience as an agency of record under contract prior to hiring Canadian Media Corporation and, if so, what was the name of the company and for what reason was its contract terminated?
5.	What competition, if any, was held by the government to allow companies with extensive experience as agencies of record to compete for the contract awarded to Canadian Media Corporation?


Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: In so far as the Department of Supply and Services is concerned: 1. The Department of Supply and Services has entered into contract with Canadian Media Corporation for the provision of agency of record services.
2.	Canadian Media Corporation was incorporated on April 16, 1980.
3.	No.
4.	Yes. (a) Media Buying Services Limited, (b) For convenience.
In so far as the Minister of State (Multiculturalism) is concerned:
5.	At a press conference in May, 1980, a public invitation was extended to the advertising industry to express interest in the agency of record. Presentations were subsequently made to the Government by two organizations with agency of record experience. After studying these presentations a decision was made to enter into a contract with Canada Media Corporation.


Mr. Herbert: Does Defence Construction (1951) Limited have access to government telephone lines, and (a) if not, has this been considered (b) if so, what is the estimated value of the service?
February 24, 1981


Mrs. Ursula Appolloni (Parliamentary Secretary to Minister of National Defence):: Yes. (a) Not applicable, (b) Defence Construction (1951) Ltd. paid $62,437.10 for this service in 1979-80.


Mr. Herbert: 1.	Does Defence Construction (1951) Limited pay interest on security deposits and, if so, at what rate?
2.	Are coupons clipped from bonds submitted as security deposits?


Ursula Appolloni: 1. No. However, in accordance with the Financial Administration Act, interest is paid on contractor security deposits (certified cheques) cashed into the Consolidated Revenue Fund by the government (Department of Finance). The rate which fluctuates monthly is equal to 90 per cent of the simple arithmetic mean of the accepted weekly three-month treasury bill tender rates for the month immediately preceding the month in which interest may be paid. For example, during 1980 the rate ranged from 9.10 per cent to 14.8 per cent per annum. No interest is paid on bonds or on certified cheques which, at the request of the contractor, are held uncashed.
2. No. However, at the request of the contractor any matured coupons will be detached and forwarded to the person who provided the security deposit.


Mr. Herbert: Since April 1, 1970, who have been directors and officers of Defence Construction (1951) Limited and (a) on what date were they appointed (b) who had previous experience in the construction industry?


Ursula Appolloni: (a) and (b)		
Present Directors		Previous Experience in
Name	Date of Appointment	the Construction IndustryMr. A. G. Bland	June 26, 1963	YesMr. L. G. Crutchlow	June 22, 1972	-Mr. A. W. Allan	June 23, 1976	YesLGen J. J. Paradis	September 15, 1977	-Mr. L. E. Davies	September 15, 1977	YesMGen N. S. Freeman	October 12, 1978	YesPast Directors	Previous Experience inName	Date of Appointment	the Construction IndustryBGen G. L. Meuser	May 31, 1965	YesMr. P. Mathieu	May 31, 1965	-BGen E. W. Henselwood	June 23, 1966	YesDr. J. C. Arnell	January 31, 1967	-Mr. J. H. DePuyjalon	June 25, 1970	YesBGen N. C. Brown	June 16, 1971	YesMr. T. C. Greig	June 7, 1973	-Mr. E. A. Booth	June 7, 1973	-LGen J. Chouinard	June 7, 1973	-MGen R. E. Ashton	May 5, 1975	Yes
Order Paper Questions
Present Officers		
Mr. A. G. Bland	July 1, 1963	YesMr. J. H. Stitt	August 18, 1975	YesMr. J. D. Mcllveen	August 18, 1975	YesMr. W. J. Mulock	January 1, 1977	YesMr. T. D. Heavens	April 1, 1977	YesPast Officers	Mr. N. Tokaryk	July 1, 1958	-Mr. N. J. Smith	February 24, 1964	Yes


Mr. McKenzie: 1.	In each year 1960 to 1979, what was the total cost of administration for the CNR pension trust funds?
2.	For each year, were the administration costs charged to the CNR or were they charged to the pension trust funds?


Mr. Robert Bockstael (Parliamentary Secretary to Minister of Transport):: The management of Canadian National Railways advises as follows: 1 and 2. Prior to 1968, administration costs for the Pension Trust Funds were assumed by the railway and were not separately recorded. The CN Investment Division has been responsible for the administration of the CN Pension Trust Funds since 1968 and the related expenses have been charged against the income of the Pension Trust Funds.
Such Expenses total:
		$ Thousands	
1968	$413	1974	$1,0031969	543	1975	1,1741970	647	1976	1,2991971	716	1977	1,4861972	782	1978	1.8031973	861	1979	1,723
The apparent rapid increase in the aforementioned expenses must be viewed in light of: (a) growing costs due to inflation; (b) expanding assets under administration; (c) growing complexity of operations.
Nevertheless, administration expenditures have been maintained well below one tenth of I per cent of assets under administration, a rate which compares favourably with fees charged by trust companies and other investment managers.


Mr. Anguish: 1.	Was a decision made to have all pay offices operated by the Department of Supply and Services, including central and regional pay offices, operated on one computerized pay system and, if so (a) on what date (b) who made the decision and for what reason?
2.	Was a completely new pay system developed and subsequently abandoned in the mid-1970s?
3.	Which system was chosen, the central or regional, when all offices were moved onto one system?
4.	Were studies undertaken to support the decision to move to one system and recommending the decision to move to that system and, if so, who did the studies and are they available?
5.	Are Privy Council staff paid by a system which bypasses the single computerized pay system and, if so, for what reason?
6.	Is the old central pay system still being used to pay Post Office Department employees?

February 24, 1981
Order Paper Questions
7.	What is the average length of time it takes for a pay increase to take effect for a worker in (a) the Post Office Department (b) departments served by the new central pay system, from the time the increase is granted until it appears on the worker's cheque?
8.	What is the average length of time it takes for employees in (a) the Post Office Department (b) departments being served by the new central pay system, to start receiving regular cheques from the time they commence work?
9.	On what date was the new central pay system implemented?


Hon.   J.-J. Blais@Minister of Supply and Services: 1. Yes. In July, 1968, Treasury Board secretariat approved a plan put forward by DSS that envisaged a total payroll system which would allow the Comptroller of the Treasury to standardize procedures and methods while affording the maximum flexibility to respond to user demands for a more effective reporting of expenditures and personnel costs. The plan supported the basic concept for the creation of a central processor containing pay account data on all government employees and common computerized central processing combined with the remote issue of pay cheques and activity reports. A reduced number of pay offices, all operated by DSS, was to be linked with the central processor through communication lines. The reasons given for adopting the new concept were: to meet the demands of collective bargaining being introduced to the public service in 1969 along with various provincial medicare plans; to standardize payroll accounting procedures, improve efficiency and reduce costs, and to meet the central government needs for consolidated and timely reports on personnel information.
2.	Yes. The development of a new pay system based upon central computer processing was begun in 1972; and in the spring of 1974 it had reached the stage of trial conversions to test the proposed system. As a result of these trials it became apparent that the centralized concept had severe limitations and would be incapable of administering the approximately 300,000 pay accounts distributed across Canada. Consequently the decision was taken in November, 1974, to terminate further development of the system.
3.	The regional pay system.
4.	Yes. In late 1974 study groups were formed in DSS to examine the potential of the various options for payroll administration. A formal report was submitted in March, 1975.
5.	The Privy Council staff is paid through the regional pay system.
6.	Yes. The central pay system continues to administer Post Office pay accounts except for term and part-time workers who are paid by local regional services offices.
7.	The length of time for processing a pay increase depends very much on the workload current in the pay office where the account is administered. Recent statistics monitoring work in progress indicate very little time difference between the office processing postal pay accounts from the offices servicing all departments. Although separate reports are not maintained on the processing time for pay increases from other actions the statistics for the last two months show that more than one half the requests received in the pay offices were processed within
two weeks, while 85 per cent were completed within a four-week period. The remaining 15 per cent are currently outside the four-week limit due to a backlog situation created by the CR labour disruptions. It is expected that the temporary backlog will be eliminated by March, 1981. These times do not cover processing within the employee's department. This applies to normal pay increases, however revisions negotiated through collective agreements are permitted a 90-day implementation period.
8.	As indicated in the reply to question 7, there are no significant differences in times between the pay office servicing the Post Office from the pay offices giving service to all departments. Priority is given to the processing of pay of newly joined employees and on these requests our objective is to issue the pay cheque to the employing department within two weeks of the request being received at the pay office.
9.	Following the selection of the regional pay system in 1975 to be the standard system for administering the payroll for all public servants, a development plan was originated for the progressive redesign of the system to meet standards of processing to be set in conjunction with Treasury Board. The enhancement process is continuing today; by April, 1981, the payroll of all departments, with the exception of Post Office, will have been transferred to the regional pay system.


Mr. Herbert: Is there presently a Graphic Design Secretariat and, if so, where is it located and what are its present responsibilities?


Hon. Donald J. Johnston (President of the Treasury Board):: The Graphic Design Secretariat was established as a part of Information Canada for the general purpose of improving the over-all effectiveness, efficiency and quality of graphic design and design management in the government. The secretariat ceased to exist in 1976 with the termination of Information Canada. The secretariat's responsibilities associated with the Federal Identity Program (FIP) were transferred to Treasury Board along with some staff. Two design advisers are presently located in Treasury Board, with responsibilities for developing design standards and policies for the FIP, and for advising government organizations on implementation. FIP objectives and policies are set out in chapter 470 of the Administrative Policy Manual, which is available on request from the Administrative Policy Branch, Treasury Board Canada. Chapter 470 makes reference to the former graphic design secretariat in describing the background leading up to the development of the Federal Identity Program.


Mr. McKinnon: For each year 1970 through 1980, how many service men and women were released from the Canadian Forces?


Ursula Appolloni: February 24, 1981

Economic Policies
As of December 31 Each Year	Servicemen	Servicewomen	TOTAL1970	10,620	370	10,9901971	9,443	286	9,7291972	9,435	211	9,6461973	8,675	328	9,0031974	10,328	470	10,7981975	10,860	728	11,588* 1976	10,026	797	10,8231977	10,193	924	11,1171978	8,719	712	9,4311979	9,992	764	10,7561980	10,105	995	11,100


Mr. McKinnon: Did the Department of National Defence purchase $10,865 worth of sponges from P. F. Thompson Associates Ltd. and, if so, for what purpose?


Hon.   J.-J. Blais@Minister of Supply and Services: competitive contract valued at $10,865 for sponges was issued by the Department of Supply and Services to P.F. Thompson Associates Ltd. on behalf of the Department of National Defence. Usage indicated is "General Janitorial".


Mr. McKinnon: Did the Department of National Defence place a contract for $11,500 with True Sound Music Ltd. for an organ and bench and, if so, where is the instrument to be located and for what purpose?


Hon.   J.-J. Blais@Minister of Supply and Services: The
Department of Supply and Services (Calgary district office) purchased from True Sound Music Ltd., on behalf of the Department of National Defence, an organ and bench to be delivered to the Canadian Forces Base, Calgary, Base Supply Section. The Department of National Defence requisition stated that the instrument was for the church located on the CFB, Calgary.

[ Translation]


John Leslie Evans: Madam Speaker, if question No. 5 could be made an order for return, this return would be tabled immediately.


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered. Is it the pleasure of the House that question No. 5 be deemed to have been made an order for return?


Some hon. Members:: Agreed.


Mr. Cossitt: 1.	Between January, 1976, and May 22, 1979, on how many occasions did a cabinet minister employ or otherwise arrange for the services of a freelance or contract speech writer or speech writer of any kind?
2.	In each case (a) who was the Minister (b) what was the fee (c) what was the occasion of the speech and in what location was it made (d) who was the writer?
3.	What was the total cost to the taxpayer for all speeches in the categories mentioned in Part 1?
Return tabled.


John Leslie Evans: Madam Speaker, I suggest that the remaining questions be allowed to stand.


Madam Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Mr. Harvie Andre (Calgary Centre) moved:: That this House condemns the government for its failure to introduce economic policies that would restore the economy to its full potential and give Canadians confidence in their future.
He said: Madam Speaker, last Saturday several newspapers in Canada carried the results of a recent Gallup poll in which the people sampled were asked the following question:
Do you think the federal government's policies for tackling the country's economic situation give you a feeling that they are or are not handling the situation properly?
Sixty-one per cent of the population said no, the federal Liberal government is not handling the economy properly. Twenty-five per cent said yes.
Are the people right? Is the federal government handling the country's economic situation properly? No, the people are wrong, said the Minister of Finance (Mr. MacEachen) in a speech in Montreal yesterday. He said that problems in the economy are not his responsibility as Minister of Finance. They are, he said, the responsibility of the private sector. The problem in our economy, according to the Minister of Finance, is that Canadian workers are greedy and lazy. He did not use that language, obviously; he is too good a politician to do that, but he says that the root cause of our inflation is that Canadians want better wages, pensions and benefits but are unwilling or unable to produce more to finance these benefits. What an affront to the Canadian worker, and what a colossal

February 24, 1981
Economic Policies
cop-out by the Minister of Finance, the man who is supposed to be responsible! Does the minister really believe what he is quoted as saying in his Montreal speech? He said, and I quote:
-the nature of productivity is such that the government can only play a supportive role. Ultimately the productivity revival will have to come from the private sector and from individual initiatives.
If he really believes that, he should resign forthwith. To suggest that the government has only a peripheral effect on productivity is to show either incompetence or dishonesty. One would like to think that the integrity or honesty of the government and its ministers need never be questioned, but, regret-ably, we know from sad experience with this government and its ministers that honesty is not a virtue held in high esteem.
For example, how can we accept or believe in the integrity of the Deputy Prime Minister and Minister of Finance when he said in his budget that there would not be an export tax on natural gas, but in the next breath announced a charge on natural gas sold to United States consumers? Let me say by way of an aside that I was taught, as I am sure everyone in the House was, that telling the truth is not only morally right, but is in your own best interests as well, because lies have a way of coming back to haunt you. That lesson has just recently been learned by the Minister of Finance.
Currently, the government of Alberta is challenging in court the legality of this charge on gas sold to United States consumers. They have argued in court that this charge is unconstitutional. Counsel for the federal government said that the federal government can certainly impose an export tax, that an export tax is constitutional. When the judge asked counsel for the federal government, "How is it that this charge on natural gas sold to United States consumers was described by the Minister of Finance as not an export tax? He said that there would be no export tax", counsel for the federal government was forced to admit that it was the same thing. The government's own lawyer was forced to admit in front of the judge that the Minister of Finance was not telling the truth when he stated in his budget document that there would not be an export tax on natural gas.
The statement of the Minister of Finance yesterday that the main problem in the Canadian economy is lagging productivity caused by the private sector is exactly in the same category as the statement that there is no gas export tax; it is simply untrue. The main problem with the Canadian economy is the one flagged by Canadian people in the latest Gallup poll, namely, the government's mishandling of the economy. The sad fact is that, in spite of being back in office for a full year now, the government and the Minister of Finance have yet to develop or articulate a coherent economic policy, or any policy, for the matter.
Hugh Anderson wrote an article about the governor of the Bank of Canada which appeared in yesterday's edition of The Globe and Mail. He started the article with a statement which I thought was revealing:
For a man widely credited with running the only national economic policy Canada has, Bank of Canada Governor Gerald Bouey remains remarkably unruffled-
As Mr. Anderson indicated, the only national economic policy of the country at the moment is the tight money policy of the Bank of Canada. Is Mr. Anderson fair in his assessment? Let us look at the record.
Aside from the monetary policy of the Bank of Canada or its responsibility in that area, the government's economic policy comes from the main economic ministers: the Minister of Finance, the Minister of Industry, Trade and Commerce (Mr. Gray), the Minister of State for Economic Development, the Minister of Energy, Mines and Resources (Mr. Lalonde), the Minister of Agriculture (Mr. Whelan) and the Minister of Transport (Mr. Pepin). If a single one of these ministers, or any of the ministers of state associated with them, has yet produced anything which can be recognized as a coherent policy, certainly it has escaped my notice and the notice of almost everyone in the country. Indeed, frequently their actions are at variance with generally-stated goals.
I should like to speak now for a moment about the Minister of Transport.
He has been in office for a full year. The only action he took, or attempted to take, was to try to undo the positive actions of his predecessor, the hon. member for Vegreville (Mr. Mazankowski), regarding the Prince Rupert grain handling facilities. Since then he has done absolutely nothing to improve transportation in this country. In nine months, the hon. member for Vegreville accomplished more than this minister did in a year or more than any of his Liberal predecessors did in their tenures.
Let us consider the Minister of Agriculture. I am not an expert in agriculture, but all I have heard from the Minister of Agriculture in the last year is his repeated statements that he is the world's best minister of agriculture. That is all I have heard, that is all anyone has heard. If there has been an initiative regarding agriculture, certainly it escaped my notice.
Where is the Minister of Industry, Trade and Commerce, that great paragon of virtue, that great human dynamo who was going to change single-handedly the economy of Canada? He was going to repatriate the economy, increase Canadian ownership and lower interest rates. He was going to resign if he could not lower interest rates; he was going to have an industrial strategy.


Mr. Mazankowski:: Amazing Gray.


Harvie Andre: Yes, amazing Gray. Where is the industrial strategy? He was asked about it the other day and he said, "We have to wait for the Constitution". What is the connection between an industrial strategy and the Constitution? This was not explained by the minister. Apparently he and his entire department are twiddling their thumbs, worrying about the Constitution. When they have finished worrying about that, they will get around to developing an industrial strategy.
February 24, 1981

Then there is the minister in the other place, the senator from Alberta, the Hon. Bud Olson, the Minister of State for Economic Development. Has anyone told him what his responsibilities are? Has the Prime Minister (Mr. Trudeau) taken him aside and told him what he is supposed to do? I have been trying to keep track of that minister. I have read the speeches he made across the country in an attempt to discern the responsibilities of that department. They baffle me. I have yet to see any tangible evidence in support of what that minister is doing. He gives speeches and says that they are trying to make an adjustment. "Adjustment" was a key word in his speech to the Quebec Chamber of Commerce. He said:
-we decided early on that we needed some way to ensure that specific federal policies worked together to achieve the right goals. What we came up with was a framework of eight components, the "guts" of the economic development process, if you will.
Then he went on to talk about the eight components. He said:
The eight components are:
-human resources;
-capital investment;
-energy;
-natural resources;
-technology;
-infrastructure;
-market development; and -institutions.
It is a marvellous list. Now let me take a look at what the government has actually produced in terms of the eight components, the guts of the Canadian economic development process which the minister is supposedly overseeing.
Human resources-so far all I have heard is that the government intends to cut the funding to universities by $1,600 million. Will it help promote human resources to cut the guts out of the funding to universities?
Capital investment-I wonder whether the minister can explain how this tight money-high interest policy is helping capital investment. The predictions of the Conference Board of Canada, the Economic Council of Canada, Data Resources of Canada and the Minister of Finance show capital investment going down next year. Where is the substance to back up this goal?
Energy-it has to be a laugh! The energy policy of the government ensures absolutely that we will be short of energy and will be held hostage to the whims of OPEC nations.
Natural resources-has there been a statement, a policy or an announcement on natural resources? If so, it has escaped my notice.
Technology-the government has cut back on its commitment of funds to the Natural Sciences and Engineering Research Council. The Minister of State for Science and Technology and Minister of the Environment (Mr. Roberts) indicated that he expected the private sector to make up the shortfall in the government's spending on research and development. He said the government cannot be counted on to do that.
Economic Policies
Infrastructure, market development and institutions-these are fine words but they have no substance whatsoever.
What about the matter of energy? Government economic ministers, be it the Minister of Energy, Mines and Resources, the Minister of Industry, Trade and Commerce, the Minister of Finance or the Minister of State for Economic Development use the following phrase, in virtually every speech: "The key to Canada's future is development of our energy potential."
The budget cum energy policy given by the minister last October 28 stated three goals which sound marvellous. No one disagrees with those goals. They are self-sufficiency by 1990, 50 per cent Canadian ownership by 1990, and a fair and equitable revenue-sharing scheme. How could anyone disagree with that? But let us look at what, in fact, has been the impact of this budget cum energy policy. It has been predicted that by the middle of May, half the number of drilling rigs in this country-rigs and equipment which are necessary to explore for the oil and gas which we will need if we are to be self-sufficient-will have left or will be in the process of leaving. That industry is 90 per cent Canadian-owned. It is owned by Canadian citizens living in Canada. This policy, under the guise of Canadianization and self-sufficiency, is driving out half the number of drilling rigs. They are being driven to the United States. And all of this is under the guise of Canadian ownership.
The amount of money which is leaving Canada for greener pastures in the U.S. and offshore as a result of this energy policy is in the billions of dollars-not millions, tens of millions or hundreds of millions, but billions of dollars. This year alone, the estimates are as high as $3 billion, which could and should be invested here in Canada. It is going to the United States. It is not foreign money, Mr. Speaker, but Canadian money. It is money controlled by the Canadian independent oil and gas sector which has been responsible for, on average, 70 per cent of the exploratory wells drilled in Canada over the last ten years. It is the Canadian sector which is designed to Canadian-ize the industry, as stated by the government. That is absolutely absurd.
I would like to deal next with the question of fairness in sharing. The Minister of Energy, Mines and Resources, the Minister of Finance and those who speak in defence of this government's energy policy talk about the necessity of having a fair distribution of the economic rent from oil and gas. The figures they are prone to use for the existing sharing scheme are 45 per cent which goes to the province, 45 per cent which goes to the industry, and only 10 per cent which goes to the federal government. That is simply not true. The fact that they keep repeating this untruth is one of the root causes of the failure of this government to be able to reach an agreement with the provinces. Who would want to negotiate with someone who continues to tell untruths of this kind? Who would want to negotiate with someone who will not accept the facts?
What the government has done, and I use the favourite economic phrase these days of "economic rent", is to establish

February 24, 1981
Economic Policies
the economic rent on a barrel of oil as being S40. By government fiat it has said that it will take approximately 22 of those dollars, which is a little more than half of the $40, and distribute it to the consumers. The government then says it wants to consider sharing the remainder, but it does not want to be asked to consider what has already been distributed by government fiat. To withdraw the $22 from the equation is a form of dishonesty, Mr. Speaker, if not something stronger. Even when the government looks at what is left, the numbers remain cockeyed and concocted to a point which makes them, in fact, untrue. A more realistic comparison has the federal government receiving in the vicinity of 20 per cent, not 10 per cent as it did under the old regime. Certainly, under the new regime it will be a lot more. I do not understand why the government cannot learn that simple lesson. If you want to reach an agreement with someone, the first thing you must do is be honest in your approach. No one will deal with someone they do not trust, not without their hand on their wallet.
If that sounds unduly harsh or critical, Mr. Speaker, I remind the House and the country of a quote which appeared in a newspaper article a few months ago. I believe it appeared in The Globe and Mail and it was about the national energy policy. I believe it was some time in November. In this quote, the assistant deputy minister of energy, one Edmond Clark, who is attributed by many to be the author of the national energy policy, said there was no question that if this were a unitary state we would be paying closer to world price. In other words, the price which is established in this country has nothing to do with the national good. This government does not see itself as having a national mandate; it sees itself as an institution, the federal government, in competition with other institutions in our economy. Therefore, in that competition, since it will be dealing the high cards, the trump, if you will, it will deal harshly so as to ensure that its will prevails. As I said, one of the ways in which this will be done will be by distributing 50 per cent of the economic rent and by talking about sharing the remaining 50 per cent.
I wonder if hon. members opposite ever stop to think about western alienation and the rise in separatism. I wonder if they realize to what extent this may be attributed to the attitude of our national government which says, "Look, we must be interested in the responsibility of the government before that of the country." It may come as a surprise to the Minister of Finance and hon. members opposite that Alberta is a part of Canada. We are a part of the whole. So is Saskatchewan and so is British Columbia. People in Saskatchewan, British Columbia and Alberta are baffled by this thinking. They wonder why the federal government thinks it is virtuous to buy from Mexico at world price but a sin to buy from Saskatchewan, British Columbia or Alberta at three-quarters of the world price. Quite frankly, they do not understand that. I do not think this could be rationalized by a government which thought of Canada and not just of Ottawa.
Then there is that absurd Canadianization program which is nothing more than a nationalization program. There is also the PetroCan tax, which caused a constituent of mine to write a
letter to me which I thought was rather interesting. If you accept the wisdom of the PetroCan tax, wherein the consumers across the country are being asked to pay for the purchase of Petrofina, then why does the government not put the public to a real test and have that PetroCan tax applied only at PetroCan stations? Since this is such a marvellous idea, a constituent of mine wrote to me and suggested that if the government believes in the National Energy Program, then it should establish a national automobile program. His suggestion should appeal to the government. The goals of the national automobile program would be threefold. They would be to establish at least 50 per cent Canadian control of the automobile manufacturing industry by 1990; to assure Canadians of an adequate supply of new cars; and to apply a blended pricing policy which would shelter Canadians from world pricing pressures but which would still allow the federal and provincial governments to receive their fair share of the revenue. I think that would be a marvellous program. My constituent goes on in some detail, but the part that I thought would be particularly appealing to the government is his concept of a federal government Canadianization tax, an "AutoCan tax", if you will, of $500 on each new car sold. A new Crown corporation would be created. This money would be given to Auto Canada, a new Crown corporation. It would use the proceeds of this tax to buy out one of the multinational automobile companies, thereby establishing a 50 per cent ownership of the Canadian automobile business. I think that is great. I think we could next do the same for the clothing business, the mining business, and the pulp and paper business. I mean, it is a winner. All you do is put on this little tax and give the money to a Crown corporation, which can then buy up the foreign-owned industry. It is just a Jim-dandy idea. If the government likes the National Energy Program, they should love this national automobile program and any others which follow.
The National Energy Program is a disaster. I am convinced that it is so bad that the government will have to swallow it within a few months. The question is, how long will it be before they do change their mind? Will the Minister of Energy, Mines and Resources realize he has made a mistake sooner, rather than later, to save the country damage from what he is doing? Will the Prime Minister (Mr. Trudeau) have the courage to remove him and put somebody else in if the Minister of Energy does not change his mind? Those are the relevant questions.
I suspect that we will go through a few more months of hardship before that happens, but I would be willing to make a considerable wager that this National Energy Program will be altered, because it is absolutely unacceptable. Except for what Mr. Keith Spicer described in a newspaper the other day as "the handful of ideologues" in the Department of Energy, Mines and Resources, there is not a single person in Canada who supports this program. I do not have enough time to list all the industrial associations which criticize that program- manufacturers, pulp and paper companies, public real estate
February 24, 1981

companies, virtually every industrial organization in the country.
What has the minister of Finance, who has been in office a full year, done in that time other than bring in, over his signature, the National Energy Program? What else has he done? He describes his program to the press as a program of "gradualism". He says he believes in gradualism, and he is gradually trying to make things better, too. What he has, in fact, done is to take a bad situation and make it worse. That is not my opinion; that is the opinion of the experts who make their living assessing the economy and the impact of government action.
The minister introduced a budget which declared war on one industry in one part of the country. That might perhaps be forgivable if there were some over-all benefit to the country, of which there is none, according to the experts.
Let us consider, for a moment, some of the observations being made about the performance of this Minister of Finance as the result of the budget brought in last fall. I have the assessment made by the Conference Board, which is considered to be the expert in short-term projections on the economy. It projected in 1981, just prior to the budget, that gross national expenditures would increase by 1.9 per cent; after the budget, the board dropped its growth projection to 1 per cent. Prior to the budget, the board thought that real disposable income would rise by 2.8 per cent; after the budget its projection dropped to 1 per cent. Before the budget, the board estimated that the consumer price index would rise by 10.5 per cent during the next year; after the budget it said it would be 11.7 per cent.
Instead of having a disastrous situation, we will have a calamitous situation. Productivity, before the budget, was predicted to grow by .8 per cent, which is not much; but after the budget, it was projected to drop by .2 per cent.
The Minister of Finance had the gall to go to Montreal yesterday and say that it is the private sector that is lousing up productivity in our country, and they must pull themselves up by their bootstraps. The Conference Board says that it was the minister's budget which caused a drop of 1 per cent in Canadian productivity. Instead of going up by .8 per cent by next year, as would have been the case before his budget, it will drop by .2 per cent.
The minister says that there is nothing the government can do, and it is up to the private sector. The evidence is right here. It is what the government did and is doing that is driving down the productivity.
What does Data Resources of Canada say? The minister thinks highly of this group, because he quoted them in his budget. They said:
The budget therefore represents one more force weakening the prospective recovery in 1981 to 1982.
This is the independent organization of people who make their living predicting trends in the economy. They say that this budget will make matters worse.
Economic Policies
What does the Economic Council of Canada say? The general impact of the federal budget appears to increase the rate of unemployment. That is what the budget did. The Minister of Finance stood up here during question period today and said that he feels for the people; yet he authored a budget which the Economic Council of Canada says will increase rates of unemployment. He went to Montreal and said, "It is not my fault; it is the private sector's fault; it is the individual's fault. You must pull up your bootstraps and be more productive."
If that is what he feels, why does he not get off people's backs? If that is what he feels, he should stop bringing in stupid budgets like this. If he is concerned about the people of this country, when is he going to put together a coherent set of economic policies? When will he stop relying totally on the governor of the Bank of Canada to implement the one national economic policy we now have, namely a tight money and high interest policy? When will he start balancing that out?
The minister is engaged in what is described as "the big lie technique", the technique of pulling out hair, the gall to state these objectives by using flowery language to describe these attractive goals of Canadianization, increased productivity, more industrial development, and fairer revenue sharing, and then taking action which is exactly opposite to those goals.
When I read the speech which the minister made in Montreal yesterday, I found it difficult to know whether to laugh or cry. Given the total lack of any economic development policies during the past year since this government took over, I wonder whether it is not fair for the Canadian people to ask us to turf these members out of office.
Therefore, I take pleasure in moving this motion, and request that the House give serious consideration to condemning the government for its failure to introduce economic policies which would restore the economy to its full potential and would give Canadians confidence in their future.


Some hon. Members:: Hear, hear!


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, these days, a number of words have become almost household terms, such as "unilateral", "divisiveness", "alienation", "separation", and so on; but Canadians around the country have indicated unanimously, whether it be in the halls of the House of Commons, the streets of Ottawa, or in the towns and hamlets in rural areas across Canada, that they have a question, which is, "What, in God's name, is going on there in Ottawa?"
A few days ago, one of the members of the Liberal Party across they way, while discussing the Constitution, indicated that now is the time to patriate our Constitution because it is the last vestige of colonialism in Canada. At the time I did not know whether I should laugh or cry on hearing that comment. Obviously, the individual did not understand the true meaning of colonialism, or he equates it with political symbolism along with economic realities. But if one were to look at the definition of "colony", one would find it is land or territory where resources are exploited for the benefit of a foreign country.

February 24, 1981
Economic Policies
That is us, Mr. Speaker; we are a branch plant country, a colony. For example, let us consider our negative trade balance for fully manufactured goods. In the 1970s, it was nearly $90 billion but in 1979, it was $17 billion for the year, and 1980 was no better.
Just the other day I read in a newspaper that Canada is a rich, developing country and that like all underdeveloped countries, we are experiencing a chronic state of underdevelopment and a chronic state of underemployment.
Let us consider as well the current crisis in the automobile industry, and the past, present and proposed lay-offs in that sector. Let us consider too, the problems being faced by Massey-Ferguson and the deteriorating situation at McDonnell Douglas that was brought to our attention today. There is no question that Canada is being held back by a government which continues to support a branch plant economy; it has indicated clearly time and time again that it has set its mind on a branch plant approach to solving our economic problems.
A "visionary paralysis" would be a good way to describe the government's position and policies. Unfortunately, it is preoccupied with the present and, as the previous speaker indicated, it is preoccupied with the Constitution. It is composed of short-term, tunnel-vision thinkers who spend all their time devising simplistic methods of levying new taxes in an equally simplistic effort to reduce our increasing deficit.
What we need is for some clear national objectives to be established, some clear, definitive intertrade policies, some new long-term Financial policies. If one were to ask members of the government, leaders of business and leaders of labour what the objectives and goals of this government are for 1990, what would the answer be. I suggest that if one looked at the fields of agriculture, mining, forestry, fisheries or self-sufficiency in food production, one would not find the goals clearly stated or precisely identified, either for the government or for Canada.
I must give the government credit for one goal, and that is the goal of ensuring that a measly 50 per cent of the oil industry in Canada is owned by Canadians by 1990. This is a tiny step in the right direction.
We have to ask what the Tories' goals and objectives are. It is easy to recognize that the philosophy of the Liberal Party, by definition, has no long-term goals. What are the goals of the Tories? What are the clearly stated objectives of the Tory party in Canada?


An hon. Member:: Back to the eighteenth century.


Nelson Andrew Riis: Back to the time of the wealth of nations, of Adam Smith. Presumably they are based on the policies of 1776; the gospel according to the Tories. God help us all.
What Canada needs is for the government to state very clearly now what its job-creation objectives are; what percentage of unemployment should be dropped-should it be 2 per cent or 3 per cent? I think it is a shame that we have come to
agree that 8 per cent or 9 per cent is acceptable. What is our target? What are we aiming for?
We should consider, too, our target in home construction. We say that we are going to build 240,000 homes in Canada this year but why not build 500,000 in the next two or three years? Why not build more decent homes that Canadians can afford?
What is the balance of payments goal for Canada? What are the small business policies designed for the entrepreneur? And as the previous speaker indicated, what is the industrial strategy for Canada? During question period today we heard vague references to the beginnings of an industrial strategy. We have been waiting for it for years and years. The minister responsible for an industrial strategy indicated that he will be saying something about this in the months ahead. He has to spend a considerable amount of time discussing it with the various vested interests concerned, and I am not convinced that it will be to the benefit of Canadians if it is based on the past record of the Liberal Party.
Productivity is a topic that has been before the House a number of times, and it was raised again today by the Minister of Finance (Mr. MacEachen). He spoke of productivity goals but he had the courage to suggest that the output per worker has decreased and that, by and large, that is one of the crucial factors which hinders Canadian development today, and he said that Canadian workers will have to bite the bullet.
I think it is clear to anyone with even a rudimentary understanding of economics that technology and equipment are problem areas which affect productivity. Money must be spent on research and development, but with a branch plant economy in no way can we expect serious research and development to occur in this country.
Mr. Minister, you have the courage to suggest that Canadian workers are a part of the problem of Canada's lack of productivity and, Mr. Minister, I suspect that we should identify the real problem in this. Indeed, one could suggest it is yourself.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. I would ask the hon. member to address his remarks to the Chair.


Nelson Andrew Riis: Unquestionably, what this country needs now is strong political leadership to bring government, labour and business together and to address what my leader so aptly identified a number of weeks ago as the pending economic crisis that this country is about to face. We need to establish an open dialogue between these three parties in an effort to create a greater awareness amongst Canadians about our economic problems and to develop positive, co-operative solutions to them.
We have inherited a legacy which is the result of both Liberal and Conservative policies. It emphasizes the competitive and destructive forces in Canada. The problems with our Constitution today are simply a reflection of these difficulties. I refer to the balkanization that has occurred in the regions of Canada and the provinces of Canada. The provinces recognize
February 24. 1981

that they are on their own, that their backs are to the wall, and they can no longer count on the comprehensive co-operative and economic programs of this government because they are simply not there.
Put in simplistic terms, the programs of the Liberals and the Tories have resulted in a directionless, accelerated, goalless exploitation of our resource wealth-dig the coal, dig the copper, export it as quickly as possible, as we did in the days of the fur trade and the squared timber trade during our early economic development.
Although I suspect the Liberals would deny it, they have taken us to the brink of a policy of continentalism over the years which recognizes the North American continent as an economic unit but has not paid much attention to the existence of the 49th parallel.
A few months ago when the Right Hon. Leader of the Opposition (Mr. Clark) led the previous government, he gave us another example of a blatant, unbridled rush to an even more aggressive and destructive form of continentalism. Under his policies, Canada would have been even more subservient to the dictates of the North American marketplace.


An hon. Member:: Joey Reagan.


Nelson Andrew Riis: The Tories had little to say about a sound Canadian economic strategy. They wanted to return to the time of Adam Smith and the simplistic economies of the eighteenth century. Had the Tories been permitted to continue with their policy, I suspect we would now be in a permanent state of underdevelopment in this country, increasingly dependent on resource exploitation, and increasingly dependent on foreign imports. But Canadians soundly rejected that Tory program.
I hope and pray that the next time around, the people of Canada will soundly reject the hollow and shallow promises being made by the Liberal Party. I do not think there is a better example of a hollow promise than the discussion on research and development that is occurring in Canada today.
Research and development in Canada, except for Ireland and Iceland, places us at the very bottom of the industrialized western nations. At the moment our contribution to R and D is 0.9 per cent, and the minister has the audacity to stand up and say "we hope in five years to have it at 1.5 per cent of our GNP". I suggest that is a Neanderthal approach to research and development. Simply 1.5 per cent will condemn us to falling further behind in the race of western nations to participate in the development of a sound and sophisticated economy. Research and development will not even reach that in five years, as the minister has, in a sense, indicated.


An hon. Member:: Like a piano player in a cathouse.


Nelson Andrew Riis: The best measure in research and development is not the percentage of money spent per GNP, but the number of people involved as a percentage of the total population.
Economic Policies
After all, it is not the money poured in for research and development but it is the creative, energetic, innovative minds of people following a clearly defined policy which results in the positive contributory research and development of a country.
Let us look at some figures for a moment. I shall refer now to industrial research and development. The figures I have selected are from 1977. The situation, of course, has not changed since then, some have even suggested that it has worsened.
In 1977, Canada, with a population of 23 million, employed 22,000 people in industrial research and development, whereas Sweden, with 8 million people, employed 24,000 people; Holland with 14 million people had 26,000 employed; France, with 54 million people, had 120,000 employed; West Germany, with 61 million people, had 197,000 people employed; Japan, with 115 million, had 306,000 employed; and the United States of America, with 217 million, had 394,000 people involved in industrial research and development.
All of these countries, with the exception of Canada, have on stream at the moment aggressive five-year plans to double and triple those numbers of individuals involved in research and development. What is so shameful is that Canada has no goal in this area in any meaningful way. Why is this? We have to ask why it is that we are so far behind and seemingly falling further and further behind. Either a great difference exists between our industrial objectives, policy or strategy and those of other countries, or we simply do not know what is going on. I am sorry to say that I am forced to accept the latter, that we do not seem to know where we are going. We do not seem to know what our economic objectives are in this country. Consequently, we are unable to have a decent post-secondary educational policy or a research and development policy because we do not know what it is we are trying to accomplish. As the previous speaker indicated, the government is suggesting consideration of cutbacks of $1.5 billion in post-secondary educational funding. This is at a time when more money should be spent in those areas in an effort to invest in the future of Canada than is being spent now.
In conclusion, we could end up in the next few weeks with a Constitution that is the envy of the world. However, if we are not careful, we will end up with a situation in Canada without the economic wherewithal to really do anything with the Constitution.


Allan Joseph MacEachen: Mr. Speaker, I thank the hon. member for Calgary Centre (Mr. Andre) for giving me an opportunity to make a statement today on the economy.


Mr. Hnatyshyn:: The silence is about to be broken.


Stanley Howard Knowles: Is this another budget?

February 24, 1981
Economic Policies


Allan Joseph MacEachen: I must say I am not obliged to thank him for giving me any ideas as to how to manage the economy. In fact, the resolution which he has moved condemns the government for its failure to produce economic policies which would allow the economy to reach its full potential. In the course of his speech, the hon. member made not a single constructive suggestion which could be described as economic policy. In fact, the Conservative Party is groping, day after day, for a policy of some kind and it does its groping before us all during the question period as it searches for an economic policy. Because there is no co-ordination and because there is no real thought given to the question of the economy, contradictory statements are made day after day. The hon. member for St. John's West (Mr. Crosbie), supported by his seatmate, the former president of the treasury board, led an attack on what they consider to be government extravagance, the failure of the government to be more restrained, the failure of the government to reduce the deficit and the failure of the government to reduce even further the rate of spending.
That is that wing of the party. The other wing, for example, is represented by the hon. member for St. John's East (Mr. McGrath), who, day after day, asks for more spending and more social programs. At times, the Right Hon. Leader of the Opposition (Mr. Clark) joins that group when he calls for energy tax credits, and so on. I intend to say more about that later and I intend to say a bit more about the usually contradictory and often dangerous medicines prescribed by the official opposition for the Canadian economy.
First, I want to describe to the House some recent developments in the Canadian economy which are not only welcome but, in my view, are further evidence that the balanced, non-extremist approach, adopted in the October budget was the wisest course of action to take in the present situation in Canada. I stated in that budget that I rejected extreme solutions on either side. I stated quite clearly that I wanted to follow a moderate course and avoid the dangers of the extremists' positions, one adopted by the New Democratic Party and the other, not adopted by the Conservative Party but by the hon. member for St. John's West when, in his more right-wing moments, his true colours come to the surface, and he is permitted by the red Tories to show that bit of blue which designates his colours.


John Edward Broadbent: The Liberal Party is the party of the dead centre.


Allan Joseph MacEachen: The most recent information I have on the economy, Mr. Speaker, makes it clear that there was an unexpectedly strong recovery in the economy in the second half of 1980.


Ramon John Hnatyshyn: We all missed it. Where was it?


Allan Joseph MacEachen: The growth in real output during the third quarter was at an annual rate of 1.7 per cent. The fourth quarter figures will become available at the end of this week, and I expect they will show a growth rate of more than 6 per cent.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: I think that is rather remarkable in light of the gloom and doom which has been voiced by members of the opposition.
Therefore, for the year 1980 as a whole we may see a small increase in growth rather than a decrease in real growth which we expected at budget time. That recovery and that strength in the economy is most welcome and will be appreciated, I am sure, by all members of the House.
Another development is that employment has continued to rise. Almost one quarter of a million new jobs were created last year. Unemployment is still high but it is less than 7.5 per cent, less than I expected in the October budget. Of course, the main reason for this recent strength in the economy is the remarkable strength of our foreign trade. Our trade surplus in the fourth quarter was more than SI 1 billion. This is a record figure and probably exceeded our deficit on non-merchandise transactions. We may have had the first current account surplus since the first quarter of 1974. That is what is happening to the economy.
As well, there has been some recovery in consumer spending and housing helped by the decline in interest rates last summer and fall.


Harvie Andre: What decline in interest rates?


Allan Joseph MacEachen: That decline may have gone unnoticed by the hon. member for Calgary Centre. In light of his comments this afternoon, I would say he has not noticed a lot of things that have happened in this country and in this Parliament. I do not want to exaggerate, but there has been some recovery in consumer spending and housing, helped, as I said, by the decline in interest rates last summer and fall as well as by the increase in employment.
To do this well in the troubled world environment we are now facing is evidence of the fundamental strength of Canada's economy. We could not achieve those trade figures without a strong competitive power. Our competitive power is strong because our costs have risen less than in most industrial countries and because our exchange rate is favourable to our exporting countries.
It is obvious that other countries envy our rich resources. The products of our mines and forests have swelled our export figures. As one of the world's great exporters of grain, we are benefiting from high international prices. These are some of the positives that one ought to lay on the record in discussing the Canadian economy. Of course, our varied sources of energy are of immense value. One of our greatest challenges is to ensure that we develop them in ways which will serve the interests of all Canadians.
I noted the comments made by the hon. member for Calgary Centre on the National Energy Program. It is obvious that he holds these views very strongly. They are not my views, not the views of the government or of the Liberal Party. Our views are quite different from those held by the hon. member for Cal-
February 24, 1981

gary Centre. The sooner we recognize that there is a vast difference between this party and the party opposite, the better understanding we can reach in the debates in this House of Commons.


Stanley Howard Knowles: Tell us what is the difference.


Allan Joseph MacEachen: The hon. member for Winnipeg North Centre (Mr. Knowles) is seeing one of those black spots. He is the one who told us that Members of Parliament sometimes see things that are not there. He has been having one of his attacks in the last moment or two.
We have also secured impressive success in the new growth areas of high technology. I am delighted that my speech in Montreal received as much attention as it did today. I have unusual experiences in my life. 1 am accused by the hon. member for St. John's West of being silent. When I break my silence, the first man to complain is the hon. member for St. John's West. However, I broke it yesterday and talked about the impressive success that the Canadian economy has had in the area of high technology.
In my speech I talked about the Dash-8, the Challenger, the PT-6 and Telidon. All of these are world class examples of Canadian technology. We need to develop more. The emphasis which the spokesman for the NDP, the hon. member for Kamloops-Shuswap (Mr. Riis) placed on research and technology is a priority which I share and which this government shares. That is why we have placed in our spending plans a high priority on the general area of economic development. One of the most important components in that area is further support for research and development, a well-placed emphasis which was echoed by the hon. member for Kamloops-Shuswap.
I would like to say as well that the regional patterns of economic growth are changing in Canada. I did not hear very much from the opposition this afternoon about the regional character of the Canadian economy, how varied the economy is and how different the rates of growth are in various parts of the country. We all know of the dramatic growth in the western provinces.
Let me tell the hon. member for Calgary Centre that my Canadianism is not restricted to my own region. I am delighted that Alberta is currently showing a strong rate of growth and Saskatchewan has a healthy rate of growth. British Columbia has a problem with housing and services. Why? Because of strong economic activity.


Harvie Andre: You will notice there are no Liberals there. Do you think it is a coincidence?


Allan Joseph MacEachen: I want to emphasize that the pattern of growth is different in various regions. There is a strong and promising growth in western Canada. I assure the hon. member for Calgary Centre that the National Energy Program will assist and facilitate the further development and growth of western Canada rather than impede that growth, as he suggested in his speech. I will be ready to stand by that
Economic Policies
prediction a year or two down the road when the economy will be strong and definite.
There is a new promise of growth in Atlantic Canada. There is no longer any doubt that we have a major commercially viable oil field in Hibernia. There are new markets for the coal of Nova Scotia and new potential for the fisheries of Atlantic Canada as a result of the development of the 200-mile limit.
Let us not put down this country in an economic debate. Let us look at some of its strengths and acknowledge its weaknesses as well. There are weak spots in the Canadian economy. The weakest spots recently have been in the automobile industry, in the farm implements industry and in some other manufacturing industries located mainly in Ontario.
We have taken steps to support the automobile industry in this particularly difficult adjustment period. We have taken steps to assist the farm implement industry. We are absolutely determined to ensure that the manufacturing industry achieves its potential for further growth and development. I did not find the same pessimism among the businessmen who spoke to me before my budget, especially from the Canadian Manufacturers' Association. Their message to me was that we have regained our competitive position; we had lost it, but we have regained that position; we are in a good position now to compete vigorously and aggressively internationally; and "Please don't do anything in your budget through additional corporate taxes that will impede our future growth and development."


An hon. Member:: And you listened to them.


Allan Joseph MacEachen: We did listen because I thought that in maintaining the status quo in the tax regime in that area we were doing something quite constructive, and that has proved to be the case.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: The main problems we face in Canada are closely interlinked. The first is the slowdown in productivity, and the second is the accelerating rate of inflation. These are the two problems we face as an economy. I have heard not a word from spokesmen opposite as to how we should cope with these seemingly intractable problems. One gets the impression that they are intractable as one sees each industrialized country wrestle with declining productivity. Even Germany and Japan, the model economies of the world, are struggling with the problem of declining productivity.
So what do we do about it? 1 receive no answers from members of the opposition. These are worldwide problems, but that does not make them any less serious for Canada. In my address yesterday I pointed out that output per worker has actually declined since 1973 after rising by nearly 3 per cent per year in the previous 12 years. That has happened in our economy; there is no point in attempting to avoid staring it in the face.


Harvie Andre: How come it happened?

February 24, 1981
Economic Policies


Allan Joseph MacEachen: It has happened for a variety of reasons, but it is important to understand that when one uses output per worker as a measure of productivity, that is not casting any slur on the workers of this country. When we use that expression, it is used as a measure. It is not an evaluation of how hard individuals work. It is not a moral judgment nor a political judgment; it is simply a way of measuring the productivity of our country.
What I was saying yesterday in Montreal is that if we in this country want-as I think we should have in the future-better standards of living, better security for the needy, better pensions and better wages, the only way we can reach that is through increasing productivity. There is no other way.
I made the statement that as a nation we are entitled only to what we produce. We are entitled to the gross national product, to nothing more and to nothing less. Rising entitlements can only be legitimized through increased economic growth. I demonstrated that because during the period 1961 to 1973 the gross national product nearly doubled. But how did that come about? It came about because of rising productivity. In the last seven years, since 1973, there has been declining productivity. Even though the rate of growth in employment has been about the same, we are now facing a situation in which we have the phenomenon of declining real incomes. If we want to turn that around, we have to do a number of things, and I discussed these matters quite fully in the address I gave yesterday.
Of course, inflation is a very serious problem. Prices have been rising rapidly ever since the early 1970s. There was some relief in 1976 and 1977 as a result of the anti-inflation program. Food prices declined at that time, but they have been accelerating steadily since then. The cost of living rose more than 10 per cent last year, and in January of this year, it was 12 per cent higher than a year earlier. We have not done quite as badly as some other countries, but we have not done as well in meeting the challenge of inflation as have Germany and Japan, which have done better than Canada. However, we have done better than quite a number of other countries.


An hon. Member:: Name one.


Allan Joseph MacEachen: We know that inflation is bad, unjust and discriminatory. It has strong elements of injustice because it affects different groups in the economy and in society differently. Retired pensioners, for example, and those who are not strong in the economy suffer most. That is why inflation is bad from a social point of view, but it is also bad from an economic point of view because it prevents us from reaching our full potential in the way of economic growth and in the way of employment growth.
The fact is that at the present time inflation is deeply embedded in our system. It is embedded not only in the system but also in the psychology of the population, all of us. That psychology has to be turned around. It will not be turned around quickly.
There are those who believe it can be turned around very quickly by what I consider to be punitive economic policy measures, by turning the screws and by pursuing policies
which will have an effect on inflation and probably bring the rate of inflation down more rapidly through deep expenditure cuts, for example, or strong doses of monetary policy. Those things may bring down the rate of inflation, but at what expense? At the expense of declining output and rising unemployment.
If hon. members say to me, "Why don't you bring down inflation more rapidly through this type of measure," my answer is simply that I feel that the social costs are too great and that there is more to economic policy than the policy itself. One has to examine its impact on the community and society, what it will do and how well it will be supported by the population. All the evidence is not in on this particular question, but I would not recommend to my colleagues nor to Parliament a policy which would be Draconian in its application through monetary and fiscal policy in order to reduce inflation rapidly.
That is why I have opted for a policy of gradualism. I believe over time that would produce the results with the least possible damage to the economy and society. That is the stance I adopted in the budget, and it is still my stance.
All that has happened since the budget reinforces the necessity for a strong anti-inflationary stance in the economy. Let me repeat very briefly the elements of that anti-inflationary stance. First of all, there is the necessity for restrained growth in the money supply. The Bank of Canada has been successful in meeting its progressively lower growth targets and has had the government's full support in doing so. The reduction in the target band from 5 per cent to 9 per cent to 4 per cent to 8 per cent, recently announced by the governor of the bank, is a further step in this steady approach to achieving the monetary conditions for non-inflationary growth.
I fully support the further step of the Governor of the Bank of Canada. Of course our job and the job of the Governor of the Bank of Canada in administering monetary policy in Canada has been made more difficult by the volatility of the interest rates in the United States which we have all observed. Faced with these conditions, in my opinion the Bank of Canada has struck a reasonable balance between moderating the impact on Canadian interest rates and on the exchange rate.
When American interest rates rise and remain higher than Canadian ones, as they did for a good part of 1980 and the beginning of 1981, there is a pressure on Canadian interest rates and the exchange rate. You take it on either or on both. The governor has struck what I thought was a balanced approach by taking it on both. It is a matter of judgment. I do not think anyone has found a better way.
The fiscal policy is another element of our anti-inflationary stance. We are determined to reduce the deficit and our financial requirements. Relative to the size of the economy, our deficit and financial requirements this year have been held below the peak levels reached in 1978-79. Deficits as a percentage of the gross national product are projected to be cut in
February 24, 1981

half over the next three years under the budget's tax and expenditure plan.
So, we are winding down the deficit. But, why not a faster reduction of the deficit? In 1980 there was some weakness in the Canadian economy. If we had reduced the deficit and decreased expenditures more rapidly, we would have increased the weakness of the Canadian economy. That had to be taken into account. We intend to hold government expenditures to or below the trend growth of the gross national product. This is not only important from the point of view of reducing inflation, but also to ensure room, resources and incentives for sustained private sector growth. We will be able to achieve deficit reduction while hopefully avoiding general, personal or corporate income tax increases, further helping the economy to achieve its potential.
Obviously comparisons are drawn between our fiscal stance and the measures proposed by the President of the United States. I have no intention of prescribing for the United States economy; that is the exclusive responsibility of the authorities of the United States. But I would say that in substantial part, for example, the tax measures of the president represent a catching up to a system already in place in Canada. United States personal income tax cuts will not go much further than to make up for the past and prospective increases which result from the lack of indexation in that country. I believe the tax relief for 1981 which will be afforded to the Canadian taxpayer through indexation is greater than the tax relief which will be afforded through the cuts proposed by the president.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Also I would add that the proposed new depreciation rates in the United States leave our industry, especially manufacturing, in quite a favourable position relative to that country.
The hon. member for St. John's East (Mr. McGrath) asked me to take guidance from the economic package of the President of the United States. As I said, it is not for me to prescribe for the United States, but if we undertook at the present time the deep expenditure cuts inherent in the president's proposal, if we, for example, decided to reduce our expenditures to a rate of growth of 6 per cent per year, as is the presidential objective, we could not do so without harming basic fundamental social programs of vital importance to Canadians.
I believe that by 1983-84 the rate of growth in government expenditures will be about 10 per cent. In order to achieve this, we will have to secure a saving of $1.5 billion in intergovernmental transfers. We do not know where those savings will occur yet. The hon. member is premature in saying that they will occur from post-secondary education; that has not been decided. But even to achieve the savings I am projecting, which are less onerous than the ones projected in the United States, it is essential that we secure not only savings within our own programs but savings in intergovernmental transfers.
This is our gradualist stance; over time we will reduce inflationary pressures by following a moderate, gradual, medi-
Economic Policies
um-term, fiscal monetary and expenditure plan. That is where we are at as a Liberal Party. I believe this moderate course will ensure that the Canadian economy in the 1980s will achieve its full potential, that productivity and investment will be improved, and that we will not fall victim to some of the more extreme economic policies advocated from time to time by members of the opposition.


Some hon. Members:: Hear, hear!


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, certainly the presentation of the Deputy Prime Minister and Minister of Finance (Mr. MacEachen) was from a purely political point of view. His arguments had very little relationship to economics or fiscal and monetary policies. He justified everything he has done.
It reminded me of being in the House during my first session when I believe the Hon. John Turner was minister of finance. It has been said on several occasions that that was the turning point in the Canadian economy, the turning point from management to mismanagement in basic government programs which affect the entire economy of the nation.
I remember seeing Mr. Turner standing in approximately the same location as the present Minister of Finance and defending policies which were critized by economists, businessmen, and the rank and file of the people as not being in the best interests of Canada. He defended them with an evangelistic fervour which has been unequalled in the House, even by the present Minister of Finance. It was the beginning of the decline in Canada's economy. Eventually that gentleman saw the folly of the ways of the Liberal government and without a word left the government, and properly so. The only regrettable thing is that he made his contribution to our present economic crisis-and we are very close to a crisis-and left without giving Canada any guideline as to what might better be done for this country than he was able to do following Liberal politicians and their bureaucratic recommendations. Today is a repetition of the bureaucratic recommendations which were obvious in the program of the then minister of finance to whom I have just referred.
This is a divisive program. It cannot be described in any other fashion. The Minister of Finance has stated that it is his objective to save $1,500,000,000 in cost-sharing programs, grants to the provinces, etc. All this is doing for Canada is transferring the tax responsibility and the service responsibility from the federal Minister of Finance and the federal Grits to whomever may be unfortunate enough to find himself in power in any province in Canada.
His dismissal of the idea that secondary education may suffer as a result of the reduction in the distribution of wealth to the provinces is just not worthy of a man of the intelligence which he is supposed to have. There is no question that if $ 1,500,000,000 is pulled back from the provinces, then services rendered by those provinces must suffer or they, in turn, must tax. Can the provincial governments then expect the political

February 24, 1981
Economic Policies
repercussions which emanated from the Minister of National Elealth and Welfare (Miss Begin) when in campaign against provincial governments and, in defence of the federal government she criticized the health programs of virtually every province in Canada after she had tried to cut the purse strings before they left Ottawa? That is the policy which this government is again projecting. It will reduce the grants to the provinces in one way or another. There is no question but that those programs in those provinces will suffer.
One provincial minister of health in Canada has said that there is no way that progressive policies which have been adopted historically can be followed. He says that they may be able to maintain the present medicare program and the present hospital program. He says that they have been trying to supply auxiliary services which have been expanding on a regular basis, but if there is a cut in the federal funds awarded for health to the provinces then that will be the end of the progressive programs of which he has been so proud. We will come to the position where we shall tax the provinces, if there is to be any progression in health. And so it goes throughout the provincial programs which have been so dependent upon the largesse of the Liberal government in Ottawa, which largesse is apparently shrinking today.
I was rather amused when the Minister of Finance said that he spoke to businessmen before handing down his budget. I wonder how many of them have given him the privilege of an address since he handed down his budget. His performance has certainly not pleased the business community. It has not pleased consumers. It has not pleased the manufacturers or the wholesalers' associations, or any other group. I wish I had time to give the minister some quotes to support this. Even that loyal paper, The Toronto Star, had a recent item on February 12 condemning the policies of the government in respect of its application of interest rates and the cost of doing business. The minister does not want a Draconian policy, but he is forcing one upon the provinces of Canada. Indeed, the provinces will take the blame and not the federal government, if there is any way that it can be transferred by the Liberal government to them.
We have conducted ourselves in a fashion which is very comparable to the German fiasco of inflation immediately after World War I. I challenge you who support this government to read the various steps which took place, and to compare the identical cash flow situation in Germany after World War I with the cash flow situation which we have here today. Yes, we have a favourable trade balance. No, we do not have a favourable balance of payments cash flow in this country. What is worse is that we must depend upon foreign sources for our borrowings and unless our exports go up immensely and our imports go down drastically then our cash flow, our balance of payments, will get worse, as it did in Germany after World War I.
The reasons are different. The reason over there was that they had payments to make as reparations to those countries which were victorious in that war. Our reasons are that we are spending in excess of our means. We are sending money out of
this country in the form of interest and in other forms of cash flow, such as loans to other countries at no reasonable interest rate. We are not aware of just what the consequences of the unfavourable balance will be in the towers of Ottawa, as we build it and continue to build it by further deficit financing and further borrowing abroad.
There are those who have said of inflation that it just is possible that once it has reached the double-digit stage it is irreversible and that there is not the will of government. That is what the Minister of Finance said today. He said he does not have the will or the political courage. He said that he does not have the courage to apply to Canada those economic measures which could, in fact, reverse the inflationary tendencies which are so devastating to the total welfare of our economy.
I think you would find that at the moment, Mr. Speaker, we are resorting to any means possible. We are borrowing. We are giving the Canadian people a mild sedative to ease the pain for the short term. I want to tell you, Mr. Speaker, that the delusions of the opiate are there ahead of us in the long term, if we do not resort to a responsible position.
Let us take a look at a few of the little things that happened in 1980 versus the things which the minister was talking about today with respect to employment. According to statistics, the rate of job creation under this government is one half of that achieved by the previous government in its short term in office. We can take those months and compare them. But there is something even worse than that. The rate of employment in the private sector is only one quarter today of that of 1980. The real job creation has taken place in the public sector, at public expense-at taxpayers' expense. That is where the job creation has taken place. The minister smiles, but he is fully aware of that.
The rate of employment in the public sector has gone up 12 times in 1981, or since February of 1980 until today. So it is easy, as long as the taxpayers will pay the bill, to have job creation at public expense. But it is more challenging and beyond the scope of the imagination of this government to create an economic atmosphere in which employment will take place in the private sector.
The minister referred today to the psychology of inflation, those things that people anticipate and want. He has not referred to the government policy which might in any way deflate those inflationary expectations. He says he is going to turn the screws, but not on himself, rather on the provinces.
The two problems of productivity and inflation to which he has referred are real. I share his concern about the existence of both. I submit to you, Mr. Speaker, that as long as interest rates are as high in this country as they are, any small businessman-and small business employs about 60 per cent of all Canadians-is very hard-pressed to see the logic. To obtain a more productive plan, when the interest rate at this moment in time will cost more than the savings in higher productivity, is self-defeating. The only way we will achieve higher productivity is when the incentive for it is there in earnings for the labourer and in earnings for the employer. Both are absolutely
February 24, 1981

essential. There is a feeling of insecurity. No one knows which way the government will move next to collect its money.
I said in this House earlier, in another debate, that I agree with the Minister of Finance that, in fact, we do have an international problem. In fact there are similar policies in other countries. We do have interest rates which are too high-not only in Canada but in other countries. I submit this is self-defeating, if we cannot get together with some of the others who find themselves indubitably in the same position of declining standards of living.
We can talk about rights, we can talk about defence; we can talk about any number of matters on an international basis. Why does this nation not take the initiative and call an international conference to determine how, where and when we can get down to the point where people can afford to live? It is not impossible.
If we are as concerned as we claim to be about the Third World and about Canada-and we can express little interest in the Third World, economically, if we do not express an interest in prosperity at home-why have we as a government not obtained for this nation some opportunities to get rid of some of the products which others need and which we can produce in abundance? We are prepared to sell our raw materials to Japan. We need to sell them; I recognize that, but we have very much been denied the right to sell beef or agricultural products on the Japanese market. This activity is increasing very slowly.
We drive down the street, and we meet Japanese cars, but it will be very difficult to go to Japan and find a Canadian french fry- maybe a few. There are obstacles there which we must remove, and if the Minister of Finance wants that era of prosperity to recover, we must negotiate and develop a twoway street. We have a European Economic Community. Why are we not trying to put fish, agricultural products, building products, and pre-fab houses into their market? Why should we take the various European vehicles-cars, among other things? A Japanese car is not the only item which comes into this country from which we derive no employment benefit for the people of this nation, except when someone is needed to drive it up to meet a customer.
I ask the Minister of Finance, the trade ministers of this country, when did we list last get a contract in the European Economic Community for an up-to-date telephone system, an electronic system? I agree with the Minister of Finance who said that Canada has probably got the best technology in the world. But we are not successful in our tenders on these items which can turn the economy around in this nation, and all this is coupled with an element of desire on the part of the minister to turn the screws on himself instead of on the provinces, which is his present objective.


An hon. Member:: Right on.


Fred Alward McCain: The Minister of Finance claimed that there are regional problems. Indeed, there are. There is regional
Economic Policies
difficulty in the industrial structure of Ontario. So we are, and I do not complain about this, offering assistance and incentives to the manufacturing industry, the auto industry and the machinery industry. Good! But what makes me angry is that we talk about Massey-Ferguson, with its 6,000 plus employees in Canada, getting SI00 million, maybe $200,000 million in assistance from the Government of Canada. However, in the Atlantic region, we have 100,000 people in fishing boats, in processing plants, and in boat manufacturing groups, 100,000 people engaged in that industry. And we are not getting as assistance to that fishing boat industry, the equipment to modernize that fleet, and we are not getting the equivalent of the interest on the aid which has been extended to Chrysler and to others in that category. That is the division which exists, and that is why there is regret in Atlantic Canada that there are these problems. There are divisions.
In this country we are trying to apply a single forest policy across Canada, and yet in Atlantic Canada we have the budworm to a degree that no other part of Canada has. We cannot get the co-operation of this government to develop proper sprays, insecticides, pesticides, proper applications to preserve that forestry. One third of all the working people in New Brunswick are employed in forestry. But there is nothing coming forward there, nothing comparable to the assistance that is given to Chrysler.
I do not regret the assistance to Chrysler. I regret the division that the Minister of Finance mentioned. Why does he not exert some influence?
What about agriculture? I mentioned the necessary trade policies that we need, that if we are going to take all the goods from the European Economic Community, the Japanese, et al, then let us get some goods in there as well. Agriculture needs assistance. It needs a port in St. John's and in St. Andrews. It needs trading opportunity. Again, we are not getting the equivalent of the interest on the aid that has been extended to industry in central Canada. There is no quarrel with aiding central Canada, but let us not be divisive or regional, and let the Minister of Finance and the Minister of Fisheries and Oceans (Mr. LeBlanc) and the Minister of Agriculture (Mr. Whelan) speak up for those regions which need the help. They are very obvious by their silence, while people in need suffer.
The minister mentioned Hibernia. What is the story of Hibernia? If you talk to anybody who has any knowledge of that Hibernia oil field, what will they tell you? We are not going to proceed with development in the most productive way until such time as the federal government ends its era of uncertainty, until it gets down to brass tacks and tells us where we are going.


Some hon. Members:: Hear, hear!


Fred Alward McCain: We talk about uncertainty. The government has given the country misinformation. It has said that it was new information when it was old. There is not any question but that all the statements which were made in this House, for instance about the removal of oil rigs from the west, were right and up to date, but the Minister of Energy, Mines and

February 24, 1981
Economic Policies
Resources quoted figures which were two or three months old, and they were quoted to the public as if they were gospel.
On one day, when those figures were given in this House, I found that the Minister of National Revenue (Mr. Rompkey) knew how many rigs were going out, that the oil industry in Alberta knew how many were up on blocks and not working, but the Minister of National Revenue misled this House and the people of Canada to believe that the figure was one half of the 180 which were out of production. That is the uncertainty, the lack of trust which has been generated. No, you do not have to be Draconian, but you must show leadership.
The minister must show leadership in order to get the steel mill going in Sydney, an area that he represents. He must show leadership and courage as Minister of Finance in order to get the offshore resources going and to remove uncertainties and give them the regulation they need. We need the money that these things will produce, and there must be planning if that is to be forthcoming. We cannot go on in this way, with rail line abandonment and the removal of express services in Atlantic Canada. Some of the little communities will shrivel and die because they cannot get services. Only yesterday I received a message from a little village which is 25 miles from the nearest express service. It has been told there will be no more deliveries. And beyond that village there are people who live 50 miles from the CP Express service, and it is to be removed. These things are divisive, Mr. Speaker. They are divisive to western Canada, to Atlantic Canada, and to central Canada.
Let us start to serve Canada, Mr. Speaker, with an economic policy that builds, develops, and creates incentive. Let us not discourage people with high interest rates. Let us get on the track.


Some hon. Members:: Hear, hear!


John Leslie Evans: Mr. Speaker, I listened with interest to the speeches given today by members of the official opposition and the opposition, and especially to the speech made by the Minister of Finance (Mr. MacEachen). I think that his was one of the best speeches and explanations of the government's economic policy ever given in this House. I am sure it was able to illuminate the government's policy clearly and concisely for hon. members opposite and for the public who may have been watching television.
The minister indicated that the government's policy is a balanced approach to gradual reduction of the deficit over time; the maintenance of social programs, of the basic core of the social programs that have been the backbone of this country and which have been a model for the rest of the world; the movement of our priorities within the envelope system toward greater economic development; incentives for energy development, and the National Energy Program. This is a program that I am proud of in spite of the comments of hon. members opposite. The minister has indicated that he is proud
of it. We think it is the right policy and program and that in the years to come it will prove itself as being the right approach.
A great deal of misinformation has been passed around by hon. members opposite and the media about the nature and effects of the National Energy Program. I intend to deal with some of these in my speech, Mr. Speaker.
There has been a great deal of debate in the House in past months, particularly by the official opposition, which indicates that they believe the government does not have priorities, that it should undertake programs in a number of other areas, that spending should be increased, the deficit should be reduced, interest rates lowered, and that inflation should not be stimulated. I think hon. members of the official opposition will admit, if they think clearly about it, that to do all the things we have been advised to do would lead to utter and absolute economic chaos in the country. We cannot do all the things that hon. members opposite recommend. You cannot increase spending at the same time as you reduce spending; you cannot decrease the rate of inflation and at the same time dramatically decrease interest rates. Those things are inconsistent.
I would ask hon. members opposite, I would plead with them, to put the policy proposals they have into some kind of framework so that they can be understood and are consistent. If one thing has become clear with regard to the economic policy and the economic pronouncements of the opposition in past months, it is their total inconsistency. If the opposition expects the government to listen, it will have to take a consistent position on major matters of economic policy such as the deficit, inflation, growth and development. It must tackle the questions of cutting the deficit, of reducing government spending on the one hand and on the other increasing massively the money available for research and development, for industrial adjustment, industrial relocation, retraining programs, energy tax credits, subsidies on home heating oil, and so on. It must resolve how we can meet the problem we have with the province of Alberta about the price of oil, which it would like to see much higher, while at the same time we hold down the price of oil to the consumer.
When I read the motion put forward by the hon. member for Calgary Centre (Mr. Andre) I almost regarded it as a laughing matter. It has become clear during the past months that the opposition has no idea what a coherent, consistent economic policy is, one that recognizes all the factors to be considered in developing a policy that is in the interests of the entire nation.
We have to be concerned with unemployment at the same time that we are concerned with inflation. We have to be concerned with economic growth and development at the same time we are concerned with reducing the deficit. These things have to be balanced. In October last the Minister of Finance brought forward a budget that took a balanced approach and which will lead to a reduction in the deficit.
As the minister said, we could take a Draconian approach. I do not say, for example, that the United States has taken a Draconian approach, but from the point of view of expenditure
February 24, 1981

cuts their approach is much harder than the approach taken in this country.
I believe, as I think hon. members opposite believe, that our social policies form a sound, solid basis of social security for Canadians. They are a consistent, coherent set of policies and form a sound basis. Perhaps that is not the case in the United States and, as a result, perhaps the President of the United States in his wisdom believes that he could undertake much deeper cuts in some social programs than I believe we could in Canada. To make such cuts in Canada would undermine the basic integrity of our social security system and, to my mind, that is totally unacceptable.
There have been some accusations made against the government in the past, particularly in the debate on borrowing authority. The hon. member for St. John's West (Mr. Crosbie) and others regard the budget which he introduced in December of 1979 as a standard against which this government should be measured and against which the last budget should be measured. Today the hon. member for Calgary Centre implied that if the hon. member for St. John's West had been allowed to implement that budget the country would be in better shape, the deficit would have been reduced further and faster, interest rates and inflation would be lower, and there would be greater economic growth and development, the business community would be in better health, and so on. That is incorrect, Mr. Speaker. In a speech I made last week I indicated why it is not correct. Our budget indicates clearly that we are going to show a reduction in the deficit, and that our financial requirements will decline by an amount similar to that which would have been achieved had the budget of the hon. member for St. John's West been implemented.
Yesterday the hon. member for York-Peel (Mr. Stevens) spoke in Cornwall and indicated that when his government was in power a year ago it had a plan to cut the national deficit by $5 billion. He noted that at present our total deficit is $14 billion and indicated that the deficit under the Conservative government would have been much smaller. If all factors are considered, if we are intellectually honest and analytically correct in evaluating the situation, we will find that the deficit was grossly understated in the December, 1979, budget.
First, if we just look at late winter and the early spring of 1980 we find that the dramatic oil price increases were not anticipated in that budget. That alone would have increased the deficit facing the budget of the hon. member for St. John's West by some $2.3 billion this year as a result of the higher oil import compensation payments. Hon. members opposite can say "no, that is not correct, we would have done something about it". But what would they have done? Would they have reduced the oil import compensation payments? Would they have increased oil prices much faster than they promised in the budget? We never hear these kinds of things when hon. members say that they would have done so much better.
The hon. member for St. John's West has admitted the recession would have led to a deficit, and I will quote him
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again, "a few hundred million dollars" higher than he had projected in that budget, and with it interest costs. Over all, the deficit under that December, 1979, budget would have been $2.7 billion to $3 billion higher than the forecast found in the December, 1979, budget. If those figures were put together, hon. members would find that the deficit in the December, 1979, budget and the reduction between now and 1983-1984 would have been no better than the deficit reduction found in the budget of October 28, 1980, presented by the Minister of Finance.
If hon. members look at financial requirements, under the October 28, 1980 budget, they are to be reduced faster, and by a greater amount, than the financial requirements would have reduced under the budget of December, 1979. The facts are there, Mr. Speaker. Hon. members can evaluate the data I have put forward to them and I will be glad to explain it all to them in person if they need more help. I hope this indicates that, given the situation confronting this economy, the budget which the minister has put forward is a responsible, reasonable, and the best possible response to those economic situations.
We also hear that we have a high interest rate policy in Canada. In the past the minister has put forward an explanation of how these excessively high interest rates have come about. It is said honestly and in a straightforward manner that because of the federal reserve policy in the United States, there has been a rapid rise in interest rates there. In turn, that has caused an outflow of capital from Canada, causing our interest rates to follow theirs. If our interest rates did not follow those of the United States, the Canadian dollar would drop even further. The Bank of Canada policy, the policy supported by the minister and by the government, is a balanced response which takes some of the pressure in higher interest rates, some of the pressure in the decline of the dollar, and will try to balance out these pressures.


Mr. McKinnon:: Herb Gray knew nothing about this. Explain it to Herb, too.


John Leslie Evans: Hon. members opposite have said in the past and today that that is not true, that the United States policy had nothing to do with Canada or very little to do with Canada, that our policies are being brought about by mismanagement of the government or are being brought about by a government which does not care. We put forward the proposition earlier that other countries were experiencing the same kinds of difficulties as a result of that U.S. policy and hon. members opposite said "no, that is not true".
Helmut Schmidt in Germany, according to a press report the other day, said that he was greatly disturbed by that very policy in the United States because it was placing extreme pressure on the Deutschmark and other Euro-currencies in the European Common Market. It bears out what the minister put forward in the past, namely, that the U.S. policy has had a dramatic effect. When you consider the proximity of our two countries and the ease with which capital flows between Canada and the United States, the effect on us has been even
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February 24, 1981
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greater than the effect on those countries. When one considers that Canada is comprised of 24 million people versus 240 million in the United States, if U.S. policy has an effect on a country like Germany with 50 million to 60 million people, it will certainly have an impact on a country like ours with 24 million people and a much smaller capital market.
We faced those problems. The minister responded in a responsible way, and the governor of the Bank of Canada responded in a responsible way. We took that pressure, partially in interest rates-our interest rates did not go as high as those in the United States-in order to protect Canadians from even higher interest rates. But the price we paid was a reduction in the value of our currency from 87.5 cents to 83.5 cents, which I believe is today's value. Our dollar has dropped as low as 82.5 cents. To me, that is a clear indication the government understands the monetary system and that it is working in a balanced way to try to avoid the excesses which would be foisted upon us by hon. members opposite.
We have heard hon. members opposite say, "Drop the interest rate. Unilaterally keep interest rates 2 per cent, 3 per cent or 4 per cent below where they are now." That would be possible. There is no doubt that if you went stark raving mad, you could do that but consequently the value of the currency would drop like a rock. Once the public's confidence in the currency of a country is shattered, not only would you get a reduction in the value of the currency reflecting the economic situation, but you would get a reduction in the value of the currency caused by a serious financial panic in the country. That is not rational. It is not good economic policy. It is certainly not a policy that would be followed, was going to be or ever will be followed, by this government.
We hear comments from hon. members opposite that there is no development policy or economic policy which has coherence. I say that is not true at all. If we look at the budget figures we find there is a massive increase in 1981-1982 in expenditures by this government for economic development. The increase for economic development is 22 per cent. If we look at energy development, we find that expenditures for energy development will increase from $3 billion to $4 billion a year between now and 1983-1984.
If oil import compensation payments were taken out we would find energy and economic development expenditures would increase from $6.9 billion in 1980-1981 to more than $13 billion in 1983-1984. That is a massive increase in economic development funding.
We have also put in place a policy for assisting adjustment in manpower training. Clearly the government understands the difficulties. Clearly the government has put forward a rational and reasoned economic policy to deal with those difficulties.
What members of the opposition fail to understand is that one has to follow a balanced approach, one has to follow a consistent approach. Therefore one cannot devote all of the energies and resources of the government to dealing with problems in one particular area today and then shift those resources to dealing with another area tomorrow. That is what we hear from the opposition day after day. Today we hear,
"We want more expenditures; more things to help people." Tomorrow we will hear, "Forget the people, we want more things now to help increase research and development, increase industrial development, increase energy development," and so on. The following day we hear that Draconian policies are wanted to get interest rates down, among other things. It is totally inconsistent. If hon. members are honest and listening closely today, they will see that the policy prescriptions and discussions which have been put forward are the right ones.
The hon. member for Calgary Centre did not put forth any policy alternatives. He just complained bitterly about what the government was doing. We find in fact there have been no policy alternatives put forward. There has not been a fair and rational analysis of the government's economic policy, which I am convinced is the right policy.
If I might close on one note. There has been a suggestion by the hon. member for Calgary Centre that the National Energy Program is the sole and total cause of a mass exodus of oil rigs from western Canada. The hon. member for Calgary Centre should once and for all come clean. The facts of that issue are clear. They are not as told by the hon. member for Calgary Centre. In fact an oversupply of rigs was generated over the past two to three years. Gas is found in most of the holes drilled in the west. There is now a glut of gas and no hope in the near future of either domestic or foreign markets for that gas. Small producers cannot shut in that gas and sit on it. They have to sell it. If they cannot sell it, which is the market situation, why drill for it?
The other fact is that the United States has gone to world prices for oil. If hon. members opposite want us to go to world prices for oil, they should say so. That is not what they said in the past. By keeping our price below the world price, oil exploration and development in the United States is much more profitable. That is why the rigs have moved out of the country. That is being realized and admitted now in the press, in the west, and by the oil industry. The truth is finally starting to come out that it is not the big, bad NEP that is causing all the problems.
You have indicated, Mr. Speaker, that my time is up. I think I have been able to show a few things today. One is that the government understands the situation we are in presently. We have a coherent and consistent policy for dealing with that. There has been an awful lot of hokum coming from the other side of the House for the last four to five months. I hope at some time they will come to their senses and it will stop.


Mr. Scott Fennell (Ontario):: Mr. Speaker, I suggest that the Parliamentary Secretary to the Minister of Finance (Mr. Evans) forward that speech to his colleagues at university and get their reaction. I would like to point out to him that the outflow of capital has not only been a fact due to interest rates. It has been Canadians running their money out of the country to get it on the oil play in the United States.
February 24, 1981

The last time that I spoke in the House was before the Christmas recess. At that time interest rates were on the way up and the dollar was on the way down. Since that time the dollar has gone down even further and interest rates have gone up.


Allan Joseph MacEachen: You are wrong there.


Thomas Scott Fennell: It has gone down.


Allan Joseph MacEachen: No.


Thomas Scott Fennell: By a couple of points you are right. I acknowledge that.


Allan Joseph MacEachen: It has never gone down as far as it was that day.


Thomas Scott Fennell: Hopefully interest rates in Canada have peaked. They will probably head down again in a few months. We will have a few months' respite from this high interest rate policy of the Liberal government. All of a sudden the government will have marvellous new spending programs. That will push interest rates up again. They will have to borrow more money. That money they spend is not theirs. It belongs to the taxpayers of today and of the future.
The government has said that it never heard any good suggestions from our bench. I suggest that sometime the government members should sit down and read the 20 hours of debate that went into the December 18-19 discussion on the economy. Some excellent points were brought up in those debates, maybe not all, and maybe not all from one member. However, I maintain that the Minister of Finance (Mr. MacEachen) and his parliamentary secretary should go through every speech to find any essence they can grab onto in order to make this a better country.
That may get us out of the economic dilemma which is crucifying our youth, senior citizens, low and middle income earners, and the balance of the economy. The only economic development I have seen come forward from this dilapidated government is a bailout for Chrysler and Massey which may cost the taxpayers of this country hundreds of millions of dollars.
There was a spending spree which will cost the taxpayers between half and three quarters of a billion dollars more than PetroFina was worth. It will not add one cupful of oil to our reserves, which are rapidly disappearing. Perhaps the government will justify the price of Petrofina by suddenly putting the price of crude oil in Canada up to world prices. Ministers will then say they are heroes, that it was worth $120 a share. That is an expensive lesson for this country.
Next week marks the first week of reduction in production in Alberta and the commencement of an additional billion dollars expenditure per year for foreign oil. This is all brought about due to the total lack of communication and co-operation of the Minister of Energy, Mines and Resources (Mr. Lalonde).
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The above-mentioned comments refer to bailouts, buyouts and sellouts. It will cost the taxpayers of this country $3 billion this year for this great budget. The minister talks about a 22 per cent increase. I have not worked it out, but it will be much more. What benefit are we in this country getting directly? It is time that the country stopped being fearful of plagiarism and found out how West Germany and Japan accepted world oil prices and overcame the economic disadvantages. The government continually says we cannot afford 75 per cent of world prices. Ministers should visit Japan and review the research and development in that country provided by direct grants and by tax incentives. They should send people to Texas to see the boom created by a sensible and fair energy program, both by the Democratic and Republican parties.
The government should study the American small business act which provides for reduced interest rates early in a company's origination or expansion. They do not refer to small business as a company requiring $100,000 to $500,000. They go as high as $25 million, and refer to corporations with 2,000 employees. The Americans have faced economic reality. Business today is larger than we realize it is. It must be larger in order to compete successfully in the 1980s.
Our alternative is pretty pathetic, a $100,000 guaranteed loan at one per cent over prime which works out to about 20 per cent at today's rates, or a $500,000 debenture which cannot be deducted for income tax purposes. The great Federal Business Development Bank charges 2 per cent over prime, which currently costs borrowers 20 per cent. Who can afford a 20 per cent loan on debt in this day and age?
Instead of all these Mickey Mouse plans the government should have put up guarantees to the chartered banks and subsidized interest loans. Say the interest rate is 20 per cent; the government would provide a 10 per cent subsidy to get the effective interest rate down to 10 per cent.
Assume they pay that 10 per cent directly to the banks and assume that there is a 20 per cent failure of the money that is guaranteed by the banks, which is very high. The government could have provided $10 billion in guarantees through the chartered banks to small entrepreneurial Canadians to create labour, reduce unemployment and help the industrialization of this country, from being a supplier of raw materials-
May I call it six o'clock?


The Acting Speaker (Mr. Blaker):: It being six o'clock I do now leave the chair until eight o'clock this evening at which time the Chair will recognize the hon. member for Ontario for the completion of his remarks.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
[Stage Direction]
February 24, 1981
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The Acting Speaker (Mr. Blaker):: Order, please. When the House rose at six o'clock, the hon. member for Ontario (Mr. Fennell) had the floor.


Thomas Scott Fennell: Mr. Speaker, I seem to be put in this position quite frequently. When we were interrupted for the supper hour, 1 was making a concrete suggestion. The minister said we never come up with any concrete suggestions. I would like just to repeat it.
What I was getting at was that this government has used $3 billion of taxpayers' money on the various programs it has undertaken. My proposal, very simply, is that we look at the small business act in the United States. In the United States loans are guaranteed through the chartered banks. For example, the interest rate would be reduced on small business loans by 10 per cent. In effect, a 20 per cent loan would be a 10 per cent loan. Let us assume that there is a 20 per cent failure factor with respect to these loans, so we have to write off another potential $2 billion of what we are providing. Under this scheme the government could have spent $3 billion guaranteeing $10 billion to chartered banks to help small entrepreneur Canadians to create labour, reduce unemployment and create industrialization in order to take this country from being a supplier of raw materials, which we have been since the beginning of time, to being a processor and manufacturer of finished products. This would still cost $3 billion, and I think it would be a much better way of spending our money.
It would also recover its potential cost from corporate taxes, income taxes and sales taxes, and it would give the country the opportunity to make its citizens proud, productive people. They are ashamed now. They are not as productive as their neighbours. They would like to be more productive and, by putting money into investment in manufacturing, they become more productive.
With respect to inflation, I hope with the new leader at the helm of our neighbour we might benefit from some rub-off. If we do not, then we will face not only an energy crisis by 1985 but also an inflationary crisis which will erode all the basic values upon which this country was built. We will require wheelbarrows to carry our money and bicycles for transportation because we will not be able to afford to buy cars from countries with sound currencies. They will be too expensive, and we will not even have the fuel with which to run them. Are we to face the same crisis Germany faced in the 1920s and China faced several times in the first half of this century? It is time for us to get up off our backsides and develop a sound and practical economic and industrial policy to encourage Canadians to get away from what the minister said. He said that Canadians are a discouraged group right now. Canadians should be encouraged to become a successful industrial nation, to use our huge supply of natural resources, to process them and manufacture them and create unparalleled employment and pride in our country.
The greatest fear I currently have is for our youth. I have five children. We hear about makeshift give-away programs created by the Minister of Employment and Immigration (Mr. Axworthy). Some last for three months and some last for nine
months, but they do not equip youth with any benefit which will help them in future employment beyond the period a particular program lasts. We must develop long-term apprenticeship programs which permit youth to develop skills using modern technology which will enhance the productivity of Canadians in the future.
What action are we taking to assist our senior citizens? Why must we be the judges who say that a productive Canadian must retire at the magic age of 65? Let us consider the mortality rate of those gentlemen-particularly gentlemen- who retire at age 65. How many deaths are caused by boredom after energetic, useful and productive lives in the labour force? Are we addressing the erosion of their lifestyle, or have we stuck our heads in the sand hoping the problem will go away? It will not go away.
We must control government. We must get our budget into balance and bring inflation under control. We must do more than just wrestle inflation to the ground, which is the argument we have heard from the other side.
Every time I hear about a regional grant, I think regional grants are a great idea, but all the money just flows back into the two central provinces. It does not help the provinces where the money is spent. We must reassess the regional granting system. Grants should be given to the regions to develop industries which are most suited because of the proximity of raw materials, convenience to the market or the adaptability of the labour force. We must allow the regions to develop their own industries rather than industries being imposed upon them by a group of bureaucrats in Ottawa.
The government does not acknowledge that this country is made up of many different peoples from different regions with different needs and lifestyles. This should be acknowledged by the centralist government in Ottawa. They should adapt programs in conjunction with the regions, rather than subjecting the regions to ones imposed by unitary government.
The government talks about Canadianization programs. Very clearly they are nationalization programs. Is this Russia? Are those the goals we are reaching for? Does nationalizing by paying millions of dollars out of the country increase employment? Does it bring more income tax back into the country? What about corporation and sales taxes? Could it simply be a method of acquiring successful tax-paying corporations and of turning them into bungling Crown corporations run by unsuccessful Liberal candidates and unemployed friends of the party?
The truth is that Crown corporations do not work and have not worked in the past. The president and chairman of Petrofina indicated that he would not stay with the corporation. The incentive to management, owners and labour is removed. This is what is disruptive about Crown corporations.


Mr. Caccia:: How about Air Canada?
February 24, 1981


Thomas Scott Fennell: Personally I fly CP if I can, and it is only a second choice.
The Auditor General indicated in his report that bureaucracy is not as productive as the private sector. I plead with the government to look at its policies and what it is doing to this country so that Canadians will have an opportunity to move ahead to the point where hopefully Canada will be a great nation of highly productive and proud people.


Some hon. Members:: Elear, hear!


Mr. Peter Lang (Kitchener):: Mr. Speaker, I should like to read into the record the motion we are discussing. The following motion was put forward by the Conservative Party:
That this House condemns the government for its failure to introduce economic policies that would restore the economy to its full potential and give Canadians confidence in their future.
This motion is couched in the most broad and obscure language; it is singularly lacking in specifics. There are no specific criticisms and no constructive or positive solutions. One must assume that the opposition, despite its rhetoric, endorses our policy because it cannot come up with anything better.
The fact is that the Canadian economy, in common with nearly every industrial country of the OECD, has undergone a period of slow growth. However, on balance the record will show that Canada has done much better than nearly all other major countries of the industrialized western world. The record is much more credible than the doom and gloom assumptions inherent in this motion.
Canada had a rather small growth, as measured by the real GNP, in 1980. This is not surprising, in view of the fact that the United States also underwent a brief, but sharp, recession in 1980 which saw a decline in real output in that country. In fact, according to the latest OECD Economic Outlook report, the four major European countries of Germany, France, United Kingdom and Italy averaged a 1.25 per cent decline in real national output in 1980. The same report suggested that our recovery in real output this year, although modest, will be better than in any other major western country, with the exception of Japan. We all know that the quality of life in Japan, where one must pay $75 for a steak dinner, would not be acceptable in Canada. If we take the entire decade from 1969 to 1979, we find that the growth of real output in Canada averaged 4.25 per cent per year. This was a record growth among all major OECD countries, second only to that of Japan.


An hon. Member:: Who was in power during that time?


Peter Joseph Lang: In answer to the hon. member, for 90 per cent of that time it was the Liberal government.
Compared with the United States, Canada has been at least a full percentage point a year ahead in terms of economic growth over the past decade. Attaining one's full potential is not difficult when one's major trading partners are faring relatively well. However, it is difficult in the short-term if
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one's trading partners are undergoing a recession. After all, Canada is one of the major trading countries of the world. Germany is the only country in the entire world which has both a larger population than Canada and larger per capita exports or imports.
We hear very little from the opposition regarding Canada's record of performance in international trade. It is not often that Canada records a trade surplus of some $8 billion, despite the recession in the United States. Two thirds of the increase in Canada's exports last year were to countries other than the United States. The increase in our exports to non-American countries more than paid for our entire increase in merchandise imports. Our share of exports going to the United States last year of 63.4 per cent was the lowest since 1966. Our share of exports going to EEC countries other than the United Kingdom was the largest during the last decade, at 8.3 per cent. These figures indicate that we are broadening and diversifying our trade and that we are less dependent on a single trading partner, particularly the United States.
Our current account surplus last year in relation to our total GNP was the best since 1974. One used to hear opposition members belabour the fact that Canada's current account deficit was the largest among OECD countries. Why do we not hear them acknowledge the fact that it is now among the best? The latest OECD Economic Outlook in December, 1980, estimated that the total OECD deficit would be in excess of $73 billion, with Germany, Japan, France and Italy all recording higher current account deficits than Canada.
While much has been said in the media regarding the exchange rate of the Canadian dollar vis-a-vis the United States dollar, comparatively little has been heard about the fact that both Canadian and United States currencies have gone up sharply in recent months as against most of the major European currencies.
In recent years our underlying competitive position has definitely improved both at home and abroad. We are benefiting from a much more competitive Canadian dollar. Our unit labour costs in manufacturing have gone up comparatively less than in nearly all major industrial countries of the western world. Coupled with substantially lower energy costs and with net export positions in food, forest products, mineral products and energy, Canada can look to the future with more confidence than any other country of the free world.
Our record of performance as far as job creation is concerned has been consistently at the very top among western OECD countries. It is not often recognized by the opposition that we are one of the few major OECD countries to show increases in manufacturing employment. In 1979 the increase in Canadian manufacturing employment was 115,000, or 5.9 per cent. Even in 1980 there was an increase in employment in manufacturing of some 37,000, or 1.8 per cent, despite the recession in the U.S. If we look at the record of manufacturing employment in recent years of some of the major industrial countries, we find that there has been an absolute decline in manufacturing employment in countries such as Japan, Ger-

February 24, 1981
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many, Australia, France, The Netherlands, Norway and Sweden, and I could go on.
In broader and more general terms, Canada's record of employment creation, even in the midst of a so-called recession, has been the best in the western world. In the last three years a total of over one million additional jobs were created in Canada.


An hon. Member:: Not in the private sector.


Peter Joseph Lang: The opposition is pointing out that Canada had a year of no growth for the first time since 1954. They should be pointing out as well that this is the so-called recession and that we added close to 300,000 persons to the employment rolls.
This government's record of performance on unemployment deserves some comment. The opposition used to insist that Canada's jobless rate was the highest of the OECD countries. However, despite that so-called recession in 1980, the unemployment rate in Canada did not increase. It remained at the same level as in 1979. More importantly, it actually declined on a seasonally adjusted rate as the year progressed. Our most recent unemployment rate of 7.3 per cent was the lowest monthly rate in the past 12 months. Despite the fact that Canada's labour force continues to grow faster than in any other major country of the OECD, current unemployment rates in this country are lower than in the United Kingdom and in Italy. They are now comparable with those of France and The Netherlands, which have stagnant labour forces or no unemployment growth.
The U.S., which only a short while ago had a lower unemployment rate than Canada, has now caught up with us. Its unemployment rate is now equal to ours. But its record on total employment and manufacturing employment gains do not compare with ours. We have done a much better job in terms of creating jobs than has the United States. It is fair to say that the policies of other countries have scarcely come near to the policies which this Canadian government has proved to be more effective in the past decade.
Let us turn now to the problem of inflation. To most people in Canada inflation is the number one problem we face. We find that it, too, is not confined to our country but that it afflicts every major industrial country of the world. It is true that the consumer price index in Canada increased by 10.1 per cent in the calendar year 1980. However, the OECD reports that the average rate of inflation went up by 11.5 per cent in four major European countries last year. It also points out that the consumer price index in the United States last year rose by 12.4 per cent, following a 13.3 per cent rise in 1979. Canada has fared much better than the United States in dealing with inflation.
Much has been made of the fact that the Canadian consumer price index rose by 12 per cent between January, 1980 and January, 1981. The fact is that energy prices, which increased by an average of under 10 per cent in both 1978 and 1979, increased by 16 per cent in 1980. Moreover, energy prices in
the most recent 12-month period increased by 25 per cent in Canada, with the increase in fuel and gasoline prices being even higher than that. Thus, it is strange to hear criticism from the opposition that we are not moving our domestic prices of energy up fast enough to close the gap with world prices. And at the same time the opposition belabours the rise in inflation. They cannot have it both ways. If we accelerate sharply the pace of energy price increases, it follows that we must witness an escalation in the rate of inflation, which carries with it high interest rates. In turn, high energy costs become imbedded in the cost of producing food, tractor and combine costs, the price of fertilization, the cost of processing, transportation, communications, clothing and other elements of the cost of living. It is inconsistent and misleading to pretend that we can fully absorb in a painless fashion increases in energy prices, which are two to three times as fast as the underlying rate of inflation, without inflation being exacerbated, as the Conservatives would like us to believe.
In summary, Canadians can comfort themselves that while we are obviously not able to realize our full potential in the short run, because of international inflation and oil shortages, the Canadian economy is faring much better than that in any other major country of the western world. There are no quick fix cures for the inflation and slow growth which afflict all countries of the industrial world. The performance of the Canadian economy is most commendable in relative terms. Given our wealth of human and natural resources and our high technology, we can look forward with confidence to the medium and the long-term future.
There is growing evidence that in terms of growth the Canadian economy in recent months may have turned the corner. The growth in the Canadian economy in the second half of last year was appreciably faster than in the first half. Moreover, there has been a definite upturn in recent months in the newly published Canadian Composite Leading Indicator.
It would appear that Canadians have more faith than their U.S. counterparts that inflation can be brought under control. Personal savings in Canada, which reflect faith in bringing inflation under control, in recent years have been consistently higher than in the United States, about 10 per cent versus 5 per cent. The speculative bubble which has been present with respect to gold, silver and other commodities has burst. Wage rates, which have kept up with the consumer price index, have been relatively restrained for some time now. All in all, Canadians can look beyond the immediate problems to the medium and long term with confidence.
Before closing, Mr. Speaker, I would like to raise two concerns that I see with respect to our national economy. The first is that we must reach a speedy agreement on oil pricing to reduce uncertainty in the business community and to reduce the uncertainty of the people of Canada.


Some hon. Members:: Hear, hear!


Peter Joseph Lang: The second is that the doom and gloom prophecies and criticisms which come from the Conservative Party
February 24, 1981

create uncertainty in the business community and in the people of Canada. There is not much we can do about that.
The federal government has shown flexibility with regard to oil price agreements. It is up to the Premier of Alberta to recognize that we cannot go on any longer without an oil pricing agreement. He must recognize that we cannot go to world prices and that Canada as a whole cannot suffer increased inflation, increased unemployment and lack of energy security in order to allow Peter Lougheed to build his Alberta Heritage Fund.
There are also regional diversities in the economy of our country. This government deals with them. We have adjusted our industrial strategy so that we can deal with the problem of the west having a booming economy while the economies of Ontario, Quebec and the maritimes are slowing down. We also have DREE programs and equalization grants to support our social programs which are so important.
I think it is important to recognize that Canada has developed a national economic policy, in conjunction with a national energy policy, that provides a climate for the full development of our economic potential. I support this government's position right down the line.


Some hon. Members:: Hear, hear!


Charles James Mayer: Mr. Speaker, I listened with interest to the hon. member for Kitchener (Mr. Lang), who just finished his remarks.
I cannot help but comment on some of the things he said. Everyone starts out by comparing our economy to others around the world and saying that we have done well in relative terms. The point must be made that other countries are not as fortunate in their physical and human resources as we are. Surely the only legitimate comparison is with our own potential.
For those hon. members from Quebec who follow hockey, I would point out that the Montreal Canadiens do not play in a league with the Sherbrooke Beavers; they play in their own league. Surely that is the kind of comparison we should make of our ability to perform in the sphere of economics. We should be talking about our own potential rather than comparing ourselves to countries less fortunate in physical and human resources.
Two or three weeks ago, the hon. member for Etobicoke Centre (Mr. Wilson) spoke in this House and told us that on one of his business trips to Hong Kong some businessmen had remarked on the opportunities and resources that Canada has, and said they could not understand how we managed to mess things up so badly.
This afternoon the Minister of Finance (Mr. MacEachen) spoke of an unexpected strong recovery and referred to a 1.7 per cent annual growth. I do not know how anyone could regard a growth of 1.7 per cent as unexpected. He pointed out that employment continues to rise but he did not mention that
Economic Policies
unemployment is also rising. For the first time in this country the total number of people who are out of the marketplace and looking for work is over one million. Hon. members opposite should be consistent, and when they speak of the rise in employment they should also speak of unemployment as a percentage of the total work force. Otherwise we only get half the story.
The Minister of Finance also spoke of an $ 11 billion trade surplus which he claimed was close to being cancelled by the deficit in the non-merchandise account.
I have some graphs here that were prepared by the hon. member for Capilano (Mr. Huntington). We all recognize the valuable work he has done on behalf of the business community of this country. They show that the monthly trade balance in food products, which are basically raw material, is on the increase. Exports of crude materials such as coal and products which do not have value added to them, are on the increase. Exports of semi-manufactured products are on the increase. When it comes to manufactured goods, however, there was an $11 billion deficit in 1977, a $12.2 billion deficit in 1978 and a $17.2 billion deficit in 1979. When we import manufactured goods, we import jobs, but when we export raw material we export jobs. In 1980 the deficit in manufactured goods was close to $18 billion. When we talk about trade surpluses, therefore, we should remember that the surplus is basically in raw materials. The things that create jobs and wealth for our citizens are end products, but in this category the graph zooms down to the basement. If we could have manufactured the $18 billion worth of end products that we imported last year, 350,000 jobs would have been created in this country.
That is the kind of thing we would like this government to do. We realize it cannot do everything and that things cannot be changed overnight but we must move to correct this horrendous balance of payments deficit in the manufacturing sector. We cannot ignore it or pretend, as the minister did, that we have a trade surplus of $11 billion, without pointing out where that surplus is. We cannot address the problem unless we recognize it.
The Minister of Finance is not in his place this evening. He was scheduled to appear at a meeting of the finance committee this evening to discuss Bill C-59, the borrowing authority bill. Hon. members will remember that the government introduced closure in order to get it to committee in a hurry. I understand that no notice was given of cancellation of the committee meeting and there was no meeting of the steering committee. A notice was sent to the offices of members of the committee that it would not meet this evening. The excuse given was that the minister would be in the House listening to our expressions of concern about the Canadian economy. The minister is not only silent, he is contemptuous. If he is not going to be in the House tonight, surely he could have at least gone to the finance committee meeting. The very able Parliamentary Secretary to the Minister of Finance (Mr. Evans) is in the House, and I am pleased to see him. Surely the minister should have had the courtesy to come to the House after cancelling the committee meeting.

February 24, 1981
Economic Policies
This afternoon the parliamentary secretary covered many aspects of the Canadian economy in his speech. At one point he spoke of the opposition being intellectually honest and academically correct. I should like to remind him of his appearance at the finance committee in December, 1979, when the subject was interest rates, and quote from the proceedings of that committee to illustrate how he has been intellectually honest and academically correct, consistent and coherent, as he said in his speech. I should like to draw attention to some of the things he said when he was outside the government and to point to some of the policies this government is pursuing at the present time.
Speaking of the Bank of Canada, he said on December 11, 1979, as reported at page 21:14 of the committee proceedings:
When the chips are down, the bank cannot be relied upon to maintain its control over the money supply; as a result, would you agree that this should result in a removal of discretionary authority from the bank, and a directive, as you said, to maintain control over the monetary aggregates only?
The committee was considering a method of controlling the money supply as a means of regulating the inflation rate. He continued:
And I would go one step further, as I have in the past in this committee, and ask you if that would imply to you that the bank be given a directive to allow both interest rates and the exchange rate to find their own level in the marketplace without outside intervention.
The question under consideration was that of the Bank of Canada interfering in the marketplace to regulate the interest rate or the value of the Canadian dollar. When he was in opposition, the parliamentary secretary advocated that the money supply be set and the market allowed to determine the interest rate and the value of the dollar.
We know that the Bank of Canada regularly interferes in the marketplace-every Thursday at the auction-to do what it can to regulate the value of the Canadian dollar. When the parliamentary secretary talks about being coherent and consistent, I would urge him to set an example, which is not evident in some of the things he has said at the finance committee and some of the things he now supports as Parliamentary Secretary to the Minister of Finance. If the government wants to urge members on this side of the House to be coherent and consistent, I should like the parliamentary secretary to do the same.


Some hon. Members:: Hear, hear!


Charles James Mayer: Mr. Speaker, the Minister of Finance has miraculously appeared. I hope he remains to listen to what I have to say. This afternoon, when he was congratulating himself on the performance of the Canadian economy, I was afraid that he might get a sore arm from patting himself on the back. Indeed, I was about to suggest that the House should send him a bottle of liniment to use on his arm so that it would not get any worse. However, he has returned to the Chamber and I am glad.
I should like to turn now to some 'of the things that the Prime Minister (Mr. Trudeau) has said. The government insists that we be consistent and coherent in all we say, but we
all remember the occasion two or three years ago when, in a year-end review, the Prime Minister said we would have to accept more government interference in the marketplace, because a free market economy obviously does not work. In answer to a question put two or three weeks ago, the Minister of Finance said that the government still believes in the market economy, in the market approach. I would urge that the government get its own act together and decide what is consistent and coherent as far as its policy is concerned.
Let me talk a little about an area that I come from, and that is western Canada, and relate it to grain movement in particular. We all know that there are many problems associated with the grain transportation business in western Canada. There have been many positions advocated as to how to correct this problem. What I find rather unfortunate-I want to pick a word here that is not too hard on the government-is that the government itself cannot get its own act together to decide what kind of approach it wants to take to this problem.


An hon. Member:: How about "stupid"?


Charles James Mayer: We have the minister in the other place responsible for the Canadian Wheat Board saying he does not want anything done with the statutory rate problem. We have the Minister of Agriculture (Mr. Whelan) saying, in a speech given in Edmonton some two weeks ago, that he would like to see the matter resolved within the current crop year, which would mean that there would be a solution to it by August 1, 1981. We had the Minister of Transport (Mr. Pepin) saying that he would like to refer the matter-or is trying to get a position through cabinet whereby the matter would be referred-back to the Canadian farmer through a position paper. We also have the minister responsible for economic development in the other place saying he does not want anything done until there is a chance to do some kind of study on the CPR and the land grants that it had, and whether those kinds of revenues from the land should be included in the revenues that the railroads are claiming against other things besides grain movement.
So, we have four ministers of the Crown taking different positions. I find this very unfortunate, because what has happened in the past two to three years, is that farm groups have come together and established a negotiating position. I might add that when you have several farm groups representing large numbers of farmers in western Canada coming together and agreeing on a position to take to the government, it is a position that is arrived at with a considerable amount of soul-searching, and yet that is what has gone on in western Canada, and that is the position that farm leaders have taken.
The Prime Minister (Mr. Trudeau) said here in the House, some two weeks ago, that he does not want to move on the statutory rate issue until the farm community has established its position. I find that, again, to be a very unfortunate statement because if the farm community was being irresponsible, I can simply say that our position is unified. We want
February 24, 1981

the government to assume all of the additional costs between the compensatory rate and the statutory rate, and that should be paid to the railways by the federal government, which would be a further drain on the federal treasury.
The farm groups in western Canada have not taken this position, although I think it would be very easy for them to do, and it would be a unified position, and they could take it to the Prime Minister, who says he wants to have a unified position presented to him. It would be very easy for the farm groups to simply get together and say, "We want the federal government to totally fund the difference between the statutory rate and the Crow rate," and yet the farm community has not done this. They have taken a responsible position, yet the Prime Minister castigates them because they do not have a unified position, and he is not going to move on it until they do.
I might add that it is not simply a problem for western Canada, as I pointed out in this House several times before. It is a major problem which affects all of Canada. It would help us in our foreign exchange earnings and help to add to the $11 billion surplus which, as the minister correctly pointed out, Canada had in its trading accounts. It would add to that. As a result, it would add to the value of our dollar. It would decrease the pressure on our interest rates and thus, we hope, lower the interest rate. It would help the manufacturing industry in eastern Canada, and, it would help Massey-Fergu-son and Chrysler, so that presumably those companies could find themselves in a better financial position.
This is what I find to be inconsistent as far as this government is concerned. Again, I have to castigate them for standing up and simply saying that we cannot have it both ways. I am not asking for additional government expenditures, and at the same time expecting the government to go ahead and decrease its deficit. Nothing I have said this evening has pointed in both directions at the same time.
The government can do one other thing which would not in the least involve an increase in its expenditures and would show benefits as far as the economy is concerned. For a brief time, when my party was in power, we appointed a grain transportation co-ordinator to look after grain movement in western Canada. This is a position which has been long advocated by all parties in the House. The position was filled in October of 1979 by Dr. Hugh Horner, a former member of this House. He resigned from that position in October of this year, and that position has not yet been filled by the Minister of Transport. I find this unfortunate, because we all know that we have limited transportation capabilities in western Canada, and the co-ordinator was doing an excellent job of getting the best out of our grain transportation system. Most of the people to whom I have talked thought that he had done a very good job in terms of co-ordinating grain movement. This is a position that is now vacant.
We have an acting director of the grain transportation authority in western Canada. We have several people assembled from industry across Canada who have been on loan to the grain transportation authority, people from the grain companies, from the transportation companies. They are rapidly
Economic Policies
losing morale, and the information I have is that a lot of them will be thinking very seriously about resigning before the start of the spring planting season in western Canada. If we lose these people whom industry has loaned to the grain transportation authority, the whole grain transportation authority is in danger of collapsing. This is a responsibility of the federal government, and I would urge the federal government to go ahead and assume its responsibility. Again, it would not cost the federal treasury any additional money. The position is in place, and simply to let it die by default by not appointing a new co-ordinator, to my way of thinking, is a shame, because it is one way of making maximum use of the limited number of transportation facilities we have in western Canada.
I would like to point out another area in which I have concerns. When the hon. member for Vegreville (Mr. Mazan-kowski) was minister of transport, he made no bones about establishing the goal of increasing our exports of grain by some 20 per cent over the just-concluded crop year. We have not heard anything in terms of a target like that.
Let me back up. The target was to increase our capabilities, to export grain by 20 per cent so that by the year 1985 we would be exporting 30 million tons of grain. He came very close to increasing the amount of exports that we had by 20 per cent, and without the unfortunate accident in Vancouver in which the Second Narrows Bridge collapsed we would have reached it during 1979-80.
So far as I am aware, the government has not presently announced any intentions of what their target will be for increasing the amount of exports. Again, this would help our economy. It would help, as I said previously, our ability to foreign exchange around the world, because we know that grain is certainly going to be in demand around the world. Anybody you talk to who is in the grain export business knows that our grain will be sold if we get to export position.
As I pointed out, there are a couple of areas in which the government can do without spending additional amounts of money. It would help the government to earn more taxes, thus increasing the revenue base from which the government operates. At the same, it would not increase government expenditures.
In addition, we heard the western development fund announced in the Speech from the Throne. This is a commitment of money that is apparently made to western Canada. Some of us have made suggestions to the government as to how this money should be spent. We have suggested that it be spent on infrastructing on roads, on upgrading railroads, and things of that nature that will be an investment and will show a return as a result of that part of the country being able to produce more.
I understand, from the conversations that I have had with some of the members opposite, that there have really been no guidelines set as to how this western development fund would be used. There is an area that the government could pursue without committing any additional money, and thereby increasing the government deficit. I would urge the government to get on with setting the guidelines for how the western

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development fund will be used so that we can proceed to use this money to help us generate more jobs and more economic activity in the country.
In the time remaining I would like to speak briefly about the small business community. As some of you know, the small business community-depending on whether you look at new jobs or the total jobs in the small business sector-accounts for roughly 50 per cent of the jobs in Canada. One of the things we tried to impress on the minister when we talked about the Small Business Development Bond is that it should be extended past the end of the current year, and that it should also be extended to businesses that are unincorporated. I have also had conversations with the Minister of State for Finance (Mr. Bussieres), and I appreciate the opportunity I have had to speak to him. Any of the times that I have talked to them, they have pointed out that it is a very expensive program, and that it would be hard to justify extending the Small Business Development Bond past March 31, 1981.
Recently I received some information from the Canadian Federation of Independent Business which shows that the amount of money required to create a job under the Small Business Development Bond-to create jobs, not to maintain jobs, which is another aspect-is lower than for some of the other programs. For instance, the Canadian Federation for Independent Business estimates that it would cost $5,600 to create a job under the Small Business Development Bond concept. Under the Regional Development Incentive Program, the cost was $8,400. The Canada Works is roughly equivalent to the Small Business Development Bond. In the local employment assistance programs it costs $7,000 to create each job. I would urge the minister to have another look at the Small Business Development Bond. What appeals to me and to the small business community about it is that there is no paper work involved. We all know of the paper burden. We all know of the work which has been done by the office of paper burden reduction. I have to congratulate the minister on this. I think the office has done a good job and it is generally recognized that that office has done a lot to eliminate paper work which is a real headache for many small businesses.
So far I have just talked about the cost to the government to create a job in terms of lost tax revenue. It says nothing about the kinds of jobs that will be maintained. The Small Business Development Bond is of the most benefit to those businesses that are not taxable. In the main it will serve to keep those people in business. The Canadian Federation of Independent Business estimated they would create 36,000 jobs by a loss to government of $1.25 billion. I asked the CFIB for a figure, and I asked them if they had done any work on their models to show how many jobs would be saved if everybody who made use of the Small Business Development Bond were in a loss position or in a non-taxable position. The estimate was 63,000 jobs. Therefore it seems to me you could look at a considerably lower figure than $5,600.
If we look at the Small Business Development Bond, not only in terms of the additional jobs it would create but also in terms of jobs it would save you would find that the people who would benefit the most from it are those in a loss position, and a figure considerably lower than $5,600 to create one job would result. Even now $5,600 compares very favourably to the other costs of creating jobs under other government programs. As I said, the beauty of it is there is no paper work.
I hope that I have pointed out to the government that there are many things we have said on this side consistent with a lower deficit and increased economic activity which, in the long run, will generate more taxes for the government.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, the hon. member for Kamloops-Shuswap (Mr. Riis) who led off our party in this debate began his speech by telling us that when he went home his constituents greeted him with the simple question: "Good God, what are you people doing in Ottawa?" I suppose members will not be surprised if I say that is precisely the question I am asked whenever I am home on weekends.
Last year the cost of living went up by 12 per cent. For food consumed at home, it went up by over 13 per cent. For fuel and utilities, the cost of living went up over 21 per cent. Therefore, it is not surprising people complain and wonder what they are going to do. It is not surprising that a Conservative economist, Michael Manford, of Merrill Lynch Royal Securities Ltd., is quoted in today's The Globe and Mail as saying that inflation in Canada in the next year will get worse rather than better. It is not surprising that workers who are still fortunate enough to have jobs, particularly when they belong to unions and have some bargaining power, are now beginning to demand and are trying to get double-digit wage increases. Workers need an increase of more than 10 per cent just to try to keep their standard of living where it was last year.
It was disturbing, to say the least, to read the speech given by the Minister of Finance (Mr. MacEachen) yesterday to the Canadian Club. In part it read:
The simple truth is that as a nation, we are entitled only to what we can produce. We are entitled to our gross national product-to nothing more, to nothing less-and rising entitlements can only be legitimized through increased economic growth.
Last year's economic growth was less than 2 per cent. It will probably be less than 2 per cent this year. If that is all ordinary citizens can look forward to, then the minister is saying to them that they can expect and should get a decrease in their real income of about 10 per cent. This is not what the minister is expecting of other sectors of society, those who do not work for wages and salaries. He certainly has no right to expect that kind of approach from ordinary people in this country.
Also there are concerns about unemployment. I heard the hon. member for Kitchener (Mr. Lang) boast about how well we are doing in Canada. I do not think we have a right to boast when according to official figures 945,000 people were unemployed in January of this year. That is 8.3 per cent of the

work force. The figure for women and young people is substantially higher than that.
The former minister of employment and immigration implied on more than one occasion that unemployment was not very serious because often it is not the primary earner who is unemployed. Nothing could be further from the truth. People in this country are very concerned. They are not only faced with the kind of unemployment now prevalent in most parts of the industrialized world; they are now frequently seeing a very disturbing phenomenon in Canada. They see plants which have been in operation for 50 or more years being closed and the people who have worked in these plants for all of their working lives losing their jobs. These plants are being closed for reasons beyond the ability of the workers to do anything about it.
Yesterday morning before I came to Ottawa I met with a group of workers who had worked at the Maple Leaf Mills Ltd. plant which had been in operation in Winnipeg for more than 50 years. It closed very recently. Let me illustrate what unemployment and plant closure mean to one person. This illustration could be duplicated hundreds and thousands of times across Canada, but the situation in Winnipeg is not nearly as serious as that in the province of Ontario. My example concerns a woman, age 57, who worked at the Maple Leaf mills for 35 years. Just before the plant closed she was earning $8.61 an hour or about $344 a week. When the plant closed, this woman was laid off. At age 57, it is very unlikely she will ever get a job again, certainly not one that would pay her the kind of money she was earning. She worked in a unionized mill. The union contract had a clause in it about severance pay, so this woman will receive full pay for the next 35 weeks. In other words, she will receive 35 weeks of severance pay which works out to about $12,000. Also she will receive almost a full year of unemployment insurance benefits. However, after that she will be in real trouble because the mill did not have a good pension plan. She will get $81 a month until she reaches age 65. How is that woman to manage? How are many of the people who are being laid off to manage? Nevertheless, the minister indicated that workers in this country cannot expect any more in increased pay than the increase in productivity.
I have pointed out how wrong the minister was to have suggested that, but if he really believed it, he should have taken steps to see that kind of approach applied across the board to all sectors of our society. The hon. member for Kamloops-Shuswap talked about that this afternoon. While the minister has been telling the Canadian people to lower their expectations, the government never applied that kind of thinking to the business community in this country.
According to the business section of yesterday's Globe and Mail, the banks in this country increased their assets in the last year by 22.7 per cent; the Royal Bank, 22.1 per cent, Canadian Imperial Bank of Commerce, 20 per cent; Bank of Montreal, 30.3 per cent; Bank of Nova Scotia, 25.9 per cent and Toronto-Dominion Bank, 23.4 per cent. Therefore, we are
Economic Policies
not talking about small impoverished corporations but the largest and richest corporations in this country.
When we look at their profits, we see they are in the hundreds of millions of dollars. In 1980, the Royal Bank increased its profits after taxes by 21 per cent from $270 million to $327 million, the Bank of Montreal by 15.1 per cent to $263 million, the Toronto-Dominion Bank by 14.5 per cent to $121 million and the Bank of Nova Scotia by 22.3 per cent to $221 million.
The oil companies have gone on strike. When a group of workers in this country goes on strike, immediately we see editorials in newspapers and demands in Parliament and the legislatures that something be done to stop the strike because it creates difficulties for the people. The oil companies, among the richest corporations in this country, have gone on strike. They have refused to invest in Canada and are cutting back on exploration. Why? They are not making enough profits. The figures show that is untrue, that it is a lie.
The figures are very clear. In 1980, the profits of Imperial Oil increased by 38.3 per cent over 1979 to $682 million, Shell Canada by 37.1 per cent to $355 million, Gulf by 31.9 per cent to $380 million and Texaco by 41.5 per cent to $373 million. That is what is going on in this country, but the Minister of Finance tells the ordinary citizen of this country to cut back on his expectations. All he wants is to live the kind of life he lived in the past. He is prepared to work and do his share.
What did the minister say in his speech in Montreal? He said we are in trouble because our productivity is not growing. He said:
Although we have enjoyed roughly the same rate of employment growth in the last seven years, output per worker has not only failed to increase-it has actually declined.
An editorial in some part of Canada will indicate we are not doing great because Canadian workers are not prepared to work. That is not true. If our productivity is not increasing as it was in other years, there are very clear reasons why. It is not because Canadian workers do not want to work. It is because government and industry have not prepared for the kind of society in which we live.
We have no industrial strategy in this country. Despite all the speeches he made while in opposition, the Minister of Industry, Trade and Commerce (Mr. Gray) has not brought forward an industrial strategy. The result is that our manufacturing industries are steadily declining. In 1970, 26 per cent of the work force was engaged in manufacturing. By 1979 that figure had dropped to 19 per cent. In 1970, 21 per cent of our exports were manufactured goods. Today it is 10 per cent. In 1970, we had a $3 billion deficit in manufactured goods. In 1979 the deficit was $11.5 billion.
Our factories are not operating anywhere near capacity. Plants which were designed to operate on two shifts now work only one shift. Workers who were working five and six days a week now work three. Corporations did not use their profits in years of high profit to modernize and retool their plants and equipment.

February 24, 1981
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For many years the automobile industry made tremendous profits, as did the pulp and paper industry. Now they come to government cap in hand asking for help. The percentage of our labour force in the service sector is increasing every year. That sector is not as productive as the manufacturing or mining industries or the oil and gas industry which is highly mechanized and automated.
Lastly, we have the spectacle of Canadian corporations and the multinationals involved in a rash of takeovers; Thomson buying FP Publications and Hudson's Bay, CP busily trying to buy corporations in the United States and Seagrams wheeling and dealing. These takeovers do not add anything to the productive capacity of this country. This is why our productivity has not increased in recent years.
This country is and will continue to be in trouble as long as the government refuses to do what every other country in the industrialized world has done, with the exception of the United States and Canada. Government must take the lead in planning, together with industry and labour, to use human and natural resources to the fullest capacity in order to produce our food and the goods for which we have a natural advantage and compete for sales in the international markets in order to keep Canadians working.
Until the government gets involved in that kind of planning and devises the kind of industrial strategy the Minister of Industry, Trade and Commerce spoke about so volubly when in opposition, this country will not only continue to be in trouble but the trouble will get much worse.


Mr. Roy MacLaren (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, the discussion this evening centres on the goal of greater economic growth, a goal we all desire. We look for growth to be sustained over time and growth to be balanced in a regional as well as in an industrial sense.
In seeking those broad goals, we have committed ourselves as a government to reducing the deficit in our total balance of payments. Second, we have undertaken to reduce the rate of inflation. Third, we are seeking to promote employment and viable industries and to generate more exports. Fourth, of course, we want to implement those policies in a way which benefits all regions of Canada. This evening I want to say a word about broad goals in terms of the National Energy Program announced in the budget last autumn.
We seek a reduction in the current deficit in our balance of payments by eliminating, as a major goal of that program, the need for imported oil. We are also doing so through a fundamental commitment to conservation, which has been absent in Canada in the past. We are also doing so through a commitment to substitution of more plentiful forms of fuel for scarce and expensive oil. We seek also, through incentives to the industry, to bring on-stream new supplies of domestic petroleum.
As the House knows and as most Canadians know, Canada is today more than energy self-sufficient. We are, in fact, net exporters of energy. With the National Energy Program, we have set ourselves the additional goal of becoming self-sufficient in oil by 1990. Those programs will help us to correct the deficit in our balance of payments, one of the principal goals of our current economic policy.
With regard to its effects on inflation and unemployment, we have not undertaken in the National Energy Program, a cheap oil policy. However, as the national government of our country we must manage our national economy. We must protect consumers just as we must ensure producers a fair return.
I might note in this connection that in estimating the impact of inflation resulting from higher energy prices, the Economic Council of Canada recently estimated that a one dollar increase in the price of a barrel of oil will add about .5 per cent to the consumer price index. Rather than push inflation even higher, we want Canadians to pay less than world price for their oil, leaving the difference in the pockets of people rather than in the coffers of governments.
I have referred to industrial growth, and the employment that is generated from such growth, as another principal economic policy commitment of this government.
We see the energy policy and, indeed, the energy industry as principal motors of the further growth in our economy. In that connection, we have distinctly Canadian assets. We have become a leader in the technologies associated with oil sands, enhanced oil recovery, natural uranium reactors and frontier petroleum exploration, particularly in sensitive environments.
I do not need to remind the House of the commitments made in the national energy policy to major expenditures between 1980 and 1983 which will give further incentive to growth in this most dynamic segment of our total economy. Those who have consulted the National Energy Program will recognize that almost $12 billion has been allocated to a variety of activities which will bring additional growth to our economy, but growth on a basis which will promote regional balance throughout our country. We look toward equalization, the sharing of benefits and, indeed, the sharing of the costs in developing further in that most prosperous sector in our economy. But by doing so in a way which brings advantage to all regions of Canada, we are nevertheless ensuring that the principal oil-producing province, Alberta, will receive over $100 billion in revenue from petroleum during this decade.
In the National Energy Program, Canadianization is also a major element which makes for economic growth. We want to ensure that more benefits resulting from the growth of our petroleum sector go to Canadian workers and that more of the profits remain in Canada to be reinvested in our own economy.
The means of enhancing Canadian participation in our petroleum sector involves four principal methods. First, we seek to encourage companies already active in the oil and gas industries, by grants and other incentives, to become more
February 24, 1981

Canadian in ownership and control, such as in the recent case of Dome.
Second, we are encouraging Canadian companies not now active in the petroleum sector to enter the oil and gas industry.
Third, new companies which were not in place in the past are being formed. I refer, for example, to the initiatives taken by the co-operatives in Canada to enter the petroleum industry.
Fourth, the vehicle of Petro-Canada is available to play an active role in attempting, on behalf of all Canadians, to acquire outright, foreign-controlled firms. We have recently seen the example of its acquisition of Petrofina, which ensures that a fully-integrated national oil company will be operating for the benefit of all Canadians.
In giving further substance of our National Energy Program, we have consulted the private sector in order to benefit from its suggestions about how the program might best be applied. We remain determined to achieve our goals, but we remain equally flexible with respect to the ways in which we may achieve them.
The National Energy Program is one of the most comprehensive, far-reaching economic initiatives undertaken by any government in Canada in recent decades. The very size and complexity of the challenges we have faced have made necessary detailed and continuing consultation with the petroleum industry and, indeed, all those sectors of our economy affected by the program. That need was recognized from the start. It has gone forward. Several significant adjustments have resulted from consulting with the petroleum industry in the elaboration of the National Energy Program.
I wish to take a few minutes to record for those interested some of the initiatives we have recently taken. First, the industry indicated to us that a new definition of Canadian exploration expenses proposed in the budget would have had an adverse impact on the industry's ability to finance such investments. We responded in Bill C-54. It contains amendments to ensure the immediate deduction of expenses incurred in drilling dry holes, whether for development or exploratory purposes.
Favourable tax treatment will also be continued for wells drilled in frontier areas before the commencement of production. In addition, the existing treatment of drilling costs of wells which qualify for exploration expenses was extended for a further year, to the end of 1981.
Second, the industry suggested to us that the value of the incentive payments outlined in the program could be increased if investors had access to a full tax deduction for exploration and development expenses prior to fulfilling all the requirements for a grant. The rules which we first set forth were subsequently amended to accommodate the industry's suggestions.
Third, while the payment of the generous incentive grants to eligible investors would increase their available cash for
Economic Policies
petroleum investment, an accounting problem arose in the treatment of grants in their annual operating statements. A typical Canadian company receiving petroleum incentive grants might show an encouraging rise in reinvestment capacity but at the same time a discouraging external appearance of reduced income, unless the grants could be fully reflected in income from the beginning. Accordingly, the government has been working with representatives of the petroleum industry in order to explore ways in which full and favourable impact of the incentive grants may be reflected in the financial positions of companies.
Fourth, the House may recall that in recent days new rules governing the Canadian ownership requirements were announced. They result from the response of industry to an invitation from the government some time ago to discuss tentative proposals for the measurement of beneficial Canadian ownership to determine the eligibility of individual companies for incentive grants. After consultation with more than 100 corporations, individuals and associations active in the petroleum industry, significant changes were recently incorporated in the Canadian ownership rating rules.
These include a provision to deem as 100 per cent Canadian all shareholdings of less than $50,000 and with Canadian addresses. We shall enable small companies of less than $5 million in assets or $10 million in revenue to complete a short form application for their Canadian ownership measurement. Numerous other changes designed to streamline the necessarily rigorous process of establishing true Canadian ownership and grant eligibility have been made.
Fifth, there have been intensive discussions of the petroleum incentive program with industry. Those discussions resulted in a new phased-in approach to Canadian ownership targets, including the creation of a new intermediate level of incentive grants. Under the new sliding scale of targets, companies with Canadian control and at least 65 per cent Canadian ownership in 1981 will be eligible for maximum incentive grants. The minimum requirement for these grants will rise by two percentage points annually to reach 75 per cent, the goal we originally proposed for 1981.
Sixth, a new intermediate category of incentive payments will be available to Canadian-controlled companies with at least 60 per cent Canadian ownership in 1981, rising by one percentage point annually to 65 per cent by 1986. The creation of this new category of eligible companies will enable many corporations to spend more on petroleum exploration than had been previously anticipated. This will provide an attractive intermediate target for those companies with Canadian ownership of between 50 per cent and 59 per cent in 1981.
The government regarded as reasonable and creative the view of the petroleum industry that a phased-in approach would ease the pressure on Canadian capital markets enabling greater access to new equity financing by the many companies now responding to the Canadianization proposals in the National Energy Program. At the same time, oil and gas supply for the benefit of all Canadians will be enhanced by a more vigorous pace of incentive-assisted investment.

February 24, 1981
Economic Policies
The evidence is there. We have been flexible. We shall continue to be so. Ideas for making the National Energy Program more practicable and effective have been welcomed and are clearly producing results. We look for more of the same kind of reasonable, ongoing consultation as the National Energy Program is put into full effect. Co-operation is essential, for example, for the successful implementation of our ambitious off-oil or substitution program on which the total goal of Canadian oil self-sufficiency by 1990 depends so much.
The Government of Canada has clearly assumed a strong leadership role in the national energy policy. But strength should not be mistaken for inflexibility. There are those who argue that our willingness to make adjustments in the National Energy Program is beside the point. From time to time we hear from critics that although they may profess full support for our basic goals, they hasten to reject our methods as mistaken or unworkable. I submit that any examination of the National Energy Program and the particular elaborations we have brought forward will show that not only will Canadian ownership be enhanced by the program, but Canadian supply and self-sufficiency in oil will also be strengthened.


Some hon. Members:: Hear, hear!


Mr. Chuck Cook (North Vancouver-Burnaby):: Mr. Speaker, first I should like to compliment the previous speaker; never in the history of this Parliament has the rape and pillage of private industry in this country been made to sound so dull.
I do not understand why the more important issues of this country must be discussed on opposition days. When I return to my riding in British Columbia, those people tell me that we should not be discussing the Constitution in the House of Commons, but we should be discussing the cost of living. They do not want to hear about a charter of rights; they want to hear about a reduction in interest rates. They do not want to hear about an amending formula; they want a means to lower unemployment and create jobs.
I wonder how many members on the government benches, when they wake up in the morning, instantly think of the nuances of the Constitution which is before the House.


Some hon. Members:: We do.


Charles Henry (Chuck) Cook: Perhaps two members, but 1 can tell them what happens in the rest of the country when people wake up in the morning.


Mr. Chretien:: Will the hon. member accept a question?


Mr. Deputy Speaker:: Will the hon. member for North Vancouver-Burnaby (Mr. Cook) accept a question?


Charles Henry (Chuck) Cook: Mr. Speaker, I will accept a question at the end of my remarks.


Some hon. Members:: Oh, oh!


Charles Henry (Chuck) Cook: Mr. Speaker, may we have a little order? If I am pricking them, will Your Honour ask them to please bleed quietly?


Mr. Deputy Speaker:: Order, please. The hon. member for North Vancouver-Burnaby has the floor.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Charles Henry (Chuck) Cook: We on this side of the House and a good many members on the other side can freely admit that at the moment this country has absolutely no industrial strategy. There has been a total failure. When we think of what is going on in terms of regulatory reform in the government, when we consider the many changes which have already been made to the energy policy, we realize that there is very little communication and consultation with either business or the people of this country. Otherwise, this kind of debate could be taken up for matters which are important to the people out there, not what is important to one arrogant old man trying to go down in history, with a good many people following along behind him.
What this government does is govern by fiat, not by fairness and not by interest in what the people are doing. We heard the previous speaker talk about what in my view is the deplorable oil policy. I would like to give a couple of examples of what is, taking place in the west and what this oil policy is doing to small business in the city of Vancouver. On April 1, according to the oil policy, Canadian suppliers of heavy bunker oil will be trying to sell a product for which there will be a very insignificant market.
I hope the Minister of Finance (Mr. MacEachen) will listen to me, since what we have is a fight between the Department of Transport, which understands a bit about this situation, the Department of Finance, which does not understand the situation, and the Department of Energy, Mines and Resources which wants but will not receive those tax dollars.
The current Canadian price of Bunker C is S28.20 a barrel. The proposed price with the new tax included will be $38.59. The current Puget Sound price for Bunker C is $31. That means there will be an increase of $13.45 a barrel Canadian, or a 47 per cent increase in price. For the benefit of members opposite I should explain where Puget Sound is, since one of the officials in the Department of Finance, when questioned on the matter, asked me where it was. It is immediately south of Vancouver. 1 suggest maps be provided to the various departments so that they can find out a little bit about their own country and the neighbouring shores.


Harvie Andre: Where is Vancouver?


Charles Henry (Chuck) Cook: For the benefit of the hon. member for Calgary Centre (Mr. Andre), Vancouver is 800 miles west of Calgary.
The new tax will bring marine diesel fuels up to $53.34 a barrel. This represents an increase of $18.95, or a 55 per cent increase. What will happen when these taxes come into effect on April 1? Perhaps the government will change its mind, and all service industries will be hit, along with all hotels, restaurants, ship repair establishments and longshoremen.
February 24, 1981

I would like to give a more concrete example of what is taking place. At the present time there are 40 Polish fishing vessels off the coast of Canada. They are serviced by the Kuszuby II, a factory ship. When in Vancouver for refuelling, price changes were announced, and it left immediately for Puget Sound. The loss in taxes to the federal government was $500,000. The loss to British Columbia through provincial sales taxes was $44,000.
The Poles expressed difficulty with respect to forecasting whether to ever again enter the port of Vancouver in order to refuel. Those taxes and differences in prices are destroying the marine bunkering industry. Five companies involved will now be out of business because most of the ocean-going traffic will go south. Why? Because the Department of Transport, the Department of Finance and the Department of Energy, Mines and Resources cannot sort out the situation among themselves and do not realize what they are doing to the west coast. One example of what they are doing with your energy policy-


Allan Joseph MacEachen: "Our" energy policy.


Charles Henry (Chuck) Cook: It is yours, not mine.
Another example of the kind of foul-up which is occurring, not only on the west coast but on the east coast as well, has to do with the current Canadian price for marine diesel fuel of $34.39 a barrel. The current Puget Sound price is $42.81. This government proposes to increase the price by 55 per cent. The proposed Canadian price will then be $53.34, substantially higher than the American price. The export tax will go into effect when the destination of a Canadian vessel is a foreign port, regardless of any other ports of call. We will lose 25 per cent of the jobs for seagoing and associated personnel. This does not include losses to the berthing and maintenance service industries. Smile, if you will, but bear in mind we are talking about 2,000 jobs.
Canadian vessel owners must bid for contracts in competition with U.S. companies which have access to cheaper fuel. Towing cement from Gibsons Landing, British Columbia, to Adak in the Aleutian Islands will cost a Canadian firm $58,000 more than a U.S. firm for the same contract, the same service. The reason is the government's ruddy export tax which should not be applied in this case as it is costing Canadians their jobs. It is costing the west coast a good deal and I suspect the same is true on the east coast.


Harvie Andre: They are just jobs in British Columbia.


Charles Henry (Chuck) Cook: They are jobs in British Columbia. I also suspect they are jobs in Halifax. When the government talks about its magnificent energy policy, it should get down to the nitty-gritty, talk to the people in business who are dealing in these areas, the small companies, the backbone of this country, which the government is destroying.
I ask the ministers responsible to look at what is happening. Any sensible person will realize that the oil export tax applied at the level it is on the west coast will destroy all kinds of jobs. I suppose this matters not to the government, since the govern-
Economic Policies
ment representatives from the west coast have not brought this to their attention.
I would like to talk about other insensibilities of this government. We have a government which is economically insensitive to what is taking place in this country.


An hon. Member:: It is bad all over.


Charles Henry (Chuck) Cook: It is bad all over. What causes that? A government that will not address itself to issues important to Canadians.
Let us talk about some Department of Fisheries and Oceans regulations. On the west coast there are new regulations in connection with salmon sport fishing. These will damage the B.C. tourist industry substantially. They will hamper small resorts, and marine operators who cater to U.S. sport fishermen along the coast. The ban imposed by the government includes a total four-month ban on all sport fishing in the Georgia Strait beginning next December. It includes an immediate ban on downriggers and one Chinook a day limit starting April 1. Everyone is concerned with Chinook salmon on the west coast, even the sport fisherman, but there must be a better way of imposing the regulations. There must be a way that fisheries officials could consult with sport fishermen's associations to arrive at some form of ban or reduction that makes sense.
Let me give some shocking figures with respect to something else. I do not care what regulations there are on sport fishing, until the government does something, those regulations cannot be enforced. In 1948, there were 109 fisheries inspectors on the west coast and approximately 3,000 private small boats at that time. Today, at latest count, there are 204,404 rowboats, inboards, outboards, sailboats, canoes and, for all I know, some tubs as well. How many fisheries inspectors does it take to handle some 204,000 sports fishermen?
In 1948 there were 109, and in 1981 there are 120. That shows a total neglect of enforcement in the area of sports fishing. If the government wants a proper fishery on the west coast, it should realize this cannot be achieved using the same number of inspectors as in 1948. As well, changes will have to be made in the regulations which will ensure the continued growth of the tourism industry in the province.
I had four other points to make, Mr. Speaker, but I see that I will not have time so I will go over a couple of them briefly and quickly. The first is the economic insensitivity of this government. British Columbia has a great opportunity to develop its north-eastern area through the B.C. coal agreement. The amount of money involved is staggering and the benefits to Canada could be colossal. These include a 72-mile railroad costing $350 million. Through the National Harbours Board and the CNR the line to Prince Rupert would be upgraded at a cost of $50 million and $80 million worth of new rolling stock would be purchased. A new coal loading port would cost $70 million. Over 15 years the shipment value of the coal is expected to reach $7.04 billion. Those are some of

February 24, 198!
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the benefits. I cannot agree with my friends to my left who are afraid to sell a little coal. British Columbia has thousands of years of coal stocks, mountains of it. The development of the railway would open up a new portion of the province and allow ancillary mines and industries to develop through the area. Yet there are arguments, there is nit-picking, niggardliness rather than a push to make the deal and get the job done. The taxation accruing to the federal government from this deal would more than meet any up front money the government of British Columbia is seeking.
Early this afternoon an hon. member gave some figures for research and development in this country which illustrate how backward we are in this area. Out of a population of 23 million, 21,519 people are engaged in research and development. This must make us the laughing stock of the world. It is almost criminal that a government could avoid thinking about this, could avoid changing the situation.
This government spent all its time worrying about something the country is not worried about, that the country is not even thinking about. It forces us to do the same and ignores the real problems in the country, such as creation of more jobs.
I should like to see the government produce an industrial strategy for Canada, show concern for the small independent businessman, introduce a program to increase jobs and productivity, a program to bring in lower interest rates, a program to reduce inflation. The failure of this country and this government to deal with the key issues which concern the people brings shame on all who sit on the benches opposite. Mr. Speaker, this motion should be passed.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: A point of order, Mr. Speaker. The hon. member invited me to ask a question at the end of his speech. He made a proposition, but I do not know if he was speaking on behalf of his party. We on this side of the House would be willing and eager to dispose of the Constitution tonight so that we can discuss the economy for the next two weeks.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. It being 9.45 p.m., it is my duty, pursuant to Standing Order 58(9), to interrupt the debate and put forthwith every question necessary to dispose of the proceedings now before the House.

Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.


Madam Speaker:: I declare the amendment lost.
It being 10.16 p.m., this House stands adjourned until tomorrow at 2 p.m., pursuant to the provisions of Standing Order 2(1).
At 10.16 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, February 25, 1981