1981-05-22

ROUTINE PROCEEDINGS


Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I rise on a matter of some urgency, under the provisions of Standing Order 43. Added to the growing list of horror stories being compiled in this country as our economic situation worsens daily, comes news of a possible postal strike. In light of the fact the Canadian Union of Postal Workers may be in a legal position to strike in one month, and given the fact that such a strike would result in serious consequences to the general public, and the now-struggling business community in particular, I move, seconded by the hon. member for Prince Edward-Hastings (Mr. Ellis):
That the Postmaster General recognize the extreme gravity of the situation and take every immediate and possible step to ensure that such a strike is averted.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam Speaker, I rise under the provisions of Standing Order 43. Since 1948 only four governments have had the economic policies necessary to keep the inflation rate below 2 per cent. West Germany did it in 1948; Eisenhower did it in 1953; de Gaulle did it in 1958, and the Progressive Conservative government under the Right Hon. John Diefenbaker did it between 1957 and 1963. I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That the present Liberal government launch an immediate investigation into the methods by which the Diefenbaker government was able to maintain a world
record low inflation rate of 1.2 per cent, and then go back to the drawing board with their present inflationary budget and disastrous National Energy Program.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL HYDROLOGY RESEARCH INSTITUTE
Mr. Bob Ogle (Saskatoon East):: Madam Speaker, I rise on a matter of urgent and pressing necessity to bring to the attention of the House some recent pearls of wisdom from the Minister of Industry, Trade and Commerce (Mr. Gray). According to the Canadian Press, the hon. minister told an audience of eager young Liberals in Saskatoon that the University of Saskatchewan campus there would be the most logical place for the National Hydrology Research Institute because of long-term water management problems on the prairies, to which the chief young Liberal added that money for the move could come from the Axworthy slush fund. I therefore move, seconded by the hon. member for Prince Albert (Mr. Hovdebo):
That this House call upon the cabinet to make good immediately on Liberal promises, dating back to 1976, to move the Hydrology Institute from Ottawa to Saskatoon, without, however, resorting to the typically "back-Axworthy" move of bribing western Canadians with their own money.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INTERNATIONAL MONETARY FUND
Hon. Bud Cullen (Sarnia-Lambton):: Madam Speaker, I would like to move a motion under Standing Order 43, of urgent importance.
In view of the selection by members of the International Monetary Fund, which numbers some 140 countries, of the Minister of Finance of Canada (Mr. MacEachen) as chairman

May 22, 1981
of the important interim committee of the IMF which advises all member countries on the management and adaptation of the international monetary system, and since the economic well-being of Canada will depend to a large extent on the solving of world economic problems through agencies like the IMF, I move, seconded by the hon. member for Niagara Falls (Mr. MacBain):
That this House urges the hon. member for York-Simcoe to withdraw his frivolous, foolish and insulting motion questioning the attendance of the Minister of Finance at important international gatherings such as the current IMF meeting in Gabon.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
* *
*


IMPORTATION OF MEXICAN OIL-MOTION UNDER S.O. 43
Mr. Gordon Taylor (Bow River):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Whereas the heavy sulphur content of Mexican oil is causing severe problems at our refineries, as well as increased sulphur emissions into the atmosphere and, in addition, this so-called oil is costing the people of Canada millions of dollars more than Alberta oil would cost even at 75 per cent of the Chicago price, therefore I move, seconded by the hon. member for Edmonton-Strathcona (Mr. Kilgour):
That this House deplores this waste of taxpayers' money and this shameful discrimination of this Liberal government against the province of Alberta.


Madam Speaker:: Is there unanimous consent for this motion?
That this House call upon the government to implement a program that will assist private developers to construct apartments for Canadians who are now having difficulties finding a place to live.


Madam Speaker:: Is there unanimous consent for such a motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, under the provisions of Standing Order 43 I wish to introduce the following motion. Whereas both the Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. MacEachen) have been extremely evasive and prevaricative on whether or not they plan to implement wage and price controls, or exchange controls, I move, seconded by the hon. member for Prince Edward-Hastings (Mr. Ellis):
That the Minister of Finance be immediately recalled to Canada and that he be obliged to make a clear statement, if that is at all possible for the hon. gentleman, as to whether or not the Liberal government again plans to impose wage and price controls on Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSIONS
Some hon. Members:: Agreed.


Some hon. Members:: No.


HOUSING
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. Recent CMHC figures show apartment vacancy rates down to the unacceptably low national average of 1.8 per cent, a drop of 1 per cent from one year ago. Some provincial governments, however, have moved to alleviate the problem through interest-free loans to developers. I move, seconded by the hon. member for Prince Edward-Hastings (Mr. Ellis):


Hon. Stanley Knowles (Winnipeg North Centre):: Madam Speaker, under the provisions of Standing Order 43, and seconded by the hon. member for New Westminster-Coquit-lam (Miss Jewett), I move:
That this House notes that under various government superannuation plans, if the wife dies first the surviving widower's pension is 100 per cent but that if the husband dies first the surviving widow's pension is only 50 per cent, and this House calls on the government to bring in the necessary legislation to correct this situation on an interim basis by raising the widow's pension in all such cases to 75 per cent, and to declare that the eventual goal is pension equality between men and women.
If we believe in equality, let us practise it.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



May 22, 1981


NATIONAL ENERGY PROGRAM
Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, I rise to move a motion under the provisions of Standing Order 43. Noting that since the announcement of the so-called "National" Energy Program on October 28, 114 drilling operations and 49 servicing operations have left for the United States; regretting that for each rig that leaves Canada an estimated minimum of $1 million in wages and other economic spin-offs alone is lost to our country on a yearly basis, not to mention the lost opportunities of finding domestic oil and gas with that rig; and acknowledging that the stupidity of the program is perhaps rivalled only in recent times by that of the post war Roumanian agriculture minister, whose politics it seems unnecessary to specify, who ordered approximately two million Roumanian horses killed without bothering to note that there were no tractors available to replace them, thereby causing a severe famine, I move, seconded by the hon. member for Bruce-Grey (Mr. Gurbin):
That the authors of the national energy policy, the energy minister, the finance minister, and the Prime Minister, jointly give this House a talk entitled "the power to tax is the power to destroy".


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Sinclair Stevens (York-Peel):: Madam Speaker, my question is for the Prime Minister. It arises from an exchange in this House yesterday between our two socialist leaders. Yesterday in replying to the hon. member for Oshawa concerning the possibility of somehow sheltering the mortgage interest rate impact on Canadians, the Prime Minister stated that:
-the alternative, Madam Speaker, is to go into exchange controls, and 1 have not heard even the NDP in its wildest moments advocate those.
I wish to bring to the Prime Minister's attention that there was such a wild moment on the part of the NDP. It came as a result of an answer given on May 12 by the Prime Minister to the Leader of the NDP. In an answer to a request for lower interest rates, the Prime Minister stated:
-this would mean exchange controls, and until he is prepared to advocate that I would say that we are not prepared to listen to him.
Oral Questions
On May 14 the Leader of the NDP came back and stated:
I want to say to the Minister of Finance that if there is a run on the dollar or if there is a concern about a flow of money-


Madam Speaker:: Order, please.


Sinclair McKnight Stevens: -south of the border in the short run-


Madam Speaker:: Order, please.


Sinclair McKnight Stevens: -then certain action could be taken.


Madam Speaker:: Order, please.


Sinclair McKnight Stevens: We do not withdraw from the suggestion of a form of exchange controls.


Madam Speaker:: Order, please. That is the third quotation in the course of asking a question. It is a bit much. I urge the hon. member to put his question.


Sinclair McKnight Stevens: Now that we have the scenario properly set for the Prime Minister, will he bring us up to date on what is the attitude of the government with regard to the possible reimposition of exchange controls, something we have not had since 1950?


Right Hon. P. E. Trudeau (Prime Minister):: Madam Speaker, I want to point out to the hon. member that I am not leader of a socialist party but of the Liberal party.


Some hon. Members:: Hear, hear!


Mr. Nielsen:: A rose by any other name-


Pierre Elliott Trudeau: We on this side are proud of our Liberal label, Madam Speaker. We do not try to hide it under the Conservative Progressive ticket that they use over there. If the hon. member wants any witnesses, I can call on the Leader of the New Democratic Party. Unfortunately, Madam Speaker, the questioner was so long-winded that you had to cut him off at the point where he was trying to establish what he was trying to establish. I did not hear the quotation of the Leader of the New Democratic Party. Therefore I fail to see his whole point, which was to say that the Leader of the New Democratic Party accepted exchange controls. Then you stood up, Madam Speaker, and we did not hear him any longer.


Mr. Wilson:: You heard his question.


Pierre Elliott Trudeau: Look, you silly guys-


Some hon. Members:: Oh, oh!


Madam Speaker:: Order. I think we will have to start that one over again. I do not mean that the hon. member should again cite his quotations, but that he should put a simple and brief question to whomever he wishes to direct it.


Sinclair McKnight Stevens: Madam Speaker, I am sure the Prime Minister can well understand my reference to his being a socialist

May 22, 1981
Oral Questions
leader. After all, I am judging him simply by his actions. The Leader of the New Democratic Party stated:
We do not withdraw from the suggestion of a form of exchange controls.


Madam Speaker:: Order, please. Will the hon. member simply ask his question.


Sinclair McKnight Stevens: In view of the statement made by the Leader of the New Democratic Party on May 14, will the Prime Minister now indicate to the House the curent attitude of the government with respect to exchange controls?


Pierre Elliott Trudeau: Madam Speaker, if the hon. member is asking me "In view of the statement made by the Leader of the NDP", you will have to let him read that statement or I cannot answer the question.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Madam Speaker, let me put the question in the simplest possible fashion.


Madam Speaker:: The hon. member now has to read the statement.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Madam Speaker, let me put the question in the most direct way to the Prime Minister, who is simply toying with the House.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Would the Prime Minister indicate whether there is any serious consideration being given to the reimposition of exchange controls in Canada by his colleagues or by the cabinet itself?


Pierre Elliott Trudeau: No, Ma'am.


GOVERNMENT POLICY WITH RESPECT TO PUBLIC'S DISCRETIONARY SPENDING
Hon. Ron Huntington (Capilano):: Madam Speaker, I would like to address my question to the Prime Minister, if I may.
As he knows, the average Canadian is being squeezed, and the concern in the country among average Canadians in respect of this squeeze is that it is going to get tighter, that real wages are falling behind-that is established by the statistics-and that there has been no energy tax credit and no mortgage interest deductibility to give relief. If the Minister of Finance and the Bank of Canada are correct in saying that higher interest rates can control inflation, is it correct then to conclude that government policy is to squeeze the public until there is no discretionary spending left? I am wondering whether the Prime Minister, in his wisdom, would have any advice for all those people who at this moment have no discretionary spending?


Pierre Elliott Trudeau: The answer to the question is no, Madam Speaker.


GOVERNMENT FISCAL POLICIES
Arthur Ronald Huntington: Madam Speaker, we can certainly see how serious the government is about the plight of the average person throughout this land. We are continually told that productivity is the answer to the low Canadian dollar, our high interest rates, our imbalance of trade, our continuing demand for higher wages and benefits, and that these things can only be resolved by fiscal policies which will deliver an improved Canadian productivity to our country and our economy. Both the Minister of Finance and the Prime Minister know this, as I have heard them state it so often. Will the Prime Minister advise us as to the fiscal policies the government might have in mind to deliver the incentives necessary to excite and deliver a highly productive, efficient and effective economy, which is ours by right and by heritage?


Pierre Elliott Trudeau: Those policies are contained in the budget, Madam Speaker.


PUBLIC SERVICE
Mr. Ray Skelly (Comox-Powell River):: Madam Speaker, yesterday I raised a question about the termination of the services of Monsieur Bertrand. I would like today to direct a question specifically to the Minister of Consumer and Corporate Affairs.
Stories associated with the termination of the services of Monsieur Bertrand included stories that the Department of Consumer and Corporate Affairs was being reorganized in such a way that the autonomy and powers of the director of investigation and research would be curtailed. Those stories were also accompanied by statements that there would be an appointment of a new director, probably one of the individuals appointed by Michael Pitfield. Would the Minister of Consumer and Corporate Affairs give us a description of what reorganization is going on within his department at this time?


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs and Postmaster General):: Madam Speaker, let me first of all say that all of this is part of the very regrettable, wild speculation which took place concerning Mr. Bertrand. There is no reorganization in the department and the successor to Mr. Bertrand will be appointed soon by the cabinet, and not by Mr. Pitfield. The remark the hon. member has made about apparent linkage between reorganization of the department and the responsibility of the director of combines should not be made because the new director of combines investigation will have the same authority and power Mr. Bertrand had previously.

May 22, 1981


LEGISLATIVE AMENDMENTS
Raymond John Skelly: Madam Speaker, we will wait to see the outcome with respect to this matter, but on March 5 the Minister of Consumer and Corporate Affairs suggested that he could place before the House within five weeks the new amendments to the Combines Investigation Act. The minister received from Monsieur Bertrand in his report on the petroleum industry two specific recommendations respecting amendments which should be made to that statute.
Could the minister explain why he has changed the amendments-this was announced in his speech-and changed the procedure by which the Combines Investigation Act amendments will come before this House? Why specifically do we not have that legislation now, so that people can study and comment, and so that a broad segment of Canadian society can provide input? Why has there been a change? Why have we not seen that legislation to this point?


André Ouellet: Madam Speaker, it is very clear that if hon. members were to co-operate and adopt bills much more rapidly we would very soon be in a position to consider legislation to amend the Combines Investigation Act. I sponsored in the House a few days ago a strictly non-controversial bill, the bankruptcy legislation. The opposition wasted two days debating everything under the sun except the bankruptcy measure. Once again it proves that members opposite engage in filibustering and prevent the government from dealing quickly with the bills it wants to pass.
As to the competition bill, Madam Speaker, I think it would be useful to consult the parties concerned. I sent to all the big national associations in Canada 21 questions having to do with competition. I expect an early reply from those Canadian associations so that I will then be in a position to make specific recommendations to cabinet. Finally, when the bill comes before the House I hope the hon. member and all his other colleagues in the opposition will adopt that bill very quickly.


DEPARTMENTAL STAFFING
Raymond John Skelly: From his last comments I believe the minister missed the point I was trying to make in my question, Madam Speaker.

I have one final question in this respect. Over the past few years the minister's department has been depleted in resources in terms of the person-years which have been available to that department, and in terms of adequate financing. The question of reorganization almost appears to be a question of the gutting of that department. We would have much more confi-
Oral Questions
dence in the minister if he introduced combines legislation so that we could see a strong determination in that department.
Would the minister confirm that he has in fact begun a process of gutting the department? The confidence of this House would be restored if the minister would submit strong combines legislation now.


André Ouellet: Madam Speaker, we ought to pay homage to the officials who manage that department. They worked facing restrictions in hiring staff and had to make do with a budget which was not increased other than to follow the natural upward trend in the cost of living. They continued the efficient and uninterrupted operations of the consumer department throughout the country. That is an example of sound administration which can be a source of inspiration for other departments. Too often governments are blamed for inflating budgets and hiring personnel, and we are told that we ought to clamp down a bit on government expenditures, so as an example I cite the Department of Consumer and Corporate Affairs which has been able indeed to cut its expenses and staff procurement while continuing to offer excellent services to the people.
As regards the second part of the hon. member's question, namely, when the bill will be introduced, I can assure him that we are well into the process of drafting, studying and working on bringing amendments to the competition bill. It will certainly be one of the major pieces of legislation of the next session.


CANADA DEVELOPMENT CORPORATION
Michael Holcombe Wilson: Madam Speaker, my question is for the Prime Minister. The annual general meeting of the Canada Development Corporation was held yesterday. At that meeting considerable concern was expressed by a number of small shareholders as to the degree of interference and intervention on the part of the government in the affairs of that company. So far the loss to the public shareholders of the company amounts to some $75 million to $100 million because of the decline in share values since the interference by the government began.
For many of these people, holding shares in CDC is their only investment in the future of Canada, and in order to restore the confidence of these shareholders in the future prospects of the CDC the government must make a clear and unequivocal commitment that it will not interfere in any way with the affairs of that company, specifically, that the govern-

May 22, 1981
Oral Questions
ment will confirm that CDC does not require government approval in the conduct of its affairs and that the government will not interfere with the directors in the exercise of their business judgment.
Is the Prime Minister prepared to make that specific commitment today to this House and the shareholders of the CDC?


Pierre Elliott Trudeau: Madam Speaker, if there was a paper loss in the value of the shares I think it could be directly ascribed to the opposition who have tried-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Well, hear me out. The opposition have tried to make a big fuss over the fact that the major shareholder was attempting to ensure that the chairman of the company would be a very successful businessman. Now there does not seem to be anything in that, or in Mr. Strong's career as a successful businessman, which would frighten people, so obviously if there has been a fall in the value of the shares it is because there has been the kind of agitation we have heard in the past couple of weeks from the hon. member and his party who have tried to-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: -scare people into believing that the company would do badly under Mr. Strong whereas they were doing marvellously under some other chairman whose name, I bet, is probably unknown to three quarters of the shareholders themselves.
I have said in this House that this government holds 49 per cent of the shares for the Canadian people, we have somewhere between 75 and 80 per cent of the equity of the company, I do not know of any shareholder in similar circumstances, in private or public, semi-private or semi-public affairs, who would not be interested in the designation of the chairman of that company of which he or she is a major equity holder. That is what the government has tried to ensure, and there is nothing for which we should apologize. The annual meeting was held yesterday. I understand that it was amicable and that the results are satisfactory to all people concerned. The hon. member seems to have a supplementary, and I will be happy to hear it.


NECESSITY FOR COMMITMENT
Michael Holcombe Wilson: Madam Speaker, I have to ask a supplementary because I did not get an answer to my question.
Let me make one point quite clear. The drop in the value of the shares took place before we raised the question in this House and occurred because the shareholders were aware of the interference by the Minister of Finance on behalf of the government. That is why the shares went down, and for no other reason.


Some hon. Members:: Hear, hear!


Michael Holcombe Wilson: My question to the Prime Minister is to ask why is he completely unwilling to make that specific commitment, one that was made in the offering memorandum on behalf of the government to the shareholders, which they took at face value when they made their share purchases? Why is the Prime Minister unwilling to make that commitment today because I can tell him, based on my experience in that business, if he does not make the commitment, the future expansion and financing of that company will be put into serious doubt? His alternatives are to make the commitment or buy back today the shares that were sold to the small investors of this country.


Pierre Elliott Trudeau: I am not sure what future financing plans the hon. member is referring to. If he has some information on that I would be happy to have him make it public. I do not know of such future financing plans of the CDC, but I do know that during the first ten years of its existence, a company set up by this government some ten years ago, I was informed and consulted about the appointment of its chairman. The shares, according to the hon. member, continued to increase in value.
I think it was normal when we were not informed, or when the Minister of Finance did not receive the information in time, that the government should have shown some concern. We hold, on behalf of the people of Canada, more than 75 per cent of the equity of that company, and I think it would be a mere courtesy to ensure that the major shareholder and equity holder would be informed of the choice of chairman.


NATIONAL SECURITY
Hon. Allan Lawrence (Durham-Northumberland):: Madam Speaker, you will appreciate that the retired civil servant retained by the Privy Council Office to review the transcripts and documents of the Taschereau-Kellock Royal Commission on the Gouzenko revelations was to report to the Privy Council Office by May 1, when I understand his mandate expired. I ask the President of the Privy Council if that report has been made, and if the recommendation is to permit public access to all of the papers, as it should, why are inquiries from the public still being denied?
[Translation\


Hon. Yvon Pinard (President of the Privy Council):: Madam Speaker, with regard to the question of the hon. member and the report to which he referred, I shall certainly check into the matter. I should be able to give him a more detailed answer early next week.


May 22, 1981


QUERY RESPECTING ESPIONAGE ACTIVITIES IN PUBLIC SERVICE
Allan Frederick Lawrence: Is the
President of the Privy Council indicating that he does not even know if the report has been made to him or not, or what the recommendations are, or what the situation is? In view of this almost unbelievable ignorance of something within his jurisdiction I would ask him whether he could also, while he is checking into it, check into the actual transcripts, papers and revelations of Mr. Gouzenko to ascertain whether or not it is true that a number of public civil servants were incriminated by those revelations and if, as well, there were two other spy rings indicated in this country's public service and that the government, in the intervening years, has done absolutely nothing to try to uncover those two spy rings?


Yvon Pinard: Madam Speaker, my previous answer also applies to the second question.


NORTH-SOUTH RELATIONS IMPORTANCE OF AGREEMENT ON LAW OF THE SEA
Miss Pauline Jewett (New Westminster-Coquitlam):: Madam Speaker, my question is for the Prime Minister and relates to the upcoming Ottawa Summit in July and the Law of the Sea agreement. Assuming that he recognizes and agrees that seabed resource and revenue sharing must be the cornerstone of any redistribution of the world's economic wealth and power, and that a collapse of the Law of the Sea agreement would seriously undermine hopes for a new and more just international economic order, will he not only try to convince the United States of the very great importance of signing the Law of the Sea agreement for the future of the North-South dialogue, but will he also take the initiative at the meeting to have the delegates approve this agreement at least in principle?


Pierre Elliott Trudeau: Well, I would agree with the hon. member, Madam Speaker, that for many of the Third World countries the Law of the Sea agreement and its provisions concerning the seabed are indeed central to their preoccupations.
I cannot give any guarantee to the hon. member as to the results to be obtained, but she is aware that various countries are attempting in various ways to persuade the United States to accede to the conventions of the Law of the Sea, and that we in Canada will continue to try to persuade the United States to that effect.


Pauline Jewett: I hope that the Prime Minister will take the initiative at this conference to have the delegates approve in principle the Law of the Sea agreement. Would the Prime
Oral Questions
Minister assure us that we still believe in the multilateral approach and that in fact, if the United States decided it did not want to go that way, or wanted a mini-treaty of some kind, that we would not go the route of the mini-treaty? Would he assure us that we will continue to go the multilateral route and continue to show a very intimate interrelationship between the Law of the Sea agreement and the possibility of a new international economic order?


Pierre Elliott Trudeau: Madam Speaker, I am not aware of the alternative mentioned by the hon. member of a mini-treaty, but certainly I can indicate that the Law of the Sea negotiations which have taken place thus far are the way in which we intend to see the matter continued.


CANADIAN BROADCASTING CORPORATION
Mr. Jesse P. Flis (Parkdale-High Park):: Madam Speaker, my question is directed to the Secretary of State and Minister of Communications. On last Friday, May 15, the CBC appeared before the Standing Committee on Communications and Culture, and I renewed my question about when the CBC plans to build a central production centre in Toronto. The president of the CBC agreed with me that the existing facilities are appalling, but said he does not plan to do anything until the government makes a definite commitment to the construction of a CBC production centre in Toronto. Would the minister tell the House what steps his department has taken, or plans to take, toward the construction of such a facility, and what kind of expenditures are involved?


Hon. Francis Fox (Secretary of State and Minister of Communications):: Madam Speaker, in response to the hon. member's question, the CBC has a proposal to lease additional space in the Toronto area to consolidate some of its facilities. As to a new CBC facility in Toronto, I am informed that the cost would be somewhere between $235 million and $250 million.
The CBC receives a parliamentary appropriation every year. It is now somewhere around $649 million, which is $70 million more than last year, and $150 million in commercial revenues, which gives them a total budget of close to $790 million. The CBC has a capital component in its budget of approximately $75 million a year which it spends on capital projects. This year the management of the CBC recommended to the government that consolidation take place in a number of places in the country, including Regina where some $16 million will be spent this year on new facilities. It is up to the CBC to make recommendations to cabinet. 1 understand that in the Toronto area the CBC is looking at a number of other options, including the use of land which it presently owns.

May 22, 1981
Oral Questions FINANCE


GROWTH IN MONEY SUPPLY
Mr. Bill Wright (Calgary North):: Madam Speaker, my question is directed to the Minister of State for Finance. In the mid 1970s the government informed Canadians that it would have to control the rate of growth in the money supply in order to contain inflation. The statistics of the Bank of Canada indicate that this is a complete failure. In only one year out of the last ten has inflation gone down when the money supply has gone down. Many economists in Canada are telling the government that it is impossible to contain inflation unless the government contains its own spending in addition to controlling the growth in the money supply. Is the minister prepared to admit that the control of the growth in the money supply is ineffective unless we also control government spending?


Hon. Pierre Bussieres (Minister of State (Finance)):: Madam Speaker, I am surprised that the hon. member would ask such a question. I would simply suggest to him to read once again the budget speech made last October by the Minister of Finance. He will see quite clearly that the Minister of Finance indicated not only his support for the monetary policy of the Bank of Canada, but also that, for this policy to be effective, he would undertake to reduce the deficit in an orderly manner. He gave an outline of the plan to reduce government expenditures as well as the deficit. He also indicated that the fight against inflation must involve all sectors of the economy. That is the message that the budget gave to all economic agents.


PROPOSAL TO REMOVE TAX ON EXPORTS OF NATURAL GAS
Frederick William Wright: Madam Speaker, I find the minister's answer hard to understand since government spending has risen by 16 per cent this year. A couple of weeks ago Mr. Lougheed, the Premier of Alberta, suggested that the government could have some positive effect on interest rates if it allowed more exports of natural gas, simply by taking off the 30-cent per thousand cubic feet of tax which the government imposed on natural gas going from Alberta. He suggested that if the government did this it would no longer have to track American interest rates as it is doing now. Is the minister prepared to consider such a proposal from a financial standpoint, not from the standpoint of the Department of Energy, Mines and Resources?


Pierre Bussières: Madam Speaker, the hon. member should know that the policy of this government is consistent and not compartmentalized. As a proof of this, in the last budget, in addition to the financial operation framework of the government for 1981, the Minister of Finance announced jointly with the Minister of Energy, Mines and Resources a new national energy program.
In our view, natural gas and oil are first of all resources which must serve all Canadians and every action must be taken to ensure that they continue to do so.


AIRPORTS
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, my question is directed to the Minister of Transport. It concerns the development of northeast coal in British Columbia. As he knows, one way to stimulate the economy in the short term would be to get some megaprojects under way. In connection with his responsibilities as minister, I would ask him to put some of the infrastructures in place in northeastern British Columbia to facilitate the shipment of this coal. Apart from his responsibilities in connection with the agreements that have been made with the province, there is a direct responsibility, namely, in connection with the upgrading airports and facilities for air transportation in the region.
I am particularly concerned about the hopelessly inadequate facilities at the Dawson Creek airport which was assigned a very important role as a staging area for coal development. Have the minister's officials as yet examined the role the Dawson Creek airport is to play and whether money has been set aside and planning is under way to upgrade the facility?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, indeed this area will have very substantial growth in coming years. This morning I read in the paper that a CN vice-president announced that more than $500 million would be spent on the CN line in this area. He was talking, I may say to the Prime Minister, in terms of double-tracking that part of it, Prince George to Prince Rupert, by 1995.
On the situation of the airport at Dawson Creek, I must admit I cannot memorize the budget of all airports in Canada; there are close to a thousand of them. I will report to my hon. friend as soon as I can.


Frank Oberle: Madam Speaker, the minister will discover that it was previously planned to redesignate and upgrade the airport and that with the additional load and role assigned to it by his former colleague, Mr. Basford, the situation is now extremely crucial. Could the minister report to me on whether the upgrading of the airport will be looked at as the sole responsibility of his department, or will it be tied in to the general agreement between the province and the federal government? In other words, are the province and the regional area expected to pay some of the costs of the upgrading of the airport, or will the minister assume that responsibility himself?


Jean-Luc Pepin: Madam Speaker, I cannot be very definitive on the subject. In Canada there are different classes of airports. There are airports of a more local nature where provincial
May 22, 1981

governments make contributions one way or the other as well. But I will look at it with a very open mind.


FISHERIES
Mr. Donald W. Munro (Esquimalt-Saanich):: Madam Speaker, my question is directed to the Minister of Fisheries and Oceans. Of course he will be aware that yesterday there was a blockade of the Victoria Harbour which caused certain disruptions in traffic and that the strike of the fishermen could very easily spread to other ports in the area. This demonstration of anger at the minister's restrictive practices was brought about because American fishermen, on the breakdown of the Canada-United States negotiations, are fishing in Canadian waters and taking young stock in areas where Canadian fishermen are being denied access.
Having been out there for the first-second time, really, since he reassumed office-and having seen the matter on the site, is the minister now prepared to reconsider the decision which he made about gear, about limited access and limited time? This is taking into account the preservation of the salmon stocks, which every Canadian wants to see; but still fishermen have to live. Is he prepared to reconsider the restrictions he has imposed on the fishermen in that area?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, there is a certain amount of misinformation in the hon. member's question. The fact is that we had test fishing on the Canadian part of Swiftsure Bank, and there were fewer juvenile fish than had been assumed, and we did in fact open it so the trailers could fish in that area. We tried to get agreement from the U.S. authorities to close down if there were too many immature fish. We still hope that they might do so, because we would close down if immature fish were too numerous, as any normal fish manager would do.
On the question of the demonstration, I must say that the regulations which were announced last October followed long consultation with the trailers through their representatives, three of whom sit on the ministerial advisory council set up by my predecessor. At the time it was agreed that six gurdies were a wise conservation measure. At the meeting that I had with the same advisory council last week, again the representatives of the majority of the trailers supported the conservation measures we had announced. The consultations were long and exhaustive.
I am really surprised that the hon. member is advocating a change on a measure which was taken strictly on conservation grounds and which, in fact, if we were to back down before this sort of demonstration, would make any pretence to manage the fisheries exactly that, a pretence.
Oral Questions


FINANCIAL POSITION OF FISHERMEN
Donald W. Munro: In these consultations the minister is talking about, I wonder whether he was able to take into account the financial structure of the fishermen in the area and, particularly, the high interest rates that they are now having to pay to finance their operations. While conservation is the concern of fishermen across the country, and he should certainly not be charging fishermen with failing to take that into account in their enterprise, there is still the matter of the livelihood of fishermen.
I am wondering whether the minister really did get this information about the six gurdies as opposed to the eight. In light of the current interest rates alone, the fishermen are not able to make their payments. Is he trying to drive them out of business? Is he trying to destroy the industry of the troller-men on the west coast? I rather suspect that he is, in favour of the seiners.


Roméo LeBlanc: We offered the trailers what adjustments we thought were reasonable, including the one I have just mentioned, the reopening of Swiftsure as long as there are not excessive numbers of juvenile fish caught. We offered to look at the October fishery, in light of the season, in light of the condition of the stocks, when that time comes. But surely the hon. member is not advocating that we eliminate conservation measures because the interest rate has gone up.


Donald W. Munro: Nor are fishermen.


Roméo LeBlanc: Frankly, if I had to manage a fishery on the basis of fluctuations in the interest rate, then I would really hand in my resignation.


Some hon. Members:: Hear, hear!


Erik Nielsen: Let's have it today.


LABOUR RELATIONS
Mr. Sid Parker (Kootenay East-Revelstoke):: Madam Speaker, I advised the Minister of Labour I would be asking this question this morning, and I notice that he has disappeared. I hope he is not too far away.
My question to the minister concerns the long and protracted strike that is developing at Voyageur Bus Lines. As the minister knows, a strike of a bus line is particularly damaging to middle and lower-income Canadians who cannot afford the luxury of air transportation. Also, a small number of communities have become isolated as a result of this strike. Will the minister appoint a mediator to look into this? I have been advised that the unions would like this type of service at this time.

May 22, 1981
Oral Questions


Hon. Gerald Regan (Minister of Labour):: I thank the hon. member for bringing to our attention the question of the Voyageur bus strike. This strike, which commenced on April 28, involves some 450 drivers and maintenance workers in the Ottawa and Toronto terminals. It also not only affects service within Ontario but also service to and from Ontario points and Montreal. The mediation branch of the department is available to provide mediation services. The parties are aware of that, but they have not indicated a desire to resume negotiations as yet. If either of the parties does so, then we are prepared to provide the mediation services immediately at this stage.
The hon. member will be aware of the fact that the parties went through extensive negotiations and conciliation services from the time of the expiration of the agreement last November until the strike began on April 28. Our department is immediately available to provide mediation services at the request of the parties.


NEED FOR PROMPT ACTION
Sidney James Parker: Madam Speaker, the minister must be aware that this company has a monopoly on the services in the western portion of Quebec and Ontario. How long must these people wait to have some kind of gathering brought together? Will the minister immediately try to get the two sides together, to try to resolve this situation so that these people can continue to get the service they expect?


Gerald Augustine Regan: Madam Speaker, if the information that the hon. member provides to the House is accurate, that the parties now want mediation services and are prepared to sit down again, then I will certainly respond by providing that service immediately. Of course the hon. member, who is quite knowledgeable in these matters, is aware of the fact that in all of these disputes there must be the willingness of the parties to sit down. They must come to that stage, and if they are at that stage, then we are most anxious to provide the assistance.


FITNESS AND AMATEUR SPORT
Mr. Maurice Harquail (Restigouche):: Madam Speaker, my question is for the minister responsible for fitness and amateur sport. In view of the discussion which has been going on with respect to Arthritis Month in Canada, I have had letters and inquiries from the Arthritic Association of New Brunswick. I wonder if the minister could clarify this alleged misunderstanding between that organization, and the date set for the Terry Fox fund raising run.


Erik Nielsen: Why did you say no yesterday?


Gerald Augustine Regan: Madam Speaker, the arthritic association has traditionally held its fund raising drive in this country in the month of September, whereas the cancer organization has primarily dealt with its in the month of April. For a variety of reasons, those organizations responsible for establishing the Terry Fox Day, the Cancer Society, the Canadian Track and Field Association, and the Four Seasons Hotels, in consultation with the Fox family, chose the date of September 13 for the Terry Fox Day and the Terry Fox run, in which I hope some two million Canadians will participate.
Of course in the past there have been many instances of the overlapping of various charitable fund raisings. Indeed, during Terry Fox's own run across Canada it was found that, even though it concentrated on the cancer cause, other charities received more than they traditionally did in those time periods.


Some hon. Members:: Hear, hear!


Gerald Augustine Regan: I am hopeful that the people who have traditionally supported the arthritic cause will do so, at least to the same degree, and perhaps to a greater degree, in the month of September. However, I can assure the hon. member that following the announcement and the choice of that date by those organizations, officials of the arthritic association and the cancer society met together in consultation and have agreed that they should proceed with the September 13 date for this year and then assess the situation after September's experience.


AIR SAFETY
Mr. J. R. Ellis (Prince Edward-Hastings):: Madam Speaker, my question is for the Minister of Transport. On January 23 of this year I asked the minister some general questions regarding the Joint Enroute Terminal System. It is now crystal clear that JETS, as specified by the Department of Transport, and delivered, fails to comply with the air traffic control operation requirements. I want to ask the minister if he will put a halt to further installation on JETS until a study can be undertaken to determine the safety of the system.


Jean-Luc Pepin: Madam Speaker, this is a big question. I recognize that there is a debate now on the adequacy of the JETS, the Joint Enroute Terminal System. On one side you have my hon. friend, whose opinion as a pilot I obviously treasure, and you also have CATCA, the controllers, saying that the system is inadequate; on the other side you have pretty impressive expertise also. You have CALPA, the pilots' union, who were before the committee on transportation the other day saying that Canadian safety standards at airports were far superior to anything in the world.
May 22, 1981

You also have the opinion of the experts in Transport Canada, which is not unsubstantial, both at the headquarters and the regional levels. They say that indeed there are problems but they are being resolved, that precautionary measures are being taken and remedial measures are being taken, and so on.
In the coming days we will have a report from Mr. Justice Dubin on the subject. He has looked at it extensively. He has heard extensive commentary on it so I think we should await his contribution as an important one in the debate, which is one among very respectable experts.


REQUEST FOR CHANGES IN SYSTEM
John Raymond Ellis: Madam Speaker, I am very tempted to phrase my supplementary along the lines of asking when we will hear from Mr. Justice Dubin in this House. Because the other problem is so serious, I want to deal strictly with it. I was before the committee when CALPA was there and I heard their statement. I suggest to the minister that pretence that this system is adequate should be abandoned; that the system be rethought; requirements restated, and changes made at once. Does the minister accept the statement of some of his staff who suggest that they keep their heads down and hope for the best?


Jean-Luc Pepin: I agree that I am no great expert on matters of electronics. But then every author makes the case that the minister should not be, so I am par for the course. But I am told by experts that no system can ever be developed without trial and error, without the experimental aspect to it.
On the subject of the Dubin report, I am pleased to say that 1 will be tabling the first part of it some time next week. I swear to God that I have not seen it, but I understand that the judge will give a general view on safety matters in Canadian aviation and address them in a succession of reports on specific items, such as this one, most probably.


FISHERIES
Mr. Lloyd R. Crouse (South Shore):: Madam Speaker, I wish to direct my question to the Minister of Fisheries and Oceans. There were five major elements to the Canada-United States East Coast Fisheries Agreement, namely, the management regime, the share of stocks and access for both countries, the fisheries commission, the dispute settlement procedure, and the review procedure.
I wish to ask the minister what linkage there is between the fisheries treaty and the boundary agreement. Now that the United States has unilaterally terminated the treaty, what is the status of the boundary agreement? Are we going to arbitration, or has this agreement also collapsed?
Point of Order


Hon. Romeo LeBIanc (Minister of Fisheries and Oceans):: Madam Speaker, I understand that this matter is under the responsibility of my colleague, the Secretary of State for External Affairs. The United States Senate has ratified that part of the treaty. I have been away travelling on the west coast so I have no knowledge if Canada has dealt with the Canadian response on the boundaries issue. I have been given a head signal that we have not taken a position yet as a cabinet.


COMPOSITION OF INTERNATIONAL COURT
Lloyd Roseville Crouse: Madam Speaker, 1 thank the minister for that response. I presumed, since he and the Secretary of State for External Affairs shared joint responsibility for this matter, that he would be knowledgeable of it.
I should like to address a brief supplementary question to the minister. Will there be a Canadian judge on the panel of judges when the Canada-United States fisheries and boundary agreements come before the International Court? If not, could he tell the House from what countries the judges will be selected, and by whom?


Derek Vincent Lee: Madam Speaker, I do not think the hon. member is fair when he equates the fact that one does not know the detail of what happened within the last week with a lack of knowledge. On the question of the selection of judges, that would be very much a part of cabinet discussion on whether we are going to approve of going this route. I know that there are views on both sides of the issue of whether there should or should not be national judges. I understand that issue has not been settled yet.


POINT OF ORDER
Mr. Chuck Cook (North Vancouver-Burnaby):: Madam Speaker, I am indignant and take umbrage at the remark of the Prime Minister (Mr. Trudeau). In one of his long answers today, in reply to a question from the hon. member for York-Peel (Mr. Stevens), he stated, looking clearly at the opposition benches, "You silly guys".


Francis Fox: Oh, you recognized yourself!


Charles Henry (Chuck) Cook: Madam Speaker, the word "guys" is demeaning, and I might say is out of date slang. The word "silly"-


Mr. Gray:: -is relevant.


Pierre Elliott Trudeau: Don't be such a silly guy.


Madam Speaker:: I am sorry, that is not a point of order. The hon. member did notice that at the time these words were said no one objected to them and neither did I. They are not

May 22, 1981
Order Paper Questions
unparliamentary. They were not directed to one person in particular. I am afraid that point of order cannot be taken.


Charles Henry (Chuck) Cook: Madam Speaker, if I may refer you, the word "silly" was declared unparliamentary on January 26, 1961. If he is using it for "idiot", are you suggesting, Madam Speaker, that you cannot defame the whole opposition by an expression?


Madam Speaker:: I am just checking that. One point is quite clear; that word was not addressed to one person in particular.


Pierre Elliott Trudeau: I really meant goofy.


Madam Speaker:: What was declared unparliamentary was
"silly reason", not "silly".



ROUTINE PROCEEDINGS


[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. 35, 672, 673, 674, 675, 678, 1,271, 1,272, 1,586, 1,684, 1,685, 1,882, 2,248, 2,287, 2,307, and 2,362.


Mr. Cossitt: 1.	Did the RCMP investigate an alleged fraudulent or fake issue of the Polish ethnic newspaper known as CZAS in Winnipeg, Manitoba, issued in August, 1978, and, if so (a) what were the results of the investigation (b) were any charges laid officially or are any charges pending in regard to fraud, etc.?
2.	Did the RCMP receive complaints from the editor of CZAS, Mr. Jorzy Mroczkowski and, if so, what action was taken?


Hon. Bob Kaplan (Solicitor General):: 1.	Yes.
(a)	insufficient evidence to lay charges;
(b)	see reply to 1(a).
2.	Yes. Action was taken in the form of the investigation referred to in part 1 above.


Mr. Cossitt: Did Mr. Michael Pitfield, secretary to the cabinet and Clerk of the Privy Council state that he had returned $10,000 to the Public Treasury calculated on the basis of the time remaining of a 58-week period for which he was being compensated and that this represented "after tax money" and, if so, did the Prime Minister instruct him to commit himself to return the full amount due,
including pre-tax money after applying and receiving from the Department of National Revenue a tax rebate in the current tax year and. if not (a) for what reason (b) will the Prime Minister do so?


Pierre Elliott Trudeau: I am advised that Mr. Michael Pitfield, Clerk of the Privy Council and secretary to the cabinet, on April 22, 1980, released the following statement to the Parliamentary Press Gallery: "Mr. Cossitt's motion in Parliament today was not based on fact. I am grateful to members of the Press Gallery who delayed filing their stories in order to give me a chance to correct these inaccuracies. As is well known it is very difficult to get the record straight after allegations of this kind have been disseminated across the country. When, after over 20 years in the public service, my employment was suddenly terminated on June 4, 1979, the previous government agreed that I should receive fifty-eight weeks' salary as damages, in addition to the usual termination payment of one week's salary for every year of service which is provided under Treasury Board regulations for any permanent employee departing the public service. The total amount was about $107,800, not $150,000, and this amount was fully taxable at the highest rate unless transferred to a fund for my retirement twenty to twenty-five years from now. When I rejoined the public service on March 11, 1980,1 offered, and the Prime Minister agreed, that I would give back a part of this amount to the Receiver General on a purely voluntary basis. This is an unusual thing to do and I was not under any legal requirement to do so. The amount-approximately $10,000-was calculated on the basis of the time remaining of fifty-eight weeks for which I had been compensated, taking account of the fact that whereas what I received was pre-tax, what I was giving back was after tax. Concerning the holding company in which I have an interest only as a preferred shareholder, all details were disclosed, in accordance with the conflict of interest guidelines, when I was last employed by the government, and they will be reported again in the near future when the rearrangement of my affairs in accordance with the existing conflict of interest guidelines is completed. While one would not normally publicize one's personal affairs of this kind, I trust the foregoing will prevent the doubts that Mr. Cossitt's motion has sown from taking root."


Mr. Cossitt: 1.	Did Mr. Michael Pitfield, secretary to the cabinet and Clerk of the Privy Council report under the present government disclosure guidelines, the existence of a holding company which he either controlled or in which he had an interest and, if so, on what date?
2.	Is the company still in effect and, if so, what is its full name?
3.	Did the company do any business with the government and, if so, what are all the details?


Pierre Elliott Trudeau: 1,	2 and 3: See reply to question 672 answered today. In accordance with the Government of Canada's guidelines on conflict of interest, Mr. Pitfield fully declared his interests to the Assistant Deputy Registrar General from the time the guidelines came in force until he left the public service in 1979, and again in 1980 when he was
May 22, 1981

reappointed as Clerk of the Privy Council and secretary to the cabinet. Conflict of interest statements were deposited in the Conflict of Interest Public Registry with regard to both periods of time. Details of information reported to the Assistant Deputy Registrar General by any person subject to the government's guidelines on conflict of interest are personal and confidential. No private company in which Mr. Pitfield has an interest has ever done business with the federal government while he was a member of the public service.


Mr. Cossitt: Did Mr. Michael Pitfield state that the payment he received after leaving his position as secretary to the cabinet and Clerk of the Privy Council following the May 22, 1979, general election was allegedly to cover in part damages and, if so, what are all the reasons justifying any claim that he was damaged and what damages did he suffer?


Pierre Elliott Trudeau: See reply to question 672 answered today. The government of the day authorized payment of separation pay to Mr. Pitfield in line with standing government policy established by P.C. 19773325, November 24, 1977, which reads as follows: "His Excellency the Governor General in Council, on the recommendation of the Treasury Board, is pleased hereby to approve payment of separation pay, as follows, to -persons appointed by the Public Service Commission to the senior executive group of the executive category; and -Deputy Ministers and other persons appointed by the Governor in Council
-whose positions are slotted into the DM/SX structure and whose salaries are fixed or approved by the Governor in Council at rates within the DM/SX salary ranges on the basis of an annual performance review and following consideration by the special Cabinet Committee on the Public Service and the Cabinet; and -whose non-salary compensation, other than superannuation, is not prescribed by statute or by regulation made pursuant to the statute or by bylaw of the agency in which they are employed,
(a)	with the approval of the Treasury Board, in an amount which, together with any severance pay to which he is entitled, does not exceed 104 weeks' pay, when his employment is terminated at the initiative of the Government; and
(b)	notwithstanding the provisions of (a) above, and with the approval of the Treasury Board, notice of termination of employment may be given in lieu of, or in combination with, separation pay but such notice, or combination of notice and separation pay, shall not exceed 104 weeks." Mr. Pitfield received separation pay significantly below the maximum amount which would have been permissible under P.C. 1977-3325.
Order Paper Questions


Mr. Cossitt: 1.	Did Mr. Michael Pitfield pay back to the Receiver General of Canada any portion of the moneys paid to him at the time he ceased to be secretary to the cabinet and Clerk of the Privy Council following the general election of May 22, 1979, and, if so (a) on what date (b) what was the amount returned and how was it arrived at?
2.	What were the amounts and dates of any cheques received by the Receiver General?
3.	Did Mr. Pitfield return all the money he received for what he has referred to as "severance", other than the salary he would have received during the nine month period of time before he returned to the same position and, if not, for what reason?


Pierre Elliott Trudeau: 1,	2 and 3: See answer to question 672 answered today.


Mr. Cossitt: With reference to Mr. Michael Pitfield's absence of nine months from the position of secretary to the cabinet and Clerk of the Privy Council raised in the House of Commons on Tuesday, April 22, 1980, by the hon. member for Leeds-Grenville, did Mr. Pitfield state publicly in reference to the hon. member's remarks "it's goddamn unfair... it's just not true" and, if so (a) was he stating government policy (b) was he instructed by the government to change his remarks in a written statement made later on the same day indicating the opposite with certain clarifications?


Pierre Elliott Trudeau: I am informed as follows: Yes.
(a)	No.
(b)	No.


Mr. Cossitt: 1.	Did the office of Mr. Michael Pitfield, Clerk of the Privy Council and secretary to the cabinet, receive numerous telephone calls from Mr. Ben Tierney of Southam News, requesting to speak to Mr. Pitfield between April 28 and May 1, 1980, as well as a number of other calls and, if so (a) did Mr. Pitfield return the calls and, if not (i) for what reason (ii) is it government policy that the senior public servant does not have to return telephone calls received (b) what was the total number of telephone calls from Mr. Tierney?
2.	Was the Prime Minister's press office contacted requesting assistance in making contact with Mr. Pitfield?
3.	Did Mr. Pitfield receive a hand delivered letter containing a list of questions from Mr. Tierney concerning the $107,800 he received when he left his position in June, 1979?


Pierre Elliott Trudeau: 1.	Mr. Pitfield spoke to Mr. Tierney on two occasions in April, 1980, concerning Mr. Pitfield's statement to the press gallery of April 22, 1980. Mr. Tierney's questions on these occasions were of a persistently personal nature. It is not incumbent on a public servant or anyone else to answer a journalist in these circumstances, nor can the degree of a public servant's obligation, willingness and ability to assist journalists be measured by the frequency of one journalist's telephone calls.
2.	Yes.
3.	Yes. The questions were again characterized by their personal nature.

May 22, 1981
Order Paper Questions


Mr. Cossitt: Did Mr. Michael Pitfield, Clerk of the Privy Council and secretary to the cabinet, state in April, 1980, that he received $107,800 when he left his positon following the May 22, 1979, election and, if so, to the knowledge of the government was any of this placed in a government retirement fund and, if so (a) what was the amount (b) will this be withdrawn and returned to the Receiver General to compensate the taxpayer for the fact that he was only absent from the job for eight months?


Pierre Elliott Trudeau: See reply to question 672 answered today. The specifics requested in (a) and (b) are of a personal nature.


Mr. Howie: 1.	Was it necessary for guards to fire a shot to break up a demonstration at Dorchester Penitentiary, New Brunswick, in the month of June 1980, because the demonstration began to shape up as an escape attempt?
2.	In the same month, was there a hostage taking incident at the penitentiary?
3.	What was the reason for the demonstration and the hostage taking?


Robert Phillip Kaplan: 1.	At 20.00 hours on June 27, 1980, approximately 105 inmates were in the gymnasium at Dorchester penitentiary, and refused to return to their cells when ordered to do so. During the disturbance the inmates began destroying property and furniture, as well as throwing dangerous objects at the correctional officers. The correctional officers believed that the inmates were going to attempt to break out of the gymnasium and either smash the institution or attempt a mass escape. Subsequently, numerous warning shots were fired from shotguns to keep inmates away from the barriers through which they might escape, and to keep the inmates from throwing dangerous objects at the correctional officers. Officers were told to aim high and most of the shots struck the side of the building at about the roof-line. A few shots penetrated through the upper parts of windows and hit fluorescent fixtures which had already been smashed by the inmates. It was learned that one staff member fired three shots from a rifle through one of the windows. He was disciplined for this act. An inquiry by the Inspector General of the Correctional Service of Canada into this incident concluded that it had not been necessary to fire so many warning shots. In retrospect, it was found that the disturbance was not a planned attempt to escape.
2.	Yes, on May 31, 1980, two inmates took one correctional officer hostage. This hostage incident ended June 1, 1980.
3.	Disturbance June 27, 1980:
The incident was sparked when a small group of inmates under the influence of "homemade brew" made their way to the gymnasium and began to destroy property and incite other inmates to participate in the disturbance.
Hostage-taking may 31, 1980-June 1, 1980:
The hostage-taking incident was attributed to two factors: (i) the restriction of the recreational privileges at the institution, and (ii) the closure of the coffee shop in the gymnasium.
The recreational privileges had been restricted as a consequence of difficulties experienced at the institution at the time. The coffee shop could not be made available to the inmates because the gymnasium was undergoing renovations.
The demands of the hostage-takers were: (a) that the coffee shop in the gymnasium be reopened, (b) the return of full recreational privileges, (c) an institutional two-way radio.
The demands were not met as the normal policy and practice of the Correctional Service of Canada is that no agreement which represents an ultimate benefit to the hostage-taker or takers be permitted in hostage negotiations.


Mr. Cossitt: Did the Prime Minister and Mr. Michael Pitfield visit Bonn, Germany and other countries during the summer of 1978 and, if so, on what dates and for what purpose, in each case?


Pierre Elliott Trudeau: Yes. The dates and purpose of official visit were: July 14-July 21-Germany, Bonn Economic Summit and official visit to the Federal Republic of Germany.


Mr. Cossitt: 1.	Did Mr. Michael Pitfield, Clerk of the Privy Council and secretary to the cabinet, attend the Commonwealth Conference of Cabinet Secretaries in Cyprus during 1980 and, if so, on what date was it decided that he would attend and on what date did he accept the invitation?
2.	Did the Prime Minister agree to appear before the Standing Committee on Miscellaneous Estimates and, if so (a) on what date (b) did the Prime Minister agree after Mr. Pitfield had made arrangements to go to Cyprus and, if so, for what reason was the Prime Minister's appearance not delayed until Mr. Pitfield could join him?
3.	What are all the details of all the work done by Mr. Pitfield while in Cyprus and what was the advantage of his trip to the people of Canada?


Pierre Elliott Trudeau: 1.	Yes. Mr. Pitfield's attendance was decided when he was appointed by the governor in council on March 11, 1980, to be Clerk of the Privy Council and Secretary to the Cabinet. His attendance was confirmed in discussions with the Commonwealth Secretariat in London on June 27, 1980.
2.	The clerk of the Standing Committee on Miscellaneous Estimates was tentatively informed approximately two weeks before the Prime Minister's appearance on November 4, 1980, that the Prime Minister would appear. The date of his appearance could not be confirmed until October 31. The appearance could not be delayed because under House order the committee was obligated to make its report on the Main Estimates to the House of Commons by November 10, 1980, and Mr. Pitfield could not return to Ottawa before November 11 at the earliest.
3.	Mr. Pitfield was head of the Canadian delegation. The Commonwealth is an important element of Canadian foreign policy and the senior officials meeting is the principal venue
May 22, 1981


Mrs. Ursula Appolloni (Parliamentary Secretary to Minister of National Defence):: Defence Services Program Annual Increase in Real Terms Including Statutory Costs 1970-71 to 1979-80
Previous Year Expenditures	+	Inflation1970-71	($ millions) 1,789.5	($ millions) 97.11971-72	1,817.9	109.21972-73	1.895.2	134.31973-74	1,981.6	174.31974-75	2,232.0	303.21975-76	2,507.2	301.21976-77	2,973.7	304.21977-78	3,364.9	293.61978-79	3,771.0	320.81979-80	4,108.0	327.8


Mr. Blackburn: 1.	During World War II, were United States military personnel present in Sault Ste. Marie, Ontario, and, if so (a) for what reasons (b) which regiments and units (c) what was the maximum strength (d) on what date did the first personnel arrive and on what date did the last personnel depart (e) how many were killed or wounded?
2.	Were U.S. civilian personnel attached to this military unit and, if so, what were their names?
3.	Were Canadian military personnel stationed in Sault Ste. Marie and, if so (a) how many (b) how many were wounded or killed?
4.	(a) Was enemy espionage activity suspected in Sault Ste. Marie and, if so, in what form (b) were there arrests and, if so, how many (c) were charges laid and, if so, what were they?


John Leslie Evans: I am informed by the Departments of National Defence and the Solicitor General as follows: 1. Yes.
(a)	U.S. authorities were concerned about disruption to the war effort which could result from damage to the canals due to sabotage and air attacks from enemy vessels which might penetrate Hudson Bay. Although the Canadian Chiefs of Staff considered the risk only a slight one, Canadian authorities acceded to the U.S. request to station U.S. troops on Canadian soil.
(b)	Initially, elements of the 100th U.S. Coastal Artillery Anti-Aircraft Regiment. Subsequently, the 110th Coastal Artillery Group.
(c)	666 as at early May, 1943.
(d)	First arrival-early April, 1942 Last Departure-mid-February, 1944
		Real		
Statutory	Increase	ActualChange	+	(Decrease)	=	Expenditure($ millions)	($ millions)	($ millions)51.4	(120.1)	1,817.919.4	( 51.3)	1,895.254.1	(102.0)	1,981.6(6.2)	82.3	2,232.067.3	(95.3)	2,507.264.0	101.3	2,973.713.3	73.7	3,364.912.6	99.9	3,771.0(76.5)	92.7	4,108.0(37.9)	(8.6)	4,389.3(e)	None.2.	There is no record of U.S. civilian personnel attached to these forces.3.	Yes.(a)	163.(b)	None.4.	(a) The RCMP have no information concerning possible enemy espionage activity in Sault Ste. Marie during World War II.
(b and c) See reply to part (a).


Mr. Corbett: 1.	What is the number of non-service personnel employed at CFB Gagetown and how many are retired service personnel?
2.	How many non-service positions were filled in the past five years and what is the breakdown between ex-service personnel and others who were hired in each year?


Ursula Appolloni: 1 and 2. The number of civilian permanent personnel and temporary personnel as at April 1, 1981, was:
Civilian permanent personnel	652
Civilian temporary personnel	184
Total	836
The number of civilian personnel both permanent and temporary filled in the past five years is as follows:

May 22, 1981
Order Paper Questions
1976/77	440
1977/78	327
1978/79	289
1979/80	346
1980/81	455
	1,857
The above figures include some 200-300 term employees hired to cater to peak requirement during summer concentration. In regard to the questions concerning retired and ex-service personnel this information is not readily available and would entail manually checking several thousand personnel files for which the department does not have the necessary resources. Furthermore the data if found would be unreliable since only those people requiring a security clearance fill out a personal history form detailing all previous employment, whereas other personnel hired may or may not volunteer information of previous military service.


Mr. Patterson: Were grants for medical research made to universities by the government during the past ten years and, if so, in what amount?


Mr. Doug Frith (Parliamentary Secretary to Minister of National Health and Welfare):: In so far as the Department of National Health and Welfare is concerned: no.
In so far as the Medical Research Council is concerned: yes, financial support for medical research in Canadian universities during the last ten years was provided as follows:
Years	Amount
1971-72	$ 33,584,858
1972-73	35,215,781
1973-74	38,101,202
1974-75	40,342,745
1975-76	44,860,031
1976-77	48,482,608
1977-78	54,472,035
1978-79	60,799,489
1979-80	65,927,773
1980-81	77,435,182


Mr. Robinson (Burnaby): What number of penitentiary inmates as of June 25, 1980, had experienced one or more revocations of parole and at least one revocation of mandatory supervision?


Robert Phillip Kaplan: In so far as the Correctional Service of Canada is concerned: 1,138 inmates.
[ Translation]


John Leslie Evans: Madam Speaker, if question No. 1,020 could be made an order for return, such 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. 1,020 be deemed to have been made an order for return?


Some hon. Members:: Agreed.


Mr. Neil: 1.	For each fiscal year 1975 to 1979, how many surveys were carried out by Statistics Canada which required personal contact by an employee with an individual or a householder and, in each case, what was its (a) nature (b) purpose?
2.	For the same years, how many (a) full-time (b) part-time employees were on the payroll in each province?
Return tabled.
[ Translation]


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


Madam Speaker:: Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Sinclair McKnight Stevens: That this House condemns the government's barren economic policies, which are destroying the stability, productivity and competitiveness of the Canadian economy; reminds the honourable member for Cape Breton Highlands-Canso that he is now Minister of Finance and not Secretary of State for External Affairs; asks the minister to see at First hand the misery caused by his abdication of economic leadership by travelling around Canada instead of around the world; and, urges him to then introduce a budget with corrective measures before July 1, 1981, or resign.
He said: Madam Speaker, in speaking on my motion I feel that perhaps it is getting more and more urgent that we in this House start accepting some of the true facts and realities that
May 22, 1981

we are now living with in Canada concerning our economy. I say that because I find it almost unbelievable that we have a government, judging from its answers to questions today and earlier in the week, that is virtually indifferent to the plight of the average Canadian who has to live with an interest rate structure of over 20 per cent as far as most borrowing activities are concerned.
We have dwelt on this and we know that when the present members of the cabinet were in opposition they deplored the then existing interest rate structure in the country. One member in particular, the Minister of Industry, Trade and Commerce (Mr. Gray), even stated, when interviewed in his home town, that if he were a member of a government that had such a high interest rate structure, he would resign from that government.


Some hon. Members:: Resign.


Mr. Kempling:: Why did you chicken out, Herb?


Sinclair McKnight Stevens: The interest rate structure which the minister then referred to was about 14 per cent. Now it is over 19 per cent, 20 per cent as far as most borrowing activity is concerned, and we see the Minister of Industry, Trade and Commerce not resigning from that government but somehow or other compromising his views and clinging to the office which he has apparently grown to love so much.
I mention this because I feel we are in a situation where our whole way of life, our type of society, that of the free enterprise system, is not going to survive if the present tendencies of more and more government intervention, more and more government spending resulting in deficits, is allowed to continue in this country to the detriment of all Canadians.
Not only do we have the evidence of an indifferent government, but we have a Minister of Finance (Mr. MacEachen), the person one would normally expect to be grappling with the problems that I am going to refer to, gadding about the world. He is one of the few ministers of finance from leading industrial countries to attend the meeting in Gabon. As we all know from this morning's news, we have a Minister of Finance who has been selected by certain members of the International Monetary Fund to be chairman of the main policy-making body of the IMF itself.


Erik Nielsen: God help them!


Dave Nickerson: God help the world!


Sinclair McKnight Stevens: There was clearly, because there is nothing else to read into it, some type of a gross misrepresentation made at that conference that attending members would even think of our Minister of Finance chairing any responsible committee of the International Monetary Fund.


An hon. Member:: Maybe he will stay away.


Sinclair McKnight Stevens: Oddly enough, when we read the Reuters story we find that our Minister of Finance was chosen to take that office for all the wrong reasons. They chose him because he
Canadian Economy
was the big spender. The Minister of Finance was, first of all, in attendance; most of the other major industrial nations ministers of finance were not there. Second, they like his spending habits, they like his big deficits and they like the fact that he has allowed his fiscal policy to rage on virtually unabated, something which is certainly aided and abetted by the socialists to our left.


Arthur Ronald Huntington: They have high interest in him.


Sinclair McKnight Stevens: We have a government today that on a national accounts basis is spending in the current fiscal year, 1981 to 1982, $7.5 billion more than was anticipated under the Crosbie budget which, of course, caused the defeat of the Clark government.


Mr. Peterson:: What about the $3 billion in extra expenditures that you voted for yesterday?


William James Kempling: Tell us about PetroCan.


An hon. Member:: Tell us about Petrofina.


Mr. Deputy Speaker:: Order, please. The hon. member for York-Peel (Mr. Stevens) has the floor.


Mr. Waddell:: So Toronto has a member in the House.


William James Kempling: How many gas stations do you own?


Sinclair McKnight Stevens: If I could relate that $7.5 billion of extra spending, which the government has put in place and presumably will see spent this year over and above what we anticipated would be spent, we are talking about $200 per average Canadian family. That is the spending level we have reached as far as this government is concerned. It is over and above what we anticipated fiscal 1982 would require had we continued in power.
I know that the hon. member for Willowdale (Mr. Peterson) gets exercised every so often. Already he has been speaking from his seat during my speech, but perhaps he will pay heed to his own Minister of Finance's Economic Review which spells out, I suggest, certain of the arguments that I would like to make in support of my motion today. This Economic Review, incidentally, was tabled a few days ago while the Minister of Finance is on one of his world jaunts. In it, on page 3-it is disclosed that in 1980 we tied for the worst unemployment rate among the seven major countries in the world. From page 3 of the Minister of Finance's own Economic Review we can see that our unemployment level averaged 7.5 per cent, tied with Italy, the worst unemployment record of the seven major countries in the world. Compare that to Japan's unemployment level which is shown as 2 per cent. That is the first negative which should require the government to ask the Minister of Finance, as we are suggesting, to get back into this country. If the Minister of Finance wants to travel, let him travel around Canada and see what impact his policies have on Canadians. If he does not want to bring in a budget correcting some of these problems before July 1, then he should resign.


James Scott (Jim) Peterson: He also created more jobs.

May 22, 1981
Canadian Economy


Sinclair McKnight Stevens: That is the thrust of our motion. Again, if the hon. member for Willowdale would stop talking but read this Economic Review-


Erik Nielsen: He is shooting from the lip.


Sinclair McKnight Stevens: -he would find on page 8 the interest rate structure is given for the large OECD countries. Large, means the seven largest countries in the OECD. On page 8 we find, not as the government has been representing, that it is simply playing catch-up as far as interest rates are concerned, but that we are at the top of the list with the highest interest rates in the world. That review indicates that in December the central bank discount rate in Canada was 17.26 per cent. The next highest was Italy's central bank discount rate at 16.5 per cent. The lowest central bank discount rate, of course, was that of Japan at 7.25 per cent.


James Scott (Jim) Peterson: If you read those figures, you will also find that we were one of the countries that increased employment last year.


Sinclair McKnight Stevens: When the baboons are being affected you can always tell because the clamour gets louder and louder.


Arthur Ronald Huntington: You are getting to them.


Sinclair McKnight Stevens: The hon. member from Willowdale asks about the amount of employment that was created last year. What he is not telling us is where that employment was created. Those jobs were created in the public service and related services.


Arthur Ronald Huntington: Not one of those jobs was productive.


Mr. Jarvis:: Ask Herb Gray about Windsor. How many jobs were created in Windsor last year?


Sinclair McKnight Stevens: Let me tell the hon. member for Willowdale that there is one job the government created for him of which he should be proud, and that is that he has a job as a member of this House. He would never get such a good job in any other place if he returned to the private sector.


Herbert Eser (Herb) Gray: Tell us about your job with the Bank of Western Canada.


Mr. Smith:: Tell us about the bank rate.


Sinclair McKnight Stevens: One of the backbenchers says "Tell us about the bank rate". That is what I am talking about. The fact is we were a world leader until the new socialist leader of France raised the French discount rate this morning to 22 per cent. Here we have the vice-president of "Socialist International" in this country, the leader of the New Democratic Party, egging the government on to more and more spending. Until this morning we have had the highest interest rates as a result of that spending, which creates inflation. We may well have an increasing interest rate structure in Canada that will return us
to the number one or worst spot if the socialistic and spending tendencies of the present government are maintained.


William Herbert Jarvis: Now they are number two they will try to go higher.


Sinclair McKnight Stevens: I am not quoting our figures or figures from PC research; I am quoting the government's own statistics. That is what they find so embarrassing.
Let us turn to real growth. On page 1 of his Economic Review, the Minister of Finance reveals, stands naked if you like, for all those who wish to read it, that our real growth in 1980 was 0.1 per cent, just marginal. If you relate that to workers, you find that the average worker in this country had a decline in real growth last year, in fact for the last four years. Under this government, every worker has had steadily declining real growth in wages.


James Scott (Jim) Peterson: Tell us what happened in the seven major OECD countries.


Sinclair McKnight Stevens: The hon. member is making it for me here. We should keep this up, Willowdale and York-Peel. He asks about the seven major OECD countries.


James Scott (Jim) Peterson: Canada's decline in growth was less than any of the other OECD countries.


Sinclair McKnight Stevens: If the hon. member will look at page 1, he will see that the minister has averaged it out for him. The average for the major OECD countries was 1.3 per cent real growth compared to our 0.1 per cent.


James Scott (Jim) Peterson: The average over the last two years has been better than any of the other OECD countries.


Mr. Deputy Speaker:: Order, please. I am sure the hon. member for Willowdale will have an opportunity to speak later today. The hon. member for York-Peel has the floor.


Sinclair McKnight Stevens: At the risk of having the hon. member for Willowdale completely succumb to the statistics, let met refer him to page 6 of his minister's Economic Review. This is where we find the shattering effect of our discounted dollar. There it is revealed that the real effective exchange rate in Canada is now the lowest of all the countries listed on page 6. Our real exchange rate in an effective sense is now below 90, 89.8, compared to other countries such as Norway, Denmark, Austria, Switzerland, Belgium, Sweden, Australia, The Netherlands, Spain, Italy, the United Kingdom, France, Germany, Japan and the United States, which have all done better.


William Herbert Jarvis: Is Gabon in there?


Sinclair McKnight Stevens: If the Minister of Finance stays there too long, they will be running hard to overtake us as far as their Gabonese currency is concerned. Canada's economic decline over the past decade is reflected not only in the statistics I referred to, but in many other ways.

May 22, 1981

Over the past five years, our dollar has traded at an average price below that of any other year in our history, even going back before confederation. The 16 per cent discount to the United States dollar is again an historic first. You go back to the 1850s before you find such a period in our history where we have had consistently for such a prolonged period of time such a low dollar in relation to the American dollar.


Erik Nielsen: We ought to make the Guinness Book of Records.


Sinclair McKnight Stevens: That's right. Perhaps some government apologist, maybe the hon. member for Willowdale, will make this type of apology later and say that you have to let the system work. Yesterday the emperor, the Prime Minister (Mr. Trudeau), said he believed in gradualism. He felt that if he could somehow edge up interest rates, this would eventually reduce inflation. We in the official opposition are asking when this magic turn around will occur.


Jean-Luc Pepin: Soon.


Sinclair McKnight Stevens: The Minister of Transport says soon.


David P. Smith: Have faith.


Sinclair McKnight Stevens: Another government member says have faith. It will take a lot of faith. Since this government has taken power, interest rates have gone up roughly 4 per cent. Oddly enough, the inflation level has gone up roughly 4 per cent. It appears that rather than high interest rates stifling or dampening inflation, they are fuelling inflation.
Most economists are now coming to the realization that what this government has given to the nation is very expensive money, but not really tight money. The net result is that there is more and more money to borrow at higher and higher interest rates. This creates the scenario you need, not for lowering consumer prices but increasing them on many of our products.
Let me touch on productivity. As we know, the record in Canada with respect to productivity has been dismal. Per worker output declined about 3.5 per cent after 1980 after a 1.2 per cent drop in real terms in 1979. We had virtually no economic growth last year. That was confirmed in the Economic Review I read from earlier. The prospect for 1981 is again for virtually no growth. In terms of the average worker, real earnings have declined over the last three years by almost 5 per cent.
These statistics alone should indicate that urgent corrective measures are needed for the economy. I hope the Prime Minister will at least spend the money on a phone call to Gabon to tell the Minister of Finance that instead of being the world gadabout, he should get back here and start solving some of the problems I am referring to.


Jean-Luc Pepin: Come on, he hardly ever travels.


Sinclair McKnight Stevens: The only significant action that we have seen from this government on the economic front over the past
Canadian Economy
several years has been a policy of encouraging high interest rates, ostensibly to curb inflation, yet there is no indication that they are performing that duty.
Let me touch on trade. The Minister of Industry, Trade and Commerce, who is in the chamber, probably knows that world trading activity grew by a record 20 per cent during the 1970s, but unfortunately Canada did not keep pace. Canada had an annual average growth rate in the 1969-79 period of 15.1 per cent, with the result that our share of world trade decreased by over 30 per cent. This has represented an opportunity loss for Canadian exports of $20 billion per year.
One of the weakest performers in terms of exports has been our secondary manufacturing sector. From 1970 to 1975 Canada's share of world trade in manufacturing goods has dropped from 5.6 per cent to 3.8 per cent, at a time when Japan's share increased from 10.4 per cent to 12.1 per cent, when France's share increased from 7.7 per cent to 9 per cent, Germany's share from 17.6 per cent to 18.1 per cent, and Sweden's share from 3 per cent to 3.1 per cent. These statistics are not ours; they come from the Science Council of Canada which has outlined a technological policy for Canada. In 1980 we experienced an amazing $17.8 billion trade deficit in end products alone, six times higher than in the early 1970s.
Notwithstanding that background, we find that the Minister of Industry, Trade and Commerce, at a time when the Americans were having active discussions with the Japanese in the hope there would be some type of restraint on the exportation of Japanese cars to the United States-and they succeeded in getting such restraint agreed to by the Japanese-said and did nothing to protect Canadians from the eventual outcome of having an export quota placed by the Japanese on exports to the United States market with no similar arrangement for the Canadian market. This may mean that 20,000, 30,000, perhaps even 35,000 extra cars will pour into the Canadian market as a result of the inactivity of the Minister of Industry, Trade and Commerce in this field alone.
Despite brave election promises to reduce inflation and unemployment and to provide Canadians with an industrial strategy, this government has continued rather in bankrupting the nation. There has been no effort to get to the root causes of economic decline. In fact, we find that rather than having an industrial strategy put before this House, some suggested way out of these dilemmas I am referring to, the Minister of Industry, Trade and Commerce has apparently been shunted aside from his own cabinet responsibilities and has had to admit to the public that any question of an industrial strategy must take second place to the constitutional debate and the energy policy program we have lived with in the House for so many months.
What I have been referring to is the Canadian scene. What a contrast we have now between Canada and the United States of America. In the United States it has been recognized that government itself represents the major problem to that nation in restoring itself to its old prosperity. The Reagan administra-

May 22, 1981
Canadian Economy
tion has a fourfold strategy for achieving economic recovery, based on the recognition that runaway government has been a major problem. That administration plans to concentrate, first of all, on spending cuts, then tax cuts, regulatory relief and monetary restraint. It is important to note that it is a fourfold thrust they are embarking upon in the United States. It is true that monetary restraint is the fourth thrust, but that administration would be the first to tell you that without proper fiscal restraint, with resulting tax savings and, above all, regulatory relief, the entire program will not achieve the success hoped for. In short, it is a co-ordinated, concentrated attack on inflation and the lack of productivity in that country, something we do not have in this country.
The administration in the United States plans to cut spending growth by two thirds. That will be a savings in the United States of $55.9 billion by 1982. Imagine the contrast. There you have a nation that intends to cut back its growth by two thirds and save something like $55 billion in spending, yet this government has in place $7.5 billion on a national accounts basis of extra spending over what we projected in the Clark budget on which we were defeated.
President Reagan wants to eliminate his government's deficit, which he forecasts next year to be 3.7 per cent of total spending. That 3.7 per cent is in contrast to the 20 per cent of total federal spending this government contends is prudent.
Can you imagine our shock this morning to learn that our Minister of Finance, if you like the mother of the deficit I have referred to, being 20 per cent of our total spending, has now been chosen to chair an important committee of the International Monetary Fund and may have some influence on the entire world's financial system, as opposed to being restricted in the harm he can do to Canada alone? The Minister of Finance is recognized around the world as being the last of the big time spenders. As I indicated, it was stated in today's story that he in fact had been acclaimed or chosen as "Mr. Big Spender" of the seven major industrialized nations. What a sad reflection on Canada itself. I can assure the House and I think most of the members of this House feel the same way, that if those who have compassion for the comparatively poor of this nation, the small businessman, the farmer, the fisherman, those who somehow believe in the free enterprise system, believe that people in those categories should be given a reasonable opportunity to improve their lot and their real wages, they have to support the thrust of our motion today and bring the strongest possible sanctions against the government, urging it to correct its ways. If the Minister of Finance is the problem and is unwilling to correct his ways through a new budget, we should ask him to resign.
Canada can be such a great nation. Rowland Frazee, the president of perhaps the fourth largest bank in the world and our largest bank, the Royal Bank of Canada, has said that if-over the next few years we could capture the productivity we have lost, it would mean $4,000 in added income in real terms per worker compared to a projected $200. This is the sad aspect of this matter. Those who represent that they have the common man's interest at heart are the very people who are
hurting that common man so badly in this country. They are denying him the break I would suggest the Canadian worker is entitled to and would have with proper leadership here in Ottawa.
We are talking in very, very large terms. I do not think we in Canada have to accept being number 13 as far as real incomes in the world are concerned, but that is our current position. We used to be number two, running hard at being number one. I suggest that with a properly co-ordinated fiscal, monetary and industrial approach in this country we could not only be number two again, we could be number one among the nations of the world. That is what we in the official opposition believe and that is why we want our minister, if you like our Pimpernel, to take action. They seek him here, they seek him there, they seek him everywhere, this Minister of Finance, but nowhere can they find him doing an effective job.


Pierre Bussières: Mr. Speaker, before getting on with the substance of my remarks, I should like to comment very briefly on the intervention of the hon. member for York-Peel (Mr. Stevens) who has just presented his motion. First I must tell him that I am surprised he should be making unfounded accusations against all those who selected Canada's Minister of Finance to chair the interim committee of the International Monetary Fund. In my opinion, the hon. member for York-Peel is insulting the ministers and the international finance experts who chose the Canadian Minister of Finance to preside over that important meeting.
I was also struck by the frenzied rhetoric he resorts to when he talks about budgetary deficits and government expenditures. I am astounded by the fact that in the House last night the hon. member for York-Peel supported the motion of the hon. member for Calgary Centre (Mr. Andre) who was urging the government to boost its expenditures by $3.5 billion. I fail to see where the logic is. On one hand, they say to the government: Cut down your spending; on the other, they rise to support their colleague from Calgary Centre who says to the government: No, do not cut down your spending but rather increase it to the tune of $3.5 billion. So much for the logic of the hon. member, as evidenced as well in his speech.
The hon. member quoted selected excerpts from the economic review I tabled in the House earlier this week. Common sense being the one thing in the world which everybody has, I would suggest that the great majority of people look askance at figures taken haphazardly out of a 200 or 300-page document. I do not want to comment on those figures because I know that my colleague, the hon. member for La Prairie (Mr. Deniger), will set them in their proper context when he takes the floor later on this afternoon.
Mr. Speaker, the hon. member for York-Peel has just given us a very pessimistic outlook on the current economic situation
May 22, 1981

in Canada. The hon. member has twisted reality. He has given us a distorted picture of the day to day life of Canadians, and above all a contorted representation of the strategy conceived by the Minister of Finance in his budget of October last. In that budget the Minister of Finance wanted to combine the necessary restrictions with measures which were essential to shore up the then prevailing economic situation in Canada. By making the energy self-sufficiency of Canadians the basis of that strategy, the Minister of Finance is ensuring the upswing of our economic activities, guaranteeing as well improved conditions to pave the way for increased productivity and, finally, securing our competitive position on international markets.
Yesterday, during the debate on interest rates, 1 had the opportunity to tell this House how surprisingly strong the upswing of the Canadian economy had been during the last quarter of 1980. In fact, the economic activity increased at an annual rate of over 8 per cent during that quarter. The first quarter of 1981 also showed an amazing vigour. Why does the hon. member for York-Peel ignore these figures? He does so because they clearly fly in the face of the allegations contained in his motion. Mr. Speaker, the hon. member ignores these figures because they confirm unequivocally that the policies put forward by the Minister of Finance (Mr. MacEachen) are effective and meet the needs of the economic situation in Canada.
What about employment? In 1980, 286,000 new jobs have been created, or 2.8 per cent more than in the previous year. As a result of these hundreds of thousands of jobs being created, a record high of 59.2 per cent of the population was employed by the end of 1980. The first quarter of 1981 augurs well with regard to job creation for the present year. Indeed, in April, unemployment dropped to 7 per cent, a level that had not been reached in Canada since June 1976. The downward trend of the unemployment rate in the last few months is further evidence of an economic recovery in Canada. What is interesting, Mr. Speaker, is that the percentage of workers aged 15 or more reached a record high of 60.1 per cent in April and broke the 1980 record. Mr. Speaker, how can the hon. member for York-Peel ignore these figures? How can he deny that such buoyancy in job creation is an obvious indication that the economic policies of the Minister of Finance are adequate and that they meet the present economic conditions in Canada?
In his motion, the hon. member for York-Peel refers to economic stability. The hon. member did not make a major discovery and did not teach anyone anything new by saying that the Canadian economy was going through a difficult period. This is clearly indicated in the diagnosis made by the Minister of Finance in his budget speech. This instability is caused by various shocks, some of them external and others domestic. The drastic increases in oil prices decreed by OPEC countries have had obvious destabilizing effects on our economy. The impact of oil prices has been reflected by strong
Canadian Economy
inflationary pressures throughout the world, and these pressures have also been at work within Canada. Such destabilizing factors required appropriate action. Our monetary policy, a gradual reduction of the deficit and the determination of the Minister of Finance and the government to control inflation are the key elements of a policy which will restore stability to the Canadian economy. However, the effects of such measures can obviously not be felt in the short term. The search for economic stability was a clearly stated objective of the budget and the Minister of Finance has taken the means necessary to achieve that objective in the longer term.
Mr. Speaker, this new decade offers Canada and Canadians fantastic economic opportunities, but we must first learn to control inflation, promote stability and attract investments. That was the challenge contained in the October budget, and the figures that I quoted yesterday and that I briefly referred to a moment ago show that Canadians have responded to the Minister of Finance's challenge and are willing to take it up.
In his motion, the hon. member for York-Peel also talks of the competitiveness of our business sector. Increases in prices and costs as well as fluctuations in the rate of exchange have played a major role since 1979 with regard to the competitiveness of Canadian corporations in the international as well as the domestic markets. The decrease in salary costs has had a significant effect on our improved competitiveness. In 1980, exports of manufactured goods helped improve our trade balance by over $8 billion. For the first quarter of 1981, the trade surplus was close to $2 billion. That, Mr. Speaker, also serves to prove the competitiveness of Canadian business and it also shows the effectiveness of the measures contained in the Minister of Finance's budget aimed at achieving economic recovery.
1 believe that to ensure Canada's long-term growth in an increasingly competitive world, there must be massive corporate investments, especially in four areas. First, in the development of our huge energy and other natural resources. Second, in plants and new equipment that will be required to modernize and adapt Canadian industry. Third, in research, development and innovation so that Canada can be ensured of state-of-the-art technology and can become a leader as manufacturer of those products which will be required in the future. Fourth, we must invest in human resources to meet future technological requirements and to produce the new consumer goods that will be needed in the world of tomorrow. That is why the general objective of last October's budget was to create a favourable climate for increased medium-term investments. The figures that I referred to a moment ago show that economic recovery has already begun.
In his motion, the hon. member for York-Peel criticizes the Minister of Finance for attending this week an important international meeting.
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May 22, 1981
Canadian Economy
I indicated early in my remarks that to me that was a mean comment. What kind of a meeting is the Minister of Finance attending? It is a meeting of the interim committee of the International Monetary Fund. As citizens, we are entitled to ask what matters are being discussed at that meeting. I should say first the world economic situation which also is unsettled, for the Canadian economy is not the only one going through difficult times, and then the problems of inflation, the various ways and means of solving the problems of inflation, monetary theory, and interest rates. All those matters were discussed by honourable members in this House for two days last week, as well as yesterday and today. Clearly it is important that our Minister of Finance be at the heart of the discussion when people representing every country in the world are discussing how they are to straighten out these situations. In view of the interconnections between world economies, there is no doubt that Canada must attend these meetings. Canada has an open economy, a small population, and a tremendous productive capacity.
The impact of strategies implemented by our trading partners is therefore of primary importance to us Canadians for the well-being of our economy. By attending such meetings, our Minister of Finance will not only profit from the experience of other nations, but also learn how these nations intend to act to wrestle down economic instability and inflation. The importance for Canada's attendance at such meetings can be readily understood, for it is a matter of common sense, and I am stunned that despite his vast knowledge the hon. member for York-Peel should lack that little common sense needed to recognize the need for it.
This morning, for instance, Mr. Speaker, the press generally reported the appointment of Canada's Minister of Finance as chairman of the IMF interim committee. This appointment confirms that state representatives at the highest international level recognize the competence of Canada's Minister of Finance and have selected him to chair that important IMF committee.
I entirely reject the biased statement made by the member for York-Peel against those delegates who have expressed their high regard for the Minister of Finance of Canada. I am convinced, Mr. Speaker, that those hundreds of persons representing many countries in the world know as much about economic problems in the world and in their own country as the member for York-Peel knows about economic problems in Canada, and from his actions and the behaviour of the Canadian economy they were able to infer that the Minister of Finance of Canada deserves their confidence as chairman of that very important political committee. Eight hundred experts and ministers of finance of 141 states will be taking part in the Gabon meeting. Canadians should be proud of the appointment of their minister to such an important and prestigious post. With characteristic pettiness and partisanship the
member for York-Peel in his motion blamed the member for Cape Breton Highlands-Canso and Minister of Finance not only for bringing honour to Canada at the International Monetary Fund conference but also for looking into strategies which will be adopted in other countries in an attempt to solve the problems experienced by the main western economies.


Mr. Deputy Speaker:: It being one o'clock, I do now leave the chair until two o'clock this afternoon.
At one o'clock the House took recess.
[ Translation]


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Pierre Bussières: Mr. Speaker, I should like to return briefly to what I was saying when the bell rang at one o'clock. The House will recall that the motion moved by the hon. member for York-Peel blames the Minister of Finance for taking part in an important international conference in Gabon, thereby demonstrating the hon. member's dishonesty or ignorance. As I was saying, the more than 800 ministers and officials from every corner of the world who are taking part in this conference have indicated that they fully recognize the competence of our Minister of Finance by appointing him Chairman of the International Monetary Fund interim committee. I suggested also that Canada being a country with an open economy and the economies of the world being so closely interconnected, it is of paramount importance to be present when the members of the international community are dealing with inflation, economic stability, and development strategy. We are present and very competently and prestigiously represented by our Minister of Finance, who has been appointed to chair the International Monetary Fund interim committee.
Finally, Mr. Speaker, the hon. members urges the Minister of Finance to introduce a new budget before July 1. There seems to be a sort of pattern with Progressive Conservative Party policies: after they have made critical remarks for a number of weeks, they end up repeating endlessly "a new budget"... "a new budget" ... "a new budget", like the needle of a record player which gets stuck in the same groove of a warped record. Then, when they realize that the scheme is not working any more, one of them, generally their leader, starts gesticulating and complaining again about housing, interest rates, and so on and so forth. And again, after a few weeks, whoops! "a new budget" ... "a new budget" ... "a new budget." Mr. Speaker, Canadians are well aware of this pattern of the Progressive Conservative Party policy, having been exposed and subjected to it for a few months.
The Minister of Finance has already announced in the House that he intends to introduce a new budget in the fall,
May 22, 1981

presumably in October. I can understand the hon. member remembers that his party when they were in power, used to change its mind and policy every minute. His leader, who had made a name for himself as a man who follows the prevailing wind, was showing the way. With this government, it is a different story. This government has policies which it reviews from time to time and as the need arises. Just now, the Minister of Finance is involved in all sorts of studies and analyses, to prepare for the new budget which he should introduce around October to meet the needs of the economy.
In closing, Mr. Speaker, let me point out that after two days of debate on economic matters last week, after yesterday's debate on interest rates and inflation, and after the first interventions in today's debate the opposition has only managed to prove its lack of imagination and show in front of all Canadians that, in economic matters as in many other areas, its great tenors are just as boring as the bore of a gun. Canadians were not long seeing through the inanity of the Progressive Conservative government. Its members were simply thrown out. The people expressed their confidence in us, as they also did in the Minister of Finance of this country, and they will go on doing so because even now there are signs of an economic recovery and these will continue to grow in the forthcoming years.


Ian Gardiner Waddell: Mr. Speaker, I am happy to take part in this debate today because it is the second anniversary of my election to the House of Commons. I am of the class of 1979. Indeed, I was elected to this House on May 22nd, like so many others such as the parliamentary secretary to the Minister of Finance (Mr. Evans); so, this is indeed a very special day.

I am very happy to speak on the second anniversary of my election to Parliament in 1979 and that of many members of the House.


An hon. Member:: It was also the defeat of a few.


Ian Gardiner Waddell: Having listened to the speech of the hon. member for York-Peel (Mr. Stevens) who introduced-


Mr. Deputy Speaker:: Order, please. There is a question of privilege by the hon. member for Esquimalt-Saanich (Mr. Munro).


PRIVILEGE
Donald W. Munro: Mr. Speaker, I apologize to the hon. member for interrupting his speech, but
Canadian Economy
a question of privilege is normally raised at the first possible opportunity. The opportunity has just arisen.
I have just been driven over from the Confederation Building to this building, and the bus was stopped just because the Prime Minister (Mr. Trudeau) was approaching the doors. If it were raining, we would presumably have had to walk from the bus to the door. T^e bus is put there for our convenience, and I expect that like any other member of Parliament I have the right to be driven to the door. I asked the Prime Minister if, by any chance, he had issued orders to do this; he said "No", and I suppose I have to take his word for it. It do not know where the orders came from.
I believe Madam Speaker is looking into this matter, but the interruptions and the interferences with members of Parliament are continuing. I do hope that the three instances which have now been brought to her attention will enable her to make a ruling.
When I asked the Prime Minister if he had issued orders, he said "No" I then said, "Well, then, who did?" He said, "Well, if you want to ask me whether I made orders, I will call you a liar". When I asked him if he would come inside the Flouse and say that, he said he would do it right out there.
I therefore feel that this question of privilege is timely because it has just happened, and I wish to have that recorded firmly on the record.


Mr. Deputy Speaker:: The hon. member's question of privilege has been raised. I hope the hon. member carefully chose his words in describing the privilege. The hon. member for V ancouver-Kingsway.
667;-1


BUSINESS OF SUPPLY
[Stage Direction]
The House resumed consideration of the motion of Mr. Stevens:
That this House condemns the government's barren economic policies, which are destroying the stability, productivity and competitiveness of the Canadian economy; reminds the hon. member for Cape Breton Highlands-Canso (Mr. MacEachen) that he is now Minister of Finance and not Secretary of State for External Affairs; asks the minister to see at first hand the misery caused by his abdication of economic leadership by travelling around Canada instead of around the world; and, urges him to then introduce a budget with corrective measures before July 1, 1981, or resign.
Ian Gardiner Waddell: Mr. Speaker, before I go back to my speech, I would like to say, speaking for myself, that I do not personally object if there must be some special security measures around the Prime Minister of Canada at this time, and that we become inconvenienced a little bit because of our buses. This is a very dangerous day and age. This period is a very dangerous one. As there will be a major summit meeting of world leaders in Canada, if we have to suffer a little tougher security, well, that is a problem

May 22, 1981
Canadian Economy
of the times. So speaking as one member, a backbencher, without the same amount of experience in the House as the hon. member, I personally do not object if it is on security reasons that we MPs have to walk a few extra feet, so long as there are legitimate reasons, and I am sure Your Honour will find that out in your investigation.
Let me go back to the subject of economics. I started to say that I was disappointed in the speech, frankly, and in the motion. I think it is a rather frivolous motion for a very serious subject.


Some hon. Members:: Hear, hear!


Ian Gardiner Waddell: The hon. members from the Liberal party need not say "hear, hear!" I will get to them in a moment.
The reason I think it is frivolous is in the mention of the finance minister being in Gabon. Since he is in Africa, I might use the analogy of a big game hunter going to shoot an elephant and aiming for the elephant's toenail. There is so much for this government to aim at on its economic record that it seems to me to be-


Some hon. Members:: Hear, hear!


Ian Gardiner Waddell: I note the Liberal members are also saying, "hear, hear!" There is so much to aim at in the economic record of this government, with just about the highest interest rates there have ever been, with an inflation rate which is topping 12 per cent, with people who are unemployed, with a housing market of crisis proportions in Vancouver, where I live, with a rudderless ship and no economic policy. So why pick on the finance minister's going to Gabon? As a matter of fact, I understand there may perhaps be a split in the Conser-tative party. 1 understand that one half of the party wants the finance minister to return from Gabon and the other half would like him to stay in Gabon! We have the same problem.


An hon. Member:: Same difference!


Stanley Howard Knowles: Where is the hon. member for York-Peel (Mr. Stevens)?


Ian Gardiner Waddell: I tried to listen to what the hon. member for York-Peel was saying. He said that the government was indifferent to the average Canadian, and I agree with that. I wonder, though, whether he was any more different when he was in power, or whether he would have done anything more. It seems to me that, if anything, he might have been even a little cooler in slashing social spending. That is why they call him "the slasher", I suppose; but I want to deal not with name-calling but with particular economic positions which were put forward, for a change, in this House.
It seemed to me that the position the hon. member for York-Peel put forward was that the government is a big spender and that is what causes inflation. That seemed to be what he was saying. Other than asking for a budget, that was the whole basis of his speech. It seems to me that that is too simple a position; it depends on what the government spending is for. If the government just gives away money, simply allows
write-offs and tax loopholes and gives subsidies to companies which perhaps do not need them, as in northern oil and gas exploration, for example, I think that kind of giving away of money is wrong. There is perhaps too much fat and idleness in our tax system in our country in some of those giveaways.
However, when the government is spending money for investment purposes, I think that is very important. I am sure, as the hon. member for Winnipeg North Centre (Mr. Knowles) has pointed out in this House, if we did not have those welfare programs, those spending programs for what are generally called social welfare matters, at these difficult economic times with these high interest rates, we would have some real social problems in this country. So I do not regret that that money is being spent.
I understand other countries have big deficits, such as Japan. I do not see the hon. member for York-Peel running around saying they do not follow the proper economic policies.
Second, there is a certain myth here which the hon. member for York-Peel puts forward. It is a kind of contemporary American myth. I will send him over an article by Joseph Kraft which appeared recently in the Washington Post. He was writing about the American space success of the shuttle. He writes:
Americans hunger for public achievement, but also seek to reduce the power of government.
Later in the article he writes:
-the anti-government approach seems highly unlikely to yield the advertised results. Some of the most prized objectives simply lie beyond the reach of private effort.
He refers to space exploration. It is inconsistent in many ways for the hon. member for York-Peel to take the American position, to cut back on government, because there are certain things that even some of the American people, who want government cut back, still want to have.
Mr. Kraft, who is hardly a socialist journalist, goes on to say:
The free enterprise system excludes other goals. Does anybody believe the mining and chemical companies are going to keep the water and air clean without a shove from government? Who can imagine that reducing funds to the cities will improve police work, or transit services, or local education?
You cannot have it both ways, Mr. Speaker, and that is where the hon. member is inconsistent. I thought this government was cutting back federal spending. What is the federal-provincial fiscal arrangements task force doing? It is there to cut back on public spending. The Minister of Finance (Mr. MacEachen) wants to cut back funds to the provinces for education and health. This government is cutting back, Mr. Speaker. As a matter of fact, the big struggle in Canada in the next few years will be in this third theatre of war, the first theatre being the Constitution and the provinces and the second being energy and the provinces. The third one will be the government's attempt to cut back on money given to the provinces for education and health.
May 22, 1981

Since I am from the west and therefore a reasonable guy, Mr. Speaker, I did agree with the hon. member for York-Peel when he said that the wealth of the average worker in Canada is steadily declining. That is true. For the past few years the average worker has been falling behind the rate of inflation. I can tell that from speaking with my constituents who are ordinary working people. They are starting to suffer, Mr. Speaker.
What does the Minister of Finance do about this? Recently he said that the problem is with the ordinary worker demanding higher wages. Last week the Financial Post published the salaries of the top 30 executives in this country. This information is not available in Canada so they got it from the U.S. Securities and Exchange Commission. It showed the following: Mr. Gallagher of Dome Petroleum Ltd., $682,800; Mr. Bronfman of Seagram Co., $659,149; Mr. MacNaughton, vicechairman of Genstar Ltd., $611,517; Mr. Richards of Dome Petroleum Ltd., $602,000; Mr. Sinclair of Canadian Pacific Ltd. only made $568,701; Mr. Knudsen, who is from my neck of the woods and is chairman of MacMillan Bloedel, only makes $419,000. And so it goes down the list. These are exorbitant salaries with exorbitant increases. Yet who does the Minister of Finance blame? He does not quote these salaries but says that it is the average worker in Canada who is seeking additional wages.
The hon. member for York-Peel may have mentioned housing in passing but the minister, who spoke next, did not mention it. Last week we were told by the minister and officials of CMHC at a special meeting that the average price of a house in Vancouver is $160,000 and that it takes a family income of $70,000 to qualify for a mortgage. How many people have an average income of $70,000? They told us that only 2 per cent or 3 per cent of the population have. That means that 97 per cent of the people in the lower mainland of Vancouver cannot afford to buy a house if those figures are used. This seems to me to be an example of a system that is not working.
As was demonstrated last week, there are a number of rip-offs about which the government does nothing but which are affecting inflation. I wish the hon. member for York-Peel and the minister had talked about that. 1 tried to raise in the House the question of the continuing oil rip-off and the recent six cents per gallon increase in the price of gasoline that has not been explained. The minister will not do anything about it. I suggested that he did not have enough backbone to do anything, but he could show that he has by standing up in this House instead of shifting laterally.
In British Columbia we called the promotion of Mr. Bertrand a lateral arabesque. He was moved to the Anti-dumping Tribunal, at a better salary and with deputy minister status, from the highly visible, effective job he was doing on competition policy. The only man who was prepared to tackle oil price rip-offs, which are causing inflation, was moved.
I have already said that the Conservative motion offered today is rather silly-if that is not unparliamentary language. It is a motion which lacks depth. I should like to compare it
Canadian Economy
with the motion put forward by the hon. member for Oshawa (Mr. Broadbent) yesterday. His motion read as follows:
That this House condemns the government for following a made-in-Washing-ton interest rate policy and for breaking its promise to the Canadian people in the Speech from the Throne that "it recognizes the need to protect those Canadians most affected by unacceptably high interest rates".
There is the key, Mr. Speaker. I wish the hon. member for York-Peel had said that. He referred to Washington as doing the right thing with its monetarist economic policy which Margaret Thatcher and the British government have shown does not work. We seem to be following it, however. It seems to me to have been discredited, yet Washington still wants to follow it.
When the hon. member for York-Peel dealt with Washington, why did he not refer to the real nub of the problem, which is that we have a "made-in-Washington" finance policy? One of the frustrating things about being a member of this House is that the Government of Canada and the Parliament of Canada do not appear to have any room to manoeuvre, if one accepts what the Liberal party puts forward.
The Governor of the Bank of Canada says that we have to accept American interest rates and American policies. If we are an independent country, what is the point of accepting that? We might as well pack up and run for Congress. Indeed, about 10 per cent of the people in my part of the country want us to do that.
There is an alternative, however, Mr. Speaker, and that is to simply run a different policy. I did not hear the hon. member for York-Peel say what the Conservatives would do about the situation. We all know what the Liberals are doing-basically nothing but following a made-in-Washington policy.
The policy of the New Democratic Party is simply to follow a different Canadian interest rate policy. That means that we have to start setting our own interest rates and focus on certain things. We must give lower interest rates to the family that is going to start a home so that the situation that exists now in Vancouver will not be continued. We have to give a lower interest rate to small businessmen who need capital and who are suffering all over the country. We have to give better interest rates to farmers and fishermen who need reasonable credit. We have to stop these usurious interest rates and get back to real interest rates.


John Leslie Evans: Who's left?


Ian Gardiner Waddell: The people who are left are those the Liberal government is helping, namely, the chartered banks, the speculators and those people who are generally well off.
I am not unmindful of the fact that there would be a certain fallout as the result of my suggestion. I expect hon. members will heckle me on this point, asking what will happen to the dollar and what will happen to capital; will it all run out of Canada? The answer to that is to do what President Kennedy and what President Nixon did when faced with that problem in the United States. They applied special taxes to stop capital leaving the country. We would have to do that.

May 22, 1981
Canadian Economy
What we are saying from this side of the House is that we could have an independent Canadian policy. It has nothing to do with government spending. It has to do with following American high interest rates and encouraging high interest rates, as this government is doing. High interest rates there lead to high interest rates here and to inflation. Can the government not see that? It seems obvious to us. I think we have to do something else.
I see the Minister of Industry, Trade and Commerce (Mr. Gray) is in the House. I would encourage him to follow an industrial strategy which vwould give Canadians more control of the country through a mixture of tax changes, planning agreements with major companies, selective state intervention-and that is what I meant by proper government spending-and an enlarged role for Petro-Canada in oil development. That is the next step after constitutional reform. Constitutional reform is the first step in bringing the Constitution home. We will patriate our Constitution to Canada. Then we have to patriate our economy. That is the challenge of the 1980s. I think the minister of trade understands that. I would encourage him to push the cabinet into following that kind of policy.
I want to comment briefly on some of the more complex things which I think are wrong with our system. In my view, the hon. member for York-Peel barely touched on some of the fundamental questions that are facing us in economics. It seems to me evident that we have a system which no longer obeys the laws which were supposed to govern it. The open market has disappeared. Trusts, cartels and price-fixing agreements reduce the area of free competition to a minimum. I think the flexibility of earlier capitalism has given way to increased rigidity and the public is no longer protected. As a matter of fact, the hon. member for York-Peel and his colleagues are in the nineteenth century. Capitalism, as we knew it in the nineteenth century, has gone.
It is evident that planning of some sort is coming anyway. The state has already exercised considerable control over our economy. The capitalists themselves, as fast as they divide up their markets and build their monopolies, are becoming planners. Every giant corporation has a planning commission.
I see that my time is almost up. Before concluding, however, let us deal with the here and now. We no longer have that old system which the hon. member for York-Peel would like to have. We have a different system now and we have to protect the people in that system. We have to protect the little guy in that system. That is what this government has failed to do, that is what the vote of non-confidence in this government should have said and that is what the hon. member for Oshawa (Mr. Broadbent) was trying to get at yesterday when he talked about these discredited, made-in-Washington usurious interest rate policies.


Herbert Eser (Herb) Gray: Mr. Speaker, I welcome the opportunity to take part in this debate. It enables me to describe to this House some of
the efforts of the government to deal with the economic and industrial challenges that have emerged in this country, as they have in national economies the world over.


Sinclair McKnight Stevens: How long do you need? Five minutes?


Herbert Eser (Herb) Gray: I want to describe the efforts of this government and how they involve creating a solid framework for present and future economic stability.
The hon. member from York-Peel (Mr. Stevens), in presenting his motion, as usual showed rather severe ignorance of the vast array of positive policies and programs which the government has implemented. We are right now addressing precisely those issues about which the hon. member for York-Peel claims to be concerned and mentioned in his motion, namely the stability, productivity and competitiveness of the Canadian economy. The hon. member may be a slow learner, and the Canadian people have confirmed this, but I am glad to have another opportunity to tell him something about our economic policies and how they are working toward an economic future in which all Canadians can benefit, one that is vital and growing.
Before doing that, I want to make another observation about the motion before the House. Whether my hon. friend likes it or not, Canada and Canada's economy do not exist in isolation from the rest of the world. On the contrary, Canada is one of the most internationally oriented of nations, and its trade with other countries makes up 25 per cent of our gross national product. The economic events that have confronted Canada with its most serious challenges in recent years, starting with unprecedented increases in the price of energy and running the gamut to the emerging competitiveness of newly developed countries, are international in origin.
Far from condemning the Minister of Finance (Mr. Mac-Eachen) for participating in a meeting of the International Monetary Fund, or for that matter criticizing any other minister of the Crown for pursuing Canada's economic interests in international meetings and international markets, the hon. member for York-Peel and the official opposition, if they knew what they were talking about, should be expressing confidence and satisfaction that this government's views of its responsibilities in regard to having the right economic policy for Canada are not so narrow, limited or empty as those of the official opposition.
The hon. member for York-Peel made reference to the election of the Minister of Finance as chairman of the main committee of the International Monetary Fund. According to press reports, the Minister of Finance was elected because a large number of member countries of the fund did not want the British finance minister, the British Chancellor of the Exchequer, a leading figure in the Conservative government of Britain, to be elected to that post. I suspect that is because they saw what Conservative policies were doing in Britain when it came to matters like employment. They undoubtedly knew what damage Conservative policies have done to Canada during the fortunately brief period when the member for York-Peel and his colleagues were in office. Obviously they
May 22, 1981

knew what would happen if that group had continued in power-


Mr. Benjamin:: You are doing the same thing.


Herbert Eser (Herb) Gray: -and had not been removed by the Canadian people.
I think that the member nations of the International Monetary Fund must have decided that, in electing the Minister of Finance to his position as chairman of their key committee, the balanced approach represented by the Minister of Finance was more in the best interests, not only of the Canadian economy but of the world economy, and they expressed that judgment when they elected him chairman of that key committee.
I have already said that the hon. member for York-Peel is slow to learn but he is also quick to forget, quick to forget that growth in the last six months in Canada has been running at an annual rate of 6 per cent to 7 per cent; that the unemployment rate has fallen to the lowest level in almost four years; that the current account of the balance of payments in the fourth quarter of 1980 moved into surplus for the first time in six years; and that we are creating jobs in the Canadian economy faster than any other industrialized country in the world. In the wording of his motion, he has obviously forgotten what the budget of this government presented last October was all about.
Contrary to the allegations of the hon. member for York-Peel, the budget did create an environment in which sustained economic growth and development can and will occur. Fet me briefly remind the member opposite of some of the elements of the economic strategy of the government set out by the Minister of Finance in his budget of October 28, 1980.
In his motion, the hon. member inaccurately claims the government's policies are destroying stability. That budget is aimed at reinforcing stability. The official opposition in its motion ignores, as this government does not, the destabilizing and destructive effects of inflation. Unlike the hon. member and unlike the official opposition, this government's policies are very much concerned with maintaining the stability so necessary to the health of our economy.
Central to the budget was a fiscal plan calling for steady and gradual deficit reduction and expenditure restraint. The purpose of this budget and this plan was to provide a basis for sustained private sector expansion as well as its financing over the medium term. It is through helping improve the productivity and the competitiveness of our private sector that the government is in fact working to strengthen the productivity and competitiveness of the entire economy. This is where improved productivity and sustained competitiveness in the private sector will originate, not from the empty rhetoric and confused ideas of the member from York-Peel and of the official opposition.
The hon. member and his colleagues have demanded that the government spend more. Today, however, the hon. member is complaining about government spending. Yesterday he apparently voted for increased expenditures by the federal
Canadian Economy
government of more than $3 billion. I think that throughout this debate this type of conduct has shown the confusion that exists when it comes to the Conservatives deciding what their priorities really are. For them, at one and the same time less spending is the number one priority and more spending is the number one priority. This is typical of the irresponsible and in fact hypocritical approach on the part of the official opposition to the necessity of having the right kind of priorities in place for this country at this time.
In the budget, this government set out firmly what Canadian priorities must be at this time in energy, economic development, industrial development and adjustment and manpower retraining. Our commitment to these areas has been demonstrated through increased funding; for example, the 22 per cent increase in the economic envelope for this year and through definite actions.
At this point I want to describe some of these actions and to talk about some of the things we have done and are doing to carry out the promise of the October 28 budget to enhance the stability, productivity and competitiveness of the Canadian economy. Surely it cannot have escaped even the sluggish perceptions of the occupants of the official opposition benches that in the variety and the creativity of the particular economic development measures which we have taken over the past 15 months and are continuing to take, these are the real and important measures of the government's effectiveness in building on Canada's impressive economic strengths, in improving the competitiveness of our industries and in increasing the capacity of our economy to generate wealth and income for the benefit of all Canadians.
I want to mention the new industry and labour adjustment program, the funding for which, $350 million, was announced in the recent budget. Already four communities undergoing severe adjustment pressures have been designated for assistance under this program, which in a unique way brings together measures to support both industries and workers in the designated communities. I expect more designations of communities will be made during the course of the program. This program flows from the government's recognition that adjustment and restructuring are a necessary part of increasing competitiveness. At the same time the burden, the costs of industrial adjustment and restructuring, should not be permitted to fall solely on particular individuals, communities and industries, since the results sought are for the benefit of the entire economy.
I think it is wrong that for some the notion of adjustment seems to convey a negative connotation, but in reality continual adjustment is a necessary precondition for maintaining a dynamic and vibrant economy. The positive side to adjustment is innovation and seizing and exploiting market opportunities as they emerge. The government fully recognizes this and has taken some very significant steps to ensure that these kinds of adjustments are a reality of the Canadian economy and the activity within it.

May 22, 1981
Canadian Economy
Take support for industrial innovation, for example. Recently, we announced a $27 million increase in the federal government's funding of the joint industry-government Telidon program. This very substantial increase in federal funds for a program which is jointly managed by the Department of Communications and the Department of Industry, Trade and Commerce was added to the more than $12 million already committed. It is a major contribution toward making this new industry self-sustaining, nationally and internationally, and in demonstrating the commercial competitiveness of Telidon in world markets.
That this approach is working was stunningly evident in the announcement this week by the American Telegraph and Telephone Company, the world's largest communications corporation, of its acceptance of a Telidon-plus system as the standard in this new communications technology. This AT & T decision should give Canadian manufacturers first crack at the crucial United States market. Industry representatives say they could easily accommodate the existing Telidon system to the announced standard, and what is more, they are now predicting a market worth $4 billion and the creation of
12,000	jobs between now and 1985. Of course, this would not be happening were it not for the vigorous support of this government of this Telidon technology.
On April 13 of this year I announced substantial increases in federal government funding for the highly successful defence industry productivity program. This program is essentially one aimed at encouraging the development of the Canadian aerospace, telecommunications, electronics and related industries. I announced an increase in the base funding for normal projects of over 50 per cent from the previous fiscal year. I also announced an additional $100 million in funding over the next four years to help clear up the deluge of applications received, and an adjustment formula to take account of expected cost escalations.
Adding to these amounts is funding for particular major projects, such as the PT7 engine and the components for the Cruise missile, bringing total DIPP spending over the next two years to $272.9 million, a good investment in the growth of key industries, important for Canada's present and future.
I want to point out that a rigorous evaluation of the program has shown, among other things, that every government dollar invested in these industries through this program results in $15 of high technology sales, 90 per cent of which are for the export market. Equally if not more important to Canada's industrial development as our support for the introduction of new products like Telidon, the Dash-8 plane, the PT7 engine, is our effort to encourage another type of innovation throughout the Canadian industrial sector. I am talking about encouraging and helping all Canadian industries to adapt to the most modern and innovative production processes, like computer aided manufacturing and designs. The extent that this happens on a scale sufficient for our industries to remain competitive with respect to cost of production and quality of product will very much depend on the extent of co-operative efforts between government and the private sector.
The government has begun extending just such support through such means as the special microelectronics fund under the enterprise development program and the planned microelectronics awareness program aimed at making Canadian industry generally more aware of the necessity of adapting to and using these kinds of new production technology.
In this decade the opportunities for industrial development will be so widespread that the biggest challenge will be to ensure that we are continually identifying and capturing them and not permitting them to slip through our hands. Three of the most promising areas of opportunity where we as a government are already very actively involved in working with the private sector are to maximize the benefits to Canadian industries and workers of the industrial benefits from resource and energy development, Canadian sourcing and export market development.
With respect to the first of these areas, there is general agreement that one of the strongest sources of market stimulus in Canada in the coming decade will be major resource and energy projects. The demand for goods and services spun off by these projects will give Canadian firms in all regions opportunities to provide technology-intensive goods and services in domestic and foreign markets, leading to sustained and broadly based economic growth across our country.
Seeing to it that these benefits accrue in fact in and for Canada is a very important goal for this government. In fact, there are provisions in the oil and gas legislation now before this House to respond to the concern that Canadian firms have every full and fair opportunity to supply these major resource projects. These provisions would govern only those projects undertaken on Canada lands and reflect the authority of the federal government with respect to these areas of our country. I believe the policy priority for this government must be and in fact is in addition to administering these provisions for the Canada lands, to ensure full benefit to Canada from major resource and other projects undertaken everywhere in this country. Obviously something should be done on a co-operative basis with the provincial governments.
Added to the spinoff benefits of major energy and resource projects are important domestic marketing opportunities in a number of other industrial sectors, provided we are in a position to capitalize on domestic, on Canadian opportunities as they arise. One very significant example of the government's commitment to achieve this kind of objective was the recent and very successful Opportunities in Mining Conference just held in Vancouver. Jointly sponsored by the Department of Industry, Trade and Commerce, the government of B.C. and the mining associations of British Columbia and Canada.


Sinclair McKnight Stevens: I rise on a point of order, Mr. Speaker. As a matter of good order I simply want to ask the minister whether he will be dealing with the question of interest rates, and in particular why he feels that their 19 per cent level is okay when our 14 per cent level would have justified his resignation?
May 22, 1981


Mr. Deputy Speaker:: Order, please. I suggest that is a matter of argument rather than a point of order. The Minister of Industry, Trade and Commerce (Mr. Gray) has the floor.


Herbert Eser (Herb) Gray: Unlike the hon. member, who in my view is abusing the rules of the House with spurious points of order, Mr. Speaker, I am responding to the only real point I can find in his motion where he talks about policies requiring efforts to improve the stability, competitiveness and productivity of the Canadian economy. I think I am responding to whatever merit there is in his motion, even more so that the hon. member did in presenting it.


An hon. Member:: Tell us about interest rates.


Herbert Eser (Herb) Gray: This Opportunities in Mining Conference was a unique and very successful form of government and private sector, federal and provincial government co-operation. Its purpose was to bring together the Canadian mining industry and Canadian manufacturers to enable much more of that industry's more than $1 billion in annual sourcing of products, services and equipment to be purchased right here in Canada.
The hon. member in his speech spoke critically of the federal government's efforts in the area of trade. Last year we had a record merchandise trade surplus of some $8 billion, more than double the previous record. This government is making significant efforts to build on this success, responding to requests from the private sector for increased support for export promotion.
We realize that expanding and diversifying our exports is a key element in bringing long-term stability, productivity and competitiveness to our economy. But as I said earlier, the opposition finds it very hard to learn, and what little its members do learn they very soon forget. So it bears repeating to them that the Government of Canada is now providing funds to our Export Development Corporation to enable Canadian companies to match concessional terms being offered to foreign companies by their governments, and thereby enable our Canadian companies to meet more effectively international competition in export markets. We have also greatly increased the budget of the program for export market development and the trade fairs and missions program of our department, providing substantial additional funding to assist Canadian companies directly in their export efforts.
To conclude, I want to say that this government's policies certainly are not destroying the stability, productivity and competitiveness of the Canadian economy as alleged in the opposition's spurious motion. The statistics, not only in Canada but those developed by international agencies like the OECD, show that when looking at growth in employment, including manufacturing employment and the over-all growth of our economy and the balance of trade, the government's policies are in fact strengthening the stability, productivity and competitiveness of our economy.
As I said at the outset of my remarks-
Canadian Economy


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. minister but the time allotted to him has expired.


Mr. Scott Fennell (Ontario):: Mr. Speaker, we have now had a dialogue on the lame-duck Liberal industrial stategy. It would have been more appropriate had the minister in this debate used some of his words I can quote from the past. He said, for example:
-because of the harmful effects of high interest rates on consumers, businessmen, especially small businessmen, and the entire economy, there should be an urgent study by the Finance Committee, where the Governor of the Bank would come, and the Minister of Finance-
That is from "The Watson Report". The minister made that statement on October 15, 1979. That is what he should be addressing today rather than the lame-duck industrial strategy that has not worked for 12 years. His industrial strategy has brought us the worst record in our history.
Then we hear our friends to the left in the frivolous rump attacking us. Why do they not attack the government? They have all these marvellous industrial strategies; why do they not tell the government what to do? I doubt if the minister would listen anyway.
It is interesting to note that this debate was commenced because of the economy and high interest rates. In 1968 when this government came to power the average interest rate was 6% per cent. This year it will average 17% per cent. That is almost a 200 per cent increase. The debt in 1968 was $20 billion. It has now gone up sixfold plus, from $20 billion to $120 billion-odd. I do not know how far it has gone. It is going up so quickly you cannot keep up with it. Inflation has gone from 3 per cent to 12 per cent. It is interesting that all these statistics are in relation to each other, and this tells me that the government has been on a bad track, that it should get off it and start running this country.
We know and it has been proven, and I believe it will be proven even more strongly south of the border, that these interest rates have been brought about because of wasteful government spending over the past number of years. It is tragic what this is doing to the country, it is tragic what it is doing to our citizens, and it is tragic what it is doing to Canadian business. Every time the government has to borrow more money it sets up a chain reaction. The people who lose are those in Canadian business, Canadian citizens as a whole and the entire country. Canadian business is all small. Only the multinationals from other countries are really big business in this day and age. We are not helping small business by providing them with relief from the interest rates they have to pay during these dire times.
Last weekend I was talking to one of my constituents who had bought a business when interest rates were 9 per cent. His money was on a demand loan and he does not qualify for the special bond. He said that now that rates are 20 per cent his business is no longer economically viable. This is what this government is doing to this country.
All the government has done so far during this session is hammer at one segment of our economy. If any corporation,

May 22, 1981
Canadian Economy
organization or government agency would just cut one part of the economy off at the knees without any plan to look after the employment of all the people thrown out of work, it would be thrown out of business.
The energy program has brought us all to our knees. We are all waiting and praying that something will happen to save us. I know this will not come from internal forces but rather from external forces. Why does the Minister of Industry, Trade and Commerce (Mr. Gray) not stand up and level with the public, setting forth a five-year program? Obviously the government is into five-year programs, so the minister should tell us how the government is going to nationalize all industry within the next five years. The government has just started and what we see is only the little tip of the iceberg it has grabbed onto; the easy part, the rich part, the big bucks. The government will just keep going until it brings us right down.


Herbert Eser (Herb) Gray: May I ask my hon. friend a question?


Mr. Deputy Speaker:: The Minister of Industry, Trade and Commerce (Mr. Gray) wishes to ask a question. Will the hon. member accept?


Thomas Scott Fennell: When I finish.


Mr. Deputy Speaker:: At the end of the hon. member's speech.


Thomas Scott Fennell: This government does not want to help small business. It is easier to nationalize six large giants than to nationalize 60,000 small Canadian businesses. The government's plan is to protect and look after the big guy, because there would be too much of a hassle in the press, in the country and within the constituency if the government tried to nationalize 60,000. I maintain, and we have brought this forward before, that it is time for this government to bring down a new budget, before July 1, bringing out new incentives to Canadians to invest in this country. The people are tired of the government and then taking the money out of their pockets.
All the government will do with any proceeds is to spend them on another new program. That does not produce any oil or anything positive. These people should be permitted to buy into competing industries under the free enterprise system. We should not be creating a giant bureaucratic monster in Ottawa. The forefathers of the people of this country had pride. They settled this country through many hardships. These people should be given pride of ownership beyond the pride of ownership of their own homes or the pride of ownership of the businesses or industries in which they work. The people in this country have no pride in this government.
I received on my desk this week the financial statement for Petro-Canada. All I can say is that it must be government-financed because I do not know of another oil company with the same debt to equity ratio. Petro-Canada could not even pay for its recent acquisition. It had to go back to the public to
drain some more bucks from the middle-income group, the biggest pot it could find.


Jean-Luc Pepin: You wanted to sell it to ordinary people. Make up your mind.


Thomas Scott Fennell: Petro-Canada did not borrow the money at the current rates at which its competition has to borrow money. Petro-Canada does not have to go out and pay the big bills small Canadian producers have to pay. Small Canadian producers pay 20 per cent; Petro-Canada gets away with half rates. If this were a privately owned company, the directors and the management would be thrown out by the shareholders, but in this country we do not have that opportunity.
The "Economic Review" is meant to explain to Canadian citizens why we are going bankrupt. Table 1.4 at page 5 shows that we stand right at the bottom of the list respecting the current account positions of the non-socialist economies. We are the worst. Perhaps that is because we are no longer a non-socialist economy. Perhaps we should not even appear on this page. Real effective exchange rates are dealt with at page 6. We are at the bottom of that list too. I think we should be classified as a socialist country. We belong on a list of socialist countries. I do not think we belong in the same league as some of our friends, as we did in the past. Some of the OECD countries which are below the seven largest on the list are pushing us. They are going to replace us. We are going to drop to the bottom of the list and eventually right off it, and Luxembourg could probably take our place. People say we should compare the seven OECD countries to ours. One thing that none of those other countries has but that we have-and we are not using-is natural resources. We were blessed with much more than any of those other countries. We have the greatest agricultural potential in the world. We have the greatest oil potential in the world. We have the greatest mineral potential in the world. We also have the greatest potential in the people of this country to build industry. We have the potential to convert those raw materials into finished products rather than depending on the export of raw materials. When we compare our record with those of the other countries on that page, we should hang our heads in shame. We have not done a good job, we have not taken care of this country, and we in Ottawa have not been responsible.
We keep hearing about high interest rates. I could give dozens of quotations from statements by the present Minister of Industry, Trade and Commerce (Mr. Gray). He may say today that he is in favour of high interest rates, but I do not believe it. I believe he is violently opposed to high interest rates. We have tried high interest rates. They are not working. They are driving us to our knees.
Hon. members to my left say our high interest rates are made in Washington. Perhaps we should let our dollar float partially, look for some import replacement and address ourselves to building an industry for import replacement. We should take hardship away from home owners. We should reduce imports into this country. If the value of our dollar dropped to half of what it is now, people would not be buying
May 22, 1981

big cars. That might compel us to force the large companies to produce small cars here in Canada. I am not talking about bringing Japanese cars over. I am saying we should get them here in pieces, that we should contribute some of the pieces and build the cars here. If we reduced imports and increased exports, we would benefit.
I think this government is very frightened of its tenuous political power, so it has gone far beyond the wildest dreams of the New Democratic Party. A certain speech made by the Leader of the New Democratic Party (Mr. Broadbent) back in 1978, when compared with some of the programs being implemented by the Liberal government, can now be seen to have been very conservative, and that is quite a compliment 1 pay. I am sorry members of the New Democratic Party are not here to hear it.
The New Democratic Party is open. Its members believe in socialism through evolution. I think the Liberal goal is socialism, but that party would rather do it through revolution. They are in a hurry. They want to get it done right away. They cannot wait ten years. They will bring in socialism in any way they can. They will pass any legislation necessary. They will do anything in their power to change this country from a nonsocialist nation to a socialist nation. We are getting down to the bottom of the list of non-socialist countries, but the question now is who is going to slip off the list first? France may slip to the position of the country with the worst economy and replace Canada. That would be something, but the trouble is that France might slip right off the list too. We may go off together three points apart, 22 per cent to 19 per cent. In light of the new situation in France there might be tremendous competition to see who can nationalize the most the fastest. Will we win or will France? We will see who gets the real lead. Any entrepreneur in this country should beware. Entrepreneurs should watch out. Small businessmen should watch out. This group opposite may come and take them over too. This government may do that under the guise of Crown corporations, but eventually they will take businesses right in and work them over so that there will not be so many people to cut through.
With this government we are not getting any further ahead. We are getting further behind all the time. It is interesting that south of the border government spending increases will be cut by two thirds, but each year in this country our expenditures keep going up. The Americans are going to cut their taxes, and still, in spite of our indexation, they will have a better tax situation than we have here in Canada. The U.S. administration will encourage entrepreneurs. Unlike our government or the French government, the U.S. government will encourage entrepreneurs to get going and to make the country work. That has brought a spirit of encouragement back to the United States. There is a spirit of "Let's go, guys, we have a great country and we can do it". That is what this government should be doing here in Canada.


Some hon. Members:: Hear, hear!
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Thomas Scott Fennell: The American administration will increase industrial tax incentives. That will make that country work.
Let us compare the U.S. energy program with ours. It is like day and night, or capitalism and socialism. There are no similarities at all.
We have heard much talk about the Minister of Finance (Mr. MacEachen) being chosen chairman of an IMF committee. My colleague, the hon. member for York-Peel (Mr. Stevens), mentioned that the minister probably got the job because he is the biggest spender. Last fall I had the opportunity to go to the United Nations. I was not there very long. I was there only a week, but I learned how appointments are made in international circles. The test is, "Who can do the most for me," and "That is the person who will get the vote". Obviously, those who voted are expecting a giveaway from Canada or some feathering of their nests. I can tell hon. members one thing, and that is that they can bet their bottom dollar that they can talk about the minister from Britain, but there is no way that bunch who voted in the Minister of Finance of Canada would have voted for Donald Regan.
I made a statement in January of this year that we hit the peak, or I hoped we had hit the peak but I do not know if we will ever come to that point. It is interesting that as our interest rates go up, so do our taxes. They compensate for indexation, they keep on grabbing more money somewhere else. They may as well never have indexed the income tax because they are going to get it somewhere else, they are going to skin the Canadian public one way or another.
There was a 4 per cent increase in income taxes in Ontario, but that has pushed up the average person's income tax by only 1.72 per cent. Then the Government of Canada comes along and puts 4 per cent on top, that makes an increase of 5.88 per cent and that hurts. That increase in tax of almost 6 per cent is on top of an inflation rate of 12 per cent. I do not know how the poor guys working nine to five in General Motors, where I have many constituents, are going to manage. I do not knock those guys because they may be making a big buck in 1970 dollars, but they are not making very much in today's dollars. It has been a sort of set-up by this government to grab all the money they can, grab every little piece of the pie. The other governments in this country have used this as an example and have said: "Hey, guys, there is where our bucks are so let's go." The municipalities keep jumping in for more money, as do the provinces and the regions. The province of Ontario could not get its hand out of our pockets; they had to get some of those petro-bucks.
They are all grabbing for more, so the people of this country are looking to this government to set a standard, which it is not doing. It is the biggest tax grab I have ever seen and probably the biggest ever witnessed in this country. It is an interesting thing that large corporations do their borrowing on a fiscal basis so that when interest rates go up, they just delay their borrowing, they get a little bit more bank financing. Governments do the same thing. High interest rates do not really hurt

May 22, 1981
Canadian Economy
the governments and large corporations and, strangely enough, Mr. Speaker, they do not hurt the Canadian development companies which are now the major holders of real estate in New York, Houston, Dallas, San Francisco, all around the United States. It does not hurt them at all because they borrow the money in Canada from Canadian banks, Canadian savers, then turn around and deduct that interest from their parent company here and then get a second deduction in the United States. So it does not cost them one red cent. It does not matter if you have a 40 per cent interest rate, they can still pay the bill. It is the government which is going to fork it over. That is the problem in that one instance, and that is why those large development companies are building housing, offices and everything else in the United States instead of in Canada.
The government says there is nothing they can do about the high interest rates. I say they could do something about them. They are hurting the home owners much more than if our dollar dropped in value. They are hurting the small businessman, and I am talking about everything other than multinationals. They are hurting the independent oil companies, as is the National Energy Program. And the other people who are really hurting are those who have deposit receipts. They may be getting 18 per cent, but they are paying tax on that, which leaves them with 9 per cent, but with an effective inflation rate of 12 per cent they are still three points in the hole. I ask this government, I plead with it the best way I can, please do something to help Canadians survive. You may think they are making a lot of money, but they are not. The dollar they are making today by many comparisons is only worth about 10 cents compared to the dollar of 1961.


Mr. Pierre Deniger (Parliamentary Secretary to Minister of State (Multiculturalism)):: Mr. Speaker, it is always an honour and a pleasure to take part in a debate in the House of Commons, especially on such a topical subject as the economy. Last week, I had the opportunity and the honour to speak to the House and to those who listen to us about an important subject, namely the economy and the harmful effects of inflation on small wage earners who bear the brunt of inflation. However, today, I must say that I am greatly disappointed by the lack of seriousness of the motion introduced by the opposition.
I sit on the Committee on Finance, Trade and Economic Affairs with the hon. member for York-Peel (Mr. Stevens). I have not been in the House for long, but I have often had the impression that I was learning a lot during the debates of this committee from the contributions of the hon. member for York-Peel, the hon. member for St. John's West (Mr. Crosbie) and the other financial critics of the opposition. I was grateful for the quality of the questions that they asked and the wisdom that they often showed in their interventions.
I confess, Mr. Speaker, that on reading the motion introduced by the opposition, I was greatly disappointed. I respect the former President of the Treasury Board even though I do
not necessarily share his political and economic views, but I still respect him because he has always been consistent. We know what to expect from him. We know his economic philosophy and where it leads. We may disagree with it, but we can still respect it. This is why I have always appreciated the interventions of the hon. member for York-Peel. I must admit I do not think much of his motion. He went so far as to object to the Minister of Finance (Mr. MacEachen) attending a meeting of the International Monetary Fund! He has effectively condemned our whole policy even though he had the same goals when he was himself President of the Treasury Board! Obviously, Mr. Speaker, we must face our current problems, namely the inflation rate and the impact of high interest rates and inflation on small wage earners.
I do not believe that such a silly motion can solve anything. It is so ridiculously phrased that few opposition members were here today because the majority were ashamed of it. I think that no one wants to be associated with those unconvincing comments. Since we are facing such a prevailing and basic situation which concerns so many people and causes hardship to the underprivileged and small wage earners, all members of the House should co-operate to find the required solution. Unfortunately, such is not the case.
The solutions suggested may often be very attractive politically. Perhaps on the very short term, the solutions promoted by the hon. members opposite can attract certain pressure groups and a few additional votes. You know as well as I do, Mr. Speaker, that these political ad hoc measures have a very doubtful economic value. I have listened to a whole series of them, enumerated by the member who spoke before me. In my opinion, we cannot live in a closed society. We all depend on our neighbours and on our actions. There is no magic solution to inflation. I think that members of the opposition would have had every reason to denounce our Minister of Finance if he had ignored this international conference.
I think that it is not so much his attending an international conference that is being criticized but the fact that the conference is being held in Gabon. Fancy that! Gabon! I am sure that several members of this house cannot imagine that an international conference of value could be held in Gabon-but 1 remind members opposite who have criticized the minister for attending and participating in this conference that there were over 800 experts and ministers of finance from 141 countries, members of the International Monetary Fund. I, for one, am proud to see that the delegates attending this monetary conference considered it appropriate to appoint our Minister of Finance their chairman. I think that is an honour they bestowed on me and on all Canadians. I think the previous speaker insulted officials of the United Nations or other international agencies by the way he described the appointment process. Can you imagine! He spent one week at the United Nations and that automatically makes him an expert on the way all appointments to major positions are made.
May 22, 1981

Now that is incredible, Mr. Speaker. I have never heard such nonsense, and that is what I was referring to when speaking of the hon. member for York-Peel, because he is not generally inclined to make those kinds of statements. 1 wonder whether four days of debate have not exhausted the members opposite, whether they have not said all they had to say about the economy, and whether they are now going to try, through devious means, sheer stupidity, or politicking to impose their economic policies on this country. That is what I find deplorable and that is certainly not the philosophy I adhere to as a member of Parliament and certainly not the approach I took when I was in opposition. Mr. Speaker, 1 would simply like to quote from a wire from France Presse, which has a reporter on the spot. This is what he said, as reported in today's La Presse and 1 quote:
The 24 member group from other Third World countries feel that the monetary policies followed by industrialized nations in their fight against inflation have increased interest rates and exerted more pressure on the deficit ridden balance of payments of poorer nations.
That pretty well sums up, Mr. Speaker, the debate that has been going on in this House for the last two weeks, for I do not know how many years. That is precisely what we are discussing: the effects of the monetary and fiscal policies of our government. There were 800 international experts in attendance. There were also ministers of finance. And our Minister of Finance was criticized for being there and not here. But if the opposition took a positive approach, if it made constructive recommendations instead of politicking, maybe the problem could be solved. In my opinion, the Minister of Finance was wise to go to this international conference where there were 800 experts because there is no such expertise in this House, certainly not on the opposition benches anyway, and I much regret that fact. I would certainly be very pleased if we could all together face this situation which certainly causes much hardship for low-income Canadians.


David Kilgour: Mr. Speaker, would the hon. member accept a question?


The Acting Speaker (Mr. Blaker):: The hon. member for Edmonton-Strathcona (Mr. Kilgour) will understand that is the choice of the hon. member for Laprairie (Mr. Deniger).


Pierre Deniger: I have a lot of respect for the hon. member for Edmonton-Strathcona, not only because he speaks French but also because oftentimes his contributions are positive. If time permits I would be more than grateful to have an opportunity to exchange ideas with him. I would even be interested to know what his question is, Mr. Speaker, if unfortunately I should run out of time. I am glad indeed that he is listening to my speech. Perhaps we might get together after my intervention? I think that Canada is a closed country. If Canada were the only
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country in the world I think it would be obvious that the current monetary policy would not have the consequences we are experiencing daily. I think we would be able to administer-and very well at that-strictly with a fiscal policy. But such is not the case, Mr. Speaker. We are not living in a vacuum.
We are definitely influenced by the economic policies of all countries in the world. To my mind that is interesting because it so happens that in his motion the hon. member for York-Peel (Mr. Stevens) refers to the international character of the travels of the Minister of Finance (Mr. MacEachen), and he mentions other countries in the world, the economic aftermath of the new American policy on all countries, not only Canada but also the Federal Republic of Germany, Belgium, Japan and so many other. We all know that the Americans have decided to implement a policy designed to fight against the inflationary pressures in their country. The result of that of course is a stronger American currency, but another side effect is that interest rates are soaring. But since no one lives in a vacuum and since the United States is a country whose importance is not diminishing but growing indeed, it is a fact that it has an influence not only on Canada but on all countries as well. If I may I should like to give a few examples. In the Federal Republic of Germany the deutschmark has considerably depreciated and we already know that the Bundesbank had to raise interest rates in recent months. Belgium lived through the very same phenomenon. Although the Japanese have huge investments in the automobile industry, and that is indeed a major factor in their balance of payments, we know that they had to push their rates up sharply these past few weeks.
Now, Mr. Speaker, if we are to compare the cost of living index in Canada I will quote not just any figures but those which even the hon. member for York-Peel quoted from the Economic Review for April 1981. He selected the figures which seemed to strengthen his case, and that is politically understandable, but he referred for instance to the 7.5 per cent unemployment rate level. And then he said: Look at the chart on page 3, that unemployment rate is frightening, we are in worse shape than the Democratic Republic of Germany, France and even Great Britain. What he is not saying, among other things, is that the rates of unemployment have come down substantially. What he is not saying is that the level of unemployment now is lower than at any other time since 1976. What he is not saying is that 337,000 jobs were created over a one-year period. What he is not saying is that we are striving increasingly toward full employment, an aim which both he and I certainly share. I suggest, therefore, that the figures he has quoted were poorly chosen for if I wanted to quote figures to demonstrate that our economy is having a hard time, I would not quote figures connected either with unemployment or consumer prices.

May 22, 1981
Canadian Economy
As far as the rate of inflation in 1980 is concerned, in Canada it was 10.1 per cent, compared with 13.5 per cent in the United States, 18 per cent in Great Britain, 13.6 per cent in France, 5.5 per cent-I agree-in the German Democratic Republic, and 21.2 per cent in Italy. It seems to me that these figures speak for themselves Mr. Speaker. 1 suggest that in this international context, our level of inflation is high. We are suffering as a result of high interest rates, but we are not the only ones.
We cannot cure all ills in this House. Even the economy of the German Democratic Republic is no longer as sound as it was when these figures were first published. This is significant of course but what I feel matters even more is what was reported in the April 1981 issue of the Economic Review about the money supply and what the hon. member for York-Peel failed to mention. That is of paramount importance. In short, we know that inflation is due to a mass printing of dollars which exceeds our level of production, and that the best way to wrestle unemployment to the ground is to reduce considerably, if not entirely, our dollar printing activity. There are various ways to achieve that. We could do as Great Britain has done and wait until the interest rates reach 18 or 20 per cent, and then stun the whole country with a major reduction of the money supply. When we look at the figures, we realize that Great Britain went from 20.3 to 4.2 per cent. Mr. Speaker, I have been to Great Britain and I have seen with my own eyes the impact of such a policy. There is no doubt in my mind that this is the policy we ought to follow, because when such high rates are reached, there is no choice. They had to take stringent steps, but the situation was different in Canada. And that is why the money supply must be gradually reduced. And when it is reduced, Mr. Speaker, it is like a drug addict who keeps increasing his daily fix. When he is weaned off drugs, he finds it painful, but he is told: In the end, you will be free, you will be healthy. Then I think he is willing to be treated. This is precisely what is happening in Canada. A gradual reduction of the money supply has, of course, an impact on the inflation rate, because the value of the dollar and the inflation rate cannot both increase at the same time Mr. Speaker. If interest rates are allowed to drop, the dollar will depreciate and then the inflation rate will increase. So we have to make a choice. I approve that choice, Mr. Speaker, because it is a necessary choice, which is to reduce the money supply. Where we may disagree, it is on how far that reduction should go.
As far as I am concerned, I am one of the haves, I am not a businessman, I am here in this House without the advantage of having been in private business as the former minister of state for small businesses. He stressed I was not a businessman. This is true, I was a lawyer in private industry, I have been for a while with Power Corporation, so I have just the same some idea of business. He reminded me I had never had to meet a payroll, to feel the pressures exerted on a businessman. He is right, of course, but I say to him that, to my knowledge, the
effect of inflation on my constituents is precisely the effect it has on have-nots. And I think we have no choice. We must act, and act now.
If there is one thing I can blame the opposition for, it is their criticism that we have nothing constructive, nothing positive, and I hope the hon. member who will speak after me-I understand it is the hon. member for Capilano (Mr. Hunting-ton)-will give us specific suggestions. Because, Mr. Speaker, I submit that the victims of inflation are the have-nots, and on the very short term I do not know what we can do to ease their burden, to improve their standard of living. But if I were to make recommendations to the Minister of Finance, as I did last week, simple and practical ones that in my view would improve the lot of have-nots, I would tell him first and foremost that people should forget once and for all about granting wage increases on a percentage basis. It is my view that we should arrive at an index of essential goods. We should establish a minimum amount equivalent to the cost of essential items. We know that food is essential, that housing is essential, that transportation costs must be met. We know that current expenses add up. Therefore, it is the total, the cost of all those essential items that should determine our salaries. A low-income person should never get a raise short of that amount because it is obvious that the person who earns $40,000 a year can more easily bear the brunt of inflation than the one who earns $10,000 and that at 10 per cent raise for the person earning $40,000 does not have the same impact as a 10 per cent raise for the one earning $10,000.
Mr. Speaker, I suggest to this house as I suggested to the minister who is surely going to give it some thought, that we should consider the possibility, a minimum not in terms of percentage but in terms of dollars and that instead of granting raises on a percentage basis which do not compensate for the ravages of inflation, we should set a minimum set first on the cost of the basic necessities of life and going upwards. This means that those people with higher incomes, the well-to-do, the high-rollers, and there are still many of them in our society, in my own district in Brossard, I can assure you that houses sell well and at high prices, just as in Vancouver they sell well and at high prices. This means that people do not necessarily mind inflation rate or interest rates; they simply look at the monthly payment to be made. If they can afford to pay such an amount at the end of the month they will buy. It is bad policy but that is the way they act. So I tell you, Mr. Speaker, that we must change our way of thinking. People must be made to understand where they are going, and if we manage to get that, if we can understand what is the actual consumer price index, if we can manage to set new wage bases we will then be able to achieve a new economic policy in this country.
Today, I do not intend to dwell on fiscal policy because my time is running short. Obviously, Mr. Speaker, economic policy in a country has as its components fiscal policy and
May 22, 1981

monetary policy. Naturally, our fiscal policy will be contained in the forthcoming budget. A budget, in short, is a statement of the fiscal policy of a country.
Mr. Speaker, the hon. member for York-Peel is asking us to bring down another budget now. We have yet to reach an agreement with Alberta on energy matters. We have already had one budget without any such agreement. The Progressive Conservatives also brought down a budget without an agreement having been reached. Surely they will admit, as I do, that it is hard to know what our sources of revenue will be without such an agreement. As far as I am concerned, I am of those who hope and believe that we should try to come to an agreement with Alberta before having a new budget, in order to know exactly what our revenue base will be. Once we know that, it will be much easier to develop a fiscal policy that will stand on its own. In addition, Mr. Speaker, and I am quite willing to admit that government expenditures must be cut back-I am the first to admit it-but not at any cost, however, nor at the cost of selling off, just like that, all Crown corporations; on the contrary. The state still has a role to play; it remains a driving force; however, Mr. speaker, I do not feel that it should be involved in every sphere of the economy. So, I say a fiscal policy after an agreement with Alberta, because then we shall, in fact, know what our sources of revenue will be; a formal commitment, on the part of the government that takes into account the human element, a formal commitment to always be present while, on the other hand, giving free enterprise a certain leeway to operate, because that is very important.
Mr. Speaker, I know my time is almost up and to sum up, let me say that I know or at least I hope that all hon. members in this House realize the significance of inflation rates and the consequences of interest rates. We may disagree on the steps to be taken. I have suggested one or two and would like to hear something constructive, something positive from the opposition. I for one can assure you, Mr. Speaker, that the fact that these people are Progressive Conservatives is no reason why I should not listen to them: on the contrary, I always listen to them; but I would like to hear something meaningful; in fact I wish we could find together a solution to all those problems, for the sake of all Canadians.


David Kilgour: Mr. Speaker, I should like-


The Acting Speaker (Mr. Blaker):: I will recognize the hon. member for Edmonton Strathcona (Mr. Kilgour), but I should indicate to him that if he is rising on a point of order to question the hon. member for La Prairie (Mr. Deniger), that is not possible without the unanimous consent of the House. The hon. member is entitled to seek the unanimous consent if he wishes.
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David Kilgour: Very well, Mr. Speaker: let us drop the matter. [English]


The Acting Speaker (Mr. Blaker):: Well, then, the hon. member has resolved his own question.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: The
issue that we are debating here behind all the talk is one thing, that is, interest rates. One can call it barren economic policies. This motion does. Basically, the sin that we are discussing is the fact that the government has been following a practice, which the previous government and the government before that followed, of accepting advice on economic, monetary and fiscal policy based on a type of approach that has been proven quantitatively wrong over the last 20 or 30 years.
In their last major national conference in Montreal, economists admitted they did not know and could not explain where they had been. They admitted they did not know where they were or where they were going. If economists could have admitted their complete failure to understand the system on which the world is working, I would think it behooves us in Parliament to be a little humble and accept the fact that neither do our advisers in Ottawa, our capital, know where they are. I use that as a starting point.
We have had a good demonstration today of the words "barren economic policies". I am sorry that the Minister of Industry, Trade and Commerce (Mr. Gray) left because I was going to make a comment or two. I sat with the minister when he was in the opposition. In that short period of government, I was happy to be on the government side in a committee where most of us in all parties agreed, that the ordinary members of Parliament had to take over from the cabinet and the ministers on the grounds that they had accepted this fallacious economic theory of the bank governor and the Department of Finance. The Minister of Industry, Trade and Commerce was loud and outspoken in his acceptance of the fact that the advice we were getting from the bank was wrong. He was outspoken in his acceptance of the fact that the advice we were getting from the government was wrong because it came from the same source. The hon. member now sits as a minister. He said it is all right to pay 20 per cent interest because the Minister of Finance (Mr. MacEachen) had said that the people of Canada are so wealthy that they can afford it. Last week the Prime Minister (Mr. Trudeau) said in this House that the ordinary people of Canada are 50 per cent better off than they were ten years ago. Everyone thought that must mean that the government is doing a wonderful job.
I will not go over that barren ground of statistical statement which reached the point a number of years ago that the minister in charge of the Canadian Wheat Board-who is no longer in this House-wrote a report to prove, on the basis of figures supplied by the then Bureau of Statistics, that the farmer was never wealthier than he was five or six years ago. I do not have to say what has happened to him; brilliant as he

May 22, 1981
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was, he was wiped out in a western riding because of such stupidity.
We have seen the same stupidity in this House in the last week when not only the Minister of Finance mouthed this type of empty rhetoric, but the statement was repeated again today over and over again-that if we do not keep interest rates high, our dollar value will decline. There is no evidence that such a thing will happen.
In late 1979, when the governor of the Bank of Canada was asked for evidence that since he applied this monetary policy in 1975 it had kept the dollar value up, he said that he did not have any evidence. That made headlines in the newspapers. You would think reasonably literate people would not repeat that simple statement again, yet it happens half a dozen times a day in this House. People claim that if we do not keep interest rates high, our dollar will drop. The governor of the Bank of Canada or anyone else who looks at the evidence knows that there is no evidence of that; in fact, the evidence is to the contrary.
It is the same with the other great truth that they enunciate-that when you save a lot of money, interest rates are supposed to go down. Ten years ago Canada not only led the world in per capita savings, but between 1975 and 1979 the rate of savings increased from 5 per cent to 11 per cent; last year it dropped to 10 per cent. No other nation in the world saves more than Canada but the book on economics says that if savings are accumulated, interest rates are supposed to go down. I will not get into the semantics of that today, Mr. Speaker.
I hope that the government recognizes that in 1979 people sense that it was tired and bankrupt of ideas. That is why it was turfed out exactly two years ago today. Through an accident of political demagoguery and trickery it was returned and it thought that God had spoken-that it is now right in everything. We now see this tame, tired, dispirited group without ideas. It knows full well that the civil service cannot help it any more. The men at the top of the civil service have made up their minds about what is right, based on theories learned 30 or 40 years ago. In spite of all the quantitative evidence to show that they are wrong, they cannot bring themselves to make changes. For ministers of the Crown to defend that nonsense brings us all into disrepute.
A few years ago, the Minister of Industry, Trade and Commerce was so much against high interest rates that he said if the government did not bring them down, he would resign. He has destroyed his credibility because he did not resign. Now he comes into this House and reads off a list of things which is barren of ideas for helping out with the interest rate problem.
What we have to do today, Mr. Speaker, is to recognize that politics has fallen to the level of the scam or, to use an old fashioned word, fraud. The whole constitutional debate has been fraudulent. We have not even begun to discuss the Constitution. What we have seen is great posturing on the part of politicians as if they were examining something. The government must know that it has failed in that undertaking. It is
just a matter of letting it die a natural death. Then there is the great cry over energy prices. The government must accept the fact that it has failed and that it must make an agreement. But today, when the government is in trouble, the only solution known to civil servants is reorganization.
The Minister of Finance has become head of the policy group of the International Monetary Fund. That has happened to Canadians before and I am not opposed to it. Personally, I am glad he is out of the country so that he does not make us all look so foolish by making statements in the House. He has been zigging when he should have been zagging so often in the last eight or nine months, that it is a good thing he is out of the country! Let these newly evolving nations have him. If they think they will get anything out of him, they are mistaken.
I should like to put forward a few ideas that could have some possible positive effects, and I shall list them. There is no doubt in my mind that in the next two or three months, since we are not doing well in economics and since the constitutional scam has collapsed, as has the scam over energy prices-even Ontario betrayed it the other day-there will have to be a new scam. It will be Canada taking a position among these newly developing nations as the great white father who is on their side.
Let us be honest, Mr. Speaker. We want to help the developing nations in the world. Let us not try to hide what is actually happening, however. We know that they will not be helped by a continuation of the present type of handout. These handouts have done more to make enemies for the United States, Canada, Great Britain, France, Germany, and the other nations that gave them handouts. These newly developing nations know that a handout is given primarily for the purpose of lining the pockets of the local politicians of the governing party.


Mr. Blais:: Nonsense.


Francis Alvin George Hamilton: Those countries know that the pockets of Canadians are also being lined because not a single handout is given unless the nations buy something in Canada.
As many hon. members may know, I have felt a load on my conscience over the last 20-odd years about doing something about this. As the Minister of Transport (Mr. Pepin) and others well know, I have been trying to organize international trading companies which would help these underdeveloped countries trade with others. They would make money in the process and so could afford to buy what they want, where they want. It would be a three-way trade, not this bilateral economic imperialism that we have practised under the present handout policy.
I know what ministers and what ordinary businessmen in these countries say. They say, "Your country comes to us with all these offers and a list of things that we are expected to buy from Canada." They know that it is economic blackmail. They may smile at you so as to get some more handouts but in their hearts they hate your guts. That is the frank truth of the handout route.
May 22, 1981

I have never met a more dedicated group of civil servants then those in CIDA. Yet I know what they must endure to go through all these monkeyshines. When one country gives to another country, you cannot really enforce the carrying out of that program in the other country.
What is a better way of doing it? I have mentioned the International Trading Congress. I think I have said enough about it. Their programs are working at no cost to government. Both sides benefit and world trade has improved.
I think hon. members probably know that in 1961 the People's Republic of China had only $400 million a year in trade, $200 million going to Russia and $200 million coming back to China. What is it today? They have $30 billion a year in trade. That has been done by free trading institutions moving in and out, sometimes to government, but more often just private businessmen going back and forth and dealing with corporations. Handouts are just a new form of imperialism. These people out there know it, and so do we. They are ashamed. I am not going into the question of the competence of handling these programs. We should not be giving them handouts. We should give them lower interest rates, if they take aid in the form of loans. They have no more chance of paying back a loan at low interest rates than they have with a high interest rate loan if the loan is not properly utilized to produce more wealth with which to pay it back. I do not want to spend too much time on that aspect either.
The last type of rap we have had over the last ten years started with Malta. Someone came along with this great Christian concept that we should turn the wealth of the oceans over to the newly developing nations. My God, wouldn't our fellow men think we are wonderful people? The ocean wealth is the heritage of mankind. Every nitwit in every political party in Canada is in fraud and scam from the word go right up to their necks. The wealth at the bottom of the sea under international law belongs to the coastal states, as far as they can develop it. With present technology, that means everywhere. Six sevenths of the world is ocean today under sovereign control by international law of the coastal states. Canada owns the resources halfway across the Atlantic, the Arctic and the Pacific. That is the international law. Yet civil servants who come into our political parties never even mention that the international law still applies.


Jean-Jacques Blais: How much of the high seas?


Francis Alvin George Hamilton: The high seas have nothing to do with the bottom of the sea convention, if the hon. member knows anything about it.
I want to make it very clear that Canada put forward that proposal in 1958. It was unanimously approved in committee at the Law of the Sea Convention, unanimously approved at the United Nations in 1962, and enough nations ratified the proposal to make it international law, and there it remains.
Why should nitwits in our political parties here in Canada play a part in this scam of pretending that we are going to give
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something from the bottom of the sea to these new nations? At present we can do it very easily by simply granting them a certain royalty, 5 per cent, 7 per cent, 8 per cent, or whatever we agree upon. If we want to give them a handout, 7 per cent of the gross might be acceptable. There is no way to ever get these nations to agree on the split. We would have to turn it over to a United Nations body, such as the International Monetary Fund or the World Bank. With their programs, it would probably be more rationally assigned.
I have mentioned three or four different types of scams: the handouts, the low interest rate scam and the scam of pretending that we are helping people when we are really trying to delude them. The newest one I have mentioned is the one where Canada will take the lead with the wealthy nations of the world toward a better North-South relationship.
We all know what that is. The Prime Minister has made up his mind what he is going to do. He wants to go out with something good. He has failed with every other thing. He has failed on his constitutional gambits. He has failed on his energy gambits. He is not able to do anything on the economic side, so he has to pretend that he is leading the world to higher and better things. Whenever you try to persuade nations such as Britain, France, Germany, Japan and the United States to join together in a helpful procedure for the newly developing nations, boy, that is real pretence. There is only one way you get things through these countries sensibly and that is to help them make more money first so they can do without the handouts.
The proposals I want to put forward all have precedents. When Malayasia wanted a handout to fight communism in 1958, what we did was to clear the land in ten acre jungle lots, plant red rubber trees and pay the people directly wages of $70 a month. When the rubber trees came into production and they were able to pay for running their operations and looking after their families, we asked, as Canadians, for a 15 per cent return. We were paid back in three years.
If we can do this type of thing for Malayasia without getting rid of interest rates, and stop communist insurgency by letting people own their land, they will never become communist. Why can we not use the same rules for Canadians?
Canada took the lead in 1959 and then in 1961 on another project. Instead of handouts, we set up an international program through the United Nations called the world food program, under which were not authorized handouts except in cases of famine or emergency. Today we are beginning the twentieth year of that program. There is no program in the whole of the United Nations working more successfully and achieving more good than this one. Ninety per cent of the billions of dollars we have raised and given to this program has been spent in constructive enterprises, and only 10 per cent has gone to handouts for emergencies. There are precedents to do things in a constructive way so that everyone benefits.
Because my time has just about run out, I want to plead with this Parliament to start putting proposals forward in the hope that in its desperation the government will accept a few of these precedents and begin to apply this type of construe-

May 22, 1981
Canadian Economy
tiveness, aimed not only at our own economic problems but to realize that we will help ourselves if we help the other fellow first.


Arthur Ronald Huntington: Mr. Speaker, Canada today is in a crisis of confusion. We are squandering our government resources, our people resources, our natural resources and our intellectual resources. We are even in the process of squandering a heritage of freedom by destroying a process of common law and a parliamentary form of government that has at least protected our liberty and freedom down through the ages when other forms have failed.
In the past, all emerging and growing societies have given priority to their economies, for it is only with a disciplined, well-managed economic base that the material needs and social wants of man can be provided. Surely the lessons of the Soviet bloc countries, with their state-owned and controlled economies, massive police forces and armies, are there as warnings to us. Surely the economic crises of the welfare states that the NDP have been giving to us as examples of what they would like to see in Canada are a warning that we should not ignore.
Today in Canada we have a gang of socialists marauding under the cloak of the Liberal Party of Canada, repeating the mistakes of the past and of contemporary history. One can only conclude that the screwed up priorities, the mismanagement of this country's economy, the squandering of our resources is deliberate, with the intent of removing any sense of freedom and incentive from our economy, all in the name of an egalitarian welfare state where men will live under a totally structured economy.
Man was not born equal, and in egalitarian societies where men are forced to live as equals, they are not free. When we lose the essential elements of a free economy, as we are doing in Canada today, we lose the basic foundation of our freedom. With the continual emphasis on structure rather than behaviour in the legislation that is being tabled in this House by this government, we are chopping down the tree that feeds the roots of our freedom and of a free economy.
I do not believe that this drift to economic and social oblivion has to be inevitable. We should turn our considerable talents and energies to the many alternatives that are available to us. First, we should take advantage of the lessons of history that are in the Laffer curve and we should deliver fiscal politics that will once again spark the energy, ingenuity and talent that is now lying dormant within our Canadian people. It is the collective attitude of the nation's people which is the ingredient that builds or destroys a nation. We should manage our future, which means forward planning. Herein I agree with the NDP. It means forward planning and budgeting of our people and our resources. However, what do we have today?
Today the Minister of Industry, Trade and Commerce (Mr. Gray) stood up here and gave to us his industrial strategy
which was just a tangled web of microprograms and activities within one department. In no way can we deliver ourselves today from our microproblems. What this country needs is sound, fundamental fiscal policies. History tells us what we must do. History is pleading with us not to repeat the mistakes of the past. What is our Minister of Finance (Mr. Mac-Eachen) doing in Gabon when the great national crisis of today could be solved with a sound fundamental fiscal policy? He should be here preparing his budget for October.
Today we have deliberately delayed the many megaprojects that could deliver this country to energy self-sufficiency by the year 1990. What are we going to do with this delay? If we could reach energy self-sufficiency by 1990, that would be the greatest gift we could give to the Third World, removing our international demands for energy from the rest of the world. If we could look after our own needs at home, that energy would be available for others. Here we have tied up all of these megaprojects and are backing them up behind a dam. It is my guess that this government is going to let them all go at once, creating the most massive shortage of trades people, the most massive shortage of labour, shortage of steel, shortage of transportation, and I do not see one shred of planning in the delivery of the great opportunities that are ahead of us in this country. Not one shred of planning did I hear about today from the Minister of Industry, Trade and Commerce.
We in this country are critically short of tradespeople and people with trade skills. This country historically has been drawing them from the countries and schools of Europe. Whenever we needed them, we brought them over on immigration programs. Today those countries need those skilled tradespeople themselves so they are not available to us. We have known this crisis has been coming for the last decade, but where have we put in place educational programs to deliver the trade and skill needs that this country requires in time for the demand that is shortly ahead of us if we ever are going to get these megaprojects under way? Can you imagine what $1.2 billion spent in trade education would do for this country and the Third World instead of a string of broken down gas stations across this country?
My colleague, the hon. member for York-Peel (Mr. Stevens) pointed out that a co-ordinated approach was in place in the United States to deal with the inflationary pressures within that country. It is important, in addition to recognizing the co-ordinated approach in the United States, to recognize that we need something more for our basic economic structure which, although once similar to the United States, is no longer so.
We have an additional challenge over and above the coordinated approach of the United States. For instance, in Canada we borrow on a short-term basis with floating interest rates that are at a crisis level, and I guess will keep going up until we have strangled all the discretionary spending there is out of our economy.
Homes that should be financed on a 20-year basis are now on a one-year and five-year term, with interest incentives that have kept people rolling them over on a year to year basis,
May 22, 1981

thinking, hoping and praying that interest rates will drop. Only short term and demand money is available to the small and medium-size enterprise sector of Canada, with terrible pressure being exerted on any attempt to improve productivity in those sectors.
In the United States, on the other hand, long-term money at lower interest rates is available for long-term purposes, such as new and more productive plants and new productive capacity. We do not have that edge available to us in Canada, particularly for the small and medium-enterprise sector. In this area, our financial structure is different and it should not, in my opinion, be blindly following the interest rate monetarist lead of the United States. We have a different need entirely.
For over three years there has been an initiative for long, low, long-term interest rates on the bureaucratic merry-go-round between the Department of Finance, and the Department of Insurance and the Department of Industry, Trade and Commerce. Powerful establishment interests have all but smothered this private sector initiative that would loosen up all the savings my colleague from Qu'Appelle-Moose Mountain (Mr. Hamilton) was talking about that are now dammed up in the pension funds, RRSPs and tax shelters of Canada. All those funds need is a covenant of guarantee in order to be released on a 20 and even 30-year-term basis at 0.3 and 0.4 points under prime.
In July 1980 I asked the present Minister of Industry, Trade and Commerce what he was doing to get this initiative out of the tangled web of bureaucracy of the federal government. I remind you it has been there for some three years. That initiative has been denied to the private sector of Canada. This is something that members on both sides of the House should be concerned about and should address.
We have examples of banks lending long-term money in Canada to specified projects at rates well below prime and on a long-term basis. If banks have surplus funds to lend on a preferred long-term basis to some projects, why do we not examine why that is and why it is not available to other good, solid, secure activities in the Canadian market? Why are we so selective? That is the question I ask. The interest rate problem in Canada has and is aggravating our productivity factor. Both the Prime Minister (Mr. Trudeau) and the Minister of Finance know that the only way we can climb out of this national, even world, dilemma is by improving our productivity. Yet the interest rate policies of this government are deliberately working against that important need.
Our productivity in the last year has dropped 1.4 per cent. Some of us in this House do not even understand what productivity is, for I heard the hon. member for Willowdale (Mr. Peterson) needling my colleague, the hon. member for York-Peel, regarding the pride shown in having created 300,000 new jobs in Canada. Not one of those jobs is in an area which creates wealth. It is only jobs which are in the process of adding to the value of goods that can carry the payrolls of those not involved in that economic process. In other words,
Canadian Economy
300,000	jobs are not productive jobs; the same work and goods could be produced in Canada with 300,000 fewer people. That is the burden that government policy is putting on those who do true-value work in this country.
There are games being played that I do not understand. For instance, the federal government is a dominant factor in issuing extendable bonds. They talk about their bonds bearing 16 per cent interest for three years. Those bonds now have an extension for a further ten years at a higher rate of interest. The budget will show the lower rate of interest as the cost of financing, but nowhere in the projections is it reflected what the higher cost down the road will be. These are half-truths and games which we do not need any more in this country if we are going to address the serious problems that should be dealt with on a truthful, factual and thinking basis.
The Minister of Finance and the Bank of Canada are correct in saying that higher interest rates can control inflation. As I said during question period today, it is correct to conclude that government policy is to squeeze the public until there is no discretionary spending left. We heard the Prime Minister's answer to my question today. He does not have the slightest bit of consideration for those people in this country who have put in their work, done their jobs, are in retirement but have absolutely no discretionary spending.
Today all Canadian business in the general stream of commerce is hooked on the short-term changing interest rates which create havoc with our productive capacity and costs, and benefit only the paper pushers and the banks. There is little if any reward left in Canada for those who create jobs and maintain payrolls. All the rewards go to the developers, the industrial landlords, the banks, the chartered accountants, the lawyers-the paper pushers. The guy who has to manage, has to balance things, has his guarantee on the line, risks his home and his lifetime of work, is almost at the point, if not at the point, of no return. There are very serious complications and a lack of incentive today for those capable of managing and creating productive units. In fact, in my opinion, this is rapidly becoming a national crisis.
Labour laws today allow secondary picketing.


An hon. Member:: Oh!


Arthur Ronald Huntington: You bet they do, and there is an inability to adjust to production costs and to market realities with our swinging interest rates. All of these things are creating an impossible situation, even to the point where a non-productive and unsuitable person can hardly be removed from a payroll today.
This government refuses to give the job-creating sector tax points for research and development incentives. Their servants continue to insist that innovators come cap in hand to the bureaucrats who say yea or nay to these projects. Some of them have just too much pride, and most risk takers in the small and medium enterprise sector are just too busy to find the time for this cap-in-hand process. The rules of the game in business are being constantly changed and this damages any chance of improving productivity levels. Intervention in struc-

May 22, 1981
Canadian Economy
ture is the order of the day of this government. Only the oligopolies, the large multinational corporations and the large corporate entities, have the time, the resources and the payroll ability to play the game the government asks of the economic community. The SME sector is really out to lunch.
1 would like for a moment to turn to the NDP rump of the Liberal socialist party of Canada with its phony, negative whining that is motivated, in my opinion, by envy and bitterness, for its members have attacked every significant initiative in this country that is there and waiting to resolve our unemployment and energy problems.
They demand more and more of the system at large, but hinder the very process of providing the wealth needed to improve the social benefits of this welfare society. They mouth shallow platitudes to the small business sector when their masters are the big union bosses who are interested only in the maximum grab from the economy for a minority of the work force. They call for wealth distribution while living off the avails of big Liberal monopolies. In my opinion, members of the NDP speak with a political forked tongue.
Earlier I touched on the fact that our structure is different from that of the U.S., and I discussed the energy factor there. I have discussed the fact that the government is involved in extendable bonds which place an unfair burden and an advantage in the marketplace, and disturb and distort our interest rate structure. The government does not show the cost of the future rate and it takes an advantage away from other forces in the market which might want to attract that capital. In my opinion, these tricky games make it most difficult for the rest of the business community to have a fair share and a place.
This policy is leading to a reduction in wealth and a destruction of the Canadian dream. It can only lead to state control of our economy. When that happens, when that day comes, I suggest that anybody hearing this plea in this chasm should understand that their very basic freedoms are threatened. There is no answer to be found in a welfare state and Sweden is an example of it. We are falling into the same economic trap and dilemma they have already developed for themselves. Please, can we not learn from this?
One thing we might do which would resolve our interest rate problem, our low Canadian dollar problem and our productivity problem would be to seriously study putting between $50 billion and $70 billion into our international monetary fund as a reserve. In that way our interest rates would come down, our dollar value would go up and our cost of living would come down.
One might say that is a lot of money. I tell you it is a pittance compared to what the present policy has robbed from the pension funds, the savings plans and the savings of individuals throughout Canada. I would urge the government to perhaps seek co-operation from this side in taking a very serious look at the delivery of a good, sizeable and usable reserve which would give stability to our interest rates and our international exchange rates.


A. Daniel McKenzie: Mr. Speaker, I am speaking in favour of this motion today. The last sentence asks the Minister of Finance (Mr. MacEachen) to introduce a budget with corrective measures before July 1 or resign. I fully support that.
Our present Minister of Finance has been in Liberal cabinets longer than any of his colleagues, so he is actually more responsible than they for blank-cheque government. He was there, right at the start, for the introduction of blank-cheque government, uncontrolled spending and changing the rules so that there is no longer parliamentary control over expenditures. After listening to some of the Liberals speak today, I suggest they spend a little more time reading the report of the Auditor General and the report of the Lambert commission on how this Liberal government has been running the country and controlling expenditures. Perhaps the term "cutback" is not correct. It really should be eliminating waste and mismanagement within government, and there has been no attempt by this government to get together with the provinces to eliminate duplication and to try to find ways and means to improve control over our expenditures.
There are many examples around us. For example, on the Campeau project over in Hull there was an over-expenditure of $300 million. That is just one little example. Another one comes to mind; the UIC fraud squad was disbanded a number of years ago because the things that squad was coming up with were embarrassing to the Liberal government. That squad was disbanded. It would have exposed fraud costing about $100 million a year. Hon. members opposite did not impress me at all with any of the speeches they made this afternoon.
I am going to speak about some of the untruths of hon. members opposite and point out once again that their word means absolutely nothing. That is old hat, but I will refer to just a couple of points. The Liberals were going to hold increases in government spending under the growth of the gross national product. They have absolutely no intention of doing any such thing. There was to be an industrial strategy, job creation and increased Canadian ownership. Canadian ownership has just been increased through the purchase of Petrofina and by sending $1 billion to Belgium and $1 million to a Swiss bank to pay for the transaction.
My friend, the hon. member for Capilano (Mr. Huntington), spoke about establishing a fund to help small businesses facing high interest rates. Just imagine if that $1 billion had been put to that use instead of being sent into the Belgian economy!
Prior to the last election, the Liberals stated that they would achieve energy security at a fair price. I will go into some detail on that in a moment. That statement is absolute nonsense. There was the promise that gas increases would be kept below 18 cents a gallon, and we now find that the price is increasing as much as 60 cents a gallon. That is another broken promise. The Liberals promised to ensure prosperity through economic growth in every region. Then they introduced the NEP, which is killing economic growth in Canada.
May 22, 1981

The Liberals promised to help first those who need assistance. I am our spokesman on veterans' pensions, and I know the problems of veterans respecting the length of time it takes to process applications and the problems the widows of veterans are having. I know the serious problems rail pensioners are having. This government is doing absolutely nothing about those problems.
These problems have been with us for years, and this government refuses to deal with them. Some rail pensioners receive increases of $4 a year. We get the runaround from the Minister of Transport (Mr. Pepin) and the Minister of Labour (Mr. Regan), who say they will help those who need assistance.
This is not the only government in the world which has not controlled expenditures or seen that money is spent properly. Almost every government in the world is the same in this respect. There have been only four since 1948 which have operated in a responsible manner. The government with the best record of all was the Diefenbaker government between 1957 and 1963. That government was not a blank-cheque government. It was composed of a group of responsible men who saw that we received proper value for our tax dollars, and the inflation rate was held to 1.2 per cent. When the Liberals came into power in 1963, they took the lid off. Mr. Pearson was going to be a big, tough prime minister with respect to a dock workers strike. He was going to show them. He gave the dock workers a huge increase instead of giving them a guarantee of job security which they wanted. Anyone can look at a graph and see that that is when spending took off, and it has never stopped.
This afternoon I picked up an article in The Toronto Sun.


Some hon. Members:: Oh, oh!


A. Daniel McKenzie: Our country is in a disgraceful situation. This article quotes statistics. The Liberals are laughing. They do not like any newspaper which continually exposes this fraudulent government and its mismanagement. The article reads in part as follows:
Metro's eviction rate is soaring and sheriffs offices face hotted-up hostility in their struggle to keep abreast of the growing workload.
Evictions to April 30 are up 10 per cent over last year, when the rate jumped 28.5 per cent from 1979.
I say to the two laughing frontbenchers opposite that that means that thousands of Canadians are being evicted from their homes. When we were in government, we introduced a mortgage credit plan for home owners which would have assisted them greatly, and we would not have had as many evictions today. However, the New Democratic Party and the Liberals were violently opposed to any assistance for home owners. The article goes on to say the following:
Over all, evictions of residential and commercial tenants and evictions resulting from foreclosed mortgages have risen an awesome 23 per cent from the 971 recorded in 1976, the year after Ontario's rent controls were introduced.
Boris Kashuba, deputy sheriff in charge of evictions for York district, yesterday said his eight men are encountering "a more hostile, militant mood" from the public.
Canadian Economy
I guess they are, with these disgraceful interest rates this government is supposed to be reducing. I remember the slick Liberal television commercials during the last election campaign. They were going to reduce high interest rates. Of course, they had absolutely no intention of doing any such thing. This article goes on to say the following:
There were 3,279 evictions last year in Metro compared to 2,550 in 1979.
The sheriffs people are going into suburban areas because of foreclosures on homes whose owners have given up the battle to meet mortgage payments. The article goes on:
Tenants faced with rental arrears are borrowing the money to keep their landlords satisfied because they fear they won't be able to find alternative accommodation.
That is a national disgrace in a country like Canada. It is a national disgrace that people are being booted out of their homes right and left. The Liberal party lied in the last election campaign on television about its intention to lower interest rates. Now that they are in power, they do not do anything about this at all, and they have no intention of ever doing anything about it.
The Minister of Energy, Mines and Resources (Mr. Lalonde) made a ridiculous speech in Winnipeg a week or so ago. He pointed out that the National Energy Program is not primarily an employment program but that it will stimulate employment. What a ridiculous and untrue statement!
We have figures from the oil industry showing that the NEP will cost 60,000 jobs. More than 60,000 jobs may be lost by mid-summer due to the increasing number of oil and gas rigs leaving Canada, the Canadian Association of Oilwell Drilling Contractors has stated. Stan Jones, the executive director of the association, has said that the 50 per cent decline in the number of rigs drilling for oil and gas during the past year has surpassed the worst predictions of that association. Jones blamed the federal government's National Energy Program and its failure to reach an oil pricing agreement with Alberta for creating the dramatic slump in the oil industry.
I do not know why they have not been able to reach an agreement. If I were involved in those negotiations, I would have no hesitation in paying Saskatchewan and Alberta $35 a barrel. I would rather pay them $35 a barrel than pay $50 a barrel to Mexico. Mexican oil is of poor quality. We have to add Canadian oil to bring it up to a proper standard. I would rather pay Alberta and Saskatchewan $35 a barrel than send $45 to the rich OPEC countries to make them richer. The ridiculous NEP does not make any sense at all.
Mr. Jones went on to say that the slowdown threatens to eliminate more than 60,000 jobs on the oil fields and across Canada by midsummer. "In little less than six months the National Energy Program has effectively dismantled more than half of the most dynamic industry in Canada," Jones said.
And that is what the Liberals call progress and creating jobs and self-sufficiency. We are not going to become self-sufficient at all. By 1990, under the government's program, we are going

May 22, 1981
Canadian Economy
to be sending $182 billion more out of the country to buy imported oil. We are only to be 55 per cent self-sufficient. Mr. Jones went on to say that there were 370 drilling rigs working in Canada last May compared with 177 this year, and that most of the rigs have been moved or auctioned off in the U.S.
I do not think the Liberals really understand whose economy they are trying to help. They have certainly been of welcome assistance to the United States.
Here is a great article out of Denver, Colorado. It reads:
Many Canadian based oil companies are setting up operations in the United States because of higher profits.
Profit is not a dirty word in the United States but this government, under its policy of cutting down the cash flow of these small Canadian firms, is making it impossible for them to exist, and that is why they are getting out of this country. The article goes on:
Oil industry sources say that in the last year, more than 100 Canadian companies, mostly from Calgary and Edmonton with a few from Vancouver and Toronto, have established or are planning to establish U.S. offices.
For many of these Canadian companies, the Rocky Mountain states are their first choice.
About 80 of the 100 companies represented at a recent energy conference in Denver were based in Canada, says Dave Lytle, a Canadian oilman recently transferred from Edmonton.
Canadian oil company executives here say they can make up to 10 times more profit from a U.S. oil well.
And when they are making lots of profits they are spending more, paying the shareholders more, and Liberals from Ontario and Quebec had better do a little close checking too of how it is affecting them because from 42 cents to 47 cents of every dollar spent in the oil industry is spent in Ontario, so they are really going to get walloped very sharply, probably in the Sarnia area. The article goes on:
By contrast, they say U.S. oilmen are praising president Reagan. U.S. drilling and new petroleum discovery rates are at a record high and U.S. oil imports have dropped to their lowest level since 1975.
And what are we doing? We are importing more oil under this ridiculous National Energy Program. There is $500,000 an hour leaving this country for Mexico, Venezuela and the OPEC countries to import oil, but the government will not sit down and make a sensible agreement with Alberta and Saskatchewan. Reading further, it is stated that:
U.S. oilmen welcome the arrival of the Canadians although some of them are unhappy with Ottawa's Canadianization policies.
"We need the drilling rigs, the exploration capital and Canadian expertise," says one U.S. oilman.
Well, they can thank the Minister of Energy, Mines and Resources, the Minister of Labour, the cabinet and all the rest of them for assisting the United States economy and helping the United States to achieve self-sufficiency.
I mentioned earlier the Liberal promises to look after the underprivileged and all the rest. I am glad that the Minister of Labour is here today because we have had one exchange on what is going to happen to the rail pensioners in Canada. There seems to be considerable confusion between the Minister of Transport and the Minister of Labour as to who is responsible for showing some leadership in assisting these
people who have really been getting the runaround. A lot of people get the runaround from government. In many cases it is not intentional, but in this case it has gone beyond any reasonable explanation and somebody is going to have to take the initiative. I hope the Minister of Labour will do so. I would just quote to him what some of these pensioners are receiving. Some receive $115 a month, others receive $178, $212, or $224 a month, and they have been trying for years to get a few dollars more and some kind of indexing system.
The Minister of Labour has written letters to different unions to say that he has the matter under study, that he recognizes there is a problem and he is going to be doing something about it. That is what it sounds like in his letters, but when I asked him yesterday in the House about this, he started talking about the Hall report. Well, that report is about five or six years old, and the first of these letters that he wrote to the unions was in May of 1980 and nothing has been done since. They are supposed to be able to have the unions bargain for them, but they cannot because management will not recognize the unions as bargaining agents for the pensioners and we are just going around and around in a big circle. So I hope the minister is present at this committee on Tuesday morning so that we can discuss this in a little more detail, and I hope he will give me some kind of assurance that he will take a close look at this particular problem because it is a real problem. Those who have retired from about 1977 onwards are really not too badly off but prior to that the pensions they receive are absolutely ridiculous.
I just want to comment further on statements on interest rates by the Liberals when they were in opposition. These statements are just unbelievable, especially from the Minister of Industry, Trade and Commerce (Mr. Gray) who said he was going to do something about interest rates and that he would resign if they did not come down. In fact, they have gone up about eight points since he made that statement. And he pointed out:
-because of the harmful effects of high interest rates on consumers, businessmen, especially small businessmen, and the entire economy, there should be an urgent study by the finance committee, where the governor of the bank would come, and the minister of finance-
Well, when we were in government, we established such a committee and they were only half way through their work when we were defeated in the House of Commons by a motion presented by the NDP saying nothing was being done about interest rates. And at that time the Governor of the Bank of Canada was one of the next witnesses to appear.
This is the sort of thing you get from the NDP. One of their spokesmen today was criticising our motion. They have a lot of nerve criticizing our motion or anything we do considering the devious manner in which they operate in and out of the House of Commons. We could very well have found a number of solutions to this problem had that committee been allowed to carry on, and we have asked repeatedly that it be established once again, but the Liberals refused to do anything about it. They have made their point perfectly clear: we are going to have to live with this interest rate problem because they have no intention of doing anything about it. They will tell you they
May 22, 1981

are going to do something about it during an election but once they get in, that is the finish.
Then this great Minister of Industry, Trade and Commerce went on to say to the Minister of Finance:
Mr. Minister, I want to point out to you that your high interest rate policy would slow down the economy: it will mean the loss of thousands of jobs; it will mean increases in the cost of living. It will probably bring the housing and construction industry to a halt, with thousands of jobs being lost in those sectors.
Well, what is he doing about it? He is not doing anything at all.
I see I have one minute left, Mr. Speaker, and I am sure this debate will be brought to a dramatic conclusion by one of the better debaters in the House of Commons, namely, the hon. member for Esquimalt-Saanich (Mr. Munro).


Donald W. Munro: Mr. Speaker, I was wondering whether we had found a new speaker on the floor who was announcing the next speaker in this debate. However, this is a very serious motion we have before us today and I would just like to remind everyone of the following words in the motion:
That this House condemns the government's barren economic policies, which are destroying the stability, productivity and competitiveness of the Canadian economy;
That is the first element, and it is a threefold element. The motion terminates by urging the Minister of Finance (Mr. MacEachen) to introduce a budget with corrective measures before July 1, 1981, or resign.
I suspect the Minister of Finance would be unable to devise the required corrective measures, unless he examined more closely the National Energy Program announced with his previous budget. It was really the pith and substance of the budget, since the budget itself contained very little of a budgetary nature.
What distresses me most in the present circumstances is the unthinking manner in which the government makes use of our national resources, on the grounds that it knows better how to dispose of the national wealth than those who earn it. The wages of wanton extravagance designed to buy voter support are the economic dilemma in which we find ourselves today. Rather than designing an intelligent program to make the country a worthy legacy for generations to come, the government embarked upon a short-term desire to maintain itself in power. It uses the hard-earned wealth of taxpayers to buy their support. I consider it tragic, pitiful, distressing, shameful and verging on treasonous and treacherous for a government to abuse the mandate granted to it in January, 1980.
Our resource base is almost limitless. What policies do we see the government creating to develop the resource base so that we could hand over a flourishing economy to those generations to follow? I could think of two or three examples, but one of the most fabulous-and I use that word in its real meaning-is the coal resources of the Rocky Mountains. Of course, the tar sands and heavy oils are other examples. The
Canadian Economy
government is doing everything to destroy initiative and to prevent the accumulation of individual initiative to bring those resources on stream.
The government believes it can do it better. How does it go about it? It charges Canadians who drive automobiles an extra .8 of a cent per litre or 3.5 cents per gallon in order to buy an enterprise and send SI.5 billion of motorists' funds out of the country. Those who heat by oil, find their heating costs have risen by the same amount. This is being done to acquire an enterprise based offshore, not to produce more energy. It is only to obtain ownership of a resource which has already been found by somebody else. Why is that $1.5 billion not being used to take us closer to energy self-sufficiency?
The government refuses or is possibly incapable of devising a program which meets the legitimate needs of the provinces with resources and at the same time the legitimate need of the central authority for funds for other purposes. It is really the destruction of individual initiative which I deplore so much. No one in the world, certainly no upstanding Canadian, would regret the effort the government has taken to look after the needy, but why must the government look after those who are not in need? There is no need to destroy initiative by robbing Canadians to meet needs which do not exist. We are all prepared to share what we have in order to help those who are unfortunate, but I see no point in contributing a cent to a pension for an E. P. Taylor or even a pension for myself. 1 am prepared to stand on my own feet. I have had good fortune. I have experienced good health throughout my life and hopefully have done an honourable day's work every day I worked, for which I was compensated. I have been able to look after myself and my future. Why should they rob from me to pay me after I can no longer work? This is stupid nonsense. We can help those people who were mentioned by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie), those railroad pensioners who are in need. We are prepared to do that, but the government has overspent to the point of profligacy. I cannot think of a stronger word than that.
If time permits, I would like to cite a few figures and to offer a few ideas because the government has shown in its performance that it has none of its own except to tax and to invent nonsensical projects which do nothing for productivity. Every day the government boasts about the number of jobs it has created. It has not created jobs except those in the public service, and those it has created in plenty. I wonder what is the productivity of the public service at the present time. It used to be good. I say that with pride. I do not think it is as great as it was.
There has been no attempt to curb credit. The whole design of the government is to destroy the initiative of the individual to work and to invest.
If it is true, as the Prime Minister (Mr. Trudeau) has been saying for these last two or three days when he has been attacked about the high interest rates, that there is more spending now than there ever was before, there is spending

May 22, 1981
Canadian Economy
now because of the uncertainties of the future. That is why. The uncertainty is causing this spending. There are surplus funds in people's pockets. There is no question about that. However, they are spending it wantonly. They are not saving or investing. They are not prepared to stand on their own feet because this government has destroyed that incentive which had inspired my father and mother.


Jean-Jacques Blais: A point of order, Mr. Speaker. I was wondering if the hon. gentleman who has just made a statement relating to the inability of Canadians to save would address the phenomenon of Canadians saving at a rate which is twice that of the United States.


Gordon Edward Taylor: That is not a point of order.


An hon. Member:: Good fact, though; interesting, isn't it?


Donald W. Munro: During the last three or four days we have been talking about inflation and interest rates. Bankruptcies are a tragedy. It is a family tragedy and an individual tragedy when a man who has put his heart and soul, his energy, and all his capital into a project finds that with the requirement to borrow further funds he is faced with insuperable charges and that therefore either his house has to go, his farm has to go, or his equipment has to go. Sometimes his wife even deserts him. That is also sad.


An hon. Member:: Save a lot of money that way!


An hon. Member:: Don't believe it!


Donald W. Munro: The breakup of the family unit as a result of these stressful situations brought about by inflation which this government has done nothing to control, and excessive rates, makes me wonder why we should be so ready, under an enterprise known as the Export Development Corporation, the EDC, to provide favourable, advantageous rates of borrowing to foreign governments or companies provided that they spend those funds in this country. I think particularly of shipbuilding.
In a speech about two or three years ago, I mentioned the number of ships built for other countries. I think the figure was something like 30 in five years. They had been built for such countries as Poland, Argentina and France. I understand that a French ship was built not very long ago. Why are we lending these funds to foreign countries when we might just as easily lend them to our own citizens to build our own merchant marine? I just do not understand this. Notwithstanding its name, why should the EDC not provide these credits to Canadian citizens so that we might further their purposes within Canada?
Two days ago, on May 19, I was impressed when the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) offered two or three suggestions as to what this government might do-


An hon. Member:: We want Jarvis!


Donald W. Munro: -in a global manner to assist those who are in trouble because of the inflation or high
interest rates. When the Conservative government was in power, we, of course, did introduce those features in the mortgage interest deductibility plan and also on the energy side. For example, it put a stop to the requirement to pay the added tax which was to be imposed on heating oil. This government has done nothing like that. It seems as though suggestions which come from this side of the House are, ipso facto, untouchable. They should not even be examined.
One of the suggestions made by the hon. member for Qu'Appelle-Moose Mountain was to make governmental provision for loans at a reasonable rate on condition. For example, if the purpose of the loan were to buy a house, if that house were sold at a vast profit within two or three years, then the capital gain on the investment would be shared 50-50 with the government. I think that makes a good deal of sense.
I have one further suggestion to make, and it is not new. It was put in practice at a time which only a few people in this House can remember. I know that the hon. member for Winnipeg North Centre (Mr. Knowles) would certainly remember it. I remember those days, too, as a teenager, when farms were being closed down and farmers were having to leave their land and go somewhere to find relief, the dough. It was a shameful time. I think there is still a lesson to be learned from that period which we might consider. In its briefest terms, it would consist of this: there would be a moratorium on the repayment of capital borrowing. The interest would be repayable. However, there would be a moratorium on capital borrowing. To my way of thinking, this would have two very important effects. It would mean that the money that was out would be earning its keep. The rent on it, even at 20 per cent, could be faced. On the other hand, the repayment of capital would be deferred and the life of the loan would be correspondingly extended at the far end until the interest rates had come down and a refinancing could be arranged.
Besides the advantage to the borrower, the other advantage is that it would take a great deal of capital out of circulation because as capital is returned to the lender, it would be loaned out again. However, if some of that capital could be withdrawn from circulation, then I think the effect on inflation would be catastrophic. The inflation rate would drop because the extent of capital available for borrowing would be reduced by an immeasurable amount. I cannot even conceive the amount.
The one thing which would have to be examined very carefully in putting forward this notion would be the bureaucracy required to examine cases of requests for the moratorium. As I say, it would have to be reviewed, for instance, every six months or every year so that advantage would not be taken of borrowers. The dual advantage of having the borrower able to pay something, to stand on his own feet, pay the interest, and at the same time withdraw capital from circulation would have a very important and depressive effect on the inflation rate. That is one suggestion I put out to the government for its consideration.


Some hon. Members:: Five o'clock!
May 22, 1981


An hon. Member:: We want Jarvis!


The Acting Speaker (Mr. Blaker):: Order, please. It being five o'clock, it is my duty to inform the House that pursuant to section 11 of Standing Order 58, the proceedings on the
Canadian Economy
motion have expired, and accordingly the House stands adjourned to Monday at two o'clock pursuant to Standing Order 2(1).
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, May 25, 1981