1981-02-09

ROUTINE PROCEEDINGS


Mr. Arnold Malone (Crowfoot):: Madam Speaker, under the provisions of Standing Order 43 I should like to propose a motion. When asked on a recent CBC radio program if the Prime Minister's truthfulness, or lack of it, in informing Canadians on constitutional matters affected the NDP's determination to support the Liberal government, the NDP leader was quoted as saying, and I quote: "His particular honesty on this question, frankly, is irrelevant to the constitutional essence of the case", I move, therefore, seconded by the hon. member for Portage-Marquette (Mr. Mayer):
That since, in a choice between truth or Trudeau, the NDP leader prefers Trudeau, therefore the party should formalize their relationship and have Liberals and NDPs conduct all their affairs jointly from now on.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL ENERGY PROGRAM
Mr. Doug Neil (Moose Jaw):: Madam Speaker, I too rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The fact that the Liberal National Energy Program is counterproductive to Canada reaching energy self-sufficiency by 1990, and given the fact that under this program Canada will require 500,000 barrels of oil imports a day by 1990, at a cost of $23 billion annually to Canadian taxpayers, I move, seconded by the hon. member for Winnipeg-Assiniboine (Mr. McKenzie):
That the government scrap its National Energy Program and that the whole question of energy self-sufficiency and energy policy be referred to the Standing
Committee on National Resources and Public Works and that they formulate a sensible and realistic energy policy for Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL UNITY
Mr. Peter Lang (Kitchener):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that the Alberta Federation of Labour unanimously endorsed a resolution to fight western separatism, and I quote: "With all our means and resources to keep Canada strong and united from sea to sea", and in view of the fact that the federation stated that small farmers, business people, working people and pensioners would suffer in the event of separation, I move, seconded by the hon. member for Willowdale (Mr. Peterson):
That this House lend its support to the Alberta labour movement's commitment to Canadian national unity.


Some hon. Members:: Hear, hear!


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


Mr. Clark:: That means they withdraw the National Energy Program.


Some hon. Members:: Agreed.


Madam Speaker:: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion?


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


Madam Speaker:: Does the hon. member for Kitchener (Mr. Lang) want to speak to the motion?


Peter Joseph Lang: Yes, Madam Speaker.


Mr. Nielsen:: On a point of order, Madam Speaker-

February 9, 1981


Peter Joseph Lang: Madam Speaker, I think we are at a crossroads in Canadian history at this time-


Some hon. Members:: It is too late.


Madam Speaker:: Order, please. I am awfully sorry that I did not see the hon. member rising before the motion was passed. Once it is passed, of course there is no point in debating it. So, I recognize the hon. member for Regina East (Mr. de Jong).


DISARMAMENT
[Stage Direction]
SUGGESTION UNITED NATIONS HOLD GLOBAL REFERENDUM-i MOTION UNDER S O. 43
Mr. Simon de Jong (Regina East):: Madam Speaker, 1 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Every day ten nuclear bombs are manufactured. There now exists enough destructive nuclear power to kill every human being some 20 to 60 times over. The nuclear powers are now developing strategies based on the notion that "limited" nuclear wars can be fought and won. A major new initiative for peace is needed. A global referendum on disarmament would focus human attention on this single issue and would create a collective human voice so unique in the history of our race that it would echo in the hearts and minds of all people. Therefore, I move, seconded by the hon. member for Winnipeg-Birds Hill (Mr. Blaikie):
That this House instruct the Secretary of State for External Affairs to move a motion at the United Nations General Assembly calling for a global referendum on disarmament.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


UNEMPLOYMENT INSURANCE
Mr. J. R. Ellis (Prince Edward-Hastings):: Madam Speaker, I rise under the provisions of Standing Order 43. On October 28 the Minister of Finance (Mr. MacEachen) announced a 33 per cent increase in unemployment insurance premiums. The Minister of Employment and Immigration (Mr. Axworthy) confirmed this figure the following day. The fact is that in every wage level but one the increases were higher-most over 40 per cent and some up to 46 per cent. Therefore, I move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That the Minister of Employment and Immigration make a statement on motions setting out the full truth about the new rates and their impact on Canadian workers.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Charles Mayer (Portage-Marquette):: Madam Speaker,
I rise under the provisions of Standing Order 43. Whereas live cattle prices have dropped significantly since the beginning of 1981, causing uncertainty among cattle producers; whereas the cattle industry has long advocated a beef import law to protect both producers and consumers against wide fluctuations in markets; and since the Standing Committee on Agriculture has not yet met during 1981, I move, seconded by the hon. member for Assiniboia (Mr. Gustafson):
That this House instruct the government House leader to consult with the Minister of Agriculture so that Bill C-46, the meat import law, be referred to the House Standing Committee on Agriculture as soon as possible in order that this important legislation be passed post haste.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


KENT ROYAL COMMISSION
Mr. Stan Darling (Parry Sound-Muskoka):: Madam Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. It was my understanding that the purpose of the commission on newspapers, the Kent Royal Commission, was to investigate the conduct of two newspaper chains which were responsible for literally killing two newspapers in this country and virtually carving up the country into spheres of monopoly control-not to squander the money of Canadian taxpayers. Evidently I was mistaken, Madam Speaker. In light of the fact the commission has set up a competition in which it is offering $1,600 in prize money for cartoons to be used ultimately in the commission's report, and which undoubtedly will be slanted in favour of the commission's views, I move, seconded by the hon. member for Prince Edward-Hastings (Mr. Ellis):
That the commission provide the Parliament of Canada with the terms of reference which authorize it to engage in such extravagant behaviour at the expense of Canadian taxpayers' money; moreover, if the commission persists in carrying on with this competition, that the prize money be deducted from the substantial per diem rate of the members of the commission.
February 9, 1981


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIR TRANSPORT
Mr. Dave Nickerson (Western Arctic):: Madam Speaker, I rise under the provisions of Standing Order 43 to seek the unanimous consent of the House to move a motion concerning an urgent matter.
Since the Minister of Transport (Mr. Pepin) seems incapable of making a decision about which group ought to be able to buy Air Canada's interest in Nordair, I move, seconded by the hon. member for Edmonton-Strathcona (Mr. Kilgour):
That the Minister of Transport quickly settle the issue of Nordair's ownership and make sure that when this matter is finalized the interests of Quebec and of the Northwest Territories are adequately protected.


Madam Speaker:: The House has heard the hon. member's motion. Pursuant to the provisions of Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CONSTITUTION
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 Canada is a federation of ten provinces and two territories, and whereas a majority of the provinces favour the patriation of the Constitution with an amending formula only, I move, seconded by the hon. member for Athabasca (Mr. Shields):
That this House recommends, in the interest of Canadian unity, that our Constitution be patriated with the Vancouver amending formula, and that all other changes be made in Canada by Canadians through their Parliament and legislatures.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PENSIONS
Hon. Stanley Knowles (Winnipeg North Centre):: Madam Speaker, under the provisions of Standing Order 43, and seconded by the hon. member for Winnipeg-Birds Hill (Mr. Blaikie), I move:
That this House recognizes that couples 65 years of age or over have to spend one fifth of their income on food, and that food prices are rising at the rate of 14 or 15 per cent, which means that the present system of indexing falls short of enabling senior citizens to remain above the poverty line, and this House therefore calls on the government to implement its promise to provide help where help is needed by making an immediate increase in the rate of the pension paid to Canada's senior citizens.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Charles Joseph Clark: Madam Speaker, my question is for the Secretary of State for External Affairs. According to the minister's minutes of his meeting of December 19, the minister said:
In cabinet we are extremely attached to the charter. If we had to, we would put it ahead of patriation.
Was the minister speaking on behalf of the government when he made that statement?


Hon. Mark MacGuigan (Secretary of State for External Affairs):: Madam Speaker, the statement, "In cabinet we are extremely attached to the charter." is certainly self-evident. The other statement was my interpretation of people's views. As 1 said the other day, it is not a matter which has ever been discussed in cabinet, to the best of my knowledge.


Charles Joseph Clark: Madam Speaker, I would then like to put a question to the Deputy Prime Minister. Is it the position of the Government of Canada that, given a choice, as suggested by

February 9, 1981
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the Secretary of State for External Affairs, the Government of Canada would prefer a charter to patriation?


Hon. Allan J. MacEachen (Deputy Prime Minister and Minister of Finance):: Madam Speaker, we have not been faced with that choice, and we do not expect to be.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, my question is for the Deputy Prime Minister or the Secretary of State for External Affairs. Since the Secretary of State for External Affairs gave a representation on behalf of cabinet, and on behalf of Canada, which was not supported by his government, has the Government of Canada sought a means, since that time, to indicate that the Secretary of State for External Affairs was speaking something other than the view of the Government of Canada when he made that representation?


Mark R. MacGuigan: Madam Speaker, at the time I spoke 1 was involved in active discussion. My expression was rhetorical, and well known to be such.


Some hon. Members:: Oh!


Erik Nielsen: Tongue in cheek!


Mark R. MacGuigan: The purpose of my comment was to indicate how devoted the cabinet and this side of the House are to the charter of rights.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Madam Speaker, we now have the Secretary of State for External Affairs admitting the accuracy of the quotations in the minutes which were a record of his conversation of December 19. These are minutes which have been published, which he has seen, which he has indicated, in one particular, were cast not as reflecting the government's view but as reflecting only his own view. We have heard before that some of the positions uttered by the Government of Canada and on the public record were less than candid, tongue in cheek, or rhetorical. Will the Secretary of State for External Affairs, knowing that the people of Canada are interested in knowing the whole truth about the government's position on this matter, issue an edited version of those statements indicating which are rhetorical, which are tongue in cheek, which are less than candid, and which few are the truth?


Some hon. Members:: Hear, hear!


Mark R. MacGuigan: Madam Speaker, I believe I detect some rhetoric on their side as well.


Some hon. Members:: Hear, hear!


Mark R. MacGuigan: As we have said repeatedly, Madam Speaker, we have no intention of publishing the minutes of those meetings. One cannot draw any conclusion with respect to the whole minutes from the excerpts which the hon. gentleman claims I have now confirmed. The fact is, that does not lead to any conclusions about the rest of the minutes.


DETAILS OF TELEPHONE CONVERSATION BETWEEN CANADIAN AND BRITISH HOUSE LEADERS
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, I have a supplementary question for the Secretary of State for External Affairs, who in exchanges in the House, both on October 31, 1980, and November 3, 1980, advised the House that he was fully aware of all the details of a telephone conversation between the then British House leader and his own government House leader. Was this the first time when the minister was made aware of the difficulties which the British government felt it would encounter with the constitutional proposals, or is it his contention that he was not advised of these problems until his meeting on November 10, 1980, with the then British House leader, Mr. Stevas?


Mark R. MacGuigan: Madam Speaker, the British government made it clear in the first conversation I had with them that there were difficulties in the way. They also made it clear that, despite those difficulties, they would do what they were required to do by convention.


Flora Isabel MacDonald: Madam Speaker, to follow up on the question of what was actually told to the minister, following the November 10 meeting in London, the Secretary of State for External Affairs told the news media, according to a CP wire story, that when this matter was discussed the only possible problem was "one of timing". However, the Canadian government telex report on that November 10 meeting noted that the British House leader clearly stated to the minister that passage at Westminster would be dependent on how soon the measure reaches London and what it contained. Which of these two reports is being given tongue-in-cheek or which one is being stated as rhetorical? Can the minister tell us which of these two versions is the truth?


Mark R. MacGuigan: Madam Speaker, as we have stated many times, the spokesmen of the British government have frequently referred to the difficulties they will encounter as to how soon they can pass our resolution through their House. Obviously there are some difficulties with respect to some members of their backbench. For the British government it is a question of when this resolution can be brought forward in the House, and, therefore, a question of timing.


Flora Isabel MacDonald: Madam Speaker, my final supplementary question comes back to the question which I have already asked. Why is the minister afraid of telling which of these two versions that have been presented is the true one?


Mark R. MacGuigan: Madam Speaker, I am not afraid of anything that has gone on the record.


Flora Isabel MacDonald: Except the truth.
February 9, 1981


Mark R. MacGuigan: We have taken the policy that we will not confirm statements which the opposition or others are publishing, whether it be word by word or line by line. There is the diplomatic tradition that such things not be revealed.


Charles Joseph Clark: You just broke that tradition.


INDUSTRY
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I have a question for the Minister of Industry, Trade and Commerce. It is with regard to the announcement of the deal between the government and Massey-Ferguson. It has now become apparent that British, French, German and Italian banks sought and received assurances from Massey-Ferguson that Massey-Ferguson would continue to invest heavily in their respective countries. Could the minister explain the amount of the underwritten shares which each of the governments of these countries undertook in order to assist those countries and Massey-Ferguson in maintaining its operations in each of those countries?


Hon. Herb Gray (Minister of Industry, Trade and Commerce):: Madam Speaker, in so far as I am aware, the government of Britain through its export guarantee board undertook to guarantee some S90 million in preferred shares which the British banks are taking in lieu of the debt which is owed to them by Massey-Ferguson. I shall have to check with respect to the other participants. With respect to the federal government and the government of Ontario, our decision was linked with the benefits to Canada of Massey-Ferguson continuing its operations and becoming a stronger and more viable entity in terms of production and jobs for Canadians.


GUARANTEES RESPECTING CANADIAN EMPLOYMENT
Ian Deans: A supplementary question. Madam Speaker. In return for the British guarantee Massey apparently assured them that there would be no redundancies in the Coventry plant, in the Manchester plant, or in the Perkins diesel plant in Peterborough. Could the minister point to the agreement and show this House the clause that guarantees there will be no lay-offs or dislocation of employment in Canada as a result of the commitment we have made?


Herbert Eser (Herb) Gray: Madam Speaker, we have obtained a commitment with Massey with regard to the upgrading of their operations and employment in this country, including the maintenance of employment at existing operations. The exact wording will be available to the House and the public as the details of the agreements are worked out and reduced to formal written form. There is certainly nothing in our agreement with Massey or with the province of Ontario that is intended to lead to any
Oral Questions
reduction in employment. Our objective and our commitment are to do just the opposite.


Ian Deans: Madam Speaker, am I to understand that the government has committed itself to a $200 million loan guarantee and that there is not yet a piece of paper on which the commitments of Massey are put down? We do not know whether they will maintain employment and we do not know how much they are going to invest in this country. They have committed themselves to investment in other parts of the world but this government has absolutely nothing other than a lot of hot air.


Herbert Eser (Herb) Gray: Madam Speaker, it is obvious from the hon. member's question that, if there is hot air, it is coming from him and not from this side of the House.


An hon. Member:: Call another press conference.


Herbert Eser (Herb) Gray: It shows how interested his party really is in maintaining jobs, and increasing jobs for Canadians. If we had not moved, there would not be, over the next couple of weeks, either the existing jobs in Massey or the increase in jobs that our agreement is going to bring about. Hon. members opposite do not care about that. Hot air, that is their concentration of effort.


An hon. Member:: Those are your friends-the NDP.


Herbert Eser (Herb) Gray: Madam Speaker, first of all we are not providing loan guarantees but guarantees of the capital risk of a new equity investment. What we have agreed to, and what the government of Ontario has agreed to, is based on definite commitments with respect to production and employment in Canada. These are recorded in written form and they will be recorded in contractual form. This will be made available to the House and to the public as soon as this aspect of this activity is completed. I might say that I should like to see this done as soon as possible so that my hon. friend's concerns can be shown to be groundless.


FEDERAL GOVERNMENT'S PARTICIPATION IN EXPORTATION OF BRITISH COLUMBIA COAL TO JAPAN
Mr. F. Oberle (Prince George-Peace River):: Madam Speaker, my question is for the Minister of Transport and it is in response to the successful conclusion of a major export deal for northeast British Columbia coal to Japanese markets. While only sketchy details are available at this point, 1 should like to ask the minister what the extent of the federal involvement is for the procurement and cost of the infrastructure that is required to facilitate the shipment of that coal?


Hon. Jean-Luc Pepin (Minister of Transport):: Madam Speaker, I am not in a position to be very specific on this subject this afternoon but information will be available in the

February 9, 1981
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coming days. Federal participation takes three forms. The first is the contribution to the site preparation, the offsite services, and the access road. Then there is a guarantee of $3 per tonne throughput charge at the port. Third, there will be considerable participation by CN in the improvement of the main rail line. The very specific details will come out, as I said in the coming days. It is difficult to give the degree of subsidization at this point because of the change in the volume of the sale, but some of it will be on a non-compensatory basis, for example, the access road will be paid by DREE, but most of it will be on a cost recovery basis.


Frank Oberle: A supplementary question, Madam Speaker. It is said that up to $1 billion will be required by the two governments, that of British Columbia and of Canada, to put the necessary infrastructure in place, townsites, rails, roads, port facilities and so on. That is a significant expenditure of money. Is it the minister's intention to table in the House the extent of the federal involvement and say whether it is the intention of the federal government to recover its investment in the various components of this massive scheme?


Jean-Luc Pepin: Madam Speaker, in due course I am quite sure we will. By way of illustration, CN will probably invest $300 million in this, maybe even more, for the purchase of trains, strengthening of lines, and so on.


An hon. Member:: Double tracking.


Jean-Luc Pepin: But all of that is on a full cost recovery basis. As my hon. friend is interested in knowing the full extent of the non-cost recovery aspect, I can advise him this should come up within the next few weeks.


FISHERIES
Hon. John C. Crosbie (St. John's West):: Madam Speaker, my question is for the Minister of Fisheries and Oceans. I am sure the minister is aware of the serious unemployment in Newfoundland. Today there are 32,000 officially unemployed. Is he aware that one of our major fishing companies, Fishery Products Limited, is sending out notices to 700 employees informing them that they will be laid off in two weeks' time because they cannot get access to fish stocks, that the northern cod allotment for the offshore fleet, which 1 think is 47,500 tonnes, will all be caught within the next two weeks, and as a result, there will have to be serious lay-offs in the Newfoundland fishing industry?
Can the minister advise the House what steps he is taking to see that the raw material is made available to the fish-catching fleet to keep the important fishing industry in operation in Newfoundland as well as in the rest of the Atlantic provinces?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, I would have thought that a company as important as the one to which the hon. member referred would not have issued lay-off notices on the basis of a press story. Second, I would have thought that, in a situation where the whole argument for increased quotas was based on year-round plants having year-round fish, major companies would not have opened what are, by definition, very seasonal plants, and in some cases put on a double shift-in other words, catch all the fish they could in a matter of a few weeks and then immediately expand the processing operation, which endangers the viability of those plants which have become year round, which are dependent on year round supply.
Those are the problems with which we are trying to deal. I tried to reach a consensus with my Atlantic coast provincial counterparts at a meeting last Friday. There was no consensus, so we will have to try to make the best management decisions we can.
I would have to say that the arguments made to preserve quotas on northern cod, on the basis for the need for market, on the need for year round plants, and on the basis of keeping crews busy 12 months of the year, are shot to pieces by actions of the very companies which were asking for a 12-month supply of fish, by agreeing they should take it in a matter of three or four months.


John Carnell Crosbie: Madam Speaker, I am not interested in arguments. The minister has jurisdiction over the fishery, and the firm, Fishery Products Limited, is a leading firm and has been for 50 years in the Newfoundland fishery with year-round plants and a huge trawler fleet. The company has two trawlers under construction now, specially ice strengthened, at Marys-town, worth $7 million each. That demonstrates its interest in the future of the fishery.
My question to the minister is this: what will the minister do to see that companies like this one, which has thousands of employees, will be able to keep those employees working this year in fish processing operations in Newfoundland, which has the worst unemployment in the whole of the Dominion of Canada? That is what we want to know. What can the minister do? The minister has jurisdiction. He is snubbing the provincial minister of fisheries day after day.


Madam Speaker:: Order, please.


John Carnell Crosbie: What action is the minister going to take?


Roméo LeBlanc: Madam Speaker, obviously the hon. member, who has been travelling, has not been following the debate.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: Where have you been?


Roméo LeBlanc: It is to protect the supply of fish for those year-round plants that I have asked the companies to exercise-


Charles Joseph Clark: That are putting people out of work.
February 9, 1981


Roméo LeBlanc: -some control over their fishing efforts and to make sure that, come next August or September, they do not all claim an increase in the quotas on the basis of running short of fish. 1 think plants which have been open, which are by their nature seasonal plants, or plants which have put in second shifts, as many of them have, in fact are showing that irresponsibility which I have been trying to master for some time.


An hon. Member:: So much for the fishermen.


Roméo LeBlanc: You would not know a fisherman from a cow.


Some hon. Members:: Oh, oh!


An hon. Member:: We know the flim-flam.


Charles Joseph Clark: Romeo baloney.


ASTRA TRUST
Mr. Bob Rae (Broadview-Greenwood):: Madam Speaker, in the absence of the Minister of State for Finance I have a question for the Minister of Finance concerning Astra Trust which was chartered by the federal government in 1976 and started operating in 1977. I am sure that it will be of some interest to the House to know there were already so many problems with this company, and with associated companies also controlled by Mr. Montemurro, that in 1978 the federal Superintendent of Insurance was attaching conditions and only renewing the trust company's charter for three-month periods.
My question to the minister is this: why did it take the department two years between 1978 and 1980 to find out the nature of the scam which was involved? How was it possible for the department to continue to allow investors in southern Ontario to invest in a company when it knew in 1978 that this operation was fishy?


Allan Joseph MacEachen: Madam Speaker, as the hon. member knows, the minister of state has been handling this particular aspect of the department's operations. I would suggest that he will get more satisfaction if he were to ask his question of my colleague who will be in the House tomorrow.


Bob Rae: Madam Speaker, in light of the answers which both the hon. member for Burlington and I have received from the Minister of State for Finance, I am not sure I agree with the minister that we are getting very much satisfaction from any minister in the government dealing with this problem.


An hon. Member:: It is a cover up.


Bob Rae: If the minister is not interested or aware of this problem, believe me, Madam Speaker, he will be interested and aware of this problem by the time we are finished dealing
Oral Questions
with it, because it involves a very important problem for many investors.
My question for the Minister of Finance is this: how was it possible for loans to have been made to a company called Canadian Recycling Ltd.-it is rather an appropriate name in light of the circumstances-and for loans to have been made to many of the directors of Astra Trust, and to individuals linked for ten years to organized crime? How was it possible for those loans to have been made over two and three years, between 1977 and 1980, and for the department to do nothing to warn other innocent investors in this company that there was something dreadfully wrong with this operation, as well as with the operation of Re-Mor Mortgage, and C & M Consultants Ltd., and Canadian Recycling, the four companies involved in this operation?


Allan Joseph MacEachen: Madam Speaker, I never implied that the hon. member would get satisfaction in complete perfection. I just said that I thought he would get more satisfaction from my colleague than from me-


An hon. Member:: What is new?


Allan Joseph MacEachen: -and 1 am certain of that in light of the answer I am now going to give to the hon. member, which is the same as the former one.


Some hon. Members:: Oh, oh!


COMMUNICATIONS
Mr. Jesse P. Flis (Parkdale-High Park):: Madam Speaker, my question is for the Secretary of State and Minister of Communications. In view of the fact that Canada will face a $4 billion to $5 billion annual trade deficit in office electronics by the year 1985, and in light of the fact that the minister has stated that the challenge of making significant inroads into the burgeoning multi-billion dollar office electronics market is beyond the capability of any single Canadian firm, would he indicate to this House what appropriate steps the government is taking to make the electronics industry more competitive and to increase its exports by winning world markets?


An hon. Member:: He has already announced it.


Mr. Andre:: ElectroCan.


John Carnell Crosbie: ElectroCute.


An hon. Member:: ChryslerCan.


Hon. Francis Fox (Secretary of State and Minister of Communications):: Madam Speaker, I am pleased to reply to the very important question raised by my colleague. 1 would point out that a few months ago I announced the federal government's intention, particularly through the Department

February 9, 1981
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of Communications, to launch an office communications program. This is a matter of vital interest not only to my department but also to the department of my colleague, the Minister of Industry, Trade and Commerce. At that time we indicated a total possible commitment on the part of the government of some $12.5 million. 1 was pleased to announce on Friday a commitment by the government to the Telidon program amounting to $27.5 million.


Some hon. Members:: Hear, hear!


Francis Fox: You know yourself, Madam Speaker, that this is a technology in which Canadians have a leading edge-


Some hon. Members:: Order.


Some hon. Members:: Speech.


Francis Fox: -ahead of both our French and English competitors. We feel that with this added injection into the Telidon program-


Some hon. Members:: Order.


Francis Fox: -combined with the additional $100 million which industry intends to contribute, we will have a very successful electronics program in this country.


FISHERIES
Mr. Benno Friesen (Surrey-White Rock-North Delta):: Madam Speaker, my question is for the Minister of Fisheries and Oceans. As he knows, there are many very worried herring fishermen out on the west coast owing to the government's lottery, presumably the computerized lottery program, for entry into the herring roe fishery. I should like to ask the minister whether all bona fide herring fishermen will automatically qualify for entry into the roe fishing season and whether native fishermen or any other groups will be exempted from the lottery or given any other kind of classification in the lottery.


Roméo LeBlanc: Madam Speaker, I fail to understand what the hon. member means by a lottery. As he knows, the herring season in 1979 was the scene of considerable disorder, and in fact of threat to the herring stocks because of pressure and the lack of discipline on the spawning grounds.
In 1980 there was a strike and the herring stock which was taken was much lower than usual, and therefore there was a conservation aspect to this. But in 1981, according to the reports of the biologists, we had to question very seriously if the type of management breakdown which had occurred in 1979 was tolerable and, in fact, if there should be a herring roe fishery at all. We decided in favour of the herring roe fishery,
considering that salmon and herring roe fishermen have had rather difficult seasons. However, we did not institute a lottery. We tried to give fishermen a choice as to the zones in which they wanted to fish so as to ensure some order, and that is still the subject of some discussion. I do not understand what the lottery issue is all about.


Benno Friesen: Madam Speaker, if the minister does not know anything about the lottery, he is way behind the fishermen out there who know all about the lottery system. Conceding the fact that a conservation program has to be established, and the fishermen are the first to agree to that, I should like to ask the minister whether he recognizes the fact that a conservation program is necessary and that new regulations had to be put in place. Since he had them in place in 1980, why did he not use them instead of introducing a new program? The fishermen were already prepared and geared for those regulations. Why did the minister not do that, instead of instituting a new system in 1981 which was totally unproved? Furthermore, I should like to ask the minister whether he is planning to use the present system with regard to other stock, such as salmon, later on, for the fishermen.


Roméo LeBlanc: In answer to the last question, I have not heard this suggestion, although there are those who advocate that area licences might make sense. That is one of the items on which, 1 hope, professor Pearce in his report will give us some suggestions.
Maybe the hon. member confuses the lottery with multiple choice. What the fishermen were asked was: "If you are given an area licence, what is your first, second and third choice?" From what I hear, practically everyone was granted his first choice. I do not think the hon. member would advocate a drastic change in the regulation in the middle of a strike, which was the case in 1980, but I also do not understand his view that what was supposed to be good in 1980, for some reason does not seem to be good in 1981. I should like to hear his arguments on that.


CULTURAL AFFAIRS
Miss Pat Carney (Vancouver Centre):: Madam Speaker, my question is addressed to the Minister of Communications and it deals with the mounting criticism of the federal cultural policy review committee which has succeeded the informal advisory committee which was set up by his predecessor, the Hon. David MacDonald. In view of the fact that both the deputy minister and the assistant deputy minister responsible for cultural policy are members of the review committee, how can the minister assure the House that the committee will evaluate fairly and properly the performance of the government on cultural issues?
February 9, 1981


Francis Fox: Madam Speaker, I think the important role of the federal cultural policy review committee is to address the problems of the future, and I think it is a good idea and advisable to have some of the officials of the Department of Communications as members of this committee. I think that if the committee felt cut off from the people who have been administering the federal cultural policy over the years, this would not allow it to have all the information it requires to come to concrete proposals. 1 think it is a sound idea that the committee be able to benefit from the experience of the department and have access to the feelings of departmental officials on ongoing programs, and be able to develop, with the concurrence of departmental officials and with their advice, a sound cultural policy for the future.


Pat Carney: Madam Speaker, my supplementary question is directed to the same minister. If we extended his logic, we should have every single civil servant in the Department of Communications on the Applebaum committee. May I point out that the Canadian conference of the arts has publicly stated that "Many members of the arts community and the media are skeptical about the credibility and independence of the committee process." In view of the fact that the review committee will be holding only five regional public meetings, how can the minister assure the House that members of the arts community who wish to participate in the inquiry process will have the opportunity to do so?


Francis Fox: Madam Speaker, I think it is giving very little credit to my immediate predecessor, who is from the party opposite and who named many members of the federal cultural policy review committee, to intimate that they would have so few qualifications as to be completely dominated by two of my civil servants. It is quite the contrary. I agree with my predecessor that the people who were appointed were eminent people, people of high quality who had a great contribution to make.
As to the number of hearings, I believe that the committee members are intent on seeing to it that they are able to communicate with as many Canadians as possible. 1 am sure that every member of the cultural community and every member of any professional association knows very well how to communicate and to make his point of view known to that committee. Indeed, 1 think it is an excellent committee. Of course it has been strengthened since we took office, and I am looking forward to the report of that committee.


CANADIAN RADIO-TELEVISION AND TELECOMMUNICATIONS COMMISSION DECISION TO STOP SERVICE PROVIDED FOR DEAF TELEVISION VIEWERS
Hon. Perrin Beatty (Wellington-Dufferin-Simcoe):: Madam Speaker, my question is for the Minister of Communications who will be aware that 1.5 million Canadians who suffer from
Oral Questions
a hearing disability were shocked a few days ago to learn that the CRTC had ordered Rogers Cable in Toronto to stop the practice of decoding the closed captioned programs for the deaf and showing them on a special channel to provide a service for hearing-handicapped Canadians. What action does the minister propose to take to ensure that that service is restored immediately?


Francis Fox: Madam Speaker, I sympathize completely with the sentiments expressed by the hon. member. As he knows, the service was closed down by CRTC because the licence issued to Rogers Cable TV apparently did not include the authorization to carry such a service. The chairman of the CRTC has decided to hold a public hearing on the matter as soon as possible, and the date of March 10 has been set for hearings in Toronto on this subject. I trust that the matter at that time will be settled by CRTC to everybody's satisfaction.


Henry Perrin Beatty: Madam Speaker, the minister will know that his answer is certainly not satisfactory for the people who have been deprived of that service and who will continue to be deprived until the CRTC reverses the decision it took. In view of the fact that the minister, on several occasions over the course of the last several months, has indicated that a Telidon mini-decoder will be available for deaf Canadians within the next few months, can the minister tell the House exactly when that mini-decoder will be available on the market?


Francis Fox: Madam Speaker, of course the short answer to that question is, as soon as possible. My officials inform me that they have received some proposals from industry which they are at present evaluating. 1 should also point out to the hon. member that part of the $27.1 million which I announced last Friday to support the Telidon program is for research and development, and a portion of that is earmarked for developing an improved Telidon captioning decoder.


CANADIAN BROADCASTING CORPORATION
Mr. Alexandre Cyr (Gaspe):: Madam Speaker, my question also is directed to the Secretary of State and Minister of Communications. Can the minister tell the House whether it is true that Mrs. Lise Payette is no longer actively involved in politics with the Parti Quebecois and has resumed her political activities at the CBC French network to promote Quebec's independence? If so, will she rate the red carpet treatment from the minister or the president?


Francis Fox: Madam Speaker, I must say to the hon. member that I have no indication about this. Mrs. Payette did not tell me what she intends to do in the future. I have no idea

February 9, 1981
Oral Questions
whatsoever whether she wants to apply for a new position with the CBC French network. The hon. member may not know this but I can tell him that the CBC now has a well-established practice whereby people who have been active in politics are not allowed to play host on public affairs programs for a period of about three years.


CANADIAN ARMED FORCES
Mr. Terry Sargeant (Selkirk-Interlake):: Madam Speaker, my question is directed to the Minister of National Defence. On January 26 the minister told this House that the reports of the incident in 1966 at CFB Gagetown were available to everyone, but in a conversation with the minister's office last week I was told that the document I received from the United States government, because of freedom of information in the United States, could not be released by the Canadian government. 1 wonder if the minister could square his earlier statement that this report is not secret with the more recent admission that, in fact, the report cannot be released by his government.


Hon. J. Gilles Lamontagne (Minister of National Defence):: Madam Speaker, with respect to this question it is normal for me to state again that governmental documents which come from other countries are subject to authorization by those countries to release their own documents. At the same time we would not like the United States to release some of our documents when we have an agreement with that country with respect to such documents. I think it is just normal that the United States has the right to make its own documents available. As far as 1 am concerned its documents belong to it and not to Canada.


Terence James (Terry) Sargeant: Madam Speaker, I do not find that a very satisfactory answer, for obvious reasons.
The minister has gone to great lengths to deny that this test was related to the development of chemical warfare agents destined for Vietnam, but in a Canadian document entitled "Vegetation Control at CFB Gagetown" it is stated, and 1 quote:
U.S. interest is understandable. A great amount of effort has been expended to find some means of destroying the jungle canopy of Southeast Asia.
Will the minister now admit that, beyond a shadow of a doubt, National Defence officials knew in 1966 that they were assisting in testing, the results of which would be put to direct use in the U.S. effort in Vietnam?


Mr. Lamontagne:: Madam Speaker, it is very easy to impute motives in discussing problems such as this one. I want to
assure my hon. colleague opposite, as energetically as I possibly can, that as far as we were concerned that experiment was in no way related to the Vietnam war. I feel that since this matter was brought up, Madam Speaker, it has been established that we had overgrowth problems; we have documented proof that the problem existed already in 1964, that studies were made later on, in 1968 and 1969, and that some of those problems still remain at Gagetown. Therefore, linking this experience with the war in Vietnam is absolutely wrong.


STATEMENTS BY MINISTER RESPECTING AGREEMENT WITH ALBERTA
Mr. Jack Shields (Athabasca):: Madam Speaker, my question is directed to the Minister of Energy, Mines and Resources. On a recent tour of northeastern Alberta, including Bonnyville, Cold Lake and Grand Centre, the minister made the following statement: "There will be a resolution of the constitutional and energy problems within months".
Then later, speaking to people in Grand Centre, the minister said, and I quote: "Those who have put their hearts and their money into these projects won't be disappointed much longer".
Will the minister report to the House what development regarding an energy agreement with Alberta has taken place to allow the minister to make these optimistic statements or, indeed, does he have any reason to make these optimistic statements and, if so, how many months does he think it will take before an energy agreement will be reached?


Hon. Marc Lalonde (Minister of Energy, Mines and Resources):: Madam Speaker, I hope very few months indeed, but obviously this is not dependent only on the federal government. I can report to the hon. member that there have already been two meetings at the deputy ministerial level, and there have been further meetings at the level of other officials. I have indicated to the government of Alberta that we are ready to meet at the ministerial level when it is ready and as soon as it is willing. I am still waiting for an answer in that respect.


Mr. Paproski:: Humble Lalonde.


Jack Wendele Shields: Madam Speaker, is the minister's statement then to be taken in northeastern Alberta as being less than candid, like statements of the Prime Minister and the Minister of Justice?


Marc Lalonde: Madam Speaker, on the contrary, that statement is totally candid. The only limitation to an agreement is the willingness or unwillingness of the government of Alberta to come seriously to the table. If it did that, we could reach an agreement soon.
February 9, 1981


VETERANS AFFAIRS
Mr. Dan McKenzie (Winnipeg-Assiniboine):: Madam
Speaker, my question is directed to the acting Minister of Veterans Affairs. Because of the phased-in lowering of the 48 per cent disability entitlement in Bill C-40, approximately 1,500 widows became eligible for pensions in 1980. As of December, 1980, the Department of Veterans Affairs had heard from fewer than one third of these widows inquiring about their eligibility.
Can the minister tell the House if he has formulated a plan for contacting these other widows to make them aware of the fact that they now have a pension entitlement?


J. Gilles Lamontagne: Madam Speaker, I understand the concern of the hon. member about the question of veterans' widows' pensions. I think the department is doing everything it can to contact these widows. Information is being made available in different parts of the country to make these people aware of the possibility of pensions for them.


A. Daniel McKenzie: Madam Speaker, can the minister assure the House that because of the relatively simple procedure for establishing the eligibility of these widows, their pension applications will be processed with a minimal waiting period? The minister says he thinks the department is taking action. Will he make sure that the department is taking action?


Maurice Lamontagne: Madam Speaker, 1 will make sure that what the hon. member is asking will be done within the least possible time.


NATIONAL HARBOURS BOARD
Mr. Maurice Harquail (Restigouche):: Madam Speaker, my question is for the Minister of Transport. In view of the long awaited information with respect to the ports policy which was introduced a couple of years ago, in view of the difficulties we are experiencing at the two ports in northern New Brunswick at Belledune and Dalhousie-but specifically Belledune-and in view of the negligent attitude and inattention on the part of the National Harbours Board, particularly the gentleman at Saint John who is responsible for that port, I wonder if the minister could indicate when we might receive some information in this House regarding the long-awaited news with respect to the direction of ports, and if he could indicate that there will be some action taken with respect to having the National Harbours Board bring forward the study which was commissioned a year and a half ago on the port at Dalhousie and the port at Belledune.
Oral Questions


Jean-Luc Pepin: Madam Speaker, with respect to the ports policy as a whole, progress is being made now. The policy should be ready for cabinet study in the next month or so, or possibly even earlier than that.
With respect to Belledune and Dalhousie, I will consult the National Harbours Board and make a personal report on that subject to my friend.


IMPORTATION OF JAPANESE AUTOMOBILES-INQUIRY RESPECTING QUOTAS
Mr. John Gamble (York North):: Madam Speaker, my question is directed to the Minister of Industry, Trade and Commerce. The minister will know, as a result of a recent meeting he had in Canada with Japanese minister Tanaka, that he was unable to negotiate any arrangement with the Japanese for the fabrication of Japanese automobiles in Canada. He will also know that for some long time now the Japanese have been very successful, through non-tariff barriers, in excluding the importation into Japan of Canadian manufactured goods. He will also recognize that the Japanese share of the North American automobile market has been increasing apace.
In light of these facts I would like to ask the minister whether it is possible that the government is now considering the imposition of quotas on the importation of Japanese automobiles to Canada.


Herbert Eser (Herb) Gray: Madam Speaker, when it comes to investments by Japanese companies in North America, including Canada, it should be borne in mind that the Japanese automotive industry is not owned or controlled by the Japanese government. It is in the private sector. In spite of this, and I quote from the official press communique of Mr. Tanaka's visit: "Mr. Tanaka said his government was sympathetic to these Canadian objectives," one of them being increased Japanese sourcing of parts in Canada and investment in automotive facilities, "and would encourage Japanese automotive manufacturers to respond positively."
Also, during Mr. Tanaka's visit he confirmed that the agreement between the United States and Japan on access to sourcing by the Japanese telecommunications entity would be available to Canada on a non-discriminatory basis thus making available to Canadian companies the opportunity to bid on some $3 billion worth of manufactured goods. In spite of the continuing problems my hon. friend has mentioned, I think we are making progress.
When it comes to the matter of quotas on Japanese vehicles, the U.S. International Trade Commission, in spite of the higher levels of penetration of Japanese imports into that country, did not find injury nor did it recommend quotas.

February 9, 1981
Privilege-Mr. Stevens
Therefore, I think our first priority should be to continue to seek a much higher level of Canadian content in Japanese vehicles sold in Canada, North America generally and in world markets, and continue to monitor the situation in light of what U.S. authorities might do and the level of Japanese imports. Increasing Canadian content should be our first priority.


John Albert Gamble: Madam Speaker, the minister will recognize the non-tariff barriers of which I spoke are supported by the government of Japan and encouraged by that government. They have been very successful for years in keeping out the importation of Canadian manufactured goods. The minister will also recognize that France has imposed a quota. There is a bill in the U.S. Congress to impose a quota on the importation of these cars. I should think the minister would be very concerned about the interest of Canadian auto workers, some of whom live in his own riding. When will the government take it upon itself to form a lead in this area rather than act like a jellyfish able to be pushed around by a foreign government and its commercial interests?


Herbert Eser (Herb) Gray: Madam Speaker, the Japanese government, like other members of the GATT, did agree to codes to move the level of non-tariff barriers. I am sure we expect Japan to comply with that code to a no lesser extent than any other member of the GATT. With respect to the matter of quotas, if the U.S. Congress legislates quotas, in my view it will be necessary for the Canadian authorities to consider taking parallel action within our own legal framework and in light of our own circumstances. That is why I said we are watching the Canadian situation and the American situation very closely. Because we have an integrated industry on a North American basis, I think we must be very careful about the timing and extent of our actions.
At the present time 1 think our priorities, in the interests of Canadian workers, should be to strive to increase the level of Canadian content in Japanese vehicles sold in North America and around the world and, in the meantime, to keep in touch with the situation so that we are ready to take other action in the interests of Canadian workers and the Canadian economy should circumstances make that necessary.


PRIVILEGE
Erik Nielsen: Madam Speaker, 1 rise on behalf of the hon. member for York-Peel (Mr. Stevens) who addressed a matter last Friday concerning the conduct of the Minister of Industry, Trade and Commerce (Mr. Gray) which the hon. member for York-Peel feels is contemptuous of this House. He has asked me to file notice in his name, as he undertook to do last Friday, of his intention to raise a question of privilege. He is unavoidably absent today. He intends to raise it at the First opportunity. In the meantime I have filed a
notice in the form of an intended motion which, if after listening to the hon. member for York-Peel you find there does exist a question of privilege, he will be moving. This motion may not be in the precise terms of the motion filed today by way of notice, but in similar terms.



ROUTINE PROCEEDINGS


Madam Speaker:: I have the honour to inform the House that the Clerk of the House has laid on the table the thirty-eighth report of the Clerk of Petitions stating that he has examined the petition presented by the hon. member for Calgary West (Mr. Hawkes) and finds that it meets the requirements of the Standing Orders as to form.



CANADA ELECTIONS ACT


Mr. Hal Herbert (Vaudreuil) moved: for leave to introduce Bill C-627, to amend the Canada Elections Act (use of contributions).


Some hon. Members:: Explain.


Harold Thomas Herbert: Madam Speaker, the purpose of this bill is to amend section 13 of the Canada Elections Act so that where a political party has provincial or municipal parties affiliated with it, its registration pursuant to this section shall have effect only in respect of the activities of the party in its federal capacity.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. D. M. Collenette (Parliamentary Secretary to President of the Privy Council):: Madam Speaker, the following questions will be answered today: Nos. 1,192, 1,624, 1,884, 1,885, 1,886, 1,887, 1,888, 1,889, 1,890 and 1,933.
February 9, 1981


Mr. Roy: 1.	How many (a) permanent employees (b) other types of employees are on the Canadair Ltd. payroll and what is the breakdown by age group, that Statistics Canada's publications show?
2.	Do some of these employees come from abroad and, if so (a) how many (b) from which country (c) what are the selection criteria?
3.	Does that company have a hiring program and, if so, what is it?


Herbert Eser (Herb) Gray: In so far as the Department of Industry, Trade and Commerce is concerned:
Canadair Limited
1.	(a) 6,170 permanent employees.
(b)	227 sub-contract personnel.
Male	Female	TotalAge 15-24	1,192	438	1,630Age 25 plus	4,339	201	4,5405,531	639	6,1702.	Yes. (a) Permanent Staff (since August 1/76)	188
Sub-Contract personnel 227-Recruited abroad
(b)	Permanent Staff: England 123; Scotland 7; Northern Ireland 26; U.S.A. 32 Sub-contract personnel: 60 per cent Europe; 40 per cent U.S.A.
(c)	Skills that are in short supply and not available in Canada: aerodynamicists, stress analysts, structures design engineers, electrical and electronics engineers, tool designers, tool planners, tool and die makers, skilled machinists.
Before Canadair hired from abroad they advertised extensively in all Canadian provinces-fully complying with regulations of the Department of Employment and Immigration.
3.	Yes. Canadair maintains two-year projection of manpower and skill requirements and gears hiring and training programs accordingly.


Mr. Epp: Is Mr. Allan Ross, a Liberal candidate in the 1980 election, employed by the government and, if so, what (a) is his annual salary (b) are his duties (c) is the length of his contract, if any?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: In so far as the Canada Employment and Immigration Commission is concerned, the reply is as follows: No.
(a)(b)(c) However, Mr. Allan Ross had a contract in the amount of $4,000 with the Employment and Immigration Commission between April 16, 1980, and June 1, 1980, to act as a member and, under the
Order Paper Questions
direction of the chairman, Manitoba task force on LEAP and Outreach, conduct interviews and visit project sites in order to contribute to the drafting of the final report of the task force to the minister.


Mr. Epp: 1.	Did any member of the Special Joint Committee on the Constitution of Canada play any role, whatsoever, in the preparation of the draft resolution which is now the subject of consideration by the committee and, if so, which members?
2.	(a) Was (i) the Parliamentary Secretary to the Minister of Justice (ii) Senator Carl Goidenberg (iii) Senator Jack Austin (iv) Senator Maurice Lamontagne, involved in any way, whatsoever, in the preparation of the draft resolution (b) were any of them involved in any discussion regarding the parliamentary strategy or the communications strategy of the government in relation to the introduction and attempted passage through Parliament of the draft resolution and, if so, who and in what capacity?
3.	Did any member of the committee see a copy of the draft resolution at any time before it was presented to the House of Commons and the Senate and, if so (a) which members (b) in each case, on what date?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: 1. No.
2. (a) (i) No.
(ii)	No.
(iii)	No.
(iv)	No.
(b)	Neither the Parliamentary Secretary to the Minister of Justice nor any of Senators Goidenberg, Austin and Lamontagne was involved in any discussion regarding the parliamentary strategy or the communications strategy of the government in relation to the introduction and attempted passage through Parliament of the draft resolution prior to the convening of Parliament on October 6, 1980. Since that time, all have participated as members of caucus and of the special joint committee. The Parliamentary Secretary to the Minister of Justice has had additional participation in that capacity.
3. Copies of the draft resolution were generally available to all Members of Parliament on the evening of October 2, 1980. No member of the committee was shown a copy of the draft resolution prior to that time.


Mr. Epp: Is any employee, either on contract or full time, of the Department of Justice, providing briefing material, special documentation or advice to any government member of the Special Joint Committee on the Constitution of Canada?


Joseph Jacques Jean Chrétien: When the Special Joint Committee on the Constitution of Canada was organized, representatives of all parties on the committee were advised that government officials would co-operate in providing information to members of the committee to facilitate the work of the

February 9, 1981
Order Paper Questions
committee. They have co-operated with members of all parties of the committee in providing information.


Mr. Epp: 1.	Is any member of the Special Joint Committee on the Constitution of Canada receiving any special compensation or remuneration, directly or indirectly, from the Department of Justice which prepared the draft resolution on the Constitution and, if so, in what nature and for what purpose?
2.	Is the hon. member for Sault Ste. Marie receiving special compensation or remuneration for his service as parliamentary secretary to the minister whose department prepared the draft resolution and, if so (a) in what amount (b) under what authority?


Joseph Jacques Jean Chrétien: 1. No.
2. The hon. member for Sault Ste. Marie receives compensation or remuneration for his services as Parliamentary Secretary to the Minister of Justice under the authority of the Parliamentary Secretaries Act, as provided by that act. He receives no other compensation or remuneration for his services as parliamentary secretary.


Mr. Epp: Did any agent, official or cabinet minister contact any group submitting representation to the Special Joint Committee on the Constitution of Canada prior to their submission of an oral or a written presentation and, if so (a) which groups were involved (b) what was the nature of the contact (c) which representatives of the government were involved (d) what were the dates of contact?


Joseph Jacques Jean Chrétien: Officials, the offices of cabinet ministers and Members of Parliament have been contacted by groups submitting or contemplating submitting representations to the Special Joint Committee on the Constitution of Canada for information regarding the committee. Such inquiries were referred to the joint clerks of the committee. No record was kept of such contacts, of the number thereof, of the specific point of contact or of the dates of contact.


Mr. Epp: Does the government have in its employ, directly or on contract or in any other way, any son, daughter, other close relative or spouse of any member of the Special Joint Committee on the Constitution of Canada and, if so (a) what is the name of the person (b) what is the relationship of the person to the member (c) what is the responsibility of the person (d) did the person play any role in the preparation of the draft resolution under consideration and, if so, what was such role (e) is the person now involved in any official way with matters affecting the present deliberations of the committee and, if so, what is the role and what are the matters?


Joseph Jacques Jean Chrétien: This information is not available to the government and obtaining it would: (a) be prohibitively expensive, and; (b) involve making direct inquiries either of every member of the special joint committee or every person in the direct or indirect employ of the government.
(c), (d) and (e) See reply to question No. 1,889 answered this day.


Mr. Epp: 1.	Is Mr. Eddie Goldenbcrg in the employ, directly or on contract or any other way, of the government and, if so (a) what is his relationship to Senator Carl Goldenberg or any member of the Special Joint Committee on the Constitution of Canada (b) what arc the specific conditions of his employment, including remuneration, responsibilities and reporting relationship?
2.	Did he play any role whatsoever in the preparation of the (a) draft resolution now before the committee (b) parliamentary strategy regarding the approval of the draft resolution by the House of Commons or the Senate (c) communications strategy of the government regarding either the draft resolution or government constitutional positions?
3.	Does he have any continuing official role respecting matters which affect the present deliberations of the committee and, if so, what is the role and what are the matters?


Joseph Jacques Jean Chrétien: 1. Yes.
(a)	Mr. Goldenberg is a son of Senator Carl Goldenberg.
(b)	No direct remuneration is provided to Mr. Goldenberg by the government. The contract for Mr. Gol-denberg's services is with the law firm of Lang, Michener, Cranston, Farquharson and Wright of Toronto by which he is employed. That law firm presumably provides his remuneration. His responsibilities are to provide professional services to the Ministry of Justice, as a special adviser, particularly in respect of constitutional matters.
2. (a) Yes.
(b)	Yes.
(c)	Yes.
3. Yes. Mr. Goldenberg continues to provide professional services as a special adviser to the Ministry of Justice.


Mr. Epp: Did (a) the Parliamentary Secretary to the Minister of Justice (b) Senator Carl Goldenbcrg (c) Senator Jack Austin (d) Senator Maurice Lamontagnc, see a copy of the draft resolution which is now the subject of consideration by the Special Joint Committee on the Constitution of Canada at any time before that draft resolution was presented to the House of Commons and the Senate and, if so, in each case, on what specific date did he see the draft?


Joseph Jacques Jean Chrétien: Copies of the draft resolution were generally available to all members of Parliament on the evening of October 2, 1980. No member of the committee was shown a copy of the draft resolution prior to that time.


Mr. Herbert: What is the current annual budget and the personnel strength of the Trade Commission Offices in (a) Jamaica (b) Trinidad and are sub-offices maintained in the territories covered by the two offices?


Mr. Gerald Laniel (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: In so far as the Department of Industry, Trade and Commerce is concerned:
February 9, 1981

(a)	Jamaica
Industry, Trade and Commerce Program Personnel and Budget:
1 Canada based officer
1	locally engaged officer	Total budget $24,800
(b)	Trinidad
Industry, Trade and Commerce Program Personnel and Budget:
3 Canada based officers
2	locally engaged officers	Total budget $99,500
There are no sub-offices maintained in the territories.


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


Madam Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, February 5, consideration of the motion of Mr. Bussieres (for the Minister of Finance) that Bill C-59, to provide supplementary borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Arnold John Malone: Madam Speaker, generally when one rises in this chamber he commences his speeches by saying what a privilege it is to make comments on the particular bill or subject matter. I suppose, in all honesty today, one should more properly stress a real concern about having to again rise to talk about a borrowing bill introduced by a government which has already borrowed itself deeply into debt. Canadians should be worrying about the fact we are now living very much on borrowed time and how that will affect our future. What we have here is another bill asking that we as Members of Parliament grant this government the right to borrow another $14 billion. In the last four years this government has already borrowed $40.1 billion and the projected deficit by the government of the day for the next four years is $51.8 billion.
In short, what we have here is a government which in an eight-year period is asking for borrowing authority amounting to nearly $100 billion in order to cast out the debts of the present and future citizens of the country. What is more concerning is the fact that the cash requirement of the govern-
Borrowing Authority
ment at the present time, by its own admission, is $11 billion, yet it puts a borrowing bill before Members of Parliament for authority to borrow some $14 billion. In other words, the government is allowing $3 billion for spillage; it is borrowing $3 billion more than its cash requirements for pocket change.
Part of the reason these huge borrowings undertaken by the government have a tendency to go unnoticed by the public at large is that the public simply does not understand the concept of what is a billion. A dollar bill is precisely six inches long, therefore two of them would equal a foot. A million dollars in dollar bills would stretch from Ottawa to not quite Montreal, but a billion dollars would go from Vancouver to Halifax and back 2.5 times. That is the amount of borrowing at which we are looking; it is a huge amount of money. The government is not only looking enough money to go across Canada 2.5 times; it is trying to wallpaper all of Canada with a debt which, if we look at last four years and the next four, will amount to just short of hundreds of billions of dollars of borrowed money.
I have heard members in the House of Commons talk about the multinational oil companies and their drain of money out of the country. The truth of the matter is that this drain of money out of the country is nowhere near as significant as that of our foreign borrowing. That is by far the biggest drain of financial capital out of the country. It is not the private sector which is creating the drain, it is the government and its huge borrowings, to the extent that when citizens pay their taxes, one quarter of those tax dollars does not buy them anything related to hospitals, roads, airports or government services. One quarter of all tax dollars paid is used to pay the interest on the accumulated foreign debt. Any citizen would be very perturbed by the fact that one-quarter of his tax dollars virtually buys him nothing, but is used to pay for the interest of a wasteful government.
The government thinks in terms of an artesian trough, it believes somehow the money is housed in some bottomless well. The government believes its prerogative is to dream up ideas of spending, to go forward and collect money borrowing and borrowing, taxing people more and more, and providing less and less.
By March, 1981, our gross national debt will exceed $120 billion. Again we must bear in mind that a billion dollars in one dollar bills will go from Vancouver to Halifax and back 2.5 times. That is the amount of debt this wasteful government is imposing upon Canadians. The interest charges against that amount will be $12 billion a year, making it the largest expenditure citizens pay with their tax dollars.
When we address this question of borrowing, there are two precepts from which we can view it. The first is that we could borrow less because the government could spend less. That is one way of getting this problem in hand; it could spend less or the government could make itself more thrifty. If it is the view of government that it does not want to spend less because it believes these services-whatever they might be defined to be-are absolutely necessary, then the other method is to
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create more wealth by stimulating the private sector. In other words, this would create greater wealth, putting people in higher tax brackets and the government would have more revenue. If the money is needed, and it is the desire of the government to have its citizens raise more money, I can only say that this government and its policies must be condemned as a dismal failure.
The automobile industry of southern Ontario is in its weakened position today because the government did not have the courage of its convictions, following 1973, to move more closely to a reasonable world oil price.
We have heard various myths that somehow OPEC has set an artificial price. Certainly the Minister of Energy, Mines and Resources (Mr. Lalonde) would have people believe that OPEC has caused world inflation, but somehow he fails to mention to Canadians that Australia, Norway, Great Britain, the United States, and a list of other countries are all at the world commodity price for oil. In fact, some of them are even higher than the world price, such as Mexico, and are not members of OPEC. Another fact that should be borne in mind is that OPEC controls only 26 per cent of petroleum production in the world today.
The Japanese import all of their energy, be it uranium, coal, wood, oil, natural gas or whatever. In 1973 Japan thrived with reasonable world oil prices. Their automotive industry is thriving in the world today. By choice our government tried to protect industries, for example, by allowing Chrysler to continue to build its 14 foot-long cars. This rests as an albatross on the necks of Liberal Members of Parliament. Through their phony energy policies, they caused the people of southern Ontario to be in a position today where they are crying out for job opportunities. They practised a policy for politics, not for reasonable economic conditions which world conditions were dictating at the time. If we compare our situation to that of the Japanese in a time of a world energy upsurge in price we will note they have moved to a world leadership position in the automotive industry. We in North America, particularly in Canada, because of a lack of wisdom, have virtually destroyed an industry. Had we protected that industry with reasonable economic policies, we would today be in a position of not having to borrow more and more money from the foreign trough.
Another myth perpetuated by the Liberal government today is that somehow the imported oil which comes to Canada is brought here for Canadians at below the world price. That is just not the case. Imported oil is at the world price. It does not matter if gasoline is being sold for less than the world price at the pumps; imported oil is purchased at the world price. If the government is not taking it out of ones pocket at the pumps, it is being taken out of his pocket, even though he may not see it go. They cannot bring $38 or $40 per barrel oil into the country and sell it cheaper at the pump, then charge the person paying taxes an additional amount and then try to convince him that somehow he got a deal because it was below the world price.
We in this nation had the benefit of one strong industry, the petroleum industry. It was one industry upon which we could have built and tremendously accelerated other industries of the country. I should like to talk today specifically about the enormous advantages to the provinces of Ontario and Quebec, had this foolish government not gone forward with its National Energy Program. This program has virtually destroyed the potential for development all across the country. Had it not been adopted I suggest the government would not be requesting the authority to borrow $14 billion today. The National Energy Program is destroying energy potential. It will cost billions of dollars in lost wealth that is simply drifting across the border into the United States, into the northern part of South America and into the Middle East. Literally it will cost us hundreds of thousands of jobs in Canada.
The Prime Minister (Mr. Trudeau) has now spent more time in the Middle East than in the province of Alberta. He was over there dancing in the tents for 40 days and 40 nights, talking about $40 per barrel oil. We are not really willing to negotiate above $17.75 a barrel for oil in Canada. The fact of the matter is we are looking at considerably more than that, for all the new oils which will be required in the future, be it in situ, heavy oil, tar sands, north shore, off slope or the offshore oil of Newfoundland. The light, sweet, pump crude of days gone by, and with only eight years of supply left it is rapidly running out. If we look at what is left in those wells which would come from enhanced recovery we are again looking at a much more expensive investment. The government's reaction to this, for mythical reasons that I cannot comprehend, is to use the phrase: "Canadianize the oil industry". That is a nice cliche, but after having them do the work they did we are now trying to make these oil companies the bad guys in the eyes of Canadians. The truth of the matter is that the oil companies have created more wealth in this country than any other group of companies, or government initiative. What the government is really saying is that it is not Canadianizing the industry but nationalizing it. It will take the industry and put it under government directorship.
As a person from western Canada, and as one associated with a province which is in the field of oil production, it makes me livid that members of the government party take the view that somehow there is something clandestine about the oil industry and we must nationalize it. In effect, the government is telling Canadians there is something terribly wrong with the multinationals who are operating in western Canada. But here in central Canada the Chrysler Corporation receives $240 million in guaranteed loans, and it is a multinational corporation. Similarly in the past few days the Minister of Industry, Trade and Commerce (Mr. Gray) struck a deal with Massey-Ferguson which left that corporation with the feeling that it, too, was blessed multinational. What a "Canadian" multinational is should be put of its employee dollar investment is outside of this country. In short, what you have is a government which is trying to nationalize western Canada.
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I should like to refer to a recent article in the Toronto Star which talks about some rumbling in the Liberal caucus. It quotes the Parliamentary Secretary to the Minister of State for Multiculturalism (Mr. Deniger) as saying that Nordair is:
-not an Ontario regional carrier. It's based in Montreal and we can't afford to lose another head office. That's my basic fear.
He goes on to say:
What you have to understand is that the airline industry is as important to Quebec as the auto industry is to Ontario. If we lose this industry, it's our economic future that's at stake.
I hear what the hon. member for La Prairie says. I have a great understanding and a great deal of sympathy for what he says. It does not sit well with me that what I hear from the other side, as a group, is that somehow they want these protections for their industries, but have, I sense, a lack of either genuine understanding or concern about the fact that these industries which must be centred somewhere else, could create an enormous amount of wealth for all of Canada. The view is that the government bails these industries out with handouts, whether they be airlines, the automobile industry as represented by Chrysler, or the tractor industry, such as Massey-Ferguson. They bail out these multinationals while the successful ones, the ones having no problems, are painted in some way as anti-Canadian. I ask why? It is claimed there is some drift of money south. Anyone who has looked at this situation will know that the vast majority of money which leaves this country is not because the companies are taking it out but rather because the government is paying interest on its foreign debt. Why is it paying interest on its foreign debt? It is paying on the money to buy out oil companies, but that is certainly not the only reason. Why did the government just spend a billion and a half dollars buying Petrofina? Perhaps so we could put a Maple Leaf flag up and call those stations Petro-Canada. Of course Canadians would like to have some participation in their oil industry, but there certainly must be other ways for Canadians to participate than by the government spending $1.5 billion on something which will not create one more drop of oil. What this country needs to do is pay its debts and allow oil companies to get on with the business of finding more oil.
Whoever it was from the Department of Energy, Mines and Resources who ran down to Mexico to purchase junk oil did not know what he was buying. If we never had junk food around we sure now have junk oil. Part of the Canadian myth is that oil is oil, is oil. There is a difference between light and medium weights, sweet crude or heavy oils. There is also the Maya oil which is thick, sludgy and its chemical content is high. In this deal the Mexicans arranged that the oil would be supplied at irregular intervals. This meant we would not necessarily receive the oil in the wintertime when we need it the most but that we could receive it all in the summertime. The deal arrived with a clause which said that we could not pass the oil from our country, it must remain in Canada. We do not have the refinery capacity to refine it, since all our heavy oil refineries are working to capacity. What are we doing? We are bringing in Mexican oil to the east coast of
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Canada. If must then be transported to western Canada in order to refine it there. At the same time the heavy oils from Lloydminster, Saskatchewan, and the Swift Current area are being shipped south into the United States because we do not have the refinery capacity for that type of oil in Canada. For a government which thought it was buying light or medium-weight sweet crude it certainly got a crude awakening when it found out this was heavy, sludgy oil dumped on us at enormous cost and inconvenience to the refineries. Once again, I would say that more dollars are leaving our country as a result of this mismanagement than are leaving for other reasons.
The government is moving to bail out the Chrysler Corporation which is now in trouble. Massey-Ferguson is also in trouble and the government is moving to bail it out. But these are different multinationals since they are based in the area of Canada where there appears to be a majority of Liberal support. All of a sudden multinationals are not so bad, they receive government aid. I do not know why they do not rename them Car-Can or Tractor-Can. Why doesn't the government nationalize these corporations? It prefers to pick out an industry which affects some province far away, a province in which it lacks support. The government therefore feels it has a legitimate right to gang up on it and use what muscle it has- although to me its muscles looks more like kneecaps on a sparrow than anything else. We in western Canada tend to think that Petro-Canada consists of those two doors behind a service station. We have not had a program of Canadianiza-tion, we have had a program of nationalization. A Calgary Herald survey indicated that 376 Canadian drilling rigs will move into the United States before the ramifications of the October 28 energy budget have come into effect. This move will cost Canadians some 22,000 jobs. What this means is that on the one hand Members of Parliament are being asked to give the government licence to go forward to international borrowing markets to obtain $14 billion while on the other hand it is this same government which will chase out 22,000 jobs.
Let us take a look at the advantages to the people in the province of Ontario if we are to develop our regional capacity in the way in which it should be developed.
One Dome Petroleum gas field on the Arctic coast of the five potential fields would produce 150,000 man-years of employment in Ontario throughout the life of that field. This development would have an enormous impact on the economy of Ontario. Yet this clandestine government in its view on the question of energy is causing the people of Ontario and Quebec the loss of jobs and the loss of economic growth. This past year two tar sands plants did not continue development because the Minister of Energy, Mines and Resources was not able to negotiate a pricing arrangement on oil. This fact means a loss to Ontario of $108 billion over the 25-year life of one tar sands plant. That is only one plant. Lion, members will bear in mind that we require nine plants if we are to reach energy self-sufficiency, and each plant would require 8 billion in initial investment.

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To start development on one plant would mean an infusion of S800 million into the economy of Ontario through the iron and steel industry, but the government said no. Such a development would create $370 million in the metal fabrication and machinery industries of Ontario. Once again the government has denied the province this opportunity. This development would create an additional $325 million in the transportation equipment industry of the province of Ontario. For manufacturing and processing, such development would mean another $740 million, and for financing it would mean $370 million. In the area of trades and services, such a development would mean an additional $750 million for Ontario.
The Minister of Energy has been known to visit western Canada and to say that, "If we allowed the price of energy to increase the province of Alberta would become rich beyond our wildest dreams." I would ask all Canadians to bear in mind that when any region of Canada becomes richer, it is a matter of a very short period of time before that money which is created or generated is recirculated back through the manufacturing basin of Canada.
There is no doubt in my mind that the St. Lawrence Seaway Great Lakes system which runs through Quebec and Ontario will continue to be the manufacturing basin of this country. When citizens of a particular region come into more money, they do what everyone else does, they spend it. They buy appliances, cars, clothing, toasters, refrigerators, suits and dresses, all of which are manufactured in central Canada thereby creating wealth and jobs in that area. A western Canada economist told me recently that approximately 80 per cent of the generated wealth from the regions will circulate throughout centra! Canada within six months of its creation.
The misjudgment that the region will become richer and that the rest of the country will not gain from that richness is affecting all Canadians in a very negative way. This situation is having the effect of chasing jobs out of not only Alberta and Saskatchewan, but also Ontario. It is not a situation of one part of the country versus another, it is a situation throughout Canada. Surely when each member of the family is strong, then the family is strong. But the government seems to be picking on members of the family.
On the one hand the government is granting money to companies like Chrysler and Massey-Ferguson and, on the other hand it is trying to nationalize another industry. I have no objection to Canadianiz.ation, but let us not be caught in the myth that Canadianization and nationalization are the same, because they are not. Nationalization is vastly different from providing incentives to the citizens in order to achieve Canadian ownership. The government should be providing some incentives. There is no sense in the government, which has the job of governing and regulating, becoming mixed up in the private sector. Once this happens the referee becomes a player on the team. It is not cricket to have all these Canadian-owned companies and the multinationals turn over their records and their expertise to, for example, the National Energy Board, a government agency, when that agency is also
in league with a national company, Petro-Canada, the two involved in the same field.
I would like to cite some further data which outlines the advantages to central Canada if some of these regional projects were developed. Such development would mean that we would not be faced with having to borrow another $14 billion. The expenditures of one tar sands plant over the next 25 years are estimated at $85 billion. Using the CPA multiplier effect on money at 3.4 per cent, each plant would create $290 billion over a 25-year period. There is the potential to build eight such plants in the next decade and a half. In terms of balancing our payments, decreasing our foreign debt and reducing the tax burden on Canadian citizens, the effect of such a development would be enormous.
Instead, the government, for its own self-serving motives, would rather create the image that there is an enemy within the Canadian family and that, therefore, the government must control and dominate a field which belongs to the provinces. However, that does not stop the Minister of Industry, Trade and Commerce from signing a $240 million cheque for a company based in Ontario and saying, "Boys, 1 hope you make it." That minister is now sitting down to negotiate with Massey-Ferguson.
We in the west want to know what is so awful about our multinationals, in light of the fact that a multinational based in central Canada receives the blessing of the government. Somehow, there is a mix-up in the thinking of the Liberals. In their view the people of the regions cannot control the energy supplies but that it can only be done by a central government. If the private sector is endorsed in central Canada, then certainly there must be an element of trust that we in western Canada can play our role in making a stronger and better country. In no way do we support this narrow thinking that only the central part of the country has the right to be able to participate in the decisions which affect the entire country.
The people of the regions, be they from the Atlantic region, the north or the west, do not mind the toot, but once in a while they would like to be able to pull the cord. If the government continues to take away from the sense of participation of these regions, the feelings of alienation which have recently surfaced so strongly will grow and grow. This sense of unfairness will continue to grow if the government continues with its heavyhanded view that only the central government has the right to govern and shape the destiny of this nation.
Five years ago the per capita debt was $851. That was regarded as a staggering amount. At the moment of birth every baby inherited a debt of $851; today at the moment of birth each baby inherits a debt of $2,874. That is an increase of 229 per cent, Mr. Speaker.
There is a great difference in a way members on the two sides of this House think, Mr. Speaker. There are those in this party who believe that wealth is created by production while some opposite seem to believe wealth can be created by borrowing. Taxes are then increased in order to pay for the
February 9, 1981

debt. We do not need to borrow more to provide more services, Mr. Speaker. What we need is to provide Canadians with the incentive to produce more and thus generate wealth. If we could achieve that we would not need to borrow $14 billion abroad to meet our $11 billion requirement, the extra $3 billion being for spillage.
This country has great potential to generate wealth through the development of energy resources but a stumbling block has been put in the way by this government. At the present time there is a surplus of red meats in the country, aggravated by the influx of imports yet the government has not put quotas in place. In the last six or seven years we have lost between $200 and $500 million per year of international grain sales. The grain was available on the prairies but our transportation system was incapable of getting it to market. With the debt this Liberal government has run up it would certainly be a great advantage to the country to have this $200 to $500 million coming to the farmers every year and to collect income tax on it. If things like this were taken care of the government would not need to go abroad to borrow these enormous sums of money.
The government elects to build such monuments as Mirabel, a white elephant, a Taj Mahal of an airport far away from the city a great inconvenience to passengers. Indeed, a travel agency in Boston advertises in Canadian newspapers that it is easier to fly to Boston and then go on a world trip than to use Canadian airports. That airport was a horrible misjudgment and we can only guess at the reason for it.
No sooner was the election of February 18 last year over than the Liberals were saying they would have to review the commitment made in 1979 to develop the port of Prince Rupert for the movement of tremendous volumes of grain.
It is no wonder this country has to borrow money when the infrastructure that would make the nation work is not being put in place, either for political reasons or simply for lack of confidence.
There is potential for the development of high technology in this country. We could be world leaders in several areas, and certainly in the health field. Already we are respected for our petroleum technology but we could lose our position very quickly if the government continues to cut back the cash flow in that very important and much needed industry. There is an enormous potential for the development of the coal industry as well.
Surely if a country like Japan, which only has the resources of fish and tin, and imports the bulk of its food, all its energy and raw materials which it manufactures and ships to world markets, can become one of the two top economies of the world, Canada which wants for nothing and has the resources of agriculture, forests, minerals and one-third of the world's freshwater, ought to be able to function without borrowing on world markets. Our borrowings over the last four added to our estimated borrowings four years hence will amount to some $100 billion and this will be carried on the backs of future Canadians. It is a shame that a nation of 24 million educated
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people cannot manage on its own. Japan, with an island population of 110 million has virtually no unemployment.
I see you are giving that signal which indicates my time is about up, Mr. Speaker. I want to conclude by saying I am tired of speaking in this House on motions to grant the government permission to borrow more money when it is so wasteful. This government must come to realize that the creation of wealth will permit us to stop borrowing. It must not continue pretending it is necessary to live so meagrely when all we have to do is develop the enormous potential that is on tap.


Some hon. Members:: Hear, hear!


Jack Wendele Shields: Mr. Speaker, we have been asked to pass Bill C-59 to allow the government to borrow $14 billion as may be required for public and general purposes.
When asked to proceed with a borrowing bill such as this, one cannot help but come to the conclusion that something is clearly and drastically wrong in this vast, beautiful and endowed country. The money borrowed will directly subsidize offshore oil from Saudi Arabia, Iran, Venezuela and Mexico. It will subsidize the foreign airlines which fill up their tanks in this country, and it will subsidize the drivers who cross the border from the United States and fill up their cars with cheap gas at our pumps. The system is absolutely cock-eyed, Mr. Speaker.
When we consider borrowing, on the one hand we speak of the need to keep out foreign investment or American capital and then on the other hand we go to the New York markets, where we will most assuredly go, to borrow $12 million. This American or foreign capital is not required for the development of our resources or our economy. This bill will allow the government to borrow foreign capital. As the Canadian economy weakens and the dollar drops, as most assuredly it will, we will be paying back in foreign currency what we borrowed with a weaker dollar. This is absolutely astounding.
All of us can agree with the stated objectives of the national energy policy. I shall zero in on one, namely, Canadianization. Certainly we want Canadianization but we do not want nationalization. There is a difference. State ownership by the people is absolute nonsense. The government is then put in a position where it can gain control of a resource or an industry; in other words, a monopoly. A government will use anything in its power to remain in power. You then purchase commodities at the government store. It is a very dangerous precedent. It is a very dangerous way to move. We are free enterprisers.
The entrepreneur is the one who goes out and creates wealth. My colleague who spoke before me indicated the government has to realize that it is the creation of wealth which is the backbone to our economy. It is not the redistribution of wealth. A healthy economy cannot be had by government decree. To create a healthy economy in Canada the climate must be provided in Canada so that investment will take place in Canada. We cannot isolate ourselves from the rest of the world but we are attempting to do that. There is a

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great hue and cry of no more foreign investment and that we do not want foreigners investing in Canada, f ask hon. members to think for a moment what would happen if this edict were applied by the United States against Canada, by Australia against Canada or by the Middle East against Canada? We have Canadian companies in the oil sector, in manufacturing, and in technology moving into multinational status. They are not denied access to the U.S. market or to the U.S. manufacturing sector. We have classic examples of Canadian companies moving on the international scene; for instance, Atco Industries, the Simmons group of companies and Bow Valley Industries. There are many others including Seagram's and Canadian Pacific.
What would happen if the other countries started to take a very isolationist view of their economies? We cannot isolate ourselves from the world but we are attempting to do that. How are we doing it? We say that we cannot allow the world market price on oil to determine the price of that commodity in Canada. Instead, we say that we will set the price at 40 per cent to 45 per cent of the world commodity price because we want a made-in-Canada price. This forces industry and investment out of Canada and into the U.S. or the Australian market because a much quicker return can be had there. What is business anyway? Business is taking money which belongs to you, putting it on the table and gambling with it. That is what you are doing. People who invest invest to make a profit. They hope to get a return of 10 per cent to 12 per cent. But in the meantime they are helping to build, create jobs and are making the economy move. With the present government, there is no possibility of this happening.
Since the National Energy Program and the budget were introduced in October a number of things are starting to happen in the oil industry much faster than anyone realized. Sixty drillings rigs and 16 service rigs have left Canada. The Canadian Association of Oilwell Drilling Contractors expects less than 5,800 wells to be drilled during 1981 in the western basin. A further 60 drilling rigs are committed to leave Canada by April 30. Each drilling rig employs 25 men who are trained, understand their jobs and are technically qualified. Each drilling rig is a self-contained factory. I have mentioned these things before in this House. Now we are talking about 60 more factories leaving Canada by April 30. We are looking at a reduction in jobs somewhere in the neighbourhood of 30,000 in western Canada alone. That does not stop there. It has a multiplier effect. Those jobs are lost also in Ontario. People do not buy trucks, the manufactured goods, the steel, the pipe, the compressors, or the motors. It has a rippling effect right throughout the economy. It is shameful to see this happening.
One of my colleagues spoke earlier about research and development and the necessity for direction in this area. Today in northeastern Alberta, there are 36 large research and development projects. I am talking about companies such as Texaco, Amoco and Petro-Canada developing in situ recovery processes for the tar sands. I could go on and on. In research and development investment potential ranges from $10 million
to $280 million to $400 million. This investment is in straight research and development.
I ask you, Mr. Speaker, do you know that Canada has developed the technological expertise ahead of anyone else in the world in tar sands and heavy oil recovery?
We are not the only country to have tar sands or heavy oil. There are tar sands fields in the United States and there is shale oil there. It is also found in South America. Right now there are two plants in northeastern Alberta, one an open pit proven process undertaken by the Alsands consortium north of Fort McMurray. They are ready to go, with an investment of $10 million. No company is coming to the government saying, "We need government guaranteed loans to do this." This is capital which is in place, ready to move.
I should talk about that for a minute because it has a horrendous effect on northeastern Alberta, on the Alberta government and economy, because they have to put in place instantly a town for 15,000 people. Can you imagine the cost of instantly setting up a town for 15,000 people, with the necessary infrastructure, the railroads, the highways, the schools and the hospitals? That cost is to be borne totally by the provincial government, and sometimes we lose track of that. It has been estimated that one tar sands plant will cost the taxpayers of Alberta directly between $2 billion and $3 billion. I should like hon. members to understand what takes place when one of these plants starts its operation.
Let us consider the Cold Lake plant, a first of its kind, giant research project. It is waiting to go ahead in Cold Lake. When we talk about research and development, we mean a team of people which has been brought together. There is a team ready now waiting and planning the development of the Cold Lake project. There is another team of engineers which is ready and waiting to develop the Alsands project. What are we on the verge of losing? Mr. Speaker, I cannot stress strongly enough that we are on the verge of losing forever those two large teams comprising engineers from right across Canada, because the Alsands consortium and Imperial Oil, which are ready to go at Cold Lake, are no longer prepared to carry these teams. This government recognized that when the Imperial group from Cold Lake came to the government and said, "Look, we are not prepared to hold this team together, we are not prepared to keep this project on stream, unless the government is ready to make the commitment to hold the team together at a cost of $40 million." The government came through and said, "We will put it up on the basis that it will be repaid if the Imperial Oil plant starts operating at Cold Lake." June 1 is the deadline. If that research and development team is dissipated, scattered and moved around to other jobs, we will not see it again. It takes years to put such a team together. Where will they go? I suggest to you, Mr. Speaker, that they will go to the United States where work on the shale deposits is going ahead very fast and the same kind of technology is involved. I suggest to you they will go to Montana where the oil sands are in situ. I suggest to you they will go to the oil sands fields in
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Venezuela, and to many other places in the western world. We cannot afford to lose these experts. We are on the verge of putting technology at the disposal of Canadians, technology which we will be able to sell right across the world when the energy crunch comes.
Instead, what are we doing? We cannot sit down with the producing provinces to work out an agreement. If this government approached the producing provinces as if it were really prepared to sit down and negotiate, we would have an energy agreement within a month. Just think for a minute what it must be like, as one of the producing provinces, requesting the government not to impose under any circumstances an export tax on gas or a tax on oil at the wellhead. The producing provinces are saying, "Look, if you tax at the wellhead, that is the first tax and you will control the resource, but control and ownership belongs to the province. If you put an export tax on natural gas, you control the production of natural gas, and that belongs to the province. We will negotiate everything but those two things." The whole national energy policy was based on raping the producing provinces by putting a tax at the wellhead and by putting an excise tax on natural gas.
The Minister of Energy, Mines and Resources (Mr. Lalonde) tells us, "I am ready to sit down with the producing provinces at any time, but they will not sit down with me." He says, "We are ready to negotiate an energy agreement, but they do not want to negotiate." The provinces have said in answer, "Show us you really mean business and we will sit down with you." In this House, in answer to questions put by hon. members on this side and by myself, the Minister of Finance (Mr. MacEachen) and the Minister of Energy, Mines and Resources have indicated they are not prepared to change the national energy policy. I say to you, sir, that the present government should be prepared to say to the producing provinces, "Look, maybe we have made a mistake with this national energy policy, everyone in the industry says we have, and the economic community says we have." The government should say, "Let us take another look at it, let us bring in the principles that are involved, let us sit down and work out an agreement." If it did that, I believe an agreement could be reached. It takes men of good will, but good will is not spread in the producing provinces by ministers going out there and making one statement and then coming back to the House and making another. Good will is not created by the Minister of Energy, Mines and Resources going to Alberta and saying that the oil companies always cry about a new energy policy. At least they did not bring in the CIA, as they have in other countries. All that does is create animosity, and 1 find that deplorable. What do we see in terms of negotiation?
We see headlines and news releases emanating from Ottawa about the greed of the producing provinces. I say to hon. members opposite that there is not greed. The producing provinces want fairness and equity. They want to be treated like every other province in confederation. The government must understand that the producing provinces in western Canada are no longer prepared to remain second-class citizens.
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They want to be able to stand beside Ontario and Quebec and say they are equal. That is not too much to ask.
We are not talking about price. In its offer of last July, Alberta said it would freeze the royalty rate at its present level and not raise it again for the life of the agreement, meaning that if the price of oil goes up there is lots of room for the federal government to move in and take more and more.
This government is obsessed with splitting up the economic pie. I suggest the government should become obsessed with creating a much bigger economic pie, but this government will not create a bigger economic pie with this energy policy and budget; it will create an atmosphere which forces the industry right out of Canada, and mega projects to cancel their plans.
Ten billion dollars of investment has gone down the drain north of Fort McMurray at the Alsands project; $11 billion is on hold at Cold Lake; Syncrude Canada, ready to expand so it could increase its output by 60,000 barrels a day, has put $3 billion on hold; Texaco Canada, ready to spend $240 million to upgrade its experimental project-still experimental-has said, "No, we are putting that on hold because we do not know what is happening in Canada; the place has gone crazy." Amoco has pulled out and said, "We cannot afford to spend any more time on research and development in the tar sands because we do not see a stable political climate in Canada". Amoco says we do not have a stable political climate in which to invest in research and development or in the tar sands heavy oil industry. I find that to be absolutely shameful. I could go on about projects which have closed their doors and said they will not continue. When we talk about oil rigs leaving Alberta and Saskatchewan, we are pooh-poohed by hon. members on government benches. They say this cannot be happening. I am telling them it is happening. It is happening to an extent which even the most doomful forecasters at the time of the energy policy and budget in October did not anticipate. It is happening to an even greater extent than that, and we do not have much time because once the rigs are gone, they will not come back. It will take years to recover the loss of technology which goes with that, let alone the rigs.
There is a list of people who have pleaded with the government to pull in its horns, to lay the national energy policy on the table and go over it again. I suggest that the Minister of Energy, Mines and Resources sit down with the principal players in the energy industry. I suggest he call in independent Canadian oil companies and the large multinationals. I suggest he bring in representatives of the federal government and of the provinces, sit down and really examine how to set a national energy policy which will make the economy of Canada hum.
Can hon. members imagine the economic effect in Canada there would have been today had there been an energy agreement? Can hon. members imagine what would be happening today if the Alsands plant at Fort McMurray was under construction and going, and if the one at Cold Lake was under construction and going? There would be a ripple effect throughout our economy which would be unbelievable but a beautiful thing to behold. There would be a boom in the

February 9, 1981
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industry of central Canada. People would be getting up in the morning anxious to get out and contribute to the development of our country instead of lengthening the lineups at unemployment insurance offices. It would be unbelievable.
We talk about billions of dollars and what they do, but one plant alone would bring an injection into the economy of Ontario of some $6.5 billion. This would be a direct injection because where are goods and services bought? Where does the industry buy equipment, pumps and pipe? It is all purchased in central Canada. In respect of two plants the injection would be $12 billion, yet the government puts forward a borrowing bill to give it authority to borrow $14 billion, as may be required, for public works and general purposes.
This money will be put toward guaranteeing loans for Massey-Ferguson, pulling Chrysler out of the pinch, or whatever, but the one industry which is moving-and moving the rest of the economy with it-the government attacks through the national energy policy. I plead with hon. members opposite to talk with their Minister of Energy, Mines and Resources and tell him how absolutely necessary the energy industry is.
How much time do I have left, Mr. Speaker?


Mr. Deputy Speaker:: Another seven or eight minutes.


Jack Wendele Shields: I will be very brief, Mr. Speaker.


John Carnell Crosbie: No, no, relax. Take your time.


Jack Wendele Shields: I want to read a letter into the record. Hon. members might be interested in this letter. It is from Merland Explorations Limited. It was written to the Minister of Energy, Mines and Resources on December 23. It says:
Dear Sir:
During the past month, the staff of Merland Explorations Limited and our financial consultants have been studying the National Energy Program and the Budget released by the Canadian federal government on October 28, 1980 (and associated "White Papers") with the purpose of determining its effect on the Canadian oil and gas industry in general and upon Merland Explorations Limited in particular. Merland is a member of the Independent Petroleum Association of Canada (IPAC) who have communicated with you previously regarding this subject. During these communicatons, you have invited further communications with individual companies. This letter is intended to communicate to you what Merland's studies have concluded and present some alternative solutions to the problems.
Before I go into detail concerning the National Energy Program and the budget, I think it would be appropriate to give you some introduction to Merland Explorations Limited.
Merland was incorporated in 1926 as a federal company and is now listed on the Toronto and Montreal Stock Exchanges. Merland has experienced very rapid growth in the last four or five years from activities in the Canadian oil and gas industry. We are involved in oil and gas activities in the United States to a much lesser extent.
We are very proud of the fact that our cash flow and net earnings have increased substantially over the past few years, however, it should be noted that our investment in oil and gas exploration has increased at an equal rate. Merland has funded its exploration and development activities over the past several years from its cash flow and production loans from the Royal Bank. In each of the past several years we have invested considerably more in industry capital expenditures than our cash flow.
From the information that I have available to me, I believe that Merland is approximately 90-95 per cent owned by Canadian citizens or Canadian corporations. Our eight members of the Board of Directors are all Canadian citizens and residents of Canada. All of our officers and employees are Canadian citizens.
Merland is a hyper-active, highly motivated and very successful company whose success is due primarily to a very competent Canadian staff with excellent guidance from our Board of Directors. Merland is, or was, certainly one of the brightest stars in the Canadian Oil and Gas Industry of which every Canadian and the Canadian government could be proud.
The federal budget and Canadian Energy Program introduced by the Canadian government on October 28, 1980 has introduced a number of measures which will surely have a negative effect on Merland Explorations Limited, hundreds of other Canadian owned oil and gas exploration companies and the whole oil and gas industry in general.
1 don't believe there is a Canadian who would disagree with your stated objectives of the new Canadian energy policy being as follows:
1.	Canadian self-sufficiency in crude oil and natural gas supplies.
2.	An increase in Canadian ownership and control of the oil and gas industry.
3.	More appropriate and fairer sharing of oil and gas revenues.
However it is doubtful that the Energy Program and the Budget introduced by your government recently will accomplish any of the stated objectives but will throw the oil and gas industry into complete chaos and confusion thus reducing exploration and development activity. This slowdown in activity will by necessity cause a ripple effect which in turn will hurt all or most other Canadian industries. If Merland Explorations Limited is a typical negatively-effected company, the Canadian automotive industry, the steel industry and hundreds of smaller manufacturing industries will be hurt. The majority of these manufacturing industries are located in Ontario and Quebec.
There is no doubt also that the negative effects caused by your new program will cause Merland and many other companies to move ever-increasing amounts of investment capital to the United States and other countries where financial returns are better and government policy is more stable and receptive. As far as Merland Explorations Limited is concerned, we now estimate that our cash flow and net earnings will be reduced by approximately 12 per cent and 25 per cent respectively in 1981 because of your new program and these lower values will continue into the foreseeable future.
One therefore has to question whether the objectives of your Canadian energy policy are in fact as you have represented or are there other unspccificed objectives in mind.
To be specific in my feelings toward your new policies, I note that the 8 per cent PORT tax and the 30-cent MCF petroleum compensation charge are very well defined and industry and consumers are expected to begin paying these new taxes in 1980 thereby having the effect of increasing federal income and decreasing industry cash flows immediately. Consumer costs will also therefore increase immediately. These new levies and taxes will restrict the ability of Merland Explorations Limited to carry on its business of exploring for oil and gas in Canada as surely as night follows day. This same situation will occur to many other Canadian companies. I have to ask again: Is this one of the objectives of your new energy policy?
Because my time is running out, I will go down to the bottom of the page.
I would also ask you to give the following thoughts some very careful, openminded consideration:
1.	It will be a national disaster if the Cold Lake heavy oil project and additional tar sands plants are not preceeded with as these projects are essential to our energy needs and to maintain Canada's leadership in this type of technology. Any politician, at whatever level, who is associated with the possible cancellation of these projects will go down in history as an architect of the economic collapse of Canada.
2.	The people of Canada still consider Canada as a capitalistic and free enterprise country and are very proud of this in spite of what many politicians are trying to preach and profess.
3.	The population of Canada is quite willing and able to pay for higher energy costs as have been experienced in every other western country of the world except Canada. So oil and gas prices should escalate much faster than your program has suggested.
February 9, 1981

4.	Contrary to your government's beliefs, separation of western Canada is quite possible if this area continues to be treated as a colony. Keep in mind that western Canadians are psychologically quite different from people in Quebec who have been in the warm, comfortable bosom of the Canadian federal government since confederation. Western Canadians have grown up working and fighting for a better life and the current energy problem will be dealt with with the same vigour and stamina.
5.	The fairest and simplest method for the federal government to obtain additional revenues is through a reasonable taxation scheme of company profits.
6.	The reckless and uncontrolled expenditures of tax deductible capital in the oil and gas industry whereby commissions are earned according to how much is spent rather than how much is earned should be stopped.


Mr. Deputy Speaker:: I regret to interrupt the hon. member but his time has expired.


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I welcome the opportunity to speak on Bill C-59 entitled an act to provide supplementary borrowing authority. This is a short but frightening bill giving the Minister of Finance (Mr. Mac-Eachen) the authority to borrow up to $14 billion for public works and general purposes through the issue or pledge of securities of Canada at rates of interest or terms and conditions as approved by the governor in council. No other act by this government, except the introduction of this bill, could indicate to Canadian people the truth of the charge levelled against it by the former Auditor General of Canada, Mr. James Macdonell, when he said this government is losing or is close to losing control of the public purse. The bill covers little more than a page and, except for the general purpose clause, gives absolutely no explanation covering the government's intended expenditure of this vast amount of money. One billion dollars is one thousand million dollars; $14 billion is therefore $14 thousand million. It is a new horrendous debt load to be placed on the backs of the citizens of this nation, citizens who are already crying out against the excessive tax burdens they must carry as a result of the mismanagement of their affairs by the federal Grits in office under the present Prime Minister (Mr. Trudeau).
The bill claims in its first paragraph to be enacted by and with the advice and consent of the Senate and the House of Commons. If only that statement were true; unfortunately it is not. The parliamentary system has become so rigged that the government with a majority in the Commons can ignore all the opposition parties. The first act by the Prime Minister was to change the rules so that his government, his party, could limit debate. Afterwards he boasted about his actions saying we pulled the ground out from under them. Parliament has a completely new set of rules. I think it was Pogo who said, "We have met the enemy and he is us." In this case the "them" to which the Prime Minister referred, is us, and we are the representatives of the Canadian people whose voice is all too often silenced by the majority in this House.
Until the present Prime Minister took power, Canadians were in the habit of trusting their government. So far as provincial and municipal governments are concerned, they probably still do. Banking on this trust, the present Prime Minister was able to change the rules, so that he could set
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about changing our society. After the rules were changed, he said:
I have the feeling of a mechanic who is returning a car or something and getting the thing ready to go.
However, he neglected to tell us in which direction he intended us to go. In 1969 he said:
We have to change the constitution to keep it up to date, to give the federal and provincial governments the new rules which are called for in a new society.
Now, some 12 years later, we are gradually getting a glimpse of Mr. Trudeau's new society. Very few Canadians like or approve of what they see.
[ Translation]


Mr. Cousineau:: Mr. Speaker, I have noticed that for some time now-and I do not know whether it is done accidentally or deliberately, or whether it is a small, well-orchestrated campaign-the Prime Minister of Canada has often been referred to by his family name, something which is not allowed in the House under Beauchesne's Citation 319.


Mr. Pinard:: That is quite true.


Mr. Deputy Speaker:: The hon. member's point is well taken. It is the custom of the House to refer to individual members by constituency and to members of cabinet by their function or positions in cabinet.


Lloyd Roseville Crouse: Thank you, Mr. Speaker. I was referring to the Prime Minister of Canada, but in future I will recognize the custom.
Coming back to the comments I was making, some 12 years later we are gradually getting a glimpse of the Right Hon. Prime Minister's plan for this nation. Many Canadians do not like or approve of what they see. For example, on July 10, 1980, the government forced passage of its authority to borrow $12 billion in this House. At that time the government refused, just as it is refusing today, to say how the money would be spent. In its budget, October 28, 1980, the government gave itself a blank cheque for at least another $50 billion. I will explain later on my reason for that statement.
In my opinion the government is seeking far more power than it needs to achieve its stated objectives. The $12 billion of last June and the $14 billion of today total $26 billion. As I stated just a moment ago, the blank cheque the government is seeking could total $50 billion under the present so-called budget, or an additional $2,000 from every man, woman and child in the country.
The borrowing proposals of this government are unprede-cented in this country's history in their sheer magnitude. Moreover, this massive amount of money will be used at the government's discretion with virtually no public control whatsoever over what is to be done with it. The implications of such enormous and unfettered spending power are so immense that even the terms "horrendous" and "frightening" may well be too mild to describe them.
80094 - 74

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Not only will this huge blank cheque result in an unimagined transfer of capital from the private sector to the public sector, but it will also revolutionize the Canadian political system. Its impact could extend far beyond the borders of this country, bringing serious, adverse international repercussions. In light of the Right Hon. Prime Minister's proclaimed "new society", it is not too far-fetched to suggest that this abridgment of our freedoms through excess taxation could shift Canada overnight-from 1981 to 1984-into a totalitarian nation having a one-party rule instead of the previous system where we prided ourselves in our freedoms and our democratic traditions.
One might say that my views are far-fetched, that I am exaggerating the situation, but I call in defence of my statements and my claims the words of the present Deputy Prime Minister and Minister of Finance as delivered to a luncheon meeting of the Canadian Club at the Royal York Hotel in Toronto on Monday, February 2, 1981. Among other things, the Minister of Finance stated on page two, the third paragraph:
The same men and women who operate our factories, staff our offices and teach our children make up the society we are so determined to preserve. The economy is not simply an engine of production, not just the source of GNP. It is the mechanism for meeting the material needs of society. And by the same token, the expectations and desires of society must not exceed what the economy can realistically produce.
I repeat that the expectations and desires of society must not exceed what the economy can realistically produce. I wish the Minister of Finance were in the House at the present time, but I say to him, neither should the expectations of government, for when the government's desires exceed what the economy can produce, the end result is the same.
What is the end result? For the answer 1 turn to the fourth paragraph on page two of the minister's speech wherein he said:
When this connection is forgotten or neglected, all dialogue loses its meaning, and as both history and current events throughout the world so vividly demonstrate, dire consequences often result. All too often when the demands of society are at odds with the ability of the economy is protected from society or society is protected from the economy, and, in the extreme, capitalistic fascism or revolution is the result.
If one simply substitutes in the Minister of Finance's speech the words "the demands of government" for the "demands of society", then the conclusions he reached are identical, namely, freedoms within the economy are repressed and the end result is revolution. These men who lead the country, they know the answers, and sometimes in veiled statements they are making them in speeches in places other than this House.
At page three the Minister of Finance went on to say:
Within a democracy we cannot protect ourselves from ourselves.
He could also have added, "or from excessive government expenditures and actions", and again his conclusions would have been the same.
After reading the speech of the Minister of Finance, 1 could not help but be appalled, as I am certain all Canadians who read it would be appalled, at the manner in which on pages four and five by direct statements and innuendos he pitted one
province against another and he pitted the east against the west, which does little or nothing to bring about unity in the country.
Obviously members of the present government are all candidates of the Dale Carnegie course on "How to Win Friends and Influence People", for the type of comments made by the Deputy Prime Minister in Toronto does absolutely nothing to bring about the unity within the nation which is required at this time.
The Minister of Finance's double-talk continued throughout his entire speech. On page seven he stated:
The gradual tightening of government expenditures was in part designed to remind Canadians that attitudes must change. As we strengthen our economy, we must not ask more from it than it can provide.
This statement leads me to ask: Why is he doing just that? Why is he asking more from our economy than it can obviously provide? Surely in defence he cannot claim that he and his colleagues have strengthened the economy of Canada. If so, they are obviously unaware that as a result of the national energy policy, 60 drilling rigs and 16 service rigs have left Canada, nearly all bound for the United States. Since the National Energy Program was announced on October 28, I understand that 60 more rigs are committed to leave Canada by April 30. How can this government claim a strengthened economy by mid-1981 when a spokesman for the Canadian Association of Oil Well Drilling Contractors states that the equipment that will have left Canada or which will be sitting idly in Canada will amount to more than half the Canadian industry's ability to drill and service oil and gas wells in this country? When Canadian oil companies cut back their planned 1982 expenditures from earlier anticipated levels by as much as 40 per cent, as a result of this government's taxation and energy policies, surely it is time the cabinet re-examined its policy, not only its national energy policy but its spending policy as well. The energy policy is as harmful in Atlantic Canada as it is in western Canada, which leads me to ask in Nova Scotian terms: How many storm signals are required by this government before they alter course? As I previously mentioned, disunity is rampant throughout the entire nation, for one reason or another.


An hon. Member:: Even in the Conservative Party.


Lloyd Roseville Crouse: The dream of self-sufficiency in energy continues to elude us. Our true unemployment picture today is in excess of one million Canadians. Our inflation rate is at an all-time high. The purchasing power of our dollar vis-a-vis that of the United States is at an all-time low. Sir, there are times when I hope-and there is someone mumbling opposite, surely in the next three weeks to a month he will have an opportunity to make a speech and 1 guarantee you one thing, Mr. Speaker, I do not make a habit of interrupting anyone. I will not interrupt him and I will ask him to do the same while I am endeavouring to put before this House the desperate needs of the Canadian people, especially of my people in Nova Scotia.
February 9, 1981


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: There are times when I hope that 1 am simply having a bad dream, but unfortunately it is only too true. Most of the problems to which I refer can be directly related to the policies and the programs which have been enunciated by this government, their action or inaction. Yet little or no mention of these awful problems appear in any of the government's projections. Even the government's financial-economic forecasts ignore the huge blank cheque demands being made as though this would never be used. But 1 fear that the $14 billion being requested here today in Bill C-59 is only the tip of the iceberg. A further blank cheque could be demanded later by a budget provision giving the government the power to impose, whenever it chooses, a Canadian ownership special charge on all oil and gas consumption in this country. It has been estimated that this charge could generate total revenues of up to $3.5 billion a year. If, as the government suggests, this cash flow is to be used as a means of obtaining investment capital then it would be sufficient to finance the debt charges on a borrowing of possibly $30 billion, or more. Moreover, if such a loan is used in the way this government plans, additional cash flow would become available to enable the government to compound its borrowing capacity. In total, then, as I see it under this system, the government could get its hands on something in the order of $50 billion or more. It has already had $12 billion last year, and it will have $14 billion when this bill is passed. That is, $26 billion, and we have only just started.
To obtain this enormous amount of capital all the government needs to do is issue a proclamation that the special charge is coming into effect. Of course, the economic consequences would be enormous, rendering the latest government forecasts essentially obsolete, but then, of course, they already are absolete when related to the October budget. The ability of the federal government to acquire this massive amount of money is stated explicitly in the budget and in the enabling legislation. Yet none of the new legislative proposals, including Bill C-59, say one word about how the money must be used and, as indicated, their inevitable economic and revenue impact is ignored in the government's forecasts. This government, as far as I can see, is giving itself a completely free hand to spend not only the $12 billion, plus today's $14 billion, but some $50 billion as it sees fit, without any specific statutory restraints. In fairness to the Minister of Finance, when bringing down his budget he did devote one brief paragraph to this subject. He stated:
Petro-Canada will be charged initally with the task of acquiring the Canadian operations of one or more multinational oil companies. As in the past, the financing for such acquisitions will be obtained in large part by borrowing in foreign capital markets. But additional infusions of equity capital may be required. To provide that capital the government will establish a Canadian ownership account. Revenue for the account will be provided by a Canadian ownership charge . . .
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That is the end of the quotation, Mr. Speaker. In addition to giving itself the right to impose an additional burden of up to $2,000 on every man, woman and child in Canada, the government has issued notice to the major foreign-controlled oil companies that their days in this country are numbered. In my opinion this take-over plan amounts to the most ambitious program of nationalist-inspired socialistic state intervention in the economy attempted by any government in Canada's history, and I have looked back over the pages for quite a number of years with respect to this issue.
Government officials deny that the plan constitutes expropriation of the petroleum industry, since the Prime Minister does not like these unpleasant words. However, the Minister of Energy, Mines and Resources (Mr. Lalonde), in other budget documentation, provides this information:
The ownership and control targets for large firms and public sector participation are voluntary. It would be preferable to meet the ownership targets by guidelines and flexibility, rather than through legislation. The government will, however, carefully review developments, to see whether satisfactory progress is being made under these voluntary ground rules.
When you analyse that statement, Mr. Speaker, the message is quite clear, namely, "Surrender or we will expropriate." Already Petrofina has been acquired at a cost of something in the order $1.46 billion. In light of what has been said by the Minister of Finance and by the Minister of Energy, Mines and Resources the question one must pose is: Who will be next? That is something we could sell lottery tickets on. It could be the new guessing game in Canada: Will it be Gulf Oil, will it be Texaco; will it be Imperial Oil; who will be next? There is no need to worry, if you guess one of the other companies and buy some stock in it that you will not be well paid for your efforts by the government. The government, backed up by its taxing and borrowing powers, will certainly make you a profit if the company you select is taken over by this government. Look what they handed to the owners of Petrofina by way of a profit in excess of market value. Given the amount of capital this government's blank cheque will permit it to raise for this purpose, no multinational oil company can rely on escaping the government's take-overs.
In my opinion, this type of massive expropriation program raises all kinds of policy questions.- Venezuela, Cuba and Brazil, to name but a few, all followed the take-over role with disastrous consequences for their countries' economies. Canadians, of course, have been led to believe that their governmental system is somewhat different to that in those countries. But now, in light of what is happening today, many Canadians are simply not so sure. We must ask ourselves: Do we really want the Prime Minister to be the head of Petrofina, Imperial Oil, Gulf Oil or Texaco? Do we really want him to delegate the position to one or more of the top mandarins in Ottawa who have so mismanaged the government's finances that last year the deficit exceeded $14 billion, and next year it is predicted to exceed something in the order of $14 billion but which now appears to be headed for $16 billion or more? With men like that minding the store we must ask ourselves what will really happen to Canada's economy.

February 9, 1981
Borrowing Authority
Despite the years of debate in this country concerning foreign ownership, it is still not apparent to me, although 1 read the Financial Post, the Financial Times and just about every financial paper I can find, that a national consensus has emerged approving the buying-back of foreign ownership, let alone having it done by the federal government. The basic problem is not a new one. Given a majority government, there are virtually no effective constraints on governmental spending power in Canada. After all, Parliament serves merely as a rubber stamp in approving the government's expenditure estimates. A majority government's spending authority is essentially unlimited. This government merely has to get its hands on whatever it wants, then it can fritter it away in any manner it likes.
As we all know, the party in power can ignore its own promises and its commitments. When the Conservative government was defeated, the Grits promised lower energy costs than what were outlined in our budget. Unfortunately, there have been eight increases in the price of gasoline since the Grits came to power on a promise of keeping prices lower than we predicted in our budget. So much for political promises. What it all boils down to is a question of trust. Without even being given any logical explanation for the proposed expropriation of an industry, can we be confident that the government has come up with the best solution for our country's problems?
Without even being told how the government could achieve its stated objective of maintaining competition among different companies with the same government ownership, can we be confident that the industry would operate efficiently enough to make the benefits of expropriation greater than the costs? Would the expropriation plan do anything to assure the adequacy and security of Canada's future energy supplies? Would net benefits really accrue to Canadians in economic terms if we take into account the $50 billion price tag which is involved?
In any event, what reassurance can we have, apart from the soothing words of the Prime Minister, the Minister of Finance and the Minister of Energy, Mines and Resources, that the billions of dollars being taxed from Canadians will not be spent for some purpose quite different to that which is proposed? Regardless of the merits or otherwise of nationalizing the petroleum industry, there is absolutely no justification for this House to give the government a $14 billion blank cheque. If we have so much money to spare, we must ask ourselves are there no other useful ways to spend that money?
What about research, industrial development and industrial strategy? If our industries are to be competitive in world markets, we must spend more on research in order to bring our products up to the competitive levels of other industrialized countries. Our primary industries need encouragement. In my riding, the fish processing industry in Lockeport could use a financial shot in the arm in order to become re-established after a disastrous fire six months ago. If this government wants more co-operation from all the parties in this House, it must come clean with its economic priorities and spending programs, so that all members will feel they have a part in reshaping the destiny of this country.
Unfortunately, the wording of this bill does not lead to that objective, but, rather, continues to bring about mistrust and concern over the true objectives of this government, its policies and programs. 1 ask the cabinet, "What are your plans for industrial development?" For example, what are its plans for the reconstruction of the National Sea Products plant at Lockeport. Lockeport is a hard-luck town, having lost a large part of its retail district some years ago and on July 23, 1980, the National Sea Products plant was destroyed by fire, throwing some 305 people immediately out of work and creating serious economic conditions for many more, since the plant represented more than 50 per cent of the economic base of the Lockeport area with a payroll in 1979 of approximately $2.5 million.
I am certain these facts are well known to the government as I forwarded numerous representations to the Minister of Regional Economic Expansion (Mr. De Bane) and the Minister of Fisheries and Oceans (Mr. LeBlanc) concerning the matter. In the interim, officials of National Sea Products have provided government officials with detailed plans for a new plant. But as late as June 27 I was informed that the company had not received an offer from DREE and, of course, without it the company cannot make plans to finance the loan it will require to rebuild this $11 million or $12 million plant.
In response to a question in this very House which I put to the Parliamentary Secretary to the Minister of Regional Economic Expansion (Mr. MacLellan) on January 13 concerning this matter, he stated:
A proposal will be made to the advisory board of the department within the next few weeks, and shortly after that the minister will be able to give a decision to the hon. member.
Since I received that response back in January, I must ask "Why the delay?" We seem to have millions of dollars to back up Massey-Ferguson and for other industries, some of which are in other lands. What is wrong with helping our own people who, through no fault of their own, cannot help themselves? The fire destroyed their only opportunity. They cannot turn to the land because the soil is not very productive. They can only turn to the sea, and this plant must be rebuilt.
Any money which is provided to National Sea Products for the reconstruction is simply seed money or pump-priming money. Merely to begin the construction of the plant would immediately put some of these people to work. Once the plant is finished, as is evidenced by its long history, the revenue accruing back to the federal government as well as the provincial government from the income tax paid by the company and the workers would soon bring back the seed money to Ottawa. Why the delay? Why is it that we in Nova Scotia are always given a blind eye and a deaf ear although we have not one, but two Liberals in the cabinet representing that province? I hope they will take my words to heart and do something about this matter in the not-too-distant future.
If this government is looking for ideas concerning the manner in which Canadians can be put back to work, let it
February 9, 1981

start with the Canadian businessman or the private sector. Canadian business must be involved and encouraged to invest. It is not overstating our case to say that we must retool our economy for the tough world which is coming. The Japanese and the Germans did it following World War II, and we can all see the results. To start us on the road will take some very smart businessmen and planning. It calls for confidence in our economy and nerve to take the risks but that, after all, is what private industry and private business are all about.
Next, we urgently need more research and development. The world of the 1980s and the 1990s will clearly be one in which economic and industrial gains, from which stem social gains, can only result from productivity gains. Among the most likely sources of these gains is improved technology. As Canadians we have become very comfortable in accepting the hand-me-down technologies of other countries. Our research and development expenditures, once 1.4 per cent of our GNP, have declined to a pitiful .9 per cent when the competition level is at least over 2 per cent.
If we wish to become technologically independent and competitive in the scientific seed-bed of economic progress we will have to do better. The alternative is that we pay the full price of being shut out of the growth industries of the future. I am not saying that investing more in research and development is the sole responsibility of the federal government. The federal government can help and encourage, but I believe the private individual and the private businessman must actually be the major contributor.
Another requirement of Canadian business is that it take an international approach to opportunities for growth. With our balance of payments situation and our limited domestic opportunities for economies of scale, our whole approach to doing business and expanding it must be built on a global perspective. The simple truth is that the future belongs to the world, and in this area, the federal government with its world-wide chain of high commissioners and trade commissioners can be most helpful.
Mr. Speaker, may I call it five o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Blaker):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Winnipeg-Assiniboine (Mr. McKenzie)-Pension Act-Inquiry respecting delegation of authority under Section 33; the hon. member for Renfrew-Nipissing-Pembroke (Mr. Hopkins)-Customs tariff-Request for removal of duty on body armour; the hon. member for Selkirk-
Garrison Diversion
Interlake (Mr. Sargeant)-Canadian Armed Forces-Reported testing of chemical defoliants.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's Order Paper, namely, notices of motions and public bills.


PRIVATE MEMBERS' MOTIONS
[Stage Direction]
Items Nos. 25 and 27 allowed to stand by unanimous consent.

Terence James (Terry) Sargeant: That, in the opinion of this House, the government should consider the advisability of taking those measures necessary to ensure that there is no damage caused to the Manitoba environment by the completion of the Garrison diversion unit in the State of North Dakota and, that such measures to be considered could include:
1.	the convening of a joint meeting between provincial, state and federal authorities affected by the Garrison project;
2.	the offer of legal and technical assistance to those citizen's groups in Canada now attempting to halt the progress of the Garrison diversion; and
3.	the bringing to trial in the World Court, the government of the United States, should Canada be unsuccessful in its efforts to receive satisfactory assurances regarding the future safety of her environment.
He said: Mr. Speaker, getting up to speak on this matter in the House is a little like the "good news-bad news" syndrome. The good news is that I always enjoy speaking in the House on matters of concern to my constituents. The bad news is that it is rather sad, after so many years, that very little has been done to solve or end this problem.
To understand the issue of the Garrison diversion unit fully, one must consider its history, particularly its history in North Dakota. The desire to use the waters of the Missouri River to irrigate the drylands of northern North Dakota is older than the state of North Dakota itself. The first documentation that shows an interest in using this water and in constructing such a diversion is dated 1887. At much the same time a constitutional convention which preceded North Dakota entering statehood took place, and a request was made of the United States Congress that such a diversion be built. Nothing was done. However, in the 1930s, when the dust bowl that ravaged much of the prairies, including North Dakota, occurred, the desire and the dream for an irrigation system using the Missouri River waters grew again. It became quite strong, and in 1935 appeals were made to the United States Congress for the construction of this diversion unit.

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Pursuant to those 1935 appeals, the United States Army Corps of Engineers and the American Bureau of Reclamation began considering the feasibility and the engineering possibilities of constructing dams along the Missouri River system. The plan put forward at that time was known as the Pick-Sloan Missouri River basin plan. In a document dealing with Manitoba and the Garrison Diversion Unit, it is stated that in 1943 Congress authorized the Army Corps of Engineers to construct the mainstem series of dams on the Missouri River and that at the time the United States Interior Department's Bureau of Reclamation was awarded the Garrison diversion unit. Work began on the Garrison dam in 1947, and it was completed by 1956.
Subsequent to the completion of the Garrison dam, proposals were put forward for the entire irrigation unit. The plans put forward in 1957 and 1959 did not meet the cost-benefit requirements of the United States government, and they were rejected. A plan was put forward in 1962 which was approved by the United States Congress in August, 1965.
The paper that I referred to earlier describes the unit that was authorized in 1965 as a "multi-purpose water resource project to divert Missouri River water into central and eastern North Dakota where the water will be used to irrigate 250,000 acres of land, provide a municipal and industrial water supply to 14 cities and furnish recreational and fish and wildlife opportunities throughout the area''.
What the plan does, essentially, is to take water from the Missouri River, transport it in an easterly direction across north central North Dakota into a reservoir called the Lone-tree reservoir. This reservoir acts as the hub of a wheel. Flowing out from the Lonetree reservoir the water goes northward through the Velva canal, eventually into the Souris River and into Canada. Flowing eastward through the New Rockford canal, the water eventually goes into the Sheyenne River and then into the Red River which goes into Canada. It flows southward along the James River feeder canal into the James River, the Wild Rice River and again into Canada.
The Lonetree reservoir is really the crux of the whole problem in Canada and more particularly in Manitoba. It is at the Lonetree reservoir that the water from the Missouri River breaches the continental divide and becomes linked with the Hudson's Bay drainage basin. This link-up eventually causes most of the problems. It brings water, biota, chemicals and parasites into the Canadian water system which are completely foreign to Canada.
Subsequent to the authorization given in 1965, construction on the Snake Creek pumping station which is an integral part of the system, was started in 1968. In 1970 construction of the McClusky Canal, one of the largest parts of the project, was started. The most recent work on the Garrison diversion unit was a tender called in 1980 for construction of the New Rockford canal.
In April, 1969, the Canadian government became concerned about some of the possible adverse effects that the Garrison unit would have in Canada. At that time the first of many notes between Canada and the U.S. state department and our
embassy in Washington was passed. Canada sent a note verbale requesting information on the Garrison unit. In October, 1971, the first diplomatic note was sent protesting the adverse effects of the Garrison diversion unit return flows. The Canadian concern reached the point in 1975 where the whole issue was referred by the United States and Canada to the International Joint Commission which, after an extensive and very good study, filed a report in 1977.
This is where I have a problem, Mr. Speaker. Since 1977 nothing has been done to implement the recommendations of the International Joint Commission. There have been no bilateral negotiations. Nothing has been done, and it is this lack of action that my motion addresses.
Let us consider the recommendations of the International Joint Commission. The report filed in 1977 clearly stated that the Garrison diversion unit, if constructed and completed as designed, would have adverse effects on the environment of Manitoba. It concentrated on three particular areas of concern. The first was water quantity; increased flows of water would come into Manitoba at certain times of the year. The second was water quality; there would be an increased chemical content in the water coming into Manitoba. The third, and probably the most critical in the long run, was the adverse impact that would be felt by the biological resources of Manitoba. This includes an impact on fish stocks in Manitoba, and wildlife stocks among other things.

I should now like to speak about the effects of Garrison on the fish stocks in Manitoba. First I would like to read into the record some comments I made in October, 1980, when I was speaking on a motion concerning fisheries in Canada. 1 shall quote from a technical report issued in February, 1979, by the Fisheries and Marine Service. It is entitled "Potential Effects of Exotic Fishes on Manitoba: An Impact Assessment of the Garrison diversion unit". 1 shall refer to three fish which will have serious impact in the province of Manitoba. First is the rainbow smelt. In this connection the report reads:
-we believe that rainbow smelt will be successfully introduced and established in Manitoba waters... We believe that smelt, when introduced to Manitoba, will cause the collapse of lake herring populations in Lakes Winnipeg, Manitoba and Winnipegosis and will have a major negative impact on the lake whitefish fishery in the north basins of Lakes Winnipeg and Manitoba.
Smelt will also have negative impacts on walleye fisheries in certain locales of Lakes Winnipeg, Manitoba and Winnipegosis. Declines in the abundance of higher-valued species will result in decrease in fishermen's incomes such as occurred in Lake Erie during the late 1950s.
The report goes on about the gizzard shad. It reads:
-we believe that gizzard shad will be introduced and can be established in Lakes Winnipeg, Manitoba and Winnipegosis. There are suitable environmental and habitat conditions, food supplies and spawning areas for establishment of gizzard shad populations in these waters . . . Magnitude of impact may range from minimal impact to the worst possible impact of total collapse of walleye and sauger populations in these lakes.
With regard to a third fish, the Utah chub, the reports reads:
In summary. Utah chub have a high reproduction potential, a potential for population irruptions and likely can establish in Manitoba waters .... Further-
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more, if in Manitoba waters Utah chub will have a negative impact on indigenous fishes and may become a nuisance to anglers and commercial fishermen (through sheer volume of catch in the nets). We expect Utah chub will compete with whitefish and walleye for food and likely displace, to a major extent, existing forage species, particularly minnows . . . .Therefore, we consider this fish to represent the same potential for major impact as rainbow smelt or gizzard shad.
Now I shall quote some figures. The report gives a table of percentage reductions in population size. They use three figures, the lowest, the most likely, and the maximum. 1 will use only the most likely figures.
In the Lake Winnipeg north basin, the effect on the lake whitefish will be a 50 per cent reduction; on lake herring it will be 75 per cent; and on walleye and sauger 50 per cent. In the south basin of Lake Winnipeg, the effect on the lake whitefish will be a 5 per cent reduction; on the lake herring a 5 per cent reduction; and on walleye and sauger a 50 per cent reduction. In Lake Manitoba, the effect on the lake whitefish will be a 30 per cent reduction; on the lake herring it will be 75 per cent; and on walleye and sauger 75 per cent.
The end result of this potential hazard to Manitoba fisheries will be nothing short of disastrous. In all the studies and the bantering back and forth there is one very important group of Manitobans who have been ignored. I am referring to the native people in the province of Manitoba. In a report prepared by a Winnipeg consulting firm, Rieber-Kremers and Associates in 1969, concerning the impact of the Garrison diversion unit on Manitoba Indian communities, they point out that at present some 17,000 Manitobans would have their livelihood seriously affected. Projecting into the year 2033 when the Garrison Diversion Unit is expected to have its greatest impact, the population figure at that time is projected to include 37,000 Manitoba Indians. At present these people rely on the fishing industry for their livelihood. In 1979 the value of the fishing industry to natives in Manitoba was $1.9 million. As well, native people rely on fishing for subsistence. In other words, they catch fish to stay alive.
I shall now quote from the Rieber-Kremers report as follows:
Wc now come to those impacts which are not known and have not been dealt with in government sponsored studies, namely, the area of socio-cultural impacts. The Indian people in the impact zone arc identified as having a viable culture distinctly different from other Manitobans. Attempts on the part of the IJC and government agencies to analyse the impacts solely in the form of bio-physical terms have led to the absence of a detailed examination of the impact on the socio-cultural base resident within the communities and of possible far-reaching changes that could occur, which would have a serious and lasting effect on daily life. The threat of the project is not only to "income", as described above, but to the very survival of a whole way of life based on the land and water. This area of impact is perhaps the most serious and yet most difficult to quantify. However, it can be stated with reasonable certainty that because both commercial and subsistence fishing arc an integral part of the communities' socio-cultural structure, that this base will be detrimentally affected as a result of the project.
To come a little closer to home, 1 want to speak about a community in the northern part of my constituency called Easterville. It has 800 to 900 people. Almost all of the people are native, non-status and status Indians. In this community there are roughly about two dozen full-time jobs, such as working for the band office, village office, the school, the co-op
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store, and operating the "honey wagon." That is about it. There are no other full-time jobs in Easterville. The fishing season comes twice a year. During the fishing seasons almost every adult male makes his livelihood by fishing. That is the only income for the year for the vast majority of people in this community. If the fishing industry is reduced by 50 per cent, as has been projected because of the adverse effects of Garrison, serious effects on this community will be untold. I just hate to think of how it would hurt such a community.
Let me now summarize. We in Manitoba have not been reassured in the past with regard to the government's concern about the Garrison diversion project. We have not been reassured by the United States State Department or the Executive Branch that the Boundary Waters Treaty of 1909 will be adhered to. Construction goes on all the time while we gel these reassurances. When President Carter was in power we had a brief respite when he cancelled a number of water projects. However, in the last year, in a mad scramble for votes, he went soft on environmental issues and allowed a rather sizeable appropriation for Garrison to get through the House. Nor are we reassured by what we see in the immediate future.
The new governor of North Dakota, Governor Olson, said that it was up to Manitoba to prove that any harm will come to the province. We have the proof from the IJC and from many other studies. We cannot accept that kind of an argument. We are not reassured by new President Reagan and his interior secretary Watt who have never been especially strong on environmental issues in the past.
The bottom line for myself, for my other colleagues from Manitoba, and, in fact, all Manitobans, is that we oppose the Garrison diversion unit as designed. If we are sending out signals to the Americans, 1 want to make it fundamentally clear that we do not mean to interfere in their internal politics. We do not care what they do with the water inside North Dakota. But when that water threatens the very livelihood of Manitobans, then we do care.
As a politician representing a Manitoba constituency, I must accept the doubts. We cannot afford to take the risks of allowing any of this foreign biota to come into Manitoba. I might remind hon. members that in the lakes of Manitoba the carp fish was not native to Manitoba until some fisherman brought it in there in his bait pail. Carp fish now run rampant through all of the major lakes in the province. I might also point out that in Australia rabbits were not native. I think we all know what has happened in Australia as far as the rabbit population is concerned, only two of which were originally brought into that country.
Therefore we cannot allow one bucket of North Dakota water containing a gizzard shad, a rainbow smelt, a Utah club, or whatever, to come into Manitoba. We will not accept the fish screen which has been proposed by the American constructors of the Garrison diversion unit. It is not feasible that such a screen could sucessfully protect Manitoba waters. We will not accept the feeble platitudes of American politicians, such as Governor Olson, that there is no proof that harm will

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come to the province of Manitoba. The only thing we will accept, and I hope that the government sitting opposite listens to us, is that not one drop of North Dakota water from the Garrison diversion unit crosses the boundary into Manitoba. That is the only thing.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, 1 am pleased that the hon. member raised this important matter. The discussions are indeed at present at a critical level. It is an issue on which Canada's stand is supported by all parties in the House.
I should like to begin by restating once again the government's continuing, firm and unchanging position on the Garrison diversion project. The government is unalterably opposed to any transfer of water from the Missouri basin to the Hudson Bay basin which would involve the transfer of foreign biota, that is, foreign fish species, parasites or diseases. The government's position, which is supported by the findings of the International Joint Commission, is that any such transfer would have serious and totally unacceptable consequences for the people in the province of Manitoba.
The government has received a number of suggestions from other hon. members in the past on possible alternative approaches toward reaching the goal on which, I think, all members of the House are agreed. 1 am pleased to have the opportunity to review past endeavours and to bring hon. members up to date on the current state of negotiations.
Since April of 1969 the Government of Canada has made its concerns about the Garrison diversion unit known to the U.S. government in a number of official communications. In a note of October 23, 1973, the Government of Canada informed the Department of State of the continued grave concern of the Government of Canada over the project's potential implications for Canada, and its conclusion, based on studies conducted in both countries, that the proposed project would run counter to the obligations assumed by the United States under article IV of the Boundary Waters Treaty. Article IV states that:
-waters flowing across the boundary shall not be polluted on either side to the injury of health or property on the other.
The Government of Canada welcomed the assurances given in the reply U.S. note of February 5, 1974, that the United States:
-will comply with its obligations to Canada not to pollute water crossing the boundary to the injury of health or property within Canada. No construction potentially affecting waters flowing into Canada will be undertaken unless it is clear that this obligation will be met.
The governments of Canada and the United States subsequently asked the International Joint Commission on October 22, 1975, to undertake an impartial, binational investigation of the transboundary implications of the Garrison diversion unit, and to recommend such measures as might be taken to ensure that Canadian waters are not polluted to the injury of health and property. In so doing, the commission was asked specifically to consider the transboundary implications of the project
for water quality and water uses and the nature and extent of the impact on commercial and recreational fisheries in Manitoba of the possible introduction from the Missouri River system through the Garrison diversion unit of foreign biota.
When it became clear that the International Joint Commission could not complete its study before important scheduled budgetary decisions relating to construction of the Garrison diversion project were to be taken by United States authorities, the Government of Canada became concerned that these decisions might not be based on a full knowledge of the potential effects of such construction on Canada. Accordingly, on October 12, 1976, the Government of Canada requested:
-that further construction and decisions on construction of the Lonetree reservoir be deferred until after the commission's report has been received and subsequent consultations between the governments have taken place.
In making this request, the Government of Canada expressed particular concern that filling or operation of the reservoir could affect waters flowing into Canada.
In February of 1977, the U.S. government in its reply undertook that "a contract for the construction of the Lonetree dam will not be let until after the report to governments of the International Joint Commission has been received and subsequent consultations between the two governments have taken place."
Meanwhile, the International Joint Commission had established the International Garrison Diversion Study Board, composed of experts from both governments, to carry out the necessary technical studies for its investigation. The board reported in January of 1977 that:
-the Garrison diversion project as envisaged will have adverse impact on water uses in Canada.
The board projected a total annual loss to the commercial fisheries of Lakes Winnipeg and Manitoba in the millions of dollars.
The International Joint Commission conducted public hearings to receive comment on the board's report. On the basis of the board's report, testimony received at its public hearings, and other submissions, the commission reported to governments on September 16, 1977.
The commission concluded that construction and operation of the Garrison diversion project as envisaged when the study began would cause significant injury to health and property in Canada as a result of adverse impacts on water quality and adverse and irreversible impacts on some of the more important biological resources in Manitoba. The commission recommended that portions of the project which could affect waters flowing into Canada not be built.
At that time it was understood by the Government of Canada that the U.S. Department of the Interior was preparing a modified Garrison plan which would take into consideration both the expressed Canadian concerns and the recommendations of the International Joint Commission.
A draft modified plan was published by the U.S. Department of the Interior in February of 1978. In the view of
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Canadian federal and Manitoba officials, the draft plan did not appear specifically to consider the transboundary effects of the project which were detailed by the International Joint Commission. Canada again made it clear to the United States that the risk of transfer of foreign biota to the Hudson Bay drainage basin had not been eliminated or significantly reduced by the draft revised plan. The plan indeed anticipated the transfer of such biota to the Red River via the Sheyenne River. The International Joint Commission had characterized the need to prevent biota transfer as "overriding everything else".
Canada again requested that these observations be passed to all relevant agencies of the United States government and that they be provided to Congress which had expressed concerns regarding the international effects of the project during earlier consideration.
Over the summer of 1978, Congress discussions took place and they seemed to ensure that Canadian concerns were fully recognized and respected. Canada expected that the U.S. Department of the Interior would take into consideration all these matters.
We were therefore deeply concerned by indications that the recommended plan of the Department of the Interior would, in fact, provide for transfers of water, and hence foreign biota, from the Missouri to the Hudson Bay drainage basin.
Accordingly, in March, 1979, the Government of Canada advised the U.S. government that it would consider the submission to Congress for authorization of any new Garrison diversion plan involving interbasin transfers before the U.S.A. had the benefit of formal consultations on it with Canada as contrary to the spirit of U.S. assurances and the recommendations of the International Joint Commission. These assurances have been recognized by the Congress, and the need for such consultations has been identified by the International Joint Commission and acknowledged by U.S. authorities.
At that time Canada requested consultations on any new Garrison diversion plan before such a plan was submitted to Congress. We also requested an assurance that a final plan would not be espoused by the United States administration unless it could be demonstrated that U.S. treaty obligations and commitments to Canada could be met, with full consideration given to the recommendations of the International Joint Commission.
Consultations were held in March, 1979, at which time Canada reiterated its clear and unchanging position, and the United States once more renewed its assurance to honour its obligations under the Boundary Waters Treaty.
The Government of Canada was therefore seriously concerned when, in June, 1979, the U.S. Congress appropriated an additional $9.7 million for work on the Garrison diversion project. This appropriation took place in spite of vociferous Canadian objections, including a strong diplomatic note of June 18, 1980, and vigorous efforts on the part of the federal and Manitoba governments, individual Members of Parlia-
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ment, and private citizens' organizations. While the directive accompanying the appropriations bill specified that the funds not be spent on project features that would directly affect Canada, it was disturbing to note that the funds were appropriated for use on the currently authorized 250,000 acre plan, and not a modified plan, which we had understood to be under consideration.
In a diplomatic note dated October 1, 1980, Canada pointed out that in the absence of any significant project re-design new construction would appear to be leading inexorably toward completion of features that would ultimately result in violation of the Boundary Waters Treaty. We pointed out our understanding that satisfactory resolution of the serious bilateral implications of the project would precede any further decisions which would allow new construction to begin.
The authorization of new funds under a plan that has not been modified in any way to take into account Canadian views or the conclusions and recommendations of the International Joint Commission is a cause of deep concern to us.
By diplomatic note of December 1, 1980, Canada received from the United States an outline of just how this new appropriation would be spent. The expenditure of some of the funds, we were told, would be deferred until after consultations between the two governments. The U.S. Office of Management and Budget has since required that the funds be spent; however, we have been assured that the funds will be expended only in the West Oakes test area, which does not affect Canada.
We now stand at a critical point in bilateral consideration of this issue. The United States has proposed that a process of bilateral consultation commence in March of this year. Canadian scientific and technical experts have been briefed on the latest U.S. technical developments in order that consultations can be based on a firm understanding of the technical issues involved. Such a process will certainly be approached with caution, but we should not overlook the potential for favourable resolution of this issue, which is perhaps greater now than before.
The stage is set for consideration of the issue on a basis more suitable to mutual agreement, in that the State Department has proposed that the upcoming consultations will be centred on possible design modifications to the reduced 96,300 acre plan. The State Department has also agreed that consultations will be based on the recommendations of the International Joint Commission and will deal with the Canadian objection to any inter-basin transfer of water. In other words, Canada's basic and often repeated concerns have been accepted as the basis for consultation. The stage is finally set for constructive discussion of those issues which are crucial to Canada.
This meeting would appear to incorporate the hon. member's suggestion as put forward in the notice of motion for the convening of a joint meeting between provincial, state and federal authorities affected by the Garrison project. The bilateral consultations proposed will provide ample opportunity for affected parties to make their views known. The Government
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of Canada certainly intends that the government of Manitoba will be fully involved in all preparations for the consultations and will be represented among the Canadian participants.
Clearly, any developments must be viewed within the context of the new United States administration and Congress. The Government of Canada is considering and re-evaluating the most effective methods of ensuring that the new Congress and administration are fully aware of the seriousness of Canadian objections to the project. Our officials in Washington have been working actively over the past few months on this. All hon. members are aware that discussions are now under way to arrange a visit by President Reagan to Canada early in his term of office, and this will provide another opportunity to review the issue at the highest level.
The federal government and the government of the province of Manitoba are working together, and it is important that Canada speak with one voice on this issue. The two governments, the Government of Canada and the government of Manitoba, have well in place the legal and technical bases on which Canadian opposition to the Garrison project rests, and this co-ordination has been one of Canada's strengths in discussion of the issue to date. The individuals and the citizens' organizations that have made their viewpoints known have also contributed.
While we are dealing here with a possible violation of an international treaty, one perhaps would not want to speculate too much on possible sanctions, although the hon. member has raised this possibility. I think it is important to remember that Canada has had long and friendly relations with the United States. Our relations have generally been based upon co-operation and respect for international obligations, and we hope that this final round of negotiations will result in a satisfactory arrangement in which Canada's environment is protected.


Charles James Mayer: Mr. Speaker, this is a very serious matter for the province of Manitoba. 1 have stated for a long time and I have felt for a long time that it is certainly not a partisan issue. It is one which 1 hope transcends partisan political boundaries, and 1 am glad that the hon. member for Selkirk-Interlake (Mr. Sargeant) raised this question this afternoon through a private members' motion.
I am not sure I agree totally with some of the things the hon. member requests in his motion, but I certainly agree with the intent of the motion. We cannot for one lapse of time take for granted that we will not have problems with our water if it comes from the United States into Canada as a result of the transfer of water from the Missouri to the Hudson Bay basin. I will not get into the engineering end of this, or why we do not want the water, because I think these were covered quite adequately by the hon. member for Selkirk-Interlake.
What does concern me is the fact that this is an international affair; there can be no doubt about that. This matter involves an international boundary and, as such, the responsibility for showing leadership with respect to Manitoba and Canada clearly rests with the federal government.
When I see a private member's motion such as the one raised here this afternoon, I am led to comment that the federal government has not been doing what it should be doing in terms of taking leadership and seeing that the area of Canada which will be affected is aware of what the federal government is doing and, not only aware, but also satisfied that what the federal government is doing is what it should be doing.
Groups have been organized in Manitoba to go down to North Dakota to protest the further construction of the dam in question.
The thing that concerns everybody is that each year as the project goes on more money is allocated to it, and each year that more money is allocated to the project we get impetus to have the project completed. With the completion of the project we will get the transfer of the water and therefore the problems. This is borne out in local papers in Manitoba.
I have an article here from the Daily Graphic of Portage la Prairie, November 17, 1980, reporting that the U.S. consul-general in Winnipeg urges Canadians to be heard. Michael Carpenter, the U.S. consul-general in Winnipeg, stated:
Manitobans must stand up and be counted in their opposition to the Garrison diversion project, the U.S. consul-general in Winnipeg said in Portage la Prairie Saturday evening.
Here is an American consul-general saying Manitobans must stand up and be heard. Here is an article from the Brandon Sun of November 19 last year and the headline is "Flashing Amber Signalled for Garrison Construction". Again, I am talking about the proceeding of the construction of the dam.
There is an article in the MacGregor Herald, which is a local paper in southern Manitoba, of November 19, and the headline is "Audubon Society's Case No Comfort to Canada". 1 will quote from the first paragraph:
A spokesman for Canadian groups opposing the Garrison diversion project said he was not optimistic about the National Audubon Society winning its case to halt or scale down the project after hearing the proceedings of a U.S. federal court case in Washington Friday.
The Audubon Society is an American based society. Its members are also concerned about the ongoing construction and completion of the dam.
Another headline from a local paper dated December 10 reads "North Dakotans Not Getting anti-Garrison Message". I will finish with a quote as recent as January 21, and the headline is "North Dakota Governor's Statements on Garrison Deplored by Manitobans". It goes on to say:
A joint meeting of Canadian and American citizens in Jamestown, N.D. has produced a statement that "deeply deplores" North Dakota Gov. A1 Olson's recent assertion that the Garrison diversion project should proceed until it is proven it could harm Manitoba's fishing industry.
We do have a lot of concern. There is concern on both sides of the border. If the federal government were doing what it should be doing, and that is showing some leadership in this area, we would not necessarily be having all of the concern by
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local people as to the detrimental effects this project will have on Canadians, Canadian waters, and Canadians' ability to earn their livelihoods on into the future as they have in the past. On this issue there can be no compromise. There is reference in the motion before us to taking the American government to court. I certainly would think that it would be something of a last resort. If that is what we have to do, then we have lost our case.
The only way that Canada is going to be saved from the harmful effects of the Garrison diversion project is if the water is not diverted. There is no engineering solution that will let water come without some of the problems coming with it. Until there is such a time, and 1 doubt very much there will be a satisfactory engineering solution, there is really no compromise as far as Canada is concerned in this matter. We have concerns with pollution of water, we have salinity problems which will come down Canadian rivers.
I have spoken to city officials in the town of Portage la Prairie, a city of about 15,000 people, and they estimate they would have to spend as high as $3 million on a water treatment plant to keep their water at the standards that it is now if water is transfered from North Dakota into the Assiniboine River. Those are the areas of concern local people have. There is really no solution in terms of the fishing industry in Manitoba as there is for cleaning up the water by spending millions of dollars.
Once the water is diverted, with it comes the foreign species of fish, the fish diseases, and the ensuing problems. Then it will be too late to reverse the situation. You cannot say to the fish, "Hey, you fish, go back to North Dakota. You are not wanted here." That is an impossibility, and we all know that. Our concern is very legitimate and it gets to be more disconcerting all the time as we see this project getting closer and closer to completion by the fact that there has been additional money spent on it.
It is clearly a federal government responsibility. The previous government speaker mentioned the government is seriously concerned. I should hope ministers would be more than seriously concerned. As a federal government, they should be letting the government of the United States know in as strong as possible diplomatic language that we cannot, under any circumstances, accept water from the United States.
The previous speaker also mentioned they would like to have the provinces involved in preparations for any meetings. That is very nice, but I think the federal government should clearly show some responsibility in taking the lead and seeing that they are not only involved in preparations but that the federal government go ahead and do what has to be done in terms of letting the Americans know what our real feelings are about this.
I have raised this question in the House several times before. One of the suggestions made was to take an all-party delegation from this House to the United States at the appropriate time. I have spoken to the minister of external affairs and he says that he does not know whether this is the appropriate time. We know now that Mr. Watt is the new Secretary of the
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Interior. It seems to me that now is the time we should be approaching Americans to see, as the new administration gets set up in Washington, that they know of our concerns on this side of the border and what our feelings are. It is deplorable that the federal government has not taken any more of a lead in letting the Americans know up until this time what our position is. I say that because, upon reading the local papers, I notice a lot of concern that the federal government does not know what is our position.
We hear,a lot of concern about the east coast fisheries treaty. Nobody is saying that is not an area of concern; it certainly is. But if the fish treaty is not settled this year or next year, the fish will still be there. The point with this Garrison problem is that once the diversion is complete we will have the American foreign species of fish in our water systems forever. I would like to see more emphasis put on this matter by the federal government. It is clearly a federal responsibility because it crosses an international boundary.
One of the things pointed out to me was that both the senators from North Dakota are on the appropriations committee, and that is very significant. There could possibly be two votes for any future appropriations for Garrison. Again, I must emphasize that this is not a partisan issue, and I am glad to see it raised in the House. I am not so sure the previous NDP government of Manitoba did as much as it could have in terms of letting the Americans and our federal government know that as the construction of the dam proceeded problems would be caused. I have heard criticisms of the present government of Manitoba as a result.
I am familiar with some of the things the provincial government is doing in Manitoba. It has done things that I would have sooner seen the federal government do. For instance, the premier of Manitoba has sent telegrams to several American elected and appointed officials pointing out Manitoba's objections to the Garrison project. I am sure that would have been better done by the federal government. Because of a vacuum at the federal government level, the provincial government has had to step in and we have seen citizens' groups step in. Had the federal government been doing its job, we would not have heard the concerns expressed by local citizens and by provincial, municipal and urban governments in Manitoba.
I do not wish to speak at great length on this bill. Many of us from Manitoba have shown a great deal of interest in this matter in the past number of years. I should simply like to close by saying it is high time the federal government showed some leadership in this affair, did more than express its serious concern, and offer to involve the province and its local people in it.
I think it is time they took the lead and saw to it that everything was set up, so that people, all levels of government and all parties in this House were involved in letting the Americans know that it is the appropriate time before the new American administration gets too far along in its life. We in Manitoba cannot, under any terms, accept water from the Missouri basin being transferred into the Hudson Bay basin.

February 9, 1981
Garrison Diversion


Mr. Roger Simmons (Parliamentary Secretary to Minister of State for Science and Technology and Minister of the Environment):: Mr. Speaker. I should like to say a few words on the subject raised by the hon. member for Selkirk-Interlake (Mr. Sargeant). He covered a fair amount of what I intended to say about the background of the project. I am grateful to him because it allows me to get on to the second part of my remarks. He covered quite adequately what is involved in this irrigation project. He explained how the water would get from the Missouri basin to the Hudson Bay basin. Also he covered some concerns which I intended to express in so far as the introduction of foreign species into Canadian waters is concerned. I thank him for covering those areas quite adequately, and I would like to move on to the second part of my remarks.
In so doing, 1 should like to respond briefly to the comments of the hon. member for Portage-Marquette (Mr. Mayer) which were, by and large, helpful, but which in one detail only tended to contradict his appeal for non-partisanship. Having made that appeal a couple of times, he then went on to imply that somehow the Government of Canada had not taken a position.
I believe those members who were listening will attest that the position of the Government of Canada was made as recently as 5.25 this afternoon. This is not the first time the position has been made, but in case the hon. member did not hear the hon. member for Trinity (Miss Nicholson) articulate the position of the Government of Canada on this matter, I should like to repeat it for him. At that time my colleague said that it was the firm and unchanging position of the Government of Canada that we are unalterably opposed to any transfer of water from the Missouri basin to the Hudson Bay basin which would involve the transfer of foreign biota, that is to say, foreign fish species and parasitic diseases. She went on to say that we were supported by the findings of the International Joint Commission, that any such transfer would have serious and totally unacceptable consequences for the people and the province of Manitoba. Those comments were made by my colleague approximately 35 minutes ago, but obviously he did not hear them. It is a fairly clear position which indicates our concern. We have made that concern known on a number of occasions to the people in power in Washington.
At this point I should like to review some of the things the government has done to ensure that the ill-effects about which the hon. member for Portage-Marquette and the hon. member for Selkirk-Interlake talked do not take place. First, it is important to stress that the Government of Canada and the government of Manitoba have worked quite closely together on this particualr subject, as it is understandably a mutually-shared concern. Since at least 1969 there have been constant consultations in Canada to ensure that all our respective concerns were taken into account and were properly addressed. Manitoba officials made an important contribution to the IJC study to which the hon. member for Selkirk-Interlake referred. The government of Manitoba has been an active participant in our meetings with United States officials on this subject.
We believe we have achieved substantial progress in having our concerns addressed by the United States. The United States government, in a number of official communications, has assured us that it would honour its treaty obligations not to pollute our waters so as to injure health or property in Canada. That is a very important assurance. It has also pledged that the construction and operation of works of direct concern will be held in abeyance until we have been consulted.
Hon. members are aware that the United States Congress has recognized our concern. In my view this has been a major step forward. This degree of assurance that Canadian interests were acknowledged and were to be considered has not always been the case. In the early 1970s the proponents of the project appeared to assume that the massive project would have little or no adverse impact of any kind, let alone effects on Canada. At that time the emphasis was on engineering studies. Information on flow returns, the quality of those returns and specific areas to be irrigated, had not been fully developed.
Through an extended process of keeping pressure on for more information, we know with far more precision what is likely to happen. Through a process of analysing that information, providing the United States with our views, and informing them very specifically and firmly of our concerns, they know what we are talking about. 1 believe it would be appropriate, then, to review some of the things we have done to ensure we knew what was happening and what was likely to happen to Canada, and how in turn we made sure the United States knew our views.
In 1969 the Canadian government sought detailed information from the United States government on the project. However, at that time environmental studies had not been undertaken and therefore specific details were absent. At that time the United States national environment policy act had not been signed into law. Indeed, it was not signed into law until January 1, 1970.
Meetings were agreed to in 1973 to exchange information and views. However, even by then Canadian authorities were expressing some reservations. By 1973, although available information was still very much incomplete, a very stiff diplomatic note was sent to the United States expressing our concern and demanding assurances that we would not be injured.
It should be noted that during this time period and, indeed, down to this day, a number of organizations in the United States were also raising what United States courts found to be legitimate concerns. In particular. United States courts offered a number of judgments on several factors relating most directly to impacts on wildlife and the adequacy of the environmental assessment process undertaken by the proponents.
In any event, in early 1974 the United States government replied to our 1973 note with the first of a series of assurances that we would be protected, that is, the United States government would, as we would in our turn, honour its treaty commitment under the Boundary Waters Treaty not to pollute waters flowing into Canada to the injury of health and prop-
February 9, 1981

erty in Canada. Further it agreed to a process of ensuring that we would be heard and our problems would be taken into account when works which would potentially affect us were under consideration.
The next major step forward was to refer the question to the IJC for an impartial study. The results of that study have already been detailed by the hon. member for Selkirk-Inter-lake. In summary, the commission concluded that Canada had every right to be concerned.
Following the IJC study, both Canada and Manitoba have continued to keep the pressure on. The next major development was the proposal by the United States administration, or more properly the Department of the Interior, to Congress, of a plan which would irrigate some 96,000 acres instead of the originally proposed 250,000 acres. In 1979, by means of diplomatic notes and in meetings, Canadian concerns focusing on the problem of biota transfer were expressed concerning those features of the 96,000-acre plan which were common to the original plan, namely, the substantial interbasin transfer of water involved.
During the period from the release of the IJC report until the Canada-United States discussions on the revised plan in 1979, the United States Congress also took note of Canadian concerns. Until after the release of the IJC report, the United States Congress had not specifically indicated that funds for the project were not to be spent on project features directly inimical to Canadian interest unless and until we have been consulted. While we regret that Congress had not earlier taken our concerns into account, the conditions applied after the release of the IJC report have continued.


The Acting Speaker (Mr. Blaker):: Order, please. The hour provided for the consideration of private members' business having expired, I do now leave the chair until eight o'clock this evening.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

[Stage Direction]
[ English]

[Stage Direction]
The House resumed consideration of the motion of Mr. Bussieres (for the Minister of Finance) that Bill C-59, to provide supplementary borrowing authority, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Borrowing Authority
Lloyd Roseville Crouse: Mr. Speaker, when the House went into private members' hour at five o'clock I was speaking on Bill C-59, an act to provide supplementary borrowing authority. At that time I pointed out that the role business and government can play in strengthening our economy is an important one. I stressed that one of the requirements of Canadian business is that it takes an internationalist approach to opportunities for growth in this country. I also stressed that more research and development is required, not necessarily by the federal government alone but also by the business community.
Of course, there is a special role for the federal government. In my opinion the government's attention should be focused on economic policy rather than on disputes over power and jurisdiction. What is needed today is a farsighted and responsible framework of economic policy, including appropriate fiscal and monetary approaches. To bring this about I believe leadership is required, and that leadership must realize the three most important objectives of this government should be the stimulation of private investment, the lowering of the inflationary spiral and the development of petroleum self-sufficiency, all of which could be the springboard for future growth.
Just as 1 believe that the Canadian businessman has to learn how to work with governments, and in particular the federal government, I also believe that it has to improve its approach to the private sector. If business is to do its job for Canada it needs respect from the government, not confrontation. It needs recognition of its role. It needs room to breathe. It must not be muzzled and smothered by bureaucratic red tape. This has happened under the government's national energy program. The results have been chaotic. Surely it is not too much to ask that the energy antagonists sit down, consult and mediate, for we desperately need an end to the present unnerving uncertainty which the present situation is producing.
Another recurring need for all Canadians is a marked improvement in the efficiency and speed of government decision-making. As I stated earlier, the development of an entire community, namely, the town of Lockeport in Nova Scotia is at a standstill as a result of this government's inability to reach a decision concerning the cost and size of the fisheries processing plant to be replaced. I say to the government, through you, sir, we can and must do better.
Unfortunately, today this government is placing great emphasis on state control. Yet state management of the Canadian National Railways in Nova Scotia leaves much to be desired. For example, on November 5, 1980, we in Nova Scotia were informed by the Canadian Transport Commission that it planned to remove 11 agency positions in our province, eight station buildings and 12 contract on hand representative positions. Of the 11 agency positions to be removed, seven are in my constituency at Chester, Mahone Bay, Lunenburg, Liverpool, Lockeport, Shelburne and Barrington Passage. Of the eight railway stations to be removed seven are in my riding at Chester, Mahone Bay, Lunenburg, Liverpool, Lockeport, Shelburne and Barrington Passage.

February 9, 1981
Borrowing Authority
Of course, this type of action is a far cry from the promises made by the Right Hon. Prime Minister when he was campaigning for votes in my province-promises which were endorsed by all Liberal candidates campaigning ad infinitum up and down the province. At that time the Prime Minister said, as reported in the Halifax Chronicle-Herald on January 26, 1980:
Wc will use revenues raised through energy taxation to make big projects happen-railway building, pipeline construction, a western electrical grid and coal liquefaction are only a few of the projects that the energy boom could produce.
How can one equate that kind of promise with the actual fact? Is it any wonder that Canadians and Nova Scotians in particular are mistrustful of any promises which are made by this government. Mr. Speaker, if you call a proposal to remove 135 miles of railway line plus eight station buildings in my province a program of building railroads, I do not want to be around if ever a plan or program of railway destruction is developed. Heaven help us down our way.
The strange fact about all these proposals is that they are made at the time when economic conditions on the south shore of my province have been slowly and gradually improving, especially in the Bridgewater area with the advent of Michelin Tire. That town has grown from 4,000 people to 8,000 people. The fisheries are expanding gradually and the Bowaters paper plant in Queen's county is expanding. Yet, with all these improvements, the CNR was unable to get their share of this new business. This leads me to ask, "How much growth and expansion must take place before this state managed CNR can get its share of the action?" Or to put it yet another way, how long will it take Petro-Canada gas stations to follow the scenario I just mentioned with regard to CNR railway stations?
In closing, I wish to remind this government that it cannot provide prosperity within this nation by nationalizing our industries. The most important requirement for prosperity in Canada during the 1980s and into the future is unity. We are one country and I hope we always will be, for it is not only a sound principle, but it makes good economic sense.


Ian Deans: Mr. Speaker, 1 want to say a few words about the borrowing authority and the reasons why the government is forced to return to this House of Commons time after time to ask permission to borrow substantial sums of money. I spoke to people last week both in my constituency and in Windsor, many of whom expressed a concern about the way in which the government spends tax dollars. Because of the difficulty for the average individual to meet his or her tax bill, there was a sense among these people that the federal government was not nearly careful enough in the expenditures it undertakes. As one lady said to me, "If it were their own money, I wonder if they would spend it in the same way." 1 could only answer her that I doubted it very much.
Therefore, on behalf of the people whom I represent and, I believe, on behalf of a large number of people throughout Canada, I would like to express a sense of frustration. Many people have almost reached the point of resignation to the government spending money in a way which they themselves, given the opportunity and the knowledge necessary to make an enlightened decision, would not follow.
The government is borrowing money because it has not managed the economy well. It has run into deficits. Over the years it should have accumulated a surplus because Canada was operating for many years at a considerable high in economic terms. The government ought to have been able during those years to have accumulated a surplus which would have enabled it to offset periods of economic dislocation. Unfortunately, the government never seems to approach its responsibilities in that frame of mind.
With regard to the way in which this bill is written and presented, Mr. Speaker, it is time the government took a long and serious look at what it puts before Parliament. Before the government asks Parliament to approve further indebtedness, surely it has the obligation to file with us in some considerable detail the way in which it intends to use the money for which it seeks authorization to borrow in whatever currency in the world it desires. Surely, there is a requirement for the House of Commons to evaluate the expenditure program of the government against its capacity to raise money 'domestically before coming to any conclusions about whether or not the government ought to be given the authority to borrow.
Surely there should be a clear statement from the government about the areas of the economy where it feels growth will take place so we in the House may evaluate the projections against government expenditures and revenue potential to determine whether or not there will in fact be the capacity generated over a period of time-one year, two years or ten years-to offset the large amounts of borrowing which takes place.
When the government comes before the House of Commons, and I include the government backbenchers who surely must also answer the same fundamental questions as we on this side must answer when they go to their constituencies, it must explain what it intends to do with the money which it must borrow from the marketplace this year in order to satisfy the fears of people.


Mrs. Appolloni:: What about child tax credits?


Ian Deans: Do not give me that list, I will be coming to it. I would be very cautious about interfering at this point if I were the hon. member. If the government were dealing with a well managed, growing economy and could say that it could stimulate the kind of new, financial resources necessary to meet, for example, the $200 million commitment which it has just made to Massey-Ferguson, then perhaps we as members would be able to answer some of the questions being asked. If the government could show where there would be clear returns to the coffers of the province of Ontario from the approximately $200 million it is about to subscribe to Chrysler, then perhaps
February 9, 1981

we would be able to decide whether it makes some sense and whether some benefits would flow to the Canadian economy which would allow for the generation of the kind of wealth necessary to meet our commitments both in the short term and in the long term. But that is not clear.
Let me outline a picture of what is happening in this country. The average weekly earnings in Canada have risen by 10.6 per cent this year over last year, but the consumer price index has risen by 11.2 per cent. Obviously, from those two statistics, one can draw the conclusion that the taxpayer, given that the consumer price index has risen more rapidly than wages, will be strapped even further both in terms of buying consumer items and in terms of paying taxes.
With regard to the banks, general loans for this year have risen by 17.8 per cent over last year. But at the same time as general loans are rising by 17.8 per cent, housing starts are down by 16.2 per cent, which shows that the money loaned by the banks is not being loaned for housing, but for other purchases. Take the figures I have mentioned and place them with the bankruptcy rate in the farming community, which is up almost 79 per cent, up almost 17 per cent domestically and up almost 17 per cent in the small business sector, and it is obvious that the money being loaned by the banks at the current high rates of interest is in effect undermining the economy. It is not providing the stimulus upon which to build a more stable economy and provide better employment opportunities.
If we examine these four things we see that if wages increase only 10.6 per cent, the consumer price index 11.2 per cent, bank general loans 17.8 per cent and housing starts go down by 16.2 per cent, there will be fewer dollars in the consumer marketplace to buy the products that the vast majority of people must buy if the economy and employment levels are to be maintained.
An hon. member gasped a little when I started to speak. I would say to him that it is important to have an understanding of what is happening in the economy before approving of the government going into the money market for additional funds.
It is clear that the total number of dollars available for consumer purchasing in Canada will continue to go down. The total number of dollars that banks make available for loans will rise and so the indebtedness will rise. The total number of dollars available to buy the goods and services that people must buy if the economy is to regenerate itself simply are not in the market.
If we examine the manufacturing capacity of this country we find that it stands at 78.5 per cent, down from 79.4 per cent last month and 84.8 per cent a year ago.
That is the measure of the other component factors; as there is less money in consumer purchasing power, as we owe more and more to the banks, as there is a decrease in housing starts, as the size of the labour force grows over the number of jobs currently available, then we can only conclude that the ability
Borrowing Authority
of the economy to generate sufficient dollars to meet the ongoing expenses, is under severe pressure.
I understand the need of the government to borrow on an ongoing basis, Mr. Speaker, in order to meet current account problems which it is hoped will be offset by increased revenues as the year goes by, but when it comes to the total amount of money spent, then we find that the economy is not moving ahead fast enough to offset the additional expenditures.
That would not be so bad if the government could point to an over-all plan of attack for the development of the economy over the next four or five years, or if it could say that we are going to be able to generate new wealth in the economy and in the process accumulate the necessary cash flow to meet our indebtedness. The government has no such plan, however. There has never been a five-year expenditure program and revenue program put forward by the government. It is clear from the way expenditures are going at the moment that more and more available consumer dollars will be spent on energy and less on the purchase of consumer products. If that is the case we can anticipate that there will be an even further decline in employment opportunities, a further decline in manufacturing capacity usage, a larger increase in the number of people who have to borrow in order to maintain their standard of living and a further increase in the number of bankruptcies.
With that in mind, Mr. Speaker, I feel it is necessary that the government place before us some kind of program showing how it proposes to bring about the recovery of the economy it has systematically allowed to be undermined.


John Carnell Crosbie: Right on!


Ian Deans: This is a matter of grave concern, Mr. Speaker. This is no frivolous matter; it is the very essence of our reason for being here. It speaks to what is going to happen to the young people who are Pages in this House and who will be looking for other jobs shortly. It speaks to the problems of my children and those of other people and whether they will be able to earn a living and be able to provide for themselves in the future. This is what we would all like to see.
No doubt my son is watching this debate tonight. I insist upon him doing that; it is a punishment for being my son. I know as he watches tonight he ponders his future and thinks about what he will become. There is not a sufficient number of seats in this House to accommodate the children of all members so there will have to be other jobs for them on the outside. They cannot all find jobs in the press gallery, so somehow or other they will have to find other work. If we do not lay the groundwork for economic stability now, those young people will not be able to find employment that will yield the revenue they will need to maintain the standard of living we have established for them and which we hope will be provided for generations to come.
I am disappointed that the government, through this minister, has chosen to introduce the borrowing authority bill at this time. I would rather the government would bring the budget in earlier and set out a program year by year, not just when it

February 9, 1981
Borrowing Authority
takes a fancy to; that it would show what it proposes to spend in the following 12 months, how the money is to be raised, whatever revenues can be raised and then tell us if there is to be a shortfall, and that during the following 12 or 24 months it will be required to borrow or will be able to repay some of that borrowing from revenues, and some of it will have to be carried as a debt.
1 think that kind of financial system would go a long way toward allaying the fears of a great many Canadians who are worried about the kind of government we have, and about its ability to pay the bills.
The government does not spend its own money, Mr. Speaker, and I am sure hon. members know that. It spends our money, the money of people who are not working or who are threatened by the economic downturn; of people who are concerned that their children will not be able to find jobs or who are unable to find jobs themselves within their own communities. All these people are very concerned about the expenditures of government and the way government decides to commit their money.
This afternoon I questioned the Minister of Industry, Trade and Commerce (Mr. Gray) about his announcement of a $200 million guarantee for Massey-Ferguson shares, i inquired if he could tell us if any of the other five major governments, British, French, German, Italian and the United States are concerned about Massey-Ferguson's future, and had made similar kinds of guarantees? Which governments have been asked and responded with similar kinds of guarantees? Mr. Speaker, only one of the five even entertained Massey and that is only because it had a commitment from Massey to maintain operations in the United Kingdom. That government got a commitment from Massey that it would maintain the Perkins engine plant at Peterborough and would maintain the truck plants in Manchester and Coventry. What the company got from that government was; "Yes, we will assist, but in return for that assistance, we will expect new development to take place in the engine plant." Incidentally, this was guaranteed by Massey. This new development will be an attempt to put together British Leyland and Massey for the production of the new combination diesel petroleum fuel, which is combustion engine fuel. They got commitments from Massey that it would maintain its investment and employment at the tractor plants. But what did we get? The minister says, "Well, we do not have an agreement yet." The minister also says, "Massey is going to do good things." We all hope it is going to do good things. But, damn it, we are committing $200 million which, presumably, we will have to borrow since it is not provided for in the budget. If we do commit $200 million which in government expenditure is not a great sum, but is to the average individual, then the least we can expect from the firm involved is that it makes ironclad commitments against which it has to perform; commitments for employment which require them to pay penalties: penalties which must be paid in other parts of the world if they do not live up to their promises.
There should be commitments in Canada to develop product lines in keeping with world demand. That is what we expect in return. That does not mean we are not prepared to make the commitment of dollars in support of the firm. It means that in return, as in any other enterprise, we would ask that there be a clear and understandable commitment in writing to the Canadian public, to the people who work for Massey-Ferguson, that there will be a significant Massey operation in Canada with a world mandate. That is what the measure of it is. That is what the minister fails to understand. That is what is wrong with the government's expenditure programs. The government commits money without giving any consideration to what the total cost is to the Canadian taxpayer or to whom it will benefit.
The government is now in the midst of negotiations with Chrysler. Chrysler is looking for a continuation of the commitment made last year. Chrysler wants the government to continue to back a $200 million guarantee. But they want that in return for a much reduced commitment of investment. The commitment of investment they made a year ago is not worth the paper on which it is written. What they committed themselves to do in Canada was to build a product line already obsolete. The government then asks that we authorize the borrowing of additional funds while it guarantees loans to major corporations who, through mismanagement, have failed to provide the necessary good judgment to keep the economy of Canada strong. The government has committed moneys to these companies without any tangible way of enforcing the commitments made by the companies to the people of Canada.
I suggest to you, in the event I sound negative only, that the answer to the Chrysler deal is obvious. It was obvious a year ago. It is equally obvious today. We must have investment in Canada proportionate to the total sales in Canada which must be undertaken concurrently with investment in the United States.
If the sales ratio is five in the United States to one in Canada, then we should have 20 cents invested in Canada in new product line and development for every dollar invested in the United States, and each made at the same time. That is commitment. That is measurable. You know then you are going to receive at least a fair opportunity to be part of the new and expanding operation of the Chrysler motor company.
I suggest that kind of commitment, together with an equity position in either Chrysler or Massey-or both for that matter-would show sound judgment. It would, therefore, give a large number of people some confidence in voting the necessary authority for this government to go into the marketplace and to borrow even further.
This is what is wrong with the process we go through. There is nothing in the estimates placed before this House for loan guarantees for these companies. We have not had a chance to deal with them anyway, but even when the time comes we would be unable to pass any kind of reasonable judgment about the appropriateness of the money being spent by the government in these undertakings. The minister does not have
February 9, 1981

the common decency to come into the House and place his proposal before the House of Commons. He sneaks off in the dead of night to hold a press conference. He whispers in the ear of the press. Let me say this: it is time the public business of Canada was conducted in the House of Commons.


John Carnell Crosbie: Right on.


Ian Deans: It is time this government started to accept its commitment to spend tax dollars in a reasonable, sensible and understandable way.
I want to tell you, Mr. Speaker, there are as many problems about granting this government, as there are with almost any government, the unfettered use of borrowing power. Over the years 1 have felt it would have made more sense if the government were required to come back quarterly to this House for approval. Perhaps the government should come back at the end of each quarter and present its expenditure requirements for the next quarter so that we would have a handle on what is going on. Right now the House of Commons and the Members of Parliament do not have a handle on the expenditures of the government, its borrowing or the degree to which government exercises reasonable control over fiscal matters of the country.
As a result of the way in which this government has operated over the last number of years, and as it obviously continues to operate, what we will see is this government taking upon itself responsibilities which were never intended to be granted to the executive branch. It will have spent money long before it ever tells the House of Commons about the methods to be used to raise that money. It expects in return that we in the House of Commons will approve borrowing as if somehow or other it did not make any sense or any difference; or that it simply did not matter.
When I was speaking of the auto industry I wanted to draw into the picture the state of that industry. I was speaking of Chrysler and what I would do were I given the power-and God help I should ever have it-to make the decision. I know exactly how I would deal with Chrysler. I think the majority of Canadians would deal with Chrysler in the same way. In fact,
I am sure they would. Many people have suggested to me that they cannot understand the government's motivation and attitude. I have said the government's motivation is political, but no one understands the government's attitude.
A study has been published, which shows the auto industry in this province, which is basically the auto industry of this country as it is substantially located here, is in very serious trouble. A major plan of redevelopment will have to take place for the auto industry if it is to survive in anything like the way it operated over the last 15 or 20 years. The study was done in the province of Ontario. 1 am sure you are aware of it, Mr. Speaker, but I want to refresh your memory as to the detail. The study was done for the provincial treasurer of the province of Ontario, at his behest. It predicts that the recouping of lost jobs foreseen in the coming year could be a shortlived relief. It 1 says that the jobs which will be gained in the short run will be short run jobs, and that by 1985 Ontario could have 35,000
Borrowing Authority
fewer assembly and parts plant jobs than the nearly 100,000 it had in 1978. Incidentally, that is consistent with what I have been trying to tell the Minister of Industry, Trade and Commerce for the last year. It suggests that Ontario will be saddled with the sort of vehicle and parts production which is rapidly becoming obsolete, and that is consistent with what I have been telling the Minister of Industry, Trade and Commerce for the last year. There may not be the money or the willingness to convert some plants to the production of better selling vehicles if the rough years ahead spell doom for Chrysler, gloom for Ford, and a heavy debt load for General Motors. That, as you will recall, sir, is consistent with what I have been telling the Minister of Industry, Trade and Commerce for the last year. This report simply backs up the analysis which many of us who are familiar with the industry have been making about the industry.
You will recall that when I came back from meetings in the United States, I explained there were serious problems ahead for the automobile industry and that we must have a vehicule for putting back together an automobile industry which would have a stake in Canada.
The report goes on to say:
The Auto Pact has become irrelevant. If we have favourable costs for labour, steel and power, then we should be better than 10 per cent of North American production and that's what we should press for.
That is what I have been saying to the minister for the past year.
The report goes on to say that Ford at the moment, although it is doing reasonably well:
-isn't selling enough full sized cars to use the plant capacity of 650,000 engines a year-
You will recall that that is the whole operation, for which they were given some $65 million about three years ago. I could not very well stop that here, but I tell you, sir, I explained what was going on to the then minister of finance of Ontario, Mr. McKeough, and to the premier of Ontario at the time. I pointed out to them that what would happen would be a rip-off, and that is exactly what happened.
The report goes on to state:
It is highly probable that by 1985, General Motors will have the only engine plant in Ontario, and after 1985 there might be no engine production at all.
Do you know, Mr. Speaker, that the Ontario engine and component production was worth $2 billion in 1978? This report is saying that unless there is a serious attempt by the government and by industry to put back together this vital part of the economy of this country, it is entirely possible that by the year 1985 we will have lost another $2 billion industry in this country.
The article goes on to say that:
The domestic producers plan to import 1.8 million engines from Japan, Mexico, Brazil and Germany for the U.S. and Canadian markets in 1983. The Auto Pact allows the engines to be brought to Canada duty free.

February 9, 1981
Borrowing Authority
What I am saying to you, Mr. Speaker, is that if we are going to have a recovery in the automobile industry in Canada, we cannot allow it to be dictated by decisions in Washington. We must make decisions in Canada for Canadians, and we must understand that the automobile industry has a stake in this country and an obligation to provide the kind of economic stimulus which its stake obviously should be able to provide.
There is a substantial market in this country, large by any world measure. It is being eroded by a continual lack of foresight on the part of the auto industry. I suggest it is time this House of Commons demanded of the government that it set before us a joint plan for action, a plan which involves both the industry itself and those of us who have an interest in the redevelopment of that industry for the future use of Canadians, both in terms of jobs and in terms of maximizing the manufacturing capacity which will, in the future, create the kind of stability we must have.
Therefore, Mr. Speaker, when I said to you earlier that wages had risen, but not as much as the cost of living, and therefore the number of available dollars for purchasing consumer products, such as automobiles, had fallen, and that bank interest rates, bankruptcy and higher number of dollars out for loans were undermining the economy, I was suggesting to the minister it is time we stopped dealing with these things in isolation. We cannot deal with them in isolation any longer.
You cannot talk about borrowing authority as if it were not tied into anything else. You cannot talk about Chrysler as if it were not tied to the remainder of the automobile industry. You cannot talk about Massey-Ferguson without understanding that the farming community's level of bankruptcies is at an all time high, that the cash flow of that community is down, and that they cannot purchase the products that could be manufactured, even if Massey-Ferguson were willing. But, more important, if the government is going to become a source of revenue for private industry, as it now appears it will be, then, for heaven's sake, place before us the over-all strategy necessary to make enlightened decisions about where this government is leading us, about where this government is hoping to go, and at least put in place the checks and balances, the methods which can be used to evaluate the performance of these companies which stand with their trunks in the trough, sucking out the tax dollars of people who can ill afford to pay them in the first place.
I say to you, Mr. Speaker, 1 find it a most frustrating experience to have to deal with a government which does not seem to understand that there is a relationship between what you can spend, what you can borrow, what you can raise, and what people can afford to pay. I say it is past the time for the government to show us and the people of Canada clearly what it is it intends to do by way of the development of an over-all economic and industrial policy which will assist the recovery in the short run, while at the same time laying the ground work for the kind of stability and job opportunities we all know should be here in a country with such fabulous wealth, in a country which has by far the most in terms of natural and human resources. There can be no excuse for the kind of
mismanagement that has been allowed to occur by this government over a long period of time. There certainly can be no excuse for failing to come to grips with it now that it is so evident.
I therefore suggest it is wrong to expect that we should, with a shrug and a wink, pass on to the government the authority to borrow again before we can see clearly how it expects to spend and to repay what it already owes.


Hon. J. Robert Howie (York-Sunbury):: Mr. Speaker, the bill before us contains only two clauses. Yes, that is all it takes to authorize the government to borrow $14 billion for the fiscal year 1981-82. The bill seeks explicit authorization for the government to borrow in foreign currency as well as in a Canadian dollar. The amount covers the projected budgetary and non-budgetary cash requirements tabled in the October 28, 1980 budget, $10.98 billion, excluding foreign exchange transactions. It also requests that all borrowing authority conferred by the bill which remains unused shall expire March 31, 1982, except for unused authority under $3 billion.
The budget's forecast financial requirements of nearly $11 billion are exceeded by the request for $14 billion. In other words, the government has produced a confusing, conflicting budget which will spend about $14 billion more than it will take in. That is an increase of $3.9 billion over what the Crosbie budget projected as a deficit. In fact, the budget will cost $2,730 for every man, woman and child in the nation.
It would be much easier to support this bill if the deficit were in the form of an investment in infrastructure or projects which would build the areas of this country that suffer from regional disparity. They would then incur the great dividend of being able to help themselves.
The Atlantic provinces now receive one-half of their revenue from Canada, and that is a deplorable situation which cannot continue. This budget deficit, however, does very little to help solve that problem and thus reduce the need for continuing and increasing assistance to the have-not provinces.
One of the aspects of expenditure, the legacy of budgets which continually weaken our dollar, erode our personal savings and drive investment away, is that now nearly one dollar out of every four dollars goes toward paying off the national debt. I do not begrudge one cent spent on regional development because I realize that this is a giant stride toward reducing transfer payments and social justice payments to assist Canadians who, through no fault of their own, find themselves unemployment or underemployed.
But 1 believe there are some very real areas where savings could be made. After a series of order paper questions I have developed the fact that in general almost every department of government has seconded people from the Department of Justice to add to their growing empires and use as resident legal talent. In addition, almost every department of government has a highly recognizable public relations department. Let me suggest to the minister and to the President of the
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Treasury Board (Mr. Johnston) that one area which should require early attention is that of requiring one department of government to supply a service for another. What I have in mind is that the Department of Justice should supply the legal services for all the departments of government and that this service should not take the form of adding another administrative officer or another section to a department. I think the minister should consider and address the question of whether Department of Justice personnel should be dispersed at all or as generously as they arc at the moment.
I feel this is even more important in the field of public relations; only one department should supply the services for all others. In my opinion, there is costly duplication going on, and it should be stopped.
In this regard 1 dislike very much seeing our tax dollars, more than $60 million of them, being spent on public advertising campaigns conducted by the government. There may be occasions when this is necessary, but I suggest this is one area which bears much more careful scrutiny.
1 believe that the spending of millions of dollars on interior landscaping, together with the thousands of dollars which are spent on objects of art which are located on, in or around our public buildings and appear, to my uncultured eye, to resemble more closely escapees from a junk yard, should be stopped until the budget is balanced and then, and only then, should we address the question of how to decorate our public offices. Personally, I think we should sponsor a series of paintings depicting Canadians at work; women in New Brunswick picking potatoes, fishermen off the coast of Newfoundland, coal miners deep down in the mine shafts of Cape Breton, prairie farmers, trappers in the north, lumber men in Quebec and factory workers in Ontario. There should be pictures and paintings of the taxpayers of Canada who work so very hard to make ends meet and are required to pay federal taxes. That is the type of art work I would like to see adorning the hallowed chambers of our government offices. I think the example set by pictures and paintings by these hard-working Canadians is one worth following.
It has come to my attention that some very small changes in operations have resulted in some very considerable savings. For example, a very slight change in the quality of paper has the potential of saving over $100,000 in printing costs in the Flouse of Commons. A change in the method of purchasing pallets of paper has saved $10,000, and I believe between $20,000 and $30,000 is being saved in the purchase of cleaning materials. I have already complimented the officials involved and encouraged them to continue to move in this direction. I am sure all hon. members who, like myself, are quick to criticize will also be quick to praise the officials responsible for these commendable activities.
I have other suggestions which I will be making in committee, but I want to deal tonight with two major ways in which we can stop a tremendous output of money from the federal treasury.
One of our major expenditures is in subsidizing imported oil. This will be well over $4 billion this year. That is no small
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factor in the federal deficit and the rate of inflation. In coming years, as new and unconventional sources of oil are brought onstream, Canada can become self-sufficient. That is the bottom line answer to this drain. It will not be easy, but it is possible. Oil is there in the oil sands or under the water. The problem is to get it out.
The solutions to the economic situation lay largely in solving the energy problem, and this in turn requires three basic elements. Ottawa and Edmonton must make peace and create a climate in which the private oil industry can work effectively.
The oil price must be raised to levels sufficient to generate revenue for energy exploration and development, but consistent with the development of our nation and a shelter for Canadians in the lower and middle-income group. Ordinary Canadians everywhere must do all they can to cut down on fuel waste.
An exploration boom in Canada would result in a boom for Canadian industries which supply goods to the oil industry and its employees. The spin-off benefits would spread across the entire nation. This problem can only be solved if our people take the broad view, not thinking just of their city or region but of the entire country. If all Canadians work together, we can end our dependence on insecure supplies of oil from foreign countries at constantly increasing prices. I believe this is the first major step to restoring stability to the Canadian economy.
Another way in which we must move to reduce the large and growing amount of transfer payments to the have-not provinces is to help these have-not provinces build their infrastructures so they can become self-sufficient in the long run, and reduce their dependence on the central government in the medium term. The Department of Regional Economic Expansion is the government's instrument for moving in this direction, and it has done much to commend it.
The key to DREE's success is a broad scope and narrow focus. Its success depends on the extent to which every department of government is given a development mission, which is not diminished by being spread across the country but, instead, is focused on regions of disparity.
In the war against regional disparity DREE must be in the forefront of the battle. That means it has to be adequately funded to carry out its responsibilities. This has not been happening. In 1969 DREE's budget was 2 per cent of the federal budget, while in 1980 it was about 1 per cent. In 1970-71, 53 per cent of DREE's budget was allocated to the Atlantic provinces. In 1977-78 this dropped to 38 per cent.
The erosion of the DREE budget must stop; it should be restored to its original profile and purpose. Giving every department of government a development dimension, restoring the vitality of the Department of Regional Economic Expansion and making it the leader in assisting areas which suffer from regional disparity require the personal attention, commitment and active participation of the Prime Minister of Canada (Mr. Trudeau). Fie must vest in his minister responsible for regional economic expansion the power to give leadership in

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this field and to require it of other departments of government. Without it the concept of regional economic expansion is threatened.
It is not difficult when one looks at the per capita incomes and the family unemployment rate of Canadians in the various provinces of Canada to identify the Atlantic provinces as one region that requires this attention. The Department of Regional Economic Expansion has helped the have-not areas of the country provide public services at national standards they could not afford to perform themselves. DREE has been particularly helpful to small business and I would like to just say a word about it.
The greatest complaint I hear from small business is about the amount of paper work. Strings attached to government programs cost more than the assistance is worth in some cases. Eighty-eight per cent of the Canadian work force or nine million people are employed by firms with fewer than 100 employees and less than $5 million in annual sales according to a national accounting firm. These firms account for 20 per cent of the gross national product or $40 billion annually in sales. They are particularly dominant in service industries and retail trades.
Small businesses are prime sources of risk taking and innovation. They respond quickly to changes in business conditions because they are not burdened down by bureaucracy, and because they are regionally based they are highly receptive to local needs and tend to promote balanced development.
According to Thorne Riddell, a highly respected national firm of chartered accountants, a recent study found that 80 per cent of new business cease operations within three years of opening. Fraud, over-expansion and problems with key products account for 24 per cent of the problems. But the really serious matter which causes 70 per cent of all business failures is management shortcomings. Many small business operators it seems do not have the skills needed to plan, forecast, control and lead their firms.
Small business is the most efficient job creator and what small business operators need more than anything else is access to basic decisions and general support even in the form of constructive advice. What they do not need is more paperwork. This is something for us to seriously consider as we try to reduce our expenditures and create more taxpayers by creating more jobs and supporting more small businesses.
The government finds itself in severe economic straits and extremely limited in the options before it because of the hodge-podge of economic theories that have been the government's trademark over the past two decades. There is a great need to enable members of Parliament to play a more meaningful role in eliminating waste and extravagance and in developing more efficient government administration.
We must urge the government to seek a balanced growth across all of the nation, with business development and job creation in all parts of Canada. We must address the problem of moving people from unemployment to employment, from
social assistance to income earning. By creating more taxpayers to share the burden we can reduce the burden of taxes on all Canadians.
Instead we seem to have moved into the simplistic solution of expanding the money supply that feeds the fires of inflation, and now the government deals with inflation in the traditional and classical way, by employing monetary policies which in effect feed the fires of unemployment.
When the government's anti-inflation policies close manufacturing plants or cause lay-offs of employees, production drops and we have the classical situation where the drop in supply is more dramatic than the drop in demand. With too many buyers chasing too few goods, prices go up, again feeding the fires of inflation. The government's policies for dealing with inflation are counterproductive. Short-term solutions have become long-term tragedies.
A preferable answer is to abandon the spectre of nineteenth century solutions to twentieth century problems, and deal with and address the reality of today. Our aging production facilities need to be rejuvenated and the key to that rejuvenation surely is research and development.
The winds of change are blowing in advanced industrial states and the signs of change are apparent in Canada too. The leading performers in our Canadian economy are firms that produce high technology products and systems. These firms provide good jobs for their employees and require support services that directly or indirectly involve almost every trade.
The government somehow has to learn the lesson that one of the elements in combatting inflation is to increase the supply of goods, both domestically and in our export markets, so that prices go down and more Canadians arc employed and become taxpayers sharing the burden of government. Then taxes can go down and the demand for social services can be reduced.
With more taxpayers each carrying a smaller burden the Canadian economy can move forward, our expenditures can be reduced, our incomes maintained, our standard of living can be improved and we can develop a tax system that deals fairly with Canadians in the lower and middle-income group. Then we can deal fairly with our senior citizens who are eking out a slender living on small incomes that are being constantly eroded by the ravages of inflation.
We can enable senior citizens to live in their own homes as long as they are able to do so, and treat them with compassion and understanding when they are not. There are many things we can do in this country if we adopt enlightened economic policies. As long as the government continues on the treacherous path on which it is embarked we are never going to balance our budget, control inflation, create jobs and help disadvantaged Canadians to the extent they require.
Economic policies implemented by this government for the whole nation have a tragic impact in the Atlantic provinces where the frail economies of that region are the first hit, the hardest hit and the last to recover from policies of restraint, tight money and restricted credit. The government's restraint program sees practically no federal public works projects
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creating employment in the province of New Brunswick this winter.
The dredging of the Miramichi River included in the estimates passed in this House last year has not taken place. The extension of the St. Leonard airport runway is not even on the drawing board. The tender calls for the training centre for Canadian Forces Base Gagetown and the "J" divisional headquarters for the RCMP are set back a year. The Dalhousie-Belledune port study is moving at a snail's pace and so is the market square project in Saint John. Port and harbour development in Saint John has not had a word of good news since the Conservative government left office.
DREE's participation in highway development in New Brunswick is diminished. The development of oil shale in New Brunswick, which has a potential as big as Hibernia-15 billion barrels of oil locked in the shale-is so far down on the National Energy Program inventory you need a telescope to find it. Why is this so?
For one reason the government is preoccupied with the constitutional issue to the exclusion of economic priorities. With over 30 cabinet ministers falling all over each other it seems no one can initiate action on the serious economic problems facing Canada at least until the Prime Minister becomes a modern day father of confederation.
In the meantime, the Canadian economy is in bad shape and is rapidly getting worse. Consider the Canadian National Express cutbacks which will result in 540 lost jobs in eastern Canada. What was the major factor in the losses that led to the cutbacks? A Financial Post article makes it clear that mismanagement was the major factor. It is a familiar story. A Crown corporation does not have the incentive to be efficient; that is the incentive provided by the profit motive.
However, the Canadian National Express has a special responsibility. A private company concerned only with profit can concentrate on the high volume customers and routes and forget about the average little Canadian who wants to send an odd-shaped Christmas parcel. CN Express as a public company has an obligation to serve the average little Canadian even if it makes no profit or actually loses money in so doing.
In recent years CN Express has become largely a trucking operation rather than a rail operation. But as fuel becomes more expensive it is likely the rail operations will become more and more important. The point has been made often that rail is far more energy efficient than highway transportation. With every increase in the price of oil, with the growing uncertainty and insecurity caused by strife in the Middle East, it becomes more imperative that Canada rebuild its rail system to the standard of comfort and efficiency that already is a fact in Europe and Japan.
In the United States, while state governments are cutting back on funding for freeways and building up their rail systems, Canada is allowing Canadian National Express to lead the way downhill for this important segment of our transport economy. The government should stand firm against
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these cutbacks and press for an improvement in all rail services, freight, express and passenger.


Jean-Luc Pepin: Did you write that?


J. Robert Howie: If the Minister of Transport (Mr. Pepin) listens, he will learn something.
It is not enough to play the old army game in saying we will close two-thirds of the operations in the maritime provinces and hope that people will say, when one station in Cape Breton and one in Charlottetown are kept open on a reduced scale, it could have been worse. This old trick will not work any more because maritimers have been fooled once too often, and in the maritimes people like little to be fooled.
It is intolerable that in the city of Fredericton rail travellers have to begin and end their journeys with a bus trip. They have the rails in place and they have the station. All it takes is an enlightened minister of transport to give the green light to the railways. This will help Canada conserve energy and put in place a modern rail transportation system.
I have now come full circle. I am right back where I started. I am advocating that Members of Parliament be given a meaningful role in enabling us to cut waste and extravagance. I believe the Canadian taxpayer should be given more value for his dollar. I believe that a major change in the economic policies of our government can reduce government expenditures by investing, instead of spending, in regional economic expansion. I believe energy self-sufficiency built on co-operation and mutual trust can be accomplished. I believe this nation has the resources and educated population to create jobs for all Canadians and, by increasing the number of taxpayers, reduce the burden on everyone. In that way we can balance our budget and reduce our taxes. All it takes is the will, the ingenuity, the hard work and the leadership. Right now we are waiting for the leadership, and we have been waiting a very long time.


Some hon. Members:: Hear, hear!


Charles James Mayer: Mr. Speaker, the bill before the House this evening is a very important one for all Canadians. If we talk about parliamentary history, the reason for this bill goes right back to the beginnings of Parliament. I am sure some members were better history students than myself, but if they remember their history, back in 1066 King John met a group of his knights at Runnymede. They informed him they would no longer blanketly pay money to the Crown unless they had some kind of a say.


Some hon. Members:: It was in 1215.


Charles James Mayer: I am sorry, I have the date wrong. It was in 1215. I am sure 1066 was close enough for the government which I am sure operates in much that way; a few hundred million dollars or a few hundred years here or there does not really make a lot of difference. I thank hon. members for the correction. The principle or the point is still valid. People were tired of paying money to the Crown without having a say in

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how the money would be spent. That complaint was continued, and today we have an entire institution based on the precedent that the government should be held accountable for its spending.
As governments spend more and more, by definition they become less and less accountable for their expenditures. We have what amounts to one vote every four years on a multitude of things, from how the Post Office works, to our foreign affairs policies, to a multitude of internal workings in Crown corporations, to transportation systems, and to everything else. What happens is that a lot of these decisions are diluted in the electoral process. Under normal circumstances a voter has only one vote every four years in which to cast judgment upon the performance of the government in all these areas.
1 would argue that as opposition members we have very little say, if any, in calling into account the government's spending. We know how the committee system works. I have been here for almost two years, and that is long enough to know what it meant to take estimates out of the House and put them into committee. It gives opposition members a lot less power in terms of calling the government to order with respect to its spending. Also it has diluted considerably our jobs as members of Parliament to represent the people who elected us and to hold the government of the day accountable for the amount of money it collects in the way of taxes and the way in which it spends it.
What disturbs me and a lot of members on this side of the House is that we have now gone beyond the point of having any accountability for the way the government spends its money, yet we are being asked to blanketly approve and give the government authority to borrow money, without any real signal from the government as to what it intends to spend it on. We do not want to know down to the last cent on what the government intends to spend it, but it would be nice to have an idea as to the general direction of government spending.
I have to agree with the hon. member for Hamilton Mountain (Mr. Deans) who called into question some of the spending practices of the government. I ask them to give some priority to spending money in terms of some infrastructure or investment so the citizens of the country will be in a position where they can be more productive. In that sense it is an investment and it will show a return. We are not given any indication of this by the government.
In fact, one of the major government expenditures in the budget will be the payment of interest on past government debt. We do not see any direction in this current bill as to how that situation will be alleviated. The last estimates I saw indicated that something like $11 billion of the current budget will be used to pay interest on past government debt. I think this is an horrendous figure.
I do not think any of us can talk about millions or billions of dollars and have it mean very much. 1 have heard members attempting to explain it by laying dollar bills end to end and this kind of thing. But, to talk about it in terms of a percentage, it means that one out of every $4 in taxes the government collects from its citizens will be used to pay interest on past
government debt. It will not be used to Finance any programs.
I see the Minister of Transport (Mr. Pepin) here this evening. It will not be used to help him solve the transportation problem in western Canada. It will not be used to build any new facilities for people in eastern Canada. I see the Minister of Agriculture (Mr. Whelan) is also here. It will not be used to finance any research in agricultural programs in order to help the farmers of the country be more productive. I have seen some of the minister's recent speeches in which he talked about Canada becoming more self-sufficient as far as food is concerned rather than importing it. This $11 billion, which will go to pay the interest on past government debt, will not tackle any of the problems the Minister of Agriculture rightly pointed out require some attention. This is something the taxpayers of the country have a right to know. They should know what in fact the government is planning on doing with this $14 billion.
If the government had some intention of spending it on improving the productivity of the country, we would all think that worth while. Perhaps we would not agree in which areas it should be spent, but, nevertheless, we would agree in principle it was a valid expenditure in the sense that it was an investment and hopefully would return some dividends to the country. We have not been given any such indication at all. In fact, quite to the contrary, the government is asking for almost $11 billion or $10.98 billion. In addition it is asking for $3 billion as a contingency.
All of us operate small businesses in that we run our own personal affairs, operate households, balance budgets, and on occasion borrow money. If we went in to see our bankers in order to borrow some money, the banker would ask, "Why do you want to borrow this $1,400?" What would happen if we indicated we required $1,100 to meet certain commitments- and we understand some of the commitments in the budget in front of us-and that we needed $300 for contingencies, but did not say what the contingencies were for? I am not so sure the banker would be very happy, in terms of the documentation which we were giving to him to back up the need for our loan. Yet that is exactly what this government is doing. The only difference is that in this case the government is asking the taxpayers of the country to act as its banker and it is not telling us the elected Members of Parliament what, in fact, it plans on using this money for. I will get into that aspect later.
But there are all kinds of suggestions as to what the government could be using this money for. What would make sense to me and what would find favour-I am not saying complete favour because given the nature of the opposition I think sometimes we can oppose things for the sake of opposing them-if the government needed additional money it would see fit to have some confidence, in the members who are in this House, come back to us in eight or nine months, or whatever, and say, "We need additional money". In that case we could then talk about the specifics of the $3 billion it needed at that time. We are simply being asked at this time to approve a blanket borrowing of $14 billion, made up of $11 billion.
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$10.98 billion which they need for specifics, plus an additional $3 billion that is not identified. The government just says it needs it for contingencies. I would see nothing wrong-and 1 think we would be much more inclined to let this bill pass-if the government would simply ask for the $11 billion now and say in six months time that it wished to present a bill asking for $3 billion more.
In terms of fiscal sanity or fiscal management that makes sense to me. I see no reason why that course could not be followed. It would certainly make Parliament a more accountable place. I think Parliament is becoming less accountable all the time. This would give us in the opposition a much better chance to scrutinize the kind of spending the government wants to carry out on behalf of the people who elect us and send us here, at great expense I might add.
I would like to talk a bit about the kind of example which the government sets. We have seen much controversy in my part of the country, western Canada, in the past several years regarding our transportation system. I think people are aware that we have lacked the adequate transportation facilities to take advantage of the amount of grain production which we are not only capable of producing but, more important, which is in very great demand around the world. I think a commonly accepted figure-although it is hard to put an exact figure on it, and it can be an estimate at best-is that during the past two or three crop years we have lost a half a billion dollars in sales, in terms of exporting grain from western Canada to customers around the world. Admittedly, a half a billion dollars does not sound like a lot of money in terms of the budgetary deficits this government is facing, but half a billion dollars, in terms of sales of grain, which we had on hand, is a sizeable amount of money. It is a sizeable amount of production, as far as grain farmers are concerned. This figure is for actual sales of grain which we had to deliver but could not get into export position because of our poor transportation facilities. That is one side of the coin.
The other side of the coin is more important. It is our potential. We all know that farmers, given an opportunity to produce, are very ingenious people. They will produce if they are given that opportunity and, above all, an incentive. Had we been able to move the additional half billion dollars worth of grain we would then have had empty grain bins, money in circulation and the incentive for grain producers to produce more. To my mind, we lost at least an additional billion dollars in terms of potential production and sales, had we been selling and transporting to market the grain we have on hand in western Canada now. That is a lot of money, Mr. Speaker. It involves more than just a half billion dollars or a billion dollars.
Farmers are well known for being good spenders. Once they get money they spend it; they spend it on machinery, repairs, and on fertilizers. Much of it is recirculated throughout the rest of the country, and in this way it is spent many times over. That spending and respending, in economic jargon, is called "the multiplier effect". You can talk in terms of spending that money two or three times over. This very easily leads you to a
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figure of $3 billion or $4 billion, in terms of additional economic activity in our economy.
1 have figures in front of me from the Parliamentary Library which show the share of the GNP or the total amount of expenditure which the federal government can take from that amount of money. It equates to roughly 30 per cent of it. If we take 30 per cent of, say, $4 billion in additional economic activity throughout the economy, we see there is a net benefit to the government by way of tax income of a billion dollars. That is an estimate but it could very easily happen. That billion dollars could go a considerable way toward cutting down the requirements of this government's borrowing needs.
As I emphasized, these are the kinds of measures I think the federal government should be taking. It should be taking the lead in seeing that we do have a transportation system which will give us a chance, not only in western Canada, to produce and generate economic activity, provide jobs and income for our families. This would create spin-offs which would accrue to other parts of the country. As has been pointed out many times before, a lot of this money would accrue to central Canada where most of the manufacturing takes place. It would accrue to companies such as Massey-Ferguson, which we know is in financial difficulties. These are the areas in which this measure would help. We would not need some of the bailouts and government activity we see the government now involved in with some of these larger companies. To my mind these are the kinds of measures the government should be taking a lead in, and seeing that they are accomplished.
I must be critical here, despite the fact that I am not really a partisan person. I would like to see the government get its act together in terms of what it is saying with respect to the Crow rate. The Minister of Agriculture was in Edmonton a week ago where he talked about the Crow rate. I will quote a passage from a speech he gave to the Alberta Rapeseed Growers Association on January 29, 1981. He said:
I know thal you people in this room have a variety of opinions on the Crow rate yourselves. You say let's make a decision. Well, I'm of that opinion too. And I feel the question must be settled soon-I would say by the start of the next crop year if possible.
In terms of the way the government operates, I think that is a pretty optimistic statement, given the background of the Crow rate and how it is imbedded in politics in western Canada.
The minister responsible for the Wheat Board in the other place stated to the press just over the weekend that he really did not care if the Crow rate was ever settled. As far as he could see it was a benefit to western Canada and he did not care if it was ever settled at all. We have the Minister of Agriculture saying he would like to see it settled, hopefully by the start of the next crop year, which is August 1, 1981. We have the minister responsible for the Canadian Wheat Board saying he does not know whether it needs to be settled at all.
I will now talk about the Minister of Transport, who I see in the chamber. I know he has been trying to get some support in cabinet in respect of putting a position paper through for presentation to the farmers of western Canada. This would get

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some kind of discussion going and some kind of consensus in terms of what should be done with the Crow rate. Essentially, we have three ministers of the Crown taking different attitudes on the same issue.
The minister responsible for the Canadian Wheat Board spoke to the western agriculture conference about two weeks ago, and said that the ballgame was back in the producers' court. He wanted to see the producers arrive at a consensus before the government did anything.
I would argue that if the government would show an example, and if it could arrive at a consensus-keeping in mind that I have just referred to the position of three ministers very vitally involved and they are all different-then maybe they could go to the producers and tell them to arrive at a consensus because the government had done so. It seems to me very presumptuous for the minister responsible for the Wheat Board to castigate producers by saying that nothing will happen until the producers arrive at a consensus on this very emotional subject. It is an issue which is very much imbedded in western Canada in terms of its economic history, in terms of its political history and in terms of its settlement history. He asks the producers of western Canada to arrive at a consensus when, in fact, the three ministers responsible cannot do so.
These are the kinds of things which I think deserve some attention on the part of the government. As far as the federal government is concerned, leadership is essential. I just went through the arithmetic to point out that there should be some onus, if the federal government is taking some of its responsibilities seriously, to settle this issue, because it will result in a net benefit not only for western Canada but for the whole country.
1 could go on and talk about the stupid things we have been doing with Mirabel. I understand that the subsidy Mirabel needs to remain in operation is something in the range of $1 million a week. It costs us $50 million a year. The Minister of Transport is shaking his head. Am I too low? Is it higher than that?


A. Daniel McKenzie: It is $52 million.


Charles James Mayer: 1 was giving the minister the benefit of the doubt, since I like to round off my figures.
It was indicated in a press release just this past week that the government intends to disassemble and sell off some of the land surrounding Mirabel. If it had been handling things in a business way, it would not have bought all this land for which it no longer has a need. The money spent on this land could have been spent toward the infrastructure about which some hon. members have talked this evening. Such expenditures would have returned dividends to the country, perhaps to the extent that the government would not be asking for all this borrowing authority.
1 understand that because of the price of gasoline in Canada, people are crossing the Canada-U.S. border to buy
gas at our cheaper rates. Before Christmas, I travelled to North Dakota where I spoke to some farm equipment dealers.
I learned that farmers with hundred gallon tanks under their pick-up trucks were crossing the line into Canada to buy our gasoline at roughly 50 cents per gallon cheaper. Some hon. members have constituencies close to the United States border and are aware of this situation.
Mirabel is another case in point. As I understand it, several foreign airlines land at Mirabel simply to refuel. They do not unload or pick up passengers or freight.


Jean-Luc Pepin: That is no longer.


Charles James Mayer: It seems as though Canada is trying to become the Santa Claus of the world. I do not know how we can continue like this.


Jean-Luc Pepin: It is much better than a Crow rate at Mirabel.


Charles James Mayer: If we are spending money in the Crow rate, at least it will be used to get some of our products to world markets thereby earning foreign exchange or allowing us to trade for Japanese cameras or whatever. But to allow foreign carriers to land at Mirabel to take on gasoline which is subsidized by the Canadian taxpayer is setting Canada up with its 22 million population as the Santa Claus of the world.


Jean-Luc Pepin: It is not true.


Charles James Mayer: I hope this practice has stopped. The information which I had is that this was occurring before Christmas.


Jean-Luc Pepin: Do not believe everything you hear.


An hon. Member:: It is a white elephant.


Charles James Mayer: The hon. member has referred to a white elephant. If the government had been spending our money wisely, it would not be going through the process of getting rid of the surplus land around Mirabel.
I would like to say a few words about a couple of programs of the Department of Agriculture which have been in operation over the past year. I see the Minister of Agriculture is present in the House. I know he is aware of and has been concerned with the Agricultural Stabilization Act as it applies to hog producers. The abbreviation for the Agricultural Stabilization Act is ASA. We all know that ASA stands for acetylsalicylic acid which is aspirin. The way in which this act has been administered has given many producers a big headache.
For example, some producers who lost money in the previous fiscal year ending March 31 have sent in applications to the Department of Agriculture which, as I understand it, will not be mailing out some of those cheques until this March. This means that some of the producers who were counting on that money will have waited one year before receiving payment. If the producers looked after their hogs in the way the government is administering this plan, most of the hogs in this country would be dead and there would be no need for the plan because the producers would be out of business.
February 9, 1981

Weaning operators were not named under this plan. However, the minister, in his wisdom, realized that many of these producers had a legitimate complaint and took the appropriate action. It seems to me that if we can name a cow-calf operator as a beneficiary of the act, there should be no reason why we could not name the weaning operator as a beneficiary. Essentially these producers are producing the same kind of commodity, namely, a young animal for further finishing. This group is eligible for payment under this act of $1 per head, but they will not receive their payments until after the payments have been made to the hog producers. These people could be waiting for over a year to receive their payment.
With the sophisticated equipment available to the government for keeping records and printing cheques, certainly a system could be put in place whereby this assistance could be made available to the producers at a time closer to the production period in which the producer had a financial problem. If the payments are not made closer to that period in time, then the benefits accruing under the plan are largely ephemeral because by the time the producer has received his cheque he has gone out of business or he has survived on his own. In either case, the payment is of little value in terms of some producers remaining in business, and that is the intent of the plan.
In some respects the Agricultural Stabilization Act is a good measure because it gives the producer the assurance of meeting some of his variable costs in periods of high production and low prices. I know the minister will say that if the producers had a better marketing system they would not need this Agricultural Stabilization Act, because they would have a guaranteed price under a tightly controlled supply management system.
One wonders because of this slowness in payments to the producers if the Department of Agriculture is not trying to force some of the producers into these supply management programs for cattle and hogs with which the minister is so much in favour. I urge the minister to take seriously his responsibility to livestock producers in Canada and consider the financial plight of many of these producers because of low prices, when the Agricultural Stabilization Act comes into play. I urge the minister to do as much as he can within his department and with Treasury Board to get these payments out closer to the production period so they will have some meaning to the producer.
I am also concerned about the way in which the herd maintenance program has been administered. I realize the program was hurriedly set up because of the drought situation in western Canada and parts of northwestern Ontario this spring. The announcement of the plan was welcomed and I for one thought it was a good plan. Money was simply made available to producers on a per head basis. The producer was then free to decide what he would like to do with the money; whether he would buy feed from his neighbour or from further away and pay transportation costs. The producer could decide whether he would bale straw or buy grain. The producer received money which he could use according to his manage-
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ment decisions. The program was good simply because an individual operating with his own money will make the best use of that money. When the government said it would help the producer to maintain his breeding herd of cattle, the producer was not obligated to take part in one specific plan, transportation program or whatever to become eligible for assistance.
Under the initial plan, $140 was available for each dairy cow, and $70 per beef cow to a maximum of 300 head. Subsequently the plan was cut down to $70 per dairy cow and $35 for each beef cow. I talked to one producer who said that he would have been better off had the government kept out of the matter and not announced any plan at all. As the result of the original price allotment the price of feed went up in my area from $50 to $70 and $80 per ton. When the government cut the initial allotment by half, the producer was forced to pay more for the price of hay than he would receive per head from the program.
I do not know why the government chose to spend as much money as it did advertising the herd maintenance program in western Canada in the printed media, radio and television. If it had used the expertise which apparently was available to develop that sophisticated advertising program and put it into the substance of the program itself, everyone would have been better off. That was only the start of the problems with the herd maintenance program.
At the start, the assistance was to be paid on the basis of municipalities. The minister then recognized that rain does not necessarily fall according to municipal boundaries. Then it was decided that the plan would be administered on the basis of crop districts within the prairie region. That made more sense, except that the plan was to be administered on the basis of an 80 per cent grain yield. I have spoken to producers who had only 20 per cent of their usual annual hay yield and yet had close to a normal grain crop. So there is not necessarily any correlation between a poor hay crop and a poor cereal grain crop.
I have also spoken in the last month or six weeks to producers in the west whose applications had been turned down, some for very technical reasons. I know of two brothers who farm together; one received assistance, and one did not. I have heard of neighbours who worked together, one living across the road from the other, and one received the assistance while the other did not. Nobody knows why, so people say, "If my neighbour gets it, then I should be eligible."
I know the minister has established a review committee to look into these problems, but I am sure many of these problems could have been avoided if thought had been given to the way the program was developed and administered. Its present administration has caused some ill will in western Canada.
Just after the new year I had occasion to visit the offices in Regina where the plan is administered. The people administering the plan were doing a good job under very trying circumstances, as they had a large number of applications with which

February 9, 1981
Borrowing Authority
to deal, and they worked in a small office. 1 must compliment them on the job they are doing, but they were trying to work with a plan that had not been given enough thought.
1 see that the Minister of Agriculture is in the House tonight. We have not seen much of him recently, but 1 know he has been busy travelling. I have followed his journeys around the country, and I have read most of his speeches. An hon. member who spoke earlier told us that his son was forced to watch when the minister was making a speech, and he jokingly mentioned that it was punishment. 1 do not know if 1 want to make that sort of comment about the minister's speeches, but 1 did read most of them.
1 am very concerned about what is happening to the proposed meat import law. 1 can trace the history of the catastrophe which has fallen upon the Canadian beef industry since 1976, when Australia and New Zealand sent massive amounts of beef to this country. For a long time cattlemen all across the country have been asking for a beef import law. The bill was finally introduced before Christmas, but it was a meat import law rather than a beef import law. It will apparently apply to things other than beef. We applaud the introduction of that bill, but we have not seen anything of it recently.
The minister will be well aware of what has happened to cattle prices since the new year. There has been a ten-cent per pound decrease in the price of live cattle. This is the time of year when producers make decisions about how many heifers to breed, about the size of cow herds for the coming summer and the size of the resultant calf crop a year from now. This will determine the amount of beef available to the Canadian consumer two years from now. This is a critical time of year for many people in the beef industry. They must decide how many cattle to keep and how many heifers or cows to breed for the coming year. The minister has not shown any interest in this meat import law.
It is disgraceful that the Standing Committee on Agriculture has not met this year. This afternoon I presented a motion under Standing Order 43 protesting this. The agriculture committee is very able; it is one of the least partisan committees of this House. It has a genuine interest in agriculture in this country, but it has nothing to do at the moment.
If the bill were referred to the committee, it would receive immediate attention and fairly swift passage, but for some reason the minister cannot seem to prevail upon his House leader to bring it before the committee.
The drop in live cattle prices has come about largely because of imports from the United States. That is another story, and 1 hope to get into it later. It is mainly because of the influx of U.S. fat cattle that beef prices have dropped. Feed prices have risen, which I think this is a healthy sign as far as general agriculture is concerned. Interest costs are high, and this is one of the major factors in the cost of finished animals. These costs are even greater than the yardage cost of keeping an animal. It would give some stability and assurance to the beef industry in western Canada if the government cared about it, and if the meat import law were brought before this House and passed. I admit that it would not solve all the problems of the industry,
but it would be a major factor in bringing stability to the beef industry. I therefore urge the government to give serious consideration to referring that bill to committee as soon as possible.
As I said earlier, the committee has not met since before Christmas. 1 think that is deplorable. It is a very good committee, but it has nothing to do, and important legislation just waits.
Things like that disturb us when we are asked to comment on the government's spending plans. This borrowing bill does not take into account nor answer some of the legitimate questions of Members of Parliament about what the government intends to do with the money.
The hon. member for Crowfoot (Mr. Malone) spoke eloquently this afternoon about the debt awaiting newborn children when they enter the world as Canadian citizens. I did not write down the figures he used, but I think he said something to the effect that five years ago each newborn Canadian would assume a debt of $800 and that today it would be something like $2,200. That is a deplorable situation.
When we campaign for election to this House, we speak to people all across the country. I think the most exciting people I talk to are young people. I am sure we have all had meetings with high school students, and I know I find these more intimidating than the all-candidates meeting arranged by different groups in constitutencies. Young people ask very solid, penetrating, simple and straightforward questions. They want to know their future, their chances of earning a living, of staying in the province or the region of their choice and of pursuing their lines of interest. We cannot help but admire them for the questions they put to us, but then we think about the debt the government is passing on to them. Their questions are legitimate, and they are questions Members of Parliament must ask the government. These things concern me when I study this borrowing authority bill.
Let me conclude by emphasizing a couple of points. We all realize that the government must borrow more money. That is a way of life for all of us whether we operate businesses or farms or practise professions.
Whatever we do to earn a living, we should realize that when we borrow money, we have to be accountable for that money being repaid. In turn, the people from whom we borrow must be satisfied that we are responsible and able to repay it. In my opinion, this bill does not meet that kind of criteria. I think all of us would feel much better if we could be confident that the government, which is asking to borrow massive amounts of money in currencies around the world, would use that borrowing to invest in this country for a more productive future. By doing that we would have less debt to pass on. We would be able to leave the young people of this country with a place and a chance to make a living, just as we started out, without some of this massive government debt we all now bear.
February 9, 1981


Gordon Edward Taylor: Mr. Speaker, first I would like to read part of Bill C-59. If this bill is passed, it will give the government authority to borrow $14 billion. In part, clause 2(1) reads:
-by the issue and sale or pledge of securities of Canada, in such form, for such separate sums, at such rates of interest and on such other terms and conditions as the governor in council may approve, such sum or sums of money, not exceeding in the whole, fourteen billion dollars, as may be required for public works and general purposes.
That statement alarms me. It does not give any definite purpose for the borrowing or any indication of what the interest will be. Nor does it give any consideration to terms. It simply asks the House of Commons for a blank cheque to borrow $14 billion. When I heard hon. members of the NDP supporting this bill so vehemently the other day, I could not help but think of the phrase which would seem to symbolize what they were saying. They were saying that the government now has a debt of some $80 billion; it is going to borrow another $14 billion; in other words, it is trying to borrow its way out of debt.
I think it is possible to borrow one's way out of debt. The statement often used in the west that this country was built on credit is correct. It was not built simply by borrowing, but by making sure the money borrowed would create and produce. But too often the borrowed money is used for routine services.
I could not help but think when I heard members of the NDP urging the government to borrow more and saying $14 billion is not enough that they want to hasten the day when this country goes bankrupt.
During the last few years we have not reduced our national debt. We have been increasing it continually. We are not borrowing our way out of debt; we are getting deeper and deeper into debt. If the Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. MacEachen) were running a private business in Canada this way, they could not get a loan from a bank. They would be bankrupt along with the other 5,000 or 6,000 companies which have gone bankrupt recently. Practical people in Canada fear that we will go bankrupt. The only difference between the NDP and the Liberals is that we would go bankrupt faster under the NDP. The NDP would really have to speed to go faster than the Liberals are going right now; they would have to put everything in super high gear. I am concerned about this.
A difference should be pointed out to NDP members and to Liberal members who support this bill. Simply borrowing will not get us out of debt. I can borrow $1,000 from the bank if my credit is good. If I use that $1,000 to live high, to take a trip or to buy the girlfriend a beautiful new outfit as a Christmas present, to go to a hockey game to see the parliamentarians play or go to national league play, I could spend that $1,000 without any difficulty. But, when the time comes to pay it back, I then realize it has not created a thing, nor have I produced any more wealth.
I read in the paper the other day about someone from the east who had moved to Calgary. He said he was living in Calgary because people in the west produce and create. It is
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not that people do not create and produce in the east, but his impression was that too many of the eastern people were getting into the habit of borrowing money for routine expenses. They were not using their money to produce additional wealth.
Let us examine the following proposition: how will 1 pay back $1,000 plus the carrying charges and make a profit if I do not produce new wealth; it is impossible. It would be just as difficult if I tried to raise myself from the elevation on which I stand by pulling on my boot straps. I can pull and pull and pull, but 1 will never get any higher. If I want to get higher, I have to make an effort, climb a ladder or do something to reach a higher elevation. If I am to make use of the money I am borrowing, 1 have to produce new wealth. If I borrow this amount of $1,000-I am using the nominal amount of $1,000 to make it easy to follow-and I buy some calves or cattle and a really good bull and thus produce more cattle and more cattle, it will not be too long before I will be able to pay back the $1,000 plus the carrying charges and have some profit left. By doing this, I have created some wealth.
The same thing can be said if I buy some land, sow it and work it; I then produce wealth. Perhaps I might buy some additional land and fertilize it. The same thing happens; I produce more wealth and I can repay the loan. But that is not what the Canadian government has been doing. It has been borrowing and borrowing and borrowing to the point where we now have $80 billion in debt, and we are still borrowing. We cannot even see daylight at the end of the tunnel. We are going deeper and deeper into debt. If we keep this up, we will go right into the chasm of bankruptcy, and that is a pretty black hole.
Canadian people do not mind borrowing if the money is used to create new production and new wealth. That is the way to do it. But simply to borrow to use the money for routine expenses or to hire more people who produce nothing-they might do some work, but they produce nothing-will not get this country off the rocks or off the shoals we are now going toward. We will simply go deeper and deeper into debt.
When people say this country was built on credit, they are talking about the kind of credit of which I referred a minute or two ago. Breaking new land, creating new wealth, creating new production: those are the things which will increase the gross national product. The more we borrow simply for routine expenses, for high living or for trips, the more we will plunge deeper into this chasm of debt.
It is now ten o'clock, Mr. Speaker. I want to deal with the shame of some of our foreign debts when I resume, with your permission, tomorrow.

February 9, 1981
Adjournment Debate



PROCEEDINGS ON ADJOURNMENT MOTION

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

A. Daniel McKenzie: Mr. Speaker, on November 18, as reported at page 4805 of Hansard of that day, I asked the Acting Minister of Veterans Affairs the following question:
In recent months Canadian Pension Commission claims for awards under Section 33 of the Pension Act, that is for funeral and burial grants, have had to wait many months for adjudication because of staffing problems. Would the minister consider implementing the proposal of the Woods Committee which would delegate authority to the senior pension medical examiner in the district offices to adjudicate matters of a routine nature under section 33 of the Pension Act? This action on the part of the government would go a long way in assisting widows of veterans during a time of great emotional and financial strain.
The minister promised to look into the matter, but to date 1 have not heard anything further. 1 hope to have an answer tonight from the parliamentary secretary.
I should like to point out also that the Department of Veterans Affairs has a long backlog of cases in all facets of its operations. The measure which I am suggesting tonight, which was also suggested by the Woods committee, that there be district offices in the provinces, would heip alleviate at least one bottleneck in the department.
On the same day, on November 18, as reported at page 4806 of Hansard, I asked the following supplementary question:
At the present time the grant under section 33 of the Pension Act for funeral and burial expenses is not to exceed $550 for the funeral director, plus the cost of the grave, the opening, closing and a marker. For the Department of National Defence this amount is $850. Would the minister increase the amount allowed for a funeral and burial as provided by the veterans' burial regulations and Section 33 of the Pension Act to correspond to the amount provided by the Department of National Defence? I am sure this small increase for a decreasing number of widows will not be inflationary.
I understand that the maximum burial grant now is $625. This is still too low, in view of the fact that grants from the Department of National Defence are $850, and of course, the devastating effects of the Liberal budget and the National Energy Program are causing serious consequences for low income and middle-income widows in the country.
Also, questions have been asked recently about the length of time veterans have to wait for their pension applications to be processed. The problem is that many of them are dying before their applications are processed. On January 30 of this year a question was asked in the House, pointing out the length of time it takes to get a hearing before the Pension Commission or the War Veterans Allowance Board. The government member who asked this question pointed out that:
As a Member of Parliament one hesitates to recommend to a veteran that he go through the appeal procedure, since it takes so long.
That is quite a devastating statement coming from a member of the government party. The minister answered as follows:
I can assure the hon. member that the backlog will most likely be eliminated within six or eight months.
We have been listening to that for years. For years we have been told that the backlog will be cleared up and that it will only take another six or eight months.
In today's question period I asked the Acting Minister of Veterans Affairs a question with regard to veterans' widows. I said that because of the phased in lowering of the 48 per cent disability entitlement in Bill C-40, approximately 1,500 widows became eligible for pensions in 1980. I said that as of December, 1980, the Department of Veterans Affairs had heard from fewer than one third of these widows inquiring about their eligibility.
If only one-third have been heard from, I suggest to the parliamentary secretary tonight that as the proportionate pension was to be phased in over six and a half years, the phasing in period should be reduced to, say, five years. That would allow more widows to become eligible for pensions in a shorter period of time. I would like the parliamentary secretary to look into this so that we can reduce the length of the phasing in period because of the small number applying.
I also asked the minister to make sure his department is advertising and contacting widows to notify them that they can apply for this pension increase.
I am also very concerned because the Standing Committee on Veterans Affairs has not been called to deal with these particular questions. Problems are mounting, and I hope I can get some commitment from the parliamentary secretary tonight that she will raise this matter with the minister, so that the Standing Committee on Veterans Affairs can be called as soon as possible.


Ursula Appolloni: Mr. Speaker, before I begin 1 should point out that the hon. member opposite has asked not one but four questions. I have only three minutes in which to reply, so 1 will deal only with the first one, if I may.
1 think the hon. member for Winnipeg-Assiniboine (Mr. McKenzie) should be thanked for the opportunity he has given the House to clarify the subject matter he raised on November 18.
The Pension Act provides that the matter of approving burial grants by the Canadian Pension Commission is not routine but is dependent upon the size of a pensioner's estate, and an individual decision must be made based on each case. To enable a decision to be made, the commission is required by law to determine the size of the estate and whether it is sufficient to pay for the expenses of the last illness and burial. It often takes considerable time to obtain this information
February 9, 1981

from surviving family members or executors of an estate. The matter of delegating authority to district offices of the commission to deal with these claims has been considered, and approval has been given to work toward decentralizing decision-making on these applications.
The Pension Act provides that the amounts payable in burial grants are the same as those authorized for the Department of Veterans Affairs under the veteran's treatment regulations. The conditions under which the Department of National Defence and the Department of Veterans Affairs determine the amount payable to funeral directors differ. The Department of National Defence pays for the funerals of all service members regardless of the financial circumstances of their families, as this is regarded as a condition of service. The Department of Veterans Affairs pays a funeral grant as a matter of right when a veteran's death is related to his service and when the death results from other causes, on the basis of the financial circumstances of the deceased's estate. The Canadian Pension Commission pays a funeral grant when a disability pensioner's estate is not sufficient to cover the expenses of his last illness and burial.
Each department determines its rate using different criteria. The DND rate is based on the national average cost of a civilian funeral. The DVA rate is based on the national average rate paid by provinces and municipalities for funeral costs which are their responsibility.
As the hon. member said, the DVA rate has been revised regularly since 1975 and was increased to $625 as recently as June, 1980. We will continue to ensure that the rate is closely monitored.
In both departments the aim is to provide that servicemen and women or ex-servicemen and women are buried in dignity and in a manner which honours them as people as well as their service rendered to Canada. The present rates are considered to achieve this aim.


CUSTOMS TARIFF-REQUEST FOR REMOVAL OF DUTY ON BODY ARMOUR
Mr. Leonard Hopkins (Renfrew-Nipissing-Pembroke):: Mr. Speaker, recently 1 asked the Minister of State for Finance (Mr. Bussieres) a question about bulletproof vests for members of our law enforcement agencies across Canada. There is a 25 per cent duty on importing such body armour into Canada. "Body armour" and "bulletproof vests" are terminologies for the same thing.
In view of the information the minister gave me, if we are producing good quality bulletproof vests in Canada, then I agree we should protect our own industry and jobs for Canadians.
My real concern arose out of the serious acts of violence we hear about today, and quite often the personnel of our law enforcement agencies become the targets of such violence simply because they symbolize the law and its administration.
Adjournment Debate
It is up to us as citizens who want law and order to lend our real support to them if we expect them to do the crucial and necessary job which all of us want done.
This important task of supporting our law enforcement agencies applies to municipal, provincial and federal police and other security agencies. Policemen should not have to purchase bulletproof vests on their own; this item should be part of their regular or normal equipment.
There should be considerable testing of such equipment to make sure it is practical and dependable. It is my understanding that there really are not any set standards in operation now in Canada. If a company does not meet specific standards, then it should not be allowed to sell its product on the market. If it does produce a product which meets proven standards, then purchases could readily be made from that firm for law enforcement agencies anywhere.
With regard to the information I received from the minister's officials, I find the name of one Canadian producing company, which I have since been informed does not at the present time produce body armour but is considering doing so. The company did produce this product for a period of time but stopped a short time ago. The company in question is doing considerable research, I understand, with the RCMP and other useful sources. Even at this time and under these circumstances this company's production is probably six months down the road.
The second company the officials discussed with me is still producing bulletproof vests and is making sales abroad, for example, in some countries in the Middle East and a few in the United States. The reason this second company is not making very many sales in the United States is because of the stiff competition there from companies which have a lot of experience in the field. There is no reason why we cannot produce a good Canadian product or products if we make use of all research facilities applicable for experimentation and testing. I should add that the second company in question has sold many of its vests to some municipal and other police forces in Canada, and it has also worked very closely with the Department of National Defence-and is still doing so.
Ironically enough, this Canadian company has had its equipment tested by an American firm which I believe is called H. & P. White Co. Ltd. This company springs from the old Henry Packard and White Co. Earlier in this century, this company was approached by A1 Capone, who asked it to build him a bulletproof car. Today, the offspring of that company is renowned for the testing of bulletproof vests. Anything approved by it passes the test and becomes a government approved and lawful item of body armour.
The Brinks Security firm and special constables at the Olympics in Montreal, for example, have been and were provided with body armour, some of which was made in Canada. Therefore, from my limited research on this subject, I am convinced we can produce a good product in Canada.
In the best interests of all our law enforcement agencies, including military police and special agencies, my main inter-

February 9, 1981
Adjournment Debate
est in raising this subject is twofold. First, we should have very strict testing of body armour made in Canada, and it must be tested by well-qualified people. By the same token, foreign imports should also receive the same stringent test. A product of this nature should not be allowed on the market until it passes such tests. We in Canada are quite capable of supplying our own domestic market as well as foreign markets, but we should put more emphasis on testing and approvals.
Second, this should be part and parcel of standard police equipment. Individual law enforcement officers should not have to pay for their own. Surely we do not have to wait until more tragedies occur, such as the one which started in my constituency and ended in the constituency of the hon. member for Parry Sound-Muskoka (Mr. Darling) just before Christmas, before we apply a serious policy of co-ordination at all levels of government and make every effort to protect and assist our law enforcement officers when carrying out their duties.
I and many others would like to see this happen in all jurisdictions, again in order to help protect those individuals across Canada who try to make Canada a safe place for all to live. 1 cannot emphasize enough, regardless of whether a peace officer is municipal, provincial or federal, that they are in fact participating in this important aim. I would like to see a sincere effort in co-ordinating this matter with various levels of government and at the same time in ensuring that the vests are of excellent quality and Canadian made.


Mr. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Mr. Speaker, first I commend the hon. member for Renfrew-Nipissing-Pembroke (Mr. Hopkins) for his analysis of the situation we face with regard to body armour and the hazards facing our law-enforcement officers. In fact, 1 would go so far as to say that everything he said tonight was something with which I could agree entirely. The area to which I am able to respond as the Parliamentary Secretary to the Minister of Finance deals specifically with the question of the 25 per cent import duty placed on body armour at the moment under the most-favoured nation customs duty. Indeed, the possibility of removing the customs duty on bulletproof vests for police officers was reviewed very carefully by the Department of Finance in response to a number of requests, not only from the hon. member for Renfrew-Nipissing-Pembroke, but from users who advanced the argument that the vest is a piece of safety equipment which should be accorded the same duty-free privilege as firemen's safety helmets and industrial helmets.
The investigation of the department revealed that duty free entry for firemen's safety helmets and industrial safety helmets, such as miners' helmets, was established in the late 1920s at a time when these helmets were not produced in Canada. In 1947 Canada entered into a commitment under the general agreement on tariffs and trade not to impose a customs duty on these helmets. On the other hand, bulletproof vests are produced in Canada by at least two companies, one of
which is International Uniforms Limited of Montreal that manufactures several varieties. As the hon. member for Renfrew-Nipissing-Pembroke indicated, this company sells these vests not only in Canada but also to outlets in the United States. Currently this company is working very closely, with the RCMP to further improve its product so that all the standards to which my hon. friend referred will be met as they should be. The other known producer is Safeco Manufacturing Limited of Scarborough, Ontario. Currently that company is not producing but is in the research phase of developing products which I am sure will meet the standards to which my hon. friend referred.
It is my view that the operations of these two companies would be adversely affected if the duty on body armour vests were removed. 1 think it is desirable to have this kind of equipment made in Canada to the standards recommended by my hon. friend. Granting tariff protection to Canadian manufacturers will assist in realizing this objective and help manufacturers to expand sales in Canada and abroad.


CANADIAN ARMED FORCES-REPORTED TESTING OF CHEMICAL DEFOLIANTS
Terence James (Terry) Sargeant: Mr. Speaker, on January 23, on January 26 and on January 27 of this year and again today, I asked the Prime Minister (Mr. Trudeau) and the Minister of National Defence (Mr. Lamontagne) a series of questions surrounding the matter of the testing of chemical defoliants at Canadian Forces Base Gagetown in June, 1966 by the United States army.
The government's answers to the questions my colleagues and I directed on this matter have served more to cloud the issue than to enlighten those of us who sought answers.
Two fundamental questions arise out of the Gagetown incident. First, what is the nature and extent of Canada's involvement in chemical and biological warfare testing and, second, why have Canadian governments repeatedly denied-and in fact continue to deny to this day-that Canadian chemical research at any defence establishment in this country was for the aid of the American effort in Vietnam?
The credibility of the Department of National Defence is at stake in this matter, and every day that department continues to deny Canada's role in chemical warfare testing only adds to its incredibility. After we discovered that Winnipeggers had been used as guinea pigs in a 1953 test over that city, the Minister of National Defence told us that this was the last revelation, that there were no other instances of open air testing. Well, six months later we learn of the Gagetown tests in which the carcionogenic chemicals, Agents Orange, White, Purple, and Blue, were used. Now that the government has stated categorically that there were no other tests, I am sure we need only wait a few more months for yet another incident of that kind to come to light. Surely Canadians deserve better from their government than this feeble display of excuses following one after the other.
February 9, 1981

On March 10, 1970, the then minister of defence, Leo Cadieux, issued a statement to the Standing Committee on External Affairs and National Defence detailing Canada's participation in chemical and biological warfare testing. The document stressed that Canada's only involvement was from a defensive point of view, to test defensive measures to be used in case of attack. There are, however, two very interesting points that should be drawn from that 1970 document.
In describing Canada's role in any testing, the report indicated:
-it is therefore entirely Canada's decision whether certain experiments will take place on Canadian soil.
The report also went on to indicate categorically:
-It should perhaps be stated in this connection that no research carried out by the Department of National Defence has affected the use of chemicals in Vietnam.
Obviously these 1970 statements do not jibe with what we have discovered happened at Gagetown.
Now the minister and his officials have gone out of their way to puff up a story about the 1966 tests being related only to brush control experiments at CFB Gagetown. The Department of National Defence and the minister himself have insisted that there was no suggestion on the part of Canadian defence officials or the U.S. Army that the tests were for the development of chemical warfare agents, specifically defoliants for use in Vietnam.
It seems that these gentlemen cannot read if they insist or deny that Canadians, or Americans for that matter, had intentions of putting the results of the Gagetown tests to use in Vietnam.
Technical Memorandum 141, Defoliation Tests in 1966 at Base Gagetown, New Brunswick, Canada, a U.S. Army document, indicated:
-large areas similar in density to areas of interest in Southeast Asia were needed-
The memorandum went on:
-this land located at CFB Gagetown, Oromocto, New Brunswick, was suitable in size and density and contained a mixture of conifer and deciduous broadleaf species in a dense undisturbed forest cover that would provide similar vegetation densities to those of temperate and tropical areas such as Southeast Asia.
It is clear that the Americans were using Gagetown because conditions were similar to those of their interest in Southeast Asia, that is, Vietnam.
The Canadian version of the report on the 1966 Gagetown test entitled "Vegetation Control" shows beyond a doubt that Canadians were well aware of the reasons for U.S. interest in testing in Gagetown. I quote from that report:
-U.S. interest is understandable. A great amount of effort has been expended to find some means of destroying the jungle canopy of Southeast Asia.
In 1966 Canadian officials knew that the Gagetown tests were a result of U.S. Army desires to destroy the jungle canopy in Vietnam. In 1981 Canadian officials do not seem to be able to make that connection.
Two other reports confirm that these tests were to aid the U.S. effort in Vietnam. A Pentagon official recently confirmed
Adjournment Debate
that the Gagetown tests were indeed Vietnam-related. Second, a book entitled "The Science of 2, 4, 5, T by Rodney Bovy and Alan Young stated that the U.S. military:
-did not disperse experimental or untested herbicides. Field tests for military purposes were applied in Puerto Rico, Hawaii, Thailand, Canada and other areas.
The ominous part of that last quote is that it leaves open to speculation the possibility that other tests could have been carried out in Canada. Agent Orange and related chemicals are not harmless, as the minister suggested.
My questions on this issue have yet to be answered by this government. 1 want to know when the government will stop this ridiculous charade of innocence concerning the government's participation in Vietnam-related tests and admit that it was a willing co-conspirator. When will the government explain why it has involved itself in such testing of offensive chemical weapons? Finally, when will this government come clean with the Canadian public and detail the nature and extent of all chemical and biological warfare testing in Canada?


Ursula Appolloni: Mr. Speaker, I remind hon. members that in 1966 the Americans were doing extremely well in Vietnam. Indeed, I believe they controlled three quarters of the land. Therefore, it was not necessary for them to do any experiments in Canada. They had all the land they wanted in Vietnam. It is a fact that for its own reasons the Department of National Defence co-operated in the testing by the U.S. army of chemical defoliants at Canadian Forces Base Gagetown in 1966.
It is also a fact that all of the materials used were commercially available and registered with the Department of Agriculture for commercial use on forest, pasture and range land. These chemicals had been in use for quite some time before the Gagetown tests and have been used more extensively since then for hydro and highway bush clearing operations, as well as by commercial users.
It is also a fact that the Gagetown tests were carried out entirely on isolated Crown property, miles from the closest inhabited areas. The fact that the spraying was done from a low-flying helicopter in calm weather conditions makes it virtually impossible that the chemicals would have been spread outside the test area.
Let it be said that we are not talking here of a massive area or of entire forests but rather of clearly marked plots totalling less than 400 acres well inside the boundary of the camp, which itself contains over 250,000 acres. Furthermore, the 2-4-D, 2-4-5 T mixture was tested on considerably less than the 400 acres.
Bush control at CFB Gagetown has always been a problem of considerable magnitude. Evidence of the problem is not only contained in departmental documents but also in publications such as Hansard, page 7281, of August 26, 1964, and the

February 9, 1981
Adjournment Debate
minutes of the Standing Committee on External Affairs and National Defence of June 26, 1966.
It is a matter of record that Canadian interest in the testing of chemical defoliants was purely in finding a better product for bush control at CFB Gagetown. This fact is very clear in the report of the Canadian liaison officer which the hon. member opposite requested and received from the Minister of National Defence (Mr. Lamontagne).
1 would like to emphasize that the Department of National Defence will not distribute documents that belong to another government; however, when the hon. member opposite asked for the Canadian document relating to the Gagetown test, he promptly received a copy and was also given a tour and a briefing at base Gagetown when he asked for one.
Having been given the facts, it was either irresponsible or simply ignorant of NDP members opposite to link herbicides with chemical warfare, as they have repeatedly tried to do. Let me also say that it may be an indication of their intellectual integrity that, in question period earlier today, they quoted only one sentence from the document the minister made available to them, and it was quoted out of context as well.
Let me suggest that the most significant health hazard in this matter may well be the anxiety created by the irresponsible allegations and innuendos of NDP members. I believe
their interest in keeping this matter alive should be seen for what it is-a convenient political expedient to make headlines.
The department has acted very responsibly in this matter, as it does in any other matter. All information on the spray trials has been made available to the federal Department of National Health and Welfare and to New Brunswick health authorities. The department will co-operate fully in any further study which relevant authorities may want to undertake in the matter. In the meantime, the three Canadian personnel who were directly involved in the trials have been medically examined by competent authorities and given a clean bill of health.
In conclusion, what we have asked ourselves and what the members opposite should also ask themselves is just how relevant the matter of some very limited brush control spraying done 15 years ago is when we all know that the same compounds have been used and are still in use extensively by agriculture and industry in many places. If their concern is about the essence of the matter, namely, the safe use of chemical products not only for agricultural but for all purposes, they should state their case clearly and not make false allegations and innuendos.


The Acting Speaker (Mr. Blaker):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, the House stands adjourned until tomorrow at 2 p.m.
At 10.30 p.m. the House adjourned, without question put, pursuant to Standing Order.


END OF VOLUME VI