1981-05-19

ROUTINE PROCEEDINGS


Mr. Gordon Towers (Red Deer):: Madam Speaker, I rise under Standing Order 43 as a surrogate for the millions of Canadians who are suffering social and economic misery because of a bankrupt administration which is bereft of ideas and solutions, and indeed is unaware of and insensitive to the chaos it has created in the economy. Therefore I move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That this House deplores the actions of the Prime Minister and the Deputy Prime Minister in junking Parliament and the Canadian people before junketing abroad at such a critical period in our economic plight and, furthermore, that the estimates for travel for the aforesaid gentlemen be reduced to $1 so that they will stay at home and apply themselves to finding solutions to the serious problems they themselves created over the last 12 years.
Their facade of helping other nations is disgustingly presumptuous when they cannot even help Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SMALL BUSINESS
Mr. J. R. Ellis (Prince Edward-Hastings):: Madam Speaker, last week under this order 1 moved two motions asking for the reduction of interest rates to assist the farmers in my area. I am now aware of a small machine shop and crane rental firm which, due to the unreasonably high interest rates, is forced to reduce its staff from 30 to eight and sell off seven of its ten mobile cranes, adding to unemployment in the area and reducing available services.
I again therefore, move, seconded by the hon. member for Northumberland (Mr. Hees):
That the Minister of Finance immediately institute reasonable interest rates for small business.


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 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity.
In view of the fact that the Minister of Energy, Mines and Resources, over the past several months, has failed to heed the warnings of the hon. member for Assiniboia (Mr. Gustafson) as to the drastic effect his national energy policy has been having on the supply and service industry in Saskatchewan and Alberta; and in light of the visit last week of representatives of the industry, and the belated outcry on the weekend by the sole candidate for leadership of the Liberal party in Saskatchewan who, up until this point, has been an unquestioning supporter of the government energy policy; I move, seconded by the hon. member for Saskatoon West (Mr. Hnatyshyn):
That the Minister of Energy, Mines and Resources make a statement on motions indicating what changes he plans on making in his energy program to assist the small service and supply companies in order that they will not end up in bankruptcy or be forced to move to the U.S.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POST OFFICE
Mr. Neil Young (Beaches):: Madam Speaker, I rise under the provisions of Standing Order 43. Since 1981 is International Year of Disabled Persons and Canada has been in full support of this international declaration, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):

May 19, 1981
That this House requests Canada Post to print at least two stamps during 1981 to commemorate the International Year of Disabled Persons, with one stamp depicting the logo of the international year and the other exemplifying the contribution made by Terry Fox in his Marathon of Hope that clearly showed that disabled and handicapped Canadians can and should be recognized for their abilities rather than their disabilities, a design for a Terry Fox stamp having been approved by the Fox family.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. John Bosley (Don Valley West):: Madam Speaker, I rise under the provisions of Standing Order 43. Last week the Prime Minister indicated that he appears to believe that Canadians should be more grateful for the apparent 50 per cent improvement in real wealth over the last decade. During that decade the tax grab of the government has increased by more than 100 per cent. Therefore I move, seconded by the hon. member for Vancouver Quadra (Mr. Clarke):
That the House inform the Prime Minister that it totally rejects his policy of "one for Canadians and two for me", that the government should begin at long last to leave more in our economy for Canadians, and that the House believes that the Prime Minister should at the very least apologize to Canadians for his economic stupidity.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADA DEVELOPMENT CORPORATION
Mr. Doug Lewis (Simcoe North):: Madam Speaker, I rise under the provisions of Standing Order 43. The large number of Liberal party hacks vying for nomination to the board of directors of the Canada Development Corporation has created confusion in the ranks of the unemployed. It may well be that there will be no more room for spouses of cabinet ministers. I therefore move, seconded by the hon. member for Prince George-Bulkley Valley (Mr. McCuish):
That the Minister of Finance be instructed to hold a lottery for laudable Liberals to determine which will be accommodated at the public trough as directors of the Canada Development Corporation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CONSTITUTION
Mr. David Kilgour (Edmonton-Strathcona):: Madam Speaker, pursuant to the provisions of Standing Order 43, I ask the unanimous consent of the House to deal with a matter of urgent and pressing necessity.
In view of the fact that the Quebec Liberal leader, Mr. Claude Ryan, has stated during the weekend that the defeat of his party in Quebec was due to the fact that the Prime Minister (Mr. Trudeau) has stubbornly ignored the will of the provinces in his attempt to patriate the constitution unilaterally, and considering the relevancy and truth of such a statement, I move, seconded by the hon. member for Don Valley West (Mr. Bosley):
That this House publicly reassert the will of the Canadian and Quebec people under the circumstances to object to this unilateral action, and that the government withdraw its totally unacceptable project in the best interests of all Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE ECONOMY
Mr. Ian Deans (Hamilton Mountain):: Madam Speaker, I rise under the provisions of Standing Order 43. Whether or not the government believes it, there are people in Canada who will suffer immeasurably as a result of high interest rates. Therefore I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the government table in this House the reasons why it has decided that Canadian families should be forced to abandon both their homes and investment therein as a result of usurious interest rates, while the banks enjoy record profit margins and, further, that the Minister of Finance should arrange public hearings across Canada to enable him to understand the magnitude of this problem.


Madam Speaker:: Is there unanimous consent for this motion?
May 19, 1981


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CENSUS
Mr. Thomas Siddon (Richmond-South Delta):: Madam Speaker, in view of a recent admission by census manager, Mr. Edward Pryor, that candidates for positions as census enumerators are nominated for each position by the local Liberal party organization or a Liberal member of Parliament, and whereas Mr. Pryor said, "It's not easy to find qualified people and if the party organization was not used, some other structure to find candidates would be needed", I therefore move, under the provisions of Standing Order 43 and seconded by the hon. member for Don Valley West (Mr. Bosley):
That this House insists, as a matter of principle, that the 1981 census be carried out in a manner free of political influence or favouritism and therefore instructs Mr. Pryor and his boss, the minister responsible for Statistics Canada, to meet immediately with the Minister of Employment and Immigration so that qualified and deserving census enumerators might be selected on an impartial basis from those thousands of qualified Canadians presently seeking employment through Canada Manpower Offices.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Bill Domm (Peterborough):: Madam Speaker, in the first quarter of this year farm bankruptcies were up 70 per cent from the same period a year ago because of the unconscionably high interest rates being condoned presently by the Government of Canada. At the same time the Small Business Development Bond program has proved to be a great help to small business; indeed, according to the Federation of Independent Businessmen, it has been a lifesaver to them. I move, seconded by the hon. member for Simcoe North (Mr. Lewis):
That the government consider applying the same principles of the SBDB to the agricultural sector and create a farm business development bond. In this way the government will go at least some way toward relieving the very high pressure being exerted at this time on this important and vulnerable sector of our Canadian economy.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions


CALL FOR LOWER INTEREST RATES-MOTION UNDER S.O. 43
Mr. Gordon Taylor (Bow River):: Madam Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. Inflation caused and aggravated by lack of production, along with higher interest rates and taxation like the excise tax on natural gas, means that farmers must pay more for heat, fertilizers, credit and machinery. Thus being unable to cope with these skyrocketing costs, they have no alternative but to cut production, which aggravates inflation bringing still higher interest rates, which again lowers production, all of which is already bankrupting our producers. Whereas the policies of the Liberal government are responsible for this vicious cycle, I move, seconded by the hon. member for Peace River (Mr. Cooper):
That this House demands that the Minister of Finance immediately lower interest rates for producers and eliminate the excise tax, which will start this country back toward economic sanity and stability, which will mean increased production, which will lower interest rates and inflation, which will again increase production, which will mean further increased production, which will lower interest rates and inflation, which will again increase production, and thus bring prosperity and happiness back to this depressed country.


Some hon. Members:: Order, order.


Some hon. Members:: Hear, hear!


Madam Speaker:: Order, please. Is there unanimous consent for this motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Right Hon. Joe Clark (Leader of the Opposition):: Madam Speaker, my question is for the Acting Prime Minister, who will recall that in the Speech from the Throne the Government of Canada solemnly promised that it would:
-act to assist those unable to bear the burden of renegotiating their home mortgages in the present abnormal situation so that the spectre of foreclosure will be avoided.
That was the solemn promise given by this government in the Speech from the Throne. The other day the Prime Minister indicated that the government intended to break that promise and that it would not help Canadian home owners who are faced with foreclosures.
The Acting Prime Minister will know that the government is spending $1.5 billion on the acquisition of Petrofina. He will also know that the government is spending some $480 million, which it does not need to spend, on oil import subsidies

May 19, 1981
Oral Questions
because it cannot come to an agreement with the producing provinces. Will the Acting Prime Minister tell this House and the people of Canada why the government prefers to spend billions of dollars on buying oil companies and on subsidizing the oil economies of OPEC nations rather than using that money to keep its promises to help Canadian home owners who face foreclosure?


Some hon. Members:: Hear, hear!


Hon. Paul J. Cosgrove (Minister of Public Works):: Madam Speaker, the statement quoted by the right hon. gentleman must be seen in the context of the whole Speech from the Throne. I would draw to his attention, and to the attention of members of the House, the next sentence in the Speech from the Throne, which was to the effect that the ministers of the government were convinced-and this was in April of last year-that the objective of this saving feature referred to by the right hon. gentleman could be achieved without the government embarking upon a major subsidy program. Indeed, subsequent to that, the Prime Minister requested that I meet with the leaders of the lending institutions, which I did. We encouraged and urged them to attempt to assist home owners faced with these problems on a selective and individual basis. I would submit, in fact, that has been the case, since in this month the number of foreclosures is down compared to the same period for last year.
prefer to spend billions of dollars on oil companies in foreign countries rather than spending them to help Canadians here at home in a time of serious economic crisis? Can the Acting Prime Minister explain those priorities to us? Why do oil companies receive more priority than widows, home owners, and the victims of bankruptcy?


Hon. Jean-Luc Pepin (Acting Prime Minister):: Madam Speaker, the first question raised by the hon. gentleman had to do with housing, so I thought the proper minister to answer the question would be the minister in charge of housing.
With regard to the statement by the Leader of the Opposition about the acquisition of Petrofina, I think most people in Canada are in full support of that acquisition.


Some hon. Members:: Hear, hear!


Some hon. Members:: No!


Jean-Luc Pepin: If the Leader of the Opposition asked questions with respect to what the people of Canada want, I think he would find that they are more in agreement with the acquisition of Petrofina than they were in agreement with his position on Petro-Canada.


Charles Joseph Clark: Madam Speaker, unwittingly the minister has given very good advice to the people of Canada. He says that you should always read the next sentence in what any Liberal says. The next sentence in what any Liberal says is that they will break the promises they solemnly give to the people of this country.


Some hon. Members:: Hear, hear!


THE ECONOMY
Charles Joseph Clark: Madam Speaker, my question is for the Acting Prime Minister. I hope he will not shuck this one off to some other junior minister.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: My question has to do with the priorities of this government, which has refused to help Canadians who are facing foreclosures on their homes. It refuses to help low income Canadians who are dealing with the extraordinary costs of inflation; it refuses to help small businesses and farmers who are facing bankruptcy, yet it is prepared to spend $1.5 billion to purchase an oil company and $480 million on an oil import subsidy, which it does not need, since it is too stubborn to come to an agreement. We know that the government is prepared to spend billions of dollars. Why does it


AGRICULTURE
Charles Joseph Clark: I at least give the Acting Prime Minister credit for not trying to defend what is indefensible, and that is, to spend Canadian taxpayers' money, to raise the taxes of Canadians, to put it into the hands of large oil companies and into the hands of OPEC rather than to put that money into the hands of Canadians who need help in meeting mortgage interest payments or in avoiding bankruptcy or in meeting any of the other domestic economic crises which this government's economic policy has caused.
The Minister of Agriculture heard his Prime Minister say the other day, before his Prime Minister left the country, that Canadians, including farmers and food producers, are ahead of the game and that their real disposable income has gone up by 50 per cent during the period 1970 to 1980.
If the Minister of Agriculture agrees with that, will he explain to us how it is that in Ontario alone, in the first three months of this year, farm bankruptcies have gone up 76 per cent over last year? Will the Minister of Agriculture also tell us, if farmers are having it so good this year, why are there all these farm bankruptcies, and what does his government intend to do to help Canadian farmers who are facing bankruptcy as a direct result of the policies of his government?


Hon. E. F. Whelan (Minister of Agriculture):: Madam Speaker, I am aware of what the Prime Minister has said. It is true what he said about farm income; but there are certain sectors in the farm productive industry which are in deep
May 19, 1981

trouble. Those are the ones in the pork and beef production entities, the red meat production entities. However, the others have enjoyed what the Prime Minister has said, that kind of living. They have looked after themselves to a certain extent. They have looked after themselves in a better marketing establishment for themselves, better marketing entities for themselves.
All one has to do is to check the grain industry, if one wants to see this, where interest-free advance payments are made to them. If one looks at the grain-year that ends in July and starts again in the first of August, one will see that they have applied for less this year, so far, than they did the year before, because they are delivering their grain and they are getting reasonable prices for it. So, those production entities are doing well in agriculture; but the bankruptcies are in the two areas which are doing so badly. Speaking of bankruptcies, when one uses the terminology of 70 per cent more, one has to be realistic and realize that there were only 124 in Ontario last year, and there have been slightly over 200 registered so far this year.
But I am sure that the hon. Leader of the Opposition also knows that that does not show the true picture because many of the people are losing their-


Mr. Epp:: Their shirts!


Eugene Whelan: -their farms, etc., and not really declaring bankruptcy. They are being put in a form of bankruptcy by banks, etc. So, even the figures which we are both using do not show the true picture.


Mr. Hees:: You are Paul Martin's boy, Gene.


THE ECONOMY
Hon. Flora MacDonald (Kingston and the Islands):: Madam Speaker, my question is to the Acting Prime Minister who will remember that last week the Prime Minister stood up in the House and boasted that Canadians never had it so good. What is more, on the CTV "Question Period" the Minister of Finance said: "individuals are pretty adaptable and they are now prepared to live with the inflation rates and the mortgages rates." That shows just how far he is removed from ordinary people who, indeed, are not prepared to live with the government's high interest rate policy. They want to know what the government is doing.
I would like to ask the Acting Prime Minister, because I think that he is probably more sympathetic to the plight of the ordinary income earner than either of his colleagues I have mentioned, what the government is prepared to do to relieve the problems of those who are losing their homes or who are being forced to exist on less than adequate diets?
Oral Questions
[ Translation]


Hon. Pierre Bussieres (Minister of State (Finance)):: 
EFFECT OF INCREASE IN FOOD COSTS
Flora Isabel MacDonald: It is
easy to see, Madam Speaker, that even though the Minister of Finance is out of the country, his cabinet colleagues have the albatross of the Minister of Finance hanging around their necks.
I should like to direct my supplementary question to the Minister of Consumer and Corporate Affairs who surely must be shocked by the tremendous increase in the cost of food. The over-all consumer price index is up 12.7 per cent, but the price of milk is up 48 per cent in the past year, butter 37 per cent, potatoes 148 per cent, and fruit and vegetables 73 per cent, to name just a few.
I should like to ask the minister what he is doing to see that consumers are not being gouged. What recommendations is he making to his cabinet colleagues to see that the burden of these high food costs is not falling heaviest on those who can least afford it?
[ Translation]


Hon. Andre Ouellet (Minister of Consumer and Corporate Affairs and Postmaster General):: Madam Speaker, it is obvious that rising prices, particularly food prices, must be of great concern to all Canadians. Of course, as consumer minister I am very much interested in that question, but I support the efforts made by the Minister of Finance to settle the problems created by inflation. I do not believe we can isolate the question of food prices and turn it into the exception. On the contrary, I would suggest that anyone who cares to examine the situation in the field of food prices will realize that very fortunately food prices in Canada are still much lower than those which prevail in most industrialized countries.

May 19, 1981
Oral Questions


SOCIAL SECURITY
Hon. Stanley Knowles (Winnipeg North Centre):: Madam Speaker, my question is for the Minister of National Health and Welfare. In view of the serious repercussions of high interest rates and high prices as far as senior citizens are concerned, does the government plan anything at this session on an emergency basis to come to the aid of senior citizens? I ask the minister not to give the stock answer that there was a $35 increase last year and that it has been fully indexed because, as a matter of fact, the maximum guaranteed income supplement today is only 8.8 per cent higher than it was when that $35 was given, whereas the cost of living is rising at a rate of 12.5 per cent on an over-all basis, and even more with respect to food. Is the government going to do something on an emergency basis for senior citizens right now?


Hon. Monique Begin (Minister of National Health and Welfare):: Madam Speaker, I would like to be able to give a positive answer to the question asked by the hon. member, but unfortunately 1 cannot do so for the very reason that we are now trying to get through a rather difficult economic period. The hon. member does not want me to speak about the indexation of the old age pension supplement. I must still tell him that we have seriously considered the possibility of using a different index for senior citizens according to the cost of a food basket and a model of budgetary spending applicable to their particular way of life. All the advice that we have received in this regard was to the effect that over ten years, the difference would represent a total of only 1 per cent, or .1 per cent a year, which cannot justify exceptional measures. Apart from this measure, we cannot incur further major government expenditures at this time, I am sorry to say.


REQUEST FOR EMERGENCY ACTION
Stanley Howard Knowles: Madam Speaker, I did not ask the minister not to refer to the indexation of pensions. I asked her not to allege that the $35 given last year was being fully indexed, for it has not been. With respect to the point she has raised about a separate index amounting to only a 1 per cent difference over ten years, may I ask if she is not aware of the fact that at the present time food prices are running at 16 per cent and 18 per cent or higher on an annual basis, and that rental and energy costs are rising beyond reason? Is there not now, in her opinion, a case for an emergency measure-never mind the ten-year period-to keep senior citizens from falling too far below the poverty line?


Some hon. Members:: Hear, hear!


Monique Bégin: Madam Speaker, I regret to have to mention the matter of cost when dealing with the problem of senior citizens, especially-and I do emphasize this to the House-that of single people who receive the income supplement and many of whom are women. We do not usually say that they receive a sufficient number of special privileges which are not taken into account in the indexation and which are of course not deducted, such as senior citizen residences which clearly cost less. There remains one problem of which I have often talked with my colleagues in the House, and which would cost us $730 million to solve.
As for the other senior citizens, I refer to the couples, all of them are now over the poverty line, and this is why we often speak about the $35 a month, which makes $480 a year, to which quarterly indexation applies. The next indexation of the old age security pension and supplement is due in five weeks. It will amount to several dollars. It is worked out to take into account-and I regret that it cannot occur at the same moment as prices increase, but everyone knows that this is impossible. In five weeks, there will be an increase of several dollars in the amount of the pension and the supplement.
] English]


Stanley Howard Knowles: Madam Speaker, as the minister must well know, that indexation she talks about is always behind. By the time a pension increase comes, there is another rise in the cost of living leaving pensioners still further behind.


REQUEST FOR LEGISLATION TO BENEFIT WOMEN AGED 55 TO 65 YEARS
Stanley Howard Knowles: Madam Speaker, my final question has to do with the very good speeches the minister makes around and about the country, in which she keeps saying that one of her priorities is to do something for single women, especially those between the ages of 60 and 65, who are not included in the spouse's allowance, and those between the ages of 55 and 60, for whom there is nothing under federal auspices. Is the minister prepared to make recommendations at this session of Parliament to do something to remove this discrimination against women between the ages of 55 and 65?


Mr. Baker (Nepean-Carleton):: Before the end of this session.
translation]


Monique Bégin: Unfortunately, Madam Speaker, I have not spoken about this problem for quite a while, except to recognize its existence when it is specifically discussed, and this for a good reason. I have examined repeatedly the priorities of my department and the available budget, not only in my own department, but for the government in general, and it is impossible
May 19, 1981

for me to recommend such action as a priority before we have placed the people over 65 above the poverty line. This is still our first priority, and unfortunately, I have always said that this could not be done immediately, but rather as soon as the economy would permit.


REQUEST FOR EXAMINATION OF IMPACT OF HIGHER PRICES ON POOR AND ELDERLY
Hon. James A. McGrath (St. John's East):: Madam Speaker, my question is for the Minister of National Health and Welfare. The food component of the Consumer Price Index, that is the food eaten at home, showed a 16 per cent increase. Our current rate of inflation is one per cent per month. Today we are told by Agriculture Canada that we can anticipate a faster increase in the rate of the price of food. Given these factors and the fact that the minister is not prepared to act to protect old age pensioners, those on fixed incomes and the working poor, against rising food prices, and rising energy prices in terms of home heating fuel, is the minister prepared at least to authorize a thorough examination into the impact of the Consumer Price Index, particularly the food price increases on the working poor and on the elderly, and is she prepared to do that now?


Monique Bégin: Madam Speaker, I have explored thoroughly, with officials of the different departments concerned, and with my provincial colleagues, the components which make up our indexation and the way it is passed on to people through all the social programs. Concerning the working poor, it is true that the child tax credit which mothers are receiving right now, amounting to $238 a year, is indexed annually and it does take time to catch up with preceding years. However, it is supposed to catch up quite closely to the cost of living.
As for pensions and supplements, they are indexed every three months. Because of that they are much closer to the exact additional burden placed on people's shoulders. For that reason I do not accept accusations like that from the hon. member. The hon. member should ask those provinces which have not even passed on the $35 to all seniors who needed it why they have not done so. Instead of asking these types of questions which raise expectations, when the member knows full well there is no more money for big expenditures, and it is immoral to do that.


Flora Isabel MacDonald: What about Maurice Strong?


SUGGESTED ADVANCE INDEXING
James Aloysius McGrath: Madam Speaker, one thing the minister said made sense, that the poor and the old age pensioners of this country cannot expect any sympathy from this government. That is obvious.
The minister referred to indexing of the child tax credit which takes place on an annual basis. Indexing with regard to the Canada Pension Plan also takes place on an annual basis.
Oral Questions
Indexing with regard to the OAS is done quarterly. In each case though people have to fall either a year or three months behind. Given the economic situation in the country today, surely it is possible to be able to anticipate the rate of inflation on a quarterly basis so that people would not have to fall behind. When people's incomes fall behind the rate of inflation, it is obvious they have to go without. There is no consolation waiting for indexing to catch up when they probably get only $2 more in their old age pension cheque.


Monique Bégin: Madam Speaker, I suppose the question the hon. member asks is whether the government agrees that a monthly or quarterly indexation for all social programs, other than pensions, is apropos. I did not quite understand the question which the hon. member asked.


James Aloysius McGrath: Madam Speaker, my question is very simple. Why not index three months ahead instead of for the three months that have just passed? That is what I am asking. It is very simple.


Monique Bégin: Madam Speaker, my answer is as simple. Could the hon. member send me his list of forecasts and we will study it?


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


HOUSING
Douglas Grinslade Lewis: Madam Speaker, my question is for the minister responsible for housing. Earlier in the question period the minister trotted out the same old defence that the number of foreclosures is down. The minister v ill know that foreclosure is legal history and that banks and trust companies are now using power of sale.
However, my question deals with repossessions and defaults which come into the hands of the mortgage insurance fund. In 1978 the mortgage insurance fund acquired only 2,900 units; in 1979 it acquired 14,800 units. In 1980 it acquired 14,500, an increase of 500 per cent for each of the two years. When the government states that the number of foreclosures is down, does it mean down in comparison to 1978, or down in comparison to the horrendous record of 1979 and 1980?


Paul James Cosgrove: Madam Speaker, I agree with some of the statistics used by the hon. member in the introduction to his question. It is quite true that it was during the Conservative government period in 1979 that defaults first dramatically increased. The figure of 14,000 is correct.


Walter David Baker: You have missed the point.


Mr. Wilson:: Can you keep a straight face?

May 19, 1981
Oral Questions


Paul James Cosgrove: As a result of that, the former government authorized the corporation to borrow funds from the government in order to meet the strong demand against the mortgage insurance fund. There is no question but that the strong demand continued into 1980. I thought that I had said earlier in the question period today, and on other occasions when I spoke about foreclosures and the foreclosure rate, that I was comparing this year against last year. After all, it was March of last year when the Speech from the Throne to which the right hon. gentleman first referred was made. It is that period we were addressing. It is that which 1 used as a benchmark in my response.


DECLINE IN REAL WAGES
Douglas Grinslade Lewis: I reiterate, Madam Speaker, foreclosure is legal history. I want to ask the minister of housing something else. The Minister of Finance has suggested that Canadian home owners renewing mortgages taken out in 1976 have more disposable income with which to meet today's high mortgage interest rates. However, in the 1980 annual report the president of CMHC states that "the increase in real weekly wages dropped from an average of 2.5 per cent in the first half of the 1970s to .5 per cent" in the second half of the 1970s. That is cited in the report as a reason for the heavy volume of mortgage defaults in 1980. My question to the minister in this. Who is correct, the Minister of Finance who states that Canadians have enough disposable income to take care of higher mortgage interest payments, or the president of CMHC who cites a slowdown in the increase of real wages as the reason for mortgage defaults?


Paul James Cosgrove: Madam Speaker, 1 do not have a clear recollection of the Minister of Finance making the statement just attributed to him by the hon. member. To compare those statistics is probably not very useful to any householder, man, woman or family faced with the prospect of the large increases they have to pay in shelter costs.


Walter David Baker: They just want help.


Paul James Cosgrove: That is a real problem for them. My point today was to say that, compared to last year, thank heavens there are fewer people, whatever the reason may be, faced with that choice, the real prospect of being faced with foreclosure. Therefore they are ahead.


CANADA LABOUR CODE
Miss Aideen Nicholson (Trinity):: Madam Speaker, my question is for the Minister of Labour. In view of the fact that Canada's part-time workers, who are mostly women with family responsibilities, do not usually have access to fringe benefits or opportunities for promotion, can the minister say
what steps he is taking to ensure that those part-time workers who come under the Canada Labour Code can receive pro rated salaries and benefits, and that barriers to unionization are removed?


Hon. Gerald Regan (Minister of Labour):: Madam Speaker, the question is a very pertinent one in today's society, and to a greater degree in view of the developments that appear will be occurring in the work force in the coming months and years. There are some companies which today hire, for certain classes of jobs, only part-time employees. Part of the reason for that may be the fact that they escape pension responsibilities. They are often able to hire those people at lower rates of wages, and there are other absences of benefits. As part of our review of the Canada Labour Code, my department is reviewing that situation and will be coming up with recommendations for legislation which might recognize in a more realistic manner what is happening in the work force today and what sort of protection might be provided for part-time workers, particularly female part-time workers who are a large part of that work force.



EMPLOYMENT


Mr. Rod Murphy (Churchill):: Madam Speaker, my question is directed to the Minister of Employment and Immigration. In the case of several Manitoba constituencies, local advisory board recommendations for projects for the summer youth employment program were overruled at the ministerial level and new low priority projects were funded. In view of the fact that the local advisory board concept was a means of ensuring that local people who understood what was going on in their community had a lot of input, can the minister explain why he believes that his knowledge of all the communities is so great that he is able to overrule the recommendations of locally appointed people?


Hon. Lloyd Axworthy (Minister of Employment and Immigration):: Madam Speaker, I want to point out to the hon. member that in the vast majority of cases the recommendations of the local advisory boards were followed. If the hon. member has more precise concerns that he would like to raise, I will be glad to deal with them on an individual basis. However, under the present terms, that large generalization just does not hold true.


Rodney Edward Murphy: The minister asks for a precise list of my complaints. In one constituency the sponsor of a project who received money even though it had a very low priority from the local advisory board, was the president of the Liberal party in northern Manitoba. In another constituency it was a relative of Senator Roebuck. In another constituency in Manitoba it was someone from the minister's own constituency who received money to go into Selkirk-lnteriake. That is the problem. Will
May 19, 1981

the minister explain to us why he is using the student youth employment program as a political pork-barrel?


Mr. Crosbie:: Right on.


Lloyd Axworthy: The hon. member misinterprets the purpose of the program.


Some hon. Members:: Oh, oh!


Lloyd Axworthy: It is to provide employment for young people in this country. As hon. members will know, each constituency, regardless of political affiliation, has the right to have an advisory board. We have followed the recommendations very dutifully of most members in most cases, and are prepared to listen to their recommendations and consult with them, which is the purpose of that. The fact that there may be some additional funds available which are allocated to where there are projects of real need is a discretionary judgment that must be retained by the government.



NATIONAL ENERGY PROGRAM


Michael Holcombe Wilson: Madam Speaker, in the absence of the minister of energy I will direct my question to the Acting Prime Minister. The May 4 edition of Oil Week shows that oil drilling activity is now down over 50 per cent, land sales of petroleum properties are down over 70 per cent, and 139 drilling rigs have left the country. The downturn that was so widely predicted about the Liberal energy program some months ago is now with us in spades.
Since two of the taxes which are the most controversial in the program, the excise tax on natural gas and the 8 per cent production tax, will be before the House shortly, and since these are the main subject of the deadlock between Alberta and Ottawa, will the government consider deferring these taxes until the negotiations are completed with Alberta to indicate its willingness to be flexible, to unwind this deadlock and to bring an end to the very serious downturn that is with us in this industry?


Mr. Roy MacLaren (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Madam Speaker, the hon. member's memory seems to be somewhat confused when he speaks of a downturn resulting from the NEP only. The hon. member may recall that prior to the National Energy Program there were many indications in the journal he cites, as well as in newspapers and other media, of the adverse impact on drilling activity of the gas glut or gas surplus in Canada. We saw a downturn in those drilling activities prior to the tabling of the program.
With regard to the second part of his question, there will be ample occasion to debate the taxes as he suggests.
Oral Questions


Michael Holcombe Wilson: I will direct my supplementary question to the parliamentary secretary. Since between 500 and 1,000 producing wells have now been capped as a direct result of the energy program of the Liberal party, and since Bill C-57 will be before us shortly, is the government considering any amendments to ease the impact of this legislation on the marginal producing wells, wells that have been producing some oil but are now going out of production? We will now be paying twice the price for oil from countries like Mexico and Saudi Arabia. Will there be any amendments to Bill C-57 which will address that problem?


Roy MacLaren: Madam Speaker, any amendments to Bill C-57 will be brought forward at the appropriate time.



CANADA DEVELOPMENT CORPORATION


John Carnell Crosbie: Madam Speaker, in the absence of the Minister of Finance, who has fled to Gabon, his only positive contribution to Canada's economy this year, my question is directed to the Minister of Industry, Trade and Commerce, whose department is also concerned with CDC. I refer the minister to the original prospectus for share sales to the public in 1975 of that corporation, and also the information memorandum I have in my hand of September, 1980, which says this:
CDC is not a Crown Corporation ... CDC does not require government approval in the conduct of its affairs and the government has publicly indicated it will not interfere with the directors in the exercise of their business judgment.
In light of those representations made to the public on behalf of the government that it will not interfere with the business judgment of the directors of that corporation, on the basis of which shares were sold to 50,000 Canadians, will the minister now confirm that the government will cease interfering with the business judgment of the directors of CDC, will cease putting pressure on for the appointment of Maurice Strong as the chairman of the board of directors, and will call off Mr. Coutts, Senator Davey and the Minister of Finance, who have been telephoning and harassing directors and trying to pressure them to make these appointments? Will the government now carry out its representations to the public?


Hon. Herb Gray (Minister of Industry, Trade and Commerce):: Madam Speaker, as far as I am aware the government, through the Minister of Finance, is acting in ways totally consistent with the law passed by this Parliament creating the Canada Development Corporation, its role as a shareholder holding some 49 per cent of the shares on behalf of the Canadian people, and is generally operating in a manner consistent with the interests of all the shareholders.

May 19, 1981
Oral Questions



PROPOSAL TO BUY GOVERNMENT'S SHARES

John Carnell Crosbie: Madam Speaker, the minister will know that the CDC repudiated the minister's attempt to interfere with it a few months ago. The minister attempted to force the CDC to go in on some kind of proposal with Massey-Ferguson or Chrysler. The CDC was carrying out its proper function then, and the minister and his people since then have been attempting to bully the CDC and to stop it from taking its independent course.
My supplementary question is this: will the government accept an offer which was sent to the Prime Minister in a letter of May 14 by Burns Fry Limited? Burns Fry Limited was one of the investment dealers involved in the Canada Development Corporation share issue. Burns Fry Limited therefore feels its responsibility. Having been misled into deluding the public, the 50,000 shareholders who contributed some $400 million, Burns Fry Limited has made an offer to purchase the government's shares in the CDC so that the CDC can remain committed on its present course, and the government can go ahead and create a new vehicle to be an instrument of its public policies in the field of investment and business.
Is the government now considering that proposal from Burns Fry, or will the government give it positive consideration, and is the government prepared to sell its shares in CDC and to stop this unwarranted interference in breaching the securities laws of the country?


Herbert Eser (Herb) Gray: Madam Speaker, the details of this letter have not been brought to my attention, beyond my reading a report in the press, and I would be very happy to check with the Prime Minister to see what further information I can provide to my hon. friend, or he could direct his question to the Prime Minister himself when the Prime Minister is in the House tomorrow.



PURPOSE OF CORPORATION-GOVERNMENT POSITION

Hon. Ray Hnatyshyn (Saskatoon West):: Madam Speaker, my question is also directed to the Minister of Industry, Trade and Commerce. It is supplementary to the questions asked by my colleague, the hon. member for St. John's West.
In October of 1980 a leaked cabinet document from the minister's department indicated that the minister was anxious to recast the corporation as a government policy tool. He suggested two options, from friendly persuasion of board members to changing the act. In light of the recent speech made by Mr. Anthony Hampson, the president and chief executive officer of CDC, who said that the CDC is not a buy-back investor, oversized mutual fund saviour of sick companies, employment agency, or regional disparity eliminating machine that some people have talked about, I wonder whether the minister can confirm or deny that he is attempting to change the CDC into something of the nature of a Petro-Canada in
the manufacturing and industrial sector. Is that his intention? Is that what he is promoting through cabinet argument?


Herbert Eser (Herb) Gray: Madam Speaker, the purpose and form of operation of the Canada Development Corporation have been set down in a law passed by this Parliament and, as far as I am aware, the government is not doing anything inconsistent with the direction of Parliament in this regard. If and when there are any decisions by the government to change what is set out in this act, obviously amendments will have to be presented to Parliament, and they will be dealt with in the ordinary way through the full parliamentary process.



REQUEST FOR TABLING OF CORRESPONDENCE

Ramon John Hnatyshyn: Madam Speaker, the political meddling on the part of the government thus far has meant that there has been at least a 10 per cent drop in the value of the shares which were purchased in good faith by the citizens of Canada. The minister will know that Mr. Hampson came out very strongly in that same speech to which I referred, with respect to political interference. He said that the CDC has grown as a corporation designed to operate in the private sector of the economy under the guidance of a board of directors who are free of political intervention and who hold written assurances from both the Prime Minister and the Minister of Finance to that effect.
I would like to ask the minister whether he is prepared, on behalf of the government, to table the letters which have been given to the board of directors indicating there would be no political interference, and whether he will indicate on the floor of the House of Commons that an attempt to have Mr. Paul Martin, Mr. William Mingo, and others who are well-known Liberals, appointed to the board of directors will be discontinued, or is he trying to make this another St. Maurice Gas Company?


Herbert Eser (Herb) Gray: Madam Speaker, the minister responsible for the CDC is the Minister of Finance. 1 will be happy to draw my hon. friend's question to his attention. I was very interested to hear him mention the names of two outstanding business leaders, but I think any further information should come from the Minister of Finance.



ENVIRONMENTAL AFFAIRS


Mr. Jim Fulton (Skeena):: Madam Speaker, my question is directed to the Minister of National Health and Welfare. At the weekend the largest medical association in western Canada, the British Columbia Medical Association, passed a resolution making two specific points. The first called for a full public inquiry into the marine dumping of tailings from the
May 19, 1981

Amax mine at Alice Arm. The second called for the cessation of dumping until a detailed study of bio-accumulation of heavy metals in the food chain has been completed.
Will the minister support the B.C. Medical Association in either of those calls?


Monique Bégin: Madam Speaker, 1 have not had a briefing on the meeting of British Columbia doctors which took place during the weekend. As soon as I have, I will report to the hon. member.



TOXIC WASTE SPILLS-POSSIBILITY OF LEGAL PROSECUTION

James Ross Fulton: Madam Speaker, my supplementary question is directed to the Minister of Fisheries and Oceans. He has been in Vancouver recently. There have been two spills of toxic waste from the Alice Arm mine into the intertidal zone. The minister indicated on Thursday in Vancouver that he was considering charges. Could he tell this House whether charges will be proceeded with, or can Amax expect in the future always to be immune from prosecution in the same way it gets special orders in council during elections?


Hon. Romeo LeBlanc (Minister of Fisheries and Oceans):: Madam Speaker, as usual, the hon. member confuses the two issues. The spills are being examined by officials of the Department of the Environment and my department. If they recommend charges, charges will go ahead. There will be no harsher treatment or softer treatment for Amax than there is for any other organization which is involved in this type of situation.



HAZARDOUS SUBSTANCES


Mr. Peter Lang (Kitchener):: Madam Speaker, my question is directed to the Minister of National Health and Welfare. In view of the fact that urea formaldehyde foam insulation is definitely causing health problems for some Canadian home owners and forcing some home owners to leave their homes, will the minister indicate whether the government will take responsibility, through her ministry or any other government department, for testing all homes with urea formaldehyde insulation so that people will know whether their health is endangered and, second, if homes are found to have an excessive urea formaldehyde level, will the government take responsibility for compensation for removal of that insulation?


Some hon. Members:: Hear, hear!


Monique Bégin: Madam Speaker, with respect to the first part of the question, where technical assistance may be needed, I said to the House last week that I have asked my officials to discuss with the provinces what help can eventually be provided to
Oral Questions
people who want to know the levels of UFFI fumes in their homes.
As to compensation, I am not aware of any plans of the government to accept legal responsibility or to provide further compensation.



IMMIGRATION


Mr. John McDermid (Brampton-Georgetown):: Madam Speaker, my question is directed to the Minister of Employment and Immigration. Now that the mantle of leadership has been lifted from his shoulders, 1 would like to ask him a question about immigration. American cinematographers with travelogues have been given free access into Canada and they travel the country giving their shows to Rotary Clubs, etc., which is very fine; however, Canadian cinematographers have not been afforded the same privilege in the United States.
Would the minister use his influence to ensure that Canadian cinematographers receive the same privileges in the United States as the Americans receive here?


Lloyd Axworthy: Madam Speaker, the hon. member may be aware, because I believe the announcement was circulated to all members' offices last week, that we are working on an arrangement where we will meet with each of the constituent groups in the arts and culture field, cinematographers, people in the theatre, dance and so on, to look at each of the regulations as they apply to the admission of offshore workers or technical people. So we will be developing new guidelines for the admission of foreign workers in each of those areas and once we have those we will be in a position to discuss them with the American authorities.


John Horton McDermid: That is fine and dandy for down the road, but I ask the minister what he is going to do about Canadians who have confirmed bookings in the United States now to present their travelogues on Canadian scenery and trips. What are you going to do to assure them that they can fulfil their commitments in the United States within the next few months?


Lloyd Axworthy: Madam Speaker, we will certainly take that matter up with the American authorities, but that is a judgment that they have to make. We can only bring that to their attention, as it has been on several counts. However, I will discuss the matter further with my colleague, the Secretary of State for External Affairs, and we will see if further representations can be made to our embassy in Washington. As I said, we are in the position where we are revising our own regulations as they apply to non-Canadians in the cultural field.

May 19, 1981
Privilege-Mr. Murphy PRIVILEGE



MR. NICKERSON-NOTICE OF QUESTION TO BE RAISED

Mr. Dave Nickerson (Western Arctic):: Madam Speaker, I gave you notice of a question of privilege earlier. It involves certain improper, partisan actions by the Minister of Indian Affairs and Northern Development (Mr. Munro), and because he is not in the House to answer these charges, with your permission I would like to have this matter held over until such time that he is in the House.


Madam Speaker:: It is not necessary for the minister to answer any so-called charges the hon. member might make. If he does want to expose his question of privilege I can hear it and see whether there is a foundation for it. However, if he prefers to wait until such time as the minister is here, I can hold it over for a few days.



MR. MURPHY-ALLOCATION OF PUBLIC FUNDS

Rodney Edward Murphy: Madam Speaker, my question of privilege arises out of what happened in today's question period, and if the minister would come from behind the curtains I would like to raise the issue.
I raised the matter of funds being used not as recommended by the local advisory board, but being used in some cases as a political pork-barrel. The minister responded that I did not understand the nature of the funding. If he means by that that it is being used for political pork-barrelling, I accept that answer; but he also said that what was happening was that he was using additional funding to give money to these programs where he seems to have a few friends within the province of Manitoba.
That is not correct, Madam Speaker. According to the information that came from the minister's office, he has cut money that was allocated by the local advisory board, for projects in South Indian Lake and one of the projects in The Pas and used that money to fund another group which has asked for funding for their organization.
Now, it is not my purpose today to try and raise an issue over whether or not the minister has the right to intervene; what I am referring to is the role of the MP. The minister asked members of Parliament to do two things; first of all, he asked us to appoint local advisory boards; secondly, he asked each of us to make our own personal recommendations as to what that money should be used for. And that should have happened after the local advisory board had made their recommendations.


Madam Speaker:: Order, please. It seems to me that the hon. member does not have a question of privilege but a grievance about the way in which a minister has proceeded in the allocation of public funds. That is quite legitimate; he may have that grievance and he may want to discuss it or have a press conference about it but it certainly does not form the basis for a question of privilege. Unless the hon. member has
other points to make concerning this particular question, I will have to tell him that I cannot hear him further.


Rodney Edward Murphy: Madam Speaker, I may accept the suggestion to have a press conference, if that is your wish. However, if I understand what the minister asked us to do as MPs and what he did in response to what he asked us, then I do have a bona fide question of privilege.
He had asked us as members of Parliament to make recommendations to him as to how that money should be used in the riding, but what happened in my particular case, and it may have happened to other MPs, is that on May 12 I sent my recommendations to him; on the same day, even before the minister's office had received my recommendations, I received his decisions. So why did he go through the facade of asking for MPs' input?


Madam Speaker:: Order, please. I can see there is no change in the direction of the argument the hon. member is now presenting. I am quite certain that this is a good matter for debate and the hon. member may take some other opportunity, such as the adjournment proceedings, to debate this specific question.



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

Pierre Bussières: Madam Speaker, pursuant to Standing Order 41(2), I am pleased to table, on behalf of the Minister of Finance (Mr. MacEachen) the Economic Review for 1980, a general review of recent economic developments.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. John Evans (Parliamentary Secretary to Deputy Prime Minister and Minister of Finance):: Madam Speaker, the following questions will be answered today: Nos. 1,058, 1,935,
2,071,	2,072, 2,073, 2,185, 2,267, 2,270, 2,297, 2,460 and 2,496.
I ask, Madam Speaker, that the remaining questions be allowed to stand.
May 19, 1981


Mr. Cossitt: 1.	Did the CBC at any time in the past use the services of Professor Paul Lin of McGill University for commentaries on Asian affairs?
2.	To the knowledge of the CBC or the government, did Professor Lin work for approximately 17 years as an assistant to Chairman Mao and the then government of the People's Republic of China?
3.	To the knowledge of the government, was Professor Lin on return from a subsequent trip to the Far East searched by the United States customs at San Francisco and was it discovered that he had on his person approximately $20,000 in small bills and, if so, for what purpose was this money to be used?
4.	Is the RCMP security service aware of the incident in San Francisco and, if so (a) on what date did they become aware of it (b) have they a file on the matter (c) to their knowledge, what was done with the money?


John Leslie Evans: 1 am informed by the Canadian Broadcasting Corporation and the Solicitor General as follows: 1. Yes. Paul Lin, professor of East Asian Studies at McGill University, has participated on occasion in such programs as "Sunday Morning'' and "As It Happens."
2.	The CBC is aware that Paul Lin worked in China for some time, but not of his specific position there.
3 and 4. It is not considered in the national interest to answer these questions as it would tend to confirm or deny the existence of national security investigations into the activities of particular individuals, groups or organizations.


Mr. Herbert: 1.	In the fiscal year 1979-80, were contributions made by the government to space research programs at Canadian universities and, if so (a) in what amounts (b) which departments made the contributions (c) to which universities were contributions made?
2.	Are there any long-term commitments continuing through the current year into the next fiscal year and beyond?


Mr. Roger Simmons (Parliamentary Secretary to Minister of State for Science and Technology and Minister of the Environment):: 1.	(a) In 1979-80, the government contributed to Canadian university space research programs through: 27 research contracts administered by departments, which amounted to $469,700; logistic and material support (balloons, rockets, instruments, accommodation, etc.) provided by NRC, to eight universities and to the Canadian Corporation for University Space Science, amounting to $2,337,388; 30 grants to individual university researchers awarded by the Natural Sciences and Engineering Research Council (NSERC), amounting to $675,000;
(b)	and (c) The list below is a breakdown of contracts and grants given to each university, as well as the corresponding amounts and sponsoring departments.
Order Paper Questions
2. In most cases, the duration of research contracts and projects is more than one year, extending in many cases to two or three. There can thus be an implied multiyear commitment when support for a given project is given. However, there is no long-term commitment in the sense of having to maintain a given level of annual support by replacing expired contracts
with new ones. Contracts			
University	Amount 1979/80	(S) 1980/81	DepartmentCarleton	19,700	9,983	EMR (CCRS)10,000	-	DOCOttawa	12.000	DOC-	18.000	"-	21,000	"York	88,000	80,000	EC-	12,844	F&O12,000	13,000	ECToronto	17,000	16,000	DOC9,000	28,000	"14.000	18.000	"15.000	10,000	"5.000	5.500	ECMcMaster	13.000	39,000	DOC18,000	13,000	"Queen's	20,000	30,000	DOCWaterloo	27,000	30,000	DOC-	6,000	ECManitoba	23,000	-	DOCQuebec	15,000	34,000	DOC6,000	
EC
Laval	20.000	21,000	DOCSherbrooke	20,000	20,000	DOC-	30,000	DOCPolytechniquc	49.000	50,000	DOCSaskatchewan	15,000	20,000	DOC2,000	13,000	"5,000	17,500	ECMontreal	-	25,000	DOCNew Brunswick	13,000	DOC8.000	5,400	ECCalgary	-	4,654	F&O12,000	12,000	ECCanadian Council of	Universities	-	4,000	F&OWestern Ontario	5,000	-	ECMcGill	10,000	-	ECGrants to individual university researchers (Universities of: British Columbia, Victoria, Calgary, Alberta, Saskatchewan, Toronto, Western Ontario, York and Prince Edward	Island).	675,000	653.602	NSERC
Logistic and Material Support

May 19, 1981
Order Paper Questions
Amount ($)
1979/80	1980/81 Department
Universities: York,
Saskatchewan, Calgary,
Alberta, British Columbia, Western Ontario, Toronto,
Manitoba and the Canadian Corporation for University Space Science (a non-profit organization representing seven Canadian
universities).	2,337,388	- NRCTotals	$3,482,088	$1,273,483


Mr. Cossitt: With reference to the answer to question No. 1,036 which states in part, that Mr. Yvon Gariepy, Master of the Royal Canadian Mint, travelled to Stratford, Ontario, on or about June 3, 1979, in a car rented by Madame Claudette Nadeau, President of Crown Assets Disposal Corporation, for the purpose of his meeting with a marketing consultant (a) what was the name of the marketing consultant (b) what are all the details of the consultation (c) where did the consultation take place and on what dates and during what hours?


Hon.   J.-J. Blais@Minister of Supply and Services: I am
informed by the Royal Canadian Mint as follows:
(a)	Mr. K. H. J. Clarke, President of Kaysea Consultants Ltd., Toronto.
(b)	Disclosing details of the consultations could be materially injurious to the financial interests of the corporation.
(c)	Stratford, Ontario, during the morning and the afternoon of June 4, 1979.


Mr. Cossitt: With reference to the answer to question No. 1,267 which states in part, that Mr. Yvon Gariepy, Master of the Royal Canadian Mint, met in Athens, Greece with certain persons, what were the names of all such persons and their positions?


Hon.   J.-J. Blais@Minister of Supply and Services: I am informed by the Royal Canadian Mint as follows: see question
2.071,	part (b) answered this day.


Mr. Cossitt: With reference to the answer to Question No. 1,250 which states in part, that Yvon Gariepy, Master of the Royal Canadian Mint, met in the Netherlands with certain persons, what were the names of all such persons and their positions?


Hon.   J.-J. Blais@Minister of Supply and Services: I am
informed by the Royal Canadian Mint as follows: see question
2.071,	part (b) answered this day.



Mr. Cossitt: 1.	With reference to the answer to question No. 2,025 which lists the names of those engaged in working on questions on the Order Paper, how many have (a) English (b) French, as their mother tongue?
2.	Is each of the official languages balanced and, if not, for what reason?


John Leslie Evans: 1.	(a) None.
(b) Nine.
2.	The language requirements of each position vary by position but are equal in the competence required in each of the two official languages in the two instances. In five of the nine positions, including the most senior positions, the language requirement in both languages is of the highest degree. Three of these positions require a professional level in both languages which is attainable only through special training but which cannot be attained in 12 months' continuous language training. In two of the skills, listening and speaking, inasmuch as each of the employees meets if not, in fact, exceeds the language requirements of the position, the requirements of the official languages policies are being met. Based on the tested language competence of every employee in this office, the competence in both official languages is balanced even though the first official language of each employee is French. The representation of both linguistic groups is for the moment not balanced. In staffing the positions with the exception of three of the nine positions requiring professional levels in both languages, candidates of either official language extraction are equally considered. The unbalanced representation which now exists could eventually be altered through attrition and appointments of replacement staff.


1.1r. Cossitt: 1.	Did the Minister of State for Science and Technology and Minister of the Environment authorize the rental of an aircraft on or about January 29, 1981, to fly from Serengeti National Park in Tanzania to Nairobi and, if so (a) what was the cost to the taxpayer and what are all the reasons justifying the cost (b) what were the names of all the persons on board?
2.	Was the aircraft used to transport the minister and his associates to Nairobi to have a dinner with a friend, Mr. David Macuk, an American diplomat, and did the minister have dinner with Mr. Macuk?
3.	Did the minister turn down the opportunity (a) for dinner with the Canadian high commissioner (b) of conferring with a second-ranking United Nations environmental program official while in Nairobi to have dinner with Mr. Macuk?
4.	Did the Tanzanian government offer an aircraft free of charge to fly the minister and his group out of Serengeti National Park to connect with an Ethiopian Airways flight from Kilimanjaro Airport to take the minister to Nairobi and, if so, for what reason was this offer not accepted as an alternative to renting the aircraft at the taxpayer expense?


Hon. John Roberts (Minister of State for Science and Technology and Minister of the Environment):: 1. No. The
minister flew in a rented aircraft from Lake Manyara, Tanzania to Nairobi.
(a)	The cost of renting the aircraft, allowing for differences in currencies at the time the invoice is paid, will be approximately $1,300. The rental of the aircraft was essential as the only possible means of connecting with commercial flights to enable the minister to return in time for important speaking engagements in Canada.
(b)	Mr. A. Cooke, Mr. N. Lynch, the Hon. John Roberts, Mr. J. Watts.
2.	See 1. Yes the minister did have dinner with Mr. Macuk.
May 19, 1981

3.	(a) Yes. The minister however, did meet with the
Canadian high commissioner and conferred with him on United Nations environmental programs.
(b) No invitation was offered.
4.	No.


Mr. Herbert: With reference to the Program for the Advancement of Industrial Technology (PAIT) (a) how many years has it been in operation (b) what was the budget for last year and what is the estimate of expenditures for next year (c) how many (i) companies (ii) persons were assisted in the last year?


Herbert Eser (Herb) Gray: In so far as the Department of Industry, Trade and Commerce is concerned:
(a)	The Program for the Advancement of Industrial Technology (PAIT) began in fiscal year 1965/66 and continued until March 31, 1977, a period of 12 years. On April 1, 1977, it was replaced by the Enterprise Development Program (EDP).
(b)	EDP budget 1979/80, $47 million. Estimated expenditures 1980/81, $46 million.
(c)	(i) In 1979/80 contributions were approved for 443 projects-all to companies, (ii) None.


Mr. Neil: 1.	(a) What department operates the program "Self-Service", a trailer detailing government programs and services (b) is the program carried out in all provinces (c) for how long has it been in existence and what is the cost to date?
2.	(a) Are the units owned and operated by the government or are they leased and, if leased, what are the details (b) in each province (i) how many units are in operation (ii) how many persons are employed under the program?
3.	Is the program a continuing one or is it limited to a certain period?


Hon. Jean Chretien (Minister of Justice and Minister of State for Social Development):: 1.	(a) The "Self-Service" program is operated by the
Canadian Unity Information Office.
(b)	Yes.
(c)	The program has been in operation since October, 1978. The cost to date is $1,242,126 with a visitor attendance of 1,154,650. Based on a per capita cost, this would amount to $1.07 per visitor. It should be noted that capital costs have been amortized over a six-year period.
2.	(a) All units are owned and operated by the Government of Canada.
(b) (i) British Columbia, one unit, 3 exhibit attendants; Alberta, one unit, 3 exhibit attendants; Saskatchewan, one unit, 3 exhibit attendants; Manitoba, one unit, 3 exhibit attendants; Ontario, two units, 3 exhibit attendants; Quebec, one unit, 3 exhibit attendants; Atlantic Prov-
Bankruptcy
inces, one unit, 3 exhibit attendants; and six attendants on a rotational basis throughout the entire program.
(ii) All 30 road personnel supporting the "Self-Service" program are hired regionally under contract for a period of one year.
3.	This is part of a continuing program designed to bring information on the services and programs offered by the Government of Canada to Canadians.


Mr. Wenman: What was the total cost, including printing, publication and distribution, of the 1980 Annual Report of the Commissioner of Official Languages and how many copies were printed?


John Leslie Evans: The Commissioner of Official Languages reports directly to Parliament and not through a minister. Questions can be put directly to him.



HOUSE OF COMMONS APPOINTMENTS

Mr. Cossitt: Since the answer to question No. 1,491 was prepared, were any further House of Commons appointments made by order in council and, if so, in each case, what was the name, position and date of appointment?


Hon. Yvon Pinard (President of the Privy Council):: No.


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


André Ouellet: that Bill C-12, respecting bankruptcy and insolvency, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Madam Speaker, the bill on bankruptcy and insolvency whose second reading I have the honour to move today has indeed a long history behind it. It is the fifth such bill introduced before Parliament. Before explaining to the House

May 19, 1981
Bankruptcy
the philosophy and substance of the bill perhaps it might be useful to make a brief historic summary.
Back in February 1966, therefore over 14 years ago, the then justice minister who was responsible for the administration of the bankruptcy legislation ordered a full review of our statutes on bankruptcy. He requested a committee made up of public officials and experts to study the existing legislation and make recommendations about amendments which seemed advisable to them.
The current bankruptcy legislation dates back to 1949 and is in fact based on our 1919 legislation which in turn stemmed from the English statute of the last century. Of course the act of 1949 was amended to a certain extent in 1966. Those amendments were then made to fill an urgent and specific need, but an in-depth revamping of the bankruptcy legislation was postponed to a later date. That in-depth revamping is the object of this bill. Five years ago, in May 1975, when I was Minister of Consumer and Corporate Affairs I introduced the first version of this bill. Far was it from me to imagine that five years down the road I would again be called upon to introduce another version of the same bill.
It is obvious, and this has to be said, that protracted parliamentary procedures-the impossibility of a quick passage through the House of those bills deemed urgent but not necessarily priority items-did not help the implementation and adoption of this bill. Since the House of Commons had been unable to undertake consideration of the first bill in 1975, at my request the Senate banking, trade and commerce committee made an exhaustive study of the substance of the bill. After a number of study sessions during which many organizations made their views known, the Senate committee published in December 1975 a report recommending changes to many provisions of this bill. In light of that report, the first bill was substantially amended so as to include most of the amendments suggested by the Senate committee. Since then the bill has been reintroduced in the Senate, each time practically unchanged.
There was Bill S-ll in March 1978, Bill S-14 in February 1979, and Bill S-9 in November 1979, this time introduced by the minister of justice of the former government. The bill now before the House is identical to Bill S-9 of the last session that was brought in by the minister of justice in the Conservative government. It goes without saying that the act must meet the needs of the day, otherwise it is an inadequate tool that does not meet the objectives it was assigned or meets them inadequately. I need not insist on the fact that today's world of business and credit is not that of yesteryear and that, as a consequence, the Bankruptcy Act, as we now know it, was meant for days gone by, that it is not the instrument we need today to settle financial failures or regulate the rights and duties of the various parties involved. Let us remember merely
that the credit traditionally limited to the world of business and used by the ordinary citizen almost exclusively for the purchase of his home has now become commonplace for almost every citizen and to meet all sorts of needs, I would even say all sorts of whims on the part of the consumer. Consumer credit alone has shot up from $835 million in 1947 to almost $40 billion today.
It is no surprise then that in the face of that real credit explosion, the Bankruptcy Act should be resorted to increasingly and that it should become that much more imperative and necessary to bring it up to date. Any legislation on bankruptcy attempts to reconcile interests that are divergent by definition. It endeavours, on the one hand, to help the insolvent debtor or the overindebted find a way out of his financial difficulties. On the other hand, it seeks to protect, as it must, the interests of the creditors as equitably as possible, whose interests are contrary not only to those of the debtor but also to each other. Essentially, then, it is a special legislation with regard to normal legal relations between borrowers and lenders that provides for readjustments in legal relations between debtors and creditors. Those legal relations then are the ones this bill attempts to redefine more fairly and equitably in a context that is extremely different from the one in which the original act was passed many years ago.
I certainly cannot deny that this is a voluminous bill. It contains 420 clauses. In fact, it is a separate code which will contain, after future regulations are incorporated into it, all the provisions dealing with bankruptcy and insolvency. The first of the bill which I would like to underline is the distinction it makes between the way to deal with the ordinary consumer who is crippled with debts and the way to deal with business situations. Until now, there was no such distinction under the legislation except that a summary proceeding was allowed for small bankruptcies where the assets involved did not exceed $500. Under the proposed legislation, there would be two separate systems, depending on whether or not we were dealing with the insolvency of a consumer, which would allow us to deal adequately with two entirely different situations, the protection required in a commercial bankruptcy being different from what is required in a personal insolvency. I believe this is quite important because a very clear distinction will be made based on whether a consumer is involved or whether it is a company in financial straits.
Another aspect of the bill which I would like to draw to your attention is that it gives preference to arrangements over ordinary bankruptcies. Especially in the case of consumer bankruptcies, we prefer that an arrangement be made, whenever it is possible, rather than resorting to bankruptcy which, no matter what, is simply a confirmation of failure with all its implications. The proposed legislation contains twelve parts of different length, of course, but of equal importance. I would like briefly to deal with each one of these parts. Part I contains a great many definitions which serve to clearly establish the
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scope of the legislation and to standardize some legal concepts. It establishes the prevailing importance of the act over any other act in cases of insolvency. Part II of the proposed legislation, which deals with the administration of the bill, establishes the administrative structure required for the implementation of such an act. The office of Superintendent of Bankruptcy, which has existed since 1932, will continue to do so, and will issue the licences to act as trustees to those persons who have the required qualifications. I would also like to mention that this Part contains provisions on conflicts of interest which constitute a code of ethics for trustees and inspectors.
Part III deals with arrangements for consumers. By definition, a consumer debtor is an individual who is insolvent, who may or may not be a businessman and whose debts, excluding a mortgage on his residence, do not exceed $20,000 or any other amount that may be prescribed in the future by regulation. This part establishes a simple and accessible system which would allow an individual who is burdened with debts to reach an arrangement with his creditors stating which portion of his debts he will repay. The next part deals with commercial arrangements. It consolidates the various procedures which are now found in many acts. The present bill is flexible in the sense that it allows a corporation which is in financial trouble but which is viable and worthy of being saved to file a proposed arrangement as circumstances allow.
The most remarkable change and undoubtedly the most interesting clause of the bill is the one which makes it possible for a debtor to file a notice of intention. Debtors more often than not do not think about submitting a proposal to their creditors when they are about to go bankrupt. We suggest that the debtor who is in trouble has neither the time nor the peace of mind needed to carefully work out a proposal likely to prove viable and acceptable to his creditors. That is why we have developed this concept of a notice of intention to file an arrangement. Under this clause, upon submission of a notice of intention to file an arrangement, there will be a 10-day stay of proceedings against the debtor, who will then have the respite he needs to draw up an arrangement at leisure. Another aspect of the commercial arrangements I should like to deal with is the new right which the courts enjoy to file a proposed arrangement where the debts of a corporation exceed one million dollars and where the proposed arrangement filed in respect of a debtor has not been accepted. As far as I know, the purpose of this clause is to do the utmost to save a corporation the folding of which could prove fatal to a community, a given area, a village or a town, if it is humanly possible to save it.
I admit that it is sometimes impossible and often economically undesirable to try to rehabilitate a corporation which is in trouble. Part V, I should say, deals with bankruptcy proper. I must say that we have seriously reconsidered the concept of bankruptcy, that we have maintained several elements which have proved useful in the past, but that we have brought about many changes. We are trying to set up a system which will be
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consistent, self-contained and suited to the needs of today. All bankruptcy proceedings will begin with the filing of a petition either by the debtor himself if the bankruptcy is voluntary (which will replace the current voluntary assignment) or by one or more creditors if the bankruptcy is not voluntary (which will replace the current petition for receiving order). In the case of voluntary bankruptcy, the debtor's insolvency is the sole condition. Where it is not voluntary, the existence of admissible debts of at least $1,000 will have to be established.
When the petition is filed, all proceedings against the debtor by ordinary creditors are stayed and when the bankruptcy order has been made by the court, the exercise of the rights of secured creditors against the property of the debtor subject to the security interest is deferred for a period which may extend up to 40 days from the date of the bankruptcy order, depending on the date of the first meeting of creditors. However, the secured creditor can take the required remedies to protect his security. I have already noted that the bill aims at simplifying proceedings for the consumer. Part V of the bill includes section 163 that spells out special provisions for small consumer bankruptcies which exclude several proceedings required in a business context, but which are completely useless or at least unproductive in the case of a consumer, without, 1 repeat, depriving the creditors of their right to control the administration of the bankruptcy.
I would now like to say a few words about the effects of a bankruptcy on the directors and the officers of a corporation under this bill. The first effect is to declare the bankrupt unable to be a director or an officer of a corporation. The second is to make the directors and officers personally responsible for the debts of the corporation if its unsolvency was caused or aggravated by them or if they have mingled the property of the corporation with their own. The third effect is to make the directors jointly and severally responsible to employees of the corporation for unpaid wages at the time of the bankruptcy up to a maximum of $2,000 per employee, except if they establish their good faith. Finally, this part of the bill deals with the setting aside and review of certains transfers, whether they are entered into by persons who are or who are not at arm's length. In this area, the bill extends the application of the present legislation and promotes the fairest possible distribution of the debtor's property.
The next part, or Part VI of the bill, contains provisions applicable to arrangements and bankruptcy. The only provision in this part of the bill that I want to emphasize is the one which determines the order of priority held by each creditor in the distribution of the amounts produced when the bankrupt estates are realized. Except for funds collected on its behalf by a bankrupt, the Crown will become an ordinary creditor and will take its place among the other creditors and be paid at the same rate. This will increase the dividend of ordinary creditors, and we hope that it will prompt them to become more closely interested in the administration of bankruptcies.
I would like to revert to an aspect I mentioned briefly when I dealt with Part VI and which concerns the treatment given to unpaid workers. The first bill introduced in 1975 contained a

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provision which granted absolute priority for unpaid wages on all the property of the bankrupt employer, including that subject to a security interest held by a secured creditor. This was an exceptional provision which went against the traditional rights of secured creditors, as of course several pointed out, and which, according to many, went too far and would not necessarily bring about the desired results. That is why it was suggested during the hearings of the Senate Committee on Banking, Trade and Commerce that the creation of a special fund to compensate wage earners for wage losses caused by the bankruptcy of their employer would provide a more effective, a more practical and even a fairer solution.
The provision creating the foremost priority of the wage earner was then removed from the second version of the bill introduced in March of 1978. The ministers who presented each successive version of this bill have all stated their intention to have the issue of the timeliness and the desirable provisions of such a special compensation fund considered. Unfortunately, up to very recently this has never been undertaken. Accordingly, in order to be able to choose the best way of protecting the worker at the lowest possible cost without interfering with the financing structures of private business, I have decided to set up an inquiry committee to consider all the aspects of the issue and to report to me as soon as possible. This committee is currently considering the matter. It is chaired by the Dean of the Faculty of Law of the University of Ottawa and its other members are Mr. George Hitchmen, Vice-President of the Bank of Nova-Scotia, Mr. Ronald Lang, Director of Research for the Canadian Labour Congress and Mr. Raymond Dufour, a former high official of the Ministry of Industry and Commerce of the province of Quebec.
This committee of four which is made up of supporters of practically all viewpoints will have to proceed with great dispatch and report to me on what should be the best procedure possible. They will be given the chance of thoroughly studying the advantages and disadvantages of creating a special fund as the Senate committee seemed to advocate. They will naturally have to study the impact of such a fund on the already existing policies and legislation in those provinces which are concerned by this issue. I therefore expect to get that report this summer, by the end of June or early July. Then I will naturally be in a position to deal with the issue of the protection to be given to salaried workers in bankruptcy cases, an issue which I know is of some concern to members on both sides of the House and which, I hope, will find a solution before this bill gets through the third reading stage.
I think that this bill ought to be referred to the committee very shortly so that consideration of its 420 clauses may be undertaken and some progress accomplished so that we may benefit from the findings of this committee before proceeding with its final stage. At any rate, I think that the committee members who will study the bill in detail, clause by clause, will want to call Dean Landry before the committee in order to hear his opinion, his suggestions, when we come to the clauses
dealing specifically with wage earners who are not paid in the event of a bankruptcy.
I have just skimmed through the bill. In conclusion, I would like to say this: Parts VII and VIII of the bill specify the rules to be followed when securities firms or insurance companies go bankrupt. They were developed in close co-operation with experts in that field, and we have retained all the suggestions, all the recommendations they made in order to improve the present bill. Part IX deals with receiverships. The bill does not intend to restrain unduly the exercise of the rights of a secured creditor or of a trustee, but in cases of insolvency, it aims at subjecting them to a minimum of requirements to ensure that the rights of subordinate creditors are protected.
The three last parts of the bill deal with offences, the courts and evidence, and the transitional period from one act to the other. Mr. Speaker, I have given a brief overview of a bill that I will admit is very technical, but also very important. It is an attempt to reconcile interests that are not only different but conflicting. It does so as fairly as possible in my view. It is the result of endless hours of consultations and discussions with people associated with bankruptcies. Although not perfect, I am convinced it is as perfect as can be in the circumstances.
I commend this bill to the co-operation and support of honourable members from both sides of the House, so it may pass second reading and be referred as soon as possible to a standing committee, where honourable members can examine every aspect of the legislation and make a more detailed study of its various provisions. It is my hope the opposition will resist the temptation to score political points with the bill. This is a legal matter and it should be treated as such. It is not an economic matter at all and should not be related to the current economic conditions, I am aware that it would be easy to try to link consideration of the Bankruptcy Act with today's economic problems, but I suggest to hon. members opposite that the Canadian economic situation will not be solved by the Bankruptcy Act or any amendments to it. What we have before us is not an economic matter but a legal matter and it is my hope that those who speak after me will keep this in mind, and will postpone their criticism of the government's economic performance until some other time.
I believe that bankruptcies are one of this century's evils that in some respects may result from inflation. This bill however will not solve the problems of inflation. Indeed, it has nothing to do with today's inflation. The updating of the Bankruptcy Act is desired, it is called for by all parties concerned with bankruptcy, the administration of bankruptcies and legal matters pertaining to bankruptcy because amendments have long been overdue. And Canadian Parliament finally has an opportunity to study the act in the House of Commons; it has been amply studied in the Senate, in the other place, but finally it is considered here in Parliament and it is my hope that the discussion will indeed deal with legal matters rather than endlessly delving upon economic considerations. We must act expeditiously to send the bill to the committee of the House, where it will be scrutinized clause by
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clause so that finally we may have a modern Bankruptcy Act in Canada as early as next summer, the summer of 1981.


Mr. Chris Speyer (Cambridge):: Mr. Speaker, at the outset of my remarks, I cannot help but comment that the persistently impoverished economic performance of this government should compel us all to act promptly with respect to this prospective legislation, as a record number of Canadian businesses and individuals within the next few weeks or months will be seeking the relief contained in this bill.
The bill before us today is, in fact, a culmination of more than 15 years of hard work with respect to our insolvency laws. It is necessary that we modernize commercial practices in terms of bankruptcy legislation. We must balance the priority of creditors. It is important that we streamline the administration of insolvency and bankruptcy legislation. It is important, also, that we correct the defects that exist in the present legislation.
The bill before us today has many excellent features and they are welcomed. Unfortunately, there still exist important aspects of the legislation which are totally unsatisfactory, such as the priority given to wage earners in a bankrupt estate and which must be rectified. I will have further comments with respect to this later in my remarks.
Bankruptcy is but one aspect of business failure. In addition, many companies that cannot meet their liabilities as they come due are put into receivership by their creditors. Still other companies exist as living corpses, unable to survive and they have to close their doors. I believe that it is important to recognize that in a free market economy there will always be failure; the weak and the inefficient will be weeded out.
What is of concern to me and to other members on this side of the House are the unnecessary business failures caused by the inept and ruinous economic policies of this government which crush the spirit of small businessmen, farmers and others who have a sense of commercial enterprise. I am not talking about the failures caused by management shortcomings or by overexpansion of a business or by fraud within a company; I am talking about the failures caused by high interest rates. In terms of today's rates, we formerly thought of these as being extortionary or unconscionable. I am talking about the inability of this government to create an economic environment which is conducive to investment and to commercial risk.
On the one hand, we have a Minister of Finance (Mr. MacEachen) who tells the people of Canada that high interest rates are necessary in order to dampen consumer spending, while on the other hand his government has been the most profligate of all, consistently running up deficits, the accumulation of which has been the major source of inflationary difficulties in this country.
I think the Minister of Finance should make it clear to the people of Canada, while he tells them to curtail their consumer
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spending habits, that this government has borrowed money on their behalf. We now have a gross national debt of $122 billion, of which each taxpayer's share is $13,700. If countries were run like companies and if individuals managed their finances in this way, you could bet your bottom dollar that this government would have been petitioned into bankruptcy a long time ago.
In my view, one of the problems with the economy is that we have a Prime Minister (Mr. Trudeau) and a Minister of Finance neither of whom have any expertise in, or concept of, what it means to take a commercial risk. Neither has a tittle of personal knowledge of what it means to borrow in order to create and build a company or to take a mortgage in order to purchase a home. They have not chosen to build a business or had to mortgage a home, so it is small wonder that they are impervious to the anxieties of those who are on the edge of business failure caused by high interest rates, or to the frustration and concern of the man and wife who have to walk away from their home because they cannot afford to pay the interest on their mortgage, which has soared from 9 per cent or 10 per cent to 18 per cent in recent months.
Consumer and commercial bankruptcies are on the rise and, as and when this incredibly high interest rate is further absorbed into the economy within the next few months, we will see a toll of failures and tragedies such as we have not witnessed since the days of the depression.
Attitudes toward bankruptcies have changed dramatically in the last two decades, as is demonstrated by the record rate of increase in bankruptcies between 1960 and 1980. They have increased by a whopping 758 per cent. I wish to say more about the actual number of personal and commercial bankruptcies in a few moments, Mr. Speaker.
The point I want to make now is that the economic and social stigma formerly attached to bankruptcy has all but vanished. Formerly the disgrace of bankruptcy, more than the legal sanctions, kept many people from declaring bankruptcy. It is not only individual or consumer attitudes which have changed with respect to matters of insolvency; the credit system in particular, the explosive use of consumer credit in the past 20 years, has made possible the immediate purchase of goods through the instalment payment plan. By contrast, in 1960 the average consumer debt of every, man, woman and child was $224; in 1980 it stands at $1,532 per capita. The relaxation by government of laws insisting on minimum amounts of down payment and restricting the period of time over which the debt could be financed have contributed to this phenomenon.
It is also important to have a proper appreciation of how commercial lending habits have changed significantly during the past 15 years. Formerly, when a businessman went to a bank for the purpose of starting a business, as security for the debt the bank would take an assignment of the accounts receivable and a pledge with respect to the inventory of the business pursuant to Section 88 of the Bank Act. It was only when default occurred on the loan that the bank was permitted by law to require further security. In many instances the

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debtor would be unwilling to pledge, for example, his machinery or his land.
As a result of the amendments to the Bank Act in the mid-sixties, banks are now permitted to take as security floating charge debentures which effectively form a charge on all the assets of a person's business. The commercial institutions own the debtor lock, stock and barrel. The real change is that when the banks call a loan and realize upon their security, they send in a receiver pursuant to the provisions of the debenture. Although the banks still take Section 88 security, common practice is that they realize under the terms of the debenture. That is an important point.
This has two practical effects. First, under the Section 88 security, banks are compelled by law to pay the wages of those who earned the wages. Under the floating charge debenture, there is no such obligation. Though it is the normal practice of banks to pay wages as a matter of policy, there are in some circumstances mutterings by persons who hold second or third charges behind the banks that the banks are spending their money.
The second consequence of the banks or other lenders realizing upon their security is that there is virtually no control over the duties and rights of the receiver. In a bankruptcy, a secured creditor is virtually untouched with respect to his legal rights. Although there is presently in the existing legislation the power of a trustee to request a stay of proceedings and the right to inspect goods, practice has demonstrated that the legislation is woefully inadequate in protecting the rights of both unsecured creditors and the debtor himself.
One of the most important aspects, in my view, of the bill is the provision delaying the ability of the secured creditor from realizing upon his security for a period of from ten to 40 days, depending upon the circumstances, so as to give the trustee an opportunity to inspect the goods, ascertain their value and decide whether or not he wishes to redeem the debt. What this prevents is receivers selling the security for bargain basement prices without some type of accounting to the unsecured creditor. The new bill further provides for the trustee to make a summary application as to the fees and disbursements of the receiver. This gives the trustee some practical control over the exorbitant charges that can be and are made in some circumstances. These provisions are important and are welcomed.
On the other hand, the treatment of wage earners in circumstances of a bankruptcy remains, under this bill, virtually unchanged. The wage earner is still a preferred creditor and ranks behind secured creditors and the cost involved in paying a trustee to administer a bankrupt estate. I am aware that under the proposed legislation a wage earner is now eligible to collect, if he can, a maximum of $2,000 instead of $500, and I am also cognizant of his ability potentially to collect up to $500 in pension contributions. Furthermore, there exists the right to sue directors for back wages. However, in my view, his position is inadequately protected. The history of the Bankruptcy Act has always been weighted in favour of the secured creditor. I believe that a much higher priority must be given to the man or woman who has earned wages at the time that insolvency occurs.
The minister will argue that the right to sue a director for wages is an important new right, but I point out to the minister that similar and even more onerous provisions already exist both in the Canada Business Corporations Act and most provincial business corporations acts. The point is that they are very rarely used. When the doors of a business are shut as a result of either receivership or bankruptcy, an employee wants and needs his wages then. He does not want to engage in costly litigation over a protracted period of time and where the chance of success is problematical, to put it at its highest standard.
Another method which is presently being considered and which has been under active consideration is the notion of establishing a wage earners protection act whereby both the employer and employee might contribute to the bankruptcy fund held by the government. I must say that I reject this method on a number of grounds. First, I am frightened by the prospect of the cost and the administration which would be necessary to make such a scheme viable. Second, it is foreign to me to imagine an employee contributing from his weekly or bi-weekly pay cheque to insure himself against the potential bankruptcy of his employer. I do not want to see any further creation of another layer of bureaucracy to administer such an insurance scheme.
Finally, what we could do is to give a real priority to the wage earner over the rights of the secured creditor. I know it will be argued that by doing so the banks will increase the cost of borrowing to the small businessman, and there is a fear, in some circumstances, that banks may not ever advance the money at all. However, I remind members that in every province west of the Ontario border there exists today a super priority legislation to protect the wage earner over the secured creditor. I do not believe that the cost of loans has been significantly affected in the western provinces. I believe the appropriate method is to take the suggestion of the Canadian Institute of Chartered Accountants that such wages be paid out of current assets of an insolvent estate not out of the machinery or land. Banks and commercial lenders have had the law weighted in their favour too long. Now is the time, in my view, to provide increased fairness to the wage earner specifically, and to unsecured creditors generally.
I want to direct some remarks to the new area called consumer arrangement. The bill contains provisions for the establishment of a government administrator whereby an individual whose liabilities are not in excess of $20,000 can make a proposal to creditors. This is a method designed to permit a debtor to pay a portion of his liabilities without going bankrupt, at the same time ensuring that his creditors receive more than they would under a bankruptcy.
There are some attractive features to this concept. There is no need to hire a private trustee. There are streamlining provisions to do away with mandatory meetings with creditors and there are further provisions for bankruptcy in the event of a three-month default in the payment of moneys called for
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under the arrangement. The intention is good because the cost of bankruptcy has long been a serious concern to all of us in the House.
However, I suspect that when these provisions become well known and are publicized there will be an enormous flood of applications seeking this type of relief. The question which 1 pose to the minister today is whether or not there have been effective consultations with the provinces to administer such a scheme. My information, certainly as it relates to my province, is that there has been no agreement between this government and the province. More importantly, if my suspicion is correct, what is the cost going to be to administer such a scheme?
All of us in the House hope that this bill will reduce the cost of legal fees and administration fees in commercial bankruptcies. As it exists, trustees will not move in areas which are legally unknown; they seek the opinion of a solicitor or the advice of a court. But this need for their own protection, for legal opinions or the views of the court eats into the moneys that might be available to the unsecured creditor. One of the problems of the present act under which we now operate is that it is silent in so many areas. This new bill, with all of its 424 clauses, at least simplifies and gives direction to both trustees and claimants alike.
I am pleased to see the streamlining of administration which again avoids costs. For example, the provision that a discharge is automatic after six months, save where a caveat might be filed by an administrator, is an excellent feature of this bill. The legal costs of making a formal application for discharge, which is almost automatically granted except in circumstances of fraud, are thereby avoided.
1 must say that since 1967 most of the major insolvencies are not by way of bankruptcy, they are by way of receivership. Therefore, I am glad to see that under the new bill some statistics will be kept with respect to the number of business failures. It is important to understand that in all cases the superintendent of bankruptcy does not have the power to compile statistics with respect to receiverships. In view of the fact that most major insolvencies, such as Atlantic Acceptance and the Come-by-Chance insolvency in Newfoundland, are by way of receivership, it is important that we know how many business failures exist. I welcome the feature that statistics in this regard will be kept by the minister's office.


Mr. Ray Skelly (Comox-Powell River):: Mr. Speaker, the bankruptcy bill before us, as the minister has outlined, has had a very long history in this House. His presentation today indicated that this legislation was largely a housekeeping measure of putting a bill in place which had been under consideration for some long period of time and that it is really an amalgamation of old legislation and hopefully new procedures. The minister was very careful in his admonition to the opposition not to make this bill political or relate politics to this legislation. However, I submit that the situation with bankruptcy is political. There are other ways to examine this bill and maybe the issue of politics or making a decision by a group of people in public is the proper way to examine it.
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There are two sides to this bill. The first side is housekeeping. My colleague who preceded me did an excellent job of pointing out certain strengths and weaknesses in this technical piece of legislation. The second side is important because it concerns the victims of bankruptcy.
I listened to the minister answer a question in the House today concerning the long-term causes of bankruptcy. He said that food in Canada, although extremely expensive and people are having difficulty coping, is much cheaper than in other places in the world where such things as starvation and infant mortality reign free. But the question is, how do the policies which this government is putting forward impinge on this legislation? I suggest that in bringing this bill forward at this point in time the minister and the government have their priorities crossed. For a long time this House has been asking for something that will deal with the causes of bankruptcy. We should not be doing an autopsy after the fact. The hon. member who preceded me and the other opposition party have pointed that out already.
This bill should probably be withdrawn immediately and the government should be dealing with the causes of bankruptcy. What we have before us is a piece of legislation which will deal with a situation which is largely being created by the Minister of Finance (Mr. MacEachen) and the government, as the hon. member who preceded me has already pointed out. The Minister of Finance put forward to us an economic scenario showing the number of people who are suffering as a result of the economic situation. I want to delve into this for just a moment. It is a Catch-22 situation. The minister said the government recognized that interest rates are causing hardship and great difficulty but that the long-term benefit of high interest rates would be to bring down prices. However, they certainly are not doing that. Prices in this country are not coming down. The cost of goods and credit is being driven up higher and higher. The Catch-22 which the Minister of Finance set up was essentially put up for the Minister of Consumer and Corporate Affairs (Mr. Ouellet) in this bill. The high interest rate policy and the economic policies of this government will not bring down prices; they will increase prices and will continue to increase bankruptcies. It is amazing what this kind of logic creates. You can go back to the Irish potato famine which was a product of this kind of logic. I suggest to the minister we are not playing politics in this situation; we are asking for some basic common sense.
The government perceives this bill as a priority. It is not a priority; it is the conditions which create bankruptcies which are a priority of this House and the Canadian people. I suggest it is the government that is creating the bankruptcies. They should be looking at an economic policy which will prevent them, rather than put this legislation before the House at this time in an attempt to deal with the victims of bankruptcy.
There is one other aspect. Before we begin to look at a piece of bankruptcy legislation and resolve the problems for those involved, this government should be developing an interest rate

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policy more in keeping with the needs of the people of this country. If the minister had any sense of priority about what is important in our economy-and Lord knows who made the decision to throw him into the breach and spend time on this bill-he would be bringing forward the competition legislation which has been promised since time immemorial. When the first competition bill came out in 1971, there was a commitment that we would deal with it in the spring. Now we are waiting for the fall and we will wait on and on.
One of the key problems in bankruptcies is the amount of corporate concentration in Canada. How does a small businessman compete against corporate supply control, market control and various other controls? We know the names of the individuals involved.
The hon. member who preceded me spoke about the increasing number of bankruptcies. This is because we have lost the environment for small business, with individuals being able to function in a free economy. This government has created a situation where there is a lack of competition. More and more businesses are being forced into receivership and bankruptcy. They are closing their doors and saying they cannot compete against the Thomsons and Southams and the kinds of corporate control we have in this economy. If the minister had any real sense of priority, instead of the Bankruptcy Act we would be dealing with competition legislation today.
The Bankruptcy Act is an important piece of legislation. It cleans up a lot of problems and expedites bankruptcy procedure. I wonder whether we are trying to deal with a principle or a priority?
With regard to the question of rising interest rates, it was mentioned in the House today that last year 14,000 people gave up their homes. Will there be another 14,000 giving up their homes this year because they have run into great difficulty? The minister should be dealing with the exorbitant credit charges which are causing bankruptcies. People are literally shutting down because this economy has put them under.
It is strange that the minister would today ask us not to play politics with this legislation considering the delays and sheer incompetence of this government in dealing with the real problems facing Canadians today. Those are the problems we should be dealing with. I would like the minister to explain to us why we have this bankruptcy legislation before us today. In our opinion, this bill is not a priority. Great relief would be expressed if the minister would withdraw this bill and submit legislation or policies to deal effectively with the problems facing Canadians today.
I next want to deal with the prevention of bankruptcies. Nowhere in the bill is the question of prevention of bankruptcies dealt with. In 1960 there were 1,000 personal bankruptcies. In 1980 there were 21,025. That does not include all the people teetering on the edge, those people who will go down when the interest rate goes up on Thursday as a result of following the American plan.
The number of bankruptcies is increasing dramatically. In 1980, 6,600 Canadian businesses folded up because of bankruptcy. That figure does not include receiverships and all the
rest. They left behind debts totalling roughly $1.2 billion. Price Waterhouse estimated that the loss to Canadians last year was between $5 billion and $10 billion. Neither the policies developed by the Canadian government nor the provisions in this bill deal with the whole question of prevention. There is a serious lack of logic in that approach.
It may be worth while to move on to another question and deal with some of the main problems. One of our most serious concerns is the matter of workers' wages. Possibly this legislation was put before us to fill an embarrassing gap in time rather than deal with something more productive. The Prime Minister (Mr. Trudeau) has left, the Minister of Finance has left, and the Minister of Consumer and Corporate Affairs is left holding the bag, so he threw in this piece of bankruptcy legislation.
I wonder why the minister brought this bill forward before it was rounded out and developed. The committee studying workers' wages has not even prepared an interim report. It is an ongoing committee. How can the minister place this legislation before the House when it does not even address the wages, benefits and pensions of workers? How can he bring the bill forward for second reading without dealing with that question? The government assumes they will have an interim report by this summer. The summer is virtually upon us. I suspect we will be looking at a recommendation in the fall.
Why are we dealing with this bill before that important point has been resolved? With the nature of the economy and the continuing high number of bankruptcies, Canadian workers will be put in a tremendously difficult situation. Before bringing forward this bill, the minister should have had something to offer the people of Canada in the form of protection. The responsibility for the increase in bankruptcies will be laid directly at the doorstep of the government. Increased bankruptcies will come about as a direct result of the government's high interest rate policies and the fact that the government has failed to bring forward competition legislation. This country does not have an industrial strategy which emphasizes support for Canadians. Because of that, Canadian workers and businesses will end up holding the bag.
1 suggest to the minister that, rather than finish this exercise on Wednesday, he hold off to see what further developments there will be. Possibly the minister could bring forward meaningful suggestions to the House of Commons about how we could deal with the question of bankruptcy, or he could urge his cabinet colleagues to do that. He could await the report of the committee which is studying the whole question of the priority of workers' wages.
Last week in the House we had a substantial debate on economic affairs in which the policies of the government were soundly criticized. The Minister of Finance, the Minister of Consumer and Corporate Affairs and all hon. members opposite support programs leading to bankruptcies and weaknesses in the Canadian economy, yet on Friday the Prime Minister of Canada said at his press conference that in reality he did not
May 19, 1981

think the high interest rate program is working. As a matter of fact, it appears that the government is not really committed to dealing with the problem of people going bankrupt or the problems of the workers affected. How did we get into this position in the first place? Is the Prime Minister putting us on again as he did in 1975 with respect to the AIB? For three years the country was in absolute chaos, and then the Prime Minister finally came forward and said, "Sorry, friends, it was a good try, but it is not really working," and everyone said, "We told you so."
The economic policies of the government today are creating a large number of bankruptcies. If this bill ever goes through, it will be relied on to a very large extent. Even the Prime Minister thinks his high interest rate policy is not working. When will we give up and change the situation? When we will begin to adopt proper priorities in this House? When will we look to the prevention of bankruptcy and the protection of people who suffer most from it? I refer to families and working people whose wages, pensions and benefits accumulated over time and from long service are lost. Those services to companies and also to this country are rewarded by this government's leaving those people out to dry.
Another thing about which people have written is the ease of bankruptcy. Let us consider the plight of small credit unions when several people in a small community go bankrupt. Let us use the example of the community of Alert Bay. The big banks left there in a hurry because they could see what was happening during the fishing season, largely because of bad government management. Fishing activity was down and people's incomes were down. When several people go bankrupt, the only ones willing to serve communities financially are small credit unions. When people go bankrupt and leave debts and when there is no hope of returning the money to the community, credit unions suffer tremendously. They are not in the position of many of the larger institutions. On one day a fishing boat can be taken for collateral, but because of the market, the fishing industry and the way the government handles matters, the value of that boat can drop to virtually nothing the next day. Small credit unions are very seriously concerned about the ease with which people can go bankrupt. They are concerned about the loss of the funds they lend in good faith.
There is one other matter which concerns me. I have asked the minister about what he is doing to control credit. When people go into the Sears store, they are not asked to pay cash; people are encouraged to use credit. Gas companies and retail stores encourage people to use credit rather than pay cash or restrain purchases. Tremendous pressure is placed on people. People are being overburdened with charge cards, yet interest rates are jacked up from 18 per cent to 21 per cent and then to 24 per cent. This encouragement to use credit still goes on. It almost becomes a way of life.
The minister is not interested in controlling credit and exorbitant gouging which persistently goes along with it, to the point where people go under. They go bankrupt. The minister and the government appear to want to control credit by means
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of bankruptcy. If people can declare personal bankruptcy easily and speedily, that will affect the economy and will not restrain the desire for credit. I submit that that is probably the wrong way to proceed. What we should really be doing is finding means of prevention, getting our priorities straight and looking seriously at controlling the tremendous blossoming of credit. According to the figures used by my colleague previously, over the last decade and a half the amount of debt has grown from roughly $200 to $1,500 per family. The amount of debt carried is enormous, and as high interest rates continue and as more people renew mortgages at these high rates, this will put many people under.
I know speakers from the prairies will deal with the small business proposals, but we nevertheless must protect small businesses from bankruptcy. We must deal with prevention. Not too long ago a group of farmers in Saskatchewan purchased some equipment in good faith from a dealer. When the dealer went broke, it was discovered that the farmers did not make their payments to the appropriate party. The farmers either had to pay twice for their equipment, turn the equipment back or, in some cases, close their doors and quit farming. That was a very serious situation. Small businesses will have to be protected from a government which seems determined that the easiest way to control inflation is by placing an enormous burden on Canadians and Canadian businesses.
There are three main areas of concern with respect to this legislation. One is the protection of employees' wages. If the minister had waited for that provision, the anxiety of many of us with respect to this bill might have been eased. This bill might have had a chance of going to the committee fairly soon. If the minister had dealt with the question of the ease of bankruptcy and its effect on small communities and if he had dealt with other subsidiary problems communities have, then perhaps the bill could have gone to the committee sooner. If some attention had been given to the question of protecting small businesses from government policies, perhaps the bill could have gone to the committee much more rapidly.
I suggest, in summary, that putting this bill before us today was a political decision of the government. It was a callous, calculated decision of the government. Hon. members opposite did not want to talk about the matters which were raised last week in this House. Those matters are of serious concern to Canadians who live out there in the real world. This government has talked about the Constitution and anything but the real, gut issues affecting the people. The government has avoided dealing with the prospect that more bankruptcies will occur this year. I suggest that the bringing forward of this bill was a calculated, political manoeuvre in order to avoid dealing with the issues that are important to us. This bill is premature and ill-conceived.
The second priority should be the prevention of bankruptcies. An enormous number of people will have to renew their mortgages this year. Instead of renewing at 10Vt per cent, they will be renewing at 18 per cent, or perhaps 19 per cent or 20 per cent, who knows? Certainly the government does not know.

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What will that do with respect to personal bankruptcy? Small businessmen are now trying to operate at interest rates of 19 per cent and 20 per cent on their revolving credit. What will that do with respect to summer employment? We have a very serious problem. The priority should be prevention of bankruptcies, and we should be dealing with the key problems.
Other people will be speaking about this in the Elouse today, tomorrow and the following days while this bill is before us for discussion and about other bills we may be considering while the government fills the gap before talking about the real issues.
1 see that my time has almost expired, Mr. Speaker, so 1 will allow someone else to speak at this point.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, I thought the Parliamentary Secretary to the Minister of Finance (Mr. Evans) was going to give us his words of wisdom at this point.


John Leslie Evans: You could certainly use them.


Harvie Andre: I share the feelings of the hon. member of the New Democratic Party who expressed surprise and anger at the bringing forward of Bill C-12 at this particular time, given the state of the economy in Canada. I differ with the hon. member, however, when he suggests that the government should withdraw it. Goodness knows, if they are not going to do anything about the deplorable economic situation these incredible interest rates are going to cause, then perhaps doing something to cushion the fall for those victims of the system is marginally better than doing nothing. In fact, Mr. Speaker, the timing of this particular bill is almost a cruel joke.
Last Thursday many of us here were visited by about 125 businessmen from the energy service industries of Alberta and Saskatchewan who came to Ottawa to try and explain to the government and members of Parliament the difficulties they were having maintaining and sustaining their companies in view of the impact of the National Energy Program. The feeling among the 125 different companies represented in this delegation was that if this program is not amended drastically within six months, 50 per cent of them would be out of business. Within a year, 75 per cent would be out of business and perhaps bankrupt as a result of this government's energy policy.
So what we have, Mr. Speaker, is some very concerned Canadian businessmen, in most cases proprietors of their own firms, small and medium-size firms in the energy service industry, coming to Ottawa and saying: "Look, stop what you are doing, you are driving me into bankruptcy; I have to lay off employees now". On average, those firms had already laid off 25 per cent of their employees. They said: "Unless you do something, unless you straighten out your act in regard to energy policy, we will be out of business and bankrupt in six months". The response of the government is to bring in amendments to the Bankruptcy Act to make it easier for them
to go bankrupt, rather than looking at the root of the problem. Indeed, in today's question period the Parliamentary Secretary to the Minister of Energy, Mines and Resources (Mr. MacLaren) still denied the problem exists, which is the most insane form of myopia that we have seen from this government for some time.
According to a document issued by the Department of Consumer and Corporate Affairs, the background paper on the bankruptcy and insolvency bill, during the 1970s the number of bankruptcies in Canada, essentially static, commercial bankruptcies, was around 5,000 a year. This represented the number of companies which, perhaps for reasons of poor management or too fast growth, or perhaps due to circumstances beyond their control, went out of business.
In the last three years that situation has changed dramatically. In 1980, for example, there were 6,595 commercial bankruptcies, up 17 per cent over the 5,600 in 1979. In the first quarter of 1981 bankruptcies are up 20 per cent over the comparable period in 1980. This is tremendous growth. Indeed, the only thing growing in the economy today seems to be the jobs of accountants and lawyers specializing in bankruptcies; they experienced a 17 per cent growth last year and 20 per cent so far this year, and we have seen nothing yet compared to what is coming unless something dramatic is done, and done very soon, about interest rates.
Clearly the number of commercial bankruptcies this year will be well in excess of 8,000, more likely 10,000, and yet as the spokesman for the New Democratic Party pointed out the reaction of the government is to say to the people, as the Prime Minister (Mr. Trudeau) said the other day: "But you are way better off; you are 50 per cent better off than you were ten years ago." Now, 1 am sure that is a lot of comfort to the 8,000 or 10,000 businesses that will be going bankrupt this year, not to mention the employees who will lose their jobs as a result and the creditors who will not receive the money owed them. In fact, the only ones who will be cheering are lawyers and accountants specializing in bankruptcy.
As an aside, Mr. Speaker, I would like to see some political scientist do an estimate of the impact of our activities in this House, because I figured out that I spend about 50 per cent of my time here making work for lawyers and accountants. I sure wish we could change that a little bit and perhaps spend some part of our time creating opportunities for Canadians, making life better for them rather than making work for lawyers and accountants.


Some hon. Members:: Hear, hear!


Harvie Andre: Mr. Speaker, the human costs of bankruptcy are incalculable. As my colleague the hon. member for Cambridge (Mr. Speyer) pointed out, there is no question there has been attitudinal changes occurring in our society over the last few years whereby the stigma attached to bankruptcy perhaps is not what it used to be. We no longer have debtors prisons. Nonetheless, the stigma is still there and it affects those who should least be affected.
May 19, 1981

Granted, because of changes in our society there are people who in the normal course of conducting their personal affairs are not perhaps as prudent as we might like, or as may have been the case in days gone by; but the thought of going bankrupt is not greatly feared, and many people do indeed declare bankruptcy on a personal basis without losing a great deal of sleep over it and seem to start up again. However, to the prudent and responsible kind of person we would probably describe as the backbone of our country, bankruptcy represents a horrendous personal defeat. In many cases it represents loss of self-confidence and self-esteem, the costs of which are incalculable. It leads to family break up, in some cases to suicide and to all kinds of tragic human loss. As a nation we certainly cannot afford the loss of jobs and potential growth that will result from these commercial bankruptcies.
In addition, in the first quarter of this year there have been 75 farm bankruptcies. The cost of that to the country is inestimable. It is certainly tragic to have a government come forward and say: "Well, what we really have to do, people, is take a look at this Bankruptcy Act; we have to streamline it after 15 years. Do not worry, the question of the economy, of interest rates and business activity is not something we should discuss right now; we can do it another time." Well, we wonder when that other time will be, Mr. Speaker. We wonder when we will get some action out of the government with regard to the economy, and we wonder when the question of the causes of bankruptcy will be addressed in the way it should be.
I should emphasize, Mr. Speaker, that when I talk about bankruptcies I mean formal bankruptcies, not the insolvency that comes as a result of receivership which ends up leaving a financial corpse at the end. As the hon. member for Cambridge pointed out, the vast majority of business insolvencies is through receiverships, not bankruptcies, as a result primarily of the banks and other financial institutions imposing receiverships upon commercial enterprises through floating charge debentures which are now a standard part of the banking business. I will have a little more to say about that later, but in looking back I think the Parliament of Canada made a tragic mistake in its amendment of the Bank Act which allowed the banks to employ floating charge debentures as a method of financing business enterprises. The abuse in that area has been tremendous. While there are some steps in the proposed legislation to prevent perhaps some of the abuses which have occurred, I do not think they go far enough. In any case, we will want to examine that matter very closely at committee stage.
I read with interest the background paper on the bankruptcy and insolvency bill prepared by the Department of Consumer and Corporate Affairs. I noticed that the process started in 1966 with an internal study committee which perhaps put forward most of the proposals which are now incorporated in this bill, although they have been augmented and amended as a result of various studies of its earlier manifestations as Senate bills.
Bankruptcy
The study committee made one recommendation which was not accepted by the government, that is, the recommendation that the private sector trustees be replaced with public sector ones. 1 find myself in a bit of a quandary, not being a great fan or believer in the efficiency or effectiveness of government as opposed to that of the private sector in conducting business. I am concerned about the use of private sector trustees because there is very little incentive for efficient, effective and speedy performance by public trustees, whether in bankruptcy or in receivership. Private sector trustees are in the business of providing a service. They get paid when they provide the service. In most commercial cases the trustee is, in fact, a corporation which employs professionals such as lawyers and accountants for whom a per diem or a fee of anywhere from $75 to $200 an hour is necessary.


An hon. Member:: To make it last.


Harvie Andre: Consequently, when they are assigned as trustees of an enterprise or an estate with significant resources, there is all the incentive in the world to make it last, as my colleague points out. There is an incentive to keep it going and to justify the $200 per hour fee for lawyers and accountants; it is a very lucrative business. I do not see any incentive in the proposed legislation for the trustees to do anything else but to sit there and collect fees. Ultimately the estate or enterprise is bled dry and runs out of resources, in which case there is no longer anyone to pay the fees and it is wound up very quickly. It is regrettable that we do not have firm data on this, but from the talk one hears from people on the street and those visiting constituency offices who have been victims of such situations, one gets the impression that many trusteeship situations are wound up precisely at the time the last dollar has gone.
In many situations, a speedy and efficient transaction of business at the initial stages of the insolvency could have resulted in there being left a viable entity, albeit diminished, to carry on business. It almost never happens, once a trustee becomes involved, that after a few weeks or months there is an ending of the trusteeship or receivership in a manner which leaves in place a viable, ongoing enterprise.
In the case of formal bankruptcy trusteeships, there is the provision of the supervisor of bankruptcy of the bankruptcy branch of the Department of Consumer and Corporate Affairs. Also there is a licensing provision in regard to trustees. Presumably the supervisor can weed out incompetent trustees or keep an eye on their behaviour. At least he could listen to complaints and perhaps do something about them. As I pointed out, from the things I hear on the street it does not happen very often.
In the case of a receivership where a bank moves in by virtue of its floating charge debentures to seize the operations of a commercial enterprise, the incentive to ensure there is not a nickel left is overwhelming. The only recourse of the estate or a debtor for inefficient, ineffective or for that matter illegal or immoral behaviour, is through the civil courts by launching an action. Therefore, once a receiver gets his hands on an

May 19, 1981
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estate on behalf of a bank, it is in the interests of the bank and the receiver to ensure that nothing is left in order to provide the resources for launching a civil suit against the bank or the receiver by the proprietors, directors, owners or whoever had an interest in the estate.
I am not suggesting that this is the way it always happens or that every bank or receiver has that motive in mind, but I am suggesting that this is the incentive which is provided in the current situation. 1 think it is bad law to have a situation which provides such an incentive. Instead, we should be looking at law which provides an incentive for a receiver or trustee to be as efficient and effective as possible, to recover for the creditor the moneys owed as quickly and painlessly as possible, and to leave in place as much of the assets as possible for other creditors or perhaps to maintain an ongoing entity.
It is unfortunate that we do not have hard evidence in this regard, but I can relate at least one anecdote of a fellow who came into my constituency office to complain. The man was in the seismic business. He had a very substantial seismic operation, including offshore seismic equipment and a ship. He employed 30 or 40 people. He owed the bank a certain amount of money, as does anyone who is in business or in current operation. The bank had the loan secured under a floating charge debenture. In this case, again as a result of government policy changes, he had some contracts cancelled very quickly which left him in a liquidity crunch. The assets of his company exceeded his liabilities by a substantial amount, but the assets were tied up in a ship and in high-priced seismic equipment. He told me the banks demanded payment on a Friday. Obviously, on a Friday afternoon he could not raise any funds and later that afternoon he was in receivership. Within the month his equipment had been sold at fire sale prices. The bank recovered the funds owed to it and he was out of business. He saw his life's work and several million dollars blown out from beneath him. The purchaser of the equipment and the boat did very well, but that was of small comfort to my constituent.
I do not know whether this story typifies what happens to others, but according to the Canadian Federation of Independent Business this kind of situation happens more often than they would like to see. Apparently the federation's membership has experienced similar circumstances to the ones outlined by my constituent. I understand the federation is conducting a study of bankruptcies, and perhaps representatives of that organization will be appearing before the committee to offer their advice.
In any case, this legislation is welcome. As a result of it data will be collected on the different kinds of insolvencies so that we will know what costs are involved. We need to examine ways in which we can provide an incentive to trustees or receivers to act with some dispatch. Public declarations of the fees collected and declarations of the transactions involved in terms of the disposal of assets are two incentives which come to mind. Perhaps more cases should be allowed to go to
arbitration. As matters stand now, the receiver really becomes God when he walks into a commercial establishment. Perhaps there should be a check on the receiver's behaviour by the creditors, the proprietors or the management with the possibility of some sort of arbitration to resolve matters, rather than the trustee or receiver having the last word at every stage. I do not know the answers, Mr. Speaker, but I do think there is a problem here which should be addressed. Complaints have been too widespread to dismiss them as lacking any substance.
I commend the proposed legislation in regard to its emphasis on the ability of a debtor to make arrangements, whether it is a consumer debtor or a commercial debtor. Without having any hard facts before me, it strikes me that the Americans, through their chapter 11, as they call it-which is basically a reorganization similar to the arrangement proposed in this legislation-seem to avoid major commercial bankruptcies in a way that heretofore we have not done. It seems to me that if the banks and financial intermediaries would agree to arrangements, as opposed to receivership, we would see fewer devastating ends to commercial enterprises, something which is becoming all too common.
We have been treated to several news programs on television of late showing that banks send trucks on to farms early in the morning to haul off the livestock to slaughtering plants. They have sold breeding stock for bacon at prices from ten to 50 times lower than its real value. Hopefully this kind of behaviour, which is permitted under the current legislation, will be curtailed through the use of the measure before us. The arrangements under the legislation before us will ensure that the banks get their money back, but it will also ensure that the debtor is not punished unduly.
The provisions in the proposed legislation vis-a-vis wages of employees is welcomed, although, as my hon. friend pointed out, we might well wish to strengthen this provision in committee. We believe that people who have earned salaries should not be placed in secondary positions to banks and financial institutions or, for that matter, other creditors.
In conclusion, I must say again that I am constantly amazed by the crust, if you will, of this government in choosing to bring in an amendment to the Bankruptcy Act, at a time when we have record high interest rates which are almost unfathomable in terms of size, at a time when businessmen are wondering how in blazes they will be able to pay the interest on their debts at 20 to 24 per cent-these MacEachen rates are astronomical-at a time when bankruptcies in the first quarter of this year have increased 20 per cent over last year, when farming bankruptcies have increased by 73 per cent in the first quarter of this year as compared to the same period last year, at a time when Canadians fear for their economic future.
I must admit that the gall of this government is something to behold. There seems to be no limit to its arrogance or its crust. The feeling seems to be that it is the natural governing party, that it knows what is best and that the rest of us should keep our peace. We are being told that we are better off than we were ten years ago and that farmers are doing better now
May 19, 1981

than they were before. According to the Prime Minister, everything is hunky-dory and the government will set its own priorities. Never mind that you cannot afford to renew the mortgage on your house, never mind that the bank has just seized your farm, never mind that the company you work for may go bankrupt; never mind all these things, we are just to follow the government's agenda because it knows best. 1 do not think it does.
As long as the government House leader sets the agenda in this House we have no choice but to debate what he puts before us, and we will continue to debate the government's priorities. We hope that this legislation will not be unduly held up. It is an improvement to the existing legislation, and it can be further improved. The government can be sure that it will receive co-operation from this party in order to make it a better measure for all Canadians.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order, please. 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 Saskatoon West (Mr. Hnatyshyn)-Canada Development Corporation-(a) Plans for future role, (b) Chairmanship of Board of Directors; the hon. member for Peterborough (Mr. Domm)-Metric Conversion-(a) Minister's responsibilities to small business, (b) Request for repeal of enforcement order; the hon. member for Kamloops-Shuswap (Mr. Riis)-Energy Conservation-(a) Abuse of Canadian home insulation program, (b) Involvement of local organizations in certification process.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Ouellet that Bill C-12, respecting bankruptcy and insolvency, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Bankruptcy
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, we are finally getting a new bill respecting bankruptcy. I know that this has been a subject of discussion for several years. I have been sitting in this House for 25 years and I remember that the representatives of the provinces have been negotiating with the federal government in order to come to some arrangements such as those provided in this bill.
At one time bankruptcy did have a very serious stigma; but events have taken place over the past 60 years which have changed the public's conception of bankruptcy. Prior to and during the 1920s the man who went bankrupt was a total failure. It was a disgrace. In fact, I can recall that at that time a farmer could not be made bankrupt. This provision that a farmer could fall under the Bankruptcy Act only came about in 1949. During the 1930s we saw introduced the Farmers' Creditors Arrangement Act which had great application during the 1940s and 1950s. As a young lawyer, I inherited a whole portfolio of files dealing with foreclosure. That is where 1 cut my teeth, on foreclosure practice, when I was dealing with old FCAA files.
There was a great deal of tragedy involved in many of those files. I recall what was told to me by my then senior partner who had a great deal of experience and was a very kindly man, and some judges and trustees who had dealt with farmers and, as well, not only small businessmen but business as a whole during the 1930s. They said bankruptcy was the best thing that these people could go through because it took a mountain off their shoulders, one which they would never have been able to shed, and gave them an opportunity for a new start. So far as farmers were concerned, many a time was an arbitrator, usually a judge, named to supervise adjustments of debts, whereby land debts, overdue grocery accounts, twine accounts, oil accounts and what have you were all written down. It was a proposal much as we see in section 3, the consumers' section of this present bill. Many a farmer had an insurmountable load taken off his shoulders. Prior to the arrangement, the wall he faced had seemed sky-high, but now he could begin to see over it. With changing economic conditions, these people were able to continue and get out from under, but something had had to be done. I think, to that extent, the old FCA Act was a good piece of legislation, certainly so far as farmers in western Canada were concerned. That is where my experience came from, even though 1 came on the scene late. It was the only answer.
How about businesses in the 1930s? I know that in the province of Alberta some of our leading corporations went through the wringer of bankruptcy in 1933, 1934 and 1935. They got rid of their debts caused, in many instances, because they had done work but had not been paid. There were many construction firms which had done the work but they could not get paid. Why could the owners of the buildings not get paid? Because they could not rent them. There was no revenue coming in. The whole economy as we knew it had almost come

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Bankruptcy
to a grinding stop and something had to be done. It is no pleasure for bank managers to contemplate ledgers where notes are piling up interest which will not be collected. There is no way a wholesaler can continue giving credit to a merchant who can sell but cannot get paid; and it goes on, all the way down the line. So I think the 1930s taught a lot of people about bankruptcy and compilation of debts and arrangements.
We are talking about consumers in section 3, those whose debts outside of a family residence mortgage do not exceed $20,000. Many of those people cannot be put through a bankruptcy proceeding. They do not have the money or the assets to pay trustees or lawyers. However, do not think for one moment that this is a new-found gem or that the people in consumer and corporate affairs have come up with a brilliant idea within the last while. A section of this kind was in place and operating in the province of Alberta in the early fifties.
I forget the precise name of the legislation, but strangely enough a good friend of mine is a director of that section of the attorney general's department which administers this legislation. He was then also in that position. He had a great deal of experience. In my early years in Ottawa, I do not know how many times he came down to discuss with the federal authorities the incorporation into federal legislation of some of the principles and regulations of the legislation with regard to consumers. Thank goodness it has come!
We will see, when we are in committee and able to discuss the precise regulations, just how it is proposed that we deal with what I consider to be a vast horde of people. Incidentally,
1 think their numbers would increase if they knew they could go to experienced counselling officers under a debtors' assistance board so that their affairs could be examined, they could be advised, and they could be kept to arrangements made with their creditors. In the main, creditors are honourable people who have not necessarily lent any money but who may have advanced credit for the sale of goods and services. They are unpaid vendors. True enough, there may be some finance companies, banks or other retail credit organizations that have assisted in furnishing credit.
Today we have massive international credit cards which become almost a temptation for people to go out and spend. We are in an economy that depends upon buying and selling for the production of goods and services so that salaries may be paid and people may then purchase other goods and services. This is part of the economy. If you have ever heard a big truck come to a grinding halt or slow down as the result of shifting into a much lower gear, that would be nothing compared to the noise of the North American and western European economy if credit cards and credit buying were eliminated. When looking at the money supply today, one should not only look at the cash that is in circulation, at demand deposits and at cash on hand in the banks, but also at the total amount of goods bought and outstanding credit purchases.
If hon. members have money in a bank account, it matters little whether that money is there as a result of deposit or
whether they borrowed money and put it in the account. Master Charge, American Express, Visa and the credit cards of the major oil companies and department stores are all the same; one card is as good as $300 in the pocket at any time.


Mr. Peterson:: Never!


Marcel Joseph Aimé Lambert: The cards can buy goods at quickly as cash can. As a matter of fact, it is easier to buy with a credit card than with a personal cheque. They should be part of the money supply. When we look for reasons for inflation, the total amount of the wherewithal on which our economic machine turns should be considered. Credit cards are a relatively latter day phenomenon. People are indebted to the credit card companies as a result. This is not the fault of these companies nor of the banks which issue the credit cards, however; the purchase is made by the individual. John Citizen has to accept the blame for a lot of his own problems with overextended credit.
There are all sorts of reasons why consumers overextend their credit. They may have made a mistake; perhaps the payments were too high; perhaps there were two breadwinners in the family and for one reason or another one lost a job or had to resign. In any event, the income is not sufficient to meet the monthly payments. Then there are those who want to live higher than their income would permit. That is also a mistake in judgment. They are the people who play around with credit accounts, paying two months out of three, or three months out of four, and never asking the same creditor to absorb two delays in a row. You cannot call that kiting; they are playing a game of roulette with their creditors. That is all right if they do not become involved in more debt, but that type of individual can rarely resist the temptation to get into debt. They buy today in anticipation of paying with tomorrow's inflated dollars.
It is a very simple psychosis that a man who buys merchandise on credit today that is too expensive for him anticipates having it paid for in two years when he expects to be earning 25 per cent or 30 per cent more than he is earning today. He does not content himself with buying on credit, however; next year he goes on a holiday. That is the type of individual who ends up as a consumer debtor under this particular legislation. I am not going to cry crocodile tears for that individual.
Having said that, we must ask how we can deal with the situation. We cannot ignore those individuals because there are tens of thousands of them in the country. Their situation is almost like that of a doctor who would say that he is going to neglect all cases of measles or the common cold. It cannot be done. Instead, he must try to eliminate measles and the common cold. In this particular case, the solution is not up to John Citizen who owes $20,000. Actually, I do not think that is enough and I hope there is provision for increasing that amount by way of regulation, because with inflation as it is at present, $20,000 will be out of date by the time this legislation is passed. Let us be satisfied that we can convince this individual that he should go to see the equivalent of a debtor's assistance board run by the federal government, not the prov-
May 19, 1981

ince. I see that there is provision for this in the act. The thrust seems to be that this board will be under provincial administration. That is the way it should be. It should be done with as little formality as possible.
My colleague the hon. member for Calgary Centre (Mr. Andre) spoke about trustees and receivers. We know about those. 1 am reminded of when 1 was a young lawyer. Someone presented me with an old British cartoon showing two lawyers on the chancery side of an estate. Both of them were talking over a particular estate saying that it would be a pity if any of the beneficiaries got anything. Outside of perhaps priority creditors, such as the Government of Canada with its claim for unremitted income tax, unremitted unemployment insurance and unremitted Canada Pension Plan deductions, we have seen commercial and industrial bankruptcies where the creditors have received very little. But if you looked at the trustee's fee and the fees for solicitors who were acting on behalf of the trustee, you would see that was where the money was wrung out. But those men are entitled to do the work and to get paid for it.
I do not share all of the views put forward by my colleague from Calgary, because it seems to me we have been able to protect some very complicated bankruptcies. As a lawyer I used to do a certain amount of that work on behalf of creditors. If there were a sensible judge who knew something about a business, one who could be reached in a minimum of time who could give decisions and understand proposals, perhaps a proposal for the bankrupt concerned to continue operations but with supervision, this might be beneficial. I think that should be the case in many so-called bankruptcies today.
I see there is provision in the act for commercial arrangements and the possibility of a trustee being appointed by the court to work along with management on behalf of management's interest and on behalf of the creditors. After all, a going business is the only one that has a chance of making any money and of keeping people employed. On the other hand, a padlock on the door means the end of the road to a great many people. I think far too many padlocks get used. Perhaps there should be an opportunity for continued operation of businesses. They do it in the United States. If my memory serves me correctly, under what they call Section 11 multimillion-dollar concerns are able to make proposals, along with trustees appointed by a court, for operations to continue. There have been many cases where, in the end, creditors come to some sensible arrangement. Perhaps they are prepared to accept 75 cents, 80 cents or even 50 cents on the dollar knowing that is as good as they will ever get from their previous commitments. If a company gets rid of a heavy debt load it may yet be in a business whereby new owners with new ideas and more capital would be interested in taking over. There are many possibilities.
If anyone wants to take a good look at this act, it represents over an inch of paper in thickness. This act is complicated. What is more, the back sections, which include the schedules
Bankruptcy
and the annexes, create some of the difficulties and confusion because they amend other legislation. We see that the Bank Act is going to be amended. I do not think it affects Section 88 but it may affect the banks' secured position. I am not aware that there is a great deal of change in the priorities of creditors except perhaps in so far as employees having claims for unpaid wages are concerned. They do not rank ahead of secured creditors. Their ranking is among preferred creditors, but behind Crown Canada.
In situations where there were unremitted income tax deductions, the Crown has said that money was held in trust by you, the firm, on behalf of the Crown with respect to tax owed by Mr. X or Miss Y. The same may be said about unemployment insurance, Canada Pension Plan contributions and federal sales tax. These are all preferred claims ahead of unsecured creditors.
Now comes the question of wages not paid to employees. There is mention of a sum of $2,000 with a further sum of $500 in certain circumstances. If my memory serves me correctly, in priority $2,000 was the maximum in wages an employee could claim for something like four to six weeks, I forget which. That provision was in the 1949 act and wages were much less then than they are now. Wages were not defined in a maximum amount. I would think it would be advantageous if in the committee hearings we changed this provision from $2,000 to a weekly salary. Within three or four years, $2,000 may be totally inadequate. It would be better to say simply that an unpaid employee shall be entitled to four or six weeks' full salary, whatever the decision is, after the appropriate deductions have been made from that salary for unemployment insurance and so on. Incidentally, they would have to recover enough money to pay income tax, CPP and other statutory deductions from those salaries so that the employee can get full credit.
There is another area in which there has been a lot of criticism of trustees and receivers, as though they work behind curtains, away from the creditors and debtors and as though there was something mysterious about their operation. I am not satisfied with the way trustees were named previously. There always seemed to be an element of political patronage which I did not like. Over the years, it was often easy for a Liberal to come here and be named a trustee in bankruptcy but very difficult for anyone else. I suggest that lends some credence to the suggestion that the trustees and lawyers would divide the estate and the creditors and owners would get what little was left over, if anything.
I would prefer that every bankruptcy be supervised by a properly educated judge, someone who knows something about business, to whom the trustees would have to report fully. In some jurisdictions, through an arrangement with the provinces we could have a bankruptcy court or division, if the volume merited. At least there would be supervision. Anything that is supervised and out in the open has much less chance of being unfair.

May 19, 1981
Bankruptcy
One example is the construction business. If an apartment building goes blouey part way up and no more money is available, the mortgagee may refuse to extend further credit. All too often the major creditor is in a position to arrange new financing for the continuation of the project, having squeezed out the others. There is a sale by the trustee to a nominee of the major creditor or to an affiliated company. The small creditors get squeezed out. This may mean an awful lot to them. All too often it is the mid-range creditor, those involved to the tune to $50,000, $75,000 or $100,000, who take the brunt of these failures. These people must be protected as well.
I admit there is no way that everyone can come out of a bankruptcy with no loss. If the employees have been careful and have insisted upon being paid up to date, they will be covered by the statutory protection. A secured creditor will undoubtedly be protected, unless there is some great misfortune. However, that secured creditor should not be able to sell the property at a distressed price; it should be at a reasonable market price so there is some residue. What I am saying is that there should be justice as far as these people are concerned. To that extent, I hope this act will improve matters; it has been a long time coming. I also hope to be able to participate in the committee hearings on this bill.
Bankruptcies involve far too much dirty laundry. We hear about thousands of people going bankrupt. Nonsense, they are not going bankrupt; there are some who have overextended themselves. They make conscious decisions. If they modify their spending policies and tighten up in certain areas, they may be able to ride out the storm. These people were not guaranteed a safe and smooth passage. They have to stand up to the realities of the decisions they took.
There is no doubt in my mind that there has been a lot of foolish spending and investment. People get carried away with the inflation psychology which is so prevalent today. The government is up to its neck in it. All the way along we have seen government proposals in legislation which accepts 10 and 12 per cent inflation as though it was going to happen. The proposal in the Judges Act was for an increase in salary in excess of 7 per cent, and this to be checked every three years. What is that but an acceptance of inflation?
One of the side benefits of the exceptionally high interest rates today will be to draw people away from this inflation psychosis so that they accept the idea that tomorrow is not necessarily the day when Santa Claus will come around with higher salaries. At the present time, they are hooked all the way through. In more than one government proposal we have seen indexing all the way along. That is an acceptance of the fact that inflation is as inevitable as the sun rising tomorrow somewhere in the world, and that is wrong.
However, having said that, it is no relief to those people who have made mistakes to say to them, "Tough luck, old boy, but you made the mistake, you have to get along with it and lump it." I hope that through this act ordinary debtors, the so-called
consumer debtors, commercial debtors and industrial concerns, will have flexible enough legislation for honesty and good will to be allowed to-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member, but his allotted time has expired. Nevertheless, he may continue if there is unanimous consent.


Some hon. Members:: Agreed.


Marcel Joseph Aimé Lambert: I was just on my last sentence.


James Scott (Jim) Peterson: Carry on. Keep going.


Marcel Joseph Aimé Lambert: I invite the hon. member to make a contribution. He has enough to say in the Standing Committee on Finance, Trade and Economic Affairs at times about matters of this kind, but we do not receive the benefit of his knowledge and his experience here in the House. Let him come forward instead of speaking from his seat-


Mr. McCauley:: He is not speaking from his seat.


James Scott (Jim) Peterson: It is not my seat, Mr. Speaker. I will be happy to return to it.


Marcel Joseph Aimé Lambert: He has been heckling in an underground, half-heated way all afternoon, but not enough to be understood, and that is nothing new, but I would like to hear him make a speech on this particular subject.


James Scott (Jim) Peterson: Mr. Speaker-


Marcel Joseph Aimé Lambert: I have the floor, if the hon. gentleman will please resume his seat.


The Acting Speaker (Mr. Ethier):: Is the hon. member seeking the floor on a point of order?


James Scott (Jim) Peterson: Mr. Speaker, I rise on a point of order. I just ask the hon. member if he wishes me to carry on his speech for him or if he wishes me to make a contribution to this debate. I would be very happy to accede to his wishes because I have always respected his advice.


Marcel Joseph Aimé Lambert: Mr. Speaker, I will terminate on that. I expect tomorrow I will read Hansard and see the speech of the hon. gentleman and a contribution to the resolution of the problem with which we are faced in handling this legislation.
I hope we have a vehicle here and that appropriate arrangements can be made with provincial authorities so that as much flexibility can be introduced into the administration of the act as possible so that we can deal with this problem of excessive indebtedness.
Excessive indebtedness is not necessarily bankruptcy, but I hope we can eliminate formal bankrupty in as many cases as possible. True enough, the public does not attach the same stigma to the word "bankrupt" today as it did 50 years ago, but I think it is still something we should understand, even
May 19, 1981

though some hon. members opposite who sit and just mumble and grumble may be bankrupt of ideas on the subject.


Hon. Bud Cullen (Sarnia-Lambton):: Mr. Speaker, I was moved to speak earlier when I listened to the hon. member for Calgary Centre (Mr. Andre), and I am moved even more so now as a result of listening to the hon. member for Edmonton West (Mr. Lambert).
When the latter hon. member was dealing with the priorities which are set in the bankruptcy legislation, I was reminded that income tax funds stand in a preferred position. As a matter of perhaps some little interest, when I was first elected to the House of Commons, the very first motion 1 put on the order paper was to the effect that the government, in collecting income taxes, should rank on an equal basis with other creditors. Believe it or not, I was successful in getting that particular motion through private members' hour and to the committee. At the committee I ran into a bit of opposition from, of all people, the financial critic of the New Democratic Party, who indicated that where other individuals had extended credit, they had made the conscious decision to extend that credit, and the government was really in no position to do so. On that basis, that member argued in favour of the proposition that the government should maintain its preference. I was not able to dissuade the committee, and by the time I got back to the committee again, the decision had pretty well been made.


James Scott (Jim) Peterson: Putting business ahead of the public good.


Jack Sydney George (Bud) Cullen: 1 want to commend the minister for being able to convince his cabinet colleagues that this particular piece of legislation should be brought forward. We have heard much rhetoric and there has been much wringing of hands about the suggestion that many other subjects should be discussed, given present interest rates, as well as the energy policy which is now being discussed and bills such as Bill C-48 and Bill C-57, but this particular bill is not brought forward in isolation. 1 understand there are some six different committees meeting this afternoon to discuss a whole series of subjects. Part of those discussions will involve the estimates of particular departments. If parliamentarians have an obligation, it is to go over those estimates with a fine-toothed comb and in that way act in the better interests of the constituents they serve. So I think the minister should be commended for being able to convince his cabinet colleagues that this was the time to bring this particular piece of important legislation forward, rather than be the butt of the wrath of some hon. members.
1 was somewhat appalled-that is the only word I can think of-when 1 listened to the hon. member for Calgary Centre condemning in a broad way trustees in bankruptcy. 1 do not know the trustees in bankruptcy with whom he has dealt, but I can say that it has been my experience that trustees are very dedicated individuals. In many instances they are members of the chartered accounting profession or the legal profession, and they perform a yeoman's service on behalf not only of the estates for which they are trustees in bankruptcy but also on behalf of a myriad of creditors, many of whom would not understand their rights if it were not for the trustees in
Bankruptcy
bankruptcy who quite often go the second mile to explain those rights to ordinary creditors. In many, many instances trustees have seen fit to keep operations going so that creditors or debtors would not be left without any money at all. As the hon. member for Edmonton West pointed out, quite often they have been able to arrange settlements whereby creditors get 70 cents, 80 cents or a certain amount on the dollar so that everyone has an opportunity to share in whatever assets are available.
To suggest that trustees milk estates until the last cent is gone so that they can discourage anybody from taking civil action I think does a disservice to trustees in bankruptcy who have served this country in a very admirable and conscientious fashion.
There will be bad ones, of course, in every profession, but I think the vast majority of trustees do a yeoman's service on behalf of the people who run into difficulty, who are endeavouring to secure at least some of their money back and who look to the trustee in bankruptcy as their last hope of collecting at least some cents on the dollar.
The hon. member for Calgary Centre indicated that the service people who came to Ottawa to speak to us last week put all the blame for their problems on the national energy policy. I must say that they were much more honest in their presentation than was the hon. member for Calgary Centre this afternoon. They indicated that they had seen not just our government but also the government of the Province of Alberta and the government of the province of Ontario. They were endeavouring not to be political, as the hon. member for Calgary Centre was in this instance. They were endeavouring to point out their difficulties. Some pointed out that in six months they would have to close up. They pointed out that many of them will have to go bankrupt unless an agreement is reached between the producing provinces and the federal government.


Douglas Grinslade Lewis: Mr. Speaker, I rise on a point of order. I believe the hon. member said that the members of the contracting industry were much more honest than was the hon. member for Calgary Centre. If the hon. member were to look at those words, I think he would want to retract them and be a little more accurate.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I was indicating that those people had been more honest in their presentation. The hon. member for Calgary Centre indicated that these people were blaming everything on the national energy policy. They were not blaming everything on the national energy policy. They said there was fault on the part of the Alberta government, which is participating in this. They felt there was a role for the province of Ontario to play. They were concerned that we were not, in their view, working as effectively as we might in bringing about a settlement with the producing provinces. 1 am not saying the hon. member is dishonest. I am saying that his presentation was not as honest as the presentation we received from those individuals.
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May 19, 1981
Bankruptcy
They did express concern about what their plight would be down the road. In some cases they were talking about the short term and in others about as long a time as six or seven months, but they wanted to see a settlement effected, or they would be facing bankruptcy and have to rely on the provisions of either the old act or the new one. They were honest enough to indicate that drilling rigs were leaving before the national energy policy was ever introduced. They were honest enough to concede that there was an oversupply of oil drilling rigs in Canada and that on that basis there was not the market in Canada they would like to see. Many of them were going south for that reason. Others were moving because they had other obligations. They had taken up leases. They were moving because they had to do some work on those particular leases if they were to maintain their right to drill in those particular areas. So in the presentation they made these individuals did not blame the national energy policy for everything that took place.


An hon. Member:: Just 90 per cent.


Jack Sydney George (Bud) Cullen: The hon. member opposite says 90 per cent. They did not say anything about 90 per cent at all, they indicated there was an obligation, and 1 agreed with them, on all parties to sit down and endeavour to arrive at a settlement that was acceptable right across the country so that those who were producing would get adequate compensation for their work, that the province would receive adequate revenue and that, as every one of them who spoke to me indicated, the federal government was entitled to more of the revenue from a barrel of oil than it is receiving at the present time. The other point they made is that the price of oil really is the determining factor. Once that decision is reached, many of the other problems, they felt, could be overcome.
The hon. member from Edmonton West quoted a former principal of his who indicated that a bankruptcy was a natural and necessary tool or weapon, or perhaps opportunity is the best word, for people in business in the private sector in a capitalistic system. In this way people have extended credit to them, have taken that particular risk, sometimes securing the risk by floating debentures or mortgages or some other means, and in some instances they simply lent that money or performed the work, knowing they can protect themselves through the filing of mechanic's liens or things of that nature.
However, in every instance of a bankruptcy the individual or corporation has overextended itself, possibly by expanding too much, possibly by not rationalizing the machinery it has in its enterprise. There are many reasons for bankruptcy and I think Canadian society today does not look down upon bankruptcy in the same way it did many years ago. I think it is now accepted, and people who extend credit recognize that they are taking a risk and that it is their obligation, as the hon. member for Edmonton West said, to determine to what extent they should be prepared to advance goods or money or to allow someone to use a particular enterprise when the individual who needs it cannot pay cash for it on the spot.
So business decisions are made by people who extend credit, and people build up reputations for receiving credit, using that credit, making a profit and paying back the loan. In that way they set a pattern so that in the future when they enter other enterprises or develop their own, they will have built up a credit rating so that people will have some confidence in them and advance them credit.
It is always a tragic time when an individual or a corporation faces bankruptcy, and what we have to do at that particular time is at least to have legislation in place that will make it as easy as possible for people to overcome the trauma, to see if they can get some money out of the particular operation or to see if they can keep the operation going. Good trustees in bankruptcy will do that, if they can arrange a settlement that will be equitable for all concerned, and that is not only the trustee's responsibility but certainly is that of the individual or the corporation to the people who have extended credit.
All of us in this House are concerned about the ordinary wage earner, the individual who has no choice. He works for a particular corporation and is supposed to be receiving a salary, but he is put off so that at some point down the line he has to make a decision as to how long he is going to continue to work there in the knowledge that he may never receive the money. He has no particular priority. And I think the method the minister has endeavoured to put into this particular act is one that faces up to that particular problem. Maybe there is a better way and maybe someone will come forward at the committee stage with something that is better than what is provided for in the act, but I commend the minister for the fact that special attention has been given to the ordinary worker employed by a particular corporation who has not insisted upon payment of his wages in the interest of helping that corporation to continue.
There is one other area that I find particularly invidious, and that is the individual corporation that knows it is going bankrupt, continues to seek out credit and secures it, in some instances, from gullible people, and maybe we should not feel too sorry about them. Those companies convince people in construction, for example, not to file mechanic's liens because in doing so they will stop the flow of capital. Quite often a bank or a trust company will move in, advance more money than should be advanced and thus obtain a large advantage over all the ordinary creditors because these individuals have not filed mechanic's liens. When a construction subcontractor reaches a stage where he feels it is necessary, in order to protect his interests, to file a mechanic's lien, it is my view that unless he has something very solid from the contractor or the owner, he would be well advised to pull the plug, as it were, and call the bluff of the contractor to see if he can in fact proceed.
Now you cannot generalize on a subject like that, Mr. Speaker, because there are instances where an individual knows that if mechanic's liens are filed, the bank will not advance the money he needs to pay salaries and things of that nature. However, somehow we have to find a way to aid those who have been stuck as a result of companies and individuals
May 19, 1981

going bankrupt. I hope that in the passage of this particular piece of legislation, as long as it is-and at 430 sections it reminds me to some extent of the Bank Act-we will have the same kind of co-operation. I hope we will have witnesses appearing before us who will have an idea about how we might protect the ordinary worker and if this is not the best system, whether there is a better system that could be implemented.
1 thank the House for its attention. I know that others want to speak, but I hope the bill will be referred to committee soon so we can have witnesses before us and give the bill a very close scrutiny in clause by clause reading. Thank you, Mr. Speaker.


Some hon. Members:: Hear, hear!


Douglas Grinslade Lewis: Mr. Speaker, 1 welcome the opportunity to address a few remarks to the House during this debate. Before doing so, I cannot help but remember the time when I asked my father, a chartered accountant, why he did not do any trustee work. His answer was: "Well, Doug, I have never seen a happy bankruptcy". After several years in business I have to echo his remarks because I know that when we are dealing with bankruptcy legislation, we are dealing with something which touches people in very difficult circumstances.
Before dealing with the provisions of the legislation itself, I cannot help but comment on the irony of the Liberal government bringing in the legislation at this time. The House knows that Canadians are facing record high interest rates and record high mortgage rates as a result of the Liberal government's failure to address the economy since it took office in 1980. The deficit continues to rise, the economic prospects of Canada continue to plummet, and the government does nothing as far as an industrial strategy or long-range planning is concerned. We are left with a government which says that it will come to the rescue of the Canadian people with improved bankruptcy legislation.


An hon. Member:: Broken record.


Douglas Grinslade Lewis: Yes, you have broken many records. As a result of this inaction by the government, more and more Canadians are making use of the Bankruptcy Act and this is the only reason that any concerned Canadian can see at the present time for the introduction of this legislation.
The House will know in 1980 there were 224 farm bankruptcies compared to 125 in 1979. In the first quarter of 1981, there were 75 farm bankruptcies compared to 44 in the first quarter of 1980. The number of business bankruptcies was 6,595 in 1980 compared to 5,648 in 1979, and 5,646 in 1978. Business bankruptcies in the first quarter of 1981 were 2,044 as compared to 1,706 in the first quarter of 1980. The number of personal bankruptcies in 1980 was 21,025 compared to 17,892 in 1979 and 15,938 in 1978. Personal bankruptcies in the first quarter of 1981 were 6,152 compared to 5,238 in the first quarter of 1980. The Liberal government continues to set records.
Bankruptcy
It is also interesting to realize that this basic legislation has been in the works in finalized form since 1975. I understand it has been introduced in the House by three different ministers at three different times over the past six years. In fact, it has taken the Minister of Consumer and Corporate Affairs (Mr. Ouellet) since last year to present a bill which is basically the same as the one presented by the Progressive Conservative party when we governed in the fall of 1979.
The lack of ingenuity on the part of the government is superseded only by its lack of speed. Rather than dwell on the intricacies of the legislation and the procedures for handling bankruptcies, I turn my attention to the provisions of the act which govern secured and unsecured creditors, especially with respect to the position of commission sales people and wage earners.
I am sure the government, in consultation with receivers and trustees, has done its best to streamline the procedures under the Bankruptcy Act. In any event, we can deal with those refinements in committee; we should not occupy the time of the House. Later I will comment upon the suggestion that the bankruptcies superintendent surveys trustees and receivers to determine the feasibility of establishing a funded plan to insure wage earners against loss of wages and other benefits caused by the bankruptcy of their employers.
I should like to deal with the question of preference. Traditionally preference has been given to wage earners vis-a-vis other unsecured creditors. The act proposes to continue that preference. I would suggest that we look very hard at the suggestion that wage earners should be granted priority over secured creditors for wages and commissions owed, as well as any deduction the employer has made for employee benefits, group insurance, income tax, etc.
Wage earners and commissioned salesmen are always hardest hit by a commercial bankruptcy. The loss of wages strikes at the pocketbook of the wage earner and his or her ability to feed and clothe a family and put a roof over their heads. These are not usually the sophisticated players in the business world. The sophisticated players are the banks, trust companies, finance companies, insurance companies and large businesses. They can sustain a loss; they know how to protect themselves. These are the people to whom salary cheques at the end of the week or every two weeks are all important. For that reason we should consider giving wage earners and commission sales people a priority over secured creditors. The hon. member for Dollard (Mr. Desmarais) was in the House a moment ago; he is also a chartered accountant.
At this point I would like to refer to the minutes of the Senate Standing Committee on Banking, Trade and Commerce of Tuesday, June 3, 1980 in which Mr. Biddell, a well-respected trustee in bankruptcy, made some remarks with respect to the possible preference or security which could be given to wage earners. He spoke on behalf of the Institute of Chartered Accountants which presented a brief to the committee. He said:

May 19, 1981
Bankruptcy
-we think it is the secured lenders who should be required to contribute out of their security the amount required to pay the outstanding wages, because the employee's work has gone into enhancing the value of their security, for the most part, and the secured lender is the person best qualified to determine, not only his position but whether or not the company can continue to survive, what its chances are, and when, if it must, be terminated. This is the way commercial practice is going in Canada, and I think that this legislation should follow it.
The Institute of Chartered Accountants suggested that this security should be attached to current assets such as inventory and accounts receivable, not so much long-term fixed assets such as land and equipment. They suggested the money in cash which the trustee would have coming in from which to pay out secured claims of wage earners. This makes good sense; I hope the House and the committee consider it.
My next question concerns whether there should be any limit on the amount of salary and wages an employee may claim as either a secure or preferred creditor. I want to review this matter briefly and then make a special reference to real estate sales people on commission. The limit of $2,000 was presumably set with some principle in mind. I do not understand why there should be any limit on the wages and commissions payable which rank as either secured or preferred claims. It is the people who are working, whether they are commissioned sales persons or wage earners, who make the economic world go around. The very least we can do as members of Parliament is to protect their salaries, wages and commissions.
There may be any number of reasons why the amount owed to an employee at the time of bankruptcy may exceed $2,000. The employee may be a highly paid employee. The employee's pay dates may be monthly or at even longer intervals. If the employee is employed in the far north and only draws down his full pay at the end of a contract date, the amount owing could exceed $2,000. The employee may be on a bonus or incentive which normally results in large accruals of salaries or wages. In any event, I see no reason why there should be any limit on what is paid in a bankruptcy to an employee who is either a preferred or secured creditor.
Real estate sales persons are at a very distinct disadvantage under the Bankruptcy Act. First, the amount of commission on any one real estate transaction can very often exceed $2,000. Second, real estate sales persons do not receive their payment or commission until the transaction closes. This can mean a real estate sales person can work very hard in the month of May and sign up, for example, in five transactions which close in June, July and August. The work of the commission sales person has been done, the transaction is finished as far as they are concerned, but if anything happens to the financial stability of the broker during the period from the time the agent completes the offer to purchase to the time the commission is paid to the broker and thence to the sales person, the real estate sales person can find himself in difficulty. He can find that commissions receivable have been assigned to the bank or to other creditors and they are scooped before the real estate sales person is paid his commission.
If it is argued that the rationale for a $2,000 limit on wages and salaries is that an employee is expected to protect himself or herself, this does not ring true when we are talking about
commission sales people. They cannot do anything about the commissions owed to them. If one is working on the line, is paid every week, and does not get paid on one Friday or the following Friday, perhaps there is some responsibility on his part to say, "Hey, wait a minute, I will not work until they pay me." But real estate sales people and other commission sales people do not have that protection. They may not even be on the premises where the business takes place. Their part of the business may be to go out and make sales; they are not there to see day to day the financial stability of the company. I would suggest that we look at that, and if we maintain a preference system, we should consider whether $2,000 is high enough.
May I call it six o'clock, or do you wish me to continue?


The Acting Speaker (Mr. Ethier):: It being six o'clock 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.
Douglas Grinslade Lewis: Mr. Speaker, when my time ran out at six o'clock I had just finished dealing with what I felt were inequities in placing a limit on the amount an employee could recover as a preferred claim on a bankruptcy. I would like to extend my comments one step further and talk about the provision in the legislation relating to a $500 limit on pension and health and welfare contributions. It seems to me that when an employer makes deductions from an employee's pay for group insurance benefits, health and welfare deductions and pension plans, the employer takes on a position of trust. The funds which are held by the employer for payment to the benefit of the employee are trust funds. The employee has no method of ascertaining that the funds have or have not been paid out on his or her behalf by the employer under the terms of the trust. No employee, no matter how diligent, can protect himself against an employer who, when faced with financial difficulties, decides to borrow from his employees in effect, and pay other creditors to the detriment of pension funds and health and welfare plans.
It is for that reason I wonder why there should be any limit on the trust moneys deducted by employers which are held, in effect, to be paid out under these plans for the benefit of the employees. It seems to me that the federal government has a responsibility under the terms of the Bankruptcy Act to enforce the terms of that trust.
The last thing I wish to deal with is the suggestion that the bankruptcy superintendent be empowered under the act to survey trustees and receivers to determine the feasibility of establishing a funded plan to insure wage earners against the loss of wages and other benefits caused by the bankruptcy of their employer. My first thought was, that in setting up such an investigative board, the Liberal party had run out of positions to which it could appoint Liberal politicians and
May 19, 1981

party faithful. I thought perhaps Maurice Strong had another idea. Then I went on to imagine the management consultants and economists who would be needed to produce such a study. I imagined the endless forms, the questionnaires and the paperwork which we would be loading on the Canadian business person who is trying to make a living. Then I started to contemplate who would be included in this favoured group of wage earners who will pay into a fund which will pay salaries when the employer goes bankrupt.
The first group of employees I thought about was federal government employees because, at the rate this government is running up deficits, they are prime candidates for bankruptcy. It can be seen that very soon civil servants should be paying into such a fund. I then went on to think about Crown corporations which would probably also be absolved from the payment of such premiums, despite the fact that organizations such as the CBC would never produce a profit, nor could they ever be expected to. I then wondered how an employer would explain to his employee a further deduction from his rapidly diminishing pay cheque. There would be a box on the pay slip which would read "bankruptcy deduction". I thought about my son who recently landed his first job. 1 could see him going to his employer and asking him what this bankruptcy deduction was all about. The employer would say that it was a fund from which my son would receive his wages when the employer went bankrupt. I do not see how this engenders any confidence in the system, to be deducting money from people's pay cheques right off the bat and telling them how they will be paid when their employer goes broke.
As I suggested earlier, it seems to me eminently more sensible to adopt the suggestion of the Canadian Institute of Chartered Accountants and give wage earners and commission sales people a priority over secured creditors from the remuneration or recovery on current assets.
I am also concerned as to how we would administer such a plan, the number of people that would be needed, and simply whether it makes sense; because although we are dealing with bankruptcies and we are definitely having more than we have had in the past, based on my 25 years of experience in business, 1 do not see that a fund and all the problems that go with such a fund are necessary to solve this problem. I think that if the Canadian government wants a survey, surely that questionnaire could have gone out to trustees and receivers without our asking for the approval of the House of Commons. With all of the things that the government does without our approval, one would think that surely a simple questionnaire such as this could be set up.
So, those are the remarks that I wanted to make on the Bankruptcy Act. We on this side of the House dearly hope that the government will get on with the legislation, that we can get it into committee, that we can solve this matter, and we will not have the hon. Minister of Consumer and Corporate Affairs bringing in this legislation once again.


Some hon. Members:: Hear, hear!
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Mr. Doug Anguish (The Battlefords-Meadow Lake):: would like to participate in the debate this evening. There are a number of things I would like to point out. I have some concerns for my own constituency, which is affected by this bankruptcy legislation or certainly should be affected by it. I would like to start off with a quote that goes back to 1923. It is from a statement by J. S. Woodsworth, who was one of the founders of the CCF, the forerunner to the New Democratic Party of which I am a member today in this House. In speaking on the amendments to the Bank Act at that time, he said:
Let me say, as has been said elsewhere, that either we, as a people, must own and control these great financial institutions or they will absolutely own and control us.
Woodsworth was talking about the banks and the legislation put forward by the government. It seems the prophecy that he made at that time has been proven to be right. I wonder quite often why this is so, after so many people have made representations to the government of the day and the former government, the consecutive Liberals and Conservatives who have ruled this country, that wage earners and consumers, small business people and farmers should have first right to any money that is owed to them when a bankruptcy actually does occur. It puzzled me why that takes place. But when one looks at who really owns the Liberals and who owns the Conservatives, it is no wonder. I look at the contributions that are made to the political parties from, say, the five major banks in Canada.


An hon. Member:: How about the unions?


Douglas Keith Anguish: For example, the Toronto-Dominion Bank donated $90,000 to the Liberal party between 1977 and 1979. Also, the Tories were given not $90,000, but $90,095 from the Toronto-Dominion Bank.


An hon. Member:: What did you do with the $95?


Douglas Keith Anguish: We have the Royal Bank which wants to treat both of the old line parties equally so that each was donated $100,000 in the years from 1977 to 1979.


An hon. Member:: What did the teamsters give you?


Douglas Keith Anguish: The bank of Nova Scotia donated $94,000 to the Liberals and $90,098 to the Conservatives. The Bank of Commerce donated to the Liberals during that period, $100,194, and to the Tories, $100,747. The Bank of Montreal gave $101,500 to the Liberals and an even $100,000 to the Conservatives.
Those totals to the Liberals during that period of time from the five major banks came to almost $.5 million. The Liberals received $485,694. To the Progressive Conservatives, they gave $480,940. The Tories on my right ask, "How much did they give to the NDP?" They never gave one cent to the NDP.


Some hon. Members:: Oh, oh!

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Douglas Keith Anguish: It is the people of this country who control the New Democratic Party, and not the major financial institutions of this country.
The Bankruptcy Act has some changes in it to clear up some of the problems with which we are faced, but not nearly enough. I really do believe that the small business people, the farmers, and especially the wage earners of this country, should be the ones to get the first crack at any money that is left over when a company becomes insolvent or has to declare bankruptcy.
The banks are the first ones to shout, though. They have everything secured. They keep in touch through political contributions and strong lobbying techniques that the average consumer does not have at his disposal. For example, early last year there were 50 employees from Lewis Motors (Ottawa) Ltd. right here in Ottawa. Did they all receive their money, or did Clarkson Gordon get its money first, or did the Canadian Imperial Bank of Commerce get its money first? And what was left over for the employees? I suspect there was very little left once the banks got through with them, because the banks, especially during high inflationary periods like this, get consumers, small businesses, especially farmers, into a situation of indebtedness with which they cannot cope. They have them secured and they end up with everything after the company or the farm has become insolvent or declared bankrupt. I do not think this is right.
The government actually introduced legislation in 1975 to clear up this situation but did not really pursue it. It was dropped at that time. Then the Senate pursued the matter. It felt that the banks should receive priority. I will quote Senator Hayden who summed it up by saying: "The committee took a strong view in relation to that proposal," talking about wage earner priority, "fearing that it would upset the whole business of commercial lending and commerical financing if secured creditors were deprived of their position." Deprived of what position? I wonder, when we are talking about the banks, these financial institutions.
About a month ago I saw an article in the Winnipeg Free Press headed, "Bank profits zoom". In the first quarter of 1980-81, the profits of the eight top chartered banks were up by $459.8 million. For that quarter, that means they were up 60.8 per cent over the previous year. Certainly they do not need that money as do some of the small individuals who are caught in the squeeze of high inflation and high interest rates which have been created by the Liberals in co-operation with the Conservatives before them, and who set the legislation to give priorities to the banking institutions to grease their political wheels. I think it is a disgrace.
I wonder how the interest rates affect Senator Hayden. I wonder how the interest rates affect some of the members of Parliament here. Certainly not as much as they affect the small consumers out in the constituencies which we are supposed to represent. It seems strange that it is the people who elect us, who put us here to run the country and set the rules of the country to govern in fairness and in good order, and yet we come down on the side of the banks and not the common,
everyday individuals out there who need our help, who do not have the resources at their fingertips to be able to manipulate the systems as well as the banks and larger corporations do. I think it is much more important to have the money put towards feeding a family than to put it into running a banking institution or financial institution which already has, as I have said, zooming profits, increased profits, year after year in this country.
The banks should be equally happy, I think, with the Tories as they are with the Liberals who are giving them this. I think that a good way of summing it up is that the Conservatives chopped the hole in the boat; but now that the captain is a Liberal, they are screaming because the water is getting in. It seems a very strange situation to me.
There are not many rich bankers in the constituency which I represent in northwestern Saskatchewan. The people there work very hard to make a living, as do people anywhere else in this country. They do not have the resources available to them that might be found in some of the larger centres, nor do they have some of the job opportunities that might be available there. A number of other members represent constituencies similar to mine where the people depend on small businesses which employ the vast number of people in this country. They depend on agriculture, and bankruptcies among small farms are increasing at an alarming rate. I understand that business bankruptcies have increased by close to 30 per cent. Some 697 businesses went bankrupt in March alone. That does not just refer to those small businesses where people have lost the work of a number of years or in some cases of their entire lifetime; it does not mean hardship only to them but to their employees, people who depend on those small businesses for the income with which they feed their families. This has a spin-off effect in the community.
The situation of the farmers is worsening, Mr. Speaker. In the first three months of 1981, farm bankruptcies increased 70 per cent over the same period last year. This does not take into consideration those farms where there was foreclosure or those farmers who had to sell out because they may have been too proud to declare bankruptcy and had to get out with some of their personal effects. These people lost everything. When we are passing legislation which relates to bankruptcy, I think it should help those people and not the banking institution.
I agree that the banks should have the ability to secure credit, but they should not have first call on it, Mr. Speaker. The people I have mentioned should have first call. When those people are paid off, there is usually something left but when banks and financial institutions have the first secured line of credit, there is very seldom anything left for the consumer or wage earner in the company involved.
I am quite concerned about what is happening in the area of agriculture. Bankruptcies may drive us into an agricultural or food crisis in this country within a few years, if they continue at the present rate. People are being driven out of cow-calf operations and out of grain farming because of the bad
May 19, 1981

economic conditions that face them. Perhaps the Minister of Agriculture (Mr. Whelan) should turn his green cowboy hat in for a green poker visor because this government is playing poker, which is a high risk game, with the farmers, business people and wage earners of this country whose lives are adversely affected during these times.
We have a very serious problem in this country today. Rather than dealing with who should have priority when a company goes bankrupt, perhaps we should be dealing with legislation to keep businesses and farmers from falling into such a bad situation. In times of spiralling inflation, it is very difficult for them to carry on.
I should like to turn for a few moments to a matter which took place in the constituency of Battlefords-Meadow Lake. A short time ago, 27 farmers in northwestern Saskatchewan purchased some very expensive farm equipment from an implement dealer in North Battleford. The implement dealer agreed that the farmers would put down a small amount and pay the rest after a set period of time. Unfortunately, he ran into some financial problems and did not pass on all the money paid to him for the machinery purchased by the farmers. Instead, he saw it as a cheap source of interim financing that he could use to get his business back on a good footing, at which time he would pay the money back. He never passed the money along to the trust company which held the notes for the cost of the equipment, however, and his business got into a worse situation. His indebtedness spiralled and he found himself unable to honour his commitments to business. Rather than declare bankruptcy, he sold the business to another implement dealer. This was not really a case of bankruptcy, but if he had declared bankruptcy the outcome would have been the same.
When he sold the business, the trust company became interested in his financial situation. It wanted its money for the equipment that had been sold to the 27 farmers in the Batt-lefords area. The man who owned the company said, "I am sorry, I cannot pay you." He signed a promissory note to the trust company saying, "Yes, I owe you this sum of money", which actually amounted to $246,694.88. He said, "Yes, I owe this, but I cannot pay it." He sold a car he owned and gave that money to the trust company. He sold a house he owned and gave that money to the trust company. The courts were not even able to find out what had happened to the money that had come in when he sold his business. So he was unable to pay this almost quarter of a million dollars to the trust company which said, "We want our money." The implement dealer said, "I cannot pay it." The trust company said, "Well, we want the equipment." The implement dealer said, "I cannot give it to you. The farmers have it." The trust company went to the farmers and tried to seize the equipment, which they needed to carry on their farming operations. As far as the farmers were concerned, they had already paid for their equipment, but the trust company still wanted it.
One of the farmers said, "Lookit, you can't have my equipment. I need it to carry on farming and I need to farm in order to feed my family and pay my taxes to this great family." He
Bankruptcy
took the trust company to court. The final court decision was that the farmer had to pay for the equipment again. The farmer had to pay the trust company twice! Twice for the same equipment! That is wrong, Mr. Speaker.
There are several things wrong with this situation, some of which relate to federal legislation and some to provincial legislation. Part of the problem with the provincial legislation concerns the bonding of implement dealers. The provincial government of Saskatchewan has been very responsive and is introducing legislation this session to ensure that such a situation will not occur in that province again. The federal government should be doing something about it as well. No one should have to pay twice for the same material. The farmers paid in good faith to an implement dealer who unscrupulously used the money for his own benefit to try to put his company back on a sound footing. He thought of it as low interest money and did not pass it along to the trust company. That should not be allowed to happen.
The same situation would have held true if he had declared bankruptcy. The courts would still have ruled in favour of the trust company which wanted its money-which seized the collateral or asked for double payment.
It is situations such as the one I have outlined which point out that wage earners and the people of this country who are least able to afford the loss when a bankruptcy occurs should have first recourse against the assets, not the trust company.
Can you imagine what it does to 27 farming families in one area who in some cases have to pay as much as $30,000 or more for the same piece of equipment, and to pay for it twice? In times of inflation, just as now when equipment is already overpriced, when interest rates are out of sight, when fuel prices are creating hardship and adding to the inflationary spiral, I say it is wrong to give these companies first priority over those funds and to turn private individuals out into the cold. That is not being a very responsive government. I do not think the government appreciates what some of the people have to put up with in constituencies outside of Ottawa.
Ottawa is not the real world, Mr. Speaker. 1 am sure you are aware of that, even though your constituency is in Ottawa. Ottawa is removed from the real world. I think some members of Parliament, especially Liberal members of Parliament, should be keeping in closer touch with their constituents and listening to what they say when it comes to who should have priority in cases of bankruptcy. Almost every lobby and organized group, outside of Ottawa and the banking and financial institutions, recommend that it is the individual, the wage earner and the small business person who should have first chance at recovery of assets in cases of bankruptcy.
We should examine what other countries do, instead of just listening to what the banks have to say. For example, the Swedish government has a wage guarantee law. In this respect employers pay into a fund. I do not know that anyone from the Liberal government has looked into that aspect to see if it is feasible in Canada. It sounds good to me. But as a member of

May 19, 1981
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Parliament I certainly do not have the resources or the research staff to look into something like this. The government should do such research when it is introducing a bill like this.
In France the government helps employees of a bankrupt firm to find work. The government guarantees pay for a year if those employees cannot find work. Why does Canada not think about doing that? Does the federal government not have control of the economy? Have we lost total control? Do we not care any more? It seems that we are in a firefighting situation most of the time. We react to a crisis situation, instead of planning ahead. We should plan an industrial strategy. More important, we should plan an economic policy to ensure that hardships, which certainly do and will occur over time, are spread over as large a base of the population as possible. This hardship should be spread around, especially on those with the economic resources, such as financial institutions. They should absorb some of that hardship, instead of forcing some farmers into a bankruptcy or into having to pay twice for equipment that they could hardly afford in the first place.
Many members of Parliament, especially Liberal members, because they are the ones who are introducing this bill, have to hide their heads in the sand and choke back the injustice which is being created by legislation like this being put into place. They have to hold their noses to put it through because it reeks of paying the piper and calling the tune. I am referring to the money given to the old line political parties by the financial institutions of this country. It is almost unbelievable that something like that could happen in Canada at a time when we are trying to draw up a Constitution to govern the country in fairness and equality for all people. Much of the legislation we bring in is firefighting legislation. It is reactive legislation. It is reactive to the heaviest pressure groups, which include the banks. The banks pressure individual members of Parliament to introduce legislation which will be advantageous to the banks. The banks grease the wheel by giving contributions to the old line political parties. That is a terrible way to set laws in this country. If the same thing is happening with respect to our Constitution, then I think this country is in real trouble. We should be looking at the very base by which we govern ourselves. We should be listening to the people from firms such as Lewis Motors. We should be listening to the farmers who bought implements from dealers who handle their funds unscrupulously. We should listen to the way some of these people have been treated by the unjust laws that we have created in this chamber.
I can be even more critical of the Senate which has spearheaded this bill. Senator Hayden has argued that it will upset the financial balance of this country if the first line of retrieval of assets is given to employees or to individuals and not to the financial institutions. The Senate is even more removed from the real world than some members of Parliament. I wonder how long it has been since any senator has had to deal on credit? I am sure some of them deal with credit because many of them are in business. Business evolves around credit. Senators, however, have financial reserves so they do not have to depend for their very living on credit, as many of the people
out in the work place do, out on the small farms and in small business. Some of these rights should be taken away from the Senate and maybe some of the senators would declare bankruptcy from time to time. They would know what it feels like to be down and out bankrupt. They are not bankrupt in terms of financial assets, but they are certainly bankrupt in terms of the ideas and the morals they have to bring forward and recommend legislation such as this which gives the first crack at bankrupty assets to the financial institutions of this country.
If this bill cannot be changed to protect those people who need to be protected most, I feel somewhat ashamed. I would never be able to give my support to a piece of legislation such as this which does not protect the people we are here to represent.


Mr. Geoff Scott (Hamilton-Wentworth):: Mr. Speaker, in rising to participate briefly in this important debate, I gave quite a bit of thought to the word bankruptcy. Most of us in this chamber have run across people who are morally bankrupt. I am not pointing my finger particularly at any hon. members on the government side of the House at this time. We politicians may even accuse each other of being intellectually bankrupt from time to time.
Originally, the word bankrupt was only applied to fraudulent persons. The first bankruptcy act in Great Britain was directed against such "persons as do make bankrupt." These people were defined as those:
-who craftily obtaining unto their hands great substance of other men's goods do suddenly flee to parts unknown or keep to their houses not minding to pay or restore to any of their creditors their debts and duties.


Flora Isabel MacDonald: That is Allan MacEachen.


Geoffrey Douglas Scott: Clearly and thankfully the interpretation of the word "bankrupt" has become somewhat more lenient since the days of Henry VIII, although those responsible for the economic situation that we are in, and which is leading to so many bankruptcies, have been known to flee to parts unknown. Again, no names will be mentioned.
It is when you examine the word "bankruptcy" as an individual, as a small businessman, that its definition makes it the most fearsome word imaginable when it comes to a person's economic well-being, not to mention self-esteem. Bankruptcy is indeed a hurtful, demoralizing thing. This is how Funk and Wagnall's Standard Encyclopedic Dictionary defines bankruptcy:
1.	Law-One who is judicially declared insolvent, his property being administered for and distributed among his creditors, under a bankruptcy law.
2.	Any person unable to pay his debts, or without resources.
3.	One ruined and unproductive in some way.
The adjective "bankruptcy" is:
1.	Subject to the conditions of a bankruptcy law; insolvent.
2.	Destitute; lacking.
Some of the previous speakers in this debate dealt with the technical and the political aspects of this bankruptcy legisla-
May 19, 1981

tion. Let me take a more personal people view of this issue. As a small businessman, and especially the small business I was operating before 1 entered politics, the spectre of bankruptcy was always there. Mine was an innovation in the electronic communications business and certainly in the parliamentary Press Gallery. It was to provide coverage of Parliament to some 20 individual television stations across Canada, feeding them news film clips of their local MPs on an almost daily basis.
While the idea was a sound journalistic principle and filled a real gap before broadcasting entered this House of Commons, such a venture require many thousands of dollars of capital investment in terms of camera equipment, film stock and, above all, people. During my ten years of operating the company, I employed or contracted 12 to 15 men and women, reporters and cameramen alike, with a total staff of seven people at one time during peak periods.
That may not sound like a very big operation when compared to other businesses such as farms and smaller industrial operations, but I can tell you about the vagaries of the broadcasting industry, about the unpredictability of the news business and, most certainly, about the uncertainties of the economy. Interest rates then were 9 to 10 per cent, one half of what they are now, but they were high. I can you tell especially about the exceptionally fine talents of the upwardly mobile young men and women who gained experience in my small company to move on, inevitably and justifiably, to larger and more lucrative employment in regional and national networks. All of these factors made life in my small business at best uncertain. I am proud of those former employees who used my company as a training ground. Several are major names today in the field of electronic journalism.
The turnover of reporters and technical personnel, and the ever-present fuse that was to lead to the explosion in technology in the news business-especially the conversion from film to videotape tranmission-along with increasing competition from the network giants, made it imperative that my accountant and I keep looking over our left shoulders to the very real probability of being forced out of business. For me, such a prospect of increasing corporate control could have meant that awesome possibility of bankruptcy.
Fortunately, thanks to the diligence of my company secretary-treasurer, who, by staggering coincidence, happens to be my wife, and thanks also to the good people of Hamilton-Wentworth, my little company survived. That is as close as I ever want to come to being, as the definition says, "without resources" or "one ruined and unproductive in some way".
It is also a reason that I can understand, and sympathize with, the agony that so many small businesses, some a lot bigger, some considerably smaller than mine, must endure under the present economy. I understand the helplessness these good, entrepreneurial Canadians must feel as they are forced to declare bankruptcy, largely because, as was pointed out many times today, of unconscionably high interest rates and an increasing lack of sensitivity to free enterprise initiatives in this country.
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Let me point out as an aside, but not entirely unrelated to the question of bankruptcy, that it is an insidious thing that is creeping into our society where government is permitting its own government operations to take over small business. There have been more and more takeovers. I think it can be safely said that the only businesses that are sure to survive in this country are owned by the government and supported by tax dollars.
Earlier today the Minister of Consumer and Corporate Affairs (Mr. Ouellet) asked that members participating in this debate restrict their discussion to legal matters and not get into economics. That is like saying that if you go to Florida these days, you should ignore the sinkholes and just count the number of houses and trees which tumble into them. It is little wonder that the Minister of Consumer and Corporate Affairs does not want to discuss the economy. I must point out to the minister that the number of business bankruptcies were up in the first quarter of 1981 to 2,044, compared to 1,706 in the first quarter of 1980.


Mr. Munro (Esquimalt-Saanich):: That is increased
productivity.


Geoffrey Douglas Scott: The total number of bankruptcies in 1980 was 6,595. Surely we can expect this number to increase in 1981 in light of this government's economic policies, or lack of them.
I want to address a very important issue which several of my colleagues signalled should be discussed when dealing with this legislation. The proposed legislation before us, Bill C-12, grants the first claim on the assets of a bankrupt firm to the secured creditors. These secured creditors take precedence over the wage earners who have lost their jobs through the bankruptcy. This bill maintains the same priority on the claims of wage earners as does the present act.
This aspect of the bill is one which greatly affects many of my people and indeed, many of all our constituents. In these days of more and more bankruptcies, it is a problem we will undoubtedly be hearing more about.
When a company, whether it be large or small, goes bankrupt, the claims of the secured creditor to the firm's assets are to be fulfilled first. If there are any assets left after these claims, then Bill C-12 makes provisions for the wages and commissions of the employees, but only after the secured claims have been dealt with.
Members of this House know that there will be very little, if anything, left to pay the wage earners of the company. The preferred credit status as outlined in section 265(4)(d) of the act almost ensures this inequity. This section sets a maximum of $2,000 in unpaid wages, and an additional $500 for pension plan and other employee benefits. As other speakers have pointed out, there is no question that these provisions must be given careful review by the committee which studies this bill.
I would like to comment on two aspects of this section. It would appear that the average wage earner, should he not be receiving his salary, or choosing not to draw it in the hopes

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that the firm will find a way out of its financial crisis, will be severely penalized for not collecting or demanding his or her wages immediately. There is no incentive for the wage earner to attempt to help the firm through a difficult period.
I would also point out that the maximum amount of wages as outlined in section 265(4)(e) will be quickly outdated in these days of increasing inflation.
The Senate Committee on Banking, Trade and Commerce, studying Bill C-12, received a great number of representations concerning the protection of employees whose employer has gone bankrupt. This committee reported that under Bill C-12, if there are sufficient assets of the bankrupt firm, then the wage earners will not be paid. I quote:
Your committee is of the opinion that this result is unsatisfactory.
They go on to list the three alternative solutions to remedy this problem. This can be found at pages 16:16 and 16:17 of the Senate banking, trade and commerce committee minutes:
1.	The granting to the wage earner of a statutory priority for arrears of wages that would rank in priority to the claims of all secured creditors.
That is called super priority.
2.	The granting to the wage earner of a statutory priority for arrears of wages that would rank in priority to the claims of the secured creditors holding security on the current assets of the bankrupt.
That is modified priority.
Such current assets would consist of cash, temporary investments, inventory and receivables provided that such priority would only extend over receivables which have been created by the supply of goods or services.
3.	The creation of a Wage Earners Protection Fund out of which the claims of employees for unpaid wages would be paid immediately after a bankruptcy has occurred.
Each of these alternatives must be considered in order to determine whether the following objectives are achieved:
A.	Certainty of payment to the wage earner.
B.	Promptness of payment to the wage earner.
C.	Ease and simplicity of administration.
D.	Maintenance of the ability of a borrower to obtain financing for his
business operations.
The committee felt that only the establishment of a wage earners' protection fund would fully protect wage earners in a bankruptcy. The committee suggested that this wage earners' protection fund be financed, as recommended by the Senate committee, by monthly contributions from all employers in the nation. This would mean a nominal amount paid per employee. It would only be required from employers with more than six employees. Technically, at one point during my company's operations that would have applied to me if this provision had been in effect. If an employer went bankrupt, the employee would be entitled to his claim for wages paid out of the fund, whether or not the employer was required to make contributions to the fund. The committee recommended that this type of fund be established in Canada to protect the interests of the wage earner.
1 find a great number of problems with a wage earners' protection fund, but I do believe it deserves serious study. Mind you, any fund would have to be controlled more tightly
than anything we have seen so far. We do not need another Unemployment Insurance Commission. Indeed, if the wild abuses of the UIC were even remotely approached, I would be the first to be scared off this idea of a wage earners' protection fund.
However, I would like to commend the Minister of Consumer and Corporate Affairs for establishing a committee to study wage protection of some kind under the guidance of Mr. Raymond Landry. It is both an admission of the shortcomings of the bill as well as a concern that wage earners should be taken care of. I will be particularly interested in hearing representations and reading the testimony of those appearing before the committee as to why a wage earners' protection fund should be put in place as opposed to the position put forward by the Canadian Institute of Chartered Accountants, which zeroed right in on the fact that the administrative problem in collecting wage funds would be a very great one indeed. Representatives of the Canadian Institute of Chartered Accountants, appearing before the same Senate Standing Committee on Banking, Trade and Commerce, said the following:
-we think it is the secured lenders who should be required to contribute out of their security the amount required to pay the outstanding wages, because the employee's work has gone into enhancing the value of their security, for the most part, and the secured lender is the person best qualified to determine, not only his position but whether or not the company can continue to survive, what its chances are, and when, if it must, be terminated.
There are two distinct and differing points of view, but the important point I want to leave with the House tonight is that the protection of the wage earner should be considered and studied by the kind of committee the minister has recommended.
Let me underline two points which previous speakers touched on this afternoon. The first one is somewhat political. This indeed may be housekeeping legislation, but in the context of today's economy it does seem like band-aid stuff. The government takes advantage of the absence of its two architects of Canada's economic illnesses, the Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. MacEachen), neither of whom have ever had to meet a mortgage payment or face a bankruptcy in their lives, and brings on this debate on bankruptcy legislation after the fact, after the damage has been done to businesses and to individuals because of the economic policies of this government.
That being said, as has also been pointed out, there are many technical provisions in this proposed legislation which are well drafted, well merited and deserve the support of all sides of the House. I do hope that when all 420 clauses of this bankruptcy and insolvency legislation are examined in committee, hon. members once again will safeguard the rights of employees more than they are safeguarded now. Speaking personally, I want to see some action taken to protect those who are abused by sharp operators who intentionally set up or take over a company and then bleed it to death and escape scot-free, *f hon. members will pardon the expression. My colleagues and I will be watching the progress of this bill through the committee with interest on behalf of many thou-
May 19, 1981

sands of Canadians who face the spectre of that awful word "bankruptcy".


Flora Isabel MacDonald: Mr. Speaker, in rising to speak about Bill C-12, respecting bankruptcy and insolvency, I am aware, of course, that there has been a great deal of consultation already in relation to its 420 clauses since its predecessor was first introduced way back in 1975. It is a pretty hefty document and one which indeed merits much consultation and study. However, in looking at the minister's press release which came out when the bankruptcy bill was first tabled in the House of Commons back on April 16, 1980, I note that in the press release it is stated, and I quote:
Mr. Ouellet added that once the bill is enacted, it will establish a comprehensive, workable and, above all, a fair bankruptcy system.
The bankruptcy system this bill seeks to establish may be fair, but there is nothing fair about the way that hundreds of small businessmen and farmers and individuals are being forced into bankruptcy by high interest rates and the high interest rate policy of this government. I look again at the figures, which came to my attention just recently, with regard to bankruptcies in the first quarter of this year. In the first quarter of 1981, there were 75 farm bankruptcies compared with 44 in the first quarter of 1980. There were some 2,044 business bankruptcies in the first quarter of 1981, compared with 1,706 in the first quarter of 1980.
With regard to personal bankruptcies, there were 6,152 in the first quarter of 1981 compared with 5,238 in the first quarter of 1980. In every case-farm bankruptcies, business bankruptcies and personal bankruptcies-the number is up very considerably.
These bankruptcies are not confined to any one sector or any one region of the country. By looking through recent press headlines, we can tell that bankruptcies are spread out across the country and that people are suffering because of bankruptcy everywhere. The headline in the Halifax Chronicle-Herald of April 17 says "Bankruptcy... and the consumer". The headline in the Charlottetown Guardian of March 9 was "Bankruptcies increase". The headline in the Winnipeg Free Press of March 20 was "Bankruptcy liabilities highest in ten years". The headline in The Globe and Mail of March 7 is this: "Alarming rise in bankruptcies viewed as only tip of iceberg". Finally, in the London Free Press of April 23 of this year the headline was: "Farm bankruptcies rise, interest rates blamed". And from today's edition of the Kingston Whig Standard, a newspaper in my own constituency, this is the reaction of small businessmen who are having to face the increasing fear of bankruptcy. It reads as follows:
If there's one thing all business people agree on it's that the high interest situation can't go on indefinitely. They can survive in the shorter term; it's the longer term they fear.
Many businesses are running on such narrow margins that they're only paying the interest on their loans.
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This bodes ill for the future. A business with nothing left over to plough back into the operation will, in a few years, find it has no capital when the need comes to refurbish or to expand.
And one of the businessmen in my constituency says this:
I've never in my life in 30 years in this business seen anything so ridiculous as what we're going through right now.
That is the way that Mac Amey, an American Motors dealer, sums it up. He claims that unless the federal government puts a ceiling on interest rates for small businesses and farmers, he can see 50 per cent of the people out of business within a few years. He also says:
High interest rates and low returns are deterring people from putting their personal money into business.
Nobody, as he puts it, "is going to put his money into a dead horse." Eric Bolton, who runs Boyd and Corkey Furniture and Appliances expresses the same view. He says:
Eventually this (high interest rates) will put us out of business ... You can only find so many corners to cut and then eventually you're at the end of the road.
Now, that is an article which appeared in tonight's edition of the Kingston Whig Standard, and in all of these newspapers all across the country we are reminded over and over again of the interrelationship between bankruptcy and high interest rates. I was interested, Mr. Speaker, in a quotation from The Financial Post of last week in a front page article which reads as follows:
The breathtaking switchabouts in interest rates over recent months, have left so many forecasters beached with wildly wrong predictions, and created so much confusion, that the public is increasingly wary of assertions from economic soothsayers ...
There is indeed wariness, Mr. Speaker, indeed suspicion on the part of the public about the soothsayers who sit on the government benches. The government has been all wrong in its projection in the last budget and ever since, and Canadians are not only wary of what they are doing, they are getting very weary of it as well.
The economic situation in the country, Sir, is chaotic. Interest rates are at an all time high, just under 19 per cent as of today. Rates being charged by the chartered banks are about 20 per cent, and bankruptcies are at an all time high. The government's own Federal Business Development Bank is charging 22 per cent on its loans; inflation is running at just under 13 per cent. Almost one million people are unemployed, no matter how the government boasts of its back-to-work record. We now have to deal with the worst economic situation that Canada has faced in 50 years. But is that, Sir, what the present cabinet ministers said while they sat in opposition? Oh, no, it was then that they boasted that they could cure all the ills of the country. In the Toronto Star of February 10, 1980, the then leader of the opposition, the present Prime Minister (Mr. Trudeau), was quoted as follows:
I would want to manage the economy in such a way that interest rates would in fact come down ... because the economy would be administered in a sounder way.
Well, whatever he may have wanted, Sir, he certainly has not been able to manage it. And then there was the hon. member for Windsor West (Mr. Gray) quoted in The Toronto

May 19, 1981
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Sun of February 4, 1980, and I see him standing just outside the curtains and he may remember this, as having said:
It is my belief we can manage the economy in a way that would allow us to have lower interest rates than we have now and I think we can have greater independence in interest rate policy.
I don't think that allowing the dollar to have some downward adjustment-
I hope the minister is listening.
-would do as much harm to our economy, as our present high level of interest rates.
I wonder if the minister remembers that. I wish he had carried that message to his Minister of Finance (Mr. Mac-Eachen). And again the same minister speaking in the Standing Committee on Finance, Trade and Economic Affairs on October 30, 1979 said this to the then minister of finance:
Mr. Minister-your high interest rate policy-
It was a lot lower than the interest rate is at the present time, but he said:
-will put housing beyond the reach of most middle and lower-income Canadians. It will hurt small business, which depends on bank borrowing to operate. It will hurt farmers, who have the same dependency on bank borrowing and will add, therefore, to the cost of food.
I am sure we can all say amen to that, and I wish the minister were saying those words today. But what he was saying and what others were saying at that time when they were in opposition, Sir, was that a high interest rate policy will lead to bankruptcies all across the country, personal, small business and farm bankruptcies.
Yes, the Liberal opposition was then concerned about high interest rates which were running at about 12 per cent, 13 per cent, 14 per cent and how those rates would lead to an increasing number of bankruptcies. Flowever, once back in office their concern vanished. They could not care less about the root causes of bankruptcies, all they are concerned about is the way in which they were handled. In opposition the Liberal spokesmen promised goods that they could not deliver and they knew they could not deliver, and now they are beginning to be caught out and people are beginning to vent their anger against what the government has done, because you see, Sir, people really do not like being cheated and outsmarted and duped, and eventually made to pay the price.
The government, and particularly the Minister of Finance who some would say has led a charmed political life, is now under attack and he does not like it, and so the government stutters and stumbles and staggers its way through a barrage of criticism of its own making. Yes, they weave and they bob and they duck and they blame the situation on everybody but themselves. We have the minister saying that he cannot control our high interest rates because the American rates are too high. He says he cannot make a dent in inflation because people's expectations are too high. It is the Minister of Finance who is bankrupt as far as any ideas of improving this situation are concerned, and so he turns to hon. members on the other side of the House and pleads with them: Tell me what to do. He forgets that he is the Minister of Finance and that the present Liberal cabinet while in opposition made the fatuous
promise that if the Liberal party were re-elected they would know exactly what do do.
Well, these days, Sir, safely out of sight in the inner sanctum of their departmental buildings, remote from real life, they move from consideration of higher interest rates to consideration of wage and price controls or to a tax based incomes policy. You can do that sort of thing if you are safely secluded in the penthouse of Place Bell Canada, but it shows that the government is bankrupt of ideas, of dollars and of any sense of responsibility.
However, in their distress they cry out for ideas. I offered one to the Minister of Finance the other day, that he set up a human misery index, something like the consumer price index but one which he can read daily so he will be aware of the hardship that he and the Liberal government are causing people. He will not be able to read that index on a beach in Hawaii, in Kuwait or even in Gabon where he is at the present time, but surely he can read it if he goes across the country and talks to small businessmen, farmers, individuals and people on fixed incomes. He will find out then what the human misery index is all about.
The other day we on this side were accused of pretending to be sympathetic to the plight of these people. In the situation which now confronts us, there is certainly no need to pretend. The suffering is there, the hardship is there, the uncertainty and the insecurity are there. With them there is a growing feeling that somehow the economic situation is running completely out of control. Many, many Canadians are beginning to consider their own situations as hopeless.
If that is lurid language, as the Minister of Finance said the other day, let me give him and the government an example. I started to elaborate on this the other night when the clock reached 10 p.m. Last weekend I received a call to visit and talk with two of my friends. They are a husband and wife team who are in the hotel business. I have known them for 15 years. I know how hard-working they are. I know how committed they are to providing their customers with the very best service they can possibly offer. Because of the way they have run their business, it has always been well patronized. Some two years ago they decided to restore their building to its original lines and decor, to go back to the time when it was First built in Kingston 150 years ago. It is a big undertaking, but it is one which will enhance the historical reputation of Kingston.
The decision to restore their building certainly was not taken lightly. They did so after much thought and consultation with their banker, architects and friends. When I went over to see them that afternoon, I found them deep in despondency. I knew the situation was very serious for them. They told me that two years ago they borrowed some $650,000 in order to carry out this restoration. At that time they were paying 12 per cent interest on it. After the latest increase in the government's bank rate, they are now paying 21 per cent; an interest payment of some $3,000 per week.
May 19, 1981

What is so heart-breaking about their case is that they are working harder than ever and they are taking in more money than ever before, but when they put their weekly deposit into the bank, $3,000 is immediately grabbed off to pay interest rates. They have only enough left over to meet the salaries of their staff. Their cheques for supplies are being turned back. Their payment of $5,000 to Revenue Canada was returned the other day marked "NSF". To add insult to injury, government officials had slapped a $300 penalty charge on that cheque for non-payment. The reason they could not pay it in the first place was because of that same government's high interest rates.
This couple has always done everything on their own, as have so many other small businessmen across the country who make up the very backbone of our economy, and they end up being forced into bankruptcy. They applied for a small business development bond some five months ago, and it still has not been processed. So, they have to continue paying high interest rates week after week after week. Now they find themselves on the verge of despair, not knowing when they will be forced out of business, not knowing how to break the news to their 40 employees that they may no longer have jobs. That couple is but one facing a very bleak future.
I can cite another example of a small businessman who combines running a small business with a farm operation. His small business is in the farm industry sector which means he must stock up in inventory of farm machinery. As everyone knows, he must borrow against that inventory. That is normal, that is usual. But also, as most people know, the farm machinery business is slow. Its pace has become very slow. Anyone who has been following the trials and tribulations of Massey-Ferguson is aware of that, but the difference between Massey-Ferguson and the farmers and small businessmen in this country is that the government steps in to help out Massey-Ferguson massively. But, there is no help for the farmer or small businessman caught in the same situation. This man of whom I am speaking is now liable to have all or part of his farm seized to pay for the farm machinery loan. This farm has been in his family for generations. He too is feeling an overwhelming sense of despair and hopelessness. He would have a high rating on the human misery index.
What am I supposed to tell these people when they come to me for advice. Am I supposed to tell them to hold on for a few more weeks or months, absorb the increase? With what? Am I supposed to tell them what the Parliamentary Secretary to the Deputy Prime Minister and Minister of Finance (Mr. Evans) told the House last week? He said:
The fundamental factor involved in this high interest rate condition is the transition through which we are going toward a more appropriate monetary policy for a lower inflation rate in the future.
In that barrage of words which add up to nothing what am I to tell my constituents who are losing their businesses and family farms? That kind of thing just does not register on the human misery index; that kind of gobbledygook just does not wash with Canadians who are suffering. I challenge the Parliamentary Secretary to the Minister of Finance to use that line
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on any one of his constituents to see if it calms their fears about the future.
Fear for the future is very real among Canadians, especially those who are the hardest hit by the interest rate-inflation spiral in which we are now. As high interest rates fuel inflation instead of bringing it down, as the minister projected, it becomes more and more difficult for those on fixed and low incomes to keep food on the table.
The problem will get worse before it gets better. Even the governor of the Bank of Canada has acknowledged things will only get worse, when he said last week that the disease the country has contracted is not just a high inflation but escalating inflation. Does the government not realize what escalating inflation really means, apart from adding decimal points to our cost of living figures? Does the minister not realize what it means when prices for essential goods and essential foods have skyrocketed since interest rates started spiralling? I have mentioned before how basic food staples have gone up and up and up in the last year. All of these items, as they go up, add to a grocery bill which more and more people cannot afford. Many of them are being forced into personal bankruptcy because of the high interest rates. So we are caught in a vicious circle with inflation fueling high interest rates and, in turn, high interest rates fueling inflation. As the circle tightens, the small businessman and the consumer are strangled in the middle. The number of bankruptcies might be high now but I can assure you, Mr. Speaker, that the number will grow before it diminishes if the government's present policies continue.
We need good bankruptcy laws; but more than that we need to stop the cause of bankruptcy. More than anything else we need preventive medicine, which means an interest rate policy that does not crush the small businessman before he has a chance to carry out his business. If we do not do something to attack the root of the problem, then this bill which we are considering will end up being the same kind of after-the-fact band-aid measure which the Liberal government has had to use over and over again to try to patch up a mess of its own creation. Bankruptcies are there because they have a cause. In Canada, many of these bankruptcies are being, and will continue to be, caused by the irresponsible monetary and fiscal policies of the government.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, I intend to carry along on the basis of the principle and philosophy behind bankruptcy legislation, following the closing remarks of the hon. member for Kingston and the islands (Miss MacDonald). I think all members of this House recognize that legislation covering bankruptcy is a federal measure which has been in need of reform for at least 15 years or longer. Great efforts have been made in the House, as well as in the other place, to come to a practical way of handling this necessary business adjustment, both in the personal profits of people as well as commercial operations. But we should also keep in mind, with regard to the question of debt, that the

May 19, 1981
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provinces have a long experience in this type of matter. I would like to mention a couple of items which need no explanation. They are well understood.
I am talking about the mechanic's lien act, in which the working man always receives first right in the case of any kind of debt not paid. This applies in all the western provinces. I am talking about threshermen's liens, which in the east are called subcontractors' liens, where the worker has preference over federal legislation and everyone else, including banks. Naturally, as I look at this bill, I search for this same kind of protection. There has been some forward motion in this regard, but the man who produces the wealth, the labouring man and the subcontractor, is still not placed in the highest priority position, where he should be.
1 hope that in committee there will be some amendments which give equality of right to the working man who produces the wealth, as well as to the subcontractor who organizes the various streams of operations which go into the production of goods. I will not spend a great deal of time on this aspect, since it is indicative of the fact that this legislation is necessary. It can be improved. This is where the common sense and experience of members of Parliament close to their constituents can be very helpful.
I would like to go on to the history of one incident which struck me many years ago. We have had great collapses in parts of Canada on previous occasions. There is no one in this House who remembers the collapse of 1919 when farmers simply went bankrupt holus-bolus, banks closed down and refused to give credit to farmers because of the disastrous drop in prices after the Kaiser war. The second major experience which we have had in our history on this matter of credit delinquency occurred in the 1930s. Once again Parliament came through with fairly sensible legislation, the 1933 Farmers' Creditors Arrangement Act. This was a hallmark in social philosophy applied to a financial situation. It is no wonder that this was legislation drafted by westerners, but it was accepted by Parliament. Under the legislation, creditors and debtors would sit down with a government representative working under the Farmers' Creditors Arrangement Act and look at the potential and real value of a farm. The first step was to scale down the debts to that potential, making it possible, with the expected hypothetical earnings, for that farmer to continue farming without going into bankruptcy. That legislation, which was extremely acceptable and well received by everyone, including the banks, enabled them to collect the money owed by the farmer and allowed the farmer to hang on to his farm. As far as the banks were concerned, it saved them cutting of their noses to spite their faces.
The second measure taken by Parliament was in 1934 when amendments were passed to the farm loans legislation which accompanied the Farmers' Creditors Arrangement Act. In some cases the farmer could borrow money at low rates of interest, which were then the economic rates, to pay off certain types of debtors who could not, for their human and social interests, take their money over long extended periods. I mention these two items to remind the House that this situation, which was so vividly described by the hon. member for Kingston and the Islands is not a new phenomenon. Past parliaments have coped with these problems in a practical and sensible way. Not everything was solved, but at least the tremendously dangerous effects that we all foresee with this high interest rate policy were cushioned.
I will not make my remarks purely partisan. I will try to be constructive in putting forward some proposals which I think are within the structure of the government to meet and which, at the same time, will not entail any subsidy by the government from the people it is trying to help. Let us learn from the experience of previous parliaments which had to grapple with a similar situation. As we know today from quantitative analysis, in heavily capitalized industries-and many of our industries fall within that category-the biggest single cost over an extended period of time is the amount of money which goes to interest. These are called capital intensive industries. For the very large industries with long pay-outs, 75 per cent of the total costs are due to capital repayments and interest charges. The average figure for the oil industry in Alberta from 1922 until 1957 was 75 per cent. Oil prices were low at that time, as were costs, and the industries were still able to make out because even at $1.50 at the wellhead, the costs of actual out-of-pocket money were only about 25 cents per barrel. The interest costs were around a dollar. The industry survived. It had to pay a little more money in royalties to the provincial governments and money in taxes to the federal government.
As a statistic, 75 per cent is frightening. But if you thought it was frightening from 1922 to 1957, just take a look at the costs today. When you add on the interest rates of today, suddenly there is disaster. What can we do in the long term loan pay-off situations with a high proportion going to interest rates? Let us take a very modest situation today. A home mortgage of $50,000 at an interest rate of 10 per cent-which you will never get-over a 30-year period, which was common ten years ago, would result in the home costing $202,000 if it were paid off over the 30-year period. So, $152,000 of that $202,000 was interest and only $50,000 was capital repayment.
My point is very clear. One can visualize it by buying one's home. Then apply it to a farmer. When a farmer goes out to expand his production, he finds that the latest rig in many of the farms in the east and west are these new modern harvest systems where the feed is handled in one monstrous system. These things cost about $250,000 to $400,000. The farmer no longer borrows $3,000 or $5,000, or sums like that. He knows that if he puts that $250,000 into that type of investment, it will increase his income by about $50,000 to $60,000 a year, that is, 20 per cent to 22 per cent. With that type of potential return, he can afford to borrow money at 6 per cent, 8 per cent or 10 per cent. I am going to use the figure of 8 per cent in this explanation to keep it constant. Eight per cent would mean that he would be paying $20,000 a year; but because he would have enough left over, he could pay off that $250,000 in eight
May 19, 1981

to ten years. Then he would have interest and capital payments together. He would then have the use of that equipment for 15 to 20 years, with a return of $50,000 or $60,000 a year, which would be very useful to him, and he could go ahead.
However, if the interest rates were to rise to 20 per cent, which they have, 20 per cent of $250,000 is $50,000 a year. The interest rates alone then match his increased income. He will never pay off his capital costs and he will have nothing left over for depreciation, repairs and maintenance. So obviously it is a "no go" situation. Any farmer who is foolish enough to take out a loan at 20 per cent on a productive type of enterprise like that with the hypothetical cash flow that I have described, is going into clear bankruptcy, I would say, in three or four years, before all his creditors close in on him.
Here there is a situation where the cause, as the hon. member for Kingston and the Islands said, is the key issue. Bankruptcy is a legal technique of trying to make adjustments in credit indebtedness. However, here we have a government policy in the interests of a theory that has been proved, quantitatively, over 10, 20 years, to be wrong. Interest techniques are still being used as an interest of monetary policy when we can show, quantitatively that it does not work. That does not mean that all monetary theory is flying away. It simply has a little bit of interest, and we do not know how much, but it has some. We are willing to listen to thoughtful proposals from the bank governor about how far we should go in using this. But we should not use the interest rate component as a technique of using the monetary policy.
When the committee of finance met with the bank governor, I asked him three questions on this subject. In each case he said that he did not have any evidence that the three reasons he gave for having this high interest rate policy were working. He knew that I was sitting there with the figures I obtained from his own shop showing just the opposite to be true. He could do nothing else but agree with me. He agreed to sit and listen to practical proposals from ordinary members of Parliament at how he could get around this.
Tonight is not the night, under this act or bill, to talk about monetary theory. I want to talk about those matters which deal with government policy, the fiscal side, that do have some chance of drastically reducing the number of bankruptcies.
These suggestions I am putting forward are not new. The philosophy is based on things that I have learned from watching events in the last 20 or 30 years and seeing those things work and from looking at other countries where they have worked. I have four proposals which are really proposals for lower interest rates on the fiscal side, and would not in any form take away ownership or attempt to subsidize. I would like to put forward a rational proposal under which one divides the costs at a fixed interest rate, the interest either going to the lender or the equity going to the company.
These four proposals are based on this principle. Massey-Ferguson let itself borrow to such a degree that the interest on its borrowings was greater than its income. This proud private company had to struggle mightily this last year or so, even to bending its knees and asking the government for help. It
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begged the banks for help. It made a tremendous shift from a small equity portfolio of 18 million to 20 million shares up to about 220 million shares. It required a tremendous dilution of equity to get enough money to pay off part of that debt and to reduce its interest payment to a point where it could begin to have more income than the interest payments so it could pay off more of the capital or principal.
This thinking could be applied to all companies that use inventory based on loans. General Motors, Chrysler, and Ford are all going to go down the skids unless they adapt and do what Massey-Ferguson has done. The handwriting on the wall is clear for these large companies which followed the custom in the last 20 or 30 years of using the interest rate approach to give them leverage, to make money, using someone else's money at a lower cost than the income they will get. When interest rates rise beyond a certain point, that leverage is gone and instead it becomes the ruination of the whole financial structure.
I am going to make these four proposals one at a time in the hope that government members particularly will carry back to their committees-whether they be on agriculture, small business, trade, export-how this can be done, with the assurance that other people are succeeding in this technique and are actively going on to expand and carry out business. They can get away from this high interest rate threat which is imposed on us by theoretical approaches to the monetary system of keeping inflation down.
The first proposal, obviously coming from me, deals with farm credit. During the Diefenbaker administration, we tried to modernize farm credit by setting up the Farm Credit Corporation with great flexibility in the form of lending and repayment. To my sadness and regret, these techniques were not used too much because both the lenders, who were used to the old farm loan act, and the borrowers, who were used to the same type of lending on assets rather than on financial income, followed the old system. Because of that, they do not realize that in the legislation which allows us this flexibility one does not have to change the act to do what I am proposing. It is sufficient simply for the minister in charge of the Farm Credit Corporation, who is supposed to be the Minister of Agriculture (Mr. Whelan), but I really do not know who is in charge, to use his initiative. He could go out and say that the type of interest rate we are now charging under the Farm Credit Corporation will destroy every farmer who uses it and destroy the act, and that is not the purpose of that act. He could say there is a proposal which will work, there is lots of evidence one can get that it does work, and that is it. One could simply tell a man on farm credit to come to the farm credit supervisor-and there are many scattered over the whole of Canada, well skilled in the costs of input going into farm production, well skilled in knowing the prices and returns-and put a hypothetical cash flow chart in front of him. With this type of investment we can demonstrate how much income he needs each year and how much he can afford to pay in interest and capital and still have something left.

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An 8 per cent interest on a $250,000 loan will come to about $20,000 per year. The farmer will have enough left over to pay that interest and a big chunk of the capital each year. He can see the debt being paid off in eight or ten years. To get that kind of money without a subsidy requires a sweetener, and "sweetener" is the right word. We must hold this out to the lender, in this case the Farm Credit Corporation which has looked at the hypothetical cash flow and the corporation then agrees on a percentage that is paid off after the debt, a percentage of that new profit, not the old profit, on this new investment yielding a new return of $50,000 to $60,000 per year. The Farm Credit Corporation might put down the figure of 5 per cent; 5 per cent of $50,000 is $2,500 per year and 10 per cent would be $5,000 per year. If the farmer is getting, with all his debt and interest paid off, say, 10 per cent and is turning this over to the Farm Credit Corporation, even though he has paid them back the capital, he thinks, "I can easily afford $5,000 or $6,000 per year for the next ten or 15 years." He finds that for five or ten years, with the total amount of money received and the total amount invested-remember the money has been returned and the Farm Credit Corporation has already reinvested it-that could be a point where there is no subsidy, and at the same time you have not put that burden of front-end loading on the farmer, the burden of paying from the very beginning. You take the earnings half out of fixed cost or 8 per cent, and the balance after he has finished paying his debt for the period of the useful life expectancy of the equipment, that is 15 or 20 years at, say, 10 per cent. If you work out the mathematics and try them out at various rates, you will get a rate and a time period within which both sides are treated fairly. The Farm Credit Corporation will show no loss after a few years and the farmer will be way ahead of the game.
When you have a deal that is mutually beneficial to both parties, it is a good deal. When you have a deal where one side is always the winner, you can guess who the loser will always be in debt-credit relationships.
I put this forward in this House again in all seriousness, hoping it will get through to the farmers that an idea has been proposed that will remove the tremendous fear of the future that weighs on them like a ten-ton load. Instead of seeing all that they have fought for and built up over two or three generations being taken away because of high interest rates, they can see a way through where there is no subsidy from the public treasury over the long period but where there is an increase of wealth and productivity, which means more people are working and more taxes are coming in for the government.
The second proposal is roughly the same, and it is for small business development. Just like the Farm Credit Corporation, we have a business institution in the Bank of Canada which deals with small business loans. The idea of the Small Business Development Bond was put forward in the Crosbie budget. It was turned down in the MacEachen budget but was restored, as we all know. We are very grateful that members on the other side listened and restored it, even if it is only to the end
of this year. But we hope that it can be extended for another few years.
The same principle would apply as I suggested should be applied to the farmers. A small businessman can bring before the authorities a hypothetical cash flow which shows that if he borrows $500,000 and puts it to work, he can produce $60,000, $80,000, or $90,000 of revenue per year. If he is building on to something that he has already, this is quite possible. The same mathematics apply to determine what interest rate can be charged to make sure that he pays it back quickly.
I know of five or six instances in my riding where businessmen are choosing this route over the route followed by the small business development bond. The bond was not a bad idea, but this one is even better as we consider its implications. There is no loss of ownership. I am thinking of the areas of expansion in Manitoba and Saskatchewan around the potash mines and the uranium mines and the development of the cities of Saskatoon and Regina. In those cities the small businessmen who supply the mines employ the larger work force than do the mines. We need this type of thing to keep our development going; to get something going that we can sell and make money on; to employ more people and to provide more taxes. The Minister of Finance (Mr. MacEachen) should be very happy. No subsidy would be called for but new money would be coming in. It would reduce costs, bring in more revenue to the government and help balance the budget for these various proposals.
The third proposal is for export companies. This Parliament has been busy trying to figure out some way to build machinery to help the export industry. We have been thinking about legislating an international trading company run by the government. Quite frankly, I am very dubious that this is the best way to go. I think the better way would be to make it a sort of financial operation. Money for that long lead time that export companies need before they get a cash flow could be provided at a low interest rate and a big share could be taken as the sweetner. In other words, defer the take until the money comes back because there is no industry in the world at the present time that yields higher returns than the export business. A return of 25 per cent or 30 per cent is quite usual, but there is a delay factor involved. It is during this delay, which is necessary for building up the business and before the money comes in, that they have to be financed. Canadians are very good at this. We have the technical know-how; we take it with us; we teach and practise, but we make money out of it at the same time. I think that if export companies had access to a low interest rate or even a large proportion of shares for the government, then using the share approach of equity or by the sweetener approach plus a loan, by using the same hypothetical cash flow approach that I used in the case of small business and farmers, a great deal could be done to increase the wealth, not only of Canada but of all the nations we work with. Trade is beneficial to both sides. This should have the highest priority in terms of a worldwide sense of responsibility. I have watched what is being done in France, Germany, the United Kingdom, the United States and Japan using these principles.
May 19, 1981

I would think that we are smart enough to do this too. These enterprising businessmen who take an awful beating over the two or three-year loss period in order to get their business going, would be glad to share 25 per cent or 30 per cent of their business profits when they come, if they knew they were getting this money at a low rate of interest. The federal government has the machinery in the export legislation to do this.
The next proposal affects more people, and that is the matter of homes. I think the social revolution of the last 50 years has definitely included homes as a social need and a social necessity-not only health care, but homes. I believe all parties have accepted that homes are a part of the quality of life, of mental security, raising a family and all the rest of it. I think we should apply this same reasoning to a home. However, a home is slightly different. This proposal 1 want to put forward now is not new or original, it was made by leading businessmen. It lacks one thing, as hon. members will soon realize.
If you want to encourage young people to marry and live in a single dwelling so as to get away from the mental health problem associated with high rises and crowded ghettos, I would think money should be put out at about 6 per cent. You say to people that the government is part owner with you. In other words, the individuals own the home but the government has an interest because the government is lending the money at 6 per cent. However, if the individual sells the house in ten years, making a big capital gain in return for having that money at 6 per cent, the capital gain is shared 50-50 with the government.
Let me cite some statistics. Over the last 20 years, how long have people stayed in the same homes in the new industrial urban centres? It is not very long, there are even people making a living out of buying and selling homes, and living on their capital gains. There are ordinary individuals who buy homes, sell them and repeat the process. People have found out that this is one way to keep ahead of inflation. I am saying that in trying to help all the people a 6 per cent charge could be put on loans by the Canada Mortgage and Housing Corporation. This corporation is a very efficient agency. We would say to them that by living in their homes for longer than ten years, they could make these homes their own. The stipulation could be that the money has to be paid back very quickly, as quickly as possible, in order to reduce the subsidy. But if this money was repaid within ten years, then half of the capital gain must accrue to the government. If that situation were put onto a hypothetical cash flow chart for the whole industry, you would find that the government-Canada Mortgage and Housing in this case-would make much more money from a 6 per cent charge plus the capital gains than it would ever make charging 15 per cent interest. A person making a big capital gain can afford to pay that a lot easier than he can afford to pay a 15 per cent or an 18 per cent mortgage. Paying these high interest rates is killing. It is front-end loading for 20 years of a person's life. The insecurity and the fear which comes
Bankruptcy
from that heavy mortgage and its high interest rate is not good for the mental health of Canadians.
To the persons who have not heard those four proposals before they may sound a little unique. But every one of them is based on old-fashioned principles of borrowing and lending. The principle of sharing in the profit from a common investment goes back long before the time of Christ. There is a human side to this which is very important to our modern industrial society.
In these proposals, export companies, small business and farm credit, big sectors of our economy, could be getting money at 8 per cent or whatever rate is decided, and money could be lent for housing at 6 per cent. There is no subsidy, and when you think of the things that are happening with expansion, you will see that the big winner in the whole thing is not the individual from whom you have taken away fear, having added tremendously to his income, it is the government because the individual is now paying more taxes with his big income. This would make the Minister of Finance and all the civil servants who think of nothing else but getting more money happy. I would think acceptance of this proposal would be found among the civil servants who must be concerned about what is happening to the country, and among the politicians who have some desire to come back here again.
If this interest rate question is not settled, it will not be just western Canada that will move, but the whole country. Not only will the farmers of Quebec and Ontario be rallying behind us, but the small businessmen from Newfoundland to British Columbia to the Yukon. The Liberal government is facing political disaster of the kind that will take the Liberal party, if it does not listen, out of existence for 50 years. It is not that I would not mind that happening, but in the interests of the country the government must start to think about the needs of the people.


Mr. Huntington:: Think, not study.


Francis Alvin George Hamilton: You do not
sit in the House and applaud when hon. members make statements that people are better off today. The first thing taught in politics is that you never tell anyone he is better off. A politician has only one function, and that is to remind everyone that the poor guy is not making out so well. That is the first political rule. But to go out and say that the farmers are making so much money that they do not mind paying these interest rates or that people are so well off that, as we heard the Prime Minister (Mr. Trudeau) say, their income is up 52 per cent, is political immaturity of the highest order. It is not the sign of a competent national politician who should be sitting in this House.
I say to the government, for heavens sake, if you can get either a proposal or a series of proposals on which there is no subsidy but, by an analysis of these hypothetical cash flows, you head off all these bankruptcies, create more productivity, more money for the tax collector, a balanced budget, more employment, and reduce social costs, then I would think that all these tweedledum and tweedledee arguments that we have

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Adjournment Debate
been hearing in this House the past week should be forgotten. As a Canadian I certainly do not want to see or hear people who are professional politicians applauding when someone says that people are so well off they can afford these interest rates. First, it is naivete of the highest order and second, it is not true.
I would think that without saying any more, I have done what I could under the principles of this bill to head off the cause of these bankruptcies by putting these proposals forward. They can be acted on with existing legislation, and as long as you have the will to make sure ministers pass on these proposals to the civil servants, there would not be any opposition from them because they know what the people of Canada are thinking. We do not want to see a repeat of early history. After World War I, in 1919, people from the rural areas of Canada rose up with might and main and threw every Liberal and Conservative out of every seat they could and brought the progressive movement here. They settled the situation. They simply saw to it that the Bank Act had limited interest rate to 6 per cent. We have now got rid of that limit in the Bank Act on the promise that the banks would reduce interest rates. Now, by Jove, we had better get busy and save our own skins by coming up with some positive ideas and putting them into effect.


Mr. Nelson A. Riis (Kamloops-Shuswap):: Mr. Speaker, it is a privilege for me to have the opportunity to rise tonight to comment on Bill C-12, an act respecting bankruptcy and insolvency. I suspect, by looking at the clock and seeing what time it is, that it would be appropriate to call it ten o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Ramon John Hnatyshyn: Mr. Speaker, 1 rise this evening in connection with questions I have been raising on the floor of the House of Commons in concert with my colleagues, relating to the attempt on the part of the government to interfere in a political way with the operation of the Canada Development Corporation. We raised this question on a number of occasions. We were met with evasiveness and an attempt to circumvent the question on the part of the Minister of Finance (Mr. MacEachen) who professed ignorance of the point we were making. At the same time that he was professing ignorance in this House, at which he is so adept in terms of parliamentary debate, he was being undercut by the Prime Minister (Mr. Trudeau) in Calgary who at the same time
admitted quite candidly that a direct attempt was made to influence the selection of a new chairman of the board of directors. The Prime Minister admitted that the government did want their very good friend, Mr. Maurice Strong, to be the chairman of the board of directors of the Canada Development Corporation.
It subsequently developed and was learned that the government was not only satisfied with trying to promote Mr. Strong, a friend of the Liberal party and confidant of this government, the Prime Minister and his staff, for the top position in the Canada Development Corporation, but they were more ambitious than to simply want Mr. Strong as the chairman. They wanted to intrude into the board of directors a number of prominent Liberals, including Mr. William Mingo, from Atlantic Canada, who is active in Liberal party circles, and Mr. Paul Martin Jr., son of a former Liberal cabinet minister and leader of the government in the Senate, former high commissioner to the United Kingdom and a well known Liberal.
It is important to understand the consequences of exactly what is happening as a result of the government's heavy-handed, ham-handed attempt to harass each of the existing directors with regard to the government's wish to garner control of the board of directors of CDC. It is no secret that they have contacted each of the directors, putting pressure on them in a number of ways to convince them that they would be well advised to have certain people in certain positions on the board of directors, indeed to have certain members added to the board of directors.
This is quite contrary to the spirit and, in fact, the letter of the law passed by this Parliament creating the Canada Development Corporation. I went back into the record. 1 thought it would be appropriate at this time to review exactly what was said at the time the bill setting up the Canada Development Corporation was before the House of Commons. The then minister of finance who introduced and brought the bill before the House made a number of germane and pertinent statements with regard to the role of the CDC and the provisions of the bill. I quote from page 3639 of Hansard for February 22, 1971 where Mr. Benson stated:
But the CDC will also pursue profits, a word that apparently dismays the New Democrats, and the CDC will operate free of pressure by departments of the federal government . ..
The high quality of the board and the chief executive officer will ensure the corporation of the degree of independence in its operations which it will require to carry out its objectives effectively.
I underline the word "independence" which apparently now is not part of the government's thinking in terms of this corporation. I am glad to see the parliamentary secretary to the present minister here because his predecessor in that position, Pat Mahoney, whom he will recall, also spoke in that debate. On June 4, 1971, as reported at page 6391 of Hansard, speaking with respect to governmnent policy and government intentions regarding this legislation, he said:
May 19, 1981

Some critics of the CDC concept believe that any government participation in the corporation will be synonymous with interference in its operation. The best protection against such interference is a strong and independent board of directors chosen from the private sector. The bill explicitly contemplates their independence. I am confident that as soon as the CDC is incorporated a strong board will be readily formed and will assert its independence.
The word "independence" keeps coming up over and over again in the course of the debate. He went on to make reference to the fact that there had been some suggestion that the Canada Development Corporation could have some of the similar down sides and pitfalls experienced by the General Investment Corporation of Quebec. He pointed out that in the case of the General Investment Corporation of Quebec there was a situation in which investments were made by that corporation for what were regarded as national or social priorities in the province of Quebec. He said that the experience of that institution was one of the reasons why the Canada Development Corporation would be placed in the hands of a very independent board of directors and that when social or political objectives intervene in business decisions, business judgment suffers. I do not think anything could be clearer in terms of the government's position when the Canada Development Corporation was established. There was to be no room at all for any political interference with respect to the operation of that body, but now, without the benefit of a change in the legislation, without any attempt to change the act itself and by virtue of attempting to control the board of directors, the government is attempting to change the direction in which that corporation is going.
The Minister of Industry, Trade and Commerce (Mr. Gray) has been critical of the corporation. The Prime Minister has been critical. I could quote statements made over the course of the last few months in which they have indicated that they want to change the Canada Development Corporation to make it the same kind of corporation as Petro-Canada. There has been a very substantial loss in the value of those shares. Canadian citizens, having invested money in good faith, are now finding that their investment is being prejudiced by the action of the government. I would like to hear the parliamentary secretary respond to this question.


John Leslie Evans: Mr. Speaker, questions have been raised in the House concerning the role and responsibilities of the Canada Development Corporation and its relationship to the Government of Canada. The Minister of Finance (Mr. MacEachen) indicated rather clearly to the House in response to questions the principal factors which govern this relationship and which derive from the legislative mandate of the corporation.
Hon. members will recall that the CDC was established by a special act of Parliament in 1971 with a mandate expressed in the purpose and objectives of the corporation.
As stated in section 2 of the CDC Act:
The purpose of this act is to establish a corporation that will help develop and maintain strong Canadian-controlled and managed corporations in the private
Adjournment Debate
sector of the economy and will give Canadians greater opportunities to invest and participate in the economic development of Canada.
The corporate form established pursuant to the act provides for an investment company with responsibility for investment decision-making and managerial functions assigned to the corporation.
Hon. members will be aware that the successful investment activities of the CDC during the 1970s have led to a situation where the corporation is now a relatively large-scale holding company with a significant presence and developmental role in a variety of sectors of the Canadian economy. While the Government of Canada continues to be the largest single shareholder, the level of non-government ownership has substantially increased. The fact remains that the CDC continues to operate under the federal statute, and, as the Minister of Finance noted in the House, "The investment decisions of the corporation are still the responsibility of the corporation".
The corporate form adopted pursuant to the CDC Act provides for the affairs of the corporation to be entrusted to the board of directors and officers of the corporation who are accountable to the shareholders as a whole, both the public shareholder and the private shareholders. The act requires that the objects of the company shall be carried out in anticipation of profit and in the best interests of the shareholders as a whole. I should add that the act explicitly places responsibility for the election of a chairman of the board with the directors of the corporation.
In short, the nature of the relationship between the government and the CDC has been established by, and is subject to, legislation of the Parliament of Canada. The success of the initiative taken by the government in establishing the CDC is a matter of record. It has given Canadians greater opportunities to invest and participate in the economic development of Canada, and the government's confidence in the corporation has been shared by the large number of individual Canadians who have acquired shares in the CDC.


METRIC CONVERSION-(A) MINISTER'S RESPONSIBILITIES TO SMALL BUSINESS. (B) REQUEST FOR REPEAL OF ENFORCEMENT ORDER
William Henry (Bill) Domm: Mr. Speaker, I rise as a result of an answer received in the House of Commons on April 13 of this year, as reported at pages 9198 and 9199 of Hansard. The question asked of the Minister of State for Small Businesses and Tourism (Mr. Lapointe) was this:
Would the minister responsible for small business advise this House whether he will or will not speak for small business, and address the concern of small business about forced metric conversion in Canada?
The minister responded in part:
As for me, I am convinced that I speak also for Canadian small businesses, and my contacts in the small business sector do not lead me to the same conclusions as the hon. member.
Obviously, Mr. Speaker, the Minister of State for Small Businesses and Tourism is not aware of what is going on in the small business sector. As reported in the Peterborough Examiner of May 11, 1981:

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Adjournment Debate
If the government goes ahead with the legislation, it will be against the will of the public.
That is the statement of the president of the Canadian Federation of Retail Grocers who surveyed 4,000 independent grocers in Canada and found that 85 per cent were opposed to forced metric conversion at this time in the retail food sector. The reason for this is the fact that the United States has now decided not to proceed with metric conversion in their retail food sector for at least ten years and perhaps never, and in Britain they have abolished the metric commission and have gone back to pints and quarts and miles per hour and Fahrenheit and pounds of meat when you purchase it at the store.
The minister is not speaking for either consumers or the independent grocers. Further, as reported in the Ottawa Citizen of Saturday, May 9, 1981:
Retailers on the Metric Commission's own working group on retail scales are upset about a government plan to introduce metric weights in food stores starting next January.
That is January 28, Mr. Speaker. The article goes on:
The group represents the views of retailers responsible for about 85 per cent of food sales in Canada ...
At a meeting of the group in Vancouver April 28, a "consensus" was reached that food retailers in the group strongly recommend a delay in metric conversion.
They recommended that the conversion should take place closer to the time the United States makes the switch. At present, the U.S. has no plans to go metric in the sale of food by weight.
To date the following organizations have condemned the costly and unjustified program to convert the food stores to metric in Canada: the Canadian Federation of Retailer Grocers, the Canadian Organization of Small Business; the Retail Council of Canada; Loblaws Companies Ltd; the Oshawa Group; Cooper Market Incorporated; the Independent Grocers' Association and Loeb Limited of Ottawa, to name but a few.
Thousands of letters of protest from concerned citizens, responding to the opportunity afforded them in The Canada Gazette where they had 60 days to make representations with regard to the order in council, have inundated the desks of the Minister of State for Small Businesses and Tourism, the Minister of Industry, Trade and Commerce (Mr. Gray) and the Minister of Consumer and Corporate Affairs (Mr. Ouel-let), all stating very definitely that they do not wish to go metric at this time in the retail food sector.
The cost of conversion in the food stores will be astronomical and far in excess of any benefits that might result if in fact there are any benefits. According to the government's own 1974 study on the question, there are over 116,000 separate food scales that must be converted in Canada. The average conversion cost is $5,000, therefore the total cost for Canada will be in the region of $564 million to purchase metric weigh scales manufactured in foreign countries by multinational companies, and not one of those imported weigh scales is creating jobs here in Canada.
The metric advisory board in the United States made its recommendations ten years before the implementation of
metric in the retail food sector. The United States Congress listened and decided to defer metric in the retail food sector for at least ten years and maybe never. In 1980, Canadians imported $ 1.78-million worth of imperial weighed food from the United States, our major trading partner in fruit, vegetables, fish and meat. Not one pound or one ounce of that product was imported from the United States in metric.
Our next largest trading partner is Britain, with 16 per cent of our food products. Britain has abandoned its metric program as counterproductive, confusing and a waste of tax dollars. According to the 1970 Canadian government white paper on metric conversion prepared by the present Minister of Transport (Mr. Pepin), the whole spirit of conversion in Canada was to be voluntary. Why then is the retail food sector being victimized by the threat of fines of up to $5,000 and jail terms of up to two years for non-compliance, for simply publishing the price in imperial or carrying on trade in a measurement system which is perfectly familiar to our citizens?
In light of the foregoing which clearly indicates where the minister's duty should lie in responding accurately to the wishes of both the business sectors and the citizens of Canada, will the minister report to the House as soon as possible, because a six-month lead time is required for conversion by the food sector in order to implement metric in the retail food sector, on the results of his having looked into the possibility of this ill-advised program as he promised in the House of Commons? Will he finally admit that metric conversion is still ill-advised, counterproductive, hopelessly expensive, totally inconvenient and utterly against the wishes of the people of Canada?


Mr. Ralph Ferguson (Parliamentary Secretary to Minister of State (Small Businesses and Tourism)):: Mr. Speaker, the minister said in the House on April 13 that the Canadian small business sector benefits from metric conversion in Canada. This statement was based not only on statistical data but on direct accounts from small business people and organizations such as the Canadian Chamber of Commerce which represents all kinds of businesses, large and small.
First of all, I would like to point out that shopping habits will not change drastically when retail scales are converted to weighing in grams and kilograms. When consumers buy by sight, as they often do when they select a store wrapped roast, that fish or four pork chops, they will continue to shop exactly as they shopped before. The only change is when they actually order a specific quantity in grams or kilograms. A great deal of information is already available to help us adjust to ordering by kilogram. There are posters illustrating normal buying quantities in metric units, such as "a 500-gram steak for two".


Mr. Kempling:: Have you ever gone into a restaurant and ordered a 500-gram steak for two?


Ralph Ferguson: These posters are displayed in stores. There will also be posters and pamphlets comparing price per pound
May 19, 1981

with price per kilogram. During the transition period, prices per pound, as well as per kilogram or per 100-gram, will be shown both on in-store signs and in newspaper ads. This will permit shoppers to assure themselves that they are getting the same value for their money, whether priced by the pound or by the kilogram. Retailers can continue this practice until the end of the conversion period.
In a 1979-1980 review, the Canadian Chamber of Commerce explicitly stated that any move to halt or curtail the change to metric measurement in Canada will be "retrograde and excessively wasteful of the many resources from both the public and private sectors that have been devoted to the conversion process". Many companies have provided Metric Commission Canada with details of their increased productivity and market penetration as a direct result of metric conversion.


Some hon. Members:: Name one.


Ralph Ferguson: A small company in Manitoba which contracts, processes and markets dry peas and other speciality crops is an example of a company which has gone metric. Albert Roy, owner of the company, said that conversion to metric has helped maintain good relations with important customers and to keep large accounts in foreign markets that deal only in metric. As well he said that it is administratively more efficient to use metric throughout the operation.
Going metric for another company, namely La Cidrerie du Quebec Ltee, which exports its ciders to the United States, has meant not only increased exports but a reduction in the number of sizes and the standardization of its containers, resulting in reduced production and inventory costs.
A large percentage of the approximate 500,000 small businesses in Canada is made up of farmers and fishermen. Thus, it is important to know that total Canadian agricultural exports have surpassed $8 billion per year, which represents approximately 50 per cent of the cash receipts of farmers. Over 80 per cent of these export products are shipped to metric countries. This means that more than one third of the cash income of the farmer is dependent upon exports to metric countries.
One particular company that I checked on a week ago today which manufactures copper tubing and other specialty products converted to metric over two years ago. The company advised me that it is not able to keep abreast of its export orders.


The Acting Speaker (Mr. Ethier):: Order, please.


ENERGY CONSERVATION-(A) ABUSE OF CANADIAN HOME INSULATION PROGRAM. (B) INVOLVEMENT OF LOCAL ORGANIZATIONS IN CERTIFICATION PROCESS
Nelson Andrew Riis: Mr. Speaker, on April 1 I asked a question of the Minister of Energy, Mines and Resources (Mr. Lalonde) regarding the Canadian Home Insulation Program. While recognizing that the program is essentially a step in the right direction in terms of energy
Adjournment Debate
conservation, and also recognizing that most of the contractors, firms and individuals involved are doing a first rate job, one must recognize that the program is being seriously abused by some unscrupulous entrepreneurs.
I have personally witnessed what can only be described as misleading advertising on a number of occasions, which gives the impression to the householder that the opportunity is free of charge, essentially with the exception of a nominal sum. What is often missing from the ads is a note that the grant received from the federal government will be considered taxable on next year's return. What must be said of the unscrupulous entrepreneurs is that they are defrauding citizens by asking them to sign blank application forms, giving the story that it is an application form which will be used in the next household. In a variety of fashions it is implied that these unscrupulous entrepreneurs are really an extension of the federal government, an arm of a particular government department.
Perhaps most serious of all is the incorrect information which is filed with the government department concerned. For example, entrepreneurs are possibly using six bags of insulation material in the home while charging the federal government for 30 bags. In some instances, where a very small house is being insulated, more insulation than is actually used is being charged for. The insulators may be charging for three hours of labour at the rate of $37.50 per hour, which is supposedly a very reasonable rate, while actually they are spending only 20 minutes on the job. As one would expect, some of the major offences are occurring in the major metropolitan areas of Montreal, Toronto and Vancouver. While the entrepreneur indicates to the home owner that he will be sending out a copy of the invoice eventually, seldom are these invoices ever received.
As I indicated, I have personally witnessed a number of examples of this fraudulent activity. The police and the government department have been notified, yet very little is being done. What is being done? The government department indicates that where a situation is reported by a home owner and fraudulent activity is suspected, an investigation takes place. In many cases the unsuspecting home owner is not certain whether 6 or 30 bags of insulation were used. In many cases he is not sure whether 20 minutes or 3 hours of work was done. What is being charged is never made known to the individual home owner because of misrepresented information and the invoice not being returned to the home owner. The minister indicated that certification would take place some time this fall. In the meantime, these fraudulent activities have occurred and, presumably, they will continue throughout the summer and into the autumn.
The minister also indicated that in terms of providing some inspection, the Royal Canadian Legion would be involved across the country. I am not suggesting that the Royal Canadian Legion is inefficient. I am certainly not saying anything against the legion. However, one would have to ask what is their expertise when it comes to inspecting home insulation and things of that nature.

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It seems to me that a much more reasonable approach would be to take advantage of the local inspection infrastructure which presently exists in Canadian communities across the country, and at least ask them to conduct spot checks to identify where certain firms are carrying out these fraudulent activities. Thank goodness they are few in number! Why are more firms not being prosecuted when, in fact, they are being brought to the attention of the department and the RCMP?
As this program is bound to continue in one form or another, I would like to suggest that the government consider involving various community groups and organizations where the opportunity would exist to provide local work for people in various communities. Labour would be provided locally as opposed to that on a national or, in some cases, multinational basis. The people involved would certainly feel more accountable. In other words, as the home owner would be approached by someone from his community, perhaps a community agency or group which would be identified, the possibility of fraudulent activities would certainly diminish. Again, it would do a great deal in terms of creating a sense and a need for conservation and for making our homes more energy efficient. It would do a great deal toward that by keeping the work itself within the communities across Canada.
In closing, I would suggest that the idea is certainly a good one, but it has been introduced in haste, without having been prepared with thought.


Roy MacLaren: Mr. Speaker, in responding to the hon. member's earlier question, the minister stated that the overwhelming majority of insulation contractors are honest and are doing a good job. Where there have been abuses reported of the types outlined by the hon. member opposite, there have been investigations and, when required, prosecutions.
More specifically, since 1977, when the government first introduced the Canadian home insulation program, almost one million grants have been made. This has led to significant savings in Canadian home owners' heating costs, regardless of
the fuel used, and it has helped to move our country toward its objective of oil self-sufficiency.
Since the CHIP program was introduced, some 70,000 units have been selected for inspection across the country. As a result of those inspections, 36 contracting companies are presently under investigation. In addition, a further 17 companies are under police investigation, with charges having been laid against 11 companies. Here is clear evidence that the government has been monitoring the industry in order to protect consumers from possible abuse. By inspecting homes which have been insulated and by investigating abuses reported by consumers, the government is keeping this situation under review.
Further, in collaboration with the industry, the government has instituted a certification program which requires insulation contractors to pass examinations before being approved under the CHIP. As hon. members may be aware, the Royal Canadian Legion, as the hon. member has noted, is assisting the Canadian General Standards Board in providing the necessary facilities for the examination of insulation contractor personnel. The CGSB national certification program has already listed 900 of the total of over 2,000 contractors in its certification program. The mandatory date for the use of certified contractors will be November 1.
I should like to remind hon. members that the National Energy Program has a goal to upgrade insulation in 70 per cent of Canadian homes by 1987. The certification program contributes in a real way to the effective administration of the CHIP.
These facts are indicative of the careful supervision being given to the home insulation program and of the government's determination to ensure that Canadians are guaranteed good products and good work. It is a large program and it is one which will pay large dividends in terms of energy conservation and fuel savings for home owners.
[ Translation]


The Acting Speaker (Mr. Ethier):: Order, please. A motion to adjourn the House is now deemed to have been adopted. Accordingly this House stands adjourned until tomorrow at two o'clock p.m.
At 10.30 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, May 20, 1981